|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On December 11, 2007,
NetManage, Inc., a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Rocket Software, Inc., a Delaware corporation (“Rocket”), and Eastern Software, Inc., a
Delaware corporation and wholly-owned subsidiary of Rocket (“Merger Sub”), pursuant to which Merger Sub will be merged with and into the Company (the “Merger”), with the Company continuing as the surviving entity. Pursuant to the
Merger Agreement, at the effective time of the Merger, each share of the Company’s common stock will be converted into the right to receive $7.20 cash and each outstanding option will be converted into the right to receive $7.20 cash less the
exercise price of such option.
The Board of Directors of the Company (the “Board of Directors”) unanimously approved the Merger and the Merger
Agreement at a special meeting on December 11, 2007, and directed that the Merger Agreement be submitted to the Company’s stockholders for adoption.
The transaction is expected to close in February of 2008. The proposed transaction is subject to the completion of due diligence by Rocket, which condition must be satisfied or waived by January 10, 2008, and Rocket’s ability to
obtain a satisfactory commitment from its primary lender to finance the purchase price, which condition must be satisfied or waived by Rocket on or prior to January 18, 2008. Rocket has the right to terminate the Merger Agreement if either of
these conditions is not satisfied by such dates. In addition, the proposed transaction is subject to approval of NetManage’s stockholders, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other
customary conditions to closing. Either party will also have a right to terminate the Merger Agreement if the transaction is not closed on or prior to February 28, 2008.
The Merger Agreement contains a “no-shop” provision pursuant to which the Company is restricted in its ability to solicit third party proposals, provide information to and engage in discussions with third
parties regarding a Competing Transaction (as such term is defined in the Merger Agreement). The “no-shop” restriction is subject to a “fiduciary-out” provision that allows the Company to provide information and participate in
discussions with respect to competing proposals that the Board of Directors determines in good faith, after consultation with its financial advisors and outside counsel, is superior to the terms of the Merger. The Company is obligated to provide
Rocket with notification of any Competing Offer and the Company’s intention to take any action with respect to a Competing Offer. Furthermore, the Company is obligated to provide Rocket with three business days prior written notice before
(i) a withdrawal, modification or change in the Board of Director’s approval or recommendation of the Merger, (ii) recommending the Competing Transaction to the Company’s stockholders, (iii) terminating the Merger Agreement
or (iv) publicly announcing the Board of Director’s intention to do any or all of the foregoing.
The Merger Agreement contains certain
termination rights and, upon the termination of the Merger Agreement under specified circumstances, the Company may be required to pay Rocket
a termination fee of $2.0 million in the case of termination resulting from a change in the recommendation to the Company’s stockholders by the
Company’s Board of Directors or the Company approving or recommending a Competing Transaction. In addition, the Company will be obligated to reimburse Rocket’s expenses in connection with the Merger, up to $2.0 million, under certain
circumstances if the Company’s stockholders do not approve the Merger at the stockholder meeting held for such purpose. The Merger Agreement also includes other representations, warranties and covenants that are customary for transactions of
this type.
The foregoing summary is not intended to be complete and is qualified in its entirety by the full text of the Merger Agreement. A copy of the
Merger Agreement is attached to this Current Report on Form 8-K as Exhibit 2.1.
Cautionary Statement
The Merger Agreement has been attached as an exhibit to this Current Report on Form 8-K to provide investors with information regarding its terms. Except for its status
as a legal document governing the contractual rights among the parties thereto in relation to the Merger and the other transactions contemplated thereby, the Merger Agreement is not intended to be a source of factual, business or operational
information about the Company, Rocket or their respective businesses.
The representations and warranties contained in the Merger Agreement are not
necessarily accurate or complete as made and may be subject to exceptions set forth in the disclosure schedules provided in accordance with the Merger Agreement. Such representations, warranties and covenants have been negotiated by the Company and
Rocket for the purpose of allocating contractual risk between the parties, including where the parties do not have complete knowledge of all the facts, and not for the purpose of establishing matters as facts. The representations and warranties may
also be subject to a contractual standard of materiality different from those generally applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement and any stockholder of the Company or any potential investor
should not rely on the representations, warranties and covenants therein or any descriptions thereof as characterizations of the actual state of facts or condition of the parties or any of their affiliates.
Additional Information
Important Additional Information Regarding
the Merger will be filed with the SEC
:
In connection with the proposed Merger, the Company will file a proxy statement and other documents with the
Securities and Exchange Commission (the “SEC”). INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED MERGER. A
definitive proxy statement will be sent to stockholders of the Company seeking their approval of the transaction. Investors and stockholders may obtain a free copy of the proxy statement (when available) and other documents filed by the Company with
the SEC at the SEC’s website at http://www.sec.gov. The definitive proxy statement and other relevant documents may also be obtained free of charge on the Company’s website at
www.netmanage.com
or by directing a request to
NetManage, Inc., 20883 Stevens Creek Blvd., Cupertino, California 95014, Attention: Investor Relations.
The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from
the stockholders of the Company in connection with the proposed Merger. Information about the Company and its directors and executive officers and their ownership of the Company’s common stock is set forth in the proxy statement for the
Company’s 2007 Annual Meeting of Stockholders, which was filed with the SEC on June 4, 2007. Stockholders and investors may obtain additional information regarding the interests of the Company and its directors and executive officers in
the Merger, which may be different than those of the Company’s stockholders generally, by reading the proxy statement and other relevant documents regarding the Merger, which will be filed with the SEC.
