PROJECTIONS ARE SHOWN TO BE IN ERROR OR CHANGE, EXCEPT AND ONLY TO THE EXTENT THAT MAY BE OTHERWISE REQUIRED BY APPLICABLE LAW.
Interests of Anaplan’s Directors and Executive Officers in the Merger
When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of stockholders generally, as more fully described below. The Board of Directors was aware of and considered these interests to the extent that they existed at the time, among other matters, in approving the Merger Agreement and the Merger and recommending that the Merger Agreement be adopted by stockholders.
Certain Assumptions
Except as otherwise specifically noted, for purposes of quantifying the potential payments and benefits described in this section, the following assumptions, as well as those described in the footnotes to the table in the section below captioned “—Golden Parachute Compensation” were used:
| • | the effective time is April 1, 2022, which is the assumed date of the effective time of the merger solely for purposes of the disclosure in this section (which we refer to as the “assumed effective time”); |
| • | the relevant price per share of Anaplan’s common stock is $65.21 per share, which is the closing price of Anaplan common stock as of the assumed effective time; and |
| • | the employment of each executive officer of Anaplan is terminated in an “involuntary termination without cause” or due to the executive officer’s resignation for “good reason” (as each such term is defined in the applicable plan), in each case, immediately following the assumed effective time. |
Treatment of Equity-Based Awards
Treatment of Stock Options in the Merger
As of the Record Date, there were 4,425,144 outstanding options to acquire Anaplan common stock of which all options were “in-the-money” (that is, with an exercise price less than the Merger Consideration) and 0 options were “out-of-the-money” (that is, with an exercise price equal to or greater than the Merger Consideration). As of the Record Date, Anaplan’s directors and executive officers held 3,047,727 “in-the-money” options. The Merger Agreement provides that Anaplan’s equity awards that are outstanding immediately prior to the Effective Time will be subject to the following treatment at the Effective Time:
Each Vested Company Stock Option outstanding to purchase shares of common stock and each Additional Vesting Company Stock Option will be cancelled and converted into the right to receive an amount in cash (without interest and subject to withholding for all required taxes) equal to the product of (1) the amount, if any, by which the Merger Consideration exceeds the exercise price per share of common stock underlying such Vested Company Stock Option or Additional Vesting Company Stock Option and (2) the total number of shares of common stock subject to such Vested Company Stock Option or Additional Vesting Company Stock Option as of immediately prior to the Effective Time. Each Unvested Company Stock Option outstanding to purchase shares of common stock, will be cancelled and converted into the right to receive an amount in cash (without interest and subject to withholding for all required taxes) equal to the product of (1) the amount, if any, by which the Merger Consideration exceeds the exercise price per share of common stock underlying such stock option; and (2) the total number of shares of common stock subject to such option as of immediately prior to the Effective Time, and subject to the optionholder’s continued service with Parent or its subsidiaries until the applicable vesting date(s), vest and be payable at the same time as such Unvested Company Stock Options would have vested pursuant to its terms (including, for the avoidance of doubt, with respect to any terms providing for acceleration of vesting). Each option with an exercise price per share equal to or greater than the Merger Consideration will be cancelled without consideration.
For any Company Performance Option, (A) the performance metrics of such Company Performance Option will be deemed achieved as of immediately prior to the Effective Time at one hundred percent (100%) of the target levels of performance and (B) shall be treated like other Company Stock Options pursuant to the preceding paragraph, it being understood that (x) such Company Performance Option shall be deemed a Vested Company Stock Option with respect to one-third (1/3) of the shares subject thereto, and (y) such Company Performance Option shall be deemed an Unvested Company Stock Option with respect to two-thirds (2/3) of the shares subject thereto (with fifty percent (50%) of such Unvested Company Stock Option to vest subject to the optionholder’s continued service with Parent or its subsidiaries on each of February 1, 2023 and February 1, 2024).
