As filed with the U.S. Securities and Exchange Commission on July 3, 2019December 23, 2020
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SALESFORCE.COM, INC.
(Exact nameName of registrantRegistrant as specifiedSpecified in its charter)Its Charter)
Delaware | 7372 | 94-3320693 | ||
(State
| (Primary Standard Industrial Classification Code Number) | ( Identification |
Salesforce Tower
415 Mission Street, 3rd Floor
San Francisco,
California 94105
Telephone: (415) 901-7000
(Address, Includingincluding Zip Code, and TelephonePhone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Amy Weaver, Esq.
President and Chief Legal and Corporate Affairs,
General Counsel and SecretaryOfficer
Salesforce Tower
415 Mission Street, 3rd Floor
San Francisco, California 94105
Telephone: (415) 901-7000
(Name, Address, Includingincluding Zip Code, and Telephone Number, Includingincluding Area Code, of Agent for Service)
Copies to:With a copy to:
Andrew J. Nussbaum, Esq.
Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 (212) 403-1000 |
Slack Technologies, Inc.
|
San Francisco, California (415) | Richard A. Kline, Esq. Tad J. Freese, Esq. Mark M. Bekheit, Esq. Latham & Watkins LLP 140 Scott Drive Menlo Park, California 94025 (650) 328-4600 |
Approximate date of commencement of proposed sale of the securities to the public: July 3, 2019, the date on which the preliminary prospectus and tender offer materials are filed and sent to securityholders. The offer cannot, however, be completed prior to the time this Registration Statement becomes effective. Accordingly, any actual sale or purchase of securities pursuant to the offer will occur onlyAs soon as practicable after this Registration Statementregistration statement is effective, subject to the conditions to the transactions described herein.declared effective.
If the securities being registered on this Formform are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, please check the following box:box. ☐
If this Formform is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Formform is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B)13(a) of the SecuritiesExchange Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
CALCULATION OF REGISTRATION FEE
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Title of
| Amount
Registered | Proposed
Maximum Offering Price Per Share | Proposed
Maximum Aggregate Offering Price | Amount of | ||||
Common stock, par value $0.001 per share | N/A | $ | $ | |||||
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|
(1) | Represents the maximum number of shares of salesforce.com, inc. (“Salesforce”) common stock, par value $0.001 per share, estimated to be issuable or subject to stock-based awards that may be assumed by the registrant upon |
(2) |
|
(3) | The |
The registrantRegistrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrantRegistrant shall file a further amendment thatwhich specifically states that this Registration Statement shall thereafter become effective in accordance with Sectionsection 8(a) of the Securities Act of 1933, as amended, or until thisthe Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this documentthe accompanying proxy statement/prospectus is not complete and may change. The registrantbe changed. These securities may not complete the offer and issue these securitiesbe issued until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This documentThe accompanying proxy statement/prospectus is not an offer to sell these securities and does not constitute the registrant is not soliciting an offersolicitation of offers to buy these securities in any statejurisdiction where the offer or jurisdiction in which such offersale is not permitted.
PRELIMINARY AND PRELIMINARY—SUBJECT TO CHANGE,COMPLETION, DATED JULY 3, 2019DECEMBER 23, 2020
Offer by
SAUSALITO ACQUISITION CORP.
an indirect wholly owned subsidiary of
salesforce.com, inc.
to Exchange Each Outstanding Share of Class A Common Stock and
Class B Common Stock of
TABLEAU SOFTWARE, INC.
for
1.103 shares of common stock of salesforce.com, inc.
THE OFFER AND THE WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, EASTERN TIME, AT THE END
Slack Technologies, Inc.
500 Howard Street
San Francisco, California 94105
LETTER TO STOCKHOLDERS OF JULY 31, 2019, UNLESS EXTENDED OR TERMINATED.SLACK TECHNOLOGIES, INC.
Dear Slack Stockholder:
On December 1, 2020, Slack Technologies, Inc. (which we refer to as “Slack” or the “Company”) entered into an Agreement and Plan of Merger (which, as it may be amended from time to time, we refer to as the “merger agreement”) with salesforce.com, inc. (which we refer to as “Salesforce”), a Delaware corporation, through its indirect wholly owned subsidiary Sausalito Acquisition Corp.Skyline Strategies I Inc. (which we refer to as “Merger Sub I”), a Delawareand Skyline Strategies II LLC (which we refer to as “Merger Sub II”). The merger agreement provides for the merger of Merger Sub I with and into Slack, with Slack continuing as the surviving corporation (which we refer to as the “Offeror”“first merger”), is offering, uponimmediately followed by a second merger of the terms and subject to the conditions set forth in this document and in the accompanying letter of transmittal, to exchange for each outstanding share of Class A common stock of Tableau Software, Inc., a Delawaresurviving corporation (which we refer to as “Tableau”), par value $0.0001 per share (which we refer to as “Tableau Class A common stock”), and Class B common stock of Tableau, par value $0.0001 per share (which we refer to as “Tableau Class B common stock,” and togetherinto either Merger Sub II or Salesforce, with “Tableau Class A common stock,” “Tableau common stock” and such shares of Tableau common stock, “Tableau shares”), validly tendered and not validly withdrawn in the offer, 1.103 shares ofeither Merger Sub II or Salesforce common stock, par value $0.001 per share (which we refer to as “Salesforce common stock” and such shares of Salesforce common stock, “Salesforce shares”), together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.
We refer to the abovecontinuing as the “transaction consideration.”
The Offeror’s obligation to accept for exchange Tableau shares validly tendered (and not validly withdrawn) pursuant to the offer is subject to the satisfaction or waiver by the Offeror of certain conditions, including the condition that, prior to the expiration of the offer, there have been validly tendered and not validly withdrawn a number of Tableau shares that, upon the consummation of the offer (assuming that shares of Tableau Class B common stock validly tendered (and not validly withdrawn) will convert, on a one-to-one basis, into shares of Tableau Class A common stock upon the consummation of the offer), together with Tableau shares then owned by Salesforce and the Offeror (if any), would represent at least a majority of the aggregate voting power of the Tableau shares outstanding immediately after the consummation of the offersurviving company, as applicable (which we refer to as the “minimum tender condition”“second merger” and together with the first merger, the “mergers”),.
Slack stockholders as more fully described under “The Offer—Conditions of the Offer.”close of business on the record date are invited to virtually attend a special meeting of Slack stockholders , 2021, at , Pacific Time, to consider and vote upon a proposal to adopt the merger agreement and approve the transactions contemplated thereby, a non-binding advisory proposal to approve certain compensation that may be paid or become payable to Slack’s named executive officers that is based on or otherwise relates to the mergers, and a proposal to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes at the time of the special meeting to adopt the merger agreement and approve the transactions contemplated thereby.
The offer is being made pursuantSubject to an Agreementthe terms and Planconditions of Mergerthe merger agreement, at the first effective time of the first merger (which we refer to as the “first effective time”), each outstanding share of Slack Class A common stock and Slack Class B common stock (other than shares of Slack common stock owned directly or indirectly by Salesforce, Slack or any of their respective subsidiaries immediately prior to the first effective time, shares of Slack common stock as to which dissenters’ rights have been properly perfected, and shares of Slack common stock covered by Slack restricted share awards) will be converted in the first merger into the right to receive 0.0776 shares of Salesforce common stock and the right to receive $26.79 in cash, without interest (which we refer to as the “merger agreement”consideration”).
Based on the closing price of Salesforce common stock on November 24, 2020, the last full unaffected trading day before the first published rumor regarding a potential merger transaction, the value of the per share merger consideration payable to holders of Slack common stock upon completion of the first merger was approximately $47.03. Based on the closing price of Salesforce common stock on , dated as2021, the last practicable date before the date of June 9, 2019, among Salesforce, the Offeror and Tableau. A copyproxy statement/prospectus accompanying this notice, the value of the merger agreementconsideration payable to holders of Slack common stock upon completion of the first merger was approximately $ . Slack stockholders should obtain current stock price quotations for Salesforce common stock and Slack common stock. Salesforce common stock is attached to this document as Annex A.traded on the New York Stock Exchange under the symbol “CRM,” and Slack common stock is traded on the New York Stock Exchange under the symbol “WORK.”
The purpose of the offer is for Salesforce to acquire control of, and ultimately the entire equity interest in, Tableau. The offer is the first step in Salesforce’s plan to acquire all of the outstanding Tableau shares. If the offer is completed and as a second step in such plan, Salesforce intends to promptly consummate a merger of the Offeror with and into Tableau, with Tableau surviving the merger (which we refer to as the “merger”). The purpose of the merger is for Salesforce to acquire all Tableau shares that it did not acquire in the offer. In the merger, each outstanding Tableau share that was not acquired by Salesforce or the Offeror (other than certain converted or cancelled shares, as described further in this document) will be converted into the right to receive the transaction consideration. Upon the consummation of the merger, the Tableau business will be held in an indirect wholly owned subsidiary of Salesforce, and the former Tableau stockholders will no longer have any direct ownership interest in the surviving corporation. If the offer is completed, such that Salesforce accordingly owns at least a majority of the aggregate voting power of Tableau’s outstanding common stock, the merger will be governed by Section 251(h) of the General Corporation Law of the State of Delaware (which we refer to as the “DGCL”), and accordingly no stockholder vote will be required to complete the merger. TheSlack board of directors of Tableau has unanimously (i) determined that the terms of the merger agreement and the transactions contemplated by the merger agreement, including the offer, the merger and the issuance of Salesforce shares in connection therewith, are fair to, and in the best interests of, Tableau and its stockholders; (ii) determined that it is in the best interests of Tableau and its stockholders and declared it advisable to enter into the merger agreement; (iii) approved the execution and delivery by Tableau of the merger agreement, the performance by Tableau of its covenants and agreements contained in the merger agreement and the consummation of the offer, the merger and the other transactions contemplated by the merger agreement upon the terms and subject to the conditions contained in the merger agreement; and (iv) resolved to recommend that the stockholders of Tableau accept the offer and tender their shares of Tableau common stock to the Offeror pursuant to the offer.
The Salesforce board of directors also determined that the merger agreement and the transactions contemplated by the merger agreement, including the offer and the merger and the issuance of Salesforce shares in the offer and merger,mergers, are advisable and fair to, and in the best interests of, SalesforceSlack and its stockholders; has unanimously approved and declared advisable the merger agreement and the transactions contemplated thereby, including the mergers; and unanimously recommends that Slack stockholders and approvedvote “FOR” the execution and delivery by Salesforceadoption of the merger agreement.agreement and “FOR” the other proposals described in the accompanying proxy statement/prospectus.
Slack will hold a virtual special meeting of its stockholders to consider certain matters relating to the mergers. Salesforce and Slack cannot complete the mergers unless, among other things, Slack stockholders adopt the merger agreement and approve the transactions contemplated thereby.
Your vote is very important. To ensure your representation at the special meeting, complete and return the applicable enclosed proxy card or submit your proxy by phone or the Internet. Please vote promptly whether or not you expect to virtually attend the special meeting. Submitting a proxy now will not prevent you from being able to vote at the special meeting.
The proxy statement/prospectus accompanying this notice is also being delivered to Slack’s stockholders as Salesforce’s prospectus for its offering of shares of Salesforce common stock in connection with the mergers.
The obligations of Salesforce and Slack to complete the mergers are subject to the satisfaction or waiver of the conditions set forth in the merger agreement, a copy of which is listedincluded as part of the accompanying proxy statement/prospectus. The proxy statement/prospectus provides you with detailed information about the mergers. It also contains or references information about Salesforce and Slack and certain related matters. You are encouraged to read the proxy statement/prospectus carefully and in its entirety. In particular, you should carefully read the section entitled “Risk Factors” for a discussion of risks you should consider in evaluating the mergers and the issuance of shares of Salesforce common stock in connection with the mergers and how they will affect you.
Sincerely, |
Stewart Butterfield Co-Founder, Chief Executive Officer and Chairperson of the Board of Directors |
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the accompanying proxy statement/prospectus or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.
The proxy statement/prospectus is dated , 2021 and is first being mailed to stockholders of Slack on or about .
Slack Technologies, Inc.
500 Howard Street
San Francisco, California 94105
NOTICE OF THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD VIRTUALLY VIA THE INTERNET ON
Notice is hereby given that a special meeting of stockholders of Slack Technologies, Inc. (which we refer to as “Slack”) will be held on , 2021 at , Pacific Time via a live interactive audio webcast on the New York Stock ExchangeInternet (which we refer to as the “NYSE”“Slack special meeting”). You will be able to vote and submit your questions at www.virtualshareholdermeeting.com/WORK2021SM during the meeting. We are holding the special meeting for the following purposes, which are more fully described in the accompanying proxy statement/prospectus:
to adopt the Agreement and Plan of Merger, dated as of December 1, 2020 (which, as it may be amended from time to time, we refer to as the “merger agreement”), among salesforce.com, inc. (which we refer to as “Salesforce”), Skyline Strategies I Inc. (which we refer to as “Merger Sub I”), Skyline Strategies II LLC (which we refer to as “Merger Sub II”) underand Slack and approve the symbol “CRM,”transactions contemplated thereby (which we refer to as the “merger proposal”); and Tableau Class A common stock
to approve, by a non-binding advisory vote, certain compensation that may be paid or become payable to Slack’s named executive officers that is listedbased on or otherwise relates to the NYSE undermergers contemplated by the symbol “DATA.” The Tableau Class B common stockmerger agreement (which we refer to as the “non-binding compensation advisory proposal”).
Slack stockholder approval of the merger proposal is not publicly traded but converts, on a one-for-one basis, into Tableau Class A common stockrequired to complete the mergers as contemplated by the merger agreement. Slack stockholders will also be asked to approve the non-binding compensation advisory proposal. Slack will transact no other business at the electionSlack special meeting. The record date for the Slack special meeting has been set as , 2021. Only Slack stockholders of record as of the holder. Each shareclose of Tableau Class B common stock validly tenderedbusiness on such record date are entitled to notice of, and not validly withdrawn pursuant to vote at, the exchange offer will automatically convert into one share of Tableau Class A common stock upon consummationSlack special meeting via the Slack special meeting website or any adjournments and postponements of the exchange offer.
The offer andSlack special meeting. For additional information regarding the merger, taken together, are intended to qualify as a reorganization for U.S. federal income tax purposes. Holders of Tableau shares should readSlack special meeting, see the section entitled “Material U.S. Federal Income Tax Consequences” for a“Special Meeting of Slack Stockholders.”
The Slack board of directors unanimously recommends that you vote “FOR” the merger proposal and “FOR” the non-binding compensation advisory proposal.
The Slack proposals are described in more detailed discussion of certain U.S. federal income tax consequencesdetail in the accompanying proxy statement/prospectus, which you should read carefully and in its entirety before you vote. A copy of the offer andmerger agreement is attached as Annex A to the accompanying proxy statement/prospectus.
PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE SLACK SPECIAL MEETING VIA THE SLACK SPECIAL MEETING WEBSITE. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. FOR FURTHER INFORMATION CONCERNING THE PROPOSALS BEING VOTED UPON, USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS.
Your vote is very important. Approval of the merger proposal by the Slack stockholders is a condition to holdersthe mergers and requires the affirmative vote of Tableau shares.a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote on the proposal. Slack stockholders are requested to complete, date, sign and return the enclosed proxy in the envelope provided, which requires no postage if mailed in the United States, or to submit their votes by phone or the Internet. Simply follow the instructions provided on the enclosed proxy card. Abstentions, failure to submit a proxy or vote via the Slack special meeting website and broker non-votes will have the same effect as a vote “AGAINST” the merger proposal.
By Order of the Board of Directors, |
David Schellhase General Counsel and Corporate Secretary San Francisco, California |
For a discussion of certain factors that Tableau stockholders should consider in connection with the offer, please read the section of this document entitled “Risk Factors” beginning on page 27.
REFERENCES TO ADDITIONAL INFORMATION
You are encouraged to read this entire document and the related letter of transmittal carefully, including the annexes and information referred to or incorporatedThis proxy statement/prospectus incorporates by reference important business and financial information about salesforce.com, inc. (which we refer to as “Salesforce”) and Slack Technologies, Inc. (which we refer to as “Slack”) from other documents that are not included in or delivered with this document.
Neitherproxy statement/prospectus, including documents that Salesforce nor the Offeror has authorized any person to provide any information or to make any representation in connectionand Slack have filed with the offer other than the information contained or incorporated by reference in this document, and if any person provides any information or makes any representation of this kind, that information or representation must not be relied upon as having been authorized by Salesforce or the Offeror.
Neither the U.S. Securities and Exchange Commission (which we refer to as the “SEC”) nor. For a listing of documents incorporated by reference herein, see the section entitled “Where You Can Find More Information.” This information is available for you to review free of charge through the SEC’s website at www.sec.gov.
You may request copies of this proxy statement/prospectus and any state securities commission has approvedof the documents incorporated by reference herein or disapprovedother information concerning Salesforce or Slack, without charge, upon written or oral request to the applicable company’s principal executive offices. The respective addresses and phone numbers of such principal executive offices are listed below.
Salesforce | Slack | |
salesforce.com, inc. Salesforce Tower 415 Mission Street, 3rd Floor San Francisco, California 94105 Attention: Investor Relations (415) 536-6250 | Slack Technologies, Inc. 500 Howard Street San Francisco, California 94105 Attention: Investor Relations (415) 630-7943 |
To obtain timely delivery of these securitiesdocuments before the Slack special meeting, Slack stockholders must request the information no later than , 2021 (which is five business days before the date of the Slack special meeting).
In addition, if you have questions about the mergers or passed upon the adequacy or accuracythis proxy statement/prospectus, would like additional copies of this document. Any representationproxy statement/prospectus or need to obtain proxy cards or other information related to the contraryproxy solicitation, contact MacKenzie Partners, Inc., the proxy solicitor for Slack, toll-free at (800) 322-2885, or for brokers and banks, collect at (212) 929-5500, or by email at proxy@mackenziepartners.com. You will not be charged for any of these documents that you request.
ABOUT THIS PROXY STATEMENT/PROSPECTUS
This document, which forms part of a registration statement on Form S-4 filed with the SEC by Salesforce (File No. 333- ), constitutes a prospectus of Salesforce under Section 5 of the Securities Act of 1933, as amended (which we refer to as the “Securities Act”) with respect to the shares of common stock of Salesforce, par value $0.001 per share (which we refer to as “Salesforce common stock”) to be issued to Slack stockholders pursuant to the Agreement and Plan of Merger, dated as of December 1, 2020 (which, as it may be amended from time to time, we refer to as the “merger agreement”), among Salesforce, Skyline Strategies I Inc. (which we refer to as “Merger Sub I”), Skyline Strategies II LLC (which we refer to as “Merger Sub II”) and Slack.
This document also constitutes a notice of meeting and proxy statement of Slack under Section 14(a) of the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”).
Salesforce has supplied all information contained or incorporated by reference herein relating to Salesforce, and Slack has supplied all information contained or incorporated by reference herein relating to Slack.
You should rely only on the information contained in or incorporated by reference herein in connection with any vote, the giving or withholding of any proxy or any investment decision in connection with the merger agreement. Salesforce and Slack have not authorized anyone to provide you with information that is a criminal offense.
Thedifferent from that contained in or incorporated by reference herein. This proxy statement/prospectus is dated , 2021, and you should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein. Further, you should not assume that the information incorporated by reference herein is accurate as of any date other than the date of the incorporated document. Neither the mailing of this preliminary prospectus/offerproxy statement/prospectus to exchange is July 3, 2019.Slack stockholders nor the issuance by Salesforce of shares of Salesforce common stock pursuant to the merger agreement will create any implication to the contrary.
All currency amounts referenced in this proxy statement/prospectus are in U.S. dollars.
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This document incorporates by reference important business and financial information about Salesforce, Tableau and their respective subsidiaries from documents filed with the SEC that have not been included in or delivered with this document. This information is available without charge at the SEC’s website at www.sec.gov, as well as from other sources. See “Where to Obtain More Information.”
You can obtain the documents incorporated by reference in this document by requesting them in writing or by telephone at the following address and telephone number:
salesforce.com, inc.
Salesforce Tower
415 Mission Street, 3rd Floor
San Francisco, California 94105
Attention: Investor Relations
(415) 536-6250
In addition, if you have questions about the offer or the merger, or if you need to obtain copies of this document and the letter of transmittal or other documents incorporated by reference in this document, you may contact the information agent for this transaction. You will not be charged for any of the documents you request.
The Information Agent for the Offer is:
509 Madison Avenue
Suite 1206
New York, NY 10022
Shareholders Call Toll Free: (800) 662-5200
Banks & Brokers Call Collect: (203) 658-9400
E-mail: DATA@morrowsodali.com
If you would like to request documents, please do so by July 25, 2019, in order to receive them before the expiration of the offer.
Information included in this document relating to Tableau, including but not limited to the descriptions of Tableau and its business and the information under the headings “The Offer—Tableau’s Reasons for the Offer and the Merger; Recommendation of the Tableau Board of Directors,” “The Offer—Opinion of Tableau’s Financial Advisor” and “The Offer—Interests of Certain Persons in the Offer and the Merger,” also appears in the Solicitation/Recommendation Statement on Schedule 14D-9 dated as of the date of this document and filed by Tableau with the SEC (which we refer to as the “Schedule 14D-9”). The Schedule 14D-9 is being mailed to holders of Tableau shares as of the date of this document.
QUESTIONS AND ANSWERS ABOUT THE OFFERMERGERS AND THE MERGERSLACK SPECIAL MEETING
BelowThe following are some of theanswers to certain questions that you as a holder of Tableau shares may have regarding the offer and the merger, and answers to those questions.Slack special meeting. You are urged to read carefully read the remainder of this document and the related letter of transmittal and the other documents to which we have referred because the information contained in this section andmay not provide all the information that might be important to you in the “Summary” is not complete.determining how to vote. Additional important information is also contained in the remainder of this documentannexes to, and the related letter of transmittal. See “Where to Obtain More Information.” As useddocuments incorporated by reference in, this document, unless otherwise indicated ordocument.
Q: | Why am I receiving this proxy statement/prospectus? |
A: | You are receiving this proxy statement/prospectus because Salesforce, Slack, Merger Sub I and Merger Sub II have entered into the merger agreement. The merger agreement provides for two mergers: (a) Merger Sub I will be merged with and into Slack, with Slack continuing as the surviving corporation (which we refer to as the “first merger”), and (b) immediately following the first merger, Slack, as the surviving corporation in the first merger, will be merged with and into either (i) if a revised structure notice (as defined in “—The Mergers and the Merger Agreement”) has not been delivered by Salesforce before the closing, Merger Sub II, with Merger Sub II continuing as a wholly owned subsidiary of Salesforce, or (ii) if a revised structure notice has been delivered by Salesforce before the closing, Salesforce, with Salesforce surviving the second merger (which we refer to as the “second merger” and together with the first merger, the “mergers”), and your vote is required in connection with the mergers. The merger agreement, which governs the terms of the mergers, is attached to this proxy statement/prospectus as Annex A. |
The merger agreement must be adopted by the context so requires, “Salesforce” or “we” refers to salesforce.com, inc. and its consolidated subsidiaries;Slack stockholders in accordance with the “Offeror” refers to Sausalito Acquisition Corp., an indirect wholly owned subsidiaryGeneral Corporation Law of Salesforce; and “Tableau” refers to Tableau Software, Inc. and its consolidated subsidiaries.
Who is offering to buy my Tableau shares?
Salesforce, through the Offeror, its indirect wholly owned subsidiary, is making this offer to exchange Salesforce common stock for Tableau shares. Salesforce is a global leader in customer relationship management, or CRM, technology that enables companies to improve their relationships and interactions with customers. Salesforce introduced its first CRM solution in 2000, and has since expanded its service offerings into new areas and industries with new editions, features and platform capabilities. Salesforce’s core mission is to empower its customersState of every size and industry to connect with their customers in new ways through existing and emerging technologies, including cloud, mobile, social, Internet of Things and artificial intelligence. Salesforce’s Customer Success Platform—including sales force automation, customer service and support, marketing automation, digital commerce, community management, industry-specific solutions, analytics, integration solutions, application development, Internet of Things integration, collaborative productivity tools, its AppExchange, which is its enterprise cloud marketplace, and its professional cloud services—provides the tools customers need to succeed in a digital world.
On June 9, 2019, Salesforce, the Offeror and Tableau entered into an Agreement and Plan of Merger, whichDelaware (which we refer to as the “merger agreement.”
What“DGCL”) in order for the mergers to be consummated. Slack is holding a virtual special meeting of its stockholders (which we refer to as the “Slack special meeting”) to obtain that approval. Slack stockholders will also be asked to vote on a non-binding advisory proposal to approve certain compensation that may be paid or become payable to Slack’s named executive officers that is based on or otherwise relates to the mergers and to approve the adjournment of the special meeting, from time to time, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes at the classes and amountstime of Tableau securities that Salesforcethe special meeting to approve the merger proposal. Your vote is offeringvery important. We encourage you to acquire?
Salesforce is seekingsubmit a proxy to acquire all issued and outstandinghave your shares of Tableau Class A common stock, par value $0.0001 per share, of Slack (which we refer to as “Slack Class A common stock”) and Tableau Class B common stock, par value $0.0001 per share.
What will I receive for my Tableau shares?
Salesforce, through the Offeror, is offering to exchange for each outstanding share, of TableauSlack (which we refer to as “Slack Class B common stock” and collectively with the Slack Class A common stock, the “Slack common stock”) voted as soon as possible.
Q: | When and where will the special meeting take place? |
A: | The Slack special meeting will be held virtually via the Internet at Pacific Time, on , 2021. The Slack special meeting will be held solely via live webcast and there will not be a physical meeting location. Slack stockholders will be able to attend the Slack special meeting online and vote their shares electronically during the meeting by visiting www.virtualshareholdermeeting.com/WORK2021SM, which we refer to as the “Slack special meeting website.” |
Q: | What matters will be considered at the special meeting? |
A: | The Slack stockholders are being asked to consider and vote on: |
a proposal to adopt the merger agreement and Tableau Class B common stock validly tendered and not validly withdrawn inapprove the offer, 1.103 shares of Salesforce common stock, par value $0.001 per share, together with cash in lieu of any fractional shares of Salesforce common stocktransactions contemplated thereby (which we refer to as the “transaction consideration”“merger proposal”), without interest; and subject
to reduction for any applicable withholding taxes.
If you do not tender your shares intoapprove, by a non-binding advisory vote, certain compensation that may be paid or become payable to Slack’s named executive officers that is based on or otherwise relates to the offer butmergers contemplated by the merger is completed (pursuant to Section 251(h) of the DGCL without a stockholder vote), you will also receive the transaction consideration in exchange for your shares of Tableau common stock.
What is the difference between Tableau Class A common stock and Tableau Class B common stock? Are they to be exchanged for the same consideration pursuant to the Offer? Will shares of Tableau Class B common stock convert into shares of Tableau Class A common stock in the offer?
Under Tableau’s amended and restated certificate of incorporationagreement (which we refer to as the “Tableau charter”“non-binding compensation advisory proposal”), each share.
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Q: | Is my vote important? |
A: | Yes. Your vote is very important. The mergers cannot be completed unless the merger proposal is approved by the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote on the proposal. Only Slack stockholders as of the close of business on the record date are entitled to vote at the Slack special meeting. The board of directors of Slack (which we refer to as the “Slack board”) unanimously recommends that such Slack stockholders vote “FOR” the approval of the merger proposal and “FOR” the approval of the non-binding compensation advisory proposal. |
Q: | If my shares of Slack common stock are held in “street name” by my broker, bank or other nominee, will my broker, bank or other nominee automatically vote those shares for me? |
A: | If your shares are held through a broker, bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” The “record holder” of such shares is your broker, bank or other nominee, and not you. If this is the case, this proxy statement/prospectus has been forwarded to you by your broker, bank or other nominee. You must provide the record holder of your shares with instructions on how to vote your shares. Otherwise, your broker, bank or other nominee may not vote your shares on any of the proposals to be considered at the Slack special meeting. A so called “broker non-vote” will result if your broker, bank or other nominee returns a proxy but does not provide instruction as to how shares should be voted on a particular matter. |
Under the current rules of Tableau Class Athe NYSE, brokers, banks or other nominees do not have discretionary authority to vote on any of the proposals at the Slack special meeting. Because the only proposals for consideration at the Slack special meeting are nondiscretionary proposals, it is not expected that there will be any broker non-votes at the Slack special meeting. However, if there are any broker non-votes, they will have (i) the same effect as a vote “AGAINST” the merger proposal and (ii) no effect on the non-binding compensation advisory proposal.
Q: | What Slack stockholder vote is required for the approval of the merger proposal and non-binding compensation advisory proposal? |
A: | The merger proposal. Approval of the merger proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as a vote “AGAINST” the proposal. Failure to vote on the merger proposal will have the same effect as a vote “AGAINST” the merger proposal. |
The non-binding compensation advisory proposal. Approval of the non-binding compensation advisory proposal requires the affirmative vote of a majority of the voting power of all issued and outstanding shares of Slack common stock entitlespresent via the holder to one vote while each share of Tableau Class B
common stock generally entitles the holder to 10 votes. Each share of Tableau Class B common stock is convertible at any timeSlack special meeting website or by proxy at the optionSlack special meeting and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal, and broker non-votes will have no effect on the outcome of the holder into one share of Tableau Class A common stock. In addition, each share of Tableau Class B common stock will convert automatically into one share of Tableau Class A common stock upon any transfer, whether or not for value, subject to certain exceptions set forth in the Tableau charter (none of such exceptions being applicable to the consummation of the offer). Accordingly, shares of Tableau Class B common stock that are validly tendered (and not validly withdrawn) in the offer will automatically convert, on a one-to-one basis, into Tableau Class A common stock upon the consummation of the offer.
If the offer is successfully completed, holders of shares of Tableau Class A common stock and Tableau Class B common stock that validly tender (and do not validly withdraw) their shares into the offer will both receive the same transaction consideration. In the merger, each outstanding share of Tableau Class A common stock and Tableau Class B common stock (other than certain converted or cancelled shares, as described further invote. As an advisory vote, this document) that were not acquired by the Offeror in the offer will be converted into the right to receive the same transaction consideration.
See “The Offer—Tableau Class A Common Stock and Tableau Class B Common Stock.”
What will happen to my Tableau stock options?
The offer is made only for shares of Tableau common stock andproposal is not made for any options to purchase sharesbinding upon Slack or the Slack board or Salesforce or the board of Tableau common stock (each, a “Tableau option”). If you hold a Tableau option that is vested and exercisable, you may, in accordance with the terms and conditions governing such Tableau option, and subject to Tableau’s insider trading policy and any applicable blackout period(s), exercise the Tableau option for sharesdirectors of Tableau common stock and thereafter participate in the offer, subject to the terms and conditions governing the offer. Any Tableau options that remain outstanding as of the effective time of the merger will be treated in accordance with the merger agreement.
At the effective time of the mergerSalesforce (which we refer to as the “effective time”“Salesforce board”), each optionand approval of this proposal is not a condition to purchase sharescompletion of Tableau common stock that is outstanding and unexercised immediately prior to the effective time (each, a “Tableau option”) (whether vested or unvested) held by any former employee of Tableaumergers.
Q: | Who will count the votes? |
A: | The votes at the Slack special meeting will be counted by an independent inspector of elections appointed by the Slack board. |
Q: | What will Slack stockholders receive if the mergers are completed? |
A: | As a result of the first merger, each share of Slack common stock issued and outstanding immediately prior to the effective time of the first merger (which we refer to as the “first effective time”) (other than any |
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excluded shares and dissenting shares, as defined in the section entitled “The Merger Agreement—Merger Consideration,” and any Slack restricted stock awards, as defined and discussed in the Question and Answer below, not treated as shares of Slack common stock) will be |
If you receive the merger consideration and would otherwise be entitled to receive the transaction consideration in respect of each “net share” covered by such Tableau option, where “net share” means the quotient obtained by dividing (a) the product of (1) the excess, if any, of the “pera fractional share cash equivalent consideration” (defined below) over the per share exercise price applicable to the Tableau option, multiplied by (2) the number of shares subject to the Tableau option immediately prior to the effective time, by (b) the per share cash equivalent consideration, less applicable tax withholdings. As used in the offer to exchange, the “per share cash equivalent consideration” means the product (rounded to the nearest cent) obtained by multiplying (i) the exchange ratio by (ii) the Salesforce trading price.
At the effective time, each Tableau option not held by a former employee of Tableau at the effective time will be assumed and automatically converted into an option to purchase the number of shares of Salesforce common stock, (rounded downyou will receive cash in lieu of such fractional share, and you will not be entitled to dividends, voting rights or any other rights in respect of such fractional share. For additional information regarding the nearest whole share) determined by multiplyingmerger consideration, see the number of shares of Tableau common stock subjectsections entitled “The Merger—Consideration to the Tableau option immediately prior to the effective time by the exchange ratio (each, an “adjusted option”). Each adjusted option will have an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per share exercise price of the Tableau option by the exchange ratioSlack Stockholders” and will otherwise be subject to the same terms and conditions as were applicable to such Tableau option prior to the effective time.“The Merger Agreement—Merger Consideration.”
Q: | What is the difference between Slack Class A common stock and Slack Class B common stock? Will they receive the same merger consideration? |
A: | Under Slack’s amended and restated certificate of incorporation (which we refer to as the “Slack charter”), each share of Slack Class A common stock entitles the holder to one vote while each share of Slack Class B common stock entitles the holder to 10 votes. If the first merger is successfully completed, holders of shares of Slack Class A common stock and Slack Class B common stock will both receive the same merger consideration. |
Q: | What will happen to my Slack options? |
A: | At the first effective time, each option to purchase shares of Slack common stock (each of which we refer to as a “Slack option”) that is held by an individual who is not an employee of Slack and that is outstanding and unexercised immediately prior to the first effective time will be cancelled and such holders will be entitled to receive the merger consideration in respect of the number of shares of Slack common stock covered by the Slack option, less a number of shares having a value equal to the total exercise price applicable to such option. At the first effective time, all other Slack options that are outstanding and unexercised immediately prior to the first effective time of Slack will be assumed and automatically converted into an option (which we refer to as an “adjusted option”) to purchase a number of shares of Salesforce common stock determined by multiplying the number of shares of Slack common stock equal to the number of shares covered by the Slack option by the option/RSU conversion ratio (as defined below), at a per share exercise price equal to the per share exercise price of the Slack option divided by the option/RSU conversion ratio. The adjusted option will otherwise be subject to the same terms and conditions as were applicable to the corresponding Slack option prior to the first effective time, including vesting terms. |
As used in these questions and answers,this proxy statement/prospectus, (1) the “Salesforce trading price” means the volume weighted average closing price of Salesforce common stock as reported on the NYSE for the ten10 consecutive trading day period ending on the trading day immediately prior topreceding the acceptance time, andclosing date, (2) the “exchange ratio” means 1.103.
0.0776, and (3) the “option/RSU conversion ratio” means the sum of (a) the exchange ratio and (b) the cash consideration divided by the Salesforce trading price. See “Mergerthe section entitled “The Merger Agreement—Treatment of TableauSlack Equity Awards.Awards” for more information.
Q: | What will happen to my Slack restricted stock units and restricted share awards? |
A: | At the first effective time, each Slack restricted stock unit (each of which we refer to as a “Slack RSU award”) and each award of restricted Slack common stock (each of which we refer to as a “Slack restricted share award”) that is outstanding immediately prior to the first effective time held by a non-employee director of Slack will vest as of the first effective time and will be cancelled and converted into the right to receive the merger consideration in respect of each share of Slack common stock subject to such Slack RSU award or Slack restricted share award. |
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What will happen to my Tableau restricted stock units and performance share units?
The offer is made only for shares of Tableau common stock and is not made for any restricted stock units or performance share units relating to shares of Tableau common stock (which we refer to as “Tableau RSU awards” and “Tableau PSU awards,” respectively). Any Tableau RSU awards and Tableau PSU awards that remain outstanding as of the effective time of the merger will be treated in accordance with the merger agreement.
At the first effective time, each TableauSlack RSU award that is outstanding immediately prior to the effective time held by a non-employee director of Tableau will vest as of the effective time and will be cancelled and converted into the right to receive the transaction consideration in respect of each share of Tableau common stock subject to(other than any such Tableau RSU award.
At the effective time, each Tableau RSU award held by an individual who is not a any current or former non-employee director of Tableau at the effective time director) will be assumed and automatically converted into a restricted stock unit on the same terms and conditions(each of which we refer to as were applicable to such Tableauan “adjusted RSU award prior to the effective time,award”) with respect to a number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of TableauSlack common stock subject to the TableauSlack RSU award by the exchangeOption/RSU conversion ratio. Each converted Tableauadjusted RSU award will be subject to the same terms and conditions as were applicable to such Tableauthe corresponding Slack RSU award prior to the first effective time, except that it will vest after the effective time solely based on continued service to Salesforce and its affiliates.including vesting terms.
At the first effective time, each Tableau PSUSlack restricted share award (other than any such award held by any current or former non-employee director) that is outstanding immediately prior to the first effective time will be assumed and automatically converted into a restricted stock unitshare award (each of which we refer to as an “adjusted restricted share award”) with respect to a number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of TableauSlack common stock subject to the Tableau PSUSlack restricted share award by the exchange ratio; 0.1804; provided that the numberholder of shares of Tableau common stock subjecta Slack restricted share award is entitled to a Tableau PSU award equalscash in an amount equal to such fractional share multiplied by $260.50, rounded to the number of shares that would have vested based on the achievement of performance at target levels.nearest cent. Each converted Tableau PSUadjusted restricted share award will be subject to the same terms and conditions as were applicable to such Tableau PSUthe corresponding Slack restricted share award prior to the first effective time, including vesting terms except that itany applicable repurchase price per share of Salesforce common stock (rounded up to the nearest whole cent) will vest afterbe determined by dividing the effective time solely based on continued service to Salesforce and its affiliates.per share repurchase price of the Slack restricted share award by 0.1804.
See “Mergerthe section entitled “The Merger Agreement—Treatment of TableauSlack Equity Awards.Awards” for more information.
What will happen to the Tableau Employee Stock Purchase Plan?
Q: | What will happen to the Slack Employee Stock Purchase Plan? |
Any Tableau employee who is not a participant in the ESPP
Prior to making a change of recommendation for any reason set forth above, Slack must provide Salesforce with four business days’ prior written notice advising Salesforce that the Slack board intends to make a change of recommendation. The notice must specify in reasonable detail the reasons for such change of recommendation due to an intervening event, or the material terms and conditions of the acquisition proposal (including a copy of any proposed definitive agreement) for any change of recommendation due to a superior proposal. In each case, Slack must cause its representatives to negotiate in good faith (to the extent Salesforce desires to negotiate) any proposal by Salesforce to amend the merger agreement in a manner that would eliminate the need for the Slack board to make such change of recommendation, and the Slack board must make the required determination regarding its fiduciary duties again at the end of such four business day negotiation period (after taking into account in good faith the amendments to the merger agreement proposed by Salesforce, if any). With respect to any change of recommendation in response to a superior proposal, if there is any material amendment, revision or change to the terms of the then-existing superior proposal (including any revision to the amount, form or mix of consideration proposed to be received by Slack stockholders as a result of such superior proposal), Slack must notify Salesforce of each such amendment, revision or change and the applicable four-day business period will be extended until at least three business days after the time that Salesforce receives notification of such revision.
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An “intervening event” for purposes of the merger agreement means any change, effect, development, circumstance, condition, state of facts, event or occurrence that is material to Slack and its subsidiaries, taken as a whole, and was not known by or reasonably foreseeable to Slack or the Slack board as of or before December 1, 2020 (the date of the merger agreement), except that in no event will the following events, changes or developments constitute an “intervening event”: (a) the receipt, existence or terms of an acquisition proposal or any inquiry or communications relating thereto or any matter relating thereto or consequence thereof, (b) changes in the market price or trading volume of the Slack Class A common stock, the Salesforce common stock or any other securities of Slack, Salesforce or their respective subsidiaries, or any change in credit rating or the fact that Slack meets or exceeds (or that Salesforce fails to meet or exceed) internal or published estimates, projections, forecasts or predictions for any period, (c) changes in general economic, political or financial conditions or markets (including changes in interest rates, exchange rates, stock, bond and/or debt prices), (d) changes in GAAP, other applicable accounting rules or applicable law or, in any such case, changes in the interpretation thereof or (e) natural disasters, epidemics or pandemics (including the existence and impact of the COVID-19 pandemic).
Nothing in the merger agreement prohibits Slack or the Slack board from (a) disclosing to Slack stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, (b) making any “stop, look and listen” communication to Slack stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act, or (c) making any legally required disclosure to Slack stockholders with regard to an acquisition proposal, in each case so long as any such disclosure (x) includes an express reaffirmation of the Slack board’s recommendation that Slack stockholders approve the transaction contemplated by the merger agreement, including the first merger, and adopt the merger agreement and (y) does not include any statement that constitutes, and does not otherwise constitute, a change of recommendation under the merger agreement.
From the date of the merger agreement until the earlier of the first effective time or the date (if any) on which the merger agreement is terminated, to the extent permitted by applicable law, Slack will give, and will cause each of its subsidiaries to give, Salesforce and its representatives reasonable access during normal business hours and upon reasonable advance notice to Slack’s offices, properties, contracts, personnel, books and records (so long as such access does not unreasonably interfere with Slack’s business), and Slack will use reasonable best efforts, and will cause each of its subsidiaries to furnish as promptly as practicable to Salesforce all information concerning Slack’s business, properties, offices, contracts and personnel as Salesforce reasonably requests. However, Slack is not required to provide access to or disclose information that may not be disclosed pursuant to contractual or legal restrictions, that is subject to attorney-client, attorney work product or other legal privilege, or in the good-faith judgment of Slack that would violate applicable law; provided that Slack will use commercially reasonable efforts to make alternative arrangements for disclosure that do not violate such restrictions or privileges.
Under the merger agreement, none of the parties shall (and each party shall cause its respective subsidiaries not to) take any action (or knowingly fail to take any reasonable action) which action (or failure to act) would or would reasonably be expected to prevent or impede the mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code. The parties intend the merger agreement to meet the requirements of measuring continuity of interest pursuant to Treasury Regulations Section 1.368-1(e)(2)(i). The parties shall treat, for U.S. federal income tax purposes, the mergers, taken together, as a “reorganization” within the meaning of Section 368(a) of the Code and no party shall take any position for tax purposes inconsistent therewith, except to the extent otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code. Each of the parties shall use its reasonable best efforts and will cooperate in good faith with one another to obtain certain tax opinions from each of Salesforce’s and Slack’s outside legal counsel. In connection therewith, each party will deliver to each of
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Salesforce’s and Slack’s outside legal counsel a representation letter dated as of the closing date (and, if requested, dated as of the date the registration statement shall have been declared effective by the SEC or such other date(s) as determined necessary by counsel in connection with the filing of the registration statement or its exhibits) and signed by an officer of Salesforce or Slack, as applicable (in each case, the representation letter will contain such customary representations, warranties and covenants as are reasonably necessary or appropriate to allow each of Salesforce’s and Slack’s legal counsel to provide the opinions specified in the merger agreement).
Under the merger agreement, prior to the first effective time, Slack and its subsidiaries will, and will use their reasonable best efforts to cause their representatives to, provide all customary cooperation and customary financial information, in each case that is reasonably requested by Salesforce in connection with any financing obtained or to be obtained by Salesforce for the purpose of financing the transactions contemplated by the merger agreement or any transaction undertaken in connection therewith, including by (x) furnishing, or causing to be furnished, to Salesforce audited and unaudited consolidated balance sheets and related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for Slack for certain periods before the closing date and (y) using reasonable best efforts to cause Slack’s and its subsidiaries’ independent accountants, as requested by Salesforce, to consent to the use of their audit reports on the financial statements of Slack and its subsidiaries in any materials relating to any such financing or in connection with any filings made with the SEC or pursuant to the Securities Act or Exchange Act in connection with any such financing and to provide any “comfort letters” necessary and reasonably requested by Salesforce in connection with any debt capital markets transaction comprising a part of any such financing and to participate in customary due diligence sessions. However, (a) no such cooperation will be required to the extent it would (i) unreasonably disrupt the conduct of Slack’s business, (ii) require Slack or its subsidiaries to incur any fees, expenses or other liability prior to the first effective time for which it is not promptly reimbursed or simultaneously indemnified, (iii) be reasonably expected to cause any director, officer or employee of Slack or any of its subsidiaries to incur any material personal liability, (iv) require Slack to waive or amend any terms of the merger agreement or (v) require Slack to provide any information that is prohibited or restricted by applicable law or is legally privileged (provided that Slack will use commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure not in violation of law or to allow for such access or disclosure to the maximum extent that does not result in a loss of such legal privilege), and (b) Slack and its subsidiaries will not be required to execute any credit or security documentation or any other definitive agreement (other than customary authorization letters) or provide any indemnity prior to the first effective time (and in no event will Slack’s breach of its obligations described in this paragraph be considered in determining the satisfaction of certain conditions to closing the mergers, subject to certain conditions set forth in the merger agreement).
The merger agreement requires Salesforce to indemnify and hold harmless Slack, its subsidiaries, and their respective representatives from and against any and all liabilities or losses incurred by them in connection with any such financing and any information utilized in connection therewith, subject to certain exceptions set forth in the merger agreement. If the merger agreement is validly terminated, Salesforce shall, promptly upon request by Slack, reimburse Slack and its subsidiaries for all reasonable and documented out-of-pocket costs actually incurred in connection with such financing cooperation, subject to certain exceptions set forth in the merger agreement.
The merger agreement requires Slack and its subsidiaries to deliver all notices and take all other actions required to facilitate at or prior to the first effective time the termination of all commitments outstanding under the Revolving Credit and Guaranty Agreement, dated as of May 30, 2019, among Slack, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent, the repayment in full of all obligations outstanding thereunder, the release of all liens securing such obligations, and the release of all guarantees in connection therewith. The merger agreement also requires that Slack deliver to Salesforce at certain dates prior to
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the closing date customary draft and executed payoff letters and related guarantee and lien release documentation from the agent on behalf of the lenders under such credit agreement.
With respect to Slack’s existing convertible notes and certain derivatives arrangements relating thereto, the merger agreement requires:
Slack and its subsidiaries to take all actions required by, or reasonably requested by Salesforce pursuant to, the convertible note indenture, and applicable law as a result of the execution and delivery of the merger agreement or the consummation of the transactions contemplated thereby, including giving notices, delivering to the trustee, holders or other applicable persons related documents or instruments and executing, or causing to be executed, as applicable, at the applicable effective time one or more supplemental indentures, officer’s certificates and opinions of counsel, in each case pursuant to the convertible notes indenture; and
Slack to (i) facilitate the settlement of its capped call transactions incurred in connection with its convertible notes substantially concurrently with the first effective time as reasonably requested by Salesforce (subject to the terms governing each capped call transaction) and (ii) cooperate with Salesforce with respect to its efforts to settle the capped call transactions and the negotiation of any termination or settlement payment or valuation related thereto (and the merger agreement prohibits Slack from taking certain actions set forth in the merger agreement relating to the capped call transactions).
In addition, with respect to Slack’s existing convertible notes, the merger agreement provides that Salesforce and/or any of its subsidiaries may commence any of the following:
one or more offers to purchase any or all of such outstanding convertible notes for cash, Salesforce common stock or a combination thereof, which we refer to as the offers to purchase; or
subject to certain limitations, solicit the consent of the holders of Slack’s convertible notes regarding certain proposed amendments to the convertible notes indenture, which we refer to as the convertible note consent solicitations.
The closing of any transaction described in the immediately preceding paragraph would not be consummated until, and would not be a condition to, the closing of the mergers and any such transaction would be funded using consideration provided by Salesforce or any of its subsidiaries (other than Slack and its subsidiaries). At the expense of Salesforce and its subsidiaries, Slack will, and will cause its subsidiaries to and will use its reasonable best efforts to cause its and their respective representatives to, upon the reasonable request of Salesforce or any of its subsidiaries, provide cooperation in connection with any of the transactions described in this paragraph as set forth in the merger agreement.
The merger agreement also requires that as promptly as practical on or after the Free Trade Date (as defined in the convertible notes indenture) and in any event no later than the De-Legending Deadline Date (as defined in the convertible notes indenture), Slack will remove (or cause to be removed) the Restrictive Notes Legend (as defined in the convertible notes indenture) from the convertible notes, and cause such convertible notes to be assigned an unrestricted CUSIP number as a result thereof, in each case, in accordance with the terms of the convertible notes indenture.
HSR and Other Regulatory Approvals
Under the merger agreement, Salesforce and Slack are required to use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the merger agreement as soon as practicable, including:
preparing and filing or otherwise providing, in consultation with the other party and as promptly as practicable and advisable, all documentation to effect all necessary applications, notices, petitions, filings,
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and other documents and to obtain as promptly as reasonably practicable all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any governmental entity in order to consummate the transactions contemplated by the merger agreement; and |
taking all actions as may be necessary, subject to the limitations in the merger agreement, to obtain (and cooperating with each other in obtaining) all such waiting period expirations or terminations, consents, clearances, waivers, licenses, registrations, permits, authorizations, orders and approvals.
Further, Salesforce and Slack each agree to:
make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the transactions contemplated by the merger agreement as promptly as practicable, and in any event within 15 business days after the date of the merger agreement (unless a later date is mutually agreed between the parties), and supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as reasonably practicable; and
make all other necessary or advisable filings as promptly as reasonably practicable, and supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested under any other applicable regulatory laws.
Notwithstanding the foregoing, none of Salesforce, Merger Sub I, Merger Sub II or any of their respective subsidiaries is required to, and Slack may not and may not permit any of its subsidiaries to, without the prior written consent of Salesforce, become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (1) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of Slack, the surviving corporation, the surviving company, Salesforce, Merger Sub I, Merger Sub II or any of their respective subsidiaries, (2) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of Slack, the surviving corporation, the surviving company, Salesforce, Merger Sub I, Merger Sub II or any of their respective subsidiaries or (3) impose any restriction, requirement or limitation on the operation of the business or portion of the business of Slack, the surviving corporation, the surviving company, Salesforce, Merger Sub I, Merger Sub II or any of their respective subsidiaries (in the case of each of clauses (1), (2) and (3), if any such action would reasonably be expected to, individually or in the aggregate, (x) materially reduce the reasonably anticipated benefits to Salesforce of the transactions contemplated by the merger agreement or (y) impact Salesforce, Slack or their respective subsidiaries in a manner or amount that is material relative to the value of Slack and its subsidiaries, taken as a whole). However, if requested by Salesforce, Slack or its subsidiaries will become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on Slack or its subsidiaries in the event the mergers are completed.
Under the merger agreement, in connection with and without limiting the efforts referenced above to obtain all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations for the transactions under the HSR Act or any other regulatory laws to the extent not prohibited by applicable law, Salesforce and Slack also agree to:
cooperate in all respects and consult with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party;
furnish the other party with such necessary information and reasonable assistance as the other party may reasonably request in connection with its preparation of necessary filings or submissions of information to any governmental entity;
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promptly inform the other party of any communication with the DOJ, the FTC or any other governmental entity, by promptly providing copies to the other party of any such written communications (or, in the case of oral communications, advise the other party of such communications), and of any communication received or given in connection with any proceeding by a private party; and
permit the other party to review in advance any communication that it gives to, and consult with each other in advance of any meeting, substantive telephone call or conference with, the DOJ, the FTC or any other applicable governmental entity, or, in connection with any proceeding by a private party, with any other person, and to the extent permitted by the DOJ, the FTC or other applicable governmental entity or other person, give the other party the opportunity to attend and participate in any in-person meetings, substantive telephone calls or conferences with the DOJ, the FTC or any other governmental entity or other person.
Under the merger agreement, Salesforce will assume, honor and fulfill all of Slack’s benefit plans in accordance with their terms as in effect immediately prior to the date of the merger agreement or as subsequently amended or terminated as permitted pursuant to the terms of such Slack benefit plans and the merger agreement.
For a period of 12 months following the first effective time, Salesforce has agreed to provide, with respect to each employee of Slack who becomes an employee of Salesforce or its subsidiaries as of the first effective time (which we refer to as the “continuing employees”), (a) substantially comparable aggregate on target earnings (consisting of base pay or wage rate, as applicable, and incentive cash compensation opportunity, but excluding equity incentive compensation) to those in effect for such continuing employee immediately prior to the closing; provided that, for each continuing employee whose compensation does not include commissions, such continuing employee shall also be provided at least the same wage rate or base salary as those in effect for such continuing employee immediately prior to the closing and (b) employee benefits (including health and welfare benefits, but excluding equity incentive compensation, retirement benefits and cash bonus opportunities) that are, in the aggregate, no less favorable to such continuing employee than (i) for the period from the first effective time through December 31, 2021, those in effect for such continuing employee immediately prior to the closing and (ii) for the period from January 1, 2022 through the first anniversary of the first effective time, those in effect for similarly situated employees of Salesforce and its subsidiaries and (c) retirement benefits that are, in Salesforce’s discretion, either no less favorable to such continuing employee than (i) those in effect for such continuing employee immediately prior to the first effective time or (ii) those in effect for similarly situated employees of Salesforce and its subsidiaries.
Salesforce also has agreed under the merger agreement to recognize years of service with Slack or its subsidiaries under all employee benefit plans maintained by Salesforce or its affiliates for the benefit of continuing employees, except to the extent that any such recognition would result in a duplication of benefits, and to waive certain participation restrictions for continuing employees who become eligible to participate in Salesforce welfare plans. Slack will terminate its 401(k) plan(s) as of the day immediately preceding the first effective time if Salesforce provides timely written notice requesting such termination in accordance with the merger agreement.
Directors’ and Officers’ Indemnification and Insurance
Under the merger agreement, for six years after the first effective time, Salesforce must, or must cause the surviving company to, indemnify and hold harmless, to the fullest extent permitted under applicable law and the organizational documents of Slack or its subsidiaries, or any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce, each current and former director and executive officer of Slack and its subsidiaries (which we refer to as the “indemnified parties”) against any costs and
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expenses (including advancing attorneys’ fees and expenses) in connection with any actual or threatened claims in respect of acts or omissions occurring or alleged to have occurred at or prior to the first effective time, whether asserted or claimed prior to, at or after the first effective time, in connection with such person serving as an executive officer, director, employee or other fiduciary of Slack, any of its subsidiaries or any other person if such service was at the request or for the benefit of Slack or any of its subsidiaries.
In addition, for a period of six years following the first effective time, Salesforce is required to maintain in effect the provisions in the organizational documents of Slack and any indemnification agreements in existence as of the date of the merger agreement that were provided to Salesforce (except to the extent such agreement provides for an earlier termination) regarding elimination of liability, indemnification of executive officers, directors and employees and advancement of expenses that are in existence as of the date of the merger agreement.
At or prior to the first effective time, Slack is required to purchase a directors’ and officers’ liability insurance and fiduciary liability insurance “tail” insurance policy for a period of six years after the first effective time with respect to matters arising at or prior to the first effective time, with a one-time cost not in excess of 300% of the last aggregate annual premium paid by Slack for its directors’ and officers’ liability insurance and fiduciary liability insurance prior to the date of the merger agreement, and if the cost of such “tail” insurance policy would otherwise exceed such amount, Slack may purchase as much coverage as reasonably practicable for such amount.
Other Covenants and Agreements
The merger agreement contains additional covenants and agreements relating to, among other matters:
consultation and consent rights regarding any press releases or other public statements with respect to the merger agreement, the mergers, or the other transactions contemplated by the merger agreement;
certain additional employee and employee benefit matters;
certain reporting requirements under Section 16(a) of the Exchange Act;
the approval for the listing of the Salesforce common stock to be issued in connection with the first merger on the NYSE;
the delisting of Slack common stock;
eliminating any applicability of state takeover laws;
notice, cooperation and coordination relating to transaction-related litigation, if any; and
resignations of Slack directors.
The obligations of Salesforce and Slack to effect the mergers will be subject to the satisfaction of each of the following conditions, any and all of which may be waived in whole or in part by Salesforce, Merger Sub I, Merger Sub II and Slack, as the case may be, to the extent permitted by applicable law:
Slack Stockholder Approval—The approval of the first merger and the adoption of the merger agreement by the affirmative vote of the holders of at least a majority of the voting power of the outstanding shares of Slack common stock;
NYSE Listing—The approval of the shares of Salesforce common stock to be issued in the first merger for listing on the NYSE (or any successor inter-dealer quotation system or stock exchange thereto), subject to official notice of issuance;
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Registration Statement—The effectiveness under the Securities Act of the registration statement of which this proxy statement/prospectus forms a part of and the absence of any stop order or proceeding seeking a stop order;
Government Consents—(i) The expiration or termination of any waiting period (or extensions thereof) applicable to the mergers under the HSR Act and (ii) the approval, expiration, termination or receipt of, as applicable, all applicable filing, registrations, waiting periods (or extensions thereof) and approvals under certain specified antitrust and foreign investment laws; and
No Legal Prohibition—No governmental entity of competent jurisdiction has (i) enacted, issued or promulgated any law that is in effect as of immediately prior to the first effective time or the second effective time, as applicable or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the first effective time or the second effective time, as applicable, which, in each case, has the effect of restraining or enjoining or otherwise prohibiting the consummation of the mergers.
The obligations of Salesforce, Merger Sub I and Merger Sub II to consummate the mergers will be further subject to the satisfaction on or prior to the closing date of each of the following conditions, any and all of which may be waived in whole or in part by Salesforce, Merger Sub I or Merger Sub II, as the case may be, to the extent permitted by applicable law:
• | Accuracy of Representations and Warranties—The representations and warranties of Slack in the merger agreement |
Compliance with Covenants—Performance or compliance in all material respects by Slack of the obligations, covenants and agreements required to be performed or complied with by it at or prior to the closing;
• | No Material Adverse Effect—There not having occurred any material adverse effect (with such term as described under the section entitled “—Material Adverse Effect”) with respect to Slack since December 1, 2020, and that is continuing as of immediately prior to the closing; |
Officer Certificate—The receipt by Salesforce of a certificate, dated as of the closing date, signed by the chief executive officer or chief financial officer of Slack, certifying that the conditions set forth in the three bullet points immediately above have been satisfied; and
Tax Opinion—The receipt by Salesforce of a written opinion from legal counsel to Salesforce, in form and substance reasonably satisfactory to Salesforce, dated as of the closing date, to the effect that, on
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the basis of facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income tax purposes the mergers, taken together, will |
The obligations of Slack to consummate the Mergers will be further subject to the satisfaction on or prior to the closing date of each of the following conditions, any and all of which may be waived in whole or in part by Slack to the extent permitted by applicable law:
• | Accuracy of Representations and Warranties—The representations and warranties of Salesforce, Merger Sub I and Merger Sub II in the merger agreement (without giving effect to any qualification as to materiality or material adverse effect) being true and correct as of December 1, 2020 (the date of the merger agreement) and as of the closing date as though made on and as of the closing date (except for representations and warranties that by their terms speak specifically as of another date, in which case as of such date), except where the failure of such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or material adverse effect) have not had and would not reasonably be expected to have, individually or in the aggregate, a |
Compliance with Covenants—Performance or compliance in all material respects by Salesforce, Merger Sub I and Merger Sub II of the obligations, covenants and agreements required to be performed or complied with by it at or prior to the closing;
Officer Certificate—The receipt by Slack of a certificate, dated as of the closing date, signed by the chief executive officer or chief financial officer of Salesforce certifying that the conditions set forth in the two bullet points immediately above have been satisfied; and
Tax Opinion—The receipt by Slack of a written opinion from legal counsel to Slack, in form and substance reasonably satisfactory to Slack, dated as of the closing date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income tax purposes the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
Termination of the Merger Agreement
Termination by Salesforce or Slack
The merger agreement may be terminated at any time before the closing:
by mutual written consent of Salesforce and Slack; or
by either Salesforce or Slack, if:
any governmental entity of competent jurisdiction has issued a final, non-appealable order, injunction, decree or ruling permanently restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by the merger agreement;
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the closing has not occurred by, on or before August 1, 2021, except that (a) if on such outside date all of the conditions to closing, other than certain conditions related to the approval, expiration, termination or receipt of, as applicable, under the HSR Act and certain specified antitrust and foreign investment laws, the absence of any injunction or other legal prohibition on the consummation of the mergers (to the extent any such injunction or order is in respect of, or any such law is, the HSR Act or any other regulatory law) and those conditions that by their nature are to be satisfied at closing (but provided that such conditions shall then be capable of being satisfied if the closing were to take place on such date), have been satisfied or waived, then the outside date will automatically be extended one time for an additional three months and (b) if on the outside date as so extended pursuant to clause (a), all of the conditions to closing, other than certain conditions related to the approval, expiration, termination or receipt of, as applicable, under the HSR Act and certain specified antitrust and foreign investment laws, the absence of any injunction or other legal prohibition on the consummation of the mergers (to the extent any such injunction or order is in respect of, or any such law is, the HSR Act or any other regulatory law) and those conditions that by their nature are to be satisfied at closing (but provided that such conditions shall then be capable of being satisfied if the closing were to take place on such date), have been satisfied or waived, then the outside date will automatically be extended one time for an additional three months. This right to terminate the merger agreement will not be available to any party whose action or failure to fulfill any obligation under the merger agreement has been a proximate cause of the failure of the transactions to be consummated by the outside date, and such action or failure to act constitutes a material breach of the merger agreement; or
the Slack stockholder approval has not been obtained upon a vote taken thereon at the Slack special meeting.
Termination by Slack
The merger agreement may be terminated at any time before the closing by Slack if:
• | the Slack board effects a change of recommendation and Slack substantially concurrently enters into a definitive agreement providing for a superior proposal, as long as (1) |
(1)(a) Salesforce, Merger Sub I and/or Merger Sub II has breached, failed to perform or violated their respective covenants or agreements under the merger agreement, or (b) any of the representations and warranties of Salesforce, Merger Sub I or Merger Sub II in the merger agreement have become inaccurate, in either event in a manner that would give rise to a failure of the conditions in the merger agreement related to the representations and warranties of Salesforce, Merger Sub I and Merger Sub II or the performance by Salesforce, Merger Sub I and Merger Sub II of their respective obligations prior to closing; (2) such breach, failure to perform, violation or inaccuracy is incapable of being cured by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside date and the 30th calendar day following receipt of written notice from Slack of such breach, failure to perform, violation or inaccuracy; and (3) Slack is not then in breach of any of its representations, warranties, covenants or agreements under the merger agreement, which breach would give rise to the failure of the conditions in the merger agreement related to the representations and warranties of Slack, the performance by Slack of its obligations prior to closing, and the absence of a material adverse effect on Slack (we refer to the events in the clauses (1), (2) and (3) as a “Salesforce breach termination event”).
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Termination by Salesforce
The merger agreement may be terminated by Salesforce:
• | at any time before the receipt of the |
at any time before the closing, if (1) Slack has breached, failed to perform or violated its covenants or agreements under the merger agreement or any of the representations and warranties of Slack in the merger agreement have become inaccurate, in either event in a manner that would give rise to the failure of the conditions in the merger agreement related to the representations and warranties of Salesforce, Merger Sub I and Merger Sub II, the performance by Salesforce, Merger Sub I and Merger Sub II of their respective obligations prior to closing, and the absence of a material adverse effect on Slack; (2) such breach, failure to perform, violation or inaccuracy is incapable of being cured by the outside date or, if capable of being cured by the outside date, is not cured before the earlier of the business day immediately prior to the outside date and the 30th calendar day following receipt of written notice from Salesforce of such breach, failure to perform, violation or inaccuracy; and (3) neither Salesforce, Merger Sub I nor Merger Sub II is then in breach of any of its representations, warranties, covenants or agreements under the merger agreement, which breach would give rise to the failure of the conditions in the merger agreement related to the representations and warranties of Salesforce, Merger Sub I and Merger Sub II and the performance by Salesforce, Merger Sub I and Merger Sub II of their respective obligations prior to closing (we refer to the events in the clauses (1), (2) and (3) as a “Slack breach termination event”).
The merger agreement provides that Slack will pay Salesforce a termination fee of $900 million if:
(1)(a) Salesforce or Slack terminates the merger agreement as a result of the closing having not occurred on or before the outside date or the Slack stockholder approval having not been obtained, or (b) Salesforce terminates the merger agreement as a result of breach, failure to perform or violation of the merger agreement by Slack that (except for a breach of Slack’s non-solicitation obligations) first occurred following the making of an acquisition proposal of the type described in (2); (2) after the date of the merger agreement and prior to the date of the termination (or prior to the receipt of the Slack stockholder approval in the case of a termination as a result of the Slack stockholder approval having not been obtained), a bona fide acquisition proposal has been publicly disclosed or otherwise made known to the Slack board or management and in each case is not withdrawn (publicly, if publicly disclosed) at least three business days prior to the earlier of the Slack special meeting and such termination; and (3) within 12 months of such termination, an acquisition proposal is consummated or a definitive agreement providing for an acquisition proposal is entered into;
• | (1) Salesforce terminates the merger agreement because the |
Slack terminates the merger agreement in order to enter into a definitive agreement providing for a superior proposal.
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In no event will Slack be obligated to pay the termination fee on more than one occasion. In the event that the termination fee is received by Salesforce, none of Slack, any of its subsidiaries, any of their respective former, current or future officers, directors, partners, stockholders, managers, members, affiliates or agents will have any further liability or obligation relating to or arising out of the merger agreement or the transactions contemplated by the merger agreement, except for fraud or willful breach of the merger agreement occurring prior to the termination of the merger agreement.
In the event of termination of the merger agreement in accordance with its terms, the merger agreement will become null and void (except that provisions relating to the effect of termination, payment of the termination fee and certain other miscellaneous provisions, together with the confidentiality agreement between Slack and Salesforce, will survive any such termination), and there will be no liability on the part of any of the parties; provided that no party will be relieved of liability for any fraud or willful breach of the merger agreement prior to such termination. For purposes of the merger agreement, “willful breach” means an action or omission taken or omitted to be taken that the breaching party intentionally takes (or fails to take) and actually knows would, or would reasonably be expected to, be or cause a material breach of the merger agreement, and “fraud” means common law fraud that is committed with actual knowledge of falsity and with the intent to deceive or mislead another.
Except as otherwise expressly provided in the merger agreement, all costs and expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring the cost or expense, except that Salesforce will pay all fees under the HSR Act and any other applicable regulatory laws relating to such transactions.
Amendments, Enforcements and Remedies, Extensions and Waivers
Amendments
The merger agreement may be amended by written agreement of each of the parties at any time.
Enforcements and Remedies
Under the merger agreement, the parties have agreed that each party will be entitled to:
an injunction or injunctions to prevent or remedy any breaches or threatened breaches of the merger agreement;
a decree or order of specific performance specifically enforcing the terms and provisions of the merger agreement; and
any further equitable relief, in each case, in addition to any other remedy to which a party is entitled at law or in equity.
Extensions and Waivers
Under the merger agreement, at any time prior to the first effective time, any party may:
extend the time for the performance of any of the obligations or other acts of the other parties;
waive any inaccuracies in the representations and warranties of the other parties; and
waive compliance by the other parties with any of the agreements or conditions for the benefit of such party.
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Concurrently with the execution of the merger agreement, on December 1, 2020, Salesforce and the Slack founders entered into a voting and support agreement, with respect to all shares of Slack Class A common stock and Class B common stock that each founder beneficially owns as of the date of the merger agreement or thereafter. The following summary describes certain material provisions of the voting and support agreement, a copy of which is attached hereto as Annex D and incorporated by reference herein in its entirety. The description of the voting and support agreement in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the complete text of the voting and support agreement.
Voting
Each founder has irrevocably and unconditionally agreed that from the date of the voting and support agreement until the date that the voting and support agreement terminates, such founder will vote or cause to be voted all shares of Slack common stock that he or she beneficially owns, among other things:
in favor of the approval and adoption of the merger agreement;
against any acquisition proposal;
against any action or agreement that is in opposition to the mergers or that would result in a breach of any covenant, representation or warranty of Slack or any of its subsidiaries contained in the merger agreement; and
against any other action that would impede, interfere with, delay, postpone, frustrate the purposes of or adversely affect the transactions contemplated by the merger agreement, including the mergers, or the voting and support agreement or the performance by Slack of its obligations under the merger agreement.
As of December 16, 2020, the voting and support agreement covered 75,963,188 shares of Slack common stock, or approximately 55.8% of the total aggregate voting power of the shares of Slack common stock issued and outstanding.
Restrictions on Inconsistent Arrangements and Transfers
The voting and support agreement contains customary provisions restricting the founders from entering into arrangements inconsistent with the terms of the voting and support agreement during the term of the voting and support agreement. Each founder has also agreed that, with limited exceptions, prior to the termination of the voting and support agreement, it will not transfer, constructively transfer, or otherwise enter into any agreement or understanding with respect to a transfer or constructive transfer relating to, any shares of Slack common stock beneficially owned or acquired by such founder on or after the date of the voting and support agreement. Subject to limited exceptions, under the voting and support agreement, the founders have agreed not to cause the conversion of any shares of Slack Class B common stock into shares of Class A common stock.
Other Covenants
Each founder has agreed, to the full extent permitted by law, to irrevocably and unconditionally waive, and agree not to exercise, any rights of appraisal (including under Section 262 of the DGCL), any dissenters’ rights and any similar rights relating to the merger that it may have by virtue of its ownership of any shares of Slack common stock.
Each founder has also agreed not to commence, join in, facilitate, assist or knowingly encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Salesforce, Merger Sub I, Merger Sub II or Slack or any of their respective affiliates and each
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of their successors, directors, managers or officers relating to the negotiation, execution or delivery of the voting and support agreement or the merger agreement or the completion of the transactions contemplated thereby, including any claim (i) challenging the validity of, or seeking to enjoin or delay the operation of, any provision of the voting and support agreement, or the merger agreement, or (ii) alleging a breach of any duty of the Slack board or any founder in connection with the voting and support agreement or the merger agreement or the completion of the transactions contemplated thereby.
Until the voting and support agreement has terminated, and subject to limited exceptions, each founder has agreed not to, directly or indirectly, solicit any acquisition proposal or participate in or cooperate with negotiations regarding potential acquisitions proposals.
Termination
The voting and support agreement will terminate with respect to a founder and Salesforce upon the earliest to occur of (i) the termination of the merger agreement in accordance with its terms, (ii) the first effective time, (iii) the entry without the prior written consent of such founder into any amendment, waiver or modification to the merger agreement that results in a decrease in the merger consideration or changes the mix of merger consideration, and (iv) the delivery of written notice by Salesforce to such founder of termination of the voting and support agreement.
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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS
The following discussion is a summary of the material U.S. federal income tax consequences of the mergers to U.S. Holders (as defined below) that exchange their shares of Slack common stock for shares of Salesforce common stock and cash in the mergers. The following summary is based upon the provisions of the Code, its legislative history, existing and proposed U.S. Treasury Regulations promulgated thereunder and rulings and other administrative pronouncements issued by the IRS and judicial decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect, and to differing interpretations. Any such change could affect the accuracy of the statements and conclusions set forth in this discussion.
This discussion addresses only U.S. Holders who hold Slack common stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion is based upon the assumption that the mergers will be completed in accordance with the merger agreement and as described in this proxy statement/prospectus. Holders of Slack common stock that are not U.S. Holders, and holders of Slack capital stock other than Slack common stock, should consult their tax advisors as to the tax consequences of the mergers. Moreover, this discussion does not address any U.S. federal tax consequences other than income tax consequences (such as estate, gift or other non-income tax consequences) or any state, local or foreign income or non-income tax consequences. In addition, this discussion does not purport to be a complete analysis of all of the U.S. federal income tax consequences (such as the Medicare contribution tax on net investment income or consequences that may arise under the Foreign Account Tax Compliance Act (including the Treasury Regulations promulgated thereunder and intergovernmental agreements entered into pursuant thereto or in connection therewith)) that may be relevant to U.S. Holders in light of their particular circumstances and does not address all of the U.S. federal income tax consequences that may be relevant to particular holders of Slack common stock that are subject to special rules, including, but not limited to:
banks or other financial institutions;
partnerships or other pass-through entities (or other entities or arrangements treated as partnerships or pass-through entities for U.S. federal income tax purposes) or investors in such partnerships or pass-through entities;
mutual funds;
S corporations or investors in such S corporations;
insurance companies;
tax-exempt organizations or governmental organizations;
dealers or brokers in securities or currencies;
traders in securities that elect to use a mark-to-market method of accounting;
persons that actually or constructively own or have owned at least five percent of Slack common stock (by vote or value);
regulated investment companies;
real estate investment trusts;
tax-qualified retirement plans;
persons that hold Slack common stock as part of a straddle, hedge, constructive sale or conversion transaction;
persons that are liable for the alternative minimum tax;
individuals who are U.S. expatriates and former citizens or long-term residents of the United States;
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holders who acquired their shares of Slack common stock through the exercise of an employee stock option, in connection with a restricted stock unit or restricted share award, or otherwise as compensation;
holders who hold their shares as “qualified small business stock” within the meaning of Section 1202(c) of the Code; and
persons that have a functional currency other than the U.S. dollar.
If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) holds Slack common stock, the tax treatment of a partner in such partnership generally will depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. Partnerships and partners in such a partnership should consult their tax advisors about the tax consequences of the mergers to them.
For purposes of this discussion, the term “U.S. Holder” means a beneficial owner of Slack common stock which is, or is treated for U.S. federal income tax purposes as, any of the following:
an individual who is a citizen or resident of the United States;
a corporation (or any other entity treated as a corporation) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
a trust that (i) is subject to the primary supervision of a court within the United States and all substantial decisions of which are subject to the control of one or more United States persons (as defined in Section 7701(a)(30) of the Code) or (ii) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a United States person; or
an estate, the income of which is subject to U.S. federal income taxation regardless of its source.
The following discussion is a summary of material U.S. federal income tax consequences of the mergers to U.S. Holders under current law and is for general information only. All stockholders should consult their tax advisors as to the tax consequences of the mergers in their particular circumstances, including the applicability and effect of U.S. federal, state, local or foreign income or other tax laws.
The mergers, taken together, are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. It is a condition to the completion of the mergers that each of Salesforce and Slack receives an opinion from its respective counsel dated as of the closing date to the effect that the mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In addition, in connection with the filing of the registration statement of which this proxy statement/prospectus is a part, each of Wachtell, Lipton, Rosen & Katz and Latham & Watkins LLP has delivered an opinion to Salesforce and Slack, respectively, to the same effect as the opinions described in the preceding sentence. Each of the foregoing opinions of counsel is or will be based on, among other things, certain factual representations made by Salesforce and Slack and certain assumptions, all of which must be consistent with the state of facts existing at the time of the mergers. If any of these representations and assumptions are, or become, inaccurate or incomplete, such opinions may be invalid, and the conclusions reached therein could be jeopardized. An opinion of counsel represents counsel’s best legal judgment and is not binding on the IRS or the courts, which may not agree with the conclusions set forth in such opinion.
No ruling has been, or will be, sought by Slack or Salesforce from the IRS with respect to the mergers and there can be no assurance that the IRS will not challenge the qualification of the mergers, taken together, as a “reorganization” under Section 368(a) of the Code or that a court would not sustain such a challenge. The discussion below assumes the mergers will qualify as a “reorganization” under Section 368(a) of the Code. All U.S. Holders are encouraged to consult their tax advisors regarding the tax consequences to them in the event the mergers do not so qualify.
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Tax Consequences of the Mergers
A U.S. Holder generally will recognize gain (but not loss) in an amount equal to the lesser of: (1) the sum of the amount of cash consideration (other than cash in lieu of a fractional share of Salesforce common stock) and the fair market value of the Salesforce common stock received, minus that U.S. Holder’s adjusted tax basis in its shares of Slack common stock surrendered in exchange therefor, and (2) the amount of cash consideration received (other than cash in lieu of a fractional share of Salesforce common stock). Any recognized gain will generally be long-term capital gain if the U.S. Holder’s holding period with respect to the shares of Slack common stock surrendered is more than one year.
