UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant
x
Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-2
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ELOQUA, 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):
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x
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Common Stock, par value $0.0001 per share, of Eloqua, Inc. (the “Eloqua common stock”)
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(2)
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Aggregate number of securities to which transaction applies:
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As of January 4, 2013, 35,535,461 shares of Eloqua common stock and 6,604,908 shares of Eloqua common stock issuable upon the exercise of stock options.
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(3)
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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):
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The maximum aggregate value was determined based upon the sum of: (A) 35,535,461 shares of Eloqua common stock multiplied by $23.50 per share; and (B) options
to purchase 6,604,908 shares of Eloqua common stock with exercise prices less than $23.50 per share multiplied by $18.59 (which is the difference between $23.50 and the weighted average exercise price of $4.91 per share). In accordance with
Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the sum calculated in the preceding sentence by 0.0001364.
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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1921 Gallows Road, Suite 200
Vienna, Virginia 22182
—
, 2013
Dear Stockholder:
You are cordially invited to attend a special meeting of the stockholders of Eloqua, Inc., a Delaware corporation (“Eloqua”),
which will be held on
—
,
—
, 2013, at
—
a.m., local time, at
—
.
At the special meeting, you will be asked to consider and vote upon a
proposal to adopt a merger agreement pursuant to which Eloqua would be acquired by OC Acquisition LLC, a wholly owned subsidiary of Oracle Corporation, and other related proposals. We entered into this merger agreement on December 19, 2012. If
the merger is completed, you will be entitled to receive $23.50 in cash, without interest and less any applicable withholding taxes, for each share of Eloqua common stock that you own.
After careful consideration, our board of directors unanimously approved the merger agreement and determined that the merger and the
other transactions contemplated by the merger agreement are advisable and in the best interests of Eloqua and our stockholders. Our board of directors unanimously recommends that you vote “FOR” the adoption of the merger agreement.
Your vote is important, regardless of the number of shares of Eloqua common stock you own.
We cannot consummate the
merger unless the merger agreement is adopted by the affirmative vote of a majority of the outstanding shares of Eloqua common stock entitled to vote at the special meeting. If you abstain from voting, fail to cast your vote, in person or by proxy,
or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement.
The attached proxy statement provides you with detailed information about the special meeting, the merger agreement and the merger. A
copy of the merger agreement is attached as Annex A to the proxy statement. We encourage you to read the proxy statement and the merger agreement carefully and in their entirety. You may also obtain more information about Eloqua from documents
we have filed with the Securities and Exchange Commission.
Thank you for your ongoing support of Eloqua and your
consideration of this matter.
Very truly yours,
Joseph P. Payne
Chairman of the Board and Chief Executive Officer
Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger,
passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.
This proxy statement is dated
—
, 2013 and is first being mailed to stockholders on or
about
—
, 2013.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON
—
, 2013
To Eloqua Stockholders:
A special meeting of stockholders of Eloqua, Inc., a Delaware corporation (“Eloqua”), will be held on
—
,
—
, 2013, at
—
a.m., local time, at
—
, for the
following purposes:
1. To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of
December 19, 2012, among Eloqua, OC Acquisition LLC (“Parent”), a Delaware limited liability company and wholly owned subsidiary of Oracle Corporation (“Oracle”), Esperanza Acquisition Corporation, a Delaware corporation and
wholly owned subsidiary of Parent, and Oracle, as it may be amended from time to time, pursuant to which Eloqua will be acquired by Parent and become an indirect wholly owned subsidiary of Oracle;
2. To consider and vote on a proposal to approve one or more adjournments or postponements of the special meeting, if necessary, to
solicit additional proxies if Eloqua has not obtained sufficient affirmative stockholder votes to adopt the merger agreement; and
3. To transact such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.
Our board of directors has fixed the close of business on
—
, 2013 as the record date
for the purpose of determining the stockholders who are entitled to receive notice of, and to vote at, the special meeting. Only stockholders of record at the close of business on the record date are entitled to notice of, and to vote at, the
special meeting and at any adjournment or postponement of that meeting. Each stockholder is entitled to one vote for each share of Eloqua common stock held on the record date.
Under Delaware law, Eloqua stockholders who do not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the
Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for such an appraisal prior to the vote on the adoption of the merger agreement and comply with the other Delaware law procedures explained in the
section entitled “Appraisal Rights” beginning on page 76 of the accompanying proxy statement.
THE ELOQUA BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE PROPOSAL TO ADOPT THE MERGER AGREEMENT AND “FOR” THE ADJOURNMENT PROPOSAL.
By Order of the Board of Directors,
Stephen E. Holsten
Secretary
YOUR VOTE IS IMPORTANT
Whether or not you are able to attend the special meeting in person, please submit your proxy via the Internet (http://www.voteproxy.com)
or by telephone (1-800-PROXIES or 1-718-921-8500 for international callers), or complete, sign and date the enclosed proxy card and return it in the envelope provided as soon as possible. If you have Internet access, we encourage you to record your
vote via the Internet. This action will not limit your right to vote in person at the special meeting. If you abstain from voting, it will have the same effect as a vote against the proposal to adopt the merger agreement and it will have no effect
on the proposal to adjourn the special meeting. If you fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the
proposal to adopt the merger agreement and it will have no effect on the proposal to adjourn the special meeting. If you return a properly signed and dated proxy card but do not mark the box showing how you wish to vote, your shares will be voted
“
FOR
” the proposal to adopt the merger agreement and “
FOR
” the proposal to adjourn the special meeting.
ADDITIONAL INFORMATION
For additional questions about the merger,
assistance in submitting proxies or voting shares of Eloqua common stock, or to request additional copies of the proxy statement or the enclosed proxy card, please contact us at:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Telephone:
—
Attention:
—
If your brokerage firm, bank, trust or other nominee
holds your shares in “street name,” you should also call your brokerage firm, bank, trust or other nominee for additional information.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SPECIAL MEETING TO BE HELD ON
—
, 2013.
These proxy materials are being made available to stockholders on or about
—
, 2013 at
the following URL: http://
—
.
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement and the documents to which we refer you in this proxy statement contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, which we refer to as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act.
Forward-looking statements represent Eloqua’s expectations or beliefs concerning future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,”
“predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. We have based these forward-looking statements largely on our current expectations and
projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties
and other factors, including, without limitation:
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the possibility that all of the closing conditions to the consummation of the merger will not be satisfied and the merger will not be completed;
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the possibility that Eloqua stockholders will not provide sufficient votes to adopt the merger agreement under applicable law and the merger agreement;
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the inability to obtain regulatory approvals required for the merger or the imposition of regulatory conditions on Oracle or Parent;
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the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;
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the outcome of the litigation that has been brought by certain purported stockholders seeking to enjoin the consummation of the merger;
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the impact of the announcement of the merger on Eloqua’s operating results and relationships with its employees, partners and customers;
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the impact of the pending merger on Eloqua’s strategic plans and operations and Eloqua’s ability to respond effectively to competitive
pressures, industry developments and future opportunities; and
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other risks detailed in Eloqua’s filings with the Securities and Exchange Commission, or SEC, including our final prospectus related to our
initial public offering filed pursuant to Rule 424(b) under the Securities Act with the SEC on August 2, 2012, and our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012. See “Where You Can Find More
Information” on page 82 of this proxy statement.
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You should not place undue reliance on
forward-looking statements. We cannot guarantee any future results, levels of activity, performance or achievements. The statements made in this proxy statement are based on the information available to us as of the date of this proxy statement, and
you should not assume that the statements made in this proxy statement remain accurate as of any future date. Moreover, except as required by law, we assume no obligation to update forward-looking statements or update the reasons actual results
could differ materially from those anticipated in forward-looking statements.
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SUMMARY TERM SHEET
The following summary highlights information in this proxy statement and may not contain all the information that is important to you.
Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents referred to in this proxy statement. Each item in this summary includes a page reference directing you to a more complete description of the
item in this proxy statement.
In this proxy statement, the terms “we,” “us,” “our
company,” and “Eloqua” refer to Eloqua, Inc., the term “Oracle” refers to Oracle Corporation, the term “Parent” refers to OC Acquisition LLC, the term “Merger Subsidiary” refers to Esperanza Acquisition
Corporation, and the term “merger agreement” refers to the Agreement and Plan of Merger, dated as of December 19, 2012, among Eloqua, Parent, Merger Subsidiary and Oracle (with respect to certain obligations set forth in the merger
agreement), as it may be amended from time to time.
The Companies (Page 22)
Eloqua, Inc.
is a leading provider of on-demand Revenue Performance Management, or RPM, software solutions that are designed
to enable businesses to accelerate revenue growth and improve revenue predictability by automating, monitoring and measuring their complex marketing and sales initiatives. Eloqua’s set of RPM solutions, referred to as the Eloqua Platform, is a
software-as-a-service, or SaaS, platform integrating our leading marketing automation software with Eloqua’s revenue performance analytics suite. Marketing and sales professionals use the Eloqua Platform to move prospective buyers more
efficiently through the marketing and sales funnel, identify and predict the drivers of revenue, provide insights about marketing and sales programs to senior management and more tightly align marketing and sales teams to optimize resource
allocation and drive revenue growth.
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
(703) 584-2750
www.eloqua.com
Oracle Corporation
is the world’s largest provider of enterprise software and a leading provider of computer hardware
products and services. Oracle’s software, hardware systems, and services businesses develop, manufacture, market, host and support database and middleware software, applications software and hardware systems, with the latter consisting
primarily of computer server and storage products. Oracle’s businesses provide products and services that are built upon industry standards, are engineered to work together or independently within existing customer information technology (IT)
environments and run securely on a wide range of customer IT environments, including cloud computing environments. Oracle’s secure, reliable and scalable product offerings are designed to improve business efficiencies at a low total cost of
ownership. Oracle seeks to be an industry leader in each of the product offering categories in which it competes and to expand into new and emerging markets.
Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
(650) 506-7000
www.oracle.com
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OC Acquisition LLC
is a Delaware limited liability company and a wholly owned
subsidiary of Oracle. Parent is a holding company that owns the shares of certain entities recently acquired by Oracle.
OC
Acquisition LLC
500 Oracle Parkway
Redwood City, California 94065
(650) 506-7000
Esperanza Acquisition Corporation
is a Delaware corporation and a wholly owned subsidiary of Parent, and was formed solely
for the purpose of facilitating Oracle’s acquisition of Eloqua. Merger Subsidiary has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions
contemplated by the merger agreement. Upon consummation of the proposed merger, Merger Subsidiary will merge with and into Eloqua and will cease to exist.
Esperanza Acquisition Corporation
500 Oracle Parkway
Redwood City, California 94065
(650) 506-7000
The Special Meeting (Page 17)
Date, Time and Place
. The special meeting will be held on
—
,
—
, 2013, starting at
—
a.m., local time, at
—
.
Purpose
. At the special meeting, you will be asked to consider and vote upon (1) a proposal to adopt the merger
agreement, (2) a proposal to approve one or more adjournments or postponements of the special meeting, if necessary, to solicit additional proxies if Eloqua has not obtained sufficient affirmative stockholder votes to adopt the merger agreement
and (3) such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting. We are currently not aware of any other business to come before the special meeting.
Record Date and Quorum
. You are entitled to vote at the special meeting if you owned shares of Eloqua common stock at the
close of business on
—
, 2013, the record date for the special meeting. You will have one vote for each share of Eloqua common stock that you owned on the record date. As of
—
, 2013, there were
—
shares of Eloqua common stock issued and outstanding and entitled to vote. A majority of Eloqua common stock issued, outstanding
and entitled to vote at the special meeting, present in person or represented by proxy, constitutes a quorum for the purpose of the special meeting. In the event that a quorum is not present at the special meeting, the meeting may be postponed or
adjourned pursuant to the terms of the merger agreement.
Voting and Proxies
. Any stockholder of record entitled
to vote at the special meeting may submit a proxy by telephone, via the Internet, by returning the enclosed proxy card by mail, or by voting in person at the special meeting. If you intend to submit your proxy by telephone or via the Internet, you
must do so no later than the date and time indicated on the applicable proxy card(s). Even if you plan to attend the special meeting, if you hold shares of Eloqua common stock in your own name as the stockholder of record, please vote your
shares by completing, signing, dating and returning the enclosed proxy card or by using the telephone number printed on your proxy card or by using the Internet voting instructions printed on your proxy card.
If you give your proxy, but do not indicate how you wish to vote, your shares will be voted “
FOR
” the proposal to adopt
the merger agreement and “
FOR
” the adjournment proposal.
If your shares of Eloqua common stock are held in
“street name,” you should instruct your brokerage firm, bank, trust or other nominee on how to vote such shares of common stock using the instructions provided by your broker or nominee. If your shares of Eloqua common stock are held in
“street name,” you must obtain a legal proxy from such nominee in order to vote in person at the special meeting. If you fail to provide your nominee with instructions on how to vote your shares of Eloqua common stock, your nominee will
not be able to vote such shares at the special meeting.
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Vote Required
. The adoption of the merger agreement requires the affirmative
vote of a majority of the outstanding shares of Eloqua common stock entitled to vote at the special meeting.
If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm,
bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement
.
The approval of the proposal to adjourn or postpone the special meeting, if necessary, to solicit additional proxies if Eloqua has not
obtained sufficient affirmative stockholder votes to adopt the merger agreement, requires the affirmative vote of a majority of the votes properly cast for and against such matter.
If you abstain from voting, fail to cast your vote, in person or
by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the proposal to adjourn the special meeting
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In connection with the execution of the merger agreement, certain directors, executive officers and stockholders of Eloqua entered into voting agreements agreeing to vote in favor of the adoption of the
merger agreement. As of
—
, 2013, the record date for the special meeting, these directors, executive officers and stockholders collectively beneficially owned
—
% of the Eloqua common stock entitled to vote at the special meeting, which represents sufficient shares of Eloqua common stock to adopt the merger agreement.
A list of Eloqua stockholders entitled to vote at the special meeting will be available for inspection at the special meeting and at 1921
Gallows Road, Suite 200, Vienna, Virginia 22182, during ordinary business hours, for ten days prior to the special meeting.
Revocability of Proxy
. Any holder of record of Eloqua common stock may revoke his or her proxy at any time, unless noted
below, before it is voted at the special meeting by any of the following actions:
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delivering to Eloqua’s corporate secretary a signed written notice of revocation bearing a date later than the date of the proxy, stating that the
proxy is revoked;
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attending the special meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person at
the meeting);
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signing and delivering a new proxy relating to the same shares of Eloqua common stock and bearing a later date; or
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submitting another proxy by telephone or via the Internet by the date and time indicated on the applicable proxy card(s).
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Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Attn: Corporate Secretary
If you are a “street name” holder of Eloqua common stock, you may change your vote by submitting new voting instructions to
your brokerage firm, bank, trust or other nominee. You must contact your nominee to obtain instructions as to how to change or revoke your proxy.
The Merger (Page 23)
The Agreement and Plan of
Merger, dated as of December 19, 2012, which we refer to as the merger agreement, among Eloqua, Parent, Merger Subsidiary, and Oracle, solely with respect to certain obligations set
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forth in the merger agreement, provides that Merger Subsidiary will merge with and into Eloqua. Eloqua will be the surviving corporation (which we refer to as the surviving corporation) in the
merger and will continue as an indirect wholly owned subsidiary of Oracle.
If the merger is completed, at the effective time
of the merger, each outstanding share of Eloqua common stock (other than shares held in treasury or held by Oracle or any subsidiary of Eloqua or Oracle or shares as to which dissenters’ rights have been perfected) will be automatically
converted into the right to receive $23.50 in cash, without interest and less applicable withholding taxes. We refer to this amount in this proxy statement as the merger consideration.
The merger consideration of $23.50 per share to be received by Eloqua stockholders represents:
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a 31% premium to the closing price of our common stock on December 19, 2012 (the day preceding the public announcement of the merger);
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a 30% premium to the average closing price of our common stock during the 30 trading days prior to the public announcement of the merger; and
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a 104% premium to the price of our common stock, before underwriters’ commissions and discounts, in our August 2012 initial public offering;
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The closing sale price of a share of Eloqua common stock on the NASDAQ Global Market on
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, 2013 was $
—
. You are encouraged to obtain current market quotations for Eloqua common stock in connection with voting your shares.
Upon completion of the merger, shares of Eloqua common stock will no longer be listed on any stock exchange or quotation system. You will
not own any shares of the surviving corporation. The merger agreement is attached as Annex A to this proxy statement. Please read it carefully.
Recommendation of the Eloqua Board of Directors (Page 31)
The Eloqua board of directors unanimously (1) determined that the merger and the merger agreement are advisable and in the best
interests of Eloqua and its stockholders, (2) approved the merger agreement and (3) recommends that Eloqua stockholders adopt the merger agreement.
Accordingly, the Eloqua board of directors unanimously recommends that holders of Eloqua
common stock vote “FOR” the proposal to adopt the merger agreement at the special meeting
.
For the factors
considered by our board of directors in reaching its decision to approve the merger agreement, see “The Merger—Reasons for the Merger and Recommendation of our Board of Directors” beginning on page 31 of this proxy statement.
The Eloqua board of directors also unanimously recommends that holders of Eloqua common stock vote “FOR” the
adjournment proposal.
Opinion of Eloqua’s Financial Advisor (Page 33 and Annex B)
In connection with the merger, Morgan Stanley & Co. LLC, Eloqua’s financial advisor (which we refer to as Morgan Stanley),
rendered to the Eloqua board of directors its oral opinion, subsequently confirmed in writing, that as of December 19, 2012, and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth in
the written opinion, the consideration to be received by the holders of shares of Eloqua common stock (other than the holders of certain excluded shares) pursuant to the merger agreement was fair from a financial point of view to such holders. The
full text of the written opinion of Morgan Stanley, dated as of December 19, 2012, is attached as Annex B to this proxy statement and is incorporated by
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reference in this proxy statement in its entirety. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the
review undertaken by Morgan Stanley in rendering its opinion. The summary of the opinion of Morgan Stanley in this proxy statement is qualified in its entirety by reference to the full text of the opinion.
Morgan Stanley’s opinion is
directed to the Eloqua board of directors and addresses only the fairness from a financial point of view of the consideration to be received by the holders of shares of Eloqua common stock (other than the holders of certain excluded shares) pursuant
to the merger agreement as of the date of the opinion. Morgan Stanley’s opinion does not constitute a recommendation to any holder of Eloqua common stock as to how to vote at any stockholders’ meeting held in connection with the merger or
whether to take any other action with respect to the merger.
Conditions to the Merger (Page 65)
The obligations of Oracle, Parent and Merger Subsidiary, on the one hand, and Eloqua, on the other hand, to consummate the
merger are subject to the satisfaction at or prior to the closing of the merger of the following conditions:
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adoption of the merger agreement by an affirmative vote of the holders of a majority of the outstanding shares of Eloqua common stock;
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no governmental authority with jurisdiction over any party will have issued any order, injunction, judgment, decree or ruling or taken any other action
that is in effect (whether temporary, preliminary or permanent) restraining, enjoining or otherwise prohibiting the consummation of the merger; and
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no law or regulation will have been adopted that makes the consummation of the merger illegal or otherwise prohibited.
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The obligations of Parent and Merger Subsidiary to consummate the merger are subject to the satisfaction of other conditions, including
the following:
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the representations and warranties of Eloqua made in the merger agreement, subject to certain exceptions, disregarding materiality or material adverse
effect qualifications, will be true when made and as of immediately prior to the effective time of the merger (other than those representations and warranties that were made only as of a specified date, which need only be true as of such specified
date), provided that such representations and warranties will be deemed to be true unless the individual or aggregate impact of the failure to be so true would have or would reasonably be expected to have a material adverse effect on Eloqua;
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Eloqua will have performed, in all material respects, its obligations under the merger agreement on or prior to the consummation of the merger;
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there will not be pending, overtly threatened or in effect (1) any proceeding by a governmental authority challenging or prohibiting the
merger or otherwise seeking to restrict Oracle’s ownership or operation of Eloqua’s business, assets or products, (2) any proceeding by a governmental authority seeking to require divestiture by Parent, Merger Subsidiary or any
of Parent’s other affiliates of any equity interests or (3) any order, injunction or other ruling that is reasonably likely to result in any of the effects referred to in clauses (1) and (2);
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the waiting period applicable to the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (which we refer to as the HSR Act) or any applicable foreign competition law will have expired or been terminated and any affirmative approval of a governmental authority required under any applicable foreign competition law
will have been obtained;
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except as expressly permitted or contemplated by the merger agreement, as required by applicable law or agreed to in writing by Parent, Eloqua, in all
respects, will not have taken certain actions with respect to employees and employee compensation; and
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there will not have been any fact, event, change, development or set of circumstances that has had or would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Eloqua.
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The obligation of Eloqua to
consummate the merger is subject to the satisfaction of the additional following conditions:
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the representations and warranties of Parent and Merger Subsidiary made in the merger agreement will be true and correct in all material respects
(other than those representations and warranties that were made only as of a specified date, which need only be true and correct in all material respects as of such specified date);
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Parent and Merger Subsidiary will have performed in all material respects their respective obligations under the merger agreement; and
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the waiting period applicable to the merger under the HSR Act will have expired or been terminated.
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Non-Solicitation; Competing Acquisition Proposals (Page 58)
Under the merger agreement, Eloqua, its subsidiaries and their respective representatives are not permitted to, among other things:
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solicit, initiate or knowingly take any action to facilitate or encourage the submission of any acquisition proposal or the making of any inquiry,
offer or proposal that would reasonably be expected to lead to any acquisition proposal;
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conduct or engage in any discussions or negotiations with, disclose any non-public information relating to or afford access to the business,
properties, assets, books or records of Eloqua or any of its subsidiaries, or otherwise cooperate in any way, or knowingly assist, participate in, facilitate or encourage any effort by, any third party that is seeking to make or has made any
acquisition proposal; or
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enter into any agreement or agreement in principle relating to any acquisition proposal or requiring Eloqua to abandon, terminate or fail to consummate
the merger or breach its obligations under the merger agreement (other than a confidentiality agreement meeting certain requirements as set forth in the merger agreement).
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Notwithstanding the restrictions described above, prior to the adoption of the merger agreement by Eloqua stockholders, the Eloqua board
of directors may (1) engage in negotiations or discussions with any third party that has made (and not withdrawn) a bona fide unsolicited acquisition proposal in writing after the date of the merger agreement, that did not result from or arise
out of a breach of the non-solicitation provisions of the merger agreement, and that the Eloqua board of directors believes in good faith, after consultation with its outside legal counsel and Morgan Stanley, constitutes or would reasonably be
expected to lead to a superior proposal and (2) thereafter furnish to such third party non-public information relating to Eloqua or any of its subsidiaries pursuant to a confidentiality agreement meeting certain requirements as set forth in the
merger agreement, but in each case under the preceding clauses (1) and (2), only if the Eloqua board of directors determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be a
breach of its fiduciary duties to Eloqua stockholders under applicable law.
7
Termination of the Merger Agreement (Page 67)
Eloqua and Parent may terminate the merger agreement by mutual written consent at any time before the consummation of the merger,
notwithstanding any approval of the merger agreement by Eloqua stockholders. In addition, either Parent or Eloqua may terminate the merger agreement at any time before the consummation of the merger if:
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the merger has not been consummated on or before June 19, 2013 (which we refer to as the end date); however, if (1) the conditions to the
consummation of the merger by Parent and Merger Subsidiary that are specific to Parent and Merger Subsidiary have been satisfied, other than the expiration or termination of the applicable waiting period under the HSR Act and applicable foreign
competition laws and the obtainment of any affirmative approval of any governmental authority required under any applicable foreign competition law, then Parent will be entitled to extend the end date by up to two three-month periods, and
(2) the conditions to the consummation of the merger by Eloqua that are specific to Eloqua have been satisfied, other than the expiration or termination of the applicable waiting period under the HSR Act, then Eloqua will be entitled to extend
the end date by a three-month period, but in no event may the end date be extended by Parent or Eloqua to a date that is later than December 19, 2013; provided that such right to terminate the merger agreement will not be available to any party
whose material breach of any provision of the merger agreement results in the failure of the merger to be consummated by the end date;
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any governmental authority of competent jurisdiction has issued an order, decree, injunction or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the consummation of the merger and such order, decree, ruling or other action becomes final and non-appealable;
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any law or regulation has been adopted that makes consummation of the merger illegal or otherwise prohibited; or
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the special meeting has been held and the adoption of the merger agreement by Eloqua stockholders has not been obtained at the special meeting or at
any adjournment or postponement of that meeting.
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Parent may also terminate the merger agreement if:
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an adverse recommendation change (as defined in the section entitled “The Merger Agreement—Eloqua Board Recommendation”) has occurred;
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Eloqua has entered into, or publicly announced its intention to enter into, a letter of intent, memorandum of understanding or other contract (other
than a confidentiality agreement) relating to an acquisition proposal;
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Eloqua or any of its representatives has willfully and materially breached any of its obligations under the non-solicitation provisions in the merger
agreement;
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the Eloqua board of directors or any committee of the board (1) has failed to reject any acquisition proposal within ten business days of the
making public of such proposal (including, for these purposes, by taking no position with respect to the acceptance by the stockholders of Eloqua of a tender offer or exchange offer) or (2) has failed to publicly reconfirm the board
recommendation within ten business days after receipt of a written request from Parent that it do so if such request is made following the making by any person or entity of an acquisition proposal; or
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Eloqua has materially breached any of its covenants or agreements contained in the merger agreement, or if any representation or warranty of Eloqua set
forth in the merger agreement was inaccurate when made or has become inaccurate, in either case such that the conditions to the merger relating to the accuracy of Eloqua’s representations and warranties and performance of covenants or
agreements would not be satisfied as of the time of such breach or as of the time such representation and warranty
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became inaccurate, and such breaches or inaccuracies are either not cured or curable by Eloqua through the exercise of commercially reasonable efforts prior to the end date and within 30 days or
Eloqua ceases to exercise commercially reasonably efforts to cure such breaches or inaccuracies.
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Eloqua may
also terminate the merger agreement if:
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prior to the adoption of the merger agreement by Eloqua stockholders, the Eloqua board of directors has authorized Eloqua, in compliance with the terms
of the merger agreement, to enter into a binding definitive agreement in respect of a superior proposal with a third party, if Eloqua pays the termination fee described in the section entitled “The Merger Agreement—Termination Fees and
Expenses” and substantially concurrently enters into such binding definitive agreement; or
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Parent or Merger Subsidiary has materially breached any of its covenants or agreements contained in the merger agreement, or if any representation or
warranty of Parent or Merger Subsidiary has become inaccurate in any material respect, in either case such that such breaches or inaccuracies are either not cured or curable by Parent or Merger Subsidiary through the exercise of commercially
reasonable efforts prior to the end date and within 30 days or Parent or Merger Subsidiary ceases to exercise commercially reasonable efforts to cure such breaches or inaccuracies.
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Termination Fees and Expenses (Page 69)
Eloqua has agreed to pay Parent $31.5 million upon the termination of the merger agreement under certain circumstances (which we refer to as the termination fee). Additionally, upon termination of
the merger agreement under certain circumstances, Eloqua has agreed to pay up to $5.0 million of the documented reasonable out-of-pocket fees and expenses actually incurred by Parent and its affiliates on or prior to the termination of the merger
agreement in connection with the transactions contemplated by the merger agreement. Any such payment of expenses will be credited against any obligation of Eloqua to pay Parent the termination fee.
Except as expressly set forth in the merger agreement, all costs and expenses incurred in connection with the merger agreement will be
paid by the party incurring such costs and expenses. However, subject to certain exceptions, Parent will pay all filing fees payable pursuant to the HSR Act or any applicable foreign competition law.
The Voting Agreements (Page 71)
In connection with the execution of the merger agreement, the directors, executive officers and certain stockholders of Eloqua, each in his, her or its capacity as a stockholder, entered into a voting
agreement with Parent (which we refer to collectively as the voting agreements) pursuant to which each agreed, among other things, to vote his, her or its shares of Eloqua common stock:
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in favor of the adoption of the merger agreement;
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against any alternative acquisition proposal, reorganization, recapitalization, liquidation or winding up of Eloqua; and
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against any action that would frustrate the purposes of, or prevent or delay the consummation of, the transactions contemplated by the merger
agreement.
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If the merger agreement terminates in accordance with its terms, these voting agreements will also terminate.
As of
—
, 2013, the record date for the special meeting, the directors,
executive officers and stockholders of Eloqua that entered into the voting agreements collectively beneficially owned
—
% of the Eloqua common stock entitled to vote at the special meeting, which
represents sufficient shares of Eloqua common stock to adopt the merger agreement.
9
Regulatory Matters (Page 75)
Under the provisions of the HSR Act, the merger may not be completed until notification and report forms have been filed with the
Antitrust Division of the United States Department of Justice (which we refer to as the Antitrust Division) and the Federal Trade Commission (which we refer to as the FTC) by Eloqua and Parent, and the applicable waiting period has expired or been
terminated. In addition, the expiration or termination of the applicable waiting period under the HSR Act is a condition to each of Parent’s and Eloqua’s obligation to consummate the merger. Parent and Eloqua filed their notification and
report forms with the Antitrust Division and the FTC under the HSR Act on December 21 and December 26, 2012, respectively, and, in accordance with the merger agreement, each requested “early termination” of the waiting period.
Material U.S. Federal Income Tax Considerations with Respect to the Merger (Page 72)
The receipt of cash in exchange for shares of Eloqua common stock pursuant to the merger generally will be a taxable transaction for U.S.
federal income tax purposes. Generally, stockholders will recognize gain or loss equal to the difference between the amount of cash received and the adjusted tax basis of the shares of Eloqua common stock surrendered. Eloqua stockholders who are
U.S. holders generally will be subject to U.S. federal income tax on any gain recognized in connection with the merger. Eloqua stockholders who are non-U.S. holders generally will not be subject to U.S. income tax on any gain recognized in
connection with the merger unless the stockholder has certain connections to the United States. Eloqua stockholders should consult their own tax advisors to determine the tax consequences to them of the merger based on their particular
circumstances.
Appraisal Rights (Page 76)
Under Delaware law, if the merger is completed, Eloqua stockholders who do not vote in favor of adoption of the merger agreement will have
the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery, but only if they submit a written demand for such an appraisal prior to the vote on the merger agreement and comply with the other
Delaware law procedures explained in this proxy statement. Section 262 of the DGCL is attached as Annex C to this proxy statement. Please read it carefully.
Interests of Eloqua’s Directors and Executive Officers in the Merger (Page 44)
Eloqua’s directors and executive officers have economic interests in the merger that are different from, or in addition to, those of Eloqua stockholders generally. These interests include:
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severance arrangements covering our executive officers;
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single- and double-trigger vesting acceleration of certain equity awards held by our executive officers;
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single-trigger vesting acceleration of certain equity awards held by our executive officers; and
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indemnification of our directors and executive officers by the surviving corporation following the merger.
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The Eloqua board of directors was aware of and considered these interests, among other matters, in reaching its decision to approve and declare advisable
the merger agreement, the merger and the other transactions contemplated by the merger agreement.
Eloqua
Equity-Based Awards (Page 61)
Cashed Out Equity Awards
. The vested portion of each outstanding Eloqua stock
option immediately prior to the effective time of the merger, and the vested and unvested portion of each outstanding stock option held by a person who is not an employee of, or a consultant to, Eloqua immediately prior to the effective time of the
merger, will be cancelled and converted into the right to receive an amount in cash equal to the product of (1) the aggregate number of shares of Eloqua common stock subject to such cancelled stock option immediately prior to the effective time
of the merger and (2) $23.50 less the per share exercise price of such cancelled stock option.
10
Assumed Equity Awards.
The unvested portion of each outstanding stock option
held by a person who is an employee of, or a consultant to, Eloqua as of immediately prior to the effective time of the merger will be assumed by Oracle and converted automatically into an option denominated in shares of Oracle common stock and
subject to terms and conditions substantially identical to those in effect at the effective time of the merger, except that (1) the number of shares of Oracle common stock subject to each assumed stock option will be determined by multiplying
the number of shares of Eloqua common stock subject to such stock option immediately prior to the effective time of the merger by a fraction (which we refer to as the option exchange ratio), the numerator of which is $23.50 and the denominator of
which is the average closing price of Oracle common stock on NASDAQ over the five trading days immediately preceding (but not including) the date on which the effective time of the merger occurs (rounded down to the nearest whole share) and
(2) the exercise price per share of each such assumed stock option will equal (A) the per share exercise price of the stock option immediately prior to the effective time of the merger divided by (B) the option exchange ratio (rounded
upwards to the nearest whole cent). At the effective time of the merger, each Eloqua stock plan pursuant to which any assumed compensatory award has been granted will be assumed by Oracle.
Employee Stock Purchase Plan.
As required by the merger agreement and subject to the closing of the merger, Eloqua will
terminate its 2012 Employee Stock Purchase Plan, or ESPP, and all offerings under such plan, effective as of December 31, 2012. Each outstanding award under the ESPP was exercised on December 31, 2012 for the purchase of shares of Eloqua
common stock in accordance with the terms of the ESPP, and Eloqua refunded to each participant in the ESPP all amounts remaining in such participant’s account after such purchase. Eloqua will provide for no further offering periods under the
ESPP pending the merger.
Consummation of the Merger
We currently expect the merger to be completed in the first half of 2013. However, we cannot predict the exact timing of the consummation
of the merger or whether the merger will be consummated. In order to consummate the merger, Eloqua stockholders must adopt the merger agreement at the special meeting and the other closing conditions under the merger agreement, including receipt of
certain regulatory approvals, must be satisfied or, to the extent legally permitted, waived.
11
QUESTIONS AND ANSWERS ABOUT THE MERGER
AND THE SPECIAL MEETING
The following questions and answers address briefly some questions you may have regarding the merger agreement, the merger and the special meeting. These questions and answers may not address all
questions that may be important to you as a holder of shares of Eloqua common stock. For important additional information, please refer to the more detailed discussion contained elsewhere in this proxy statement, the annexes to this proxy statement
and the documents referred to in this proxy statement.
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Q:
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What is the purpose of the merger?
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A:
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Eloqua, Parent, Merger Subsidiary and Oracle have entered into a merger agreement. Subject to the terms and conditions of the merger agreement, Parent, a wholly owned
subsidiary of Oracle, will acquire Eloqua through the merger of Merger Subsidiary, a wholly owned subsidiary of Parent, with and into Eloqua. Eloqua will be the surviving corporation in the merger and will continue as an indirect wholly owned
subsidiary of Oracle.
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Q:
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What will happen to my Eloqua stock as a result of the merger?
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A:
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If the merger is completed, each share of Eloqua common stock that you hold at the effective time of the merger will be converted into the right to receive $23.50 in
cash, without interest, less any applicable withholding taxes. This does not apply to shares of Eloqua common stock held by any Eloqua stockholders who have properly perfected their appraisal rights under Delaware law as more fully described below.
The closing sale price of a share of Eloqua common stock on the NASDAQ Global Market on
—
, 2013 was $
—
. You are encouraged to obtain current market
quotations for Eloqua common stock in connection with voting your shares.
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Q:
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What will happen to Eloqua generally as a result of the merger?
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A:
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If the merger is completed, Eloqua will cease to be an independent public company and will be wholly owned by Parent, which itself is wholly owned by Oracle. As a
result, you will no longer have any ownership interest in Eloqua. Upon completion of the merger, shares of Eloqua common stock will no longer be listed on any stock exchange or quotation system, including the NASDAQ Global Market. In addition,
following the completion of the merger, the registration of Eloqua common stock and our reporting obligations under the Exchange Act will be terminated.
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Q:
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How does the merger consideration compare to the market price of Eloqua common stock?
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A:
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The merger consideration of $23.50 per share to be received by Eloqua stockholders represents:
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a 31% premium to the closing price of our common stock on December 19, 2012 (the day preceding the public announcement of the merger);
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a 30% premium to the average closing price of our common stock during the 30 trading days prior to the public announcement of the merger; and
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a 104% premium to the price of our common stock, before underwriters’ commissions and discounts, in our August 2012 initial public offering.
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The closing sale price of a share of Eloqua common stock on the NASDAQ Global Market on
—
, 2013 was $
—
. You are encouraged to obtain current market quotations for Eloqua common stock in connection with voting your shares.
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When do you expect the merger to be completed?
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A:
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We currently expect the merger to be completed in the first half of 2013. However, the merger is subject to various closing conditions, including Eloqua stockholder and
regulatory approvals, and it is possible that the failure to timely meet these closing conditions or other factors outside of our control could delay the completion of the merger. We cannot assure you that we will complete the merger on this
schedule or at all.
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Q:
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Why am I receiving this proxy statement?
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A:
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You are receiving this proxy statement because you were a stockholder of Eloqua as of
—
, 2013, the record date for the
special meeting. To complete the merger, Eloqua stockholders holding a majority of the outstanding shares of Eloqua common stock must vote to adopt the merger agreement. A copy of the merger agreement is attached to this proxy statement as Annex A.
Eloqua will submit the merger agreement to its stockholders for adoption at the special meeting described in this proxy statement. You should read the section entitled “The Special Meeting” beginning on page 17 of this proxy statement.
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Q:
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When and where will the special meeting of stockholders be held?
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A:
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The special meeting of Eloqua stockholders will be held on
—
,
—
,
2013, starting at
—
a.m., local time, at
—
.
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Q:
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What are the proposals that will be voted on at the special meeting?
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A:
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You will be asked to consider and vote on (1) a proposal to adopt the merger agreement with Parent, Merger Subsidiary and Oracle and (2) a proposal to approve
one or more adjournments or postponements of the special meeting, if necessary, to solicit additional proxies if Eloqua has not obtained sufficient affirmative stockholder votes to adopt the merger agreement.
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Q:
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How does the Eloqua board of directors recommend that I vote on the proposals?
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A:
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The Eloqua board of directors unanimously approved the merger agreement and determined that the merger and the other transactions contemplated by the merger agreement
are advisable and in the best interests of Eloqua and our stockholders and unanimously recommends that you vote “
FOR
” the proposal to adopt the merger agreement. You should read the section entitled “The Merger—Reasons for
the Merger and Recommendation of our Board of Directors” beginning on page 31 of this proxy statement. The Eloqua board of directors also unanimously recommends that you vote “
FOR
” the adjournment proposal.
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Q:
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Who is entitled to attend and vote at the special meeting?
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A:
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The record date for the special meeting is
—
, 2013. If you own shares of Eloqua common stock as of the close of
business on the record date, you are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement of the special meeting. As of the record date, there were approximately
—
shares of Eloqua common stock issued and outstanding held collectively by approximately
—
stockholders of record.
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Q:
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How many votes are required to adopt the merger agreement?
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A:
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Under applicable law, we must receive the affirmative approval of the holders of a majority of the outstanding shares of Eloqua common stock entitled to vote at the
special meeting in order to complete the merger. In connection with the execution of the merger agreement, certain directors, executive officers and stockholders of Eloqua entered into voting agreements agreeing to vote in favor of the adoption of
the merger agreement. As of
—
, 2013, the record date for the special meeting, these directors, executive officers and stockholders collectively beneficially owned
—
% of the Eloqua common stock entitled to vote at the special meeting, which represents sufficient shares of Eloqua common stock to adopt the merger agreement. If the merger agreement is terminated
in accordance with its terms, these voting agreements will also terminate.
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Q:
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How are votes counted?
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A:
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Votes will be counted by the inspector of election appointed for the special meeting, who will separately count “FOR” and “AGAINST” votes and
abstentions. The adoption of the merger agreement requires the affirmative vote of a majority of the outstanding shares of Eloqua common stock entitled to vote at the special meeting. If you abstain from voting, fail to cast your vote, in person or
by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement.
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Q:
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What do I need to do now?
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A:
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After carefully reading and considering the information contained in this proxy statement, including the annexes and the other documents referred to in this proxy
statement, please vote your shares as described below. You have one vote for each share of Eloqua common stock you own as of the record date.
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Q:
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How do I vote if I am a stockholder of record?
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by using the telephone voting instructions printed on your proxy card;
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by using the Internet voting instructions printed on your proxy card;
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by completing, signing and dating each proxy card you receive and returning it in the enclosed postage paid envelope; or
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in person by appearing and casting your vote at the special meeting.
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If you are voting by telephone or via the Internet, your voting instructions must be received by the date and time indicated on the applicable proxy card(s).
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Voting via the Internet, by telephone or by mailing in your proxy card will not prevent you from voting in person at the special meeting. You are encouraged to submit a
proxy by mail, via the Internet or by telephone even if you plan to attend the special meeting in person, to ensure that your shares of Eloqua common stock are present in person or represented at the special meeting.
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If you return a properly signed and dated proxy card but do not mark the box showing how you wish to vote, your shares will be voted “
FOR
” the proposal
to adopt the merger agreement and “
FOR
” the proposal to adjourn the special meeting. With respect to any other matter that properly comes before the special meeting, shares present in person or represented by all proxies received by
Eloqua will be voted with respect to such matter in accordance with the judgment of the persons named as attorneys-in-fact in the proxies.
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Q:
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How do I vote if my shares are held by my brokerage firm, bank, trust or other nominee?
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A:
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If your shares are held in a brokerage account or by another nominee, such as a bank or trust, then the brokerage firm, bank, trust or other nominee is considered to be
the stockholder of record with respect to those shares. However, you still are considered to be the beneficial owner of those shares, with your shares being held in “street name.” “Street name” holders generally cannot vote their
shares directly and must instead instruct the brokerage firm, bank, trust or other nominee how to vote their shares. Your brokerage firm, bank, trust or other nominee will only be permitted to vote your shares for you at the special meeting if you
instruct it how to vote. Therefore, it is important that you promptly follow the directions provided by your brokerage firm, bank, trust or other nominee regarding how to instruct them to vote your shares. If you wish to vote in person at the
special meeting, you must bring a proxy from your brokerage firm, bank, trust or other nominee authorizing you to vote at the special meeting.
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In addition, because any shares you may hold in “street name” will be deemed to be held by a different stockholder than any shares you hold of record, shares
held in “street name” will not be combined for voting purposes with shares you hold of record. To be sure your shares are voted, you should instruct your brokerage firm, bank, trust or other nominee to vote your shares. Shares held by a
corporation or business entity must be voted by an authorized officer of the entity.
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Q:
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What does it mean if I receive more than one proxy?
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A:
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If you receive more than one proxy, it means that you hold shares that are registered in more than one account. For example, if you own your shares in various
registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and you will need to sign and return, a separate proxy card for those shares because they are held in a different form of record
ownership. Therefore, to ensure that all of your shares are voted, you will need to sign and return each proxy card you receive or vote by telephone or via the Internet by using the different control number(s) on each proxy card.
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Q:
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May I change my vote after I have delivered my proxy?
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A:
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Yes. If you are the stockholder of record of Eloqua common stock, you have the right to change or revoke your proxy at any time before the vote being taken at the
special meeting:
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by delivering to Eloqua’s corporate secretary a signed written notice of revocation bearing a date later than the date of the proxy, stating that
the proxy is revoked;
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by attending the special meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person
at the meeting);
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by signing and delivering a new proxy relating to the same shares of Eloqua common stock and bearing a later date; or
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by submitting another proxy by telephone or via the Internet by the date and time indicated on the applicable proxy card(s).
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Written notices of revocation and other communications with respect to the revocation of any proxies should
be addressed to:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Attn: Corporate Secretary
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If you are a “street name” holder of Eloqua common stock, you should contact your brokerage firm, bank, trust or other nominee to obtain instructions as to
how to change or revoke your proxy.
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Q:
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What are the material U.S. federal income tax consequences of the merger to me?
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A:
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The receipt of cash in exchange for shares of Eloqua common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes.
Generally, you will recognize gain or loss equal to the difference between the amount of cash you receive and the adjusted tax basis of your shares of Eloqua common stock. If you are a U.S. holder (as defined in the section entitled “Material
U.S. Federal Income Tax Considerations with Respect to the Merger”), you generally will be subject to U.S. federal income tax on any gain recognized in connection with the merger. If you are a non-U.S. holder, you generally will not be subject
to U.S. federal income tax on any gain recognized in connection with the merger unless you have certain connections to the United States. The tax consequences of the merger to you will depend on your particular circumstances, and you should consult
your own tax advisors to determine how the merger will affect you. For a more detailed summary of the tax consequences of the merger, see “Material U.S. Federal Income Tax Considerations with Respect to the Merger” beginning on page 72 of
this proxy statement.
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Q:
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Am I entitled to appraisal rights?
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A:
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If the merger is completed, Eloqua stockholders who do not vote in favor of the adoption of the merger agreement will have the right to seek appraisal of the fair value
of their shares of Eloqua common stock, as determined by the Delaware Court of Chancery, but only if they properly perfect appraisal rights under Delaware law, as described in the section entitled “Appraisal Rights” beginning on page 76 of
this proxy statement. A copy of the full text of Section 262 of the Delaware General Corporation Law, or the DGCL, is included as Annex C to this proxy statement. Failure to strictly comply with the procedures set forth in Section 262 of
the DGCL will result in the loss of appraisal rights.
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Q:
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Should I send in my stock certificates now?
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A:
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No. After the merger is completed, you will be sent a letter of transmittal with detailed written instructions for exchanging your shares of Eloqua common stock for the
merger consideration. If your shares are held in “street name” by your brokerage firm, bank, trust or other nominee, you will receive instructions from your brokerage firm, bank, trust or other nominee as to how to effect the surrender of
your “street name” shares in exchange for the merger consideration.
PLEASE DO NOT SEND IN YOUR STOCK CERTIFICATES NOW
.
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Q:
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What happens if I sell my shares of Eloqua common stock before the special meeting?
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A:
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The record date for stockholders entitled to vote at the special meeting is earlier than the date of the special meeting and the expected closing date of the merger. If
you transfer your shares of Eloqua common stock after the record date but before the special meeting, you will, unless special arrangements are made, retain your right to vote at the special meeting but will transfer the right to receive the merger
consideration to the person to whom you transfer your shares.
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In addition, if you sell your shares prior to the special meeting or prior to the effective time of the merger, you will not be eligible to exercise your appraisal
rights in respect of the merger. For a more detailed discussion of your appraisal rights and the requirements for perfecting your appraisal rights, see “Appraisal Rights” beginning on page 76 and Annex C of this proxy statement.
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Q:
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What happens if the merger is not completed for any reason?
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A:
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If the merger is not completed for any reason, Eloqua stockholders will not receive any payment for their shares in connection with the merger. Instead, we will remain
a stand-alone public company, and Eloqua common stock will continue to be listed and traded on the NASDAQ Global Market. Under specified circumstances, we may be required to pay to Parent a termination fee or expenses associated with the
transaction, as described below under “The Merger Agreement—Termination Fees and Expenses” beginning on page 69 of this proxy statement.
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Q:
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Who can answer further questions?
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A:
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For additional questions about the merger, assistance in submitting proxies or voting shares of Eloqua common stock, or to request additional copies of the proxy
statement or the enclosed proxy card, please contact us at:
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Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Telephone:
—
Attention:
—
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If your brokerage firm, bank, trust or other nominee holds your shares in “street name,” you should also call your brokerage firm, bank, trust or other
nominee for additional information.
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16
THE SPECIAL MEETING
Date, Time, Place and Purpose of the Special Meeting
This proxy statement is being furnished to Eloqua stockholders as part of the solicitation of proxies by the Eloqua board of directors for
use at the special meeting to be held on
—
,
—
, 2013, starting at
—
a.m., local
time, at
—
, or at any adjournment or postponement of the special meeting. The purpose of the special meeting is for Eloqua stockholders to consider and vote on the following:
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1.
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a proposal to adopt the merger agreement;
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2.
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a proposal to approve one or more adjournments or postponements of the special meeting, if necessary, to solicit additional proxies if Eloqua has not obtained
sufficient affirmative stockholder votes to adopt the merger agreement; and
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3.
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such other business as may properly come before the special meeting or any adjournment or postponement of the special meeting.
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Eloqua stockholders must adopt the merger agreement in order for the merger to occur. A copy of the merger agreement is attached to this
proxy statement as Annex A. You are urged to read the merger agreement carefully in its entirety.
Record
Date and Quorum
Our board of directors has fixed the close of business on
—
, 2013 as the record date for the special meeting, and only holders of record of Eloqua common stock on the record date are entitled to vote at the special meeting. As of
—
, 2013, there were
—
shares of Eloqua common stock outstanding and entitled to vote. Each share of Eloqua common stock entitles its holder to one vote on
all matters properly coming before the special meeting.
A majority of the shares of Eloqua common stock issued, outstanding
and entitled to vote at the special meeting, present in person or represented by proxy, constitutes a quorum for the purpose of considering the proposals. Shares of Eloqua common stock held by stockholders present in person or represented at the
special meeting but not voted, including shares of Eloqua common stock for which proxies have been received but for which stockholders have abstained, will be treated as present at the special meeting for purposes of determining the presence or
absence of a quorum for the transaction of all business. If a quorum fails to attend the special meeting, the presiding officer may adjourn the special meeting. See “—Postponement and Adjournments” below.
Vote Required for Approval
You may vote “FOR” or “AGAINST”, or you may “ABSTAIN” from voting on, each proposal to be considered and voted on at the special meeting.
Consummation of the merger requires the adoption of the merger agreement by the affirmative vote of the holders of a majority of the
outstanding shares of Eloqua common stock entitled to vote at the special meeting. Therefore, if you abstain or fail to vote on the proposal to adopt the merger agreement, or if you fail to give voting instructions to your brokerage firm, bank,
trust or other nominee, it will have the same effect as a vote against the adoption of the merger agreement.
The approval of
the proposal to adjourn or postpone the special meeting, if necessary, to solicit additional proxies if Eloqua has not obtained sufficient affirmative stockholder votes to adopt the merger agreement, requires the affirmative vote of a majority of
the votes properly cast for and against such matter. If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the
proposal to adjourn the special meeting.
17
In connection with the execution of the merger agreement, the directors, executive officers
and certain stockholders of Eloqua entered into voting agreements agreeing to vote in favor of the adoption of the merger agreement. As of
—
, 2013, the record date for the special meeting, these
directors, executive officers and stockholders collectively beneficially owned
—
% of the Eloqua common stock entitled to vote at the special meeting, which represents sufficient shares of Eloqua
common stock to adopt the merger agreement.
Voting and Proxies
Holders of record of Eloqua common stock may vote their shares by attending the special meeting and voting their shares of Eloqua common
stock in person. Alternatively, you may vote your shares in one of the following three ways, whether or not you plan to attend the special meeting:
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by using the Internet voting instructions printed on your proxy card;
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by using the telephone voting instructions printed on your proxy card; or
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•
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by completing, signing and dating each proxy card you receive and returning it in the enclosed postage prepaid envelope.
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Voting via the Internet, by telephone or by mailing in your proxy card will not prevent you from voting in person at the special meeting.
You are encouraged to submit a proxy via the Internet, by telephone or by mail, even if you plan to attend the special meeting, to ensure that your shares of Eloqua common stock are represented at the special meeting.
All shares of Eloqua common stock represented by properly signed and dated proxies received in time for the special meeting will be voted
at the special meeting in the manner specified by the holder. If you return a properly signed and dated proxy card but do not mark the box showing how you wish to vote, your shares will be voted “FOR” the proposal to adopt the merger
agreement and “FOR” the approval of the proposal to adjourn the special meeting. With respect to any other matter that properly comes before the special meeting, shares present in person or represented by all proxies received by Eloqua
will be voted with respect to such matter in accordance with the judgment of the persons named as attorneys-in-fact in the proxies.
If your shares of Eloqua common stock are held in “street name,” you will receive instructions from your brokerage firm, bank, trust or other nominee that you must follow in order to have your
shares voted. If you have not received such voting instructions or require further information regarding such voting instructions, contact your brokerage firm, bank, trust or other nominee, as the case may be. Brokers who hold shares of Eloqua
common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from the beneficial owner. However,
brokers are not allowed to exercise their voting discretion with respect to the approval of matters that are “non-routine,” such as adoption of the merger agreement, without specific instructions from the beneficial owner. Broker non-votes
are shares held by a broker or other nominee that are present in person or represented at the meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal
and the broker does not have discretionary voting power on such proposal. Because all proposals for the special meeting are non-routine and non-discretionary, Eloqua anticipates that there will not be any broker non-votes in connection with any
proposal. If your broker or other nominee holds your shares of Eloqua common stock in “street name,” your broker or other nominee will vote your shares only if you provide instructions on how to vote. Please follow the directions on the
voting instruction form sent to you by your broker or other nominee with this proxy statement.
18
Revocation of Proxies
Proxies received by Eloqua at any time before the vote being taken at the special meeting, which have not been revoked or superseded
before being voted, will be voted at the special meeting. If you are a stockholder of record of shares of Eloqua common stock, you have the right to change or revoke your proxy at any time, unless noted below, before the vote is taken at the special
meeting by any of the following actions:
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delivering to Eloqua’s corporate secretary a signed written notice of revocation bearing a date later than the date of the proxy, stating that the
proxy is revoked;
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attending the special meeting and voting in person (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person at
the meeting);
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signing and delivering a new proxy, relating to the same shares of Eloqua common stock and bearing a date later than the date of the earlier proxy; or
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submitting another proxy by Internet or telephone by the date and time indicated on the applicable proxy card(s).
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Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Attn: Corporate Secretary
If you are a “street name” holder of Eloqua common stock, you may change your vote by submitting new voting instructions to
your brokerage firm, bank, trust or other nominee. You must contact your nominee to obtain instructions as to how to change or revoke your proxy.
Postponement and Adjournments
Although it is
not currently expected, the special meeting may be postponed or adjourned for the purpose of, among other things, soliciting additional proxies. Under the terms of the merger agreement, Eloqua may postpone or adjourn the special meeting as follows:
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we may adjourn or postpone the special meeting to the extent we reasonably determine that such adjournment or postponement is required by applicable
law;
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if we are unable to obtain a quorum of our stockholders at the special meeting, we may adjourn the special meeting for up to five business days if
necessary to obtain a quorum; and
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if we receive an acquisition proposal (as described in “The Merger Agreement—Non-Solicitation; Competing Acquisition Proposals” below)
or the price or material terms of a previously received acquisition proposal are modified or amended, in any such case during the five business days immediately prior to the special meeting, we may delay the special meeting until the seventh
business day after the date the special meeting would otherwise have been originally held.
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Eloqua may
adjourn the special meeting without notice if announced at the meeting at which the adjournment is taken and if the adjournment is to a date that is not greater than 30 days after the original date fixed for the special meeting and no new record
date is fixed for the adjourned meeting. Any signed proxies received by Eloqua prior to the special meeting in which no voting instructions are provided on such matter will be voted “FOR” an adjournment of the special meeting, if
necessary or appropriate. Any postponement or adjournment of the special meeting as permitted by the merger agreement will allow Eloqua stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special
meeting as postponed or adjourned.
19
If, at the special meeting, the number of shares of Eloqua common stock present in person or
by proxy and voting in favor of the proposal to adopt the merger agreement is not sufficient to approve that proposal, Eloqua may move to adjourn the special meeting in order to enable the Eloqua board of directors to solicit additional proxies for
the adoption of the merger agreement. In that event, Eloqua will ask its stockholders to vote only upon the adjournment proposal, and not the merger agreement proposal. The adjournment proposal relates only to an adjournment of the special meeting
occurring for purposes of soliciting additional proxies for approval of the merger agreement proposal in the event that there are insufficient votes to approve that proposal. Eloqua retains full authority to the extent set forth in its bylaws and
Delaware law (subject to the terms of the merger agreement) to adjourn the special meeting for any other purpose, or to postpone the special meeting before it is convened, without the consent of any Eloqua stockholders.
Solicitation of Proxies
Our directors, officers and employees may solicit proxies by personal interview, mail, electronic mail, telephone, facsimile or other means of communication. These persons will not be paid additional
remuneration for their efforts. We will also request brokers and other fiduciaries to forward proxy solicitation material to the beneficial owners of shares of Eloqua common stock that the brokers and fiduciaries hold of record. Upon request, we
will reimburse them for their reasonable out-of-pocket expenses. The expense of the solicitation of proxies will be borne by Eloqua.
Stockholder List
A list of Eloqua stockholders entitled to vote at the special meeting will be available for
inspection at our principal executive offices located at 1921 Gallows Road, Suite 200, Vienna, Virginia 22182 at least 10 days prior to the date of the special meeting and continuing through the special meeting for any purpose germane to the
meeting. The list will also be available at the meeting for inspection by any stockholder present at the meeting.