Treatment of Restricted Stock Units in the Merger
As of the Record Date, there were 8,947,507 outstanding restricted stock units (rights to receive Anaplan shares), 1,323,756 of which were held by our directors and executive officers. As of the Effective Time, each Vested Company RSU and each Additional Vesting Company RSU will be cancelled and converted into the right to receive an amount in cash (without interest and subject to withholdings for all required taxes) equal to the product of (1) the Merger Consideration and (2) the total number of shares of common stock subject to such Vested Company RSU or Additional Vesting Company RSU immediately prior to the Effective Time. Each Unvested Company RSU will be cancelled and converted into the right to receive an amount in cash (without interest and subject to withholdings for all required taxes) equal to the product of (1) the Merger Consideration and (2) the total number of shares of common stock subject to such Unvested Company RSU immediately prior to the Effective Time, and subject to the RSU holder’s continued service with Parent or its subsidiaries through the applicable vesting date(s), vest and be payable at the same time as such Unvested Company RSUs would have vested pursuant to its terms (including, for the avoidance of doubt, with respect to any terms providing for acceleration of vesting) and under the same conditions as such Unvested Company RSUs for which they were exchanged, except for terms rendered inoperative by reason of the transactions contemplated by the Merger Agreement or for such other administrative or ministerial changes as in the reasonable and good faith determination of Parent are appropriate to conform the administration of the cash amounts.
For any Company Performance RSU, (A) the performance metrics of such Company Performance RSU will be deemed achieved as of immediately prior to the Effective Time at 100% of the target levels of performance and (B) shall be treated like other Company RSUs pursuant to the preceding paragraph, it being understood that (x) such Company Performance RSU shall be deemed a Vested Company RSU with respect to one-third (1/3) of the shares subject thereto, and (y) such Company Performance RSU shall be deemed an Unvested Company RSU with respect to two-thirds (2/3) of the shares subject thereto (with fifty percent (50%) of such Unvested Company RSU to vest subject to the RSU holder’s continued service with Parent or its subsidiaries on each of February 1, 2023 and February 1, 2024).
Director Equity Awards
Non-employee members of the Board of Directors receive equity awards in consideration of their service on the Board of Directors. All such awards will vest in full upon the Effective Time and will be cancelled and paid out as described above.
Equity Interests of Anaplan’s Executive Officers and Non-Employee Directors
The following table sets forth the number of shares of common stock and the number of shares of common stock underlying equity awards that are in-the-money (at the Merger Consideration, in the case of Company Stock Options) and are currently held by each of Anaplan’s executive officers and non-employee directors, in each case that either are currently vested or that will or may vest in connection with the Merger, assuming that the Effective Time occurs on April 1, 2022. A portion of the unvested shares underlying Company Stock Options held by our officers and directors are early exercisable and therefore subject to certain rights of repurchase by
Anaplan. The table also sets forth the values of these shares and equity awards based on the Merger Consideration (minus the applicable exercise price for the in-the-money options).
| Name |
Shares Held (#) |
Shares Held ($) |
Options Held (#)(1) |
Options Held ($) |
Restricted stock units Held (#)(2) |
Restricted stock units Held ($) |
Total ($) | |||||||||||||||||||||
| Frank Calderoni |
1,134,351 | (3) | 73,971,029 | 2,576,991 | 141,159,598 | 339,075 | 22,111,081 | 237,241,708 | ||||||||||||||||||||
| Vikas Mehta |
39,427 | 2,571,035 | 0 | 0 | 238,381 | 15,544,825 | 18,115,860 | |||||||||||||||||||||
| Ana Pinczuk |
54,867 | 3,577,877 | 174,746 | 4,670,577 | 204,708 | 13,349,009 | 21,597,462 | |||||||||||||||||||||
| William Schuh |
21,690 | 1,414,405 | 0 | 0 | 202,688 | 13,217,284 | 14,631,689 | |||||||||||||||||||||
| David H. Morton, Jr. |
1,212 | (4) | 79,035 | 0 | 0 | 0 | 0 | 79,035 | ||||||||||||||||||||
| Vivie Lee |
1,173 | (5) | 76,491 | 0 | 0 | 0 | 0 | 76,491 | ||||||||||||||||||||
| Robert E. Beauchamp |
55,567 | 3,623,524 | 137,770 | 7,531,957 | 3,537 | 230,648 | 11,386,128 | |||||||||||||||||||||
| Susan L. Bostrom |