If a U.S. Holder acquired different blocks of shares of Slack common stock at different times or different prices, any gain or loss may be determined separately for each identifiable block of shares. U.S. Holders should consult their tax advisors regarding the manner in which cash consideration and Salesforce common stock should be allocated among different blocks of shares of Slack common stock surrendered and the determination of the tax bases and holding periods of the Salesforce common stock received.
In some cases, if a U.S. Holder actually or constructively owns Salesforce common stock after the mergers, the recognized gain could be treated as having the effect of a distribution of a dividend under the tests set forth in Section 302 of the Code, in which case such U.S. Holder could have dividend income up to the amount of the cash consideration received. Because the possibility of dividend treatment depends primarily upon the particular circumstances of a U.S. Holder, including the application of certain constructive ownership rules, U.S. Holders should consult their tax advisors regarding the potential tax consequences of the mergers to them, and U.S. Holders that are corporations should consult their tax advisors regarding the potential applicability of the “extraordinary dividend” provisions of the Code.
The aggregate tax basis of the Salesforce common stock received (including fractional shares deemed received and redeemed as described in the section entitled “Cash in Lieu of a Fractional Share” below) will be equal to the aggregate adjusted tax basis of the shares of Slack common stock surrendered, reduced by the amount of cash consideration received by the U.S. Holder (excluding any cash in lieu of a fractional share) and increased by the amount of gain (excluding any gain recognized with respect to cash in lieu of a fractional share), if any, recognized by the U.S. Holder in the mergers. The holding period of the Salesforce common stock received (including fractional shares deemed received and redeemed as described in the section entitled “Cash in Lieu of a Fractional Share” below) will include the holding period of the shares of Slack common stock surrendered.
Cash in Lieu of a Fractional Share
A U.S. Holder who receives cash in lieu of a fractional share of Salesforce common stock will be treated as having received the fractional share pursuant to the mergers and then as having exchanged that fractional share with Salesforce for cash in a redemption transaction.
A U.S. Holder receiving cash in lieu of a fractional share of Salesforce common stock will generally recognize gain or loss equal to the difference between the amount of cash received and such U.S. Holder’s tax basis in such fractional share of Salesforce common stock. Any gain or loss recognized generally would be long-term capital gain or loss if the U.S. Holder’s holding period in such Salesforce common stock, as determined in accordance with the rules discussed above, exceeds one year at the closing of the mergers. The deductibility of capital losses is subject to limitations.
In some cases, if a U.S. Holder actually or constructively owns Salesforce common stock after the mergers, the recognized gain could be treated as having the effect of the distribution of a dividend under the tests set forth in Section 302 of the Code, in which case such U.S. Holder could have dividend income up to the amount of the cash consideration received. Because the possibility of dividend treatment depends primarily upon the particular circumstances of a U.S. Holder, including the application of certain constructive ownership rules, U.S. Holders
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should consult their tax advisors regarding the potential tax consequences of the mergers to them, and U.S. Holders that are corporations should consult their tax advisors regarding the potential applicability of the “extraordinary dividend” provisions of the Code.
Tableau terminates the merger agreement in order to enter into a definitive agreement providing for a superior proposal.
In no event will Tableau be obligated to pay the termination fee on more than one occasion. In the event that the termination fee is received by Salesforce, none of Tableau, any of its subsidiaries, any of their respective former, current or future officers, directors, partners, stockholders, managers, members, affiliates or agents will have any further liability or obligation relating to or arising out of the merger agreement or the transactions contemplated by the merger agreement, except for fraud or willful breach of the merger agreement occurring prior to the termination of the merger agreement.
Effect of Termination
In the event of termination of the merger agreement in accordance with its terms, the merger agreement will become null and void (except that provisions relating to the effect of termination, payment of the termination fee and certain other miscellaneous provisions, together with the confidentiality agreement between Tableau and Salesforce, will survive any such termination), and there will be no liability on the part of any of the parties, provided that no party will be relieved of liability for any fraud or willful breach of the merger agreement prior to such termination. For purposes of the merger agreement, “willful breach” means an action or omission taken or omitted to be taken that the breaching party intentionally takes (or fails to take) and actually knows would, or would reasonably be expected to, be or cause a material breach of the merger agreement, and “fraud” means common law fraud that is committed with actual knowledge of falsity and with the intent to deceive or mislead another.
Amendments, Enforcements and Remedies, Extensions and Waivers
Amendments
The merger agreement may be amended by written agreement of each of the parties at any time.
Enforcements and Remedies
Under the merger agreement, the parties have agreed that each party will be entitled to:
an injunction or injunctions to prevent or remedy any breaches or threatened breaches of the merger agreement;
a decree or order of specific performance specifically enforcing the terms and provisions of the merger agreement; and
any further equitable relief, in each case, in addition to any other remedy to which a party is entitled to at law or in equity.
Extensions and Waivers
Under the merger agreement, at any time prior to the effective time of the merger, any party may:
extend the time for the performance of any of the obligations or other acts of the other parties;
waive any inaccuracies in the representations and warranties of the other parties; and
waive compliance by the other parties with any of the agreements or conditions for the benefit of such party.
Concurrently with the execution of the merger agreement, on June 9, 2019, Christian Chabot, Christopher Stolte and Patrick Hanrahan, each a co-founder and director of Tableau, entered into a letter agreement with Salesforce and the Offeror, pursuant to which they agreed, among other things, to convert all of their shares of Tableau Class B common stock into shares of Tableau Class A common stock prior to the expiration of the offer, subject to certain terms and conditions (including receipt from Salesforce of a notice specifying that all of the conditions to the offer have been either satisfied (other than those conditions that by their nature are to be satisfied at the expiration of the offer, each of which would be capable of being satisfied were the expiration of the offer to occur at the time Salesforce delivers such notice) or waived by Salesforce and the Offeror (for purposes of this notice, the satisfaction of the minimum tender condition will be tested assuming that all shares of Tableau Class B common stock of all of these individuals are converted into Tableau Class A common stock and tendered prior to the expiration of the offer).
The letter agreement terminates automatically upon the earliest to occur of the following: (a) the valid termination of the merger agreement in accordance with its terms, (b) the effective time of the merger, (c) the entry without the prior written consent of Christian Chabot, Christopher Stolte or Patrick Hanrahan to any amendment, waiver or modification to the merger agreement that results in a decrease in, or change in the form of, the transaction consideration and (d) the date on which Christian Chabot, Christopher Stolte or Patrick Hanrahan and Salesforce mutually agree to terminate the support agreement.
The Tableau shares subject to the letter agreement represent approximately 99.8% of the Class B common shares and 11.8% of the outstanding shares of Tableau common stock as of June 9, 2019. The co-founders have also conveyed to both Salesforce and Tableau that they intend to tender into the offer.
The foregoing summary of the letter agreement does not purport to be a complete description of the terms and conditions of the letter agreement and is qualified in its entirety by reference to the letter agreement, a copy of which has been filed as Exhibit 10.25 to this document, and incorporated herein by reference.
Salesforce and Tableau entered into a confidentiality agreement, dated February 27, 2019, in connection with their evaluation of the potential business combination that resulted in the execution of the merger agreement. Pursuant to the confidentiality agreement, subject to customary exceptions, Salesforce and Tableau agreed to keep confidential certain non-public information received from the other party. Salesforce and Tableau also agreed that the non-public information furnished by the other party pursuant to the confidentiality agreement would be used solely for the purpose of evaluating, negotiating and consummating the potential business combination.
The confidentiality agreement also contains a customary “standstill” provision. Pursuant to this “standstill” provision, Salesforce and Tableau agreed, among other things, for a period of 12 months from the date of the confidentiality agreement, that unless specifically permitted by the board of directors of the other party, neither party will: (a) make, effect, initiate, cause or participate in (i) any acquisition of beneficial ownership of any securities of the other party or any securities of any subsidiary or other controlled affiliate of such party, (ii) any acquisition of any assets of the other party or any of its subsidiaries or controlled affiliates except in the ordinary course of business, (iii) any tender offer, exchange offer, merger, business combination, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction involving the other party or any of its subsidiaries or controlled affiliates, or (iv) any “solicitation” of “proxies” (as those terms are used in the proxy rules of the SEC) or consents with respect to any securities of the other party; (b) form, join or participate in a “group” (as defined in the Securities Exchange Act of 1934 and the rules promulgated thereunder) with respect to
the beneficial ownership of any securities of the other party; (c) seek to control or influence the management, board of directors or policies of the other party, other than in connection with the negotiation or consummation of a transaction; (d) take any action that would reasonably be expected to require the other party to make a public announcement regarding any of the types of matters set forth in clause (a); (e) publicly offer to take or propose the taking of any action prohibited by the “standstill”; (f) assist, induce or encourage any other entity (other than the other party) to take any action prohibited by the “standstill”; (g) enter into any discussions, negotiations, arrangement or agreement with any other entity (other than such party’s own representatives and the other party) relating to any of the foregoing; or (h) publicly request or propose an amendment or waiver to any provisions of the “standstill.”
However, the “standstill” does not prohibit either party from confidentially communicating to the other party’s board of directors, senior management or financial advisors any non-public proposals that would not reasonably be expected to require public disclosure thereof under applicable law.
The above summary of the confidentiality agreement does not purport to be a complete description of the terms and conditions of the confidentiality agreement and is qualified in its entirety by reference to the confidentiality agreement, a copy of which has been filed as Exhibit 99.5 to this document, and incorporated herein by reference.
Salesforce and Tableau entered into an exclusivity agreement, dated May 18, 2019 and amended on June 4, 2019, which set forth certain terms on which Salesforce and Tableau would conduct negotiations regarding the potential business combination that resulted in the execution of the merger agreement. The exclusivity agreement, as amended, provided for an exclusivity period that would terminate at 11:59 p.m. Pacific time on June 11, 2019. The exclusivity agreement required that Tableau not, and not permit any Tableau representative to, solicit or knowingly encourage the initiation or submission of any expression of interest, inquiry, proposal or offer from any person or entity (other than Salesforce and its representatives) relating to an “Acquisition Transaction” (as defined in the exclusivity agreement), participate in any discussions or negotiations or enter into any agreement with, or provide any information to, any person or entity (other than Salesforce and its representatives) relating to or in connection with a possible Acquisition Transaction, or accept any proposal or offer from any person or entity (other than Salesforce and its representatives) relating to a possible Acquisition Transaction.
The exclusivity agreement also provided that Tableau would immediately terminate any ongoing discussions, communications or negotiations with other parties relating to any possible Acquisition Transaction and provide Salesforce with notice of any expression of interest, inquiry, proposal or offer relating to a possible Acquisition Transaction received by Tableau or by any of Tableau’s representatives from any person or entity (other than Salesforce or its representatives).
The above summary of the exclusivity agreement does not purport to be a complete description of the terms and conditions of the exclusivity agreement and is qualified in its entirety by reference to the exclusivity agreement and the amendment to the exclusivity agreement, copies of which have been filed as Exhibit 99.6 and Exhibit 99.7 to this document, and incorporated herein by reference.
COMPARATIVE MARKET PRICE AND DIVIDEND MATTERS
Market Price History
Salesforce common stock is listed on the NYSE under the symbol “CRM,” and Tableau Class A common stock is listed on the NYSE under the symbol “DATA.” The Tableau Class B common stock is not publicly traded but converts, on a one-for-one basis, into Tableau Class A common stock at the election of the holder. The following table sets forth, for the periods indicated, as reported by the NYSE, the per share high and low intraday sales prices of Salesforce common stock and Tableau Class A common stock.
Salesforce Common Stock | Tableau Class A Common Stock | |||||||||||||||||||||||
High | Low | Dividend | High | Low | Dividend | |||||||||||||||||||
2016 | ||||||||||||||||||||||||
First Calendar Quarter | $ | 77.96 | $ | 52.60 | $ | 0.00 | $ | 94.72 | $ | 36.60 | $ | 0.00 | ||||||||||||
Second Calendar Quarter | $ | 84.47 | $ | 73.13 | $ | 0.00 | $ | 56.29 | $ | 43.83 | $ | 0.00 | ||||||||||||
Third Calendar Quarter | $ | 83.08 | $ | 69.81 | $ | 0.00 | $ | 62.53 | $ | 47.77 | $ | 0.00 | ||||||||||||
Fourth Calendar Quarter | $ | 80.36 | $ | 66.50 | $ | 0.00 | $ | 56.23 | $ | 41.41 | $ | 0.00 | ||||||||||||
2017 | ||||||||||||||||||||||||
First Calendar Quarter | $ | 84.39 | $ | 69.06 | $ | 0.00 | $ | 57.30 | $ | 41.65 | $ | 0.00 | ||||||||||||
Second Calendar Quarter | $ | 91.99 | $ | 81.56 | $ | 0.00 | $ | 67.10 | $ | 49.24 | $ | 0.00 | ||||||||||||
Third Calendar Quarter | $ | 98.21 | $ | 85.13 | $ | 0.00 | $ | 76.30 | $ | 60.43 | $ | 0.00 | ||||||||||||
Fourth Calendar Quarter | $ | 109.19 | $ | 93.46 | $ | 0.00 | $ | 82.32 | $ | 68.37 | $ | 0.00 | ||||||||||||
2018 | ||||||||||||||||||||||||
First Calendar Quarter | $ | 128.86 | $ | 102.38 | $ | 0.00 | $ | 87.60 | $ | 69.75 | $ | 0.00 | ||||||||||||
Second Calendar Quarter | $ | 142.11 | $ | 113.61 | $ | 0.00 | $ | 105.78 | $ | 77.32 | $ | 0.00 | ||||||||||||
Third Calendar Quarter | $ | 161.07 | $ | 135.45 | $ | 0.00 | $ | 118.08 | $ | 96.53 | $ | 0.00 | ||||||||||||
Fourth Calendar Quarter | $ | 161.19 | $ | 113.70 | $ | 0.00 | $ | 131.82 | $ | 94.81 | $ | 0.00 | ||||||||||||
2019 | ||||||||||||||||||||||||
First Calendar Quarter | $ | 166.99 | $ | 130.12 | $ | 0.00 | $ | 136.92 | $ | 114.81 | $ | 0.00 | ||||||||||||
Second Calendar Quarter | $ | 167.53 | $ | 142.52 | $ | 0.00 | $ | 173.37 | $ | 107.06 | $ | 0.00 |
On June 7, 2019, the trading day prior to the public announcement of the execution of the merger agreement and the release of media reports regarding the transaction, the closing price per share of Tableau Class A common stock on the NYSE was $125.21, and the closing price per share of Salesforce common stock on the NYSE was $161.27. On July 2, 2019, the most recent practicable trading date prior to the filing of this document, the closing price per share of Tableau Class A common stock on the NYSE was $168.99, and the closing price per share of Salesforce common stock on the NYSE was $154.12. Tableau stockholders should obtain current market quotations for shares of Tableau Class A common stock and shares of Salesforce common stock before deciding whether to tender their Tableau shares in the offer.
Dividends
Salesforce has never paid any cash dividends on its common stock. The Salesforce board of directors currently intends to retain any future earnings to support operations and to finance the growth and development of its business and does not intend to pay cash dividends on its common stock for the foreseeable future. Any future determination related to Salesforce’s dividend policy will be made at the discretion of the Salesforce board of directors.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements and related notes present the historical consolidated financial statements of Salesforce, Tableau and MuleSoft as if the completion of the offer and the merger had occurred on the dates specified below.
On June 9, 2019, Salesforce and Tableau entered into the merger agreement, pursuant to which Salesforce agreed to acquire Tableau on the terms and subject to the conditions set forth therein. The transaction has not yet closed. Under the terms of the merger agreement, Salesforce is offering to exchange for each outstanding share of Tableau Class A common stock and Tableau Class B common stock, 1.103 shares of Salesforce common stock, together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.
On May 2, 2018, Salesforce acquired MuleSoft, which was deemed a significant acquisition per Regulation S-X, Topic 2. As the consolidated statement of operations of Salesforce for the year ended January 31, 2019 does not reflect MuleSoft’s operations for an entire annual period, pro forma adjustments have been made for the period of February 1, 2018 through the date of acquisition on May 2, 2018, as discussed in further detail below.
The following unaudited pro forma combined condensed financial information has been prepared to illustrate the estimated effects of the offer and the merger.
The unaudited pro forma combined condensed balance sheet as of April 30, 2019 is based on the individual historical consolidated balance sheets of Salesforce as of April 30, 2019 and Tableau as of March 31, 2019, and has been prepared to reflect the offer and the merger as if they occurred on April 30, 2019. The historical condensed consolidated balance sheet of Salesforce as of April 30, 2019 reflects the results of MuleSoft, therefore no adjustments needed to be made.
The unaudited pro forma combined condensed statements of operations for the year ended January 31, 2019 combines the historical consolidated results of operations of Salesforce for the year ended January 31, 2019, the historical consolidated results of operations of Tableau for the year ended December 31, 2018, and the historical consolidated results of operations of MuleSoft for the period from February 1, 2018 to May 2, 2018, and have been prepared to reflect the offer and the merger as if they occurred on February 1, 2018, the first day of Salesforce’s 2019 fiscal year.
The unaudited pro forma combined condensed statements of operations for the three months ended April 30, 2019 combine the historical condensed consolidated results of operations of Salesforce for the three months ended April 30, 2019 and Tableau for the three months ended March 31, 2019, and have been prepared to reflect the offer and the merger as if they occurred on February 1, 2018, the first day of Salesforce’s 2019 fiscal year. The historical condensed consolidated statements of operations of Salesforce for the three months ended April 30, 2019 include the results of MuleSoft for the full period presented, therefore no adjustments needed to be made.
The unaudited pro forma combined condensed financial information for all periods presented reflect Topic 606, which Salesforce adopted on a retrospective basis at the start of its fiscal 2019. Tableau adopted Topic 606 on a modified retrospective basis and therefore applied the new revenue recognition standard only to contracts that were not completed contracts prior to January 1, 2018, the start of its fiscal 2018. The unaudited pro forma combined condensed financial information for the year ended January 31, 2019 has been prepared in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) applicable to Salesforce as of and for the year
ended January 31, 2019 and does not reflect adjustments for Accounting Standards Update No. 2016-02, “Leases (Topic 842)”, also referred to as Topic 842, which Salesforce adopted on a prospective basis in its fiscal first quarter ended on April 30, 2019. The unaudited pro forma combined condensed financial information for the three months ended April 30, 2019 and as of April 30, 2019 have been prepared in accordance with Topic 842.
The unaudited pro forma combined condensed financial statements are based on the final purchase price allocation of MuleSoft, as disclosed in Salesforce’s Annual Report on Form 10-K for the fiscal year ended January 31, 2019.
Salesforce will utilize acquisition accounting for the proposed acquisition of Tableau and will update its preliminary estimated valuation and other studies promptly upon completion of the offer and the merger and will finalize this acquisition accounting as soon as practicable within the required measurement period, but in no event later than one year following the completion of the offer and the merger. The estimated acquired assets and assumed liabilities of Tableau have been measured based on various preliminary estimates using assumptions that Salesforce believes are reasonable and based on information that is currently available. These preliminary estimates and assumptions presented herein are subject to change during the measurement period as Salesforce finalizes its valuations of the tangible assets and liabilities, identifiable intangible assets, assumed equity plans and related income tax impacts in connection with the acquisition of Tableau. Differences between these preliminary estimates and the acquisition accounting will occur, and those differences could have a material impact on the accompanying unaudited pro forma combined condensed financial statements and the combined company’s future results of operations and financial position. The pro forma adjustments are preliminary estimates and have been made solely for the purpose of providing unaudited pro forma combined condensed financial statements prepared in accordance with the rules and regulations of the SEC.
The unaudited pro forma combined condensed financial information has been presented for informational purposes only. The unaudited pro forma combined condensed financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the offer and the merger occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The unaudited pro forma combined condensed financial information does not reflect any operating efficiencies or cost savings that Salesforce may achieve with respect to the combined company.
The unaudited pro forma combined condensed financial statements do not include pro forma adjustments for the acquisition of Griddable.io (which we refer to as “Griddable”), which Salesforce acquired on February 4, 2019, Bonobo.ai (which we refer to as “Bonobo”), which Salesforce acquired on May 20, 2019, MapAnything, Inc. (which we refer to as “MapAnything”), which Salesforce acquired on May 30, 2019, or the acquisition of Salesforce.org, LLC (which we refer to as “Salesforce.org”), which Salesforce acquired on June 3, 2019, as these transactions are not significant to Salesforce and Salesforce believes that it is not material to understanding the acquisition of Tableau and not material to the unaudited pro forma combined condensed financial statements.
The unaudited pro forma combined condensed financial information should be read in conjunction with the historical consolidated financial statements and accompanying notes of Salesforce included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2019 filed with the SEC on March 8, 2019 and its Quarterly Report on Form 10-Q for the three months ended April 30, 2019 filed with the SEC on June 5, 2019, the historical consolidated financial statements and accompanying notes of Tableau included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on February 22, 2019 and its Quarterly Report on Form 10-Q for the three months ended March 31, 2019 filed with the SEC on May 6, 2019 and the historical consolidated financial statements and accompanying notes of MuleSoft included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 22, 2018. See “Where to Obtain More Information.”
Transaction Details
Pursuant to the merger agreement, and upon the terms and subject to the conditions thereof, Salesforce will commence the offer to exchange each outstanding share of Tableau Class A common stock and Tableau Class B common stock for 1.103 shares of Salesforce common stock, together with cash in lieu of any fractional shares of Salesforce common stock, without interest and subject to reduction for any applicable withholding taxes.
The offer and the merger are currently expected to close in the third quarter of Salesforce’s 2020 fiscal year, ending October 31, 2019, subject to the satisfaction of closing conditions, including among others the minimum tender condition and the receipt of required regulatory approvals.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
As of April 30, 2019
(in millions)
April 30, 2019 | March 31, 2019 | Pro Forma Adjustments (Note 3) | Pro Forma Combined | |||||||||||||||
Salesforce | Tableau | |||||||||||||||||
Assets | �� | |||||||||||||||||
Current assets: | ||||||||||||||||||
Cash and cash equivalents | $ | 4,110 | $ | 501 | $ | (140 | ) | d | $ | 4,471 | ||||||||
Marketable securities | 2,269 | 554 | 5 | c | 2,828 | |||||||||||||
Accounts receivable | 2,153 | 177 | 0 | 2,330 | ||||||||||||||
Costs capitalized to obtain revenue contracts, net | 786 | 0 | 0 | 786 | ||||||||||||||
Prepaid expenses and other current assets | 717 | 175 | (19 | ) | a | 873 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Total current assets | 10,035 | 1,407 | (154 | ) | 11,288 | |||||||||||||
Investments, noncurrent | 0 | 5 | (5 | ) | c | 0 | ||||||||||||
Property and equipment, net | 2,243 | 102 | 0 | 2,345 | ||||||||||||||
Operating lease right of use assets | 2,854 | 218 | 15 | a | 3,087 | |||||||||||||
Costs capitalized to obtain revenue contracts, noncurrent, net | 1,149 | 0 | 0 | 1,149 | ||||||||||||||
Strategic investments | 1,548 | 0 | 0 | 1,548 | ||||||||||||||
Goodwill | 12,854 | 45 | 10,825 | a, b, e | 23,724 | |||||||||||||
Intangible assets acquired through business combinations, net | 1,794 | 0 | 4,281 | a | 6,075 | |||||||||||||
Capitalized software and other assets, net | 677 | 63 | (119 | ) | a, b, e | 621 | ||||||||||||
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|
|
| |||||||||||
Total assets | $ | 33,154 | $ | 1,840 | $ | 14,843 | $ | 49,837 | ||||||||||
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Liabilities and stockholders’ equity | ||||||||||||||||||
Current liabilities: | ||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | $ | 2,228 | $ | 175 | $ | (17 | ) | c | $ | 2,386 | ||||||||
Operating lease liabilities, current | 675 | 0 | 17 | c | 692 | |||||||||||||
Unearned revenue | 7,585 | 363 | (124 | ) | a | 7,824 | ||||||||||||
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| |||||||||||
Total current liabilities | 10,488 | 538 | (124 | ) | 10,902 | |||||||||||||
Noncurrent debt | 3,173 | 0 | 0 | 3,173 | ||||||||||||||
Noncurrent operating lease liabilities | 2,383 | 252 | 0 | 2,635 | ||||||||||||||
Noncurrent unearned revenue | 0 | 20 | (7 | ) | a | 13 | ||||||||||||
Other noncurrent liabilities | 664 | 11 | 388 | e | 1,063 | |||||||||||||
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| |||||||||||
Total liabilities | 16,708 | 821 | 257 | 17,786 | ||||||||||||||
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Stockholders’ equity: | ||||||||||||||||||
Preferred stock | 0 | 0 | 0 | 0 | ||||||||||||||
Common stock | 1 | 0 | 15 | a, b | 16 | |||||||||||||
Additional paid-in capital | 14,383 | 1,432 | 14,298 | a, b | 30,113 | |||||||||||||
Accumulated other comprehensive loss | (65 | ) | (9 | ) | 9 | b | (65 | ) | ||||||||||
Retained earnings (accumulated deficit) | 2,127 | (404 | ) | 264 | b, d | 1,987 | ||||||||||||
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Total stockholders’ equity | 16,446 | 1,019 | 14,586 | 32,051 | ||||||||||||||
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Total liabilities and stockholders’ equity | $ | 33,154 | $ | 1,840 | $ | 14,843 | $ | 49,837 | ||||||||||
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UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Year Ended January 31, 2019
(in millions, except per share data)
Year Ended January 31, 2019 | Period From February 1, 2018 to May 2, 2018 | Pro Forma Adjustments (Note 4) | Pro Forma Results (adjusted for acquisition of MuleSoft) | Year Ended December 31, 2018 | Pro Forma Adjustments (Note 5) | Pro Forma Combined | ||||||||||||||||||||||||||
Salesforce | MuleSoft | Tableau | ||||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Subscription and support | $ | 12,413 | $ | 71 | $ | (6 | ) | a | $ | 12,478 | $ | 1,155 | $ | (171 | ) | a | $ | 13,462 | ||||||||||||||
Professional services and other | 869 | 19 | 0 | 888 | 0 | 0 | 888 | |||||||||||||||||||||||||
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Total revenues | 13,282 | 90 | (6 | ) | 13,366 | 1,155 | (171 | ) | 14,350 | |||||||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||||||||||
Subscription and support | 2,604 | 6 | 14 | c | 2,624 | 142 | 394 | b, c | 3,160 | |||||||||||||||||||||||
Professional services and other | 847 | 21 | 5 | b | 873 | 0 | 0 | 873 | ||||||||||||||||||||||||
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| |||||||||||||||||||
Total cost of revenues | 3,451 | 27 | 19 | 3,497 | 142 | 394 | 4,033 | |||||||||||||||||||||||||
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Gross profit | 9,831 | 63 | (25 | ) | 9,869 | 1,013 | (565 | ) | 10,317 | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Research and development | 1,886 | 21 | 9 | b | 1,916 | 383 | 138 | b | 2,437 | |||||||||||||||||||||||
Marketing and sales | 6,064 | 52 | 52 | b, c | 6,168 | 594 | 418 | b, c | 7,180 | |||||||||||||||||||||||
General and administrative | 1,346 | 20 | 5 | b | 1,371 | 126 | 28 | b | 1,525 | |||||||||||||||||||||||
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Total operating expenses | 9,296 | 93 | 66 | 9,455 | 1,103 | 584 | 11,142 | |||||||||||||||||||||||||
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| |||||||||||||||||||
Income (loss) from operations | 535 | (30 | ) | (91 | ) | 414 | (90 | ) | (1,149 | ) | (825 | ) | ||||||||||||||||||||
Gains on strategic investments | 542 | 0 | 0 | 542 | 0 | 0 | 542 | |||||||||||||||||||||||||
Other income (expense) | (94 | ) | 1 | (12 | ) | d | (105 | ) | 18 | 0 | (87 | ) | ||||||||||||||||||||
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Income (loss) before benefit from (provision for) income taxes | 983 | (29 | ) | (103 | ) | 851 | (72 | ) | (1,149 | ) | (370 | ) | ||||||||||||||||||||
Benefit from (provision for) income taxes | 127 | 0 | 23 | e | 150 | (5 | ) | 273 | d | 418 | ||||||||||||||||||||||
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Net income (loss) | $ | 1,110 | $ | (29 | ) | $ | (80 | ) | $ | 1,001 | $ | (77 | ) | $ | (876 | ) | $ | 48 | ||||||||||||||
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Basic net income (loss) per share | $ | 1.48 | $ | (0.22 | ) | $ | 1.33 | $ | (0.93 | ) | $ | 0.06 | ||||||||||||||||||||
Diluted net income (loss) per share | $ | 1.43 | $ | (0.22 | ) | $ | 1.28 | $ | (0.93 | ) | $ | 0.05 | ||||||||||||||||||||
Shares used in computing basic net income (loss) per share | 751 | 132 | 754 | 83 | 850 | |||||||||||||||||||||||||||
Shares used in computing diluted net income (loss) per share | 775 | 132 | 780 | 83 | 885 | |||||||||||||||||||||||||||
Amounts include amortization of purchased intangibles from business combinations, as follows: | ||||||||||||||||||||||||||||||||
Cost of revenues | $ | 215 | $ | 0 | $ | 14 | $ | 229 | $ | 2 | $ | 376 | $ | 607 | ||||||||||||||||||
Marketing and sales | 232 | 0 | 35 | 267 | 0 | 325 | 592 | |||||||||||||||||||||||||
Amounts include stock-based expense, as follows: | ||||||||||||||||||||||||||||||||
Cost of revenues | $ | 161 | $ | 2 | $ | 5 | $ | 168 | $ | 13 | $ | 18 | $ | 199 | ||||||||||||||||||
Research and development | 307 | 3 | 9 | 319 | 112 | 138 | 569 | |||||||||||||||||||||||||
Marketing and sales | 643 | 6 | 17 | 666 | 87 | 93 | 846 | |||||||||||||||||||||||||
General and administrative | 172 | 2 | 5 | 179 | 26 | 28 | 233 |
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Three Months Ended April 30, 2019
(in millions, except per share data)
Three Months Ended | Pro Forma Adjustments (Note 5) | Pro Forma Combined | ||||||||||||||||||
April 30, 2019 | March 31, 2019 | |||||||||||||||||||
Salesforce | Tableau | |||||||||||||||||||
Revenues: | ||||||||||||||||||||
Subscription and support | $ | 3,496 | $ | 282 | $ | (47 | ) | a | $ | 3,731 | ||||||||||
Professional services and other | 241 | 0 | 0 | 241 | ||||||||||||||||
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Total revenues | 3,737 | 282 | (47 | ) | 3,972 | |||||||||||||||
Cost of revenues: | ||||||||||||||||||||
Subscription and support | 678 | 39 | 96 | b, c | 813 | |||||||||||||||
Professional services and other | 236 | 0 | 0 | 236 | ||||||||||||||||
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Total cost of revenues | 914 | 39 | 96 | 1,049 | ||||||||||||||||
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Gross profit | 2,823 | 243 | (143 | ) | 2,923 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development | 554 | 112 | 17 | b | 683 | |||||||||||||||
Marketing and sales | 1,697 | 162 | 85 | b, c | 1,944 | |||||||||||||||
General and administrative | 362 | 62 | 3 | b | 427 | |||||||||||||||
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Total operating expenses | 2,613 | 336 | 105 | 3,054 | ||||||||||||||||
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Income (loss) from operations | 210 | (93 | ) | (248 | ) | (131 | ) | |||||||||||||
Gains on strategic investments | 281 | 0 | 0 | 281 | ||||||||||||||||
Other income (expense) | (9 | ) | 5 | 0 | (4 | ) | ||||||||||||||
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Income (loss) before benefit from (provision for) income taxes | 482 | (88 | ) | (248 | ) | 146 | ||||||||||||||
Benefit from (provision for) income taxes | (90 | ) | (1 | ) | 100 | d | 9 | |||||||||||||
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Net income (loss) | $ | 392 | $ | (89 | ) | $ | (148 | ) | $ | 155 | ||||||||||
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Basic net income (loss) per share | $ | 0.51 | $ | (1.04 | ) | $ | 0.18 | |||||||||||||
Diluted net income (loss) per share | $ | 0.49 | $ | (1.04 | ) | $ | 0.17 | |||||||||||||
Shares used in computing basic net income (loss) per share | 771 | 85 | 867 | |||||||||||||||||
Shares used in computing diluted net income (loss) per share | 793 | 85 | 898 | |||||||||||||||||
Amounts include amortization of purchased intangibles from business combinations, as follows: | ||||||||||||||||||||
Cost of revenues | $ | 61 | $ | 0 | $ | 94 | $ | 155 | ||||||||||||
Marketing and sales | 68 | 0 | 73 | 141 | ||||||||||||||||
Amounts include stock-based expense, as follows: | ||||||||||||||||||||
Cost of revenues | $ | 43 | $ | 4 | $ | 2 | $ | 49 | ||||||||||||
Research and development | 81 | 32 | 17 | 130 | ||||||||||||||||
Marketing and sales | 177 | 23 | 12 | 212 | ||||||||||||||||
General and administrative | 42 | 7 | 3 | 52 |
salesforce.com, inc.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
1. Basis of Pro Forma Presentation
The unaudited pro forma combined condensed balance sheet as of April 30, 2019 and the pro forma combined condensed statement of operations for the three months ended April 30, 2019 and the year ended January 31, 2019 were prepared using the acquisition method of accounting and are based on historical consolidated financial statements of Salesforce, Tableau and MuleSoft.
The historical consolidated financial statements have been adjusted in the unaudited pro forma combined condensed financial statements to give effect to pro forma events that are (1) directly attributable to the offer and the merger, (2) factually supportable and (3) with respect to the pro forma combined condensed statement of operations, expected to have a continuing impact on the combined results following the offer and the merger.
Salesforce accounts for business combinations pursuant to Financial Accounting Standards Board (which we refer to as “FASB”) Accounting Standards Codification (which we refer to as “ASC”) 805, Business Combinations (which we refer to as “ASC 805”). In accordance with ASC 805, Salesforce uses its best estimates and assumptions to accurately assign fair value to tangible assets to be acquired, identifiable intangible assets and liabilities and the related income tax impacts. Goodwill is measured as the excess of purchase consideration over the fair value of tangible and intangible assets and liabilities.
The unaudited pro forma combined condensed financial statements are based on a preliminary estimated purchase price allocation of Tableau, provided for illustrative purposes only and do not purport to represent what the combined company’s results of operations or financial condition would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual results of operations may differ significantly from the pro forma amounts reflected herein. In addition, the unaudited pro forma combined condensed financial information does not reflect any future planned cost savings initiatives following the completion of the offer and the merger.
As of the date of this filing, Salesforce has not commenced the detailed valuation work necessary to finalize the required estimated fair values and estimated lives of Tableau’s assets to be acquired and liabilities to be assumed and the related allocation of purchase price. To prepare the unaudited pro forma combined condensed financial information, Salesforce adjusted Tableau’s assets and liabilities to their estimated fair values based on preliminary valuation work. The allocation of the purchase price for the acquisition of Tableau will be determined after the transaction is completed and after completion of an analysis to determine the estimated fair value of Tableau’s assets and liabilities and associated tax adjustments. Accordingly, the final acquisition accounting adjustments may be materially different from the unaudited pro forma adjustments.
The unaudited pro forma combined condensed financial statements are based on the final purchase price allocation of MuleSoft, as disclosed in Salesforce’s Annual Report on Form 10-K for the fiscal year ended January 31, 2019 filed with the SEC on March 8, 2019.
The unaudited pro forma combined condensed financial information for the year ended January 31, 2019 has been prepared in conformity with GAAP applicable to Salesforce as of and for the year ended January 31, 2019 and does not reflect adjustments for Topic 842, which the Company adopted on a prospective basis in its fiscal first quarter ended on April 30, 2019.
The unaudited pro forma combined condensed financial information should be read in conjunction with Salesforce’s historical consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended January 31, 2019 and its Quarterly Report on Form 10-Q for the three
months ended April 30, 2019, the historical consolidated financial statements and accompanying notes of Tableau included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and its Quarterly Report on Form 10-Q for the three months ended March 31, 2019 and the historical consolidated financial statements and accompanying notes of MuleSoft included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017. See “Where to Obtain More Information.”
Accounting Periods Presented
Tableau’s historical fiscal year ends on December 31 and for purposes of the pro forma combined condensed financial information, its historical results have been combined with Salesforce’s January 31 fiscal year end as explained below. For MuleSoft, the period presented is from February 1, 2018 through May 2, 2018.
The unaudited pro forma combined condensed balance sheet of Salesforce and Tableau as of April 30, 2019 is presented as if the acquisition had taken place on April 30, 2019. The unaudited pro forma combined condensed statement of operations of Salesforce, Tableau and MuleSoft for the year ended January 31, 2019 and the unaudited pro forma combined condensed statement of operations of Salesforce and Tableau for the three months ended April 30, 2019 is presented as if the acquisition had taken place on February 1, 2018. Due to different fiscal period ends, the pro forma combined condensed statement of operations for the year ended January 31, 2019 combines the historical results of Salesforce for the year ended January 31, 2019, the historical results of Tableau for the year ended December 31, 2018 and the historical results of MuleSoft for the period from February 1, 2018 to May 2, 2018. The pro forma combined condensed statement of operations for the three months ended April 30, 2019 combines the historical results of Salesforce for the three months ended April 30, 2019 and the historical results of Tableau for the three months ended March 31, 2019. The historical condensed consolidated statements of operations of Salesforce for the three months ended April 30, 2019 include the results of MuleSoft for the full period presented, therefore no adjustments needed to be made. The pro forma combined condensed balance sheet combines the historical balance sheet for Salesforce as of April 30, 2019 and the historical balance sheet for Tableau as of March 31, 2019. The historical condensed consolidated balance sheet of Salesforce as of April 30, 2019 reflects the results of MuleSoft, therefore no adjustments needed to be made.
2. Preliminary Estimated Consideration to be Transferred and the Estimated Fair Value of Net Assets to Be Acquired
The unaudited pro forma combined condensed balance sheet as of April 30, 2019 has been adjusted to reflect the preliminary estimate of the fair value of Tableau’s tangible assets, identifiable intangible assets to be acquired and liabilities to be assumed. The excess of the preliminary estimated purchase consideration over these fair values is recorded to goodwill. The preliminary estimated unaudited pro forma purchase price allocation was based on data that was available through Salesforce’s due diligence review of Tableau’s business in connection with the offer and the merger and discussions with Tableau’s management. Upon completion of the merger, additional valuation work will be performed and any increases or decreases in the fair value of assets acquired or liabilities assumed will result in adjustments to the balance sheet or statement of operations until the purchase price allocation is finalized. The following table summarizes the preliminary estimate of the purchase consideration to be transferred as a result of the offer and the merger:
(in millions) | Fair Value | |||
Issuance of stock | $ | 15,483 | ||
Fair value of stock options and restricted stock awards assumed | 262 | |||
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$ | 15,745 | |||
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The preliminary estimated fair value of the stock options and restricted stock assumed by Salesforce was determined using the Black-Scholes option pricing model. The share conversion ratio applied to convert outstanding Tableau equity awards into equity awards for Salesforce shares is calculated as follows: (a) the
number of shares of Salesforce common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of Tableau common stock subject to such Tableau option immediately prior to the effective time of the offer and the merger by 1.103 and (b) at an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per share exercise price of such Tableau option by 1.103.
The following table summarizes the preliminary estimated fair values of assets acquired and liabilities assumed as if the acquisition occurred on April 30, 2019:
(in millions) | Fair Value | |||
Net assets acquired | $ | 1,798 | ||
Intangible assets | 4,281 | |||
Goodwill | 10,870 | |||
Net liabilities assumed | (690 | ) | ||
Deferred tax liability | (514 | ) | ||
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Net assets acquired | $ | 15,745 | ||
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The estimated purchase price allocation has been used to prepare pro forma adjustments in the unaudited pro forma combined condensed financial statements. The actual purchase price allocation will be determined when Salesforce has the detailed valuations and necessary calculations. The actual allocation could differ materially from the preliminary estimated allocation used in the pro forma adjustments.
The following table sets forth the components of the identifiable intangible assets to be acquired and their preliminary estimated useful lives as if the acquisition occurred on April 30, 2019:
(in millions) | Fair Value | Useful Life | ||||||
Developed technology | $ | 1,889 | 5 years | |||||
Customer relationships | 2,362 | 8 years | ||||||
Trade name and trademarks | 30 | 1 year | ||||||
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Total intangible assets subject to amortization | $ | 4,281 | ||||||
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These preliminary estimates of fair value and their preliminary estimated useful lives will likely be different from the amounts included in the acquisition accounting upon the close of the offer and the merger, and the difference could have a material impact on the accompanying unaudited pro forma combined condensed financial statements. Once Salesforce has full access to information about Tableau’s intangible assets, additional insight will be gained that could impact (i) the estimated total value assigned to identifiable intangible assets and (ii) the estimated weighted average useful life of each category of intangible assets. The estimated intangible asset values and their useful lives could be impacted by a variety of factors that may become known to Salesforce only upon access to additional information or by changes in such factors that may occur prior to completion of the offer and the merger. These factors include, but are not limited to, historical information obtained from Tableau, discussions with management and product roadmap. Increased knowledge about these or other elements could result in a change to the estimated fair value of the identifiable intangible assets or to the estimated weighted average useful lives from what Salesforce has assumed in these unaudited pro forma combined condensed financial statements. The combined effect of any such changes could then also result in a significant increase or decrease to Salesforce’s estimate of associated amortization expense.
3. Tableau Pro Forma Adjustments—Balance Sheet
a. To record the purchase accounting adjustments based on the estimated purchase price allocation as described within Note 2 above.
b. To eliminate certain accounts of Tableau’s, such as existing goodwill, intangible assets and various equity accounts to arrive to a pro forma combined condensed balance sheet.
c. To reclassify the presentation of Tableau’s balance sheet for marketable securities and other accounts to conform to Salesforce’s presentation.
d. To record the related transaction costs of approximately $40 million and $100 million that would have been incurred and paid by Salesforce and Tableau, respectively, prior to April 30, 2019 as if the offer and the merger had occurred as of April 30, 2019.
e. To record the estimated income tax effects of the purchase accounting adjustments and the partial release of Tableau’s valuation allowance related to its U.S. deferred tax assets as if the offer and the merger had occurred as of April 30, 2019.
4. MuleSoft Pro Forma Adjustments—Statement of Operations
a. To record reduction in revenues related to the estimated fair value of the acquired unearned revenue and the customer contract asset. The difference between the fair values of acquired unearned revenues, representing amounts equivalent to the estimated costs plus an appropriate profit margin to fulfill the obligations assumed, and the historical carrying amounts of MuleSoft’s unearned revenues results in a discount to the recorded unearned revenue and is therefore subsequently recognized as a reduction to revenues.
b. To record additional stock-based expense related to the unvested portion of the MuleSoft stock options and RSUs that were assumed on May 2, 2018 using straight-line amortization method over the remaining vesting periods assuming an acquisition date of February 1, 2018.
c. To record the amortization expense for the period from February 1, 2018 to May 2, 2018 related to the intangible assets acquired.
d. To record an additional three months of interest expense and amortization of debt issuance costs related to the $3.0 billion combination of unsecured term loans and debt securities issued in connection with the acquisition of MuleSoft and the bridge loan available.
e. To record the pro forma income tax adjustments to the periods presented. These adjustments primarily relate to the income tax impact associated with the pro forma condensed combined statement of operations, as well as income tax adjustments for MuleSoft’s losses that could not be benefited previously, due to its valuation allowance in the periods presented.
5. Tableau Pro Forma Adjustments—Statement of Operations
a. To record reduction in revenues related to the estimated fair value of the acquired unearned revenue and the customer contract asset. The difference between the preliminary estimated fair values of acquired unearned revenues, representing amounts equivalent to the estimated costs plus an appropriate profit margin to fulfill the obligations assumed, and the historical carrying amounts of Tableau’s unearned revenues results in a discount to the recorded unearned revenue and is therefore subsequently recognized as a reduction to revenues.
b. To record the additional estimated stock-based expense related to the unvested portion of the Tableau’s stock options and RSUs that will be assumed using straight-line amortization method over the remaining vesting periods.
Fiscal Year Ended January 31, 2019 | ||||||||||||
(in millions) | Tableau Historical Stock-Based Compensation | Stock Based Compensation Based Upon Preliminary Fair Values | Increase in Stock-Based Compensation Expense | |||||||||
Cost of revenues | $ | 13 | $ | 31 | $ | 18 | ||||||
Research and development | 112 | 250 | 138 | |||||||||
Marketing and sales | 87 | 180 | 93 | |||||||||
General and administrative | 26 | 54 | 28 | |||||||||
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Total stock-based compensation | $ | 238 | $ | 515 | $ | 277 | ||||||
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Three Months Ended April 30, 2019 | ||||||||||||
(in millions) | Tableau Historical Stock-Based Compensation | Stock Based Compensation Based Upon Preliminary Fair Values | Increase in Stock-Based Compensation Expense | |||||||||
Cost of revenues | $ | 4 | $ | 6 | $ | 2 | ||||||
Research and development | 32 | 49 | 17 | |||||||||
Marketing and sales | 23 | 35 | 12 | |||||||||
General and administrative | 7 | 10 | 3 | |||||||||
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Total stock-based compensation | $ | 66 | $ | 100 | $ | 34 | ||||||
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c. To record the estimated amortization expense related to the intangible assets to be acquired.
Fiscal Year Ended January 31, 2019 | ||||||||||||
(in millions) | Tableau Historical Amortization Expense | Amortization Expense Based Upon Preliminary Fair Values | Increase in Amortization Expense | |||||||||
Cost of revenues | $ | 2 | $ | 378 | $ | 376 | ||||||
Marketing and sales | 0 | 325 | 325 | |||||||||
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Amortization Expense | $ | 2 | $ | 703 | $ | 701 | ||||||
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Three Months Ended April 30, 2019 | ||||||||||||
(in millions) | Tableau Historical Amortization Expense | Amortization Expense Based Upon Preliminary Fair Values | Increase in Amortization Expense | |||||||||
Cost of revenues | $ | 0 | $ | 94 | $ | 94 | ||||||
Marketing and sales | 0 | 73 | 73 | |||||||||
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Amortization Expense | $ | 0 | $ | 167 | $ | 167 | ||||||
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d. To record the pro forma income tax adjustments to the periods presented. These adjustments primarily relate to the income tax impact associated with the pro forma condensed combined statement of operations, as well as income tax adjustments for Tableau’s losses that could not be benefited previously, due to its valuation allowance in the periods presented.
6. Pro Forma Earnings Per Share
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma combined statements of operations are based upon Salesforce’s weighted average number of shares outstanding plus the estimated shares to be issued upon the close of the offer and the merger. The shares to be issued and assumed were approximately 105 million and were determined based on the Tableau shares outstanding times the conversion ratio provided in the merger agreement. The final shares to be issued will be based on the number of outstanding shares as of the date the offer and the merger. The pro forma basic and diluted earnings per share amounts for the fiscal year ended January 31, 2019 are additionally adjusted for shares issued and assumed in connection with the acquisition of MuleSoft as if the acquisition had taken place on February 1, 2018.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the material U.S. federal income tax consequences of the offer and the merger to holders of Tableau common stock that exchange shares of Tableau common stock for the transaction consideration pursuant to the offer and/or the merger. This discussion is based on current provisions of the Code, the U.S. Treasury regulations promulgated thereunder, judicial opinions and published positions of the Internal Revenue Service (which we refer to as the “IRS”), all as in effect as of the date of this document and all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change or interpretation could affect the accuracy of the statements and conclusions set forth herein. Neither Salesforce nor Tableau has sought, or intends to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following discussion, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.
This discussion is for general information only and does not purport to address all aspects of U.S. federal income taxation that may be relevant to particular holders of Tableau common stock in light of their particular facts and circumstances and does not apply to holders of Tableau common stock that are subject to special rules under U.S. federal income tax law (including, for example, banks and other financial institutions, dealers in securities or currencies, traders in securities that elect to apply a mark-to-market method of accounting, insurance companies, mutual funds, tax-exempt entities, entities or arrangements treated as partnerships for U.S. federal income tax purposes or other flow-through entities (and investors therein), subchapter S corporations, retirement plans, individual retirement accounts or other tax-deferred accounts, real estate investment trusts, regulated investment companies, holders liable for the alternative minimum tax, certain former citizens or former long-term residents of the United States, U.S. holders (as defined below) having a “functional currency” other than the U.S. dollar, holders that hold shares of Tableau common stock as part of a hedge, straddle, constructive sale, conversion transaction or other integrated transaction, “controlled foreign corporations,” “passive foreign investment companies,” holders that hold (or that held, directly or constructively, at any time during the five year period ending on the date of the disposition of such holder’s Tableau common stock pursuant to the offer or the merger, as applicable) 5% or more of Tableau’s outstanding common stock, holders who are required to recognize income or gain with respect to the offer or the merger no later than such income or gain is required to be reported on an applicable financial statement under Section 451(b) of the Code, holders who hold Tableau common stock that constitutes “qualified small business stock” under Section 1202 of the Code, holders who acquired their Tableau common stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code, and holders that acquired their shares of Tableau common stock through the exercise of an employee stock option or otherwise as compensation). This discussion is limited to such holders that hold their Tableau common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address any considerations under U.S. federal tax laws other than those pertaining to the income tax, nor does it address any considerations under any state, local or foreign tax laws, under the unearned income Medicare contribution tax pursuant to Section 1411 of the Code or under the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations issued thereunder and intergovernmental agreements entered into pursuant thereto).
If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds shares of Tableau common stock, the U.S. federal income tax treatment of a person treated as a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Any entity treated as a partnership for U.S. federal income tax purposes that holds shares of Tableau common stock and any partners in such partnership or any other person excluded from this discussion, should consult their tax advisors regarding the tax consequences of the offer and the merger to them.
ALL HOLDERS OF TABLEAU COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE OFFER AND THE MERGER, INCLUDING THE APPLICABILITY AND EFFECTS OF U.S. FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
For purposes of this discussion, the term “U.S. holder” means a beneficial owner of shares of Tableau common stock that is, for U.S. federal income tax purposes:
an individual who is a citizen or resident of the United States;
a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes.
The term “non-U.S. holder” means a beneficial owner of Tableau common stock that is not a U.S. holder or an entity or arrangement classified as a partnership for U.S. federal income tax purposes.
U.S. Holders
Each of Tableau and Salesforce intends the offer and the merger, taken together, to qualify as a reorganization within the meaning of Section 368(a) of the Code. However, completion of the offer and the merger is not conditioned upon receipt of an opinion from counsel to either Tableau or Salesforce that the offer and the merger qualify as a reorganization, and the offer and the merger will occur even if they do not so qualify. In connection with the filing of the registration statement of which this prospectus/offer to exchange is a part and subject to the qualifications and limitations set forth herein, Wachtell, Lipton, Rosen & Katz will deliver to Salesforce and Tableau an opinion that the statements under the captions “Material U.S. Federal Income Tax Consequences—U.S. Holders” and “Material U.S. Federal Income Tax Consequences—Non-U.S. Holders” constitute the opinion of Wachtell, Lipton, Rosen & Katz, as to the material U.S. federal income tax consequences of the offer and the merger. The opinion will be based on facts and representations contained in representation letters provided by Tableau and Salesforce and on customary factual assumptions.
Assuming the offer and the merger, taken together, qualifies as a “reorganization” within the meaning of Section 368(a) of the Code:
A U.S. holder will not recognize gain or loss upon exchanging Tableau common stock for Salesforce common stock in the offer or the merger, except to the extent of cash received in lieu of fractional shares of Salesforce common stock as described below;
A U.S. holder’s aggregate tax basis in the Salesforce common stock received in the offer and the merger (including any fractional share interest for which cash is received) will equal such U.S. holder’s aggregate adjusted tax basis in the shares of Tableau common stock surrendered in the offer or the merger; and
A U.S. holder’s holding period for the shares of Salesforce common stock received in the offer and the merger will include such U.S. holder’s holding period for the shares of Tableau common stock surrendered in exchange therefor.
A U.S. holder who receives cash in lieu of a fractional share of Salesforce common stock in the offer or the merger generally will recognize capital gain or loss in an amount equal to the difference between the amount of cash received instead of a fractional share and the stockholder’s tax basis allocable to such fractional share. Such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if, as of the effective date of the offer or the merger, whichever is applicable to the U.S. holder, the holding period for such fractional share (including the holding period of shares of Tableau common stock surrendered therefor) is greater than one year. Long-term capital gains of certain non-corporate holders of Tableau common stock, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations.
If the offer and the merger fail to qualify as a reorganization within the meaning of Section 368(a) of the Code, then a U.S. holder would recognize gain or loss upon the exchange of Tableau common stock for Salesforce common stock equal to the difference between the fair market value, at the time of the offer or the merger, as applicable, of the Salesforce common stock received in the offer or the merger (including any cash received in lieu of a fractional share) and such U.S. holder’s tax basis in the Tableau common stock surrendered in the offer or the merger. Such gain or loss would be long-term capital gain or loss if the Tableau common stock was held for more than one year at the time of the offer or the merger, whichever is applicable to the U.S. holder. In such event, the aggregate tax basis of Salesforce common stock received in the offer or the merger would equal its fair market value at the time of the closing of the offer or the merger, and the holding period of such Salesforce common stock would commence the day after the closing of the offer or the merger.
Non-U.S. Holders
As discussed above under the section entitled “—U.S. Holders,” the offer and the merger, taken together, is intended to be treated as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming the offer and the merger, taken together, qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, holders of Tableau common stock will only recognize gain or loss in respect of cash received in lieu of fractional shares. If the offer and the merger fail to qualify as a reorganization within the meaning of Section 368(a) of the Code, then any gain recognized by a non-U.S. holder upon the exchange of Tableau common stock for Salesforce common stock (including the receipt of cash in lieu of fractional shares) pursuant to the offer or the merger generally will not be subject to U.S. federal income tax except as described below. Any gain recognized by a non-U.S. holder on the receipt of cash in lieu of fractional shares pursuant to the offer or the merger (or otherwise recognized as a result of the offer and the merger failing to qualify as a reorganization within the meaning of Section 368(a) of the Code) generally will not be subject to U.S. federal income tax unless: the gain is “effectively connected” with a U.S. trade or business of such non-U.S. holder (and, if required by an applicable income tax treaty, is also attributable to a permanent establishment or a fixed base in the United States maintained by such non-U.S. holder), in which case the non-U.S. holder generally will be subject to tax on such gain in the same manner as a U.S. holder and, if the non-U.S. holder is a foreign corporation, such corporation may be subject to branch profits tax at the rate of 30% (or such lower rate as may be specified by an applicable income tax treaty); or
the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the consummation of the offer (or, if applicable, in the taxable year of the merger) and certain other conditions are met, in which case the non-U.S. holder generally will be subject to a 30% tax on the non-U.S. holder’s net gain realized in the offer or the merger, which may be offset by U.S. source capital losses of the non-U.S. holder, if any.
Non-U.S. holders should consult their tax advisors regarding potentially applicable income tax treaties that may provide for different rules.
Information Reporting and Backup Withholding
Payments made in exchange for shares of Tableau common stock pursuant to the offer or the merger may be subject, under certain circumstances, to informationInformation reporting and backup withholding (currently at a rate of 24%). To avoid backup withholding and certain other penalties imposed bymay apply to payments made in connection with the IRS, a U.S. holder that does not otherwise establish an exemption should properly complete and timely return an IRS Form W-9. Certain holders (such as certain corporations and non-U.S. holders) are exempt from backup withholding. Holders exempt from backup withholding may be required to timely comply with certification requirements and identification procedures in order to establish an exemption from information reporting and backup withholding or otherwise avoid backup withholding. A non-U.S. holder generally may establish an exemption from backup withholding by certifying its non-U.S. person status on a properly completed applicable IRS Form W-8.first merger. Backup withholding is
will not apply, however, if the U.S. Holder provides proof of an additional tax.applicable exemption or furnishes its taxpayer identification number and otherwise complies with all applicable certification requirements. Any amounts withheld under the backup withholding rules may be refundedallowed as a refund or creditedcredit against a holder’sU.S. Holder’s U.S. federal income tax liability if any, provided that such holder furnishes the required information is timely furnished to the IRS in a timely manner. In the event of backup withholding, see your tax advisor to determine if you are entitled to any tax credit, tax refund or other tax benefit as a result of such backup withholding.IRS.
The preceding discussion is intended only as a summary of materialTHIS SUMMARY DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OF THE POTENTIAL TAX CONSEQUENCES RELATING TO THE MERGERS, AND IS NOT, AND IS NOT INTENDED TO BE, TAX ADVICE. ALL STOCKHOLDERS ARE STRONGLY ADVISED AND ARE EXPECTED TO CONSULT THEIR LEGAL AND TAX ADVISORS WITH RESPECT TO THE U.S. federal income tax consequences of the offer and the merger. It is not a complete analysis or discussion of all potential tax effects that may be important to a particular holder. All holders of Tableau common stock should consult their own tax advisors as to the specific tax consequences of the offer and the merger to them, including record retention and tax-reporting requirements, and the applicability and effect of any federal, state, local and non-U.S. tax laws.FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER U.S. FEDERAL TAX LAWS, INCLUDING ESTATE OR GIFT TAX LAWS, OR UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS.
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DESCRIPTION OF SALESFORCE CAPITAL STOCK
General
Salesforce’s authorized capital stock consists of 1,600,000,000 shares of common stock, $0.001 par value, (which we refer to as the “Salesforce common stock”), and 5,000,000 shares of undesignated preferred stock, $0.001 par value (which we refer to as the “Salesforce preferred stock” and together with Salesforce common stock, the “Salesforce capital stock”).value. The following description of the SalesforceSalesforce’s capital stock does not purport to be complete and is subject to, and qualified in its entirety by, the SalesforceSalesforce’s amended and restated certificate of incorporation (which we refer to as the “Salesforce charter”) and the Salesforce amended and restated bylaws, (which we refer to as the “Salesforce bylaws”), which are exhibits to the registration statement of which this documentprospectus forms a part.
Salesforce Common Stock
As of June 24, 2019,December 21, 2020, approximately 778,877,674917,734,496 shares of SalesforceSalesforce’s common stock were outstanding (excluding treasury shares).outstanding.
Each share of SalesforceSalesforce’s common stock entitles its holder to one vote on all matters to be voted upon by Salesforce’s stockholders. A majority of the votes cast is required for stockholders to elect directors (except that directors are elected by a plurality of the votes cast in a contested director election) and to take action on all other matters, except as otherwise required by law. Subject to any preferences that may apply to any preferred stock that may at the time be outstanding, holders of SalesforceSalesforce’s common stock will receive ratably any dividends that the SalesforceSalesforce’s board of directors declares out of funds legally available for that purpose. If Salesforce liquidates, dissolves or winds up, the holders of Salesforce common stock are entitled to share ratably in all assets remaining after payment of liabilities and any liquidation preference of any Salesforce preferred stock that may at the time be outstanding. SalesforceSalesforce’s common stock has no preemptive rights, conversion rights, or other subscription rights or redemption or sinking fund provisions.
Preferred Stock
The SalesforceSalesforce’s board of directors has the authority, without further action by Salesforce’s stockholders, to issue up to 5,000,000 shares of Salesforce preferred stock in one or more series. The SalesforceSalesforce’s board of directors may designate the rights, preferences, privileges and restrictions of the Salesforce preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and number of shares constituting any series or the designation of any series. The issuance of Salesforce preferred stock could have the effect of restricting dividends on SalesforceSalesforce’s common stock, diluting the voting power of SalesforceSalesforce’s common stock, impairing the liquidation rights of SalesforceSalesforce’s common stock, or delaying or preventing a change in control of Salesforce.control. The ability to issue preferred stock could delay or impede a change in control.
Anti-Takeover Effects of Various Provisions of Delaware Law, the Salesforce Charter and the Salesforce Bylaws
Some provisions of Delaware law, the Salesforce charterSalesforce’s amended and the Salesforcerestated certificate of incorporation and bylaws may have the effect of delaying, deferring or discouraging another party from acquiring control of Salesforce.us.
Delaware Law
Salesforce is subject to Section 203 of the DGCL, which regulates, subject to some exceptions, acquisitions of publicly held Delaware corporations. In general, Section 203 prohibits Salesforce from engaging in a “business combination” with an “interested stockholder” for a period of three years following the date the person becomes an interested stockholder, unless:
the SalesforceSalesforce’s board of directors approved the business combination or the transaction in which the person became an interested stockholder prior to the date the person attained this status;
upon consummation of the transaction that resulted in the person becoming an interested stockholder, the person owned at least 85 percent85% of Salesforce’s voting stock outstanding at the time the transaction commenced, excluding shares owned by persons who are directors and also officers and issued under employee stock plans under which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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on or subsequent to the date the person became an interested stockholder, the SalesforceSalesforce’s board of directors approved the business combination and the stockholders other than the interested stockholder authorized the transaction at an annual or special meeting of stockholders by the affirmative vote of at least 66-2/66 2/3% of the outstanding stock not owned by the interested stockholder.
Section 203 defines a “business combination” to include:
any merger or consolidation involving Salesforce and the interested stockholder;
any sale, transfer, pledge or other disposition involving the interested stockholder of 10 percent10% or more of Salesforce’s assets;
in general, any transaction that results in the issuance or transfer by Salesforce of any of the Salesforce capitalSalesforce’s stock to the interested stockholder;
any transaction involving Salesforce that has the effect of increasing the proportionate share of Salesforce capitalSalesforce’s stock owned by the interested stockholder;stockholders; and
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges, or other financial benefits provided by or through Salesforce.us.
In general, Section 203 defines an “interested stockholder” as any person who, together with the person’s affiliates and associates, owns, or within three years prior to the time of determination of interested stockholder status did own, 15 percent15% or more of a corporation’s voting stock.
Salesforce CharterAmended and Salesforce BylawsRestated Certificate of Incorporation and Bylaw Provisions
The Salesforce charterSalesforce’s amended and the Salesforcerestated certificate of incorporation and bylaws provide that:
no action can be taken by stockholders except at an annual or special meeting of the stockholders called in accordance with the SalesforceSalesforce’s bylaws, and stockholders may not act by written consent;
the approval of holders of a majority of the voting power of all of the then outstanding shares of capital stock of the Corporation generally entitled to vote at an election of directors is required to adopt, amend or repeal the Salesforce bylaws or amend or repeal certain provisions of the Salesforce charter;
the SalesforceSalesforce’s board of directors is expressly authorized to make, alter or repeal any provision of the SalesforceSalesforce’s bylaws;
special meetings of the stockholders may only be called by the stockholders upon the written request of one or more stockholders of record that own, or who are acting on behalf of persons who own, shares representing 15%15 percent or more of the voting power of the then outstanding shares of capital stock of the Corporation entitled to vote on the matter or matters to be brought before the proposed special meeting, and otherwise in accordance with the certificate of incorporation and bylaws;
stockholders may not fill vacancies on the Salesforce board of directors;
the SalesforceSalesforce’s board of directors is authorized to issue preferred stock without stockholder approval;
anystockholders must satisfy advance notice procedures to submit proposals or nominate directors orfor consideration at a stockholders’ meeting;
stockholders may not cumulate votes in the entire Salesforce board of directors, may only be removed by the affirmative vote of the holders of a majority of the shares entitled to vote at an election of directors; and
Salesforcewe will indemnify officers and directors against losses that they may incur as a result of investigations and legal proceedings resulting from their services to Salesforce,us, which may include services in connection with takeover defense measures.
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COMPARISON OF STOCKHOLDERS’ RIGHTS
This section describes the material differences between the rights of holders of shares of Slack common stock and the rights of holders of shares of Salesforce common stock. Slack and Salesforce are each incorporated under the laws of the State of Delaware, and, accordingly, the rights of Slack stockholders and Salesforce stockholders are both governed by the laws of the State of Delaware. The differences between the rights of Slack stockholders and Salesforce stockholders primarily result from differences between the organizational documents of Slack and Salesforce. As a result of the offer and the merger,mergers, holders of shares of TableauSlack common stock that receive the merger consideration in respect of their shares of Slack common stock will become holders of shares of Salesforce common stock. Both Tableau andAs a result, following the mergers, the rights of Slack stockholders who become Salesforce are Delaware corporations and arestockholders will continue to be governed by the DGCL, so manylaws of the State of Delaware and will also then be governed by the Salesforce amended and restated certificate of incorporation and bylaws.
This section does not include a complete description of all differences between the rights of Slack stockholders and Salesforce stockholders, andnor does it include a complete description of the currentspecific rights referred to below. Furthermore, the description of Tableau stockholders arise primarily fromsome of the differences in their respective certificates of incorporationthese rights in this section is not intended to indicate that other differences that may be equally important do not exist. All Slack stockholders and bylaws.
The following is a summarySalesforce stockholders are urged to read carefully the relevant provisions of the material differences between the current rights of Tableau stockholders and the current rights of Salesforce stockholders under Delaware law and their respective certificates of incorporation and bylaws. It is not a complete statement of the provisions affecting, and the differences between, the rights of Salesforce stockholders and Tableau stockholders.DGCL, as well as each company’s organizational documents. This summary is qualified in its entirety by reference to Delaware law and Salesforce’s and Tableau’s respective certificatesthe full text of each of the Salesforce certificate of incorporation, the Salesforce bylaws, the Salesforce corporate governance guidelines, the Slack certificate of incorporation, the Slack bylaws and bylaws. To see where copiesthe Slack corporate governance guidelines. For information on how to obtain a copy of these documents, can be obtained, see “Where to Obtainthe section entitled “Where You Can Find More Information.”
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Authorized Capital Stock | |||||
The authorized capital stock of Salesforce currently consists of (1) 1,600,000,000 shares of Salesforce common stock, and (2) 5,000,000 shares of Salesforce preferred stock. | The authorized capital stock of Slack consists of (i) 5,700,000,000 shares of common stock, par value $0.0001 per share, consisting of 5,000,000,000 shares of Class A common stock and 700,000,000 shares of Class B common stock and (ii) 100,000,000 shares of preferred stock, par value $0.0001 per share. As of , 2021 the record date for the Slack special meeting, there were outstanding (i) shares of Slack Class A common stock, (ii) shares of Slack Class B common stock and (iii) no shares of Slack preferred stock. | ||||
Voting Rights | |||||
The Salesforce amended and restated bylaws (which we refer to as the “Salesforce bylaws”) provide that each holder of Salesforce common stock is entitled to one vote for each such share. | Holders of Slack Class A common stock are entitled to one vote per share, and holders of Slack Class B common stock are entitled to 10 votes per share, on all matters submitted to a vote of stockholders. The holders of Slack Class A common stock and Class B common stock will generally vote together as a single class on all matters submitted to a vote of Slack stockholders, unless otherwise required by Delaware law or the Slack charter. |
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Salesforce Stockholders | Slack Stockholders | |||
Quorum | ||||
Under the Salesforce bylaws, holders of a majority of the voting power of the outstanding shares of stock entitled to vote at any meeting of stockholders, present in person or represented by proxy, will constitute a quorum, unless otherwise provided by law, the Salesforce charter, the Salesforce bylaws or the rules of the NYSE. | ||||
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The Slack bylaws provide that the chairman of any annual or special meeting will have the power to adjourn or recess the meeting from time to time, without notice other than announcement at the meeting. | ||||
Number of Directors and Size of Board | |||||
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The Salesforce charter and the Salesforce bylaws provide that the number of directors will be fixed from time to time exclusively by the Salesforce board. The Salesforce board | Neither the Slack charter nor bylaws provide for a maximum number of directors; however, the Slack charter provides that the number of directors may not be less than one. The exact number of directors is fixed by a majority of the Slack board from time to time. There are currently eight members of the Slack board. | ||||
Term of Directors | |||||
Salesforce’s directors are elected to one-year terms. The Salesforce charter does not provide for staggered terms. | The Slack charter provides that the board be divided into three classes: Class I, Class II and Class III. Each director will hold office until the third annual meeting following his or her election and until his or her successors have been duly elected and qualified, or otherwise until his or her earlier death, disability, resignation, disqualification or removal. | ||||
Removal of Directors | |||||
The Salesforce bylaws provide that the entire Salesforce board |
The Slack charter allows for removal of any director by the stockholders only for cause. | ||||||
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Directors | ||||||
The Salesforce bylaws provide that newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Salesforce board | The Slack charter and bylaws provide that any vacancy on the Slack board or newly created directorship will be filled by the vote of a majority of the remaining directors, even though less than a quorum. |
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Salesforce Stockholders | Slack Stockholders | ||
director. The directors so chosen shall hold office for a term expiring at the first annual meeting of stockholders held following their election and until their respective successors are duly elected and qualified or until their earlier death, resignation or removal. | |||
Special Stockholders’ Meetings | |||
The Salesforce bylaws provide that special meetings of stockholders may be called at any time by the Salesforce board, |
• the Chairman of the Slack board; or • the Slack board pursuant to a resolution adopted by a majority of the whole Slack board. | ||||
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Delivery and Notice Requirements of Stockholder Nominations and Proposals | ||||
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Under the Salesforce bylaws, for business to be properly brought before an annual meeting by a stockholder, business must be brought: (a) pursuant to Salesforce’s proxy materials with respect to such meeting, (b) by or at the direction of the Salesforce board | The Slack bylaws provide that a stockholder must give advance written notice to the Slack Corporate Secretary of a director nomination to be considered at an annual meeting, or at a special meeting at which the Slack board has determined that directors are to be elected. With respect to nominations to be considered at an annual meeting, the notice must be in writing, meet the requirements of the Slack bylaws, and be delivered not earlier than the close of business on the 120th day and not later than the close of business on the 90th day prior to the first anniversary date of the annual meeting for the preceding year, except that if the annual meeting is more than 30 days before or after such anniversary date, or if no annual meeting was held in the preceding year, notice by the stockholder must be delivered not later than the close of business on the later of: • the 90th day prior to the date of such annual meeting; or • the 10th day following the day on which public announcement of the date of such meeting is first made by Slack. |
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Salesforce Stockholders | Slack Stockholders | ||||
Salesforce board | In the event that the number of directors to be elected to the Slack board at an annual meeting is increased by the Slack board and there is no public announcement by Slack that names all of the nominees for director or specifies the size of the increased board at least 10 days prior to the last day a stockholder may otherwise deliver a notice, a stockholder’s notice will be considered timely with respect to nominees for any new positions created by such increase if it is delivered to the Slack Corporate Secretary by the close of business on the 10th day following the day on which such public announcement is first made by Slack. Director nominations to be considered at a special meeting must be in writing, meet the requirements of the Slack bylaws and be delivered not earlier than the close of business on the 120th day prior to the special meeting and not later than the close of business on the later of the 90th day prior to the date of such special meeting or the 10th day following the day on which the public announcement of the date of the special meeting is first made by Slack. | ||||
Stockholder Action by Written Consent | |||||
The | The | ||||
The Slack certificate of incorporation provides that stockholders may not act by written consent. | |||||
Amendment of Charter | |||||
The affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of the capital stock of Salesforce entitled to vote generally in the election of directors, voting together as a |
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single class, has the power to amend the charter. | Generally, the Slack charter may be amended upon a resolution of the Slack board and approved by: • the holders of at least 66 2/3% of the voting power of the outstanding shares entitled to vote; and • a majority of the outstanding shares of each class entitled to a class vote, if any | |||||
Amendment of Bylaws | ||||||
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The Salesforce board The Salesforce bylaws may also be amended by the affirmative vote of the holders of at least a majority of the total voting power of outstanding capital stock, voting together as a single class. | The Slack charter and bylaws provide that the Slack board is authorized to adopt, amend or repeal the Slack bylaws at any meeting at which a quorum is present by the affirmative vote of a majority of the whole Slack board. |
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Salesforce Stockholders | Slack Stockholders | ||||
The Slack charter and bylaws provide that they may be adopted, amended or repealed by the affirmative vote of the holders of 66 2/3% of the voting power of all of the then-outstanding shares entitled to vote generally in the election of directors, voting together as a single class. | |||||
Exculpation of Directors | |||||
The Salesforce charter provides that a director of Salesforce shall not be personally liable to Salesforce or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to Salesforce or its stockholders, (ii) for acts or omissions not in good faith or which involved intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is amended to authorize the further elimination or limitation of the liability of a director, then the liability of a director of Salesforce shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. | The DGCL provides that a corporation may limit or eliminate a director’s personal liability for monetary damages to the corporation or its stockholders for breach of fiduciary duty as a director, except for liability for: (i) any breach of the director’s duty of loyalty to such corporation or its stockholders, (ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) willful or negligent violation of provisions of Delaware law governing payment of dividends and stock purchases or redemptions or (iv) any transaction from which the director derived an improper personal benefit. The Slack charter provides that no Slack director will be personally liable to Slack or Slack stockholders for monetary damages for breach of any fiduciary duties as a director, to the fullest extent permitted by the DGCL. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, the liability of Slack directors will be eliminated or limited to the fullest extent permitted by the DGCL, as amended. | ||||
Indemnification of Directors, Officers and Employees | |||||
Under the Salesforce bylaws, subject to certain qualifications, Salesforce is required to indemnify, to the fullest extent authorized by the DGCL, each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she or a person of whom he or she is the legal representative, is or was a director or officer of Salesforce or is or was serving at the request of Salesforce as a director or officer of another corporation, |
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or as a controlling person of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director or officer, or in any other capacity while serving as a director or officer against all | The Slack bylaws provide that Slack will indemnify, to the fullest extent permitted by the DGCL, any person who was or is a party or is threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of Slack, or is or was a director or officer of Slack serving at the request of Slack as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection therewith if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the |
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Salesforce Stockholders | Slack Stockholders | ||||
expenses, liability and loss reasonably incurred or suffered by such person in connection with such proceeding. | best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The Slack bylaws provide that Slack will pay the expenses (including attorneys’ fees) incurred by a person potentially eligible for indemnification (as specified above) in defending any proceeding in advance of its final disposition upon receipt of a written request therefor and an undertaking by such person to repay all amounts advanced if it should be ultimately determined that such person is not entitled to be indemnified. | ||||
Exclusive Forum | |||||
None. | Under the Slack bylaws, unless Slack consents in writing to the selection of • any derivative action or proceeding brought on behalf of • any action asserting a claim of breach of • any action asserting a claim • any action asserting a claim Unless Slack consents in writing to the selection of an alternative forum, the United States District Court for the Northern District of California will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. The exclusive forum provision does not apply to actions arising under the Exchange Act. |
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If the first merger is consummated, holders of shares of Slack common stock are entitled to appraisal rights in connection with the first merger under Section 262 (which we refer to as “Section 262”) of the DGCL, provided they comply with the conditions established by Section 262.
The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, which is attached to this proxy statement/prospectus as Annex E and expressly incorporated herein by reference. Failure to precisely follow any of the statutory procedures set forth in Section 262 may result in the loss or waiver of your appraisal rights. The following summary does not constitute any legal or other advice nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262.
Under Section 262, record holders of Slack common stock who make the demand described below with respect to such shares, do not vote in favor of adoption of the merger agreement, continuously hold such shares through the first effective time, and otherwise comply with the statutory requirements of Section 262 will be entitled to an appraisal of their shares of Slack common stock and to receive payment for the fair value of their shares of Slack common stock as of the first effective time, exclusive of any element of value arising from the accomplishment or expectation of the first merger, as determined by the Delaware Court of Chancery, together with interest, if any and except as otherwise provided below, to be paid upon the amount determined to be fair value. The “fair value” of shares of Slack common stock as determined by the Delaware Court of Chancery may be more than, less than, or equal to the merger consideration per share that holders are otherwise entitled to receive under the terms of the merger agreement. Stockholders should be aware that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the first merger, is not an opinion as to, and does not otherwise address “fair value” under Section 262. All references in this summary of appraisal rights to a “stockholder” or “holders of Slack common stock” are to the record holder or holders of such shares as of immediately prior to the first effective time of the first merger and as to which appraisal rights are asserted. A person having a beneficial interest in shares of Slack common stock held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps summarized below and in a timely manner to perfect appraisal rights.
