LinkedIn Proxy

TableofContents
UNITED
STATES
SECURITIES
AND
EXCHANGE
COMMISSION
Washington,
D.C.
20549
SCHEDULE
14A
INFORMATION
Proxy
Statement
Pursuant
to
Section
14(a)
of
the
Securities
Exchange
Act
of
1934
(Amendment
No.
FiledbytheRegistrantx
FiledbyaPartyotherthantheRegistranto
Checktheappropriatebox:
x
PreliminaryProxyStatement
o
Confidential,
for
Use
of
the
Commission
Only
(as
permitted
by
Rule
14a-6(e)(2))
o
DefinitiveProxyStatement
o
DefinitiveAdditionalMaterials
o
SolicitingMaterialunder240.14a-12
LINKEDIN
CORPORATION
(NameofRegistrantasSpecifiedInItsCharter)
N/A
(NameofPerson(s)FilingProxyStatement,ifotherthantheRegistrant)
PaymentofFilingFee(Checktheappropriatebox):
o
Nofeerequired.
x
FeecomputedontablebelowperExchangeActRules14a-6(i)(1)and0-11.
(1)
Titleofeachclassofsecuritiestowhichtransactionapplies:
ClassAcommonstock,parvalue$0.0001pershare,andClassBcommonstock,parvalue$0.0001pershare,ofLinkedInCorporation(together,commonstock)
(2)
Aggregatenumberofsecuritiestowhichtransactionapplies:
AsofJune15,2016,therewereoutstanding:(1)134,714,008sharesofcommonstock;(2)1,808,100sharesofcommonstockissuableupontheexerciseofstockoptionswith
anexercisepricebelow$196.00;and(3)7,559,462sharesofcommonstockunderlyingrestrictedstockunits.
(3)
PerunitpriceorotherunderlyingvalueoftransactioncomputedpursuanttoExchangeActRule0-11(setforththeamountonwhichthefilingfeeiscalculatedandstatehow
itwasdetermined):
Themaximumaggregatevaluewasdeterminedbaseduponthesumof:(1)134,714,008sharesofcommonstockmultipliedby$196.00pershare;(2)stockoptionsto
purchase1,808,100sharesofcommonstockwithanexercisepricepersharebelow$196.00multipliedby$134.69pershare(thedifferencebetween$196.00andthe
weightedaverageexercisepriceof$61.31pershare);and(3)7,559,462sharesofcommonstockunderlyingrestrictedstockunitsmultipliedby$196.00pershare.In
accordancewithSection14(g)oftheSecuritiesExchangeActof1934,asamended,thefilingfeewasdeterminedbymultiplyingthesumcalculatedintheprecedingsentence
by0.0001007.
(4)
Proposedmaximumaggregatevalueoftransaction:
$28,129,133,109.00
(5)
Totalfeepaid:
$2,832,603.70
o
Feepaidpreviouslywithpreliminarymaterials.
o
CheckboxifanypartofthefeeisoffsetasprovidedbyExchangeActRule0-11(a)(2)andidentifythefilingforwhichtheoffsettingfeewaspaidpreviously.Identifytheprevious
filingbyregistrationstatementnumber,ortheFormorScheduleandthedateofitsfiling.
(1)
AmountPreviouslyPaid:
(2)
Form,ScheduleorRegistrationStatementNo.:
(3)
FilingParty:
(4)
DateFiled:
TableofContents
PRELIMINARY
PROXY
STATEMENTSUBJECT
TO
COMPLETION
LinkedIn
Corporation
2029
Stierlin
Court
Mountain
View,
CA
94043
[
],2016
DearLinkedInStockholder:
Youarecordiallyinvitedtoattendaspecialmeetingofstockholders,whichwerefertoasthespecialmeeting,ofLinkedInCorporationtobeheldon[
],2016,attheComputer
HistoryMuseum,1401N.ShorelineBlvd.,MountainView,CA94043,at[
],Pacifictime.
Atthespecialmeeting,youwillbeaskedtoconsiderandvoteonaproposaltoadopttheAgreementandPlanofMerger,datedasofJune11,2016,asitmaybeamendedfromtimeto
time,whichwerefertoasthemergeragreement,byandamongLinkedIn,MicrosoftCorporation,whichwerefertoasMicrosoft,andLibertyMergerSubInc.Werefertotheacquisition
ofLinkedInbyMicrosoftasthemerger.Atthespecialmeeting,youwillalsobeaskedtoconsiderandvoteonanon-binding,advisoryproposaltoapprovecompensationthatwillormay
becomepayablebyLinkedIntoitsnamedexecutiveofficersinconnectionwiththemerger.
Ifthemergeriscompleted,youwillbeentitledtoreceive$196.00incash,withoutinterestandsubjecttoanyapplicablewithholdingtaxes,foreachshareofClassAcommonstock
andClassBcommonstock,whichwerefertocollectivelyasthecommonstock,thatyouown(unlessyouhaveproperlyexercisedyourappraisalrights),whichrepresentsapremiumof
approximately49.5%overtheclosingpriceofLinkedInsClassAcommonstockonJune10,2016,thelasttradingdaypriortothepublicannouncementofthemergeragreement.
LinkedIns
Board
of
Directors,
after
considering
the
factors
more
fully
described
in
the
enclosed
proxy
statement,
has
unanimously
(1)
determined
that
the
merger
agreement,
the
merger
and
the
other
transactions
contemplated
by
the
merger
agreement,
on
and
subject
to
the
conditions
set
forth
therein,
are
fair
to,
advisable
and
in
the
best
interests
of
LinkedIn
and
its
stockholders;
and
(2)
adopted
and
approved
the
merger
agreement,
the
merger
and
the
other
transactions
contemplated
by
the
merger
agreement
in
all
respects.
LinkedIns
Board
of
Directors
unanimously
recommends
that
you
vote
(1)
FOR
the
adoption
of
the
merger
agreement;
(2)
FOR
the
adjournment
of
the
special
meeting
to
a
later
date
or
dates,
if
necessary
or
appropriate,
to
solicit
additional
proxies
if
there
are
insufficient
votes
to
adopt
the
merger
agreement
at
the
time
of
the
special
meeting;
and
(3)
FOR
the
non-binding,
advisory
proposal
to
approve
compensation
that
will
or
may
become
payable
by
LinkedIn
to
our
named
executive
officers
in
connection
with
the
merger,
which
we
refer
to
collectively
as
the
proposals.
Theenclosedproxystatementprovidesdetailedinformationaboutthespecialmeeting,themergeragreementandthemerger.AcopyofthemergeragreementisattachedasAnnexA
tothisproxystatement.
ThisproxystatementalsodescribestheactionsanddeterminationsofLinkedInsBoardofDirectorsinconnectionwithitsevaluationofthemergeragreementandthemerger.We
encourageyoutoreadthisproxystatementanditsannexes,includingthemergeragreement,carefullyandintheirentirety,astheycontainimportantinformation.
TableofContents
Whetherornotyouplantoattendthespecialmeetinginperson,pleasesign,dateandreturn,aspromptlyaspossible,theenclosedproxycardintheaccompanyingprepaidreply
envelopeorgrantyourproxyelectronicallyovertheinternetorbytelephone.Ifyouattendthespecialmeetingandvoteinpersonbyballot,yourvotewillrevokeanyproxythatyouhave
previouslysubmitted.
Ifyouholdyoursharesinstreetname,youshouldinstructyourbank,brokerorothernomineehowtovoteyoursharesinaccordancewiththevotinginstructionformthatyouwill
receivefromyourbank,brokerorothernominee.Yourbank,brokerorothernomineecannotvoteonanyoftheproposals,includingtheproposaltoadoptthemergeragreement,withoutyour
instructions.
Ifyouhaveanyquestionsorneedassistancevotingyourshares,pleasecontactourproxysolicitor:
InnisfreeM&AIncorporated
501MadisonAvenue,20thFloor
NewYork,NY10022
StockholdersMayCall:
(877)825-8621(Toll-FreeFromtheU.S.andCanada)
or
(412)232-3651(FromOtherLocations)
OnbehalfoftheBoardofDirectors,thankyouforyoursupport.
Sincerely,
ReidHoffman
A.GeorgeSkipBattle
JeffreyWeiner
Chair
of
the
Board
of
Directors
Lead
Independent
Director
Chief
Executive
Officer
Theaccompanyingproxystatementisdated[
],2016and,togetherwiththeenclosedformofproxycard,isfirstbeingmailedonorabout[
],2016.
TableofContents
PRELIMINARY
PROXY
STATEMENTSUBJECT
TO
COMPLETION
LinkedIn
Corporation
2029
Stierlin
Court
Mountain
View,
CA
94043
NOTICE
OF
SPECIAL
MEETING
OF
STOCKHOLDERS
TO
BE
HELD
ON
[
],
2016
NoticeisherebygiventhataspecialmeetingofstockholdersofLinkedInCorporation,aDelawarecorporation,referredtoasLinkedIn,willbeheldon[
],2016,attheComputer
HistoryMuseum,1401N.ShorelineBlvd.,MountainView,CA94043,at[
],Pacifictime,forthefollowingpurposes:
1.ToconsiderandvoteontheproposaltoadopttheAgreementandPlanofMerger,datedasofJune11,2016,asitmaybeamendedfromtimetotime,referredtoasthemerger
agreement,byandamongLinkedIn,MicrosoftCorporationandLibertyMergerSubInc.;
2.Toconsiderandvoteonanyproposaltoadjournthespecialmeetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotesto
adoptthemergeragreementatthetimeofthespecialmeeting;
3.Toconsiderandvoteontheproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoitsnamedexecutiveofficersin
connectionwiththemergercontemplatedbythemergeragreement;and
4.Totransactanyotherbusinessthatmayproperlycomebeforethespecialmeetingoranyadjournment,postponementorotherdelayofthespecialmeeting.
Onlystockholdersasofthecloseofbusinesson[
],2016,areentitledtonoticeofthespecialmeetingandtovoteatthespecialmeetingoranyadjournment,postponementorother
delaythereof.
LinkedIns
Board
of
Directors
unanimously
recommends
that
you
vote
(1)
FOR
the
adoption
of
the
merger
agreement;
(2)
FOR
the
adjournment
of
the
special
meeting
to
a
later
date
or
dates,
if
necessary
or
appropriate,
to
solicit
additional
proxies
if
there
are
insufficient
votes
to
adopt
the
merger
agreement
at
the
time
of
the
special
meeting;
and
(3)
FOR
the
non-binding,
advisory
proposal
to
approve
compensation
that
will
or
may
become
payable
by
LinkedIn
to
its
named
executive
officers
in
connection
with
the
merger,
which
we
refer
to
collectively
as
the
proposals.
LinkedInstockholderswhodonotvoteinfavoroftheproposaltoadoptthemergeragreementwillhavetherighttoseekappraisalofthefairvalueoftheirsharesofcommonstock,as
determinedinaccordancewithSection262oftheGeneralCorporationLawoftheStateofDelaware,whichwerefertoastheDGCL.iftheydeliverademandforappraisalbeforethevoteis
takenonthemergeragreementandcomplywithalloftherequirementsofDelawarelaw,includingSection262oftheDGCL,whicharesummarizedintheaccompanyingproxystatement.
Section262oftheDGCLisreproducedinitsentiretyinAnnexCtotheaccompanyingproxystatementandisincorporatedthereinbyreference.
Whetherornotyouplantoattendthespecialmeetinginperson,pleasesign,dateandreturn,aspromptlyaspossible,theenclosedproxycardintheaccompanyingprepaidreply
envelopeorgrantyourproxyelectronicallyovertheinternetorbytelephone.Ifyouattendthespecialmeetingandvoteinpersonbyballot,yourvotewillrevokeanyproxythatyouhave
previouslysubmitted.Ifyouholdyoursharesinstreetname,youshouldinstructyourbank,brokerorothernomineehowtovoteyoursharesinaccordancewiththevotinginstructionform
thatyouwillreceivefromyourbank,brokerorothernominee.Yourbank,brokerorothernomineecannotvoteonanyoftheproposals,includingtheproposaltoadoptthemergeragreement,
withoutyourinstructions.
ByOrderoftheBoardofDirectors,
Dated:[
],2016
MichaelJ.Callahan
Senior
Vice
President,
General
Counsel
&
Secretary
TableofContents
IMPORTANT
INFORMATION
Whether
or
not
you
plan
to
attend
the
special
meeting
in
person,
we
encourage
you
to
submit
your
proxy
as
promptly
as
possible
(1)
over
the
internet;
(2)
by
telephone;
or
(3)
by
signing
and
dating
the
enclosed
proxy
card
and
returning
it
in
the
accompanying
prepaid
reply
envelope.
Youmayrevokeyourproxyorchangeyourvoteatanytimebeforeitis
votedatthespecialmeeting.
instructions.
Ifyouareastockholderofrecord,votinginpersonbyballotatthespecialmeetingwillrevokeanyproxythatyoupreviouslysubmitted.Ifyouholdyoursharesthroughabank,broker
orothernominee,youmustobtainalegalproxyfromthebank,brokerorothernomineethatholdsyoursharesinordertovoteinpersonatthespecialmeeting.
Weencourageyoutoreadtheaccompanyingproxystatementanditsannexes,includingalldocumentsincorporatedbyreferenceintotheaccompanyingproxystatement,carefullyand
intheirentirety.Ifyouhaveanyquestionsconcerningthemerger,thespecialmeetingortheaccompanyingproxystatement,wouldlikeadditionalcopiesoftheaccompanyingproxystatement,
orneedhelpvotingyoursharesofcommonstock,pleasecontactourproxysolicitor:
NewYork,NY10022
or
TableofContents
TABLE
OF
CONT
ENTS
Page
SUMMARY
PartiesInvolvedintheMerger
EffectoftheMerger
EffectonLinkedIniftheMergerisNotCompleted
MergerConsideration
TheSpecialMeeting
RecommendationoftheLinkedInBoardandReasonsfortheMerger
FairnessOpinionofQatalystPartners
TreatmentofEquityAwardsintheMerger
EmployeeBenefits
InterestsofLinkedInsDirectorsandExecutiveOfficersintheMerger
AppraisalRights
MaterialU.S.FederalIncomeTaxConsequencesoftheMerger
RegulatoryApprovalsRequiredfortheMerger
NoSolicitationofOtherOffers
ChangeintheLinkedInBoardsRecommendation
ConditionstotheClosingoftheMerger
TerminationoftheMergerAgreement
TerminationFee
QUESTIONSANDANSWERS
FORWARD-LOOKINGSTATEMENTS
THESPECIALMEETING
Date,TimeandPlace
PurposeoftheSpecialMeeting
RecordDate;SharesEntitledtoVote;Quorum
VoteRequired;AbstentionsandBrokerNon-Votes
SharesHeldbyLinkedInsDirectorsandExecutiveOfficers
VotingofProxies
RevocabilityofProxies
TheLinkedInBoardsRecommendation
Adjournment
SolicitationofProxies
AnticipatedDateofCompletionoftheMerger
AppraisalRights
OtherMatters
ImportantNoticeRegardingtheAvailabilityofProxyMaterialsfortheStockholderMeetingtobeHeldon[
],2016
HouseholdingofSpecialMeetingMaterials
QuestionsandAdditionalInformation
THEMERGER
PartiesInvolvedintheMerger
EffectoftheMerger
EffectonLinkedIniftheMergerisNotCompleted
MergerConsideration
BackgroundoftheMerger
RecommendationoftheLinkedInBoardandReasonsfortheMerger
FairnessOpinionofQatalystPartners
1
1
2
2
2
2
4
4
5
6
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8
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10
11
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TableofContents
TABLE
OF
CONTENTS
(Continued)
FinancialForecasts
InterestsofLinkedInsDirectorsandExecutiveOfficersintheMerger
ClosingandEffectiveTimeoftheMerger
AppraisalRights
AccountingTreatment
MaterialU.S.FederalIncomeTaxConsequencesoftheMerger
RegulatoryApprovalsRequiredfortheMerger
PROPOSAL1:ADOPTIONOFTHEMERGERAGREEMENT
PROPOSAL2:ADJOURNMENTOFTHESPECIALMEETING
PROPOSAL3:ADVISORY,NON-BINDINGVOTETOAPPROVECERTAINMERGER-RELATEDEXECUTIVECOMPENSATIONARRANGEMENTS
THEMERGERAGREEMENT
ClosingandEffectiveTimeoftheMerger
EffectsoftheMerger;CertificateofIncorporation;Bylaws;DirectorsandOfficers
ConversionofShares
ExchangeandPaymentProcedures
RepresentationsandWarranties
ConductofBusinessPendingtheMerger
NoSolicitationofOtherOffers
TheLinkedInBoardsRecommendation;CompanyBoardRecommendationChange
StockholderMeeting
EmployeeBenefits
EffortstoClosetheMerger
IndemnificationandInsurance
TransactionLitigation
ConditionstotheClosingoftheMerger
TerminationoftheMergerAgreement
TerminationFee
SpecificPerformance
FeesandExpenses
Amendment
GoverningLaw;Venue
MARKETPRICESANDDIVIDENDDATA
SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT
FUTURESTOCKHOLDERPROPOSALS
WHEREYOUCANFINDMOREINFORMATION
MISCELLANEOUS
ANNEXES
AnnexAAgreementandPlanofMerger
AnnexBOpinionofQatalystPartners
AnnexCSection262oftheGeneralCorporationLawoftheStateofDelaware
ii
Page
55
58
72
73
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TableofContents
SUMMARY
This
summary
highlights
selected
information
from
this
proxy
statement
related
to
the
merger
of
Liberty
Merger
Sub
Inc.
(a
wholly
owned
subsidiary
of
Microsoft
Corporation)
with
and
into
LinkedIn
Corporation,
which
we
refer
to
as
the
merger,
and
may
not
contain
all
of
the
information
that
is
important
to
you.
To
understand
the
merger
more
fully
and
for
a
more
complete
description
of
the
legal
terms
of
the
merger,
you
should
carefully
read
this
entire
proxy
statement,
the
annexes
to
this
proxy
statement
and
the
documents
that
we
refer
to
in
this
proxy
statement.
You
may
obtain
the
documents
we
file
with
the
Securities
and
Exchange
Commission,
which
we
refer
to
as
the
SEC,
without
charge
by
following
the
instructions
in
the
section
of
this
proxy
statement
captioned
Where
You
Can
Find
More
Information.
The
merger
agreement
is
attached
as
Annex
A
to
this
proxy
statement.
We
encourage
you
to
read
the
merger
agreement,
which
is
the
legal
document
that
governs
the
merger,
carefully
and
in
its
entirety.
Except
as
otherwise
specifically
noted
in
this
proxy
statement,
LinkedIn,
we,
our,
us
and
similar
words
refer
to
LinkedIn
Corporation,
including,
in
certain
cases,
our
subsidiaries.
Throughout
this
proxy
statement,
we
refer
to
Microsoft
Corporation
as
Microsoft
and
Liberty
Merger
Sub
Inc.
as
Merger
Sub.
In
addition,
throughout
this
proxy
statement
we
refer
to
the
Agreement
and
Plan
of
Merger,
dated
as
of
June
11,
2016,
as
it
may
be
amended
from
time
to
time,
by
and
among
LinkedIn,
Microsoft
and
Merger
Sub
as
the
merger
agreement.
Parties
Involved
in
the
Merger
LinkedIn Corporation
LinkedInistheworldslargestprofessionalnetworkontheinternetwithover433millionmembersinover200countriesandterritoriesasofthedateofthisproxystatement.
Membersuseourplatformtostayconnectedandinformed,advancetheircareerandworksmarter.
LinkedInsClassAcommonstockislistedontheNewYorkStockExchange,whichwerefertoastheNYSE,underthesymbolLNKD.LinkedInsprincipalexecutiveoffices
arelocatedat2029StierlinCourt,MountainView,CA94043,anditstelephonenumberis(650)687-3600.
Microsoft Corporation
Microsoftisatechnologycompanywhosemissionistoempowereverypersonandeveryorganizationontheplanettoachievemore.Itsstrategyistobuildbest-in-classplatforms
andproductivityservicesforamobile-first,cloud-firstworld.Foundedin1975,Microsoftoperatesworldwideandhasofficesinmorethan100countries.Microsoftdevelops,licenses,and
supportsawiderangeofsoftwareproducts,services,anddevicesthatdelivernewopportunities,greaterconvenience,andenhancedvaluetopeopleslives.Microsoftoffersanarrayof
services,includingcloud-basedservices,toconsumersandbusinesses.Microsoftdesigns,manufactures,andsellsdevicesthatintegratewithitscloud-basedservices,andMicrosoftdelivers
relevantonlineadvertisingtoaglobalaudience.
MicrosoftscommonstockislistedontheNASDAQStockMarket,whichwerefertoasNasdaq,underthesymbolMSFT.Microsoftsprincipalexecutiveofficesarelocatedat
OneMicrosoftWay,Redmond,WA98052,anditstelephonenumberis(425)882-8080.
Liberty Merger Sub Inc.
MergerSubisawhollyowneddirectsubsidiaryofMicrosoftandwasformedonJune10,2016,solelyforthepurposeofengaginginthetransactionscontemplatedbythemerger
agreementandhasnotengagedinanybusinessactivitiesotherthaninconnectionwiththetransactionscontemplatedbythemergeragreement.MergerSubsprincipalexecutiveofficesare
locatedatOneMicrosoftWay,Redmond,WA98052anditstelephonenumberis(425)882-8080.
TableofContents
Effect
of
the
Merger
Uponthetermsandsubjecttotheconditionsofthemergeragreement,MergerSubwillmergewithandintoLinkedIn,withLinkedIncontinuingasthesurvivingcorporationandasa
whollyownedsubsidiaryofMicrosoft.Throughoutthisproxystatement,weusethetermsurvivingcorporationtorefertoLinkedInasthesurvivingcorporationfollowingthemerger.Asa
resultofthemerger,LinkedInwillceasetobeapubliclytradedcompany.Ifthemergeriscompleted,youwillnotownanysharesofthecapitalstockofthesurvivingcorporation.
Thetimeatwhichthemergerbecomeseffective,whichwerefertoastheeffectivetimeofthemerger,willoccuruponthefilingofacertificateofmergerwithandacceptanceof
suchcertificatebytheSecretaryofStateoftheStateofDelaware(oratsuchlatertimeasLinkedIn,MicrosoftandMergerSubmayagreeandspecifyinsuchcertificateofmerger).
Effect
on
LinkedIn
if
the
Merger
is
Not
Completed
IfthemergeragreementisnotadoptedbyLinkedInstockholdersorifthemergerisnotcompletedforanyotherreason,LinkedInstockholderswillnotreceiveanypaymentfortheir
sharesofClassAcommonstockandClassBcommonstock,whichwerefertocollectivelyasthecommonstock.Instead,LinkedInwillremainanindependentpubliccompany,our
ClassAcommonstockwillcontinuetobelistedandtradedontheNYSEandregisteredundertheSecuritiesExchangeActof1934,asamended,whichwerefertoastheExchangeAct,and
wewillcontinuetofileperiodicreportswiththeSEC.Underspecifiedcircumstances,LinkedInwillberequiredtopayMicrosoftaterminationfeeupontheterminationofthemerger
agreement.Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerAgreementTerminationFee.
Merger
Consideration
Inthemerger,eachoutstandingshareofcommonstock(otherthansharesheldby(1)LinkedInastreasurystock;(2)Microsoft,MergerSubortheirrespectivesubsidiaries;and
(3)LinkedInstockholderswhohaveproperlyandvalidlyexercisedandperfectedtheirappraisalrightsunderDelawarelawwithrespecttosuchshares)willbecancelledandconvertedinto
therighttoreceive$196.00incash,withoutinterestandlessanyapplicablewithholdingtaxes,whichamountwerefertoasthepersharemergerconsideration.Atorpromptlyfollowing
theeffectivetimeofthemerger,Microsoftwilldepositsufficientfundstopaytheaggregatepersharemergerconsiderationwithadesignatedpayingagent.Onceastockholderhasprovided
thepayingagentwithhis,heroritsstockcertificates(orcustomaryagentsmessagewithrespecttobook-entryshares),letteroftransmittalandtheotheritemsspecifiedbythepayingagent,
thepayingagentwillpromptlypaythestockholderthepersharemergerconsideration.Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerAgreement
ExchangeandPaymentProcedures.
Afterthemergeriscompleted,youwillhavetherighttoreceivethepersharemergerconsideration,butyouwillnolongerhaveanyrightsasastockholder(exceptthatLinkedIn
stockholderswhoproperlyandvalidlyexerciseandperfect,anddonotvalidlywithdraworsubsequentlylose,theirappraisalrightswillhavetherighttoreceiveapaymentforthefairvalue
oftheirsharesasdeterminedpursuanttoanappraisalproceedingascontemplatedbyDelawarelaw,asdescribedbelowunderthesectionofthisproxystatementcaptionedTheMerger
AppraisalRights).
The
Special
Meeting
Date, Time and Place
Aspecialmeetingofstockholderswillbeheldon[
],2016,attheComputerHistoryMuseum,1401N.ShorelineBlvd.,MountainView,CA94043,at[
],Pacifictime.Werefer
tothespecialmeeting,andanyadjournment,postponementorotherdelayofthespecialmeeting,asthespecialmeeting.
TableofContents
Purpose
Atthespecialmeeting,wewillaskstockholderstovoteonproposalsto(1)adoptthemergeragreement;(2)adjournthespecialmeetingtoalaterdateordatestosolicitadditional
proxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting;and(3)approve,bynon-binding,advisoryvote,compensationthatwillormaybecome
payablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Record Date; Shares Entitled to Vote
Youareentitledtovoteatthespecialmeetingifyouownedsharesofcommonstockatthecloseofbusinesson[
],2016,whichwerefertoastherecorddate.Youwillhaveone
voteatthespecialmeetingforeachshareofClassAcommonstockthatyouownedasofthecloseofbusinessontherecorddate,andyouwillhave10votesatthespecialmeetingforeach
shareofClassBcommonstockthatyouownedasofthecloseofbusinessontherecorddate.TheClassAcommonstockandClassBcommonstockarevotingasasingleclassonthe
proposalstobeconsideredatthespecialmeeting.
Quorum
Asoftherecorddate,therewere[
]sharesofClassAcommonstockand[
]sharesofClassBcommonstockoutstandingandentitledtovoteatthespecialmeeting.Thepresence
inpersonorbyproxyoftheholdersofamajorityoftheaggregatevotingpowerofalloutstandingsharesofcommonstockentitledtovoteatthespecialmeetingwillconstituteaquorumat
thespecialmeeting.
Required Vote
Approvaloftheproposaltoadoptthemergeragreementrequirestheaffirmativevoteoftheholdersofamajorityofthevotingpoweroftheoutstandingsharesofcommonstock
entitledtovoteontheproposal.Approvaloftheproposaltoadjournthespecialmeeting,whetherornotaquorumispresent,requirestheaffirmativevoteofamajorityofthevotingpowerof
thesharespresentinpersonorrepresentedbyproxyatthespecialmeetingandentitledtovoteontheproposal.Approval,bynon-binding,advisoryvote,ofcompensationthatwillormay
becomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemergerrequirestheaffirmativevoteofamajorityofthevotingpowerofthesharespresentinpersonor
representedbyproxyatthespecialmeetingandentitledtovoteontheproposal.
Share Ownership of Our Directors and Executive Officers
Asoftherecorddate,ourdirectorsandexecutiveofficersbeneficiallyownedandwereentitledtovote,intheaggregate,[
]sharesofcommonstock,representingapproximately[
]%ofthesharesofcommonstock,andapproximately[
]%ofthetotalvotingpowerofthesharesofcommonstock,outstandingontherecorddate.Ourco-founderandChairoftheBoard
ofDirectors,ReidHoffman,beneficiallyownedandwasentitledtovote,intheaggregate,[
]sharesofClassBcommonstock,representingapproximately[
]%ofthesharesofcommon
stock,andapproximately[
]%ofthetotalvotingpowerofthesharesofcommonstock,outstandingontherecorddate.Ourdirectorsandexecutiveofficershaveinformedusthatthey
intendtovotealloftheirsharesofcommonstock(1)
FOR
theadoptionofthemergeragreement;(2)
FOR
theadjournmentofthespecialmeetingtoalaterdateordates,ifnecessary
orappropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting;and(3)
FOR
thenon-binding,advisoryproposal
toapprovecompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Voting and Proxies
Anystockholderofrecordentitledtovotemaysubmitaproxybyreturningasignedanddatedproxycardintheaccompanyingprepaidreplyenvelopeorgrantingaproxy
electronicallyovertheinternetorbytelephone.Astockholderofrecordmayalsovoteinpersonbyappearingatthespecialmeetingandvotingbyballot.Ifyouareabeneficialowner
TableofContents
andholdyoursharesofcommonstockinstreetnamethroughabank,brokerorothernominee,youshouldinstructyourbank,brokerorothernomineeonhowyouwishtovoteyourshares
ofcommonstockusingtheinstructionsprovidedbyyourbank,brokerorothernominee.Underapplicablestockexchangerules,banks,brokersorothernomineeshavethediscretiontovote
onroutinematters.The
proposals
to
be
considered
at
the
special
meeting
are
non-routine
matters,
and
banks,
brokers
and
other
nominees
cannot
vote
on
these
proposals
without
your
instructions.
Therefore,
it
is
important
that
you
cast
your
vote
or
instruct
your
bank,
broker
or
nominee
on
how
you
wish
to
vote
your
shares.
Ifyouareastockholderofrecord,youmaychangeyourvoteorrevokeyourproxyatanytimebeforeitisvotedatthespecialmeetingby(1)signinganotherproxycardwithalater
dateandreturningitpriortothespecialmeeting;(2)submittinganewproxyelectronicallyovertheinternetorbytelephoneafterthedateoftheearliersubmittedproxy;(3)deliveringa
writtennoticeofrevocationtoourCorporateSecretary;or(4)attendingthespecialmeetingandvotinginpersonbyballot.
Ifyouholdyoursharesofcommonstockinstreetname,youshouldcontactyourbank,brokerorothernomineeforinstructionsregardinghowtochangeyourvote.Youmayalso
voteinpersonbyballotatthespecialmeetingifyouobtainalegalproxyfromyourbank,brokerorothernomineegivingyoutherighttovoteyoursharesatthespecialmeeting.
Recommendation
of
the
LinkedIn
Board
of
Directors
and
Reasons
for
the
Merger
LinkedInsBoardofDirectors,whichwerefertoastheLinkedInBoard,afterconsideringvariousfactorsdescribedinthesectionofthisproxystatementcaptionedTheMerger
RecommendationoftheLinkedInBoardandReasonsfortheMerger,hasunanimously(1)determinedthatthemergeragreement,themergerandtheothertransactionscontemplatedbythe
mergeragreementarefairto,advisableandinthebestinterestsofLinkedInanditsstockholders;and(2)adoptedandapprovedthemergeragreement,themergerandtheothertransactions
contemplatedbythemergeragreement.TheLinkedInBoardunanimouslyrecommendsthatyouvote(1)
FOR
FOR
theadjournmentofthe
specialmeetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting;
and(3)
FOR
theproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththe
merger.
Fairness
Opinion
of
Qatalyst
Partners
Inconnectionwithourconsiderationofstrategicalternatives,weengagedQatalystPartnersLP,whichwerefertoasQatalystPartners,toprovidefinancialadvicebasedon
QatalystPartnersqualifications,expertise,reputationandknowledgeofourbusinessandtheindustryinwhichweoperate.AtthemeetingoftheLinkedInBoardonJune11,2016,Qatalyst
Partnersrendereditsoralopinion,subsequentlyconfirmedinwriting,thatasofJune11,2016,andbaseduponandsubjecttothevariousassumptions,considerations,limitationsandother
matterssetforthinthewrittenopinion,the$196.00persharemergerconsiderationtobereceivedbytheholdersofourClassAcommonstockpursuanttothemergeragreement,otherthan
MicrosoftoranyaffiliatesofMicrosoft,intheircapacityasholdersofourClassAcommonstock,whichwerefertoastheClassAholders,wasfair,fromafinancialpointofview,tosuch
holders.
The
full
text
of
the
written
opinion
of
Qatalyst
Partners
to
the
LinkedIn
Board,
dated
June
11,
2016,
is
attached
to
this
proxy
statement
as
Annex
B
and
is
incorporated
into
this
proxy
statement
by
reference.
The
opinion
sets
forth,
among
other
things,
the
assumptions
made,
procedures
followed,
matters
considered
and
limitations
and
qualifications
of
the
review
undertaken
by
Qatalyst
Partners
in
rendering
its
opinion.
You
should
read
the
opinion
carefully
in
its
entirety.
Qatalyst
Partners
opinion
was
provided
to
the
LinkedIn
Board
and
addressed
only,
as
of
the
date
of
the
opinion,
the
fairness
from
a
financial
point
of
view
of
the
$196.00
per
share
merger
consideration
to
be
received
by
the
holders
of
our
Class
A
common
stock,
other
than
Microsoft
or
any
affiliates
of
Microsoft,
pursuant
to
the
merger
agreement,
in
their
capacity
as
Class
A
holders.
It
does
not
address
any
other
aspect
of
the
merger
and
does
not
constitute
a
recommendation
as
to
how
any
of
our
stockholders
should
vote
with
respect
to
the
merger
or
any
other
matter
and
does
not
in
any
manner
address
the
prices
at
which
our
Class
A
common
stock
will
trade
at
any
time.
TableofContents
For
a
more
complete
description,
see
the
section
of
this
proxy
statement
captioned
The
MergerFairness
Opinion
of
Qatalyst
Partners.
Treatment
of
Equity
Awards
in
the
Merger
ThemergeragreementprovidesthatLinkedInsequityawardsthatareoutstandingimmediatelypriortotheeffectivetimeofthemergerwillbetreatedasfollowsinthemerger:
Company Options
EachoutstandingoptiontopurchasesharesofLinkedIncommonstockgrantedpursuanttoanyLinkedInstockplan(includingawardsassumedinpriortransactions),whichwerefer
toascompanyoptions,outstandingasofimmediatelypriortotheeffectivetimeofthemergerandthatisthenvested,orwillvestasaresultofthemerger,whichwerefertotogetheras
surrenderedcompanyoptions,will,asoftheeffectivetimeofthemerger,becancelledandconvertedintotherighttoreceivethepersharemergerconsiderationof$196.00foreachshareof
LinkedIncommonstockthatwouldhavebeenissuableuponexerciseofsuchsurrenderedcompanyoptionpriortotheeffectivetimeofthemergerlesstheapplicableexercisepriceforeach
suchshareofLinkedIncommonstockundersuchsurrenderedcompanyoptionandlessanyapplicablewithholdingtaxes.Ifthepershareexercisepriceofanysurrenderedcompanyoptionis
equaltoorgreaterthan$196.00,suchsurrenderedcompanyoptionwillbecancelledasoftheeffectivetimeofthemergerfornopaymentandwillhavenofurthereffect.
Eachcompanyoptionthatisoutstandingasofimmediatelypriortotheeffectivetimeofthemerger,hasanexercisepricepersharethatislessthan$196.00andisnotasurrendered
companyoption,whichwerefertotogetherasanassumedcompanyoption,will,asoftheeffectivetimeofthemerger,be,asdeterminedbyMicrosoft,(1)assumedbyMicrosoftand
convertedintoanoptiontoacquire;or(2)convertedintoanoptiongrantedpursuanttoMicrosofts2001StockPlan,asamendedandrestated,whichwerefertoastheMicrosoftstockplan,
toacquire,ineachcase,onthesamematerialtermsandconditionsaswereapplicabletosuchassumedcompanyoptionimmediatelypriortotheeffectivetimeofthemerger,anumberof
sharesofMicrosoftcommonstockequaltotheproduct(roundeddowntothenearestwholeshare)of(1)thenumberofsharesofLinkedIncommonstocksubjecttosuchassumedcompany
optionasofimmediatelypriortotheeffectivetimeofthemergermultipliedby(2)thestockawardexchangeratio(asdescribedinmoredetailunderthesectionofthisproxystatement
captionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMerger).Thepershareexercisepriceforassumedcompanyoptionswillequalthequotient(rounded
uptothenearestwholecent)determinedbydividing(1)thepershareexercisepricefortheLinkedIncommonstocksubjecttosuchassumedcompanyoptionasofimmediatelypriortothe
effectivetimeofthemergerby(2)thestockawardexchangeratio.Eachcompanyoptionthatisoutstandingasofimmediatelypriortotheeffectivetimeofthemerger,hasanexerciseprice
persharethatisequaltoorgreaterthan$196.00,andisnotasurrenderedcompanyoptionwillbecancelledasoftheeffectivetimeofthemergerfornopaymentandwillhavenofurther
effect.
Priortotheclosingdateofthemerger,Microsoftmayelecttotreatsomeorallcompanyoptionsthatwouldotherwisebeassumedcompanyoptionsasvestedsurrenderedcompany
options,whichwillbecomefullyvestedandthencancelledandtreatedasasurrenderedcompanyoption.
Company Stock-Based Awards
EachrighttoreceiveorretainsharesofLinkedIncommonstockorreceiveacashpaymentequivalentgrantedpursuanttoanyLinkedInstockplan(includingawardsassumedin
priortransactions),otherthanacompanyoption,includingrestrictedstockandrestrictedstockunitawards,whichwerefertoascompanystock-basedawards,outstandingasof
immediatelypriortotheeffectivetimeofthemergerthatarevestedasofimmediatelypriortotheeffectivetimeofthemerger,orwillvestasaresultofthemerger,whichwerefertoas
surrenderedcompanystock-basedawards,will,asoftheeffectivetimeofthemerger,becancelledandconvertedintotherighttoreceivethepersharemergerconsiderationof$196.00with
respecttoeachshareofLinkedIncommonstocksubjecttothesurrenderedcompany-stockbasedaward,lessanyapplicablewithholdingtaxes.
TableofContents
Eachcompanystock-basedawardthatisoutstandingasofimmediatelypriortotheeffectivetimeofthemergerandisnotasurrenderedcompanystock-basedaward,whichwerefer
totogetherasanassumedcompanystock-basedaward,will,asoftheeffectivetimeofthemerger,be,asdeterminedbyMicrosoft,(1)assumedbyMicrosoftandconvertedintoastockbasedaward;or(2)convertedintoastock-basedawardgrantedpursuanttotheMicrosoftstockplan,ineachcase,withthesamematerialtermsandconditionsaswereapplicabletosuch
assumedcompanystock-basedawardimmediatelypriortotheeffectivetimeofthemerger,inrespectofanumberofsharesofMicrosoftcommonstockequaltotheproduct(roundeddownto
thenearestwholeshare)of(1)thenumberofsharesofLinkedIncommonstocksubjecttosuchassumedcompanystock-basedawardasofimmediatelypriortotheeffectivetimeofthe
mergermultipliedby(2)thestockawardexchangeratio.
Priortotheclosingdateofthemerger,Microsoftmayelecttotreatsomeorallcompanystock-basedawardsthatwouldotherwisebeassumedcompanystock-basedawardsasvested
surrenderedcompanystock-basedawards,whichwillbecomefullyvestedandthencancelledandtreatedasasurrenderedcompanystock-basedaward.
Employee Stock Purchase Plan
LinkedInsexecutiveofficerswilldetermineadatethatisnolaterthanonebusinessdaypriortothedateonwhichtheeffectivetimeofthemergeroccursasthefinalexercisedate
forpurposesofLinkedIns2011EmployeeStockPurchasePlan,whichwerefertoastheESPP.Onsuchexercisedate,LinkedInwillapplythefundscreditedasofsuchdatepursuantto
theESPPwithineachparticipantspayrollwithholdingaccounttothepurchaseofwholesharesofLinkedIncommonstockinaccordancewiththetermsoftheESPP.Subjecttothe
consummationofthemerger,theESPPwillterminateimmediatelypriortoandeffectiveasoftheeffectivetimeofthemerger.
Pursuanttothetermsofthemergeragreement,theLinkedInBoardhasadoptedresolutionsprovidingthateachindividualparticipatingintheESPPnowwillnotbepermittedto
increasehisorherpayrollcontributionratepursuanttotheESPPfromtherateineffectwhenthatofferingperiodcommenced,andthateachindividualparticipatingintheESPPnoworinany
futureofferingperiodwillnotbepermittedtomakeseparatenon-payrollcontributionstotheESPPonorfollowingthedateofthemergeragreement,exceptasmayberequiredbyapplicable
law.Priortotheeffectivetimeofthemerger,LinkedInwilltakeallactionsthatmaybenecessaryto,effectiveupontheconsummationofthemerger,(1)causeanyofferingperiodthatwould
otherwisebeoutstandingattheeffectivetimeofthemergertobeterminatednolaterthanonebusinessdaypriortothedateonwhichtheeffectivetimeofthemergeroccurs;(2)makeanypro
rataadjustmentsthatmaybenecessarytoreflecttheshortenedofferingperiodwhiletreatingtheshortenedofferingperiodasafullyeffectiveandcompletedofferingperiodforallpurposesof
theESPP;(3)causetheexercise(asofnolaterthanonebusinessdaypriortothedateonwhichtheeffectivetimeofthemergeroccurs)ofeachoutstandingpurchaserightpursuanttothe
ESPP;and(4)providethatnofurtherofferingperiodorpurchaseperiodwillcommencepursuanttotheESPPaftertheeffectivetimeofthemerger.
Employee
Benefits
Fromandaftertheeffectivetimeofthemerger,thesurvivingcorporationwill(andMicrosoftwillcausethesurvivingcorporationto)honorallofLinkedInsbenefitplansand
compensationandseverancearrangementsinaccordancewiththeirtermsasineffectimmediatelypriortotheeffectivetimeofthemerger.Thesurvivingcorporationwill(andMicrosoftwill
causethesurvivingcorporationoroneofitssubsidiariesto)continuetheemploymentofallemployeesofLinkedInanditssubsidiariesasoftheeffectivetimeofthemergerbytakingsuch
actions,ifany,asarerequiredbyapplicablelaw.Foraperiodofoneyearfollowingtheeffectivetimeofthemerger,thesurvivingcorporationanditssubsidiarieswill(andMicrosoftwill
causethesurvivingcorporationanditssubsidiariesto)providecontinuingemployeeswithcompensation,benefits,andseverancepaymentsandbenefits(otherthanequity-based
compensationandindividualemploymentagreements,exceptasprovidedinthefirstsentenceofthisparagraph)atlevelsthat,takenasawhole,arenolessfavorableintheaggregatethanthe
compensation,benefits,andseverancepaymentsandbenefits(otherthanequity-basedcompensationandindividualemploymentagreements)providedtocontinuingemployeesimmediately
priortotheeffectivetimeofthemerger,eitherthrough(1)LinkedInsbenefitplansandarrangementsinexistenceimmediatelypriortotheeffectivetimeofthemerger,(2)comparableplans,
orsomecombinationof(1)and(2).Ineachcase,basecompensationandtargetincentivecompensationopportunitywillnotbedecreasedforaperiodofoneyear
TableofContents
followingtheeffectivetimeofthemergerforanycontinuingemployeeemployedduringthatperiodexceptintheordinarycourseofbusinessconsistentwithLinkedInspastpractice.
Additionally,forcontinuingemployeeswhoterminateemploymentduringtheoneyearperiodfollowingtheeffectivetimeofthemerger,thesurvivingcorporationwill(andMicrosoftwill
causethesurvivingcorporationto)provideseverancepaymentsandbenefitstoeligibleemployeesinaccordancewithLinkedInsseveranceplans,guidelinesandpracticesasineffectonthe
dateofthemergeragreement.
TotheextentthataLinkedInbenefitplanorcomparableplanismadeavailabletoacontinuingemployeeaftertheeffectivetimeofthemerger(otherthanwithrespecttocertain
exceptions),thesurvivingcorporationanditssubsidiarieswill(andMicrosoftwillcausethesurvivingcorporationoroneofitssubsidiariesto)grantcontinuingemployeescreditforall
servicewithLinkedInanditssubsidiariespriortotheeffectivetimeofthemergerforpurposesofeligibilitytoparticipate,vestingandentitlementtobenefitswherelengthofserviceis
relevant(includingforpurposesofvacationaccrualandseverancepayentitlement,butexcludingforpurposesofbenefitaccrualsunderanydefinedbenefitpensionplanorpost-employment
welfareplan),exceptthatsuchserviceneednotbecreditedtotheextentthatitwouldresultinduplicationofbenefits.Inaddition,(1)eachcontinuingemployeewillbeimmediatelyeligible
toparticipate,withoutanywaitingperiod,inanyandallemployeebenefitplanssponsoredbythesurvivingcorporationanditssubsidiariestotheextentthatcoveragepursuanttoanysuch
newbenefitplanreplacescoveragepursuanttoacomparableLinkedInbenefitplanorarrangementthatthecontinuingemployeeparticipatesinimmediatelybeforetheeffectivetimeofthe
merger;(2)forpurposesofeachnewbenefitplanprovidinghealthandwelfarebenefitstoacontinuingemployee,thesurvivingcorporationwillcauseallwaitingperiods,pre-existing
conditionexclusions,evidenceofinsurabilityrequirementsandactively-at-workorsimilarrequirementsofsuchnewbenefitplanstobewaivedforsuchcontinuingemployeeandhisorher
covereddependents,totheextentwaivedunderthecorrespondingLinkedInbenefitplanorarrangement,andthesurvivingcorporationwillcauseanyeligibleexpensesincurredbysuch
continuingemployeeandhisorhercovereddependentsduringtheportionoftheplanyearoftheLinkedInbenefitplanorarrangementendingonthedatethatsuchcontinuingemployees
participationinthecorrespondingnewbenefitplanbeginstobegivenfullcreditpursuanttosuchnewbenefitplanforpurposesofsatisfyingalldeductible,coinsuranceandmaximumout-ofpocketrequirementsapplicabletosuchcontinuingemployeeandhisorhercovereddependentsfortheapplicableplanyearasifsuchamountshadbeenpaidinaccordancewithsuchnew
benefitplan,totheextentcreditedundertheLinkedInbenefitplanorarrangement;and(3)credittheaccountsofsuchcontinuingemployeespursuanttoanynewbenefitplanthatisaflexible
spendingplanwithanyunusedbalanceintheaccountofsuchcontinuingemployee.Anyvacationorpaidtimeoffaccruedbutunusedbyacontinuingemployeeasofimmediatelypriortothe
effectivetimeofthemergerwillbecreditedtosuchcontinuingemployeefollowingtheeffectivetimeofthemergerinaccordancewithLinkedInsvacationorpaidtimeoffpoliciesineffect
immediatelypriortotheeffectivetimeofthemerger.
Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerAgreementEmployeeBenefits.
Interests
of
LinkedIns
Directors
and
Executive
Officers
in
the
Merger
WhenconsideringtherecommendationoftheLinkedInBoardthatyouvotetoapprovetheproposaltoadoptthemergeragreement,youshouldbeawarethatourdirectorsand
executiveofficersmayhaveinterestsinthemergerthataredifferentfrom,orinadditionto,yourinterestsasastockholder.In(1)evaluatingandnegotiatingthemergeragreement;
(2)approvingthemergeragreementandthemerger;and(3)recommendingthatthemergeragreementbeadoptedbyLinkedInstockholders,theLinkedInBoardwasawareofandconsidered
theseintereststotheextentthattheyexistedatthetime,amongothermatters.Theseinterestsincludethefollowing:
acceleratedvesting,upontheeffectivetimeofthemerger,oftherestrictedstockunits,whichwerefertoasRSUs,heldbycertainnon-continuingdirectors,pursuanttothe
LinkedIn2011EquityIncentivePlanandasdescribedinmoredetailbelowunderthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInDirectors
andExecutiveOfficersintheMergerTreatmentofEquity-BasedAwardsTreatmentofCompanyStock-BasedAwards;and
theentitlementofeachexecutiveofficertoreceivepaymentsandbenefitspursuanttoarrangementsenteredintopriortothecommencementofdiscussionsornegotiations
regardingthemerger,includingcashseverancebenefitsandimmediatevestingof100%or50%,asapplicable,ofhisorheroutstandingcompanyoptionsorcompanystockbasedawards,underhisorherexistingofferletterorchangeofcontrolagreementif,within12months
TableofContents
followingthemerger,thereisaninvoluntaryterminationofemploymentwithoutcause,oraconstructivetermination,asdescribedinmoredetailbelowunderthesectionofthis
proxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerPaymentsUponTerminationFollowingChangeofControl.
Inaddition,Mr.WeinerhasenteredintoanofferletterwithMicrosoftprovidingforhisfutureemploymentfollowingthecompletionofthemerger,asdescribedinmoredetailbelow
underthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerEmploymentArrangementsFollowingthe
Merger.
Iftheproposaltoadoptthemergeragreementisapproved,thecommonstockheldbyourdirectorsandexecutiveofficerswillbetreatedinthesamemannerasthecommonstock
heldbyallotherstockholders.Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMerger.
Appraisal
Rights
Ifthemergerisconsummated,LinkedInstockholderswhodonotvoteinfavoroftheadoptionofthemergeragreement,whocontinuouslyholdsuchsharesthroughtheeffectivetime
ofthemerger,andwhoproperlyperfectappraisaloftheirshareswillbeentitledtoappraisalrightsinconnectionwiththemergerunderSection262oftheGeneralCorporationLawofthe
StateofDelaware,whichwerefertoastheDGCL.ThismeansthatsuchstockholdersareentitledtohavetheirsharesappraisedbytheDelawareCourtofChanceryandtoreceivepayment
incashofthefairvalueoftheirsharesofcommonstock,exclusiveofanyelementsofvaluearisingfromtheaccomplishmentorexpectationofthemerger,togetherwithinteresttobepaid
ontheamountdeterminedtobefairvalue,ifany,asdeterminedbythecourt.Duetothecomplexityoftheappraisalprocess,stockholderswhowishtoseekappraisaloftheirsharesare
encouragedtoseektheadviceoflegalcounselwithrespecttotheexerciseofappraisalrights.
Stockholders
considering
seeking
appraisal
should
be
aware
that
the
fair
value
of
their
shares
as
determined
pursuant
to
Section
262
of
the
DGCL
could
be
more
than,
the
same
as
or
less
than
the
value
of
the
consideration
that
they
would
receive
pursuant
to
the
merger
agreement
if
they
did
not
seek
appraisal
of
their
shares.
Toexerciseappraisalrights,thestockholderofrecordmust(1)submitawrittendemandforappraisaltoLinkedInbeforethevoteistakenontheproposaltoadoptthemerger
agreement;(2)notsubmitaproxyorotherwisevoteinfavoroftheproposaltoadoptthemergeragreement;and(3)continuetoholdthesubjectsharesofcommonstockofrecordthroughthe
effectivetimeofthemerger.ThefailuretofollowexactlytheproceduresspecifiedundertheDGCLwillresultinthelossofappraisalrights.TheDGCLrequirementsforexercisingappraisal
rightsaredescribedinfurtherdetailinthisproxystatement,andtherelevantsectionoftheDGCLregardingappraisalrightsisattachedasAnnexCtothisproxystatement.Ifyouholdyour
sharesofcommonstockthroughabank,brokerorothernomineeandyouwishtoexerciseappraisalrights,youshouldconsultwithyourbank,brokerorothernomineetodeterminethe
appropriateproceduresforthemakingofademandforappraisalonyourbehalfbyyourbank,brokerorothernominee.
Material
U.S.
Federal
Income
Tax
Consequences
of
the
Merger
ForU.S.federalincometaxpurposes,thereceiptofcashbyaU.S.Holder(asdefinedunderthesectionofthisproxystatementcaptionedTheMergerMaterialU.S.Federal
IncomeTaxConsequencesoftheMerger)inexchangeforsuchU.S.Holderssharesofcommonstockinthemergergenerallywillresultintherecognitionofgainorlossinanamount
measuredbythedifference,ifany,betweentheamountofcashthatsuchU.S.HolderreceivesinthemergerandsuchU.S.Holdersadjustedtaxbasisinthesharesofcommonstock
surrenderedinthemerger.
ANon-U.S.Holder(asdefinedunderthesectionofthisproxystatementcaptionedTheMergerMaterialU.S.FederalIncomeTaxConsequencesoftheMerger)generallywill
notbesubjecttoU.S.federalincometaxwithrespectto
TableofContents
theexchangeofcommonstockforcashinthemergerunlesssuchNon-U.S.HolderhascertainconnectionstotheUnitedStates.
Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerMaterialU.S.FederalIncomeTaxConsequencesoftheMerger.Stockholders
should
consult
their
own
tax
advisors
concerning
the
U.S.
federal
income
tax
consequences
relating
to
the
merger
in
light
of
their
particular
circumstances
and
any
consequences
arising
under
U.S.
federal
income
tax
laws
or
the
laws
of
any
state,
local
or
non-U.S.
taxing
jurisdiction
.
Regulatory
Approvals
Required
for
the
Merger
Underthemergeragreement,themergercannotbecompleteduntil(1)theapplicablewaitingperiodundertheHart-Scott-RodinoAntitrustImprovementsActof1976,asamended,
whichwerefertoastheHSRAct,hasexpiredorbeenterminated;and(2)theapprovalorclearanceofthemergerhasbeengrantedbyrelevantantitrustauthoritiesintheEuropeanUnion
andCanada.
No
Solicitation
of
Other
Offers
Underthemergeragreement,fromthedateofthemergeragreementuntiltheeffectivetimeofthemerger(ortheearlierterminationofthemergeragreement),LinkedInhasagreedto
ceaseandcausetobeterminatedanydiscussionsornegotiationswithandterminateanydataroomorotherdiligenceaccessofanyperson,itsaffiliatesanditsrepresentatives(asdefined
below)relatingtoanacquisitiontransaction(asdefinedunderthesectionofthisproxystatementcaptionedTheMergerAgreementNoSolicitationofOtherOffers)andtorequestany
personwhoexecutedaconfidentialityagreementinconnectionwithitsconsiderationofacquiringLinkedIntopromptlyreturnordestroyanynon-publicinformationfurnishedbyoronbehalf
ofLinkedInpriortothedateofthemergeragreement.
Underthemergeragreement,fromthedateofthemergeragreementuntiltheeffectivetimeofthemerger(ortheearlierterminationofthemergeragreement),LinkedInhasagreed
notto,andtocauseordirect,asthecasemaybe,itssubsidiariesanditsandtheirrespectiveaffiliates,directors,officers,employees,consultants,agents,representativesandadvisors,whom
wecollectivelyrefertoasrepresentatives,notto,amongotherthings:(1)solicit,initiate,proposeorinducethemaking,submissionorannouncementof,orknowinglyencourage,facilitate
orassist,anyproposalthatconstitutes,orisreasonablyexpectedtoleadto,anacquisitionproposal(asdefinedunderthesectionofthisproxystatementcaptionedTheMergerAgreement
NoSolicitationofOtherOffers);(2)furnishorotherwiseprovideaccesstoanynon-publicinformationregarding,ortothebusiness,properties,assets,books,recordsorpersonnelof,
LinkedInoritssubsidiariestoanypersoninconnectionwithorwiththeintenttoinducethemaking,submissionorannouncementof,orknowinglyencourage,facilitateorassist,an
acquisitionproposaloranyinquiriesorthemakingofanyproposalthatwouldreasonablybeexpectedtoleadtoanacquisitionproposal;(3)participateorengageindiscussionsor
negotiationswithanypersonwithrespecttoanacquisitionproposalorwithrespecttoanyinquiriesfromthirdpartiesrelatingtomakingapotentialacquisitionproposal;(4)approve,endorse
orrecommendanyproposalthatconstitutes,orisreasonablyexpectedtoleadto,anacquisitionproposal;(5)enterintoanyletterofintent,memorandumofunderstanding,mergeragreement,
acquisitionagreementorothercontractrelatingtoanacquisitiontransaction(asdefinedunderthesectionofthisproxystatementcaptionedTheMergerAgreementNoSolicitationofOther
Offers);or(6)authorizeorcommittodoanyoftheforegoing.
Notwithstandingtheserestrictions,undercertaincircumstancespriortotheadoptionofthemergeragreementbyLinkedInstockholders,LinkedInmayfurnishinformationto,and
enterintonegotiationsordiscussionswith,apersonregardingabonafidewrittenacquisitionproposaliftheLinkedInBoarddeterminesingoodfaithafterconsultationwithitsfinancial
advisoranditsoutsidelegalcounselthat(1)suchproposalconstitutesorisreasonablylikelytoleadtoasuperiorproposal(asdefinedunderthesectionofthisproxystatementcaptionedThe
MergerAgreementNoSolicitationof
TableofContents
OtherOffers);and(2)failuretodosowouldbeinconsistentwithitsfiduciarydutiespursuanttoapplicablelaw.Formoreinformation,seethesectionofthisproxystatementcaptionedThe
MergerAgreementNoSolicitationofOtherOffers.
LinkedInisnotentitledtoterminatethemergeragreementtoenterintoanagreementforasuperiorproposalunlessitcomplieswithcertainproceduresinthemergeragreement,
includingengagingingoodfaithnegotiationswithMicrosoftduringaspecifiedperiod.IfLinkedInterminatesthemergeragreementinordertoacceptasuperiorproposal,itmustpaya$725
millionterminationfeetoMicrosoft.Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerAgreementTheLinkedInBoardsRecommendation;Company
BoardRecommendationChange.
Change
in
the
LinkedIn
Boards
Recommendation
TheLinkedInBoardmaynotwithdrawitsrecommendationthatLinkedInstockholdersadoptthemergeragreementortakecertainsimilaractionsotherthan,undercertain
circumstances,ifitdeterminesingoodfaith,afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel,thatfailuretodosowouldbeinconsistentwiththeLinkedInBoards
fiduciarydutiespursuanttoapplicablelawandcomplieswiththeprovisionsofthemergeragreement.
However,theLinkedInBoardcannotwithdrawitsrecommendationthatLinkedInstockholdersadoptthemergeragreementortakecertainsimilaractionsunlessitcomplieswith
certainproceduresinthemergeragreement,includingengagingingoodfaithnegotiationswithMicrosoftduringaspecifiedperiod.IfMicrosoftterminatesthemergeragreementbecausethe
LinkedInBoardwithdrawsitsrecommendationthatLinkedInstockholdersadoptthemergeragreementortakescertainsimilaractions,thenLinkedInmustpaya$725millionterminationfee
toMicrosoft.Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerAgreementTheLinkedInBoardsRecommendation;CompanyBoardRecommendation
Change.
Conditions
to
the
Closing
of
the
Merger
TheobligationsofLinkedIn,MicrosoftandMergerSub,asapplicable,toconsummatethemergeraresubjecttothesatisfactionorwaiverofcertainconditions,including(among
otherconditions),thefollowing:
theadoptionofthemergeragreementbytherequisiteaffirmativevoteofLinkedInstockholders;
theexpirationorterminationoftheapplicablewaitingperiodunder,orobtainingallrequisiteconsentspursuantto,theHSRActandtheantitrustlawsoftheEuropeanUnionand
Canada;
theconsummationofthemergernotbeingrestrained,enjoined,renderedillegalorotherwiseprohibitedbyanylawororderofanygovernmentalauthority;
theabsenceofanyCompanyMaterialAdverseEffect(assuchtermisdefinedinthesectionofthisproxystatementcaptionedTheMergerAgreementRepresentationsand
Warranties)oramaterialadverseeffectwithrespecttoMicrosoftanditssubsidiaries(assuchtermisdefinedinthemergeragreement)havingoccurredafterthedateofmerger
agreementthatiscontinuingasoftheeffectivetimeofthemerger;
theaccuracyoftherepresentationsandwarrantiesofMicrosoftandMergerSubinthemergeragreement,subjecttomaterialityqualifiers,asoftheeffectivetimeofthemerger
orthedateinrespectofwhichsuchrepresentationorwarrantywasspecificallymade;
theaccuracyoftherepresentationsandwarrantiesofLinkedIninthemergeragreement,subjecttomaterialityqualifiers,asoftheeffectivetimeofthemergerorthedatein
respectofwhichsuchrepresentationorwarrantywasspecificallymade;and
10
TableofContents
theperformanceandcomplianceinallmaterialrespectsbyLinkedIn,MicrosoftandMergerSubofandwiththeirrespectivecovenantsandobligationsrequiredtobeperformed
andcompliedwithbythemunderthemergeragreementatorpriortotheeffectivetimeofthemerger.
Termination
of
the
Merger
Agreement
Themergeragreementmaybeterminatedatanytimepriortotheeffectivetimeofthemerger,whetherbeforeoraftertheadoptionofthemergeragreementbyLinkedIn
stockholders,inthefollowingways:
bymutualwrittenagreementofLinkedInandMicrosoft;
byeitherLinkedInorMicrosoftif:
(1)apermanentinjunctionorsimilarorderissuedbyacourtorotherlegalrestraintprohibitingconsummationofthemergerisineffect,oranyactiontakenbya
governmentalauthorityprohibitingthemergerhasbecomefinalandnon-appealable;or(2)anystatute,regulationororderprohibitingthemergerhasbeenenacted(except
thatapartymaynotterminatethemergeragreementpursuanttothisprovisionifsuchpartyhasfailedtouseitsreasonablebesteffortstoresist,appeal,obtainconsent
pursuantto,resolveorlift,asapplicable,suchinjunction,lawororder);
themergerhasnotbeenconsummatedbeforeJanuary11,2017,whichwerefertoastheterminationdate,exceptthatifallconditionshavebeensatisfied(otherthan
thoseconditionstobesatisfiedattheclosingofthemerger)orwaived(totheextentpermittedbyapplicablelaw)bythatdatebutonthatdateanyoftheantitrustor
competition-relatedconditionsortheconditionsrelatedtoprohibitivelawsororderssetforthinthemergeragreementhavenotbeensatisfied,theneitherLinkedInor
MicrosoftmayelecttoextendtheterminationdatetoJune11,2017,but:
apartymaynotterminatethemergeragreementifsuchpartysactionorfailuretoactconstitutesabreachofthemergeragreementandistheprimarycauseofthe
failuretoconsummatethemergerbytheterminationdate;and
LinkedInmaynotterminatethemergeragreementifithasnottakenastockholdervoteontheadoptionofthemergeragreementatthespecialmeeting;
theLinkedInstockholdersdonotadoptthemergeragreementatthespecialmeeting(exceptthatapartymaynotterminatethemergeragreementifsuchpartysactionor
failuretoactconstitutesabreachofthemergeragreementandistheprimarycauseofthefailuretoobtaintheapprovaloftheLinkedInstockholdersatthespecialmeeting);
byLinkedInif:
afteracureperiod,MicrosoftorMergerSubhasbreachedorfailedtoperforminanymaterialrespectanyofitsrespectiverepresentations,warranties,covenantsorother
agreementsinthemergeragreement,suchthattherelatedclosingconditionwouldnotbesatisfied;
priortotheadoptionofthemergeragreementbyLinkedInstockholders,(1)LinkedInhasreceivedasuperiorproposal;(2)theLinkedInBoardhasauthorizedLinkedInto
enterintoanagreementtoconsummatethetransactioncontemplatedbysuchsuperiorproposal,(3)LinkedInpaysMicrosofta$725millionterminationfee;and
(4)LinkedInhascompliedwithitsnon-solicitationobligationsunderthemergeragreement;
byMicrosoftif:
11
TableofContents
afteracureperiod,LinkedInhasbreachedorfailedtoperforminanymaterialrespectanyofitsrepresentations,warranties,covenantsorotheragreementsinthemerger
agreement,suchthattherelatedclosingconditionwouldnotbesatisfied;or
theLinkedInBoard(1)withholds,withdraws,amends,qualifiesormodifies,orpubliclyproposestowithhold,withdraw,amend,qualifyormodify,theLinkedInBoards
recommendationinamanneradversetoMicrosoft;(2)adopts,approves,orrecommendsanacquisitionproposal;(3)failstopubliclyreaffirmtheLinkedInBoards
recommendationwithin10businessdaysoftheoccurrenceofamaterialeventordevelopmentandafterMicrosoftsorequestsinwriting(orifthespecialmeetingis
scheduledtobeheldwithin10businessdays,thenwithinonebusinessdayafterMicrosoftsorequests);(4)takesorfailstotakeanyformalactionormakesorfailstomake
anyrecommendationinconnectionwithatenderorexchangeoffer,otherthanarecommendationagainstsuchofferorastop,lookandlistencommunicationbythe
LinkedInBoard(oracommitteethereof)toLinkedInsstockholderspursuanttoRule14d-9(f)promulgatedundertheExchangeAct(oranysubstantiallysimilar
communication);or(5)failstoincludetheLinkedInBoardsrecommendationinthisproxystatement.
Termination
Fee
LinkedInwillberequiredtopaytoMicrosoftaterminationfeeof$725millionifthemergeragreementisterminatedinspecifiedcircumstances.Formoreinformation,seethe
sectionofthisproxystatementcaptionedTheMergerAgreementTerminationFee.
12
TableofContents
QUESTIONS
AND
ANSWERS
The
following
questions
and
answers
address
some
commonly
asked
questions
regarding
the
merger,
the
merger
agreement
and
the
special
meeting.
These
questions
and
answers
may
not
address
all
questions
that
are
important
to
you.
We
encourage
you
to
carefully
read
the
more
detailed
information
contained
elsewhere
in
this
proxy
statement,
the
annexes
to
this
proxy
statement
and
the
documents
we
refer
to
in
this
proxy
statement.
You
may
obtain
the
documents
we
file
with
the
SEC
without
charge
by
following
the
instructions
under
the
section
of
this
proxy
statement
captioned
Where
You
Can
Find
More
Information.
Q:
Why
am
I
receiving
these
materials?
A:
OnJune11,2016,LinkedInenteredintothemergeragreementprovidingforthemergerofMergerSubwithandintoLinkedIn,pursuanttowhichLinkedInwillsurvivethemergeras
awhollyownedsubsidiaryofMicrosoft.AcopyofthemergeragreementisattachedtothisproxystatementasAnnexAandisincorporatedbyreferenceherein.Inordertocompletethe
merger,LinkedInstockholdersmustvotetoadoptthemergeragreementatthespecialmeeting.Theapprovalofthisproposalbyourstockholdersisaconditiontotheconsummationofthe
merger.SeethesectionofthisproxystatementcaptionedTheMergerAgreementConditionstotheClosingoftheMerger.TheLinkedInBoardisfurnishingthisproxystatementandform
ofproxycardtotheholdersofsharesofcommonstockinconnectionwiththesolicitationofproxiestobevotedatthespecialmeeting.
Q:
What
am
I
being
asked
to
vote
on
at
the
special
meeting?
A:
Youarebeingaskedtovoteonthefollowingproposals:
toadoptthemergeragreementpursuanttowhichMergerSubwillmergewithandintoLinkedIn,andLinkedInwillbecomeawhollyownedsubsidiaryofMicrosoft;
toapprovetheadjournmentofthespecialmeetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemerger
agreementatthetimeofthespecialmeeting;and
toapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Q:
When
and
where
is
the
special
meeting?
A:
Thespecialmeetingwilltakeplaceon[
],Pacifictime.
Q:
Who
is
entitled
to
vote
at
the
special
meeting?
A:
LinkedInstockholdersasofthecloseofbusinesson[
],2016,whichistherecorddateforthespecialmeeting,areentitledtonoticeofthespecialmeetingandtovoteatthespecial
meeting.Asofthecloseofbusinessontherecorddate,therewere[
]sharesofClassBcommonstockoutstandingandentitledtovoteatthespecial
meeting.EachshareofClassAcommonstockisentitledtoonevotepershareoneachmatterproperlybroughtbeforethespecialmeetingandeachshareofClassBcommonstockisentitledto
10votespershareoneachmatterproperlybroughtbeforethespecialmeeting.TheClassAcommonstockandClassBcommonstockarevotingasasingleclassontheproposalstobe
consideredatthespecialmeeting.
Q:
May
I
attend
the
special
meeting
and
vote
in
person?
A:
Yes.Subjecttotherequirementsdescribedinthisproxystatement,allLinkedInstockholdersasoftherecorddatemayattendthespecialmeetingandvoteinperson.Seatingwillbe
limited.Stockholderswillneedtopresentproofof
13
TableofContents
ownershipofsharesofcommonstock,suchasabankorbrokerageaccountstatement,andaformofpersonalidentificationtobeadmittedtothespecialmeeting.Nocameras,recording
equipment,electronicdevices,largebags,briefcasesorpackageswillbepermittedinthespecialmeeting.
Evenifyouplantoattendthespecialmeetinginperson,toensurethatyourshareswillberepresentedatthespecialmeetingweencourageyoutosign,dateandreturntheenclosed
proxycardintheaccompanyingprepaidreplyenvelopeorgrantyourproxyelectronicallyovertheinternetorbytelephone.Ifyouattendthespecialmeetingandvoteinpersonbyballot,your
votewillrevokeanyproxypreviouslysubmitted.
instructions.Ifyouholdyoursharesinstreetname,youmaynotvoteyoursharesinpersonatthespecialmeetingunlessyouobtainalegalproxyfromyourbank,brokerorothernominee
givingyoutherighttovoteyoursharesatthespecialmeeting.
Q:
What
is
the
proposed
merger
and
what
effects
will
it
have
on
LinkedIn?
A:
TheproposedmergeristheacquisitionofLinkedInbyMicrosoft.IftheproposaltoadoptthemergeragreementisapprovedbyLinkedInstockholdersandtheotherclosingconditions
underthemergeragreementaresatisfiedorwaived,MergerSubwillmergewithandintoLinkedIn,withLinkedIncontinuingasthesurvivingcorporation.Asaresultofthemerger,LinkedIn
willbecomeawhollyownedsubsidiaryofMicrosoft,andourClassAcommonstockwillnolongerbepubliclytradedandwillbedelistedfromtheNYSE.Inaddition,ourClassAcommon
stockwillbederegisteredundertheExchangeAct,andwewillnolongerfileperiodicreportswiththeSEC.
Q:
What
will
I
receive
if
the
merger
is
completed?
A:
Uponcompletionofthemerger,youwillbeentitledtoreceivethepersharemergerconsiderationof$196.00incash,withoutinterestandlessanyapplicablewithholdingtaxes,for
eachshareofcommonstockthatyouown,unlessyouhaveproperlyexercisedandnotvalidlywithdrawnorsubsequentlylostyourappraisalrightsundertheDGCL.Forexample,ifyouown
100sharesofcommonstock,youwillreceive$19,600.00incashinexchangeforyoursharesofcommonstock,lessanyapplicablewithholdingtaxes.
Q:
How
does
the
per
share
merger
consideration
compare
to
the
market
price
of
the
Class
A
common
stock
prior
to
the
public
announcement
of
the
merger
agreement?
A:
Thepersharemergerconsiderationrepresentsapremiumofapproximately49.5%overtheclosingpriceoftheClassAcommonstockonJune10,2016,thelasttradingdaypriorto
thepublicannouncementofthemergeragreement.
Q:
What
do
I
need
to
do
now?
A:
Weencourageyoutoreadthisproxystatement,theannexestothisproxystatementandthedocumentsthatwerefertointhisproxystatementcarefullyandconsiderhowthemerger
affectsyou.Then,evenifyouexpecttoattendthespecialmeeting,sign,dateandreturn,aspromptlyaspossible,theenclosedproxycardintheaccompanyingprepaidreplyenvelope,orgrant
yourproxyelectronicallyovertheinternetorbytelephone,sothatyoursharescanbevotedatthespecialmeeting.Ifyouholdyoursharesinstreetname,pleaserefertothevotinginstruction
formsprovidedbyyourbank,brokerorothernomineetovoteyourshares.Pleasedonotsendyourstockcertificateswithyourproxycard.
14
TableofContents
Q:
Should
I
send
in
my
stock
certificates
now?
A:
No.Afterthemergeriscompleted,youwillreceivealetteroftransmittalcontaininginstructionsforhowtosendyourstockcertificatesorsurrenderyourbook-entrysharestothe
payingagentinordertoreceivetheappropriatecashpaymentforthesharesofcommonstockrepresentedbyyourstockcertificates.Youshouldusetheletteroftransmittaltoexchangeyour
stockcertificatesorbook-entrysharesforthecashpaymenttowhichyouareentitled.Pleasedonotsendyourstockcertificateswithyourproxycard.
Q:
What
happens
if
I
sell
or
otherwise
transfer
my
shares
of
common
stock
after
the
record
date
but
before
the
special
meeting?
A:
Therecorddateforthespecialmeetingisearlierthanthedateofthespecialmeetingandthedatethemergerisexpectedtobecompleted.Ifyousellortransferyoursharesof
commonstockaftertherecorddatebutbeforethespecialmeeting,unlessspecialarrangements(suchasprovisionofaproxy)aremadebetweenyouandthepersontowhomyousellor
otherwisetransferyoursharesandeachofyounotifiesLinkedIninwritingofsuchspecialarrangements,youwilltransfertherighttoreceivethepersharemergerconsideration,ifthemergeris
completed,tothepersontowhomyousellortransferyourshares,butyouwillretainyourrighttovotethosesharesatthespecialmeeting.Even
if
you
sell
or
otherwise
transfer
your
shares
of
common
stock
after
the
record
date,
we
encourage
you
to
sign,
date
and
return
the
enclosed
proxy
card
in
the
accompanying
prepaid
reply
envelope
or
grant
your
proxy
electronically
over
the
internet
or
by
telephone
.
Q:
How
does
the
LinkedIn
Board
recommend
that
I
vote?
A:
TheLinkedInBoardunanimouslyrecommendsthatyouvote(1)FOR
theadoptionofthemergeragreement;(2)FOR
theadjournmentofthespecialmeetingtoalaterdateor
dates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting;and(3)FOR
theproposalto
approve,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Q:
Why
am
I
being
asked
to
cast
a
non-binding,
advisory
vote
to
approve
compensation
that
will
or
may
become
payable
by
LinkedIn
to
its
named
executive
officers
in
connection
with
the
merger?
A:
SECrulesrequireLinkedIntoseekanon-binding,advisoryvotetoapprovecompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnection
withthemerger.
Q:
What
is
the
compensation
that
will
or
may
become
payable
by
LinkedIn
to
our
named
executive
officers
in
connection
with
the
merger
for
purposes
of
this
advisory
vote?
A:
ThecompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemergeriscertaincompensationthatistiedtoorbasedonthe
mergerandpayabletocertainofLinkedInsnamedexecutiveofficerspursuanttounderlyingplansandarrangementsthatarecontractualinnature.Compensationthatwillormaybecome
payablebyMicrosofttoournamedexecutiveofficersinconnectionwiththemergerisnotsubjecttothisadvisoryvote.Forfurtherdetail,seethesectionofthisproxystatementcaptioned
Proposal3:Advisory,Non-BindingVotetoApproveCertainMerger-RelatedExecutiveCompensationArrangements.
Q:
What
will
happen
if
LinkedIn
stockholders
do
not
approve
the
compensation
that
will
or
may
become
payable
by
LinkedIn
to
its
named
executive
officers
in
connection
with
the
merger?
A:
ApprovalofthecompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemergerisnotaconditiontocompletionofthe
merger.ThevotetoapprovethecompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemergerisanadvisoryvoteandwillnotbe
bindingonLinkedInorMicrosoft.Accordingly,ifthemergeragreementisadoptedbyLinkedInstockholders
15
TableofContents
andthemergeriscompleted,thecompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemergerwillormaybepaidtoLinkedIns
namedexecutiveofficersevenifLinkedInstockholdersdonotapprovesuchcompensation.
Q:
What
happens
if
the
merger
is
not
completed?
A:
sharesofcommonstock.Instead,(1)LinkedInwillremainanindependentpubliccompany;(2)ourClassAcommonstockwillcontinuetobelistedandtradedontheNYSEandregistered
undertheExchangeAct;and(3)wewillcontinuetofileperiodicreportswiththeSEC.
Underspecifiedcircumstances,LinkedInwillberequiredtopayMicrosoftaterminationfeeof$725millionupontheterminationofthemergeragreement,asdescribedinthesection
ofthisproxystatementcaptionedTheMergerAgreementTerminationFee.
Q:
What
vote
is
required
to
adopt
the
merger
agreement?
A:
Theaffirmativevoteoftheholdersofamajorityofthevotingpoweroftheoutstandingsharesofcommonstockentitledtovoteontheproposalisrequiredtoadoptthemerger
agreement.
Thefailureofanystockholderofrecordto(1)submitasignedproxycard;(2)grantaproxyovertheinternetorbytelephone;or(3)voteinpersonbyballotatthespecialmeetingwill
havethesameeffectasavoteAGAINSTtheproposaltoadoptthemergeragreement.Ifyouholdyoursharesinstreetname,thefailuretoinstructyourbank,brokerorothernomineehow
tovoteyourshareswillhavethesameeffectasavoteAGAINSTtheproposaltoadoptthemergeragreement.AbstentionswillhavethesameeffectasavoteAGAINSTtheproposalto
adoptthemergeragreement.
Asaresultofhisownershipofapproximately[
]%ofthevotingpoweroftheoutstandingsharesofcommonstockasoftherecorddate,ReidHoffman,ourco-founderandChairof
theLinkedInBoard,willhavethepowertoapprovetheadoptionoftheproposalswithoutthevoteofanyotherstockholder.Accordingly,ifMr.Hoffmanvoteshissharesinfavorofthe
proposals,theapprovaloftheproposalsisassuredwithoutthevoteofanyotherstockholder.Mr.HoffmanhasinformedusthatheintendstovoteallofhissharesofcommonstockFOR
eachoftheproposals.
Q:
What
vote
is
required
to
approve
any
proposal
to
adjourn
the
special
meeting,
if
necessary
or
appropriate,
to
solicit
additional
proxies
if
there
are
insufficient
votes
to
adopt
the
merger
agreement
at
the
time
of
the
special
meeting
and
to
approve,
by
non-binding,
advisory
vote,
compensation
that
will
or
may
become
payable
by
LinkedIn
to
its
named
executive
officers
in
connection
with
the
merger?
A:
Approvaloftheproposaltoadjournthespecialmeeting,whetherornotaquorumispresent,requirestheaffirmativevoteofamajorityofthevotingpowerofthesharespresentin
personorrepresentedbyproxyatthespecialmeetingandentitledtovoteontheproposal.Approval,bynon-binding,advisoryvote,ofcompensationthatwillormaybecomepayableby
LinkedIntoournamedexecutiveofficersinconnectionwiththemergerrequirestheaffirmativevoteofamajorityofthevotingpowerofthesharespresentinpersonorrepresentedbyproxyat
thespecialmeetingandentitledtovoteontheproposal.
Thefailureofanystockholderofrecordto(1)submitasignedproxycard;(2)grantaproxyovertheinternetorbytelephone;or(3)voteinpersonbyballotatthespecialmeetingwill
nothaveanyeffectontheadjournmentproposalortheproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutive
officersinconnectionwiththemerger.Ifyouholdyoursharesinstreetname,thefailuretoinstructyourbank,brokerorothernomineehowtovoteyourshareswillnothaveanyeffecton
theadjournmentproposalortheproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnection
withthemerger.Inallcases,abstentionswillhavethesameeffectasavote
16
TableofContents
AGAINSTtheadjournmentproposalandtheproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficers
inconnectionwiththemerger.
eachoftheproposals.
Q:
What
is
the
difference
between
holding
shares
as
a
stockholder
of
record
and
as
a
beneficial
owner?
A:
Ifyoursharesareregistereddirectlyinyournamewithourtransferagent,ComputershareTrustCompany,N.A.,youareconsidered,withrespecttothoseshares,tobethe
stockholderofrecord.Inthiscase,thisproxystatementandyourproxycardhavebeensentdirectlytoyoubyoronbehalfofLinkedIn.
Ifyoursharesareheldthroughabank,brokerorothernominee,youareconsideredthebeneficialownerofsharesofcommonstockheldinstreetname.Inthatcase,thisproxy
statementhasbeenforwardedtoyoubyyourbank,brokerorothernomineewhoisconsidered,withrespecttothoseshares,tobethestockholderofrecord.Asthebeneficialowner,youhave
therighttodirectyourbank,brokerorothernomineehowtovoteyoursharesbyfollowingtheirinstructionsforvoting.Youarealsoinvitedtoattendthespecialmeeting.However,because
youarenotthestockholderofrecord,youmaynotvoteyoursharesinpersonbyballotatthespecialmeetingunlessyouobtainalegalproxyfromyourbank,brokerorothernomineegiving
youtherighttovoteyoursharesatthespecialmeeting.
Q:
How
may
I
vote?
A:
Ifyouareastockholderofrecord(thatis,ifyoursharesofcommonstockareregisteredinyournamewithComputershareTrustCompany,N.A.,ourtransferagent),therearefour
waystovote:
bysigning,datingandreturningtheenclosedproxycardintheaccompanyingprepaidreplyenvelope;
byvisitingtheinternetaddressonyourproxycard;
bycallingthetoll-free(withintheU.S.orCanada)phonenumberonyourproxycard;or
byattendingthespecialmeetingandvotinginpersonbyballot.
Acontrolnumber,locatedonyourproxycard,isdesignedtoverifyyouridentityandallowyoutovoteyoursharesofcommonstockandtoconfirmthatyourvotinginstructionshave
beenproperlyrecordedwhenvotingelectronicallyovertheinternetorbytelephone.Althoughthereisnochargeforvotingyourshares,ifyouvoteelectronicallyovertheinternetorby
telephone,youmayincurcostssuchasinternetaccessandtelephonechargesforwhichyouwillberesponsible.
Evenifyouplantoattendthespecialmeetinginperson,youarestronglyencouragedtovoteyoursharesofcommonstockbyproxy.Ifyouarearecordholderorifyouobtainalegal
proxytovotesharesthatyoubeneficiallyown,youmaystillvoteyoursharesofcommonstockinpersonbyballotatthespecialmeetingevenifyouhavepreviouslyvotedbyproxy.Ifyou
arepresentatthespecialmeetingandvoteinpersonbyballot,yourpreviousvotebyproxywillnotbecounted.
Ifyoursharesareheldinstreetnamethroughabank,brokerorothernominee,youmayvotethroughyourbank,brokerorothernomineebycompletingandreturningthevoting
instructionformprovidedbyyourbank,brokerorothernominee,or,ifsuchaserviceisprovidedbyyourbank,brokerorothernominee,electronicallyovertheinternetorbytelephone.To
voteovertheinternetorbytelephonethroughyourbank,brokerorothernominee,youshouldfollowthe
17
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instructionsonthevotinginstructionformprovidedbyyourbank,brokerornominee.However,becauseyouarenotthestockholderofrecord,youmaynotvoteyoursharesinpersonbyballot
atthespecialmeetingunlessyouobtainalegalproxyfromyourbank,brokerorothernomineegivingyoutherighttovoteyoursharesatthespecialmeeting.
Q:
What
is
a
proxy?
A:
Aproxyisyourlegaldesignationofanotherperson,referredtoasaproxy,tovoteyoursharesofcommonstock.Thewrittendocumentdescribingthematterstobeconsideredand
votedonatthespecialmeetingiscalledaproxystatement.Thedocumentusedtodesignateaproxytovoteyoursharesofcommonstockiscalledaproxycard.MichaelCallahan,our
SeniorVicePresident,GeneralCounselandSecretary,andStevenSordello,ourSeniorVicePresidentandChiefFinancialOfficer,withfullpowersofsubstitutionandresubstitution,arethe
proxyholdersforthespecialmeeting.
Q:
If
my
broker
holds
my
shares
in
street
name,
will
my
broker
vote
my
shares
for
me?
A:
No.Yourbank,brokerorothernomineeispermittedtovoteyoursharesonanyproposalcurrentlyscheduledtobeconsideredatthespecialmeetingonlyifyouinstructyourbank,
brokerorothernomineehowtovote.Youshouldfollowtheproceduresprovidedbyyourbank,brokerorothernomineetovoteyourshares.Withoutinstructions,yourshareswillnotbevoted
onsuchproposals,whichwillhavethesameeffectasifyouvotedAGAINSTadoptionofthemergeragreement,butwillhavenoeffectontheadjournmentproposalortheproposalto
approve,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Q:
May
I
change
my
vote
after
I
have
mailed
my
signed
and
dated
proxy
card?
A:
Yes.Ifyouareastockholderofrecord,youmaychangeyourvoteorrevokeyourproxyatanytimebeforeitisvotedatthespecialmeetingby:
signinganotherproxycardwithalaterdateandreturningittouspriortothespecialmeeting;
submittinganewproxyelectronicallyovertheinternetorbytelephoneafterthedateoftheearliersubmittedproxy;
deliveringawrittennoticeofrevocationtoourCorporateSecretary;or
attendingthespecialmeetingandvotinginpersonbyballot.
voteinpersonatthespecialmeetingifyouobtainalegalproxyfromyourbank,brokerorothernomineegivingyoutherighttovoteyoursharesatthespecialmeeting.
Q:
If
a
stockholder
gives
a
proxy,
how
are
the
shares
voted?
A:
Regardlessofthemethodyouchoosetovote,theindividualsnamedontheenclosedproxycardwillvoteyoursharesinthewaythatyoudirect.
Ifyousignanddateyourproxycardbutdonotmarktheboxesshowinghowyoursharesshouldbevotedonamatter,thesharesrepresentedbyyourproperlysignedproxywillbe
voted(1)
FOR
FOR
theadjournmentofthespecialmeetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesif
thereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting;and(3)
FOR
theproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillor
maybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
18
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Q:
What
should
I
do
if
I
receive
more
than
one
set
of
voting
materials?
A:
Pleasesign,dateandreturn(orgrantyourproxyelectronicallyovertheinternetorbytelephone)eachproxycardandvotinginstructionformthatyoureceive.
Youmayreceivemorethanonesetofvotingmaterials,includingmultiplecopiesofthisproxystatementandmultipleproxycardsorvotinginstructioncards.Forexample,ifyouhold
yoursharesinmorethanonebrokerageaccount,youwillreceiveaseparatevotinginstructionformforeachbrokerageaccountinwhichyouholdshares.Ifyouareastockholderofrecordand
yoursharesareregisteredinmorethanonename,youwillreceivemorethanoneproxycard.
Please
vote
all
voting
materials
that
you
receive.
Q:
Where
can
I
find
the
voting
results
of
the
special
meeting?
A:
Ifavailable,LinkedInmayannouncepreliminaryvotingresultsattheconclusionofthespecialmeeting.LinkedInintendstopublishfinalvotingresultsinaCurrentReporton
Form8-KtobefiledwiththeSECfollowingthespecialmeeting.AllreportsthatLinkedInfileswiththeSECarepubliclyavailablewhenfiled.Seethesectionofthisproxystatement
captionedWhereYouCanFindMoreInformation.
Q:
Will
I
be
subject
to
U.S.
federal
income
tax
upon
the
exchange
of
common
stock
for
cash
pursuant
to
the
merger?
A:
IfyouareaU.S.Holder(asdefinedunderthesectionofthisproxystatementcaptionedTheMergerMaterialU.S.FederalIncomeTaxConsequencesoftheMerger),theexchange
ofcommonstockforcashpursuanttothemergerwillbeataxabletransactionforU.S.federalincometaxpurposes,whichgenerallywillrequireaU.S.HoldertorecognizegainorlossforU.S.
federalincometaxpurposesinanamountequaltothedifference,ifany,betweentheamountofcashreceivedbysuchU.S.HolderinthemergerandsuchU.S.Holdersadjustedtaxbasisinthe
sharesofcommonstocksurrenderedinthemerger.
ANon-U.S.Holder(asdefinedinthesectionofthisproxystatementcaptionedTheMergerMaterialU.S.FederalIncomeTaxConsequencesoftheMerger)generallywillnotbe
subjecttoU.S.federalincometaxwithrespecttotheexchangeofcommonstockforcashinthemergerunlesssuchNon-U.S.HolderhascertainconnectionstotheUnitedStates.
Becauseparticularcircumstancesmaydiffer,werecommendthatyouconsultyourowntaxadvisortodeterminetheU.S.federalincometaxconsequencesrelatingtothemergerin
lightofyourownparticularcircumstancesandanyconsequencesarisingunderU.S.federalnon-incometaxlawsorthelawsofanystate,localorforeigntaxingjurisdiction.Amorecomplete
descriptionofmaterialU.S.federalincometaxconsequencesofthemergerisprovidedinthesectionofthisproxystatementcaptionedTheMergerMaterialU.S.FederalIncomeTax
ConsequencesoftheMerger.
Q:
What
will
the
holders
of
company
options
and
company
stock-based
awards
receive
in
the
merger?
A:
Generally,attheeffectivetimeofthemerger,eachcompanyoptionandcompanystock-basedawardthatisoutstandingimmediatelypriortotheeffectivetimeofthemergerthatis
unvestedwillbeassumedorsubstitutedforbyMicrosoftandautomaticallyconvertedintoacorrespondingequityawardrepresentingtherighttoacquire,onthesamematerialtermsand
conditions,anadjustednumberofsharesofMicrosoftcommonstock,subjecttocertainexceptions.ThenumberofsharesofMicrosoftcommonstocksubjecttothenewequityawardswillbe
determinedbyastockawardexchangeratiobasedontherelativevalueofthepersharemergerconsideration($196.00)andthevolumeweightedaveragepricepershareofMicrosoftcommon
stockforthefiveconsecutivetradingdaysendingwiththecompletetradingdayendingimmediatelypriortotheclosingdateofthemerger,withacorrespondingadjustmenttobemadetothe
exercisepricesofcompanyoptions.Anyoutstandingcompanyoptionsorcompanystock-basedawardsthatarevested,willbecomevestedinconnectionwiththemerger,orthataredesignated
byMicrosoftascancelledawardsinsteadwillbecancelledandconvertedintotherighttoreceiveanamountincash(lessanyamountsrequiredtobedeductedorwithheldbylaw)determined
bymultiplying$196.00bythenumberofoutstandingsharesofLinkedIncommonstocksubjecttotheaward(andinthecaseofcompanyoptions,lessapplicableexerciseprices).
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TableofContents
Also,eachexecutiveofficeriseligibletoreceiveimmediatevestingof100%or50%,asapplicable,ofhisorheroutstandingcompanyoptionsorcompanystock-basedawardsunder
hisorherofferletterorchangeofcontrolagreementif,within12monthsfollowingthemerger,thereisaninvoluntaryterminationofemploymentwithoutcause,oraconstructivetermination
asdefinedintheapplicableofferletterorchangeofcontrolagreementandasdescribedmorefullybelow.
Q:
What
will
happen
to
the
ESPP?
A:
LinkedInsexecutiveofficerswilldeterminethefinalexercisedateforpurposesoftheESPP.Onsuchexercisedate,LinkedInwillapplythefundscreditedasofsuchdatepursuantto
increasehisorherpayrollcontributionratepursuanttotheESPPfromtherateineffectwhenthatofferingperiodcommencedandthateachindividualparticipatingintheESPPnoworinany
theESPP;(3)causetheexercise(asofnolaterthanonebusinessdaypriortothedateonwhichtheeffectivetimeofthemergeroccurs)ofeachoutstandingpurchaserightpursuanttotheESPP;
and(4)providethatnofurtherofferingperiodorpurchaseperiodwillcommencepursuanttotheESPPaftertheeffectivetimeofthemerger.
Q:
When
do
you
expect
the
merger
to
be
completed?
A:
Wecurrentlyexpecttocompletethemergerthiscalendaryear.However,theexacttimingofcompletionofthemerger,ifatall,cannotbepredictedbecausethemergerissubjectto
theclosingconditionsspecifiedinthemergeragreement,manyofwhichareoutsideofourcontrol.
Q:
Am
I
entitled
to
appraisal
rights
under
the
DGCL?
A:
Ifthemergerisconsummated,stockholderswhodonotvoteinfavoroftheadoptionofthemergeragreementandwhoproperlyperfectappraisaloftheirshareswillbeentitledto
appraisalrightsinconnectionwiththemergerunderSection262oftheDGCL.ThismeansthatholdersofsharesofcommonstockareentitledtohavetheirsharesappraisedbytheDelaware
CourtofChanceryandtoreceivepaymentincashofthefairvalueofthesharesofcommonstock,exclusiveofanyelementsofvaluearisingfromtheaccomplishmentorexpectationofthe
merger,togetherwithinteresttobepaidontheamountdeterminedtobefairvalue,ifany,asdeterminedbythecourt.Stockholderswhowishtoseekappraisaloftheirsharesareinanycase
encouragedtoseektheadviceoflegalcounselwithrespecttotheexerciseofappraisalrightsduetothecomplexityoftheappraisalprocess.TheDGCLrequirementsforexercisingappraisal
rightsaredescribedinadditionaldetailinthisproxystatement,andtherelevantsectionoftheDGCLregardingappraisalrightsisattachedasAnnexCtothisproxystatement.
Q:
Do
any
of
LinkedIns
directors
or
officers
have
interests
in
the
merger
that
may
differ
from
those
of
LinkedIn
stockholders
generally?
A:
Yes.InconsideringtherecommendationoftheLinkedInBoardwithrespecttotheproposaltoadoptthemergeragreement,youshouldbeawarethatourdirectorsandexecutive
officersmayhaveinterestsinthemergerthataredifferentfrom,orinadditionto,theinterestsofLinkedInstockholdersgenerally.In(1)evaluatingandnegotiatingthemergeragreement;
(2)approvingthemergeragreementandthemerger;and(3)unanimouslyrecommendingthatthemergeragreementbeadoptedbyLinkedInstockholders,theLinkedInBoardwasawareofand
consideredtheseintereststothe
20
TableofContents
extentthattheyexistedatthetime,amongothermatters.Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutive
OfficersintheMerger.
Q:
Who
can
help
answer
my
questions?
A:
Ifyouhaveanyquestionsconcerningthemerger,thespecialmeetingorthisproxystatement,wouldlikeadditionalcopiesoftheaccompanyingproxystatementorneedhelpvoting
yoursharesofcommonstock,pleasecontactourproxysolicitor:
NewYork,NY10022
or
Ifyourbroker,bankorothernomineeholdsyourshares,youmaycallyourbroker,bankorothernomineeforadditionalinformation.
21
TableofContents
FORWARD-LOOKING
STATEMENTS
Thisproxystatement,thedocumentstowhichwereferyouinthisproxystatementandinformationincludedinoralstatementsorotherwrittenstatementsmadeortobemadebyusor
onourbehalfcontainforward-lookingstatementsthatdonotdirectlyorexclusivelyrelatetohistoricalfacts.Youcantypicallyidentifyforward-lookingstatementsbytheuseofforwardlookingwords,suchasmay,should,could,project,believe,anticipate,expect,estimate,continue,potential,plan,forecastandotherwordsofsimilarimport.
Stockholdersarecautionedthatanyforward-lookingstatementsarenotguaranteesoffutureperformanceandmayinvolvesignificantrisksanduncertainties,andthatactualresultsmayvary
materiallyfromthoseintheforward-lookingstatements.Theserisksanduncertaintiesinclude,butarenotlimitedto,therisksdetailedinourfilingswiththeSEC,includinginourmostrecent
filingsonForms10-Kand10-Q,factorsandmattersdescribedorincorporatedbyreferenceinthisproxystatement,andthefollowingfactors:
theinabilitytocompletethemergerduetothefailureofLinkedInstockholderstoadoptthemergeragreementorfailuretosatisfytheotherconditionstothecompletionofthe
merger,includingreceiptofrequiredregulatoryapprovals;
theriskthatthemergeragreementmaybeterminatedincircumstancesthatrequireustopayMicrosoftaterminationfeeof$725million;
theoutcomeofanylegalproceedingsthatmaybeinstitutedagainstusandothersrelatedtothemergeragreement;
risksthatthemergeraffectsourabilitytoretainorrecruitemployees;
thefactthatreceiptoftheall-cashmergerconsiderationwouldbetaxabletoLinkedInstockholdersthataretreatedasU.S.holdersforU.S.federalincometaxpurposes;
thefactthat,ifthemergeriscompleted,LinkedInstockholderswillforegotheopportunitytorealizethepotentiallong-termvalueofthesuccessfulexecutionofLinkedIns
currentstrategyasanindependentcompany;
thepossibilitythatMicrosoftcould,atalaterdate,engageinunspecifiedtransactions,includingrestructuringefforts,specialdividendsorthesaleofsomeorallofLinkedIns
assetstooneormoreasyetunknownpurchasers,thatcouldconceivablyproduceahigheraggregatevaluethanthatavailabletoLinkedInstockholdersinthemerger;
thefactthatunderthetermsofthemergeragreement,LinkedInisunabletosolicitotheracquisitionproposalsduringthependencyofthemerger;
theeffectoftheannouncementorpendencyofthemergeronourbusinessrelationships,operatingresultsandbusinessgenerally,includingrisksrelatedtothediversionofthe
attentionofLinkedInmanagementoremployeesduringthependencyofthemerger;
theamountofthecosts,fees,expensesandchargesrelatedtothemergeragreementorthemerger;
theriskthatourstockpricemaydeclinesignificantlyifthemergerisnotcompleted;and
risksrelatedtoobtainingtherequisiteconsentstothemerger,includingthetimingandreceiptofregulatoryapprovalsfromvariousdomesticandforeigngovernmentalbodies
(includinganyconditions,limitationsorrestrictionsplacedontheseapprovals)andtheriskthatoneormoregovernmentalbodiesmaydenyapproval.
22
TableofContents
Consequently,alloftheforward-lookingstatementsthatwemakeinthisproxystatementarequalifiedbytheinformationcontainedorincorporatedbyreferenceinthisproxy
statement,includingtheinformationcontainedunderthiscaption.Noassurancecanbegiventhattheseareallofthefactorsthatcouldcauseactualresultstovarymateriallyfromtheforwardlookingstatements.
Exceptasrequiredbyapplicablelaw,weundertakenoobligationtopubliclyupdateforward-lookingstatements,whetherasaresultofnewinformation,futureeventsorotherwise.
StockholdersareadvisedtoconsultanyfuturedisclosuresthatwemakeonrelatedsubjectsasmaybedetailedinourotherfilingsmadefromtimetotimewiththeSEC.
23
TableofContents
THE
SPECIAL
MEETING
TheenclosedproxyissolicitedonbehalfoftheLinkedInBoardforuseatthespecialmeeting.
Date,
Time
and
Place
Wewillholdthespecialmeetingon[
],Pacifictime.
Purpose
of
the
Special
Meeting
Atthespecialmeeting,wewillaskstockholderstovoteonproposalsto(1)adoptthemergeragreement;(2)adjournthespecialmeetingtoalaterdateordates,ifnecessaryor
appropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting;and(3)approve,bynon-binding,advisoryvote,
compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Record
Date;
Shares
Entitled
to
Vote;
Quorum
OnlyLinkedInstockholdersasofthecloseofbusinessontherecorddateareentitledtonoticeof,andtovoteat,thespecialmeeting.Alistofstockholdersentitledtovoteatthe
specialmeetingwillbeavailableatourprincipalexecutiveofficeslocatedat2029StierlinCourt,MountainView,CA94043,duringregularbusinesshoursforaperiodofnolessthan10days
beforethespecialmeetingandattheplaceofthespecialmeetingduringthemeeting.
]sharesofClassBcommonstockoutstandingandentitledtovoteatthespecialmeeting.Eachshareof
ClassAcommonstockisentitledtoonevotepershareoneachmatterproperlybroughtbeforethespecialmeetingandeachshareofClassBcommonstockisentitledto10votespershareon
eachmatterproperlybroughtbeforethespecialmeeting.TheClassAcommonstockandClassBcommonstockarevotingasasingleclassontheproposalstobeconsideredatthespecial
meeting.
Thepresenceinpersonorbyproxyoftheholdersofsharesofcommonstockhavingamajorityofthevoteswhichcouldbecastbytheholdersofalloutstandingsharesofcommon
stockentitledtovoteatthespecialmeetingwillconstituteaquorumatthespecialmeeting.Intheeventthataquorumisnotpresentatthespecialmeeting,itisexpectedthatthemeetingwill
beadjournedtosolicitadditionalproxies.
Vote
Required;
Abstentions
and
Broker
Non-Votes
Approvaloftheproposaltoadoptthemergeragreementrequirestheaffirmativevoteoftheholdersofamajorityofthevotingpoweroftheoutstandingsharesofcommonstock
entitledtovoteontheproposal.AdoptionofthemergeragreementbyLinkedInsstockholdersisaconditiontotheclosingofthemerger.
Approvaloftheproposaltoadjournthespecialmeeting,whetherornotaquorumispresent,requirestheaffirmativevoteofamajorityofthevotingpowerofthesharespresentin
personorrepresentedbyproxyatthespecialmeetingandentitledtovoteontheproposal.Approval,bynon-binding,advisoryvote,ofcompensationthatwillormaybecomepayableby
LinkedIntoournamedexecutiveofficersinconnectionwiththemergerrequirestheaffirmativevoteofamajorityofthevotingpowerofthesharespresentinpersonorrepresentedbyproxyat
thespecialmeetingandentitledtovoteontheproposal.
Ifastockholderabstainsfromvoting,thatabstentionwillhavethesameeffectasifthestockholdervotedAGAINSTtheproposaltoadoptthemergeragreement.Forstockholders
whoattendthemeetingorarerepresentedbyproxyandvotetoabstain,theabstentionwillhavethesameeffectasifthestockholdervotedAGAINSTanyproposaltoadjournthespecial
meetingtoalaterdatetosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemerger
24
TableofContents
agreementatthetimeofthespecialmeetingandAGAINSTtheproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamed
executiveofficersinconnectionwiththemerger.
Abrokernon-votegenerallyoccurswhenabank,brokerorothernomineeholdingsharesonyourbehalfdoesnotvoteonaproposalbecausethebank,brokerorothernomineehas
notreceivedyourvotinginstructionsandlacksdiscretionarypowertovotetheshares.Wedonotexpectanybrokernon-votes,atthespecialmeeting,butifthereareany,theywillbecounted
forthepurposeofdeterminingwhetheraquorumispresent.Iftherearebrokernon-votes,eachbrokernon-votewillcountasavoteAGAINSTtheproposaltoadoptthemergeragreement,
butwillhavenoeffecton(1)anyproposaltoadjournthespecialmeetingtoalaterdatetosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthe
specialmeeting;or(2)theproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwith
themerger.
eachoftheproposals.
Shares
Held
by
LinkedIns
Directors
and
Executive
Officers
Asoftherecorddate,ourdirectorsandexecutiveofficersbeneficiallyownedandwereentitledtovote,intheaggregate,[
]%ofthesharesofcommonstock,andapproximately[
]%ofthetotalvotingpowerofthesharesofcommonstock,outstandingontherecorddate.Ourco-founderandChairoftheBoardof
Directors,ReidHoffman,beneficiallyownedandwasentitledtovote,intheaggregate,[
]%ofthesharesofcommonstock,and
approximately[
]%ofthetotalvotingpowerofthesharesofcommonstock,outstandingontherecorddate.Ourdirectorsandexecutiveofficershaveinformedusthattheyintendtovoteall
oftheirsharesofcommonstock(1)
FOR
FOR
theadjournmentofthespecialmeetingtoalaterdateordates,ifnecessaryorappropriate,to
solicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting;and(3)
FOR
thenon-binding,advisoryproposaltoapprove
Voting
of
Proxies
Ifyoursharesareregisteredinyournamewithourtransferagent,ComputershareTrustCompany,N.A.,youmaycauseyoursharestobevotedbyreturningasignedanddatedproxy
cardintheaccompanyingprepaidreplyenvelope,oryoumayvoteinpersonbyballotatthespecialmeeting.Additionally,youmaygrantaproxyelectronicallyovertheinternetorby
telephonebyfollowingtheinstructionsonyourproxycard.Youmusthavetheenclosedproxycardavailable,andfollowtheinstructionsontheproxycard,inordertograntaproxy
electronicallyovertheinternetorbytelephone.Basedonyourproxycardsorinternetandtelephoneproxies,theproxyholderswillvoteyoursharesaccordingtoyourdirections.
Ifyouplantoattendthespecialmeetingandwishtovoteinperson,youwillbegivenaballotatthespecialmeeting.Stockholderswillneedtopresentproofofownershipofsharesof
commonstock,suchasabankorbrokerageaccountstatement,andaformofpersonalidentificationtobeadmittedtothespecialmeeting.Ifyoursharesareregisteredinyourname,youare
encouragedtovotebyproxyevenifyouplantoattendthespecialmeetinginperson.Ifyouattendthespecialmeetingandvoteinpersonbyballot,yourvotewillrevokeanypreviously
submittedproxy.
Allsharesrepresentedbyproperlysignedanddatedproxiesreceivedintimeforthespecialmeetingwillbevotedatthespecialmeetinginaccordancewiththeinstructionsofthe
stockholder.Properlysignedanddatedproxiesthatdonotcontainvotinginstructionswillbevoted(1)
FOR
adoptionofthemergeragreement;(2)
FOR
theadjournmentofthespecial
meetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficient
25
TableofContents
votestoadoptthemergeragreementatthetimeofthespecialmeeting;and(3)
FOR
theproposaltoapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayable
byLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Ifyoursharesareheldinstreetnamethroughabank,brokerorothernominee,youmayvotethroughyourbank,brokerorothernomineebycompletingandreturningthevoting
instructionformprovidedbyyourbank,brokerorothernomineeorattendingthespecialmeetingandvotinginpersonwithalegalproxyfromyourbank,brokerorothernomineegivingyou
therighttovoteyoursharesatthespecialmeeting.Ifavailable,youmayvoteovertheinternetortelephonethroughyourbank,brokerorothernomineebyfollowingtheinstructionsonthe
votinginstructionformprovidedbyyourbank,brokerorothernominee.Ifyoudonotreturnyourbanks,brokersorothernomineesvotinginstructionform,donotvoteovertheinternetor
bytelephonethroughyourbank,brokerorothernominee,ifpossible,ordonotattendthespecialmeetingandvoteinpersonwithalegalproxyfromyourbank,brokerorothernominee,it
willhavethesameeffectasifyouvotedAGAINSTtheproposaltoadoptthemergeragreementbutwillnothaveanyeffectontheproposaltoadjournthespecialmeeting,ifnecessaryor
appropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeetingortheproposaltoapprove,bynon-binding,advisoryvote,
Revocability
of
Proxies
Ifyouareastockholderofrecord,youmaychangeyourvoteorrevokeyourproxyatanytimebeforeitisvotedatthespecialmeetingby:
signinganotherproxycardwithalaterdateandreturningittouspriortothespecialmeeting;
submittinganewproxyelectronicallyovertheinternetorbytelephoneafterthedateoftheearliersubmittedproxy;
deliveringawrittennoticeofrevocationtoourCorporateSecretary;or
attendingthespecialmeetingandvotinginpersonbyballot.
Ifyouhavesubmittedaproxy,yourappearanceatthespecialmeeting,intheabsenceofvotinginpersonorsubmittinganadditionalproxyorrevocation,willnothavetheeffectof
revokingyourpriorproxy.
voteinpersonatthespecialmeetingifyouobtainalegalproxyfromyourbank,brokerorothernomineegivingyoutherighttovoteyoursharesatthespecialmeeting.
Anyadjournment,postponementorotherdelayofthespecialmeeting,includingforthepurposeofsolicitingadditionalproxies,willallowLinkedInstockholderswhohavealready
sentintheirproxiestorevokethematanytimepriortotheiruseatthespecialmeetingasadjourned,postponedordelayed.
The
LinkedIn
Boards
Recommendation
TheLinkedInBoard,afterconsideringvariousfactorsdescribedinthesectionofthisproxystatementcaptionedTheMergerRecommendationoftheLinkedInBoardandReasons
fortheMerger,hasunanimously(1)determinedthatthemergeragreement,themergerandtheothertransactionscontemplatedbythemergeragreement,onandsubjecttotheconditionsset
forththerein,arefairto,advisableandinthebestinterestsofLinkedInanditsstockholders;and(2)adoptedandapprovedthemergeragreement,themergerandtheothertransactions
contemplatedbythemergeragreementinallrespects.TheLinkedInBoardunanimouslyrecommendsthatyouvote(1)
FOR
FOR
the
adjournmentofthespecialmeetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthe
specialmeeting;and(3)
FOR
theproposaltoapprove,bynon-binding,
26
TableofContents
advisoryvote,compensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.
Adjournment
Inadditiontotheproposaltoadoptthemergeragreementandtheproposaltoapprove,bynon-bindingadvisoryvote,compensationthatwillormaybecomepayablebyLinkedInto
ournamedexecutiveofficersinconnectionwiththemerger,LinkedInstockholdersarealsobeingaskedtoapprovetheproposaltoadjournthespecialmeetingtoalaterdateordates,if
necessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeofthespecialmeeting.Thiswillenabletheadjournmentofthe
specialmeetingforthepurposeof,amongotherthings,solicitingadditionalvotesinfavorofthemergerproposaliftherearenotsufficientvotesatthetimeofthespecialmeetingtoapprovethe
mergerproposal.Ifaquorumisnotpresent,thechairofthespecialmeetingmayadjournthespecialmeeting.Inaddition,thespecialmeetingcouldbepostponedbeforeitcommences,subject
tothetermsofthemergeragreement.Ifthespecialmeetingisadjournedorpostponed,stockholderswhohavealreadysubmittedtheirproxieswillbeabletorevokethematanytimepriortothe
finalvoteontheproposals.
Solicitation
of
Proxies
TheexpenseofsolicitingproxieswillbebornebyLinkedIn.WehaveretainedInnisfreeM&AIncorporated,aprofessionalproxysolicitationfirm,tosolicitproxiesinconnectionwith
thespecialmeetingatacostofapproximately$20,000plusexpenses.WewillalsoindemnifyInnisfreeM&AIncorporatedagainstlossesarisingoutofitsprovisionsoftheseservicesonour
behalf.Inaddition,wemayreimbursebanks,brokersandothernomineesrepresentingbeneficialownersofsharesfortheirexpensesinforwardingsolicitingmaterialstosuchbeneficial
owners.Proxiesmayalsobesolicitedbyourdirectors,officersandemployees,personallyorbytelephone,email,faxorovertheinternet.Noadditionalcompensationwillbepaidforsuch
services.
Anticipated
Date
of
Completion
of
the
Merger
Wecurrentlyexpecttocompletethemergerthiscalendaryear.However,theexacttimingofcompletionofthemerger,ifatall,cannotbepredictedbecausethemergerissubjectto
theclosingconditionsspecifiedinthemergeragreement,manyofwhichareoutsideofourcontrol.
Appraisal
Rights
Ifthemergerisconsummated,LinkedInstockholderswhodonotvoteinfavoroftheadoptionofthemergeragreementandwhoproperlyperfectappraisaloftheirshareswillbe
entitledtoappraisalrightsinconnectionwiththemergerunderSection262oftheDGCL.Thismeansthatsuchholdersofsharesofcommonstockareentitledtohavetheirsharesappraisedby
theDelawareCourtofChanceryandtoreceivepaymentincashofthefairvalueoftheirsharesofcommonstock,exclusiveofanyelementsofvaluearisingfromtheaccomplishmentor
expectationofthemerger,togetherwithinteresttobepaidontheamountdeterminedtobefairvalue,ifany,asdeterminedbythecourt,solongastheycomplywiththeproceduresestablished
bySection262oftheDGCL.Duetothecomplexityoftheappraisalprocess,LinkedInstockholderswhowishtoseekappraisaloftheirsharesareencouragedtoseektheadviceoflegalcounsel
withrespecttotheexerciseofappraisalrights.
Stockholders
considering
seeking
appraisal
should
be
aware
that
the
fair
value
of
their
shares
as
determined
pursuant
to
Section
262
of
the
DGCL
could
be
more
than,
the
same
as
or
less
than
the
value
of
the
consideration
that
they
would
receive
pursuant
to
the
merger
agreement
if
they
did
not
seek
appraisal
of
their
shares.
Toexerciseappraisalrights,thestockholderofrecordmust(1)submitawrittendemandforappraisaltoLinkedInbeforethevoteistakenontheadoptionofthemergeragreement;
(2)notsubmitaproxyorotherwisevoteinfavoroftheproposaltoadoptthemergeragreement;and(3)continuetoholdthesubjectsharesofrecordthroughtheeffectivetimeofthemerger.
ThefailuretofollowexactlytheproceduresspecifiedundertheDGCLwillresultinthelossofappraisalrights.TheDGCLrequirementsforexercisingappraisalrightsaredescribedinfurther
detailinthisproxystatement,andtherelevantsectionoftheDGCLregardingappraisalrightsisreproducedandattachedasAnnexCtothisproxystatement.Ifyouholdyoursharesof
commonstockthroughabank,brokeragefirmorothernomineeandyouwishtoexerciseappraisalrights,youshouldconsultwithyourbank,brokeragefirmorothernomineetodeterminethe
appropriateproceduresforthemakingofademandforappraisalbysuchbank,brokeragefirmornominee.
Other
Matters
Atthistime,weknowofnoothermatterstobevotedonatthespecialmeeting.Ifanyothermattersproperlycomebeforethespecialmeeting,yoursharesofcommonstockwillbe
votedinaccordancewiththediscretionoftheappointedproxyholders.
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Important
Notice
Regarding
the
Availability
of
Proxy
Materials
for
the
Stockholder
Meeting
to
be
Held
on
[
],
2016
Thisproxystatementisavailableathttps://investors.linkedin.com/results-and-financials/
Householding
of
Special
Meeting
Materials
WehaveadoptedaprocedureapprovedbytheSECcalledhouseholding.Underthisprocedure,stockholderswhohavethesameaddressandlastnamewillreceiveonlyonecopyof
thisproxystatementunlessoneormoreofthesestockholdersnotifiesusthattheywishtocontinuereceivingindividualcopies.Thisprocedurereducesprintingcosts,postagefeesandtheuseof
naturalresources.Eachstockholderwhoparticipatesinhouseholdingwillcontinuetobeabletoaccessorreceiveaseparateproxycard.
Ifyouwishtoreceiveaseparatesetofourdisclosuredocumentsatthistime,contactBroadridgeFinancialSolutions,Inc.bytelephoneat866-540-7095(insideoroutsideoftheU.S.).
Ifyouwishtoreceiveaseparatesetofourdisclosuredocumentsinthefuture,youmaycontactInvestorRelations,LinkedInCorporation,2029StierlinCourt,MountainView,CA94043.You
mayalsosendamessagetoourInvestorRelationsdepartmentbyemailatinvestors@linkedin.comoronourwebsiteatinvestors.linkedin.com
underContact
Us
(https:
//investors.linkedin.com/contact-us/default.aspx).
Ifyouareastockholderwhohasmultipleaccountsinyournameoryoushareanaddresswithotherstockholdersandwouldliketoreceiveasinglesetofourdisclosuredocumentsfor
yourhousehold,youmaynotifyyourbroker,ifyoursharesareheldinabrokerageaccount,orifyouholdregisteredshares,bynotifyingeitherLinkedInInvestorRelationsorBroadridgeusing
thecontactmethodsabove.
Questions
and
Additional
Information
Ifyouhaveanyquestionsconcerningthemerger,thespecialmeetingortheaccompanyingproxystatement,wouldlikeadditionalcopiesoftheaccompanyingproxystatementorneed
helpvotingyoursharesofcommonstock,pleasecontactourproxysolicitor:
NewYork,NY10022
or
28
TableofContents
THE
MERGER
Thisdiscussionofthemergerisqualifiedinitsentiretybyreferencetothemergeragreement,whichisattachedasAnnexAtothisproxystatementandincorporatedintothisproxy
statementbyreference.Youshouldreadtheentiremergeragreementcarefullyasitisthelegaldocumentthatgovernsthemerger.
Parties
Involved
in
the
Merger
LinkedIn Corporation
2029StierlinCourt
MountainView,CA94043
(650)687-3600
LinkedInistheworldslargestprofessionalnetworkontheInternetwithover433millionmembersinover200countriesandterritoriesasofthedateofthisproxystatement.Members
useourplatformtostayconnectedandinformed,advancetheircareerandworksmarter.
LinkedInsClassAcommonstockislistedontheNYSEunderthesymbolLNKD.
Microsoft Corporation
OneMicrosoftWay
Redmond,WA95054
(425)882-8080
Microsoftisatechnologycompanywhosemissionistoempowereverypersonandeveryorganizationontheplanettoachievemore.Itsstrategyistobuildbest-in-classplatformsand
productivityservicesforamobile-first,cloud-firstworld.Foundedin1975,Microsoftoperatesworldwideandhasofficesinmorethan100countries.Microsoftdevelops,licenses,andsupports
awiderangeofsoftwareproducts,services,anddevicesthatdelivernewopportunities,greaterconvenience,andenhancedvaluetopeopleslives.Microsoftoffersanarrayofservices,
includingcloud-basedservices,toconsumersandbusinesses.Microsoftdesigns,manufactures,andsellsdevicesthatintegratewithitscloud-basedservices,andMicrosoftdeliversrelevant
onlineadvertisingtoaglobalaudience.
MicrosoftscommonstockislistedonNasdaqunderthesymbolMSFT.
Liberty Merger Sub Inc.

