sc14d9
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION
STATEMENT
UNDER SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF
1934
MOTIVE, INC.
(Name of Subject
Company)
MOTIVE, INC.
(Name of Person Filing
Statement)
COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class of
Securities)
61980V107
(CUSIP Number of Class of
Securities)
Jack Greenberg
General Counsel and Secretary
Motive, Inc.
12515 Research Boulevard, Building 5
Austin, Texas
78759-2220
(512) 339-8335
(Name, Address and Telephone
Number of Person Authorized to
Receive Notice and
Communications on Behalf of the Person(s) Filing
Statement)
With copies to each of:
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Don J. McDermett, Jr.
Baker Botts L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6454
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Toby S. Myerson
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 0019-6064
(212) 373-3033
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Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
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TABLE OF CONTENTS
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Item 1.
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Subject
Company Information.
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The name of the subject company is Motive, Inc., a Delaware
corporation (the Company). The address of the
principal executive offices of the Company is 12515 Research
Boulevard, Building 5, Austin, Texas
78759-2220.
The telephone number of the Company at its principal executive
offices is
(512) 339-8335.
The title of the class of equity securities to which this
Solicitation/Recommendation Statement on
Schedule 14D-9
(together with the Exhibits and Annexes hereto, this
Statement) relates is the common stock, par value
$0.001 per share, of the Company (Common Stock). As
of the close of business on June 30, 2008,
27,754,569 shares of Common Stock were outstanding.
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Item 2.
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Identity
and Background of Filing Person.
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The filing person is the Company. The Companys name,
business address and business telephone number are set forth in
Item 1(a) above.
This Statement relates to the offer by Magic Acquisition
Subsidiary Inc. (Purchaser), a Delaware corporation
and a wholly-owned subsidiary of Lucent Technologies Inc., a
Delaware corporation (Parent) and a wholly-owned
subsidiary of Alcatel Lucent, a société anonyme
organized under the laws of the Republic of France
(Alcatel Lucent), to purchase all of the issued and
outstanding shares of Common Stock (each, a Share),
for $2.23 per Share, in cash to the seller (the Offer
Price) without interest and less any applicable
withholding taxes, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated July 16, 2008 (as
amended or supplemented from time to time, the Offer to
Purchase), and in the related Letter of Transmittal (the
Letter of Transmittal which, together with the Offer
to Purchase, constitute the Offer). The Offer is
further described in a Tender Offer Statement on
Schedule TO (as amended or supplemented from time to time,
the Schedule TO) filed by Alcatel Lucent,
Parent and Purchaser with the Securities and Exchange Commission
(the SEC) on July 16, 2008. A copy of each of
the Offer to Purchase and the Letter of Transmittal are attached
as Exhibit (a)(1)(A) and Exhibit (a)(1)(B), respectively, to the
Schedule TO, and each is incorporated herein by reference.
The Offer is being made pursuant to the Agreement and Plan of
Merger, dated as of June 16, 2008, by and among the
Company, Parent and Purchaser (the Merger
Agreement). The Merger Agreement provides that, among
other things, the Offer is contingent upon the valid tender of a
number of Shares equaling (x) not less than
17,639,096 Shares (the Minimum Condition),
which represents approximately 58.3% of the issued and
outstanding Shares (including for such purpose the
2.5 million Shares expected to be issued in connection with
the previously announced settlement of the Companys
securities class action lawsuit (the Settlement
Shares)), or (y) if Purchaser lowers the Minimum
Condition (as is permitted on a single occasion under the Merger
Agreement), not less than 15,493,417 Shares, which
represents approximately 51.2% of the issued and outstanding
Shares (including for such purpose the Settlement Shares), plus
the total number of Shares issued or to be issued between the
date of the Merger Agreement and the acceptance for payment by
Purchaser of Shares tendered in the Offer in response to certain
elections to exercise options or warrants to purchase Shares
(the Lowered Minimum Condition).
Pursuant to the terms of the Merger Agreement, the Company also
granted Purchaser, subject to certain conditions and
limitations, an irrevocable option (the
Top-Up
Option), to be exercised, in whole or in part, on or prior
to the 5th business day after completion of the Offer, to
acquire a number of Shares (the
Top-Up
Option Shares) that, when added to the number of Shares
owned by Parent, Purchaser and any of their respective
wholly-owned subsidiaries at the time of the exercise of the
Top-Up
Option, constitutes (x) if the Minimum Condition is
applicable, at least 90% of the number of Shares that will be
issued and outstanding immediately after giving effect to the
issuance of the
Top-Up
Option Shares on a fully diluted basis (including all Shares
issuable under options and warrants to purchase Shares), or
(y) if the Lowered Minimum Condition is applicable, at
least 90% of the number of
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Shares that will be issued and outstanding upon acceptance for
payment by Purchaser of Shares tendered in the Offer, including
the Top-Up
Option Shares, in either case at a price per Share equal to the
Offer Price.
The Merger Agreement also provides that following completion of
the Offer and, if necessary, the exercise of the
Top-Up
Option, the Company and Purchaser will complete a second-step
merger (the Merger) through the short
form procedures available under the Delaware General
Corporation Law (the DGCL) without a meeting of the
Companys stockholders, in which Purchaser will be merged
with and into the Company, with the Company as the surviving
corporation (such surviving corporation, the Surviving
Corporation). At the effective time of the Merger (the
Effective Time), each issued and outstanding share
of the common stock, par value $0.001 per share, of Purchaser
will be converted into one fully paid and nonassessable share of
common stock of the Surviving Corporation, all Shares that are
owned by the Company, Parent, or Purchaser and any of their
respective direct or indirect wholly-owned subsidiaries will be
cancelled and retired and will cease to exist and all other
issued and outstanding Shares (other than Dissenting Shares (as
defined below)) will be converted into the right to receive the
Offer Price, without interest thereon, less any required
withholding taxes (the Merger Consideration). Shares
held by stockholders who have properly demanded appraisal and
complied with the provisions of the DGCL relating to
dissenters rights of appraisal (Dissenting
Shares) will not be converted into a right to receive the
Merger Consideration, unless such stockholder fails to perfect,
withdraws or otherwise loses his, her or its right to appraisal.
At the Effective Time, each outstanding option to purchase
shares of Common Stock issued under one of the Companys
(or a predecessors) stock option plans will be cancelled
in exchange for the right to receive a single lump sum cash
payment equal to the product of (i) the excess, if any, of
the Merger Consideration over the per share exercise price of
such stock option and (ii) the number of Shares issuable
upon exercise of such stock option at the Effective Time, less
any applicable tax or other withholdings. No consideration shall
be payable in respect of any Company stock option for which the
per share exercise price equals or exceeds the Merger
Consideration and such Company stock option shall be cancelled
and have no further force or effect. In addition, prior to the
Effective Time, the Company will use its commercially reasonable
efforts to cancel all outstanding warrants to purchase Shares in
exchange for the right to receive a single lump sum cash payment
to be paid as promptly as practicable after the Effective Time,
equal to the product of (i) the excess, if any, of the
Merger Consideration over the per share exercise price of such
warrants and (ii) the total number of Shares for which such
warrants may be exercised. No consideration shall be payable in
respect of any such warrants for which the per share exercise
price equals or exceeds the Merger Consideration and such
warrants shall be cancelled and have no further force or effect.
A copy of the Merger Agreement is filed as Exhibit (e)(1) hereto
and is incorporated herein by reference.
Upon completion of the Merger, Purchaser intends to cause the
Company to file a Form 15 with the SEC to suspend the
Companys obligation to file reports under the Securities
Exchange Act of 1934, as amended (the Exchange Act),
and to terminate the registration of the Common Stock under the
Exchange Act. In the event that the number of stockholders of
the Company is sufficiently reduced as a result of the
completion of the Offer, Purchaser may take this action upon the
completion of the Offer rather than upon completion of the
Merger.
As set forth in the Schedule TO, the principal executive
offices of Parent and Purchaser are located at 600 Mountain
Avenue, Murray Hill, New Jersey 07974.
The Company is making information relating to the Offer and the
Merger available on the internet at
http://ir.motive.com.
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Item 3.
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Past
Contacts, Transactions, Negotiations and
Agreements.
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Certain contracts, agreements, arrangements or understandings
between the Company or its affiliates and (i) the
Companys executive officers, directors or affiliates, or
(ii) Parent, Purchaser or their respective executive
officers, directors or affiliates are, except as noted below,
described in the Information Statement that is attached hereto
as Annex A and is incorporated herein by reference (the
Information Statement), which is being furnished to
the Companys stockholders in connection with Parents
right pursuant to the Merger Agreement to designate persons to
the board of directors of the Company (the Board)
after acquiring Shares pursuant to the Offer, pursuant to
Rule 14f-1
under the Exchange Act. Except as described in this Statement
(including in the Exhibits hereto and in Annex A hereto) or
incorporated herein by reference, to the knowledge of the
Company, as of the date
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of this Statement, there are no material agreements,
arrangements or understandings or any actual or potential
conflict of interests between the Company or its affiliates and
(i) the Companys executive officers, directors or
affiliates or (ii) Purchaser, Parent or their respective
executive officers, directors or affiliates.
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(a)
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Agreements,
Arrangements or Understandings with Parent or
Purchaser
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The
Merger Agreement
The summary of the material terms of the Merger Agreement set
forth in Section 13 The Merger
Agreement of the Offer to Purchase and the description of
the conditions of the Offer contained in
Section 15 Conditions to Purchasers
Obligations of the Offer to Purchase are incorporated by
reference herein (the Offer to Purchase is filed as exhibit
(a)(1)(A) to the Schedule TO).
The summary of the Merger Agreement contained in the Offer to
Purchase is qualified in its entirety by reference to the Merger
Agreement, a copy of which is filed as Exhibit (e)(1) hereto and
is incorporated herein by reference.
The Merger Agreement governs the contractual rights among the
Company, Parent and Purchaser in relation to the Offer and the
Merger. The Merger Agreement has been filed as an exhibit to
this Statement to provide stockholders with information
regarding the terms of the Merger Agreement and is not intended
to modify or supplement any factual disclosures about the
Company, Parent or Purchaser in the Companys public
reports filed with the SEC. In particular, the Merger Agreement
and this summary of terms are not intended to be, and should not
be relied upon as, disclosure regarding any facts and
circumstances relating to the Company, Parent or Purchaser. The
representations and warranties contained in the Merger Agreement
were made for the sole benefit of the other parties thereto and
have been negotiated with the principal purpose of establishing
the circumstances in which Purchaser may have the right not to
consummate the Offer and Merger, or a party may have the right
to terminate the Merger Agreement, including if the
representations and warranties of another party prove to be
untrue due to a change in circumstance or otherwise, and to
allocate risk between the parties. Stockholders should not rely
on the representations and warranties as a characterization of
the actual state of facts as of the date of the Merger Agreement
or as of the date of this Statement since they were modified by
a confidential disclosure letter. The representations and
warranties may also be subject to a contractual standard of
materiality different from those generally applicable to
stockholders and are qualified by information set forth in the
confidential disclosure letter.
Nondisclosure
Agreement
On March 28, 2007, the Company and Alcatel Lucent entered
into a nondisclosure agreement to facilitate the mutual sharing
of information in order to allow the parties to evaluate a
potential transaction. This summary of the nondisclosure
agreement does not purport to be a complete description of the
terms and conditions of the nondisclosure agreement and is
qualified in its entirety by reference to the nondisclosure
agreement, which is filed as Exhibit (e)(4) hereto and is
incorporated herein by reference.
Exclusivity
Letter
On April 24, 2008, the Company and Alcatel Lucent entered
into a 60 day exclusivity letter whereby the Company
agreed, for a period of 60 days, not to solicit any
proposals from, enter into discussions with or execute
agreements with any party other than Alcatel Lucent in
connection with a proposed purchase of the Company. Pursuant to
the exclusivity letter, Alcatel Lucent granted the Company the
right to, at any time after 30 days following the execution
of the exclusivity letter (i) request written confirmation
from Alcatel Lucent that its proposed purchase price for the
Company was $67.8 million, subject to certain adjustments,
and if Alcatel Lucent failed to issue such confirmation,
provided the Company with the right to terminate the exclusivity
letter without payment of any of Alcatel Lucents fees and
expenses and (ii) terminate the exclusivity letter (subject
to payment of the fees and expenses incurred by Alcatel Lucent
solely in connection with its due diligence investigation, up to
$250,000) in the event the Board determined that such action was
necessary or appropriate in, and would be consistent with, the
exercise by the Board of its fiduciary duties. This summary of
the exclusivity letter does not purport to be a complete
description of the terms and conditions of the exclusivity
letter and is qualified in its entirety by reference to the
exclusivity letter, which is filed as Exhibit (e)(3) hereto and
is incorporated herein by reference.
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(b)
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Agreements,
Arrangements or Understandings with the Companys Executive
Officers and Directors
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Information
Statement
Certain agreements, arrangements or understandings between the
Company or its affiliates and certain of their directors,
executive officers and affiliates are described in the
Information Statement.
Interests
of Certain Persons
In considering the recommendation of the Board to tender Shares
in the Offer, stockholders should be aware that the
Companys executive officers and directors have agreements
or arrangements that may provide them with interests that may
differ from, or be in addition to, those of stockholders
generally. As described below, the directors and officers of the
Company have certain indemnification rights post-Merger, the
transactions contemplated by the Merger Agreement will
constitute a change in control of the Company for purposes of
the change in control employment agreements with executive
officers that could entitle an executive officer to severance
payments and other benefits. The Board was aware of these
agreements and arrangements during its deliberations of the
merits of the Merger Agreement and the transactions contemplated
therein and in determining to make the recommendation set forth
in this Statement.
Director
and Officer Indemnification and Insurance
Parent will cause the Surviving Corporation to assume all
indemnification obligations of the Company which now exist in
favor of directors and officers of the Company. Parent will also
cause the Surviving Corporation to indemnify current and former
directors, officers and employees of the Company and its
subsidiaries.
For six years after the consummation of the Merger, Parent must
cause the Surviving Corporation to maintain in effect the
Companys current director and officer liability insurance
policy on terms which are no less favorable than those currently
in effect, subject to a 275 percent cap on premiums and
certain other conditions.
The foregoing summary of the indemnification of directors and
officers and director and officer liability insurance does not
purport to be complete and is qualified in its entirety by
reference to the Merger Agreement, which is filed as Exhibit
(e)(1) hereto and is incorporated herein by reference.
Management
Arrangements with Parent
As of the date of this Statement, Parent is discussing the terms
of future employment agreements with Anna Clepper, the
Companys Vice President, Human Resources, Michael
Fitzpatrick, the Companys Chief Financial Officer, and
Richard Hanna, the Companys Chief Operating Officer, but,
as of the date of this Statement, the terms of such employment
agreements with Parent have not been finalized and there can be
no assurance that such agreements will be reached. The
discussions referenced above commenced after the Merger
Agreement was executed.
Section 16
Matters
Prior to the Effective Time, the Company will take all such
steps as may be required to cause any dispositions of Common
Stock or options resulting from the Merger by each officer and
director who is subject to the reporting requirements under
Section 16(a) of the Exchange Act, to be exempt from
liability under
Rule 16b-3
promulgated under the Exchange Act.
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(c)
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Effect of
the Offer and the Merger Agreement on Equity and Equity-Based
Awards Granted under the Companys Stock Plans
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Stock Options. Upon consummation of the Offer,
a change in control will result under each of the Companys
(or a predecessors) stock option plans and, as Purchaser
is not assuming any of the Companys stock options or stock
option plans, all stock options issued under the Companys
stock option plans will become fully vested at least
15 days prior to the Effective Time. At the Effective Time,
each outstanding option to purchase shares of Common
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Stock issued under one of the Companys (or a
predecessors) stock option plans will be cancelled in
exchange for the right to receive a single lump sum cash payment
equal to the product of (i) the excess, if any, of the
Merger Consideration over the per share exercise price of such
stock option and (ii) the number of Shares issuable upon
exercise of such stock option at the Effective Time, less any
applicable tax or other withholdings. No consideration shall be
payable in respect of any Company stock option for which the per
share exercise price equals or exceeds the Merger Consideration
and such Company stock option shall be cancelled and have no
further force or effect.
Warrants. Prior to the Effective Time, the
Company will use its commercially reasonable efforts to cancel
all outstanding warrants to purchase Shares (the
Warrants) in exchange for the right to receive a
single lump sum cash payment to be paid as promptly as
practicable after the Effective Time, equal to the product of
(i) the excess, if any, of the Merger Consideration over
the per share exercise price of such Warrants and (ii) the
total number of Shares for which such Warrants may be exercised.
No consideration shall be payable in respect of any such
Warrants for which the per share exercise price equals or
exceeds the Merger Consideration and such Warrants shall be
cancelled and have no further force or effect.
Restricted Common Shares. Upon consummation of
the Offer, a change in control will result with respect to all
of the Companys restricted stock agreements and, as
Purchaser is not assuming any of the restricted stock
agreements, all restricted stock issued under the Companys
restricted stock agreements will vest in full at that time.
However, it is expected that the Board will in the near term
authorize the immediate vesting in full of all restricted stock,
and the immediate termination of all restrictions thereon, in
order to allow the holders thereof to tender such restricted
stock in the Offer.
In addition to the amounts the Companys directors and
officers will receive as consideration for their directly held
shares of Common Stock in the Offer and the Merger, the
following directors and executive officers will receive the
payments set forth below based on the options and restricted
stock held by such persons:
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Restricted
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Director/Officer
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Options
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Stock
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Alfred T. Mockett,
Chairman of the Board, Chief Executive Officer
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$
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76,000
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$
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111,500
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Richard Hanna,
Chief Operating Officer
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$
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38,000
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Michael Fitzpatrick,
Chief Financial Officer
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$
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38,000
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Jack Greenberg,
General Counsel, Secretary
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$
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38,000
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Markus Remark,
Senior Vice President, World Wide Services
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Anna Clepper,
Vice President, Human Resources
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Thomas J. Meredith,
Director
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$
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54,672
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Virginia Gambale,
Director
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$
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33,171
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Michael J. Maples, Sr.,
Director
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$
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33,171
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David Sikora,
Director
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$
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33,171
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Change in Control Agreements and Severance
Payments. The Company currently has employment
agreements with Ms. Clepper and Messrs. Mockett,
Hanna, Fitzpatrick, Greenberg and Remark (each individually, an
Executive Officer or collectively, the
Executive Officers), all of which, except for the
current employment agreement between Mr. Remark and a
subsidiary of the Company, include post-employment severance and
change in control benefits. Mr. Remarks current
employment agreement does not provide for post-employment
severance or change in control benefits, however, under German
law and custom, Mr. Remark would receive severance payments
from the Company on terms and in amounts consistent with what is
customary for his position with the Company, such terms and
amounts to be negotiated between him and the Company. Each
Executive Officer, other
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than Mr. Remark, is eligible for severance benefits
following the occurrence of a change in control (as defined in
each employment agreement), if such Executive Officers
employment is terminated or if such Executive Officer resigns
for good reason (as defined in each employment agreement).
The following table, based on a change in control having
occurred as of June 30, 2008, shows the estimated payments
and benefits that would be provided to each Executive Officer
under his or her respective employment agreement following a
change in control. For Mr. Mockett and Ms. Clepper,
the actual accrued bonus amounts would be dependent on when in
the year the change in control occurs and such amounts are
payable only upon their termination or resignation. The accrued
bonus numbers below have been calculated based on two fully
completed quarters relative to the entire year. For
Messrs. Hanna, Greenberg, and Fitzpatrick, the accrued
bonus amount is not prorated but is for one year regardless of
when the change in control occurs. The Retention Bonus column
reflects the change in control acceleration of retention bonuses
originally to be paid to the Executive Officers in 2008 thru
2010. See Retention Bonus Program below.
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Accrued
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Retention
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Total Change
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Severance
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Bonus
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Bonus
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in Control
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Payment
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Payment
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Payment(1)
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Payments
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($)
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($)
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($)
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($)
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Alfred T. Mockett(2)
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350,000
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175,000
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429,667
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954,667
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Richard Hanna
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137,500
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165,000
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300,767
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603,267
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Markus Remark
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(3
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(3
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261,067
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(3
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Jack Greenberg
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112,500
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112,500
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204,500
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429,500
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Michael Fitzpatrick
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112,500
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112,500
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204,500
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429,500
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Anna Clepper
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107,500
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32,250
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183,017
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322,767
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(1) |
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Included in this column is each Executive Officers 2008
retention bonus grant, as follows: Mr. Mockett
$170,000; Richard Hanna $119,000; Jack
Greenberg $85,000; Michael Fitzpatrick
$85,000; Markus Remark $128,000; and Anna
Clepper $76,500. Also included is the value of the
stock price appreciation from the 2008 retention bonus grant
price of $1.70 and $1.50; for Alfred Mockett
$53,000; Richard Hanna $37,100; Jack
Greenberg $26,500; Mike Fitzpatrick
$26,500; Markus Remark $50,400; and
Anna Clepper $23,850. |
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(2) |
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The Company is also required to pay Mr. Mocketts
medical insurance for one year following termination of
employment. |
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(3) |
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Mr. Remarks current employment agreement with a
subsidiary of the Company, dated September 18, 2003 (the
Current Remark Employment Agreement), does not
provide for any severance payments or accrued bonus payments.
However, Mr. Remark would be entitled to severance payments
and benefits in accordance with German law and custom, which
payments and benefits are indeterminable as of the date of this
Statement. Accordingly, the Company cannot determine the
severance payment, accrued bonus payment or total change in
control payments that Mr. Remark would have received if a
change in control occurred as of June 30, 2008. In
connection with Mr. Remarks May 2008 promotion to
Senior Vice President, World Wide Services of the Company, the
Company has proposed to enter into a new employment agreement
with Mr. Remark in substantially the form attached as
Exhibit (e)(18) (the Proposed Remark Employment
Agreement), which has not been accepted by Mr. Remark
as of the date of this Statement, but which would, upon
execution, supersede the terms of the Current Remark Employment
Agreement. Pursuant to the terms of the Proposed Remark
Employment Agreement, Mr. Remark would be eligible for
severance benefits following the occurrence of a change in
control (as defined in the Proposed Remark Employment
Agreement), if his employment was terminated or if he resigned
for good reason (as defined in the Proposed Remark Employment
Agreement). Pursuant to the terms of the Proposed Remark
Employment Agreement, if a change in control occurred as of
June 30, 2008, Mr. Remark would have received $125,000
in severance payment, an estimated $62,500 in accrued bonus
payment (calculated based on two fully completed quarters
relative to the entire year, however, the actual accrued bonus
amounts would be dependent on when in the year the change in
control occurs and such amounts are payable only upon his
termination or resignation) and an estimated $448,567 of total
change of control payments (including his $261,067 retention
bonus payment). Additionally, under the Proposed Remark
Employment Agreement, the Company would be responsible for the
expense to repatriate Mr. Remark |
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to his home country if he was terminated by the Company. In the
event that Mr. Remark does not sign the Proposed Remark
Employment Agreement or an agreement in substantially the form
thereof, the Company expects that the total amount payable to
Mr. Remark in connection with a change in control of the
Company would be less than or equal to the $448,567 total change
in control payments described herein. The summaries of the
Current Remark Employment Agreement and the Proposed Remark
Employment Agreement contained herein are qualified in their
entirety by reference to the original transaction documents,
copies of which are filed as Exhibits (e)(17) and (e)(18) hereto
and are incorporated herein by reference. |
Pursuant to the Merger Agreement, upon a change in control, all
of the then unvested restricted stock then held by the Executive
Officers would be immediately vested in full. Pursuant to the
Merger Agreement all unvested stock options will vest (subject
to the consummation of the Merger) at least 15 days prior
to the Effective Time. If a change in control had occurred on
June 30, 2008, the following stock options and restricted
stock would have been subject to such accelerated vesting:
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Alfred
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Richard
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Markus
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Jack
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Mike
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Anna
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Restricted Stock/Options
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Mockett
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Hanna
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Remark
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Greenberg
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Fitzpatrick
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Clepper
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Restricted Stock
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50,000
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Options by Strike Price:
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$1.85
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133,334
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66,667
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(1)
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66,667
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(1)
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66,667
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(1)
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$2.30
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41,667
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(2)
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$2.65
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66,667
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(2)
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41,667
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(2)
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$3.40
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187,500
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(2)
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$8.69
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2,500
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$10.98
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1,875
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(1) |
|
Pursuant to the applicable option agreement, in the case of a
change in control, these unvested stock options will not
immediately vest unless the Executive Officers employment
is terminated as well. However, pursuant to the Merger Agreement
all unvested stock options will vest (subject to the
consummation of the Merger) at least 15 days prior to the
Effective Time. |
|
(2) |
|
Pursuant to Stock Option Termination Agreements dated
June 16, 2008, effective upon consummation of the Offer,
these options will be cancelled. |
Retention Bonuses. Pursuant to the
Companys Key Employee Incentive Bonus Plan, the Company
has awarded retention bonuses (Retention Bonuses) to
certain key employees of the Company, including the Executive
Officers. The Retention Bonuses are cash awards which vest in
accordance with the vesting schedules provided in each
participants award agreement. In addition, the Award
Agreements for the Executive Officers provide for a cash payment
(a Change in Control Premium Amount) with respect to
any Retention Bonus that has not yet fully vested at the time of
a change in control. The Change in Control Premium Amount for
any participant is equal to the product of the
participants Change in Control Premium (which equals the
excess, if any, of the fair market value of a share of Common
Stock on the last trading day before consummation of the change
in control over the fair market value of a share of Common Stock
on the participants date of award of the Retention Bonus)
and the quotient obtained by dividing (i) the original
dollar amount of the participants Retention Bonus by
(ii) the fair market value of a share of Common Stock on
the date of the award of the Retention Bonus. The Change in
Control Premium Amount is to be paid within 10 days
following the consummation of the change in control. The vesting
of a participants award will be accelerated in connection
with a change in control of the Company if either (i) the
successor entity (or a parent or subsidiary of such successor
entity) does not assume the award or (ii) such
participants employment is terminated by the Company or
successor entity, other than for cause, within 12 months
following the change in control (except in the case where the
participant is simultaneously re-employed by the Company or an
affiliate of the Company). In order for a participant to be
eligible to receive payment pursuant to the Retention Bonus,
such participant must have been continuously employed with the
Company from the date of the award through the date of payment,
except (i) where the vesting of a participants award
is accelerated due to a termination of employment by the Company
or a successor entity, other than for cause, following a change
in control, as described above, or (ii) where the
participants employment with the Company is terminated due
to death
7
or disability following the vesting of an award but prior to the
payment thereof. In addition, the Company, in its sole
discretion, may convert all of the unvested portion of any
Retention Bonus to a replacement restricted stock unit award on
the terms and subject to the conditions of the Key Employee
Incentive Bonus Plan.