Under Section 262, when a merger agreement is to be submitted for adoption at a meeting of stockholders, not less than 20 days before the meeting to vote on the transaction a constituent corporation submitting the matter to a vote of stockholders must notify the stockholders who were stockholders on the record date for notice of such meeting with respect to shares for which appraisal rights are available pursuant to Section 262 that appraisal rights are available. A copy of Section 262 must be included with such notice. This proxy statement/prospectus constitutes Slack’s notice to Slack’s stockholders that appraisal rights are available in connection with the first merger, and the full text of Section 262 is attached to this proxy statement/prospectus as Annex E, in compliance with the requirements of Section 262. Holders of Slack common stock who wish to exercise such appraisal rights should carefully review the text of Section 262 contained in Annex E. Failure to comply timely and properly with the requirements of Section 262 will result in the loss of appraisal rights under the DGCL.
Holders of Slack common stock who wish to exercise their appraisal rights of their shares must deliver to Slack a written demand for appraisal of such shares before the vote is taken to approve the Slack merger proposal. The demand must reasonably inform Slack of the identity of the holder of record of shares of Slack common stock who intends to demand appraisal of his, her or its shares of Slack common stock and that the stockholder intends thereby to demand the appraisal of his, her or its shares. A Slack stockholder seeking appraisal of his, or her, or its shares may not vote such holder’s shares in favor of the Slack merger proposal. In addition, a holder of shares of Slack common stock wishing to exercise appraisal rights must hold of record the shares of Slack common stock on the date the written demand for appraisal is made and must continue to hold such shares of Slack common stock of record through the first effective time.
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A proxy that is submitted and does not contain voting instructions will, unless properly revoked, be voted in favor of the Slack merger proposal, and it will constitute a waiver of the Slack stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a Slack stockholder who submits a proxy and who wishes to exercise appraisal rights must either submit a proxy containing instructions to vote against the Slack merger proposal or abstain from voting on the Slack merger proposal. Voting against or failing to vote on the Slack merger proposal, or providing a proxy to vote against or abstain from voting on the Slack merger proposal, by itself does not constitute a demand for appraisal within the meaning of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the Slack merger proposal.
All demands for appraisal should be addressed to Slack’s General Counsel, 500 Howard Street, San Francisco, California 94105, and must be delivered before the vote is taken to approve the Slack merger proposal at the Slack special meeting. A stockholder’s failure to deliver the written demand to Slack prior to the taking of the vote on the Slack merger proposal at the Slack Special meeting will result in the loss of the stockholder’s appraisal rights.
Only a holder of record of shares of Slack common stock is entitled to demand an appraisal of the shares registered in that holder’s name. Accordingly, to be effective, a demand for appraisal by a stockholder of Slack common stock must be made by, or on behalf of, the record stockholder. A person having a beneficial interest in shares of Slack common stock that are held of record in the name of another person, such as a broker, fiduciary, bank or other nominee, must act promptly to cause the record holder to follow the steps summarized herein properly and in a timely manner to perfect appraisal rights. If shares of Slack common stock are owned of record by a person other than the beneficial owner, including a broker, fiduciary (such as a trustee, guardian or custodian), bank or other nominee, such demand must be executed by or for the record owner. If a stockholder holds shares of Slack common stock through a broker or bank who in turn holds the shares through a central securities depository nominee such as Cede & Co., a demand for appraisal of such shares must be made by or on behalf of the depository nominee and should identify the depository nominee as record holder. If a Slack stockholder holds shares of Slack common stock through a broker, bank or other nominee and wishes to exercise appraisal rights, such stockholder should consult with his, her or its broker, bank or other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.
If shares of Slack common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal must be made in that capacity. If the shares of Slack common stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal on behalf of a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a broker, bank or other nominee who holds shares of Slack common stock as a nominee for others, may exercise his, her or it’s right of appraisal with respect to the shares of Slack common stock held for one or more beneficial owners, while not exercising this right for other beneficial owners, or otherwise exercise his, her or it’s right of appraisal with respect to only certain shares held of record by the record owner. In that case, the written demand should state the number of shares of Slack common stock as to which appraisal is sought. Where no number of shares of Slack common stock is expressly mentioned, the demand will be presumed to cover all shares of Slack common stock held in the name of the record owner.
Within 10 days after the first effective time, the surviving corporation in the first merger must give notice that the first merger has become effective to each stockholder of Slack who has demanded appraisal in accordance with Section 262 and who did not vote in favor of the proposal to adopt the merger agreement and approve the transactions contemplated thereby.
Within 120 days after the first effective time, but not thereafter, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 may commence an appraisal proceeding by
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filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of Slack common stock held by all dissenting stockholders. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made upon the surviving corporation. The surviving corporation has no obligation to file such petition and has no present intention to file a petition and holders should not assume that the surviving corporation will file a petition. In the event that the surviving corporation does not file such petition, it is the obligation of the holders of Slack common stock to initiate all necessary action to perfect their appraisal rights with respect to shares of Slack common stock within the time prescribed in Section 262. If, within 120 days after the first effective time, no petition has been filed as provided above, all rights to appraisal will be lost and those shares will be deemed to have been converted at the first effective time into the consideration set forth in the merger agreement. In addition, within 120 days after the first effective time, any stockholder who has theretofore complied with the applicable provisions of Section 262 will be entitled to receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares of Slack common stock not voted in favor of the merger agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. A person who is the beneficial owner of shares of Slack common stock held either in a voting trust or by a nominee on behalf of such person and for which appraisal has been properly demanded may, in such person’s own name, file a petition for appraisal or request from the surviving corporation such statement. The statement must be given within 10 days after such written request has been received by the surviving corporation.
At any time within 60 days after the first effective time, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party will have the right to withdraw their demand for appraisal and to accept the terms offered in the first merger by delivering to the surviving corporation a written withdrawal of stockholder’s demand and an acceptance of the first merger; after this period, the stockholder may withdraw such demand for appraisal only with the consent of the surviving corporation. Notwithstanding the foregoing, no appraisal proceeding in the Delaware Court of Chancery shall be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just; provided, however, that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the first merger within 60 days.
If a petition for appraisal is duly filed by a stockholder or beneficial owner and a copy of the petition is delivered to the surviving corporation, then the surviving corporation will be obligated, within 20 days after receiving service of a copy of the petition, to file with the Delaware Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares of Slack common stock and with whom agreements as to the value of their shares of Slack common stock have not been reached. If the petition was filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. If a petition for an appraisal is timely filed, at the hearing on such petition, the Delaware Court of Chancery will determine which stockholders have complied with Section 262 of the DGCL and are entitled to appraisal rights. The Delaware Court of Chancery may require stockholders who have demanded an appraisal for their shares of Slack common stock, and who hold shares represented by certificates, to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder. In addition, because the shares of Slack common stock will be listed on a national securities exchange, immediately prior to the first merger, the Delaware Court of Chancery shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares of Slack common stock entitled to appraisal exceeds 1% of the outstanding shares of Slack common stock eligible for appraisal or (2) the value of the consideration provided in the first merger for such total number of shares exceeds $1 million. The Register in Chancery, if so ordered by the Delaware Court of Chancery, must give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving corporation in the first merger and to the stockholders shown on the list at the addresses therein stated. Such notice must also be given by one or more
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publications at least one week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Delaware Court of Chancery deems advisable. The forms of the notices by mail and by publication must be approved by the Delaware Court of Chancery, and the costs thereof shall be borne by the surviving corporation in the first merger.
After determination of the stockholders entitled to appraisal of their shares of Slack common stock, the appraisal proceeding shall be conducted in accordance with the rules of the Delaware Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Delaware Court of Chancery will appraise the shares of Slack common stock, determining their fair value as of the first effective time after taking into account all relevant factors exclusive of any element of value arising from the accomplishment or expectation of the first merger, together with interest, if any, to be paid upon the amount determined to be the fair value. When the fair value has been determined, the Delaware Court of Chancery will direct the payment of such value (together with any applicable interest) by the surviving corporation to the stockholders entitled thereto. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, and except as provided in the following sentence, interest from the first effective time through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the first effective time and the date of payment of the judgment. At any time before the entry of judgment in the appraisal proceeding, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided in the preceding sentence only upon the sum of (i) the difference, if any, between the amount so paid and the fair value of shares as determined by the Delaware Court of Chancery and (ii) interest theretofore accrued, unless paid at that time.
Neither Slack nor Salesforce anticipates offering more than the merger consideration provided for in the merger agreement to any Slack stockholder exercising appraisal rights and they reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262, the “fair value” of a share of Slack common stock is less than the per share merger consideration. In determining “fair value,” the Delaware Court of Chancery is required to take into account all relevant factors. In Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983), the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., 634 A.2d 345 (Del. 1993), the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”
Costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and imposed upon the surviving corporation and the Slack stockholders participating in the appraisal proceeding by the Delaware Court of Chancery, as it deems equitable in the circumstances. Upon the application of a dissenting stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts used in the appraisal proceeding, to be charged pro rata against the value of all shares of Slack common stock entitled to appraisal. In the absence of such an order, each party bears its own fees and expenses. Any Slack stockholder who demanded and perfected appraisal rights will not, after the first effective time, be entitled to vote shares of
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Slack common stock subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares of Slack common stock, other than with respect to payment as of a record date prior to the first effective time.
Failure to comply strictly with all of the procedures set forth in Section 262 will result in the loss of a stockholder’s statutory appraisal rights.
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SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT/DIRECTORS OF SLACK
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of December 16, 2020, for:
each of our named executive officers for fiscal year 2020;
each of our directors;
all of our directors and executive officers as a group; and
each person known by us to be the beneficial owner of more than five percent of the outstanding shares of our Class A or Class B common stock.
We have determined beneficial ownership in accordance with the rules of the SEC, and thus it represents sole or shared voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable.
We have based percentage ownership of our common stock on 494,291,274 shares of our Class A common stock and 83,441,133 shares of our Class B common stock outstanding as of December 16, 2020. We have deemed shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of December 16, 2020 to be outstanding and to be beneficially owned by the person holding the option for the purpose of computing the percentage ownership of that person. We have deemed shares of our common stock subject to RSUs for which the service condition has been satisfied or would be satisfied within 60 days of December 16, 2020 to be outstanding and to be beneficially owned by the person holding the RSUs for the purpose of computing the percentage ownership of that person. However, we did not deem these shares subject to stock options or RSUs outstanding for the purpose of computing the percentage ownership of any other person. This table also presents shares subject to the voting proxy held by our Chief Executive Officer, Stewart Butterfield, pursuant to certain voting agreements between Mr. Butterfield and certain other stockholders.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Slack Technologies, Inc., 500 Howard Street, San Francisco, California 94105.
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Shares Beneficially Owned | ||||||||||||||||||||||||
Class A | Class B | Total Voting%† | Total Ownership% | |||||||||||||||||||||
Shares | % | Shares | % | |||||||||||||||||||||
5% Stockholders: | ||||||||||||||||||||||||
Entities affiliated with Accel(1) | 1,284,682 | * | 8,146,695 | 9.8 | % | 6.2 | % | 1.6 | % | |||||||||||||||
Entities affiliated with Morgan Stanley(2) | 65,857,099 | 13.3 | % | — | — | 5.0 | % | 11.4 | % | |||||||||||||||
Entities affiliated with T. Rowe Price(3) | 61,997,396 | 12.5 | % | — | — | 4.7 | % | 10.7 | % | |||||||||||||||
Entities affiliated with The Vanguard Group(4) | 37,567,806 | 7.6 | % | — | — | 2.8 | % | 6.5 | % | |||||||||||||||
Entities affiliated with FMR(5) | 21,827,230 | 4.4 | % | — | — | 1.6 | % | 3.8 | % | |||||||||||||||
Named Executive Officers and Directors: | ||||||||||||||||||||||||
Stewart Butterfield(6) | 2,488,318 | * | 38,584,666 | 46.1 | % | 29.2 | % | 7.1 | % | |||||||||||||||
Shares subject to voting proxy(7) | 235,307 | * | 35,640,565 | 42.6 | % | 26.8 | % | 6.2 | % | |||||||||||||||
Total(6)(7) | 2,723,625 | * | 74,225,231 | 88.7 | % | 55.9 | % | 13.3 | % | |||||||||||||||
Allen Shim(8) | 2,131,753 | * | 255,012 | * | * | * | ||||||||||||||||||
Robert Frati(9) | 268,280 | * | 61,250 | * | * | * | ||||||||||||||||||
Andrew Braccia(10) | 1,770,344 | * | 8,146,695 | 9.8 | % | 6.3 | % | 1.7 | % | |||||||||||||||
Edith Cooper(11) | 187,981 | * | 17,090 | * | * | * | ||||||||||||||||||
Sarah Friar(12) | — | — | 406,017 | * | * | * | ||||||||||||||||||
Sheila B. Jordan(13) | 3,273 | * | — | — | * | * | ||||||||||||||||||
Michael M. McNamara(14) | 4,647 | * | — | — | * | * | ||||||||||||||||||
John O’Farrell(15) | 1,018,138 | * | — | — | * | * | ||||||||||||||||||
Graham Smith(16) | 44,000 | * | 150,000 | * | * | * | ||||||||||||||||||
All directors and executive officers as a group (13 persons)(17) | 8,522,646 | 1.7 | % | 83,384,791 | 99.1 | % | 63.0 | % | 15.9 | % |
* | Represents less than one percent (1%). |
† | Percentage of total voting power represents voting power with respect to all shares of our Class A common stock and Class B common stock, as a single class. The holders of our Class A common stock are entitled to one vote per share, and holders of our Class B common stock are entitled to ten votes per share. |
(1) | Consists of (i) 58,325 shares of Class A common stock held of record by Accel Growth Fund Investors 2016 L.L.C., (ii) 174,973 shares of Class B common stock held of record by Accel Growth Fund Investors 2016 L.L.C., (iii) 1,219,420 shares of Class A common stock held of record by Accel Growth Fund IV L.P., (iv) 3,658,260 shares of Class B common stock held of record by Accel Growth Fund IV L.P., (v) 6,937 shares of Class A common stock held of record by Accel Growth Fund IV Strategic Partners L.P., (vi) 20,812 shares of Class B common stock held of record by Accel Growth Fund IV Strategic Partners L.P., (vii) 154,555 shares of Class B common stock held of record by Accel Investors 2009 L.L.C., (viii) 3,849,170 shares of Class B common stock held of record by Accel X L.P., and (ix) 288,925 shares of Class B common stock held of record by Accel X Strategic Partners L.P. The managing member of Accel Growth Fund Investors 2016 L.L.C. are Andrew Braccia, Sameer Gandhi, Ping Li, Tracy Sedlock, Ryan Sweeney, and Richard Wong, all of whom share voting and dispositive power with regard to the shares held by Accel Growth Fund Investors 2016 L.L.C. Accel Growth Fund IV Associates L.L.C. is the general partner of each Accel Growth Fund IV L.P. and Accel Growth Fund IV Strategic Partners L.P. (the “Accel Growth Fund IV Entities”). The managing members of Accel Growth Fund IV Associates L.L.C. are Andrew Braccia, Sameer Gandhi, Ping Li, Tracy Sedlock, Ryan Sweeney, and Richard Wong. Accel Growth Fund IV Associates L.L.C. has sole voting and dispositive power with regard to the shares held by the Accel Growth Fund IV Entities, and its managing members share such powers. The managing member of Accel Investors 2009 L.L.C. are Andrew Braccia, Kevin Efrusy, Sameer Gandhi, Ping Li, Tracy Sedlock, and Richard Wong, all of whom share voting and dispositive power with regard to the shares held by Accel Investors 2009 L.L.C. Accel X Associates L.L.C. is the general partner of each of Accel X L.P. and Accel X Strategic Partners L.P. (together, the “Accel X Entities”). The managing members of Accel X Associates |
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(2) | Based on information reported by Morgan Stanley on Form 13F filed with the SEC on November 13, 2020. Morgan Stanley listed its address as 1585 Broadway, New York, NY 10036. |
(3) | Based on information reported by T. Rowe Price Associates, Inc. on Form 13F filed with the SEC on November 16, 2020. T. Rowe Price Associates, Inc. listed its address as 100 E. Pratt Street, Baltimore, MD 21202. |
(4) | Based on information reported by Vanguard Group, Inc. on Form 13F filed with the SEC on November 16, 2020. Vanguard Group, Inc. listed its address as PO Box 2600 V26, Valley Forge, PA 19482-2600. |
(5) | Based on information reported by FMR LLC on Form 13F filed with the SEC on November 13, 2020. FMR LLC listed its address as 245 Summer Street, Boston, MA 02210. |
(6) | Consists of (i) 982,623 shares of Class A common stock held of record by Mr. Butterfield, 122,817 shares of which are subject to repurchase by the Company, (ii) 38,355,865 shares of Class B common stock held of record by Mr. Butterfield, 987,928 shares of which are subject to repurchase by the Company, (iii) 697,471 shares of Class A common stock subject to outstanding options held by Mr. Butterfield that are exercisable within 60 days of December 16, 2020, all of which are subject to repurchase by the Company, (iv) 228,801 shares of Class B common stock subject to outstanding RSUs held by Mr. Butterfield that vest within 60 days of December 16, 2020, and (v) 808,224 shares of Class A common stock held by a charitable foundation and over which Mr. Butterfield retains voting and dispositive power. |
(7) | Consists of shares of Class A common stock and Class B common stock currently held, or that may be acquired within 60 days of December 16, 2020, by other stockholders over which, except under limited circumstances, Mr. Butterfield holds an irrevocable proxy, pursuant to voting agreements between Mr. Butterfield and each of such stockholders. We do not believe that the parties to these voting agreements constitute a “group” under Section 13 of the Exchange Act. |
(8) | Consists of (i) 496,141 shares of Class A common stock held of record by Mr. Shim, (ii) 26,366 shares of Class A common stock subject to outstanding options held by Mr. Shim that are exercisable within 60 days of December 16, 2020, (iii) 198,605 shares of Class B common stock subject to outstanding options held by Mr. Shim that are exercisable within 60 days of December 16, 2020, (iv) 3,833 shares of Class A common stock subject to outstanding RSUs held by Mr. Shim that vest within 60 days of December 16, 2020, (v) 56,407 shares of Class B common stock subject to outstanding RSUs held by Mr. Shim that vest within 60 days of December 16, 2020, (vi) 1,529,105 shares of Class A common stock held of record by the Shim-Park Family Revocable Trust, and (vii) 76,308 shares of Class A common stock held of record by the Allen Shim 2019 Grantor Retained Annuity Trust dated May 1, 2019. |
(9) | Consists of (i) 228,014 shares of Class A common stock held of record by Mr. Frati, (ii) 35,155 shares of Class A common stock subject to outstanding options held by Mr. Frati that are exercisable within 60 days of December 16, 2020, (iii) 38,000 shares of Class B common stock subject to outstanding options held by Mr. Frati that are exercisable within 60 days of December 16, 2020, (iv) 5,111 shares of Class A common stock subject to outstanding RSUs held by Mr. Frati that vest within 60 days of December 16, 2020, and (v) 23,250 shares of Class B common stock subject to outstanding RSUs held by Mr. Frati that vest within 60 days of December 16, 2020. |
(10) | Consists of (i) shares of Class A common stock and Class B common stock held by the entities affiliated with Accel identified in footnote one, (ii) 422,674 shares of Class A common stock held of record by the UA 10/26/2005 AKB Living Trust, (iii) 29,748 shares of Class A common stock held of record by the Braccia Family GST Exempt Trust, and (iv) 33,240 shares of Class A common stock held of record by various trusts for which Mr. Braccia is a trustee. |
(11) | Consists of (i) 187,981 shares of Class A common stock held of record by Ms. Cooper and (ii) 17,090 shares of Class B common stock subject to outstanding RSUs held by Ms. Cooper that vest within 60 days of December 16, 2020. |
(12) | Consists of (i) 246,340 shares of Class B common stock held of record by the David Riley and Sarah Friar Revocable Trust Dated August 11, 2006, 25,377 shares of which are subject to repurchase by the Company, and (ii) 159,677 shares of Class B common stock held of record by the Sarah Friar 2019 Grantor Retained Annuity Trust Dated February 1, 2019. |
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(13) | Consists of 3,273 shares of Class A common stock held of record by Ms. Jordan. |
(14) | Consists of 4,647 shares of Class A common stock held of record by Mr. McNamara. |
(15) | Consists of 1,018,138 shares of Class A common stock held of record by a family trust for which Mr. O’Farrell is a trustee. |
(16) | Consists of (i) 44,000 shares of Class A common stock held of record by Mr. Smith and (ii) 150,000 shares of Class B common stock held of record by Mr. Smith, 105,000 shares of which are subject to repurchase by the Company. |
(17) | Consists of (i) 7,688,272 shares of Class A common stock held of record by our current directors, executive officers, and trusts affiliated with our directors and executive officers, 122,817 shares of which are subject to repurchase by the Company, (ii) 82,661,892 shares of Class B common stock held of record by our current directors, executive officers, and trusts affiliated with our directors and executive officers, 1,118,305 shares of which are subject to repurchase by the Company, (iii) 816,997 shares of Class A common stock subject to outstanding options held by our directors and executive officers that are exercisable within 60 days of December 16, 2020, 697,471 shares of which are subject to repurchase by the Company, (iv) 290,605 shares of Class B common stock subject to outstanding options held by our directors and executive officers that are exercisable within 60 days of December 16, 2020, (v) 17,377 shares of Class A common stock subject to outstanding RSUs held by our directors and executive officers that vest within 60 days of December 16, 2020, and (vi) 432,294 shares of Class B common stock subject to outstanding RSUs held by our directors and executive officers that vest within 60 days of December 16, 2020; in each case including shares of Class A common stock and Class B common stock currently held, or that may be acquired within 60 days of December 16, 2020, by other stockholders over which, except under limited circumstances, Mr. Butterfield holds an irrevocable proxy, pursuant to voting agreements between Mr. Butterfield and each of such stockholders. |
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The validity of the shares of Salesforce sharescommon stock offered by this documenthereby will be passed upon for Salesforce by Wachtell, Lipton, Rosen & Katz, New York, New York.Katz.
Certain U.S. federal income tax consequences of the transaction will be passed upon for Slack by Latham & Watkins LLP.
Certain U.S. federal income tax consequences of the transaction will be passed upon for Salesforce by Wachtell, Lipton, Rosen & Katz.
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Salesforce
The consolidated financial statements of Salesforce.com, Inc.salesforce.com, inc. appearing in Salesforce.com, Inc.salesforce.com, inc.’s Annual Report (Form(Form 10-K) for the year ended January 31, 2019,2020, and the effectiveness of Salesforce.com, Inc.salesforce.com, inc.’s internal control over financial reporting as of January 31, 20192020, have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements and Salesforce.com, Inc.’s management’s assessment of the effectiveness of internal control over financial reporting as of January 31, 2019 are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.
The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control Over Financial Reporting) incorporated in this Prospectus by reference to Tableau Software, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.Slack
The consolidated financial statements of MuleSoftSlack Technologies, Inc. and subsidiaries as of DecemberJanuary 31, 20172020 and 2019, and for each of the years ending Decemberin the three-year period ended January 31, 2017 and 20162020, have been incorporated by reference herein from Salesforce’s Current Report on Form 8-K, filed on May 2, 2018,and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and in the registration statement, and upon the authority of said firm as experts in accounting and auditing.
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HOUSEHOLDING OF PROXY MATERIALS
Slack has adopted a procedure called “householding,” which the SEC has approved. Under this procedure, Slack may deliver a single copy of the Notice and, if applicable, proxy materials to multiple stockholders who share the same address, unless Slack has received contrary instructions from one or more of such stockholders. This procedure reduces Slack’s printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, Slack will deliver promptly a separate copy of the Notice and, if applicable, proxy materials to any stockholder at a shared address to which Slack delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that Slack only send a single copy of the Notice and, if applicable, proxy materials, such stockholder may contact us at:
Slack Technologies, Inc.
Attention: Investor Relations
500 Howard Street
San Francisco, California 94105
(415) 630-7943
In light of shelter-in-place restrictions currently in place due to COVID-19, stockholders are encouraged to contact Slack by telephone instead of physical mail to help ensure timely receipt of any request for proxy materials.
Street name stockholders may contact their broker, bank, or other nominee to request information about householding.
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Slack Stockholder Proposals
If the merger agreement is not adopted by the requisite vote of the Slack stockholders or if the mergers are not completed for any reason, Slack intends to hold an annual meeting of its stockholders in 2021 (which we refer to as the “Slack 2021 annual meeting”). If the Slack 2021 annual meeting occurs, pursuant to the Slack bylaws, Slack stockholders of record may present proposals that are proper subjects for consideration at an annual meeting and/or nominate persons to serve on the Slack board at such annual meeting.
Slack stockholders may present proper proposals for inclusion in Slack’s annual meeting proxy statement and for consideration at the Slack 2021 annual meeting of stockholders by submitting their proposals in writing to Slack’s Corporate Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for the 2021 annual meeting of stockholders, Slack’s Corporate Secretary must receive the written proposal at our principal executive offices not later than January 5, 2021. In addition, stockholder proposals must comply with the requirements of Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to: Slack Technologies, Inc., Attention: Corporate Secretary, 500 Howard Street, San Francisco, California 94105.
Slack’s bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Slack’s bylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that is (i) specified in Slack’s proxy materials with respect to such annual meeting, (ii) otherwise properly brought before such annual meeting by or at the direction of Slack’s board or (iii) properly brought before such meeting by a stockholder of record entitled to vote at such annual meeting who has delivered timely written notice to Slack’s Corporate Secretary, which notice must contain the information specified in our bylaws. To be timely for the 2021 annual meeting of stockholders, Slack’s Corporate Secretary must receive the written notice at Slack’s principal executive offices not earlier than January 5, 2021, and not later than the close of business on February 4, 2021.
Holders of Slack’s common stock may propose director candidates for consideration by Slack’s nominating and corporate governance committee. Any such recommendations must include the nominee’s name and qualifications for membership on Slack’s board and be directed to our Corporate Secretary at the address set forth above.
In addition, Slack’s bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, a stockholder must provide the information required by Slack’s bylaws. In addition, the stockholder must give timely notice to Slack’s Corporate Secretary in accordance with Slack’s bylaws, which, in general, require that the notice be received by Slack’s Corporate Secretary within the time periods described above for stockholder proposals that are not intended to be included in a proxy statement.
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WHERE TO OBTAINYOU CAN FIND MORE INFORMATION
Both Salesforce and TableauSlack file annual, quarterly and current reports, proxy statements and other business and financial information with the SEC. Tableau stockholders may read and copy any reports, statements or other information that Salesforce or Tableau file with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information regarding the public reference room. Salesforce’s and Tableau’s publicSlack’s SEC filings also are available to the public from commercial document retrieval services and may be obtained without charge at the SEC’sinternet website maintained by the SEC at www.sec.gov. You will also be able to obtain many of these documents, free of charge, from Salesforce by accessing Salesforce’s website at www.sec.gov.http://www.Salesforce.com under the “Investors” link and then the “Financials” link or from Slack at http://www.Slack.com under the “Investor Relations” link and then under the heading “Financials.”
Salesforce has filed a registration statement on Form S-4, with the SEC to register the offer and sale of Salesforce shares to be issued in the offer and the merger. This document is a part of that registration statement. Salesforce may also file amendments to such registration statement. In addition, on the date of the initial filing of the registration statement on Form S-4 of which this document isforms a part, Salesforce and the Offeror filed with the SEC a Tender Offer Statement on Schedule TO (which we refer to as the “Schedule TO”) under the Exchange Act, together with exhibits, to furnish certain information about the offer. Salesforce and the Offeror may file amendments to the Schedule TO.part. As allowedpermitted by SEC rules, this document does not contain all of the information included in the registration statement or the Schedule TO, orin the exhibits or schedules to the registration statementstatement. Statements contained in this document as to the contents of any contract or other documents referred to in this document are not necessarily complete. In each case, you should refer to the Schedule TO. You may obtain copiescopy of the Form S-4applicable contract or other document filed as an exhibit to or incorporated by reference into the registration statement. These documents contain important information about the companies and Schedule TO (and any amendments to those documents) by contacting the information agent as directed elsewhere in this document.their financial condition.
The SEC allows Salesforce and Slack to incorporate certain information into this document “byby reference” which means to other information that Salesforce and the Offeror may disclose important information to Tableau stockholders by referring to another document or informationhas been filed separately with the SEC. The information incorporated by reference is deemed to be part of this document, except for any information amended orthat is superseded by information contained in this document or by more recent information incorporated by reference into this document. The documents that are incorporated by reference contain important information about the companies, and you should read this document together with any other documents incorporated by reference in this document.
This document incorporates by reference the following documents and information set forth below that Salesforce and Tableau have previously been filed with the SEC. These documents contain important information about Salesforce and Tableau and their financial conditions, businesses, operations and results.
Salesforce Filings:SEC by Salesforce:
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Annual Report onForm 10-K |
• | Quarterly Reports on Form 10-Q for the quarterly periods ended April 30, 2020, July 31, 2020 and October 31, 2020 (filed with the SEC on June 1, 2020, August 28, 2020 and December 4, 2020, respectively); |
• | Definitive Proxy Statement on Schedule 14A for the Annual Meeting of Stockholders on June 11, 2020 (filed with the SEC on May 1, 2020); |
• | Current Reports on Form 8-K filed with the SEC on February 25, 2020 (with respect to Item 5.02), March |
Any description of shares of Salesforce common stock contained in a registration statement filed pursuant to the Exchange Act and any amendment or report filed for the purpose of updating such description;
| Amended and Restated Certificate of Incorporation of Salesforce, dated June 7, 2019 (filed with the SEC asExhibit 3.1 to Salesforce’s Current Report on Form 8-K filed with the SEC on June |
| Amended and Restated Bylaws of Salesforce, dated June 7, 2019 (filed with the SEC as Exhibit 3.2 to Salesforce’s Current Report on Form 8-K filed with the SEC on June 7, 2019). |
This document also incorporates by reference the following documents that have previously been filed with the SEC by Slack:
• | Annual Report on Form 10-K for the year ended January 31, 2020 (filed with the SEC on March 12, 2020); |
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• | Quarterly Reports on Form 10-Q for the quarterly periods ended April |
• | Definitive Proxy Statement on Schedule 14A for the Annual Meeting of Stockholders on June 19, 2020 (filed with the SEC on May 5, 2020); |
• | Current Reports on Form 8-K |
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Tableau Filings:
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| |
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Any description of shares of Slack common stock contained in a registration statement filed pursuant to the Exchange Act and any amendment or report filed for the purpose of updating such description;
| Amended and Restated Certificate of Incorporation of Slack, dated May 13, 2019 (filed with the SEC asExhibit 3.2 to Slack’s Registration Statement on Form S-1/A filed with the SEC on May |
• | |||
Amended and Restated Bylaws of | |||
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In addition, Salesforce also hereby incorporatesand Slack are incorporating by reference (i) any additional documents that either it or Tableauthey may file with the SEC pursuant tounder Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of the initial registration statement on Form S-4 filed by Salesforce on December 23, 2020, and prior to the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, and (ii) any documents they may file under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of this proxy statement/prospectus and prior to the date of the respective special meetings of the Salesforce stockholders and the Slack stockholders; provided, however, that Salesforce and Slack are not incorporating by reference any information furnished (but not filed), except as otherwise specified herein.
You may request copies of this proxy statement/prospectus and any of the documents incorporated by reference herein or certain other information concerning Salesforce or Slack, without charge, upon written or oral request to the applicable company’s principal executive offices. The respective addresses and phone numbers of such principal executive offices are listed below:
Salesforce | Slack | |
salesforce.com, inc. Salesforce Tower 415 Mission Street, 3rd Floor San Francisco, California 94105 Attention: Investor Relations (415) 536-6250 | Slack Technologies, Inc. 500 Howard Street San Francisco, California 94105 Attention: Investor Relations (415) 630-7943 |
To obtain timely delivery of these documents before the Slack special meeting, Slack stockholders must request the information no later than (which is five business days before the date of the Slack special meeting).
Neither Salesforce nor Slack has authorized anyone to give any information or make any representation about the mergers or its companies that is different from, or in addition to, that contained in this document or in any of the materials that have been incorporated into this document. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this document or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document to the termination of the offer. Such additional documents, however, are not automatically incorporated by reference into the Schedule TO. Salesforce will file amendments to the Schedule TO, to the extent required, specifically to include information that is filed from the date of this document and incorporated by reference herein. Nothing in this document shall be deemed to incorporate information furnished but not filed with the SEC (including information furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K and the exhibits related thereto filed under Item 9.01 of Form 8-K) or the contents of Salesforce’s and Tableau’s websites.
Tableau stockholders may obtain any of these documents without charge upon request tounless the information agent, Morrow Sodali LLC, toll free at (800) 662-5200 or via e-mail at DATA@morrowsodali.com, or from the SEC at the SEC’s website at www.sec.gov.specifically indicates that another date applies.
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TABLE OF CONTENTS
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ARTICLE I THE | A-2 | |||||
Section 1.1. | The | A-2 | ||||
Section 1.2. | ||||||
Section 1.3. | The Closing | A-2 | ||||
Section 1.4. | Effective Times | A-3 | ||||
Section 1.5. | Governing Documents | A-4 | ||||
Section 1.6. | Officers and Directors | A-4 | ||||
ARTICLE II | ||||||
Section 2.1. | ||||||
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| Treatment of Capital Stock | |||||
Section | Payment for Securities; Surrender of Certificates | |||||
Section | Treatment of Company Equity Awards | |||||
Section | Withholding | |||||
Section | Fractional Shares | |||||
Section | Tax Treatment | |||||
Section 2.7. | Alternative Transaction Structure | A-10 | ||||
Section 2.8. | Limitation on Cash Consideration Payable | A-11 | ||||
ARTICLE | ||||||
Section | Qualification, Organization, Subsidiaries, etc. | |||||
Section | Capitalization | A-12 | ||||
Section 3.3. | Corporate Authority | A-14 | ||||
Section | ||||||
| Governmental Consents; No Violation | |||||
Section | SEC Reports and Financial Statements | |||||
Section | Internal Controls and Procedures | |||||
Section | No Undisclosed Liabilities | |||||
Section | Absence of Certain Changes or Events | |||||
Section | Compliance with Law; Permits | |||||
Section | Employee Benefit Plans | |||||
Section | Labor Matters | |||||
Section | Tax Matters | |||||
Section | Litigation; Orders | |||||
Section | Intellectual Property | |||||
Section | Privacy and Data Protection | |||||
Section | Real Property; Assets | |||||
Section | Material Contracts | |||||
Section | Environmental Matters | |||||
Section | Customers; Suppliers; Resellers; Government Entities | |||||
Section | Insurance | |||||
Section | Information Supplied | |||||
Section | Opinion of Financial Advisor | |||||
Section | State Takeover Statutes; Anti-Takeover Laws | |||||
Section | Related Party Transactions | A-32 | ||||
Section | Finders and Brokers | |||||
Section | No Other Representations | |||||
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT, MERGER SUB I AND MERGER SUB II | A-32 | |||||
Section | Qualification, Organization, etc. | A-33 | ||||
Section 4.2. | Capitalization | A-33 | ||||
Section 4.3. | Corporate Authority | |||||
Section | Governmental Consents; No Violation | |||||
Section | SEC Reports and Financial Statements | |||||
Section | Internal Controls and Procedures | |||||
Section | No Undisclosed Liabilities | |||||
Section | Absence of Certain Changes or Events | A-37 | ||||
Section | Compliance with Law | A-37 | ||||
Section | Litigation; Orders | |||||
Section | Information Supplied | |||||
Section | Sufficient Funds; Valid Issuance | |||||
Section | Finders and Brokers | A-38 | ||||
Section | Stock Ownership | A-38 | ||||
Section | No | A-38 | ||||
Section | Tax Matters | A-38 | ||||
Section | No Other Representations | |||||
ARTICLE | ||||||
Section | Conduct of Business by the Company Pending the Closing | |||||
Section | Conduct of Business by Parent Pending the Closing | |||||
Section | No Solicitation by the Company | |||||
Section 5.4. | ||||||
| A-47 | |||||
ARTICLE VI ADDITIONAL AGREEMENTS | A-49 | |||||
Section | Access; Confidentiality; Notice of Certain Events | |||||
Section | Reasonable Best Efforts | |||||
Section | Publicity | |||||
Section | D&O Insurance and Indemnification | |||||
Section | Takeover Statutes | |||||
Section | Obligations of | |||||
Section | Employee Matters | |||||
Section | Rule 16b-3 | |||||
Section | Stockholder Litigation | |||||
Section | Delisting | |||||
Section | Director Resignations | |||||
Section | Stock Exchange Listing | |||||
Section | ||||||
| Certain Tax Matters | |||||
Section | ||||||
Section 6.15. | Treatment of Company Indebtedness | A-57 | ||||
Section 6.16. | Certain Actions | A-60 | ||||
ARTICLE | ||||||
Section | Conditions to Each Party’s Obligations to Effect the Merger | |||||
Section 7.2. | ||||||
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ARTICLE VIII TERMINATION | A-62 | |||||||
Section | Termination | A-62 | ||||||
Section 8.2. | Effect of Termination | A-64 | ||||||
ARTICLE IX MISCELLANEOUS | A-65 | |||||||
Section 9.1. | Amendment and Modification; Waiver | A-65 | ||||||
Section 9.2. | Non-Survival of Representations and Warranties | A-66 | ||||||
Section 9.3. | Expenses | A-66 | ||||||
Section 9.4. | Notices | A-66 | ||||||
Section 9.5. | Interpretation | A-67 | ||||||
Section 9.6. | Counterparts | |||||||
Section | Entire Agreement; Third-Party Beneficiaries | |||||||
Section | Severability | |||||||
Section | Governing Law; Jurisdiction | |||||||
Section | Waiver of Jury Trial | |||||||
Section | Assignment | |||||||
Section | Enforcement; Remedies | |||||||
| Financing Entities | A-69 |
Annex | Certain Definitions | |||||
Annex | Form of Voting Agreement | |||||
Annex C | Form of Certificate of Incorporation | |||||
Annex D | Form of Bylaws | |||||
Annex E | Form of Limited Liability Company Agreement |
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of June 9, 2019,December 1, 2020, is by and among salesforce.com, inc., a Delaware corporation (“Parent”), Sausalito Acquisition Corp.Skyline Strategies I Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (“PurchaserMerger Sub I”), Skyline Strategies II LLC, a Delaware limited liability company and a wholly owned Subsidiary of Parent (“Merger Sub II”), and Tableau Software,Slack Technologies, Inc., a Delaware corporation (the “Company”). All capitalized terms used in this Agreement shall have the meanings ascribed to such terms inAnnex A or as otherwise defined elsewhere in this Agreement.Agreement, unless the context clearly provides otherwise. Parent, PurchaserMerger Sub I, Merger Sub II and the Company are each sometimes referred to herein as a “Party” and collectively, as the “Parties.”
RECITALS
WHEREAS, it is proposed that PurchaserMerger Sub I shall commence an exchange offermerge with and into the Company, with the Company surviving the merger as a wholly owned Subsidiary of Parent (the “OfferFirst Merger”) to acquire any (subject, upon the terms and subject to the Minimum Condition)conditions set forth in this Agreement and allin accordance with the applicable provisions of the issued and outstanding sharesGeneral Corporation Law of the State of Delaware (the “DGCL”), pursuant to which each share of Class A common stock, $0.0001 par value $0.0001 per share, of the Company (“Class A Common Stock”) and each share of Class B common stock, $0.0001 par value $0.0001 per share, of the Company (“Class B Common Stock,” and, together with Class A Common Stock, the “Company Common Stock”) for, in each case, issued and outstanding immediately prior to the considerationFirst Effective Time, other than Dissenting Shares, shares covered by Company Restricted Share Awards and Cancelled Shares, will be converted into the right to receive a combination of cash and shares of common stock, par value $0.001 per share, of Parent (“Parent Common Stock”);
WHEREAS, immediately following the First Merger, a second merger shall occur (a) if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, by the Surviving Corporation merging with and into Merger Sub II, with Merger Sub II surviving the merger as a wholly owned Subsidiary of Parent in accordance with the applicable provisions of the DGCL and the Delaware Limited Liability Company Act (the “DLLCA”) or (b) if the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, by the Surviving Corporation merging with and into Parent, with Parent surviving the merger in accordance with the applicable provisions of the DGCL (such second step merger, the “Second Merger,” and, together with the First Merger, the “Mergers”), in each case, upon the terms and subject to the conditions set forth herein;
WHEREAS, it is also proposed that, as soon as practicable following the consummation of the Offer, the Parties wish to effect the acquisition of the Company by Parent through the merger of Purchaser with and into the Company, with the Company being the surviving entity (the “Merger”);
WHEREAS, the Merger will be governed by Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”) and will be effected as soon as practicable following the consummation of the Offer upon the terms and subject to the conditions set forth herein;
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition to the willingness of Parent and Purchaser to enter into this Agreement, certain Persons are entering into a letter agreement with Parent and Purchaser, in the form attached asAnnex B hereto (the “Letter Agreement”);
WHEREAS, in connection with the Merger, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any Cancelled Shares, Converted Shares or shares of Company Common Stock validly tendered and not validly withdrawn in accordance with the terms of the Offer) shall be automatically converted into the right to receive the Merger Consideration upon the terms and conditions set forth in this Agreement and in accordance with the DGCL;
WHEREAS, the Parties intend that, for U.S. federal income tax purposes, the Offer and the Merger, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement be, and is hereby adopted as, a “plan of reorganization” within the meaning of Treasury RegulationsSection 1.368-2(g) and for purposes of Sections 354 and 361 of the Code;Agreement;
WHEREAS, the board of directors of the Company (the “Company Board of Directors”) unanimously (i) determined that the terms of this Agreement and the transactions contemplated hereby (the “Transactions”), including the Offer and the Merger and the issuance of shares of Parent Common Stock in connection therewith,Mergers, are fair to, and in the best interests of, the Company and its stockholders (the “Company Stockholders”), (ii) determined that it is in the best interests of the Company and the Company Stockholders and declared it advisable to enter into this Agreement, (iii) approved the execution and delivery by the Company of this Agreement, the performance by the Company of its covenants and agreements contained herein and the consummation of the Offer, the MergerMergers and the other Transactions upon the terms and subject to the conditions contained herein and (iv) resolved to recommend that the Company Stockholders acceptapprove the OfferTransactions, including the First Merger, and tender their shares of Company Common Stock to Purchaser pursuant to the Offeradopt this Agreement (the “Company Board Recommendation”);
WHEREAS, the board of directors of each of Parent, Merger Sub I and Purchaser,Merger Sub II, and the sole stockholder of Purchaser,Merger Sub I and the sole member of Merger Sub II, have approved this Agreement and determined that this Agreement and the Transactions, including the Offer and the MergerMergers and the issuance of Parent Common Stock in the Offer and the Merger,connection therewith, are advisable and fair to, and in the best interests of, Parent, Merger Sub I and PurchaserMerger Sub II and their respective stockholder(s) and/or member(s);
WHEREAS, as a condition to Parent, Merger Sub I and Merger Sub II entering into this Agreement, and incurring the obligations set forth herein, and as an inducement and in consideration for Parent, Merger Sub I and
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Merger Sub II to enter into the Merger Agreement, concurrently with the execution and delivery of this Agreement, Parent, Merger Sub I and Merger Sub II are entering into a voting agreement, in the form attached as Annex B hereto, with certain Company Stockholders pursuant to which, among other things, such Company Stockholders have agreed, subject to the terms thereof, to vote all of such Company Stockholders’ shares of Company Common Stock in accordance with the terms of such voting agreement (the “Voting Agreement”);
WHEREAS, for U.S. federal income Tax purposes, Parent, Merger Sub I, Merger Sub II and the Company intend that the Mergers, taken together, will be treated as a single integrated transaction that will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and the Treasury Regulations promulgated thereunder, and this Agreement is intended to be and is adopted as a “plan of reorganization” within the meaning of Treasury Regulations Section 1.368-2(g) and for purposes of Sections 354 and 361 of the Code; and
WHEREAS, Parent, Merger Sub I, Merger Sub II and the PartiesCompany desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the MergerTransactions and also to prescribe various terms of and conditions to the Offer and the Merger.Transactions.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:
THE OFFERMERGERS
(a) Terms and Conditions of the Offer. Subject to the terms and conditions of this Agreement and provided that this Agreement shall not have been validly terminated pursuant toArticle IX and that the Company shall have complied in all material respects with its obligations underSection 1.2, as promptly as practicable after the date hereof (but in no event more than twenty (20) Business Days thereafter), Purchaser shall (and Parent shall cause Purchaser to) commence (within the meaning of Rule 14d-2 promulgated under the Exchange Act) the Offer. In the Offer, each share of Company Common Stock accepted by Purchaser in accordance with the terms and subject to the conditions of the Offer shall be exchanged for 1.103 shares of common stock, par value $0.001 per share, of Parent “Parent Common Stock”), without interest (the “Offer Consideration”), subject to the other provisions of thisArticle I. The Offer shall be made by means of an offer to purchase (the “Offer to Purchase”) that is disseminated to holders of Company Common Stock pursuant to the Exchange Act and contains, to the extent required by the Exchange Act, the terms and conditions set forth in this Agreement (includingAnnex C). Each of Parent and Purchaser shall use its reasonable best efforts to consummate the Offer, subject to the terms and conditions hereof (includingAnnex C). The obligation of Purchaser to accept for exchange (and the obligation of Parent to cause Purchaser to accept for exchange) shares of Company Common Stock validly tendered (and not validly withdrawn) pursuant to the Offer shall be subject only to:
(i) the condition that, prior to the expiration of the Offer, there have been validly tendered and not validly withdrawn in accordance with the terms of the Offer a number of shares of Company Common Stock that, upon the consummation of the Offer (for the avoidance of doubt, assuming that shares of Class B Common Stock validly tendered (and not validly withdrawn) will convert into shares of Class A Common Stock upon the consummation of the Offer), together with the shares of Company Common Stock then owned by Parent and Purchaser (if any) (excluding shares of Company Common Stock tendered pursuant to guaranteed delivery procedures that have not yet been “received,” as such term is defined in Section 251(h) of the DGCL, by the depositary for the Offer pursuant to such procedures), would represent at least a majority of the aggregate voting power of the shares of Company Common Stock outstanding immediately after the consummation of the Offer (the “Minimum Condition”); and
(ii) the other conditions set forth inAnnex C.
(b) Purchaser expressly reserves the right to waive or modify any of the conditions to the Offer and to make any change in the terms of, or conditions to, the Offer;provided,however, that notwithstanding anything to the contrary set forth herein, without the prior written consent of the Company in its sole discretion, Purchaser may not (and Parent shall not permit Purchaser to) (i) waive the Minimum Condition, or any of the conditions set forth inclauses (B),(C),(D),(E) or(F)(5) ofAnnex C or (ii) make any change in the terms of or conditions to the Offer that (A) changes the form of consideration to be paid in the Offer, (B) reduces the Offer Consideration to be paid in the Offer or decreases the number of shares of Company Common Stock sought in the Offer (other
than in each case an adjustment made pursuant toSection 1.1(d)), (C) extends the Offer, other than in a manner required or permitted bySection 1.1(e), (D) imposes conditions to the Offer, other than those set forth inAnnex C or (E) amends or modifies any term of or condition to the Offer (including the conditions inAnnexC) in any manner that has an adverse effect, or would be reasonably likely to have an adverse effect, on the holders of Company Common Stock that is notde minimis.
(c) Fractional Shares. No certificate or scrip representing fractional shares of Parent Common Stock shall be issued pursuant to the Offer, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a stockholder of Parent. Notwithstanding any other provision of this Agreement, each holder of Company Common Stock who otherwise would be entitled to receive a fraction of a share of Parent Common Stock pursuant to the Offer (after aggregating all shares of Company Common Stock validly tendered in the Offer (and not validly withdrawn) by such holder) shall receive, in lieu thereof, cash, without interest, in an amount equal to such fractional part of a share of Parent Common Stockmultiplied by the Parent Trading Price, rounded to the nearest whole cent.
(d) Adjustments to Offer Consideration. The Offer Consideration shall be adjusted appropriately, without duplication, to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock or Parent Common Stock, as applicable), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the number of shares of Company Common Stock or shares of Parent Common Stock outstanding after the date hereof and prior to the Acceptance Time. Nothing in thisSection 1.1(d) shall be construed to permit the Company or Parent to take any action with respect to its securities that is prohibited by the terms of this Agreement.
(e) Expiration and Extension of the Offer.
(i) Unless the Offer is extended pursuant to and in accordance with thisSection 1.1(e), the Offer shall expire at midnight, Eastern Time, on the date that is twenty (20) Business Days (for this purpose calculated in accordance with Section 14d-1(g)(3) andRule 14e-1(a) promulgated under the Exchange Act) after the date the Offer is first commenced (within the meaning of Rule14d-2 promulgated under the Exchange Act). In the event that the Offer is extended pursuant to and in accordance with this Agreement, then the Offer shall expire on the date and at the time to which the Offer has been so extended (the initial expiration date, or such subsequent time and date to which the expiration of the Offer is extended pursuant to and in accordance with this Agreement, the “Expiration Date”).
(ii) Notwithstanding the provisions ofSection 1.1(e)(i) or anything to the contrary set forth in this Agreement (unless Parent receives the prior written consent of the Company (which may be granted or withheld in the Company’s sole discretion)):
(A) Purchaser shall (and Parent shall cause Purchaser to) extend the Offer for any period required by any Law, or any rule, regulation, interpretation or position of the SEC or its staff or of the NYSE, in any such case, which is applicable to the Offer, or to the extent necessary to resolve any comments of the SEC or its staff applicable to the Offer or the Offer Documents or the FormS-4;
(B) in the event that any of the conditions to the Offer (other than the Minimum Condition, the condition set forth in clause (F)(3) of Annex C, and other than any such conditions that by their nature are to be satisfied at the expiration of the Offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the Offer to occur at such time)) have not been satisfied or waived as of any then-scheduled expiration of the Offer, Purchaser shall (and Parent shall cause Purchaser to) extend the Offer for successive extension periods of up to ten (10) Business Days each (or for such longer period as may be agreed by Parent and the Company); and
(C) if as of any then-scheduled expiration of the Offer each condition to the Offer (other than the Minimum Condition, and other than any such conditions that by their nature are to be satisfied at the
expiration of the Offer (provided such conditions would be capable of being satisfied or validly waived were the expiration of the Offer to occur at such time)) has been satisfied or waived and the Minimum Condition has not been satisfied, Purchaser may, and, at the request in writing of the Company, Purchaser shall, and Parent shall cause Purchaser to, extend the Offer for successive extension periods of up to ten (10) Business Days each (with the length of each such period being determined in good faith by Parent) (or for such longer period as may be agreed by Parent and the Company in writing);provided, that in no event shall Purchaser or Parent be required to (and Parent shall not be required to cause Purchaser to) extend the expiration of the Offer pursuant to thisclause (C) (i) if (x) the Minimum Condition is not satisfied by a number of shares of Company Common Stock that is equal to or less than the aggregate number of shares of Company Common Stock held or beneficially owned by any Stockholders (as defined in the Letter Agreement) that have not been tendered, or have been tendered but validly withdrawn, in the Offer as of such time and (y) as of such time the Stockholders whose untendered shares of Company Common Stock are necessary to satisfy the Minimum Condition are not using good faith and diligent efforts to tender the necessary shares of Company Common Stock into the Offer, or (ii) for more than twenty (20) Business Days in the aggregate;
provided,that, notwithstanding anything to the contrary in this Agreement, (1) any such extension shall not be deemed to impair, limit, or otherwise restrict in any manner the right of Parent or the Company to terminate this Agreement pursuant to the terms ofSection 9.1 and (2) Purchaser shall not be required (and Parent shall not be required to cause Purchaser) to extend the Offer beyond the Outside Date.
(iii) Neither Parent nor Purchaser shall extend the Offer or provide a “subsequent offering period” within the meaning of Rule14d-11 promulgated under the Exchange Act in any manner other than in accordance with the provisions of this Agreement without the prior written consent of the Company.
(iv) Neither Parent nor Purchaser shall terminate or withdraw the Offer prior to the then-scheduled expiration of the Offer unless this Agreement is validly terminated in accordance withArticle IX, in which case Purchaser shall (and Parent shall cause Purchaser to) irrevocably and unconditionally terminate the Offer promptly (but in no event more than one (1) Business Day) after such termination of this Agreement.
(v) Parent shall keep the Company reasonably informed on a reasonably current basis of the status of the Offer, including with respect to the number of shares of Company Common Stock that have been validly tendered and not validly withdrawn in accordance with the terms of the Offer, and with respect to any material developments with respect thereto and, upon the Company’s written request (no more often than once per day during the Offer (other than on the date of the then-scheduled expiration of the Offer)), provide the Company as soon as practicable with the most recent report then available from the Exchange Agent detailing the number of shares of Company Common Stock that have been validly tendered and not validly withdrawn in accordance with the terms of the Offer;provided that Parent’s obligations, actions or inactions pursuant to thisSection 1.1(e)(v) shall be deemed excluded for purposes of determining whether Parent or the Company may terminate this Agreement pursuant toSection 9.1.
(f) Payment for Company Common Stock. On the terms of and subject to the conditions set forth in this Agreement and the Offer, Purchaser shall (and Parent shall cause Purchaser to) accept for payment, and pay for, all shares of Company Common Stock that are validly tendered and not validly withdrawn pursuant to the Offer promptly (within the meaning of Section 14e-1(c) promulgated under the Exchange Act) after the expiration of the Offer (as it may be extended in accordance withSection 1.1(e)(ii)) (or, at Parent’s election, concurrently with the expiration of the Offer if all conditions to the Offer have been satisfied or waived) (such time of acceptance, the “Acceptance Time”). Without limiting the generality of the foregoing, Parent shall provide or cause to be provided to Purchaser on a timely basis the funds and shares of Parent Common Stock necessary to pay for any shares of Company Common Stock that Purchaser becomes obligated to purchase pursuant to the Offer. The consideration in the Offer payable in respect of each share of Company Common Stock validly tendered and not validly withdrawn pursuant to the Offer shall be paid net to the holder thereof in shares of Parent Common Stock (and cash in lieu of fractional shares of Parent Common Stock, if any), without interest and subject to reduction for any applicable withholding Taxes payable in respect thereof.
(g) Schedule TO; Offer Documents; FormS-4.
(i) As soon as practicable on the date the Offer is first commenced (within the meaning ofRule 14d-2 promulgated under the Exchange Act), Parent and Purchaser shall:
(A) prepare and file with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, and including all exhibits thereto, the “Schedule TO”) with respect to the Offer, which Schedule TO shall contain as an exhibit the Offer to Purchase and forms of the letter of transmittal and summary advertisement, if any, and other customary ancillary documents, in each case, in respect of the Offer (together with all amendments and supplements thereto, the “Offer Documents”);
(B) deliver a copy of the Schedule TO, including all exhibits thereto, to the Company at its principal executive offices in accordance withRule 14d-3(a) promulgated under the Exchange Act;
(C) give telephonic notice of the information required byRule 14d-3 promulgated under the Exchange Act, and mail by means of first class mail a copy of the Schedule TO, to the NYSE in accordance withRule 14d-3(a) promulgated under the Exchange Act; and
(D) subject to the Company’s compliance withSection 1.2 in all material respects, cause the Offer Documents to be disseminated to holders of Company Common Stock as and to the extent required by the Exchange Act.
(ii) Concurrently with the filing of the Offer Documents, Parent shall file with the SEC a registration statement on FormS-4 to register under the Securities Act the offer and sale of Parent Common Stock pursuant to the Offer and the Merger (together with all amendments and supplements thereto, and including all exhibits thereto, the “FormS-4”). The FormS-4 will include a preliminary prospectus containing the information required underRule 14d-4(b) promulgated under the Exchange Act.
(iii) The Offer Documents and the FormS-4 may include a description of the determinations, approvals and recommendations of the Company Board of Directors to the extent permitted bySection 1.2(a). Each of Parent and Purchaser shall use its reasonable best efforts to (A) have the FormS-4 declared effective under the Securities Act as promptly as practicable after such filing, (B) ensure that each of the Schedule TO, the Offer Documents and the FormS-4 complies in all material respects with the requirements of the applicable provisions of the Exchange Act and Securities Act and (C) keep the FormS-4, if the FormS-4 is declared effective by the SEC, effective for so long as necessary to complete the Merger. Each of the Company, Parent and Purchaser shall use its reasonable best efforts to procure its outside tax counsel or tax advisor to provide a customary tax opinion with respect to the FormS-4 to the extent required by the Securities Act. The Company shall furnish in writing to Parent and Purchaser all information concerning the Company and the Company Subsidiaries that is required by applicable Law to be included in the Offer Documents and the FormS-4 so as to enable Parent and Purchaser to comply with their obligations under thisSection 1.1(g). Parent, Purchaser and the Company shall cooperate in good faith to determine the information regarding the Company that is necessary to include in the Offer Documents and the FormS-4 in order to satisfy applicable Law. Each of Parent, Purchaser and the Company shall promptly correct any information provided by it or any of its Representatives for use in the Offer Documents or the FormS-4 if and to the extent that such information shall have become false or misleading in any material respect. Parent and Purchaser shall take all steps necessary to cause the Offer Documents and the FormS-4, as so corrected, to be filed with the SEC and to be disseminated to the holders of Company Common Stock, in each case as and to the extent required by applicable Law, or by the SEC or its staff or the NYSE. Parent and Purchaser shall provide in writing to the Company and its counsel any and all written comments or other material communications that Parent, Purchaser or their counsel receive from the SEC or its staff with respect to the Offer Documents and the FormS-4 promptly after such receipt, and Parent and Purchaser shall provide the Company and its counsel a reasonable opportunity to participate in the formulation of any response to any such comments of the SEC or its staff. Parent and Purchaser shall provide the Company and its
counsel a reasonable opportunity to review and comment on the Offer Documents, the FormS-4 and any written communications to the SEC or its staff with respect to the Offer Documents or the FormS-4, in each case, prior to the filing thereof with the SEC, and Parent and Purchaser shall give reasonable and good faith consideration to any reasonable comments made by the Company and its counsel (it being understood that the Company and its counsel shall provide any comments thereon as soon as reasonably practicable) and shall permit the Company and its counsel to participate in any discussions with the SEC or its staff regarding any comments thereon. Parent shall also take any other action required to be taken under the Securities Act, the Exchange Act, any applicable foreign or state securities or “blue sky” Laws and the rules and regulations thereunder in connection with the issuance of the Parent Common Stock in the Offer or the Merger, and the Company shall furnish all information concerning the Company and the holders of the Company Common Stock as may be reasonably requested in connection with any such actions.
(a) Company Determinations, Approvals and Recommendations. The Company hereby approves and consents to the Offer and represents and warrants to Parent and Purchaser that, at a meeting duly called and held prior to the date hereof, the Company Board of Directors has unanimously upon the terms and subject to the conditions set forth herein:
(i) determined that the terms of the Transactions, including the Offer and the Merger, are fair to, and in the best interests of, the Company and the Company Stockholders;
(ii) determined that it is in the best interests of the Company and the Company Stockholders to enter into, and declared advisable, this Agreement;
(iii) approved the execution and delivery by the Company of this Agreement, the performance by the Company of its covenants and agreements contained herein and the consummation of the Offer, the Merger and the other Transactions, upon the terms, and subject to the conditions, contained herein; and
(iv) resolved to make the Company Board Recommendation.
The Company hereby approves and consents to the inclusion of the foregoing determinations and approvals and the Company Board Recommendation in the Offer Documents and the FormS-4 unless the Company Board of Directors has effected a Change of Recommendation in accordance with the terms ofSection 6.3.
(b) Schedule 14D-9. The Company shall (i) file with the SEC concurrently with the filing by Parent and Purchaser of the Schedule TO, a Solicitation/Recommendation Statement onSchedule 14D-9 pertaining to the Offer (together with all amendments and supplements thereto, and including all exhibits thereto, the “Schedule 14D-9”) and (ii) cause theSchedule 14D-9 to be mailed to the holders of Company Common Stock promptly after commencement of the Offer. The Company shall use its reasonable best efforts to ensure that theSchedule 14D-9 complies in all material respects with the requirements of the applicable provisions of the Exchange Act. To the extent requested by the Company, Parent shall cause theSchedule 14D-9 to be mailed or otherwise disseminated to the holders of Company Common Stock (to the extent required by applicable Law) together with the Offer Documents. Each of Parent and Purchaser shall furnish in writing to the Company all information concerning Parent and Purchaser that is required by applicable Law to be included in theSchedule 14D-9 so as to enable the Company to comply with its obligations under thisSection 1.2(b). Parent, Purchaser and the Company shall cooperate in good faith to determine the information regarding Parent and Purchaser that is necessary to include in theSchedule 14D-9 in order to satisfy applicable Law. Each of the Company, Parent and Purchaser shall promptly correct any information provided by it or its Representatives for use in theSchedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect. The Company shall take all steps necessary to cause theSchedule 14D-9, as so corrected, to be filed with the SEC and disseminated to the holders of Company Common Stock, in each case as and to the extent
required by applicable Law. The Company shall provide in writing to Parent, Purchaser and their counsel any written comments or other material communications the Company or its counsel receive from the SEC or its staff with respect to theSchedule 14D-9 promptly after such receipt, and shall provide Parent, Purchaser and their counsel a reasonable opportunity to participate in the formulation of any response to any such comments of the SEC or its staff. The Company shall provide Parent, Purchaser and their counsel a reasonable opportunity to review and comment on theSchedule 14D-9 and any written communications to the SEC or its staff with respect to the Schedule14D-9, in each case, prior to the filing thereof with the SEC, and the Company shall give reasonable and good faith consideration to any reasonable comments made by Parent, Purchaser and their counsel (it being understood that Parent, Purchaser and their counsel shall provide any comments thereon as soon as reasonably practicable) and shall permit Parent, Purchaser and their counsel to participate in any discussions with the SEC or its staff regarding any comments thereon. Unless the Company Board of Directors has effected a Change of Recommendation in accordance with the terms ofSection 6.3, the Company shall include the Company Board Recommendation in theSchedule 14D-9. TheSchedule 14D-9 shall include the fairness opinion of the Company’s financial advisor referenced inSection 4.22.
(c) Company Information. In connection with the Offer and the Merger, the Company shall, or shall cause its transfer agent to, promptly furnish Parent and Purchaser with such assistance and such information as Parent or its agents may reasonably request in order to disseminate and otherwise communicate the Offer and the Merger to the record and beneficial holders of Company Common Stock, including a list, as of the most recent practicable date, of the Company Stockholders, mailing labels and any available listing or computer files containing the names and addresses of all record and beneficial holders of Company Common Stock, and lists of security positions of shares of Company Common Stock held in stock depositories (including lists of Company Stockholders, mailing labels, listings or files of securities positions), and shall promptly furnish Parent and Purchaser with such additional information and assistance (including updated lists of the record and beneficial holders of shares of Company Common Stock, mailing labels and lists of security positions) as Parent and Purchaser or their Representatives may reasonably request in order to communicate the Offer and the Merger to the holders of Company Common Stock. Subject to applicable Law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Transactions, Parent and Purchaser (and their respective Representatives) shall: (i) hold in confidence the information contained in any such lists of stockholders, mailing labels and listings or files of securities positions; (ii) use such information only in connection with the Transactions; and (iii) in the event that this Agreement is terminated in accordance withArticle IX, as promptly as reasonably practicable, return to the Company or destroy all copies of such information then in their possession or control.
THE MERGER
Section 2.1. The MergerMergers. Upon the terms and subject to the satisfaction or waiver of the conditions set forth in this Agreement, and in accordance with the relevant provisions of the DGCL, at the First Effective Time, PurchaserMerger Sub I shall be merged with and into the Company, whereuponand the separate existence of PurchaserMerger Sub I shall cease. The Company will cease, withbecome a wholly owned Subsidiary of Parent and will continue as the Company surviving corporation in the First Merger (the Company,“Surviving Corporation”). Upon the terms and subject to the conditions set forth in this Agreement, immediately following the First Effective Time and as part of a single integrated transaction, at the Second Effective Time, (a) if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, the Surviving Corporation shall be merged with and into Merger Sub II and Merger Sub II will continue as the surviving entity in the Merger, sometimes being referred to hereinmerger and as the “Surviving Company”), such that following the Merger, the Surviving Company will be a wholly owned Subsidiary of Parent. The MergerParent (the “Surviving LLC”) in accordance with the applicable provisions of the DGCL and the DLLCA or (b) if the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, the Surviving Corporation shall be merged with and into Parent, with Parent surviving the merger in accordance with the applicable provisions of the DGCL. “Surviving Company” means (i) if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, the Surviving LLC or (ii) if the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, Parent.
Section 1.2. Effect of the Mergers. At the First Effective Time, the effects of the First Merger and, at the Second Effective Time, the effects of the Mergers, shall be as provided in this Agreement, the applicable Certificate of Merger and as specified in the DGCL. The Merger shall be governed by Section 251(h)applicable provisions of the DGCL.DGCL and, unless the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, the DLLCA.
Section 2.2.1.3. The Closing. The closing of the MergerMergers (the “Closing”) shall take place by means of a virtual closing through electronic exchange of documents and signatures at 10:4:00 a.m., EasternPacific Time, aton the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York 10019, as promptly as practicable following the Acceptance Time, and in any case no later than the first (1st)fifth (5th) Business Day after the satisfaction or, to the extent permitted by applicable Law, waiver of the last of the conditions set forth inArticle VIIIVII to be satisfied or waived (other than any such conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or, to the extent permitted by applicable Law, waiver of such conditions at the Closing), unless another date or place is agreed to in writing by the Company
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and Parent; provided that, in the event that pursuant to the foregoing terms, the Closing would occur on a date that is prior to March 15, 2021, at Parent’s written election delivered to the Company no later than three (3) Business Days prior to the date on which the Closing would have otherwise occurred (and provided that (i) such election shall be irrevocable upon delivery and effective as of 4:00 a.m., Pacific Time, on the date on which the Closing would have otherwise occurred (such date, the “Original Closing Date”), (ii) upon effectiveness of such election, and subject to (A) confirmation by the Company to Parent in writing that the Company is ready, willing and able to consummate the Closing on the Original Closing Date and (B) the delivery by the Company to Parent of the certificate specified in Section 7.2(d) dated as of the Original Closing Date (and not the Closing Date so delayed pursuant to this proviso) solely with respect to the satisfaction of the conditions set forth in Section 7.2(a) and Section 7.2(c), each of the conditions to the obligations of Parent set forth in Section 7.2(a) and Section 7.2(c) (other than with respect to non-fulfillment of the condition set forth in Section 7.2(a) as a result of willful breach by the Company occurring after the Original Closing Date) shall be deemed to have been irrevocably fulfilled in all respects (for the avoidance of doubt, as a condition to the Closing, the Company will be required to deliver the certificate specified in Section 7.2(d) with respect to Section 7.2(a), solely with respect to the absence of any willful breach by the Company occurring after the Original Closing Date), and (iii) in the case of such election, Parent shall have irrevocably waived its right to terminate this Agreement pursuant to Section 8.1(c)(ii) (other than as a result of willful breach by the Company occurring after the Original Closing Date)), the Closing shall take place at 4:00 a.m., Pacific Time, on March 15, 2021 (or on a date after the Original Closing Date and prior to March 15, 2021, if Parent, in its sole discretion, elects such other date by written notice delivered to the Company no later than two (2) Business Days prior to such other date) if, except to the extent provided above in this sentence, the conditions set forth in Article VII are satisfied or waived as of such time, or if such conditions are not satisfied or waived as of such time, the timing of the Closing shall be determined in accordance with this Section 1.3, unless another date or place is agreed to in writing by the Company and Parent. The date on which the Closing actually takes place is referred to as the “Closing Date.”
Section 1.4. Effective Times. Subject to the terms and conditions hereof, the Parties shall take all necessary and appropriate actions to cause the Merger to become effective as promptly as practicable after the Acceptance Time, without a meetingprovisions of the Company Stockholders, in accordance with Section 251(h) of the DGCL.
Section 2.3. Effective Time. Onthis Agreement, on the Closing Date, the Parties shall cause a certificate of merger with respectsatisfying the applicable requirements of the DGCL, in form and substance reasonably satisfactory to Parent and the MergerCompany (the “First Certificate of Merger”) to, shall be duly executed by the Company and filed with the Secretary of State of the State of Delaware, as provided underand the DGCL andParties shall make any other filings, recordings or publications required to be made by the Company or Purchaser under the DGCL in connection with the First Merger. The First Merger shall become effective at such time asupon the filing of the First Certificate of Merger iswith the Secretary of State of the State of Delaware or, if otherwise agreed to by the Company and Parent, at such later time as may be specified in the First Certificate of Merger (the effective time of the First Merger being referred to as the “First Effective Time”). Immediately following the First Effective Time, (a) if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, a certificate of merger satisfying the applicable requirements of the DLLCA, in form and substance reasonably satisfactory to Parent and the Company shall be duly executed by Merger Sub II and filed with the Secretary of State of the State of Delaware, and the Parties shall make any other filings, recordings or on such other datepublications required to be made under the DLLCA in connection with the Second Merger or (b) if the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, a certificate of merger satisfying the applicable requirements of the DGCL, in form and timesubstance reasonably satisfactory to Parent and the Company (a certificate of merger pursuant to clause (a) or (b), the “Second Certificate of Merger” and each of which, including the First Certificate of Merger, may be referred to as a “Certificate of Merger”) shall be duly executed by Parent and filed with the Secretary of State of the State of Delaware, and the Parties shall make any other filings, recordings or publications required to be made under the DGCL in connection with the Second Merger. The Second Merger shall become effective upon the filing of the Second Certificate of Merger with the Secretary of State of the State of Delaware or, if otherwise agreed to by the Company and Parent, andat such later time as may be specified in the Second Certificate of Merger (such date and(the effective time of the Second Merger being hereinafter referred to as the “Second Effective Time”).
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Section 2.4.1.5. Governing Documents. Without limitingSection 7.4, atUnless otherwise determined by Parent prior to the First Effective Time, and by virtue of the Mergers and pursuant to each Certificate of Merger:
(a) At the First Effective Time, the certificate of incorporation and the bylaws of Purchaserthe Company shall be amended in their entireties to read as the certificate of incorporation and bylaws, respectively, of Merger Sub I, in the forms attached as Annex C and Annex D hereto, respectively, and as in effect immediately prior to the First Effective Time, and as so amended shall be the certificate of incorporation and bylaws, respectively, of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable Law; provided that the name of the Surviving Corporation shall be “Slack Technologies, Inc.”
(b) At the Second Effective Time, (i) if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, the certificate of formation of Merger Sub II and the limited liability company agreement of Merger Sub II, in the form attached as Annex E hereto, each as in effect immediately prior to the Second Effective Time, shall be amended to provide that the name of the Surviving LLC shall be “Slack Technologies, LLC” and as so amended shall be the certificate of formation and limited liability company agreement of the Surviving Company until thereafter amended as provided therein or by applicable Law, or (ii) if the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, the certificate of incorporation and the bylaws of Parent, as in effect immediately prior to the Second Effective Time, shall be the certificate of incorporation and bylaws, respectively, of the Surviving Company until thereafter changed or amended as provided therein or by applicable Law;provided that the name of the Surviving Company shall be “Tableau Software, Inc.”Law.
Section 2.5.1.6. Officers and Directors of the Surviving Company. Unless otherwise determined by Parent prior to the First Effective Time, the Parties will use their respective best efforts to cause:
(a) The officers of PurchaserMerger Sub I immediately prior to the First Effective Time, from and after the Effective Time, shallto be the initial officers of the Surviving Company. TheCorporation from and after the First Effective Time and the directors of PurchaserMerger Sub I immediately prior to the First Effective Time from and after the Effective Time, shallto be the initial directors of the Surviving Company.Corporation from and after the First Effective Time.
(b) (i) If the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, the Managing Member (as defined in the limited liability company agreement of the Surviving LLC) of the Surviving LLC immediately prior to the Second Effective Time shall remain the Managing Member after the Second Effective Time and the officers of Merger Sub II as of immediately prior to the Second Effective Time shall be the officers of the Surviving LLC from and after the Second Effective Time, or (ii) if the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, the officers and directors of Parent immediately prior to the Second Effective Time shall remain the officers and directors of the Surviving Company after the Second Effective Time.
TREATMENT OF SECURITIES
Section 3.1.2.1. Treatment of Capital Stock.
(a) Treatment of Company Common StockThe First Merger. At the First Effective Time by virtue of the First Merger and without any action on the part of the Parties or holders of any securities of the Company or of Purchaser, subject toSection 1.1(a) andSection 3.4, eachholder thereof:
(i) Each share of Company Common Stock issued and outstanding immediately prior to the First Effective Time (other than any Dissenting Shares, Cancelled Shares and any Converted Shares)or shares covered by Company Restricted Share Awards) shall be automatically converted into (A) 0.0776 (the “Exchange Ratio”) fully paid and nonassessable shares of Parent Common Stock, subject to Section 2.5 with respect to fractional shares (the “Stock Consideration”), and (B) the right to receive $26.79 in cash, without interest (the “Cash Consideration” and, together with the Offer Stock
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Consideration, (thethe “Merger Consideration”) in accordance with thisArticle III. From and after the First Effective Time, all such shares of Company Common Stock (other than any Dissenting Shares, Cancelled Shares, shares covered by Company Restricted Share Awards) shall no longercease to be issued and outstanding and shall automatically be cancelled and retired and shall cease to exist, and each applicable holder of a valid certificate or certificates which immediately prior to the First Effective Time represented any such shares of Company Common Stock (each, a “Certificate”) or evidenced by way of book-entry in the register of stockholders of the Company immediately prior to the First Effective Time (each, a “Book-Entry Share”) shall thereafter cease to have any rights with respect thereto,to such shares of Company Common Stock, except the right to receive the applicable portion of Merger Consideration therefor upon the surrender of such shares of Company Common Stock in accordance withSection 3.22.2, including the right to receive, pursuant toSection 3.52.5, cash in lieu of fractional shares of Parent Common Stock, if any, into which such shares of Company Common Stock would have been converted pursuant to thisSection 3.1(a)2.1(a)(i) (the “Fractional Share Consideration”), together with the amounts, if any, payable pursuant toSection 3.2(f)2.2(f).
(b) Certain Company Common Stock. At the Effective Time, each(ii) Each share of Company Common Stock issued and outstanding immediately prior to the First Effective Time that is owned or held in treasury by the Company or is owned by Parent or Purchaserany direct or indirect wholly owned Subsidiary of Parent or of the Company shall be cancelled and shall cease to exist, and no consideration shall be delivered in exchange therefor (collectively, the “Cancelled Shares”).
(iii) Each share of common stock of Merger Sub I issued and outstanding immediately prior to the First Effective Time shall be automatically converted into and become one validly issued, fully paid and nonassessable common share, par value $0.0001 per share, of the Surviving Corporation.
(b) The Second Merger. At the Second Effective Time by virtue of the Second Merger and without any action on the part of the holder thereof, each share of Companycommon stock, par value $0.0001 per share, of the Surviving Corporation issued and outstanding immediately prior to the Second Effective Time shall be cancelled and retired and shall cease to exist. Each limited liability company interest of Merger Sub II issued and outstanding immediately prior to the Second Effective Time shall remain outstanding as a limited liability company interest of the Surviving LLC; provided that in the event the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7, each share of Parent Common Stock issued and outstanding immediately prior to the Second Effective Time that is owned by any
direct or indirect wholly owned Subsidiary of Parent (other than Purchaser) or of the Company (the “Converted Shares”) shall be converted into such number of sharesremain outstanding as a share of common stock of the Surviving Company.
