- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
--------------------------
NEWSEDGE CORPORATION
(Name of Subject Company (Issuer))
--------------------------
INFOBLADE ACQUISITION CORPORATION (OFFEROR)
THE THOMSON CORPORATION (PARENT)
(Names of Filing Persons (identifying status as offeror, issuer or other
person))
--------------------------
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
--------------------------
652 49 Q 10 6
(CUSIP NUMBER OF CLASS OF SECURITIES)
EDWARD A. FRIEDLAND, ESQ.
DEPUTY GENERAL COUNSEL
THE THOMSON CORPORATION
METRO CENTER, ONE STATION PLACE
STAMFORD CONNECTICUT 06902
TELEPHONE (203) 969-8700
(Name, address and telephone number of persons authorized to receive notices and
communications on behalf of filing persons)
--------------------------
COPIES TO:
JOSEPH J. ROMAGNOLI, ESQ.
LEE J. HIRSCH, ESQ.
TORYS
237 PARK AVENUE
NEW YORK, NEW YORK 10017-3142
(212) 880-6000
--------------------------
CALCULATION OF FILING FEE
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
$46,240,954.90 $9,248.19
* Estimated for purposes of calculating the amount of the filing fee only.
Calculated by multiplying $2.30, the per share tender offer price, by
20,104,763, the sum of 18,621,403, the currently outstanding shares of
Common Stock sought in the Offer, 1,463,781 of the shares of Common Stock
subject to options that will be vested as of December 31, 2001, and 19,579
of the shares of Common Stock issuable pursuant to rights granted under the
NewsEdge Employee Stock Purchase Plan.
** Calculated as 1/50 of 1% of the transaction value.
/ / Check the box if any part of the fee is offset as provided by
Rule 0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:
Form or Registration No.:
Filing Party:
Date Filed:
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes to designate any transactions to which the
statement relates:
/X/ third-party tender offer subject to Rule 14d-1.
/ / issuer tender offer subject to Rule 13e-4.
/ / going-private transaction subject to Rule 13e-3.
/ / amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: / /
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- --------------------------------------------------------------------------------
This Tender Offer Statement on Schedule TO (this "Schedule TO"), is filed by
InfoBlade Acquisition Corporation, a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of The Thomson Corporation, a corporation
organized under the laws of Ontario, Canada ("Thomson"). This Schedule TO
relates to the offer by Purchaser to purchase all the outstanding shares of
common stock, par value $0.01 ("Shares"), of NewsEdge Corporation, a Delaware
corporation ("NewsEdge"), at a purchase price of $2.30 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated August 21, 2001 (the "Offer to Purchase") and in the
related Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2) (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). The information set forth in the Offer to
Purchase and the related Letter of Transmittal is incorporated herein by
reference with respect to Items 1-9 and 11 of this Schedule TO. The Agreement
and Plan of Merger, dated as of August 6, 2001, among Thomson, Purchaser and
NewsEdge, a copy of which is attached as Exhibit (d)(1) hereto is incorporated
herein by reference with respect to Items 5 and 11 of this Schedule TO.
ITEM 10. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 12. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated August 21, 2001.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees, dated August 21, 2001.
(a)(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees, dated
August 21, 2001.
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street
Journal on August 21, 2001.
(a)(8) Joint Press Release issued by Thomson and NewsEdge on August
7, 2001.
(a)(9) Press Release issued by Thomson on August 21, 2001.
(b) None.
(d)(1) Agreement and Plan of Merger, dated as of August 6, 2001,
among Thomson, Purchaser and NewsEdge. (The exhibits and
schedules to the Agreement and Plan of Merger are not filed
as part of this Schedule TO. A list briefly identifying the
contents of the omitted exhibits and schedules appears in
the table of contents to the Agreement and Plan of Merger.
Thomson and Purchaser undertake to furnish supplementally a
copy of any omitted exhibit or schedule to the Commission
upon request.)
(d)(2) Confidentiality Agreement dated May 16, 2001, between
Broadview International LLC, on behalf of NewsEdge, and West
Group, an affiliate of Thomson.
(d)(3) Stockholders Agreement, dated August 6, 2001, among Thomson,
Purchaser and each of Ronald Benanto, Rory J. Cowan,
James D. Daniell, Murat H. Davidson, Jr., William A.
Devereaux, Michael E. Kolowich, Donald L. McLagan,
Clifford M. Pollan, Basil P. Regan and Peter Woodward
(collectively, the "Selling Stockholders"), together with
Schedule I relating to each Selling Stockholder.
2
(d)(4) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Ronald Benanto.
(d)(5) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and John Crozier.
(d)(6) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Thomas Karanian.
(d)(7) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Lee Phillips.
(d)(8) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Clifford Pollan.
(d)(9) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and David Scott.
(d)(10) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Charles White.
(d)(11) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Alton Zink.
(g) None.
(h) None.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not applicable.
3
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: August 21, 2001 INFOBLADE ACQUISITION CORPORATION
By: /s/ EDWARD A. FRIEDLAND
-----------------------------------------
Name: Edward A. Friedland
Title: Vice President and Secretary
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: August 21, 2001 THE THOMSON CORPORATION
By: /s/ MICHAEL S. HARRIS
-----------------------------------------
Name: Michael S. Harris
Title: Senior Vice President,
General Counsel and Secretary
4
EXHIBIT INDEX
EXHIBIT NO.
- ---------------------
(a)(1) Offer to Purchase dated August 21, 2001.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees, dated August 21, 2001.
(a)(5) Form of Letter to Clients for Use by from Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees, dated
August 21, 2001.
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street
Journal on August 21, 2001.
(a)(8) Joint Press Release issued by Thomson and NewsEdge on
August 7, 2001.
(a)(9) Press Release issued by Thomson on August 21, 2001.
(b) None.
(d)(1) Agreement and Plan of Merger, dated as of August 6, 2001,
among Thomson, Purchaser and NewsEdge. (The exhibits and
schedules to the Agreement and Plan of Merger are not filed
as part of this Schedule TO. A list briefly identifying the
contents of the omitted exhibits and schedules appears in
the table of contents to the Agreement and Plan of Merger.
Thomson and Purchaser undertake to furnish supplementally a
copy of any omitted exhibit or schedule to the Commission
upon request.)
(d)(2) Confidentiality Agreement dated May 16, 2001, between
Broadview International LLC, on behalf of NewsEdge, and West
Group, an affiliate of Thomson.
(d)(3) Stockholders Agreement, dated August 6, 2001, among Thomson,
Purchaser and each of Ronald Benanto, Rory J. Cowan,
James D. Daniell, Murat H. Davidson, Jr., William A.
Devereaux, Michael E. Kolowich, Donald L. McLagan,
Clifford M. Pollan, Basil P. Regan and Peter Woodward
(collectively, the "Selling Stockholders"), together with
Schedule I relating to each Selling Stockholder.
(d)(4) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Ronald Benanto.
(d)(5) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and John Crozier.
(d)(6) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Thomas Karanian.
(d)(7) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Lee Phillips.
(d)(8) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Clifford Pollan.
(d)(9) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and David Scott.
(d)(10) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Charles White.
(d)(11) Amended and Restated Executive Employment Agreement, dated
August 6, 2001 between NewsEdge and Alton Zink.
(g) None.
(h) None.
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NEWSEDGE CORPORATION
AT
$2.30 NET PER SHARE
BY
INFOBLADE ACQUISITION CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
-----------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, SEPTEMBER 18, 2001, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO THE TERMS OF AN AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 6, 2001 (THE "MERGER AGREEMENT") AMONG THE THOMSON
CORPORATION ("THOMSON"), INFOBLADE ACQUISITION CORPORATION ("PURCHASER") AND
NEWSEDGE CORPORATION ("NEWSEDGE").
-------------------
THE BOARD OF DIRECTORS OF NEWSEDGE HAS UNANIMOUSLY DETERMINED THAT THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER (EACH AS DEFINED HEREIN), ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
HOLDERS OF SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF NEWSEDGE
("SHARES"), HAS APPROVED AND DECLARED ADVISABLE THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND HAS
RESOLVED TO RECOMMEND THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
-------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES THAT SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES
ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE
UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY
OPTIONS, WARRANTS, OR RIGHTS, BUT EXCLUDING OPTIONS AND WARRANTS OWNED BY EACH
OF THE SELLING STOCKHOLDERS (AS DEFINED HEREIN) WHO HAVE ENTERED INTO THE
STOCKHOLDERS AGREEMENT) (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1 AND
14, WHICH SET FORTH IN FULL THE CONDITIONS TO THE OFFER.
-------------------
August 21, 2001
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF SUCH STOCKHOLDER'S
SHARES SHOULD EITHER (I) COMPLETE AND SIGN THE ACCOMPANYING LETTER OF
TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE THEREOF) IN ACCORDANCE WITH THE
INSTRUCTIONS IN THE LETTER OF TRANSMITTAL AND MAIL OR DELIVER IT TOGETHER WITH
THE STOCK CERTIFICATE(S) EVIDENCING TENDERED SHARES, AND ANY OTHER REQUIRED
DOCUMENTS, TO COMPUTERSHARE TRUST COMPANY OF NEW YORK, AS THE DEPOSITARY, OR
TENDER SUCH SHARES PURSUANT TO THE PROCEDURE FOR BOOK-ENTRY TRANSFER SET FORTH
IN SECTION 3 OR (II) REQUEST SUCH STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK,
TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE TRANSACTION FOR SUCH STOCKHOLDER.
ANY STOCKHOLDER WHOSE SHARES ARE REGISTERED IN THE NAME OF A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF SUCH STOCKHOLDER
DESIRES TO TENDER SUCH SHARES.
A STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE STOCK CERTIFICATES
EVIDENCING SUCH SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY WITH
THE PROCEDURE FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS, MAY TENDER SUCH SHARES
BY FOLLOWING THE PROCEDURE FOR GUARANTEED DELIVERY SET FORTH IN SECTION 3.
QUESTIONS OR REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION AGENT AT
ITS ADDRESS AND TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS OFFER TO
PURCHASE. ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL
AND THE NOTICE OF GUARANTEED DELIVERY MAY ALSO BE OBTAINED FROM THE INFORMATION
AGENT OR FROM BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST COMPANIES.
TABLE OF CONTENTS
PAGE
--------
SUMMARY OF THE OFFER............................................. 1
INTRODUCTION..................................................... 5
1. TERMS OF THE OFFER; EXPIRATION DATE......................... 8
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES............... 10
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES..... 11
4. WITHDRAWAL RIGHTS........................................... 14
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES....... 14
6. PRICE RANGE OF SHARES; DIVIDENDS............................ 15
7. CERTAIN INFORMATION CONCERNING NEWSEDGE..................... 16
8. CERTAIN INFORMATION CONCERNING PURCHASER AND THOMSON........ 18
9. FINANCING OF THE OFFER AND THE MERGER....................... 19
10. BACKGROUND OF THE OFFER; CONTACTS WITH NEWSEDGE; THE MERGER
AGREEMENT AND RELATED AGREEMENTS; INTERESTS OF CERTAIN
PERSONS IN THE MERGER....................................... 19
11. PURPOSE OF THE OFFER; PLANS FOR NEWSEDGE AFTER THE OFFER AND
THE MERGER.................................................. 37
12. DIVIDENDS AND DISTRIBUTIONS................................. 39
13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES,
NASDAQ LISTING, MARGIN REGULATIONS AND EXCHANGE ACT
REGISTRATION................................................ 39
14. CERTAIN CONDITIONS TO THE OFFER............................. 40
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.............. 42
16. FEES AND EXPENSES........................................... 44
17. MISCELLANEOUS............................................... 44
SCHEDULES
SCHEDULE I. DIRECTORS AND EXECUTIVE OFFICERS OF
THOMSON..................................................... I-1
SCHEDULE II. DIRECTORS AND EXECUTIVE OFFICERS OF
PURCHASER................................................... II-1
SUMMARY OF THE OFFER
THIS SUMMARY OF THE OFFER HIGHLIGHTS SELECTED INFORMATION FROM THIS OFFER TO
PURCHASE AND MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. TO
BETTER UNDERSTAND OUR OFFER TO YOU AND FOR A COMPLETE DESCRIPTION OF THE TERMS
OF THE OFFER, YOU SHOULD READ THIS ENTIRE OFFER TO PURCHASE AND THE ACCOMPANYING
LETTER OF TRANSMITTAL CAREFULLY. QUESTIONS OR REQUESTS FOR ASSISTANCE MAY BE
DIRECTED TO THE INFORMATION AGENT AT ITS ADDRESS AND TELEPHONE NUMBER SET FORTH
ON THE BACK COVER OF THIS OFFER TO PURCHASE.
WHO IS OFFERING TO BUY MY SECURITIES?
- We are InfoBlade Acquisition Corporation, a newly formed Delaware
corporation and an indirect wholly owned subsidiary of The Thomson
Corporation, a corporation organized under the laws of Ontario, Canada
("Thomson"). We have been organized in connection with this offer and have
not carried on any activities other than in connection with this offer.
- Thomson is a corporation incorporated in Ontario, Canada. Thomson
(www.thomson.com) is a leading global e-information and solutions company
in the business and professional marketplace. Thomson is comprised of four
global market groups. The Legal & Regulatory group is a leading provider
of information and software-based solutions for legal, tax, accounting,
intellectual property, compliance and business professionals. The
Financial group provides information and integrated work solutions to the
worldwide financial community. The Learning group is among the world's
largest providers of learning products, services and solutions for
individuals, learning institutions and businesses. The Scientific &
Healthcare group provides high-value information and services to
researchers and other professionals in the academic, scientific,
government and healthcare marketplaces. Thomson's common shares are listed
on the Toronto and London Stock Exchanges.
WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THIS OFFER?
- We are offering to purchase all the outstanding shares of common stock,
$0.01 par value per share, of NewsEdge Corporation, a Delaware corporation
("NewsEdge"). Please see the "Introduction" and Section 1.
HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
- We are offering to pay $2.30 per share, net to you in cash and without
interest. Please see the "Introduction" and Section 1.
- If you tender your shares in the offer, you will not be obligated to pay
brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with
respect to the sale of shares. Please see the "Introduction".
WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
- We are not obligated to purchase any shares unless at least a majority of
the outstanding shares are validly tendered and not withdrawn prior to the
expiration of the offer. Please see Sections 1 and 4.
- Please read Sections 1 and 14 of the offer, which set forth in full the
conditions to the offer.
DO YOU HAVE ENOUGH FINANCIAL RESOURCES TO MAKE PAYMENT?
- We will obtain all necessary funds to purchase the shares of NewsEdge's
common stock from Thomson or one of Thomson's other subsidiaries. Thomson
and its subsidiaries will provide such funds from existing resources. For
a more detailed description of the financing of the offer and the merger,
see Section 9.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
- Because the form of payment consists solely of cash and all of the funding
that will be needed has already been arranged, and also because of the
lack of any relevant historical information concerning InfoBlade
Acquisition Corporation, we do not think our financial condition is
relevant to your decision to tender in the offer.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
- You will have until at least 12:00 midnight, New York City time, on,
Tuesday, September 18, 2001 to tender your shares of NewsEdge's common
stock. If you cannot deliver everything that is required in order to make
a valid tender by that time, you may be able to use the guaranteed
delivery procedure that is described in Section 3.
CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
- We have the right, subject to the terms of the Merger Agreement and
applicable law, to extend the period of time during which the offer
remains open for up to three times for periods of no more than five
business days each if certain conditions to the offer have not been
satisfied or waived. Please see Section 1.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
- If we decide to extend the offer, we will inform Computershare Trust
Company of New York, the depositary, of that fact, and will issue a press
release giving the new expiration date no later than 9:00 a.m., New York
City time, on the day after the day on which the offer was previously
scheduled to expire. Please see Section 1.
WILL THERE BE A SUBSEQUENT OFFERING PERIOD?
- If, at the expiration of the initial offering period, or any permitted
extension of the offer, all of the conditions have been satisfied or
waived, we will close on the offer and accept for payment any shares of
NewsEdge's common stock tendered in the offer. If the number of tendered
shares is less than all of the outstanding shares, we have the right to
commence a subsequent offer for a period of at least three business days
but not more than 20 business days to try and obtain the remaining
outstanding shares. During this subsequent offering period, we will accept
for payment any shares that are tendered upon receipt of those shares.
NewsEdge stockholders who tender their shares during the subsequent
offering period will not have to wait until the expiration of the
subsequent offering period to have their tendered shares accepted for
payment.
HOW DO I TENDER MY SHARES?
To tender your shares in the offer, you must:
- complete and sign the accompanying Letter of Transmittal (or a manually
signed facsimile of the Letter of Transmittal) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together
with your share certificates and any other required documents, to the
depositary;
- tender your shares pursuant to the procedure for book-entry transfer set
forth in Section 3; or
- if your share certificates are not immediately available or if you cannot
deliver your share certificates, and any other required documents, to the
depositary, prior to the expiration of the offer, or you cannot complete
the procedure for delivery by book-entry transfer on a timely basis, you
may still tender your shares if you comply with the guaranteed delivery
procedures described in Section 3.
2
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
- You may withdraw any previously tendered shares at any time prior to the
expiration of the offer, and, unless we have previously accepted them for
payment pursuant to the offer, you may also withdraw any tendered shares
of NewsEdge's common stock at any time after October 19, 2001. Please see
Section 4.
HOW DO I WITHDRAW MY PREVIOUSLY TENDERED SHARES?
- In order to withdraw your tender of shares, you must deliver a written or
facsimile notice of withdrawal with the required information to the
depositary while you still have the right to withdraw. If you tendered
shares by giving instructions to a broker or bank, you must instruct the
broker or bank to arrange for the withdrawal of your shares. Please see
Section 4.
WHAT DOES NEWSEDGE'S BOARD OF DIRECTORS THINK OF THE OFFER?
- The Board of Directors of NewsEdge has unanimously determined that the
merger agreement and the transactions contemplated thereby, including the
offer and the merger are fair to, and in the best interests of, the
stockholders of NewsEdge, and has approved and declared advisable the
merger agreement and the transactions contemplated thereby, including the
offer and the merger, and has resolved to recommend that the stockholders
accept the offer and tender their shares pursuant to the offer.
WILL NEWSEDGE CONTINUE AS A PUBLIC COMPANY?
- No. If the merger occurs, NewsEdge will no longer be publicly owned. Even
if the merger does not occur, if we purchase all the tendered shares,
there may be so few remaining stockholders and publicly held shares that
the shares may no longer be eligible to be listed on the Nasdaq National
Market or other securities markets, there may not be a public trading
market for the shares and NewsEdge may cease making filings with the
Securities and Exchange Commission or otherwise cease being required to
comply with Securities and Exchange Commission rules relating to publicly
held companies. Please see Section 13.
WILL THE TENDER OFFER BE FOLLOWED BY A MERGER IF ALL THE SHARES ARE NOT
TENDERED?
- If we accept for payment and pay for at least a majority of the
outstanding shares on a fully diluted basis, we will merge with and into
NewsEdge. If the merger occurs, NewsEdge will become an indirect wholly
owned subsidiary of Thomson, and each share that remains outstanding
(other than any shares held in the treasury of NewsEdge and any shares
held by stockholders seeking appraisal for their shares) will be canceled
and automatically converted into the right to receive $2.30 net per share,
in cash (or any greater amount per share paid pursuant to the offer).
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
- If you decide not to tender your shares in the offer and the merger
occurs, you will receive in the merger the same amount of cash per share
as if you would have tendered your shares in the offer.
- If you decide not to tender your shares in the offer and the merger does
not occur, or if we purchase all the tendered shares, there may be so few
remaining stockholders and publicly held shares that the shares may no
longer be eligible to be quoted on the Nasdaq National Market or other
securities markets, there may not be a public trading market for the
shares and NewsEdge may cease making filings with the Securities and
Exchange Commission or otherwise cease being required to comply with
Securities and Exchange Commission rules relating to publicly held
companies. Please see Section 13.
3
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
- On August 6, 2001, the last full trading day before we announced our
offer, the last reported closing price per share reported on the Nasdaq
National Market was $1.20 per share. On August 17, 2001, the last reported
closing price per share reported on the Nasdaq National Market was $2.27.
See Section 6.
WITH WHOM MAY I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?
- You can call Innisfree M&A Incorporated, the Information Agent, toll-free
at (888) 750-5834. See the back cover of this Offer to Purchase.
4
To the Holders of Common Stock of NewsEdge Corporation:
INTRODUCTION
InfoBlade Acquisition Corporation, a Delaware corporation ("Purchaser") and
an indirect wholly owned subsidiary of The Thomson Corporation, a corporation
organized under the laws of Ontario, Canada ("Thomson"), hereby offers to
purchase all the shares of common stock, par value $0.01 per share ("Shares"),
of NewsEdge Corporation, a Delaware corporation ("NewsEdge"), that are
outstanding for $2.30 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which, together with this Offer to
Purchase and any amendments or supplements hereto or thereto, collectively
constitute the "Offer"). See Section 8 for additional information concerning
Thomson and Purchaser.
Tendering stockholders who are record owners of their Shares and tender
directly to Computershare Trust Company of New York (the "Depositary") will not
be obligated to pay brokerage fees or commissions or, except as otherwise
provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes
with respect to the purchase of Shares by Purchaser pursuant to the Offer.
Nonetheless, any tendering stockholder or other payee who fails to complete and
sign the Substitute Form W-9 that is included in the Letter of Transmittal, may
be subject to a required back-up U.S. federal income tax withholding of 30.5% of
the gross proceeds payable to such stockholder or other payee pursuant to the
Offer. See Section 5. Purchaser or Thomson will pay all charges and expenses of
the Depositary and Innisfree M&A Incorporated (the "Information Agent") incurred
in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF NEWSEDGE (THE "BOARD") HAS UNANIMOUSLY DETERMINED
THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING
THE OFFER AND THE MERGER (AS DEFINED HEREIN), ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE HOLDERS OF SHARES OF NEWSEDGE, HAS APPROVED AND DECLARED
ADVISABLE THE MERGER AGREEMENT AND THE TRANSACTIONS (AS DEFINED HEREIN)
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND HAS RESOLVED TO
RECOMMEND THAT THE HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
Broadview International, LLC ("Broadview"), the financial advisor to
NewsEdge, has delivered to the Board its opinion to the effect that, as of
August 6, 2001, the cash consideration to be received by the holders of Shares
in connection with the Offer and the Merger was fair to them from a financial
point of view. A copy of the written opinion of Broadview is contained in
NewsEdge's Solicitation/ Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which has been filed with the Securities and Exchange
Commission (the "Commission") and is being mailed to you concurrently herewith.
YOU ARE URGED TO READ SUCH OPINION CAREFULLY IN ITS ENTIRETY FOR A DESCRIPTION
OF THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS OF THE REVIEW
UNDERTAKEN BY BROADVIEW.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THE
NUMBER OF SHARES THAT SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES
ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES ISSUABLE
UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE OF ANY
OPTIONS, WARRANTS, OR RIGHTS, BUT EXCLUDING OPTIONS AND WARRANTS OWNED BY EACH
OF THE SELLING STOCKHOLDERS (AS DEFINED HEREIN) WHO HAS ENTERED INTO THE
STOCKHOLDERS AGREEMENT) (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1 AND
14, WHICH SET FORTH IN FULL THE CONDITIONS TO THE OFFER.
5
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of August 6, 2001 (the "Merger Agreement"), among Thomson, Purchaser and
NewsEdge. The Merger Agreement provides, among other things, that as promptly as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction or, if permissible, waiver of the other conditions set forth in the
Merger Agreement, and in accordance with the relevant provisions of the General
Corporation Law of the State of Delaware ("Delaware Law"), Purchaser will be
merged with and into NewsEdge (the "Merger"). As a result of the Merger,
NewsEdge will continue as the surviving corporation (the "Surviving
Corporation") and will become an indirect wholly owned subsidiary of Thomson. At
the effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held in
the treasury of NewsEdge and other than Shares held by stockholders who shall
have demanded and perfected appraisal rights under Delaware Law, if any) shall
be canceled and automatically converted into the right to receive $2.30 in cash,
or any higher price that may be paid per Share in the Offer, without interest
(the "Merger Consideration"). Stockholders who demand and fully perfect
appraisal rights under Delaware Law will be entitled to receive, in connection
with the Merger, cash for the fair value of their Shares as determined pursuant
to the procedures prescribed by Delaware Law. See Section 11. The Merger
Agreement is more fully described in Section 10. Certain federal income tax
consequences of the sale of Shares pursuant to the Offer and the Merger, as the
case may be, are described in Section 5.