The Company has granted Retention Bonuses pursuant to the Key
Employee Incentive Bonus Plan to the Executive Officers as
described below:
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Aggregate
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Amount of
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Retention
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Name
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Bonus ($)
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Alfred T. Mockett
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429,667
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Richard Hanna
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300,767
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Markus Remark
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261,067
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Jack Greenberg
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204,500
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Michael Fitzpatrick
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204,500
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Anna Clepper
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183,017
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Each of these Retention Bonuses vests in three equal annual
installments. However, upon a change in control of the Company,
in certain situations (as described above), the vesting of the
Retention Bonuses will be accelerated.
Contingent Retention Bonus Program. The
Company has established a contingent retention program that
consists of the implementation of retention bonuses for key
individual contributors. The plan provides for a cash bonus
payable March 31, 2009, with the only condition for payment
being continuous employment through that date. This timing was
selected to enable a one quarter transition period following the
close of a transaction, during which time Purchaser can
implement its own retention program(s) as it chooses. No
Executive Officers are participating in this contingent
retention program.
Employees. For a period of twelve months after
the Effective Time, the employees of the Company immediately
prior to the Effective Time that continue as employees of
Parent, the Surviving Corporation or their respective
subsidiaries will be provided with health, welfare and
retirement benefits that are no less favorable, in the
aggregate, than those provided by the Company and its
subsidiaries immediately prior to the Effective Time.
Extended Severance Benefit. The Company has
established an extended severance benefit to be offered to all
employees (other than those employees employed in India or who
currently have a three-month or greater severance benefit). This
benefit will provide that, in the event of their involuntary
termination not for cause, each such employees will receive a
three-month severance and continuation of the Companys
insurance contribution for three months. This benefit will not
apply to terminations after December 31, 2008.
|
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Item 4.
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The
Solicitation or Recommendation.
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(a)
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Recommendation
of the Board
|
The Board, at meetings held on June 11, 2008 and
June 16, 2008, among other things, (1) approved the
Merger Agreement, the terms of the Offer, the Merger and the
other transactions contemplated under the Merger Agreement,
(2) determined that the Merger Agreement and the
transactions contemplated therein, including the Offer and the
Merger, are advisable and in the best interests of the Company
and its stockholders, (3) determined that the consideration
to be paid to the stockholders of the Company in the Offer and
the Merger is fair to, and in the best interests of, those
stockholders, (4) approved the Merger Agreement and the
transactions contemplated thereby, for purposes of
Section 203 of the DGCL, (5) determined that, if
required under the DGCL, the Merger Agreement and the Merger be
submitted to a vote of the stockholders in accordance with the
DGCL, (6) elected that the Offer and the Merger, to the
extent of the Boards power and authority and to the extent
permitted by law, not be subject to any takeover laws that may
be applicable to Merger Agreement and the transactions
contemplated thereby and (7) recommended that the
stockholders accept the Offer and tender their Shares in the
Offer.
8
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(b)
|
Background
of the Transaction
|
For purposes of this Item 4, references to Alcatel
Lucent, unless otherwise specified, are to Parent,
Purchaser and Alcatel Lucent.
In April 2005, Alcatel Lucent (then known as Alcatel) and the
Company entered into a joint marketing and development agreement
for remote management of home networking devices. As a result of
such commercial relationship, Alcatel Lucent is both a joint
development partner for certain of the Companys products,
as well as a worldwide distribution partner for certain of the
Companys products and services. The approximate amount of
aggregate revenue to the Company resulting from Alcatel
Lucents distribution of these products was
$6.4 million as of December 31, 2007.
In the context of this commercial relationship, there has been
regular and ongoing contact between the Company and Alcatel
Lucent, during which the parties, from time to time, engaged in
preliminary discussions concerning Alcatel Lucents
potential acquisition of, investment in or additional commercial
relationship with the Company.
In March 2007, Alcatel Lucent executed a revised confidentiality
and non-disclosure agreement with the Company, replacing an
earlier agreement from January 19, 2006 in connection with
the joint marketing and development program. During April
through August 2007, representatives of the Company and Alcatel
Lucent held preliminary discussions surrounding a potential
acquisition of the Company by Alcatel Lucent. Such discussions
did not prove fruitful and were subsequently terminated. Such
discussions did not lead to a definitive agreement.
On November 6, 2007, the Company announced that it had
engaged Thomas Weisel Partners LLC (Thomas Weisel
Partners) to assist the Company in evaluating strategic
alternatives to maximize stockholder value, including a possible
sale or other business combination transaction.
As part of its evaluation of strategic alternatives for the
Company, representatives of Thomas Weisel Partners contacted
potential bidders about a possible acquisition of the Company,
and certain of such potential bidders executed confidentiality
and non-disclosure agreements. Thirty-four potential bidders
were contacted (or made inbound contacts) and management
presentations were made to 10 potential bidders.
On November 16, 2007, representatives of Thomas Weisel
Partners contacted representatives of Alcatel Lucent to
advise Alcatel Lucent that the Company was considering a
possible sale of the Company and Alcatel Lucent expressed an
interest in participating in a possible sale of the Company.
On December 3, 2007, representatives of Alcatel Lucent
attended a management presentation conducted by representatives
of the Company and Thomas Weisel Partners.
Throughout January 2008, Alcatel Lucent and other potential
bidders conducted preliminary due diligence investigations of
the Company, which also included meetings with certain members
of senior management of the Company.
On January 29, 2008, Alcatel Lucent submitted a non-binding
indication of interest to acquire the Company for approximately
$90 million. The non-binding indication of interest was
conditioned upon, among other things, Alcatel Lucent completing
its ongoing due diligence investigation of the Company, the
settlement of the Companys securities class action
litigation and shareholder derivative litigation becoming final,
non-appealable and fully funded, delivery of certain audited
financial statements and resolution (or the reasonable prospect
for resolution) of the investigation into the Company being
conducted by the SEC.
On February 4, 2008, Alcatel Lucent was notified by Thomas
Weisel Partners that it had not been selected to proceed into
the second phase of the bidding process. At that time two other
potential bidders were permitted to continue in the process.
From February 5, 2008 through February 14, 2008,
representatives of Alcatel Lucent continued to express its
interest to the Company to participate in the second phase of
the bidding process. As a result of such discussions, on
February 15, 2008, Alcatel Lucent was added to the second
phase of the bidding process.
9
On February 29, 2008, Paul, Weiss, Rifkind,
Wharton & Garrison LLP (Paul Weiss),
transaction counsel to the Company, circulated a draft merger
agreement to the potential bidders that participated in the
second phase of the bidding process, including Alcatel Lucent.
Concurrently therewith, Baker Botts L.L.P. (Baker
Botts), corporate counsel to the Company, circulated a
draft disclosure letter relating to the then current draft of
the merger agreement.
On March 18, 2008, Alcatel Lucent submitted a revised bid
to purchase the Company for a per share purchase price of $2.23,
subject to certain conditions, which conditions were
substantially similar to those contained in the indication of
interest submitted by Alcatel Lucent on January 29, 2008
discussed above.
On March 25, 2008, representatives of Thomas Weisel
Partners informed Alcatel Lucent that its bid had been rejected.
Alcatel Lucent was informed that its offer price was equal to or
below the proposals of other bidders and that such other
proposals contained proposed closing conditions that might be
more easily attained by the Company.
On March 27, 2008, the Board determined that a bid by
another bidder was perceived to be less conditional than Alcatel
Lucents bid and on March 28, 2008 the Company entered
into an exclusivity agreement with such other bidder. On
April 9, 2008, that exclusivity agreement was terminated as
the parties could not reach agreement on terms for a definitive
agreement.
On April 11, 2008, representatives of the Company and
Alcatel Lucent discussed and agreed to convene certain meetings
in order to re-engage discussions on the potential purchase of
the Company by Alcatel Lucent.
On April 13, 2008, the Board met to discuss the status of
discussions with Alcatel Lucent and appropriate next steps.
From April 15 through April 18, 2008, representatives of
the Companys management met with representatives of
Alcatel Lucent and Bryan Cave LLP (Bryan Cave),
legal counsel to Alcatel Lucent, to discuss different structures
with respect to a potential business combination between the
Company and Alcatel Lucent, including the Companys
proposal of a near-term equity investment by Alcatel Lucent.
Between April 16, 2008 and April 24, 2008,
representatives of the Company and Alcatel Lucent negotiated the
terms of an exclusivity letter whereby the Company agreed, for a
period of 60 days, not to solicit any proposals from, enter
into discussions with or execute agreements with any party other
than Alcatel Lucent in connection with a proposed purchase of
the Company. Pursuant to the exclusivity letter, which was
executed on April 24, 2008, Alcatel Lucent granted the
Company the right to, at any time after 30 days following
the execution of the exclusivity letter (i) request written
confirmation from Alcatel Lucent that its proposed purchase
price for the Company was $67.8 million, subject to certain
adjustments, and if Alcatel Lucent failed to issue such
confirmation, provided the Company with the right to terminate
the exclusivity letter without payment of any of Alcatel
Lucents fees and expenses and (ii) terminate the
exclusivity letter (subject to payment of the fees and expenses
incurred by Alcatel Lucent solely in connection with its due
diligence investigation, up to $250,000) in the event the Board
determined that such action was necessary or appropriate in, and
would be consistent with, the exercise by the Board of its
fiduciary duties. Following the execution of the exclusivity
letter, Alcatel Lucent continued its due diligence investigation
of the Company until the execution of the Merger Agreement.
On April 30, 2008, Paul Weiss distributed a revised draft
merger agreement to representatives of Alcatel Lucent and
Bryan Cave. From April 30, 2008 until the execution of the
Merger Agreement, the parties and their respective legal counsel
exchanged drafts of the merger agreement and the related
disclosure letter and held extensive discussions and
negotiations relating to the terms and conditions of the draft
merger agreement and the information included in the disclosure
letter.
On May 6, 2008, Bryan Cave delivered to Paul Weiss a list
of significant issues for discussion concerning the draft merger
agreement, which issues related principally to: (i) the
scope of certain representations and warranties to be made by
the Company, (ii) covenants to be given by the Company in
respect of its business between the execution of a definitive
merger agreement and the closing of the merger,
(iii) termination events and the payment of a termination
fee or reimbursement of transaction expenses by the Company, and
(iv) conditions to the completion by Alcatel Lucent of a
tender offer for the Companys Shares. On May 7, 2008,
representatives of Paul Weiss and
10
Bryan Cave participated in a conference call to discuss the
issues list previously provided by Bryan Cave concerning the
draft merger agreement.
On May 9, 2008, Alcatel Lucent informed the Company that it
had rejected the Companys aforementioned near-term equity
investment proposal, and Alcatel Lucent submitted to the
Company, in lieu thereof, a term sheet for a secured loan
facility between Alcatel Lucent and the Company.
On May 13, 2008, representatives of Alcatel Lucent and the
Company discussed by telephone significant issues regarding the
transaction. In particular, the Company rejected Alcatel
Lucents secured loan facility proposal, discussed the
proposed tender offer conditions in the draft Merger Agreement,
and requested an update on the status of Alcatel Lucents
due diligence investigation.
Over the next two weeks, representatives of the Company, Alcatel
Lucent, Paul Weiss, Baker Botts and Bryan Cave engaged in
various discussions and negotiations regarding the terms and
conditions of the proposed transaction. Such discussions related
principally to issues surrounding the covenants to be given by
the Company in respect of the conduct of its business between
the execution of a definitive merger agreement and the closing
of the merger, termination events and the payment of a
termination fee or reimbursement of transactions expenses by the
Company, and conditions to the completion by Alcatel Lucent of a
tender offer for the Companys Shares.
On May 29, 2008, following a request by the Company in
accordance with the exclusivity letter discussed above, Alcatel
Lucent confirmed in writing to the Company that the proposed
purchase price for the Company remained $67.8 million,
subject to certain permitted adjustments.
Over the next several days, representatives of the Company and
Alcatel Lucent, including their respective legal counsel,
engaged in discussions and intensive negotiations to finalize
the terms and conditions of the merger agreement.
From June 10, 2008, to June 12, 2008, representatives
of Alcatel Lucent met with representatives of the Company at the
Companys headquarters in Austin, Texas to discuss human
resources and certain other issues.
On June 11, 2008, the Board met with its advisers and
management to review the status of negotiations and the proposed
transaction with Alcatel Lucent. At such meeting, the Board,
subject to the resolution of certain open issues, determined
that it is advisable for the Company to enter into the Merger
Agreement, approved the execution, delivery and performance of
the Merger Agreement and determined to recommend that the
stockholders accept the Offer and tender their Shares to
Purchaser pursuant to the Offer. At such meeting, one member of
the Board was unable to attend.
From June 11, 2008 to June 16, 2008, the parties
continued to engage in discussions and negotiations with respect
to the terms of the merger agreement and the related disclosure
letter and, on June 16, 2008, final drafts of the Merger
Agreement and the disclosure letter related thereto were
distributed to the parties and their representatives. On the
evening of June 16, 2008, the Board met with its advisers
and management and, after being briefed on the status of the
negotiations and final revisions to the terms of the Merger
Agreement, reaffirmed its resolutions of June 11, 2008. At
such meeting, one member of the Board was unable to attend.
Shortly after such Board meeting, the Merger Agreement was
executed.
On June 17, 2008, Alcatel Lucent and the Company issued a
joint press release announcing execution of the Merger Agreement.
|
|
(c)
|
Reasons
for the Recommendation of the Board of Directors
|
In approving the Offer, the Merger, the Merger Agreement and the
transactions contemplated thereby and recommending that all
stockholders accept the Offer and tender their Shares pursuant
to the Offer, the Board considered a number of factors. The
following is a summary of the material factors that supported
this decision:
|
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|
|
Company Operations and Financial
Condition. The Board considered the current and
historical financial condition and results of operations of the
Company, as well as its prospects and objectives, including the
significant risks involved in achieving those prospects and
objectives, and the current and expected conditions in the
broadband and mobile service management software industry.
|
11
|
|
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|
|
Challenges of Remaining Independent. The Board
considered the continuing challenges facing the Company,
including the size of the Company compared to its customers and
competitors, the continued delinquent status of the Company
relative to its periodic SEC reports, its attendant inability to
hold annual stockholders meetings, and the cost and
management attention required to become current with such
reports, the fact that the Shares are not listed or admitted to
trading on any securities exchange, general economic,
environmental and market conditions, and the implications of
those challenges on prospects for the Company as a stand-alone
company.
|
|
|
|
Thomas Weisel Partners Fairness Opinion. The
Board has received a presentation from its financial advisor,
Thomas Weisel Partners, and the written opinion of Thomas Weisel
Partners to the effect that, as of the date of the opinion and
based upon and subject to the various considerations set forth
in the opinion, the Offer Price to be received by the
stockholders in the Offer is fair from a financial point of view
to such holders. A summary of the Thomas Weisel Partners opinion
is set forth under the caption Opinion of Thomas Weisel
Partners below. The full text of the Thomas Weisel
Partners opinion dated June 16, 2008, which sets forth,
among other things, the assumptions made, procedures followed,
matters considered and limitations on the scope of the review
undertaken by Thomas Weisel Partners in rendering its opinion,
is attached as Annex B and is incorporated in its entirety
herein by reference. Company stockholders are urged to, and
should, carefully read the Thomas Weisel Partners opinion in its
entirety. The Thomas Weisel Partners opinion addresses only the
fairness, from a financial point of view and as of the date of
the opinion, to holders of Common Stock of the Offer Price
proposed to be paid in the Offer. The Thomas Weisel Partners
opinion was directed solely to the Board and was not intended to
be, and does not constitute, a recommendation to any Company
stockholder as to how any stockholder should vote or act on any
matter relating to the proposed Offer or Merger. The Board was
aware that Thomas Weisel Partners becomes entitled to certain
fees described in Item 5 of this Statement contingent upon
the consummation of the Offer.
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|
Thomas Weisel Process. The Board considered
the eight-month process that it had undertaken with assistance
from Thomas Weisel Partners to review strategic alternatives for
the Company, including Thomas Weisel Partners efforts to
identify and approach numerous potential acquirors for the
Company, and the fact that the terms proposed by Purchaser and
Parent, as reflected in the Merger Agreement, were superior to
any other definitive proposal that was received during this
process. The Board considered the risk of loss of opportunity to
enter into a transaction with Parent and Purchaser as well as
the lack of any assurance that there would be another
opportunity in the future for the Companys stockholders to
receive as significant a premium over the prevailing market
price of the Shares as that contemplated by the proposed
transaction.
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|
|
|
Offer Price. The Board considered that the
Offer Price represented a premium of approximately 53% over the
closing price of the Shares on June 16, 2008, and a premium
of approximately 51% over the average closing prices of the
Shares for the 90 days prior to June 16, 2008, the
date of the parties execution of the Merger Agreement.
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|
|
Trading Price of the Company Common Stock. The
Board considered the recent and historical stock price
performance of the Shares.
|
|
|
|
The Merger Agreement. The Board considered the
financial and other terms of the Offer, the Merger and the
Merger Agreement, including the benefits of the transaction
being structured as a first-step tender offer and second-step
merger, and the nature of the arms length negotiation of
the Merger Agreement.
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|
|
|
Presentations and Management View. The Board
considered the presentations by, and discussion of the terms of
the Merger Agreement with, the Companys senior management,
Paul Weiss, Baker Botts and Thomas Weisel Partners. The Board
also considered the belief of the Companys senior
management that, based on its review of the Companys
strategic alternatives and based on Thomas Weisel Partners
experience in the industry and contact with other potential
acquirors, it was highly unlikely that any party would propose
an alternative transaction that would be more favorable to the
Company and its stockholders than the Offer and the Merger.
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|
|
Strategic Alternatives. The Board considered,
in consultation with Thomas Weisel Partners, potential strategic
alternatives available to the Company and the viability and
risks associated with each alternative,
|
12
|
|
|
|
|
including the prospects for the Company continuing on a
stand-alone basis and the risks associated with achieving and
executing upon the Companys business plan, both short-term
and long-term. In particular, the Board considered the increased
competition in the broadband and mobile service management
software industry and the fact that greater size, critical mass
and resources are increasingly required for companies to
successfully compete in this industry. The Board also considered
Parent to be an attractive strategic acquirer, having a
complementary business platform with significant strategic
relevance to the Companys business, substantial financial
resources and a strong business reputation.
|
|
|
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|
|
Certainty of Value, Lack of Financing
Contingency. The fact that the Offer and the
Merger, because they are solely for cash consideration, coupled
with the absence of any financing condition, the experience,
reputation and financial condition of Parent, provided certainty
as to the value of the consideration to be received in the
proposed transactions and that Parents obligations to
purchase Shares in the Offer and to close the Merger were not
subject to its ability to obtain financing.
|
|
|
|
Ability to Pursue Subsequent Superior
Proposals. The Companys ability, prior to
the Acceptance Date, to entertain subsequent acquisition
proposals if certain conditions are satisfied, including where
the Company receives an unsolicited bona fide acquisition
proposal that the Board reasonably determines in good faith
(after consultation with its outside counsel and its financial
advisor) is likely to result in or constitute a Superior
Proposal (as defined in the Merger Agreement).
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|
Ability to Change Recommendation. The
Boards ability, prior to the Acceptance Date and subject
to, under certain circumstances, the payment of Parents
and Purchasers expenses of up to $1.25 million or a
termination fee of $3 million (including Parents and
Purchasers expenses incurred in connection with the
transaction), as applicable, to change its recommendation
regarding the advisability of the Offer and the Merger if it
concludes in good faith, after receiving the advice of outside
legal counsel, that the failure of the Board to make such a
change in recommendation would be reasonably likely to result in
a breach of its fiduciary duties under applicable law.
|
|
|
|
Ability to Terminate Merger Agreement. The
Companys right to terminate the Merger Agreement prior to
the Acceptance Date (i) to enter into an acquisition
transaction with a third party that the Board determines to be a
Superior Proposal if certain conditions are satisfied and the
Company pays a termination fee (including expenses incurred by
Parent and Purchaser in connection with the transaction) of up
to $3 million to Parent; and (ii) in the event of
certain breaches or failures by Parent or Purchaser of their
representations, warranties, covenants or agreements set forth
in the Merger Agreement.
|
|
|
|
Availability of Dissenters Rights. The
Board considered the fact that stockholders of the Company who
believe that the terms of the Offer and the Merger are unfair
have the right to dissent from the Merger and demand payment of
the fair value for their shares, in lieu of the consideration to
be received in the Merger, in accordance with the DGCL, if such
stockholders do not tender their shares in the Offer, do not
vote in favor of the Merger and otherwise comply with the DGCL.
|
|
|
|
Costs of Operating as a Public Company. The
Board considered the fact that maintaining the Company as a
public entity is expensive both in terms of actual costs,
including providing audited financial statements and other
information to stockholders, retaining disinterested directors,
and complying with the extensive regulations that are applicable
to public companies.
|
The following is a summary of the material negative
considerations that the Board weighed against the foregoing
factors:
|
|
|
|
|
The covenant in the Merger Agreement prohibiting the Company
from soliciting other potential acquisition proposals, and
restricting its ability to entertain other potential acquisition
proposals unless certain conditions are satisfied.
|
|
|
|
The provision in the Merger Agreement requiring the Company to
(i) pay Parents and Purchasers expenses of up
to $1.25 million or a termination fee of $3 million
(including Parents and Purchasers expenses incurred
in connection with the transaction), as applicable, if the
Company terminates the Merger Agreement or the Board changes its
recommendation regarding the advisability of the Offer and
Merger under
|
13
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|
|
|
|
certain circumstances and (ii) pay Parents and
Purchasers expenses of up to $1.25 million or a
termination fee of $3 million (including Parents and
Purchasers expenses incurred in connection with the
transaction), as applicable, if Parent should terminate the
Merger Agreement under certain circumstances.
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|
|
|
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|
The covenants in the Merger Agreement restricting the conduct of
the Companys business prior to the completion of the
Merger to conduct that is in the ordinary course consistent with
past practice in all material respects, as well as various other
operational restrictions on the Company and its subsidiaries
prior to the completion of the Merger.
|
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|
The risks and costs to the Company if the Offer does not close,
including the diversion of management and employee attention,
employee attrition and the effect on business and customer
relationships, as well as the Companys ability to attain
satisfaction of all conditions to Purchasers obligation to
consummate the Offer, including the condition requiring the
final, non-appealable resolution of the Companys
securities class action and derivative litigation and the
condition requiring the Companys delivery to Parent and
Purchaser of unqualified audited financial statements for the
years ended December 31, 2006 and 2007.
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|
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|
The risk that Parent may terminate the Merger Agreement and not
complete the Offer in certain circumstances, including if there
is a Material Adverse Effect (as defined in the Merger
Agreement) on the Companys business, results of operation
or financial condition, or if the Company does not perform its
obligations under the Merger Agreement in all material respects.
|
|
|
|
The Board recognized that completion of the Offer and Merger as
contemplated by the Merger Agreement would eliminate the
opportunity for the Companys stockholders to participate
in the future growth and profits of the Company. The Board also
realized that the termination fee and expense reimbursement
required by the terms of the Merger Agreement to be paid by the
Company in certain circumstances would make it more costly for
another potential purchaser to acquire the Company.
|
The foregoing discussion of the information and factors
considered by the Board is not intended to be exhaustive, but
merely summarizes the material factors considered. The members
of the Board evaluated the Offer, the Merger and the Merger
Agreement in light of their knowledge of the business, financial
condition and prospects of the Company and the strategic
alternatives to the Company, and based upon the advice of
financial and legal advisors. In view of the number and wide
variety of factors, both positive and negative, considered by
the Board, the Board did not find it practical to, and did not,
quantify or otherwise assign relative or specific weights to the
factors considered or determine that any factor was of
particular importance. Rather, the Board viewed its position and
recommendations as being based on the totality of the
information presented to and considered by the Board. In
addition, individual members of the Board may have given
differing weights to different factors and may have viewed
certain factors more positively or negatively than others.
Opinion
of Thomas Weisel Partners
In November 2007, the Company retained Thomas Weisel Partners to
act as the Companys financial advisor in connection with
the evaluation of strategic alternatives, including a possible
sale, merger, or other business combination. On June 16,
2008, Thomas Weisel Partners delivered to the Board its oral
opinion that, as of that date, the consideration to be received
by the Companys stockholders in the Offer and the Merger
was fair to the stockholders from a financial point of view.
Thomas Weisel Partners delivered its written opinion dated
June 16, 2008 confirming its oral opinion.
