This Section describes the material provisions of the Merger Agreement. The description in this summary section and elsewhere in this Proxy Statement do not purport to be complete and are qualified in their entirety by reference to the complete text of the Merger Agreement, a copy of which is attached to this Proxy Statement as Annex A and incorporated into this Proxy Statement by reference. We encourage you to read the Merger Agreement carefully and in its entirety because this summary may not contain all the information about the Merger Agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this Proxy Statement. This section is not intended to provide you with any factual information about us. That information can be found elsewhere in this Proxy Statement and in the public filings we make with the SEC, as described in the section captioned “Where You Can Find More Information.” Capitalized terms used in this section but not defined in this Proxy Statement have the meanings ascribed to them in the Merger Agreement.
Explanatory Note Regarding the Merger Agreement
The representations, warranties, covenants and agreements described below and included in the Merger Agreement (1) were made only for purposes of the Merger Agreement and as of specific dates; (2) were made solely for the benefit of the parties to the Merger Agreement; and (3) may be subject to important qualifications, limitations and supplemental information agreed to by Anaplan, Parent and Merger Sub in connection with negotiating the terms of the Merger Agreement. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to reports and documents filed with the SEC and in some cases were qualified by confidential matters disclosed to Parent and Merger Sub by Anaplan in connection with the Merger Agreement. In addition, the representations and warranties may have been included in the Merger Agreement for the purpose of allocating contractual risk among Anaplan, Parent and Merger Sub rather than to establish matters as facts, and may be subject to standards of materiality applicable to such parties that differ from those applicable to investors. Stockholders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of Anaplan, Parent or Merger Sub or any of their respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement. In addition, you should not rely on the covenants in the Merger Agreement as actual limitations on the respective businesses of Anaplan, Parent and Merger Sub, because the parties may take certain actions that are either expressly permitted in the confidential disclosure letter to the Merger Agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. The Merger Agreement is described below, and included as Annex A, only to provide you with information regarding its terms and conditions, and not to provide any other factual information regarding Anaplan, Parent, Merger Sub or their respective businesses. Accordingly, the representations, warranties, covenants and other agreements in the Merger Agreement should not be read alone, and you should read the information provided elsewhere in this document and in our filings with the SEC regarding Anaplan and our business.
Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws
The Merger Agreement provides that, subject to the terms and conditions, set forth in the Merger Agreement, and in accordance with the DGCL, at the Effective Time, (1) Merger Sub will be merged with and into Anaplan, with Anaplan continuing as a wholly owned subsidiary of Parent following the Merger and (2) the separate corporate existence of Merger Sub will cease.
Effective as of, and immediately following, the Effective Time, the board of directors of the Surviving Corporation will consist of the directors of Merger Sub, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until the earlier of their death, resignation or removal or until their successors are duly elected and qualified, as the case may be. From and after the Effective Time, the
officers of Anaplan prior to the Effective Time will be the officers of the Surviving Corporation, until the earlier of their death, resignation or removal or until their successors have been duly elected or appointed and qualified, as the case may be.
At the Effective Time, the certificate of incorporation of Anaplan as the Surviving Corporation will be amended to be identical to the certificate set forth in Exhibit A to the Merger Agreement until changed or amended in accordance with applicable law and the applicable provisions of such certificate, and the bylaws of the Surviving Corporation will be amended and restated to conform to the bylaws of Merger Sub.
Following the completion of the Merger, Anaplan common stock will be delisted from NYSE and deregistered under the Exchange Act and will cease to be publicly traded.
The closing of the transactions contemplated by the Merger Agreement will take place no later than the third (3rd) business day following the satisfaction or (to the extent permitted by law) waiver of all conditions to closing of the transactions contemplated by the Merger Agreement (described below under the section captioned “The Merger Agreement—Conditions to the Closing of the Merger”) (other than those conditions to be satisfied at the closing of the transactions contemplated by the Merger Agreement) or such other time agreed to in writing by Parent and Anaplan. The Merger will become effective upon the filing of the certificate of merger, or at such later time as is agreed by the parties and specified in the certificate of merger.
Common Stock
At the Effective Time, each outstanding share of common stock (other than shares (1) owned by Parent or Merger Sub or any of their respective wholly owned subsidiaries; (2) held by Anaplan as treasury stock; and (3) stockholders who are entitled to and who properly exercise appraisal rights under the DGCL) will be converted into the right to receive the Merger Consideration (which is $66.00 per share, less any applicable withholding taxes). All shares converted into the right to receive the Merger Consideration will automatically be cancelled at the Effective Time. The stockholders exercising appraisal rights will be entitled to receive payment of the appraised value provided under the DGCL as described under the section captioned “Appraisal Rights.”
Outstanding Equity Awards
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, except as otherwise expressly agreed in writing prior to the Effective Time by Parent and the holder of such equity award or as contemplated by the Disclosure Schedule:
| • | Options. At the Effective Time, each outstanding Company Stock Option that is outstanding as of the Effective Time, whether or not vested or exercisable, including any Company Stock Options that become vested immediately prior to the Effective Time, and each Company Stock Option that would have vested according to its terms on the date of the Merger agreement, on or prior to January 31, 2023, 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 Company Stock Option; and (2) the total number of shares of common stock subject to such Company Stock Option as of immediately prior to the Effective Time. The cash right with respect to each Unvested Company Stock Option will be subject to the same continuous service-based vesting requirement that otherwise applied to the Unvested Company Stock Option. Each Company Stock Option with an exercise price per share equal to or greater than the Merger Consideration will be cancelled without consideration. |
| • | Performance Options. For any Company Performance Options that are outstanding as of the Effective Time, (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). |
| • | Restricted Stock Units. Each Company RSU that is outstanding as of the Effective Time, whether or not vested, including any Company RSUs that become vested immediately prior to the Effective Time, and each Company RSU that would have vested according to their terms as in effect on the date of the Merger Agreement, on or prior to January 31, 2023, 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 Company RSU immediately prior to the Effective Time. The cash right with respect to each Unvested Company RSU will be subject to the same continuous service-based vesting requirement that otherwise applied to the Unvested Company RSU, and will be payable at the same time as such Unvested Company RSUs would have vested pursuant to its terms. |
| • | Company Performance RSU. For any Company Performance RSUs that are outstanding as of the Effective Time, (A) the performance metrics of such Company Performance RSU 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 RSUs pursuant to the preceding paragraph, it being understood that (x) such Company Performance RSUs 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). |
| • | ESPP. Prior to the Effective Time, Anaplan shall take all actions necessary such that the current offering period in progress as of the date of the Merger Agreement shall be the final offering period under the Company 2018 Employee Stock Purchase Plan (the “Company ESPP”). If such offering period has not ended prior to the Effective Time, then, prior to the Effective Time, Anaplan (x) shall take all actions necessary to determine a date no later than the Effective Time to be the last day of such offering period and (y) shall make other pro rata adjustments necessary to reflect the shortened and final offering period but otherwise treating the shortened and final offering period as a fully effective and completed offering period for all purposes under the Company ESPP. In addition, effective as of the date of the Merger Agreement, Anaplan shall have taken all actions necessary such that (x) no new participant shall be permitted to join the current offering period in progress under the Company ESPP and (y) no participant in the Company ESPP with respect to the current offering period shall be permitted to increase his or her elections with respect to the current offering period (including making any non-payroll contributions). Unless it has earlier terminated, Anaplan shall take all actions necessary so that the Company ESPP shall terminate immediately prior to and effective as of the Effective Time. All amounts withheld by the Company on behalf of the participants in the Company ESPP that have not been used to purchase Anaplan common stock at or prior to the Effective Time will be returned to the participants without interest pursuant to the terms of the Company ESPP. |
Exchange and Payment Procedures
On the closing date, Parent will deposit or cause to be deposited with the paying agent cash constituting an amount equal to the aggregate Merger Consideration to stockholders (but not including any merger consideration in respect of any dissenting shares).
Promptly after the Effective Time, Parent will cause the paying agent to mail to each holder of record of Anaplan common stock as of immediately prior to the Effective Time whose shares were converted into the right to receive Merger Consideration a letter of transmittal together with instructions. Upon receipt of (i) in the case of shares of Anaplan common stock represented by a stock certificate, a surrendered certificate or certificates in respect of such shares together with the signed letter of transmittal or (ii) in the case of shares of Anaplan common stock held in book-entry form, the receipt of an “agent’s message” by the paying agent, and in each case, together with such other documents as may be reasonably required by the paying agent, the holder of such shares will be entitled to receive in exchange the Merger Consideration without interest. The amount of any Merger Consideration paid to the stockholders may be reduced by any applicable withholding taxes.
If any cash deposited with the paying agent remains undistributed to holders of Anaplan common stock six (6) months after the Effective Time, such cash (including any interest received) will be delivered to Parent or one of its affiliates upon demand, and any holder of Anaplan common stock who has not complied with the exchange procedures in the Merger Agreement will look only to the Surviving Corporation and Parent for payment of its claim for the Merger Consideration, without any interest.
If any stock certificate is lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such stock certificate to be lost, stolen or destroyed (and if required by Parent, the posting of the person of a bond, in a reasonable amount as Parent may direct, as indemnity against any claim that may be made against it with respect to the stock certificate), the paying agent will, in exchange for the lost, stolen or destroyed stock certificate, pay the Merger Consideration deliverable pursuant to the Merger Agreement.
Representations and Warranties
The Merger Agreement contains representations and warranties of Anaplan, Parent and Merger Sub.