Questions and Additional Information
If you have questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact us at:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Telephone:
—
Attention:
—
20
PROPOSALS SUBMITTED TO ELOQUA STOCKHOLDERS
The Merger Agreement Proposal
(Item 1 on the Proxy Card)
Eloqua is asking its stockholders to adopt the merger
agreement that Eloqua has entered into with Oracle, Parent and Merger Subsidiary. A copy of the merger agreement is attached to this proxy statement as Annex A. You are urged to read the merger agreement carefully in its entirety.
For a summary and detailed information regarding this proposal, see the information about the merger agreement and the merger throughout
this proxy statement, including the information set forth in the sections entitled “The Merger” beginning on page 23 of this proxy statement and “The Merger Agreement” beginning on page 49 of this proxy statement. A copy of the
merger agreement is attached as Annex A to this proxy statement.
Under applicable law, we cannot complete the merger without
the affirmative vote of a majority of the outstanding shares of Eloqua common stock entitled to vote at the special meeting voting in favor of the proposal to adopt the merger agreement. If you abstain from voting, fail to cast your vote, in person
or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote against the proposal to adopt the merger agreement.
The Eloqua board of directors unanimously determined that the merger and the merger agreement are advisable and in the best interests of
Eloqua and its stockholders, approved the merger agreement and recommends that Eloqua stockholders adopt the merger agreement.
Accordingly, the Eloqua board of directors unanimously recommends that holders of Eloqua common stock vote
“FOR” the proposal to adopt the merger agreement.
See “The Merger—Reasons for the Merger and Recommendation of our Board of Directors” beginning on page 31 of this proxy statement.
The Adjournment Proposal
(Item 2 on the Proxy Card)
Eloqua is asking its stockholders to approve a
proposal for one or more adjournments or postponements of the special meeting, if necessary, to solicit additional proxies if Eloqua has not obtained sufficient affirmative stockholder votes to adopt the merger agreement. If the Eloqua stockholders
approve the adjournment proposal, Eloqua could adjourn or postpone the special meeting, and any adjourned session of the special meeting, and use the additional time to solicit additional proxies.
If, at the special meeting, the number of shares of Eloqua common stock present in person or by proxy and voting in favor of the proposal
to adopt the merger agreement is not sufficient to approve that proposal, Eloqua may move to adjourn the special meeting in order to enable the Eloqua board of directors to solicit additional proxies for the adoption of the merger agreement. In that
event, Eloqua will ask its stockholders to vote only upon the adjournment proposal, and not the merger agreement proposal. The approval of the adjournment proposal requires the affirmative vote of a majority of the votes properly cast for and
against the adjournment proposal at the special meeting. If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on
the proposal to adjourn the special meeting.
The adjournment proposal relates only to an adjournment of the special meeting
occurring for purposes of soliciting additional proxies for approval of the merger agreement proposal in the event that there are insufficient votes to approve that proposal. Eloqua retains full authority to the extent set forth in its bylaws and
Delaware law (subject to the terms of the merger agreement) to adjourn the special meeting for any other purpose, or to postpone the special meeting before it is convened, without the consent of any Eloqua stockholders.
The Eloqua board of directors unanimously recommends that holders of Eloqua common stock vote “FOR” the adjournment
proposal.
21
THE COMPANIES
Eloqua, Inc.
is a leading provider of on-demand Revenue Performance Management, or RPM, software
solutions that are designed to enable businesses to accelerate revenue growth and improve revenue predictability by automating, monitoring and measuring their complex marketing and sales initiatives. Eloqua’s set of RPM solutions, referred to
as the Eloqua Platform, is a software-as-a-service, or SaaS, platform integrating our leading marketing automation software with Eloqua’s revenue performance analytics suite. Marketing and sales professionals use the Eloqua Platform to move
prospective buyers more efficiently through the marketing and sales funnel, identify and predict the drivers of revenue, provide insights about marketing and sales programs to senior management and more tightly align marketing and sales teams to
optimize resource allocation and drive revenue growth.
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
(703) 584-2750
www.eloqua.com
Oracle Corporation
is the world’s largest provider of enterprise software and a leading provider of computer hardware products and services. Oracle’s software, hardware systems, and services businesses develop,
manufacture, market, host and support database and middleware software, applications software and hardware systems, with the latter consisting primarily of computer server and storage products. Oracle’s businesses provide products and services
that are built upon industry standards, are engineered to work together or independently within existing customer information technology (IT) environments and run securely on a wide range of customer IT environments, including cloud computing
environments. Oracle’s secure, reliable and scalable product offerings are designed to improve business efficiencies at a low total cost of ownership. Oracle seeks to be an industry leader in each of the product offering categories in which it
competes and to expand into new and emerging markets.
Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
(650) 506-7000
www.oracle.com
OC Acquisition LLC
is a Delaware limited liability company and a wholly owned subsidiary of
Oracle. Parent is a holding company that owns the shares of certain entities recently acquired by Oracle.
OC Acquisition LLC
500 Oracle Parkway
Redwood City, California 94065
(650) 506-7000
Esperanza Acquisition Corporation
is a Delaware corporation and a wholly owned subsidiary of
Parent, and was formed solely for the purpose of facilitating Oracle’s acquisition of Eloqua. Merger Subsidiary has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection
with the transactions contemplated by the merger agreement. Upon consummation of the proposed merger, Merger Subsidiary will merge with and into Eloqua and will cease to exist.
Esperanza Acquisition Corporation
500 Oracle Parkway
Redwood City, California 94065
(650) 506-7000
22
THE MERGER
Background of the Merger
Our board of directors and management periodically review and revise our long-term strategy and objectives in light of developments in the markets in which we operate. Over the past several years, we have
considered a range of strategic alternatives with a view to increasing stockholder value, including accessing the public markets through an initial public offering, potential commercial and strategic business partnerships, potential acquisitions by
Eloqua, and a potential business combination transaction.
In August 2011, we filed a registration statement with the
Securities and Exchange Commission to commence the process for an initial public offering of our common stock. After weighing the potential advantages and disadvantages, our board of directors at that time determined that it was in the best
interests of our stockholders for Eloqua to become a public company in order to, among other things, raise capital to fund our growth strategies, increase the profile of our company, products and services, and establish a public trading market for
our stock. While we continued to work toward completing our initial public offering, the timing was delayed until later in 2012 due to a combination of market conditions and on-going developments in our business. During this time, the board and
management continued to consider and evaluate the best options for Eloqua and our stockholders given the risks associated with our long term business plan, including: our history of losses; our dependence on the acceptance of the Revenue Performance
Management, or RPM, market; the risk that our recent growth rates may not be indicative of future growth; and competition.
In
early 2012, a representative of a publicly-traded technology company (whom we refer to as Company A) contacted our chief executive officer and expressed an interest in exploring a potential strategic transaction with Eloqua. In March 2012, members
of our management team met with senior executives of Company A to assist Company A in better understanding our business, and we entered into a mutual non-disclosure agreement with Company A. Thereafter, we engaged in discussions with Company A
regarding a potential strategic transaction and provided Company A with confidential, non-public information regarding our company. In late April, Company A indicated that it was focused on other initiatives at that time and terminated discussions
with us regarding a potential strategic transaction.
On August 1, 2012, we priced our initial public offering in which
we sold 8,200,000 shares of our common stock, including 1,200,000 shares of common stock sold pursuant to the exercise of the underwriters’ over-allotment option, at a price of $11.50 per share before underwriting discounts and commissions. As
part of the offering, an additional 1,000,000 shares of common stock were sold by certain existing stockholders at a price of $11.50 per share before underwriting discounts and commissions. The initial public offering was completed on August 7,
2012.
In August 2012, a representative of Oracle contacted our chief executive officer to convey Oracle’s interest in a
potential strategic transaction. We entered into a confidentiality agreement with Oracle on August 15, 2012.
In early
September, our chief executive officer had meetings with a representative of a publicly-traded technology company (whom we refer to as Company B) and a representative of Company A to provide each of them with a general update regarding our business.
Neither of these meetings involved any discussion regarding a possible strategic transaction.
On September 6, 2012,
members of our management team, including our chief executive officer, gave a presentation to representatives of Oracle. The presentation included an overview of our company, products and technology, sales processes and customer service, as well as
a review of key financial highlights. Following the meeting, our chief executive officer updated our board members regarding a summary of the meeting. On September 17, 25 and 26, members of our management team had several follow-up meetings
with representatives of Oracle to discuss our business. Neither our representatives nor the Oracle representatives made any proposals during these meetings or otherwise discussed the specific terms of a potential strategic transaction.
23
On September 28, 2012, our chief executive officer spoke with a representative of
Oracle regarding next steps, and was informed that Oracle was currently focused on other initiatives and would get back to us when in a position to engage in further discussions. This information was shared with our board of directors, and our board
instructed our chief executive officer to maintain contact with Oracle.
From late September through mid-October 2012, our
chief executive officer had periodic, general and brief conversations with representatives of Oracle regarding a potential strategic transaction, but there was no discussion of price or any other specific terms of a possible transaction. During
these conversations, the Oracle representatives indicated that Oracle had ongoing interest in possibly acquiring Eloqua, but that they were not in a position to proceed with further discussions at that time.
On November 1, 2012, we filed a registration statement with the SEC with respect to the sale of up to 6,000,000 shares of common
stock by certain stockholders of our company, which included a portion of the shares held by members of our senior management and several stockholders affiliated with certain of our directors. Due to market conditions, we abandoned this offering on
November 15, 2012 with no shares being sold. Prior to our initial public offering, we entered into an investor rights agreement with the stockholders affiliated with certain of our directors that provides these stockholders with continuing
registration rights.
On November 19, 2012, our chief executive officer had a conversation with a representative of
Oracle during which the Oracle representative indicated that Oracle was interested in pursuing a strategic transaction with Eloqua. The parties did not discuss price or any other terms for a possible strategic transaction during this conversation.
On November 21, 2012, an Oracle representative contacted our chief executive officer and indicated that Oracle would be
sending a preliminary non-binding proposal to our chief executive officer at the end of the week that would outline Oracle’s non-binding proposed terms of a strategic transaction with Eloqua. Our chief executive officer informed our board of
directors of this development and indicated that he would convene a board meeting when such proposal was received.
Also on
November 21, 2012, our chief executive officer, after discussion with several of our directors, contacted a representative of Morgan Stanley & Co. LLC regarding the potential engagement of Morgan Stanley as our company’s financial
advisor in connection with a review of the company’s strategic alternatives, including the expected proposal from Oracle. We contacted Morgan Stanley with respect to the potential engagement due to that firm’s qualifications and industry
experience.
On November 23, 2012, we received a written, non-binding proposal from Oracle to acquire Eloqua for $22.50
per share in cash. The proposal was subject to completion of due diligence, negotiation of a definitive merger agreement, voting agreements being entered by our directors and officers and their affiliates, and an exclusive negotiation period through
the later of December 24, 2012 or seven days after we delivered written notice to Oracle that we no longer wished to pursue a potential strategic transaction. The letter indicated that the proposal would expire at 5:00 p.m., Pacific Time, on
November 27, 2012.
Later in the day, on November 23, 2012, our board of directors held a telephonic meeting to
consider Oracle’s initial non-binding proposal. In attendance at that meeting were all of the directors and, by invitation of the board, members of Eloqua’s management team and representatives of Eloqua’s outside counsel, Goodwin
Procter LLP. Our chief executive officer reviewed with the board his recent discussions with Oracle, and representatives of Goodwin Procter led a discussion concerning the fiduciary duties of the directors in the context of their consideration of
Oracle’s proposal. The directors agreed that they should review the proposal in the context of a broader review of Eloqua’s strategic alternatives, and that the board should engage a financial advisor to assist with such review. The board
then considered Morgan Stanley and several other investment banking firms, and determined to engage Morgan Stanley as Eloqua’s financial advisor to assist the board in its evaluation of the company’s strategic alternatives, including the
proposal from Oracle, subject to the satisfactory negotiation of an engagement letter with Morgan Stanley.
24
On November 25, 2012, we engaged Morgan Stanley as our financial advisor pursuant to a
formal engagement letter as authorized during the November 23, 2012 meeting of our board of directors.
On
November 27, 2012, our board of directors held a telephonic meeting to further discuss Eloqua’s strategic alternatives and Oracle’s initial proposal. In attendance at that meeting were all of the directors and, by invitation of the
board, members of Eloqua’s management team and representatives of Morgan Stanley and Goodwin Procter. At this meeting, the Morgan Stanley representatives reviewed the terms of Oracle’s proposal, including the premium represented by the
$22.50 offer price and the implied revenue multiples as compared to software as a service, or SaaS, transactions with equity values in excess of $500 million from 2008 to present. It was noted that the implied revenue multiple at a price of $22.50
per share compared favorably to revenue multiples in these precedent transactions. Although the price proposed by Oracle was within a range of valuation that appeared to provide substantial value for our stockholders, the board discussed with Morgan
Stanley how to best maximize stockholder value and various strategic alternatives, including: (1) a stand-alone strategy; (2) an upstream strategic transaction, such as the proposed transaction with Oracle or another strategic acquiror
looking to add a cloud platform; (3) acquisitions to build scale; and (4) a potential merger with a vendor that has a complementary product footprint. After discussion of these alternatives, the board decided to focus on further exploring
alternatives (1) and (2), and engaged in a general discussion concerning whether and at what point it might be advisable to approach and explore a potential strategic transaction with third parties other than Oracle. In particular, the board
discussed potential disruptions to our business of a protracted process, the risk of leaks that might arise from making contact with other parties in the industry, and the potential impact on our business of such leaks, including the loss of
customers, partners and employees. Based on the benefits and risks discussed, the board concluded that approaching potential strategic partners would be prudent and in the best interests of Eloqua stockholders, but that only those companies that the
board determined to be the most likely to be interested in such a transaction and have the ability to consummate a transaction should be approached.
In determining the potential likely strategic partners, the board reviewed a list of seven publicly-traded technology companies prepared by Morgan Stanley and considered a variety of factors, including:
each company’s potential interest to enter into a strategic transaction with Eloqua given such company’s industry position and perceived strategic priorities; such company’s financial strength and resources to pursue and consummate a
strategic transaction in a timely manner; and such company’s experience in completing large transactions such as the one being proposed by Oracle. No financial buyers were included on the list due to perceived low probability that a financial
buyer would submit a competitive proposal given the implied valuation multiples and the lack of potential synergies. The list included Oracle and Company A, who were noted as likely having the greatest interest in Eloqua due to their business goals,
the potential synergy opportunities, and their potential ability to quickly evaluate and complete a transaction. The other potential strategic partners included Company B and four other publicly-traded technology companies (whom we refer to as
Company C, D, E and F). With regard to these other potential strategic partners, the board determined, following discussion with Morgan Stanley, that: (1) although Company B could potentially have interest in a strategic transaction with
Eloqua, there would not be the same strategic fit as with Oracle and Company A, Company B was not expected to move as quickly as Oracle or Company A, and a transaction of this size also could be a challenge for Company B given its size and cash
resources; (2) although Company C could potentially have interest in a strategic transaction with Eloqua, there would not be the same strategic fit as with Oracle and Company A and Company C was not expected to move as quickly as Oracle or
Company A; (3) Company D was unlikely to have interest in a strategic transaction with Eloqua due to its perceived focus on other strategic areas; (4) Company E was unlikely to have interest in a strategic transaction with Eloqua due to
its perceived focus on other strategic areas, and a transaction of this size also could be a challenge for Company E given its size and cash resources; and (5) there were significant commercial risks in approaching Company F, including
potential disruptions to our business, the risk of leaks and the risk of loss of customers and employees. Based on the discussion at the meeting, the board authorized Morgan Stanley and our chief executive officer to continue discussions with Oracle
regarding a potential strategic transaction, seeking to have Oracle increase its proposed price of $22.50 per share. The board also authorized Morgan Stanley and our chief executive officer to simultaneously approach Company A and Company C to
determine whether they had any interest in discussing a potential strategic transaction with
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Eloqua, with plans to revisit whether to contact Company B and Company F after collecting further feedback from Oracle, Company A and Company C. The board determined that Company D and Company E
should not be contacted for the reasons described above.
Following the meeting of our board of directors, on
November 27, 2012, our chief executive officer contacted a representative of Company A to discuss whether Company A would have any interest in a strategic transaction with Eloqua, noting that Eloqua had received a proposal from a third party.
The representative of Company A indicated that Company A continued to have strategic interest in Eloqua following the discussions between the parties earlier in the year and that he would discuss the opportunity internally. Our chief executive
officer offered to provide additional information or to schedule meetings to facilitate Company A’s review of the opportunity.
On November 28, 2012, representatives of Morgan Stanley contacted a representative from Oracle to inform such representative that our board of directors perceived the proposed price of $22.50 per
share as low. The representatives of Morgan Stanley offered to provide Oracle with additional information in order for Oracle to more fully understand the value of our company and to potentially improve its proposal. The representative of Oracle
indicated that they had sufficient information about our company, believed that their offer was at a high valuation, and wanted to move quickly.
Also on November 28, 2012, representatives of Morgan Stanley contacted the representative from Company A to further discuss the strategic opportunity and indicate that the strategic alternatives
process could move quickly. On the same day, our chief executive officer and representatives of Morgan Stanley contacted representatives of Company C to discuss whether Company C would have any interest in a strategic transaction with Eloqua, noting
that Eloqua had received a proposal from a third party. Our chief executive officer offered to provide additional information or to schedule meetings to facilitate Company C’s review of the opportunity. The representatives of Company C
indicated that they would discuss the opportunity internally.
On November 29, 2012, our chief executive officer and
representatives of Morgan Stanley further discussed the strategic opportunity with a representative of Company A.
Also on
November 29, 2012, our board of directors held a telephonic meeting to further discuss Eloqua’s strategic alternatives and Oracle’s proposal. In attendance at that meeting were all of the directors and, by invitation of the board,
members of Eloqua’s management team and representatives of Morgan Stanley and Goodwin Procter. At this meeting, our chief executive officer and representatives of Morgan Stanley reported Oracle’s response to the board’s feedback on
the initial proposal, as well as the responses received to date from Company A and Company C. The directors noted that there was a regularly scheduled board meeting on December 5, 2012, and asked the Morgan Stanley representatives and our chief
executive officer to seek to have Oracle increase its proposed price in advance of that meeting and to also request that Company A provide a specific proposal and more visibility into their decision-making process. In addition, the board considered
again whether to approach Company B and Company F regarding a potential strategic transaction and determined that it was appropriate to contact Company B given the continuing discussions with Oracle and the potential interest of the other companies
contacted to date, but again determined not to contact Company F given the potential risks to our business.
On
November 30, 2012, our chief executive officer contacted a representative of Oracle to further discuss Oracle’s initial proposal. Our chief executive officer noted that the price was unacceptable to the board and again offered to provide
additional information or to schedule further meetings to facilitate Oracle increasing its proposed price. He also told the Oracle representative that the board had a meeting scheduled for December 5, 2012, at which the board could consider a
revised proposal from Oracle. The representative of Oracle stated that Oracle had sufficient information about our company, noted that Oracle’s initial proposal was at a high valuation, and indicated that Oracle was considering other strategic
opportunities, including other acquisitions in the RPM
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market, building out its own RPM platform and distributing a third party’s RPM platform. The representative from Oracle further indicated that Oracle was not going to revise its proposal in
advance of our board meeting, and requested that the board provide a counter-proposal on price after the meeting.
Also on
November 30, 2012, Oracle provided preliminary due diligence request lists to Morgan Stanley in the event that the parties decided to further explore a possible transaction on a more detailed basis.
On December 3, 2012, representatives of Morgan Stanley contacted a representative of Company B to determine whether Company B would
have any interest in a strategic transaction with Eloqua, noting that Eloqua had received a proposal from a third party. The Morgan Stanley representatives offered to provide additional information or to schedule meetings to facilitate Company
B’s review of the opportunity. The representative of Company B indicated that they were familiar with our company and would discuss the opportunity internally.
Also on December 3, 2012, members of our management team and representatives of Morgan Stanley met with
representatives of Company A to provide the representatives of Company A with a detailed overview of our company. During this meeting, we provided Company A with presentation materials that included confidential, non-public information under our
existing non-disclosure agreement, but no other due diligence materials were exchanged. The Morgan Stanley representatives in attendance informed the representatives of Company A as to the timing of discussions and requested a status update prior to
our board meeting scheduled for December 5, 2012. The representatives of Company A indicated that they had a board meeting scheduled for December 11, 2012 and it would be unlikely that Company A would provide any definitive feedback prior
to that time.
On December 4, 2012, Company B indicated to representatives of Morgan Stanley that, after internal
discussion and review of their strategic priorities, Company B was not interested in pursuing discussions regarding a strategic transaction with Eloqua.
On December 5, 2012, our board of directors held a regularly scheduled, in-person meeting in Burlingame, California. In attendance at that meeting were all of the directors and, by invitation of the
board, members of Eloqua’s management team and representatives of Morgan Stanley and Goodwin Procter. At this meeting, the board discussed the business and financial prospects of our company and the perceived risks associated with continuing
the company’s operations on a stand-alone basis, including the growth and scale required to compete and accomplish our strategic objectives. The board also discussed: the business environment for SaaS companies generally, including the
continuing consolidation in the industry; the business environment for the RPM market in particular, including the growing interest of large, well-capitalized competitors in the RPM market; and the likelihood of our business and strategic plans
being able to drive continued revenue growth and profitability in light of this business environment, noting in particular that management expected our revenue growth rate to decline in 2013 and such growth rate could continue to decline and that we
did not expect to achieve profitability until at least 2014. Also at this meeting, our chief executive officer and representatives of Morgan Stanley reported on the discussions to date with Oracle, Company A, Company B and Company C regarding a
potential strategic transaction with Eloqua. In particular, it was noted that, with respect to the discussions with Oracle, Oracle had not increased the price in its initial proposal and Oracle representatives had expressed displeasure with the
length of the process, had indicated that they were evaluating other strategic opportunities in the RPM market, and were looking for a proposal on price from the board after the meeting. It also was noted that, despite efforts by both Morgan Stanley
and our chief executive officer, Company A was not accelerating its internal process, and as a result, it was possible that Oracle would require a final decision by the board before we received a definitive reaction from Company A regarding its
interest in a possible strategic transaction. To assist the board in evaluating Oracle’s proposal and a potential proposal back to Oracle on price, the representatives of Morgan Stanley provided a review of management and analyst forecasts and
a preliminary valuation analysis, including a review of historical trading ranges and public trading comparables, a discounted equity valuation, and a precedent transaction analysis. The representatives of Goodwin Procter reviewed the fiduciary
duties of the directors in connection with considering its strategic alternatives, including a potential sale of Eloqua. The board also revisited whether to approach Company F regarding a potential strategic transaction and, after further discussion
and deliberation, again determined not to do so for the same reasons discussed previously. After
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discussion of these matters, our board authorized Morgan Stanley and our chief executive officer to continue discussions with Oracle regarding a potential strategic transaction with a proposed
price of $26.00 per share, and to convey to Oracle that certainty of completing a transaction was also important to the board’s evaluation of any proposal.
Following the meeting of our board of directors, on December 5, 2012, our chief executive officer contacted a representative of Oracle to communicate that our board would support a strategic
transaction at a price of $26.00 per share and to request that he have the opportunity to meet with a senior executive at Oracle to confirm Oracle’s commitment to the proposed transaction. Representatives of Morgan Stanley made a follow-up call
to the Oracle representative to further discuss valuation.
On December 6, 2012, Company C indicated to representatives
of Morgan Stanley that Company C was not interested in pursuing discussions regarding a strategic transaction with Eloqua.
Also on December 6 and 7, 2012, our chief executive officer had telephone conversations with two senior executives at Oracle who
expressed executive support of the proposed transaction and Oracle’s focus on reaching agreement in the near term. Although current valuation positions for the transaction were mentioned, the parties did not negotiate the price or any other
terms for a possible strategic transaction during these calls.
On December 7, 2012, our chief executive officer and
representatives of Morgan Stanley discussed the situation and related timing issues with a representative of Company A. The representative of Company A indicated that the board meeting scheduled for December 11, 2012 was intended to include
obtaining support for entering the RPM market through an acquisition of Eloqua. During this discussion, the Morgan Stanley representatives reiterated that the process was moving quickly, and noted the possibility that Eloqua could enter into
exclusive negotiations with another party before December 11, 2012.
Later in the day, on
December 7, 2012, Oracle submitted a revised indication of interest for $23.50 per share in cash, with a request for an exclusive negotiation period through the later of December 31, 2012 or seven days after we delivered written notice to
Oracle that we no longer wished to pursue a potential strategic transaction. Following receipt of the revised non-binding proposal, our chief executive officer had a telephone call with a representative of Oracle who indicated that Oracle had
stretched as far as they could on price. The Oracle representative also noted that the proposal would expire at 5:00 p.m., Pacific Time, on December 9, 2012, given Oracle’s desire to announce a potential transaction with Eloqua prior to
the holidays or to pursue another alternative if agreement could not be reached.
On December 8, 2012, our board of
directors held a telephonic meeting to discuss Oracle’s revised proposal and the status of discussions with Company A. In attendance at that meeting were all of the directors and, by invitation of the board, members of Eloqua’s management
team and representatives of Morgan Stanley and Goodwin Procter. At this meeting, our chief executive officer and representatives of Morgan Stanley reported on their recent discussions with representatives of Oracle and Company A, including the
conversations between our chief executive officer and several senior executives of Oracle. The board agreed that the increased price proposed by Oracle appeared to provide substantial value for Eloqua stockholders, particularly in light of the
execution risks in Eloqua’s strategic business plan as well as in our industry and markets more generally. The board also discussed: (1) Oracle’s request for a period of exclusive negotiation, and it was the general consensus of the
directors that exclusivity, if granted, should have a short term; (2) the risk of Oracle terminating discussions if exclusive negotiations were not entered into by December 9, 2012; (3) the lack of commitment that Company A had shown
with respect to the process, including the refusal to accelerate its internal timeline and the perceived lack of focus from the most senior executives at Company A; and (4) Company A’s lack of specific guidance on whether it would be
providing a proposal and, if so, at what price range. After discussion of these matters, the board authorized our chief executive officer and the representatives of Morgan Stanley to propose to Oracle a strategic transaction with a price of $24.50
per share and to negotiate the terms of the exclusivity agreement, assuming agreement (subject to due diligence and definitive agreements) could be reached on price,
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to provide for a shorter period with a definitive termination date. The board also requested that our chief executive officer and representatives of Morgan Stanley contact Company A to see if
they could provide more definitive guidance prior to Oracle’s December 9, 2012 deadline.
Following the meeting of
our board of directors, on December 8, 2012, representatives of Morgan Stanley contacted a representative of Company A to discuss a potential strategic transaction and related timing issues. During this conversation, the Morgan Stanley
representatives reiterated that Eloqua could enter into exclusive negotiations with another party by the end of the weekend and in advance of Company A’s scheduled board meeting on December 11, 2012.
Also on December 8, 2012, Morgan Stanley representatives contacted a representative of Oracle and indicated that the board would be
supportive of a strategic transaction at a price of $24.50 per share with an exclusive negotiation period to expire on December 24, 2012. Thereafter, Goodwin Procter and Oracle’s counsel negotiated the terms of the exclusivity letter
between Oracle and Eloqua, including an exclusive negotiation period with an expiration date of December 28, 2012. Oracle subsequently responded that it was not willing to increase its proposed price of $23.50 per share and, if agreement
providing for exclusive negotiations was not reached by the December 9, 2012 deadline, Oracle would terminate discussions and move on to other opportunities.
On December 9, 2012, our chief executive officer contacted a representative of Company A to see if he could obtain any further feedback from Company A to share with our board of directors later in
the day. No further information regarding the likelihood or parameters of an offer was provided by Company A.
Also on
December 9, 2012, our board of directors held a telephonic meeting to discuss the status of discussions with Oracle and Company A. In attendance at that meeting were all of the directors and, by invitation of the board, members of Eloqua’s
management team and representatives of Morgan Stanley and Goodwin Procter. At this meeting, our chief executive officer and representatives of Morgan Stanley reported on their recent discussions with representatives of Oracle and Company A, and
representatives of Goodwin Procter commented on the terms of the exclusivity letter. The board also discussed the risk of Oracle terminating discussions at the end of the day if the process were extended to accommodate Company A’s internal
timeline. After an extensive discussion of these matters, the board authorized our chief executive officer to execute the exclusivity letter with Oracle at a price of at least $23.50 per share and an exclusive negotiation period through
December 28, 2012. In doing so, the board noted that: (1) the $23.50 per share price represented a significant premium to both our current trading price and our IPO price, and an increase from the price in Oracle’s initial proposal;
(2) Oracle had indicated that it would terminate discussions and move on to other opportunities if agreement was not reached by the end of the day; (3) Oracle had indicated that it was looking at other strategic opportunities in the RPM
market and, if Oracle entered the RPM market, it would mean not only the loss of one of the most likely acquirors of our company, but also add risk to our stand-alone business plan due to the increased competition for our products and services;
(4) the exclusivity letter had been successfully negotiated to provide for, among other things, a short exclusivity period with a definitive termination date; (5) Company A had not made any reasonable assurances that they would enter into
a strategic transaction with Eloqua on an expeditious manner, if at all, and had not provided a price range for a potential proposal even though requested to do so; (6) Company A was unwilling to accelerate its internal process even though it
had been fully disclosed to Company A that we might enter into an exclusive negotiation period by the end of the weekend; (7) the perceived lack of focus from the most senior executives at Company A; and (8) no other parties contacted
during the process expressed an interest in pursuing a strategic transaction with us. The board requested that prior to executing the exclusivity letter, the representatives of Morgan Stanley and our chief executive officer have a final discussion
with the representative of Oracle to see if Oracle would increase the price to $24.00 per share or otherwise confirm that $23.50 was indeed Oracle’s “best and final” proposal.
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Following the board meeting, on December 9, 2012, our chief executive officer had a
conversation with a representative of Oracle during which he asked Oracle to increase the proposed price to $24.00 per share. The Oracle representative informed our chief executive officer that $23.50 represented Oracle’s best and final
proposal and again indicated that Oracle was prepared to terminate discussions and move on to other opportunities if an agreement to enter into exclusive negotiations was not reached by the end of the day. Later in the day, Eloqua and Oracle
executed the exclusivity letter with an exclusive negotiation period through December 28, 2012.
Between
December 10, 2012 and December 19, 2012, representatives of Eloqua and Oracle, their respective legal advisors, Goodwin Procter and Weil, Gotshal & Manges, LLP, together with representatives of Morgan Stanley, negotiated the terms
of the definitive merger agreement (including our ability to respond to unsolicited inquiries following the announcement of the transaction and our right to terminate the merger agreement to accept a superior proposal) and the voting agreements, and
Oracle conducted business and legal due diligence on Eloqua.
On December 11, 2012, Company A contacted a representative
of Morgan Stanley and indicated that there was no need for a conversation as Company A was not going to do anything further with respect to Eloqua.
On December 18, 2012, our board of directors held a telephonic meeting to discuss the proposed terms of the transaction and the status of discussions with Oracle. In attendance at that meeting were
all of the directors and, by invitation of the board, members of Eloqua’s management team and representatives of Morgan Stanley and Goodwin Procter. Representatives of Morgan Stanley reviewed with the board its preliminary analysis of the
consideration offered in the proposed transaction from a financial point of view, including a review of historical trading ranges, analyst price targets and public trading comparables, a discounted cash flow analysis, a discounted equity valuation,
and a precedent transactions analysis. Representatives of Goodwin Procter again reviewed the fiduciary duties of the directors in connection with a potential sale of Eloqua, and discussed in detail the material terms of the proposed merger agreement
and form of voting agreement. The board asked numerous questions of management, Morgan Stanley and Goodwin Procter, and discussed the advantages and risks of the proposed transaction as described in the section entitled “—Reasons for the
Merger and Recommendation of our Board of Directors”. Management and the representatives of Morgan Stanley and Goodwin Procter also reviewed the process to date, including Company A’s communication to Morgan Stanley on December 11,
2012 and the fact that the other parties contacted during the process had indicated that they did not wish to pursue a strategic transaction with Eloqua at this time, and the proposed timing for a transaction with Oracle.
On December 19, 2012, our board of directors held a meeting via videoconference to discuss the final terms of the transaction and
the proposed definitive merger agreement and related documents. In attendance at that meeting were all of the directors and, by invitation of the board, members of Eloqua’s management team and representatives of Morgan Stanley and Goodwin
Procter. Representatives of Morgan Stanley reviewed with the board its updated and final analysis of the consideration offered in the proposed transaction from a financial point of view. Morgan Stanley then delivered to our board its oral opinion,
subsequently confirmed in writing, that as of December 19, 2012, and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth in the written opinion, the consideration to be received by
the holders of shares of our common stock (other than shares held in treasury or held by Oracle or any subsidiary of Eloqua or Oracle or shares as to which dissenters’ rights have been perfected) pursuant to the merger agreement was fair, from
a financial point of view, to such holders. The full text of the opinion of Morgan Stanley, dated as of December 19, 2012, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and
qualifications of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated by reference in its entirety in this proxy statement (see also the section entitled
“—Opinion of Eloqua’s Financial Advisor”). Goodwin Procter again reviewed with the board its fiduciary duties and provided an update on the terms of the proposed merger agreement and form of voting agreement, copies of which were
provided to the directors prior to the meeting. Following these presentations and after discussion, the board unanimously approved the merger agreement. The board also deemed it advisable, and in the best interests of
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Eloqua and our stockholders, to consummate the merger and the other transactions contemplated by the merger agreement, on the terms and subject to the conditions set forth in the merger
agreement, and to recommend that our stockholders adopt the merger agreement. Finally, management and the representatives of Morgan Stanley and Goodwin Procter advised the board regarding the likely timing for execution of a definitive agreement and
public announcement of the transaction and a projected closing timetable.
Later in the day, on December 19, 2012, the
merger agreement was executed, and all signatories to the voting agreements executed such agreements.
On December 20,
2012, before the U.S. stock markets opened, Eloqua and Oracle jointly announced the execution of the merger agreement.
Reasons for the Merger and Recommendation of our Board of Directors
Reasons for the Merger
During the course of its deliberations on the merger, our board of directors held numerous meetings and consulted with our senior
management, financial advisor and legal counsel, and reviewed, evaluated and considered numerous factors and a significant amount of information and data, including the following:
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information concerning our business, financial performance (both past and prospective) and our financial condition, results of operations (both past
and prospective), business and strategic objectives, as well as the risks of accomplishing those objectives;
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our business and financial prospects if we were to remain an independent company, and the growth and scale required to effectively compete in our
industry;
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the possible alternatives to the merger (including the option of continuing to operate our business independently), the timing and likelihood of
accomplishing the business plans and strategic objectives of those alternatives, and potential benefits and risks of those alternatives;
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the results of our discussions with certain third parties that would reasonably be expected to have interest in acquiring Eloqua relating to a possible
strategic transaction with us, and our ability under the terms of the merger agreement to negotiate with third parties concerning certain unsolicited competing acquisition proposals if we receive such a proposal during the pendency of the merger;
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the terms of the merger agreement that would reasonably be expected to have an impact on the likelihood we will receive an unsolicited competing
acquisition proposal during the pendency of the merger (including the termination fees that would be payable); and
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the other terms of the merger agreement, including the parties’ representations, warranties and covenants, the conditions to their respective
obligations and the termination rights of the parties.
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In reaching its decision to approve the merger
agreement and the merger, and to recommend that our stockholders adopt the merger agreement, our board of directors determined that the following were positive reasons to support the merger agreement and the merger:
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the value of the consideration to be received by our stockholders in the merger pursuant to the merger agreement;
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the fact that the merger consideration of $23.50 per share to be received by our stockholders in the merger represents a 31% premium to the closing
price of our common stock on December 19, 2012 (the day preceding the public announcement of the merger), a 30% premium to the average closing price of our common stock during the 30 trading days prior to the public announcement of the merger,
and a 104% premium to the price of our common stock, before underwriters’ commissions and discounts, in our August 2012 initial public offering;
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the fact that, with respect to precedent SaaS transactions with equity values in excess of $500 million from 2008 to present, the multiple of our
revenue represented by the merger consideration of $23.50 per share compared favorably to multiples of revenue represented by the consideration paid in such precedent SaaS transactions and was the second highest multiple paid;
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the financial presentation and oral opinion of Morgan Stanley rendered to our board of directors, subsequently confirmed in writing, that as of
December 19, 2012, and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth in the written opinion, the consideration to be received by the holders of shares of our common stock (other
than shares (1) held in treasury, (2) held by any subsidiary directly or indirectly owned by us, (3) held by Oracle, Merger Subsidiary, or any of their respective direct or indirect wholly owned subsidiaries, or (4) as to which dissenters’
rights have been perfected) pursuant to the merger agreement was fair, from a financial point of view, to such holders (the full text of the opinion of Morgan Stanley, dated as of December 19, 2012, which sets forth, among other things, the
assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated by reference in this
proxy statement in its entirety) (see also the section entitled “—Opinion of Eloqua’s Financial Advisor”);
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the belief of our board of directors that the merger consideration of $23.50 per share to be received by our stockholders in the merger provides
greater certainty of value (and less risk) to our stockholders relative to the potential trading price of our common stock over a longer period of time after accounting for the long-term risks to our business resulting from operational execution
risk and evolving industry dynamics, noting in particular the continuing consolidation in the SaaS industry, the growing interest of large, well-capitalized competitors in the RPM market, the expected decline in our revenue growth rate in 2013 and
the risk that such growth rate would continue to decline, and our lack of profitability;
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the form of merger consideration, consisting solely of cash, which provides certainty of value to our stockholders;
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the likelihood that the proposed acquisition would be consummated, in light of the experience, reputation and financial capabilities of Oracle;
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the process through which Eloqua, with the assistance of its financial advisor, engaged in or sought to engage in discussions with other companies
believed to be the most likely candidates to pursue a business combination with or acquisition of Eloqua;
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the belief of our board of directors that, after extensive negotiations with Oracle and its representatives, we had obtained the highest price per
share that Oracle was willing to pay and the highest price obtainable on the date of signing of the merger agreement;
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the merger agreement provides our board of directors with flexibility to furnish information to and conduct negotiations with third parties in certain
circumstances and, upon payment to Oracle of a termination fee of $31.5 million (which our board of directors believes is reasonable under the circumstances), to terminate the merger agreement to accept a superior proposal;
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the other terms and conditions of the merger agreement, including, among other things: the size of the termination fee and the circumstances when that
fee may be payable; the limited number and nature of the conditions to Oracle’s obligation to complete the merger, including the absence of a financing condition and the adequacy of Oracle’s capital resources to pay the merger
consideration; and the definition of “material adverse effect” and the exceptions for what constitutes a material adverse effect for purposes of the merger agreement; and
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the fact that the voting agreements with our directors and executive officers and their affiliates terminate in the event that we terminate the merger
agreement, which permits those persons to support a transaction involving a superior proposal.
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In the course of its deliberations, our board of directors also considered, among other
things, the following negative factors:
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the fact that our stockholders will not participate in any future growth potential or benefit from any future increase in the value of our company;
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the possibility that the merger will not be consummated and the potential negative effect of the public announcement of the merger on our sales,
operating results and stock price, our ability to retain key management, sales and marketing, technical and other personnel, and our relationships with customers, vendors and other commercial partners;
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the restrictions on the conduct of our business prior to the completion of the merger, requiring us to conduct our business in the ordinary course and
preventing us from taking certain specified actions, subject to specific limitations, all of which may delay or prevent us from undertaking business opportunities pending completion of the merger;
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the risk of diverting management’s focus and resources from other strategic opportunities and from operational matters while working to implement
the merger, and the possibility of other management and employee disruption associated with the merger, including the possible loss of key management, sales and marketing, technical or other personnel;
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the conditions to Oracle’s obligation to complete the merger and the right of Oracle to terminate the merger agreement under certain
circumstances;
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the possibility that we may be obligated to pay Oracle a termination fee of $31.5 million or reimburse Oracle for its expenses if the merger agreement
is terminated under certain circumstances;
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the fact that the merger consideration consists of cash and will therefore be taxable to our stockholders who are subject to taxation for U.S. federal
income tax purposes; and
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the interests that certain of our directors and executive officers may have with respect to the merger, in addition to their interests as stockholders
of Eloqua generally, as described in the section entitled “—Interests of Eloqua’s Directors and Executive Officers in the Merger”.
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The preceding discussion of the information and factors considered by our board of directors is not, and is not intended to be, exhaustive. In light of the variety of factors considered in connection with
its evaluation of the merger and the complexity of these matters, our board of directors did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its
determination. In addition, our board of directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate determination of our
board of directors, but rather our board of directors conducted an overall analysis of the factors described above, including discussions with and questioning of our senior management, legal counsel and financial advisor.
Board of Directors Recommendation
After careful consideration, our board of directors has unanimously approved the merger agreement and declared that the merger agreement, the merger and the other transactions contemplated by the merger
agreement are advisable and in the best interests of Eloqua stockholders.
Accordingly, our board of directors unanimously recommends that our stockholders approve the proposal to adopt the merger agreement and that you vote “FOR” the
proposal to adopt the merger agreement at the special meeting.
Opinion of Eloqua’s Financial Advisor
We retained Morgan Stanley to provide us with financial advisory services in connection with our consideration of
strategic alternatives, including a potential sale of Eloqua, and to render a financial opinion in
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connection with a possible sale, merger or other strategic business combination. Our board of directors selected Morgan Stanley to act as our financial advisor based on Morgan Stanley’s
qualifications, expertise and reputation, its knowledge of and involvement in recent transactions in our industry, and its knowledge of our business and affairs. At the meeting of our board of directors on December 19, 2012, Morgan Stanley
rendered its oral opinion, subsequently confirmed in writing, that as of December 19, 2012, and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth in the written opinion, the $23.50
per share in cash to be received by the holders of shares of Eloqua common stock (other than shares (1) held in treasury, (2) held by any subsidiary directly or indirectly wholly owned by us, (3) held by Oracle, Merger Subsidiary, or
any of their respective direct or indirect wholly owned subsidiaries, or (4) as to which dissenters’ rights have been perfected, all of which we refer to as excluded shares) pursuant to the merger agreement was fair from a financial point
of view to such holders.
The full text of the written opinion of Morgan Stanley, dated as of December 19, 2012, is
attached to this proxy statement as Annex B. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion.
We encourage you to read the entire opinion carefully and in its entirety. Morgan Stanley’s opinion is directed to our board of directors and addresses only the fairness from a financial point of view of the consideration to be received by the
holders of shares of Eloqua common stock (other than the holders of the excluded shares) pursuant to the merger agreement as of the date of the opinion. It does not constitute a recommendation to any holder of Eloqua common stock as to how to vote
at any stockholders’ meeting held in connection with the merger or whether to take any other action with respect to the merger. The summary of the opinion of Morgan Stanley set forth below is qualified in its entirety by reference to the full
text of the opinion.
In connection with rendering its opinion, Morgan Stanley, among other things:
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reviewed certain publicly available financial statements and other business and financial information of our company;
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•
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reviewed certain internal financial statements and other financial and operating data concerning our company;
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•
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reviewed certain financial projections prepared by our management;
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•
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discussed the past and current operations and financial condition and the prospects of Eloqua with our senior executives;
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•
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reviewed the reported prices and trading activity for Eloqua common stock;
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•
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compared our financial performance and the prices and trading activity of Eloqua common stock with that of certain other publicly-traded companies
comparable with our company and our securities;
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•
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reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;
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•
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participated in discussions and negotiations among representatives of our company, Oracle, and their legal advisors;
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•
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reviewed the merger agreement and certain related documents; and
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•
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performed such other analyses and reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate.
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In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the
accuracy and completeness of the information that was publicly available or supplied or otherwise made available to Morgan Stanley by us and formed a substantial basis for its opinion. With respect to the financial projections, Morgan Stanley
assumed that they had been reasonably prepared on bases reflecting the best
34
currently available estimates and judgments of our management of the future financial performance of Eloqua. In addition, Morgan Stanley assumed that the merger will be consummated in accordance
with the terms set forth in the merger agreement without any material waiver, amendment or delay of any terms or conditions, and that the definitive merger agreement will not differ in any material respect from the final draft furnished to Morgan
Stanley. Morgan Stanley assumed that, in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed merger, no delays, limitations, conditions or restrictions will be imposed
that would have a material adverse effect on the contemplated benefits expected to be derived in the proposed merger. Morgan Stanley is not a legal, tax or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without
independent verification, the assessment of Eloqua and its legal, tax or regulatory advisors with respect to legal, tax or regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the
compensation to any of our officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of shares of Eloqua common stock (other than the holders of the excluded shares) in the merger.
Morgan Stanley did not make any independent valuation or appraisal of our assets or liabilities, nor was Morgan Stanley furnished with any such appraisals. Morgan Stanley’s opinion was necessarily based on financial, economic, market and other
conditions as in effect on, and the information made available to Morgan Stanley as of, December 19, 2012. Events occurring after December 19, 2012 may affect Morgan Stanley’s opinion and the assumptions used in preparing it, and
Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion.
Summary of Financial Analyses
The following is a brief summary of the material analyses performed by Morgan Stanley in connection with its oral opinion and the
preparation of its written opinion letter dated December 19, 2012. The following summary is not a complete description of Morgan Stanley’s opinion or the financial analyses performed and factors considered by Morgan Stanley in connection
with its opinion, nor does the order of analyses described represent the relative importance or weight given to those analyses. The various analyses summarized below were based on the closing price of $17.92 per share of Eloqua common stock as of
December 19, 2012, the last full trading day prior to the meeting of our board of directors to consider and approve, adopt and authorize the merger agreement. Some of these summaries of financial analyses include information presented in
tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses.
Trading Range Analysis.
Morgan Stanley performed a trading range analysis with respect to the historical share prices of Eloqua common stock. Morgan Stanley reviewed the range of closing prices of Eloqua common stock for various
periods ending on December 19, 2012. Morgan Stanley observed the following:
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Period Ending December 19, 2012
|
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Range of Closing
Prices
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Last 1 Month
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$
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16.94 – 18.88
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Last 3 Months
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$
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16.94 – 24.65
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Morgan Stanley observed that Eloqua common stock closed at $17.92 on December 19, 2012 (the last
full trading day prior to the announcement of the execution of the merger agreement). Morgan Stanley noted that the consideration per share of Eloqua common stock of $23.50 pursuant to the merger agreement reflected a 31% premium to the closing
price per share of Eloqua common stock on December 19, 2012, a 30% premium to the average closing price per share of Eloqua common stock for the 30 days prior to and including December 19, 2012, and a 21% premium to the average closing
price per share of Eloqua common stock for the 60 days prior to and including December 19, 2012.
35
Equity Research Analysts’ Future Price Targets
Morgan Stanley reviewed and analyzed future public market trading price targets for Eloqua common stock prepared and published by equity
research analysts prior to December 19, 2012. These one year forward targets reflected each analyst’s estimate of the future public market trading price of Eloqua common stock and were not discounted to reflect present values. The range of
undiscounted analyst price targets for Eloqua common stock was $24.00 to $27.00 per share as of December 19, 2012, and Morgan Stanley noted that the median undiscounted analyst price target was $25.00 per share. The range of analyst price
targets per share for Eloqua common stock, discounted for one year at a rate of 10.5%, which is the mid-point of the range of discount rates from 9% to 12% selected by Morgan Stanley, upon the application of its professional judgment, to reflect our
weighted average cost of capital, was $21.72 to $24.43 per share as of December 19, 2012, and Morgan Stanley noted that the median discounted analyst price target was $22.62 per share.
Morgan Stanley noted that the consideration to be received by holders of shares of Eloqua common stock pursuant to the merger agreement
is $23.50 per share.
The public market trading price targets published by equity research analysts do not necessarily reflect
current market trading prices for Eloqua common stock and these estimates are subject to uncertainties, including the future financial performance of Eloqua and future financial market conditions.
Public Trading Comparables Analysis
Morgan Stanley performed a public trading comparables analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded. Morgan Stanley
compared certain financial estimates for our company with comparable publicly available consensus estimates for selected companies that share similar business characteristics such as those that provide software as a service and have certain
comparable operating characteristics including, among other things, similarly sized revenue and/or revenue growth rates, market capitalizations, profitability, scale and/or other similar operating characteristics (we refer to these companies as the
comparable companies). These companies were the following:
Selected Software as a Service Companies
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•
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Concur Technologies, Inc.
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•
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Cornerstone OnDemand, Inc.
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36
|
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•
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The Ultimate Software Group, Inc.
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For
purposes of this analysis, Morgan Stanley analyzed the ratio of aggregate value, which Morgan Stanley defined as fully diluted market capitalization plus total debt less cash and cash equivalents, to estimated revenue for calendar years 2012 and
2013, of each of these companies for comparison purposes.
Based on its analysis of the relevant metrics for each of the
comparable companies and upon the application of its professional judgment, Morgan Stanley selected representative ranges of revenue multiples and applied these ranges of multiples to the estimated revenue multiples for our company. For purposes of
this analysis and other analyses described below, Morgan Stanley utilized two sources of estimated revenue for our company for calendar years 2012 and 2013. Morgan Stanley utilized publicly available estimates of revenue prepared by equity research
analysts, available as of December 19, 2012, which we refer to as the street case. Morgan Stanley also utilized revenue estimates prepared by our management over the same time period, which we refer to as the management case, which is more
fully described in the section entitled “—Certain Prospective Financial Information”.
Based on the outstanding
shares of Eloqua common stock on a fully diluted basis (including outstanding options and warrants) as of December 19, 2012, Morgan Stanley calculated the estimated implied value per share of Eloqua common stock as of December 19, 2012 as
follows:
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Calendar Year Financial Statistic
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Comparable
Company
Multiple
Range
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|
Implied Value Per
Share of Eloqua
Common Stock
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Street Case
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Aggregate Value to Estimated 2012 Revenue
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5.0x – 9.0x
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$
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13.91 – $22.88
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Aggregate Value to Estimated 2013 Revenue
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4.0x – 8.0x
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$
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13.77 – $24.84
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Management Case
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Aggregate Value to Estimated 2012 Revenue
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5.5x – 10.0x
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$
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15.21 – $25.43
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Aggregate Value to Estimated 2013 Revenue
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4.5x – 8.5x
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$
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16.17 – $28.10
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Morgan Stanley noted that the median estimated revenue multiples for the comparable companies for
calendar years 2012 and 2013 were 7.2x and 5.6x, respectively. Morgan Stanley further noted that the consideration to be received by holders of shares of Eloqua common stock pursuant to the merger agreement is $23.50 per share.
No company utilized in the public trading comparables analysis is identical to Eloqua. In evaluating comparable companies, Morgan Stanley
made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond our and Morgan Stanley’s control, such as the impact of competition on
our businesses and the industry generally, industry growth and the absence of any adverse material change in our financial condition and prospects or the industry, or in the financial markets in general. Mathematical analysis (such as determining
the average or median) is not in itself a meaningful method of using peer group data.
37
Analysis of Precedent Transactions
Morgan Stanley performed a precedent transactions analysis, which is designed to imply a value of a company based on publicly available
financial terms and premia of selected transactions. Morgan Stanley selected such comparable transactions because they shared certain characteristic with the merger. In connection with its analysis, Morgan Stanley compared publicly available
statistics for select software sector transactions with a value of greater than $500 million occurring between January 1, 2008 and December 1, 2012. The following is a list of the transactions reviewed:
Selected Software Sector Transactions (Target / Acquiror)
Selected Software as a Service Transactions
Ariba, Inc. / SAP AG
Art Technology Group, Inc. / Oracle Corporation
Kenexa Corporation / International Business Machines Corporation
Omniture, Inc. /
Adobe Systems Inc.
RightNow Technologies, Inc. / Oracle Corporation
SuccessFactors, Inc. / SAP AG
Taleo Corporation / Oracle Corporation
Selected Non-Software as a
Service Transactions
ArcSight, Inc. / Hewlett-Packard Company
Autonomy Corporation / Hewlett-Packard Company
Blackboard Inc. / Providence Equity Partners LLC
Deltek, Inc. / Thoma Bravo, LLC
Eclipsys Corporation / Allscripts-Misys Healthcare Solutions, Inc.
Epicor Software Corporation / Apax Partners Worldwide LLP
Fast Search & Transfer, Inc. / Microsoft Corporation
Interactive Data
Corporation / Investor Group
Interwoven Inc. / Autonomy Corporation
JDA Software Group, Inc. / RedPrairie Corporation (New Mountain Capital)
Lawson Software Inc. / Infor Global Solutions, Inc. (Golden Gate Capital)
McAfee, Inc. / Intel Corporation
Misys plc / Vista Equity Partners
MModal Inc. / One Equity Partners LLC
Novell, Inc. / Attachmate Corporation
Phase Forward Inc. / Oracle Corporation
Quest Software, Inc. / Dell Inc.
Radiant Systems Inc. / NCR Corporation
Retalix Ltd. / NCR Corporation
S1 Corporation / ACI Worldwide, Inc.
SkillSoft Public Limited Company / Investor Group
Sonic Corporation / Rovi Corporation
SonicWALL, Inc. / Investor Group
SonicWALL, Inc. / Dell Inc.
Sybase, Inc. / SAP AG
SPSS Inc. / International Business Machines Corporation
Sun Microsystems, Inc. / Oracle Corporation
Wind River Systems, Inc. / Intel Corporation
For each transaction listed above,
Morgan Stanley noted the following financial statistics where available: (1) implied premium to the acquired company’s closing share price on the last trading day prior to announcement (or the last trading day prior to the share price
being affected by acquisition rumors or similar merger-related news); (2) implied premium to the acquired company’s 30 trading day average closing share price prior to announcement (or the last trading day prior to the share price being
affected by acquisition rumors or similar
38
merger-related news); (3) implied premium to the acquired company’s highest closing share price over the twelve month period prior to announcement; and (4) the multiple of
aggregate value of the transaction to next twelve months estimated revenue.
Based on its analysis of the relevant metrics and
time frame for each of the transactions listed above, its further analysis of the relevant metrics for each of the transactions listed above and upon the application of its professional judgment, Morgan Stanley selected representative ranges of
implied premia and financial multiples of the transactions and applied these ranges of premia and financial multiples to the relevant financial statistic for our company. For purposes of estimated next twelve months revenue, Morgan Stanley utilized
estimates included in the street case. The following table summarizes Morgan Stanley’s analysis:
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Precedent Transactions Financial Statistic
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Representative
Range
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Implied Value Per
Share of Eloqua
Common Stock
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Street Case
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Aggregate Value to Estimated Next Twelve Months Revenue
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5.0x – 8.5x
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$
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15.72 - $24.81
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Premia
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Premium to 1-Day Prior Closing Share Price
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20.0% – 45.0%
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$
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21.50 - $25.98
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Premium to 30-Day Average Closing Share Price
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25.0% – 50.0%
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$
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22.64 - $27.17
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Premium to Last Twelve Months High Closing Share Price
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0.0% – 15.0%
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|
$
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24.65 - $28.35
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Morgan Stanley also noted the price per share of Eloqua implied by the median and top quartile statistics
of the software as a service precedent transactions. The following table summarizes Morgan Stanley’s analysis:
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Precedent Transactions Financial Statistic
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|
Software as a
Service –
Median
Representative
Metric
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|
|
Implied Value Per
Share of Eloqua
Common Stock Based
on Software as
a
Service – Median
Statistic
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|
Software as a
Service – Top
Quartile
Representative
Metric
|
|
|
Implied Value Per
Share of Eloqua
Common Stock Based
on Software as
a
Service –Top Quartile
Statistic
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|
Street Case
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Aggregate Value to Estimated Next Twelve Months Revenue
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5.2
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x
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$
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16.11
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|
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6.7
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x
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$
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20.21
|
|
|
Premia
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|
Premium to 1-Day Prior Closing Share Price
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|
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26.5
|
%
|
|
$
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22.66
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|
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44.2
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%
|
|
$
|
25.84
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|
|
Premium to 30-Day Average Closing Share Price
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|
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42.9
|
%
|
|
$
|
25.87
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|
|
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50.6
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%
|
|
$
|
27.28
|
|
|
Premium to Last Twelve Months High Closing Share Price
|
|
|
8.9
|
%
|
|
$
|
26.84
|
|
|
|
11.7
|
%
|
|
$
|
27.54
|
|
Morgan Stanley noted that the median aggregate value to estimated next twelve months revenue multiple for
all of the precedent transactions (software as a service and non-software as a service precedent transactions) was 3.2x. Morgan Stanley further noted that the median premia for all of the precedent transactions to the 1-day prior closing share
price, 30-day average closing share price and last twelve months high closing share price were 32.3%, 36.4% and 7.5%, respectively. Morgan Stanley also noted that the consideration to be received by holders of shares of Eloqua common stock pursuant
to the merger agreement is $23.50 per share.