Simultaneously with the execution of the Merger Agreement, Thomson and
Purchaser have entered into a Stockholders Agreement dated as of August 6, 2001
(the "Stockholders Agreement") with all of the directors and certain executive
officers of NewsEdge, namely Clifford M. Pollan (Director, President and Chief
Executive Officer), Rory J. Cowan (Chairman), Michael E. Kolowich (Director),
William A. Devereaux (Director), James D. Daniell (Director), Basil P. Regan
(Director), Murat H. Davidson, Jr. (Director), Peter Woodward (Director), Ronald
Benanto (Vice President--Finance and Operations, Chief Financial Officer and
Treasurer) and a significant stockholder of NewsEdge, Donald McLagan (former
Chairman and Chief Executive Officer) (collectively, the "Selling Stockholders")
pursuant to which each Selling Stockholder agreed, among other things, to
(i) tender all of their respective Shares in the Offer, (ii) vote all of their
respective Shares in favor of the approval and adoption of the Merger Agreement,
the Merger and all the transactions contemplated by the Merger Agreement and
otherwise in such manner as may be necessary to consummate the Merger, against
any action, proposal, agreement or transaction that would result in a breach of
any covenant, obligation, agreement, representation or warranty of NewsEdge
under the Merger Agreement (whether or not theretofore terminated) and against
any action, agreement or transaction that would impair or materially delay the
ability of NewsEdge to consummate the transactions provided for in the Merger
Agreement or any Acquisition Proposal (as defined herein), and (iii) grant an
irrevocable proxy to Thomson and each of the Thomson's officers to vote and
otherwise act (by written consent or otherwise) with respect to such Selling
Stockholder's Shares at any meeting of stockholders of NewsEdge (whether annual
or special and whether or not an adjourned or postponed meeting) or by written
consent in lieu of any such meeting or otherwise with regard to any matter
covered in clause (ii). See Section 10.
Simultaneously with the execution of the Merger Agreement, each of Clifford
Pollan, Ronald Benanto, Charles White (Vice President--e-Content Business),
Thomas Karanian (Vice President--Development, Operations and Customer Services),
Alton Zink (Vice President--Human Resources), David Scott (Vice
President--Corporate Marketing), John Crozier (Vice President--North American
Sales) and Lee Phillips (Vice President--Product Marketing) (collectively, the
"Officers") have entered into amended and restated executive employment
agreements with NewsEdge dated as of August 6, 2001 (the "Amended Employment
Agreements"), in which each agreed to amend their existing employment
agreements. The Amended Employment Agreements provide, among other things, that
during the term of the Amended Employment Agreement and for a period equal to
12 months after the termination of the Officer's employment by NewsEdge (or any
affiliate thereof), the Officer shall not (i) engage in certain restricted
activities, including engaging in the businesses of developing, operating,
offering for sale and selling news or other current information or
software-based solutions pertaining thereto to corporations and other
businesses, government agencies, universities and other
6
academic institutions and professional services providers; (ii) subject to
certain exceptions, have an interest in any person engaged in the restricted
activities set forth in clause (i) in any capacity, including, without
limitation, as a partner, shareholder, officer, director, principal, agent,
employee, trustee or consultant or any other relationship or capacity; or
(iii) interfere with business relationships between NewsEdge or any of its
affiliates, customers or suppliers. The Amended Employment Agreements also
provide that during the term of the Amended Employment Agreement and for a
period equal to 18 months after the termination of the Officer's employment by
NewsEdge (or any affiliate thereof), the Officer shall not be an employee or
consultant of, or provide services to, certain competitors of NewsEdge or any of
their respective direct or indirect subsidiaries. See Section 10.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to the
next whole number (but rounded down if rounding up would cause Purchaser's
representation to constitute the entire Board), on the Board as will give
Purchaser representation on the Board equal to the product of the total number
of directors on the Board (giving effect to the directors elected pursuant to
this paragraph) multiplied by the percentage that the aggregate number of Shares
then beneficially owned by Purchaser or any affiliate of Purchaser following
such purchase bears to the total number of Shares then outstanding. In the
Merger Agreement, NewsEdge has agreed, at such time, promptly to take all
actions necessary to cause Purchaser's designees to be elected as directors of
NewsEdge, including increasing the size of the Board or securing the
resignations of incumbent directors, or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the satisfaction of the Minimum Condition as a
result of Purchaser's acquisition of Shares pursuant to the Offer, the
consummation of the Offer, and, if necessary, the approval and adoption of the
Merger Agreement and the Merger by the requisite vote of the stockholders of
NewsEdge. For a more detailed description of the conditions to the Merger, see
Section 14. Under NewsEdge's Second Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") and Delaware Law, the
affirmative vote of the holders of at least a majority of the outstanding Shares
is required to approve and adopt the Merger Agreement and the Merger.
Consequently, if Purchaser acquires (pursuant to the Offer or otherwise) a
majority of the outstanding Shares, then Purchaser will have sufficient voting
power to approve and adopt the Merger Agreement and the Merger without the vote
of any other holder of Shares. See Sections 10 and 11.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, Purchaser will be able
to approve and adopt the Merger Agreement and the Merger without a vote of
NewsEdge's stockholders. In such event, Thomson, Purchaser and NewsEdge have
agreed to take all necessary and appropriate action to cause the Merger to
become effective in accordance with Delaware Law as promptly as reasonably
practicable after such acquisition, without a meeting of NewsEdge's
stockholders. If, however, Purchaser does not acquire at least 90% of the then
outstanding Shares pursuant to the Offer or otherwise and a vote of NewsEdge's
stockholders is required under Delaware Law, a significantly longer period of
time will be required to effect the Merger. See Section 11.
7
NewsEdge has advised Purchaser that as of August 6, 2001, 18,621,403 Shares
were issued and outstanding, 3,841,026 Shares were reserved for future issuance
pursuant to outstanding employee stock options or such incentive rights granted
under NewsEdge's Stock Option Plans (as defined below), rights to purchase
19,579 Shares were outstanding in connection with rights to purchase Shares
granted pursuant to NewsEdge's 1995 Employee Stock Purchase Plan (the "ESPP")
and warrants to purchase 801,497 Shares were outstanding, together representing
on a fully diluted basis approximately 23,283,505 Shares. As of August 6, 2001,
432,000 Shares were held in the treasury of NewsEdge. As a result, and in
accordance with the terms of the Merger Agreement, as of such date, the Minimum
Condition would be satisfied if Purchaser acquired 10,742,921 Shares on an a
fully diluted basis (excluding options and warrants owned by each of the Selling
Stockholders). Also, as of such date, Purchaser could cause the Merger to become
effective in accordance with Delaware Law, without a meeting of NewsEdge's
stockholders, if Purchaser acquired 16,759,263 Shares, representing 90% of the
outstanding Shares.
No appraisal rights are available in connection with the Offer; however,
holders of Shares may have appraisal rights in connection with the Merger
regardless of whether the Merger is consummated with or without a vote of
NewsEdge's stockholders. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE YOU MAKE ANY DECISION WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for all Shares validly
tendered (and not withdrawn in accordance with the procedures set forth in
Section 4) on or prior to the Expiration Date. "Expiration Date" means 12:00
midnight, New York City time, on Tuesday, September 18, 2001, unless and until
Purchaser (subject to the terms and conditions of the Merger Agreement) shall
have extended the period during which the Offer is open, in which case the
Expiration Date shall mean the latest time and date at which the Offer, as may
be extended by Purchaser, shall expire.
The Offer is subject to the conditions set forth in Section 14, including
the satisfaction of the Minimum Condition. Subject to the applicable rules and
regulations of the Commission and subject to the terms and conditions of the
Merger Agreement, Purchaser expressly reserves the right to waive any such
condition in whole or in part, except for the Minimum Condition. Purchaser also
expressly reserves the right to increase the price per Share payable in the
Offer and to make any other changes in the terms and conditions of the Offer;
provided, however, that Purchaser may not decrease the price per Share payable
in the Offer, reduce the maximum number of Shares to be purchased in the Offer
or impose conditions to the Offer in addition to those set forth in Section 14.
The Merger Agreement provides that Purchaser may, without the consent of
NewsEdge, (i) extend the Offer beyond the initial scheduled Expiration Date,
which shall be 20 business days following the commencement of the Offer, or any
extended Expiration Date of the Offer, if, at the initial scheduled Expiration
Date of the Offer or any extended Expiration Date of the Offer, any of the
conditions to Purchaser's obligation to accept for payment Shares, shall not be
satisfied or waived; provided that Purchaser shall only be permitted three
extensions of the Offer pursuant to this clause (i) for periods of up to five
business days for each such extension, it being understood that if the
conditions to Purchaser's obligations to accept for payment shares are satisfied
or waived during an extension, no further extensions pursuant to this
clause (i) shall be permitted or (ii) extend the Offer for any period required
by any rule, regulation or interpretation of the Commission, or the staff
thereof, applicable to the Offer. During any such extension, all Shares
previously tendered and not withdrawn will remain
8
subject to the Offer and subject to the right of a tendering stockholder to
withdraw such stockholder's Shares. See Section 4. Under no circumstances will
interest be paid on the purchase price for tendered Shares, whether or not the
Offer is extended. Any extension of the Offer may be effected by Purchaser
giving oral or written notice of such extension to the Depositary.
Purchaser shall pay for all Shares validly tendered and not withdrawn
promptly following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to the applicable
rules of the Commission and the terms and conditions of the Offer, Purchaser
also expressly reserves the right to delay payment for Shares in order to comply
in whole or in part with applicable laws (any such delay shall be effected in
compliance with Rule 14e-1(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which requires Purchaser to pay the consideration
offered or to return Shares deposited by or on behalf of stockholders promptly
after the termination or withdrawal of the Offer).
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, such announcement in
the case of an extension to be made no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date. Subject
to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act,
which require that material changes be promptly disseminated to stockholders in
a manner reasonably designed to inform them of such changes) and without
limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser will have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a press
release to the Dow Jones News Service or the Public Relations Newswire.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by
Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. Subject to the terms
of the Merger Agreement, if, prior to the Expiration Date, Purchaser should
decide to increase the consideration being offered in the Offer, such increase
in the consideration being offered will be applicable to all stockholders whose
Shares are accepted for payment pursuant to the Offer and, if at the time notice
of any such increase in the consideration being offered is first published, sent
or given to holders of such Shares, the Offer is scheduled to expire at any time
earlier than the period ending on the tenth business day from and including the
date that such notice is first so published, sent or given, the Offer will be
extended at least until the expiration of such 10 business day period.
Subject to the applicable rules and regulations of the Commission, Purchaser
may, in its sole discretion, elect to provide for a subsequent offering period
of between three business days and 20 business days (the "Subsequent Offering
Period") as contemplated by Rule 14d-11 under the Exchange Act, following
acceptance for payment of Shares in the Offer. Purchaser may provide for a
Subsequent Offering Period if, among other things, upon the Expiration Date
(i) all of the conditions to Purchaser's obligations to accept for payment, and
to pay for, the Shares tendered in the Offer are satisfied or waived and
(ii) Purchaser immediately accepts for payment, and promptly pays for, all
Shares validly tendered (and not withdrawn in accordance with the procedures set
forth in Section 4) in the Offer prior to the Expiration Date. SHARES TENDERED
DURING THE SUBSEQUENT OFFERING PERIOD MAY NOT BE WITHDRAWN. See Section 4.
Purchaser will immediately accept for payment, and promptly pay for, all validly
tendered Shares as they are received during the Subsequent Offering Period. Any
election by Purchaser to include a Subsequent Offering Period may be effected by
Purchaser giving oral or written notice of the Subsequent Offering Period to the
Depositary. If Purchaser decides to include a Subsequent Offering Period, it
will make an announcement to that effect by issuing a press release to the Dow
Jones News Service or the Public Relations Newswire no later than 9:00 a.m., New
York City time, on the next business day after the Expiration Date.
9
For purposes of the Offer, a "business day" means any day on which the
principal offices of the Commission in Washington, D.C. are open to accept
filings, or, in the case of determining a date when any payment is due, any day
on which banks are not required or authorized to close in the City of New York,
and consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time.
NewsEdge has provided Purchaser with NewsEdge's stockholder list and
security position listings, including the most recent list of names, addresses
and security positions of non-objecting beneficial owners in the possession of
NewsEdge, for the purpose of disseminating the Offer to holders of Shares. This
Offer to Purchase and the related Letter of Transmittal will be mailed by
Purchaser to record holders of Shares whose names appear on NewsEdge's
stockholder list and will be furnished, for subsequent transmittal to beneficial
owners of Shares, to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment all Shares validly tendered (and
not properly withdrawn in accordance with Section 4) prior to the Expiration
Date promptly after the occurrence of the Expiration Date. Purchaser shall pay
for all Shares validly tendered and not withdrawn promptly following the
acceptance of Shares for payment pursuant to the Offer. Notwithstanding the
immediately preceding sentence and subject to applicable rules and regulations
of the Commission and the terms of the Merger Agreement, Purchaser expressly
reserves the right to delay payment for Shares in order to comply in whole or in
part with applicable laws. See Sections 1 and 15. If Purchaser decides to
include a Subsequent Offering Period, Purchaser will accept for payment, and
promptly pay for, all validly tendered Shares as they are received during the
Subsequent Offering Period. See Section 1.
In all cases (including during any Subsequent Offering Period), payment for
Shares tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) the stock certificates evidencing
such Shares (the "Share Certificates") or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 3, (ii) the Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed, with any required signature guarantees or an Agent's Message (as
defined below), in connection with the book-entry transfer and (iii) any other
documents required under the Letter of Transmittal. The term "Agent's Message"
means a message, transmitted by the Book-Entry Transfer Facility to, and
received by, the Depositary and forming a part of the Book-Entry Confirmation
which states that the Book-Entry Transfer Facility has received an express
acknowledgment from the participant in the Book-Entry Transfer Facility
tendering the Shares that are the subject of such Book-Entry Confirmation, that
such participant has received and agrees to be bound by the Letter of
Transmittal and that Purchaser may enforce such agreement against such
participant.
For the purposes of the Offer (including during any Subsequent Offering
Period), Purchaser will be deemed to have accepted for payment (and thereby
purchased) Shares validly tendered and not properly withdrawn as, if and when
Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance for payment of such Shares pursuant to the Offer. Upon the terms and
subject to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from Purchaser and transmitting such payments to
tendering stockholders whose Shares have been accepted for payment.
10
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares tendered by book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility pursuant to the procedure
set forth in Section 3, such Shares will be credited to an account maintained at
such Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of its affiliates, the right to purchase all or any
portion of the Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.
In order for a holder of Shares to validly tender Shares pursuant to the
Offer, the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees or, in the case of a book-entry transfer, an Agent's Message, and any
other documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and either (i) the Share Certificates evidencing tendered Shares must
be received by the Depositary at such address or such Shares must be tendered
pursuant to the procedure for book-entry transfer described below and a
Book-Entry Confirmation must be received by the Depositary (including an Agent's
Message if the tendering stockholder has not delivered a Letter of Transmittal),
in each case prior to the Expiration Date, or (ii) the tendering stockholder
must comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer within
two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, together with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedure described below.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
11
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Security Transfer Agent Medallion
Signature Program, or by any other "Eligible Guarantor Institution," as such
term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing
being referred to as an "Eligible Institution"), except in cases where Shares
are tendered (i) by a registered holder of Shares who has not completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution. If a Share Certificate is registered in the name of a
person other than the signer of the Letter of Transmittal, or if payment is to
be made, or a Share Certificate not accepted for payment or not tendered is to
be returned, to a person other than the registered holder(s), then the Share
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear on
the Share Certificate, with the signature(s) on such Share Certificate or stock
powers guaranteed by an Eligible Institution. See Instructions 1 and 5 of the
Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for delivery
by book-entry transfer on a timely basis, such Shares may nevertheless be
tendered, provided that all the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is received
prior to the Expiration Date by the Depositary as provided below; and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together with
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, with any required signature guarantees or, in
the case of a book-entry transfer, an Agent's Message, and any other
documents required by the Letter of Transmittal are received by the
Depositary within three Nasdaq National Market ("Nasdaq") trading days after
the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, mail or by
facsimile transmission to the Depositary and must include a guarantee by an
Eligible Institution in the form set forth in the form of Notice of Guaranteed
Delivery made available by Purchaser. The procedures for guaranteed delivery
specified above may not be used during any Subsequent Offering Period.
In all cases (including during any Subsequent Offering Period), payment for
Shares tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of the Share Certificates evidencing such
Shares, or a Book-Entry Confirmation of the delivery of such Shares, and the
Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, with any required signature guarantees or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal.
DETERMINATION OF VALIDITY. ALL QUESTIONS AS TO THE FORM OF DOCUMENTS AND
THE VALIDITY, FORM, ELIGIBILITY (INCLUDING TIME OF RECEIPT) AND ACCEPTANCE FOR
PAYMENT OF ANY TENDER OF SHARES WILL BE DETERMINED BY PURCHASER, IN ITS SOLE
DISCRETION, WHICH DETERMINATION SHALL BE FINAL AND BINDING ON ALL PARTIES.
Purchaser reserves the absolute right to reject any and all tenders determined
by it not to be in proper form or the acceptance for payment of which may, in
the opinion of its counsel, be unlawful. Purchaser also reserves the absolute
right to waive any condition of the Offer to the extent permitted by applicable
law and the Merger Agreement or any defect or irregularity in the tender of
12
any Shares of any particular stockholder, whether or not similar defects or
irregularities are waived in the case of other stockholders. NO TENDER OF SHARES
WILL BE DEEMED TO HAVE BEEN VALIDLY MADE UNTIL ALL DEFECTS AND IRREGULARITIES
HAVE BEEN CURED OR WAIVED. NONE OF PURCHASER, THOMSON OR ANY OF THEIR RESPECTIVE
AFFILIATES OR ASSIGNS, THE DEPOSITARY, THE INFORMATION AGENT OR ANY OTHER PERSON
WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN
TENDERS OR INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTIFICATION.
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
A tender of Shares pursuant to any of the procedures described above will
constitute the tendering stockholder's acceptance of the terms and conditions of
the Offer, as well as the tendering stockholder's representation and warranty to
Purchaser that (i) such stockholder has the full power and authority to tender,
sell, assign and transfer the tendered Shares (and any and all other Shares or
other securities issued or issuable in respect of such Shares), and (ii) when
the same are accepted for payment by Purchaser, Purchaser will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claims.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
APPOINTMENT AS PROXY. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Thomson as such
stockholder's agents, attorneys-in-fact and proxies, each with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by Purchaser (and with respect to any and
all other Shares or other securities issued or issuable in respect of such
Shares on or after August 21, 2001). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
Purchaser accepts such Shares for payment. Upon such acceptance for payment, all
prior powers of attorney and proxies given by such stockholder with respect to
such Shares (and such other Shares and securities) will be revoked, without
further action, and no subsequent powers of attorney or proxies may be given nor
any subsequent written consent executed by such stockholder (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of Thomson will, with respect to the Shares for which the appointment
is effective, be empowered to exercise all voting and other rights of such
stockholder as they in their sole discretion may deem proper at any annual or
special meeting of NewsEdge's stockholders or any adjournment or postponement
thereof, by written consent in lieu of any such meeting or otherwise. Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon Purchaser's payment for such Shares, Purchaser or
Thomson, as the case may be, must be able to exercise full voting rights with
respect to such Shares (and such other Shares and securities).
UNDER THE "BACKUP WITHHOLDING" PROVISIONS OF U.S. FEDERAL INCOME TAX LAW,
THE DEPOSITARY MAY BE REQUIRED TO WITHHOLD 30.5% OF ANY PAYMENTS OF CASH
PURSUANT TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH
RESPECT TO PAYMENT TO CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE
DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND
CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL.
SEE INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL.
13
4. WITHDRAWAL RIGHTS.
Tender of Shares made pursuant to the Offer are irrevocable except that such
Shares may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment by Purchaser pursuant to the Offer, may also be
withdrawn at any time after October 19, 2001. If Purchaser extends the Offer, is
delayed in its acceptance for payment of Shares or is unable to accept Shares
for payment pursuant to the Offer for any reason, then, without prejudice to
Purchaser's rights under the Offer, the Depositary may, nevertheless, on behalf
of Purchaser, retain tendered Shares, and such Shares may not be withdrawn
except to the extent that tendering stockholders are entitled to withdrawal
rights as described in this Section 4, subject to Rule 14e-1(c) under the
Exchange Act. Any such delay will be by an extension of the Offer to the extent
required by law. If Purchaser decides to include a Subsequent Offering Period,
Shares tendered during such Subsequent Offering Period may not be withdrawn. See
Section 1.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover page of this Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of such Shares, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates, the serial numbers shown on such Share
Certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer as set
forth in Section 3, any notice of withdrawal must specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF ANY
NOTICE OF WITHDRAWAL WILL BE DETERMINED BY PURCHASER, IN ITS SOLE DISCRETION,
WHOSE DETERMINATION WILL BE FINAL AND BINDING. NONE OF THOMSON, PURCHASER, OR
ANY OF THEIR RESPECTIVE AFFILIATES OR ASSIGNS, THE DEPOSITARY, THE INFORMATION
AGENT OR ANY OTHER PERSON WILL BE UNDER ANY DUTY TO GIVE ANY NOTIFICATION OF ANY
DEFECTS OR IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL OR INCUR ANY LIABILITY FOR
FAILURE TO GIVE ANY SUCH NOTIFICATION.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date (or during the Subsequent Offering Period, if any) by following
one of the procedures described in Section 3 (except Shares may not be
re-tendered using the procedures for guaranteed delivery during any Subsequent
Offering Period).
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal United States federal income tax
consequences of the Offer and the Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted into the right to receive
cash in the Merger (whether upon receipt of the Merger Consideration or pursuant
to the proper exercise of appraisal rights). The summary is based on the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable current and proposed United States Treasury Regulations issued
thereunder, judicial authority and administrative rulings and practice, all of
which are subject to change at any time, possibly with retroactive effect, and
therefore the following statements and conclusions could be altered or modified.
The discussion applies only to holders of Shares in whose hands Shares are
capital assets, and may not apply to Shares
14
received pursuant to the exercise of employee stock options or otherwise as
compensation, or to holders of Shares who are not citizens or residents of the
United States of America, or to holders of Shares who are in special tax
situations (such as insurance companies, tax-exempt organizations, financial
institutions, United States expatriates, or persons who hold Shares as part of a
hedging, "straddle," conversion or other integrated transaction). The following
summary assumes that (i) NewsEdge is not a "collapsible corporation" within the
meaning of Section 341(b)(1) of the Code, and (ii) the Shares do not constitute
"qualified small business stock" within the meaning of Section 1202(c) of the
Code.
THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION
PURPOSES ONLY AND IS BASED UPON CURRENT LAW. BECAUSE INDIVIDUAL CIRCUMSTANCES
MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH HOLDER'S OWN TAX ADVISOR
TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED HEREIN TO SUCH STOCKHOLDER
AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER, INCLUDING THE
APPLICATION AND EFFECT OF OTHER FEDERAL, STATE, LOCAL AND OTHER TAX LAWS.
The receipt of the offer price and the receipt of cash pursuant to the
Merger (whether as Merger Consideration or pursuant to the proper exercise of
appraisal rights) will be a taxable transaction for United States federal income
tax purposes (and also may be a taxable transaction under applicable state,
local, foreign and other income tax laws). In general, for United States federal
income tax purposes, a holder of Shares will recognize gain or loss equal to the
difference between such holder's adjusted tax basis in the Shares sold pursuant
to the Offer or converted to cash in the Merger and the amount of cash received
therefor. Gain or loss must be determined separately for each block of Shares
(i.e., Shares acquired at the same cost in a single transaction) sold pursuant
to the Offer or converted to cash in the Merger. Such gain or loss will be
capital gain or loss. Individual holders generally will be subject to tax on the
net amount of such gain at a maximum rate of 20% provided such holder's holding
period for the Shares exceeds one year. If the holding period for the Shares is
one year or less, capital gains realized by an individual will be treated as
short-term capital gains and will be subject to tax at ordinary income tax
rates. The deduction of capital losses is subject to certain limitations.
Stockholders should consult their own tax advisors in this regard.
Payments in connection with the Offer or the Merger may be subject to backup
withholding at a 30.5% rate. Backup withholding generally applies if a
stockholder (i) fails to furnish such stockholder's social security number or
taxpayer identification number ("TIN"), (ii) furnishes an incorrect TIN,
(iii) fails properly to report interest or dividends or (iv) under certain
circumstances, fails to provide a certified statement, signed under penalties of
perjury, that the TIN provided is such stockholder's correct number and that
such stockholder is not subject to backup withholding. Backup withholding is not
an additional tax but merely an advance payment, which may be refunded to the
extent it results in an overpayment of tax. Certain persons generally are exempt
from backup withholding, including corporations, financial institutions and
certain foreign stockholders if such foreign stockholders submit a statement,
signed under penalties of perjury, attesting to their exempt status. Certain
penalties apply for failure to furnish correct information and for failure to
include the reportable payments in income. Each stockholder should consult with
such stockholder's own tax advisor as to such stockholder's qualifications for
exemption from backup withholding and the procedure for obtaining such
exemption.
6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are quoted and principally traded on Nasdaq. The following table
sets forth, for the quarters indicated, the high and low sales prices per Share
on Nasdaq as reported by the Dow Jones News Service according to published
financial sources. NewsEdge did not pay or declare any dividends in the fiscal
quarters indicated.