c/oMicrosoftCorporation
OneMicrosoftWay
Redmond,WA95054
(425)882-8080
MergerSubisawhollyowneddirectsubsidiaryofMicrosoftandwasformedonJune10,2016,solelyforthepurposeofengaginginthetransactionscontemplatedbythemerger
agreementandhasnotengagedinanybusinessactivitiesotherthaninconnectionwiththetransactionscontemplatedbythemergeragreement.
Effect
of
the
Merger
Uponthetermsandsubjecttotheconditionsofthemergeragreement,MergerSubwillmergewithandintoLinkedIn,withLinkedIncontinuingasthesurvivingcorporation.Asa
resultofthemerger,LinkedInwillbecomeawhollyownedsubsidiaryofMicrosoft,andourClassAcommonstockwillnolongerbepubliclytradedandwillbedelistedfromtheNYSE.In
addition,ourClassAcommonstockwillbederegisteredundertheExchangeAct,andwewillnolongerfileperiodicreportswiththeSEC.Ifthemergeriscompleted,youwillnotownany
sharesofthecapitalstockofthesurvivingcorporation.
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TableofContents
TheeffectivetimeofthemergerwilloccuruponthefilingofacertificateofmergerwithandacceptanceofsuchcertificatebytheSecretaryofStateoftheStateofDelaware(orat
suchlatertimeaswe,MicrosoftandMergerSubmayagreeandspecifyinsuchcertificateofmerger).
Effect
on
LinkedIn
if
the
Merger
is
Not
Completed
sharesofcommonstock.Instead,LinkedInwillremainanindependentpubliccompany,ourClassAcommonstockwillcontinuetobelistedandtradedontheNYSEandregisteredunderthe
ExchangeActandwewillcontinuetofileperiodicreportswiththeSEC.Inaddition,ifthemergerisnotcompleted,weexpectthatourmanagementwilloperatethebusinessinamanner
similartothatinwhichitisbeingoperatedtodayandthatLinkedInstockholderswillcontinuetobesubjecttothesamerisksandopportunitiestowhichtheyarecurrentlysubject,including
risksrelatedtothehighlycompetitiveindustryinwhichLinkedInoperatesandadverseeconomicconditions.
Furthermore,ifthemergerisnotcompleted,anddependingonthecircumstancesthatcausedthemergernottobecompleted,thepriceofourClassAcommonstockmaydecline
significantly.Ifthatweretooccur,itisuncertainwhen,ifever,thepriceofourClassAcommonstockwouldreturntothepriceatwhichittradesasofthedateofthisproxystatement.
Accordingly,ifthemergerisnotcompleted,therecanbenoassuranceastotheeffectoftheserisksandopportunitiesonthefuturevalueofyoursharesofcommonstock.Ifthe
mergerisnotcompleted,theLinkedInBoardwillcontinuetoevaluateandreview,amongotherthings,LinkedInsbusiness,operations,strategicdirectionandcapitalization,andwillmake
whateverchangesitdeemsappropriate.IfthemergeragreementisnotadoptedbyLinkedInstockholdersorifthemergerisnotcompletedforanyotherreason,LinkedInsbusiness,prospects
orresultsofoperationmaybeadverselyimpacted.
Underspecifiedcircumstances,LinkedInwillberequiredtopayMicrosoftaterminationfeeof$725millionupontheterminationofthemergeragreement.Formoreinformation,see
thesectionofthisproxystatementcaptionedTheMergerAgreementTerminationFee.
Merger
Consideration
Inthemerger,eachoutstandingshareofcommonstock(otherthansharesheldby(1)LinkedInastreasurystock;(2)Microsoft,MergerSubortheirrespectivesubsidiaries;and
(3)LinkedInstockholderswhohaveproperlyandvalidlyexercisedandperfectedtheirappraisalrightsunderDelawarelawwithrespecttosuchshares)willbecancelledandconvertedintothe
righttoreceivethepersharemergerconsideration.
Afterthemergeriscompleted,youwillhavetherighttoreceivethepersharemergerconsideration,asdescribedinthesectionofthisproxystatementcaptionedTheMerger
AgreementConversionofShares,butyouwillnolongerhaveanyrightsasastockholder(exceptthatLinkedInstockholderswhoproperlyexerciseanddonotvalidlywithdrawor
subsequentlylosetheirappraisalrightswillhavetherighttoreceiveapaymentforthefairvalueoftheirsharesasdeterminedpursuanttoanappraisalproceedingascontemplatedby
Delawarelaw,asdescribedinthesectionofthisproxystatementcaptionedAppraisalRights).
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TableofContents
Background
of
the
Merger
LinkedInistheworldslargestprofessionalnetworkontheinternetanditsmembersuseLinkedInsplatformtostayconnectedandinformed,advancetheircareerandworksmarter.
ReidHoffman,theChairoftheLinkedInBoardandaco-founderofLinkedIn,hashadalong-termvisionforLinkedIntocreateeconomicopportunityforeveryprofessionalintheworld
sinceitsfoundingin2002.Inconnectionwithitsinitialpublicofferingin2011,LinkedIncreatedadualclasscommonstockstructure,whichprovidedLinkedInsfounders,pre-initialpublic
offeringinvestors,executivesandemployeeswithinfluenceovermattersrequiringstockholderapproval.
TheLinkedInBoardregularlyevaluatesLinkedInsstrategicdirectionandongoingbusinessplanswithaviewtowardexecutingonLinkedInsvisionandmission,strengtheningits
corebusinessesandenhancingstockholdervalue.Aspartofthisevaluation,theLinkedInBoardhasfromtimetotimeconsideredavarietyofstrategicalternatives,including(1)the
continuationofLinkedInscurrentbusinessplanasastandaloneentity;(2)modificationstoLinkedInsbusinessplanandstrategy;and(3)potentialexpansionopportunitiesintonewbusiness
linesthroughacquisitionsandcombinationsofLinkedInwithotherbusinesses.
OnFebruary16,2016,JeffWeiner,LinkedInschiefexecutiveofficer,metwithSatyaNadella,Microsoftschiefexecutiveofficer,todiscusstheongoingcommercialrelationship
betweenthecompaniesandwaystoenhanceit.Atthismeeting,Messrs.WeinerandNadelladiscussedwaysinwhichthetwocompaniescouldworktogethermorecloselyand,inthecontextof
thatdiscussion,amongotherthings,theconceptofabusinesscombinationwasraised.
OnMarch10,2016,Mr.Weinermetwithanexecutiveofacompany,whichwerefertoasPartyA,attheexecutivesrequest.Duringthemeeting,theexecutiveofPartyAstatedto
Mr.WeinerthatheandthechiefexecutiveofficerofPartyAhadpreviouslydiscussedwaysinwhichPartyAcouldenhanceitsbusinessrelationshipwithLinkedIn,aswellasapotential
acquisitionofLinkedInbyPartyA.
OnMarch14,2016,atafunctionattendedbybothMr.WeinerandthechiefexecutiveofficerofPartyA,Mr.WeinerspokewiththechiefexecutiveofficerofPartyA,whorequested
thatthetwospeakfurtheraboutpotentialstrategicopportunitiesforLinkedInandPartyA.
AlsoonMarch14,2016,Mr.Hoffmanheldapreviouslyscheduledmeetingwithaseniorexecutiveofacompany,whichwerefertoasPartyB.LateronMarch14,2016,thesenior
executiveofPartyBcontactedeachofMessrs.HoffmanandWeinerseparatelytosetupanadditionalmeetinginthenearfuturetoexploreapotentialbusinesscombinationtransaction.
OnMarch15,2016,Mr.WeinercalledMr.NadellatoinquireastowhetherMicrosoftwasinterestedindiscussingfurtherapotentialacquisitionofLinkedIn,andexplainedthat,
although
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TableofContents
LinkedInwasnotforsale,othershadexpressedinterestinanacquisition.Mr.NadellarespondedthathewoulddiscussthematterfurtherwithMicrosoftsboardofdirectors.
OnMarch16,2016,attherequestofthechiefexecutiveofficerofPartyA,Mr.WeinermetwiththechiefexecutiveofficerofPartyA,whoinformedMr.WeinerthatPartyAhad
engagedafinancialadvisorforpurposesofanalyzingapotentialacquisitionofLinkedInbyPartyAandthatPartyAwasinterestedinpursuinganacquisition.Thechiefexecutiveofficerof
PartyAalsodiscussedwithMr.WeinerthecurrentbusinessofPartyAandthepotentialbenefitsofacombinationofPartyAandLinkedIn.
AlsoonMarch16,2016,Mr.NadellaspokewithMr.Weiner,atwhichtimeMr.NadellaconfirmedthatMicrosoftwasinterestedinpursuinganacquisitionofLinkedInandthat
Microsofthadbegunworkontheproject.
OnMarch18,2016,theLinkedInBoardmet,withrepresentativesofLinkedInmanagementandWilsonSonsiniGoodrich&Rosati,ProfessionalCorporation,outsidelegalcounselto
LinkedIn,whichwerefertoasWilsonSonsini,inattendance.ThemembersoftheLinkedInBoarddiscussedtherecentindicationsofinterestwithrespecttoapotentialacquisitionof
LinkedInfromPartyA,PartyBandMicrosoft.ThemembersoftheLinkedInBoardalsodiscussedcontactingothercompaniesthatmayhaveaninterestinacquiringLinkedIn.The
representativesofWilsonSonsinidiscussedwiththemembersoftheLinkedInBoardtheirfiduciarydutiesinthecontextofapotentialsaleofLinkedIn.TherepresentativesofWilsonSonsini
alsodiscussedwiththemembersoftheLinkedInBoardthefiduciaryandotherconsiderationsrelatedtothefactthatMr.Hoffman,throughhisownershipofClassBcommonstock,controlled
morethanamajorityoftheoutstandingvotingpowerofLinkedInandthereforewouldbeabletoapproveorpreventanypotentialtransaction.Mr.Hoffmaninformedtheothermembersofthe
LinkedInBoardthat,shouldsuchatransactionproceed,heexpectedtobetreatedthesameastheotherstockholdersofLinkedInandwouldnotexpecttoreceive,orseektoreceive,anyspecial
ordifferentconsideration.InlightofthepotentiallysignificantworkloadinvolvedinexploringstrategicalternativesandthepossibilitythatinconnectionwithsuchexplorationLinkedIn
managementmightneedfeedbackanddirectiononrelativelyshortnotice,theLinkedInBoardcreatedatransactionscommittee,whichwerefertoastheTransactionsCommittee.The
TransactionsCommitteewasauthorizedtoadviseanddirectLinkedInmanagementwithrespecttotheexploration,considerationandnegotiationofstrategicalternativetransactions,tofacilitate
negotiation,andtoreporttotheLinkedInBoardonaregularbasis.TheLinkedInBoardretainedauthoritytoapproveanytransaction.TheLinkedInBoardappointedA.GeorgeSkipBattle,
MichaelMoritzandStanleyMeresmantotheTransactionsCommittee.TheLinkedInBoardalsoauthorizedtheCompanytoengageQatalystPartners,ontermsacceptabletotheTransactions
Committee,toassistLinkedInwithrespecttoitsexplorationofstrategicalternativetransactions.
LateronMarch18,2016,Mr.WeinerattendedameetingpreviouslyscheduledbyQatalystPartners.Duringthemeeting,Mr.WeinerspokewitharepresentativeofQatalystPartners
aboutpotentiallyengagingQatalystPartnerstoactasLinkedInsfinancialadvisorforpurposesofassistingwiththeexplorationofstrategicalternativetransactions.
OnMarch21,2016,thechiefexecutiveofficerofPartyAemailedMr.Weinertoinquireaboutmeetingtofurtherdiscussapotentialacquisition.
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TableofContents
OnMarch22,2016,Mr.WeineremailedthechiefexecutiveofficerofPartyAandsaid,inresponsetoPartyAsinquiry,thatLinkedInwouldbewillingtomeettofurtherdiscussa
potentialacquisition.Mr.WeineralsoemailedwithanexecutiveofPartyBregardingthepossibilityofatransactionwithLinkedInandtosetupfurthermeetingsonthetopic.Additionally,
Mr.WeineremailedMr.Nadellatosetupacalltofurtherdiscussapotentialacquisition.
LateronMarch22,2016,theTransactionsCommitteehelditsfirstmeeting,withMr.HoffmanandrepresentativesofLinkedInmanagement,QatalystPartnersandWilsonSonsini,
respectively,inattendance.TheTransactionsCommitteediscussedthecurrentstatusofdiscussionswiththirdpartiesregardingapotentialacquisitionofLinkedIn.TheTransactionsCommittee
alsoreviewedotherpartiesthatmighthaveaninterestinatransactionwithLinkedIn,basedontheTransactionsCommitteesassessmentofthelikelihoodthesepartieswouldbeinterestedin
makingacompellingofferforLinkedInthatwascapableofbeingcompleted,and,amongotherthings,authorizedMr.WeinerandQatalystPartnerstocontactacompany,whichwerefertoas
PartyC,regardingapotentialacquisitionofLinkedIn.TheTransactionsCommitteeapprovedtheengagementbyLinkedInofQatalystPartnersasafinancialadvisor.Laterthatday,
Mr.WeinerspokewithMr.Nadellaaboutameetingtodiscussapotentialacquisition.
OnMarch25,2016,Mr.WeinerspoketothechiefexecutiveofficerofPartyCregardingapotentialacquisitionofLinkedIn.
AlsoonMarch25,2016,Messrs.HoffmanandWeinermetwiththechiefexecutiveofficerofPartyAanddiscussedaspectsofapotentialtransactionwithLinkedIn,including
potentialbenefitsofanacquisition.ThechiefexecutiveofficerofPartyAstatedthatPartyAwouldlikeMr.WeinertoplayaroleatthecombinedcompanyifPartyAacquiredLinkedIn.The
chiefexecutiveofficerofPartyAandMr.HoffmanalsobrieflydiscussedMr.Hoffmanspotentialinvolvementwiththebusinessfollowingatransaction,including,amongotherthings,his
possiblyservingonPartyAsboardofdirectors.
OnMarch29,2016,representativesofQatalystPartnersdiscussedapotentialtransactionwitharepresentativeofthecorporatedevelopmentdepartmentandanotherseniorexecutive
ofPartyC.
AlsoonMarch29,2016,Messrs.HoffmanandWeinermetwiththechiefexecutiveofficerandanotherseniorexecutiveofPartyBtodiscuss,amongotherthings,potentialbenefitsof
anacquisition.
OnMarch31,2016,Messrs.HoffmanandWeinerandSteveSordello,LinkedInsseniorvicepresidentandchieffinancialofficer,metwithMr.Nadellaandotherexecutivesof
Microsofttodiscuss,amongotherthings,potentialbenefitsofanacquisition.
OnApril1,2016,theTransactionsCommitteemet,withMr.HoffmanandrepresentativesofLinkedInmanagement,QatalystPartnersandWilsonSonsini,respectively,inattendance.
Mr.WeinerupdatedtheTransactionsCommitteeregardingthestatusoftherecentdiscussionsconcerningapotentialacquisitionofLinkedIn,aswellasotherpartieswhomighthaveinterestin
anacquisitionofLinkedIn.Atthismeeting,Mr.HoffmaninformedtheTransactionsCommitteethathehadameetingscheduledwiththechiefexecutiveofficerofanothercompany,whichwe
refertoasPartyD,who
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TableofContents
mighthaveaninterestinatransactionwithLinkedIninthenearfuture.TheTransactionsCommitteeauthorizedMr.HoffmantogaugePartyDsinterestinatransaction.
LateronApril1,2016,representativesofWilsonSonsiniprovidedPartyAwithadraftofaconfidentialityagreement.TheconfidentialityagreementwassignedonApril6,2016.
OnApril2,2016,representativesofthecorporatedevelopmentdepartmentofPartyCcontactedrepresentativesofQatalystPartnersandinformedthemthatPartyCwasnotinterested
inpursuinganacquisitionofLinkedIn,butremainedinterestedinpotentialalternativetransactionsoracommercialpartnershipwithLinkedIn.
OnApril4,2016,aseniorexecutiveofPartyBcontactedMr.WeinerandindicatedthatPartyBwasinterestedinexploringapotentialacquisitionofLinkedIn,andthatrepresentatives
fromtheircorporatedevelopmentteamwouldcontactQatalystPartners.
OnApril5,2016,representativesofWilsonSonsiniprovidedPartyBwithadraftofaconfidentialityagreement.TheconfidentialityagreementwassignedonApril11,2016.
OnApril6,2016,Messrs.WeinerandSordelloandrepresentativesofQatalystPartnersheldaduediligencemeetingwithmembersofthemanagementteamofPartyAandtheir
advisors,includingthechiefexecutiveofficerandchieffinancialofficerofPartyA.
AlsoonApril6,2016,representativesofWilsonSonsiniprovidedMicrosoftwithadraftofaconfidentialityagreement.TheconfidentialityagreementwassignedonApril11,2016.
OnApril7,2016,Mr.HoffmanattendedapreviouslyscheduledmeetingwiththechiefexecutiveofficerofPartyD.Duringthecourseofthismeeting,Mr.Hoffmandescribedthat
LinkedInhadreceivedinterestinapotentialacquisition.ThechiefexecutiveofficerofPartyDinformedMr.HoffmanthatPartyDwasnotinterestedinexploringabusinesscombination
transactionwithLinkedInatthattime.
OnApril11,2016,LinkedInmanagement,including,amongothers,Mr.SordelloandMikeCallahan,LinkedInsseniorvicepresident,generalcounselandsecretary,and
representativesofQatalystPartnersheldaduediligencecallwithrepresentativesofMicrosoftsmanagement,corporatedevelopmentandlegalteamsandrepresentativesofSimpsonThacher&
BartlettLLP,outsidelegalcounseltoMicrosoft,whichwerefertoasSimpsonThacher.
OnApril12,2016,LinkedInmanagement,includingMr.Sordello,andrepresentativesofQatalystPartnersheldaduediligencecallwithrepresentativesofPartyAmanagementand
itsadvisors.
OnApril13,2016,LinkedInmanagement,includingMessrs.Weiner,SordelloandCallahan,andrepresentativesofQatalystPartners,heldaduediligencevideocallwith
representativesofMicrosoft,includingMr.Nadella,andrepresentativesofSimpsonThacherandMorganStanley&Co.LLC,financialadvisortoMicrosoft,whichwerefertoasMorgan
Stanley.
OnApril14,2016,representativesofLinkedInmanagement,includingMessrs.Weiner,SordelloandCallahan,andrepresentativesofQatalystPartnersheldaduediligencemeeting
withexecutives,representativesandadvisorsofPartyB.
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OnApril18,2016,theTransactionsCommitteemet,withMr.HoffmanandrepresentativesofLinkedInmanagement,QatalystPartnersandWilsonSonsini,respectively,in
attendance.Mr.WeinerupdatedtheTransactionsCommitteeonthestatusofdiscussions.TherepresentativesofQatalystPartnersinformedthemembersoftheTransactionsCommitteethat
PartyChadinformedQatalystPartnersthatPartyCwasnotinterestedinpursuinganacquisitionofLinkedInatthattimeandhadproposedanalternativetransaction.Mr.Hoffmaninformedthe
membersoftheTransactionsCommitteethatPartyDwasnotinterestedinpursuinganacquisitionofLinkedInatthattime.ThemembersoftheTransactionsCommitteethendiscussedthe
potentialengagementofAllen&CompanyLLC,whichwerefertoasAllen,toserveasanadditionalfinancialadvisortoLinkedInbasedonAllensrelevantindustryexperience,contacts
andfamiliaritywithLinkedInanditsbusiness.Afterdiscussion,theTransactionsCommitteeauthorizedLinkedInmanagementtoproceedwiththeengagementofAllen,onthetermsdiscussed
withtheTransactionsCommittee.
OnApril19,2016,Mr.SordelloandrepresentativesofQatalystPartnersconductedaduediligencecallwithrepresentativesofMicrosoftandMorganStanley.
OnApril20,2016,aseniorrepresentativeofPartyBcontactedMr.HoffmantodiscussthestatusofPartyBsinterestinanacquisitionofLinkedInandthepotentialbenefitsforParty
BassociatedwithanacquisitionofLinkedIn.
OnApril25,2016,Messrs.HoffmanandWeinereachhadaconversationwiththechiefexecutiveofficerofPartyAregardingPartyAsinterestinatransaction.Thechiefexecutive
officerofPartyAstatedthatPartyAwaspreparingaproposaltoacquireLinkedIn.
LateronApril25,2016,PartyAsubmittedanon-bindingindicationofinteresttoacquireLinkedInforapricebetween$160to$165pershareofLinkedIncommonstock,withsuch
considerationtobeamixofcashandPartyAcommonstock,withupto50%ofsuchconsiderationbeingincash.PartyAsindicationofinterestalsorequestedthatLinkedInenterintoan
exclusivityagreement.
OnApril26,2016,theTransactionsCommitteemet,withrepresentativesofLinkedInmanagement,QatalystPartnersandWilsonSonsini,respectively,inattendance.TheTransactions
CommitteediscussedtheproposalfromPartyA,aswellasthestatusofdiscussionswithMicrosoftandPartyB.TheTransactionsCommitteediscussedtheprocessforobtainingadditional
indicationsofinterest.
OnApril27,2016,representativesofQatalystPartnershadaconversationwithrepresentativesofPartyBregardingthestatusofPartyBsinterestinanacquisitionofLinkedIn.
OnApril29,2016,Mr.WeinerspokewithMr.NadellaandreviewedthestatusofdiscussionswithMicrosoftregardinganacquisitionofLinkedIn.
OnMay3,2016,representativesofLinkedInmanagement,includingMr.Weiner,spokewithrepresentativesofPartyBmanagementregardingapotentialtransaction.Laterthatday,
PartyB
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informedLinkedInthatitwasnolongerinterestedinpursuinganacquisitionofLinkedIn,butremainedinterestedinpartneringwithLinkedIn.
OnMay4,2016,Microsoftsubmittedanon-bindingindicationofinteresttoacquireLinkedInatapriceof$160incashpershareofLinkedIncommonstock.Microsoftalsostatedthat
itwaswillingtoconsiderincludingMicrosoftcommonstockaspartofsuchconsideration.MicrosoftsindicationofinterestalsorequestedthatLinkedInenterintoanexclusivityagreement.
OnMay6,2016,theLinkedInBoardmet,withrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,inattendance.LinkedIn
managementinformedtheLinkedInBoardthatPartyB,PartyCandPartyDwerenotinterestedinpursuingatransaction,butthatPartyBremainedinterestedinpursuingacommercial
partnership.ThemembersoftheLinkedInBoardthendiscussedthetermsoftheproposalsthathadbeensubmittedbyMicrosoftandPartyA.TherepresentativesofQatalystPartnersreviewed
withthemembersoftheLinkedInBoardafinancialpresentation,which(1)addressedvariousperspectivesonLinkedInsvaluationonastandalonebasis;and(2)analyzedapotential
acquisitionofLinkedIn.TherepresentativesofWilsonSonsinidiscussedthefiduciarydutiesoftheLinkedInBoard.ThemembersoftheLinkedInBoardthenauthorizedtheTransactions
Committeetocontinuetooverseetheprocessofanalyzingpossiblestrategicalternativetransactions,includingtheproposalssubmittedbyMicrosoftandPartyA.
ImmediatelyfollowingthemeetingoftheLinkedInBoardonMay6,2016,theTransactionsCommitteemet,withMr.HoffmanandrepresentativesofLinkedInmanagement,Qatalyst
Partners,AllenandWilsonSonsini,respectively,inattendance.FollowingfurtherdiscussionoftheproposalsthathadbeensubmittedbyMicrosoftandPartyA,theTransactionsCommittee
instructedtherepresentativesofQatalystPartnerstocommunicatetoeachofMicrosoftandPartyAthatLinkedInwaspreparedtoenterexclusivenegotiationsatapriceof$200pershareof
LinkedIncommonstock.Laterthatday,therepresentativesofQatalystPartnerscommunicatedthispositiontoeachofMicrosoftandPartyA.NeitherMicrosoftnorPartyAchosetopursue
exclusivityatthatprice.
OnMay9,2016,Mr.HoffmanandBillGates,theco-founderofMicrosoftandmemberofitsboardofdirectors,heldameeting,whichhadbeenscheduledbeforeapotential
transactionbetweenthepartieshadbeguntobediscussed.Attheirmeeting,theydiscussedtheirperspectivesregardingindustrytrendsandthestrategyofLinkedIn.Thepartiesalsodiscussed
thebusinessrationaleandpotentialbenefitstoMicrosoftofpotentiallyacquiringLinkedIn.Mr.GatesandMr.HoffmanbrieflydiscussedMr.Hoffmanspotentialinvolvementwiththe
businessfollowingatransaction,including,amongotherthings,hispossiblyservingonMicrosoftsboardofdirectors,butthepartiesdidnotpursuethatconversation,insteadfocusingontheir
respectivevisionsforacombinedcompany.
LateronMay9,2016,Mr.HoffmanthenmetwithMr.Nadella,andtheyaswelldiscussedthebusinessrationaleandpotentialbenefitstoMicrosoftofpotentiallyacquiringLinkedIn.
TheyalsobrieflydiscussedMr.Hoffmanspotentialinvolvementwiththebusinessfollowingatransactionbutchieflyfocusedontheirsharedvisionforthecombinationofthetwocompanies.
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AlsoonMay9,2016,PartyAsubmittedarevisedproposaltoLinkedInprovidingforanacquisitionofLinkedInfor$171pershareofLinkedIncommonstock,withhalfofthe
considerationincashandhalfinPartyAcommonstock.
OnMay10,2016,representativesofQatalystPartnersspokewithrepresentativesofPartyAregardingtheproposalreceivedonMay9,2016.
OnMay11,2016,MicrosoftsubmittedarevisedproposaltoacquireLinkedIn,whichprovidedforanacquisitionofLinkedInfor$172incashpershareofLinkedIncommonstock.
MicrosoftnotedthatitremainedflexiblewithrespecttothepossibilityofincludingMicrosoftcommonstockintheconsideration,ifrequestedbyLinkedIn.Theproposalagainrequestedthat
LinkedInenterintoanexclusivityagreement.
LateronMay11,2016,theTransactionsCommitteemet,withrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,inattendance.The
TransactionsCommitteediscussedwiththerepresentativesofQatalystPartners,AllenandWilsonSonsinitherevisedproposalsthathadbeensubmittedbyMicrosoftandPartyAandthenext
stepswithregardtofurtherdiscussionswitheach.TheTransactionsCommitteeandrepresentativesofQatalystPartnersandAllenalsonotedthat,basedonpriorconversationswith
Mr.Hoffman,Mr.Hoffmanspreferencewouldlikelybeforconsiderationthatconsistedofamixofcashandstockinatransactionintendedtoqualifyasatax-freereorganization,inlightof
thevalueofthedeferraloftaxesonthestockportionoftheconsideration.TheTransactionsCommitteeauthorizedrepresentativesofQatalystPartnerstorespondtoPartyAandMicrosoftwith
requestsforincreasedoffers.
TherepresentativesofQatalystPartnerscontactedeachofPartyAandMicrosoft,consistentwiththeTransactionsCommitteesinstructions.
OnMay12,2016,theTransactionsCommitteemet,withMr.HoffmanandrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,in
attendance.TheTransactionsCommitteediscussedwiththerepresentativesofQatalystPartnersandAllentheprocesstodatewithrespecttodiscussionswithMicrosoftandPartyA.The
representativesofQatalystPartnersnotedthatPartyAhadindicatedthatalthoughPartyApreferredanegotiationtoanauction,ifthereweretobeanauction,PartyAexpectedthatallparties
bidswouldbeconsideredatonce.WithrespecttoMicrosoft,therepresentativesofQatalystPartnersindicatedthatMicrosoftexpressedasimilarconcernrelatingtocontinuedincremental
biddingandwasseekingguidancewithrespecttoanacceptableprice.ThemembersoftheTransactionsCommitteethendiscussedwiththerepresentativesofQatalystPartnersandinstructed
therepresentativesofQatalystPartnerstorequestbestandfinalbidsfromeachofPartyAandMicrosoft,andindicatetoeachofthebiddersthatfollowingreceiptandconsiderationofthebids,
intheeventLinkedInchosetomoveforward,LinkedInintendedtochooseonlyonepartywithwhomtopursueexclusivenegotiations.TheTransactionsCommitteeconcludedthatthiswould
alleviateconcernsregardingthepotentialforabidtobeshoppedandmakeamoreaggressiveoffermore
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likely.TheTransactionsCommitteealsoconsideredthelengthoftheprocesstodateandthedepthofinteractionswitheachofthepartiesaswellasthefactthatprolongedcontinuationofthe
processwouldlikelybeanincreasingdistractionformanagementoftheCompanyandhavepotentialforleaksinthemediathatcouldbedamagingtotheCompanysbusiness.Inlightofthese
considerations,theTransactionsCommitteeinstructedtherepresentativesofQatalystPartnerstoinformbothMicrosoftandPartyAthattheyweretosubmitbestandfinalofferstoacquire
LinkedInpriortotheLinkedInBoardmeetingscheduledfortheafternoonofMay13,2016.Mr.HoffmaninformedtheTransactionsCommitteethathewishedtocallMr.Nadellaandindicate
thathewouldpersonallysupportatransactionwithMicrosoftat$185pershareorgreateriftheLinkedInBoardchoseMicrosoftasthewinningbidderafterthereceiptofbestandfinaloffers.
LateronMay12,2016,andonMay13,2016,Mr.HoffmanconveyedtoMr.NadellathemessagehediscussedwiththeTransactionsCommittee.AlsoonMay12,2016,
representativesofQatalystPartnersspokewith(1)representativesofPartyAandtheirfinancialadvisorand(2)representativesofMicrosoftandMorganStanleyandconveyedtotherespective
partiesthemessagesinstructedbytheTransactionsCommittee.
OnMay13,2016,MicrosoftsubmittedarevisedproposalinresponsetotherequestforbestandfinaloffersforanacquisitionofLinkedInatapriceof$182incashpershareof
LinkedIncommonstock,withtheflexibilitytoincludeMicrosoftcommonstockaspartofthemixofconsiderationifrequestedbyLinkedIn.Laterthatafternoon,PartyAsubmittedarevised
proposalinresponsetotherequestforbestandfinaloffersforanacquisitionofLinkedInfor$182pershareofLinkedIncommonstock,consistingof$85incashandtheremainderinPartyA
commonstock.BothproposalsrequestedthatLinkedInnegotiateonanexclusivebasis.
LateronMay13,2016,theLinkedInBoardmet,withrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,inattendance.Themembers
oftheLinkedInBoardreviewedanddiscussedtheprocesstodate,andthetermsoftheproposalssubmittedbyMicrosoftandPartyAinresponsetotherequestforbestandfinaloffers.The
membersoftheLinkedInBoardandrepresentativesofQatalystPartnersandAllendiscussedvariousconsiderationsraisedbythetwoproposals,including,amongotherthings,(1)thevalue
certaintyoftherespectiveproposals;(2)thehistoricalvolatilityofthestockpriceofeachofMicrosoftandPartyA;(3)theexecutionrisksoftherespectiveproposals;(4)certaintyofclosing,
includingtheneedfortheapprovalofPartyAsstockholders;and(5)therelativefinancingneedsofeachofMicrosoftandPartyA.TheLinkedInBoardconsidered,inlightofLinkedIns
requestforbestandfinaloffersandmessagingregardingtheprocesspreviouslydeliveredtoeachbidder,thepotentialeffectsofcallingoneorbothpartiestoseekanincreasedproposalandthe
risktotheprocessofpotentiallyalienatingoneorbothpartiesbydoingso.TherepresentativesofWilsonSonsinithenreviewedwiththemembersoftheLinkedInBoardtheirfiduciary
obligations.TherepresentativesofWilsonSonsinidiscussedwiththeLinkedInBoardthatadefinitiveagreementforatransactionwouldbeexpectedtopermitLinkedIntorespondto
unsolicitedacquisitionproposalsandacceptasuperiorproposal,subjecttopaymentofaterminationfee.TheLinkedInBoarddiscussedthetwoproposalsandunanimouslyconcludedto
proceedwithexclusivitywithMicrosoft.TheLinkedInBoarddiscussednegotiatingwithMicrosofttoexplorestructuringthetransactiontoincludeMicrosoftstock,andhavethestock
componentofthemergerconsiderationbetax-deferredtostockholders,somethingfor
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whichMr.Hoffmanexpressedhispreference.Inthisregard,theLinkedInBoardalsodiscussedproposingamechanismwherebyMicrosoftwouldprovidesomelevelofpricecertaintyfor
sharesissuedinthetransaction.TheLinkedInBoardauthorizedLinkedIntoenterintoanexclusivityagreementwithMicrosoft.
ImmediatelyfollowingthemeetingoftheLinkedInBoardonMay13,2016,theTransactionsCommitteemet,withMr.HoffmanandrepresentativesofLinkedInmanagement,
QatalystPartners,AllenandWilsonSonsini,respectively,inattendance.ThemembersoftheTransactionsCommitteediscussedthecommunicationoftheLinkedInBoardsdecisiontoeachof
MicrosoftandPartyA.
Later,onMay13,2016,representativesofQatalystPartners,onbehalfofLinkedIn,informedPartyAthatLinkedInwasproceedingtoenterintoanexclusivityagreementwithanother
party.
OnMay14,2016,LinkedInsignedanexclusivityagreementwithMicrosoftthatexpiredonJune12,2016.Theexclusivityagreement,amongotherthings,prohibitedLinkedInfrom
solicitingalternativeacquisitionproposalsorengaginginnegotiationswithotherpartiesregardinganalternativeacquisition.
BeginningMay14,2016,andcontinuinguntilthesigningofthemergeragreement,MicrosoftcontinueditsduediligencereviewofLinkedInthroughinpersonmeetings,telephone
callsandaccesstoanelectronicdataroommadeavailablebyLinkedIn.BeginningatthesametimeandendingJune6,2016,thepartiesengagedindiscussionsregardingthetermsofacollarin
ordertointroduceadegreeofpricecertaintyforthestockcomponentoftheconsiderationbeingdiscussed.
OnMay16,2016,WilsonSonsini,onbehalfofLinkedIn,providedSimpsonThacherwithadraftofthemergeragreement,which,amongotherthings,(1)providedLinkedInwiththe
righttoterminatethemergeragreementtoacceptasuperiorproposal;and(2)proposedconsiderationthatconsistedofamixofcashandstockinatransactionintendedtoqualifyasatax-free
reorganization.
OnMay20,2016,SimpsonThacher,onbehalfofMicrosoft,providedWilsonSonsiniwithareviseddraftofthemergeragreement.Amongotherthings,thereviseddraftofthemerger
agreement:(1)providedforasupportagreementtobeenteredintobyMr.Hoffman,adraftofwhichwasalsoprovidedbySimpsonThacher;(2)reservedforfuturecommentsontheformof
mergerconsiderationandantitrustmatters;(3)indicatedthatLinkedInsproposalthatithavetherighttoterminatethemergeragreementtoacceptasuperiorproposalwassubjecttoadditional
discussionsbetweentheparties;and(4)includedrevisionstothecircumstancesinwhichaterminationfeewouldbepayablebyLinkedIn.
LateronMay20,2016,LinkedInreceivedarevisedproposalfromPartyAforanacquisitionofLinkedInfor$85incashandafixednumberofsharesofPartyAcommonstock
which,basedontheclosingpriceofPartyAscommonstockonMay19,2016,representedaproposalwithanotionalvalueatthattimeofapproximately$188pershareofLinkedIncommon
stock.
OnMay21,2016,theTransactionsCommitteemet,withMr.HoffmanandrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,in
attendance.The
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membersoftheTransactionsCommitteediscussedwithrepresentativesofQatalystPartners,AllenandWilsonSonsini,respectively,nextstepswithrespecttothereceiptoftherevisedproposal
fromPartyAinlightofthetermsoftheexclusivityagreementwithMicrosoftandtheconfidentialityagreementwithPartyA.TheTransactionsCommitteenotedthattherevisedproposalwas
infactquitesimilareconomicallytotheimpliedvalueoftheproposalsentbyPartyAonMay13,2016,atthetimeitwassent,insofarastheimpliedfloatingstockexchangeratioofthe
May13,2016proposal,usingPartyAstradingpriceonMay13,2016,wasthesameasthefixedstockexchangeratiointherevisedproposalofMay20,2016;theincreaseinthenotional
valueofPartyAsproposalwasattributabletotheincreaseinPartyAstradingpricebetweenMay13,2016,andMay20,2016.TheTransactionsCommitteealsodiscussedfactorsthatcould
beaffectingPartyAstradingprice.TheTransactionsCommitteethendiscussedtheappropriatemannerinwhichtoaddresstherevisedPartyAproposalinlightoftheLinkedInBoards
fiduciaryandcontractualobligations.TheTransactionsCommitteeconcludeditcouldnotrespondtoPartyAinlightofLinkedInsexclusivityagreementwithMicrosoft.TheTransactions
CommitteefurtherconcludedthatLinkedInwouldcontinuenegotiationswithMicrosoftandevaluatethesituationfurtherclosertotheexpirationoftheexclusivityperiodwithMicrosoft,and
afterMicrosoftsduediligencewassubstantiallycompleted.Inthisregard,thosepresentdiscussedtheneedtopreserveflexibilityinthenegotiationswithMicrosoftintheeventthatPartyA
remainedinterestedinacquiringLinkedInclosertotheexpirationoftheexclusivityperiod.
OnMay25,2016,thechiefexecutiveofficerofPartyAemailedMessrs.HoffmanandWeinertoindicatethatPartyAsstockperformancesincePartyAsrevisedproposalwassent
onMay20,2016,hadincreasedthenotionalvalueofitsrevisedproposal.
LateronMay25,2016,WilsonSonsini,onbehalfofLinkedIn,providedSimpsonThacherwithareviseddraftofthemergeragreement.Amongotherthings,thereviseddraftofthe
mergeragreement:(1)notedthatthesupportagreementproposedtobeenteredintobyMr.HoffmanwasunderreviewbyMr.Hoffman;(2)indicatedthattheformofmergerconsiderationand
antitrustmattersremainedunderreviewbytheparties;(3)providedforLinkedInsrighttoterminatetheagreementintheeventofasuperiorproposal;and(4)indicatedthattheamountofa
terminationfeethatwouldbepayablebyLinkedInremainedunderreviewbytheparties.
OnMay26,2016,theLinkedInBoardmet,withrepresentativesofLinkedInmanagementandWilsonSonsiniinattendance.TheLinkedInBoarddiscussedthecurrentstateofdue
diligenceandnegotiationswithMicrosoftandagainreviewedtheLinkedInlong-termmanagementplan.
OnJune1,2016,SimpsonThacher,onbehalfofMicrosoft,providedWilsonSonsiniwithareviseddraftofthemergeragreement.Thereviseddraftofthemergeragreementprovided,
amongotherthings,(1)forlimitationswithrespecttoMicrosoftsobligationsinconnectionwithantitrustmatters;and(2)aterminationfeeof3.85%ofthefullydilutedequityvalueof
LinkedIn,whichwouldrepresentapproximately$1billion,thatwouldbepayableincertaincircumstancesbyLinkedIn.
LateronJune1,2016,Mr.HoffmaninformedtheCompanythathewouldnotbepreparedtoenterintothesupportagreementwithMicrosoftinlightofthepotentialriskthatdoingso
could,
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underLinkedInscertificateofincorporation,potentiallyresultintheautomaticconversionofhisClassBcommonstocktoClassAcommonstock.
OnJune3,2016,representativesofWilsonSonsini,WeilGotshal&Manges,counseltoMr.Hoffman,SimpsonThacherandRichards,Layton&Finger,Delawarecounselto
Microsoft,heldaconferencecalltodiscussthesupportagreementandissuesrelatingtotheautomaticconversionfeatureinLinkedInscertificateofincorporation.Followingthiscall,
representativesofSimpsonThacherindicatedtoWilsonSonsinithatifMicrosoftwouldnotreceiveasupportagreementfromMr.Hoffman,itwouldseekadditionalprovisionsinthemerger
agreementtoaddresstheadditionalconditionalitythatitwouldintroducetothedeal.
OnJune4,2016,WilsonSonsini,onbehalfofLinkedIn,providedSimpsonThacherwithareviseddraftofthemergeragreementandadraftofthedisclosurelettertothemerger
agreement.Amongotherthings,thereviseddraftofthemergeragreement:(1)providedthatMr.Hoffmanwouldnotenterintoasupportagreement;(2)includedadditionalcovenantswith
respecttoMicrosoftsobligationsinconnectionwithantitrustmatters;and(3)providedforaterminationfeeof1.75%ofthefullydilutedequityvalueofLinkedIn,whichwouldrepresent
approximately$450million,thatwouldbepayableincertaincircumstancesbyLinkedIn.
OnJune5,2016,LinkedInreceivedafurtherrevisedproposalfromPartyAforanacquisitionofLinkedInatapricepershareofLinkedIncommonstockof$85incashandafixed
numberofsharesofPartyAcommonstock,whichfixednumberofPartyAshareswasincreasedfromPartyAsMay20,2016proposal.BasedontheclosingpriceofPartyAscommonstock
onJune3,2016,thelasttradingdaypriortoreceiptoftheproposal,thisproposalrepresentedanotionalvalueofapproximately$200pershareofLinkedIncommonstockatthattime.
AlsoonJune5,2016,Mr.NadellaandMr.WeinerspokeanddiscussedoperatingprinciplesandagovernanceframeworkfortheLinkedInbusinessfollowingtheacquisition.
OnJune6,2016,theTransactionsCommitteemet,withMr.HoffmanandrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,in
attendance.TherespectiverepresentativesofQatalystPartners,AllenandWilsonSonsinidiscussedwiththemembersoftheTransactionsCommitteetheprocesswithrespecttothereceiptof
therevisedproposalfromPartyAinlightofthetermsoftheexclusivityagreementwithMicrosoftandtheconfidentialityagreementwithPartyA.TheTransactionsCommitteenotedthatthe
materialdifferenceintherevisedproposalrelativetotherevisedproposalfromPartyAofMay20,2016,wasthatthefixedstockexchangeratiohadbeenincreased.TheTransactions
CommitteethendiscussedtheappropriatemannerinwhichtoaddressthefurtherrevisedproposalinlightoftheLinkedInBoardsfiduciaryandcontractualobligations.TheTransactions
Committeedetermined,inlightoftheprohibitioninLinkedInsexclusivityagreementwithMicrosoftondiscussionswithotherparties,nottorespondtoPartyAandtocontinuenegotiations
withMicrosoftandtoindicatetoMicrosoftthatMicrosoftscurrentproposalof$182incashpershareofLinkedIncommonstockwasnolongersupportableandencourageMicrosofttooffer
$200pershare.Mr.WeinerinformedthemembersoftheTransactionsCommitteethathehadspokentoMr.HoffmanandMr.Hoffmanwasnowalsosupportiveoftheconsiderationinan
acquisitionofLinkedInbeingentirelyintheformofcash,inadditiontoremainingcomfortablewithacashandstocktransaction.RepresentativesofQatalystPartnersdiscussedwiththe
TransactionsCommitteethatanacquisitionentirelyforcashwouldbemoreattractivetoMicrosoft.
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AlsoonJune6,2016,representativesofQatalystPartnersspoketorepresentativesofMorganStanleyand,inthecontextoftheexpectedtimingofentryintoamergeragreementprior
totheexpirationofexclusivity,conveyedthatMicrosoftsproposalof$182incashpershareofLinkedIncommonstockwasnolongersupportable,Microsoftshouldconsideranofferof$200
pershareandMr.HoffmanwasnowsupportiveoftheconsiderationbeingentirelyintheformofcashaspartofanincreasetoMicrosoftsoffer.
OnJune7,2016,andJune8,2016,duringconversationsconcerningthestatusofthetransaction,Messrs.HoffmanandWeinerseparatelycommunicatedtoMr.Nadellathata
transactionat$182pershareofLinkedIncommonstockwasnolongersupportableandencouragedMr.Nadellatooffer$200pershare.Inthecourseoftheseconversations,Mr.Hoffman
indicatedthathewaswillingtoconsideranall-cashtransactionwithMicrosoftaspartofanincreaseinMicrosoftsoffer.Mr.NadellaalsoindicatedtoMr.Weinerthatadiscussionofcost
synergiesinthetransactionwouldbenecessaryinconnectionwithanypotentialpriceincreasefromMicrosoft.AlsoonJune8,2016,BradSmith,Microsoftspresidentandchieflegalofficer,
separatelyspokewithMr.BattleandmetwithMr.CallahanandconveyedtoeachthatanypotentialincreaseinMicrosoftsofferwouldnecessitateadiscussionofcostsynergies.
OnJune9,2016,theTransactionsCommitteemet,withrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,inattendance.
RepresentativesofLinkedInmanagement,QatalystPartnersandAllendiscussedwiththemembersoftheTransactionsCommitteethestrategyforobtainingahigherofferfromMicrosoftin
lightofthetworevisedproposalsfromPartyA.Mr.WeinernotedthatMr.NadellahadinformedhimthatMicrosoftwouldneedtoidentifycostsynergiesinconnectionwithanyincreaseinits
offer.TherepresentativesofQatalystPartnersreviewedwiththemembersoftheTransactionsCommitteethekeydifferencesbetweenthelatestrevisedproposalfromPartyAandthecurrent
proposalfromMicrosoft.TherepresentativesofWilsonSonsinidiscussedwiththemembersoftheTransactionsCommitteetheirfiduciarydutiesinlightoftheMicrosoftproposalandthe
receiptoftherevisedproposalfromPartyA.
AlsoonJune9,2016,SimpsonThacher,onbehalfofMicrosoft,providedWilsonSonsiniwithareviseddraftofthedisclosurelettertothemergeragreement.
LateronJune9,2016,Mr.NadellametwithMr.Weinertodiscussintegrationplanningandpotentialcostsynergiesarisingfromthecombinationandthestatusofthetransaction
generally.Atthatmeeting,Mr.Weinerreiteratedthat$182wasnolongersupportable.
OnJune10,2016,Mr.SordellosentAmyHood,Microsoftschieffinancialofficer,ananalysisofpotentialcostsynergiesarisingfromthecombination.Laterthatday,Mr.Sordello
andMs.Hooddiscussedvariouspotentialcostsynergiesarisingfromthecombination.Laterthatday,MicrosoftdeliveredarevisedproposaltoLinkedInthatprovidedforanacquisitionof
LinkedInfor$190incashpershareofLinkedIncommonstock.Messrs.NadellaandSmithalsocalledMessrs.WeinerandCallahan,respectively,toconveytheproposalverbally.
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AlsoonJune10,2016,SimpsonThacher,onbehalfofMicrosoft,providedWilsonSonsini,onbehalfofLinkedIn,withareviseddraftofthemergeragreement.Amongotherthings,
thereviseddraftofthemergeragreement:(1)providedforMessrs.HoffmanandWeinertoeachenterintoasupportagreementwherebyeachwould,amongotherthings,agreenottoenterinto
anyvotingagreementwithathirdparty;(2)indicatedthattheformofmergerconsiderationwouldbeallcash;(3)includedchangestocovenantswithrespecttoMicrosoftsobligationsin
connectionwithantitrustmatters;and(4)providedforaterminationfeeof3.75%ofthefullydilutedequityvalueofLinkedIn,whichwouldrepresentapproximately$1billion,thatwouldbe
payableincertaincircumstancesbyLinkedIn.
LateronJune10,2016,representativesofWilsonSonsini,onbehalfofLinkedIn,negotiatedthemergeragreementwithrepresentativesofSimpsonThacher,onbehalfofMicrosoft.
Asapartofthisconversation,itwasconveyedthatMessrs.HoffmanandWeinerwouldnotenterintoanytypeofsupportagreementwithMicrosoft.Inaddition,thereremainedopenissues
regardingantitrustmatters,theamountoftheterminationfeeandthecircumstancesunderwhichitwouldbepayable.
LateronJune10,2016,theTransactionsCommitteemet,withrepresentativesofLinkedInmanagement,QatalystPartners,AllenandWilsonSonsini,respectively,inattendance.
Mr.WeinerupdatedthemembersoftheTransactionsCommitteeonhisconversationtheprioreveningwithMr.Nadella.ThemembersoftheTransactionsCommitteediscussedtherevised
offerfor$190incashpershareofLinkedIncommonstockthathadbeendeliveredearlierthatday.TherepresentativesofWilsonSonsiniprovidedanupdateonthestatusofthenegotiationof
themergeragreement,notingthat,inadditiontoprice,theantitrustprovisions,theamountoftheterminationfeepayableandthecircumstancesunderwhichitwouldbepayableweretheother
remainingmaterialpointstonegotiate.TheTransactionsCommitteethenauthorizedMr.WeinertocontinuediscussionswithMr.Nadellaforthepurposeof(1)emphasizingthatMicrosoft
neededtoofferthehighestpricepossible;(2)emphasizingtherisksinherenttoMicrosoftinallowingtheexclusivityperiodtolapsewithoutenteringintoamergeragreement;and
(3)conveyingthattherewassomesupportforatransactionwithMicrosoftat$196pershareincash(butthatanytransactionwouldrequirefullboardapproval).
LateronJune10,2016,Mr.WeinerspokewithMr.NadellaandrelayedthediscussionitemsauthorizedbytheTransactionsCommittee.
EarlyinthemorningofJune11,2016,WilsonSonsini,onbehalfofLinkedIn,providedSimpsonThacher,onbehalfofMicrosoft,withareviseddraftofthemergeragreementanda
reviseddraftofthedisclosurelettertothemergeragreement.Thereviseddraftofthemergeragreementprovided,amongotherthings,(1)therewouldnotbeanysupportagreement;
(2)additionalcovenantswithrespecttoMicrosoftsobligationsinconnectionwithantitrustmatters;and(3)aterminationfeeof$700million,thatwouldbepayableincertaincircumstancesby
LinkedIn,withareducedterminationfeepayableintheeventofaterminationofthemergeragreementduetoafailuretoobtainLinkedInstockholderapproval.
AlsointhemorningofJune11,2016,Mr.NadellainformedMr.WeinerthatMicrosoftsboardofdirectorshadapprovedarevisedproposalforanacquisitionofLinkedInatapriceof
$196incashpershareofLinkedIncommonstockandthatMicrosoftwantedtofinalizeandexecutethe
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mergeragreementlaterthatday.Shortlythereafter,MicrosoftsentMr.WeinerarevisedproposalforanacquisitionofLinkedInfor$196incashpershareofLinkedIncommonstock.
LaterinthemorningofJune11,2016,WilsonSonsini,onbehalfofLinkedIn,andSimpsonThacher,onbehalfofMicrosoft,negotiatedthefinalversionsofthemergeragreementand
thedisclosurelettertothemergeragreement.Aspartofthesenegotiations,thepartiesagreedonthescopeofantitrustprovisionsandagreedonaterminationfeeof$725million.Simpson
ThacherstatedthatMicrosoftrequiredasaconditiontoproceedingwithatransactionthatthefullterminationfeebepayableintheeventofaterminationofthemergeragreementduetoa
failuretoobtainLinkedInstockholderapproval.
IntheafternoonofJune11,2016,theLinkedInBoardmet,withtherespectiverepresentativesofLinkedInmanagement,QatalystPartners,Allen,WilsonSonsiniandGibsonDunn&
Crutcher,outsideantitrustcounseltoLinkedIn,whichwerefertoasGibsonDunn,inattendance.Duringthemeeting,representativesofQatalystPartners,AllenandWilsonSonsinireviewed
thetermsofthemergeragreementandMicrosoftsproposalforanacquisitionofLinkedInat$196pershareincashaswellasthetermsofthemostrecentproposalfromPartyA.The
representativesofWilsonSonsinireviewedwiththemembersoftheLinkedInBoardtheirfiduciaryduties,includingtherelevantjudicialstandardsofreviewandtheprocessassociatedwitha
decisionbytheLinkedInBoardtoengageintheproposedtransaction.TherepresentativesofWilsonSonsinidiscussedtheprocesstodate,includingtheproposalsthathadbeenmadeby
MicrosoftandPartyAbothpriortoenteringintoexclusivitywithMicrosoft,andthereafter.TherepresentativesofWilsonSonsinialsoreportedonnegotiationswithMicrosoftwithrespectto
thetermsofthemergeragreement.ArepresentativeofGibsonDunnreviewedwiththemembersoftheLinkedInBoardantitrustmattersapplicabletothemergeragreement.Therepresentatives
ofQatalystPartnersreviewedwiththemembersoftheLinkedInBoardQatalystPartnersfinancialanalysisofthe$196persharecashconsiderationtobeofferedtoLinkedInstockholdersin
theproposedmerger.TherepresentativesofWilsonSonsinidescribedtheprincipaltermsoftheproposedmergeragreementbetweenLinkedInandMicrosoft.TheLinkedInBoardthen
discussedpotentialreasonsfor,andrisksinherentin,enteringintoanagreementforanacquisitionwithMicrosoft,including,amongotherthings,(1)thefactthatthemergeragreementpermits
theLinkedInBoardtoconsider,negotiateandacceptanunsolicitedsuperiorproposalfromPartyAorotherpotentialthirdpartiesandterminatetheCompanysagreementwithMicrosoft,
subjecttopaymentoftheterminationfee;(2)thepotentialofPartyAswillingnesstocontinuetomakeacquisitionproposals;(3)theneedforPartyAtoobtainapprovalfromitsstockholders
toconsummateatransaction;(4)thevalueofandthecertaintyofvalueinthecashconsiderationofferedbyMicrosoftandthecashandstockconsiderationproposedbyPartyA;(5)thecurrent
andprospectivefuturestateofcreditmarkets;(6)theexecutionrisksinvolvedinnegotiatingandfinalizingamergeragreementwithPartyA(versusthealreadynegotiatedmergeragreement
withMicrosoft);and(7)therisksthatMicrosoftmightnotcontinuetopursueanacquisitionoftheCompanyaftertheexpirationoftheexclusivityperiodifamergeragreementwerenot
executedbythattime.EachofthemembersoftheTransactionsCommitteediscussedwiththeothermembersoftheLinkedInBoardhisviewsregardingtheproposalsandtheprocesstodate.
EachofthemembersoftheTransactionsCommitteenotedthathewasinfavorofproceedingwithMicrosoftsproposalbeforethelapseofexclusivity,particularlyinlightof(1)thevalueof
Microsoftsall-cashproposal;and(2)theexecutionrisksandvalueofPartyAsproposal.Mr.HoffmanthenstatedthathebelievedthattheproposedtransactionwithMicrosoft
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wouldbeinthebestinterestsofLinkedInsstockholdersandthat,asastockholder,hewouldvoteinfavorofthetransactionwithMicrosoft,subjecttotheLinkedInBoardscontinued
recommendationinfavorofthetransactionpursuanttothetermsofthemergeragreement.TherepresentativesofQatalystPartnersthenrenderedQatalystPartnersoralopiniontotheLinkedIn
Board,subsequentlyconfirmedbydeliveryofawrittenopiniondatedJune11,2016,that,asofJune11,2016,andbaseduponandsubjecttothevariousassumptions,considerations,limitations
andothermatterssetforththerein,thepersharemergerconsiderationtobereceivedbytheholdersofsharesofLinkedInClassAcommonstockpursuanttothemergeragreement(otherthan
MicrosoftoranyaffiliateofMicrosoft),intheircapacityasholdersofLinkedInClassAcommonstock,wasfairfromafinancialpointofviewtosuchholders.Formoreinformationabout
QatalystPartnersopinion,seethesectionofthisproxystatementcaptionedFairnessOpinionofQatalystPartners.Afterfurtherdiscussion,theLinkedInBoardunanimously
(1)determinedthatitwasinthebestinterestsofLinkedInanditsstockholders,anddeclareditadvisable,toenterintothemergeragreementandconsummatethemergeruponthetermsand
subjecttotheconditionssetforththerein;(2)approvedtheexecutionanddeliveryofthemergeragreementbyLinkedIn,theperformancebyLinkedInofitscovenantsandotherobligations
thereunder,andtheconsummationofthemergeruponthetermsandconditionssetforththerein;(3)directedthattheadoptionofthemergeragreementbesubmittedtoavoteatameetingofthe
stockholdersofLinkedIn;and(4)resolvedtorecommendthatLinkedInstockholdersvoteinfavorofadoptionofthemergeragreement.Mr.WeinertheninformedthemembersoftheLinkedIn
BoardthatMicrosofthadindicatedadesiretobegindiscussionandnegotiationofanemploymentarrangementwithhimpriortoannouncementofatransactionandtheLinkedInBoard
acquiescedtosuchdiscussionstakingplace.
LateronJune11,2016,LinkedIninformedMicrosoftthattheLinkedInBoardhadapprovedtheacquisition,andthemergeragreementwassigned.
OnJune13,2016,priortotheopeningoftradingoftheClassAcommonstockontheNYSE,LinkedInandMicrosoftissuedajointpressreleaseannouncingtheentryintothemerger
agreement.
45
TableofContents
Recommendation
of
the
LinkedIn
Board
and
Reasons
for
the
Merger
Recommendation of the LinkedIn Board
The
LinkedIn
Board
has
unanimously
(1)
determined
that
the
merger
agreement,
the
merger
and
the
other
transactions
contemplated
by
the
merger
agreement,
on
and
subject
to
the
conditions
set
forth
therein,
are
fair
to,
advisable
and
in
the
best
interests
of
LinkedIn
and
its
stockholders;
and
(2)
adopted
and
approved
the
merger
agreement,
the
merger
and
the
other
transactions
contemplated
by
the
merger
agreement
in
all
respects.
The
LinkedIn
Board
unanimously
recommends
that
you
vote
(1)
FOR
the
adoption
of
the
merger
agreement;
(2)
FOR
the
adjournment
of
the
special
meeting
to
a
later
date
or
dates,
if
necessary
or
appropriate,
to
solicit
additional
proxies
if
there
are
insufficient
votes
to
adopt
the
merger
agreement
at
the
time
of
the
special
meeting;
and
(3)
FOR
the
non-binding,
advisory
proposal
to
approve
compensation
that
will
or
may
become
payable
by
LinkedIn
to
our
named
executive
officers
in
connection
with
the
merger.
Reasons for the Merger
Inevaluatingthemergeragreement,themergerandtheothertransactionscontemplatedbythemergeragreement,theLinkedInBoardconsultedwithLinkedInmanagement,its
financialadvisorsanditsoutsidelegalcounsel.InrecommendingthatLinkedInstockholdersvotefortheadoptionofthemergeragreement,theLinkedInBoardconsideredanumberoffactors,
includingthefollowing(whichfactorsarenotnecessarilypresentedinorderofrelativeimportance):
LinkedInsbusinessoperationsandmanagement.
LinkedInshistoricalandprojectedfinancialperformance,resultsandcondition,includingtherisksassociatedwithachievingtheForecasts,whichwedefinebelow.
LinkedInscompetitivepositioningandprospectsasastand-alonecompany.
Thefactthattheall-cashmergerconsiderationwillprovidecertaintyofvaluetoLinkedInstockholders,whileeliminatingtheeffectoflong-termbusinessandexecutionrisk.
TheoralopiniondeliveredbyQatalystPartnerstotheLinkedInBoardonJune11,2016,andsubsequentlyconfirmedinwriting,thatasofJune11,2016,andbaseduponand
subjecttothevariousassumptions,considerations,limitationsandothermatterssetforththerein,the$196.00persharemergerconsiderationtobereceivedbytheClassAholders
pursuanttothemergeragreement,intheircapacityasClassAholders,wasfair,fromafinancialpointofview,tosuchClassAholders,asmorefullydescribedinthesectionof
thisproxystatementcaptionedTheMergerFairnessOpinionofQatalystPartners
Therelationshipofthe$196.00persharemergerconsiderationtothetradingpriceofthecommonstock,includingthatthe$196.00persharemergerconsiderationconstituteda
premiumofapproximately49.5%totheclosingpriceofthecommonstockonJune10,2016,thelasttradingdaypriortothedateonwhichLinkedInenteredintothemerger
agreement.
ThereportsoftheTransactionsCommitteereceivedbytheLinkedInBoardregardingtheprocessconductedbytheTransactionsCommittee.
BasedonitsreviewoftheprocessconductedbytheTransactionsCommittee,theLinkedInBoardsbeliefthat$196.00pershareincashandthetermsofthemergeragreement
offerthebestvaluereasonablyattainableforLinkedInstockholders.
46
TableofContents
TheLinkedInBoardsviewthatthemergeragreementwastheproductofarms-lengthnegotiationandcontainedcustomarytermsandconditions.
Thetermsofthemergeragreement,including:
LinkedInsability,undercertaincircumstances,tofurnishinformationto,andconductnegotiationswith,thirdpartiesregardingunsolicitedacquisitionproposals;
TheLinkedInBoardsviewthatthetermsofthemergeragreementwouldbeunlikelytodeterthirdpartiesfrommakingasuperiorproposal,includingthemerger
agreementstermsandconditionsastheyrelatetocompanyboardrecommendationchanges(seethesectionsofthisproxystatementcaptionedTheMergerAgreementNo
SolicitationofOtherOffersandTheMergerAgreementTheLinkedInBoardsRecommendation;CompanyBoardRecommendationChange);
LinkedInsabilitytoterminatethemergeragreementinordertoacceptanunsolicitedsuperiorproposal,subjecttopayingMicrosoftaterminationfeeof$725millionandthe
otherconditionsofthemergeragreement;
ThefactthattheLinkedInBoardbelievedthattheterminationfeeof$725million,whichisapproximately2.58%ofLinkedInsimpliedequityvalueinthemerger,is
reasonable,consistentwithorbelowfeesincomparabletransactions,andnotpreclusiveofotheroffers;
LinkedInsentitlementtospecificperformancetopreventbreachesofthemergeragreement;and
Thattheconsummationofthemergerisnotsubjecttoanyfinancingcondition.
PotentialacquirorsofLinkedInandvariousconsiderationsassociatedwitheachsuchacquiror.
Theperceivedriskofcontinuingasastand-alonepubliccompanyorpursuingotherstrategicalternatives.
ThefactthattheTransactionsCommitteeunanimouslyrecommendedthemergertotheLinkedInBoard.
Mr.HoffmanssupportofthemergerasbeinginthebestinterestsofLinkedInstockholdersandthat,assuch,heintendedtovoteinfavorofthemergerinhiscapacityasa
stockholder(subjecttotheLinkedInBoardscontinuingrecommendationofthemerger).
TheLinkedInBoardsfiduciarydutiesinlightoftheforegoing.
TheLinkedInBoardalsoconsideredanumberofuncertaintiesandrisksconcerningthemerger,includingthefollowing(whichfactorsarenotnecessarilypresentedinorderofrelative
importance):
Thefactthattheannouncementandpendencyofthemerger,orthefailuretocompletethemerger,maycausesubstantialharmtoLinkedInsrelationshipswithitsemployees
(includingmakingitmoredifficulttoattractandretainkeypersonnelandthepossiblelossofkeymanagement,technical,salesandotherpersonnel),vendorsandcustomers,and
maydivertemployeesattentionawayfromLinkedInsday-to-daybusinessoperations.
ThefactthatLinkedInstockholderswillnotparticipateinanyfutureearningsorgrowthofLinkedInandwillnotbenefitfromanyappreciationsinvalueofLinkedIn,including
anyappreciationinvaluethatcouldberealizedasaresultofthecombinationofLinkedInwithMicrosoft.
Thefactthat,withoutthesupportofMr.Hoffman,themergercouldnotbeapprovedbyLinkedInstockholders.
47
TableofContents
TherequirementthatLinkedInpayMicrosoftaterminationfeeof$725millionundercertaincircumstancesfollowingterminationofthemergeragreement,includingif(1)the
LinkedInBoardterminatesthemergeragreementtoacceptanunsolicitedsuperiorproposalor(2)ifthemergeragreementisnotadoptedbyLinkedInstockholders.
TherestrictionsontheconductofLinkedInsbusinesspriortotheconsummationofthemerger,includingtherequirementthatLinkedInconductitsbusinessintheordinary
course,subjecttospecificlimitations,whichmaydelayorpreventLinkedInfromundertakingbusinessopportunitiesthatmayarisebeforethecompletionofthemergerandthat,
absentthemergeragreement,LinkedInmighthavepursued.
Thefactthatanall-cashtransactionwouldbetaxabletoLinkedInstockholdersthatareU.S.personsforU.S.federalincometaxpurposes.
Thefactthatunderthetermsofthemergeragreement,LinkedInisunabletosolicitotheracquisitionproposalsduringthependencyofthemerger.
Thesignificantcostsinvolvedinconnectionwithenteringintothemergeragreementandcompletingthemerger,andthesubstantialtimeandeffortofLinkedInmanagement
requiredtocompletethemerger,whichmaydisruptLinkedInsbusinessoperations.
ThefactthatLinkedInsbusiness,salesoperationsandfinancialresultscouldsufferintheeventthatthemergerisnotconsummated.
TheriskthatthemergermightnotbecompletedandtheeffectoftheresultingpublicannouncementoftheterminationofthemergeragreementonthetradingpriceoftheClassA
commonstock.
ThefactthatthecompletionofthemergerwillrequireantitrustclearanceintheUnitedStatesandregulatoryapprovalfromtheEuropeanUnionandCanada.
ThefactthatLinkedInsdirectorsandofficersmayhaveinterestsinthemergerthatmaybedifferentfrom,orinadditionto,thoseofotherLinkedInstockholders(seethesection
ofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMerger).
Theforegoingdiscussionisnotmeanttobeexhaustive,butsummarizesthematerialfactorsconsideredbytheLinkedInBoardinitsconsiderationofthemerger.Afterconsidering
theseandotherfactors,theLinkedInBoardconcludedthatthepotentialbenefitsofthemergeroutweighedtheuncertaintiesandrisks.Inviewofthevarietyoffactorsconsideredbythe
LinkedInBoardandthecomplexityofthesefactors,theLinkedInBoarddidnotfinditpracticableto,anddidnot,quantifyorotherwiseassignrelativeweightstotheforegoingfactorsin
reachingitsdeterminationandrecommendations.Moreover,eachmemberoftheLinkedInBoardappliedhisorherownpersonalbusinessjudgmenttotheprocessandmayhaveassigned
differentweightstodifferentfactors.TheLinkedInBoardunanimouslyadoptedandapprovedthemergeragreement,themergerandtheothertransactionscontemplatedbythemerger
agreementandrecommendsthatLinkedInstockholdersadoptthemergeragreementbaseduponthetotalityoftheinformationpresentedtoandconsideredbytheLinkedInBoard.
48
TableofContents
Fairness
Opinion
of
Qatalyst
Partners
LinkedInretainedQatalystPartnerstoactasitsfinancialadvisortotheLinkedInBoardinconnectionwithapotentialtransactionsuchasthemergerandtoevaluatewhethertheper
sharemergerconsiderationtobereceivedbytheholdersofsharesofClassAcommonstock,intheircapacityasClassAholders,pursuanttothemergeragreementwasfair,fromafinancial
pointofview,totheClassAholders.LinkedInselectedQatalystPartnerstoactasitsfinancialadvisorbasedonQatalystPartnersqualifications,expertise,reputationandknowledgeofthe
businessofLinkedInandtheindustryinwhichitoperates.QatalystPartnershasprovideditswrittenconsenttothereproductionoftheQatalystPartnersopinioninthisproxystatement.Atthe
meetingoftheLinkedInBoardonJune11,2016,QatalystPartnersrendereditsoralopinion,subsequentlyconfirmedinwriting,that,asofsuchdateandbaseduponandsubjecttothevarious
assumptions,considerations,limitationsandothermatterssetforththerein,thepersharemergerconsiderationtobereceivedbytheClassAholderspursuanttothemergeragreement,intheir
capacityasClassAholders,wasfair,fromafinancialpointofview,totheClassAholders.QatalystPartnersdelivereditswrittenopinion,datedJune11,2016,totheLinkedInBoardfollowing
themeetingoftheLinkedInBoard.
ThefulltextofQatalystPartnerswrittenopiniontotheLinkedInBoard,datedJune11,2016,isattachedtothisproxystatementasAnnexBandisincorporatedintothisproxy
statementbyreference.Theopinionsetsforth,amongotherthings,theassumptionsmade,proceduresfollowed,mattersconsideredandlimitationsandqualificationsofthereviewundertaken
byQatalystPartnersinrenderingitsopinion.Youshouldreadtheopinioncarefullyandinitsentirety.QatalystPartnersopinionwasprovidedtotheLinkedInBoardandaddressesonly,asof
thedateoftheopinion,thefairness,fromafinancialpointofview,ofthepersharemergerconsiderationtobereceivedbytheClassAholderspursuanttothemergeragreement,intheir
capacityasClassAholders,anditdoesnotaddressanyotheraspectofthemerger.ItdoesnotconstitutearecommendationastohowanyholderofClassAcommonstockshouldvotewith
respecttothemergeroranyothermatteranddoesnotinanymanneraddressthepricesatwhichtheClassAcommonstockwilltradeatanytime.ThesummaryofQatalystPartnersopinionis
qualifiedinitsentiretybyreferencetothefulltextoftheopinion.
Inarrivingatitsopinion,QatalystPartnersreviewedthemergeragreement,certainrelateddocuments,andcertainpubliclyavailablefinancialstatementsandotherbusinessand
financialinformationofLinkedIn.QatalystPartnersalsoreviewedcertainforward-lookinginformationrelatingtoLinkedInpreparedbythemanagementofLinkedIn,includingfinancial
projectionsandoperatingdatapreparedbythemanagementofLinkedIn,whichwerefertoastheLinkedInProjections,whicharedescribedinmoredetailbelowinthesectionofthisproxy
statementcaptionedTheMergerFinancialForecasts.Additionally,QatalystPartnersdiscussedthepastandcurrentoperationsandfinancialconditionandtheprospectsofLinkedInwith
seniorexecutivesofLinkedIn.QatalystPartnersalsoreviewedthehistoricalmarketpricesandtradingactivityfortheClassAcommonstockandcomparedthefinancialperformanceof
LinkedInandthepricesandtradingactivityoftheClassAcommonstockwiththatofcertainotherselectedpublicly-tradedcompaniesandtheirsecurities.Inaddition,QatalystPartners
reviewedthefinancialterms,totheextentpubliclyavailable,ofselectedacquisitiontransactionsandperformedsuchotheranalyses,reviewedsuchotherinformationandconsideredsuchother
factorsasQatalystPartnersdeemedappropriate.
Inarrivingatitsopinion,QatalystPartnersassumedandreliedupon,withoutindependentverification,theaccuracyandcompletenessoftheinformationthatwaspubliclyavailableor
suppliedorotherwisemadeavailableto,ordiscussedwith,QatalystPartnersbyLinkedIn.WithrespecttotheLinkedInProjections,QatalystPartnerswasadvisedbythemanagementof
LinkedIn,andQatalystPartnersassumed,thattheLinkedInProjectionshadbeenreasonablypreparedonbasesreflectingthebestcurrentlyavailableestimatesandjudgmentsofthe
managementofLinkedInofthefuturefinancialperformanceofLinkedInandothermatterscoveredthereby.QatalystPartnersassumedthatthemergerwillbeconsummatedinaccordancewith
thetermssetforthinthemergeragreement,withoutanymodification,waiverordelay.Inaddition,QatalystPartnersassumedthatinconnectionwiththereceiptofallthenecessaryapprovals
ofthemerger,nodelays,limitations,conditionsorrestrictionswillbeimposedthatcouldhaveanadverseeffectonLinkedInorthecontemplatedbenefitsexpectedtobederivedinthemerger.
QatalystPartnersdidnotmakeanyindependentevaluationor
49
TableofContents
appraisaloftheassetsorliabilities(contingentorotherwise)ofLinkedIn,norwasQatalystPartnersfurnishedwithanysuchevaluationorappraisal.Inaddition,QatalystPartnersrelied,without
independentverification,upontheassessmentofLinkedInmanagementastotheexistingandfuturetechnologyandproductsofLinkedInandtherisksassociatedwithsuchtechnologyand
products.QatalystPartnersopinionhasbeenapprovedbyQatalystPartnersopinioncommitteeinaccordancewithitscustomarypractice.
QatalystPartnersopinionisnecessarilybasedonfinancial,economic,marketandotherconditionsasineffecton,andtheinformationmadeavailabletoitasof,June11,2016.Events
occurringaftersuchdatemayaffectQatalystPartnersopinionandtheassumptionsusedinpreparingtheopinion,andQatalystPartnersdoesnotassumeanyobligationtoupdate,reviseor
reaffirmtheopinion.QatalystPartnersopiniondoesnotaddresstheunderlyingbusinessdecisionofLinkedIntoengageinthemerger,ortherelativemeritsofthemergerascomparedtoany
strategicalternativesthatmaybeavailabletoLinkedIn.QatalystPartnersopinionislimitedtothefairness,fromafinancialpointofview,ofthepersharemergerconsiderationtobereceived
bytheClassAholderspursuanttothemergeragreement,intheircapacityasClassAholders,andQatalystPartnersexpressesnoopinionwithrespecttothefairnessoftheamountornatureof
thecompensationtoanyofLinkedInsofficers,directorsoremployees,oranyclassofsuchpersons,relativetosuchconsideration.QatalystPartnersalsoexpressesnoopinionregardingthe
considerationtobereceivedbyanyholderofClassBcommonstockunderthemergeragreementinsuchholderscapacityasaholderofClassBcommonstock.
ThefollowingisabriefsummaryofthematerialanalysesperformedbyQatalystPartnersinconnectionwithitsopiniondatedJune11,2016.Theanalysesandfactorsdescribedbelow
mustbeconsideredasawhole;consideringanyportionofsuchanalysesorfactors,withoutconsideringallanalysesandfactors,couldcreateamisleadingorincompleteviewoftheprocess
underlyingQatalystPartnersopinion.Forpurposesofitsanalyses,QatalystPartnersutilizedboththeconsensusofthird-partyresearchanalystsprojectionsforLinkedIn,whichwerefertoas
theAnalystProjections,aswellastheLinkedInProjections.Someofthesummariesofthefinancialanalysesincludeinformationpresentedintabularformat.Thetablesarenotintendedto
standalone,andinordertomorefullyunderstandthefinancialanalysesusedbyQatalystPartners,thetablesmustbereadtogetherwiththefulltextofeachsummary.Consideringthedataset
forthbelowwithoutconsideringthefullnarrativedescriptionofthefinancialanalyses,includingthemethodologiesandassumptionsunderlyingtheanalyses,couldcreateamisleadingor
incompleteviewofQatalystPartnersfinancialanalyses.
Illustrative Discounted Cash Flow Analysis
QatalystPartnersperformedanillustrativediscountedcashflowanalysis,whichisdesignedtoimplyapotential,presentvalueofsharevaluesfortheClassAcommonstockasof
March31,2016by:
adding:
theimpliednetpresentvalueoftheestimatedfutureunleveredfreecashflowsofLinkedIn,basedontheLinkedInProjections,forthesecondthroughfourth
quartersofcalendaryear2016,andforcalendaryear2017throughcalendaryear2019(whichimpliedpresentvaluewascalculatedbyusingarangeofdiscountrates
of10.0%to13.0%,basedonanestimatedweightedaveragecostofcapitalforLinkedIn);
theimpliednetpresentvalueofacorrespondingterminalvalueofLinkedIn,calculatedbymultiplyingtheestimatedAdjustedEBITDA(asdescribedinthesection
ofthisproxystatementcaptionedTheMergerFinancialForecasts),lessanycapitalizedsoftwareandwebsitedevelopmentcosts(excludingcapitalizedstockbasedcompensation),whichwerefertoastheestimatedModifiedEBITDA,incalendaryear2020,basedontheLinkedInProjections,byarangeofmultiplesof
fully-dilutedenterprisevaluetonext-twelve-monthsestimatedModifiedEBITDAof12.0xto18.0xanddiscountedtopresentvalueusingthesamerangeofdiscount
ratesusedinthefirstbulletabove;
theimpliednetpresentvalueofLinkedInsforecastedtaxattributesoutstandingattheendofcalendaryear2020,basedontheLinkedInProjections(whichimplied
presentvaluewascalculatedbyusingthesamerangeofdiscountratesusedinthefirstbulletabove);and
50
TableofContents
LinkedInscashnetofthefacevalueofoutstandingconvertiblenotesandbookvalueofminorityinterests,asprovidedbyLinkedInmanagementasofMarch31,
2016;
applyingadilutionfactorofapproximately12%,asprojectedbyLinkedInmanagement,toreflectthedilutiontocurrentstockholdersovertheprojectionperiodduetothe
effectoffutureequitycompensationgrants;and
dividingtheresultingamountbythenumberoffully-dilutedsharesofcommonstockoutstandingasofMarch31,2016,adjustedforrestrictedstockunitsandstockoptions
outstandingasofMarch31,2016,asprovidedbyLinkedInmanagement.
Basedonthecalculationssetforthabove,thisanalysisimpliedarangeofvaluesforthesharesofcommonstockof$156.43to$238.39pershare.
Selected Companies Analysis
QatalystPartnerscomparedselectedfinancialinformationandpublicmarketmultiplesforLinkedInwithpubliclyavailableinformationandpublicmarketmultiplesforselected
companies.ThecompaniesusedinthiscomparisonwerethecompanieslistedbelowandwereselectedbecausetheyarepubliclytradedcompaniesinLinkedInsindustry.
Selected
Consumer
Internet
Companies
Alphabet,Inc.
Amazon.com,Inc.
Facebook,Inc.
TwitterInc.
Selected
SaaS
Companies
CornerstoneOnDemandInc.
NetSuiteInc.
Salesforce.com,Inc.
ServiceNow,Inc.
UltimateSoftwareGroup,Inc.
Workday,Inc.
Baseduponresearchanalystconsensusestimatesforcalendaryear2017,andusingtheclosingpricesasofJune10,2016,forsharesoftheselectedcompanies,QatalystPartners
calculated,amongotherthings,theimpliedfully
51
TableofContents
dilutedenterprisevaluedividedbytheestimatedconsensusModifiedEBITDAforcalendaryear2017,whichwerefertoastheCY17EModifiedEBITDAMultiples,foreachoftheselected
consumerinternetcompanies.ThemedianCY17EModifiedEBITDAMultiplefortheselectedconsumerinternetcompaniesanalyzedwas13.4x.
BasedonananalysisoftheCY17EModifiedEBITDAMultiplesforeachoftheselectedconsumerinternetcompanies,QatalystPartnersselectedarepresentativerangeof12.0xto
18.0xandappliedthisrangetoLinkedInscalendaryear2017estimatedModifiedEBITDAbasedoneachoftheAnalystProjectionsandtheLinkedInProjections.Basedonthecalculationsset
forthaboveandthenumberoffully-dilutedsharesofcommonstockoutstandingasofMay31,2016,asprovidedbyLinkedInmanagement,adjustedforrestrictedstockunitsandstockoptions
outstandingasofMay31,2016,asprovidedbyLinkedInmanagement,thisanalysisimpliedarangeofvaluesforthesharesofcommonstockofapproximately$122.35to$176.71pershare
basedontheLinkedInProjections,andapproximately$110.46to$158.89persharebasedontheAnalystProjections.
Baseduponresearchanalystconsensusestimatesforcalendaryear2017,andusingtheclosingpricesasofJune10,2016,forsharesoftheselectedcompanies,QatalystPartners
calculated,amongotherthings,theimpliedfullydilutedenterprisevaluedividedbyestimatedconsensusrevenueforcalendaryear2017,whichwerefertoastheCY17ERevenueMultiples,
foreachoftheselectedSaaScompanies.ThemedianCY17ERevenueMultiplefortheselectedsoftwareasaservice,orSaaS,companiesanalyzedwas6.2x.
BasedonananalysisoftheCY17ERevenueMultiplesforeachoftheselectedSaaScompanies,QatalystPartnersselectedarepresentativerangeof4.0xto7.0xandappliedthisrange
toLinkedInscalendaryear2017estimatedrevenuebasedoneachoftheAnalystProjectionsandtheLinkedInProjections.BasedonthecalculationssetforthaboveandthenumberoffullydilutedsharesofcommonstockoutstandingasofMay31,2016,asprovidedbyLinkedInmanagement,adjustedforrestrictedstockunitsandstockoptionsoutstandingasofMay31,2016,as
providedbyLinkedInmanagement,thisanalysisimpliedarangeofvaluesforthesharesofcommonstockofapproximately$142.17to$238.26persharebasedontheLinkedInProjections,
andapproximately$137.75to$230.58persharebasedontheAnalystProjections.
NocompanyincludedintheselectedcompaniesanalysisisidenticaltoLinkedIn.Inevaluatingtheselectedcompanies,QatalystPartnersmadejudgmentsandassumptionswithregard
to(1)industryperformance;(2)generalbusiness,economic,marketandfinancialconditions;and(3)othermatters.ManyofthesemattersarebeyondthecontrolofLinkedIn,suchas(1)the
impactofcompetitiononthebusinessofLinkedInandtheindustryingeneral;(2)industrygrowth;and(3)theabsenceofanymaterialadversechangeinthefinancialconditionandprospectsof
LinkedInortheindustryorinthefinancialmarketsingeneral.Mathematicalanalysis,suchasdeterminingthearithmeticmean,median,orthehighorlow,isnotinitselfameaningfulmethod
ofusingselectedcompanydata.
Selected Transactions Analysis
Selected
Consumer
Internet
Transactions
QatalystPartnerscompared11selectedconsumerinternettransactionsgreaterthan$1billioninvalueannouncedsince2009.Thesetransactionsarelistedbelow:
Announcement
Date
November04,2015
August17,2015
July01,2015
May12,2015
February12,2015
September11,2014
Target
HomeAway,Inc.
Zulily,Inc.
XoomCorporation
AOLInc.
OrbitzWorldwide,Inc.
Conversant,Inc.
52
Acquiror
Expedia,Inc.
LibertyMediaCorporation
PayPalHoldings,Inc.
VerizonCommunications
Expedia,Inc.
AllianceDataSystemsCorporation
TableofContents
September30,2014
Move,Inc.
NewsCorporation
July28,2014
Trulia,Inc.
ZillowGroup,Inc.
June13,2014
OpenTable,Inc.
ThePricelineGroup
November08,2012
KAYAKSoftwareCorporation
ThePricelineGroup
May10,2011
SkypeTechnologies
MicrosoftCorporation
Foreachoftheconsumerinternettransactionslistedabove,QatalystPartnersreviewed,amongotherthings,theimpliedfully-dilutedenterprisevalueofthetargetcompanyasa
multipleofanalystestimatesofthenext-twelve-monthsAdjustedEBITDAofthetargetcompany,whichwerefertoastheNTMAdjustedEBITDAMultiple,asreflectedincertainpublicly
availablefinancialstatements,researchanalystreportsandpressreleases.
BasedontheanalysisoftheNTMAdjustedEBITDAMultiplesforthetransactionsnotedabove,QatalystPartnersappliedanNTMAdjustedEBITDAMultiplerangeof17.0xto
27.0xtoLinkedInsestimatednext-twelve-monthsAdjustedEBITDAbasedonAnalystProjectionsandcalculatedforthe12monthperiodendingonMarch31,2017.Thisanalysisimplieda
rangeofvaluesforthesharesofcommonstockofapproximately$139.36to$213.39.
Selected
SaaS
Transactions
QatalystPartnerscompared20selectedSaaStransactionsgreaterthan$1billioninvalueannouncedsince2009.Thesetransactionsarelistedbelow:
Announcement
Date
June01,2016
May31,2016
April18,2016
November02,2015
September18,2014
March26,2014
March14,2014
March13,2014
December20,2013
June05,2013
June04,2013
August27,2012
May22,2012
February09,2012
December03,2011
October24,2011
July01,2011
Target
Demandware,Inc.
MarketoInc.
Cvent,Inc.
ConstantContact,Inc.
ConcurTechnologies,Inc.
FieldglassInc.
SkillsoftCorporation
RenaissanceLearningInc.
ResponsysInc.
hybrisAG
ExactTarget,Inc.
KenexaCorp.
AribaInc.
TaleoCorporation
SuccessFactors,Inc.
RightNowTechnologies
Blackboard,Inc.
53
Acquiror
Salesforce.com,Inc.
VistaEquityPartners
VistaEquityPartners
EnduranceInternationalGroup,Inc.
SAPSE
SAPSE
CharterhouseCapitalPartners
Hellman&FriedmanLLC
OracleCorporation
SAPSE
Salesforce.com,Inc.
InternationalBusinessMachinesCorporation
SAPSE
OracleCorporation
SAPSE
OracleCorporation
ProvidenceEquityPartnersLLC
TableofContents
March31,2010
SkillsoftCorporation
InvestorGroup
November02,2010
ArtTechnologyGroup
OracleCorporation
September15,2009
Omniture,Inc.
AdobeSystemsIncorporation
ForeachoftheSaaStransactionslistedabove,QatalystPartnersreviewed,amongotherthings,theimpliedfully-dilutedenterprisevalueofthetargetcompanyasamultipleofanalyst
estimatesofthenext-twelve-monthsrevenueofthetargetcompany,whichwerefertoastheNTMRevenueMultiples,asreflectedincertainpubliclyavailablefinancialstatements,research
analystreportsandpressreleases.
BasedontheanalysisoftheNTMRevenueMultiplesforthetransactionsnotedabove,QatalystPartnersappliedanNTMRevenueMultiplerangeof5.0xto9.0xtoLinkedIns
estimatednext-twelve-monthsrevenuebasedonAnalystProjectionsandcalculatedforthe12monthperiodendingonMarch31,2017.ThisanalysisimpliedarangeofvaluesfortheSharesof
approximately$149.41to$257.96.
NocompanyortransactionutilizedintheselectedtransactionsanalysisisidenticaltoLinkedInorthemerger.Inevaluatingtheselectedtransactions,QatalystPartnersmadejudgments
andassumptionswithregardtogeneralbusiness,marketandfinancialconditionsandothermatters,manyofwhicharebeyondthecontrolofLinkedIn,suchas(1)theimpactofcompetitionon
thebusinessofLinkedInortheindustrygenerally;(2)industrygrowth;and(3)theabsenceofanymaterialadversechangeinthefinancialconditionofLinkedInortheindustryorinthe
financialmarketsingeneral,whichcouldaffectthepublictradingvalueofthecompaniesandtheaggregatevalueofthetransactionstowhichtheyarebeingcompared.Becauseoftheunique
circumstancesofeachofthesetransactionsandthemerger,QatalystPartnerscautionsagainstplacingunduerelianceonthisinformation.
Miscellaneous
InconnectionwiththereviewofthemergerbytheLinkedInBoard,QatalystPartnersperformedavarietyoffinancialandcomparativeanalysesforpurposesofrenderingitsopinion.
Thepreparationofafinancialopinionisacomplexprocessandisnotnecessarilyamenabletoapartialanalysisorsummarydescription.Inarrivingatitsopinion,QatalystPartnersconsidered
theresultsofallofitsanalysesasawholeanddidnotattributeanyparticularweighttoanyanalysisorfactorthatitconsidered.QatalystPartnersbelievesthatselectinganyportionofits
analyses,withoutconsideringallanalysesasawhole,couldcreateamisleadingorincompleteviewoftheprocessunderlyingitsanalysesandopinion.Inaddition,QatalystPartnersmayhave
givenvariousanalysesandfactorsmoreorlessweightthanotheranalysesandfactors,andmayhavedeemedvariousassumptionsmoreorlessprobablethanotherassumptions.Asaresult,the
rangesofvaluationsresultingfromanyparticularanalysisdescribedaboveshouldnotbetakentobeQatalystPartnersviewoftheactualvalueofLinkedIn.Inperformingitsanalyses,Qatalyst
Partnersmadenumerousassumptionswithrespecttoindustryperformance,generalbusiness,economic,marketandfinancialconditionsandothermatters,manyofwhicharebeyondthe
controlofLinkedIn.AnyestimatescontainedinQatalystPartnersanalysesarenotnecessarilyindicativeoffutureresultsoractualvalues,whichmaybesignificantlymoreorlessfavorable
thanthosesuggestedbysuchestimates.
QatalystPartnersconductedtheanalysesdescribedabovesolelyaspartofitsanalysisofthefairness,fromafinancialpointofview,ofthepersharemergerconsiderationtobe
receivedbytheClassAholderspursuanttothemergeragreement,intheircapacityasClassAholders,andinconnectionwiththedeliveryofitsopiniontotheLinkedInBoard.Theseanalyses
donotpurporttobeappraisalsortoreflectthepriceatwhichthesharesofClassAcommonstockmightactuallytrade.
QatalystPartnersopinionanditspresentationtotheLinkedInBoardwasoneofmanyfactorsconsideredbytheLinkedInBoardindecidingtoapprovethemergeragreement.
Consequently,theanalysesasdescribedaboveshouldnotbeviewedasdeterminativeoftheopinionoftheLinkedInBoardwithrespecttothepersharemergerconsiderationtobereceivedby
theClassAholderspursuanttothemergeragreement,intheircapacityasClassAholders,orofwhethertheLinkedInBoardwouldhavebeenwillingtoagreetoadifferentconsideration.The
persharemergerconsiderationwas
54
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determinedthrougharms-lengthnegotiationsbetweenLinkedInandMicrosoftandwasapprovedbytheLinkedInBoard.QatalystPartnersprovidedadvicetoLinkedInduringthese
negotiations.QatalystPartnersdidnot,however,recommendanyspecificconsiderationtoLinkedInorthatanyspecificconsiderationconstitutedtheonlyappropriateconsiderationforthe
merger.
QatalystPartnersprovidesinvestmentbankingandotherservicestoawiderangeofentitiesandindividuals,domesticallyandoffshore,fromwhichconflictinginterestsordutiesmay
arise.Intheordinarycourseoftheseactivities,affiliatesofQatalystPartnersmayatanytimeholdlongorshortpositions,andmaytradeorotherwiseeffecttransactionsindebtorequity
securitiesorloansofLinkedIn,Microsoftorcertainoftheirrespectiveaffiliates.DuringthetwoyearperiodpriortothedateofQatalystPartnersopinion,nomaterialrelationshipexisted
betweenQatalystPartnersoranyofitsaffiliatesandLinkedInorMicrosoftpursuanttowhichcompensationwasreceivedbyQatalystPartnersoranyofitsaffiliates.QatalystPartnersorits
affiliatesmayinthefutureprovideinvestmentbankingandotherfinancialservicestoLinkedInandMicrosoftandtheirrespectiveaffiliatesforwhichitortheywouldexpecttoreceive
compensation.
Underthetermsofitsengagementletter,QatalystPartnersprovidedLinkedInwithfinancialadvisoryservicesinconnectionwithacontemplatedsaleofLinkedIn,whichincludesthe
merger,andforwhichitwillbepaidapproximately$55million,$250,000ofwhichwaspayableupontheexecutionofitsengagementletter,$7.5millionofwhichbecamepayableupon
deliveryofitsopinion(regardlessoftheconclusionreachedintheopinion),andtheremainingportionofwhichwillbepaidupon,andsubjectto,consummationofthemerger.LinkedInhas
alsoagreedtoreimburseQatalystPartnersforitsexpensesincurredinperformingitsservices.LinkedInhasalsoagreedtoindemnifyQatalystPartnersanditsaffiliates,theirrespective
members,directors,officers,partners,agentsandemployeesandanypersoncontrollingQatalystPartnersoranyofitsaffiliatesagainstcertainliabilities,includingliabilitiesunderfederal
securitieslaw,andcertainexpensesrelatingtoorarisingoutofQatalystPartnersengagement.
Financial
Forecasts
LinkedIndoesnotasamatterofcoursemakepublicprojectionsastofuturesales,earnings,orotherresults.However,LinkedInmanagementhaspreparedtheprospectivefinancial
informationsetforthbelowtoprovidefinancialforecaststobothQatalystPartnersandMicrosoftinconnectionwithMicrosoftsacquisitionofLinkedIn.Werefertotheforecastsfor2016to
2020astheForecasts.
Theaccompanyingprospectivefinancialinformationwerenotpreparedwithaviewtowardpublicdisclosureorwithaviewtowardcomplyingwiththeguidelinesestablishedbythe
AmericanInstituteofCertifiedPublicAccountantswithrespecttoprospectivefinancialinformation,but,intheviewofLinkedInmanagement,waspreparedonareasonablebasis,reflectsthe
bestcurrentlyavailableestimatesandjudgments,andpresents,tothebestofLinkedInmanagementsknowledgeandbelief,theexpectedcourseofactionandtheexpectedfuturefinancial
performanceofLinkedIn.However,thisinformationisnotfactandshouldnotberelieduponasbeingnecessarilyindicativeoffutureresults,andreadersofthisproxystatementarecautioned
nottoplaceunduerelianceontheprospectivefinancialinformation.
NeitherLinkedInsindependentauditors,noranyotherindependentaccountants,havecompiled,examined,orperformedanyprocedureswithrespecttotheprospectivefinancial
informationcontainedherein,norhavetheyexpressedanyopinionoranyotherformofassuranceonsuchinformationoritsachievability,andassumenoresponsibilityfor,anddisclaimany
associationwith,theprospectivefinancialinformation.
ReadersofthisproxystatementarecautionednottoplaceunduerelianceonthespecificportionsoftheForecastssetforthbelow.AlthoughtheForecastsarepresentedwithnumerical
specificity,theForecastsreflectnumerousassumptionsandestimatesastofutureeventsmadebyLinkedInmanagementthattheybelievedwerereasonableatthetimetheForecastswere
prepared,takingintoaccounttherelevantinformationavailabletoLinkedInmanagementatthetime.However,thisinformationisnotfactandshouldnotberelieduponasbeingnecessarily
indicativeofactualfutureresults.ImportantfactorsthatmayaffectactualresultsandcausetheForecastsnottobeachievedinclude(1)generaleconomicconditions;(2)theaccuracyofcertain
accountingassumptions;(3)changesinactualorprojectedcashflows;(4)competitivepressures;and(5)changesintaxlaws.Inaddition,theForecastsdonottakeintoaccountany
circumstancesoreventsoccurringafterthedatethattheywerepreparedanddonotgiveeffecttothemerger.Asaresult,therecanbenoassurancethattheForecastswillberealized,andactual
resultsmaybemateriallybetterorworsethanthosecontainedintheForecasts.TheinclusionofthisinformationshouldnotberegardedasanindicationthattheLinkedInBoard,LinkedInor
anyotherrecipientofthisinformationconsidered,ornowconsiders,theForecaststobepredictiveofactualfutureresults.TheForecastsarenotincludedinthisproxystatementinorderto
induceanyLinkedInstockholdertovoteinfavoroftheproposaltoadoptthemergeragreementoranyoftheotherproposalstobevotedonatthespecialmeeting.LinkedIn
does
not
intend
to
update
or
otherwise
revise
the
Forecasts
to
reflect
circumstances
existing
after
the
date
when
made
or
to
reflect
the
occurrence
of
future
events,
even
in
the
event
that
any
or
all
of
the
assumptions
underlying
the
Forecasts
are
shown
to
be
in
error
or
no
longer
appropriate.
Forecasts
2016E
2017E
2018E
(in
millions)
2019E
2020E
Totalrevenue
$
3,738
$
4,615
$
5,529
$
6,421
$
7,365
AdjustedEBITDA
$
1,031
$
1,391
$
1,824
$
2,236
$
2,666
ModifiedEBITDA
$
954
$
1,301
$
1,728
$
2,136
$
2,571
Leveredfreecashflow
$
458
$
894
$
1,367
$
1,691
$
2,107
Non-GAAP Financial Measures
AdjustedEBITDAandModifiedEBITDAarenon-GAAPfinancialmeasures.Thepresentationofthisfinancialinformationisnotintendedtobeconsideredinisolationorasa
substitutefor,orsuperiorto,thefinancialinformationpreparedandpresentedinaccordancewithGAAP.LinkedInusesthesenon-GAAPfinancialmeasuresforfinancialandoperational
decisionmakingandasameanstoevaluateperiod-to-periodcomparisons.LinkedIn
55
TableofContents
believesthatthesenon-GAAPfinancialmeasuresprovideusefulinformationaboutoperatingresults,enhancetheoverallunderstandingofpastfinancialperformanceandfutureprospectsand
allowforgreatertransparencywithrespecttokeymetricsusedbymanagementinitsfinancialandoperationaldecisionmaking.Thenon-GAAPfinancialmeasuresincludedbyLinkedIninthe
ForecastsaredefinedandreconciledtoGAAPfinancialmeasuresbelow.
Adjusted
EBITDA
AdjustedEBITDAisdefinedasnetincome(loss),plus:provisionforincometaxes;other(income)expense,net;depreciationandamortization;andstock-basedcompensation.
LinkedInincludedadjustedEBITDAintheForecastsbecauseitisakeymeasureusedbyLinkedInmanagementandtheLinkedInBoardtounderstandandevaluateLinkedInscore
operatingperformanceandtrends,toprepareandapproveLinkedInsannualbudgetandtodevelopshort-andlong-termoperationalplans.Inparticular,theexclusionofcertainexpensesin
calculatingadjustedEBITDAcanprovideausefulmeasureforperiod-to-periodcomparisonsofLinkedInscorebusiness.Additionally,adjustedEBITDAisakeyfinancialmeasureusedbythe
compensationcommitteeoftheLinkedInBoardinconnectionwiththepaymentofbonusestoourexecutiveofficersandemployees.Accordingly,LinkedInbelievesthatadjustedEBITDA
providesusefulinformationinunderstandingandevaluatingLinkedInsprojectionsinthesamemannerasLinkedInmanagementandtheLinkedInBoard.
LinkedInsuseofadjustedEBITDAhaslimitationsasananalyticaltool,andyoushouldnotconsideritinisolationorasasubstituteforanalysisofourresultsasreportedunderUS
GAAP.Someoftheselimitationsare:althoughdepreciationandamortizationarenon-cashcharges,theassetsbeingdepreciatedandamortizedmayhavetobereplacedinthefuture,and
adjustedEBITDAdoesnotreflectcashcapitalexpenditurerequirementsforsuchreplacementsorfornewcapitalexpenditurerequirements;adjustedEBITDAdoesnotreflectchangesin,or
cashrequirementsfor,LinkedInsworkingcapitalneeds;adjustedEBITDAdoesnotconsiderthepotentiallydilutiveimpactofstock-basedcompensation;adjustedEBITDAdoesnotreflecttax
paymentsthatmayrepresentareductionincashavailabletous;andothercompanies,includingcompaniesinLinkedInsindustry,maycalculateadjustedEBITDAdifferently,whichreduces
itsusefulnessasacomparativemeasure.
Becauseoftheselimitations,youshouldconsideradjustedEBITDAalongsideotherfinancialperformancemeasures,includingvariouscashflowmetrics,netincome(loss)andour
otherUSGAAPresults.
Modified
EBITDA
ModifiedEBITDAisdefinedasnetincome(loss),plus:provisionforincometaxes;other(income)expense,net;depreciationandamortization;stock-basedcompensation;and
capitalizedsoftwareandwebsitecosts.
LinkedInincludedmodifiedEBITDAintheForecastsbecauseitprovidedanothermeasurebywhichtoevaluateLinkedInscoreoperatingperformanceandtrends.Inparticular,the
exclusionofcertainexpensesincalculatingmodifiedEBITDAcanprovideausefulmeasureforperiod-to-periodcomparisonsofLinkedInscorebusiness.Accordingly,LinkedInbelievesthat
modifiedEBITDAprovidesusefulinformationinunderstandingandevaluatingLinkedInsprojectionsinthesamemannerasLinkedInmanagementandtheLinkedInBoarduseditin
evaluatingthetransaction.
LinkedInsuseofmodifiedEBITDAhaslimitationsasananalyticaltool,andyoushouldnotconsideritinisolationorasasubstituteforanalysisofourresultsasreportedunderUS
GAAP.Someoftheselimitationsare:althoughdepreciationandamortizationarenon-cashcharges,theassetsbeingdepreciatedandamortizedmayhavetobereplacedinthefuture,and
modifiedEBITDAdoesnotreflectcashcapitalexpenditurerequirementsforsuchreplacementsorfornewcapitalexpenditurerequirements;modifiedEBITDAdoesnotreflectchangesin,or
cashrequirementsfor,LinkedInsworkingcapitalneeds;modifiedEBITDAdoesnotconsiderthepotentiallydilutiveimpactofstock-basedcompensation;modifiedEBITDAdoesnotreflect
taxpaymentsthatmayrepresentareductionincashavailabletous;andothercompanies,includingcompaniesinLinkedInsindustry,maycalculatemodifiedEBITDAdifferently,which
reducesitsusefulnessasacomparativemeasure.
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TableofContents
Becauseoftheselimitations,youshouldconsidermodifiedEBITDAalongsideotherfinancialperformancemeasures,includingvariouscashflowmetrics,netincome(loss)andour
otherUSGAAPresults.
Reconciliation of Adjusted EBITDA to Net Income
TheForecastsincludeaforecastofLinkedInsadjustedEBITDA.ThefollowingtablepresentsareconciliationofadjustedEBITDAtonetincome(loss),themostdirectlycomparable
GAAPfinancialmeasure.Otherthaninconnectionwiththepreparationofthisproxystatement,LinkedIndidnotprovideMicrosoftwiththisreconciliation.
2016E
2017E
2018E
(in
millions)
Netincome(loss)
Addback:
Provision(benefit)forincometaxes
Otherexpense,net
Depreciationandamortization
Stock-basedcompensation
AdjustedEBITDA
(275)
44
565
831
163
68
621
669
1,824
24
63
626
634
1,391
97
58
570
581
1,031
2020E
303
2019E
304
65
615
687
2,236
447
25
630
733
2,666
Reconciliation of Modified EBITDA to Net Income
TheForecastsincludeaforecastofLinkedInsmodifiedEBITDA.ThefollowingtablepresentsareconciliationofmodifiedEBITDAtonetincome(loss),themostdirectly
comparableGAAPfinancialmeasure.Otherthaninconnectionwiththepreparationofthisproxystatement,LinkedIndidnotprovideMicrosoftwiththisreconciliation.
2016E
2017E
2018E
(in
millions)
Netincome(loss)
Addback:
Provision(benefit)forincometaxes
Otherexpense,net
Depreciationandamortization
Stock-basedcompensation
Capitalizedsoftwareandwebsitecosts
ModifiedEBITDA
(275)
44
97
58
570
581
(77)
954
24
63
626
634
(90)
1,301
57
163
68
621
669
(96)
1,728
304
65
615
687
(100)
2,136
831
565
2020E
303
2019E
447
25
630
733
(95)
2,571
TableofContents
Interests
of
LinkedIns
Directors
and
Executive
Officers
in
the
Merger
WhenconsideringtherecommendationoftheLinkedInBoardthatyouvotetoapprovetheproposaltoadoptthemergeragreement,youshouldbeawarethatourdirectorsand
executiveofficershaveinterestsinthemergerthataredifferentfrom,orinadditionto,theinterestsofLinkedInstockholdersgenerally,asmorefullydescribedbelow.TheLinkedInBoardwas
awareofandconsideredtheseintereststotheextentthattheyexistedatthetime,amongothermatters,inapprovingthemergeragreementandthemergerandrecommendingthatthemerger
agreementbeadoptedbyLinkedInsstockholders.
Insurance and Indemnification of Directors and Executive Officers
Formoreinformation,seethesectionofthisproxystatementcaptionedTheMergerAgreementIndemnificationandInsurance.
Treatment of Equity-Based Awards
Treatment
of
Company
Options
]outstandingcompanyoptionsheldbyourdirectorsandexecutiveofficers,ofwhich[
]haveanexercisepricebelow$196.00pershare.
Eachsurrenderedcompanyoptionwill,asoftheeffectivetimeofthemerger,becancelledandconvertedintotherighttoreceivethepersharemergerconsiderationof$196.00for
eachshareofLinkedIncommonstockthatwouldhave
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TableofContents
beenissuableuponexerciseofsuchsurrenderedcompanyoptionpriortotheeffectivetimeofthemergerlesstheapplicableexercisepriceforeachsuchshareofLinkedIncommonstockunder
suchsurrenderedcompanyoptionandlessanyapplicablewithholdingtaxes.Ifthepershareexercisepriceofanysurrenderedcompanyoptionisequaltoorgreaterthan$196.00,such
surrenderedcompanyoptionwillbecancelledasoftheeffectivetimeofthemergerfornopaymentandwillhavenofurthereffect.
Eachassumedcompanyoptionwill,asoftheeffectivetimeofthemerger,be,asdeterminedbyMicrosoft,(1)assumedbyMicrosoftandconvertedintoanoptiontoacquire;or
(2)convertedintoanoptiongrantedpursuanttotheMicrosoftstockplan,toacquire,ineachcase,onthesamematerialtermsandconditionsaswereapplicabletosuchassumedcompany
optionimmediatelypriortotheeffectivetimeofthemerger,anumberofsharesofMicrosoftcommonstockequaltotheproduct(roundeddowntothenearestwholeshare)of(1)thenumberof
sharesofLinkedIncommonstocksubjecttosuchassumedcompanyoptionasofimmediatelypriortotheeffectivetimeofthemergermultipliedby(2)thestockawardexchangeratio.Theper
shareexercisepriceforassumedcompanyoptionswillequalthequotient(roundeduptothenearestwholecent)determinedbydividingthe(1)pershareexercisepricefortheLinkedIn
commonstocksubjecttosuchassumedcompanyoptionasofimmediatelypriortotheeffectivetimeofthemergerby(2)thestockawardexchangeratio.Eachcompanyoptionthatis
outstandingasofimmediatelypriortotheeffectivetimeofthemerger,hasanexercisepricepersharethatisequaltoorgreaterthan$196.00andisnotasurrenderedcompanyoptionwillbe
cancelledasoftheeffectivetimeofthemergerfornopaymentandwillhavenofurthereffect.
options,whichwillbecomefullyvestedandthencancelledandtreatedinaccordancewiththeabove.
Inaddition,eachexecutiveofficeriseligibletoreceiveimmediatevestingof100%or50%,asapplicable,ofhisorheroutstandingcompanyoptions,underhisorherofferletteror
changeofcontrolagreementif,within12monthsfollowingthemerger,thereisaninvoluntaryterminationofemploymentwithoutcause,oraconstructivetermination.
Forpurposesofthemergeragreement,thestockawardexchangeratiomeansafraction,thenumeratorofwhichis$196.00andthedenominatorofwhichisthevolumeweighted
averagepricepershareroundedtofourdecimalplaces(withamounts0.00005andaboveroundedup)ofMicrosoftcommonstockonNasdaqforthefiveconsecutivetradingdaysendingwith
thecompletetradingdayendingimmediatelypriortotheclosingdateofthemerger.
Treatment
of
Company
Stock-Based
Awards
]outstandingRSUsheldbyourdirectorsandexecutiveofficers.Ourdirectorsandofficersdonotholdanyothertypeofcompanystock-based
award.
Eachsurrenderedcompanystock-basedawardwill,asoftheeffectivetimeofthemerger,becancelledandconvertedintotherighttoreceivethepersharemergerconsiderationof
$196.00withrespecttoeachshareofLinkedIncommonstocksubjecttothesurrenderedcompany-stockbasedaward,lessanyapplicablewithholdingtaxes.
Non-employeedirectorsofLinkedInarenotexpectedtocontinueasdirectorsafterthemerger,andpursuanttothetermsoftheLinkedIn2011EquityIncentivePlan,asaresultofnot
continuingasadirectorafterthemerger,the3,102RSUseachheldbyA.GeorgeSkipBattle,LeslieKilgoreandStanleyMeresmanwillvestinconnectionwiththemergerandsuch
individualswillreceivethecashpaymentforsurrenderedcompanystock-basedawardsdescribedintheaboveparagraphwithrespecttothesharessubjecttotheirRSUs.
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TableofContents
Eachassumedcompanystock-basedawardwill,asoftheeffectivetimeofthemerger,be,asdeterminedbyMicrosoft,(1)assumedbyMicrosoftandconvertedintoastock-based
award;or(2)convertedintoastock-basedawardgrantedpursuanttotheMicrosoftstockplan,ineachcasewiththesamematerialtermsandconditionsaswereapplicabletosuchassumed
companystock-basedawardimmediatelypriortotheeffectivetimeofthemerger,inrespectofanumberofsharesofMicrosoftcommonstockequaltotheproduct(roundeddowntothe
nearestwholeshare)of(1)thenumberofsharesofLinkedIncommonstocksubjecttosuchassumedcompanystock-basedawardasofimmediatelypriortotheeffectivetimeofthemerger
multipliedby(2)thestockawardexchangeratio.
surrenderedcompanystock-basedawards,whichwillbecomefullyvestedandthencancelledandtreatedinaccordancewiththeabove.
Inaddition,eachexecutiveofficeriseligibletoreceiveimmediatevestingof100%or50%,asapplicable,ofhisorheroutstandingRSUs,underhisorherofferletterorchangeof
controlagreementif,within12monthsfollowingthemerger,thereisaninvoluntaryterminationofemploymentwithoutcause,oraconstructivetermination,asdescribedmorefullybelow.
Equity Interests of LinkedIns Executive Officers and Non-Employee Directors
ThefollowingtablesetsforthforeachLinkedInexecutiveofficeranddirector,asofJune15,2016,(1)thenumberofsharesofcommonstockheld;(2)thenumberofsharesof
commonstocksubjecttooutstandingandvestedcompanyoptionswithanexercisepricelessthan$196.00pershare;(3)thenumberofsharesofcommonstocksubjecttounvestedcompany
optionswithanexercisepricelessthan$196.00persharethatwillvestuponaqualifyingterminationofemployment;and(4)thenumberofsharesofcommonstocksubjecttounderlyingRSUs
thatwillvestinconnectionwiththemergeroruponaqualifyingterminationofemployment.Thetablesetsforththevaluesofthesesharesandequityawardsbasedonthe$196.00pershare
mergerconsideration(minustheapplicableexercisepriceforthecompanyoptions).
Inconnectionwiththemerger,LinkedInintendstograntJeffreyWeineracompanystock-basedawardintheformofRSUswiththenumberofRSUsdeterminedbydividing
$7,000,000bythepersharemergerconsiderationasoftheclosingofthemerger,whichwerefertoastheWeinerRetentionGrant.TheWeinerRetentionGrantwillbegrantedimmediately
priortotheclosingofthemergerandwillbesubjecttoMr.WeinerscontinuedemploymentwithLinkedInthroughandincludingthedateofgrant.TheWeinerRetentionGrantwillbe
scheduledtovestontheearlierof(1)theoneyearanniversaryoftheclosingdateofthemergerand(2)December31,2017,andwillbesubjecttotheseveranceprovisions(includingasto
equityacceleration)setforthinMr.Weinersofferletter,asdescribedmorefullybelow.EventhoughtheWeinerRetentionGrantwillnotbegranteduntilimmediatelypriortotheclosingof
themerger,itisincludedinthetablebelow.
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TableofContents
Equity
Interests
of
LinkedIns
Executive
Officers
and
Non-Employee
Directors
Name
JeffreyWeiner(8)
StevenSordello
MichaelCallahan
MichaelGamson
PatriciaWadors
J.KevinScott
A.GeorgeSkipBattle
ReidHoffman(9)
LeslieKilgore
StanleyMeresman
MichaelMoritz
DavidSze
Shares
Held
(#)
112,211
172,861
8,143
111,982
854
4,709
18,337
14,489,899
41,352
4,854
671,620
30,908
Shares
Held
($)(1)
21,993,356
33,880,756
1,596,028
21,948,472
167,384
922,964
3,594,052
2,840,020,204
8,104,992
951,384
131,637,520
6,057,968
Number
of
Shares
Subject
to
Vested
Options
(#)(2)
740,800
36,726
12,339
3,693
1,318
188,457
2,433
2,433
Value
of
Number
of
Shares
Subject
to
Vested
Options
($)(3)
99,647,409
937,982
616,346
94,319
31,606
36,500,352
58,344
58,344
Number
of
Shares
Subject
to
Unvested
Options
Accelerating
upon
a
Qualifying
Termination
(#)(4)
68,601
24,064
12,560
4,262
15,884
Value
of
Number
of
Shares
Subject
to
Unvested
Options
Accelerating
upon
a
Qualifying
Termination
($)(5)
1,752,070
614,595
320,782
147,721
405,677
Number
of
RSUs
Accelerating
upon
the
Merger
or
a
Qualifying
Termination
(#)(6)
75,891
65,144
51,289
33,481
23,113
55,524
3,102
3,102
3,102
Value
of
RSUs
Accelerating
Upon
a
Merger
or
a
Qualifying
Termination
($)(7)
14,874,636
12,768,224
10,052,644
6,562,276
4,530,148
10,882,704
607,992
607,992
607,992
Total
($)
138,267,471
48,201,557
11,648,672
29,447,876
4,845,253
12,305,664
4,233,650
2,876,520,556
8,771,328
1,617,720
131,637,520
6,057,968
(1)Thisamountistheproductofthesharesofcommonstockheldbytheindividual,multipliedby$196.00.
(2)Thisamountreflectsthenumberofvestedcompanyoptionswithapershareexercisepricelessthan$196.00heldbytheindividual,assumingthattheeffectivetimeofthemergeroccursonJune15,2016.
(3)Thisamountreflectsthecashpaymentpaidtoeachindividualastheresultofhisorhervestedcompanyoptions,andtheproductobtainedbymultiplyingtheaggregatenumberofsharesofLinkedIncommonstockthatwereissuableupontheexerciseofthevested
companyoptionslistedintheNumberofSharesSubjecttoVestedOptionscolumn,bytheexcessof$196.00overtheexercisepriceofsuchvestedcompanyoption.ThiscolumnassumesthatMicrosoftwillnotchoosetotreatanyunvestedcompanyoptionsas
surrenderedcompanyoptions.
(4)Thisamountreflectsthenumberofunvestedcompanyoptionswithapershareexercisepricelessthan$196.00heldbytheindividualthatwillaccelerateuponaqualifyingtermination,assumingthattheeffectivetimeofthemergeroccursonJune15,2016.Each
executiveofficeriseligibletoreceiveimmediatevestingof100%(forMessrs.Weiner,SordelloandCallahan)or50%(forMessrs.GamsonandScottandMs.Wadors),asapplicable,ofhisorheroutstandingcompanyoptions,underhisorherofferletterorchange
ofcontrolagreementif,within12monthsfollowingthemerger,thereisaninvoluntaryterminationofemploymentwithoutcause,oraconstructivetermination,asdescribedmorefullybelow.
(5)Thisamountreflectsthecashpaymentpaidtoeachindividualastheresultofhisorheracceleratedunvestedcompanyoptions,andtheproductobtainedbymultiplyingtheaggregatenumberofsharesofLinkedIncommonstocklistedintheNumberofShares
SubjecttoUnvestedOptionsAcceleratinguponaQualifyingTerminationcolumn,bytheexcessof$196.00overtheexercisepriceofsuchcompanyoption.ThiscolumnassumesthatMicrosoftwillnotchoosetotreatanyunvestedcompanyoptionsassurrendered
companyoptions.
(6)ThisamountreflectsthenumberofunvestedRSUsheldbytheindividualthatwillaccelerateuponthemergeroraqualifyingtermination,assumingthattheeffectivetimeofthemergeroccursonJune15,2016.Eachexecutiveofficeriseligibletoreceive
immediatevestingof100%(forMessrs.Weiner,SordelloandCallahan)or50%(forMessrs.GamsonandScottandMs.Wadors),asapplicable,ofhisorheroutstandingRSUs,underhisorherofferletterorchangeofcontrolagreementif,within12months
followingthemerger,thereisaninvoluntaryterminationofemploymentwithoutcause,oraconstructivetermination,asdescribedmorefullybelow.TheRSUsheldbyA.GeorgeSkipBattle,LeslieKilgoreandStanleyMeresman,whowillceasetobedirectors
followingthemerger,willvestinconnectionwiththemergerpursuanttothetermsoftheLinkedIn2011EquityIncentivePlan.
(7)ThisamountreflectsthecashpaymentpaidtoeachindividualastheresultofhisorheracceleratedRSUs,andtheproductobtainedbymultiplyingtheaggregatenumberofacceleratedRSUslistedintheNumberofRSUsAcceleratingupontheMergerora
QualifyingTerminationcolumn,by$196.00.ThiscolumnassumesthatMicrosoftwillnotchoosetotreatanyunvestedRSUsassurrenderedstock-basedawards.
(8)TheequityinterestsofMr.Weinerdonotinclude188,457sharesofClassBcommonstockissuablepursuanttoastockoptionoriginallyissuedtoMr.Weiner,whichweretransferredtotheWeiner2012IrrevocableTrust.Mr.HoffmanisthetrusteeoftheWeiner
2012IrrevocableTrust.
(9)TheequityinterestsofMr.Hoffmaninclude188,457sharesofClassBcommonstockissuablepursuanttoastockoptionoriginallyissuedtoMr.Weiner,whichweretransferredtotheWeiner2012IrrevocableTrust.Mr.HoffmanisthetrusteeoftheWeiner2012
IrrevocableTrust.Mr.Hoffmandisclaimsallpecuniaryandbeneficialinterestinsuchoptionandunderlyingshares.
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TableofContents
Payments Upon Termination Following Change of Control
Offer
Letter
with
Jeffrey
Weiner
LinkedInsofferletteragreementwithMr.Weiner,asamended,providesthatifwithin12monthsfollowinganychangeofcontrol,Mr.Weinersemploymentisinvoluntarily
terminatedwithoutcauseorifheisconstructivelyterminatedfollowingsuchchangeofcontrol,thenuponsuchterminationMr.Weinerwillreceivethefollowingseverancepaymentsand
benefits:
alump-sumpaymentpayableonthe60thdayfollowingterminationofemploymentequalto12monthsofhisbasesalaryattherateineffectonthedateoftermination,or,if
greater,therateineffectimmediatelypriortothechangeofcontrol;
alump-sumpaymentpayableonthe60thdayfollowingterminationofemploymentequaltoMr.Weinersannualtargetbonus(corporateandindividualperformancecomponents