No company or transaction utilized in the precedent transactions analysis is
identical to us or the merger. In evaluating the precedent transactions, Morgan Stanley made judgments and assumptions with regard to industry performance, general business, market and financial conditions and other matters, which are beyond our
control, such as the impact of competition on our business or the industry generally, industry growth and the absence of any adverse material change in our financial condition or the industry or in the financial markets in general, which could
affect the public trading value of the companies and the aggregate value and equity value of the transactions to which they are being compared.
39
Discounted Cash Flow Analysis
Morgan Stanley calculated a range of equity values per share for Eloqua common stock based on a discounted cash flow analysis to value
Eloqua as a standalone entity. Morgan Stanley utilized estimates from the street case and the management case. For the analysis utilizing the street case, projections were based on publicly available estimates available as of December 19, 2012
through 2014 prepared by equity research analysts, and estimates for 2015 through 2022 were developed by an extrapolation of 2014 estimates to reach steady state margin and growth profile by 2022. For purposes of its discounted cash flow analysis,
Morgan Stanley defined unlevered free cash flow as earnings before interest, taxes, depreciation and amortization, less (1) stock based compensation expense, (2) taxes and (3) capital expenditures, plus change in working capital,
which included positive changes in deferred revenue. Stock-based compensation expense was treated as an expense in connection with this analysis. With respect to the analysis utilizing management-provided estimates (which we refer to as the
management case), projections through 2014 were based on management projections, and projections for 2015 through 2022 were developed by an extrapolation of 2014 estimates in the management projections based on 2014 growth and margin performance in
the management case to reach a steady state margin and growth profile by 2022. Morgan Stanley calculated the net present value of free cash flows for Eloqua for the years 2013 through 2022 and calculated terminal values in the year 2022 based on a
terminal perpetual growth rate ranging from 2.0% to 4.0%. Morgan Stanley selected these terminal perpetual growth rates based on the application of its professional judgment. These values were discounted to present values as of December 31,
2012 at a discount rate ranging from 9.0% to 12.0%, which range of discount rates were selected, upon the application of Morgan Stanley’s professional judgment, to reflect our weighted average cost of capital.
The following table summarizes Morgan Stanley’s analysis:
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|
|
|
|
|
|
|
|
Implied Present
Value Per
Share of Eloqua
Common Stock
|
|
|
Street Case
|
|
$
|
13.10 - $23.68
|
|
|
Management Case
|
|
$
|
16.52 - $30.54
|
|
Morgan Stanley noted that the consideration to be received by holders of shares of Eloqua common stock pursuant to the
merger agreement is $23.50 per share.
Discounted Equity Value Analysis
Morgan Stanley performed a discounted equity value analysis, which is designed to provide insight into the estimated future value of a
company’s common equity as a function of the company’s estimated future revenue and free cash flow per share and a potential range of aggregate value to revenue multiples and price per share to free cash flow per share multiples. The
resulting value is subsequently discounted to arrive at a present value for such company’s stock price. In connection with this analysis, Morgan Stanley calculated a range of present equity values per share of Eloqua common stock on a
standalone basis. To calculate the discounted equity value, Morgan Stanley used calendar year 2015 revenue and free cash flow per share estimates which were derived by extrapolating from the 2014 calendar year revenue and free cash flow per share
estimates set forth in the street case and management case. Such estimated calendar year 2015 revenues were $169.2 million and $207.3 million for the street and management cases, respectively. The estimated 2015 calendar year free cash flow per
share estimates were $0.49 and $0.63 for the street and management cases, respectively. Morgan Stanley applied a range of revenue and free cash flow multiples, selected by application of Morgan Stanley’s professional judgment, to these
estimates and applied a discount rate of 10.5%, which is the mid-point of the range of discount rates from 9% to 12% selected by Morgan Stanley, upon the application of its professional judgment, to reflect our weighted average cost of capital.
40
The following table summarizes Morgan Stanley’s analysis:
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|
|
|
|
|
|
|
|
|
|
|
Comparable
Company
Representative
Multiple
Range
|
|
|
Implied Present
Value Per
Share of Eloqua
Common Stock
|
|
|
Calendar Year 2015 Estimated Revenue
|
|
|
|
|
|
|
|
|
|
Street Case
|
|
|
3.5x – 7.0x
|
|
|
$
|
13.55 – $25.26
|
|
|
Management Case
|
|
|
4.0x – 7.5x
|
|
|
$
|
18.46 – $32.80
|
|
|
Calendar Year 2015 Estimated Free Cash Flow per Share
|
|
|
|
|
|
|
|
|
|
Street Case
|
|
|
25.0x – 50.0x
|
|
|
$
|
10.03 – $20.06
|
|
|
Management Case
|
|
|
30.0x – 55.0x
|
|
|
$
|
15.36 – $28.16
|
|
Morgan Stanley noted that the consideration to be received by holders of shares of Eloqua common stock pursuant to the
merger agreement is $23.50 per share.
General
In connection with the review of the merger by our board of directors, Morgan Stanley performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a
financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any
particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and
opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of
valuations resulting from any particular analysis described above should not be taken to be Morgan Stanley’s view of the actual value of our company. In performing its analyses, Morgan Stanley made numerous assumptions with respect to industry
performance, general business and economic conditions and other matters. Many of these assumptions are beyond our control. Any estimates contained in Morgan Stanley’s analyses are not necessarily indicative of future results or actual values,
which may be significantly more or less favorable than those suggested by such estimates.
Morgan Stanley conducted the
analyses described above solely as part of its analysis of the fairness from a financial point of view of the consideration to be received by the holders of shares of Eloqua common stock (other than the holders of the excluded shares) pursuant to
the merger agreement and in connection with the delivery of its opinion, dated December 19, 2012, to our board of directors. These analyses do not purport to be appraisals or to reflect the prices at which shares of Eloqua common stock might
actually trade.
The consideration to be received by the holders of shares of Eloqua common stock (other than the holders of
the excluded shares) pursuant to the merger agreement was determined through arm’s length negotiations between Eloqua and Oracle and was approved by our board of directors. Morgan Stanley provided advice to our board of directors during these
negotiations. Morgan Stanley did not, however, recommend any specific consideration to Eloqua or our board of directors or that any specific consideration constituted the only appropriate consideration for the merger.
Morgan Stanley’s opinion and its presentation to our board of directors was one of many factors taken into consideration by our
board in deciding to approve, adopt and authorize the merger agreement. Consequently, the analyses as described above should not be viewed as determinative of the opinion of our board of directors with respect to the consideration pursuant to the
merger agreement or of whether our board of directors would have been willing to agree to different consideration. Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance
with Morgan Stanley’s customary practice.
Our board of directors retained Morgan Stanley based upon Morgan
Stanley’s qualifications, experience and expertise. Morgan Stanley is an internationally recognized investment banking and advisory firm. Morgan
41
Stanley, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of businesses and securities in connection with mergers and acquisitions,
negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate, estate and other purposes. In the ordinary course of Morgan Stanley’s trading,
brokerage, investment management and financing activities, Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade
or otherwise structure and effect transactions, for their own account or for the accounts of its customers, in the debt or equity securities or loans of Eloqua and Oracle or any other company, or any currency or commodity, that may be involved in
the transactions contemplated by the merger agreement, or any related derivative instrument.
Under the terms of its
engagement letter, Morgan Stanley provided us financial advisory services and a financial opinion, described in this section and attached to this proxy statement as Annex B, in connection with the merger, and we have agreed to pay Morgan Stanley a
fee of approximately $9.1 million for its services, $8.1 million of which is contingent upon the closing of the merger. We have also agreed to reimburse Morgan Stanley for its expenses, including reasonable fees of outside counsel and other
professional advisors, incurred in connection with its engagement. In addition, we have agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan
Stanley or any of its affiliates against certain liabilities and expenses relating to or arising out of Morgan Stanley’s engagement. In the prior two years, Morgan Stanley has not provided any services to our company other than those described
in this proxy statement. During 2009, 2010, 2011 and 2012, the Institutional Securities Group of Morgan Stanley, the parent holding company (which we refer to as Morgan Stanley ISG), provided services to Oracle for which it was paid, respectively,
approximately $4.6 million, $2.1 million, $2.2 million and $2.1 million. The services that Morgan Stanley ISG provided to Oracle to earn these fees included (1) commercial banking services in which Morgan Stanley ISG participated as one of several
lenders in Oracle’s 2009 credit facilities; (2) participation as one of three joint book runners in senior note offerings in 2009 and as senior co-manager in a senior note offering in 2010; and (3) providing miscellaneous financial services,
including in connection with foreign exchange business, share repurchases, derivatives transactions and cash management. Morgan Stanley ISG accrued additional revenues during the 2009 through 2012 period of approximately $2.0 million in connection
with derivative, hedging, or other trading transactions related to the above services provided to Oracle.
Certain Prospective Financial Information
Management Financial Projections
. Our senior management does not as a matter of course make public projections as to future performance or earnings beyond the current fiscal year and generally does
not make public projections for extended periods due to the unpredictability of the underlying assumptions and estimates. However, in connection with the exploration of strategic alternatives as described in this proxy statement, management prepared
a set of financial projections for the remainder of 2012 and calendar years 2013 and 2014, and these projections were provided to our board of directors and Morgan Stanley. We have included below these projections concerning our total revenue, total
gross profit, operating income (loss), net income (loss), non-GAAP adjusted EBITDA and non-GAAP free cash flow.
These
financial projections were developed from historical financial statements and did not give effect to any changes or expenses as a result of the merger or any other effects of the merger. The projections included below were prepared solely for
internal use and were not prepared with a view toward public disclosure or compliance with published guidelines of the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or U.S.
generally accepted accounting principles, or GAAP. The inclusion of this information should not be regarded as an indication that our board of directors, Morgan Stanley or any other recipient of this information considered, or now considers, it to
be a reliable prediction of future results. Our independent registered certified public accounting firm, KPMG LLP, has neither examined nor compiled this prospective financial information and, accordingly, KPMG LLP does not express an opinion or any
other form of assurance with respect to this information. None of us, Morgan Stanley, Oracle, any of our or
42
their respective affiliates or any other person assumes any responsibility for the validity, reasonableness, accuracy or completeness of the projections described below.
Furthermore, while presented with numerical specificity, the projections necessarily are based on numerous assumptions, many of which are
beyond our control and difficult to predict, including with respect to industry performance, competitive factors, industry consolidation, general business, economic, regulatory, market and financial conditions, as well as matters specific to our
business, which assumptions may not prove to have been, or may no longer be, accurate. The projections do not take into account any circumstances or events occurring after the date they were prepared, including the December 20, 2012
announcement of the merger agreement or subsequent integration planning activities. For instance, there can be no assurance that the announcement of the merger will not cause our customers to delay or cancel purchases of our products and services
pending the consummation of the merger or the clarification of Oracle’s intentions with respect to the conduct of our business following the merger. Any such delay or cancellation of customer sales would likely adversely affect our ability to
achieve the results reflected in the financial projections. In addition, the financial projections do not take into account the effect of any failure of the merger to occur and should not be viewed as accurate or continuing in that context.
The projections were prepared in November 2012 in the context of the business, economic, regulatory, market and financial
conditions that existed at that time, and have not been updated to reflect revised prospects for our business, changes in general business, economic, regulatory, market and financial conditions, or any other transaction or event that has occurred or
that may occur and that was not anticipated at the time the projections were prepared. The total revenue projections set forth below are materially consistent with three-year revenue projections provided to Oracle in September 2012 (see
“—Background of the Merger” beginning on page 23 of this proxy statement), except that, as subsequently communicated to Oracle, the 2012 revenue estimate was revised from $93.2 million to $95.3 million to reflect actual results
through the end of October 2012. The projections are not necessarily indicative of future performance, which may be significantly more favorable or less favorable than as set forth below. The projections cover multiple years, and such information by
its nature becomes less reliable with each successive year. They should not be utilized as public guidance and will not be provided in the ordinary course of our business in the future.
For the foregoing and other reasons, readers of this proxy statement are cautioned that the inclusion of financial projections in this
proxy statement should not be regarded as a representation or guarantee that the targets will be achieved and that they should not rely on the projections. The projections constitute forward-looking statements and are subject to risks and
uncertainties that could cause actual results to differ materially from the results projected in such projections, including, but not limited to, our performance, the marketplace for our products and services, industry performance, general business
and economic conditions, customer requirements, competition, our ability to successfully manage costs in the future, adverse changes in applicable laws, regulations or rules and other risks and uncertainties described in documents we have filed with
the SEC. See also the section entitled “Special Note Regarding Forward-Looking Statements” in this proxy statement.
Projected
Financial Results
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012E
|
|
|
2013E
|
|
|
2014E
|
|
|
Total revenue
|
|
$
|
95.3
|
|
|
$
|
125.3
|
|
|
$
|
162.6
|
|
|
Total gross profit
|
|
|
67.4
|
|
|
|
87.1
|
|
|
|
115.7
|
|
|
Operating income/(loss)
|
|
|
(8.9
|
)
|
|
|
(4.6
|
)
|
|
|
4.2
|
|
|
Net income/(loss) (1)
|
|
|
(9.6
|
)
|
|
|
(5.5
|
)
|
|
|
3.0
|
|
|
Non-GAAP adjusted EBITDA (2)
|
|
|
(3.1
|
)
|
|
|
4.2
|
|
|
|
16.2
|
|
|
Non-GAAP free cash flow (3)
|
|
|
(5.4
|
)
|
|
|
6.1
|
|
|
|
12.7
|
|
|
(1)
|
Excludes accretion of dividends on redeemable preferred stock.
|
43
|
(2)
|
Adjusted EBITDA (non-GAAP) is earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, change in foreign currency transactions,
accretion of dividends on redeemable preferred stock, and change in fair value of preferred stock warrant liabilities.
|
|
(3)
|
Free cash flow (non-GAAP) is earnings before interest, taxes, depreciation and amortization, less stock-based compensation expense, taxes and capital expenditures, plus
change in working capital (including positive changes in deferred revenue).
|
Eloqua uses financial information
that has not been prepared in accordance with GAAP. We use these non-GAAP financial measures internally in analyzing our financial results and believe that they are useful to investors, as a supplement to GAAP measures in evaluating Eloqua’s
ongoing operational performance. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Publicly Available Financial Forecasts
. As stated in the previous section of this proxy statement entitled “—Opinion of
Eloqua’s Financial Advisor” beginning on page 33, Morgan Stanley utilized certain publicly available financial forecasts published by equity research analysts relating to the future financial performance of Eloqua (the “street
case”). These publicly available estimates relating to Eloqua included assumptions concerning our revenue growth, non-GAAP adjusted EBITDA margins and non-GAAP free cash flow margins, and resulted in estimated revenue of $94 million for 2012,
$116 million for 2013 and $141 million for 2014, estimated non-GAAP adjusted EBITDA of $(3) million for 2012, $3 million for 2013 and $13 million for 2014, and estimated non-GAAP free cash flow of $(6) million for 2012, $(0) million for 2013 and $8
million for 2014. These estimates are being provided only for informational purposes. Such estimates and underlying assumptions were not prepared by Eloqua, Oracle or any of their respective representatives and are based on assumptions that may not
be realized and are subject to significant uncertainties and contingencies. Readers of this proxy statement are cautioned that the inclusion of financial forecasts in this proxy statement should not be regarded as a representation or guarantee that
the targets will be achieved and that they should not rely on the forecasts. The forecasts constitute forward-looking statements and are subject to risks and uncertainties that could cause actual results to differ materially from the results
projected in such forecasts, including, but not limited to, our performance, the marketplace for our products and services, industry performance, general business and economic conditions, customer requirements, competition, our ability to
successfully manage costs in the future, adverse changes in applicable laws, regulations or rules and other risks and uncertainties described in documents we have filed with the SEC. See also the section entitled “Special Note Regarding
Forward-Looking Statements” in this proxy statement.
Interests of Eloqua’s Directors and Executive
Officers in the Merger
In considering the recommendation of our board of directors with respect to the merger agreement
and the merger, you should be aware that Eloqua’s executive officers and directors have economic interests in the merger that are different from, or in addition to, those of Eloqua stockholders generally. These interests may create potential
conflicts of interest. Our board of directors was aware of and considered these interests, among other matters, in reaching its decision to approve, and declare advisable, the merger agreement and the merger. The material interests are summarized
below.
44
Equity-Based Awards
The following table referred to in this proxy statement as the “—Options Table” sets forth information regarding Eloqua stock options held by our executive officers and directors that are
vested or are scheduled to be vested, or accelerated in connection with the merger, by March 1, 2013 (the assumed date the merger is completed for purposes of this table). The accelerated vesting of stock options in connection with the merger
results from arrangements with our directors and executive officers that have been in place since our August 2012 initial public offering.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vested Options
|
|
|
Accelerated Options
|
|
|
|
|
|
Name
|
|
Aggregate
Number of
Shares
Subject to
Outstanding
Vested
Options
|
|
|
Weighted-
Average
Exercise
Price
|
|
|
Aggregate
Vested
Option
Payment(1)
|
|
|
Aggregate
Number of
Shares
Subject to
Accelerated
Options
|
|
|
Weighted-
Average
Exercise
Price
|
|
|
Aggregate
Accelerated
Option
Payment(1)
|
|
|
Total
|
|
|
Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph P. Payne
Chairman of the Board and Chief Executive Officer
|
|
|
734,660
|
|
|
$
|
2.02
|
|
|
$
|
15,780,497
|
|
|
|
279,646
|
|
|
$
|
7.25
|
|
|
$
|
4,544,248
|
|
|
$
|
20,324,745
|
|
|
|
|
|
|
|
|
|
|
|
Alex P. Shootman
President
|
|
|
339,973
|
|
|
$
|
2.34
|
|
|
$
|
7,193,829
|
|
|
|
155,600
|
|
|
$
|
7.59
|
|
|
$
|
2,475,596
|
|
|
$
|
9,669,425
|
|
|
|
|
|
|
|
|
|
|
|
Don E. Clarke
Chief Financial Officer and Treasurer
|
|
|
307,706
|
|
|
$
|
1.88
|
|
|
$
|
6,652,604
|
|
|
|
25,000
|
|
|
$
|
7.25
|
|
|
$
|
406,250
|
|
|
$
|
7,058,854
|
|
|
|
|
|
|
|
|
|
|
|
Heidi M. Melin
Chief Marketing Officer
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Andre H.S. Yee
Senior Vice President, Product Development
|
|
|
319,934
|
|
|
$
|
1.57
|
|
|
$
|
7,016,153
|
|
|
|
469
|
|
|
$
|
1.35
|
|
|
$
|
10,388
|
|
|
$
|
7,026,541
|
|
|
|
|
|
|
|
|
|
|
|
Stephen E. Holsten
Vice President, General Counsel and Secretary
|
|
|
58,500
|
|
|
$
|
1.97
|
|
|
$
|
1,259,505
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
1,259,505
|
|
|
|
|
|
|
|
|
|
|
|
Non-Employee
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Byron B. Deeter
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Neal Dempsey
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
John J. McDonnell, Jr.
|
|
|
3,000
|
|
|
$
|
8.83
|
|
|
$
|
44,010
|
|
|
|
1,000
|
|
|
$
|
8.83
|
|
|
$
|
14,670
|
|
|
$
|
58,680
|
|
|
|
|
|
|
|
|
|
|
|
Thomas Reilly
|
|
|
16,667
|
|
|
$
|
9.03
|
|
|
$
|
241,171
|
|
|
|
19,333
|
|
|
$
|
9.03
|
|
|
$
|
279,749
|
|
|
$
|
520,920
|
|
|
|
|
|
|
|
|
|
|
|
Stephen M. Swad
|
|
|
35,667
|
|
|
$
|
7.67
|
|
|
$
|
564,609
|
|
|
|
12,333
|
|
|
$
|
7.29
|
|
|
$
|
199,918
|
|
|
$
|
764,527
|
|
|
|
|
|
|
|
|
|
|
|
Bradford D. Woloson
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
(1)
|
To estimate the value of payments for vested or accelerated Eloqua stock options, we multiplied the aggregate number of shares of Eloqua common stock issuable upon
exercise of the stock options by $23.50 per share less the weighted average exercise price (rounded to the nearest whole cent).
|
45
Severance and Change in Control Provisions of Employment Agreements and Option Agreements
The employment agreements with our executive officers described below were entered into, or last amended, in
connection with our August 2012 initial public offering.
Joseph P. Payne
. Mr. Payne’s employment agreement
with us provides that in the event his employment is terminated either by us without “cause” or by Mr. Payne for “good reason,” he will be entitled to receive a severance payment equal to twelve months of his then-current
base salary, payable in a lump sum within 30 days of the termination date, and payment for his health benefits for up to 12 months after the termination date. In addition, if such termination occurs within 12 months following a change in control,
Mr. Payne will be entitled to an additional severance payment equal to his target annual bonus for the year in which the termination occurs, payable in a lump sum, and any unvested and/or unexercisable equity awards held by him will immediately
become vested and/or exercisable. If amounts payable to Mr. Payne, whether under Mr. Payne’s employment agreement or otherwise, give rise to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended,
or the Code, Mr. Payne will receive the greater after-tax amount of either (A) the full payment minus the sum of all excise, federal, state and local income and employment taxes, or (B) a reduced payment that does not give rise to the
excise tax imposed by Section 4999 of the Code minus the sum of all federal, state and local income and employment taxes. In addition, all unvested options granted to Mr. Payne provide for full acceleration of vesting upon a change in
control.
Alex P. Shootman
. Mr. Shootman’s employment agreement with us provides that in the event his
employment terminates in connection with an “involuntary termination” (as defined in the employment agreement), he will be entitled to receive severance payments equal to six months continued base salary and benefits. However, if after
such six-month period, Mr. Shootman remains unemployed, severance will be extended for up to three additional months. Mr. Shootman will also be entitled to receive a pro-rated bonus for the year of termination provided the relevant
performance metrics for such year are achieved. In addition, if such termination occurs within 12 months following a change in control, Mr. Shootman will be entitled to receive payment equal to six months of his target annual bonus for the year
in which the involuntary termination occurs (in lieu of the pro-rated bonus described above), payable in a lump sum, and any unvested and/or unexercisable equity awards held by him will immediately become vested and/or exercisable. If the payments
or benefits payable to Mr. Shootman in connection with a change in control (whether under the employment agreement or otherwise) would be subject to the excise tax on golden parachutes imposed under Section 4999 of the Code, then those
payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to Mr. Shootman. In addition, certain unvested options granted to Mr. Shootman provide for full acceleration of vesting upon a change in
control.
Don E. Clarke
. Mr. Clarke’s employment agreement with us provides that in the event his employment
is terminated either by us without “cause” or by Mr. Clarke for “good reason,” he will be entitled to receive a severance payment equal to six months of his then-current base salary, payable in a lump sum within 30 days of
the termination date, and payment for his health benefits for up to six months after the termination date. In addition, if such termination occurs within 12 months following a change in control, Mr. Clarke will be entitled to an additional
severance payment equal to six months of his target annual bonus for the year in which the termination occurs, payable in a lump sum, and any unvested and/or unexercisable equity awards held by him will immediately become vested and/or exercisable.
If the payments or benefits payable to Mr. Clarke in connection with a change in control (whether under the employment agreement or otherwise) would be subject to the excise tax on golden parachutes imposed under Section 4999 of the Code,
then those payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to Mr. Clarke. In addition, certain unvested options granted to Mr. Clarke provide for full acceleration of vesting upon a
change in control.
Heidi M. Melin
. Ms. Melin’s employment agreement with us provides that in the event her
employment terminates in connection with an “involuntary termination” (as defined in the employment agreement), she will be entitled to receive a severance payment equal to twelve months of her then-current base salary plus a pro-rated
46
bonus for the year of termination based on her then-current target bonus. In addition, if such termination occurs within 18 months following a change in control or prior to the effective date of
a change in control, but after we have entered into a definitive agreement to consummate a transaction that would constitute a change in control, Ms. Melin will be entitled to her full target annual bonus for the year in which the termination
occurs (in lieu of the pro-rated bonus described above), payable in a lump sum, and any unvested and/or unexercisable equity awards held by her will immediately become vested and/or exercisable. If the payments or benefits payable to Ms. Melin
in connection with a change in control (whether under the employment agreement or otherwise) would be subject to the excise tax on golden parachutes imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such
reduction would result in a higher net after-tax benefit to Ms. Melin.
Andre H.S. Yee and Stephen E. Holsten.
Messrs. Yee and Holsten’s employment agreements with us provide that in the event the executive’s employment is terminated either by us without “cause” or by the executive for “good reason,” he will be entitled to
severance payments equal to six months of his then-current base salary, payable in installments. In addition, if such termination occurs within 12 months following a change in control, the executive will be entitled to an additional severance
payment equal to six months of his target annual bonus for the year in which the termination occurs, payable in a lump sum, and any unvested and/or unexercisable equity awards held by him will immediately become vested and/or exercisable. If the
payments or benefits payable to the executive in connection with a change in control (whether under the employment agreement or otherwise) would be subject to the excise tax on golden parachutes imposed under Section 4999 of the Code, then
those payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to the executive. In addition, certain unvested options granted to Mr. Yee will vest 50% upon a change in control.
The table below sets forth an estimate of the approximate values of golden parachute compensation that may become payable to our
executive officers in connection with the merger as described in this proxy statement. The table assumes the closing of the merger occurs on March 1, 2013, and the employment of our executive officers is terminated without cause, with good
reason or due to an involuntary termination, as discussed above, immediately following the closing on March 1, 2013. If the merger were to close, and the associated terminations of employment were to occur, on a date other than March 1,
2013, certain amounts paid to the executive officers may be higher or lower than the amounts shown in the table. The information below is based on the merger consideration of $23.50 per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Cash(1)
|
|
|
Equity(2)
|
|
|
Pension/
NQDC
|
|
|
Perquisites/
Benefits(3)
|
|
|
Tax
Reimbursement
|
|
|
Other
|
|
|
Total
|
|
|
Joseph P. Payne
|
|
$
|
510,000
|
|
|
$
|
4,544,248
|
|
|
|
—
|
|
|
$
|
15,385
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
5,069,633
|
|
|
Alex P. Shootman
|
|
$
|
325,000
|
(4)
|
|
$
|
2,792,294
|
|
|
|
—
|
|
|
$
|
11,464
|
(4)
|
|
|
—
|
|
|
|
—
|
|
|
$
|
3,128,758
|
|
|
Don E. Clarke
|
|
$
|
177,500
|
|
|
$
|
566,691
|
|
|
|
—
|
|
|
$
|
7,692
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
751,883
|
|
|
Heidi M. Melin
|
|
$
|
400,000
|
|
|
$
|
2,025,800
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
2,425,800
|
|
|
Andre H.S. Yee
|
|
$
|
157,500
|
|
|
$
|
143,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
301,000
|
|
|
Stephen E. Holsten
|
|
$
|
147,500
|
|
|
$
|
597,963
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
745,463
|
|
|
(1)
|
Represents the estimated value of cash severance payments, payable upon a qualifying termination of employment immediately following completion of the merger, assuming
base salaries and target bonus opportunities remain unchanged from their current levels and as set forth in the table below. All such severance payments represent double-trigger arrangements.
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Cash
Severance
|
|
|
Severance
Bonus
|
|
|
Joseph P. Payne
|
|
$
|
325,000
|
|
|
$
|
185,000
|
|
|
Alex P. Shootman
|
|
$
|
225,000
|
|
|
$
|
100,000
|
|
|
Don E. Clarke
|
|
$
|
117,500
|
|
|
$
|
60,000
|
|
|
Heidi M. Melin
|
|
$
|
300,000
|
|
|
$
|
100,000
|
|
|
Andre H.S. Yee
|
|
$
|
115,000
|
|
|
$
|
42,500
|
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Stephen E. Holsten
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$
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112,500
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$
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35,000
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(2)
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Represents the aggregate in-the-money value of unvested Eloqua stock options that will or may vest upon the merger and/or a qualifying termination of employment
immediately following completion of the merger, as described above, and as calculated pursuant to the assumptions set forth above. For Mr. Payne, the full amount above represents the in-the-money value of unvested options that will vest on a
single-trigger basis on the closing of the merger. For Mr. Shootman, (1) $2,475,596 of the amount above represents the in-the-money value of unvested options that will vest on a single-trigger basis upon the closing of the merger and
(2) $316,698 of the amount above represents the in-the-money value of unvested options that will vest on a double-trigger basis. For Mr. Clarke, (1) $406,250 of the amount above represents the in-the-money value of unvested options
that will vest on a single-trigger basis upon the closing of the merger and (2) $160,441 of the amount above represents the in-the-money value of unvested options that will vest on a double-trigger basis. For Mr. Yee, (1) $10,388 of
the amount above represents the in-the-money value of unvested options that will vest on a single-trigger basis upon the closing of the merger and (2) $133,112 of the amount above represents the in-the-money value of unvested options that will
vest on a double-trigger basis. For Ms. Melin and Mr. Holsten, the full amount above represents the in-the-money value of unvested options that will vest on a double-trigger basis.
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(3)
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All amounts represent the estimated value of the in-kind benefits provided over the applicable severance period, upon a qualifying termination of employment following
completion of the merger, and include only reimbursement of COBRA premiums for 12 months for Mr. Payne, nine months for Mr. Shootman, and six months for Mr. Clarke, which, in all cases, is the maximum time period allotted for each
executive officer. This is a double-trigger arrangement.
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(4)
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Represents nine months of Mr. Shootman’s base salary and health benefits, as applicable. The cash severance and health benefits payments based on
Mr. Shootman’s base salary may be reduced to a minimum of six months of base salary and health benefits in the event Mr. Shootman begins alternate employment, as described above.
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Director and Officer Indemnification and Insurance
For a period of six years after the effective time of the merger, Parent is required to, or to cause the surviving corporation to, maintain officers’ and directors’ liability insurance (which we
refer to as D&O insurance) with respect to acts or omissions occurring before the effective time of the merger covering each such person currently covered by Eloqua’s D&O insurance policy on terms with respect to coverage and amount no
less favorable than Eloqua’s D&O insurance in effect on the date of the merger agreement. In satisfying the foregoing obligation, neither Parent nor the surviving corporation will be required to pay annual premiums for insurance in excess
of 200% of the aggregate premiums paid by Eloqua in fiscal year 2011 (which we refer to as the current premium). If the premiums for such insurance would at any time exceed 200% of the current premium, the surviving corporation will maintain, in its
judgment, the maximum coverage available at an annual premium equal to 200% of the current premium. In lieu of the foregoing, Eloqua may obtain prepaid policies prior to the effective time of the merger for, unless otherwise agreed to by Parent, an
aggregate amount not in excess of 225% of the current premium, which policies provide the covered persons with D&O insurance coverage for an aggregate period of six years with respect to claims arising from facts or events that occurred on or
before the effective time of the merger, including in respect of the transactions contemplated by the merger agreement. If prepaid policies have been obtained prior to the effective time of the merger, the surviving corporation will maintain such
policies in full force and effect for their full term and continue to honor the obligations under such policies.
From and
after the effective time of the merger, Parent and the surviving corporation are required to fulfill and honor in all respects the obligations of Eloqua and its subsidiaries (1) pursuant to indemnification agreements between Eloqua or any of
its subsidiaries and any person who is now, or has been at any time prior to the date of the merger agreement, or becomes prior to the effective time of the merger, a director or officer of Eloqua or any of its subsidiaries (which we refer to as the
indemnified parties), and (2) any indemnification provision and any exculpation provision set forth in Eloqua’s certificate of incorporation or bylaws as in effect on the date of the
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merger agreement. We are currently party to indemnification agreements with each of our directors and officers, which were entered into in connection with our August 2012 initial public offering.
The obligations of Parent and the surviving corporation as described in the two immediately preceding paragraphs will not be
terminated, amended, or modified in any manner so as to adversely affect any indemnified party or their respective successors, heirs and legal representatives without the consent of such indemnified party.
If Parent, the surviving corporation or any of its successors or assigns consolidates with or merges into any other entity and is not the
continuing or surviving corporation of such consolidation or merger, or transfers or conveys all or substantially all of its properties and assets to any person or entity, then the merger agreement requires that proper provision be made so that the
successors and assigns of Parent or the surviving corporation will assume all of the indemnification obligations described above.
Financing of the Merger
The merger is not conditioned on Parent’s ability to obtain financing.
Delisting and Deregistration of Eloqua Common Stock
If the merger is completed, Eloqua common stock will be removed from listing on the NASDAQ Global Market and deregistered under the
Exchange Act and we will no longer file periodic reports with the SEC.
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THE MERGER AGREEMENT
The summary of the material provisions of the merger agreement below and elsewhere in this proxy statement is qualified in its
entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Annex A and which we incorporate by reference into this document. This summary does not purport to be complete and may not contain all of the
information about the merger agreement that is important to you. We encourage you to read the merger agreement carefully in its entirety.
The Merger
The merger agreement provides that, subject to the terms and conditions of the merger agreement and in accordance with Delaware law, at the effective time of the merger, Merger Subsidiary will be merged
with and into Eloqua and, as a result of the merger, the separate corporate existence of Merger Subsidiary will cease and Eloqua will continue as the surviving corporation and become an indirect wholly owned subsidiary of Oracle. As the surviving
corporation, Eloqua will possess the rights, powers, privileges, immunities and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of Eloqua and Merger Subsidiary, all as provided under Delaware law.
The closing of the merger will occur as soon as practicable but in any event within two business days after all of the
conditions set forth in the merger agreement and described under “—Conditions to the Merger” are satisfied or waived, to the extent permitted under the merger agreement, or at such other time as agreed to in writing by the parties
unless the merger agreement has been terminated pursuant to its terms.
The merger will become effective when the certificate
of merger has been duly filed with the Delaware Secretary of State or at a later time as agreed to by the parties and specified in the certificate of merger. The merger is expected to be completed in the first half of 2013. However, the parties
cannot predict the exact timing of the completion of the merger or whether the merger will be completed at an earlier or later time, as agreed by the parties, or at all.
The Merger Consideration and the Conversion of Capital Stock
At the effective time of the merger, by virtue of the merger, each share of Eloqua common stock outstanding immediately prior to the effective time of the merger will be converted into the right to
receive $23.50 in cash, without interest and less any applicable withholding taxes, other than:
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shares of Eloqua common stock owned by Eloqua as treasury stock or Oracle immediately prior to the effective time of the merger, which will be
canceled, and no payment will be made with respect thereto;
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shares of Eloqua common stock held by any subsidiary of Parent (other than Merger Subsidiary) or by any subsidiary of Eloqua immediately prior to the
effective time of the merger, which will be converted into such number of shares of common stock, par value $0.01 per share, of the surviving corporation such that each such subsidiary of Eloqua or Parent owns the same percentage of the surviving
corporation immediately following the effective time as such subsidiary of Eloqua or Parent, as applicable, owned in Eloqua immediately prior to the effective time of the merger; and
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shares of Eloqua common stock held by a stockholder who has properly exercised appraisal rights in accordance with Delaware law.
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The price to be paid for each share of Eloqua common stock in the merger will be adjusted appropriately to
reflect the effect of any change in the outstanding shares of capital stock of Eloqua, including by reason of any reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or
any stock dividend, that occurs prior to the effective time of the merger.
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Each share of common stock of Merger Subsidiary outstanding immediately prior to the
effective time of the merger will be converted into and become one share of common stock, par value $0.01 per share, of the surviving corporation with the same rights, powers and privileges as the shares so converted and, together with the shares of
Eloqua common stock held by any subsidiary of Parent (other than Merger Subsidiary) or by any subsidiary of Eloqua immediately prior to the effective time which will be converted into common stock of the surviving corporation as described in the
second bullet point above, will thereafter constitute the only outstanding shares of capital stock of the surviving corporation.
Payment Procedures
Prior to the effective time of the merger, Parent will appoint an exchange agent for the purpose of
exchanging for the merger consideration the certificates and uncertificated shares of Eloqua common stock. As of the effective time of the merger, Parent will deposit with the exchange agent the aggregate merger consideration to be paid in respect
of the certificates and uncertificated shares of Eloqua common stock.
Each holder of shares of Eloqua common stock that are
converted into the right to receive the merger consideration will be entitled to receive the merger consideration upon (1) surrender to the exchange agent of a certificate, together with a duly completed and validly executed letter of
transmittal and such other documents as may reasonably be requested by the exchange agent, or (2) receipt of an “agent’s message” by the exchange agent (or such other evidence, if any, of transfer as the exchange agent may
reasonably request) in the case of a book-entry transfer of uncertificated shares. Until so surrendered or transferred, each such certificate or uncertificated share will represent after the effective time of the merger for all purposes only the
right to receive such merger consideration. No interest will be paid or accrued on the cash payable upon the surrender or transfer of such certificate or uncertificated share.
If any portion of the merger consideration is to be paid to a person other than the person in whose name the surrendered certificate or the transferred uncertificated share is registered, such payment is
subject to the conditions that (1) either such certificate will be properly endorsed or will otherwise be in proper form for transfer or such uncertificated share will be properly transferred and (2) the person requesting such payment will
pay to the exchange agent any transfer or other tax required as a result of such payment to a person other than the registered holder of such certificate or uncertificated share or establish to the satisfaction of the exchange agent that such tax
has been paid or is not payable.
After the effective time of the merger, there will be no further registration of transfers
of shares of Eloqua common stock on the stock transfer books of the surviving corporation. If, after the effective time of the merger, certificates or uncertificated shares of Eloqua common stock are presented to the surviving corporation, they will
be canceled and exchanged for the merger consideration.
Any portion of the payment fund deposited with the exchange agent
that remains unclaimed by the holders of shares of Eloqua common stock six months after the effective time of the merger will be returned to Parent, upon demand, and any such holder who has not exchanged shares of Eloqua common stock for the merger
consideration prior to that time will thereafter look only to Parent for payment of the merger consideration. Parent will not be liable to any holder of shares of Eloqua common stock for any amounts paid to a public official pursuant to applicable
abandoned property, escheat or similar laws. Any amounts remaining unclaimed by holders of shares of Eloqua common stock two years after the effective time of the merger (or such earlier date, immediately prior to such time when the amounts would
escheat to or become property of any governmental authority) will become, to the extent permitted by applicable law, the property of Parent free and clear of any claims or interest of any person.
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Eloqua Representations and Warranties
The merger agreement contains representations and warranties made by Eloqua to Parent and Merger Subsidiary and representations and
warranties made by Parent to Eloqua. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties in connection with negotiating the terms of the merger agreement,
including information contained in a confidential disclosure schedule provided by Eloqua to Parent in connection with the signing of the merger agreement. The confidential disclosure schedule contains information that modifies, qualifies and creates
exceptions to the representations and warranties set forth in the merger agreement. Furthermore, some of those representations and warranties may not be accurate or complete as of any particular date because they are subject to a contractual
standard of materiality different from that generally applicable to public disclosures to stockholders. Moreover, certain representations and warranties in the merger agreement were used for the purpose of allocating risk between Eloqua and Parent
rather than establishing matters as facts. Accordingly, you should not rely on the representations and warranties in the merger agreement as characterizations of the actual state of facts about Eloqua or Parent. This description of the
representations and warranties is included to provide Eloqua stockholders with additional information regarding the terms of the merger agreement. It is not intended to provide any other factual information about Eloqua or Parent.
In the merger agreement, Eloqua has made representations and warranties to Parent and Merger Subsidiary with respect to, among other
things:
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the due incorporation, valid existence, good standing and power of Eloqua;
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its power and authority to enter into the merger agreement and to complete the transactions contemplated by the merger agreement and the enforceability
of the merger agreement against Eloqua;
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the required consents and approvals of governmental authorities in connection with the transactions contemplated by the merger agreement;
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the absence of conflicts with, creation of liens, violations or defaults under Eloqua’s governing documents, applicable laws or certain agreements
as a result of entering into the merger agreement and the consummation of the merger;
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its capitalization, including in particular the number of outstanding shares of Eloqua common stock and preferred stock, and the number of shares of
common stock issuable upon the exercise of stock options, warrants and other equity awards;
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its subsidiaries and their due incorporation or organization, valid existence, good standing, power and authority;
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its SEC filings since August 24, 2011, including financial statements contained in such filings, internal controls and compliance with the
Sarbanes-Oxley Act of 2002;
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its status and filing with, and compliance with the regulations of, Canadian securities authorities;
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the accuracy and compliance with applicable securities laws of the information supplied by Eloqua contained in this proxy statement;
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conduct of business and absence of certain changes, except as contemplated by the merger agreement, including that there has been no fact, event,
change, development or set of circumstances, that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on Eloqua;
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the absence of undisclosed material liabilities;
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the absence of certain litigation;
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Eloqua’s and its subsidiaries’ compliance with applicable legal requirements since January 1, 2007;
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matters with respect to Eloqua’s material contracts;
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matters related to Eloqua’s employee benefit plans;
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labor and employment matters;
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matters related to Eloqua’s insurance policies;
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compliance with environmental laws and regulations;
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intellectual property and information technology;
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title to properties and the absence of encumbrances;
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related party transaction matters;
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compliance with the U.S. Foreign Corrupt Practices Act and other anti-corruption laws;
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relationships with, and other matters related to, major customers and suppliers of Eloqua;
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the absence of undisclosed brokers’ fees and expenses;
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receipt by the Eloqua board of directors of a fairness opinion from Morgan Stanley; and
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the inapplicability of state takeover statutes to the merger and the absence of a “poison pill” stockholder rights plan.
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Many of the representations and warranties in the merger agreement made by Eloqua are qualified by a
“materiality” or “material adverse effect on Eloqua” standard (that is, they will not be deemed to be untrue or incorrect unless their failure to be true or correct, individually or in the aggregate, would, as the case may be, be
material or have a material adverse effect on Eloqua). For purposes of the merger agreement, a “material adverse effect on Eloqua” means (1) a material adverse effect on the business, financial condition or results of operations of
Eloqua and its subsidiaries, taken as a whole, or (2) an effect that would prevent, materially delay or materially impair Eloqua’s ability to consummate the merger.
For purposes of clause (1) above, the definition of “material adverse effect on Eloqua” excludes any adverse effect resulting from or arising out of:
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the announcement or pendency of the merger (including any loss of or adverse change in the relationship of Eloqua and its subsidiaries with their
respective employees, customers, resellers, partners, suppliers, licensors, licensees or distributors related to such announcement or pendency);
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general economic or political conditions (including acts of terrorism or war) that do not disproportionately affect Eloqua and its subsidiaries, taken
as a whole, as compared to other companies participating in the same industry as Eloqua;
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general conditions in the industry in which Eloqua and its subsidiaries operate that do not disproportionately affect Eloqua and its subsidiaries,
taken as a whole, as compared to other companies participating in the same industry as Eloqua;
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any changes (after the date of the merger agreement) in GAAP or applicable law;
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any failure to take any action in compliance with the restrictions and prohibitions described under “—Conduct of Eloqua’s Business
During the Pendency of the Merger” or the taking of any specific action at the written direction of Parent or expressly required by the merger agreement;
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any suit, claim, action, litigation, arbitration or proceeding made or brought by any Eloqua stockholder (on its own behalf or on behalf of Eloqua)
arising out of or related to the merger agreement or any of the transactions contemplated by the merger agreement; or
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any failure of Eloqua to meet internal or analysts’ estimates or projections (although any cause of any such failure may be taken into
consideration when determining whether a material adverse effect on Eloqua has occurred).
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In the merger
agreement, Parent made customary representations and warranties to Eloqua with respect to, among other things:
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the due organization or incorporation (as the case may be), valid existence and good standing of Parent and Merger Subsidiary, and the power of Parent
and Merger Subsidiary;
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the power and authority of each of Parent, Oracle and Merger Subsidiary to enter into the merger agreement and to complete the transactions
contemplated by the merger agreement and the enforceability of the merger agreement against each of Parent, Oracle and Merger Subsidiary;
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the required consents and approvals of governmental authorities in connection with the transactions contemplated by the merger agreement;
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the absence of conflicts with, violations or defaults under Parent’s or Merger Subsidiary’s governing documents, applicable laws or certain
agreements as a result of entering into the merger agreement and the consummation of the merger;
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the accuracy and compliance with applicable securities laws of the information supplied by Parent contained in this proxy statement; and
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the sufficiency of funds to pay the merger consideration.
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The representations and warranties contained in the merger agreement and in any certificate or other writing delivered pursuant to the merger agreement will not survive the effective time of the merger.
This limit does not apply to any covenant or agreement of the parties which by its terms contemplates performance after the effective time of the merger.
Conduct of Eloqua’s Business During the Pendency of the Merger
Except for matters permitted or contemplated by the merger agreement, as required by applicable law or agreed to in writing by Parent, from the date of the merger agreement until the effective time of the
merger, Eloqua will, and will cause each of its subsidiaries to, conduct its business in the ordinary course, consistent with past practice, and use its commercially reasonable efforts to:
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preserve its intellectual property, business organization and material assets;
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keep available the services of its directors, officers and employees;
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maintain in effect all of its government authorizations; and
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maintain satisfactory relationships with its customers, lenders, suppliers, licensors, licensees, distributors and others that have business
relationships with Eloqua.
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In addition, except as expressly permitted or contemplated by the merger
agreement, as required by applicable law or agreed to in writing by Parent, Eloqua will not, nor will it permit its subsidiaries to:
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amend Eloqua’s or any of its subsidiaries’ certificate of incorporation, bylaws or other comparable charter or organizational documents
(whether by merger, consolidation or otherwise);
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declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter
into any agreement with respect to the voting of, any capital stock of Eloqua or any of its subsidiaries, other than dividends and distributions by a direct or indirect wholly owned subsidiary of Eloqua to its parent (except distributions under our
2012 Employee Stock Purchase Plan);
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split, combine or reclassify any capital stock of Eloqua or any of its subsidiaries;
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except as described below, issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of capital
stock of Eloqua or any of its subsidiaries;
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purchase, redeem or otherwise acquire any securities of Eloqua or any of its subsidiaries, except in satisfaction by holders of Eloqua stock options of
the applicable exercise price and/or withholding taxes;
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take any action that would result in the amendment, modification or change of any term of any indebtedness of Eloqua or any of its subsidiaries;
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issue, deliver, sell, grant, pledge, transfer, subject to any lien or otherwise encumber or dispose of any securities of Eloqua or any of its
subsidiaries, other than:
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the issuance of shares of Eloqua common stock upon the exercise of Eloqua stock options that are outstanding as of the date of the merger agreement in
accordance with the applicable equity award’s terms as in effect on the date of the merger agreement;
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the issuance of shares of Eloqua common stock pursuant to the ESPP; or
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the issuance of shares of Eloqua common stock upon the exercise of outstanding warrants;
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amend any term of any securities of Eloqua or any of its subsidiaries (whether by merger, consolidation or otherwise);
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adopt a plan or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization with respect to Eloqua or any of its subsidiaries;
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make any capital expenditures or incur any obligations or liabilities in respect of such expenditures in excess of $1,000,000 in the aggregate in any
fiscal quarter;
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acquire any business, assets or capital stock of any person or entity or division of an entity, whether in whole or in part (whether by purchase of
stock, purchase of assets, merger, consolidation, or otherwise) (other than assets acquired in the ordinary course of business consistent with past practice);
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acquire any other material assets (other than assets acquired in the ordinary course of business consistent with past practice);
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sell, lease, license, pledge, transfer, subject to any lien or otherwise dispose of any of its intellectual property, material assets or material
properties except (1) pursuant to existing contracts or commitments, (2) sales of used equipment in the ordinary course of business consistent with past practice or (3) permitted liens incurred in the ordinary course of business
consistent with past practice;
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hire or engage any employees, consultants or contractors, or induce or encourage any employees, consultants or contractors to resign from Eloqua or any
of its subsidiaries or promote, transfer or change the employment status, titles or terms of employment of any employees;
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increase the salary or other compensation payable to any employees, consultants, contractors or advisors of Eloqua or any of its subsidiaries;
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modify any existing, salary, bonus, commission, severance, equity compensation or other equity arrangement or other compensatory arrangement with any
employees, consultants, contractors or advisors of Eloqua or any of its subsidiaries;
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reprice any right to acquire securities of Eloqua or any of its subsidiaries or amend, accelerate or waive any vesting terms related to any award of
securities of Eloqua or any of its subsidiaries;
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declare, pay, commit to, approve or undertake any obligation for the payment of a bonus, commission or other additional salary, compensation or
employee benefits to any employees, consultants, contractors or advisors of Eloqua or any of its subsidiaries;
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write down any of its material assets, including any intellectual property of Eloqua;
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make any change in any method of financial accounting principles, method or practices, in each case except for any such change required by generally
accepted accounting principles (GAAP) or applicable law;
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repurchase, prepay or incur any indebtedness, including by way of a guarantee or an issuance or sale of debt securities or issue or sell options,
warrants, calls or other rights to acquire any debt securities of Eloqua or any of its subsidiaries, or enter into any “keep well” or other agreement to maintain any financial statement or similar condition of another person (other than
(1) in connection with the financing of ordinary course trade payables consistent with past practice or (2) accounts payable in the ordinary course of business consistent with past practice);
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make any loans, advances or capital contributions to, or investments in, any other person or entity other than (1) Eloqua and its subsidiaries or
(2) accounts receivable and extensions of credit in the ordinary course of business, and advances in respect of expenses to employees, in each case in the ordinary course of business consistent with past practice;
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agree to any exclusivity, non-competition, most favored nation or similar provision or covenant restricting Eloqua, any of its subsidiaries or their
affiliates from competing in any line of business or with any person or entity or in any area or engaging in any activity or business, or pursuant to which any benefit or right would be required to be given or lost as a result thereof, or which
would have any such effect on Parent or its affiliates after the effective time of the merger;
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enter into any contract, or relinquish or terminate any contract or other right, in any individual case with an annual value in excess of $50,000 or
with a value over the life of the contract in excess of $100,000 other than:
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entering into software license or subscription agreements or the renewal of any such existing agreements where Eloqua or any of its subsidiaries is the
licensor in the ordinary course of business consistent with past practice;
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entering into service or maintenance contracts in the ordinary course of business consistent with past practice pursuant to which Eloqua or any of its
subsidiaries is providing services to customers;
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entering into non-exclusive distribution, marketing, reselling or consulting agreements in the ordinary course of business consistent with past
practice that provide for distribution of a product or service of Eloqua or any of its subsidiaries by a third party; or
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entering into non-exclusive OEM agreements in the ordinary course of business consistent with past practice that are terminable without penalty within
twelve months;
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make or change any material tax election, change any annual tax accounting period or adopt or change any material method of tax accounting;
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amend any material tax returns or file any material claim for tax refunds, enter into any closing agreement or tax ruling, enter into any tax
allocation agreement, sharing agreement or indemnity agreement (other than commercial or financing agreements, entered into in the ordinary course of business consistent with past practices), consent to any waiver or extension with respect to any
tax proceeding, file any material tax return (other than an amendment to a tax return) in a manner inconsistent with past practice, or settle any material tax proceeding, or surrender any right to claim a material tax refund (including any scheduled
refund to the extent it is used to offset or otherwise reduce tax liability);
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institute, pay, discharge, compromise, settle or satisfy (or agree to do any of the preceding with respect to) any claims, liabilities or obligations
(whether absolute, accrued, asserted or unasserted, contingent or otherwise), in excess of $100,000 in any individual case, other than (1) as required by their terms as
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in effect on the date of the merger agreement, (2) claims, liabilities or obligations reserved against on the September 30, 2012 balance sheet of Eloqua (for amounts not in excess of
such reserves) or (3) claims, liabilities or obligations incurred since September 30, 2012 in the ordinary course of business consistent with past practice (however, in the case of each of (1), (2) and (3), the payment, discharge,
settlement or satisfaction of such claim, liability or obligation may not include any material obligation (other than the payment of money) to be performed by Eloqua or any of its subsidiaries following the consummation of the merger);
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waive, relinquish, release, grant, transfer or assign any right with a value of more than $100,000 in any individual case except in the ordinary course
of business consistent with past practice;
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waive any material benefits of, or agree to modify in any material adverse respect, or fail to enforce, or consent to any matter with respect to which
its consent is required under, any confidentiality, standstill or similar contract to which Eloqua or any of its subsidiaries is a party;
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pay any fees and expenses incurred in connection with the transactions contemplated by the merger agreement in excess of $100,000;
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engage in (1) any trade loading practices or any other promotional sales or discount activity with any customers or distributors with any intent
of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected (based on past practice) to occur in subsequent fiscal quarters; (2) any practice which would have
the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to be made in subsequent fiscal quarters; (3) any practice which
would have the effect of postponing to subsequent fiscal quarters payments by Eloqua or any of its subsidiaries that would otherwise be expected (based on past practice) to be made in prior fiscal quarters (including the current fiscal quarter); or
(4) any other promotional sales or discount activity, in each case in clauses (1) through (4) in a manner outside the ordinary course of business consistent with past practices; or
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authorize, commit or agree to take any of the actions described above.
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Eloqua Stockholders Meeting
Pursuant to the
terms of the merger agreement, Eloqua agreed to, as promptly as practicable after the date of the merger agreement, establish a record date for, duly call and give notice of, convene and hold a meeting of its stockholders (which we refer to as the
special meeting) for the purpose of obtaining the adoption of the merger agreement by Eloqua stockholders regardless of whether the Eloqua board of directors determines that the merger agreement is no longer advisable or recommends that Eloqua
stockholders reject it or any other adverse recommendation change has occurred. If Eloqua is unable to obtain a quorum of its stockholders at such time, Eloqua may adjourn the date of the special meeting for no more than five business days and
Eloqua must use its commercially reasonable efforts to obtain such a quorum as soon as practicable during the five business day period. Eloqua may adjourn or postpone the special meeting to the extent (and only to the extent) Eloqua reasonably
determines that such adjournment or postponement is required by applicable law. If Eloqua receives an acquisition proposal, or the price or material terms of a previously received acquisition proposal are modified or amended, in any such case during
the five business days immediately prior to the stockholder meeting, Eloqua may delay the stockholder meeting until the seventh business day after the date the special meeting would otherwise have been originally held.
Unless the Eloqua board of directors shall have effected an adverse recommendation change, the Eloqua board of directors will make the
board recommendation (as defined in the section entitled “—Eloqua Board Recommendation”) and use its reasonable best efforts to obtain adoption of the merger agreement by an affirmative vote of the holders of a majority of the
outstanding shares of Eloqua common stock, and Eloqua will otherwise comply with all laws applicable to the stockholder meeting. The foregoing obligations will not be affected by the commencement, public proposal, public disclosure or communication
to Eloqua or any other
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person of any acquisition proposal. In addition, Eloqua shall establish a record date for, call, give notice of, convene and hold the stockholder meeting whether or not an adverse recommendation
change has occurred or any acquisition proposal or superior proposal shall have been publicly proposed or announced or otherwise submitted to Eloqua. Eloqua has agreed that it will not submit any acquisition proposal to a vote of the stockholders
prior to the vote of Eloqua stockholders with respect to the merger at the special meeting.
Non-Solicitation;
Competing Acquisition Proposals
Eloqua has agreed that neither Eloqua nor any of its subsidiaries will, nor will Eloqua or
any of its subsidiaries authorize or permit any of its or their directors, officers, employees, financial advisors, attorneys, accountants, consultants, agents and other authorized representatives (whom we refer to collectively as representatives)
to, and Eloqua will instruct, and cause each applicable subsidiary to instruct, each such representative not to, directly or indirectly, solicit, initiate or knowingly take any action to facilitate or encourage the submission of any acquisition
proposal (as defined below) or the making of any inquiry, offer or proposal that would reasonably be expected to lead to any acquisition proposal or, subject to the third immediately succeeding paragraph:
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conduct or engage in any discussions or negotiations with, disclose any non-public information relating to Eloqua or any of its subsidiaries to, afford
access to the business, properties, assets, books or records of Eloqua or any of its subsidiaries to or otherwise cooperate in any way, or knowingly assist, participate in, facilitate or encourage any effort by, any third party that is seeking to
make or has made any acquisition proposal;
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amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of Eloqua or any of its
subsidiaries;
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approve any transaction under, or any third party becoming an “interested stockholder” under, Delaware law;
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enter into any agreement in principle, letter of intent, term sheet, acquisition agreement, merger agreement, option agreement, joint venture
agreement, partnership agreement or other agreement relating to any acquisition proposal (other than a confidentiality agreement in compliance with certain terms of the merger agreement) or enter into any agreement or agreement in principle
requiring Eloqua to abandon, terminate or fail to consummate the transactions contemplated by the merger agreement or breach its obligations under the merger agreement; or
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resolve, propose or agree to do any of the foregoing.