Anaplan
Certain of the representations and warranties in the Merger Agreement made by Anaplan are qualified as to “materiality” or “Material Adverse Effect.” For purposes of the Merger Agreement, “Material Adverse Effect” means any event, occurrence, condition, circumstance, development, state of facts, change, effect (each an “Effect”), individually or when taken together with all other Effects, that is materially adverse to, or has had a material adverse effect on the business, financial condition, operations or results of operations of Anaplan and its subsidiaries, taken as a whole; provided, that none of the following Effects shall be deemed either alone or in combination to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Effect:
| (i) | changes in the industry in which Anaplan operates; |
| (ii) | changes in the general economic, business, regulatory, legislative or political conditions within the U.S. or other jurisdictions in the world; |
| (iii) | general changes in the economy or securities, credit, financial or other capital markets of the U.S. or any other region outside of the U.S. (including changes generally in prevailing interest rates, currency exchange rates, credit markets and price levels, trading volumes or suspension of trading in securities on any securities exchange or over-the-counter market); |
| (iv) | the availability or cost of equity, debt or other financing to Parent or Merger Sub; |
| (v) | earthquakes, fires, floods, hurricanes, tornadoes, natural disasters, or similar catastrophes, acts of God or other comparable events, pandemics or epidemics, including COVID-19, or acts of terrorism, cyberterrorism, war, civil unrest, civil disobedience, sabotage, cybercrime, national or international calamity, military action, outbreak of hostilities, declaration of a national emergency or any other similar event, or any change, escalation or worsening thereof; |
| (vi) | any change in generally accepted accounting principles or any change in any applicable law (or interpretation or enforcement thereof); |
| (vii) | any Effect, on the relationships (contractual or otherwise) with customers, suppliers, vendors, licensors, business partners, employees or contractors of Anaplan and its subsidiaries, as a result of the execution, delivery or performance of the Merger Agreement or the announcement or pendency or consummation of the transactions contemplated by the Merger Agreement (provided that this clause does not apply to the representations and warranties in the Merger Agreement that expressly address consequences resulting from the execution of the Merger Agreement or the pendency or consummation of the transactions contemplated by the Merger Agreement); |
| (viii) | any decline in the market price, or change in price or trading volume, of the capital stock of Anaplan or any failure to meet internal or published projections, forecasts or revenue or earning predictions for any period or any change in the credit rating of Anaplan or any of its securities (provided that the underlying causes of such decline, change or failure, may be considered in determining whether there was a Material Adverse Effect to the extent not otherwise excluded by the definition thereof); |
| (ix) | the compliance by any party with the terms of the Merger Agreement, including any action expressly required to be taken or refrained from being taken pursuant to or in accordance with the Merger Agreement, including the failure of Anaplan to take any action that Anaplan is specifically prohibited by the terms of the Merger Agreement from taking to the extent Parent or Merger Sub fails to give its consent thereto after a written request therefor pursuant to the interim operating covenants set forth in Section 5.1 of the Merger Agreement; |
| (x) | any actions taken, or failure to take any action after the date of the Merger Agreement, in each case, to which Parent or Merger Sub has expressly approved, consented or requested or that is required or prohibited by the Merger Agreement in writing; |
| (xi) | any stockholder class action litigation, derivative or similar litigation arising out of or in connection with or relating to the Merger Agreement and the transactions contemplated thereby, including allegations of a breach of fiduciary duty or misrepresentation in public disclosure or any demand, action, claim or proceeding for appraisal of any shares of Anaplan common stock pursuant to the DGCL in connection with the Merger Agreement and the transactions contemplated thereby; |
| (xii) | the identity of, or any facts or circumstances relating to, Parent, Merger Sub or their respective affiliates; |
| (xiii) | any matter set forth in the Disclosure Schedule of the Company accompanying the Merger Agreement; and |
| (xiv) | any COVID-19 measures promulgated by a governmental authority. |
However, an Effect described in any of clauses (i)-(iii), (v), (vi) and (xiv) above may be taken into account to the extent Anaplan and its subsidiaries are materially disproportionately affected thereby relative to their peers in the same industries in which they operate (in which case the incremental materially disproportionate impact or impacts may be taken into account in determining whether there has been a Material Adverse Effect) (provided that in the case of clause (v), such comparison shall be limited to such industry peers located in the same geographic area as the applicable effect and with similar scale of operations as Anaplan and its subsidiaries).
In the Merger Agreement, Anaplan has made customary representations and warranties to Parent and Merger Sub that are subject, in some cases, to specified exceptions and qualifications contained in the Merger
Agreement or attached confidential Disclosure Schedule (the “Disclosure Schedule”). These representations and warranties relate to, among other things:
| • | due organization, valid existence, good standing and authority and qualification to conduct business with respect to Anaplan and its subsidiaries; |
| • | compliance with the organizational documents of Anaplan and its subsidiaries; |
| • | the capital structure of Anaplan and Anaplan’s ownership of its subsidiaries; |
| • | Anaplan’s corporate power and authority to enter into and perform the Merger Agreement, and the enforceability of the Merger Agreement; |
| • | the absence of conflicts with laws, Anaplan’s organizational documents and Anaplan’s material contracts as a result of the Merger; |
| • | required consents and regulatory filings in connection with the Merger Agreement; |
| • | possession of required governmental permits and compliance with applicable laws; |
| • | the accuracy of Anaplan’s SEC filings and financial statements and the absence of certain specified undisclosed liabilities; |
| • | Anaplan’s internal controls and disclosure controls and procedures; |
| • | the absence of any Material Adverse Effect since January 31, 2021; |
| • | the conduct of the business of Anaplan and its subsidiaries in the ordinary course of business in all material respects since the date of the Company Balance Sheet; |
| • | litigation and investigation matters; |
| • | employee benefit plans; |
| • | labor and employment matters; |
| • | properties and leases; |
| • | intellectual property matters; |
| • | tax matters; |
| • | environmental matters; |
| • | the existence, status and enforceability of specified categories of Anaplan’s material contracts; |
| • | insurance matters; |
| • | compliance with anti-corruption and anti-money laundering laws; |
| • | privacy and data protection matters; |
| • | top customers and suppliers; |
| • | compliance with export controls laws and the economic sanctions laws; |
| • | related party transactions; |
| • | the inapplicability of anti-takeover statutes; |
| • | payment of fees to brokers, investment bankers or other advisors in connection with the Merger Agreement; |
| • | receipt of Goldman Sachs’ fairness opinion (the “Goldman Fairness Opinion”); and |
| • | receipt of Qatalyst Partners’ fairness opinion (the “Qatalyst Fairness Opinion”). |
Parent and Merger Sub
In the Merger Agreement, Parent and Merger Sub have made customary representations and warranties to Anaplan that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:
| • | due organization, valid existence, good standing and authority and qualification to conduct business with respect to Parent and Merger Sub; |
| • | Parent’s and Merger Sub’s corporate power and authority to enter into and perform the Merger Agreement and the enforceability of the Merger Agreement; |
| • | the absence of conflicts with laws, Parent’s or Merger Sub’s organizational documents and Parent’s or Merger Sub’s contracts as a result of the Merger; |
| • | required consents and regulatory filings in connection with the Merger Agreement; |
| • | matters with respect to Parent’s financing (as more fully described below under “Financing Efforts”) and sufficiency of funds; |
| • | the absence of litigation; |
| • | the ownership and capital structure of Merger Sub; |
| • | Parent’s and Merger Sub’s lack of any ownership interest in Anaplan; |
| • | enforceability of the Limited Guaranty provided by Sponsor; |
| • | the absence of any fee or commission to broker, finder or investment banker; |
| • | absence of contracts, undertakings, commitments, agreements, obligations or understandings between Parent or Merger Sub, Thoma Bravo or any of their affiliates, on the one hand, and any beneficial owner of five percent (5%) or more of the outstanding shares of Anaplan common stock or any member of the Company’s management or the Anaplan Board, on the other hand; and |
| • | Parent’s solvency following the closing. |
None of the representations and warranties contained in the Merger Agreement survives the consummation of the Merger.
Conduct of Business Pending the Merger
The Merger Agreement provides that, except as (v) contemplated or permitted by the Merger Agreement, (w) as required by applicable laws or any governmental authority (x) with the prior written approval of Parent or Merger Sub (which shall not be unreasonably withheld, delayed or conditioned), (y) to the extent necessary to comply with the express obligations set forth in any material contract of Anaplan in effect on the date of the Merger Agreement, or (z) as set forth in Section 5.1 of the Disclosure Schedule, Anaplan shall, and shall cause each of its subsidiaries to, (i) conduct its business in the ordinary course consistent with past practice (except as otherwise required by the Merger Agreement or by applicable COVID-19 measures promulgated by a governmental authority or such reasonable actions after notice has been provided to Parent or Parent’s counsel as may be taken in response to sanctions imposed in connection with the current dispute between the Russian Federation and Ukraine), and (ii) use its commercially reasonable efforts to preserve business organizations of Anaplan and each of its subsidiaries intact and to maintain existing relationships and goodwill with customers, suppliers, and other persons with whom Anaplan or its subsidiaries has material business relationships.