8,567 | 558,654 | 147,770 | 8,649,707 | 3,537 | 230,648 | 9,439,008 | |||||||||||||||||||||
| David Conte |
258,567 | 16,861,154 | 2,770 | 57,007 | 3,537 | 230,648 | 17,148,808 | |||||||||||||||||||||
| Allan Leinwand |
5,557 | 362,372 | 594 | 4,229 | 3,537 | 230,648 | 597,249 | |||||||||||||||||||||
| Brooke Major-Reid |
1,676 | 109,292 | 0 | 0 | 3,537 | 230,648 | 339,940 | |||||||||||||||||||||
| Sandesh Patnam |
2,122,687 | (6) | 138,420,419 | 2,770 | 57,007 | 3,537 | 230,648 | 138,708,074 | ||||||||||||||||||||
| Suresh Vasudevan |
8,757 | 571,044 | 2,974 | 63,029 | 3,537 | 230,648 | 864,720 | |||||||||||||||||||||
| Yvonne Wassenaar |
6,480 | 422,561 | 1,342 | 22,022 | 3,537 | 230,648 | 675,231 | |||||||||||||||||||||
| (1) | The directors and executive officers hold options to purchase an aggregate of 3,047,727 shares of common stock as set forth in this column. All such options are “in-the-money” and are either vested or will accelerate upon a change in control, assuming each of the executive officers will be subject to an “involuntary termination without cause” or will resign for “good reason” (any such termination or resignation, a “qualifying termination”), in each case, immediately following the assumed effective time of the change in control. The directors and executive officers hold no outstanding options to purchase Anaplan common stock that are “out-of-the-money.” |
| (2) | The amounts set forth in this column assume termination of employment in connection with the Merger and, in the aggregate, payment for 1,013,148 unvested restricted stock units held by the directors and executive officers. |
| (3) | Consists of (i) 752,892 shares of common stock held by Mr. Calderoni, (ii) 381,459 shares of common stock held by Frank Calderoni & Brenda Zawatski Living Trust U/A/D 3/11/05, of which Mr. Calderoni and his wife are trustees and beneficiaries. |
| (4) | As of March 7, 2022, based on information provided to the Company by Mr. Morton, a former executive officer. |
| (5) | As of March 11, 2022, based on information provided to the Company by Ms. Lee, a former executive officer. |
| (6) | Consists of (i) 59,283 shares of common stock by Mr. Patnam, (ii) 2,063,404 shares of common stock held by Napean Trading and Investment Company (Singapore) Pte. Ltd., an entity affiliated with Premji Invest. Mr. Patnam is affiliated with Premji Invest and as such Mr. Patnam may be deemed to have voting and investment power with respect to shares held by Napean Trading and Investment Co (Singapore) Pte. Ltd. Mr. Patnam disclaims beneficial ownership of the shares held by Napean Trading and Investment Co (Singapore) Pte. Ltd. except to the extent of any pecuniary interest therein. |
Potential Severance Payments and Benefits
Severance and Change in Control Agreements
Anaplan has entered into severance and change in control agreements (the “Post-Employment Compensation Agreements”) with certain of its executive officers, which provide for specified payments and benefits in the event of certain qualifying terminations of employment, including a qualifying termination of employment in connection with a change in control. Except as noted hereafter or in the section of this Proxy Statement captioned “Treatment of Equity-Based Awards”, no payments, benefits or acceleration of vesting of payments or benefits will be triggered solely upon the occurrence of a change in control, unless an acquirer does not assume or substitute a comparable award for an outstanding equity award or a named executive officer is subject to a qualifying termination during the change in control period beginning three (3) months before and up to twelve (12) months after a qualified change in control, or 18 months in case of our CEO (the “CiC Period”) (a so-called “double-trigger” arrangement). Notwithstanding the foregoing, any performance-based equity held by a named executive officer will be treated as provided below. Generally, in the case of the acceleration of vesting of outstanding equity awards, we use this “double-trigger” arrangement to protect against the loss of retention value following a change in control and to avoid windfalls, both of which could occur if vesting of either equity or cash-based awards accelerated automatically as a result of the transaction. In the event such executive officers is subject to a qualifying termination during a CiC Period, each such executive would be
entitled to receive a lump-sum payment equal to 12 months of such executive’s base salary, target bonus, and COBRA payments, as well as 100% acceleration of any unvested equity held at the time of termination, with any performance goals deemed achieved at the greater of 100% of target or actual performance.
