UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Rule 14a-101)
Filed by the Registrant x
Filed by a Party other than the Registrant o
Check the appropriate box:
x | Preliminary Proxy Statement |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
o | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material Pursuant to Rule 240.14a-12 |
Aptimus, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
o | No fee required. |
x | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
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o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
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4) | Date Filed: |
![](https://capedge.com/proxy/PRE 14A/0001145443-07-002881/aptimus-logo_2007.jpg)
Timothy C. Choate
Chairman of the Board of Directors of Aptimus, Inc.
![](https://capedge.com/proxy/PRE 14A/0001145443-07-002881/aptimus-logo_2007.jpg)
San Francisco, California 94105
(415) 896-2123
TO BE HELD ON •, 2007
Timothy C. Choate
Chairman of the Board of Directors of Aptimus, Inc.
QUESTIONS AND ANSWERS ABOUT THE MERGER | Q-1 | |||||
SUMMARY | 1 | |||||
The Companies | 1 | |||||
The Merger | 2 | |||||
Treatment of Aptimus Options, SARs, Restricted Shares and Warrants | 2 | |||||
Reasons for the Merger | 3 | |||||
Recommendation of our Board of Directors | 3 | |||||
The Special Meeting | 4 | |||||
Opinion of Aptimus’ Financial Advisor | 4 | |||||
Interests of our Directors and Officers in the Merger | 4 | |||||
Voting Agreements | 5 | |||||
Market Price and Dividend Data | 5 | |||||
Delisting and Deregistration of Aptimus’ Common Stock | 5 | |||||
The Merger Agreement | 5 | |||||
Material United States Federal Income Tax Consequences | 9 | |||||
Dissenters’ Rights | 9 | |||||
Paying agent | 10 | |||||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | 11 | |||||
THE SPECIAL MEETING | 12 | |||||
Date, Time and Place | 12 | |||||
Purpose of Special Meeting | 12 | |||||
Recommendation of our Board of Directors | 12 | |||||
Record Date; Stock Entitled to Vote | 12 | |||||
Quorum | 13 | |||||
Votes Required | 13 | |||||
Voting by Aptimus’ Directors and Officers | 13 | |||||
Voting of Proxies | 13 | |||||
Revocability of Proxies | 14 | |||||
Solicitation of Proxies | 14 | |||||
Dissenters’ Rights | 14 | |||||
Assistance | 15 | |||||
THE MERGER | 15 | |||||
Background to the Merger | 16 | |||||
Recommendation of our Board of Directors | 22 | |||||
Opinion of JMP Securities, LLC | 25 | |||||
Voting Agreements | 31 | |||||
Amendment of Rights Agreement | 32 | |||||
Interests of our Directors and Officers in the Merger | 32 | |||||
Market Price and Dividend Data | 38 | |||||
Regulatory Matters | 38 | |||||
Dissenters’ Rights | 38 | |||||
Accounting Treatment | 42 | |||||
Material United States Federal Income Tax Consequences | 42 | |||||
Delisting and Deregistration of Aptimus’ Common Stock | 43 | |||||
THE MERGER AGREEMENT | 44 | |||||
The Merger | 44 | |||||
Merger Consideration | 44 | |||||
Procedures for Payment of Merger Consideration | 44 | |||||
Transfers of Ownership and Lost Stock Certificates | 45 |
Unclaimed Amounts | 45 | |||||
Representations and Warranties | 46 | |||||
Interim Operations of Aptimus | 49 | |||||
Employee Benefit Matters | 50 | |||||
Shareholder Meeting | 51 | |||||
Exclusivity Covenant | 51 | |||||
Timing of Closing | 53 | |||||
Conditions to the Completion of the Merger | 53 | |||||
Termination of the Merger Agreement | 55 | |||||
Termination Fee | 56 | |||||
Other Expenses | 56 | |||||
Other Payments | 57 | |||||
Indemnification and Insurance | 57 | |||||
Additional Covenants | 57 | |||||
Amendment and Waiver | 58 | |||||
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 59 | |||||
SHAREHOLDER PROPOSALS | 61 | |||||
OTHER MATTERS | 61 | |||||
WHERE YOU CAN FIND MORE INFORMATION | 61 | |||||
MISCELLANEOUS | 61 |
ANNEX A | AGREEMENT AND PLAN OF MERGER |
ANNEX B | OPINION OF JMP SECURITIES LLC |
ANNEX C | CHAPTER 23B.13 OF THE WASHINGTON BUSINESS CORPORATION ACT — DISSENTERS’ RIGHTS |
Q: | When and where is the special meeting of our shareholders? |
A: | The special meeting of Aptimus’ shareholders will take place on •, •, 2007, at • local time, at our corporate headquarters, located at 199 Fremont Street, Suite 1800, San Francisco, California 94105. |
Q: | What matters will be voted on at the special meeting? |
A: | We have entered into an Agreement and Plan of Merger with Apollo Group, Inc., an Arizona corporation, and its wholly owned subsidiary, Asteroid Acquisition Corporation, a Washington corporation. Under the terms of the merger agreement, Asteroid Acquisition Corporation, or Merger Sub, will merge with and into Aptimus, and Aptimus will thereby become a wholly owned subsidiary of Apollo. |
In order to complete the merger, our shareholders holding at least a majority of our outstanding common stock at the close of business on the record date must vote to approve the merger agreement. A special meeting of our shareholders will be held on •, 2007 to obtain this vote of our shareholders. At that meeting, you will be asked to consider and vote on the approval of the merger agreement. In addition, you may be asked to consider and vote on a proposal by our board of directors to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement. This proxy statement contains important information about the merger and the special meeting, and you should read it carefully in its entirety. |
Your vote is very important, regardless of the number of shares you hold. We encourage you to vote as soon as possible. The enclosed voting materials allow you to vote your shares without physically attending the special meeting of Aptimus shareholders. For more specific information on how to vote, please see the questions and answers below and the section entitled “The Special Meeting” beginning on page 12 of this proxy statement. |
Q: | As an Aptimus shareholder, what will I receive upon completion of the merger? |
A: | If the merger is completed, you will receive $6.25 in cash, without interest, for each share of our common stock that you own immediately prior to the effective time of the merger unless you properly exercise your dissenters’ rights under Washington law. |
Q: | What do I need to do now? |
A: | After you carefully read this proxy statement in its entirety, including its annexes, consider how the merger affects you and then vote or provide voting instructions as described in this proxy statement. |
Q: | Who can vote and attend the special meeting? |
A: | All shareholders of record as of the close of business on •, 2007, the record date set for the special meeting, are entitled to receive notice of and to attend and vote at the special meeting, or any postponement or adjournment thereof. If you want to attend the special meeting and your shares are held in an account at a brokerage firm, bank or other nominee, you must bring to the special meeting a proxy from the record holder (your broker, bank or nominee) of the shares authorizing you to vote at the special meeting. |
Q: | What constitutes a quorum at the special meeting? |
A: | In order to constitute a quorum and to transact business at the special meeting, a majority of the votes entitled to be cast by shareholders of record of shares of Aptimus common stock as of the close of business on the record date, must be represented in person or by proxy at the special meeting. Once a share is represented |
for any purpose at the special meeting (including shares of our common stock for which proxies have been received but for which shareholders have abstained) other than solely to object to holding the meeting or transacting business at the special meeting, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment of the meeting (unless a new record date is or must be set for the adjourned meeting) notwithstanding the withdrawal of enough shareholders to leave less than a quorum. |
Q: | What vote of our shareholders is required to approve the merger agreement? |
A: | The affirmative vote of the holders of a majority of the outstanding shares of our common stock as of the close of business on the record date is required to approve the merger agreement. Because the vote is based on the number of shares outstanding rather than the number of votes cast, failure to vote your shares and abstentions will have the same effect as voting against the approval of the merger agreement. In connection with the merger agreement, all of our current directors and executive officers, in their capacities as our shareholders, entered into voting agreements with Apollo pursuant to which each of those persons agreed, among other things, to vote the shares of our common stock over which they exercise voting control in favor of approval of the merger agreement. These shareholders exercised voting control over an aggregate of • shares of our common stock as of •, 2007, the record date for the special meeting, which constituted approximately •% of the shares of our common stock outstanding on that date. See the section entitled “The Merger — Voting Agreements” beginning on page 31. |
Q: | What vote of our shareholders is required to approve any proposal by our board of directors to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement? |
A: | If a quorum exists, in order for shareholders to approve a proposal to adjourn the special meeting, the votes cast in favor of the proposal by the shares entitled to vote must exceed the votes cast against the proposal by the shares entitled to vote. If a quorum does not exist, approval of adjournment of the special meeting would require a majority of the votes of the shareholders present, in person or by proxy, and entitled to vote on the matter. Failure to vote your shares will not affect the outcome of any proposal to adjourn the special meeting, but will reduce the number of votes required to approve such a proposal. If a quorum exists, abstentions will not affect the outcome of a proposal to adjourn the special meeting, but will reduce the number of votes required to approve that proposal. If a quorum does not exist, abstentions will have the same effect as voting against a proposal to adjourn the special meeting. |
Q: | How many votes do Aptimus shareholders have? |
A: | Each holder of record of Aptimus common stock as of the close of business on •, 2007 will be entitled to one vote for each share of common stock held on that date. |
Q: | How does Aptimus’ board of directors recommend I vote? |
A: | At a meeting held on August 7, 2007, Aptimus’ board of directors unanimously determined that the merger consideration and terms of the merger are adequate and otherwise advisable and fair to, and in the best interests of, Aptimus and its shareholders and unanimously approved the merger and the merger agreement in all respects.Accordingly, the board of directors of Aptimus unanimously recommends that you vote “FOR” the approval of the merger agreement. The board of directors of Aptimus also recommends that Aptimus shareholders vote “FOR” any proposal by Aptimus’ board of directors to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement. |
Q: | May I vote in person? |
A: | Yes. If your shares are registered in your name and not held in “street name” through a broker, bank or nominee, you may attend the special meeting of our shareholders and vote your shares in person, rather than signing and returning your proxy card. If your shares are held in “street name” through a broker, bank or nominee, you must request a legal proxy from the broker, bank or nominee that holds your shares and present that proxy and proof of identification at the special meeting to vote your shares. |
Q: | May I vote via the Internet or telephone? |
A: | If your shares are registered in your name and not held in “street name” through a broker, bank or nominee, you may only vote by returning a signed proxy card or voting in person at the meeting. If your shares are |
held in “street name” through a broker, bank or nominee, you may vote by completing and returning the voting form provided by your broker, bank or nominee or via the Internet or by telephone through your broker, bank or nominee, if such a service is provided. To vote via the Internet or telephone, you should follow the instructions on the voting form provided by your broker, bank or nominee. Votes submitted electronically via the Internet or by telephone must be received by 11:59 p.m. EST on •, 2007. |
Q: | May I change my vote after I have mailed my signed proxy card? |
A: | Yes. You may change your vote at any time before your proxy card is voted at the special meeting. You can do this in one of three ways. First, you can send a written, later-dated notice to the secretary of Aptimus stating that you would like to revoke your proxy. Second, you can complete and submit a new proxy card bearing a later date. Third, you can attend the special meeting and vote in person. Your attendance alone will not revoke your proxy; you must vote at the special meeting in order to revoke your earlier proxy. If you have instructed a broker, bank or nominee to vote your shares, you must follow directions received from your broker, bank or nominee to change those instructions. |
Q: | If my broker, bank or nominee holds my shares in “street name,” will they vote my shares for me? |
A: | Your broker, bank or nominee will not be able to vote your shares without instructions from you. You should instruct your broker, bank or nominee to vote your shares following the procedure provided by your broker, bank or nominee. Without instructions, your shares will not be voted, which will have the effect of a vote against the proposal to approve the merger agreement and which will not affect the outcome of any proposal to adjourn the special meeting, but will reduce the number of votes required to approve such a proposal. |
Q: | What happens if I do not vote, whether by attending the special meeting in person, returning a proxy card or through Internet or telephone voting procedures? |
A: | The failure to vote will have the same effect as voting against the proposal to approve the merger agreement. The failure to vote will not affect the outcome of any proposal by our board of directors to adjourn the special meeting, but will reduce the number of votes required to approve such a proposal. |
Q: | Is the merger expected to be taxable to me for United States federal income tax purposes? |
A: | Generally, yes. The receipt of $6.25 in cash, without interest, for each share of our common stock pursuant to the merger will be a taxable transaction for United States federal income tax purposes. For United States federal income tax purposes, generally you will recognize gain or loss as a result of the merger measured by the difference, if any, between $6.25 per share and your adjusted tax basis in that share. |
You should read the section entitled “The Merger — Material United States Federal Income Tax Consequences” beginning on page 42 for a more complete discussion of the United States federal income tax consequences of the merger. Tax matters can be complicated, and the tax consequences of the merger to you will depend on your particular tax situation.You should consult your own tax advisor as to the tax consequences of the merger to you. |
Q: | Should I send in my Aptimus stock certificates now? |
A: | No. Promptly after the merger is completed, each holder of record immediately prior to the effective time of the merger will be sent a letter of transmittal, together with written instructions for exchanging share certificates for the cash merger consideration. These instructions will tell you how and where to send in your certificates for your cash consideration. You will receive your cash payment after the paying agent receives your stock certificates and any other documents requested in the instructions. |
Q: | What happens if I sell my shares before the special meeting? |
A: | The record date of the special meeting is earlier than the special meeting and the date that the merger is expected to be completed. If you transfer your shares of Aptimus common stock after the record date but before the special meeting, you will retain your right to vote at the special meeting, but will have transferred the right to receive $6.25 per share in cash, without interest, to be received by our shareholders in the merger. In order to receive the $6.25 per share in cash, without interest, you must hold your shares through completion of the merger. |
Q: | When do you expect the merger to be completed? |
A: | We are working toward completing the merger promptly. In addition to obtaining shareholder approval, we must satisfy all other closing conditions contained in the merger agreement. |
Q: | Am I entitled to dissenters’ rights? |
A: | Yes. Under the Business Corporation Act of the State of Washington, you may dissent from the merger and obtain payment of the “fair value” (as defined in the Business Corporation Act) of your shares of Aptimus common stock instead of receiving $6.25 per share, without interest, pursuant to the terms of the merger agreement. To do this, you must strictly follow the procedures prescribed by the Business Corporation Act, which are summarized in the section entitled “The Merger — Dissenters’ Rights” beginning on page 38. The “fair value” (as defined in the Business Corporation Act) of your shares may be more or less than the merger consideration. |
Q: | Do any of Aptimus’ directors or executive officers have interests in the merger that may differ from their interests as Aptimus shareholders or those of other Aptimus shareholders generally? |