In addition, from the date of the Merger Agreement until the earlier of (1) the Effective Time or (2) termination of the Merger Agreement, except (v) as contemplated or permitted by the Merger Agreement or the Disclosure Schedule, (w) as required by applicable law or any governmental authority or such reasonable
actions after notice has been provided to Parent or Parent’s counsel as may be taken in response to sanctions imposed in connection with the current dispute between the Russian Federation and Ukraine, (x) with the prior written approval of Parent or Merger Sub (which shall not be unreasonably withheld, delayed or conditioned), (y) to the extent necessary to comply with the express obligations set forth in any material contracts of Anaplan in effect on the date of the Merger Agreement, or (z) as set forth in Section 5.1 of the Disclosure Schedule, Anaplan will not and will not permit any of its subsidiaries to, directly or indirectly:
| • | amend or otherwise change its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws or equivalent organizational documents; |
| • | issue, sell, pledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any Company securities, except (A) for the issuance of shares of Anaplan common stock pursuant to exercises of the Company Stock Options or vesting of Company RSUs outstanding on the date of the Merger Agreement and any sales by the Company of shares of Anaplan common stock in connection with tax withholdings and exercise price settlements upon the exercise of Company Stock Options or vesting of Company RSUs (in each case, in accordance with the terms of the Company stock plans and applicable award agreements thereunder as in effect on the date of the Merger Agreement), (B) for any permitted liens, and (C) for in transactions solely among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries; transfer, lease, sell, pledge, license, dispose of, abandon, allow to lapse, encumber, guarantee or exchange any assets, tangible or intangible (including any Company intellectual property) or properties of Anaplan or any of its subsidiaries, except (i) for the transfer, lease, sale, license or disposal of assets or properties with a fair market value not in excess of $10,000,000 individually or $25,000,000 in the aggregate, (ii) for licenses that are permitted liens, (iii) in transactions solely among Anaplan and its wholly owned subsidiaries or among Anaplan’s wholly owned subsidiaries, (iv) the acquisition, assignment or abandonment of immaterial intellectual property in connection with the exercise of the reasonable business judgment of Anaplan in the ordinary course of business, (v) the abandonment of trade secrets and intellectual property in the ordinary course of business and to the extent that not economically desirable to maintain for the conduct of the business of Anaplan, or (vi) acquisitions of inventory, raw materials and other property or services in the ordinary course of business; |
| • | declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its, or any of its subsidiaries’ capital stock (other than dividends or distributions made by a subsidiary of Anaplan to Anaplan or another subsidiary); |
| • | reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the capital stock of the Company, except (i) in accordance with agreements evidencing Company Stock Options or Company RSUs outstanding as of the date of the Merger Agreement or (ii) tax withholdings and exercise price settlements upon the exercise of Company Stock Options or vesting of Company RSUs outstanding as of the date of the Merger Agreement; |
| • | acquire, directly or indirectly (including by merger, consolidation, or acquisition of stock or assets or any other business combination), any corporation, partnership, other business organization or any of its divisions thereof or any other business, or any equity interest in any person; |
| • | incur any indebtedness or issue any debt securities, or assume, guarantee or endorse, or otherwise become responsible for (contingently or otherwise), the obligations of any person, other than (i) draw downs on Anaplan’s credit facility in the ordinary course of business; (ii) indebtedness solely among Anaplan and its wholly owned subsidiaries or among Anaplan’s wholly owned subsidiaries, (iii) guarantees or credit support provided by Anaplan or any of its subsidiaries for indebtedness of Anaplan or any of its subsidiaries, (iv) indebtedness incurred pursuant to agreements in effect prior to the execution of the Merger Agreement and (v) indebtedness in an aggregate principal amount outstanding at any time incurred by Anaplan or any of its subsidiaries that does not exceed $25,000,000; |
| • | make any loans, advances or capital contributions to any person, except for (i) employee loans or advances for business expenses and extended payment terms for customers, in each case subject to applicable law and only in the ordinary course of business; or (ii) loans, advances or capital contributions, or investment in, direct or indirect, wholly-owned subsidiaries of Anaplan; |
| • | make or change any material tax election, adopt or change any accounting period or any accounting method with respect to taxes, file any amended tax return, enter into any closing agreement with respect to any material amount of taxes, settle any material tax claim or assessment or claims to a material tax refund relating to Anaplan or any of its subsidiaries, consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment relating to Anaplan or any of its subsidiaries (other than pursuant to an automatic extension of time to file a tax return obtained in the ordinary course of business), or surrender any right to claim a material tax refund; |
| • | settle any material claim, arbitration or other litigation, suit, action, hearing, proceeding, arbitration or mediation by or before a governmental authority, arbitrator or mediator of competent jurisdiction (collectively “Actions”), other than any Action that involves only the payment of monetary damages not in excess of $5,000,000 individually or $10,000,000 in the aggregate; |
| • | except as required by law, or in the ordinary course of business, enter into any contract or amendment that would be a material contract under the terms of the Merger Agreement if in effect on the date of the Merger Agreement, or amend or modify in any material respect in a manner that is materially adverse to Anaplan or any of its subsidiaries, or consent to the termination of, any such material contract, or waive or consent to the termination of Anaplan’s or any of its subsidiaries’ material rights under those contracts, in each case other than the termination or expiration of any such material contract in accordance with its terms or renewal of such material contract of Anaplan on substantially similar terms; |
| • | enter into any new line of business outside of the businesses being conducted by Anaplan or any of its subsidiaries on the date of the Merger Agreement; |
| • | commence any material Action, except (i) for collections of accounts receivable, (ii) in such cases where Anaplan in good faith determines that failure to commence such Action would result in the material impairment of a valuable aspect of its business, (iii) as otherwise permitted or required by the Merger Agreement or (iv) to enforce the Merger Agreement; |
| • | (i) delay the payment of any trade payables to vendors and other third parties, (ii) accelerate the collection of trade receivables and other receivables or (iii) grant any material refunds, credits, rebates or other allowances to any end user, customer, reseller or distributor in amounts that are not in excess of $2,000,000 individually or $10,000,000 in the aggregate, with respect to the foregoing (i)—(iii), in each case outside the ordinary course of business consistent with past practices; |
| • | adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, reorganization, recapitalization or other reorganization of, Anaplan (other than the transactions contemplated by the Merger Agreement); |
| • | terminate, cancel, amend or modify any material insurance policy of Anaplan in a manner inconsistent with past practice in any material respect or that is not simultaneously replaced by a substantially comparable amount of insurance coverage; |
| • | except as required by any benefit plan of Anaplan set forth on Section 3.10(a) of the Disclosure Schedule or as otherwise required by applicable law, (i) except in the ordinary course of business consistent with past practice for employees of Anaplan or any of its subsidiaries who have an annual base salary below $250,000 (“Non-Management Employees”), increase the compensation or other benefits payable or provided to any employee, director or independent contractor of the Company or any of the Company subsidiaries, (ii) enter into any change of control, severance, retention or similar arrangement with any employee or independent contractor of Anaplan or any of its subsidiaries, |
| (iii) hire or terminate (other than terminations for “cause”) any employees other than (x) Non-Management Employees, or (y) hire to fill a position having a title below vice president that is open as of the date of the Merger Agreement or that becomes open in the ordinary course of business after the date of the Merger Agreement due to the termination or resignation of an employee or individual independent contractor, in each case, with the newly hired individual having substantially the same compensation and benefit terms as the individual being replaced, (iv) make or grant any bonus or any incentive compensation other than annual bonuses payable with respect to the 2022 fiscal year in the ordinary course of business consistent with past practice and in accordance with the terms of the annual bonus plan in effect as of the date of the Merger Agreement, (v) accelerate the vesting or payment of any cash or equity award or (vi) establish, adopt, enter into, amend or terminate any benefit plan of Anaplan (or any plan, trust, fund, policy or arrangement that would be a benefit plan of Anaplan if it were in existence as of the date of the Merger Agreement) except for routine amendments or renewals to health and welfare plans (other than severance or separation plans) that would not result in a material increase in benefits or in cost to Anaplan or any of its subsidiaries; |
| • | make any capital commitment or incur any capital expenditures or any obligations or liabilities in respect thereof in excess of twenty percent (20%) of the aggregate budget set forth on Schedule 5.1(b)(xviii) of the Disclosure Schedule; |
| • | engage in any transaction with, or enter into any agreement, arrangement or understanding with, any affiliate of Anaplan or other person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; |
| • | (i) negotiate, modify, extend, or enter into any Labor Agreement, (ii) recognize or certify any labor union, labor organization, works council, or group of employees as the bargaining representative for any employees of the Company or any Company subsidiary, or (iii) effectuate a “plant closing,” “mass layoff” (each as defined in WARN) or other layoff event (including any furloughs, salary or wage reductions or material schedule changes triggering WARN requirements) affecting in whole or in part any site of employment, facility, operating unit or employee; |
| • | apply for or receive any relief under (A) the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136), enacted March 27, 2020, the Consolidated Appropriations Act of 2021 and the Taxpayer Certainty and Disaster Tax Relief Act, in each case, together with all rules and regulations and guidance issued by any governmental authority with respect thereto or any other applicable law or governmental program designed to provide relief related to COVID-19 or (B) any payroll tax executive order; |
| • | knowingly disclose any material trade secrets (other than pursuant to a written and appropriate confidentiality and non-disclosure agreement entered into in the ordinary course of business with reasonable protections of such trade secrets), or disclose, license, release, deliver, escrow or make available any source code; or |
| • | otherwise make a legally binding commitment to do any of the foregoing. |
From and after the date of the Merger Agreement and until earlier of the Effective Time or the termination of the Merger Agreement pursuant to its terms (the “No-Shop Period”), Anaplan has agreed not to, and to cause its subsidiaries (and instruct and cause its and their respective officers and directors not to and instruct their respective Representatives not to), directly or indirectly, among other things:
| • | solicit, initiate, knowingly encourage or knowingly facilitate any Acquisition Proposal or the making thereof to Anaplan or its stockholders; |
| • | enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish any non-public information to, or otherwise cooperate in any way with, any person (other than Parent, Merger Sub and their representatives) with respect to any Acquisition Proposal; or |
| • | take any action to render any provision of any “fair price,” “moratorium,” “control share acquisition,” “business combination” or other similar anti-takeover statute (including Section 203 of the DGCL) or any restrictive provision of any applicable anti-takeover provision in Anaplan’s organizational documents, in each case inapplicable to any person (other than Parent, Merger Sub or any of their affiliates) or any Acquisition Proposal (and to the extent permitted thereunder, Anaplan shall promptly take all steps necessary to terminate any waiver that may have been granted to any such person or Acquisition Proposal under any such provisions). |
Notwithstanding these restrictions, prior to the time that adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Anaplan common stock entitled to vote on such matter at a stockholders’ meeting duly called and held for such purpose (the “Requisite Company Vote”) is obtained, in response to an Acquisition Proposal that was not solicited in material breach of the foregoing restrictions, Anaplan may provide information to, and engage or participate in negotiations or discussions with, a person regarding an Acquisition Proposal if the Board of Directors determines in good faith after consultation with its financial advisors and its outside legal counsel that such proposal is a Superior Proposal (as defined below) or would reasonably likely lead to a Superior Proposal and not to do so would be inconsistent with the directors’ fiduciary duties under applicable law; provided, that all such information has previously been made available to Parent or is made available to Parent prior to or promptly following the time it is provided to such person. In addition, notwithstanding the foregoing, prior to the time the Requisite Company Vote is obtained, Anaplan may, solely to the extent the Anaplan Board determines in good faith (after consultation with outside legal counsel) that failure to take such action would be inconsistent with its fiduciary duties under applicable law, not enforce any confidentiality, standstill or similar agreement to which Anaplan or any of its subsidiary is a party for the sole purpose of allowing the other party to such agreement to submit an Acquisition Proposal that will constitute, or would reasonably likely lead to, a Superior Proposal, that did not, in each case, result from a material breach by Anaplan of the previous restrictions.