Notwithstanding the foregoing and other than with respect to any outstanding performance-based equity, under the terms of his Post-Employment Compensation Agreement with us, if Mr. Calderoni remains employed through the occurrence of a change in control, then 50% of his then-unvested shares subject to his outstanding equity awards will immediately vest, and in the case of Company Stock Options become immediately exercisable, and if he remains in continuous service with us through the one-year anniversary of a change in control, then 100% of his then-unvested shares subject to such outstanding equity awards will immediately vest, and in the case of Company Stock Options become immediately exercisable. In addition, if Mr. Calderoni is terminated during the CiC Period, he would be entitled to receive a lump-sum payment equal to 18 months of such executive’s base salary, target bonus, and COBRA payments, as well as 100% acceleration of any unvested equity held at the time of termination, with any performance goals deemed achieved at the greater of 100% of target or actual performance.
With respect to the performance-based restricted stock units granted to Mr. Schuh in December 2020, the applicable award agreement provides that if Mr. Schuh is subject to a qualifying termination during the CIC Period, the award will vest in full, and the performance condition will be deemed achieved at the greater of actual performance or target achievement.
With respect to the performance-based restricted stock units granted to each of Mrs. Pinczuk and Mr. Schuh in February 2021, the applicable award agreements provide that if Mrs. Pinczuk or Mr. Schuh remains in continuous service through a change of control, a pro rata portion of their awards will vest immediately prior to the change in control, with the performance condition deemed achieved based on actual performance and the extent to which they have satisfied the service condition through such date, and an additional portion of the awards will vest on January 31, 2024, based on actual performance through the change in control, subject to Mrs. Pinczuk and Mr. Schuh remaining in continuous service through such vesting date. In addition, if such executive officer were to be subject to a qualifying termination during the CiC Period, the vesting described above for each of their performance-based awards would occur upon such termination, with the performance condition deemed achieved based on the greater of actual performance or target achievement.
With respect to the performance-based restricted stock units granted to each of Mrs. Pinczuk and Mr. Schuh in September 2021, and the performance-based restricted stock units granted to Mr. Mehta in July 2021, the applicable award agreements provide that if such executive remains in continuous service through a change of control, a portion of their awards will vest on each of the remaining quarterly installment dates, with the performance condition deemed achieved based on actual performance through the change in control, subject to such executive officer remaining in continuous service through each such vesting date. In addition, if such executive officer were to be subject to a qualifying termination during the CiC Period, the vesting described above for each of their performance-based awards would occur upon such termination, with the performance condition deemed achieved based on the greater of actual performance or target achievement. Notwithstanding the foregoing terms of Mrs. Pinczuk’s, Mr. Schuh’s, and Mr. Mehta’s performance-based equity awards, if they become eligible for more favorable vesting acceleration provisions pursuant to any other written agreement with the Company, including a severance and change in control agreement, the more favorable terms in such other agreement shall apply instead of the acceleration terms in the aforementioned performance-based equity agreements.
With respect to the performance-based restricted stock units granted to Mr. Calderoni in February 2021, the applicable award agreement provides that if Mr. Calderoni remains in continuous service through a change in control transaction, then 50% of his award, to the extent the performance condition was satisfied, will vest immediately prior to the change in control, and the remaining 50% of the award, to the extent the performance condition was satisfied, will vest if Mr. Calderoni remains in continuous service through the first anniversary of the closing of the change in control, with the performance condition deemed achieved based on actual
performance through the change in control. In addition, if Mr. Calderoni were to be subject to a qualifying termination during the CiC Period, the vesting described above would occur upon such termination.
In addition, for the aforementioned executives, to the extent either the terms provided under the Merger Agreement or the terms of his or her performance-based award agreement or other written agreement with the Company provides for more favorable treatment with respect to the achievement of a performance or vesting condition or the timing of payments in connection with or following a change in control, such more favorable terms shall apply.
Golden Parachute Compensation
In accordance with Item 402(t) of Regulation S-K, the table below sets forth the compensation that is based on or otherwise relates to the Merger that will or may become payable to each of our named executive officers in connection with the Merger. Please see the previous portions of this section for further information regarding this compensation. The amounts indicated in the table below are estimates of the amounts that would be payable assuming, solely for purposes of this table, that the Merger was consummated on April 1, 2022, and that the employment of each of the named executive officers was immediately terminated either by Anaplan without cause or as a result of the officer’s resignation with good reason. Anaplan’s executive officers will not receive pension, non-qualified deferred compensation, tax reimbursement or other benefits in connection with the Merger. Some of the amounts set forth in the table would be payable solely by virtue of the consummation of the Merger. In addition to the assumptions regarding the consummation date of the Merger and the termination of employment, these estimates are based on certain other assumptions that are described in the footnotes accompanying the table below. Accordingly, the ultimate values to be received by a named executive officer in connection with the Merger may differ from the amounts set forth below.