The Board determined the consideration the Companys
stockholders would receive in the Offer and the Merger through
negotiations with Parent. The Company did not impose any
limitations on Thomas Weisel Partners with respect to the
investigations made or procedures followed in rendering its
opinion.
The full text of the written opinion that Thomas Weisel
Partners delivered to the Board is attached as Annex B and
is incorporated herein by reference. Stockholders of the Company
should read this opinion carefully and in its entirety. However,
the following summary of the Thomas Weisel Partners opinion is
provided for review by the stockholders of the Company.
14
Thomas Weisel Partners opinion addresses only the
financial fairness of the Offer Price to the stockholders and
does not address the relative merits of the Offer, the Merger
and any alternatives to the Offer and the Merger, the
Companys underlying decision to proceed with or effect the
Offer, the Merger, any other transaction as compared to the
Offer or the Merger, or any other aspect of the transactions
contemplated by the draft Merger Agreement. In addition, Thomas
Weisel Partners opinion does not address the fairness of
the Offer or the Merger to, or any consideration received in
connection therewith by, the holders of any other class of
securities, creditors or other constituencies of the Company,
nor does it address the fairness, financial or otherwise, of the
amount or nature of any compensation payable to or to be
received by, or any equity issued to, any of the Companys
officers, directors or employees, or any class of such persons,
in connection with the Offer or the Merger relative to the Offer
Price. Thomas Weisel Partners opinion does not address the
consequences of, nor does Thomas Weisel Partners express any
opinion as to any consideration that may be received in the
Merger by, stockholders perfecting and pursuing appraisal rights
as permitted by applicable law.
In connection with its opinion, Thomas Weisel Partners, among
other things:
(1) reviewed certain publicly available financial and other
data with respect to the Company, including certain consolidated
financial statements and certain other relevant financial and
operating data relating to the Company made available from
published sources and from the internal records of the Company;
(2) reviewed the financial terms and conditions of the
Merger Agreement;
(3) compared the Company from a financial point of view
with certain other companies which Thomas Weisel Partners
deemed to be relevant;
(4) considered the financial terms, to the extent publicly
available, of selected recent business combinations which Thomas
Weisel Partners deemed to be comparable, in whole or in part, to
the Offer and the Merger;
(5) made inquiries regarding and discussed the Offer, the
Merger and the draft Merger Agreement and the draft agreements
ancillary thereto and other matters related thereto with the
Companys counsel and auditor;
(6) reviewed the reported price and trading activity for
the Companys Shares;
(7) reviewed and discussed with representatives of the
Companys senior management certain information of a
business and financial nature regarding the Company, furnished
to Thomas Weisel Partners by senior management, including
certain financial forecasts and related assumptions; and
(8) performed such other analyses and examinations as
Thomas Weisel Partners have deemed appropriate, including,
without limitation, examinations of current regulatory
activities and investigations involving Company, which Thomas
Weisel Partners deemed to be material to the Companys
business or its ability to regain its status as a company listed
on a national securities exchange.
In preparing its opinion, Thomas Weisel Partners did not assume
any responsibility to independently verify, and has not
independently verified, the information referred to above.
Instead, with the Companys consent, Thomas Weisel Partners
relied on the information being accurate and complete in all
material respects. With respect to the financial forecasts of
the Company provided to Thomas Weisel Partners by the
Companys management, upon the advice of the Companys
management and with the consent of the Companys
management, Thomas Weisel Partners assumed for purposes of
its opinion that the forecasts have been reasonably prepared on
bases reflecting the best available estimates and judgments of
the Companys management at the time of preparation as to
the future financial performance of the Company and that they
provide a reasonable basis upon which Thomas Weisel Partners
could form its opinion. Thomas Weisel Partners also made the
following assumptions, in each case with the Companys
consent:
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|
|
with respect to the financial forecasts for the Company provided
to Thomas Weisel Partners by the Companys management,
Thomas Weisel Partners, for the purposes of its opinion,
adjusted such forecasts with respect to the growth of the
mobility business. The Company discussed the adjusted forecasts
with Thomas Weisel Partners and acknowledged their use of such
adjusted forecasts in arriving at their opinion;
|
15
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that there have been no material changes in the assets,
financial condition, results of operations, business or
prospects of the Company since the respective dates of the last
financial statements made available to Thomas Weisel Partners;
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that the Offer and the Merger will be consummated in a manner
that complies with the applicable provisions of the Securities
Act of 1933, as amended (the Securities Act), the
Exchange Act, and all other applicable federal and state
statutes, rules and regulations; and
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|
that the executed Merger Agreement will conform in all material
respects to the draft Merger Agreement reviewed by Thomas Weisel
Partners on June 16, 2008 and that the Offer and the Merger
will be consummated in accordance with the terms described in
the Merger Agreement, without any further amendments thereto,
and without waiver by the Company, Purchaser and Parent of any
of the conditions to any partys obligations thereunder.
|
In addition, for purposes of their opinion:
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|
|
Thomas Weisel Partners has assumed no responsibility for, and
assumed that the Company has obtained the advise of outside
counsel and independent accountants as to all legal and
financial reporting matters with respect to the Company, the
Offer, the Merger and the draft Merger Agreement, including the
(i) status and potential implications of the litigation,
regulatory activities and investigations involving the Company
and (ii) impact of litigation, regulatory activities and
investigations on the (A) financial reporting of the
Company and (B) periodic reports of the Company filed with
the SEC, the results of which advice Thomas Weisel Partners
has relied on without further investigation where it deemed it
appropriate; and
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|
The Thomas Weisel Partners opinion was based on economic,
monetary, market and other conditions as in effect on, and the
information made available to Thomas Weisel Partners as of, the
date of its opinion. Accordingly, although subsequent
developments may affect its opinion, Thomas Weisel Partners has
not assumed any obligation to update, revise or reaffirm its
opinion.
|
The following represents a brief summary of the material
financial analyses performed by Thomas Weisel Partners in
connection with providing its opinion to the Board. Some of the
summaries of financial analyses performed by Thomas Weisel
Partners include information presented in tabular format. In
order to fully understand the financial analyses performed by
Thomas Weisel Partners, stockholders should read the tables
together with the text of each summary. The tables alone do not
constitute a complete description of the financial analyses.
Considering the data set forth in the tables without considering
the full narrative description of the financial analyses,
including the methodologies and assumptions underlying the
analyses, could create a misleading or incomplete view of the
financial analyses performed by Thomas Weisel Partners.
Motive Stock Performance Analysis. Thomas
Weisel Partners examined the daily historical volume and trading
prices of the Common Stock. The
30-day,
60-day,
90-day, and
last twelve months average trading prices of the Common Stock
were $1.49, $1.45, $1.47 and $1.82, respectively.
16
Historical and Projected Financial
Performance. Thomas Weisel Partners reviewed
certain historical annual and quarterly results for the Company.
In addition, Thomas Weisel Partners reviewed two separate
estimates of the Companys possible future financial
performance for fiscal and calendar years 2008 through 2012
developed in discussion with the Companys management. One
estimate was based on the assumptions that (i) there would
be slower growth than anticipated by management in the mobility
business and (ii) the Companys operating margins
would be reflective of historical trends offset by the pending
resolution of the re-audit, shareholder litigation and SEC
investigation, (the Base Case). The other estimate
was based on the assumptions that (i) the Companys
revenue growth would be consistent with managements
internal forecasts and (ii) the Companys operating
margins would improve relative to historical trends due to
projected changes in business mix as well as due to the pending
resolution of the re-audit, shareholder litigation and SEC
investigation (Adjusted Case). A summary of the Base
Case and Adjusted Case is set forth in the following table:
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|
|
Fiscal Year Ending December 31
|
|
Actual
|
|
|
Estimated
|
|
|
Estimated
|
|
|
Estimated
|
|
|
Estimated
|
|
|
Estimated
|
|
Financial Statistic ($in millions)
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
Base Case
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
63.6
|
|
|
$
|
72.4
|
|
|
$
|
79.9
|
|
|
$
|
89.8
|
|
|
$
|
101.6
|
|
|
$
|
114.5
|
|
EBITDA
|
|
$
|
(23.6
|
)
|
|
$
|
(4.5
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
0.6
|
|
|
$
|
2.7
|
|
EBITDA Margin
|
|
|
(37.1
|
)%
|
|
|
(6.2
|
)%
|
|
|
(0.5
|
)%
|
|
|
(0.5
|
)%
|
|
|
0.6
|
%
|
|
|
2.4
|
%
|
Net Income
|
|
$
|
(32.1
|
)
|
|
$
|
(10.6
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(1.6
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
1.6
|
|
Net Income Margin
|
|
|
(50.5
|
)%
|
|
|
(14.6
|
)%
|
|
|
(2.5
|
)%
|
|
|
(1.8
|
)%
|
|
|
(0.5
|
)%
|
|
|
1.4
|
%
|
Adjusted Case
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
63.6
|
|
|
$
|
73.9
|
|
|
$
|
83.0
|
|
|
$
|
95.0
|
|
|
$
|
109.8
|
|
|
$
|
126.2
|
|
EBITDA
|
|
$
|
(23.6
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
3.5
|
|
|
$
|
4.9
|
|
|
$
|
7.5
|
|
|
$
|
10.7
|
|
EBITDA Margin
|
|
|
(37.1
|
)%
|
|
|
(0.3
|
)%
|
|
|
4.2
|
%
|
|
|
5.2
|
%
|
|
|
6.8
|
%
|
|
|
8.5
|
%
|
Net Income
|
|
$
|
(32.1
|
)
|
|
$
|
(6.4
|
)
|
|
$
|
1.0
|
|
|
$
|
2.5
|
|
|
$
|
4.9
|
|
|
$
|
7.8
|
|
Net Income Margin
|
|
|
(50.5
|
)%
|
|
|
(8.6
|
)%
|
|
|
1.2
|
%
|
|
|
2.6
|
%
|
|
|
4.4
|
%
|
|
|
6.2
|
%
|
Comparable Company Analysis. Based on public
and other available information, Thomas Weisel Partners
calculated the multiples of aggregate value, which Thomas Weisel
Partners defined as equity value plus debt less cash and cash
equivalents, to calendar year revenues, earnings before
interest, taxes, depreciation and amortization (EBITDA) and net
income for companies with similar financial position challenged
by growth, scale or profitability serving telecommunication
service providers as well as those with a broader focus. Thomas
Weisel Partners believes that the 12 companies listed below
have operations similar to some of the operations of the
Company, but noted that none of these companies have the same
management, composition, size or combination of businesses as
the Company:
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|
ActivIdentity Corporation
|
|
|
|
Borland Software Corporation
|
|
|
|
Chordiant Software, Inc.
|
|
|
|
HireRight, Inc.
|
|
|
|
Ilog SA
|
|
|
|
i2 Technologies, Inc.
|
|
|
|
Kana Software Inc.
|
|
|
|
Openwave Systems, Inc.
|
|
|
|
Pervasive Software Inc.
|
|
|
|
QAD Inc.
|
|
|
|
SupportSoft, Inc.
|
|
|
|
Vignette Corporation
|
17
The following table sets forth the multiples indicated by this
analysis:
|
|
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|
|
|
|
|
|
|
|
|
|
Range of
|
|
|
|
|
|
|
Aggregate Value to:
|
|
Multiples(1)
|
|
Mean
|
|
|
Median
|
|
|
Actual 2007 Revenues
|
|
0.63x 0.94x
|
|
|
0.75
|
x
|
|
|
0.77
|
x
|
Actual 2007 EBITDA
|
|
6.1x 8.2x
|
|
|
8.4
|
x
|
|
|
6.9
|
x
|
Actual 2007 Net Income
|
|
14.1x 21.8x
|
|
|
19.7
|
x
|
|
|
17.5
|
x
|
|
|
|
|
|
|
|
|
|
|
|
Estimated 2008 Revenues
|
|
0.60x 0.90x
|
|
|
0.72
|
x
|
|
|
0.74
|
x
|
Estimated 2008 EBITDA
|
|
7.5x 11.4x
|
|
|
9.5
|
x
|
|
|
8.6
|
x
|
Estimated 2008 Net Income
|
|
20.4x 24.7x
|
|
|
22.5
|
x
|
|
|
23.0
|
x
|
|
|
|
|
|
|
|
|
|
|
|
Estimated 2009 Revenues
|
|
0.60x 0.84x
|
|
|
0.67
|
x
|
|
|
0.68
|
x
|
Estimated 2009 EBITDA
|
|
6.2x 7.6x
|
|
|
6.6
|
x
|
|
|
6.5
|
x
|
Estimated 2009 Net Income
|
|
14.3x 18.8x
|
|
|
18.9
|
x
|
|
|
18.5
|
x
|
|
|
|
(1) |
|
Reflects
1st
3rd quartile |
While the comparable company analysis compared the Company to
12 companies in similar financial position, Thomas Weisel
Partners did not include every company that could be deemed to
be in this category, or in the specific sector of the software
industry in which the Company participates.
The following table sets forth the implied multiples indicated
by the aggregate value of the consideration to be received by
the Companys stockholders in connection with the Offer and
the Merger. If the applicable Motive financial statistic is
negative, the implied multiple is listed as Not Meaningful
(N.M.).
|
|
|
|
|
|
|
Base Case
|
|
Adjusted Case
|
Aggregate Value to:
|
|
Implied Multiples
|
|
Implied Multiples
|
|
Actual 2007 Revenues
|
|
0.90x
|
|
0.90x
|
Actual 2007 EBITDA
|
|
N.M.
|
|
N.M.
|
Actual 2007 Net Income
|
|
N.M.
|
|
N.M.
|
|
|
|
|
|
|
|
Base Case
|
|
Adjusted Case
|
|
|
Implied Multiples
|
|
Implied Multiples
|
|
Estimated 2008 Revenues
|
|
0.79x
|
|
0.77x
|
Estimated 2008 EBITDA
|
|
N.M.
|
|
N.M.
|
Estimated 2008 Net Income
|
|
N.M.
|
|
N.M.
|
|
|
|
|
|
|
|
Base Case
|
|
Adjusted Case
|
|
|
Implied Multiples
|
|
Implied Multiples
|
|
Estimated 2009 Revenues
|
|
0.72x
|
|
0.69x
|
Estimated 2009 EBITDA
|
|
N.M.
|
|
16.3x
|
Estimated 2009 Net Income
|
|
N.M.
|
|
51.4x
|
18
Comparable Transactions Analysis. Based on
public and other available information, Thomas Weisel Partners
calculated where available: (1) the multiples of aggregate
value to Last Twelve Months (LTM) revenues, LTM
EBITDA and LTM net income; and (2) aggregate value to Next
Twelve Months (NTM) revenues, NTM EBITDA and NTM net
income for the following 26 comparable transactions selected
based on target companies having a similar financial position to
the Company:
|
|
|
|
|
Announcement Date
|
|
Name of Target
|
|
Name of Acquiror
|
|
07/29/04
|
|
Primus
|
|
Art Technology Group
|
09/03/04
|
|
QRS Corp.
|
|
Inovis International
|
09/21/04
|
|
Braun Consulting
|
|
Fair Isaac
|
01/07/05
|
|
Vastera
|
|
JP Morgan
|
05/10/05
|
|
Tarantella
|
|
Sun
|
07/29/05
|
|
MDSI
|
|
Vista
|
08/09/05
|
|
Register.com
|
|
Vector Capital
|
10/06/05
|
|
Centra Software
|
|
Saba Software
|
03/13/06
|
|
Artemis International Solutions
|
|
Versata
|
04/11/06
|
|
Portal
|
|
Oracle
|
04/27/06
|
|
NetIQ
|
|
AttachmateWRQ
|
05/24/06
|
|
DCS Group
|
|
Reynolds & Reynolds
|
06/05/06
|
|
Onyx Software
|
|
Made2Manage
|
08/28/06
|
|
InterVideo Inc.
|
|
Corel Corp.
|
09/21/06
|
|
Vitria Technology, Inc.
|
|
Innovation Technology Group
|
10/23/06
|
|
Metasolv, Inc.
|
|
Oracle
|
10/23/06
|
|
Indus International
|
|
Vista Equity Partners
|
04/02/07
|
|
Workbrain Corp.
|
|
Infor
|
04/11/07
|
|
Mobius Management
|
|
Allen Systems
|
04/24/07
|
|
Panda Software
|
|
Gala Capital
|
05/03/07
|
|
EasyLink Services
|
|
Internet Commerce
|
08/13/07
|
|
Gensym
|
|
Versata
|
10/2/007
|
|
Printronix
|
|
Vector Capital
|
05/01/08
|
|
NetManage
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Micro Focus
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05/29/08
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Kintera
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Blackbaud
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06/06/08
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|
Tumbleweed Communications
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Axway
|
The following table sets forth the multiples indicated by this
analysis and the multiples implied by the Offer:
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Range of
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Proposed
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Aggregate Value to:
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Multiples(1)
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Mean
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Median
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Transaction
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LTM Revenues
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0.9x 1.6x
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1.2
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x
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1.0
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x
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0.8
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x
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LTM EBITDA
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12.5x 35.3x
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24.5
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x
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17.7
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x
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N.M.
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Proposed
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Proposed
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Range of
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Transaction
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Transaction at
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Aggregate Value to:
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Multiples (1)
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Mean
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Median
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at Base Case
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Adjusted Case
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NTM Revenues
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1.1x 1.6x
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1.4x
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1.5x
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0.7x
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0.7x
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NTM EBITDA
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7.8x 27.6x
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17.4x
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12.4x
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N.M.
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N.M.
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(1) |
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Reflects
1st
3rd
quartile |
No company or transaction in the comparable company or
comparable transactions analyses is identical to the Company or
the Offer and the Merger. Accordingly, an analysis of the
results of the foregoing is not mathematical;
19
rather, it involves complex considerations and judgments
concerning differences in financial and operating
characteristics of the companies and other factors that could
affect the public trading value of the companies to which the
Company and the Offer and the Merger are being compared.
Premiums Paid Analysis. Thomas Weisel Partners
reviewed the consideration paid in 77 U.S. acquisitions in
the technology industry involving an aggregate value between $50
and $300 million announced since January 1, 2005 and
separately, a group of comparable transactions selected based on
target companies having a similar financial position to the
Company. Thomas Weisel Partners calculated the premiums paid in
these transactions over the applicable stock price of the target
company one day and twenty days periods prior to the
announcement of the acquisition. The following table summarizes
Thomas Weisel Partners analysis:
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Overall Technology
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Selected Comparable Transactions
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Premium
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Premium
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Premium
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Premium
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One Day
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Twenty Days
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One Day
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Twenty Days
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Prior to
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Prior to
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Prior to
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Prior to
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Announcement
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Announcement
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Announcement
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Announcement
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3rd quartile
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37.6
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%
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41.6
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%
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43.9
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%
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41.5
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%
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Median
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26.8
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%
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27.4
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%
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18.3
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%
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25.0
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%
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1st quartile
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12.6
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%
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15.4
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%
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9.2
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%
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8.6
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%
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Thomas Weisel Partners noted that the premiums implied by the
transactions contemplated by the Merger Agreement were 52.7% and
48.0% for the period one day and 20 days prior to the date
of the Thomas Weisel Partners opinion, respectively.
Discounted Cash Flow Analysis. Thomas Weisel
Partners used Base Case and Adjusted Case financial cash flow
forecasts of the Company for fiscal years 2008 through 2012, as
estimated by the Thomas Weisel Partners in consultation with the
Companys management, to perform a discounted cash flow
analysis. In conducting this analysis, Thomas Weisel Partners
assumed that the Company would perform in accordance with these
forecasts. Thomas Weisel Partners first estimated the terminal
value of the projected cash flows by applying multiples to the
Companys estimated EBITDA, which multiples ranged from
7.0x to 9.0x. Thomas Weisel Partners then discounted the cash
flows projected through 2012 and the terminal values to present
values using rates ranging from 13.5% to 17.5%. This
analysis indicated a range of aggregate values, which were then
reduced by the Companys estimated net debt, to calculate a
range of equity values. These equity values were then divided by
fully diluted shares outstanding to calculate implied Base Case
equity values per share ranging from $1.07 to $1.33 and Adjusted
Case equity values per share ranging from $2.57 to $3.32. Thomas
Weisel Partners noted that the value of stock consideration to
be received by the Companys stockholders under the Merger
Agreement was $2.23 per share.
The foregoing description is only a summary of the analyses and
examinations that Thomas Weisel Partners deems material to its
opinion. It is not a comprehensive description of all analyses
and examinations actually conducted by Thomas Weisel Partners.
The preparation of a fairness opinion necessarily is not
susceptible to partial analysis or summary description. Thomas
Weisel Partners believes that its analyses and the summary set
forth above must be considered as a whole and that selecting
portions of its analyses and of the factors considered, without
considering all analyses and factors, would create an incomplete
view of the process underlying the analyses set forth in its
presentation to the Board and underlying its opinion. In
addition, Thomas Weisel Partners may have given various analyses
more or less weight than other analyses, and may have deemed
various assumptions more or less probable than other
assumptions. The fact that any specific analysis has been
referred to in the summary above is not meant to indicate that
this analysis was given greater weight than any other analysis.
Accordingly, the ranges of valuations resulting from any
particular analysis described above should not be taken to be
the view of Thomas Weisel Partners with respect to the actual
value of the Company.
In performing its analyses, Thomas Weisel Partners made numerous
assumptions with respect to industry performance, general
business and economic conditions and other matters, many of
which are beyond the control of the Company. The analyses
performed by Thomas Weisel Partners are not necessarily
indicative of actual values or actual future results, which may
be significantly more or less favorable than those suggested by
these analyses. These analyses were prepared solely as part of
the analysis performed by Thomas Weisel Partners with respect to
the financial fairness of the consideration to be received by
the Companys stockholders pursuant to the Offer and the
Merger, and were provided to the Company in connection with the
delivery of the Thomas Weisel Partners
20
opinion. The analyses do not purport to be appraisals or to
reflect the prices at which a company might actually be sold or
the prices at which any securities may trade at any time in the
future.
As described above, Thomas Weisel Partners opinion and
presentation were among the many factors that the Board took
into consideration in making its determination to approve, and
to recommend that the Companys stockholders approve, the
Offer and the Merger.
The Company has agreed to pay Thomas Weisel Partners a fee,
payable upon consummation of the sale of the Company, equal to
the greater of 2% of the value of the transaction or
$1.75 million. In addition, the Company agreed to pay
Thomas Weisel Partners a fee of $250,000 upon delivery of its
fairness opinion in connection with a sale of the Company. The
Board was aware of this fee structure and took it into account
in considering the Thomas Weisel Partners opinion and in
approving the Offer and the Merger. Further, the Company has
agreed to reimburse Thomas Weisel Partners for its reasonable
out-of-pocket expenses and to indemnify Thomas Weisel Partners,
its affiliates, and their respective partners, directors,
officers, agents, consultants, employees and controlling
persons, against specific liabilities, including liabilities
under the federal securities laws.
In the ordinary course of its business, Thomas Weisel Partners
actively trades the equity securities of the Company for its own
account and for the accounts of customers and, accordingly, may
at any time hold a long or short position in these securities.
Thomas Weisel Partners also acted as an underwriter in
connection with the initial public offering of the
Companys Common Stock and has performed various investment
banking services for the Company.
Intent
to Tender.
To the best of the Companys knowledge, after reasonable
inquiry, each executive officer and director of the Company
currently intends to tender all Shares held of record or
beneficially owned by such person to Purchaser in the Offer,
other than such Shares, if any, that any such person or entity
may have an unexercised right to purchase by exercising stock
options. Following the Merger, Parent, through its authorized
paying agent, will pay each option holder cash in an amount
equal to the product of (i) the amount, if any, by which
$2.23 (or the highest price paid for any Share in the Offer)
exceeds the per Share exercise price of such option
holders options and (ii) the number of Shares
underlying such option holders options.
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|
Item 5.
|
Persons/Assets
Retained, Employed, Compensated or Used.
|
The Company engaged Thomas Weisel Partners pursuant to an
engagement letter dated November 1, 2007 to act as the
Companys financial advisor. As part of its role as
financial advisor, Thomas Weisel Partners delivered a fairness
opinion to the Board. Pursuant to the terms of the engagement
letter, the Company agreed to pay Thomas Weisel Partners a
fee, payable upon consummation of the sale of the Company, equal
to the greater of 2% of the value of the transaction or
$1.75 million. In addition, the Company agreed to pay
Thomas Weisel Partners a fee of $250,000 upon delivery of its
fairness opinion in connection with a sale of the Company.
The Company has also agreed to reimburse Thomas Weisel Partners
for all of its reasonable out-of-pocket expenses incurred in
connection with its engagement and to indemnify Thomas Weisel
Partners and its affiliates and their respective directors,
officers, agents, representatives and employees against
liabilities and expenses, including liabilities under the
federal securities laws, related to or arising out of the
engagement of Thomas Weisel Partners.
Thomas Weisel Partners, as part of its investment banking
business, is continually engaged in the valuation of businesses
and their securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions
of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. In the
ordinary course of business, Thomas Weisel Partners may actively
trade or hold the securities of the Company, Parent or Alcatel
Lucent for its own account or for the accounts of its customers
and, accordingly, may at any time hold a long or short position
in such securities. Furthermore, Thomas Weisel Partners may
maintain relationships with the Company, Parent or Alcatel
Lucent, and their respective affiliates.
The Company may engage a proxy solicitation or similar firm to
assist in the solicitation of tenders of Shares and will pay any
such firm fees at negotiated market rates.
21
Except as described above, neither the Company nor any person
acting on its behalf has employed, retained or agreed to
compensate any person to make solicitations or recommendations
to the security holders of the Company with respect to the Offer
or the Merger.