For purposes of this Proxy Statement and the Merger Agreement:
| • | “Acceptable Confidentiality Agreement” means customary confidentiality agreement between Anaplan and any person making an Acquisition Proposal, the terms of which are not materially less favorable in the aggregate to Anaplan than those contained in the Confidentiality Agreement (provided that such confidentiality agreement shall not be required to restrict the submission to Anaplan of Acquisition Proposals and such confidentiality agreement shall permit Anaplan to comply with its obligations under the Merger Agreement); |
| • | “Acquisition Agreement” means any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar contract constituting or related to, any Acquisition Proposal (other than an Acceptable Confidentiality Agreement). |
| • | “Acquisition Proposal” means any bona fide proposal, offer or indication of interest from a third party (whether or not in writing) relating to, or that would reasonably be expected to lead to, in one transaction or a series of transactions, (i) any direct or indirect acquisition or purchase (including by any license or lease) by any person or group (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of (A) assets (including equity securities of any of Anaplan’s subsidiaries) or businesses that constitute twenty-five percent (25%) or more of the revenues, net income or assets of Anaplan and its subsidiaries, taken as a whole, or (B) beneficial ownership of equity securities representing twenty-five percent (25%) or more of the total outstanding voting power of Anaplan; (ii) any purchase or sale of, or tender offer or exchange offer for, equity securities of Anaplan or any of its subsidiaries that, if consummated, would result in any person or group (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) beneficially owning twenty-five percent (25%) or more of the total voting power of Anaplan; or (iii) any merger, consolidation, business combination, recapitalization, reorganization, dual listed structure, joint |
| venture, share exchange or similar transaction involving Anaplan, as a result of which the owners of the equity securities of Anaplan immediately prior to such event beneficially own equity securities representing less than seventy-five percent (75%) of the total voting power of the surviving entity immediately following such event; or (iv) any liquidation or dissolution of Anaplan, in each case other than the transactions otherwise permitted by the interim operating covenants described above; |
| • | “Confidentiality Agreement” means the non-disclosure agreement entered into prior to the date of the Merger Agreement between Anaplan and an affiliate of Parent; |
| • | “Intervening Event” means a material event, fact, development, circumstance or occurrence that affects or would be reasonably likely to affect the business, assets or operations of Anaplan or any of its subsidiaries that was not known to or reasonably foreseeable by the Board of Directors as of the date of the Merger Agreement (or, if known or reasonably foreseeable, the consequences of which are not known to or understood by the Board of Directors as of the date of the Merger Agreement), becomes known by the Board of Directors after the date of the Merger Agreement or the material consequences thereof become known to or understood by the Board of Directors after the date of the Merger Agreement and prior to the time of the adoption of the Merger Agreement by Anaplan’s stockholders; provided, that the mere fact, in and of itself, that Anaplan meets or exceeds any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other financial or operating metrics for any period ending on or after the date of the Merger Agreement, or changes after the date of the Merger Agreement in the market price of the Anaplan common stock or the credit rating of Anaplan shall not constitute an Intervening Event (it being understood that the underlying cause of any of the foregoing may be considered and taken into account in determining whether an Intervening Event has occurred and/or constitute an Intervening Event); and |
| • | “Superior Proposal” means any bona fide written Acquisition Proposal made by a third party that, if consummated, would result in such third party’s (or its stockholders’) owning, directly or indirectly, greater than 80% of the equity securities of Anaplan (or of the shares of the surviving entity in a merger or the direct or indirect parent of the surviving entity in a merger) or greater than 80% of the assets of Anaplan and its subsidiaries, taken as a whole (based on the fair market value thereof, as determined by the Board of Directors) and that the Board of Directors determines in good faith after consultation with its financial advisors and its outside legal counsel if consummated, is likely to be consummated in accordance with its terms and is to be more favorable to Anaplan’s stockholders (in their capacities as stockholders) than the Merger, taking into account all financial, legal, financing, regulatory and other terms and conditions of such proposal and any changes to the terms of the Merger Agreement (including any changes to the terms of the Merger Agreement proposed by Parent in response to such offer or otherwise). |
The Board of Directors’ Recommendation; Change in Recommendation
As described above, and subject to the provisions described below, the Board of Directors has made the recommendation that the holders of shares of common stock vote “FOR” the proposal to adopt the Merger Agreement. The Merger Agreement provides that the Board of Directors may not effect a Change in Recommendation except as described below.
Until earlier of the time the Requisite Company Vote is obtained or the termination of the Merger Agreement pursuant to its terms, the Board of Directors may not, by itself or through any of its committees:
| • | withhold, withdraw, modify, amend or qualify or publicly propose to withdraw, modify, amend or qualify, in any manner adverse to Parent or Merger Sub, the approval or recommendation by the Board of Directors or any committee thereof of the Merger Agreement, the Merger or the transactions contemplated thereby (the “Anaplan Board Recommendation”); |
| • | fail to recommend against acceptance of any tender offer or exchange offer for Anaplan’s common stock within ten (10) business days of the commencement of such offer; |
| • | fail to reconfirm the Anaplan Board Recommendation within ten (10) business days after the commencement of a tender offer or exchange offer or public announcement of an Acquisition Proposal from a third party after written request from Parent to do so; |
| • | approve, recommend or declare advisable, or publicly propose to approve, recommend or declare advisable, any Acquisition Proposal; |
| • | fail to include the Anaplan Board Recommendation in this Proxy Statement (with any action described in the above being referred to as a “Change in Recommendation”); or |
| • | adopt, recommend or declare advisable, or publicly propose to adopt, recommend or declare advisable, or allow Anaplan or any of its subsidiaries to execute or enter into, any Acquisition Agreement. |
Prior to the adoption of the Merger Agreement by Anaplan’s stockholders and notwithstanding the restrictions described above in the section captioned “The Merger Agreement—Acquisition Proposals,” the Board of Directors is permitted under certain circumstances and subject to Anaplan’s compliance with certain obligations (as summarized below), to (i) make a Change in Recommendation, and (ii) terminate the Merger Agreement and enter into a definitive written agreement providing for a Superior Proposal.
The Board of Directors is permitted to (i) make a Change in Recommendation in the case of a Superior Proposal, or (ii) terminate the Merger Agreement to simultaneously enter into a definitive written agreement providing for a Superior Proposal provided that such Superior Proposal did not result from a material breach of the No-Shop Period restrictions, and if, in each case, the Board of Directors determines in good faith (after consultation with its outside legal counsel and financial advisors) (1) that the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law and (2) it has complied with the procedure and its obligations as summarized in the following paragraph.
The Board of Directors may not make a Change in Recommendation or terminate the Merger Agreement in the case of a Superior Proposal unless (i) Anaplan shall have provided prior written notice to Parent at least five (5) business days in advance of its intention to take such action (a “Notice of Designated Superior Proposal”), and prior to effecting such Change in Recommendation or termination of the Merger Agreement, Anaplan shall, and shall cause its representatives to, during such five (5) business day period, negotiate with Parent in good faith (to the extent that Parent desires to negotiate) to make such adjustments to the terms and conditions of the Merger Agreement so that the Change in Recommendation is no longer necessary and such Superior Proposal no longer constitutes a Superior Proposal (and in the event of any material change to any of the terms (including any change to the form, amount and timing of payment of consideration) of such Superior Proposal Anaplan shall, in each case, deliver to Parent an additional notice consistent with that described in this clause and a renewed negotiation period under this clause shall commence (except that the five (5) business day period shall instead be equal to two (2) business days; provided that if such additional notice is delivered during the initial five (5) business day negotiation period, the initial negotiation period shall not be reduced by such notice)) and (ii) following such notice period (including any subsequent notice period), the Board of Directors shall have concluded in good faith, after consultation with its outside legal advisor and financial advisors and taking into account Parent’s proposed adjustments (if any) to the terms and conditions of the Merger Agreement, that the failure to effect a Change in Recommendation or terminate the Merger Agreement would be inconsistent with its fiduciary duties under applicable law; provided that, that Anaplan shall not be entitled to terminate the Merger Agreement, and any purported termination shall be void and of no force or effect, unless substantially concurrently with such termination Anaplan pays by wire transfer of immediately available funds a termination fee of $293,122,500.