The amounts set forth below are estimates of amounts that would be payable to the named executive officers using the assumptions described above under the section captioned “The Merger—Interests of Anaplan’s Directors and Executive Officers in the Merger—Certain Assumptions.” These estimates are based on multiple assumptions that may or may not actually occur, including assumptions described in this Proxy Statement. All dollar amounts set forth below have been rounded. Some of the assumptions are based on information not currently available, and as a result the actual amounts, if any, to be received by a named executive officer may differ in material respects.
Golden Parachute Compensation
| Name | Cash ($)(1) | Equity ($)(2) | Perquisites/ Benefits ($)(3) |
Total | ||||||||||||
| Frank Calderoni |
$ | 1,350,000 | $ | 30,049,145 | $ | 55,175 | $ | 31,454,320 | ||||||||
| Vikas Mehta |
$ | 700,000 | $ | 15,544,825 | $ | 9,436 | $ | 16,254,261 | ||||||||
| Ana Pinczuk |
$ | 700,000 | $ | 15,189,656 | $ | 11,979 | $ | 15,901,634 | ||||||||
| William Schuh |
$ | 800,000 | $ | 13,217,284 | $ | 36,783 | $ | 14,054,068 | ||||||||
| David H Morton, Jr. (4) |
— | — | — | — | ||||||||||||
| Vivie Lee (4) |
— | — | — | — | ||||||||||||
| (1) | For Mr. Calderoni, this amount represents a single lump-sum payment equal to 18 months of his base salary and 150% achievement of his 2021 target bonus, payable by the Company. For Mr. Mehta, Mrs. Pinczuk and Mr. Schuh, this amount represents a single lump-sum payment equal to 12 months of their base salary and 100% achievement of their target bonus for 2021, payable by the Company. Neither Mr. Morton nor Ms. Lee would be entitled to receive any severance benefits as the result of a termination of employment in connection with the Merger due to their earlier terminations of employment with Anaplan. |
| (2) | For all named executive officers other than Mr. Morton and Ms. Lee, this amount includes the full acceleration and cancellation of all unvested equity, including Company Stock Options and Company RSUs |
| with the acceleration deemed at 100% of the target level for any Company Performance RSUs for which performance would not yet be determined, assuming that the Merger was consummated on April 1, 2022. |
| (3) | Represents a single lump-sum payment of 18 months of continued health benefits, for Mr. Calderoni, and a single lump-sum payment of 12 months of continued health benefits for Mr. Mehta, Mrs. Pinczuk and Mr. Schuh, each payable by the Company. |
| (4) | Mr. Morton and Ms. Lee ceased providing services to Anaplan in July 2021 and October 2021, respectively. As such, they are not eligible for any additional compensation in connection with the Merger; accordingly, there are no amounts to report for them due to their earlier terminations of employment with Anaplan. |
Indemnification and Insurance of Directors and Officers
From and after the Effective Time, Parent shall cause the Surviving Corporation to, fulfill and honor in all respects the obligations of Anaplan pursuant to any indemnification, exculpation or advancement of expenses or similar agreement by Anaplan or any of its subsidiaries in favor of any Indemnified Person (as defined below) (the “Indemnification Agreements”) (and all other indemnification agreements of Anaplan that are on terms substantially similar to the Indemnification Agreements) and any indemnification, exculpation or advancement of expenses provisions under the certificate of incorporation or bylaws of Anaplan (or comparable organizational documents of its subsidiaries) in effect as of the date of the Merger Agreement; provided, that such obligations shall be subject to any limitation imposed from time to time under applicable law.