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|
Item 6.
|
Interest
in Securities of the Subject Company.
|
No transactions in Shares have been effected during the past
60 days by the Company or any subsidiary of the Company or,
to the knowledge of the Company, by any executive officer,
director or affiliate of the Company, other than the execution
and delivery of the Merger Agreement.
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|
Item 7.
|
Purposes
of the Transaction and Plans or Proposals.
|
Except as set forth in this Statement, the Company is not
currently undertaking or engaged in any negotiations in response
to the Offer that relate to (i) a tender offer for or other
acquisition of the Companys securities by the Company, any
subsidiary of the Company or any other person; (ii) any
extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Company or any subsidiary of the
Company; (iii) any purchase, sale or transfer of a material
amount of assets of the Company or any subsidiary of the
Company; or (iv) any material change in the present
dividend rate or policy, or indebtedness or capitalization of
the Company.
Except as set forth in this Statement, there are no
transactions, resolutions of the Board, agreements in principle,
or signed contracts in response to the Offer that relate to one
or more of the events referred to in the preceding paragraph.
|
|
Item 8.
|
Additional
Information.
|
Pursuant to Section 253 of the DGCL, if Purchaser becomes
the owner of 90% or more of the outstanding Shares as a result
of the Offer, Purchaser will be able to effect the Merger
without the approval of the Companys stockholders.
Pursuant to the terms of the Merger Agreement, the Company
granted Purchaser, subject to certain conditions and
limitations, an irrevocable option, to be exercised, in whole or
in part, on or prior to the 5th business day after
completion of the Offer, to acquire a number of Shares (the
Top-Up
Option Shares) that, when added to the number of Shares
owned by Parent, Purchaser and any of their respective
wholly-owned subsidiaries at the time of the exercise of the
Top-Up
Option, constitutes (x) if the Minimum Condition is
applicable, at least 90% of the number of Shares that will be
issued and outstanding immediately after giving effect to the
issuance of the
Top-Up
Option Shares on a fully diluted basis (including all Shares
issuable under options and warrants to purchase Shares), or
(y) if the Lowered Minimum Condition is applicable, at
least 90% of the number of Shares that will be issued and
outstanding upon acceptance for payment by Purchaser of Shares
tendered in the Offer, including the
Top-Up
Option Shares, in either case at a price per Share equal to the
Offer Price.
The Merger Agreement provides that following completion of the
Offer and, if necessary, the exercise of the
Top-Up
Option, the Company and Purchaser will complete a second-step
merger through the short form procedures available
under the DGCL without a meeting of the Companys
stockholders, in which Purchaser will be merged with and into
the Company, with the Company as the Surviving Corporation.
No appraisal rights are available to stockholders in connection
with the Offer. However, if the Merger is consummated,
stockholders who have not tendered their Shares in the Offer or
voted in favor of the Merger (if a vote of stockholders is
taken) will have certain rights under the DGCL to dissent and
demand appraisal of, and to receive payment in cash of the fair
value of, their Shares. Holders of Shares who perfect those
rights by complying with the procedures set forth in
Section 262 of the DGCL will have the fair value of their
Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) determined by the
Delaware Court of Chancery and will be entitled to receive a
cash payment equal to such fair value from the Surviving
Corporation. In addition, such dissenting stockholders would be
entitled to receive payment of a fair rate of interest from the
date of consummation of the Merger on the amount determined to
be the fair value of their Shares. If any stockholder who
22
demands appraisal under Section 262 of the DGCL fails to
perfect, or effectively withdraws or loses her, his or its right
to appraisal as provided in the DGCL, the Shares of such
stockholder will be converted into the right to receive the
price per share paid in the Merger in accordance with the Merger
Agreement. A stockholder may withdraw a demand for appraisal by
delivering to the Company, as the Surviving Corporation, a
written withdrawal of the demand for appraisal within
60 days of the effective date of the Merger or such later
date as approved in writing by the Company, as the Surviving
Corporation.
The foregoing summary is not intended to be complete and is
qualified in its entirety by reference to Section 262 of
the DGCL, the text of which is set forth in Annex C hereto
and incorporated by reference herein.
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|
(c)
|
Interested
Stockholder Transaction
|
The Company is incorporated under the laws of the State of
Delaware. In general, Section 203 of the DGCL prevents an
interested stockholder (generally a person who owns
or has the right to acquire 15% or more of a corporations
outstanding voting stock, or an affiliate or associate thereof)
from engaging in a business combination (defined to
include mergers, consolidations and certain other transactions)
with a Delaware corporation for a period of three years
following the date such person became an interested stockholder
unless, among other things, prior to such date, the board of
directors of the corporation approved either the business
combination or the transaction in which the interested
stockholder became an interested stockholder. At meetings held
June 11, 2008 and June 16, 2008, the Board, among
other actions, took action to exempt the transactions
contemplated by the Merger Agreement from the restrictions set
forth in Section 203 of DGCL. Accordingly, Section 203
is inapplicable to the Offer and the Merger.
HSR Act. Under the
Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the HSR
Act), certain acquisitions may not be consummated until
certain information and documentary material have been furnished
to the Federal Trade Commission (the FTC) and the
Antitrust Division of the U.S. Department of Justice (the
Antitrust Division) and certain waiting period
requirements have been satisfied. These requirements apply to
the Company by virtue of the acquisition of Shares pursuant to
the Offer.
Under the HSR Act, the purchase of Shares in the Offer may not
be completed until the expiration of a 15 calendar day
waiting period following the filing of certain required
information and documentary material concerning the Offer with
the FTC and the Antitrust Division, unless the waiting period is
otherwise terminated or extended by the FTC and the Antitrust
Division. Both Purchaser and the Company will file Premerger
Notification and Report Forms under the HSR Act with the FTC and
the Antitrust Division in connection with the purchase of Shares
in the Offer, and the required waiting period with respect to
the Offer will expire on the fifteenth day following
Purchaser filing, unless earlier terminated by the FTC and
the Antitrust Division or unless Purchaser receives a request
for additional information or documentary material (known as a
Second Request) prior to that time. If, within the
15 calendar day waiting period, either the FTC or the Antitrust
Division issues a Second Request to Purchaser, the waiting
period with respect to the Offer would be extended for an
additional period of ten calendar days following the date on
which Purchaser substantially complies with that request. If the
15 calendar day waiting period expires on a Saturday, Sunday or
legal holiday, then the period is extended until the end of the
next calendar day that is not a Saturday, Sunday or legal public
holiday. Only one 10 calendar day extension of the waiting
period pursuant to a Second Request is authorized by the HSR Act
rules. After that time, the waiting period could be extended
only by court order. The FTC or the Antitrust Division may
terminate the additional 10 calendar day extension of the
waiting period before its expiration. In practice, complying
with a Second Request can take a significant period of time.
Although the Company is also required to file certain
information and documentary material with the FTC and the
Antitrust Division in connection with the Offer, neither the
Companys failure to make those filings nor the
Companys failure to substantially comply with a Second
Request issued by the FTC or the Antitrust Division will extend
the waiting period with respect to the purchase of Shares in the
Offer.
At any time before or after Purchasers purchase of Shares,
the FTC or the Antitrust Division could take any action under
the antitrust laws that it either considers necessary or
desirable in the public interest, including seeking to enjoin
the purchase of Shares in the Offer and the Merger, the
divestiture of Shares purchased in the Offer or the
23
divestiture of substantial assets of Purchaser, Parent, the
Company or any of their respective subsidiaries or affiliates.
Private parties as well as state attorneys general also may
bring legal actions under the antitrust laws under certain
circumstances.
There can be no assurance that a challenge to the Offer and the
Merger on antitrust grounds will not be made, or, if such
challenge is made, what the result will be.
German Antitrust Matters. Under the provisions
of the German Act against Restraints on Competition of 1958, as
amended (ARC), the acquisition of Shares pursuant to
the Offer may be consummated only if the acquisition is approved
by the German Federal Cartel Office (FCO), either by
written approval or by expiration of a one-month waiting period
commenced by the filing by Parent of a complete notification
(the German Notification) with respect to the Offer,
unless the FCO notifies Parent within the one-month waiting
period of the initiation of an in-depth investigation. The
Company was informed by Parent that it intends to file the
German Notification. If the FCO initiates an in-depth
investigation, the acquisition of Shares under the Offer may be
consummated only if the acquisition is approved by the FCO,
either by written approval or by expiration of a four-month
waiting period commenced by the filing of the German
Notification, unless the FCO notifies Parent within the
four-month waiting period that the acquisition satisfies the
conditions for a prohibition and may not be consummated. The
written approval by the FCO or the expiration of any applicable
waiting period is a condition to Purchasers obligation to
accept for payment and pay for Shares tendered pursuant to the
Offer.
Italian Antitrust Matters. Under applicable
Italian law, Purchasers acquisition of Shares in the Offer
requires Parent to file a notification with the Autorità
Garante della Concorrenza e del Mercato (the Italian
Competition Authority). The Italian Competition Authority
has 30 calendar days from the submission of Parents
complete notification to approve the acquisition or open an
in-depth investigation, which has a maximum review period of an
additional 75 calendar days. Purchaser may consummate the Offer
prior to receiving approval from the Italian Competition
Authority. The Company was informed by Parent that it intends to
file a notification with the Italian Competition Authority.
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(e)
|
Section 14(f)
Information Statement
|
The Information Statement attached as Annex A hereto is
being furnished in connection with the possible designation by
Parent, pursuant to the Merger Agreement, of certain persons to
be appointed to the Board, other than at a meeting of the
Companys stockholders as described in the Information
Statement, and is incorporated herein by reference.
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(f)
|
Projected
Financial Information
|
Certain financial projections prepared by the Companys
management were made available to Parent in connection with
Parents due diligence review of the Company. The
information from these projections is included in this Statement
solely because such information was provided to Parent in
connection with its evaluation of the Company and is not being
included to influence your decision whether to tender your
Shares in the Offer.
These internal financial projections were prepared solely for
internal use and were not prepared with a view toward public
disclosure, nor were they prepared with a view toward compliance
with published guidelines of the SEC, the guidelines established
by the American Institute of Certified Public Accountants for
preparation and presentation of financial forecasts, or
generally accepted accounting principles. Neither the
Companys independent registered public accounting firm,
nor any other independent accountants, have compiled, examined
or performed any procedures with respect to the financial
projections included below, nor have they expressed any opinion
or any other form of assurance on such information or its
achievability, and they assume no responsibility for, and
disclaim any association with, the financial projections.
These financial projections reflect numerous estimates and
assumptions with respect to industry performance, general
business, economic, regulatory, market and financial conditions
and other future events, as well as matters specific to the
Companys business, all of which are difficult to predict
and many of which are beyond the Companys control. These
financial projections are subjective in many respects and thus
are susceptible to multiple interpretations and periodic
revisions based on actual experience and business developments.
As such, these
24
financial projections constitute forward-looking information and
are subject to risks and uncertainties that could cause actual
results to differ materially from the results forecasted in such
projections, including, but not limited to, the Companys
performance, industry performance, general business and economic
conditions, the outcome of a pending SEC investigation, customer
requirements, competition, adverse changes in applicable laws,
regulations or rules, and the various risks set forth in the
Companys reports filed with the SEC. There can be no
assurance that the projected results will be realized or that
actual results will not be significantly higher or lower than
projected. The financial projections cover multiple years and
such information by its nature becomes less reliable with each
successive year. In addition, the projections will be affected
by the Companys ability to achieve strategic goals,
objectives and targets over the applicable periods. The
assumptions upon which the projections were based necessarily
involve judgments with respect to, among other things, future
economic, competitive and regulatory conditions and financial
market conditions, all of which are difficult or impossible to
predict accurately and many of which are beyond the
Companys control. The projections also reflect assumptions
as to certain business decisions that are subject to change.
Such projections cannot, therefore, be considered a guaranty of
future operating results, and this information should not be
relied on as such. The inclusion of this information should not
be regarded as an indication that the Company, Alcatel Lucent,
Parent, Purchaser or anyone who received this information then
considered, or now considers, it a reliable prediction of future
events, and this information should not be relied upon as such.
None of the Company, Alcatel Lucent, Parent, Purchaser or any of
their respective financial advisors or any of their respective
affiliates assumes any responsibility for the validity,
reasonableness, accuracy or completeness of the projections
described below. None of the Company, Alcatel Lucent, Parent,
Purchaser or any of their respective financial advisors or any
of their respective affiliates intends to, and each of them
disclaims any obligation to, update, revise or correct such
projections if they are or become inaccurate (even in the short
term).
The financial projections do not take into account any
circumstances or events occurring after the date they were
prepared, including the announcement of the potential
acquisition of the Company by Purchaser and Parent pursuant to
the Offer and the Merger. There can be no assurance that the
announcement of the Offer and the Merger will not cause
customers of the Company to delay or cancel purchases of the
Companys products and services pending the consummation of
the Offer and the Merger or the clarification of Parents
or Alcatel Lucents intentions with respect to the conduct
of the Companys business thereafter. Any such delay or
cancellation of customer sales is likely to adversely affect the
ability of the Company to achieve the results reflected in such
financial projections. Further, the financial projections do not
take into account the effect of any failure to occur of the
Offer or the Merger and should not be viewed as accurate or
continuing in that context.
The inclusion of the financial projections herein should not be
deemed an admission or representation by the Company, Parent,
Purchaser or Alcatel Lucent that they are viewed by the Company,
Parent, Purchaser or Alcatel Lucent as material information of
the Company, and in fact the Company views the financial
projections as non-material because of the inherent risks and
uncertainties associated with such long range forecasts.
These internal financial projections are not being included in
this Statement to influence your decision whether to tender your
shares in the Offer, but because these internal financial
forecasts were made available by the Company to Parent. The
information from the these projections should be evaluated, if
at all, in conjunction with the historical financial statements
and other information regarding the Company contained elsewhere
in this Statement, the Offer to Purchase and the Companys
public filings with the SEC. In light of the foregoing factors
and the uncertainties inherent in the Companys
projections, stockholders are cautioned not to place undue, if
any, reliance on the projections included in this Statement.
25
5-Year
Financial Projections
Income
Statement Projection
$(000s)
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|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
Revenue
|
|
$
|
72,200
|
|
|
$
|
83,000
|
|
|
$
|
95,000
|
|
|
$
|
109,800
|
|
|
$
|
126,200
|
|
Cost of Services
|
|
|
28,500
|
|
|
|
30,700
|
|
|
|
33,400
|
|
|
|
38,400
|
|
|
|
44,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
43,700
|
|
|
|
52,300
|
|
|
|
61,600
|
|
|
|
71,400
|
|
|
|
82,000
|
|
Gross Margin %
|
|
|
60.53
|
%
|
|
|
63.01
|
%
|
|
|
64.84
|
%
|
|
|
65.03
|
%
|
|
|
64.98
|
%
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales & Marketing
|
|
|
19,900
|
|
|
|
20,800
|
|
|
|
23,900
|
|
|
|
27,500
|
|
|
|
31,600
|
|
Development
|
|
|
14,800
|
|
|
|
12,000
|
|
|
|
10,000
|
|
|
|
10,000
|
|
|
|
10,000
|
|
Administration
|
|
|
16,800
|
|
|
|
11,000
|
|
|
|
10,000
|
|
|
|
11,000
|
|
|
|
13,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
51,500
|
|
|
|
43,800
|
|
|
|
43,900
|
|
|
|
48,500
|
|
|
|
54,600
|
|
Operating Profit
|
|
$
|
(7,800
|
)
|
|
$
|
8,500
|
|
|
$
|
17,700
|
|
|
$
|
22,900
|
|
|
$
|
27,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue By
Product Line
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
HSD(1)
|
|
$
|
35,400
|
|
|
$
|
34,900
|
|
|
$
|
30,000
|
|
|
$
|
25,000
|
|
|
$
|
20,000
|
|
HDM(2)
|
|
|
31,000
|
|
|
|
28,200
|
|
|
|
30,000
|
|
|
|
35,000
|
|
|
|
35,000
|
|
S.A.(3)
|
|
|
2,200
|
|
|
|
5,800
|
|
|
|
10,000
|
|
|
|
15,000
|
|
|
|
15,000
|
|
Mobility
|
|
|
3,600
|
|
|
|
14,100
|
|
|
|
25,000
|
|
|
|
34,800
|
|
|
|
56,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
$
|
72,200
|
|
|
$
|
83,000
|
|
|
$
|
95,000
|
|
|
$
|
109,800
|
|
|
$
|
126,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
High-Speed Data |
|
(2) |
|
Home Device Manager |
|
(3) |
|
IPTV Service Assurance |
Revenue - Product
Line - Existing vs. New Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue From
|
|
|
|
|
|
|
Existing
|
|
|
New
|
|
|
|
|
Product
|
|
Customers
|
|
|
Customers
|
|
|
Total
|
|
|
HSD
|
|
|
85.00
|
%
|
|
|
15.00
|
%
|
|
|
100.00
|
%
|
HDM
|
|
|
60.00
|
%
|
|
|
40.00
|
%
|
|
|
100.00
|
%
|
S.A.
|
|
|
80.00
|
%
|
|
|
20.00
|
%
|
|
|
100.00
|
%
|
Mobility
|
|
|
10.00
|
%
|
|
|
90.00
|
%
|
|
|
100.00
|
%
|
Revenue
Allocation: Developed Technology vs. In-Process Technology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
|
Developed
|
|
|
In-Process
|
|
|
Developed
|
|
|
In-Process
|
|
|
Developed
|
|
|
In-Process
|
|
|
Developed
|
|
|
In-Process
|
|
|
Developed
|
|
|
In-Process
|
|
Product
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
R&D
|
|
|
HSD
|
|
|
90.00
|
%
|
|
|
10.00
|
%
|
|
|
90.00
|
%
|
|
|
10.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
HDM
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
S.A.
|
|
|
70.00
|
%
|
|
|
30.00
|
%
|
|
|
75.00
|
%
|
|
|
25.00
|
%
|
|
|
80.00
|
%
|
|
|
20.00
|
%
|
|
|
85.00
|
%
|
|
|
15.00
|
%
|
|
|
90.00
|
%
|
|
|
10.00
|
%
|
Mobility
|
|
|
35.00
|
%
|
|
|
65.00
|
%
|
|
|
75.00
|
%
|
|
|
25.00
|
%
|
|
|
85.00
|
%
|
|
|
15.00
|
%
|
|
|
90.00
|
%
|
|
|
10.00
|
%
|
|
|
95.00
|
%
|
|
|
5.00
|
%
|
26
R&D
Allocation
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of R&D to Complete In-Process R&D
|
|
Product
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
HSD
|
|
$
|
437
|
|
|
$
|
240
|
|
|
$
|
125
|
|
|
$
|
50
|
|
|
$
|
25
|
|
HDM
|
|
|
3,056
|
|
|
|
1,440
|
|
|
|
625
|
|
|
|
250
|
|
|
|
125
|
|
S.A.
|
|
|
873
|
|
|
|
720
|
|
|
|
750
|
|
|
|
300
|
|
|
|
150
|
|
Mobility
|
|
|
4,366
|
|
|
|
2,400
|
|
|
|
1,000
|
|
|
|
400
|
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,732
|
|
|
$
|
4,800
|
|
|
$
|
2,500
|
|
|
$
|
1,000
|
|
|
$
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of R&D to Complete Developed R&D
|
|
Product
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
HSD
|
|
$
|
303
|
|
|
$
|
360
|
|
|
$
|
375
|
|
|
$
|
450
|
|
|
$
|
475
|
|
HDM
|
|
|
2,124
|
|
|
|
2,160
|
|
|
|
1,875
|
|
|
|
2,250
|
|
|
|
2,375
|
|
S.A.
|
|
|
607
|
|
|
|
1,080
|
|
|
|
2,250
|
|
|
|
2,700
|
|
|
|
2,850
|
|
Mobility
|
|
|
3,034
|
|
|
|
3,600
|
|
|
|
3,000
|
|
|
|
3,600
|
|
|
|
3,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,068
|
|
|
$
|
7,200
|
|
|
$
|
7,500
|
|
|
$
|
9,000
|
|
|
$
|
9,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation
of Cost of Revenue
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
HSD
|
|
$
|
12,474
|
|
|
$
|
11,409
|
|
|
$
|
9,547
|
|
|
$
|
7,743
|
|
|
$
|
6,005
|
|
HDM
|
|
|
14,237
|
|
|
|
12,431
|
|
|
|
13,047
|
|
|
|
14,740
|
|
|
|
14,758
|
|
S.A.
|
|
|
768
|
|
|
|
1,945
|
|
|
|
3,016
|
|
|
|
4,746
|
|
|
|
4,754
|
|
Mobility
|
|
|
1,021
|
|
|
|
4,915
|
|
|
|
7,789
|
|
|
|
11,170
|
|
|
|
18,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
28,500
|
|
|
$
|
30,700
|
|
|
$
|
33,400
|
|
|
$
|
38,400
|
|
|
$
|
44,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation
of Sales, Marketing and Administration Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales & Marketing
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
HSD
|
|
$
|
9,757
|
|
|
$
|
8,746
|
|
|
$
|
7,547
|
|
|
$
|
6,261
|
|
|
$
|
5,008
|
|
HDM
|
|
|
8,544
|
|
|
|
7,067
|
|
|
|
7,547
|
|
|
|
8,766
|
|
|
|
8,764
|
|
S.A.
|
|
|
606
|
|
|
|
1,453
|
|
|
|
2,516
|
|
|
|
3,757
|
|
|
|
3,756
|
|
Mobility
|
|
|
992
|
|
|
|
3,533
|
|
|
|
6,289
|
|
|
|
8,716
|
|
|
|
14,072
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
19,900
|
|
|
$
|
20,800
|
|
|
$
|
23,900
|
|
|
$
|
27,500
|
|
|
$
|
31,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administration
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
HSD
|
|
$
|
8,237
|
|
|
$
|
4,625
|
|
|
$
|
3,158
|
|
|
$
|
2,505
|
|
|
$
|
2,060
|
|
HDM
|
|
|
7,213
|
|
|
|
3,737
|
|
|
|
3,158
|
|
|
|
3,506
|
|
|
|
3,605
|
|
S.A.
|
|
|
512
|
|
|
|
769
|
|
|
|
1,053
|
|
|
|
1,503
|
|
|
|
1,545
|
|
Mobility
|
|
|
838
|
|
|
|
1,869
|
|
|
|
2,632
|
|
|
|
3,486
|
|
|
|
5,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
16,800
|
|
|
$
|
11,000
|
|
|
$
|
10,000
|
|
|
$
|
11,000
|
|
|
$
|
13,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
Marketing
Expenses - New Customers
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
$
|
750
|
|
|
$
|
750
|
|
|
$
|
750
|
|
|
$
|
750
|
|
|
$
|
750
|
|
Product
Line - P&Ls
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
|
HSD
|
|
|
HDM
|
|
|
S.A.
|
|
|
Mobility
|
|
|
Total
|
|
|
HSD
|
|
|
HDM
|
|
|
S.A.
|
|
|
Mobility
|
|
|
Total
|
|
|
Revenue
|
|
$
|
35,400
|
|
|
$
|
31,000
|
|
|
$
|
2,200
|
|
|
$
|
3,600
|
|
|
$
|
72,200
|
|
|
$
|
34,900
|
|
|
$
|
28,200
|
|
|
$
|
5,800
|
|
|
$
|
14,100
|
|
|
$
|
83,000
|
|
Cost of Services
|
|
|
12,474
|
|
|
|
14,237
|
|
|
|
768
|
|
|
|
1,021
|
|
|
|
28,500
|
|
|
|
11,409
|
|
|
|
12,431
|
|
|
|
1,945
|
|
|
|
4,915
|
|
|
|
30,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
22,926
|
|
|
|
16,763
|
|
|
|
1,432
|
|
|
|
2,579
|
|
|
|
43,700
|
|
|
|
23,491
|
|
|
|
15,769
|
|
|
|
3,855
|
|
|
|
9,185
|
|
|
|
52,300
|
|
Gross Margin %
|
|
|
64.76
|
%
|
|
|
54.07
|
%
|
|
|
65.07
|
%
|
|
|
71.64
|
%
|
|
|
60.53
|
%
|
|
|
67.31
|
%
|
|
|
55.92
|
%
|
|
|
66.46
|
%
|
|
|
65.14
|
%
|
|
|
63.01
|
%
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales & Marketing
|
|
|
9,757
|
|
|
|
8,544
|
|
|
|
606
|
|
|
|
992
|
|
|
|
19,900
|
|
|
|
8,746
|
|
|
|
7,067
|
|
|
|
1,453
|
|
|
|
3,533
|
|
|
|
20,800
|
|
Development
|
|
|
740
|
|
|
|
5,180
|
|
|
|
1,480
|
|
|
|
7,400
|
|
|
|
14,800
|
|
|
|
600
|
|
|
|
3,600
|
|
|
|
1,800
|
|
|
|
6,000
|
|
|
|
12,000
|
|
Administration
|
|
|
8,237
|
|
|
|
7,213
|
|
|
|
512
|
|
|
|
838
|
|
|
|
16,800
|
|
|
|
4,625
|
|
|
|
3,737
|
|
|
|
769
|
|
|
|
1,869
|
|
|
|
11,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
18,734
|
|
|
|
20,938
|
|
|
|
2,598
|
|
|
|
9,230
|
|
|
|
51,500
|
|
|
|
13,971
|
|
|
|
14,404
|
|
|
|
4,022
|
|
|
|
11,402
|
|
|
|
43,800
|
|
Operating Profit
|
|
$
|
4,192
|
|
|
$
|
(4,174
|
)
|
|
$
|
(1,167
|
)
|
|
$
|
(6,651
|
)
|
|
$
|
(7,800
|
)
|
|
$
|
9,520
|
|
|
$
|
1,365
|
|
|
$
|
(167
|
)
|
|
$
|
(2,217
|
)
|
|
$
|
8,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2011
|
|
|
|
HSD
|
|
|
HDM
|
|
|
S.A.