(c) Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, shares of Company (“Common Stock that are issued and outstanding immediately prior to the First Effective Time and that are owned by stockholders that have properly perfected their rights of appraisal within the meaning of Section 262 of the DGCL (the “Surviving CompanyStockDissenting Shares”) equalshall not be converted into the right to receive the productMerger Consideration, unless and until such stockholders shall have failed to perfect any available right of (i) (x)appraisal under applicable Law, but, instead, the numberholders thereof shall be entitled to payment of the appraised value of such Dissenting Shares in accordance with Section 262 of the DGCL. Notwithstanding the foregoing, if any such holder shall have failed to perfect or shall have effectively withdrawn or lost such right of appraisal, the shares of Company Common Stock held by such Subsidiary immediately priorstockholder shall not be deemed Dissenting Shares for purposes of this Agreement and shall thereupon be deemed to have been converted into the Merger Consideration at the First Effective Time in accordance with Section 2.1(a). The Company shall give Parent (A) prompt notice of any demands for appraisal filed pursuant to Section 262 of the DGCL received by the Company, withdrawals of such demands and any other instruments served or delivered in connection with such demands pursuant to the Effective Time,dividedDGCL and received by (y) the number of shares of Company Common Stock outstanding immediately priorand (B) the opportunity and right to the Effective Time,participate in all negotiations and (ii) the total number of shares of Surviving Company Stock outstanding immediately after the consummationproceedings with respect to demands made pursuant to Section 262 of the Merger.
(c) TreatmentDGCL (it being understood that, subject to good-faith consultation with Parent, the Company will have the right to direct and control any such negotiations and proceedings). The Company shall not, except with the prior written consent of Purchaser Shares. At the Effective Time, each issued and outstanding share of common stock, par value $0.001 per share, of Purchaser (the “Purchaser Shares”) shall be automatically converted into and become one (1) fully paid and nonassessable share of Surviving Company Stock. From and after the Effective Time, all certificates representing Purchaser Shares shall be deemedParent, (x) make any payment with respect to any such demand, (y) offer to settle or settle any such demand or (z) waive any failure to timely deliver a written demand for all purposesappraisal or timely take any other action to represent the number of shares of Surviving Company Stock into which they were convertedperfect appraisal rights in accordance with the immediately preceding sentence.DGCL.
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(d) Adjustment to Merger Consideration. The Merger Consideration shall be adjusted appropriately, without duplication, to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock or Parent Common Stock, as applicable), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the number of shares of Company Common Stock or shares of Parent Common Stock outstanding after the date hereof and prior to the First Effective Time. Nothing in thisSection 3.1(d)2.1(d) shall be construed to permit the Company or Parent to take any action with respect to its securities that is prohibited by the terms of this Agreement.
Section 3.2.2.2. Payment for Securities; Surrender of Certificates.
(a) Exchange Fund. Prior to the First Effective Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as the exchange agent in connection with the First Merger (the “Exchange Agent”). The Exchange Agent shall also act as the agent for the Company Stockholders for the purpose of receiving and holding their Certificates and Book-Entry Shares and shall obtain no rights or interests in the shares represented thereby. At or immediately after the First Effective Time, Parent shall deposit, or cause to be deposited, with the Exchange Agent (i) evidence of Parent Common Stock issuable pursuant to Section 2.1(a)in book-entry form equal to the aggregate MergerStock Consideration (excluding any Fractional Share Consideration) payable pursuant toSection 3.1(a) and (ii) cash in immediately available funds in an amount sufficient to pay the Cash Consideration in accordance with Section 2.1(a) and the Fractional Share Consideration in accordance withSection 3.52.5, and any dividends or other distributions underSection 3.2(f)2.2(f) (such evidence of book-entry shares of Parent Common Stock and cash amounts, together with any dividends or other distributions with respect thereto, the “Exchange Fund”), in each case, for the sole benefit of the holders of Company Common Stock. In the event the Exchange Fund shall be insufficient to pay the Merger Consideration in accordance with Section 2.1, the Fractional Share Consideration in accordance withSection 3.52.5 and any dividends or other distributions underSection 3.2(f)2.2(f), Parent shall promptly deposit, or cause to be deposited, additional funds with the Exchange Agent in an amount that is equal to the shortfall that is required to make such payment. Parent shall cause the Exchange Agent to make, and the Exchange Agent shall make, delivery of the Merger Consideration, including payment of the Fractional Share Consideration in accordance withSection 3.52.5, and any amounts payable in respect of dividends or other distributions on shares of Parent Common Stock in accordance withSection 3.2(f)2.2(f),, out of the Exchange Fund in accordance with this Agreement. The Exchange Fund shall not be used for any purpose that is not expressly provided for in this Agreement. The cash portion of the Exchange Fund shall be invested by the Exchange Agent as reasonably directed by Parent;provided,however, that any investment of such cash shall in all events be limited to direct short-term obligations of, or short-term obligations fully guaranteed as to principal and interest by, the U.S. government, in commercial paper ratedP-1 or A-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $10 billion (based on the most recent financial statements of such bank that are then publicly available), and that no such investment or loss thereon shall affect the amounts payable to holders of Certificates or Book-Entry Shares pursuant to thisArticle IIIII. Any interest and other income resulting from such investments shall be paid to Parent.
(b) Procedures for Surrender.
(i) Company Common Stock Certificates. Promptly after the First Effective Time, Parent shall cause the Exchange Agent to mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Company Common Stock (the “Certificates”)Certificate and whose shares of Company Common Stock were converted pursuant toSection 3.12.1 into the right to receive the Merger Consideration (A) a letter of transmittal, which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates (or affidavits of loss in lieu thereof and, if required by Parent, an indemnity bond) to the Exchange Agent and shall be in such form and have such other provisions as Parent may reasonably specify and (B) instructions for effecting the surrender of the Certificates (or affidavits of loss in lieu thereof and, if required by Parent, an indemnity bond) in exchange for payment of the Merger Consideration into which such shares of Company Common Stock have been converted pursuant toSection 3.12.1, including any
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amount payable in respect of Fractional Share Consideration in accordance withSection 3.52.5, and any dividends or other distributions on shares of Parent Common Stock in accordance withSection 3.2(f)2.2(f). Upon surrender of a Certificate (or an affidavit of loss in lieu thereof and, if required by Parent, an indemnity bond) for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be required pursuant to such instructions, the holder of such Certificate shall be entitled to receive in exchange therefor the applicable Merger Consideration pursuant to the provisions of thisArticle IIIII, including any Fractional Share Consideration that such holder has the right to receive pursuant to the provisions ofSection 3.52.5, and any amounts that such holder has the right to receive in respect of dividends or other distributions on shares of Parent Common Stock in accordance withSection 3.2(f)2.2(f) for each share of Company Common Stock formerly represented by such Certificate, and the Certificate (or affidavit of loss in lieu thereof and, if required by Parent, an indemnity bond) so surrendered shall be forthwith cancelled. The Exchange Agent shall accept such Certificates (or affidavits of loss in lieu thereof and, if required by Parent, an indemnity bond) upon compliance with such reasonable terms and conditions as the Exchange Agent may impose to effect an orderly exchange thereof in accordance with normal exchange practices. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition precedent of payment that (x) the Certificate so surrendered shall be properly endorsed or shall be otherwise in proper form for transfer and (y) the Person requesting such payment shall have paid any transfer and other similar Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered or shall have established to the satisfaction of Parent that such Tax either has been paid or is not required to be paid.
(ii) Book-Entry Shares. Any holder of or non-certificated Company Common Stock represented by book-entry (“Book-Entryany Book-Entry Shares”) and whose shares of Company Common Stock were converted pursuant toSection 3.12.1 into the right to receive the Merger Consideration shall not be required to deliver a Certificate or an executed letter of transmittal to the Exchange Agent to receive the Merger Consideration. In lieu thereof, each registered holder of one or more Book-Entry Shares shall automatically upon the First Effective Time be entitled to receive, and Parent shall cause the Exchange Agent to pay and deliver as promptly as reasonably practicable after the First Effective Time (and in any event within five (5) Business Days following the First Effective Time) the applicable Merger Consideration pursuant to the provisions of thisArticle IIIII, including any Fractional Share Consideration that such holder has the right to receive pursuant to the provisions ofSection 3.52.5, and any amounts that such holder has the right to receive in respect of dividends or other distributions on shares of Parent Common Stock in accordance withSection 3.2(f)2.2(f), for each share of Company Common Stock formerly represented by such Book-Entry Share, and the Book-Entry Share so exchanged shall be forthwith cancelled. Payment of the Merger Consideration with respect to Book-Entry Shares shall only be made to the person in whose name such Book-Entry Shares are registered.
(iii) No Interest. No interest shall be paid or accrue on any portion of the Merger Consideration payable upon surrender of any Certificate (or affidavit of loss in lieu thereof in accordance withSection 3.2(e)2.2(e)) or in respect of any Book-Entry Share.
(c) Transfer Books; No Further Ownership Rights in Company Common Stock. At the First Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers of Company Common Stock on the records of the Company. Until surrendered as contemplated by thisSection 3.22.2, each Certificate and Book-Entry Share shall be deemed at any time after the First Effective Time to represent only the right to receive the applicable Merger Consideration as contemplated by thisArticle IIIII. If, after the First Effective Time, Certificates or Book-Entry Shares are presented to Parent for any reason, they shall be cancelled and exchanged as provided in this Agreement.
(d) Termination of Exchange Fund; No Liability. At any time following the first (1st) anniversary of the First Effective Time, Parent shall be entitled to require the Exchange Agent to deliver to it any funds (including any interest received with respect thereto) remaining in the Exchange Fund that have not been disbursed, or for which disbursement is pending subject only to the Exchange Agent’s routine administrative
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procedures, to holders of Certificates or Book-Entry Shares, and thereafter such holders shall be entitled to look only to Parent (subject to abandoned property, escheat or similar Laws) as general creditors thereof with respect to the applicable Merger Consideration, including any amount payable in respect of Fractional Share Consideration in accordance withSection 3.52.5, and any dividends or other distributions on shares of Parent Common Stock in accordance withSection 3.2(f)2.2(f), payable upon due surrender of their Certificates (or affidavit of loss in lieu thereof in accordance withSection 3.2(e)2.2(e)) or Book-Entry Shares and compliance with the procedures inSection 3.2(b)2.2(b), without any interest thereon. Notwithstanding the foregoing, none of Parent, the Company, Purchaser,Merger Sub I, the Surviving Corporation, the Surviving Company or the Exchange Agent shall be liable to any holder of a Certificate or Book-Entry Share for any Merger Consideration or other amounts delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.
(e) Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof and, if required by Parent, an indemnity bond, the applicable Merger Consideration payable in respect thereof pursuant toSection 3.12.1, including any amount payable in respect of Fractional Share Consideration in accordance withSection 3.52.5, and any dividends or other distributions on shares of Parent Common Stock in accordance withSection 3.2(f)2.2(f).
(f) Dividends or Distributions with Respect to Parent Common Stock. No dividends or other distributions with respect to Parent Common Stock with a record date after the First Effective Time shall be paid to the holder of any unsurrendered Certificate or Book-Entry Share with respect to the shares of Parent Common Stock issuable hereunder, and all such dividends and other distributions shall be paid by Parent to the Exchange Agent and shall be included in the Exchange Fund, in each case, until the surrender of such Certificate (or affidavit of loss in lieu thereof and, if required by Parent, an indemnity bond) or Book-Entry Share in accordance with this Agreement. Subject to applicable Law, following surrender of any such Certificate (or affidavit of loss in lieu thereof and, if required by Parent, an indemnity bond) or Book-Entry Share, there shall be paid to the holder thereof, without interest, (i) the amount of dividends or other distributions with a record date after the First Effective Time theretofore paid with respect to such shares of Parent Common Stock to which such holder is entitled pursuant to this Agreement and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the First Effective Time but prior to such surrender and with a payment date subsequent to such surrender payable with respect to such shares of Parent Common Stock.
Section 3.3.2.3. Treatment of Company Equity Awards.
(a) At the First Effective Time, each Company Option (whether vested or unvested) held by any formerindividual who is not an employee of the Company or a Company Subsidiary immediately prior to the First Effective Time shall, in each case, without any action on the part of Parent, the Company or the holder thereof, be cancelled, with the holder of such Company Option becoming entitled to receive, within five (5) Business Days, in full satisfaction of the rights of such holder with respect thereto, the Merger Consideration in respect of each Net Share covered by such Company Option, less applicable Tax withholdings.
(b) At the First Effective Time, each Company Option that is outstanding and unexercised immediately prior to the First Effective Time (other than a Company Option covered bySection 3.3(a)2.3(a)) shall, without any action on the part of Parent, the Company or the holder thereof, cease to represent a right to acquire shares of Company Common Stock and shall be assumed and converted automatically into an option to purchase the number of shares of Parent Common Stock (each, an “Adjusted Option”) equal to the product obtained bymultiplying (x) the number of shares of Company Common Stock subject to the Company Option immediately prior to the First Effective Time,by (y) the ExchangeOption/RSU Conversion Ratio, with any fractional shares rounded down to the nearest whole share. Each Adjusted Option shall have an exercise price per share of Parent Common Stock equal to (i) the per share exercise price for shares of Company Common Stock subject to the corresponding Company Option immediately prior to the First Effective Timedivided by (ii) the ExchangeOption/RSU Conversion Ratio, rounded up to the nearest whole cent. Each Adjusted Option shall otherwise be subject to the same terms and
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conditions applicable to the corresponding Company Option under the applicable Company Equity Plan and the agreementagreements evidencing the grantgrants thereunder, including vesting terms.
(c) At the First Effective Time, each Company RSU and each Company Restricted Share Award that is outstanding immediately prior to the First Effective Time and that is held by anon-employee director of the Company will vest as of the First Effective Time and shall, without any action on the part of Parent, the Company or the holder thereof, be cancelled, with the holder of such Company RSU or Company Restricted Share Award becoming entitled to receive, within five (5) Business Days (or such later date required by Section 409A of the Code), in full satisfaction of the rights of such holder with respect thereto, the Merger Consideration in respect of each share of Company Common Stock subject to such Company RSU or Company Restricted Share Award immediately prior to the First Effective Time.
(d) At the First Effective Time, each Company RSU (other than any Company RSU covered bySection 3.3(c)2.3(c)) that is outstanding immediately prior to the First Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be assumed and converted automatically into a restricted stock unit with respect to a number of shares of Parent Common Stock (each, an “Adjusted RSU”) equal to the product obtained bymultiplying (i) the total number of shares of Company Common Stock subject to the Company RSU immediately prior to the First Effective Timeby (ii) the ExchangeOption/RSU Conversion Ratio, with any fractional shares rounded down to the nearest whole share. Each Adjusted RSU shall otherwise be subject to the same terms and conditions applicable to the corresponding Company RSU under the applicable Company Equity Plan and the agreementagreements evidencing the grantgrants thereunder, including vesting terms.
(e) At the First Effective Time, each Company PSURestricted Share Award (other than any Company Restricted Share Award covered by Section 2.3(c)) that is outstanding immediately prior to the First Effective Time shall, without any action on the part of Parent, the Company or the holder thereof, be assumed and converted automatically into an Adjusted RSU with respect toaward covering a number of shares of restricted Parent Common Stock (each, an “Adjusted Restricted Share Award”) equal to the product obtained bymultiplying (i) the total number of shares of Company Common Stock subject to the Company PSURestricted Share Award immediately prior to the First Effective Timeby(ii) the ExchangeRestricted Stock Conversion Ratio, with any fractional shares rounded down to the nearest whole share. For purposes ofclause (i)share (provided that the holder of the immediately preceding sentence,relevant Company Restricted Share Award shall be entitled to cash in an amount equal to such fractional share multiplied by the number of shares of Company Common Stock subject to a Company PSU immediately priorParent Trading Price, rounded to the Effective Timenearest whole cent). The per share repurchase price of each such Adjusted Restricted Share Award shall be equal to the number ofquotient obtained by dividing (i) the per share repurchase price applicable to the Company PSUs that would have vested based onRestricted Share Award by (ii) the achievement of performance at target levels.Restricted Stock Conversion Ratio, rounded up to the nearest cent. Each Adjusted RSURestricted Share Award shall otherwise be subject to the same terms and conditions applicable to the corresponding Company PSURestricted Share Award under the applicable Company Equity Plan and the agreementagreements evidencing the grantgrants thereunder, including vesting terms, except that such Adjusted RSU shall vest based on continued service to Parent and its affiliates through the last day of the applicable service vesting period (subject to any accelerated vesting provided for in the award agreement applicable to the corresponding Company PSU immediately prior to the Effective Time).terms.
(f) As soon as practicable following the date hereof, the Company shall take all actions with respect to the Company ESPP that are necessary to provide that: (i) with respect to any offering periods in effect as of the date hereof (the “Current ESPP Offering Periods”), no employee who is not a participant in the Companya Current ESPP Offering Period as of the date hereof may become a participant in the CompanyCurrent ESPP Offering Period, and no participant may increase the percentage amount of his or her payroll deduction election from that in effect on the date hereof for such Current
ESPP Offering Periods; (ii) subject to the consummation of the Merger,Mergers, the Company ESPP shall terminate effective immediately prior to the First Effective Time; (iii) if the Current ESPP Offering Periods terminate prior to the Effective Time, then the Company ESPP shall be suspended and no new offering period shall be commenced under the Company ESPP prior to the termination of this Agreement; and (iv) if any Current ESPP Offering Period is still in effect at the First Effective Time, then the last day of such Current ESPP Offering Period shall be accelerated to a date that is three (3) Business Days prior to the Closing Date as specified by the Company Board of Directors in accordance with Section 11(b) of the Company ESPP.Date.
(g) Prior to the First Effective Time, the Company shall pass such resolutions and take such other actions as are necessary forso as to cause the treatment of the Company Equity Awards and the Company ESPP as contemplated by thisSection 3.32.3..
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(h) Parent shall file with the SEC, at or as soon as reasonably practicable after the First Effective Time, one or more appropriatea registration statements (onstatement on FormS-3 or FormS-8 or(or any successor or other appropriate forms)form), to the extent such form is available, relating to the shares of Parent Common Stock issuable with respect to the Adjusted Options, Adjusted Restricted Share Awards and Adjusted RSUs. Parent shall use commercially reasonable efforts to maintain the effectiveness of such registration statement or statements for so long as Adjusted Options, Adjusted Restricted Share Awards and Adjusted RSUs remain outstanding and shall reserve a sufficient number of shares of Parent Common Stock for issuance upon exercise or settlement thereof.outstanding.
Section 3.4.2.4. Withholding. Each of the Company, Parent, Purchaser,Merger Sub I, the Surviving Corporation, the Surviving Company and the Exchange Agent shall be entitled to deduct and withhold from amounts otherwise payable pursuant to this Agreement any amounts as are required to be withheld or deducted with respect to such payment under the Code, or any other applicable Taxstate, local or non-U.S. Law. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be timely remitted to the appropriate Governmental Entity in accordance with applicable Tax Law and treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction or withholding was made.
Section 3.5.2.5. Fractional Shares. No certificate or scrip representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of Certificates or Book-Entry Shares, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a stockholder of Parent. Notwithstanding any other provision of this Agreement, each holder of Company Common Stock converted pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of Parent Common Stock (after aggregating all shares represented by the Certificates and Book-Entry Shares delivered by such holder) shall receive, in lieu thereof, cash, without interest, in an amount equal to such fraction of a share of Parent Common Stockmultiplied by the Parent Trading Price, rounded to the nearest whole cent.
Section 3.6.2.6. Tax Treatment. It is intended that, for
(a) For U.S. federal income taxTax purposes, the OfferParent, Merger Sub I, Merger Sub II and the Merger,Company intend that the Mergers, taken together, will be treated as a single integrated transaction that will qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and thatthe Treasury Regulations promulgated thereunder, and this Agreement is intended to be and is hereby adopted as a “plan of reorganization” within the meaning of Treasury RegulationsSection 1.368-2(g) and for purposes of Sections 354 and 361 of the Code.
(b) The Parties acknowledge and agree that for purposes of determining the value of Parent Common Stock to be received by Company Stockholders pursuant to the transactions contemplated by this Agreement under Revenue Procedure 2018-12, 2018-6 IRB 349 (“Rev. Proc. 2018-12”), (i) the “Safe Harbor Valuation Method” within the meaning of Rev. Proc. 2018-12 will be the Average of the Daily Volume Weighted Average Prices as described in Section 4.01(1) of Rev. Proc. 2018-12; (ii) the “Measuring Period” within the meaning of Section 4.02 of Rev. Proc. 2018-12 will be the five (5) consecutive trading days ending on November 24, 2020; (iii) the “national securities exchange” within the meaning of Section 3.01(4)(a)(ii) of Rev. Proc. 2018-12 will be the NYSE; and (iv) the “authoritative reporting source” within the meaning of Section 3.01(4)(a)(ii) of Rev. Proc. 2018-12 will be Bloomberg Finance L.P. The Parties further agree that the valuation of Parent Common Stock by reference to the methodology described in this Section 2.6(b) is intended to qualify for the “Safe Harbor Valuation Method” within the meaning of Section 4.01(1) of Rev. Proc. 2018-12 and no Party shall take any position for Tax purposes inconsistent therewith, except to the extent otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code.
Section 2.7. Alternative Transaction Structure. Notwithstanding the foregoing or anything in this Agreement to the contrary, in the event that ten (10) Business Days prior to the Closing, the Company and the trustee under the Convertible Notes Indenture have not each executed a supplemental indenture to the Convertible Notes Indenture in accordance with the terms thereof amending the terms thereof to permit the consummation of the Second Merger at the Second Effective Time without giving rise to a breach of, or any default under, any provision of the Convertible Notes Indenture, then Parent may irrevocably elect the Alternative Transaction Structure (as defined below) (by written notice to the Company at least one (1) Business Day prior to the
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anticipated Closing Date, a “Revised Structure Notice”; provided that if the Closing does not occur on the anticipated Closing Date, Parent may revoke such Revised Structure Notice and, at a later date, irrevocably elect to deliver a new written notice at least one (1) Business Day prior to the actual Closing Date), and upon delivery of such Revised Structure Notice, the structure of the Second Merger shall be modified such that for all purposes hereunder the Second Merger shall consist of the Surviving Corporation merging with and into Parent, with the separate existence of the Surviving Corporation ceasing and Parent continuing as the surviving corporation in the Second Merger (the “Alternative Transaction Structure”). If the Alternative Transaction Structure is adopted in accordance with the preceding sentence, (i) all references to “Merger Sub II” or “Surviving LLC” herein shall be deemed deleted from this Agreement (or replaced with “Parent,” solely to the extent the context requires such replacement to give effect to the Alternative Transaction Structure), and any representations, warranties, covenants or agreements of Merger Sub II or the Surviving LLC, as applicable, under this Agreement shall forthwith become null and void and there shall be no liability on the part of Parent, Merger Sub I, Merger Sub II or the Surviving LLC for any representations, warranties, covenants or agreements of Merger Sub II under this Agreement and (ii) all other provisions of this Agreement shall be given effect and shall continue in full force and effect and the Merger and the other transactions contemplated by this Agreement shall (subject to the terms and conditions hereof) occur.
Section 2.8. Limitation on Cash Consideration Payable. Notwithstanding anything in this Agreement to the contrary, if the Threshold Percentage (determined without regard to this sentence) is less than 41%, then an amount of cash otherwise payable to the holders of Company Common Stock under this Agreement (other than to holders of Dissenting Shares), equal to the amount of cash that would be necessary to cause the recomputed Threshold Percentage to equal 41%, shall instead be payable to such holders in an equivalent amount of Parent Common Stock (with each Parent Common Stock valued for this purpose at the Parent Trading Price); provided that cash shall be payable in respect of fractional shares of Parent Common Stock in accordance with Section 2.5. This Section 2.8 (including the defined terms used herein) is intended to cause this Agreement to satisfy the requirements of Treasury Regulations Section 1.368-1(e) (treating not less than 41% as a “substantial part” solely for such purpose) and shall be interpreted in a manner consistent therewith.
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as disclosed in (x) any publicly available Company SEC DocumentDocuments filed or furnished by the Company with the SEC since January 1, 2017June 3, 2019, and publicly available prior to the date of this Agreement (including any exhibits and other information incorporated by reference therein, but excluding any predictive, cautionary or forward looking disclosures contained under the captions “risk factors,” “forward looking statements” or any similar precautionary sections and any other disclosures contained therein that are predictive, cautionary or forward looking in nature) or (y) the applicable section of the disclosure letter delivered by the Company to Parent immediately prior to the execution
of this Agreement (the “Company Disclosure Letter”) (it being understood that any information set forth in one section or subsection of the Company Disclosure Letter shall be deemed to apply to and qualify (or, as applicable, a disclosure for purposes of) the representation and warranty set forth in this Agreement to which it corresponds in number and, whether or not an explicit reference or cross-reference is made, each other representation and warranty set forth in thisArticle IVIII for which it is reasonably apparent on its face that such information is relevant to such other section), the Company represents and warrants to Parent, Merger Sub I and PurchaserMerger Sub II as set forth below.
Section 4.1.3.1. Qualification, Organization, Subsidiaries, etc.etc.
(a) The Company is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization. Except as would not be material to the Company and the Company
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Subsidiaries, taken as a whole, each Company Subsidiary is a legal entity duly organized and validly existing under the Laws of its respective jurisdiction of organization. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each of the Company and the Company Subsidiaries has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. Each of the Company and the Company Subsidiaries is qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or, where relevant, in good standing, (1) has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect and (2) has not had and would not, either individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Company to consummate the Transactions, including the Offer and the Merger,Mergers, prior to the Outside Date. The Company has filed with the SEC, prior to the date hereof, a complete and accurate copy of the Company Governing Documents as amended to the date hereof. The Company Governing Documents are in full force and effect and the Company is not in violation of the Company Governing Documents. The Company has made available to Parent prior to the date hereof complete and accurate copies of the certificates of incorporation and bylaws, or equivalent organizational or governing documents, of and each of the Company’s “significant subsidiaries” within the meaning of Rule1-02 of RegulationS-X of the SEC, each as currently in effect.effect (including, for the avoidance of doubt, Slack Fund L.L.C.).
(b) All the issued and outstanding shares of capital stock of, or other equity interests in, each Company Subsidiary have been validly issued and are fully paid and nonassessable and are wholly owned, directly or indirectly, by the Company free and clear of all Liens, other than Permitted Liens or Liens arising under any applicable securities Laws.Law. Section 4.1(b)3.1(b) of the Company Disclosure Letter sets forth a truean accurate and complete list of the name of each Company Subsidiary its jurisdiction of organization and its U.S. federal income tax classification. Other thaneach Person in which the Company Subsidiaries set forth onSection 4.1(b) of the Company Disclosure Letter, neither the Company noror any Company Subsidiary owns anyan equity or other economic interest, together with (i) the jurisdiction of incorporation or organization, as the case may be, of each Company Subsidiary or such other Person, (ii) the type and percentage of interests held, directly or indirectly, by the Company in each Company Subsidiary or in each such other Person, (iii) in the case of a Company Subsidiary, the names and the type of and percentage of interests held by any Person other Person.than the Company or a Company Subsidiary in such Company Subsidiary and (iv) the classification for U.S. federal income Tax purposes of each Company Subsidiary.
Section 4.2.3.2. Capitalization.
(a) The authorized capital stock of the Company consists of 750,000,0005,000,000,000 shares of Class A Common Stock, 75,000,000700,000,000 shares of Class B Common Stock and 10,000,000100,000,000 shares of preferred stock, par value $0.0001 per share (“Company Preferred Stock”). As of June 6, 2019November 27, 2020 (the “Company Capitalization Date”), (i) (A) 76,916,180490,545,440 shares of Class A Common Stock (including 127,880 restricted shares of Class A Common Stock granted under Company Equity Plans and 694,541 restricted shares of Class A Common Stock granted under the arrangements set forth on Section 3.2(a)(i)(A)(1) of the Company Disclosure Letter) were issued and outstanding and 10,380,02385,807,290 shares of Class B Common Stock (including 1,141,293 restricted shares of Class B Common Stock granted under Company Equity Plans and 50,753 restricted shares of Class B Common Stock granted under the arrangements set forth on Section 3.2(a)(i)(A)(2) of the Company Disclosure Letter) were issued and outstanding, (B) no shares of Class A Common Stock and no shares of Class B Common Stock were held in the Company’s treasury, (C) no shares of Class A Common Stock and no shares of Class B Common Stock were held by the Company Subsidiaries, (D) Company Options covering 113,5021,434,853 shares of Class A Common Stock were outstanding, with a weighted average exercise price per share of $52.20,$24.31, (E) Company Options covering 878,2455,797,270 shares of Class B Common Stock were outstanding, with a weighted average exercise price per share of $8.09,$5.50, (F) Company RSUs covering 7,321,757 shares of Class A Common
Stock were outstanding; and (G) Company PSUs covering 109,12515,920,993 shares of Class A Common Stock were outstanding (assuming any applicable performance targetsoutstanding; and (G) Company RSUs covering 21,580,605 shares of Class B Common Stock were deemed satisfied at maximum performance);outstanding; (ii) 10,064,25974,775,212 shares of Class A Common Stock and no shares of Class B Common Stock were reserved for future issuance pursuant to the Company Equity Plans; (iii) 4,591,02312,770,714 shares of Class A Common Stock were reserved for future issuance pursuant to the Company ESPP; (iv) 35,479,196 shares of Class A Common Stock
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were reserved for issuance pursuant to the Convertible Notes Indenture; and (iv)(v) no shares of Company Preferred Stock were issued or outstanding. All the outstanding shares of Company Common Stock are, and all shares of Company Common Stock reserved for future issuance as described above shall be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights. The Company has sufficient authorized and unissued shares of Class A Common Stock to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock. From and after the date of the Convertible Notes Indenture, no event or circumstance has occurred that has resulted in an adjustment to the Conversion Rate (as defined in the Convertible Notes Indenture as in effect on the date hereof) from 32.2630 shares of Common Stock (as defined in the Convertible Notes Indenture as in effect on the date hereof) per $1,000 principal amount of Convertible Notes. From and after the date of the Capped Call Confirmations, no event or circumstance has occurred that has resulted in an adjustment (other than as a result of this Agreement or the Transactions) to the applicable Applicable Percentage (as defined in each Capped Call Confirmation as in effect on the date hereof) set forth in each Capped Call Confirmation as of the date of original effectiveness thereof, the applicable Option Entitlement (as defined in each Capped Call Confirmation as in effect on the date hereof) set forth in each Capped Call Confirmation as of the date of original effectiveness thereof, the Strike Price (as defined in each Capped Call Confirmation as in effect on the date hereof) from $30.9953 or the Cap Price (as defined in each Capped Call Confirmation as in effect on the date hereof) from $48.6200.
(b) Section 4.2(b)3.2(b) of the Company Disclosure Letter sets forth a true and complete list, as of the Company Capitalization Date, of (i) each Company Equity Award, (ii) the name of the Company Equity Award holder, (iii) the number of shares of Company Common Stock underlying each Company Equity Award, (iv) the date on which the Company Equity Award was granted, (v) the Company Equity Plan under which the Company Equity Award was granted, (vi) the vesting schedule with respect to the Company Equity Award, including any right of acceleration of such vesting schedule, (vii) the exercise price of each Company Equity Award, if applicable, and (viii) the expiration date of each Company Equity Award, if applicable.
(c) Except as set forth inSection 4.2(a)3.2(a) andSection 4.2(b)3.2(b), and other than the shares of Company Common Stock that have become outstanding after the Company Capitalization Date that were reserved for issuance as set forth inSection 4.2(a)3.2(a)(ii) and issued in accordance with the terms of the applicable Company Equity Plan and Company Equity Award, in each case as of the date hereof: (i) the Company does not have any shares of capital stock or other equity interests issued or outstanding and (ii) there are no outstanding subscriptions, options, warrants, puts, calls, exchangeable or convertible securities or other similar rights, agreements or commitments or any other Contract to which the Company or any Company Subsidiary is a party or is otherwise bound obligating the Company or any Company Subsidiary to (A) issue, transfer or sell, or make any payment with respect to, any shares of capital stock or other equity interests of the Company or any Company Subsidiary or securities convertible into, exchangeable for or exercisable for, or that correspond to, such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, put, call, exchangeable or convertible securities or other similar right, agreement or commitment, (C) redeem or otherwise acquire any such shares of capital stock or other equity interests or (D) provide any amount of funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Company Subsidiary that is not wholly owned or in any other Person. There are no outstanding obligations of the Company or any Company Subsidiary (1) restricting the transfer of, (2) affecting the voting rights of, (3) requiring the repurchase, redemption or disposition of, or containing any right of first refusal, right of first offer or similar right with respect to, (4) requiring the registration for sale of or (5) granting any preemptive or anti-dilutive rights with respect to, any shares of capital stock or other equity interests of the Company or any Company Subsidiary.
(d) Neither the Company nor any Company Subsidiary has outstanding bonds, debentures, notes or other similar obligations, the holders of which have the right to vote (or, other than the Convertible Notes, which are convertible into or exercisable for cash and/or securities having the right to vote) with the Company Stockholders on any matter.
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(e) ThereOther than the Founders Voting Agreements, there are no voting trusts or other agreements, commitments or understandings to which the Company or any Company Subsidiary (or to the Company’s Knowledge, a Company Stockholder) is a party with respect to the voting of the capital stock or other equity interests of the Company or any Company Subsidiary. True and complete copies of each Founders Voting Agreement in effect as of the date hereof have been made available to Parent prior to the date hereof. To the Company’s Knowledge, (i) none of the parties thereto is in any breach of or any default under the terms of any Founders Voting Agreement and (ii) each Founders Voting Agreement is a valid, binding and enforceable obligation on each party thereto and is in full force and effect, subject to the Enforceability Limitations.
Section 4.3.3.3. Corporate Authority.
(a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions, including the Offer and the Merger.Mergers. The execution and delivery of this Agreement, the performance of the Company’s obligations under this Agreement, and the consummation of the Transactions and the transactions contemplated by the Letter
Agreement, have been duly and validly authorized by the Company Board of Directors and no other corporate proceedings (pursuant to the Company Governing Documents or otherwise) on the part of the Company are necessary to authorize the performance of the Company’s obligations under this Agreement or the consummation of, and to consummate, the Transactions, or the transactions contemplated by the Letter Agreement, except, with respect to the First Merger, the receipt of the Company Stockholder Approval and, with respect to the Mergers, for the filing of the applicable Certificate of Merger with the Secretary of State of the State of Delaware.
(b) The affirmative vote of the holders of a majority of the outstanding Company Common Stock entitled to vote thereon (the “Company Stockholder Approval”) to approve the First Merger and adopt this Agreement is the only vote of the holders of any class or series of the Company’s capital stock necessary to approve and adopt this Agreement and to consummate the Transactions, including the Mergers.
(c) On or prior to the date hereof, the Company Board of Directors has unanimously (i) determined that the terms of the Transactions, including the Offer and the Merger,Mergers, are fair to, and in the best interests of, the Company and the Company Stockholders, (ii) determined that it is in the best interests of the Company and the Company Stockholders, and declared it advisable, to enter into this Agreement, (iii) approved the execution and delivery by the Company of this Agreement, (including the “agreement of merger” as such term is used in Section 251 of the DGCL), the performance by the Company of its covenants and agreements contained herein and the consummation of the Offer, the MergerMergers and the other Transactions upon the terms and subject to the conditions contained herein and (iv) resolved to recommend that the Company Stockholders acceptapprove the OfferTransactions, including the First Merger, and tender their shares of Company Common Stock to Purchaser pursuant to the Offer.adopt this Agreement. None of the foregoing actions by the Company Board of Directors has been rescinded or modified in any way (unless such rescission or modificationa Change of Recommendation has been effected after the date hereof in accordance with the terms ofSection 6.35.3).
(b) Assuming (i)(d) On or prior to the satisfactiondate hereof, the Company Board of Directors, including all of the Minimum Condition,Independent Directors (as defined in the Charter), unanimously (i) determined that the Transactions, including the Mergers, constitute a Change of Control Transaction (as defined in the Company Charter) and (ii) the absence of any amendment, modification or other change to the DGCL or this Agreement that would render Section 251(h)entry and execution of the DGCL inapplicable to thisVoting Agreement and (iii)does not constitute a Transfer (as defined in the accuracy of Parent’s and Purchaser’s representations and warranties set in forthSection 5.14, no vote of the holders of Company Common Stock or other capital stockCharter) of the Company is necessary to adopt this Agreement and consummate the Merger under applicable Law or the Company Governing Documents.Stockholders of any Class B Common Stock.
(c)(e) This Agreement hasbeen duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of Parent, Merger Sub I and Purchaser,Merger Sub II, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, examinership, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought (collectively, the “Enforceability Limitations”).
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Section 4.4.3.4. Governmental Consents; No Violation.
(a) Other than in connection with or in compliance with (i) the DGCL and the DLLCA, (ii) the filing of the Offer Documents, the Schedule14D-9Proxy Statement/Prospectus and the FormS-4Registration Statement with the SEC and any amendments or supplements thereto and declaration of effectiveness of the FormS-4,Registration Statement and the mailing of the Proxy Statement/Prospectus, (iii) the Securities Act, (iv) the Exchange Act, (v) applicable state securities, takeover and “blue sky” laws, (vi) the HSR Act and any other requisite clearances or approvals under any other applicable requirements of other AntitrustRegulatory Laws of the jurisdictions set forth on Section 3.4(a) of the Company Disclosure Letter and (vii) any applicable requirements of the NYSE, no authorization, permit, notification to, consent or approval of, or filing with, any Governmental Entity is necessary or required, under applicable Law, for the consummation by the Company of the Transactions, except for such authorizations, permits, notifications, consents, approvals or filings that, if not obtained or made, would not reasonably be expected to have, individually or in the aggregate, (1) a Company Material Adverse Effect or (2) a material adverse effect on the ability of the Company to consummate the Transactions, including the Offer and the Merger,Mergers, prior to the Outside Date.
(b) The execution and delivery by the Company of this Agreement do not, and, subject to the receipt of the Company Stockholder Approval and except as described inSection 4.4(a)3.4(a), the consummation of the Transactions and performance and compliance with the provisions hereof (and, in the case ofSection 4.4(b)(ii)(A) andSection 4.4(b)(iii) only, the consummation of the transactions contemplated by the Letter Agreement) will not (i) conflict with or result in any violation or breach of, or default or change of control (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination,
modification, cancellation, first offer, first refusal or acceleration of any obligation or to the loss of a benefit under any Material Contract binding upon the Company or any Company Subsidiary or to which any of them are a party or by which or to which any of their respective properties, rights or assets are bound or subject, or result in the creation of any Lien upon any of the properties, rights or assets of the Company or any Company Subsidiary, other than Permitted Liens, (ii) conflict with or result in any violation of any provision of (A) the Company Governing Documents or (B) the organizational or governing documents of any Company Subsidiary or (iii) conflict with or violate any Laws applicable to the Company or any Company Subsidiary or any of their respective properties, rights or assets, other than in the case ofclausesclause (i),(ii)(B) and(iii), any such violation, breach, conflict, default, termination, modification, cancellation, acceleration, right, loss or Lien that has not had and would not reasonably be expected to have, individually or in the aggregate, (1) a Company Material Adverse Effector(2) a material adverse effect on the ability of the Company to consummate the Transactions, including the Offer and the Merger,Mergers, prior to the Outside Date.
Section 4.5.3.5. SEC Reports and Financial Statements.
(a) Since January 1, 2016,June 3, 2019, the Company has timely filed or furnished all forms, statements, schedules, documents and reports required to be filed or furnished by it with the SEC (such forms, statements, schedules, documents and reports, the “Company SEC Documents”). As of their respective filing dates or, if amended prior to the date hereof, as of the date of (and giving effect to) the last such amendment, the Company SEC Documents complied in all material respects with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder and the listing and corporate governance rules and regulations of the NYSE, and none of the Company SEC Documents contained (or, with respect to the Company SEC Documents filed after the date hereof, will contain) any untrue statement of a material fact or omitted (or with respect to the Company SEC Documents filed after the date hereof, will omit) to state any material fact required to be stated therein or necessary to make the statements therein, at the time and in light of the circumstances under which they were made, not misleading. Since JanuaryFebruary 1, 2016,2019, neither the Company nor any Company Subsidiary has received from the SEC or any other Governmental Entity any written comments or questions with respect to any of the Company SEC Documents (including the financial statements included therein) that are not resolved, or, as of the date hereof, has received any written notice from the SEC or other Governmental Entity that such Company SEC Documents (including the financial statements included therein) are being reviewed or investigated, and, to the Company’s Knowledge, there is not, as of the date hereof, any investigation or review being conducted by the SEC or any other Governmental Entity of any Company SEC
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Documents (including the financial statements included therein). No Company Subsidiary is required to file any forms, reports or other documents with the SEC.
(b) The consolidated financial statements (including all related notes and schedules) of the Company included or incorporated by reference in the Company SEC Documents when filed or, if amended prior to the date hereof, as of the date of (and giving effect to) the last such amendment, complied in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, in each case in effect at the time of such filing, and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited quarterly financial statements, to normalyear-end audit adjustments and any other adjustment described therein permitted by the rules and regulations of the SEC and to the absence of notes) in conformity with United States Generally Accepted Accounting Principles (“GAAP”) applied on a consistent basis during the periods involved (subject, in the case of the unaudited quarterly financial statements, to normalyear-end audit adjustments and any other adjustment described therein permitted by the rules and regulations of the SEC and to the absence of notes).
(c) The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended. Each
required form, report and document containing financial statements that has been filed with or submitted to the SEC was accompanied by any certifications required to be filed or submitted by the Company’s principal executive officer and principal financial officer pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, such certification complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act. Neither the Company nor any of its executive officers has received written notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.
(d) Neither the Company nor any Company Subsidiary is a party to, or has any Contract to become a party to, any joint venture,off-balance sheet partnership or any similar Contract, including any Contract relating to any transaction or relationship between or among the Company or any Company Subsidiary, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or anyoff-balance sheet arrangements (as defined in Item 303(a) of RegulationS-K of the SEC), in any such case, where the purpose of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company in the Company’s published financial statements or any Company SEC Document.Documents.
Section 4.6.3.6. Internal Controls and Procedures. The Company has established and maintains, and at all times since January 1, 2016June 3, 2019, has maintained, disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, ofRule 13a-15 under the Exchange Act) as required byRule 13a-15 under the Exchange Act, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes OxleySarbanes-Oxley Act. Since January 1, 2016,31, 2017, the Company’s principal executive officer and its principal financial officer have disclosed to the Company’s auditors and the audit committee of the Company Board of Directors (the material circumstances of which disclosure (if any) and significant facts learned during the preparation of such disclosure have been made available to Parent prior to the date hereof) (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, (ii) any fraud, whether or not material, that involves management or other
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employees who have a significant role in the Company’s internal controls over financial reporting and (iii) any written claim or allegation regarding clausesclause (i) or(ii). Since January 1, 2016 through the date hereof,31, 2017, neither the Company nor any Company Subsidiary has received any material, unresolved complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls.
Section 4.7.3.7. No Undisclosed Liabilities. Neither the Company nor any Company Subsidiary has any liabilities of any nature, whether or not accrued, contingent, absolute or otherwise, except (a) as and to the extent specifically disclosed, reflected or reserved against in the Company’s consolidated balance sheet (or the notes thereto) as of DecemberJanuary 31, 20182020, included in the Company SEC Documents filed or furnished prior to the date hereof, (b) for liabilities incurred or which have been discharged or paid in full, in each case, in the ordinary course of business consistent with past practice since DecemberJanuary 31, 20182020 (other than any liability for any material breaches of Contracts), (c) as expressly required or expressly contemplated by this Agreement and (d) for liabilities which have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.8.3.8. Absence of Certain Changes or Events.
(a) From DecemberJanuary 31, 2018 through the date hereof,2020, there has not occurred any Effect that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) From DecemberJanuary 31, 20182020 through the date hereof, (i) except to the extent it relates to the events giving rise to and the discussion and negotiation of this Agreement and the Transactions, the businesses of the Company and the Company Subsidiaries have been conducted in all material respects in the ordinary course of business and (ii) neither the Company nor any Company Subsidiary has taken any action that, if taken after the date hereof, would constitute a breach of, or require the consent of Parent under,Section 6.15.1 (other than any actions specified byclausesclause (i),(iv),(v),(vii),(x(x)),(xi),(xii),(xvi(xvi)),(xxii) or(xxvii)(xxix) (to the extentclause(xxvii) (xxix) relates to the foregoing clauses)).
Section 4.9.3.9. Compliance with Law; Permits.
(a) The Company and each Company Subsidiary are and have been since January 1, 201631, 2017 in compliance with, and not in default under or in violation of, any Laws (including Environmental Laws and employee benefits and labor Laws) applicable to the Company or such SubsidiariesCompany Subsidiary or any of their respective properties or assets, except where suchnon-compliance, default or violation has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) The Company and the Company Subsidiaries are and have been since January 1, 201631, 2017 in possession of all franchises, grants, authorizations, business licenses, permits, easements, variances, exceptions, consents, certificates, approvals, registrations, clearances and orders of any Governmental Entity or pursuant to any applicable Law necessary for the Company and the Company Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “Company Permits”), except where the failure to have any of the Company Permits has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, all Company Permits are in full force and effect, no default (with or without notice, lapse of time or both) has occurred under any such Company Permit and none of the Company or any Company Subsidiary has received any written notice from any Governmental Entity threatening to suspend, revoke, withdraw or modify any such Company Permit.
(c) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2014, neither31, 2015, none of the Company noror any
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Company Subsidiary, in connection with the business of the Company or any Company Subsidiary, or, to the Company’s Knowledge, any other third party (including the Company’s or the Company Subsidiaries’ respective Representatives) acting on behalf of the Company or any Company Subsidiary, has directly or indirectly (i) taken any action in violation of any applicable Anti-Corruption Law, (ii) offered, authorized, provided or given (or made attempts at doing any of the foregoing) any payment or thing of value to any Person, including a “foreign official” (as defined by the FCPA), for the purpose of influencing any act or decision of such Person to unlawfully obtain or retain business or other advantage or (iii) taken any other action that would constitute an offer to pay, a promise to pay or a payment of money or anything else of value, or an authorization of such offer, promise or payment, directly or indirectly, to any Representative of another company or entityPerson in the course of their business dealings with the Company or any Company Subsidiary, in order to unlawfully induce such Person to act against the interest of his or her employer or principal.
(d) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2014, neither31, 2015, none of the Company noror any Company Subsidiary has been subject to any actual, pending, or, to the Company’s Knowledge, threatened civil, criminal, or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, Proceedings, demand letters, settlements or enforcement actions, or made any voluntary disclosures to any Governmental Entity, involving the Company or any Company Subsidiary in any way relating to applicable Anti-Corruption Laws. The Company and each Company Subsidiary has established and maintains a compliance program and reasonable internal controls and procedures appropriate to the requirements of applicable Anti-Corruption Laws.
(e) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2014,31, 2015, the Company and the
Company Subsidiaries have at all times conducted their businesses in all respects in accordance with United States economic sanctions Laws administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) and all other applicable Import Restrictions and Export Controls in any countries in which any of the Company and the Company Subsidiaries conduct business. Since January 1, 2014,31, 2015, the Company and the Company Subsidiaries have maintained in all material respects all records required to be maintained in the Company’s and the Company Subsidiaries’ possession as required under the Import Restrictions and Export Controls.
(f) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2014, neither31, 2015, none of the Company noror any Company Subsidiary has sold, exported, re-exported, transferred, diverted, or otherwise disposed of any products, Software, or technology (including products derived from or based on such technology) to any destination, entity, or Person prohibited by the Laws of the United States or any other country, without obtaining prior authorization from the competent Governmental Entities as required by those Laws. The Company and the Company Subsidiaries have complied in all material respects with all terms and conditions of any license issued or approved by the Directorate of Defense Trade Controls, the Bureau of Industry and Security, or OFAC that is or has been in force since January 1, 2014.31, 2015. Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2014,31, 2015, except pursuant to valid licenses, license exceptions or exemptions, the Company and the Company Subsidiaries have not released or disclosed controlled technical data or technology to any foreign national whether in the United States or abroad.
(g) NeitherNone of the Company noror any Company Subsidiary, nor, to the Company’s Knowledge, any director, officer, agent, employee or affiliate of the Company or any Company Subsidiary: (x) is, or is controlled or 50% or more owned by, one or more Persons or entities targeted by sanctions administered by OFAC, the Department of Commerce Bureau of Industry or Security (BIS) or included on any sanctioned party list administered by OFAC (including the List of Specially Designated Nationals and Blocked Persons or Foreign Sanctions Evaders, Denied Persons List, Entities List, or Unverified List, or the Department of State Debarred Parties List, Excluded Parties
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List, and Terrorist Exclusion List, the United Nations Security Council Consolidated List, or any other lists of known or suspected terrorists, terrorist organizations or other prohibited Persons made publicly available or provided to the Company or any Company Subsidiary by any relevant Governmental Entity (such entities, Persons or organizations collectively, the “Restricted Parties”) or (y) has, since January 1, 2014,31, 2015, conducted any business with or engaged in any transaction or arrangement with or involving, directly or indirectly, any Restricted Parties or countries subject to economic or trade sanctions in violation of applicable Law, or has otherwise been in violation of any such sanctions, restrictions or any similar Law. Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, neithernone of the Company noror any Company Subsidiary is subject to any pending or, to the Company’s Knowledge, threatened action by any Governmental Entity that would restrict its ability to engage in export transactions, bar it from exporting or otherwise limit in any material respect its exporting activities or sales to any Governmental Entity. Except as would not, individually or in the aggregate, reasonably be expected to be material to the Company and the Company Subsidiaries, taken as a whole, neithernone of the Company noror any Company Subsidiary has, since January 1, 2014,31, 2015, received any written notice of potential violations of Laws coveringdeficiencies in connection with any export controls, trade embargoes or economic sanctions matter from OFAC or any other Governmental Entity or made any voluntary disclosures to OFAC or any other Governmental Entity of facts that could result in any material enforcement action being taken or any material penalty being imposed by a Governmental Entity against the Company or any Company Subsidiary. The Company and each Company Subsidiary has in place policies and procedures designed to ensure compliance with all applicable Import Restrictions and Export Controls.
(h) The Company is in compliance in all material respects with the applicable listing and other rules and regulations of the NYSE.
Section 4.10.3.10. Employee Benefit Plans.
(a) Section 3.10(a)Section 4.10(a) of the Company Disclosure Letter sets forth each material Company Benefit Plan. For purposes of this Agreement, “Company Benefit Plan” means each employee benefit plan (as defined in
Section 3(3) of ERISA), whether or not subject to ERISA, and each bonus, stock, stock option or other equity-based compensation arrangement or plan, incentive, deferred compensation, retirement or supplemental retirement, severance, employment,change-in-control, collective bargaining, profit sharing, pension, vacation, cafeteria, dependent care, medical care, employee assistance program, education or tuition assistance programs, and each insurance and other similar fringe or employee benefit plan, policy, program, agreement or arrangement, in each case, for the benefit of current employees, directors or consultants (or any dependent or beneficiary thereof) of the Company or any Company Subsidiary or any of their ERISA Affiliates or with respect to which the Company or any Company Subsidiary has or may have any obligation or liability (whether actual or contingent). With respect to each material Company Benefit Plan, the Company has made available to Parent correct and complete copies of (or, to the extent no such copy exists, a description of), in each case, to the extent applicable, (i) all plan documents, summary plan descriptions, summaries of material modifications, and amendments related to such plans and any related trust agreement, (ii) the most recent Form 5500 Annual Report, (iii) the most recent audited financial statement and actuarial valuation, (iv) all material filings and correspondence with any Governmental Entity and (v) all material related agreements, insurance contracts and other agreements which implement each such Company Benefit Plan.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, each of the Company Benefit Plans has been operated and administered in accordance with its terms and in compliance with applicable Law, including ERISA, the Code and, in each case, the regulations thereunder. No liability under Title IV of ERISA has been incurred by the Company, the Company Subsidiaries or any of their respective ERISA Affiliates that has not been satisfied in full, and to the Company’s Knowledge no condition exists that is likely to cause the Company, the Company Subsidiaries or any of their ERISA Affiliates to incur any such liability. All material contributions or other material amounts payable by the Company or the Company Subsidiaries pursuant to each Company Benefit Plan in respect of current or prior plan years have been timely paid or accrued in accordance with GAAP or applicable international accounting standards. There are no pending, or to the Company’s Knowledge, threatened or anticipated claims, actions,
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investigations or audits (other than routine claims for benefits) by, on behalf of or against any of the Company Benefit Plans or any trusts related thereto that would result in a material liability.
(c) Within the last six (6) years, no Company Benefit Plan has been an employee benefit plan subject to Section 302 or Title IV of ERISA or Section 412, 430 or 4971 of the Code. None of the Company, its Subsidiaries or any of their respective ERISA Affiliates has incurred or is reasonably expected to incur any Controlled Group Liability that has not been satisfied in full, except, with respect to clause (iv) of the definition of Controlled Group Liability only, as would not result in a liability that is material to the Company and the Company Subsidiaries, taken as a whole.
(d) Neither the Company, its Subsidiaries nor any of their respective ERISA Affiliates has, at any time during the preceding six (6) years, contributed to, been obligated to contribute to or had any liability (including any contingent liability) with respect to any Multiemployer Plan or a plan that has two (2) or more contributing sponsors, at least two (2) of whom are not under common control, within the meaning of Section 4063 of ERISA.
(e) No Company Benefit Plan provides benefits, including death or medical benefits (whether or not insured), with respect to current or former employees or directors of the Company or the Company Subsidiaries beyond their retirement or other termination of service, other than coverage mandated by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or comparable U.S. state Law.
(f) (i) Each of the Company Benefit Plans that is intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination letter or opinion letter as to its qualification and (ii) to the Company’s Knowledge, there are no existing circumstances or any events that have occurred that would reasonably be expected to adversely affect the qualified status of any such plan. Each such favorable determination letter has been provided or made available to Parent.
(g) Neither the execution and delivery of this Agreement nor the consummation of the Transactions (either alone or in conjunction with any other event) will, except as required by the terms of this Agreement, (i) result in any payment (including severance and unemployment compensation, forgiveness of Indebtedness or otherwise) becoming due to any current or former director or any employee of the Company or any Company Subsidiary under any Company Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under any Company Benefit Plan, (iii) result in any acceleration of the time of payment, funding or vesting of any such benefits, (iv) result in any breach or violation of, or default under or limit the Company’s right to amend, modify, terminate or transfer the assets of, any Company Benefit Plan or (v) result in any payment (whether in cash or property or the vesting of property) to any “disqualified individual” (as such term is defined in Treasury RegulationsSection 1.280G-1) that would, individually or in combination with any other such payment, constitute an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).
(h) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Company Benefit Plan, if any, which is maintained outside of the United States (i) has been operated in conformance with the applicable statutes or governmental regulations and rulings relating to such plans in the jurisdictions in which such Company Benefit Plan is present or operates and, to the extent relevant, the United States, (ii) that is intended to qualify for special tax treatment meet all requirements for such treatment and (iii) that is intended to be funded or book-reserved are fully funded or book reserved, as appropriate, based upon reasonable actuarial assumptions.
(i) Each Company Benefit Plan has been maintained and operated in documentary and operational compliance in all materials respects with Section 409A of the Code or an available exemption therefrom.
(j) The Company is not a party to nor does it have any obligation under any Company Benefit Plan to compensate any Person for excise Taxes payable pursuant to Section 4999 of the Code or for additional Taxes payable pursuant to Section 409A of the Code.
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Section 4.11.3.11. Labor Matters.
(a) Neither the Company nor any Company Subsidiary is a party to, or bound by, any collective bargaining agreement or other Contract with a labor union, works council or labor organization. Neither the Company nor any Company Subsidiary is (or has during the past two (2) years been) subject to a material labor dispute, strike or work stoppage. There are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or, to the Company’s Knowledge, threatened involving employees of the Company or any Company Subsidiary.
(b) The Company and each Company Subsidiary are and have been since January 1, 20162017 in compliance with all applicable Law respecting labor, employment, immigration, fair employment practices, terms and conditions of employment, workers’ compensation, occupational safety, plant closings, mass layoffs, worker classification, sexual harassment, discrimination, exempt andnon-exempt status, compensation and benefits, wages and hours and the Worker Adjustment and Retraining Notification Act of 1988, as amended, except where suchnon-compliance has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) To the Company’s Knowledge, in the last five (5) years, (i) no allegations of sexual harassment have been made against any employee at the level of Vice President or above, and (ii) neither the Company nor any of the Company Subsidiaries have entered into any settlement agreements related to allegations of sexual harassment or misconduct by any employee at the level of Vice President or above.
Section 4.12.3.12. Tax Matters.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, theThe Company and the Company Subsidiaries have timely filed (taking into account any
extension of time within which to file) all material Tax Returns that are required to be filed by or with respect to any of them and all such Tax Returns are true, correct and complete in all respects;material respects.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect, theThe Company and the Company Subsidiaries have timely paid in full to the appropriate Governmental Entity all material Taxes required to be paid by any of them, and the financial statements of the Company and the Company Subsidiaries reflect adequate reserves, in accordance with GAAP, for all Taxes accrued but not yet paid by the Company or any Company Subsidiary as of the date thereof;them.
(c) The Company and the Company Subsidiaries have (i) timely paid, deducted, withheld and collected all material amounts required to be paid, deducted, withheld or collected by any of them with respect to any payment owing to, or received from, their employees, creditors, independent contractors, customers and other third parties (and have timely paid over any amounts so withheld, deducted or collected to the appropriate Governmental Entity) and (ii) have otherwise complied in all material respects with all applicable Laws relating to the payment, withholding, collection and remittance of Taxes (including information reporting requirements);.
(d) There is no (i) claim, litigation, audit, examination, investigation or other Proceedingproceeding pending or, to the Knowledge of the Company, threatened in writing with respect to any material Taxes or material Tax Returns of the Company or any Company Subsidiary, or (ii) deficiency for material Taxes that has been assessed by any Governmental Entity against the Company or any Company Subsidiary and that has not been fully satisfied by payment, in each case, except, solely with respect to any such claim, litigation, audit, examination, investigation, or other Proceeding arising after the date hereof, as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;payment.
(e) Neither the Company nor any Company Subsidiary has waived any statute of limitations with respect to any material Taxes or agreed to any extension of time with respect to a material amount of Tax assessment or deficiency (excluding extensions of time obtained by the Company or any Company Subsidiary in connection with extensions obtained in the ordinary course of business consistent with past practice for the filing of Tax Returns);, which waiver or extension is still in effect.
(f) Within the last two (2) years, neither the Company nor any Company Subsidiary has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355(a) of the Code;Code.
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(g) None of the Company or any Company Subsidiary (i) is a party to or bound by, or has any obligation under, any material Tax allocation, sharing, indemnity, or reimbursement agreement or arrangement (other than any customary Tax indemnification provisions in ordinary course commercial agreements not primarily related to Taxes, and other than any agreement or arrangement solely among the Company and the Company Subsidiaries) or (ii) has any material liability for Taxes of any Person (other than the Company or any Company Subsidiary) under Treasury RegulationsSection 1.1502-6 (or any similar provision of state, local, or non-U.S. Law) or as transferee or successor or otherwise by operation of Law;Law.
(h) There are no Liens in respect of or on account of material Taxes upon any property or assets of the Company or any Company Subsidiary, other than Permitted Liens;Liens.
(i) Within the last four (4)six (6) years, no claim has been made in writing received by the Company or any Company Subsidiary from any Tax authority in a jurisdiction where the Company or any Company Subsidiary has not filed Tax Returns of a particular type that the Company or any Company Subsidiary is or may be subject to material Tax by, or required to file Tax Returns with respect to material Taxes in, such jurisdiction;jurisdiction, in each case with respect to such particular type of Tax.
(j) Neither the Company nor any Company Subsidiary is bound with respect to the current or any future taxable period by any closing agreement (within the meaning of Section 7121(a) of the Code or any similar or analogous provision of state, local ornon-U.S. Law) or other ruling or similar written agreement with a Tax authority, in each case, with respect to material Taxes;Taxes.
(k) Neither the Company nor any Company Subsidiary has participated in any “listed transaction” within the meaning of Treasury RegulationsSection 1.6011-4(b)(2) (or any similar provision of state, local ornon-U.S. Law);.
(l) Neither the Company nor any Company Subsidiary will be required to include a material item of income (or exclude a material item of deduction) in any taxable period (or portion thereof) beginning after the Closing Date as a result of (i)(A) a change in or incorrect method of accounting occurring prior to the Closing Date, (ii)(B) a prepaid amount received (or deferred revenue recognized) or paid, prior to the Closing Date, or (iii)(C) an election under Section 108(i) of the Code (or any similar provision of state, local, ornon-U.S. Law). Neither the Company nor any Company Subsidiary has made an election pursuant to Section 965(h) of the Code; andCode.
(m) Neither the Company nor any Company Subsidiary is aware of the existence of any fact, or has taken or agreed to take any action, that would reasonably be expected to prevent or impede the Offer and the Merger,Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
Section 4.13.3.13. Litigation; Orders. As of the date hereof, there are no Proceedings pending or, to the Company’s Knowledge, threatened against the Company or any Company Subsidiary or any of their respective properties, rights or assets by or before, and there are no orders, judgments or decrees of or settlement agreements with, any Governmental Entity, that are or would reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
Section 4.14.3.14. Intellectual Property.
(a) Section 4.14(a)3.14(a) of the Company Disclosure Letter sets forth a complete and accurate list as of the date hereof of all: (i) patents and patent applications, (ii) registered trademarks, service marks, trade dress, logos, slogans, brand names, trade names and corporate names and applications therefor, (iii) domain name and social media handle registrations, and (iv) copyright registrations and applications for copyright registration, and (v) any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by the Company or any Company Subsidiary with any state, government or other public authority, in each case, that are owned by, filed in the name of, applied for by, or subject to a valid obligation of assignment to, the Company or any Company Subsidiary, whether wholly or jointly owned (the “Company Registered Intellectual Property”).
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(b) The Company solely owns, or is the exclusive licensee of,exclusively licenses, each item of material Company Intellectual Property free and clear of all Liens, other than Permitted Liens. Each material item of Company Registered Intellectual Property is subsisting and has not expired, been cancelled, or been abandoned, and to the Knowledge of the Company, each material item of Company Intellectual Property (other than applications for registrations) is valid and enforceable. As of the date hereof, no Proceeding (other than office actions in connection with the prosecution of applications) is pending or, to the Company’s Knowledge of the Company, threatened by or before any Governmental Entity, that challenges the legality, validity, enforceability, registration, use or ownership of any Company Intellectual Property.Property that is owned or purported to be owned by the Company or a Company Subsidiary or other Company Intellectual Property to the extent the Proceeding relates to the Company or a Company Subsidiary.
(c) Neither the Company nor any Company Subsidiary has granted or transferred (or is obligated to grant or transfer) to any Person or has permitted (or is obligated to permit) any Person (other than the licensor of exclusively licensed Company Intellectual Property) to retain any ownership interest, including any joint ownership interest, or any exclusive rights, in any Intellectual Property that is or was Company Intellectual Property and is material to the current conduct of the business of the Company and the Company Subsidiaries, taken as a whole.
(d) The Company and the Company Subsidiaries own, license, sublicense or otherwise possess legally enforceable and sufficient rights to use all Intellectual Property necessary to conduct the business of the Company and the Company Subsidiaries as currently conducted, except for such rights the absence of whichas would not be, either individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(e) As of the date hereof, no Proceedings are pending or, to the Company’s Knowledge, are threatened against the Company or any Company Subsidiary, alleging that the Company or any Company Subsidiary is infringing, misappropriating, diluting or otherwise violating the Intellectual Property of any Person. Except as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, (i) each Company Product and the conduct of the business of the Company and the Company Subsidiaries, as currently conducted, does not infringe, misappropriate, dilute, or otherwise violate any Intellectual Property of any Person or constitute unfair competition or unfair trade practices (and as conducted since January 1, 2016,31, 2017, has not infringed, violated, constituted, or misappropriated any Intellectual Property of any Person or constituted unfair competition or unfair trade practices), (ii) to the Company’s Knowledge, no Person is infringing, misappropriating, diluting, using in an unauthorized manner or otherwise violating any Company Intellectual Property, and (iii) since January 1, 2016,2017, neither the Company nor any Company Subsidiary has instituted or threatened to institute any Proceeding against any Person alleging that such Person is infringing, misappropriating, diluting, using in an unauthorized manner or otherwise violating any Company Intellectual Property.
(f) Except as would not reasonably be expected to, either individually or in the aggregate, be material to the Company and the Company Subsidiaries, taken as a whole: (i) in each case in which the Company or any Company Subsidiary has engaged or hired an employee, consultant or contractor (whether current or former) for the purpose of developing or creating any Intellectual Property for the Company or any Company Subsidiary, the Company or such Company Subsidiary has obtained, either by operation of Law or by valid assignment or transfer, exclusive ownership of all such Intellectual Property; (ii) the Company and each Company Subsidiary have taken commercially reasonable actions to maintain and protect all Company Intellectual Property that derives independent economic value, actual or potential, from not being known to other Persons, and all such Company Intellectual Property has been maintained in confidence in accordance with procedures that are customarily used in the industry to protect rights of like importance; and (iii) to the Company’s Knowledge, since January 1, 2016,2017, there has been no unauthorized disclosure of the Company Intellectual Property, or unauthorized disclosure by the Company or any Company Subsidiary of any third party Intellectual Property. Without limiting the generality of the foregoing, the Company and the Company Subsidiaries have, and enforce, a policy requiring each employee, consultant and independent contractor that has access to any such Intellectual Property to execute a
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confidentiality agreement that obligates such Person to maintain the confidentiality thereof, except where the failure to enforce such policy has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(g) Neither the Company nor any Company Subsidiary has used, modified, distributed, or made available any Software or databaseother technology under an Open Source License in a manner that would require any material Company Intellectual Property (i) to be disclosed, distributed, or distributedmade available in Source Code form, (ii) to be licensed for the purposes of preparing derivative works, (iii) to be licensed under terms that allow Company Products or (iii)portions thereof or interfaces therefor to be reverse engineered, reverse assembled or disassembled (other than by operation of applicable Law), or (iv) to be redistributed at no charge. The Company and the Company Subsidiaries are and have been in compliance in all material respects with all Open Source Licenses to which they are subject.
(h) Section 4.14(h) 3.14(h) of the Company Disclosure Letter contains a complete and accurate list of, and the Company has made available to Parent prior to the date hereof true and complete copies of, all Contracts in effect (or with respect to Contracts no longer in effect, to the extent of any surviving terms) pursuant to which the Company or any Company Subsidiary (i) grants any license, covenant not to assert, release, agreement not to enforce or prosecute, or other immunity to any Person under or to any patent rights or other material Company Intellectual Property, except Ordinary Course Licenses, or (ii) (otherother than the Ordinary Course Licenses and Open Source Licenses)Licenses, is granted a license, covenant not to assert, release, agreement not to enforcementenforce or prosecute, or immunity to or under any Person’s Intellectual Property, and, in the case ofclauses(i) and(ii), that is material to the conduct of the business of the Company and the Company Subsidiaries, taken as a whole (the foregoing in clause(i) and this clause(ii), together with the Ordinary Course Licenses and Open Source Licenses, the “IP Contracts”).
(i) The Company has made available to Parent prior to the date hereof a true and complete list of all material Company Products.
(j) Neither the execution and delivery of this Agreement nor the consummation of the Transactions will result in (i) a material breach, violation, modification, cancellation, termination, or suspension of any IP Contract that is material to the conduct of the business of the Company and the Company Subsidiaries, taken as a whole, (ii) the release of any Source Code that is Company Intellectual Property or other material proprietary or confidential Intellectual Property of the Company or any Company Subsidiary, (iii) the grant of (or requirement to grant) any license, covenant not to assert, release, agreement not to enforce or prosecute, or other immunity to or under any Company Intellectual Property (or (except as a result of the terms of a Contract to which Parent, but neither the Company nor a Company Subsidiary, is a party) any Intellectual Property of Parent) to any Person, except in the case of the Company Intellectual Property, as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, or (iv) the Company, any Company Subsidiary or (except as a result of the terms of a Contract to which Parent, but neither the Company nor a Company Subsidiary, is a party) Parent being the subject to anynon-compete or other material restriction on the operation or scope of their respective businesses except, in the case of the Company and the Company Subsidiaries, as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.business. All IP Contracts shall remain in full force and effect following the Closing in accordance with their terms, and, as of immediately after the Closing, the Company and the Company Subsidiaries will be entitled to exercise all of their respective rights under all IP Contracts to the same extent as prior to the Closing, in each case, except as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
(k) As of the date hereof, no Proceeding by any Person is pending against the Company or any Company Subsidiary, nor has any of them received any written claim or notice since January 1, 201631, 2017, with respect to any material warranty or material indemnity claim relating to any Company Products or with respect to the material breach of any material agreement (including any IP Contract) under which such Company Products have been made available, in each case, which remains unresolved.
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(l) To the Company’s Knowledge, no Software included in any Company Product contains any undisclosed disabling codes or instructions, “time bombs,” “Trojan horses,” “back doors,” “trap doors,” “worms,” viruses, bugs, faults, security vulnerabilities (as such terms are commonly understood in the software industry) or other Software routines or hardware components that (i) enable or assist any Person to access without authorization or disable or erase the Company Products, or (ii) otherwise significantly adversely affect the functionality of the Company Products, except as has not been and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
Section 4.15.3.15. Privacy and Data Protection.
(a) Since January 1, 2016,2017, the Company’s and each Company Subsidiary’s receipt, collection, monitoring, maintenance, hosting, creation, transmission, use, analysis, disclosure, storage, disposal and security, as the case may be, of Protected Information, and, to the Company’s Knowledge, any such activities performed or handled by authorized third parties on the Company’s or a Company Subsidiary’s behalf, have complied in all material respects with, and neither the execution and delivery of this Agreement nor the consummation of the Transactions (including the disclosure to and use by Surviving Company of Protected Information after the Closing) will result in the Company, any Company Subsidiary, the Surviving Corporation or the Surviving CompanyLLC being in material breach or material violation of (i) any Contracts to which the Company or any Company Subsidiary is a party, (ii) applicable Information Privacy and Security Laws, (iii) PCI DSS, as applicable (iv) all applicable policies and procedures adopted byto the Company or a Company Subsidiary, relating to Protected Information, including the(iv) any Privacy Statements, andor (v) allany consents andor authorizations that apply to the Protected Information that have been obtained by the Company or a Company Subsidiary. The Company and each Company Subsidiary have executed Business Associate Agreements (as such agreements are defined in HIPAA) with any Business Associate (as defined in HIPAA), in compliance with HIPAA. The Company and each Company Subsidiary have all material rights, authority, consents and authorizations necessary under applicable Information Privacy and Security Laws to receive, access, use and disclose the Protected Information in their possession or under their control in connection with the operation of their business. Since January 1, 2016,2017, the Company and each Company Subsidiary have posted, where required by Information Privacy and Security Laws, as applicable, privacy policies governing their use of Protected Information on thetheir websites made available by the Company and each Company Subsidiary, and the Company and each Company Subsidiary have complied in all material respects with such current and former published privacy policies.
(b) There has been no material (i) data security breach of or unauthorized access to any Company Products, or any material Company or Company Subsidiary systems, networks or information technology that transmits or maintains Protected Information;Information or (ii) incident involving the accidental or unlawful loss, of or
damage to, or unauthorized access, to or acquisition, modification, use or disclosure of any Protected Information owned, used, hosted, maintained or controlled by the Company or the Company Subsidiaries or, to Company’s Knowledge, no incident involving the loss, damage or unauthorized access, acquisition, modification, use or disclosure of any Protected Information hosted or maintained on behalf of the Company or the Company Subsidiaries, including any such unauthorized access, acquisition, modification, use or disclosure of Protected Information requiringthat would constitute a breach for which notification by the Company or any Company Subsidiary to individuals, Persons and/or Governmental Entities is required, or was made, under any applicable Information Privacy and Security Laws or Contracts to which the Company or a Company Subsidiary is a party. To the Company’s Knowledge, none of the Company’s or any Company Subsidiary’s material vendors, suppliers and subcontractors have (A) suffered any security breach that resulted in any unauthorized access to, modification of, use of, disclosure of or loss of or damage to any Protected Information, (B) materially breached any terms relating to Protected Information in any Contracts with the Company or any Company Subsidiary relating to Protected Information or (C) materially violated any applicable Information Privacy and Security Laws.
(c) Since January 1, 2016,2017, the Company and each Company Subsidiary have implemented monitoredand maintained in a commercially reasonable manner and maintained a written information security program, covering the Company and each Company Subsidiary, designed to (i) identify and address internal and external risks to the security or privacy of any proprietary or confidential information in their possession, including Protected Information, (ii) implement monitor and improvemaintain reasonable administrative, technical and physical safeguards to control these risks,
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and (iii) maintain notification procedures in compliance with applicable Information Privacy and Security Laws in the case of any breach of security or privacy compromising Protected Information. In each of 2017 and 2018, the Company and each of the Company Subsidiaries have performed security risk assessments and substantially addressed and remediated all critical or high risk threats and deficiencies identified in those security risk assessments.
(d) Since January 1, 2016,2017, no Person has (i) provided an audit request to the Company or a Company Subsidiary or made any written claim against the Company or a Company Subsidiary, or (ii) to the Company’s Knowledge, commenced any Proceeding, in each case, with respect to (A) any alleged violation of applicable Information Privacy and Security Laws by the Company, any Company Subsidiary or (with respect to services provided to or on behalf of the Company) any third party with whom the Company or any Company Subsidiary has entered into a Contract in connection with the collection, maintenance, storage, retention, use, processing, disclosure, transfer or disposal of Protected Information or (B) any of the Company’s or a Company Subsidiary’s privacy or data security practices relatingrelated to Protected Information, including any unlawful or accidental loss, of or damage to, or unauthorized access, acquisition, use, disclosure, modification or other misuse of any Protected Information maintained by or on behalf of the Company or the Company Subsidiaries. No Person has provided a written complaint to the Company or a Company Subsidiary, nor, to the Company’s Knowledge, to any third party, regarding the improper disclosure of Protected Health Information (as defined in HIPAA) by the Company or a Company Subsidiary.
(e) The Company and the Company Subsidiaries have in place disaster recovery plans, procedures and facilities that satisfy applicable Law in all material respects and the Company’s and the Company Subsidiaries’ obligations under Contracts with all customers, vendors, suppliers and subcontractors of the Company and the Company Subsidiaries, and the Company and the Company Subsidiaries are in compliance therewith in all material respects.
Section 4.16.3.16. Real Property; Assets. Neither the Company nor any Company Subsidiary owns any real property.Section 4.163.16 of the Company Disclosure Letter sets forth a list, as of the date hereof, of Contractsany Contract pursuant to which the Company or any Company Subsidiary leases, subleases or occupies any real property that is material to the Company or its Subsidiaries, in each case, other than Contracts for ordinary course arrangements at “shared workspace” or “coworking space” facilities that are not material (such Contracts, “Company Leases”). Neither the Company nor any Company Subsidiary has subleased, licensed or otherwise granted any Person the right to use or occupy any real property subject to a Company Lease or any portion thereof. Each Company Lease is valid, binding and in full force and effect, subject to the Enforceability Limitations, and no uncured default of a material nature on the part of the Company or, if applicable, any
Company Subsidiary or, to the Company’s Knowledge, the landlord thereunder exists with respect to any Company Lease. The Company or a Company Subsidiary has a good and valid leasehold interest in or contractual right to use or occupy, subject to the terms of the applicable Company Lease, each real property subject to the Company Leases necessary for the conduct of the business of the Company and the Company Subsidiaries as currently conducted, free and clear of all Liens, other than Permitted Liens. The Company or a Company Subsidiary has good and marketable title to, or a valid and binding leasehold or other interest in, all tangible personal property necessary for the conduct of the business of the Company and the Company Subsidiaries, taken as a whole, as currently conducted, free and clear of all Liens, other than Permitted Liens.