Prior to the Effective Time, Anaplan shall, and for six (6) years after the Effective Time, Parent shall, and shall cause the Surviving Corporation to, provide officers’ and directors’ liability, fiduciary liability and similar insurance (collectively, “D&O Insurance”) in respect of acts or omissions occurring prior to the Effective Time covering each person who is or was prior to the Effective Time an officer or director of Anaplan or its subsidiaries and each person who is now or was prior to the Effective Time an officer or director of Anaplan or its subsidiaries who served as a fiduciary under or with respect to any employee benefit plan of Anaplan or its subsidiaries (each an “Indemnified Person”) covered as of the date of the Merger Agreement by Anaplan’s D&O Insurance policies on terms with respect to coverage and amount no less favorable than those of such policy in effect on the date of the Merger Agreement as well as covering claims brought against each Indemnified Person under ERISA; provided, that, the Surviving Corporation shall not be obligated to pay annual premiums in the aggregate in excess of 400% of the amount per annum Anaplan paid in its last full fiscal year (provided, that if the annual premium of such insurance coverage exceeds such amount, Parent or the Surviving Corporation shall be obligated to obtain the most advantageous policies available for an annual premium equal to such amount). In furtherance of and subject to the foregoing, prior to the Effective Time, Anaplan shall purchase a “tail” directors’ and officers’ liability insurance policy, covering the same persons and providing the same terms with respect to coverage and premium amount as aforesaid, and that by its terms shall provide coverage until the sixth annual anniversary of the Effective Time, and upon the purchase of such insurance Parent’s and the Surviving Corporation’s obligations shall be deemed satisfied for so long as such insurance is in full force and effect and covers the matters that would otherwise be covered pursuant to the foregoing; Parent and the Surviving Corporation shall not cancel any D&O Insurance (Including any “tail” directors’ and officers’ liability insurance policy) during its term.
The rights of each Indemnified Person set forth above shall survive consummation of the Merger and are intended to benefit, and shall be enforceable by, each Indemnified Person, his or her heirs and his or her representatives, and are in addition to, and not in substitution for, any other rights to which each Indemnified Person is entitled, whether pursuant to law, contract or otherwise. The obligations of Parent and the Surviving Corporation shall not be terminated or modified in such a manner as to adversely affect any Indemnified Person to whom the foregoing provisions apply without the consent of such affected Indemnified Person. Parent shall cause the Surviving Corporation to pay all expenses, including reasonable attorneys’ fees, that may be incurred by an Indemnified Person in enforcing the indemnity and other obligations provided pursuant to the foregoing provisions.
If (1) Parent, the Surviving Corporation or any of its successors or assigns (x) consolidates with or merges into any other person and shall not be the continuing or the surviving corporation or entity of such consolidation or merger, or (y) transfers or conveys all or substantially all of its properties and assets to any person or (2) Parent or any of its successors or assigns dissolves the Surviving Corporation, 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 above.
Executive Officers Following the Merger
As of the date of this Proxy Statement, none of our executive officers has entered into any new agreement or arrangement with Anaplan, Thoma Bravo or any of their affiliates regarding employment with, or the right to purchase or participate in the equity of, the Surviving Corporation or one or more of its affiliates, and under the Merger Agreement, any such agreement would require the approval of the Company. The Merger is not conditioned upon any Anaplan executive officer agreeing to remain with the Surviving Corporation.
We presently anticipate that the total funds needed to complete the Merger and the related transactions will be approximately $10.7 billion, which will be funded via equity and debt financing described below; provided that if any portion of the debt financing becomes unavailable, such unavailability will not affect Sponsor’s obligations under the Equity Commitment Letter described below. This amount includes funds needed to pay (1) the Merger Consideration payable for all shares of Anaplan common stock in connection with the transactions contemplated by the Merger Agreement, (2) any other amounts required to be paid at the closing in connection with the consummation of the transactions contemplated by the Merger Agreement (including any and all payments with respect to Company Stock Options or Company RSUs payable under the Merger Agreement at closing), and (3) all associated fees, costs and expenses in connection with the Merger and the other transactions contemplated by the Merger Agreement, including the Equity Financing, in each case, to the extent required to be paid on the closing date. Parent and Merger Sub have represented to Anaplan in the Merger Agreement that, when taken together with Anaplan’s cash on hand, the aggregate proceeds from the Equity Financing are sufficient to pay the fees and expenses required to be paid at the closing of the Merger by them under the Merger Agreement.
Parent and Merger Sub have obtained a commitment from Sponsor to provide equity pursuant to the terms of the Equity Commitment Letter. In connection with the Merger Agreement, Parent and Merger Sub have delivered to Anaplan a copy of the Equity Commitment Letter. Notwithstanding anything in the Merger Agreement to the contrary, in no event shall the receipt or availability of any funds or financing (including the financing contemplated by the Equity Commitment Letter) by or to Parent or any of its affiliates or any other financing transaction be a condition to any of the obligations of Parent or Merger Sub under the Merger Agreement.