|
|
|
Mobility
|
|
|
Total
|
|
|
HSD
|
|
|
HDM
|
|
|
S.A.
|
|
|
Mobility
|
|
|
Total
|
|
|
Revenue
|
|
$
|
30,000
|
|
|
$
|
30,000
|
|
|
$
|
10,000
|
|
|
$
|
25,000
|
|
|
$
|
95,000
|
|
|
$
|
25,000
|
|
|
$
|
35,000
|
|
|
$
|
15,000
|
|
|
$
|
34,800
|
|
|
$
|
109,800
|
|
Cost of Services
|
|
|
9,547
|
|
|
|
13,047
|
|
|
|
3,016
|
|
|
|
7,789
|
|
|
|
33,400
|
|
|
|
7,743
|
|
|
|
14,740
|
|
|
|
4,746
|
|
|
|
11,170
|
|
|
|
38,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
20,453
|
|
|
|
16,953
|
|
|
|
6,984
|
|
|
|
17,211
|
|
|
|
61,600
|
|
|
|
17,257
|
|
|
|
20,260
|
|
|
|
10,254
|
|
|
|
23,630
|
|
|
|
71,400
|
|
Gross Margin %
|
|
|
68.18
|
%
|
|
|
56.51
|
%
|
|
|
69.84
|
%
|
|
|
68.84
|
%
|
|
|
64.84
|
%
|
|
|
69.03
|
%
|
|
|
57.88
|
%
|
|
|
68.36
|
%
|
|
|
67.90
|
%
|
|
|
65.03
|
%
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales & Marketing
|
|
|
7,547
|
|
|
|
7,547
|
|
|
|
2,516
|
|
|
|
6,289
|
|
|
|
23,900
|
|
|
|
6,261
|
|
|
|
8,766
|
|
|
|
3,757
|
|
|
|
8,716
|
|
|
|
27,500
|
|
Development
|
|
|
500
|
|
|
|
2,500
|
|
|
|
3,000
|
|
|
|
4,000
|
|
|
|
10,000
|
|
|
|
500
|
|
|
|
2,500
|
|
|
|
3,000
|
|
|
|
4,000
|
|
|
|
10,000
|
|
Administration
|
|
|
3,158
|
|
|
|
3,158
|
|
|
|
1,053
|
|
|
|
2,632
|
|
|
|
10,000
|
|
|
|
2,505
|
|
|
|
3,506
|
|
|
|
1,503
|
|
|
|
3,486
|
|
|
|
11,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
11,205
|
|
|
|
13,205
|
|
|
|
6,568
|
|
|
|
12,921
|
|
|
|
43,900
|
|
|
|
9,266
|
|
|
|
14,772
|
|
|
|
8,260
|
|
|
|
16,202
|
|
|
|
48,500
|
|
Operating Profit
|
|
$
|
9,247
|
|
|
$
|
3,747
|
|
|
$
|
416
|
|
|
$
|
4,289
|
|
|
$
|
17,700
|
|
|
$
|
7,991
|
|
|
$
|
5,487
|
|
|
$
|
1,995
|
|
|
$
|
7,427
|
|
|
$
|
22,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
HSD
|
|
|
HDM
|
|
|
S.A.
|
|
|
Mobility
|
|
|
Total
|
|
|
Revenue
|
|
$
|
20,000
|
|
|
$
|
35,000
|
|
|
$
|
15,000
|
|
|
$
|
56,200
|
|
|
$
|
126,200
|
|
Cost of Services
|
|
|
6,005
|
|
|
|
14,758
|
|
|
|
4,754
|
|
|
|
18,683
|
|
|
|
44,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
13,995
|
|
|
|
20,242
|
|
|
|
10,246
|
|
|
|
37,517
|
|
|
|
82,000
|
|
Gross Margin %
|
|
|
69.98
|
%
|
|
|
57.83
|
%
|
|
|
68.31
|
%
|
|
|
66.76
|
%
|
|
|
64.98
|
%
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales & Marketing
|
|
|
5,008
|
|
|
|
8,764
|
|
|
|
3,756
|
|
|
|
14,072
|
|
|
|
31,600
|
|
Development
|
|
|
500
|
|
|
|
2,500
|
|
|
|
3,000
|
|
|
|
4,000
|
|
|
|
10,000
|
|
Administration
|
|
|
2,060
|
|
|
|
3,605
|
|
|
|
1,545
|
|
|
|
5,789
|
|
|
|
13,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
7,568
|
|
|
|
14,869
|
|
|
|
8,301
|
|
|
|
23,861
|
|
|
|
54,600
|
|
Operating Profit
|
|
$
|
6,427
|
|
|
$
|
5,372
|
|
|
$
|
1,945
|
|
|
$
|
13,655
|
|
|
$
|
27,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
2008
Budgeted Financial Information
Income
Statement
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of
|
|
|
|
Q108
|
|
|
Q208
|
|
|
Q308
|
|
|
Q408
|
|
|
2008
|
|
|
Total
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License fees
|
|
$
|
13,500
|
|
|
$
|
14,500
|
|
|
$
|
15,499
|
|
|
$
|
16,501
|
|
|
$
|
60,000
|
|
|
|
81
|
%
|
Services
|
|
|
3,267
|
|
|
|
3,389
|
|
|
|
3,539
|
|
|
|
3,705
|
|
|
|
13,900
|
|
|
|
19
|
%
|
Acquired contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
16,767
|
|
|
|
17,889
|
|
|
|
19,039
|
|
|
|
20,205
|
|
|
|
73,900
|
|
|
|
100
|
%
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License fees
|
|
|
743
|
|
|
|
793
|
|
|
|
848
|
|
|
|
887
|
|
|
|
3,271
|
|
|
|
4
|
%
|
Amount of acquired technology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
%
|
Services
|
|
|
6,973
|
|
|
|
6,621
|
|
|
|
5,982
|
|
|
|
5,349
|
|
|
|
24,925
|
|
|
|
34
|
%
|
Total cost of revenue
|
|
$
|
7,716
|
|
|
$
|
7,414
|
|
|
$
|
6,830
|
|
|
$
|
6,236
|
|
|
$
|
28,196
|
|
|
|
38
|
%
|
Gross Margin
|
|
|
9,051
|
|
|
|
10,475
|
|
|
|
12,209
|
|
|
|
13,969
|
|
|
|
45,704
|
|
|
|
62
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
4,249
|
|
|
|
4,546
|
|
|
|
5,580
|
|
|
|
5,332
|
|
|
|
19,706
|
|
|
|
27
|
%
|
Research and development
|
|
|
3,629
|
|
|
|
3,617
|
|
|
|
3,565
|
|
|
|
3,577
|
|
|
|
14,388
|
|
|
|
19
|
%
|
General and administrative
|
|
|
4,055
|
|
|
|
3,868
|
|
|
|
3,538
|
|
|
|
3,546
|
|
|
|
15,007
|
|
|
|
20
|
%
|
Sub-total before amortization and other
|
|
|
11,933
|
|
|
|
12,031
|
|
|
|
12,683
|
|
|
|
12,455
|
|
|
|
49,102
|
|
|
|
66
|
%
|
Income/(Loss) before amortization and other
|
|
|
(2,882
|
)
|
|
|
(1,555
|
)
|
|
|
(474
|
)
|
|
|
1,514
|
|
|
|
(3,397
|
)
|
|
|
(5
|
)%
|
Amortization of deferred stock compensation
|
|
|
642
|
|
|
|
601
|
|
|
|
522
|
|
|
|
544
|
|
|
|
2,308
|
|
|
|
3
|
%
|
Amortization of goodwill and intangibles
|
|
|
138
|
|
|
|
138
|
|
|
|
138
|
|
|
|
161
|
|
|
|
573
|
|
|
|
1
|
%
|
Impairment of Long Life Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
%
|
Equity in subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
%
|
Legal Settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
%
|
Restructuring charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
%
|
Total operating expenses
|
|
|
12,712
|
|
|
|
12,769
|
|
|
|
13,342
|
|
|
|
13,159
|
|
|
|
51,983
|
|
|
|
70
|
%
|
Income/(Loss) from operations
|
|
|
(3,661
|
)
|
|
|
(2,294
|
)
|
|
|
(1,133
|
)
|
|
|
810
|
|
|
|
(6,279
|
)
|
|
|
(8
|
)%
|
Other income (expense), net
|
|
|
(72
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(72
|
)
|
|
|
0
|
%
|
Interest income (expense), net
|
|
|
210
|
|
|
|
129
|
|
|
|
87
|
|
|
|
70
|
|
|
|
496
|
|
|
|
1
|
%
|
Income/(Loss) before taxes
|
|
|
(3,523
|
)
|
|
|
(2,166
|
)
|
|
|
(1,046
|
)
|
|
|
880
|
|
|
|
(5,855
|
)
|
|
|
(8
|
)%
|
Income tax provision
|
|
|
125
|
|
|
|
125
|
|
|
|
125
|
|
|
|
125
|
|
|
|
500
|
|
|
|
1
|
%
|
Net Income/(Loss)
|
|
$
|
(3,648
|
)
|
|
$
|
(2,290
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
755
|
|
|
$
|
(6,354
|
)
|
|
|
(9
|
)%
|
29
Balance
Sheet
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q108
|
|
|
Q208
|
|
|
Q308
|
|
|
Q408
|
|
|
ASSETS
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash & cash equivalents
|
|
$
|
14,716
|
|
|
$
|
10,638
|
|
|
$
|
6,209
|
|
|
$
|
7,082
|
|
Short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
11,938
|
|
|
|
11,612
|
|
|
|
14,920
|
|
|
|
14,122
|
|
Intercompany receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses & other current assets
|
|
|
5,378
|
|
|
|
6,130
|
|
|
|
7,019
|
|
|
|
6,434
|
|
Total current assets
|
|
|
32,032
|
|
|
|
28,380
|
|
|
|
28,148
|
|
|
|
27,638
|
|
Property and equipment
|
|
|
8,928
|
|
|
|
9,328
|
|
|
|
9,728
|
|
|
|
10,128
|
|
Accumulated depreciation
|
|
|
(5,937
|
)
|
|
|
(6,822
|
)
|
|
|
(7,590
|
)
|
|
|
(8,241
|
)
|
Property and equipment, net
|
|
|
2,991
|
|
|
|
2,506
|
|
|
|
2,138
|
|
|
|
1,887
|
|
Goodwill
|
|
|
39,656
|
|
|
|
39,656
|
|
|
|
39,656
|
|
|
|
39,656
|
|
Other Intangibles, net
|
|
|
435
|
|
|
|
297
|
|
|
|
159
|
|
|
|
|
|
Acquired technology, net
|
|
|
2,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
2,869
|
|
|
|
2,630
|
|
|
|
2,411
|
|
|
|
2,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
77,983
|
|
|
$
|
73,469
|
|
|
$
|
72,512
|
|
|
$
|
71,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS EQUITY
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Payable
|
|
$
|
4,114
|
|
|
$
|
4,047
|
|
|
$
|
4,051
|
|
|
$
|
3,827
|
|
Accrued Expenses
|
|
|
6,662
|
|
|
|
7,348
|
|
|
|
9,854
|
|
|
|
10,969
|
|
Deferred revenues
|
|
|
71,932
|
|
|
|
68,580
|
|
|
|
65,856
|
|
|
|
62,636
|
|
Current portion of long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
82,708
|
|
|
|
79,976
|
|
|
|
79,761
|
|
|
|
77,433
|
|
Long-term debt, net of current portion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
82,708
|
|
|
|
79,976
|
|
|
|
79,761
|
|
|
|
77,433
|
|
Redeemable convertible preferred stock, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders Equity/(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock at par value
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
|
|
28
|
|
Additional paid-in capital
|
|
|
254,250
|
|
|
|
254,851
|
|
|
|
255,373
|
|
|
|
255,917
|
|
Treasury Stock
|
|
|
(779
|
)
|
|
|
(794
|
)
|
|
|
(809
|
)
|
|
|
(824
|
)
|
Notes receivable from stockholder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred stock compensation
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(2
|
)
|
ATA (Accumulated Translation Adjustment)
|
|
|
(1,060
|
)
|
|
|
(1,137
|
)
|
|
|
(1,214
|
)
|
|
|
(1,292
|
)
|
Retained earnings/(deficit)
|
|
|
(253,514
|
)
|
|
|
(253,514
|
)
|
|
|
(253,514
|
)
|
|
|
(253,514
|
)
|
Year-to-date income/(loss)
|
|
|
(3,648
|
)
|
|
|
(5,939
|
)
|
|
|
(7,110
|
)
|
|
|
(6,354
|
)
|
Total stockholders equity/(deficit)
|
|
|
(4,726
|
)
|
|
|
(6,507
|
)
|
|
|
(7,249
|
)
|
|
|
(6,042
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity/(deficit)
|
|
$
|
77,983
|
|
|
$
|
73,469
|
|
|
$
|
72,512
|
|
|
$
|
71,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
Statement of
Cash Flows
$(000s)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q108
|
|
|
Q208
|
|
|
Q308
|
|
|
Q408
|
|
|
2008
|
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(Loss)
|
|
$
|
(3,648
|
)
|
|
$
|
(2,290
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
755
|
|
|
$
|
(6,354
|
)
|
Adjustments to reconcile net income/(loss) to net cash provided
by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
851
|
|
|
|
885
|
|
|
|
768
|
|
|
|
651
|
|
|
|
3,155
|
|
Stock compensation and amortization of deferred compensation
|
|
|
642
|
|
|
|
601
|
|
|
|
522
|
|
|
|
544
|
|
|
|
2,308
|
|
Amortization of intangible assets
|
|
|
138
|
|
|
|
138
|
|
|
|
138
|
|
|
|
159
|
|
|
|
573
|
|
In-process research and development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(2,680
|
)
|
|
|
326
|
|
|
|
(3,307
|
)
|
|
|
798
|
|
|
|
(4,864
|
)
|
Prepaids and other current assets
|
|
|
(2,474
|
)
|
|
|
(513
|
)
|
|
|
(670
|
)
|
|
|
786
|
|
|
|
(2,871
|
)
|
Accounts payable
|
|
|
(6,570
|
)
|
|
|
(66
|
)
|
|
|
4
|
|
|
|
(224
|
)
|
|
|
(6,857
|
)
|
Accrued compensation
|
|
|
(3,924
|
)
|
|
|
(517
|
)
|
|
|
(761
|
)
|
|
|
(1,838
|
)
|
|
|
(7,040
|
)
|
Other accrued liabilities
|
|
|
(2,428
|
)
|
|
|
1,203
|
|
|
|
3,267
|
|
|
|
2,953
|
|
|
|
4,995
|
|
Other long-term accrued liabilities
|
|
|
(126
|
)
|
|
|
(92
|
)
|
|
|
(92
|
)
|
|
|
(93
|
)
|
|
|
(403
|
)
|
Deferred revenue
|
|
|
4,883
|
|
|
|
(3,352
|
)
|
|
|
(2,725
|
)
|
|
|
(3,219
|
)
|
|
|
(4,413
|
)
|
Net cash provided by (used in) operating activities
|
|
|
(15,336
|
)
|
|
|
(3,678
|
)
|
|
|
(4,028
|
)
|
|
|
1,272
|
|
|
|
(21,770
|
)
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(400
|
)
|
|
|
(400
|
)
|
|
|
(400
|
)
|
|
|
(400
|
)
|
|
|
(1,600
|
)
|
Other assets Royalty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of technology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for business acquisitions, net of cash acquired
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and maturities of short-term investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(400
|
)
|
|
|
(400
|
)
|
|
|
(400
|
)
|
|
|
(400
|
)
|
|
|
(1,600
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from follow-on public offering, net of issuance costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from other issuances of common stock
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
Repurchase of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds/Payments from financing obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
Net effect of exchange rates on cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(10,736
|
)
|
|
|
(4,078
|
)
|
|
|
(4,428
|
)
|
|
|
872
|
|
|
|
(18,370
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
25,452
|
|
|
|
14,716
|
|
|
|
10,638
|
|
|
|
6,210
|
|
|
|
25,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
14,716
|
|
|
$
|
10,638
|
|
|
$
|
6,210
|
|
|
$
|
7,082
|
|
|
$
|
7,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
2008
Projected Departmental Expense and Headcount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense $(000s)
|
|
Q108
|
|
|
Q208
|
|
|
Q308
|
|
|
Q408
|
|
|
Plan 2008
|
|
|
Professional Services
|
|
$
|
6,962
|
|
|
$
|
6,639
|
|
|
$
|
5,988
|
|
|
$
|
5,335
|
|
|
$
|
24,924
|
|
Sales
|
|
|
3,304
|
|
|
|
3,566
|
|
|
|
4,535
|
|
|
|
4,297
|
|
|
|
15,702
|
|
Business Development
|
|
|
564
|
|
|
|
609
|
|
|
|
669
|
|
|
|
653
|
|
|
|
2,495
|
|
Marketing
|
|
|
378
|
|
|
|
377
|
|
|
|
378
|
|
|
|
378
|
|
|
|
1,510
|
|
Development
|
|
|
3,622
|
|
|
|
3,629
|
|
|
|
3,569
|
|
|
|
3,568
|
|
|
|
14,388
|
|
Administration
|
|
|
4,050
|
|
|
|
3,878
|
|
|
|
3,542
|
|
|
|
3,539
|
|
|
|
15,008
|
|
Total Motive
|
|
$
|
18,879
|
|
|
$
|
18,697
|
|
|
$
|
18,681
|
|
|
$
|
17,769
|
|
|
$
|
74,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Headcount
|
|
Q108
|
|
|
Q208
|
|
|
Q308
|
|
|
Q408
|
|
|
Plan 2008
|
|
|
Professional Services
|
|
|
133
|
|
|
|
135
|
|
|
|
135
|
|
|
|
135
|
|
|
|
135
|
|
Sales
|
|
|
37
|
|
|
|
37
|
|
|
|
37
|
|
|
|
37
|
|
|
|
37
|
|
Business Development
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
|
|
9
|
|
Marketing
|
|
|
4
|
|
|
|
4
|
|
|
|
4
|
|
|
|
4
|
|
|
|
4
|
|
Development
|
|
|
100
|
|
|
|
101
|
|
|
|
101
|
|
|
|
101
|
|
|
|
101
|
|
Administration
|
|
|
42
|
|
|
|
42
|
|
|
|
42
|
|
|
|
42
|
|
|
|
42
|
|
Total Departments
|
|
|
325
|
|
|
|
328
|
|
|
|
328
|
|
|
|
328
|
|
|
|
328
|
|
|
|
Item 9.
|
Material
to be Filed as Exhibits.
|
The following Exhibits are attached hereto:
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
(a)(1)
|
|
|
Letter to the stockholders of the Company, dated July 16,
2008.
|
|
(a)(2)
|
|
|
Offer to Purchase, dated July 16, 2008 (incorporated herein
by reference to Exhibit (a)(1)(A) of the Schedule TO filed
by Alcatel Lucent, Parent and the Purchaser on July 16,
2008).
|
|
(a)(3)
|
|
|
Form of Letter of Transmittal (incorporated herein by reference
to Exhibit (a)(2)(B) of the Schedule TO filed by Alcatel
Lucent, Parent and the Purchaser on July 16, 2008).
|
|
(a)(4)
|
|
|
Opinion of Thomas Weisel Partners, dated June 16, 2008
(included as Annex B to this Statement).
|
|
(a)(5)
|
|
|
Joint Press Release of Alcatel Lucent and the Company, dated
June 17, 2008 (incorporated herein by reference to
Exhibit 99.1 of the Companys Current Report on
Form 8-K
filed on June 17, 2008).
|
|
(a)(6)
|
|
|
Section 262 of the Delaware General Corporation Law
(included as Annex C to this Statement).
|
|
(e)(1)
|
|
|
Agreement and Plan of Merger, dated as of June 16, 2008, by
and among the Company, Parent and the Purchaser (incorporated
herein by reference to Exhibit 2.1 of the Current Report on
Form 8-K
filed by the Company on June 17, 2008).
|
|
(e)(2)
|
|
|
Information Statement of the Company, dated July 16, 2008
(included as Annex A to this Statement).
|
|
(e)(3)
|
|
|
Exclusivity Letter, dated April 24, 2008, between the
Company and Alcatel Lucent.
|
|
(e)(4)
|
|
|
Nondisclosure Agreement, dated March 28, 2007, between the
Company and Parent.
|
|
(e)(5)
|
|
|
The Companys Key Employee Incentive Bonus Plan, effective
as of May 29, 2007 (incorporated by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed on May 31, 2007).
|
|
(e)(6)
|
|
|
Form of Cash Award Agreement under the Companys Key
Employee Incentive Bonus Plan (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
filed on May 31, 2007).
|
|
(e)(7)
|
|
|
Form of Indemnification Agreement for directors and officers
(incorporated herein by reference to Exhibit 10.5 of the
Companys registration statement on
Form S-1
(File
No. 333-111030)
filed on December 9, 2003).
|
|
(e)(8)
|
|
|
Employment Agreement, dated February 20, 2006, between the
Company and Alfred Mockett (incorporated herein by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed on February 21, 2006).
|
32
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
(e)(9)
|
|
|
Restricted Stock Agreement, dated February 20, 2006,
between the Company and Alfred Mockett (incorporated herein by
reference to Exhibit 10.2 of the Companys Current
Report on
Form 8-K
filed on February 21, 2006).
|
|
(e)(10)
|
|
|
Amendment to Restricted Stock Agreement, dated as of
June 16, 2008, between the Company and Alfred Mockett
(incorporated herein by reference to Exhibit 10.2 to the
Companys Current Report on
Form 8-K
filed on June 17, 2008).
|
|
(e)(11)
|
|
|
Non-Qualified Stock Option Agreement, dated February 20,
2006, between the Company and Alfred Mockett (incorporated
herein by reference to Exhibit 10.3 of the Companys
Current Report on
Form 8-K
filed on February 21, 2006).
|
|
(e)(12)
|
|
|
Stock Option Termination Agreement, dated as of June 16,
2008, between the Company and Alfred Mockett (incorporated
herein by reference to Exhibit 10.3 to the Companys
Current Report on
Form 8-K
filed on June 17, 2008).
|
|
(e)(13)
|
|
|
Indemnification Agreement, dated February 20, 2006, between
the Company and Alfred Mockett (incorporated herein by reference
to Exhibit 10.4 of the Companys Current Report on
Form 8-K filed on February 21, 2006).
|
|
(e)(14)
|
|
|
Employment Agreement, dated September 27, 2007, between the
Company and Richard Hanna (incorporated herein by reference to
Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed on October 1, 2007).
|
|
(e)(15)
|
|
|
Employment Agreement, dated September 27, 2007, between the
Company and Jack Greenberg (incorporated herein by reference to
Exhibit 10.2 of the Companys Current Report on
Form 8-K
filed on October 1, 2007).
|
|
(e)(16)
|
|
|
Employment Agreement, dated September 27, 2007, between the
Company and Mike Fitzpatrick (incorporated herein by reference
to Exhibit 10.1 of the Companys Current Report on
Form 8-K
filed on October 10, 2007).
|
|
(e)(17)
|
|
|
Employment Agreement, dated September 18, 2003, between
Motive Communications Deutschland GmbH and Markus Remark.
|
|
(e)(18)
|
|
|
Proposed Employment Agreement, between the Company and Markus
Remark.
|
|
(e)(19)
|
|
|
Employment Agreement, dated December 7, 2007, between the
Company and Anna E. Clepper (incorporated herein by reference to
Exhibit 10.16 of the Companys Current Report on
Form 8-K
filed on March 17, 2008).
|
|
(e)(20)
|
|
|
The Companys 2006 Director Compensation Plan, as
amended (incorporated herein by reference to Exhibit 10.7
of the Companys Current Report on
Form 8-K
filed on March 17, 2008).
|
|
(e)(21)
|
|
|
Form of Amendment to Employment Agreements of Certain Officers
(incorporated herein by reference to Exhibit 10.1 to the
Companys Current Report on
Form 8-K
filed on June 17, 2008).
|
|
(e)(22)
|
|
|
Stock Option Termination Agreement, dated as of June 16,
2008, by and among Motive, Inc., and each of Richard Hanna, Mike
Fitzpatrick, Jack Greenberg, Virginia Gambale, Mike Maples, Tom
Meredith and Dave Sikora (incorporated herein by reference to
Exhibit 10.4 to the Companys Current Report on
Form 8-K
filed on June 17, 2008).
|
|
(e)(23)
|
|
|
Amended and Restated Equity Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2004).
|
|
(e)(24)
|
|
|
Amendment to Amended and Restated Equity Incentive Plan of
Motive, Inc. (incorporated by reference to Exhibit 10.6 of
the Companys Current Report on
Form 8-K
filed on February 21, 2006).
|
|
(g)
|
|
|
Not applicable.
|
33
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is
true, complete and correct.