at100%ofannualtarget)fortheyearoftermination,or,ifgreater,Mr.Weinersannualtargetbonusineffectimmediatelypriortothechangeofcontrol;
paymentofCOBRApremiumsforMr.Weiner,hisspouseandeligibledependentsforupto12months;and
immediatevestingasto100%ofMr.Weinersoutstandingequityawards.
Mr.Weinersofferletterfurtherprovidesthatintheeventofaterminationwithoutcauseoraconstructiveterminationthatdoesnotoccurwithin12monthsfollowingachangeof
control,Mr.Weinerwillreceivethefollowingseverancepaymentsandbenefits:
sixmonthsbasesalarycontinuation;
sixmonthsreimbursementforCOBRA;and
threemonthscontinuedvestingofoutstandingshares.
ThereceiptofanyseverancepaymentsandbenefitsisconditionedonMr.WeinersigningandnotrevokingLinkedInsthencurrentstandardformofrelease.
ForpurposesofMr.Weinersofferletter,thetermcausemeansMr.Weiner:
engaginginknowingandintentionalillegalconductthatwasorismateriallyinjurioustoLinkedInoritsaffiliates;
violatingafederalorstatelaworregulationapplicabletoLinkedInsbusinesswhichviolationwasorisreasonablylikelytobeinjurioustoLinkedIn;
materiallybreachingthetermsofanyconfidentialityagreementorinventionassignmentagreementwithLinkedIn;
beingconvictedof,orenteringapleaofnolocontendereto,afelonyorcommittinganyactofmoralturpitude,dishonestyorfraudagainst,orthemisappropriationofmaterial
propertybelongingto,LinkedInoritsaffiliates.
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ForpurposesofMr.Weinersofferletter,thetermchangeofcontrolmeans:
theconsummationofareorganization,mergerorconsolidation,orsaleorotherdispositionofallorsubstantiallyallofLinkedInsassets,ortheacquisitionofassetsofanother
corporationorentity,orothersimilartransaction,whichwerefertoasabusinesscombination,unless,ineachcase,immediatelyfollowingsuchbusinesscombination(1)allor
substantiallyalloftheindividualsandentitieswhowerethebeneficialownersofvotingstockofLinkedInimmediatelypriortosuchbusinesscombinationbeneficiallyown,
directlyorindirectly,morethan55%ofthecombinedvotingpowerofthethenoutstandingsharesofvotingstockoftheentityresultingfromsuchbusinesscombination
(including,withoutlimitation,anentitywhichasaresultofsuchtransactionownsLinkedInorallorsubstantiallyallofLinkedInsassetseitherdirectlyorthroughoneormore
subsidiaries);and(2)atleastamajorityofthemembersoftheboardofdirectorsoftheentityresultingfromsuchbusinesscombinationweremembersoftheLinkedInBoardat
thetimeoftheexecutionoftheinitialagreementoroftheactionoftheLinkedInBoardprovidingforsuchbusinesscombination.
ForpurposesofMr.Weinersofferletter,thetermconstructiveterminationmeans,withoutMr.Weinerswrittenconsent:
areductioninbasesalary,otherthanareductioninsalarythatispartofanexpensereductioneffortappliedtotheexecutivemanagementteam(definedastheChiefExecutive
OfficerandtheChiefExecutiveOfficersdirectreports)generallyandwhichresultsinapercentagereductionofsalaryorbonusnogreaterthanthegreatestpercentagereduction
appliedtoatleastoneothermemberoftheexecutivemanagementteam;
arelocationoftheprincipalplaceofworktoalocationmorethan35milesawayfromtheworkplacepriortotherelocation;or
thesignificationreductionofdutiesorresponsibilitieswhencomparedtodutiesorresponsibilitiesineffectimmediatelypriortosuchchange;itisunderstood,however,thatif,
followingachangeofcontrolpursuanttowhichLinkedInbecomespartofalargerentitybutremainsaseparatebusinessentity,continuingtobethegeneralmanagerofsuch
businessentity(orasuccessorentity)andretainingresponsibilityformanagingthedaytodayoperationsofsuchbusinessentity(evenifLinkedInisapartofsuchlargerentity
and/ortheindividualisnolongerreportingtoorinteractingwiththeboardofdirectorsofeitherLinkedInortheacquiringentityornolongerretainingthetitleofChiefExecutive
Officer)willnotbeconsideredaconstructiveterminationundertheforegoing.
Offer
Letter
with
Steven
Sordello
LinkedInsofferletterwithMr.Sordello,asamended,providesthatifwithin12monthsfollowingachangeofcontrol,Mr.Sordellosemploymentisinvoluntarilyterminated
withoutcauseorifheisconstructivelyterminated,thenuponsuchterminationMr.Sordellowillreceivethefollowingseverancepaymentsandbenefits:
alump-sumpaymentpayableonthe60thdayfollowingterminationofemploymentequalto12monthsofhisbasesalaryattherateineffectonthedateoftermination,or,if
greater,therateineffectimmediatelypriortothechangeofcontrol;
alump-sumpaymentpayableonthe60thdayfollowingterminationofemploymentequaltoMr.Sordellosannualtargetbonus(corporateandindividualperformance
componentsat100%ofannualtarget)fortheyearoftermination,or,ifgreater,Mr.Sordellosannualtargetbonusineffectimmediatelypriortothechangeofcontrol;
paymentofCOBRApremiumsforMr.Sordello,hisspouseandeligibledependentsforupto12months;and
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immediatevestingasto100%ofMr.Sordellosoutstandingequityawards.
ThereceiptofanyseverancepaymentsandbenefitsisconditionedonMr.SordellosigningandnotrevokingLinkedInsthencurrentstandardformofrelease.
ForpurposesofMr.Sordellosofferletter,thetermcausemeansMr.Sordello:
violatingafederalorstatelaworregulationapplicabletoLinkedInsbusinesswhichviolationwasorisreasonablylikelytobeinjurioustoLinkedIn;
propertybelongingto,LinkedInoritsaffiliates;or
deathorinabilitytoperformdutiesforaperiodofthreeconsecutivemonths.
ForpurposesofMr.Sordellosofferletter,thetermchangeofcontrolhasthesamemeaningasMr.Weinersofferletter.
ForpurposesofMr.Sordellosofferletter,thetermconstructiveterminationmeans,withoutMr.Sordelloswrittenconsent:
Officersdirectreports)generallyandwhichresultsinapercentagereductionofsalaryorbonusnogreaterthanthegreatestpercentagereductionappliedtoatleastoneother
memberoftheexecutivemanagementteam;
thesignificationreductionofdutiesorresponsibilitieswhencomparedtodutiesorresponsibilitiesineffectimmediatelypriortosuchreduction.
Change
of
Control
Agreements
with
Michael
Callahan,
Michael
Gamson,
J.
Kevin
Scott
and
Patricia
Wadors
LinkedInhasenteredintochangeofcontrolagreementswitheachofMessrs.Callahan,GamsonandScottandMs.Wadorsthatprovidethatifwithin12monthsfollowingachangeof
control,theindividualsemploymentisinvoluntarilyterminatedwithoutcauseortheiremploymentisconstructivelyterminatedandtheindividualchoosestoresignwithinareasonable
periodoftimefollowingsuchconstructivetermination,thenuponsuchterminationeachofMessrs.Callahan,GamsonandScottandMs.Wadorswillreceivethefollowingseverance
paymentsandbenefits:
alump-sumpaymentpayableonthe60thdayfollowingterminationofemploymentequalto12monthsofhisorherbasesalaryattherateineffectonthedateoftermination,or,
ifgreater,therateineffectimmediatelypriortothechangeofcontrol;
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alump-sumpaymentpayableonthe60thdayfollowingterminationofemploymentequaltohisorherannualtargetbonus(corporateandindividualperformancecomponentsat
100%ofannualtarget)fortheyearoftermination,or,ifgreater,theindividualsannualtargetbonusineffectimmediatelypriortothechangeofcontrol;
paymentofCOBRApremiumsfortheindividual,hisorherspouseandeligibledependentsforupto12months;and
immediatevestingasto100%(forMr.Callahan)or50%(forMessrs.GamsonandScottandMs.Wadors)oftheindividualsoutstandingequityawards.
ThereceiptofanyseverancepaymentsandbenefitsisconditionedontheindividualsigningandnotrevokingLinkedInsthencurrentstandardformofrelease.
Forthepurposesofthechangeofcontrolagreements,thetermcausemeanssuchexecutiveofficer:
violatingafederalorstatelaworregulationapplicabletoLinkedInsbusinesswhichviolationwasorisreasonablylikelytobeinjurioustoLinkedIn,providedthatinthecaseof
Mr.Callahan,suchviolationmustbewillful;
propertybelongingto,LinkedInoritsaffiliates;or
willfulandcontinuedfailuretoperformthedutiesandresponsibilitiesoftheposition(otherthanasaresultofcompleteorpartialincapacityduetophysicalormentalillnessor
impairment)afterhavingbeendeliveredawrittendemandforperformancefromLinkedInwhichdescribesthebasisforitsbeliefthattheindividualhasnotsubstantially
performedhisorherdutiesorresponsibilitiesandafailuretocuresuchnon-performancetoLinkedInssatisfactionwithin30daysafterreceivingsuchnotice.
Forthepurposesofthechangeofcontrolagreements,thetermchangeofcontrolhasthesamemeaningasMr.Weinersofferletter.
Forthepurposesofthechangeofcontrolagreements,thetermconstructiveterminationmeans,withoutsuchexecutiveofficerswrittenconsent:
Officersdirectreports)generallyandwhichresultsinapercentagereductionofsalaryorbonusnogreaterthanthegreatestpercentagereductionappliedtoatleastoneother
amaterialreductionorlossofresponsibilityoftitle,orforMr.Callahanonly:amaterialdiminutionintitle,authority,dutiesorresponsibilities,provided,however;thatforthe
avoidanceofdoubt,theconsummationofa
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changeofcontrolshallbyitselfconstituteamaterialdiminutionindutiesandresponsibilitiesif,asaresultofsuchchangeofcontrolhedoesnotserveasthemostseniorlegal
officeroftheultimateparentoftheacquirerinsuchchangeofcontrol.
Thevalueofanytriggeredpaymentsandbenefitsundertheirrespectivechangeofcontrolandseveranceagreementsforournamedexecutiveofficersaresetforthinthesectionofthis
proxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerGoldenParachuteCompensation.Inaddition,thevalueofanytriggered
paymentsandbenefitsunderthechangeofcontrolagreementforMs.Wadorstotalsanaggregateof$4,345,356.
Employment Arrangements Following the Merger
Microsoft
Offer
Letter
with
Jeffrey
Weiner
OnJune14,2016,Mr.WeinerandMicrosoftenteredintoanofferletter,whichwerefertoastheMicrosoftOfferLetter,whichprovidesthatuponandsubjecttotheclosingofthe
merger,Mr.WeinerwillbeemployedasChiefExecutiveOfficeroftheLinkedInGroupofMicrosoftandExecutiveVicePresident-Microsoft.TheMicrosoftOfferLetterprovidesthat
Mr.Weinersstartingannualsalarywillbe$815,000andMr.Weinerwillreceiveanon-hireperformancestockaward,whichwerefertoastheOn-HirePSA,forsharesofMicrosoft
commonstock.ThetargetnumberofsharessubjecttotheOn-HirePSAwillbecalculatedbydividing$25,000,000bytheclosingpriceofMicrosoftcommonstockonMr.Weinersstartdate
andwillbeallocatedamongfourperformanceperiodsasfollows,inthepercentagesbelow:
theclosingofthemergerthroughDecember31,201728.5%ofthetargetnumberofshares;
January1,2018throughJune30,201814.5%ofthetargetnumberofshares;
Microsoftfiscalyear2019(July1,2018throughJune30,2019)28.5%ofthetargetnumberofshares;and
Microsoftfiscalyear2020(July1,2019throughJune30,2020)28.5%ofthetargetnumberofshares.
Mr.Weinermayvestinandbeissuedbetween0%and250%ofthetargetnumberofsharessubjecttotheOn-HirePSAallocatedtoaperformanceperiodbasedonperformanceagainstgoals
setfortheperiod.VestingoftheawardforeachperformanceperiodiscontingentonMr.Weinerscontinuedemploymentthroughthelastdayofthatperformanceperiod.
Additionally,Mr.WeinerwillbeeligibletoparticipateinMicrosoftsExecutiveIncentiveProgram,whichwerefertoastheEIP,whichiscomprisedofthefollowingthree
components:
annualcashawardtargetof250%ofsalaryearnedduringthefiscalyear,withanactualcashawardrangingfrom0-200%oftarget,withMr.WeinersfirstEIPcashaward
opportunityproratedbaseduponhisfiscalyearbasesalaryfromthelatertooccurofhisstartdateorJanuary1,2017;
astockaward,onanannualizedbasis,equalto$4,250,000,withthenumberofMicrosoftsharescalculatedbydividingtheawardvaluebytheclosingMicrosoftstockpriceon
August31oftheawardyear(ifMr.WeinersstartdateispriortoApril1,2017,hewillreceiveafullawardforfiscalyear2017,25%ofwhichwillvestonAugust31,2017and
12.5%ofwhichwillvesteachsixmonththereafter);and
aperformancestockaward,onanannualizedbasis,withatargetequalto$4,250,000andwiththenumberofMicrosoftsharescalculatedbydividingtheawardvaluebythe
closingMicrosoftstockpriceonAugust31oftheawardyear(ifMr.WeinersstartdateispriortoApril1,2017,hewillreceiveafullawardforfiscalyear2017).Thenumberof
sharesactuallyawardedmaybeupto400%ofthetargetaward.
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Inaddition,Mr.Weinerwillcontinuetobeeligiblefor2016incentivecompensationunderLinkedInsExecutiveCompensationBonusPlanwithadjustmentstotheperformance
metricsiftheclosingofthemergeroccursbeforeDecember31,2016.IfMr.WeinersstartdateoccursbeforeJanuary1,2017,Mr.WeinerwillreceivehisEIPcashawardtargetof250%of
hissalaryinlieuofthetargetsetintheLinkedInExecutiveCompensationBonusPlanfortheperiodfromhisstartdatetoDecember31,2016.If,however,hisstartdateoccursafter
December31,2016,hewillremaineligibletoreceiveapro-ratedbonusforthe2017calendaryearundertheLinkedInExecutiveCompensationBonusPlancoveringtheperiodfromJanuary1,
2017untilhisstartdate.Pursuanttothetermsofthemergeragreement,Mr.WeinerwillreceiveMicrosoftstockawardsforhisunvestedLinkedInstockawards,whichwerefertoasassumed
stockawards,andstockoptionsinexchangeforhisunvested,in-the-moneyLinkedInstockoptions,whichwerefertoastheassumedoptions.
EffectivefromhisstartdatewithMicrosoft,Mr.WeinerwillnolongerparticipateinanyLinkedInseveranceprogram,includingtheseverancearrangementsdescribedinhisLinkedIn
offerletter.Instead,Mr.WeinerwillparticipateinMicrosoftsSeniorExecutiveSeveranceBenefitPlan,whichwerefertoastheSESBP.UndertheSESBP,aparticipantwillreceive
severancepaymentsandbenefitsiftheparticipantsemploymentisterminatedbyMicrosoftwithoutcause(assuchtermisdefinedintheSESBP).Thesepaymentsandbenefitsconsistof
(1)alumpsumcashseverancepaymentequaltoonetimesannualbasesalaryplustargetannualcashawardundertheEIP,payablewithin60daysaftertheterminationdate;(2)pro-rata
paymentoftheparticipantsannualcashawardundertheEIPwhichamountispayableatthetimeannualcashawardsfortheyeararepaidtootherEIPparticipants;(3)vestingoftheportionof
stockawardsthatwouldotherwisevestinthe12monthsafterterminationofemployment;(4)vestingofapro-rataportionofanyperformancestockawards(includingtheOn-HirePSAs)
providedthatatleastoneyearoftheperformanceperiodhasbeencompletedasoftheterminationdateandthepro-ratedvestingappliestothelesserof(1)thenumberofsharesearnedbasedon
achievementofperformancegoalsand(2)thetargetnumberofsharesundertheawardagreement;(5)paymentofCOBRApremiumsforupto6months;and(6)upto12monthsof
outplacementassistance.Thereisnochange-in-controlprovisionintheSESBP.Toreceivetheseverancepaymentsandbenefits,Mr.Weinerisrequiredtoexecuteaseparationagreementthat
includesareleaseofclaims,confidentialityandnon-disparagementprovisions,and12monthnon-solicitationrestrictions.
Ifwithin12monthsfollowingtheclosingofthemerger,Mr.WeinersemploymentisinvoluntarilyterminatedbyMicrosoftwithoutcauseorheresignsasaresultofaconstructive
termination,then,uponeitherofsuchevents,Mr.Weinerwillbeentitledtoimmediatevestingof100%ofboththeassumedoptionsandassumedstockawardsthatareunvestedasofthedate
ofsuchterminationorresignation.Inaddition,if,within12monthsfollowingtheclosingofthemerger,Mr.Weinerresignsasaresultofaconstructivetermination,Mr.Weinerwillreceivea
lumpsumpaymentonthe60thdayfollowingsuchresignationequaltothesumof(1)12monthsofbasesalaryattherateineffectonthedateofhisresignationor,ifgreater,therateineffect
immediatelypriortotheclosingofthemerger;and(2)Mr.Weinersannualtargetbonusat100%ofannualtargetfortheyearofresignationor,ifgreater,Mr.Weinersannualtargetbonusin
effectimmediatelypriortotheclosingofthemerger.
Ifmorethan12monthsfollowingtheclosingofthemergerMr.Weinersemploymentisinvoluntarilyterminatedwithoutcause,asdefinedintheSESBP,thenuponsuchtermination
Mr.Weinerwillbeentitledtocontinuedvestingofhisassumedoptionsandassumedstockawardsonthesamevestingschedulethatwouldhaveappliedifhisemploymentcontinuedthrough
therelevantvestdates.
ForthepurposesoftheSESBP,thetermcausemeans:
beingconvictedorpleadingguiltyornocontestto(a)anyfelonyor(b)amisdemeanorchargeinvolvingfraud,falsestatementsormisleadingomissions,wrongfultaking,
embezzlement,bribery,forgery,counterfeitingorextortion;
engagingingrossmisconduct;
repeatedlyfailingtosubstantiallyperformdutiesafternoticeandanopportunitytocure,providedthosedutiesareconsistentwithMr.Weinersseniority;
violatinganysecuritieslaws,rulesorregulations,ortherulesandregulationsofanysecuritiesexchangeorassociationofwhichMicrosoftoranyofitsaffiliatesisamember;or
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violatingMicrosoftspoliciesdesignedtopreventviolationsoflaw,suchas,withoutlimitation,policiespertainingtocompliancewiththelawsprohibitingunlawful
discrimination,harassment,orinsidertrading.
ForthepurposesoftheMicrosoftOfferletter,thetermcausemeansMr.Weiner:
engaginginknowingandintentionalillegalconductthatwasorismateriallyinjurioustoMicrosoftoritsaffiliates;
violatingafederalorstatelaworregulationapplicabletoMicrosoftsbusinesswhichviolationwasorisreasonablylikelytobeinjurioustoMicrosoft;
materiallybreachingthetermsofanyconfidentialityagreementorinventionassignmentagreementwithLinkedInorMicrosoft;
propertybelongingto,Microsoftoritsaffiliates.
ForthepurposesoftheMicrosoftOfferLetter,thetermconstructiveterminationmeans,withoutMr.Weinerswrittenconsent:
areductioninbasesalary,otherthanareductioninsalarythatispartofanexpensereductioneffortappliedtotheexecutivemanagementteam(definedasMicrosoftsCEOand
hisexecutivedirectreports)generallyandwhichresultsinapercentagereductionofsalaryorbonusnogreaterthanthegreatestpercentagereductionappliedtoatleastoneother
asignificantreductionofdutiesorresponsibilitieswhencomparedtodutiesorresponsibilitiesineffectimmediatelypriortotheclosingofthemerger.However,ifMr.Weiner
(1)reportstotheMicrosoftCEOfollowingtheclosingofthemerger,(2)continuestobeChiefExecutiveOfficeroftheLinkedInbusiness,and(3)retainsresponsibilityfor
managingtheday-to-dayoperationsoftheLinkedInbusiness(evenifMr.WeinerhasthetitledescribedintheMicrosoftOfferLetteranddoesnotreporttoorinteractwiththe
MicrosoftBoardofDirectors),sucharrangementsshallnotbeconsideredaconstructiveterminationundertheforegoing.
Anypaymentsorbenefits,includingtheacceleratedvestingofMr.Weinersassumedoptionsandassumedstockawards,inconnectionwithaninvoluntaryterminationwithoutcause
oraconstructivetermination(whetherbeforeorafterthedatethatis12monthsfollowingtheclosingofthemerger)willbecontingentonMr.Weinersexecution,deliveryandnon-revocation
ofaseparationandreleaseagreementintheformprovidedbyMicrosoftsubstantiallyintheformusedundertheSESBP.
Other
Executives
Exceptasdescribedabove,asofthedateofthisproxystatement,noneofLinkedInsotherexecutiveofficershavereachedanunderstandingonpotentialemploymentwithMicrosoft
orotherretentiontermswiththesurvivingcorporationorwithMicrosoft,andexceptasdescribedabove,noLinkedInexecutiveofficershaveenteredintoanydefinitiveagreementsor
arrangementsregardingemploymentwithMicrosoftorotherretentionwiththesurvivingcorporationorwithMicrosoftfollowingtheconsummationofthemerger.However,priortothe
effectivetimeofthemerger,Microsoft
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mayinitiatediscussionsregardingemploymentorotherretentiontermsandmayenterintodefinitiveagreementsregardingemploymentorretentionforcertainofLinkedInsemployees,tobe
effectiveasoftheeffectivetimeofthemerger.Inaddition,asdisclosedinthesectionofthisproxystatementcaptionedTheMergerAgreementEmployeeBenefits,Microsofthasagreedto
honoralloftheemployeeplans(includingtheofferlettersandchangeofcontrolagreementswiththeexecutives)inaccordancewiththeirtermsasineffectimmediatelypriortotheeffective
timeofthemerger.
Golden Parachute Compensation
InaccordancewithItem402(t)ofRegulationS-K,thetablebelowsetsforththecompensationthatisbasedonorthatotherwiserelatestothemergerthatwillormaybecomepayable
toeachofournamedexecutiveofficersinconnectionwiththemerger.Theamountsinthetablebelowwillormaybecomepayabletothenamedexecutiveofficersonlyintheeventtheyare
terminatedwithin12monthsfollowingthemerger.Pleaseseethepreviousportionsofthissectionforfurtherinformationregardingthiscompensation.
LinkedInsnamedexecutiveofficersforpurposesofthedisclosureinthisproxystatementareMessrs.Weiner,Sordello,Callahan,GamsonandScott.Thefollowingtablesetsforth
theinformationrequiredbyItem402(t)ofRegulationS-KpublishedbytheSECregardingcertaincompensationthateachofLinkedInsnamedexecutiveofficersmayreceivethatisbasedon,
orthatotherwiserelatesto,themerger.Thefiguresinthetableareestimatedbasedon(1)compensationandbenefitlevelsasofJune15,2016;(2)anassumedeffectivedateofDecember15,
2016,forthemerger;and(3)theterminationofthenamedexecutiveofficersemploymentwithoutcauseonthedayimmediatelyfollowingsucheffectivedateforthemerger.Theamounts
reportedbelowareestimatesbasedonmultipleassumptionsthatmayormaynotactuallyoccurorbeaccurateontherelevantdate.Accordingly,theultimatevaluestobereceivedbyanamed
executiveofficerinconnectionwiththemergermaydifferfromtheamountssetbelow.
ThevaluesinthetablebelowpayabletoMr.WeinerbyMicrosoftarenotsubjecttothenon-binding,advisoryvotetoapprovecertaincompensationthatwillormaybecomepayableto
LinkedInsnamedexecutiveofficersinconnectionwiththemerger.LinkedInsexecutiveofficerswillnotreceivepension,non-qualifieddeferredcompensationortaxreimbursementin
connectionwiththemerger.
AsrequiredbyapplicableSECrules,allamountsbelowthataredeterminedusingthepersharevalueofLinkedInscommonstockhavebeencalculatedbasedonthepersharemerger
consideration.
Golden
Parachute
Compensation
Name
JeffreyWeiner
StevenSordello
MichaelCallahan
MichaelGamson
J.KevinScott
LinkedIn
Cash
($)(1)
2,500,000
1,100,000
1,000,000
1,100,000
1,200,000
Microsoft
Cash
($)(2)
3,022,292
LinkedIn
Equity
($)(3)(4)
17,468,055
10,804,400
8,353,520
5,737,656
7,353,925
Microsoft
Equity
($)(5)
18,530,555
LinkedIn
Perquisites
/
Benefits
($)(6)
24,076
24,076
24,076
24,076
24,076
Microsoft
Perquisites
/
Benefits
($)(7)
49,258
Total
LinkedIn
Payments
($)(8)
19,992,131
11,928,476
9,377,596
6,861,732
8,578,001
Total
Microsoft
Payments
($)(9)
21,602,105
(1) AsdescribedinthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerPaymentsUponTermination
FollowingChangeofControl,theseamountsrepresentthedouble-triggercashseverancepaymentstowhicheachnamedexecutiveofficermaybecomeentitledunderhisofferletteror
changeofcontrolagreementwithLinkedIn.Thecashseverancepayments,payableinalumpsumonthe60thdayfollowingterminationofemployment,equal12monthsofthenamed
executiveofficersbase
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salaryattherateineffectonthedateoftermination,or,ifgreater,therateineffectimmediatelypriortothechangeofcontrol,plusthenamedexecutiveofficersannualtargetbonus
(corporateandindividualperformancecomponentsat100%ofannualtarget)fortheyearoftermination,or,ifgreater,theindividualsannualtargetbonusineffectimmediatelypriortothe
changeofcontrol,whichwerefertotogetherastheseverancebenefits.TheseverancebenefitswillbepayabletoMessrs.WeinerandSordelloif,within12monthsfollowingachangeof
control(includingthemerger),theiremploymentisinvoluntarilyterminatedwithoutcauseortheindividualisconstructivelyterminated.Theseverancebenefitswillbepaidtoeachof
Messrs.Callahan,GamsonandScottif,within12monthsfollowingachangeofcontrol(includingthemerger),theindividualsemploymentisinvoluntarilyterminatedwithoutcauseor
theiremploymentisconstructivelyterminatedandtheindividualchoosestoresignwithinareasonableperiodoftimefollowingsuchconstructivetermination.Thereceiptoftheseverance
benefitsisconditionedonthenamedexecutiveofficersigningandnotrevokingthethencurrentstandardformofrelease.
Name
Base
Salary
Component
of
Severance
Benefits
($)
Bonus
Component
of
Severance
Benefits
($)
JeffreyWeiner
1,000,000
1,500,000
StevenSordello
550,000
550,000
MichaelCallahan
500,000
500,000
MichaelGamson
550,000
550,000
J.KevinScott
600,000
600,000
Asdescribedaboveandfollowingthecompletionofthemerger,Mr.WeinerhasagreedintheMicrosoftOfferLettertowaiveanyseverancepaymentsorbenefitshemaybeentitledto
receivepursuanttohisofferletterwithLinkedIn.
(2) AsdescribedinthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerEmploymentArrangements
FollowingtheMergerOfferLetterwithJeffreyWeiner,pursuanttothetermsoftheMicrosoftOfferLetterandfollowingthecompletionofthemerger,Mr.Weinerwillbeaparticipant
intheSESBP,andwillbeeligibletoreceivecashseverancebenefitsuponaterminationwithoutcauseconsistingof:(1)alump-sumpaymentequaltoonetimesannualbasesalaryplus
targetannualcashawardundertheEIPpayablewithin60daysoftheterminationdate;and(2)apro-ratapaymentofMr.WeinersannualtargetcashawardundertheEIP,whichamountis
payableatthetimeannualcashawardsfortheyeararepaidtootherEIPparticipants.Toreceivethesedouble-triggerseverancepayments,Mr.Weinerisrequiredtoexecuteaseparation
agreementthatincludesareleaseofclaims,confidentialityandnon-disparagementprovisions,and12monthnon-solicitationrestrictions.
Inaddition,ifwithin12monthsfollowingtheclosingofthemerger,Mr.Weinerresignsasaresultofaconstructivetermination,Mr.Weinerwillreceivealumpsumpaymentonthe60
thdayfollowingsuchresignationequaltothesumof(1)12monthsofbasesalaryastherateineffectonthedateofhisresignationor,ifgreater,therateineffectimmediatelypriortothe
closing;and(2)Mr.Weinersannualtargetbonusat100%ofannualtargetfortheyearofresignationor,ifgreater,Mr.Weinersannualtargetbonusineffectimmediatelypriortothe
closing.Paymentofsuchdouble-triggerseverancewillbeconditionedonMr.WeinerexecutingandnotrevokingareleaseofclaimssubstantiallyintheformusedundertheSESBPthat
includesareleaseofclaims,confidentialityandnon-disparagementprovisions,and12monthnon-solicitationrestrictions.
ForpurposesofthisdisclosurewehaveassumedMr.Weinersemploymentisterminatedwithoutcauseonedayfollowingtheclosingofthemerger.
Name
JeffreyWeiner
Base
Salary
Component
of
Microsoft
Severance
Benefits
($)
815,000
70
Bonus
Component
of
Microsoft
Severance
Benefits
($)
2,037,500
Pro-Rata
Bonus
Component
of
Microsoft
Severance
Benefits
(A)
169,792
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(A) AssumesMr.Weineristerminatedonedayfollowingtheclosingofthemergerandiseligibletoreceive1/12ofhisannualtargetcashaward.
AssumingMr.Weinersemploymentisterminatedonedayfollowingtheclosingofthemerger,hewillonlybeentitledtoreceivethevalueoftheMicrosoftCash.Asnotedabove,
intheMicrosoftOfferLetter,Mr.WeineragreedtowaiveanyseverancepaymentsandbenefitshemaybeentitledtoreceivepursuanttohisofferletterwithLinkedInand,
accordingly,wouldnotbeentitledtothevalueoftheLinkedInCash.
(3) AsdescribedinthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerPaymentsuponTermination
FollowingChangeofControl,undertheapplicableofferletterorchangeofcontrolagreement,100%(inthecaseofMessrs.Weiner,SordelloandCallahan)or50%(inthecaseof
Messrs.GamsonandScott)ofthenamedexecutiveofficersoutstandingequityawardswillvestuponaqualifyingterminationofemployment,whichwerefertoastheequity
acceleration.Messrs.WeinerandSordellowillreceivetheequityaccelerationif,within12monthsfollowingachangeofcontrol(includingthemerger),theiremploymentis
involuntarilyterminatedwithoutcauseortheindividualisconstructivelyterminated.EachofMessrs.Callahan,GamsonandScottwillreceivetheequityaccelerationif,within12
monthsfollowingachangeofcontrol(includingthemerger),theindividualsemploymentisinvoluntarilyterminatedwithoutcauseortheiremploymentisconstructivelyterminated
andtheindividualchoosestoresignwithinareasonableperiodoftimefollowingsuchconstructivetermination.Thevalueofaccelerationofthecompanyoptionsiscalculatedby
multiplyingthenumberofacceleratedcompanyoptionsbythedifferencebetweenthepersharemergerconsiderationandtheexerciseprice.ThevalueoftheRSUsisbasedonthe
numberoftheacceleratedunvestedshares,multipliedbythepersharemergerconsideration.Thefollowingtablequantifiesthevalueofequityawardsthataccelerateupona
qualifyingterminationofemploymentinconnectionwiththemerger.Allsuchamountsaredouble-triggerandareconditionedonthenamedexecutiveofficersigningandnot
revokingthethencurrentstandardformofrelease.
Name
Stock
Options
($)
RSUs
($)
JeffreyWeiner
700,843
16,767,212
StevenSordello
420,516
10,383,884
MichaelCallahan
8,353,520
MichaelGamson
264,160
5,473,496
J.KevinScott
349,081
7,004,844
(4) Inconnectionwiththemerger,LinkedInintendstograntJeffreyWeinertheWeinerRetentionGrant.TheWeinerRetentionGrantwillbegrantedimmediatelypriortotheclosingof
themerger,subjecttoMr.WeinerscontinuedemploymentwithLinkedInthroughandincludingthedateofgrant.TheWeinerRetentionGrantwillbescheduledtovestontheearlier
of(1)theoneyearanniversaryoftheclosingdateofthemergerand(2)December31,2017,andwillbesubjecttotheseveranceprovisions(includingastoequityacceleration)set
forthinMr.Weinersofferletter,asdescribedmorefullyabove.EventhoughtheWeinerRetentionGrantwillnotbecomeeffectiveuntilshortlybeforetheclosingofthemerger,itis
includedintheGoldenParachuteCompensationtable.
FollowingtheMergerOfferLetterwithJeffreyWeiner,ifwithin12monthsfollowingtheclosingofthemerger,Mr.WeinersemploymentisinvoluntarilyterminatedbyMicrosoft
withoutcauseorheresignsasaresultofaconstructivetermination,then,uponeitherofsuchevents,Mr.Weinerwillbeentitledtoimmediatevestingof100%oftheassumedoptions,
assumedstockawards,andtheWeinerRetentionGrantthatareunvestedasofthedateofsuchterminationorresignation.TheacceleratedvestingofMr.Weinersassumedoptions
andassumedstockawards,inconnectionwithaninvoluntaryterminationwithoutcauseoraconstructivetermination(whetherbeforeorafterthedatethatis12monthsfollowingthe
closingofthemerger)willbecontingentonMr.Weinersexecution,deliveryandnon-revocationofaseparationandreleaseagreementintheformprovidedbyMicrosoftsubstantially
intheformusedundertheSESBPthatincludesa
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releaseofclaims,confidentialityandnon-disparagementprovisions,and12monthnon-solicitationrestrictions.Forpurposesofthisdisclosure,weareassuming(1)thevalueofthe
accelerationoftheassumedoptions,assumedstockawardsandWeinerRetentionGrant,eachadouble-triggerbenefit,equalsthevalueoftheawardsreflectedintheLinkedIn
Equitycolumn;(2)theOn-HirePSAs,stockawardandperformancestockawardwereallgrantedonthedateoftheclosingofthemerger;(3)noportionoftheOn-HirePSAsor
performancestockawardswillvestasaresultoftheterminationinaccordancewiththetermsoftheSESBP;and(4)only25%ofthestockawardswillvestasaresultofthe
terminationinaccordancewiththetermsoftheSESBP.
(6) AsdescribedinthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerPaymentsUponTermination
FollowingChangeofControl,theseamountsequalthevalueof12monthspaymentofCOBRApremiumsforthenamedexecutiveofficer,hisspouseandeligibledependents,which
werefertoastheCOBRABenefits.TheCOBRABenefitsareadouble-triggerbenefitandwillbepayabletoMessrs.WeinerandSordelloif,within12monthsfollowinga
changeofcontrol(includingthemerger),theiremploymentisinvoluntarilyterminatedwithoutcauseortheindividualisconstructivelyterminated.TheCOBRABenefitswillbepaid
toeachofMessrs.Callahan,GamsonandScottif,within12monthsfollowingachangeofcontrol(includingthemerger),theindividualsemploymentisinvoluntarilyterminated
withoutcauseortheiremploymentisconstructivelyterminatedandtheindividualchoosestoresignwithinareasonableperiodoftimefollowingsuchconstructivetermination.The
receiptoftheCOBRABenefitsisconditionedonthenamedexecutiveofficersigningandnotrevokingthethencurrentstandardformofrelease.
FollowingtheMergerOfferLetterwithJeffreyWeiner,pursuanttothetermsoftheMicrosoftOfferLetter,Mr.WeinerwillbeaparticipantintheSESBP,andwillbeeligibleto
receivethefollowingseverancebenefitsuponaterminationwithoutcause:(1)sixmonthsofcontinuedhealthcarepremiumsunderCOBRA(valuedat$9,258,assumingthatMr.
Weinerchoosesthehighestlevelofcoverage);and(2)12monthsofoutplacementassistance(valuedat$40,000).Toreceivethisdouble-triggerseverancebenefit,Mr.Weineris
requiredtoexecuteaseparationagreementthatincludesareleaseofclaims,confidentialityandnon-disparagementprovisions,and12monthnon-solicitationrestrictions.
AssumingMr.Weinersemploymentisterminatedonedayfollowingtheclosingofthemerger,hewillonlybeentitledtoreceivethevalueoftheMicrosoftPerquisites/Benefits.
Asnotedabove,intheMicrosoftOfferLetter,Mr.WeineragreedtowaiveanyseverancepaymentsandbenefitshemaybeentitledtoreceivepursuanttohisofferletterwithLinkedIn
andaccordingly,wouldnotbeentitledtothevalueoftheLinkedInPerquisites/Benefits.
(8) ThisamountrepresentsthesumoftheamountsintheLinkedInCash,LinkedInEquity,andLinkedInPerquisites/Benefitscolumnsforeachnamedexecutiveofficer.Foreach
namedexecutiveofficer,theamountinthiscolumnassumesthatsuchnamedexecutiveofficersemploymentisinvoluntarilyterminatedwithoutcauseortheindividualis
constructivelyterminatedwithin12monthsofachangeofcontrol(includingthemerger)andthenamedexecutiveofficersreceivesseverancepaymentsandbenefitspursuanttotheir
offerletterorchangeofcontrolagreementwithLinkedIn,althoughasnotedabove,Mr.WeinerwillbeentitledtoreceiveseverancepaymentsandbenefitspursuanttotheMicrosoft
OfferLetter.Forpurposesofthenon-binding,advisoryvote,ourstockholdersarebeingaskedtoapprovethepaymentstothenamedexecutiveofficersshowninthiscolumn.
(9) ThisamountrepresentsthesumoftheamountsintheMicrosoftCash,MicrosoftEquity,andMicrosoftPerquisites/BenefitscolumnsforMr.Weiner.Theamountinthis
columnassumesthatMr.WeinerreceivesseverancepaymentsandbenefitspursuanttotheMicrosoftOfferLetterasdescribedaboveandwillnotbeeligibletoreceiveseveranceor
benefitsunderhisLinkedInofferletter.
Closing
and
Effective
Time
of
the
Merger
Theclosingofthemergerwilltakeplacenolaterthanthesecondbusinessdayfollowingthesatisfactionorwaiverofallconditionstoclosingofthemerger(describedinthesectionof
thisproxystatementcaptionedTheMergerAgreementConditionstotheClosingoftheMerger),otherthanconditionsthatbytheirtermsaretobesatisfiedattheclosingofthemerger,but
subjecttothesatisfactionorwaiverofeachofsuchconditions,orsuchothertimeagreedtoinwritingbyMicrosoft,LinkedInandMergerSub.Concurrentlywiththeclosingofthemerger,the
partieswillfileacertificateofmergerwiththeSecretaryofStateoftheStateofDelawareasprovidedundertheDGCL.Themergerwill
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becomeeffectiveuponthefilingofandacceptanceofsuchcertificateofmerger,oratsuchlatertimeagreedtoinwritingbythepartiesandspecifiedinsuchcertificateofmerger.
Appraisal
Rights
Ifthemergerisconsummated,LinkedInstockholderswhodonotvoteinfavoroftheadoptionofthemergeragreement,whoproperlydemandanappraisaloftheirshares,who
continuouslyholdsuchsharesthroughtheeffectivetimeofthemergerandwhootherwisecomplywiththeproceduresofSection262oftheDGCLwillbeentitledtoappraisalrightsin
connectionwiththemergerunderSection262oftheDGCL,whichwerefertoasSection262.Unlessthecontextrequiresotherwise,allreferencesinSection262oftheDGCLandinthis
summarytoastockholderaretoarecordholderofLinkedIncommonstock.
ThefollowingdiscussionisnotacompletestatementofthelawpertainingtoappraisalrightsundertheDGCLandisqualifiedinitsentiretybythefulltextofSection262,whichis
attachedtothisproxystatementasAnnexCandincorporatedintothisproxystatementbyreference.Thefollowingsummarydoesnotconstituteanylegalorotheradviceanddoesnot
constitutearecommendationthatLinkedInstockholdersexercisetheirappraisalrightsunderSection262.Onlyaholderofrecordofsharesofcommonstockisentitledtodemandappraisal
rightsforthesharesregisteredinthatholdersname.Apersonhavingabeneficialinterestinsharesofcommonstockheldofrecordinthenameofanotherperson,suchasabank,brokeror
othernominee,mustactpromptlytocausetherecordholdertodemandanappraisalofsuchholdersshares.If
you
hold
your
shares
of
our
common
stock
through
a
bank,
broker
or
other
nominee
and
you
wish
to
exercise
appraisal
rights,
you
should
consult
with
your
bank,
broker
or
the
other
nominee.
UnderSection262,holdersofrecordofsharesofcommonstockwho(1)submitawrittendemandforappraisalofsuchstockholderssharestoLinkedInpriortothevoteonthe
adoptionofthemergeragreement;(2)donotvoteinfavoroftheadoptionofthemergeragreement;(3)continuouslyaretherecordholdersofsuchsharesthroughtheeffectivetimeofthe
merger;and(4)otherwisecomplywiththeproceduressetforthinSection262willbeentitledtohavetheirsharesappraisedbytheDelawareCourtofChanceryandtoreceivepaymentincash
ofthefairvalueofthesharesofcommonstock,exclusiveofanyelementofvaluearisingfromtheaccomplishmentorexpectationofthemerger,togetherwithinterest,ifany,tobepaidon
theamountdeterminedtobefairvalueasdeterminedbytheDelawareCourtofChancery.UnlesstheDelawareCourtofChancery,initsdiscretion,determinesotherwiseforgoodcauseshown,
interestonanappraisalawardwillaccrueandcompoundquarterlyfromtheeffectivetimeofthemergerthroughthedatethejudgmentispaidat5%overtheFederalReservediscountrate
(includinganysurcharge)asestablishedfromtimetotimeduringsuchperiod.
UnderSection262,whereamergeragreementistobesubmittedforadoptionatameetingofstockholders,thecorporation,notlessthan20dayspriortothemeeting,mustnotifyeach
ofitsstockholdersofrecordasoftherecorddatefornoticeofsuchmeetingthatappraisalrightsareavailableandincludeinthenoticeacopyofSection262.Thisproxystatementconstitutes
LinkedInsnoticetostockholdersthatappraisalrightsareavailableinconnectionwiththemerger,andthefulltextofSection262isattachedtothisproxystatementasAnnexC.Inconnection
withthemerger,anyholderofsharesofcommonstockwhowishestoexerciseappraisalrights,orwhowishestopreservesuchholdersrighttodoso,shouldreviewAnnexCcarefully.Failure
tostrictlycomplywiththerequirementsofSection262inatimelyandpropermannerwillresultinthelossofappraisalrightsundertheDGCL.Astockholderwholoseshis,heroritsappraisal
rightswillbeentitledtoreceivethemergerconsiderationdescribedinthemergeragreementwithoutinterest.Moreover,becauseofthecomplexityoftheproceduresforexercisingtherightto
seekappraisalofsharesofcommonstock,LinkedInbelievesthatifastockholderconsidersexercisingsuchrights,thatstockholdershouldseektheadviceoflegalcounsel.
StockholderswishingtoexercisetherighttoseekanappraisaloftheirsharesofcommonstockmustdoALL
ofthefollowing:
thestockholdermustnotvoteinfavoroftheproposaltoadoptthemergeragreement;
thestockholdermustdelivertoLinkedInawrittendemandforappraisalbeforethevoteonthemergeragreementatthespecialmeeting;
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TableofContents
thestockholdermustcontinuouslyholdthesharesfromthedateofmakingthedemandthroughtheeffectivetimeofthemerger(astockholderwillloseappraisalrightsifthe
stockholdertransfersthesharesbeforetheeffectivetimeofthemerger);and
astockholder(oranypersonwhoisthebeneficialownerofsharesofcommonstockheldeitherinavotingtrustorbyanomineeonbehalfofsuchperson)orthesurviving
corporationmustfileapetitionintheDelawareCourtofChancerydemandingadeterminationofthevalueofthestockofallsuchstockholderswithin120daysaftertheeffective
timeofthemerger.Thesurvivingcorporationisundernoobligationtofileanypetitionandhasnointentionofdoingso.
Becauseaproxythatdoesnotcontainvotinginstructionswill,unlessrevoked,bevotedinfavoroftheadoptionofthemergeragreement,astockholderwhovotesbyproxyandwho
wishestoexerciseappraisalrightsmustvoteagainsttheadoptionofthemergeragreement,abstainornotvotehis,heroritsshares.
Filing Written Demand
AstockholderwishingtoexerciseappraisalrightsmustdelivertoLinkedIn,beforethevoteontheadoptionofthemergeragreementatthespecialmeetingatwhichtheproposalto
adoptthemergeragreementwillbesubmittedtothestockholders,awrittendemandfortheappraisalofsuchstockholdersshares,andthatstockholdermustnotvoteorsubmitaproxyinfavor
oftheadoptionofthemergeragreement.Astockholderexercisingappraisalrightsmustholdofrecordthesharesonthedatethewrittendemandforappraisalismadeandmustcontinuetohold
thesharesofrecordthroughtheeffectivetimeofthemerger.Aproxythatissubmittedanddoesnotcontainvotinginstructionswill,unlessrevoked,bevotedinfavoroftheadoptionofthe
mergeragreement,anditwillconstituteawaiverofthestockholdersrightofappraisalandwillnullifyanypreviouslydeliveredwrittendemandforappraisal.Therefore,astockholderwho
submitsaproxyandwhowishestoexerciseappraisalrightsmustsubmitaproxycontaininginstructionstovoteagainsttheadoptionofthemergeragreementorabstainfromvotingonthe
adoptionofthemergeragreement.Neithervotingagainsttheadoptionofthemergeragreementnorabstainingfromvotingorfailingtovoteontheproposaltoadoptthemergeragreementwill,
inandofitself,constituteawrittendemandforappraisalsatisfyingtherequirementsofSection262.Thewrittendemandforappraisalmustbeinadditiontoandseparatefromanyproxyor
voteontheadoptionofthemergeragreement.Aproxyorvoteagainsttheadoptionofthemergeragreementwillnotconstituteademand.Astockholdersfailuretomakethewrittendemand
priortothetakingofthevoteontheadoptionofthemergeragreementatthespecialmeetingwillconstituteawaiverofappraisalrights.
Onlyaholderofrecordofsharesofcommonstockisentitledtodemandappraisalrightsforthesharesregisteredinthatholdersname.Ademandforappraisalinrespectofsharesof
commonstockshouldbeexecutedbyoronbehalfoftheholderofrecord,andmustreasonablyinformLinkedInoftheidentityoftheholderstatethatthestockholderintendstherebytodemand
anappraisalofsuchstockholdersshares.Ifthesharesareownedofrecordinafiduciarycapacity,suchasbyatrustee,guardianorcustodian,suchdemandmustbeexecutedbyoronbehalfof
therecordowner,andifsuchsharesareownedofrecordbymorethanoneperson,asinajointtenancyandtenancyincommon,thedemandshouldbeexecutedbyoronbehalfofalljoint
owners.Anauthorizedagent,includinganauthorizedagentfortwoormorejointowners,mayexecuteademandforappraisalonbehalfofaholderofrecord;however,theagentmustidentify
therecordownerorownersandexpresslydisclosethat,inexecutingthedemand,theagentisactingasagentfortherecordownerorowners.
STOCKHOLDERSWHOHOLDTHEIRSHARESINBROKERAGEORBANKACCOUNTSOROTHERNOMINEEFORMSANDWHOWISHTOEXERCISEAPPRAISAL
RIGHTSSHOULDCONSULTWITHTHEIRBANK,BROKEROROTHERNOMINEES,ASAPPLICABLE,TODETERMINETHEAPPROPRIATEPROCEDURESFORTHEBANK,
BROKEROROTHERNOMINEETOMAKEADEMANDFORAPPRAISALOFTHOSESHARES.APERSONHAVINGABENEFICIALINTERESTINSHARESHELDOFRECORD
INTHENAMEOFANOTHERPERSON,SUCHASABANK,BROKEROROTHERNOMINEE,MUSTACTPROMPTLYTOCAUSETHERECORDHOLDERTOFOLLOW
PROPERLYANDINATIMELYMANNERTHESTEPSNECESSARYTOPERFECTAPPRAISALRIGHTS.
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TableofContents
AllwrittendemandsforappraisalpursuanttoSection262shouldbemailedordeliveredto:
LinkedInCorporation
2029StierlinCourt
Attention:CorporateSecretary
Anyholderofsharesofcommonstockmaywithdrawhis,heroritsdemandforappraisalandaccepttheconsiderationofferedpursuanttothemergeragreementbydeliveringto
LinkedInawrittenwithdrawalofthedemandforappraisal.However,anysuchattempttowithdrawthedemandmademorethan60daysaftertheeffectivetimeofthemergerwillrequire
writtenapprovalofthesurvivingcorporation.Notwithstandingtheforegoing,noappraisalproceedingintheDelawareCourtofChancerywillbedismissedwithouttheapprovalofthe
DelawareCourtofChancery,andsuchapprovalmaybeconditioneduponsuchtermsastheDelawareCourtofChancerydeemsjust;provided,however,thatthisshallnotaffecttherightofany
stockholderwhohasnotcommencedanappraisalproceedingorjoinedthatproceedingasanamedpartytowithdrawsuchstockholdersdemandforappraisalandtoacceptthemerger
considerationwithin60daysaftertheeffectivetimeofthemerger.
Notice by the Surviving Corporation
Ifthemergeriscompleted,within10daysaftertheeffectivetimeofthemerger,thesurvivingcorporationwillnotifyeachrecordholderofsharesofcommonstockwhohasmadea
writtendemandforappraisalpursuanttoSection262,andwhohasnotvotedinfavoroftheadoptionofthemergeragreement,thatthemergerhasbecomeeffectiveandtheeffectivedate
thereof.
Filing a Petition for Appraisal
Within120daysaftertheeffectivetimeofthemerger,butnotthereafter,thesurvivingcorporationoranyholderofsharesofcommonstockwhohascompliedwithSection262andis
entitledtoappraisalrightsunderSection262maycommenceanappraisalproceedingbyfilingapetitionintheDelawareCourtofChancery,withacopyservedonthesurvivingcorporationin
thecaseofapetitionfiledbyastockholder,demandingadeterminationofthefairvalueofthesharesheldbyallstockholdersentitledtoappraisal.Thesurvivingcorporationisunderno
obligation,andhasnopresentintention,tofileapetition,andholdersshouldnotassumethatthesurvivingcorporationwillfileapetitionorinitiateanynegotiationswithrespecttothefair
valueofthesharesofcommonstock.Accordingly,anyholdersofsharesofcommonstockwhodesiretohavetheirsharesappraisedshouldinitiateallnecessaryactiontoperfecttheirappraisal
rightsinrespectoftheirsharesofcommonstockwithinthetimeandinthemannerprescribedinSection262.Thefailureofaholderofcommonstocktofilesuchapetitionwithintheperiod
specifiedinSection262couldnullifythestockholderspreviouswrittendemandforanappraisalofsuchstockholdersshares.
Within120daysaftertheeffectivetimeofthemerger,anyholderofsharesofcommonstockwhohascompliedwiththerequirementsforanappraisalofsuchholderssharespursuant
toSection262willbeentitled,uponwrittenrequest,toreceivefromthesurvivingcorporationastatementsettingforththeaggregatenumberofsharesnotvotedinfavoroftheadoptionofthe
mergeragreementandwithrespecttowhichLinkedInhasreceiveddemandsforappraisal,andtheaggregatenumberofholdersofsuchshares.Thesurvivingcorporationmustmailthis
statementtotherequestingstockholderwithin10daysafterreceiptofthewrittenrequestforsuchastatementorwithin10daysaftertheexpirationoftheperiodfordeliveryofdemandsfor
appraisal,whicheverislater.Abeneficialownerofsharesheldeitherinavotingtrustorbyanomineeonbehalfofsuchpersonmay,insuchpersonsownname,fileapetitionseeking
appraisalorrequestfromthesurvivingcorporationtheforegoingstatements.Asnotedabove,however,thedemandforappraisalcanonlybemadebyastockholderofrecord.
Ifapetitionforanappraisalisdulyfiledbyaholderofsharesofcommonstockandacopythereofisserveduponthesurvivingcorporation,thesurvivingcorporationwillthenbe
obligatedwithin20daysaftersuchservicetofilewiththeDelawareRegisterinChanceryadulyverifiedlistcontainingthenamesandaddressesofallstockholderswhohavedemanded
paymentfortheirsharesandwithwhomagreementsastothevalueoftheirshareshavenotbeenreached.After
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TableofContents
noticetothestockholdersasrequiredbythecourt,atthehearingonsuchpetition,theDelawareCourtofChancerywilldeterminethestockholderswhohavecompliedwithSection262and
whohavebecomeentitledtoappraisalrightsthereunder.TheDelawareCourtofChancerymayrequirethestockholderswhodemandedappraisalfortheirsharestosubmittheirstock
certificatestotheRegisterinChanceryfornotationthereonofthependencyoftheappraisalproceedings;andifanystockholderfailstocomplywiththedirection,theDelawareCourtof
Chancerymaydismisstheproceedingsastosuchstockholder.
Determination of Fair Value
AftertheDelawareCourtofChancerydeterminestheholdersofcommonstockentitledtoappraisal,theappraisalproceedingwillbeconductedinaccordancewiththerulesofthe
CourtofChancery,includinganyrulesspecificallygoverningappraisalproceedings.Throughsuchproceeding,theDelawareCourtofChancerywilldeterminethefairvalueofthesharesof
commonstock,exclusiveofanyelementofvaluearisingfromtheaccomplishmentorexpectationofthemerger,togetherwithinterest,ifany,tobepaidupontheamountdeterminedtobethe
fairvalue.Indeterminingfairvalue,theDelawareCourtofChancerywilltakeintoaccountallrelevantfactors.Unlessthecourtinitsdiscretiondeterminesotherwiseforgoodcauseshown,
interestfromtheeffectivedateofthemergerthroughthedateofpaymentofthejudgmentwillbecompoundedquarterlyandwillaccrueat5%overtheFederalReservediscountrate(including
anysurcharge)asestablishedfromtimetotimeduringtheperiodbetweentheeffectivedateofthemergerandthedateofpaymentofthejudgment.InWeinberger
v.
UOP,
Inc.
,theSupreme
CourtofDelawarediscussedthefactorsthatcouldbeconsideredindeterminingfairvalueinanappraisalproceeding,statingthatproofofvaluebyanytechniquesormethodswhichare
generallyconsideredacceptableinthefinancialcommunityandotherwiseadmissibleincourtshouldbeconsidered,andthat[f]airpriceobviouslyrequiresconsiderationofallrelevantfactors
involvingthevalueofacompany.TheDelawareSupremeCourtstatedthat,inmakingthisdeterminationoffairvalue,thecourtmustconsidermarketvalue,assetvalue,dividends,earnings
prospects,thenatureoftheenterpriseandanyotherfactsthatcouldbeascertainedasofthedateofthemergerthatthrowanylightonfutureprospectsofthemergedcorporation.Section262
providesthatfairvalueistobeexclusiveofanyelementofvaluearisingfromtheaccomplishmentorexpectationofthemerger.InCede
&
Co.
v.
Technicolor,
Inc.
,theDelawareSupreme
Courtstatedthatsuchexclusionisanarrowexclusion[that]doesnotencompassknownelementsofvalue,butwhichratherappliesonlytothespeculativeelementsofvaluearisingfromsuch
accomplishmentorexpectation.InWeinberger
,theSupremeCourtofDelawarealsostatedthatelementsoffuturevalue,includingthenatureoftheenterprise,whichareknownor
susceptibleofproofasofthedateofthemergerandnottheproductofspeculation,maybeconsidered.
StockholdersconsideringseekingappraisalshouldbeawarethatthefairvalueoftheirsharesassodeterminedbytheDelawareCourtofChancerycouldbemorethan,thesameasor
lessthantheconsiderationtheywouldreceivepursuanttothemergeriftheydidnotseekappraisaloftheirsharesandthatanopinionofaninvestmentbankingfirmastothefairnessfroma
financialpointofviewoftheconsiderationpayableinamergerisnotanopinionasto,andmaynotinanymanneraddress,fairvalueunderSection262oftheDGCL.Although
LinkedIn
believes
that
the
per
share
merger
consideration
is
fair,
no
representation
is
made
as
to
the
outcome
of
the
appraisal
of
fair
value
as
determined
by
the
Delaware
Court
of
Chancery,
and
stockholders
should
recognize
that
such
an
appraisal
could
result
in
a
determination
of
a
value
higher
or
lower
than,
or
the
same
as,
the
per
share
merger
consideration
.Neither
LinkedInnorMicrosoftanticipatesofferingmorethanthepersharemergerconsiderationtoanystockholderexercisingappraisalrights,andeachofLinkedInandMicrosoftreservestherightto
assert,inanyappraisalproceeding,thatforpurposesofSection262,thefairvalueofashareofcommonstockislessthanthepersharemergerconsideration.Ifapetitionforappraisalisnot
timelyfiled,thentherighttoanappraisalwillcease.Thecostsoftheappraisalproceedings(whichdonotincludeattorneysfeesorthefeesandexpensesofexperts)maybedeterminedbythe
DelawareCourtofChanceryandtaxeduponthepartiesastheDelawareCourtofChancerydeemsequitableunderthecircumstances.Uponapplicationofastockholder,theDelawareCourtof
Chancerymayalsoorderthatalloraportionoftheexpensesincurredbyanystockholderinconnectionwiththeappraisalproceeding,including,withoutlimitation,reasonableattorneysfees
andthefeesandexpensesofexperts,bechargedprorataagainstthevalueofallthesharesentitledtoanappraisal.
Ifanystockholderwhodemandsappraisalofhis,heroritssharesofcommonstockunderSection262failstoperfect,orlosesorvalidlywithdraws,suchholdersrighttoappraisal,the
stockholderssharesofcommonstockwillbedeemedtohavebeenconvertedattheeffectivetimeofthemergerintotherighttoreceivethepersharemerger
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TableofContents
considerationasprovidedinthemergeragreement.Astockholderwillfailtoperfect,oreffectivelylosesuchholdersrighttoappraisalifnopetitionforappraisalisfiledwithin120daysafter
theeffectivetimeofthemergerorifthestockholderdeliverstothesurvivingcorporationawrittenwithdrawalofsuchholdersdemandforappraisalandanacceptanceofthepersharemerger
considerationasprovidedinthemergeragreementinaccordancewithSection262.
Fromandaftertheeffectivetimeofthemerger,nostockholderwhohasdemandedappraisalrightswillbeentitledtovotesuchsharesofcommonstockforanypurposeortoreceive
paymentofdividendsorotherdistributionsonthestock(exceptdividendsorotherdistributionspayabletostockholdersofrecordatadatewhichispriortotheeffectivedateofthemerger):
provided,however,thatifnopetitionforanappraisalisfiledwithinthetimeprovidedinSection262,orifsuchstockholderdeliverstothesurvivingcorporationawrittenwithdrawalofsuch
stockholdersdemandforanappraisalandanacceptanceofthemerger,eitherwithin60daysaftertheeffectivedateofthemergerorthereafterwiththewrittenapprovalofthesurviving
corporation,thentherightofsuchstockholdertoanappraisalwillcease.Notwithstandingtheforegoing,noappraisalproceedingintheDelawareCourtofChancerywillbedismissedastoany
stockholderwithouttheapprovaloftheCourt,andsuchapprovalmaybeconditioneduponsuchtermsastheCourtdeemsjust;provided,however,thattheforegoingshallnotaffecttherightof
anystockholderwhohasnotcommencedanappraisalproceedingorjoinedthatproceedingasanamedpartytowithdrawsuchstockholdersdemandforappraisalandtoaccepttheterms
offereduponthemergerorconsolidationwithin60daysaftertheeffectivedateofthemergerorconsolidation.
FailuretocomplystrictlywithalloftheproceduressetforthinSection262mayresultinthelossofastockholdersstatutoryappraisalrights.Consequently,anystockholderwishing
toexerciseappraisalrightsisencouragedtoconsultlegalcounselbeforeattemptingtoexercisethoserights.
Accounting
Treatment
Themergerwillbeaccountedforasapurchasetransactionforfinancialaccountingpurposes.
Material
U.S.
Federal
Income
Tax
Consequences
of
the
Merger
ThefollowingdiscussionisasummaryofmaterialU.S.federalincometaxconsequencesofthemergerthatmayberelevanttoU.S.HoldersandNon-U.S.Holders(eachasdefined
below)ofsharesofcommonstockwhosesharesareconvertedintotherighttoreceivecashpursuanttothemerger.ThisdiscussionisbasedupontheInternalRevenueCodeof1986,as
amended,whichwerefertoastheCode,TreasuryRegulationspromulgatedundertheCode,courtdecisions,publishedpositionsoftheInternalRevenueService,whichwerefertoasthe
IRS,andotherapplicableauthorities,allasineffectonthedateofthisproxystatementandallofwhicharesubjecttochangeordifferinginterpretations,possiblywithretroactiveeffect.This
discussionislimitedtoholderswhoholdtheirsharesofcommonstockascapitalassetswithinthemeaningofSection1221oftheCode(generally,propertyheldforinvestmentpurposes).
Thisdiscussionisforgeneralinformationonlyanddoesnotaddressallofthetaxconsequencesthatmayberelevanttoholdersinlightoftheirparticularcircumstances.Forexample,
thisdiscussiondoesnotaddress:
taxconsequencesthatmayberelevanttoholderswhomaybesubjecttospecialtreatmentunderU.S.federalincometaxlaws,suchasfinancialinstitutions;tax-exempt
organizations;Scorporations,partnershipsandanyotherentityorarrangementtreatedasapartnershiporpass-throughentityforU.S.federalincometaxpurposes,and
shareholders,partnersorinvestorsinsuchentities;insurancecompanies;mutualfunds;dealersinstocksandsecurities;tradersinsecuritiesthatelecttousethemark-to-market
methodofaccountingfortheirsecurities;regulatedinvestmentcompanies;realestateinvestmenttrusts;entitiessubjecttotheU.S.anti-inversionrules;holderswhoholdtheir
commonstockasqualifiedsmallbusinessstockforpurposesofSections1045and1202oftheCode;orcertainformercitizensorlong-termresidentsoftheUnitedStates;
taxconsequencestoholdersholdingthesharesaspartofahedging,constructivesaleorconversion,straddleorotherriskreductiontransaction;
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taxconsequencestoholderswhoreceivedtheirsharesofcommonstockinacompensatorytransactionorpursuanttotheexerciseofoptionsorwarrants;
taxconsequencestoU.S.HolderswhosefunctionalcurrencyisnottheU.S.dollar;
taxconsequencestoholderswhoholdtheircommonstockthroughabank,financialinstitutionorotherentity,orabranchthereof,located,organizedorresidentoutsidethe
UnitedStates;
taxconsequencestoholderswhoarecontrolledforeigncorporations,passiveforeigninvestmentcompaniesorpersonalholdingcompaniesforU.S.federalincometax
purposes;
taxconsequencesarisingfromtheMedicaretaxonnetinvestmentincome;
theU.S.federalestate,giftoralternativeminimumtaxconsequences,ifany;
anystate,localornon-U.S.taxconsequences;or
taxconsequencestoholdersthatdonotvoteinfavorofthemergerandwhoproperlydemandappraisaloftheirsharesunderSection262oftheDGCL.
Ifapartnership(includinganentityorarrangement,domesticorforeign,treatedasapartnershipforU.S.federalincometaxpurposes)isabeneficialownerofsharesofcommonstock,
thenthetaxtreatmentofapartnerinsuchpartnershipwillgenerallydependuponthestatusofthepartnerandtheactivitiesofthepartnerandthepartnership.Partnershipsholdingsharesof
commonstockandpartnersthereinshouldconsulttheirtaxadvisorsregardingtheconsequencesofthemerger.
NorulinghasbeenorwillbeobtainedfromtheIRSregardingtheU.S.federalincometaxconsequencesofthemergerdescribedbelow.IftheIRScontestsaconclusionsetforth
herein,noassurancecanbegiventhataholderwouldultimatelyprevailinafinaldeterminationbyacourt.
THIS
DISCUSSION
IS
PROVIDED
FOR
GENERAL
INFORMATION
ONLY
AND
DOES
NOT
CONSTITUTE
LEGAL
ADVICE
TO
ANY
HOLDER.
A
HOLDER
SHOULD
CONSULT
ITS
OWN
TAX
ADVISORS
CONCERNING
THE
U.S.
FEDERAL
INCOME
TAX
CONSEQUENCES
RELATING
TO
THE
MERGER
IN
LIGHT
OF
ITS
PARTICULAR
CIRCUMSTANCES
AND
ANY
CONSEQUENCES
ARISING
UNDER
FEDERAL
NON-INCOME
TAX
LAWS
OR
THE
LAWS
OF
ANY
STATE,
LOCAL
OR
NON-U.S.
TAXING
JURISDICTION.
U.S. Holders
Forpurposesofthisdiscussion,aU.S.HolderisabeneficialownerofsharesofcommonstockthatisforU.S.federalincometaxpurposes:
anindividualwhoisacitizenorresidentoftheUnitedStates;
acorporation,orotherentitytaxableasacorporationforU.S.federalincometaxpurposes,createdororganizedinorunderthelawsoftheUnitedStatesoranystatethereofor
theDistrictofColumbia;
anestate,theincomeofwhichissubjecttoU.S.federalincometaxationregardlessofitssource;or
atrust(1)thatissubjecttotheprimarysupervisionofacourtwithintheUnitedStatesandthecontrolofoneormoreUnitedStatespersonsasdefinedinsection7701(a)(30)of
theCode;or(2)thathasavalidelectionineffectunderapplicableTreasuryregulationstobetreatedasaUnitedStatesperson.
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ThereceiptofcashbyaU.S.HolderinexchangeforsharesofcommonstockpursuanttothemergerwillbeataxabletransactionforU.S.federalincometaxpurposes.Ingeneral,
suchU.S.Holdersgainorlosswillbeequaltothedifference,ifany,betweentheamountofcashreceivedandtheU.S.Holdersadjustedtaxbasisinthesharessurrenderedpursuanttothe
merger.AU.S.HoldersadjustedtaxbasisgenerallywillequaltheamountthatsuchU.S.Holderpaidfortheshares.Suchgainorlosswillbecapitalgainorlossandwillbelong-termcapital
gainorlossifsuchU.S.Holdersholdingperiodinsuchsharesismorethanoneyearatthetimeofthecompletionofthemerger.Areducedtaxrateoncapitalgaingenerallywillapplytolongtermcapitalgainofanon-corporateU.S.Holder(includingindividuals).Thedeductibilityofcapitallossesissubjecttolimitations.IfaU.S.holderacquireddifferentblocksofsharesof
commonstockatdifferenttimesanddifferentprices,suchholdermustdetermineitsadjustedtaxbasisandholdingperiodseparatelywithrespecttoeachblockofourcommonstock.
Non-U.S. Holders
Forpurposesofthisdiscussion,thetermNon-U.S.HoldermeansabeneficialownerofsharesofcommonstockthatisneitheraU.S.HoldernorapartnershipforU.S.federal
incometaxpurposes.
AnygainrealizedbyaNon-U.S.HolderpursuanttothemergergenerallywillnotbesubjecttoU.S.federalincometaxunless:
thegainiseffectivelyconnectedwithatradeorbusinessofsuchNon-U.S.HolderintheUnitedStates(and,ifrequiredbyanapplicableincometaxtreaty,isattributabletoa
permanentestablishmentmaintainedbysuchNon-U.S.HolderintheUnitedStates),inwhichcasesuchgaingenerallywillbesubjecttoU.S.federalincometaxatratesgenerally
applicabletoU.S.persons,and,iftheNon-U.S.Holderisacorporation,suchgainmayalsobesubjecttothebranchprofitstaxatarateof30%(oralowerrateunderanapplicable
incometaxtreaty);
suchNon-U.S.HolderisanindividualwhoispresentintheUnitedStatesfor183daysormoreinthetaxableyearofthatdisposition,andcertainotherspecifiedconditionsare
met,inwhichcasesuchgainwillbesubjecttoU.S.federalincometaxatarateof30%(oralowerrateunderanapplicableincometaxtreaty);or
LinkedInisorhasbeenaUnitedStatesrealpropertyholdingcorporationassuchtermisdefinedinSection897(c)oftheCode,whichwerefertoasaUSRPHC,atanytime
withintheshorterofthefive-yearperiodprecedingthemergerorsuchNon-U.S.Holdersholdingperiodwithrespecttotheapplicablesharesofcommonstock,whichwereferto
astherelevantperiod,and,ifsharesofcommonstockareregularlytradedonanestablishedsecuritiesmarket(withinthemeaningofSection897(c)(3)oftheCode),suchNonU.S.Holderownsdirectlyorisdeemedtoownpursuanttoattributionrulesmorethan5%ofourcommonstockatanytimeduringtherelevantperiod,inwhichcasesuchgainwill
besubjecttoU.S.federalincometaxatratesgenerallyapplicabletoU.S.persons(asdescribedinthefirstbulletpointabove),exceptthatthebranchprofitstaxwillnotapply.We
believethatwearenot,andhavenotbeen,aUSRPHCatanytimeduringthefive-yearperiodprecedingthemerger.
Information Reporting and Backup Withholding
Informationreportingandbackupwithholding(atacurrentrateof28%)mayapplytotheproceedsreceivedbyaholderpursuanttothemerger.Backupwithholdinggenerallywillnot
applyto(1)aU.S.HolderthatfurnishesacorrecttaxpayeridentificationnumberandcertifiesthatsuchU.S.HolderisnotsubjecttobackupwithholdingonIRSFormW-9(orasubstituteor
successorform);or(2)aNon-U.S.Holderthat(1)providesacertificationofsuchNon-U.S.Holdersnon-U.S.statusontheappropriateseriesofIRSFormW-8(orasubstituteorsuccessor
form);or(2)otherwiseestablishesanexemptionfrombackupwithholding.Backupwithholdingisnotanadditionaltax.Anyamountswithheldunderthebackupwithholdingruleswillbe
allowedasarefundoracreditagainsttheholdersU.S.federalincometaxliability,providedthattherequiredinformationistimelyfurnishedtotheIRS.
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Regulatory
Approvals
Required
for
the
Merger
General
LinkedInandMicrosofthaveagreedtousetheirreasonablebesteffortstocomplywithallregulatorynotificationrequirementsandobtainallregulatoryapprovalsrequiredto
consummatethemergerandtheothertransactionscontemplatedbythemergeragreement.Theseapprovalsincludeapprovalunder,ornotificationspursuantto,theHSRActandthe
competitionlawsoftheEuropeanUnionandCanada.
Inaddition,eachofLinkedInandMicrosofthaveagreedto(1)cooperateandcoordinatewitheachothertomakesuchfilings;(2)useitsreasonablebesteffortstosupplytheother
withanyinformationthatmayberequiredinordertomakesuchfilings;(3)useitsreasonablebesteffortstosupplyanyadditionalinformationthatreasonablymayberequestedtoobtain
regulatoryapprovals;(4)useitsreasonablebesteffortstotakeallactionnecessarytoobtainregulatoryapprovalsassoonaspracticable;and(5)providenoticetotheotherpartyifitplansto
participateinanymaterialmeetingorsubstantiveconversationwithrespecttothemerger.
Ifandtotheextentnecessarytoobtainregulatoryapprovalofthemerger,Microsoft,MergerSuband,solelytotheextentrequestedbyMicrosoft,LinkedInwill(1)offer,negotiate,
committoandeffect,byconsentdecree,holdseparateorderorotherwise,(A)thesale,divestiture,licenseorotherdispositionofanyandallofthecapitalstockorotherequityorvoting
interest,assets(whethertangibleorintangible),rights,productsorbusinessesofLinkedIn;and(B)anyotherrestrictionsontheactivitiesoftheLinkedIn;and(2)contest,defendandappealany
legalproceedings,whetherjudicialoradministrative,challengingthemergeragreementortheconsummationofthemerger.Notwithstandingtheforegoing,Microsoftisnotobligatedtooffer,
negotiate,committo,effectorotherwisetakeanyactionwithrespecttoLinkedInthatwouldreasonablybeexpectedtobemateriallyadversetothebusiness,financialconditionorresultsof
operationsofLinkedIn.Microsoftisnotrequiredtooffer,negotiate,committo,effectorotherwisetakeanyactionwithrespecttoitsbusinessiftakingsuchactionwouldreasonablybe
expectedto(1)haveamaterialimpactonthebenefitsexpectedtobederivedfromthemergerbyMicrosoftor(2)havemorethananimmaterialimpactonanybusinessorproductlineof
Microsoftanditssubsidiaries.
HSR Act and U.S. Antitrust Matters
UndertheHSRActandtherulespromulgatedthereunder,themergercannotbecompleteduntilLinkedInandMicrosoftfileanotificationandreportformwiththeFederalTrade
Commission,whichwerefertoastheFTC,andtheAntitrustDivisionoftheDepartmentofJustice,whichwerefertoastheDOJ,undertheHSRActandtheapplicablewaitingperiodhas
expiredorbeenterminated.AtransactionnotifiableundertheHSRActmaynotbecompleteduntiltheexpirationofa30calendardaywaitingperiodfollowingthepartiesfilingoftheir
respectiveHSRActnotificationformsortheearlyterminationofthatwaitingperiod.TheDOJortheFTCmayextendthe30daywaitingperiodbyissuingaRequestforAdditional
Information(alsoknownasaSecondRequest).IfeitheragencyissuesaSecondRequest,thewaitingperiodisextendeduntil30daysafterthepartiessubstantiallycomplywiththerequest.
Atanytimebeforeorafterconsummationofthemerger,notwithstandingtheterminationofthewaitingperiodundertheHSRAct,theFTCortheAntitrustDivisionoftheDOJcould
takesuchactionundertheantitrustlawsasitdeemsnecessaryordesirableinthepublicinterest,includingseekingtoenjointhecompletionofthemerger,seekingdivestitureofsubstantial
assetsofthepartiesorrequiringthepartiestolicense,orholdseparate,assetsorterminateexistingrelationshipsandcontractualrights.Atanytimebeforeorafterthecompletionofthemerger,
andnotwithstandingtheterminationofthewaitingperiodundertheHSRAct,anystatecouldtakesuchactionundertheantitrustlawsasitdeemsnecessaryordesirableinthepublicinterest.
Suchactioncouldincludeseekingtoenjointhecompletionofthemergerorseekingdivestitureofsubstantialassetsoftheparties.Privatepartiesmayalsoseektotakelegalactionunderthe
antitrustlawsundercertaincircumstances.
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Foreign Competition Laws
LinkedInandMicrosoftconductbusinessinMemberStatesoftheEuropeanUnion.CouncilRegulation(EC)No.139/2004,asamended,andaccompanyingregulationsrequire
notificationofandapprovalbytheEuropeanCommissionofmergersoracquisitionsinvolvingpartieswithworldwidesalesandEuropeanUnionsalesexceedinggiventhresholdsbeforethese
mergersandacquisitionscanbeimplemented.ThepartieswillfileaformalnotificationofthetransactionwiththeEuropeanCommissionaspromptlyasreasonablypracticableandadvisable.
PursuanttoCouncilRegulation(EC)No.139/2004,theEuropeanCommissionhas25businessdaysfromthedayfollowingthedateofreceiptofacompletenotification,whichperiod
maybeextendedto35businessdaysundercertaincircumstances,inwhichtoconsiderwhetherthemergerwouldsignificantlyimpedeeffectivecompetitioninthecommonmarket(asdefined
byEuropeanCommunityregulations)orasubstantialpartofit,inparticularasaresultofthecreationorstrengtheningofadominantposition.Bytheendofthatperiod,theEuropean
Commissionmustissueadecisioneitherclearingthemerger,whichmaybeconditionaluponsatisfactionofthepartiesundertakings,oropeninganin-depthPhaseIIinvestigation.APhase
IIinvestigationmaylastamaximumofanadditional125businessdays.ItispossiblethataninvestigationcouldresultinachallengetothemergerbasedonEuropeanUnioncompetitionlaw
orregulations.
Thecompletionofthemergerisalsosubjecttocertainfilingrequirementsand/orapprovalsunderthecompetitionlawsofCanada.Thepartiesmustalsoobservemandatorywaiting
periodsand/orobtainthenecessaryapprovals,clearancesorconsentsintherequiredforeignjurisdictionsbeforecompletingthemerger.Thepartieswillfilemergernotificationswiththe
appropriateregulatorsineachoftherequiredforeignjurisdictionsaspromptlyaspracticableandworkcooperativelytowardexpeditedregulatoryclearances.
Other Regulatory Approvals
Oneormoregovernmentalbodiesmayimposeacondition,restriction,qualification,requirementorlimitationwhenitgrantsthenecessaryapprovalsandconsentstothemerger.Third
partiesmayalsoseektointerveneintheregulatoryprocessorlitigatetoenjoinoroverturnregulatoryapprovals,whichactionscouldsignificantlyimpedeorevenprecludeobtainingrequired
regulatoryapprovals.Thereiscurrentlynowaytopredicthowlongitwilltaketoobtainalloftherequiredregulatoryapprovalsorwhethersuchapprovalswillultimatelybeobtained,and
theremaybeasubstantialperiodoftimebetweentheapprovalbyLinkedInstockholdersandthecompletionofthemerger.
Althoughweexpectthatallrequiredregulatoryclearancesandapprovalswillbeobtained,wecannotassureyouthattheseregulatoryclearancesandapprovalswillbetimelyobtained,
obtainedatallorthatthegrantingoftheseregulatoryclearancesandapprovalswillnotinvolvetheimpositionofadditionalconditionsonthecompletionofthemergerorrequirechangestothe
termsofthemergeragreement.Theseconditionsorchangescouldresultintheconditionstothemergernotbeingsatisfied.
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TableofContents
PROPOSAL
1:
ADOPTION
OF
THE
MERGER
AGREEMENT
Weareaskingyoutoapprovetheadoptionofthemergeragreement.Forasummaryofanddetailedinformationregardingthisproposal,seetheinformationaboutthemerger
agreementthroughoutthisproxystatement,includingtheinformationsetforthunderthesectionsofthisproxystatementcaptionedTheMergerandTheMergerAgreement.Acopyofthe
mergeragreementisattachedasAnnexAtothisproxystatement.Youareurgedtoreadthemergeragreementcarefullyandinitsentirety.
The
LinkedIn
Board
unanimously
recommends
that
you
vote
FOR
this
proposal.
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TableofContents
PROPOSAL
2:
ADJOURNMENT
OF
THE
SPECIAL
MEETING
Weareaskingyoutoapproveaproposaltoadjournthespecialmeetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotesto
adoptthemergeragreementatthetimeofthespecialmeeting.Ifstockholdersapprovetheadjournmentproposal,wecouldadjournthespecialmeetingandanyadjournedsessionofthespecial
meetingandusetheadditionaltimetosolicitadditionalproxies,includingsolicitingproxiesfromstockholdersthathavepreviouslyreturnedproperlysignedproxiesvotingagainstadoptionof
themergeragreement.Amongotherthings,approvaloftheadjournmentproposalcouldmeanthat,evenifwehadreceivedproxiesrepresentingasufficientnumberofvotesagainstadoptionof
themergeragreementsuchthattheproposaltoadoptthemergeragreementwouldbedefeated,wecouldadjournthespecialmeetingwithoutavoteontheadoptionofthemergeragreementand
seektoconvincetheholdersofthosesharestochangetheirvotestovotesinfavorofadoptionofthemergeragreement.Additionally,wemayseektoadjournthespecialmeetingifaquorumis
notpresent,andthechairofthespecialmeetingmayalsoadjournthespecialmeetingforsuchpurposeevenifthestockholdershavenotapprovedtheproposaltoadjournthespecialmeeting.
The
LinkedIn
Board
unanimously
recommends
that
you
vote
FOR
this
proposal.
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TableofContents
PROPOSAL
3:
ADVISORY,
NON-BINDING
VOTE
TO
APPROVE
CERTAIN
MERGER-RELATED
EXECUTIVE
COMPENSATION
ARRANGEMENTS
Section14AoftheExchangeAct,whichwasenactedaspartoftheDodd-FrankWallStreetReformandConsumerProtectionActof2010,requiresthatweprovidestockholderswith
theopportunitytovotetoapprove,onanadvisory,non-bindingbasis,thepaymentofcertaincompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersin
connectionwiththemerger,asdisclosedinthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMergerGolden
ParachuteCompensation.
WeareaskingstockholderstoapprovethecompensationthatwillormaybecomepayablebyLinkedIntoournamedexecutiveofficersinconnectionwiththemerger.Thesepayments
aresetforthinthesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersofintheMergerGoldenParachuteCompensationand
theaccompanyingfootnotes.Ingeneral,thevariousplansandarrangementspursuanttowhichthesecompensationpaymentsmaybemadehavepreviouslyformedpartofLinkedInsoverall
compensationprogramforournamedexecutiveofficersandpreviouslyhavebeendisclosedtostockholdersaspartoftheCompensationDiscussionandAnalysisandrelatedsectionsofour
annualproxystatements.ThesehistoricalarrangementswereadoptedandapprovedbytheCompensationCommitteeoftheLinkedInBoard,whichiscomposedsolelyofnon-management
directors,andarebelievedtobereasonableandinlinewithmarketplacenorms.ThecompensationthatmaybeprovidedtoJeffreyWeinerinconnectionwithhisnewofferletterenteredinto
withMicrosoftisnotsubjecttothisadvisory,non-bindingvote.
Accordingly,weareseekingapprovalofthefollowingresolutionatthespecialmeeting:
RESOLVED,thatthestockholdersofLinkedInCorporationapprove,onanadvisory,non-bindingbasis,thecompensationthatwillormaybecomepayabletoLinkedInsnamed
executiveofficersthatisbasedonorotherwiserelatestothemergerasdisclosedpursuanttoItem402(t)ofRegulationS-KinthesectioncaptionedTheMergerInterestsofLinkedIns
DirectorsandExecutiveOfficersintheMergerGoldenParachuteCompensationinLinkedInsproxystatementforthespecialmeeting.
Stockholdersshouldnotethatthisproposalisnotaconditiontocompletionofthemerger,and,asanadvisoryvote,theresultwillnotbebindingonLinkedIn,theLinkedInBoardor
Microsoft.Further,theunderlyingplansandarrangementsarecontractualinnatureandnot,bytheirterms,subjecttostockholderapproval.Accordingly,regardlessoftheoutcomeofthe
advisoryvote,ifthemergerisconsummatedournamedexecutiveofficerswillbeeligibletoreceivethecompensationthatisbasedonorthatotherwiserelatestothemergerinaccordancewith
thetermsandconditionsapplicabletothosepayments.
The
LinkedIn
Board
unanimously
recommends
that
you
vote
FOR
this
proposal.
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TableofContents
THE
MERGER
AGREEMENT
The
following
summary
describes
the
material
provisions
of
the
merger
agreement.
The
descriptions
of
the
merger
agreement
in
this
summary
and
elsewhere
in
this
proxy
statement
are
not
complete
and
are
qualified
in
their
entirety
by
reference
to
the
merger
agreement,
a
copy
of
which
is
attached
to
this
proxy
statement
as
Annex
A
and
incorporated
into
this
proxy
statement
by
reference.
We
encourage
you
to
read
the
merger
agreement
carefully
and
in
its
entirety
because
this
summary
may
not
contain
all
the
information
about
the
merger
agreement
that
is
important
to
you.
The rights and obligations of the parties are governed by the express terms of the merger agreement and not by this summary or any other information contained in this
proxy statement.
The
representations,
warranties,
covenants
and
agreements
described
below
and
included
in
the
merger
agreement
(1)
were
made
only
for
purposes
of
the
merger
agreement
and
as
of
specific
dates;
(2)
were
made
solely
for
the
benefit
of
the
parties
to
the
merger
agreement;
(3)
may
be
subject
to
important
qualifications,
limitations
and
supplemental
information
agreed
to
by
LinkedIn,
Microsoft
and
Merger
Sub
in
connection
with
negotiating
the
terms
of
the
merger
agreement;
and
(4)
may
also
be
subject
to
a
contractual
standard
of
materiality
different
from
those
generally
applicable
to
reports
and
documents
filed
with
the
SEC
and
in
some
cases
were
qualified
by
confidential
matters
disclosed
to
Microsoft
and
Merger
Sub
by
LinkedIn
in
connection
with
the
merger
agreement.
In
addition,
the
representations
and
warranties
may
have
been
included
in
the
merger
agreement
for
the
purpose
of
allocating
contractual
risk
between
LinkedIn,
Microsoft
and
Merger
Sub
rather
than
to
establish
matters
as
facts,
and
may
be
subject
to
standards
of
materiality
applicable
to
such
parties
that
differ
from
those
applicable
to
investors.
Further,
the
representations
and
warranties
were
negotiated
with
the
principal
purpose
of
establishing
the
circumstances
in
which
a
party
to
the
merger
agreement
may
have
the
right
not
to
consummate
the
merger
if
the
representations
and
warranties
of
the
other
party
prove
to
be
untrue
due
to
a
change
in
circumstance
or
otherwise.
LinkedIn
stockholders
are
not
third-party
beneficiaries
under
the
merger
agreement
and
should
not
rely
on
the
representations,
warranties,
covenants
and
agreements
or
any
descriptions
thereof
as
characterizations
of
the
actual
state
of
facts
or
condition
of
LinkedIn,
Microsoft
or
Merger
Sub
or
any
of
their
respective
affiliates
or
businesses.
Moreover,
information
concerning
the
subject
matter
of
the
representations
and
warranties
may
change
after
the
date
of
the
merger
agreement
and
subsequent
developments
or
new
information
qualifying
a
representation
or
warranty
may
have
been
included
in
this
proxy
statement.
In
addition,
you
should
not
rely
on
the
covenants
in
the
merger
agreement
as
actual
limitations
on
the
respective
businesses
of
LinkedIn,
Microsoft
and
Merger
Sub,
because
the
parties
may
take
certain
actions
that
are
either
expressly
permitted
in
the
confidential
disclosure
letter
to
the
merger
agreement
or
as
otherwise
consented
to
by
the
appropriate
party,
which
consent
may
be
given
without
prior
notice
to
the
public.
The
merger
agreement
is
described
below,
and
included
as
Annex
A,
only
to
provide
you
with
information
regarding
its
terms
and
conditions,
and
not
to
provide
any
other
factual
information
regarding
LinkedIn,
Microsoft,
Merger
Sub
or
their
respective
businesses.
Accordingly,
the
representations,
warranties,
covenants
and
other
agreements
in
the
merger
agreement
should
not
be
read
alone,
and
you
should
read
the
information
provided
elsewhere
in
this
document
and
in
our
filings
with
the
SEC
regarding
LinkedIn
and
our
business.
Closing
and
Effective
Time
of
the
Merger
Theclosingofthemergerwilltakeplacenolaterthanthesecondbusinessdayfollowingthesatisfactionorwaiverofallconditionstoclosingofthemerger(describedinthesectionof
thisproxystatementcaptionedTheMergerAgreementConditionstotheClosingoftheMerger),otherthanconditionsthatbytheirtermsaretobesatisfiedattheclosingofthemerger,but
subjecttothesatisfactionorwaiverofeachofsuchconditions,orsuchothertimeagreedtoinwritingbyMicrosoft,LinkedInandMergerSub.Concurrentlywiththeclosingofthemerger,the
partieswillfileacertificateofmergerwiththeSecretaryofStateoftheStateofDelawareasprovidedundertheDGCL.Themergerwillbecomeeffectiveuponthefilingofacertificateof
merger,oratsuchlatertimeagreedtoinwritingbythepartiesandspecifiedinsuchcertificateofmerger.
Effects
of
the
Merger;
Certificate
of
Incorporation;
Bylaws;
Directors
and
Officers
Themergeragreementprovidesthat,subjecttothetermsandconditionsofthemergeragreement,andinaccordancewiththeDGCL,attheeffectivetimeofthemerger,(1)Merger
SubwillbemergedwithandintoLinkedInandLinkedInwillbecomeawhollyownedsubsidiaryofMicrosoft;and(2)theseparatecorporateexistenceofMergerSubwill
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cease.Fromandaftertheeffectivetimeofthemerger,alloftheproperty,rights,privileges,powersandfranchisesofLinkedInandMergerSubwillvestinthesurvivingcorporation,andallof
thedebts,liabilitiesanddutiesofLinkedInandMergerSubwillbecomethedebts,liabilitiesanddutiesofthesurvivingcorporation.
Attheeffectivetimeofthemerger,thecertificateofincorporationofLinkedInasthesurvivingcorporationwillbeamendedandrestatedinitsentiretyintheformattachedtothe
mergeragreement,andthebylawsofMergerSub,asineffectimmediatelypriortotheeffectivetimeofthemerger,willbecomethebylawsofthesurvivingcorporation,untilthereafter
amended.
Thepartieswilltakeallnecessaryactiontoensurethat,effectiveasof,andimmediatelyfollowing,theeffectivetimeofthemerger,theboardofdirectorsofthesurvivingcorporation
willconsistofthedirectorsofMergerSubasofimmediatelypriortotheeffectivetimeofthemerger,toholdofficeinaccordancewiththecertificateofincorporationandbylawsofthe
survivingcorporationuntiltheirsuccessorsaredulyelectedorappointedandqualified.Thepartieswilltakeallnecessaryactiontoensurethatattheeffectivetimeofthemerger,theofficersof
theCompanyasofimmediatelypriortotheeffectivetimeofthemergerwillbetheofficersofthesurvivingcorporation,untiltheirsuccessorsaredulyappointed.
Conversion
of
Shares
Common Stock
Attheeffectivetimeofthemerger,eachoutstandingshareofClassAandClassBcommonstock(collectivelyreferredtoascommonstock)(otherthansharesheldby(1)LinkedIn
astreasurystock;(2)Microsoft,MergerSubortheirrespectivesubsidiaries;and(3)LinkedInstockholderswhohaveproperlyandvalidlyexercisedandperfectedtheirappraisalrightsunder
Delawarelawwithrespecttosuchshares)willbecancelledandautomaticallyconvertedintotherighttoreceivethepersharemergerconsideration(whichis$196.00pershare,withoutinterest
thereonandsubjecttoapplicablewithholdingtaxes).
Attheeffectivetimeofthemerger,eachoutstandingshareofcommonstockheldby(1)LinkedInor(2)Microsoft,MergerSubortheirrespectivesubsidiariesshallbecancelledand
shallceasetoexist,andnoconsiderationshallbedeliveredinexchangetherefor.
Equity Awards; ESPP
ThemergeragreementprovidesthatLinkedInsequityawardsthatareoutstandingimmediatelypriortotheeffectivetimeofthemergerwillbesubjecttothefollowingtreatmentatthe
effectivetimeofthemerger:
Stock Options
Eachsurrenderedcompanyoptionwill,asoftheeffectivetimeofthemerger,becancelledandconvertedintotherighttoreceivethepersharemergerconsiderationof$196.00for
eachshareofLinkedIncommonstockthatwouldhavebeenissuableuponexerciseofsuchsurrenderedcompanyoptionpriortotheeffectivetimeofthemergerlesstheapplicableexercise
priceforeachsuchshareofLinkedIncommonstockundersuchsurrenderedcompanyoptionandlessanyapplicablewithholdingtaxes.Ifthepershareexercisepriceofanysurrendered
companyoptionisequaltoorgreaterthan$196.00,suchsurrenderedcompanyoptionwillbecancelledasoftheeffectivetimeofthemergerfornopaymentandwillhavenofurthereffect.
Eachassumedcompanyoptionwill,asoftheeffectivetimeofthemerger,be,asdeterminedbyMicrosoft,(1)assumedbyMicrosoftandconvertedintoanoptiontoacquire;or
(2)convertedintoanoptiongrantedpursuanttotheMicrosoftstockplantoacquire,ineachcaseonthesamematerialtermsandconditionsaswereapplicabletosuchassumedcompanyoption
immediatelypriortotheeffectivetimeofthemerger,anumberofsharesofMicrosoftcommonstockequaltotheproduct(roundeddowntothenearestwholeshare)of(1)thenumberofshares
ofLinkedIncommonstocksubjecttosuchassumedcompanyoptionasofimmediatelypriortotheeffectivetimeofthemergermultipliedby(2)the
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stockawardexchangeratio.Thepershareexercisepriceforassumedcompanyoptionswillequalthequotient(roundeduptothenearestwholecent)determinedbydividing(1)thepershare
exercisepricefortheLinkedIncommonstocksubjecttosuchassumedcompanyoptionasofimmediatelypriortotheeffectivetimeofthemergerby(2)thestockawardexchangeratio.Each
companyoptionthatisoutstandingasofimmediatelypriortotheeffectivetimeofthemergerandhasanexercisepricepersharethatisequaltoorgreaterthan$196.00andisnotasurrendered
companyoptionwillbecancelledasoftheeffectivetimeofthemergerfornopaymentandwillhavenofurthereffect.
options,whichwillbecomefullyvestedandthencancelledandtreatedinaccordancewiththeabove.
Stock-Based Awards
Eachsurrenderedcompanystock-basedawardwill,asoftheeffectivetimeofthemerger,becancelledandconvertedintotherighttoreceivethepersharemergerconsiderationof
$196.00withrespecttoeachshareofLinkedIncommonstocksubjecttothesurrenderedcompanystock-basedaward,lessanyapplicablewithholdingtaxes.
Eachassumedcompanystock-basedawardwill,asoftheeffectivetimeofthemerger,be,asdeterminedbyMicrosoft,(1)assumedbyMicrosoftandconvertedintoastock-based
award;or(2)convertedintoastock-basedawardgrantedpursuanttotheMicrosoftstockplan,ineachcasewiththesamematerialtermsandconditionsaswereapplicabletosuchassumed
companystock-basedawardimmediatelypriortotheeffectivetimeofthemerger,inrespectofanumberofsharesofMicrosoftcommonstockequaltotheproduct(roundeddowntothe
nearestwholeshare)of(1)thenumberofsharesofLinkedIncommonstocksubjecttosuchassumedcompanystock-basedawardasofimmediatelypriortotheeffectivetimeofthemerger
multipliedby(2)thestockawardexchangeratio.
surrenderedcompanystock-basedawards,whichwillbecomefullyvestedandthencancelledandtreatedasasurrenderedcompanystock-basedaward.
ESPP
LinkedInsexecutiveofficerswilldeterminethefinalexercisedateforpurposesoftheESPP.Onsuchexercisedate,LinkedInwillapplythefundscreditedasofsuchdatepursuantto
increasehisorherpayrollcontributionratepursuanttotheESPPfromtherateineffectwhenthatofferingperiodcommenced,andthateachindividualparticipatingintheESPPnoworinany
theESPP;(3)causetheexercise(asofnolaterthanonebusinessdaypriortothedateonwhichtheeffectivetimeofthemergeroccurs)ofeachoutstandingpurchaserightpursuanttotheESPP;
and(4)providethatnofurtherofferingperiodorpurchaseperiodwillcommencepursuanttotheESPPaftertheeffectivetimeofthemerger.
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Exchange
and
Payment
Procedures
Priortotheclosingofthemerger,Microsoftwilldesignateabankortrustcompany,whichwerefertoasthepayingagent,tomakepaymentsofthemergerconsiderationto
LinkedInstockholders.Atorpromptlyfollowingtheeffectivetimeofthemerger,Microsoftwilldepositorcausetobedepositedwiththepayingagentcashsufficienttopaytheaggregateper
sharemergerconsiderationtoLinkedInstockholdersinaccordancewiththemergeragreement.
Assoonasreasonablypracticablefollowingtheeffectivetimeofthemerger,thepayingagentwillsendtoeachholderofrecordofsharesofcommonstockaletteroftransmittaland
instructionsadvisingstockholdershowtosurrenderstockcertificatesandbook-entrysharesinexchangeforthepersharemergerconsideration.Uponreceiptof(1)surrenderedcertificates(or
anappropriateaffidavitforlost,stolenordestroyedcertificates,togetherwithanyrequiredbond)oracustomaryagentsmessagewithrespecttobook-entrysharesrepresentingthesharesof
commonstock;and(2)asignedletteroftransmittalandsuchotherdocumentsasmayberequiredpursuanttosuchinstructions,theholderofsuchshareswillbeentitledtoreceivethepershare
mergerconsiderationinexchangetherefor,withoutinterest.TheamountofanypersharemergerconsiderationpaidtoLinkedInstockholdersmaybereducedbyanyapplicablewithholding
taxes.
Ifanycashdepositedwiththepayingagentisnotclaimedwithinoneyearfollowingtheeffectivetimeofthemerger,suchcashwillbereturnedtoMicrosoft,upondemand,andany
stockholderswhohavenotcompliedwiththeexchangeproceduresinthemergeragreementwillthereafterlookonlytoMicrosoftforsatisfactionoftheirclaimsforpayment.Noneof
Microsoft,MergerSub,LinkedIn,thesurvivingcorporationorthepayingagentwillbeliabletoanyLinkedInstockholderwithrespecttoanycashamountsproperlydeliveredtoanypublic
officialpursuanttoanyapplicableabandonedpropertylaw,escheatlaworsimilarlaw.
Theletteroftransmittalwillincludeinstructionsifastockholderhaslostasharecertificateorifsuchcertificatehasbeenstolenordestroyed.Intheeventthatanycertificateshave
beenlost,stolenordestroyed,thenbeforesuchstockholderwillbeentitledtoreceivethepersharemergerconsideration,Microsoftorthepayingagentmay,initsdiscretionandasacondition
precedenttothepaymentofthemergerconsideration,requiresuchstockholdertomakeanaffidavitoftheloss,theftordestruction,andtodeliverabondinsuchamountasMicrosoftorthe
payingagentmaydirectasindemnityagainstanyclaimthatmaybemadeagainstMicrosoft,thesurvivingcorporationorthepayingagentwithrespecttosuchcertificate.
Representations
and
Warranties
ThemergeragreementcontainsrepresentationsandwarrantiesofLinkedIn,MicrosoftandMergerSub.
SomeoftherepresentationsandwarrantiesinthemergeragreementmadebyLinkedInarequalifiedastomaterialityorCompanyMaterialAdverseEffect.Forpurposesofthe
mergeragreement,CompanyMaterialAdverseEffectmeans,withrespecttoLinkedIn,anychange,event,violation,inaccuracy,effectorcircumstancethat,individuallyortakentogether
withallotherchanges,events,violations,inaccuracies,effectsorcircumstancesthathaveoccurredpriortothedateofdeterminationoftheoccurrenceoftheCompanyMaterialAdverseEffect,
hashadorwouldreasonablybeexpectedtohaveamaterialadverseeffectonthebusiness,assets,liabilities,financialconditionorresultsofoperationsofLinkedInanditssubsidiaries,takenas
awhole,exceptthat,noneofthefollowing(byitselforwhenaggregated)totheextentoccurringafterthedateofthemergeragreementwillbedeemedtobeorconstituteaCompanyMaterial
AdverseEffectorwillbetakenintoaccountwhendeterminingwhetheraCompanyMaterialAdverseEffecthasoccurredormay,wouldorcouldoccur:
changesingeneraleconomicconditionsintheUnitedStatesoranyothercountryorregionintheworld,orchangesinconditionsintheglobaleconomygenerally(excepttothe
extentthatsuchconditionsdisproportionatelyaffectLinkedInrelativetoothercompaniesoperatingintheindustriesinwhichLinkedInanditssubsidiariesconductbusiness);
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changesinconditionsinthefinancialmarkets,creditmarketsorcapitalmarketsintheUnitedStatesoranyothercountryorregionintheworld,including(1)changesininterest
ratesorcreditratingsintheUnitedStatesoranyothercountry;(2)changesinexchangeratesforthecurrenciesofanycountry;or(3)anysuspensionoftradinginsecurities
(whetherequity,debt,derivativeorhybridsecurities)generallyonanysecuritiesexchangeorover-the-countermarketoperatingintheUnitedStatesoranyothercountryorregion
intheworld(except,ineachcase,totheextentthatsuchchangesorconditionsdisproportionatelyaffectLinkedInrelativetoothercompaniesoperatingintheindustriesinwhich
LinkedInanditssubsidiariesconductbusiness);
generalchangesinconditionsintheindustriesinwhichLinkedInanditssubsidiariesconductbusiness(excepttotheextentthatsuchchangesdisproportionatelyaffectLinkedIn
relativetoothercompaniesoperatingintheindustriesinwhichLinkedInanditssubsidiariesconductbusiness);
changesinregulatory,legislativeorpoliticalconditionsintheUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchchangesdisproportionately
affectLinkedInrelativetoothercompaniesoperatingintheindustriesinwhichLinkedInanditssubsidiariesconductbusiness);
anygeopoliticalconditions,outbreakofhostilities,actsofwar,sabotage,terrorismormilitaryactions(includinganyescalationorgeneralworseningofanysuchhostilities,acts
ofwar,sabotage,terrorismormilitaryactions)intheUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchconditionsorevents
disproportionatelyaffectsLinkedInrelativetoothercompaniesoperatingintheindustriesinwhichLinkedInanditssubsidiariesconductbusiness);
earthquakes,hurricanes,tsunamis,tornadoes,floods,mudslides,wildfiresorothernaturaldisasters,weatherconditionsandothersimilarforcemajeureeventsintheUnitedStates
oranyothercountryorregionintheworld(excepttotheextentthatsuchconditionsoreventsdisproportionatelyaffectsLinkedInrelativetoothercompaniesoperatinginthe
industriesinwhichLinkedInanditssubsidiariesconductbusiness);
thepublicannouncementorpendencyofthemergeragreementorthemerger(otherthanforpurposesofcertainrepresentationsandwarranties,andcertainrelatedtermsand
conditions,concerningconflictsduetotheperformanceofthemergeragreement);
anyactiontakenorrefrainedfrombeingtaken,ineachcasetowhichMicrosofthasexpresslyapproved,consentedtoorrequestedinwritingfollowingthedateofthemerger
agreement;
changesorproposedchangesinGAAPorotheraccountingstandardsorlaw(ortheenforcementorinterpretationofanyoftheforegoing);
changesinthepriceortradingvolumeofourcommonstockorourindebtedness,inandofitself(itbeingunderstoodthatanycauseofsuchchangemaybedeemedtoconstitute,
inandofitself,aCompanyMaterialAdverseEffectandmaybetakenintoconsiderationwhendeterminingwhetheraCompanyMaterialAdverseEffecthasoccurred);
anyfailure,inandofitself,byLinkedInanditssubsidiariestomeet(1)anypublicestimatesorexpectationsofLinkedInsrevenue,earningsorotherfinancialperformanceor
resultsofoperationsforanyperiod;or(2)anyinternalbudgets,plans,projectionsorforecastsofitsrevenues,earningsorotherfinancialperformanceorresultsofoperations(it
beingunderstoodthatanycauseofanysuchfailuremaybedeemedtoconstitute,inandofitself,aCompanyMaterialAdverseEffectandmaybetakenintoconsiderationwhen
determiningwhetheraCompanyMaterialAdverseEffecthasoccurred);and
anylitigationrelatedtothemerger.
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Inthemergeragreement,LinkedInhasmadecustomaryrepresentationsandwarrantiestoMicrosoftandMergerSubthataresubject,insomecases,tospecifiedexceptionsand
qualificationscontainedinthemergeragreement.Theserepresentationsandwarrantiesrelateto,amongotherthings:
dueorganization,validexistence,goodstandingandauthorityandqualificationtoconductbusinesswithrespecttoLinkedInanditssubsidiaries;
LinkedInscorporatepowerandauthoritytoenterintoandperformthemergeragreement,thedueexecutionandenforceabilityofthemergeragreement;
theorganizationaldocumentsofLinkedInandspecifiedsubsidiaries;
theapprovalandrecommendationoftheLinkedInBoard;
therenderingofQatalystPartnersfairnessopiniontotheLinkedInBoard;
theinapplicabilityofanti-takeoverstatutestothemerger;
therequisitevoteofLinkedInstockholdersinconnectionwiththemergeragreement;
theabsenceofanyconflictwith,violationofordefaultunderanyorganizationaldocuments,existingmaterialcontracts,applicablelawstoLinkedInoritssubsidiariesorthe
resultingcreationofanylienuponLinkedInsassetsduetotheperformanceofthemergeragreement;
requiredconsents,approvalsandregulatoryfilingsinconnectionwiththemergeragreementandperformancethereof;
thecapitalstructureofLinkedInanditssubsidiaries;
theabsenceofanyundisclosedexchangeablesecurity,option,warrantorotherrightconvertibleintocommonstockofLinkedInoranyofLinkedInssubsidiaries;
theabsenceofanycontractrelatingtothevotingof,requiringregistrationof,orgrantinganypreemptiverights,anti-dilutiverightsorrightsoffirstrefusalorothersimilarrights
withrespecttoanyofLinkedInssecurities;
theaccuracyandrequiredfilingsofLinkedInsSECfilingsandfinancialstatements;
LinkedInsdisclosurecontrolsandprocedures;
LinkedInsinternalaccountingcontrolsandprocedures;
LinkedInsanditssubsidiariesindebtedness;
theabsenceofspecifiedundisclosedliabilities;
theconductofthebusinessofLinkedInanditssubsidiariesinallmaterialrespectsintheordinarycourseandtheabsenceofanyCompanyMaterialAdverseEffectandcertain
otherevents,ineachcasesinceJanuary1,2016;
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theexistenceandenforceabilityofspecifiedcategoriesofLinkedInsmaterialcontracts,andthelackofanybreachesordefaultsthereunderandofanynoticeswithrespectto
terminationorintentnottorenewthosematerialcontractstherefrom;
realpropertyowned,leasedorsubleasedbyLinkedInanditssubsidiaries;
environmentalmatters;
trademarks,patents,copyrightsandotherintellectualpropertymatters;
taxmatters;
employeebenefitplans;
laborandemploymentmatters;
compliancewithlaws,includingtheForeignCorruptPracticesAct,andpossessionofnecessarypermits;
theabsenceoflegalproceedingsandorders;
insurancematters;
absenceofanytransactions,relationsorunderstandingsbetweenLinkedInoranyofitssubsidiariesandanyaffiliateorrelatedperson;and
paymentoffeestobrokersinconnectionwiththemergeragreement.
Inthemergeragreement,MicrosoftandMergerSubhavemadecustomaryrepresentationsandwarrantiestoLinkedInthataresubject,insomecases,tospecifiedexceptionsand
qualificationscontainedinthemergeragreement.Theserepresentationsandwarrantiesrelateto,amongotherthings:
dueorganization,goodstandingandauthorityandqualificationtoconductbusinesswithrespecttoMicrosoftandMergerSub,exceptwherethefailuretobeinsuchgood
standing,ortohavesuchpowerorauthority,wouldnotpreventormateriallydelaytheirabilitytoconsummatethemerger;
MicrosoftsandMergerSubscorporateauthoritytoenterintoandperformthemergeragreement,thedueexecutionandenforceabilityofthemergeragreementandthe
availabilityoforganizationaldocuments;
theabsenceofanyconflictwith,violationofordefaultunderanyorganizationaldocuments,existingcontracts,applicablelawsortheresultingcreationofanylienupon
MicrosoftorMergerSubsassetsduetotheperformanceofthemergeragreement;
requiredconsentsandregulatoryfilingsinconnectionwiththemergeragreement;
theabsenceoflegalproceedingsandorders;
ownershipofcapitalstockofLinkedIn;
paymentoffeestobrokersinconnectionwiththemergeragreement;
matterswithrespecttoMicrosoftssufficiencyoffunds;and
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theexclusivityandtermsoftherepresentationsandwarrantiesmadebyLinkedIn.
Therepresentationsandwarrantiescontainedinthemergeragreementwillnotsurvivetheconsummationofthemerger.
Conduct
of
Business
Pending
the
Merger
Themergeragreementprovidesthat,exceptas(1)expresslycontemplatedbythemergeragreement;(2)approvedbyMicrosoft(whichapprovalwillnotbeunreasonablywithheld,
conditionedordelayed);or(3)disclosedintheconfidentialdisclosurelettertothemergeragreement,duringtheperiodoftimebetweenthedateofthemergeragreementandtheeffectivetime
ofthemerger(orearlierterminationofthemergeragreement),LinkedInwill,andwillcauseeachofitssubsidiariesto:
useitsrespectivereasonablebesteffortstomaintainitsexistenceingoodstandingpursuanttoapplicablelaw;
subjecttotherestrictionsandexceptionsinthemergeragreement,conductitsbusinessandoperationsintheordinarycourseofbusiness;and
useitsreasonablebesteffortstopreserveintactitsmaterialassets,properties,contracts,licensesandbusinessorganizations,keepavailabletheservicesofitscurrentofficersand
keyemployees,andpreservethecurrentrelationshipsandgoodwillwithcustomers,suppliersandotherpersonswithwhichitoritssubsidiarieshasbusinessrelations.
Inaddition,LinkedInhasalsoagreedthat,exceptas(1)expresslycontemplatedbythemergeragreement;(2)approvedbyMicrosoft(whichapprovalwillnotbeunreasonably
withheld,conditionedordelayed);or(3)disclosedintheconfidentialdisclosurelettertothemergeragreement,duringtheperiodoftimebetweenthedateofthemergeragreementandthe
effectivetimeofthemerger(orearlierterminationofthemergeragreement),LinkedInwillnot,andwillcauseeachofitssubsidiariesnotto,amongotherthings:
amendorotherwisechangetheorganizationaldocumentsofLinkedInoranyofitssubsidiaries;
liquidate,dissolveorreorganize;
issue,sell,deliverorgrantanysharesofcapitalstockoranyoptions,warrants,commitments,subscriptionsorrightstopurchaseanysimilarcapitalstockorsecuritiesofLinkedIn
oranyofitssubsidiaries,subjecttocertainexceptionsincluding,butnotlimitedto,thegrantingofcompanystock-basedawardsandcompanyoptions(or,inthecaseofcompany
options,theequivalentvalueincompanystock-basedawards)intheordinarycourseofbusinessandconsistentwithpastpracticeorasotherwisedisclosedtoMicrosoft;
directlyorindirectlyacquire,repurchaseorredeemanysecuritiesexceptforcertainexceptions;
adjust,split,subdivide,combine,pledge,encumberormodifythetermsofcapitalstockofLinkedInoranyofitssubsidiaries;
declare,setasideorpayanydividendorotherdistribution;
incur,assume,sufferormodifythetermsofanyindebtednessorissueanydebtsecurities,assumeorguaranteetheobligationsofanypersonotherthanitssubsidiaries,makeany
loansorinvestmentsinanypersonotherthanadvancestodirectors,officers,andotheremployeesforbusiness-relatedexpensesincurredinconnectionwithsuchpersonsroleat
LinkedInoritssubsidiariesintheordinarycourseofbusiness,orpledge,encumberorsufferanylienonanyassets;
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withoutfirstinformingMicrosoft,terminateanyemployeeatthelevelofseniorvicepresidentorabove(otherthanforcause)orhireanynewemployeeatthelevelofseniorvice
presidentoraboveunless,inthecaseofahiringonly,suchhiringisintheordinarycourseofbusinessandconsistentwithpastpractice;
enterinto,adopt,amend(includingacceleratingthevesting),modifyorterminateanyemployeebenefitplan,exceptintheordinarycourseofbusinessandconsistentwithpast
practiceinamannerthatwouldnot,intheaggregate,materiallyincreasethecosttoLinkedInanditssubsidiaries;
increasethecompensationorbenefitspayableorprovidedtocurrentorformeremployees,directors,officersorindependentcontractorsofLinkedInoritssubsidiaries,payany
specialbonustosuchpersonnelorgrantanyseverancetoanysuchpersonnel,subjecttocertainexceptions;
settle,release,waiveorcompromiseanylegalproceeding;
changeaccountingpracticesorrevalueinanymaterialrespectanyofLinkedInspropertiesorassets;
changetaxelectionsoranyaccountingmethodwithrespecttotaxes,settleanymaterialtaxclaims,filematerialamendedtaxreturnsortakecertainotherspecifiedactionswith
respecttotaxes;
incurorauthorizecapitalexpenditures,otherthantotheextentthatsuchcapitalexpendituresareotherwisereflectedinLinkedInscapitalexpenditurebudgetorarepursuantto
agreementsineffectpriortothedateofthemergeragreement,ineachcaseassetforthintheconfidentialdisclosurelettertothemergeragreement;
enterinto,modifyorterminatecertainmaterialcontracts;
maintaininsuranceatlessthancurrentlevels;
grantmaterialrefundsormateriallyalterpaymentandcollectionpractices;
waive,grantortransferanymaterialright;
effectcertainlayoffswithoutcomplyingwithapplicablelaws;
acquire(bymerger,consolidationoracquisitionofstockorassetsorotherwise),ormakeanyinvestmentsin,anyinterestinanyassetsoranyotherperson,exceptforpurchasesof
assetsintheordinarycourseofbusiness;
sell,transfer,pledgeorotherwisedisposeof(bymerger,consolidationordispositionofstockorassetsorotherwise)anyassetsconstitutingamateriallineofbusinessoranyother
materialassetsofLinkedInoranyofitssubsidiariesoranymaterialitemsofLinkedInsintellectualproperty,otherthanintheordinarycourseofbusiness;
enterintoanynewbusinesssegmentoutsideofLinkedInsanditssubsidiariesexistingbusinesssegmentsonthedateofthemergeragreement;or
enterinto,authorizeorcommittoenterinto,anagreementtotakeanyoftheforegoingactions.
No
Solicitation
of
Other
Offers
Underthemergeragreement,fromthedateofthemergeragreementuntiltheeffectivetimeofthemerger(ortheearlierterminationofthemergeragreement),LinkedInhasagreedto
ceaseandcausetobeterminatedanydiscussionsor
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negotiationswithandterminateanydataroomorotherdiligenceaccessofanyperson,itsaffiliatesanditsrepresentativesrelatingtoanacquisitiontransaction(asdefinedbelow)andtorequest
anypersonwhoexecutedaconfidentialityagreementinconnectionwithitsconsiderationofacquiringLinkedIntopromptlyreturnordestroyanynon-publicinformationfurnishedbyoron
behalfofLinkedInpriortothedateofthemergeragreement.
Underthemergeragreement,fromthedateofthemergeragreementuntiltheearliertooccuroftheterminationofthemergeragreementandtheeffectivetimeofthemerger,LinkedIn
hasagreed,andtocauseordirect,asthecasemaybe,itssubsidiariesanditsandtheirrespectiverepresentatives,notto:
solicit,initiate,proposeorinducethemaking,submissionorannouncementof,orknowinglyencourage,facilitateorassist,anyproposalthatconstitutes,orisreasonably
expectedtoleadto,anacquisitionproposal(asdefinedbelow);
furnishorotherwiseprovideaccesstoanynon-publicinformationregarding,ortothebusiness,properties,assets,books,recordsorpersonnelof,LinkedInoritssubsidiariesto
anypersoninconnectionwith,orwiththeintenttoinducethemakingof,ortoknowinglyencourage,facilitateorassistanacquisitionproposaloranyinquiriesorthemakingof