The Board of Directors is permitted to make a Change in Recommendation in the event of an Intervening Event if the Board of Directors determines in good faith (after consultation with its outside legal counsel) (1) that failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law and (2) it has complied with the procedure and its obligations as summarized in the following paragraph.
The Board of Directors may not make a Change in Recommendation in response to an Intervening Event unless (i) Anaplan shall have provided prior written notice to Parent at least five (5) business days in advance of its intention to take such action, and prior to effecting such Change in Recommendation, Anaplan shall, and shall cause its representatives to, during such five (5) business day period, negotiate with Parent in good faith (to the extent that Parent desires to negotiate) to make such adjustments to the terms and conditions of the Merger Agreement so that the Change in Recommendation is no longer necessary (and in the event of any material change to the circumstances related to the Intervening Event, Anaplan shall, in each case, deliver to Parent an additional notice consistent with that described in this clause and a renewed negotiation period under this clause shall commence (except that the five (5) business day period shall instead be equal to two (2) business days; provided that if such additional notice is delivered during the initial five (5) business day negotiation period, the initial negotiation period shall not be reduced by such notice)) and (ii) following such notice period (including any subsequent notice period), the Board of Directors shall have concluded in good faith, after consultation with its outside legal advisor and taking into account Parent’s proposed adjustments (if any) to the terms and conditions of the Merger Agreement, that the failure to effect a Change in Recommendation due to an Intervening Event would be inconsistent with its fiduciary duties under applicable law; and provided, that the Board of Directors shall not be permitted to effect a Change in Recommendation with respect to or in connection with any Acquisition Proposal (which shall be covered by the provisions set forth above regarding a Superior Proposal).
Notwithstanding the restrictions described above, the Merger Agreement does not prohibit Anaplan or the Board of Directors from (i) making any disclosure to Anaplan’s stockholders if the Board of Directors determines in good faith (after consultation with its outside legal counsel) that failure to make such disclosure would be inconsistent with its fiduciary duties under applicable law, or (ii) taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) or Rule 14d-9 under the Exchange Act or making a statement required under Rule 14d-9 under the Exchange Act or under Item 1012(a) of Regulation M-A promulgated under the Exchange Act (including making any “stop-look-and-listen” communication to the stockholders); provided, that (A) this exception shall not be deemed to affect whether any such disclosure, other than a “stop, look and listen” communication of the type contemplated by Section 14d-9(f) of the Exchange Act, would otherwise be deemed to be a Change in Recommendation and (B) any such disclosure pursuant to subsection (i) above shall not limit or otherwise affect the obligations of Anaplan or the Board of Directors described above under the sections captioned “The Merger Agreement—Acquisition Proposals” and “The Merger Agreement—The Board of Directors’ Recommendation; Change in Recommendation”. For purposes of clarity and avoidance of doubt, a factually accurate public statement that describes Anaplan’s receipt of an Acquisition Proposal, that the Board of Directors is considering the Acquisition Proposal and that states that no position has been taken by the Board of Directors as to the advisability or desirability of such Acquisition Proposal and the operation of the Merger Agreement with respect thereto will not be deemed a Change in Recommendation.
Stockholders Meeting
Anaplan agreed to take all action necessary to convene a stockholders meeting as promptly as reasonably practicable following the date of mailing of the Proxy Statement (the “Stockholders Meeting”) (provided that, subject to the sentence that follows, the Stockholders Meeting shall not be held later than forty-five (45) days following confirmation from the SEC that it will not review or that it has completed its review of the Proxy Statement (which confirmation will be deemed to occur if the SEC has not affirmatively notified Anaplan prior to the tenth calendar day after filing the Proxy Statement that the SEC will or will not be reviewing the Proxy Statement)), for the purpose of obtaining the Requisite Company Vote. Anaplan may postpone or adjourn such meeting (A) to the extent required by applicable law (including to permit the filing and dissemination of any supplement or amendment to the Proxy Statement that the Board of Directors has determined in good faith (after consultation with its outside legal counsel) is required under applicable law), (B) if on a date that is two (2) business days prior to the date the Stockholders Meeting is scheduled (the “Original Meeting Date”), Anaplan has not received proxies representing the Requisite Company Vote, whether or not a quorum is present as long as the date of the Stockholders Meeting is not postponed or adjourned by more than ten (10) days in connection
with any one postponement or adjournment or more than an aggregate of forty-five (45) days from the Original Meeting Date in reliance on this clause (B), (C) within the three (3) business days prior to the Original Meeting Date or any date that the Stockholders Meeting is then scheduled to be held, if Anaplan delivers (or has delivered) a notice of an intent to make a Change in Recommendation, as long as the date of the Stockholders Meeting is not postponed or adjourned by more than ten (10) business days, or (D) with the prior written consent of Parent (such consent not be unreasonably withheld, conditioned or delayed).
Once Anaplan has established a record date for the Stockholders Meeting, Anaplan will not change such record date or establish a different record date for the Stockholders Meeting without the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed) or otherwise required by applicable law. Anaplan has agreed that, unless the Merger Agreement is terminated in accordance with its terms, and Anaplan has paid to Parent the Company Termination Fee (as defined below) in accordance with terms of the Merger Agreement, its obligations to hold the Stockholders Meeting and submit the Merger Agreement to Anaplan’s stockholders to obtain the Requisite Company Vote will not be affected in any manner, including in connection with (i) the making of a Change in Recommendation by the Anaplan Board (ii) the commencement of or announcement or disclosure of or communication to Anaplan of any Acquisition Proposal.
Without the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), the adoption of the Merger Agreement will be the only matter (other than related procedural matters) that Anaplan will propose to be acted on by its stockholders at the Stockholders Meeting.
Following the Effective Time and ending on the first anniversary thereof, Parent shall cause the Surviving Corporation and each of its applicable subsidiaries, to maintain for all employees of Anaplan or its subsidiaries who remain employed by the Surviving Corporation or any affiliate of Parent following the Merger, which we refer to as “Continuing Employees”, during their employment (i) cash compensation levels (which includes salary and wages, target short-term cash bonus opportunities and commission formulas but to exclude long-term cash compensation, any equity or equity-based compensation and severance, separation or change-in-control benefits or features) that are in the aggregate no less favorable than the cash compensation levels provided to them immediately prior to the Effective Time and (ii) employee benefits (other than equity or equity-based benefits, defined benefit pension, retiree welfare or nonqualified deferred compensation) that are substantially comparable in the aggregate to such employee benefits provided to such Continuing Employee immediately prior to the Effective Time.
Further, for purposes of vesting, eligibility to participate and levels of benefits (but not benefit accrual under any defined benefit plan or frozen benefit plan of Parent or vesting or other benefits under any equity incentive plan) under any employee benefits provided to similarly situated employees (such benefits, the “Parent Plans”), Parent will credit each Continuing Employee with his or her years of service with Anaplan or its subsidiaries before the Effective Time, to the same extent and for the same purpose as such Continuing Employee was entitled, before the Effective Time, to credit for such service under any similar benefit plan of Anaplan in which such Continuing Employee participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing will not apply to the extent that its application would result in a duplication of benefits with respect to the same period of service. In addition, Parent will, subject in each case to receipt of any required consent of the applicable Parent Plan provider, use commercially reasonable efforts to cause (i) each Continuing Employee to be immediately eligible to participate, without any waiting time, in any and all Parent Plans, (ii) for purposes of each Parent Plan providing medical, dental, pharmaceutical and/or vision benefits to any Continuing Employee, all pre-existing condition exclusions and actively-at-work requirements of such Parent Plan to be waived for such Continuing Employee and his or her covered dependents, to the extent such conditions were inapplicable or waived under the comparable benefit plans of Anaplan in which such Continuing Employee participated immediately prior to the Effective Time, and (iii) for the plan year in which the Effective Time occurs, the crediting of each Continuing Employee with any co-payments and deductibles paid prior to the Effective Time in satisfying any applicable deductible or out-of-pocket requirements under any Parent Plan.
