The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached as Exhibit 1 and is incorporated herein by reference. Concurrently with the execution and delivery of the Merger Agreement, and as a condition and inducement to Parent’s willingness to enter into the Merger Agreement, Parent, and Purchaser entered into Support and Tender Agreements (each a “Support Agreement”) dated as of the date of the Merger Agreement with (i) Stephens Investments Holdings LLC, an Arkansas limited liability company ( “SIH”), (ii) Red Mountain Capital Partners II, L.P., a Delaware limited partnership (“RMCP II”), and (iii) Red Mountain Capital Partners III, L.P., a Delaware limited partnership (“RMCP III”, and together with SIH and RMCP II, the “Shareholders”). Pursuant to each Support Agreement, each Shareholder has agreed, among other things, subject to the termination of the Support Agreement (i) to tender pursuant to the Offer (and not withdraw) the Shares beneficially owned by such Shareholder (and with respect to RMCP II and RMCP III, to also cause to be tendered 29,500 Shares held by Red Mountain Capital Partners LLC, a Delaware limited liability company (“RMCP LLC”) and, if applicable, up to 11,060 Shares issuable pursuant to outstanding deferred stock units held by Mr. Mark Genender, a Partner of RMCP LLC who serves on the board of directors of the Issuer) and not to assert and perfect any dissenters’ rights under California law in connection with the Merger, (ii) to grant an irrevocable proxy to certain designees of Parent with respect to certain matters related to the Merger, (iii) to vote in favor of the Merger, upon the terms and subject to the conditions of such Support Agreements, (iv) not to transfer any of such Shareholder’s equity interests in the Issuer, including any Shares, other than in accordance with the terms and conditions set forth in the Support Agreement, (v) not to take any action that would interfere with the performance of such Shareholder’s obligations under, or the transactions contemplated by, the Support Agreement, (vi) to appear at the meeting of the shareholders of the Issuer to be convened for the purpose of voting upon the adoption of the Merger Agreement and the transactions contemplated thereby or otherwise cause its Shares to be counted as present for purpose of calculating quorum and to vote such Shareholder’s Shares in support of the adoption of the Merger Agreement in the event that shareholder approval is required to consummate the Merger, (vii) to vote against any action or agreement that would interfere with or prevent the Offer or the Merger, and (viii) not to solicit, initiate, encourage, facilitate or participate in, any discussions, negotiations or other actions by such Shareholder with respect to certain competing proposals for the equity or assets of the Issuer. Each Support Agreement will terminate upon the earlier of (a) the termination of the Merger Agreement and (b) the effective time of the Merger (the “Effective Time”), provided however, that the RMCP II and RMCP III Support Agreements will also terminate upon the earlier of (x) any amendment, modification or waiver of the Merger Agreement that (i) reduces the Offer Price to less than $22.00 per Share, (ii) changes the form of consideration payable in the Offer or the form of the Merger consideration from all cash, or (iii) otherwise materially and adversely affects the Shareholder party to such agreement, and (y) November 9, 2012. The foregoing description of the Support Agreements set forth above does not purport to be complete and is qualified in its entirety by reference to the Support Agreements, which are attached as Exhibits 2, 3 and 4 and incorporated herein by reference. Purchaser estimates that it will need up to $583.5 million to purchase all of the issued and outstanding Shares, including Shares issuable pursuant to outstanding options for which the exercise price is less than $22.00 per Share and Shares issuable pursuant to outstanding deferred stock units of the Issuer, and $14.5 million to pay related fees and expenses. Purchaser will use cash provided by Parent from Parent’s cash on hand sufficient to make such payments. Parent’s cash on hand will also be sufficient to pay the Offer Price to holders of Shares who did not tender their Shares in the Offer upon consummation of the Merger. Shared voting power with respect to the Shares beneficially owned by the Shareholders may be deemed to have been acquired through execution of the Support Agreements. |