anyproposalthatwouldreasonablybeexpectedtoleadtoanacquisitionproposal;
participateorengageindiscussionsornegotiationswithanypersonwithrespecttoanacquisitionproposalorwithrespecttoanyinquiriesfromthirdpartiesrelatingtomakinga
potentialacquisitionproposal;
approve,endorse,orrecommendanyproposalthatconstitutes,orisreasonablyexpectedtoleadto,anacquisitionproposal;
enterintoanyletterofintent,memorandumofunderstanding,mergeragreement,acquisitionagreementorothercontractrelatingtoanacquisitiontransaction(asdefinedbelow);
or
authorizeorcommittodoanyoftheabove.
Notwithstandingtheserestrictions,priortotheadoptionofthemergeragreementbyLinkedInstockholdersandafterenteringintoanacceptableconfidentialityagreement,LinkedIn
mayfurnishinformationto,andenterintonegotiationsordiscussionswith,apersonregardingabonafidewrittenacquisitionproposalif:(1)LinkedIn,itssubsidiariesanditsandtheir
respectiverepresentativeshavenotbreachedanyoftheconditionsabovewithrespecttotheacquisitionproposalorsuchperson;(2)theLinkedInBoarddeterminesingoodfaith,after
consultationwithitsfinancialadvisoranditsoutsidelegalcounsel,thatsuchacquisitionproposalconstitutesorisreasonablylikelytoleadtoasuperiorproposal(asdefinedbelow);(3)the
LinkedInBoarddeterminesingoodfaith,afterconsultationwithitsoutsidelegalcounsel,thatthefailuretodosowouldbeinconsistentwithitsfiduciarydutiespursuanttoapplicablelaw;and
(4)LinkedInpriortoorcontemporaneouslymakesavailabletoMicrosoftanynon-publicinformationconcerningLinkedInthatisprovidedtosuchpersonthatwasnotpreviouslymade
availabletoMicrosoft.
IfLinkedIn,itssubsidiariesoritsortheirrepresentativesreceivesanacquisitionproposaloranyrequestfornon-publicinformationinconnectionwithanacquisitionproposalatany
timepriortotheearliertooccuroftheterminationofthemergeragreementandtheeffectivetimeofthemerger,LinkedInmustpromptly(andinalleventsbyaspecifiedtimeonthenext
businessday)adviseMicrosoftofsuchacquisitionproposalorrequest,includingtheidentityofthepersonmakingorsubmittingtheacquisitionproposalorrequest,thematerialtermsand
conditionsthereof,andcopiesofanywrittendocumentationsettingforthsuchterms.Thereafter,LinkedInmustkeepMicrosoftreasonablyinformed,onapromptbasis,ofthestatusandterms
ofanysuchoffersorproposals(includinganyamendmentsthereto)andthestatusofanysuchdiscussionsornegotiations.
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Forpurposesofthisproxystatementandthemergeragreement:
anacquisitionproposalisanyofferorproposal(otherthananofferorproposalbyMicrosoftorMergerSub)relatingtoanacquisitiontransaction;
anacquisitiontransactionisanytransactionorseriesoftransactions(otherthanthemerger)involvingany:
directorindirectpurchaseorotheracquisitionbyanypersonorgroup(asdefinedintheExchangeAct)ofpersonsofsecuritiesrepresentingmorethan15%ofthetotal
outstandingvotingpowerofLinkedIn,includingpursuanttoatenderofferorexchangeoffer;
directorindirectpurchase(includingbywayofamerger,consolidation,businesscombination,recapitalization,reorganization,liquidation,dissolutionorothertransaction),
licenseorotheracquisitionbyanypersonorgroupofpersonsofassets(includingequitysecuritiesofanysubsidiaryofLinkedIn)constitutingoraccountingformorethan
15%oftherevenue,netincomeorconsolidatedassetsofLinkedInanditssubsidiaries,takenasawhole;or
merger,consolidation,businesscombination,recapitalization,reorganization,liquidation,dissolutionorothertransactioninvolvingLinkedIn(oranyofitssubsidiarieswhose
businessaccountsformorethan15%oftherevenue,netincomeorconsolidatedassetsofLinkedInanditssubsidiaries,takenasawhole)inwhichthestockholdersof
LinkedIn(orsuchsubsidiary)priortosuchtransactionwillnotownatleast85%,directlyorindirectly,ofthesurvivingcompany;and
asuperiorproposalisabonafidewrittenacquisitionproposal(substituting50%for15%inthedefinitionofacquisitionproposalabove)foranacquisitiontransactionon
termsthattheLinkedInBoardhasdeterminedingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)wouldbemorefavorablefromafinancialpoint
ofviewthanthemergerandtakingintoaccountanyrevisionstothemergeragreementmadeorproposedbyMicrosoftpriortothetimeofsuchdeterminationandaftertakinginto
accounttheotherfactorsandmattersdeemedrelevantingoodfaithbytheLinkedInBoard,includingtheidentityofthepersonmakingtheproposal,thelikelihoodof
consummation,andthelegal,financial(includingfinancingterms),regulatory,timingandotheraspectsoftheproposal.
The
LinkedIn
Boards
Recommendation;
Company
Board
Recommendation
Change
Exceptasdescribedbelow,andsubjecttotheprovisionsdescribedbelow,theLinkedInBoardhasmadetherecommendationthattheholdersofsharesofcommonstockvoteFOR
theproposaltoadoptthemergeragreement.ThemergeragreementprovidesthattheLinkedInBoardwillnoteffectacompanyboardrecommendationchangeexceptasdescribedbelow.
Priortotheadoptionofthemergeragreementbystockholders,theLinkedInBoardmaynot(withanyactiondescribedinthefollowingbeingreferredtoasacompanyboard
recommendationchange):
withhold,withdraw,amend,qualifyormodify,orpubliclyproposetowithhold,withdraw,amend,qualifyormodify,theLinkedInBoardsrecommendationinamanneradverse
toMicrosoft;
adopt,approve,orrecommendanacquisitionproposal;
failtopubliclyreaffirmtheLinkedInBoardsrecommendationwithin10businessdaysoftheoccurrenceofamaterialeventordevelopmentandafterMicrosoftsorequestsin
writing(orifthespecialmeetingisscheduledtobeheldwithin10businessdays,thenwithinonebusinessdayafterMicrosoftsorequests);
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takeorfailtotakeanyformalactionormakeorfailtomakeanyrecommendationinconnectionwithatenderorexchangeoffer,otherthanarecommendationagainstsuchoffer
orastop,lookandlistencommunicationbytheLinkedInBoard(oracommitteethereof)toLinkedInsstockholderspursuanttoRule14d-9(f)promulgatedundertheExchange
Act(oranysubstantiallysimilarcommunication)(itbeingunderstoodthattheLinkedInBoard(oracommitteethereof)mayrefrainfromtakingapositionwithrespecttoan
acquisitionproposaluntilthecloseofbusinessonthe10thbusinessdayafterthecommencementofatenderorexchangeofferinconnectionwithsuchacquisitionproposal
withoutsuchactionbeingconsideredaviolationofthemergeragreement);or
failtoincludetheLinkedInBoardsrecommendationinthisproxystatement.
Notwithstandingtherestrictionsdescribedabove,priortotheadoptionofthemergeragreementbystockholders,theLinkedInBoardmay,uponcompliancewiththeprocedures
describedbelow,effectacompanyboardrecommendationchangeif(1)otherthaninconnectionwithabonafideacquisitionproposalthatconstitutesasuperiorproposal,therehasbeenan
interveningevent(asdefinedbelow);or(2)LinkedInhasreceivedabonafidewrittenacquisitionproposalthattheLinkedInBoardhasconcludedingoodfaith(afterconsultationwithits
financialadvisorandoutsidelegalcounsel)isasuperiorproposal,ineachcase,iftheLinkedInBoarddeterminesingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegal
counsel)thatafailuretoeffectacompanyboardrecommendationchangewouldbeinconsistentwiththeLinkedInBoardsfiduciarydutiespursuanttoapplicablelaw.
TheLinkedInBoardmayeffectacompanyboardrecommendationchange,butmaynotterminatethemergeragreement,inresponsetoaninterveningeventifandonlyif:
LinkedInhasprovidedpriorwrittennoticetoMicrosoftatleastthreebusinessdaysinadvancetotheeffectthattheLinkedInBoardhas(1)madethedeterminationdescribed
above;and(2)resolvedtoeffectacompanyboardrecommendationchangepursuanttomergeragreement,whichnoticemustdescribetheapplicableinterveningeventin
reasonabledetail;and
priortoeffectingsuchcompanyboardrecommendationchange,LinkedInanditsrepresentatives,duringsuchthreebusinessdayperiod,musthave(1)negotiatedwithMicrosoft
anditsrepresentativesingoodfaith(totheextentthatMicrosoftdesirestosonegotiate)tomakesuchadjustmentstothetermsandconditionsofthemergeragreementsothatthe
LinkedInBoardnolongerdeterminesingoodfaiththatthefailuretomakeacompanyboardrecommendationchangeinresponsetosuchinterveningeventwouldbeinconsistent
withitsfiduciarydutiespursuanttoapplicablelaw;and(2)permittedMicrosoftanditsrepresentativestomakeapresentationtotheLinkedInBoardregardingthemerger
agreementandanyadjustmentswithrespectthereto(totheextentthatMicrosoftrequeststomakesuchapresentation).
Inaddition,theLinkedInBoardmayeffectacompanyboardrecommendationchangeorterminatethemergeragreementinresponsetoabonafidewrittenacquisitionproposalthatthe
LinkedInBoardhasconcludedingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)isasuperiorproposalifandonlyif:
theLinkedInBoardhasdeterminedingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)thatthefailuretodosowouldbeinconsistentwithits
fiduciarydutiespursuanttoapplicablelaw;
LinkedInhascompliedwithitsobligationspursuanttothemergeragreementwithrespecttosuchacquisitionproposal;
LinkedInhasprovidedpriorwrittennoticetoMicrosoftatleastthreebusinessdaysinadvancetotheeffectthattheLinkedInBoardhas(1)receivedabonafidewritten
acquisitionproposalthathasnotbeenwithdrawn;(2)concludedingoodfaiththatsuchacquisitionproposalconstitutesasuperiorproposal;and(3)resolvedtoeffectacompany
boardrecommendationchangeortoterminatethemergeragreement,which
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noticewilldescribethebasisforsuchcompanyboardrecommendationchangeortermination,includingtheidentityofthepersonorgroupofpersonsmakingsuchacquisition
proposal,thematerialtermsofsuchacquisitionproposalandcopiesofallrelevantdocumentsrelatingtosuchacquisitionproposal;and
priortoeffectingsuchcompanyboardrecommendationchangeortermination,LinkedInanditsrepresentatives,duringthethreebusinessdaynoticeperioddescribedabove,have
(1)negotiatedwithMicrosoftanditsrepresentativesingoodfaith(totheextentthatMicrosoftdesirestosonegotiate)tomakesuchadjustmentstothetermsandconditionsofthe
mergeragreementsothatsuchacquisitionproposalwouldceasetoconstituteasuperiorproposal;and(2)permittedMicrosoftanditsrepresentativestomakeapresentationtothe
LinkedInBoardregardingthemergeragreementandanyadjustmentswithrespectthereto(totheextentthatMicrosoftrequeststomakesuchapresentation).
Intheeventofanymaterialrevisiontoanysuchbonafidewrittenacquisitionproposaldescribedabove,LinkedInhasalsoagreedtodeliveranewnoticetoMicrosoftandcomplywith
theaboveprocedureswithrespecttosuchnewwrittennotice(withthenoticeperiodbeingtwobusinessdays)andpriortoeffectingacompanyboardrecommendationchangeorterminatingthe
mergeragreement,attheendoftherelevantnoticeperiod,theLinkedInBoardmusthaveingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)reaffirmedits
determinationthatsuchbonafidewrittenacquisitionproposalisasuperiorproposal.
Forpurposesofthisproxystatementandthemergeragreement,aninterveningeventmeansanypositivechange,effect,development,circumstance,condition,eventoroccurrence
that(1)asofthedateofthemergeragreementwasnotknowntotheLinkedInBoard,ortheconsequencesofwhich(basedonfactsknowntothemembersoftheLinkedInBoardasofthedate
ofthemergeragreement)werenotreasonablyforeseeableasofthedateofthemergeragreement;and(2)doesnotrelatetoanyacquisitionproposal.
Stockholder
Meeting
LinkedInhasagreedtotakeallnecessaryactiontoestablisharecorddatefor,dulycall,givenoticeof,conveneandholdthespecialmeetingaspromptlyasreasonablypracticableand
onoraroundthe20thbusinessdayfollowingthecommencementofthemailingofthisproxystatementforthepurposeofvotingupontheadoptionofthemergeragreement.LinkedInis
permittedtopostponeoradjournthespecialmeetingincertaincircumstancesrelatedtosolicitingadditionalproxiesorrequirementsofapplicablelaw.
Employee
Benefits
Fromandaftertheeffectivetimeofthemerger,thesurvivingcorporationwill(andMicrosoftwillcausethesurvivingcorporationto)honorallofLinkedInsbenefitplansand
compensationandseverancearrangementsinaccordancewiththeirtermsasineffectimmediatelypriortotheeffectivetimeofthemerger.Thesurvivingcorporationwill(andMicrosoftwill
causethesurvivingcorporationoroneofitssubsidiariesto)continuetheemploymentofallemployeesoftheCompanyanditssubsidiariesasoftheeffectivetimeofthemergerbytakingsuch
actions,ifany,asarerequiredbyapplicablelaw.Foraperiodofoneyearfollowingtheeffectivetimeofthemerger,thesurvivingcorporationanditssubsidiarieswill(andMicrosoftwill
causethesurvivingcorporationanditssubsidiariesto)providecontinuingemployeeswithcompensation,benefits,andseverancepaymentsandbenefits(otherthanequity-basedcompensation
andindividualemploymentagreements,exceptasprovidedinthefirstsentenceofthisparagraph)atlevelsthat,takenasawhole,arenolessfavorableintheaggregatethanthecompensation,
benefits,andseverancepaymentsandbenefits(otherthanequity-basedcompensationandindividualemploymentagreements)providedtocontinuingemployeesimmediatelypriortothe
effectivetimeofthemerger,eitherthrough(1)LinkedInsbenefitplansandarrangementsinexistenceimmediatelypriortotheeffectivetimeofthemerger;(2)comparableplans,orsome
combinationof(1)and(2).Ineachcase,basecompensationandtargetincentivecompensationopportunitywillnotbedecreasedforaperiodofoneyearfollowingtheeffectivetimeofthe
mergerforanycontinuingemployeeemployedduringthatperiodexceptintheordinarycourseofbusinessconsistentwithLinkedInspastpractice.Additionally,forcontinuingemployees
whoterminateemploymentduringtheoneyearperiodfollowingtheeffectivetimeofthemerger,thesurvivingcorporationwill(and
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Microsoftwillcausethesurvivingcorporationto)provideseverancepaymentsandbenefitstoeligibleemployeesinaccordancewithLinkedInsseveranceplans,guidelinesandpracticesasin
effectonthedateofthemergeragreement.
TotheextentthataLinkedInbenefitplanorcomparableplanismadeavailabletoacontinuingemployeeaftertheeffectivetimeofthemerger(otherthanwithrespecttocertain
exceptions),thesurvivingcorporationanditssubsidiarieswill(andMicrosoftwillcausethesurvivingcorporationanditssubsidiariesto)grantcontinuingemployeescreditforallservicewith
LinkedInanditssubsidiariespriortotheeffectivetimeofthemergerforpurposesofeligibilitytoparticipate,vestingandentitlementtobenefitswherelengthofserviceisrelevant(including
forpurposesofvacationaccrualandseverancepayentitlement,butexcludingforpurposesofbenefitaccrualsunderanydefinedbenefitpensionplanorpost-employmentwelfareplan),except
thatsuchserviceneednotbecreditedtotheextentthatitwouldresultinduplicationofbenefits.Inaddition,(1)eachcontinuingemployeewillbeimmediatelyeligibletoparticipate,without
anywaitingperiod,inanyandallemployeebenefitplanssponsoredbythesurvivingcorporationanditssubsidiariestotheextentthatcoveragepursuanttoanysuchnewbenefitplanreplaces
coveragepursuanttoacomparableLinkedInbenefitplanorarrangementthatthecontinuingemployeeparticipatesinimmediatelybeforetheeffectivetimeofthemerger;(2)forpurposesof
eachnewbenefitplanprovidinghealthandwelfarebenefitstoacontinuingemployee,thesurvivingcorporationwillcauseallwaitingperiods,pre-existingconditionexclusions,evidenceof
insurabilityrequirementsandactively-at-workorsimilarrequirementsofsuchnewbenefitplanstobewaivedforsuchcontinuingemployeeandhisorhercovereddependents,totheextent
waivedunderthecorrespondingLinkedInbenefitplanorarrangement,andthesurvivingcorporationwillcauseanyeligibleexpensesincurredbysuchcontinuingemployeeandhisorher
covereddependentsduringtheportionoftheplanyearoftheLinkedInbenefitplanorarrangementendingonthedatethatsuchcontinuingemployeesparticipationinthecorrespondingnew
benefitplanbeginstobegivenfullcreditpursuanttosuchnewbenefitplanforpurposesofsatisfyingalldeductible,coinsuranceandmaximumout-of-pocketrequirementsapplicabletosuch
continuingemployeeandhisorhercovereddependentsfortheapplicableplanyearasifsuchamountshadbeenpaidinaccordancewithsuchnewbenefitplan,totheextentcreditedunderthe
LinkedInbenefitplanorarrangement;and(3)credittheaccountsofsuchcontinuingemployeespursuanttoanynewbenefitplanthatisaflexiblespendingplanwithanyunusedbalanceinthe
accountofsuchcontinuingemployee.Anyvacationorpaidtimeoffaccruedbutunusedbyacontinuingemployeeasofimmediatelypriortotheeffectivetimeofthemergerwillbecreditedto
suchcontinuingemployeefollowingtheeffectivetimeofthemergerinaccordancewithLinkedInsvacationorpaidtimeoffpoliciesineffectimmediatelypriortotheeffectivetimeofthe
merger.
Efforts
to
Close
the
Merger
Underthemergeragreement,Microsoft,MergerSubandLinkedInagreedtousereasonablebesteffortstotake,orcausetobetaken,allactionsandassistandcooperatewiththeother
parties,ineachcaseasarenecessary,properoradvisabletoconsummatethemergerandeffecttheothercontemplatedtransactionsthereunder,includingusingtheirreasonablebesteffortsto
causetheconditionstoclosingthemergerdescribedbelowtobesatisfied,complywithallregulatorynotificationrequirementsandobtainallregulatoryapprovalsrequiredtoconsummatethe
mergerandeffecttheothercontemplatedtransactionsthereunderandseektoobtainanyrequiredconsentsunderLinkedInscontracts.
Additionally,underthemergeragreement,ifandtotheextentnecessarytoobtainregulatoryapprovalofthemerger,Microsoft,MergerSuband,solelytotheextentrequestedby
Microsoft,LinkedIn,agreedto(1)offerandeffectthedivestitureorotherdispositionofanycapitalstockorassetsofLinkedIn;and(2)contest,defendandappealanylegalproceeding
challengingthemergeragreementortheconsummationofthemerger.Notwithstandingtheforegoing,MicrosoftisnotobligatedtotakeanyactionwithrespecttoLinkedInthatwould
reasonablybeexpectedtobemateriallyadversetoLinkedInsbusinessortotakeanyactionwithrespecttoMicrosoftsbusinessiftakingsuchactionwouldreasonablybeexpectedto(1)have
amaterialimpactonthebenefitsexpectedtobederivedfromthemergerbyMicrosoft;or(2)havemorethananimmaterialimpactonanybusinessorproductlineofMicrosoftandits
subsidiaries.
Indemnification
and
Insurance
Themergeragreementprovidesthatthesurvivingcorporationwill(andMicrosoftwillcausethesurvivingcorporationto)honorandfulfilltheobligationsofLinkedInpursuanttoany
indemnificationagreementsbetween
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LinkedIn,ontheonehand,andthecurrentorformerdirectors,officersoremployeesofLinkedIn,ontheotherhand,thataresetforthintheconfidentialdisclosurelettertothemerger
agreement.
Inaddition,themergeragreementprovidesthat,duringthesixyearperiodcommencingattheeffectivetimeofthemerger,thesurvivingcorporationwill(andMicrosoftwillcausethe
survivingcorporationto)indemnifyandholdharmlesseachcurrentorformerdirector,officeroremployeeofLinkedInoritssubsidiaries,tothefullestextentpermittedbylaw,fromand
againstallcosts,feesandexpenses(includingattorneysfeesandinvestigationexpenses),judgments,fines,losses,claims,damages,liabilitiesandamountspaidinsettlementorcompromisein
connectionwithanylegalproceedingarising,directlyorindirectly,outoforpertaining,directlyorindirectly,to(1)anyactionoromission,orallegedactionoromission,insuchindemnified
personscapacityasadirector,officer,employeeoragentofLinkedInoritssubsidiariesorotheraffiliates(regardlessofwhethersuchactionoromission,orallegedactionoromission,
occurredpriorto,atoraftertheeffectivetimeofthemerger);and(2)themerger,aswellasanyactionstakenbyLinkedIn,MicrosoftorMergerSubwithrespectthereto.Themergeragreement
alsoprovidesthatthesurvivingcorporationwilladvanceallfeesandexpenses(includingfeesandexpensesofanycounsel)asincurredbyanysuchindemnifiedpersoninthedefenseofsuch
legalproceeding.
Inaddition,withoutlimitingtheforegoing,unlessLinkedInhaspurchasedatailpolicypriortotheeffectivetimeofthemerger(whichLinkedInmaypurchase,providedthatthe
premiumforsuchinsurancedoesnotexceed250%oftheaggregateannualpremiumscurrentlypaid),themergeragreementrequiresMicrosofttocausethesurvivingcorporationtomaintain,on
termsnolessadvantageoustotheindemnifiedparties,LinkedInsdirectorsandofficersinsurancepoliciesforaperiodofatleastsixyearscommencingattheeffectivetimeofthemerger.
NeitherMicrosoftnorthesurvivingcorporationwillberequiredtopaypremiumsforsuchpolicytotheextentsuchpremiumsexceed,onanannualbasis,250%oftheaggregateannual
premiumscurrentlypaidbyLinkedIn,andifthepremiumforsuchinsurancecoveragewouldexceedsuchamountMicrosoftshallbeobligatedtocausethesurvivingcorporationtoobtainthe
greatestcoverageavailableforacostequaltosuchamount.
Themergeragreementalsoprovidesthattheindemnifiedpartiesarethirdpartybeneficiariesoftheindemnificationandinsuranceprovisionsinthemergeragreementandareentitled
toenforcesuchprovisions.
Formoreinformation,refertothesectionofthisproxystatementcaptionedTheMergerInterestsofLinkedInsDirectorsandExecutiveOfficersintheMerger.
Transaction
Litigation
LinkedInwill(1)provideMicrosoftwithpromptnoticeofallstockholderlitigationrelatingtothemergeragreement;(2)keepMicrosoftreasonablyinformedwithrespecttostatus
thereof;(3)giveMicrosofttheopportunitytoparticipateinthedefense,settlementorprosecutionofanysuchlitigation;and(4)willconsultwithMicrosoftwithrespecttothedefense,
settlementorprosecutionofanysuchlitigationandwillconsideringoodfaithMicrosoftsadvicewithrespecttosuchlitigation.LinkedInmaynotcompromise,settleorcometoan
arrangement,oragreetodoanyoftheforegoing,regardinganysuchlitigationwithoutMicrosoftspriorwrittenconsent.
Conditions
to
the
Closing
of
the
Merger
TheobligationsofMicrosoftandMergerSub,ontheonehand,andLinkedIn,ontheotherhand,toconsummatethemergeraresubjecttothesatisfactionorwaiver(wherepermitted
byapplicablelaw)ofeachofthefollowingconditions:
theadoptionofthemergeragreementbytherequisiteaffirmativevoteofLinkedInstockholders;
theexpirationorterminationoftheapplicablewaitingperiodunder,orobtainingallrequisiteconsentspursuantto,theHSRActandtheantitrustlawsoftheEuropeanUnionand
Canada;and
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theconsummationofthemergernotbeingrestrained,enjoined,renderedillegalorotherwiseprohibitedbyanylawororderofanygovernmentalauthority.
Inaddition,theobligationsofMicrosoftandMergerSubtoconsummatethemergeraresubjecttothesatisfactionorwaiver(wherepermittedbyapplicablelaw)ofeachofthe
followingadditionalconditions:
therepresentationsandwarrantiesofLinkedInrelatingtoorganization,goodstanding,corporatepower,enforceability,approvaloftheLinkedInBoard,QatalystPartnersfairness
opinion,anti-takeoverlaws,requisitestockholderapprovalandtheabsenceofanyCompanyMaterialAdverseEffectbeingtrueandcorrectasofthedateonwhichtheclosing
occursasifmadeatandasofsuchdate(excepttotheextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationand
warrantyshallhavebeentrueandcorrectasofsuchearlierdate),unlessanysuchrepresentationsorwarrantiesarequalifiedbyCompanyMaterialAdverseEffect,inwhichcase,
suchrepresentationsandwarrantiesshallhavebeentrueandcorrect(withoutdisregardingsuchCompanyMaterialAdverseEffectqualifications)asofthedateonwhichthe
closingoccursasifmadeatandasofsuchdate(excepttotheextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuch
representationandwarrantyshallhavebeentrueandcorrectasofsuchearlierdate);
therepresentationsandwarrantiesofLinkedInrelatingtocertainaspectsofthecapitalizationofLinkedInssubsidiariesbeingtrueandcorrectinallmaterialrespectsasofthe
dateonwhichtheclosingoccursasifmadeatandasofsuchdate;
therepresentationsandwarrantiesofLinkedInrelatingtocertainaspectsofLinkedInscapitalizationbeingtrueandcorrectasofthedateonwhichtheclosingoccursasifmade
atandasofsuchdate(excepttotheextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationandwarrantywillbe
trueandcorrectasofsuchearlierdate),exceptforsuchinaccuraciesthatarede
minimis
intheaggregate;
theotherrepresentationsandwarrantiesofLinkedInsetforthelsewhereinthemergeragreementbeingtrueandcorrect(withoutgivingeffecttoanymaterialityorCompany
MaterialAdverseEffectqualificationssetforththerein)asofthedateonwhichtheclosingoccursasifmadeatandasofsuchdate(excepttotheextentthatanysuch
representationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationandwarrantywillbetrueandcorrectasofsuchearlierdate),exceptforsuch
failurestobetrueandcorrectthatwouldnothaveorreasonablybeexpectedtohave,individuallyorintheaggregate,aCompanyMaterialAdverseEffect;
LinkedInhavingperformedandcompliedinallmaterialrespectswithallcovenantsandobligationsofthemergeragreementrequiredtobeperformedandcompliedwithbyitat
orpriortotheeffectivetimeofthemerger;
thereceiptbyMicrosoftandMergerSubofacustomaryclosingcertificateofLinkedIn;and
theabsenceofanyCompanyMaterialAdverseEffecthavingoccurredafterthedateofthemergeragreementthatiscontinuingasoftheeffectivetimeofthemerger.
Inaddition,theobligationofLinkedIntoconsummatethemergerissubjecttothesatisfactionorwaiver(wherepermittedbyapplicablelaw)ofeachofthefollowingadditional
conditions:
therepresentationsandwarrantiesofMicrosoftandMergerSubsetforthinthemergeragreementbeingtrueandcorrectasofthedateonwhichtheclosingoccursasifmadeat
andasofsuchdate(excepttotheextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationandwarrantywillbe
trueandcorrectasofsuchearlierdate),exceptforanysuchfailuretobe
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trueandcorrectthat(1)wouldnothaveorreasonablybeexpectedtohave,individuallyorintheaggregate,amaterialadverseeffectonMicrosoftanditssubsidiaries(as
specificallydefinedinthemergeragreement),and(2)wouldnot,individuallyorintheaggregate,preventormateriallydelaytheconsummationofthemerger;
MicrosoftandMergerSubhavingperformedandcompliedinallmaterialrespectswithallcovenantsandobligationsofthemergeragreementrequiredtobeperformedand
compliedwithbyMicrosoftorMergerSubatorpriortotheeffectivetimeofthemerger;
thereceiptbyLinkedInofacustomaryclosingcertificateofMicrosoftandMergerSub;and
theabsenceofanymaterialadverseeffectonMicrosoftanditssubsidiaries(asspecificallydefinedinthemergeragreement)havingoccurredafterthedateofmergeragreement
thatiscontinuingasoftheeffectivetimeofthemerger.
Termination
of
the
Merger
Agreement
Themergeragreementmaybeterminatedatanytimepriortotheeffectivetimeofthemerger,whetherbeforeoraftertheadoptionofthemergeragreementbyLinkedInstockholders,
inthefollowingways:
bymutualwrittenagreementofLinkedInandMicrosoft;
byeitherLinkedInorMicrosoftif:
(1)apermanentinjunctionorsimilarorderissuedbyacourtorotherlegalrestraintprohibitingconsummationofthemergerisineffect,oranyactiontakenbya
governmentalauthorityprohibitingthemergerhasbecomefinalandnon-appealable;or(2)anystatute,regulationororderprohibitingthemergerhasbeenenacted(except
thatapartymaynotterminatethemergeragreementpursuanttothisprovisionifsuchpartyhasfailedtouseitsreasonablebesteffortstoresist,appeal,obtainconsent
pursuantto,resolveorlift,asapplicable,suchinjunction,lawororder);
themergerhasnotbeenconsummatedbefore11:59pmPacifictimeonJanuary11,2017,whichwerefertoastheterminationdate,exceptthatifallconditionshavebeen
satisfied(otherthanthoseconditionstobesatisfiedatthetimeofclosingofthemerger)orwaived(totheextentpermittedbyapplicablelaw)bythatdatebutonthatdateany
oftheantitrustorcompetition-relatedconditionsortheconditionsrelatedtoprohibitivelawsororderssetforthinthemergeragreementhavenotbeensatisfied,theneither
LinkedInorMicrosoftmayelecttoextendtheterminationdateto11:59pmPacifictimeonJune11,2017,but:
apartymaynotterminatethemergeragreementpursuanttothisprovisionifsuchpartysactionorfailuretoactconstitutesabreachofthemergeragreementandis
theprimarycauseofthefailuretoconsummatethemergerbytheterminationdate;and
LinkedInmaynotterminatethemergeragreementpursuanttothisprovisionifithasnottakenavoteontheadoptionofthemergeragreementatthespecial
meeting;
theLinkedInstockholdersdonotadoptthemergeragreementatthespecialmeeting(exceptthatapartymaynotterminatethemergeragreementpursuanttothisprovisionif
suchpartysactionorfailuretoactconstitutesabreachofthemergeragreementandistheprimarycauseofthefailuretoobtaintheapprovaloftheLinkedInstockholdersat
thespecialmeeting);
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byLinkedInif:
afteracureperiod,MicrosoftorMergerSubhasbreachedorfailedtoperforminanymaterialrespectanyofitsrespectiverepresentations,warranties,covenantsorother
agreementsinthemergeragreement,suchthattherelatedclosingconditionwouldnotbesatisfied;
priortotheadoptionofthemergeragreementbyLinkedInstockholders,(1)LinkedInhasreceivedasuperiorproposal;(2)theLinkedInBoardhasauthorizedLinkedInto
enterintoanagreementtoconsummatethetransactioncontemplatedbysuchsuperiorproposal;(3)LinkedInpaysMicrosofta$725millionterminationfee;and(4)LinkedIn
hascompliedwithitsnon-solicitationobligationsunderthemergeragreement;
byMicrosoftif:
afteracureperiod,LinkedInhasbreachedorfailedtoperforminanymaterialrespectanyofitsrepresentations,warranties,covenantsorotheragreementsinthemerger
agreement,suchthattherelatedclosingconditionwouldnotbesatisfied;or
theLinkedInBoardhaseffectedacompanyboardrecommendationchange.
Intheeventthatthemergeragreementisterminatedpursuanttotheterminationrightsabove,themergeragreementwillbeofnofurtherforceoreffectwithoutliabilityofanypartyto
theotherparties(ortheirrepresentatives),asapplicable,exceptcertainsectionsofthemergeragreementwillsurvivetheterminationofthemergeragreementinaccordancewiththeirrespective
terms,includingtermsrelatingtoterminationfees.Notwithstandingtheforegoing,nothinginthemergeragreementwillrelieveanypartyfromanyliabilityforanywillfulbreachofany
representation,warranty,covenantoragreementcontainedinthemergeragreement.Inaddition,noterminationofthemergeragreementwillaffecttherightsorobligationsofanyparty
pursuanttotheconfidentialityagreementbetweenMicrosoftandLinkedIn,whichrights,obligationsandagreementswillsurvivetheterminationofthemergeragreementinaccordancewith
theirrespectiveterms.
Termination
Fee
Ifthemergeragreementisterminatedinspecifiedcircumstances,LinkedInhasagreedtopayMicrosoftaterminationfeeof$725million.
MicrosoftwillbeentitledtoreceivetheterminationfeefromLinkedInifthemergeragreementisterminated:
(1)byMicrosoftbecauseLinkedInhasmateriallybreacheditsrepresentations,warranties,covenantsoragreementsinthemergeragreement;(2)followingthedateofthemerger
agreementandpriortoitstermination,anacquisitionproposalhasbeenpubliclyannouncedorotherwisereceivedbyLinkedIn;and(3)LinkedInentersintoanagreementrelating
to,orconsummates,anacquisitiontransactionwithinoneyearoftheterminationofthemergeragreement(providedthat,forpurposesoftheterminationfee,allreferencesto
15%inthedefinitionofacquisitiontransactionaredeemedtobereferencesto50%);
byMicrosoft,becausetheLinkedInBoardhaseffectedacompanyboardrecommendationchange;
byeitherMicrosoftorLinkedInbecausetheLinkedInstockholdersfailtoadoptthemergeragreement;or
byLinkedIn,toenterintoanalternativeacquisitionagreementwithrespecttoasuperiorproposal.
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Specific
Performance
Microsoft,MergerSubandLinkedInareentitledtoaninjunction,specificperformanceandotherequitablerelieftopreventbreaches(orthreatenedbreaches)ofthemergeragreement
andtoenforcethetermsofthemergeragreement,inadditiontoanyotherremedytowhichtheyareentitledatlaworinequity.
Fees
and
Expenses
Exceptinspecifiedcircumstances,whetherornotthemergeriscompleted,LinkedIn,ontheonehand,andMicrosoftandMergerSub,ontheotherhand,areeachresponsibleforallof
theirrespectivecostsandexpensesincurredinconnectionwiththemergerandtheothertransactionscontemplatedbythemergeragreement.
Amendment
Subjecttoapplicablelaw,themergeragreementmaybeamendedinwritingbythepartiesatanytimepriortoclosingofthemerger,whetherbeforeorafteradoptionofthemerger
agreementbystockholders.However,afteradoptionofthemergeragreementbystockholders,noamendmentthatrequiresfurtherapprovalbysuchstockholderspursuanttotheDGCLmaybe
madewithoutsuchapproval.
Governing
Law;
Venue
ThemergeragreementisgovernedbyDelawarelaw.TheexclusivevenuefordisputesistheCourtofChanceryoftheStateofDelawareor,totheextentthattheCourtofChanceryof
theStateofDelawaredoesnothavesubjectmatterjurisdiction,anystateorfederalcourtintheStateofDelaware.
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MARKET
PRICES
AND
DIVIDEND
DATA
OurClassAcommonstockislistedontheNYSEunderthesymbolLNKD.ThereisnopublictradingmarketforourClassBcommonstock.Asof[
],2016,therewere[
]
sharesofClassAcommonstockand[
]sharesofClassBcommonstockoutstanding,heldbyapproximately[
]stockholdersofrecord.
Thefollowingtablesetsforth,fortheperiodsindicated,thehighandlowsalepricesforourClassAcommonstockasreportedbytheNYSE:
2016
High
2015
Low
High
2014
Low
High
Low
FiscalFirstQuarter
$
231.68
$
98.25
$
276.18
$
209.60
$
234.48
$
178.25
FiscalSecondQuarter
$
194.38
$
107.00
$
266.53
$
191.00
$
190.00
$
136.02
FiscalThirdQuarter(through[
],2016)
$
[
]
$
[
]
$
233.18
$
165.57
$
232.28
$
153.31
FiscalFourthQuarter
$
258.39
$
183.34
$
243.25
$
187.61
Wehaveneverdeclaredorpaid,anddonotanticipatedeclaringorpaying,anycashdividendsonourcapitalstock.
On[
],2016,thelatestpracticabletradingdaybeforetheprintingofthisproxystatement,theclosingpricefortheClassAcommonstockontheNYSEwas$[
]pershare.Youare
encouragedtoobtaincurrentmarketquotationsforourClassAcommonstock.
Followingthemerger,therewillbenofurthermarketforourClassAcommonstockanditwillbedelistedfromtheNYSEandderegisteredundertheExchangeAct.Asaresult,
followingthemergerwewillnolongerfileperiodicreportswiththeSEC.
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SECURITY
OWNERSHIP
OF
CERTAIN
BENEFICIAL
OWNERS
AND
MANAGEMENT
ThefollowingtablesetsforthinformationregardingthebeneficialownershipofourcommonstockasofJune15,2016asto(1)eachpersonwhoisknownbyustobeneficiallyown
morethan5%ofanyclassofouroutstandingcommonstock;(2)eachofthenamedexecutiveofficers;(3)eachdirector;and(4)alldirectorsandexecutiveofficersasagroup.Unless
otherwiseindicated,theaddressofeachlistedstockholderisc/oLinkedInCorporation,2029StierlinCourt,MountainView,CA94043.
Applicablepercentageownershipisbasedon119,154,625sharesofClassAcommonstockand15,559,383sharesofClassBcommonstockoutstandingatJune15,2016.In
computingthenumberofsharesofstockbeneficiallyownedbyapersonandthepercentageownershipofthatperson,wedeemedoutstandingsharessubjecttooptionsheldbythatpersonthat
arecurrentlyexercisableorexercisablewithin60daysofJune15,2016,andsharesissuableuponthevestingofrestrictedstockunitswithin60daysofJune15,2016.However,wedidnot
deemthesesharestobeoutstandingforthepurposeofcomputingthepercentageownershipofanyotherperson.
Class
A
common
stock
Name
of
Beneficial
Owner
5%
Stockholders:
ReidHoffmanandMichelleYee,TrusteesoftheReidHoffmanandMichelleYee
LivingTrustdatedOctober27,2009(1)
T.RowePriceAssociates,Inc.(2)
PrudentialFinancial,Inc.(3)
SandsCapitalManagementInc.(4)
JennisonAssociatesLLC(5)
CapitalWorldInvestors(6)
Named
Executive
Officers
and
Directors:
JeffreyWeiner(7)
StevenSordello(8)
MichaelCallahan(9)
MichaelGamson(10)
J.KevinScott(11)
A.GeorgeSkipBattle(12)
ReidHoffman(13)
LeslieKilgore(14)
StanleyMeresman(15)
MichaelMoritz(16)
DavidSze(17)
Allexecutiveofficersanddirectorsasagroup(12persons)(18)
Shares
Shares
9,410,966
6,847,019
6,604,158
6,561,011
4,513,883
7.9
5.7
5.5
5.5
3.8
14,678,356
93.2
53.1
3.4
2.5
2.4
2.4
1.6
427,325
99,022
23,917
33,131
34,489
16,858
9,042
7,012
671,620
30,908
1,361,674
*
*
*
*
*
*
*
*
*
*
1.1
480,120
129,095
107,667
5,554
14,678,356
37,500
3,032
15,441,324
3.0
0.8
0.7
*
93.2
*
*
95.1
1.9
*
*
*
*
*
53.1
*
*
*
*
55.3
OptionstopurchaseClassBcommonstockincludedinthistablemaybeearlyexercisable,andtotheextentsuchsharesofClassBcommonstockareunvestedasofagivendate,such
ClassBcommonstockwillremainsubjecttoarightofrepurchaseheldbyus.TheClassBcommonstockisconvertibleatanytimebytheholderintosharesofClassAcommonstock
onashare-for-sharebasis,suchthateachholderofClassBcommonstockbeneficiallyownsanequivalentnumberofClassAcommonstock.
PercentagetotalvotingpowerrepresentsvotingpowerwithrespecttoallsharesofourClassAandClassBcommonstock,asasingleclass.EachholderofClassBcommonstockshall
beentitledto10votespershareofClassBcommonstockandeachholderofClassAcommonstockshallbeentitledtoonevotepershareofClassAcommonstockonallmatters
submittedtoourstockholdersforavote.TheClassAcommonstockandClassBcommonstockvotetogetherasasingleclassonallmatterssubmittedtoavoteofourstockholders,
exceptasmayotherwiseberequiredbylaw.
Representsbeneficialownershipoflessthan1%.
%
of
Total
Voting
Power#
Class
B
common
stock
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(1) Mr.Hoffmansownershipconsistsof14,489,899sharesofClassBcommonstockownedbytheReidHoffmanandMichelleYeeLivingTrustdatedOctober27,2009(Hoffman
Trust).ReidHoffmanretainssolevotinganddispositivepowerovertheseshares.Hisownershipalsoincludes188,457sharesofClassBcommonstockissuablepursuanttofullyvestedstockoptionsexercisablewithin60daysofJune15,2016thatareheldbytheWeiner2012IrrevocableTrust,ofwhichMr.HoffmanistheTrustee.InAugust2014,options
exercisableforsharesofClassBcommonstockweretransferredfromthebeneficialownershipofJeffreyWeiner,ourCEO,totheWeiner2012IrrevocableTrust.Mr.Weinerhasno
pecuniary,dispositiveorvotingcontroloftheoptionsorunderlyingshares.Mr.HoffmanhassolevotinganddispositivepoweroverthesharesheldintheWeiner2012IrrevocableTrust,
buthehasnopecuniaryinterestthereinanddisclaimsbeneficialownershipoftheseshares.TheaddressforMr.Hoffmanis2029StierlinCourt,MountainView,CA94043.
(2) AccordingtoaSchedule13(G)/AfiledFebruary11,2016,the9,410,966ClassAcommonstocksharesreportedbyT.RowePriceAssociates,Inc.(TRP)areowned,ormaybe
deemedtobebeneficiallyowned,byTRP,aninvestmentadviser,whichholdssolevotingpowerof3,355,904ClassAcommonstocksharesandsoledispositivepowerof9,410,966
ClassAcommonstockshares.TheaddressforTRPis100E.PrattStreet,Baltimore,MD21202.
(3) AccordingtoaSchedule13(G)/AfiledJanuary28,2016,the6,847,019ClassAcommonstocksharesreportedbyPrudentialFinancial,Inc.(Prudential)areowned,ormaybedeemed
tobebeneficiallyowned,byPrudential,theparentholdingcompany,whichholdssolevotinganddispositivepowerof538,613ClassAcommonstockshares,sharevotingpowerof
3,638,040ClassAcommonstockshares,andshareddispositivepowerof6,308,406ClassAcommonstockshares.The6,847,019ClassAcommonstocksharesreportedareowned,
directlyorindirectly,byPrudentialoritsinvestmentadvisors,ThePrudentialInsuranceCompanyofAmerica,PrudentialRetirementInsuranceandAnnuityCompany,Jennison
AssociatesLLC,PGIM,Inc.,orQuantitativeManagementAssociatesLLC.Theaddressfortheseentitiesis751BroadStreet,Newark,NJ07102-3777.
(4) AccordingtoaSchedule13(G)filedFebruary16,2016,the6,604,158ClassAcommonstocksharesreportedbySandsCapitalManagement,LLC(Sands)areowned,ormaybe
deemedtobebeneficiallyowned,bySands,aninvestmentadviser,whichholdssolevotingpowerof4,736,497ClassAcommonstocksharesandsoledispositivepowerof6,604,158
ClassAcommonstockshares.TheaddressforSandsis1101WilsonBlvd.,Suite2300,Arlington,VA22209.
(5) AccordingtoaSchedule13(G)/AfiledFebruary4,2016,the6,561,011ClassAcommonstocksharesreportedbyJennisonAssociatesLLC(Jennison),areheldasaresultof
Jennisonsroleasaninvestmentadviserofseveralmanagedportfolios.JennisonmaybedeemedtobethebeneficialowneroftheClassAcommonstock.Jennisonhassolevoting
powerof3,890,645ClassAcommonstocksharesandshareddispositivepowerof6,561,011ClassAcommonstockshares.TheaddressforJennisonis466LexingtonAvenue,New
York,NY10017
(6) AccordingtoaSchedule13(G)filedFebruary12,2016,the4,513,883ClassAcommonstocksharesreportedbyCapitalWorldInvestors(Capital)areowned,ormaybedeemedtobe
beneficiallyowned,byCapital,aninvestmentadviser,whichholdssolevotingpoweranddispositivepowerof4,513,883ClassAcommonstockshares.TheaddressforCapitalis333
SouthHopeStreet,LosAngeles,CA90071.
(7) Mr.Weinersownershipconsistsof(i)112,211sharesofClassAcommonstockheldofrecordbytheWeiner/DerouauxRevocableTrust,datedNovember20,2012forwhich
Mr.Weinerservesasthetrustee(Weiner/DerouauxTrust);(ii)315,114sharesofClassAcommonstockissuablepursuanttostockoptionsexercisablewithin60daysofJune15,2016;
and(iii)480,120sharesofClassBcommonstockissuablepursuanttostockoptionsexercisablewithin60daysofJune15,2016.Hisownershipdoesnotinclude188,457sharesof
ClassBcommonstockissuablepursuanttofully-vestedstockoptionsexercisablewithin60daysofJune15,2016thatareheldbytheWeiner2012IrrevocableTrust,ofwhichReid
Hoffman,ourBoardChair,isthetrustee.InAugust2014,optionsexercisableforsharesofClassBcommonstockweretransferredfromthebeneficialownershipofMr.Weinertothe
Weiner2012IrrevocableTrust.Mr.Weinerhasnopecuniary,dispositiveorvotingcontroloftheoptionsorunderlyingshares.Mr.Hoffmanhassolevotinganddispositivepowerover
thesharesheldintheWeiner2012IrrevocableTrust,buthehasnopecuniaryinteresttherein.
(8) Mr.Sordellosownershipconsistsof(i)43,766sharesofClassAcommonstockheldofrecordbyStevenSordello&SusanSordelloTrustdatedSeptember19,2003forwhich
Mr.Sordelloservesasthetrustee(SordelloTrust);(ii)55,256sharesofClassAcommonstockissuablepursuanttostockoptionsexercisablewithin60daysofJune15,2016;and
(iii)129,095sharesofClassBcommonstock,heldofrecordbytheSordelloTrust.
(9) Mr.Callahansownershipconsistsof(i)8,143sharesofClassAcommonstock;and(ii)15,774sharesofClassAcommonstockissuablepursuanttostockoptionsexercisablewithin60
daysofJune15,2016.
(10) Mr.Gamsonsownershipconsistsof(i)5,314sharesofClassAcommonstock;(ii)27,817sharesofClassAcommonstockissuablepursuanttostockoptionsexercisablewithin60days
ofJune15,2016;(iii)106,668sharesofClassBcommonstock;and(iv)999sharesofClassBcommonstockissuablepursuanttostockoptionsexercisablewithin60daysofJune15,
2016.
(11) AsrequiredunderapplicableSECdisclosurerules,Mr.ScottisincludedinthistableasaNamedExecutiveOfficerfor2015onthebasisofhis2015compensation,butwasnotan
executiveofficerthroughtheendof2015.WhileMr.ScottisnolongerconsideredanexecutiveofficerasofDecember3,2015,heremainsemployedbyLinkedInandisstillamember
ofourexecutiveteam.Mr.Scottsownershipconsistsof(i)4,709sharesofClassAcommonstock;and(ii)29,780sharesofClassAcommonstockissuablepursuanttostockoptions
exercisablewithin60daysofJune15,2016.
(12) Mr.Battlesownershipconsistsof(i)12,783sharesofClassAcommonstock;(ii)4,075sharesofClassAcommonstockissuablepursuanttostockoptionsexercisablewithin60days
ofJune15,2016;and(iii)5,554sharesofClassBcommonstock.
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(13) Mr.HoffmansownershipisthroughtheHoffmanTrust,describedabove.
(14) Ms.Kilgoresownershipconsistsof(i)3,852sharesofClassAcommonstock;(ii)5,190sharesofClassAcommonstockissuablepursuanttostockoptionsexercisablewithin60days
ofJune15,2016;and(iii)37,500sharesofClassBcommonstock.
(15) Mr.Meresmansownershipconsistsof(i)1,822sharesofClassAcommonstockheldofrecordbyStanleyJ.MeresmanandSharonA.Meresman,TrusteesoftheMeresmanFamily
TrustUDTdatedSeptember13,1989(MeresmanTrust);(ii)5,190sharesofClassAcommonstockissuablepursuanttostockoptionsexercisablewithin60daysofJune15,2016;
and(iii)3,032sharesofClassBcommonstockheldofrecordbytheMeresmanTrust.
(16) Mr.Moritzownershipconsistsof671,620sharesofClassAcommonstockheldofrecordbyTheMaximusTrustdatedMarch19,1996forwhichMr.Moritzservesasatrustee.
(17) Mr.Szesownershipconsistsof30,908sharesofClassAcommonstock.
(18) Consistsof(i)895,982sharesofClassAcommonstockbeneficiallyownedbythecurrentdirectorsandexecutiveofficers;(ii)465,692sharesofClassAcommonstockissuable
pursuanttostockoptionsexercisablewithin60daysofJune15,2016;(iii)14,771,748sharesofClassBcommonstock;and(iv)669,576sharesofClassBcommonstockissuable
pursuanttostockoptionsexercisablewithin60daysofJune15,2016.
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FUTURE
STOCKHOLDER
PROPOSALS
Ifthemergeriscompleted,wewillhavenopublicstockholdersandtherewillbenopublicparticipationinanyfuturemeetingsofstockholdersofLinkedIn.However,ifthemergeris
notcompleted,stockholderswillcontinuetobeentitledtoattendandparticipateinstockholdermeetings.
LinkedInwillholdanannualmeetingofstockholdersin2017onlyifthemergerhasnotalreadybeencompleted.
InaccordancewithRule14a-8undertheExchangeAct,andasprovidedinSection2.4ofourbylaws,anystockholderwhointendstosubmitaproposalatourannualmeetingin2017,
ifheld,andwhowishestohavetheproposalconsideredforinclusionintheproxystatementforthatmeetingmust,inadditiontocomplyingwithRule14a-8undertheExchangeActandall
otherapplicablelawsandregulationsgoverningsubmissionofsuchproposals,deliverthenoticeoftheproposaltousforconsiderationbyDecember27,2016.
PursuanttoSection2.4ofourbylaws,ifastockholderintendstosubmitaproposalordirectornominationforconsiderationatourannualmeetingin2017,ifheld,thatisnotintended
tobeincludedintheproxystatementforthatmeeting,thestockholdermustgivenoticeinaccordancewiththerequirementssetforthinourbylawsnolaterthanthe45thdayandnoearlierthan
the75thdaypriortotheoneyearanniversaryofthemailingoftheproxystatementforthepreviousyearsannualmeetingofstockholders,ornotearlierthanFebruary10,2017andnotlater
thanMarch12,2017.Ifthedateofourannualmeetingofstockholdersin2017ismorethan30daysbeforeormorethan60daysaftersuchanniversarydate,noticebythestockholdermustbe
receivednoearlierthan120dayspriortoourannualmeetingofstockholdersin2017andnolaterthanthelaterof(1)the90thdaypriortothedateofourannualmeetingofstockholdersin
2017or(2)the10thdayfollowingthedateonwhichpublicannouncementofthedateofourannualmeetingofstockholdersin2017isfirstmadebyLinkedIn.Suchnoticeshouldbesenttous,
careofourCorporateSecretary,atLinkedInCorporation,2029StierlinCourt,MountainView,CA94043.Inaddition,ourbylawsrequirethatcertaininformationandacknowledgmentswith
respecttotheproposalorthenomineeandthestockholdermakingtheproposalornominationbesetforthinthenotice.OurbylawshavebeenpubliclyfiledwiththeSECandcanalsobefound
intheCorporateGovernancesectionofourInvestorRelationswebpagebyvisitinginvestors.linkedin.com
andclickingCorporate
Governance
(https://investors.linkedin.com/results-andfinancials/corporate-governance/default.aspx).
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WHERE
YOU
CAN
FIND
MORE
INFORMATION
Youmayreadandcopyanyreports,statementsorotherinformationthatwefilewiththeSECatitspublicreferenceroomatthefollowinglocation:100FStreet,N.E.,Room1580,
Washington,DC20549.YoumayalsoobtaincopiesofthosedocumentsatprescribedratesbywritingtothePublicReferenceSectionoftheSECatthataddress.PleasecalltheSECat(800)
SEC-0330forfurtherinformationonthepublicreferenceroom.TheseSECfilingsarealsoavailabletothepublicfromcommercialdocumentretrievalservicesandatwww.sec.gov
.
YoumayobtainanyofthedocumentswefilewiththeSEC,withoutcharge,byrequestingtheminwritingorbytelephonefromusatthefollowingaddress:
LinkedInCorporation
Attention:CorporateSecretary
2029StierlinCourt
Ifyouwouldliketorequestdocumentsfromus,pleasedosoassoonaspossibletoreceivethembeforethespecialmeeting.Ifyourequestanydocumentsfromus,wewillmailthem
toyoubyfirstclassmail,oranotherequallypromptmethod.PleasenotethatallofourdocumentsthatwefilewiththeSECarealsopromptlyavailablethroughtheInvestorRelationssection
ofourwebsite,www.linkedin.com
.Theinformationincludedonourwebsiteisnotincorporatedbyreferenceintothisproxystatement.
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Ifyouhaveanyquestionsconcerningthemerger,thespecialmeetingortheaccompanyingproxystatement,wouldlikeadditionalcopiesoftheaccompanyingproxystatementorneed
helpvotingyoursharesofcommonstock,pleasecontactourproxysolicitor:
NewYork,NY10022
or
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MISCELLANEOUS
YOUSHOULDRELYONLYONTHEINFORMATIONCONTAINEDINTHISPROXYSTATEMENT,THEANNEXESTOTHISPROXYSTATEMENTANDTHE
DOCUMENTSTHATWEINCORPORATEBYREFERENCEINTHISPROXYSTATEMENTINVOTINGONTHEADOPTIONOFTHEMERGERAGREEMENT.WEHAVENOT
AUTHORIZEDANYONETOPROVIDEYOUWITHINFORMATIONTHATISDIFFERENTFROMWHATISCONTAINEDINTHISPROXYSTATEMENT.THISPROXY
STATEMENTISDATED[
],2016.YOUSHOULDNOTASSUMETHATTHEINFORMATIONCONTAINEDINTHISPROXYSTATEMENTISACCURATEASOFANYDATE
OTHERTHANTHATDATE(ORASOFANEARLIERDATEIFSOINDICATEDINTHISPROXYSTATEMENT),ANDTHEMAILINGOFTHISPROXYSTATEMENTTO
STOCKHOLDERSDOESNOTCREATEANYIMPLICATIONTOTHECONTRARY.THISPROXYSTATEMENTDOESNOTCONSTITUTEASOLICITATIONOFAPROXYIN
ANYJURISDICTIONWHERE,ORTOORFROMANYPERSONTOWHOM,ITISUNLAWFULTOMAKEAPROXYSOLICITATION.
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AnnexA
AGREEMENT
AND
PLAN
OF
MERGER
by
and
among
MICROSOFT
CORPORATION,
LIBERTY
MERGER
SUB
INC.
and
LINKEDIN
CORPORATION
Dated
as
of
June
11,
2016
TableofContents
TABLE
OF
CONTENTS
ArticleIDEFINITIONS&INTERPRETATIONS
1.1
CertainDefinitions
1.2
AdditionalDefinitions
1.3
CertainInterpretations
1.4
DisclosureLetters
ArticleIITHEMERGER
2.1
TheMerger
2.2
TheEffectiveTime
2.3
TheClosing
2.4
EffectoftheMerger
2.5
CertificateofIncorporationandBylaws
2.6
DirectorsandOfficers
2.7
EffectonCapitalStock
2.8
EquityAwards
2.9
SurrenderofShares
2.10
NoFurtherOwnershipRightsinCompanyCommonStock
2.11
Lost,StolenorDestroyedCertificates
2.12
RequiredWithholding
2.13
NecessaryFurtherActions
2.14
AdjustmenttoMergerConsideration
ArticleIIIREPRESENTATIONSANDWARRANTIESOFTHECOMPANY
3.1
Organization;GoodStanding
3.2
CorporatePower;Enforceability
3.3
CompanyBoardApproval;FairnessOpinion;Anti-TakeoverLaws
3.4
RequisiteStockholderApproval
3.5
Non-Contravention
3.6
RequisiteGovernmentalApprovals
3.7
CompanyCapitalization
3.8
Subsidiaries
3.9
CompanySECReports
3.10
CompanyFinancialStatements;InternalControls;Indebtedness
3.11
NoUndisclosedLiabilities
3.12
AbsenceofCertainChanges
3.13
MaterialContracts
3.14
RealProperty
3.15
EnvironmentalMatters
3.16
IntellectualProperty
3.17
TaxMatters
3.18
EmployeePlans
3.19
LaborandEmploymentMatters
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TABLE
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(Continued)
3.20
Permits
3.21
CompliancewithLaws
3.22
LegalProceedings;Orders
3.23
Insurance
3.24
RelatedPersonTransactions
3.25
Brokers
3.26
ExclusivityofRepresentationsandWarranties
ArticleIVREPRESENTATIONSANDWARRANTIESOFPARENTANDMERGERSUB
4.1
Organization;GoodStanding
4.2
CorporatePower;Enforceability
4.3
Non-Contravention
4.4
RequisiteGovernmentalApprovals
4.5
LegalProceedings;Orders
4.6
OwnershipofCompanyCapitalStock
4.7
Brokers
4.8
SufficientFunds
4.9
ExclusivityofRepresentationsandWarranties
ArticleVINTERIMOPERATIONSOFTHECOMPANY
5.1
AffirmativeObligations
5.2
ForbearanceCovenants
5.3
NoSolicitation
5.4
NoControloftheCompanysBusiness
ArticleVIADDITIONALCOVENANTS
6.1
RequiredActionandForbearance;Efforts
6.2
AntitrustFilings
6.3
ProxyStatementandOtherRequiredSECFilings
6.4
CompanyStockholderMeeting
6.5
Anti-TakeoverLaws
6.6
Access
6.7
Section16(b)Exemption
6.8
DirectorsandOfficersExculpation,IndemnificationandInsurance
6.9
EmployeeMatters
6.10
ObligationsofMergerSub
6.11
NotificationofCertainMatters
6.12
PublicStatementsandDisclosure
6.13
TransactionLitigation
6.14
StockExchangeDelisting;Deregistration
6.15
AdditionalAgreements
6.16
ConvertibleNotes;CallOptionsandWarrants
6.17
ParentVote
Page
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CONTENTS
(Continued)
ArticleVIICONDITIONSTOTHEMERGER
7.1
ConditionstoEachPartysObligationstoEffecttheMerger
7.2
ConditionstotheObligationsofParentandMergerSub
7.3
ConditionstotheCompanysObligationstoEffecttheMerger
ArticleVIIITERMINATION,AMENDMENTANDWAIVER
8.1
Termination
8.2
MannerandNoticeofTermination;EffectofTermination
8.3
FeesandExpenses
8.4
Amendment
8.5
Extension;Waiver
ArticleIXGENERALPROVISIONS
9.1
SurvivalofRepresentations,WarrantiesandCovenants
9.2
Notices
9.3
Assignment
9.4
Confidentiality
9.5
EntireAgreement
9.6
ThirdPartyBeneficiaries
9.7
Severability
9.8
Remedies
9.9
GoverningLaw
9.10
ConsenttoJurisdiction
9.11
WAIVEROFJURYTRIAL
9.12
Counterparts
9.13
NoLimitation
ExhibitASeventhAmendedandRestatedCertificateofIncorporationoftheSurvivingCorporation
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AGREEMENT
AND
PLAN
OF
MERGER
THISAGREEMENTANDPLANOFMERGER(thisAgreement
)ismadeandenteredintoasofJune11,2016,byandamongMicrosoftCorporation,aWashingtoncorporation
(Parent
),LibertyMergerSubInc.,aDelawarecorporationandawhollyownedsubsidiaryofParent(Merger
Sub
),andLinkedInCorporation,aDelawarecorporation(theCompany
).EachofParent,MergerSubandtheCompanyaresometimesreferredtoasaParty
.AllcapitalizedtermsthatareusedinthisAgreementhavethemeaningsgiventotheminArticleI.
RECITALS
A.
TheCompanyBoardhas(i)determinedthatitisinthebestinterestsoftheCompanyanditsstockholders,anddeclareditadvisable,toenterintothisAgreementproviding
forthemergerofMergerSubwithandintotheCompany(collectivelywiththeothertransactionscontemplatedbythisAgreement,theMerger
)inaccordancewiththeGeneralCorporation
LawoftheStateofDelaware(theDGCL
)uponthetermsandsubjecttotheconditionssetforthherein;(ii)approvedtheexecutionanddeliveryofthisAgreementbytheCompany,the
performancebytheCompanyofitscovenantsandotherobligationshereunder,andtheconsummationoftheMergeruponthetermsandsubjecttotheconditionssetforthherein;(iii)directed
thattheadoptionofthisAgreementbesubmittedtoavoteatameetingofthestockholdersoftheCompany;and(iv)resolvedtorecommendthatthestockholdersoftheCompanyvoteinfavor
oftheadoptionofthisAgreementinaccordancewiththeDGCL.
B.
TheboardsofdirectorsofeachofParentandMergerSubhave(i)declareditadvisabletoenterintothisAgreement;and(ii)approvedtheexecutionanddeliveryofthis
Agreement,theperformanceoftheirrespectivecovenantsandotherobligationshereunder,andtheconsummationoftheMergeruponthetermsandsubjecttotheconditionssetforthherein.
AGREEMENT
NOW,THEREFORE,inconsiderationoftheforegoingpremisesandtherepresentations,warranties,covenantsandagreementssetforthherein,aswellasothergoodandvaluable
consideration,thereceiptandsufficiencyofwhichareherebyacknowledgedandaccepted,andintendingtobelegallyboundhereby,Parent,MergerSubandtheCompanyagreeasfollows:
ARTICLE
I
DEFINITIONS
&
INTERPRETATIONS
1.1
Certain
Definitions
.ForallpurposesofandpursuanttothisAgreement,thefollowingcapitalizedtermshavethefollowingrespectivemeanings:
(a)
Acceptable
Confidentiality
Agreement
meansacustomaryconfidentialityagreementcontainingprovisionsthatrequireanycounterpartythereto(andanyofits
Affiliatesandrepresentativesnamedtherein)thatreceivesmaterialnon-publicinformationoforwithrespecttotheCompanytokeepsuchinformationconfidential(itbeingunderstoodthat
suchagreementneednotcontainprovisionsthatwouldprohibitthemakingofanyAcquisitionProposal)andwithotherterms
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thatarenolessrestrictiveintheaggregatetosuchcounterparty(andanyofitsAffiliatesandrepresentativesnamedtherein)thanthetermsoftheConfidentialityAgreement.
(b)
Acquisition
Proposal
meansanyofferorproposal(otherthananofferorproposalbyParentorMergerSub)relatingtoanAcquisitionTransaction.
(c)
Acquisition
Transaction
meansanytransactionorseriesofrelatedtransactions(otherthantheMerger)involving:
(i) anydirectorindirectpurchaseorotheracquisitionbyanyPersonorgroup(asdefinedpursuanttoSection13(d)oftheExchangeAct)ofPersons,whether
fromtheCompanyoranyotherPerson(s),ofsecuritiesrepresentingmorethan15%ofthetotaloutstandingvotingpoweroftheCompanyaftergivingeffecttotheconsummationofsuch
purchaseorotheracquisition,includingpursuanttoatenderofferorexchangeofferbyanyPersonorgroupofPersonsthat,ifconsummatedinaccordancewithitsterms,wouldresultinsuch
PersonorgroupofPersonsbeneficiallyowningmorethan15%ofthetotaloutstandingvotingpoweroftheCompanyaftergivingeffecttotheconsummationofsuchtenderorexchange
offer;
(ii) anydirectorindirectpurchase(includingbywayofamerger,consolidation,businesscombination,recapitalization,reorganization,liquidation,dissolutionor
othertransaction),licenseorotheracquisitionbyanyPersonorgroup(asdefinedpursuanttoSection13(d)oftheExchangeAct)ofPersonsofassets(includingequitysecuritiesofany
SubsidiaryoftheCompany)constitutingoraccountingformorethan15%oftherevenue,netincomeorconsolidatedassetsoftheCompanyanditsSubsidiaries,takenasawhole;or
(iii) anymerger,consolidation,businesscombination,recapitalization,reorganization,liquidation,dissolutionorothertransactioninvolvingtheCompany(oranyof
itsSubsidiarieswhosebusinessaccountsformorethan15%oftherevenue,netincomeorconsolidatedassetsoftheCompany,anditsSubsidiaries,takenasawhole)inwhichthestockholders
oftheCompany(orsuchSubsidiary)priortosuchtransactionwillnotownatleast85%,directlyorindirectly,ofthesurvivingcompany.
(d)
Affiliate
means,withrespecttoanyPerson,anyotherPersonthat,directlyorindirectly,controls,iscontrolledbyorisundercommoncontrolwithsuchPerson.
Forpurposesofthisdefinition,thetermcontrol(including,withcorrelativemeanings,thetermscontrolling,controlledbyandundercommoncontrolwith),asusedwithrespecttoany
Person,meansthepossession,directlyorindirectly,ofthepowertodirectorcausethedirectionofthemanagementandpoliciesofthatPerson,whetherthroughtheownershipofvoting
securities,bycontractorotherwise.
(e)
Antitrust
Law
meanstheShermanAntitrustActof1890,theClaytonAntitrustActof1914,theHSRAct,theFederalTradeCommissionActof1914andall
otherLawsthataredesignedorintendedtoprohibit,restrictorregulateactionshavingthepurposeoreffectofmonopolizationorrestraintoftradeorsignificantimpedimentsorlesseningof
competitionorthecreationorstrengtheningofadominantpositionthroughmergeroracquisition,inanycasethatareapplicabletotheMerger.
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(f)
Audited
Company
Balance
Sheet
meanstheconsolidatedbalancesheet(andthenotesthereto)oftheCompanyanditsconsolidatedSubsidiariesasof
December31,2015,setforthintheCompanysAnnualReportonForm10-KfiledbytheCompanywiththeSECforthefiscalyearendedDecember31,2015.
(g)
Business
Day
meanseachdaythatisnotaSaturday,SundayorotherdayonwhichtheFederalReserveBankofSanFranciscoisclosed.
(h)
Call
Options
meansthecalloptiontransactionsevidencedby:
(i) (A)theletteragreementre:BaseCallOptionTransactions,datedasofNovember5,2014,betweentheCompanyandCitibank,N.A.,togetherwiththesideletter
agreementre:BaseCallOptionTransaction,datedasofNovember5,2014,betweentheCompanyandCitibank,N.A.;and(B)theletteragreementre:AdditionalCallOptionTransaction,
datedasofNovember6,2014,betweentheCompanyandCitibank,N.A.,togetherwiththesideletteragreementre:AdditionalCallOptionTransaction,datedasofNovember6,2014,between
theCompanyandCitibank,N.A.;
(ii) (A)theletteragreementre:BaseCallOptionTransactions,datedasofNovember5,2014,betweentheCompanyandJPMorganChaseBank,National
Association,LondonBranch,togetherwiththesideletteragreementre:BaseCallOptionTransaction,datedasofNovember5,2014,betweentheCompanyandJPMorganChaseBank,
NationalAssociation,LondonBranch;and(B)theletteragreementre:AdditionalCallOptionTransaction,datedasofNovember6,2014,betweentheCompanyandJPMorganChaseBank,
NationalAssociation,LondonBranch,togetherwiththesideletteragreementre:AdditionalCallOptionTransaction,datedasofNovember6,2014,betweentheCompanyandJPMorgan
ChaseBank,NationalAssociation,LondonBranch;and
(iii) (A)theletteragreementre:BaseCallOptionTransactions,datedasofNovember5,2014,betweentheCompanyandBankofAmerica,N.A.,togetherwiththe
sideletteragreementre:BaseCallOptionTransaction,datedasofNovember5,2014,betweentheCompanyandBankofAmerica,N.A.;and(B)theletteragreementre:AdditionalCall
OptionTransaction,datedasofNovember6,2014,betweentheCompanyandBankofAmerica,N.A.,togetherwiththesideletteragreementre:AdditionalCallOptionTransaction,datedasof
November6,2014,betweentheCompanyandBankofAmerica,N.A.;whereeachsuchtransactionshallbeaCallOption.
(i)
Chosen
Courts
meanstheCourtofChanceryoftheStateofDelawareor,totheextentthattheCourtofChanceryoftheStateofDelawaredoesnothavesubject
matterjurisdiction,anystateorfederalcourtintheStateofDelaware.
(j)
Code
meanstheInternalRevenueCodeof1986.
(k)
Company
Board
meanstheBoardofDirectorsoftheCompany.
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(l)
Company
Capital
Stock
meanstheCompanyCommonStock,theCommonStockandtheCompanyPreferredStock.
(m)
Company
Class
A
Common
Stock
meanstheClassAcommonstock,parvalue$0.0001pershare,oftheCompany.
(n)
Company
Class
B
Common
Stock
meanstheClassBcommonstock,parvalue$0.0001pershare,oftheCompany.
(o)
Company
Common
Stock
means,together,theCompanyClassACommonStockandtheCompanyClassBCommonStock.
(p)
Company
Intellectual
Property
meansanyIntellectualPropertythatisownedorpurportedtobeownedbytheCompanyoranyofitsSubsidiaries.
(q)
Company
Material
Adverse
Effect
meansanychange,event,violation,inaccuracy,effectorcircumstance(each,anEffect
)that,individuallyortaken
togetherwithallotherEffectsthatexistorhaveoccurredpriortothedateofdeterminationoftheoccurrenceoftheCompanyMaterialAdverseEffect,hashadorwouldreasonablybeexpected
tohaveamaterialadverseeffectonthebusiness,assets,liabilities,financialconditionorresultsofoperationsoftheCompanyanditsSubsidiaries,takenasawhole.Noneofthefollowing(by
itselforwhenaggregated)totheextentoccurringafterthedateofthisAgreementwillbedeemedtobeorconstituteaCompanyMaterialAdverseEffectorwillbetakenintoaccountwhen
determiningwhetheraCompanyMaterialAdverseEffecthasoccurredormay,wouldorcouldoccur:
(i) changesingeneraleconomicconditionsintheUnitedStatesoranyothercountryorregionintheworld,orchangesinconditionsintheglobaleconomy
generally(excepttotheextentthatsuchEffecthashadadisproportionateadverseeffectontheCompanyrelativetoothercompaniesoperatingintheindustriesinwhichtheCompanyandits
Subsidiariesconductbusiness,inwhichcaseonlytheincrementaldisproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaCompanyMaterial
AdverseEffect);
(ii) changesinconditionsinthefinancialmarkets,creditmarketsorcapitalmarketsintheUnitedStatesoranyothercountryorregionintheworld,including
(A)changesininterestratesorcreditratingsintheUnitedStatesoranyothercountry;(B)changesinexchangeratesforthecurrenciesofanycountry;or(C)anysuspensionoftradingin
securities(whetherequity,debt,derivativeorhybridsecurities)generallyonanysecuritiesexchangeorover-the-countermarketoperatingintheUnitedStatesoranyothercountryorregionin
theworld(except,ineachcase,totheextentthatsuchEffecthashadadisproportionateadverseeffectontheCompanyrelativetoothercompaniesoperatingintheindustriesinwhichthe
CompanyanditsSubsidiariesconductbusiness,inwhichcaseonlytheincrementaldisproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurreda
CompanyMaterialAdverseEffect);
(iii) generalchangesinconditionsintheindustriesinwhichtheCompanyanditsSubsidiariesconductbusiness(excepttotheextentthatsuchEffecthashada
disproportionate
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adverseeffectontheCompanyrelativetoothercompaniesoperatingintheindustriesinwhichtheCompanyanditsSubsidiariesconductbusiness,inwhichcaseonlytheincremental
disproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaCompanyMaterialAdverseEffect);
(iv) changesinregulatory,legislativeorpoliticalconditionsintheUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchEffecthas
hadadisproportionateadverseeffectontheCompanyrelativetoothercompaniesoperatingintheindustriesinwhichtheCompanyanditsSubsidiariesconductbusiness,inwhichcaseonlythe
incrementaldisproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaCompanyMaterialAdverseEffect);
(v) anygeopoliticalconditions,outbreakofhostilities,actsofwar,sabotage,terrorismormilitaryactions(includinganyescalationorgeneralworseningofanysuch
hostilities,actsofwar,sabotage,terrorismormilitaryactions)intheUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchEffecthashadadisproportionate
adverseeffectontheCompanyrelativetoothercompaniesoperatingintheindustriesinwhichtheCompanyanditsSubsidiariesconductbusiness,inwhichcaseonlytheincremental
disproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaCompanyMaterialAdverseEffect);
(vi) earthquakes,hurricanes,tsunamis,tornadoes,floods,mudslides,wildfiresorothernaturaldisasters,weatherconditionsandothersimilarforcemajeureeventsin
theUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchEffecthashadadisproportionateadverseeffectontheCompanyrelativetoothercompanies
operatingintheindustriesinwhichtheCompanyanditsSubsidiariesconductbusiness,inwhichcaseonlytheincrementaldisproportionateadverseimpactmaybetakenintoaccountin
determiningwhethertherehasoccurredaCompanyMaterialAdverseEffect);
(vii) thepublicannouncementorpendencyofthisAgreementortheMerger,itbeingunderstoodthattheexceptionsinthisclause(vii)willnotapplywithrespectto
referencestoCompanyMaterialAdverseEffectoftherepresentationsandwarrantiescontainedinSection3.5(andinSection7.2(a)andSection8.1(e)totheextentrelatedtosuchportionsof
suchrepresentationsandwarranties);
(viii)anyactiontakenorrefrainedfrombeingtaken,ineachcasetowhichParenthasexpresslyapproved,consentedtoorrequestedinwritingfollowingthedateof
thisAgreement;
(ix) changesorproposedchangesinGAAPorotheraccountingstandardsorLaw(ortheenforcementorinterpretationofanyoftheforegoing);
(x) changesinthepriceortradingvolumeoftheCompanyCommonStockorCompanyIndebtedness,inandofitself(itbeingunderstoodthatanycauseofsuch
changemaybe
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deemedtoconstitute,inandofitself,aCompanyMaterialAdverseEffectandmaybetakenintoconsiderationwhendeterminingwhetheraCompanyMaterialAdverseEffecthasoccurred);
(xi) anyfailure,inandofitself,bytheCompanyanditsSubsidiariestomeet(A)anypublicestimatesorexpectationsoftheCompanysrevenue,earningsorother
financialperformanceorresultsofoperationsforanyperiod;or(B)anyinternalbudgets,plans,projectionsorforecastsofitsrevenues,earningsorotherfinancialperformanceorresultsof
operations(itbeingunderstoodthatanycauseofanysuchfailuremaybedeemedtoconstitute,inandofitself,aCompanyMaterialAdverseEffectandmaybetakenintoconsiderationwhen
determiningwhetheraCompanyMaterialAdverseEffecthasoccurred);and
(xii) anyTransactionLitigation.
(r)
Company
Options
meansanyoutstandingoptionstopurchasesharesofCompanyCommonStockgrantedpursuanttoanyoftheCompanyStockPlans.
(s)
Company
Preferred
Stock
meansthepreferredstock,parvalue$0.0001pershare,oftheCompany.
(t)
Company
Registered
Intellectual
Property
meansalloftheRegisteredIntellectualPropertyownedby,orfiledinthenameof,theCompanyoranyofits
Subsidiaries.
(u)
Company
Stock
Plans
means(i)thecompensatoryequityplanssetforthinSection1.1(u)oftheCompanyDisclosureLetterand(ii)anyothercompensatory
equityplansorContractsoftheCompany,includingoptionplansorContractsassumedbytheCompanypursuanttoamerger,acquisitionorothersimilartransaction.
(v)
Company
Stock-Based
Award
meanseachoutstandingrightofanykind,contingentoraccrued,toreceiveorretainsharesofCompanyCommonStockor
receiveacashpaymentequaltoorbasedon,inwholeorinpart,thevalueofCompanyCommonStock,ineachcase,grantedpursuanttoanyoftheCompanyStockPlans(including
performanceshares,performance-basedunits,marketstockunits,restrictedstock,restrictedstockunits,phantomunits,deferredstockunitsanddividendequivalents),otherthanCompany
Options.
(w)
Company
Stockholders
meanstheholdersofsharesofCompanyCapitalStock.
(x)
Continuing
Employees
meanseachindividualwhoisanemployeeoftheCompanyoranyofitsSubsidiariesimmediatelypriortotheEffectiveTimeand
continuestobeanemployeeofParentoroneofitsSubsidiaries(includingtheSurvivingCorporation)immediatelyfollowingtheEffectiveTime,butonlyforsolongassuchindividualisso
employed.
(y)
Contract
meansanywrittencontract,subcontract,note,bond,mortgage,indenture,lease,license,sublicenseorotherbindingagreement.
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(z)
Convertible
Notes
meansthe0.50%convertibleseniornotesdueNovember1,2019issuedpursuanttotheNotesIndenture.
(aa)
DOJ
meanstheUnitedStatesDepartmentofJusticeoranysuccessorthereto.
(bb)
Environmental
Law
meansanyLawrelatingtopollution,theprotectionoftheenvironment(includingambientair,surfacewater,groundwaterorland)or
exposureofanyPersonwithrespecttoHazardousSubstancesorotherwiserelatingtotheproduction,use,storage,treatment,transportation,recycling,disposal,discharge,releaseorother
handlingofanyHazardousSubstances,ortheinvestigation,clean-uporremediationthereof.
(cc)
ERISA
meanstheEmployeeRetirementIncomeSecurityActof1974.
(dd)
Exchange
Act
meanstheSecuritiesExchangeActof1934.
(ee)
FTC
meanstheUnitedStatesFederalTradeCommissionoranysuccessorthereto.
(ff)
GAAP
meansgenerallyacceptedaccountingprinciples,consistentlyapplied,intheUnitedStates.
(gg)
Governmental
Authority
meansanygovernment,governmentalorregulatory(includinganystockexchangeorotherself-regulatoryorganization)entityor
body,department,commission,board,agencyorinstrumentality,andanycourt,tribunal,arbitratororjudicialbody,ineachcasewhetherfederal,state,countyorprovincial,andwhetherlocal
orforeign.
(hh)
Hazardous
Substance
meansanysubstance,materialorwastethatischaracterizedorregulatedbyaGovernmentalAuthoritypursuanttoanyEnvironmental
Lawashazardous,pollutant,contaminant,toxicorradioactive,includingpetroleumandpetroleumproducts,polychlorinatedbiphenylsandfriableasbestos.
(ii)
HSR
Act
meanstheHart-Scott-RodinoAntitrustImprovementsActof1976.
(jj)
Indebtedness
meansanyofthefollowingliabilitiesorobligations:(i)indebtednessforborrowedmoney(includinganyprincipal,premium,accruedandunpaid
interest,relatedexpenses,prepaymentpenalties,commitmentandotherfees,saleorliquidityparticipationamounts,reimbursements,indemnitiesandallotheramountspayableinconnection
therewith);(ii)liabilitiesevidencedbybonds,debentures,notesorothersimilarinstrumentsordebtsecurities;(iii)liabilitiespursuanttoorinconnectionwithlettersofcreditorbankers
acceptancesorsimilaritems(ineachcasewhetherornotdrawn,contingentorotherwise);(iv)liabilitiesrelatedtothedeferredpurchasepriceofpropertyorservicesotherthanthosetrade
payablesincurredintheordinarycourseofbusiness;(v)liabilitiesarisingfromcash/bookoverdrafts;(vi)liabilitiespursuanttocapitalizedleases;(vii)liabilitiespursuanttoconditionalsaleor
othertitleretentionagreements;(viii)liabilitieswithrespecttovendoradvancesoranyotheradvances;(ix)liabilitiesarisingoutof
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interestrateandcurrencyswaparrangementsandanyotherarrangementsdesignedtoprovideprotectionagainstfluctuationsininterestorcurrencyrates;(x)deferredpurchasepriceliabilities
relatedtopastacquisitions;(xi)liabilitieswithrespecttodeferredcompensationforservices;(xii)liabilitiesorobligationsforseverance,changeofcontrolpayments,staybonuses,retention
bonuses,successbonusesandotherbonusesandsimilarliabilities;(xiii)liabilitiesarisinginconnectionwithearnoutsorothercontingentpaymentobligations;(xiv)liabilitiesundersale-andleasebacktransactions,agreementstorepurchasesecuritiessoldandothersimilarfinancingtransactions;(xv)liabilitiesarisingfromanybreachofanyoftheforegoing;and(xvi)indebtedness
ofthetypereferredtoinclauses(i)through(xv)ofothersguaranteedbytheCompanyoranyofitsSubsidiariesorsecuredbyanyLien.
(kk)
Intellectual
Property
meansthefollowingintangiblerights,U.S.andforeign:(i)allpatentsandapplicationstherefor;(Patents
);(ii)allcopyrights
(includingcopyrightsinsoftware,databasesandrelateditems),copyrightregistrationsandapplicationsthereforandallotherrightscorresponding(Copyrights
);(iii)trademarks,service
marks,tradenames,allregistrationsandapplicationstherefor,allgoodwillassociatedtherewith(includingsuchrightsindomainnames,socialandmobilemediaidentifiers)andallcommon
lawrightsrelatedthereto(Marks
);(iv)tradesecrets,know-how,inventions,methodsandprocesses;and(v)anysimilar,correspondingorequivalentrightstoanyoftheforegoinganywhere
intheworld.
(ll)
Intervening
Event
meansanypositivechange,effect,development,circumstance,condition,eventoroccurrencethat(i)asofthedateofthisAgreementwas
notknowntotheCompanyBoard,ortheconsequencesofwhich(basedonfactsknowntothemembersoftheCompanyBoardasofthedateofthisAgreement)werenotreasonablyforeseeable
asofthedateofthisAgreement;and(ii)doesnotrelatetoanAcquisitionProposal.
(mm) IRS
meanstheUnitedStatesInternalRevenueServiceoranysuccessorthereto.
(nn)
Knowledge
ofaPerson,withrespecttoanymatterinquestion,means(i)withrespecttotheCompany,theactualknowledgeoftheindividualssetforthon
Section1.1(nn)oftheCompanyDisclosureLetter;and(ii)withrespecttoParent,theactualknowledgeoftheindividualssetforthonSection1.1(nn)oftheParentDisclosureLetter,ineach
caseafterreasonableinquiryofthoseemployeeswhowouldreasonablybeexpectedtohaveactualknowledgeofthematterinquestion.WithrespecttomattersinvolvingIntellectualProperty
oftheCompany,KnowledgedoesnotrequiretheCompany,oranyofitsdirectors,officersoremployees,tohaveconductedorhaveobtainedanyfreedomtooperateopinionsofanyPatentor
anyMarkorotherIntellectualPropertyclearancesearches,andifnotconductedorobtained,noknowledgeofanyPatents,MarksorotherIntellectualPropertyofanythirdPersonthatwould
havebeenrevealedbysuchopinionsorsearcheswillbeimputedtotheCompanyoranyofitsdirectors,officersoremployees.
(oo)
Law
meansanyfederal,state,local,municipal,foreign,multi-nationalorotherlaw,statute,constitution,ordinance,code,decree,order,directive,judgment,
rule,regulation,rulingorrequirementissued,enacted,adopted,promulgated,implementedorotherwiseputinto
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effectbyorundertheauthorityofanyGovernmentalAuthorityandanyorderordecisionofanapplicablearbitratororarbitrationpanel.
(pp)
Legal
Proceeding
meansanyclaim,action,charge,lawsuit,litigation,hearingorothersimilarlyformallegalproceedingbroughtbyorpendingbeforeany
GovernmentalAuthority,arbitrator,mediatororothertribunal.
(qq)
Lien
meansanyliens,encumbrances,pledges,securityinterests,claimsanddefects,covenants,imperfections,mortgages,deedsoftrust,hypothecations,
encroachments,easements,userestrictions,rights-of-way,charges,adverseownershipinterests,attachments,optionsorotherrightstoacquireaninterest,rightsoffirstrefusalorconditional
saleorsimilarrestrictionontransferoftitleorvotingandotherrestrictionsoftitle.
(rr)
Material
Contract
meansanyofthefollowingContracts(butexcludinganyEmployeePlanssetforthinSection3.18(a)oftheCompanyDisclosureLetter):
(i) anymaterialcontract(asdefinedinItem601(b)(10)ofRegulationS-KpromulgatedbytheSEC)withrespecttotheCompanyanditsSubsidiaries,takenas
whole;
(ii) anyemploymentContractnotterminableatwillbytheCompanyoroneofitsSubsidiariespursuanttowhichtheCompanyoroneofitsSubsidiarieshas
continuingobligationsasofthedateofthisAgreementwithanyexecutiveofficerorotheremployeeatthevicepresidentlevelorabove,oranymemberoftheCompanyBoardotherthanan
InternationalEmployeePlan;
(iii) anyIPContract;
(iv) anyContractcontaininganycovenant(A)materiallylimitingtherightoftheCompanyoranyofitsSubsidiariesortheirrespectiveAffiliatestoengageinany
lineofbusinessortocompetewithanyPersoninanylineofbusinessorinanygeographicareathatismaterialtotheCompany;(B)prohibitingtheCompanyoranyofitsSubsidiariesfrom
engaginginanymaterialbusinesswithanyPersonorlevyingamaterialfine,chargeorotherpaymentfordoingso;or(C)grantofanymaterialmostfavorednationorexclusivestatustoa
thirdPerson,ineachcaseotherthananysuchContractsthatarenotmaterialtotheCompanyanditsSubsidiaries,takenasawhole;
(v) anyContract(A)relatingtothedispositionoracquisitionofamaterialamountofassetsbytheCompanyoranyofitsSubsidiariesafterthedateofthis
Agreementotherthanintheordinarycourseofbusiness;(B)pursuanttowhichtheCompanyoranyofitsSubsidiarieswillacquireanymaterialownershipinterestinanyothermaterialPerson
orothermaterialbusinessenterpriseotherthananySubsidiaryoftheCompanyor(C)isanagreementwithrespecttoanyacquisitionordivestiturepursuanttowhichtheCompanyoranyofits
Subsidiarieshascontinuingindemnification,earn-outorothercontingentpaymentobligations;
(vi) anymortgages,indentures,guarantees,loansorcreditagreements,securityagreementsorotherContractsrelatingtoIndebtedness,ineachcaseinexcessof
$10,000,000otherthan(A)accountsreceivablesandpayablesintheordinarycourseofbusiness;(B)loanstowholly
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ownedSubsidiariesoftheCompanyintheordinarycourseofbusiness;and(C)extensionsofcredittocustomersintheordinarycourseofbusiness;
(vii) anyLeaseorSubleasesetforthinSection3.14(b)orSection3.14(c)oftheCompanyDisclosureLetter;
(viii) anyContractprovidingforthepayment,increaseorvestingofanymaterialbenefitsorcompensationinconnectionwiththeMerger(otherthan(A)Contracts
evidencingCompanyStock-BasedAwardsorCompanyOptions;(B)EmployeePlans;or(C)InternationalEmployeePlans);
(ix) anyContractprovidingforindemnificationofanyofficer,directororemployeebytheCompanyoranyofitsSubsidiaries;
(x) anyContractthatinvolvesamaterialjointventure,strategicalliance,limitedliabilitycompany,partnershiporothersimilaragreementorarrangementrelatingto
theformation,creation,operation,managementorcontrolofanyoftheforegoing;
(xi) anyContractcontaininganysupport,maintenanceorserviceobligationonthepartoftheCompanyoranyofitsSubsidiariesthatrepresentsrevenueinexcessof
$10,000,000onanannualbasis,otherthanthoseContractsthatmaynotbecancelledwithoutliabilitytotheCompanyoranyofitsSubsidiariesuponnoticeof90daysorless;
(xii) anyContractthatprohibitsthepaymentofdividendsordistributionsinrespectofthecapitalstockoftheCompanyoranyofitsSubsidiaries,prohibitsthe
pledgingofthecapitalstockoftheCompanyoranySubsidiaryoftheCompany,prohibitstheissuanceofguaranteesbytheCompanyoranySubsidiaryoftheCompanyorgrantsanyrightsof
firstrefusalorrightoffirstofferorsimilarrightorthatlimitsorproposestolimittheabilityoftheCompanyoranyofitsSubsidiariesorAffiliatestosell,transfer,pledgeorotherwisedispose
ofanyassetsorbusinessesinexcessof$10,000,000;
(xiii)anyContractthatcontainsaput,callorsimilarrightpursuanttowhichtheCompanyoranyofitsSubsidiariescouldberequiredtopurchaseorsell,as
applicable,anyequityinterestsofanyPersonorassets,ineachcasewithavalueinexcessof$25,000,000;
(xiv)anyContractthat(A)iswithaSignificantVendoror(B)isreasonablylikelytoresultinpaymentsbytheCompanyoritsSubsidiariesofmorethan$10,000,000
intheaggregateovertheremainingtermofsuchContract(otherthananyLeaseorSublease);
(xv)anyContractthatisanagreementthatismaterialtotheCompanyanditsSubsidiaries,takenasawhole,withanyGovernmentalAuthority;
(xvi)anyCallOptionandanyWarrant;and
(xvii)anyContractlistedonSection1.1(rr)oftheCompanyDisclosureLetter.
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(ss)
Merger
Consideration
means$196.00incash,withoutinterest.
(tt)
NASDAQ
meansTheNasdaqStockMarket.
(uu)
NYSE
meanstheNewYorkStockExchange.
(vv)
Parent
Common
Stock
meansthecommonstock,parvalue$0.00000625pershare,ofParent.
(ww)
Parent
Material
Adverse
Effect
meansanyEffectthat,individuallyortakentogetherwithallotherEffectsthatexistorhaveoccurredpriortothedateof
determinationoftheoccurrenceoftheParentMaterialAdverseEffect,hashadorwouldreasonablybeexpectedtohaveamaterialadverseeffectonthebusiness,assets,liabilities,financial
conditionorresultsofoperationsofParentanditsSubsidiaries,takenasawhole.Noneofthefollowing(byitselforwhenaggregated)totheextentoccurringafterthedateofthisAgreement
willbedeemedtobeorconstituteaParentMaterialAdverseEffectorwillbetakenintoaccountwhendeterminingwhetheraParentMaterialAdverseEffecthasoccurredormay,wouldor
couldoccur:
(i) changesingeneraleconomicconditionsintheUnitedStatesoranyothercountryorregionintheworld,orchangesinconditionsintheglobaleconomy
generally(excepttotheextentthatsuchEffecthashadadisproportionateadverseeffectonParentrelativetoothercompaniesoperatingintheindustriesinwhichParentanditsSubsidiaries
conductbusiness,inwhichcaseonlytheincrementaldisproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaParentMaterialAdverseEffect);
(ii) changesinconditionsinthefinancialmarkets,creditmarketsorcapitalmarketsintheUnitedStatesoranyothercountryorregionintheworld,including
(A)changesininterestratesorcreditratingsintheUnitedStatesoranyothercountry;(B)changesinexchangeratesforthecurrenciesofanycountry;or(C)anysuspensionoftradingin
securities(whetherequity,debt,derivativeorhybridsecurities)generallyonanysecuritiesexchangeorover-the-countermarketoperatingintheUnitedStatesoranyothercountryorregionin
theworld(except,ineachcase,totheextentthatsuchEffecthashadadisproportionateadverseeffectonParentrelativetoothercompaniesoperatingintheindustriesinwhichParentandits
Subsidiariesconductbusiness,inwhichcaseonlytheincrementaldisproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaParentMaterial
AdverseEffect);
(iii) generalchangesinconditionsintheindustriesinwhichParentanditsSubsidiariesconductbusiness(excepttotheextentthatsuchEffecthashada
disproportionateadverseeffectonParentrelativetoothercompaniesoperatingintheindustriesinwhichParentanditsSubsidiariesconductbusiness,inwhichcaseonlytheincremental
disproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaParentMaterialAdverseEffect);
(iv) changesinregulatory,legislativeorpoliticalconditionsintheUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchEffecthas
hada
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disproportionateadverseeffectonParentrelativetoothercompaniesoperatingintheindustriesinwhichParentanditsSubsidiariesconductbusiness,inwhichcaseonlytheincremental
disproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaParentMaterialAdverseEffect);
(v) anygeopoliticalconditions,outbreakofhostilities,actsofwar,sabotage,terrorismormilitaryactions(includinganyescalationorgeneralworseningofanysuch
hostilities,actsofwar,sabotage,terrorismormilitaryactions)intheUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchEffecthashadadisproportionate
adverseeffectonParentrelativetoothercompaniesoperatingintheindustriesinwhichParentanditsSubsidiariesconductbusiness,inwhichcaseonlytheincrementaldisproportionate
adverseimpactmaybetakenintoaccountindeterminingwhethertherehasoccurredaParentMaterialAdverseEffect);
(vi) earthquakes,hurricanes,tsunamis,tornadoes,floods,mudslides,wildfiresorothernaturaldisasters,weatherconditionsandothersimilarforcemajeureeventsin
theUnitedStatesoranyothercountryorregionintheworld(excepttotheextentthatsuchEffecthashadadisproportionateadverseeffectonParentrelativetoothercompaniesoperatinginthe
industriesinwhichParentanditsSubsidiariesconductbusiness,inwhichcaseonlytheincrementaldisproportionateadverseimpactmaybetakenintoaccountindeterminingwhethertherehas
occurredaParentMaterialAdverseEffect);
(vii) thepublicannouncementorpendencyofthisAgreementortheMerger,itbeingunderstoodthattheexceptionsinthisclause(vii)willnotapplywithrespectto
referencestoParentMaterialAdverseEffectintherepresentationsandwarrantiescontainedinSection4.3(andinSection7.3(a)andSection8.1(g)totheextentrelatedtosuchportionsofsuch
representationsandwarranties);
(viii)anyactiontakenorrefrainedfrombeingtaken,ineachcasetowhichtheCompanyhasexpresslyapproved,consentedtoorrequestedinwritingfollowingthe
dateofthisAgreement;
(ix) changesorproposedchangesinGAAPorotheraccountingstandardsorLaw(ortheenforcementorinterpretationofanyoftheforegoing);
(x) changesinthepriceortradingvolumeoftheParentCommonStockorParentIndebtedness,inandofitself(itbeingunderstoodthatanycauseofsuchchange
maybedeemedtoconstitute,inandofitself,aParentMaterialAdverseEffectandmaybetakenintoconsiderationwhendeterminingwhetheraParentMaterialAdverseEffecthasoccurred);
(xi) anyfailure,inandofitself,byParentanditsSubsidiariestomeet(A)anypublicestimatesorexpectationsofParentsrevenue,earningsorotherfinancial
performanceorresultsofoperationsforanyperiod;or(B)anyinternalbudgets,plans,projectionsorforecastsofitsrevenues,earningsorotherfinancialperformanceorresultsofoperations(it
beingunderstoodthatanycauseofanysuchfailuremaybedeemedtoconstitute,inandofitself,aParentMaterial
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AdverseEffectandmaybetakenintoconsiderationwhendeterminingwhetheraParentMaterialAdverseEffecthasoccurred);and
(xii)
anyTransactionLitigation.
(xx)
Parent
Stock
Price
meansanamountequaltothevolumeweightedaveragepricepershareroundedtofourdecimalplaces(withamounts0.00005andabove
roundedup)ofParentCommonStockonNASDAQ(asreportedbyBloombergL.P.oranotherauthoritativesourcemutuallyselectedbyParentandtheCompany)forthefiveconsecutive
tradingdaysendingwiththecompletetradingdayendingimmediatelypriortotheClosingDate.
(yy)
Permitted
Liens
meansanyofthefollowing:(i)liensforTaxes,assessmentsandgovernmentalchargesorlevieseithernotyetdelinquentorthatarebeing
contestedingoodfaithandbyappropriateproceedingsandforwhichappropriatereserveshavebeenestablishedtotheextentrequiredbyGAAP;(ii)mechanics,carriers,workmens,
warehousemans,repairmens,materialmensorothersimilarliensorsecurityintereststhatarenotyetdueorthatarebeingcontestedingoodfaithandbyappropriateproceedings;(iii)third
Personleases,subleasesandlicenses(otherthancapitalleasesandleasesunderlyingsaleandleasebacktransactions)enteredintotheordinarycourseofbusinessunderwhichthereexistsno
materialdefault;(iv)pledgesordepositstosecureobligationspursuanttoworkerscompensationLawsorsimilarlegislationortosecurepublicorstatutoryobligations;(v)pledgesanddeposits
tosecuretheperformanceofbids,tradecontracts,leases,suretyandappealbonds,performancebondsandotherobligationsofasimilarnature,ineachcaseintheordinarycourseofbusiness;
(vi)defects,imperfectionsorirregularitiesintitle,easements,covenantsandrightsofway(unrecordedandofrecord)andothersimilarliens(orotherencumbrancesofanytype),ineachcase
thatdonot,andarenotreasonablylikelyto,adverselyaffectinanymaterialrespectthecurrentuseoroccupancyoftheapplicablepropertyowned,leased,usedorheldforusebytheCompany
oranyofitsSubsidiaries;(vii)zoning,buildingandothersimilarcodesorrestrictionswhicharenotviolatedinanymaterialrespectbythecurrentuseoroccupancyoftherealpropertysubject
thereto;(viii)lienstheexistenceofwhicharedisclosedinthenotestotheconsolidatedfinancialstatementsoftheCompanyincludedintheCompanySECReportsfiledasofthedateofthis
Agreement;(ix)lienspursuanttotheNotesIndenture;(x)non-exclusivelicensestoCompanyIntellectualPropertyenteredintointheordinarycourseofbusiness;(xi)anyotherliensthatdonot
securealiquidatedamount,thathavebeenincurredorsufferedintheordinarycourseofbusiness,andthatwouldnot,individuallyorintheaggregate,haveaCompanyMaterialAdverseEffect;
and(xii)statutory,commonlaworcontractualliensoflandlordsunderLeasesorliensagainstthefeeinterestsofthelandlordorownerofanyLeasedRealPropertyunlesscausedbythe
CompanyoranyofitsSubsidiaries.
(zz)
Person
meansanyindividual,corporation(includinganynon-profitcorporation),limitedliabilitycompany,jointstockcompany,generalpartnership,limited
partnership,limitedliabilitypartnership,jointventure,estate,trust,firm,GovernmentalAuthorityorotherenterprise,association,organizationorentity.
(aaa) Registered
Intellectual
Property
meansallUnitedStates,internationalandforeign(i)PatentsandPatentapplications(includingprovisionalapplications);
(ii)registeredMarks
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andapplicationstoregisterMarks(includingintent-to-useapplications,orotherregistrationsorapplicationsrelatedtoMarks);and(iii)registeredCopyrightsandapplicationsforCopyright
registration.
(bbb) Sarbanes-Oxley
Act
meanstheSarbanes-OxleyActof2002.
(ccc)
SEC
meanstheUnitedStatesSecuritiesandExchangeCommissionoranysuccessorthereto.
(ddd) Securities
Act
meanstheSecuritiesActof1933.
(eee)
Significant
Vendor
means(i)eachofthe20largestvendorstotheCompanyanditsSubsidiaries,(orgroupsofrelatedvendorsorsuppliers)bygrossspend,
takenasawhole,duringthe12-monthperiodendedonDecember31,2015,whichvendorsaresetforthonSection1.1(eee)oftheCompanyDisclosureLetter;and(ii)anyothermaterial
vendorsorsuppliersoftheCompanywithmaterialagreementswiththeCompanywhoaredatacenter,dataprocessing,cloudorhostingvendors.
(fff)
Stock
Award
Exchange
Ratio
meansafraction(i)thenumeratorofwhichistheMergerConsiderationand(ii)thedenominatorofwhichistheParentStock
Price,roundedtofourdecimalplaces(withamounts0.00005andaboveroundedup).
(ggg)
Subsidiary
ofanyPersonmeans(i)acorporationmorethan50%ofthecombinedvotingpoweroftheoutstandingvotingstockofwhichisowned,directlyor
indirectly,bysuchPersonorbyoneormoreotherSubsidiariesofsuchPersonorbysuchPersonandoneormoreotherSubsidiariesofsuchPerson;(ii)apartnershipofwhichsuchPersonor
oneormoreotherSubsidiariesofsuchPersonorsuchPersonandoneormoreotherSubsidiariesthereof,directlyorindirectly,isthegeneralpartnerandhasthepowertodirectthepolicies,
managementandaffairsofsuchpartnership;(iii)alimitedliabilitycompanyofwhichsuchPersonoroneormoreotherSubsidiariesofsuchPersonorsuchPersonandoneormoreother
SubsidiariesofsuchPerson,directlyorindirectly,isthemanagingmemberandhasthepowertodirectthepolicies,managementandaffairsofsuchcompany;or(iv)anyotherPerson(other
thanacorporation,partnershiporlimitedliabilitycompany)inwhichsuchPersonoroneormoreotherSubsidiariesofsuchPersonorsuchPersonandoneormoreotherSubsidiariesofsuch
Person,directlyorindirectly,hasatleastamajorityownershiporthepowertodirectthepolicies,managementandaffairsthereof(includingbycontract).
(hhh) Superior
Proposal
meansanybonafidewrittenAcquisitionProposalforanAcquisitionTransactionontermsthattheCompanyBoardhasdeterminedingood
faith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)wouldbemorefavorable,fromafinancialpointofview,totheCompanyStockholders(intheircapacityassuch)
thantheMerger(takingintoaccountanyrevisionstothisAgreementmadeorproposedinwritingbyParentpriortothetimeofsuchdeterminationandaftertakingintoaccountthosefactors
andmattersdeemedrelevantingoodfaithbytheCompanyBoard,includingtheidentityofthePersonmakingtheproposal,thelikelihoodofconsummationinaccordancewiththetermsof
suchproposalandthe
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legal,financial(includingthefinancingterms),regulatory,timingandotheraspectsofsuchproposal).ForpurposesofthereferencetoanAcquisitionProposalinthisdefinition,all
referencesto15%inthedefinitionofAcquisitionTransactionwillbedeemedtobereferencesto50%.
(iii)
Tax
meansanyUnitedStatesfederal,state,localandnon-UnitedStatesgrossreceipts,income,profits,sales,use,occupation,valueadded,advalorem,transfer,
franchise,withholding,payroll,employment,exciseandpropertytaxes,assessmentsandanysimilargovernmentalchargesandimpositionsofanykind,togetherwithallinterest,penaltiesand
additionsimposedwithrespecttosuchamounts.
(jjj)
Transaction
Litigation
meansanyLegalProceedingcommencedorthreatenedafterthedateofthisAgreementagainstaPartyoranyofitsSubsidiariesor
Affiliatesordirectorsorotherwiserelatingto,involvingoraffectingsuchPartyoranyofitsSubsidiariesorAffiliates,ineachcaseinconnectionwith,arisingfromorotherwiserelatingtothe
MergeroranyothertransactioncontemplatedbythisAgreement,includinganyLegalProceedingallegingorassertinganymisrepresentationoromissionintheProxyStatementoranyOther
RequiredCompanyFiling.
(kkk) WARN
meanstheUnitedStatesWorkerAdjustmentandRetrainingNotificationAct.
(lll)
Warrants
meansthewarranttransactionsevidencedby:
(i) (A)theletteragreementre:BaseWarrants,datedasofNovember5,2014,betweentheCompanyandCitibank,N.A.and(B)theletteragreementre:Additional
Warrants,datedasofNovember6,2014,betweentheCompanyandCitibank,N.A.;
(ii) (A)theletteragreementre:BaseWarrants,datedasofNovember5,2014,betweentheCompanyandJPMorganChaseBank,NationalAssociation,London
Branchand(B)theletteragreementre:AdditionalWarrants,datedasofNovember6,2014,betweentheCompanyandJPMorganChaseBank,NationalAssociation,LondonBranch;and
(iii) (A)theletteragreementre:BaseWarrants,datedasofNovember5,2014,betweentheCompanyandBankofAmerica,N.A.and(B)theletteragreementre:
AdditionalWarrants,datedasofNovember6,2014,betweentheCompanyandBankofAmerica,N.A.;whereeachsuchtransactionshallbeaWarrant.
1.2
Additional
Definitions
.ThefollowingcapitalizedtermshavetherespectivemeaningsgiventothemintherespectiveSectionsofthisAgreementsetforthoppositeeachof
thecapitalizedtermsbelow:
Term
Section
Reference
Advisor
Agreement
AlternativeAcquisitionAgreement
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3.3(b)
Preamble
5.3(a)
TableofContents
Term
Section
Reference
AssumedCompanyOption
AssumedCompanyStock-BasedAward
Book-EntryShares
Bylaws
CapitalizationDate
CertificateofMerger
Certificates
Charter
Closing
ClosingDate
CollectiveBargainingAgreement
Company
CompanyBoardRecommendation
CompanyBoardRecommendationChange
CompanyDisclosureLetter
CompanyEmployee
CompanyPlans
CompanyPrivacyPolicy
CompanyRecentSECReports
CompanyRelatedParties
CompanySECReports
CompanySecurities
CompanyStockholderMeeting
ComparablePlans
ConfidentialityAgreement
Consent
DGCL
DissentingCompanyShares
D&OInsurance
Effect
EffectiveTime
ElectronicDelivery
ESPP
PayingAgent
HedgeCounterparty
IndemnifiedPersons
InternationalEmployeePlan
IPContracts
Lease
LeasedRealProperty
MaximumAnnualPremium
Merger
MergerSub
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2.8(b)
2.8(d)
2.9(b)(ii)
3.1
3.7(a)
2.2
2.9(b)(i)
3.1
2.3
2.3
3.19(a)
Preamble
3.3(a)
5.3(c)(i)
1.4(a)
3.18(i)
6.9(c)
3.16(i)
ArticleIII
8.3(e)
3.9
3.7(d)
6.4(a)
6.9(c)
9.4
3.6
Recitals
2.7(b)(i)
6.8(c)
1.1(q)
2.2
9.12
2.8(h)
2.9(a)
6.16(d)
6.8(a)
3.18(a)
3.16(c)
3.14(b)
3.14(b)
6.8(c)
Recitals
Preamble
TableofContents
Term
Section
Reference
NewEmployeePlans
5.2(h)
NewPlans
6.9(d)
NotesIndenture
6.16(a)
NoticePeriod
5.3(d)(ii)(3)
OldPlans
6.9(d)
OtherRequiredParentFiling
6.3(f)
OwnedCompanyShares
2.7(a)(ii)
OwnedRealProperty
3.14(a)
Parent
Preamble
ParentDisclosureLetter
1.4(b)
ParentRecentSECReports
ArticleIV
ParentStockPlan
2.8(b)
Party
Preamble
Permits
3.20
ProxyStatement
6.3(a)
Representatives
5.3(a)
RepurchaseTransaction
6.16(c)
RequisiteStockholderApproval
3.4
Sublease
3.14(c)
SurrenderedCompanyOption
2.8(a)
SurrenderedCompanyStock-BasedAward
2.8(c)
SurvivingCorporation
2.1
TaxReturns
3.17(a)
TerminationDate
8.1(c)
TerminationFee
8.3(b)(i)
Trustee
6.16(a)
UserPII
3.16(i)
1.3Certain
Interpretations
.
(a)WhenareferenceismadeinthisAgreementtoanArticleoraSection,suchreferenceistoanArticleoraSectionofthisAgreementunlessotherwiseindicated.
WhenareferenceismadeinthisAgreementtoaScheduleorExhibit,suchreferenceistoaScheduleorExhibittothisAgreement,asapplicable,unlessotherwiseindicated.
(b)Whenusedherein,(i)thewordshereof,hereinandherewithandwordsofsimilarimportwill,unlessotherwisestated,beconstruedtorefertothisAgreement
asawholeandnottoanyparticularprovisionofthisAgreement;and(ii)thewordsinclude,includesandincludingwillbedeemedineachcasetobefollowedbythewordswithout
limitation.
(c)Unlessthecontextotherwiserequires,neither,nor,any,eitherandorarenotexclusive.
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(d)Thewordextentinthephrasetotheextentmeansthedegreetowhichasubjectorotherthingextends,anddoesnotsimplymeanif.
(e)WhenusedinthisAgreement,referencesto$orDollarsarereferencestoU.S.dollars.
(f)ThemeaningassignedtoeachcapitalizedtermdefinedandusedinthisAgreementisequallyapplicabletoboththesingularandthepluralformsofsuchterm,and
wordsdenotinganygenderincludeallgenders.WhereawordorphraseisdefinedinthisAgreement,eachofitsothergrammaticalformshasacorrespondingmeaning.
(g)WhenreferenceismadetoanypartytothisAgreementoranyotheragreementordocument,suchreferenceincludessuchpartyssuccessorsandpermittedassigns.
ReferencestoanyPersonincludethesuccessorsandpermittedassignsofthatPerson.
(h)Unlessthecontextotherwiserequires,allreferencesinthisAgreementtotheSubsidiariesofaPersonwillbedeemedtoincludealldirectandindirectSubsidiaries
ofsuchentity.
(i)Areferencetoanyspecificlegislationortoanyprovisionofanylegislationincludesanyamendmentto,andanymodification,re-enactmentorsuccessorthereof,
anylegislativeprovisionsubstitutedthereforandallrules,regulationsandstatutoryinstrumentsissuedthereunderorpursuantthereto,exceptthat,forpurposesofanyrepresentationsand
warrantiesinthisAgreementthataremadeasaspecificdate,referencestoanyspecificlegislationwillbedeemedtorefertosuchlegislationorprovision(andallrules,regulationsandstatutory
instrumentsissuedthereunderorpursuantthereto)asofsuchdate.ReferencestoanyagreementorContractaretothatagreementorContractasamended,modifiedorsupplementedfromtime
totime.
(j)Exceptasotherwiseprovidedherein,allaccountingtermsusedhereinwillbeinterpreted,andallaccountingdeterminationshereunderwillbemade,inaccordance
withGAAP.
(k)ThetableofcontentsandheadingssetforthinthisAgreementareforconvenienceofreferencepurposesonlyandwillnotaffectorbedeemedtoaffectinanyway
themeaningorinterpretationofthisAgreementoranytermorprovisionhereof.
(l)Referencestofromorthroughanydatemean,unlessotherwisespecified,fromandincludingorthroughandincludingsuchdate,respectively.
(m)ThemeasureofaperiodofonemonthoryearforpurposesofthisAgreementwillbethedateofthefollowingmonthoryearcorrespondingtothestartingdate.Ifno
correspondingdateexists,thentheenddateofsuchperiodbeingmeasuredwillbethenextactualdateofthefollowingmonthoryear(forexample,onemonthfollowingFebruary18is
March18andonemonthfollowingMarch31isMay1).
(n)ThePartiesagreethattheyhavebeenrepresentedbylegalcounselduringthenegotiationandexecutionofthisAgreementandthereforewaivetheapplicationofany
Law,
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regulation,holdingorruleofconstructionprovidingthatambiguitiesinanagreementorotherdocumentwillbeconstruedagainstthePartydraftingsuchagreementordocument.
(o)NosummaryofthisAgreementoranyExhibit,ScheduleorotherdocumentdeliveredherewithpreparedbyoronbehalfofanyPartywillaffectthemeaningor
interpretationofthisAgreementorsuchExhibitorSchedule.
(p)TheinformationcontainedinthisAgreementandintheCompanyDisclosureLetterandtheParentDisclosureLetterisdisclosedsolelyforpurposesofthis
Agreement,andnoinformationcontainedhereinorthereinwillbedeemedtobeanadmissionbyanyPartytoanythirdPersonofanymatterwhatsoever,including(i)anyviolationofLawor
breachofcontract;or(ii)thatsuchinformationismaterialorthatsuchinformationisrequiredtobereferredtoordisclosedunderthisAgreement.
(q)TherepresentationsandwarrantiesinthisAgreementaretheproductofnegotiationsamongthePartiesandareforthesolebenefitoftheParties.Anyinaccuracies
insuchrepresentationsandwarrantiesaresubjecttowaiverbythePartiesinaccordancewithSection8.5withoutnoticeorliabilitytoanyotherPerson.Insomeinstances,therepresentations
andwarrantiesinthisAgreementmayrepresentanallocationamongthePartiesofrisksassociatedwithparticularmattersregardlessoftheknowledgeofanyoftheParties.Consequently,
PersonsotherthanthePartiesmaynotrelyontherepresentationsandwarrantiesinthisAgreementascharacterizationsofactualfactsorcircumstancesasofthedateofthisAgreementorasof
anyotherdate.
(r)DocumentsorotherinformationormaterialswillbedeemedtohavebeenmadeavailablebytheCompanyifsuchdocuments,informationormaterialshavebeen
(i)postedtoavirtualdataroommanagedbytheCompanyatwww.merrillcorp.com;or(ii)deliveredorprovidedtoParentoritsAffiliatesorRepresentatives,ineachcaseatanytimepriorto
theexecutionanddeliveryofthisAgreement.
1.4Disclosure
Letters
.
(a)TheinformationsetforthinthedisclosureletterdeliveredbytheCompanytoParentandMergerSubonthedateofthisAgreement(theCompany
Disclosure
Letter
)willbedisclosedunderseparateandappropriateSectionandsubsectionreferencesthatcorrespondtotheSectionsandsubsectionsofArticleIIItowhichsuchinformationrelates.The
informationsetforthineachSectionorsubsectionoftheCompanyDisclosureLetterwillbedeemedtobeanexceptionto(or,asapplicable,adisclosureforpurposesof)(i)therepresentations
andwarranties(orcovenants,asapplicable)oftheCompanythataresetforthinthecorrespondingSectionorsubsectionofthisAgreement;and(ii)anyotherrepresentationsandwarranties(or
covenants,asapplicable)oftheCompanythataresetforthinthisAgreement,butinthecaseofthisclause(ii)onlyiftherelevanceofthatdisclosureasanexceptionto(oradisclosurefor
purposesof)suchotherrepresentationsandwarranties(orcovenants,asapplicable)isreasonablyapparentonthefaceofsuchdisclosure.
(b)TheinformationsetforthinthedisclosureletterdeliveredbyParentandMergerSubtotheCompanyonthedateofthisAgreement(theParent
Disclosure
Letter
)willbe
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disclosedunderseparateandappropriateSectionandsubsectionreferencesthatcorrespondtotheSectionsandsubsectionsofArticleIVtowhichsuchinformationrelates.Theinformationset
forthineachSectionorsubsectionoftheParentDisclosureLetterwillbedeemedtobeanexceptionto(or,asapplicable,adisclosureforpurposesof)(i)therepresentationsandwarranties(or
covenants,asapplicable)ofParentandMergerSubthataresetforthinthecorrespondingSectionorsubsectionofthisAgreement;and(ii)anyotherrepresentationsandwarranties(or
covenants,asapplicable)ofParentandMergerSubthataresetforthinthisAgreement,butinthecaseofthisclause(ii)onlyiftherelevanceofthatdisclosureasanexceptionto(ora
disclosureforpurposesof)suchotherrepresentationsandwarranties(orcovenants,asapplicable)isreasonablyapparentonthefaceofsuchdisclosure.
ARTICLE
II
THE
MERGER
2.1The
Merger
.UponthetermsandsubjecttotheconditionssetforthinthisAgreementandtheapplicableprovisionsoftheDGCL,ontheClosingDate,(a)MergerSubwillbe
mergedwithandintotheCompany;(b)theseparatecorporateexistenceofMergerSubwillthereuponcease;and(c)theCompanywillcontinueasthesurvivingcorporationoftheMergeranda
SubsidiaryofParent.TheCompany,asthesurvivingcorporationoftheMerger,issometimesreferredtohereinastheSurviving
Corporation
.
2.2The
Effective
Time
.UponthetermsandsubjecttotheconditionssetforthinthisAgreement,ontheClosingDate,Parent,MergerSubandtheCompanywillcausethe
MergertobeconsummatedpursuanttotheDGCLbyfilingacertificateofmerger(theCertificate
of
Merger
)withtheSecretaryofStateoftheStateofDelawareinaccordancewiththe
applicableprovisionsoftheDGCL(thetimeofsuchfilingandacceptancewiththeSecretaryofStateoftheStateofDelaware,orsuchlatertimeasmaybeagreedinwritingbyParent,Merger
SubandtheCompanyandspecifiedintheCertificateofMergerinaccordancewiththeDGCL,beingreferredtohereinastheEffective
Time
).
2.3The
Closing