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Eloqua also agreed to, and agreed to cause its subsidiaries and its or their respective representatives to, cease immediately and cause to be terminated, and not authorize or knowingly permit any of its
or their representatives to continue, any and all existing activities, discussions or negotiations, if any, with any third party conducted prior to the date of the merger agreement with respect to any acquisition proposal and to use its reasonable
best efforts to cause any such third party (or its agents or advisors) in possession of non-public information in respect of Eloqua or any of its subsidiaries that was furnished by or on behalf of Eloqua and its subsidiaries to return or destroy
(and confirm destruction of) all such information.
“Acquisition proposal” means any offer, proposal, inquiry or
indication of interest from any third party relating to any transaction or series of related transactions involving (1) any acquisition or purchase by any person or entity, directly or indirectly, of 15% or more of any class of outstanding
voting or equity securities of Eloqua or any of its subsidiaries, or any tender offer (including a self-tender) or exchange offer that, if consummated, would result in any person or entity beneficially owning 15% or more of any class of outstanding
voting or equity securities of Eloqua or any of its subsidiaries, (2) any merger, amalgamation, consolidation, share exchange, business combination, joint venture or other similar transaction involving Eloqua or any of its subsidiaries, the
business of which constitutes 15% or more of the consolidated net revenues, net income or
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assets of Eloqua and its subsidiaries, (3) any sale, lease, exchange, transfer, license (other than licenses in the ordinary course of business), acquisition or disposition of 15% or more of
the consolidated assets of Eloqua and its subsidiaries (measured by the lesser of book or fair market value thereof) or (4) any liquidation, dissolution, recapitalization, extraordinary dividend or other significant corporate reorganization of
Eloqua or any of its subsidiaries, the business of which constitutes 15% or more of the consolidated net revenues, net income or assets of Eloqua and its subsidiaries.
Notwithstanding the restrictions described above, prior to the adoption of the merger agreement by Eloqua stockholders, the Eloqua board of directors, directly or indirectly through any representative,
may (1) engage in negotiations or discussions with any third party that has made (and not withdrawn) a bona fide unsolicited acquisition proposal in writing after the date of the merger agreement, that did not result from or arise out of a
breach of the non-solicitation provisions of the merger agreement, and that the Eloqua board of directors believes in good faith, after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation,
constitutes or would reasonably be expected to lead to a superior proposal (as defined in “—Eloqua Board Recommendation” ) and (2) thereafter furnish to such third party non-public information relating to Eloqua or any of its
subsidiaries pursuant to a confidentiality agreement meeting certain requirements as set forth in the merger agreement, but in each case under the preceding clauses (1) and (2), only if the Eloqua board of directors determines in good faith,
after consultation with its outside legal counsel, that the failure to take such action would be a breach of its fiduciary duties to Eloqua stockholders under applicable law.
The merger agreement requires Eloqua to give Parent at least 24 hours’ prior written notice before taking any action referred to in clauses (1) or (2) of the immediately preceding
paragraph. Eloqua is required to notify Parent promptly (and in no event later than 24 hours) after it obtains knowledge of the receipt by Eloqua or any of its representatives of any acquisition proposal, any inquiry, offer or proposal that would
reasonably be expected to lead to an acquisition proposal, or any request for non-public information relating to Eloqua or any of its subsidiaries or for access to the business, properties, assets, books or records of Eloqua or any of its
subsidiaries by any third party, in each case in connection with any acquisition proposal or inquiry, offer or proposal that would reasonably be expected to lead to an acquisition proposal. This notice is required to contain the identity of the
third party and a description of the material terms and conditions of the acquisition proposal, indication, offer, proposal or request. Commencing upon the provision of any notice referred to above, Eloqua must (A) on a reasonable and prompt
basis, at a mutually agreeable time, advise Parent (or its counsel) of the status and material terms (including material amendments or proposed amendments as to price and other material terms) of any such acquisition proposal, request or inquiry,
and (B) promptly upon receipt or delivery thereof, provide Parent (or its outside counsel) with copies of all material documents and material written or electronic communications relating to any such acquisition proposal (including the
financing for such proposal), inquiry or request exchanged between Eloqua, its subsidiaries or any of their respective officers, directors, employees or representatives, on the one hand, and the person or entity making an acquisition proposal (or
any of such person’s or entity’s affiliates, or their respective officers, directors, employees, or representatives), on the other hand. Eloqua will promptly provide Parent with any non-public information concerning the business, present
or future performance, financial condition or results of operations of Eloqua (or any of its subsidiaries), provided to any third party that was not previously provided to Parent. Eloqua will provide Parent with at least 48 hours’ prior notice
(or such lesser period of prior notice provided to the members of the Eloqua board of directors) of any meeting of the Eloqua board of directors at which the Eloqua board of directors is reasonably expected to consider any acquisition proposal.
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Eloqua Board Recommendation
Subject to the provisions described below, the Eloqua board of directors will unanimously recommend that Eloqua stockholders vote in favor
of the adoption of the merger agreement at the special meeting (which we refer to as the board recommendation). The Eloqua board of directors also agreed to include the board recommendation in this proxy statement. Subject to the provisions
described below, the merger agreement provides that neither the Eloqua board of directors nor any committee of the board will:
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fail to make, withdraw, amend or modify, or publicly propose to withhold, withdraw, amend or modify, in a manner adverse to Parent or Merger
Subsidiary, the board recommendation;
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approve, endorse, adopt or recommend, or publicly propose to approve, endorse, adopt or recommend, any acquisition proposal or superior proposal;
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fail to recommend against acceptance of any tender offer or exchange offer for Eloqua common stock within ten business days after the commencement of
such offer;
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make any public statement inconsistent with the board recommendation; or
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resolve or agree to take any of the foregoing actions.
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We refer to each of the foregoing actions as an adverse recommendation change.
Notwithstanding anything to the contrary contained in the merger agreement, prior to the adoption of the merger agreement by Eloqua
stockholders, the Eloqua board of directors, following receipt of and on account of a superior proposal, may make an adverse recommendation change or terminate the merger agreement to enter into a definitive agreement with respect to such superior
proposal, but only if the Eloqua board of directors determines in good faith, after consultation with its outside legal counsel, that the failure to make an adverse recommendation change would be a breach of its fiduciary duties under applicable
law. In addition, the Eloqua board of directors will not make an adverse recommendation change or terminate the merger agreement unless Eloqua first takes the following actions:
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Eloqua provides written notice to Parent at least five business days in advance of its intention to take such action or actions with respect to a
superior proposal (which we refer to as the notice period);
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Eloqua attaches to such notice the most current version of the proposed agreement or a reasonably detailed summary of all material terms of the
superior proposal and the identity of the third party making the superior proposal;
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Eloqua, during the notice period, causes its financial and legal advisors to negotiate with Parent in good faith to make such adjustments in the terms
and conditions of the merger agreement so that the acquisition proposal is no longer a superior proposal, if Parent proposes to make such adjustments (it being understood and agreed that in the event that if, after the commencement of the notice
period, there is any material revision to the terms of the superior proposal, including any revision in price, the notice period will be extended to ensure that at least three business days remain in the notice period subsequent to the time that
Eloqua notifies Parent of any such material revision); and
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Parent does not make within the notice period an offer that is determined by the Eloqua board of directors in good faith, after consulting with its
outside legal counsel and its financial advisor, to be at least as favorable to Eloqua stockholders as the superior proposal.
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“Superior proposal” means any binding bona fide, unsolicited, written acquisition proposal that did not result from or arise out of a breach of the non-solicitation provisions of the merger
agreement, made by a third party, that, if consummated, would result in such third party (or, in the case of a direct merger between such third party or any subsidiary of such third party and Eloqua, the stockholder of such third party) owning,
directly or indirectly, all of the outstanding shares of Eloqua common stock, or all or substantially all of the consolidated assets of Eloqua and its subsidiaries, and which acquisition proposal the Eloqua board of directors determines in
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good faith, after considering the advice of its outside legal counsel and a financial advisor of nationally recognized reputation, and after taking into account all of the terms and conditions of
such acquisition proposal (including any termination or breakup fees, expense reimbursement provisions and conditions to consummation), and after taking into account all financial, legal, regulatory, and other aspects of such acquisition proposal
(including the financing terms and the ability of such third party to finance such acquisition proposal), is (1) more favorable to Eloqua stockholders (other than Parent and its affiliates) than as provided in the merger agreement (including
any changes to the terms of the merger agreement proposed by Parent in response to such superior proposal pursuant to and in accordance with the merger agreement), (2) is not subject to any financing condition, (3) is reasonably capable of
being completed on the terms proposed and (4) includes termination rights of a third party on terms no less favorable to Eloqua than the terms set forth in the merger agreement, all from a third party capable of performing such terms.
Notwithstanding anything to the contrary contained in the merger agreement, the Eloqua board of directors also may, in
response to a material fact, event, change, development or set of circumstances (other than an acquisition proposal occurring or arising after the date of the merger agreement) that was not known to the Eloqua board of directors nor reasonably
foreseeable by the Eloqua board of directors as of or prior to the date of the merger agreement (and not relating in any way to any acquisition proposal) (which we collectively refer to as an intervening event), make an adverse recommendation change
if:
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the Eloqua board of directors determines in good faith, after consultation with its outside legal counsel, that, in light of such intervening event,
the failure of the Eloqua board of directors to effect such an adverse recommendation change would be a breach of its fiduciary duties under applicable law;
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at least four business days prior to such adverse recommendation change, Eloqua provides Parent written notice advising Parent that the Eloqua board of
directors intends to take such action and specifying the facts underlying the determination that an intervening event has occurred, and the reasons for the adverse recommendation change, in reasonable detail; and
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during the four business day period, if requested by Parent, Eloqua negotiates in good faith with Parent to amend the merger agreement in such a manner
that prevents the need for an adverse recommendation change as a result of the intervening event.
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Notwithstanding the provisions described above, the merger agreement does not prohibit the Eloqua board of directors from complying with
Rule 14d-9 and Rule 14e-2(a) under the Exchange Act with regard to an acquisition proposal; provided that such disclosure (other than a “stop, look and listen” communication or similar communication of the type contemplated by
Section 14d-9(f) of the Exchange Act) will constitute an adverse recommendation change unless Eloqua’s board of directors expressly publicly reaffirms the board recommendation in such communication or within two business days after
requested to do so by Parent.
Eloqua Equity-Based Awards
The vested portion (including any portion that pursuant to its terms becomes vested solely as a result of the transactions contemplated by
the merger agreement) of each outstanding Eloqua stock option immediately prior to the effective time of the merger, and the vested and unvested portion of each outstanding stock option held by a person who is not an employee of, or a consultant to,
Eloqua or any of its subsidiaries immediately prior to the effective time of the merger, will be cancelled immediately prior to the effective time of the merger and, in exchange, each former holder of any such cancelled compensatory award will have
the right to receive an amount in cash equal to the product of (1) the aggregate number of shares of Eloqua common stock subject to the portion of such cancelled stock option immediately prior to the effective time of the merger and
(2) $23.50 less any per share exercise price of the portion of such cancelled stock option immediately prior to such cancellation.
At the effective time of the merger, the unvested portion of each outstanding stock option held by an employee of, or a consultant to, Eloqua or any of its subsidiaries as of immediately prior to the
effective time of the merger will be assumed by Oracle and converted automatically into an option denominated in shares of
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Oracle common stock and subject to terms and conditions substantially identical to those in effect at the effective time of the merger (including any accelerated vesting provisions), except that
(1) the number of shares of Oracle common stock subject to each assumed stock option shall be determined by multiplying the number of shares of Eloqua common stock subject to the unvested portion of such stock option immediately prior to the
effective time of the merger by a fraction (which we refer to as the option exchange ratio), the numerator of which is the per share merger consideration and the denominator of which is the average closing price of Oracle common stock on NASDAQ over
the five trading days immediately preceding (but not including) the date on which the effective time of the merger occurs (rounded down to the nearest whole share) and (2) the exercise price per share of each such assumed stock option shall
equal (A) the per share exercise price of the unvested portion of each stock option immediately prior to the effective time of the merger divided by (B) the option exchange ratio (rounded to the nearest whole cent). At the effective time
of the merger, each Eloqua stock plan pursuant to which any assumed stock option has been granted also will be assumed by Oracle.
Pursuant to the merger agreement, Parent has agreed to use commercially reasonable efforts to facilitate the assumption and conversion of the assumed stock options, and Oracle will file with the SEC a
registration statement on Form S-8 with respect to the shares of Oracle common stock issuable upon exercise of the assumed stock options promptly following the effective time of the merger (and in no event later than 20 business days after the
effective time of the merger).
Eloqua Employee Stock Purchase Plan
As required by the merger agreement and subject to the closing of the merger, Eloqua will terminate its 2012 Employee Stock Purchase Plan,
or ESPP, and all offerings under such plan, effective as of December 31, 2012. Each outstanding award under the ESPP was exercised on December 31, 2012 for the purchase of shares of Eloqua common stock in accordance with the terms of the
ESPP, and Eloqua refunded to each participant in the ESPP all amounts remaining in such participant’s account after such purchase. Eloqua will provide for no further offering periods under the ESPP pending the merger.
Eloqua Employee Compensation and Benefits
Employee Benefits and Service Credit
. From and after the effective date of the merger, Parent has agreed (1) with respect to employees of Eloqua or its subsidiaries who continue employment
with the surviving corporation or any of its subsidiaries following the effective time of the merger (who we refer to as continuing employees), to use reasonable efforts to provide those employees with credit for prior service with Eloqua to be
recognized for purposes of eligibility to participate, levels of benefits (but not for benefit accruals under any defined benefit pension plan) and vesting under each compensation, vacation, fringe or welfare benefit plan of Oracle, Parent, the
surviving corporation or any of their affiliates (other than equity compensation or sabbatical plans) in which any such employee is or becomes eligible to participate, but only to the extent service was credited to such employee under a comparable
Eloqua employee plan immediately prior to the effective date of the merger and would not result in a duplication of benefits and (2) with respect to employee welfare benefit plans in which any continuing employee is or becomes eligible to
participate, to use reasonable efforts to waive all limitations as to pre-existing conditions, waiting periods, required physical examinations and exclusions with respect to participation and coverage requirements under applicable Parent benefit
plans for such employees and their eligible dependents, subject to certain limitations, and to provide such employees and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that such continuing
employee commences participation under such applicable Parent benefit plans, subject to certain limitations.
401(k)
Plans
. Unless Parent requests otherwise in writing at least ten business days before the effective time of the merger, Eloqua and its subsidiaries will terminate all plans intended to qualify as a tax-qualified retirement plan under
Section 401(k) of the Code, effective as of the day immediately prior to the effective time of the merger. As of the day immediately prior to the effective time of the merger, Eloqua employees will not have the right to contribute to any such
plan. Eloqua will provide Parent with evidence that each such plan has been terminated.
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Other Covenants and Agreements
Access to Information.
From the date of the merger agreement until the effective time of the merger, subject to certain exceptions
described in the merger agreement, Eloqua has agreed to (1) give Parent and its representatives reasonable access to the offices, properties, books, records, agreements, governmental authorizations, documents, directors, officers and employees
of Eloqua and its subsidiaries during normal business hours, (2) furnish to Parent and its representatives such financial, tax and operating data and other information as they may reasonably request and (3) instruct its representatives to
cooperate with Parent and its representatives in Parent’s investigation.
State Takeover Laws
. If any
“control share acquisition,” “fair price,” “moratorium” or other anti-takeover laws or regulations enacted under state, federal or foreign laws becomes or is deemed to be applicable to Eloqua, Parent, Merger Subsidiary,
the merger, the voting agreements or any other transaction contemplated by the merger agreement, then each of Eloqua, Parent, Merger Subsidiary, and their respective board of directors has agreed to grant such approvals and take such actions as are
necessary so that the transactions contemplated by the merger agreement may be consummated as promptly as practicable on the terms contemplated by the merger agreement and otherwise to render such statutes inapplicable.
Voting of Shares
. Parent will vote any shares of Eloqua common stock beneficially owned by it or any of its subsidiaries in favor
of adoption of the merger agreement at the special meeting, and will vote or cause to be voted the shares of Merger Subsidiary held by it or any of its subsidiaries, as the case may be, in favor of adoption of the merger agreement.
Public Announcements
. Parent and Eloqua have agreed that each will consult with the other before issuing any press release or
making any other public statement, or scheduling a press conference or conference call with investors or analysts, with respect to the merger agreement or the transactions contemplated by the merger agreement. Neither will issue any such press
release or make any such other public statement without the consent of the other party, which will not be unreasonably withheld, except as such release or announcement may be required by applicable law or any listing agreement with or rule of any
national securities exchange or association upon which the securities of Eloqua or Parent, as applicable, are listed, or as such release or announcement may be made with respect to an adverse recommendation change, in which case the party making the
release or announcement will consult with the other party about, and allow the other party reasonable time (taking into account the circumstances) to comment on, such release or announcement in advance of such issuance, and the party making the
release or announcement will consider such comments in good faith.
Notification of Certain Events
. Subject to
applicable law and certain limitations, the merger agreement provides that the executive officers of Eloqua, including its chief executive officer, will consult in good faith on a reasonable and prompt basis with Parent to report material
(individually or in the aggregate) operational developments, the status of relationships with customers, resellers, partners, suppliers, licensors, licensees, distributors and others having material business relationships with Eloqua, the status of
ongoing operations and other matters reasonably requested by Parent pursuant to procedures reasonably requested by Parent. In addition, the merger agreement provides that Eloqua will promptly notify Parent of (1) any notice or other
communication alleging that consent from any entity or person is required in connection with the transactions contemplated by the merger agreement, (2) any notice or other communication received from any governmental authority in connection
with the transactions contemplated by the merger agreement, (3) any suit, claim, action, litigation, arbitration or proceeding commenced or, to Eloqua’s knowledge, threatened against, relating to, involving or otherwise affecting Eloqua or
any of its subsidiaries that, if pending on the date of the merger agreement, would have been required to be disclosed pursuant to the merger agreement, or that relate to the consummation of the transactions contemplated by the merger agreement,
(4) any notice or other communication from any major customer or major supplier that such customer or supplier is terminating its relationship with Eloqua or any of its subsidiaries as a result of the transactions contemplated by the merger
agreement and (5) any inaccuracy of any representation or warranty or breach of covenant or agreement in the merger agreement that would reasonably be expected to cause the conditions to the merger not to be satisfied.
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Litigation
. Eloqua has agreed to give Parent the opportunity to participate in the
defense of any proceeding against Eloqua and/or its directors and officers relating to the transactions contemplated by the merger agreement. Eloqua has also agreed that it will obtain the prior written consent of Parent prior to settling or
satisfying any such proceeding.
Reasonable Best Efforts
Subject to the terms and conditions of the merger agreement, each of Eloqua and Parent will use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable law, Eloqua’s contracts with third parties, or otherwise, to
consummate the transactions contemplated by the merger agreement including (1) the obtaining from governmental authorities all necessary actions or nonactions, waivers, consents and approvals and the making of all necessary registrations and
filings (including filings with governmental authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any governmental authority, (2) the
delivery of required notices to, and the obtaining of required consents or waivers from, third parties, and (3) the execution and delivery of any additional instruments necessary to consummate the merger and to fully carry out the purposes of
the merger agreement. The obligations described above require Eloqua to provide notice of the proposed merger to the holder of a warrant to purchase Eloqua common stock and take all actions required to ensure that this warrant will terminate at the
closing of the merger (if not exercised before then).
Parent and Eloqua have further agreed to (1) provide or cause to
be provided, as promptly as practicable to governmental authorities with regulatory jurisdiction over enforcement of any antitrust laws, information and documents requested by such governmental antitrust authorities or necessary, proper or advisable
to permit completion of the transactions contemplated by the merger agreement, including preparing and filing any notification and report form and related material required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder (which we refer to as the HSR Act) and any additional consents and filings under any antitrust laws as promptly as practicable following the date of the merger agreement (but in no event more than
fifteen business days from the date of the merger agreement except by mutual consent confirmed in writing) and thereafter to respond as promptly as practicable to any request for additional information or documentary material that may be made under
the HSR Act and any additional consents and filings under any antitrust laws; and (2) use their reasonable best efforts to take such actions as are necessary or advisable to obtain prompt approval of consummation of the transactions
contemplated by the merger agreement by any governmental authority.
The merger agreement provides that in connection with the
receipt of any necessary governmental approvals or clearances (including under any antitrust law), neither Parent nor any of its affiliates is required to, nor shall Eloqua or any of its affiliates without the prior written consent of Parent, agree
or offer to, divest, hold separate, or enter into any license or similar agreement with respect to, or agree to restrict the ownership or operation of, or agree to conduct or operate in a specified manner, any portion of the business or assets of
Parent, Eloqua or any of their respective affiliates. Parent or any of its affiliates will not be obligated to litigate or participate in the litigation of any proceeding, whether judicial or administrative, brought by any governmental authority or
appeal any order (1) challenging or seeking to make illegal, delay materially or otherwise directly or indirectly restrain or prohibit the consummation of the merger or other transactions contemplated by the merger agreement or seeking to
obtain from Parent or any of its affiliates any damages in connection therewith, or (2) seeking to prohibit or limit in any respect, or place any conditions on, the ownership or operation by Eloqua, Parent or any of their respective affiliates
of all or any portion of the business, assets or any product of Eloqua, Parent or any of their respective affiliates or to require any such entity to dispose of, license (whether pursuant to an exclusive or nonexclusive license) or enter into a
consent decree or hold separate all or any portion of the business, assets or any product of Eloqua, Parent or any of their respective affiliates, in each case as a result of or in connection with the merger or any of the other transactions
contemplated by the merger agreement.
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Subject to applicable law relating to the exchange of information, Eloqua and Parent and
their respective counsel will (1) have the right to review in advance, and to the extent practicable each will consult the other on, any filing made with, or written materials to be submitted to, any governmental authority in connection with
the transactions contemplated by the merger agreement, (2) promptly inform each other of any communication (or other correspondence or memoranda) received from, or given to, the U.S. Department of Justice, the FTC or any other governmental
antitrust authority and (3) promptly furnish each other with copies of all correspondence, filings and written communications between them or their subsidiaries or affiliates, on the one hand, and any governmental authority or its respective
staff, on the other hand, with respect to the transactions contemplated by the merger agreement. Eloqua and Parent will, to the extent practicable, provide the other party and its counsel with advance notice of and the opportunity to participate in
any discussion, telephone call or meeting with any governmental authority in respect of any filing, investigation or other inquiry in connection with the transactions contemplated by the merger agreement and to participate in the preparation for
such discussion, telephone call or meeting. However, neither Parent nor Eloqua will commit to or agree with any governmental authority to stay, toll or extend any applicable waiting period under the HSR Act or applicable foreign competition laws,
without the prior written consent of the other.
Each of Parent and Merger Subsidiary has agreed that, until the effective
time of the merger, each will not, and will ensure that none of their subsidiaries or other affiliates will, take any action or propose, announce an intention or agree, in writing or otherwise, to take any action that would reasonably be expected to
materially delay or prevent the completion of the transactions contemplated by the merger agreement.
Conditions
to the Merger
The obligations of Oracle, Parent and Merger Subsidiary, on the one hand, and Eloqua, on the other hand, to
consummate the merger are subject to the satisfaction at or prior to the closing of the merger of the following conditions:
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adoption of the merger agreement by an affirmative vote of the holders of a majority of the outstanding shares of Eloqua common stock;
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no governmental authority with jurisdiction over any party will have issued any order, injunction, judgment, decree or ruling or taken any other action
that is in effect (whether temporary, preliminary or permanent) restraining, enjoining or otherwise prohibiting the consummation of the merger; and
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no law or regulation will have been adopted that makes the consummation of the merger illegal or otherwise prohibited.
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The obligations of Parent and Merger Subsidiary to consummate the merger are subject to the satisfaction of the additional following
conditions:
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the representations and warranties of Eloqua made in the merger agreement relating to corporate existence and power, corporate authorization,
non-contravention of Eloqua’s certificate of incorporation or bylaws, capitalization matters, finders’ fees, the opinion of Eloqua’s financial advisor, the inapplicability of state takeover statutes to the merger and the absence of a
“poison pill” stockholder rights plan, to the extent not qualified as to materiality or material adverse effect, will be true in all material respects, and to the extent so qualified will be true in all respects, when made and as of
immediately prior to the effective time of the merger (other than those representations and warranties that were made only as of a specified date, which need only be true, to the extent not qualified as to materiality or material adverse effect, in
all material respects, and to the extent so qualified, in all respects, in each case as of such specified date);
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the other representations and warranties of Eloqua made in the merger agreement, disregarding materiality or material adverse effect qualifications,
will be true when made and as of immediately prior to the effective time of the merger (other than those representations and warranties that were
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made only as of a specified date, which need only be true as of such specified date), provided that such representations and warranties will be deemed to be true unless the individual or
aggregate impact of the failure to be so true would have or would reasonably be expected to have a material adverse effect on Eloqua;
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Eloqua will have performed, in all material respects, its obligations under the merger agreement on or prior to the consummation of the merger;
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Parent will have received certificates signed on Eloqua’s behalf by a senior executive officer of Eloqua as to the satisfaction of the conditions
described in the preceding three bullets;
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Eloqua will have delivered to Parent a certificate executed by the secretary of Eloqua certifying: (A) the approval of the Eloqua board of
directors and the stockholders of Eloqua of the merger agreement and the transactions contemplated by the merger agreement; (B) the governing documents of Eloqua and each of its subsidiaries; (C) the name, title, incumbency and signatures
of the officers authorized to execute the merger agreement and the other agreements contemplated by the merger agreement to which Eloqua is a party; and (D) any and all Eloqua board of directors, committee and stockholder resolutions, consents
or other actions taken by the Eloqua board of directors, any committee of the Eloqua board of directors or the stockholders of Eloqua between the date of the merger agreement and the closing date;
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there will not be pending or overtly threatened any suit, claim, action or proceeding initiated by any governmental authority, (1) challenging or
seeking to make illegal, delay materially or otherwise restrain or prohibit the consummation of the merger or seeking to obtain material damages, (2) seeking to restrain or prohibit Parent’s (or that of its affiliates) ownership or
operation of all or any material portion of the business, assets or products of Eloqua and its subsidiaries, taken as a whole, or of Parent and its affiliates, taken as a whole, or to compel Parent or any of its affiliates to dispose of, license or
hold separate all or any material portion of the business, assets or products of Eloqua and its subsidiaries, taken as a whole, or of Parent and its affiliates, taken as a whole, (3) seeking to impose or confirm material limitations on the
ability of Parent or any of its affiliates effectively to acquire, hold or exercise full rights of ownership of Eloqua common stock or any shares of common stock of the surviving corporation, including the right to vote such shares on all matters
properly presented to Eloqua stockholders, or (4) seeking to require divestiture by Parent, Merger Subsidiary or any of Parent’s other affiliates of any equity interests;
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there will not be in effect any order, injunction, judgment, decree or ruling that is reasonably likely to result, directly or indirectly, in any of
the effects referred to in clauses (1) through (4) of the preceding bullet point;
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the waiting period applicable to the merger under the HSR Act or any applicable foreign competition law will have expired or been terminated and any
affirmative approval of a governmental authority required under any applicable foreign competition law will have been obtained;
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except as expressly permitted or contemplated by the merger agreement, as required by applicable law or agreed to in writing by Parent, Eloqua, in all
respects, will not have done any of the following since the date of the merger agreement:
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hired or engaged any employee, consultant or contractor, or induced or encouraged any employee, consultant or contractor to resign from Eloqua or any
of its subsidiaries or promoted, transferred or changed the employment status, title or terms of employment of any employee;
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increased the salary or other compensation payable to any employee, consultant, contractor or advisor of Eloqua or any of its subsidiaries;
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modified any existing salary, bonus, commission, severance, equity compensation or other equity arrangement or other compensatory arrangement with any
employee, consultant, contractor or advisor of Eloqua or any of its subsidiaries;
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modified or waived any of the terms or conditions of, or the performance or other criteria to payment or earning of, the arrangements referenced in the
preceding bullet point;
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repriced any right to acquire securities of Eloqua or any of its subsidiaries or amended, accelerated or waived any vesting terms related to any award
of securities of Eloqua or any of its subsidiaries; or
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declared, paid, committed to, approved or undertook any obligation for the payment of a bonus, commission or other additional salary, compensation or
employee benefit to any employee, consultant, contractor or advisor of Eloqua or any of its subsidiaries; and
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there will not have been any fact, event, change, development or set of circumstances that has had or would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on Eloqua.
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The obligation of Eloqua to
consummate the merger is subject to the satisfaction of the additional following conditions:
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the representations and warranties of Parent and Merger Subsidiary made in the merger agreement will be true and correct in all material respects
(other than those representations and warranties that were made only as of a specified date, which need only be true and correct in all material respects as of such specified date);
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Parent and Merger Subsidiary will have performed in all material respects their respective obligations under the merger agreement;
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Eloqua will have received a certificate signed on Parent’s behalf by an authorized officer of Parent as to the satisfaction of the conditions
described in the preceding two bullets; and
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the waiting period applicable to the merger under the HSR Act will have expired or been terminated.
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The above conditions may be amended or waived prior to the effective time of the merger if such amendment or waiver is in writing and is
signed, in the case of an amendment, by each party to the merger agreement or, in the case of a waiver, by each party against whom the waiver is to be effective. However, subsequent to the adoption of the merger agreement by Eloqua stockholders, no
such amendment or waiver of the above conditions or any other amendment to the merger agreement will be made that requires the approval of Eloqua stockholders under Delaware law unless the required further approval is obtained.
Termination of the Merger Agreement
Eloqua and Parent may terminate the merger agreement by mutual written consent at any time before the consummation of the merger, notwithstanding any approval of the merger agreement by the Eloqua
stockholders. In addition, either Parent or Eloqua may terminate the merger agreement at any time before the consummation of the merger if:
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the merger has not been consummated on or before June 19, 2013 (which we refer to as the end date); however, if (1) the conditions to the
consummation of the merger by Parent and Merger Subsidiary that are specific to Parent and Merger Subsidiary have been satisfied, other than the expiration or termination of the applicable waiting period under the HSR Act and applicable foreign
competition laws and the obtainment of any affirmative approval of any governmental authority required under any applicable foreign competition law, then Parent will be entitled to extend the end date by up to two three-month periods, and
(2) the conditions to the consummation of the merger by Eloqua that are specific to Eloqua have been satisfied, other than the expiration or termination of the applicable waiting period under the HSR Act, then Eloqua will be entitled to extend
the end date by a three-month period, but in no event may the end date be extended by Parent or Eloqua to a date that is later than December 19, 2013; provided that such right to terminate the merger agreement will not be available to any party
whose material breach of any provision of the merger agreement results in the failure of the merger to be consummated by the end date;
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any governmental authority of competent jurisdiction has issued an order, decree, injunction or ruling or takes any other action permanently enjoining,
restraining or otherwise prohibiting the consummation of the merger and such order, decree, ruling or other action becomes final and non-appealable;
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any law or regulation has been adopted that makes consummation of the merger illegal or otherwise prohibited; or
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the special meeting has been held and the adoption of the merger agreement by Eloqua stockholders has not been obtained at the special meeting or at
any adjournment or postponement of that meeting.
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Parent may also terminate the merger agreement if:
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an adverse recommendation change (as defined in the section entitled “—Eloqua Board Recommendation”) has occurred;
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Eloqua has entered into, or publicly announced its intention to enter into, a letter of intent, memorandum of understanding or other contract (other
than a confidentiality agreement) relating to an acquisition proposal;
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Eloqua or any of its representatives has willfully and materially breached any of its obligations under the non-solicitation provisions in the merger
agreement;
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the Eloqua board of directors or any committee of the board (A) has failed to reject any acquisition proposal within ten business days of the
making public of such proposal (including, for these purposes, by taking no position with respect to the acceptance by the stockholders of Eloqua of a tender offer or exchange offer) or (B) has failed, pursuant to Rule 14e-2 promulgated
under the Exchange Act, or otherwise, to publicly reconfirm the board recommendation within ten business days after receipt of a written request from Parent that it do so if such request is made following the making by any person or entity of an
acquisition proposal; or
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Eloqua has materially breached any of its covenants or agreements contained in the merger agreement, or if any representation or warranty of Eloqua set
forth in the merger agreement was inaccurate when made or has become inaccurate, in either case such that the conditions to the merger relating to the accuracy of Eloqua’s representations and warranties and performance of covenants or
agreements would not be satisfied as of the time of such breach or as of the time such representation and warranty became inaccurate, and such breaches or inaccuracies are either not cured or curable by Eloqua through the exercise of commercially
reasonable efforts prior to the end date and within 30 days or Eloqua ceases to exercise commercially reasonably efforts to cure such breaches or inaccuracies.
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Eloqua may also terminate the merger agreement if:
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prior to the adoption of the merger agreement by Eloqua stockholders, the Eloqua board of directors has authorized Eloqua, in compliance with the terms
of the merger agreement, to enter into a binding definitive agreement in respect of a superior proposal with a third party, provided that (1) Eloqua pays any amounts due as described below under “—Termination Fees and Expenses”
and (2) Eloqua substantially concurrently enters into such binding definitive agreement; or
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Parent or Merger Subsidiary has materially breached any of its covenants or agreements contained in the merger agreement, or if any representation or
warranty of Parent or Merger Subsidiary has become inaccurate in any material respect, and such breaches or inaccuracies are either not cured or curable by Parent or Merger Subsidiary through the exercise of commercially reasonable efforts prior to
the end date and within 30 days or Parent or Merger Subsidiary ceases to exercise commercially reasonable efforts to cure such breaches or inaccuracies.
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The party that desires to terminate the merger agreement must give written notice of termination to each other party to the merger agreement, except in the case of termination by mutual written consent.
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Termination Fees and Expenses
If the merger agreement is terminated, it will become void and of no effect without liability of any party (or any stockholder, director,
officer, employee, agent, consultant or other representative of such party) to each other party to the merger agreement. No such termination will relieve any party of any liability for damages resulting from any willful or intentional breach of the
merger agreement.
Notwithstanding the foregoing, if Parent terminates the merger agreement because:
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an adverse recommendation change occurs;
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Eloqua enters into, or publicly announces its intention to enter into, a letter of intent, memorandum of understanding or other agreement (other than a
permitted confidentiality agreement) relating to any acquisition proposal;
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Eloqua or any of its representatives willfully and materially breaches any of its obligations under the non-solicitation provisions in the merger
agreement; or
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the Eloqua board of directors or any committee of the board (1) fails to reject any acquisition proposal within ten business days of the making
public of such proposal (including, for these purposes, by taking no position with respect to the acceptance by the stockholders of Eloqua of a tender offer or exchange offer) or (2) fails, pursuant to Rule 14e-2 promulgated under the
Exchange Act, or otherwise, to publicly reconfirm the board recommendation within ten business days after receipt of a written request from Parent that it do so if such request was made following the making by any person or entity of an acquisition
proposal;
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then Eloqua will pay to Parent, within two business days after any such termination, $31.5 million (which we
refer to as the termination fee). Additionally, Eloqua will pay to Parent the termination fee within two business days after termination, if the merger agreement is terminated pursuant to any other termination provisions of the merger agreement
after the occurrence of any event described in the preceding four bullets.
If Eloqua terminates the merger agreement because,
prior to the adoption of the merger agreement by Eloqua stockholders, the Eloqua board of directors authorizes Eloqua, in compliance with the other terms of the merger agreement, to enter into a binding definitive agreement in respect of a superior
proposal with a third party and Eloqua substantially concurrently enters into such binding definitive agreement, then Eloqua will pay to Parent, prior to and as a condition of such termination, the termination fee.
Subject to certain changes to the definition of “acquisition proposal” as set forth in the merger agreement, if either Eloqua
or Parent terminates the merger agreement because:
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the merger is not consummated on or before the end date (as such end date may be extended as described above under “—Termination of the
Merger Agreement”); or
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the stockholder meeting has been held and the adoption of the merger agreement by Eloqua stockholders has not been obtained at the special meeting or
at any adjournment or postponement of that meeting,
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and (A) prior to such termination, in the case of the first bullet
point above, or the stockholder meeting, in the case of the second bullet point above, an acquisition proposal has been publicly announced and not publicly withdrawn and (B) within 12 months following the date of such termination, Eloqua enters
into a definitive agreement with respect to, recommends to its stockholders or completes a transaction contemplated by any acquisition proposal (with such proposal involving the acquisition of 50% of a class of Eloqua’s outstanding equity
securities or 50% of Eloqua’s consolidated assets or net revenue), then Eloqua will pay to Parent, within two business days after entering into such definitive agreement, making such recommendation or consummating such transaction, the
termination fee.
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If either Parent or Eloqua terminates the merger agreement because the special meeting has
been held and the adoption of the merger agreement by Eloqua stockholders has not been obtained at the special meeting or at any adjournment or postponement of that meeting, Eloqua will pay all of the documented reasonable out-of-pocket fees and
expenses (including reasonable legal and other third party advisor fees and expenses) actually incurred by Parent and its affiliates on or prior to the termination of the merger agreement in connection with the transactions contemplated by the
merger agreement. In no event will Eloqua be required to pay Parent for expenses exceeding $5.0 million. The amount of any such payment of expenses will be credited against any obligation of Eloqua to pay Parent the termination fee. Eloqua will make
such payment as promptly as possible (but in any event within three business days) following receipt of an invoice for such expenses.
Eloqua acknowledged in the merger agreement that the agreements contained in the provisions regarding the termination fee are an integral part of the transactions contemplated by the merger agreement and
that, without those provisions, Parent and Merger Subsidiary would not have entered into the merger agreement. If Eloqua fails to pay the foregoing fees to Parent when due, Eloqua will pay the costs and expenses (including legal fees and expenses)
in connection with any action taken to collect payment (including the prosecution of any lawsuit or other legal action), together with interest on the unpaid amount at the prime rate of Citibank.
Parent acknowledged in the merger agreement that the termination fee will be payable by Eloqua on only one occasion, whether or not the
facts or circumstances giving rise to Eloqua’s obligation to pay the termination fee may otherwise trigger an obligation to pay the termination fee under more than one provision of the merger agreement, or on more than one occasion pursuant to
the same provision of the merger agreement.
Except as expressly set forth in the merger agreement, all costs and expenses
incurred in connection with the merger agreement will be paid by the party incurring such costs and expenses; provided that Parent will pay all filing fees payable pursuant to the HSR Act or any applicable foreign competition law unless the merger
agreement is terminated as described above under “—Termination of the Merger Agreement” (other than termination by Eloqua because Parent or Merger Subsidiary has materially breached any of its covenants or agreements contained in the
merger agreement, or if any representation or warranty of Parent or Merger Subsidiary shall have become inaccurate in any material respect), in which case Eloqua will reimburse Parent for one-half of such filing fees.
Compliance with Obligations
Oracle has agreed to cause Parent to honor Parent’s obligations by Parent and Merger Subsidiary under the merger agreement and the transactions contemplated under the merger agreement.
Governing Law
The merger agreement is governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.
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THE VOTING AGREEMENTS
In connection with the execution of the merger agreement, our directors and executive officers, consisting of Joseph P. Payne, Alex P.
Shootman, Donald E. Clarke, Heidi Melin, Andre H.S. Yee, Stephen E. Holsten, Byron B. Deeter, Neal Dempsey, John J. McDonnell, Jr., Thomas Reilly, Stephen M. Swad, and Bradford D. Woloson, and certain other stockholders, consisting of Bay Partners
X, LP, Bay Partners X Entrepreneurs Fund, LP, BVP VII E Ltd., BVP VII E Institutional Ltd., JMI Equity Fund IV Trust, JMI Equity Fund IV (AI) Trust, JMI Associates IV Trust, and JMI Associates IV (AI) Trust, entered into voting agreements with
Parent in their capacity as stockholders of Eloqua. The Bay entities are affiliated with our director Neal Dempsey, the BVP entities are affiliated with our director Byron B. Deeter, and the JMI Trusts are affiliated with our director Bradford D.
Woloson. Approximately
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% of the outstanding Eloqua shares on the record date for the special meeting are subject to the voting agreements, which represents sufficient shares of Eloqua common stock
to adopt the merger agreement.
The following is a summary description of the voting agreements. The form of voting agreement
is attached as Exhibit A to the merger agreement included as Annex A to this proxy statement, and is incorporated into this proxy statement by reference.
Each person who entered into a voting agreement with Parent agreed to vote his, her or its Eloqua common stock at the special meeting:
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in favor of adoption and approval of the merger agreement, the merger and all agreements and actions contemplated by the merger agreement;
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against an acquisition proposal by a third party;
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against any reorganization, recapitalization, dissolution, liquidation or winding-up of Eloqua or any other extraordinary transaction involving Eloqua,
other than the merger; and
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against any corporate action that would frustrate the purpose of, or prevent or delay the consummation of, the merger or the transactions contemplated
by the merger agreement.
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Each such person also granted to Parent a proxy to vote his, her or its shares of Eloqua common
stock on any of the foregoing matters at the special meeting.
The persons signing voting agreements have agreed that they
will be bound by non-solicitation restrictions that are substantially similar to the non-solicitation provisions of the merger agreement described above under “The Merger Agreement—Non-Solicitation; Competing Acquisition Proposals.”
These persons further agreed to certain restrictions on the transfer of their Eloqua shares and, subject to applicable law, not to make certain public communications criticizing or disparaging the voting agreement, the merger agreement and the
transactions contemplated thereby without the prior written consent of Parent. These persons further agreed to waive and not exercise any rights of appraisal or rights to dissent from the merger that they may be entitled to under Delaware law, and
not commence or participate in, and take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Eloqua, Parent or Merger Subsidiary relating to the negotiation, execution or
delivery of the voting agreement or the merger agreement or the consummation of the merger, including any claim challenging the validity of, or seeking to enjoin the operation of, any provision of the voting agreement or alleging a breach of any
fiduciary duty of the Eloqua board of directors in connection with the merger agreement or the transactions contemplated by the merger agreement.
The voting agreements terminate upon the earlier of the effective time of the merger or the termination of the merger agreement in accordance with its terms, including in the event that Eloqua terminates
the merger agreement in order to enter into a definitive agreement with a third party in respect of a superior proposal.
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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS WITH RESPECT TO
THE MERGER
The following is a summary of certain material United States federal income tax considerations applicable to
our stockholders of the receipt of cash in exchange for shares of Eloqua common stock pursuant to the merger. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (which we refer to as the Code), applicable
United States Treasury Regulations, judicial authority and administrative rulings and practice, all as in effect on the date of this proxy statement. All of these authorities are subject to change, possibly on a retroactive basis and to differing
interpretations, all of which could result in tax considerations different from those described below. This discussion assumes that the shares of Eloqua common stock are held as capital assets (generally, as property held for investment). This
discussion does not address all aspects of United States federal income taxation that may be relevant to a particular stockholder in light of such stockholder’s unique investment circumstances, or to stockholders subject to special treatment
under the United States federal income tax laws (for example, life insurance companies, dealers or brokers in securities or currencies, tax-exempt organizations, financial institutions, partnerships, United States expatriates, controlled foreign
corporations, passive foreign investment companies, “U.S. holders” (as defined below) whose functional currency is not the U.S. dollar, stockholders who hold shares of Eloqua common stock as part of a hedging, “straddle,”
conversion or other integrated transaction, “non-U.S. holders” (as defined below) that own, or have owned, actually or constructively, more than 5% of Eloqua common stock, stockholders who acquired their shares of Eloqua common stock
through the exercise of employee stock options or other compensation arrangements or stockholders who receive cash pursuant to the exercise of appraisal rights). In addition, this discussion is general in nature and does not address any aspect of
state, local, alternative minimum, estate, gift or non-United States taxation that may be applicable to a particular stockholder.
Eloqua stockholders should consult their own tax advisors to determine the particular tax consequences to them of the receipt of cash in exchange for shares of Eloqua common stock pursuant to the
merger (including the application and effect of any state, local or non-United States income and other tax laws).
If a
partnership (or an entity or arrangement taxable as a partnership for United States federal income tax purposes) holds shares of Eloqua common stock, the tax treatment of a partner generally will depend on the status of the partner and activities of
the partnership. If you are a partner of a partnership holding Eloqua common stock, you should consult your own tax advisor.
For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Eloqua common stock that is:
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a citizen or individual resident of the United States;
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a corporation, or other entity taxable as a corporation for United States federal income tax purposes, created or organized in or under the laws of the
United States or any state in the United States or the District of Columbia;
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a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to
control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person; or
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an estate that is subject to United States federal income tax on all of its income regardless of source.
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A “non-U.S. holder” is a beneficial owner (other than a partnership or other entity or arrangement taxable as a partnership for
United States federal income tax purposes) of Eloqua common stock that is not a U.S. holder.
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U.S. Holders
The receipt of cash in the merger generally will be a taxable transaction to U.S. holders for United States federal income tax purposes.
Generally, a U.S. holder of shares of Eloqua common stock will recognize gain or loss equal to the difference between the amount of cash received in the merger and such holder’s adjusted tax basis in the shares of Eloqua common stock converted
into cash pursuant to the merger. Gain or loss will be determined separately for each block of shares (that is, shares acquired at the same cost in a single transaction) owned by a U.S. holder. If the shares of Eloqua common stock have been held for
more than one year at the effective time of the merger, the gain or loss generally will be long-term capital gain or loss, and will be short-term capital gain or loss if the shares have been held for one year or less. Long-term capital gains
recognized by non-corporate U.S. holders may be subject to reduced tax rates. The deductibility of capital losses is subject to limitation.
Information returns will be filed with the Internal Revenue Service in connection with payments to a U.S. holder pursuant to the merger, unless the U.S. holder is an exempt recipient. Under the United
States federal income tax backup withholding rules, the exchange agent generally will be required to withhold 28% of all payments to which a U.S. holder is entitled in the merger, unless the U.S. holder (1) is a corporation or comes within
other exempt categories and demonstrates this fact or (2) provides its correct tax identification number (social security number, in the case of an individual, or employer identification number in the case of other stockholders), certifies
under penalties of perjury that the number is correct, certifies as to no loss of exemption from backup withholding and otherwise complies with the applicable requirements of the backup withholding rules. Each U.S. holder should complete, sign and
return to the exchange agent for the merger the Internal Revenue Service Form W-9 that each stockholder will receive with the letter of transmittal following completion of the merger in order to provide the information and certification necessary to
avoid backup withholding, unless an applicable exception exists and is proved in a manner satisfactory to the exchange agent. Backup withholding is not an additional tax. Generally, any amounts withheld under the backup withholding rules described
above may be credited against a holder’s United States federal income tax liability, if any, or refunded by the Internal Revenue Service provided that the required information is furnished to the Internal Revenue Service in a timely manner.
Each U.S. holder should consult its own tax advisors as to the qualifications for an exemption from backup withholding and the procedures for obtaining such exemption.
Non-U.S. Holders
Any gain realized on the
receipt of cash pursuant to the merger by a non-U.S. holder generally will not be subject to United States federal income tax unless:
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the gain is effectively connected with a United States trade or business of such non-U.S. holder (and, if an applicable income tax treaty so provides,
is also attributable to a permanent establishment in the United States maintained by such non-U.S. holder), in which case the non-U.S. holder generally will be taxed at graduated United States federal income tax rates applicable to United States
persons (as defined under the Code), and, if the non-U.S. holder is a foreign corporation, an additional branch profits tax may apply to its effectively connected earnings and profits for the taxable year at the rate of 30% (or such lower rate as
may be specified by an applicable income tax treaty); or
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•
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the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days or more in the taxable year of the merger and
certain other conditions are met, in which case the non-U.S. holder will be subject to a 30% tax on the non-U.S. holder’s gain realized in the merger (unless an exception is provided under an applicable treaty), which may be offset by U.S.
source capital losses of the non-U.S. holder, if any.
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A non-U.S. holder will be subject to information
reporting, and, in certain circumstances, backup withholding may apply to the cash received pursuant to the merger, unless the non-U.S. holder certifies under penalties of perjury that it is a non-U.S. person (and the payor does not have actual
knowledge or reason to know
73
that the holder is a United States person as defined under the Code) or such holder otherwise establishes an exemption. To avoid backup withholding, non-U.S. holders generally must submit a
properly executed Form W-8BEN, “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding” or other applicable Form W-8. Backup withholding is not an additional tax. Generally, any amounts withheld under the
backup withholding rules described above may be credited against a non-U.S. holder’s United States federal income tax liability, if any, or refunded by the Internal Revenue Service provided that the required information is furnished to the
Internal Revenue Service in a timely manner. Each non-U.S. holder should consult its own tax advisors as to the qualifications for an exemption from backup withholding and the procedures for obtaining such exemption.
The foregoing discussion of certain material United States federal income tax consequences is not intended to be, and should not be
construed as, legal or tax advice to any holder of shares of Eloqua common stock. You should consult your own tax advisors to determine the particular tax consequences to you (including the application and effect of any state, local or non-United
States income and other tax laws) of the receipt of cash in exchange for shares of Eloqua common stock pursuant to the merger.
74
REGULATORY MATTERS
Mergers and acquisitions that may have an impact in the United States are subject to review by the United States Department of Justice
(which we refer to as the Antitrust Division) and the Federal Trade Commission (which we refer to as the FTC) to determine whether they comply with applicable antitrust laws. Under the HSR Act, mergers and acquisitions that meet certain
jurisdictional thresholds, such as the present transaction, may not be completed until the expiration of a waiting period that follows the filing of notification forms by both parties to the transaction with the Antitrust Division and the FTC. The
initial waiting period is 30 days, but this period may be shortened if the reviewing agency grants “early termination” of the waiting period, or it may be lengthened if the reviewing agency determines that an in-depth investigation is
required and issues a formal request, or “second request”, for additional information and documentary material. Parent and Eloqua filed pre-merger notifications with the U.S. antitrust authorities pursuant to the HSR Act on
December 21 and December 26, 2012, respectively, and, in accordance with the merger agreement, each requested “early termination” of the waiting period.
LITIGATION RELATED TO THE MERGER
Purported
class action lawsuits, captioned
Bradley Christopher Kahl v. Eloqua, Inc., et al
., 1:13 CV7-LO-IDD, filed on January 3, 2013 in the United States District Court for the Eastern District of Virginia and
Florin Ursu v. Joseph P. Payne, et
al.
,
filed on January 7, 2013 in the Delaware Court of Chancery, each name as defendants Eloqua, the members of our board of directors, Oracle, Parent and Merger Subsidiary. The lawsuits allege that the defendants breached and/or aided
and abetted the breach of their fiduciary duties to Eloqua’s stockholders by seeking to sell the company through an allegedly unfair process and for an unfair price and on unfair terms. The complaints seek equitable relief, including, among
other things, to enjoin consummation of the proposed merger, rescission of the merger agreement and an award of all costs of the action, including reasonable attorneys’ fees and costs, and in the
Ursu
case, also seeking rescissory and
other damages.
75
APPRAISAL RIGHTS
Under Section 262 of the DGCL, any holder of Eloqua common stock who does not wish to accept the merger consideration may elect to
exercise appraisal rights in lieu of receiving the merger consideration. A stockholder who exercises appraisal rights may petition the Delaware Court of Chancery to determine the “fair value” of his, her or its shares, exclusive of any
element of value arising from the accomplishment or expectation of the merger, and receive payment of fair value in cash, together with a fair rate of interest, if any. However, the stockholder must comply with the provisions of Section 262 of
the DGCL.
The following discussion is a summary of the law pertaining to appraisal rights under the DGCL. The full text of
Section 262 of the DGCL is attached to this proxy statement as Annex C. All references in Section 262 of the DGCL to a “stockholder” and in this summary to a “stockholder” are to the record holder of the shares of
Eloqua common stock.
Under Section 262 of the DGCL, when a merger is submitted for approval at a meeting of
stockholders, as in the case of the merger agreement, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy
of Section 262 of the DGCL. This proxy statement constitutes such notice, and the applicable statutory provisions are attached to this proxy statement as Annex C. This summary of appraisal rights is not a complete summary of the law pertaining
to appraisal rights under the DGCL and is qualified in its entirety by the text of Section 262 of the DGCL attached as Annex C. Any holder of Eloqua common stock, who wishes to exercise appraisal rights or who wishes to preserve the right to do
so, should review the following discussion and Annex C carefully. Failure to comply with the procedures of Section 262 of the DGCL in a timely and proper manner will result in the loss of appraisal rights. If you lose your appraisal rights, you
will be entitled to receive the merger consideration described in the merger agreement.
Stockholders wishing to exercise the
right to seek an appraisal of their shares must do ALL of the following:
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The stockholder must deliver to Eloqua a written demand for appraisal before the vote on the merger agreement at the special meeting.
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The stockholder must not vote in favor of the proposal to approve the merger agreement. Because a proxy that does not contain voting instructions will,
unless revoked, be voted in favor of the proposal, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the proposal or vote to abstain.
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The stockholder must continuously hold the shares from the date of making the demand through the effective time of the merger. A stockholder will lose
appraisal rights if the stockholder transfers the shares before the effective time of the merger.
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The stockholder must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after
the effective time of the merger. The surviving corporation is under no obligation to file any petition and has no intention of doing so.
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Neither voting, in person or by proxy, against, abstaining from voting on nor failing to vote on the proposal to approve the merger agreement will constitute a written demand for appraisal as required by
Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote.
Only a holder of record of shares of Eloqua common stock issued and outstanding immediately prior to the effective time of the merger may
assert appraisal rights for the shares of stock registered in that holder’s name. A demand for appraisal must be executed by or on behalf of the stockholder of record, fully and correctly, as the stockholder’s name appears on the stock
certificates. The demand must reasonably inform Eloqua of the identity of the stockholder and that the stockholder intends to demand appraisal of his, her or its Eloqua common stock.
76
STOCKHOLDERS WHO HOLD THEIR SHARES IN BROKERAGE ACCOUNTS OR OTHER NOMINEE FORMS, AND WHO
WISH TO EXERCISE APPRAISAL RIGHTS, SHOULD CONSULT WITH THEIR BROKERS OR NOMINEES TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE NOMINEE HOLDER TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES HELD OF
RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BROKER OR NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.
A stockholder who elects to exercise appraisal rights under Section 262 of the DGCL should mail or deliver a written demand to:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Attention: Corporate Secretary
If the merger is completed, Eloqua will give written notice of the effective time of the merger within 10 days after such effective time to each former Eloqua stockholder who did not vote in favor of the
merger agreement and who made a written demand for appraisal in accordance with Section 262 of the DGCL. Within 120 days after the effective time of the merger, but not later, either the surviving corporation or any dissenting stockholder who
has complied with the requirements of Section 262 of the DGCL may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of Eloqua common stock held by all dissenting stockholders. A person
who is the beneficial owner of shares of Eloqua common stock held in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file the petition described in the previous sentence. The surviving corporation is
under no obligation to file any petition and has no intention of doing so. Stockholders who desire to have their shares appraised should initiate any petitions necessary for the perfection of their appraisal rights within the time periods and in the
manner prescribed in Section 262 of the DGCL.
Within 120 days after the effective time of the merger, any stockholder
who has complied with the provisions of Section 262 of the DGCL to that point in time may receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares not voted in favor of the merger
agreement and with respect to which Eloqua has received demands for appraisal, and the aggregate number of holders of those shares. A person who is the beneficial owner of shares of Eloqua common stock held in a voting trust or by a nominee on
behalf of such person may, in such person’s own name, request from the corporation the statement described in the previous sentence. The surviving corporation must mail this statement to the stockholder within the later of 10 days of receipt of
the request or 10 days after expiration of the period for delivery of demands for appraisal.
If a petition for appraisal is
duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, the surviving corporation will then be obligated, within 20 days after receiving service of a copy of the petition, to provide the Delaware Court of
Chancery with a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached by the surviving corporation.
After notice to dissenting stockholders who demanded appraisal of their shares, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition, and to determine those stockholders who have complied with Section 262 and who
have become entitled to the appraisal rights provided by such section.
The Delaware Court of Chancery may require the
stockholders demanding appraisal who hold certificated shares to submit their stock certificates to the court for notation of the pendency of the appraisal proceedings. If the stockholder fails to comply with the court’s direction, the court
may dismiss the proceeding as to the stockholder.
77
The Delaware Court of Chancery will thereafter determine the fair value of the shares of
Eloqua common stock held by dissenting stockholders, exclusive of any element of value arising from the accomplishment or expectation of the merger, but together with the interest if any, to be paid on the amount determined to be fair value. Such
interest rate shall be calculated as of effective date of the merger through the date of payment of the judgment, compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge), unless good cause is
shown for the Delaware Court of Chancery to use discretion and calculate the interest rate otherwise.