Parent and Merger Sub have represented to Anaplan that:
| • | Parent has delivered to Anaplan a true, accurate and complete copy of the fully executed Equity Commitment Letter, pursuant to which, and subject to the terms and conditions thereof, Sponsor has committed to invest the amounts set forth therein. |
| • | The Equity Commitment Letter provides that Anaplan is a third party beneficiary thereof. |
| • | As of the date of the Merger Agreement, the Equity Commitment Letter is in full force and effect and are legal, valid and binding obligations of Parent and Merger Sub. As of the date of the Merger Agreement, the Equity Commitment Letter has not been withdrawn, rescinded or terminated. As of the date of the Merger Agreement, the Equity Commitment Letter has not been amended or modified in any respect. |
| • | The Equity Commitment Letter is the only agreement relating to the Equity Financing as of the date of the Merger Agreement. Other than as expressly set forth in the Equity Commitment Letter, there are no other agreements, side letters, or arrangements, conditions precedent or other contingencies relating to the Equity Commitment Letter that would reasonably be expected to impair the amount, availability or conditionality of the Equity Financing. |
| • | As of the date of the Merger Agreement, no event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of Parent or Merger Sub, as applicable, under any term of the Equity Commitment Letter or, would (i) make any of the assumptions or any of the statements set forth in the Equity Commitment Letter inaccurate in any material respect, (ii) result in any of the conditions in the Equity Commitment Letter not being satisfied or (iii) otherwise result in the Equity Financing not being available on the closing date. Assuming satisfaction of the conditions to each party’s obligation to effect the merger and the conditions to the obligation of Parent and Merger Sub to effect the Merger, as of the date of the Merger Agreement, each of Parent and Merger Sub has no reason to believe that any of the conditions in the Equity Commitment Letter will fail to be satisfied on a timely basis or that the full amount of the Equity Financing will not be available to be funded at the Effective Time. |
| • | The aggregate proceeds from the Equity Financing constitute all of the financing required for the consummation of the Merger and the other transactions contemplated by the Merger Agreement, and are sufficient in amount for Parent or Merger Sub, as applicable, to pay 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 the Equity Financing, in each case, to the extent required to be paid on the closing date (collectively, the Required Amount, as defined in the section of this Proxy Statement captioned “The Merger—Financing of the Merger—Equity Financing”). The only conditions precedent related to the obligations of Sponsor to fund the full amount of the Equity Financing are expressly set forth in the Equity Commitment Letter. |
Each of Parent and Merger Sub has agreed to use its (and has agreed to cause certain affiliates to use their) reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable and obtain the proceeds of the Equity Financing on the terms and conditions, described in the Equity Commitment Letter, including using reasonable best efforts to:
| • | comply with and maintain in effect the Equity Financing and the Equity Commitment Letter; |
| • | satisfy, or cause their respective Representatives to satisfy, as promptly as practicable and on a timely basis all conditions to the Equity Financing contemplated by the Equity Commitment Letter that are within its control (subject to and without expanding any of Parent’s or Merger Sub’s express obligations under the Merger Agreement); |
| • | comply with its obligations under the Equity Commitment Letter; and |
| • | enforce its rights (other than through litigation) under the Equity Commitment Letter. |
Parent and Merger Sub shall not agree to or permit any amendment, supplement, termination, modification or replacement of, or grant any waiver of, any condition, remedy or other provision under the Equity Commitment Letter that would impact the amount or timing of the Equity Financing or the availability of the Equity Financing at the closing, in each case, in a manner that would adversely affect Parent’s ability to fund the Required Amount at the closing, without the prior written consent of Anaplan.
Anaplan, at Parent’s sole expense, has agreed to, and has agreed to cause each of its subsidiaries to, use its and their respective reasonable best efforts to provide such cooperation in connection with arranging, obtaining and syndicating the debt financing for the transactions contemplated by the Merger Agreement (the “Debt Financing”) as may be reasonably requested by Parent or Merger Sub, as applicable, as is necessary and customary in connection with the arrangement of debt financings; provided that such requested cooperation is consistent with applicable law and does not unreasonably interfere with the ongoing operations of Anaplan or any of its subsidiaries. Such cooperation shall include:
| • | preparing and furnishing Parent or Merger Sub, as applicable, and the Lenders (as defined below), not later than a time reasonably sufficient to allow Parent or Merger Sub, as applicable, to satisfy the conditions in any definitive documentation in respect of the Debt Financing (“Debt Financing Documentation”, all Required Information (as defined below) and all other financial and other pertinent information and disclosures regarding Anaplan and its subsidiaries as may be reasonably requested by Parent or Merger Sub, as applicable, for use in connection with the Debt Financing); |
| • | causing Anaplan’s senior officers with appropriate expertise to participate in a reasonable number of lender meetings, rating agency presentations and due diligence meetings at reasonable times and upon reasonable advance notice; |
| • | assisting Parent and Merger Sub, as applicable, and the Lenders in the preparation of (A) debt marketing documents (and any supplements thereto) solely with respect to information relating to Anaplan and its subsidiaries and (B) pro forma financial statements or other pro forma financial information, in each case to the extent reasonably requested by Parent; provided, that (1) any such debt marketing documents (and any supplements thereto), financial statements or other financial information with respect to Anaplan shall only reflect the Surviving Corporation as the obligor(s), (2) Anaplan shall not be responsible for the preparation of such debt marketing documents (and any supplements thereto), pro forma financial statements and any pro forma adjustments giving effect to the transactions contemplated by the Merger Agreement and (3) Anaplan’s assistance shall relate solely to the financial information and data derived from Anaplan’s historical books and records (which shall not involve Anaplan itself preparing such pro forma financial information), and providing reasonable cooperation with the due diligence efforts of the Lenders to the extent reasonable and customary; |
| • | reasonably cooperating with the marketing efforts of Parent and the Lenders in connection with the Debt Financing, including direct contact between such management of Anaplan and potential lenders in the Debt Financing; |
| • | reasonably cooperating with Parent’s legal counsel in connection with customary legal opinions required of Parent in connection with the Debt Financing; |
| • | reasonably assisting Parent or in obtaining any corporate credit and family ratings from any ratings agencies contemplated by the Debt Financing Documentation, including assisting Parent and the |
| Lenders in the preparation of customary materials for rating agency presentations solely with respect to information relating to Anaplan and its subsidiaries; |
| • | reasonably assisting in the preparation of, and executing and delivering, Debt Financing Documentation and other customary financing documents, including guaranty and collateral documents and other certificates, schedules and documents as may be reasonably requested by Parent or Merger Sub, as applicable; |
| • | facilitating the pledging of, granting security interests in and obtaining performance liens on, collateral for the Debt Financing (including delivery of original stock certificates and original stock powers of Anaplan’s subsidiaries to the extent required on the closing date by the Lenders in connection with the Debt Financing and to the extent available to Anaplan); |
| • | using reasonable best efforts to assist the Lenders in benefiting from the existing lending relationships of Anaplan; |
| • | taking all ministerial company actions, subject to and only effective upon the occurrence of the Effective time, reasonably requested by Parent or Merger Sub, as applicable, to permit the consummation of the Debt Financing; and |
| • | at least three (3) business days prior to closing, providing all documentation and other information about Anaplan and its subsidiaries, in each case as is reasonably requested in writing by Parent and Merger Sub at least ten (10) business days prior to closing in connection with the Debt Financing that relates to applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act and the requirements of 31 C.F.R. §1010.230. |
For purposes of the Merger Agreement, (x) “Required Information” means (i) the audited consolidated balance sheets at the end of, and the related statements of income (or loss) and cash flows of the Company and its consolidated subsidiaries for, the three (3) most recently completed fiscal years ended at least 90 days prior to the closing date, and (ii) the unaudited consolidated balance sheets at the end of, and the related statements of income (or loss) and cash flows of the Company and its consolidated subsidiaries for, each fiscal quarter or three, six or nine month period, as applicable, (but excluding the fourth quarter of any fiscal year) subsequent to the last fiscal year for which financial statements were prepared pursuant to the preceding clause (i) and ended at least 45 days before the closing date (in the case of this clause (ii), without footnotes) together with the consolidated balance sheet and related statements of income (or loss) and cash flows of the Company and its consolidated subsidiaries for the corresponding portion of the previous year, in each case, prepared in accordance with GAAP, and (y) “Lenders” means the financial institutions, agents, arrangers, and institutional investors that at any time have committed to provide or arrange or otherwise have entered into agreements in connection with all or any part of the Debt Financing, including such persons who are party to any Debt Financing Documentation entered into pursuant thereto or relating thereto (together with their successors and assigns).
However:
| • | neither Anaplan nor any of its subsidiaries shall be required to pay any commitment or other similar fee or enter into any binding agreement or commitment or incur any other actual or potential liability or obligation in connection with the Debt Financing that is not subject to the occurrence of the closing; |
| • | no director, manager, officer or employee of Anaplan or any of its subsidiaries shall be required to deliver any certificate or take any other action to the extent any such action would reasonably be expected to result in personal liability to such director, manager, officer or employee; |
| • | none of Anaplan, any of its subsidiaries, or any of their respective directors or officers shall be obligated to adopt resolutions or execute consents to approve or authorize the execution of the Debt Financing; provided, that this shall not prohibit the adoption or execution of any resolutions or consents effective no earlier than the closing date by any persons that shall remain or will become officers or directors of Anaplan or any of its subsidiaries as of the Effective Time; and |
| • | neither Anaplan nor any of its subsidiaries shall be required to take any action that would reasonably be expected, in the reasonable judgment of Anaplan, to conflict with, or result in any violation or material breach of, any applicable law, any material contract of Anaplan or any obligations of confidentiality (not created in contemplation of the Merger Agreement) binding on Anaplan or any of its subsidiaries. |
In the event that the closing does not occur, Parent or Merger Sub, as applicable, shall, promptly upon request by Anaplan, reimburse Anaplan for all reasonable and documented out-of-pocket costs and expenses incurred by Anaplan, its subsidiaries and their representatives in connection with their respective obligations to cooperate with the Debt Financing. Parent and Merger Sub shall jointly and severally indemnify and hold harmless Anaplan, its subsidiaries and their respective representatives from and against any and all claims, losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements suffered or incurred by any of them in connection with the Debt Financing and any information supplied or provided in connection therewith (other than to the extent suffered or incurred as a result of (i) the gross negligence, willful misconduct or material breach of the Merger Agreement in each case as determined by a court of competent jurisdiction by Anaplan, any subsidiary of Anaplan or any representative thereof or (ii) any inaccuracy (other than any immaterial inaccuracy) in the historical financial information provided by Anaplan to Parent pursuant to the definition of Required Information).