.TheconsummationoftheMergerwilltakeplaceataclosing(theClosing
)tooccurat(a)9:00a.m.,Pacifictime,attheofficesofWilsonSonsini
Goodrich&Rosati,ProfessionalCorporation,650PageMillRoad,PaloAlto,CA94304,onadatetobeagreeduponbyParent,MergerSubandtheCompanythatisnolaterthanthesecond
BusinessDayafterthesatisfactionorwaiver(totheextentpermittedhereunder)ofthelasttobesatisfiedorwaivedoftheconditionssetforthinArticleVII(otherthanthoseconditionsthatby
theirtermsaretobesatisfiedattheClosing,butsubjecttothesatisfactionorwaiver(totheextentpermittedhereunder)ofsuchconditions);or(b)suchothertime,locationanddateasParent,
MergerSubandtheCompanymutuallyagreeinwriting.ThedateonwhichtheClosingactuallyoccursisreferredtoastheClosing
Date
.
2.4Effect
of
the
Merger
.AttheEffectiveTime,theeffectoftheMergerwillbeasprovidedinthisAgreementandtheapplicableprovisionsoftheDGCL.Withoutlimitingthe
generalityoftheforegoing,andsubjectthereto,attheEffectiveTimeall(a)oftheproperty,rights,privileges,powersandfranchisesoftheCompanyandMergerSubwillvestintheSurviving
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Corporation;and(b)debts,liabilitiesanddutiesoftheCompanyandMergerSubwillbecomethedebts,liabilitiesanddutiesoftheSurvivingCorporation.
2.5Certificate
of
Incorporation
and
Bylaws
.
(a)Certificate
of
Incorporation
.AttheEffectiveTime,thecertificateofincorporationoftheCompanyasineffectimmediatelypriortotheEffectiveTimeshallbe
amendedandrestatedinitsentiretyintheformattachedheretoasExhibitAand,assoamended,shallbethecertificateofincorporationoftheSurvivingCorporationuntilthereafteramendedin
accordancewiththeapplicableprovisionsoftheDGCLandsuchcertificateofincorporation.
(b)Bylaws
.AttheEffectiveTime,thebylawsofMergerSub,asineffectimmediatelypriortotheEffectiveTime,willbethebylawsoftheSurvivingCorporationuntil
thereafteramendedinaccordancewiththeapplicableprovisionsoftheDGCL,thecertificateofincorporationoftheSurvivingCorporationandsuchbylaws.
2.6Directors
and
Officers
.
(a)Directors
.ThePartieswilltakeallnecessaryactionssothatattheEffectiveTime,theinitialdirectorsoftheSurvivingCorporationwillbethedirectorsofMerger
SubasofimmediatelypriortotheEffectiveTime,eachtoholdofficeinaccordancewiththecertificateofincorporationandbylawsoftheSurvivingCorporationuntiltheirrespective
successorsaredulyelectedorappointedandqualified.
(b)Officers
.ThePartieswilltakeallnecessaryactionssothatattheEffectiveTime,theinitialofficersoftheSurvivingCorporationwillbetheofficersofthe
CompanyasofimmediatelypriortotheEffectiveTime,eachtoholdofficeinaccordancewiththecertificateofincorporationandbylawsoftheSurvivingCorporationuntiltheirrespective
successorsaredulyappointed.
2.7Effect
on
Capital
Stock
.
(a)Capital
Stock
.UponthetermsandsubjecttotheconditionssetforthinthisAgreement,attheEffectiveTime,byvirtueoftheMergerandwithoutanyactiononthe
partofParent,MergerSub,theCompanyortheholdersofanyofthefollowingsecurities,thefollowingwilloccur:
(i)eachshareofcommonstock,parvalue$0.01pershare,ofMergerSubthatisoutstandingasofimmediatelypriortotheEffectiveTimewillbeconvertedinto
onevalidlyissued,fullypaidandnonassessableshareofcommonstockoftheSurvivingCorporation,andthereuponeachcertificaterepresentingownershipofsuchsharesofcommonstockof
MergerSubwillthereafterrepresentownershipofsharesofcommonstockoftheSurvivingCorporation;
(ii)eachshareofCompanyCommonStockthatis(A)heldbytheCompanyastreasurystock;(B)ownedbyParentorMergerSub;or(C)ownedbyanydirector
indirectwhollyownedSubsidiaryofParentorMergerSubasofimmediatelypriortotheEffectiveTime
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(collectively,theOwned
Company
Shares
)willbecancelledwithoutanyconversionthereoforconsiderationpaidtherefor;and
(iii)eachshareofCompanyCommonStockissuedandoutstandingimmediatelypriortotheEffectiveTime(otherthanOwnedCompanySharesandDissenting
CompanyShares)willbecancelledandautomaticallyconvertedintotherighttoreceivetheMergerConsideration.
(b)Statutory
Rights
of
Appraisal
.
(i)NotwithstandinganythingtothecontrarysetforthinthisAgreement,allsharesofCompanyCommonStockthatareissuedandoutstandingasofimmediately
priortotheEffectiveTimeandheldbyCompanyStockholderswhohaveneithervotedinfavorofadoptionofthisAgreementnorconsentedtheretoinwritingandwhohaveproperlyand
validlyexercisedtheirstatutoryrightsofappraisalinrespectofsuchsharesofCompanyCommonStockinaccordancewithSection262oftheDGCL(theDissenting
Company
Shares
)
willnotbeconvertedinto,orrepresenttherighttoreceive,theMergerConsiderationpursuanttothisSection2.7.SuchCompanyStockholderswillbeentitledtoreceivepaymentofthe
appraisedvalueofsuchDissentingCompanySharesinaccordancewiththeprovisionsofSection262oftheDGCL,exceptthatallDissentingCompanySharesheldbyCompanyStockholders
whohavefailedtoperfectorwhohaveeffectivelywithdrawnorlosttheirrightstoappraisalofsuchDissentingCompanySharespursuanttoSection262oftheDGCLwillthereuponbe
deemedtohavebeenconvertedinto,andtohavebecomeexchangeablefor,asoftheEffectiveTime,therighttoreceivetheMergerConsiderationuponsurrenderoftheCertificatesorBookEntrySharesthatformerlyevidencedsuchsharesofCompanyCommonStockinthemannerprovidedinSection2.9.
(ii)TheCompanywillgiveParent(A)promptnoticeofanydemandsforappraisalreceivedbytheCompany,withdrawalsofsuchdemandsandanyother
instrumentsservedpursuanttotheDGCLandreceivedbytheCompanyinrespectofDissentingCompanyShares;and(B)theopportunitytoparticipateinanddirectallnegotiationsandLegal
ProceedingswithrespecttodemandsforappraisalpursuanttotheDGCLinrespectofDissentingCompanyShares.TheCompanymaynot,exceptwiththepriorwrittenconsentofParent,
voluntarilymakeanypaymentwithrespecttoanydemandsforappraisalorsettleoroffertosettleanysuchdemandsforpaymentinrespectofDissentingCompanyShares.
2.8Equity
Awards
.
(a)Surrendered
Company
Options.
EachCompanyOptionthatisoutstandingasofimmediatelypriortotheEffectiveTimeandthatis(i)vestedasofimmediatelyprior
totheEffectiveTimeor(ii)listedonSection2.8(a)oftheCompanyDisclosureLetter(each,aSurrendered
Company
Option
),will,asoftheEffectiveTime,becancelledandconverted
intotherighttoreceivetheMergerConsiderationforeachshareofCompanyCommonStockthatwouldhavebeenissuableuponexerciseofsuchSurrenderedCompanyOptionpriortothe
EffectiveTimelesstheapplicableexercisepriceforeachsuchshareofCompanyCommonStockundersuchSurrenderedCompanyOptionandanyapplicablewithholdingTaxesinaccordance
withSection
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2.12.Fortheavoidanceofdoubt,intheeventthattheexercisepricepershareunderanySurrenderedCompanyOptionisequaltoorgreaterthantheMergerConsideration,suchSurrendered
CompanyOptionshallbecancelledasoftheEffectiveTimewithoutpaymentthereforandshallhavenofurtherforceoreffect.
(b)Assumed
Company
Options
.EachCompanyOptionthatisoutstandingasofimmediatelypriortotheEffectiveTime,hasanexercisepricepersharethatislessthan
theMergerConsiderationandisnotaSurrenderedCompanyOption(each,anAssumed
Company
Option
),will,asoftheEffectiveTime,be,asdeterminedbyParent,(x)assumedby
Parentandconvertedintoanoptiontoacquire,or(y)convertedintoanoptiongrantedpursuanttoParents2001StockPlan,asamendedandrestated(theParent
Stock
Plan
),toacquire,in
eachcase,onthesamematerialtermsandconditionsaswereapplicabletosuchAssumedCompanyOptionimmediatelypriortotheEffectiveTime(withthetermsofsuchAssumedCompany
Optionnotbeingeconomicallydetrimentaltotheholderthereofandnoadversechangetothevestingscheduleandwithothertermsandconditionsrelatingtomethodandmannerofpayment
andexercise,andpost-terminationexerciseperiods,totheextentadministrativelypracticable,tobenolessfavorable,itbeingunderstoodthatthetransactionscontemplatedbythisAgreement
constituteachangeincontrolforpurposesoftheCompanyStockPlansandawardagreementsthereunder),anumberofsharesofParentCommonStockequaltotheproduct(roundeddown
tothenearestwholeshare)of(i)thenumberofsharesofCompanyCommonStocksubjecttosuchAssumedCompanyOptionasofimmediatelypriortotheEffectiveTimemultipliedby
(ii)theStockAwardExchangeRatio,atanexercisepricepershareofParentCommonStockequaltothequotient(roundeduptothenearestwholecent)of(A)thepershareexercisepricefor
theCompanyCommonStocksubjecttosuchAssumedCompanyOptionasofimmediatelypriortotheEffectiveTimedividedby(B)theStockAwardExchangeRatio.Asaresultofanysuch
conversionprovidedforinclause(y)above,anysuchAssumedCompanyOptionsshallbesubjecttoallofthetermsandconditionsoftheParentStockPlanandgrantagreementsforthe
AssumedCompanyOptions(ratherthanthetermsandconditionsoftheCompanyStockPlanandgrantagreementsunderwhichtheAssumedCompanyOptionswereoriginallyissued),subject
totheforegoingsentence.TheexercisepricepershareofParentCommonStocksubjecttoanysuchAssumedCompanyOptionwillbedeterminedinamannerconsistentwiththepreceding
andtherequirementsofSection409AoftheCodeand,totheextentapplicable,Section424oftheCode.Notwithstandingtheforegoing,priortotheClosingDate,Parentmayelecttotreat
someorallCompanyOptionsthatwouldotherwisebeAssumedCompanyOptionsasvestedSurrenderedCompanyOptions,whichwillbesettledinaccordancewithSection2.8(a),withthe
vestingofsuchCompanyOptionsfullyacceleratedpriortosuchtreatment.EachCompanyOptionthatis(x)outstandingasofimmediatelypriortotheEffectiveTime,(y)hasanexerciseprice
persharethatisequaltoorgreaterthantheMergerConsiderationand(z)isnotaSurrenderedCompanyOptionshallbecancelledasoftheEffectiveTimewithoutpaymentthereforandshall
havenofurtherforceoreffect.
(c)Surrendered
Company
Stock-Based
Awards
.EachCompanyStock-BasedAwardthatisoutstandingasofimmediatelypriortotheEffectiveTimeand(i)isvested
asofimmediatelypriortotheEffectiveTimeor(ii)islistedonSection2.8(c)oftheCompanyDisclosureLetterand,ineachcase,byitstermsistobesettledupontheoccurrenceofvestingor
theEffectiveTime(each,aSurrendered
Company
Stock-Based
Award
),will,asoftheEffectiveTime,be
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deemedtobevestedandwillbecancelledandconvertedintotherighttoreceivetheMergerConsiderationwithrespecttoeachshareofCompanyCommonStocksubjecttotheSurrendered
CompanyStock-BasedAward,lessanyapplicablewithholdingTaxesinaccordancewithSection2.12.
(d)Assumed
Company
Stock-Based
Awards
.EachCompanyStock-BasedAwardthatisoutstandingasofimmediatelypriortotheEffectiveTimeandisnota
SurrenderedCompanyStock-BasedAward(each,anAssumed
Company
Stock-Based
Award
),will,asoftheEffectiveTime,be,asdeterminedbyParent,(x)assumedbyParentand
convertedintoastock-basedawardor(y)convertedintoastock-basedawardgrantedpursuanttotheParentStockPlan,ineachcase,withthesamematerialtermsandconditionsaswere
applicabletosuchAssumedCompanyStock-BasedAwardimmediatelypriortotheEffectiveTime(withnoadversechangetothevestingtermsandwithothertermsandconditions,including
relatingtosatisfactionoftaxwithholdingobligations,totheextentadministrativelypracticabletobenolessfavorable,itbeingunderstoodthatthetransactionscontemplatedbythisAgreement
constituteachangeincontrolforpurposesoftheCompanyStockPlansandawardagreementsthereunder),inrespectofanumberofsharesofParentCommonStockequaltotheproduct
(roundeddowntothenearestwholeshare)of(i)thenumberofsharesofCompanyCommonStocksubjecttosuchAssumedCompanyStock-BasedAwardasofimmediatelypriortothe
EffectiveTimemultipliedby(ii)theStockAwardExchangeRatio.Asaresultofanysuchconversionprovidedforinclause(y)above,anysuchAssumedCompanyStock-BasedAwardsshall
besubjecttoallofthetermsandconditionsoftheParentStockPlanandgrantagreementsfortheAssumedCompanyStock-BasedAwards(ratherthanthetermsandconditionsoftheCompany
StockPlanandgrantagreementsunderwhichtheAssumedCompanyStock-BasedAwardswereoriginallyissued),subjecttotheforegoingsentence.Notwithstandingtheforegoing,priortothe
ClosingDate,ParentmayelecttotreatsomeorallCompanyStock-BasedAwardsthatwouldotherwisebeAssumedCompanyStock-BasedAwardsasvestedSurrenderedCompanyStockBasedAwards,whichwillbesettledinaccordancewithSection2.8(c),butthevestingofsuchCompanyStock-BasedAwardswillbefullyacceleratedpriortosuchtreatment,exceptthatthe
applicablesettlementdatemaybedelayedtotheextentrequiredbySection409AoftheCode.
(e)Parent
Actions
Related
to
Assumed
Awards
.Parentwilltakesuchactionsasarereasonablynecessary,ifany,toreserveforissuanceanumberofauthorizedbut
unissuedsharesofParentCommonStockfordeliveryuponexerciseorsettlementoftheAssumedCompanyOptionsandAssumedCompanyStock-BasedAwards.Assoonaspracticableafter
theEffectiveTime(butinnoeventlaterthanfiveBusinessDaysaftertheEffectiveTime),totheextenttheAssumedCompanyOptionsandAssumedCompanyStock-BasedAwardsarenot
alreadyregisteredbyParentundertheSecuritiesAct,ParentwillcausetobefiledwiththeSECaregistrationstatementonanappropriateform,orapost-effectiveamendmenttoaregistration
statementpreviouslyfiledundertheSecuritiesAct,withrespecttothesharesofParentCommonStocksubjecttotheAssumedCompanyOptionsandAssumedCompanyStock-BasedAwards.
ParentwillusethesamelevelofeffortsthatitusestomaintaintheeffectivenessofitsotherregistrationstatementsonFormS-8tomaintaintheeffectivenessofsuchregistrationstatementfor
solongasanyAssumedCompanyOptionsorAssumedCompanyStock-BasedAwardsremainoutstanding.
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(f)Company
Actions
.PriortotheEffectiveTime,theCompany,theCompanyBoardandthecompensationcommitteeoftheCompanyBoard,asapplicable,willadopt
anyresolutionsandtakeanyactionswithinitsauthoritywithrespecttotheCompanyStockPlansandtheawardagreementsthereunderasarereasonablynecessarytogiveeffecttothe
transactionscontemplatedbythisSection2.8,including(i)providingnoticetoeachholderofaCompanyOptionorCompanyStock-BasedAwardinaformreasonablyacceptabletoParentof
thetreatmentoftheCompanyOptionsorCompanyStock-BasedAwardssetforthinthisAgreement;and(ii)satisfyingallapplicablerequirementsofRule16b-3(e)promulgatedunderthe
ExchangeAct.TheCompanywillprovideParentwithdraftsof,andareasonableopportunitytoreviewandcommentupon(andParentsreviewanddeliveryofcommentswilloccurpromptly
aftertheCompanyprovidesParentwithsuchdraftsandtheCompanysacceptanceofParentsreasonablecommentswillnotbeunreasonablywithheld),allnotices,resolutionsandother
writtenactionsorcommunicationsasmayberequiredtogiveeffecttotheprovisionsofthisSection2.8.
(g)Payment
Procedures
.AtorpriortotheClosing,Parentwilldeposit(orcausetobedeposited)withtheCompany,bywiretransferofimmediatelyavailablefunds,
theaggregateamountowedtoholdersofSurrenderedCompanyOptionsandSurrenderedCompanyStock-BasedAwards.AspromptlyasreasonablypracticablefollowingtheClosingDate,but
innoeventlaterthanfourBusinessDaysfollowingtheClosingDate,theapplicableholdersofSurrenderedCompanyOptionsandSurrenderedCompanyStock-BasedAwardswillreceivea
paymentfromtheCompanyortheSurvivingCorporation,throughitspayrollsystemorpayrollprovider,ofallamountsrequiredtobepaidtosuchholdersinrespectofSurrenderedCompany
OptionsorSurrenderedCompanyStock-BasedAwardsthatarecancelledandconvertedpursuanttoSection2.8(a)orSection2.8(c),asapplicable.Allsuchpaymentswillbelessanyapplicable
withholdingTaxes.Notwithstandingtheforegoing,ifanypaymentowedtoaholderofSurrenderedCompanyOptionsorSurrenderedCompanyStock-BasedAwardspursuantto
Section2.8(a)orSection2.8(c),asapplicable,cannotbemadethroughtheCompanysortheSurvivingCorporationspayrollsystemorpayrollprovider,thentheSurvivingCorporationwill
issueacheckforsuchpaymenttosuchholder,whichcheckwillbesentbyovernightcouriertosuchholderpromptlyfollowingtheClosingDate(butinnoeventmorethanfiveBusinessDays
thereafter).AllsuchpaymentswillbelessanyapplicablewithholdingTaxes.
(h)Treatment
of
Employee
Stock
Purchase
Plan
.WithrespecttotheCompanys2011EmployeeStockPurchasePlan(theESPP
),assoonaspracticablefollowing
thedateofthisAgreement,theCompanyBoard(oracommitteethereof)willadoptresolutionsortakeotheractionsasmayberequiredtoprovidethateachindividualparticipatinginthe
OfferingPeriod(asdefinedintheESPP)inprogressonthedateofthisAgreementor,solelywithrespecttoclause(ii),thatcommencesafterthedateofthisAgreement,butbeforetheEffective
Time,willnotbepermittedto(i)increasehisorherpayrollcontributionratepursuanttotheESPPfromtherateineffectwhenthatOfferingPeriodcommenced;or(ii)makeseparatenonpayrollcontributionstotheESPPonorfollowingthedateofthisAgreement,exceptasmayberequiredbyapplicableLaw.PriortotheEffectiveTime,theCompanywilltakeallactionthat
maybenecessaryto,effectiveupontheconsummationoftheMerger,(A)causeanyOfferingPeriodthatwouldotherwisebeoutstandingattheEffectiveTimetobeterminatednolaterthanone
BusinessDaypriortothedateonwhichtheEffectiveTimeoccurs;(B)makeanyprorataadjustmentsthatmaybenecessarytoreflectthe
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shortenedOfferingPeriod,butotherwisetreatsuchshortenedOfferingPeriodasafullyeffectiveandcompletedOfferingPeriodforallpurposespursuanttotheESPP;(C)causetheexercise(as
ofnolaterthanoneBusinessDaypriortothedateonwhichtheEffectiveTimeoccurs)ofeachoutstandingpurchaserightpursuanttotheESPP;and(D)providethatnofurtherOfferingPeriod
orpurchaseperiodwillcommencepursuanttotheESPPaftertheEffectiveTime.Onsuchexercisedate,theCompanywillapplythefundscreditedasofsuchdatepursuanttotheESPPwithin
eachparticipantspayrollwithholdingaccounttothepurchaseofwholesharesofCompanyCommonStockinaccordancewiththetermsoftheESPP.Immediatelypriortoandeffectiveasof
theEffectiveTime(butsubjecttotheconsummationoftheMerger),theCompanywillterminatetheESPP.
2.9Surrender
of
Shares
.
(a)Paying
Agent
and
Exchange
Fund
.PriortotheEffectiveTime,ParentwillenterintoacustomaryagreementinaformreasonablyacceptabletotheCompanywitha
payingagentdesignatedbyParentandreasonablyacceptabletotheCompany(thePaying
Agent
)forthepaymentofthepershareMergerConsiderationasprovidedinSection2.7(a)(iii).
AtorpromptlyfollowingtheEffectiveTime,ParentshalldepositorcausetobedepositedwiththePayingAgentacashamountinimmediatelyavailablefundssufficientintheaggregateto
provideallfundsnecessaryforthePayingAgenttomakepaymentsinrespectofCompanyCommonStockunderSection2.7(a)(iii)(suchcashbeinghereinafterreferredtoastheExchange
Fund
)intrustforthebenefitoftheholdersoftheShares.ThePayingAgentwilldelivertheMergerConsiderationtobeissuedpursuanttoSection2.7outoftheExchangeFund.Exceptas
providedinSection2.7,theExchangeFundwillnotbeusedforanyotherpurpose.
(b)Exchange
Procedures
.
(i)Certificates
.ParentwillcausethePayingAgenttomail,assoonasreasonablypracticableaftertheEffectiveTime(butinnoeventmorethantwoBusinessDays
thereafter),toeachholderofrecordofBook-EntryShares(asdefinedbelow)oracertificateorcertificatesthatimmediatelypriortotheEffectiveTimerepresentedoutstandingsharesof
CompanyCommonStock(otherthanOwnedCompanySharesandDissentingCompanyShares)(theCertificates
)whosesharesofCompanyCommonStockwereconvertedintotheright
toreceivetheMergerConsiderationpursuanttoSection2.7,(A)aletteroftransmittal(whichwillspecifythatdeliverywillbeeffected,andriskoflossandtitletotheCertificateswillpass,
onlyupondeliveryoftheCertificatestothePayingAgentor,withrespecttoBook-EntryShares,receiptbythePayingAgentofanagentsmessageincustomaryformorsuchotherevidence
asthePayingAgentmayreasonablyrequest,andwhichletteroftransmittalwillbeincustomaryformandhavesuchotherprovisionsasParentandtheSurvivingCorporationmayreasonably
specify);and(B)instructionsforuseineffectingthesurrenderoftheCertificatesorBook-EntrySharesinexchangefortheMergerConsideration.UponsurrenderofaCertificate(oraffidavit
oflossinlieuoftheCertificateasprovidedinSection2.11)forcancellationtothePayingAgent,togetherwithsuchletteroftransmittal,dulyexecuted,andsuchotherdocumentsasmay
reasonablyberequiredbythePayingAgentinaccordancewiththetermsofsuchmaterialsandinstructions,theholderofsuchCertificatewillbeentitledtoreceiveinexchangeforthenumber
ofsharesrepresentedbysuchCertificate,and
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ParentwillcausethePayingAgenttopayanddeliverinexchangethereforaspromptlyaspracticable,inrespectofsuchCertificatetheamountofMergerConsiderationthatsuchholderis
entitledtopursuanttoSection2.7.TheCertificatesosurrenderedwillbecancelled.NointerestwillbepaidoraccrueonanycashpayableuponsurrenderofanyCertificate.
(ii)Book-Entry
Shares
.NotwithstandinganythingtothecontrarycontainedinthisAgreement,anyholderofsharesofCompanyCommonStockheldinbook-entry
form(Book-Entry
Shares
)willnotberequiredtodeliveraCertificateoranexecutedletteroftransmittaltothePayingAgenttoreceivetheMergerConsiderationthatsuchholderis
entitledtoreceivepursuanttoSection2.7.Inlieuthereof,eachholderofrecordofoneormoreBook-EntryShares(otherthanOwnedCompanySharesandDissentingCompanyShares)whose
sharesofCompanyCommonStockwereconvertedintotherighttoreceivetheMergerConsiderationwilluponreceiptofanagentsmessageincustomaryform(itbeingunderstoodthatthe
holdersofBook-EntrySharesshallbedeemedtohavesurrenderedsuchSharesuponreceiptbythePayingAgentofanagentsmessageorsuchotherevidence,ifany,asthePayingAgent
mayreasonablyrequest)attheEffectiveTimebeentitledtoreceiveforthenumberofBook-EntryShares,andParentwillcausethePayingAgenttopayanddeliveraspromptlyaspracticable
aftertheEffectiveTime,inrespectofsuchBook-EntrySharestheamountofMergerConsiderationthatsuchholderisentitledtopursuanttoSection2.7.TheBook-EntrySharesofsuchholder
willbecancelled.NointerestwillbepaidoraccrueonanycashpayableuponconversionofanyBook-EntryShares.
(c)Investment
of
Exchange
Fund
.UntildisbursedinaccordancewiththetermsandconditionsofthisAgreement,thecashintheExchangeFundwillbeinvestedbythe
PayingAgent,asdirectedbyParentortheSurvivingCorporation,in(i)obligationsoforfullyguaranteedbytheUnitedStatesoranyagencyorinstrumentalitythereofandbackedbythefull
faithandcreditoftheUnitedStateswithamaturityofnomorethan30days;(ii)commercialpaperobligationsratedA-1orP-1orbetterbyMoodysInvestorsService,Inc.orStandard&
PoorsCorporation,respectively;or(iii)certificatesofdeposit,bankrepurchaseagreementsorbankersacceptancesofcommercialbankswithcapitalexceeding$1,000,000,000(basedonthe
mostrecentfinancialstatementsofsuchbankthatarethenpubliclyavailable).NolosseswithrespecttoanyinvestmentsoftheExchangeFundwillaffecttheamountspayabletotheholdersof
CertificatesorBook-EntryShares.AnyincomefrominvestmentoftheExchangeFundwillbepayabletoParentortheSurvivingCorporation,asParentdirects.
(d)Transfers
of
Ownership
.IfatransferofownershipofsharesofCompanyCommonStockisnotregisteredinthestocktransferbooksorledgeroftheCompany,orif
theMergerConsiderationistobepaidinanameotherthanthatinwhichtheCertificatesorBook-EntrySharessurrenderedortransferredinexchangethereforareregisteredinthestock
transferbooksorledgeroftheCompany,theMergerConsiderationmaybepaidtoaPersonotherthanthePersoninwhosenametheCertificateorBook-EntrySharessosurrenderedor
transferredisregisteredinthestocktransferbooksorledgeroftheCompanyonlyifsuchCertificateisproperlyendorsedandotherwiseinproperformforsurrenderandtransferandthePerson
requestingsuchpaymenthaspaidtoParent(oranyagentdesignatedbyParent)anytransferTaxesrequiredbyreasonofthepaymentoftheMergerConsiderationtoaPersonotherthanthe
registeredholderofsuchCertificateorBook
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TableofContents
EntryShares,orestablishedtothesatisfactionofParent(oranyagentdesignatedbyParent)thatsuchtransferTaxeshavebeenpaidorareotherwisenotpayable.
(e)No
Liability
.NotwithstandinganythingtothecontrarysetforthinthisAgreement,noneofthePayingAgent,Parent,theSurvivingCorporationoranyotherParty
willbeliabletoaholderofsharesofCompanyCommonStockforanyamountproperlypaidtoapublicofficialpursuanttoanyapplicableabandonedproperty,escheatorsimilarlaw.Ifany
CertificatesorBook-EntrySharesshallnothavebeensurrenderedimmediatelypriortothedateonwhichanycashinrespectofsuchCertificateorBook-EntrySharewouldotherwiseescheatto
orbecomethepropertyofanyGovernmentalAuthority,anysuchcashinrespectofsuchCertificateorBook-EntryShareshall,totheextentpermittedbyapplicableLaw,becometheproperty
ofParent,freeandclearofallclaimsorinterestofanypersonpreviouslyentitledthereto.
(f)Distribution
of
Exchange
Fund
to
Parent
.AnyportionoftheExchangeFundthatremainsundistributedtotheholdersoftheCertificatesorBook-EntryShareson
thedatethatisoneyearaftertheEffectiveTimewillbedeliveredtoParentupondemand,andanyholdersofsharesofCompanyCommonStockthatwereissuedandoutstandingimmediately
priortotheMergerwhohavenottheretoforesurrenderedortransferredtheirCertificatesorBook-EntrySharesrepresentingsuchsharesofCompanyCommonStockforexchangepursuantto
thisSection2.9willthereafterlookforpaymentoftheMergerConsiderationpayableinrespectofthesharesofCompanyCommonStockrepresentedbysuchCertificatesorBook-EntryShares
solelytoParent(subjecttoabandonedproperty,escheatorsimilarlaws),asgeneralcreditorsthereof,foranyclaimtotheMergerConsiderationtowhichsuchholdersmaybeentitledpursuant
toSection2.7.
2.10No
Further
Ownership
Rights
in
Company
Common
Stock
.FromandaftertheEffectiveTime,(a)allsharesofCompanyCommonStockwillnolongerbeoutstandingand
willautomaticallybecancelledandceasetoexist;and(b)eachholderofaCertificateorBook-EntrySharestheretoforerepresentinganysharesofCompanyCommonStockwillceasetohave
anyrightswithrespectthereto,excepttherighttoreceivetheMergerConsiderationpayablethereforinaccordancewithSection2.7,orinthecaseofDissentingCompanyShares,therights
pursuanttoSection2.7(b).TheMergerConsiderationpaidinaccordancewiththetermsofthisArticleIIwillbedeemedtohavebeenpaidinfullsatisfactionofallrightspertainingtosuch
sharesofCompanyCommonStock.FromandaftertheEffectiveTime,therewillbenofurtherregistrationoftransfersontherecordsoftheSurvivingCorporationofsharesofCompany
CommonStockthatwereissuedandoutstandingimmediatelypriortotheEffectiveTime,otherthantransferstoreflect,inaccordancewithcustomarysettlementprocedures,tradeseffected
priortotheEffectiveTime.If,aftertheEffectiveTime,CertificatesorBook-EntrySharesarepresentedtotheSurvivingCorporationforanyreason,theywill(subjecttocompliancewiththe
exchangeproceduresofSection2.9)becancelledandexchangedasprovidedinthisArticleII.
2.11Lost,
Stolen
or
Destroyed
Certificates
.IntheeventthatanyCertificateshavebeenlost,stolenordestroyed,thePayingAgentwillissueinexchangetherefor,uponthe
makingofanaffidavitofthatfactbytheholderthereof,theMergerConsiderationpayableinrespectthereofpursuanttoSection2.7.ParentorthePayingAgentmay,initsdiscretionandasa
conditionprecedenttothepaymentofsuchMergerConsideration,requiretheownersofsuchlost,stolenor
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TableofContents
destroyedCertificatestodeliverabondinsuchamountasitmaydirectasindemnityagainstanyclaimthatmaybemadeagainstParent,theSurvivingCorporationorthePayingAgentwith
respecttotheCertificatesallegedtohavebeenlost,stolenordestroyed.
2.12Required
Withholding
.EachofthePayingAgent,Parent,theCompanyandtheSurvivingCorporation,oranySubsidiaryofParent,theCompanyortheSurviving
Corporation,willbeentitledtodeductandwithholdfromanycashamountspayablepursuanttothisAgreementtoanyholderorformerholderofsharesofCompanyCommonStock,Company
Stock-BasedAwardsorCompanyOptionssuchamountsaswillberequiredtobedeductedorwithheldtherefrompursuanttoanyTaxlaws.Totheextentthatsuchamountsaresodeductedor
withheldtheywillbe(a)paidovertotheappropriateGovernmentalAuthorityforcreditingtotheaccountofthePersonfromwhomsuchamountswerewithheld,and(b)treatedforall
purposesofthisAgreementashavingbeenpaidtothePersontowhomsuchamountswouldotherwisehavebeenpaid.
2.13Necessary
Further
Actions
.If,atanytimeaftertheEffectiveTime,anyfurtheractionisnecessaryordesirabletocarryoutthepurposesofthisAgreementandtovestthe
SurvivingCorporationwithfullright,titleandpossessiontoallassets,property,rights,privileges,powersandfranchisesoftheCompanyandMergerSub,thenthedirectorsandofficersofthe
CompanyandMergerSubasofimmediatelypriortotheEffectiveTimewilltakeallsuchlawfulandnecessaryaction.
2.14Adjustment
to
Merger
Consideration
.If,duringtheperiodbetweenthedateofthisAgreementandtheEffectiveTime,anychangeintheoutstandingsharesofCompany
CapitalStockoccursasaresultofanyreclassification,recapitalization,stocksplit(includingreversestocksplit)orcombination,exchangeorreadjustmentofshares,oranystockdividend,or
anyrecorddateforanysuchpurposeisestablished,theMergerConsiderationandanyotheramountspayablepursuanttothisAgreementwillbeappropriatelyadjusted.
ARTICLE
III
REPRESENTATIONS
AND
WARRANTIES
OF
THE
COMPANY
WithrespecttoanySectionofthisArticleIII,except(a)asdisclosedinthereports,statementsandotherdocumentsfiledbytheCompanywiththeSECorfurnishedbytheCompany
totheSEC,ineachcasepursuanttotheExchangeActonorafterJanuary1,2015,andpriortothedateofthisAgreement(otherthananydisclosurescontainedorreferencedthereinunderthe
captionsRiskFactors,Forward-LookingStatements,QuantitativeandQualitativeDisclosuresAboutMarketRiskandanyotherdisclosurescontainedorreferencedthereinof
information,factorsorrisksthatarepredictive,cautionaryorforward-lookinginnature)(theCompany
Recent
SEC
Reports
)(itbeingunderstoodthat(i)anymatterdisclosedinany
CompanyRecentSECReportwillbedeemedtobedisclosedinasectionoftheCompanyDisclosureLetteronlytotheextentthatitisreasonablyapparentfromsuchdisclosureinsuch
CompanyRecentSECReportthatitisapplicabletosuchsectionoftheCompanyDisclosureLetterand(ii)thisclause(a)willnotapplytoanyofSection3.2,Section3.3,Section3.4,
Section3.7andthesecondsentenceofSection3.12(a));or(b)assetforthintheCompanyDisclosureLetter,theCompanyherebyrepresentsandwarrantstoParentandMergerSubasfollows:
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TableofContents
3.1Organization;
Good
Standing
.TheCompany(a)isacorporationdulyorganized,validlyexistingandingoodstandingpursuanttotheDGCL;and(b)hastherequisite
corporatepowerandauthoritytoconductitsbusinessasitispresentlybeingconductedandtoown,leaseoroperateitsproperties,rightsandassets.TheCompanyisdulyqualifiedtodo
businessandisingoodstandingineachjurisdictionwherethecharacterofitsproperties,rightsandassetsownedorleasedorthenatureofitsactivitiesmakesuchqualificationnecessary(to
theextentthattheconceptofgoodstandingisapplicableinthecaseofanyjurisdictionoutsidetheUnitedStates),exceptwherethefailuretobesoqualifiedoringoodstandingwouldnot
haveaCompanyMaterialAdverseEffect.TheCompanyhasmadeavailabletoParenttrue,correctandcompletecopiesoftheAmendedandRestatedCertificateofIncorporationofthe
Company(theCharter
)andtheAmendedandRestatedBylawsoftheCompany(theBylaws
),eachasamendedtodate.TheCharterandBylawsareinfullforceandeffectonthedateof
thisAgreement.TheCompanyisnotinviolationoftheCharterortheBylaws.
3.2Corporate
Power;
Enforceability
.TheCompanyhastherequisitecorporatepowerandauthorityto(a)executeanddeliverthisAgreement;(b)performitscovenantsand
obligationshereunder;and(c)subjecttoreceivingtheRequisiteStockholderApproval,consummatetheMerger.TheexecutionanddeliveryofthisAgreementbytheCompany,the
performancebytheCompanyofitscovenantsandobligationshereunder,andtheconsummationoftheMergerhavebeendulyauthorizedbyallnecessarycorporateactiononthepartofthe
CompanyandnoadditionalcorporateactionsonthepartoftheCompanyarenecessarytoauthorize(i)theexecutionanddeliveryofthisAgreementbytheCompany;(ii)theperformanceby
theCompanyofitscovenantsandobligationshereunder;or(iii)subjecttothereceiptoftheRequisiteStockholderApproval,theconsummationoftheMerger.ThisAgreementhasbeenduly
executedanddeliveredbytheCompanyand,assumingthedueauthorization,executionanddeliverybyParentandMergerSub,constitutesalegal,validandbindingobligationofthe
Company,enforceableagainsttheCompanyinaccordancewithitsterms,exceptassuchenforceability(A)maybelimitedbyapplicablebankruptcy,insolvency,reorganization,moratorium
andothersimilarLawsaffectingorrelatingtocreditorsrightsgenerally;and(B)issubjecttogeneralprinciplesofequity.
3.3Company
Board
Approval;
Fairness
Opinion;
Anti-Takeover
Laws
.
(a)Company
Board
Approval
.TheCompanyBoardhas(i)determinedthatitisinthebestinterestsoftheCompanyanditsstockholders,anddeclareditadvisable,to
enterintothisAgreementandconsummatetheMergeruponthetermsandsubjecttotheconditionssetforthherein;(ii)approvedtheexecutionanddeliveryofthisAgreementbytheCompany,
theperformancebytheCompanyofitscovenantsandotherobligationshereunder,andtheconsummationoftheMergeruponthetermsandconditionssetforthherein;(iii)directedthatthe
adoptionofthisAgreementbesubmittedtoavoteatameetingofthestockholdersoftheCompanyand(iv)resolvedtorecommendthattheCompanyStockholdersvoteinfavorofadoptionof
thisAgreementinaccordancewiththeDGCL(collectively,theCompany
Board
Recommendation
).
(b)Fairness
Opinion
.TheCompanyBoardhasreceivedthewrittenopinion(oranoralopiniontobeconfirmedinwriting)ofitsfinancialadvisor,QatalystPartnersLP
(theAdvisor
),totheeffectthat,asofthedateofsuchopinionandbaseduponandsubjecttothe
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variousqualificationsandassumptionssetforththerein,theconsiderationtobereceivedbytheholdersofsharesofCompanyClassACommonStock,intheircapacityasholdersofCompany
ClassACommonStock(otherthanParentoranyAffiliateofParent,ifapplicable),pursuanttothisAgreementisfairfromafinancialpointofviewtosuchholders(itbeingunderstoodand
agreedthatsuchwrittenopinionisforthebenefitoftheCompanyBoardandmaynotberelieduponbyParentorMergerSub).PromptlyafterthedateofthisAgreement,theCompanywill
deliveracopyofsuchopiniontoParentforinformationpurposesonly.
(c)Anti-Takeover
Laws
.AssumingthattherepresentationsofParentandMergerSubsetforthinSection4.6aretrueandcorrect,theCompanyBoardhastakenall
necessaryactionssothattherestrictionsonbusinesscombinationssetforthinSection203oftheDGCLandanyothersimilarapplicableanti-takeoverLawwillnotbeapplicabletothis
AgreementortheMerger.Nootherfairprice,moratorium,controlshareacquisitionorothersimilarantitakeoverstatuteorregulationenactedunderanyLawsapplicabletotheCompany
oranyofitsSubsidiariesisapplicabletothisAgreementortheMerger.
3.4Requisite
Stockholder
Approval
.AssumingthattherepresentationsofParentandMergerSubsetforthinSection4.6(b)aretrueandcorrect,theaffirmativevoteofthe
holdersofamajorityofthevotingpoweroftheoutstandingsharesofCompanyCommonStockentitledtovotetoadoptthisAgreement(theRequisite
Stockholder
Approval
)istheonly
voteoftheholdersofanyclassorseriesofCompanyCapitalStockthatisnecessarypursuanttoapplicableLaw,theCharterortheBylawstoconsummatetheMerger.
3.5Non-Contravention
.TheexecutionanddeliveryofthisAgreementbytheCompany,theperformancebytheCompanyofitscovenantsandobligationshereunder,andthe
consummationoftheMergerdonot(a)violateorconflictwithanyprovisionoftheCharterortheBylawsortheequivalentorganizationalorgoverningdocumentsofanysignificant
subsidiaryoftheCompany(asdefinedinRule1-02(w)ofRegulationS-XpromulgatedbytheSEC);(b)violateorconflictwithanyprovisionoftheorganizationalorgoverningdocumentsof
anySubsidiaryoftheCompanythatisnotasignificantsubsidiary(asdefinedinRule1-02(w)ofRegulationS-XpromulgatedbytheSEC)oftheCompany;(c)violate,conflictwith,resultin
thebreachof,constituteadefault(oraneventthat,withnoticeorlapseoftimeorboth,wouldbecomeadefault)pursuantto,resultintheterminationof,acceleratetheperformancerequiredby,
orresultinarightofterminationoraccelerationpursuanttoanyMaterialContract;(d)assumingcompliancewiththemattersreferredtoinSection3.6and,inthecaseoftheconsummationof
theMerger,subjecttoobtainingtheRequisiteStockholderApproval,violateorconflictwithanyLawapplicabletotheCompanyoranyofitsSubsidiariesorbywhichanyoftheirrespective
properties,rightsorassetsarebound;or(e)resultinthecreationofanyLien(otherthanPermittedLiens)uponanyofthepropertiesorassetsoftheCompanyoranyofitsSubsidiaries,except
inthecaseofeachofclauses(b),(c),(d)and(e)forsuchviolations,conflicts,breaches,defaults,terminations,accelerationsorLiensthatwouldnothaveaCompanyMaterialAdverseEffect.
3.6Requisite
Governmental
Approvals
.Noconsent,approval,orderorauthorizationof,filingorregistrationwith,ornotificationto(anyoftheforegoing,aConsent
)any
GovernmentalAuthorityisrequiredonthepartoftheCompanyinconnectionwiththe(a)executionanddelivery
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ofthisAgreementbytheCompany;(b)performancebytheCompanyofitscovenantsandobligationspursuanttothisAgreement;or(c)consummationoftheMerger,except(i)thefilingofthe
CertificateofMergerwiththeSecretaryofStateoftheStateofDelaware;(ii)suchfilingsandapprovalsasmayberequiredbyanyfederalorstatesecuritiesLaws,includingcompliancewith
anyapplicablerequirementsoftheExchangeAct;(iii)compliancewithanyapplicablerequirementsoftheHSRActandanyapplicableforeignAntitrustLawssetforthonSection7.1(b)ofthe
CompanyDisclosureLetter;(iv)therulesofNYSE;and(v)suchotherConsentsthefailureofwhichtoobtainwouldnothaveaCompanyMaterialAdverseEffect.
3.7Company
Capitalization
.
(a)Capital
Stock
.TheauthorizedcapitalstockoftheCompanyconsistsof(i)1,120,000,000sharesofCompanyCommonStock,1,000,000,000ofwhichare
designatedCompanyClassACommonStockand120,000,000ofwhicharedesignatedCompanyClassBCommonStock;(ii)1,000,000,000sharesofcommonstock,parvalue$0.0001per
share(theCommon
Stock
);and(iii)100,000,000sharesofCompanyPreferredStock.Asof5:00p.m.,Pacifictime,onMay31,2016(suchtimeanddate,theCapitalization
Date
),
(A)119,129,665sharesofCompanyClassACommonStockwereissuedandoutstanding;(B)15,559,383sharesofCompanyClassBCommonStockwereissuedandoutstanding;(C)no
sharesofCommonStockorCompanyPreferredStockwereissuedandoutstanding;and(D)themaximumnumberofsharesofCompanyCommonStocksubjecttoissuancepursuantto
outstandingConvertibleNotestotheextentconvertedinaccordancewiththeirtermsandgivingeffecttothetransactionscontemplatedbythisAgreementis4,490,020;(E)themaximum
numberofsharesofCommonStocksubjecttoissuancepursuanttooutstandingWarrantstotheextentexercisedinaccordancewiththeirtermsandgivingeffecttothetransactions
contemplatedbythisAgreementis8,980,040;and(F)26,168sharesofCompanyClassACommonStockand1,007,876sharesofCompanyClassBCommonStockwereheldbytheCompany
astreasuryshares.
(b)AlloutstandingsharesofCompanyCommonStockarevalidlyissued,fullypaid,nonassessableandfreeofanypreemptiverights.Sincethecloseofbusinessonthe
CapitalizationDateuntilthedateofthisAgreement,theCompanyhasnotissuedorgrantedanyCompanySecuritiesotherthanpursuanttotheexercise,vestingorsettlementofCompany
Stock-BasedAwardsorCompanyOptionsgrantedpriortothedateofthisAgreement.
(c)Stock
Reservation
.AsoftheCapitalizationDate,theCompanyhasreserved(i)17,987,506sharesofCompanyCommonStockforissuancepursuanttothe
CompanyStockPlans;(ii)4,490,020sharesofCompanyClassACommonStockasmayfromtimetotimebeissuableuponconversionoftheConvertibleNotes;and(iii)8,980,040sharesof
CompanyClassACommonStockissuablepursuanttotheWarrants.AsoftheCapitalizationDate,therewereoutstanding(i)CompanyStock-BasedAwardsrepresentingtherighttoreceiveup
to7,621,996sharesofCompanyCommonStock;and(ii)CompanyOptionstoacquire2,472,254sharesofCompanyCommonStock.
(d)Company
Securities
.ExceptassetforthinthisSection3.7,asoftheCapitalizationDatetherewere(i)otherthantheCompanyCapitalStock,nooutstandingshares
of
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capitalstockof,orotherequityorvotinginterestin,theCompany;(ii)otherthantheConvertibleNotesandtheWarrants,nooutstandingsecuritiesoftheCompanyconvertibleintoor
exchangeableforsharesofcapitalstockof,orotherequityorvotinginterestin,theCompany;(iii)otherthantheConvertibleNotesandtheWarrants,nooutstandingoptions,warrantsorother
rightsorbindingarrangementstoacquirefromtheCompany,orthatobligatetheCompanytoissueorsell,anycapitalstockof,orotherequityorvotinginterestin,oranysecuritiesconvertible
intoorexchangeableforsharesofcapitalstockof,orotherequityorvotinginterestin,theCompany;(iv)noobligationsoftheCompanytogrant,extendorenterintoanysubscription,warrant,
right,convertibleorexchangeablesecurity,orothersimilarContractrelatingtoanycapitalstockof,orotherequityorvotinginterest(includinganyvotingdebt)in,theCompany;(v)no
outstandingrestrictedshares,restrictedshareunits,stockappreciationrights,performanceshares,contingentvaluerights,phantomstockorsimilarsecuritiesorrightsthatarederivativeof,or
provideeconomicbenefitsbased,directlyorindirectly,onthevalueorpriceof,anycapitalstockof,orothersecuritiesorownershipinterestsin,theCompany(theitemsinclauses(i),(ii),(iii),
(iv)and(v),collectivelywiththeCompanyCapitalStock,theCompany
Securities
);(vi)votingtrusts,proxiesorsimilararrangementsorunderstandingstowhichtheCompanyisapartyor
bywhichtheCompanyisboundwithrespecttothevotingofanysharesofcapitalstockof,orotherequityorvotinginterestin,theCompany;(vii)obligationsorbindingcommitmentsofany
characterrestrictingthetransferofanysharesofcapitalstockof,orotherequityorvotinginterestin,theCompanytowhichtheCompanyisapartyorbywhichitisbound;and(viii)noother
obligationsbytheCompanytomakeanypaymentsbasedonthepriceorvalueofanyCompanySecurities.TheCompanyisnotapartytoanyContractthatobligatesittorepurchase,redeemor
otherwiseacquireanyCompanySecurities.TherearenoaccruedandunpaiddividendswithrespecttoanyoutstandingsharesofCompanyCapitalStock.TheCompanydoesnothavea
stockholderrightsplanineffect.Section3.7(d)oftheCompanyDisclosureLettercontainsacorrectandcompletelistofoutstandingCompanyOptions(otherthanpursuanttotheESPP)and
CompanyStock-BasedAwards,includingtheholder,thelocationofemploymentofanyholderthatisacurrentemployeeoftheCompanyasreflectedinthecurrentrecordsoftheCompany,
theCompanyStockPlanunderwhichtheawardwasgranted,thedateofgrant,term(forCompanyOptions),whereapplicable,numberofsharesofCompanyCommonStockunderlyingsuch
CompanySecurityand,whereapplicable,exercisepriceandvestingschedule.Section1.1(u)oftheCompanyDisclosureLettercontainsacorrectandcompletelistofeachCompanyStock
Plan.EachCompanyOption(otherthanpursuanttotheESPP)(x)wasgrantedwithanexercisepricepershareequaltoorgreaterthanthefairmarketvalueofashareofCompanyCommon
Stockontheeffectivedateofsuchgrant,and(y)hasagrantdateidenticaltothegrantdateapprovedbytheCompanyBoardorthecompensationcommitteeoftheCompanyBoard,whichis
eitherthedateonwhichtheCompanyOptionwasawardedoralaterdatespecifiedbytheCompanyBoardorthecompensationcommitteeoftheCompanyBoard.TheCompanydoesnothave
outstandinganybonds,debentures,notesorotherobligationstheholdersofwhichhavetherighttovote(or,otherthantheConvertibleNotesandtheWarrants,convertibleintoorexercisable
forsecuritieshavingtherighttovote)withtheCompanyStockholdersonanymatter.NoSubsidiaryoftheCompanyownsanysharesofCompanyCommonStock.
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(e)Other
Rights
.TheCompanyisnotapartytoanyContractrelatingtothevotingof,requiringregistrationof,orgrantinganypreemptiverights,anti-dilutiverightsor
rightsoffirstrefusalorothersimilarrightswithrespecttoanyCompanySecurities.
3.8Subsidiaries
.
(a)Subsidiaries
.Section3.8(a)oftheCompanyDisclosureLettercontainsatrue,correctandcompletelistofthenameandjurisdictionoforganizationofeach
SubsidiaryoftheCompany.EachSubsidiaryoftheCompany(i)isdulyorganized,validlyexistingandingoodstandingpursuanttotheLawsofitsjurisdictionoforganization(totheextent
thattheconceptofgoodstandingisapplicableinthecaseofanyjurisdictionoutsidetheUnitedStates);and(ii)hastherequisitecorporatepowerandauthoritytocarryonitsrespective
businessasitispresentlybeingconductedandtoown,leaseoroperateitsrespectivepropertiesandassets,exceptwherethefailuretobeingoodstandingwouldnothaveaCompanyMaterial
AdverseEffect.EachSubsidiaryoftheCompanyisdulyqualifiedtodobusinessandisingoodstandingineachjurisdictionwherethecharacterofitspropertiesownedorleasedorthenature
ofitsactivitiesmakesuchqualificationnecessary(totheextentthattheconceptofgoodstandingisapplicableinthecaseofanyjurisdictionoutsidetheUnitedStates),exceptwherethe
failuretobesoqualifiedoringoodstandingwouldnothaveaCompanyMaterialAdverseEffect.TheCompanyhasmadeavailabletoParenttrue,correctandcompletecopiesofthe
certificatesofincorporation,bylawsandothersimilarorganizationaldocumentsofeachsignificantsubsidiary(asdefinedinRule1-02(w)ofRegulationS-XpromulgatedbytheSEC)ofthe
Company,eachasamendedtodate.NoSubsidiaryoftheCompanyisinviolationofitscharter,bylawsorothersimilarorganizationaldocuments,exceptforsuchviolationsthatwouldnothave
aCompanyMaterialAdverseEffect.
(b)Capital
Stock
of
Subsidiaries
.Alloftheoutstandingcapitalstockof,orotherequityorvotinginterestin,eachSubsidiaryoftheCompany(i)hasbeenduly
authorized,validlyissuedandisfullypaidandnonassessable;and(ii)exceptfordirectorsqualifyingorsimilarsharesasindicatedonSection3.8(b)oftheCompanyDisclosureLetter,is
owned,directlyorindirectly,bytheCompany,freeandclearofallLiens(otherthanPermittedLiens)andanyotherrestriction(includinganyrestrictionontherighttovote,sellorotherwise
disposeofsuchcapitalstockorotherequityorvotinginterest)thatwouldpreventsuchSubsidiaryfromconductingitsbusinessasoftheEffectiveTimeinsubstantiallythesamemannerthat
suchbusinessisconductedonthedateofthisAgreement.
(c)Other
Securities
of
Subsidiaries
.Therearenooutstanding(i)securitiesconvertibleintoorexchangeableforsharesofcapitalstockof,orotherequityorvoting
interestin,anySubsidiaryoftheCompany;(ii)options,warrantsorotherrightsorarrangementsobligatingtheCompanyoranyofitsSubsidiariestoacquirefromanySubsidiaryofthe
Company,orthatobligateanySubsidiaryoftheCompanytoissue,anycapitalstockof,orotherequityorvotinginterestin,oranysecuritiesconvertibleintoorexchangeablefor,sharesof
capitalstockof,orotherequityorvotinginterestin,anySubsidiaryoftheCompany;or(iii)obligationsofanySubsidiaryoftheCompanytogrant,extendorenterintoanysubscription,
warrant,right,convertibleorexchangeablesecurity,orothersimilarContractrelatingtoanycapitalstockof,orotherequityorvotinginterest
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(includinganyvotingdebt)in,suchSubsidiarytoanyPersonotherthantheCompanyoroneofitsSubsidiaries.
(d)Other
Equity
Interests
.Otherthanfor(i)thecapitalstockofitsSubsidiariesand(ii)equityinterestsheldaspassiveinvestmentsaspartoftheCompanyscash
managementorcompensationprograms,theCompanydoesnotownanyequityorvotinginterestinanyotherPerson.
3.9Company
SEC
Reports
.SinceJanuary1,2013,theCompanyhasfiledallforms,reportsanddocumentswiththeSECthathavebeenrequiredtobefiledbyitpursuantto
applicableLawspriortothedateofthisAgreement(theCompany
SEC
Reports
).EachCompanySECReportcomplied,asofitsfilingdate,or,ifamendedorsupersededbyasubsequent
filingmadepriortothedateofthisAgreement,asofthedateofthelastsuchamendmentorsupersedingfilingpriortothedateofthisAgreement,inallmaterialrespectswiththeapplicable
requirementsoftheSecuritiesAct,theExchangeActandtheSarbanes-OxleyAct,asthecasemaybe,andtheapplicablerulesandregulationspromulgatedthereunder,eachasineffectonthe
datethatsuchCompanySECReportwasfiled.True,correctandcompletecopiesofallCompanySECReportsarepubliclyavailableintheElectronicDataGathering,AnalysisandRetrieval
databaseoftheSEC.Asofitsfilingdate(or,ifamendedorsupersededbyafilingpriortothedateofthisAgreement,onthedateofsuchamendedorsupersededfiling),eachCompanySEC
Reportdidnotcontainanyuntruestatementofamaterialfactoromittostateanymaterialfactnecessaryinordertomakethestatementsmadetherein,inthelightofthecircumstancesunder
whichtheyweremade,notmisleading.NoSubsidiaryoftheCompanyisrequiredtofileanyforms,reportsordocumentswiththeSEC.
3.10Company
Financial
Statements;
Internal
Controls;
Indebtedness
.
(a)Company
Financial
Statements
.TheconsolidatedfinancialstatementsoftheCompanyanditsSubsidiaries(includingallnotesthereto)filedwiththeCompany
SECReports(i)werepreparedinaccordancewithGAAP(exceptasmaybeindicatedinthenotestheretoorasotherwisepermittedbyForm10-Qwithrespecttoanyfinancialstatementsfiled
onForm10-Q);and(ii)fairlypresent,inallmaterialrespects,theconsolidatedfinancialpositionoftheCompanyanditsSubsidiariesasofthedatesthereofandtheconsolidatedresultsof
operationsandcashflowsandstockholdersequityfortheperiodsthenended.ExceptashavebeendescribedintheCompanySECReports,therearenounconsolidatedSubsidiariesofthe
Companyoranyoff-balancesheetarrangementsofthetyperequiredtobedisclosedpursuanttoItem303(a)(4)ofRegulationS-KpromulgatedbytheSEC.
(b)Disclosure
Controls
and
Procedures
.TheCompanyhasestablishedandmaintainsdisclosurecontrolsandproceduresandinternalcontroloverfinancial
reporting(ineachcaseasdefinedpursuanttoRule13a-15andRule15d-15promulgatedundertheExchangeAct).TheCompanysdisclosurecontrolsandproceduresarereasonablydesigned
toensurethatall(i)materialinformationrequiredtobedisclosedbytheCompanyinthereportsthatitfilesorfurnishespursuanttotheExchangeActisrecorded,processed,summarizedand
reportedwithinthetimeperiodsspecifiedintherulesandformsoftheSEC;and(ii)suchmaterialinformationisaccumulatedandcommunicatedtotheCompanysmanagementasappropriate
toallowtimely
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decisionsregardingrequireddisclosureandtomakethecertificationsrequiredpursuanttoSections302and906oftheSarbanes-OxleyAct.TheCompanysmanagementhascompletedan
assessmentoftheeffectivenessoftheCompanysinternalcontroloverfinancialreportingincompliancewiththerequirementsofSection404oftheSarbanes-OxleyActforthefiscalyear
endedDecember31,2015,andsuchassessmentconcludedthatsuchsystemwaseffective.TheCompanysindependentregisteredpublicaccountanthasissued(andnotsubsequentlywithdrawn
orqualified)anattestationreportconcludingthattheCompanymaintainedeffectiveinternalcontroloverfinancialreportingasofDecember31,2015.SinceDecember31,2015andthroughthe
dateofthisAgreement,totheKnowledgeoftheCompany,noevents,factsorcircumstanceshaveoccurredsuchthatmanagementwouldnotbeabletocompleteitsassessmentofthe
effectivenessoftheCompanysinternalcontroloverfinancialreportingincompliancewiththerequirementsofSection404oftheSarbanes-OxleyActforthefiscalyearendingDecember31,
2015,andconclude,aftersuchassessment,thatsuchsystemwaseffective.SinceJanuary1,2013,theprincipalexecutiveofficerandprincipalfinancialofficeroftheCompanyhavemadeall
certificationsrequiredbytheSarbanes-OxleyAct.NeithertheCompanynoritsprincipalexecutiveofficerorprincipalfinancialofficerhasreceivednoticefromanyGovernmentalAuthority
challengingorquestioningtheaccuracy,completeness,formormanneroffilingofsuchcertifications.
(c)Internal
Controls
.TheCompanyhasestablishedandmaintainsasystemofinternalaccountingcontrolsthatareeffectiveinprovidingreasonableassurance
regardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsinaccordancewithGAAP,includingpoliciesandproceduresthat(i)requirethemaintenanceofrecords
thatinreasonabledetailaccuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsoftheCompanyanditsSubsidiaries;(ii)providereasonableassurancethattransactionsare
recordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithGAAPandthatreceiptsandexpendituresoftheCompanyanditsSubsidiariesarebeingmadeonlyin
accordancewithappropriateauthorizationsoftheCompanysmanagementandtheCompanyBoard;and(iii)provideassuranceregardingpreventionortimelydetectionofunauthorized
acquisition,useordispositionoftheassetsoftheCompanyanditsSubsidiaries.NeithertheCompanynor,totheKnowledgeoftheCompany,theCompanysindependentregisteredpublic
accountingfirmhasidentifiedorbeenmadeawareof(A)anysignificantdeficiencyormaterialweakness(eachasdefinedinRule13a-15(f)oftheExchangeAct)inthesystemofinternal
controloverfinancialreportingutilizedbytheCompanyanditsSubsidiariesthathasnotbeensubsequentlyremediated;or(B)anyfraudthatinvolvestheCompanysmanagementorother
employeeswhohavearoleinthepreparationoffinancialstatementsortheinternalcontroloverfinancialreportingutilizedbytheCompanyanditsSubsidiaries.
(d)Indebtedness
.Section3.10(d)oftheCompanyDisclosureLettercontainsatrue,correctandcompletelistofallIndebtednessoftheCompanyanditsSubsidiariesas
ofthedateofthisAgreement,otherthanIndebtednessreflectedintheAuditedCompanyBalanceSheet.
3.11No
Undisclosed
Liabilities
.NeithertheCompanynoranyofitsSubsidiarieshasanyliabilitiesofanaturerequiredtobereflectedorreservedagainstonabalancesheet
preparedinaccordancewithGAAP,otherthanliabilities(a)reflectedorotherwisereservedagainstintheAuditedCompanyBalanceSheetorintheconsolidatedbalancesheets(andthenotes
thereto)ofthe
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CompanyanditsconsolidatedSubsidiariessetforthintheCompanysQuarterlyReportsonForm10-QfiledbytheCompanywiththeSECsincethedateoftheAuditedCompanyBalance
SheetandpriortothedateofthisAgreement;(b)arisingpursuanttothisAgreementorincurredinconnectionwiththeMerger;(c)incurredintheordinarycourseofbusinesssince
December31,2015;or(d)thatwouldnothaveaCompanyMaterialAdverseEffect.
3.12Absence
of
Certain
Changes
.
(a)No
Company
Material
Adverse
Effect
.SinceJanuary1,2016throughthedateofthisAgreement,thebusinessoftheCompanyanditsSubsidiarieshasbeen
conducted,inallmaterialrespects,intheordinarycourseofbusiness.SincethedateoftheAuditedCompanyBalanceSheetthroughthedateofthisAgreement,therehasnotoccurreda
CompanyMaterialAdverseEffect.
(b)Forbearance
.SinceJanuary1,2016throughthedateofthisAgreement,theCompanyhasnottakenanyactionthatwouldbeprohibitedbySection5.2iftakenor
proposedtobetakenafterthedateofthisAgreement.
3.13Material
Contracts
.
(a)List
of
Material
Contracts
.Section3.13(a)oftheCompanyDisclosureLettercontainsatrue,correctandcompletelistofallMaterialContractstoorbywhichthe
CompanyoranyofitsSubsidiariesisapartyorisbound(otherthananyMaterialContractscontemplatedbyclause(i)ofthedefinitionofMaterialContractandanyMaterialContractslistedin
Section3.18(a)oftheCompanyDisclosureLetter).AcopyofeachMaterialContractsetforthinSection3.13(a)oftheCompanyDisclosureLetterhasbeenmadeavailabletoParentpriorto
thedateofthisAgreement.
(b)Validity
.EachMaterialContractisvalidandbindingontheCompanyoreachsuchSubsidiaryoftheCompanypartythereto,enforceableinaccordancewithits
termsandisinfullforceandeffect,andnoneoftheCompany,anyofitsSubsidiariespartytheretoor,totheKnowledgeoftheCompany,anyotherpartytheretoisorisallegedtobeinbreach
ofordefaultpursuanttoanysuchMaterialContract,exceptforsuchfailurestobeinfullforceandeffectthatwouldnothaveaCompanyMaterialAdverseEffect.Noeventhasoccurredthat,
withnoticeorlapseoftimeorboth,wouldconstitutesuchabreachordefaultpursuanttoanyMaterialContractbytheCompanyoranyofitsSubsidiaries,or,totheKnowledgeofthe
Company,anyotherpartythereto,exceptforsuchbreachesanddefaultsthatwouldnothaveaCompanyMaterialAdverseEffect.AsofthedateofthisAgreement,neithertheCompanynor
anyofitsSubsidiarieshavereceivedwrittennoticefromanyotherpartytoaMaterialContractthatsuchotherpartyintendstoterminate,notrenew,orrenegotiateinanymaterialrespectsthe
termsofanysuchMaterialContract,exceptforsuchnoticestoterminate,notrenew,orrenegotiatewithrespecttomattersthatwouldnothaveaCompanyMaterialAdverseEffect.
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3.14Real
Property
.
(a)Owned
Real
Property
.Section3.14(a)oftheCompanyDisclosureLettercontainsatrue,correctandcompletelist,asofthedateofthisAgreement,ofallofthereal
propertyandinterestsinrealpropertyownedbytheCompanyanditsSubsidiariesasofthedateofthisAgreement(togetherwillallbuildings,improvementsandfixtureslocatedthereonand
appurtenancesthereto,theOwned
Real
Property
).ExceptaswouldnothaveaCompanyMaterialAdverseEffecttheCompanyoroneofitsSubsidiarieshasgoodandvalidtitletoallof
theOwnedRealProperty,freeandclearofallLiens(otherthanPermittedLiens).
(b)Leased
Real
Property
.Section3.14(b)oftheCompanyDisclosureLettercontainsatrue,correctandcompletelist,asofthedateofthisAgreement,ofallofthe
existingleases,subleases,licensesorotheragreementspursuanttowhichtheCompanyoranyofitsSubsidiariesusesoroccupies,orhastherighttouseoroccupy,noworinthefuture,anyreal
propertyinexcessof100,000squarefeetorsubjecttofuturepaymentobligationsintheaggregateinexcessof$10,000,000(suchproperty,theLeased
Real
Property
,andeachsuchlease,
sublease,licenseorotheragreement,aLease
).WithrespecttoeachLeaseandexceptaswouldnothaveaCompanyMaterialAdverseEffect,(i)theCompanyoroneofitsSubsidiarieshas
notcollaterallyassignedorgrantedanyothersecurityinterestinsuchLeaseoranyinteresttherein;and(ii)theCompanyoroneofitsSubsidiarieshasvalidleaseholdestatesintheLeasedReal
Property,freeandclearofallLiens(otherthanPermittedLiens).
(c)Subleases
.Section3.14(c)oftheCompanyDisclosureLettercontainsatrue,correctandcompletelistofalloftheexistingsubleases,licensesorsimilaragreements
inexcessof50,000squarefeet(each,aSublease
)grantingtoanyPerson,otherthantheCompanyoranyofitsSubsidiaries,anyrighttouseoroccupy,noworinthefuturetheOwnedReal
PropertyortheLeasedRealProperty.WithrespecttoeachoftheSubleases,eachSubleaseisvalidandbindingontheCompanyoreachsuchSubsidiaryoftheCompanypartythereto
enforceableinaccordancewithitstermsandisinfullforceandeffect,andnoneoftheCompany,anyofitsSubsidiariespartytheretoor,totheKnowledgeoftheCompany,anyotherparty
theretoisinbreachofordefaultpursuanttoanysuchSublease,exceptforsuchfailurestobeinfullforceandeffectthatwouldnothave,orreasonablybeexpectedtohaveaCompanyMaterial
AdverseEffect.
(d)TotheKnowledgeoftheCompany,thereisnopendingorthreatened,appropriation,condemnationorsimilarproceedingaffectingtheOwnedRealPropertyor
LeasedRealPropertyoranypartthereoforinterestthereinorofanysaleorotherdispositionoftheLeasedRealPropertyoranypartthereoforinterestthereininlieuofcondemnation.
3.15Environmental
Matters
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,neithertheCompanynoranyofitsSubsidiaries(a)hasreceivedanywrittennotice
allegingthattheCompanyoranySubsidiaryhasviolatedanyEnvironmentalLaworisliableunderanyEnvironmentalLaworregardingHazardousSubstances;(b)hastransported,produced,
processed,manufactured,generated,used,treated,handled,stored,releasedordisposedoforarrangedfordisposalanyHazardousSubstancesinviolationoforinamannerthatwould
reasonablybeexpectedtoresultinliabilityunderanyapplicableEnvironmentalLaw,andtotheKnowledgeoftheCompany
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asofthedateofthisAgreement,HazardousSubstancesarenototherwisepresentatoraffectinganyoftheOwnedRealPropertyorLeasedRealPropertyinamountsorcircumstancesthat
wouldreasonablybeexpectedtorequiretheCompanyoranyofitsSubsidiariestoundertakeanyinvestigationorcorrectiveorremedialactionunderanyapplicableEnvironmentalLaw,orto
giverisetoanyclaimagainstorinterferewiththeoperationsoftheCompanyoranyofitsSubsidiaries;(c)hasexposedanyemployeeoranyotherPersontoHazardousSubstancesinviolation,
orinamannerthatwouldreasonablybeexpectedtoresultinliabilityunder,ofanyapplicableEnvironmentalLaw;or(d)isapartytooristhesubjectofanypendingor,totheKnowledgeof
theCompanyasofthedateofthisAgreement,threatenedLegalProceeding(i)allegingthenoncompliancebytheCompanyoranyofitsSubsidiarieswithanyEnvironmentalLaw;or
(ii)seekingtoimposeanyfinancialresponsibilityforanyinvestigation,cleanup,removalorremediationpursuanttoanyEnvironmentalLaworregardingHazardousSubstances;or(e)has
assumedorretainedbycontractor,totheKnowledgeoftheCompanyasofthedateofthisAgreement,byoperationoflaw,anyliabilityunderEnvironmentalLaworregardingHazardous
Substances.
3.16Intellectual
Property
.
(a)Registered
Intellectual
Property;
Proceedings
.Section3.16(a)oftheCompanyDisclosureLettersetsforthatrue,correctandcompletelistasofthedateofthis
AgreementofallmaterialitemsofCompanyRegisteredIntellectualProperty.TheCompanyhasmaintainedallmaterialitemsofCompanyRegisteredIntellectualPropertyintheordinary
courseconsistentwithreasonablebusinesspractices,andtotheKnowledgeoftheCompany,suchitemsarenotinvalidorunenforceable.NoneofthematerialCompanyRegisteredIntellectual
PropertyisjointlyownedwithanythirdPerson,andtheCompanyoroneofitsSubsidiariesarethesoleownersofthematerialCompanyRegisteredIntellectualProperty,freeandclearofall
LiensotherthanPermittedLiens.
(b)No
Order
.NomaterialCompanyIntellectualPropertyissubjecttoanyLegalProceedingoroutstandingordertowhichtheCompanyoritsSubsidiariesarebound,
includingrestrictinginanymannertheuse,transfer,orlicensingthereofbytheCompanyoranyofitsSubsidiariesofsuchCompanyIntellectualPropertyoranyoftheCompanysproducts.
(c)IP
Contracts
.Section3.16(c)oftheCompanyDisclosureLettersetsforthatrue,correctandcompletelistofallmaterialContractstowhichtheCompanyoranyof
itsSubsidiariesisaparty(i)withrespecttoCompanyIntellectualPropertythatislicensed,ortowhichrightsaregrantedortransferredtoanythirdPersonotherthananynon-disclosure
agreementsandnon-exclusivelicensesgrantedbytheCompanyintheordinarycourseofbusinessorinconnectionwiththeprovisionorsaleofanyCompanyproductorservice;or(ii)pursuant
towhichathirdPersonhaslicensed,grantedrightsortransferredanyIntellectualPropertytotheCompanyoranyofitsSubsidiariesthatismaterialtotheoperationofthebusinessofthe
Companyandexcludinganynon-disclosureagreements,anynon-exclusivelicensesofcommerciallyavailabletechnologyandanylicensestosoftwareandmaterialslicensedasopen-source,
public-sourceorfreeware(allsuchContracts,theIP
Contracts
).
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(d)Changes
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,theconsummationoftheMergerwillnotunderanyIPContractresult:(i)inthe
terminationofanylicenseorgrantofrightsofIntellectualPropertytotheCompanybyathirdPerson;(ii)inthegrantingbytheCompany,ParentoranyoftheirAffiliatesofanylicenseor
rightstotheirIntellectualProperty;or(iii)thereleasefromescrowofanymaterialCompanytechnologyorsoftware.
(e)No
Government
Funding
.TheCompanyisnotunderanyobligationtolicenseanymaterialCompanyIntellectualPropertytoanyGovernmentalAuthoritybecause
ithasreceivedfundingtodevelopsuchCompanyIntellectualPropertyfromaGovernmentalAuthority.
(f)No
Infringement
.TheoperationofthebusinessoftheCompanyanditsSubsidiariesassuchbusinessiscurrentlyconductedasofthedateofthisAgreementdoes
notinfringeormisappropriatetheIntellectualPropertyofanythirdPersonorconstituteunfaircompetitionorunfairtradepracticespursuanttotheLawsofanyjurisdictioninamannerthathas
orwouldreasonablybeexpectedtoresultinamaterialliabilitytotheCompanyanditsSubsidiaries,takenasawhole;providedthat,withrespecttoPatents,theforegoingrepresentationis
beingmadetotheKnowledgeoftheCompanyasofthedateofthisAgreement.
(g)No
Notice
of
Infringement
.SinceJanuary1,2015,neithertheCompanynoranyofitsSubsidiarieshasreceivedwrittennotice(includingceaseanddesistlettersand
invitationstotakeapatentlicensethatwouldreasonablybeconstruedasnoticeofinfringement)fromanythirdPersonallegingthattheoperationofthebusinessoftheCompanyoranyofits
SubsidiariesoroftheCompanysproductsinfringesormisappropriatestheIntellectualPropertyofanythirdPersonorconstitutesunfaircompetitionorunfairtradepracticespursuanttothe
LawsofanyjurisdictioninamannerthathasorwouldreasonablybeexpectedtoresultinamaterialliabilitytotheCompanyanditsSubsidiaries,takenasawhole.
(h)Proprietary
Information
.TheCompanyandeachofitsSubsidiarieshaveexercisedreasonablebusinessdiscretiontoprotecttheirrightsintheirconfidential
informationandtradesecretsandanytradesecretsorconfidentialinformationofthirdPersonsprovidedtotheCompanyoranyofitsSubsidiaries,ineachcasethatarematerialtothebusiness
oftheCompanyanditsSubsidiaries,takenasawhole.AllPersonswhohavecontributedtothecreation,invention,developmentofanymaterialCompanyIntellectualPropertyhaveassigned
totheCompanyoritsSubsidiariestheirrightsandintereststhereinthatdonotvestwiththeCompanyanditsSubsidiariesinitiallybyoperationoflaw.
(i)Privacy
and
Data
Security
.TheCompany(i)hasadoptedandpublishedfromtimetotimeprivacypolicies(each,theCompany
Privacy
Policy
);and(ii)isin
complianceinallmaterialrespectswith(A)eachCompanyPrivacyPolicyand(B)allapplicableLawsandregulationsandmaterialcontractualrequirementspertainingtopersonally
identifiableinformationofitscustomersandusersofitsproductsandservices(User
PII
).TheCompanyanditsSubsidiarieshavetakencommerciallyreasonablestepstoprotecttheUser
PIIfromunauthorizedaccessanduse.NeithertheCompanynoritsSubsidiarieshavesufferedanysecuritybreachwithrespecttoanyUserPIIthatwouldreasonablybeexpectedtoresultina
materialliabilitytotheCompanyoritsSubsidiaries,takenasawhole.
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3.17Tax
Matters
.
(a)Tax
Returns
.ExceptaswouldnotreasonablybeexpectedtoresultinmaterialliabilitytotheCompanyanditsSubsidiaries,theCompanyandeachofits
Subsidiarieshave(i)timelyfiled(takingintoaccountvalidextensions)allincomeandothermaterialUnitedStatesfederal,state,localandnon-UnitedStatesreturns,declarations,estimates,
informationstatementsandreports(includingamendmentsthereto)relatingtoanyandallTaxes(Tax
Returns
)requiredtobefiledby,oronbehalfof,anyoftheminaccordancewithall
applicableLaws;and(ii)paidtotheextentdueandpayable,or(totheextentaccruedbutnotyetdueandpayable)haveadequatelyreserved(inaccordancewithGAAP)forthepaymentof,all
materialTaxes(whetherornotshownonsuchTaxReturn)thatarerequiredtobepaidbyoronbehalfoftheCompanyoranyofitsSubsidiaries.Themostrecentfinancialstatementscontained
intheCompanySECReportsreflectanadequatereserve(inaccordancewithGAAP)forallmaterialTaxesaccruedbutnotthenpayablebytheCompanyanditsSubsidiariesthroughthedate
ofsuchfinancialstatements.NeithertheCompanynoranyofitsSubsidiarieshasexecutedanywaiver,exceptinconnectionwithanyongoingTaxexamination,ofanystatuteoflimitationson,
orextendedtheperiodfortheassessmentorcollectionof,anymaterialTax,ineachcasethathasnotsinceexpired.TherearenoLiensforTaxesuponanyoftheassetsorpropertiesofthe
CompanyoranyofitsSubsidiaries,otherthanPermittedLiens.
(b)Taxes
Paid
.ExceptaswouldnotreasonablybeexpectedtoresultinmaterialliabilitytotheCompanyanditsSubsidiaries,allmaterialTaxesrequiredtobe
withheld,collectedordepositedbyorwithrespecttotheCompanyandeachofitsSubsidiarieshavebeentimelywithheld,collectedordepositedasthecasemaybe,andtotheextentrequired,
havebeenpaidtotherelevantgovernmentauthority.
(c)No
Audits
.NoauditsorotherexaminationswithrespecttomaterialTaxesduefromorwithrespecttotheCompanyoranyofitsSubsidiariesbyanyGovernmental
Authorityarepresentlyinprogressorhavebeenasserted,threatenedorproposedinwriting.NowrittenclaimhaseverbeenmadebyaGovernmentalAuthorityinajurisdictionwherethe
CompanyoranyofitsSubsidiariesdoesnotfileTaxReturnsthattheCompanyorsuchSubsidiary,asthecasemaybe,isormaybesubjecttotaxinthatjurisdiction.
(d)Affiliated
Groups
.NeithertheCompanynoranyofitsSubsidiaries(i)isorhaseverbeenamemberofanaffiliatedgroupofcorporationsfilingaconsolidated
UnitedStatesfederalincomeTaxReturn(otherthanthegrouptowhichtheyarecurrentlymembersandthecommonparentofwhichistheCompany),or(ii)hasanymaterialliabilityforthe
TaxesofanyPerson(otherthantheCompanyoranyofitsSubsidiaries)underTreasuryRegulationsSection1.1502-6(oranycorrespondingorsimilarprovisionofanystate,local,orforeign
Law),asatransfereeorsuccessor,bycontract(otherthancontractsenteredintointheordinarycourseofbusinesstheprincipalpurposeofwhichisunrelatedtoTax),operationoflaw,or
otherwise.
(e)Spin-offs
.NeithertheCompanynoranyofitsSubsidiarieshasconstitutedeitheradistributingcorporationoracontrolledcorporationinadistributionofstock
intendedtoqualifyfortax-freetreatmentpursuanttoSection355oftheCode.
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(f)No
Listed
Transaction
.NeithertheCompanynoranyofitsSubsidiarieshasengagedinorhasbeenamaterialadvisorwithrespecttoalistedtransactionasset
forthinTreasuryRegulationSection1.6011-4(b)(2).
(g)Tax
Agreements
.NeithertheCompanynoranyofitsSubsidiariesisapartytoorboundby,orcurrentlyhasanyobligationsormaterialliabilitypursuantto,anyTax
sharing,allocation,indemnificationorsimilaragreementorobligation,otherthananysuchagreementorobligationenteredintointheordinarycourseofbusinesstheprimarypurposeofwhich
isunrelatedtoTaxes.
(h)Transfer
Pricing
.TheCompanyandeachofitsSubsidiariesareincomplianceinallmaterialrespectswithallapplicabletransferpricingLawsandregulations,
includingtheexecutionandmaintenanceofcontemporaneousdocumentationsubstantiatingthetransferpricingpracticesandmethodologyandconductingintercompanytransactionsatarms
length.
(i)Other
Income
Inclusions
or
Exclusions
.NeithertheCompanynoranyofitsSubsidiarieswillberequiredtoincludeanymaterialitemofincomein,orexcludeany
materialitemofdeductionfrom,taxableincomeforanytaxableperiod(orportionthereof)endingaftertheClosingDateasaresultofany(i)changeinmethodofaccountingforataxable
periodendingonorpriortotheClosingDate;(ii)closingagreementasdescribedinSection7121oftheCode(oranycorrespondingorsimilarprovisionofstate,localorforeignLaw)
executedonorpriortotheClosingDate;(iii)intercompanytransactionsoranyexcesslossaccountdescribedinTreasuryRegulationsunderSection1502oftheCode(oranycorrespondingor
similarprovisionofstate,localorforeignLaw)withrespecttoatransactionoreventoccurringonorpriortotheClosingDate;(iv)installmentsaleoropentransactiondispositionmadeonor
priortotheClosingDate;(v)electionunderSection108(i)oftheCode(oranycorrespondingorsimilarprovisionsofstate,localorforeignLaw)madeonorpriortotheClosingDate;or
(vi)prepaidamountreceivedorpaidoutsidetheordinarycourseofbusinessonorpriortotheClosingDate.
3.18Employee
Plans
.
(a)Employee
Plans
.Section3.18(a)oftheCompanyDisclosureLettersetsforthatrue,correctandcompletelistofallmaterialEmployeePlans.Forpurposesofthis
Agreement,thetermEmployee
Plans
means(i)allemployeebenefitplans(withinthemeaningofSection3(3)ofERISA),whetherornotsubjecttoERISA,includingmultiemployer
planswithinthemeaningofSection3(37)ofERISA;and(ii)allotheremployment,bonus,stockoption,stockpurchaseorotherequity-based,benefit,incentivecompensation,profitsharing,
savings,retirement,disability,insurance,vacation,deferredcompensation,severance,termination,retention,changeofcontrol,employeeloan,andothersimilarfringe,welfareorother
compensationoremployeebenefitplans,programs,agreements,contracts,policiesorbindingarrangements(whetherornotinwriting)(A)thataresponsored,maintainedorcontributedto(or
requiredtobecontributedto)forthebenefitofanycurrentorformeremployee,directororindependentcontractoroftheCompany,anyofitsSubsidiariesoranyothertradeorbusiness
(whetherornotincorporated)thatwouldbetreatedasasingleemployerwiththeCompanyoranyofitsSubsidiariespursuanttoSection414oftheCode(anERISA
Affiliate
);or(B)with
respecttowhichtheCompanyoranyofitsSubsidiarieshasany
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currentliability,contingentorotherwise.WithrespecttoeachEmployeePlansetforthonSection3.18(a)oftheCompanyDisclosureLetterotherthananInternationalEmployeePlan,tothe
extentapplicable,theCompanyhasmadeavailabletoParenttrue,correctandcompletecopiesof(or,totheextentnosuchcopyexists,anaccuratedescriptionthereof,totheextentapplicable)
(1)themostrecentannualreportonForm5500requiredtohavebeenfiledwiththeIRSforeachEmployeePlan,includingallschedulestheretoandanyauditedfinancialstatementsand
actuarialvaluationreports;(2)themostrecentdeterminationletter,ifany,fromtheIRSforanyEmployeePlanthatisintendedtoqualifypursuanttoSection401(a)oftheCodeor,ifsuch
EmployeePlanisaprototypeplan,theopinionornotificationletterwhichcoverseachsuchEmployeePlan,ifapplicable;(3)theplandocuments,includingallamendmentsthereto,and
summaryplandescriptionsandsummariesofmaterialmodifications;(4)anyrelatedtrustagreements,insurancecontracts,insurancepoliciesorotherdocumentsofanyfundingarrangements;
and(5)anynoticestoorfromtheIRSoranyofficeorrepresentativeoftheUnitedStatesDepartmentofLabororanysimilarGovernmentalAuthorityrelatingtoanymaterialcomplianceissues
inrespectofanysuchEmployeePlan.WithrespecttoeachEmployeePlanthatismaintainedinanynon-UnitedStatesjurisdictionorcoversanyemployeeresidingorworkingoutsidethe
UnitedStates(each,anInternational
Employee
Plan
),totheextentapplicable,theCompanyhasmadeavailabletoParenttrue,correctandcompletecopiesof(a)themostrecentannual
reportorsimilarcompliancedocumentsrequiredtobefiledwithanyGovernmentalAuthoritywithrespecttosuchplan;(b)anydocumentcomparabletothedeterminationletterreferenced
pursuanttoclause(2)aboveissuedbyaGovernmentalAuthorityrelatingtothesatisfactionofLawnecessarytoobtainthemostfavorabletaxtreatment,(c)theplandocuments,includingall
amendmentsthereto,andanylegallyrequiredsummariesthereof;(d)anyrelatedtrustagreements,insurancecontracts,insurancepoliciesorotherdocumentsofanyfundingarrangements;and
(e)anynoticestoorfromanyGovernmentalAuthorityrelatingtoanymaterialcomplianceissuesinrespectofanysuchInternationalEmployeePlan.
(b)Absence
of
Certain
Plans
.NeithertheCompany,itSubsidiariesnoranyoftheirrespectiveERISAAffiliateshaspreviouslymaintained,sponsored,contributedto
(orhadanobligationstocontributeto)orotherwisehadanyliabilitywithrespecttoorcurrentlymaintains,sponsorsorparticipatesin,contributesto(orhasanobligationtocontributeto)or
otherwisehasanyliabilitywithrespectto,(i)amultiemployerplan(withinthemeaningofSection3(37)ofERISA);(ii)amultipleemployerplansubjecttoSection413oftheCodeor
Section4063orSection4064ofERISA;or(iii)adefinedbenefitpensionplanorplansubjecttoSection302ofTitleIofERISA,Section412oftheCodeorSection4971oftheCodeor
TitleIVofERISA.
(c)Compliance
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,eachEmployeePlanhasbeenestablished,maintained,funded,operatedand
administeredinaccordanceincomplianceinallrespectswithitstermsandwiththerequirementsofallapplicableLaws,includingtheapplicableprovisionsofERISA,theCodeandany
applicableregulatoryguidanceissuedbyanyGovernmentalAuthority.
(d)Tax
Qualified
Status
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,eachEmployeePlanwhichisintendedtobequalifiedwithinthemeaningof
Section401(a)oftheCodeissoqualifiedandhasreceivedafavorabledeterminationletterastoitsqualification,orifsuchEmployeeplanisaprototypeplan,theopinionornotificationletter
foreachsuchEmployee
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Planandnothinghasoccurred,whetherbyactionorfailuretoact,thatwouldreasonablybeexpectedtocausethelossofsuchqualification.
(e)Employee
Plan
Liabilities
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,noeventhasoccurredandnoconditionexiststhatwouldsubjectto
CompanyoranyofitsSubsidiaries,eitherdirectlyorbyreasonoftheiraffiliationwithanyERISAAffiliate,toanyTax,fine,Lien,penaltyorotherliabilityimposedbyERISA,theCodeorany
otherapplicableLaw.
(f)Employee
Plan
Legal
Proceedings
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,(i)therearenoLegalProceedingspendingor,totheKnowledge
oftheCompany,threatenedonbehalfoforagainstanyEmployeePlan,theassetsofanytrustpursuanttoanyEmployeePlan,ortheplansponsor,planadministratororanyfiduciaryorany
EmployeePlanwithrespecttotheadministrationoroperationofsuchplans,otherthanroutineclaimsforbenefitsintheordinarycoursethathavebeenorarebeinghandledthroughan
administrativeclaimsprocedure;and(ii)nofactsorcircumstancesexistthatwouldreasonablybeexpectedtogiverisetoanysuchLegalProceedings.
(g)No
Prohibited
Transactions
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,noneoftheCompany,anyofitsSubsidiariesnor,totheKnowledgeof
theCompany,anyoftheirrespectivedirectors,officers,employeesoragents,has,withrespecttoanyEmployeePlan,engagedinorbeenapartytoanynon-exemptprohibitedtransaction(as
definedinSection4975oftheCodeorSection406ofERISA)thatwouldreasonablybeexpectedtoresultintheimpositionofapenaltyassessedpursuanttoSection502(i)ofERISAoraTax
imposedbySection4975oftheCode,ineachcaseapplicabletotheCompany,anyofitsSubsidiariesoranyEmployeePlan,orforwhichtheCompanyoranyofitsSubsidiarieshasany
indemnificationobligation.
(h)No
Welfare
Benefit
Plan
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,noEmployeePlanthatisawelfarebenefitplan(withinthemeaningof
Section3(1)ofERISA)providespost-terminationorretireelifeinsurance,healthorotherwelfarebenefitsorcoveragetoanyperson,exceptasmayberequiredbySection4980BoftheCode
oranysimilarLaw.
(i)Employee
Plans
Impacted
by
Merger;
Section
280G
.NoEmployeePlanexiststhat,asaresultoftheexecutionofthisAgreement,shareholderapprovalofthis
Agreement,orthetransactionscontemplatedbythisAgreement(whetheraloneorinconnectionwithanysubsequentevent(s))wouldreasonablybeexpectedto:(i)entitleanycurrentorformer
employee,director,officerorindependentcontractoroftheCompanyoranyofitsSubsidiaries(each,aCompany
Employee
)toseverancepay,unemploymentcompensationoranyother
paymentorbenefit,exceptasmayberequiredbyapplicableLaw,(ii)acceleratethetimeofpaymentorvesting,orincreasetheamountofcompensationorbenefitduetoanyCompany
Employee,(iii)directlyorindirectlycausetheCompanytotransferorsetasideanyassetstofundanybenefitsunderanyEmployeePlan,or(iv)resultinanypaymentorbenefitthatwould
constituteanexcessparachutepayment(assuchtermisdefinedinSection280G(b)(1)oftheCode)toanyCompanyEmployee.
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TableofContents
(j)Section
409A
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,eachEmployeePlanisincompliancewithSection409AoftheCode.
(k)International
Employee
Plans
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,(i)eachInternationalEmployeePlanhasbeenestablished,
maintained,funded,operatedandadministeredincomplianceinallrespectswithitstermsandconditionsandwiththerequirementsprescribedbyanyapplicableLawsand(ii)each
InternationalEmployeePlanwhichisrequiredorapprovedbyanyGovernmentalAuthorityhasbeensoregisteredandapprovedandhasbeenmaintainedingoodstandingwithapplicable
requirementsoftheGovernmentalAuthorities,and,ifintendedtoqualifyforspecialtaxtreatment,therearenoexistingcircumstancesoreventsthathaveoccurredorthatwouldreasonablybe
expectedtoaffectadverselythespecialtaxtreatmentwithrespecttosuchInternationalEmployeePlans.Furthermore,noInternationalEmployeePlanhasmaterialunfundedliabilitiesthatasof
theEffectiveTimewillnotbeoffsetbyinsuranceorfullyaccrued.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,noconditionexiststhatwouldpreventtheCompanyoranyof
itsSubsidiariesfromterminatingoramendinganyInternationalEmployeePlanatanytimeforanyreasonwithoutliabilitytotheCompanyoritsSubsidiaries(otherthanordinarynoticeand
administrationrequirementsandexpensesorroutineclaimsforbenefits).
(l)No
New
Employee
Plans
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,neithertheCompanynoranyofitsSubsidiarieshasanyplanor
commitmenttoamendanyEmployeePlanorestablishanynewemployeebenefitplanortoincreaseanybenefitspursuanttoanyEmployeePlan.
3.19Labor
and
Employment
Matters
.
(a)Union
Activities
.NeithertheCompanynoranyofitsSubsidiariesisapartytoanycollectivebargainingagreement,laborunioncontract,tradeunionagreementor
similaremployeerepresentativeagreement(each,aCollective
Bargaining
Agreement
).TotheKnowledgeoftheCompany,therearenoactivitiesorproceedingsofanylaborunion,trade
union,workscounciloranysimilargrouptoorganizeanyemployeesoftheCompanyoranyofitsSubsidiarieswithregardtotheiremploymentwiththeCompanyoranyofitsSubsidiaries.No
CollectiveBargainingAgreementisbeingnegotiatedbytheCompanyoranyofitsSubsidiaries.Thereisnostrike,lockout,slowdown,orworkstoppageagainsttheCompanyoranyofits
Subsidiariespendingor,totheKnowledgeoftheCompany,threateneddirectlyagainsttheCompanyoranyofitsSubsidiaries.Thereisnounfairlaborpracticecomplaintpendingor,tothe
KnowledgeoftheCompany,threatenedbeforetheNationalLaborRelationsBoardwithrespecttoanyemployeeoftheCompanyoranyofitsSubsidiaries.
(b)Employment
Law
Compliance
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,theCompanyanditsSubsidiarieshavecompliedandarein
compliancewithapplicableLawsandorderswithrespecttoemployment(includingapplicableLaws,rulesandregulationsregardingwageandhourrequirements,immigrationstatus,
discriminationinemployment,employeehealthandsafety,collectivebargainingandmaterialcontractualrequirementspertainingtopersonallyidentifiableinformation).Neitherthe
Companynoranyofits
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SubsidiariesareboundbyanyconsentdecreewithanyGovernmentalAuthorityarisingoutofanyemploymentorlaborissues,and,totheKnowledgeoftheCompany,nonehasbeen
threatened.
(c)WARN
Matters
.NeithertheCompanynoranyofitsSubsidiarieshaseffectuatedaplantclosingormasslayoffasthosetermsaredefinedinWARN,affecting
inwholeorinpartanysiteofemployment,facility,operatingunitoremployeeoftheCompany,withoutcomplyingwithallprovisionsofWARN,orimplementedanyearlyretirement,
separationorwindowprogram,ineachcase,withinthe24monthspriortothedateofthisAgreement,nor,asofthedateofthisAgreement,hastheCompanynoranyofitsSubsidiaries
announcedanysuchactionorprogramforthefuture.
(d)Withholding
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,theCompanyandeachofitsSubsidiarieshavewithheldallamountsrequiredby
applicableLawtobewithheldfromthewages,salariesandotherpaymentstoemployees,andarenotliableforanyarrearsofwagesoranyTaxesoranypenaltyforfailuretocomplywithany
oftheforegoing.NeithertheCompanynoranyofitsSubsidiariesisliableforanymaterialpaymenttoanytrustorotherfundortoanyGovernmentalAuthoritywithrespecttounemployment
compensationbenefits,socialsecurityorotherbenefitsforemployees(otherthanroutinepaymentstobemadeintheordinarycourseofbusiness).
3.20Permits
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,theCompanyanditsSubsidiariesholdallpermits,licenses,registrations,variances,clearances,
consents,commissions,franchises,exemptions,ordersandapprovalsfromGovernmentalAuthorities(Permits
)thatarerequiredfortheoperationofthebusinessoftheCompanyandits
Subsidiariesascurrentlyconducted.TheCompanyanditsSubsidiariescomplywiththetermsofallPermits,andnosuspension,cancellation,non-renewaloradversemodificationofanyofthe
Permitsispendingor,totheKnowledgeoftheCompany,threatened,exceptforsuchnoncompliance,suspensions,cancellations,non-renewalsoradversemodificationsthatwouldnothavea
CompanyMaterialAdverseEffect.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,allPermitsareinfullforceandeffect.
3.21Compliance
with
Laws
.
(a)General
Compliance
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,theCompanyandeachofitsSubsidiariesis,andinthetwoyearspreceding
thedateofthisAgreement,havebeenandtheirbusinessandoperationshavebeenconducted,incompliancewithall,andhavenotreceivedwrittennoticeofanydefaultorviolationofany,
LawsthatareapplicabletotheCompanyanditsSubsidiariesortotheconductofthebusinessoroperationsoftheCompanyanditsSubsidiaries.
(b)Prohibited
Payments;
Anti-Corruption
Laws
.SinceJune1,2011,noneoftheCompany,anyofitsSubsidiariesoranydirector,officeror,totheKnowledgeofthe
Company,employeeoragentoftheCompanyoranyofitsSubsidiarieshas(i)usedanyfundsforunlawfulcontributions,gifts,entertainmentorotherunlawfulpaymentsrelatingtoanactby
anyGovernmentalAuthority;(ii)madeanyunlawfulpaymenttoanyforeignordomesticgovernment
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officialoremployeeortoanyforeignordomesticpoliticalpartyorcampaignorviolatedanyprovisionoftheU.S.ForeignCorruptPracticesActof1977;or(iii)madeanyotherunlawful
paymentunderanyapplicableLawrelatingtoanti-corruption,briberyorsimilarmatters.SinceJune1,2011,neithertheCompanynoranyofitsSubsidiarieshasdisclosedtoanyGovernmental
AuthoritythatitviolatedormayhaveviolatedanyLawrelatingtoanti-corruption,briberyorsimilarmatters.TotheKnowledgeoftheCompany,noGovernmentalAuthorityisinvestigating,
examiningorreviewingtheCompanyscompliancewithanyapplicableprovisionsofanyLawrelatingtoanti-corruption,briberyorsimilarmatters.
(c)OFAC;
Sanctions
.NeithertheCompanynoranyofitsSubsidiariesnor,totheKnowledgeoftheCompany,anydirector,officer,agent,employee,Representative
orAffiliateoftheCompanyoranyofitsSubsidiarieshas,sinceJune1,2011,takenanyaction,directlyorindirectly,thatwouldresultinaviolationofrelevantLawsandregulationsimposing
U.S.,E.U.orU.K.economicsanctionsmeasures,includinganysanctionsadministeredbytheOfficeofForeignAssetsControloftheU.S.TreasuryDepartment(OFAC
)andtheBureauof
IndustrySecurityoftheU.S.DepartmentofCommerce,andanysanctionsmeasuresundertheInternationalEmergencyEconomicPowersAct,theTradingwiththeEnemyAct,ortheIran
SanctionsAct,andanyexecutiveorder,directive,orregulationpursuanttotheauthorityofanyoftheforegoing,oranyordersorlicensesissuedthereunder(collectively,Sanctions
).None
oftheCompany,anyofitsSubsidiariesor,totheKnowledgeoftheCompany,anydirector,officer,agent,employee,RepresentativeorAffiliateoftheCompanyoranyofitsSubsidiariesisa
PersonthatisthesubjectortargetofSanctionsordesignatedasaSpeciallyDesignatedNationalorBlockedPersonbyOFAC.NeithertheCompanynoranyofitsSubsidiarieshasany
assets,employeesorofficesin,andisnotorganizedundertheLawsofanyofCuba,Iran,Sudan,SyriaorNorthKorea.
3.22Legal
Proceedings;
Orders
.
(a)No
Legal
Proceedings
.TherearenomaterialLegalProceedingspendingor,totheKnowledgeoftheCompany,threatenedagainsttheCompanyoranyofits
Subsidiariesor,asofthedateofthisAgreement,againstanypresentorformerofficerordirectoroftheCompanyoranyofitsSubsidiariesinsuchindividualscapacityassuch.
(b)No
Orders
.NeithertheCompanynoranyofitsSubsidiariesoranyoftheirassets,rightsorproperties(includingIntellectualProperty)issubjecttoanymaterial
order,writ,judgment,injunction,decreeorawardofanykindornaturethatwould(i)preventormateriallydelaytheconsummationoftheMergerortheabilityoftheCompanytofullyperform
itscovenantsandobligationspursuanttothisAgreementor(ii)haveaCompanyMaterialAdverseEffect.
3.23Insurance
.
(a)Policies
and
Programs
.ExceptaswouldnothaveaCompanyMaterialAdverseEffect,eachoftheinsurancepoliciesandallself-insuranceprogramsand
arrangementsrelatingtothebusiness,assetsandoperationsoftheCompanyanditsSubsidiariesisinfullforceandeffect.
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(b)No
Cancellation
.AsofthedateofthisAgreement,exceptaswouldnothaveaCompanyMaterialAdverseEffect,sinceJanuary1,2013,neithertheCompanynor
anyofitsSubsidiarieshavereceivedanywrittennoticeregardinganycancellationorinvalidationofanysuchinsurancepolicyotherthaninconnectionwithordinaryrenewals.Allpremiums
duewithrespecttosuchinsurancepolicieshavebeenpaidinaccordancewiththetermsthereof.
3.24Related
Person
Transactions
.Exceptforcompensationorotheremploymentarrangementsintheordinarycourseofbusiness,thereare,andsinceJanuary1,2013,therehave
been,noContracts,transactions,arrangementsorunderstandingsbetweentheCompanyoranyofitsSubsidiaries,ontheonehand,andanyAffiliate(includinganydirector,officeror
employee)thereoforanyholderof5%ormoreofthesharesofCompanyCapitalStock,butnotincludinganywhollyownedSubsidiaryoftheCompany,ontheotherhand,thatwouldbe
requiredtobedisclosedpursuanttoItem404ofRegulationS-KpromulgatedbytheSECintheCompanysForm10-Korproxystatementpertainingtoanannualmeetingofstockholders.
3.25Brokers
.Thereisnofinancialadvisor,investmentbanker,broker,finder,agentorotherPersonthathasbeenretainedbyorisauthorizedtoactonbehalfoftheCompanyor
anyofitsSubsidiaries,oranyofficer,directororemployeethereof,oranyotherPersonwhoisentitledtoanyfinancialadvisor,investmentbanking,brokerage,findersorotherfeeor
commissionfromtheCompanyoritsSubsidiariesinconnectionwiththeMerger.CopiesoftheengagementlettersfortheAdvisor(andanyotherfinancialadvisortotheCompany)havebeen
madeavailabletoParent.
3.26Exclusivity
of
Representations
and
Warranties
.No
Other
Representations
and
Warranties
.TheCompany,onbehalfofitselfanditsSubsidiaries,acknowledgesandagrees
that,exceptfortherepresentationsandwarrantiesexpresslysetforthinArticleIV:
(i)neitherParentorMergerSubnoranyoftheirrespectiveSubsidiaries(oranyotherPerson)makes,orhasmade,anyrepresentationorwarrantyrelatingtoParent
orMergerSub,theirSubsidiariesoranyoftheirbusinesses,operationsorotherwiseinconnectionwiththisAgreementortheMerger;
(ii)noPersonhasbeenauthorizedbyParentorMergerSub,anyoftheirSubsidiariesoranyoftheirrespectiveAffiliatesorRepresentativestomakeany
representationorwarrantyrelatingtoParentorMergerSub,theirrespectiveSubsidiariesoranyoftheirbusinessesoroperationsorotherwiseinconnectionwiththisAgreementortheMerger,
andifmade,suchrepresentationorwarrantymustnotberelieduponbytheCompanyoranyofitsAffiliatesorRepresentativesashavingbeenauthorizedbyParentorMergerSub,anyoftheir
respectiveSubsidiariesoranyoftheirAffiliatesorRepresentatives(oranyotherPerson);and
(iii)therepresentationsandwarrantiesmadebyParentorMergerSubinthisAgreementareinlieuofandareexclusiveofallotherrepresentationsandwarranties,
includinganyexpressorimpliedorastomerchantabilityorfitnessforaparticularpurpose,andeachofParentandMergerSubherebydisclaimsanyotherorimpliedrepresentationsor
warranties,notwithstandingthedeliveryordisclosuretotheCompanyoranyofitsAffiliatesorRepresentativesofany
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documentationorotherinformation(includinganyfinancialinformation,supplementaldataorfinancialprojectionsorotherforward-lookingstatements).
(b)No
Reliance
.TheCompany,onbehalfofitselfanditsSubsidiaries,acknowledgesandagreesthat,exceptfortherepresentationsandwarrantiesexpresslysetforth
inArticleIV,itisnotacting(including,asapplicable,byenteringintothisAgreementorconsummatingtheMerger)inrelianceon:
(i)anyrepresentationorwarranty,expressorimplied;
(ii)anyestimate,projection,prediction,data,financialinformation,memorandum,presentationorothermaterialsorinformationprovidedoraddressedtothe
CompanyoranyofitsAffiliatesorRepresentatives,inconnectionwithpresentationsbyordiscussionswithParentsmanagementwhetherpriortoorafterthedateofthisAgreementorinany
otherforumorsetting;or
(iii)theaccuracyorcompletenessofanyotherrepresentation,warranty,estimate,projection,prediction,data,financialinformation,memorandum,presentationor
othermaterialsorinformation.
ARTICLE
IV
REPRESENTATIONS
AND
WARRANTIES
OF
PARENT
AND
MERGER
SUB
WithrespecttoanySectionofthisArticleIV,except(a)asdisclosedinthereports,statementsandotherdocumentsfiledbyParentwiththeSECorfurnishedbyParenttotheSEC,in
eachcasepursuanttotheExchangeActonorafterJuly1,2015,andpriortothedateofthisAgreement(otherthananydisclosurescontainedorreferencedthereinunderthecaptionsRisk
Factors,Forward-LookingStatements,QuantitativeandQualitativeDisclosuresAboutMarketRiskandanyotherdisclosurescontainedorreferencedthereinofinformation,factorsor
risksthatarepredictive,cautionaryorforward-lookinginnature)(theParent
Recent
SEC
Reports
)(itbeingunderstoodthat(i)anymatterdisclosedinanyParentRecentSECReportwill
bedeemedtobedisclosedinasectionoftheParentDisclosureLetteronlytotheextentthatitisreasonablyapparentfromsuchdisclosureinsuchParentRecentSECReportthatitisapplicable
tosuchsectionoftheParentDisclosureLetterand(ii)thisclause(a)willnotapplytoanyofSection4.2orSection4.8);or(b)assetforthintheParentDisclosureLetter,ParentandMerger
SubherebyrepresentandwarranttotheCompanyasfollows:
4.1Organization;
Good
Standing
.
(a)Parent
.Parent(i)isdulyorganized,validlyexistingandingoodstandingpursuanttotheLawsofitsjurisdictionoforganization;and(ii)hastherequisitepower
andauthoritytoconductitsbusinessasitispresentlybeingconductedandtoown,leaseoroperateitspropertiesandassets,exceptwherethefailuretobeinsuchgoodstanding,ortohavesuch
powerorauthority,wouldnotpreventormateriallydelaytheabilityofParenttoconsummatetheMerger.
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(b)Merger
Sub
.MergerSub(i)isacorporationdulyorganized,validlyexistingandingoodstandingpursuanttotheDGCL;and(ii)hastherequisitecorporatepower
andauthoritytoconductitsbusinessasitispresentlybeingconductedandtoown,leaseoroperateitspropertiesandassets,exceptwherethefailuretobeinsuchgoodstanding,ortohavesuch
powerorauthority,wouldnotpreventormateriallydelaytheabilityofMergerSubtoconsummatetheMerger.MergerSubhasbeenformedsolelyforthepurposeofengagingintheMerger
and,priortotheEffectiveTime,MergerSubwillnothaveengagedinanyotherbusinessactivitiesandwillhaveincurrednomaterialliabilitiesorobligationsotherthanascontemplatedbythis
Agreement.ParentoradirectorindirectSubsidiaryofParentisthesolerecordandbeneficialstockholderofMergerSub.
(c)Organizational
Documents
.ParenthasmadeavailabletotheCompanytrue,correctandcompletecopiesofthearticlesofincorporation,bylawsandothersimilar
organizationaldocumentsofParentandMergerSub,eachasamendedtodate.NeitherParentnorMergerSubisinviolationofitsarticlesofincorporation,bylawsorothersimilar
organizationaldocument,exceptwherethefailuretobeinsuchgoodstanding,ortohavesuchpowerorauthority,wouldnotpreventormateriallydelaytheabilityofParentandMergerSubto
consummatetheMerger.Thearticlesofincorporation,bylawsorothersimilarorganizationaldocumentofParentandMergerSubareinfullforceandeffectonthedateofthisAgreement.
4.2Corporate
Power;
Enforceability
.EachofParentandMergerSubhastherequisitepowerandauthorityto(a)executeanddeliverthisAgreement;(b)performitscovenants
andobligationshereunder;and(c)consummatetheMerger.TheexecutionanddeliveryofthisAgreementbyeachofParentandMergerSub,theperformancebyeachofParentandMergerSub
ofitsrespectivecovenantsandobligationshereunderandtheconsummationoftheMergerhavebeendulyauthorizedbyallnecessaryactiononthepartofeachofParentandMergerSuband,
otherthantheadoptionofthisAgreementbyParentimmediatelyfollowingtheexecutionanddeliveryofthisAgreementinitscapacityassolestockholderofMergerSubinaccordancewith
applicableLawandthecertificateofincorporationandbylawsofMergerSub,noadditionalactionsonthepartofParentorMergerSubarenecessarytoauthorize(i)theexecutionanddelivery
ofthisAgreementbyeachofParentandMergerSub;(ii)theperformancebyeachofParentandMergerSubofitsrespectivecovenantsandobligationshereunder;or(iii)theconsummationof
theMergerortheothertransactionscontemplatedbythisAgreement(otherthanthefilingwiththeSecretaryofStateoftheStateofDelawareoftheCertificateofMergerasrequiredbythe
DGCL).ThisAgreementhasbeendulyexecutedanddeliveredbyeachofParentandMergerSuband,assumingthedueauthorization,executionanddeliverybytheCompany,constitutesa
legal,validandbindingobligationofeachofParentandMergerSub,enforceableagainsteachofParentandMergerSubinaccordancewithitsterms,exceptassuchenforceability(A)maybe
limitedbyapplicablebankruptcy,insolvency,reorganization,moratoriumandothersimilarLawsaffectingorrelatingtocreditorsrightsgenerally;and(B)issubjecttogeneralprinciplesof
equity.
4.3Non-Contravention
.TheexecutionanddeliveryofthisAgreementbyeachofParentandMergerSub,theperformancebyeachofParentandMergerSuboftheirrespective
covenantsandobligationshereunder,andtheconsummationoftheMergerdonot(a)violateorconflictwithanyprovisionofthecertificateofincorporation,bylawsorothersimilar
organizationaldocumentsofParentorMergerSub;(b)violate,conflictwith,resultinthebreachof,constituteadefault(oran
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eventthat,withnoticeorlapseoftimeorboth,wouldbecomeadefault)pursuantto,orresultintheterminationof,oracceleratetheperformancerequiredby,orresultinarightoftermination
oraccelerationpursuanttoanyoftheterms,conditionsorprovisionsofanynote,bond,mortgage,indenture,lease,license,contract,agreementorotherinstrumentorobligationtowhichParent
orMergerSubisapartyorbywhichParent,MergerSuboranyoftheirpropertiesorassetsmaybebound;(c)assumingtheconsents,approvalsandauthorizationsreferredtoinSection4.4
havebeenobtained,violateorconflictwithanyLawapplicabletoParentorMergerSuborbywhichanyoftheirpropertiesorassetsarebound;or(d)resultinthecreationofanyLien(other
thanPermittedLiens)uponanyofthematerialpropertiesormaterialassetsofParentorMergerSub,exceptinthecaseofeachofclauses(b),(c)and(d)forsuchviolations,conflicts,breaches,
defaults,terminations,accelerationsorLiensthatwouldnot,individuallyorintheaggregate,preventormateriallydelaytheconsummationoftheMerger.
4.4Requisite
Governmental
Approvals
.NoConsentofanyGovernmentalAuthorityisrequiredonthepartofParent,MergerSuboranyoftheirAffiliatesinconnectionwiththe
(a)executionanddeliveryofthisAgreementbyeachofParentandMergerSub;(b)performancebyeachofParentandMergerSuboftheirrespectivecovenantsandobligationspursuanttothis
Agreement;or(c)consummationoftheMerger,except(i)thefilingoftheCertificateofMergerwiththeSecretaryofStateoftheStateofDelaware;(ii)suchfilingsandapprovalsasmaybe
requiredbyanyfederalorstatesecuritiesLaws,includingcompliancewithanyapplicablerequirementsoftheExchangeAct;(iii)compliancewithanyapplicablerequirementsoftheHSRAct
andanyapplicableforeignAntitrustLawssetforthonSection7.1(b)oftheCompanyDisclosureLetter;(iv)therulesofNASDAQand(v)suchotherConsentsthefailureofwhichtoobtain
wouldnot,individuallyorintheaggregate,preventormateriallydelaytheconsummationoftheMerger.
4.5Legal
Proceedings;
Orders
.
(a)No
Legal
Proceedings
.AsofthedateofthisAgreement,therearenoLegalProceedingspendingor,totheknowledgeofParentoranyofitsAffiliates,threatened
againstParentorMergerSubthatwould,individuallyorintheaggregatepreventormateriallydelaytheconsummationoftheMergerortheabilityofParentandMergerSubtofullyperform
theirrespectivecovenantsandobligationspursuanttothisAgreement.
(b)No
Orders
.NeitherParentnorMergerSubissubjecttoanyorderofanykindornaturethatwouldpreventormateriallydelaytheconsummationoftheMerger.
4.6Ownership
of
Company
Capital
Stock
.NeitherParentnorMergerSub(a)ownsanysharesofCompanyCapitalStockasofthedatehereofor(b)is(orhasbeenduringthe
twoyearspriortothedateofthisAgreement)aninterestedstockholder(asdefinedinSection203oftheDGCL)oftheCompanyassumingthattherepresentationsoftheCompanysetforth
inSection3.3(c)aretrueandcorrect.
4.7Brokers
.Thereisnofinancialadvisor,investmentbanker,broker,finder,agentorotherPersonthathasbeenretainedbyorisauthorizedtoactonbehalfofParent,Merger
Suborany
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oftheirAffiliateswhoisentitledtoanyfinancialadvisor,investmentbanking,brokerage,findersorotherfeeorcommissionforwhichtheCompanywouldbeliableinconnectionwiththe
Merger.
4.8Sufficient
Funds
.ParenthasavailableandwillhaveavailableattheEffectiveTimethefundsnecessaryforthepaymentofallamountspayablepursuanttoArticleIIin
connectionwithorasaresultoftheMerger.
4.9Exclusivity
of
Representations
and
Warranties
.
(a)No
Other
Representations
and
Warranties
.EachofParentandMergerSub,onbehalfofitselfanditsSubsidiaries,acknowledgesandagreesthat,exceptforthe
representationsandwarrantiesexpresslysetforthinArticleIII:
(i)neithertheCompanynoranyofitsSubsidiaries(oranyotherPerson)makes,orhasmade,anyrepresentationorwarrantyrelatingtotheCompany,its
Subsidiariesoranyoftheirbusinesses,operationsorotherwiseinconnectionwiththisAgreementortheMerger;
(ii)noPersonhasbeenauthorizedbytheCompany,anyofitsSubsidiariesoranyofitsortheirrespectiveAffiliatesorRepresentativestomakeanyrepresentationor
warrantyrelatingtotheCompany,itsSubsidiariesoranyoftheirbusinessesoroperationsorotherwiseinconnectionwiththisAgreementortheMerger,andifmade,suchrepresentationor
warrantymustnotberelieduponbyParent,MergerSuboranyoftheirrespectiveAffiliatesorRepresentativesashavingbeenauthorizedbytheCompany,anyofitsSubsidiariesoranyofits
ortheirrespectiveAffiliatesorRepresentatives(oranyotherPerson);and
(iii)therepresentationsandwarrantiesmadebytheCompanyinthisAgreementareinlieuofandareexclusiveofallotherrepresentationsandwarranties,including
anyexpressorimpliedorastomerchantabilityorfitnessforaparticularpurpose,andtheCompanyherebydisclaimsanyotherorimpliedrepresentationsorwarranties,notwithstandingthe
deliveryordisclosuretoParent,MergerSuboranyoftheirrespectiveAffiliatesorRepresentativesofanydocumentationorotherinformation(includinganyfinancialinformation,
supplementaldataorfinancialprojectionsorotherforward-lookingstatements).
(b)No
Reliance
.EachofParentandMergerSub,onbehalfofitselfanditsSubsidiaries,acknowledgesandagreesthat,exceptfortherepresentationsandwarranties
expresslysetforthinArticleIII,itisnotacting(including,asapplicable,byenteringintothisAgreementorconsummatingtheMerger)inrelianceon:
(i)anyrepresentationorwarranty,expressorimplied;
(ii)anyestimate,projection,prediction,data,financialinformation,memorandum,presentationorothermaterialsorinformationprovidedoraddressedtoParent,
MergerSuboranyoftheirrespectiveAffiliatesorRepresentatives,includinganymaterialsorinformationmadeavailableintheelectronicdataroomhostedbyoronbehalfoftheCompanyin
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connectionwiththeMerger,inconnectionwithpresentationsbyordiscussionswiththeCompanysmanagementwhetherpriortoorafterthedateofthisAgreementorinanyotherforumor
setting;or
(iii)theaccuracyorcompletenessofanyotherrepresentation,warranty,estimate,projection,prediction,data,financialinformation,memorandum,presentationor
othermaterialsorinformation.
ARTICLE
V
INTERIM
OPERATIONS
OF
THE
COMPANY
5.1Affirmative
Obligations
.Except(a)asexpresslycontemplatedbythisAgreement;(b)assetforthinSection5.1orSection5.2oftheCompanyDisclosureLetter;(c)as
contemplatedbySection5.2;or(d)asapprovedbyParent(whichapprovalwillnotbeunreasonablywithheld,conditionedordelayed),atalltimesduringtheperiodcommencingwiththe
executionanddeliveryofthisAgreementandcontinuinguntiltheearliertooccuroftheterminationofthisAgreementpursuanttoArticleVIIIandtheEffectiveTime,theCompanywill,and
willcauseeachofitsSubsidiariesto,(i)useitsrespectivereasonablebesteffortstomaintainitsexistenceingoodstandingpursuanttoapplicableLaw;(ii)subjecttotherestrictionsand
exceptionssetforthinSection5.2orelsewhereinthisAgreement,conductitsbusinessandoperationsintheordinarycourseofbusiness;and(iii)useitsrespectivereasonablebesteffortsto