Section 4.17.3.17. Material Contracts.
(a) Except for this Agreement,Section 4.173.17(a) of the Company Disclosure Letter contains a complete and correct list, as of the date hereof, of each Contract described below in thisSection 4.17(a)3.17(a) under which the Company or any Company Subsidiary has any current or future rights, responsibilities, obligations or liabilities (in each case, whether contingent or otherwise) or to which the Company or any Company Subsidiary is a party or to which any of their respective properties or assets is subject, in each case as of the date hereof other than Company Benefit Plans listed onSection 4.10(a)3.10(a) of the Company Disclosure Letter (all Contracts of the type described in thisSection 4.17(a)3.17(a) (other than this Agreement), whether or not set forth onSection 4.173.17(a) of the Company Disclosure Letter, being referred to herein as the “Material Contract”):
(i) each Contract that limits in any material respect the freedom of the Company, any Company Subsidiary or any of their respective affiliates (including Parent and its affiliates after the AcceptanceFirst Effective Time) to
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compete or engage in any line of business or geographic region or with any Person or sell, supply or distribute any product or service or that otherwise has the effect of restricting the Company, the Company Subsidiaries or any of their respective affiliates (including Parent and its affiliates after the AcceptanceFirst Effective Time) from the development, marketing or distribution of products and services, in each case, in any geographic area;
(ii) each Contract that limits the freedom of the Company, or any Company Subsidiary or any of their respective affiliates to negotiate or, except for provisions requiring notice or consent to assignment by the counterparty thereto, consummate any of the Transactions;
(iii) any material partnership, joint venture, strategic alliance, limited liability company agreement (other than any such agreement solely between or among the Company and its wholly owned Subsidiaries) or similar material Contract;
(iv) each acquisition or divestiture Contract that contains representations, covenants, indemnities or other obligations (including “earnout” or other contingent payment obligations) that would reasonably be expected to result in the receipt or making by the Company or any Company Subsidiary of future payments in excess of $1,000,000;
(v) each Contract that gives any Person the right to acquire any assets of the Company or any Company Subsidiary (excluding ordinary course commitments to purchase Company Products) after the date hereof with consideration of more than $1,000,000;
(vi) Contractseach Contract of the type described inclauses(i) and(ii(ii)) ofSection 4.14(h)3.14(h);
(vii) other thanany Contract to put Source Code for any Company Product in the ordinary courseescrow with a third Person on behalf of business consistent with past practice,a licensee or contracting party, and any other Contract to provide Source Code for any Company Product to any third Person including any Contract to put such Source Code(other than an employee, contractor, agent or representative of the Company or a Company Subsidiary in escrowthe ordinary course of business consistent with a third Person on behalf of a licensee or contracting party;past practice);
(viii) any settlement agreement or similar Contract restricting in any material respect the operations or conduct of the Company, any Company Subsidiary or any of their respective affiliates (including Parent and its affiliates after the AcceptanceFirst Effective Time);
(ix) each Contract not otherwise described in any other subsection of thisSection 4.17(a)3.17(a) pursuant to which the Company or any Company Subsidiary is obligated to pay, or entitled to receive, payments in excess of $5,000,000 in the twelve (12) month-month period following the date hereof;
(x) any Contract that obligates the Company or any Company Subsidiary to make any capital investment or capital expenditure outside the ordinary course of business consistent with past practice and in excess of $1,000,000;
(xi) each Contract that is a Material Customer Agreement, a Material Supplier Agreement or a Material Reseller Agreement;
(xii) each Contract that grants any right of first refusal or right of first offer or that limits the ability of the Company, any Company Subsidiary or any of their respective affiliates (including Parent and its affiliates after the AcceptanceFirst Effective Time) to own, operate, sell, transfer, pledge or otherwise dispose of any businesses or material assets;
(xiii) each Contract that contains any exclusivity rights or “most favored nations” provisions or minimum use, supply or display requirements that are binding on the Company or its affiliates (including Parent and its affiliates after the AcceptanceFirst Effective Time);
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(xiv) each non-ordinary course Contract that contains any material indemnification obligations by the Company or any Company Subsidiary;
(xv) each Company Government Contract pursuant to which the Company receives annual revenue in excess of $1,000,000;
(xvi) each Company Lease;
(xvii) each Contract relating to outstanding or potential Indebtedness (or commitments in respect thereof) of the Company or theany Company SubsidiariesSubsidiary (whether incurred, assumed, guaranteed or secured by any asset) in an amount in excess of $500,000 or relating to any Liens on the assets of the Company or any Company Subsidiary;
(xviii) each Contract governing or amending, modifying, supplementing or otherwise relating to the Convertible Notes Indenture or the Convertible Notes Hedge Obligations;
(xix) each Contract involving other derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements) for which the aggregate exposure (or aggregate value) to the Company and the Company Subsidiaries is reasonably expected to be in excess of $500,000 or with a notional value in excess of $500,000;
(xix)(xx) each Contract between the Company or any Company Subsidiary, on the one hand, and any officer, director or affiliate (other than a wholly owned Company Subsidiary) of the Company or any Company Subsidiary, any beneficial owner, directly or indirectly, of more than five percent (5%) of the number or voting power of the shares of Company Common Stock or any of their respective “associates” or “immediate family” members (as such terms are defined inRule 12b-2 andRule 16a-1 of the Exchange Act), on the other hand, including any Contract pursuant to which the Company or any Company Subsidiary has an obligation to indemnify such officer, director, affiliate, beneficial owner, associate or immediate family member; and
(xx)(xxi) any Contract not otherwise described in any other subsection of thisSection 4.17(a)3.17(a) that would constitute a “material contract” (as such term is defined in Item 601(b)(10) of RegulationS-K of the SEC) with respect to the Company.
(b) True and complete copies of each Material Contract in effect as of the date hereof have been made available to Parent or publicly filed with the SEC prior to the date hereof. NeitherNone of the Company noror any Company Subsidiary is in breach of or default under the terms of any Material Contract, except as has not had
and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the Company’s Knowledge, as of the date hereof, no other party to any Material Contract is in breach of or default under the terms of any Material Contract where such breach or default has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Material Contract is a valid, binding and enforceable obligation of the Company or the Company Subsidiary which is party thereto and, to the Company’s Knowledge, of each other party thereto, and is in full force and effect, subject to the Enforceability Limitations.
(c) TrueThe Company and complete copies of eachthe Company Subsidiaries have not delivered or granted, agreed to deliver or grant, or entered into any Company Government Contract Bid that if accepted, would be a Materialrequires the delivery or granting to any Governmental Entity of (i) any Source Code for the Company Products; (ii) unlimited or government purpose rights (as defined in FAR Section 52.227-14, DFARS Section 252.227-7013 or 252.227-7014 or similar clauses) in the material Company Intellectual Property or Company Products or any portion thereof in which the Company could have legally asserted more restrictive rights under applicable regulations or contract clauses; or (iii) ownership of any portion of material Company Intellectual Property or Company Products. The Company
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and Company Subsidiaries have taken reasonable steps under any Company Government Contract and applicable Law to assert, protect and support its rights in material Company Intellectual Property and Company Products, so that no more than the minimum rights or licenses required under applicable Laws and the terms of the type specified inSection 4.17(a)(xv) (a “Materialsuch Company Government Bid”)Contracts will have been made available to Parent priorprovided to the date hereof.applicable Governmental Entity and/or counterparty to such Company Government Contract.
(d) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, (i) each Company Government Contract is binding on the Company or the Company Subsidiary party thereto and is in full force and effect, subject to the Enforceability Limitations, (ii) no Company Government Contract or offer, quotation, bid or proposal to sell products or services made by the Company or any Company Subsidiary to any Governmental Entity or any prime contractor (a “Government Contract Bid”) is the subject of bid or award protest proceedings resulting from the conduct of the Company or any of its Subsidiaries, and (iii) neither the Company nor any Company Subsidiary is in breach of or default under the terms of any Company Government Contract. The Company and the Company Subsidiaries are in compliance, and have been in compliance since January 1, 2016,31, 2017, in all material respects with the terms and conditions of each Company Government Contract and Government Contract Bid, including all clauses, provisions and requirements incorporated expressly by reference or by operation of Law therein. Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2016,31, 2017, (A) all material facts set forth or acknowledged by any representations, certifications or statements made or submitted by an authorized representative of the Company or a Company Subsidiary in connection with any Company Government Contract or Government Contract Bid were true, accurate and complete as of the date of submission, and (B) neither any Governmental Entity nor any prime contractor or subcontractor has notified the Company or any Company Subsidiary in writing that the Company or any Company Subsidiary has, or is alleged to have, breached or violated in any material respect any Law, representation, certification, disclosure, clause, provision or requirement pertaining to any Company Government Contract or Government Contract Bid. Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2016, no costs incurred by the Company or any Company Subsidiary pertaining to any Company Government Contract have been proposed for disallowance or deemed finally disallowed in writing by a Governmental Entity, and31, 2017, no material payment due to the Company or any Company Subsidiary pertaining to any Company Government Contract has been withheld or set off, nor has any claim been made to withhold or set off any such payment.payment, and to the Company’s Knowledge, there is no basis for a price adjustment, refund or demand for payment under any such Company Government Contract.
(e) Except as has not been, and would not reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole, since January 1, 2016,31, 2017, (i) none of the Company, any Company Subsidiary or any of their respective Principals (as defined in Federal Acquisition Regulation52.209-5) has been debarred, suspended or excluded, or to the Company’s Knowledge, proposed for debarment, suspension or exclusion, from participation in or the award of Contracts or subcontracts for or with any Governmental Entity or doing business with any Governmental Entity, (ii) none of the Company or any Company Subsidiary has received any request to show cause (excluding for this purpose ineligibility to bid on certain Contracts due to generally applicable bidding requirements), (iii) none of the Company or any Company Subsidiary, to the Company’s Knowledge, is the subject of a finding ofnon-compliance, nonresponsibility or ineligibility for government contracting, (iv) none of the Company or any Company Subsidiary is for any reason listed on the List of Parties Excluded from Federal Procurement and Nonprocurement Programs, (v) neither the Company nor any Company Subsidiary, nor any of their respective directors, officers, employees or Principals (as defined in Federal Acquisition Regulation52.209-5), nor to the Company’s Knowledge, any consultants or agents of the Company or any Company Subsidiary, is or has been under administrative, civil or criminal investigation, indictment or information by any Governmental Entity with
respect to the award or performance of any Company Government Contract, the subject of any actual or, to the Company’s Knowledge, threatened in writing, “whistleblower” or “qui tam” lawsuit, or audit (other than a routine contract audit) or investigation of the Company or any Company Subsidiary with respect to any Company Government Contract, including any alleged material irregularity, misstatement or omission arising thereunder or
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relating thereto, and to the Company’s Knowledge, there is no basis for any such investigation, indictment, lawsuit or audit and (vi) neither the Company nor any Company Subsidiary has made any voluntary disclosure (A) to any Governmental Entity with respect to any alleged material irregularity, misstatement, omission, fraud or price mischarging, or other violation of Law, arising under or relating to a Company Government Contract or (B) under the Federal Acquisition Regulation mandatory disclosure or payment provisions to any Governmental Entity and, to the Company’s Knowledge, there are no facts that would require mandatory disclosure thereunder.
Section 4.18.3.18. Environmental Matters. Except as have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) neither the Company nor any Company Subsidiary is in violation of any Environmental Law, (b) none of the properties owned or occupied by the Company or any Company Subsidiary is contaminated with any Hazardous Substance and (c) the Company and the Company Subsidiaries have all permits, licenses and other authorizations required under any Environmental Law and the Company and the Company Subsidiaries are in compliance with such permits, licenses and other authorizations. As of the date hereof, no Proceeding is pending, or to the Company’s Knowledge, threatened, concerning or relating to the operations of the Company or any Company Subsidiary that seeks to impose, or that is reasonably likely to result in the imposition of, any material liability arising under any Environmental Law upon the Company or any Company Subsidiary.
Section 4.19.3.19. Customers; Suppliers; Resellers;Suppliers; Resellers; Government Entities.
(a) Section 4.19(a)3.19(a) of the Company Disclosure Letter sets forth a list of the top ten (10)twenty-five (25) customers of the Company and the Company Subsidiaries that have a Contract withbased on revenue received by the Company or aany Company Subsidiary based on Contract Revenue forduring the last twelve (12) months ended MarchOctober 31, 20192020 (each, a “Material Customer” and each such contract,Contract with a “MaterialMaterial Customer, Agreement”a “Material Customer Agreement”). As of the date hereof, neither the Company nor any Company Subsidiary has received any written notice from any Material Customer that such Material Customer shall not continue as a customer of the Company or that such Material Customer intends to terminate or materially and adversely modify existing Contracts with the Company or the Company Subsidiaries.
(b) Section 4.19(b)3.19(b) of the Company Disclosure Letter sets forth a list of the suppliers and vendors of the Company and the Company Subsidiaries with whom the Company and the Company Subsidiaries have spent at least $5,000,000$2,000,000 during the last twelve (12) months ended MarchOctober 31, 20192020 (each, a “Material Supplier” and each Contract pursuant to which the Company or a Company Subsidiary paid those amounts to the applicable Material Supplier, a “Material Supplier Agreement”). As of the date hereof, neither the Company nor any Company Subsidiary has received any written notice from any Material Supplier that such supplier shall not continue as a supplier to the Company or that such supplier intends to terminate or materially and adversely modify existing Contracts with the Company or the Company Subsidiaries.
(c) Section 4.19(c)3.19(c) of the Company Disclosure Letter sets forth a list of each technology vendor, reseller, OEM, independent Softwaresoftware vendor and distributor, in each case, of Company Products pursuant to which the Company or any Company Subsidiary received Contract Revenuehas had billings during the last twelve (12) months ended MarchOctober 31, 20192020, in excess of $2,000,000$1,000,000 (each, a “Material Reseller” and each Contract with each Material Reseller, a “Material Reseller Agreement”). As of the date hereof, neither the Company nor any Company Subsidiary has received any written notice from any Material Reseller that such Material Reseller shall not continue as a technology vendor, reseller, OEM, independent Softwaresoftware vendor and distributor, in each case, of Company Products, as applicable, to the Company or that such Material Reseller intends to terminate or materially and adversely modify existing Contracts with the Company or the Company Subsidiaries.
(d) Section 4.19(d)3.19(d) of the Company Disclosure Letter sets forth a list (and the associated revenues for the last twelve (12) months ended MarchOctober 31, 2019)2020) of each (i) Governmental Entity of any jurisdiction in the
United States (or any prime contractor or subcontractor of any Governmental Entity of any jurisdiction in the United States in its capacity as such) from which the Company and the Company Subsidiaries received Contract Revenuehad had billings in
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excess of $1,000,000 during the last twelve (12) months ended MarchOctober 31, 20192020, and (ii) each Governmental Entity of any jurisdiction outside the United States (or any prime contractor or subcontractor of any Governmental Entity of any jurisdiction outside the United States in its capacity as such) from which the Company or any Company Subsidiary has received Contract Revenuehad billings in excess of $1,000,000 during the last twelve (12) months ended MarchOctober 31, 2019.2020.
Section 4.20.3.20. Insurance. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) all current insurance policies and insurance Contracts of the Company and the Company Subsidiaries are in full force and effect and are valid and enforceable and cover against the risks as are customary for companies of similar size in the same or similar lines of business and (b) all premiums due thereunder have been paid. Neither the Company nor any Company Subsidiary has received notice of cancellation or termination with respect to any current third-party insurance policies or insurance Contracts (other than in connection with normal renewals of any such insurance policies or Contracts) where such cancellation or termination would reasonably be expected to be, individually or in the aggregate, material to the Company and the Company Subsidiaries, taken as a whole.
Section 4.21.3.21. Information Supplied. The information relating to the Company and the Company Subsidiaries to the extent supplied by or on behalf the Company and the Company Subsidiaries to be contained in, or incorporated by reference in (a) the Offer Documents, theregistration statement on FormS-4 andto be filed with theSchedule 14D-9 (and SEC by Parent in connection with the Parent Share Issuance (including any amendmentamendments or supplement thereto)supplements, the “Registration Statement”) will not, on the date the Offer Documents and theSchedule 14D-9 are first mailed to the Company Stockholders or at the time the FormS-4 (and any amendment or supplement thereto) is filed with the SEC,Registration Statement is declared effective by the SEC, is first mailed to Company Stockholders or on the date that the Offer is consummated, contain any untrue statement of any material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading and (b) the Registration Statement and the definitive proxy statement/prospectus to be sent to the Company Stockholders in connection with the First Merger and the Transactions (including any amendments or supplements, the “Proxy Statement/Prospectus”) will not, at the date the Proxy Statement/Prospectus is first mailed to the Company Stockholders or at the time of the Company Stockholders Meeting, 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, at the time and in light of the circumstances under which they were made, not false or misleading. TheSchedule 14D-9 Proxy Statement/Prospectus will comply in all material respects as to form with the requirements of the Exchange Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing provisions of thisSection 4.213.21, no representation or warranty is made by the Company with respect to information or statements made or incorporated by reference in the Offer Documents,Registration Statement or the FormS-4 or theSchedule 14D-9,Proxy Statement/Prospectus, which information or statements were not supplied by or on behalf of the Company.
Section 4.22.3.22. Opinion of Financial Advisor. The Company Board of Directors has received (a) an opinion of Goldman Sachs & Co. LLC (“Goldman Sachs”)Qatalyst Partners LP to the effect that, as of the date of such opinion, and based upon and subject to the various mattersassumptions, qualifications, limitations and limitationsother matters set forth therein, the OfferMerger Consideration to be paidreceived pursuant to, and in accordance with, the terms of this Agreement by the holders of shares of Class A Common Stock, in their capacity as holders of Class A Common Stock (other than Parent or any affiliate of Parent), is fair, from a financial point of view, to such holders and (b) an opinion letter of Goldman Sachs & Co. LLC, dated the date of this Agreement, that, as of such date and subject to certain assumptions, limitations, qualifications and other matters set forth therein, the Merger Consideration is fair from a financial point of view to the holders (other than Parent and its affiliates) of Company Common Stock (other than holdersStock. The Company shall, following the execution of Cancelled Shares and Converted Shares), taken in the aggregate, pursuant to this Agreement is fair, from a financial point of view, to such holders. A writtenby all Parties, furnish an accurate, complete and confidential copy of sucheach of the aforementioned opinion will be providedletters to Parent promptly following receipt by the Companysolely for informational purposes only.purposes.
Section 4.23.3.23. State Takeover Statutes; Anti-Takeover Laws. Assuming the accuracy of Parent’s, Merger Sub I’s and Purchaser’sMerger Sub II’s representations and warranties set forth inSection 5.144.14, the Company Board of Directors has taken all action necessary to render inapplicable to this Agreement and the Transactions (including, for the avoidance of doubt, the LetterVoting Agreement) Section 203 of the DGCL and any similar provisions in the Company Governing Documents or any other Takeover Statute. The Company has no rights plan, “poison-pill” or other
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comparable agreement designed to have the effect of delaying, deferring or discouraging any Person from acquiring control of the Company.
Section 4.24.3.24. Related Party Transactions. Except as set forth in the Company SEC Documents, there are no transactions, agreements, arrangements or understandings between the Company or any Company Subsidiary, on the one hand, and any affiliate (including any officer or director) thereof, but not including any wholly owned
Subsidiary of the Company, on the other hand, that are required to be disclosed under Item 404 of RegulationS-K of the SEC that are not so disclosed.
Section 4.25.3.25. Finders and Brokers. Other than Qatalyst Partners LP and Goldman Sachs & Co. LLC, neither the Company nor any Company Subsidiary has employed or engaged any investment banker, broker or finder in connection with the Transactions who is entitled to any fee or any commission in connection with this Agreement or upon or as a result of the consummation of the OfferMergers; provided that any amounts due to Qatalyst Partners LP and Goldman Sachs & Co. LLC in connection with this Agreement or upon or as a result of the Merger.consummation of the Mergers shall be paid immediately prior the Closing. A true and complete copy of the engagement letter with each of Qatalyst Partners LP and Goldman Sachs & Co. LLC has been made available to Parent prior to the date hereof.
Section 4.26.3.26. No Other Representations. Except for the representations and warranties contained inArticle VIV and the certificate delivered pursuant to Section 7.3(c), the Company acknowledges that none of Parent, Purchaser,Merger Sub I, Merger Sub II or any of their respective Representatives or any other Person makes, and the Company acknowledges that it has not relied upon or otherwise been induced by, any other express or implied representation or warranty with respect to Parent, or PurchaserMerger Sub I, Merger Sub II or any of their respective Subsidiaries or with respect to any other information provided or made available to the Company or its Representatives in connection with the Transactions, including any information, documents, projections, forecasts or other material made available to the Company or to the Company’s Representatives in certain “data rooms” or management presentations in expectation of the Transactions or the accuracy or completeness of any of the foregoing, except, in each case for the representations and warranties contained inArticle VIV and the certificate delivered pursuant to Section 7.3(c). Without limiting the generality of the foregoing, the Company acknowledges that, except as may be expressly provided inArticle V IV and the certificate delivered pursuant to Section 7.3(c), no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospective information that may have been made available, directly or indirectly, to the Company, any of its Representatives or any other Person.
REPRESENTATIONS AND WARRANTIES
OF PARENT, MERGER SUB I AND PURCHASERMERGER SUB II
Except as disclosed in (x) any publicly available Parent SEC Document filed or furnished by Parent with the SEC since JanuaryFebruary 1, 20172019, and publicly available prior to the date of this Agreement (including any exhibits and other information incorporated by reference therein but excluding any predictive, cautionary or forward looking disclosures contained under the captions “risk factors,” “forward looking statements” or any similar precautionary sections and any other disclosures contained therein that are predictive, cautionary or forward looking in nature) or (y) the applicable section of the disclosure letter delivered by Parent to the Company immediately prior to the execution of this Agreement (the “Parent Disclosure Letter”) (it being understood that any information set forth in one section or subsection of the Parent Disclosure Letter shall be deemed to apply to and qualify (or, as applicable, a disclosure for purposes of) the representation and warranty set forth in this Agreement to which it corresponds in number and, whether or not an explicit reference or cross-reference is made, each other representation and warranty set forth in thisArticle VIV for which it is reasonably apparent on its face that such information is relevant to such other section), Parent, Merger Sub I and PurchaserMerger Sub II represent and warrant to the Company as set forth below.
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Section 5.1.4.1. Qualification, Organization, etc. Each of Parent, Merger Sub I and PurchaserMerger Sub II is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Except as would not be material to Parent and Parent Subsidiaries, taken as a whole, each Parent Subsidiary is a legal entity duly organized and validly existing under the Laws of its respective jurisdiction of organization. Except as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, each of Parent and the Parent Subsidiaries has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. Each of Parent, PurchaserMerger Sub II, Merger Sub II and the other Parent Subsidiaries is qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or, where relevant, in good
standing, (1) has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect and (2) has not had and would not, either individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Parent, Merger Sub I or PurchaserMerger Sub II to consummate the Transactions, including the Offer and the Merger,Mergers, prior to the Outside Date. Parent has filed with the SEC, prior to the date hereof, complete and accurate copies of the certificate of incorporation and bylaws of Parent as amended to the date hereof (the “Parent GoverningDocuments”). The Parent Governing Documents are in full force and effect and Parent is not in violation of the Parent Governing Documents.
Section 5.2.4.2. Capitalization.
(a) The authorized capital stock of Parent consists of 1,600,000,000 shares of Parent Common Stock and 5,000,000 shares of preferred stock, par value $0.001 per share (“Parent Preferred Stock”). As of June 6, 2019November 27, 2020 (the “Parent Capitalization Date”): (i) (A) 776,544,434915,444,634 shares of Parent Common Stock were issued and outstanding (including 1,761,1851,132,837 restricted shares of Parent Common Stock granted under Parent Equity Plans)Stock), (B) 91,87293,059 shares of Parent Common Stock were held in Parent’s treasury, (C) options granted under Parent Equity Plans to purchase 29,180,44624,254,914 shares of Parent Common Stock were outstanding with a weighted average exercise price per share of $93.27,$119.06, and (D) restricted stock unit awards granted under Parent Equity Plans covering 25,721,60226,877,732 shares of Parent Common Stock (assuming any applicable performance goals are deemed satisfied at target) were outstanding; (ii) 43,394,95081,100,145 shares of Parent Common Stock were reserved for future issuance pursuant to the Parent Equity Plans; (iii) 4,066,7478,855,411 shares of Parent Common Stock were reserved for future issuance pursuant to Parent’s 2004 Employee Stock Purchase Plan; and (iv) no shares of Parent Preferred Stock were issued and outstanding. All of the outstanding shares of Parent Common Stock are, and all shares of Parent Common Stock reserved for issuance as described above shall be, when issued in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable and free of preemptive rights.
(b) Except as set forth inSection 5.2(a)4.2(a) and other than the shares of Parent Common Stock that have become outstanding after the Parent Capitalization Date that were reserved for issuance as set forth inSection 5.2(a)4.2(a), as of the date hereof: (i) Parent does not have any shares of capital stock or other equity interests issued or outstanding and (ii) there are no outstanding subscriptions, options, warrants, puts, calls, exchangeable or convertible securities or other similar rights, agreements or commitments or any other Contract to which Parent or any Parent Subsidiary is a party or is otherwise bound obligating Parent or any Parent Subsidiary to (A) issue, transfer or sell, or make any payment with respect to, any shares of capital stock or other equity interests of Parent or any Parent Subsidiary or securities convertible into, exchangeable for or exercisable for, or that correspond to, such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, put, call, exchangeable or convertible securities or other similar right, agreement or commitment or (C) redeem or otherwise acquire any such shares of capital stock or other equity interests.
(c) Neither Parent nor any Parent Subsidiary has outstanding bonds, debentures, notes or other similar obligations, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of Parent on any matter.
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(d) There are no voting trusts or other agreements, commitments or understandings to which Parent or any Parent Subsidiary is a party with respect to the voting of the capital stock or other equity interests of Parent or any Parent Subsidiary.
(e) The authorized capital stock of PurchaserMerger Sub I consists solely of 1,000 shares of common stock, par value $0.001 per share, all of which are validly issued and outstanding. All of the issued and outstanding capital stock of PurchaserMerger Sub I is, and as of the Acceptance Time and theFirst Effective Time shall be, directly or indirectly owned by Parent.
(f) The authorized capital stock of Merger Sub II consists solely of 100 limited liability company units, all of which are validly issued and outstanding. All of the issued and outstanding capital stock of Merger Sub II is, and as of the Second Effective Time shall be, directly or indirectly owned by Parent.
Section 5.3.4.3. Corporate Authority.
(a) Parent, Merger Sub I and PurchaserMerger Sub II have all requisite corporate power and authority to execute and deliver this Agreement and to consummate the Transactions, including the Offer and the Merger.Mergers. The execution and delivery of this Agreement, the performance of Parent’s, Merger Sub I’s and the LetterMerger Sub II’s obligations under this Agreement and the consummation of the Transactions and the transactions contemplated by the Letter Agreement have been duly and validly authorized by all necessary corporate action of each of Parent, Merger Sub I and PurchaserMerger Sub II and no other corporate proceedings (pursuant to the Parent Governing Documents or otherwise) on the part of Parent, Merger Sub I or PurchaserMerger Sub II are necessary to authorize the performance of Parent’s, Parent, Merger Sub I’s or Merger Sub II’s obligations under this Agreement or the consummation of, and to consummate, the Transactions, or the transactions contemplated by the Letter Agreement, except, with respect to the Merger,Mergers, for the filing of the applicable Certificate of Merger with the Secretary of State of the State of Delaware.Delaware and, if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, after the First Merger, the vote or consent of Parent, as the sole stockholder of the Surviving Corporation, necessary to approve the Mergers and adopt this Agreement.
(b) No vote or consent of the holders of any class or series of capital stock of Parent or the holders of any other securities of Parent (equity or otherwise) is necessary to adopt this Agreement, or to approve the Offer, the MergerMergers or the other Transactions. The vote or consent of Intermediate LLC,Parent, as the sole stockholder of Purchaser,Merger Sub I, is the only vote or consent of the holders of any class or series of capital stock of PurchaserMerger Sub I, and the vote or consent of Parent, as the sole member of Merger Sub II and, if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7, after the First Merger, as the sole stockholder of the Surviving Corporation, necessary to approve the Offer and the MergerMergers and adopt this Agreement.
(c) This Agreement has been duly and validly executed and delivered by each of Parent, Merger Sub I and PurchaserMerger Sub II and, assuming this Agreement constitutes the valid and binding agreement of the Company, constitutes the valid and binding agreement of Parent, Merger Sub I and Purchaser,Merger Sub II, is enforceable against each of Parent, Merger Sub I and PurchaserMerger Sub II in accordance with its terms, subject to the Enforceability Limitations.
Section 5.4.4.4. Governmental Consents; No Violation.
(a) Other than in connection with or in compliance with (i) the DGCL and the DLLCA, (ii) the filing of the Offer Documents, the Schedule14D-9Proxy Statement/Prospectus and the FormS-4Registration Statement with the SEC and any amendments or supplements thereto and declaration of effectiveness of the FormS-4,Registration Statement and the mailing of the Proxy Statement/Prospectus, (iii) the Securities Act, (iv) the Exchange Act, (v) applicable state securities, takeover and “blue sky” laws, (vi) the HSR Act and any other requisite clearances or approvals under any other applicable requirements of other AntitrustRegulatory Laws of the jurisdictions set forth on Section 3.4(a) of the Company Disclosure Letter and (vii) any applicable requirements of the NYSE, no authorization, permit, notification to, consent or approval of, or filing with, any Governmental Entity is necessary or required, under applicable Law, for the consummation by Parent, Merger Sub I and PurchaserMerger Sub II of the Transactions, except for such authorizations, permits, notifications, consents, approvals or filings that, if not obtained or made, would not reasonably be
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expected to have, individually or in the aggregate, (1) a Parent Material Adverse Effect or (2) a material adverse effect on the ability of Parent, Merger Sub I or PurchaserMerger Sub II to consummate the Transactions, including the Offer and the Merger,Mergers, prior to the Outside Date.
(b) The execution and delivery by Parent, Merger Sub I and PurchaserMerger Sub II of this Agreement do not, and, except as described inSection 5.4(a)4.4(a), the performance and the consummation of the Transactions and compliance with the provisions hereof (and, in the case ofSection 5.4(b)(ii)(A) andSection 5.4(b)(iii) only, the consummation of the transactions contemplated by the Letter Agreement) will not (i) conflict with or result in any violation or breach of, or default or change of control (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, modification, cancellation, first offer, first refusal or acceleration of any obligation or to the loss of a benefit under any Contract binding upon Parent or any Parent Subsidiary or to which any of them are a party or by which or to which any of their respective properties, rights or assets are bound or subject, or result in the creation of any Lien upon any of the properties, rights or assets of Parent or any Parent Subsidiary, other than Permitted Liens, (ii) conflict with or result in any violation of any provision of (A) the Parent Governing Documents or (B) the organizational or governing documents of any Parent Subsidiary or (iii) conflict with or violate any Laws applicable to Parent or any Parent Subsidiary or any of their respective properties, rights or assets, other than in the case ofclauses (i), (ii)(B) and(iii), any such violation, breach, conflict, default, termination, modification, cancellation, acceleration, right, loss or Lien that has not had and would not reasonably be expected to have, individually or in the aggregate, (1) a Parent Material Adverse Effect or (2) a material adverse effect on the ability of Parent, Merger Sub I or PurchaserMerger Sub II to consummate the Transactions, including the Offer and the Merger,Mergers, prior to the Outside Date.
Section 5.5.4.5. SEC Reports and Financial Statements.
(a) Since February 1, 2016,2019, Parent has timely filed or furnished all forms, statements, schedules, documents and reports required to be filed or furnished prior to the date hereof by it with the SEC (such forms, statements, schedules, documents and reports the “Parent SEC Documents”). As of their respective filing dates, or, if amended prior to the date hereof, as of the date of (and giving effect to) the last such amendment, the Parent SEC Documents complied in all material respects with the applicable requirements of the Sarbanes-Oxley Act, the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder and the listing and corporate governance rules and regulations of the NYSE, and none of the Parent SEC Documents contained (or, with respect to Parent SEC Documents filed after the date hereof, will contain) any untrue statement of a material fact or omitted (or with respect to Parent SEC Documents filed after the date hereof, will omit) to state any material fact required to be stated therein or necessary to make the statements therein, at the time and in light of the circumstances under which they were made, not misleading. Since February 1, 2016,2019, neither Parent nor any Parent Subsidiary has received from the SEC or any other Governmental Entity any written comments or questions with respect to any of the Parent SEC Documents (including the financial statements included therein) that are not resolved, or, as of the date hereof, has received any written notice from the SEC or other Governmental Entity that such Parent SEC Documents (including the financial statements included therein) are being reviewed or investigated, and, to Parent’s Knowledge, there is not, as of the date hereof, any investigation or review being conducted by the SEC or any other Governmental Entity of any Parent SEC Documents (including the financial statements included therein).
(b) The consolidated financial statements (including all related notes and schedules) of Parent included or incorporated by reference in the Parent SEC Documents when filed or, if amended prior to the date hereof, as of the date of (and giving effect to) the last such amendment, complied in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, in each case in effect at the time of such filing, and fairly present in all material respects the consolidated financial position of Parent and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited quarterly financial statements, to normalyear-end audit adjustments and any other adjustment described therein permitted by the rules and regulations of the SEC and to the absence of notes) in conformity with GAAP applied on a consistent basis during the periods involved (subject, in the case of the unaudited quarterly
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financial statements, to normalyear-end audit adjustments and any other adjustment described therein permitted by the rules and regulations of the SEC and to the absence of notes).
(c) Parent is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended. Each required form, report and document containing financial statements that has been filed with or submitted to the SEC was accompanied by any certifications required to be filed or submitted by Parent’s principal executive officer and principal financial officer pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, such certification complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act. Neither Parent nor, to the Knowledge of Parent, any of its executive officers has received written notice from any Governmental Entity challenging or questioning the accuracy, completeness, form or manner of filing of such certifications.
(d) Neither Parent nor any Parent Subsidiary is a party to, or has any Contract to become a party to, any joint venture,off-balance sheet partnership or any similar Contract, including any Contract relating to any transaction or relationship between or among Parent or any Parent Subsidiary, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or anyoff-balance sheet arrangements (as defined in Item 303(a) of RegulationS-K of the SEC), in any such case, where the purpose of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, Parent in Parent’s published financial statements or any Parent SEC Document.
Section 5.6.4.6. Internal Controls and Procedures. Parent has established and maintains, and at all times since January 31, 20162017 has maintained, disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, ofRule 13a-15 under the Exchange Act) as required byRule 13a-15 under the Exchange Act, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Parent’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by Parent in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to Parent’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. Since January 31, 2016,2017, Parent’s principal executive officer and its principal financial officer have disclosed to Parent’s auditors and the audit committee of Parent’s board of directors (the material circumstances of which (if any) and significant facts learned during the preparation of such disclosure have been made available to the Company prior to the date hereof) (i)(a) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, (ii)(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting and (iii)(c) any written claim or allegation regarding clauses (i)clause (a) or (ii)(b). Since January 31, 2016 through the date hereof,2017, neither Parent nor any Parent Subsidiary has received any material, unresolved complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of Parent or any Parent Subsidiary or their respective internal accounting controls.
Section 5.7.4.7. No Undisclosed Liabilities. Neither Parent nor any Parent Subsidiary has any liabilities of any nature, whether or not accrued, contingent, absolute or otherwise, except (a) as and to the extent specifically disclosed, reflected or reserved against in Parent’s consolidated balance sheet (or the notes thereto) as of January 31, 20192020 included in the Parent SEC Documents filed or furnished prior to the date hereof, (b) for liabilities incurred or which have been discharged or paid in full, in each case, in the ordinary course of business consistent with past practice since January 31, 20192020 (other than any liability for any material breaches of Contracts), (c) as expressly required or expressly contemplated by this Agreement and (d) for liabilities which have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
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Section 5.8.4.8. Absence of Certain Changes or Events. From January 31, 2019 through the date hereof,2020, there has not occurred any Effect that has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.9.4.9. Compliance with Law.
(a) Parent and each Parent Subsidiary are and have been since January 1, 201631, 2017 in compliance with and not in default under or in violation of any Laws (including Environmental Laws and employee benefits and labor Laws) applicable to Parent, such Subsidiary or any of their respective properties or assets, except where such noncompliance, default or violation has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) Parent and each Parent Subsidiary are, and since January 1, 201631, 2017 have been, in possession of all franchises, grants, authorizations, business licenses, permits, easements, variances, exceptions, consents, certificates, approvals, registrations, clearances and orders of any Governmental Entity or pursuant to any applicable Law necessary for Parent and the Parent Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “Parent Permits”), except where the failure to have any of the Parent Permits has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, all Parent Permits are in full force and effect, no default (with or without notice, lapse of time or both) has occurred under any such Parent
Permit and none of Parent or any Parent Subsidiary has received any written notice from any Governmental Entity threatening to suspend, revoke, withdraw or modify any such Parent Permit.
(c) Parent is in compliance in all material respects with the applicable listing and other rules and regulations of the NYSE.
Section 5.10.4.10. Litigation; Orders. As of the date hereof, there are no Proceedings pending or, to Parent’s Knowledge, threatened against Parent or any Parent Subsidiary or any of their respective properties, rights or assets by or before, and there are no orders, judgments or decrees of or settlement agreements with, any Governmental Entity, that are or would reasonably be expected to be, individually or in the aggregate, material to Parent and the Parent Subsidiaries, taken as a whole.
Section 5.11.4.11. Information Supplied. The information relating to Parent and the Parent Subsidiaries to the extent supplied by or on behalf Parent and the Parent Subsidiaries to be contained in, or incorporated by reference in (a) the Offer Documents, theSchedule 14D-9 and the FormS-4 (and any amendment or supplement thereto)Registration Statement will not, on the date the Offer Documents and theSchedule 14D-9 are first mailed to the Company Stockholders or at the time the FormS-4 (and any amendment or supplement thereto) is filed with the SEC,Registration Statement is declared effective by the SEC, is first mailed to Company Stockholders or on the date that the Offer is consummated, contain any untrue statement of any material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, at the time and in light of the circumstances under which they were made, not false or misleading and (b) the Registration Statement and the Proxy Statement/Prospectus will not, at the date the Proxy Statement/Prospectus is first mailed to the Company Stockholders or at the time of the Company Stockholders Meeting, 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, at the time and in light of the circumstances under which they were made, not false or misleading. The Offer Documents and the FormS-4Registration Statement will comply in all material respects as to form with the requirements of both the Exchange Act and the Securities Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing provisions of thisSection 5.114.11, no representation or warranty is made by Parent, Merger Sub I or PurchaserMerger Sub II with respect to information or statements made or incorporated by reference in the Offer Documents, theSchedule 14D-9Registration Statement or the FormS-4,Proxy Statement/Prospectus, which information or statements were not supplied by or on behalf of Parent, Merger Sub I or Purchaser.Merger Sub II.
Section 5.12.4.12. Sufficient Funds; Valid Issuance. Assuming the accuracy of the Company’s representations and warranties set forth in Section 3.2(a), Section 3.2(b), Section 3.2(c) and Section 3.2(d), Parent will have at
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the Closing access to all of the funds that are necessary for it to pay the Cash Consideration and consummate the Transactions, and to perform its obligations under this Agreement. The Parent Common Stock to be issued as Offer Consideration or MergerStock Consideration pursuant to the terms hereof, when issued as provided in and pursuant to the terms of this Agreement, will be duly authorized and validly issued, fully paid and nonassessable, and (other than restrictions under applicable securities laws, or restrictions created by any Company Stockholder) will be free of restrictions on transfer.
Section 5.13.4.13. Finders and Brokers. Other than BofA Securities, Inc., neither Parent nor any Parent Subsidiary has employed or engaged any investment banker, broker or finder in connection with the Transactions who is entitled to any fee or any commission in connection with this Agreement or upon or as a result of the consummation of the Offer and the Merger.Mergers.
Section 5.14.4.14. Stock Ownership. Parent is not, nor at any time for the past three (3) years has been, an “interested stockholder” of the Company as defined in Section 203 of the DGCL. NeitherTo the Knowledge of Parent, neither Parent nor any Parent Subsidiary directly or indirectly owns as of the date hereof, nor at any time in the past three (3) years through the date hereof has directly or indirectly owned, any shares of Company Common Stock.
Section 5.15.4.15. No PurchaserMerger Subs Activity. Since its date of formation, Purchaser(a) Merger Sub I has not conductedengaged in any business oractivities other than in connection with this Agreement and the Transactions and (b) Merger Sub II has not engaged in any activities other than in connection with this Agreement and the Transactions.
Section 5.16.4.16. Tax Matters.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect, Parent and the Parent Subsidiaries have timely paid in full to the appropriate Governmental Entity all Taxes required to be paid by any of them, and the financial statements of Parent and the Parent Subsidiaries reflect adequate reserves, in accordance with GAAP, for all Taxes accrued but not yet paid by Parent or any Parent Subsidiary as of the date thereof;
(b) There is no (i) claim, litigation, audit, examination, investigation or other Proceeding pending or, to the Knowledge of Parent, threatened in writing with respect to any material Taxes or Tax Returns of Parent or any Parent Subsidiary, or (ii) deficiency for material Taxes that has been assessed by any Governmental Entity against Parent or any Parent Subsidiary and that has not been fully satisfied by payment, in each case, except, solely with respect to any such claim, litigation, audit, examination, investigation, or other Proceeding arising after the date hereof, as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect;
(c) None of Parent or any Parent Subsidiary has any liability for material Taxes of any Person (other than Parent or any Parent Subsidiary) under Treasury RegulationsSection 1.1502-6 (or any similar provision of state, local, or non-U.S. Law) or as transferee or successor or otherwise by operation of Law;
(d) Neither Parent nor any Parent Subsidiary is bound with respect to the current or any future taxable period by any closing agreement (within the meaning of Section 7121(a) of the Code or any similar or analogous provision of state, local ornon-U.S. Law) or other ruling or written agreement with a Tax authority, in each case, with respect to material Taxes;
(e) Neither Parent nor any Parent Subsidiary has participated in any “listed transaction” within the meaning of Treasury RegulationsSection 1.6011-4(b)(2) (or any similar provision of state, local ornon-U.S. Law); and
(f) Purchaser Merger Sub I is a direct, wholly owned Subsidiary of Salesforce Holdings LLC, a Delaware limited liability company (“Intermediate LLC”). Intermediate LLCParent. Merger Sub II is a direct, wholly owned Subsidiary of Parent. For U.S. federal income Tax purposes, (i) Intermediate LLCMerger Sub II is and has always been “disregarded as an entity separate from its owner” as such phrase is used in Treasury RegulationsSection 301.7701-2(c)(2)(i),. and (ii) Purchaser is treated as a direct wholly owned subsidiary of Parent. Neither Parent nor any Parent Subsidiary is aware of the existence of any fact, or has taken or agreed to take any action, that would reasonably be expected to prevent or impede the Offer and the Merger,Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
Section 5.17.4.17. No Other Representations. Except for the representations and warranties contained inArticle IV III, the certificate delivered pursuant to Section 7.2(d) and the Voting Agreement, each of Parent, Merger Sub I and PurchaserMerger Sub II acknowledges that none of the Company, any of its Representatives or any other Person makes, and each of Parent, Merger Sub I and PurchaserMerger Sub II acknowledges that it has not relied upon or otherwise been induced by, any express or implied representation or warranty with respect to the Company or any Company Subsidiary or with respect to any other information provided or made available to Parent, PurchaserMerger Sub I, Merger Sub II or their respective Representatives in connection with the Transactions, including any information, documents, projections, forecasts or other material made available to Parent, PurchaserMerger Sub I, Merger Sub II or their respective Representatives in certain “data rooms” or management presentations in expectation of the Transactions or the accuracy or completeness of any of the foregoing, except, in each case for the representations and warranties contained inArticle IV. III, the certificate delivered pursuant to Section 7.2(d) and the Voting Agreement. Without limiting the generality of the foregoing, each of Parent, Merger Sub I and PurchaserMerger Sub II acknowledges that, except as may be expressly provided inArticle IV III, the certificate delivered pursuant to Section 7.2(d) and the Voting Agreement, no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospective information that may have been made available, directly or indirectly, to Parent, Purchaser,Merger Sub I, Merger Sub II, any of their respective Representatives or any other Person.
COVENANTS RELATING TO CONDUCT OF BUSINESS
PENDING THE MERGER
Section 6.1.5.1. Conduct of Business by the Company Pending the Closing. The Company agrees that between the date hereof and the earlier of the First Effective Time or the date, if any, on which this Agreement is validly
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validly terminated pursuant toSection 9.18.1, except as set forth inSection 6.15.1 of the Company Disclosure Letter, as specifically permitted or required by this Agreement or the Letter Agreement, as required by applicable Law or as consented to in writing by Parent (with respect to clauses (i) (with respect to the organizational documents of any Company Subsidiary only), (ix)(iv), (x)(v), (xi)(ix), (xii)(x), (xiii)(xi), (xiv)(xii), (xvi)(xiii), (xvii)(xiv), (xix)(xvi), (xvii), (xix), (xxii) and (xxiv) (or (xxix) with respect to any of the foregoing) of Section 6.1(b)5.1(b) only, such consent not to be unreasonably withheld, conditioned or delayed), the Company (a) shall, and shall cause each Company Subsidiary to, use reasonable best efforts to conduct its business in all material respects in the ordinary course of business including byand use reasonable best efforts to (i) preservingpreserve intact its and their present business organizations, goodwill and ongoing businesses, (ii) keepingkeep available the services of its and their present officers and other key employees (other than where termination of such services is for cause) and (iii) preservingpreserve its and their relationships with customers, suppliers, vendors, resellers, licensors, licensees, Governmental Entities, employees and other Persons with whom it and they have material business relations (it being agreed by the Parties that with respect to the matters specifically addressed by any provision of thisSection 6.15.1(b)(b), such specific provisions shall govern over the more general provision of thisSection 6.1(a)5.1(a)); and (b) shall not, norand shall the Company permit anycause each Company Subsidiary to:not to, directly or indirectly:
(i) amend, modify, waive, rescind, change or otherwise restate the Company’s or any Company Subsidiary’s certificate of incorporation, bylaws or equivalent organizational documents;
(ii) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, shares or other securities of the Company or any Company Subsidiary) (other than dividends or distributions made by any wholly owned Company Subsidiary to the Company or any wholly owned Company Subsidiary), or enter into any agreement and arrangement with respect to voting or registration, or file any registration statement with the SEC with respect to any, of its capital stock or other equity interests or securities;
(iii) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, or redeem, purchase or otherwise acquire any of its capital stock or other equity interests, or issue or authorize the issuance of any of its capital stock or other equity interests or any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or other equity interests, except for (A) the acceptance of shares of Company Common Stock as payment of the exercise price of Company Options or for withholding Taxes in respect of Company Equity Awards or (B) any such transaction involving only wholly owned Company Subsidiaries;
(iv) issue, deliver, grant, sell, pledge, dispose of or encumber, or authorize the issuance, delivery, grant, sale, pledge, disposition or encumbrance of, any shares in the capital stock, voting securities or other equity interest in the Company or any Company Subsidiary or any securities convertible into or exchangeable or exercisable for any such shares, voting securities or equity interest, or any rights, warrants or options to acquire any such shares, voting securities or equity interest or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units or take any action to cause to be exercisable or vested any otherwise unexercisable or unvested Company Equity Award under any existing Company Equity Plan (except as otherwise provided by the express terms of any Company Equity Award), other than (A) issuances of Company Common Stock in respect of any exercise of Company Options outstanding on the date hereof or the vesting or settlement of Company Equity Awards outstanding on the date hereof, in all cases in accordance with their respective terms as of the date hereof, (B) issuances of Company Common Stock in respect of any awards outstanding under the Company ESPP in respect of the Current ESPP Offering Period, (C) sales of shares of Company Common Stock pursuant to the exercise of Company Options if necessary to effectuate an optionee direction upon exercise or pursuant to the settlement of Company Equity Awards in order to satisfy Tax withholding obligations, or (D) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries;
(v) except as required by any Company Benefit Plan as in existence as of the date hereof and set forth onSection 4.10(a) 3.10(a) of the Company Disclosure Letter, (A) increase the compensation or benefits payable or
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to become payable to any of its directors, executive officers or employees, (B) grant to any of its directors, executive officers or employees any increase in severance or termination pay, (C) pay or award, or commit to pay or award, any bonuses, retention or incentive compensation to any of its directors, executive officers or employees, (D) enter into any employment, severance, or retention agreement (excluding offer letters that provide for no severance or change in control benefits) with any of its directors, executive officers or employees, (E) establish, adopt, enter into, amend or terminate any collective bargaining agreement or Company Benefit Plan except for any amendments to health and welfare plans in the ordinary course of business consistent with past practice that do not contravene the other covenants set forth in thisclause (v) or materially increase the cost to the Company of maintaining such Company Benefit Plan or the benefits provided thereunder, (F) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Company Benefit Plan, (G) terminate the employment of any employee at the level of senior vice president or above, other than for cause, (H) hire any new employees, except fornon-officer employees at the vice president level andor below, or (I) provide any funding for any rabbi trust or similar arrangement;arrangement, (J) enter into a Contract or relationship with a professional employer organization, or (K) form or otherwise establish any employing entity in any country that does not currently have an employing entity;
(vi) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or publiclyauthorize or announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or a material portion of the assets of any Person or any business or division thereof, or otherwise engage in any mergers, consolidations or business combinations, except for (A) transactions solely between the Company and a wholly owned Company Subsidiary or solely between wholly owned Company Subsidiaries, (B) acquisitions of supplies or equipment in the ordinary course of business consistent with past practice or (C) capital expenditurestransactions involving an amount up to $50 million cash consideration in accordance withclause (xiii) below;the aggregate, in each case, that (x) does not include any “earnout,” deferred or contingent payment obligation or any other future obligation to pay and (y) would not reasonably be expected to materially delay, impede or prevent the consummation of the Transactions on or before the Outside Date;
(vii) liquidate (completely or partially), dissolve, restructure, recapitalize or effect any other reorganization (including any restructuring, recapitalization or reorganization between or among any of the Company and/or the Company Subsidiaries), or adopt any plan or resolution providing for any of the foregoing;
(viii) make any loans, advances or capital contributions to, or investments in, any other Person, except for (A) loans solely among the Company and its wholly owned Company Subsidiaries or solely among the Company’s wholly owned Company Subsidiaries, or (B) advances for reimbursable employee expenses in the ordinary course of business;business consistent with past practice or (C) loans, advances, capital contributions or investments in Persons not listed on a national securities exchange of up to $15 million cash consideration in the aggregate (provided that such loans, advances, capital contributions or investments shall be non-controlling minority interests of less than ten percent (10%) of the total outstanding capital stock of such Person and shall not involve any board seat or other indicia of control);
(ix) sell, lease, license, assign, abandon, permit to lapse, transfer, exchange, swap or otherwise dispose of, or subject to any Lien (other than Permitted Liens), any of its material properties, rights or assets (including shares in the capital of the Company or the Company Subsidiaries), except (A) dispositions of obsolete or worthless equipment, in the ordinary course of business consistent with past practice, (B) nonexclusive license or other nonexclusive grantsnon-exclusive licenses of rights in or under any Company Intellectual Property or Company ProductProducts entered into in the ordinary course of business consistent with past practice with customers and resellers of the Company or the Company Subsidiaries and (C) pursuant to transactions solely among the Company and its wholly owned Company Subsidiaries or solely among wholly owned Company Subsidiaries or (D) pursuant to agreements in effect prior to the execution of this Agreement and set forth in Section 6.1(b)(ix)(D) of the Company Disclosure Letter;Subsidiaries;
(x) terminate or materially amend or modify any written policies or procedures with respect to the use or distribution by the Company or any Company Subsidiary of any open source Software;
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(xi) enter into or become bound by, or amend, modify, terminate or waive any Contract related to the acquisition or disposition or grantinggrant of any license with respect to material Intellectual Property, other than amendments, modifications, terminations or waivers in the ordinary course of business consistent with past practice, or otherwise encumber any material Company Intellectual Property (including by the granting of any covenants, including any covenant not to sue or covenant not to assert), other than(A) non-exclusive licenses of (x) Company Intellectual Property (other than patents on a stand-alone basis) or (y) Company Products, in each case entered into in the ordinary course of business consistent with past practice and (B) amendments and modifications, in each case, to existing exclusive, limited distribution rights for Company Products made or entered into in the ordinary course of business consistent with past practice;
(xii) (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract of the types referred to in clauses clause(i), (ii), (iii), (v), (xii)(viii), (xiii)(xii), (xiii), (xiv), (xvii) or (xix)(xx) ofSection 4.17(a)3.17(a) or any other Material Contract outside of the ordinary course of business consistent with past practice, (B) (1) materially modify, materially amend, extend or terminate any Material Contract (other thannon-renewals occurring in the ordinary course of business)business consistent with past practice) any Material Contract or (2) waive, release or assign any material rights or claims thereunder, in the case of thisclause (2) other than in the ordinary course of business consistent with past practice or (C) materially modify or amend or terminate, or waive or release or assign any material rights under any Material Government Bid or submit any new Government Contract Bid that would have been considered a Material Government Bid if it were submitted prior to the date hereof;
(xiii) except in accordance with the Company’s capital budget provided to Parent prior toset forth on Section 5.1(b)(xiii) of the date hereof,Company Disclosure Letter, make any capital expenditure or expenditures, enter into agreements or arrangements providing for capital expenditure or expenditures or otherwise commit to do so;
(xiv) commence (other than any collection action in the ordinary course of business consistent with past practice), waive, release, assign, compromise or settle any claim, litigation, investigation or proceeding (for the avoidance of doubt, including with respect to matters in which the Company or any Company Subsidiary is a plaintiff, or in which any of their officers or directors in their capacities as such are parties), other than the compromise or settlement of any claim, litigation or proceeding that is not brought by Governmental Entities and that: (A) is for an amount not to exceed, for any such compromise or settlement individually, $1,000,000, or in the aggregate, $2,000,000;$2,000,000, (B) does not impose any injunctive relief on the Company and the Company Subsidiaries and does not involve the admission of wrongdoing by the Company, any Company Subsidiary or any of their respective officers or directors or otherwise establish a materially adverse precedent for similar settlements by Parent or any Parent Subsidiaries (including following the First Effective Time the Company and the Company Subsidiaries); and (C) does not provide for the license of any Intellectual Property or the termination, modification or amendment of any license of Company Intellectual Property;
(xv) make any change in financial accounting policies, practices, principles or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP or applicable Law;
(xvi) amend or modify in any material respect any Privacy Statement of the Company or any Company Subsidiary;
(xvii) make, change or revoke any material Tax election, adopt or change any Tax accounting period or material method of Tax accounting, amend any material Tax Return, file any material Tax Return that is materially inconsistent with a previously filed Tax Return of the same type for a prior taxable period (taking into account any amendments prior to the date hereof and other than inconsistencies intended to take advantage of changes in Law since the date of the previously filed Tax Return)hereof), settle or compromise any material liability for Taxes or any Tax audit, claim or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local ornon-U.S. Law), surrender any right to claim a material refund of Taxes, or except extensions in connection with extensions of time obtained in the ordinary course of business consistent with past practice for the filing of Tax Returns, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
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(xviii) take any action, or knowingly fail to take any action, which action or failure to act would or would be reasonably expected to prevent or impede the Offer and the Merger,Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(xix) redeem, repurchase, prepay, defease, incur, assume, endorse, guarantee or otherwise become liable for or modify in any material respects the terms of any Indebtedness or any derivative financial instruments or arrangements (including swaps, caps, floors, futures, forward contracts and option agreements), or
issue or sell any debt securities or calls, options, warrants or other rights to acquire any debt securities (directly, contingently or otherwise), except for the incurrence and repayment of any Indebtedness solely among the Company and its wholly owned Company Subsidiaries or solely among wholly owned Company Subsidiaries;
(xx) enter into any transactions or Contracts with any affiliate or other Person that would be required to be disclosed by the Company under Item 404 of RegulationS-K of the SEC;
(xxi) fail to use commercially reasonable efforts to maintain the Company’s insurance policies or comparable replacement policies with respect to the material assets, operations and activities of the Company and the Company Subsidiaries;
(xxii) (A) acquire any real property or enter into any lease or sublease of real property (whether as a lessor, sublessor, lessee or sublessee), (B) materially modify or amend or exercise any right to renew any Company Lease, or waive any material term or condition thereof or grant any material consents thereunder, (C) grant or otherwise knowingly create or consent to the creation of any material easement, covenant, restriction, assessment or charge affecting any real property leased by the Company, or any interest therein or part thereof, (D) knowingly commit any waste or nuisance on any such property or (E) make any material changes in the construction or condition of any such property, in the case of each ofclauses (B) through(E), other than in the ordinary course of business consistent with past practice;
(xxiii) other than the Company Stockholders Meeting, convene any special meeting (or any adjournment or postponement thereof) of the Company Stockholders;
(xxiv) terminate or modify or waive in any material respect any right under any material Company Permit;
(xxv) adopt or otherwise implement any stockholder rights plan, “poison-pill” or other comparable agreement;
(xxvi) subjectamend, modify, supplement or terminate the Convertible Notes Indenture or any Capped Call Confirmation or take any action that would result in a change to the Conversion Rate (as defined in the Convertible Notes Indenture as in effect on the date hereof) or the Applicable Percentage, Option Entitlement, Strike Price or Cap Price (each as defined in the Capped Call Confirmations as in effect on the date hereof) from that set forth in Section 7.23.2(a) (other than as contemplated pursuant to Section 6.15);
(xxvii) subject to Section 6.2, take or cause to be taken any action that would reasonably be expected to materially delay, impede or prevent the consummation of the Transactions on or before the Outside Date;
(xxviii) to the extent within the Company or any Company Subsidiary’s control, take any action to cause, or that would result in, the conversion of Class B Common Stock into Class A Common Stock; or
(xxvii)(xxix) agree or authorize, in writing or otherwise, to take any of the foregoing actions.
Section 6.2.5.2. Conduct of Business by Parent Pending the Closing. Parent agrees that between the date hereof and the earlier of the date of the First Effective Time or the date, if any, on which this Agreement is validly
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terminated pursuant toSection 9.18.1, except as set forth inSection 6.25.2 of the Parent Disclosure Letter, as specifically permitted or required by this Agreement, as required by applicable Law or as consented to in writing by the Company (such consent not to be unreasonably withheld, conditioned or delayed), Parent shall not, and shall cause each Parent Subsidiary not to, directly or indirectly:
(a) amend, modify, waive, rescind, change or otherwise restate the Parent Governing Documents (whether by merger, consolidation, operation of law or otherwise) in a manner that would materially and adversely affect the Company Stockholders, or adversely affect the Company Stockholders relative to other holders of Parent Common Stock;
(b) authorize, declare, set aside, make or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock or other equity interests (whether in cash, assets, stock or other securities of Parent or any Parent Subsidiary), except (i) dividends and distributions paid or made in the ordinary course of business consistent with past practice by the Parent Subsidiaries to Parent or any other wholly owned Parent Subsidiary and (ii) for transactions that would require an adjustment to the Offer Consideration and the Merger Consideration pursuant toSection 1.1(d)2.1(d) andSection 3.1(d), respectively, and for which the proper adjustment is made;
(c) split, combine, subdivide, reduce or reclassify any of its capital stock or other equity interests, except for (i) any such transaction involving only wholly owned Parent Subsidiaries, and (ii) any transactions that would require an adjustment to the Offer Consideration and the Merger Consideration pursuant toSection 1.1(d)2.1(d) andSection 3.1(d), respectively, and for which the proper adjustment is made;
(d) liquidate (completely or partially), dissolve or adopt any plan or resolution providing for any of the foregoing, in each case, with respect to Parent, PurchaserMerger Sub I or any direct or indirect parent entity of Purchaser;Merger Sub II;
(e) acquire (including by merger, consolidation or acquisition of stock or assets or any other means) or publicly announce an intention to so acquire, or enter into any agreements providing for any acquisitions of, any equity interests in or a material portion of the assets of any Person (or any business or division thereof) that (i) would require (A) the filing by Parent or any of itsParent Subsidiaries of a Notification and Report Form pursuant to the HSR Act with respect to such acquisition or (B) anypre-closing approvals, consents, waivers or clearances under any AntitrustRegulatory Laws of the jurisdictions set forth on Section 7.2 3.4(a) of the ParentCompany Disclosure Letter with respect to such acquisition and (ii) would, or would reasonably be expected to prevent (A) any waiting period (or extensions thereof) applicable to the Transactions under the HSR Act from expiring or terminating prior to the Outside Date or (B) Parent, Merger Sub I or PurchaserMerger Sub II from obtaining, prior to the Outside Date, any of the requiredpre-closing approvals, consents, waivers or clearances applicable to the Transactions under any AntitrustRegulatory Laws of the jurisdictions set forth on Section 7.2 3.4(a) of the ParentCompany Disclosure Letter;
(f) take any action, or knowingly fail to take any action, which action or failure to act would or would be reasonably expected to prevent or impede the Offer and the Merger,Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;
(g) subject toSection 7.26.2, take or cause to be taken any action that would reasonably be expected to materially delay, impede or prevent the consummation of the Transactions on or before the Outside Date; or
(h) agree or authorize, in writing or otherwise, to take any of the foregoing actions.
Section 6.3.5.3. No Solicitation by the Company.
(a) From and after the date hereof until the earlier of the AcceptanceFirst Effective Time or the date, if any, on which this Agreement is validly terminated pursuant toSection 9.18.1, the Company agrees that it shall not, and shall cause the Company Subsidiaries, and its and their respective officers and directors not to, and shall use its reasonable best efforts to cause its and the Company Subsidiaries’ other Representatives to not, directly or
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indirectly: (i) solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer which constitutes or would reasonably be reasonably expected to lead to an Acquisition Proposal; (ii) participate in any negotiations regarding, or furnish to any person any nonpublic information relating to the Company or any Company Subsidiary in connection with an actual or potential Acquisition Proposal; (iii) adopt, approve, endorse or recommend, or publicly propose to adopt, approve, endorse or recommend, any Acquisition Proposal; (iv) withdraw, change, amend, modify or qualify, or otherwise propose to withdraw, change, amend, modify or qualify, in a manner adverse to Parent, the Company Board Recommendation, or resolve or agree to take any such action; (v) if an Acquisition Proposal has been publicly disclosed, fail to publicly recommend against any such Acquisition Proposal within ten (10) Business-Business Days after the public disclosure of such Acquisition Proposal (or subsequently withdraw, change, amend, modify or qualify, in a manner adverse to Parent, such rejection of such Acquisition Proposal) and reaffirm the Company Board Recommendation within such ten (10) Business Day period (or, if earlier, by the second (2nd) Business Day prior to the then-scheduled expiration of the Offer)Company Stockholders Meeting); (vi) fail to include the Company Board Recommendation in theSchedule 14D-9; Proxy Statement/Prospectus; (vii) approve, or authorize, or cause or permit the Company or any Company Subsidiary to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint venture agreement, partnership agreement or similar agreement or
document with respect to, or any other agreement or commitment providing for, any Acquisition Proposal (other than an Acceptable Confidentiality Agreement entered into in accordance with thisSection 6.35.3) (a “Company Acquisition Agreement”), ;(viii) call or convene a meeting of the Company Stockholders to consider a proposal that would reasonably be expected to materially impair, prevent or delay the consummation of the TransactionsorTransactionsor (ix) resolve or agree to do any of the foregoing (any act described inclauses (iii),(iv),(v),(vi), (vii), (viii) and/or(ix) (to the extent related to the foregoingclauses (iii),(iv), (v), (vi), (vii) or(v)(viii)), a “Change of Recommendation”). The Company shall, and the Company shall cause the Company Subsidiaries and its and their respective officersofficer and directors to, and shall use its reasonable best efforts to cause its and the Company Subsidiaries’ other Representatives to, immediately cease any and all existing solicitation, encouragement, discussions or negotiations with any persons (or provision of any nonpublic information to any persons) with respect to any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal. Promptly after the date hereof (and in any event within two (2) Business DayDays following the date hereof), the Company shall (A) request in writing that each person that has heretofore executed a confidentiality agreement in connection with its consideration of an Acquisition Proposal or potential Acquisition Proposal promptly destroy or return to the Company all nonpublic information heretofore furnished by the Company or any of its Representatives to such person or any of its Representatives in accordance with the terms of such confidentiality agreement and (B) terminate access to any physical or electronic data rooms relating to a possible Acquisition Proposal by such person and its Representatives. The Company shall enforce, and not waive, terminate or modify without Parent’s prior written consent, any confidentiality, standstill or similar provision in any confidentiality, standstill or other agreement;provided that, if the Company Board of Directors determines in good faith after consultation with the Company’s outside legal counsel that the failure to waive a particular standstill provision would be reasonably likely to violate the directors’ fiduciary duties under applicable Law, the Company may, with prior written notice to Parent, waive such standstill solely to the extent necessary to permit the applicable person (if it has not been solicited in violation of thisSection 6.35.3) to make, on a confidential basis to the Company Board of Directors, an Acquisition Proposal, conditioned upon such person agreeing to disclosure of such Acquisition Proposal to Parent, in each case as contemplated by thisSection 6.35.3. For purposes of thisSection 6.35.3, the term “person” means any Person or “group,” as defined in Section 13(d) of the Exchange Act, other than, with respect to the Company, Parent or any Parent Subsidiary or any of their Representatives. Notwithstanding the limitations set forth in Section 6.3(a) 5.3(a), if the Company receives, prior to the Acceptance Time,Company Stockholder Approval being obtained, a bona fide written Acquisition Proposal that did not result from a breach of thisSection 6.35.3, the Company and the Company Subsidiaries and the Company’s Representatives may contact the Person or any of its Representatives who has made such Acquisition Proposal solely to clarify (and not to negotiate or engage in any discussions regarding or relating to) the material terms and conditions of such Acquisition Proposal so that the Company may inform itself about such Acquisition Proposal. For the avoidance of doubt, any violation of the restrictions set forth in thisSection 6.3(a)5.3 by (x) a Company Subsidiary, (y) a director or officer of the Company or any Company
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Subsidiary or (z) any other Representatives acting on behalf of the Company or any Company Subsidiary shall be a breach of thisSection 6.3(a)5.3 by the Company.
(b) Notwithstanding the limitations set forth inSection 6.3(a)5.3(a), if the Company receives, prior to the Acceptance Time,Company Stockholder Approval being obtained, an unsolicited, bona fide, written Acquisition Proposal that did not result from a breach of this Section 6.3(a)5.3, which the Company Board of Directors determines in good faith after consultation with the Company’s outside legal counsel and financial advisors (i) constitutes a Superior Proposal or (ii) would reasonably be expected to result in a Superior Proposal and, in each case, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable Law, then in either event the Company may take the following actions: (x) furnish nonpublic information with respect to the Company to the person making such Acquisition Proposal and its Representatives, if, and only if, prior to so furnishing such information, the Company receives from such person an executed Acceptable Confidentiality Agreement and the Company also provides Parent, prior to or substantially concurrently with the time such information is provided or made available to such person, any nonpublic information furnished to such other person that was not previously furnished to Parent, and (y) engage in discussions or negotiations with such person with respect to such Acquisition Proposal.
(c) The Company shall promptly (and in any event within twenty-four (24) hours) notify Parent of the Company’s or any of its controlled affiliates’ or its or their respective Representatives’ receipt of any Acquisition Proposal, any proposals or inquiries that would reasonably be expected to lead to an Acquisition Proposal, or any inquiry or request for nonpublic information relating to the Company or any Company Subsidiary by any person who has made or would reasonably be expected to make any Acquisition Proposal. Such notice shall indicate the identity of the person making the Acquisition Proposal, inquiry or request, and the material terms and conditions of any such proposal or offer or the nature of the information requested pursuant to such inquiry or request, including unredacted copies of all written requests, proposals, correspondence or offers, including proposed agreements received by the Company or its Representatives relating to such Acquisition Proposal or, if such Acquisition Proposal is not in writing, a reasonably detailed written description of the material terms and conditions thereof. Without limiting the Company’s other obligations under thisSection 6.35.3, the Company shall keep Parent reasonably informed on a prompt and timely basis of the status and material terms (including any amendments or proposed amendments to such material terms) of any such Acquisition Proposal or potential Acquisition Proposal and keep Parent reasonably informed on a prompt and timely basis as to the nature of any information requested of the Company with respect thereto and promptly (and in any event within twenty-four (24) hours) provide to Parent copies of all proposals, offers and proposed agreements relating to an Acquisition Proposal received by the Company or its Representatives or, if such information or communication is not in writing, a reasonably detailed written description of the material contents thereof. Without limiting the Company’s other obligations under thisSection 6.35.3, the Company shall promptly provide (and in any event within twenty-four (24) hours) to Parent any material nonpublic information concerning the Company provided to any other person in connection with any Acquisition Proposal that was not previously provided to Parent. Without limiting the foregoing, the Company shall promptly (and in any event within twenty-four (24) hours after such determination) inform Parent in writing if the Company determines to begin providing information or to engage in discussions or negotiations concerning an Acquisition Proposal pursuant toSection 6.3(b)5.3(b). Unless this Agreement has been validly terminated pursuant toSection 9.18.1, the Company shall not take any action to exempt any person other than Parent, Merger Sub I or PurchaserMerger Sub II from the restrictions on “business combinations” contained in any applicable Takeover Statute or in the Company Governing Documents, or otherwise cause such restrictions not to apply. The Company agrees that it will not, directly or indirectly, enter into any agreement with any person which directly or indirectly prohibits the Company from providing any information to Parent in accordance with, or otherwise complying with, thisSection 6.35.3.
(d) Notwithstanding anything in thisSection 6.35.3 to the contrary, but subject toSection 6.3(e)5.3(e), at any time prior to the Acceptance Time,Company Stockholder Approval being obtained, the Company Board of Directors may (i) make a Change of Recommendation (only of the type contemplated bySection 6.3(a)5.3(a)(iv) orSection 6.3(a)5.3(a)(vi)) in response to an Intervening Event if the Company Board of Directors has determined in good faith after
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consultation with the Company’s outside legal counsel and financial advisors, that the failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable Law or (ii) make a Change of Recommendation and cause the Company to terminate this Agreement pursuant to and in accordance withSection 9.1(g)8.1(h) in order to enter into a definitive agreement providing for an unsolicited Acquisition Proposal received after the date of this Agreement (which, for the avoidance of doubt, did not result from a breach of this Section 6.3(a)5.3), which and such Acquisition Proposal is not withdrawn) if the Company Board of Directors determines in good faith after consultation with the Company’s outside legal counsel and financial advisors isthat such Acquisition Proposal constitutes a Superior Proposal, but only if the Company Board of Directors has determined in good faith after consultation with the Company’s outside legal counsel and financial advisors, that failure to take such action would be reasonably likely to violate the directors’ fiduciary duties under applicable Law;provided that notwithstanding anything to the contrary herein, neither the Company nor any Company Subsidiary shall enter into any Company Acquisition Agreement unless this Agreement has been validly terminated in accordance withSection 9.1(g)8.1. “Intervening Event” means any Effect that is material to the Company and the Company Subsidiaries (taken as a whole) and was not known by or reasonably foreseeable to the Company or the Company Board of Directors as of or prior to the date hereof;provided,however, that in no event shall the following events, changes or developments constitute an Intervening Event: (A) the receipt, existence or terms of an Acquisition Proposal or any inquiry or communications relating thereto or any matter relating thereto or consequence thereof, (B) changes in the market price or trading volume of the Class A Common Stock, the Parent Common Stock or any other securities of the Company, Parent or their respective Subsidiaries, or any change in credit rating or the fact that the Company meets or exceeds (or that Parent fails to meet or exceed)
internal or published estimates, projections, forecasts or predictions for any period, (C) changes in general economic, political or financial conditions or markets (including changes in interest rates, exchange rates, stock, bond and/or debt prices) or, (D) changes in GAAP, other applicable accounting rules or applicable Law or, in any such case, changes in the interpretation thereof.thereof or (E) natural disasters, epidemics or pandemics (including the existence and impact of the COVID-19 pandemic).
(e) Prior to the Company taking any action permitted (i) underSection 6.3(d)5.3(d)(i), the Company shall provide Parent with four (4) Business-Business Days’ prior written notice advising Parent that the Company Board of Directors intends to effect a Change of Recommendation and specifying, in reasonable detail, the reasons therefor, and during such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day), the Company shall procure thatcause its Representatives (including its executive officers) to negotiate in good faith (solely to(to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of this Agreement in a manner that would obviate the need to effect a Change of Recommendation and at the end of such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day) the Company Board of Directors again makes the determination underSection 6.3(d)5.3(d)(i) (after in good faith taking into account any amendments proposed by Parent) or (ii) underSection 6.3(d)5.3(d)(ii), the Company shall provide Parent with four (4) Business Days’ prior written notice advising Parent that the Company Board of Directors intends to take such action and specifying the material terms and conditions of the Acquisition Proposal, including a copy of any proposed definitive documentation, and during such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day), the Company shall procure thatcause its Representatives (including its executive officers) to negotiate in good faith (solely to(to the extent Parent desires to negotiate) any proposal by Parent to amend the terms and conditions of this Agreement such that such Acquisition Proposal would no longer constitute a Superior Proposal and at the end of such four (4) Business Day period (which period shall expire at 11:59 p.m., Pacific Time, on the fourth (4th) Business Day) the Company Board of Directors again makes the determination underSection 6.3(d)5.3(d)(ii) (after in good faith taking into account the amendments proposed by Parent). With respect toSection 6.3(e)5.3(e)(ii), if there are any material amendments, revisions or changes to the terms of any such Superior Proposal (including any revision to the amount, form or mix of consideration the Company Stockholders would receive as a result of the Superior Proposal), the Company shall notify Parent of each such amendment, revision or change in compliance withSection 6.3(c)5.3(c) and the applicable four (4) Business Day period shall be extended until at least three (3) Business Days after the time that Parent receives notification from the Company of each such revision, and the Company Board of Directors shall not take any such action permitted underSection 6.3(d)5.3(d)(ii) prior to the
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end of any such period (which period shall expire at 11:59 p.m., Pacific Time, on the applicable day) as so extended in accordance with the terms of thisSection 6.3(e)5.3(e).
(f) Nothing in this Agreement shall prohibit the Company or the Company Board of Directors from (i) disclosing to the Company Stockholders a position contemplated by Item 1012(a) of RegulationM-A or Rules14d-9 and 14e-2(a) promulgated under the Exchange Act, (ii) making any “stop, look and listen” communication to the Company Stockholders pursuant toRule 14d-9(f) promulgated under the Exchange Act or (iii) making any legally required disclosure to the Company Stockholders with regard to an Acquisition Proposal, which actions, in the case of clauses (i)-(iii), shall not constitute or be deemed to constitute a Change of Recommendation so long as any such disclosure (x) includes an express reaffirmation of the Company Board Recommendation, without any amendment, withdrawal, alteration, modification or qualification thereof and (y) does not include any statement that constitutes, and does not otherwise constitute, a Change of Recommendation. For the avoidance of doubt, thisSection 6.3(f)5.3(f) shall not permit the Company Board of Directors to make (or otherwise modify the definition of) a Change of Recommendation except to the extent expressly permitted bySection 6.3(d)5.3(d) andSection 6.3(e)5.3(e).
Section 5.4. Preparation of the Registration Statement and the Proxy Statement/Prospectus; Company Stockholders Meeting.