15
SHARES MARKET DATA
HIGH LOW
-------- --------
1999:
First Quarter............................................. $14.250 $ 8.000
Second Quarter............................................ 11.375 6.625
Third Quarter............................................. 9.500 6.500
Fourth Quarter............................................ 12.875 8.313
2000:
First Quarter............................................. $12.250 $ 4.000
Second Quarter............................................ 4.375 1.375
Third Quarter............................................. 2.750 1.875
Fourth Quarter............................................ 2.250 0.625
2001:
First Quarter............................................. $ 2.875 $ 0.844
Second Quarter............................................ 1.500 0.800
Third Quarter (through August 17, 2001)................... 2.290 0.910
On August 6, 2001, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of Purchaser's intention to commence
the Offer, the closing price per Share as reported on Nasdaq was $1.20. On
August 17, 2001, the closing price per Share as reported on Nasdaq was $2.27. As
of August 17, 2001, the approximate number of holders of record of the Shares
was 167.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING NEWSEDGE.
Except as otherwise set forth in this Offer to Purchase, all of the
information concerning NewsEdge contained in this Offer to Purchase, including
financial projections, has been furnished by NewsEdge or has been taken from or
based upon publicly available documents and records on file with the Commission
and other public sources. Neither Purchaser nor Thomson assumes any
responsibility for the accuracy or completeness of the information concerning
NewsEdge furnished by NewsEdge or contained in such documents and records or for
any failure by NewsEdge to disclose events which may have occurred or may affect
the significance or accuracy of any such information but which are unknown to
Purchaser or Thomson.
GENERAL. NewsEdge is a Delaware corporation with its principal executive
offices located at 80 Blanchard Road, Burlington, MA 01803, and its telephone
number is (781) 229-3000. NewsEdge was formed as Desktop Data, Inc. in 1988 in
the State of Delaware. After acquiring Investment Software Systems Inc. from ADP
Financial Services, Inc. in January, 1998 and upon the closing of the February,
1998 merger with Individual, Inc., it changed its name to NewsEdge Corporation.
On August 11, 1995, NewsEdge (then Desktop Data, Inc.) made its initial public
offering of common stock, which trades on Nasdaq under the symbol "NEWZ".
NewsEdge is a global provider of syndicated content services and electronic
publishing technologies for business. Its customers include businesses with an
interest in providing current information to its employees, content creators,
such as information publishers, and the operators of active websites. NewsEdge
offers technology and services for customers to create, manage and deploy
content for millions of end users through intranets, websites, portals,
extranets and distribution channels. Through its NewsEdge Refinery, which
combines its patented technology and human editorial review to deliver highly
targeted news on more than 2,000 business topics from more than 2,000 sources,
NewsEdge serves thousands of sites and companies with highly targeted content
16
solutions, including industry-specific topics, wireless services, turnkey
permission marketing and publishing tools, outsourced editorial capabilities and
sub-second live news feeds and applications.
CERTAIN SELECTED PROJECTED FINANCIAL DATA OF NEWSEDGE. Prior to entering
into the Merger Agreement, Thomson conducted a due diligence review of NewsEdge
and in connection with such review received certain projections of NewsEdge's
future operating performance (the "Projections"). NewsEdge does not, in the
ordinary course, publicly disclose projections and these Projections were not
prepared with a view to public disclosure.
NewsEdge has advised Thomson and Purchaser that these Projections were
prepared by NewsEdge's management based on numerous assumptions including, among
others, projections of revenues, operating income, benefits and other expenses,
depreciation and amortization, capital expenditure and working capital
requirements. No assurances can be given with respect to any such assumptions.
These Projections do not give effect to the Offer or the potential combined
operations of Thomson and NewsEdge or any alterations Thomson may make to
NewsEdge's operations or strategy after the consummation of the Offer. The
information set forth below was provided to Thomson and Purchaser in connection
with their evaluation of the proposed transaction with NewsEdge and is presented
for the limited purpose of giving the stockholders access to the material
financial projections prepared by NewsEdge's management that were provided to
Thomson and Purchaser in connection with the Merger Agreement and the Offer.
NEWSEDGE CORPORATION SELECTED PROJECTED FINANCIAL PERFORMANCE
DESCRIPTION FY 2001* FY 2002*
- ----------- -------- --------
Total Revenue............................................... $64,323 $63,648
Total Costs and Expenses.................................... $65,556 $60,888
Operating Income............................................ $(1,233) $ 2,760
Net Income after Taxes...................................... $ 507 $ 3,689
Balance Sheet Data:
Cash and Cash Equivalents................................... $13,062 $14,388
Working Capital............................................. $(5,696) $ (713)
Total Assets................................................ $42,472 $41,994
Total Stockholders' Equity.................................. $ 3,346 $ 7,097
- ------------------------
* All amounts in thousands of US$.
CERTAIN MATTERS DISCUSSED HEREIN, INCLUDING, BUT NOT LIMITED TO THESE
PROJECTIONS, ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. FORWARD-LOOKING STATEMENTS INCLUDE THE INFORMATION SET FORTH
ABOVE UNDER "CERTAIN PROJECTED FINANCIAL DATA OF NEWSEDGE". WHILE PRESENTED WITH
NUMERICAL SPECIFICITY, THESE PROJECTIONS WERE NOT PREPARED BY NEWSEDGE IN THE
ORDINARY COURSE AND ARE BASED UPON A VARIETY OF ESTIMATES AND HYPOTHETICAL
ASSUMPTIONS WHICH MAY NOT BE ACCURATE, MAY NOT BE REALIZED, AND ARE ALSO
INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT, AND MOST
OF WHICH ARE BEYOND THE CONTROL OF NEWSEDGE. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT ANY OF THE PROJECTIONS WILL BE REALIZED AND THE ACTUAL RESULTS
FOR THE YEARS ENDING DECEMBER 31, 2001 AND DECEMBER 31, 2002 MAY VARY MATERIALLY
FROM THOSE SHOWN ABOVE.
17
In addition, these Projections were not prepared in accordance with
generally accepted accounting principles, and neither NewsEdge's nor Thomson's
independent accountants has examined or compiled any of these Projections or
expressed any conclusion or provided any other form of assurance with respect to
these Projections and accordingly assume no responsibility for these
Projections. These Projections were prepared with a limited degree of precision,
and were not prepared with a view to public disclosure or compliance with the
published guidelines of the Commission or the guidelines established by the
American Institute of Certified Public Accountants regarding projections, which
would require a more complete presentation of data than as shown above.
THE INCLUSION OF THESE PROJECTIONS HEREIN SHOULD NOT BE REGARDED AS A
REPRESENTATION BY THOMSON, PURCHASER OR NEWSEDGE OR ANY OTHER PERSON THAT THE
PROJECTED RESULTS WILL BE ACHIEVED OR ARE A RELIABLE PREDICTION OF FUTURE
EVENTS, AND NONE OF THE PROJECTIONS SHOULD BE RELIED UPON AS SUCH. THESE
PROJECTIONS SHOULD BE READ IN CONJUNCTION WITH THE HISTORICAL FINANCIAL
INFORMATION OF NEWSEDGE. NONE OF THOMSON, PURCHASER, OR NEWSEDGE OR ANY OTHER
PERSON ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OR VALIDITY OF THE FOREGOING
PROJECTIONS AND NONE OF THEM INTENDS TO UPDATE OR OTHERWISE REVISE ANY OF THE
PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO
REFLECT THE OCCURRENCE OF FUTURE EVENTS IF ANY OR ALL OF THE ASSUMPTIONS
UNDERLYING ANY OF THE PROJECTIONS ARE SHOWN TO BE IN ERROR. FORWARD-LOOKING
STATEMENTS ALSO INCLUDE THOSE PRECEDED BY, FOLLOWED BY OR THAT INCLUDE THE WORDS
"BELIEVES", "EXPECTS", "ANTICIPATES" OR SIMILAR EXPRESSIONS.
AVAILABLE INFORMATION. NewsEdge is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
Information as of particular dates concerning NewsEdge's directors and officers,
their remuneration, stock options granted to them, the principal holders of
NewsEdge's securities and any material interest of such persons in transactions
with NewsEdge is required to be disclosed in proxy statements distributed to
NewsEdge's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the Commission's regional offices located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and the Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of
such materials may also be obtained by mail, upon payment of the Commission's
customary fees, by writing to its principal office at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 or free at the Commission's website at
www.sec.gov. The phone number of the Commission is (202) 942-8088.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND THOMSON.
Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. The principal offices of
Purchaser are located at Metro Center, One Station Place, Stamford, Connecticut,
06902, and its telephone number is (203) 969-8700. Purchaser is an indirect
wholly owned subsidiary of Thomson.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer
18
and the Merger. Because Purchaser is newly formed and has minimal assets and
capitalization, no meaningful financial information regarding Purchaser is
available.
Thomson is a corporation organized under the laws of Ontario, Canada. Its
principal offices are located at Suite 2706, Toronto Dominion Bank Tower, 66
Wellington Street West, Toronto Dominion Centre, Toronto, Ontario, M5K 1A1,
Canada and its telephone number is (416) 360-8700. Thomson (www.thomson.com) is
a leading global e-information and solutions company in the business and
professional marketplace. Thomson is comprised of four global market groups. The
Legal & Regulatory group is a leading provider of information and software-based
solutions for legal, tax, accounting, intellectual property, compliance and
business professionals. The Financial group provides information and integrated
work solutions to the worldwide financial community. The Learning group is among
the world's leading providers of learning products, services and solutions for
individuals, learning institutions and businesses. The Scientific & Healthcare
group provides high-value information and services to researchers and other
professionals in the academic, scientific, government and healthcare
marketplaces. Thomson's common shares are listed on the Toronto and London Stock
Exchanges.
The name, citizenship, business address, business telephone number,
principal occupation or employment, and five-year employment history for each of
the directors and executive officers of Thomson and Purchaser and certain other
information are set forth in Schedules I and II hereto, respectively. Except as
described in this Offer to Purchase and in Schedules I and II hereto, none of
Thomson, Purchaser or, to the best knowledge of such corporations, any of the
persons listed on Schedules I and II to the Offer of Purchase has during the
last five years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to any judicial or
administrative proceeding (except for matters that were dismissed without
sanction or settlement) that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
such laws.
9. FINANCING OF THE OFFER AND THE MERGER.
The total amount of funds required by Purchaser to consummate the Offer and
the Merger and to pay related fees and expenses is estimated to be approximately
$45.8 million. Purchaser will obtain all of such funds from Thomson or its
affiliates. Thomson and its affiliates will provide such funds from existing
resources.
10. BACKGROUND OF THE OFFER; CONTACTS WITH NEWSEDGE; THE MERGER AGREEMENT AND
RELATED AGREEMENTS; INTERESTS OF CERTAIN PERSONS IN THE MERGER.
BACKGROUND OF THE OFFER
During the March 29, 2001 meeting of the Board, the directors and certain
members of senior management analyzed a number of industry trends and
conditions, as well as issues specific to NewsEdge. Following this discussion
and after weighing NewsEdge's strategic alternatives, the Board discussed the
advisability of hiring an investment banking firm to assist in assessing
NewsEdge's strategic options. Clifford M. Pollan, Chief Executive Officer,
President and a member of the Board, and Ronald Benanto, Vice
President--Finance, Chief Financial Officer and Treasurer, reported on
conversations with certain investment bankers that they had conducted to date.
The directors discussed the advisability of establishing a committee to
interview and engage an investment banking firm. The Board unanimously resolved
to appoint Mr. Cowan, Mr. Devereaux and Mr. Kolowich, all members of the Board,
to a committee to assist management in identifying, interviewing, and engaging
an investment banking firm to assist NewsEdge in evaluating strategic
alternatives, and to monitor and supervise this process (the "Special
Committee").
19
On April 3, 2001, the Special Committee conducted interviews with two
potential investment banking firms each of which made extensive presentations to
the Special Committee. At the conclusion of the meeting the Special Committee
advised Mr. Pollan to proceed with an engagement of Broadview.
On April 6, 2001, NewsEdge engaged Broadview to act as its financial advisor
in connection with NewsEdge's intent to consider acquisition offers and, if
requested by NewsEdge, to render the Board an opinion with respect to the
fairness to the holders of Shares, from a financial point of view, of the
consideration to be received in any acquisition of NewsEdge. Thereafter,
Broadview produced an Offering Memorandum for NewsEdge to be distributed to
potential acquirers.
On April 20, 2001, Broadview and NewsEdge held an initial meeting with a
potential acquirer ("Party A") regarding a possible acquisition of NewsEdge.
Discussion centered around the strategic fit that NewsEdge offered the potential
acquirer and the synergies to be realized upon combining the companies. The
parties resolved to further consider a possible acquisition and to meet again in
the near future.
During the April 26, 2001 meeting of the Board, Mr. Pollan reported that the
Special Committee had authorized NewsEdge management to retain Broadview as
NewsEdge's financial advisor and that thereafter NewsEdge entered into an
engagement agreement with Broadview. At the meeting, Steve O'Leary and
Rodd Langenhagen, both representatives of Broadview, outlined their plan for
investigating several strategic alternatives for NewsEdge and the directors
discussed each of these alternatives in turn. Mr. O'Leary and Mr. Langenhagen
discussed the status of discussions to date, including those with Party A, and
sought input from the Board regarding potential acquirers and necessary follow
up.
On May 11, 2001, Broadview submitted a status report to the Board detailing
their discussions to date with potential acquirers. Broadview reported that it
had presented overviews of NewsEdge's business to nine potential acquirers,
including three separate entities affiliated with Thomson.
On May 16, 2001, NewsEdge entered into a Confidentiality Agreement with the
West Group, an affiliate of Thomson, relating to the exchange of information
between the two parties in light of a potential acquisition of NewsEdge by West
Group or another affiliate of Thomson. Thereafter due diligence materials
regarding NewsEdge were provided to Thomson.
On May 25, 2001, Broadview submitted a second status report to the Board
detailing their continuing discussions with potential acquirers. During the
May 25, 2001 meeting of the Board, Mr. Langenhagen reported that a second
meeting with Party A was held on May 22, 2001 and that a third meeting with
Party A was scheduled for May 30, 2001. Mr. Langenhagen also reported on
discussions between Broadview and David Hanssens of Thomson Legal and
Regulatory, an affiliate of Thomson, and noted that Mr. Hanssens believed there
was a strong potential strategic fit between the two companies and that Thomson
was analyzing the financial impact of a potential transaction. Mr. Langenhagen
also reported on several preliminary conversations with other potential
acquirers as well as several preliminary conversations with parties which did
not result in an expression of interest in consummating a transaction.
On June 4, 2001, Broadview, Mr. Pollan and Mr. Benanto held meetings with
Thomson regarding a potential transaction. Thomson expressed an interest in a
potential transaction and noted Thomson's belief that NewsEdge could provide
Thomson with a complimentary suite of goods and services that could further
Thomson's long-term strategy.
On June 11, 2001, Broadview reported receiving an offer from Party A.
Party A's initial offer was a stock-for-stock transaction which valued NewsEdge
at approximately $25 million. On June 14, 2001, Broadview received a revised
offer from Party A which increased the valuation of NewsEdge to $33 million in a
stock-for-stock transaction.
20
During a meeting of the Board on June 18, 2001, Mr. Langenhagen submitted a
third status report to the Board and reported on discussions with several
potential acquirers. Mr. Langenhagen reported that Broadview received a
non-binding letter of interest from Thomson on June 18, 2001 relating to a cash
transaction which valued NewsEdge at no less than $1.60 per share.
Mr. Langenhagen also reported that Broadview and representatives of NewsEdge
held meetings with two other potential acquirers on June 15, 2001 and scheduled
a second meeting with one of the parties for the week of June 18, 2001 to
further discuss a potential transaction. Additionally, Mr. Langenhagen reported
on preliminary discussions held with several other potential acquirers since
Broadview's last status report on May 25, 2001.
On June 21, 2001, Broadview held a follow-up due diligence meeting with one
of the potential acquirers who had met with NewsEdge on June 15, 2001
("Party B"). On June 26, 2001, Broadview received a preliminary letter of intent
from Party B relating to a part cash, part stock transaction which valued
NewsEdge at between $2.25 and $3.00 per share. The letter also indicated that
Party B would require significant additional management time to further
understand NewsEdge's business and that it would require a 45-day exclusivity
period.
On June 27 and June 28, 2001, Mr. Pollan, other executive officers of
NewsEdge, and representatives of Broadview met with Mr. Hanssens and other
individuals from Thomson to conduct additional due diligence and discuss
possible terms of an acquisition of NewsEdge by Thomson or one of its affiliated
entities.
During the June 28, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquisition partners. The directors reviewed the status of these
discussions and potential offers. In particular, Mr. Pollan reported that
Party B communicated an interest in continuing negotiations with NewsEdge and
had submitted an incomplete preliminary indication of interest which remained
subject to substantial additional due diligence and other conditions.
Mr. Pollan also reported on the status of discussions with other potential
acquirers. After discussion, the directors instructed management to continue
discussions with each of the various interested parties. In particular, the
directors instructed management to respond to indications of interest previously
received with counterproposals seeking to elicit a higher valuation for NewsEdge
and to respond to any preliminary indications of interest by communicating again
the need to accelerate the timeframe during which to consider a potential
transaction with NewsEdge and to submit firm indications of interest.
During the last week of June, Party A sent representatives to meet with the
Board and NewsEdge's executive management team to delineate their plans for an
acquisition of NewsEdge and post-acquisition operations of NewsEdge. The party's
representatives indicated at this time that their acquisition strategy
necessitated that any potential transaction be a stock-for-stock deal.
On July 1, 2001, Mr. Pollan communicated with the Board via e-mail that
negotiations with Party A centered around the valuation of NewsEdge. Mr. Pollan
also informed the Board that he and other members of NewsEdge's executive team
met with Mr. Hanssens and eight other Thomson representatives on June 27 and
June 28, 2001. He reported that conversations with Thomson were progressing in a
positive manner and that NewsEdge expected firm offers from Thomson and Party A
by July 6, 2001.
During the July 3, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquirers and the status of the letters of intent received to date.
The directors then reviewed the status of these discussions and potential offers
and directed management to continue discussions with a particular focus on
Thomson and Party A.
On July 5, 2001, Mr. Pollan communicated with the Board via e-mail that his
recent conversations with Thomson were progressing positively and that NewsEdge
would be evaluating offers over the course of the next week. Mr. Pollan also
discussed issues surrounding the proposed timing of the
21
initiation and closing of Thomson's proposed acquisition. Mr. Pollan reported
that NewsEdge had received a revised letter of intent from Party B which valued
NewsEdge between $2.25 and $2.50 per share to be paid half in cash and half in
stock. Party B indicated that its offer was subject to a further due diligence
review of NewsEdge's business operations which it expected to be able to
complete by mid- to late-August.
During the July 6, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquisition partners. The directors reviewed the status of these
discussions and potential offers. In particular, Mr. Pollan reported that
Party B had conveyed to NewsEdge, through Broadview, that its strategic
imperative in any acquisition would be to combine the two companies and thereby
eliminate duplicative positions. As a result of these requirements, the party
would need to hold discussions with certain members of the management team not
yet privy to NewsEdge's acquisition proceedings as part of its due diligence
review. The party also indicated that any offer would be a combination of cash
and stock and that it would require at least a month to complete its due
diligence review of NewsEdge. At this time, Mr. Pollan also reported that
Party A recently indicated that it might raise its potential valuation for
NewsEdge provided that no other major issues were outstanding. Mr. Pollan also
reported that discussions with Thomson were ongoing. The directors discussed
other terms and conditions of a potential business combination transaction. The
directors directed Mr. Pollan and Mr. Langenhagen to continue discussions with
each of the various interested parties.
On July 9, 2001, NewsEdge received a verbal offer from Thomson, proposing to
acquire NewsEdge pursuant to a cash tender offer which valued NewsEdge at
$31 million plus cash on the balance sheet of NewsEdge at the time of the
consummation of the transaction, which as of July 9, 2001 was estimated to be
$14 million. Also on July 9, 2001 Party A increased its offer to a final offer
of $38 million which was to be paid exclusively in the common stock of Party A.
During the July 10, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquisition partners, including the verbal offer received on July 9,
2001 from Thomson. The directors reviewed the status of these discussions and
each potential offer. In particular, Mr. Pollan reported that Thomson had
indicated that, subject to the completion of final due diligence and certain
other conditions, it would be interested in acquiring NewsEdge at a valuation of
$31 million plus the amount of cash on NewsEdge's balance sheet, which as of
July 9, 2001 was estimated to be $14 million. The directors compared this
proposal, its terms and conditions, and its potential benefits and associated
risks with the potential offers from Party A and Party B. Management reported
that Party B had requested additional time for due diligence and would be
unlikely to come back with a firm offer prior to the time that NewsEdge would
likely need to make a firm commitment to either Thomson or Party A. Management
also reported concerns about Party B's post-acquisition cash balance and less
favorable strategic positioning relative to other combinations post-merger.
After discussion, based on the amount and quality of consideration offered, the
directors instructed management to continue to negotiate with Thomson with a
view towards entering into a definitive agreement at the valuation discussed.
During the week of July 16, 2001, Thomson representatives and Thomson's
legal counsel performed an extensive due diligence review of NewsEdge in
Burlington, Massachusetts. Representatives of Thomson's legal, financial and
human resource teams met throughout the week with the executive officers and
certain other senior employees of NewsEdge to discuss various issues relating to
Thomson's proposed acquisition of NewsEdge.
On July 23, 2001, Mr. Pollan communicated with the Board via e-mail on the
status of Thomson's due diligence review and that Thomson was meeting internally
on July 23, 2001 to discuss the results of the due diligence review.
Additionally, he reported that he and Mr. Langenhagen had discussions with
Mr. Hanssens on Friday, July 20, 2001 regarding valuation and closing costs
issues. Mr. Pollan indicated
22
that he expected to receive a draft Merger Agreement from Thomson later that
same day or the next day.
On July 25, 2001, Mr. Pollan led a conference call discussion with
Mr. Benanto, Mr. Hanssens and other representatives of Thomson on open issues
related to the merger negotiations. On July 26, 2001, NewsEdge received an
initial draft of the Merger Agreement from Thomson's legal counsel.
Thereafter, representatives of NewsEdge and Thomson negotiated the terms of
a definitive merger agreement and Thomson's proposed tender offer and discussed
any unresolved issues between the parties. These discussions focused primarily
on the conditions to Thomson's obligation to initiate and consummate its tender
offer and second-step merger and the timing of the initiation and closing of
Thomson's tender offer. The discussions also focused on the circumstances under
which the Board would be able to consider and respond to competing acquisition
proposals and the size of the fee NewsEdge would have to pay Thomson if the
Board decided to terminate the transaction in order to modify or withdraw its
recommendation on the basis of a superior offer. During this time Mr. Pollan
continued to discuss the terms and conditions of the proposed transaction with
individual Board members via telephone calls and e-mails.
On July 31, 2001, Mr. Pollan, Mr. Benanto, Mr. Langenhagen, Mr. Hanssens and
other representatives of Thomson agreed on final pricing of the transaction at
approximately $43 million, after adjustments for transaction costs and working
capital.
On August 3, 2001, Mr. Pollan communicated with the Board via e-mail that
negotiations with Thomson had progressed positively and that the two parties
were very close to agreeing on all terms and conditions of Thomson's proposed
tender offer and merger. Additionally, he reported that he expected that the
Board would be asked to approve a definitive agreement and review Broadview's
fairness opinion at a Board meeting on Monday, August 6. Thereafter, Thomson and
NewsEdge discussed and negotiated the open provisions of the Merger Agreement.
The parties also discussed and negotiated the Amended Employment Agreements and
the Stockholders Agreement.
On the evening of August 3, 2001, Thomson's legal counsel delivered a
substantially final draft of the Merger Agreement which was distributed to the
Board for their consideration.
At a meeting held on August 6, 2001, the Board reviewed the status of the
negotiations with Thomson and the terms of the definitive merger agreement. The
Board also discussed competing offers and NewsEdge's prospects should it choose
to remain independent. After reviewing the terms of the definitive merger
agreement with Thomson and considering Broadview's Fairness Opinion and
underlying data, the Board unanimously determined that the terms of the Offer
and Merger with Thomson were fair to, and in the best interests of, the
stockholders of NewsEdge, and unanimously resolved to recommend that the
stockholders accept the Offer and tender their Shares pursuant to the Offer and
approve and adopt the Merger Agreement.
On August 6, 2001, the parties executed the Merger Agreement, the
Stockholders Agreement and the Amended Employment Agreements. Thereafter,
Thomson and NewsEdge issued a joint press release announcing the execution of
the Merger Agreement.
23
CONTACTS WITH NEWSEDGE
Neither Thomson nor Purchaser owns any Shares as of the date hereof. Except
as described in this Offer to Purchase, (i) none of Purchaser, Thomson nor, to
the best knowledge of Purchaser and Thomson, any of the persons listed in
Schedules I and II to this Offer to Purchase or any associate or majority owned
subsidiary of Purchaser, Thomson or any of the persons so listed, beneficially
owns or has any right to acquire any Shares and (ii) none of Purchaser, Thomson
nor, to the best knowledge of Purchaser and Thomson, any of the persons or
entities referred to above nor any director, executive officer or subsidiary of
any of the foregoing has effected any transaction in the Shares during the past
60 days.
Except as provided in the Merger Agreement and the Stockholders Agreement
and as otherwise described in this Offer to Purchase, none of Purchaser, Thomson
nor, to the best knowledge of Purchaser and Thomson, any of the persons listed
in Schedules I and II to this Offer to Purchase, has any agreement, arrangement,
understanding, whether or not legally enforceable, with any other person with
respect to any securities of NewsEdge, including, but not limited to, the
transfer or voting of such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations.