(A)preserveintactitsmaterialassets,properties,Contractsorotherlegallybindingunderstandings,licensesandbusinessorganizations;(B)keepavailabletheservicesofitscurrentofficersand
keyemployees;and(C)preservethecurrentrelationshipsandgoodwillwithcustomers,suppliers,distributors,lessors,licensors,licensees,creditors,contractorsandotherPersonswithwhich
theCompanyoranyofitsSubsidiarieshasbusinessrelations.
5.2Forbearance
Covenants
.Except(i)assetforthinSection5.2oftheCompanyDisclosureLetter;(ii)asapprovedbyParent(whichapprovalwillnotbeunreasonably
withheld,conditionedordelayed);or(iii)asexpresslycontemplatedbythetermsofthisAgreement,atalltimesduringtheperiodcommencingwiththeexecutionanddeliveryofthis
AgreementandcontinuinguntiltheearliertooccuroftheterminationofthisAgreementpursuanttoArticleVIIIandtheEffectiveTime,theCompanywillnot,andwillnotpermitanyofits
Subsidiaries,to:
(a)amendorotherwisechangetheCharter,theBylawsoranyothersimilarorganizationaldocument;
(b)proposeoradoptaplanofcompleteorpartialliquidation,dissolution,merger,consolidation,restructuring,recapitalizationorotherreorganization;
(c)issue,sell,deliveroragreeorcommittoissue,sellordeliver(whetherthroughtheissuanceorgrantingofoptions,warrants,commitments,subscriptions,rightsto
purchaseorotherwise)anyCompanySecurities,except(A)fortheissuanceandsaleofsharesofCompanyCommonStockpursuanttoCompanyOptionsorCompanyStock-BasedAwards
outstandingasoftheCapitalizationDateinaccordancewiththeirtermsand(B)forthegrantingofCompanyStock-BasedAwardsandCompanyOptions(or,inthecaseofCompanyOptions,
theequivalentvaluein
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CompanyStock-BasedAwards)intheordinarycourseofbusinessandconsistentwithpastpractice,exceptassetforthinSection5.2(c)oftheCompanyDisclosureLetter;
(d)directlyorindirectlyacquire,repurchaseorredeemanysecurities,exceptfor(A)forfeitures,repurchasesorwithholdingofCompanySecuritiespursuanttothe
termsandconditionsofCompanyStock-BasedAwardsoutstandingasofthedateofthisAgreementinaccordancewiththeirtermsasofthedateofthisAgreement,or(B)transactionsbetween
theCompanyandanyofitsdirectorindirectwholly-ownedSubsidiaries;
(e)(A)adjust,split,subdivide,combineorreclassifyanysharesofcapitalstock,orissueorauthorizeorproposetheissuanceofanyotherCompanySecuritiesin
respectof,inlieuoforinsubstitutionfor,sharesofitscapitalstockorotherequityorvotinginterest;(B)declare,setasideorpayanydividendorotherdistribution(whetherincash,sharesor
propertyoranycombinationthereof)inrespectofanysharesofcapitalstockorotherequityorvotinginterest,ormakeanyotheractual,constructiveordeemeddistributioninrespectofthe
sharesofcapitalstockorotherequityorvotinginterest,exceptforcashdividendsmadebyanydirectorindirectwhollyownedSubsidiaryoftheCompanytotheCompanyoroneofitsother
whollyownedSubsidiaries;(C)pledgeorencumberanysharesofitscapitalstockorotherequityorvotinginterest;or(D)modifythetermsofanysharesofitscapitalstockorotherequityor
votinginterest;
(f)(A)incur,assume,sufferormodifythetermsofanyIndebtedness(includinganylong-termorshort-termdebt)orissueanydebtsecurities,except(1)fortrade
payablesincurredintheordinarycourseofbusiness;and(2)forloansoradvancestodirectorindirectwhollyownedSubsidiariesoftheCompany;(B)assume,guarantee,endorseorotherwise
becomeliableorresponsible(whetherdirectly,contingentlyorotherwise)fortheobligationsofanyotherPerson,exceptwithrespecttoobligationsofdirectorindirectwhollyowned
SubsidiariesoftheCompany;(C)makeanyloans,advancesorcapitalcontributionsto,orinvestmentsin,anyotherPerson,exceptforadvancestodirectors,officersandotheremployeesfor
travelandotherbusiness-relatedexpensesincurredinconnectionwithsuchpersonsroleattheCompanyoroneofitsSubsidiariesintheordinarycourseofbusiness;or(D)mortgage,pledgeor
otherwiseencumberanyassets,tangibleorintangible,orcreateorsuffertoexistanyLienthereupon(otherthanPermittedLiens);
(g)withoutfirstinformingParent,terminateanyemployeeatthelevelofseniorvicepresidentorabove(otherthanforcause)orhireanynewemployeeatthelevelof
seniorvicepresidentoraboveunless,inthecaseofahiringonly,suchhiringisintheordinarycourseofbusinessandconsistentwithpastpractice;
(h)(A)enterinto,adopt,amend(includingacceleratingthevesting),modifyorterminateanyEmployeePlanoranyagreement,trust,plan,fundorotherarrangement
thatwouldbeanEmployeePlanifitwereinexistenceasofthedateofthisAgreement(New
Employee
Plans
),exceptintheordinarycourseofbusinessandconsistentwithpastpracticein
amannerthatwouldnot,intheaggregateofallEmployeePlansandNewEmployeePlans,materiallyincreasethecosttotheCompanyanditsSubsidiaries;(B)increasethecompensationor
benefitsofanyCompanyEmployee,exceptforincreasesincompensationorbenefitsforemployeesbelowthelevelofseniorvicepresidenttotheextentthatsuchincreasesareintheordinary
courseofbusinessandconsistent
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withpastpractice;(C)payanyspecialbonusorspecialremunerationtoanyCompanyEmployee,orpayanybenefitnotrequiredbyanyEmployeePlanexceptinconnectionwithanynew
employeehiresbelowthelevelofseniorvicepresidentintheordinarycourseofbusinessandconsistentwithpastpractice;and(D)grantanyseveranceorterminationpaytoanyCompany
Employee,otherthantoemployeesbelowthelevelofseniorvicepresidentintheordinarycourseofbusinessandconsistentwithpastpractice,exceptinthecaseofeachof(A),(B),(C)and
(D),asmayberequiredbyapplicableLaw;
(i)settle,release,waiveorcompromiseanypendingorthreatenedLegalProceedingoragreetoanyremedieswithrespecttoanyLegalProceedingorsettlement
thereof,exceptforthesettlementofanyLegalProceedings(A)solelyformonetarydamagesinanamountthatdoesnotexceedthatwhichisreflectedorreservedagainstintheAudited
CompanyBalanceSheet(or,withrespecttoanyLegalProceedingarisingafterthedateofthisAgreement,solelyforanimmaterialamountofmonetarydamages);or(B)incompliancewith
Section6.13;
(j)exceptasrequiredbyapplicableLaworGAAP,(A)revalueinanymaterialrespectanyofitspropertiesorassets,includingwriting-offnotesoraccountsreceivable,
otherthanintheordinarycourseofbusiness;or(B)makeanychangeinanyofitsaccountingprinciplesorpractices;
(k)(A)makeorchangeanymaterialTaxelection;(B)adoptorchangeanyaccountingmethodwithrespecttoTaxesorchangeanannualaccountingperiod;(C)settle,
consenttoorcompromiseanymaterialTaxclaimorassessmentrelatingtotheCompanyoranyofitsSubsidiaries;(D)fileanymaterialamendedTaxReturns;(E)enterintoanyclosing
agreementinrespectofamaterialTax;(F)surrenderanyrighttoclaimarefundformaterialTaxes;or(G)consenttoanyextensionorwaiverofanylimitationperiodwithrespecttoany
materialTaxclaimorassessmentrelatingtotheCompanyoranyofitsSubsidiaries;
(l)(A)incur,authorizeorcommittoincuranycapitalexpendituresotherthan(1)consistentwiththecapitalexpenditurebudgetsetforthinSection5.2(l)ofthe
CompanyDisclosureLetter;or(2)pursuanttoagreementsineffectpriortothedateofthisAgreementandsetforthonSection5.2(l)oftheCompanyDisclosureLetter;(B)enterinto,modify,
amend,extend,failtoperformthetermsoforterminateany(1)Contract(otherthananyMaterialContract)thatifsoenteredinto,modified,amendedorterminatedwouldhaveaCompany
MaterialAdverseEffect;or(2)MaterialContractexceptintheordinarycourseofbusiness;(C)maintaininsuranceatlessthancurrentlevelsorotherwiseinamannerinconsistentwithpast
practice;(D)engageinanytransactionwith,orenterintoanyagreement,arrangementorunderstandingwith,anyAffiliateoftheCompanyorotherPersoncoveredbyItem404of
RegulationS-KpromulgatedbytheSECthatwouldberequiredtobedisclosedpursuanttoItem404;(E)effectuateaplantclosingormasslayoff(eachasdefinedinWARN)affectingin
wholeorinpartanysiteofemployment,facility,operatingunitoremployee;(F)grantanymaterialrefunds,credits,rebatesorotherallowancestoanyenduser,customer,resellerordistributor
ormateriallyaccelerate,ormateriallyalterpracticesandpoliciesrelatingto,therateofcollectionofaccountsreceivableorpaymentofaccountspayable,ineachcaseotherthanintheordinary
courseofbusiness;or(G)waive,release,grant,encumberortransferanyrightofmaterialvalueotherthanintheordinarycourseofbusiness;
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(m)acquire(bymerger,consolidationoracquisitionofstockorassetsorotherwise),ormakeanyinvestmentinanyinterestin,anyassetsoranyotherPersonorany
equityinteresttherein,exceptforpurchasesofassetsintheordinarycourseofbusiness;
(n)(A)sellorotherwisedisposeof(whetherbymerger,consolidationordispositionofstockorassetsorotherwise)anyassetsconstitutingamateriallineofbusinessor
anycorporation,partnershiporotherbusinessorganizationormaterialdivisionthereof;(B)subjecttoaLien,sell,assign,license(orgrantacovenantnottosueorsimilarrightsunder),
sublicense,transfer,allowtolapseorexpire,pledge,abandon,discontinue,failtomaintainorotherwisedisposeofanyothermaterialassetsoftheCompanyoranyofitsSubsidiariesorany
materialitemsofCompanyRegisteredIntellectualProperty;or(C)sell,assign,license(orgrantacovenantnottosueorsimilarrightsunder),sublicense,transfer,pledgeorotherwisedispose
ofanyothermaterialitemsofCompanyIntellectualProperty,ineachcaseof(A),(B)and(C)otherthanintheordinarycourseofbusinessand(forpurposesofclauses(A)and(B))consistent
withpastpractice;
(o)enterintoanynewbusinesssegmentoutsideoftheCompanysanditsSubsidiariesexistingbusinesssegmentsonthedateofthisAgreement;or
(p)enterinto,authorizeorcommittoenterintoaContractorotheragreementtotakeanyoftheactionsprohibitedbythisSection5.2.
5.3No
Solicitation
.
(a)No
Solicitation
or
Negotiation
.SubjecttothetermsofSection5.3(b),fromthedateofthisAgreementuntiltheearliertooccuroftheterminationofthisAgreement
pursuanttoArticleVIIIandtheEffectiveTime,theCompanywillceaseandcausetobeterminatedanydiscussionsornegotiationswithandterminateanydataroomaccess(orotherdiligence
access)ofanyPersonanditsAffiliates,directors,officers,employees,consultants,agents,representativesandadvisors(collectively,Representatives
)relatingtoanyAcquisition
Transaction.PromptlyfollowingthedateofthisAgreement,theCompanywillrequestthateachPerson(otherthanParentanditsRepresentatives)thathas,priortothedateofthisAgreement,
executedaconfidentialityagreementinconnectionwithitsconsiderationofacquiringtheCompanytopromptlyreturnordestroyallnon-publicinformationfurnishedtosuchPersonbyoron
behalfoftheCompanyoranyofitsSubsidiariespriortotheofthisAgreementinaccordancewiththetermsofsuchconfidentialityagreement.SubjecttothetermsofSection5.3(b)and
Section5.3(d),fromthedateofthisAgreementuntiltheearliertooccuroftheterminationofthisAgreementpursuanttoArticleVIIIandtheEffectiveTime,theCompanyanditsSubsidiaries
andtheirrespectivedirectors,executiveandotherofficerswillnot,andtheCompanywillnotauthorizeordirectanyofitsoritsSubsidiariesemployees,consultantsorotherRepresentatives
to,directlyorindirectly,(i)solicit,initiate,proposeorinducethemaking,submissionorannouncementof,orknowinglyencourage,facilitateorassist,anyproposalthatconstitutes,oris
reasonablyexpectedtoleadto,anAcquisitionProposal;(ii)furnishtoanyPerson(otherthanParent,MergerSuboranydesigneesofParentorMergerSub)anynon-publicinformationrelating
totheCompanyoranyofitsSubsidiariesoraffordtoanyPersonaccesstothebusiness,properties,assets,books,recordsorothernon-publicinformation,ortoanypersonnel,oftheCompany
oranyofitsSubsidiaries(otherthanParent,
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MergerSuboranydesigneesofParentorMergerSub),inanysuchcaseinconnectionwithanyAcquisitionProposalorwiththeintenttoinducethemaking,submissionorannouncementof,or
toknowinglyencourage,facilitateorassist,anAcquisitionProposaloranyinquiriesorthemakingofanyproposalthatwouldreasonablybeexpectedtoleadtoanAcquisitionProposal;
(iii)participateorengageindiscussionsornegotiationswithanyPersonwithrespecttoanAcquisitionProposal,orwithrespecttoanyinquiriesfromthirdPersonsrelatingtomakinga
potentialAcquisitionProposal(otherthanonlyinformingsuchPersonsoftheprovisionscontainedinthisSection5.3);(iv)approve,endorseorrecommendanyproposalthatconstitutes,oris
reasonablyexpectedtoleadto,anAcquisitionProposal;(v)enterintoanyletterofintent,memorandumofunderstanding,mergeragreement,acquisitionagreementorotherContractrelatingto
anAcquisitionTransaction,otherthananAcceptableConfidentialityAgreement(anysuchletterofintent,memorandumofunderstanding,mergeragreement,acquisitionagreementorother
ContractrelatingtoanAcquisitionTransaction,anAlternative
Acquisition
Agreement
);or(vi)authorizeorcommittodoanyoftheforegoing.FromthedateofthisAgreementuntilthe
earliertooccuroftheterminationofthisAgreementpursuanttoArticleVIIIandtheEffectiveTime,theCompanywillnotberequiredtoenforce,andwillbepermittedtowaive,anyprovision
ofanystandstillorconfidentialityagreementtotheextentthatsuchprovisionprohibitsorpurportstoprohibitaconfidentialproposalbeingmadetotheCompanyBoard(oranycommittee
thereof).
(b)Superior
Proposals
.NotwithstandinganythingtocontrarysetforthinthisSection5.3,fromthedateofthisAgreementuntiltheCompanysreceiptoftheRequisite
StockholderApproval,theCompanyandtheCompanyBoard(oracommitteethereof)may,directlyorindirectlythroughoneormoreoftheirRepresentatives(includingtheAdvisor),
followingtheexecutionofanAcceptableConfidentialityAgreement,participateorengageindiscussionsornegotiationswith,furnishanynon-publicinformationrelatingtotheCompanyor
anyofitsSubsidiariesto,oraffordaccesstothebusiness,properties,assets,books,recordsorothernon-publicinformation,ortoanypersonnel,oftheCompanyoranyofitsSubsidiariesto
anyPersonoritsRepresentatives(including,forthesepurposes,sourcesoffinancing)thathasmadeordeliveredtotheCompanyabonafidewrittenAcquisitionProposalafterthedateofthis
AgreementthatwasnotsolicitedinbreachofSection5.3(a),butonlyiftheCompanyBoardhasdeterminedingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)
that(i)suchAcquisitionProposaleitherconstitutesaSuperiorProposalorisreasonablylikelytoleadtoaSuperiorProposal;and(ii)thefailuretotaketheactionscontemplatedbythis
Section5.3(b)wouldbeinconsistentwithitsfiduciarydutiespursuanttoapplicableLaw.Inconnectionwiththeforegoing,theCompanywillpriortoorcontemporaneouslymakeavailableto
Parentanynon-publicinformationconcerningtheCompanyanditsSubsidiariesthatisprovidedtoanysuchPersonoritsRepresentativesthatwasnotpreviouslymadeavailabletoParent.
(c)No
Change
in
Company
Board
Recommendation
or
Entry
into
an
Alternative
Acquisition
Agreement
.ExceptasprovidedbySection5.3(d),atnotimeafterthedate
ofthisAgreementmaytheCompanyBoard(oracommitteethereof):
(i)(A)withhold,withdraw,amend,qualifyormodify,orpubliclyproposetowithhold,withdraw,amend,qualifyormodify,theCompanyBoardRecommendation
inamanneradversetoParent;(B)adopt,approveorrecommendanAcquisitionProposal;(C)failtopublicly
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reaffirmtheCompanyBoardRecommendationwithin10BusinessDaysoftheoccurrenceofamaterialeventordevelopmentandafterParentsorequestsinwriting(oriftheCompany
StockholderMeetingisscheduledtobeheldwithin10BusinessDays,thenwithinoneBusinessDayafterParentsorequests);(D)takeorfailtotakeanyformalactionormakeorfailtomake
anyrecommendationinconnectionwithatenderorexchangeoffer,otherthanarecommendationagainstsuchofferorastop,lookandlistencommunicationbytheCompanyBoard(ora
committeethereof)totheCompanyStockholderspursuanttoRule14d-9(f)promulgatedundertheExchangeAct(oranysubstantiallysimilarcommunication)(itbeingunderstoodthatthe
CompanyBoard(oracommitteethereof)mayrefrainfromtakingapositionwithrespecttoanAcquisitionProposaluntilthecloseofbusinessonthe10thBusinessDayafterthe
commencementofatenderorexchangeofferinconnectionwithsuchAcquisitionProposalwithoutsuchactionbeingconsideredaviolationofthisSection5.3);or(E)failtoincludethe
CompanyBoardRecommendationintheProxyStatement(anyactiondescribedinclauses(A)through(E),aCompany
Board
Recommendation
Change
),itbeingunderstoodthatneither
(1)thedeterminationinitselfbytheCompanyBoard(oracommitteethereof)thatanAcquisitionProposalconstitutesorisreasonablylikelytoleadtoaSuperiorProposalnor(2)thedelivery
initselfbytheCompanytoParentofanynoticecontemplatedbySection5.3(d)willconstituteaCompanyBoardRecommendationChangeorviolatethisSection5.3;or
(ii)causeorpermittheCompanyoranyofitsSubsidiariestoenterintoanAlternativeAcquisitionAgreement.
(d)Company
Board
Recommendation
Change;
Entry
into
Alternative
Acquisition
Agreement
.NotwithstandinganythingtothecontrarysetforthinthisAgreement,at
anytimepriortoobtainingtheRequisiteStockholderApproval:
(i)otherthaninconnectionwithabonafideAcquisitionProposalthatconstitutesaSuperiorProposal,theCompanyBoardmayeffectaCompanyBoard
RecommendationChangeinresponsetoanInterveningEventiftheCompanyBoarddeterminesingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)thatthe
failuretodosowouldbeinconsistentwithitsfiduciarydutiespursuanttoapplicableLawifandonlyif:
(1)theCompanyhasprovidedpriorwrittennoticetoParentatleastthreeBusinessDaysinadvancetotheeffectthattheCompanyBoardhas(A)so
determined;and(B)resolvedtoeffectaCompanyBoardRecommendationChangepursuanttothisSection5.3(d)(i),whichnoticewilldescribetheInterveningEventinreasonabledetail;and
(2)priortoeffectingsuchCompanyBoardRecommendationChange,theCompanyanditsRepresentatives,duringsuchthreeBusinessDayperiod,
have(A)negotiatedwithParentanditsRepresentativesingoodfaith(totheextentthatParentdesirestosonegotiate)tomakesuchadjustmentstothetermsandconditionsofthisAgreementso
thattheCompanyBoardnolongerdeterminesingoodfaiththatthefailuretomakeaCompanyBoardRecommendationChangeinresponsetosuchInterveningEventwouldbeinconsistent
withitsfiduciarydutiespursuanttoapplicableLaw;and(B)permittedParentanditsRepresentativesto
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makeapresentationtotheCompanyBoardregardingthisAgreementandanyadjustmentswithrespectthereto(totheextentthatParentrequeststomakesuchapresentation);or
(ii)iftheCompanyhasreceivedabonafidewrittenAcquisitionProposalthattheCompanyBoardhasconcludedingoodfaith(afterconsultationwithitsfinancial
advisorandoutsidelegalcounsel)isaSuperiorProposal,thentheCompanyBoardmay(A)effectaCompanyBoardRecommendationChangewithrespecttosuchSuperiorProposalor
(B)authorizetheCompanytoterminatethisAgreementpursuanttoSection8.1(h)toenterintoanAlternativeAcquisitionAgreementwithrespecttosuchSuperiorProposal,ineachcaseifand
onlyif:
(1)theCompanyBoarddeterminesingoodfaith(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel)thatthefailuretodosowould
beinconsistentwithitsfiduciarydutiespursuanttoapplicableLaw;
(2)theCompanyhascompliedwithitsobligationspursuanttothisSection5.3withrespecttosuchAcquisitionProposal;and
(3)(i)theCompanyhasprovidedpriorwrittennoticetoParentatleastthreeBusinessDaysinadvance(theNotice
Period
)totheeffectthatthe
CompanyBoardhas(A)receivedabonafidewrittenAcquisitionProposalthathasnotbeenwithdrawn;(B)concludedingoodfaiththatsuchAcquisitionProposalconstitutesaSuperior
Proposal;and(C)resolvedtoeffectaCompanyBoardRecommendationChangeortoterminatethisAgreementpursuanttothisSection5.3(d)(ii),whichnoticewilldescribethebasisforsuch
CompanyBoardRecommendationChangeortermination,includingtheidentityofthePersonorgroupofPersonsmakingsuchAcquisitionProposal,thematerialtermsofsuchAcquisition
ProposalandcopiesofallrelevantdocumentsrelatingtosuchAcquisitionProposal;and(ii)priortoeffectingsuchCompanyBoardRecommendationChangeortermination,theCompanyand
itsRepresentatives,duringtheNoticePeriod,have(1)negotiatedwithParentanditsRepresentativesingoodfaith(totheextentthatParentdesirestosonegotiate)tomakesuchadjustmentsto
thetermsandconditionsofthisAgreementsothatsuchAcquisitionProposalwouldceasetoconstituteaSuperiorProposal;and(2)permittedParentanditsRepresentativestomakea
presentationtotheCompanyBoardregardingthisAgreementandanyadjustmentswithrespectthereto(totheextentthatParentrequeststomakesuchapresentation),itbeingunderstoodthat
(a)intheeventofanymaterialrevisionstosuchAcquisitionProposal,theCompanywillberequiredtodeliveranewwrittennoticetoParentandtocomplywiththerequirementsofthis
Section5.3(d)(ii)(3)withrespecttosuchnewwrittennotice(withtheNoticePeriodinrespectofsuchnewwrittennoticebeingtwoBusinessDays);and(b)theCompanyBoard,attheend
oftheNoticePeriod(afterconsultationwithitsfinancialadvisorandoutsidelegalcounsel),musthaveingoodfaithreaffirmeditsdeterminationthatsuchbonafidewrittenAcquisition
ProposalisaSuperiorProposal.
(e)Notice
.FromthedateofthisAgreementuntiltheearliertooccuroftheterminationofthisAgreementpursuanttoArticleVIIIandtheEffectiveTime,theCompany
willpromptly(and,inanyevent,bythelaterof(i)24hoursfromthereceiptthereofor(ii)5:00p.m.,PacificTime,onthenextBusinessDay)notifyParentifanyAcquisitionProposalor
inquiryfromanythirdPersonrelatedtomakingapotentialAcquisitionProposalis,totheKnowledgeofthe
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CompanyorofanymemberoftheCompanyBoard,receivedby,anynon-publicinformationisrequestedfromoranydiscussionsornegotiationsaresoughttobeinitiatedorcontinuedwith,the
CompanyoranyofitsRepresentatives.Suchnoticemustinclude(A)theidentityofthePersonorgroupofPersonsmakingsuchoffersorproposals(unless,ineachcase,suchdisclosureis
prohibitedpursuanttothetermsofanyconfidentialityagreementwithsuchPersonorgroupofPersonsthatisineffectonthedateofthisAgreement);and(B)asummaryofthematerial
termsandconditionsofsuchoffersorproposalsorifsuchAcquisitionProposalorrequestisinwriting,acopythereof.Thereafter,theCompanymustkeepParentreasonablyinformed,ona
promptbasis,ofthestatusandtermsofanysuchoffersorproposals(includinganyamendmentsthereto)andthestatusofanysuchdiscussionsornegotiations.
(f)Certain
Disclosures
.SolongastheCompanyBoardexpresslypubliclyreaffirmstheCompanyBoardRecommendationinsuchdisclosure(otherthanacustomary
stop-look-and-listencommunicationtothestockholdersoftheCompanypursuanttoRule14d-9(f)undertheExchangeAct),thennothinginthisAgreementwillprohibittheCompanyorthe
CompanyBoard(oracommitteethereof)from(i)takinganddisclosingtotheCompanyStockholdersapositioncontemplatedbyRule14e-2(a)promulgatedundertheExchangeActor
complyingwithRule14d-9promulgatedundertheExchangeAct,includingastop,lookandlistencommunicationbytheCompanyBoard(oracommitteethereof)totheCompany
StockholderspursuanttoRule14d-9(f)promulgatedundertheExchangeAct(oranysubstantiallysimilarcommunication);(ii)complyingwithItem1012(a)ofRegulationM-Apromulgated
undertheExchangeAct;or(iii)makinganydisclosuretotheCompanyStockholders(includingregardingthebusiness,financialconditionorresultsofoperationsoftheCompanyandits
Subsidiaries)thattheCompanyBoard(oracommitteethereof),afterconsultationwithoutsidecounsel,hasdeterminedingoodfaithisrequiredbyapplicableLaw.Inaddition,solongasthe
CompanyBoardexpresslypubliclyreaffirmstheCompanyBoardRecommendationinsuchdisclosure(otherthanacustomarystop-look-and-listencommunicationtothestockholdersofthe
CompanypursuanttoRule14d-9(f)undertheExchangeAct),thenitisunderstoodandagreedthat,forpurposesofthisAgreement,afactuallyaccuratepublicstatementbytheCompanyorthe
CompanyBoardsolelythat(A)describestheCompanysreceiptofanAcquisitionProposal;(B)identifiesthePersonmakingsuchAcquisitionProposal;(C)providesthematerialtermsofsuch
AcquisitionProposal;or(D)describestheoperationofthisAgreementwithrespecttheretowillnotbedeemedtobe(1)awithholding,withdrawal,amendment,qualificationormodification,or
proposalbytheCompanyBoard(oracommitteethereof)towithhold,withdraw,amend,qualifyormodify,theCompanyBoardRecommendation;(2)anadoption,approvalorrecommendation
withrespecttosuchAcquisitionProposal;or(3)aCompanyBoardRecommendationChange.
(g)Breach
by
Representatives
.TheCompanyagreesthatanyactiontakenbyanyRepresentative(otherthananyemployeeorconsultantoftheCompanywhoisnotan
executiveorotherofficeroftheCompany)oftheCompanythat,iftakenbytheCompany,wouldbeabreachofthisSection5.3,thensuchactionwillbedeemedtoconstituteabreachbythe
CompanyofthisSection5.3.
5.4No
Control
of
the
Companys
Business
.ThePartiesacknowledgeandagreethattherestrictionssetforthinthisAgreementarenotintendedtogiveParentorMergerSub,
directlyor
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indirectly,therighttocontrolordirectthebusinessoroperationsoftheCompanyoritsSubsidiariesatanytimepriortotheEffectiveTime.PriortotheEffectiveTime,theCompanyandits
Subsidiarieswillexercise,consistentwiththeterms,conditionsandrestrictionsofthisAgreement,completecontrolandsupervisionovertheirownbusinessandoperations.
ARTICLE
VI
ADDITIONAL
COVENANTS
6.1Required
Action
and
Forbearance;
Efforts
.
(a)Reasonable
Best
Efforts
.UponthetermsandsubjecttotheconditionssetforthinthisAgreementandprovidedthatatalltimestheprovisionsofSection6.2shall
governthematterssetforththerein,ParentandMergerSub,ontheonehand,andtheCompany,ontheotherhand,willusetheirrespectivereasonablebesteffortsto(A)take(orcausetobe
taken)allactions;(B)do(orcausetobedone)allthings;and(C)assistandcooperatewiththeotherPartiesindoing(orcausingtobedone)allthings,ineachcaseasarenecessary,properor
advisablepursuanttoapplicableLaworotherwisetoconsummateandmakeeffective,inthemostexpeditiousmannerpracticable,theMerger,includingbyusingreasonablebesteffortsto:
(i)causetheconditionstotheMergersetforthinArticleVIItobesatisfied;
(ii)(1)seektoobtainallconsents,waivers,approvals,ordersandauthorizationsfromGovernmentalAuthorities;and(2)makeallregistrations,declarationsand
filingswithGovernmentalAuthorities,ineachcasethatarenecessaryoradvisabletoconsummatetheMerger;and
(iii)(1)seektoobtainallconsents,waiversandapprovalsand(2)deliverallnotificationspursuanttoanyMaterialContracts(orotherapplicableContractsofthe
CompanyoritsSubsidiaries)inconnectionwiththisAgreementandtheconsummationoftheMergersoastoseektomaintainandpreservethebenefitstotheSurvivingCorporationofsuch
MaterialContracts(orotherapplicableContractsoftheCompanyoritsSubsidiaries)asofandfollowingtheconsummationoftheMerger.
(b)No
Failure
to
Take
Necessary
Action
.Inadditiontotheforegoing,subjecttothetermsandconditionsofthisAgreement,neitherParentorMergerSub,ontheone
hand,northeCompany,ontheotherhand,willtakeanyaction,orfailtotakeanyaction,thatisintendedtoorhas(orwouldreasonablybeexpectedtohave)theeffectof(i)preventing,
impairing,delayingorotherwiseadverselyaffectingtheconsummationoftheMerger;or(ii)theabilityofsuchPartytofullyperformitsobligationspursuanttothisAgreement.Forthe
avoidanceofdoubt,noactionbytheCompanytakenincompliancewithSection5.3willbeconsideredaviolationofthisSection6.1.
(c)Certain
Notices
.PromptlyfollowingthedateofthisAgreement,theCompanywilluseitsreasonablebesteffortsto(i)notifyitslegal,financeandcorporate
developmentprofessionalsoftherestrictionscontainedinSection5.3(a);and(ii)directthemtocomplywiththetermsofSection5.3(a).
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6.2Antitrust
Filings
.
(a)Filing
Under
the
HSR
Act
.EachofParentandMergerSub(andtheirrespectiveAffiliates,ifapplicable),ontheonehand,andtheCompany(anditsAffiliates,if
applicable),ontheotherhand,will,totheextentrequiredinthereasonablejudgmentofcounseltoParentandtheCompany,usetheirrespectivereasonablebesteffortsto(i)filewiththeFTC
andtheAntitrustDivisionoftheDOJaNotificationandReportFormrelatingtothisAgreementandtheMergerasrequiredbytheHSRActpromptlyfollowingthedateofthisAgreement;and
(ii)promptlyfilecomparablepre-mergerorpost-mergernotificationfilings,formsandsubmissionswithanyGovernmentalAuthoritythatarerequiredbyotherapplicableAntitrustLawsin
connectionwiththeMerger.EachofParentandtheCompanywill(A)cooperateandcoordinate(andcauseitsrespectiveAffiliatestocooperateandcoordinate,ifapplicable)withtheotherin
themakingofsuchfilings;(B)useitsrespectivereasonablebesteffortstosupplytheother(orcausetheothertobesupplied)withanyinformationthatmayberequiredinordertomakesuch
filings;(C)useitsrespectivereasonablebesteffortstosupply(orcausetheothertobesupplied)anyadditionalinformationthatreasonablymayberequiredorrequestedbytheFTC,theDOJor
theGovernmentalAuthoritiesofanyotherapplicablejurisdictioninwhichanysuchfilingismade;(D)useitsrespectivereasonablebesteffortstotakeallactionnecessaryto(1)causethe
expirationorterminationoftheapplicablewaitingperiodspursuanttotheHSRActandanyotherAntitrustLawsapplicabletotheMerger;and(2)obtainanyrequiredconsentspursuanttoany
AntitrustLawsapplicabletotheMerger,ineachcaseassoonaspracticable;and(E)priortoindependentlyparticipatinginanymaterialmeeting,orengaginginanysubstantiveconversation,
withanyGovernmentalAuthorityinrespectofanysuchfilingsoranyinvestigationsorotherinquiriesrelatingthereto,providenoticetotheotherpartyofsuchmeetingorconversationand,
unlessprohibitedbysuchGovernmentalAuthority,theopportunitytoattendorparticipate.EachofParentandMergerSub(andtheirrespectiveAffiliates,ifapplicable),ontheonehand,and
theCompany(anditsAffiliates),ontheotherhand,willpromptlyinformtheotherofanycommunicationfromanyGovernmentalAuthorityregardingtheMergerinconnectionwithsuch
filings.IfanyPartyorAffiliatethereofreceivesarequestforadditionalinformationordocumentarymaterialfromanyGovernmentalAuthoritywithrespecttotheMergerpursuanttotheHSR
ActoranyotherAntitrustLawsapplicabletotheMerger,thensuchPartywillusereasonablebesteffortstomake(orcausetobemade),assoonasreasonablypracticableandafterconsultation
withtheotherParties,anappropriateresponseincompliancewithsuchrequest.
(b)Divestitures
.Infurtheranceandnotinlimitationoftheforegoing,ifandtotheextentnecessarytoobtainclearanceoftheMergerpursuanttotheHSRActandany
otherAntitrustLawssetforthinSection7.1(b)oftheCompanyDisclosureLetter,eachofParentandMergerSub(andtheirrespectiveAffiliates)willand,solelytotheextentrequestedby
Parent,theCompanyanditsAffiliateswill:(i)offer,negotiate,committoandeffect,byconsentdecree,holdseparateorderorotherwise,(A)thesale,divestiture,licenseorotherdispositionof
anyandallofthecapitalstockorotherequityorvotinginterest,assets(whethertangibleorintangible),rights,productsorbusinessesoftheCompanyanditsSubsidiaries;and(B)anyother
restrictionsontheactivitiesoftheCompanyanditsSubsidiaries;and(ii)contest,defendandappealanyLegalProceedings,whetherjudicialoradministrative,challengingthisAgreementor
theconsummationoftheMerger.Notwithstandingtheforegoing,Parentwillnotberequired,eitherpursuanttothisSection6.2(b)orotherwise,tooffer,negotiate,committo,effector
otherwisetakeanyactionwithrespecttotheCompanyandits
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Subsidiariesortheirrespectivebusinesses,productlines,assets,permits,operations,rights,orinterestthereiniftakingsuchactionwouldreasonablybeexpectedtobemateriallyadversetothe
business,financialconditionorresultsofoperationsoftheCompanyanditsSubsidiariestakenasawhole.Fortheavoidanceofdoubt,Parentwillnotberequired,eitherpursuanttothis
Section6.2(b)orotherwise,tooffer,negotiate,committo,effectorotherwisetakeanyactionwithrespecttotheParentoranyofitsAffiliatesortheirrespectivebusinesses,productlines,
assets,permits,operations,rights,orinteresttherein(otherthanwithrespecttotheCompanyanditsSubsidiariestotheextentrequiredbythisSection6.2(b))iftakingsuchactionwould
reasonablybeexpectedto(A)haveamaterialimpactonthebenefitsexpectedtobederivedfromtheMergerbyParentor(B)havemorethananimmaterialimpactonanybusinessorproduct
lineofParentanditsSubsidiaries.
6.3Proxy
Statement
and
Other
Required
SEC
Filings
.
(a)Preparation
.PromptlyaftertheexecutionofthisAgreementtheCompanywillprepare(withParentsreasonablecooperation)andfileaspromptlyaspracticable,
andinanyeventwithin15BusinessDaysafterthedateofthisAgreement,withtheSECapreliminaryproxystatementtobesenttotheCompanyStockholdersinconnectionwiththeCompany
StockholdersMeeting(theproxystatement,includinganyamendmentsorsupplements,theProxy
Statement
)relatingtotheCompanyStockholderMeeting.TheCompanywillnotfilethe
ProxyStatementwiththeSECwithoutfirstprovidingParentanditscounselareasonableopportunitytoreviewandcommentthereon,andtheCompanywillgivedueconsiderationtoall
reasonableadditions,deletionsorchangessuggestedbyParentoritscounsel.SubjecttoSection5.3,theCompanymustincludetheCompanyBoardRecommendationintheProxyStatement.
TheCompanywilluseitsreasonablebesteffortstoresolveallSECcomments,ifany,withrespecttotheProxyStatementaspromptlyaspracticableafterreceiptthereof.Promptlyfollowing
confirmationbytheSECthattheSEChasnofurthercomments,theCompanywillcausetheProxyStatementindefinitiveformtobemailedtotheCompanyStockholders.
(b)Assistance
.EachoftheCompany,ParentandMergerSubwillfurnishallinformationconcerningsuchPersonanditsAffiliatestotheother,andprovidesuchother
assistance,asmaybereasonablyrequestedbysuchotherPartytobeincludedthereinandwillotherwisereasonablyassistandcooperatewiththeotherinthepreparation,filinganddistribution
oftheProxyStatementandtheresolutionofanycommentstoeitherreceivedfromtheSEC.
(c)SEC
Correspondence
.ThePartieswillnotifyeachotherpromptlyofthereceiptofanycomments,whetherwrittenororal,fromtheSECoritsstaffandofany
requestbytheSECoritsstaffforamendmentsorsupplementstotheProxyStatement,anyOtherRequiredCompanyFilingoranyOtherRequiredParentFiling,orforadditionalinformation,
andwillsupplyeachotherwithcopiesofallcorrespondencebetweenitoranyofitsRepresentatives,ontheonehand,andtheSECoritsstaff,ontheotherhand,withrespecttosuchfilings.
(d)No
Amendments
.ExceptinconnectionwithaCompanyBoardRecommendationChange,noamendmentorsupplementtotheProxyStatementwillbemadebythe
CompanywithouttheapprovalofParent,whichapprovalwillnotbeunreasonablywithheld,conditionedordelayed.
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(e)Other
Required
Company
Filing
.IftheCompanydeterminesthatitisrequiredtofileanydocumentotherthantheProxyStatementwiththeSECinconnectionwith
theMergerpursuanttoapplicableLaw(suchdocument,asamendedorsupplemented,anOther
Required
Company
Filing
),thentheCompanywilluseitsreasonablebesteffortsto
promptlyprepareandfilesuchOtherRequiredCompanyFilingwiththeSEC.TheCompanywilluseitsreasonablebesteffortstocausetheProxyStatementandanyOtherRequiredCompany
FilingtocomplyastoforminallmaterialrespectswiththeapplicablerequirementsoftheExchangeActandtherulesoftheSECandNYSE.ExceptinconnectionwithaCompanyBoard
RecommendationChangeorthereafter,theCompanymaynotfileanyOtherRequiredCompanyFilingwiththeSECwithoutfirstprovidingParentanditscounselareasonableopportunityto
reviewandcommentthereon.
(f)Other
Required
Parent
Filing
.IfParentorMergerSubdeterminesthatitisrequiredtofileanydocumentwiththeSECasaresultoftheMergerortheCompany
StockholderMeetingpursuanttoapplicablelaw(anOther
Required
Parent
Filing
),thenParentandMergerSubwilluseitsreasonablebesteffortstopromptlyprepareandfilesuchOther
RequiredParentFilingwiththeSEC.ExceptinconnectionwithaCompanyBoardRecommendationChangeorthereafter,neitherParentnorMergerSubmayfileanyOtherRequiredParent
FilingwiththeSECwithoutfirstprovidingtheCompanyanditscounselareasonableopportunitytoreviewandcommentthereon.
(g)Accuracy;
Supplied
Information
.
(i)Company
.Onthedateoffiling,thedateofmailingtotheCompanyStockholders(ifapplicable)andatthetimeoftheCompanyStockholderMeeting,
neithertheProxyStatementnoranyOtherRequiredCompanyFilingwillcontainanyuntruestatementofamaterialfactoromittostateanymaterialfactrequiredtobestatedthereinor
necessaryinordertomakethestatementstherein,inlightofthecircumstancesunderwhichtheyaremade,notfalseormisleading.Notwithstandingtheforegoing,nocovenantismadebythe
CompanywithrespecttoanyinformationsuppliedbyParent,MergerSuboranyoftheirAffiliatesforinclusionorincorporationbyreferenceintheProxyStatementoranyOtherRequired
CompanyFiling.TheinformationsuppliedbytheCompanyforinclusionorincorporationbyreferenceintheProxyStatementwillnot,atthetimethatsuchProxyStatementisfiledwiththe
SEC,containanyuntruestatementofamaterialfactoromittostateanymaterialfactrequiredtobestatedthereinornecessaryinordertomakethestatementstherein,inlightofthe
circumstancesunderwhichtheyaremade,notmisleading.
(ii)Parent
.TheinformationsuppliedbyParent,MergerSubandtheirrespectiveAffiliatesforinclusionorincorporationbyreferenceintheProxyStatement
oranyOtherRequiredCompanyFilingwillnot,atthetimethattheProxyStatementorsuchOtherRequiredCompanyFilingisfiledwiththeSEC,containanyuntruestatementofamaterial
factoromittostateanymaterialfactrequiredtobestatedthereinornecessaryinordertomakethestatementstherein,inlightofthecircumstancesunderwhichtheyaremade,notmisleading.
Notwithstandingtheforegoing,nocovenantismadebyParentorMergerSubwithrespecttoanyinformationsuppliedbytheCompanyforinclusionorincorporationbyreferenceintheProxy
StatementoranyOtherRequiredCompanyFiling.
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6.4Company
Stockholder
Meeting
.
(a)Call
of
Company
Stockholder
Meeting
.TheCompanywilltakeallactionnecessaryinaccordancewiththeDGCL,theCharter,theBylawsandtherulesofNYSEto
establisharecorddatefor,dulycall,givenoticeof,conveneandholdameetingofitsstockholders(theCompany
Stockholder
Meeting
)aspromptlyasreasonablypracticablefollowing
themailingoftheProxyStatementtotheCompanyStockholdersforthepurposeofobtainingtheRequisiteStockholderApproval.NotwithstandinganythingtothecontraryinthisAgreement,
theCompanywillconvene,subjecttoSection6.4(b),andholdtheCompanyStockholderMeetingonoraroundthe20thBusinessDayfollowingthemailingoftheProxyStatementtothe
CompanyStockholders.SubjecttoSection5.3andunlesstherehasbeenaCompanyBoardRecommendationChange,theCompanywillinclude(i)theCompanyBoardRecommendationinthe
ProxyStatement;and(ii)useitsreasonablebesteffortstosolicitproxiestoobtaintheRequisiteStockholderApproval.
(b)Adjournment
of
Company
Stockholder
Meeting
.NotwithstandinganythingtothecontraryinthisAgreement,theCompanywillbepermittedtopostponeoradjourn
theCompanyStockholderMeetingif,butonlyif,(i)thereareholdersofaninsufficientsharesoftheCompanyCommonStockpresentorrepresentedbyproxyattheCompanyStockholder
MeetingtoconstituteaquorumattheCompanyStockholderMeeting;(ii)theCompanyisrequiredtopostponeoradjourntheCompanyStockholderMeetingbyapplicableLaw,orderora
requestfromtheSECoritsstaff;or(iii)theCompanyBoardhasdeterminedingoodfaith(afterconsultationwithoutsidelegalcounsel)thatitisrequiredbyapplicableLawtopostponeor
adjourntheCompanyStockholderMeeting,including,iftheCompanyBoardhasdeterminedingoodfaith(afterconsultationwithoutsidelegalcounsel)thatitisrequiredbyapplicableLaw,in
ordertogivetheCompanyStockholderssufficienttimetoevaluateanyinformationordisclosurethattheCompanyhassenttotheCompanyStockholdersorotherwisemadeavailabletothe
CompanyStockholdersbyissuingapressrelease,filingmaterialswiththeSECorotherwise.InnoeventwilltheCompanyStockholderMeetingbepostponedoradjourned(i)bymorethan
10calendardaysatatimewithoutthepriorwrittenconsentofParent;or(ii)withrespecttoSection6.4(b)(i),bymorethan30calendardaysafterthedateonwhichtheCompanyStockholder
Meetingwas(orwasrequiredtobe)originallyscheduledwithoutthepriorwrittenconsentofParent.InnoeventwilltherecorddateoftheCompanyStockholderMeetingbechangedwithout
Parentspriorwrittenconsent,unlessrequiredbyapplicableLaw.
6.5Anti-Takeover
Laws
.TheCompanyandtheCompanyBoardwill(a)takeallactionswithintheirpowertoensurethatnoanti-takeoverstatuteorsimilarstatuteor
regulationisorbecomesapplicabletotheMerger;and(b)ifanyanti-takeoverstatuteorsimilarstatuteorregulationbecomesapplicabletotheMerger,takeallactionwithintheirpowerto
ensurethattheMergermaybeconsummatedaspromptlyaspracticableonthetermscontemplatedbythisAgreementandotherwisetominimizetheeffectofsuchstatuteorregulationonthe
Merger.
6.6Access
.AtalltimesduringtheperiodcommencingwiththeexecutionanddeliveryofthisAgreementandcontinuinguntiltheearliertooccuroftheterminationofthis
AgreementpursuanttoArticleVIIIandtheEffectiveTime,theCompanywillaffordParentanditsRepresentativesreasonableaccessduringnormalbusinesshours,uponreasonableadvance
notice,to
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theproperties,booksandrecords,facilitiesandpersonnelandRepresentativesoftheCompany,exceptthattheCompanymayrestrictorotherwiseprohibitaccesstoanydocumentsor
informationtotheextentthat(a)anyapplicableLaworregulationrequirestheCompanytorestrictorotherwiseprohibitaccesstosuchdocumentsorinformation;(b)accesstosuchdocuments
orinformationwouldgiverisetoamaterialriskofwaivinganyattorney-clientprivilege,workproductdoctrineorotherprivilegeapplicabletosuchdocumentsorinformationsolongasthe
CompanyhastakenallreasonablestepstopermitinspectionofortodisclosesuchinformationandtorespondinatimelymannertoallsubsequentqueriesbyParentanditsRepresentatives
basedonsuchinformationonabasisthatdoesnotcompromisetheCompanysattorney-clientorotherprivilegewithrespectthereto;or(c)accesstoaContractineffectasofthedateofthis
AgreementtowhichtheCompanyoranyofitsSubsidiariesisapartyorotherwiseboundwouldviolateorcauseadefaultpursuantto,orgiveathirdPersontherighttoterminateoraccelerate
therightspursuantto,suchContract.SubjecttoapplicableLaw,theCompanywillprovideParentwithreportsoftheCompanyreasonablyrequestedbyParent.Anyinvestigationconducted
pursuanttotheaccesscontemplatedbythisSection6.6willbeconductedinamannerthatdoesnotunreasonablyinterferewiththeconductofthebusinessoftheCompanyanditsSubsidiaries
orcreateariskofdamageordestructiontoanypropertyorassetsoftheCompanyoritsSubsidiaries.AnyaccesstothepropertiesoftheCompanyanditsSubsidiarieswillbesubjecttothe
Companysreasonablesecuritymeasuresandinsurancerequirementsandwillnotincludetherighttoperforminvasivetesting.ThetermsandconditionsoftheConfidentialityAgreementwill
applytoanyinformationobtainedbyParentoranyofitsRepresentativesinconnectionwithanyinvestigationconductedpursuanttotheaccesscontemplatedbythisSection6.6.Allrequests
foraccesspursuanttothisSection6.6mustbedirectedtotheGeneralCounseloftheCompany,oranotherpersondesignatedinwritingbytheCompany.
6.7Section
16(b)
Exemption
.TheCompanywilltakeallactionsreasonablynecessarytocausetheMerger,andanydispositionsofequitysecuritiesoftheCompany(including
derivativesecurities)inconnectionwiththeMergerbyeachindividualwhoisadirectororexecutiveofficeroftheCompany,tobeexemptpursuanttoRule16b-3promulgatedunderthe
ExchangeAct.ParentwilltakeallactionsreasonablynecessarytocausetheMerger,andanyacquisitionsofequitysecuritiesofParent(includingderivativesecurities)inconnectionwiththe
MergerbyeachindividualwhoiscontemplatedtobecomeadirectororexecutiveofficerofParent,tobeexemptpursuanttoRule16b-3promulgatedundertheExchangeAct.
6.8Directors
and
Officers
Exculpation,
Indemnification
and
Insurance
.
(a)Indemnified
Persons
.TheSurvivingCorporationwill(andParentwillcausetheSurvivingCorporationto)honorandfulfill,inallrespects,theobligationsofthe
CompanypursuanttoanyindemnificationagreementssetforthonSection6.8(a)oftheCompanyDisclosureLetterineffectonthedateofthisAgreementbetweentheCompany,ontheone
hand,andanyoftheirrespectivecurrentorformerdirectors,officersoremployees(andanypersonwhobecomesadirector,officeroremployeeoftheCompanyoranyofitsSubsidiariesprior
totheEffectiveTime),ontheotherhand(collectively,theIndemnified
Persons
).Inaddition,duringtheperiodcommencingattheEffectiveTimeandendingonthesixthanniversaryof
theEffectiveTime,theSurvivingCorporationwill(andParentwillcausetheSurvivingCorporationto)causethecertificatesofincorporation,bylawsandothersimilarorganizational
documentsoftheSurviving
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Corporationtocontainprovisionswithrespecttoindemnification,exculpationandtheadvancementofexpensesthatareatleastasfavorableastheindemnification,exculpationand
advancementofexpensesprovisionssetforthintheCharterandtheBylawsasofthedateofthisAgreement.Duringsuchsix-yearperiod,suchprovisionsmaynotberepealed,amendedor
otherwisemodifiedinanymannerexceptasrequiredbyapplicableLaw.
(b)Indemnification
Obligation
.WithoutlimitingthegeneralityoftheprovisionsofSection6.8(a),duringtheperiodcommencingattheEffectiveTimeandendingon
thesixthanniversaryoftheEffectiveTime,theSurvivingCorporationwill(andParentwillcausetheSurvivingCorporationto)indemnifyandholdharmless,tothefullestextentpermittedby
applicableLaworpursuanttoanyindemnificationagreementssetforthonSection6.8(a)oftheCompanyDisclosureLetterwiththeCompanyineffectonthedateofthisAgreement,each
IndemnifiedPersonfromandagainstanycosts,feesandexpenses(includingattorneysfeesandinvestigationexpenses),judgments,fines,losses,claims,damages,liabilitiesandamountspaid
insettlementorcompromiseinconnectionwithanyLegalProceeding,whethercivil,criminal,administrativeorinvestigative,totheextentthatsuchLegalProceedingarises,directlyor
indirectly,outoforpertains,directlyorindirectly,to(i)anyactionoromission,orallegedactionoromission,insuchIndemnifiedPersonscapacityasadirector,officer,employeeoragentof
theCompanyoranyofitsSubsidiariesorotherAffiliates(regardlessofwhethersuchactionoromission,orallegedactionoromission,occurredpriorto,atoraftertheEffectiveTime);and
(ii)theMerger,aswellasanyactionstakenbytheCompany,ParentorMergerSubwithrespectthereto,exceptthatif,atanytimepriortothesixthanniversaryoftheEffectiveTime,any
IndemnifiedPersondeliverstoParentawrittennoticeassertingaclaimforindemnificationpursuanttothisSection6.8(b),thentheclaimassertedinsuchnoticewillsurvivethesixth
anniversaryoftheEffectiveTimeuntilsuchclaimisfullyandfinallyresolved.IntheeventofanysuchLegalProceeding,(A)theSurvivingCorporationwillhavetherighttocontrolthe
defensethereofaftertheEffectiveTime;(B)eachIndemnifiedPersonwillbeentitledtoretainhisorherowncounsel(thefeesandexpensesofwhichwillbepaidbytheSurviving
Corporation),whetherornottheSurvivingCorporationelectstocontrolthedefenseofanysuchLegalProceeding;(C)theSurvivingCorporationwilladvanceallfeesandexpenses(including
feesandexpensesofanycounsel)asincurredbyanIndemnifiedPersoninthedefenseofsuchLegalProceeding,whetherornottheSurvivingCorporationelectstocontrolthedefenseofany
suchLegalProceedinguponreceiptofanundertakingbyoronbehalfofsuchIndemnifiedPersontorepaysuchamountifitisultimatelydeterminedthatsuchIndemnifiedPersonisnotentitled
tobeindemnified;and(D)noIndemnifiedPersonwillbeliableforanysettlementofsuchLegalProceedingeffectedwithouthisorherpriorwrittenconsent.Notwithstandinganythingtothe
contraryinthisAgreement,noneofParent,theSurvivingCorporationnoranyoftheirrespectiveAffiliateswillsettleorotherwisecompromiseorconsenttotheentryofanyjudgmentwith
respectto,orotherwiseseektheterminationof,anyLegalProceedingforwhichindemnificationmaybesoughtbyanIndemnifiedPersonpursuanttothisAgreementunlesssuchsettlement,
compromise,consentorterminationincludesanunconditionalreleaseofallIndemnifiedPersonsfromallliabilityarisingoutofsuchLegalProceeding.Anydeterminationrequiredtobemade
withrespecttowhethertheconductofanyIndemnifiedPersoncompliesorcompliedwithanyapplicablestandardwillbemadebyindependentlegalcounselselectedbytheSurviving
Corporation(whichcounsel
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willbereasonablyacceptabletosuchIndemnifiedPerson),thefeesandexpensesofwhichwillbepaidbytheSurvivingCorporation.
(c)D&O
Insurance
.DuringtheperiodcommencingattheEffectiveTimeandendingonthesixthanniversaryoftheEffectiveTime,theSurvivingCorporationwill
(andParentwillcausetheSurvivingCorporationto)maintainineffecttheCompanyscurrentdirectorsandofficersliabilityinsurance(D&O
Insurance
)inrespectofactsoromissions
occurringatorpriortotheEffectiveTimeonterms(includingwithrespecttocoverage,conditions,retentions,limitsandamounts)thatareequivalenttothoseoftheD&OInsurance.In
satisfyingitsobligationspursuanttothisSection6.8(c),theSurvivingCorporationwillnotbeobligatedtopayannualpremiumsinexcessof250%oftheamountpaidbytheCompanyfor
coverageforitslastfullfiscalyear,whichamountissetforthonSection6.8(c)oftheCompanyDisclosureLetter(such250%amount,theMaximum
Annual
Premium
).Iftheannual
premiumsofsuchinsurancecoverageexceedtheMaximumAnnualPremium,thentheSurvivingCorporationwillbeobligatedtoobtainapolicywiththegreatestcoverageavailableforacost
notexceedingtheMaximumAnnualPremiumfromaninsurancecarrierwiththesameorbettercreditratingastheCompanyscurrentdirectorsandofficersliabilityinsurancecarrier.Priorto
theEffectiveTime,andinlieuofmaintainingtheD&OInsurancepursuanttothisSection6.8(c),theCompanymay(orifParentrequests,theCompanywill)purchaseaprepaidtailpolicy
withrespecttotheD&OInsurancefromaninsurancecarrierwiththesameorbettercreditratingastheCompanyscurrentdirectorsandofficersliabilityinsurancecarriersolongasthe
annualcostforsuchtailpolicydoesnotexceedtheMaximumAnnualPremium.IftheCompanypurchasessuchatailpolicypriortotheEffectiveTime,theSurvivingCorporationwill
(andParentwillcausetheSurvivingCorporationto)maintainsuchtailpolicyinfullforceandeffectandcontinuetohonoritsobligationsthereunderforsolongassuchtailpolicyisinfull
forceandeffect.
(d)Successors
and
Assigns
.IfParent,theSurvivingCorporationoranyoftheirrespectivesuccessorsorassignswill(i)consolidatewithormergeintoanyotherPerson
andnotbethecontinuingorsurvivingcorporationorentityinsuchconsolidationormerger;or(ii)transferallorsubstantiallyallofitspropertiesandassetstoanyPerson,thenproper
provisionswillbemadesothatthesuccessorsandassignsofParent,theSurvivingCorporationoranyoftheirrespectivesuccessorsorassignswillassumealloftheobligationsofParentand
theSurvivingCorporationsetforthinthisSection6.8.
(e)No
Impairment
.TheobligationssetforthinthisSection6.8maynotbeterminated,amendedorotherwisemodifiedinanymannerthatadverselyaffectsany
IndemnifiedPerson(oranyotherpersonwhoisabeneficiarypursuanttotheD&OInsuranceorthetailpolicyreferredtoinSection6.8(c)(andtheirheirsandrepresentatives))withoutthe
priorwrittenconsentofsuchaffectedIndemnifiedPersonorotherperson.EachoftheIndemnifiedPersonsorotherpersonswhoarebeneficiariespursuanttotheD&OInsuranceorthetail
policyreferredtoinSection6.8(c)(andtheirheirsandrepresentatives)areintendedtobethirdpartybeneficiariesofthisSection6.8,withfullrightsofenforcementasifaParty.Therightsof
theIndemnifiedPersons(andotherpersonswhoarebeneficiariespursuanttotheD&OInsuranceorthetailpolicyreferredtoinSection6.8(c)(andtheirheirsandrepresentatives))pursuant
tothisSection6.8willbeinadditionto,andnotinsubstitutionfor,anyotherrightsthatsuchpersonsmayhavepursuantto(i)theCharterandBylaws;
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(ii)thesimilarorganizationaldocumentsoftheSubsidiariesoftheCompany;(iii)anyandallindemnificationagreementsenteredintowiththeCompanyoranyofitsSubsidiaries;or
(iv)applicableLaw(whetheratlaworinequity).
(f)Other
Claims
.NothinginthisAgreementisintendedto,orwillbeconstruedto,release,waiveorimpairanyrightstodirectorsandofficersinsuranceclaims
pursuanttoanyapplicableinsurancepolicyorindemnificationagreementthatisorhasbeeninexistencewithrespecttotheCompanyoranyofitsSubsidiariesforanyoftheirrespective
directors,officersorotheremployees,itbeingunderstoodandagreedthattheindemnificationprovidedforinthisSection6.8isnotpriortoorinsubstitutionforanysuchclaimspursuantto
suchpoliciesoragreements.
6.9Employee
Matters
.
(a)Acknowledgement
.Parentherebyacknowledgesandagreesthatachangeofcontrol(orsimilarphrase)withinthemeaningofeachoftheEmployeePlans,as
applicable,willoccurasoftheEffectiveTime.
(b)Existing
Arrangements
.FromandaftertheEffectiveTime,theSurvivingCorporationwill(andParentwillcausetheSurvivingCorporationto)honorallofthe
EmployeePlansandcompensationandseverancearrangementsinaccordancewiththeirtermsasineffectimmediatelypriortotheEffectiveTime.Notwithstandingtheprecedingsentence,but
subjecttoSection6.9(c),nothingwillrequireParent,theSurvivingCorporationoranySubsidiarythereoftocontinueanyEmployeePlan,CompanyPlanorComparablePlanorprohibitthe
SurvivingCorporationoranyofitsSubsidiariesfromamendingorterminatinganysuchplansinaccordancewiththeirtermsorifotherwiserequiredpursuanttoapplicableLaw.
(c)Employment;
Benefits
.TheSurvivingCorporationoroneofitsSubsidiarieswill(andParentwillcausetheSurvivingCorporationoroneofitsSubsidiariesto)
continuetheemploymentofallemployeesoftheCompanyanditsSubsidiariesasoftheEffectiveTimebytakingsuchactions,ifany,asarerequiredbyapplicableLaw.Foraperiodofone
yearfollowingtheEffectiveTime,theSurvivingCorporationanditsSubsidiarieswill(andParentwillcausetheSurvivingCorporationanditsSubsidiariesto)either(i)maintainforthebenefit
ofeachContinuingEmployeetheEmployeePlans(otherthanequity-basedbenefits,includingforallpurposesofthisSection6.9(c)undertheESPP,and,subjecttoSection6.9(b),individual
employmentagreements)oftheSurvivingCorporationoranyofitsSubsidiaries(theCompany
Plans
)atbenefitlevelsthatare,intheaggregate,nolessthanthoseineffectattheCompany
oritsapplicableSubsidiariesonthedateofthisAgreement,andprovidecompensationandbenefits(includingforallpurposesofthisSection6.9(c),vacationandpaidtimeoffbenefits)toeach
ContinuingEmployeepursuanttosuchCompanyPlans;(ii)providecompensation,benefitsandseverancepaymentsandbenefits(otherthanequity-basedbenefitsand,subjecttoSection6.9(b),
individualemploymentagreements)toeachContinuingEmployeethat,takenasawhole,arenolessfavorableintheaggregatethanthecompensation,benefitsandseverancepayments(other
thanequity-basedbenefitsandindividualemploymentagreements)providedtosuchContinuingEmployeeimmediatelypriortotheEffectiveTime(Comparable
Plans
);or(iii)provide
somecombinationofCompanyPlansandComparable
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PlanssuchthateachContinuingEmployeereceivescompensation,benefitsandseverancepayments(otherthanequity-basedbenefitsand,subjecttoSection6.9(b),individualemployment
agreements)that,takenasawhole,arenolessfavorableintheaggregatethanthecompensation,benefitsandseverancepaymentsandbenefits(otherthanequity-basedbenefitsandindividual
employmentagreements)providedtosuchContinuingEmployeeimmediatelypriortotheEffectiveTime.Ineachcase,basecompensationandtargetincentivecompensationopportunitywill
notbedecreasedforaperiodofoneyearfollowingtheEffectiveTimeforanyContinuingEmployeeemployedduringthatperiodexceptintheordinarycourseofbusinessconsistentwiththe
Companyspastpractice.ForContinuingEmployeeswhoterminateemploymentduringtheone-yearperiodfollowingtheEffectiveTime,theSurvivingCorporationwill(andParentwillcause
theSurvivingCorporationto)provideseverancepaymentsandbenefitstoeligibleemployeesinaccordancewiththeCompanysseveranceplans,guidelinesandpracticesasineffectonthedate
ofthisAgreement.
(d)New
Plans
.TotheextentthataCompanyPlanorComparablePlanismadeavailabletoanyContinuingEmployeeatoraftertheEffectiveTime,otherthanwith
respecttotheNewPlanslistedonSection6.9(d)oftheCompanyDisclosureLetter,theSurvivingCorporationanditsSubsidiarieswill(andParentwillcausetheSurvivingCorporationandits
Subsidiariesto)causetobegrantedtosuchContinuingEmployeecreditforallservicewiththeCompanyanditsSubsidiariespriortotheEffectiveTimeforpurposesofeligibilityto
participate,vestingandentitlementtobenefitswherelengthofserviceisrelevant(includingforpurposesofvacationaccrualandseverancepayentitlement,butexcludingforpurposesof
benefitaccrualsunderanydefinedbenefitpensionplanorpost-employmentwelfareplan),exceptthatsuchserviceneednotbecreditedtotheextentthatitwouldresultinduplicationof
benefits.Inaddition,andwithoutlimitingthegeneralityoftheforegoing,(i)eachContinuingEmployeewillbeimmediatelyeligibletoparticipate,withoutanywaitingperiod,inanyandall
employeebenefitplanssponsoredbytheSurvivingCorporationanditsSubsidiaries(otherthantheCompanyPlans)(suchplans,theNew
Plans
)totheextentthatcoveragepursuanttoany
suchNewPlanreplacescoveragepursuanttoacomparableCompanyPlaninwhichsuchContinuingEmployeeparticipatesimmediatelybeforetheEffectiveTime(suchplans,theOld
Plans
);(ii)forpurposesofeachNewPlanprovidingmedical,dental,pharmaceutical,visionordisabilitybenefitstoanyContinuingEmployee,theSurvivingCorporationwillcauseallwaiting
periods,pre-existingconditionexclusions,evidenceofinsurabilityrequirementsandactively-at-workorsimilarrequirementsofsuchNewPlantobewaivedforsuchContinuingEmployeeand
hisorhercovereddependents,totheextentwaivedunderthecorrespondingOldPlan,andtheSurvivingCorporationwillcauseanyeligibleexpensesincurredbysuchContinuingEmployee
andhisorhercovereddependentsduringtheportionoftheplanyearoftheOldPlanendingonthedatethatsuchContinuingEmployeesparticipationinthecorrespondingNewPlanbeginsto
begivenfullcreditpursuanttosuchNewPlanforpurposesofsatisfyingalldeductible,coinsuranceandmaximumout-of-pocketrequirementsapplicabletosuchContinuingEmployeeandhis
orhercovereddependentsfortheapplicableplanyearasifsuchamountshadbeenpaidinaccordancewithsuchNewPlan,totheextentcreditedunderthecorrespondingOldPlan;and
(iii)credittheaccountsofsuchContinuingEmployeespursuanttoanyNewPlanthatisaflexiblespendingplanwithanyunusedbalanceintheaccountofsuchContinuingEmployee.Any
vacationorpaidtimeoffaccruedbutunusedbyaContinuingEmployeeasofimmediatelypriortotheEffectiveTimewillbecreditedtosuchContinuingEmployeefollowingthe
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EffectiveTimeinaccordancewiththeCompanysvacationorpaidtimeoffpoliciesineffectimmediatelypriortotheEffectiveTime.
(e)No
Third
Party
Beneficiary
Rights
.NotwithstandinganythingtothecontrarysetforthinthisAgreement,thisSection6.9willnotbedeemedto(i)guarantee
employmentforanyperiodoftimefor,orprecludetheabilityofParent,theSurvivingCorporationoranyoftheirrespectiveSubsidiariestoterminatetheemploymentofanyContinuing
Employeeforanyreason;(ii)requireParent,theSurvivingCorporationoranyoftheirrespectiveSubsidiariestocontinueanyCompanyPlanorpreventtheamendment,modificationor
terminationthereofaftertheEffectiveTime,solongastheSurvivingCorporationanditsSubsidiariescomplywiththesecondsentenceofSection6.9(c)above;or(iii)createanythirdparty
beneficiaryrightsinanyPerson.
6.10Obligations
of
Merger
Sub
.ParentwilltakeallactionnecessarytocauseMergerSubandtheSurvivingCorporationtoperformtheirrespectiveobligationspursuanttothis
AgreementandtoconsummatetheMergeruponthetermsandsubjecttotheconditionssetforthinthisAgreement.ParentandMergerSubwillbejointlyandseverallyliableforthefailureby
eitherofthemtoperformanddischargeanyoftheirrespectivecovenants,agreementsandobligationspursuanttothisAgreement.
6.11Notification
of
Certain
Matters
.
(a)Notification
by
the
Company
.AtalltimesduringtheperiodcommencingwiththeexecutionanddeliveryofthisAgreementandcontinuinguntiltheearliertooccur
oftheterminationofthisAgreementpursuanttoArticleVIIIandtheEffectiveTime,theCompanywillgivepromptnoticetoParentuponbecomingawarethatanyrepresentationorwarranty
madebyitinthisAgreementhasbecomeuntrueorinaccurateinanymaterialrespect,orofanyfailurebytheCompanytocomplywithorsatisfyinanymaterialrespectanycovenant,condition
oragreementtobecompliedwithorsatisfiedbyitpursuanttothisAgreement,ineachcaseifandonlytotheextentthatsuchuntruth,inaccuracy,orfailurewouldreasonablybeexpectedto
causeanyoftheconditionstotheobligationsofParentandMergerSubtoconsummatetheMergersetforthinSection7.2(a)orSection7.2(b)tofailtobesatisfiedattheClosing,exceptthatno
suchnotificationwillaffectorbedeemedtomodifyanyrepresentationorwarrantyoftheCompanysetforthinthisAgreementortheconditionstotheobligationsofParentandMergerSubto
consummatetheMergerortheremediesavailabletothePartiesunderthisAgreement.ThetermsandconditionsoftheConfidentialityAgreementapplytoanyinformationprovidedtoParent
pursuanttothisSection6.11(a).
(b)Notification
by
Parent
.AtalltimesduringtheperiodcommencingwiththeexecutionanddeliveryofthisAgreementandcontinuinguntiltheearliertooccurofthe
terminationofthisAgreementpursuanttoArticleVIIIandtheEffectiveTime,ParentwillgivepromptnoticetotheCompanyuponbecomingawarethatanyrepresentationorwarrantymade
byParentorMergerSubinthisAgreementhasbecomeuntrueorinaccurateinanymaterialrespect,orofanyfailurebyParentorMergerSubtocomplywithorsatisfyinanymaterialrespect
anycovenant,conditionoragreementtobecompliedwithorsatisfiedbyitpursuanttothisAgreement,ineachcaseifandonlytotheextentthatsuchuntruth,inaccuracyorfailurewould
reasonablybeexpectedtocauseanyoftheconditionstotheobligationsoftheCompanytoconsummatetheMergersetforthin
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Section7.3(a)orSection7.3(b)tofailtobesatisfiedattheClosing,exceptthatnosuchnotificationwillaffectorbedeemedtomodifyanyrepresentationorwarrantyofParentorMergerSub
setforthinthisAgreementortheconditionstotheobligationsoftheCompanytoconsummatetheMergerortheremediesavailabletothePartiesunderthisAgreement.Thetermsand
conditionsoftheConfidentialityAgreementapplytoanyinformationprovidedtotheCompanypursuanttothisSection6.11(b).
6.12Public
Statements
and
Disclosure
.TheinitialpressreleaseconcerningthisAgreementandtheMergerwillbeajointpressreleasereasonablyacceptabletotheCompanyand
Parent.Thereafter,theCompany(unlesstheCompanyBoardhasmadeaCompanyBoardRecommendationChange)willconsultwithParentbefore(a)participatinginanymediainterviews;
(b)engaginginanymeetingsorcallswithanalysts,institutionalinvestorsorothersimilarPersons;or(c)providinganystatementsthatarepublicorarereasonablylikelytobecomepublic,in
anysuchcasetotheextentrelatingtotheMerger,exceptthattheCompanywillnotbeobligatedtoengageinsuchconsultationwithrespecttocommunicationsthatarerequiredbyapplicable
Law,regulationorstockexchangeruleorlistingagreement.ExceptasrequiredbyapplicableLaw,regulation,stockexchangeruleorlistingagreement,ParentandtheCompanywillnotissue
anysubsequentpressreleaseconcerningthisAgreementortheMergerwithouttheotherPartysconsent.
6.13Transaction
Litigation
.PriortotheEffectiveTime,theCompanywillprovideParentwithpromptnoticeofallTransactionLitigation(includingbyprovidingcopiesofall
pleadingswithrespectthereto)andkeepParentreasonablyinformedwithrespecttothestatusthereof.TheCompanywill(a)giveParenttheopportunitytoparticipateinthedefense,settlement
orprosecutionofanyTransactionLitigation;and(b)consultwithParentwithrespecttothedefense,settlementandprosecutionofanyTransactionLitigationandwillconsideringoodfaith
ParentsadvicewithrespecttosuchTransactionLitigation.TheCompanymaynotcompromise,settleorcometoanarrangementregarding,oragreetocompromise,settleorcometoan
arrangementregarding,anyTransactionLitigationunlessParenthasconsentedtheretoinwriting.
6.14Stock
Exchange
Delisting;
Deregistration
.PriortotheEffectiveTime,theCompanywillcooperatewithParentanduseitsreasonablebesteffortstotake,orcausetobe
taken,allactionsanddo,orcausetobedone,allthingsreasonablynecessary,properoradvisableonitspartpursuanttoapplicableLawandtherulesandregulationsofNYSEtocause(a)the
delistingoftheCompanyCommonStockfromNYSEaspromptlyaspracticableaftertheEffectiveTime;and(b)thederegistrationoftheCompanyCommonStockpursuanttotheExchange
Actaspromptlyaspracticableaftersuchdelisting.
6.15Additional
Agreements
.IfatanytimeaftertheEffectiveTimeanyfurtheractionisnecessaryordesirabletocarryoutthepurposesofthisAgreementortovesttheSurviving
Corporationwithfulltitletoallproperties,assets,rights,approvals,immunitiesandfranchisesofeitheroftheCompanyorMergerSub,thentheproperofficersanddirectorsofeachPartywill
usetheirreasonablebesteffortstotakesuchaction.Withoutlimitingtheforegoing,theCompanywillusereasonablebesteffortstotaketheactionssetforthonSection6.15oftheCompany
DisclosureLetter.
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6.16Convertible
Notes;
Call
Options
and
Warrants.
(a)Convertible
Notes
.PriortotheEffectiveTime,theCompanywilltakeallactionsnecessaryinaccordancewiththetermsoftheIndenture,datedasof
November12,2014,betweentheCompanyandU.S.BankNationalAssociation(theTrustee
)(asamendedorsupplementedpriortothedateofthisAgreement,theNotes
Indenture
),
includingthegivingofanynoticesthatmayberequiredinconnectionwithanyrepurchasesorconversionsoftheConvertibleNotesoccurringasaresultoftheMergerconstitutinga
FundamentalChange(asdefinedtherein)andotherwisereasonablyrequestedbyParentinrelationtoanyactionoreventthatisrequiredbyorpursuanttotheNotesIndenture.
(b)Notifications
under
Notes
Indenture
.TheCompanyshallprovideParentanditscounselreasonableopportunitytoreviewandcommentonanynotices,certificates,
pressreleases,supplementalindentures,legalopinions,officerscertificatesorotherdocumentsorinstrumentsdeliverablepursuanttoorinconnectionwithanyConvertibleNotesortheNotes
Indenturepriortothedispatchormakingthereof,andtheCompanyshallpromptlyrespondtoanyreasonablequestionsfrom,andreflectanyreasonablecommentsmadeby,Parentoritcounsel
withrespecttheretopriortothedispatchormakingthereof.
(c)Repurchase
Transaction
.InconnectionwiththetransactionscontemplatedbythisAgreement,intheeventthatParentdesirestoconsummatearepurchaseofferor
similartransactionwithrespecttoanyoralloftheConvertibleNotes(anysuchtransaction,aRepurchase
Transaction
),eachoftheCompany,ParentandMergerSubshallusetheir
respectivereasonablebesteffortsto,andwillusetheirrespectivereasonablebesteffortstocausetheirrespectiveSubsidiariesandRepresentatives(and,inthecaseoftheCompany,theTrustee
undertheNotesIndenture)to,cooperatewithoneanotheringoodfaithtopermitsuchRepurchaseTransactiontobeeffectedonsuchterms,conditionsandtimingasreasonablyrequestedby
Parent,includingifsorequestedbyParent,causingsuchRepurchaseTransactiontobeconsummatedsubstantiallyconcurrentlywith,butnotpriorto,theClosing;itbeingunderstoodthatinno
eventshalltheCompanyberequiredtoprepareorcommenceanydocumentationforanyoffertopurchase(includinganytenderoffer)thatwillresultinaRepurchaseTransactionwithan
effectivedateonorpriortotheClosingDateorincuranyothercostorexpenseinconnectionwithsuchoffertopurchaseunlessParentagreestoreimbursetheCompanyforallcostsand
expensesincurredbytheCompanyinconnectiontherewith.
(d)Hedge
Counterparties
.PriortotheEffectiveTime,theCompanywilluseitsreasonablebesteffortsto,andwilluseitsreasonablebesteffortstocauseits
Subsidiariesandtheirrespectivedirectors,officers,employees,consultantsandadvisors,includinglegalandaccountingadvisors,totakeallactionsreasonablyrequestedbyParentin
connectionwithmakingelectionsunder,amending,obtainingwaivers,and/orunwindingoforotherwisesettlingtheWarrantsandtheCallOptions.Fortheavoidanceofdoubt,unlessotherwise
requiredbyanyCallOptionorWarrant,nothinginthisSection6.16(d)shallbeinterpretedasanindependentrequirementfortheCompanytoterminateanyCallOptionorWarrantormakeany
terminationpaymentthereundertoanyHedgeCounterpartypriortotheEffectiveTime.Withoutlimitingtheforegoing,theCompanyshalluseitsreasonablebesteffortstocooperatewith
ParentatParentsreasonablerequestinconnectionwith
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any,andatParentsreasonablerequestshalluseitsreasonablebesteffortstoinitiateorcontinue,reasonablediscussionsorreasonablenegotiationswiththecounterpartiestotheCallOptionsor
theWarrantsoranyoftheirrespectiveAffiliatesoranyotherPerson,ineachcase,totheextentsuchAffiliateorotherPersonexpresslyrepresentstheinterestsofthecounterpartiestotheCall
OptionsortheWarrantsorisempoweredtomakeanydeterminations,adjustmentsorcomputationsundertheCallOptionsortheWarrants(anysuchcounterparty,AffiliateorPerson,aHedge
Counterparty),withrespecttoanydetermination,adjustmentorcomputationinconnectionwiththeCallOptionsortheWarrants,includingwithrespecttoanycashamountsorsharesof
CompanyCommonStockthatmaybereceivable,issuable,deliverableorpayablebytheCompanypursuanttotheCallOptionsortheWarrants(includinguponterminationthereof).The
CompanyshallpromptlyprovideParentwithanywrittennoticesorotherdocumentsreceivedfromanyHedgeCounterpartywithrespecttoanydetermination,adjustmentorcomputationunder,
orinconnectionwithanydiscussionsornegotiationsrelatedto,theCallOptionsorWarrants.TheCompanyshallnot,andshallcauseitsRepresentativesnotto,enterintoanyagreementsin
respectoftheCallOptionsortheWarrantsormakeanyelectionsormakeanycashpaymentsorsharedeliverieswithrespecttotheCallOptionsortheWarrantswithoutParentspriorwritten
consent,suchconsentnottobeunreasonablywithheldordelayed,exceptasrequiredpursuanttothetermsthereof(asineffectonthedateofthisAgreement)andshalluseitsreasonablebest
effortstokeepParentfullyinformedofallsuchdiscussionsandnegotiationsandshallgiveParenttheoptiontoparticipate(orhaveitscounselparticipate)inanysuchdiscussionsand
negotiations.TheCompanyshallprovideParentanditscounselreasonableopportunitytoreviewandcommentonanywrittenresponsetoanywrittennoticeorotherdocumentreceivedfrom
anyHedgeCounterpartywithrespecttoanydetermination,adjustmentorcomputationunder,orinconnectionwithanydiscussionsornegotiationsrelatedto,theCallOptionsortheWarrants
priortomakinganysuchresponse,andtheCompanyshalluseitsreasonablebesteffortstopromptlyrespondtoanyreasonablequestionsfrom,andreflectanyreasonablecommentsmadeby,
Parentoritscounselwithrespecttheretopriortomakinganysuchresponse.
(e)Taking
of
Certain
Actions
.PriortotheEffectiveTimeandwithoutlimitationtotheotherprovisionsofthisSection6.16,theCompanyshalltakeallsuchactionsas
mayberequiredinaccordancewith,andsubjectto,thetermsoftheapplicableCallOptionsandWarrants,includingthegivingofanywrittennoticesorcommunicationthatmayberequiredin
connectionwiththeMergerand/oranyconversionsand/orrepurchasesoftheConvertibleNotesoranyadjustmenttotheConversionRatethereunderoroccurringasaresultoforinconnection
withthetransactionscontemplatedbythisAgreement.TheCompanyshalluseitsreasonablebesteffortstoprovideParentanditscounselreasonableopportunitytoreviewandcommentonany
suchwrittennoticeorcommunicationpriortothedispatchormakingthereof,andtheCompanyshalluseitsreasonablebesteffortstopromptlyrespondtoanyreasonablequestionsfrom,and
reflectanyreasonablecommentsmadeby,Parentoritscounselwithrespecttheretopriortothedispatchormakingthereof.
(f)Defined
Terms
.CapitalizedterminthisSection6.16thatarenototherwisedefinedinthisAgreementhavethemeaninggiventothemintheNotesIndenture.
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6.17Parent
Vote
.ImmediatelyfollowingtheexecutionanddeliveryofthisAgreement,Parent,initscapacityasthesolestockholderofMergerSub,willexecuteanddeliverto
MergerSubawrittenconsentadoptingtheAgreementinaccordancewiththeDGCL.
ARTICLE
VII
CONDITIONS
TO
THE
MERGER
7.1Conditions
to
Each
Partys
Obligations
to
Effect
the
Merger
.TherespectiveobligationsofParent,MergerSubandtheCompanytoconsummatetheMergeraresubjecttothe
satisfactionorwaiver(wherepermissiblepursuanttoapplicableLaw)priortotheEffectiveTimeofeachofthefollowingconditions:
(a)Requisite
Stockholder
Approval
.TheCompanysreceiptoftheRequisiteStockholderApprovalattheCompanyStockholderMeeting.
(b)Antitrust
Laws
.Thewaitingperiods(andanyextensionsthereof),ifany,applicabletotheMergerpursuanttotheHSRActandtheotherAntitrustLawssetforthin
Section7.1(b)oftheCompanyDisclosureLetterwillhaveexpiredorotherwisebeenterminated,orallrequisiteconsentspursuanttheretowillhavebeenobtained.
(c)No
Prohibitive
Laws
or
Injunctions
.Notemporaryrestrainingorder,preliminaryorpermanentinjunctionorotherjudgmentororderissuedbyanycourtof
competentjurisdictionorotherlegalorregulatoryrestraintorprohibitionpreventingtheconsummationoftheMergerwillbeineffect,norwillanyactionhavebeentakenbyanyGovernmental
Authorityofcompetentjurisdiction,andnostatute,rule,regulationororderwillhavebeenenacted,entered,enforcedordeemedapplicabletotheMerger,thatineachcaseprohibits,makes
illegal,orenjoinstheconsummationoftheMerger.
7.2Conditions
to
the
Obligations
of
Parent
and
Merger
Sub
.TheobligationsofParentandMergerSubtoconsummatetheMergerwillbesubjecttothesatisfactionorwaiver
(wherepermissiblepursuanttoapplicableLaw)priortotheEffectiveTimeofeachofthefollowingconditions,anyofwhichmaybewaivedexclusivelybyParent:
(a)Representations
and
Warranties
.
(i)OtherthantherepresentationsandwarrantieslistedinSection7.2(a)(ii),Section7.2(a)(iii)andSection7.2(a)(iv),therepresentationsandwarrantiesofthe
CompanysetforthinthisAgreementwillbetrueandcorrect(withoutgivingeffecttoanymaterialityorCompanyMaterialAdverseEffectqualificationssetforththerein)asoftheClosing
DateasifmadeatandasoftheClosingDate(excepttotheextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationand
warrantywillbetrueandcorrectasofsuchearlierdate),exceptforsuchfailurestobetrueandcorrectthatwouldnothaveorreasonablybeexpectedtohave,individuallyorintheaggregate,a
CompanyMaterialAdverseEffect.
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(ii)TherepresentationsandwarrantiessetforthinSection3.1,Section3.2,Section3.3,Section3.4andthesecondsentenceofSection3.12(a)that(A)arenot
qualifiedbyCompanyMaterialAdverseEffectwillbetrueandcorrectasoftheClosingDateasifmadeatandasoftheClosingDate(excepttotheextentthatanysuchrepresentationand
warrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationandwarrantywillbetrueandcorrectasofsuchearlierdate);and(B)thatarequalifiedbyCompanyMaterial
AdverseEffectwillbetrueandcorrect(withoutdisregardingsuchCompanyMaterialAdverseEffectqualifications)asoftheClosingDateasifmadeatandasoftheClosingDate(exceptto
theextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationandwarrantywillbetrueandcorrectasofsuchearlierdate).
(iii)TherepresentationsandwarrantiessetforthinSection3.8(b)andSection3.8(c)willbetrueandcorrectinallmaterialrespectsasoftheClosingDateasif
madeatandasoftheClosingDate.
(iv)TherepresentationsandwarrantiessetforthinSection3.7(a),thesecondsentenceofSection3.7(b),thesecondsentenceofSection3.7(c)andSection3.7(d)(i)(v)willbetrueandcorrectasoftheClosingDateasifmadeatandasoftheClosingDate(excepttotheextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,in
whichcasesuchrepresentationandwarrantywillbetrueandcorrectasofsuchearlierdate),exceptforsuchinaccuraciesthatarede
minimis
intheaggregate.
(b)Performance
of
Obligations
of
the
Company
.TheCompanywillhaveperformedandcompliedinallmaterialrespectswithallcovenantsandobligationsofthis
AgreementrequiredtobeperformedandcompliedwithbyitatorpriortotheClosing.
(c)Officers
Certificate
.ParentandMergerSubwillhavereceivedacertificateoftheCompany,validlyexecutedforandonbehalfoftheCompanyandinitsnameby
adulyauthorizedexecutiveofficerthereof,certifyingthattheconditionssetforthinSection7.2(a)andSection7.2(b)havebeensatisfied.
(d)Company
Material
Adverse
Effect
.NoCompanyMaterialAdverseEffectwillhaveoccurredafterthedateofthisAgreementthatiscontinuing.
7.3Conditions
to
the
Companys
Obligations
to
Effect
the
Merger
.TheobligationsoftheCompanytoconsummatetheMergeraresubjecttothesatisfactionorwaiver(where
permissiblepursuanttoapplicableLaw)priortotheEffectiveTimeofeachofthefollowingconditions,anyofwhichmaybewaivedexclusivelybytheCompany:
(a)Representations
and
Warranties
.TherepresentationsandwarrantiesofParentandMergerSubsetforthinthisAgreementwillbetrueandcorrectasoftheClosing
DateasifmadeatandasoftheClosingDate(excepttotheextentthatanysuchrepresentationandwarrantyexpresslyspeaksasofanearlierdate,inwhichcasesuchrepresentationand
warrantywillbetrueandcorrectasofsuchearlierdate),exceptforanysuchfailuretobetrueandcorrectthat(i)wouldnothaveorreasonablybeexpectedtohave,individuallyorinthe
aggregate,aParentMaterial
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AdverseEffectand(ii)wouldnot,individuallyorintheaggregate,preventormateriallydelaytheconsummationoftheMerger.
(b)
Performance
of
Obligations
of
Parent
and
Merger
Sub
.ParentandMergerSubwillhaveperformedandcompliedinallmaterialrespectswithallcovenantsand
obligationsofthisAgreementrequiredtobeperformedandcompliedwithbyParentandMergerSubatorpriortotheClosing.
(c)
Officers
Certificate
.TheCompanywillhavereceivedacertificateofParentandMergerSub,validlyexecutedforandonbehalfofParentandMergerSubandin
theirrespectivenamesbyadulyauthorizedofficerthereof,certifyingthattheconditionssetforthinSection7.3(a)andSection7.3(b)havebeensatisfied.
(d)
Parent
Material
Adverse
Effect
.NoParentMaterialAdverseEffectwillhaveoccurredafterthedateofthisAgreementthatiscontinuing.
ARTICLE
VIII
TERMINATION,
AMENDMENT
AND
WAIVER
8.1
Termination
.ThisAgreementmaybevalidlyterminatedatanytimepriortotheEffectiveTime,whetherpriortoorafterreceiptoftheRequisiteStockholderApproval
(exceptasprovidedherein)onlyasfollows(itbeingunderstoodandagreedthatthisAgreementmaynotbeterminatedforanyotherreasonoronanyotherbasis):
(a)
bymutualwrittenagreementofParentandtheCompany;
(b)
byeitherParentortheCompanyif(i)anypermanentinjunctionorotherjudgmentororderissuedbyanycourtofcompetentjurisdictionorotherlegalorregulatory
restraintorprohibitionpreventingtheconsummationoftheMergerwillbeineffect,oranyactionhasbeentakenbyanyGovernmentalAuthorityofcompetentjurisdiction,that,ineachcase,
prohibits,makesillegalorenjoinstheconsummationoftheMergerandhasbecomefinalandnon-appealable;or(ii)anystatute,rule,regulationororderwillhavebeenenacted,entered,
enforcedordeemedapplicabletotheMergerthatprohibits,makesillegalorenjoinstheconsummationoftheMerger,exceptthattherighttoterminatethisAgreementpursuanttothis
Section8.1(b)willnotbeavailabletoanyPartythathasfailedtouseitsreasonablebesteffortstoresist,appeal,obtainconsentpursuantto,resolveorlift,asapplicable,suchinjunction,action,
statue,rule,regulationororder;
(c)
byeitherParentortheCompanyiftheEffectiveTimehasnotoccurredby11:59p.m.,Pacifictime,onJanuary11,2017(suchtimeanddateasitmaybeextended
pursuanttothisSection8.1(c),theTermination
Date
),exceptthatifasoftheTerminationDateallconditionstothisAgreementaresatisfied(otherthanthoseconditionsthatbytheirterms
aretobesatisfiedattheClosing,eachofwhichiscapableofbeingsatisfiedattheClosing)orwaived(wherepermissiblepursuanttoapplicableLaw),otherthantheconditionssetforthin
Section7.1(b)orSection7.1(c),eitherParentortheCompany,bywrittennoticetotheother,mayextendtheTerminationDateto11:59p.m.,Pacifictime,onJune11,2017,itbeingunderstood
thattherighttoterminatethis
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AgreementpursuanttothisSection8.1(c)willnotbeavailableto(i)anyPartywhoseactionorfailuretoact(whichactionorfailuretoactconstitutesabreachbysuchPartyofthisAgreement)
hasbeentheprimarycauseofthefailureoftheEffectiveTimetohaveoccurredpriortotheTerminationDateand(ii)theCompanyifithasnottakenavoteontheadoptionofthisAgreement
attheCompanyStockholderMeeting;
(d)
byeitherParentortheCompanyiftheCompanyfailstoobtaintheRequisiteStockholderApprovalattheCompanyStockholderMeeting(oranyadjournmentor
postponementthereof)atwhichavoteistakenontheadoptionofthisAgreement,exceptthattherighttoterminatethisAgreementpursuanttothisSection8.1(d)willnotbeavailabletoany
Partywhoseactionorfailuretoact(whichactionorfailuretoactconstitutesabreachbysuchPartyofthisAgreement)hasbeentheprimarycauseofthefailuretoobtaintheRequisite
StockholderApprovalattheCompanyStockholderMeeting(oranyadjournmentorpostponementthereof);
(e)
byParent,iftheCompanyhasbreachedorfailedtoperforminanymaterialrespectanyofitsrepresentations,warranties,covenantsorotheragreementscontained
inthisAgreement,whichbreachorfailuretoperformwould(iftheClosingwerescheduledtooccuratsuchtime)resultinafailureofaconditionsetforthinSection7.1orSection7.2,except
thatifsuchbreachiscapableofbeingcuredbytheTerminationDate,ParentwillnotbeentitledtoterminatethisAgreementpriortothedeliverybyParenttotheCompanyofwrittennoticeof
suchbreach,deliveredatleast40dayspriortosuchtermination,statingParentsintentiontoterminatethisAgreementpursuanttothisSection8.1(e)andthebasisforsuchtermination,itbeing
understoodthatParentwillnotbeentitledtoterminatethisAgreementifsuchbreachhasbeencuredpriortotermination;
(f)
byParent,ifatanytimetheCompanyBoard(oracommitteethereof)haseffectedaCompanyBoardRecommendationChange;
(g)
bytheCompany,ifParentorMergerSubhasbreachedorfailedtoperforminanymaterialrespectanyofitsrespectiverepresentations,warranties,covenantsor
otheragreementscontainedinthisAgreement,whichbreachorfailuretoperformwould(iftheClosingwerescheduledtooccuratsuchtime)resultinafailureofaconditionsetforthin
Section7.1orSection7.3,exceptthatifsuchbreachiscapableofbeingcuredbytheTerminationDate,theCompanywillnotbeentitledtoterminatethisAgreementpriortothedeliverybythe
CompanytoParentofwrittennoticeofsuchbreach,deliveredatleast40dayspriortosuchtermination,statingtheCompanysintentiontoterminatethisAgreementpursuanttothis
Section8.1(g)andthebasisforsuchtermination,itbeingunderstoodthattheCompanywillnotbeentitledtoterminatethisAgreementifsuchbreachhasbeencuredpriortotermination;or
(h)
bytheCompany,atanytimepriortoreceivingtheRequisiteStockholderApprovalif(i)theCompanyhasreceivedaSuperiorProposal;(ii)theCompanyBoardhas
authorizedtheCompanytoenterintoanAlternativeAcquisitionAgreementtoconsummatetheAcquisitionTransactioncontemplatedbythatSuperiorProposalandtheCompanypaysor
causestobepaidtoParent(oritsdesignee)theTerminationFeepursuanttoSection8.3(b)(iii);and(iii)theCompanyhascompliedwithSection5.3withrespecttosuchSuperiorProposal.
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8.2
Manner
and
Notice
of
Termination;
Effect
of
Termination
.
(a)
Manner
of
Termination
.ThePartyterminatingthisAgreementpursuanttoSection8.1(otherthanpursuanttoSection8.1(a))mustdeliverpromptwrittennotice
thereoftotheotherPartiessettingforthinreasonabledetailtheprovisionofSection8.1pursuanttowhichthisAgreementisbeingterminatedandthefactsandcircumstancesformingthebasis
forsuchterminationpursuanttosuchprovision.
(b)
Effect
of
Termination
.AnyproperandvalidterminationofthisAgreementpursuanttoSection8.1willbeeffectiveimmediatelyuponthedeliveryofwrittennotice
bytheterminatingPartytotheotherParties.IntheeventoftheterminationofthisAgreementpursuanttoSection8.1,thisAgreementwillbeofnofurtherforceoreffectwithoutliabilityofany
Party(oranypartner,member,stockholder,director,officer,employee,affiliate,agentorotherrepresentativeofsuchParty)totheotherParties,asapplicable,exceptthatSection6.12,this
Section8.2,Section8.3andArticleIXwilleachsurvivetheterminationofthisAgreement.Notwithstandingtheforegoing,nothinginthisAgreementwillrelieveanyPartyfromanyliability
foranywillfulbreachofthisAgreement.ForpurposesofthisAgreement,willfulbreachmeansamaterialbreachthatisaconsequenceofanacttakenbythebreachingparty,orthefailureby
thebreachingpartytotakeanactitisrequiredtotakeunderthisAgreement,ineachcasewithactualknowledgethatthetakingof,orthefailuretotake,suchactwould,orwouldbereasonably
expectedto,causeabreachofthisAgreement.Inadditiontotheforegoing,noterminationofthisAgreementwillaffecttherightsorobligationsofanyPartypursuanttotheConfidentiality
Agreement,whichrights,obligationsandagreementswillsurvivetheterminationofthisAgreementinaccordancewiththeirrespectiveterms.
8.3
Fees
and
Expenses
.
(a)
General
.ExceptassetforthinthisSection8.3,allfeesandexpensesincurredinconnectionwiththisAgreementandtheMergerwillbepaidbythePartyincurring
suchfeesandexpenseswhetherornottheMergerisconsummated.Fortheavoidanceofdoubt,ParentortheSurvivingCorporationwillberesponsibleforallfeesandexpensesofthePaying
Agent.IntheeventthattheMergerisconsummated,ParentwillpayorcausetobepaidalloftheParties(i)transfer,stampanddocumentaryTaxesorfees;and(ii)sales,use,gains,real
propertytransferandothersimilarTaxesorfeesarisingoutoforinconnectionwithenteringintothisAgreementandtheconsummationoftheMerger.
(b)
Termination
Fee
.
(i)
Future
Transaction
.If(A)thisAgreementisterminatedpursuanttoSection8.1(e);(B)followingtheexecutionanddeliveryofthisAgreementandpriortothe
terminationofthisAgreementpursuanttoSection8.1(e)anAcquisitionProposalhasbeenpubliclyannouncedorotherwisereceivedbytheCompany;and(C)withinoneyearofthe
terminationofthisAgreementpursuanttoSection8.1(e),eitheranAcquisitionTransactionisconsummatedortheCompanyentersintoadefinitiveagreementprovidingfortheconsummation
ofanAcquisitionTransaction,thentheCompanywillpromptly(andinanyeventwithintwoBusinessDays)aftertheearlierofthe(1)entryintosuchdefinitiveagreementor(2)consummation
ofsuchAcquisition
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TransactionpaytoParent(oritsdesignee)anamountequalto$725,000,000(theTermination
Fee
)bywiretransferofimmediatelyavailablefundstoanaccountoraccountsdesignatedin
writingbyParent.ForpurposesofthisSection8.3(b)(i),allreferencesto15%inthedefinitionofAcquisitionTransactionwillbedeemedtobereferencesto50%.
(ii)
Company
Board
Recommendation
Change
.IfthisAgreementisterminatedpursuanttoSection8.1(f),thentheCompanywillpromptly(andinanyeventwithin
twoBusinessDays)followingsuchterminationpaytoParent(oritsdesignee)theTerminationFeebywiretransferofimmediatelyavailablefundstoanaccountoraccountsdesignatedin
writingbyParent.
(iii)
Superior
Proposal;
Failure
to
Obtain
Requisite
Stockholder
Approval
.IfthisAgreementisterminatedpursuanttoSection8.1(d)orSection8.1(h),thenthe
CompanywillconcurrentlywithsuchterminationpayorcausetobepaidtoParenttheTerminationFeebywiretransferofimmediatelyavailablefundstoanaccountoraccountsdesignatedin
writingbyParent.
(c)
Single
Payment
Only
.ThePartiesacknowledgeandagreethatinnoeventwilltheCompanyberequiredtopaytheTerminationFeeonmorethanoneoccasion,
whetherornottheTerminationFeemaybepayablepursuanttomorethanoneprovisionofthisAgreementatthesameoratdifferenttimesandupontheoccurrenceofdifferentevents.
(d)
Payments;
Default
.ThePartiesacknowledgethattheagreementscontainedinthisSection8.3areanintegralpartoftheMerger,andthat,withouttheseagreements,
thePartieswouldnotenterintothisAgreement.Accordingly,iftheCompanyfailstopromptlypayanyamountduepursuanttoSection8.3(b)and,inordertoobtainsuchpayment,Parent
commencesaLegalProceedingthatresultsinajudgmentagainsttheCompanyfortheamountsetforthinSection8.3(b)oranyportionthereoftheCompanywillpaytoParentitsout-of-pocket
costsandexpenses(includingattorneysfees)inconnectionwithsuchLegalProceeding,togetherwithinterestonsuchamountorportionthereofattheannualrateoftheprimerateas
publishedinThe
Wall
Street
Journal
ineffectonthedatethatsuchpaymentorportionthereofwasrequiredtobemadethroughthedatethatsuchpaymentorportionthereofwasactually
received,oralesserratethatisthemaximumpermittedbyapplicableLaw.
(e)
Sole
Remedy
.ParentsreceiptoftheTerminationFeetotheextentowedpursuanttoSection8.3(b),willbethesoleandexclusivemonetaryremedyofParentand
MergerSubandeachoftheirrespectiveAffiliatesagainst(A)theCompany,itsSubsidiariesandeachoftheirrespectiveAffiliates;and(B)theformer,currentandfutureholdersofanyequity,
controllingpersons,directors,officers,employees,agents,attorneys,Affiliates,members,managers,generalorlimitedpartners,stockholdersandassigneesofeachoftheCompany,its
SubsidiariesandeachoftheirrespectiveAffiliates(collectively,theCompany
Related
Parties
)inrespectofthisAgreementandthetransactionscontemplatedhereby,anduponpaymentof
suchamount,noneoftheCompanyRelatedPartieswillhaveanyfurthermonetaryliabilityorobligationtoParentorMergerSubrelatingtoorarisingoutofthisAgreement,orthetransactions
contemplatedhereby(except,fortheavoidanceofdoubt,thattheParties(ortheirAffiliates)willremainobligatedwithrespectto,andthePartiesmaybeentitledtoremedieswithrespectto,the
ConfidentialityAgreement,Section8.3(a)andSection8.3(d),asapplicable).
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8.4
Amendment
.SubjecttoapplicableLawandsubjecttotheotherprovisionsofthisAgreement,thisAgreementmaybeamendedbythePartiesatanytimebyexecutionofan
instrumentinwritingsignedonbehalfofeachofParent,MergerSubandtheCompany(pursuanttoauthorizedactionbytheCompanyBoard(oracommitteethereof)),exceptthatintheevent
thattheCompanyhasreceivedtheRequisiteStockholderApproval,noamendmentmaybemadetothisAgreementthatrequirestheapprovaloftheCompanyStockholderspursuanttothe
DGCLwithoutsuchapproval.
8.5
Extension;
Waiver
.AtanytimeandfromtimetotimepriortotheEffectiveTime,anyPartymay,totheextentlegallyallowedandexceptasotherwisesetforthherein,
(a)extendthetimefortheperformanceofanyoftheobligationsorotheractsoftheotherParties,asapplicable;(b)waiveanyinaccuraciesintherepresentationsandwarrantiesmadetosuch
Partycontainedhereinorinanydocumentdeliveredpursuanthereto;and(c)subjecttotherequirementsofapplicableLaw,waivecompliancewithanyoftheagreementsorconditionsforthe
benefitofsuchPartycontainedherein.AnyagreementonthepartofaPartytoanysuchextensionorwaiverwillbevalidonlyifsetforthinaninstrumentinwritingsignedbysuchParty.Any
delayinexercisinganyrightpursuanttothisAgreementwillnotconstituteawaiverofsuchright.
ARTICLE
IX
GENERAL
PROVISIONS
9.1
Survival
of
Representations,
Warranties
and
Covenants
.Therepresentations,warrantiesandcovenantsoftheCompany,ParentandMergerSubcontainedinthisAgreement
willterminateattheEffectiveTime,exceptthatanycovenantsthatbytheirtermssurvivetheEffectiveTimewillsurvivetheEffectiveTimeinaccordancewiththeirrespectiveterms.
9.2
Notices
.Allnoticesandothercommunicationshereundermustbeinwritingandwillbedeemedtohavebeendulydeliveredandreceivedhereunder(i)fourBusinessDays
afterbeingsentbyregisteredorcertifiedmail,returnreceiptrequested,postageprepaid;(ii)oneBusinessDayafterbeingsentfornextBusinessDaydelivery,feesprepaid,viaareputable
nationwideovernightcourierservice;or(iii)immediatelyupondeliverybyhand,byfax(withawrittenorelectronicconfirmationofdelivery),ineachcasetotheintendedrecipientassetforth
below:
(a)
iftoParentorMergerSubto:
MicrosoftCorporation
OneMicrosoftWay
Redmond,Washington98052-6399
Attn: AmyHood
BradfordL.Smith
KeithDolliver
Fax: (425)706-7329
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withacopy(whichwillnotconstitutenotice)to:
SimpsonThacher&BartlettLLP
425LexingtonAvenue
NewYork,NY10017
Attn: AlanM.Klein
AnthonyF.Vernace
Fax: (212)455-2000
(b)
iftotheCompany(priortotheEffectiveTime)to:
LinkedInCorporation
2029StierlinCourt
Attn:GeneralCounsel
Fax:(650)810-2897
withacopy(whichwillnotconstitutenotice)to:
WilsonSonsiniGoodrich&Rosati
ProfessionalCorporation
650PageMillRoad
PaloAlto,CA94304-1050
Attn: MartinW.Korman
BradleyL.Finkelstein
DouglasK.Schnell
Fax: (650)493-6811
AnynoticereceivedattheaddresseeslocationonanyBusinessDayafter5:00p.m.,addresseeslocaltime,oronanydaythatisnotaBusinessDaywillbedeemedtohavebeen
receivedat9:00a.m.,addresseeslocaltime,onthenextBusinessDay.Fromtimetotime,anyPartymayprovidenoticetotheotherPartiesofachangeinitsaddressorfaxnumberthrougha
noticegiveninaccordancewiththisSection9.2,exceptthatnoticeofanychangetotheaddressoranyoftheotherdetailsspecifiedinorpursuanttothisSection9.2willnotbedeemedtohave
beenreceiveduntil,andwillbedeemedtohavebeenreceivedupon,thelaterofthedate(A)specifiedinsuchnotice;or(B)thatisfiveBusinessDaysaftersuchnoticewouldotherwisebe
deemedtohavebeenreceivedpursuanttothisSection9.2.
9.3
Assignment
.NoPartymayassigneitherthisAgreementoranyofitsrights,interests,orobligationshereunderwithoutthepriorwrittenapprovaloftheotherParties.Subject
totheprecedingsentence,thisAgreementwillbebindinguponandwillinuretothebenefitofthePartiesandtheirrespectivesuccessorsandpermittedassigns.NoassignmentbyanyPartywill
relievesuchPartyofanyofitsobligationshereunder.
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9.4Confidentiality
.Parent,MergerSubandtheCompanyherebyacknowledgethatParentandtheCompanyhavepreviouslyexecutedaConfidentialityLetterAgreement,dated
April11,2016(theConfidentiality
Agreement
),thatwillcontinueinfullforceandeffectinaccordancewithitsterms.EachofParent,MergerSub,theCompanyandtheirrespective
RepresentativeswillholdandtreatalldocumentsandinformationconcerningtheotherPartiesfurnishedormadeavailabletothemortheirrespectiveRepresentativesinconnectionwiththe
MergerinaccordancewiththeConfidentialityAgreement.
9.5Entire
Agreement
.ThisAgreementandthedocumentsandinstrumentsandotheragreementsamongthePartiesascontemplatedbyorreferredtoherein,includingthe
ConfidentialityAgreementandtheCompanyDisclosureLetter,constitutetheentireagreementamongthePartieswithrespecttothesubjectmatterhereofandsupersedeallprioragreements
andunderstandings,bothwrittenandoral,amongthePartieswithrespecttothesubjectmatterhereof.NotwithstandinganythingtothecontraryinthisAgreement,theConfidentiality
Agreementwill(a)notbesuperseded;(b)surviveanyterminationofthisAgreement;and(c)continueinfullforceandeffectuntiltheearliertooccuroftheEffectiveTimeandthedateon
whichtheConfidentialityAgreementexpiresinaccordancewithitstermsorisvalidlyterminatedbythepartiesthereto.
9.6Third
Party
Beneficiaries
.ExceptassetforthinSection6.8andthisSection9.6,thePartiesagreethattheirrespectiverepresentations,warrantiesandcovenantssetforthin
thisAgreementaresolelyforthebenefitoftheotherPartiesinaccordancewithandsubjecttothetermsofthisAgreement.ThisAgreementisnotintendedto,andwillnot,conferuponany
otherPersonanyrightsorremedieshereunder,except(a)assetforthinorcontemplatedbySection6.8;(b)fromandaftertheEffectiveTime,therightsoftheholdersofsharesofCompany
CapitalStock,CompanyOptionsandCompanyStock-BasedAwardstoreceivetheMergerConsiderationsetforthinArticleII.
9.7Severability
.IntheeventthatanyprovisionofthisAgreement,ortheapplicationthereof,becomesorisdeclaredbyacourtofcompetentjurisdictiontobeillegal,voidor
unenforceable,theremainderofthisAgreementwillcontinueinfullforceandeffectandtheapplicationofsuchprovisiontootherPersonsorcircumstanceswillbeinterpretedsoasreasonably
toeffecttheintentoftheParties.ThePartiesfurtheragreetoreplacesuchvoidorunenforceableprovisionofthisAgreementwithavalidandenforceableprovisionthatwillachieve,tothe
extentpossible,theeconomic,businessandotherpurposesofsuchvoidorunenforceableprovision.
9.8Remedies
.
(a)Remedies
Cumulative
.Exceptasotherwiseprovidedherein,anyandallremedieshereinexpresslyconferreduponaPartywillbedeemedcumulativewithandnot
exclusiveofanyotherremedyconferredherebyorbylaworequityuponsuchParty,andtheexercisebyaPartyofanyoneremedywillnotprecludetheexerciseofanyotherremedy.
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TableofContents
(b)Specific
Performance
.
(i)ThePartiesagreethatirreparabledamageforwhichmonetarydamages,evenifavailable,wouldnotbeanadequateremedywouldoccurintheeventthatthe
PartiesdonotperformtheprovisionsofthisAgreement(includinganyPartyfailingtotakesuchactionsasarerequiredofithereunderinordertoconsummatethisAgreement)inaccordance
withitsspecifiedtermsorotherwisebreachsuchprovisions.ThePartiesacknowledgeandagreethat(A)theywillbeentitled,inadditiontoanyotherremedytowhichtheyareentitledatlawor
inequity,toaninjunction,specificperformanceandotherequitablerelieftopreventbreaches(orthreatenedbreaches)ofthisAgreementandtoenforcespecificallythetermsandprovisions
hereof;and(B)therightofspecificenforcementisanintegralpartoftheMergerandwithoutthatright,neithertheCompanynorParentwouldhaveenteredintothisAgreement.
(ii)ThePartiesagreenottoraiseanyobjectionsto(A)thegrantingofaninjunction,specificperformanceorotherequitablerelieftopreventorrestrainbreachesor
threatenedbreachesofthisAgreementbytheCompany,ontheonehand,orParentandMergerSub,ontheotherhand;and(B)thespecificperformanceofthetermsandprovisionsofthis
Agreementtopreventbreachesorthreatenedbreachesof,ortoenforcecompliancewith,thecovenants,obligationsandagreementsoftheCompany,ParentandMergerSubpursuanttothis
Agreement.AnyPartyseekinganinjunctionorinjunctionstopreventbreachesofthisAgreementandtoenforcespecificallythetermsandprovisionsofthisAgreementwillnotberequiredto
provideanybondorothersecurityinconnectionwithsuchinjunctionorenforcement,andeachPartyirrevocablywaivesanyrightthatitmayhavetorequiretheobtaining,furnishingorposting
ofanysuchbondorothersecurity.
9.9Governing
Law
.ThisAgreementisgovernedbyandconstruedinaccordancewiththeLawsoftheStateofDelaware.
9.10Consent
to
Jurisdiction
.EachoftheParties(a)irrevocablyconsentstotheserviceofthesummonsandcomplaintandanyotherprocess(whetherinsideoroutsidethe
territorialjurisdictionoftheChosenCourts)inanyLegalProceedingrelatingtotheMerger,forandonbehalfofitselforanyofitspropertiesorassets,inaccordancewithSection9.2orinsuch
othermannerasmaybepermittedbyapplicableLaw,butnothinginthisSection9.10willaffecttherightofanyPartytoservelegalprocessinanyothermannerpermittedbyapplicableLaw;
(b)irrevocablyandunconditionallyconsentsandsubmitsitselfanditspropertiesandassetsinanyLegalProceedingtotheexclusivegeneraljurisdictionoftheChosenCourtsintheeventthat
anydisputeorcontroversyarisesoutofthisAgreementortheMerger;(c)agreesthatitwillnotattempttodenyordefeatsuchpersonaljurisdictionbymotionorotherrequestforleavefrom
anyChosenCourt;(d)agreesthatanyLegalProceedingarisinginconnectionwiththisAgreementortheMergerwillbebrought,triedanddeterminedonlyintheChosenCourts;(e)waivesany
objectionthatitmaynoworhereafterhavetothevenueofanysuchLegalProceedingintheChosenCourtsorthatsuchLegalProceedingwasbroughtinaninconvenientcourtandagreesnot
topleadorclaimthesame;and(f)agreesthatitwillnotbringanyLegalProceedingrelatingtothisAgreementortheMergerinanycourtotherthantheChosenCourts.EachofParent,Merger
SubandtheCompanyagreesthatafinaljudgmentinany
A-84
TableofContents
LegalProceedingintheChosenCourtswillbeconclusiveandmaybeenforcedinotherjurisdictionsbysuitonthejudgmentorinanyothermannerprovidedbyapplicableLaw.
9.11WAIVER
OF
JURY
TRIAL
.EACHPARTYACKNOWLEDGESANDAGREESTHATANYCONTROVERSYTHATMAYARISEPURSUANTTOTHIS
AGREEMENTISLIKELYTOINVOLVECOMPLICATEDANDDIFFICULTISSUES,ANDTHEREFOREEACHPARTYHEREBYIRREVOCABLYANDUNCONDITIONALLY
WAIVESANYRIGHTTHATSUCHPARTYMAYHAVETOATRIALBYJURYINRESPECTOFANYLEGALPROCEEDINGDIRECTLYORINDIRECTLYARISINGOUTOFOR
RELATINGTOTHISAGREEMENTORTHEMERGER.EACHPARTYACKNOWLEDGESANDAGREESTHAT(a)NOREPRESENTATIVE,AGENTORATTORNEYOFANY
OTHERPARTYHASREPRESENTED,EXPRESSLYOROTHERWISE,THATSUCHOTHERPARTYWOULDNOT,INTHEEVENTOFLITIGATION,SEEKTOENFORCETHE
FOREGOINGWAIVER;(b)ITUNDERSTANDSANDHASCONSIDEREDTHEIMPLICATIONSOFTHISWAIVER;(c)ITMAKESTHISWAIVERVOLUNTARILY;AND(d)IT
HASBEENINDUCEDTOENTERINTOTHISAGREEMENTBY,AMONGOTHERTHINGS,THEMUTUALWAIVERSANDCERTIFICATIONSINTHISSECTION9.11.
9.12Counterparts
.ThisAgreementandanyamendmentsheretomaybeexecutedinoneormorecounterparts,allofwhichwillbeconsideredoneandthesameagreementand
willbecomeeffectivewhenoneormorecounterpartshavebeensignedbyeachofthePartiesanddeliveredtotheotherParties,itbeingunderstoodthatallPartiesneednotsignthesame
counterpart.Anysuchcounterpart,totheextentdeliveredbyfaxor.pdf,.tif,.gif,.jpgorsimilarattachmenttoelectronicmail(anysuchdelivery,anElectronic
Delivery
),willbetreatedin
allmannerandrespectsasanoriginalexecutedcounterpartandwillbeconsideredtohavethesamebindinglegaleffectasifitweretheoriginalsignedversionthereofdeliveredinperson.No
PartymayraisetheuseofanElectronicDeliverytodeliverasignature,orthefactthatanysignatureoragreementorinstrumentwastransmittedorcommunicatedthroughtheuseofan
ElectronicDelivery,asadefensetotheformationofacontract,andeachPartyforeverwaivesanysuchdefense,excepttotheextentsuchdefenserelatestolackofauthenticity.
9.13No
Limitation
.ItistheintentionofthePartiesthat,totheextentpossible,unlessprovisionsaremutuallyexclusiveandeffectcannotbegiventobothorallsuchprovisions,
therepresentations,warranties,covenantsandclosingconditionsinthisAgreementwillbeconstruedtobecumulativeandthateachrepresentation,warranty,covenantandclosingconditionin
thisAgreementwillbegivenfull,separateandindependenteffectandnothingsetforthinanyprovisionhereinwill(excepttotheextentexpresslystated)inanywaybedeemedtolimitthe
scope,applicabilityoreffectofanyotherprovisionhereof.
[Signature
page
follows
.]
A-85
TableofContents
INWITNESSWHEREOF,thePartieshavecausedthisAgreementtobeexecutedanddeliveredbytheirrespectivedulyauthorizedofficersasofthedatefirstwrittenabove.
MICROSOFT
CORPORATION
By:
/s/SatyaNadella
Name:SatyaNadella
Title:ChiefExecutiveOfficer
LIBERTY
MERGER
SUB
INC.
By:
/s/KeithR.Dolliver
Name:KeithR.Dolliver
Title:President
LINKEDIN
CORPORATION
By:
/s/MichaelJ.Callahan
Name:MichaelJ.Callahan
Title:SeniorVicePresident,GeneralCounselandSecretary
[SignaturePagetoAgreementandPlanofMerger]
A-86
EXHIBIT
A
SEVENTH
AMENDED
AND
RESTATED
CERTIFICATE
OF
INCORPORATION
OF
LINKEDIN
CORPORATION
ARTICLE
I
ThenameoftheCorporationisLinkedInCorporation.
ARTICLE
II
TheregisteredofficeoftheCorporationintheStateofDelawareis2711CentervilleRoad,Suite400,Wilmington,NewCastleCounty,Delaware19808andthenameofits
registeredagentatthataddressisCorporationServiceCompany.
ARTICLE
III
ThepurposeoftheCorporationistoengageinanylawfulactoractivityforwhichcorporationsmaybeorganizedundertheDGCLoranysuccessorstatute.
ARTICLE
IV
ThetotalnumberofsharesofcapitalstockwhichtheCorporationshallhaveauthoritytoissueis100sharesofcommonstock,parvalue$0.01pershare(theCommon
Stock
).
ARTICLE
V
InfurtheranceandnotinlimitationofthepowersconferredbythelawsoftheStateofDelaware,theBoardofDirectors,actingbymajorityvote,isexpresslyauthorizedto
make,alter,amendorrepealtheBylawsoftheCorporation.
ARTICLE
VI
UnlessandexcepttotheextentthattheBylawsoftheCorporationshallsorequire,electionofdirectorsoftheCorporationneednotbebywrittenballot.
ARTICLE
VII
TothefullestextentpermittedbytheDGCL,asthesameexistsorasmayhereafterbeamended,adirectoroftheCorporationshallnotbepersonallyliabletotheCorporation
oritsstockholdersformonetarydamagesforbreachoffiduciarydutyasadirectorexceptforliability(a)foranybreachofthedirectorsdutyofloyaltytotheCorporationoritsstockholders;
(b)foractsoromissionsnotingoodfaithorthatinvolveintentionalmisconductoraknowingviolationoflaw;(c)underSection174oftheDGCL;or(d)foranytransactionfromwhichthe
directorderivedanyimproperpersonalbenefit.IftheDGCLisamended,afterapprovalbythestockholdersofthisArticleVII,toauthorizecorporateactionfurthereliminating