A: | Yes. Apollo has entered into employment agreements and employment offer letters with some of Aptimus’ executive officers, effective upon completion of the merger, which provide that the executives will be employed by Apollo following closing. The employment agreements and employment offer letters generally provide for a base salary, performance bonus, integration bonus, retention bonus, closing bonus, Apollo option grants and other specified payments and benefits. Apollo has also entered into a consulting agreement and non-competition agreement with Aptimus’ chairman which become effective upon completion of the merger. Certain executive officers of Aptimus who will not become long term employees of Apollo following completion of the merger are entitled to specified payments and benefits under existing change in control agreements with Aptimus. Aptimus’ outside directors are entitled to cash payments upon the completion of the merger. In considering the recommendation of our board of directors, you should be aware of such interests of our directors and executive officers. See “The Merger — Interests of Our Directors and Officers in the Merger” beginning on page 32 for a description of these agreements and arrangements as well as a description of other rights of our directors and executive officers that come into effect in connection with the merger. |
Q: | How will the merger affect my Aptimus options, stock appreciation rights, restricted shares and warrants? |
A: | Apollo will assume all Aptimus options outstanding immediately prior to the effective time of the merger, and the assumed options will be converted into options to purchase shares of Apollo Class A common stock. Generally, each option will continue to be subject to the terms and conditions, including the vesting schedule, set forth in the Aptimus stock plan under which the option was granted and the individual stock option agreement governing that option. The number of shares of Apollo Class A common stock subject to Aptimus options will be determined by multiplying the number of shares that were subject to the Aptimus option immediately prior to the merger by an exchange ratio and then rounding the result down to the nearest whole share. The exchange ratio used for this purpose will be calculated by dividing $6.25 by the average of the closing sales prices of Apollo Class A common stock as quoted on the NASDAQ Global Select Market for the five consecutive trading days ending with the trading day that is one trading day prior to the completion of the merger. The per share exercise price for each share issuable upon exercise of the Aptimus options will be adjusted to a price determined by dividing the per share exercise price applicable to the Aptimus option immediately prior to the merger by the same exchange ratio and rounding up to the nearest whole cent. In addition, at the option of a holder of a vested Aptimus option delivered to Aptimus and Apollo not less than ten business days prior to completion of the merger, such vested Aptimus option will not be assumed by Apollo and will instead be net exercised. The holder of such vested Aptimus option will then be entitled to receive in the merger in exchange for such vested option, an amount of cash, without interest, equal to the number of shares of Aptimus common stock subject to such vested option multiplied by the difference between $6.25 and the exercise price per share under such vested option, subject to withholding of any required taxes. |
Apollo will also assume all Aptimus stock appreciation rights (SARs) outstanding immediately prior to the effective time of the merger, and the assumed SARs will be converted into SARs covering shares of Apollo Class A common stock. Generally, each SAR will continue to be subject to the terms and conditions, including the vesting schedule, set forth in the Aptimus stock plan under which the SAR was granted and the individual stock |
appreciation right agreement governing that SAR. The number of shares of Apollo Class A common stock subject to Aptimus SARs will be determined by multiplying the number of shares that were subject to the Aptimus SAR immediately prior to the merger by the exchange ratio described above and then rounding the result down to the nearest whole share. The per share exercise price for each Apollo share subject to the Aptimus SARs will be adjusted to a price determined by dividing the per share exercise price applicable to the Aptimus SAR immediately prior to the merger by the same exchange ratio and rounding up to the nearest whole cent. |
Any restricted shares of Aptimus common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive $6.25 cash per share, without interest, subject to the vesting schedule applicable to such restricted shares and withholding of any required taxes. In general, holders of restricted shares will receive this cash consideration with respect to unvested shares in accordance with the applicable vesting schedule, provided that the holders of the restricted shares remain employed by Apollo or its affiliates on the applicable vesting dates and satisfy any other applicable vesting requirements. Until vested, such cash consideration will be held by Apollo. |
Any warrants to purchase Aptimus common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive an amount of cash, without interest, equal to the number of shares of Aptimus common stock subject to such warrant multiplied by the difference between $6.25 and the exercise price per share under such warrant, subject to withholding of any required taxes. The right of the holder of any such warrant to receive this cash payment will remain subject to the same terms and conditions set forth in such warrant. |
Some holders of Aptimus options and SARs will be entitled to full or partial acceleration of vesting in connection with the merger. For more information as it relates to some of Aptimus’ directors and executive officers, see “The Merger — Interests of Our Directors and Officers in the Merger” beginning on page 32. |
Q: | Who is paying for this proxy solicitation? |
A: | Aptimus is conducting this proxy solicitation with the assistance of a proxy solicitor and will bear the cost of soliciting proxies, including the preparation, assembly, printing and mailing of this proxy statement, the proxy card and any additional information furnished to shareholders. Aptimus estimates that its proxy solicitor fees will be approximately $15,000. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their costs of forwarding proxy and solicitation materials to beneficial owners. If you choose to access the proxy materials and/or submit your proxy over the Internet, you are responsible for any related Internet access charges you may incur. If you choose to submit your proxy by telephone, you are responsible for any related telephone charges you may incur. |
Q: | Who can help answer my questions? |
A: | If you would like additional copies, without charge, of this proxy statement or if you have questions about the merger, including the procedures for voting your shares, you should contact: |
Aptimus, Inc. 199 Fremont Street, Suite 1800 San Francisco, California 94105 Attention: David Davis, general counsel and secretary Telephone: (415) 896-2123 E-mail: DaveD@aptimus.com |
or our proxy solicitor, |
Mellon Investor Services LLC Proxy Solicitation and Corporation Actions 480 Washington Blvd. 27th Floor Jersey City, NJ 07310 Call toll-free: (800) 550-8475 |
199 Fremont Street, Suite 1800
San Francisco, California 94105
Telephone: (415) 896-2123
4615 East Elwood Street
Phoenix, Arizona 85040
Telephone: (480) 966-5394
4615 East Elwood Street
Phoenix, Arizona 85040
Telephone: (480) 966-5394
shares will receive this cash consideration with respect to unvested shares in accordance with the applicable vesting schedule, provided that the holders of the restricted shares remain employed by Apollo or its affiliates on the applicable vesting dates and satisfy any other applicable vesting requirements. Until vested, such cash consideration will be held by Apollo.
• | historical information regarding our business, financial performance and results of operations, market prices, volatility and trading activity with respect to our common stock, market prices with respect to other industry participants and general market indices, and the trend towards consolidation in the online advertising industry; |
• | current information regarding our business, prospects, financial condition, operations, technology, products, services, management, competitive position and strategic business goals and objectives, general economic, industry and financial market conditions, and opportunities and competitive factors within our industry; |
• | the possible alternatives to the merger, including the possibility of continuing to operate as an independent company and the desirability and perceived risks of that alternative, the range of potential benefits to our shareholders of these alternatives and the timing and likelihood of actually realizing such benefits from these alternatives; |
• | the risks associated with remaining an independent company, including our decreasing cash reserves, our limited size and scale, increasing competition (especially from competitors with greater name recognition and financial and other resources), and potential difficulties with growing our business organically or through acquisitions or strategic alliances; |
• | the potential for other third parties to enter into strategic relationships with or to seek to acquire us, including a review of management’s dealings with other possible buyers in the past and assessment of the likelihood that a third party would offer a higher price than the price offered by Apollo; |
• | the likelihood that the merger will be completed, including the likelihood that the shareholder approval needed to complete the merger will be obtained; and |
• | the consideration to be received by our shareholders in the merger, including the form of such consideration. |
• | determined that the merger consideration and terms of the merger are adequate and otherwise advisable and fair to, and in the best interests of, Aptimus and its shareholders; |
• | approved the merger and the merger agreement in all respects; and |
• | recommends that our shareholders vote “FOR” the proposal to approve the merger agreement. |
that are different from, or in addition to, their interests as shareholders of Aptimus or the interests of our other shareholders generally, including, among others:
• | some of our executive officers have entered into employment agreements or employment offer letters with Apollo which generally provide for a base salary, performance bonus, integration bonus, retention bonus, closing bonus, Apollo option grants and other specified payments and benefits; |
• | our chairman has entered into a consulting agreement and non-competition agreement with Apollo; |
• | some of our executive officers who will not become long term employees of Apollo following completion of the merger will receive specified payments and benefits (including severance payments and accelerated vesting of equity awards) under their existing change in control agreements with us; |
• | our outside directors are entitled to cash payments upon the completion of the merger; and |
• | indemnification arrangements for our current and former directors and executive officers will be continued if the merger is completed. |
• | initiate, solicit, seek or knowingly encourage, directly or indirectly, any inquiries relating to or the making or implementation of any third party proposal (as described in the section entitled “The Merger Agreement — Exclusivity Covenant”); |
• | engage in any negotiations concerning, or provide any non-public information or data to, or have any substantive discussions with, any person relating to a third party proposal; |
• | otherwise cooperate in or knowingly facilitate any effort or attempt to make or implement a third party proposal; |
• | enter into a contract with any person relating to a third party proposal; or |
• | release any third party from, or waive any provision of, any confidentiality or standstill agreement that would otherwise restrict or limit a third party proposal to which it is a party. |
• | the approval of the merger agreement by our shareholders has been obtained; |
• | all authorizations and orders of, declarations and filings with, and notices to any governmental entity required to permit the consummation of the merger have been obtained or made and are in full force and effect; and |
• | no temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Merger is in effect and no law has been enacted or is deemed applicable to the merger which makes the consummation of the merger illegal. |
• | our representations and warranties relating to our capital structure, our power and authority to enter into the merger agreement, our due execution and delivery of the merger agreement, the enforceability of the merger agreement against us, and the approval of the merger agreement by our board of directors are true and correct in all material respects on and as of both August 7, 2007 and the closing date of the merger as though they were made on and as of the closing date (except for representations and warranties which address matters only as to a specified date, which representations and warranties are true and correct in all material respects with respect to such specified date); |
• | our other representations and warranties in the merger agreement are true and correct in all respects on and as of both August 7, 2007 and the closing date of the merger as though such representations and warranties were made on and as of the closing date (except for representations and warranties which address matters only as to a specified date, which representations and warranties are true and correct with respect to such specified date); provided, that in determining whether this condition is satisfied: |
o | the phrase “in all material respects” and any “material adverse effect” qualifications contained in such representations and warranties will be disregarded; and |
o | any inaccuracies in such representations and warranties will be disregarded unless all such inaccuracies, considered collectively, have had, and continue to have, a material adverse effect on us (as described in the section entitled “The Merger Agreement — Representations and Warranties — Material Adverse Effect”); |
• | we have performed in all material respects all obligations required to be performed by us under the merger agreement at or prior to the closing date of the merger; |
• | there is no litigation pending by any governmental entity seeking to prevent consummation of the merger; |
• | the employment agreements between Apollo and each of Robert Wrubel and Lance Nelson remain in full force and effect (other than as a result of his death or incapacity); |
• | there is no outstanding order obtained with the consent of Apollo or Merger Sub to the effect that the non-competition agreement or consulting agreement between Apollo and Timothy Choate is unenforceable in any respect; |
• | we have delivered to Apollo a duly executed and certified certificate stating that we are not a United States Real Property Holding Corporation; and |
• | we have taken all actions necessary to cause the rights under our “poison pill” rights agreement to expire immediately prior to the effective time of the merger and render such rights inapplicable to Apollo, Merger Sub, the merger agreement and the voting agreements. |
• | Apollo’s and Merger Sub’s representations and warranties relating to their power and authority to enter into the merger agreement, their due authorization, execution and delivery of the merger agreement, and the enforceability of the merger agreement against them are true and correct in all material respects on and as of both August 7, 2007 and the closing date of the merger as though they were made on and as of the closing date; |
• | Apollo’s and Merger Sub’s other representations and warranties in the merger agreement are true and correct in all respects on and as of both August 7, 2007 and the closing date of the merger as though such representations and warranties were made on and as of the closing date (except for representations and warranties which address matters only as to a specified date, which representations and warranties are true and correct with respect to such specified date); provided, that in determining whether this condition is satisfied: |
o | the phrase “in all material respects” and any “material adverse effect” qualifications contained in such representations and warranties will be disregarded; and |
o | any inaccuracies in such representations and warranties will be disregarded unless all such inaccuracies, considered collectively, have had, and continue to have, a material adverse effect on Apollo and Merger Sub or the ability of either of them to consummate the merger or perform their respective obligations under the merger agreement; and |
• | Apollo and Merger Sub have performed in all material respects all obligations required to be performed by them under the merger agreement at or prior to the closing date of the merger. |