Except as set forth in this Offer to Purchase, since July 1, 1999, neither
Purchaser nor Thomson nor, to the best knowledge of Purchaser and Thomson, any
of the persons listed on Schedules I and II hereto, has had any transactions
with NewsEdge or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the Commission
applicable to the Offer. Except as set forth in this Offer to Purchase, since
July 1, 1999, there have been no negotiations, transactions or material contacts
between any of Purchaser, Thomson, or any of their respective subsidiaries or,
to the best knowledge of Purchaser and Thomson, any of the persons listed in
Schedules I and II to this Offer to Purchase, on the one hand, and NewsEdge or
its affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer for or other acquisition of any class of NewsEdge's
securities, an election of NewsEdge's directors or a sale or other transfer of a
material amount of assets of NewsEdge.
NewsEdge has entered into information provider license agreements in the
ordinary course of its business with certain affiliates of Thomson (the "Thomson
Affiliates"). In NewsEdge's most recent fiscal year, these agreements resulted
in aggregate revenues to NewsEdge from its customers of approximately $2,817,600
and royalty payments from NewsEdge to the Thomson Affiliates in an aggregate
amount of approximately $1,693,700.
THE MERGER AGREEMENT AND RELATED AGREEMENTS
THE MERGER AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE MERGER AGREEMENT.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT,
WHICH IS INCORPORATED HEREIN BY REFERENCE, AND A COPY OF WHICH HAS BEEN FILED AS
AN EXHIBIT TO THE TENDER OFFER STATEMENT ON SCHEDULE TO (THE "SCHEDULE TO")
FILED BY PURCHASER AND THOMSON WITH THE COMMISSION IN CONNECTION WITH THE OFFER.
THE MERGER AGREEMENT MAY BE EXAMINED AND COPIES MAY BE OBTAINED AT THE PLACES
SET FORTH IN SECTION 7 UNDER THE CAPTION "AVAILABLE INFORMATION" OR DOWNLOADED
FOR FREE FROM THE COMMISSION'S WEBSITE AT WWW.SEC.GOV. DEFINED TERMS USED HEREIN
AND NOT DEFINED HEREIN SHALL HAVE THE RESPECTIVE MEANINGS ASSIGNED TO THOSE
TERMS IN THE MERGER AGREEMENT.
THE OFFER. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable but in no event later than 10 business
days after the initial public announcement of the execution of the Merger
Agreement on August 7, 2001. The obligation of Purchaser to
24
commence the Offer is subject to (i) the Merger Agreement not having been
terminated in accordance with its terms and (ii) the Board, or any committee
thereof, not having withheld, withdrawn, amended, changed or modified the
approval or recommendation of the Offer, or the Merger Agreement or approved or
recommended any Acquisition Proposal or any other acquisition of Shares other
than the Offer, or the Merger, or the Board, or any committee thereof, not
having resolved to do any of the foregoing (a "Change in NewsEdge Board
Approval"). The obligation of Purchaser to accept for payment Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Condition
and certain other conditions that are described in Section 14 hereof. Purchaser
and Thomson have agreed that no amendment or change in the Offer may be made
which decreases the price per Share payable in the Offer, which reduces the
maximum number of Shares to be purchased in the Offer or which imposes
conditions to the Offer in addition to those set forth in Section 14.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, at the Effective
Time, Purchaser shall be merged with and into NewsEdge. As a result of the
Merger, the separate corporate existence of Purchaser will cease and NewsEdge
will continue as the Surviving Corporation and will become an indirect wholly
owned subsidiary of Thomson. Upon consummation of the Merger, each issued and
then outstanding Share (other than any Shares held in the treasury of NewsEdge
and any Shares which are held by stockholders who have not voted in favor of the
Merger or consented thereto in writing and who shall have demanded properly in
writing appraisal for such Shares in accordance with Delaware Law) shall be
canceled and converted automatically into the right to receive the Merger
Consideration.
Pursuant to the Merger Agreement, each share of common stock, par value
$0.01 per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of Purchaser immediately prior to the
Effective Time (which shall include the Officers of NewsEdge immediately prior
to the Effective Time) will be the initial officers of the Surviving
Corporation. Subject to the Merger Agreement, at the Effective Time, the
certificate of incorporation of Purchaser, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation; provided, however, that, at the Effective Time, Article I of the
certificate of incorporation of the Surviving Corporation will be amended to
read as follows: "The name of the corporation is NewsEdge Corporation." Subject
to the Merger Agreement, the By-laws of Purchaser, as in effect immediately
prior to the Effective Time, will be the By-laws of the Surviving Corporation.
STOCKHOLDERS' MEETING. Pursuant to the Merger Agreement, NewsEdge shall, if
required by applicable law in order to consummate the Merger, (i) duly call,
give notice of, convene and hold an annual or special meeting of its
stockholders (the "Stockholders' Meeting") as promptly as practicable following
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger (collectively, the "Transactions"), and (ii) (A) subject to
the exceptions provided for in the Merger Agreement, include in the Proxy
Statement, and not subsequently withhold, withdraw, amend, change or modify in
any manner adverse to Purchaser or Thomson, the unanimous recommendation of the
Board that the stockholders of NewsEdge approve and adopt the Merger Agreement
and the Transactions and (B) use its best efforts to obtain such approval and
adoption. If Purchaser acquires at least a majority of the outstanding Shares on
an a fully diluted basis (excluding options and warrants held by the Selling
Stockholders), Purchaser will have sufficient voting power to approve the
Merger, even if no other stockholder votes in favor of the Merger.
PROXY STATEMENT. The Merger Agreement provides that NewsEdge shall, if
approval of NewsEdge's stockholders is required by applicable law to consummate
the Merger, promptly following consummation of the Offer, file with the
Commission under the Exchange Act, and use its best efforts
25
to have cleared by the Commission promptly after such filing, a proxy statement
and related proxy materials (the "Proxy Statement") with respect to the
Stockholders' Meeting and shall cause the Proxy Statement and all required
amendments and supplements thereto to be mailed to the holders of Shares at the
earliest practicable time. Subject to the exceptions provided in the Merger
Agreement, NewsEdge has agreed to include in the Proxy Statement, and not
subsequently withhold, withdraw, amend, change or modify in any manner adverse
to Purchaser or Thomson, the recommendation of the Board that the stockholders
of NewsEdge approve and adopt the Merger Agreement and the Transactions and to
use its best efforts to obtain such approval and adoption. Thomson and Purchaser
have agreed to cause all Shares then owned by them and their subsidiaries to be
voted in favor of approval and adoption of the Merger Agreement and the
Transactions. The Merger Agreement provides that, in the event that Purchaser
shall acquire at least 90% of the then outstanding Shares, Thomson, Purchaser
and NewsEdge will take all necessary and appropriate action to cause the Merger
to become effective, in accordance with Delaware Law, as promptly as reasonably
practicable after such acquisition, without a meeting of NewsEdge's
stockholders.
CONDUCT OF BUSINESS BY NEWSEDGE PENDING THE MERGER. Pursuant to the Merger
Agreement, NewsEdge has agreed that, between the date of the Merger Agreement
and the earlier of the termination of the Merger Agreement pursuant to its terms
or the Effective Time, except as contemplated in the Merger Agreement and unless
Thomson shall otherwise agree in writing, the businesses of NewsEdge and its
subsidiaries shall be conducted only in, and NewsEdge and its subsidiaries shall
not take any action except in, the ordinary course of business and in a manner
consistent with past practice; and NewsEdge shall use its reasonable best
efforts to preserve substantially intact the business organization of NewsEdge
and its subsidiaries, to keep available the services of the current officers,
employees and consultants of NewsEdge and the subsidiaries and to preserve the
current relationships of NewsEdge and the subsidiaries with customers, suppliers
and other persons with which NewsEdge or any subsidiary has significant business
relations. The Merger Agreement provides that, by way of amplification and not
limitation, except as contemplated therein, neither NewsEdge nor any subsidiary
shall, between the date of the Merger Agreement and the earlier of the
termination of the Merger Agreement pursuant to its terms or the Effective Time,
directly or indirectly, do, or propose to do, any of the following, without the
prior written consent of Thomson:
(a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares
of any class of capital stock of NewsEdge or any subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of NewsEdge or any of its
subsidiaries (except for the issuance of a maximum of 3,841,026 Shares
issuable pursuant to options outstanding on the date of the Merger Agreement
under NewsEdge Stock Option Plans and 801,497 Shares issuable pursuant to
the warrants or rights to purchase 19,579 Shares pursuant to the ESPP in
each case as set forth in the disclosure schedule to the Merger Agreement
(the "Disclosure Schedule")), or (ii) any assets of NewsEdge or any
subsidiary, except in the ordinary course of business and in a manner
consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization or
any division thereof or any material amount of assets; (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise
26
become responsible for, the obligations of any person, or make any loans or
advances (except for the extension of advances to employees in the ordinary
course of business and consistent with past practice), or grant any security
interest in any of its assets; (iii) enter into any contract or agreement
other than in the ordinary course of business and consistent with past
practice; (iv) authorize, or make any commitment with respect to, any single
capital expenditure which is in excess of $50,000 or capital expenditures
which are, in the aggregate, in excess of $250,000 for NewsEdge and its
subsidiaries taken as a whole; (v) make or direct to be made any capital
investments or equity investments in any entity, other than a wholly owned
subsidiary; or (vi) enter into or amend any contract, agreement, commitment
or arrangement with respect to any matter set forth this clause (e);
(f) increase the compensation payable or to become payable or the
benefits provided to its directors, officers or employees, except for
increases in the ordinary course of business and consistent with past
practice in salaries or wages of employees of NewsEdge or any subsidiary who
are not directors or officers of NewsEdge, or grant any severance or
termination pay to, or enter into any employment or severance agreement
with, any director, officer or other employee of NewsEdge or of any
subsidiary, or hire any new officer, or hire any new employee other than
employees hired in the ordinary course of business and consistent with past
practice, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit-sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee (unless
required by law);
(g) change any accounting methods used by it unless required by GAAP;
(h) make any material tax election or settle or compromise any material
United States federal, state, local or non-United States income tax
liability;
(i) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, (A) in the ordinary course of
business and consistent with past practice, of liabilities reflected or
reserved against in the balance sheet of NewsEdge and its consolidated
subsidiaries as at December 31, 2000, including the notes thereto or
subsequently incurred in the ordinary course of business and consistent with
past practice; (B) of any liabilities under the existing employment or
executive bonus agreements of NewsEdge set forth in the Disclosure Schedule
and (C) of fees and expenses in connection with the transition of control of
NewsEdge's business to Thomson or Purchaser;
(j) pay or delay the payment of accounts payable or accelerate the
collection of accounts receivable, in either case outside of the ordinary
course of business and consistent with past practice other than the payment
of fees and expenses in connection with the transition of control of
NewsEdge's business to Thomson or Purchaser;
(k) amend, modify or consent to the termination of any material
contract, or amend, waive, modify or consent to the termination of
NewsEdge's or any subsidiary's rights thereunder, other than in the ordinary
course of business and consistent with past practice;
(l) commence or settle any litigation, suit, claim, action, proceeding
or investigation (an "Action") other than, with the prior written consent of
Thomson (which consent will not be unreasonably withheld or delayed), the
Actions set forth in the Disclosure Schedule;
(m) amend or modify any of the Amended Employment Agreements;
(n) accelerate the vesting or exercisability of any options, other than
as and to the extent expressly set forth in the Disclosure Schedule; or
(o) announce an intention, enter into any formal or informal agreement
or otherwise make a commitment, to do any of the foregoing.
27
NEWSEDGE BOARD REPRESENTATION. The Merger Agreement provides that, promptly
upon the purchase by Purchaser of Shares pursuant to the Offer, and from time to
time thereafter, Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number (but rounded down if rounding up
would cause Purchaser's representatives to constitute the entire Board), on the
Board as shall give Purchaser representation on the Board equal to the product
of the total number of directors on the Board (giving effect to the directors
elected pursuant to this paragraph), multiplied by the percentage that the
aggregate number of Shares beneficially owned by Purchaser or any affiliate of
Purchaser following such purchase bears to the total number of Shares then
outstanding, and NewsEdge shall, at such time, promptly take all actions
necessary to cause Purchaser's designees to be elected as directors of NewsEdge,
including increasing the size of the Board or securing the resignations of
incumbent directors, or both. The Merger Agreement also provides that, at such
times, NewsEdge shall use its reasonable best efforts to cause persons
designated by Purchaser to constitute the same percentage as persons designated
by Purchaser shall constitute of the Board of (i) each committee of the Board,
(ii) each board of directors of each subsidiary, and (iii) each committee of
each such board, in each case only to the extent permitted by applicable law.
Notwithstanding the foregoing, until the Effective Time, NewsEdge has agreed to
use its reasonable best efforts to ensure that at least two members of the Board
and each committee of the Board and such boards and committees of the
subsidiaries, as of the date of the Merger Agreement, who are not employees of
NewsEdge shall remain members of the Board and of such boards and committees.
The Merger Agreement provides that, following the election of Purchaser's
designees in accordance with the immediately preceding paragraph and prior to
the Effective Time, any amendment of the Merger Agreement or the Certificate of
Incorporation or By-laws of NewsEdge, any termination of the Merger Agreement by
NewsEdge, any extension by NewsEdge of the time for the performance of any of
the obligations or other acts of Thomson or Purchaser, or waiver of any of
NewsEdge's rights thereunder, will require the concurrence of a majority of
those directors of NewsEdge then in office who were neither designated by
Purchaser nor are employees of NewsEdge or any subsidiary.
ACCESS TO INFORMATION; CONFIDENTIALITY. Pursuant to the Merger Agreement,
until the Effective Time, NewsEdge shall, and shall cause its subsidiaries and
the officers, directors, employees, auditors and agents of NewsEdge and its
subsidiaries to, afford the officers, employees and agents of Thomson and
Purchaser reasonable access at all reasonable times to the officers, employees,
agents, properties, offices, plants and other facilities, books and records of
NewsEdge and each subsidiary, and shall furnish Thomson and Purchaser with such
financial, operating and other data and information as Thomson or Purchaser,
through their officers, employees or agents, may reasonably request. Thomson and
Purchaser agreed that all information obtained by either of them pursuant to
this access shall be kept confidential in accordance with a confidentiality
agreement dated May 16, 2001 between West Group, an affiliate of Thomson and
Broadview, on behalf of NewsEdge (the "Confidentiality Agreement").
NO SOLICITATION OF TRANSACTIONS. NewsEdge has agreed that neither it nor
any subsidiary shall, directly or indirectly, through any officer, director,
employee, representative, agent or otherwise, (i) solicit, initiate or take any
action intended to encourage the submission of any Acquisition Proposal, or
(ii) except as required by the fiduciary duties of the Board under applicable
law (as determined in good faith) after having received advice from outside
legal counsel in response to unsolicited proposals, participate in any
discussions or negotiations regarding, or furnish to any person, any information
(provided that prior to furnishing such information, NewsEdge enters into a
customary, confidentiality agreement on terms no less favorable to NewsEdge than
those contained in the Confidentiality Agreement) with respect to, or otherwise
cooperate in any way with respect to, or assist or participate in, or take any
action intended to facilitate or encourage, any proposal that constitutes, or
may reasonably be expected to lead to, an Acquisition Proposal.
NewsEdge has also agreed that neither the Board nor any committee thereof
shall (i) withhold, withdraw, amend, change or modify, or propose to withhold,
withdraw, amend, change or modify, in a
28
manner adverse to Thomson or Purchaser, the approval or recommendation by the
Board or any such committee of the Merger Agreement, the Offer, the Merger or
any other Transactions contemplated thereby, (ii) approve or recommend, or
propose to approve or recommend, any Acquisition Proposal or (iii) enter into
any agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, in the event that, prior to the time of acceptance for payment of
Shares pursuant to the Offer, the Board determines in good faith that it is
required to do so by its fiduciary duties under applicable law after having
received advice from outside legal counsel and that the Acquisition Proposal
constitutes, or may reasonably be expected to lead to, a Superior Proposal (as
defined herein), after giving prior written notice to Thomson and Purchaser, the
Board may withhold, withdraw, amend, change or modify its approval or
recommendation of the Offer and the Merger, but only to terminate the Merger
Agreement in accordance with the termination provisions specified therein.
NewsEdge has agreed to, and will direct or cause its directors, officers,
employees, representatives, agents and other representatives to, immediately
cease and cause to be terminated any discussions or negotiations with any
parties that may be ongoing with respect to any Acquisition Proposal as of the
date of the Merger Agreement. NewsEdge has also agreed to promptly advise
Thomson orally (within one business day) and in writing (within two business
days) of (i) any Acquisition Proposal or any request for information with
respect to any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or request and the identity of the person making such
Acquisition Proposal or request and (ii) any changes in any such Acquisition
Proposal or request.
"Acquisition Proposal" means (i) any proposal or offer from any person other
than Thomson or Purchaser regarding any direct or indirect acquisition of
(A) all or a substantial part of the assets of NewsEdge or of any subsidiary or
(B) over 15% of any class of equity securities of NewsEdge or of any subsidiary;
(ii) any tender offer or exchange offer, as defined pursuant to the Exchange
Act, that, if consummated, would result in any person beneficially owning 15% or
more of any class of equity securities of NewsEdge or any subsidiary; (iii) any
proposal or offer from any person other than Thomson or Purchaser regarding any
merger, consolidation, business combination, sale of all or a substantial part
of the assets, recapitalization, liquidation, dissolution or similar transaction
involving NewsEdge or any subsidiary, other than the Transactions.
"Superior Proposal" means any Acquisition Proposal not solicited, initiated
or encouraged in violation of the provisions of the Merger Agreement made by a
third person on terms which, the Board determines, in its good faith judgment,
after having received the advice of Broadview or another financial advisor of
nationally recognized reputation, after taking into account all of the terms and
conditions of such Acquisition Proposal and the ability of the third person
making such Acquisition Proposal to consummate it, that the proposed transaction
would be more favorable from a financial point of view to the stockholders of
NewsEdge than the Offer and the Merger and the Transactions.
Nothing contained in the section of the Merger Agreement relating to
non-solicitation by NewsEdge shall prohibit NewsEdge from taking and disclosing
to its stockholders a position contemplated by Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to NewsEdge's
stockholders, if the Board determines in good faith that it is required to do so
by its fiduciary duties under applicable law after having received advice from
outside legal counsel; provided, however, that neither NewsEdge nor the Board
nor any committee thereof shall, except as permitted in the section of the
Merger Agreement relating to non-solicitation by NewsEdge, withhold, withdraw,
amend, change or modify, or propose publicly to withhold, withdraw, amend,
change or modify, its position with respect to the Merger Agreement, the Offer,
the Merger or any other Transaction or to approve or recommend, or propose to
approve or recommend, any Acquisition Proposal, including a Superior Proposal.
Except as required by the Board's fiduciary duties under applicable law
after having received advice from outside legal counsel, NewsEdge has agreed not
to release any third party from, or waive any provision of, any confidentiality
or standstill agreement to which NewsEdge is a party.
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EMPLOYEE STOCK OPTIONS AND OTHER EMPLOYEE BENEFITS. The Merger Agreement
provides that effective as of the Effective Time, NewsEdge shall (i) terminate
NewsEdge's Amended and Restated 1989 Stock Option Plan, 1995 Stock Plan, 1995
Non-Employee Director Stock Option Plan, 2000 Non-Officer and Non-Director Stock
Plan and Individual, Inc.'s 1996 Non-Employee Director Stock Option Plan, each
as amended through the date of the Merger Agreement (the "NewsEdge Stock Option
Plans"), and (ii) cancel, at the Effective Time, each outstanding option to
purchase Shares granted under NewsEdge Stock Option Plans that is outstanding
and unexercised as of such date. Each holder of an option that is outstanding
and unexercised at the Effective Time shall be entitled, to the extent any such
option is exercisable, to receive from the Surviving Corporation immediately
after the Effective Time, in exchange for the cancellation of such option, an
amount in cash equal to the excess, if any, of (x) $2.30 per Share over (y) the
per share exercise price of such option, multiplied by the number of Shares
subject to such option as of the Effective Time. From and after the date of the
Merger Agreement, NewsEdge shall not accelerate or permit the acceleration of
the vesting or exercisability of any options, other than with respect to certain
options that will vest upon the closing of the Offer and solely to the extent
expressly set forth in the Disclosure Schedule. Any such payment shall be
subject to all applicable federal, state and local tax withholding requirements.
As of the last day of the payroll period immediately preceding the Effective
Time (the "ESPP Date"), all offering and purchase periods under way under the
ESPP, shall be terminated and, as of the date of the Merger Agreement, no new
offering or purchase periods shall be commenced. NewsEdge has agreed to take all
necessary action, including providing all required notices to participants, to
ensure that the rights of participants in the ESPP with respect to any such
offering or purchase periods shall be determined by treating the ESPP Date as
the last day of such offering and purchase periods. NewsEdge has also agreed to
take all actions as may be necessary in order to freeze the rights of the
participants in the ESPP, effective as of the date of the Merger Agreement, to
existing participants and, to the extent permissible under the ESPP, existing
participation levels. The Merger Agreement also provides that, at the ESPP Date,
NewsEdge shall terminate the ESPP and each participant's rights thereunder shall
terminate in exchange for a cash payment equal to the excess of (i) $2.30 per
Share multiplied by the number of Shares that the participant's accumulated
payroll deductions as of the ESPP Date could purchase, at the $2.07 option price
under the ESPP, determined with reference only to March 1, 2001 and subject to
the limitations set forth in the ESPP (the "Number of Optioned Shares"), over
(ii) the result of multiplying the Number of Optioned Shares by such option
price, subject to any applicable federal, state and local tax withholding
requirements.
Pursuant to the Merger Agreement, at the Effective Time, a holder of a
warrant shall be entitled to receive, and shall, upon surrender of such warrant
to Purchaser for cancellation, receive, in settlement and cancellation thereof,
an amount of cash, if any, equal to the excess, if any, of (x) $2.30 per Share
multiplied by the number of Shares issuable upon exercise of such warrant if
such warrant were exercised immediately prior to the Effective Time with respect
to all Shares remaining to be exercised thereunder over (y) the exercise price
of each such warrant with respect to all Shares remaining to be exercised
thereunder, which payment shall be made to each such warrant holder as soon as
practicable after the Effective Time. NewsEdge shall take all necessary action,
including, without limitation, providing notice to each holder of a warrant, as
required under and in accordance with the terms of such warrant, to effect the
disposition of the warrants as contemplated by this paragraph and the terms of
such warrant. Upon surrender of such warrants by the holders thereof, any
warrant not surrendered for cancellation as provided above shall survive the
Merger and shall become a warrant to receive, upon payment of the exercise price
provided for therein, an amount of cash based on $2.30 per Share in accordance
with the merger adjustment provisions of each such warrant.
The Merger Agreement provides that as of the Effective Time, Thomson shall
cause the Surviving Corporation to honor, in accordance with their terms, all
employee benefit plans and programs in effect immediately prior to the Effective
Time that are applicable to any current or former employees of NewsEdge or any
of its subsidiaries. Pursuant to the Merger Agreement, employees of NewsEdge or
any of its subsidiaries shall receive credit for the purposes of eligibility to
participate and vesting (but not for benefit accruals) under any employee
benefit plan or program established or maintained by the
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Surviving Corporation for service accrued or deemed accrued prior to the
Effective Time with NewsEdge or any of its subsidiaries; provided, however, that
such crediting of service shall not operate to duplicate any benefit or the
funding of any such benefit. Notwithstanding anything in this paragraph to the
contrary, nothing in this paragraph shall be deemed to limit or otherwise affect
the right of Thomson, Purchaser or the Surviving Corporation (i) to terminate
employment or change the place of work, responsibilities, status or description
of any employee or group of employees, or (ii) to terminate any employee benefit
plan without establishing a replacement plan, in each case as Thomson, Purchaser
or Surviving Corporation may determine in its discretion.
DIRECTORS' AND OFFICERS' INDEMNIFICATION INSURANCE. The Merger Agreement
provides that the By-laws of the Surviving Corporation shall contain provisions
no less favorable with respect to indemnification than are set forth in
Article 7 of the By-laws of NewsEdge, which provisions shall not be amended,
repealed or otherwise modified for a period of three years from the Effective
Time in any manner that would affect adversely the rights thereunder of
individuals who, at the Effective Time, were directors, officers, employees,
fiduciaries or agents of NewsEdge, unless such modification shall be required by
law.
The Merger Agreement also provides that the Surviving Corporation shall use
its reasonable best efforts to maintain in effect for three years from the
Effective Time, if available, the current directors' and officers' liability
insurance policies maintained by NewsEdge (provided that the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions that are not materially less favorable) with
respect to matters occurring prior to the Effective Time.