orlimitingthepersonalliabilityofdirectors,thentheliabilityofadirectoroftheCorporationshallbeeliminatedorlimitedtothefullestextentpermittedbytheDGCL,assoamended.
TheCorporationshallhavethepowertoindemnifytothefullestextentpermittedbylawanypersonmadeorthreatenedtobemadeapartytoanactionorproceeding,whether
criminal,civil,administrativeorinvestigative,byreasonofthefactthathe,histestatororintestateisorwasadirector,officer,employeeoragentoftheCorporation,anypredecessorofthe
CorporationoranysubsidiaryoraffiliateoftheCorporation,orservesorservedatanyotherenterpriseasadirector,officer,employeeoragentattherequestoftheCorporationorany
predecessortotheCorporation.TheCorporationshallindemnifyanypersonmadeorthreatenedtobemadeapartytoanactionorproceeding,whethercriminal,civil,administrativeor
investigative,byreasonofthefactthathe,histestatororintestateisorwasadirectororofficeroftheCorporationoranypredecessoroftheCorporation,orservesorservedatanyother
enterpriseasadirectororofficerattherequestoftheCorporation,anypredecessortotheCorporationoranysubsidiaryoraffiliateoftheCorporationasandtotheextent(andonthetermsand
subjecttotheconditions)setforthintheBylawsoftheCorporationorinanycontractofindemnificationenteredintobytheCorporationandanysuchperson.
NeitheranyamendmentnorrepealofthisArticleVII,northeadoptionofanyprovisionofthisAmendedandRestatedCertificateofIncorporationinconsistentwiththis
ArticleVII,shalleliminateorreducetheeffectofthisArticleVIIinrespectofanymatteroccurring,oranyactionorproceedingaccruingorarisingorthat,butforthisArticleVII,would
accrueorarise,priortosuchamendment,repealoradoptionofaninconsistentprovision.
ARTICLE
VIII
TheCorporationherebyexpresslyelectsnottobegovernedbySection203oftheDGCL,andtherestrictionscontainedinSection203oftheDGCLshallnotapplytothe
Corporation.
ARTICLE
IX
IfanyprovisionorprovisionsofthisAmendedandRestatedCertificateofIncorporationshallbeheldtobeinvalid,illegalorunenforceableasappliedtoanycircumstancefor
anyreasonwhatsoever:(i)thevalidity,legalityandenforceabilityofsuchprovisionsinanyothercircumstanceandoftheremainingprovisionsofthisAmendedandRestatedCertificateof
Incorporation(including,withoutlimitation,eachportionofanyparagraphofthisAmendedandRestatedCertificateofIncorporationcontaininganysuchprovisionheldtobeinvalid,illegalor
unenforceablethatisnotitselfheldtobeinvalid,illegalorunenforceable)shallnotinanywaybeaffectedorimpairedtherebyand(ii)tothefullestextentpossible,theprovisionsofthis
AmendedandRestatedCertificateofIncorporation(including,withoutlimitation,eachsuchportionofanyparagraphofthisAmendedandRestatedCertificateofIncorporationcontainingany
suchprovisionheldtobeinvalid,illegalorunenforceable)shallbeconstruedsoastopermittheCorporationtoprotectitsdirectors,officers,employeesandagentsfrompersonalliabilityin
respectoftheirgoodfaithserviceorforthebenefitoftheCorporationtothefullestextentpermittedbylaw.
TableofContents
AnnexB
June11,2016
BoardofDirectors
LinkedInCorporation
2029StierlinCourt
MembersoftheBoard:
WeunderstandthatLinkedInCorporation(theCompany),MicrosoftCorporation(Parent)andLibertyMergerSubInc.,awhollyownedsubsidiaryofParent(MergerSub),
hasenteredintoanAgreementandPlanofMergerdatedJune11,2016(theMergerAgreement),pursuanttowhich,amongotherthings,MergerSubwillbemergedwithandintothe
Company(theMerger).PursuanttotheMerger,theCompanywillcontinueasthesurvivingcorporation,andeachoutstandingshareofClassAcommonstockparvalue$0.0001ofthe
Company(CompanyClassACommonStock)andClassBcommonstockparvalue$0.0001oftheCompany(CompanyClassBCommonStock),otherthansharesheldbytheCompany
astreasurystock,heldbyParentorMergerSub,heldbyanydirectorindirectwhollyownedsubsidiaryofParentorMergerSuboranyDissentingCompanyShares(asdefinedintheMerger
Agreement),willbeconvertedintotherighttoreceive$196.00incash,withoutinterest(theMergerConsideration).ThetermsandconditionsoftheMergeraremorefullysetforthinthe
MergerAgreement.
YouhaveaskedforouropinionastowhethertheMergerConsiderationtobereceivedbytheholdersofsharesofCompanyClassACommonStock,intheircapacityasholdersof
CompanyClassACommonStock(otherthanParentoranyaffiliateofParent)(theHolders),pursuanttotheMergerAgreementisfair,fromafinancialpointofview,tosuchHolders.
Forpurposesoftheopinionsetforthherein,wehavereviewedtheMergerAgreement,certainrelateddocumentsandcertainpubliclyavailablefinancialstatementsandotherbusiness
andfinancialinformationoftheCompany.WehavealsoreviewedcertainforwardlookinginformationrelatingtotheCompanypreparedbythemanagementoftheCompany,including
financialprojectionsandoperatingdatapreparedbythemanagementoftheCompany(theCompanyProjections).Additionally,wediscussedthepastandcurrentoperationsandfinancial
conditionandtheprospectsoftheCompanywithseniorexecutivesoftheCompany.WealsoreviewedthehistoricalmarketpricesandtradingactivityforCompanyClassACommonStock
andcomparedthefinancialperformanceoftheCompanyandthepricesandtradingactivityofCompanyClassACommonStockwiththatofcertainotherselectedpublicly-tradedcompanies
andtheirsecurities.Inaddition,wereviewedthefinancialterms,totheextentpubliclyavailable,ofselectedacquisitiontransactionsandperformedsuchotheranalyses,reviewedsuchother
informationandconsideredsuchotherfactorsaswehavedeemedappropriate.
Inarrivingatouropinion,wehaveassumedandreliedupon,withoutindependentverification,theaccuracyandcompletenessoftheinformationthatwaspubliclyavailableorsupplied
orotherwisemadeavailableto,ordiscussedwith,usbytheCompany.WithrespecttotheCompanyProjectionswehavebeenadvisedbythemanagementoftheCompany,andhaveassumed,
thattheyhavebeenreasonablypreparedonbasesreflectingthebestcurrentlyavailableestimatesandjudgmentsofthemanagementoftheCompanyofthefuturefinancialperformanceofthe
Companyandothermatters
B-1
TableofContents
coveredthereby.WehaveassumedthattheMergerwillbeconsummatedinaccordancewiththetermssetforthintheMergerAgreement,withoutanymodification,waiverordelay.In
addition,wehaveassumedthatinconnectionwiththereceiptofallthenecessaryapprovalsoftheproposedMerger,nodelays,limitations,conditionsorrestrictionswillbeimposedthatcould
haveanadverseeffectontheCompanyorthecontemplatedbenefitsexpectedtobederivedintheproposedMerger.Wehavenotmadeanyindependentevaluationorappraisaloftheassetsor
liabilities(contingentorotherwise)oftheCompany,norhavewebeenfurnishedwithanysuchevaluationorappraisal.Inaddition,wehaverelied,withoutindependentverification,uponthe
assessmentofthemanagementoftheCompanyastotheexistingandfuturetechnologyandproductsoftheCompanyandtherisksassociatedwithsuchtechnologyandproducts.
WehaveactedasfinancialadvisortotheBoardofDirectorsoftheCompanyinconnectionwiththistransactionandwillreceiveafeeforourservicespayableuponrenderingofthis
opinion.Wewillalsoreceiveanadditional,largerfeeiftheMergerisconsummated.Inaddition,theCompanyhasagreedtoreimburseourexpensesandindemnifyusforcertainliabilities
arisingoutofourengagement.Duringthetwoyearperiodpriortothedatehereof,nomaterialrelationshipexistedbetweenQatalystanditsaffiliatesandtheCompanyorParentpursuantto
whichcompensationwasreceivedbyQatalystoritsaffiliates;howeverQatalystand/oritsaffiliatesmayinthefutureprovideinvestmentbankingandotherfinancialservicestotheCompany
andParentandtheirrespectiveaffiliatesforwhichweortheywouldexpecttoreceivecompensation.
Qatalystprovidesinvestmentbankingandotherservicestoawiderangeofcorporationsandindividuals,domesticallyandoffshore,fromwhichconflictinginterestsordutiesmay
arise.Intheordinarycourseoftheseactivities,affiliatesofQatalystmayatanytimeholdlongorshortpositions,andmaytradeorotherwiseeffecttransactionsindebtorequitysecuritiesor
loansoftheCompany,Parentorcertainoftheirrespectiveaffiliates.
Thisopinionhasbeenapprovedbyouropinioncommitteeinaccordancewithourcustomarypractice.ThisopinionisfortheinformationoftheBoardofDirectorsoftheCompany
andmaynotbeusedforanyotherpurposewithoutourpriorwrittenconsent.ThisopiniondoesnotconstitutearecommendationastohowanyholderofsharesofCompanyClassACommon
StockshouldvotewithrespecttotheMergeroranyothermatteranddoesnotinanymanneraddressthepricesatwhichCompanyClassACommonStockwilltradeatanytime.
Ouropinionisnecessarilybasedonfinancial,economic,marketandotherconditionsasineffecton,andtheinformationmadeavailabletousasof,thedatehereof.Eventsoccurring
afterthedatehereofmayaffectthisopinionandtheassumptionsusedinpreparingit,andwedonotassumeanyobligationtoupdate,reviseorreaffirmthisopinion.Ouropiniondoesnot
addresstheunderlyingbusinessdecisionoftheCompanytoengageintheMerger,ortherelativemeritsoftheMergerascomparedtoanystrategicalternativesthatmaybeavailabletothe
Company.Ouropinionislimitedtothefairness,fromafinancialpointofview,oftheMergerConsiderationtobereceivedbytheHolderspursuanttotheMergerAgreement,intheircapacity
assuchHolders,andweexpressnoopinionwithrespecttothefairnessoftheamountornatureofthecompensationtoanyoftheCompanysofficers,directorsoremployees,oranyclassof
suchpersons,relativetosuchMergerConsideration.WealsoexpressnoopinionregardingtheconsiderationtobereceivedbyanyholderofCompanyClassBCommonStockundertheMerger
AgreementinsuchholderscapacityasaholderofCompanyClassBCommonStock.
B-2
TableofContents
Basedonandsubjecttotheforegoing,weareoftheopiniononthedatehereofthattheMergerConsiderationtobereceivedbytheHolderspursuanttotheMergerAgreement,intheir
capacityassuchHolders,isfair,fromafinancialpointofview,tosuchHolders.
Yoursfaithfully,
/s/QATALYSTPARTNERSLP
QATALYSTPARTNERSLP
B-3
TableofContents
AnnexC
SECTION
262
OF
THE
GENERAL
CORPORATION
LAW
OF
THE
STATE
OF
DELAWARE
262.
Appraisal
rights.
(a)
AnystockholderofacorporationofthisStatewhoholdssharesofstockonthedateofthemakingofademandpursuanttosubsection(d)ofthissectionwithrespecttosuchshares,
whocontinuouslyholdssuchsharesthroughtheeffectivedateofthemergerorconsolidation,whohasotherwisecompliedwithsubsection(d)ofthissectionandwhohasneithervoted
infavorofthemergerorconsolidationnorconsentedtheretoinwritingpursuantto228ofthistitleshallbeentitledtoanappraisalbytheCourtofChanceryofthefairvalueofthe
stockholderssharesofstockunderthecircumstancesdescribedinsubsections(b)and(c)ofthissection.Asusedinthissection,thewordstockholdermeansaholderofrecordof
stockinacorporation;thewordsstockandsharemeanandincludewhatisordinarilymeantbythosewords;andthewordsdepositoryreceiptmeanareceiptorotherinstrument
issuedbyadepositoryrepresentinganinterestin1ormoreshares,orfractionsthereof,solelyofstockofacorporation,whichstockisdepositedwiththedepository.
(b)
Appraisalrightsshallbeavailableforthesharesofanyclassorseriesofstockofaconstituentcorporationinamergerorconsolidationtobeeffectedpursuantto251(otherthana
mergereffectedpursuantto251(g)ofthistitleand,
subject
to
paragraph
(b)(3)
of
this
section,
251(h)
of
this
title
),252,254,255,256,257,258,263or264ofthistitle:
(1)
Provided,however,that,exceptasexpresslyprovidedin363(b)ofthistitle,noappraisalrightsunderthissectionshallbeavailableforthesharesofanyclassorseriesofstock,
whichstock,ordepositoryreceiptsinrespectthereof,attherecorddatefixedtodeterminethestockholdersentitledtoreceivenoticeofthemeetingofstockholderstoactuponthe
agreementofmergerorconsolidation,wereeither:(i)listedonanationalsecuritiesexchangeor(ii)heldofrecordbymorethan2,000holders;andfurtherprovidedthatnoappraisal
rightsshallbeavailableforanysharesofstockoftheconstituentcorporationsurvivingamergerifthemergerdidnotrequireforitsapprovalthevoteofthestockholdersofthe
survivingcorporationasprovidedin251(f)ofthistitle.
(2)
Notwithstandingparagraph(b)(1)ofthissection,appraisalrightsunderthissectionshallbeavailableforthesharesofanyclassorseriesofstockofaconstituentcorporationif
theholdersthereofarerequiredbythetermsofanagreementofmergerorconsolidationpursuantto251,252,254,255,256,257,258,263and264ofthistitletoacceptforsuch
stockanythingexcept:
a.Sharesofstockofthecorporationsurvivingorresultingfromsuchmergerorconsolidation,ordepositoryreceiptsinrespectthereof;
b.Sharesofstockofanyothercorporation,ordepositoryreceiptsinrespectthereof,whichsharesofstock(ordepositoryreceiptsinrespectthereof)ordepositoryreceiptsat
theeffectivedateofthemergerorconsolidationwillbeeitherlistedonanationalsecuritiesexchangeorheldofrecordbymorethan2,000holders;
c.Cashinlieuoffractionalsharesorfractionaldepositoryreceiptsdescribedintheforegoingparagraphs(b)(2)a.andb.ofthissection;or
d.Anycombinationofthesharesofstock,depositoryreceiptsandcashinlieuoffractionalsharesorfractionaldepositoryreceiptsdescribedintheforegoingparagraphs(b)
(2)a.,b.andc.ofthissection.
(3)
IntheeventallofthestockofasubsidiaryDelawarecorporationpartytoamergereffectedunder251(h),253or267ofthistitleisnotownedbytheparentimmediately
priortothemerger,appraisalrightsshallbeavailableforthesharesofthesubsidiaryDelawarecorporation.
(4)
Intheeventofanamendmenttoacorporationscertificateofincorporationcontemplatedby363(a)ofthistitle,appraisalrightsshallbeavailableascontemplatedby
363(b)ofthistitle,andthe
C-1
TableofContents
proceduresofthissection,includingthosesetforthinsubsections(d)and(e)ofthissection,shallapplyasnearlyaspracticable,withthewordamendmentsubstitutedforthewords
mergerorconsolidation,andthewordcorporationsubstitutedforthewordsconstituentcorporationand/orsurvivingorresultingcorporation.
(c)
Anycorporationmayprovideinitscertificateofincorporationthatappraisalrightsunderthissectionshallbeavailableforthesharesofanyclassorseriesofitsstockasaresultof
anamendmenttoitscertificateofincorporation,anymergerorconsolidationinwhichthecorporationisaconstituentcorporationorthesaleofallorsubstantiallyalloftheassetsofthe
corporation.Ifthecertificateofincorporationcontainssuchaprovision,theproceduresofthissection,includingthosesetforthinsubsections(d)and(e)ofthissection,shallapplyas
nearlyasispracticable.
(d)
Appraisalrightsshallbeperfectedasfollows:
(1)
Ifaproposedmergerorconsolidationforwhichappraisalrightsareprovidedunderthissectionistobesubmittedforapprovalatameetingofstockholders,thecorporation,not
lessthan20dayspriortothemeeting,shallnotifyeachofitsstockholderswhowassuchontherecorddatefornoticeofsuchmeeting(orsuchmemberswhoreceivednoticein
accordancewith255(c)ofthistitle)withrespecttosharesforwhichappraisalrightsareavailablepursuanttosubsection(b)or(c)ofthissectionthatappraisalrightsareavailable
foranyorallofthesharesoftheconstituentcorporations,andshallincludeinsuchnoticeacopyofthissectionand,if1oftheconstituentcorporationsisanonstockcorporation,a
copyof114ofthistitle.Eachstockholderelectingtodemandtheappraisalofsuchstockholderssharesshalldelivertothecorporation,beforethetakingofthevoteonthemerger
orconsolidation,awrittendemandforappraisalofsuchstockholdersshares.Suchdemandwillbesufficientifitreasonablyinformsthecorporationoftheidentityofthestockholder
andthatthestockholderintendstherebytodemandtheappraisalofsuchstockholdersshares.Aproxyorvoteagainstthemergerorconsolidationshallnotconstitutesuchademand.
Astockholderelectingtotakesuchactionmustdosobyaseparatewrittendemandashereinprovided.Within10daysaftertheeffectivedateofsuchmergerorconsolidation,the
survivingorresultingcorporationshallnotifyeachstockholderofeachconstituentcorporationwhohascompliedwiththissubsectionandhasnotvotedinfavoroforconsentedto
themergerorconsolidationofthedatethatthemergerorconsolidationhasbecomeeffective;or
(2)
Ifthemergerorconsolidationwasapprovedpursuantto228,
251(h),
253,
or
267
ofthistitle,theneitheraconstituentcorporationbeforetheeffectivedateofthemergeror
consolidationorthesurvivingorresultingcorporationwithin10daysthereaftershallnotifyeachoftheholdersofanyclassorseriesofstockofsuchconstituentcorporationwhoare
entitledtoappraisalrightsoftheapprovalofthemergerorconsolidationandthatappraisalrightsareavailableforanyorallsharesofsuchclassorseriesofstockofsuchconstituent
corporation,andshallincludeinsuchnoticeacopyofthissectionand,
if
1
of
the
constituent
corporations
is
a
nonstock
corporation,
a
copy
of
114
of
this
title
.Suchnoticemay,
and,ifgivenonoraftertheeffectivedateofthemergerorconsolidation,shall,alsonotifysuchstockholdersoftheeffectivedateofthemergerorconsolidation.Anystockholder
entitledtoappraisalrightsmay,within20
days
after
the
date
of
mailing
of
such
notice
or,
in
the
case
of
a
merger
approved
pursuant
to
251(h)
of
this
title,
within
the
later
of
the
consummation
of
the
tender
or
exchange
offer
contemplated
by
251(h)
of
this
title
and
20daysafterthedateofmailingofsuchnotice,demandinwritingfromthesurvivingor
resultingcorporationtheappraisalofsuchholdersshares.Suchdemandwillbesufficientifitreasonablyinformsthecorporationoftheidentityofthestockholderandthatthe
stockholderintendstherebytodemandtheappraisalofsuchholdersshares.Ifsuchnoticedidnotnotifystockholdersoftheeffectivedateofthemergerorconsolidation,either
(i)eachsuchconstituentcorporationshallsendasecondnoticebeforetheeffectivedateofthemergerorconsolidationnotifyingeachoftheholdersofanyclassorseriesofstockof
suchconstituentcorporationthatareentitledtoappraisalrightsoftheeffectivedateofthemergerorconsolidationor(ii)thesurvivingorresultingcorporationshallsendsucha
secondnoticetoallsuchholdersonorwithin
C-2
TableofContents
10daysaftersucheffectivedate;provided,however,thatifsuchsecondnoticeissentmorethan20
days
following
the
sending
of
the
first
notice
or,
in
the
case
of
a
merger
approved
pursuant
to
251(h)
of
this
title,
later
than
the
later
of
the
consummation
of
the
tender
or
exchange
offer
contemplated
by
251(h)
of
this
title
and
20daysfollowingthesendingofthe
firstnotice,suchsecondnoticeneedonlybesenttoeachstockholderwhoisentitledtoappraisalrightsandwhohasdemandedappraisalofsuchholderssharesinaccordancewith
thissubsection.Anaffidavitofthesecretaryorassistantsecretaryorofthetransferagentofthecorporationthatisrequiredtogiveeithernoticethatsuchnoticehasbeengivenshall,
intheabsenceoffraud,beprimafacieevidenceofthefactsstatedtherein.Forpurposesofdeterminingthestockholdersentitledtoreceiveeithernotice,eachconstituentcorporation
mayfix,inadvance,arecorddatethatshallbenotmorethan10dayspriortothedatethenoticeisgiven,provided,thatifthenoticeisgivenonoraftertheeffectivedateofthe
mergerorconsolidation,therecorddateshallbesucheffectivedate.Ifnorecorddateisfixedandthenoticeisgivenpriortotheeffectivedate,therecorddateshallbethecloseof
businessonthedaynextprecedingthedayonwhichthenoticeisgiven.
(e)
Within120daysaftertheeffectivedateofthemergerorconsolidation,thesurvivingorresultingcorporationoranystockholderwhohascompliedwithsubsections(a)and(d)of
thissectionhereofandwhoisotherwiseentitledtoappraisalrights,maycommenceanappraisalproceedingbyfilingapetitionintheCourtofChancerydemandingadeterminationof
thevalueofthestockofallsuchstockholders.Notwithstandingtheforegoing,atanytimewithin60daysaftertheeffectivedateofthemergerorconsolidation,anystockholderwhohas
notcommencedanappraisalproceedingorjoinedthatproceedingasanamedpartyshallhavetherighttowithdrawsuchstockholdersdemandforappraisalandtoaccepttheterms
offereduponthemergerorconsolidation.Within120daysaftertheeffectivedateofthemergerorconsolidation,anystockholderwhohascompliedwiththerequirementsofsubsections
(a)and(d)ofthissectionhereof,uponwrittenrequest,shallbeentitledtoreceivefromthecorporationsurvivingthemergerorresultingfromtheconsolidationastatementsettingforth
theaggregatenumberofsharesnotvotedinfavorofthemergerorconsolidationandwithrespecttowhichdemandsforappraisalhavebeenreceivedandtheaggregatenumberof
holdersofsuchshares.Suchwrittenstatementshallbemailedtothestockholderwithin10daysaftersuchstockholderswrittenrequestforsuchastatementisreceivedbythesurviving
orresultingcorporationorwithin10daysafterexpirationoftheperiodfordeliveryofdemandsforappraisalundersubsection(d)ofthissectionhereof,whicheverislater.
Notwithstandingsubsection(a)ofthissection,apersonwhoisthebeneficialownerofsharesofsuchstockheldeitherinavotingtrustorbyanomineeonbehalfofsuchpersonmay,in
suchpersonsownname,fileapetitionorrequestfromthecorporationthestatementdescribedinthissubsection.
(f)
Uponthefilingofanysuchpetitionbyastockholder,serviceofacopythereofshallbemadeuponthesurvivingorresultingcorporation,whichshallwithin20daysaftersuch
servicefileintheofficeoftheRegisterinChanceryinwhichthepetitionwasfiledadulyverifiedlistcontainingthenamesandaddressesofallstockholderswhohavedemanded
paymentfortheirsharesandwithwhomagreementsastothevalueoftheirshareshavenotbeenreachedbythesurvivingorresultingcorporation.Ifthepetitionshallbefiledbythe
survivingorresultingcorporation,thepetitionshallbeaccompaniedbysuchadulyverifiedlist.TheRegisterinChancery,ifsoorderedbytheCourt,shallgivenoticeofthetimeand
placefixedforthehearingofsuchpetitionbyregisteredorcertifiedmailtothesurvivingorresultingcorporationandtothestockholdersshownonthelistattheaddressesthereinstated.
Suchnoticeshallalsobegivenby1ormorepublicationsatleast1weekbeforethedayofthehearing,inanewspaperofgeneralcirculationpublishedintheCityofWilmington,
DelawareorsuchpublicationastheCourtdeemsadvisable.TheformsofthenoticesbymailandbypublicationshallbeapprovedbytheCourt,andthecoststhereofshallbeborneby
thesurvivingorresultingcorporation.
(g)
Atthehearingonsuchpetition,theCourtshalldeterminethestockholderswhohavecompliedwiththissectionandwhohavebecomeentitledtoappraisalrights.TheCourtmay
requirethestockholderswhohavedemandedanappraisalfortheirsharesandwhoholdstockrepresentedbycertificatestosubmittheircertificatesofstocktotheRegisterinChancery
fornotationthereonofthependencyofthe
C-3
TableofContents
appraisalproceedings;andifanystockholderfailstocomplywithsuchdirection,theCourtmaydismisstheproceedingsastosuchstockholder.
(h)
AftertheCourtdeterminesthestockholdersentitledtoanappraisal,theappraisalproceedingshallbeconductedinaccordancewiththerulesoftheCourtofChancery,including
anyrulesspecificallygoverningappraisalproceedings.ThroughsuchproceedingtheCourtshalldeterminethefairvalueofthesharesexclusiveofanyelementofvaluearisingfromthe
accomplishmentorexpectationofthemergerorconsolidation,togetherwithinterest,ifany,tobepaidupontheamountdeterminedtobethefairvalue.Indeterminingsuchfairvalue,
theCourtshalltakeintoaccountallrelevantfactors.UnlesstheCourtinitsdiscretiondeterminesotherwiseforgoodcauseshown,interestfromtheeffectivedateofthemergerthrough
thedateofpaymentofthejudgmentshallbecompoundedquarterlyandshallaccrueat5%overtheFederalReservediscountrate(includinganysurcharge)asestablishedfromtimeto
timeduringtheperiodbetweentheeffectivedateofthemergerandthedateofpaymentofthejudgment.Uponapplicationbythesurvivingorresultingcorporationorbyanystockholder
entitledtoparticipateintheappraisalproceeding,theCourtmay,initsdiscretion,proceedtotrialupontheappraisalpriortothefinaldeterminationofthestockholdersentitledtoan
appraisal.Anystockholderwhosenameappearsonthelistfiledbythesurvivingorresultingcorporationpursuanttosubsection(f)ofthissectionandwhohassubmittedsuch
stockholderscertificatesofstocktotheRegisterinChancery,ifsuchisrequired,mayparticipatefullyinallproceedingsuntilitisfinallydeterminedthatsuchstockholderisnotentitled
toappraisalrightsunderthissection.
(i)
TheCourtshalldirectthepaymentofthefairvalueoftheshares,togetherwithinterest,ifany,bythesurvivingorresultingcorporationtothestockholdersentitledthereto.Payment
shallbesomadetoeachsuchstockholder,inthecaseofholdersofuncertificatedstockforthwith,andthecaseofholdersofsharesrepresentedbycertificatesuponthesurrendertothe
corporationofthecertificatesrepresentingsuchstock.TheCourtsdecreemaybeenforcedasotherdecreesintheCourtofChancerymaybeenforced,whethersuchsurvivingor
resultingcorporationbeacorporationofthisStateorofanystate.
(j)
ThecostsoftheproceedingmaybedeterminedbytheCourtandtaxeduponthepartiesastheCourtdeemsequitableinthecircumstances.Uponapplicationofastockholder,the
Courtmayorderalloraportionoftheexpensesincurredbyanystockholderinconnectionwiththeappraisalproceeding,including,withoutlimitation,reasonableattorneysfeesandthe
feesandexpensesofexperts,tobechargedprorataagainstthevalueofallthesharesentitledtoanappraisal.
(k)
Fromandaftertheeffectivedateofthemergerorconsolidation,nostockholderwhohasdemandedappraisalrightsasprovidedinsubsection(d)ofthissectionshallbeentitledto
votesuchstockforanypurposeortoreceivepaymentofdividendsorotherdistributionsonthestock(exceptdividendsorotherdistributionspayabletostockholdersofrecordatadate
whichispriortotheeffectivedateofthemergerorconsolidation);provided,however,thatifnopetitionforanappraisalshallbefiledwithinthetimeprovidedinsubsection(e)ofthis
section,orifsuchstockholdershalldelivertothesurvivingorresultingcorporationawrittenwithdrawalofsuchstockholdersdemandforanappraisalandanacceptanceofthemerger
orconsolidation,eitherwithin60daysaftertheeffectivedateofthemergerorconsolidationasprovidedinsubsection(e)ofthissectionorthereafterwiththewrittenapprovalofthe
corporation,thentherightofsuchstockholdertoanappraisalshallcease.Notwithstandingtheforegoing,noappraisalproceedingintheCourtofChanceryshallbedismissedastoany
stockholderwithouttheapprovaloftheCourt,andsuchapprovalmaybeconditioneduponsuchtermsastheCourtdeemsjust;provided,howeverthatthisprovisionshallnotaffectthe
rightofanystockholderwhohasnotcommencedanappraisalproceedingorjoinedthatproceedingasanamedpartytowithdrawsuchstockholdersdemandforappraisalandtoaccept
thetermsoffereduponthemergerorconsolidationwithin60daysaftertheeffectivedateofthemergerorconsolidation,assetforthinsubsection(e)ofthissection.
(l)
Thesharesofthesurvivingorresultingcorporationtowhichthesharesofsuchobjectingstockholderswouldhavebeenconvertedhadtheyassentedtothemergerorconsolidation
shallhavethestatusofauthorizedandunissuedsharesofthesurvivingorresultingcorporation.
C-4