In determining the fair
value, the Delaware Court of Chancery will take into account all relevant factors. The Delaware Supreme Court has stated that “proof of value by any techniques or methods that are generally considered acceptable in the financial community and
otherwise admissible in court” should be considered in the appraisal proceedings. In addition, Delaware courts have decided that the statutory appraisal remedy, in cases of unfair dealing, may or may not be a dissenter’s exclusive remedy.
The Delaware Court of Chancery may determine the fair value to be more than, less than or equal to the consideration that the dissenting stockholder would otherwise receive under the merger agreement. If no party files a petition for appraisal in a
timely manner, then stockholders will lose the right to an appraisal, and will instead receive the merger consideration described in the merger agreement.
The Delaware Court of Chancery will determine the costs of the appraisal proceeding and will allocate those costs to the parties as the Delaware Court of Chancery determines to be equitable under the
circumstances. Upon application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including reasonable attorneys’ fees and the
fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal.
The fair value of
the Eloqua common stock as determined under Section 262 of the DGCL could be greater than, the same as, or less than the merger consideration. An opinion of an investment banking firm as to the fairness, from a financial point of view, of the
consideration payable in a merger is not an opinion as to, and does not in any manner address, fair value under Section 262 of the DGCL.
Any stockholder who has duly demanded an appraisal in compliance with Section 262 of the DGCL may not, after the effective time of the merger, vote the shares subject to the demand for any purpose or
receive any dividends or other distributions on those shares, except dividends or other distributions payable to holders of record of shares as of a record date prior to the effective time of the merger.
If no petition for appraisal is filed within 120 days after the effective date of the merger, or if a stockholder delivers a written
withdrawal of the stockholder’s demand for appraisal and an acceptance of the merger within 60 days after the effective date of the merger, then the right of the stockholder to appraisal will cease. Any attempt to withdraw made more than 60
days after the effective time of the merger will require written approval of the surviving corporation, and no appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court
of Chancery, and may be conditioned on such terms as the Delaware Court of Chancery deems just. If the stockholder fails to perfect, successfully withdraws or loses the appraisal right, the stockholder’s shares will be converted into the right
to receive the merger consideration.
FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR PERFECTING
APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF APPRAISAL RIGHTS. IN THAT EVENT, YOU WILL BE ENTITLED TO RECEIVE THE MERGER CONSIDERATION FOR YOUR DISSENTING SHARES IN ACCORDANCE WITH THE MERGER AGREEMENT. IN VIEW OF THE COMPLEXITY OF THE PROVISIONS OF
SECTION 262 OF THE DGCL, IF YOU ARE AN ELOQUA STOCKHOLDER AND ARE CONSIDERING EXERCISING YOUR APPRAISAL RIGHTS UNDER THE DGCL, YOU SHOULD CONSULT YOUR OWN LEGAL ADVISOR.
78
CURRENT MARKET PRICE OF COMMON STOCK
Eloqua common stock has been listed on the NASDAQ Global Market under the trading symbol “ELOQ” since August 2, 2012. The
following table sets forth the high and low closing prices of Eloqua common stock, as reported by the NASDAQ Global Market, for each of the periods listed.
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Common Stock
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High
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Low
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Fiscal Year Ended December 31, 2012
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Third Quarter (from August 2, 2012)
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$
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20.57
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$
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11.60
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Fourth Quarter
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24.83
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15.71
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Fiscal Year Ending December 31, 2013
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First Quarter (through
—
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—
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—
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The following table sets forth the closing sale prices per share of Eloqua common stock, as reported on
the NASDAQ Global Market on December 19, 2012, the last full trading day before the public announcement of the proposed merger, and on •, 2013, the latest practicable date before the printing of this proxy statement:
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December 19, 2012
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$
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17.92
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—
, 2013
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—
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If the merger is consummated, each share of Eloqua common stock will be converted into the right to
receive $23.50 in cash, without interest and less any applicable withholding taxes, and Eloqua common stock will be removed from quotation on the NASDAQ Global Market and there will be no further public market for shares of Eloqua common stock.
79
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth the number and percentage of shares of Eloqua common stock beneficially owned, as of
December 31, 2012, by (1) each person or group known by Eloqua, based on filings pursuant to Section 13(d) or 13(g) under the Exchange Act, to beneficially own more than 5% of the outstanding shares of Eloqua common stock;
(2) each person who is currently a director of Eloqua; (3) each named executive officer of Eloqua, determined in accordance with Item 402 of Regulation S-K of the Securities Act; and (4) all current directors and executive
officers of Eloqua as a group.
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Name of Beneficial Owner (1)
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Shares Beneficially Owned (2)(3)
Common Stock
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Number of Shares
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%
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5% Stockholders:
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Entities affiliated with JMI Equity(4)
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8,316,251
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23.4
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%
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Entities affiliated with Bay Partners(5)
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6,259,314
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17.6
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%
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Entities affiliated with Bessemer Venture Partners(6)
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5,163,934
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14.5
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%
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Non-Employee Directors:
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Byron B. Deeter(6)
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5,163,934
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14.5
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%
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Neal Dempsey(5)
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6,259,314
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17.6
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%
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John J. McDonnell, Jr.(7)
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79,000
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*
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Thomas Reilly(8)
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26,667
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*
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Stephen M. Swad(9)
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45,667
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*
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Bradford D. Woloson
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—
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—
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Executive Officers:
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Joseph P. Payne(10)
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1,634,660
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4.5
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%
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Alex P. Shootman(11)
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339,973
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*
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Don E. Clarke(12)
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347,984
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*
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Andre H.S. Yee(13)
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319,934
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*
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Heidi M. Melin
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888
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*
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Stephen E. Holsten(14)
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58,500
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*
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All directors and executive officers as a group(12 persons)(15)
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14,276,521
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38.2
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%
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*
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Represents less than 1%.
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(1)
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Unless otherwise indicated in the table, the address for each listed person is c/o Eloqua, Inc., 1921 Gallows Road, Suite 200, Vienna, Virginia 22182.
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(2)
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The number and percentage of shares beneficially owned is determined under rules of the SEC, and the information is not necessarily indicative of beneficial ownership
for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or dispositive power and also any shares which the individual has the right to acquire within 60 days
of December 31, 2012, through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes, each person has sole voting and dispositive power (or shares such powers with his or her spouse) with respect to the
shares shown as beneficially owned. Percentage beneficially owned is based on 35,525,444 shares of common stock outstanding on December 31, 2012.
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(3)
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According to a Schedule 13D filed on December 27, 2012, each of Oracle and Parent may be deemed to have beneficial ownership of the shares of Eloqua common stock
listed in this table as a result of the execution of the voting agreements described in the section of this proxy statement entitled “The Voting Agreements” beginning on page 71. According to the Schedule 13D, each of Oracle and Parent
disclaims any beneficial ownership of these shares.
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(4)
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Consists of 6,164,809 shares held by JMI Equity Fund IV Trust, 488,192 shares held by JMI Equity Fund IV (AI) Trust, 1,541,202 shares held by JMI Associates IV Trust,
and 122,048 shares held by JMI Associates IV (AI) Trust (collectively referred to as the “JMI Trusts”). The JMI Trusts are irrevocable. The address for the JMI Trusts is 100 International Drive, Suite 19100, Baltimore, Maryland 21202.
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(5)
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Consists of 5,930,700 shares held by Bay Partners X, LP and 328,614 shares held by Bay Partners X Entrepreneurs Fund, LP (collectively referred to as the “Bay
Entities”). Neal Dempsey and Stuart G. Phillips are the co-Managers of Bay Management Company X, LLC, the general partner of each of the Bay Entities. Messrs. Dempsey and Phillips share voting and dispositive power over the shares held by the
Bay Entities and disclaim beneficial ownership of such shares except to the extent of their respective pecuniary interest therein. The address for the Bay Entities is 490 S. California Avenue, Suite 200, Palo Alto, California 94306.
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(6)
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Consists of 4,440,984 shares held by BVP VII E Ltd., a wholly owned subsidiary of Bessemer Venture Partners VII L.P., and 722,950 shares held by BVP VII Institutional E
Ltd., a wholly owned subsidiary of Bessemer Venture Partners VII Institutional L.P. Deer VII & Co. L.P. is a general partner of each of Bessemer Venture Partners VII L.P. and Bessemer Venture Partners VII Institutional L.P. (the
“Bessemer Venture Partners Entities”). Deer VII & Co. Ltd is the general partner of Deer VII & Co. L.P. J. Edmund Colloton, David J. Cowan, Byron B. Deeter, Robert P. Goodman, Jeremy S. Levine and Robert M. Stavis are the
directors of Deer VII & Co. Ltd, none of which hold voting or dispositive power over the shares held by the Bessemer Venture Partners Entities for purposes of Section 13(d) of the Exchange Act, and each disclaims beneficial ownership of the
shares identified in this footnote except to the extent of his respective pecuniary interest in such shares. The address for Bessemer Venture Partners Entities is 1865 Palmer Avenue, Suite 104, Larchmont, New York 10538.
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(7)
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Includes 3,000 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(8)
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Includes 16,667 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(9)
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Includes 35,667 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(10)
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Includes 734,660 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(11)
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Includes 339,973 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(12)
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Includes 307,706 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(13)
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Includes 319,934 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(14)
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Includes 58,500 shares subject to options that are exercisable within 60 days of December 31, 2012.
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(15)
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Includes 1,816,107 shares subject to options that are exercisable within 60 days of December 31, 2012.
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81
FUTURE STOCKHOLDER PROPOSALS
We will hold our 2013 annual meeting of stockholders only if the merger is not completed because, if the merger is completed, Eloqua will
cease to be an independent public company and will be wholly owned by Oracle and you will no longer have an ownership interest in Eloqua.
Proposals of stockholders of Eloqua intended for inclusion in the proxy statement and proxy card to be furnished to all stockholders entitled to vote at the 2013 annual meeting of stockholders may do so
by following the procedures prescribed in Rule 14a-8 of the Exchange Act. Stockholder proposals must be received at Eloqua’s principal executive offices no later than the close of business on the 10th day following the date of public
disclosure, via a press release or filing with the SEC, of the date of our 2013 annual meeting of stockholders. To be included in Eloqua’s proxy materials, such proposal must also comply with SEC regulations under Rule 14a-8 of the Exchange Act
regarding the inclusion of stockholder proposals in Eloqua-sponsored proxy materials. If the stockholder’s proposal regards nominations for election to the board or other proposals not for inclusion in Eloqua-sponsored proxy materials, the
stockholder’s written notice must include certain information concerning the stockholder and each nominee or proposal, as specified in Eloqua’s bylaws. Proposals should be sent to Eloqua’s corporate secretary at the principal
executive offices of Eloqua.
The foregoing description of the procedures for a stockholder to propose a nominee for election
to the board or other business for consideration at an annual meeting is only a summary and is not complete. Copies of Eloqua’s bylaws, including the provisions which concern the requirements for stockholder nominations and other proposals, may
be obtained by writing to Eloqua’s corporate secretary at Eloqua, Inc., 1921 Gallows Road, Suite 200, Vienna, Virginia 22812. Any stockholder considering making a nomination or other proposals should carefully review and comply with those
provisions.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy these reports, proxy statements and other information at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website, located at www.sec.gov, that contains reports, proxy statements and other information regarding us and other registrants that file electronically
with the SEC.
If you have any questions about this proxy statement, the special meeting or the acquisition by Oracle after
reading this proxy statement, or if you would like additional copies of this proxy statement, please contact us at:
Eloqua,
Inc.
1921 Gallows Road, Suite 200
Vienna, Virginia 22182
Telephone:
—
Attention:
—
This proxy statement contains references to the availability of certain information from our website, www.eloqua.com. By making such
references, we do not incorporate into this document the information included on our website.
THIS PROXY
STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED •, 2013. YOU SHOULD NOT
ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
82
ANNEX A
AGREEMENT AND PLAN OF MERGER
dated as of
December 19, 2012
among
ELOQUA, INC.,
OC ACQUISITION LLC,
ORACLE CORPORATION,
and
ESPERANZA ACQUISITION CORPORATION
TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS
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A-1
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Section 1.01. Definitions
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A-1
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Section 1.02. Other Definitional and Interpretative Provisions
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A-9
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ARTICLE 2 THE MERGER
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A-9
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Section 2.01. The Closing
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A-9
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Section 2.02. The Merger
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A-9
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Section 2.03. Conversion of Shares
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A-10
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Section 2.04. Surrender and Payment
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A-10
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Section 2.05. Dissenting Shares
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A-11
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Section 2.06. Company Stock Options; Company RSUs; Company Restricted Stock Awards; ESPP
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A-12
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Section 2.07. Adjustments
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A-13
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Section 2.08. Withholding Rights
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A-13
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Section 2.09. Lost Certificates
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A-13
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ARTICLE 3 THE SURVIVING CORPORATION
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A-14
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Section 3.01. Certificate of Incorporation
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A-14
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Section 3.02. Bylaws
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A-14
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Section 3.03. Directors and Officers
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A-14
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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A-14
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Section 4.01. Corporate Existence and Power
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A-14
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Section 4.02. Corporate Authorization
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A-14
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Section 4.03. Governmental Authorization
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A-15
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Section 4.04. Non-contravention
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A-15
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Section 4.05. Capitalization
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A-15
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Section 4.06. Subsidiaries
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A-16
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Section 4.07. SEC Filings and the Sarbanes-Oxley Act
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A-17
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Section 4.08. Financial Statements; Internal Controls
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A-18
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Section 4.09. Disclosure Documents
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A-19
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Section 4.10. Absence of Certain Changes
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A-19
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Section 4.11. No Undisclosed Material Liabilities
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A-20
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Section 4.12. Litigation
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A-20
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Section 4.13. Compliance with Applicable Law
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A-20
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Section 4.14. Material Contracts
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A-21
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Section 4.15. Taxes
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A-24
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Section 4.16. Employee Benefit Plans
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A-26
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Section 4.17. Labor and Employment Matters
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A-28
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Section 4.18. Insurance Policies
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A-29
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Section 4.19. Environmental Matters
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A-29
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Section 4.20. Intellectual Property and Information Technology
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A-30
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Section 4.21. Properties
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A-33
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Section 4.22. Inventory
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A-33
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Section 4.23. Interested Party Transactions
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A-33
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Section 4.24. Compliance with the U.S. Foreign Corrupt Practices Act and Other Applicable Anti-Corruption
Laws
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A-33
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Section 4.25. Customers, Suppliers
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A-34
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Section 4.26. Finders’ Fees
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A-34
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Section 4.27. Opinion of Financial Advisor
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A-34
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Section 4.28. Antitakeover Statute; No Rights Plan
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A-35
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ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT
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A-35
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Section 5.01. Corporate Existence and Power
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A-35
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Section 5.02. Corporate Authorization
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A-35
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Section 5.03. Governmental Authorization
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A-35
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Section 5.04. Non-contravention
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A-35
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Section 5.05. Disclosure Documents
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A-36
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Section 5.06. Financing
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A-36
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ARTICLE 6 COVENANTS
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A-36
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Section 6.01. Conduct of the Company
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A-36
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Section 6.02. Stockholder Meeting; Board Recommendation; Proxy Material
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A-39
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Section 6.03. No Solicitation
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A-40
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Section 6.04. Access to Information
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A-43
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Section 6.05. Notice of Certain Events
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A-43
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Section 6.06. 401(k) Plans
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A-44
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Section 6.07. State Takeover Laws
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A-44
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Section 6.08. Obligations of Merger Subsidiary
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A-44
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Section 6.09. Voting of Shares
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A-44
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Section 6.10. Director and Officer Liability
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A-44
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Section 6.11. Reasonable Best Efforts
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A-45
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Section 6.12. Certain Filings
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A-47
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Section 6.13. Public Announcements
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A-47
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Section 6.14. Further Assurances
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A-47
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Section 6.15. Section 16 Matters
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A-47
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Section 6.16. Confidentiality
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A-48
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Section 6.17. Employee Matters
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A-48
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ARTICLE 7 CONDITIONS TO THE MERGER
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A-49
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Section 7.01. Conditions to the Obligations of Each Party
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A-49
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Section 7.02. Conditions to the Obligations of Parent and Merger Subsidiary
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A-49
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Section 7.03. Conditions to the Obligations of the Company
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A-50
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ii
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ARTICLE 8 TERMINATION
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A-50
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Section 8.01. Termination
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A-50
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Section 8.02. Effect of Termination
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A-52
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ARTICLE 9 MISCELLANEOUS
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A-52
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Section 9.01. Notices
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A-52
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Section 9.02. Survival of Representations and Warranties
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A-53
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Section 9.03. Amendments and Waivers
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A-53
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Section 9.04. Expenses
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A-54
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Section 9.05. Binding Effect; No Third Party Beneficiaries; No Assignment
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A-55
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Section 9.06. Governing Law
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A-55
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Section 9.07. Jurisdiction
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A-55
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Section 9.08. Waiver of Jury Trial
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A-55
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Section 9.09. Counterparts; Effectiveness
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A-55
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Section 9.10. Entire Agreement
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A-55
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Section 9.11. Severability
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A-55
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Section 9.12. Specific Performance
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A-56
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Section 9.13. Disclosure Schedules
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A-56
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Section 9.14. Rules of Construction
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A-56
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Section 9.15. Compliance with Obligations
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A-56
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Exhibit A – Form of Voting Agreements
Exhibit B – Form of Amended and Restated Certificate of Incorporation of Surviving Corporation
iii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this “
Agreement
”) dated as of December 19, 2012, among Eloqua, Inc., a Delaware
corporation (the “
Company
”), OC Acquisition LLC, a Delaware limited liability company (“
Parent
”), and Esperanza Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent
(“
Merger Subsidiary
”). Oracle Corporation, a Delaware corporation (“
Ultimate Parent
”), is a party to this Agreement solely with respect to performance of its obligations under
Section 2.06
and
Section 9.15
.
WHEREAS, the Boards of Directors of each of the Company, Ultimate Parent, Parent and Merger
Subsidiary have approved this Agreement and deem it advisable and in the best interests of their respective stockholders to consummate the merger of Merger Subsidiary with and into the Company (the “
Merger
”) and the other
transactions contemplated hereby, on the terms and conditions set forth herein; and
WHEREAS, concurrently with
the execution and delivery of this Agreement, and as a condition and inducement to Ultimate Parent’s, Parent’s and Merger Subsidiary’s willingness to enter into this Agreement, certain stockholders of the Company are entering into
Voting Agreements in the form attached as
Exhibit A
hereto (the “
Voting Agreements
”) pursuant to which those stockholders, among other things, will agree to vote all voting securities in the
Company beneficially owned by them in favor of the approval and adoption of this Agreement and the Merger.
NOW,
THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01.
Definitions
.
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(a)
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As used herein, the following terms have the following meanings:
|
“
Acquisition Proposal
” means any offer, proposal, inquiry or indication of interest from any Third Party relating to any transaction or series of related transactions involving
(i) any acquisition or purchase by any Person, directly or indirectly, of 15% or more of any class of outstanding voting or equity securities of the Company or any of its Subsidiaries, or any tender offer (including a self-tender) or exchange
offer that, if consummated, would result in any Person beneficially owning 15% or more of any class of outstanding voting or equity securities of the Company or any of its Subsidiaries, (ii) any merger, amalgamation, consolidation, share
exchange, business combination, joint venture or other similar transaction involving the Company or any of its Subsidiaries, the business of which constitutes 15% or more of the consolidated net revenues, net income or assets of the Company and its
Subsidiaries, (iii) any sale, lease, exchange, transfer, license (other than licenses in the ordinary course of business), acquisition or disposition of 15% or more of the consolidated assets of the Company and its Subsidiaries (measured by the
lesser of book or fair market value thereof) or (iv) any liquidation, dissolution, recapitalization, extraordinary dividend or other significant corporate reorganization of the Company or any of its Subsidiaries, the business of which
constitutes 15% or more of the consolidated net revenues, net income or assets of the Company and its Subsidiaries.
“
Affiliate
” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or
under common control with such Person. As used in this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“
Antitrust Laws
” means applicable federal, state, local or foreign antitrust, competition, premerger notification or
trade regulation laws, regulations or Orders.
A-1
“
Applicable Law
” means, with respect to any Person, any international,
national, federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is
binding upon or applicable to such Person, as amended unless expressly specified otherwise.
“
Business Day
”
means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
“
Canadian Securities Authorities
” means the Ontario Securities Commission and the applicable securities commissions and other securities regulatory authorities in each of the other
provinces of Canada.
“
Canadian Securities Laws
” means the Securities Act and all other applicable Canadian
provincial securities laws and the regulations, rules and instruments made thereunder.
“
Canadian Subsidiary
”
means any Subsidiary of the Company that is (or is deemed to be) a resident of Canada for purposes of the Tax Act at any material time or any such Subsidiary that is subject to tax pursuant to the Tax Act.
“
Closing Date
” means the date of Closing.
“
Code
” means the Internal Revenue Code of 1986, as amended.
“
Company Balance Sheet
” means the consolidated balance sheet of the Company and its Subsidiaries as of
September 30, 2012 and the footnotes thereto set forth in the Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2012.
“
Company Balance Sheet Date
” means September 30, 2012.
“
Company Board
” means the Board of Directors of the Company. For purposes of this Agreement, unless otherwise
specifically provided for herein, any determination or action by the Company Board shall be a determination or action approved by the greater of (i) a majority of the entire number of directors or (ii) the number of directors required to
approve such action at a meeting duly called and held at which all members of the Company Board were present and voting.
“
Company IP
” means any and all Intellectual Property that has been used, is used or is held for use in the business of
the Company or any of its Subsidiaries.
“
Company Material Adverse Effect
” means (i) a material adverse
effect on the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, or (ii) an effect that would prevent, materially delay or materially impair the Company’s ability to consummate the
Merger, excluding in the case of clause “(i)” above, any such adverse effect resulting from or arising out of (A) the announcement or pendency of the Merger (including any loss of or adverse change in the relationship of the Company
and its Subsidiaries with their respective employees, customers, resellers, partners, suppliers, licensors, licensees or distributors related thereto), (B) general economic or political conditions (including acts of terrorism or war) that do
not disproportionately affect the Company and its Subsidiaries, taken as a whole, as compared to other companies participating in the same industry as the Company, (C) general conditions in the industry in which the Company and its Subsidiaries
operate that do not disproportionately affect the Company and its Subsidiaries, taken as a whole, as compared to other companies participating in the same industry as the Company, (D) any changes (after the date hereof) in GAAP or Applicable
Law, (E) any failure to take any action in compliance with the restrictions or other prohibitions set forth in
Section 6.01(b)
, or the taking of any specific action at the written direction of Parent or expressly required by this
Agreement, (F) any Proceeding made or
A-2
brought by any holder of shares of Company Common Stock (on the holder’s own behalf or on behalf of the Company) arising out of or related to this Agreement or any of the transactions
contemplated hereby (including the Merger) or (G) any failure by the Company to meet internal or analysts’ estimates or projections (it being understood that any cause of any such failure may be taken into consideration when determining
whether a Company Material Adverse Effect has occurred).
“
Company Products
” means each product (including
any Software product) or service developed, manufactured, sold, licensed, leased or delivered by the Company or any of its Subsidiaries.
“
Company Registered IP
” means all of the Registered IP owned by, under obligation of assignment to, or filed in the name of, the Company or any of its Subsidiaries.
“
Company Restricted Stock Award
” means each award of share(s) of restricted Company Common Stock (regardless of whether
such restrictions are time-based or performance-based) outstanding under any Company Stock Plan that is, at the time of determination, subject to forfeiture or repurchase by the Company.
“
Company Return
” means any Tax Return of the Company or any of its Subsidiaries.
“
Company RSU
” means each award of restricted stock units of the Company outstanding under any Company Stock Plan or
otherwise.
“
Company Stock Option
” means each compensatory option to purchase Company Common Stock
outstanding under any Company Stock Plan or otherwise.
“
Company Stock
Plans
” means the Eloqua Limited 2006 U.S. Employee Stock Option Plan, the Eloqua Limited 2006 Stock Option Plan and the Eloqua, Inc. 2012 Stock Option and Incentive Plan.
“
Company Warrant
” means that certain Warrant to Purchase Stock, dated as of December 28, 2010, issued by the
Company in favor of Silicon Valley Bank.
“
Contract
” means any legally binding written or oral contract,
agreement, note, bond, indenture, mortgage, guarantee, option, lease (or sublease), license, sales or purchase order, warranty, commitment, or other instrument, obligation, arrangement or understanding of any kind.
“
Controlled Group Liability
” means any and all liabilities (i) under Title IV of ERISA, (ii) under
Section 302 of ERISA, (iii) under Sections 412 or 4971 of the Code, (iv) as a result of a failure to comply with the continuation coverage requirements of Section 601 et seq. of ERISA or Section 4980B of the Code, and
(v) under corresponding or similar provisions of foreign laws or regulations, other than such liabilities that arise solely out of, or relate solely to, the Company Employee Plans.
“
Delaware Law
” means the General Corporation Law of the State of Delaware.
“
Environmental Law
” means any Applicable Law or any agreement with any Governmental Authority or other Person, relating
to human health and safety, the environment or any Hazardous Substance.
“
Environmental Permits
” means, with
respect to any Person, all Governmental Authorizations relating to or required by Environmental Law and affecting, or relating in any way to, the business of such Person or any of its Subsidiaries.
“
Equity Interest
” means any share, capital stock, partnership, member or similar interest in any entity, and any option,
warrant, right or security convertible, exchangeable or exercisable therefor.
“
ERISA
” means the Employee
Retirement Income Security Act of 1974, as amended.
A-3
“
ERISA Affiliate
” means, with respect to the Company or any of its
Subsidiaries, any entity that is (or at the relevant time was) treated as a single employer with the Company or such Subsidiary or under common control with the Company or such Subsidiary within the meaning of Section 414(b), (c) or
(m) of the Code or Section 4001(b)(1) of ERISA.
“
Exchange Act
” means the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
“
Executive Officer
” shall have
the meaning set forth in Rule 3b-7 of the Exchange Act.
“
GAAP
” means generally accepted accounting
principles in the United States, as in effect on the date hereof.
“
Governmental Authority
” means
(i) any government or any state, department, local authority or other political subdivision thereof, or (ii) any governmental or quasi-governmental body, agency, authority (including any central bank, Taxing Authority or transgovernmental
or supranational entity or authority), minister or instrumentality (including any court or tribunal) exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
“
Governmental Authorizations
” means, with respect to any Person, all licenses, permits, certificates, waivers, consents,
franchises (including similar authorizations or permits), exemptions, variances, expirations and terminations of any waiting period requirements and other authorizations and approvals issued to such Person by or obtained by such Person from any
Governmental Authority, or of which such Person has the benefit under any Applicable Law.
“
Government
Contract
” means any Contract between, on the one hand, the Company or any of the Subsidiaries and, on the other hand: (i) the United States government or any other Governmental Authority, (ii) any prime contractor to the United
States government or any other Governmental Authority;
provided
,
however
, that the United States government or such other Governmental Authority is the end-user of the Company Products covered by such Contract, or (iii) any
subcontractor with respect to any Contract described in clauses (i) or (ii).
“
Hazardous Substance
”
means any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of
the foregoing characteristics, including any substance, waste or material regulated under any Environmental Law.
“
HSR
Act
” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“
Indebtedness
” means, collectively, any (i) indebtedness for borrowed money,(ii) indebtedness evidenced by any bond, debenture, note,
mortgage, indenture or other debt instrument or debt security, (iii) amounts owing as deferred purchase price for the purchase of any property, (iv) obligations under capital leases, or (v) guarantees with respect to any indebtedness
or obligation of a type described in clauses (i) through (iv) above of any other Person.
“
Intellectual Property
” means any or all of the following and all rights in, arising out of, or associated therewith:
(i) all United States, international and foreign patents and applications therefor and all reissues, divisions, divisionals, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and all patents, applications,
documents and filings claiming priority to or serving as a basis for priority thereof; (ii) all inventions (whether or not patentable), invention disclosures, improvements, trade secrets, proprietary information, know how, computer Software (in
both source code and object code form), business methods,
A-4
technical data and customer lists, tangible or intangible proprietary information, and all documentation relating to any of the foregoing; (iii) all copyrights, copyrights registrations and
applications therefor, and all other rights corresponding thereto throughout the world; (iv) all industrial designs and any registrations and applications therefor throughout the world; (v) all trade names, logos, common law trademarks and
service marks, trademark and service mark registrations and applications therefor throughout the world; (vi) all databases and all rights therein throughout the world; (vii) all moral and economic rights of authors and inventors, however
denominated, throughout the world; (viii) all web addresses, sites and domain names and numbers, social network application names and application IDs, usernames, user IDs and identification numbers; and (ix) any similar or equivalent
rights to any of the foregoing anywhere in the world.
“
Internal Revenue Service
” means the United States
Internal Revenue Service.
“
International Plan
” means any compensation or benefit plan that is entered into,
maintained, administered or contributed to by the Company or any of its Subsidiaries under the law or applicable custom or rule of the relevant jurisdiction outside the United States.
“
IT Assets
” means all hardware, Software, networks and connecting media and related infrastructure used by the Company
or any of its Subsidiaries in support of their respective business operations.
“
Knowledge of the Company
”
means knowledge, after reasonable inquiry, of each of the individuals identified in
Section 1.01
of the Company Disclosure Schedule.
“
Lien
” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance, claim, infringement, right of first refusal, preemptive right,
community property right or other adverse claim of any kind in respect of such property or asset. For purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property or asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.
“
made available
” or “
delivered
” means (unless otherwise specified), with respect to a particular document, item or other piece of information, inclusion (and unrestricted
availability) in the virtual data room hosted by IntraLinks, Inc. in connection with the Merger for a continuous period of at least one (1) Business Day immediately prior to the date of this Agreement (it being understood and agreed that as
soon as practicable after the date of this Agreement, the Company shall deliver to Parent on optical media format a complete and accurate copy of the contents of said virtual data room as of the date of this Agreement).
“
Nasdaq
” means the Nasdaq Global Select Market.
“
Order
” means, with respect to any Person, any order, injunction, judgment, decree, ruling or other similar requirement
enacted, adopted, promulgated or applied by a Governmental Authority or arbitrator that is binding upon or applicable to such Person or its property.
“
Other Company Representations
” means the representations and warranties of the Company contained in Article 4, other than the Specified Company Representations.
“
PBGC
” means the Pension Benefit Guaranty Corporation.
“
Permitted Liens
” means (i) Liens disclosed on the Company Balance Sheet, (ii) Liens for Taxes that are
(A) not yet due and payable as of the Closing Date or (B) being contested in good faith (and for which adequate accruals or reserves have been established on the Company Balance Sheet), and (iii) mechanics’, carriers’,
workmen’s, repairmen’s, landlord’s or other like liens or other similar encumbrances arising or incurred in the
A-5
ordinary course of business consistent with past practice that, in the aggregate, do not materially impair the value or the present or currently intended use and operation of the assets to which
they relate.
“
Person
” means an individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
“
Proceeding
” means any suit, claim, action, litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Authority or any arbitrator or
arbitration panel.
“
Registered IP
” means all United States, international and foreign: (i) patents and
patent applications (including provisional applications and design patents and applications) and all reissues, divisions, divisionals, renewals, extensions, counterparts, continuations and continuations-in-part thereof, and all patents,
applications, documents and filings claiming priority thereto or serving as a basis for priority thereof; (ii) registered trademarks, registered service marks, applications to register trademarks, applications to register service marks,
intent-to-use applications, or other registrations or applications related to trademarks; (iii) registered copyrights and applications for copyright registration; (iv) domain name registrations and Internet number assignments; and
(v) any other Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any Governmental Authority.
“
Representatives
” means, with respect to any Person, the directors, officers, employees, financial advisors, attorneys,
accountants, consultants, agents and other authorized representatives of such Person, acting in such capacity.
“
Sarbanes-Oxley Act
” means the Sarbanes-Oxley Act of 2002, and the rules and regulations promulgated thereunder.
“
SEC
” means the Securities and Exchange Commission.
“
Securities Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“
Software
” means any computer program, operating system, applications system, firmware or other code of any
nature, whether operational, under development or inactive, including all object code, source code, data files, rules, data collections, diagrams, protocols, specifications, interfaces, definitions or methodology derived from the foregoing and any
derivations, updates, enhancements and customization of any of the foregoing, processes, operating procedures, technical manuals, user manuals and other documentation thereof, whether in machine-readable form, programming language or any other
language or symbols and whether stored, encoded, recorded or written on disk, tape, film, memory device, paper or other media of any nature.
“
Specified Company Representations
” means the representations and warranties of the Company contained in
Sections 4.01
,
4.02
,
4.04(i)
,
4.05
,
4.26
,
4.27
and
4.28
.
“
Subsidiary
” means, with respect to
any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly owned by such
Person.
“
Superior Proposal
” means any binding, bona fide, unsolicited, written Acquisition
Proposal which did not result from or arise out of a breach of
Section 6.03
of this Agreement, made by a Third Party, which, if consummated, would result in such Third Party (or in the case of a direct merger between such Third Party or
any Subsidiary of such Third Party and the Company, the stockholders of such Third Party) owning, directly or
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indirectly, all of the outstanding shares of Company Common Stock, or all or substantially all of the consolidated assets of the Company and its Subsidiaries, and which Acquisition Proposal the
Company Board determines in good faith, after considering the advice of its outside legal counsel and a financial advisor of nationally recognized reputation, and after taking into account all of the terms and conditions of such Acquisition Proposal
(including any termination or break-up fees, expense reimbursement provisions and conditions to consummation), and after taking into account all financial, legal, regulatory, and other aspects of such Acquisition Proposal (including the financing
terms and the ability of such Third Party to finance such Acquisition Proposal), (i) is more favorable to the Company’s stockholders (other than Parent and its Affiliates) than as provided hereunder (including any changes to the terms of
this Agreement proposed by Parent in response to such Superior Proposal pursuant to and in accordance with
Section 6.03
or otherwise), (ii) is not subject to any financing condition, (iii) is reasonably capable of being
completed on the terms proposed and (iv) includes termination rights of the Third Party on terms no less favorable to the Company than the terms set forth in this Agreement, all from a Third Party capable of performing such terms.
“
Tax
” means any federal, state, local, provincial or foreign income, gross receipts, branch profits, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits, escheat, Section 59A environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, registration, ad valorem, value added, alternative or add-on minimum or estimated tax or other tax of any kind whatsoever that is imposed by a Taxing Authority, including any interest, penalty, addition to tax or
additional amount with respect thereto, whether disputed or not.
“
Tax Grant
” means any Tax exemption, Tax
holiday or reduced Tax rate granted by a Taxing Authority with respect to the Company or any of its Subsidiaries that is not generally available to Persons without specific application therefor.
“
Tax Return
” means any report, return, document, declaration or other information relating to Taxes, including
information returns, any document with respect to or accompanying payments of estimated Taxes, or with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other
information.
“
Taxing Authority
” means any Governmental Authority responsible for the imposition of any Tax.
“
Third Party
” means any Person or “group” (as defined under Section 13(d) of the Exchange
Act) of Persons, other than Parent or any of its Affiliates or Representatives.
“
Third Party Software
” means
any Software (including object code, binary code, source code, libraries, routines, subroutines or other code, and including commercial, open-source and freeware Software), and any derivative of any of the foregoing, that is (i) not solely
owned by the Company and(ii) incorporated in, distributed with, or required, necessary or depended upon for the development, use or commercialization of, any Company Product. Third Party Software includes (A) Software that is provided to
Company’s end-users in any manner, whether for free or for a fee, whether distributed or hosted, and whether embedded or incorporated in or bundled with any Company Product or on a standalone basis, (B) Software that is used for
development, maintenance and/or support of any Company Product, including development tools such as compilers, converters, debuggers or parsers, tracking and database tools such as project management Software, source code control and bug tracking
Software, and Software used for internal testing purposes, and (C) Software that is used to generate code or other Software that is described in clauses (A) or (B).
“
Treasury Regulations
” means the regulations promulgated under the Code by the United States Department of Treasury.
“
Ultimate Parent Stock
” means the common stock, par value $0.01 per share, of the Ultimate Parent.
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|
|
(b)
|
Each of the following terms is defined in the Section set forth opposite such term:
|
|
|
|
|
|
Term
|
|
Section
|
|
Adverse Recommendation Change
|
|
6.03(d)
|
|
Agreement
|
|
Preamble
|
|
Antitrust Counsel Only Material
|
|
6.11(d)
|
|
Assumed Company Awards
|
|
2.06(a)
|
|
Award Exchange Ratio
|
|
2.06(a)
|
|
Board Recommendation
|
|
6.02(b)
|
|
Cashed Out Compensatory Awards
|
|
2.06(a)
|
|
Certificate of Merger
|
|
2.02(a)
|
|
Certificates
|
|
2.04(a)
|
|
Closing
|
|
2.01
|
|
Company
|
|
Preamble
|
|
Company Common Stock
|
|
4.05(a)
|
|
Company Compensatory Award
|
|
2.06(a)
|
|
Company Disclosure Schedule
|
|
4
|
|
Company Employee Plan
|
|
4.16(a)
|
|
Company Preferred Stock
|
|
4.05(a)
|
|
Company SEC Documents
|
|
4.07(a)
|
|
Company Securities
|
|
4.05(c)
|
|
Company Subsidiary Securities
|
|
4.06(c)
|
|
Compensatory Award Payments
|
|
2.06(a)
|
|
Confidentiality Agreement
|
|
6.16
|
|
Continuing Employees
|
|
6.17(a)
|
|
Current Premium
|
|
6.10(a)
|
|
Dissenting Shares
|
|
2.05
|
|
Effective Time
|
|
2.02(b)
|
|
End Date
|
|
8.01(b)(i)
|
|
ESPP
|
|
2.06(d)
|
|
Exchange Agent
|
|
2.04(a)
|
|
Final Exercise Date
|
|
2.06(d)
|
|
Foreign Competition Laws
|
|
4.03
|
|
Governmental Antitrust Authority
|
|
6.11(b)
|
|
Indemnified Parties
|
|
6.10(b)
|
|
Insurance Policies
|
|
4.17(a)
|
|
Intervening Event
|
|
6.03(e)
|
|
Lease Agreement
|
|
4.21(b)
|
|
Leased Real Property
|
|
4.21(b)
|
|
Major Customers
|
|
4.14(a)(i)
|
|
Major Suppliers
|
|
4.14(a)(iii)
|
|
Material Contract
|
|
4.14(b)
|
|
Merger
|
|
Preamble
|
|
Merger Consideration
|
|
2.03(a)
|
|
Merger Subsidiary
|
|
Preamble
|
|
Necessary IP
|
|
4.20(b)
|
|
Notice Period
|
|
6.03(d)
|
|
Owned Real Property
|
|
4.21(b)
|
|
Parent
|
|
Preamble
|
|
Parent Benefit Plans
|
|
6.17(a)
|
|
Parent Expenses
|
|
9.04(d)
|
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|
|
|
|
|
Term
|
|
Section
|
|
Payment Fund
|
|
2.04(a)
|
|
Proxy Statement
|
|
4.09
|
|
Stockholder Approval
|
|
4.02(a)
|
|
Stockholder Meeting
|
|
6.02(a)
|
|
Surviving Corporation
|
|
2.02(c)
|
|
Termination Fee
|
|
9.04(b)
|
|
Ultimate Parent
|
|
Preamble
|
|
Uncertificated Shares
|
|
2.04(a)
|
|
Voting Agreements
|
|
Preamble
|
Section 1.02.
Other Definitional and Interpretative Provisions
. The words “hereof,”
“herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits
and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the
meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import. “Writing,” “written” and comparable terms refer to
printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with
the terms hereof and thereof;
provided
that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule. References to any Person
include the successors and permitted assigns of that Person. References to any statute are to that statute, as amended from time to time, and to the rules and regulations promulgated thereunder. References to “$” and “dollars”
are to the currency of the United States. References from or through any date shall mean, unless otherwise specified, from and including or through and including, respectively.
ARTICLE 2
THE MERGER
Section 2.01.
The Closing.
Upon the terms and subject to the conditions set forth herein, the closing of the Merger (the
“
Closing
”) will take place at 10:00 a.m., Pacific time, as soon as practicable (and, in any event, within two (2) Business Days) after satisfaction or, to the extent permitted hereunder, waiver of all conditions to the Merger
set forth in
Article 7
(other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permitted hereunder) of such conditions), unless this Agreement has been
terminated pursuant to its terms or unless another time or date is agreed to in writing by the parties hereto. The Closing shall be held at the offices of Weil, Gotshal & Manges LLP, 201 Redwood Shores Parkway, Redwood Shores, California,
unless another place is agreed to in writing by the parties hereto.
Section 2.02.
The Merger
.
(a) Upon the terms and subject to the conditions set forth herein, as soon as practicable after the Closing, the Company shall file with
the Delaware Secretary of State a certificate of merger (the “
Certificate of Merger
”) in connection with the Merger in such form as is required by, and executed and acknowledged in accordance with, Delaware Law.
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(b) The Merger shall become effective on such date and at such time (the “
Effective
Time
”) as the Certificate of Merger has been duly filed with the Delaware Secretary of State (or at such later time as may be agreed by the parties that is specified in the Certificate of Merger).
(c) At the Effective Time, Merger Subsidiary shall be merged with and into the Company in accordance with Delaware Law, whereupon the
separate existence of Merger Subsidiary shall cease, and the Company shall be the surviving corporation (the “
Surviving Corporation
”). From and after the Effective Time, the Surviving Corporation shall possess all the rights,
powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Subsidiary, all as provided under Delaware Law.
Section 2.03.
Conversion of Shares
. At the Effective Time, by virtue of the Merger and without any action on the part of the
holders thereof:
(a) except as otherwise provided in
Section 2.03(b)
,
Section 2.03(c)
, or
Section 2.05
, each share of Company Common Stock outstanding immediately prior to the Effective Time shall be converted into the right to receive $23.50 in cash, without interest (the “
Merger Consideration
”);
(b) each share of Company Common Stock held by the Company as treasury stock or owned by Parent or Merger Subsidiary immediately prior to
the Effective Time shall be canceled, and no payment shall be made with respect thereto;
(c) each share of Company Common
Stock held by any Subsidiary of either the Company or Parent (other than Merger Subsidiary) immediately prior to the Effective Time shall be converted into such number of shares of common stock, par value $0.01 per share, of the Surviving
Corporation such that each such Subsidiary owns the same percentage of the Surviving Corporation immediately following the Effective Time as such Subsidiary owned in the Company immediately prior to the Effective Time; and
(d) each share of common stock of Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and
become one share of common stock, par value $0.01 per share, of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and, together with the shares described in
Section 2.03(c)
, shall constitute
the only outstanding shares of capital stock of the Surviving Corporation.
Section 2.04
. Surrender and
Payment.
(a) Prior to the Effective Time, Parent shall appoint an exchange agent (the “
Exchange Agent
”)
for the purpose of exchanging for the Merger Consideration (i) certificates representing shares of Company Common Stock (the “
Certificates
”) and (ii) uncertificated shares of Company Common Stock (the
“
Uncertificated Shares
”). As of the Effective Time, Parent shall deposit with the Exchange Agent the aggregate Merger Consideration to be paid in respect of the Certificates and Uncertificated Shares (the “
Payment
Fund
”). Promptly after the Effective Time, Parent shall send, or shall cause the Exchange Agent to send, to each record holder of shares of Company Common Stock at the Effective Time a letter of transmittal and instructions (which shall
specify that the delivery shall be effected, and risk of loss and title shall pass, only upon proper delivery of the Certificates or transfer of the Uncertificated Shares to the Exchange Agent) for use in such exchange.
(b) Each holder of shares of Company Common Stock that have been converted into the right to receive the Merger Consideration shall be
entitled to receive the Merger Consideration in respect of the Company Common Stock represented by a Certificate or Uncertificated Share, upon (i) surrender to the Exchange Agent of a Certificate, together with a duly completed and validly
executed letter of transmittal and such other documents as may reasonably be requested by the Exchange Agent, or (ii) receipt of an “agent’s message” by the Exchange Agent (or such other evidence, if any, of transfer as the
Exchange Agent may reasonably request) in the case of a
A-10
book-entry transfer of Uncertificated Shares. Until so surrendered or transferred, as the case may be, each such Certificate or Uncertificated Share shall represent after the Effective Time for
all purposes only the right to receive such Merger Consideration. No interest shall be paid or accrued on the cash payable upon the surrender or transfer of such Certificate or Uncertificated Share.
(c) If any portion of the Merger Consideration is to be paid to a Person other than the Person in whose name the surrendered Certificate
or the transferred Uncertificated Share is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Uncertificated Share shall be
properly transferred and (ii) the Person requesting such payment shall pay to the Exchange Agent any transfer or other Tax required as a result of such payment to a Person other than the registered holder of such Certificate or Uncertificated
Share or establish to the satisfaction of the Exchange Agent that such Tax has been paid or is not payable.
(d) All Merger
Consideration paid upon the surrender of Certificates or transfer of Uncertificated Shares in accordance with the terms hereof shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock
formerly represented by such Certificate or Uncertificated Shares and from and after the Effective Time, there shall be no further registration of transfers of shares of Company Common Stock on the stock transfer books of the Surviving Corporation.
If, after the Effective Time, Certificates or Uncertificated Shares are presented to the Surviving Corporation, they shall be canceled and exchanged for the Merger Consideration provided for, and in accordance with the procedures set forth, in this
Article 2.
(e) Any portion of the Payment Fund that remains unclaimed by the holders of shares of Company Common Stock six
(6) months after the Effective Time shall be returned to Parent, upon demand, and any such holder who has not exchanged shares of Company Common Stock for the Merger Consideration in accordance with this
Section 2.04
prior to that
time shall thereafter look only to Parent for payment of the Merger Consideration. Notwithstanding the foregoing, Parent shall not be liable to any holder of shares of Company Common Stock for any amounts paid to a public official pursuant to
applicable abandoned property, escheat or similar laws. Any amounts remaining unclaimed by holders of shares of Company Common Stock two (2) years after the Effective Time (or such earlier date, immediately prior to such time when the amounts
would otherwise escheat to or become property of any Governmental Authority) shall become, to the extent permitted by Applicable Law, the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the Exchange Agent pursuant to
Section 2.05
in
respect of any Dissenting Shares shall be returned to Parent, upon demand.
Section 2.05.
Dissenting Shares
.
Notwithstanding
Section 2.03
, shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of Company Common Stock canceled in accordance with
Section 2.03(b)
) and held by a
holder who has not voted in favor of adoption of this Agreement or consented thereto in writing and who has properly exercised appraisal rights of such shares in accordance with Section 262 of Delaware Law (such shares being referred to
collectively as the “
Dissenting Shares
” until such time as such holder fails to perfect, withdraws or otherwise loses such holder’s appraisal rights under Delaware Law with respect to such shares) shall not be converted into a
right to receive the Merger Consideration but instead shall be entitled to payment of the appraised value of such shares in accordance with Section 262 of Delaware Law;
provided
that if, after the Effective Time, such holder fails to
perfect, withdraws or loses such holder’s right to appraisal, pursuant to Section 262 of Delaware Law or if a court of competent jurisdiction shall determine that such holder is not entitled to the relief provided by Section 262 of
Delaware Law, such shares of Company Common Stock shall be treated as if they had been converted as of the Effective Time into the right to receive the Merger Consideration in accordance with
Section 2.03(a)
, without interest thereon,
upon surrender of such Certificate formerly representing such share or transfer of such Uncertificated Share, as the case may be. The Company shall provide Parent prompt written notice of any demands received by the Company for appraisal of shares
of Company Common Stock, any withdrawal of any such demand and any other demand, notice or instrument delivered to the Company prior to the Effective Time pursuant to Delaware
A-11
Law that relates to such demand, and Parent shall have the opportunity and right to participate in all negotiations and Proceedings with respect to such demands. Except with the prior written
consent of Parent, the Company shall not make any payment with respect to, or offer to settle or settle, any such demands.
Section 2.06.
Company Stock Options; Company RSUs; Company Restricted Stock Awards; ESPP
(a) At the Effective Time by virtue of the Merger and without any action on the part of the holders thereof, the unvested portion of each
Company Stock Option, Company RSU and Company Restricted Stock Award (each such Company Stock Option, Company RSU and Company Restricted Stock Award, a “
Company Compensatory Award
”) that is outstanding immediately prior to the
Effective Time and that is held by a Person who is an employee of, or a consultant to, the Company or any of its Subsidiaries immediately prior to the Effective Time, shall be assumed by the Ultimate Parent and converted automatically at the
Effective Time into an option, restricted stock unit or restricted stock award, as the case may be, denominated in shares of Ultimate Parent Stock and subject to terms and conditions substantially identical to those in effect at the Effective Time
(each such assumed unvested portion of a Company Compensatory Award, an “
Assumed Company Award
”), except that (i) the number of shares of Ultimate Parent Stock that will be subject to each such Assumed Company Award shall be
determined by multiplying the number of shares of Company Common Stock subject to such Assumed Company Award by a fraction (the “
Award Exchange Ratio
”), the numerator of which is the per share Merger Consideration and the
denominator of which is the average closing price of Ultimate Parent Stock on Nasdaq over the five (5) trading days immediately preceding (but not including) the date on which the Effective Time occurs (rounded down to the nearest whole share)
and (ii) if applicable, the exercise or purchase price per share of each such Assumed Company Award shall equal (x) the per share exercise or purchase price of each such Assumed Company Award divided by (y) the Award Exchange Ratio
(rounded upwards to the nearest whole cent);
provided, however
, that in no case shall the assumption of the unvested portion of a Company Stock Option be performed in a manner that is not in material compliance with the requirements of
Sections 409A or 424(a) of the Code. At the Effective Time, each Company Stock Plan pursuant to which any Assumed Company Award has been granted shall be assumed by the Ultimate Parent.
(b) Notwithstanding the foregoing, (i) the vested portion (including any portion that pursuant to its terms becomes vested solely as
a result of the transactions contemplated by this Agreement) of each outstanding Company Compensatory Award as of immediately prior to the Effective Time and (ii) the vested and unvested portion of each outstanding Company Compensatory Award
that is held by a Person who is not an employee of, or a consultant to, the Company or any of its Subsidiaries immediately prior to the Effective Time (each such award, or vested portion thereof, as the case may be, a “
Cashed Out
Compensatory Award
”) shall not be assumed by the Ultimate Parent pursuant to this
Section 2.06
and shall, immediately prior to the Effective Time, be cancelled and extinguished and, in exchange therefor, each former holder of
any such Cashed Out Compensatory Award shall have the right to receive an amount in cash equal to the product of (x) the aggregate number of shares of Company Common Stock subject to such Cashed Out Compensatory Award immediately prior to the
Effective Time and (y) the Merger Consideration less any per share exercise or purchase price of such Cashed Out Compensatory Award immediately prior to such cancellation (such amounts payable hereunder being referred to as the
“
Compensatory Award Payments
”). From and after the Effective Time, any such Cashed Out Compensatory Award shall no longer be exercisable by the former holder thereof, but shall only entitle such holder to the payment of the
Compensatory Award Payment, if any. The Compensatory Award Payments shall be paid as soon as practicable following the Effective Time, without interest.
(c) Parent shall use commercially reasonable efforts to cause the reservation, issuance and listing of Ultimate Parent Stock as is necessary to effectuate the transactions contemplated by this
Section 2.06
. As soon as reasonably practicable after the Effective Time, Parent shall deliver to each holder of any Assumed Company Award or any Cashed Out Compensatory Award an appropriate notice setting forth such holder’s rights
pursuant to such Assumed Company Award or Cashed Out Compensatory Award, as applicable. The Ultimate Parent shall prepare and file with the SEC a registration statement on Form S-8 with respect to the shares of Ultimate Parent Stock issuable upon
exercise of the Assumed Company Awards promptly following the Effective Time (and in
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no event later than 20 Business Days after the Effective Time) and the Ultimate Parent shall exercise commercially reasonable efforts to maintain the effectiveness of such registration statement
for so long as such Assumed Company Awards remain outstanding. The Company and its counsel shall reasonably cooperate with and assist the Ultimate Parent in the preparation of such registration statement. For the avoidance of doubt, the Form S-8
registration statement shall not cover any Cashed Out Compensatory Awards.
(d) The Company shall take such action as may be
necessary under the Company’s 2012 Employee Stock Purchase Plan (the “
ESPP
”), to (i) terminate all purchase periods under the ESPP as of the last day of the Company’s first payroll period ending after the date of this
Agreement (the “
Final Exercise Date
”); (ii) provide that no further purchase periods shall commence under the ESPP on or following the Final Exercise Date; and (iii) terminate the ESPP as of the Final Exercise Date,
subject to the Closing. Each outstanding right under the ESPP on the Final Exercise Date shall be exercised on such date for the purchase of Company Common Stock in accordance with the terms of the ESPP. The Company shall provide timely notice of
the setting of the Final Exercise Date and termination of the ESPP in accordance with the terms of the ESPP.
(e) Subject to
Parent’s compliance with the preceding provisions of this
Section 2.06
, the parties agree that, following the Effective Time, no holder of a Company Compensatory Award or any participant in any Company Stock Plan, Company Employee
Plan or employee benefit arrangement of the Company or any individual party to an employment agreement with the Company or any of its Subsidiaries shall have any right hereunder or otherwise to acquire any Equity Interest (including any
“phantom” stock or stock appreciation rights) in the Company, any of its Subsidiaries or the Surviving Corporation.
(f) As soon as reasonably practicable following the date of this Agreement and in any event prior to the Effective Time, the Company
shall take any and all such actions as are necessary to effect the foregoing provisions of this
Section 2.06
, including by amending the applicable Company Stock Plans or the ESPP.
Section 2.07.
Adjustments
. If, during the period between the date of this Agreement and the Effective Time, any change in the
outstanding shares of capital stock of the Company shall occur, including by reason of any reclassification, recapitalization, stock split (including reverse stock split) or combination, exchange or readjustment of shares, or any stock dividend (but
excluding any change due to the exercise of stock options or warrants outstanding as of the date of this Agreement), or any record date for any such purpose shall be established, the Merger Consideration and any other amounts payable pursuant to
this Agreement shall be appropriately adjusted.
Section 2.08.
Withholding Rights
. Each of Parent, Merger
Subsidiary, the Surviving Corporation and the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any Person pursuant to this Agreement such amounts as it is required to deduct and withhold with
respect to the making of such payment under any provision of any applicable Tax law. Any amount so withheld shall be paid over to the applicable Taxing Authority. To the extent that amounts are so deducted and withheld by Parent, Merger Subsidiary,
the Surviving Corporation or the Exchange Agent, as the case may be, and are paid to the relevant Taxing Authority, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person in respect of which Parent,
Merger Subsidiary, the Surviving Corporation or the Exchange Agent, as the case may be, made such deduction and withholding.
Section 2.09.
Lost Certificates
. If any Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond, in such reasonable amount as Parent may direct, as indemnity against any claim that may
be made against it with respect to such Certificate, the Exchange Agent will issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the shares of Company Common Stock formerly represented
by such Certificate, as contemplated under this
Article 2
.
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ARTICLE 3
THE SURVIVING CORPORATION
Section 3.01.
Certificate of
Incorporation
. The certificate of incorporation of the Company shall be amended at the Effective Time to read in its entirety as set forth in
Exhibit B
hereto and, as so amended, shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with Applicable Law.
Section 3.02.
Bylaws
. The bylaws of the Company
shall be amended at the Effective Time to read in their entirety as the bylaws of Merger Subsidiary in effect immediately prior to the Effective Time and as so amended shall be the bylaws of the Surviving Corporation until amended in accordance with
Applicable Law.
Section 3.03.
Directors and Officers
. From and after the Effective Time, until successors are
duly elected or appointed and qualified in accordance with Applicable Law, (i) the directors of Merger Subsidiary immediately prior to the Effective Time shall be the directors of the Surviving Corporation and (ii) the officers of the
Merger Subsidiary immediately prior to the Effective Time shall be the officers of the Surviving Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (a) as disclosed in the Company SEC Documents (other than as set forth in the forward-looking statements or as set forth in
the risk factors contained therein) filed or furnished on or after August 24, 2011 and prior to the date of this Agreement or (b) as set forth in the Disclosure Schedule delivered by the Company to Parent and Merger Subsidiary prior to the
execution of this Agreement (the “
Company Disclosure Schedule
”), which identifies items of disclosure by reference to a particular Section or subsection of this Agreement, the Company hereby represents and warrants to Parent and
Merger Subsidiary as follows:
Section 4.01.