MOTIVE, INC.
|
|
|
Date: July 16, 2008
|
|
By: /s/ Jack
Greenberg
Name: Jack
Greenberg
Title: General Counsel and
Secretary
|
34
ANNEX A
INFORMATION
STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND
RULE 14F-1
THEREUNDER
This Information Statement is being mailed on or about
July 16, 2008 as part of the Solicitation/Recommendation
Statement on
Schedule 14D-9
(the Statement) of Motive, Inc. (the
Company). Stockholders are receiving this
Information Statement in connection with the possible election
of persons designated by Lucent Technologies Inc., a Delaware
corporation (Parent), to a majority of seats on the
Board of Directors of the Company (the Board of
Directors or the Board). On June 16,
2008, the Company entered into an Agreement and Plan of Merger
(the Merger Agreement) with Parent and Magic
Acquisition Subsidiary Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent (the Purchaser),
pursuant to which Purchaser has commenced a tender offer to
purchase all of the issued and outstanding shares (the
Shares) of common stock, par value $0.001 per share,
of the Company (the Common Stock), for $2.23 per
Shares, in cash to the seller (the Offer Price)
without interest and less any applicable withholding taxes, upon
the terms and subject to the conditions set forth in the Merger
Agreement, the Offer to Purchase dated July 16, 2008 (as
amended or supplemented from time to time, the Offer to
Purchase) and the related Letter of Transmittal (the
Letter of Transmittal which, together with the Offer
to Purchase, constitute the Offer). Copies of the
Offer to Purchase and the Letter of Transmittal have been mailed
to stockholders of the Company and are filed as Exhibits
(a)(1)(A) and (a)(2)(B), respectively, to the Tender Offer
Statement on Schedule TO (as amended or supplemented from
time to time, the Schedule TO) filed by Alcatel
Lucent, Parent and Purchaser with the Securities and Exchange
Commission (the SEC) on July 16, 2008. The
Merger Agreement provides that on the first business day after
the satisfaction or waiver of certain conditions, and in
accordance with the Delaware General Corporation Law (the
DGCL), the Company, Parent and Purchaser will
complete a second-step merger (the Merger) through
the short form procedures available under the DGCL
without a meeting of the Companys stockholders, in which
Purchaser will be merged with and into the Company, with the
Company as the surviving corporation (such surviving
corporation, the Surviving Corporation). At the
effective time of the Merger (the Effective Time),
each issued and outstanding share of common stock, par value
$0.001 per share, of Purchaser will be converted into one
validly issued, fully paid and nonassessable share of common
stock of the Surviving Corporation, all Shares that are owned by
the Company, Parent or Purchaser and any of their respective
direct or indirect wholly-owned subsidiaries will be canceled
and retired and will cease to exist and all other issued and
outstanding Shares (other than Dissenting Shares, as
contemplated by Section 262 of the DGCL) will be converted
into the right to receive an amount in cash equal to the Offer
Price, without interest (the Per Share Price).
Shares held by stockholders who have not voted in favor of the
Merger or consented thereto in writing and who have properly
demanded appraisal and complied with the provisions of
Section 262 of the DGCL relating to dissenters rights
of appraisal (the Dissenting Shares) will not be
converted into a right to receive the Per Share Price, unless
such stockholder fails to perfect or withdraws or otherwise
loses his, her or its right to appraisal.
The Offer, the Merger, and the Merger Agreement are more fully
described in the Statement, to which this Information Statement
forms Annex A, which was filed by the Company with the
SEC on July 16, 2008 and which is being mailed to
stockholders of the Company along with this Information
Statement. This Information Statement is being mailed to
stockholders in accordance with Section 14(f) of the
Securities Exchange Act of 1934, as amended (the Exchange
Act) and
Rule 14f-1
promulgated thereunder. The information set forth herein
supplements certain information set forth in the Statement.
Information set forth herein related to Parent, Purchaser or the
Purchaser Designees (as defined below) has been provided by
Parent. Stockholders are urged to read this Information
Statement carefully. Stockholders are not, however, required to
take any action in connection with the matters set forth herein.
Capitalized terms used and not otherwise defined herein have the
respective meanings ascribed thereto in the Statement.
Pursuant to the Merger Agreement, Purchaser commenced the Offer
on July 16, 2008. The Offer is currently scheduled to
expire at 12:00 a.m., New York City time, on
August 12, 2008 unless Purchaser extends it.
A-1
GENERAL
The Common Stock is the only class of equity securities of the
Company outstanding which is entitled to vote at a meeting of
the stockholders of the Company. Each share has one vote. As of
the close of business on June 30, 2008, there were
27,754,569 outstanding Shares of Common Stock. See
Security Ownership of Certain Beneficial Owners and
Management below.
RIGHT TO
DESIGNATE DIRECTORS AND THE PURCHASER DESIGNEES
The Board
of Directors of the Company
The Merger Agreement provides that, subject to compliance with
Section 14(f) of the Exchange Act and
Rule 14f-1
promulgated thereunder, promptly after the Acceptance Date, and
from time to time thereafter as Shares are acquired, Parent will
be entitled to designate for election or appointment to the
Board such number of directors (the Purchaser
Designees), rounded up to the next whole number, as will
give Parent representation on the Board equal to at least the
number of directors which equals the product obtained by
multiplying the total number of authorized directors on the
Board by the percentage that the aggregate number of Shares
beneficially owned by Parent or any affiliate of Parent
(including any Shares accepted for payment by Purchaser pursuant
to the Offer) bears to the total number of Shares then issued
and outstanding.
Notwithstanding the foregoing, the Merger Agreement requires
that, until the Effective Time, the Company will have at least
two directors who were members of the Board as of the date of
the Merger Agreement, both of whom will not be officers of the
Company or designees, stockholders, affiliates or associates
(within the meaning of the federal securities laws) of Parent or
Purchaser prior to the date of the Merger Agreement (the
Independent Directors). If fewer than two
Independent Directors remain then the remaining Independent
Director (if any) (or if no Independent Directors remain, the
other Directors) will designate persons to fill the vacancies
who will not be either officers of the Company or designees,
stockholders, affiliates or associates of Parent. Prior to the
Effective Time, each committee of the Board shall have one
member who is an Independent Director. Notwithstanding anything
in the Merger Agreement to the contrary, during the period after
the election or appointment of directors designated by Parent
but prior to the Effective Time, any (1) amendment or
termination of the Merger Agreement by the Company,
(2) extension by the Company of the time for the
performance of any of the obligations or other acts of the
Parent or Purchaser under the Merger Agreement, (3) waiver
of any of the Companys rights under the Merger Agreement,
and (4) taking of any other action by the Company in
connection with the Merger Agreement or the transactions
contemplated thereby and required to be taken by the Board or
any committee thereof, shall require the concurrence of all of
the Independent Directors then in office, if such amendment,
termination, extension or waiver would or could reasonably be
expected to have an adverse effect on the stockholders of the
Company (other than Purchaser, Parent, and their affiliates).
The directors of the Company who are not Purchaser Designees
will have the authority to retain counsel (which may include
current counsel to the Company) and other advisors at the
reasonable expense of the Company as determined appropriate by
these directors in connection with the exercise of their duties
as directors and will have the authority to institute any action
on behalf of the Company to enforce the performance of the
Merger Agreement.
The Purchaser Designees will be selected by Parent from among
the individuals listed below. Each of the following individuals
has consented to serve as a director of the Company if appointed
or elected. If necessary, Parent may choose additional or other
Purchaser Designees, subject to the requirements of
Rule 14f-1
under the Exchange Act. Parent has advised the Company that, to
the best of its knowledge, none of the Purchaser Designees is
currently a director of, or holds any position with, the Company
or any of its subsidiaries. Parent has advised the Company that,
to the best of Parents knowledge, none of its designees or
any of his or her affiliates (i) has a familial
relationship with any directors or executive officers of the
Company or any of its subsidiaries, or (ii) has been
involved in any transactions with the Company or any of its
directors, officers or affiliates that are required to be
disclosed pursuant to the rules and regulations of the SEC,
except as may be disclosed herein and other than with respect to
the transactions between Parent, Purchaser and the Company that
have been described in the Offer to Purchaser or the Statement.
A-2
Name,
Age, and Principal Occupation and Employment History of the
Purchaser Designees
The name, present principal occupation or employment and
five-year employment history of each of the individuals who may
be selected as Purchaser Designees are set forth below. Unless
otherwise indicated, the business address of each such person is
c/o Lucent
Technologies Inc., 600 Mountain Avenue, Murray Hill, NJ 07974
and his or her telephone number is
(908) 582-8500.
|
|
|
|
|
Name
|
|
Principal Occupation or Employment During the Past Five
Years
|
|
Age
|
|
Luis Martinez Amago
|
|
President, Fixed Access, Alcatel Lucent. Previously,
Mr. Martinez Amago served as President of
Multimedia & Payment Business Division of Alcatel and
then Alcatel Lucent
(2006-2007),
as President of the Wireless Transmission Division of Alcatel
(2004-2006),
Chief Operating Officer of the Integration and Services Division
of Alcatel (2004) and Services Lines Senior Vice President,
Integration and Services Division of Alcatel
(2003-2004).
|
|
46
|
Mark G. Gibbens
|
|
Corporate Finance and Chief Investment Officer, Alcatel Lucent
(since 2008.) Previously, Mr. Gibbens served as Chief
Investment Officer and President of Alcatel Lucent Investment
Management Corp.
(2007-2008)
and as Vice President, Corporate Development and Treasurer of
Parent
(2003-2006)
and as Assistant Treasurer of Parent
(2000-2002).
|
|
41
|
Michel Rahier
|
|
President, Carrier Business Group. Mr. Rahier also serves
as a Director of Alcatel Shanghai Bell Co., Ltd. (since 2004),
Director of Alcatel-Lucent Bell N.V. (since 2003), Director of
Alcatel Shanghai Bell Software Co., Ltd. (since 2007), Member of
the Supervisory Board of Alcatel-Lucent Deutschland AG (since
2007) and Director of Magic Acquisition Subsidiary Inc.
since June 2008. Previously, Mr. Rahier served as a
Director of Alcatel Tetetas Telekommunikasy on Endustri Tecaret
AS
(2000-2003)
and Director Shanghai Bell Alcatel MOB
(1997-2004).
|
|
55
|
Parent has advised the Company that, to the best of its
knowledge, none of the Purchaser Designees has, during the past
five years, (i) been convicted in a criminal proceeding
(excluding traffic violations or misdemeanors), (ii) been a
party to any judicial or administrative proceeding that resulted
in a judgment, decree or final order enjoining the person from
future violations of, or prohibiting activities subject to,
U.S. federal or state securities laws, or a finding of any
violation of U.S. federal or state securities laws,
(iii) filed a petition under federal bankruptcy laws or any
state insolvency laws or has had a receiver appointed to the
persons property, or (iv) been subject to any
judgment, decree or final order enjoining the person from
engaging in any type of business practice.
It is expected that the Purchaser Designees will assume office
as promptly as practicable following the purchase by Purchaser
of Shares pursuant to the Offer, which cannot be earlier than
12:00 a.m., New York City time, on August 12, 2008,
and that, upon assuming office, the Purchaser Designees will
constitute at least a majority of the Board. It is not currently
known which of the current directors of the Company will resign.
To the extent the Board will consist of persons who are not
nominees of Parent, the Board is expected to continue to consist
of those persons who are currently directors of the Company who
do not resign.
A-3
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 30, 2008, the
beneficial ownership of each current director, each nominee for
director, the Chief Executive Officer and the Companys two
most highly compensated executive officers, all executive
officers and directors as a group and each stockholder known to
management of the Company to own beneficially more than 5% of
the Companys Common Stock.
Under the rules of the SEC, beneficial ownership includes voting
or investment power with respect to securities and includes the
Shares issuable under stock options and warrants that are
exercisable within 60 days of the date set forth above.
Shares so issuable under stock options and warrants are deemed
outstanding for purposes of computing the percentage ownership
of the person holding options or warrants but are not
outstanding for purposes of computing the percentage ownership
of any other person.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of
|
|
|
|
|
|
|
|
|
Beneficial
|
|
|
Percent of
|
|
Title of Class
|
|
Name of Beneficial Owner(1)
|
|
Ownership(2)
|
|
|
Class(3)
|
|
|
Common Stock
|
|
Alfred T. Mockett(4)
|
|
|
1,135,952
|
|
|
|
4.1
|
%
|
Common Stock
|
|
Richard Hanna(5)
|
|
|
166,666
|
|
|
|
0.6
|
%
|
Common Stock
|
|
Jack Greenberg
|
|
|
116,666
|
|
|
|
0.4
|
%
|
Common Stock
|
|
Thomas J. Meredith(6)
|
|
|
105,035
|
|
|
|
0.4
|
%
|
Common Stock
|
|
Virginia Gambale(7)
|
|
|
82,692
|
|
|
|
0.3
|
%
|
Common Stock
|
|
Michael J. Maples, Sr.(8)
|
|
|
115,140
|
|
|
|
0.4
|
%
|
Common Stock
|
|
David Sikora(9)
|
|
|
206,729
|
|
|
|
0.7
|
%
|
Common Stock
|
|
Special Situations Fund(10)
|
|
|
4,301,092
|
|
|
|
15.5
|
%
|
Common Stock
|
|
Austin Ventures(11)
|
|
|
4,296,150
|
|
|
|
15.5
|
%
|
Common Stock
|
|
S Squared Technology(12)
|
|
|
3,318,600
|
|
|
|
12.0
|
%
|
Common Stock
|
|
T. Rowe Price(13)
|
|
|
2,201,193
|
|
|
|
7.9
|
%
|
Common Stock
|
|
Directors & executive officers(14)
|
|
|
2,144,888
|
|
|
|
7.7
|
%
|
|
|
|
(1) |
|
The disclosure provided was taken from the most recent
Schedule 13G or 13D (as amended) or Form 4, as filed
with the SEC, and such were relied upon by the Company in the
preparation of this Information Statement. |
|
(2) |
|
Except as otherwise indicated in the footnotes to this table and
pursuant to applicable community property laws, to the
Companys knowledge the persons named in this table have
sole voting and investment power with respect to all Shares
shown as beneficially owned by them. |
|
(3) |
|
Percentage ownership is based on 27,754,569 shares of
Common Stock outstanding as of June 30, 2008. Shares of
Common Stock subject to stock options and warrants that are
currently exercisable or exercisable within 60 days of that
date are deemed to be outstanding for the purpose of computing
the percentage ownership of a person or entity in this table,
but are not treated as outstanding for the purpose of computing
the percentage ownership of any other person or entity. |
|
(4) |
|
Mr. Mockett has sole voting power and sole dispositive
power with respect to 444,286 Shares. Also includes
691,666 Shares subject to stock options that are
exercisable within 60 days. |
|
(5) |
|
Includes 166,666 Shares subject to stock options that are
exercisable within 60 days. |
|
(6) |
|
Mr. Meredith has sole voting power and sole dispositive
power with respect to 26,625 Shares. Also includes
78,410 Shares subject to stock options that are exercisable
within 60 days. |
|
(7) |
|
Includes 82,692 Shares subject to stock options that are
exercisable within 60 days. |
|
(8) |
|
Mr. Maples, Sr. has sole voting power and sole dispositive
power with respect to 33,929 Shares. Also includes
81,211 Shares subject to stock options that are exercisable
within 60 days. |
|
(9) |
|
Mr. Sikora has sole voting power and sole dispositive power
with respect to 31,820 Shares and indirect voting power and
dispositive power with respect to 104,814 Shares. Also
includes 70,095 Shares subject to stock options that are
exercisable within 60 days. |
A-4
|
|
|
(10) |
|
Based upon Amendment No. 1 to Schedule 13G filed with
the SEC on December 10, 2007 by Austin W. Marxe and David
M. Greenhouse, whose address is 527 Madison Avenue,
Suite 2600, New York, New York 10022. Includes
193,966 Shares held by Special Situations Cayman Fund,
L.P.; 301,158 Shares held by Specials Situations Technology
Fund, L.P.; 1,984,959 Shares held by Special Situations
Technology Fund II, L.P.; 843,946 Shares held by
Special Situations Fund III, L.P.; and 977,063 Shares
held by Special Situations Fund II QP, L.P. |
|
(11) |
|
Based upon the Schedule 13G filed with the SEC on
February 11, 2005 by funds and individuals associated with
Austin Ventures, including Austin Ventures V, L.P., Austin
Ventures V Affiliates Fund, L.P., AV Partners, L.P., Austin
Ventures VI, L.P., Austin Ventures VI Affiliates Fund, L.P., AV
Partners VI, L.P., Austin Ventures VII, L.P., AV Partners VII,
L.P., Joseph C. Aragona, Kenneth P. DeAngelis, Jeffrey C.
Garvey, John D. Thornton, Edward E. Olkkola and Blaine
F. Wesner, whose address is 300 West Sixth Street,
Suite 2300, Austin, Texas 78701. Includes
1,602,460 Shares held by AV Partners V, L.P.;
80,135 Shares held by Austin Ventures V Affiliates
Fund, L.P.; 1,595,547 Shares held by Austin Ventures VI,
L.P.; 44,875 Shares held by Austin Ventures VI Affiliates
Fund, L.P.; and 973,133 Shares held by Austin Ventures VII,
L.P. |
|
(12) |
|
Based upon Amendment No. 3 to Schedule 13G filed with
the SEC on April 30, 2008 by S Squared Technology, LLC, S
Squared Technology Partners, L.P., Seymour L. Goldblatt and
Kenneth A. Goldblatt, whose address is 515 Madison Avenue, New
York, New York 10022. Includes 2,754,230 Shares held by
S Squared Technology, LLC and 564,370 Shares held by S
Squared Technology Partners, L.P., all of such shares being
beneficially owned by Seymour L. Goldblatt and Kenneth A.
Goldblatt. |
|
(13) |
|
Based upon Amendment No. 4 to Schedule 13G filed with
the SEC on February 13, 2008 by T. Rowe Price Associates,
Inc., whose address is 100 E. Pratt Street, Baltimore,
Maryland 21202. Includes 2,201,193 shares held by T. Rowe
Price Associates, Inc. |
|
(14) |
|
The address of each executive officer and director is
c/o Motive,
Inc., Attention: Investor Relations, 12515 Research Blvd.,
Building 5, Austin, TX 78759. |
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act, requires the
Companys directors, executive officers, and holders of
more than 10% of the Companys Shares to file with the SEC
reports regarding their ownership and changes in ownership of
the Companys securities. The Company believes that during
fiscal 2007, its directors, executive officers, and 10%
stockholders complied with all Section 16(a) filing
requirements. In making this statement, the Company has relied
upon examination of publicly filed copies of Forms 3, 4,
and 5, and Schedules 13D and 13G, and amendments thereto, and
representations of its directors and executive officers.
BOARD OF
DIRECTORS
The Board is divided into three classes and at each annual
meeting of stockholders, the nominees for the class up for
election stand for election for a three-year term. The following
table, together with the accompanying text, present certain
information, as of June 30, 2008, with respect to each of
the current directors of the Company.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position(s) Held with the Company
|
|
Alfred T. Mockett
|
|
|
59
|
|
|
Chairman of the Board, Chief Executive Officer
|
Thomas J. Meredith
|
|
|
58
|
|
|
Director
|
Virginia Gambale
|
|
|
48
|
|
|
Director
|
Michael J. Maples, Sr.
|
|
|
65
|
|
|
Director
|
David Sikora
|
|
|
46
|
|
|
Lead Director
|
Alfred T. Mockett, Chairman & Chief Executive
Officer. Mr. Mockett joined the Company in February 2006 as
Chairman and Chief Executive Officer. Prior to joining the
Company, Mr. Mockett served as Chairman and Chief Executive
Officer of American Management Systems Inc. (AMSY) from 2001 to
2004, a $1 billion IT consulting and professional services
company which was acquired in 2004 by the CGI group. Before
AMSY, Mr. Mockett
A-5
served on the Executive Committee of BT from 1991 to 2001 in a
range of divisional capacities, including Chief Executive
Officer of BT Ignite.
Thomas J. Meredith has served as a Director of the
Company since June 2003. In addition, Mr. Meredith sits on
the Board of Motorola Inc. and, until recently, served as
Executive Vice President and acting Chief Financial Officer at
Motorola. He is also currently Chief Executive Officer of MFI
Capital, a private investment firm. Mr. Meredith served as
Managing Director of Dell Ventures and Senior Vice President of
Business Development and Strategy for Dell Computer Corporation
from
2000-2001.
Michael J. Maples, Sr. has served as a Director of
the Company since June 1997. Mr. Maples currently manages
private investments and ranches. From April 1988 to July 1995,
Mr. Maples held various management positions at Microsoft
Corporation, the most recent of which was Executive Vice
President of the Worldwide Products Group and a member of the
Office of the President. He also serves as Director of Lexmark
International, Inc., a laser and inkjet printer manufacturer,
Multimedia Games, a manufacturer of gaming equipment for Indian
casinos, and Sonic Industries, a drive-in restaurant franchise.
Virginia Gambale has served as a Director of the Company
since July 2004. Ms. Gambale served as a general partner in
DB Capital Ventures until her retirement from Wall Street in
2003. Ms. Gambale has also served on a number of public and
privately held boards including JetBlue (NASDAQ-JBLU),
Workbrain, Synchronoss (NASDAQ-SNCR), IQ Financial and KNOA
among others. She is currently the founder and Managing Partner
of Azimuth Partners, a private investment firm.
David Sikora has served as a Director of the Company
since January 2000. Mr. Sikora served as Chairman and CEO
of several leading software companies, including Pervasive
Software, Question Technologies and Ventix Systems. In addition,
Mr. Sikora served as President and CEO of Houston-based
ForeFront Group, Inc., a leading provider of
e-Learning
solutions for information technology professionals.
2007
Board Meetings
The Board held six meetings during the 2007 fiscal year. All
directors, except Virginia Gambale, attended at least
75 percent (75%) of the total number of meetings of the
Board during the 2007 fiscal year. All directors attended at
least 75 percent (75%) of the total number of meetings held
by all committees of the Board on which each served during the
2007 fiscal year. The Company has not adopted a formal policy on
directors attendance at Board or stockholder meetings,
because the Board believes that director attendance,
preparedness and active participation have been stressed and
substantially adhered to by the current Board members. The Board
will continue to monitor director attendance and will formally
adopt a policy if it deems appropriate.
Director
Independence
The Board has determined that except for Alfred Mockett, the
Companys Chairman and Chief Executive Officer, no other
director has a relationship, which in the opinion of the Board,
would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director, and that all
other directors meet the criteria for independence under the
Nasdaq listing standards. In addition, because the Chairman of
the Board is also the Chief Executive Officer of the Company,
the Board determined to appoint a lead director who meets the
criteria for independence under the Nasdaq listing standards.
David Sikora is the current lead director. The Board has also
determined that the members of each of its committees, including
the Audit Committee and the Nominating Committee, meet the
criteria for membership applicable to each committee under the
Nasdaq listing standards and applicable SEC rules and
regulations.
There are no family relationships among the Companys
directors or executive officers.
During the year ended December 31, 2007, the Company did
not enter into any material transactions or series of
transactions which, in the aggregate, would be considered
material in which any officer, director or beneficial owner of
5% or more of any class of the Companys capital stock, or
any immediate family member of any of the preceding persons, had
a direct or indirect material interest, nor are any such
transactions presently proposed.
A-6
Board
Committees
Standing committees of the Board include the Audit Committee,
Compensation Committee and the Nominating Committee. Committee
members are appointed by the Board and serve until their
successors are appointed and qualified or until their earlier
resignation or removal.
The Board has appointed the following independent directors to
serve as members of the Audit, Compensation and Nominating
Committees:
|
|
|
|
|
|
|
|
|
Audit
|
|
Compensation
|
|
Nominating
|
|
|
Committee
|
|
Committee
|
|
Committee
|
|
Virginia Gambale
|
|
|
|
Chair
|
|
|
Michael J. Maples Sr.
|
|
Member
|
|
Member
|
|
|
Thomas J. Meredith
|
|
Chair
|
|
|
|
Member
|
David Sikora
|
|
Member
|
|
|
|
Chair
|
Nominating Committee. The purpose of the
Nominating Committee of the Board of is to (1) identify
individuals qualified to become Board members;
(2) recommend to the Board a slate of director nominees to
be elected by the stockholders at each annual meeting of
stockholders and, when appropriate, director appointees to take
office between annual meetings; and (3) recommend to the
Board membership on standing Board committees. The Nominating
Committee operates pursuant to a charter, which can be viewed on
the Companys website at www.motive.com under the Investor
Relations / Corporate Governance tab. Other
information contained on the Companys website, except as
expressly noted otherwise, does not constitute a part of this
Information Statement.
Audit Committee. The Audit Committee assists
the Board in fulfilling its responsibility to oversee
(1) the quality and integrity of the Companys
financial statements and the process that produces them,
(2) the Companys compliance with legal and regulatory
requirements and (3) the qualifications and independence of
the Companys independent registered public accountants.
The Audit Committee also oversees the performance of the
Companys internal audit function. The Audit Committee has
sole responsibility for the retention and termination of the
Companys independent registered public accountants. The
Audit Committee operates pursuant to a charter, which can be
viewed on the Companys website at www.motive.com under the
Investor Relations / Corporate Governance tab. The
Companys Audit Committee consisted of Tom Meredith, Dave
Sikora and Harvey White, until Mr. Whites resignation
from the Board on October 9, 2007. Mr. White was
replaced by Mr. Maples. Other information contained on the
Companys website, except as expressly noted otherwise,
does not constitute a part of this Information Statement.
All of the members of the Audit Committee are independent, as
defined under Nasdaq Marketplace Rule 4200(a)(15), and met
the independence requirements of
rule 10A-3(b)(1)(i)
under the Exchange Act, as well as the requirements of Nasdaq
Marketplace Rule 4350(d)(2). Mr. Meredith serves as
chairman of the Audit Committee and the Board of Directors has
determined that Mr. Meredith qualifies as a financial
expert, as defined by the rules of the SEC. The other
Audit Committee members (Mr. Sikora and Mr. Maples)
are financially literate for purposes of the SEC rules.