Prior to the Effective Time, without the prior written consent of Anaplan, Parent shall not permit or agree to permit any person, other than Sponsor, to obtain any equity interests (or rights to obtain any equity interests) in Parent or Merger Sub if such acquisition of equity interests or rights to obtain such equity interests would reasonably be expected to (a) impose any material delay in the obtaining of, or materially increase the risk of not obtaining, any consents of any governmental authority necessary to consummate the transactions contemplated by the Merger Agreement or the expiration or termination of any applicable waiting period under any antitrust law; (b) materially increase the risk of any governmental authority seeking or entering an Order prohibiting the consummation of the transactions contemplated by the Merger Agreement; (c) materially increase the risk of not being able to remove any such Order on appeal or otherwise; or (d) materially delay or prevent the consummation of the transactions contemplated by the Merger Agreement.
Prior to the Effective Time, without the prior written consent of Anaplan (not to be unreasonably withheld, delayed or conditioned), Parent shall not, and shall not knowingly permit or agree to permit any person (acting at its direction) to, directly or indirectly, enter into any agreement, arrangement or understanding (whether or not binding) with any executive officer of Anaplan relating to (i) any retention, severance or other compensation, incentives or benefits that may be or become payable in connection with the transactions contemplated by the Merger Agreement or after the Effective Time, (ii) any equity rollover or other similar transaction, or any equity or other investment in Parent, Anaplan or any parent company thereof, or any affiliate of Parent, Anaplan or any parent company thereof, at or prior to the Effective Time or (iii) any directorship, employment, consulting arrangement or other similar association or involvement of any directors, officers or other employees of Anaplan with Parent, Anaplan or any parent company thereof, or affiliate of Parent, Anaplan or any parent company thereof, from and after the Effective Time.
Parent and Anaplan have agreed to use their respective reasonable best efforts to effect the transactions contemplated by the Merger Agreement and at the reasonable request of another party, shall execute and deliver other instruments and do and perform other acts and things as may be necessary, proper or desirable for effecting the consummation of the Merger Agreement the transactions contemplated by the Merger Agreement. In
particular, the Merger Agreement contains certain other additional agreements among Anaplan, Parent and Merger Sub relating to, among other things:
| • | prompt notification by Anaplan to Parent and Merger Sub regarding any legal action commenced or threatened relating to the Merger Agreement, the Merger or any of the other transactions contemplated by the Merger Agreement; |
| • | cooperation between Anaplan and Parent in connection with public announcements; |
| • | cooperation among Anaplan, Parent and Merger Sub in using reasonable best efforts to effect all regulatory filings and obtain necessary consents of all third parties and governmental authorities; |
| • | exercising reasonable best efforts by Anaplan to obtain certain consents from contractual counterparties; |
| • | the delisting of Anaplan common stock; and |
| • | notifying the other party of the receipt of certain communications from any governmental authority or third party in connection with the transactions contemplated by the Merger Agreement. |
Notwithstanding the foregoing, if any Action is instituted (or threatened to be instituted) challenging the transactions contemplated by the Merger Agreement as violative of any antitrust law, Parent will use its reasonable best efforts to (i) avoid the entry of, or to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that would restrain, prevent or delay the closing on or before the Outside Date, including defending through litigation any claim asserted in any court with respect to the transactions contemplated by the Merger Agreement by the Federal Trade Commission, the Antitrust Division or any other applicable governmental authority or any private party under any antitrust law; and (ii) avoid or eliminate each and every impediment under any antitrust law so as to enable the closing to occur as soon as possible (and in any event no later than the Outside Date), including (A) proposing, negotiating, committing to and effecting, by consent decree, hold separate order, or otherwise, the sale, divestiture, licensing, or disposition of such businesses, product lines, equity holdings, technology, intellectual property, or other assets of Parent or its subsidiaries (including the Company or its subsidiaries after the closing) and (B) otherwise taking or committing to take actions that after the closing would limit Parent’s freedom of action with respect to, or its or their ability to operate and/or retain, one or more of the businesses, product lines, equity interests, technology, intellectual property, or other assets of Parent or the Company and/or their respective subsidiaries (each of the impediments set forth in the preceding clauses (A) and (B), an “Antitrust Restraint”); provided, however, that (x) Parent shall not be required to agree to any Antitrust Restraint that, individually or in the aggregate, would, or would reasonably be expected to, result in a Material Adverse Effect, and (y) Parent shall not be required to agree to any Antitrust Restraint that is not conditioned upon the consummation of the transactions contemplated by the Merger Agreement.
During the period beginning on the date of the Merger Agreement through the date on which the condition in the Merger Agreement with respect to obtaining antitrust approvals is satisfied or waived, Parent and Merger Sub shall not, and shall cause their affiliates not to, acquire or agree to acquire, by merging with or into or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets, if the entering into of a definitive agreement relating to, or the consummation of such acquisition, merger or consolidation could reasonably be expected to: (i) impose any material delay in the obtaining of, or materially increase the risk of not obtaining, any consents of any governmental authority necessary to consummate the transactions contemplated by the Merger Agreement or the expiration or termination of any applicable waiting period under any antitrust law; (ii) materially increase the risk of any governmental authority seeking or entering an Order prohibiting the consummation of the transactions contemplated by the Merger Agreement; or (iii) materially increase the risk of not being able to remove any such Order on appeal or otherwise.
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 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 D&O Insurance in respect of acts or omissions occurring prior to the Effective Time covering each 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 (i) 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 (ii) 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.
Conditions to the Closing of the Merger
The respective obligations of each party to consummate the Merger are subject to the satisfaction or (to the extent permitted by law) waiver by Anaplan and Parent of the following conditions:
| • | the adoption of the Merger Agreement by the Requisite Company Vote; |
| • | the expiration or termination of the applicable waiting period under the HSR Act; and |
| • | the consummation of the Merger not being made illegal or otherwise prohibited by any law or order of any governmental authority of competent jurisdiction. |
In addition, the obligations of Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver by Parent of each of the following additional conditions:
| • | The representations and warranties of Anaplan: |
| • | contained in Sections 3.23 (Takeover Laws) and 3.25 (Opinion of Financial Advisor) of the Merger Agreement shall be true and correct in all material respects as of the closing date as though made on or as of such date (other than those representations and warranties that address matters only as of a particular date or only with respect to a specified period of time, which need only be true and correct as of such date or with respect to such period); |
| • | contained in Sections 3.3(a), 3.3(b) and 3.3(c) (Capitalization) of the Merger Agreement shall be true and correct as of the closing date as though made on or as of such date (other than those representations and warranties that address matters only as of a particular date or only with respect to a specified period of time, which need only be true and correct as of such date or with respect to such period), except for any inaccuracy or combination of inaccuracies in such representations and warranties that do not result, in aggregate, in an increase in the aggregate consideration otherwise payable by Parent in the Merger by more than $60,000,000; |
| • | contained in Section 3.4 (Authority Relative to this Agreement), clause (i) of the second sentence of Section 3.8 (Absence of Certain Changes or Events) and Section 3.24 (Brokers and Expenses) of the Merger Agreement shall be true and correct in all respects as of the closing date as though made on or as of such date (other than those representations and warranties that address matters only as of a particular date or only with respect to a specified period of time, which need only be true and correct as of such date or with respect to such period); and |
| • | all the representations and warranties other than those in respect of the matters described in the three bullets above, being true and correct as of the closing date as if made at and as of such time (other than those representations and warranties that address matters only as of a particular date or only with respect to a specified period of time, which need only be true and correct as of such date or with respect to such period), being true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth in the Merger Agreement), except where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect. |
| • | Anaplan having performed in all material respects the covenants or agreements under the Merger Agreement to be performed or complied with by it as of the closing date; |
| • | Since the date of the Merger Agreement, neither a Material Adverse Effect nor an Effect that would reasonably be expected to have a Material Adverse Effect, has occurred that is continuing; and |
| • | Parent’s receipt of a certificate of Anaplan signed on its behalf by a duly authorized executive of Anaplan certifying the matters in the foregoing bullets. |
In addition, the obligation of Anaplan to consummate the Merger is subject to the satisfaction or waiver by Anaplan of each of the following additional conditions:
| • | The representations of Parent and Merger Sub shall have been true and correct in all respects as of the closing date as though made on or as of such date (other than those representations and warranties that address matters only as of a particular date or only with respect to a specified period of time, which need only be true and correct as of such date or with respect to such period), except, where the failure of such representations and warranties to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to prevent or materially delay or materially impair the |
| ability of Parent or Merger Sub to consummate the Merger or the other transactions contemplated by the Merger Agreement or perform their respective obligations under the Merger Agreement; |
| • | Parent and Merger Sub each having performed in all material respects the covenants or agreements required under the Merger Agreement to be performed or complied with by them as of the closing date; and |
| • | Anaplan’s receipt of a certificate signed by a duly authorized executive officer of each of Parent and Merger Sub certifying the matters in the foregoing bullets. |
Termination of the Merger Agreement
The Merger Agreement may be terminated at any time prior to the Effective Time, whether before or after the adoption of the Merger Agreement by stockholders, in the following ways:
| • | By mutual written consent of Anaplan and Parent; |
| • | By either Anaplan or Parent: |
| • | if the Merger is not consummated on or before the Outside Date (except that the right to terminate the Merger Agreement as a result of the occurrence of the Outside Date will not be available to any party whose material failure to fulfill any obligation under the Merger Agreement has been the substantial or primary cause of, or resulted in, the failure of such acceptance to occur on or before the Outside Date); |