Corporate Existence and Power
. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers required to carry on its business as now conducted. The Company is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect. The Company has heretofore delivered to Parent complete and correct copies of the certificate of incorporation and bylaws of the Company as currently in effect. The Company has heretofore made available to Parent complete and correct copies
of the minutes (or, in the case of draft minutes, the most recent drafts thereof) of all meetings of the stockholders of the Company, the Company Board and each committee of the Company Board and the Boards of Directors (or similar governing bodies)
and each committee thereof of each of the Company’s Subsidiaries held since January 1, 2009; provided that, with respect to meetings for which draft or final minutes are not yet available, the Company has provided to Parent a materially
complete and correct summary thereof.
Section 4.02.
Corporate Authorization.
(a) The Company has all requisite corporate power and authority to enter into this Agreement and, subject to the Stockholder Approval, to
consummate the Merger and the other transactions contemplated hereby. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Merger and the other transactions contemplated hereby, except
for obtaining the Stockholder Approval, have been duly authorized by all necessary corporate action on the part of the Company. The affirmative vote of the holders of a majority of the outstanding shares of Company Common Stock voting to approve and
adopt this Agreement and the Merger (the “
Stockholder Approval
”) is the only vote of the holders of any of the Company’s capital stock necessary in connection with the consummation of the Merger and the other transactions
contemplated by this Agreement. This Agreement constitutes a valid and binding agreement of the
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Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar Applicable Law affecting
creditors’ rights generally and by general principles of equity.
(b) At a meeting duly called and held, prior to the
execution of this Agreement, at which all directors of the Company were present and voting in favor, the Company Board duly adopted resolutions (i) declaring that this Agreement, the Merger and the other transactions contemplated hereby are
advisable and in the best interests of the Company’s stockholders, (ii) approving this Agreement, the Merger and the other transactions contemplated hereby, (iii) taking all actions necessary so that the restrictions on business
combinations and stockholder vote requirements contained in Section 203 of the Delaware Law will not apply with respect to or as a result of the Merger, this Agreement, the Voting Agreements and the transactions contemplated hereby and thereby,
(iv) directing that the adoption of this Agreement, the Merger and the other transactions contemplated hereby be submitted to a vote of the stockholders of the Company at the Stockholder Meeting, and (v) making the Board Recommendation.
Section 4.03.
Governmental Authorization
. The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated hereby require no action by or in respect of, or filing with, any Governmental Authority, other than (i) the filing of the Certificate of Merger with the Delaware
Secretary of State and appropriate documents with the relevant authorities of other jurisdictions in which the Company is qualified to do business, (ii) compliance with any applicable requirements of (A) the HSR Act and (B) any
Applicable Law analogous to the HSR Act or otherwise regulating antitrust or merger control matters and in each case existing in foreign jurisdictions (the “
Foreign Competition Laws
”), (iii) compliance with any applicable
requirements of the Securities Act, the Exchange Act, any other applicable U.S. state or federal or foreign securities laws, or Nasdaq, and (iv) any actions or filings the absence of which would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
Section 4.04.
Non-contravention
. The execution, delivery
and performance by the Company of this Agreement and the consummation by the Company of the Merger and the other transactions contemplated hereby do not and will not (with or without notice or lapse of time, or both): (i) contravene, conflict
with, or result in any violation or breach of any provision of the certificate of incorporation or bylaws of the Company, (ii) assuming compliance with the matters referred to in
Section 4.03
and that the Stockholder Approval is
obtained, contravene, conflict with or result in a violation or breach of any provision of any Applicable Law or Order, (iii) require any consent or approval under, violate, conflict with, result in any breach of or any loss of any benefit
under, or constitute a change of control or default under, or result in termination or give to others any right of termination, vesting, amendment, acceleration or cancellation of, any Contract to which the Company or any Subsidiary of the Company
is a party, or by which they or any of their respective properties or assets may be bound or affected or any Governmental Authorization affecting, or relating in any way to, the property, assets or business of the Company or any of its Subsidiaries,
or (iv) result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries, with such exceptions, in the case of each of clauses (ii), (iii) and (iv), as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect,
provided
that in determining whether a Company Material Adverse Effect would result, any adverse effect otherwise excluded by clause (A) of the definition of Company
Material Adverse Effect shall be taken into account.
Section 4.05.
Capitalization
.
(a) The authorized capital stock of the Company consists of (i) 100,000,000 shares of Common Stock of the Company, par value $0.0001
per share (the “
Company Common Stock
”), and (ii) 5,000,000 shares of preferred stock, par value $0.0001 per share (the “
Company Preferred Stock
”). The rights and privileges of the Company Common Stock and the
Company Preferred Stock are as set forth in the Company’s certificate of incorporation. At the close of business on December 17, 2012, (A) 34,525,681 shares of Company Common Stock were issued and outstanding (none of which were
Company Restricted Stock Awards), zero (0) shares of Company Common
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Stock were held by the Company as treasury shares, and no shares of Company Preferred Stock were issued and outstanding; (B) other than warrants to purchase 37,500 shares of Company Common
Stock at an exercise price of $3.00 per share (all of which terminate as of the Closing if not exercised prior thereto), no warrants to purchase shares of capital stock of the Company were issued and outstanding; (C) Company Stock Options to
purchase an aggregate of 7,569,570 shares of Company Common Stock were issued and outstanding (of which Company Stock Options to purchase an aggregate of 4,813,132 shares of Company Common Stock were exercisable), with a weighted average exercise
price of $4.40; and (D) no shares of Company Common Stock were reserved for settlement of Company Compensatory Awards other than Company Stock Options. All outstanding shares of capital stock of the Company have been, and all shares that may be
issued pursuant to any Company Stock Plan will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued and are (or, in the case of shares that have not yet been issued, will be) fully paid, nonassessable
and free of preemptive rights.
(b)
Section 4.05(b)
of the Company Disclosure Schedule sets forth, as of the close
of business on December 17, 2012, a complete and correct list of all outstanding Company Compensatory Awards under the Company Stock Plans, including with respect to each such award, (i) the number of shares initially subject to such
award, (ii) the name of the holder, (iii) the grant date, (iv) as to Company Stock Options, whether the award was intended as of its date of grant to be an “incentive stock option” under Section 422 of the Code or a
non-qualified stock option, (v) the exercise or purchase price per share, (vi) the vesting schedule (including the extent to which it will become accelerated as a result of the Merger) and vested status of each such award, and
(vii) the expiration date of each such award. The Company Stock Plans set forth in
Section 4.05(b)
of the Company Disclosure Schedule are the only plans or programs the Company or any of its Subsidiaries has maintained under which
stock options, restricted stock, restricted stock units, stock appreciation rights or other compensatory equity-based awards have been or may be granted. Each form of award agreement is set forth in
Section 4.05(b)
of the Company
Disclosure Schedule. There are no Company Options or other securities outstanding under the Company’s 2006 U.S. Employee Stock Option Plan.
(c) Except as set forth in this
Section 4.05
and for changes since December 17, 2012 resulting from the exercise of Company Compensatory Awards and warrants to purchase Company Common
Stock outstanding on such date, there are no outstanding (i) shares of capital stock or voting securities or other Equity Interests of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock
or voting securities or other Equity Interests of the Company, (iii) options, warrants or other rights or arrangements to acquire from the Company, or other obligations or commitments of the Company to issue, any capital stock or other voting
securities, ownership interests or Equity Interests in, or any securities convertible into or exchangeable for capital stock or other voting securities, ownership interests or Equity Interests in, the Company, or (iv) restricted shares, stock
appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital
stock of, or other voting securities, ownership interests or Equity Interests in, the Company (the items in clauses (i)-(iv) being referred to collectively as the “
Company Securities
”), (v) voting trusts, proxies or other
similar agreements or understandings to which Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound with respect to the voting of any shares of capital stock of Company or any of its Subsidiaries
or (vi) contractual obligations or commitments of the Company or any of its Subsidiaries of any character restricting the transfer of, or requiring the registration for sale of, any shares of capital stock of Company or any of its Subsidiaries.
There are no outstanding obligations or commitments of any character of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the Company Securities. All Company Compensatory Awards may, by their terms, be treated
in accordance with
Section 2.06
. No Subsidiary of the Company owns any Company Securities.
Section 4.06.
Subsidiaries.
(a)
Section 4.06(a)
of the Company Disclosure Schedule sets forth a complete and correct list
of each Subsidiary of the Company, its place and form of organization and each jurisdiction in which it is authorized to conduct or actually conducts business.
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(b) Each Subsidiary of the Company is a corporation or other business entity duly
incorporated or organized (as applicable), validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and has all corporate or other organizational powers required to carry on its business as now
conducted. Each such Subsidiary is duly qualified to do business and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified or in good standing would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c)
Section 4.06(c)
of the Company Disclosure Schedule sets forth, for each Subsidiary of the Company, as applicable: (i) its authorized capital stock, voting securities or ownership interests; (ii) the number and type of any
capital stock, voting securities or ownership interests, and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable therefor, outstanding; and (iii) the record owner(s) thereof. All of the
outstanding capital stock of, or other voting securities or ownership interests in, each Subsidiary of the Company, is owned by the Company, directly or indirectly, free and clear of any Lien and free of any other limitation or restriction
(including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities or ownership interests). There are no outstanding (x) securities of the Company or any of its Subsidiaries convertible
into or exchangeable for shares of capital stock or other voting securities or ownership interests in any Subsidiary of the Company, (y) options, warrants or other rights or arrangements to acquire from the Company or any of its Subsidiaries,
or other obligations or commitments of the Company or any of its Subsidiaries to issue, any capital stock or other voting securities or ownership interests in, or any securities convertible into or exchangeable for any capital stock or other voting
securities or ownership interests in, any Subsidiary of the Company, or (z) restricted shares, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative
of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, any Subsidiary of the Company (the items set forth in
Section 4.06(c)
of the Company Disclosure Schedule being referred to collectively as the “
Company Subsidiary Securities
”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
of the Company Subsidiary Securities. All of the Company Subsidiary Securities are duly authorized, validly issued, fully paid and nonassessable.
(d) Except for the Company Subsidiary Securities, neither the Company nor any of its Subsidiaries directly or indirectly owns any capital stock of, or other equity, ownership, profit, voting or similar
interest in, or any interest convertible, exchangeable or exercisable for any equity, ownership, profit, voting or similar interest in, any Person.
Section 4.07.
SEC Filings and the Sarbanes-Oxley Act.
(a) The Company
has delivered, or otherwise made available through filings with the SEC, to Parent complete and correct copies of (i) its Registration Statement on Form S-1 filed with the SEC on August 24, 2011 and all amendments thereto, (ii) its
quarterly report on Form 10-Q for the quarter ended September 30, 2012, and (iii) all of its other reports, statements, schedules and registration statements filed with or furnished to the SEC since August 24, 2011 (the documents
referred to in this
Section 4.07(a)
and
Section 4.07(e)
, together with all information incorporated by reference therein in accordance with applicable SEC regulations, are collectively referred to in this Agreement as the
“
Company SEC Documents
”).
(b) Since August 24, 2011, the Company has filed with or furnished to the SEC
each report, statement, schedule, form or other document or filing required by Applicable Law to be filed or furnished by the Company at or prior to the time so required. No Subsidiary of the Company is required to file or furnish any report,
statement, schedule, form or other document with, or make any other filing with, or furnish any other material to, the SEC.
(c) As of its filing date (or, if amended or superseded by a filing prior to the date hereof, on the date of such filing), each Company
SEC Document complied, and each such Company SEC Document filed subsequent to the
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date hereof and prior to the consummation of the Merger will comply, as to form in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the
Sarbanes-Oxley Act, as the case may be.
(d) As of its filing date (or, if amended or superseded by a filing prior to the date
hereof, on the date of such filing), each Company SEC Document filed pursuant to the Exchange Act did not, and each such Company SEC Document filed subsequent to the date hereof and prior to the consummation of the Merger 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. Each Company SEC Document that is a
registration statement, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such registration statement or amendment became effective, did not, and each such Company SEC Document filed subsequent to the
date hereof and prior to the consummation of the Merger will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
(e) The Company has delivered, or otherwise made available through filings with the SEC, to Parent copies of all comment
letters received by the Company from the SEC since August 24, 2011 relating to the Company SEC Documents, together with all written responses of the Company thereto. There are no outstanding or unresolved comments in any such comment letters
received by the Company from the SEC. To the Knowledge of the Company, none of the Company SEC Documents is the subject of any ongoing review by the SEC.
(f) Each required form, report and document containing financial statements that has been filed with or submitted to the SEC by the Company since August 24, 2011 was accompanied by the certifications
required to be filed or submitted by the Company’s principal executive officer and principal financial officer, as required, pursuant to the Sarbanes-Oxley Act and, at the time of filing or submission of each such certification, such
certification was true and accurate and complied with the Sarbanes-Oxley Act. None of the Company, any current executive officer of the Company or, to the Knowledge of the Company, any former executive officer of the Company has received written
notice from any Governmental Authority challenging or questioning the accuracy, completeness, form or manner of filing of such certifications made with respect to the Company SEC Documents filed prior to the date of this Agreement.
(g) The Company is a “reporting issuer” or the equivalent in each of the provinces of Canada other than Quebec, is not on any
list of reporting issuers in default maintained by the Canadian Securities Authorities and is not in default of any material requirements under Canadian Securities Laws. The Company is an “SEC foreign issuer” within the meaning of
applicable Canadian Securities Laws. All documents filed with the Canadian Securities Authorities did not at the time filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances under which they were made. The Company is and has been in compliance in all material respects with its timely and continuous disclosure obligations under Canadian
Securities Laws. The Company has not filed any confidential material change report or similar disclosure with the Canadian Securities Authorities that remains confidential. No securities of the Company are listed or posted for trading on any stock
exchange in Canada. No suspension of trading in or cease trading order with respect to any securities of the Company, and no inquiry or investigation (formal or informal) of any Canadian Securities Authority, is in effect or ongoing or expected to
be implemented or undertaken.
Section 4.08.
Financial Statements; Internal Controls.
(a) The audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included in the
Company SEC Documents (i) complied as to form, as of their respective filing dates with the SEC, in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto,
(ii) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except, in the case of unaudited statements, for the absence of footnotes), and (iii) fairly presented (except as may be indicated in the
notes thereto) in all material respects the
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consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim financial statements).
(b) The Company’s
system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) is sufficient in all material respects to provide reasonable assurance (i) that transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP, (ii) that receipts and expenditures are executed in accordance with the authorization of management, and (iii) that any unauthorized use, acquisition or disposition of the
Company’s assets that would materially affect the Company’s financial statements would be detected or prevented in a timely manner. There were no significant deficiencies or material weaknesses identified in management’s assessment of
internal controls as of and for the year-ended December 31, 2011 (nor has any such deficiency or weakness been identified since such date).
(c) The Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are reasonably designed to ensure that (i) all information
(both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported to the individuals responsible for preparing such reports
within the time periods specified in the rules and forms of the SEC, and (ii) 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 principal executive officer and principal financial officer of the Company required under the Exchange Act with respect to such reports.
(d) Since August 24, 2011, neither the principal executive officer nor the principal financial officer of the Company has become aware of any fact, circumstance or change that is reasonably likely to
result in a “significant deficiency” or a “material weakness” in the Company’s internal controls over financial reporting.
(e) The audit committee of the Company Board includes an Audit Committee Financial Expert, as defined by Item 407(d)(5)(ii) of Regulation S-K.
(f) The Company has adopted a code of ethics, as defined by Item 406(b) of Regulation S-K, for senior financial officers, applicable
to its principal financial officer, comptroller or principal accounting officer, or persons performing similar functions. The Company has promptly disclosed any change in or waiver of the Company’s code of ethics with respect to any such
persons, as required by Section 406(b) of the Sarbanes-Oxley Act. To the Knowledge of the Company, there have been no violations of provisions of the Company’s code of ethics by any such persons.
Section 4.09.
Disclosure Documents
. The proxy or information statement of the Company to be filed with the SEC in connection
with the Merger and any amendments or supplements thereto (the “
Proxy Statement
”) will, when filed, comply as to form in all material respects with the applicable requirements of the Exchange Act. At the time the Proxy Statement or
any amendment or supplement thereto is first mailed to stockholders of the Company, and at the time such stockholders vote on 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 required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The
representations and warranties contained in this
Section 4.09
will not apply to statements or omissions included in the Proxy Statement based upon information furnished to the Company in writing by Parent specifically for use therein.
Section 4.10.
Absence of Certain Changes
. Since the Company Balance Sheet Date through the date of this
Agreement, (i) the business of the Company and each of its Subsidiaries has been conducted in the ordinary course consistent with past practice, except for actions taken pursuant to this Agreement in connection with the consummation of the
Merger, (ii) there has not been any fact, event, change, development or set of circumstances
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that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (iii) there has not been any action or event, nor any
authorization, commitment or agreement by the Company or any of its Subsidiaries with respect to any action or event, that if taken or if it occurred after the date hereof would be prohibited by
Section 6.01(a)
,
(b)
,
(c)
,
(d)
,
(e)
,
(f)
,
(g)
,
(h)
,
(i)
,
(j)
,
(k)
,
(m)
,
(n)
or
(o)
.
Section 4.11.
No Undisclosed Material Liabilities
. There are no liabilities or obligations of the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise and there is no existing condition, situation or set of circumstances that would reasonably be expected to result in such a liability or obligation, other than:
(a) liabilities or obligations disclosed or provided for in the Company Balance Sheet or disclosed in the notes thereto;
(b) liabilities or obligations incurred in the ordinary course of business since the Company Balance Sheet Date in amounts consistent
with past practice that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect;
(c) liabilities or obligations incurred directly as a result of this Agreement or in connection with the transactions contemplated hereby; and
(d) liabilities for the performance of obligations under Contracts of the Company and its Subsidiaries, to the extent such liabilities
are readily ascertainable from the face of such Contracts.
Section 4.12.
Litigation
.
(a) There is no Proceeding pending against or, to the Knowledge of the Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective businesses or assets or any of the directors or employees of the Company or any of its Subsidiaries or, to the Knowledge of the Company, any of its stockholders (in each case insofar as any such matters relate
to their activities with the Company or any of its Subsidiaries) that (i) would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect or (ii) challenges the validity or propriety, or seeks to
prevent, materially impair or materially delay consummation of the Merger or any other transaction contemplated by this Agreement.
(b) Neither the Company nor any of its Subsidiaries is subject to any Order that (i) prohibits or restricts the Company or any of its Subsidiaries from engaging in or otherwise conducting its
business as presently or proposed to be conducted or (ii) would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
(c)
Section 4.12(c)
of the Company Disclosure Schedule includes, as of the date of this Agreement, a complete and accurate summary of each claim, Proceeding or Order pending or, to the
Knowledge of the Company, threatened against the Company that would reasonably be expected to result in a liability to the Company or any of its Subsidiaries in excess of $50,000.
Section 4.13.
Compliance with Applicable Law
.
(a) The Company and each of its Subsidiaries is and, since January 1, 2007 has been, in compliance in all material respects with all Applicable Laws and Orders and, to the Knowledge of the Company,
no condition or state of facts exists that is reasonably likely to give rise to a violation of, or a liability or default under any Applicable Law or Order. Neither the Company nor any of its Subsidiaries has received any written notice since
January 1, 2007 (i) of any administrative, civil or criminal investigation or audit by any Governmental Authority relating to the Company or any of its Subsidiaries or (ii) from any Governmental Authority alleging that the
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Company or any of its Subsidiaries are not in compliance with any Applicable Law or Order in any material respect.
(b) Each of the Company and its Subsidiaries has in effect all material Governmental Authorizations necessary for it to own, lease or otherwise hold and operate its properties and assets and to carry on
its businesses and operations as now conducted. There have occurred no material defaults (with or without notice or lapse of time or both) under, material violations of, or events giving rise to any right of termination, material amendment or
cancellation of, any such Governmental Authorizations.
(c) Without limiting any other provision of this Agreement, with
respect to each Government Contract, the Company and each Subsidiary of the Company: (i) has not at any time charged the U.S. government or any other Governmental Authority a price higher than its commercial customers with respect to the
services or products covered by such Government Contract; and (ii) has complied in all respects with the notice, pricing, payment, disclosure and other requirements contained in such Government Contract and with all Applicable Laws (and there
are no facts or circumstances that would reasonably be expected to result in a demand by the U.S. government or any other Governmental Authority for a refund or other payment based upon the Company’s or any of its Subsidiaries’ failure to
comply with any such requirements).
Section 4.14.
Material Contracts
(a)
Section 4.14(a)
of the Company Disclosure Schedule contains a complete and correct list of each of the following Contracts
to which the Company or any of its Subsidiaries is a party or which bind or affect their respective properties or assets as of the date of this Agreement:
(i) each Contract between the Company or any of its Subsidiaries and any of the 50 (fifty) largest direct end user licensees or other customers of the Company and its Subsidiaries (determined on the basis
of aggregate revenues recognized by the Company and its Subsidiaries over the four (4) consecutive fiscal quarter periods ended September 30, 2012) (“
Major Customers
”);
(ii) except for the Contracts disclosed in clause (i) above, each Contract that involves performance of services or
delivery of goods, products or developmental, consulting or other services commitments by the Company or any of its Subsidiaries, providing for either (A) recurring annual payments to the Company or any of its Subsidiaries of $250,000 or more
or (B) aggregate payments to the Company or any of its Subsidiaries of $500,000 or more;
(iii) each
Contract between the Company or any of its Subsidiaries and any of (A) the 25 (twenty-five) largest licensors of Intellectual Property to the Company or any of its Subsidiaries (determined on the basis of aggregate payments made or owed by the
Company and its Subsidiaries over the four (4) consecutive fiscal quarter period ended September 30, 2012), (B) the 20 (twenty) largest vendors (other than licensors), including any supplier of manufacturing, outsourcing or
development services, to the Company or any of its Subsidiaries (determined on the basis of aggregate payments made or owed by the Company and its Subsidiaries over the four (4) consecutive fiscal quarter period ended September 30, 2012)
(“
Major
Suppliers
”), and (C) the 25 (twenty-five) largest distributors or resellers (including OEMs and value-added resellers) of any of the Company Products or services provided by the Company or any of its Subsidiaries
(determined on the basis of aggregate sales of Company Products made through such distributors or resellers over the four (4) consecutive fiscal quarter period ended September 30, 2012);
(iv) each Contract that contains any provisions restricting the Company or any of its Affiliates or their successors from
(A) competing or engaging in any activity or line of business or with any Person or in any area or pursuant to which any benefit or right is required to be given or lost as a result of so competing or engaging, or which would have any such
effect after the Closing Date or (B) hiring or soliciting for hire the employees or contractors of any Third Party;
(v) each Contract that (A) grants any exclusive rights to any Third Party, including any exclusive license or supply or distribution agreement or other exclusive rights, (B) grants any rights of
first refusal,
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rights of first negotiation or similar rights with respect to any product, service or Company IP, (C) contains any provision that requires the purchase of all or any portion of the
Company’s or any of its Subsidiaries’ requirements from any Third Party, or any other similar provision, (D) grants “most favored nation” or similar rights, (E) contains pricing commitments with respect to future
purchases by any Third Party of Company Products or services, or (F) obligates the Company or its Subsidiaries to provide maintenance and/or support with respect to any discontinued product or any prior version of any Company Product for more
than 24 (twenty-four) months following the release of a replacement product or new version of a Company Product, as applicable;
(vi) each lease or sublease (whether of real or personal property) to which the Company or any of its Subsidiaries is party as either lessor or lessee, providing for either (A) annual payments after
the date hereof of $50,000 or more or (B) aggregate payments after the date hereof of $100,000 or more;
(vii) each Contract pursuant to which the Company or any of its Subsidiaries has agreed or is required to provide any
Third Party with rights in or access to source code (including on a contingent basis), or to provide for source code to be put in escrow, indicating for each Contract providing for source code escrow whether such Contract includes (A) release
conditions that differ materially from the release conditions specified in the Company’s standard source code escrow terms or (B) use rights upon release that would permit any Third Party to utilize any source code of the Company or any of
its Subsidiaries other than for the limited purpose of maintaining and supporting such Third Party’s internal use of one or more Company Products pursuant to an end user license agreement;
(viii) each Contract pursuant to which the Company or any of its Subsidiaries has or has been granted any license to
Intellectual Property, other than nonexclusive licenses granted in the ordinary course of business of the Company and its Subsidiaries consistent with past practice;
(ix) each Contract relating to Indebtedness (in any case, whether incurred, assumed, guaranteed or secured by any asset),
except any such Contract with an aggregate outstanding principal amount not exceeding $100,000 and which may be prepaid on not more than thirty (30) days’ notice without the payment of any penalty;
(x) each Contract pursuant to which the Company or any of its Subsidiaries is a party that creates or grants a material
Lien (including Liens upon properties acquired under conditional sales, capital leases or other title retention or security devices), other than Permitted Liens;
(xi) each Contract under which the Company or any of its Subsidiaries has, directly or indirectly, made any loan, capital
contribution to, or other investment in, any Person (other than the Company or any of its Subsidiaries and other than (A) extensions of credit in the ordinary course of business consistent with past practice and (B) investments in
marketable securities in the ordinary course of business);
(xii) each Contract under which the Company or any
of its Subsidiaries has any obligations which have not been satisfied or performed (other than confidentiality obligations) relating to the acquisition or disposition of all or any portion of any business (whether by merger, sale of stock, sale of
assets or otherwise) for consideration in excess of $100,000;
(xiii) any Contract (A) (1) between
the Company or any of its Subsidiaries and any Governmental Authority, or (2) between the Company or any of its Subsidiaries, as a subcontractor, and any prime contractor to any Governmental Authority, or (B) financed by any Governmental
Authority and subject to the rules and regulations of any Governmental Authority concerning procurement;
(xiv)
each partnership, joint venture or other similar Contract or arrangement material to the Company and its Subsidiaries, taken as a whole (but excluding reseller, referral and other commercial arrangements that do not involve the sharing of profits or
losses or shared control of property);
(xv) each Contract for the development for the benefit of the Company
or any of its Subsidiaries by any party other than the Company or its Subsidiaries, of Software or Intellectual Property that is material to the Company and its Subsidiaries, taken as a whole;
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(xvi) each employee collective bargaining agreement or other Contract with
any labor union, and each employment Contract (other than for employment at-will or similar arrangements) that is not terminable by the Company without notice and without cost to the Company;
(xvii) each Contract: (A) entered into in connection with the settlement or other resolution of any Proceeding that
has any continuing material obligations, liabilities or restrictions with respect to the Company or any of its Subsidiaries, or (B) entered into in the last three (3) years in connection with the settlement or other resolution of any
Proceeding that involved payment by or to the Company or any of its Subsidiaries of more than $100,000;
(xviii) each Contract providing for indemnification of any Person (A) with respect to material liabilities relating
to any current or former business of the Company, any of its Subsidiaries or any predecessor Person, other than indemnification obligations of the Company or any of its Subsidiaries pursuant to the provisions of a Contract entered into by the
Company or any of its Subsidiaries in the ordinary course of business consistent with past practice or that would not reasonably be expected to have a Company Material Adverse Effect, or (B) with respect to claims involving infringement or
misappropriation of any Intellectual Property rights of any Third Party, which Contract does not provide the Company or its Subsidiaries with the right to (1) assume control of the defense and settlement of any such claim, (2) require the
indemnified Person to implement a non-infringing substitute provided by the Company or its Subsidiaries for any Company Product that is the subject of any such claim and (3) terminate the indemnified Person’s right to use any Company
Product that is the subject of any such claim if the Company or its Subsidiaries is unable to provide a non-infringing substitute or otherwise abate the infringement or alleged infringement;
(xix) each Contract containing (A) any provisions having the effect of providing that the consummation of the Merger
or the other transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, result in any violation or breach of, or constitute a default (with or without notice or lapse of time or
both) under, such Contract (if such Contract is material to the Company and its Subsidiaries, taken as a whole), or give rise under such Contract to any right of, or result in, a termination, right of first refusal, amendment, revocation,
cancellation or acceleration, or a loss of a benefit or the creation of any Lien upon any of the properties or assets of the Company, Parent or any of their respective Affiliates, or to any increased, guaranteed, accelerated or additional rights or
entitlements of any Person, except to the extent that such termination, amendment, revocation, cancellation, acceleration, loss, Lien or entitlements are not material to the Company and its Subsidiaries, taken as a whole, or are required by
Applicable Law, (B) any restriction on the ability of the Company or any of its Subsidiaries to assign all or any portion of its rights, interests or obligations thereunder (if such Contract is material to the Company and its Subsidiaries,
taken as a whole), unless such restriction expressly excludes any assignment to Parent and any of its Affiliates that holds assets substantially equivalent to the assigning entity in connection with or following the consummation of the Merger and
the other transactions contemplated by this Agreement or (C) any standstill or similar provision purporting to limit the authority of any party to such agreement to acquire any Equity Interest in the Company or any other Person;
(xx) each Contract or plan, including any stock option or equity plan, that may or will increase, or accelerate the
vesting of, the benefits to any Person by the occurrence of any of the transactions contemplated by this Agreement, or the value of any of the benefits which will be calculated on the basis of any of the transactions contemplated by this Agreement;
or
(xxi) except for the Contracts disclosed above, each Contract required to be filed by the Company pursuant
to Item 601 of Regulation S-K under the Securities Act, or that is otherwise material to the Company and its Subsidiaries, taken as whole; or
(b) Each Contract disclosed (or required to be disclosed) in
Section 4.14(a)
of the Company Disclosure Schedule, required to be delivered or made available pursuant to
Section 4.14(c)
or which would have been required to be so disclosed if it had existed on the date of this Agreement (each, a “
Material Contract
”) (unless
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it has terminated or expired (in each case according to its terms)) is in full force and effect and is a legal, valid and binding agreement of the Company or its Subsidiary, as the case may be,
and, to the Knowledge of the Company, of each other party thereto, enforceable against the Company or such Subsidiary, as the case may be, and, to the Knowledge of the Company, against the other party or parties thereto, in each case, in accordance
with its terms except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar Applicable Law affecting creditors’ rights generally and by general principles of equity. Neither the Company nor any of its
Subsidiaries has received any written notice to terminate, in whole or part, materially amend or not renew any executory obligation of a counterparty to a Material Contract that has not terminated or expired (in each case according to its terms)
prior to the date of this Agreement (nor, to the Knowledge of the Company, has there been any occurrence that a reasonable person would consider an indication that any such notice of termination will be served on or after the date of this Agreement
on the Company or any Subsidiary of the Company by any counterparty to a Material Contract). None of the Company, any of its Subsidiaries or, to the Knowledge of the Company, any other party thereto is in default or breach in any material respect
under the terms of any Material Contract, and, to the Knowledge of the Company, no event or circumstance has occurred that, with notice or lapse of time or both, would constitute any event of default thereunder.
(c) Complete, correct and unredacted copies of each Material Contract, as amended and supplemented, have been delivered by the Company to
Parent, or otherwise made available as an exhibit to the Company SEC Documents, by the Company to Parent.
Section 4.15.
Taxes
.
(a) (i) All income, franchise and other material Company Returns required by Applicable Law to be filed with any
Taxing Authority have been filed when due (taking into account extensions) in accordance with all Applicable Laws, (ii) all Company Returns that have been filed are true and complete in all material respects, (iii) the Company and each of
its Subsidiaries have paid (or have had paid on their behalf) all material Taxes due and owing (whether or not shown on any Tax Return), (iv) all Taxes that the Company or any of its Subsidiaries is or was required to withhold or collect in
connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or other Person have been duly withheld or collected and have been timely paid, to the extent required, to the proper Taxing Authority,
(v) the unpaid Taxes of the Company and its Subsidiaries did not, as of the Company Balance Sheet Date, exceed the reserve set forth on the face of the Company Balance Sheet (rather than in any notes thereto), and (vi) since the Company
Balance Sheet Date, neither the Company nor any of its Subsidiaries has incurred any material liability for Taxes outside the ordinary course of business or otherwise inconsistent with past custom and past practice;
(b) (i) The income and franchise Company Returns through the taxable year ended December 31, 2008 have been examined and closed or
are Company Returns with respect to which the applicable period for assessment under Applicable Law, after giving effect to extensions or waivers, has expired; (ii) the income Tax Returns through the taxable year ended December 31, 2011 of
the Canadian Subsidiary have been assessed; and (iii) neither the Company nor any of its Subsidiaries has granted any currently effective extension or waiver of the limitations period applicable to any material Company Return, which period
(after giving effect to such extension or waiver) has not yet expired;
(c) (i) No deficiencies for Taxes with respect to the
Company or any of its Subsidiaries have been claimed, proposed or assessed in writing by any Taxing Authority, except for deficiencies that have been paid or otherwise resolved, (ii) there is no Proceeding pending or threatened in writing
against or with respect to the Company or any of its Subsidiaries in respect of any material Tax or Tax asset, (iii) no claim has been made in writing by a Taxing Authority in a jurisdiction where the Company or any of its Subsidiaries does not
file income or franchise Tax Returns that the relevant Company or Subsidiary is or may be subject to taxation by that jurisdiction and (iv) no closing agreements, private letter rulings or similar agreements or rulings have been entered into or
issued
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by any Taxing Authority with respect to the Company or any of its Subsidiaries which would be binding following the Closing, and no such agreements or rulings have been applied for and are
currently pending;
(d) There are no Liens for Taxes on any assets of the Company or any of its Subsidiaries, other than
Permitted Liens;
(e) During the three-year period ending on the date hereof, neither the Company nor any of its Subsidiaries
was a “distributing corporation” or a “controlled corporation” in a transaction intended to be governed by Section 355 of the Code;
(f) Neither the Company nor any of its Subsidiaries (i) has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2), or (ii) to
the Knowledge of the Company, has participated in any “reportable transaction” within the meaning of Treasury Regulations Section 1.6011-4(b);
(g) (i) Neither the Company nor any of its Subsidiaries is or has been a member of an affiliated group of corporations within the meaning of Section 1504 of the Code or any group that has filed a
combined, consolidated or unitary Tax Return (other than the group of which the Company is or was the common parent); and (ii) neither the Company nor any of its Subsidiaries has any liability for the Taxes of any Person (other than the Company
or its Subsidiaries) under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law), as a transferee or successor, by contract or otherwise;
(h) There are no Tax sharing agreements or similar arrangements (including Tax indemnity arrangements, other than customary commercial or
financial arrangements entered into in the ordinary course of business consistent with past practice the principal purpose of which is unrelated to Taxes) with respect to or involving the Company or any of its Subsidiaries;
(i) Neither the Company nor any of its Subsidiaries owns an interest in real property in any jurisdiction (x) in which a material
amount of Tax is imposed, or the value of the interest is materially reassessed, on the transfer of an interest in real property resulting from the Merger and (y) which treats the transfer of an interest (resulting from the Merger) in an entity
that owns an interest in real property as a transfer of the interest in real property;
(j) Neither the Company nor any of its
Subsidiaries (i) is or has been a shareholder of a “controlled foreign corporation” as defined in Section 957 of the Code (or any similar provision of state, local or foreign law); (ii) is or has been a shareholder of a
“passive foreign investment company” within the meaning of Section 1297 of the Code; or (iii) is or has engaged in a trade or business, has or had a permanent establishment (within the meaning of an applicable Tax treaty), or
otherwise become subject to Tax jurisdiction in a country other than the country of its formation.
(k) No foreign Subsidiary
of the Company (i) has or has had any nexus with the United States, a trade or business or permanent establishment within the United States or any other connection with the United States that has subjected or could reasonably be expected to
have subjected it to United States federal, state or local Tax; (ii) is or was a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code or is treated as a U.S. corporation under
Section 7874(b) of the Code; (iii) is or was created or organized in the United States such that such entity would be taxable in the United States as a domestic entity pursuant to United States Treasury Regulation
Section 301.7701-5(a); or (iv) holds assets which constitute U.S. property within the meaning of Section 956 of the Code.
(l)
Section 4.15(l)
of the Company Disclosure Schedule contains a list of each Tax Grant. The Company and its Subsidiaries have complied in all material respects with the conditions stipulated
in each Tax Grant, no submissions made to any Taxing Authority in connection with obtaining any Tax Grant contained any material misstatement or omission and the transactions expressly contemplated by this Agreement will not adversely affect the
eligibility of the Company or any of its Subsidiaries for any Tax Grant.
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(m) The Company and its Subsidiaries have made or obtained records or documents that meet
the requirements of any applicable transfer pricing legislation, including in the case of a Canadian Subsidiary, paragraphs 247(4)(a) to (c) of the Income Tax Act (Canada) with respect to all relevant transactions. Transactions in respect of
goods or services between the Company (or any Subsidiary) and any non-arm’s length Person have occurred at fair market value and on commercial terms and conditions.
Section 4.16.
Employee Benefit Plans
.
(a)
Section 4.16(a)
of the Company Disclosure Schedule contains a correct and complete list identifying each material Company Employee Plan. “
Company Employee Plan
” means each “employee benefit plan,” as defined in Section 3(3) of ERISA,
each employment, individual consulting, severance or similar contract, plan, arrangement or policy and each other plan or arrangement (written or oral) providing for compensation, bonuses, profit-sharing, stock option or other stock-related rights
or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangements), health or medical benefits, employee assistance program, disability or sick leave benefits, workers’ compensation,
supplemental unemployment benefits, severance or termination benefits or post-employment or retirement benefits (including compensation, pension, health, medical or life insurance benefits) which is maintained, administered or contributed to by the
Company or any Subsidiary or ERISA Affiliate and covers any current or former employee, consultant or director of the Company or any of its Subsidiaries (or any dependent or beneficiary thereof), or under which the Company or any Subsidiary or ERISA
Affiliate thereof has any material obligation or liability. Complete and accurate copies of each Company Employee Plan (and, if applicable, related trust or funding agreements or insurance policies) and all amendments thereto, and descriptions of
all material terms of any plan that is not in writing, have been furnished or made available to Parent together with (to the extent applicable to such Company Employee Plan) (i) the three most recent annual reports and Tax Returns (and all
schedules thereto), if any, required by be filed with the Internal Revenue Service with respect to such Company Employee Plan, (ii) the most recently received Internal Revenue Service determination letter, if any, issued with respect to each
Company Employee Plan that is intended to qualify under Section 401(a) of the Code, and (iii) all other filings and material correspondence with any Governmental Authority with respect to each Company Employee Plan.
(b) Neither the Company nor any ERISA Affiliate nor any predecessor thereof sponsors, maintains or contributes or is obligated to
contribute to, or has in the past sponsored, maintained or contributed or been obligated to contribute to, any Company Employee Plan subject to Section 302 or Title IV of ERISA or Section 412 of the Code, any defined benefit plan, any
“multiemployer plan” within the meaning of Section 4001(a)(3) or 3(37) of ERISA, or any “multiple employer plan” within the meaning of Section 413(c) of the Code.
(c) Each Company Employee Plan which is intended to be qualified under Section 401(a) of the Code has received a favorable
determination letter or is permitted to rely on a favorable opinion letter, in either case, that has not been revoked, or has pending or has time remaining in which to file an application for such determination from the Internal Revenue Service,
and, to the Knowledge of the Company, there is no reason why any such determination letter would reasonably be expected to be revoked or not be issued. Each trust established in connection with any Company Employee Plan which is intended to be
exempt from federal income taxation under Section 501(a) of the Code is so exempt, and to the Knowledge of the Company, no fact or event has occurred that could reasonably be expected to adversely affect the exempt status of any such trust.
There has not been any non-exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Company Employee Plan.
(d) Each Company Employee Plan has been maintained in material compliance with its terms and with the requirements prescribed by any and
all Applicable Laws, including ERISA and the Code, which are applicable to such Company Employee Plan. The Company and each of its Subsidiaries have performed all material obligations required to be performed by it under all Company Employee Plans.
No events have occurred with respect to any Company Employee Plan that could result in a material payment or assessment by or against the
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Company of any excise Taxes under Sections 4972, 4975, 4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code.
(e) To the Knowledge of the Company, no Company Employee Plan is under audit or is subject of an investigation by the Internal Revenue Service, the U.S. Department of Labor, the SEC, the PBGC or any other
Governmental Authority.
(f) The consummation of the transactions contemplated by this Agreement will not (either alone or
together with any other event) (i) entitle any employee, director or independent contractor of the Company or any of its Subsidiaries to any pay or benefits under any Company Employee Plan; (ii) accelerate the time of payment or vesting of
any compensation or equity-based award; (iii) trigger any funding (through a grantor trust or otherwise) of compensation or benefits under any Company Employee Plan; or (iv) trigger any payment, increase the amount payable or trigger any
other material obligation pursuant to any Company Employee Plan.
(g) There is no contract, plan or arrangement (written or
otherwise) covering any employee or former employee of the Company or any of its Subsidiaries that, individually or collectively, (i) would entitle any employee or former employee to any severance or other payment as a result of the
transactions contemplated hereby (either alone or together with any other event), or (ii) could give rise to the payment of any amount that would not be deductible pursuant to the terms of Sections 280G or 162(m) of the Code.
(h) Neither the Company nor any of its Subsidiaries has any liability in respect of post-retirement health, medical or life insurance
benefits for retired, former or current employees or directors of the Company or its Subsidiaries except as required to comply with Section 4980B of the Code or any similar state law provision.
(i) There is no material action, suit, investigation, audit or other Proceeding pending against or involving or, to the Knowledge of the
Company, threatened against or involving any Company Employee Plan before any arbitrator or any Governmental Authority.
(j)
Each Company Employee Plan which is a “non-qualified deferred compensation plan” (as such term is defined in Section 409A(d)(1) of the Code) has, at all times, been administered in compliance with the requirements of Section 409A
of the Code and applicable guidance issued thereunder, in all cases so that the additional Tax described in Section 409A(a)(1)(B) of the Code will not be assessed against the individuals participating in any such non-qualified deferred
compensation plan with respect to benefits due or accruing thereunder.
(k) Each Company Stock Option was granted with a per
share exercise price that is not less than the fair market value of a share of Company Common Stock on the date of its grant and is exempt from the additional tax and interest described in Section 409A(a)(1)(B) of the Code. Each Company Stock
Option characterized by the Company as an “incentive stock option” within the meaning of Section 422 of the Code complies with all of the applicable requirements of Section 422 of the Code.
(l) Each material International Plan is listed on
Section 4.16(l)
of the Company Disclosure Schedule. With respect to each
International Plan, (i) such International Plan is in material compliance with the Applicable Laws of each jurisdiction in which such International Plan is maintained, (ii) all contributions to, and material payments from, such
International Plan which may have been required to be made in accordance with the terms of such International Plan, and, when applicable, the Applicable Law of the jurisdiction in which such International Plan is maintained, have been timely made or
shall be made by the Closing Date, and all such contributions to such International Plan, and all payments under such International Plan, for any period ending before the Closing Date that are not yet, but will be, required to be made, are reflected
as an accrued liability on the Company Balance Sheet, (iii) the Company, each Subsidiary and each ERISA Affiliate has materially complied with all applicable reporting and notice requirements with respect to such International Plan, and such
International Plan has obtained from the Governmental Authority having jurisdiction with respect to such International Plan any required determinations that such International Plan is in compliance in all material
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respects with the Applicable Law of the relevant jurisdiction if such determinations are required in order to give effect to such International Plan, (iv) such International Plan has been
administered in all material respects at all times in accordance with its terms and all Applicable Laws, (v) to the Knowledge of the Company, there are no pending investigations by any Governmental Authority involving such International Plan,
and no pending claims (except for claims for benefits payable in the normal operation of such International Plan), suits or other Proceedings against such International Plan or asserting any rights or claims to benefits under such International
Plan, (vi) the consummation of the transactions contemplated by this Agreement will not by itself create or otherwise result in any liability with respect to such International Plan, and (vii) except as required by Applicable Law, no
condition exists that would prevent the Company from terminating or amending any International Plan at any time for any reason in accordance with the terms of each such International Plan without the payment of any fees, costs or expenses (other
than the payment of benefits accrued on the Company Balance Sheet and any normal and reasonable expenses typically incurred in a termination event). The benefits available under all International Plans in the aggregate do not provide materially
greater benefits to employees of the Company participating in such plans than the benefits available under the Company Employee Plans for employees of the Company in the United States. No International Plan has unfunded liabilities that will
not be offset by insurance or that are not fully accrued on the financial statements of the Company.
(m) There does not now
exist, nor do any circumstances exist that would reasonably be expected to result in, any Controlled Group Liability that would be a material liability of the Company or any of its Subsidiaries or ERISA Affiliates at or following the Effective Time.
Section 4.17.
Labor and Employment Matters
.
(a)
Section 4.17(a)
of the Company Disclosure Schedule lists the names and current position, annual salary rates or current
hourly wages, bonus opportunity, hire date, credited service, accrued vacation or paid-time-off, principal work location and leave status of all present employees of the Company and each of its Subsidiaries and each such employee’s status as
being exempt or nonexempt from the application of state and federal wage and hour laws applicable to employees who do not occupy a managerial, administrative or professional position or any similar Applicable Law regarding wages, hours of work
and/or overtime applicable to employees located outside of the United States.
(b) Neither the Company nor any of its
Subsidiaries is or was a party to, bound by or subject to, or is currently negotiating, any collective bargaining agreement or understanding with a labor union or organization. None of the employees of the Company or any of its Subsidiaries is
represented by any union with respect to his or her employment by the Company or any Subsidiary. There is no (i) material unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding involving
the Company or any of its Subsidiaries, (ii) activity or proceeding by a labor union or representative thereof to organize any employees of the Company or any of its Subsidiaries, or (iii) lockouts, strikes, slowdowns, picketings,
negotiated industrial actions, work stoppages or threats thereof by or with respect to such employees, in each case, pending, or to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries, and during the last three
(3) years there has not been any such action. There are no unfair labor practice charges pending before the National Labor Relations Board or any other Governmental Authority, nor any grievances, complaints, claims or other Proceedings, in each
case, which are pending or, to the Knowledge of the Company, threatened by or on behalf of any employees of the Company or any of its Subsidiaries.
(c) Since January 1, 2010, (i) there has been no “mass layoff” or “plant closing” as defined by the Worker Adjustment and Retraining Notification Act of 1998 in respect of
the Company or any of its Subsidiaries and (ii) neither the Company nor any of its Subsidiaries has been affected by any transactions or engaged in layoffs or employment terminations sufficient in number to trigger application of any similar
Applicable Law.
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(d)
Schedule 4.17(d)
of the Company Disclosure Schedule contains a list of all
independent contractors, consultants, agents or agency employees currently engaged by the Company and each of its Subsidiaries, along with the position, date of retention and rate of remuneration for each such Person. Except as set forth in
Schedule 4.17(d)
of the Company Disclosure Schedule, neither the Company nor any Subsidiary thereof engages or retains any independent contractors, consultants, agents or agency employees.
(e) The Company is in compliance in all material respects with all Applicable Laws respecting employment including discrimination in
employment, terms and conditions of employment, worker classification (including the proper classification of workers as independent contractors and consultants and of employees as exempt or non-exempt, in each case, under the Fair Labor Standards
Act of 1938, as amended, and any similar Applicable Law), wages, hours and occupational safety and health and employment practices, including the Immigration Reform and Control Act, and is not engaged in any unfair labor practice.
Section 4.18. Insurance Policies.
Section 4.18
of the Company Disclosure Schedule lists all material insurance policies
and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers or directors of the Company and its Subsidiaries (collectively, the “
Insurance Policies
”) and the coverage limitations and
deductibles applicable to each such policy. All of the Insurance Policies or renewals thereof are in full force and effect and not voidable. There is no material claim by the Company or any of its Subsidiaries pending under any of such policies or
bonds as to which the Company has been notified that coverage has been questioned, denied or disputed by the underwriters of such policies or bonds. All premiums due and payable under all such policies and bonds have been paid when due, and the
Company and its Subsidiaries are otherwise in material compliance with the terms of such policies and bonds (or other policies and bonds providing substantially similar insurance coverage). To the Knowledge of the Company, there is no threatened
termination of, or material premium increase (other than with respect to customary annual premium increases) with respect to, any Insurance Policy.
Section 4.18
of the Company Disclosure Schedule identifies each material insurance claim
made by the Company or any of its Subsidiaries between the Company Balance Sheet Date and the date of this Agreement. To the Knowledge of the Company, no event has occurred, and no condition or circumstance exists, that would reasonably be expected
to give rise to or serve as a basis for any material insurance claim not listed on
Section 4.18
of the Company Disclosure Schedule.
Section 4.19.
Environmental Matters.
(a) No notice, demand, request
for information, citation, summons or order has been received, no complaint has been filed, no penalty has been assessed, and no Proceeding is pending and, to the Knowledge of the Company, none of the foregoing is threatened by any Governmental
Authority or other Person relating to or arising out of any failure of the Company or any of its Subsidiaries to comply with any Environmental Law.
(b) The Company and its Subsidiaries are and have been in compliance with all Environmental Laws and all Environmental Permits of the Company.
(c) There has been no release by the Company or any of its Subsidiaries, or to the Knowledge of the Company, by any other Person, for
which the Company or any of its Subsidiaries would reasonably be expected to be liable by Contract or by operation of Applicable Law, of any Hazardous Substance at, under, from or to any facility or real property currently or formerly owned, leased
or operated by the Company or any of its Subsidiaries.
(d) There are no liabilities or obligations of the Company or any of
its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise arising under or relating to any Environmental Law or any Hazardous Substance and, to the Knowledge of the Company, there is no
condition, situation or set of circumstances that would reasonably be expected to result in or be the basis for any such liability or obligation.
(e) Neither the Company nor any of its Subsidiaries owns, leases or operates or has owned, leased or operated any real property, or conducts or has conducted any operations, in New Jersey or Connecticut.
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(f) For purposes of this
Section 4.19
, the terms “
Company
” and
“
Subsidiaries
” shall include any entity that is, in whole or in part, a predecessor of the Company or any of its Subsidiaries.
Section 4.20.
Intellectual Property and Information Technology.
(a)
Section 4.20(a)
of the Company Disclosure Schedule contains a true and complete list, as of the date of this Agreement, of all Company Products.
(b) The Company and its Subsidiaries own or otherwise hold all rights in all Company IP necessary for the conduct of the business of the Company and its Subsidiaries as currently conducted or as currently
proposed to be conducted (the “
Necessary IP
”), free and clear of any Liens. The consummation of the transactions contemplated by this Agreement will not (i) alter, restrict, encumber, impair or extinguish any rights in any
Necessary IP, or (ii) result in the creation of any Lien with respect to any of the Company IP.
(c)
Section 4.20(c)
of the Company Disclosure Schedule lists and describes the status of each Proceeding or, to the Knowledge of the Company, threatened Proceeding (i) alleging infringement, misappropriation or any other violation of
any Intellectual Property rights of any Person by the Company or any of its Subsidiaries or by any Company Products, or (ii) challenging the scope, ownership, validity, or enforceability of any Company IP owned by the Company or any of its
Subsidiaries or of the Company and its Subsidiaries’ rights under the Necessary IP, regardless of whether such Proceeding or threatened Proceeding has been settled, withdrawn or otherwise resolved. Neither the Company nor any of its
Subsidiaries has infringed, misappropriated or otherwise violated any Intellectual Property rights of any Person or, except in connection with the Proceedings set forth on
Section 4.20(c)
of the Company Disclosure Schedule, received any
notice of alleged infringement or potential infringement of any such rights.
(d) (i) No Person, other than the Company and
its Subsidiaries, possesses any current or contingent rights to license, sell or otherwise distribute the Company Products or other products or services utilizing Company IP that is owned by the Company or any of its Subsidiaries, and
(ii) there are no restrictions binding on the Company or any Subsidiary respecting the disclosure, use, license, transfer or other disposition of any Company IP owned by the Company or any of its Subsidiaries.
(e)
Section 4.20(e)(i)
of the Company Disclosure Schedule contains a true and complete list, as of the date of this
Agreement, of all Company Registered IP. The Company and its Subsidiaries have taken all actions reasonably necessary to maintain and protect all Company Registered IP, including payment of applicable maintenance fees, filing of applicable
statements of use, timely response to office actions and disclosure of any required information, and recording all assignments (and licenses where required) of the Registered IP with the appropriate Governmental Authorities.
Section 4.20(e)(ii)
of the Company Disclosure Schedule includes a true and complete list as of the date of this Agreement of all material actions that must be taken within one hundred eighty (180) days of the date hereof with
respect to any of the Company Registered IP. The Company and each of its Subsidiaries have complied in all material respects with all applicable notice and marking requirements for the Company Registered IP. None of the Company Registered IP has
been adjudged invalid or unenforceable in whole or part and, to the Knowledge of the Company, none of the Company Registered IP is invalid or unenforceable.
(f) The Company and its Subsidiaries have taken reasonable steps to protect their rights in the Company IP and to protect any confidential information provided to them by any other Person under obligation
of confidentiality. Without limitation of the foregoing, the Company and its Subsidiaries have not made any of their material trade secrets or other material confidential or proprietary information that they intended to maintain as confidential
(including source code with respect to Company Products) available to any other Person except pursuant to written agreements requiring such Person to maintain the confidentiality of such information or materials.
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(g) The Company and its Subsidiaries have obtained from all parties (including employees and
current or former consultants and subcontractors) who have created any portion of, or otherwise who would have any rights in or to, any Company IP, valid and enforceable written assignments of any such work, invention, improvement or other rights to
the Company and its Subsidiaries and have delivered true and complete copies of the Company’s and its Subsidiaries’ standard forms of such assignments to Parent. No employee, consultant or former consultant of the Company or any of its
Subsidiaries has ever excluded any Intellectual Property created as a result of work performed for or on behalf of the Company or any of its Subsidiaries from any written assignment executed by any such Person. All amounts payable by the Company or
any of its Subsidiaries to consultants and former consultants have been paid in full, other than current accounts payable that are not delinquent.
(h)
Section 4.20(h)
of the Company Disclosure Schedule contains a complete and accurate list of (i) all third-party Intellectual Property (other than Third Party Software) sold with,
incorporated into, distributed in connection with or used in the development of any Company Product (including any Company Product currently under development) and (ii) all other third-party Intellectual Property (other than Third Party
Software) used or held for use for any purpose by the Company or any of its Subsidiaries that is material to the business of the Company and its Subsidiaries taken as a whole.
(i)
Section 4.20(i)
of the Company Disclosure Schedule contains a complete and accurate list of all Third Party Software, setting forth for each such item (i) the name and version of such
item, (ii) the name of the owner and/or licensor of such item, (iii) all licenses and other agreements pursuant to which the Company or any of its Subsidiaries holds rights to such item, (iv) the Company Product(s), including version
numbers, to which such item relates, if any, (v) whether such item is used internally by or on behalf of the Company or any of its Subsidiaries, (vi) whether such item is distributed by or on behalf of the Company or any of its
Subsidiaries (whether on a standalone basis or as an embedded or bundled component) and, if so, whether such item is distributed in source, binary or other form, (vii) whether such item is hosted, offered as a service or made available in a
service bureau or in any similar manner by or on behalf of the Company or any of its Subsidiaries (whether on a standalone basis or as an embedded or bundled component), (viii) whether the Company or any Subsidiary permits any Third Party to
host, offer as a service or make available in a service bureau or in any similar manner such item (whether on a standalone basis or as an embedded or bundled component), (ix) whether such item has been modified by or on behalf of the Company or
any of its Subsidiaries, (x) whether such item is used by or on behalf of the Company or any of its Subsidiaries to generate code or other material, and if so, a description (consistent with the disclosure requirements under clauses
(v) through (ix)) of the use, modification, hosting and/or distribution of such generated code or other material, (xi) a summary of the Company’s and its Subsidiaries’ payment history in respect of such item during the four
(4) consecutive fiscal quarters ended September 30, 2012, (xii) whether such item is used or required (or generates code or other material that is used or required) to satisfy any obligation under any support agreement or maintenance
agreement, and (xiii) solely with respect to any such item in respect of which the Company or any Subsidiary made aggregate payments in excess of $25,000 during the four (4) fiscal quarters ended September 30, 2012, any rights by a
Third Party to audit or review any financial, license or royalty information, if any, with respect thereto. For purposes of this
Section 4.20(i)
only, Company Product includes any Company Product under development. Neither the Company
nor any of its Subsidiaries has been subjected to an audit of any kind in connection with any license or other agreement pursuant to which the Company or any of its Subsidiaries hold rights to any Third Party Software, nor received any written
notice of intent to conduct any such audit. Neither the Company nor any Subsidiary has incorporated into any Company Product or otherwise accessed, used, modified or distributed any Third Party Software, in whole or in part, in a manner that may
(A) require any Company IP to be licensed, sold, disclosed, distributed, hosted or otherwise made available, including in source code form and/or for the purpose of making derivative works, for any reason, (B) grant, or require the Company
or any of its Subsidiaries to grant,
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the right to decompile, disassemble, reverse engineer or otherwise derive the source code or underlying structure of any Company IP or (C) limit in any manner the ability to charge license
fees or otherwise seek compensation in connection with marketing, licensing or distribution of any Company IP and neither the Company nor any of its Subsidiaries has any plans to do any of the foregoing. All information set forth in
Section 4.20(i)
of the Company Disclosure Schedule is true and complete.