Compensation Committee. The Compensation
Committees primary function is to support the Board in
fulfilling its oversight responsibilities relating to senior
management performance, compensation and succession. In this
regard, the Board and Compensation Committee strive to align
total compensation for the CEO and other senior executives with
the long-term interests of the stockholders. The Compensation
Committees duties include: (1) making recommendations
to the Board with respect to all compensation plans covering
executive officers, (2) administering the Companys
equity plans, and (3) reviewing the Companys employee
benefits. The Compensation Committee may delegate approval of
certain transactions to a subcommittee consisting of
non-employee, outside directors. The Board may appoint a
secondary compensation committee, composed of one or more
directors, to administer the Companys equity compensation
plans with respect to employees and consultant who are not
directors or Section 16 officers for purposes of the
Exchange Act. The Compensation Committee operates pursuant to a
charter, which can be viewed on the Companys website at
www.motive.com under the Investor
Relations / Corporate Governance tab. Other
information contained on the Companys website, except as
expressly noted otherwise, does not constitute a part of this
Information Statement.
A-7
Board
Composition and Director Considerations
Pursuant to the Nominating Committees charter, director
nominees are recommended for Board selection by the Committee,
which is comprised solely of independent members of the Board.
The Board periodically assesses the appropriate size and
composition of the Board, and whether any vacancies on the Board
are expected due to retirement or otherwise. In the event that
vacancies are anticipated or otherwise arise, the Nominating
Committee reviews and assesses potential director candidates.
Various methods are utilized for identifying and evaluating
director candidates. Generally, candidates come to the
Nominating Committees attention through recommendations of
Board members, management or professional search firms, but the
Nominating Committee considers qualified candidates recommended
by stockholders who have complied with the procedures of the
Companys Amended and Restated Bylaws (the
Bylaws). The Nominating Committee considers, in
addition to other criteria, a Director candidates personal
and professional integrity, experience, skills, ability, and
willingness to devote the time and effort necessary to be an
effective board member, and commitment to acting in the best
interests of the Company and its stockholders.
Director
Recommendations by Stockholders
The Nominating Committee carefully considers all qualified
director candidates, whether such candidates are recommended by
a stockholder or otherwise. The Nominating Committee considers
qualified candidates from many sources, but the Company has not
adopted a formal policy on stockholders submitting director
recommendations because it has deemed such a policy unnecessary
in light of the low numbers of recommendations historically
provided by stockholders. The Nominating Committee evaluates all
director candidates, including incumbents, based on the
considerations set forth above in Board Composition and
Director Considerations.
The Bylaws establish deadlines and procedures that a stockholder
must follow to nominate a director. A person must be a
stockholder of record entitled to vote in the election of
directors on the date that such person gives notice of the
nomination for director. The stockholder must give written
notice of the nomination, either by delivery or by United States
mail, postage prepaid, and such notice must be received by the
Companys Secretary at its principal executive offices not
less than 90 days nor more than 120 days prior to the
anniversary of the date on which the prior years notice of
annual meeting was provided. If the date of the annual meeting
has been changed to be more than 30 calendar days earlier
than or 60 calendar days after that anniversary, then, in order
to be timely, a stockholders notice must be received at
the Companys principal executive offices by the later of
the date that is 60 calendar days before the date of such annual
meeting or the 10th day after the date on which public
announcement of such annual meeting is first made.
A stockholders notice must set forth: (a) as to each
person whom the stockholder proposes to nominate for election or
re-election as a director, all information relating to such
person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Exchange
Act, including such persons written consent to being named
in the proxy statement as a nominee and to serving as a director
if elected; and (b) as to the stockholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination
or proposal is made (i) the name and address of such
stockholder, as they appear on the Companys books, and of
such beneficial owner, (ii) the class and number of shares
of the Company which are owned beneficially and of record by
such stockholder and such beneficial owner.
Any stockholder wishing to recommend a director candidate should
send his recommendation to the Corporate Secretary at the
address provided below.
The Nominating Committee continues to periodically reassess the
Companys need to adopt a formal policy for the receipt of
director recommendations by stockholders and will implement such
policy at the time it deems appropriate.
A-8
Communications
with the Board
Stockholders may communicate with the Board, Board committees,
non-management directors as a group and individual directors by
submitting their communications in writing to the Companys
Corporate Secretary. All communications must identify the
author, state that the author is a stockholder of the Company
and be forwarded to the following address:
Motive,
Inc.
12515 Research Boulevard, Building 5
Austin, Texas
78759-2220
Attn: Corporate Secretary
Re: Stockholder Communication
The Companys Corporate Secretary will distribute all
stockholder communications to the intended recipient upon
receipt.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Virginia Gambale, Michael J. Maples, Sr. and Tom Meredith
served on the Companys Compensation Committee during the
fiscal year ended December 31, 2007. None of the
Companys executive officers served during fiscal year 2007
as a member of a board of directors or compensation committee of
any entity that has had one or more executive officers which
served as a member of the Board or Compensation Committee.
EXECUTIVE
OFFICERS
The following table, together with the accompanying text,
present certain information, as of June 30, 2008, with
respect to each of the executive officers of the Company.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position(s) Held with the Company
|
|
Alfred T. Mockett
|
|
|
59
|
|
|
Chairman of the Board, Chief Executive Officer
|
Richard Hanna
|
|
|
52
|
|
|
Chief Operating Officer
|
Jack Greenberg
|
|
|
58
|
|
|
General Counsel and Secretary
|
Michael Fitzpatrick
|
|
|
54
|
|
|
Chief Financial Officer
|
Markus Remark
|
|
|
44
|
|
|
Senior Vice President, World Wide Services
|
Anna Clepper
|
|
|
47
|
|
|
Vice President, Human Resources
|
Alfred T. Mockett, Chairman & Chief Executive
Officer. Mr. Mockett joined the Company in
February 2006 as Chairman and Chief Executive Officer. Prior to
joining the Company, Mr. Mockett served as Chairman and
Chief Executive Officer of American Management Systems Inc.
(AMSY) from 2001 to 2004, a $1 billion IT consulting and
professional services company which was acquired in 2004 by the
CGI group. Before AMSY, Mr. Mockett served on the Executive
Committee of BT from 1991 to 2001 in a range of divisional
capacities, including Chief Executive Officer of BT Ignite.
Richard Hanna, Chief Operating
Officer. Mr. Hanna joined the Company in
August 2006 as Chief Operating Officer. Prior to joining the
Company, Mr. Hanna served as President of Corinthian
Capital from 2005 to 2006, a management services, advisory and
investment company focused on telecommunications and its
enabling technologies, and was the President of MCI
Small/Medium Business from 2003 to 2005.
Jack Greenberg, General Counsel and
Secretary. Mr. Greenberg joined the Company
in August 2006 as General Counsel. Prior to joining the Company,
Mr. Greenberg was General Counsel of Corinthian Capital
from 2005 to 2006, a management services, advisory and
investment company focused on telecommunications and its
enabling technologies. He served as President of Jack Greenberg
LLC from 2001 to 2006. From 1991 to 2000,
A-9
Mr. Greenberg held a number of senior legal and management
positions at British Telecom, including Senior Vice President,
Legal and International Development. He holds a law degree from
the Rutgers School of Law.
Mike Fitzpatrick, Chief Financial
Officer. Mr. Fitzpatrick joined the Company
in October 2006 as Chief Financial Officer. Prior to joining the
Company, Mr. Fitzpatrick was the Chief Financial Officer of
QuickArrow from 2005 to 2006 and was the Chief Financial Officer
of Traq Wireless from 2003 to 2005. He is a Certified Public
Accountant.
Markus Remark, Senior Vice President, Worldwide
Services. Mr. Remark joined the Company in
September 2003 as Vice President, Services, EMEA and APAC.
Mr. Remark was appointed as an executive officer of the
Company in May of 2008. Prior to his appointment,
Mr. Remark had responsibility for the Companys
service business in Europe, the Middle East, Africa and
Asia/Pacific regions. Prior to joining the Company,
Mr. Remark served as Service Executive-Europe for MatrixOne
GmbH and General Manager/Partner for Adiatus Software GmbH from
2002 to 2003.
Anna Clepper, Vice President, Human
Resources. Ms. Clepper joined the Company in
September 2000. Ms. Clepper has held various senior
management positions at the Company and was appointed as an
executive officer of the Company in September of 2007. Prior to
joining the Company, Ms. Clepper was at Sterling Software
from 1993 to 2000 where she held various senior positions
including Vice President of Channel Sales and Vice President of
Marketing.
Director
and Executive Officer Involvement in Certain Legal
Proceedings
To the Companys knowledge, none of its directors or
executive officers has, during the past five years,
(i) been convicted in a criminal proceeding (excluding
traffic violations or misdemeanors), (ii) been a party to
any judicial or administrative proceeding that resulted in a
judgment, decree or final order enjoining the person from future
violations of, or prohibiting activities subject to,
U.S. federal or state securities laws, or a finding of any
violation of U.S. federal or state securities laws,
(iii) filed a petition under federal bankruptcy laws or any
state insolvency laws or has had a receiver appointed to the
persons property, or (iv) been subject to any
judgment, decree or final order enjoining the person from
engaging in any type of business practice.
EXECUTIVE
AND DIRECTOR COMPENSATION
Executive
Compensation
The Compensation Committee is responsible for (a) reviewing
and making recommendations to the Board of Directors on matters
relating to employee compensation and benefit plans, and
(b) reviewing and determining the salaries and bonuses of
executive officers of the Company and establishing the general
compensation policies for such individuals.
The 2007 compensation structure for the Companys executive
officers was designed to provide incentives for these officers
to maximize continued operations of the Company and development
of the next generation of the Companys software products
while addressing the demands associated with the ongoing
restatement of the Companys historical financial
statements and the resulting litigation and related matters. It
is the Companys general objective to provide the
Companys executive officers with (i) base salary at
levels appropriate for the goals set for the Companys
management team, and (ii) performance-based incentives that
reward solid financial and other performance with cash bonuses,
restricted stock,
and/or stock
option awards.
Overall, the Compensation Committee believes that the
compensation provided to the Companys executive officers
in 2007 was appropriate in light of the significant change in
senior management that occurred during 2006, the extraordinary
demands placed on management as a result of the restatement, the
resulting litigation and related matters, general economic
conditions, assessments of individual and corporate performance,
and other relevant factors.
A-10
The table below summarizes the total compensation paid or earned
by each the Companys Chief Executive Officer and two other
most highly compensated officers (Named Executive
Officers or NEOs) for the years ended
December 31, 2006 and 2007.
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards(1)
|
|
Awards(1)
|
|
Compensation(2)
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Alfred T. Mockett,
|
|
|
2007
|
|
|
|
350,000
|
|
|
|
334,333
|
|
|
|
230,601
|
|
|
|
589,829
|
|
|
|
87,818
|
|
|
|
1,592,581
|
|
Chairman and CEO(3)
|
|
|
2006
|
|
|
|
299,744
|
|
|
|
210,000
|
|
|
|
192,641
|
|
|
|
480,029
|
|
|
|
74,728
|
|
|
|
1,257,142
|
|
Richard Hanna,
|
|
|
2007
|
|
|
|
275,000
|
|
|
|
199,333
|
|
|
|
|
|
|
|
121,472
|
|
|
|
75,084
|
|
|
|
670,889
|
|
Chief Operating Officer(3)
|
|
|
2006
|
|
|
|
110,528
|
|
|
|
60,000
|
|
|
|
|
|
|
|
44,229
|
|
|
|
26,441
|
|
|
|
241,198
|
|
Jack Greenberg,
|
|
|
2007
|
|
|
|
225,000
|
|
|
|
143,000
|
|
|
|
|
|
|
|
78,772
|
|
|
|
73,281
|
|
|
|
520,053
|
|
General Counsel and Secretary(3)
|
|
|
2006
|
|
|
|
90,833
|
|
|
|
30,000
|
|
|
|
|
|
|
|
27,643
|
|
|
|
30,120
|
|
|
|
178,596
|
|
|
|
|
(1) |
|
Stock Awards and Option Awards reflect the dollar amount
recognized for financial statement reporting purposes in
accordance with SFAS 123(R). |
|
(2) |
|
All Other Compensation is solely comprised of commuting expenses
(air travel, hotel, car rental and meals) reimbursed by the
Company for executives not living in Austin. |
|
(3) |
|
The Company has employment agreements with each of the Named
Executive Officers. Under these employment agreements, base
salaries for 2007 were established at the following amounts:
Mr. Mockett $350,000,
Mr. Hanna $275,000 and Mr. Greenberg
-$225,000. In addition to base salary, each Named Executive
Officer is entitled to an annual cash bonus and a retention
bonus. The targeted annual cash bonus is equal to a percentage
of their annual salary, as follows: Mr. Mockett
100%, Mr. Hanna 65% and
Mr. Greenberg 50%. Cash bonus amounts actually
paid in calendar 2007 were determined by the Compensation
Committee in its discretion based upon achievement of certain
performance metrics. Pursuant to the Companys Key Employee
Incentive Bonus Plan, the Company has awarded retention bonuses
(Retention Bonuses) to certain key employees of the
Company, including the Executive Officers. The Retention Bonuses
are cash awards which vest in accordance with the vesting
schedules provided in each participants award agreement.
In addition, the Award Agreements for the Executive Officers
provide for a cash payment (a Change in Control Premium
Amount) with respect to any Retention Bonus that has not
yet fully vested at the time of a change in control. The Change
in Control Premium Amount for any participant is equal to the
product of the participants Change in Control Premium
(which equals the excess, if any, of the fair market value of a
share of Common Stock on the last trading day before
consummation of the change in control over the fair market value
of a share of Common Stock on the participants date of
award of the Retention Bonus) and the quotient obtained by
dividing (i) the original dollar amount of the
participants Retention Bonus by (ii) the fair market
value of a share of Common Stock on the date of the award of the
Retention Bonus. The Change in Control Premium Amount is to be
paid within 10 days following the consummation of the
change in control. The Retention Bonus targets were determined
by the Compensation Committee based on relative position within
the Company and contribution. |
Outstanding
Equity Awards
Generally, the Compensation Committee makes restricted stock
and/or stock
option grants annually to certain of the Companys
executive officers. Each grant is designed to align the
interests of the executive officer with those of the
stockholders, and to provide each individual with a significant
incentive to manage the Company from the perspective of an owner
with an equity stake in the business. Each option grant allows
the officer to acquire shares of Common Stock at a fixed price
per share (the market price on the grant date) over a specified
period of time (up to ten years). Each option generally becomes
exercisable in a series of installments over a three-year
period, contingent upon the officers continued employment
with the Company. Accordingly, the option will provide a
A-11
return to the executive officer only if he or she remains
employed by the Company during the vesting period, and then only
if the market price of the Shares appreciates over the option
term.
The size of each option
and/or
restricted stock grant is set by the Compensation Committee in
its discretion at a level that is intended to create a
meaningful opportunity for stock ownership based upon the
individuals current position with the Company, the
individuals personal performance in recent periods and his
or her potential for future responsibility and promotion over
the option term. The Compensation Committee also takes into
account the number of unvested options
and/or
restricted shares held by the executive officer in order to
maintain an appropriate level of equity incentive for that
individual. The relevant weight given to each of these factors
varies from individual to individual.
Outstanding
Equity Awards at Fiscal Year-End
The table below summarizes the outstanding equity awards at
fiscal year end for each of the Companys Named Executive
Officers for the year ended December 31, 2007.
|
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|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
Number of
|
|
Number of
|
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|
|
|
|
Shares or
|
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Market Value
|
|
|
Securities
|
|
Securities
|
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|
|
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|
Units of
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|
of Shares or
|
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|
Underlying
|
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Underlying
|
|
Option
|
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|
|
Stock that
|
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Units of Stock
|
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|
Unexercised
|
|
Unexercised
|
|
Exercise
|
|
Option
|
|
have not
|
|
that have
|
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|
Options
|
|
Options
|
|
Price
|
|
Expiration
|
|
Vested
|
|
not Vested
|
Name and Date of Grant or Award
|
|
Exercisable
|
|
Unexercisable
|
|
($)
|
|
Date
|
|
(#)
|
|
($)
|
|
Alfred T. Mockett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/20/2006(1)
|
|
|
437,500
|
|
|
|
312,500
|
|
|
|
3.40
|
|
|
|
2/19/2013
|
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|
|
|
|
|
|
|
|
9/25/2007(2)
|
|
|
33,333
|
|
|
|
166,667
|
|
|
|
1.85
|
|
|
|
9/24/2014
|
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|
|
|
|
|
|
|
|
2/20/2006(3)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,334
|
|
|
|
116,668
|
|
Richard Hanna
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/7/2006(4)
|
|
|
100,000
|
|
|
|
100,000
|
|
|
|
2.65
|
|
|
|
8/5/2013
|
|
|
|
|
|
|
|
|
|
9/25/2007(5)
|
|
|
16,666
|
|
|
|
83,334
|
|
|
|
1.85
|
|
|
|
9/24/2014
|
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|
|
|
|
|
|
|
|
Jack Greenberg
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8/7/2006(6)
|
|
|
62,500
|
|
|
|
62,500
|
|
|
|
2.65
|
|
|
|
8/6/2013
|
|
|
|
|
|
|
|
|
|
9/25/2007(7)
|
|
|
16,666
|
|
|
|
83,334
|
|
|
|
1.85
|
|
|
|
9/24/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Option was granted in February 2006 and vests quarterly over
three years. Pursuant to a Stock Option Termination Agreement
dated June 16, 2008, effective upon consummation of the
Offer, these options will be cancelled. |
|
(2) |
|
Option was granted in September 2007 and vests quarterly over
three years. |
|
(3) |
|
Restricted Stock was granted in February 2006 and vests
quarterly over three years. |
|
(4) |
|
Option was granted in August 2006 and vests quarterly over three
years. Pursuant to a Stock Option Termination Agreement dated
June 16, 2008, effective upon consummation of the Offer,
these options will be cancelled. |
|
(5) |
|
Option was granted in September 2007 and vests quarterly over
three years. |
|
(6) |
|
Option was granted in August 2006 and vests in equal amounts
quarterly over three years. Pursuant to a Stock Option
Termination Agreement dated June 16, 2008, effective upon
consummation of the Offer, these options will be cancelled. |
|
(7) |
|
Option was granted in September 2007 and vests in equal amounts
quarterly over three years. |
Retention
Bonus Program
Pursuant to the Companys Key Employee Incentive Bonus
Plan, the Company has awarded retention bonuses (Retention
Bonuses) to certain key employees of the Company,
including the NEOs. The Retention Bonuses are cash awards which
vest in accordance with the vesting schedules provided in each
participants award agreement. In addition, the Award
Agreements for the Executive Officers provide for a cash payment
(a Change in Control
A-12
Premium Amount) with respect to any Retention Bonus that
has not yet fully vested at the time of a change in control. The
Change in Control Premium Amount for any participant is equal to
the product of the participants Change in Control Premium
(which equals the excess, if any, of the fair market value of a
share of Common Stock on the last trading day before
consummation of the change in control over the fair market value
of a share of Common Stock on the participants date of
award of the Retention Bonus) and the quotient obtained by
dividing (i) the original dollar amount of the
participants Retention Bonus by (ii) the fair market
value of a share of Common Stock on the date of the award of the
Retention Bonus. The Change in Control Premium Amount is to be
paid within 10 days following the consummation of the
change in control. The vesting of a participants award
will be accelerated in connection with a change in control of
the Company if either (i) the successor entity (or a parent
or subsidiary of such successor entity) does not assume the
award or (ii) such participants employment is
terminated by the Company or successor entity, other than for
cause, within 12 months following the change in control
(except in the case where the participant is simultaneously
re-employed by the Company or an affiliate of the Company). In
order for a participant to be eligible to receive payment
pursuant to the Retention Bonus, such participant must have been
continuously employed with the Company from the date of the
award through the date of payment, except (i) where the
vesting of a participants award is accelerated due to a
termination of employment by the Company or a successor entity,
other than for cause, following a change in control, as
described above, or (ii) where the participants
employment with the Company is terminated due to death or
disability following the vesting of an award but prior to the
payment thereof. In addition, the Company, in its sole
discretion, may convert all of the unvested portion of any
Retention Bonus to a replacement restricted stock unit award on
the terms and subject to the conditions of the Key Employee
Incentive Bonus Plan.
The Company has granted Retention Bonuses pursuant to the Key
Employee Incentive Bonus Plan to the NEOs as described below:
|
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|
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|
Aggregate Amount of
|
|
Name
|
|
Retention Bonus ($)
|
|
|
Alfred T. Mockett
|
|
|
429,667
|
|
Richard Hanna
|
|
|
300,767
|
|
Jack Greenberg
|
|
|
204,500
|
|
Each of these Retention Bonuses vests in three equal
installments. The first installment vested on December 31,
2007 and was paid in January 2008. However, upon a change in
control of the Company, in certain situations (as described
above), the vesting of the Retention Bonuses will be accelerated.
Post-Employment
Benefits
The Company currently has employment agreements with all of its
NEOs that include post-employment severance and
change-in-control
benefits. The Companys NEOs are eligible for
severance benefits following the occurrence of a change in
control (as defined in each employment agreement), if their
employment is terminated or if a NEO resigns for good reason (as
defined in each employment agreement).
The following table, based on a change in control having
occurred as of June 30, 2008, shows the estimated payments
and benefits that would be provided to each Executive Officer
under his respective employment agreement following a change in
control. For Mr. Mockett the actual accrued bonus amounts
would be dependent on when in the year the change in control
occurs and such amounts are payable only upon
Mr. Mocketts termination or resignation. For
Mr. Mockett, the accrued bonus numbers below have been
calculated based on two fully completed quarters relative to the
entire year. For Messrs. Hanna and Greenberg, the accrued
bonus amount is not prorated but is for one year regardless of
when the change in control occurs. The Retention Bonus column
reflects the change in control acceleration of retention bonuses
originally to be paid in 2008 thru 2010. See Retention
Bonus Program above.
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|
|
Accrued
|
|
|
Retention
|
|
|
|
|
|
|
Severance
|
|
|
Bonus
|
|
|
Bonus(1)
|
|
|
Total
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Alfred T. Mockett(2)
|
|
|
350,000
|
|
|
|
175,000
|
|
|
|
429,667
|
|
|
|
954,667
|
|
Richard Hanna
|
|
|
137,500
|
|
|
|
165,000
|
|
|
|
300,767
|
|
|
|
603,267
|
|
Jack Greenberg
|
|
|
112,500
|
|
|
|
112,500
|
|
|
|
204,500
|
|
|
|
429,500
|
|
A-13
|
|
|
(1) |
|
Included in retention bonus for each NEO is their 2008 grant, as
follows: Mr. Mockett $170,000;
Richard Hanna $119,000 and
Mr. Greenberg $85,000. Also included is the
value of the stock price appreciation from the 2008 grant price
of $1.70 for Alfred Mockett $53,000; Richard
Hanna $37,100; and Jack Greenberg
$26,500. |
|
(2) |
|
The Company is also required to pay Mr. Mocketts
medical insurance for one year following termination of
employment. |
Upon a change in control, all of the then unvested stock options
and restricted stock then held by the Companys NEOs
would be immediately vested in full. If a change in control had
occurred on June 30, 2008, the following Shares would have
been subject to such accelerated vesting:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alfred
|
|
|
Richard
|
|
|
Jack
|
|
Restricted Stock/Options
|
|
Mockett
|
|
|
Hanna
|
|
|
Greenberg
|
|
|
Restricted Stock
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
Options by Strike Price:
|
|
|
|
|
|
|
|
|
|
|
|
|
$1.85
|
|
|
133,334
|
|
|
|
66,667
|
(1)
|
|
|
66,667
|
(1)
|
$2.65
|
|
|
|
|
|
|
66,667
|
(2)
|
|
|
41,667
|
(2)
|
$3.40
|
|
|
187,500
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Pursuant to the applicable option agreement, in the case of a
change in control, these unvested stock options will not
immediately vest unless the Executive Officers employment
is terminated as well. However, pursuant to the Merger Agreement
all unvested stock options will vest at least 15 days prior
to the Effective Time. |
|
(2) |
|
Pursuant to Stock Option Termination Agreements dated
June 16, 2008, effective upon consummation of the Offer,
these options will be cancelled. |
Upon the Companys termination of employment of any NEO
without cause, and not involving a change in control, Richard
Hanna and Jack Greenberg would be entitled to receive a cash
severance equal to the greater of the remaining term of their
respective employment agreement or six months; and Alfred
Mockett would be entitled to receive a cash severance equal to
his annual base salary. The accrued bonus numbers in the table
below would be dependent on when in the year the termination
occurs and have been calculated based on fully completed
quarters relative to the entire year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued
|
|
|
|
|
|
|
Severance
|
|
|
Bonus
|
|
|
Total
|
|
Cash Paid Out
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Alfred T. Mockett(1)
|
|
|
350,000
|
|
|
|
175,000
|
|
|
|
525,000
|
|
Richard Hanna
|
|
|
137,500
|
|
|
|
82,500
|
|
|
|
220,000
|
|
Jack Greenberg
|
|
|
112,500
|
|
|
|
56,250
|
|
|
|
168,750
|
|
|
|
|
(1) |
|
The Company is also obligated to pay Mr. Mocketts
medical insurance for one year following termination of
employment. |
Director
Compensation
Directors fees include an annual retainer for all non-employee
directors, fees for service as a board committee chair, fees for
service as lead director, and meeting attendance fees. The chart
below outlines these fees, which are only applicable to
non-employee board members.