Parent has separately obtained debt financing commitments and does not presently anticipate that the entire $10,500,000,000 equity commitment under the Equity Commitment Letter will be funded in equity in connection with the closing.
Equity Financing
Pursuant to the Equity Commitment Letter, Sponsor has committed to contribute or cause to be contributed to Parent at the closing of the Merger certain equity financing for the purpose of funding the Merger Consideration payable for all shares of Anaplan common stock in connection with the transactions contemplated by the Merger Agreement, any other amounts required to be paid at the closing in connection with the consummation of the transactions contemplated by the Merger Agreement (including any and all payments with respect to Company Stock Options or Company RSUs payable under the Merger Agreement at closing) and,
together with the Company’s cash on hand as of the closing date, all associated fees, costs and expenses in connection with the Merger and the other transactions contemplated by the Merger Agreement, including that certain equity financing, in each case, to the extent required to be paid on the closing date (collectively, the “Required Amount”). The obligations of Thoma Bravo to provide the equity financing under the Equity Commitment Letter are subject to a number of conditions, including, but not limited to: (i) the satisfaction or written waiver by the parties to the Merger Agreement, as applicable, of each of the conditions to the parties’ obligations to consummate the transactions contemplated by the Merger Agreement set forth in Section 7.1 and 7.2 of the Merger Agreement (other than any such conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction of such conditions prior to or substantially concurrent with the closing), and (ii) the substantially concurrent consummation of the Merger in accordance with the terms of the Merger Agreement. We refer to the equity financing described in the preceding sentence as the “Equity Financing.”
The obligation of Thoma Bravo to fund the equity commitment will automatically and immediately terminate upon the earliest to occur of: (i) the consummation of the closing of the Merger and the payment of the Merger Consideration and the payment or provision for the other Required Amount in accordance with the Merger Agreement, (ii) the valid termination of the Merger Agreement in accordance with its terms, and (iii) three (3) months following the Outside Date, unless prior to the end of such period the Company shall have, pursuant to the Equity Commitment Letter, commenced a court proceeding against Parent or Merger Sub seeking specific performance to cause the Merger to be consummated, in which case the Equity Commitment Letter and such funding obligation shall remain in full force and effect until such funding obligation is fully performed according to a final and non-appealable order of a chosen court or there is a final and non-appealable order of a chosen court to the effect that no such funding is required.
Anaplan is an express third-party beneficiary of the Equity Commitment Letter solely with respect to enforcing Parent’s right to cause the commitment under the Equity Commitment Letter by Thoma Bravo to be funded to Parent in accordance with the Equity Commitment Letter, subject to (i) the limitations and conditions set forth in the Equity Commitment Letter and (ii) the terms and conditions of the Merger Agreement.
Pursuant to the Guaranty, Sponsor has agreed to guarantee the due, punctual and complete payment and performance of: (1) the aggregate amount of the Parent Termination Fee (as defined in the section of this Proxy Statement captioned “The Merger Agreement—Termination Fee.”) solely if and when any of the Parent Termination Fee is payable pursuant to the Merger Agreement; (2) any enforcement expenses due by Parent pursuant to legal proceedings as a result of certain defaults under the Merger Agreement; (3) the reimbursement obligations of Parent pursuant to the indemnification obligations to Anaplan and its representatives in connection with debt financing; and (4) any and all damages, losses, costs and expenses resulting from Parent or Merger Sub’s willful and material breach of the Merger Agreement, subject to certain limitations. We refer to the obligations set forth in the preceding sentence as the “Guaranteed Obligations.” The obligations of Thoma Bravo under the Guaranty are subject to an aggregate cap equal to $591,245,000.
Subject to specified exceptions, the Limited Guaranty will terminate upon the earliest of:
| • | funding of the commitment as set forth in the Equity Commitment Letter and the concurrent or subsequent closing; |
| • | (1) the payment and full discharge of any reimbursement obligations which Anaplan has requested reimbursement for within 90 days following the valid termination of the Merger Agreement (in a situation where Parent does not have liability for any of the other Guaranteed Obligations following such termination) and (2) the valid termination of the Merger Agreement in accordance with its terms, other than a termination pursuant to which Anaplan would be entitled to the Parent Termination Fee pursuant to Section 8.3(b) of the Merger Agreement or Parent has ongoing liability with respect to any of the other Guaranteed Obligations, in which case the Limited Guaranty shall terminate 90 days after |