(a) As promptly as reasonably practicable after the execution of this Agreement, the Company (with Parent’s reasonable cooperation) shall use reasonable best efforts to prepare within thirty (30) days following the execution of this Agreement a mutually acceptable Proxy Statement/Prospectus (as part of the Registration Statement), and Parent (with the Company’s reasonable cooperation) shall use reasonable best efforts to prepare and file within thirty (30) days following the execution of this Agreement with the SEC the Registration Statement, in which the Proxy Statement/Prospectus will be included as a prospectus, in connection with the registration under the Securities Act of the Parent Common Stock to be issued in the First Merger. Each of Parent and the Company shall use its reasonable best efforts to (A) cause the Registration Statement and the Proxy Statement/Prospectus to comply with the applicable rules and regulations promulgated by the SEC, (B) have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing (including by responding to comments from the SEC), and, prior to the effective date of the Registration Statement, take all action reasonably required to be taken under any applicable state securities Laws in connection with the issuance of Parent Common Stock in connection with the First Merger and (C) keep the Registration Statement effective through the Closing in order to permit the consummation of the First Merger. Each of Parent and the Company shall furnish all information as may be reasonably requested by the other in connection with any such action and the preparation, filing and distribution of the Registration Statement and the Proxy Statement/Prospectus. As promptly as practicable after the Registration Statement shall have become effective, the Company shall use its reasonable best efforts to cause the Proxy Statement/Prospectus to be filed and mailed to its stockholders. No filing of, or amendment or supplement to, the Registration Statement will be made by Parent, and no filing of, or amendment or supplement to, the Proxy Statement/Prospectus will be made by the Company, in each case without providing the other Party with a reasonable opportunity to review and comment (which comments shall be considered by the applicable Party in good faith) thereon if reasonably practicable; provided that, without limiting the generality of this Section 5.4, with respect to documents filed by a Party which are incorporated by reference in the Registration Statement or the Proxy Statement/Prospectus, this right to review and comment shall apply only with respect to information relating to the other Party or such other Party’s business, financial condition or results of operations. If, at any time prior to the First Effective Time, any information relating to Parent or the Company or any of their respective affiliates, directors or officers, should be discovered by Parent or the Company which should be set forth in an amendment or supplement to either the Registration Statement or the Proxy Statement/Prospectus, so that either such document would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, at the time and in light of the circumstances under which they are made, not misleading, the Party that discovers such information shall promptly notify the other Parties and an appropriate amendment or supplement describing such information shall be prepared and, following a reasonable opportunity for the other Party to review and comment on such amendment or supplement, promptly filed with the SEC and, to the extent required by applicable Law,
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disseminated to the Company Stockholders. Subject to applicable Law, each Party shall notify the other promptly of the time when the Registration Statement has become effective, of the issuance of any stop order or suspension of the qualification of the Parent Common Stock issuable in connection with the First Merger for offering or sale in any jurisdiction, or of the receipt of any comments from the SEC or the staff of the SEC and of any request by the SEC or the staff of the SEC for amendments or supplements to the Proxy Statement/Prospectus or the Registration Statement or for additional information and shall supply each other with copies of all correspondence between either Party or any of its Representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement/Prospectus, the Registration Statement or the Mergers.
(b) Subject to the earlier termination of this Agreement in accordance with Section 8.1, the Company shall (i) as promptly as reasonably practicable after the filing of the Registration Statement with the SEC and in consultation with Parent, conduct a “broker search” in accordance with Rule 14a-13 of the Exchange Act for a record date for the Company Stockholders Meeting and (ii) duly call, give notice of, convene and hold a meeting of the Company Stockholders for the purpose of seeking the Company Stockholder Approval (as it may be adjourned or postponed as provided below, the “Company Stockholders Meeting”) as soon as reasonably practicable after the date hereof (but in no event later than forty-five (45) days following the effectiveness of the Registration Statement), and the Company shall submit such proposal to the Company Stockholders at the Company Stockholders Meeting and shall not submit any other proposal to the Company Stockholders in connection with the Company Stockholders Meeting (other than an advisory vote regarding merger-related compensation and a customary proposal regarding adjournment of the Company Stockholders Meeting) without the prior written consent of Parent. The Company agrees (i) to provide Parent with reasonably detailed periodic updates concerning proxy solicitation results on a timely basis (including, if requested, promptly providing daily voting reports in the last seven (7) days prior to the Company Stockholders Meeting) and to give written notice (which, for the avoidance of doubt, may be given via email) to Parent one (1) day prior to, and on the date of, the Company Stockholders Meeting, indicating whether, as of such date, sufficient proxies representing the Requisite Company Vote have been obtained.
(c) Notwithstanding anything to the contrary contained in this Agreement, the Company shall not adjourn or postpone the Company Stockholders Meeting without Parent’s prior written consent; provided that without Parent’s prior written consent, the Company may adjourn or postpone the Company Stockholders Meeting (i) after consultation with Parent, to the extent necessary to ensure that any supplement or amendment to the Proxy Statement/Prospectus or Registration Statement required by Law is provided to the stockholders of the Company within a reasonable amount of time in advance of the Company Stockholders Meeting or (ii) if there are not sufficient affirmative votes in person or by proxy at such meeting to constitute a quorum at the Company Stockholders Meeting or to obtain the Company Stockholder Approval, to allow reasonable additional time for solicitation of proxies for purposes of obtaining a quorum or the Company Stockholder Approval; provided that unless agreed to in writing by Parent, (x) any such adjournment or postponement shall be for a period of no more than ten (10) Business Days, and (y) the Company shall only be permitted to effect no more than one (1) such adjournment or postponement pursuant to this clause (ii); provided that (A) no postponement contemplated by this clause (ii) shall be permitted if it would require a change to the record date for the Company Stockholders Meeting, and (B) if requested by Parent, the Company shall effect an adjournment or postponement of the Company Stockholders Meeting under the circumstances contemplated by this clause (ii) for a period of up to ten (10) Business Days each (provided that Parent shall only make up to one (1) such request, and no such request for a postponement shall be permitted if it would require a change in the record date for the Company Stockholders Meeting). The Company shall use its reasonable best efforts to (A) solicit from the Company Stockholders proxies in favor of the adoption of this Agreement and approval of the Transactions, including the Merger and (B) take all other action necessary or advisable to secure the Company Stockholder Approval, including, unless the Company Board of Directors has validly made a Change of Recommendation in accordance with Section 5.3, by communicating to the Company’s stockholders the Company Board Recommendation and including such Company Board Recommendation in the Proxy Statement/Prospectus. Notwithstanding any Change of Recommendation, unless this Agreement is terminated in accordance with its terms, (x) the Company Stockholders Meeting shall be convened and this Agreement shall be submitted to the Company Stockholders for
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approval at the Company Stockholders Meeting, and nothing contained herein shall be deemed to relieve the Company of such obligation and (y) all other obligations of the Parties hereunder shall continue in full force and effect and such obligations shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Acquisition Proposal (whether or not a Superior Proposal).
ADDITIONAL AGREEMENTS
Section 7.1.6.1. Access; Confidentiality; Notice of Certain Events.
(a) From the date hereof until the earlier of the First Effective Time or the date, if any, on which this Agreement is validly terminated pursuant toSection 9.18.1, to the extent permitted by applicable Law, the Company
shall, and shall cause each Company Subsidiary to, afford to Parent and Parent’s Representatives reasonable access during normal business hours and upon reasonable advance notice to the Company’s and the Company Subsidiaries’ offices, properties, Contracts, personnel, books and records (so long as any such access does not unreasonably interfere with the Company’s business), and during such period, the Company shall, and shall cause theeach Company Subsidiaries to, use reasonable best effortsSubsidiary to, furnish as promptly as practicable to Parent all information (financial or otherwise) concerning its business, properties, offices, Contracts and personnel as Parent may reasonably request (including information for purposes of transition and integration planning). Notwithstanding the foregoing, the Company shall not be required by thisSection 7.16.1 to provide Parent or Parent’s Representatives with access to or to disclose information (i) that is prohibited from being disclosed pursuant to the terms of a confidentiality agreement with a third party entered into prior to the date hereof or after the date hereof in the ordinary course of business consistent with past practice (provided,however, that, at Parent’s written request, the Company shall use its commercially reasonable efforts (x) to obtain the required consent of such third party to such access or disclosure or (y) to make appropriate substitute arrangements to permit reasonable access or disclosure not in violation of such consent requirement), (ii) the disclosure of which, in the reasonable good faithgood-faith judgment of the Company, would violate applicable Law (provided,however, that the Company shall use its commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure not in violation of such Law) or (iii) the disclosure of which, in the reasonable good faithgood-faith judgment of the Company, would cause the loss of any attorney-client, attorney work product or other legal privilege (provided,however, that the Company shall use its commercially reasonable efforts to allow for such access or disclosure to the maximum extent that such access or disclosure would not jeopardize attorney-client, attorney work product or other legal privilege).
(b) Each of the Company and Parent will hold, and will cause its Representatives and affiliates to hold, any nonpublic information exchanged pursuant to thisSection 7.16.1, in confidence to the extent required by and in accordance with, and will otherwise comply with, the terms of the Confidentiality Agreement.
(c) The Company shall give prompt notice to Parent, and Parent shall give prompt written notice to the Company (solely with respect to the matters set forth inclauses(i) and(ii) and subject toSection 7.2(b)6.2(b)), (i) of any notice or other communication received by such Party from any Governmental Entity in connection with this Agreement, or the LetterVoting Agreement, the Offer,Transactions, including the MergerMergers, or the other transactions contemplated by this Agreement or the LetterVoting Agreement, or from any Person alleging that the consent of such Person is or may be required in connection with the Offer, the MergerMergers or the other transactions contemplated by this Agreement or the LetterVoting Agreement, (ii) of any legal proceeding commenced or, to such Party’s Knowledge, threatened against such Party or any of its Subsidiaries, affiliates, directors or officers or otherwise relating to, involving or affecting such Party or any of its Subsidiaries, affiliates, directors or officers, in each case in connection with, arising from or otherwise relating to the Offer, the MergerMergers or any other transaction contemplated by this Agreement or the LetterVoting Agreement, and (iii) upon becoming aware of the occurrence or impending occurrence of any event or circumstance relating to it or any Company Subsidiary that would reasonably be expected to have, individually or in the aggregate, a
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Company Material Adverse Effect or which would reasonably be expected to prevent or materially delay or impede the consummation of the Transactions;provided,however, that the delivery of any notice pursuant to thisSection 7.1(c)6.1(c) shall not cure any breach of any representation or warranty requiring disclosure of such matter prior to the date hereof or otherwise limit or affect the remedies available hereunder to Parent, Merger Sub I and Purchaser;Merger Sub II; provided,further, that the Company’seither Party’s obligations, actions or inactions pursuant to thisSection 7.1(c)6.1(c), in each case in and of themselves, shall be deemed excluded for purposes of determining whether the condition set forth inclause (F)(2)Section 7.2(b) ofor Annex BSection 7.3(b), as applicable, has been satisfied.
Section 7.2.6.2. Reasonable Best Efforts.Efforts.
(a) Subject to the terms and conditions of this Agreement, each Party will use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Law to consummate the Transactions, including the Offer and the Merger,Mergers, as soon as practicable after the date hereof, including (i) preparing and filing or otherwise providing, in consultation with
the other Party and as promptly as practicable and advisable after the date hereof, all documentation to effect all necessary applications, notices, petitions, filings and other documents and to obtain as promptly as reasonably practicable all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any Governmental Entity in order to consummate the Transactions, including the Offer and the Merger,Mergers, and (ii) taking all stepsactions as may be necessary, subject to the limitations in thisSection 7.26.2, to obtain (and cooperating with each other in obtaining) all such waiting period expirations or terminations, consents, clearances, waivers, licenses, registrations, permits, authorizations, orders and approvals. In furtherance and not in limitation of the foregoing, each Party agrees to (x) make an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transactions as promptly as practicable, and in any event within ten (10)fifteen (15) Business Days after the execution of this Agreement (unless a later date is mutually agreed between the Parties), and to supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested pursuant to the HSR Act and to take all other actions necessary to cause the expiration or termination of the applicable waiting periods under the HSR Act as soon as reasonably practicable and (y) make all other necessary or advisable filings as promptly as reasonably practicable after the date hereof, and to supply as promptly as reasonably practicable and advisable any additional information and documentary materials that may be requested under any AntitrustRegulatory Laws. Notwithstanding anything to the contrary in this Agreement, none of Parent, PurchaserMerger Sub I, Merger Sub II or any of their respective Subsidiaries shall be required to, and the Company may not and may not permit any Subsidiary to, without the prior written consent of Parent, become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any requirement, condition, limitation, understanding, agreement or order to (A) sell, license, assign, transfer, divest, hold separate or otherwise dispose of any assets, business or portion of business of the Company, the Surviving Corporation, the Surviving Company, Parent, PurchaserMerger Sub I, Merger Sub II or any Subsidiary of any of the foregoing, (B) conduct, restrict, operate, invest or otherwise change the assets, the business or portion of the business of the Company, the Surviving Corporation, the Surviving Company, Parent, PurchaserMerger Sub I, Merger Sub II or any Subsidiary of any of the foregoing in any manner or (C) impose any restriction, requirement or limitation on the operation of the business or portion of the business of the Company, the Surviving Corporation, the Surviving Company, Parent, PurchaserMerger Sub I, Merger Sub II or any Subsidiary of any of the foregoing;foregoing, in the case of each of clauses (A), (B) and (C), if any such action would reasonably be expected to, individually or in the aggregate, (x) materially reduce the reasonably anticipated benefits to Parent of the transactions contemplated by this Agreement or (y) impact Parent, the Company or their respective Subsidiaries in a manner or amount that is material relative to the value of the Company and the Company Subsidiaries, taken as a whole; provided that if requested by Parent, the Company or its Subsidiaries will become subject to, consent to or offer or agree to, or otherwise take any action with respect to, any such requirement, condition, limitation, understanding, agreement or order so long as such requirement, condition, limitation, understanding, agreement or order is only binding on the Company or its Subsidiaries in the event the Closing occurs.
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(b) Each of Parent and the Company shall, in connection with obtainingand without limiting the efforts referenced in Section 6.2(a) to obtain all waiting period expirations or terminations, consents, clearances, waivers, licenses, orders, registrations, approvals, permits and authorizations for the Transactions under the HSR Act or any other AntitrustRegulatory Law, contemplated bySection 7.2(a), but subject(i) to the terms ofSection 7.2(a), (i)extent not prohibited by applicable Law, cooperate in all respects and consult with each other in connection with any filing or submission and in connection with any investigation or other inquiry, including any proceeding initiated by a private party, including by allowing the other Party to have a reasonable opportunity to review in advance and comment on drafts of filings and submissions and reasonably considering in good faith comments of the other Party and furnish the other Party with such necessary information and reasonable assistance as the other Party may reasonably request in connection with its preparation of necessary filings or submissions of information to any such Governmental Entity, (ii) promptly inform the other Party of any communication received by such Party from, or given by such Party to, the Antitrust Division of the Department of Justice (the “DOJ”), the Federal Trade Commission (the “FTC”) or any other Governmental Entity, by promptly providing copies to the other Party of any such written communications (or, in the case of oral communications, advise the other Party of such communications), and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the Transactions and (iii) permit the other Party to review in advance any communication that it gives to, and consult with each other in advance of any meeting, substantive telephone call or conference with, the DOJ, the FTC or any other Governmental Entity or, in connection with any proceeding by a private party, with any other Person, and to the extent permitted by the DOJ, the FTC or other applicable Governmental Entity or other Person, give the other Party the opportunity to attend and participate in any in-person meetings, substantive telephone calls or conferences with the DOJ, the FTC or other Governmental Entity or other Person;provided,however, that materials required to be provided pursuant to the foregoingclauses (i)-(iii) may be redacted (A) to remove references concerning the valuation of Parent, Company or any of their respective Subsidiaries, (B) as necessary to comply with contractual arrangements and (C) as necessary to address reasonable privilege or confidentiality concerns;provided, further,
that each of Parent and the Company may, as each deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other under thisSection 7.2(b)6.2(b) as “Antitrust Counsel Only Material” which such material and the information contained therein shall be given only to the outside antitrust counsel of the recipient and will not be disclosed by such outside counsel to employees, officers or directors of the recipient unless express permission is obtained in advance from the source of the materials (Parent on the one hand or the Company on the other) or its legal counsel.
(c) Prior toIn connection with and without limiting the Closing, the parties shall use commercially reasonable efforts to, and shall cooperate in good faith with one another to, identify any third party consents (or notices) under any Contracts of the Company or a Company Subsidiary that are necessary or desirable for the consummation of the Transactions. The Company shall, and shall cause any applicable Company Subsidiary to, use commercially reasonable efforts to obtain any such third-party consent (or deliver any such notices)foregoing, in the event that Parent requests the Company to do so;provided,however,so, the Company shall give any notices to third parties required under Contracts, and the Company shall use, and cause each of the parties acknowledges and agreesCompany Subsidiaries to use, its reasonable best efforts to obtain any third party consents to any Contracts that obtaining any such consentare necessary, proper or approval shall not, in and of itself, be a conditionadvisable to consummate the Offer orTransactions, including the Merger.Mergers. Notwithstanding anything to the contrary herein, none of Parent, the Company or any of their respective Subsidiaries shall be required to pay any consent or other similar fee, payment or consideration, make any other concession or provide any additional security (including a guaranty), to obtain such third party consents (except, in the case of the Company, if requested by Parent and either (a)(i) reimbursed or indemnified for by Parent or (b)(ii) subject to the occurrence of the Acceptance Time)Closing).
Section 7.3.6.3. Publicity. So long asFrom and after the date hereof until the earlier of the Closing or the date, if any, on which this Agreement is in effect,validly terminated pursuant to Section 8.1, neither the Company nor Parent, nor any of their respective Subsidiaries, shall issue or cause the publication of any press release or other public announcement or disclosure with respect to the Offer, the Merger,Mergers, the other Transactions or this Agreement or the LetterVoting Agreement without the prior written consent of the other Party, unless such Party determines, after consultation with outside counsel, that it is required by applicable Law or by any listing agreement with or the listing rules of a national securities exchange or trading market to issue or cause the publication of such press release or other public announcement or disclosure with respect to the Offer, the Merger,Mergers, the other Transactions or this Agreement or the LetterVoting Agreement, in which event such Party shall endeavor, on a basis reasonable under the circumstances, to provide a meaningful opportunity to the other Party to review and comment upon such press release or other announcement or disclosure in advance and shall give due consideration to all reasonable additions, deletions or
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changes suggested thereto;provided,however, that (i) the Parties shall not be required by thisSection 7.36.3 to provide any such review or opportunity to comment to the other Party relating to any dispute between the Parties relating to this Agreement;provided,further, that (ii) each Party and their respective Subsidiaries and Representatives may make statements that are consistent with previous press releases, public disclosures or public statements made by Parent or the Company in compliance with thisSection 7.36.3;provided, further, that or make statements regarding the actual or expected financial impact (including earnings guidance) of the Transactions on such Party; and (iii) the obligations set forth in thisSection 7.36.3 shall not apply to any communication regarding an Acquisition Proposal in accordance with Section 5.3(f)or a Change of Recommendation.Recommendation in accordance with Section 5.3.
Section 7.4.6.4. D&O Insurance and Indemnification.
(a) For six (6) years from and after the First Effective Time, Parent shall, or shall cause the Surviving Company to, indemnify and hold harmless all past and present directors and officers of the Company and the Company Subsidiaries (collectively, the “Indemnified Parties”) against any costs or expenses (including advancing attorneys’ fees and expenses prior to the final disposition of any actual or threatened claim, suit, proceeding or investigation to each Indemnified Party to the fullest extent permitted by applicable Law and the Company Governing Documents;provided that such Indemnified Party agrees in advance to return any such funds to which a court of competent jurisdiction determines in a final, nonappealable judgment that such Indemnified Party is not ultimately entitled), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, investigation, suit or proceeding in respect of acts or omissions occurring or alleged to have occurred at or prior to the First Effective Time (including acts or omissions occurring in connection with the approval of this Agreement and the consummation of the Offer, the MergerMergers or any of the other Transactions), whether asserted or claimed prior to, at or after the First Effective Time,
in connection with such Persons serving as an officer, director, employee or other fiduciary of the Company or any Company Subsidiary or of any other Person if such service was at the request or for the benefit of the Company or any Company Subsidiary, to the fullest extent permitted by applicable Law and the Company Governing Documents or the organizational documents of the applicable Company Subsidiary (as applicable) or any indemnification agreements with such Persons in existence on the date of this Agreement as set forth on Section 6.4(a) of the Company Disclosure Letter and provided to Parent prior to the date of this Agreement. The Parties agree that all rights to elimination of liability, indemnification and advancement of expenses for acts or omissions occurring or alleged to have occurred at or prior to the First Effective Time, whether asserted or claimed prior to, at or after the First Effective Time, now existing in favor of the Indemnified Parties as provided in the Company’s or itsthe Company Subsidiaries’ respective certificate of incorporation or bylaws (or comparable organizational documents) or in any indemnification agreement of the Company or a Company Subsidiary with any Indemnified Party in existence on the date of this Agreement as set forth on Section 6.4(a) of the Company Disclosure Letter and provided to Parent prior to the date of this Agreement shall survive the Transactions, including the Merger, and shall continue in full force and effect in accordance with the terms thereof.thereof; provided that, for the avoidance of doubt, such indemnification agreements shall survive the Closing only with respect to acts or omissions occurring or alleged to have occurred at or prior to the First Effective Time (whether asserted or claimed prior to, at or after the Effective Time) and shall not apply to any acts or omissions occurring or alleged to have occurred after the First Effective Time. Notwithstanding anything herein to the contrary, if any Indemnified Party notifies the Surviving Company on or prior to the sixth (6th)(6th) anniversary of the First Effective Time of a matter in respect of which such Person intends in good faith to seek indemnification pursuant to thisSection 7.46.4, the provisions of thisSection 7.46.4 shall continue in effect with respect to such matter until the final disposition of all claims, actions, investigations, suits and proceedings relating thereto.
(b) For six (6) years after the First Effective Time, Parent shall cause to be maintained in effect the provisions in (i) the Company Governing Documents and (ii) any indemnification agreement of the Company or a Company Subsidiary with any Indemnified Party in existence on the date of this Agreement and provided to Parent prior to the date of this Agreement, except to the extent that such agreement provides for an earlier termination, in each case, regarding elimination of liability, indemnification of officers, directors and employees
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and advancement of expenses that are in existence on the date hereof, and no such provision shall be amended, modified or repealed in any manner that would adversely affect the rights or protections thereunder of any such Indemnified Party in respect of acts or omissions occurring or alleged to have occurred at or prior to the First Effective Time (including acts or omissions occurring in connection with the approval of this Agreement and the consummation of the Offer, the MergerMergers or any of the other Transactions).
(c) At or prior to the First Effective Time, the Company shall purchase a six (6)-year prepaid “tail” policy on terms and conditions providing coverage retentions, limits and other material terms substantially equivalent to the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and the Company Subsidiaries with respect to matters arising at or prior to the First Effective Time;provided,however, that the Company shall not commit or spend on such “tail” policy, in the aggregate, more than three hundred percent (300%) of the last aggregate annual premium paid by the Company prior to the date hereof for the Company’s current policies of directors’ and officers’ liability insurance and fiduciary liability insurance (the “Base Amount”), and if the cost of such “tail” policy would otherwise exceed the Base Amount, the Company shall be permitted to purchase only as much coverage as reasonably practicable for the Base Amount. The Company shall in good faith cooperate with Parent prior to the Acceptance TimeClosing with respect to the procurement of such “tail” policy, including with respect to the selection of the broker, available policy price and coverage options.
(d) In the event Parent or the Surviving CompanyLLC or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Company,LLC, as the case may be, shall assume the obligations set forth in thisSection 7.46.4. The rights and obligations under thisSection 7.46.4 shall survive consummation of the Offer and the MergerMergers and shall not be terminated or amended in a manner that is adverse to any Indemnified Party without the written consent of such Indemnified Party. The Parties acknowledge and agree that the Indemnified Parties shall be third party beneficiaries of thisSection 7.46.4, each of whom may enforce the provisions thereof.
Section 7.5.6.5. Takeover Statutes. The Parties shall use their respective reasonable best efforts (a) to take all action necessary so that no Takeover Statute is or becomes applicable to the Offer, the MergerMergers or any of the other Transactions (including, for the avoidance of doubt, the LetterVoting Agreement) and (b) if any such Takeover Statute is or becomes applicable to any of the foregoing, to take all action necessary so that the Offer, the MergerMergers and the other Transactions (including, for the avoidance of doubt, the LetterVoting Agreement) may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise to eliminate or minimize the effect of such Takeover Statute on the Offer, the MergerMergers and the other Transactions (including, for the avoidance of doubt, the Letter Agreement).Transactions. No Change of Recommendation shall change, or be deemed to change, or permit the Company or the Company Board of Directors to change, in any manner or respect, the approval of the Company Board of Directors for purposes of causing any Takeover Statute to be inapplicable to the Merger or any of the other Transactions (including, for the avoidance of doubt, the LetterVoting Agreement).
Section 7.6.6.6. Obligations of PurchaserMerger Subs. Parent shall take all action necessary to cause PurchaserMerger Sub I and the Surviving CompanyMerger Sub II to perform theirits obligations under this Agreement and to consummate the Transactions, including the Offer and the Merger,Mergers, upon the terms and subject to the conditions set forth in this Agreement. For the avoidance of doubt, any violation of the obligations of PurchaserMerger Sub I and Merger Sub II under this Agreement shall also be deemed to be a breach of this Agreement by Parent.
Section 7.7.6.7. Employee Matters.
(a) Parent shall assume, honor and fulfill all of the Company Benefit Plans in accordance with their terms as in effect immediately prior to the date hereof or as subsequently amended or terminated as permitted pursuant to the terms of such Company Benefit Plans and this Agreement. Effective as of the First Effective
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Time and for a period of twelve (12) months thereafter, Parent shall provide to each employee of the Company and Company Subsidiary who continues to be employed by Parent or any Subsidiary thereof (the “Continuing Employees”), (i) substantially comparable aggregate on target earnings (for clarity, consisting of base pay or wage rate, as applicable, and incentive cash compensation opportunity, but excluding equity incentive compensation) to those in effect for such Continuing Employee immediately prior to the Closing; provided that, for each Continuing Employee whose compensation does not include commissions, such Continuing Employee shall also be provided at least the same wage rate or base salary as those in effect for such Continuing Employee immediately prior to the Closing, (ii) employee benefits (including health and welfare benefits, but excluding equity incentive compensation, retirement benefits and cash bonus opportunities) that are, in the aggregate, no less favorable to such Continuing Employee than, (A) for the period from the First Effective Time through December 31, 2021, those in effect for such Continuing Employee immediately prior to the Closing, and (ii) employee(B) for the period from January 1, 2022 through the first anniversary of the First Effective Time, those in effect for similarly situated employees of Parent and its Subsidiaries, and (iii) retirement benefits (including cash bonus opportunities, retirement, health and welfare benefits, but excluding equity incentive compensation) that are, in the aggregate, in Parent’s discretion, either (A) no less favorable to such Continuing Employee than those in effect for such Continuing Employee immediately prior to the Closing or (B) no less favorable than those in effect for similarly situated employees of Parent and its Subsidiaries.
(b) For all purposes (including purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Continuing Employees after the First Effective Time (the “New Plans”), each Continuing Employee shall, subject to applicable law and applicable tax qualification requirements, be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the First Effective Time, to the same extent as such Continuing Employee was entitled, before the First Effective Time, to credit for such service under any similar Company Benefit Plan in which such Continuing Employee participated or was eligible to participate immediately prior to the First Effective Time;provided that the foregoing shall not apply to the extent that its application would result in a duplication of benefits. In addition, and without limiting the generality of the foregoing, (i) each Continuing Employee shall be immediately eligible to participate, without any waiting time (other than any administrative delays in connection with any transition to Parent’s tax qualified defined contribution plan), in any and all New Plans to the extent coverage under such New Plan is of the same type as the Company Benefit Plan in which such Continuing Employee participated immediately before the First Effective Time (such plans, collectively, the “Old Plans”), and (ii)(A) for purposes of each New Plan providing medical, dental, pharmaceutical or vision benefits to any Continuing Employee, Parent or its applicable Subsidiary shall use its commercially reasonable efforts to cause all preexisting condition exclusions andactively-at-work requirements of such New Plan to be waived for such Continuing Employee and his or her covered dependents, unless such conditions werewould not have been waived under the Old Plan in which such Continuing Employee participated immediately prior to the First Effective Time and (B) Parent and its applicable Subsidiary shall use commercially reasonable efforts to cause any eligible expenses incurred by such Continuing Employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee’s participation in the corresponding New Plan begins to be taken into
account under such New Plan for purposes of satisfying all deductible and maximumout-of-out-of-pocket pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(c) If, at least ten (10) Business Days prior to the First Effective Time, Parent provides written notice to the Company directing the Company to terminate its 401(k) plan(s), the Company shall terminate any and all 401(k) plans effective as of the day immediately preceding the day on which the First Effective Time occurs (the “401(k) Termination Date”). In the event that Parent requests that such 401(k) plan(s) be terminated, the Company shall provide Parent with evidence that such 401(k) plan(s) have been terminated pursuant to resolution of the Company’s Board of Directors at least two (2) Business Days prior to the day on which the First Effective Time occurs;providedthat, prior to amending or terminating the Company’s 401(k) plan, the Company shall provide Parent with the form and substance of any applicable resolutions or amendments for review and approval (which approval shall not be unreasonably withheld, conditioned or delayed). If the Company 401(k) plan is
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terminated pursuant to thisSection 7.7(c)6.7(c), then as soon as practicable following the 401(k) Termination Date, Parent shall permit all Continuing Employees who were eligible to participate in the Company 401(k) plan immediately prior to the 401(k) Termination Date to participate in Parent’s 401(k) plan and shall permit each such Continuing Employee to elect to transfer his or her account balance when distributed from the terminated Company 401(k) plan, including any outstanding participant loans, to Parent’s 401(k) plan, except to the extent accepting such transfers would adversely affect thetax-qualified status of Parent’s 401(k) plan or as may be prohibited by Parent’s 401(k) plan.
(d) Nothing in this Agreement shall confer upon any Continuing Employee any right to continue in the employ or service of Parent or any affiliate of Parent, or shall interfere with or restrict in any way the rights of Parent or any affiliate of Parent, which rights are hereby expressly reserved, to discharge or terminate the services of any Continuing Employee at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between Parent, the Company or any affiliate of Parent and the Continuing Employee or any severance, benefit or other applicable plan or program covering such Continuing Employee. Notwithstanding any provision in this Agreement to the contrary, nothing in thisSection 7.76.7 shall (i) be deemed or construed to be an amendment or other modification of any Company Benefit Plan or employee benefit plan of Parent, Merger Sub I or PurchaserMerger Sub II or (ii) create any third party rights in any current or former service provider of the Company or its affiliates (or any beneficiaries or dependents thereof).
(e) The Company shall use commercially reasonable efforts to terminate all Contracts, arrangements or relationships between the Company or any Company Subsidiary, on the one hand, and any professional employer organization, on the other hand, effective as of the Closing Date.
Section 7.8.6.8. Rule 16b-3. Prior to the First Effective Time, the Company and Parent shall, as applicable, take all such steps as may be reasonably necessary or advisable hereto to cause any dispositions of Company equity securities (including derivative securities) and Convertible Notes and acquisitions of Parent equity securities pursuant to the Transactions by each individual who is a director or officer of the Company subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company to be exempt underRule 16b-3 promulgated under the Exchange Act.
Section 7.9.6.9. Stockholder Litigation. The Company shall provide Parent prompt notice (and in any event within forty-eight (48) hours) of any litigation brought by any stockholder of the Company or purported stockholder of the Company against the Company, any of its Subsidiaries and/or any of their respective directors or officers relating to the Offer, the MergerMergers or any of the other Transactions or this Agreement or the LetterVoting Agreement, and shall keep Parent informed on a prompt and timely basis with respect to the status thereof. The Company shall give Parent the opportunity to participate (at Parent’s expense) in the defense or settlement of any such litigation and reasonably cooperate with Parent in conducting the defense or settlement of such litigation, and no such settlement shall be agreed without Parent’s prior written consent, which consent shall not be unreasonably withheld or delayed, except that Parent may, in its sole discretion, withhold such consent to any settlement which does not include a full release of Parent and its affiliates (including the Surviving Corporation, the Surviving Company and itstheir respective Subsidiaries) or which imposes an injunction or other equitable relief afteron the Effective Time uponCompany, Parent or any of itstheir affiliates (including, after the First Effective Time, the Surviving Corporation, the Surviving Company and itstheir respective Subsidiaries). In the event of, and to the extent of, any conflict or overlap between the provisions of thisSection 7.96.9 andSection 6.15.1 orSection 7.26.2, the provisions of thisSection 7.96.9 shall control.
Section 7.10.6.10. Delisting. Each of the Parties agrees to cooperate with the other Parties in taking, or causing to be taken, all actions necessary to delist the Class A Common Stock from the NYSE and terminate its registration under the Exchange Act;provided that such delisting and termination shall not be effective until at or after the First Effective Time.
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Section 7.11.6.11. Director Resignations. The Company shall use its reasonable best efforts to cause to be delivered to Parent resignations executed by each director of the Company in office as of immediately prior to the First Effective Time and effective upon the First Effective Time.
Section 7.12.6.12. Stock Exchange Listing. Parent shall use its reasonable best efforts to cause the shares of Parent Common Stock to be issued in the Offer and the MergerMergers to be approved for listing on the NYSE, subject to official notice of issuance.
Section 7.13. 14d-10 Matters. The Parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of the Company, including the Company Benefit Plans (collectively, the “Arrangements”), to certain holders of Company Common Stock and holders of Company Equity Awards. The Compensation Committee of the Company Board of Directors (the “Company Compensation Committee”) (a) at a meeting to be held prior to the Acceptance Time, has duly adopted or will duly adopt resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning ofRule 14d-10(d)(1) under the Exchange Act (i) each Arrangement effective on or prior to the date hereof or entered into after the date hereof and prior to the Effective Time and (ii) the terms ofSection 7.4 andSection 7.7 and (b) will take all other actions necessary to satisfy the requirements of thenon-exclusive safe harbor underRule 14d-10(d)(2) under the Exchange Act, including with respect to the foregoing arrangements and any other applicable transactions contemplated by this Agreement. The Company represents and warrants that each member of the Company Compensation Committee is an “independent director” in accordance with the requirements ofRule 14d-10(d)(2) under the Exchange Act.
Section 7.14.6.13. Certain Tax Matters.
(a) None of the Parties shall (and each Party shall cause its respective Subsidiaries not to) knowingly take any action (or knowingly fail to take any reasonable action) which action (or failure to act) would or would reasonably be expected to prevent or impede the Offer and the Merger,Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code. The Parties intend this Agreement to report and, exceptmeet the requirements of measuring continuity of interest pursuant to the extent otherwise required by a determination as such term is used in Treasury Regulations Section 1313 of the Code,1.368-1(e)(2)(i). The Parties shall report,treat, for U.S. federal income tax purposes, the Offer and the Merger,Mergers, taken together, as a “reorganization” within the meaning of Section 368(a) of the Code and no Party shall take any position for Tax purposes inconsistent therewith, except to the extent otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code.
(b) Each of Parent, Merger Sub I, Merger Sub II and the PartiesCompany shall use its reasonable best efforts and will cooperate in good faith with one another to obtain the opinions of counsel referred to in Section 7.2(e)and Section 7.3(d). In connection therewith, Parent shall deliver to Wachtell, Lipton, Rosen & Katz, counsel to Parent (“Parent’s Counsel”), and Latham & Watkins LLP, counsel to the Company (“Company’s Counsel”), a representation letter dated as of the Closing Date (and, if requested, dated as of the date the registration statement shall have been declared effective by the SEC or such other date(s) as determined necessary by counsel in connection with the filing of the registration statement or its exhibits) and signed by an officer of Parent (the “Parent Tax Representation Letter”), and the Company shall deliver to Parent’s Counsel and Company’s Counsel a representation letter dated as of the Closing Date (and, if requested, dated as of the date the registration statement shall have been declared effective by the SEC or such other date(s) as determined necessary by counsel in connection with the filing of the registration statement or its exhibits) and signed by an officer of the Company (the “Company Tax Representation Letter”); provided that, in each case, the representation letter shall contain such customary representations, warranties and covenants as are reasonably necessary or appropriate to allow each of Parent’s Counsel and Company’s Counsel to provide the opinions of counsel referred to in Section 7.2(e) and Section 7.3(d).
Section 6.14. Financing Cooperation(a) . Prior to the First Effective Time, the Company shall, and shall cause the Company Subsidiaries to, use its and their reasonable best efforts to, and shall use its reasonable best efforts to cause its and their respective Representatives to, provide customary cooperation and customary financial information, in each case that is reasonably requested by Parent in connection with any financing (the “Financing”) obtained or to be obtained by Parent for the purpose of financing the Transactions or any transaction undertaken in connection therewith (it being understood that the receipt of any such financing is not a condition to the Mergers), including by (i) furnishing, or causing to be furnished, to Parent (x) audited consolidated balance sheets and related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for the Company for each of the three most recently completed fiscal years of the Company ended at least ninety (90) days prior to the Closing Date prepared in accordance with GAAP applied on a basis consistent with that of the most recent fiscal year and (y) unaudited consolidated balance sheets and related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows (in each case, subject to normal year-end adjustments and absence of footnotes) for each subsequent fiscal quarter ended on a date that is at least forty-five (45) days before the Closing Date, and (ii) using reasonable best efforts to cause the Company’s and the Company Subsidiaries’ independent accountants, as requested by Parent, to consent to the use of their audit reports on the financial statements of the Company and the Company Subsidiaries in any materials relating to the Financing or in connection with any filings made with the SEC or pursuant to the
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Securities Act or Exchange Act in connection with the Financing and to provide any “comfort letters” (including drafts thereof which such accountants are prepared to issue at the time of pricing and at closing of any offering or placement of the Financing) necessary and reasonably requested by Parent in connection with any debt capital markets transaction comprising a part of the Financing and to participate in customary due diligence sessions; provided, however, that (A) no such cooperation shall be required to the extent it would (i) unreasonably disrupt the conduct of the Company’s business, (ii) require the Company or the Company Subsidiaries to incur any fees, expenses or other liability prior to the First Effective Time for which it is not promptly reimbursed or simultaneously indemnified, (iii) be reasonably expected to cause any director, officer or employee of the Company or any Company Subsidiary to incur any material personal liability, (iv) require the Company to waive or amend any terms of this Agreement or (v) require the Company to provide any information that is prohibited or restricted by applicable Law or is legally privileged (provided, however, that the Company shall use its commercially reasonable efforts to make appropriate substitute arrangements to permit reasonable disclosure not in violation of Law or to allow for such access or disclosure to the maximum extent that does not result in a loss of such legal privilege); and (B) the Company and the Company Subsidiaries shall not be required to execute any credit or security documentation or any other definitive agreement (other than customary authorization letters) or provide any indemnity, in each case of this clause (B), prior to the First Effective Time; provided, further, that in no event shall the Company’s breach of any obligations in this Section 6.14(a) be considered in determining the satisfaction of the condition set forth in Section 7.2(b) unless (i) the Company shall not have attempted in good faith to comply with such obligation in this Section 6.14(a) and (ii) such breach is the primary cause of Parent being unable to obtain the proceeds of the Financing at the First Effective Time.
(b) Parent shall indemnify and hold harmless the Company, the Company Subsidiaries, and their respective Representatives from and against any and all liabilities or losses suffered or incurred by them in connection with the Financing and any information utilized in connection therewith, except in the event such liabilities or losses arose out of or result from (i)the willful misconduct, gross negligence or bad faith of the Company and the Company Subsidiaries or any of their respective Representatives, (ii) the material breach by the Company of its obligations under this Agreement or (iii) any material misstatement or omission in information provided in writing hereunder by or on behalf of the Company, the Company Subsidiaries or any of their respective Representatives for use in connection with the Financing (clauses (i) through (iii) collectively, the “Indemnity Exceptions”). If this Agreement is terminated pursuant to Article VIII, Parent shall, promptly upon request by the Company, reimburse the Company and the Company Subsidiaries for all reasonable and documented out-of-pocket costs actually incurred by the Company and the Company Subsidiaries (including those of its Representatives) in connection with taking action required or requested by Parent pursuant to this Section 6.14, other than those arising out of or resulting from the Indemnity Exceptions. For the avoidance of doubt, the Parties acknowledge and agree that the provisions contained in this Section 6.14 represent the sole obligation of the Company, the Company Subsidiaries and their respective affiliates and Representatives with respect to cooperation in connection with the arrangement of the Financing and no other provision of this Agreement (including the Exhibits and the Company Disclosure Letter) shall be deemed to expand or modify such obligations.
Section 6.15. Treatment of Company Indebtedness.
(a) The Company shall (and shall cause the Company Subsidiaries to) deliver all notices and take all other actions required to facilitate at or prior to the First Effective Time the termination of all commitments outstanding under the Company Credit Agreement, the repayment in full of all obligations outstanding thereunder, the release of all Liens securing such obligations, and the release of all guarantees in connection therewith. In furtherance and not in limitation of the foregoing, the Company shall, and shall cause the Company Subsidiaries to, (A) use reasonable best efforts to deliver to Parent’sParent at least seven (7) Business Days prior to the Closing Date, a draft payoff letter and draft related release documentation and (B) deliver to Parent at least two (2) Business Days prior to the Closing Date, an executed payoff letter and executed related release documentation, in each case, with respect to the Company Credit Agreement (the “Payoff Letter”) in form and substance customary for transactions of this type, from the agent on behalf of the Persons to whom such
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Indebtedness is owed, which Payoff Letter together with any related release documentation shall, among other things, include the payoff amount and provide that all guarantees and Liens granted in connection therewith relating to the assets, rights and properties of the Company and the Company’s tax counselCompany Subsidiaries securing such Indebtedness and tax advisorsany other obligations secured thereby, shall, upon the payment of the amount set forth in the Payoff Letter at or prior to the First Effective Time, be released and terminated.
(b) Within the time periods required by the terms of the Convertible Notes Indenture, the Company shall, and shall cause the Company Subsidiaries to, take all actions required by, or reasonably requested by Parent pursuant to, the Convertible Notes Indenture and applicable Law to be performed by the Company or any Company Subsidiary at or prior to the Second Effective Time as a certificate signed by an officerresult of Parent (and Purchaser)the execution and delivery of this Agreement or the Company,consummation of the Transactions, including the giving of any notices that may be required or reasonably requested by Parent and delivery to the trustee, holders or other applicable Person, as applicable, containing representationsof any documents or instruments required or reasonably satisfactoryrequested by Parent to be delivered at or prior to the Second Effective Time to such counseltrustee, holders or advisorsother applicable Person, in each case in connection with the renderingexecution and delivery of this Agreement, the Transactions or as otherwise required by, or reasonably requested by Parent pursuant to, the Convertible Notes Indenture; provided that the Company (or the applicable Company Subsidiary) shall deliver a copy of any tax opinionssuch notice or other document to Parent at least three (3) Business Days prior to delivering or entering into such notice or other document in accordance with the terms of the Convertible Notes Indenture. Without limiting the generality of the foregoing, prior to the Second Effective Time, the Company agrees to cooperate with Parent, at Parent’s written request, by (i) executing and delivering (or causing to be issuedexecuted and delivered, as applicable) at the First Effective Time and/or Second Effective Time, as applicable, one or more supplemental indentures, officer’s certificates and opinions of counsel, in each case in form and substance reasonably acceptable to Parent, pursuant to the Convertible Notes Indenture and (ii) using its reasonable best efforts to cause the trustee under the Convertible Notes Indenture to execute at the First Effective Time and/or Second Effective Time, as applicable, any such supplemental indenture.
(c) Prior to the First Effective Time, the Company shall (i) facilitate the settlement of the Convertible Note Hedge Obligations substantially concurrently with the First Effective Time as reasonably requested by Parent (it being understood that any such counsel or advisorssettlement, including the timing thereof, will be subject to the terms of the Capped Call Confirmations, unless otherwise agreed by the relevant dealer thereunder) and (ii) cooperate with Parent with respect to its efforts to settle the treatmentConvertible Note Hedge Obligations and the negotiation of any termination or settlement payment or valuation related thereto; provided that the Company shall not (x) exercise any right that it may have to terminate the Convertible Note Hedge Obligations (other than any exercise or termination contemplated pursuant to Section 9(h)(i) of the OfferCapped Call Confirmations upon any conversion of Convertible Notes prior to the First Effective Time (a “Specified Exercise”)); it being agreed that the Company shall notify Parent in writing as promptly as practicable prior to any such exercise or termination) or (y) agree to amend, modify or supplement the terms relating to, or agree to any amount due upon, the termination or settlement thereof, in each case of clauses (x) and (y), without the Merger, taken together, as a reorganization withinprior written consent of Parent; provided, further, that nothing in this Section 6.15(c) shall require the meaning of Section 368(a)Company to (A) pay any fees, incur or reimburse any costs or expenses, or make any payment in connection with any Convertible Note Hedge Obligations prior to the occurrence of the Code,First Effective Time, (B) enter into or effect any settlement, termination, instrument or agreement, or agree to any settlement, termination or any other change or modification to any instrument or agreement, that is effective prior to the occurrence of the First Effective Time or (C) refrain from delivering, or delay the delivery of, any notice required by the terms of the Convertible Note Hedge Obligations or a notice contemplated by Section 9(h)(i) of the Capped Call Confirmations in connection with a Specified Exercise (it being understood that the Company will provide Parent with prior notice of any such delivery with an opportunity to comment on the relevant notice).
(d) Parent and/or one of its Subsidiaries may (i) commence one or more offers to purchase any or all of the outstanding Convertible Notes for cash, Parent Common Stock or a combination thereof (the “Offers to Purchase”); and/or (ii) solicit the consent of the holders of Convertible Notes regarding certain proposed amendments to the Convertible Notes Indenture (the “Consent Solicitations” and, together with any Offers to
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Purchase, the “Company Note Offers and Consent Solicitations”); provided that the closing of any such Offer to Purchase shall not be consummated prior to the First Effective Time and any such transaction shall be funded using consideration provided by Parent or any of its Subsidiaries (other than the Company or one of its Subsidiaries). Any Company Note Offers and Consent Solicitations shall be made on such terms and conditions (including price to be paid and conditionality) as are proposed by Parent or one of its Subsidiaries and which are permitted by the terms of such Convertible Notes, the Convertible Notes Indenture and applicable Laws, including SEC rules and regulations. Parent and its Subsidiaries shall consult with the Company regarding the material terms and conditions of any Company Note Offers and Consent Solicitations, including the timing and commencement of any Company Note Offers and Consent Solicitations and any tender deadlines. Parent shall not be permitted to commence any Company Note Offers and Consent Solicitations until Parent shall have provided to the Company the necessary offer to purchase, consent solicitation statement, letter of transmittal, press release, if any, in connection therewith, and each other document relevant to the transaction that will be distributed by Parent or any of its Subsidiaries to holders of the Convertible Notes in the applicable Company Note Offers and Consent Solicitations (collectively, the “Debt Offer Documents”) a reasonable period of time in advance of commencing the applicable Company Note Offers and Consent Solicitations to allow the Company and its counsel to review and comment on such Debt Offer Documents (and Parent shall consider in good faith comments of the Company and its counsel thereon). Subject to the receipt of the requisite consents, in connection with any or all of the Consent Solicitations, the Company shall execute a supplemental indenture to the Convertible Notes Indenture in accordance with the terms thereof amending the terms and provisions of such Convertible Notes Indenture as described in the applicable Debt Offer Documents in a form as reasonably requested by Parent, which supplemental indenture shall become effective promptly upon receipt of the requisite consents (or as otherwise contemplated in the applicable Consent Solicitation) but shall not become operative until the First Effective Time. At Parent’s or its Subsidiaries’ expense, the Company shall, and shall cause its Subsidiaries to and shall use its reasonable best efforts to cause its and their respective Representatives to, on a timely basis, upon the reasonable request of Parent or any of its Subsidiaries, provide cooperation in connection with any Company Note Offers and Consent Solicitations (including but not limited to requesting, and using reasonable best efforts to cause, the Company’s tax counsel and tax advisors shall be entitledindependent accountants to rely upon such representations in rendering any such opinions.
Section 7.15. Conversionprovide customary consents for use of Company Common Stock. If andtheir reports to the extent required in connection with any StockholderCompany Note Offers and Consent Solicitations); provided that prior to the First Effective Time, neither the Company nor counsel for the Company shall be required to furnish any certificates, legal opinions or negative assurance letters in connection with any Company Note Offers and Consent Solicitations (other than, in connection with the execution of the supplemental indentures relating to the Consent Solicitations, the Company delivering and using reasonable best efforts to cause counsel for the Company to deliver customary officer’s certificates and customary legal opinions (other than any opinions as to tax matters), respectively, to the trustee under the Convertible Notes Indenture, to the extent such certificates and opinions would not conflict with applicable Laws and would be accurate in light of the facts and circumstances at the time delivered) or execute any other instruments or agreements in connection therewith other than the supplemental indenture described in the immediately preceding sentence. The dealer manager, solicitation agent, information agent, depositary or other agent retained in connection with any Company Note Offers and Consent Solicitations will be selected by Parent or its Subsidiaries and their fees and out-of-pocket expenses will be paid directly by Parent. The consummation of any or all of the Company Note Offers and Consent Solicitations shall not be a condition to Closing. If at any time prior to the completion of the Company Note Offers and Consent Solicitations, any information should be discovered by the Company, Parent or one of their respective Subsidiaries that any of the Company, Parent or any of their respective Subsidiaries reasonably believes should be set forth in an amendment or supplement to the Debt Offer Documents, so that the Debt Offer Documents shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of circumstances under which they are made, not misleading, the party that discovers such information shall use reasonable best efforts to promptly notify the other party, and an appropriate amendment or supplement prepared by Parent describing such information shall be disseminated by or on behalf of the Parent to the holders of the applicable Convertible Notes (which supplement or amendment and dissemination may, at the reasonable direction of Parent, if related to information of the Company or any of its Subsidiaries take the form of a filing of a Current Report on Form 8-K);provided that Parent shall provide a copy of such amendment or supplement to the Company a reasonable
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period of time in advance of such dissemination to allow for Company and its counsel to review and comment on such amendment or supplement (and Parent shall consider in good faith and accept all reasonable comments of the Company and its counsel thereon).
(e) As promptly as practical on or after the Free Trade Date (as defined in the Letter Agreement) delivers toConvertible Notes Indenture) and in any event no later than the Company orDe-Legending Deadline Date (as defined in the Company’s transfer agent documentation to convert shares of Class B Common Stock into shares of Class A Common Stock pursuant to the Letter Agreement,Convertible Notes Indenture), the Company shall promptly take all actions within its controlremove the Restrictive Notes Legend (as defined in the Convertible Notes Indenture), or cause to effectbe deemed removed the Restrictive Notes Legend, from the Convertible Notes, and cause such conversion. Each of Parent, Purchaser and the Company shall cooperateConvertible Notes to implement the terms of the Letter Agreement, including with respect to the delivery ofbe assigned an “Irrevocable Conversion Notice” pursuant to Section 1.3 thereof and the conversion of “Subject Shares” pursuant to Section 1.2unrestricted CUSIP number as a result thereof, in each case, in accordance with the terms of the Letter Agreement.
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1.7.1. Conditions to Each Party’s Obligations to Effect the Merger. The respective obligations of each Party to effectconsummate the MergerMergers shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by Parent, PurchaserMerger Sub I, Merger Sub II and the Company, as the case may be, to the extent permitted by applicable Law:
(a) Purchase of Shares of Company Common StockStockholder Approval. PurchaserThe Company shall have acceptedobtained the Company Stockholder Approval.
(b) NYSE Listing. The shares of Parent Common Stock to be issued in the First Merger shall have been approved for paymentlisting on the NYSE (or any successor inter-dealer quotation system or stock exchange thereto) subject to official notice of issuance; provided that Parent shall not be entitled to invoke this condition if it has not complied in all material respects with Section 6.12.
(c) Registration Statement. The Registration Statement shall have become effective under the Securities Act and shall not be the subject of any stop order or proceeding seeking a stop order.
(d) Government Consents. (i) The waiting period (or extensions thereof) under the HSR Act relating to the Transactions shall have expired or been terminated and (ii) all applicable filings, registrations, waiting periods (or extensions thereof) and approvals under each other applicable Regulatory Law relating to the Transactions that is set forth on Section 7.1(d) of the shares of Company Common Stock validly tenderedDisclosure Letter shall have been made, expired, terminated or obtained, as the case may be, and not validly withdrawn pursuant to the Offer.remain in effect.
(b)(e) No Legal Prohibition. No Governmental Entity of competent jurisdiction shall have (i) enacted, issued or promulgated any Law that is in effect as of immediately prior to the First Effective Time or the Second Effective Time, as applicable or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect as of immediately prior to the First Effective Time or the Second Effective Time, as applicable, in each case which has the effect of restraining, enjoining or otherwise prohibiting the consummation of the Merger.Mergers.
Section 7.2. Conditions to Obligations of Parent. The obligations of Parent, Merger Sub I and Merger Sub II to consummate the Mergers shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by Parent, Merger Sub I and Merger Sub II, as the case may be, to the extent permitted by applicable Law:
(a) Representations and Warranties. (A) The representations and warranties of the Company set forth in Section 3.1(a) (other than the last sentence thereof) (Qualification, Organization, Subsidiaries, etc.), the first
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sentence of Section 3.1(b) (Qualification, Organization, Subsidiaries, etc.), Section 3.3 (Corporate Authority), Section 3.22 (Opinion of Financial Advisor), Section 3.23 (State Takeover Statutes; Anti-Takeover Laws) and Section 3.25 (Finders and Brokers) (x) that are qualified by materiality or Company Material Adverse Effect shall be true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date) and (y) that are not qualified by materiality or Company Material Adverse Effect shall be true and correct in all material respects as of the date hereof and shall be true and correct in all material respects as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (B) the representations and warranties of the Company set forth in Section 3.2(a) (Capitalization), Section 3.2(c) (Capitalization), Section 3.2(d) (Capitalization) and Section 3.2(e) (Capitalization) shall be true and correct other than for de minimis inaccuracies as of the date hereof and shall be true and correct other than for de minimis inaccuracies as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (C) the representations and warranties of the Company set forth in Section 3.8(a) (Absence of Certain Changes or Events) shall be true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing as though made as of the Closing; and (D) the other representations and warranties of the Company set forth in this Agreement (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) shall be true and correct as of the date hereof and shall be true and correct as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date), except, with respect to this clause (D), where any failures of any such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall have performed or complied in all material respects with the obligations, covenants and agreements required to be performed or complied with by it under the Agreement at or prior to the Closing.
(c) No Company Material Adverse Effect. A Company Material Adverse Effect shall not have occurred on or after the date of the Agreement and be continuing as of immediately prior to the Closing.
(d) Company Officer’s Certificate. Parent shall have received a certificate, dated as of the Closing Date, signed by the chief executive officer or chief financial officer of the Company certifying that each of the conditions set forth in Section 7.2(a), Section 7.2(b) and Section 7.2(c) has been satisfied.
(e) Tax Opinion. Parent shall have received a written opinion from Parent’s Counsel, in form and substance reasonably satisfactory to Parent, dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, for U.S. federal income Tax purposes the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering the opinion described in this Section 7.2(e), Parent’s Counsel shall be entitled to rely on the Parent Tax Representation Letter and the Company Tax Representation Letter and such other information as Parent’s Counsel reasonably deems relevant.
Section 7.3. Conditions to Obligations of the Company. The obligations of the Company to consummate the Mergers shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions, any and all of which may be waived in whole or in part by the Company to the extent permitted by applicable Law:
(a) Representations and Warranties. (A) The representations and warranties of Parent, Merger Sub I and Merger Sub II set forth in Section 4.1 (Qualification, Organization, etc.), Section 4.3 (Corporate Authority) and Section 4.13 (Finders and Brokers) (x) that are qualified by materiality or Parent Material Adverse Effect
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shall be true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date) and (y) that are not qualified by materiality or Parent Material Adverse Effect shall be true and correct in all material respects as of the date hereof and shall be true and correct in all material respects as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (B) the representations and warranties of Parent, Merger Sub I and Merger Sub II set forth in Section 4.2(a) (Capitalization), Section 4.2(c) (Capitalization) and Section 4.2(d) (Capitalization) shall be true and correct other than for de minimis inaccuracies as of the date hereof and shall be true and correct other than for de minimis inaccuracies as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (C) the representations and warranties of Parent, Merger Sub I and Merger Sub II set forth in Section 4.8 (Absence of Certain Changes or Events) shall be true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing as though made as of the Closing; and (D) the other representations and warranties of Parent, Merger Sub I and Merger Sub II set forth in this Agreement (without giving effect to any qualification as to materiality or Parent Material Adverse Effect contained therein) shall be true and correct as of the date hereof and shall be true and correct as of the Closing as though made as of the Closing (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date), except, with respect to this clause (D), where any failures of any such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or Parent Material Adverse Effect contained therein) have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) Performance of Obligations of Parent. Each of Parent, Merger Sub I and Merger Sub II shall have performed or complied in all material respects with the obligations, covenants and agreements required to be performed or complied with by it under the Agreement at or prior to the Closing.
(c) Parent Officer’s Certificate. The Company shall have received a certificate, dated as of the Closing Date, signed by the chief executive officer or chief financial officer of Parent certifying that each of the conditions set forth in Section 7.3(a) and Section 7.3(b) has been satisfied.
(d) Tax Opinion. The Company shall have received a written opinion from Company’s Counsel, in form and substance reasonably satisfactory to the Company, dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions, set forth or referred to in such opinion, for U.S. federal income Tax purposes the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering the opinion described in this Section 7.3(d), Company’s Counsel shall be entitled to rely on the Parent Tax Representation Letter and the Company Tax Representation Letter and such other information as Company’s Counsel reasonably deems relevant.
TERMINATION
Section 9.1.8.1. Termination. This Agreement may be terminated and the Offer, the MergerMergers and the other Transactions may be abandoned at any time before the Acceptance Time,Closing, as follows (with any termination by Parent also being an effective termination by Purchaser)Merger Sub I and Merger Sub II):
(a) by mutual written consent of Parent and the Company;
(b) by the Company, in the event that (i) the Company is not then in material breach of this Agreement such that the conditions to the Offer set forth inclauses (F)(1) or(F)(2) ofAnnex C would not then be satisfied if the Expiration Date were the date of the termination pursuant to thisSection 9.1(b) and (ii) (A) Parent, Merger Sub I and/or PurchaserMerger Sub II shall have breached, failed to perform or violated their respective covenants or agreements under this Agreement which breach, failure to perform or violation would reasonably be expected to have a Parent Material Adverse Effect, or (B)(ii) any
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of the representations and warranties of Parent, Merger Sub I or PurchaserMerger Sub II set forth in this Agreement shall have become inaccurate, which inaccuracy (without giving effect to any qualification as to materiality or Parent Material Adverse Effect contained therein) would reasonably be expected to have a Parent Material Adverse Effect, and in eacheither case ofclausesclause (A)(i) or (ii) in a manner that would give rise to the failure of a condition set forth in Section 7.3(a) or Section 7.3(b) and(B) such breach, failure to perform, violation or inaccuracy is not capable of being cured by the Outside Date or, if capable of being cured by the Outside Date, is not cured by Parent, Merger Sub I or Purchaser,Merger Sub II, as applicable, before the earlier of (x) the Business Day immediately prior to the Outside Date and (y) the thirtieth (30th) calendar day following receipt of written notice from the Company of such breach, failure to perform, violation or inaccuracy;provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 8.1(b) if the Company is then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach would give rise to the failure of a condition set forth in Section 7.2(a), Section 7.2(b) or Section 7.2(c);
(c) by Parent, in the event that (i) neither Parent nor Purchaser is then in material breach of this Agreement such that the Company would have the right to terminate this Agreement pursuant toSection 9.1(b) (notwithstanding any cure period) on the date of the termination pursuant to thisSection 9.1(c) and (ii) (A) the Company shall have breached, failed to perform or violated its covenants or agreements under this Agreement or (B)(ii) any of the representations and warranties of the Company set forth in this Agreement shall have become inaccurate, in either case ofclausesclause (A)(i) or(B)(ii) in a manner that would give rise to the rightfailure of Parent and Purchaser not to accept for payment and pay for any shares of Company Common Stock pursuant toa condition set forth in clausesSection (F)(1)7.2(a), Section 7.2(b) or(F)(2)Section ofAnnex C (assuming the expiration of the Offer as of such time) 7.2(c) and such breach, failure to perform, violation or inaccuracy is not capable of being cured by the Outside Date or, if capable of
being cured by the Outside Date, is not cured by the Company before the earlier of (x) the Business Day immediately prior to the Outside Date and (y) the thirtieth (30th) calendar day following receipt of written notice from Parent of such breach, failure to perform, violation or inaccuracy;
(d) by either Parent or the Company (i) if the Offer shall have terminated or expired in accordance with its terms (subject to the rights and obligations of Parent or Purchaser to extend the Offer pursuant toSection 1.1(e)(ii)) without Purchaser having accepted for payment any shares of Company Common Stock pursuant to the Offer;provided that (A)Parent shall not have the right to terminate this Agreement pursuant to thisSection 9.1(d)(i)8.1(c) shall not be available to Parent if Parent, Merger Sub I or Purchaser shall have failedMerger Sub II is then in breach of any of its representations, warranties, covenants or agreements contained in this Agreement, which breach would give rise to complythe failure of a condition set forth in any material respect with its respective obligations underSection 1.1(e)(ii)7.3(a) andor Section 1.1(f)7.3(b) and (B) the right to terminate this Agreement pursuant to thisSection 9.1(d)(i) shall not be available to;
(d) by either Parent or the Company if the Company shall have failed to comply in any material respect with its obligations underSection 1.2 andSection 6.3; or (ii) if the Acceptance TimeClosing has not occurred on or before October 9, 2019 (theAugust 1, 2021 (as extended, the “Outside Date”);provided that (A)(i) if, on the Outside Date, all of the conditions to the Offer,Closing, other than the conditions set forth inclauses (B)Section 7.1(d) and(C)Section 7.1(e) (to the extent any such injunction or order is in respect of, or any such Law is, the HSR Act or any other AntitrustRegulatory Law) ofAnnex C and those conditions to the Offer that by their nature are to be satisfied at the expiration of the Offer (ifClosing (but provided that such conditions (other thanshall then be capable of being satisfied if the Minimum Condition) would be satisfied or validly waivedClosing were the expiration of the Offer to occur attake place on such time)date), shall have been satisfied or waived, then the Outside Date shall automatically be extended one (1) time for all purposes hereunder for an additional three (3) months, which date shall thereafter be deemed to January 9, 2020be the Outside Date and (B)(ii) on the Outside Date as so extended pursuant to clause (i) of this Section 8.1(d), all of the conditions to Closing, other than the conditions set forth in Section 7.1(d) and Section 7.1(e) (to the extent any such injunction or order is in respect of, or any such Law is, the HSR Act or any other Regulatory Law) and those conditions that by their nature are to be satisfied at Closing (but provided that such conditions shall then be capable of being satisfied if the Closing were to take place on such date), shall have been satisfied or waived, then the Outside Date shall automatically be extended one (1) additional time for all purposes hereunder for an additional three (3) months, which date shall thereafter be deemed to be the Outside Date; provided, further, that the right to terminate this Agreement pursuant to thisSection 9.1(d)(ii)8.1(d) shall not be available to any Party whose action or failure to fulfill any obligation under this Agreement has been a proximate cause of or directly resulted in, the failure of the Transactions to be consummated by the Outside Date and such action or failure to act constitutes a material breach of this Agreement;
(e) by Parent, if, prior to obtaining the Acceptance Time,Company Stockholder Approval, (i) the Company Board of Directors shall have effected a Change of Recommendation (whether or not in compliance with this Agreement) or (ii) the Company has materially breachedSection 6.35.3;
(f) by either the Company or Parent if a Governmental Entity of competent jurisdiction shall have issued a final, non-appealable order, injunction, decree or ruling in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the Transactions;
(g) by either the Company or Parent, if the Company Stockholder Approval shall not have been obtained upon a vote taken thereon at the Company Stockholders Meeting duly convened therefor or at any adjournment or postponement thereof; or
(g)
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(h) by the Company in order to effect a Change of Recommendation and substantially concurrently enter into a definitive agreement providing for a Superior Proposal;providedthat (i) the Company has complied in all material respects with the terms ofSection 6.3(e)5.3 and (ii) substantially concurrently with or prior to (and as a condition to) the termination of this Agreement, the Company pays to Parent the Termination Fee payable pursuant toSection 9.2(b)(iii).Fee.
Section 9.2.8.2. Effect of Termination.
(a) In the event of the valid termination of this Agreement as provided inSection 9.18.1, written notice thereof shall forthwith be given to the other Party or Parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall forthwith become null and void and there shall be no liability on the part of Parent, PurchaserMerger Sub I, Merger Sub II or the Company, except that the Confidentiality Agreement, this Section 1.1(e)(iv)8.2, this and Section 9.29.3 andthrough Section 10.3 throughSection 10.129.12 shall survive such termination;provided thatnothingthatnothing herein shall relieve any Party from liability for fraud or willful breach of this Agreement prior to such termination. For purposes of this Agreement:Agreement, (i) “willful breach” shall mean an action or omission taken or omitted to be taken that the breaching party intentionally takes (or fails to take) and actually knows would, or would reasonably be expected to, be or cause a material breach of this Agreement; and (ii) “fraud” shall mean common law fraud that is committed with actual knowledge of falsity and with the intent to deceive or mislead another.
(b) Termination Fee.
(i) If (A) (x) Parent terminates this Agreement pursuant toSection 9.1(d), (y)or the Company terminates this Agreement pursuant toSection 9.1(d)8.1(d), and at such time Parent would be permitted to terminate this Agreement pursuant to or Section 9.1(d)(i) or Section 9.1(d)(ii)8.1(g), as applicable, or (z) Parent terminates this Agreement pursuant toSection 9.1(c)8.1(c) as a result of a breach, failure to perform or violation described in such Section that (except with respect to a breach ofSection 6.3(a)5.3(a)) first occurred following the making of an Acquisition Proposal of the type referenced in the followingclause(B), (B) after the date hereof and prior to the date of such termination (or prior to the Company Stockholder Approval in the case of termination pursuant to Section 8.1(g)), abona fide Acquisition Proposal is publicly disclosed (whether by the Company or a third party), or otherwise made known to the Company Board of Directors or Companythe Company’s management, and in each case, is not withdrawn (publicly, if publicly disclosed) at least three (3) Business Days prior to the earlier of the Expiration Datedate of the Company Stockholders Meeting and the date of such termination and (C) within twelve (12) months of such termination, an Acquisition Proposal is consummated or a definitive agreement inwith respect ofto an Acquisition Proposal is entered into, then on or prior to the date that is the earlier of (x) the date any such Acquisition Proposal is consummated and (y) the date of entry in any such definitive agreement, the Company shall pay to Parent a fee of $552,000,000nine hundred million dollars ($900,000,000) in cash (the “Termination Fee”). Solely for purposes of thisSection 9.2(b)8.2(b)(i), the term “Acquisition Proposal”“Acquisition Proposal” shall have the meaning assigned to such term inAnnex A,, except that all references to “fifteen percent (15%)” and “eighty five percent (85%)” therein shall be deemed to be references to “fifty percent (50%).”
(ii) If (A) (x) Parent terminates this Agreement pursuant toSection 9.1(e)(i) orSection 9.1(e)(ii)8.1(e) or (y) the Company terminates this Agreement pursuant toSection 9.1(d)8.1(d) at a time when Parent would be permitted to terminate this Agreement pursuant to (1) Section 9.1(e)(i) orSection 9.1(e)(ii) and (2) Section 9.1(d)(i) orSection 9.1(d)(ii)8.1(e), as applicable, and (B) in the case of a termination pursuant toSection 9.1(e)(ii) only, the Company willfully breachedSection 6.3, then, within two (2) Business Days after such termination, the Company shall pay to Parent the Termination Fee.
(iii) If the Company terminates this Agreement pursuant toSection 9.1(g)8.1(h), substantially concurrently with or prior to (and as a condition to) such termination, the Company shall pay to Parent the Termination Fee.
(iv) In the event any amount is payable by the Company pursuant to the precedingclauses (i),(ii) or (iii), such amount shall be paid by wire transfer of immediately available funds to an account designated in writing by Parent. Notwithstanding anythingParent (which account shall be designated by Parent upon request by the Company to allow the contrary inCompany to pay or cause to be paid to Parent any amounts payable hereunder within the time periods required by this Agreement,Section 8.2). For the avoidance of doubt, in no event shall the Company be obligated to pay the Termination Fee on more than one occasion.
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(c) Each Party acknowledges that the agreements contained in thisSection 9.28.2 are an integral part of the Transactions and that, without these agreements, the Parties hereto would not enter into this Agreement. Each Party further acknowledges that the Termination Fee is not a penalty, but rather is liquidated damages in a reasonable amount that will compensate Parent, Merger Sub I and PurchaserMerger Sub II in the circumstances in which the Termination Fee is payable for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Transactions. In addition, if the Company fails to pay in a timely manner any amount due pursuant toSection 9.2(b)8.2(b), then (i) the Company shall reimburse Parent for all reasonableout-of-pocket costs and expenses (including disbursements and fees of outside legal counsel) incurred in the collection of such overdue amounts, including in connection with any related claims, actions or proceedings commenced and (ii) the Company shall pay to Parent interest on the amounts payable pursuant toSection 9.2(b)8.2(b) from and including the date payment of such amounts were due to but excluding the date of actual payment at the prime rate set forth in the Wall Street Journal in effect on the date such payment was required to be made. Notwithstanding anything to the contrary in this Agreement, except for the right to seek monetary damages for fraud (solely as it relates to the representations and warranties expressly made inArticle IV III) or for willful breach occurring prior to the valid termination of this Agreement, and without limiting Parent’s, Merger Sub I’s or Purchaser’sMerger Sub II’s right to specific performance in accordance withSection 10.129.12, (A) the Termination Fee (and any other amounts expressly contemplated by thisSection 9.2(c)8.2, if any) shall be the sole and exclusive monetary remedy available to Parent, Merger Sub I and PurchaserMerger Sub II in connection with this Agreement and the Transactions in any circumstance in which the Termination Fee becomes due and payable and is paid by the Company in accordance with this Agreement, and (B) upon Parent’s receipt of the full Termination Fee (and any
other amounts contemplated by thisSection 9.2(c)8.2(c), if any)) pursuant to thisSection 9.28.2 in circumstances in which the Termination Fee is payable, none of the Company, any Company Subsidiary or any of their respective former, current or future officers, directors, partners, stockholders, managers, members, affiliates or agents shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions.Transactions, except for fraud or willful breach. For the avoidance of doubt, Parent may seek specific performance to cause the Company to consummate the Transactions in accordance withSection 10.129.12 orand the payment of the Termination Fee pursuant to thisSection 9.2(c)8.2(c), but in no event shall Parent be entitled to both (i) specific performance to cause the Company to consummate the Transactions in accordance withSection 10.129.12and (ii) the payment of the Termination Fee pursuant to thisSection 9.2(c)8.2(c).
MISCELLANEOUS
Section 10.1.9.1. Amendment and Modification; Waiver.
(a) Subject to applicable Law and except as otherwise provided in this Agreement, this Agreement may be amended, modified and supplemented by written agreement of each of the Parties.
(b) At any time and from time to time prior to the First Effective Time, either the Company, on the one hand, or Parent, Merger Sub I and Purchaser,Merger Sub II, on the other hand, may, to the extent legally allowed and except as otherwise set forth herein, (i) extend the time for the performance of any of the obligations or other acts of the other Parties, as applicable, (ii) waive any inaccuracies in the representations and warranties made by the other Parties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for their respective benefit contained herein. Any agreement on the part of Parent, PurchaserMerger Sub I, Merger Sub II or the Company to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of Parent or the Company, as applicable. No failure or delay by the Company, Parent, Merger Sub I or PurchaserMerger Sub II in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.
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Section 10.2.9.2. Non-Survival of Representations and Warranties. None of the representations and warranties in this Agreement or in any schedule, instrument or other document delivered pursuant to this Agreement shall survive the First Effective Time.
Section 10.3.9.3. Expenses. Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring such costs and expenses.expenses; provided, however, that Parent shall pay all filing fees under the HSR Act and any other applicable Regulatory Laws relating to the Transactions.
Section 10.4.9.4. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally (notice deemed given upon receipt), by electronic mail (notice deemed given upon transmission ifso long as there is no return error message or other notification of non-delivery received by the email is sent bysender; provided that, electronic mail received after 6:00 p.m., Pacific Time, or, if after,shall be deemed received on the day following the date of transmission)next day) or sent by a nationally recognized overnight courier service such as Federal Expressor express delivery service (notice deemed given upon receipt of proof of delivery), to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
if to Parent, Merger Sub I or Purchaser,Merger Sub II, to:
salesforce.com, inc.
Salesforce Tower
415 Mission Street, 3rd Floor
San Francisco, CA 94105
Email: legal@salesforce.com
Attention: General Counsel
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Email: ajnussbaum@wlrk.com
ejlee@wlrk.com
rsnarayan@wlrk.com rcchen@wlrk.com
Attention: Andrew J. Nussbaum
Edward J. Lee
Raaj S. NarayanRonald C. Chen
if to the Company, to:
Tableau Software,Slack Technologies, Inc.
1621 North 34th500 Howard Street
Seattle, Washington 98103San Francisco, California 94105
Email: kconder@tableau.comdschellhase@slack-corp.com
Attention: Keenan ConderDavid Schellhase
with copies to:
CooleyLatham & Watkins LLP
101140 Scott Drive
Menlo Park, California Street, 5th Floor
San Francisco, California 9411194025
Email: jleigh@cooley.comrick.kline@lw.com
bbeerle@cooley.com tad.freese@lw.com
jbourdet@cooley.com mark.bekheit@lw.com
Attention: Jamie K. LeighRichard A. Kline
Tad J. Freese
Mark M. Bekheit
Ben W. Beerle
Jodie M. BourdetA-66
Section 10.5.9.5. Interpretation. When a reference is made in this Agreement to sections, such reference shall be to a section of this Agreement, unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” As used in this Agreement, the term “affiliates” shall have the meaning set forth in Rule12b-2 of the Exchange Act. The word “extent” and the phrase “to the extent” when used in this Agreement shall mean the degree to which a subject or other things extends, and such word or phrase shall not merely mean “if.” The term “or” is not exclusive, and shall be interpreted as “and/or.” The phrases “the date of this Agreement,” “the date hereof,” “of even date herewith” and terms of similar import, shall be deemed to refer to the date set forth in the preamble to this Agreement. The table of contents and headings set forth in this Agreement or any schedule delivered pursuant to this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or such schedule or any term or provision hereof or thereof. All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person, unless otherwise indicated or the context otherwise requires. A reference to any specific Law or to any provision of any Law, whether or not followed by the phrase “as amended,” includes any amendment to, and any modification,re-enactment or successor thereof, any legislative provision substituted therefor and all rules, regulations and statutory instruments issued thereunder or pursuant thereto, except that, for purposes of any representations and warranties in this Agreement that are made as a specific date, references to any specific Law will be deemed to refer to such legislation or provision (and all rules, regulations and statutory instruments issued thereunder or pursuant thereto) as of such date. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
Section 10.6.9.6. Counterparts. This Agreement may be executed manually or by other electronic transmission by the Parties, in any number of counterparts, each of which shall be considered one and the same agreement and shall become effective when a counterpart hereof shall have been signed by each of the Parties and delivered to the other Parties. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .pdf or DocuSign format shall be sufficient to bind the Parties to the terms and conditions of this Agreement.
Section 10.7.9.7. Entire Agreement; Third-Party Beneficiaries.