A-14
Board of
Director Fees ($)
|
|
|
|
|
Annual Retainer:
|
|
|
25,000
|
|
Committee Chair Fees:
|
|
|
|
|
Audit Committee Chair
|
|
|
20,000
|
|
Compensation Committee Chair
|
|
|
10,000
|
|
Nominating Committee Chair
|
|
|
5,000
|
|
Lead Director Fee:
|
|
|
20,000
|
|
Meeting Attendance Fees:
|
|
|
|
|
Per Meeting Attended (Board Meetings)
|
|
|
1,500
|
|
Per Meeting Attended (Audit Committee Meetings)
|
|
|
1,250
|
|
Per Meeting Attended (All Other Committee Meetings)
|
|
|
1,000
|
|
Each non-employee director is permitted to choose whether to
receive the Annual Retainer, lead director
and/or
committee chair fees either in cash or in an amount of stock
options equivalent in value to the amount of cash that would
have been paid plus 20%. Each of the Companys non-employee
directors is also eligible to receive equity awards under the
Companys equity plans.
2007 Director
Compensation
The following table sets forth certain information concerning
the compensation earned in 2007 by the Companys
non-employee directors who served in 2007.
Director
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
Options
|
|
|
Options
|
|
|
|
Fees Earned
|
|
|
Option
|
|
|
|
|
|
Granted as
|
|
|
Granted in
|
|
|
|
or Paid in
|
|
|
Awards
|
|
|
Total
|
|
|
of 12/31/07
|
|
|
2007
|
|
Name
|
|
Cash ($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
Thomas J. Meredith
|
|
|
62,750
|
|
|
|
130,238
|
|
|
|
192,988
|
|
|
|
199,574
|
|
|
|
94,444
|
|
Michael J. Maples, Sr.
|
|
|
33,500
|
|
|
|
104,065
|
|
|
|
137,565
|
|
|
|
159,678
|
|
|
|
44,444
|
|
Virginia Gambale
|
|
|
48,500
|
|
|
|
111,482
|
|
|
|
159,982
|
|
|
|
127,136
|
|
|
|
44,444
|
|
David Sikora
|
|
|
57,250
|
|
|
|
143,460
|
|
|
|
200,710
|
|
|
|
224,801
|
|
|
|
44,444
|
|
Harvey White(2)
|
|
|
43,750
|
|
|
|
131,819
|
|
|
|
175,569
|
|
|
|
106,414
|
|
|
|
22,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
|
|
245,750
|
|
|
|
621,064
|
|
|
|
866,814
|
|
|
|
817,603
|
|
|
|
249,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts under the column heading Options Awards reflect the
dollar amount recognized for financial statement reporting
purposes for the fiscal year ended December 31, 2007, in
accordance with SFAS 123(R), of stock options, and thus
include amounts from awards both granted in and prior to 2007. |
|
(2) |
|
Harvey White resigned from the Board on October 9, 2007. |
A-15
ANNEX B
PRIVILEGED
AND
CONFIDENTIAL
June 16, 2008
Board of Directors
Motive, Inc.
12515 Research Boulevard
Building 5
Austin, TX
78759-2220
Ladies and Gentlemen:
We understand that Motive, Inc., a Delaware corporation
(Company), Lucent Technologies Inc., a Delaware
corporation (Parent), and Magic Acquisition
Subsidiary Inc., a Delaware corporation and wholly owned
subsidiary of Parent (Merger Sub), propose to enter
into an Agreement and Plan of Merger in substantially the form
presented to us on June 16, 2008 (the Merger
Agreement), pursuant to which Merger Sub will, within
thirty (30) days following the execution of the Merger
Agreement, commence a cash tender offer (the Offer)
to purchase all of the outstanding shares (the Company
Shares) of common stock, par value $0.001 per share, of
Company, at a price per share of Two Dollars and Twenty-Three
Cents ($2.23) in cash (the Offer Price). Following
the consummation of the Offer, the Merger Agreement provides
that Merger Sub will be merged with and into Company, which will
be the surviving entity and a wholly owned subsidiary of Parent
(the Merger), and each Company Share that is not
tendered and accepted pursuant to the Offer (other than shares
held by Parent, Merger Sub, Company, any subsidiary thereof or
any stockholder who demands and perfects appraisal rights) will
thereupon be cancelled and converted into the right to receive
cash in an amount equal to the Offer Price. The terms and
conditions of the Merger are set forth in more detail in the
Merger Agreement.
You have asked us for our opinion as investment bankers as to
whether the Offer Price to be received by the stockholders of
Company (other than Parent, Merger Sub, Company, any subsidiary
thereof) in the Offer and the Merger is fair to such
stockholders from a financial point of view, as of the date
hereof.
In connection with our opinion, we have, among other things:
(i) reviewed certain publicly available financial and other
data with respect to Company, including certain consolidated
financial statements and certain other relevant financial and
operating data relating to Company made available to us from
published sources and from the internal records of Company;
(ii) reviewed the financial terms and conditions of the
Merger Agreement; (iii) compared Company from a financial
point of view with certain other companies which we deemed to be
relevant; (iv) considered the financial terms, to the
extent publicly available, of selected recent business
combinations which we deemed to be comparable, in whole or in
part, to the Offer and the Merger; (v) reviewed and
discussed with representatives of the management of Company
certain information of a business and financial nature regarding
Company, furnished to us by them, including certain financial
forecasts and related assumptions of Company; (vi) made
inquiries regarding and discussed the Offer, the Merger and the
draft Merger Agreement and other matters related thereto with
Companys counsel and auditor; (vii) reviewed the
reported price and trading activity for the Company Shares; and
(viii) performed such other analyses and examinations as we
have deemed appropriate, including, without limitation,
examinations of current regulatory activities and investigations
involving Company, which we deem to be material to the
Companys business or its ability to regain its status as a
company listed on a national securities exchange.
In connection with our review, we have not assumed any
obligation independently to verify, and have not independently
verified, the foregoing information and have relied on this
information being accurate and complete
B-1
in all material respects. With respect to the financial
forecasts for Company provided to us by Companys
management, with your consent we have assumed for purposes of
our opinion that the forecasts have been reasonably prepared on
bases reflecting the best available estimates and judgments of
Companys management at the time of preparation as to the
future financial performance of Company and that they provide a
reasonable basis upon which we can form our opinion. With
respect to the financial forecasts for Company provided to us by
Companys management, for purposes of our analyses we have
adjusted such forecasts to reflect more conservative assumptions
regarding the growth of the mobility business than those made by
Companys management. We have discussed the adjusted
forecasts with Companys management and they have
acknowledged our use of such adjusted forecasts in arriving at
our opinion. We have also assumed that there has been no
material change in Companys assets, financial condition,
results of operations, business or prospects since the
respective dates of their last financial statements made
available to us. We have assumed no responsibility for, and
assume that the Company has obtained the advice of outside
counsel and independent accountants, as to all legal and
financial reporting matters with respect to Company, the Offer,
the Merger and the draft Merger Agreement, including the
(i) status and potential implications of the litigation,
regulatory activities and investigations involving Company and
(ii) impact of litigation, regulatory activities and
investigations on the (A) financial reporting of Company
and (B) periodic reports of Company filed with the
Securities and Exchange Commission, the results of which advice
we have relied on without further investigation where we deemed
it appropriate. We have assumed that the Offer and the Merger
will be consummated in a manner that complies with the
applicable provisions of the Securities Act of 1933, as amended
(the Securities Act), the Securities Exchange Act of
1934, as amended, and all other applicable federal and state
statutes, rules and regulations. In addition, we have not
assumed responsibility for making an independent evaluation,
appraisal or physical inspection of any of the assets or
liabilities (contingent or otherwise) of Company, nor have we
been furnished with any such appraisals. This opinion does not
address the consequences of, nor do we express any opinion as to
any consideration that may be received in the Merger by,
stockholders perfecting and pursuing appraisal rights as
permitted by applicable law. Finally, our opinion is based on
economic, monetary and market and other conditions as in effect
on, and the information made available to us as of, the date
hereof. Accordingly, although subsequent developments may affect
this opinion, we have not assumed any obligation to update,
revise or reaffirm this opinion.
We have further assumed with your consent that the executed
Merger Agreement will conform in all material respects to the
draft Merger Agreement reviewed by us and that the Offer and the
Merger will be consummated in accordance with the terms
described in the Merger Agreement, without any further
amendments thereto, and without waiver by Company, Parent or
Merger Sub of any of the conditions to their obligations
thereunder.
We have acted as financial advisor to Company in connection with
the Offer and the Merger and will receive a fee for our
services, including rendering this opinion, a significant
portion of which is contingent upon the consummation of the
Merger. In the ordinary course of our business, we actively
trade the equity securities of Company and Parent for our own
account and for the accounts of customers and, accordingly, may
at any time hold a long or short position in such securities. We
have performed various investment banking services for Company,
including acting as an underwriter in connection with the
Companys initial public offering in June 2004.
Based upon the foregoing and in reliance thereon, it is our
opinion as investment bankers that the Offer Price to be
received by the stockholders of Company (other than Parent,
Merger Sub, Company, any subsidiary thereof) in the Offer and
the Merger is fair to such stockholders from a financial point
of view, as of the date hereof.
This opinion has been approved by an authorized committee of
Thomas Weisel Partners LLC. It is directed to the Board of
Directors of Company in its consideration of the Offer and the
Merger and is not a recommendation to any stockholder as to
whether or not any stockholder should tender such Company Shares
in connection with the Offer or as to how such stockholder
should, if necessary, vote with respect to the Merger. Further,
this opinion addresses only the financial fairness of the Offer
Price to the stockholders and does not address the relative
merits of the Offer, the Merger and any alternatives to the
Offer and the Merger, Companys underlying decision to
proceed with or effect the Offer, the Merger, any other
transaction as compared to the Offer or the Merger, or any other
aspect of the transactions contemplated by the draft Merger
Agreement. In addition, this opinion does not address the
fairness of the Offer or the Merger to, or any consideration
received in connection therewith by, the holders of any other
class of securities, creditors or other constituencies of
Company; nor does it address the fairness, financial or
otherwise, of the amount or nature of any compensation payable
to or to be received by, or any equity issued to, any
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of Companys officers, directors or employees, or any class
of such persons, in connection with the Offer or the Merger
relative to the Offer Price. This opinion may not be used or
referred to by Company, or quoted or disclosed to any person in
any manner, without our prior written consent, which consent is
hereby given to the inclusion of this opinion in any
solicitation/recommendation statement or proxy statement of
Company filed with the Securities and Exchange Commission in
connection with Offer or the Merger. In furnishing this opinion,
we do not admit that we are experts within the meaning of the
term experts as used in the Securities Act and the
rules and regulations promulgated thereunder, nor do we admit
that this opinion constitutes a report or valuation within the
meaning of Section 11 of the Securities Act.
Very truly yours,
/s/ THOMAS
WEISEL PARTNERS LLC
THOMAS WEISEL PARTNERS LLC
B-3
ANNEX C
DGCL
Section 262: Appraisal Rights
(a) Any stockholder of a corporation of this State who
holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to
such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has
neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to § 228 of this
title shall be entitled to an appraisal by the Court of Chancery
of the fair value of the stockholders shares of stock
under the circumstances described in subsections (b) and
(c) of this section. As used in this section, the word
stockholder means a holder of record of stock in a
stock corporation and also a member of record of a nonstock
corporation; the words stock and share
mean and include what is ordinarily meant by those words and
also membership or membership interest of a member of a nonstock
corporation; and the words depository receipt mean a
receipt or other instrument issued by a depository representing
an interest in one or more shares, or fractions thereof, solely
of stock of a corporation, which stock is deposited with the
depository.
(b) Appraisal rights shall be available for the shares of
any class or series of stock of a constituent corporation in a
merger or consolidation to be effected pursuant to
§ 251 (other than a merger effected pursuant to
§ 251(g) of this title), § 252,
§ 254, § 257, § 258,
§ 263 or § 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series
of stock, which stock, or depository receipts in respect
thereof, at the record date fixed to determine the stockholders
entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national
securities exchange or (ii) held of record by more than
2,000 holders; and further provided that no appraisal rights
shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for
its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of
§ 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the
shares of any class or series of stock of a constituent
corporation if the holders thereof are required by the terms of
an agreement of merger or consolidation pursuant to
§§ 251, 252, 254, 257, 258, 263 and 264 of this
title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository
receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or
depository receipts in respect thereof) or depository receipts
at the effective date of the merger or consolidation will be
either listed on a national securities exchange or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.
and b. of this paragraph; or
d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under § 253 of
this title is not owned by the parent corporation immediately
prior to the merger, appraisal rights shall be available for the
shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be
available for the shares of any class or series of its stock as
a result of an amendment to its certificate of incorporation,
any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all
of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this
section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is
practicable.
C-1
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be
submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record
date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsection (b) or
(c) hereof that appraisal rights are available for any or
all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholders
shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for
appraisal of such stockholders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such stockholders
shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as
herein provided. Within 10 days after the effective date of
such merger or consolidation, the surviving or resulting
corporation shall notify each stockholder of each constituent
corporation who has complied with this subsection and has not
voted in favor of or consented to the merger or consolidation of
the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to
§ 228 or § 253 of this title, then either a
constituent corporation before the effective date of the merger
or consolidation or the surviving or resulting corporation
within 10 days thereafter shall notify each of the holders
of any class or series of stock of such constituent corporation
who are entitled to appraisal rights of the approval of the
merger or consolidation and that appraisal rights are available
for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy
of this section. Such notice may, and, if given on or after the
effective date of the merger or consolidation, shall, also
notify such stockholders of the effective date of the merger or
consolidation. Any stockholder entitled to appraisal rights may,
within 20 days after the date of mailing of such notice,
demand in writing from the surviving or resulting corporation
the appraisal of such holders shares. Such demand will be
sufficient if it reasonably informs the corporation of the
identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such holders shares. If
such notice did not notify stockholders of the effective date of
the merger or consolidation, either (i) each such
constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of
the holders of any class or series of stock of such constituent
corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the
surviving or resulting corporation shall send such a second
notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is
sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder
who is entitled to appraisal rights and who has demanded
appraisal of such holders shares in accordance with this
subsection. An affidavit of the secretary or assistant secretary
or of the transfer agent of the corporation that is required to
give either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated
therein. For purposes of determining the stockholders entitled
to receive either notice, each constituent corporation may fix,
in advance, a record date that shall be not more than
10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of
the merger or consolidation, the record date shall be such
effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the
close of business on the day next preceding the day on which the
notice is given.
(e) Within 120 days after the effective date of the
merger or consolidation, the surviving or resulting corporation
or any stockholder who has complied with subsections (a)
and (d) of this section hereof and who is otherwise
entitled to appraisal rights, may commence an appraisal
proceeding by filing a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within
60 days after the effective date of the merger or
consolidation, any stockholder who has not commenced an
appraisal proceeding or joined that proceeding as a named party
shall have the right to withdraw such stockholders demand
for appraisal and to accept the terms offered upon the merger or
consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied
with the requirements of subsections (a) and (d) of
this section hereof, upon written request, shall be entitled to
receive from
C-2
the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and
with respect to which demands for appraisal have been received
and the aggregate number of holders of such shares. Such written
statement shall be mailed to the stockholder within 10 days
after such stockholders written request for such a
statement is received by the surviving or resulting corporation
or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) of
this section hereof, whichever is later. Notwithstanding
subsection (a) of this section, a person who is the
beneficial owner of shares of such stock held either in a voting
trust or by a nominee on behalf of such person may, in such
persons own name, file a petition or request from the
corporation the statement described in this subsection.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or
resulting corporation, which shall within 20 days after
such service file in the office of the Register in Chancery in
which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or
resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in
Chancery, if so ordered by the Court, shall give notice of the
time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting
corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1
or more publications at least 1 week before the day of the
hearing, in a newspaper of general circulation published in the
City of Wilmington, Delaware or such publication as the Court
deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs
thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall
determine the stockholders who have complied with this section
and who have become entitled to appraisal rights. The Court may
require the stockholders who have demanded an appraisal for
their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery
for notation thereon of the pendency of the appraisal
proceedings; and if any stockholder fails to comply with such
direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After the Court determines the stockholders entitled to
an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including
any rules specifically governing appraisal proceedings. Through
such proceeding the Court shall determine the fair value of the
shares exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation,
together with interest, if any, to be paid upon the amount
determined to be the fair value. In determining such fair value,
the Court shall take into account all relevant factors. Unless
the Court in its discretion determines otherwise for good cause
shown, interest from the effective date of the merger through
the date of payment of the judgment shall be compounded
quarterly and shall accrue at 5% over the Federal Reserve
discount rate (including any surcharge) as established from time
to time during the period between the effective date of the
merger and the date of payment of the judgment. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court
may, in its discretion, proceed to trial upon the appraisal
prior to the final determination of the stockholders entitled to
an appraisal. Any stockholder whose name appears on the list
filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such
stockholders certificates of stock to the Register in
Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that such stockholder
is not entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of
the shares, together with interest, if any, by the surviving or
resulting corporation to the stockholders entitled thereto.
Payment shall be so made to each such stockholder, in the case
of holders of uncertificated stock forthwith, and the case of
holders of shares represented by certificates upon the surrender
to the corporation of the certificates representing such stock.
The Courts decree may be enforced as other decrees in the
Court of Chancery may be enforced, whether such surviving or
resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the
Court and taxed upon the parties as the Court deems equitable in
the circumstances. Upon application of a stockholder, the Court
may order all or a portion of the expenses incurred by any
stockholder in connection with the appraisal proceeding,
including, without limitation,
C-3
reasonable attorneys fees and the fees and expenses of
experts, to be charged pro rata against the value of all the
shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded appraisal rights
as provided in subsection (d) of this section shall be
entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of
record at a date which is prior to the effective date of the
merger or consolidation); provided, however, that if no petition
for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a
written withdrawal of such stockholders demand for an
appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the
merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal
proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval
may be conditioned upon such terms as the Court deems just;
provided, however that this provision shall not affect the right
of any stockholder who has not commenced an appraisal proceeding
or joined that proceeding as a named party to withdraw such
stockholders demand for appraisal and to accept the terms
offered upon the merger or consolidation within 60 days
after the effective date of the merger or consolidation, as set
forth in subsection (e) of this section.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been
converted had they assented to the merger or consolidation shall
have the status of authorized and unissued shares of the
surviving or resulting corporation.
(8 Del. C. 1953, § 262; 56 Del. Laws, c. 50; 56
Del. Laws, c. 186, § 24; 57 Del. Laws, c. 148,
§§ 27-29;
59 Del. Laws, c. 106, § 12; 60 Del. Laws, c.
371, §§ 3-12; 63 Del. Laws, c. 25,
§ 14; 63 Del. Laws, c. 152, §§ 1, 2;
64 Del. Laws, c. 112,
§§ 46-54;
66 Del. Laws, c. 136,
§§ 30-32;
66 Del. Laws, c. 352, § 9; 67 Del. Laws, c. 376,
§§ 19, 20; 68 Del. Laws, c. 337,
§§ 3, 4; 69 Del. Laws, c. 61, § 10; 69
Del. Laws, c. 262, §§ 1-9; 70 Del. Laws, c. 79,
§ 16; 70 Del. Laws, c. 186, § 1; 70 Del.
Laws, c. 299, §§ 2, 3; 70 Del. Laws, c. 349,
§ 22; 71 Del. Laws, c. 120, § 15; 71 Del.
Laws, c. 339,
§§ 49-52;
73 Del. Laws, c. 82, § 21; 76 Del. Laws, c. 145,
§§ 11-16.)
C-4
EXHIBIT INDEX
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Exhibit
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Number
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Description
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(a)(1)
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Letter to the stockholders of the Company, dated July 16, 2008.
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(a)(2)
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Offer to Purchase, dated July 16, 2008 (incorporated herein by
reference to Exhibit (a)(1)(A) of the Schedule TO filed by
Alcatel Lucent, Parent and the Purchaser on July 16, 2008).
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(a)(3)
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Form of Letter of Transmittal (incorporated herein by reference
to Exhibit (a)(2)(B) of the Schedule TO filed by Alcatel Lucent,
Parent and the Purchaser on July 16, 2008).
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(a)(4)
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Opinion of Thomas Weisel Partners, dated June 16, 2008 (included
as Annex B to this Statement).
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(a)(5)
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Joint Press Release of Alcatel Lucent and the Company, dated
June 17, 2008 (incorporated herein by reference to Exhibit 99.1
of the Companys Current Report on Form 8-K filed on June
17, 2008).
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(a)(6)
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Section 262 of the Delaware General Corporation Law (included as
Annex C to this Statement).
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(e)(1)
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Agreement and Plan of Merger, dated as of June 16, 2008, by and
among the Company, Parent and the Purchaser (incorporated herein
by reference to Exhibit 2.1 of the Current Report on Form 8-K
filed by the Company on June 17, 2008).
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(e)(2)
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Information Statement of the Company, dated July 16, 2008
(included as Annex A to this Statement).
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(e)(3)
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Exclusivity Letter, dated April 24, 2008, between the Company
and Alcatel Lucent.
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(e)(4)
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Nondisclosure Agreement, dated March 28, 2007, between the
Company and Parent.
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(e)(5)
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The Companys Key Employee Incentive Bonus Plan, effective
as of May 29, 2007 (incorporated by reference to Exhibit 10.1 of
the Companys Current Report on Form 8-K filed on May 31,
2007).
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(e)(6)
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Form of Cash Award Agreement under the Companys Key
Employee Incentive Bonus Plan (incorporated by reference to
Exhibit 10.2 of the Companys Current Report on Form 8-K
filed on May 31, 2007).
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(e)(7)
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Form of Indemnification Agreement for directors and officers
(incorporated herein by reference to Exhibit 10.5 of the
Companys registration statement on Form S-1 (File No.
333-111030) filed on December 9, 2003).
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(e)(8)
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Employment Agreement, dated February 20, 2006, between the
Company and Alfred Mockett (incorporated herein by reference to
Exhibit 10.1 of the Companys Current Report on Form 8-K
filed on February 21, 2006).
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(e)(9)
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Restricted Stock Agreement, dated February 20, 2006, between the
Company and Alfred Mockett (incorporated herein by reference to
Exhibit 10.2 of the Companys Current Report on Form 8-K
filed on February 21, 2006).
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(e)(10)
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Amendment to Restricted Stock Agreement, dated as of June 16,
2008, between the Company and Alfred Mockett (incorporated
herein by reference to Exhibit 10.2 to the Companys
Current Report on Form 8-K filed on June 17, 2008).
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(e)(11)
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Non-Qualified Stock Option Agreement, dated February 20, 2006,
between the Company and Alfred Mockett (incorporated herein
by reference to Exhibit 10.3 of the Companys Current
Report on Form 8-K filed on February 21, 2006).
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(e)(12)
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Stock Option Termination Agreement, dated as of June 16, 2008,
between the Company and Alfred Mockett (incorporated herein
by reference to Exhibit 10.3 to the Companys Current
Report on Form 8-K filed on June 17, 2008).
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(e)(13)
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Indemnification Agreement, dated February 20, 2006, between the
Company and Alfred Mockett (incorporated herein by reference to
Exhibit 10.4 of the Companys Current Report on
Form 8-K
filed on February 21, 2006).
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(e)(14)
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Employment Agreement, dated September 27, 2007, between the
Company and Richard Hanna (incorporated herein by reference to
Exhibit 10.1 of the Companys Current Report on Form 8-K
filed on October 1, 2007).
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(e)(15)
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Employment Agreement, dated September 27, 2007, between the
Company and Jack Greenberg (incorporated herein by reference to
Exhibit 10.2 of the Companys Current Report on Form 8-K
filed on October 1, 2007).
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(e)(16)
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Employment Agreement, dated September 27, 2007, between the
Company and Mike Fitzpatrick (incorporated herein by reference
to Exhibit 10.1 of the Companys Current Report on Form 8-K
filed on October 10, 2007).
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Exhibit
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Number
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Description
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(e)(17)
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Employment Agreement, dated September 18, 2003, between
Motive Communications Deutschland GmbH and Markus Remark.
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(e)(18)
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Proposed Employment Agreement, between the Company and Markus
Remark.
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(e)(19)
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Employment Agreement, dated December 7, 2007, between the
Company and Anna E. Clepper (incorporated herein by reference to
Exhibit 10.16 of the Companys Current Report on Form 8-K
filed on March 17, 2008).
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(e)(20)
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The Companys 2006 Director Compensation Plan, as
amended (incorporated herein by reference to Exhibit 10.7 of the
Companys Current Report on Form 8-K filed on March 17,
2008).
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(e)(21)
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Form of Amendment to Employment Agreements of Certain Officers
(incorporated herein by reference to Exhibit 10.1 to the
Companys Current Report on Form 8-K filed on June 17,
2008).
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(e)(22)
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Stock Option Termination Agreement, dated as of June 16, 2008,
by and among Motive, Inc., and each of Richard Hanna, Mike
Fitzpatrick, Jack Greenberg, Virginia Gambale, Mike Maples, Tom
Meredith and Dave Sikora (incorporated herein by reference to
Exhibit 10.4 to the Companys Current Report on Form 8-K
filed on June 17, 2008).
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(e)(23)
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Amended and Restated Equity Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Companys Annual Report on
Form 10-K for the year ended December 31, 2004).
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(e)(24)
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Amendment to Amended and Restated Equity Incentive Plan of
Motive, Inc. (incorporated by reference to Exhibit 10.6 of the
Companys Current Report on Form 8-K filed on February 21,
2006).
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(g)
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Not applicable.
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