| • | if any governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Order or other law that (x) makes the consummation of the Merger illegal or otherwise prohibited, or (y) enjoins Parent and Anaplan from consummating the Merger, and, in each case, such Order or law shall have become final and non-appealable; provided that the right to terminate the Merger Agreement under this bullet shall not be available to any party whose material failure to perform or comply with its obligations pursuant to the Merger Agreement in respect of such Order or law; or |
| • | if Anaplan’s stockholders fail to approve the proposal to adopt the Merger Agreement at the Special Meeting, or any adjournment or postponement thereof, at which a vote on such proposal is taken; |
| • | By Anaplan: |
| • | if there is an inaccuracy in Parent’s or Merger Sub’s representations in the Merger Agreement, or a breach by Parent or Merger Sub of its covenants therein, that would, respectively, cause the representations and warranties or Parent or Merger Sub to not be true and correct, except as has not had and would not reasonably be expected to prevent or materially delay or materially impair the ability of Parent or Merger Sub to consummate the Merger or other transactions contemplated by the Merger Agreement or to be in material breach of their respective obligations under the Merger Agreement as of the Closing; provided, however, if such breach or inaccuracy is capable of being cured prior to the earlier of (A) the Outside Date and (B) the date that is twenty (20) business days from the date Parent is notified in writing by Anaplan of such breach, then Anaplan may not terminate the Merger Agreement (x) prior to such date if Parent and Merger Sub are taking reasonable efforts to cure such breach or inaccuracy and (y) following such date if such inaccuracy or breach is cured at or prior to such date (collectively, “Parent’s Inaccuracy in Representation”); |
| • | at any time prior to obtaining the Requisite Company Vote, if the Board of Directors, subject to compliance with the terms of the Merger Agreement, has authorized entry into an Acquisition Agreement with respect to a Superior Proposal, and concurrently with, and as a condition to, such termination, Anaplan pays a termination fee of $293,122,500; or |
| • | if (i) all of the conditions applicable to all parties’ obligations to consummate the Merger and Parent’s and Merger Sub’s obligations to consummate the Merger have been satisfied or waived (other than those that, by their nature, are to be satisfied at the closing; provided that those conditions could be satisfied if the closing were to occur), (ii) Anaplan has irrevocably confirmed in writing to Parent that it is prepared, willing and able to effect the consummation of the closing and the other transactions contemplated by the Merger Agreement in accordance with the terms thereof, and (iii) Parent fails to consummate the closing within three (3) business days following the later of (x) the date the closing should have occurred pursuant to the terms of the Merger Agreement and (y) delivery of such confirmation (collectively, “Parent’s Failure to Close”). |
| • | By Parent or Merger Sub: |
| • | if there is an inaccuracy in Anaplan’s representations in the Merger Agreement, or a breach by Anaplan of its covenants therein, that would, respectively, cause the condition with respect to Anaplan’s satisfaction of its representations and warranties as of the closing to not be satisfied or to be in material breach of its obligations under the Merger Agreement as of the closing; provided, however, if such breach or inaccuracy is capable of being cured prior to the earlier of (A) the Outside Date and (B) the date that is twenty (20) business days from the date Anaplan is notified in writing by Parent of such breach, Parent and Merger Sub may not terminate the Merger Agreement (x) prior to such date if Anaplan is taking reasonable efforts to cure such breach or inaccuracy or (y) following such date if such inaccuracy or breach is cured at or prior to such date (collectively, “Anaplan’s Inaccuracy in Representation”); or |
| • | if the Board of Directors or any committee thereof shall have made a Change in Recommendation (provided that the delivery of a Notice of Designated Superior Proposal and any amendment or update to such notice and the determination to so deliver such notice, update or amendment and public disclosure with respect thereto shall not, by itself, give rise to a right for Parent to terminate the Merger Agreement); provided, however, that Parent and Merger Sub may not terminate the Merger Agreement pursuant to the preceding sentence if Parent of Merger Sub fails terminate this Agreement pursuant the preceding sentence prior to 11:59 p.m., Pacific Time on the date which is ten (10) business days after Parent is notified in writing that the Anaplan Board has effected a Change in Recommendation. |
In the event that the Merger Agreement is terminated pursuant to the termination rights above, the Merger Agreement will become void and without any further liability on the part of any party thereto. However, certain provisions of the Merger Agreement relating to certain confidentiality obligations, certain financing-related indemnification and reimbursement obligations, the effect of termination of the Merger Agreement, termination fees, enforcement costs, expenses, and certain general provisions, will survive any termination of the Merger Agreement. Termination shall not relieve any party of liability and each party shall remain liable for any willful and material breach of its representations, warranties or covenants.
If the Merger Agreement is terminated in specified circumstances, the terminating party may be required to pay a termination fee. Parent would be entitled to receive a termination fee equal to $293,122,500 from Anaplan (the “Company Termination Fee”) under the following circumstances:
| • | (A) if the Merger Agreement is terminated (i) by Parent, Merger Sub or Anaplan due to the Merger not having occurred by the Outside Date (and at the time of any such termination the conditions, any applicable waiting period under the HSR Act shall have expired, and no Order or law has the effect of preventing, enjoining, prohibiting or making illegal consummation of the Merger) or (ii) by Parent or Merger Sub as a result of Anaplan’s Inaccuracy in Representation, (B) an Acquisition Proposal by a third party shall have been publicly announced after the date of the Merger Agreement and not withdrawn prior to such termination and (C) within 12 months after such termination (I) Anaplan enters |
| into a definitive agreement with respect to an Acquisition Proposal that is later consummated or (II) an Acquisition Proposal (in the case of each (I) and (II), whether or not involving the same Acquisition Proposal which was made after the date of the Merger Agreement) is consummated (with all references to 25% in the definition thereof being treated as references to 50.1% for purposes of this provision); |
| • | if the Merger Agreement is terminated by Parent or Merger Sub in connection with a Change in Recommendation; or |
| • | if the Merger Agreement is terminated by Anaplan due to authorization by its Board of Director to enter into an Acquisition Agreement with respect to a Superior Proposal at any time prior to obtaining the Requisite Company Vote. |
Anaplan would be entitled to receive a reverse termination fee equal to $586,245,000 from Parent (the “Parent Termination Fee”) under the following circumstances:
| • | if the Merger Agreement is terminated by Anaplan as a result of Parent’s Inaccuracy in Representation or Parent’s Failure to Close; or |
| • | if the Merger Agreement is terminated by either Parent or Merger Sub in connection with the failure of the Merger to be consummated by the Outside Date, in circumstances in which Anaplan would have been entitled to terminate the Merger Agreement as a result of Parent’s Inaccuracy in Representation or Parent’s Failure to Close. |
Each of the parties has expressly acknowledged and agreed on behalf of itself and its respective affiliates that each of the Company Termination Fee and the Parent Termination Fee is not a penalty, but rather each is liquidated damages in a reasonable amount that will compensate Parent and Merger Sub or the Company, respectively, in the circumstances in which the Company Termination Fee or the Parent Termination Fee, respectively, is payable for the efforts, expenses and resources expended and opportunity forgone while negotiating the Merger Agreement and in reliance on the Merger Agreement and on the expectation of the consummation of the transactions contemplated thereby, which amount would otherwise be impossible to calculate with precision.
Parent and Merger Sub are entitled to seek and obtain an injunction, specific performance and other equitable relief to prevent breaches of the Merger Agreement by Anaplan in the courts described in the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement, including Anaplan’s obligation to consummate the Merger.
Anaplan is entitled to seek and obtain an injunction, specific performance and other equitable relief to prevent breaches of the Merger Agreement by Parent and Merger Sub in the courts described in the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement.
If, prior to the Outside Date, as applicable, any of Parent, Merger Sub or Anaplan brings any Action to enforce specifically the performance of the terms and provisions of the Merger Agreement (other than any such terms and provisions that expressly survive the termination of the Merger Agreement) by any other party thereto, the Outside Date shall automatically be extended to the later of (i) 5:00 p.m. Pacific Time on the twentieth (20th) business day following the resolution of such Action and (ii) such other date and time established by the court presiding over such Action, as the case may be, solely if such later date and time is later than the Outside Date.
The election of Anaplan to pursue an injunction, specific performance or other equitable relief under the Merger agreement and the Equity Commitment Letter shall not restrict, impair or otherwise limit Anaplan from seeking to terminate the Merger Agreement and receiving monetary damages from Parent or Merger Sub pursuant to the Merger agreement in lieu of specific performance. However, under no circumstances is Anaplan permitted or entitled to receive both (x) a grant of specific performance of the obligation to close and (y) any money damages, including all or any portion of the Parent Termination Fee.
Except in specified circumstances, whether or not the Merger is completed, Anaplan, on the one hand, and Parent and Merger Sub, on the other hand, are each responsible for all of their respective costs and expenses incurred in connection with the Merger and the other transactions contemplated by the Merger Agreement; provided that all filing fees paid by any party in respect of any and all filings under the antitrust laws shall be borne by Parent.
Waiver
Prior to the Effective Time, any party may (a) extend the time for the performance of any obligation or other act of any other party, (b) waive any inaccuracy in the representations and warranties of any other party contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement and (c) waive compliance with any agreement of any other party or any condition to its own obligations contained in the Merger Agreement.
The Merger Agreement may be amended in writing by the parties to the Merger Agreement at any time before or after adoption of the Merger Agreement by stockholders; provided that, after receipt of the Requisite Company Vote, if any amendment shall be applicable law or in accordance with the rules and regulations of the NYSE require further approval of the stockholders of Anaplan or the sole stockholder of Merger Sub, as applicable, the effectiveness of such amendment shall be subject to the approval of the stockholders of the Company or the sole stockholder of Merger Sub, as applicable. No amendment that is adverse to the interests of any Lenders, together with its related parties, shall be effective as to such Lender, or its related parties, without the prior written consent of such Lender, or its related parties.
The Merger Agreement is governed by Delaware law without regard to any applicable conflicts of law; provided that any disputes involving any Lender, or its related parties, will be governed by and construed and enforced in accordance with New York law without giving regard to any applicable conflicts or choice of law principles that would result in the application of any law other than New York law.