• | the merger has not been completed by December 28, 2007, which date will be extended to February 28, 2008 if on December 28, 2007 all of the closing conditions have been satisfied or waived in writing (other than conditions that by their nature are only to be satisfied as of the closing of the merger and other than the condition relating to governmental approvals); provided, that this right to terminate the merger agreement will not be available to a party whose breach of a covenant was the proximate cause of the failure of the merger to be completed by such date; |
• | a governmental entity of competent jurisdiction has issued an order or taken any other action having the effect of permanently restraining, enjoining or otherwise prohibiting the merger, which order or other action is final and non-appealable; or |
• | the approval of the merger agreement by our shareholders has not been obtained at our special meeting or at any adjournment or postponement thereof, if necessary; provided, that this right to terminate the merger agreement will not be available to us where the failure to obtain such shareholder approval is caused by any action or failure to act on our part that constitutes a willful breach of the merger agreement. |
• | following a breach of any representation, warranty, covenant or agreement by us or if any representation or warranty of ours has become untrue, such that the corresponding closing conditions relating to the accuracy of representations and warranties and compliance with covenants would not be satisfied, and such breach or inaccuracy is incapable of being cured or is not cured in all material respects within 15 business days after we receive written notice from Apollo; or |
• | upon any of the following: |
o | our board of directors fails to call the special meeting as required by the merger agreement; |
o | we fail to include in this proxy statement the recommendation of our board of directors that our shareholders approve the merger agreement; |
o | our board of directors effects a change of recommendation (as described in the section entitled “The Merger Agreement — Exclusivity Covenant — Change in Recommendation”); |
o | we recommend to our shareholders or approve or endorse a third party proposal (as described in the section entitled “The Merger Agreement — Exclusivity Covenant”) or in violation of our exclusivity covenant enter into any letter of intent, memorandum of understanding or similar document or any contract (other than a nondisclosure agreement) constituting, accepting or directly related to any third party proposal; |
o | following the receipt of a third party proposal, our board of directors fails to reaffirm its recommendation to our shareholders in favor of approval of the Apollo merger agreement within 10 business days after Apollo so requests in writing; |
o | we willfully breach our obligations under our exclusivity covenant and Apollo is materially prejudiced thereby; or |
o | a tender offer or exchange offer relating to our outstanding shares is commenced and our board of directors fails to recommend against acceptance of such tender offer or exchange offer by our shareholders within 10 business days, including by taking no position with respect to the acceptance of such tender offer or exchange offer (other than a “stop, look and listen” letter or similar communication of the type contemplated by Rule 14d-9(f) under the Securities Exchange Act of 1934, as amended). |
• | following a breach of any representation, warranty, covenant or agreement by Apollo or Merger Sub or if any representation or warranty of Apollo or Merger Sub has become untrue, such that the corresponding closing conditions relating to the accuracy of representations and warranties and compliance with covenants would not be satisfied, and such breach or inaccuracy is incapable of being cured or is not cured in all material respects within 15 business days after Apollo or Merger Sub receives written notice from us; or |
• | if, prior to obtaining shareholder approval of the merger agreement and concurrently with or following a change of recommendation made in compliance with the merger agreement, our board of directors by majority vote authorizes us to accept (or to enter into a written agreement for a transaction constituting) a superior proposal (as described in the section entitled “The Merger Agreement — Exclusivity Covenant — Superior Proposals”); provided, that we pay Apollo a termination fee (as described in the section entitled “The Merger Agreement — Termination Fee”). |
• | the merger agreement is terminated by us to accept (or to enter into a written agreement for a transaction constituting) a superior proposal following a change of recommendation made in compliance with the merger agreement, in which case the termination fee would be payable prior to or concurrently with such termination; |
• | the merger agreement is terminated by Apollo based upon any of the circumstances described in the seven open bullet points under Apollo’s right to terminate in “ — Termination of the Merger Agreement” above, in which case the termination fee would be payable on the second business day following such termination; or |
• | the merger agreement is terminated by either us or Apollo following the failure to complete the merger by December 28, 2007 (or February 28, 2008 if applicable) or the failure to obtain approval of the merger agreement by our shareholders and the following conditions are also met: |
o | following August 7, 2007 but prior to any such termination, any person has made to us or our shareholders, or publicly announced, a proposal or offer for any acquisition transaction (as described in the section entitled “The Merger Agreement — Termination Fee”) that is not subsequently withdrawn; and |
o | within 12 months following such termination, any acquisition transaction with respect us is consummated or we enter into a contract providing for any acquisition transaction; |
• | you must deliver to Aptimus, before the vote is taken at the special meeting regarding the merger agreement, written notice of your intent to demand payment for your shares of Aptimus common stock if the merger is effected, which notice must be separate from your proxy; |
• | you must not vote your shares in favor the proposal to approve the merger agreement; and |
• | you must follow the statutory procedures for perfecting dissenters’ rights under chapter 23B.13 of the Washington Business Corporation Act. |
• | any state of facts, development, event, circumstance, condition, occurrence or effect that could give rise to the ability on the part of Apollo to terminate the merger agreement; |
• | our ability to obtain the shareholder approval required for the merger; |
• | the timing of the closing of the merger and receipt by our shareholders of the merger consideration; |
• | whether or not the conditions to the completion of the merger are satisfied and the possibility that the merger will not be completed for any other reason; |
• | risks that the proposed merger disrupts current plans and operations, and the potential difficulties in employee retention as a result of the announcement or pendency of the merger; |
• | the effect of the announcement or pendency of the merger on our relationships with customers, suppliers and other business partners, our operating results and our business generally, including any deterioration of our relationships with America Online and other strategic partners; |
• | the ability to realize the benefits of the merger; |
• | the amount of the costs, fees and expenses and charges related to the merger, including the possibility that the merger agreement may be terminated under circumstances that require us to pay Apollo a termination fee of up to $1,800,000; |
• | changes in the demand for our products; |
• | changes in economic conditions generally or online advertising spending in particular; |
• | market conditions and specific financial market conditions affecting our common stock; |
• | changes in the competitive dynamics of our markets, including strategic alliances and consolidation among our competitors or strategic partners; and |
• | other risks related to our business that are described in our public filings (see the section entitled “Where You Can Find More Information” beginning on page 61). |
• | the approval of the Agreement and Plan of Merger, dated August 7, 2007, among Aptimus, Apollo and Merger Sub (see the sections entitled “The Merger” beginning on page 15 and “The Merger Agreement” beginning on page 44); and |
• | any proposal by our board of directors to adjourn the special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approval of the merger agreement. |
• | filing with the secretary of Aptimus a duly executed revocation of proxy; |
• | submitting a duly completed and executed proxy to the secretary of Aptimus bearing a later date; or |
• | appearing at the special meeting and voting in person; attendance at the special meeting will not in and of itself constitute revocation of a proxy — you must vote your shares at the meeting in order to revoke your earlier proxy. |
Aptimus, Inc. 199 Fremont Street, Suite 1800 San Francisco, California 94105 Attention: David Davis, general counsel and secretary Telephone: (415) 896-2123 E-mail: DaveD@aptimus.com |
Mellon Investor Services LLC Proxy Solicitation and Corporation Actions 480 Washington Blvd. 27th Floor Jersey City, NJ 07310 Call toll-free: (800) 550-8475 |
Apollo Class A common stock with the exercise price and number of shares underlying the SAR adjusted to reflect the merger. The exercise price and the number of shares of Apollo Class A common stock subject to Aptimus SARs after the merger will be determined pursuant to the merger agreement, which provides that the number of shares of Apollo Class A common stock subject to Aptimus SARs will be determined by multiplying the number of shares that were subject to the Aptimus SAR immediately prior to the merger by the exchange ratio described above and then rounding the result down to the nearest whole share. The per share exercise price for each Apollo share subject to the Aptimus SARs will be adjusted to a price determined by dividing the per share exercise price applicable to the Aptimus SAR immediately prior to the merger by the same exchange ratio and rounding up to the nearest whole cent.
agreed that Eric Helgeland would act as the lead representative of the board in evaluating and negotiating these strategic transaction alternatives for Aptimus.
a new written proposal and was proposing delaying further activity and Company B’s written proposal was limited to an investment in Aptimus. Following discussion, the board agreed that Mr. Wrubel and Mr. Helgeland, with the assistance of JMP Securities, in its role as financial advisor, should on behalf of Aptimus proceed to negotiate and enter into a letter of intent and exclusivity agreement with Apollo.
with a focus on exploring Apollo’s willingness to increase the transaction valuation. On this date, Mr. Wrubel spoke with Mr. Capelli regarding open issues.
board then, among other things, unanimously approved the merger and merger agreement and related agreements and transactions and unanimously resolved to recommend that Aptimus shareholders approve the merger agreement.
• | historical information regarding our business, financial performance and results of operations, market prices, volatility and trading activity with respect to our common stock, market prices with respect to other industry participants and general market indices, and the trend towards consolidation in the online advertising industry; |
• | current information regarding our business, prospects, financial condition, operations, technology, products, services, management, competitive position and strategic business goals and objectives, general economic, industry and financial market conditions, and opportunities and competitive factors within our industry; |
• | historical information regarding Apollo’s business and financial performance and market prices of Apollo’s Class A common stock and current information regarding Apollo’s business, prospects, financial condition, operations, technology, products, services, management and competitive position; |
• | the potential for other third parties to enter into strategic relationships with or to seek to acquire us, including a review of management’s dealings with other possible buyers or investors in the past (including the parties referred to in the section entitled “Background to the Merger” above as Company A, Company B, Company C and Company D) and assessment of the likelihood that a third party would offer a higher price than the price offered by Apollo; |
• | the market check conducted by us with the assistance of JMP Securities in its role as our financial advisor, and the results of those efforts, including the facts that there were no outstanding offers to acquire us other than the offer from Apollo and that the only other written or formal indication of interest to acquire us that we received was made by Company A, which terminated the discussions earlier in May 2007; |
• | the possible alternatives to the merger, including the possibility of continuing to operate as an independent company and the desirability and perceived risks of that alternative, the range of potential benefits to our shareholders of these alternatives and the timing and likelihood of actually realizing such benefits from these alternatives; |
• | the risks associated with remaining an independent company, including our decreasing cash reserves, our limited size and scale, increasing competition (especially from competitors with greater name recognition and financial and other resources), and potential difficulties with growing our business organically or through acquisitions or strategic alliances; |
• | the likelihood that the merger will be completed, including the likelihood that the shareholder approval needed to complete the merger will be obtained; |
• | the consideration to be received by our shareholders in the merger, including the form of such consideration; |
• | the timing of the merger and the risk that if we did not accept the Apollo offer at the time, we may not have another opportunity to do so; and |
• | the impact of the merger on our customers, suppliers, other business partners, management and employees. |
• | the assessment of our board of directors, taking into account the risks of remaining an independent company (including risks of execution as well as business, competitive, industry and market risks) and a review of the historical and current information described above (including the likely prospective effect of such factors on our future business, prospects and strategic alternatives), that none of the alternatives to the merger were reasonably likely to present superior opportunities for us to create greater value for our shareholders than the consideration offered in the merger; |
• | the merger consideration relative to the historical market prices of our common stock, including the fact that Apollo’s offer of $6.25 per share of common stock outstanding represents an approximate 20.9% premium over the average closing price of our common stock from March 30, 2007 to August 6, 2007 (the 90 trading day period ending the trading day before the date of the board meeting to approve the merger agreement); |
• | the belief by our board of directors that we had obtained the highest price per share that Apollo was willing to pay, taking into account the terms resulting from extensive negotiations between the parties; |
• | the assessment of our board of directors, taking into account our management’s dealings with other possible buyers in the past and the market check conducted by us with the assistance of JMP Securities in its role as our financial advisor, as to the low likelihood that a third party would offer a higher price than Apollo; |
• | the opinion of JMP Securities to our board of directors that, as of August 7, 2007, and based upon and subject to the factors and assumptions set forth therein, the $6.25 per share in cash to be received by the holders of shares of our common stock was fair from a financial point of view to such holders (see the section entitled “The Merger — Opinion of JMP Securities” beginning on page 25); |
• | the fact that the merger consideration is all cash, which provides certainty and immediacy of value to our shareholders compared to a transaction in which our shareholders would receive stock or other non-cash consideration; |
• | the fact that the merger would be subject to the approval of our shareholders and that if a higher priced offer were to be made to the shareholders prior to the completion of the merger, the shareholders could elect not to approve the merger agreement; |
• | the availability of dissenters’ rights for Aptimus shareholders who properly exercise their statutory dissenters’ rights under Washington law; and |
• | the terms and conditions of the merger agreement, as reviewed by our board of directors with Fenwick & West, including: |
o | the structure of the merger, the representations and warranties of the parties, the covenants and agreements of the parties, and the conditions to the parties’ respective obligations; |
o | the negotiated exclusions to the definition of a “material adverse effect” on us in the merger agreement; |
o | the likelihood that the merger will be completed in light of the conditions to Apollo’s obligations to complete the merger, Apollo’s financial capability and the absence of any financing condition to Apollo’s obligation to complete the merger; |
o | the ability of our board of directors, under specified circumstances, to furnish information to and conduct negotiations with a third party and, subject to the payment to Apollo of a termination fee of up to $1,800,000, to terminate the merger agreement to accept a superior proposal; and |