(a) This Agreement (including the Company Disclosure Letter and the Parent Disclosure Letter) and the Confidentiality Agreement constitute the entire agreement among the Parties with respect to the subject matter hereof and thereof and supersede all other prior agreements (except that the Confidentiality Agreement shall be deemed amended hereby so that until the termination of this Agreement in accordance withSection 9.18.1, Parent, Merger Sub I and PurchaserMerger Sub II shall be permitted to take the actions contemplated by this Agreement) and understandings, both written and oral, among the Parties or any of them with respect to the subject matter hereof and thereof.
(b) Except as provided inSection 7.46.4 and Section 9.13, nothing in this Agreement (including the Company Disclosure Letter and the Parent Disclosure Letter) or in the Confidentiality Agreement, express or implied, is intended to confer upon any Person other than the Parties any rights or remedies hereunder or thereunder.
Section 10.8.9.8. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Offer and the MergerMergers is not affected in any manner adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the Offer and the MergerMergers are fulfilled to the extent possible.
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Section 10.9.9.9. Governing Law; Jurisdiction.
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to conflicts of laws principles that would result in the application of the Law of any other state.
(b) Each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the federalFederal court of the United States of America sitting in Delaware, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the Parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding, except in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof; (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof; (iii) waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in such courts; and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in such courts. Each of the Parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. Each Party to this Agreement irrevocably consents to service of process inside or outside the territorial jurisdiction of the courts referred to in
thisSection 10.9(b)9.9(b) in the manner provided for notices inSection 10.49.4. Nothing in this Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by applicable Law.
Section 10.10.9.10. Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE OFFER, THE MERGERMERGERS OR THE OTHER TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THISSECTION 10.109.10.
Section 10.11.9.11. Assignment. This Agreement shall not be assigned by any of the Parties (whether by operation of Law or otherwise) without the prior written consent of the other Parties. Subject to the preceding sentence, but without relieving any Party of any obligation hereunder, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.
Section 10.12.9.12. Enforcement; Remedies.
(a) Except as otherwise expressly provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.
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(b) The Parties agree that irreparable injury, for which monetary damages (even if available) would not be an adequate remedy, will occur in the event that any of the provisions of this Agreement (including failing to take such actions as are required of it hereunder to consummate the Offer, the MergerMergers or the other Transactions) is not performed in accordance with its specific terms or is otherwise breached. Accordingly, it is agreed that each Party shall be entitled to an injunction or injunctions to prevent or remedy any breaches or threatened breaches of this Agreement by any other Party, a decree or order of specific performance specifically enforcing the terms and provisions of this Agreement and any further equitable relief, in each case in accordance withSection 10.99.9, this being in addition to any other remedy to which such Party entitled under the terms of this Agreement at law or in equity.
(c) The Parties’ rights in thisSection 10.129.12 are an integral part of the Transactions and each Party hereby waives any objections to any remedy referred to in thisSection 10.129.12 (including any objection on the basis that there is an adequate remedy at Law or that an award of such remedy is not an appropriate remedy for any reason at Law or equity). For the avoidance of doubt, each Party agrees that there is not an adequate remedy at Law for a breach of this Agreement by any Party. In the event any Party seeks any remedy referred to in thisSection 10.129.12, such Party shall not be required to obtain, furnish, post or provide any bond or other security in connection with or as a condition to obtaining any such remedy.
Section 9.13. Financing Entities. Notwithstanding anything in this Agreement to the contrary, the Company, on behalf of itself, the Company Subsidiaries and each of their controlled affiliates hereby: (a) agrees that any Proceeding, whether in law or in equity, whether in contract or in tort or otherwise, involving the Financing Entities, arising out of or relating to, this Agreement, the Financing or any of the agreements (including any applicable commitment letter) entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder shall be subject to the exclusive jurisdiction of any federal or state court in the Borough of Manhattan, New York, New York, so long as such forum is and remains available, and any appellate court thereof and each Party hereto irrevocably submits itself and its property with respect to any such Proceeding to the exclusive jurisdiction of such court, (b) agrees that any such Proceeding shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the laws of another state), except as otherwise provided in any applicable commitment letter, agreement or document relating to the Financing, (c) agrees not to bring or support or permit the Company or any of the Company Subsidiaries or their affiliates to bring or support any Proceeding of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against any Financing Entity in any way arising out of or relating to, this Agreement, the Financing, any commitment letter relating thereto or any of the transactions contemplated hereby or thereby or the performance of any services thereunder in any forum other than any federal or state court in the Borough of Manhattan, New York, New York, (d) agrees that service of process upon the Company, the Company Subsidiaries and their controlled affiliates in any such Proceeding shall be effective if notice is given in accordance with Section 9.4, (e) irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such Proceeding in any such court, (f) knowingly, intentionally and voluntarily waives to the fullest extent permitted by applicable law trial by jury in any Proceeding brought against the Financing Entities in any way arising out of or relating to, this Agreement, the Financing, any commitment letter relating thereto or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, (g) agrees that none of the Financing Entities will have any liability to the Company, the Company Subsidiaries or any of their controlled affiliates or Representatives (in each case, other than Parent or its Subsidiaries) relating to or arising out of this Agreement, the Financing, any commitment letter relating thereto or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, whether in law or in equity, whether in contract or in tort or otherwise and (h) agrees that (and each other Party hereto agrees that) the Financing Entities are express third party beneficiaries of, and may enforce, any of the provisions of this Section 9.13, and that such provisions and the definitions of “Financing Entities” and “Financing Parties” shall not be amended in any way adverse to the Financing Entities without the prior written consent of the Financing Parties).
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Parent, PurchaserMerger Sub I, Merger Sub II and the Company have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above.
By | /s/ John Somorjai | |||
Name: | John Somorjai | |||
Title: | Executive Vice President, Corporate Development & Salesforce Ventures | |||
By | /s/ John Somorjai | |||
Name: | John Somorjai | |||
Title: | Vice President | |||
By | /s/ | |||
Name: | ||||
Title: | Vice President |
[Signature Page to Agreement and Plan of Merger]
Slack Technologies, Inc. | ||
By: | /s/ Allen Shim | |
Name: Allen Shim | ||
Title: Chief |
[Signature Page to Agreement and Plan of Merger]
Annex A
Certain Definitions
For the purposes of this Agreement, the term:
“Acceptable Confidentiality Agreement” means a confidentiality agreement entered into after the date hereof that contains terms that (i) are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement (it being understood that such confidentiality agreement need not contain a “standstill” or similar provision) and (ii) do not in any way restrict the Company or its Representatives from complying with its disclosure obligations under this Agreement.
“Acquisition Proposal” means any offer, proposal or indication of interest from a person (as defined inSection 6.3)Person (other than a proposal or offer by Parent or any Parent Subsidiary) at any time relating to any transaction or series of related transactions (other than the transactions contemplated by this Agreement)Transactions) involving: (a) any acquisition or purchase by any person, directly or indirectly, of more than fifteen percent (15%) of any class of outstanding voting or equity securities of the Company (whether by voting power or number of shares), or any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any person beneficially owning more than fifteen percent (15%) of any class of outstanding voting or equity securities of the Company (whether by voting power or number of shares); (b) any merger, consolidation, share exchange, business combination, joint venture, recapitalization, reorganization or other similar transaction involving the Company and a person pursuant to which the stockholders of the Company immediately preceding such transaction hold less than eighty five percent (85%) of the equity interests in the surviving, resulting or ultimate parent entity of such transaction (whether by voting power or number of shares); or (c) any sale, lease, exchange, transfer or other disposition to a person of more than fifteen percent (15%) of the consolidated assets of the Company and the Company Subsidiaries (measured by the fair market value thereof).
“Aggregate Cash Amount” means the aggregate amount of cash to be paid to holders of Company Common Stock (including in respect of any Dissenting Shares and any fractional shares pursuant to Section 2.5) in exchange for their Company Common Stock. Solely for purposes of Section 2.8 and the definitions used therein, the amount of cash payable in respect of Dissenting Shares shall be deemed to be (i) the Parent Trading Price multiplied by the Exchange Ratio plus (ii) the Cash Consideration per Dissenting Share (it being understood that the actual amount that would be payable in respect of any Dissenting Shares following completion of a proceeding determining the “fair value” of such Dissenting Shares would be determined pursuant to such proceeding in accordance with the applicable provisions of Delaware law).
“Aggregate Stock Consideration” means the product of (i) the aggregate number of shares of Parent Common Stock to be delivered to the holders of Company Common Stock in exchange for their Company Common Stock pursuant to this Agreement (for the avoidance of doubt, disregarding any fractional shares in respect of which cash is paid pursuant to Section 2.5), multiplied by (ii) the Parent Trading Price.
“Anti-Corruption Law” means any Law related to combating bribery and corruption, including legislation implementing the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions or the U.N. Convention Against Corruption including, the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), and the U.K. Bribery Act 2010.
“Antitrust Laws” means any applicable supranational, national, federal, state, county, local or foreign antitrust, competition or trade regulation Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition, including the HSR Act, the Sherman Act, the Clayton Act and the Federal Trade Commission Act, in each case, as amended, and other similar antitrust, competition or trade regulation laws of any jurisdiction other than the United States.
“Business Days” means any day, other than a Saturday, Sunday and any day which is a legal holiday under the Laws of the State of California or the State of New York or is a day on which banking institutions located in such States are authorized or required by applicable Law or other governmental action to close.
“Capped Call Confirmations” means that certain (i) Base Call Option Transaction Confirmation, dated as of April 6, 2020, by and between the Company and Goldman Sachs & Co. LLC, (ii) Additional Call Option
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Transaction Confirmation, dated as of April 7, 2020, by and between the Company and Goldman Sachs & Co. LLC, (iii) Base Call Option Transaction Confirmation, dated as of April 6, 2020, by and between the Company and Morgan Stanley & Co. LLC, (iv) Additional Call Option Transaction Confirmation, dated as of April 7, 2020, by and between the Company and Morgan Stanley & Co. LLC, (v) Base Call Option Transaction Confirmation, dated as of April 6, 2020, by and between the Company and Credit Suisse Securities (USA) LLC, (vi) Additional Call Option Transaction Confirmation, dated as of April 7, 2020, by and between the Company and Credit Suisse Securities (USA) LLC, (vii) Base Call Option Transaction Confirmation, dated as of April 6, 2020, by and between the Company and Citibank, N.A., (viii) Additional Call Option Transaction Confirmation, dated as of April 7, 2020, by and between the Company and Citibank, N.A., (ix) Base Call Option Transaction Confirmation, dated as of April 6, 2020, by and between the Company and Bank of Montreal and (x) Additional Call Option Transaction Confirmation, dated as of April 7, 2020, by and between the Company and Bank of Montreal.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Bylaws” means the Amended and Restated Bylaws of the Company as in effect on the date hereof.
“Company CertificateCharter” means the Amended and Restated Certificate of Incorporation of the Company as in effect on the date hereof.
“Company Credit Agreement” means that certain Revolving Credit and Guaranty Agreement, dated as of May 30, 2019, among the Company, the lenders and other parties from time to time party thereto, and Morgan Stanley Senior Funding, Inc., as administrative agent.
“Company Equity Awards” means the Company Options, the Company RSUsRestricted Share Awards and the Company PSUs.RSUs.
“Company Equity Plans” means (i) the Company’s 2013 Equity Incentive2009 Stock Plan, as amended and restated from time to time, and (ii) the Company’s 2004 Equity2019 Stock Option and Incentive Plan, as amended and restated from time to time.
“Company ESPP” means the Company’s 20132019 Employee Stock Purchase Plan.
“Company Governing Documents” means the Company Bylaws and the Company Certificate.Charter.
“Company Government Contract” means aany Contract with (i) any Governmental Entity,Entity; (ii) any prime contractor of a Governmental Entity in its capacity as a prime contractor, or any higher-tier subcontractor to a prime contractor of a Governmental Entity in its capacity as a higher-tier subcontractor; or (iii) any subcontractor with respect to any such Contract.Contract described in clauses (i) or (ii). Unless otherwise indicated, a task, purchase, change or delivery order under a Company Government Contract will not constitute a separate Company Government Contract for purposes of this definition, but will be considered part of the Company Government Contract under which it was issued.
“Company Intellectual Property” means all Intellectual Property owned by (or claimedpurported to be owned by), filed in the name of or exclusively licensed to the Company or any Company Subsidiary.
“Company Material Adverse Effect” means any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations of the Company and the Company Subsidiaries, taken as a whole;provided,however, that no Effects to the extent resulting or arising from the following shall be deemed to constitute a Company Material Adverse Effect or shall be taken into account when determining whether a Company Material Adverse Effect exists or has occurred: (a) any changes in United States, regional, global or international economic conditions, including any changes
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affecting financial, credit, foreign exchange or capital market conditions; (b) any changes in conditions in any industry or industries in which the Company and the Company Subsidiaries operate;business collaboration technology industry; (c) any changes in political, geopolitical, regulatory or legislative conditions in the United States or any other country or region of the world; (d) any changes after the date hereof in GAAP or the interpretation thereof; (e) any changes after the date hereof in applicable Law or the interpretation thereof; (f) any failure by the Company to meet any internal or published projections, estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by the Company to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from this definition of a “Company Material Adverse Effect” may be taken into account); (g) any acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, natural disasters, epidemics or pandemics (including the COVID-19 pandemic) or other force majeure events, including any material worsening of such conditions threatened or existing as of the date hereof; (h) the execution and delivery of this Agreement, the identity of Parent or any Parent Subsidiary, the pendency or consummation of this Agreement, the Offer, the MergerMergers and the other Transactions, including the effect thereof on the relationships with current or prospective customers, suppliers, distributors, partners, financing sources, employees or sales representatives, or the public announcement of this Agreement or the Transactions, including any litigation arising out of or relating to this Agreement or the Transactions, in each case only to the extent resulting from the execution and delivery of this Agreement, the identity of Parent or any Parent Subsidiary, the pendency or consummation of this Agreement, the Offer, the MergerMergers and the other Transactions, or the public announcement of this Agreement and the Transactions, as applicable (provided that thisclause (h) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address, as applicable, the consequences resulting from the execution and delivery of this Agreement, the pendency or consummation of this Agreement, the Offer, the MergerMergers and the other Transactions or to address the consequences of litigation)Transactions); and (i) any action or failure to take any action which action or failure to act is requested in writing by Parent or otherwise expressly required by this Agreement (other than pursuant toSection 6.1(a)5.1(a));providedthat with respect to the exceptions set forth inclauses (a),(b),(c),(d),(e) and(g), if such Effect has had a disproportionate adverse effect on the Company or any Company Subsidiary relative to other companies operating in the business collaboration technology industry, or industries in which the Company and the Company Subsidiaries operate, then only the incremental disproportionate adverse effect of such Effect shall be taken into account for the purpose of determining whether a Company Material Adverse Effect exists or has occurred.
“Company Option” means each option to purchase Company Common Stock granted under any Company Equity Plan that is outstanding and unexercised immediately prior to the First Effective Time.
“Company Products” means any and all products and services, including Software as a service (SaaS), and any professional or consulting services, that are or have been in the two (2)three (3) years prior to the date of this Agreement marketed, offered, sold, licensed, providedmade available or distributed by the Company or any Company Subsidiary.
“Company PSURestricted Share Award” means the portion of each restricted stock unit award relating toof shares of Company Common Stock granted under any Company Equity Plan (or under the arrangements set forth on Section 3.2(a)(i)(A)(1) and Section 3.2(a)(i)(A)(2) of the Company Disclosure Letter) that is outstanding and subject to a substantial risk of forfeiture (within the meaning of Section 83 of the Code) as of immediately prior to the First Effective Time and subject to performance-based vesting requirements.Time.
“Company RSU” means each restricted stock unit award relating to shares of Company Common Stock granted under any Company Equity Plan that is outstanding immediately prior to the First Effective Time and subject solely to service-based vesting requirements.
“Company Subsidiaries” means the Subsidiaries of the Company.Company; provided that, for the avoidance of doubt, Slack Fund L.L.C. shall be deemed a Subsidiary of the Company for the purposes of this Agreement.
“Confidentiality Agreement” means the Confidentiality Agreement, dated February 27, 2019,September 10, 2020, between Parent and the Company, as may be amended.
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“Contract” means any legally binding written or oral agreement, contract, subcontract, settlement agreement, lease, sublease, instrument, permit, concession, franchise, binding understanding, note, option, bond, mortgage, indenture, trust document, loan or credit agreement, license, sublicense, insurance policy or other legally binding commitment.
“Contract Revenue” means (i) with respect to subscription Contracts, the annualized contract value from new incremental business associated with such Contract; and (ii) with respect to license and maintenance Contracts, approximately twenty-five percent (25%)commitment or undertaking of the perpetual license feeplus first (1st) year annualized maintenance fees.any nature.
“Controlled Group Liability” means any and all liabilities (i) under Title IV of ERISA; (ii) under Section 302 of ERISA; (iii) under Sections 412 and 4971 of the Code; (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the Code; and (v) under corresponding or similar provisions of foreign laws or regulations, other than such liabilities that arise solely out of, or relate solely to, plans directly sponsored by the Company and the Company Subsidiaries.
“Convertible Notes” means the $862,500,000 in aggregate principal amount of 0.50% Convertible Senior Notes due 2025 issued under the Convertible Notes Indenture.
“Convertible Notes Hedge Obligations” means the hedge obligations entered into in connection with the Convertible Notes evidenced by the Capped Call Confirmations.
“Convertible Notes Indenture” means the Indenture, dated as of April 9, 2020, between the Company and U.S. Bank National Association, as trustee.
“Effect” means any change, effect, development, circumstance, condition, state of facts, event or occurrence.
“Environmental Law” means any and all applicable Law which (a) regulate or relate to the protection orclean-up of the environment; the use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources, or the health and safety of persons or property, including protection of the health and safety of employees or (b) impose liability or responsibility with respect to any of the foregoing, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), or any other Law of similar effect.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
“Exchange Ratio” means 1.103.
“Export Controls” means all applicable export and reexport control Laws and regulations, including the Export Administration Regulations maintained by the U.S. Department of Commerce, trade and economic sanctions maintained by OFAC and the United Nations, International Traffic in Arms Regulations maintained by the U.S. Department of State and any applicable anti-boycott compliance regulations.
“Financing Entities” means the Financing Parties and their respective affiliates and their and their respective affiliates’ officers, directors, employees, agents and representatives and their respective successors and assigns; provided that neither Parent nor any affiliate of Parent shall be a Financing Party
“Financing Parties” means the entities that have committed to or commit to provide or have otherwise entered into or enter into agreements in connection with the Financing, or to purchase securities from or place securities or arrange or provide loans for Parent in connection with the Financing.
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“Founders Voting Agreements” means (i) the Holder Voting Agreement, dated as of May 29, 2019, by and among Eric Costello, Eric E.G. Costello Revocable Trust, Esther Costello 2019 Trust, Jude Costello 2019 Trust, Phoebe Costello 2019 Trust, Hope Costello 2019 Trust and Stewart Butterfield; (ii) the Holder Voting Agreement, dated as of May 27, 2019, by and among Cal Henderson, Rebecca Reeve Henderson, Cal Henderson and Rebecca Reeve Henderson, as trustees of the Henderson Family Trust u/a/d 7/21/2016, the Cal Henderson 2019 Grantor Retained Annuity Trust, the Theodore Henderson GST Exempt Trust under the Cal Henderson Family 2019 Irrevocable Trust, the William Franklin Henderson GST Exempt Trust under the Cal Henderson Family 2019 Irrevocable Trust, the Rebecca Reeve Henderson 2019 Grantor Retained Annuity Trust, the Theodore Henderson GST Exempt Trust under the Rebecca Reeve Henderson Family 2019 Irrevocable Trust, the William Franklin Henderson GST Exempt Trust under the Rebecca Henderson Family 2019 Irrevocable Trust and Stewart Butterfield; and (iii) the Holder Voting Agreement, dated as of May 24, 2019, by and between Serguei Mourachov and Stewart Butterfield, as assigned to 1232391 B.C. Ltd. pursuant to that Consent to Assignment, dated as of December 18, 2019, by and between Stewart Butterfield and Serguei Mourachov.
“GDPR” means Regulation (EU) 2016/679 (General Data Protection Regulation) of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data as currently in effect and as may be amended from time to time.
“Governmental Entity” means (a) any supranational, national, federal, state, county, municipal, local, or foreign government or any entity exercising executive, legislative, judicial, regulatory, taxing, or administrative functions of or pertaining to government, (b) any public international governmental organization or (c) any agency, division, bureau, department, or other political subdivision of any government, entity or organization described in the foregoingclauses (a) or(b) of this definition (including patent and trademark offices and self-regulatory organizations).
“Hazardous Substances” means any pollutant, chemical, substance and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical, chemical compound, hazardous substance, material or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation under any Environmental Laws, including any quantity of petroleum product or byproduct, solvent, flammable or explosive material, radioactive material, asbestos, lead paint, polychlorinated biphenyls (or PCBs), dioxins, dibenzofurans, heavy metals, radon gas, mold, mold spores, and mycotoxins.
“HIPAA” shall have the meaning set forth in the definition of “Information Privacy and Security Laws.”
“HSR Act” means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“Import Restrictions” means all applicable U.S. and foreign import Laws, including Title 19 of the U.S. Code and Title 19 of the Code of Federal Regulations.
“Indebtedness” means, with respect to any Person, (a) all obligations for borrowed money; (b) all obligations evidenced by bonds, debentures, notes or similar instruments; (c) all Indebtedness of others secured by any Lien on owned or acquired property, whether or not the Indebtedness secured thereby has been assumed; (d) all guarantees (or any other arrangement having the economic effect of a guarantee) of Indebtedness of others; (e) all finance and capital lease obligations and all synthetic lease obligations; (f) all obligations, contingent or otherwise, of such Person as an account party in respect of financial guaranties, letters of credit, letters of guaranty, surety bonds and other similar instruments; (g) all securitization transactions; (h) all obligations representing the deferred and unpaid purchase price of property (other than trade payables incurred in the ordinary course of business consistent with past practice); (i) all obligations, contingent or otherwise, in respect of bankers’ acceptances; and (j) net cash payment obligations of such Person under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination).
“Information Privacy and Security Laws” means (i) any Law, rule, regulation or directive and all binding guidance issued by any Governmental Entity thereunder applicable to the Company or to any Company
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Subsidiary and (ii) to the extent the Company has agreed to comply with the same, any binding applicable self-regulatory guidelines, in each case, relating to: (a) the privacy, protection, or security of Protected Information,
including as relevant to the collection, storage, retention, processing, transfer, disclosure, sharing, disposal and destruction of Protected Information or (b) requirements for websites and mobile applications, online behavioral advertising, tracking technologies, call or electronic monitoring or recording, or any outbound calling and text messaging, telemarketing, or email marketing. Without limiting the foregoing, “Information Privacy and Security Laws” includes, to the extent applicable to Company and Company Subsidiary, the Federal Trade Commission Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Controlling the Assault ofNon-Solicited Pornography and Marketing Act of 2003, the Children’s Online Privacy Protection Act, the Computer Fraud and Abuse Act, the Electronic Communications Privacy Act, the Fair Credit Reporting Act, PCI DSS, the Fair and Accurate Credit Reporting Act, the Health Insurance Portability and Accountability Act of 1996, as amended and supplemented by the Health Information Technology for Economic and Clinical Health Act of the American Recovery and Reinvestment Act of 2009 (together, “HIPAA”), the Gramm-Leach-Bliley Act, state privacy and data security laws, state social security number protection laws, state data breach notification laws, state consumer protection laws, the GDPR (and any European Union member states’ laws and regulations implementing the GDPR), the Canadian Personal Information Protection and Electronic Documents Act, India’s Information Technology Act, Japan’s Act on the Protection of Personal Information, Hong Kong’s Personal Data (Privacy) Ordinance, and Australia’s Privacy Amendment (Private Sector) Act 2000, as amended by the Privacy Amendment (Enhancing Privacy Protection) Act 2012, and other applicable data protection laws of the jurisdictions in which the Company or the Company Subsidiaries operate or which are applicable to their respective businesses.
“Intellectual Property” means all technology and intellectual property or other proprietary rights, whether statutory, common law or otherwise, in any jurisdiction throughout the world, including all: (a) inventions, discoveries, improvements, patents and patent applications; (b) trademarks, service marks, trade dress, logos, slogans, brand names, trade names, Internet domain names and corporate names (whether or not registered), social media handles and other identifiers and indicia of origin, and all applications and registrations in connection therewith; (c) all works of authorship and copyrights (whether or not published), and all applications and registrations in connection therewith, including audiovisual works, collective works, computer programs, compilations, databases, derivative works, literary works, mask works, and sound recordings; (d) intellectual property rights in Software; (e) mask works and industrial designs, and all applications and registrations in connection therewith; (f) trade secrets and other intellectual property rights in confidential and proprietary information (including inventions, ideas, research and development information,know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, schematics, specifications, research records, test information, financial, marketing and business data, customer and supplier lists, algorithms and information, pricing and cost information, business and marketing plans and proposals, and databases and compilations, including any and all data and collections of data); and (g) rights of attribution and integrity and other moral rights of an author.
“Knowledge” will be deemed to be, as the case may be, the actual knowledge of (a) the individuals set forth onSection 1.1(a) of the Parent Disclosure Letter with respect to Parent, Merger Sub I or PurchaserMerger Sub II or (b) the individuals set forth onSection 1.1(a) of the Company Disclosure Letter with respect to the Company, in each case after reasonable inquiry of those employees of such Party and its Subsidiaries who would reasonably be expected to have actual knowledge of the matter in question.
“Law” means any law (including common law), statute, requirement, code, rule, regulation, order, ordinance, judgment or decree or other pronouncement of any Governmental Entity.
“Lien” means any lien, pledge, hypothecation, mortgage, deed of trust, security interest, conditional or installment sale agreement, encumbrance, covenant, charge, claim, option, right of first refusal, easement, right of way, encroachment, occupancy right, preemptive right, community property interest or restriction of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or
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other asset, or any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset), whether voluntarily incurred or arising by operation of Law.
“Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 3(37) of ERISA or any plan that has two (2) or more contributing sponsors at least two (2) of whom are not under common control within the meaning of Section 4063 of ERISA.
“Net Share” means, with respect to a Company Option, the quotient obtained by dividing (a) the product of (i) the excess, if any, of the Per Share Cash Equivalent Consideration over the per share exercise price of such Company Option, multipliedby (ii) the number of shares of Company Common Stock subject to such Company Option immediately prior to the First Effective time, Time, by (b) the Per Share Cash Equivalent Consideration.
“NYSE” means the New York Stock Exchange.
“Open Source License” means any license that is approved by the Open Source Initiative and listed at http://www.opensource.org/licenses or the Free Software Foundation and listed at https://www.gnu.org/licenses/license-list.en.html, and any similar license for “free,” “publicly available” or “open source” software, including the Affero General Public License, Server Side Public License (SSPL), GNU General Public License, the Lesser GNU General Public License, the Apache License, the BSD License, Mozilla Public License (MPL), the MIT License or any other license that otherwise requires, as a condition of use, modification, distribution, or making available of the Software or other technology licensed thereunder, that other Software or other technology incorporated into, derived from, distributed, or distributedmade available with, such Software or other technology (a) be, in the case of Software, disclosed or distributed in Source Code form, (b) be licensed for purposes of preparing derivative works, (c) be licensed under terms that allow Company Products or (c)portions thereof or interfaces therefor to be reverse engineered, reverse assembled or disassembled (other than by operation of applicable Law), or (d) be redistributed at no charge.
“Option/RSU Conversion Ratio” means the sum of (a) the Exchange Ratio and (b) the quotient, rounded to the 4th decimal place, obtained by dividing (i) the Cash Consideration by (ii) the volume weighted average closing sale price of one (1) share of Parent Common Stock as reported on the NYSE for the ten (10) consecutive trading days ending on the trading day immediately preceding the Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“Ordinary Course License” means standard licenses contained in (a) customer subscription, terms of use or terms of service, license or service agreements, in each case, with respect to Company ProductsProducts; (b) confidentiality agreements; or confidentiality(c) agreements based on a form used by the Company or Company Subsidiary that has been made available to Parent, including each form of (i) software development kit (SDK), connector, or API agreement; (ii) distributor, reseller, or sales representatives agreement; (iii) agreement with employees and independent contractors; (iv) vendor, professional services, outsourced development, consulting, support or maintenance agreement; in each case that arenon-exclusive, and granted in the ordinary course of business consistent with past practice.
“Parent Equity Plans” means all employee and director equity incentive plans of Parent and agreements for equity awards in respect of Parent Common Stock granted under the inducement grant exception, other than any such equity incentive plans and agreements for equity awards assumed by Parent in connection with its acquisition of MapAnything.exception.
“Parent Material Adverse Effect” means any Effect that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the financial condition, business or operations of Parent and the Parent Subsidiaries, taken as a whole;provided,however, that no Effects to the extent resulting or arising from the following shall be deemed to constitute a Parent Material Adverse Effect or shall be taken into account when determining whether a Parent Material Adverse Effect exists or has occurred: (a) any changes in United States, regional, global or international economic conditions, including any changes affecting financial, credit, foreign exchange or capital market conditions; (b) any changes in conditions in any industry or industries in which Parent and the Parent Subsidiaries operate;business collaboration
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technology industry; (c) any changes in political, geopolitical, regulatory or legislative conditions in the United States or any other country or region of the world; (d) any changes after the date hereof in GAAP or the interpretation thereof; (e) any changes after the date hereof in applicable Law or the interpretation thereof; (f) any failure by Parent to meet any internal or published projections, estimates or expectations of Parent’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or any failure by Parent to meet its internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such failure that are not otherwise excluded from this definition of a “Parent Material Adverse Effect” may be taken into account); (g) any acts of terrorism or sabotage, war (whether or not declared), the commencement, continuation or escalation of a war, acts of armed hostility, weather conditions, natural disasters, epidemics or pandemics (including the COVID-19 pandemic) or other force majeure events, including any material worsening of such conditions threatened or existing as of the date hereof; (h) the execution and delivery of this Agreement, the identity of the Company or any Company Subsidiary, the pendency or consummation of this Agreement, the Offer, the MergerMergers and the other Transactions, including the effect thereof on the relationships with current or prospective customers, suppliers, distributors, partners, financing sources, employees or sales representatives, or the public announcement of this Agreement or the Transactions, including any litigation arising out of or relating to this Agreement or the Transactions, in each case only to the extent resulting from the execution and delivery of this
Agreement, the identity of the Company or any Company Subsidiary, the pendency or consummation of this Agreement, the Offer, the MergerMergers and the other Transactions, or the public announcement of this Agreement and the Transactions, as applicable (provided that thisclause (h) shall not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address, as applicable, the consequences resulting from the execution and delivery of this Agreement, the pendency or consummation of this Agreement, the Offer, the MergerMergers and the other Transactions or to address the consequences of litigation)Transactions); and (i) any action or failure to take any action which action or failure to act is requested in writing by the Company or otherwise expressly required by this Agreement;providedthat with respect to the exceptions set forth inclauses (a),(b),(c),(d),(e) and(g), if such Effect has had a disproportionate adverse effect on Parent or any Parent Subsidiary relative to other companies operating in the business collaboration technology industry, or industries in which Parent and the Parent Subsidiaries operate, then only the incremental disproportionate adverse effect of such Effect shall be taken into account for the purpose of determining whether a Parent Material Adverse Effect exists or has occurred.
“Parent Subsidiaries” means the Subsidiaries of Parent.
“Parent Trading Price” means the volume weighted average closing sale price of one (1) share of Parent Common Stock as reported on NYSE for the ten (10) consecutive trading days ending on the trading day immediately preceding the Acceptance Time (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).$260.50.
“PCI DSS” means the Payment Card Industry Data Security Standard, issued by the Payment Card Industry Security Standards Council, as may be revised from time to time.
“Per Share Cash Equivalent Consideration” means the sum of (a) the Cash Consideration and (b) the product (rounded to the nearest cent) obtained bymultiplying (i) the Exchange Ratio by (ii) the volume weighted average closing sale price of one (1) share of Parent Trading Price.Common Stock as reported on the NYSE for the ten (10) consecutive trading days ending on the trading day immediately preceding the Closing Date (as adjusted as appropriate to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications or similar events).
“Permitted Liens” means any Lien (i) for Taxes or governmental assessments, charges or claims of payment not yet due or that is being contested in good faith by appropriate proceedings; (ii) which is a carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Lien arising by operation of Law in the ordinary course of business for amounts not yet delinquent; (iii) is specifically disclosed on the most recent consolidated balance sheet of the Company or the notes thereto included in the Company SEC Documents as of the date hereof; (iv) which is a statutory or common law Lien to secure landlords, lessors or renters under leases or rental agreements; (v) which is imposed on the underlying fee interest in real property subject to a real property lease; (vi) that arises as a result of anon-exclusive license or othernon-exclusive grant of rights under
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Intellectual Property in the ordinary course of business consistent with past practice; (vii) that arises from pledges or deposits to secure obligations pursuant to workers’ compensation Laws, unemployment insurance, social security, retirement and similar Laws or similar legislation or to secure public or statutory obligations, in each case in the ordinary course of business consistent with past practice; (viii) which is an immaterial defect, imperfection or irregularity in title, charge, easement, covenant and right of way of record or zoning, building and other similar restriction, in each case, that do not adversely affect in any material respect the current use of the applicable property owned, leased, used or held for use by the Company or any Company Subsidiary; (ix) is a pledge or deposit to secure performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature that, in each case, is not material; and (x) that has arisen in the ordinary course of business consistent with past practice and does not adversely affect the value, ownership, use or operation of the property subject thereto.
“Person” means a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Entity or other entity or organization.
“Personal Data” means any and all information that can reasonably be used to identify an individual natural person or household, including information that identifies or could be used to identify, alone or in combination with other information, an individual natural person or an individual natural person’s device or browser, including name, physical address, telephone number, email address, financial account number, passwords
or PINs, device identifier or unique identification number, government-issued identifier (including Social Security number and driver’s license number), medical, health or insurance information, gender, date of birth, educational or employment information, religious or political views or affiliations and marital or other status (to the extent any of these data elements can reasonably be associated with an individual natural person or household, or is linked to any such data element that can reasonably be associated with an individual natural person)person or household). Personal Data also includes any information not listed above if such information is defined as “personal data,” “personally identifiable information,” “individually identifiable health information,” “protected health information” or “personal information” under any applicable Law and is regulated by such Law.
“Privacy Statements” means, collectively, all of the Company’s and the Company Subsidiaries’ (a) obligations with respect tointernal privacy that are made to customers,policies and/or notices, and (b) publicly posted andor internal privacy policies and/or notices (including if posted on the Company’s or the Company Subsidiaries’ products and services) regarding the collection, use, disclosure, transfer, storage, maintenance, retention, deletion, disposal, modification or processing of Protected Information.
“Proceedings” means all actions, suits, claims, hearings, arbitrations, litigations, mediations, audits, investigations, examinations or other similar proceedings, in each case, by or before any Governmental Entity.
“Protected Information” means (a) Personal Data andData; (b) any information that is governed, regulated or protected by one or more Information Privacy and Security Laws.Laws and; (c) any information that is covered by the PCI DSS.
“Regulatory Laws” means any applicable supranational, national, federal, state, county, local or foreign antitrust, competition, trade regulation, or foreign investment Laws that are designed or intended to prohibit, restrict or regulate (a) actions having the purpose or effect of monopolization or restraint of trade or lessening competition through merger or acquisition, including the HSR Act, the Sherman Act, the Clayton Act and the Federal Trade Commission Act, in each case, as amended, and other similar antitrust, competition or trade regulation laws of any jurisdiction other than the United States (Laws described in clause (a), “Antitrust Laws) or (b) investments by entities that are deemed a foreign entity or that may pose a threat to national security for purposes of any applicable law or regulation (Laws described in clause (b), “FDI Laws).
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“Representatives” means, when used with respect to any Person, the directors, officers, employees, consultants, financial advisors, accountants, legal counsel, investment bankers and other agents, advisors and representatives of such Person and its Subsidiaries.
“Restricted Stock Conversion Ratio” means 0.1804.
“SEC” means the United States Securities and Exchange Commission.
“Securities Act” means the United States Securities Act of 1933, as amended.
“Software” means any and all (a) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in Source Code, object code or other form; (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; (c) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; and (d) all user documentation, including user manuals and training materials, relating to any of the foregoing.
“Source Code” means computer Software and code, in form other than object code or machine readable form, including related programmer comments and annotations, help text, data and data structures, instructions and procedural, object-oriented and other code, which may be printed out or displayed in human readable form.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other organization, whether incorporated or unincorporated, of which (a) at least a majority of the outstanding shares of capital stock of, or other equity interests, having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation, limited liability company, partnership or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries, or (b) with respect to a partnership, such Person or any other Subsidiary of such Person is a general partner or managing member of such partnership.
“Superior Proposal” means a bona fide, written Acquisition Proposal (with references in the definition thereof to fifteen percent (15%) and eighty -fiveeighty-five percent (85%) being deemed to be replaced with references to eighty percent (80%) and twenty percent (20%), respectively) by a third party, which the Company Board of
Directors determines in good faith after consultation with the Company’s outside legal counsel and financial advisors to be more favorable to the Company Stockholders from a financial point of view than the Offer and the Merger,Mergers, taking into account all relevant factors (including all the terms and conditions of such proposal or offer (including the transaction consideration, conditionality, timing, certainty of financing and/or regulatory approvals and likelihood of consummation) and this Agreement (and, if applicable, any changes to the terms of this Agreement proposed by Parent pursuant toSection 6.35.3)).
“Takeover Statute” means any “business combination,” “control share acquisition,” “fair price,” “moratorium” or other takeover or anti-takeover statute or similar Law.
“Tax” or “Taxes” means any and all U.S. federal, state, local andnon-U.S. taxes, assessments, levies, duties, tariffs, imposts and other similar charges and fees in the nature of a tax that are imposed by any Governmental Entity, including income, franchise, windfall or other profits, gross receipts, property, sales, use, net worth, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation, excise, withholding, ad valorem, stamp, transfer, value-added, occupation, environmental, disability, real property, personal property, registration, alternative or add-on minimum, or estimated tax, including any interest, penalty, additions to tax and any additional amounts imposed with respect thereto, whether disputed or not.
“Tax Return” means any report, return, certificate, claim for refund, election, estimated Tax filing or declaration filed or required to be filed with any Governmental Entity with respect to Taxes, including any schedule or attachment thereto, and including any amendments thereof.
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“Threshold Percentage” means the quotient, expressed as a percentage, obtained by dividing (i) the Aggregate Stock Consideration by (ii) the sum of the Aggregate Stock Consideration plus the Aggregate Cash Amount.
“Treasury Regulations” means the U.S. Treasury regulations promulgated under the Code.
Terms Defined Elsewhere. The following terms are defined elsewhere in this Agreement, as indicated below:
401(k) Termination Date | Section | |
| Section | |
Adjusted Option | Section 2.3(b) | |
Adjusted Restricted Share Award | Section 2.3(d) | |
Adjusted RSU | Section 2.3(d) | |
Agreement | Preamble | |
Alternative Transaction Structure | Section 2.7 | |
Antitrust Laws | Annex A | |
Base Amount | Section 6.4(c) | |
Book-Entry Share | Section 2.1(a)(i) | |
Cancelled Shares | Section 2.1(a)(ii) | |
Cash Consideration | Section 2.1(a)(i) | |
Certificate | Section 2.1(a)(i) | |
Certificate of Merger | Section 1.4 | |
Change of Recommendation | Section 5.3(a) | |
Class A Common Stock | Recitals | |
Class B Common Stock | Recitals | |
Closing | Section 1.3 | |
Closing Date | Section 1.3 | |
Company | Preamble | |
Company Acquisition Agreement | Section 5.3(a) | |
Company Benefit Plan | Section 3.10(a) | |
Company Board of Directors | Recitals | |
Company Board Recommendation | Recitals | |
Company Capitalization Date | Section 3.2(a) | |
Company Common Stock | Recitals | |
Company Disclosure Letter | Article III | |
Company Leases | Section 3.16 | |
Company Note Offers and Consent Solicitations | Section 6.15(d) | |
Company Permits | Section 3.9(b) | |
Company Preferred Stock | Section 3.2(a) | |
Company Registered Intellectual Property | Section 3.14(a) | |
Company SEC Documents | Section 3.5(a) | |
Company Stockholder Approval | Section 3.3(b) | |
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Company Tax Representation Letter | Section 6.13(b) | |
Company’s Counsel | Section 6.13(b) | |
Consent Solicitations | Section 6.15(d) | |
Continuing Employees | Section 6.7(a) | |
Current ESPP Offering Periods | Section 2.3(e) | |
Debt Offer Documents | Section 6.15(d) | |
DGCL | Recitals | |
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Closing Date
Code
Company
Company Acquisition Agreement
Company Benefit Plan
Company Board of Directors
Company Board Recommendation
Company Capitalization Date
Company Common Stock
Company Compensation Committee
Company Disclosure Letter
| Section | |
| Recitals | |
DOJ | Section 6.2(b) | |
Enforceability Limitations | Section 3.3(e) | |
Exchange Agent | Section 2.2(a) | |
Exchange Fund | Section 2.2(a) | |
Exchange Ratio | Section 2.1(a)(i) | |
FCPA | Annex A | |
FDI Laws | Annex A | |
Financing | Section 6.14(a) | |
First Certificate of Merger | Section 1.4 | |
First Effective Time | Section 1.4 | |
First Merger | Recitals | |
Fractional Share Consideration | Section 2.1(a)(i) | |
fraud | Section 8.2(a) | |
FTC | Section 6.2(b) | |
GAAP | Section 3.5(b) | |
Government Contract Bid | Section 3.17(c) | |
HIPAA | Annex A | |
Indemnified Parties | Section 6.4(a) | |
Indemnity Exceptions | Section 6.14 | |
Intervening Event | Section 5.3(d) | |
IP Contracts | Section 3.14(h) | |
Material Contract | Section 3.17(a) | |
Material Customer | Section 3.19(a) | |
Material Customer Agreement | Section 3.19(a) | |
Material Reseller | Section 3.19(c) | |
Material Reseller Agreement | Section 3.19(c) | |
Material Supplier | Section 3.19(b) | |
Material Supplier Agreement | Section 3.19(b) | |
Merger Consideration | Section 2.1(a)(i) | |
Merger Sub I | Preamble | |
Merger Sub II | Preamble | |
Mergers | Recitals | |
New Plans | Section 6.7(b) | |
OFAC | Section 3.9(e) | |
Offers to Purchase | Section 6.15(d) | |
Old Plans | Section 6.7(b) | |
Original Closing Date | Section 1.3 | |
Outside Date | Section 8.1(d) | |
Parent | Preamble | |
Parent Capitalization Date | Section 4.2(a) | |
Parent Common Stock | Recitals | |
Parent Disclosure Letter | Article IV | |
Parent Governing Documents | Section 4.1 | |
Parent Permits | Section 4.9(b) | |
| Section 4.2(a) | |
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Stock Consideration | Section 2.1(a)(i) | |
Surviving Company | Section 1.1 | |
Surviving Corporation | Section 1.1 | |
Surviving LLC | Section 1.1 | |
Termination Fee | Section 8.2(b)(i) | |
Transactions | Recitals | |
Voting Agreement | Recitals | |
willful breach | Section 8.2(a) |
Annex B
Form of Letter AgreementA-84
salesforce.com, inc.Opinion of Qatalyst Partners LP
Salesforce Tower
415 Mission
December 1, 2020
Board of Directors
Slack Technologies, Inc.
500 Howard Street 3rd Floor
San Francisco, CACalifornia 94105
Ladies and Gentlemen:Members of the Board:
As a holder of Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”), of Tableau Software,We understand that Slack Technologies, Inc., a Delaware corporation (the “Company”), the undersigned (each,salesforce.com, inc., a “Delaware corporation (“StockholderSalesforce”), Skyline Strategies I Inc., a Delaware corporation and a wholly owned subsidiary of Salesforce (“Merger Sub I”), and Skyline Strategies II LLC, a Delaware limited liability company and a wholly owned subsidiary of Salesforce (“Merger Sub II”) understandshave entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other things, (i) Merger Sub I will merge with and into the Company, with the Company surviving such merger (the “Surviving Corporation”) as a wholly owned subsidiary of Salesforce (the “First Merger”), and (ii) immediately following the First Merger, a second merger shall occur: (a) if the Revised Structure Notice (as defined in the Merger Agreement) shall not have been delivered by Salesforce in accordance with the Merger Agreement, by the Surviving Corporation merging with and into Merger Sub II, with Merger Sub II surviving the merger as a wholly owned subsidiary of Salesforce or (b) if the Revised Structure Notice shall have been delivered by Salesforce in accordance with the Merger Agreement, by the Surviving Corporation merging with and into Salesforce, with Salesforce surviving the merger (the “Second Merger” and, together with the First Merger, the “Mergers”). Pursuant to the Mergers, the Company will either become a wholly owned subsidiary of Salesforce or be merged with and into Salesforce, and each share of Class A common stock, par value $0.0001 per share, of the Company (“Company Class A Common Stock”) and each share of Class B common stock, par value $0.0001 per share, of the Company (“Company Class B Common Stock,” and, together with Company Class A Common Stock, the “Company Common Stock”) that is outstanding as of immediately prior to the effective time of the First Merger (the “First Effective Time”), will, other than any shares of Company Common Stock that are (I) owned by stockholders that have properly perfected their rights of appraisal within the meaning of Section 262 of the DGCL, (II) owned or held in treasury by the Company or owned by Salesforce or (III) owned by any direct or indirect wholly owned subsidiary of Salesforce or of the Company, be converted into the right to receive (1) 0.0776 (the “Exchange Ratio”) of a share of common stock, par value $0.001 per share, of Salesforce (“Salesforce Common Stock”) and (2) $26.79 in cash, without interest (together with the Exchange Ratio, the “Merger Consideration”). The terms and conditions of the Mergers are more fully set forth in the Merger Agreement.
You have asked for our opinion as to whether the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement, by the holders of shares of Company Class A Common Stock, in their capacity as holders of Company Class A Common Stock, (other than Salesforce or any affiliate of Salesforce, the “Holders”), is fair, from a financial point of view, to such Holders.
For purposes of the opinion set forth herein, we have reviewed the Merger Agreement, certain related documents and certain publicly available financial statements of the Company and Salesforce and other business
One Maritime Plaza | 24th Floor | San Francisco, CA 94111
Tel: 415.844.7700 | www.qatalyst.com | Fax: 415.391.3914
B-1
and financial information of the Company and Salesforce. We have also reviewed certain forward-looking information relating to the Company prepared by the management of the Company, including financial projections and operating data of the Company (the “Company Projections”). Additionally, we discussed the past and current operations and financial condition and the prospects of the Company and Salesforce, with senior management of the Company, and Salesforce, respectively. We also reviewed the historical market prices and trading activity for Company Class A Common Stock and Salesforce Common Stock, and compared the financial performance of the Company and Salesforce and the prices and trading activity of Company Class A Common Stock and Salesforce Common Stock with that of certain other selected publicly-traded companies and their securities. In addition, we reviewed the financial terms, to the extent publicly available, of selected acquisition transactions and performed such other analyses, reviewed such other information and considered such other factors as we have deemed appropriate.
In arriving at our opinion, we have assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to, or discussed with, us by the Company and Salesforce. With respect to the Company Projections, we have been advised by the management of the Company, and have assumed, that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company of the future financial performance of the Company and other matters covered thereby. We have assumed that the Mergers will be consummated in accordance with the terms set forth in the Merger Agreement, without any modification, waiver or delay and that the Mergers will have the tax consequences as set forth in the Merger Agreement and as described in discussions with representatives of the Company. In addition, we have assumed that in connection with the receipt of all the necessary approvals of the proposed Mergers, no delays, limitations, conditions or restrictions will be imposed that could have an adverse effect on the Company, Salesforce or the contemplated benefits expected to be derived in the proposed Mergers. We have not made any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of the Company or Salesforce or their respective affiliates, nor have we been furnished with any such evaluation or appraisal. In addition, we have relied, without independent verification, upon the assessment of the management of the Company as to the existing and future technology and products of the Company and the risks associated with such technology and products. In arriving at our opinion, we were not authorized to solicit, and did not solicit, interest from any party with respect to an acquisition, business combination or other extraordinary transaction involving the Company.
We have acted as financial advisor to the Board of Directors of the Company in connection with the Mergers and will receive a fee for our services, a portion of which has been earned, and a portion of which will become payable upon rendering of this opinion. We will also receive an additional, larger fee if the Mergers are consummated. In addition, the Company has agreed to reimburse our expenses and indemnify us for certain liabilities arising out of our engagement. During the two-year period prior to the date hereof, no material relationship existed between Qatalyst Partners or any of its affiliates and the Company or Salesforce pursuant to which compensation was received by Qatalyst Partners or its affiliates; however, Qatalyst Partners and/or its affiliates may in the future provide investment banking and other financial services to the Company or Salesforce, their respective affiliates for which we would expect to receive compensation.
Qatalyst Partners provides investment banking and other services to a wide range of entities and individuals, domestically and offshore, from which conflicting interests or duties may arise. In the ordinary course of these activities, affiliates of Qatalyst Partners may at any time hold long or short positions, and may trade or otherwise effect transactions in debt or equity securities or loans of the Company, Salesforce or certain of their respective affiliates.
One Maritime Plaza | 24th Floor | San Francisco, CA 94111
Tel: 415.844.7700 | www.qatalyst.com | Fax: 415.391.3914
B-2
This opinion has been approved by our opinion committee in accordance with our customary practice. This opinion is for the information of the Board of Directors of the Company and may not be used for any other purpose without our prior written consent. This opinion does not constitute a recommendation as to how to vote with respect to the Mergers or any other matter and does not in any manner address what the value of Salesforce Common Stock actually will be when issued pursuant to the Mergers or the price at which Company Class A Common Stock, or Salesforce Common Stock will trade or otherwise be transferable at any time.
Our opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof may affect this opinion and the assumptions used in preparing it, and we do not assume any obligation to update, revise or reaffirm this opinion. Our opinion does not address the underlying business decision of the Company to engage in the Mergers, or the relative merits of the Mergers as compared to any strategic alternatives that may be available to the Company. Our opinion is limited to the fairness, from a financial point of view, of the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement, by the Holders, and we express no opinion with respect to the fairness of the amount or nature of the compensation to any of the officers, directors or employees of the Company or Salesforce or any of their respective affiliates, or any class of such persons, relative to such consideration. We also express no opinion regarding the consideration to be received by any holder of Company Class B Common Stock under the Merger Agreement in such holder’s capacity as a holder of Company Class B Common Stock.
Based on and subject to the foregoing, we are of the opinion on the date hereof that the Merger Consideration to be received pursuant to, and in accordance with, the terms of the Merger Agreement, by the Holders of Company Class A Common Stock, in their capacity as such Holders, is fair, from a financial point of view, to such Holders.
Yours faithfully,
/s/ QATALYST PARTNERS LP
One Maritime Plaza | 24th Floor | San Francisco, CA 94111
Tel: 415.844.7700 | www.qatalyst.com | Fax: 415.391.3914
B-3
Opinion of Goldman Sachs & Co. LLC
200 West Street | New York, NY 10282-2198
Tel: 212-902-1000 | Fax: 212-902-3000
PERSONAL AND CONFIDENTIAL
December 1, 2020
Board of Directors
Slack Technologies, Inc.
500 Howard Street
San Francisco, CA 94105
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a financial point of view to the holders (other than salesforce.com, inc. (“Salesforce”) and its affiliates) of the outstanding shares of Class A common stock, par value $0.0001 per share (“Company Class A Common Stock”), of Slack Technologies, Inc. (the “Company”) and the outstanding shares of Class B common stock, par value $0.0001 per share (“Company Class B Common Stock”, collectively with Company Class A Common Stock, “Company Common Stock”), of the Company of the Aggregate Consideration (as defined below) to be paid to such holders, taken in the aggregate, pursuant to the Agreement and Plan of Merger, dated as of December 1, 2020 (the “Agreement”), by and among Salesforce, Skyline Strategies I Inc., a wholly owned subsidiary of Salesforce (“Merger Sub I”), Skyline Strategies II LLC, a wholly owned subsidiary of Salesforce (“Merger Sub II”), and the Company. Pursuant to the Agreement and on the terms and subject to the conditions set forth in the Agreement (A) Merger Sub I will be merged with and into the Company with the Company surviving the merger (the “First Merger”) and each outstanding share of Company Common Stock will be converted into 0.0776 of a share of common stock, par value $0.001 per share (“Salesforce Common Stock”), of Salesforce (the “Stock Consideration”) and the right to receive $26.79 in cash, without interest (the “Cash Consideration”; together with the Stock Consideration, the “Aggregate Consideration”), and immediately following the First Merger (B) (i) if Salesforce does not deliver the Revised Structure Notice, the Company will be merged with and into Merger Sub II with Merger Sub II surviving the merger or (ii) if Salesforce does deliver the Revised Structure Notice, the Company will be merged with and into Salesforce with Salesforce surviving the merger. All capitalized terms used but not defined herein shall have the respective meanings set forth in the Agreement.
Goldman Sachs & Co. LLC and its affiliates (collectively, “Goldman Sachs”) are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Salesforce and any of their respective affiliates and third parties, or any currency or commodity that may be involved in the transactions contemplated by the Agreement (the “Transaction”). We have acted as financial advisor to the Company in connection with, and have participated in certain of the negotiations leading to, the Transaction. We expect to receive fees for our services in connection with the Transaction, all of which
C-1
Securities and Investment Services Provided by Goldman Sachs & Co. LLC
Board of Directors
Slack Technologies, Inc.
December 1, 2020
Page 2
are contingent upon consummation of the Transaction, and the Company has agreed to reimburse certain of our expenses arising, and indemnify us against certain liabilities that may arise, out of our engagement. We have provided certain financial advisory and/or underwriting services to the Company and/or its affiliates from time to time for which our Investment Banking Division has received, and may receive, compensation, including having acted as a financial advisor with respect to the direct listing of 118,429,640 shares of Company Class A Common Stock in June 2019 and as bookrunner with respect to the public offering of the Company’s 0.50% Convertible Senior Notes due 2025 (aggregate principal amount of $862,500,000) (the “Convertible Notes”) in April 2020. We may also in the future provide financial advisory and/or underwriting services to the Company, Salesforce and their respective affiliates for which our Investment Banking Division may receive compensation. In addition, a Director on the Board of the Company is currently affiliated with Goldman Sachs as a Senior Director.
We further note that concurrent with the issuance of the Convertible Notes in April 2020, the Company entered into capped call transactions with respect to the Convertible Notes (collectively, the “Capped Call Transactions”) with Goldman Sachs & Co. LLC (with respect to 25%) and other counterparties each acting as principal for its own account, consisting of the purchase by the Company of capped call options with respect to collectively approximately 27,826,837 shares of Company Class A Common Stock, the aggregate number of shares of Company Class A Common Stock underlying the Convertible Notes. The Capped Call Transactions may be adjusted, exercised, cancelled and/or terminated in accordance with their terms in connection with certain events, including the announcement or consummation of the Transaction. In particular, under the terms of the Capped Call Transactions, each of Goldman Sachs & Co. LLC and the other counterparties, each acting separately as calculation agent under the Capped Call Transactions to which it is a party, is entitled in certain circumstances to make adjustments to the exercise price of the embedded call options sold by the Company to Goldman Sachs & Co. LLC and the other counterparties to reflect the economic effect of the announcement of the Transaction on the Capped Call Transactions. In addition, each of Goldman Sachs & Co. LLC and the other counterparties may, each acting separately as the calculation agent, determining party or otherwise as principal under the Capped Call Transactions to which it is a party, determine such additional adjustments and/or value owed upon termination or cancellation in respect of such Capped Call Transactions in accordance with their terms and pay any amounts due to the Company under various circumstances, including on or following consummation or abandonment of the Transaction. All actions or exercises of judgment by Goldman Sachs & Co. LLC, in its capacity as calculation agent, pursuant to the terms of the Capped Call Transactions to which it is a party must be performed in good faith and a commercially reasonable manner.
In connection with this opinion, we have reviewed, among other things, the Agreement; the annual report to stockholders and Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 2020; the registration statement on Form S-1 of the Company, dated April 26, 2019, as amended, including the prospectus contained therein, relating to the registration and resale of Company Class A Common Stock; annual reports to stockholders and Annual Reports on Form 10-K of Salesforce for the five fiscal years ended January 31, 2020; certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company and Salesforce; certain other communications from the Company and Salesforce to their respective stockholders; certain publicly available research analyst reports for the Company and Salesforce; certain internal financial analyses and forecasts for the Company prepared by its management as approved for our use by the Company (the “Forecasts”); and certain analyses prepared by the management of the Company related to the expected utilization by the Company of certain net operating loss carryforwards of the Company, as approved for our use
C-2
Securities and Investment Services Provided by Goldman Sachs & Co. LLC
Board of Directors
Slack Technologies, Inc.
December 1, 2020
Page 3
by the Company (the “NOL Forecasts”). We have also held discussions with the members of senior managements of the Company and Salesforce regarding their assessment of the past and current business operations, financial condition and future prospects of Salesforce and with the members of senior management of the Company regarding their assessment of the past and current business operations, financial condition and future prospects of the Company; reviewed the reported price and trading activity for shares of Company Class A Common Stock and shares of Salesforce Common Stock; compared certain financial and stock market information for the Company and Salesforce with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the software industry and in other industries; and performed such other studies and analyses, and considered such other factors, as we deemed appropriate.
For purposes of rendering this opinion, we have, with your consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, us, without assuming any responsibility for independent verification thereof. In that regard, we have assumed with your consent that the Forecasts and the NOL Forecasts have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company. We have not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of the Company or Salesforce or any of their respective subsidiaries and we have not been furnished with any such evaluation or appraisal. We have assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained without any adverse effect on the Company or Salesforce or on the expected benefits of the Transaction in any way meaningful to our analysis. We have assumed that the Transaction will be consummated on the terms set forth in the Agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to our analysis.
Our opinion does not address the underlying business decision of the Company to engage in the Transaction, or the relative merits of the Transaction as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, tax or accounting matters. We were not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, the Company or any other alternative transaction. This opinion addresses only the fairness from a financial point of view to the holders (other than Salesforce and its affiliates) of shares of Company Common Stock, as of the date hereof, of the Aggregate Consideration to be paid to such holders, taken in the aggregate, pursuant to the Agreement. We do not express any view on, and our opinion does not address, any other term or aspect of the Agreement or Transaction or any term or aspect of any other agreement or instrument contemplated by the Agreement or entered into or amended in connection with the Transaction, including, any ongoing obligations of the Company, any allocation of the aggregate consideration payable pursuant to the Agreement, including among the holders of Company Class A Common Stock and Company Class B Common Stock, the fairness of the Transaction to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company or class of such persons, in connection with the Transaction, whether relative to the Aggregate Consideration to be paid to the holders (other than Salesforce and its affiliates) of shares of Company Common Stock, taken in the aggregate, pursuant to the Agreement or otherwise. We are not expressing any opinion as to the prices at which shares of Company Class A Common Stock or Salesforce Common Stock will trade at any time, as to the potential effects of volatility in the credit, financial and stock markets on the Company, Salesforce, or the Transaction, or as to the
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Securities and Investment Services Provided by Goldman Sachs & Co. LLC
Board of Directors
Slack Technologies, Inc.
December 1, 2020
Page 4
impact of the Transaction on the solvency or viability of the Company or Salesforce or the ability of the Company or Salesforce to pay their respective obligations when they come due. Our opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to us as of, the date hereof and we assume no responsibility for updating, revising or reaffirming this opinion based on circumstances, developments or events occurring after the date hereof. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Board of Directors of the Company in connection with its consideration of the Transaction and such opinion does not constitute a recommendation as to how any holder of shares of Company Common Stock should vote with respect to such Transaction or any other matter. This opinion has been approved by a fairness committee of Goldman Sachs & Co. LLC.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Aggregate Consideration to be paid to the holders (other than Salesforce and its affiliates) of shares of Company Common Stock, taken in the aggregate, pursuant to the Agreement is fair from a financial point of view to such holders.
Very truly yours, |
/s/ Goldman Sachs & Co. LLC |
(GOLDMAN SACHS & CO. LLC) |
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Securities and Investment Services Provided by Goldman Sachs & Co. LLC
VOTING AND SUPPORT AGREEMENT
This VOTING AND SUPPORT AGREEMENT is entered into as of December 1, 2020 (this “Agreement”), by and among salesforce.com, inc., a Delaware corporation (“Parent”), and Sausalito Acquisition Corp.each of the persons set forth on Schedule A hereto (each, a “Stockholder” and collectively, the “Stockholders”). Parent and the Stockholders are each sometimes referred to herein as a “Party” and collectively as the “Parties.”
W I T N E S S E T H:
WHEREAS, Parent, Slack Technologies, Inc., a Delaware corporation (the “Company”), Skyline Strategies I Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (“PurchaserMerger Sub I”), and Skyline Strategies II LLC, a Delaware limited liability company and a wholly owned Subsidiary of Parent (“Merger Sub II”), are concurrently entering into an Agreement and Plan of Merger dated as of June 9, 2019the date hereof (as it may be amended or supplemented from time to time, amended, the “Merger Agreement”), pursuant to which, was previously approved by the boards of directors of the Company and Parent, providing for, among other things, (i)at the commencement by Purchaser ofFirst Effective Time under the Offer and (ii) following the consummation of the Offer, the merger of PurchaserMerger Agreement, Merger Sub I will merge with and into the Company (the “First Merger”), with the Company being the surviving entitycorporation in the First Merger (the “Surviving Corporation”) upon the terms and subject to the conditions set forth in the Merger Agreement and in accordance with the applicable provisions of the mergerGeneral Corporation Law of the State of Delaware (the “DGCL”);
WHEREAS, immediately following the First Merger, a second merger shall occur (a) if the Revised Structure Notice shall not have been delivered by Parent in accordance with Section 2.7 of the Merger Agreement, by the Surviving Corporation merging with and into Merger Sub II, with Merger Sub II surviving the merger as a wholly owned Subsidiary of Parent in accordance with the applicable provisions of the DGCL and the Delaware Limited Liability Company Act or (b) if the Revised Structure Notice shall have been delivered by Parent in accordance with Section 2.7 of the Merger Agreement, by the Surviving Corporation merging with and into Parent, with Parent surviving the merger in accordance with the applicable provisions of the DGCL (such second step merger together with the First Step Merger, the “Mergers”), in each case, upon the terms and subject to the conditions set forth in the Merger Agreement. Terms used without definition in this Agreement shall haveAgreement;
WHEREAS, as of the meanings ascribed theretodate hereof, each Stockholder is the record and beneficial owner of such number of shares of each class of capital stock of the Company as set forth opposite such Stockholder’s name on Schedule A hereto (the “Existing Shares”);
WHEREAS, the board of directors of the Company (the “Board”) has (i) determined that the Mergers constitute a Change of Control Transaction (as defined in the Amended and Restated Certificate of Incorporation of the Company (the “Charter”)) and unanimously adopted the Merger Agreement.Agreement, and approved the transactions contemplated thereby, including the Mergers, and (ii) subject to Section 4.14 of the Merger Agreement, the Board has taken all action necessary to render inapplicable to the Merger Agreement and transactions contemplated thereby (including, for the avoidance of doubt, this Agreement) Section 203 of the DGCL and any similar provisions in the Company Governing Documents or any other Takeover Statute; and
Each Stockholder acknowledges that,WHEREAS, as an inducement fora condition to the willingness of Parent, Merger Sub I and PurchaserMerger Sub II to enter into the Merger Agreement, each ofand incurring the obligations set forth therein, and as an inducement and in consideration for Parent, Merger Sub I and Purchaser has required that such StockholderMerger Sub II to enter into this letter agreement (this “the Merger Agreement,”) and such Stockholder is willing the Stockholders have agreed to enter into this Agreement concurrently with the execution and delivery of the Merger Agreement, pursuant to which, among other things, each Stockholder is agreeing, subject to the terms of this Agreement, to vote all of such Stockholder’s Shares in accordance with the terms of this Agreement.
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I
GENERAL
1.1 Definitions. For the purposes of and under this Agreement, the following capitalized terms shall have the respective meanings below. Capitalized terms used but not defined herein shall have the meanings set forth in the Merger Agreement.
(a) “beneficial ownership” by a Person of any securities includes ownership by any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares (i) voting power, which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power, which includes the power to dispose, or to direct the disposition, of such security, and shall otherwise be interpreted in accordance with the term “beneficial ownership” as defined in Rule 13d-3 under the Exchange Act; provided that for purposes of determining beneficial ownership, a Person shall be deemed to be the beneficial owner of any securities that may be acquired by such Person pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable immediately or only after the passage of time, including the passage of time in excess of sixty (60) days, the satisfaction of any conditions, the occurrence of any event or any combination of the foregoing). For purposes of this Agreement, a Person shall be deemed to beneficially own any securities beneficially owned by its Affiliates or any Group of which such Person or any such Affiliate is or becomes a member or is otherwise acting in concert. For the avoidance of doubt, beneficially own and beneficial ownership shall also include record ownership of securities. The terms “beneficially own,” “beneficially owned” and “beneficial owner” shall each have a correlative meaning.
(b) “Class A Common Stock” means the Class A common stock, par value $0.0001 per share, of the Company.
(c) “Class B Common Stock” means the Class B common stock, par value $0.0001 per share, of the Company.
(d) “Company Common Stock” means the Class A Common Stock and the Class B Common Stock of the Company.
(e) “Founder Voting Agreements” means (i) the Holder Voting Agreement, dated as of May 29, 2019, by and among Eric Costello, Eric E.G. Costello Revocable Trust, Esther Costello 2019 Trust, Jude Costello 2019 Trust, Phoebe Costello 2019 Trust, Hope Costello 2019 Trust (collectively, the “Costello Entities”) and Stewart Butterfield; (ii) the Holder Voting Agreement, dated as of May 27, 2019, by and among Cal Henderson, Rebecca Reeve Henderson, Cal Henderson and Rebecca Reeve Henderson, as trustees of the Henderson Family Trust u/a/d 7/21/2016, the Cal Henderson 2019 Grantor Retained Annuity Trust, the Theodore Henderson GST Exempt Trust under the Cal Henderson Family 2019 Irrevocable Trust, the William Franklin Henderson GST Exempt Trust under the Cal Henderson Family 2019 Irrevocable Trust, the Rebecca Reeve Henderson 2019 Grantor Retained Annuity Trust, the Theodore Henderson GST Exempt Trust under the Rebecca Reeve Henderson Family 2019 Irrevocable Trust, the William Franklin Henderson GST Exempt Trust under the Rebecca Henderson Family 2019 Irrevocable Trust (collectively, the “Henderson Entities”) and Stewart Butterfield; and (iii) the Holder Voting Agreement, dated as of May 24, 2019, by and between Serguei Mourachov and Stewart Butterfield, as assigned to 1232391 B.C. Ltd. pursuant to that Consent to Assignment, dated as of December 18, 2019, by and between Stewart Butterfield and Serguei Mourachov.
(f) “Shares” means, with respect to each Stockholder, (1) such Stockholder’s Existing Shares and (2) any shares of Company Common Stock or other voting capital stock of the Company and any securities convertible
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into or exercisable or exchangeable for shares of Company Common Stock or other voting capital stock of the Company, in each case that such Stockholder, directly or indirectly, has or acquires beneficial ownership of on or after the date hereof.
1.2 Other Definitions.
Term | Section | |
10b5-1 Class B Shares | Section 3.2(b) | |
Agreement | Preamble | |
Board | Recitals | |
Charter | Recitals | |
Company | Recitals | |
Determination Date | Section 2.1(a) | |
DGCL | Recitals | |
Encumbrances | Section 4.1(c) | |
Existing Shares | Recitals | |
First Merger | Recitals | |
Merger Agreement | Recitals | |
Merger Sub I | Recitals | |
Merger Sub II | Recitals | |
Mergers | Recitals | |
Parent | Preamble | |
Parties | Preamble | |
Party | Preamble | |
Permitted Encumbrances | Section 4.1(c) | |
Permitted Transfer | Section 3.2(b) | |
Stockholder | Preamble | |
Stockholders | Preamble | |
Surviving Corporation | Recitals | |
Termination Date | Section 5.2 | |
Transfer | Section 3.2(b) |
ARTICLE II
AGREEMENT TO VOTE
2.1 Agreement to Vote.
(a) Each Stockholder confirmshereby irrevocably and unconditionally agrees that during the period beginning on the date hereof and ending on the Termination Date, it shall, at any meeting of the stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting, including the Company Stockholders Meeting), however called (the date of the taking of any such action being an applicable “Determination Date”), each Stockholder shall, in each case to the fullest extent that such Stockholder’s Shares are entitled to vote thereon: appear at such meeting or otherwise cause such Stockholder’s Shares to be counted as present thereat for purposes of establishing a quorum; and
(i) vote, or cause to be voted at such meeting, in person or by proxy, all of such Stockholder’s Shares:
(A) | in favor of the approval and adoption of (1) the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Mergers, and (2) any related proposal in furtherance thereof, including in favor of any proposal to adjourn or postpone to a later date any meeting of the stockholders of the Company at which any of the foregoing matters are submitted for consideration and vote of the stockholders of the Company if there are not sufficient votes for approval of such matters on the date on which the meeting is held; and |
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(B) | against (1) any Acquisition Proposal or any related proposal in furtherance thereof; (2) any action or agreement that is in opposition to the Mergers or that would result in a breach of any covenant, representation or warranty of the Company or any of its Subsidiaries contained in the Merger Agreement; and (3) any other action that would reasonably be expected to impede, interfere with, delay, postpone, frustrate the purposes of, or adversely affect the transactions contemplated by the Merger Agreement, including the Mergers, or this Agreement or the performance by the Company of its obligations under the Merger Agreement. |
(b) Any vote required to be cast pursuant to this Section 2.1 shall be cast or executed in accordance with the applicable procedures relating thereto so as to ensure that it is duly counted for purposes of recording the results of that vote. Any attempt by a Stockholder to vote, consent or express dissent with respect to (or otherwise to utilize the voting power of) such Stockholder’s Shares in contravention of this Section 2.1 shall be null and void ab initio. If a Stockholder is the beneficial owner, but not the holder of record, of any Shares, such Stockholder agrees to take all actions necessary to cause the holder of record and any nominees to vote all of such Shares in accordance with this Section 2.1. For the avoidance of doubt, Stewart Butterfield shall take all actions necessary to exercise his rights under the Founder Voting Agreements to cause the Shares covered by the Founder Voting Agreements to be voted in accordance with and pursuant to Section 2.1(a). To the extent a Stockholder does not fully control the determinations of such stockholder entity, such Stockholder agrees to exercise all voting or other rights it has in such entity to carry out the intent and purposes of the support and voting obligations in this Section 2.1 or otherwise set forth in this Agreement. For the avoidance of doubt, the foregoing commitments apply to any Shares held by any trust, limited partnership or other entity holding Shares over which the applicable Stockholder exercises direct or indirect voting control.
(c) Nothing in this Agreement shall obligate any Stockholder to exercise any option or any other right to acquire any shares of Company Common Stock.
ARTICLE III
ADDITIONAL AGREEMENTS
3.1 Waiver of Appraisal Rights and Certain Other Actions; Litigation. To the full extent permitted by Law, each Stockholder hereby irrevocably and unconditionally waives, and agrees not to exercise, any rights of appraisal (including under Section 262 of the DGCL), any dissenters’ rights and any similar rights relating to the Mergers that such Stockholder may have, directly or indirectly, by virtue of the ownership of any Shares, or may acquire in connection with the Mergers. Each Stockholder further agrees not to commence, join in, facilitate, assist or knowingly encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, and Purchaser,Merger Sub I, Merger Sub II or the Company or any of their respective affiliates and each of Parent and Purchaser confirms its agreementtheir successors, directors managers or officers relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the transactions contemplated hereby or thereby, including any claim (a) challenging the validity of, or seeking to enjoin or delay the operation of, any provision of this Agreement or the Merger Agreement (including any claim seeking to enjoy or delay the closing of the Mergers) or (b) alleging a breach of any duty of the Board or any Stockholder in connection with each Stockholder, as follows:
1.1. Subject Shares.As used in this Agreement, the termMerger Agreement or the transactions contemplated hereby or thereby, and hereby irrevocably waives any claim or rights whatsoever with respect to any of the foregoing.
3.2 No Inconsistent Arrangements; No Transfer.
(a) Each Stockholder represents, covenants and agrees that, except for this Agreement and the Shares subject to the Founder Voting Agreements, such Stockholder (i) has not entered into, and shall not enter into at any time prior to the Termination Date, any voting agreement, voting trust or similar arrangement or understanding with respect to such Stockholder’s Shares, (ii) has not granted, and shall not grant at any time prior to the Termination Date, a proxy, consent or power of attorney with respect to such Stockholder’s Shares,
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(iii) has not taken, and shall not take at any time while this Agreement remains in effect, any action that would, or would reasonably be expected to, (A) make any representation or warranty of such Stockholder contained herein untrue or incorrect, (B) violate or conflict with such Stockholder’s covenants and obligations under this Agreement, (C) otherwise have the effect preventing, impairing or materially delaying such Stockholder from performing any of its obligations under this Agreement or (D) have the effect of preventing, impairing or materially delaying, the Merger or the other transactions contemplated by the Merger Agreement or the performance by the Company of its obligations under the Merger Agreement.
(b) Except as provided hereunder, from and after the date hereof and until the Termination Date, each Stockholder shall not, directly or indirectly, (i) create or permit to exist any Encumbrances, other than Permitted Encumbrances, on such Stockholder’s Shares; (ii) transfer, sell, short sell, assign, tender, encumber, gift, hedge, distribute, pledge or otherwise dispose of, or grant a proxy with respect to, such Stockholder’s Shares, beneficial ownership thereof or any other interest therein (including, for the avoidance of doubt, any “Transfer” (for this purpose, as defined in the Charter) or take any other action that would cause or result in the conversion of a share of Class B Common Stock into a share of Class A Common Stock pursuant to the Charter), or enter into any derivative arrangement with respect to (collectively, “SubjectTransfer”), such Stockholder’s Shares, or any right or interest therein (or offer to do or consent to any of the foregoing); (iii) enter into or acquire any Contract with respect to such Stockholder’s Shares or any legal or beneficial interest therein, including any derivative contract, any futures or forward contract to deliver such Stockholder’s Shares or any other hedging or other derivative, swap, “put-call,” means margin, securities lending or other transaction that has or reasonably would be expected to have the effect of changing, limiting, arbitraging or reallocating the economic benefits and risks of ownership of such Stockholder’s Shares; (iv) grant or permit the grant of any proxy, power-of-attorney or other authorization or consent in or with respect to such Stockholder’s Shares; or (v) deposit or permit the deposit of such Stockholder’s Shares into a voting trust or enter into a voting agreement or arrangement with respect to such Stockholder’s Shares. Any action taken in violation of the immediately preceding sentence shall be null and void ab initio. Notwithstanding the foregoing, each Stockholder may Transfer such Stockholder’s (A) Shares to a Permitted Transferee (as defined in the Charter), but only if such Transfer does not result in the conversion under the Charter of such Shares that are shares of Class B Common Stock that such Stockholder ownsinto Class A Common Stock, or (B) Shares of record or beneficially (including through trusts or Affiliates) asClass A Common Stock and, solely in the case of the date of this Agreement and anyclause (3) below, up to 825,000 shares of Class B Common Stock (such Class B Common Stock, the “10b5-1 Class B Shares”) (1) if such Transfer is by David C. Butterfield and Alfonso D. Rubio Memorial Foundation for bona fide charitable purposes, (2) in connection with the payment of whichthe exercise price and/or the satisfaction of any tax withholding obligations arising from the exercise, vesting and/or settlement of any Company Option, Company RSU or Company Restricted Share Award, and (3) pursuant to a Rule 10b5-1 trading plan in effect as of the date hereof (any such Transfer and any Transfer with Parent’s prior written consent, a “Permitted Transfer”), provided that (x) a Transfer pursuant to clause (A) of this sentence shall be a Permitted Transfer only if the transferee of such Shares, prior to the date of such Transfer, agrees in a signed writing satisfactory to Parent (acting reasonably) to accept such Shares subject to the terms of this Agreement and to be bound by the terms of this Agreement applicable to such Stockholder (including through trusts or Affiliates) acquires record or beneficial ownershipfor all purposes of this Agreement and (y) any Transfer of Shares pursuant to clause (B), in the aggregate (taking into account all Transfers of Shares pursuant to clause (B) by any Stockholder from and after the date hereofof this Agreement), will not, and would not reasonably be expected to exceed one percent (1%) of the total voting power of the outstanding shares of Company Common Stock as of immediately prior to the terminationapplicable Determination Date. If any involuntary Transfer of such Stockholder’s Shares in the Company shall occur (including, but not limited to, a sale by any Stockholder’s trustee in any bankruptcy, or a sale to a purchaser at any creditor’s or court sale), the transferee (including any transferees and subsequent transferees of the initial transferee) shall take and hold such Shares subject to all of the terms of this Agreement applicable to the initial Stockholder of such Shares.