FURTHER ACTION; REASONABLE BEST EFFORTS. The Merger Agreement provides
that, subject to its terms and conditions, each of the parties thereto shall
(i) make promptly its respective filings, and thereafter promptly make any other
required submissions in any country where a merger filing or other antitrust
notification is necessary or desirable, including but not limited to the United
Kingdom, the Federal Democratic Republic of Germany and Brazil, with respect to
the Transactions and (ii) use its reasonable best efforts to take, or cause to
be taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Transactions, including, without limitation,
using its reasonable best efforts to obtain all permits, consents, approvals,
authorizations, qualifications and orders of any United States federal, state,
county or local or non-United States government, governmental, regulatory or
administrative authority, agency, instrumentality or commission or any court,
tribunal, or judicial or arbitral body (a "Governmental Authority") and parties
to contracts with NewsEdge and its subsidiaries as are necessary for the
consummation of the Transactions and to inform or consult with any trade unions,
work councils, employee representative or any other representative body as
required and to fulfill the conditions to the Offer and the Merger; provided
that neither Purchaser nor Thomson will be required to take any action,
including entering into any consent decree, hold separate orders or other
arrangements, that (A) requires the divestiture of any assets of any of
Purchaser, Thomson, NewsEdge or any of their respective subsidiaries or
(B) limits Thomson's freedom of action with respect to, or its ability to
retain, NewsEdge and its subsidiaries or any portion thereof or any of Thomson's
or its affiliates' other assets or businesses. In case, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of the Merger Agreement, the proper officers and directors of each
party to the Merger Agreement shall use their reasonable best efforts to take
all such action.
The Merger Agreement also provides that each of the parties thereto will
cooperate and use its reasonable best efforts to vigorously contest and resist
any Action, including administrative or judicial Action, and to have vacated,
lifted, reversed or overturned any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and that
restricts, prevents or prohibits consummation of the Transactions including,
without limitation, by vigorously pursuing all available avenues of
administrative and judicial appeal.
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REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by NewsEdge as to the absence of certain changes or events
concerning NewsEdge's business, compliance with law, absence of litigation,
employee benefit plans, labor matters, property and leases, intellectual
property, environmental matters, taxes, material contracts, insurance and
brokers.
CONDITIONS TO THE MERGER. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction,
at or prior to the Effective Time, of the following conditions: (a) if necessary
under Delaware Law, the Merger Agreement shall have been approved and adopted by
the affirmative vote of the stockholders of NewsEdge; (b) no Governmental
Authority shall have enacted, issued, promulgated, enforced or entered any law
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of making the acquisition of Shares by Thomson or Purchaser or any
affiliate of either of them illegal or otherwise restricting, preventing or
prohibiting consummation of the Transactions; and (c) Purchaser or its permitted
assignee shall have purchased all Shares validly tendered and not withdrawn
pursuant to the Offer.
TERMINATION. The Merger Agreement provides that it may be terminated and
the Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of the
Merger Agreement by the stockholders of NewsEdge: (a) by mutual written consent
of each of Thomson, Purchaser and NewsEdge duly authorized by the Boards of
Directors of Purchaser and NewsEdge; or (b) by either Thomson, Purchaser or,
upon approval of its Board, by NewsEdge if (i) the Effective Time shall not have
occurred on or before December 31, 2001; provided, however, that the right to
terminate the Merger Agreement under this clause (b)(i) will not be available to
any party whose failure to fulfill any obligation under the Merger Agreement has
been the cause of, or resulted in, the failure of the Effective Time to occur on
or before such date or (ii) any Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any injunction, order, decree or ruling
(whether temporary, preliminary or permanent) which has become final and
nonappealable and has the effect of making consummation of the Offer or the
Merger illegal or otherwise preventing or prohibiting consummation of the Offer
or the Merger; or (c) by Thomson if (i) Purchaser shall have (A) failed to
commence the Offer within 10 business days following the date of the Merger
Agreement due to a Change in NewsEdge Board Approval, (B) terminated the Offer
due to a Change in NewsEdge Board Approval, or the Offer shall have expired,
without Purchaser having accepted any Shares for payment thereunder or
(C) failed to accept Shares for payment pursuant to the Offer within 90 days
following the commencement of the Offer, unless such action or inaction under
(A), (B) or (C) shall have been caused by or resulted from the failure of
Thomson or Purchaser to perform, in any material respect, any of their material
covenants or agreements contained in the Merger Agreement, or the material
breach by Thomson or Purchaser of any of their material representations or
warranties contained in the Merger Agreement or (ii) prior to the purchase of
Shares pursuant to the Offer, a Change in NewsEdge Board Approval has occurred;
or (d) by NewsEdge, upon approval of the Board, if (i) Purchaser shall have
(A) failed to commence the Offer within 10 business days following the date of
the Merger Agreement other than due to a Change in NewsEdge Board Approval,
(B) terminated the Offer, or the Offer shall have expired, without Purchaser
having accepted any Shares for payment thereunder or (C) failed to accept Shares
for payment pursuant to the Offer within 90 days following the commencement of
the Offer, unless such action or inaction under (A), (B) or (C) shall have been
caused by or resulted from the failure of NewsEdge or any Selling Stockholder,
as applicable, to perform, in any material respect, any of its material
covenants or agreements contained in the Merger Agreement or the Stockholders
Agreement or the material breach by NewsEdge or any Selling Stockholder, as
applicable of any of its material representations or warranties contained in the
Merger Agreement or the Stockholders Agreement or (ii) prior to the purchase of
Shares pursuant to the Offer, if the Board determines in good faith that it is
required to do so by its fiduciary duties under applicable law after having
received advice from outside legal counsel in order to enter into a definitive
agreement with respect to a Superior Proposal, upon five business days' prior
written notice to Thomson, setting forth in reasonable detail the identity of
the person making, and the final terms and conditions of, the Superior Proposal
and after duly
32
considering any proposals that may be made by Thomson during such five business
day period; provided, however, that any termination of the Merger Agreement
pursuant to clause (d)(ii) of this paragraph shall not be effective until
NewsEdge has made full payment of all amounts described below under the Section
entitled "Fees and Expenses".
EFFECT OF TERMINATION. In the event of the termination of the Merger
Agreement, the Merger Agreement shall forthwith become void, and there shall be
no liability on the part of any party thereto, except (i) as set forth below
under the Section entitled "Fees and Expenses" and (ii) nothing in the Merger
Agreement shall relieve any party from liability for any breach thereof prior to
the date of such termination; provided, however, that the Confidentiality
Agreement shall survive any termination of the Merger Agreement.
FEES AND EXPENSES. The Merger Agreement provides that in the event that
(i) (A) any person (including, without limitation, NewsEdge or any affiliate
thereof), other than Thomson or any affiliate of Thomson, shall have become the
beneficial owner of more than 15% of the then outstanding Shares, (B) the Merger
Agreement shall have been terminated pursuant to the provisions described in
clause (b)(i), (c) or (d) of the Termination paragraph above, and (C) NewsEdge
enters into an agreement with respect to an Acquisition Proposal or an
Acquisition Proposal is consummated, in each case within 12 months after such
termination of the Merger Agreement; or (ii) any person shall have commenced,
publicly proposed or communicated to NewsEdge an Acquisition Proposal that is
publicly disclosed and (A) the Offer shall have remained open for at least 20
business days, (B) the Minimum Condition shall not have been satisfied and
(C) the Merger Agreement shall have been terminated pursuant to the termination
provisions described in the Termination paragraph above; or (iii) the Merger
Agreement is terminated (A) pursuant to (x) the provisions described in
clause (c)(ii) or (d)(ii) of the Termination paragraph above or (y) the
provisions described in clause (c)(i) or (d)(i) of the Termination paragraph
above, to the extent that the failure to commence, the termination or the
failure to accept any Shares for payment, as set forth in clause (c)(i) or
(d)(i) of the Termination paragraph above, as the case may be, shall relate to
the failure of NewsEdge to perform, in any material respect, any of its material
covenants or agreements contained in the Merger Agreement or a material breach
by NewsEdge of any of its material representations or warranties contained in
the Merger Agreement and (B) NewsEdge enters into an agreement with respect to
an Acquisition Proposal or an Acquisition Proposal is consummated, in each case
within 12 months after such termination of the Merger Agreement; or (iv) an
Acquisition Proposal that was commenced, publicly proposed or communicated to
NewsEdge prior to the termination of the Merger Agreement pursuant to the
termination provision described in the Termination paragraph above is
consummated within 12 months after such termination and NewsEdge shall not
theretofore have been required to pay the Fee to Thomson pursuant to the
provisions described in clause (i), (ii) or (iii) of this paragraph; then, in
any such event, NewsEdge shall pay Thomson promptly (but in no event later than
two business days after the first of such events shall have occurred) a fee of
$1,432,000 (the "Fee"), which amount shall be payable in immediately available
funds. Except as set forth in this paragraph, all costs and expenses incurred in
connection with the Merger Agreement, the Stockholders Agreements and the
Transactions shall be paid by the party incurring such expenses, whether or not
any Transaction is consummated.
THE STOCKHOLDERS AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE STOCKHOLDERS
AGREEMENT, AMONG THOMSON, PURCHASER AND EACH OF THE SELLING STOCKHOLDERS. THIS
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE STOCKHOLDERS AGREEMENT,
WHICH IS INCORPORATED HEREIN BY REFERENCE, AND A COPY OF WHICH HAS BEEN FILED
WITH THE COMMISSION AS AN EXHIBIT TO THE SCHEDULE TO. THE STOCKHOLDERS AGREEMENT
MAY BE EXAMINED AND COPIES MAY BE OBTAINED AT THE PLACES SET FORTH IN SECTION 7.
33
TENDER OF SHARES. Each of the Selling Stockholders, namely, Clifford M.
Pollan, Rory J. Cowan, Michael E. Kolowich, William A. Devereaux, James D.
Daniell, Basil P. Regan, Murat H. Davidson, Jr., Peter Woodward, Ronald Benanto
and Donald McLagan, has agreed that, as soon as practicable following
commencement of the Offer, such Selling Stockholder shall tender or cause to be
tendered all of such Selling Stockholder's respective Shares pursuant to and in
accordance with the terms of the Offer, and shall not withdraw such Shares from
the Offer unless the Offer is terminated. Each Selling Stockholder acknowledged
and agreed that Purchaser's obligation to accept for payment any Shares tendered
by such Selling Stockholder is subject to the terms and conditions of the Offer.
VOTING AGREEMENT. Each of the Selling Stockholders further agreed that from
August 6, 2001 to the earlier to occur of (i) such date and time as the Merger
Agreement shall have been validly terminated, and (ii) the Effective Time, at
any meeting of the stockholders of NewsEdge, however called, and in any action
by consent of the stockholders of NewsEdge, such Selling Stockholder shall vote
(or cause to be voted) such Selling Stockholder's Shares (x) in favor of the
approval and adoption of the Merger Agreement and the Transactions and otherwise
in such manner as may be necessary to consummate the Merger; (y) except as
otherwise agreed to in writing by Thomson, against any action, proposal,
agreement or transaction that would result in a breach of any covenant,
obligation, agreement, representation or warranty of NewsEdge under the Merger
Agreement or of the Selling Stockholder contained in Stockholders Agreement; and
(z) against (A) any action, agreement or transaction that would impair or
materially delay the ability of NewsEdge to consummate the Transactions provided
for in the Merger Agreement or (B) any Acquisition Proposal.
IRREVOCABLE PROXY. Pursuant to the Stockholders Agreement, each of the
Selling Stockholders irrevocably appointed Thomson and each of Thomson's
executive officers as such Selling Stockholder's true and lawful attorney, agent
and proxy, to vote and otherwise act (by written consent or otherwise) with
respect to such Selling Stockholder's Shares at any meeting of stockholders of
NewsEdge (whether annual or special and whether or not an adjourned or postponed
meeting) or by written consent in lieu of any such meeting or otherwise, on the
matters and in the manner specified in the paragraph above, giving and granting
to such Selling Stockholder's attorney, agent and proxy the full power and
authority to do and perform each and every act and thing whether necessary or
desirable to be done in and about the premises, as fully as it might or could do
if personally present with full power of substitution, appointment and
revocation, hereby ratifying and confirming all that such Selling Stockholder's
attorney, agent and proxy shall do or cause to be done by virtue thereof.
Pursuant to the Stockholders Agreement, each Selling Stockholder agreed to
revoke all other proxies and powers of attorney with respect to such Selling
Stockholder's Shares which may have previously been appointed or granted, and
agreed that no subsequent proxy or power of attorney will be given or written
consent executed (and if given or executed, shall not be effective) by any
Selling Stockholder with respect thereto.
NO PROXY, DISPOSITION OR ENCUMBRANCE OF SHARES. Each of the Selling
Stockholders further agreed that, except as contemplated by the Stockholders
Agreement or with the prior written consent of Thomson, such Selling Stockholder
shall not, prior to the Expiration Date, (i) grant any proxies or voting rights
or enter into any voting trust or other agreement or arrangement with respect to
the voting of any Shares of such Selling Stockholder, (ii) sell, assign,
transfer, encumber, pledge or hypothecate or otherwise dispose of, or enter into
any contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance, pledge,
hypothecation or other disposition of, any such Shares or interest therein, or
create or permit to exist any liens of any nature whatsoever with respect to,
any of such Shares, (iii) take any action that would make any representation or
warranty of such Selling Stockholder in the Stockholders Agreement untrue or
incorrect or have the effect of preventing or materially impairing such Selling
Stockholder from performing such Selling Stockholder's obligations thereunder,
(iv) directly or indirectly, initiate, solicit or encourage any person to take
actions that could reasonably be expected to lead to the occurrence of any of
the foregoing, or (v) agree or consent to, or offer to do, any of the foregoing.
34
NO SOLICITATION OF TRANSACTIONS. Subject to each of the Selling
Stockholder's fiduciary duties and obligations as a director of NewsEdge, each
Selling Stockholder agreed that between the date of the Stockholders Agreement
and the Expiration Date, such Selling Stockholder shall not, directly or
indirectly, (i) solicit, initiate or take any action intended to encourage the
submission of any Acquisition Proposal, or (ii) participate in any discussions
or negotiations regarding, or furnish to any person, any information with
respect to, or otherwise cooperate in any way with respect to, or assist or
participate in, or take any action intended to facilitate or encourage, any
proposal that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal.
TERMINATION. The Stockholders Agreement will terminate, and no party will
have any rights or obligations thereunder and the Stockholders Agreement shall
become null and void and have no further effect on the Expiration Date.
EMPLOYMENT AGREEMENTS
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS IN THE AMENDED EMPLOYMENT
AGREEMENTS BETWEEN NEWSEDGE AND CERTAIN OF ITS OFFICERS. THE SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE AMENDED EMPLOYMENT AGREEMENTS,
WHICH ARE INCORPORATED HEREIN BY REFERENCE, AND COPIES OF WHICH HAVE BEEN FILED
WITH THE COMMISSION AS EXHIBITS TO THE SCHEDULE TO. THE AMENDED EMPLOYMENT
AGREEMENTS MAY BE EXAMINED AND COPIES MAY BE OBTAINED AT THE PLACES SET FORTH IN
SECTION 7.
NewsEdge had entered into employment agreements with the Officers, namely,
Messrs. Clifford M. Pollan, Ronald Benanto, Charles White, Thomas Karanian,
Alton Zink, David Scott, John Crozier and Lee Phillips (the "Original Employment
Agreements"). The purchase of Shares pursuant to the Offer and/or the
consummation of the Merger will constitute a "change of control" of NewsEdge for
purposes of these Original Employment Agreements and would entitle each of the
Officers to a "change of control" bonus. This "change of control" bonus would be
equal to six months' compensation, including base salary and targeted bonus, for
each of the Officers (other than Clifford M. Pollan) and 12 months'
compensation, including base salary and targeted bonus for Mr. Pollan.
In connection with the Offer and the Merger, each of the Officers have
entered into an Amended Employment Agreement with NewsEdge for one year terms,
which supersede each Officer's Original Employment Agreement (provided that the
Merger Agreement is not terminated prior to the Effective Time in which case the
Amended Employment Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement). Accordingly, no
"change of control" bonus will be payable pursuant to the Original Employment
Agreements. Pursuant to these Amended Employment Agreements, upon the earlier to
occur of (i) the date of the payment for the Shares pursuant to the Offer and
(ii) the date of the Effective Time of the Merger, each Officer will be paid the
one-time "change of control" bonus equal to the amount that would be payable to
the Officer under such Officer's Original Employment Agreement, as described
above. The Amended Employment Agreements further provide that if the Officer is
an active employee of NewsEdge on the one-year anniversary of the date of the
Amended Employment Agreement, the Officer will be paid, in the case of all
Officers other than Clifford M. Pollan, a bonus equal to 12 months' base salary
and in the case of Clifford M. Pollan a bonus equal to $365,000.
The Amended Employment Agreements also provide that during the term of the
Amended Employment Agreement and, with respect to clauses (i), (iii) and
(iv) below, for a period equal to 12 months after the termination of the
Officer's employment by NewsEdge (or any affiliate thereof) or, with respect to
clause (ii) below, 18 months after the termination of the Officer's employment
by NewsEdge (or any affiliate thereof) (the "Restricted Period"), the Officer
shall not (i) engage in certain restricted activities, including engaging in the
businesses of developing, operating, offering for sale and selling news or other
current information or software-based solutions pertaining thereto to
corporations
35
and other businesses, government agencies, universities and other academic
institutions and professional services providers; (ii) be an employee or
consultant of, or provide services to, certain competitors of NewsEdge or any of
their respective direct or indirect subsidiaries; (iii) subject to certain
exceptions, have an interest in any person engaged in the restricted activities
set forth in clause (i) above in any capacity, including, without limitation, as
a partner, shareholder, officer, director, principal, agent, employee, trustee
or consultant or any other relationship or capacity; or (iv) interfere with
business relationships between NewsEdge or any of its affiliates and customers
or suppliers of NewsEdge or any of its affiliates.
Each of the Officers agreed that, during the term of the Amended Employment
Agreement and at all times thereafter, they shall treat as confidential and,
except as required in the performance of their duties and responsibilities under
their Amended Employment Agreement, not disclose, publish or otherwise make
available to the public or to any individual, firm or corporation any
confidential material of NewsEdge or Thomson (and their affiliates) except if
the confidential material (i) becomes generally available to the public other
than as a result of a disclosure by the Officer, (ii) was available to the
Officer on a non-confidential basis prior to his employment with NewsEdge or
(iii) becomes available to the Officer on a non-confidential basis from a source
other than NewsEdge or Thomson (and their affiliates) or any of their business
partners, provided that such source is not bound by a confidentiality agreement
with NewsEdge or Thomson or any such business partners.
The Amended Employment Agreement also provides that during the Restricted
Period, the Officer shall not (i) hire or attempt to hire, or (ii) solicit or
entice or attempt to solicit or entice away, any person who is (at the
applicable time or was within the six month period prior to any such hire,
solicitation or enticement) an officer, employee or consultant of NewsEdge or
Thomson Legal & Regulatory (including, without limitation, The Dialog
Corporation plc ("Dialog")) (in the case of clause (i) above) or NewsEdge or
Thomson (in the case of clause (ii) above), as applicable, either for his own
account or for any individual, firm or corporation, whether or not such person
would commit any breach of his contract of employment by reason of leaving the
service of NewsEdge, Thomson or Thomson Legal & Regulatory (including without
limitation Dialog), as applicable.
The Officer further agreed that all discoveries, inventions, processes,
methods and improvements, conceived, developed or otherwise made by the Officer
at any time, alone or with others in any way relating to NewsEdge's present or
future business or products, whether patentable or subject to copyright
protection and whether or not reduced to practice, during the period of the
Officer's employment with NewsEdge ("Developments"), shall be the sole property
of NewsEdge and assigned to NewsEdge all of the Officer's right, title and
interest throughout the world in and to all such Developments.
Each of the Officers agreed that the Amended Employment Agreement contained
the entire understanding and agreement between the them and NewsEdge, and
superseded any prior understandings or agreements between them, with respect to
the subject matter thereof (including, without limitation, the Original
Employment Agreement).
CONFIDENTIALITY AGREEMENT
THE FOLLOWING IS A SUMMARY OF CERTAIN PROVISIONS OF THE CONFIDENTIALITY
AGREEMENT, DATED MAY 16, 2001 BETWEEN BROADVIEW, ON BEHALF OF NEWSEDGE, AND WEST
GROUP, AN AFFILIATE OF THOMSON. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE CONFIDENTIALITY AGREEMENT, WHICH IS INCORPORATED HEREIN BY
REFERENCE, AND A COPY OF WHICH HAS BEEN FILED WITH THE COMMISSION AS AN EXHIBIT
TO THE SCHEDULE TO. THE CONFIDENTIALITY AGREEMENT MAY BE EXAMINED AND COPIES MAY
BE OBTAINED AT THE PLACES SET FORTH SET FORTH IN SECTION 7.
On May 16, 2001, Broadview, on behalf of NewsEdge, and West Group, an
affiliate of Thomson, executed a Confidentiality Agreement (the "Confidentiality
Agreement"). Pursuant to the terms of the
36
Confidentiality Agreement, NewsEdge agreed to provide to West Group certain
confidential financial and other information concerning the business and affairs
of NewsEdge (the "evaluation material") and West Group agreed, among other
things, (i) not to use the evaluation material, other than for the purpose of
evaluating the proposed transaction between NewsEdge and West Group; (ii) not to
disclose or permit the disclosure of any of the evaluation material at any time
received or obtained from NewsEdge or its representatives to any third party or
otherwise use or permit the use of the evaluation material in any way
detrimental to NewsEdge, except as required by applicable law or legal process,
without the prior written consent of NewsEdge, provided that the evaluation
material could be disclosed to such representatives who needed to know such
information for the purpose of evaluating the proposed transaction between
NewsEdge and West Group and who were advised of the Confidentiality Agreement
and agreed to keep such evaluation material confidential and to be bound by the
Confidentiality Agreement to the same extent as if they were parties thereto;
(iii) that neither West Group nor its representatives would, without prior
written consent of NewsEdge, use any of the evaluation material at any time
received or obtained from NewsEdge or its representatives for any purpose in the
event that the proposed transaction between NewsEdge and West Group was not
consummated; (iv) that all evaluation material was to be returned upon
NewsEdge's request or destroyed and not retained by West Group or its
representatives in any form or for any reason in the event that the proposed
transaction was not consummated; and (v) that the intention of NewsEdge to
engage in discussions with West Group, and the subsequent exercise of that
intention, would be kept confidential.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
As described above, on August 6, 2001, each of the Officers entered into an
Amended Employment Agreement. In addition, on August 6, 2001, the Board adopted
resolutions pursuant to which, immediately prior to the Effective Time, 50% of
all outstanding and unvested options (including those held by directors and
Officers) granted under any of NewsEdge's Stock Option Plans would become fully
vested and exercisable. A summary of the effects of the Offer and the Merger and
the Transactions on the directors and the Officers of NewsEdge is set forth in
Item 3 of the Schedule 14D-9 and is incorporated into this Offer to Purchase by
reference.
11. PURPOSE OF THE OFFER; PLANS FOR NEWSEDGE AFTER THE OFFER AND THE MERGER.
PURPOSE OF THE OFFER. The Offer is being made pursuant to the Merger
Agreement. The purpose of the Offer and the Merger is for Thomson to acquire
control of, and the entire equity interest in, NewsEdge. The purpose of the
Merger is for Thomson to acquire all Shares not purchased pursuant to the Offer.
Upon consummation of the Merger, NewsEdge will become an indirect wholly owned
subsidiary of Thomson.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the Transactions contemplated thereby, including
the Merger. The Board of Directors of NewsEdge has unanimously determined that
the Merger Agreement and the Transactions contemplated thereby, including each
of the Offer and the Merger, is fair to, and in the best interests of, the
holders of Shares, has approved and declared advisable the Merger Agreement and
the Transactions (such approval and adoption having been made in accordance with
Delaware Law including, without limitation, Section 203 thereof) and has
resolved to recommend that holders of Shares accept the Offer and tender their
Shares pursuant to the Offer and approve and adopt the Merger Agreement. Unless
the Merger is consummated pursuant to the short-form merger provisions under
Delaware Law described below, the only remaining required corporate action of
NewsEdge is the approval and adoption of the Merger Agreement by the affirmative
vote of the holders of at least a majority of the outstanding Shares.
Accordingly, if the Minimum Condition is satisfied, Purchaser will have
sufficient voting power to cause the approval and adoption of the Merger
Agreement without the affirmative vote of any other stockholder.
37
In the Merger Agreement, NewsEdge has agreed to duly call, give notice of,
convene and hold an annual or special meeting of its stockholders as promptly as
practicable following consummation of the Offer for the purpose of considering
and taking action on the Merger Agreement and the Transactions, if such action
is required by Delaware Law.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, and from time to time thereafter, Purchaser
will be entitled to designate representatives to serve on the Board in
proportion to Purchaser's ownership of Shares following such purchase. See
Section 10. Purchaser expects that such representation would permit Purchaser to
exert substantial influence over NewsEdge's conduct of its business and
operations.