o | our board of directors’ belief that the $1,800,000 maximum aggregate termination fees and expenses payable to Apollo was reasonable in the context of termination fees that were payable in other comparable transactions and would not be likely to preclude another party from making a superior proposal. |
• | the fact that we will no longer exist as an independent public company and our shareholders will forego any future increase in our value that might result from our possible growth; |
• | a cash merger will prevent our shareholders from participating in any future growth potential of Apollo, any value creation that the Aptimus business will generate for the combined company or any synergies resulting from the merger; |
• | the merger consideration relative to the current market prices of our common stock, including the fact that Apollo’s offer of $6.25 per share of common stock outstanding represents an approximate 10.6% discount below the closing price of our common stock on August 7, 2007 (the last trading day prior to the public announcement of the merger) and an approximate 3.7% discount below the closing price of our common stock on August 6, 2007 (the last trading day prior to the date of the board meeting to approve the merger agreement); |
• | the possible negative effect of the merger and public announcement of the merger on our financial performance, operating results and stock price and our relationships with customers, suppliers, other business partners, management and employees; |
• | the fact that the merger agreement precludes us from actively soliciting competing acquisition transactions and obligates us (or our successor) to pay Apollo a termination fee of up to $1,800,000 under specified circumstances, which could discourage the making of a proposal for a competing acquisition transaction or the price offered in such a proposal (see the section entitled “The Merger Agreement — Termination Fee” beginning on page 56); |
• | the risks involved with the merger, including the possibility that the merger might not be completed (even if the merger agreement is approved by our shareholders) due to the potential failure to satisfy one or more of the other closing conditions (see the section entitled “The Merger Agreement — Conditions to the Completion of the Merger” beginning on page 53); |
• | the fact that the merger agreement imposes restrictions on the conduct of our business in the pre-closing period, which may adversely affect our business in the event the merger is not completed (including by delaying or preventing us from pursuing business opportunities that may arise or precluding actions that would be advisable if we were to remain an independent company); |
• | the substantial transaction expenses to be incurred in connection with the merger and the negative impact of such expenses on our cash reserves and operating results; |
• | the fact that gains from a cash transaction would be taxable to our shareholders for United States federal income tax purposes; and |
• | the fact that certain of our directors and officers may have interests in connection with the merger that are different from, or in addition to, their interests as shareholders of Aptimus or the interests of our other shareholders generally (see the section entitled “The Merger — Interests of our Directors and Officers in the Merger” beginning on page 32). |
• | reviewed a draft of the merger agreement that was prepared as of August 6, 2007; |
• | reviewed Aptimus’ annual reports on Form 10-K for the years ended December 31, 2005 and 2006 and Aptimus’ latest quarterly report on Form 10-Q for the quarter ended March 31, 2007; |
• | reviewed Aptimus’ financial results including a balance sheet and income statement for the quarter ended June 30, 2007; |
• | reviewed a schedule of Aptimus’ shares, options and warrants outstanding prepared by Aptimus’ management as of August 2, 2007; |
• | reviewed financial projections for Aptimus prepared by Aptimus’ management for the years ending December 31, 2007 through 2011; |
• | reviewed public information with respect to certain other companies in lines of business that JMP Securities deemed relevant; |
• | reviewed the financial terms of certain business combinations involving companies in lines of business that JMP Securities deemed relevant; |
• | prepared a discounted cash flow analysis of Aptimus; |
• | held discussions with certain senior officers and other representatives of Aptimus relating to the aforementioned and any other matters which JMP Securities deemed relevant to its inquiry; and |
• | reviewed such other information, financial studies, analyses and investigations and financial, economic and market criteria that JMP Securities deemed relevant. |
Infospace Inc. | Move Inc. | |||||
Looksmart Ltd. | Think Partnership Inc. | |||||
Marchex Inc. | Traffix Inc. | |||||
MIVA Inc. | Value Click Inc. |
Enterprise Value / Revenue | Enterprise Value / EBITDA | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
CY2006A | CY2007E | CY2008E | CY2008E | ||||||||||||||||
Comparable Companies Multiples | |||||||||||||||||||
Mean | 1.6x | 1.5x | 1.3x | 9.4x | |||||||||||||||
Median | 0.9x | 1.0x | 1.0x | 7.7x | |||||||||||||||
High | 3.7x | 3.2x | 2.8x | 19.8x | |||||||||||||||
Low | 0.4x | 0.3x | 0.3x | 5.1x | |||||||||||||||
Aptimus Implied Transaction Multiple | 3.1x | 2.6x | 1.7x | 21.0x |
Announcement Date | Buyer Name | Seller Name | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
May 18, 2007 | Microsoft Corp. | aQuantive, Inc. | ||||||||
May 17, 2007 | WPP Group PLC | 24/7 Real Media, Inc. | ||||||||
April 13, 2007 | Google, Inc. | DoubleClick, Inc. | ||||||||
March 22, 2007 | One Equity Partners, Oak Investment Partners and Rho Ventures | Vertrue, Inc. | ||||||||
April 30, 2007 | Yahoo! Inc. | Right Media, Inc. | ||||||||
December 28, 2006 | Alliance Data Systems Corp. | Abacus Direct, Inc. | ||||||||
December 20, 2006 | Publicis Groupe | Digitas Inc. | ||||||||
September 21, 2006 | Alliance Data Systems Corp. | CPC Associates, Inc. | ||||||||
April 10, 2006 | United Online, Inc. | MyPoints.com, Inc. | ||||||||
February 22, 2006 | Cgi Holding Corp. | Litmus Media, Inc. | ||||||||
February 14, 2006 | Alliance Data Systems Corp. | DoubleClick Email Solutions | ||||||||
December 6, 2005 | Cgi Holding Corp. | iLead Media, Inc. | ||||||||
November 15, 2005 | PRIMEDIA, Inc. | Automotive.com, Inc. | ||||||||
November 11, 2005 | themutual.net PLC | Electronic Direct Response PLC | ||||||||
August 11, 2005 | ValueClick, Inc. | Fastclick, Inc. | ||||||||
July 27, 2005 | Marchex, Inc. | IndustryBrains, Inc. | ||||||||
June 13, 2005 | ValueClick, Inc. | Web Clients, Inc. | ||||||||
April 27, 2005 | Marchex, Inc. | Pike Street Industries, Inc. | ||||||||
April 25, 2005 | Hellman & Friedman LLC, JMI Equity | DoubleClick, Inc. | ||||||||
March 28, 2005 | Acxiom Corp. | Digital Impact, Inc. | ||||||||
March 21, 2005 | IAC/InterActive Corp. | Ask Jeeves Inc. | ||||||||
March 8, 2005 | Cgi Holding Corp. | PrimaryAds, Inc. |
Enterprise Value / Revenue | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
LTM | NTM | ||||||||||
Precedent Transaction Multiples | |||||||||||
Mean | 4.0 | x | 3.9 | x | |||||||
Median | 2.8 | x | 2.6 | x | |||||||
High | 11.6 | x | 12.1 | x | |||||||
Low | 1.1 | x | 1.0 | x | |||||||
Aptimus Implied Transaction Multiple | 2.8 | x | 2.0 | x |
Terminal EBITDA Multiple | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
12.0x | | 13.0x | | 14.0x | | 15.0x | | 16.0x | |||||||||||||||||||
20.0 | % | $ | 5.19 | $ | 5.55 | $ | 5.92 | $ | 6.28 | $ | 6.65 | ||||||||||||||||
Discount | 22.0 | % | $ | 4.87 | $ | 5.21 | $ | 5.55 | $ | 5.89 | $ | 6.23 | |||||||||||||||
Rate | 24.0 | % | $ | 4.57 | $ | 4.89 | $ | 5.21 | $ | 5.53 | $ | 5.85 | |||||||||||||||
(WACC) | 26.0 | % | $ | 4.30 | $ | 4.60 | $ | 4.90 | $ | 5.20 | $ | 5.50 | |||||||||||||||
28.0 | % | $ | 4.05 | $ | 4.33 | $ | 4.61 | $ | 4.89 | $ | 5.18 |
Announcement Date | Buyer Name | Seller Name | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
May 18, 2007 | Microsoft Corp. | aQuantive, Inc. | ||||||||
May 17, 2007 | WPP Group PLC | 24/7 Real Media, Inc. | ||||||||
March 22, 2007 | One Equity Partners, Oak Investment Partners and Rho Ventures | Vertrue, Inc. | ||||||||
December 20, 2006 | Publicis Groupe | Digitas Inc. | ||||||||
November 6, 2006 | NAVTEQ Corp. | Traffic.com, Inc. | ||||||||
October 12, 2006 | Internap Network Services Corp. | VitalStream Holdings, Inc. | ||||||||
April 27, 2006 | AttachmateWRQ, Inc. | NetIQ Corp. | ||||||||
March 6, 2006 | NBC Universal, Inc. | iVillage, Inc. | ||||||||
December 8, 2005 | Electronic Arts, Inc. | JAMDAT Mobile, Inc. | ||||||||
December 5, 2005 | Liberty Media Corp. | Provide Commerce, Inc. | ||||||||
June 1, 2005 | eBay, Inc. | Shopping.com Ltd. | ||||||||
August 11, 2005 | ValueClick, Inc. | Fastclick, Inc. | ||||||||
April 25, 2005 | Hellman & Friedman LLC, JMI Equity | DoubleClick, Inc. | ||||||||
March 21, 2005 | IAC/InterActive Corp. | Ask Jeeves Inc. | ||||||||
November 15, 2004 | Dow Jones & Co., Inc. | MarketWatch, Inc. | ||||||||
July 15, 2004 | Digitas, Inc. | Modem Media, Inc. |
Premium to: | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 Day | 10 Day Average | 30 Day Average | 60 Day Average | 90 Day Average | 180 Day Average | |||||||||||||||||||||||||
Comparable Transaction Premiums Paid | ||||||||||||||||||||||||||||||
Mean | 22.8 | % | 24.3 | % | 29.0 | % | 31.1 | % | 29.9 | % | 26.2 | % | ||||||||||||||||||
Median | 15.6 | % | 16.0 | % | 26.5 | % | 27.2 | % | 20.7 | % | 17.0 | % | ||||||||||||||||||
High | 85.4 | % | 98.3 | % | 110.9 | % | 128.4 | % | 135.1 | % | 151.6 | % | ||||||||||||||||||
Low | (0.8%) | 4.2 | % | (0.8%) | 0.6 | % | (2.8%) | (6.1%) | ||||||||||||||||||||||
Aptimus Implied Premiums Paid | (3.7%) | (8.8%) | (11.5%) | 6.0 | % | 20.9 | % | 19.2 | % |
Aptimus board of directors to provide additional information and to add context to the other analyses performed by JMP Securities, as described above. The valuation derived from the premiums paid analysis is not necessarily indicative of Aptimus’ present or future value or results, but was one factor taken into consideration by JMP Securities in its qualitative assessment of the merger consideration.
Mr. Choate’s children, Robert Wrubel (our president and chief executive officer and a director), Brad Benz (our senior vice president, business and corporate development), David Davis (our general counsel and secretary), Michael Mayor (our senior vice president, sales), Lance Nelson (our vice president, technology), Michael Sullivan (our senior vice president, marketing and media services) and John Wade (our chief financial officer). These persons exercise voting control over an aggregate of• outstanding shares of Aptimus common stock as of the record date for the Aptimus special meeting, representing approximately•% of the outstanding shares of Aptimus common stock as of such date.
• | in favor of the merger and approval of the merger agreement and the terms thereof; and |
• | against any third party proposal for an acquisition transaction and any other action which would reasonably be expected to materially impede, interfere with, delay, postpone, discourage or prevent the merger. |
• | subject to specified limited exceptions, sell, transfer, pledge, hypothecate, encumber, assign, tender or otherwise dispose of any shares of Aptimus common stock or any other Aptimus securities owned by such person; |
• | grant any powers of attorney or proxies or consents with respect to any shares of Aptimus common stock owned by such person, deposit any of such shares into a voting trust or enter into a voting agreement with respect to such shares; or |
• | exercise any dissenters’ rights under the Washington Business Corporation Act in connection with the merger and the merger agreement. |
• | any accrued but unpaid incentive compensation due the executive under any then current Aptimus incentive compensation or bonus plan applicable to the executive; |
• | an amount equal to the ratable portion of the incentive payment that would otherwise be due the executive under such incentive compensation or bonus plan for the balance of the calendar year in which the change of control takes place were the executive to be paid at a 100% performance level; and |
• | in the event that Aptimus’ successor in the change of control assumes Aptimus’ equity awards, one-half of the unvested Aptimus options, stock appreciation rights (SARs) and restricted stock held by the executive will accelerate and become vested immediately prior to the change in control (if such successor does not so assume Aptimus’ equity awards, then all of such unvested awards shall accelerate and become vested). |
• | 12 months of base salary in the case of Messrs. Choate and Wrubel and nine months of base salary in the case of Messrs. Benz, Davis, Mayor, Nelson, Sullivan and Wade; |
• | 12 months of health insurance continuation coverage premiums in the case of Messrs. Choate and Wrubel and nine months of health insurance continuation coverage premiums in the case of Messrs. Benz, Davis, Mayor, Nelson, Sullivan and Wade; and |
• | in the event that Aptimus’ successor in the change of control assumes Aptimus’ equity awards, all of the assumed and unvested Aptimus options, SARs and restricted stock held by the executive will accelerate and become vested and will be exercisable for the longer of the end of the calendar year in which employment is terminated or two and one-half months following the date the exercise period would otherwise expire under the terms of the applicable award agreement. |
• | Mr. Choate — a severance payment equal to $200,000 and payment of health insurance continuation coverage premiums equal to an amount of $13,924; |
• | Mr. Davis — a severance payment equal to $136,500 and payment of health insurance continuation coverage premiums equal to an amount of $10,443; |
• | Mr. Wade — a severance payment equal to $131,250 and payment of health insurance continuation coverage premiums equal to an amount of $10,443; |
• | 12 months of base salary in the case of Mr. Wrubel and nine months of base salary in the case of Messrs. Benz, Mayor, Nelson and Sullivan; |
• | reimbursement of health insurance continuation coverage premiums paid by the executive for 12 months in the case of Mr. Wrubel and nine months in the case of Messrs. Benz, Mayor, Nelson and Sullivan; |
• | if the termination of employment occurs within six months following the completion of the merger, the entire cash retention bonus described above; |
• | 12 months of accelerated vesting of his Apollo options that would otherwise vest over the first through fourth anniversaries of the completion of the merger described above; |
• | full accelerated vesting of his Apollo options that would otherwise vest in full on the second anniversary of the completion of the merger described above; and |
• | full accelerated vesting of his assumed Aptimus options, SARs and restricted stock. |
• | encourage or solicit any employee, consultant or independent contractor to leave the employment or service of Apollo Marketing, Apollo or any related company or otherwise interfere with any existing relationships between such persons; |
• | induce any customer, vendor, supplier, licensor, licensee or other business affiliate of Apollo Marketing to terminate its existing business relationship with Apollo Marketing or otherwise interfere with any existing business relationships between such persons; |
• | render any services relating to the research, design, development, promotion, marketing, production, sale, distribution, licensing and commercialization of products, services or technologies for use in lead generation services via an on-line network comprised of third-party web properties, house e-mail channels and managed e-mail channels or any of them in the United States; or |
• | permit his name to be used in connection with a business which is competitive with or substantially similar to the business described in the bullet point above. |
or the voting agreements or violations of securities laws in connection with any of the transactions contemplated by the merger agreement or the voting agreements. See the section entitled “The Merger Agreement — Other Payments” beginning on page 57.
Aptimus Common Stock | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Low | High | ||||||||||
Fiscal Year ending December 31, 2007 | |||||||||||
First Quarter | $ | 3.40 | $ | 6.43 | |||||||
Second Quarter | $ | 3.25 | $ | 6.79 | |||||||
Year ended December 31, 2006 | |||||||||||
First Quarter | $ | 4.58 | $ | 7.77 | |||||||
Second Quarter | $ | 5.46 | $ | 8.90 | |||||||
Third Quarter | $ | 6.02 | $ | 8.81 | |||||||
Fourth Quarter | $ | 6.11 | $ | 8.54 | |||||||
Year ended December 31, 2005 | |||||||||||
First Quarter | $ | 16.90 | $ | 27.00 | |||||||
Second Quarter | $ | 12.96 | $ | 22.24 | |||||||
Third Quarter | $ | 12.30 | $ | 20.79 | |||||||
Fourth Quarter | $ | 6.15 | $ | 14.09 |
Aptimus Common Stock Closing Price | ||||||
---|---|---|---|---|---|---|
August 7, 2007 | $ | 6.99 | ||||
• | • |
material rights of holders of Aptimus common stock under chapter 23B.13. You should read the applicable sections of chapter 23B.13, a copy of which is attached to this proxy statement asAnnex C, and which governs dissenters’ rights. The summary below is qualified in its entirety by reference to chapter 23B.13.