(j) The Company Products as delivered by
the Company and its Subsidiaries do not contain any computer code designed to disrupt, disable, harm, distort or otherwise impede in any manner the legitimate operation of such Company Products by or for the Company or any of its Subsidiaries or its
respective authorized users, or any other associated Software, firmware, hardware, computer system or network (including what are sometimes referred to as “viruses,” “worms,” “time bombs” and/or “back doors”).
(k) Neither the Company nor any of its Subsidiaries has (i) transferred ownership of, or granted any exclusive license
with respect to, any Company IP owned or purported to be owned by the Company or any of its Subsidiaries to any other Person, (ii) granted any end customer the right to use any Company Product or portion thereof on anything other than a
non-exclusive basis or for anything other than such customer’s internal business purposes, or (iii) granted any Third Party the right to access or use any source code other than upon the occurrence of specified release events pursuant to a
written source code escrow agreement, and no such release event has ever occurred or been claimed to have occurred.
(l) None
of the Company’s or any of its Subsidiaries’ agreements (including any agreement for the performance of professional services by or on the behalf of the Company or any of its Subsidiaries) confers upon any Person other than the Company or
any of its Subsidiaries any ownership right, exclusive license or other exclusive right with respect to any Intellectual Property developed or delivered by or on behalf of the Company or any of its Subsidiaries in connection with such agreement.
(m) No funding, facilities or personnel of any educational institution or Governmental Authority were used, directly or
indirectly, to develop or create, in whole or in part, any Company IP owned or purported to be owned by the Company or any of its Subsidiaries, including any portion of a Company Product. Neither the Company nor any of its Subsidiaries is or has
ever been a member or promoter of, or a contributor to, any industry standards body or similar organization that could compel the Company or such Subsidiary to grant or offer to any Third Party any license or right to such Company IP.
Section 4.20(m)
of the Company Disclosure Schedule sets forth a complete and accurate list of (i) any and all grants and similar funding received by the Company or any of its Subsidiaries (including their respective predecessors),
including the name of the granting authority and the status and material terms thereof and (ii) any standards bodies or similar organizations of which the Company or any of its Subsidiaries (or any of their predecessors) has ever been a member,
promoter or contributor.
(n) The IT Assets operate and perform in all material respects in a manner that permits the Company
and each of its Subsidiaries to conduct their respective businesses as currently conducted and, to the Knowledge of the Company, no Person has gained unauthorized access to or otherwise interfered with the operation of any IT Asset. In all matters
related to the business of the Company and its Subsidiaries, the Company and each of its Subsidiaries has implemented and followed reasonable security, backup and disaster recovery processes consistent with applicable industry standard practices.
(o) The Company and the Subsidiaries are in compliance with, and have complied in all material respects with, all Applicable
Laws concerning data protection and privacy (“
Data and Privacy Laws
”) and with their respective internal policies and practices relating to the use, collection, storage, disclosure and transfer of any data collected from or with
respect to any other Person. The transactions contemplated by this Agreement will not result in the Company or any of the Subsidiaries being in breach of or unable fully to comply with any Data and Privacy Laws. The Company and the Subsidiaries are
and have at all times been in material compliance with and have not breached, violated or defaulted under, or received written notice that they have breached, violated or defaulted under, any of the terms of use or service of any other Person’s
website. The Company’s and each of the Subsidiaries’ access to any other Person’s website and use of data, content or other assets from any other Person’s website have at all times been in compliance with Applicable Law.
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Section 4.21.
Properties.
(a) (i) The Company and each of its Subsidiaries has good and marketable title to, or in the case of leased property and leased tangible
assets, valid leasehold interests in, all of its material real properties and material tangible assets and (ii) all such assets and real properties, other than assets and real properties in which the Company or any of its Subsidiaries has
leasehold interests, are free and clear of all Liens, except for Permitted Liens.
(b)
Section 4.21(b)
of the
Company Disclosure Schedule sets forth a complete and correct list of all real property and interests in real property, if any, currently owned by the Company or any of its Subsidiaries (each, an “
Owned Real Property
”).
Section 4.21(b)
of the Company Disclosure Schedule sets forth (i) a true and complete list of all real property leased, subleased or otherwise occupied by the Company or any of its Subsidiaries in respect of which the Company or any
of its Subsidiaries has annual rental obligations of $50,000 or more (each, a “
Leased Real Property
”), (ii) the address for each Leased Real Property, (iii) current rent amounts payable by the Company or its Subsidiaries
related to such Leased Real Property and (iv) a description of the applicable lease, sublease or other agreement therefore and any and all amendments, modifications, side letters relating thereto. All of the leases, subleases and other
agreements (each, a “
Lease Agreement
”) of the Leased Real Property are valid, binding and in full force and effect without penalty, acceleration, termination, repurchase right or other adverse consequence on account of the
execution, delivery or performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby. No interest of the Company or any Subsidiary in a Lease Agreement is subject to any Lien, other than
Permitted Liens, including any mortgage, pledge, lien, encumbrance, sublease, assignment, license or other agreement granting to any Third Party any interest in such Lease Agreement or any right to the use or occupancy of any Leased Real Property.
The Company and each of its Subsidiaries has performed all material obligations required to be performed by it to date under each Lease Agreement, and there are no outstanding defaults or circumstances which, upon the giving of notice or passage of
time or both, would constitute a default or breach by the Company or any Subsidiary or, to the Knowledge of the Company, the other party thereto, under any Lease Agreement.
(c) With respect to each Leased Real Property, neither the Company nor any of its Subsidiaries has subleased, licensed or otherwise granted anyone a right to use or occupy such Leased Real Property or any
portion thereof. The Company and each of its Subsidiaries enjoy peaceful and undisturbed possession of the Owned Real Property and the Leased Real Property.
Section 4.22.
Inventory
. Neither the Company nor any of its Subsidiaries owns any inventory or is in possession of any inventory not owned by the Company or one of its Subsidiaries.
Section 4.23.
Interested Party Transactions
. (i) Neither the Company nor any of its Subsidiaries is a party
to any transaction or agreement with any Affiliate, stockholder that beneficially owns 5% or more of the Company Common Stock, or director or Executive Officer of the Company or, to the Knowledge of the Company, any Affiliate of any such owner,
Executive Officer or director, and (ii) no event has occurred since August 24, 2011 that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC.
Section 4.24.
Compliance with the U.S. Foreign Corrupt Practices Act and Other Applicable Anti-Corruption Laws.
(a) The Company and its Subsidiaries have complied with the U.S. Foreign Corrupt Practices Act of 1977 and other applicable
anti-corruption laws.
(b) Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee or other
Representative of the Company or any of its Subsidiaries at the direction of or on behalf of the Company or any of its Subsidiaries illegally offered or gave anything of value to: (i) any official, employee or representative of a Governmental
Authority, any political party or official thereof, or any candidate for political office; or (ii) any
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other Person, in any such case while knowing, or having reason to know, that all or a portion of such money or thing of value may be offered, given or promised, directly or indirectly, to any
official, employee or representative of a Governmental Authority, any political party or official thereof, or candidate for political office for the purpose of the following: (x) influencing any action or decision of such Person, in his or her
official capacity, including a decision to fail to perform his or her official function; (y) inducing such Person to use his or her influence with any Governmental Authority to affect or influence any act or decision of such Governmental
Authority to assist in obtaining or retaining business or to secure an improper business advantage; or (z) where such payment would constitute a bribe, kickback or illegal or improper payment to assist the Company or any of its Subsidiaries in
obtaining or retaining business for, or with, or directing business to, any Person or in securing any improper advantage.
(c)
There have been no false or fictitious entries made in the books or records of the Company or any of its Subsidiaries relating to any illegal payment or secret or unrecorded fund, and neither the Company nor any of its Subsidiaries has established
or maintained a secret or unrecorded fund.
Section 4.25.
Customers, Suppliers.
(a) Between the Company Balance Sheet Date and the date of this Agreement, there has not been (i) any material adverse change in the
business relationship of the Company or its Subsidiaries with any Major Customer, or (ii) any change in any material term (including credit terms) of the sales agreements or related arrangements with any Major Customer. During the three
(3) years preceding the date hereof, neither the Company nor any of its Subsidiaries has received any written customer complaint concerning its products and services, nor has it had any such products returned by a purchaser thereof, other than
complaints seeking repair or replacement made in the ordinary course of business that, individually or in the aggregate, would not reasonably be expected to have a Company Material Adverse Effect.
(b) Between the Company Balance Sheet Date and the date of this Agreement, there has not been (i) any material adverse change in the
business relationship of the Company or its Subsidiaries with any Major Supplier, or (ii) any material change in any material term (including credit terms) of the supply agreements or related arrangements with any Major Supplier.
Section 4.26.
Finders’ Fees.
(a) Except for Morgan Stanley & Co. LLC, a copy of whose engagement agreement (and all indemnification and other agreements related to such engagement) has been made available to Parent, there is
no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries, Affiliates, or any of their respective officers or directors in their capacity as
officers or directors, who might be entitled to any banking, broker’s, finder’s or similar fee or commission in connection with the Merger and the other transactions contemplated by this Agreement.
(b) The Company does not anticipate that the fees and expenses of its accountants, brokers, financial advisors, consultants, legal
counsel and other Persons retained by the Company or any of its Subsidiaries, Affiliates, or any of their respective officers or directors in their capacity as officers or directors, incurred or to be incurred in connection with this Agreement and
the transactions contemplated by this Agreement will exceed the aggregate fees and expenses set forth in
Section 4.26(b)
of the Company Disclosure Schedule.
Section 4.27.
Opinion of Financial Advisor
. The Company Board has received from the Company’s financial advisor, Morgan Stanley & Co. LLC, an opinion, to the effect that, as of
the date of such opinion and based upon and subject to the various assumptions, procedures, factors, qualifications and limitations set forth therein, the Merger Consideration to be received by the holders of shares of Company Common Stock (other
than Parent, Merger Subsidiary, the Company and their respective direct or indirect wholly-owned subsidiaries or
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holders of Dissenting Shares as to which dissenters’ rights have been perfected) pursuant to this Agreement is fair, from a financial point of view, to such holders. A signed copy of such
opinion has been delivered to Parent as of the date hereof for information purposes only.
Section 4.28.
Antitakeover
Statute; No Rights Plan.
(a) The Company and the Company Board has taken all action necessary to exempt the Merger, this
Agreement, the Voting Agreements and the other transactions contemplated hereby or thereby from the restrictions on business combinations and voting requirements contained in Section 203 of Delaware Law. No other “control share
acquisition,” “fair price,” “moratorium” or other antitakeover Applicable Law applies to the Merger, this Agreement, the Voting Agreements or any of the other transactions contemplated hereby or thereby.
(b) The Company has no rights plan, “poison-pill” or other comparable agreement or arrangement designed to have the effect of
delaying, deferring or discouraging any Person from acquiring control of the Company.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
Section 5.01.
Corporate Existence and Power
. Parent is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware. Each of Parent and Merger Subsidiary has all limited liability company or corporate, as the case may be, powers required to carry on its business as now conducted. Since the date of its
incorporation, Merger Subsidiary has not engaged in any activities other than in connection with or as contemplated by this Agreement.
Section 5.02.
Corporate Authorization
. Each of Parent, Ultimate Parent and Merger Subsidiary has all requisite limited liability company or corporate, as the case may be, power and authority
to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by Parent, Ultimate Parent and Merger Subsidiary of this Agreement and the consummation by Parent, Ultimate Parent and Merger Subsidiary
of the transactions contemplated hereby have been duly authorized by all necessary limited liability company or corporate, as the case may be, action on the part of Parent, Ultimate Parent and Merger Subsidiary. This Agreement constitutes a valid
and binding agreement of each of Parent, Ultimate Parent and Merger Subsidiary, enforceable against each such Person in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and other similar
Applicable Law affecting creditors’ rights generally and by general principles of equity.
Section 5.03.
Governmental Authorization
. The execution, delivery and performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated hereby require no action by or in
respect of, or filing with, any Governmental Authority, other than (i) the filing of the Certificate of Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which Parent is
qualified to do business, (ii) compliance with any applicable requirements of (A) the HSR Act and (B) the Foreign Competition Laws, (iii) compliance with any applicable requirements of the Securities Act, the Exchange Act and any
other U.S. state or federal securities laws, and (iv) any actions or filings the absence of which would not reasonably be expected to prevent, materially delay or materially impair Parent’s ability to consummate the Merger and the other
transactions contemplated by this Agreement.
Section 5.04.
Non-contravention
. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the consummation by Parent and Merger Subsidiary of the transactions contemplated
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hereby do not and will not (with or without notice or lapse of time, or both) (i) contravene, conflict with, or result in any violation or breach of any provision of the organizational
documents of Parent or the certificate of incorporation and bylaws of Merger Subsidiary, (ii) assuming compliance with the matters referred to in
Section 5.03
, contravene, conflict with or result in a violation or breach of any
provision of any Applicable Law or Order, or (iii) require any consent or approval under, violate, conflict with, result in any breach of or any loss of any benefit under, or constitute a change of control or default under, or result in
termination or give to others any right of termination, vesting, amendment, acceleration or cancellation of any Contract to which Parent, Merger Subsidiary or any other Subsidiary of Parent is a party, or by which they or any of their respective
properties or assets may be bound or affected, with such exceptions, in the case of each of clauses (ii) and (iii) above, as would not reasonably be expected to prevent, materially delay or materially impair the ability of Parent and
Merger Subsidiary to consummate the transactions contemplated by this Agreement.
Section 5.05.
Disclosure
Documents
. None of the information provided by Parent specifically for inclusion in the Proxy Statement or any amendment or supplement thereto, at the time the Proxy Statement or any amendment or supplement thereto is first mailed to
stockholders of the Company and at the time of the Stockholder Meeting, will 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.
Section 5.06.
Financing
. At the Closing, Parent shall have sufficient
cash, available lines of credit or other sources of immediately available funds to enable Parent to pay the aggregate Merger Consideration and to perform its obligations with respect to the transactions contemplated by this Agreement.
ARTICLE 6
COVENANTS
Section 6.01.
Conduct of the Company
. Except for matters expressly permitted or contemplated by this Agreement or as set
forth in
Section 6.01
of the Company Disclosure Schedule, except as required by Applicable Law or except with the prior written consent of Parent, from the date of this Agreement until the Effective Time, the Company shall, and shall
cause each of its Subsidiaries to, conduct its business in the ordinary course, consistent with past practice, and use its commercially reasonable efforts to (i) preserve intact its Intellectual Property, business organization and material
assets, (ii) keep available the services of its directors, officers and employees, (iii) maintain in effect all of its Governmental Authorizations and (iv) maintain satisfactory relationships with customers, lenders, suppliers,
licensors, licensees, distributors and others having business relationships with the Company. Without limiting the generality of the foregoing, except for matters expressly permitted or contemplated by this Agreement, as set forth in
Section 6.01
of the Company Disclosure Schedule, or as required by Applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, do any of the following without the prior written consent of Parent:
(a) amend the Company’s or any of its Subsidiaries’ certificate of incorporation, bylaws or other comparable charter or
organizational documents (whether by merger, consolidation or otherwise);
(b) (i) declare, set aside or pay any
dividends on, or make any other distributions (whether in cash, stock, property or otherwise) in respect of, or enter into any agreement with respect to the voting of, any capital stock of the Company or any of its Subsidiaries, other than dividends
and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent (except distributions under the ESPP in the ordinary course and for distributions resulting from the vesting or exercise of Company Compensatory Awards),
(ii) split, combine or reclassify any capital stock of the Company or any of its Subsidiaries, (iii) except as otherwise provided in
Section 6.01(c)
below, issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for, shares of capital stock of the Company or any of its Subsidiaries, (iv) purchase, redeem or
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otherwise acquire any Company Securities or Company Subsidiary Securities, except for acquisitions of Company Common Stock by the Company in satisfaction by holders of Company Compensatory Awards
of the applicable exercise price and/or withholding taxes, or (v) take any action that would result in any amendment, modification or change of any term of any Indebtedness of the Company or any of its Subsidiaries; (c) (i) issue, deliver,
sell, grant, pledge, transfer, subject to any Lien or otherwise encumber or dispose of any Company Securities or Company Subsidiary Securities, other than (A) the issuance of shares of Company Common Stock upon the exercise of Company Stock
Options that are outstanding on the date of this Agreement, in each case in accordance with the applicable Company Compensatory Award’s terms as in effect on the date of this Agreement, (B) the issuance of shares of Company Common Stock
pursuant to the ESPP and in accordance with
Section 2.06(d)
, or (C) the issuance of shares of Company Common Stock upon the exercise of the Company Warrant pursuant to the terms thereof, or (ii) amend any term of any Company
Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(d) adopt a plan
or agreement of, or resolutions providing for or authorizing, complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization, each with respect to the Company or any of its Subsidiaries;
(e) make any capital expenditures or incur any obligations or liabilities in respect thereof in excess of $1,000,000 in the
aggregate in any fiscal quarter;
(f) acquire (i) any business, assets or capital stock of any Person or division
thereof, whether in whole or in part (and whether by purchase of stock, purchase of assets, merger, consolidation, or otherwise), or (ii) any other material assets (other than, in each case, assets acquired in the ordinary course of business
consistent with past practice);
(g) sell, lease, license, pledge, transfer, subject to any Lien or otherwise dispose of any
of its Intellectual Property, material assets or material properties except (i) pursuant to existing Contracts or commitments, (ii) sales of used equipment in the ordinary course of business consistent with past practice, or
(iii) Permitted Liens incurred in the ordinary course of business consistent with past practice;
(h) (i) hire or engage
any employees, consultants or contractors, or induce or encourage any employees, consultants or contractors to resign from the Company or any of its Subsidiaries, or promote any employees, or transfer any employees, or change the employment status
or titles or terms of employment of any employees; or (ii) increase the salary or other compensation (of any type or form) payable or to become payable by the Company or any of its Subsidiaries to any of their employees, consultants,
contractors or advisors, or (iii) modify any existing salary, bonus, commission, severance, equity compensation or other equity arrangement or any other compensatory arrangement with any such Person (including under any profit sharing,
management by objectives, incentive, gainsharing, competency or performance plan) or modify or waive any of the terms or conditions thereof or the performance or other criteria or conditions to payment or earning thereof, or (iv) reprice any
right to acquire Company Securities or Company Subsidiary Securities or amend or accelerate or waive any vesting terms related to any award of, or award with respect to, any Company Securities or Company Subsidiary Securities held by any such
Person, or (v) declare, pay, commit to, approve, or undertake any obligation of any other kind for the payment by the Company or any of its Subsidiaries of a bonus, commission or other additional salary, compensation or employee benefits to any
such Person (including under any profit sharing, management by objectives, incentive, gainsharing, competency or performance plan);
(i) (A) write-down any of its material assets, including any Company IP, or (B) make any change in any method of financial accounting principles, method or practices, in each case except for any such
change required by GAAP or Applicable Law, including Regulation S-X under the Exchange Act (in each case following consultation with the Company’s independent auditor);
(j) (A) repurchase, prepay or incur any Indebtedness, including by way of a guarantee or an issuance or sale of debt securities, or issue or sell options, warrants, calls or other rights to acquire any
debt securities of the
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Company or any of its Subsidiaries, enter into any “keep well” or other Contract to maintain any financial statement or similar condition of another Person or enter into any arrangement
having the economic effect of any of the foregoing (other than (i) in connection with the financing of ordinary course trade payables consistent with past practice or (ii) accounts payable in the ordinary course of business consistent with
past practice), or (B) make any loans, advances or capital contributions to, or investments in, any other Person (other than (i) to the Company or any of its Subsidiaries or (ii) accounts receivable and extensions of credit in the
ordinary course of business, and advances in expenses to employees, in each case in the ordinary course of business consistent with past practice);
(k) agree to any exclusivity, non-competition, most favored nation, or similar provision or covenant restricting the Company, any of its Subsidiaries or any of their respective Affiliates from competing
in any line of business or with any Person or in any area or engaging in any activity or business (including with respect to the development, manufacture, marketing or distribution of their respective products or services), or pursuant to which any
benefit or right would be required to be given or lost as a result of so competing or engaging, or which would have any such effect on Parent or any of its Affiliates after the Effective Time;
(l) enter into any Contract, or relinquish or terminate any Contract or other right, in any individual case with an annual value in
excess of $50,000 or with a value over the life of the Contract in excess of $100,000, other than (i) entering into Software license or subscription agreements, or the renewal of any existing Software license or subscription agreements, where
the Company or any of its Subsidiaries is the licensor in the ordinary course of business consistent with past practice, (ii) entering into service or maintenance contracts in the ordinary course of business consistent with past practice
pursuant to which the Company or any of its Subsidiaries is providing services to customers, (iii) entering into non-exclusive distribution, marketing, reselling or consulting agreements in the ordinary course of business consistent with past
practice that provide for distribution of a Company Product by a Third Party, or (iv) entering into non-exclusive OEM agreements in the ordinary course of business consistent with past practice that are terminable without penalty within twelve
months;
(m) (i) make or change any material Tax election, change any annual Tax accounting period, adopt or change any
material method of Tax accounting, amend any material Tax Returns or file any material claim for Tax refunds, enter into any closing agreement or Tax ruling, enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement
(other than any customary commercial or financing agreements, entered into in the ordinary course of business consistent with past practices), consent to any waiver or extension with respect to any Tax Proceeding, file any material Tax Return (other
than an amendment to a Tax Return) in a manner inconsistent with past practice, settle any material Tax Proceeding, or surrender any right to claim a material Tax refund (including any such refund to the extent it is used to offset or otherwise
reduce Tax liability);
(n) (i) institute, pay, discharge, compromise, settle or satisfy (or agree to do any of the preceding
with respect to) any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), in excess of $100,000 in any individual case, other than (x) as required by their terms as in effect on the
date of this Agreement, (y) claims, liabilities or obligations reserved against on the Company Balance Sheet (for amounts not in excess of such reserves), or (z) claims, liabilities or obligations incurred since the Company Balance Sheet
Date in the ordinary course of business consistent with past practice,
provided
that, in the case of each of (x), (y) or (z), the payment, discharge, settlement or satisfaction of such claim, liability or obligation does not include any
material obligation (other than the payment of money) to be performed by the Company or any of its Subsidiaries following the Closing Date, (ii) waive, relinquish, release, grant, transfer or assign any right with a value of more than $100,000
in any individual case except in the ordinary course of business consistent with past practice, (iii) waive any material benefits of, or agree to modify in any material adverse respect, or fail to enforce, or consent to any matter with respect
to which its consent is required under, any confidentiality, standstill or similar Contract to which the Company or any of its Subsidiaries is a party, or (iv) pay any fees and expenses incurred in connection with the transactions contemplated
by this Agreement, in excess of $100,000 in the aggregate;
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(o) engage in (i) any trade loading practices or any other promotional sales or
discount activity with any customers or distributors with any intent of accelerating to prior fiscal quarters (including the current fiscal quarter) sales to the trade or otherwise that would otherwise be expected (based on past practice) to occur
in subsequent fiscal quarters, (ii) any practice which would have the effect of accelerating to prior fiscal quarters (including the current fiscal quarter) collections of receivables that would otherwise be expected (based on past practice) to
be made in subsequent fiscal quarters, (iii) any practice which would have the effect of postponing to subsequent fiscal quarters payments by the Company or any of its Subsidiaries that would otherwise be expected (based on past practice) to be
made in prior fiscal quarters (including the current fiscal quarter) or (iv) any other promotional sales or discount activity, in each case in clauses (i) through (iv) in a manner outside the ordinary course of business consistent
with past practices; or
(p) authorize, commit or agree to take any of the foregoing actions.
Section 6.02.
Stockholder Meeting; Board Recommendation; Proxy Material.
(a) The Company shall establish a record date (which will be as promptly as reasonably practicable following the date of this Agreement)
for, duly call, give notice of, convene and hold a meeting of its stockholders, which meeting the Company shall cause to occur on the 30th calendar day (or, if such calendar day is not a Business Day, on the first Business Day subsequent to
such calendar day) immediately following the date of mailing of the Proxy Statement (the
“Stockholder Meeting”
), for the purpose of obtaining the Stockholder Approval, regardless of whether the Company Board determines at any time
that this Agreement is no longer advisable or recommends that the stockholders of the Company reject it or any other Adverse Recommendation Change has occurred at any time;
provided
,
however
, that (i) if the Company is unable to
obtain a quorum of its stockholders at such time, the Company may adjourn the Stockholder Meeting for no more than five (5) Business Days if necessary in order to obtain a quorum of its stockholders and the Company shall use its commercially
reasonable efforts during such five (5) Business Day period to obtain such a quorum as promptly as practicable, (ii) the Company may adjourn or postpone the Stockholder Meeting to the extent (and only to the extent) the Company reasonably
determines that such adjournment or postponement is required by Applicable Law and (iii) if the Company receives an Acquisition Proposal, or the price or material terms of a previously received Acquisition Proposal are modified or amended, in
any such case during the five (5) Business Day period immediately prior to the day of the Stockholder Meeting, the Company may delay the Stockholder Meeting until the date that is the seventh Business Day after the date on which the Stockholder
Meeting would otherwise have been originally been held. Unless the Company Board shall have effected an Adverse Recommendation Change in accordance with
Section 6.03
, the Company Board shall make the Board Recommendation and use its
reasonable best efforts to obtain the Stockholder Approval, and the Company shall otherwise comply with all Applicable Laws applicable to the Stockholder Meeting. Without limiting the generality of the foregoing but subject in all cases to
Section 8.01(d)(i)
of this Agreement, the Company agrees that (x) its obligations pursuant to this
Section 6.02
shall not be affected by the commencement, public proposal, public disclosure or communication to the
Company or any other Person of any Acquisition Proposal, and (y) the Company shall establish a record date for, call, give notice of, convene and hold the Stockholder Meeting and the matters constituting the Stockholder Approval shall be
submitted to the Company’s stockholders at the Stockholder Meeting whether or not (A) an Adverse Recommendation Change shall have occurred or (B) any Acquisition Proposal or Superior Proposal shall have been publicly proposed or
announced or otherwise submitted to the Company or any of its Representatives. The Company agrees that it shall not submit to the vote of the stockholders of the Company any Acquisition Proposal (whether or not a Superior Proposal) prior to the vote
of the Company’s stockholders with respect to the Merger at the Stockholder Meeting. The notice of such Stockholder Meeting shall state that a resolution to approve and adopt this Agreement and the Merger will be considered at the Stockholder
Meeting (as well as a proposal to adjourn the meeting to solicit additional proxies, if necessary), and no other matters shall be considered or voted upon at the Stockholder Meeting without Parent’s prior written consent.
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(b) Except to the extent expressly permitted by
Section 6.03(d)
or
(e)
:
(i) the Company Board shall unanimously recommend that the Company’s stockholders vote in favor of the adoption and approval of this Agreement and approval of the Merger (the “
Board Recommendation
”) at the Stockholder
Meeting; (ii) the Proxy Statement shall include the Board Recommendation; and (iii) neither the Company Board nor any committee thereof shall fail to make, withdraw, amend or modify, or publicly propose to withhold, withdraw, amend or
modify, in a manner adverse to Parent or Merger Subsidiary, the Board Recommendation.
(c) As promptly as practicable after
the date hereof, the Company and Parent shall prepare jointly, and the Company shall file with the SEC, the preliminary Proxy Statement (but in no event later than twenty (20) calendar days after the date of this Agreement). Notwithstanding
anything contained in this Agreement to the contrary, (x) if the Company does not receive comments from the SEC with respect to the preliminary Proxy Statement, the Company shall file with the SEC the definitive Proxy Statement, and shall use
its reasonable best efforts to cause the mailing of the definitive Proxy Statement to the stockholders of the Company, on or prior to the third Business Day after the tenth calendar day immediately following the date of filing of the preliminary
Proxy Statement with the SEC, and (y) if the Company does receive comments from the SEC with respect to the preliminary Proxy Statement, the Company shall file with the SEC the definitive Proxy Statement, and shall use its reasonable best
efforts to cause the mailing of the definitive Proxy Statement to the stockholders of the Company, on or prior to the third Business Day immediately following clearance by the SEC with respect to such comments. The Company and Parent, as the case
may be, shall furnish all information concerning the Company or Parent as the other party hereto may reasonably request in connection with the preparation and filing with the SEC of the Proxy Statement. Parent and its counsel shall be given a
reasonable opportunity to review and comment on the Proxy Statement before such document (or any amendment or supplement thereto) is filed with the SEC, and the Company shall include in such document any comments reasonably proposed by Parent and
its counsel. The Company shall (i) as promptly as practicable after receipt thereof, provide Parent and its counsel with copies of any written comments, and advise Parent and its counsel of any oral comments, with respect to the Proxy Statement
(or any amendment or supplement thereto) received from the SEC or its staff, (ii) provide Parent and its counsel a reasonable opportunity to review the Company’s proposed response to such comments, (iii) include in the Company’s
written response to such comments any comments reasonably proposed by Parent and its counsel, (iv) not file or mail such document, or respond to the SEC, prior to receiving the approval of Parent, which approval shall not be unreasonably
withheld or delayed, and (v) provide Parent and its counsel a reasonable opportunity to participate in any discussions or meetings with the SEC. If, at any time prior to the Stockholder Meeting, any information relating to the Company, Parent
or any of their respective Affiliates, officers or directors should be discovered by the Company or Parent which should be set forth in an amendment or supplement to the Proxy Statement, so that the Proxy Statement shall not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party that discovers
such information shall promptly notify the other parties hereto, and an appropriate amendment or supplement describing such information shall be filed with the SEC and, to the extent required by Applicable Law, disseminated to the stockholders of
the Company.
Section 6.03.
No Solicitation.
(a) Neither the Company nor any of its Subsidiaries shall, nor shall the Company or any of its Subsidiaries authorize or permit any of its
or their Representatives to, and the Company shall instruct, and cause each applicable Subsidiary to instruct, each such Representative not to, directly or indirectly, solicit, initiate or knowingly take any action to facilitate or encourage the
submission of any Acquisition Proposal or the making of any inquiry, offer or proposal that would reasonably be expected to lead to any Acquisition Proposal, or, subject to
Section 6.03(b)
, (i) conduct or engage in any discussions
or negotiations with, disclose any non-public
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information relating to the Company or any of its Subsidiaries to, afford access to the business, properties, assets, books or records of the Company or any of its Subsidiaries to or otherwise
cooperate in any way, or knowingly assist, participate in, facilitate or encourage any effort by, any Third Party that is seeking to make, or has made, any Acquisition Proposal, (ii) (A) amend or grant any waiver or release under any
standstill or similar agreement with respect to any class of equity securities of the Company or any of its Subsidiaries or (B) approve any transaction under, or any Third Party becoming an “interested stockholder” under,
Section 203 of Delaware Law, (iii) enter into any agreement in principle, letter of intent, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other Contract relating to
any Acquisition Proposal (other than a confidentiality agreement contemplated by
Section 6.03(b)
) or enter into any agreement or agreement in principle requiring the Company to abandon, terminate or fail to consummate the transactions
contemplated hereby or breach its obligations hereunder, or (iv) resolve, propose or agree to do any of the foregoing. Without limiting the foregoing, it is understood that any violation of the foregoing restrictions by any Subsidiary of the
Company or Representatives of the Company or any of its Subsidiaries shall be deemed to be a breach of this
Section 6.03
by the Company. The Company shall, and shall cause its Subsidiaries and its and their respective Representatives to
cease immediately and cause to be terminated, and shall not authorize or knowingly permit any of its or their Representatives to continue, any and all existing activities, discussions or negotiations, if any, with any Third Party conducted prior to
the date hereof with respect to any Acquisition Proposal and shall use its reasonable best efforts to cause any such Third Party (or its agents or advisors) in possession of non-public information in respect of the Company or any of its Subsidiaries
that was furnished by or on behalf of the Company and its Subsidiaries to return or destroy (and confirm destruction of) all such information.
(b) Notwithstanding the foregoing provisions of
Section 6.03(a)
, prior to the Stockholder Approval, the Company Board, directly or indirectly through any Representative, may (i) engage in
negotiations or discussions with any Third Party that has made (and not withdrawn) a bona fide unsolicited Acquisition Proposal in writing after the date of this Agreement, that did not result from or arise out of a breach of this
Section 6.03
, and that the Company Board believes in good faith, after consultation with its outside legal counsel and financial advisor of nationally recognized reputation, constitutes or would reasonably be expected to lead to a
Superior Proposal, and (ii) thereafter furnish to such Third Party non-public information relating to the Company or any of its Subsidiaries pursuant to an executed confidentiality agreement containing terms no less favorable to the Company
than those contained in the Confidentiality Agreement and containing additional provisions that expressly permit the Company to comply with the terms of this
Section 6.03
(a copy of which confidentiality agreement shall be promptly and
in any event with 24 hours provided for informational purposes only to Parent), but in each case under the preceding clauses (i) and (ii), only if the Company Board determines in good faith, after consultation with outside legal counsel to the
Company Board, that the failure to take such action would be a breach of its fiduciary duties to the stockholders of the Company under Applicable Law.
(c) The Company Board shall not take any of the actions referred to in clauses (i) or (ii) of
Section 6.03(b)
unless the Company shall have notified Parent in writing at least twenty
four (24) hours before taking such action that it intends to take such action. The Company shall notify Parent promptly (but in no event later than 24 hours) after it obtains knowledge of the receipt by the Company (or any of its
Representatives) of any Acquisition Proposal, any inquiry, offer or proposal that would reasonably be expected to lead to an Acquisition Proposal, or any request for non-public information relating to the Company or any of its Subsidiaries or for
access to the business, properties, assets, books or records of the Company or any of its Subsidiaries by any Third Party, in each case in connection with any Acquisition Proposal or inquiry, offer or proposal that would reasonably be expected to
lead to an Acquisition Proposal. In such notice, the Company shall identify the Third Party making, and the material terms and conditions of, any such Acquisition Proposal, indication, offer, proposal or request. Commencing upon the provision of any
notice referred to above, the Company shall (A) on a reasonable and prompt basis at a mutually agreeable time, advise Parent (or its counsel) of the status and material terms (including material amendments or proposed amendments as to price and
other material terms) of any such Acquisition Proposal, request or inquiry and (B) promptly upon receipt or delivery thereof, provide Parent (or its outside counsel) with copies of all material documents and material written or electronic
communications relating to any such Acquisition Proposal (including the financing thereof), request or inquiry exchanged between
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the Company, its Subsidiaries or any of their respective officers, directors, employees or Representatives, on the one hand, and the Person making an Acquisition Proposal or any of its
Affiliates, or their respective officers, directors, employees, or Representatives, on the other hand. The Company shall promptly provide Parent with any non-public information concerning the business, present or future performance, financial
condition or results of operations of the Company (or any of its Subsidiaries), provided to any Third Party that was not previously provided to Parent. The Company shall provide Parent with at least 48 hours’ prior notice (or such lesser period
of prior notice provided to the members of the Company Board) of any meeting of the Company Board at which the Company Board is reasonably expected to consider any Acquisition Proposal.
(d) Neither the Company Board nor any committee thereof shall (i) fail to make, withdraw, amend or modify, or publicly propose to
withhold, withdraw, amend or modify, in a manner adverse to Parent or Merger Subsidiary, the Board Recommendation, (ii) approve, endorse, adopt or recommend, or publicly propose to approve, endorse, adopt or recommend, any Acquisition Proposal
or Superior Proposal, (iii) fail to recommend against acceptance of any tender offer or exchange offer for the Company Common Stock within ten (10) Business Days after the commencement of such offer, (iv) make any public statement
inconsistent with the Board Recommendation or (v) resolve or agree to take any of the foregoing actions (any of the foregoing, an “
Adverse Recommendation Change
”). Notwithstanding anything to the contrary contained in this
Agreement, at any time prior to the Stockholder Approval, the Company Board, following receipt of and on account of a Superior Proposal, may (i) make an Adverse Recommendation Change, or (ii) terminate this Agreement to enter into a
definitive agreement with respect to such Superior Proposal in accordance with the terms of
Section 8.01(d)(i)
, but only if, in either case, the Company Board determines in good faith, after consultation with outside legal counsel to the
Company Board, that the failure to take such action would be a breach of its fiduciary duties under Applicable Law;
provided, however
, that the Company Board shall not make an Adverse Recommendation Change or terminate this Agreement in
accordance with
Section 8.01(d)(i)
, unless (A) the Company promptly notifies Parent (the “
Adverse Recommendation Change Notice
”), in writing at least five (5) Business Days before making an Adverse
Recommendation Change or terminating this Agreement (the “
Notice Period
”), of its intention to take such action or actions with respect to a Superior Proposal, (B) the Company attaches to such notice the most current version of
the proposed agreement or a reasonably detailed summary of all material terms of any such Superior Proposal (which version or summary shall be updated on a prompt basis) and the identity of the Third Party making the Superior Proposal, (C) the
Company shall, and shall cause its financial and legal advisors to, during the Notice Period, negotiate with Parent in good faith to make such adjustments in the terms and conditions of this Agreement so that such Acquisition Proposal ceases to
constitute a Superior Proposal, if Parent, in its discretion, proposes to make such adjustments (it being understood and agreed (x) that in the event that, after commencement of the Notice Period, there is any material revision to the terms of
a Superior Proposal, including, any revision in price, the Notice Period shall be extended, if applicable, to ensure that at least three (3) Business Days remains in the Notice Period subsequent to the time the Company notifies Parent of any
such material revision and (y) that there may be multiple extensions of the Notice Period); and (D) Parent does not make, within the Notice Period, an offer that is determined by the Company Board in good faith, after consulting with its
outside counsel and financial advisor of nationally recognized reputation, to be at least as favorable to the stockholders of the Company as such Superior Proposal.
(e) Notwithstanding anything to the contrary contained in this Agreement, the Company Board may, in response to a material fact, event, change, development or set of circumstances (other than an
Acquisition Proposal occurring or arising after the date of this Agreement) that was not known to the Company Board nor reasonably foreseeable by the Company Board as of or prior to the date of this Agreement (and not relating in any way to any
Acquisition Proposal) (such material fact, event, change, development or set of circumstances, an “
Intervening Event
”), fail to make, withdraw or modify, in a manner adverse to Parent or Merger Subsidiary, the Board Recommendation
(which shall be deemed to be an “Adverse Recommendation Change”) if the Company Board determines in good faith, after consultation with outside legal counsel to the Company Board, that, in light of such Intervening Event, the failure of
the Company Board to effect such an Adverse Recommendation Change would be a breach of its fiduciary duties under Applicable Law;
provided
that no fact, event, change, development or set of circumstances shall constitute an Intervening Event
if such fact, event,
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change, development or set of circumstances resulted from or arose out of the announcement, pendency or consummation of the Merger; and
provided
,
further
, that the Company Board
shall not be entitled to exercise its right to make an Adverse Recommendation Change pursuant to this clause (e) unless the Company Board has (A) provided to Parent at least four (4) Business Days’ prior written notice advising
Parent that the Company Board intends to take such action and specifying the facts underlying the Company Board’s determination that an Intervening Event has occurred, and the reasons for the Adverse Recommendation Change, in reasonable detail,
and (B) during such four (4) Business Day period, if requested by Parent, engaged in good faith negotiations with Parent to amend this Agreement in such a manner that obviates the need for an Adverse Recommendation Change as a result of
the Intervening Event.
(f) Nothing contained in this
Section 6.03
shall prevent the Company Board from complying
with Rule 14d-9 and Rule 14e-2(a) under the Exchange Act with regard to an Acquisition Proposal;
provided
that any such disclosure (other than a “stop, look and listen” communication or similar communication of the type contemplated
by Section 14d-9(f) under the Exchange Act) shall be deemed to be an Adverse Recommendation Change unless the Company Board expressly publicly reaffirms its Board Recommendation (x) in such communication or (y) within two
(2) Business Days after requested to do so by Parent.
Section 6.04.
Access to Information.
From the date
hereof until the Effective Time, the Company shall (i) give to Parent and its Representatives reasonable access to the offices, properties, books, records, Contracts, Governmental Authorizations, documents, directors, officers and employees of
the Company and its Subsidiaries during normal business hours, (ii) furnish to Parent and its Representatives such financial, Tax and operating data and other information as such Persons may reasonably request (including the work papers of
PricewaterhouseCoopers LLP upon receipt of any required consent from PricewaterhouseCoopers LLP), and (iii) instruct its Representatives to cooperate with Parent and its Representatives in its investigation;
provided
,
however
,
that the Company may restrict the foregoing access to the extent that (A) any Applicable Law requires the Company to restrict or prohibit access to any such properties or information, (B) such disclosure would, based on the advice of such
party’s counsel, result in a waiver of attorney-client privilege, work product doctrine or any other applicable privilege applicable to such information, or (C) the disclosure of such information would violate confidentiality obligations
owed to a third party and such confidentiality obligations were in effect prior to the execution and delivery of this Agreement. Any investigation pursuant to this
Section 6.04
shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Company.
Section 6.05.
Notice of Certain Events.
(a) In connection with the continuing operation of the business of the Company and its Subsidiaries between the date of this Agreement and
the Effective Time, subject to Applicable Law, the Executive Officers of the Company, including but not limited to the Chief Executive Officer of the Company, shall consult in good faith on a reasonable and prompt basis with Parent to report
material (individually or in the aggregate) operational developments, the status of relationships with customers, resellers, partners, suppliers, licensors, licensees, distributors and others having material business relationships with the Company,
the status of ongoing operations and other matters reasonably requested by Parent pursuant to procedures reasonably requested by Parent;
provided
that no such consultation shall affect the representations, warranties, covenants, agreements or
obligations of the parties (or remedies with respect thereto) or the conditions to the obligations of the parties under this Agreement.
(b) The Company shall promptly notify Parent of:
(i) any notice
or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by
this Agreement;
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(iii) any Proceeding commenced or, to the Knowledge of the Company,
threatened against, relating to or involving or otherwise affecting the Company or any of its Subsidiaries, as the case may be, that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to
Sections
4.12
,
4.13
,
4.15
or
4.16
, as the case may be, or that relate to the consummation of the transactions contemplated by this Agreement;
(iv) any notice or other communication from any Major Customer or Major Supplier that such Major Customer or Major Supplier is terminating its relationship with Company or any of its Subsidiaries as a
result of the transactions contemplated by this Agreement; and
(v) any inaccuracy of any representation or
warranty or breach of covenant or agreement contained in this Agreement at any time during the term hereof that would reasonably be expected to cause the conditions set forth in
Section 7.02
not to be satisfied.
Section 6.06.
401(k) Plans.
Effective as of the day immediately preceding the Effective Time, unless otherwise directed in
writing by Parent at least ten (10) Business Days prior to the Effective Time, the Company and each Subsidiary thereof shall take all actions necessary to effect the termination of any and all Company Employee Plans intended to qualify as a
qualified cash or deferred arrangement under Section 401(k) of the Code, and effective as of the day immediately preceding the Effective Time, no Company employee shall have any right thereafter to contribute any amounts to any Company Employee
Plan intended to qualify as a qualified cash or deferred arrangement under Section 401(k) of the Code. The Company shall provide Parent with evidence that each such Company Employee Plan has been terminated pursuant to an action by the Company
Board or the board of directors of a Subsidiary, as applicable.
Section 6.07.
State Takeover Laws
. If any
“control share acquisition,” “fair price,” “moratorium” or other anti-takeover Applicable Law becomes or is deemed to be applicable to the Company, Parent, Merger Subsidiary, the Merger, the Voting Agreements or any
other transaction contemplated by this Agreement, then each of the Company, Parent, Merger Subsidiary, and their respective Board of Directors shall grant such approvals and take such actions as are necessary so that the transactions contemplated
hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to render such anti-takeover Applicable Law inapplicable to the foregoing.
Section 6.08.
Obligations of Merger Subsidiary
. Parent shall cause Merger Subsidiary to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth in this Agreement.
Section 6.09.
Voting
of Shares
. Parent shall vote any shares of Company Common Stock beneficially owned by it or any of its Subsidiaries in favor of adoption of this Agreement at the Stockholder Meeting, and will vote or cause to be voted the shares of Merger
Subsidiary held by it or any of its Subsidiaries, as the case may be, in favor of adoption of this Agreement.
Section 6.10.
Director and Officer Liability.
(a) For six (6) years after the Effective Time, Parent shall, or shall cause the Surviving Corporation to, maintain officers’ and directors’ liability insurance in respect of acts or
omissions occurring prior to the Effective Time covering each such person currently covered by the Company’s officers’ and directors’ liability insurance policy on terms with respect to coverage and amount no less favorable than those
of such policy in effect on the date hereof;
provided
that in satisfying its obligation under this
Section 6.10(a)
, neither Parent nor the Surviving Corporation shall be obligated to pay annual premiums in excess of 200% of the
amount per annum the Company paid in its last full fiscal year prior to the date of this Agreement (the “
Current Premium
”), which amount is set forth in
Section 6.10(a)
of the Company Disclosure Schedule, and if such
premiums for such insurance would at any time exceed 200% of the Current Premium, then the Surviving Corporation shall cause to be maintained
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policies of insurance that, in the Surviving Corporation’s judgment, provide the maximum coverage available at an annual premium equal to 200% of the Current Premium. The provisions of the
immediately preceding sentence shall be deemed to have been satisfied if prepaid “tail” or “runoff” policies have been obtained prior to the Effective Time (and which the Company may obtain prior to the Effective Time), which
policies provide such directors and officers with coverage for an aggregate period of six (6) years with respect to claims in respect of acts or omissions that occurred on or before the Effective Time, including, in respect of the transactions
contemplated by this Agreement;
provided, however
, that neither the Company nor any Subsidiary of the Company shall pay more than 225% of the Current Premium for such prepaid policies without the prior written consent of Parent. If such
prepaid policies have been obtained prior to the Effective Time, the Surviving Corporation shall maintain such policies in full force and effect for their full term, and continue to honor the obligations thereunder.
(b) From and after the Effective Time through the sixth anniversary of the Effective Time, the Surviving Corporation will, and Parent
will cause the Surviving Corporation and its Subsidiaries to, fulfill and honor in all respects the obligations of the Company and its Subsidiaries pursuant to: (i) each indemnification agreement set forth on
Section 6.10(b)
of the
Company Disclosure Schedule between the Company or any of its Subsidiaries and any person who is now, or has been at any time prior to the date hereof, or who becomes prior to the Effective Time, a director or officer of the Company or any of its
Subsidiaries (the “
Indemnified Parties
”); and (ii) any indemnification provision and any exculpation provision set forth in the certificate of incorporation or bylaws of the Company as in effect on the date of this Agreement;
provided
that such obligations shall be subject to any limitation imposed from time to time under Applicable Law. If, at any time prior to the sixth anniversary of the Effective Time, any Indemnified Party delivers to the Company, the
Surviving Corporation or Parent, as applicable, a written notice asserting a claim for indemnification under any of the provisions set forth in clause (i) or (ii) above, then the claim asserted in such notice shall survive the sixth
anniversary of the Effective Time until such claim is fully and finally resolved.
(c) If Parent, the Surviving Corporation or
any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all
of its properties and assets to any Person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the
obligations set forth in this
Section 6.10
.
(d) The obligations under this
Section 6.10
shall not be
terminated or modified in such a manner as to adversely affect any Indemnified Party without the written consent of such Indemnified Party (it being expressly agreed that the Indemnified Parties shall be third-party beneficiaries of this
Section 6.10
and shall be entitled to enforce the covenants contained herein).
Section 6.11.
Reasonable
Best Efforts.
(a) Subject to the terms and conditions of this Agreement, the Company and Parent shall use their reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under Applicable Law, Contracts and otherwise to
consummate the transactions contemplated by this Agreement, including (i) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Authorities and the making of all necessary registrations and
filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or other Proceeding by, any Governmental Authorities,
(ii) the delivery of required notices to, and the obtaining of required consents or waivers from, Third Parties and (iii) the execution and delivery of any additional instruments necessary to consummate the Merger and to fully carry out
the purposes of this Agreement. In furtherance and not in limitation of the undertakings pursuant to the immediately preceding
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sentence, promptly following the execution of this Agreement, the Company shall provide Silicon Valley Bank with all notices required under the Company Warrant and shall otherwise take any
actions required to ensure that the Company Warrant shall terminate as of the Closing if not exercised prior thereto.
(b) In
furtherance and not in limitation of the undertakings pursuant to this
Section 6.11
, each of Parent and the Company shall (i) provide or cause to be provided as promptly as practicable to Governmental Authorities with regulatory
jurisdiction over enforcement of any Antitrust Laws (each such Governmental Authority, a “
Governmental Antitrust Authority
”) information and documents requested by any Governmental Antitrust Authority or necessary, proper or
advisable to permit consummation of the transactions contemplated by this Agreement, including preparing and filing any notification and report form and related material required under the HSR Act and any additional consents and filings under any
Antitrust Laws as promptly as practicable following the date of this Agreement (but in no event more than fifteen (15) Business Days from the date hereof except by mutual consent confirmed in writing) and thereafter to respond as promptly as
practicable to any request for additional information or documentary material that may be made under the HSR Act and any additional consents and filings under any Antitrust Laws; and (ii) use their reasonable best efforts to take such actions
as are necessary or advisable to obtain prompt approval of consummation of the transactions contemplated by this Agreement by any Governmental Authority.
(c) Notwithstanding anything to the contrary herein, in connection with the receipt of any necessary governmental approvals or clearances (including under any Antitrust Law), nothing in this Agreement
shall require Parent or any of its Affiliates to, nor shall the Company or any of its Affiliates without the prior written consent of Parent agree or proffer to, divest, hold separate, or enter into any license or similar agreement with respect to,
or agree to restrict the ownership or operation of, or agree to conduct or operate in a specified manner, any portion of the business or assets of Parent, the Company or any of their respective Affiliates. Notwithstanding anything to the contrary
herein, in no event shall Parent or any of its Affiliates be obligated to litigate or participate in the litigation of any Proceeding, whether judicial or administrative, brought by any Governmental Authority or appeal any Order (i) challenging
or seeking to make illegal, delay materially or otherwise directly or indirectly restrain or prohibit the consummation of the Merger or the other transactions contemplated by this Agreement or seeking to obtain from Parent or any of its Affiliates
any damages in connection therewith, or (ii) seeking to prohibit or limit in any respect, or place any conditions on, the ownership or operation by the Company, Parent or any of their respective Affiliates of all or any portion of the business,
assets or any product of the Company or any of its Affiliates or Parent or any of its Affiliates or to require any such Person to dispose of, license (whether pursuant to an exclusive or nonexclusive license) or enter into a consent decree or hold
separate all or any portion of the business, assets or any product of the Company or any of its Affiliates or Parent or any of its Affiliates, in each case as a result of or in connection with the Merger or any of the other transactions contemplated
by this Agreement. Without limiting the generality of the foregoing, the Company shall give Parent the opportunity to participate in the defense of any Proceeding against the Company and/or its directors relating to the transactions contemplated by
this Agreement and will obtain the prior written consent of Parent prior to settling or satisfying any such Proceeding.
(d)
Subject to Applicable Law relating to the exchange of information, the Company and Parent and their respective counsel shall (i) have the right to review in advance, and to the extent practicable each shall consult the other on, any filing made
with, or written materials to be submitted to, any Governmental Authority in connection with the transactions contemplated by this Agreement, (ii) promptly inform each other of any communication (or other correspondence or memoranda) received
from, or given to, the U.S. Department of Justice, the U.S. Federal Trade Commission, or any other Governmental Antitrust Authority and (iii) promptly furnish each other with copies of all correspondence, filings and written communications
between them or their Subsidiaries or Affiliates, on the one hand, and any Governmental Authority or its respective staff, on the other hand, with respect to the transactions contemplated by this Agreement. The Company and Parent shall, to the
extent practicable, provide the other party and its counsel with advance notice of and the opportunity to participate in any discussion, telephone call or meeting with any Governmental Authority in respect of any filing, investigation or other
inquiry in connection with the transactions contemplated by this Agreement and to
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participate in the preparation for such discussion, telephone call or meeting. Neither Parent nor the Company shall commit to or agree with any Governmental Authority to stay, toll or extend any
applicable waiting period under the HSR Act or applicable Foreign Competition Laws, without the prior written consent of the other. The Company and Parent may, as each deems advisable and necessary, reasonably designate any competitively sensitive
material provided to the other under this
Section 6.11
as “
Antitrust Counsel Only Material
”. Notwithstanding anything to the contrary in this
Section 6.11
, materials provided to the other party or its counsel
may be redacted to remove references concerning the valuation of the Company and its Subsidiaries.
(e) Each of Parent and
Merger Subsidiary agrees that, between the date of this Agreement and the Closing Date, each of Parent and Merger Subsidiary shall not, and shall ensure that none of its Subsidiaries or other Affiliates shall, take any action or propose, announce an
intention or agree, in writing or otherwise, to take any action that would reasonably be expected to materially delay or prevent the consummation of the transactions contemplated hereby.
(f) The Company has provided Parent with all information requested by Parent to evaluate which Governmental Authorities shall require
Antitrust Filings. Set forth on
Section 6.11(f)
of the Company Disclosure Schedule is (i) a list of each country in which the Company and any of its Subsidiaries generated sales in the last completed fiscal year and the twelve
(12) month period ended September 30, 2012, and the total sales the Company and any of its Subsidiaries generated in each such country in the last completed fiscal year and the twelve (12) month period ended September 30, 2012;
and (ii) a schedule of each country in which the Company maintains one or more Subsidiaries, offices, or personnel.
Section 6.12.
Certain Filings
. The Company and Parent shall cooperate with one another (i) in determining whether any
action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any Material Contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (ii) in taking such reasonable actions or making any such filings, furnishing information required in connection therewith or with the Proxy Statement and seeking timely to obtain any such
actions, consents, approvals or waivers.
Section 6.13.
Public Announcements
. Parent and the Company shall consult
with each other before issuing any press release or making any other public statement, or scheduling a press conference or conference call with investors or analysts, with respect to this Agreement or the transactions contemplated hereby and shall
not issue any such press release or make any such other public statement without the consent of the other party, which shall not be unreasonably withheld, except (i) as such release or announcement may be required by Applicable Law or any
listing agreement with or rule of any national securities exchange or association upon which the securities of the Company or Parent, as applicable, are listed or (ii) as such release or announcement may be made with respect to an Adverse
Recommendation Change effected in accordance with
Section 6.03
, in which case the party required to make the release or announcement shall consult with the other party about, and allow the other party reasonable time (taking into account
the circumstances) to comment on, such release or announcement in advance of such issuance, and the party will consider such comments in good faith.
Section 6.14.
Further Assurances
. At and after the Effective Time, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf
of the Company or Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Merger Subsidiary, any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the
Merger.
Section 6.15.
Section 16 Matters
. Prior to the Effective Time, the Company may approve, in
accordance with the procedures set forth in Rule 16b-3 promulgated under the Exchange Act and in accordance with the Interpretative Letter dated January 12, 1999 issued by the SEC relating to Rule 16b-3, any dispositions of equity
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securities of the Company (including derivative securities with respect to equity securities of the Company) resulting from the transactions contemplated by this Agreement by each officer or
director of the Company who is subject to Section 16 of the Exchange Act with respect to equity securities of the Company and any Affiliate of a director of the Company that may rely on Rule 16b-3.
Section 6.16.
Confidentiality
. Parent and the Company hereby acknowledge and agree to continue to be bound by the
Confidential Disclosure Agreement dated as of August 15, 2012 by and between the Ultimate Parent and the Company (the “
Confidentiality Agreement
”).
Section 6.17.
Employee Matters
(a) From and after the Closing Date,
with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with the Surviving Corporation or any Subsidiary of the Surviving Corporation following the Effective Time
(“
Continuing Employees
”), Parent shall use reasonable efforts to cause the service of each such Continuing Employee with the Company and its ERISA Affiliates prior to the Closing Date to be recognized for purposes of eligibility to
participate, levels of benefits (but not for benefit accruals under any defined benefit pension plan) and vesting under each compensation, vacation, fringe or other welfare benefit plan, program or arrangement of Parent, Ultimate Parent, the
Surviving Corporation or any of their ERISA Affiliates, but not including any sabbatical or equity compensation plans, programs, agreements or arrangements (collectively, the “
Parent Benefit Plans
”) in which any Continuing Employee
is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in
a duplication of benefits.