VOTEBYINTERNET-www.proxyvote.comUsetheinternettotransmityourvotinginstructionsandforelectronicdeliveryofinformationupuntil11:59p.m.,Easterntime,thedaybeforethespecialmeetingdate.Haveyourproxycardinhandwhenyouaccessthewebsiteandfollowtheinstructionstoobtainyourrecordsandtocreateanelectronicvotinginstructionform.LINKEDINCORPORATION2029STIERLINCOURTMOUNTAINVIEW,CA94043VOTEBYPHONE-1-800-690-6903Useanytouch-tonetelephonetotransmityourvotinginstructionsupuntil11:59p.m.,Easterntime,thedaybeforethespecialmeetingdate.Haveyourproxycardinhandwhenyoucallandthenfollowtheinstructions.VOTEBYMAILMark,signanddateyourproxycardandreturnitinthepostage-paidenvelopewehaveprovidedorreturnittoVoteProcessing,c/oBroadridge,51MercedesWay,Edgewood,NY11717.TOVOTE,MARKBLOCKSBELOWINBLUEORBLACKINKASFOLLOWS:E12521-TBDKEEPTHISPORTIONFORYOURRECORDSDETACHANDRETURNTHISPORTIONONLYTHISPROXYCARDISVALIDONLYWHENSIGNEDANDDATED.LINKEDINCORPORATIONTHEBOARDOFDIRECTORSRECOMMENDSYOUVOTEFORPROPOSALS1,2AND3.ForAgainstAbstain!!!!!!!!!1.ToadopttheAgreementandPlanofMerger,datedasofJune11,2016,asitmaybeamendedfromtimetotime,byandamongLinkedInCorporation,MicrosoftCorporationandLibertyMergerSubInc.(themergeragreement).Toapproveanyproposaltoadjournthespecialmeetingtoalaterdateordates,ifnecessaryorappropriate,tosolicitadditionalproxiesifthereareinsufficientvotestoadoptthemergeragreementatthetimeoftheSpecialMeeting.Toapprove,bynon-binding,advisoryvote,compensationthatwillormaybecomepayablebyLinkedInCorporationtoitsnamedexecutiveofficersinconnectionwiththemerger.2.3.NOTE:Suchotherbusinessasmayproperlycomebeforethespecialmeetingoranypostponementoradjournmentthereof.Thisproxyshouldbemarked,datedandsignedbythestockholder(s)exactlyashis/hernameappearshereon,andreturnedpromptlyintheenclosedenvelope.Personssigninginafiduciarycapacityshouldsoindicate.Ifsharesareheldbyjointtenantsorascommunityproperty,bothshouldsign.Signature[PLEASESIGNWITHINBOX]DateSignature(JointOwners)Date
PRELIMINARYFORMOFPROXYCARDSUBJECTTOCOMPLETIONE12522-TBDLINKEDINCORPORATIONPROXYFORSPECIALMEETINGOFSTOCKHOLDERSTHISPROXYISSOLICITEDONBEHALFOFTHEBOARDOFDIRECTORSThestockholder(s)herebyappoint(s)MichaelCallahanandStevenSordello,oreitherofthem,asproxies,eachwiththepowertoappointhissubstitute,andherebyauthorize(s)themtorepresentandtovote,asdesignatedonthereversesideofthisproxy,allofthesharesofClassAandClassBcommonstockofLINKEDINCORPORATIONthatthestockholder(s)is/areentitledtovoteattheSpecialMeetingofStockholders,tobeheldon[],2016,attheComputerHistoryMuseum,1401N.ShorelineBlvd.,MountainView,CA94043,at[],Pacifictime,andanyandalladjournments,postponementsorotherdelaysthereof(theSpecialMeeting).THEBOARDOFDIRECTORSRECOMMENDSTHATYOUVOTEFORPROPOSALS1,2AND3.THISPROXY,WHENPROPERLYEXECUTED,WILLBEVOTEDASDIRECTEDBYTHESTOCKHOLDER(S).IFNODIRECTIONSAREMADE,THISPROXYWILLBEVOTEDFORPROPOSALS1,2AND3,ANDINTHEDISCRETIONOFTHEPROXIESWITHRESPECTTOANYOTHERBUSINESSASMAYPROPERLYCOMEBEFORETHESPECIALMEETING.PLEASESIGN,DATEANDRETURNTHISPROXYCARDPROMPTLYUSINGTHEENCLOSEDREPLYENVELOPE.Asaresultofhisownershipofapproximately[]%ofthevotingpoweroftheoutstandingsharesofcommonstock,ReidHoffman,LinkedIn'sco-founderandChairoftheLinkedInBoardofDirectors,willhavethepowertoapprovetheadoptionoftheproposalswithoutthevoteofanyotherstockholder.Accordingly,ifMr.Hoffmanvoteshissharesinfavoroftheproposals,theapprovaloftheproposalsisassuredwithoutthevoteofanyotherstockholder.CONTINUEDANDTOBESIGNEDONREVERSESIDE

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TableofContents

Liberty Merger Sub Inc.

Date, Time and Place

Record Date; Shares Entitled to Vote

Share Ownership of Our Directors and Executive Officers

Voting and Proxies

Company Stock-Based Awards

Employee Stock Purchase Plan

Liberty Merger Sub Inc.

Recommendation of the LinkedIn Board

Reasons for the Merger

Illustrative Discounted Cash Flow Analysis

Selected Companies Analysis

Selected Transactions Analysis

Non-GAAP Financial Measures

Reconciliation of Adjusted EBITDA to Net Income

Reconciliation of Modified EBITDA to Net Income

Insurance and Indemnification of Directors and Executive Officers

Treatment of Equity-Based Awards

Equity Interests of LinkedIns Executive Officers and Non-Employee Directors

Payments Upon Termination Following Change of Control

Employment Arrangements Following the Merger

Golden Parachute Compensation

Filing Written Demand

Notice by the Surviving Corporation

Filing a Petition for Appraisal

Determination of Fair Value

Information Reporting and Backup Withholding

HSR Act and U.S. Antitrust Matters

Foreign Competition Laws

Other Regulatory Approvals

Equity Awards; ESPP

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