• | deliver to Aptimus, before the vote is taken at the special meeting regarding the merger agreement, written notice of your intent to demand payment for your shares of Aptimus common stock if the merger is effected, which notice must be separate from your proxy; your vote against the merger agreement alone will not constitute written notice of your intent to exercise your dissenters’ rights; |
• | not vote your shares in favor of the proposal to approve the merger agreement; and |
• | follow the statutory procedures for perfecting dissenters’ rights under chapter 23B.13, which are described below under the heading “Appraisal Procedures.” |
Aptimus, Inc. 199 Fremont Street, Suite 1800 San Francisco, California 94105 Attention: David Davis, general counsel and secretary Telephone: (415) 896-2123 |
• | the merger is abandoned or rescinded; |
• | a court having jurisdiction permanently enjoins or sets aside the merger; or |
• | your demand for payment is withdrawn with Aptimus’ written consent. |
• | where the demand for payment and certificates representing certificated shares of Aptimus common stock must be sent and when certificates for certificated shares must be deposited; |
• | information for holders of uncertificated shares as to what extent transfer of the shares will be restricted after the payment demand is received; |
• | a form for demanding payment that includes the date of the first announcement to the news media or to shareholders of the terms of the merger (August 8, 2007) and requires that the person asserting dissenters’ rights certify whether or not the person acquired beneficial ownership of Aptimus common stock before that date; |
• | the date by which we must receive your payment demand, which date will not be fewer than 30 or more than 60 days after the date the written notice is delivered to you; and |
• | a copy of chapter 23B.13. |
• | financial data relating to Aptimus, including a balance sheet as of the fiscal year ending not more than 16 months before the date of payment, an income statement for that year, a statement of changes in shareholders’ equity for that year, and the latest available interim financial statements, if any; |
• | an explanation of how we estimated the fair value of the shares; |
• | an explanation of how we calculated the interest; |
• | a statement of the dissenter’s right to demand supplemental payment if such shareholder believes that the amount paid is less than the fair value of the shares or under certain other circumstances enumerated in the statute and described below; and |
• | a copy of chapter 23B.13. |
to accept the payment in full satisfaction of the dissenter’s demand for payment. To the extent that we so elect, after consummating the merger, we shall estimate the fair value of the shares, plus accrued interest, and shall pay this amount to each dissenter who agrees to accept it in full satisfaction of the dissenter’s demand. We will send with our offer an explanation of how we estimated the fair value of the shares, an explanation of how the interest was calculated, and a statement of the dissenter’s right to demand payment of the dissenter’s own estimate of the dissenter’s shares and the amount of interest due if such dissenter believes that the amount offered is less than the fair value of the shares or under certain other circumstances enumerated in the statute and described below.
assert dissenters’ rights with respect to all shares of which such shareholder is the beneficial shareholder or over which such shareholder has power to direct the vote.
• | financial institutions, mutual funds, tax-exempt organizations, insurance companies, dealers in securities, persons that mark-to-market their securities, or persons that hold our stock as part of a “straddle,” “hedge” or “synthetic security transaction” (including a “conversion” transaction); |
• | holders that are nonresident alien individuals, foreign corporations, foreign partnerships, foreign trusts or foreign estates; |
• | holders who hold our stock through pass-through entities; |
• | holders of our options or warrants; |
• | holders who acquired our stock pursuant to the exercise of stock options, pursuant to participation in an employee stock purchase plan or otherwise as compensation; |
• | holders who hold their our stock as qualified small business stock; or |
• | holders who exercise dissenters’ rights. |
• | a letter of transmittal for the shareholder’s use in submitting its shares to the paying agent for payment of the merger consideration, and |
• | instructions explaining what a shareholder must do to effect the surrender of its share certificates in exchange for the merger consideration. |
schedule, set forth in the Aptimus stock plan under which the SAR was granted and the individual stock appreciation right agreement governing that SAR. However, following the merger, Aptimus SARs will become SARs covering Apollo Class A common stock with the exercise price and number of shares underlying the SAR adjusted to reflect the merger. The exercise price and the number of shares of Apollo Class A common stock subject to Aptimus SARs after the merger will be determined pursuant to the merger agreement, which provides that the number of shares of Apollo Class A common stock subject to Aptimus SARs will be determined by multiplying the number of shares that were subject to the Aptimus SAR immediately prior to the merger by the exchange ratio described above and then rounding the result down to the nearest whole share. The per share exercise price for each Apollo share subject to the Aptimus SARs will be adjusted to a price determined by dividing the per share exercise price applicable to the Aptimus SAR immediately prior to the merger by the same exchange ratio and rounding up to the nearest whole cent.
• | our corporate organization, good standing and qualification to do business and our compliance with our charter documents; |
• | our capital structure, including details regarding our authorized and outstanding shares and our options, SARs, restricted shares and other equity and debt securities; |
• | our ownership of our subsidiaries, our subsidiaries’ good standing and qualification to do business, and our subsidiaries’ capital structure; |
• | our corporate power and authority to enter into the merger agreement and consummate the transactions contemplated by the merger agreement, our due execution and delivery of the merger agreement and the enforceability of the merger agreement as a binding obligation of Aptimus, and the approval of the merger agreement by our board of directors; |
• | our entering into the merger agreement and consummating the transactions contemplated thereby not conflicting with our charter documents, our material contracts or applicable law and not creating any liens on our assets; |
• | governmental and third party authorizations, filings, notices and consents required in connection with the merger agreement and the merger; |
• | the filing of required reports with the SEC, the compliance of such reports with the requirements of applicable federal securities laws, the accuracy and completeness of the information contained in such reports, the content of our financial statements included in such reports, and our disclosure controls and procedures and internal controls over financial reporting; |
• | our compliance with the Sarbanes-Oxley Act of 2002 and the rules and regulations of the NASDAQ Stock Market; |
• | the absence of undisclosed liabilities; |
• | the validity of our accounts receivable; |
• | tax matters, including our proper preparation and timely filing of tax returns, our timely payment of taxes, and the absence of tax audits, tax deficiencies or tax liens against us; |
• | our compliance with applicable laws; |
• | our possession of necessary governmental authorizations and validity of such authorizations; |
• | our valid title to our owned personal properties and assets, free and clear of liens, and our valid leasehold interests in our leased personal properties and assets; |
• | the condition of the facilities, equipment and other tangible properties and assets owned or leased by us; |
• | our peaceful and undisturbed possession of the real properties leased by us; |
• | intellectual property matters, including our ownership of or valid license to intellectual property used in our business, and the absence of infringement or misappropriation of third party intellectual property rights; |
• | the absence of specified changes, including a material adverse effect, during the period since March 31, 2007; |
• | disclosure of our material contracts, the validity and enforceability of such contracts, and the absence of defaults under such contracts; |
• | the absence of pending or threatened litigation, unsatisfied judgments or governmental orders; |
• | employee benefits matters, including the compliance of our employee benefit plans with their constituent documents and applicable law (including the Employee Retirement Income Security Act of 1974 and Internal Revenue Code of 1986); |
• | labor matters, including the absence of any labor union or collective bargaining contract and our compliance with applicable employment laws; |
• | environmental matters, including our possession of necessary environmental permits and our compliance with applicable environmental laws; |
• | related party agreements or interests involving us and our officers, directors or 5% shareholders; |
• | insurance matters, including the absence of disputed insurance claims and the validity and scope of insurance policies; |
• | the accuracy and completeness of our books and records, including our minute book and stock record books; |
• | the opinion of our financial advisor with respect to the fairness of the merger consideration; |
• | our agreements with bankers, brokers and finders; |
• | the absence of unlawful payments made or received by us or our subsidiaries, officers, employees or agents; |
• | our relationships with our significant customers; |
• | our bank accounts; |
• | absence of powers of attorney executed by us or our subsidiaries; |
• | the exemption of the merger agreement and voting agreements from the scope of our “poison pill” rights agreement; and |
• | the accuracy and completeness of information in this proxy statement and its compliance with applicable federal securities laws. |
• | Apollo’s and Merger Sub’s corporate organization, good standing and qualification to do business; |
• | Apollo’s and Merger Sub’s corporate power and authority to enter into the merger agreement and consummate the transactions contemplated by the merger agreement, Apollo’s and Merger Sub’s due authorization of the merger agreement, and Apollo’s and Merger Sub’s due execution and delivery of the merger agreement and the enforceability of the merger agreement as a binding obligation of Apollo and Merger Sub; |
• | Apollo’s and Merger Sub’s entering into the merger agreement and consummating the transactions contemplated thereby not conflicting with their charter documents, their material contracts or applicable law and not creating any liens on their assets; |
• | governmental and third party authorizations, filings, notices and consents required in connection with the merger agreement and the merger; |
• | the availability to Apollo of sufficient funds to pay the merger consideration; |
• | Apollo’s agreements with bankers, brokers and finders; |
• | the absence of prior Merger Sub operations; |
• | ownership of our capital stock by Apollo or Merger Sub; and |
• | the accuracy and completeness of information provided by Apollo for inclusion in this proxy statement and the compliance of such information with applicable federal securities laws. |
• | any changes affecting the economy generally or the industry in which Aptimus and its subsidiaries operate or any changes in general economic conditions (provided that any such change or changes do not disproportionately affect in any material respect Aptimus and its subsidiaries, taken as a whole; |
• | changes in the trading volume or trading prices of Aptimus common stock in and of themselves (provided that this exclusion shall not apply to any underlying effect that may have caused such change in trading prices or volumes); |
• | any failure to meet analysts estimates or expectations as to revenue, earnings or other financial performance (provided that this exclusion shall not apply to any underlying effect that may have caused such failure); |
• | the taking of any action required by the merger agreement; |
• | the termination, reduction or other negative development in Aptimus’ relationships with any of its customers, suppliers or other business partners to the extent such effect was proximately caused by the announcement or pendency of the transactions contemplated the merger agreement; |
• | any employee attrition resulting from either Apollo’s failure to offer continued employment to such employee or Apollo offering continued employment to such employee with base salary and target bonus terms less favorable in the aggregate than those provided by Aptimus as of August 7, 2007; |
• | any litigation, whether commenced or threatened, which asserts allegations of a breach of fiduciary duty relating to the merger agreement or the voting agreements or violations of securities laws in connection with any of the transactions contemplated by the merger agreement or the voting agreements; |
• | changes in applicable law or United States generally accepted accounting principles (GAAP); or |
• | natural disasters. |
• | conduct its business in the ordinary course consistent with past practice; |
• | use commercially reasonable efforts to preserve its business organization, retain its officers and preserve its relationships with material customers, distributors, licensors and licensees; and |
• | maintain its books and records consistent with past practice and maintain all governmental authorizations and insurance policies necessary to conduct its business. |
• | adopt or propose any amendment to its charter documents; |
• | declare or pay any dividend or other distribution with respect to any securities (except for the repurchase of stock from service providers in connection with the termination of their services); |
• | issue or authorize for issuance any securities, except for: |
• | the grant of Aptimus options and SARs to newly hired non-officer employees in the ordinary course of business consistent with past practice; or |
• | the issuance of shares of Aptimus common stock upon the exercise of outstanding Aptimus options, SARs or warrants or pursuant to Aptimus’ ESPP; |
• | make any material change in the rights, preferences or privileges associated with any issued and outstanding securities, or redeem, purchase or otherwise acquire any securities (except for the repurchase of stock from service providers in connection with the termination of their services); |
• | increase the compensation or benefits payable to any current or former service providers or increase the benefits under any benefit plan or arrangement covering any current or former service providers (except pursuant to an agreement or benefit plan disclosed to Apollo or performance reviews held in the ordinary course of business consistent with past practice); |
• | enter into any employment agreement (other than in the ordinary course of business consistent with past practice with employees who are terminable “at-will”), severance agreement or termination agreement; |
• | establish, adopt, enter into, amend or terminate any benefit plan or compensation arrangement for the benefit of any current or former service providers; |
• | sell, lease, transfer or assign any material property or assets, other than sales of inventory, grants of non-exclusive outbound licenses and dispositions of immaterial property or assets in the ordinary course of business consistent with past practice; |
• | assume, incur or guarantee any indebtedness (other than endorsements for collection in the ordinary course of business or pursuant to existing borrowing arrangements disclosed to Apollo), materially modify the terms of any existing indebtedness, or repay any existing indebtedness in advance of its maturity date; |
• | mortgage or pledge any material properties or assets or permit any material properties or assets to become subject to liens; |
• | make any loans, advances or capital contributions to, or investments in, any other person (other than travel loans or expense advances in the ordinary course of business consistent with past practice); |
• | cancel any material debts or waive any material claims or rights of substantial value; |
• | materially amend, materially modify or terminate, or waive, release or assign any material rights under, any existing material contract or enter into any new material contract (other than customer agreements entered into in the ordinary course of business consistent with past practice); |
• | make any capital expenditure, or commit to make any capital expenditure, which exceeds $50,000 in any one case or $100,000 in the aggregate; |
• | acquire any assets, properties or rights (other than inventory or pursuant to permitted capital expenditures or inbound licenses entered into in the ordinary course of business consistent with past practice); |
• | settle or compromise any litigation (other than where the monetary payment does not exceed $50,000 in any individual case or $100,000 in the aggregate and injunctive or equitable relief is not involved); |
• | amend any Aptimus option or SAR or other right to purchase Aptimus capital stock or authorize cash payments in exchange for any of the foregoing; |
• | make any material filings or registrations with any governmental entity (except routine filings and registrations made in the ordinary course of business); |
• | be party to any merger, acquisition, consolidation, recapitalization, liquidation, dissolution or similar transaction or any purchase of all or any substantial portion of its assets or securities; |
• | make any changes in its accounting methods, principles or practices (other than as required by GAAP, as advised by its regular independent accounts); |
• | make any material tax election, change its method of tax accounting or settle any material claim relating to taxes; or |
• | agree in a legally binding manner, whether in writing or otherwise, to do any of the things described above. |
such item had not been satisfied by any such employee as of the effective time of the merger under a group health plan sponsored by Aptimus). Apollo will also use commercially reasonable efforts to provide these employees with credit for any deductibles, co-payments and out-of-pocket limits paid by them during 2007 prior to the effective time of the merger under any group medical plan sponsored by Aptimus.