SHORT-FORM MERGER. Under Delaware Law, if Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the then outstanding Shares, Purchaser
will be able to approve the Merger without a vote of NewsEdge's other
stockholders. In such event, Thomson, Purchaser and NewsEdge have agreed in the
Merger Agreement to take all necessary and appropriate action to cause the
Merger to become effective as promptly as reasonably practicable after such
acquisition, without a meeting of NewsEdge's stockholders. If, however,
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise and a vote of NewsEdge's stockholders is required under
Delaware Law, a significantly longer period of time would be required to effect
the Merger.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. Notwithstanding the foregoing, if the Merger is consummated, holders of
Shares who have not tendered their Shares or, if applicable, voted in favor of
the Merger will have certain rights under Delaware Law to dissent from the
Merger and demand appraisal of, and to receive payment in cash of the fair value
of, their Shares. Holders of Shares who perfect such rights by complying with
the procedures set forth in Section 262 of Delaware Law will have the "fair
value" of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of the Merger) determined by the Delaware Court of
Chancery and will be entitled to receive a cash payment equal to such fair value
for the Surviving Corporation. In addition, such dissenting holders of Shares
would be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares.
Thomson and Purchaser do not intend to object, assuming the proper
procedures are followed, to the exercise of appraisal rights by any stockholder
and the demand for appraisal of, and payment in cash for the fair value of, the
Shares. Thomson and Purchaser intend, however, to cause the Surviving
Corporation to argue in an appraisal proceeding that, for purposes of such
proceeding, the fair value of each Share is less than or equal to the Merger
Consideration.
The foregoing summary of the rights of dissenting stockholders under
Delaware Law does not purport to be a complete statement of the procedures to be
followed by holders of Shares desiring to exercise any appraisal rights under
Delaware Law. The preservation and exercise of appraisal rights require strict
adherence to the applicable provisions of Delaware Law.
GOING PRIVATE TRANSACTIONS. The Commission has adopted Rule 13e-3 under the
Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it.
Rule 13e-3 requires, among other things, that certain financial information
concerning NewsEdge and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such transaction be filed with the Commission and disclosed to stockholders
prior to consummation of the transaction. Purchaser believes that Rule 13e-3
will not be applicable to the Merger.
PLANS FOR NEWSEDGE. It is expected that, initially following the Merger,
the business and operations of NewsEdge will, except as set forth in the Offer
to Purchase, be continued by NewsEdge substantially
38
as they are currently being conducted. Thomson will continue to evaluate the
business and operations of NewsEdge during the pendency of the Offer and after
the consummation of the Offer and the Merger, and will take such actions as it
deems appropriate under the circumstances then existing. Thomson intends to seek
additional information about NewsEdge during this period. Thereafter, Thomson
intends to review such information as part of a comprehensive review of
NewsEdge's business, operations, capitalization and management with a view to
optimizing NewsEdge's potential in conjunction with Thomson's businesses. It is
expected that the business and operations of NewsEdge will form an important
part of Thomson's future business plans.
Except as set forth herein and as contemplated by the Merger Agreement,
Thomson does not have any present plans or proposals which relate to or would
result in (i) the acquisition by any person of additional securities of
NewsEdge, or the disposition of securities of NewsEdge; (ii) any extraordinary
corporate transaction, such as a merger, reorganization or liquidation of
NewsEdge or any of its subsidiaries; (iii) any sale or transfer of a material
amount of assets of NewsEdge or any of its subsidiaries; (iv) any material
change in NewsEdge's present capitalization or dividend policy; (v) any other
material change in NewsEdge's business or corporate structure; (vi) any change
in the present Board or management of NewsEdge, including any plans or proposals
to change the number or term of directors or to fill any existing vacancies on
the Board; (vii) changes in NewsEdge's charter, by-laws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of NewsEdge by any person; or (viii) any action similar to any of those
enumerated above.
If the Merger is consummated as planned, the Shares will be deregistered
under the Securities Act of 1933, as amended, and the Exchange Act and cease to
be authorized to be quoted on Nasdaq.
12. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that NewsEdge shall not, between the date of
the Merger Agreement and the Effective Time, without the prior written consent
of Thomson (a) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares
of any class of capital stock of NewsEdge or any of its subsidiaries, or any
options, warrants, convertible securities or other rights of any kind to acquire
any shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of NewsEdge or any of its
subsidiaries (except for the issuance of a maximum of 3,841,026 Shares issuable
pursuant to options outstanding on the date hereof under NewsEdge Stock Option
Plans and 801,497 Shares issuable pursuant to the warrants, or rights to
purchase 19,579 Shares pursuant to the ESPP), or (ii) any assets of NewsEdge or
any of its subsidiaries, except in the ordinary course of business and in a
manner consistent with past practice; (b) declare, set aside, make or pay any
dividend or other distribution, payable in cash, stock, property or otherwise,
with respect to any of its capital stock; or (c) reclassify, combine, split,
subdivide or redeem, or purchase or otherwise acquire, directly or indirectly,
any of its capital stock. See Section 10.
13. POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR SHARES, NASDAQ LISTING,
MARGIN REGULATIONS AND EXCHANGE ACT REGISTRATION.
POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES. The purchase of
Shares by Purchaser pursuant to the Offer will reduce the number of Shares that
might otherwise trade publicly and will reduce the number of holders of Shares,
which could adversely affect the liquidity and market value of the remaining
Shares held by the public.
Thomson intends to cause the delisting of the Shares by Nasdaq following
consummation of the Offer.
NASDAQ LISTING. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued listing on
Nasdaq. According to Nasdaq's published guidelines, the Shares would not be
eligible to be included for listing if, among other things, the number of Shares
publicly held falls below 750,000, the number of round lot holders of Shares
falls
39
below 400 or the market value of such publicly held Shares is not at least
$5 million. If, as a result of the purchase of Shares pursuant to the Offer, the
Merger or otherwise, the Shares no longer meet the requirements of Nasdaq for
continued listing, the listing of the Shares will be discontinued. In such
event, the market for the Shares would be adversely affected. In the event the
Shares were no longer eligible for listing on Nasdaq, quotations might still be
available from other sources. The extent of the public market for the Shares and
the availability of such quotations would, however, depend upon the number of
holders of such Shares remaining at such time, the interest in maintaining a
market in such Shares on the part of securities firms, the possible termination
of registration of such Shares under the Exchange Act as described below and
other factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by NewsEdge
to the Commission if the Shares are not listed on a "national securities
exchange" and there are fewer than 300 record holders. The termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by NewsEdge to holders of Shares and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with stockholders' meetings pursuant
to Section 14(a) or 14(c) of the Exchange Act and the related requirements of an
annual report, and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares. In
addition, "affiliates" of NewsEdge and persons holding "restricted securities"
of NewsEdge may be deprived of the ability to dispose of such securities
pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be eligible for Nasdaq reporting. Purchaser currently intends to
seek to cause NewsEdge to terminate the registration of the Shares under the
Exchange Act as soon after consummation of the Offer as the requirements for
termination of registration are met.
MARGIN REGULATIONS. The Shares are currently "margin securities", as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations of
the Federal Reserve Board, in which event such Shares could no longer be used as
collateral for loans made by brokers. In addition, if registration of the Shares
under the Exchange Act were terminated, the Shares would no longer constitute
"margin securities".
14. CERTAIN CONDITIONS TO THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment any Shares tendered pursuant to the Offer, if
immediately prior to the expiration of the Offer, (i) the Minimum Condition
shall not have been satisfied, (ii) any of the conditions in paragraphs (a),
(b), (c), (e), (f), (g) and (i) below shall exist and be continuing or
(iii) any of the conditions in paragraphs (d) and (h) below shall exist:
(a) there shall have been instituted or be pending any Action (other
than a certain Action specifically identified in the Disclosure Schedule to
the extent such Action has not resulted in a preliminary or permanent
injunction with respect to the Merger Agreement or any of the Transactions)
before any Governmental Authority (i) challenging or seeking to make
illegal, materially delay, or otherwise, directly or indirectly, restrain or
prohibit the making of the Offer, the acceptance for payment of any Shares
by Thomson, Purchaser or any other affiliate of Thomson, or the purchase of
Shares pursuant to the Stockholders Agreement, or the consummation of any
other Transaction, or seeking to obtain material damages in connection with
any Transaction; (ii) seeking to prohibit or materially limit the ownership
or operation by NewsEdge, Thomson or any of their subsidiaries of all or any
of the business or assets of
40
NewsEdge, Thomson or any of their subsidiaries that is material to either
Thomson and its subsidiaries or NewsEdge and its subsidiaries, in either
case, taken as a whole, or to compel NewsEdge, Thomson or any of their
subsidiaries, as a result of the Transactions, to dispose of or to hold
separate all or any portion of the business or assets of NewsEdge, Thomson
or any of their subsidiaries that is material to either Thomson and its
subsidiaries or NewsEdge and its subsidiaries, in each case, taken as a
whole; (iii) seeking to impose any limitation on the ability of Thomson,
Purchaser or any other affiliate of Thomson to exercise effectively full
rights of ownership of any Shares, including, without limitation, the right
to vote any Shares acquired by Purchaser pursuant to the Offer or the
Stockholders Agreement or otherwise on all matters properly presented to
NewsEdge's stockholders, including, without limitation, the approval and
adoption of the Merger Agreement and the Transactions; (iv) seeking to
require divestiture by Thomson, Purchaser or any other affiliate of Thomson
of any Shares; or (v) which otherwise would prevent or materially delay
consummation of the Offer or the Merger or would have a Material Adverse
Effect (as defined herein);
(b) there shall have been any statute, rule, regulation, legislation or
interpretation enacted, promulgated, amended, issued or deemed applicable to
(i) Thomson, NewsEdge or any subsidiary or affiliate of Thomson or NewsEdge
or (ii) any Transaction, by any United States or Canadian legislative body
or Governmental Authority with appropriate jurisdiction, the Stockholders
Agreement or the Merger, that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above;
(c) there shall have occurred any general suspension of trading in, or
limitation on prices for, securities on Nasdaq (other than a shortening of
trading hours or any coordinated trading halt triggered solely as a result
of a specified increase or decrease in a market index);
(d) (i) (A) it shall have been publicly disclosed, or Purchaser shall
have otherwise learned, that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 15% or more of the then-outstanding Shares has been
acquired by any person, other than Thomson or any of its affiliates, and
(B) the number of Shares validly tendered pursuant to the Offer and not
withdrawn prior to the expiration of the Offer do not constitute a majority
of the then outstanding Shares on a fully diluted basis (including, without
limitation, all Shares issuable upon the conversion of any convertible
securities or upon the exercise of any option, warrants or rights) or
(ii) a Change in NewsEdge Board Approval shall have occurred; provided,
however, that if at any time after the commencement of the Offer, any of the
foregoing events in this paragraph (d)(ii) has occurred, Purchaser may
terminate the Offer at any time upon or after such occurrence;
(e) any representation or warranty of NewsEdge in the Merger Agreement
that is qualified as to materiality or Material Adverse Effect shall not be
true and correct, or any such representation or warranty that is not so
qualified shall not be true and correct in any material respect, in each
case as if such representation or warranty was made as of such time on or
after the date of the Merger Agreement; provided, however, that this
condition shall be deemed to exist only if the failure of such
representations and warranties to be true and correct (to the extent
provided above in this paragraph (e)), individually or in the aggregate, has
had or would reasonably be expected to have a Material Adverse Effect;
(f) (i) NewsEdge shall have failed to perform, in any material respect,
any obligation or to comply, in any material respect, with any agreement or
covenant of NewsEdge to be performed or complied with by it under the Merger
Agreement, or (ii) the Selling Stockholders shall have failed to perform, in
any material respect, any obligation or to comply, in any material respect,
with any agreement or covenant of the Selling Stockholders to be performed
or complied with by them under the Stockholders Agreement if any such
failure impacts the Offer or any of the Transactions;
41
(g) any Indebtedness exists (for the purposes of this paragraph,
Indebtedness means all obligations and liabilities created, issued or
incurred by NewsEdge or any of its subsidiaries for borrowed money
(excluding any trade payable incurred in the ordinary course of business and
consistent with past practice) or long-term debt, including without
limitation, bank loans, mortgages, notes payable, purchase money installment
debt, capital lease obligations, guarantees of indebtedness of others, loans
from stockholders or other affiliates of NewsEdge or any of its subsidiaries
(excluding any expense reimbursement owed to employees of NewsEdge as a
result of travel and other activities in the ordinary course of business and
consistent with past practice), and all principal, interest, fees,
prepayment penalties or amounts due or owing with respect thereto);
(h) the Merger Agreement shall have been terminated in accordance with
its terms; or
(i) Purchaser and NewsEdge shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of Shares.
For the purposes of this Section 14, "Material Adverse Effect" means, when
used in connection with NewsEdge or any of its subsidiaries, any event,
circumstance, change or effect that is or is reasonably likely to be materially
adverse to the business, prospects, financial condition or results of operations
of NewsEdge and its subsidiaries, taken as a whole (it being understood, that
(i) NewsEdge's receipt of notification from the Nasdaq--AMEX Market Group of
NewsEdge's pending delisting from the Nasdaq National Market or NewsEdge's
actual delisting from the Nasdaq National Market will not, in either case
constitute a Material Adverse Effect; (ii) any adverse effect that is caused by
conditions affecting the economy or securities markets generally shall not be
taken into account in determining whether there has been a Material Adverse
Effect; (iii) any adverse effect that is caused by conditions affecting the
primary industry in which NewsEdge currently competes shall not be taken into
account in determining whether there has been a Material Adverse Effect
(provided that such effect does not affect NewsEdge in a disproportionate
manner); (iv) any adverse effect resulting from the Offer, the Merger or any of
the Transactions or the announcement thereof; and (v) any adverse effect to the
extent attributable to a certain Action specifically identified in the
Disclosure Schedule, shall not be taken into account in determining whether
there has been a Material Adverse Effect).
The foregoing conditions are for the sole benefit of Purchaser and Thomson
and may be asserted by Purchaser or Thomson regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or Thomson in
whole or in part at any time and from time to time. The failure by Thomson or
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
GENERAL. Based upon its examination of publicly available information with
respect to NewsEdge and the review of certain information furnished by NewsEdge
to Thomson and discussions between representatives of Thomson with
representatives of NewsEdge during Thomson's investigation of NewsEdge (see
Section 10), neither Purchaser nor Thomson is aware of (i) any license or other
regulatory permit that appears to be material to the business of NewsEdge or any
of its subsidiaries, taken as a whole, which might be adversely affected by the
acquisition of Shares by Purchaser pursuant to the Offer or (ii) except as set
forth below, of any approval or other action by any domestic (federal or state)
or foreign Governmental Authority which would be required prior to the
acquisition of Shares by Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is Purchaser's present intention to
seek such approval or action. Purchaser does not currently intend, however, to
delay the purchase of Shares tendered pursuant to the Offer pending the outcome
of any such action or the receipt of any such approval (subject to Purchaser's
right to decline to purchase Shares if any of the conditions in Section 14 shall
have occurred and be continuing).
42
There can be no assurance that any such approval or other action, if needed,
would be obtained without substantial conditions or that adverse consequences
might not result to the business of NewsEdge, Purchaser or Thomson or that
certain parts of the businesses of NewsEdge, Purchaser or Thomson might not have
to be disposed of or held separate or other substantial conditions complied with
in order to obtain such approval or other action or in the event that such
approval was not obtained or such other action was not taken. Purchaser's
obligation under the Offer to accept for payment and pay for Shares is subject
to certain conditions, including conditions relating to the legal matters
discussed in this Section 15. See Section 14 for certain conditions to the
Offer.
STATE TAKEOVER LAWS. NewsEdge is incorporated under the laws of the State
of Delaware. In general, Section 203 of Delaware Law prevents an "interested
stockholder" (generally a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, prior to such date the board of directors of the
corporation approved either the business combination or the transaction in which
the interested stockholder became an interested stockholder. On August 6, 2001,
prior to the execution of the Merger Agreement, the Board by unanimous vote of
all directors, approved and declared advisable the Merger Agreement and the
Transactions, including the Offer and the Merger, determined that the Merger
Agreement and the Transactions, including each of the Offer and the Merger, are
fair to, and in the best interests of, the stockholders of NewsEdge and resolved
to recommend that the stockholders of NewsEdge accept the Offer and tender their
Shares pursuant to the Offer and approve and adopt the Merger Agreement.
Accordingly, Section 203 is inapplicable to the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In EDGAR v. MITE CORP., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS CORP. v. DYNAMICS CORP. OF AMERICA, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquirer from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
NewsEdge, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 14.
ANTITRUST. The parties intend to notify the German Federal Cartel Office
(the "FCO") of the proposed Merger as soon as possible. After an initial review
of the proposed Merger by the FCO,
43
which may last for one month, the FCO will decide whether to clear the proposed
Merger or open a second stage investigation, which may last for a further period
of three months. If following the investigation, the FCO has found that the
proposed Merger would create or strengthen a dominant position in Germany, the
FCO may take such actions as it deems necessary or desirable in the public
interest to prevent the proposed Merger from being implemented in respect of the
German market.
The parties intend to submit the proposed Merger for approval by the
Brazilian antitrust authorities. The Secretariat for Economic Monitoring and
Secretariat of Economic Law will consider the proposed Merger and each will
issue an opinion to the Administrative Council for Economic Defense (the
"Council"), Brazil's antitrust tribunal. This Council will make a decision with
respect to the proposed Merger. The review of the proposed Merger by the
Brazilian antitrust authorities may take longer than six months, but will not
prevent the proposed Merger from taking effect; provided, however, if the
Council decides that the Merger is anti-competitive, it may impose restrictions
on the parties or order an unwinding of the Merger.
Thomson and NewsEdge conduct operations in a number of jurisdictions where
other regulatory filings or approvals may be required or advisable in connection
with the completion of the Merger. Thomson and NewsEdge are currently in the
process of reviewing whether filings or approvals may be required or desirable
in these jurisdictions which may be material to Thomson and NewsEdge and its
subsidiaries. It is possible that one or more of these filings may not be made,
or one or more of these approvals, which are not as a matter of practice
required to be obtained prior to effectiveness of a merger transaction, may not
be obtained, prior to the Merger.
16. FEES AND EXPENSES.
Purchaser and Thomson have retained Innisfree M&A Incorporated, as the
Information Agent, and Computershare Trust Company of New York as the
Depositary, in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telecopy, telegraph and personal
interview and may request banks, brokers, dealers and other nominee stockholders
to forward materials relating to the Offer to beneficial owners. As compensation
for acting as Information Agent in connection with the Offer, Innisfree M&A
Incorporated will be paid reasonable and customary compensation for its services
and will also be reimbursed for certain out-of-pocket expenses and may be
indemnified against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Purchaser will pay the Depositary reasonable and customary compensation for
its services in connection with the Offer, plus reimbursement for out-of-pocket
expenses, and will indemnify the Depositary against certain liabilities and
expenses in connection therewith, including under federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary handling and mailing expenses incurred by them in
forwarding material to their customers. Except as set forth above, neither
Purchaser nor Thomson will pay any fees or commissions to any broker or dealer
or other person or entity in connection with the solicitation of tenders of
Shares pursuant to the Offer.
17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to holders of Shares. Purchaser is not
aware of any jurisdiction where the making of the Offer is prohibited by any
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, Purchaser will make a good
faith effort to comply with any such state statute. If, after such good faith
effort, Purchaser cannot comply with any such state statute, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made
44
by a licensed broker or dealer, the Offer shall be deemed to be made on behalf
of Purchaser by one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR NEWSEDGE NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Thomson and Purchaser have filed with the Commission the Schedule
TO, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule TO and any amendments thereto, including
exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in Section 7 (except that they will not be
available at the regional offices of the Commission).
INFOBLADE ACQUISITION CORPORATION
Dated: August 21, 2001
45
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THOMSON. The following table sets forth
the name, current business address, citizenship and present principal occupation
or employment, and material occupations, positions, offices or employment and
business addresses thereof for the past five years of each director and
executive officer of Thomson. Except for Alan M. Lewis, who is a citizen of
Canada, Great Britain and South Africa, Stephane Bello, who is a citizen of
Italy, David J. Hulland, who is a citizen of Great Britain and Richard J.
Harrington, Brian Hall, Patrick Tierney, Ronald Schlosser, Michael Harris,
Steven Denning, Vance Opperman, David Shaffer, Robert Daleo, Robert Christie,
John Kechejian, Janey Loyd and George Taylor who are citizens of the United
States, each such person is a citizen of Canada. Unless otherwise indicated,
each occupation set forth opposite an individual's name refers to employment
with Thomson.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
Kenneth R. Thomson, 76....................... Chairman of Thomson since July 1978. Director
The Woodbridge Company Limited of Thomson since July 1978. Chairman of The
65 Queen Street West, Woodbridge Company Limited ("Woodbridge"), 65
Toronto, Ontario M5H 2M8 Queen Street West, Toronto, Ontario M5H 2M8,
Canada Canada since March 1979. Director of
Woodbridge since August 1956.
John A. Tory, 71............................. Deputy Chairman of Thomson from February 1978
The Woodbridge Company Limited to December 31, 1997. Director of Thomson
65 Queen Street West since February 1978. Director of Abitibi
Toronto, Ontario M5H 2M8 Consolidated, Inc., 207 Queens Quay West,
Canada Toronto, Ontario M5J 2P5, Canada, since
September 1965. Director of Rogers
Communications Inc., 40 King Street West,
Toronto, Ontario M5H 3Y2, Canada, since
December 1979. Director of Woodbridge,
65 Queen Street West, Toronto, Ontario M5H
2M8, Canada, since October 1967. President of
Woodbridge from March 1979 to 1998. Director
of The Thomson Corporation PLC, First Floor,
the Quandrangle, 180 Wardour Street, W1A 4YG,
London, England, since December 1977.
Director of the Royal Bank of Canada, Royal
Bank Plaza, 9(th) Floor, South Tower,
Toronto, Ontario M5J 2J5, Canada, from 1971
to 2000.
I-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
Ronald D. Barbaro, 69........................ Director of Thomson since May 1993. Director,
Ontario Lottery and Gaming Corporation Clairvest Group Inc., Suite 1700, 22 St.
4120 Yonge Street, Suite 420 Clair Avenue East, Toronto, Ontario M4V 2S3,
Toronto, Ontario M2P 2158 Canada, from September 1994 to 1998. Director
Canada of Equifax Canada, 7171 Jean Talon East,
Anjou, Quebec H1M 3N2, Canada, since June
1997. Director of ChoicePoint, Inc., 1000
Alderman Drive, Alpharetta, Georgia 30005,
since July 1997. Director of Prudential of
America Life Insurance Company of Canada
("PALI"), c/o Prudential of America Insurance
Co. (Canada), 200 Consilium Place,
Scarborough, Ontario M1H 3E6, Canada, since
January 1991. Chairman of PALI from 1992 to
January 1997. President of Prudential
Insurance Company of America, Inc., 260
Madison Avenue, Second Floor, New York, New
York 10116, from 1990 to 1993. President of
Worldwide Operations Prudential Insurance
Company of America-Canada, from 1985 to 1990.
Director of Equifax Inc., 1600 Peachtree
Street, N.W., Atlanta, Georgia 30309, from
April 1992 to July 1997. Director, Canbra
Foods Ltd., P.O. Box 99, 2415 2nd Avenue "A"
North, Lethbridge, Alberta, T1J 3Y4, Canada,
since July 1988; interim-Chairman since March
1996; Chairman since March 1997. Director,
Consoltex Group Inc., 8555 TransCanada
Highway, Ville Saint-Laurent, Quebec H4S 1Z6,
Canada, since May 1997. Director, Flow
International Corporation, 2300-64th Avenue
South, Kent, Washington 98032, since 1995.
Chairman, Natraceuticals Inc., 8290 Woodbine
Avenue, Markham, Ontario L3R 9W9, Canada,
since February 1997. Director, Signature
Security Group Inc., 26-28 Market Street,
Sydney, NSW, Australia, since March 1997.
Director, VoxCom Incorporated, #102,4209-99
Street, Edmonton, Alberta T6E 5V7, Canada,
since December 1996. Director, O'Donnell
Investment Management Corporation, 4100 Yonge
Street, Suite 601, Toronto, Ontario M2P 2B5,
Canada, since April 1997.
W. Geoffrey Beattie, 41...................... Deputy Chairman of Thomson since May 18,
The Woodbridge Company Limited 2000. Director of Thomson since May 1998.
65 Queen Street West President of Woodbridge since 1998. From 1990
Toronto, Ontario M5H 2M8 to 1998, attorney (partner from 1993) at
Canada Torys (formerly Tory, Tory, DesLauriers &
Binnington). Director of Tm Bioscience
Corporation since 1996. Director of Genesis
Organic Inc. since 1996. Director of the
Royal Bank of Canada since May, 2001.
Director of Bell Globemedia, Inc., since
January, 2001.
I-2
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
Maureen V. Kempston Darkes, 52............... Director of Thomson since May 1996. Chairman
General Motors of Canada Limited and General Manager, General Motors of Canada
1908 Colonel Sam Drive Limited ("GMCL"), 1908 Colonel Sam Drive,
Oshawa, Ontario L1H 8T7 Director of CAMI Automotive Inc., P.O. Box
Canada 1005, 300 Ingersoll Street, Ingersoll,
Ontario N5C 4A6, Canada. Director of the
Education Quality and Accountability Office
(Ontario Government), 2 Carlton Street, Suite
1200, Toronto, Ontario M5B 2M9. Director of
GMCL since August 1991. Vice President of
GMCL from August 1991 to July 1994. Director,
CN Rail, 935 de la Gauchetiere Street West,
Montreal, Quebec, Canada, since March 1995.