(b) From and after the Closing Date, with respect to each Parent Benefit Plan that is an
“employee welfare benefit plan” (as defined in Section 3(1) of ERISA) in which any Continuing Employee is or becomes eligible to participate, Parent shall use reasonable efforts to cause each such Parent Benefit Plan to (i) waive
all limitations as to pre-existing conditions, waiting periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their
eligible dependents to the same extent that such pre-existing conditions, waiting periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such
Continuing Employee was a participant immediately prior to such Continuing Employee’s commencement of participation in such Parent Benefit Plan but, with respect to long-term disability and life insurance benefits and coverage, solely to the
extent permitted under the terms and conditions of Parent’s applicable insurance contracts in effect as of the Closing Date;
provided
, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions
based on periods of employment,
Section 6.17(a)
shall control; and (ii) provide each Continuing Employee and his or her eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to
the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such
expenses were recognized for such purposes under the comparable Company Employee Plan.
(c) The parties acknowledge and agree
that all provisions contained in this
Section 6.17
are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any employees, former employees, any
participant in any Company Employee Plan or any beneficiary thereof, of any right to continued employment with Parent, Company, the Surviving Corporation or any of their Affiliates. Nothing in this
Section 6.17
shall be deemed to amend
any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such
plan may be amended or terminated in accordance with its terms and Applicable Law.
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ARTICLE 7
CONDITIONS TO THE MERGER
Section 7.01.
Conditions to the
Obligations of Each Party
. The obligation of each party hereto to consummate the Merger is subject to the satisfaction, at or prior to the Closing, of the following conditions:
(a) the Stockholder Approval shall have been obtained; and
(b) no Governmental Authority having jurisdiction over any party hereto shall have issued any Order or taken any other action that is in effect (whether temporary, preliminary or permanent) restraining,
enjoining or otherwise prohibiting the consummation of the Merger and no Applicable Law shall have been adopted that makes consummation of the Merger illegal or otherwise prohibited.
Section 7.02.
Conditions to the Obligations of Parent and Merger Subsidiary
. The obligation of Parent and Merger Subsidiary
to consummate the Merger is subject to the satisfaction, at or prior to Closing, of the following conditions:
(a) (i) each of
the Specified Company Representations, to the extent not qualified as to materiality or “Company Material Adverse Effect,” shall be true in all material respects, and to the extent so qualified shall be true in all respects, when made and
as of immediately prior to the Effective Time as if made at and as of such time (other than any Specified Company Representation that is made only as of a specified date, which need only be true, to the extent not qualified as to materiality or
“Company Material Adverse Effect,” in all material respects, and to the extent so qualified, in all respects, in each case as of such specified date), (ii) the Other Company Representations, disregarding any materiality or Company
Material Adverse Effect qualifications contained therein, shall be true when made and as of immediately prior to the Effective Time as if made at and as of such time (other than any Other Company Representations that are made only as of a specified
date, which need only to be true as of such specified date);
provided
that the Other Company Representations as modified in clause (ii) shall be deemed true at any time unless the individual or aggregate impact of the failure to be so
true would have or reasonably be expected to have a Company Material Adverse Effect; (iii) Parent shall have received a certificate signed on behalf of the Company by a senior Executive Officer of the Company to the foregoing effect; and
(iv) the Company shall have delivered to Parent a certificate of the Company executed by the Secretary of the Company, dated as of the Closing Date, certifying: (A) the approval of the Company Board and the stockholders of the Company of
this Agreement and the transactions contemplated hereby, (B) the certificate of incorporation and bylaws (or similar governing documents) of the Company and each of its Subsidiaries, (C) the name, title, incumbency and signatures of the
officers authorized to execute this Agreement and the other agreements contemplated hereby to which the Company is a party, and (D) any and all Company Board, committee and stockholder resolutions, consents or other actions taken by the Company
Board, any committee of the Company Board or the stockholders between the date of this Agreement and the Closing Date;
(b)
the Company shall have performed in all material respects its obligations under this Agreement, and Parent shall have received a certificate signed on behalf of the Company by a senior Executive Officer of the Company to the foregoing effect;
(c) there shall not be pending or overtly threatened any Proceeding initiated by any Governmental Authority,
(i) challenging or seeking to make illegal, delay materially or otherwise directly or indirectly restrain or prohibit the consummation of the Merger or seeking to obtain material damages in connection therewith, (ii) seeking to restrain or
prohibit Parent’s ownership or operation (or that of its Affiliates) of all or any material portion of the business, assets or products of the Company and its Subsidiaries, taken as a whole, or of Parent and its Affiliates, taken as a whole, or
to compel Parent or any of its Affiliates to dispose of, license (whether pursuant to an exclusive or nonexclusive license) or hold separate all or any material portion of the business, assets or products of the Company and its Subsidiaries, taken
as a whole, or of Parent and its Affiliates, taken as a whole, (iii) seeking, directly or indirectly, to impose or confirm material limitations on the ability of Parent or any of its Affiliates effectively to acquire, hold or exercise full
rights of ownership of Company Common Stock
A-49
or any shares of common stock of the Surviving Corporation, including the right to vote such shares on all matters properly presented to the Company’s stockholders, or (iv) seeking to
require divestiture by Parent, Merger Subsidiary or any of Parent’s other Affiliates of any Equity Interests;
(d) there
shall not be in effect any Order that is reasonably likely to result, directly or indirectly, in any of the effects referred to in clauses (i) through (iv) of
Section 7.02(c)
;
(e) the applicable waiting period (and any extension thereof, subject to
Section 6.11(d)
) applicable to the Merger under the
HSR Act or any Foreign Competition Law shall have expired or been terminated, and any affirmative approval of a Governmental Authority required under any Foreign Competition Law shall have been obtained;
(f) the Company shall have performed in all respects its obligations under
Section 6.01(h)
of this Agreement, and
(g) there has not been any fact, event, change, development or set of circumstances that has had or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
Section 7.03.
Conditions to the Obligations of
the Company
. The obligation of the Company to consummate the Merger is subject to the satisfaction, at or prior to Closing, of the following conditions:
(a) the representations and warranties of Parent and Merger Subsidiary set forth in this Agreement shall be true and correct in all material respects on the Closing Date as if made on and as of the
Closing Date (other than any such representation and warranty that is made only as of a specified date, which need only to be true in all material respects as of such specified date), and the Company shall have received a certificate signed on
behalf of Parent by an authorized officer of Parent to the foregoing effect;
(b) Parent and Merger Subsidiary shall have
performed in all material respects their respective obligations under this Agreement, and the Company shall have received a certificate signed on behalf of Parent by an authorized officer of Parent to the foregoing effect; and
(c) the applicable waiting period (and any extension thereof, subject to
Section 6.11(d)
) applicable to the Merger under the
HSR Act shall have expired or been terminated.
ARTICLE 8
TERMINATION
Section 8.01.
Termination
. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Closing (notwithstanding any approval of this Agreement by the stockholders
of the Company):
|
|
(a)
|
by mutual written agreement of the Company and Parent;
|
|
|
(b)
|
by either the Company or Parent, if:
|
(i) the Merger has not been consummated on or before June 19, 2013 (subject to possible extension as provided below, the “
End Date
”),
provided
, that: (A) if the condition
to the completion of the Merger set forth in
Section 7.02(e)
shall not have been satisfied by the End Date (as it may be extended as set forth below), but the conditions set forth in
Section 7.03(a)
and
Section 7.03(b)
would be satisfied if the Closing Date were to occur on such date, then Parent shall be entitled to extend the End Date by a three (3) month period by written notice to the Company, and Parent shall be entitled to
further extend the End Date by a second three (3) month period by written notice to the Company, and (B) if the condition to the completion of the Merger set forth in
Section 7.03(c)
shall not have been satisfied by
June 19, 2013, but the conditions
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set forth in
Sections 7.02(a)
,
(b)
,
(c)
,
(d)
,
(f)
, and
(g)
would be satisfied if the Closing Date were to occur on such date, then the Company
shall be entitled to extend the End Date by a three (3) month period by written notice to Parent, it being understood that in no event (whether under clause “(A)” or “(B)” of this sentence or otherwise) shall the End Date be
extended to a date that is later than the twelve (12) month anniversary of this Agreement;
provided, further
, that the right to terminate this Agreement under this
Section 8.01(b)(i)
shall not be available to any party whose
material breach of any provision of this Agreement results in the failure of the Merger to be consummated by the End Date;
(ii) any Governmental Authority of competent jurisdiction shall have issued an Order, decree, injunction or ruling or taken any other action permanently enjoining, restraining or otherwise prohibiting the
consummation of the Merger and such Order, decree, ruling or other action shall have become final and nonappealable, or if there shall be adopted any Applicable Law that makes consummation of the Merger illegal or otherwise prohibited; or
(iii) the Stockholder Meeting shall have been held and the Stockholder Approval shall not have been obtained
thereat or at any adjournment or postponement thereof;
(i)
if an Adverse Recommendation Change shall have occurred (it being understood that the receipt by Parent of an Adverse Recommendation Change Notice shall not, in and of itself, entitle Parent to terminate this Agreement);
(ii) if the Company shall have entered into, or publicly announced its intention to enter into, a letter of intent,
memorandum of understanding or Contract (other than a confidentiality agreement contemplated by
Section 6.03(b)
) relating to any Acquisition Proposal;
(iii) if the Company or any of its Representatives shall have willfully and materially breached any of its obligations
under
Section 6.03
;
(iv) if the Company Board or any committee thereof (A) shall not have
rejected any Acquisition Proposal within ten (10) Business Days of the making public thereof (including, for these purposes, by taking no position with respect to the acceptance by the stockholders of the Company of a tender offer or
exchange offer, which shall constitute a failure to reject such Acquisition Proposal) or (B) shall have failed, pursuant to Rule 14e-2 promulgated under the Exchange Act or otherwise, to publicly reconfirm the Company Board Recommendation
within ten (10) Business Days after receipt of a written request from Parent that it do so if such request is made following the making by any Person of an Acquisition Proposal; or
(v) in the event (A) of a material breach of any covenant or agreement on the part of the Company set forth in this
Agreement or (B) that any representation or warranty of the Company set forth in this Agreement shall have been inaccurate when made or shall have become inaccurate, in either case such that the conditions to the Merger set forth in
Section 7.02(b)
or
Section 7.02(a)
, respectively, would not be satisfied as of the time of such breach or as of the time such representation and warranty became inaccurate;
provided, however
, that notwithstanding the
foregoing, in the event that such breach by the Company or such inaccuracies in the representations and warranties of the Company are curable by the Company through the exercise of commercially reasonable efforts prior to the End Date and within
thirty (30) days, then Parent shall not be permitted to terminate this Agreement pursuant to this
Section 8.01(c)(v)
until the earlier to occur of (1) the expiration of a thirty (30) calendar day period after delivery of
written notice from Parent to the Company of such breach or inaccuracy, as applicable, or (2) the ceasing by the Company to exercise commercially reasonable efforts to cure such breach or inaccuracy,
provided
that the Company continues
to exercise commercially reasonable efforts to cure such breach or inaccuracy (it being understood that Parent may not terminate this Agreement pursuant to this
Section 8.01(c)(v)
if such breach or inaccuracy by the Company is cured
within such thirty (30) calendar day period); or
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(i) if prior to the Stockholder Approval, the Company Board authorizes the Company, in compliance with the terms of this
Agreement, including
Section 6.03(d)
, to enter into a binding definitive agreement in respect of a Superior Proposal with a Third Party;
provided
that the Company shall have paid any amounts due pursuant to
Section 9.04
in accordance with the terms, and at the times, specified therein; and
provided further
that in the event of such termination, the Company substantially concurrently enters into such binding definitive agreement; or
(ii) in the event (A) of a material breach of any covenant or agreement on the part of Parent or Merger
Subsidiary set forth in this Agreement or (B) that any of the representations and warranties of Parent and Merger Subsidiary set forth in this Agreement shall have been inaccurate in any material respect;
provided
,
however
, that
notwithstanding the foregoing, in the event that such breach by Parent or Merger Subsidiary or such inaccuracies in the representations and warranties of Parent or Merger Subsidiary are curable by Parent or Merger Subsidiary through the exercise of
commercially reasonable efforts prior to the End Date and within thirty (30) days, then the Company shall not be permitted to terminate this Agreement pursuant to this
Section 8.01(d)(ii)
until the earlier to occur of (1) the
expiration of a thirty (30) calendar day period after delivery of written notice from the Company to Parent of such breach or inaccuracy, as applicable, or (2) Parent or Merger Subsidiary ceasing to exercise commercially reasonable efforts
to cure such breach or inaccuracy,
provided
that Parent or Merger Subsidiary continues to exercise commercially reasonable efforts to cure such breach or inaccuracy (it being understood that the Company may not terminate this Agreement
pursuant to this
Section 8.01(d)(ii)
if such breach or inaccuracy by Parent or Merger Subsidiary is cured within such thirty (30) calendar day period).
The party desiring to terminate this Agreement pursuant to this
Section 8.01
(other than pursuant to
Section 8.01(a)
) shall give notice of such termination to each other party
hereto.
Section 8.02.
Effect of Termination
. If this Agreement is terminated pursuant to
Section 8.01
, this Agreement shall become void and of no effect without liability of any party (or any stockholder, director, officer, employee, agent, consultant or other Representative of such party) to each other party hereto;
provided
that no such termination shall relieve any party hereto of any liability for damages resulting from any willful or intentional breach of this Agreement. The provisions of
Section 6.16
, this
Section 8.02
and
Sections 9.04
,
9.05(b)
,
9.06
,
9.07
and
9.08
shall survive any termination hereof pursuant to
Section 8.01
.
ARTICLE 9
MISCELLANEOUS
Section 9.01.
Notices
. Any notices or other communications required or permitted under, or otherwise given in connection
with, this Agreement shall be in writing and shall be deemed to have been duly given (i) when delivered or sent if delivered in person or sent by facsimile transmission (provided confirmation of facsimile transmission is obtained), (ii) on
the fifth Business Day after dispatch by registered or certified mail, (iii) on the next Business Day if transmitted by national overnight courier or (iv) on the date delivered if sent by email (provided confirmation of email receipt is
obtained), in each case as follows:
if to Parent, to:
Oracle Corporation
500 Oracle Parkway
Redwood City, CA 94065
Attention: General Counsel
Associate General Counsel, Mergers and Acquisitions
Facsimile No.:
(650) 633-0272
Email: brian.s.higgins@oracle.com
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with a copy to:
Weil, Gotshal & Manges, LLP
201 Redwood Shores Parkway
Redwood City, CA 94065
Attention: Keith Flaum
Facsimile No.: (650) 802-3100
Email: keith.flaum@weil.com
if to the Company, to:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, VA 22182
Attention: Chief Executive Officer
Facsimile No.: (571) 350-9655
Email: joe.payne@eloqua.com
with a copy to:
Goodwin Procter LLP
53 State Street
Boston, MA 02109
Attention: Stuart M. Cable, Esq.
Lisa R. Haddad, Esq.
David V. Cappillo, Esq.
Facsimile No.: (617) 523-1231
Email: scable@goodwinprocter.com
lhaddad@goodwinprocter.com
dcappillo@goodwinprocter.com
Section 9.02.
Survival of Representations and Warranties
. The representations and warranties contained herein and in any certificate or other writing delivered pursuant hereto shall not
survive the Effective Time.
Section 9.03.
Amendments and Waivers
.
(a) Any provision of this Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective;
provided
that without the further approval of the Company’s
stockholders, no such amendment or waiver shall be made or given after the Stockholder Approval that requires the approval of the stockholders of the Company under Delaware Law unless the required further approval is obtained.
(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies
provided by Applicable Law.
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Section 9.04.
Expenses
.
(a) Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense. Notwithstanding the foregoing, Parent shall pay all filing fees payable pursuant to the HSR Act or any Foreign Competition Law; provided, that if this Agreement is terminated pursuant to
Section 8.01
(other than pursuant to
Section 8.01(d)(ii)
), the Company shall promptly thereafter reimburse Parent for one-half of all such filing fees paid by Parent.
(b) If this Agreement is terminated pursuant to
Section 8.01(c)(i)
,
Section 8.01(c)(ii)
,
Section 8.01(c)(iii)
or
Section 8.01(c)(iv)
(or if this Agreement
is terminated pursuant to any other provision of
Section 8.01
at any time after the occurrence of an event contemplated by any of
Section 8.01(c)(i)
,
Section 8.01(c)(ii) Section 8.01(c)(iii)
, or
Section 8.01(c)(iv)
), then the Company shall pay to Parent (by wire transfer of immediately available funds), within two (2) Business Days after such termination, a fee in an amount equal to $31,500,000 (the “
Termination
Fee
”). If this Agreement is terminated pursuant to
Section 8.01(d)(i)
, then the Company shall pay to Parent (by wire transfer of immediately available funds), prior to and as a condition of such termination, the Termination Fee.
(c) If this Agreement is terminated pursuant to
Section 8.01(b)(i)
or
8.01(b)(iii)
and (i) prior to
such termination (in the case of termination pursuant to
Section 8.01(b)(i)
) or the Stockholder Meeting (in the case of termination pursuant to
Section 8.01(b)(iii)
), an Acquisition Proposal shall have been publicly announced
and not publicly withdrawn, and (ii) within twelve (12) months following the date of such termination the Company shall have (A) entered into a definitive agreement with respect to, (B) recommended to its stockholders or
(C) consummated, a transaction contemplated by any Acquisition Proposal (with all references to 15% in the definition of Acquisition Proposal being treated as 50% for the purpose of this clause “(ii)”), then the Company shall pay to
Parent (by wire transfer of immediately available funds), within two (2) Business Days after entering into such definitive agreement, making such recommendation or consummating such transaction, the Termination Fee.
(d) In the event that this Agreement is terminated pursuant to
Section 8.01(b)(iii)
, the Company shall as promptly as
possible (but in any event within three (3) Business Days) following receipt of an invoice therefor pay all of the documented reasonable out-of-pocket fees and expenses (including reasonable legal and other third party advisors fees and
expenses) actually incurred by Parent and its Affiliates on or prior to the termination of this Agreement in connection with the transactions contemplated by this Agreement, but in no event more than $5,000,000 (the “
Parent
Expenses
”) as directed by Parent in writing;
provided
that the amount of any payment of the Parent Expenses pursuant to this
Section 9.04(d)
shall be credited against any obligation of the Company to pay the Termination
Fee pursuant to
Section 9.04(c)
.
(e) The Company acknowledges that the agreements contained in this
Section 9.04
are an integral part of the transactions contemplated by this Agreement, and that without these agreements, Parent and Merger Subsidiary would not enter into this Agreement. Accordingly, if the Company fails to pay any
amount due to Parent pursuant to this
Section 9.04
, when due, the Company shall pay the costs and expenses (including legal fees and expenses) in connection with any action taken to collect payment (including the prosecution of any
lawsuit or other legal action), together with interest on the unpaid amount at the publicly announced prime rate of Citibank, N.A. in New York City from the date such amount was first payable to the date it is paid.
(f) Parent acknowledges and agrees that the Termination Fee contemplated by this
Section 9.04
shall be payable by the Company
on only one occasion, whether or not the facts or circumstances giving rise to the Company’s obligation to pay the Termination Fee may otherwise trigger an obligation to pay the Termination Fee under more than one subsection of this
Section 9.04
or on more than one occasion pursuant to the same subsection of this
Section 9.04
(it being understood, however, that this
Section 9.04(f)
shall not be interpreted to limit or restrict Parent’s
ability to seek or obtain any other remedy it may have with respect to this Agreement).
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Section 9.05.
Binding Effect; No Third Party Beneficiaries; No Assignment
.
(a) The provisions of this Agreement shall be binding upon and, except as provided in
Section 6.10
, (which shall
be to the benefit of the parties referred to in such section), shall inure only to the benefit of the parties hereto and their respective successors and assigns. Except as provided in
Section 6.10
, no provision of this Agreement is
intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto, and nothing in this Agreement, express or implied, is intended or shall be construed to create any third party
beneficiaries.
(b) No party hereto may assign, delegate or otherwise transfer any of its rights or obligations under this
Agreement (whether by operation of law or otherwise) without the consent of each other party hereto, except that Parent or Merger Subsidiary may transfer or assign its rights and obligations under this Agreement, in whole or from time to time in
part, to one or more of their Affiliates at any time without the consent of the Company;
provided
that such transfer or assignment shall not relieve Parent or Merger Subsidiary of any of its obligations hereunder. Any assignment, delegation
or transfer in violation of the foregoing shall be null and void.
Section 9.06.
Governing Law
. This Agreement
shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such State.
Section 9.07.
Jurisdiction
. The parties hereto agree that any Proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought in the Court of Chancery of the State of Delaware in and for New Castle County, Delaware. Each Party hereby irrevocably submits to the exclusive jurisdiction of such court in respect of any
Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and hereby waives, and agrees not to assert, as a defense in any such Proceeding, any claim that it is not subject personally to the jurisdiction of
such court, that the Proceeding is brought in an inconvenient forum, that the venue of the Proceeding is improper or that this Agreement or the transactions contemplated hereby may not be enforced in or by such courts. Each party hereto agrees that
notice or the service of process in any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be properly served or delivered if delivered in the manner contemplated by
Section 9.01
or in
any other manner permitted by Applicable Law.
Section 9.08.
Waiver of Jury Trial
. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 9.09.
Counterparts; Effectiveness
. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof
signed by each other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). Signatures to this Agreement
transmitted by facsimile transmission, by electronic mail in PDF form, or by any other electronic means designed to preserve the original graphic and pictorial appearance of a document, will be deemed to have the same effect as physical delivery of
the paper document bearing the original signatures.
Section 9.10.
Entire Agreement
. This Agreement, together with
the Confidentiality Agreement, constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect
to their subject matter.
Section 9.11.
Severability
. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the
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transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the parties hereto agree to modify this Agreement so as to effect
the original intent of the parties hereto as closely as possible in an acceptable manner, in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 9.12.
Specific Performance
. In the event of any breach or threatened breach by Parent or Merger Subsidiary, on the
one hand, or the Company, on the other hand, of any covenant or obligation of such party contained in this Agreement, the other party shall be entitled to seek, in addition to any monetary remedy or damages: (a) a decree or order of specific
performance to enforce the observance and performance of such covenant or obligation; and (b) an injunction restraining such breach or threatened breach.
Section 9.13.
Disclosure Schedules
. Any reference in a particular section of the Company Disclosure Schedule shall only be deemed to be an exception to (or, as applicable, a disclosure for
purposes of) (a) the representations and warranties (or covenants, as applicable) of the Company that are contained in the corresponding Section of this Agreement and (b) any other representations and warranties (or covenants, as
applicable) of the Company that are contained in this Agreement, but only if the relevance of that reference as an exception to (or a disclosure for purposes of) would be reasonably apparent from such item.
Section 9.14.
Rules of Construction
. Each of the parties hereto acknowledges that it has been represented by counsel of its
choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party and its counsel cooperated and participated in the drafting and
preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of
its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived
by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation.
Section 9.15.
Compliance with Obligations
. The Ultimate Parent hereby agrees to cause Parent to honor Parent’s obligations by Parent and Merger Subsidiary under this Agreement and the
transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above written.
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ELOQUA, INC.
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By:
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/s/ Joseph P. Payne
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Name:
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Joseph P. Payne
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Title:
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Chief Executive Officer
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OC ACQUISITION LLC
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By:
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/s/ Brian S. Higgins
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Name:
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Brian Higgins
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Title:
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Vice President
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ESPERANZA ACQUISITION CORPORATION
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By:
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/s/ Brian S. Higgins
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Name:
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Brian Higgins
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Title:
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Vice President
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ORACLE CORPORATION
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By:
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/s/ Brian S. Higgins
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Name:
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Brian Higgins
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Title:
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Vice President, Associate General Counsel
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[Signature page to Agreement and Plan of Merger]
A-57
EXHIBIT A
VOTING AGREEMENT
VOTING AGREEMENT, dated as of December 19, 2012 (this “
Agreement
”), between OC Acquisition LLC, a Delaware limited liability company (“
Parent
”), and the Person
listed as “Stockholder” on the signature page hereto (“
Stockholder
”).
WHEREAS, as a condition and
inducement to Parent’s and Esperanza Acquisition Corporation’s (“
Merger Sub
”) willingness to enter into an Agreement and Plan of Merger, dated as of the date hereof (the “
Merger Agreement
”), with Eloqua,
Inc., a Delaware corporation (the “
Company
”), Parent has requested Stockholder, and Stockholder has agreed, to enter into this Agreement with respect to all shares of Common Stock, par value $0.0001 per share, of the Company that
Stockholder beneficially owns (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) (the “
Shares
”).
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
V
OTING
A
GREEMENT
; G
RANT
OF
P
ROXY
Section 1.01
. Voting Agreement
. Stockholder hereby agrees to vote or exercise Stockholder’s right to consent with
respect to all Shares that Stockholder is entitled to vote at the time of any vote or action by written consent to approve and adopt the Merger Agreement, the Merger and all agreements and actions contemplated by the Merger Agreement at any meeting
of the stockholders of the Company, and at any adjournment thereof, at which such Merger Agreement and such other agreements and actions are submitted for the consideration and vote of the stockholders of the Company. Stockholder hereby agrees that
Stockholder will not vote any Shares in favor of, or consent to, and will vote against and not consent to, the approval of any (i) Acquisition Proposal, (ii) reorganization, recapitalization, dissolution, liquidation or winding-up of the
Company or any other extraordinary transaction involving the Company other than the Merger, (iii) corporate action the consummation of which would frustrate the purposes, or prevent or delay the consummation, of the transactions contemplated by
the Merger Agreement or (iv) other matter relating to, or in connection with, any of the foregoing matters.
Section 1.02
. Irrevocable Proxy
. Stockholder hereby revokes any and all previous proxies granted with respect to the Shares.
By entering into this Agreement, Stockholder hereby grants a proxy appointing Parent as Stockholder’s attorney-in-fact and proxy, with full power of substitution, for and in Stockholder’s name, to vote, express consent or dissent, or
otherwise to utilize such voting power in the manner contemplated by Section 1.01 above as Parent or its proxy or substitute shall, in Parent’s sole discretion, deem proper with respect to the Shares. The proxy granted by Stockholder
pursuant to this Article 1 is irrevocable and is granted in consideration of Parent entering into this Agreement and the Merger Agreement and incurring certain related fees and expenses. The proxy granted by Stockholder shall not be exercised to
vote, consent or act on any matter except as contemplated by Section 1.01 above. The proxy granted by Stockholder shall be revoked upon termination of this Agreement in accordance with its terms.
ARTICLE 2
R
EPRESENTATIONS
AND
W
ARRANTIES
OF
S
TOCKHOLDER
Stockholder represents and warrants to Parent that:
Section 2.01
. Corporation Authorization
. The execution, delivery and performance by Stockholder of this Agreement and the consummation by Stockholder of the transactions contemplated hereby
are within the powers (corporate and otherwise) of Stockholder and, if applicable, have been duly authorized by all necessary
A-58
corporate, company, partnership or other action. This Agreement constitutes a valid and binding agreement of Stockholder, enforceable against Stockholder in accordance with its terms, subject to
the effect of any applicable bankruptcy, insolvency, moratorium or similar law affecting creditors’ rights generally and to rules of law governing specific performance, injunctive relief and other equitable remedies. If Stockholder is married
and the Shares and/or Company Compensatory Awards set forth on the signature page hereto opposite such Stockholder’s name constitute community property under Applicable Law, this Agreement has been duly authorized, executed and delivered by,
and constitutes the valid and binding agreement of, such Stockholder’s spouse, enforceable against such Stockholder’s spouse in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, moratorium or
similar law affecting creditors’ rights generally and to rules of law governing specific performance, injunctive relief and other equitable remedies. If this Agreement is being executed in representative or fiduciary capacity, the Person
signing this Agreement has full power and authority to enter into and perform this Agreement.
Section 2.02
.
Non-Contravention
. The execution, delivery and performance by Stockholder of this Agreement and the consummation by Stockholder of the transactions contemplated hereby do not and will not (i) violate the certificate of incorporation or
bylaws, or other comparable charter or organizational documents, of Stockholder, if any, (ii) violate any Applicable Law, (iii) conflict with or violate or require any consent, approval, notice or other action by any Person under,
constitute a default (with or without notice of lapse of time or both) under, or give rise to any right of termination, cancellation or acceleration or to a loss of any benefit to which Stockholder is entitled under any provision of any Contract
binding on Stockholder or any of Stockholder’s properties or assets, including the Shares or (iv) result in the imposition of any Lien on any asset of Stockholder.
Section 2.03
. Ownership of Shares
. Except as set forth on Schedule 2.03 to this Agreement and except for any restrictions on transfer pursuant to applicable securities laws, as of the date of
this Agreement, Stockholder (together with Stockholder’s spouse if Stockholder is married and the Shares and/or Company Compensatory Awards set forth on the signature page hereto opposite such Stockholder’s name constitute community
property under Applicable Law) is the beneficial owner of the Shares and Company Compensatory Awards set forth on the signature page hereto opposite such Stockholder’s name, free and clear of any Lien and any other limitation or restriction
(including any restriction on the right to vote or otherwise dispose of the Shares). None of the Shares or Company Compensatory Awards is subject to any voting trust or other Contract with respect to the voting of such Shares or Company Compensatory
Awards (including Shares underlying such Company Compensatory Awards), except as set forth in this Agreement.
Section 2.04
. Total Shares
. Except for the Shares set forth on the signature page hereto (including Shares underlying Company
Compensatory Awards), as of the date of this Agreement, Stockholder does not beneficially own any (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares
of capital stock or voting securities of the Company or (iii) options or other rights to acquire (whether currently, upon lapse of time, following the satisfaction of any conditions, upon the occurrence of any event or any combination of the
foregoing) from the Company any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company.
Section 2.05
. Finder’s Fees
. No investment banker, broker, finder or other intermediary is entitled to a fee or commission from Parent or the Company in respect of this Agreement based
upon any Contract made by or on behalf of Stockholder.
Section 2.06.
No Litigation
. As of the date of this
Agreement, there is no suit, claim, action, investigation or other Proceeding pending or, to the knowledge of Stockholder, threatened against Stockholder at law or in equity before or by any Governmental Authority that would reasonably be expected
to impair the ability of Stockholder to perform Stockholder’s obligations hereunder or consummate the transactions contemplated hereby.
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ARTICLE 3
R
EPRESENTATIONS
AND
W
ARRANTIES
OF
P
ARENT
Parent represents and warrants to Stockholder:
Section 3.01
. Corporation
Authorization
. The execution, delivery and performance by Parent of this Agreement and the consummation by Parent of the transactions contemplated hereby are within the limited liability company powers of Parent and have been duly authorized by
all necessary limited liability company action. This Agreement constitutes a valid and binding agreement of Parent, enforceable against Parent in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, moratorium
or similar law affecting creditors’ rights generally and to rules of law governing specific performance, injunctive relief and other equitable remedies.
ARTICLE 4
C
OVENANTS
OF
S
TOCKHOLDER
Stockholder hereby covenants and agrees that:
Section 4.01
. No Proxies for, Encumbrances on or Disposition of Shares
.
(i) Except pursuant to the terms of this Agreement, Stockholder shall not, without the prior written consent of Parent, directly or
indirectly (except, if Stockholder is an individual, as a result of the death of Stockholder), (a) grant any proxies or enter into any voting trust or other Contract with respect to the voting of any Shares, (b) sell, assign, transfer,
encumber or otherwise dispose of, or enter into any Contract with respect to the direct or indirect sale, assignment, transfer, encumbrance or other disposition of, any Shares during the term of this Agreement or (c) take any other action that
would make any representation or warranty of Stockholder contained herein untrue or incorrect in any material respect or in any way restrict, limit or interfere in any material respect with the performance of Stockholder’s obligations hereunder
or the transactions contemplated hereby or by the Merger Agreement, or seek to do or solicit any of the foregoing actions, and agrees to notify Parent promptly, and to provide all details requested by Parent, if Stockholder shall be approached or
solicited, directly or indirectly, by any Person with respect to any of the foregoing.
(ii) Notwithstanding the foregoing
clause (i), Stockholder may: (A) transfer Shares to any member of Stockholder’s immediate family or to a trust for the benefit of Stockholder or any member of Stockholder’s immediate family;
provided
that a transfer referred to
in this sentence shall be permitted only if, as a precondition to such transfer, the transferee agrees in a writing, reasonably satisfactory in form and substance to Parent, to be bound by all of the terms of this Agreement; (B) transfer Shares
to Stockholder’s Affiliates specifically identified on Schedule 4.01(ii)(B) to this Agreement;
provided
that a transfer referred to in this sentence shall be permitted only if, as a precondition to such transfer, the transferee agrees in
a writing, reasonably satisfactory in form and substance to Parent, to be bound by all of the terms of this Agreement, (C) transfer Shares to any other party to this Agreement (it being understood that: (1) prior to such transfer,
Stockholder shall notify Parent in writing of such intended transfer; and (2) the transferee shall be bound by this Agreement with respect any Shares so transferred), or (D) in connection with the exercise of any options to purchase
Company Common Stock, dispose of Shares to the Company in an amount that is sufficient to satisfy the applicable exercise price and/or payment of any tax liability incurred by Stockholder in connection with such exercise.
Section 4.02
. Other Offers
. Stockholder (in Stockholder’s capacity as such), and each of Stockholder’s
Subsidiaries, if any, shall not, and shall use their respective reasonable best efforts to cause Stockholder’s and any of Stockholder’s Subsidiaries’ officers, directors, employees or other Representatives, if any, not to, directly or
indirectly, (i) solicit, initiate or knowingly take any action to facilitate or encourage the submission of any Acquisition Proposal or any inquiries or the making of any proposal that would reasonably be expected to lead to any Acquisition
Proposal, or (ii) conduct or engage in any discussions or negotiations with, disclose any non-public information relating to the Company or any of its Subsidiaries to, afford access to the business, properties, assets, books or records of the
Company or any of its Subsidiaries to, or otherwise cooperate in any
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way with, or knowingly assist, participate in, facilitate or encourage any effort by, any Third Party that may be considering making, or has made, an Acquisition Proposal, or has agreed to
endorse an Acquisition Proposal. Stockholder shall notify Parent promptly (but in no event later than 24 hours) after receipt by Stockholder or any of Stockholder’s Subsidiaries, if any (or any of their respective Representatives), of any
Acquisition Proposal, any inquiry that would reasonably be expected to lead to an Acquisition Proposal, any request for non-public information relating to the Company or any of its Subsidiaries or for access to the business, properties, assets,
books or records of the Company or any of its Subsidiaries by any Third Party or any other indication that a Third Party is considering making an Acquisition Proposal. Stockholder shall provide such notice orally and in writing and shall identify
the Third Party making, and the material terms and conditions of, any such Acquisition Proposal, indication or request. Stockholder shall keep Parent informed, as promptly as practicable, of the status and terms of any such Acquisition Proposal,
indication or request, including the material resolved and unresolved issues related thereto and material amendments or proposed amendments as to price and other material terms thereof.
Section 4.03
. Communications
. Stockholder, and each of Stockholder’s Subsidiaries, if any, shall not, and shall cause
their respective officers, directors, employees or other Representatives, if any, not to, directly or indirectly, make any press release, public announcement or other public communication that criticizes or disparages this Agreement or the Merger
Agreement or the transactions contemplated hereby and thereby, without the prior written consent of Parent;
provided, however
, that if any disclosure otherwise prohibited by this sentence is required to be made by Applicable Law, it shall not
be a breach of this Section 4.03 to make such disclosure as long as, prior to doing so, Stockholder provides Parent with: (i) notice of the Applicable Law requiring such disclosure and the text of the disclosure that is proposed to be made
so that Parent can seek a protective order or other appropriate remedy; and (ii) a reasonable opportunity to seek such order or remedy (it being understood that nothing in clause “(i)” or “(ii)” of this sentence shall
prevent Stockholder from complying with any timing requirements required under Applicable Law). Stockholder hereby (A) consents to and authorizes the publication and disclosure by Parent and the Company of Stockholder’s identity and
holding of Shares, and the nature of Stockholder’s commitments, arrangements and understandings under this Agreement, and any other information that Parent or the Company determines to be necessary in any SEC disclosure document in connection
with the Merger or any other transactions contemplated by the Merger Agreement and (B) agrees as promptly as practicable to notify Parent and the Company of any required corrections with respect to any written information supplied by
Stockholder specifically for use in any such disclosure document.
Section 4.04
. Additional Shares
. In the event
that Stockholder acquires beneficial ownership of, or the power to vote or direct the voting of, any additional voting interest with respect to the Company, such voting interests shall, without further action of the parties, be subject to the
provisions of this Agreement, and the number of Shares set forth on the signature page hereto will be deemed amended accordingly. Stockholder shall promptly notify Parent of any such event.
Section 4.05.
Waiver of Appraisal and Dissenters’ Rights and Actions
. Stockholder hereby (i) waives and agrees not
to exercise any rights (including under Section 262 of the General Corporation Law of the State of Delaware) to demand appraisal of any Shares or rights to dissent from the Merger which may arise with respect to the Merger and (ii) agrees
not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or other Proceeding, against Parent, Merger Sub, the Company or any of their respective
successors relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the Merger, including any Proceeding (x) challenging the validity of, or seeking to enjoin the operation of, any
provision of this Agreement or (y) alleging a breach of any fiduciary duty of the Board of Directors of the Company in connection with the Merger Agreement or the transactions contemplated thereby.
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ARTICLE 5
M
ISCELLANEOUS
Section 5.01
. Other Definitional and
Interpretative Provisions.
Unless specified otherwise, in this Agreement the obligations of any party hereto consisting of more than one Person are joint and several. The words “hereof”, “herein” and “hereunder” and
words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction
or interpretation hereof. References to Articles and Sections are to Articles and Sections of this Agreement unless otherwise specified. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.
Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those
words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any Contract are to that
Contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless
otherwise specified, from and including or through and including, respectively.
Section 5.02
. Further Assurances
.
Parent and Stockholder (in its capacity as such) will each execute and deliver, or cause to be executed and delivered, all further documents and instruments as the other may reasonably request and use reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary and all things the other party may reasonably deem proper or advisable under Applicable Law, to consummate and make effective the transactions contemplated by this Agreement.
Section 5.03
. Amendments; Termination
. Any provision of this Agreement may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or in the case of a waiver, by the party against whom the waiver is to be effective. This Agreement shall terminate upon the earlier
of the Effective Time or the termination of the Merger Agreement in accordance with its terms;
provided
,
however
, that no termination of this Agreement shall relieve any party hereto from any liability for any: (i) willful breach
of any representation or warranty contained in this Agreement prior to such termination; or (ii) breach of any other provision of this Agreement prior to such termination.
Section 5.04
. Expenses
. All costs and expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
Section 5.05
. Successors and Assigns
. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and assigns;
provided
that, except as otherwise provided in Section 4.01, Stockholder may not assign, delegate or otherwise transfer any of
Stockholder’s rights or obligations under this Agreement without the prior written consent of Parent. Any assignment, delegation or transfer in violation of the foregoing shall be null and void.
Section 5.06
. Governing Law
. This Agreement shall be governed by and construed in accordance with and governed by the laws of
the State of Delaware, without regard to the conflicts of law rules of such State that would result in the application of any law other than the law of the State of Delaware.
Section 5.07
. Counterparts; Effectiveness
. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto and the Merger Agreement has become effective. Until and unless each
party has received a counterpart hereof signed by the other party hereto and the Merger Agreement has become effective, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other
oral or written agreement or other communication).
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Section 5.08
. Severability
. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the
parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.
Section 5.09
. Specific Performance
. The parties hereto
agree that irreparable damage to Parent would occur, damages would be incalculable and would be an insufficient remedy and no other adequate remedy would exist at law or in equity, in each case in the event that any provision of this Agreement were
not performed by Stockholder in accordance with the terms hereof, and that Parent shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically Stockholder’s performance of the terms and
provisions hereof, in addition to any other remedy to which Parent may be entitled at law or in equity. Stockholder hereby waives any defenses based on the adequacy of any other remedy, whether at law or in equity, that might be asserted as a bar to
the remedy of specific performance of any of the terms or provisions hereof or injunctive relief in any action brought therefor by Parent.
Section 5.10
. Capitalized Terms
. Capitalized terms used but not defined herein shall have the respective meanings set forth in the Merger Agreement.
Section 5.11.
Action in Stockholder’s Capacity Only
. Stockholder, if a director or officer of the Company, does not make
any agreement or understanding herein as a director or officer of the Company. Stockholder signs this Agreement solely in Stockholder’s capacity as a beneficial owner of the Shares and Company Compensatory Awards and nothing herein shall limit
or affect any actions taken in Stockholder’s capacity as an officer or director of the Company, including complying with or exercising such Stockholder’s fiduciary duties as a member of the Board of Directors of the Company.
Section 5.12.
Notices
. Any notices or other communications required or permitted under, or otherwise given in connection
with, this Agreement shall be in writing and shall be deemed to have been duly given (i) when delivered or sent if delivered in person or sent by facsimile transmission (provided confirmation of facsimile transmission is obtained), (ii) on
the fifth Business Day after dispatch by registered or certified mail, (iii) on the next Business Day if transmitted by national overnight courier or (iv) on the date delivered if sent by email (provided confirmation of email receipt is
obtained), in each case as follows:
if to Parent, to:
Oracle Corporation
500 Oracle Parkway
Redwood City, CA 94065
Attention:
Facsimile No.:
Email:
with a
copy to:
Weil, Gotshal & Manges LLP
201 Redwood Shores Parkway
Redwood Shores, CA 94065
Attention:
Facsimile No:
Email:
if to
Stockholder, to: the address for notice set forth on the signature page hereof
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with a copy to:
Eloqua, Inc.
1921 Gallows Road, Suite 200
Vienna, VA 22182
Attention: Chief Executive Officer
Facsimile No.:
Email:
Section 5.13.
Submission to Jurisdiction
. Each party to this Agreement hereby irrevocably and unconditionally
(i) consents to the submission to the exclusive jurisdiction of the Court of Chancery of the State of Delaware sitting in Wilmington, Delaware for any Proceedings arising out of or relating to this Agreement or the transactions contemplated
hereby, (ii) agrees not to commence any Proceeding relating thereto except in such court and in accordance with the provisions of this Agreement, (iii) agrees that service of any process, summons, notice or document by U.S. registered
mail, or otherwise in the manner provided for notices in Section 5.12 hereof, shall be effective service of process for any such Proceeding brought against it in any such court, (iv) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Proceeding in such courts and (v) agrees not to plead or claim in any court that any such Proceeding brought in any such court has been
brought in an inconvenient forum. Each of the parties hereto agrees that a final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable
Law. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Applicable Law.
Section 5.14
Waiver of Jury Trial
. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 5.15.
Rules of Construction
. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be
construed against the party drafting such agreement or document.
Section 5.16.
Waiver
. No failure on the part of
any party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. A party hereto shall not be deemed to have
waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.
Section 5.17.
No Ownership Interest.
All rights, ownership and economic benefits of and relating to the Shares and Company Compensatory Awards contemplated hereby shall remain vested in and
belong to Stockholder, and Parent shall have no authority to exercise any power or authority to direct Stockholder in the voting of any of the Shares, except as otherwise specifically provided herein, or in the performance of Stockholder’s
duties or responsibilities as a stockholder of the Company.
Section 5.18.
Entire Agreement
. This Agreement
constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter
hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year
first above written.
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OC ACQUISITION LLC
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By:
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Name:
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Title:
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STOCKHOLDER:
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By:
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Name:
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Title:
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Address for notices:
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SPOUSE OF STOCKHOLDER:
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Name:
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Class of Stock
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Shares
Beneficially
Owned
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Shares subject to
Company Stock Options
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Shares subject to
other Company
Compensatory
Awards
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Signature Page to Voting Agreement
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EXHIBIT B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ELOQUA, INC.
ARTICLE I
The name of this corporation is
E
LOQUA
,
I
NC
.
(the “Corporation”).
ARTICLE II
The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808, County of New Castle. The name of its registered agent at such address is Corporation Service Company.
ARTICLE
III
The purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized under
the General Corporation Law of Delaware.
ARTICLE IV
The aggregate number of shares that this Corporation shall have authority to issue is 100 shares of capital stock all of which shall be designated “Common Stock”, each having a par value of one
cent ($0.01).
ARTICLE V
A. The management of the business and the conduct of the affairs of the Corporation shall be vested in its Board of Directors. The number of directors that shall constitute the whole Board of Directors
shall be fixed by the Board of Directors in the manner provided in the Bylaws.
B. The Bylaws may be altered or amended, or
new Bylaws may be adopted, by the stockholders entitled to vote. The Board of Directors shall have the power to adopt, amend or repeal the Bylaws.
ARTICLE VI
The liability of the directors for monetary damages shall be
eliminated to the fullest extent under applicable law.
ARTICLE VII
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon the stockholders herein are granted subject to this reservation.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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ANNEX B
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2725 Sand Hill Road
Suite 200
Menlo Park, CA 94025
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December 19, 2012
Board of Directors
Eloqua, Inc.
1921 Gallows Road
Vienna, VA 22182
Members of the Board:
We understand that Eloqua, Inc. (the “Company”), Oak Acquisition
LLC (the “Buyer”), Oak Corporation, the ultimate parent corporation of the Buyer, and Esperanza Acquisition Corporation, a wholly owned subsidiary of the Buyer (“Merger Sub”), propose to enter into an Agreement and Plan of
Merger, substantially in the form of the draft dated December 19, 2012 (the “Merger Agreement”), which provides, among other things, for the merger (the “Merger”) of Merger Sub with and into the Company. Pursuant to the Merger,
the Company will become a wholly owned subsidiary of the Buyer, and each outstanding share of common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”), other than shares (i) held in treasury, (ii) held by any
subsidiary directly or indirectly wholly-owned by the Company, (iii) held by the Buyer, Merger Sub or any of their respective direct or indirect wholly owned subsidiaries or (iv) as to which dissenters’ rights have been perfected (collectively,
the “Excluded Shares”), will be converted into the right to receive $23.50 per share in cash (the “Merger Consideration”). The terms and conditions of the Merger are more fully set forth in the Merger Agreement.
You have asked for our opinion as to whether the Merger Consideration to be received by the holders of shares of the Company Common Stock (other than the
holders of the Excluded Shares) pursuant to the Merger Agreement is fair from a financial point of view to such holders.
For purposes of the
opinion set forth herein, we have:
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Reviewed certain publicly available financial statements and other business and financial information of the Company;
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2)
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Reviewed certain internal financial statements and other financial and operating data concerning the Company;
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3)
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Reviewed certain financial projections prepared by the management of the Company;
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4)
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Discussed the past and current operations and financial condition and the prospects of the Company with senior executives of the Company;
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5)
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Reviewed the reported prices and trading activity for the Company Common Stock;
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6)
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Compared the financial performance of the Company and the prices and trading activity of the Company Common Stock with that of certain other publicly-traded companies
comparable with the Company and their securities;
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7)
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Reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;
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8)
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Participated in discussions and negotiations among representatives of the Company and the Buyer and their legal advisors;
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9)
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Reviewed the Merger Agreement and certain related documents; and
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10)
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Performed such other analyses and reviewed such other information and considered such other factors as we have deemed appropriate.
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We have assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or
supplied or otherwise made available to us by the Company and which formed a substantial basis for this opinion. With respect to the financial projections, we have assumed that they have been reasonably prepared on bases reflecting the best
currently available estimates and judgments of the management of the Company of the future financial performance of the Company. In addition, we have assumed that the Merger will be consummated in accordance with the terms set forth in the Merger
Agreement without any material waiver, amendment or delay of any terms or conditions, and that the definitive Merger Agreement will not differ in any material respect from the draft thereof furnished to us. We have assumed that, in connection with
the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed Merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on the
contemplated benefits expected to be derived in the proposed Merger. We are not legal, tax or regulatory advisors. We are financial advisors only and have relied upon, without independent verification, the assessment of the Company and its legal,
tax or regulatory advisors with respect to legal, tax or regulatory matters. We express no opinion with respect to the fairness of the amount or nature of the compensation to any of the Company’s officers, directors or employees, or any class
of such persons, relative to the Merger Consideration to be received by the holders of shares of the Company Common Stock (other than the holders of the Excluded Shares) in the Merger. We have not made any independent valuation or appraisal of the
assets or liabilities of the Company, nor have we been furnished with any such appraisals. Our opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to us as of, the date
hereof. Events occurring after the date hereof may affect this opinion and the assumptions used in preparing it, and we do not assume any obligation to update, revise or reaffirm this opinion.
We have acted as financial advisor to the Board of Directors of the Company in connection with this transaction and will receive a fee for our services,
a substantial portion of which is contingent upon the closing of the Merger. In the two years prior to the date hereof, Morgan Stanley has provided financial advisory and financing services for the Buyer and its affiliates and has received fees in
connection with such services. Morgan Stanley may also seek to provide such services to the Buyer, the Company and their respective affiliates in the future and expects to receive fees for the rendering of these services.
Please note that Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management
businesses. Our securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial
advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect
transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of the Buyer, the Company, or other company, or any currency or commodity, that may be involved in this transaction, or any related
derivative instrument.
This opinion has been approved by a committee of Morgan Stanley investment banking and other professionals in
accordance with our customary practice. This opinion is for the information of the Board of Directors of the Company and may not be used for any other purpose without our prior written consent, except that a copy of this opinion may be included in
its entirety in any filing the Company is required to make with the Securities and
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Exchange Commission in connection with this transaction if such inclusion is required by applicable law. In addition, Morgan Stanley expresses no opinion or recommendation as to how the
stockholders of the Company should vote at any stockholders’ meeting to be held in connection with the Merger.
Based on and subject to
the foregoing, we are of the opinion on the date hereof that the Merger Consideration to be received by the holders of shares of the Company Common Stock (other than the holders of the Excluded Shares) pursuant to the Merger Agreement is fair from a
financial point of view to such holders.
Very truly yours,
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MORGAN STANLEY & CO. LLC
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By:
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Michael F. Wyatt
Managing Director
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ANNEX C
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
Appraisal rights
(a) Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection
(d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder’s shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in this section, the word “stockholder” means a holder of record of stock in a corporation; the words “stock” and “share” mean and
include what is ordinarily meant by those words; and the words “depository receipt” mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a
corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any
class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title), § 252, § 254,
§ 255, § 256, § 257, § 258, § 263 or § 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record
date fixed to determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or (ii) held of record by
more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the
surviving corporation as provided in § 251(f) of this title.
(2) Notwithstanding paragraph
(1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or
consolidation pursuant to §§ 251, 252, 254, 255, 256, 257, 258, 263 and 264 of this title to accept for such stock anything except:
(a) Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
(b) Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by more than 2,000 holders;
(c) Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b.
of this paragraph; or
(d) Any combination of the shares of stock, depository receipts and cash in lieu of
fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph.
In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 or § 267 of this title is not owned by the parent immediately prior to the
merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may
provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation
in which the corporation is a constituent corporation or the sale of all
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or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections
(d) and (e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as
follows:
(1) If a proposed merger or consolidation for which appraisal rights are provided under this section
is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received
notice in accordance with § 255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares
of the constituent corporations, and shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Each stockholder electing to demand the appraisal
of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of
each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to § 228, § 253, or § 267 of this
title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such
constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall
include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of § 114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation,
shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s
shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying
each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a
second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each
stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is
required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent
corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be
such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.
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(e) Within 120 days after the effective date of the merger or consolidation, the surviving
or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of
Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date
of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or
resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of
such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder’s written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a
voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the corporation the statement described in this subsection.
(f) Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting
corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the
stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington,
Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become
entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.
(h) After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules
specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together
with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown,
interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during
the period between the effective date of the merger and the date of payment of the judgment. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its
discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection
(f) of this section and who has submitted such stockholder’s certificates of stock to the Register in Chancery, if such is
C-3
required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the
corporation of the certificates representing such stock. The Court’s decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable
in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney’s fees and
the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
(k)
From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of
dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an
appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder’s demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of
such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such
terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand
for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had
they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.
C-4
SPECIAL MEETING OF STOCKHOLDERS OF
ELOQUA, INC.
, 2013
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, proxy statement and proxy card
are available at -
{I
nsert web address
where material will be hosted
}
Please sign, date and mail
your proxy card in the
envelope
provided as soon
as possible.
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Please detach along perforated line and mail in the envelope provided.
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00030003000000000000 8
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1 AND 2.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE
x
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FOR
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AGAINST
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ABSTAIN
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1. A proposal to adopt the Agreement and Plan of Merger, dated as of December 19, 2012, among Eloqua,
Inc., a Delaware corporation (“Eloqua”), OC Acquisition LLC (“Parent”), a Delaware limited liability company and wholly owned subsidiary of Oracle Corporation (“Oracle”), Esperanza Acquisition Corporation, a Delaware
corporation and wholly owned subsidiary of Parent, and Oracle, as it may be amended from time to time, pursuant to which Eloqua will be acquired by Parent and become an indirect wholly owned subsidiary of Oracle.
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¨
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2. A proposal to approve one or more adjournments or postponements of the special meeting, if
necessary, to solicit additional proxies if Eloqua has not obtained sufficient affirmative stockholder votes to adopt the merger agreement.
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In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Special Meeting. This proxy when properly
executed will be voted as directed herein by the undersigned stockholder.
If no direction is made, this proxy will be voted FOR Proposals 1 and 2.
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To change the address on your account, please check the box at right and indicate your new address in the address
space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
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Signature of Stockholder
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Date:
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Signature of Stockholder
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Date:
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Note:
Please sign exactly as your name or names appear on this Proxy. When shares are held
jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title
as such. If signer is a partnership, please sign in partnership name by authorized person.
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ELOQUA, INC.
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Proxy for Special Meeting of Stockholders to be held on ,
2013
Solicited on Behalf of the Board of
Directors
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The undersigned hereby appoints Joseph P. Payne and Donald E. Clarke, and each of them, with full power of substitution and power
to act alone, as proxies to vote all the shares of Common Stock of Eloqua, Inc. which the undersigned would be entitled to vote if personally present and acting at the Special Meeting of Stockholders of Eloqua, Inc., to be held
on , 2013 at , and at any adjournments or postponements thereof, as follows:
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(Continued and to be signed on the reverse side.)
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14475
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SPECIAL MEETING OF STOCKHOLDERS OF
ELOQUA, INC.
, 2013
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PROXY VOTING INSTRUCTIONS
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INTERNET
- Access “
www.voteproxy.com
” and follow the on-screen instructions. Have your proxy card available when you access the
web page.
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TELEPHONE
- Call toll-free
1-800-PROXIES
(1-800-776-9437) in the United States or
1-718-921-8500
from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call.
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COMPANY NUMBER
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ACCOUNT
NUMBER
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Vote online/phone until 11:59 PM EST the day before the meeting.
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MAIL
- Sign, date and mail your
proxy card in the envelope provided as soon as possible.
IN PERSON
-
You may vote your shares in person by attending the Special Meeting.
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NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL
:
The Notice of Meeting, proxy statement and proxy
card are available at -
{
Insert web address where material will be hosted
}
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Please detach along perforated line and mail in the envelope provided
IF
you are not voting via
telephone or the Internet.
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00030003000000000000 8
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1 AND 2.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE
x
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|
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FOR
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AGAINST
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ABSTAIN
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1. A proposal to adopt the Agreement and Plan of Merger, dated as of December 19, 2012, among Eloqua,
Inc., a Delaware corporation (“Eloqua”), OC Acquisition LLC (“Parent”), a Delaware limited liability company and wholly owned subsidiary of Oracle Corporation (“Oracle”), Esperanza Acquisition Corporation, a Delaware
corporation and wholly owned subsidiary of Parent, and Oracle, as it may be amended from time to time, pursuant to which Eloqua will be acquired by Parent and become an indirect wholly owned subsidiary of Oracle.
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¨
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¨
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¨
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2. A proposal to approve one or more adjournments or postponements of the special meeting, if
necessary, to solicit additional proxies if Eloqua has not obtained sufficient affirmative stockholder votes to adopt the merger agreement.
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¨
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¨
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¨
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In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Special Meeting. This proxy when properly
executed will be voted as directed herein by the undersigned stockholder.
If no direction is made, this proxy will be voted FOR Proposals 1 and 2.
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To change the address on your account, please check the box at right and indicate your new address in the address
space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
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¨
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Signature of Stockholder
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Date:
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Signature of Stockholder
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Date:
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Note:
n
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney,
trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized
person.
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n
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Eloqua, Inc. (MM) (NASDAQ:ELOQ)
Historical Stock Chart
From Oct 2024 to Nov 2024
Eloqua, Inc. (MM) (NASDAQ:ELOQ)
Historical Stock Chart
From Nov 2023 to Nov 2024