• | initiate, solicit, seek or knowingly encourage, directly or indirectly, any inquiries relating to or the making or implementation of any third party proposal (as described below); |
• | engage in any negotiations concerning, or provide any non-public information or data to, or have any substantive discussions with, any person relating to a third party proposal; |
• | otherwise cooperate in or knowingly facilitate any effort or attempt to make or implement a third party proposal; |
• | enter into a contract with any person relating to a third party proposal; or |
• | release any third party from, or waive any provision of, any confidentiality or standstill agreement that would otherwise restrict or limit a third party proposal to which it is a party. |
• | any sale, lease or other disposition, direct or indirect, of any business or assets of Aptimus and/or any of its subsidiaries (which business or assets represent 20% or more of the consolidated assets of Aptimus and its subsidiaries, taken as a whole); |
• | any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 20% or more of any class of securities of Aptimus; |
• | a merger, consolidation, share exchange, business combination, reorganization or other similar transaction involving Aptimus and/or any of its subsidiaries (which subsidiaries represent 10% or more of the consolidated revenues, net income or assets of Aptimus and its subsidiaries) pursuant to which the shareholders of Aptimus or such subsidiary immediately preceding such transaction hold securities representing less than 80% of the total outstanding voting power of the surviving or resulting entity of such transaction (or parent entity of such surviving or resulting entity); |
• | the issuance, sale or other disposition, direct or indirect, by Aptimus of securities (or securities or other rights convertible into, or exercisable or exchangeable for, such securities) representing 20% or more of the voting power or capital stock of Aptimus and/or any of its subsidiaries (which subsidiaries represent 10% or more of the consolidated revenues, net income or assets of Aptimus and its subsidiaries, taken as a whole); or |
• | any combination of the foregoing in a series of related transactions. |
• | concluded in good faith after consultation with our independent financial advisors that such third party proposal constitutes or is reasonably likely to result in a superior proposal (as described below); |
• | concluded in good faith, after consultation with our outside legal counsel, that, in light of such superior proposal, failing to furnish such information or enter into or conduct discussions is reasonably likely to result in a breach of its fiduciary obligations to our shareholders under applicable law; |
• | provided contemporaneous written notice to Apollo of its furnishing information or entering into or conducting discussions or negotiations with such person; and |
• | obtained from such person an executed confidentiality agreement on terms no less favorable to Aptimus than those contained in its confidentiality agreement with Apollo. |
• | withholding, withdrawing, amending, modifying or changing its recommendation in favor of shareholder approval of the merger agreement; or |
• | in the case of a tender or exchange offer made directly to our shareholders, recommending that our shareholders accept the tender or exchange offer. |
• | a superior proposal is made to us and is not withdrawn; |
• | approval of the Apollo merger agreement by our shareholders has not been obtained; |
• | we have provided at least three business days’ prior written notice to Apollo stating: |
o | that we have received a superior proposal; |
o | the terms and conditions of such superior proposal and the identity of the person making such superior proposal, including complete copies of all documents and agreements (including exhibits and other attachments) in connection with such superior proposal; and |
o | that we intend to effect a change of recommendation and the manner in which we intend to do so (it being agreed that we will not enter into a definitive agreement with respect to the superior proposal during such |
three business day period and any change to the terms of the superior proposal will commence a new three business day period); |
• | Apollo shall not have, within the three business day period, made an offer that our board of directors by a majority vote determines in its good faith judgment (based on consultation with its financial advisor) to be at least as favorable to our shareholders from a financial point of view as such superior proposal (it being agreed that our board of directors will convene a meeting to consider any such offer by Apollo promptly following receipt); and |
• | our board of directors concludes in good faith, after consultation with its outside legal counsel, that, in light of such superior proposal, its failure to effect a change of recommendation would be reasonably likely to result in a breach of its fiduciary obligations to our shareholders under applicable law. |
• | the approval of the merger agreement by our shareholders has been obtained; |
• | all authorizations and orders of, declarations and filings with, and notices to any governmental entity required to permit the consummation of the merger have been obtained or made and are in full force and effect; and |
• | no temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Merger is in effect and no law has been enacted or is deemed applicable to the merger which makes the consummation of the merger illegal. |
• | our representations and warranties relating to our capital structure, our power and authority to enter into the merger agreement, our due execution and delivery of the merger agreement, the enforceability of the merger agreement against us, and the approval of the merger agreement by our board of directors are true and correct in all material respects on and as of both August 7, 2007 and the closing date of the merger as though they were made on and as of the closing date (except for representations and warranties which address matters only as to a specified date, which representations and warranties are true and correct in all material respects with respect to such specified date); |
• | our other representations and warranties in the merger agreement are true and correct in all respects on and as of both August 7, 2007 and the closing date of the merger as though such representations and warranties were made on and as of the closing date (except for representations and warranties which address matters only as to a specified date, which representations and warranties are true and correct with respect to such specified date); provided, that in determining whether this condition is satisfied: |
o | the phrase “in all material respects” and any “material adverse effect” qualifications contained in such representations and warranties will be disregarded; and |
o | any inaccuracies in such representations and warranties will be disregarded unless all such inaccuracies, considered collectively, have had, and continue to have, a material adverse effect on us; |
• | we have performed in all material respects all obligations required to be performed by us under the merger agreement at or prior to the closing date of the merger; |
• | there is no litigation is pending by any governmental entity seeking to prevent consummation of the merger; |
• | the employment agreements between Apollo and each of Robert Wrubel and Lance Nelson remain in full force and effect (other than as a result of his death or incapacity); |
• | there is no outstanding order obtained with the consent of Apollo or Merger Sub to the effect that the non-competition agreement or consulting agreement between Apollo and Timothy Choate is unenforceable in any respect; |
• | we have delivered to Apollo a duly executed and certified certificate stating that we are not a United States Real Property Holding Corporation; and |
• | we have taken all actions necessary to cause the rights under our “poison pill” rights agreement to expire immediately prior to the effective time of the merger and render such rights inapplicable to Apollo, Merger Sub, the merger agreement and the voting agreements. |
• | Apollo’s and Merger Sub’s representations and warranties relating to their power and authority to enter into the merger agreement, their due authorization, execution and delivery of the merger agreement, and the enforceability of the merger agreement against them are true and correct in all material respects on and as of both August 7, 2007 and the closing date of the merger as though they were made on and as of the closing date; |
• | Apollo’s and Merger Sub’s other representations and warranties in the merger agreement are true and correct in all respects on and as of both August 7, 2007 and the closing date of the merger as though such representations and warranties were made on and as of the closing date (except for representations and warranties which address matters only as to a specified date, which representations and warranties are true and correct with respect to such specified date); provided, that in determining whether this condition is satisfied: |
• | the phrase “in all material respects” and any “material adverse effect” qualifications contained in such representations and warranties will be disregarded; and |
• | any inaccuracies in such representations and warranties will be disregarded unless all such inaccuracies, considered collectively, have had, and continue to have, a material adverse effect on Apollo and Merger |
Sub or the ability of either of them to consummate the merger or perform their respective obligations under the merger agreement; and |
• | Apollo and Merger Sub have performed in all material respects all obligations required to be performed by them under the merger agreement at or prior to the closing date of the merger. |
• | the merger has not been completed by December 28, 2007, which date will be extended to February 28, 2008 if on December 28, 2007 all of the closing conditions have been satisfied or waived in writing (other than conditions that by their nature are only to be satisfied as of the closing of the merger and other than the condition relating to governmental approvals); provided, that this right to terminate the merger agreement will not be available to a party whose breach of a covenant was the proximate cause of the failure of the merger to be completed by such date; |
• | a governmental entity of competent jurisdiction has issued an order or taken any other action having the effect of permanently restraining, enjoining or otherwise prohibiting the merger, which order or other action is final and non-appealable; or |
• | the approval of the merger agreement by our shareholders has not been obtained at our special meeting or any adjournment or postponement thereof; provided, that this right to terminate the will not be available to us where the failure to obtain such shareholder approval is caused by any action or failure to act on our part that constitutes a willful breach of the merger agreement. |
• | following a breach of any representation, warranty, covenant or agreement by us or if any representation or warranty of ours has become untrue, such that the corresponding closing conditions relating to the accuracy of representations and warranties and compliance with covenants would not be satisfied, and such breach or inaccuracy is incapable of being cured or is not cured in all material respects within 15 business days after we receive written notice from Apollo; or |
• | upon any of the following: |
o | our board of directors fails to call the special meeting as required by the merger agreement; |
o | we fail to include in this proxy statement the recommendation of our board of directors that our shareholders approve the merger agreement; |
o | our board of directors effects a change of recommendation; |
o | we recommend to our shareholders or approve or endorse a third party proposal or in violation of our exclusivity covenant enter into any letter of intent, memorandum of understanding or similar document or any contract (other than a nondisclosure agreement) constituting, accepting or directly related to any third party proposal; |
o | following the receipt of a third party proposal, our board of directors fails to reaffirm its recommendation to our shareholders in favor of approval of the Apollo merger agreement within 10 business days after Apollo so requests in writing; |
o | we willfully breach our obligations under our exclusivity covenant and Apollo is materially prejudiced thereby; or |
o | a tender offer or exchange offer relating to our outstanding shares is commenced and our board of directors fails to recommend against acceptance of such tender offer or exchange offer by our shareholders within 10 business days, including by taking no position with respect to the acceptance of such tender offer or exchange offer (other than a “stop, look and listen” letter or similar communication of the type contemplated by Rule 14d-9(f) under the Securities Exchange Act of 1934, as amended). |
• | following a breach of any representation, warranty, covenant or agreement by Apollo or Merger Sub or if any representation or warranty of Apollo or Merger Sub has become untrue, such that the corresponding closing conditions relating to the accuracy of representations and warranties and compliance with covenants would not be satisfied, and such breach or inaccuracy is incapable of being cured or is not cured in all material respects within 15 business days after Apollo or Merger Sub receives written notice from us; or |
• | if, prior to obtaining shareholder approval of the merger agreement and concurrently with or following a change of recommendation made in compliance with the merger agreement, our board of directors by majority vote authorizes us to accept (or to enter into a written agreement for a transaction constituting) a superior proposal; provided, that we pay Apollo the termination fee described below under the heading “The Merger Agreement — Termination Fee.” |
• | the merger agreement is terminated by us to accept (or to enter into a written agreement for a transaction constituting) a superior proposal following a change of recommendation made in compliance with the merger agreement, in which case the termination fee would be payable prior to or concurrently with such termination; |
• | the merger agreement is terminated by Apollo based upon any of the circumstances described in the seven open bullet points under Apollo’s right to terminate in “The Merger Agreement — Termination of the Merger Agreement” above, in which case the termination fee would be payable on the second business day following such termination; or |
• | the merger agreement is terminated by either us or Apollo following the failure to complete the merger by December 28, 2007 (or February 28, 2008 if applicable) or the failure to obtain approval of the merger agreement by our shareholders and the following conditions are also met: |
o | following August 7, 2007 but prior to any such termination, any person has made to us or our shareholders, or publicly announced, a proposal or offer for any acquisition transaction (as described below) that is not subsequently withdrawn; and |
o | within 12 months following such termination, any acquisition transaction with respect us is consummated or we enter into a contract providing for any acquisition transaction; |
• | be effective for six years following the effective time of the merger with respect to claims arising from facts or events occurring on or before the effective time of the merger; |
• | contain coverage, amounts and other terms and conditions substantially the same as those provided by Aptimus’ current directors’ and officers’ liability insurance policy in effect as of August 7, 2007; and |
• | cost no more than 200% of the annual premium paid by Aptimus for such insurance as of August 7, 2007. |
from being covered by such rights agreement and provide that any rights under such rights agreement will expire immediately prior to the effective time of the merger. Aptimus has also agreed that until the merger agreement is terminated or the merger is completed, it will not amend the rights agreement or take any other action to render the rights agreement inapplicable to any transactions other than the merger and the transactions contemplated by the merger agreement and voting agreements.
• | each person who is known by us to beneficially own 5% or more of our outstanding common stock; |
• | each of our current directors; |
• | each of our “named executive officers,” as such term is defined under the rules of the Securities and Exchange Commission (SEC); and |
• | all of our current directors and executive officers as a group. |
Shares Beneficially Owned | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name of Beneficial Owner | Number of Shares | Percent of Class | |||||||||
5% Shareholders | |||||||||||
Stiassni Capital Partners, LP (1) | 393,557 | 6.0 | % | ||||||||
Munder Capital Management (2) | 349,310 | 5.3 | % | ||||||||
Directors and Executive Officers | |||||||||||
Timothy Choate (3) | 1,676,258 | 25.4 | % | ||||||||
Robert Wrubel (4) | 356,378 | 5.4 | % | ||||||||
David Davis (5) | 231,196 | 3.5 | % | ||||||||
John Wade (6) | 172,967 | 2.6 | % | ||||||||
Lance Nelson (7) | 157,724 | 2.4 | % | ||||||||
John Balousek (8) | 96,250 | 1.5 | % | ||||||||
Brad Benz (9) | 63,775 | * | |||||||||
Michael Mayor (10) | 61,460 | * | |||||||||
Eric Helgeland (11) | 51,400 | * | |||||||||
Bob Bejan (12) | 13,750 | * | |||||||||
Dayton Keane (13) | — | — | |||||||||
All current directors and executive officers as a group (11 persons) (14) | 2,888,970 | 43.7 | % |
* | Percentage is less than 1% of outstanding shares of common stock as of August 7, 2007. |
(1) | Based upon a Schedule 13G/A filed with the SEC on January 30, 2007 which indicates that Stiassni Capital Partners, LP holds 393,557 shares and that Stiassni Capital Partners, LP, Stiassni Capital, LLC (the general partner of Stiassni Capital Partners, LP) and Nicholas Stiassni (the managing member of Stiassni Capital, LLC) share voting and investment power of such shares. The address of these persons is 3400 Palos Verdes Drive West, Rancho Palos Verdes, California 90275. |
(2) | Based upon a Schedule 13G filed with the SEC on February 14, 2007 which indicates that Munder Capital Management has sole voting and investment power over 349,310 shares. The address of Munder Capital Management is 480 Pierce Street, Birmingham, Michigan 48009. |
(3) | Includes 261,000 shares held by trusts for the benefit of Mr. Choate’s children. Includes 351,952 shares subject to options and warrants held by Mr. Choate that are exercisable within 60 days of August 7, 2007. |
(4) | Includes 304,628 shares subject to options and warrants held by Mr. Wrubel that are exercisable within 60 days of August 7, 2007. |
(5) | Includes 220,667 shares subject to options held by Mr. Davis that are exercisable within 60 days of August 7, 2007. |
(6) | Includes 166,389 shares subject to options held by Mr. Wade that are exercisable within 60 days of August 7, 2007. |
(7) | Includes 154,895 shares subject to options held by Mr. Nelson that are exercisable within 60 days of August 7, 2007. |
(8) | Represents 96,250 shares subject to options held by Mr. Balousek that are exercisable within 60 days of August 7, 2007. |
(9) | Includes 62,626 shares subject to options held by Mr. Benz that are exercisable within 60 days of August 7, 2007. |
(10) | Represents 61,460 shares subject to options held by Mr. Mayor that are exercisable within 60 days of August 7, 2007. |
(11) | Includes 26,250 shares subject to options held by Mr. Helgeland that are exercisable within 60 days of August 7, 2007. |
(12) | Represents 13,750 shares subject to options held by Mr. Bejan that are exercisable within 60 days of August 7, 2007. |
(13) | Mr. Keane resigned from his position with Aptimus as senior vice president, sales and marketing effective February 2, 2007. |
(14) | Includes 1,466,679 shares subject to options and warrants held by our current directors and executive officers that are exercisable within 60 days of August 7, 2007. |