Director of Noranda, Inc., 181 Bay Street,
Suite 4100, 755 BCE Place, Toronto, Ontario
M5J 2T3, Canada, since January 1998.
Steven A. Denning, 52........................ Director of Thomson since January, 2000.
General Atlantic Partners Currently a Managing Partner of General
Pickwick Plaza Atlantic Partners, a private investment
Greenwich, CT 06830 company. Consultant with McKinsey & Co. prior
USA to joining General Atlantic. Member of the
Board of Trustees of Georgia Tech. Director
of Exult, Inc. and GT Interactive Software
Corporation Director of New York Nature
Conservancy. Director of Cancer Research
Institute. Director of National Parks &
Conservation Association. Director of
Stanford Graduate School of Business Advisory
Council. Director of Xchanging. Director of
Metapath Software Int'l. Director of Eclipsys
Corporation. Director of Talus Solutions.
Director of EXE Technologies.
John F. Fraser, 70........................... Director of Thomson since June 1989. Chairman
Air Canada of Air Canada, 355 Portage Avenue, Suite 500,
355 Portage Avenue, Suite 500 Winnipeg, Manitoba R3B 2C3, Canada, since
Winnipeg, Manitoba R3B 2C3 August 1996. Director of Air Canada since
Canada 1989. Vice Chairman of Russel Metals, Inc.
("Russel"), 1900 Winnipeg, Manitoba R3B 2C3
Minnesota Court, Suite 210, Mississauga,
Ontario L5N 3C9, Canada, from May 1995 to May
1997. Chairman of Russel from May 1992 to May
1995. Chairman and Chief Executive Officer of
Russel from May 1991 to May 1992. President
and Chief Executive Officer of Russel from
May 1978 to May 1991. Director, Bank of
Montreal, First Bank Tower, First Canadian
Place, Toronto, Ontario M5X 1A1, Canada,
since January 1985. Director, Manitoba
Telecom, Services, Inc., 21(st) Floor, 333
Main Street, Winnipeg, Manitoba R3C 3V6,
since May 1997. Director, Shell Canada
Limited, 400-4th Avenue S.W., Calgary,
Alberta T2P 0J4, Canada, since April 1990.
I-3
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
Richard J. Harrington, 54.................... Director of Thomson since September 1993.
The Thomson Corporation President and CEO of Thomson since October
Metro Center One Station Place 1997. Executive Vice President of Thomson
Stamford, CT 06902 from September 1993 to October 1997.
President and Chief Executive Officer,
Thomson Newspapers Group, Metro Center, One
Station Place, Stamford, Connecticut 06902,
from July 1993 to October 1997. President and
Chief Executive Officer, Thomson Professional
Publishing, Metro Center, One Station Place,
Stamford, Connecticut 06902, from June 1989
to July 1993.
Roger L. Martin, 44.......................... Director of Thomson since September 1999.
Rotman School of Management Dean of the Joseph L. Rotman School of
105 St. George Street Management at the University of Toronto.
Toronto, Ontario M5S 3E6 Previously a Director of Monitor Company from
Canada January 1996 to September 1998. Co-head of
the Monitor Company in 1995 and 1996.
Director of Celestica Inc., 844 Don Mills
Rd., Toronto, Ontario, Canada, since July
1998.
Vance K. Opperman, 55........................ Director of Thomson since September 1996.
Key Investments Inc. President and CEO of Key Investments Inc.,
601 Second Avenue South, 601 Second Avenue South, Suite 5200, since
Suite 5200, Minneapolis, MN 55402 August 1996. Chief Executive Officer and
USA General Counsel, MSP Communications, Inc.
Minneapolis, MN 55402 since December 1996.
President and Chief Operating Officer of West
Publishing Company ("West") between 1993 and
1996. General Counsel of West prior to 1993.
Senior partner of Opperman, Heins & Paquin
prior to joining West. Served on West's Board
of Directors from 1992 to 1996.
David H. Shaffer, 58......................... Director of Thomson since October 27, 1998.
The Thomson Corporation Chief Operating Officer of Thomson. Executive
Metro Center Vice President of Thomson since May, 1998.
One Station Place Chairman of the Board and Chief Executive
Stamford, CT 06902 Officer of Jostens Learning Corporation from
USA July 1995 to April 1998. President of Dun &
Bradstreet's Official Airline Guides, Inc.
(OAG) and Vice Chairman of Thomas Cook Travel
Inc. President and Chief Executive Officer of
MacMillan Inc., and Chairman of OAG. Member
of Maxwell Communications Corporation PLC
(MCC) Board of Directors. Currently Chairman
of the Board of T&S Incorporated. Board
member and publisher of The Black Book Group.
Member of the Advisory Board of Kellogg
Graduate School of Management at Northwestern
University, and trustee of the La Jolla
Country Day School.
I-4
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
David K.R. Thomson, 43....................... Director of Thomson since April 1988. Deputy
The Woodbridge Company Limited Chairman of Woodbridge since June 1990.
65 Queen Street West Director of Bell Globemedia, Inc., since
Toronto, Ontario M5H 2M8 January, 2001.
Canada
Richard M. Thomson, 67....................... Director of Thomson since October 1984.
Toronto-Dominion Bank Retired Chairman and Chief Executive Officer
Toronto-Dominion Bank Tower, 11th Floor of Toronto Dominion Bank ("TDM"), 11th Floor,
Toronto, Ontario M5K 1A2 Toronto- Dominion Bank Tower, Toronto,
Canada Ontario M5K 1A2, Canada since February 1998.
Chairman and Chief Executive Officer of TDM
from May 1978 to February 1998. Chief
Executive Officer of TDM from 1978 to 1997.
Director of Canada Pension Plan Investment
Board, Toronto. Chairman of Canadian
Occidental Petroleum Ltd., Calgary. Director
of CGC Inc., Toronto. Director of INCO
Limited, Toronto. Director of S.C. Johnson &
Son Inc., Racine, Wisconsin. Director of
Ontario Power Generation Inc., Toronto.
Director of The Prudential Insurance Company
of America, Newark, New Jersey.
Peter J. Thomson, 35......................... Director of Thomson since January 1995.
The Woodbridge Company Limited Deputy Chairman of Woodbridge since February
65 Queen Street West 1995.
Toronto, Ontario M5H 2M8
Canada
David J. Hulland, 51......................... Senior Vice President, Finance, of Thomson
The Thomson Corporation since 2001. Vice President, Finance of
Metro Center Thomson since September 1999. Vice President,
One Station Place Group Controller of Thomson from May 1993 to
Stamford, Connecticut 06902 September 1999. Group Controller of Thomson
USA from 1977 to May 1993.
Alan M. Lewis, 64............................ Treasurer of Thomson since May 1979.
The Thomson Corporation
Toronto Dominion Bank Tower,
Suite 2706 P.O. Box 24
Toronto-Dominion Centre
Toronto, Ontario M5K 1A1
Canada
I-5
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
Robert D. Daleo, 52.......................... Director of Thomson since January 2001.
The Thomson Corporation Executive Vice President and Chief Financial
Metro Center Officer of Thomson since October 1998.
One Station Place Executive Vice President, Finance and
Stamford, CT 06902 Business Development of Thomson from November
USA 1997 to May 1999. Senior Vice President,
Finance and Business Development of Thomson
from January 1997 to October 1997. Senior
Vice President and Chief Operating Officer,
Thomson Newspapers, One Station Place, Metro
Center, Stamford, CT 06902, from January 1996
to December 1997. Senior Vice President and
Chief Financial Officer, Thomson Newspapers,
from December 1994 to December 1995. Senior
Vice President and General Manager, Sweets
Group, McGraw-Hill Company, 1221 Avenue of
the Americas, New York, New York 10020, until
November 1994.
Michael S. Harris, 51........................ Senior Vice President, General Counsel and
The Thomson Corporation Secretary of Thomson since May 1998. Vice
Metro Center President and General Counsel of Thomson
One Station Place Holdings, Inc. ("THI"), Metro Center, One
Stamford, CT 06902 Station Place, Stamford, CT 06902, since June
USA 1993. Assistant Secretary and Assistant
General Counsel of THI from May 1989 to June
1993. Director of Purchaser since July 2000.
Brian H. Hall, 52............................ Executive Vice President of Thomson since
Thomson Legal and Regulatory March 2000. Senior Vice President of Thomson
610 Opperman Drive from October 1998 to March 2000. President
Eagan, MN 55123 and Chief Executive Officer of West Group
USA from 1996 to February 1999. President and
Chief Executive Officer of Thomson Legal and
Regulatory Group since October 1998. Formerly
President and Chief Executive Officer of
Thomson Legal Publishing from 1995 to 1996.
Patrick J. Tierney, 55....................... Executive Vice President of Thomson since
Thomson Financial March 2000. Senior Vice President of Thomson
195 Broadway from October 1998 to March 2000. President
New York, New York 10007 and Chief Executive Officer of Thomson
USA Financial since October 1998. President and
Chief Executive Officer of Thomson's
Reference, Scientific, and Healthcare Group
from January 1997 to November 1999. Prior to
joining Thomson, President and Chief
Executive Officer of Knight Ridder Financial.
Ronald H. Schlosser, 51...................... Executive Vice President of Thomson since
Thomson Scientific, Reference & Healthcare March 2000. President and Chief Executive
Metro Center Officer of Thomson's Reference, Scientific
One Station Place and Healthcare Group since January 2000.
Stamford, CT 06902 President of Thomson Financial Publishing
USA Group from August 1995 to December 1999.
I-6
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
John Kechejian, 54........................... Vice President, Investor Relations of Thomson
The Thomson Corporation since June 1997. Vice President, Investor
Metro Center Relations of Asea Brown Boveri from September
One Station Place 1971 to June 1997.
Stamford, CT 06902
USA
Joseph J. G. M. Vermeer, 54.................. Senior Vice President, Director of Tax since
The Thomson Corporation April 2001. Vice President, Director of Tax
Metro Center of Thomson since January 1995. Partner in
One Station Place Peat Marwick Thorne, 40 King Street West,
Stamford, CT 06902 Toronto, Ontario, Canada, from 1977 to
USA December 31, 1994.
David W. Binet, 43........................... Secretary to the Board of Directors since
The Woodbridge Company Limited September 2000. Vice President of Woodbridge
65 Queen Street West since August 1999. From 1986 to 1999,
Toronto, Ontario M5H 2M8 attorney (partner from 1993) at Torys
Canada (formerly Tory, Tory, DesLauriers &
Binnington).
Janey M. Loyd, 48............................ Vice President, Communications of Thomson
The Thomson Corporation since September 1999. Vice President of
Metro Center Marketing and Communications, LAI Worldwide,
One Station Place from 1997 to 1999. Various positions,
Stamford, CT 06902 including Vice President of Business
USA Development and Communications, with
Tambrands, Inc. from 1991 to 1997.
John J. Raffaeli, Jr. 47..................... Senior Vice President, Human Resources of
The Thomson Corporation Thomson since January 1998.
Metro Center
One Station Place
Stamford, CT 06902
USA
James J. Spach, 50........................... Senior Vice President, Organizational
The Thomson Corporation Development of Thomson since September 1997.
Metro Center President, Thomson University, from July 1999
One Station Place to September 2000. Senior Vice President,
Stamford, CT 06902 Organizational Development, Thompson
Newspapers, Inc., from 1995 to 1997.
Linda J. Walker, 36.......................... Vice President, Corporate Controller of
The Thomson Corporation Thomson since May 2001. Corporate Controller
Metro Center of Thomson from November 1999 to May 2001.
One Station Place Assistant Controller of Thomson from May 1994
Stamford, CT 06902 to November 1999.
USA
Stephane Bello, 40........................... Senior Vice President and Treasurer since
The Thomson Corporation August 1, 2001. General Director/Assistant
Metro Center Treasurer of General Motors in New York City
One Station Place from 1999 to 2001. Regional Treasurer, Europe
Stamford, CT 06902 of General Motors from 1996 to 1999.
USA
I-7
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ---------------------------------------------
John F. Carey, 35............................ Vice President, Business Planning and
The Thomson Corporation Development since April 2001. Director,
Metro Center Business Analysis and Planning of Thomson
One Station Place since January 1998. Prior to joining Thomson,
Stamford, CT 06902 Manager, Corporate Finance at Pfizer, Inc.,
USA 235 East 42nd Street, New York, NY 10017.
George Taylor, 59............................ Senior Vice President, Operations since
The Thomson Corporation July 1, 2001. President and Chief Executive
Metro Center Officer of Thomson Tax and Accounting in New
One Station Place York City from March, 1999 to February, 2001.
Stamford, CT 06902 Executive Vice President and Chief Operating
USA Officer of West Group in Eagan, Minnesota
from January 1997 to March 1999. Executive
Vice President and Chief Operating Officer of
Thomson Legal Publishing in Rochester, NY
from January 1996 to December 1996.
I-8
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name, age, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employment and business addresses thereof for the past five years of each
director and executive officer of Purchaser. Except for David J. Hulland, who is
a citizen of Great Britain, each such person is a citizen of the United States.
Unless otherwise indicated, the current business address of each person is
InfoBlade Acquisition Corporation, Metro Center, One Station Place, Stamford,
Connecticut 06902. Each occupation set forth opposite an individual's name
refers to employment with Purchaser, unless otherwise noted.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST FIVE
NAME, AGE AND CURRENT BUSINESS ADDRESS YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ------------------------------------------------------------
Michael S. Harris, 51 ............ Director of Purchaser since July 2001. Senior Vice
The Thomson Corporation President, General Counsel and Secretary of Thomson since
Metro Center May 1998. Vice President and General Counsel of Thomson
One Station Place, Holdings, Inc. ("THI"), Metro Center, One Station Place,
Stamford, CT 06902, Stamford, CT 06902, since June 1993. Assistant Secretary and
USA Assistant General Counsel of THI from May 1989 to June 1993.
David J. Hulland, 51 ............. Director of Purchaser since July 2001. Vice President
The Thomson Corporation Finance of Thomson since September 1999. Vice President and
Metro Center Group Controller of Thomson from May 1993 to September 1999.
One Station Place Group Controller of Thomson from 1977 to May 1993.
Stamford, CT 06902
USA
Edward A. Friedland, 45 .......... Director, Vice President and Secretary of Purchaser since
Thomson Financial July 2001. Assistant Secretary of Thomson since May 2000.
Metro Center Deputy General Counsel of Thomson since 1998. Assistant
One Station Place General Counsel of Thomson from 1994 to 1998. Associate
Stamford, CT 06902 General Counsel of the Information/ Publishing Group from
USA 1990 to 1993. Currently serving a second term on the Board
of Directors for the Software & Information Industry
Association.
Dennis J. Beckingham, 53 ......... President of Purchaser since July 2001. Executive Vice
Thomson Legal and President and Chief Financial Officer of Thomson Legal and
Regulatory Regulatory since 1996.
610 Opperman Drive
St. Paul, MN 55123
USA
David Hanssens, 44 ............... Vice President of Purchaser since July 2001. Executive Vice
Thomson Legal and President and Chief Strategy Officer of Thomson Legal and
Regulatory Regulatory from May 2001. Managing Director of The Parthenon
610 Opperman Drive Group in Boston, Massachusetts from 1992 to 2001.
St. Paul, MN 55123
USA
II-1
Manually signed facsimiles of the Letter of Transmittal, properly completed,
will be accepted. The Letter of Transmittal and stock certificates evidencing
Shares and any other required documents should be sent or delivered by each
stockholder or his or her broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
COMPUTERSHARE TRUST COMPANY OF NEW YORK
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
Computershare Trust Company Computershare Trust Company Computershare Trust Company
of New York of New York of New York
Wall Street Station Wall Street Plaza Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor 88 Pine Street, 19th Floor
New York, NY 10268-10100 New York, NY 10005 New York, NY 10005
BY FACSIMILE TRANSMISSION FOR
ELIGIBLE INSTITUTIONS ONLY:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
OTHER INFORMATION:
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Offer, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be obtained from the Information Agent. A stockholder may also contact brokers,
dealers, commercial banks or trust companies for assistance concerning the
Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
501 Madison Avenue, 20th floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All others Call Toll Free: (888) 750-5834
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
NEWSEDGE CORPORATION
AT
$2.30 NET PER SHARE
IN CASH
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 21, 2001
BY
INFOBLADE ACQUISITION CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, SEPTEMBER 18, 2001, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
COMPUTERSHARE TRUST COMPANY OF NEW YORK
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
Computershare Trust Company Computershare Trust Company Computershare Trust Company
of New York of New York of New York
Wall Street Station Wall Street Plaza Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor 88 Pine Street, 19th Floor
New York, NY 10268-1010 New York, NY 10005 New York, NY 10005
BY FACSIMILE TRANSMISSION
FOR ELIGIBLE INSTITUTIONS ONLY:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- ---------------------------------------------------------------------------------------------------------------
DESCRIPTION OF NEWSEDGE SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------
SHARE TOTAL NUMBER NUMBER OF
CERTIFICATE OF SHARES SHARES
NUMBER(S)* EVIDENCED BY TENDERED**
SHARE
CERTIFICATE(S)*
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate
delivered to the Depositary
are being tendered hereby. See Instruction 4.
- ---------------------------------------------------------------------------------------------------------------
This Letter of Transmittal is to be completed by stockholders of NewsEdge
Corporation either if share certificates evidencing Shares (as defined below)
are to be forwarded herewith or if delivery of Shares is to be made by
book-entry transfer to an account maintained by the Depositary (as defined
below) at the Book-Entry Transfer Facility (as defined in Section 2 of the Offer
to Purchase and pursuant to the procedures set forth in Section 3 of the Offer
to Purchase). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose share certificates evidencing Shares ("Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other documents required hereby to the Depositary prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase) or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis and who wish to tender their Shares must do so pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. See
Instruction 2.
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket No. (if any): ________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If delivery is by book-entry transfer, give the following information:
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF SHARE CERTIFICATES HAVE BEEN LOST, DESTROYED OR STOLEN. SEE
INSTRUCTION 10.
Number of Shares represented by lost, destroyed or stolen Share
Certificates: ______________________________________________________________
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY.
NOTE: YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE
BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW. PLEASE READ THE
ACCOMPANYING INSTRUCTIONS CAREFULLY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to InfoBlade Acquisition Corporation, a
Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of
The Thomson Corporation, a corporation organized under the laws of Ontario,
Canada ("Thomson"), the above-described shares of common stock, par value $0.01
per share ("Shares"), of NewsEdge Corporation, a Delaware corporation
("NewsEdge"), pursuant to Purchaser's offer to purchase all Shares at $2.30 per
Share, net to the seller in cash, without interest and less any required
withholding taxes, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated August 21, 2001 (the "Offer to Purchase"), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which, together
with the Offer to Purchase and any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). The undersigned will not be obligated to
pay brokerage fees or commissions, or except as set forth in Instruction 6 of
this Letter of Transmittal, stock transfer taxes on the transfer and sale of
Shares pursuant to the Offer. Purchaser will pay all fees and expenses of
Computershare Trust Company of New York, as Depositary (the "Depositary") and
Innisfree M&A Incorporated, as Information Agent (the "Information Agent"),
incurred in connection with the Offer. The undersigned understands that
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of its affiliates the right to purchase all or any
portion of Shares tendered pursuant to the Offer.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of August 6, 2001, among Thomson, Purchaser and NewsEdge, as it may be
amended, supplemented or restated from time to time in accordance with the terms
thereof.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), and
subject to, and effective upon, acceptance for payment of Shares tendered
herewith, in accordance with the terms of the Offer, the undersigned hereby
sells, assigns and transfers to or upon the order of Purchaser all right, title
and interest in and to all Shares that are being tendered hereby and all
dividends, distributions (including, without limitation, distributions of
additional Shares) and rights declared, paid or distributed in respect of such
Shares on or after August 21, 2001 (collectively, "Distributions") and
irrevocably appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and all
Distributions), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares (and all Distributions), or transfer
ownership of such Shares (and all Distributions) on the account books maintained
by the Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to the Depositary for the
account of Purchaser upon receipt by the Depositary of the purchase price,
(ii) present such Shares (and all Distributions) for transfer on the books of
NewsEdge and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and all Distributions), all in accordance
with the terms and subject to the conditions of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Thomson and each of the designees of Thomson, as the attorney-in-fact
and proxy of the undersigned, each with full power of substitution, to vote in
such manner as each such attorney and proxy or his, her or its substitute shall,
in his, her or its sole discretion, deem proper and otherwise act (by written
consent or otherwise) with respect to all Shares tendered hereby which have been
accepted for payment by Purchaser prior to the time of such vote or other action
and all Shares and other securities issued in Distributions in respect of such
Shares, which the undersigned is entitled to vote at any meeting of stockholders
of NewsEdge (whether annual or special and whether or not an adjourned or
postponed meeting) or consent in lieu of any such meeting or otherwise. This
proxy and power of attorney is coupled with an interest in Shares tendered
hereby, is irrevocable and is granted in consideration of, and is effective
upon, the acceptance for payment of such Shares by Purchaser in accordance with
other terms of the Offer. Such acceptance for payment shall revoke all other
proxies and powers of attorney granted by the undersigned at any time with
respect to such Shares (and all Shares and other securities issued in
Distributions in respect of such Shares), and no subsequent proxies, powers of
attorney, consents or revocations may be given by the undersigned with respect
thereto (and if given will not be deemed effective). The undersigned understands
that, in order for Shares or Distributions to be deemed validly tendered,
immediately upon Purchaser's acceptance of such Shares for payment, Purchaser
must be able to exercise full voting and other rights with respect to such
Shares (and any and all Distributions), including, without limitation, voting at
any meeting of NewsEdge's stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer Shares tendered hereby
and all Distributions, that when such Shares are accepted for payment by
Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restrictions,
charges and encumbrances, and that none of such Shares and Distributions will be
subject to any adverse claim. The undersigned, upon request, shall execute and
deliver all additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of Shares
tendered hereby and all Distributions. In addition, the undersigned shall remit
and transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of Shares tendered hereby, accompanied by appropriate
documentation of transfer, and pending such remittance and transfer or
appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of Shares tendered hereby, or deduct from such purchase price,
the amount or value of such Distribution as determined by Purchaser in its sole
discretion.
All authority herein conferred or agreed to be conferred shall not be
affected by, and all such authority shall survive, the death or incapacity of
the undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Tenders of Shares made pursuant to the Offer may be withdrawn at
any time prior to the Expiration Date (as defined in the Offer to Purchase),
and, unless theretofore accepted for payment by Purchaser pursuant to the Offer,
may also be withdrawn at any time after October 19, 2001. See Section 4 of the
Offer to Purchase.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer (and if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment). The undersigned recognizes that, under certain circumstances set
forth in the Offer to Purchase, Purchaser may not be required to accept for
payment any of the Shares tendered hereby.
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not tendered or
not accepted for payment in the name(s) of the registered holder(s) appearing on
the cover page hereof under "Description of Shares Tendered". Similarly, unless
otherwise indicated below in the box entitled "Special Delivery Instructions",
please mail the check for the purchase price of all Shares purchased and return
all Share Certificates evidencing Shares not tendered or not accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing on the cover page hereof under "Description of
Shares Tendered". In the event that the boxes below entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Shares purchased and return all
Share Certificates evidencing Shares not tendered or not accepted for payment in
the name(s) of, and deliver such check and return such Share Certificates (and
any accompanying documents, as appropriate) to, the person(s) so indicated.
Unless otherwise indicated below in the box entitled "Special Payment
Instructions", please credit any Shares tendered hereby and delivered by
book-entry transfer that are not accepted for payment by crediting the account
at the Book-Entry Transfer Facility designated above. The undersigned recognizes
that Purchaser has no obligation, pursuant to the Special Payment Instructions,
to transfer any Shares from the name of the registered holder(s) thereof if
Purchaser does not accept for payment any Shares tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the To be completed ONLY if the check for the pur-
purchase price of Shares purchased and Share chase price of Shares purchased and Share
Certificates evidencing Shares not tendered or Certificates evidencing Shares not tendered or
not purchased are to be issued in the name of not purchased are to be mailed to someone other
someone other than the undersigned. than the undersigned, or the undersigned at an
address other than that shown on the cover page
hereof under "Description of Shares Tendered".
Issue Check and/or Share Certificate(s) to: Mail Check and/or Share Certificate(s) to:
Name: Name:
(PLEASE TYPE OR PRINT) (PLEASE TYPE OR PRINT)
Address: Address:
(INCLUDE ZIP CODE) (INCLUDE ZIP CODE)
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Account
Number:
- --------------------------------------------------------------------------------
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
X ______________________________________________________________________________
X ______________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: ____________________________ , 2001
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON SHARE
CERTIFICATES OR ON A SECURITY POSITION LISTING BY PERSON(S) AUTHORIZED TO BECOME
REGISTERED HOLDER(S) BY CERTIFICATES AND DOCUMENTS TRANSMITTED HEREWITH. IF
SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT,
OFFICER OF A CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE
CAPACITY, PLEASE PROVIDE THE FOLLOWING INFORMATION AND SEE INSTRUCTION 5.)