(c) Without limiting Section 3.2(a) and Section 3.2(b), prior to the Termination Date, each Stockholder shall not take any action to cause the conversion of such Stockholder’s Shares that are Class B Common Stock into shares of Class A Common Stock (except as expressly permitted in Section 3.2(b) with respect to the 10b5-1 Class B Shares). Each Stockholder agrees with, and covenants to, Parent that such Stockholder shall not request
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that the Company register the conversion (book-entry or otherwise) of any certificate or uncertificated interest representing any or all of the Stockholder’s Shares that are Class B Common Stock into Class A Common Stock (except as expressly permitted in Section 3.2(b) with respect to the 10b5-1 Class B Shares). Any conversion of shares of Class B Common Stock in violation of this Agreement shall, to the fullest extent permitted by Law, be null and void ab initio.
(d) From the date hereof until the Termination Date, such Stockholder shall not, without the prior written consent of Parent, amend, modify or waive any provision or remedy under the applicable Founder Voting Agreement.
3.3 Adjustments. In the event of any stock split (including a reverse stock split), stock dividend, merger, reorganization, recapitalization, reclassification, combination, exchange of shares or the like of the capital stock of the Company affecting asuch Stockholder’s Subject Shares, the terms of this Agreement shall apply to the resulting securities.
1.2. 3.4 Conditional CommitmentNo Shop Obligations of the Stockholders.
(a) Subject to ConvertSection.Subject 5.14 and from the date hereof until the Termination Date, each Stockholder shall not, and shall cause its affiliates and its and their respective Representatives not to, receiptdirectly or indirectly, (i) solicit, initiate or knowingly encourage or facilitate (including by way of providing information or taking any other action) any inquiry, proposal or offer, or the making, submission or announcement of any inquiry, proposal or offer which constitutes or would be reasonably expected to lead to an Irrevocable Conversion NoticeAcquisition Proposal, (ii) participate in accordanceany negotiations regarding, or furnish to any person any information relating to the Company or any Company Subsidiary in connection with an actual or potential Acquisition Proposal, (iii) otherwise cooperate with or assist or participate in, or facilitate, any such inquiries, proposals, offers, discussions or negotiations, (iv) encourage or recommend any other holder of Company Common Stock to not adopt the Merger Agreement or approve the transactions contemplated by the Merger Agreement, including the Mergers, (v) support, recommend, endorse, authorize or approve, or propose to support, recommend, endorse, authorize or approve, any Acquisition Proposal or enter into any Company Acquisition Agreement or (vi) agree to do any of the foregoing. Each Stockholder shall, and shall cause its affiliates and its and their respective Representatives to, immediately cease any and all solicitation, encouragement, discussion or negotiation with any Person or groups or provision of any information to any persons (other than Parent, its Subsidiaries, and their respective Representatives acting on their behalf) with respect to any inquiry, proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; provided,however, that each Stockholder, its affiliates and its and their respective Representatives may engage in such activities to the extent that the Company is permitted to engage in such activities pursuant to the terms of the Merger Agreement, but only if such Stockholder and its affiliates and its and their respective Representatives each comply with the terms of thisthe Merger Agreement as if it were the Company.
(b) From and after the date hereof until the First Effective Time, each Stockholder shall promptly (but(and in noany event later than one (1) hour after receiptwithin twenty-four (24) hours) (i) notify Parent of (A) any Acquisition Proposal it receives in its capacity as a stockholder of the Irrevocable Conversion Notice)Company, (B) any proposals or inquiries it receives in its capacity as a stockholder of the Company that would reasonably be expected to lead to an Acquisition Proposal and irrevocably convert, and shall deliver(C) any inquiry or request it receives in its capacity as a stockholder of the Company for information relating to the Company the Company’s transfer agentor any Company Subsidiary by any person who has made or would reasonably be expected to make any Acquisition Proposal, (ii) if such Acquisition Proposal, request or inquiry is in writing, deliver to Parent a copy of such Acquisition Proposal, request or inquiry and Parent all documentation reasonably necessary (including a conversion notice substantially in a form attached asAnnex I hereto, the “Conversion Document”) to irrevocably convert, pursuant toany related draft agreements and in accordance withother written materials setting forth the terms and conditions of Section D.5.a of Article IVsuch Acquisition Proposal, request or inquiry, and (iii) if such Acquisition Proposal, request or inquiry is oral, provide to Parent a reasonably detailed summary thereof. Without limiting any Stockholder’s other obligations hereunder, each Stockholder shall keep Parent reasonably informed on a prompt and timely basis of the Company Certificate, each Subject Share into one fully paidstatus and nonassessable sharematerial details of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), it being understood thatany such Stockholder’s irrevocable electionAcquisition Proposal and with respect to convert shall be deemed to be effective immediately upon the delivery of the Conversion Document to the Company’s transfer agent. The provisions of thisSection 1.2 shall have no further force or effect in the event this Agreement is validly terminated in accordance withSection 1.10.
1.3. Irrevocable Conversion Notice.For purposes hereof, an “Irrevocable Conversion Notice” means an irrevocable written notice substantially in the form attached asAnnex II hereto, delivered by Parent to each Stockholder on the date of the expiration of the Offer (as soon as practicable following 10:00 a.m. New York City time but in no event later than 5:00 p.m. New York City time), specifying that all of the conditions to the Offer have been either satisfied (other than those conditions that by their nature are to be satisfied at the expiration of the Offer, each of which would be capable of being satisfied were the expiration of the Offer to occur at the time Parent delivers an Irrevocable Conversion Notice to each Stockholder) or irrevocably waived by
Parent and Purchaser, it being acknowledged and agreed that such irrevocable written notice can only be validly delivered by Parent to the extent that all of the conditions to the Offer have, in fact, been satisfied (or would be capable of being satisfied were the expiration of the Offer to occur at the time Parent delivers an Irrevocable Conversion Notice to each Stockholder) or otherwise irrevocably waived by Parent and Purchaser;provided, that, for purposes of the Irrevocable Conversion Notice only, the satisfaction of the Minimum Condition shall be tested assuming that all Subject Shares of all Stockholders to be converted into shares of Class A Common Stock pursuant toSection 1.2 are tendered prior to the expiration of the Offer and that the consummation of the Offer occurs contemporaneously with the delivery of the Irrevocable Conversion Notice. Subjectany material change to the terms of this Agreement, the Irrevocable Conversion Notice may be delivered to each Stockholder by electronic mail to the email address contemplated bySection 1.11 andany such Irrevocable Conversion Notice shall be deemed given toAcquisition Proposal within twenty-four (24) hours of any such Stockholder if sent by electronic mail to (x) the email address of such Stockholder inSection 1.11 (notice deemed given upon transmission if such email is sent by 5:00 p.m. New York City time, or, if after, the day following the date of transmission) and (y) the email addresses of the individuals from Cooley LLP listed in Section 10.4 of the Merger Agreement.material change.
1.4. Conditional Obligation. Nothing in this Agreement shall obligate Parent or Purchaser to deliver an Irrevocable Conversion Notice.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Stockholders.Each. Each Stockholder hereby represents and warrants to Parent, as to such Stockholder with respect to his, her or its own account and with respect to its Shares, on a several basis, that:
(a)Authorization; Binding Agreement. If such Stockholder is not an individual, such Stockholder is duly organized and validly existing in good standing (where such concept is recognized) under the Laws of the jurisdiction in which it is incorporated or constituted and the consummation of the transactions contemplated hereby are within such Stockholder’s entity powers and have been duly authorized by all necessary entity actions on the part of such Stockholder, and (ifsuch Stockholder has all requisite entity power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. If such Stockholder is an individual, such Stockholder has all requisite legal capacity, right and authority to execute and deliver this Agreement and to perform such Stockholder’s obligations hereunder. This Agreement has been duly and validly executed and delivered by such Stockholder and, assuming the due authorization, execution and delivery by Parent constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, subject to the Enforceability Limitations. If such Stockholder is an individual and is married, and any of such Stockholder’s Subject Shares constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding)binding, this Agreement has been duly and validly executed and delivered by such Stockholder’s spouse have duly executed and, delivered this Agreement and have all authority and full legal capacity to enter into this Agreement and to perform his or her obligations under this Agreement;
(b) assuming the due authorization, execution and delivery of this Agreement by Parent, and Purchaser, this Agreement is such Stockholder’sconstitutes a legal, valid and binding agreement and isobligation of such Stockholder’s spouse, enforceable against such StockholderStockholder’s spouse in accordance with its terms, subject to the Enforceability Limitations;Limitations.
(c) the Subject Shares are owned by such Stockholder free and clear of all encumbrances, voting arrangements and any other commitments or restrictions of every kind, except as would not restrict the performance of such Stockholder’s obligations under this Agreement;
(d) such Stockholder has the sole or shared power to vote or direct the vote and to dispose of all Subject Shares;
(e)(b) Non-Contravention. Neither the execution and delivery of this Agreement by such Stockholder does not, and the performance of(or if applicable, such Stockholder’s obligations under this Agreement asspouse) nor the consummation of the transactions contemplated hereby nor compliance by such Stockholder (or if applicable, such Stockholder’s spouse) with any provisions herein will not: (i)(a) violate, contravene or conflict with or violate any Law applicable to such Stockholder or by which the Subject Shares are bound or affected; (ii) result in any breach of any provision of the certificate of incorporation or violationbylaws (or other similar governing documents) of or constitute a default, or require any consent (or give rise to any right of termination or acceleration or an event that with notice or lapse of time or both would become a default or give rise to any such right) under, any Contract to which such Stockholder, is a party or by which such Stockholder or the Subject Shares are bound; or (iii)(b) require any consent, approval, authorization or permit of, or filing with or notification to, any court or arbitratorGovernmental Entity on the part of such Stockholder (or if applicable, such Stockholder’s spouse), except for compliance with the applicable requirements of the Securities Act, the Exchange Act or any governmental entity, agencyother United States or official except for (A) applicable requirements, iffederal securities laws and the rules and regulations promulgated thereunder, (c) violate, conflict with, or result in a breach of any provisions of, or require any consent, waiver or approval or result in a default or loss of a benefit (or give rise to any right of termination, cancellation, modification or acceleration or any event that, with the giving of notice, the passage of time or otherwise, would constitute a default or give rise to any such right) under any of the Securities Exchange Actterms, conditions or provisions of 1934, as amended, and (B) where the failureany Contract to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or impair the performance bywhich such Stockholder (or if applicable, such Stockholder’s spouse) is a party or by which such Stockholder (or if applicable, such Stockholder’s spouse) or such Stockholder’s Shares may be bound, (d) result (or, with the giving of his obligations under this Agreement;
(f) with respectnotice, the passage of time or otherwise, would result) in the creation or imposition of any Lien (other than Permitted Liens) on any asset of such Stockholder (or if applicable, such Stockholder’s spouse) (other than one created by Parent, Merger Sub I or Merger Sub II) or (e) violate any Law applicable to such Stockholder as of the date hereof, there is no Proceeding pending against, or, to the actual knowledge of such Stockholder, threatened against such Stockholder or any of(or if applicable, such Stockholder’s
properties spouse) or assets (including any ofby which such Stockholder’s Subject Shares) before or by any Governmental Entity that couldShares are bound, except, in the case of each of clauses (c), (d) and (e), as would not reasonably be expected to prevent or materially delay or impair the consummation by such Stockholder of the transactions contemplated by this Agreement or otherwise materially impair such Stockholder’s ability to perform its obligations hereunder;hereunder.
(c) Ownership of Shares; Total Shares. Such Stockholder is the record and beneficial owner of all of the Existing Shares and has good and marketable title to all of the Existing Shares free and clear of any Liens, claims, proxies, voting trusts or agreements, options, rights, understandings or arrangements or any other encumbrances or restrictions whatsoever on title, transfer or exercise of any rights of a stockholder in respect of such Existing Shares (collectively, “Encumbrances”), except for any such Encumbrance that may be imposed pursuant to (i) this Agreement, (ii) any applicable restrictions on transfer under the Securities Act or any state
(g) no broker, finder, financial advisor, investment banker or other Person is entitled to any brokerage, finder’s, financial advisor’s or other similar fee or commission from Parent, Purchaser or
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securities law, (iii) the Company Governing Documents, (iv) any applicable Company Equity Plan or agreements evidencing grants thereunder, (v) the Amended and Restated Investors’ Rights Agreement, dated May 9, 2019, and (vi) the Founder Voting Agreement to which such Stockholder is a party ((i) through (vi), collectively, “Permitted Encumbrances”).
(d) The Existing Shares listed on Schedule A opposite such Stockholder’s name constitute all of the shares of Company Common Stock, Company Options, Company RSUs, and Company Restricted Share Award, and any other securities of the Company beneficially owned by such Stockholder as of the date hereof.
(e) Voting Power. Except, in connectioneach case, for the Shares subject to the Founder Voting Agreements, such Stockholder has full voting power with respect to all of such Stockholder’s Shares (to the extent such Shares have voting rights) (provided that nothing under the Founder Voting Agreements would prohibit, conflict with or otherwise impede this Agreement or the transactions contemplated hereby based upon arrangements made by or on behalfhereby), and full power of disposition with respect to such Shares to the extent they consist of vested shares of Company Common Stock, full power to issue instructions with respect to the matters set forth herein and full power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Stockholder.Stockholder’s Shares.
1.6. (f) Absence of Other Voting Agreements. (i) None of such Stockholder’s Shares is or will be subject to any voting trust, proxy or other agreement, arrangement or restriction with respect to the voting of such Shares, in each case, that is inconsistent with this Agreement and (ii) except for such Stockholder’s Shares subject to the applicable Founder Voting Agreement, none of such Stockholder’s Shares is subject to any pledge agreement pursuant to which such Stockholder does not retain sole and exclusive voting rights with respect to such Shares subject to such pledge agreement at least until the occurrence of an event of default under the related debt instrument. True and complete copies of each Founder Voting Agreement in effect as of the date hereof have been made available to Parent prior to the date hereof. None of the parties thereto is in material breach of or any material default under the terms of any Founder Voting Agreement. Each Founder Voting Agreement is a valid, binding and enforceable obligation on each party thereto and is in full force and effect, subject to the Enforceability Limitations.
(g) Absence of Litigation. With respect to such Stockholder, as of the date hereof, there is no Proceeding pending against such Stockholder, or, to the knowledge of such Stockholder, threatened against (i) such Stockholder or its affiliates or (ii) any of such Stockholder’s properties or assets (including any of such Stockholder’s Shares), in each case, that would reasonably be expected to prevent, materially delay or impair the performance by such Stockholder of its obligations under this Agreement.
(h) Reliance by Parent, Merger Sub I and Merger Sub II. Such Stockholder understands and acknowledges that Parent, Merger Sub I and Merger Sub II are entering into the Merger Agreement in reliance upon such Stockholder’s execution and delivery of this Agreement and the representations and warranties of such Stockholder contained herein. Such Stockholder understands and acknowledges that the Merger Agreement governs the terms of the Mergers and the other transactions contemplated thereby.
4.2 Representations and Warranties of Parent. Parent hereby represents and Purchaserwarrants to each Stockholder as follows:
(a) Organization and Qualification. EachParent is a duly organized and validly existing corporation in good standing under the Laws of Parentthe jurisdiction of its organization. All of the issued and Purchaseroutstanding capital stock of Merger Sub I and Merger Sub II is owned directly or indirectly by Parent.
(b) Authority for this Agreement. Parent has all requisite entity power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by Parent and Purchaser have been duly and validly authorized by all necessary entity action on the part of each of Parent, and Purchaser, and no other entity proceedings on the part of Parent and Purchaser are necessary to authorize this
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Agreement. This Agreement has been duly and validly executed and delivered by Parent and Purchaser and, assuming the due authorization, execution and delivery by each Stockholder, constitutes a legal, valid and binding obligation of each of Parent, and Purchaser, enforceable against each of Parent and Purchaser in accordance with its terms, subject to the Enforceability Limitations.
1.7. ARTICLE V
MISCELLANEOUS
5.1 CovenantsNotices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally (notice deemed given upon receipt), by electronic mail (notice deemed given upon transmission so long as there is no return error message or other notification of the Stockholders.
(a) Each Stockholder covenants and agrees that such Stockholder shall not, directly or indirectly, take any action that is intended, or would reasonably be expected, to materially interfere with, materially delay, or prevent the consummation of the Offer, the Merger or the other Transactions or this Agreement or the performancenon-delivery received by the Companysender; provided that electronic mail received after 6:00 p.m., Pacific Time, shall be deemed received on the next day) or sent by a nationally recognized overnight courier or express delivery service (notice deemed given upon receipt of its obligations underproof of delivery), to the Merger Agreement orParties at the following addresses (or at such other address for a Party as shall be specified by anylike notice):
if to Parent, to:
salesforce.com, inc.
Salesforce Tower
415 Mission Street, 3rd Floor
San Francisco, CA 94105
Email: legal@salesforce.com
Attention: General Counsel
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Email: ajnussbaum@wlrk.com
rcchen@wlrk.com
Attention: Andrew J. Nussbaum
Ronald C. Chen
if to a Stockholder, of its obligations under this Agreement.
(b) From the date of this Agreement and until the termination of this Agreement, and without limiting any provision of the Merger Agreement in any respect, each Stockholder shall not: (i) continue any solicitation, knowing encouragement, discussions or negotiations with any Persons that may be ongoing with respect to an Acquisition Proposal; (ii) solicit, initiate or knowingly facilitate or knowingly encourage any inquiries regarding, or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal; (iii) engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person (other than Parent, Purchaser or any of their Representatives) anynon-public information in connection with or for the purpose of knowingly encouraging or knowingly facilitating, an Acquisition Proposal or any proposal or offer that would reasonably be expected to lead to an Acquisition Proposal; (iv) recommend any other holder of Company Common Stock to not tender shares of Company Common Stock into the Offer; or (v) support, recommend, endorse or approve any Acquisition Proposal or enter into any letter of intent, support agreement or similar commitment relating to or facilitating an Acquisition Proposal. The foregoing notwithstanding, nothing in this Agreement shall prohibit any Stockholder from taking any action that the Company or its Representatives are permitted to take under Section 6.3 of the Merger Agreement solely in such Stockholder’s capacity as a directoraddress or other Representative ofemail address set forth below:
Stewart Butterfield and the Company.David C. Butterfield and Alfonso D. Rubio Memorial Foundation
(c) From500 Howard Street
San Francisco, CA 94105
Email: ***
Attention: Stewart Butterfield
Eric Costello and the date of this AgreementCostello Entities
500 Howard Street
San Francisco, CA 94105
Email: ***
Attention: Eric Costello
Cal Henderson, Rebecca Reeve Henderson and until the termination of this Agreement, if any Stockholder transfers, sells, assigns, pledges or otherwise disposes of any of such Stockholder’s Subject Shares (including, for the avoidance of doubt, any “Transfer” (as defined in the Company Certificate)) in each case that would not cause or result in the conversion of such Subject Shares into shares of Class A Common Stock pursuant to the Company Certificate, such Stockholder shall cause the transferee in any such transfer, sale, assignment, pledge or other disposition to execute and deliver a joinder to this Agreement in a form that is reasonably satisfactory to Parent and Purchaser pursuant to which such transferee agrees to be bound as a Stockholder hereunder.Henderson Entities
San Francisco, CA 94105
Email: ***
Attention: Cal Henderson
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(d) Each Stockholder shall not make any public announcement regarding this Agreement or the transactions contemplated hereby without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed), except as may be required by applicable Law;provided, that reasonable notice of any disclosure required by applicable Law shall be provided to Parent,Serguei Mourachov and such Stockholder will consider in good faith the reasonable comments of Parent 1232391 B.C. Ltd.
500 Howard Street
San Francisco, CA 94105
Email: ***
Attention: Serguei Mourachov
with respect to such disclosure and otherwise cooperate with Parent in obtaining confidential treatment with respect to such disclosure.a copy to:
1.8. Covenants of Parent and Purchaser. Each of Parent and Purchaser shall keep each Stockholder reasonably informed on a reasonably current basis of the status of the Offer, including with respect to the number of shares of Company Common Stock that have been validly tendered and not validly withdrawn in accordance with the terms of the Offer, and material developments with respect thereto and, upon each Stockholder’s request (no more often than once per day during the Offer (other than on the date of the expiration of the Offer)), provide such Stockholder as soon as practicable with the most recent report then available from the Exchange Agent detailing the number of shares of Company Common Stock that have been validly tendered and not validly withdrawn in accordance with the terms of the Offer;provided that delivery of such information or report to the Company or its Representatives shall constitute delivery to the Stockholders for purposes of thisSection 1.8; provided, further, that a breach of this Section 1.8 shall not relieve or otherwise affect the obligations of the Stockholders pursuant to this Agreement.Latham & Watkins LLP
1.9. Documentation and Information. Each Stockholder hereby consents to and hereby authorizes Parent and Purchaser to publish and disclose in all documents and schedules filed with the SEC or any other Governmental Entity or applicable securities exchange, and any press release or other disclosure document that Parent or Purchaser reasonably determines to be necessary or advisable in connection with the Offer, the Merger or any other transactions contemplated by the Merger Agreement or this Agreement, such Stockholder’s identity and ownership of such Stockholder’s Subject Shares, the existence of this Agreement and the nature of such Stockholder’s commitments and obligations under this Agreement, and such Stockholder acknowledges that Parent and Purchaser may, in Parent’s sole discretion, file this Agreement or a form hereof with the SEC or any other Governmental Entity or securities exchange.140 Scott Drive
1.10. Menlo Park, California 94025
Email: rick.kline@lw.com
tad.freese@lw.com
mark.bekheit@lw.com
Attention: Richard A. Kline
Tad J. Freese
Mark M. Bekheit
5.2 Termination. This Agreement shall terminate automatically with respect to eacha Stockholder and Parent, without any notice or other action by any Person, upon the firstearliest to occur of (a) the valid termination of the Merger Agreement in accordance with its terms, (b) the First Effective Time, (c) the entry without the prior written consent of such Stockholder into any amendment, waiver or modification to the Merger Agreement as in effect on the date hereof, that results in a decrease in or change in form of, the OfferMerger Consideration or changes the mix of Merger Consideration or (d) the mutualdelivery of written consentnotice by Parent to such Stockholder of Parenttermination of this Agreement, and upon the occurrence of the earliest of such Stockholder.events this Agreement shall terminate and be of no further force (the date of termination, the “Termination Date”). Upon termination of this Agreement no partywith respect to a Stockholder and Parent, neither such Stockholder nor Parent shall have any further obligations or liabilities under this Agreement;provided,,however, that (i) nothing set forth in thisSection 1.105.2shall relieve or otherwise limit the liability of any party from liabilityParty for fraud or any willful breach (as defined in the Merger Agreement) of this Agreement prior to termination hereof and (ii) the provisions of thisSectionArticle 1.10 andSections 1.11 through1.25V shall survive any termination of this Agreement.
1.11. Notices. Except as provided inSection 1.2 andSection 1.3, all notices and other communications hereunder shall be in writing and shall be deemed to have been duly given and received only if delivered by electronic mail (notice deemed given upon confirmation of receipt);provided that the notice or other communication is sent to the address or email address set forth (a) if to Parent or Purchaser, to the email address set forth in Section 10.4 of the Merger Agreement and (b) if to a Stockholder, to such Stockholder’s email address set forth on a signature page hereto, or to such other email address as such party may hereafter specify for the purpose by notice to each other party hereto.
1.12. 5.3 Amendments and Waivers. Any provision of
(a) Subject to applicable Law and except as otherwise provided in this Agreement, this Agreement may be amended, modified and supplemented by written agreement of each Party.
(b) At any time and from time to time prior to the First Effective Time, each Party may, to the extent legally allowed and except as otherwise set forth herein, (i) extend the time for the performance of any of the obligations or waived ifother acts of the other Party, as applicable, (ii) waive any inaccuracies in the representations and warranties made by the other Party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for their respective benefit contained herein. Any agreement on the part of Parent or any Stockholder to any such amendmentextension or waiver isshall be valid only if set forth in an instrument in writing and is signed in the caseon behalf of an amendment, by each party to this AgreementParent or in the case of a waiver, by each party against whom the waiver is to be effective.such Stockholder, as applicable. No failure or delay by any partyParent or a Stockholder in exercising any right power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right power or privilege.hereunder.
1.13. Expenses. All fees and expenses incurred in connection herewith and the transactions contemplated hereby shall be paid by the party incurring such fees and expenses, whether or not the Offer or the Merger is consummated.
1.14. 5.4 Entire Agreement; AssignmentThird-Party Beneficiaries. This Agreement and the other documents and certificates delivered pursuant hereto, constitute the entire agreement, and supersede all prior agreements and understandings, both written and oral, among the parties heretoParties with respect to the subject matter of this Agreement. ThisNothing in this Agreement, shall not be assigned byexpress or implied, is intended to confer upon any party (including by operation of law, by mergerPerson other than the Parties any rights or otherwise) without the prior written consent of (a) Parent and Purchaser, in the case of an assignment by a Stockholder and (b) each Stockholder, in the case of an assignment by Parentremedies hereunder or Purchaser;provided, that Parent or Purchaser may assign any of their respective rights and obligations to any direct or indirect Subsidiary of Parent, but no such assignment shall relieve Parent or Purchaser, as the case may be, of its obligations hereunder.thereunder.
1.15. 5.5 Enforcement of the AgreementEnforcement; Remedies. The parties heretoParties agree that irreparable damage would occur and that the Parent and Purchaser would not have any adequate remedy at law (even if available) in the event that any Stockholder did not perform any of the
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provisions of this Agreement in accordance with their specific terms or otherwise breached any such provisions. It is accordingly agreed that Parent and Purchaser shall be entitled to an injunction or injunctions without the posting of bond, to prevent or remedy any breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in addition to any other remedy to which they are entitled at law or in equity. Any and all remedies herein expressly conferred upon Parent and Purchaser will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by Law or equity upon Parent, or Purchaser, and the exercise by Parent or Purchaser of any one remedy will not preclude the exercise of any other remedy.
1.16. 5.6 Jurisdiction; Waiver of Jury TrialGoverning Law; Jurisdiction.
(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to conflicts of laws principles that would result in the application of the Law of any other state.
(b) Each party heretoParty hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in the State of Delaware, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each party heretoof the Parties hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding, except in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof,thereof; (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in the Court of Chancery of the State of Delaware, or, if (and only if) such court finds it lacks jurisdiction, the Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof,thereof; (iii) waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any such action or proceeding in such courtscourts; and (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in such courts. Each party heretoParty agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. Each party heretoParty to this Agreement irrevocably consents to service of process inside or outside the territorial jurisdiction of the courts referred to in thisSection 1.16(a)5.6(b) in the manner provided for notices inSection 1.115.1. Nothing in this Agreement will affect the right of Parent or Purchaserany Party to this Agreement to serve process in any other manner permitted by applicable Law.
(b)5.7 Waiver of Jury Trial.
(a) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THISSECTION 1.16(B) 5.7.
1.17. 5.8 Governing LawAssignment. This Agreement shall not be governedassigned by and construed in accordance with,any Party (including by operation of law, by merger or otherwise) without the lawsprior written consent of the State of Delaware, without giving effect to conflicts of laws principles that would result(a) Parent, in the applicationcase of an assignment by a Stockholder and (b) each Stockholder, in the Lawcase of an assignment by Parent; provided that Parent may assign
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any of its respective rights and obligations to any direct or indirect Subsidiary of Parent, but no such assignment shall relieve Parent of its obligations hereunder. Subject to the preceding sentence, but without relieving any Party of any other state.obligation hereunder, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.
1.18. 5.9 Descriptive Headings. The descriptivetable of contents and headings hereinset forth in this Agreement or any schedule delivered pursuant to this Agreement are inserted for convenience of reference purposes only and areshall not intendedaffect or be deemed to be part of or to affect in any way the meaning or interpretation of this Agreement.1.19.Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to confer uponsuch schedule or any other Person any rightsterm or remedies of any nature whatsoever underprovision hereof or by reason of this Agreement.thereof.
1.20. 5.10 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other termsconditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties heretoParties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties heretoParties as closely as possible in a mutuallyan acceptable manner.
1.21. 5.11 Counterparts. This Agreement may be executed manually or by other electronic transmission by the Parties, in any number of counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constituteconsidered one and the same agreement. This Agreement or anyagreement and shall become effective when a counterpart may be executedhereof shall have been signed by each of the Parties and delivered to the other Parties. The exchange of a fully executed Agreement (in counterparts or otherwise) by facsimile copies, electronic mailtransmission in portable document.pdf or DocuSign format (.pdf), or any electronic signature complying with the U.S. ESIGN Act of 2000 (including www.docusign.com), each of which shall be deemed an original.sufficient to bind the Parties to the terms and conditions of this Agreement.
1.22. 5.12 Interpretation. When a reference is made in this Agreement to sections, such reference shall be to a section of this Agreement, unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” As used in this Agreement, the term “affiliates” shall have the meaning set forth in Rule12b-2 of the Exchange Act. The word “extent” and the phrase “to the extent” when used in this Agreement shall mean the degree to which a subject or other things extends, and such word or phrase shall not merely mean “if.” The term “or” is not exclusive, and shall be interpreted as “and/or.” The phrases “the date of this Agreement,” “the date hereof,” “of even date herewith” and terms of similar import, shall be deemed to refer to the date set forth in the preamble to this Agreement. This Agreement shall not be interpreted or construed to require any Person to take any action, or fail to take any action, if to do so would violate any applicable Law. A reference to any specific Law or to any provision of any Law, whether or not followed by the phrase “as amended,” includes any amendment to, and any modification,re-enactment or successor thereof, any legislative provision substituted therefor and all rules, regulations and statutory instruments issued thereunder or pursuant thereto, except that, for purposes of any representations and warranties in this Agreement that are made as a specific date, references to any specific Law will be deemed to refer to such legislation or provision (and all rules, regulations and statutory instruments issued thereunder or pursuant thereto) as of such date. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the partyParty drafting such agreement or document.
5.13 Publicity; Documentation and Information. Each Stockholder agrees that it shall not make any public announcement regarding this Agreement or the transactions contemplated hereby without the prior written consent of Parent, except as may be required by applicable Law (provided that reasonable notice of any such disclosure will be provided to Parent, and such Stockholder will consider in good faith the reasonable comments of Parent with respect to such disclosure and otherwise cooperate with Parent in obtaining confidential treatment with respect to such disclosure). Each Stockholder consents to and hereby authorizes Parent, Merger Sub I and Merger Sub II to publish and disclose in all documents and schedules filed with the SEC or any other Governmental Entity or applicable securities exchange, and any press release or other disclosure document that Parent, Merger Sub I or Merger Sub II reasonably determines to be necessary or advisable in connection with the Mergers or any other transactions contemplated by the Merger Agreement or this Agreement, including, without
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1.23. Directorslimitation, any registration statement and Officers. Notwithstanding any provisiondefinitive proxy statement/prospectus (and any amendments or supplements thereto), such Stockholder’s identity and ownership of such Stockholder’s Shares, the existence of this Agreement and the nature of such Stockholder’s commitments and obligations under this Agreement, and each Stockholder acknowledges that Parent, Merger Sub I and Merger Sub II may, in Parent’s sole discretion, file this Agreement or a form hereof with the SEC or any other Governmental Entity or securities exchange.
5.14 Capacity as Stockholder. Each Stockholder signs this Agreement in such Stockholder’s capacity as a stockholder of the Company, and not, if applicable, in such Stockholder’s capacity as a director, officer or employee of the Company. Notwithstanding anything herein to the contrary, but without limiting any provision of the Merger Agreement in any respect, nothing in this Agreement shall limit orin any way restrict a Stockholder, or any affiliate, employee or designee of a Stockholder, who is a director or officer of the Company orin the taking of any of its Subsidiaries from acting in such capacity or fulfillingactions (or the obligations of such office, including by voting,failure to take any actions) in his or her capacity as a director or officer of the Company, or any of its Subsidiaries’, in the Stockholder’s,exercise of his or its affiliate’s, employee’sher fiduciary duties in his or designee’s, as applicable, sole discretion on any matter. In this regard, a Stockholder shall not be deemed to make any agreement or understanding in this Agreement in such Stockholder’sher capacity as a director or officer of the Company.Company, or prevent, or be construed to create any obligation on the part of, any director or officer of the Company from taking any action in his or her capacity as such director or officer.
5.15 Further Assurances. Each Stockholder is executingwill execute and deliver, or cause to be executed and delivered, all further documents and instruments and use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Law, to perform its obligations under this Agreement solely in such capacity as a record or beneficial holder of shares of Company Common Stock.Agreement.
1.24. No Ownership Interest. Except as otherwise provided herein, nothing contained in this Agreement shall be deemed to vest in Parent or Purchaser any direct or indirect legal or beneficial ownership or incidence of ownership of or with respect to the Subject Shares. All rights, ownership and economic benefits of and relating to the Subject Shares shall remain vested in and belong to each Stockholder (without limiting such Stockholder’s obligations hereunder), and neither Parent nor Purchaser shall have any power or authority to direct such Stockholder in the voting or Transfer (as defined in the Company Certificate) of any of the Shares.
1.25. 5.16 Stockholder Obligation Several and Not Joint. The obligations of each Stockholder hereunder shall be several and not joint, and no Stockholder shall be liable for any breach of the terms of this Agreement by any other Stockholder.
[Signature Pages Follow]
The parties are executing this Agreement on the date set forth in the introductory clause.
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[Signature Page to Letter Agreement]
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Annex I
FORM OF CONVERSION DOCUMENT
Date: [ ]
American Stock Transfer and Trust Company
6201 15th Avenue, Brooklyn
New York 11219
Email:portalconversion@astfinancial.com and ccolosso@astfinancial.com
Re: Conversion of Tableau Software, Inc. Class B Common Stock to Class A Common Stock
Dear Sir/Madam:
[ ] (“Entity Stockholder”) currently holds shares of Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”), of Tableau Software, Inc. (the “Company”). Each share of Class B Common Stock has ten (10) votes per share, whereas each share of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”) of the Company has one (1) vote per share. As of the date hereof, shares of Class B Common Stock cannot be traded on the New York Stock Exchange (NYSE) or transferred to a brokerage account until such shares have been converted to shares of Class A Common Stock on a 1:1 basis by completing an irrevocable election to convert.
The Entity Stockholder hereby elects, pursuant to Section D.5.a of Article IV of the Amended and Restated Certificate of Incorporation of the Company, to effect the conversion of [NUMBER] shares of the Company’s Class B Common Stock held by the Entity Stockholder into an equal number of fully paid andnon-assessable shares of Class A Common Stock. The Entity Stockholder understands and acknowledges that this election to convert is irrevocable and will be effective as to the number of shares of Class B Common Stock specified in the immediately preceding sentence and held by the Entity Stockholder in the AST Account below, without any further action by it upon delivery of this election notice to American Stock Transfer and Trust Company.
AST Account Number
This Conversion is duly executed below by the Entity Stockholder or on behalf of Entity Stockholder by its authorized representative.
[Name of Entity Stockholder]
Annex II
FORM OF IRREVOCABLE CONVERSION NOTICE
[Date]
Reference is hereby made to that certain letter agreement, dated as of June 9, 2019 (as it may be amended from time to time, the “Letter Agreement”), by and among salesforce.com, inc., a Delaware corporation (“Parent”), and Sausalito Acquisition Corp., a Delaware corporation (“Purchaser”) and the stockholders of Tableau Software, Inc., a Delaware corporation (the “Company”) party thereto (the “Stockholders”). Capitalized terms that are used but not defined herein have the meaning given to such terms in the Letter Agreement.
Pursuant to Section 1.3 of the Letter Agreement, Parent is hereby delivering to each Stockholder irrevocable notice that all of the conditions to the Offer have been either satisfied (other than those conditions that by their nature are to be satisfied at the expiration of the Offer, each of which would be capable of being satisfied were the expiration of the Offer to occur at the time Parent delivers this notice) or irrevocably waived by Parent and Purchaser;provided, that, for purposes of this notice, the satisfaction of the Minimum Condition is tested assuming that all Subject Shares of all Stockholders to be converted into shares of Class A Common Stock pursuant to Section 1.2 of the Letter Agreement were tendered prior to the expiration of the Offer and that the consummation of the Offer occurs contemporaneously with the delivery of this notice. This notice shall constitute the Irrevocable Conversion Notice for all purposes under the Letter Agreement.
[Signature Page Follows]
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IN WITNESS HEREOF,WHEREOF, the undersigned hasParties, intending to be legally bound hereby, have executed or caused this noticeAgreement to be signed on behalf of Parentexecuted in counterparts, all as of the dateday and year first written above.above written.
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By: | /s/ John Somorjai | |
Name: | ||
Title: |
[Signature Page to Irrevocable Conversion NoticeVoting and Support Agreement]
STOCKHOLDERS: | ||
By: | /s/ Stewart Butterfield | |
Name: | Stewart Butterfield | |
DAVID C. BUTTERFIELD AND ALFONSO D. RUBIO MEMORIAL FOUNDATION | ||
By: | /s/ Stewart Butterfield | |
Name: | Stewart Butterfield | |
Title: | Chief Executive Officer |
[Signature Page to Voting and Support Agreement]
STOCKHOLDERS: | ||
By: | /s/ Eric Costello | |
Name: | Eric Costello | |
By: | /s/ Katrina Costello | |
Spouse (if applicable): Katrina Costello | ||
ERIC E.G. COSTELLO REVOCABLE TRUST | ||
By: | /s/ Eric Costello | |
Name: | Eric Costello | |
Title: | Trustee | |
ESTHER COSTELLO 2019 TRUST | ||
By: | /s/ Michael Todd Parker | |
Name: | Michael Todd Parker | |
Title: | Trustee | |
JUDE COSTELLO 2019 TRUST | ||
By: | /s/ Michael Todd Parker | |
Name: | Michael Todd Parker | |
Title: | Trustee | |
PHOEBE COSTELLO 2019 TRUST | ||
By: | /s/ Michael Todd Parker | |
Name: | Michael Todd Parker | |
Title: | Trustee | |
HOPE COSTELLO 2019 TRUST | ||
By: | /s/ Michael Todd Parker | |
Name: | Michael Todd Parker | |
Title: | Trustee |
[Signature Page to Voting and Support Agreement]
STOCKHOLDERS: | ||
By: | /s/ Cal Henderson | |
Name: | Cal Henderson | |
By: | /s/ Rebecca Reeve Henderson | |
Name: | Rebecca Reeve Henderson | |
CAL HENDERSON AND REBECCA REEVE HENDERSON AS TRUSTEES OF THE HENDERSON FAMILY TRUST U/A/D 7/21/2016 | ||
By: | /s/ Cal Henderson | |
Name: | Cal Henderson | |
Title: | Trustee | |
THE CAL HENDERSON 2019 GRANTOR RETAINED ANNUITY TRUST | ||
By: | /s/ Cal Henderson | |
Name: | Cal Henderson | |
Title: | Trustee | |
THE THEODORE HENDERSON GST EXEMPT TRUST UNDER THE CAL HENDERSON FAMILY 2019 IRREVOCABLE TRUST | ||
By: | /s/ Cal Henderson | |
Name: | Cal Henderson | |
Title: | Trustee |
[Signature Page to Voting and Support Agreement]
STOCKHOLDERS: | ||
WILLIAM FRANKLIN HENDERSON GST EXEMPT TRUST UNDER THE CAL HENDERSON FAMILY 2019 IRREVOCABLE TRUST | ||
By: | /s/ Cal Henderson | |
Name: | Cal Henderson | |
Title: | Trustee | |
THE REBECCA REEVE HENDERSON 2019 GRANTOR RETAINED ANNUITY TRUST | ||
By: | /s/ Rebecca Reeve Henderson | |
Name: | Rebecca Reeve Henderson | |
Title: | Trustee | |
THE THEODORE HENDERSON GST EXEMPT TRUST UNDER THE REBECCA REEVE HENDERSON FAMILY 2019 IRREVOCABLE TRUST | ||
By: | /s/ Rebecca Reeve Henderson | |
Name: | Rebecca Reeve Henderson | |
Title: | Trustee | |
THE WILLIAM FRANKLIN HENDERSON GST EXEMPT TRUST UNDER THE REBECCA REEVE HENDERSON FAMILY 2019 IRREVOCABLE TRUST | ||
By: | /s/ Rebecca Reeve Henderson | |
Name: | Rebecca Reeve Henderson | |
Title: | Trustee |
[Signature Page to Voting and Support Agreement]
STOCKHOLDERS: | ||
By: | /s/ Serguei Mourachov | |
Name: | Serguei Mourachov | |
By: | /s/ Oksana Leontieva | |
Spouse (if applicable): Oksana Leontieva | ||
1232391 B.C. LTD. | ||
By: | /s/ Serguei Mourachov | |
Name: | Serguei Mourachov | |
Title: | Director |
[Signature Page to Voting and Support Agreement]
SCHEDULE A
EXISTING SHARES
Name of Stockholder | Number of Shares of Class A Common Stock | Number of Shares of Class B Common Stock | Company Options | Company RSUs | Company Class A Restricted Share Awards | Company Class B Restricted Share Awards | ||||||||||||||||||
Stewart Butterfield and the David C. Butterfield and Alfonso D. Rubio Memorial Foundation | 1,670,370 | 37,367,937 | 697,471 | 762,670 | 122,817 | 987,928 | ||||||||||||||||||
Eric Costello and the Costello Entities | 88,302 | 6,334,174 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Cal Henderson, Rebecca Reeve Henderson and the Henderson Entities | 94,365 | 16,269,141 | 181,122 | 140,601 | 0 | 0 | ||||||||||||||||||
Serguei Mourachov and 1232391 B.C. Ltd. | 40,720 | 13,000,000 | 0 | 1,688 | 0 | 0 |
Conditions to the Offer
Notwithstanding any other provisionsSection 262 of the Offer, and in addition to (and not in limitation of) Parent’s and Purchaser’s rights to extend, amend or terminate the Offer in accordance with the provisions of that certain Agreement and Plan of Merger, dated as of June 9, 2019 (the “Agreement”), by and among salesforce.com, inc., a Delaware corporation (“Parent”), Sausalito Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”), and Tableau Software, Inc., a Delaware corporation (the “Company”) (capitalized terms that are used but not otherwise defined in thisAnnex C shall have the respective meanings ascribed thereto in the Agreement) and applicableGeneral Corporation Law and in addition to (and not in limitation of) the obligations of Purchaser to extend the Offer pursuant to the terms and conditions of the Agreement and applicable Law, neither Parent nor Purchaser shall be required to accept for payment or, subject to any applicable rules and regulationsState of the SEC (including Rule14e-1(c) promulgated under the Exchange Act (relating to the obligationDelaware
SECTION 262 APPRAISAL RIGHTS.
(a) Any stockholder of Purchaser to pay for or return tendereda corporation of this State who holds shares of Company Common Stock promptly after termination or withdrawal of the Offer)), pay for any shares of Company Common Stock that are validly tendered in the Offer and not validly withdrawn prior to the expiration of the Offer in the event that, at any expiration of the Offer:
(A) the Minimum Condition shall not have been satisfied;
(B) (i) any waiting period (and extensions thereof) applicable to the Transactions under the HSR Act shall not have expired or been terminated or (ii) any other requiredpre-closing approvals, consents, waivers or clearances under any Antitrust Laws of the jurisdictions set forthstock on Section 7.2 of the Parent Disclosure Letter shall not have been obtained;
(C) any Governmental Entity of competent jurisdiction shall have (i) enacted, issued or promulgated any Law on or after the date of the making of a demand pursuant to subsection (d) of this Agreementsection with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a corporation; the words “stock” and “share” mean and include what is ordinarily meant by those words; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title:
(1) Provided, however, that, no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation (or, there shall have been any change on or after the date hereof in the manner in which any Governmental Authority enforces or interprets any Law enacted, issued or promulgated priorcase of a merger pursuant to the date of this Agreement)§ 251(h), that is in effect as of immediately prior to the expirationexecution of the Offeragreement of merger), were either: (i) listed on a national securities exchange or (ii) issuedheld of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in § 251(f) of this title.
(2) Notwithstanding paragraph (b)(1) of this section, appraisal rights under this section shall be available for the shares of any class or grantedseries of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any ordersother corporation, or injunctions (whether temporary, preliminarydepository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or permanent) thatdepository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a. and b. of this section; or
d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs (b)(2)a., b. and c. of this section.
(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 or § 267 of this title is in effect as ofnot owned by the parent immediately prior to the expirationmerger, appraisal rights shall be available for the shares of the Offer,subsidiary Delaware corporation.
(4) [REPEALED]
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(c) Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the provisions of this section, including those set forth in subsections (d), (e), and (g) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to § 228, § 251(h), § 253, or § 267 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of giving such notice or, in the case which hasof a merger approved pursuant to § 251(h) of this title, within the effectlater of restraining, enjoining or otherwise prohibiting the consummation of the Transactions;
(D) the FormS-4 shall not have become effective under the Securities Act or shall be the subjectoffer contemplated by § 251(h) of any stop order or proceeding seeking a stop order;
(E) the shares of Parent Common Stock to be issued in the Offerthis title and the Merger shall not have been approved for listing on the NYSE, subject to official notice of issuance (provided that Parent shall not be entitled to invoke this condition if it has not complied in all material respects with Section 7.12); or
(F) any of the following shall have occurred and continue to exist as of immediately prior to the expiration of the Offer:
(1) (A) the representations and warranties of the Company set forth inSection 4.1(a) (other than the last sentence ofSection 4.1(a)), the first sentence ofSection 4.1(b),Section 4.3,Section 4.22,Section 4.23 orSection 4.25 (x) that are qualified by materiality or Company Material Adverse Effect shall not be true and correct in all respects as of the date hereof or shall not be true and correct in all respects as of the expiration of the Offer as though made on and as of the expiration of the Offer (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date) or (y) that are not qualified by materiality or Company Material Adverse Effect shall not be true and correct in all material respects as of the date hereof or shall not be true and correct in all material respects as of the expiration of the Offer as though
made on and as of the expiration of the Offer (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (B) the representations and warranties of the Company set forth inSection 4.2(a), Section 4.2(c),Section 4.2(d) orSection 4.2(e) shall not be true and correct other than forde minimisinaccuracies as of the date hereof or shall not be true and correct other than forde minimisinaccuracies as of the expiration of the Offer as though made on and as of the expiration of the Offer (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date); (C) the representations and warranties of the Company set forth inSection 4.8(a) shall not be true and correct in all respects; or (D) the other representations and warranties of the Company set forth in this Agreement (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) shall not be true and correct as of the date hereof or shall not be true and correct as of the expiration of the Offer as though made on and as of the expiration of the Offer (except representations and warranties that by their terms speak specifically as of another date, in which case as of such date), except, with respect to thisclause (D), where any failures of any such representations and warranties to be true and correct (without giving effect to any qualification as to materiality or Company Material Adverse Effect contained therein) have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
(2) the Company shall not have performed or complied in all material respects with the obligations, covenants and agreements required to be performed or complied with by it under the Agreement at or prior to the expiration of the Offer;
(3) a Company Material Adverse Effect shall have occurred20 days after the date of giving such notice, demand in writing from the Agreementsurviving or resulting corporation the appraisal of such holder’s shares; provided that a demand may be delivered to the corporation by electronic transmission if directed to an information processing system (if any) expressly designated for that purpose in such notice. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to § 251(h) of this title, later than the later of the consummation of the offer contemplated by § 251(h) of this title and 20 days following the sending of the
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first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be continuing as of immediatelynot more than 10 days prior to the expirationdate the notice is given, provided, that if the notice is given on or after the effective date of the Offer;merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.
(4) Parent(e) Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and Purchaser(d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have failedthe right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon request given in writing (or by electronic transmission directed to an information processing system (if any) expressly designated for that purpose in the notice of appraisal), shall be entitled to receive from the Companycorporation surviving the merger or resulting from the consolidation a certificate, dated asstatement setting forth the aggregate number of shares not voted in favor of the Expiration Datemerger or consolidation (or, in the case of a merger approved pursuant to § 251(h) of this title, the aggregate number of shares (other than any excluded stock (as defined in § 251(h)(6)d. of this title)) that were the subject of, and signed by its chief executive officerwere not tendered into, and accepted for purchase or chief financial officer, certifyingexchange in, the offer referred to in § 251(h)(2)), and, in either case, with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such statement shall be given to the effect thatstockholder within 10 days after such stockholder’s request for such a statement is received by the conditions set forthsurviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either inclauses (1),(2) a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the corporation the statement described in this subsection.
(f) Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and(3) immediately above addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not occurred;been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
(5)(g) At the Agreementhearing on such petition, the Court shall determine the stockholders who have been validly terminatedcomplied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder. If
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immediately before the merger or consolidation the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange, the Court shall dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless (1) the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal, (2) the value of the consideration provided in the merger or consolidation for such total number of shares exceeds $1 million, or (3) the merger was approved pursuant to § 253 or § 267 of this title.
(h) After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with its terms.
The foregoing conditions are for the sole benefit of Parent and Purchaser, may be asserted by Parent or Purchaser regardlessrules of the circumstances giving riseCourt of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive
of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, and except as provided in this subsection, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any such conditions, and may be waived by Parent or Purchaser, in whole or in part, at any time andsurcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. At any time before the entry of judgment in their solethe proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as provided herein only upon the sum of (1) the difference, if any, between the amount so paid and absolutethe fair value of the shares as determined by the Court, and (2) interest theretofore accrued, unless paid at that time. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, (except forproceed to trial upon the Minimum Condition), in each case, subjectappraisal prior to the termsfinal determination of the Agreementstockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the applicable rules and regulationscase of holders of shares represented by certificates upon the surrender to the corporation of the SEC.certificates representing such stock. The failure by ParentCourt’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or Purchaser atresulting corporation be a corporation of this State or of any time to exercise anystate.
(j) The costs of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right, whichproceeding may be asserted at any timedetermined by the Court and from time to time.
200 WEST STREET | NEW YORK, NY 10282-2198
Tel:212-901-1000 | Fax:212-902-3000
PERSONAL AND CONFIDENTIAL
June 9, 2019
Boardtaxed upon the parties as the Court deems equitable in the circumstances. Upon application of Directors
Tableau Software, Inc.
837 North 34th Street, Suite 200
Seattle, WA 98103
Ladies and Gentlemen:
You have requested our opinion as toa stockholder, the fairness fromCourt may order all or a financial point of view to the holders (other than salesforce.com, inc. (“Salesforce”) and its affiliates)portion of the issued and outstanding shares of Class A common stock, par value $0.0001 per share (“Class A Common Stock”) and Class B common stock, par value $0.0001 per share (the “Class B Common Stock,” and together with the Class A Common Stock, the “Shares”) of Tableau Software, Inc. (the “Company”) of the Consideration (as defined below) to be paid to such holders, taken in the aggregate, pursuant to the Agreement and Plan of Merger, dated as of June 9, 2019 (the “Agreement”),expenses incurred by and among Salesforce, Sausalito Acquisition Corp., a wholly owned subsidiary of Salesforce (“Purchaser”), and the Company. The Agreement provides for an exchange offer for all of the Shares (the “Exchange Offer”) pursuant to which Purchaser will exchange 1.103 shares of common stock, par value $0.001 per share (the “Salesforce Common Stock”), of Salesforce (the “Consideration”) for each Share accepted. The Agreement further provides that, following completion of the Exchange Offer, Purchaser will merge with and into the Company (the “Merger”) and each outstanding Share (other than Cancelled Shares (as defined in the Agreement) and Converted Shares (as defined in the Agreement)) will be converted into the right to be paid the Consideration.
Goldman Sachs & Co. LLC and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial andnon-financial activities and services for various persons and entities. Goldman Sachs & Co. LLC and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which theyco-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Salesforce, any of their respective affiliates and third parties, or any currency or commodity that may be involved in the transaction contemplated by the Agreement (the “Transaction”). We have acted as financial advisor to the Company in connection with, and have participated in certain of the negotiations leading to, the Transaction. We expect to receive fees for our servicesstockholder in connection with the Transaction,appraisal proceeding, including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, to be charged pro rata against the value of all of which are contingent upon consummationthe shares entitled to an appraisal.
(k) From and after the effective date of the Transaction,merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an acceptance of the Company has agreedmerger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to reimburse certain of our expenses arising, and indemnify us against certain liabilities that may arise, out of our engagement. We may alsoan appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the future provide financial advisory and/or underwriting servicesCourt of Chancery shall be dismissed as to any stockholder without the Company, Salesforce and their respective affiliates for which our Investment Banking Division may receive compensation.
In connection with this opinion, we have reviewed, among other things, the Agreement; annual reports to stockholders and Annual Reports on Form10-Kapproval of the CompanyCourt, and Salesforcesuch approval may be conditioned upon such terms as the
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Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the five fiscal years ended December 31, 2018 and January 31, 2019, respectively; certain interim reports to stockholders and Quarterly Reports on Form10-Qterms offered upon the merger or consolidation within 60 days after the effective date of the Company and Salesforce; certain other communications from the Company and
Board of Directors
Tableau Software, Inc.
June 9, 2019
Page 2
Salesforce to their respective stockholders; certain publicly available research analyst reports for the Company and Salesforce; and certain internal financial analyses and forecasts for the Company and certain financial analyses and forecasts for Salesforcepro-forma for the Transaction, in each case,merger or consolidation, as prepared by the management of the Company and approved for our use by the Company (the “Forecasts”). We have also held discussions with members of the senior managements of the Company and Salesforce regarding their assessment of the strategic rationale for, and the potential benefits of, the Transaction and the past and current business operations, financial condition and future prospects of the Company and Salesforce; reviewed the reported price and trading activity for the Class A Common Stock and Salesforce Common Stock; compared certain financial and stock market information for the Company and Salesforce with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the software industry and in other industries; and performed such other studies and analyses, and considered such other factors, as we deemed appropriate.
For purposes of rendering this opinion, we have, with your consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, us, without assuming any responsibility for independent verification thereof. In that regard, we have assumed with your consent that the Forecasts have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company. We have not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or otheroff-balance-sheet assets and liabilities) of the Company or Salesforce or any of their respective subsidiaries and we have not been furnished with any such evaluation or appraisal. We have assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained without any adverse effect on the Company or Salesforce or on the expected benefits of the Transaction in any way meaningful to our analysis. We have assumed that the Transaction will be consummated on the terms set forth in the Agreement, without the waiver or modificationsubsection (e) of any term or condition the effect of which would be in any way meaningful to our analysis.this section.
Our opinion does not address the underlying business decision(l) The shares of the Companysurviving or resulting corporation to engage inwhich the Transaction,shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the relative meritsstatus of authorized and unissued shares of the Transaction as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, taxsurviving or accounting matters. We were not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, the Company or any other alternative transaction. This opinion addresses only the fairness from a financial point of view to the holders (other than Salesforce and its affiliates) of Shares, as of the date hereof, of the Consideration to be paid to such holders, taken in the aggregate, pursuant to the Agreement. We do not express any view on, and our opinion does not address, any other term or aspect of the Agreement or Transaction or any term or aspect of any other agreement or instrument contemplated by the Agreement or entered into or amended in connection with the Transaction, including, any allocation of the Consideration payable pursuant to the Agreement, including among the holders of Class A Common Stock and Class B Common Stock, the fairness of the Transaction to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons, in connection with the Transaction, whether relative to the Consideration to be paid to the holders (other than Salesforce and its affiliates) of Shares, taken in the aggregate, pursuant to the Agreement or otherwise. We are not expressing any opinion as to the prices at which shares of Salesforce Common Stock will trade at any time or as to the impact of the Transaction on the solvency or viability of the Company or Salesforce or the ability of the Company or Salesforce to pay their respective obligations when they come due. Our opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the informationresulting corporation.
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Board of Directors
Tableau Software, Inc.
June 9, 2019
Page 3
made available to us as of, the date hereof and we assume no responsibility for updating, revising or reaffirming this opinion based on circumstances, developments or events occurring after the date hereof. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Board of Directors of the Company in connection with its consideration of the Transaction and such opinion does not constitute a recommendation as to whether or not any holder of Shares should tender such Shares in connection with the Exchange Offer or how any holder of Shares should vote with respect to the Merger or any other matter. This opinion has been approved by a fairness committee of Goldman Sachs & Co. LLC.
Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Consideration to be paid to the holders (other than Salesforce and its affiliates) of Shares, taken in the aggregate, pursuant to the Agreement is fair from a financial point of view to such holders.
Very truly yours,
DIRECTORS AND EXECUTIVE OFFICERS OF SALESFORCE AND THE OFFEROR
Directors and Executive Officers of Salesforce
The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years of each director and executive officer of Salesforce and the Offeror are set forth below. Unless otherwise indicated below, the current business address of each director and executive officer is c/o salesforce.com, inc., Salesforce Tower, 415 Mission Street, 3rd Floor, San Francisco, CA 94105. Unless otherwise indicated below, the current business telephone number of each director and executive officer is (415) 901-7000.
During the past five years, none of the directors and executive officers of Salesforce or the Offeror listed below has (a) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.
Each such person listed below is a citizen of the United States, with the exception of Neelie Kroes, who is a citizen of the Netherlands. Alexandre Dayon is also a citizen of France, and Susan Wojcicki is also a citizen of Poland.
Directors and Executive Officers of Salesforce:
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PART II—INFORMATION NOT REQUIRED IN PROSPECTUSII
Item 20. Indemnification of Directors and Officers.Officers
Salesforce is incorporated in the State of Delaware. Section 102(b)(7) of the DGCLGeneral Corporation Law of the State of Delaware authorizes a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to a corporation or its stockholders for monetary damages for breach or alleged breach of the director’s “duty of care.” While this statute does not change the directors’ duty of care, it enables corporations to limit available relief to equitable remedies such as injunction or rescission. The statute has no effect on a director’s duty of loyalty or liability for acts or omissions not in good faith or involving intentional misconduct or knowing violations of law, illegal payment of dividends or stock redemptions or repurchases, or for any transaction from which the director derives an improper personal benefit.
As permitted by the statute, Salesforce has adopted provisions in its amended and restated certificate of incorporation which eliminate to the fullest extent permissible under Delaware law the personal liability of its directors to Salesforce and its stockholders for monetary damages for breach or alleged breach of their duty of care.
Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reasonState of Delaware allows for the fact that he is or was a director, officer, employee or agentindemnification of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of certain other entities against expenses (including attorneys’ fees), judgments, finesofficers, directors, employees and amounts paid in settlement actually and reasonably incurred by him in connection with such action if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; provided that with respect to proceedings by or in the rightagents of a corporation to procure a judgment in its favor, (a) a corporation may only indemnify such a person against expenses (including attorneys’ fees) actuallycorporation. The amended and reasonably incurred by him in connection with the defense or settlementrestated bylaws of such action and (b) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery, or such other court, shall deem proper. The Salesforce bylaws provide for indemnification of its directors, officers, employees and agents to the full extent permitted by Delaware law, including those circumstances in which indemnification would otherwise be discretionary under Delaware law.
Salesforce’s amended and restated bylaws also empower Salesforce to enter into indemnification agreements with its directors and officers and to purchase insurance on behalf of any person whom it is required or permitted to indemnify. Salesforce has entered into agreements with its directors and its executive officers that require Salesforce to indemnify such persons to the fullest extent permitted under Delaware law against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred (including expenses of a derivative action) in connection with any proceeding, whether actual or threatened, to which any such person may be made a party by reason of the fact that such person is or was a director or an executive officer of Salesforce or any of its affiliated enterprises. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. Salesforce intends to enter into indemnification agreements with any new directors and executive officers in the future.
Section 145 of the General Corporation Law of the State of Delaware provides for indemnification in terms sufficiently broad to indemnify such individuals, under certain circumstances, for liabilities (including reimbursement of expenses incurred) arising under the Securities Act of 1933 (which we refer to as the “Securities Act”).
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Item 21. Exhibits and Financial Statement Schedules.
Exhibit | Exhibit Description | Provided | Incorporated by Reference | |||||||||||||||||||
Form | SEC File No. | Exhibit | Filing Date | |||||||||||||||||||
2.1 | Agreement and Plan of Merger, dated as of June 9, 2019, by and among salesforce.com, inc., Sausalito Acquisition Corp. and Tableau Software, Inc. | 8-K | 001-32224 | 2.1 | 6/10/2019 | |||||||||||||||||
2.2 | Agreement and Plan of Merger, dated as of March 20, 2018, by and among salesforce.com, inc., Malbec Acquisition Corp. and MuleSoft, Inc. | 8-K | 001-32224 | 2.1 | 3/21/2018 | |||||||||||||||||
3.1 | Amended and Restated Certificate of Incorporation of salesforce.com, inc. | 8-K | 001-32224 | 3.1 | 6/7/2019 | |||||||||||||||||
3.2 | Amended and Restated Bylaws of salesforce.com, inc. | 8-K | 001-32224 | 3.2 | 6/7/2019 | |||||||||||||||||
4.1 | Specimen Common Stock Certificate | S-1/A | 333-111289 | 4.2 | 4/20/2004 | |||||||||||||||||
4.2 | Indenture, dated April 11, 2018, between salesforce.com, inc. and U.S. Bank National Association, as trustee | 8-K | 001-32224 | 4.1 | 4/11/2018 | |||||||||||||||||
4.3 | First Supplemental Indenture, dated April 11, 2018, between the Company and U.S. Bank National Association, as trustee | 8-K | 001-32224 | 4.2 | 4/11/2018 | |||||||||||||||||
4.4 | Form of 2023 Notes | 8-K | 001-32224 | 4.3 | 4/11/2018 | |||||||||||||||||
4.5 | Form of 2028 Notes | 8-K | 001-32224 | 4.4 | 4/11/2018 | |||||||||||||||||
5.1 | Opinion of Wachtell, Lipton, Rosen & Katz regarding legality of securities being registered | X | ||||||||||||||||||||
8.1 | Form of Opinion of Wachtell, Lipton, Rosen & Katz regarding certain U.S. income tax matters | X | ||||||||||||||||||||
10.1 | Form of Indemnification Agreement between salesforce.com, inc. and its officers and directors | S-1/A | 333-111289 | 10.1 | 4/20/2004 | |||||||||||||||||
10.2 | Amended and Restated 2013 Equity Incentive Plan | 8-K | 001-32224 | 10.1 | 6/7/2019 | |||||||||||||||||
10.3 | Amended and Restated 2004 Employee Stock Purchase Plan | 8-K | 001-32224 | 10.2 | 6/7/2017 | |||||||||||||||||
10.4 | MetaMind, Inc. 2014 Stock Incentive Plan | S-8 | 333-211510 | 4.1 | 5/20/2016 | |||||||||||||||||
10.5 | 2014 Inducement Equity Incentive Plan, as amended | S-8 | 333-232036 | 4.3 | 6/7/2019 | |||||||||||||||||
10.6 | Related forms of equity agreements under the Amended and Restated 2014 Inducement Equity Incentive Plan | 10-K | 001-32224 | 10.6 | 3/8/2019 |
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Exhibit | Exhibit Description | Provided | Incorporated by Reference | |||||||||||||||||||
Form | SEC File No. | Exhibit | Filing Date | |||||||||||||||||||
10.7 | Related forms of equity agreements under the Amended and Restated 2013 Equity Incentive Plan | 10-K | 001-32224 | 10.7 | 3/8/2019 | |||||||||||||||||
10.8 | Related forms of equity agreements under the Amended and Restated 2004 Employee Stock Purchase Plan | 10-K | 001-32224 | 10.8 | 3/8/2019 | |||||||||||||||||
10.9 | Kokua Bonus Plan, as amended and restated December 5, 2014, effective February 1, 2015 | 10-K | 001-32224 | 10.7 | 3/6/2015 | |||||||||||||||||
10.10 | Form of Offer Letter for Executive Officers and schedule of omitted details thereto | 10-K | 001-32224 | 10.11 | 3/9/2012 | |||||||||||||||||
10.11 | Employment Offer Letter, dated May 2, 2013 between salesforce.com, inc. and Keith Block | 8-K | 001-32224 | 10.1 | 6/11/2013 | |||||||||||||||||
10.12 | Employment Offer Letter, dated June 11, 2014, between salesforce.com, inc. and Mark Hawkins | 8-K | 001-32224 | 10.1 | 6/30/2014 | |||||||||||||||||
10.13 | Change of Control and Retention Agreement as entered into with Marc Benioff | 10-K | 001-32224 | 10.13 | 3/9/2009 | |||||||||||||||||
10.14 | Form of Change of Control and Retention Agreement as entered into with non-CEO Executive Officers | 10-K | 001-32224 | 10.14 | 3/9/2009 | |||||||||||||||||
10.15 | Form of Performance-Based Restricted Stock Unit Agreement for Executive Officers | 10-K | 001-32224 | 10.17 | 3/6/2017 | |||||||||||||||||
10.16 | Office Lease dated as of April 10, 2014 by and between salesforce.com, inc. and Transbay Tower LLC | 10-Q | 001-32224 | 10.2 | 5/30/2014 | |||||||||||||||||
10.17 | Purchase and Sale Agreement, dated November 10, 2014, between salesforce.com, inc. and 50 Fremont Tower, LLC | 10-Q | 001-32224 | 10.2 | 11/26/2014 | |||||||||||||||||
10.18 | Amended and Restated Credit Agreement, dated as of July 7, 2016, by and among salesforce.com, inc., the subsidiaries of the Company party thereto as guarantors, the lenders from time to time party thereto and Wells Fargo Bank, N.A., as Administrative Agent | 8-K | 001-32224 | 10.2 | 7/11/2016 | |||||||||||||||||
10.19 | Second Amended and Restated Credit Agreement, dated as of April 30, 2018, among the Company, the lenders and other parties party thereto, and Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender and an Issuing Lender | 8-K | 001-32224 | 10.1 | 4/30/2018 |
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Exhibit | Exhibit Description | Provided | Incorporated by Reference | |||||||||||||||||||
Form | SEC File No. | Exhibit | Filing Date | |||||||||||||||||||
10.20 | Amended and Restated Credit Agreement, dated as of April 30, 2018, among the Company, the lenders and other parties party thereto, and Bank of America, N.A., as Administrative Agent | 8-K | 001-32224 | 10.2 | 4/30/2018 | |||||||||||||||||
10.21 | Credit Agreement, dated as of April 30, 2018, among the Company, the lenders and other parties party thereto, and Bank of America, N.A., as Administrative Agent | 8-K | 001-32224 | 10.3 | 4/30/2018 | |||||||||||||||||
10.22 | Settlement Agreement between salesforce.com, inc. and BNP Paribas, dated June 12, 2018 | 8-K | 001-32224 | 10.1 | 6/15/2018 | |||||||||||||||||
10.23 | Settlement Agreement between salesforce.com, inc. and Bank of America, N.A., dated June 12, 2018 | 8-K | 001-32224 | 10.2 | 6/15/2018 | |||||||||||||||||
10.24 | Settlement Agreement between salesforce.com, inc. and Morgan Stanley & Co. International plc, dated June 12, 2018 | 8-K | 001-32224 | 10.3 | 6/15/2018 | |||||||||||||||||
10.25 | Letter Agreement, dated as of June 9, 2019, by and among salesforce.com, inc., Sausalito Acquisition Corp. and Christian Chabot, Christopher Stolte Patrick Hanrahan | 8-K | 001-32224 | 10.1 | 6/10/2019 | |||||||||||||||||
21.1 | List of Subsidiaries | 10-K | 001-32224 | 21.1 | 3/8/2019 | |||||||||||||||||
23.1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm | X | ||||||||||||||||||||
23.2 | Consent of PricewaterhouseCoopers LLP | X | ||||||||||||||||||||
23.3 | Consent of KPMG LLP | X | ||||||||||||||||||||
23.4 | Consent of Wachtell, Lipton, Rosen & Katz (included in the opinion filed as Exhibit 5.1 and incorporated herein by reference) | X | ||||||||||||||||||||
23.5 | Consent of Wachtell, Lipton, Rosen & Katz (included in the opinion filed as Exhibit 8.1 and incorporated herein by reference) | X | ||||||||||||||||||||
24.1 | Power of Attorney (incorporated by reference to the signature page hereto) | X | ||||||||||||||||||||
99.1 | Consent of Goldman Sachs & Co. LLC | X | ||||||||||||||||||||
99.2 | Form of Letter of Transmittal | X | ||||||||||||||||||||
99.3 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees | X |
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Exhibit |
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2.1 | Agreement and Plan of Merger, dated as of December 1, 2020, by and among salesforce.com, inc., Skyline Strategies I Inc., Skyline Strategies II LLC and Slack Technologies, Inc. (attached as Annex A to this proxy statement/prospectus which forms part of this registration statement). | |||||||||||||||||||||
Amended and Restated Certificate of Incorporation of salesforce.com, inc. (incorporated by reference herein to Exhibit 3.1 to Salesforce’s Current Report on Form 8-K filed with the SEC on June 7, 2019, File No. 001-32224). | ||||||||||||||||||||||
3.2 | Amended and Restated Bylaws of salesforce.com, inc. (incorporated by reference herein to Exhibit 3.2 to Salesforce’s Current Report on Form 8-K filed with the SEC on June 7, 2019, File No. 001-32224). | |||||||||||||||||||||
4.1 | Specimen Common Stock Certificate (incorporated by referenced herein to Exhibit 4.2 to Salesforce’s Registration Statement on Form S-1/A filed with the SEC on April 20, 2004). | |||||||||||||||||||||
4.2 | Indenture, dated April 11, 2018, between salesforce.com, inc. and U.S. Bank National Association, as trustee (incorporated by reference herein to Exhibit 4.1 to Salesforce’s Current Report on Form 8-K filed with the SEC on April 11, 2018). | |||||||||||||||||||||
4.3 | First Supplemental Indenture, dated April 11, 2018, between Salesforce and U.S. Bank National Association, as trustee (incorporated by reference herein to Exhibit 4.2 to Salesforce’s Current Report on Form 8-K filed with the SEC on April 11, 2018). | |||||||||||||||||||||
4.4 | Form of | |||||||||||||||||||||
4.5 | Form of 2028 Notes (incorporated by reference herein to Exhibit 4.4 to Salesforce’s Current Report on Form 8-K filed with the SEC on April 11, 2018). | |||||||||||||||||||||
8.1 | Opinion of Wachtell, Lipton, Rosen & Katz regarding certain U.S. federal income tax matters. | |||||||||||||||||||||
21.1 | Subsidiaries of Salesforce (incorporated herein by reference to Exhibit 21.1 to Salesforce’s Annual Report on Form 10-K filed on March 5, 2020, File No. 001-32224). | |||||||||||||||||||||
23.2 | Consent of KPMG LLP, Independent Registered Public Accounting Firm. | |||||||||||||||||||||
23.3 | Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 8.1). | |||||||||||||||||||||
23.4 | Consent of Latham & Watkins LLP (included in Exhibit 8.2). | |||||||||||||||||||||
23.5 | Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1). | |||||||||||||||||||||
24.1 | Powers of Attorney (included on signature pages to this Registration Statement). | |||||||||||||||||||||
99.1* | Form of Slack Technologies, Inc. Proxy Card. | |||||||||||||||||||||
99.2 | Consent of Qatalyst Partners LP. | |||||||||||||||||||||
99.3 | Consent of Goldman Sachs & Co. LLC. |
* | To be filed by amendment. |
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Item 22. Undertakings.Undertakings
(a) | The undersigned |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
to include any prospectus/offer to exchangeprospectus required by Section 10(a)(3) of the Securities Act of 1933 (the “Securities Act”);Act;
To
to reflect in the prospectus/offer to exchangeprospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus/offer to exchangeprospectus filed with the SEC pursuant to Rule 424(b) promulgated under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
To
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(b) | That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange of 1934 |
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(c) | (1) That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form. |
(2) That every prospectus (i) that is filed pursuant to paragraph (c)(1) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(d) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the |
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against such liabilities (other than the payment by the |
(e) | To respond to requests for information that |
(f) | To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
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Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on July 3, 2019.December 23, 2020.
SALESFORCE.COM, INC. | ||
By: | /s/ Mark J. Hawkins | |
Mark J. Hawkins | ||
President and Chief Financial Officer |
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KNOW ALL PERSONS BY THESE PRESENT, that each personPursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated below. Each of the directors and/or officers of the Registrant whose signature appears below hereby constitutes and appoints Marc Benioff, Keith Block, Mark J. Hawkins, Joe Allanson and Amy Weaver, and each of them severally as his or her trueattorney-in-fact to date and lawful attorney in fact and agent with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this registration statement on Form S-4 (including post-effective amendments), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission this Registration Statement on Form S-4, and to sign, date and file any and all amendments and post-effective amendments to this Registration Statement, in each case on his or her behalf, in any and all capacities stated below, as appropriate, in such forms as they or any one of them may approve, granting unto said attorney in fact, proxyattorneys-in-fact and agentagents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith,to the end that such Registration Statement or Registration Statements shall comply with the Securities Act of 1933, as amended, and the applicable Rules and Regulations adopted or issued pursuant thereto, as fully forand to all intents and purposes as he or she might or could do in person, hereby ratifying and confirminggenerally to do all that said attorneysuch things on their behalf in fact, proxytheir capacities as officers and agent, or his substitute, may lawfully do or causedirectors to be done by virtue hereof.
Pursuantenable the Registrant to comply with the requirementsprovisions of the Securities Act of 1933, as amended, this registration statement has been signed byand all requirements of the following persons in the capacities indicated below on July 3, 2019.Securities and Exchange Commission.
Signature | Title | Date | ||||
/s/ Marc Benioff
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| December 23, 2020 | ||||
Marc Benioff | (Principal Executive Officer) | |||||
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/s/ Mark J. Hawkins
| President and Chief Financial Officer | December 23, 2020 | ||||
Mark J. Hawkins | (Principal Financial Officer) | |||||
/s/ Joe Allanson
| Executive Vice President, | December 23, 2020 | ||||
Joe Allanson | Chief Accounting Officer and Corporate Controller | |||||
(Principal Accounting Officer) | ||||||
/s/ Craig Conway
| Director | December 23, 2020 | ||||
Craig Conway | ||||||
/s/ Parker Harris
| Director, Co-Founder and Chief Technology | December 23, 2020 | ||||
Parker Harris | ||||||
Officer | ||||||
/s/ Alan Hassenfeld
| Director | December 23, 2020 | ||||
Alan Hassenfeld | ||||||
/s/ Neelie Kroes
| Director | December 23, 2020 | ||||
Neelie Kroes | ||||||
/s/ Colin Powell
| Director | December 23, 2020 | ||||
Colin Powell | ||||||
/s/ Sanford R. Robertson | Director | December 23, 2020 | ||||
Sanford R. Robertson |
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Signature |
| Date | ||||
/s/ John V. Roos | Director | December 23, 2020 | ||||
John V. Roos |
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/s/ Robin L. Washington | Director | December 23, 2020 | ||||
Robin L. Washington |
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/s/ Maynard Webb
| Director | December 23, 2020 | ||||
Maynard Webb | ||||||
/s/ Susan Wojcicki
| Director | December 23, 2020 | ||||
Susan Wojcicki |
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