100 F Street, N.E.
Washington, D.C. 20549
Aptimus, Inc. 199 Fremont Street, Suite 1800 San Francisco, California 94105 Attention: David Davis, general counsel and secretary Telephone: (415) 896-2123 E-mail: DaveD@aptimus.com |
Mellon Investor Services LLC Proxy Solicitation and Corporation Actions 480 Washington Blvd. 27th Floor Jersey City, NJ 07310 Call toll-free: (800) 550-8475 |
AGREEMENT AND PLAN OF MERGER
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Article I | THE MERGER | 1 | ||||||||
1.1. | The Merger | 1 | ||||||||
1.2. | Closing; Effective Time | 1 | ||||||||
1.3. | Effects of the Merger | 1 | ||||||||
1.4. | Further Assurances | 2 | ||||||||
Article II | EFFECT ON CAPITAL STOCK; SURRENDER OF CERTIFICATES AND PAYMENT | 2 | ||||||||
2.1. | Effect on Capital Stock | 2 | ||||||||
2.2. | Surrender of Stock Certificates and Payment | 2 | ||||||||
2.3. | Withholding Rights | 4 | ||||||||
2.4. | Lost, Stolen or Destroyed Certificates | 4 | ||||||||
2.5. | Dissenting Shares | 4 | ||||||||
2.6. | Company Stock Options; Company SARS | 4 | ||||||||
2.7. | Warrants | 6 | ||||||||
2.8. | ESPP | 6 | ||||||||
Article III | REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 6 | ||||||||
3.1. | Organization and Good Standing | 6 | ||||||||
3.2. | Capitalization | 7 | ||||||||
3.3. | Subsidiaries of the Company | 8 | ||||||||
3.4. | Authority and Enforceability | 9 | ||||||||
3.5. | No Conflict; Authorizations | 9 | ||||||||
3.6. | SEC Filings; Financial Statements | 10 | ||||||||
3.7. | No Undisclosed Liabilities | 11 | ||||||||
3.8. | Accounts Receivable | 11 | ||||||||
3.9. | Taxes | 11 | ||||||||
3.10. | Compliance with Law | 13 | ||||||||
3.11. | Authorizations | 13 | ||||||||
3.12. | Title to Personal Properties | 13 | ||||||||
3.13. | Condition of Tangible Assets | 14 | ||||||||
3.14. | Real Property | 14 | ||||||||
3.15. | Intellectual Property | 14 | ||||||||
3.16. | Absence of Certain Changes or Events | 18 | ||||||||
3.17. | Contracts | 20 | ||||||||
3.18. | Litigation | 21 | ||||||||
3.19. | Employee Benefits | 21 | ||||||||
3.20. | Labor and Employment Matters | 24 | ||||||||
3.21. | Environmental | 24 | ||||||||
3.22. | Related Party Transactions | 25 | ||||||||
3.23. | Insurance | 26 | ||||||||
3.24. | Books and Records | 26 | ||||||||
3.25. | Opinion of Financial Advisor | 26 | ||||||||
3.26. | Brokers or Finders | 27 |
(continued)
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
3.27. | No Illegal Payments | 27 | ||||||||
3.28. | Customers | 27 | ||||||||
3.29. | Bank Accounts | 27 | ||||||||
3.30. | Powers of Attorney | 27 | ||||||||
3.31. | Rights Plan | 27 | ||||||||
3.32. | Proxy Statement | 27 | ||||||||
Article IV | REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | 28 | ||||||||
4.1. | Organization and Good Standing | 28 | ||||||||
4.2. | Authority and Enforceability | 28 | ||||||||
4.3. | No Conflicts; Authorizations | 28 | ||||||||
4.4. | Availability of Funds | 29 | ||||||||
4.5. | Brokers or Finders | 29 | ||||||||
4.6. | Interim Operations of Sub | 29 | ||||||||
4.7. | Stock Ownership | 29 | ||||||||
4.8. | Proxy Statement | 29 | ||||||||
Article V | COVENANTS OF THE COMPANY | 29 | ||||||||
5.1. | Conduct of Business | 29 | ||||||||
5.2. | Negative Covenants | 29 | ||||||||
5.3. | Access to Information | 31 | ||||||||
5.4. | Resignations | 31 | ||||||||
5.5. | Consents | 31 | ||||||||
5.6. | Notification of Certain Matters | 31 | ||||||||
5.7. | Exclusivity | 31 | ||||||||
5.8. | Company Shareholders’ Meeting | 33 | ||||||||
5.9. | Proxy Statement | 33 | ||||||||
5.10. | Rights Plan | 34 | ||||||||
5.11. | FIRPTA Certificate | 34 | ||||||||
5.12. | Company Benefit Plans | 34 | ||||||||
Article VI | COVENANTS OF PARENT | 35 | ||||||||
6.1. | Form S-8 | 35 | ||||||||
6.2. | Benefit Plans | 35 | ||||||||
6.3. | Delisting and Deregistration | 35 | ||||||||
6.4. | Indemnification | 35 | ||||||||
6.5. | Notification of Certain Matters | 36 | ||||||||
Article VII | COVENANTS OF THE COMPANY AND PARENT | 36 | ||||||||
7.1. | Regulatory Approvals | 36 | ||||||||
7.2. | Public Announcements | 36 | ||||||||
7.3. | Section 16 Matters | 37 | ||||||||
7.4. | Further Assurances | 37 |
(continued)
Page | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Article VIII | CONDITIONS TO MERGER | 37 | ||||||||
8.1. | Conditions to Each Party’s Obligation to Effect the Merger | 37 | ||||||||
8.2. | Conditions to Obligations of Parent and Merger Sub to Effect the Merger | 37 | ||||||||
8.3. | Conditions to Obligation of the Company to Effect the Merger | 38 | ||||||||
Article IX | TERMINATION | 38 | ||||||||
9.1. | Termination | 38 | ||||||||
9.2. | Effect of Termination | 40 | ||||||||
9.3. | Remedies | 40 | ||||||||
9.4. | Termination Fee | 40 | ||||||||
Article X | MISCELLANEOUS | 42 | ||||||||
10.1. | Notices | 42 | ||||||||
10.2. | Survival | 42 | ||||||||
10.3. | Amendments and Waivers | 42 | ||||||||
10.4. | Fees and Expenses | 43 | ||||||||
10.5. | Successors and Assigns | 43 | ||||||||
10.6. | Governing Law | 43 | ||||||||
10.7. | Consent to Jurisdiction | 43 | ||||||||
10.8. | Counterparts | 43 | ||||||||
10.9. | Third Party Beneficiaries | 43 | ||||||||
10.10. | Entire Agreement | 43 | ||||||||
10.11. | Captions | 44 | ||||||||
10.12. | Severability | 44 | ||||||||
10.13. | Specific Performance | 44 | ||||||||
Article XI | DEFINITIONS | 44 | ||||||||
11.1. | Definitions | 44 | ||||||||
11.2. | Interpretation | 45 |
the Articles of Incorporation of the Company shall be the Articles of Incorporation of the Surviving Corporation until amended thereafter in accordance with applicable Law.
is reasonably satisfactory to the Company (the “Paying Agent”). As soon as reasonably practicable following the Effective Time, Parent shall deposit, or shall cause to be deposited, with the Paying Agent, for the benefit of the Company Shareholders (other than with respect to Excluded Shares), the amount of cash payable pursuant to Section 2.1 as of the Effective Time in respect of the Shares (other than Excluded Shares) (such cash being hereinafter referred to as the “Payment Fund”). The Paying Agent shall make the cash payments provided for in the preceding sentence out of the Payment Fund. The Payment Fund shall not be used for any other purpose.
applicable Company Stock Option it replaced, except that (A) each such Replacement Option shall be exercisable for, and represent the right to acquire, that whole number of shares of Parent Common Stock (rounded down to the nearest whole share) equal to the number of shares of Company Common Stock subject to such Company Stock Option multiplied by the Option Exchange Ratio, and (B) the exercise price per share of Parent Common Stock shall be an amount equal to the exercise price per share of the shares of Company Common Stock subject to such Company Stock Option in effect immediately prior to the Effective Time divided by the Option Exchange Ratio (the exercise price per share, as so determined, being rounded up to the nearest full cent). To the extent that Company Stock Options were intended to qualify as “incentive stock options,” each Replacement Option will be intended to qualify as an “incentive stock option” under the Code. As promptly as reasonably practicable following the Effective Time, Parent shall issue to each Person who immediately prior to the Effective Time was a holder of an outstanding Company Stock Option under the Company Stock Plans a document evidencing the foregoing assumption of such Company Stock Option. “Option Exchange Ratio” means a fraction, the numerator of which is the Merger Consideration and the denominator of which is the average closing price of Parent Common Stock on the five trading days immediately preceding the date on which the Effective Time occurs. Notwithstanding the foregoing, at the option of a holder of a vested Company Stock Option delivered to the Company and Parent not less than 10 Business Days prior to Closing, such Company Stock Option shall not be assumed by Parent and shall be net exercised (subject to receipt by the Company and Parent of the relevant documentation evidencing such Company Stock Option and any agreement reasonably requested by Parent to evidence such net exercise), and such holder shall be entitled to receive, subject to and in accordance with Section 2.2, an amount of cash, without interest, equal to the difference between (i) the product of (A) the number of shares of Company Common Stock subject to such vested Company Stock Option multiplied by (B) the Merger Consideration, less (ii) the product of (A) number of shares of Company Common Stock subject to such vested Company Stock Option multiplied by (B) the exercise price per share of Company Common Stock, in each case subject to the withholding by the Company of required Taxes. As of the Effective Time, all such vested Company Stock Options that have been net exercised as provided in the immediately preceding sentence shall automatically be cancelled and no longer deemed outstanding, and the holders thereof shall not have any rights with respect thereto, except the right to receive the amount resulting from the calculation set forth in the immediately preceding sentence, without interest, upon surrender of their option documentation and compliance with Section 2.2.
such Company Restricted Shares had remained outstanding. “Applicable Vesting Date” means, in respect of any Company Restricted Shares, each date on which the Company’s right to repurchase such Company Restricted Shares would have lapsed if such Company Restricted Shares had remained outstanding.
federal and state securities Laws. All shares of Company Common Stock subject to issuance upon exercise, conversion and/or exchange of Company Stock Options, Company SARS and Other Purchase Rights, upon issuance in accordance with the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable.
3.3. | Subsidiaries of the Company. |
in which it owns or leases property or conducts any business so as to require such qualification, except for those jurisdictions where the failure to be so qualified and in good standing would not reasonably be expected to be, individually or in the aggregate, material to the Company and its Subsidiaries taken as a whole.
3.4. | Authority and Enforceability. |
approvals and actions that are required in connection with the transactions contemplated by this Agreement under any Material Contract (collectively, “Consents”) in order to preserve all material rights of, and material benefits to, the Surviving Corporation and its Subsidiaries thereunder.
and forms of the SEC, and that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications of the Chief Executive Officer and the Chief Financial Officer of the Company required under the Exchange Act with respect to such reports.
paid). Each of the Company and its Subsidiaries has adequately provided for, accrued or reserved on the Company Balance Sheet all Liability for all material unpaid Taxes.
(iii) has any liability for or obligation to pay Taxes of any other Person under Treas. Reg. 1.1502-6 (or any similar provision of Tax Law), or as transferee or successor, by contract or otherwise. Neither the Company nor any of its Subsidiaries is a party to any joint venture, partnership, or, to the Company’s Knowledge, other arrangement that is treated as a partnership for federal income tax purposes.
since the date thereof), the Company or one of its Subsidiaries has good and valid title to all of such properties and assets, free and clear of all Liens other than Permitted Liens. “Permitted Liens” means (i) liens for current real or personal property taxes not yet due and payable, (ii) workers’, carriers’ and mechanics’ or other similar statutory liens, (iii) liens to secure obligations to landlords or lessors under leases or rental agreements in the ordinary course of business, (iv) deposits or pledges made in connection with, or to secure payment of, workers’ compensation, unemployment insurance or similar programs in the ordinary course of business, (v) solely with respect to Intellectual Property, the grant of Out-Bound Licenses on a non-exclusive basis, in each case in the ordinary course of business consistent with past practice, (vi) liens imposed on the underlying fee interest held by a third party in leased property, and (vii) liens that are immaterial in character, amount, and extent and which do not materially detract from the value or materially interfere with the present use of the properties they affect.
protected by Copyright; (iv) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code, firmware, development tools, files, records and data, design documents, flow-charts, user manuals and training materials relating thereto and any translations thereof and all media on which any of the foregoing is recorded (collectively, “Software”); (v) domain names, uniform resource locators (“URLs”) and other names and locators associated with the Internet (collectively, “Domain Names”); and (vi) all forms of intangible common law and statutory legal rights and protections that may be obtained for, or may pertain to, the Intellectual Property set forth in clauses (i) through (v) in any country of the world (“Intellectual Property Rights”), such as letters patent, patent applications, provisional patents, design patents, PCT filings, invention disclosures and other rights to inventions or designs (“Patents”), registered and unregistered copyrights in both published and unpublished works (“Copyrights”), trademarks, service marks, trade names and other proprietary indicia (whether or not registered) (“Marks”), trade secret rights, mask works, moral rights or other literary property or authors rights (“Moral Rights”), and all applications, registrations, issuances, divisions, continuations, renewals, reissuances and extensions of the foregoing.
services, in the case of each of (i), (ii), and (iii), pursuant to Contracts entered into by the Company or any of its Subsidiaries in the ordinary course of business consistent with past practices.
has been instituted, or, to the Company’s Knowledge, threatened against the Company or any of its Subsidiaries, relating to any Intellectual Property formerly or currently used by the Company or any of its Subsidiaries and none of the Company Owned Intellectual Property is subject to any outstanding Order. Neither the Company nor any of its Subsidiaries has received any written opinion of counsel regarding any third party patents. To the Company’s Knowledge, no Person has infringed or is infringing any Intellectual Property Rights owned by the Company or any of its Subsidiaries or has otherwise misappropriated or is otherwise misappropriating any material Company Owned Intellectual Property, including any employee or former employee of Company, or has materially breached any license or agreement involving any material Company Owned Intellectual Property. The Company has not entered into any agreement granting any third party the right to bring infringement actions with respect to, or otherwise enforce rights with respect to any Intellectual Property Rights owned by the Company.
Adverse Effect. Each of the Company and its Subsidiaries is in material compliance with, and has not materially breached any term of any Out-Bound License or In-Bound License that is a Material Contract and, to the Knowledge of the Company, all other parties to any Out-Bound License or In-Bound License that is a Material Contract are in compliance with, and have not materially breached any term of, such any Out-Bound License or In-Bound License. Assuming the timely receipt of all third party consents set forth in Section 3.5(a) and Section 3.14(m) of the Company Disclosure Letter, following the Closing Date, the Surviving Corporation and its Subsidiaries will be permitted to exercise all of the Company’s and its Subsidiaries’ rights under such any Out-Bound License or In-Bound License that are Material Contracts to the same extent the Company and its Subsidiaries would have been able to had the transactions contemplated by this Agreement not occurred and without the obligation to grant any additional rights and without the payment of any additional amounts or other consideration other than ongoing rights, fees, royalties or payments which the Company or any of its Subsidiaries would otherwise be required to pay or grant. Neither this Agreement nor the transactions contemplated by this Agreement, will as a result of a Contract to which the Company or any of its Subsidiaries is a party result in (i) Surviving Company’s being bound by, or subject to, any non-compete or other material restriction on the operation or scope of its business, or (ii) Surviving Company’s being obligated to pay any royalties or other material amounts to any third party in excess of those payable by Company prior to the Closing.
Company SARS and the issuance of shares of Company Common Stock upon exercise of Company Stock Options and Company SARS;
pledge or undertaking of the Indebtedness individually in excess of $50,000 or in the aggregate in excess of $100,000 of any other Person;
retirement plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan (as defined in ERISA Section 3(37)), (d) Employee Welfare Benefit Plan (as defined in ERISA Section 3(1)) or material fringe benefit plan or program, or (e) stock purchase, stock option, severance pay, employment, change-in-control, vacation pay, company awards, salary continuation, sick leave, excess benefit, bonus or other incentive compensation, life insurance, or other employee benefit plan, contract, program, policy or other arrangement, whether or not subject to ERISA, in each case which is sponsored, maintained or contributed to by the Company, any of its Subsidiaries or any ERISA Affiliate, or with respect to which the Company, any of its Subsidiaries or any ERISA Affiliate otherwise has any present or future Liability. “ERISA Affiliate” means any entity which is a member of a “controlled group of corporations” with, under “common control” with or a member of an “affiliated services group” with, the Company or any of its Subsidiaries, as defined in Section 414(b), (c), (m) or (o) of the Code.
that any such Company Benefit Plan is not in material compliance with, all applicable Laws and Orders and prohibited transaction exemptions, including to the extent applicable, the requirements of ERISA.
the meaning of Section 409A) until received by the service provider and is not subject to interest or the additional tax imposed by Section 409A of the Code, and there are no agreements in place that would entitle a participant in any such plan to reimbursement for any such additional tax.
necessary expenses incurred in connection with their employment or service, (c) amounts paid pursuant to Company Benefit Plans of which copies have been made available to Parent, and (d) indemnification agreements for officers and directors in the form made available to Parent. To the Knowledge of the Company, except as disclosed in the 2007 Proxy Statement, none of the Related Parties has any material direct or indirect ownership interest in any firm or corporation with which the Company or any of its Subsidiaries has a business relationship, or with any firm or corporation that competes with the Company or any of its Subsidiaries (other than ownership of securities in a publicly traded company representing less than 5% of the outstanding stock of such company). To the Company’s Knowledge, none of the Related Parties is directly or indirectly interested in any Material Contract, except for Material Contracts with the Related Party pursuant to which the Related Party receives compensation for services as an officer or director.
Shareholders and at the time the Company Shareholders vote on the adoption of this Agreement, the Proxy Statement, as supplemented or amended, if applicable, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
authorizations, releases, waivers, registrations, declarations or filings that if not made or obtained would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Parent or Merger Sub to consummate the Merger or have a material adverse effect on Parent.
officers, employees and other agents and representatives (including any investment banking, legal or accounting firm retained by it or any of them and any individual member or employee of the foregoing) who have authority (or who could reasonably be perceived by a third party to have authority) to act on behalf of the Company in connection with a Third Party Proposal (each, an “Agent”) not to: (i) initiate, solicit, seek or knowingly encourage, directly or indirectly, any inquiries relating to or the making or implementation of any Third Party Proposal; (ii) engage in any negotiations concerning, or provide any non-public information or data to, or have any substantive discussions with, any Person relating to a Third Party Proposal; (iii) otherwise cooperate in or knowingly facilitate any effort or attempt to make or implement a Third Party Proposal; (iv) enter into Contract with any Person relating to a Third Party Proposal or (v) release any third party from, or waive any provision of, any confidentiality or standstill agreement that would otherwise restrict or limit a Third Party Proposal to which it is a party. The Company will immediately cease, and will cause its Subsidiaries and Agents immediately to cease, any and all existing activities, discussions or negotiations with any third parties conducted heretofore with respect to any Third Party Proposal. “Third Party Proposal” means any Contract, proposal or offer (including any proposal or offer to the shareholders of the Company) with respect to an Acquisition Transaction. “Acquisition Transaction” means: (A) any sale, lease or other disposition, direct or indirect (and however structured), of any business or assets of the Company and/or any of its Subsidiaries (which business or assets represent 20% or more of the consolidated assets of the Company and its Subsidiaries, taken as a whole), (B) any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 20% or more of any class of securities of the Company, (C) a merger, consolidation, share exchange, business combination, reorganization or other similar transaction involving the Company and/or any of its Subsidiaries (which Subsidiaries represent 10% or more of the consolidated revenues, net income or assets of the Company and its Subsidiaries, taken as a whole) pursuant to which the shareholders of the Company or such Subsidiary immediately preceding such transaction hold securities representing less than 80% of the total outstanding voting power of the surviving or resulting entity of such transaction (or parent entity of such surviving or resulting entity), (D) the issuance, sale or other disposition, direct or indirect (and however structured), by the Company of securities (or securities or other rights convertible into, or exercisable or exchangeable for, such securities) representing 20% or more of the voting power or capital stock of the Company and/or any of its Subsidiaries (which Subsidiaries represent 10% or more of the consolidated revenues, net income or assets of the Company and its Subsidiaries, taken as a whole) or (E) any combination of the foregoing (other than the Merger) in a series of related transactions.
material amendment or modification to such terms and conditions) and the identity of the Person making the request, inquiry or Third Party Proposal. The Company shall keep Parent informed in all material respects on a timely basis of any change in the status of, or any modification or amendment to, any Third Party Proposal.
to have cleared by the SEC and thereafter mail to the Company Shareholders as promptly as reasonably practicable the Proxy Statement and all other proxy materials for the Company Shareholders’ Meeting.
in connection with the approval of this Agreement and the Company Voting Agreements and the consummation of the transactions contemplated hereby and thereby);provided that if the existing directors’ and officers’ liability insurance policy expires, is terminated or cancelled during such six-year period, Parent shall cause to be substituted therefor policies containing terms and conditions which are no less favorable to the former officers and directors of the Company and its Subsidiaries only with respect to claims arising from facts or events that occurred prior to the Effective Time (including matters, acts or omissions occurring in connection with the approval of this Agreement and the Company Voting Agreements and the consummation of the transactions contemplated hereby and thereby);provided, further, that if the aggregate annual premiums for such policies at any time during such period exceed 200% of the annual premium paid by the Company for such insurance as of the Agreement Date, Parent shall be required to provide such coverage as will then be available at an annual premium equal to 200% of such rate; andprovided, further, that, in the alternative, the Surviving Corporation (or the Company prior to Closing with Parent’s consent, which consent shall not be unreasonably withheld or delayed), and after consultation with Parent, may purchase a tail policy effective as of the Effective Time with respect to the directors’ and officers’ insurance, which tail policy shall (i) be effective for a period from the Effective Time through and including the date six years after the Closing Date with respect to claims arising from facts or events that occurred on or before the Effective Time, (ii) shall contain substantially the same coverage and amounts as, and contain terms and conditions substantially the same as the coverage currently provided by the directors’ and officers’ insurance in effect as of the Agreement Date, and (iii) shall cost no more than 200% of the annual premium paid by the Company for such insurance as of the Agreement Date. Prior to the Closing the Company shall consult with Parent before renewing the existing directors’ and officers’ liability insurance policy.
to this Agreement, the Merger or any of the other transactions contemplated by this Agreement without the prior consent of the other parties (such consent not to be unreasonably withheld or delayed);provided that a party may, without such consent (but after prior consultation to the extent practicable in the circumstances), issue such press releases and make such public statements that it believes are required by applicable Law or the rules of the Nasdaq Capital Market or Nasdaq Global Select Market. Notwithstanding the foregoing, a party may make public statements in response to questions from the press, analysts, investors and make internal announcements to employees, so long as such statements and announcements are consistent with previous press releases or public statements made jointly by the Company and Parent and do not violate the terms of the Confidentiality Agreement.
a Company Material Adverse Effect. Parent shall have received a certificate to such effect signed on behalf of the Company by the Chief Executive Officer and Chief Financial Officer of the Company.
or at any adjournment thereof, regardless of whether the circumstances set forth in Section 9.4(a) shall have occurred, within two Business Days after such termination the Company shall pay Parent the amount of all of the reasonable fees and expenses incurred by Parent in connection with this Agreement and the transactions contemplated hereby (not to exceed $400,000) by wire transfer of same day funds to an account designated by Parent. The amount of any such fee paid by the Company to Parent shall be credited against any subsequent payment by the Company to Parent of the Termination Fee pursuant to Section 9.4(a).
Apollo Group, Inc. 4615 East Elwood Street Phoenix, AZ Attn: Chief Financial Officer Facsimile: (602) 383-5159 |
Morgan, Lewis & Bockius LLP One Market Street San Francisco, CA 94105 Attn: William A. Myers, Esq. Facsimile: (415) 442-1001 |
Aptimus, Inc. 100 Spear St., Suite 1115 San Francisco, CA 94105 Attn: President Facsimile: (415) 896-2561 |
Fenwick & West LLP Silicon Valley Center 801 California Street Mountain View, CA 94041 Attn: Ted G. Wang, Esq. Andrew Y. Luh, Esq. Facsimile: (650) 988-8500 |
by the Company Shareholders, no amendment or waiver shall be made which by Law requires further approval by the Company Shareholders without such further approval.
quasi-governmental regulatory body to the extent that the rules and regulations or orders of such body have the force of Law.
(Remainder of Page Intentionally Left Blank)
Name: Joseph L. D’Amico
Title: Executive VP & CFO
Name: Brian Mueller
Title: President
Name: Robert Wrubel
Title: CEO & President
OPINION OF JMP SECURITIES LLC
Aptimus Inc.
199 Fremont Street
Suite 1800
San Francisco, CA 94105
(i) | a draft of the Agreement dated as of August 6, 2007; |
(ii) | the Company’s Annual Reports on Form 10K for the years ending December 31, 2005 and 2006 and the Company’s latest Quarterly Report on Form 1OQ for the quarter ending March 31, 2007; |
(iii) | the Company’s financial results including a balance sheet and income statement for the quarter ending June 30, 2007; |
(iv) | schedule of the Company’s shares, options and warrants outstanding prepared by the Company’s management as of August 2, 2007; |
(v) | financial projections for the Company prepared by the Company’s management for the years ending December 31, 2007 through 2011; |
600 Montgomery Street
Suite 1100 tel 415.869.4400
San Francisco, CA 94111 fax 415.835.8910
Aptimus, Inc.
August 7, 2007
Page 2 of 4
(vi) | public information with respect to certain other companies in lines of business that we deemed relevant; |
(vii) | the financial terms of certain business combinations involving companies in lines of business that we deemed relevant; |
(viii) | a discounted cash flow analysis of the Company prepared by JMP; |
(ix) | discussions with certain senior officers and other representatives of the Company relating to the aforementioned and any other matters which we deemed relevant to our inquiry; and |
(x) | such other information, financial studies, analyses and investigations and financial, economic and market criteria that we deemed relevant. |
600 Montgomery Street
Suite 1100 tel 415.869.4400
San Francisco, CA 94111 fax 415.835.8910
Aptimus, Inc.
August 7, 2007
Page 3 of 4
600 Montgomery Street
Suite 1100 tel 415.869.4400
San Francisco, CA 94111 fax 415.835.8910
Aptimus, Inc.
August 7, 2007
Page 4 of 4
JMP SECURITIES LLC
600 Montgomery Street
Suite 1100 tel 415.869.4400
San Francisco, CA 94111 fax 415.835.8910
CHAPTER 23B.13 OF THE WASHINGTON BUSINESS CORPORATION ACT —
DISSENTERS’ RIGHTS
APTIMUS, INC.
SPECIAL MEETING OF SHAREHOLDERS
•, 2007
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Aptimus, Inc. hereby acknowledges receipt of the Notice of Special Meeting of Shareholders and Proxy Statement, each dated •, 2007, and hereby appoints Robert Wrubel and David Davis, and each of them, with full power of substitution, as Proxy or Proxies, to vote all shares of the common stock of the undersigned at the Special Meeting of Shareholders of Aptimus, Inc. to be held on •, •, 2007 at •, local time, at our corporate headquarters located at 199 Fremont Street, Suite 1800, San Francisco, California 94105, and at any adjournments thereof, upon the proposals set forth on this form of proxy and described in the Proxy Statement.
1. | To approve the Agreement and Plan of Merger (the “Merger Agreement”), dated as of August 7, 2007, among Apollo Group, Inc., its wholly owned subsidiary Asteroid Acquisition Corporation, and Aptimus, Inc. |
| FOR | AGAINST | ABSTAIN |
2. | Any proposal by Aptimus’ board of directors to adjourn the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of approval of the Merger Agreement. |
| FOR | AGAINST | ABSTAIN |
Either of such Proxies or substitutes shall have and may exercise all of the powers of said Proxies hereunder.
Dated: |
(Signature)
| (This proxy should be marked, dated, signed by the shareholder or shareholders exactly as the shareholder’s or shareholders’ names appear hereon, and returned promptly in the enclosed envelope. Persons signing in a fiduciary or representative capacity should so indicate. If shares are held by joint tenants, as community property or otherwise by more than one person, all should sign.) |
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR EACH OF THE PROPOSALS LISTED ABOVE.