Name(s): _______________________________________________________________________
________________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.: ___________________________________________
Taxpayer Identification or Social Security No.: ________________________________
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
FINANCIAL INSTITUTIONS: PLACE MEDALLION GUARANTEE IN SPACE BELOW
Authorized Signature: __________________________________________________________
Name of Firm: __________________________________________________________________
Address: _______________________________________________________________________
Area Code and
Telephone Number: ______________________________________________________________
Dated: _________________________________________________________________________
- --------------------------------------------------------------------------------
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of the Security Transfer Agent
Medallion Signature Program, or by any other "Eligible Guarantor Institution",
as such term is defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended (each of the foregoing being an "Eligible
Institution") unless (i) this Letter of Transmittal is signed by the registered
holder(s) of Shares (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) tendered hereby and such
holder(s) has (have) NOT completed the box entitled "Special Payment
Instructions" or "Special Delivery Instructions" on the reverse hereof or
(ii) such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter
of Transmittal is to be completed by stockholders either if Share Certificates
are to be forwarded herewith or unless an Agent's Message is utilized or if
tenders are to be made pursuant to the procedures for tenders by book-entry
transfer pursuant to the procedure set forth in Section 3 of the Offer to
Purchase. Share Certificates evidencing all physically tendered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, as
well as a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), or in the case of a book-entry transfer, an
Agent's Message (as defined in Section 2 to the Offer to Purchase), and any
other documents required by this Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth below prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase). If Share Certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Stockholders whose Share Certificates are not immediately available, who cannot
deliver their Share Certificates and all other required documents to the
Depositary on or prior to the Expiration Date, or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis may tender their
Shares pursuant to the guaranteed delivery procedure described in Section 3 of
the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made
by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by Purchaser, must be received by the Depositary prior to the Expiration Date;
and (iii) the Share Certificates evidencing all physically delivered Shares in
proper form for transfer by delivery, or a confirmation of a book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer, in each case together with a Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed, with any required signature guarantees (or in the case of a
book-entry transfer, an Agent's Message (as defined in Section 2 of the Offer to
Purchase)) and any other documents required by this Letter of Transmittal, must
be received by the Depositary within three Nasdaq National Market ("Nasdaq")
trading days after the date of execution of such Notice of Guaranteed Delivery,
all as described in Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER (INCLUDING IN
THE CASE OF BOOK-ENTRY TRANSFER BY BOOK-ENTRY CONFIRMATION). DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a manually signed facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided on the cover page hereof under
"Description of Shares Tendered" is inadequate, the Share Certificate numbers,
the number of Shares evidenced by such Share Certificates and the number of
Shares tendered should be listed on a separate signed schedule and attached
hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares that are to be tendered in the box entitled "Number of Shares
Tendered". In such cases, new Share Certificate(s) evidencing the remainder of
Shares that were evidenced by the Share Certificates delivered to the Depositary
herewith will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the box entitled "Special Delivery Instructions"
above, as soon as practicable after the Expiration Date or the termination of
the Offer. All Shares evidenced by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Shares tendered hereby is held of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any Shares tendered hereby are registered in different names, it will be
necessary to complete, sign and submit as many separate Letters of Transmittal
as there are different registrations of such Shares.
If this Letter of Transmittal is signed by the registered holder(s) of
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not accepted for payment are to be issued in
the name of, a person other than the registered holder(s).
If the Letter of Transmittal is signed by a person other than the registered
holder(s) of the Share Certificate(s) evidencing Shares tendered, the Share
Certificate(s) tendered hereby must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name(s) of the registered
holder(s) appear(s) on such Share Certificate(s). Signatures on such Share
Certificate(s) and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of Shares tendered hereby, the Share Certificate(s)
evidencing Shares tendered hereby must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name(s) of the registered
holder(s) appear(s) on such Share Certificate(s). Signatures on such Share
Certificate(s) and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not accepted for payment are to
be issued in the name of, any person other than the registered holder(s) or if
tendered certificates are registered in the name of any person other than the
person(s) signing the Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s), or such other person, or
otherwise) payable on account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to Purchaser of the payment of such taxes, or exemption therefrom,
is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share Certificates evidencing Shares
tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued in the name of, and/or Share
Certificate(s) evidencing Shares not tendered or not accepted for payment are to
be issued in the name of and/or returned to, a person other than the person(s)
signing this Letter of Transmittal, or if such check or any such Share
Certificate is to be sent to a person other than the signor of this Letter of
Transmittal or to the person(s) signing this Letter of Transmittal but at an
address other than that shown in the box entitled "Description of Shares
Tendered" on the cover page hereof, the appropriate boxes herein must be
completed.
8. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Information Agent at their
respective addresses or telephone numbers set forth below. Additional copies of
the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery and the Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9 may be obtained from the Information Agent.
9. SUBSTITUTE FORM W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalty of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of federal income tax. If
a tendering stockholder has been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding, such stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
stockholder has since been notified by the Internal Revenue Service that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
30.5% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such stockholder. If the tendering stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 30.5% on
all payments of the purchase price to such stockholder until a TIN is provided
to the Depositary.
10. LOST, DESTROYED, OR STOLEN CERTIFICATES. If any certificate evidencing
Shares has been lost, destroyed, or stolen, the stockholder should promptly
notify EquiServe at (781) 575-3121. The stockholder will be instructed as to the
steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR MANUALLY SIGNED FACSIMILE HEREOF),
PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE
GUARANTEES (OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE) AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a stockholder whose tendered Shares are
accepted for payment is generally required to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 provided herewith. If
such stockholder is an individual, the TIN generally is such stockholder's
social security number. If the Depositary is not provided with the correct TIN,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service and payments that are made to such stockholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 30.5%.
In addition, if a stockholder makes a false statement that results in no
imposition of backup withholding, and there was no reasonable basis for making
such statement, a $500 penalty may also be imposed by the Internal Revenue
Service.
Certain stockholders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement (Internal Revenue Service
Form W-8), signed under penalties of perjury, attesting to such individual's
exempt status. Forms of such statements can be obtained from the Depositary. See
the enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions. A stockholder should consult
his or her tax advisor as to such stockholder's qualification for exemption from
backup withholding and the procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 30.5%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained provided that the
required information is furnished to the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying that (a) the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and
(b)(i) such stockholder has not been notified by the Internal Revenue Service
that he is subject to backup withholding as a result of a failure to report all
interest or dividends or (ii) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record holder of
Shares tendered hereby. If Shares are in more than one name or are not in the
name of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report. If the tendering stockholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the stockholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and dated the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 30.5% of all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
PAYER'S NAME: COMPUTERSHARE TRUST COMPANY OF NEW YORK
SUBSTITUTE PART I--Taxpayer Identification
FORM W-9 Number--For all accounts, enter your Social security number
Department Of The Treasury taxpayer Identification number in
Internal Revenue Service the box at right. (For most OR
individuals, this is your social
Payer's Request for security number. If you do not have
Taxpayer Identification a number, see "Obtaining a Number" Employer identification number
Number ("TIN") in the enclosed Guidelines.) Certify (If awaiting TIN write "Applied For")
by signing and dating below.
Note: If the account is in more than
one name, see the chart in the
enclosed Guidelines to determine
which number to give the payer.
PART II--For Payees Exempt from Backup Withholding, see the enclosed
Guidelines and complete as instructed therein.
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a
number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have
not been notified by the Internal Revenue Service (the "IRS") that I am subject to back-up withholding
as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you
are currently subject to backup withholding because of underreporting interest or dividends on your tax
return. However, if after being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to backup withholding, do not
cross out item (2). (Also see instructions in the enclosed Guidelines.)
Signature: Date: , 2001
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 30.5% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THIS OFFER. PLEASE
REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING A
TAXPAYER IDENTIFICATION NUMBER.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration office or (2) I intend to mail or deliver an application in
the near future. I understand that If I do not provide a taxpayer
identification number by the time of payment, 30.5% of all reportable cash
payments made to me thereafter will be withheld until I provide a taxpayer
identification number.
Signature: _______________________________ Date: _____________________, 2001
Facsimiles of the Letter of Transmittal, properly completed and duly signed,
will be accepted. The Letter of Transmittal and Share Certificates and any other
required documents should be sent or delivered by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of its addresses or to the facsimile number set forth
below.
THE DEPOSITARY FOR THE OFFER IS:
COMPUTERSHARE TRUST COMPANY OF NEW YORK
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
Computershare Trust Company Computershare Trust Company Computershare Trust Company
of New York of New York of New York
Wall Street Station Wall Street Plaza Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor 88 Pine Street, 19th Floor
New York, NY 10268-1010 New York, NY 10005 New York, NY 10005
BY FACSIMILE TRANSMISSION
FOR ELIGIBLE INSTITUTIONS ONLY:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of the
Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent. A stockholder may also
contact brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, NY 10022
Call Toll Free: (888) 750-5834
Banks and Brokers Call Collect: (212) 750-5833
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
NEWSEDGE CORPORATION
TO
INFOBLADE ACQUISITION CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
AT
$2.30 NET PER SHARE IN CASH
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, SEPTEMBER 18, 2001, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) upon the terms and
conditions of the Offer to Purchase, dated August 21, 2001 (the "Offer to
Purchase") made by InfoBlade Acquisition Corporation, a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of The Thomson
Corporation, a corporation organized under the laws of Ontario, Canada
("Thomson") for shares of common stock, per value $0.01 per share ("Shares"), of
NewsEdge Corporation, a Delaware corporation ("NewsEdge") (i) if certificates
("Share Certificates") evidencing Shares of NewsEdge are not immediately
available, (ii) if Share Certificates and all other required documents cannot be
delivered to Computershare Trust Company of New York, as Depositary (the
"Depositary"), prior to the Expiration Date (as defined in "Section 1. Terms of
the Offer; Expiration Date" of the Offer to Purchase) or (iii) if the procedure
for delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by
telegram, telex or facsimile transmission to the Depositary. See "Section 3.
Procedures for Accepting the Offer and Tendering Shares" of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
COMPUTERSHARE TRUST COMPANY OF NEW YORK
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
Computershare Trust Company Computershare Trust Company Computershare Trust Company
of New York of New York of New York
Wall Street Station Wall Street Plaza Wall Street Plaza
P.O. Box 1010 88 Pine Street, 19th Floor 88 Pine Street, 19th Floor
New York, NY 10268-1010 New York, NY 10005 New York, NY 10005
BY FACSIMILE TRANSMISSION
FOR ELIGIBLE INSTITUTIONS ONLY:
(212) 701-7636
CONFIRM BY TELEPHONE:
(212) 701-7624
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
Certificates representing Shares must be received by the Depositary within
three trading days after the date of the execution of this Notice of Guaranteed
Delivery.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period set forth above. Failure
to do so could result in a financial loss to such Eligible Institution.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Purchaser, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which, together with any amendment or supplements thereto,
collectively constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedure described in "Section 3. Procedures for Accepting the Offer
and Tendering Shares" of the Offer to Purchase.
If the Offer is terminated, the Shares tendered pursuant to the Offer will
be returned to the tendering holders promptly (or, in the case of tendered by
book-entry transfer, the book-entry tendered Shares will be credited to the
account maintained at the Book-Entry Transfer Facility from which the book-entry
tendered shares were delivered).
The undersigned understand(s) that payment by Computershare Trust Company of
New York, in its capacity as our Depositary for Shares tendered and accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (1) the Share Certificates evidencing Shares validly tendered and
not properly withdrawn prior to the expiration of the Offer and a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with respect to such Shares with any required signature
guarantees and any other documents required by the Letter of Transmittal or
(2) a book-entry confirmation of the transfer of the undersigned's Shares into
the Depositary's account at the Book-Entry Transfer Facility and a properly
transmitted Agent's Message (as defined in "Section 2. Acceptance for Payment
and Payment for Shares" of the Offer to Purchase).
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
- --------------------------------------------------------------------------------
Number of Shares: ______________________________________________________________
Certificate Nos. (If Available): _______________________________________________
/ / Check this box if shares will be delivered by book-entry transfer:
Name of Eligible Institution: __________________________________________________
Account No.: ___________________________________________________________________
Name(s) of Record Holders: _____________________________________________________
Street Address: ________________________________________________________________
City, State and Zip Code: ______________________________________________________
Area Code and Telephone No.: ___________________________________________________
Signature(s) of Holder(s): _____________________________________________________
Dated: ________________________, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the holder(s)
exactly as name(s) appear(s) on certificate(s) for the Shares or, if
tendered by a participant in the Depository Trust Company, exactly as the
participant's name appears on a security position listing as the owner of
the Shares, or by person(s) authorized to become holder(s) by endorsements
and documents transmitted with the Notice of Guaranteed Delivery. If
signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must provide the following
information:
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s) of Holders:_________________________________________________________
Capacity:___________________________________________________________________
Street Address:_____________________________________________________________
City, State and Zip Code:___________________________________________________
NOTE: DO NOT SEND CERTIFICATES WITH THIS FORM. CERTIFICATES SHOULD BE SENT
TO THE DEPOSITARY TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. or which is a commercial bank or trust company having an office or
correspondent in the United States, guarantees to deliver to the Depositary, Share Certificates evidencing the
Shares tendered hereby, in proper form for transfer, or confirmation of book-entry transfer of such Shares
into the Depositary's account at The Depository Trust Company, with delivery of a Letter of Transmittal (or
facsimile thereof) properly completed and duly executed, and any other required documents, all within three
Nasdaq National Market trading days of the date hereof.
NAME OF FIRM TITLE
AUTHORIZED SIGNATURE ADDRESS ZIP CODE
NAME:
PLEASE TYPE OR PRINT AREA CODE AND TELEPHONE NO.
DATED: -------------, 2001
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
- --------------------------------------------------------------------------------
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NEWSEDGE CORPORATION
AT
$2.30 NET PER SHARE
BY
INFOBLADE ACQUISITION CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, SEPTEMBER 18, 2001, UNLESS THE OFFER IS EXTENDED.
August 21, 2001
To Brokers, Dealers, Commercial Banks,
Trust Companies and other Nominees:
InfoBlade Acquisition Corporation, a Delaware corporation ("Purchaser") and
an indirect wholly owned subsidiary of The Thomson Corporation, a corporation
organized under the laws of Ontario, Canada ("Thomson"), has offered to purchase
all outstanding shares of common stock, par value $0.01 per share ("Shares"), of
NewsEdge Corporation, a Delaware corporation ("NewsEdge"), at a price of $2.30
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in Purchaser's Offer to Purchase, dated August 21, 2001
(the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"). Please furnish copies of the enclosed materials to those of your
clients for whose accounts you hold Shares registered in your name or in the
name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS (INCLUDING,
WITHOUT LIMITATION, ALL SHARES ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE
SECURITIES OR UPON THE EXERCISE OF ANY OPTIONS, WARRANTS, OR RIGHTS, BUT
EXCLUDING OPTIONS AND WARRANTS OWNED BY CERTAIN SELLING STOCKHOLDERS WHO HAVE
ENTERED INTO A STOCKHOLDERS AGREEMENT).
Enclosed for your information and for forwarding to your clients for whom
you hold Shares registered in your name or in the name of your nominee, are
copies of the following documents:
1. Offer to Purchase, dated August 21, 2001;
2. Letter of Transmittal for your use in accepting the Offer and tendering
Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to Computershare Trust Company of New York (the
"Depositary") by the Expiration Date (as defined in the Offer to
Purchase) or if the procedure for book-entry transfer cannot be completed
by the Expiration Date;
4. A letter to stockholders of NewsEdge from Clifford M. Pollan, President
and Chief Executive Officer of NewsEdge, together with a Solicitation/
Recommendation Statement on Schedule 14D-9 filed with the Securities and
Exchange Commission by NewsEdge;
5. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, SEPTEMBER 18, 2001, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of stock certificates
evidencing such Shares validly tendered and not properly withdrawn (or a
confirmation of a book-entry transfer of such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities (as defined in the Offer to
Purchase)), a Letter of Transmittal (or manually signed facsimile thereof)
properly completed and duly executed with any required signature guarantees or,
in the case of a book-entry transfer, an Agent's Message (as defined in
"Section 2. Acceptance for Payment and Payment for Shares" of the Offer to
Purchase) and any other required documents.
If holders of Shares wish to tender, but cannot deliver such holder's stock
certificates or cannot comply with the procedure for book-entry transfer prior
to the expiration of the Offer, a tender of Shares may be effected by following
the guaranteed delivery procedure described in "Section 3. Procedures for
Accepting the Offer and Tendering Shares" of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Depositary and Innisfree M&A Incorporated (the
"Information Agent") as described in the Offer to Purchase) in connection with
the solicitation of tenders of Shares pursuant to the Offer. However, Purchaser
will reimburse you for customary mailing and handling expenses incurred by you
in forwarding any of the enclosed materials to your clients. Purchaser will pay
or cause to be paid any stock transfer taxes payable with respect to the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent at its address and telephone number set forth on the back
cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Depositary or the Information Agent, at the addresses and telephone numbers set
forth on the back cover page of the Offer to Purchase.
Very truly yours,
InfoBlade Acquisition Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THOMSON, PURCHASER, NEWSEDGE, THE INFORMATION
AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY
OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
2
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NEWSEDGE CORPORATION
AT
$2.30 NET PER SHARE
BY
INFOBLADE ACQUISITION CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, SEPTEMBER 18, 2001, UNLESS THE OFFER IS EXTENDED.
August 21, 2001
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated August 21,
2001 (the "Offer to Purchase"), and a related Letter of Transmittal in
connection with the offer by InfoBlade Acquisition Corporation, a Delaware
corporation ("Purchaser") and an indirect wholly owned subsidiary of The Thomson
Corporation, a corporation organized under the laws of Ontario, Canada
("Thomson"), to purchase all outstanding shares of common stock, par value $0.01
per share ("Shares"), of NewsEdge Corporation, a Delaware corporation
("NewsEdge"), at a price of $2.30 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
WE (OR OUR NOMINEE) ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR
ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS. THE ENCLOSED LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the Offer.
YOUR ATTENTION IS DIRECTED TO THE FOLLOWING:
1. The tender price is $2.30 per Share, net to you in cash, less any
required withholding taxes and without interest;
2. The Offer is being made for any and all outstanding Shares;
3. The Board of Directors of NewsEdge has unanimously determined that
the Merger Agreement (as defined in the Offer to Purchase) and the
transactions contemplated thereby, including the Offer and the Merger
(as defined in the Offer to Purchase) are fair to, and in the best
interests of, the stockholders of NewsEdge, and recommends that
stockholders accept the Offer and tender their Shares pursuant to the
Offer;
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, September 18, 2001, unless the Offer is
extended;
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the
Offer at least majority of the Shares outstanding
on a fully diluted basis (including, without limitation, all Shares
issuable upon the conversion of any convertible securities or upon
the exercise of any options, warrants, or rights, but excluding
options and warrants owned by certain selling stockholders who have
entered into a stockholders agreement); and
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes with respect to the sale
and transfer of any Shares pursuant to the Offer.
If you wish to have us tender any or all of your Shares held by us for your
account, please so instruct us by completing, executing and returning to us the
instruction form contained in this letter. An envelope in which to return your
instructions to us is enclosed. If you authorize the tender of your Shares, all
such Shares will be tendered unless otherwise specified in your instructions.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT
A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with such state statute. If, after such good faith effort, Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
2
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NEWSEDGE CORPORATION
BY
INFOBLADE ACQUISITION CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated August 21, 2001, and the related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by InfoBlade
Acquisition Corporation, a Delaware corporation and an indirect wholly owned
subsidiary of The Thomson Corporation, a corporation organized under the laws of
Ontario, Canada, to purchase any and all outstanding shares of common stock, par
value $0.01 per share ("Shares"), of NewsEdge Corporation, a Delaware
corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
- --------------------------------------------------------------------------------
Number of Shares to be Tendered*:_______________________________________________
Date:___________________________________________________________________________
Signature(s):___________________________________________________________________
- --------------------------------------------------------------------------------
________________________________________________________________________________
Please type or print name(s)
- --------------------------------------------------------------------------------
________________________________________________________________________________
Please type or print address
________________________________________________________________________________
Area Code and Telephone Number
________________________________________________________________________________
Taxpayer Identification or Social Security Number
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- ------------------------------------------------------ ------------------------------------------------------
GIVE THE EMPLOYER
GIVE THE SOCIAL SECURITY IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF-- FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------ ------------------------------------------------------
1. An individual's account The individual 8. Sole proprietorship The owner (4)
account
2. Two or more individuals The actual owner of the 9. A valid trust, estate, The legal entity (Do not
account or, if combined or pension trust furnish the identifying
funds, the first number of the personal
individual on the representative or trustee
account (1) unless the legal entity
itself is not designated
in the account title.) (5)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person (1)
4. Custodian account of a The minor (2) 10. Corporate Account The corporation
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the minor
account) is the only contributor,
the minor (1)
6. Account in the name of The ward, minor, or 11. Religious, charitable, The organization
guardian or committee incompetent person (3) or educational
for a designated ward, organization account
minor or incompetent
person
7. a. The usual revocable The grantor trustee (1) 12. Partnership account The partnership
savings trust account held in the name of the
(grantor is also business
trustee)
b. So-called trust account The actual owner (1) 13. Association, club, or The organization
that is not a legal or other tax exempt
valid trust under organization
State law
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
- ------------------------------------------------------ ------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. The name of the business or the "doing business
as" name may also be entered. Either the social security number or the
employer identification number may be used.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on most payments (such
as all dividend and interest payments and on broker transactions) include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual retirement
plan, or a custodial account under section 403(b)(7) of the Code.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a) of the Code.
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1) of the Code.
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends generally exempt from backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441
of the Code.
- Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852 of the Code).
- Payments described in section 6049(b)(5) of the Code to nonresident
aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
- Mortgage and student loan interest paid to you.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE THE SUBSTITUTE FORM W-9 TO AVOID
POSSIBLE ERRONEOUS BACKUP WITHHOLDING. Complete the substitute Form W-9 as
follows: ENTER YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ACROSS THE
FACE OF THE FORM, SIGN, DATE, AND RETURN THE FORM TO THE PAYER.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the sections 6041, 6041A(a), 6045 and 6050A of the
Code and the regulations thereunder.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to IRS. IRS uses the numbers for identification
purposes and to help verify the accuracy of tax returns. Payers must be given
the numbers whether or not recipients are required to file tax returns. Payers
must generally withhold 30.5% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you make
a false statement with no reasonable basis which results in no imposition of
backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
(4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS--If the payer discloses or uses
taxpayer identification numbers in violation of Federal law, the payer may be
subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES (AS DEFINED BELOW). THE OFFER (AS DEFINED BELOW) IS BEING MADE
SOLELY BY THE OFFER TO PURCHASE DATED AUGUST 21, 2001 AND THE RELATED LETTER OF
TRANSMITTAL AND ANY AMENDMENTS OR SUPPLEMENTS THERETO, AND IS BEING MADE TO ALL
HOLDERS OF SHARES. PURCHASER (AS DEFINED BELOW) IS NOT AWARE OF ANY STATE WHERE
THE MAKING OF THE OFFER IS PROHIBITED BY ADMINISTRATIVE OR JUDICIAL ACTION
PURSUANT TO ANY VALID STATE STATUTE. IF PURCHASER BECOMES AWARE OF ANY VALID
STATE STATUTE PROHIBITING THE MAKING OF THE OFFER OR THE ACCEPTANCE OF SHARES
PURSUANT THERETO, PURCHASER WILL MAKE A GOOD FAITH EFFORT TO COMPLY WITH SUCH
STATE STATUTE. IF, AFTER SUCH GOOD FAITH EFFORT, PURCHASER CANNOT COMPLY WITH
SUCH STATE STATUTE, THE OFFER WILL NOT BE MADE TO (NOR WILL TENDERS BE ACCEPTED
FROM OR ON BEHALF OF) THE HOLDERS OF SHARES IN SUCH STATE. IN ANY JURISDICTION
WHERE THE SECURITIES, "BLUE SKY" OR OTHER LAWS REQUIRE THE OFFER TO BE MADE BY A
LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF
PURCHASER BY OR ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER THE
LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NEWSEDGE CORPORATION
AT
$2.30 NET PER SHARE
BY
INFOBLADE ACQUISITION CORPORATION,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
THE THOMSON CORPORATION
InfoBlade Acquisition Corporation, a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of The Thomson
Corporation, a corporation organized under the laws of Ontario, Canada
("Parent"), is offering to purchase all the outstanding shares of common
stock, $0.01 par value per share (including, without limitation, all shares
issuable upon the conversion of any convertible security or upon the exercise
of any options, warrants or rights (collectively, the "Shares")), of NewsEdge
Corporation, a Delaware corporation ("NewsEdge"), for $2.30 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated August 21, 2001 (the "Offer to Purchase"), and
in the related Letter of Transmittal (which, together with the Offer to
Purchase and any amendments or supplements thereto, collectively constitute
the "Offer"). Following the consummation of
the Offer, Purchaser and Parent intend to effect the Merger (as defined below)
in the manner described below.
- ---------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, SEPTEMBER 18, 2001, UNLESS THE OFFER IS EXTENDED.
- ---------------------------------------------------------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
THE NUMBER OF SHARES THAT SHALL CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING
SHARES ON A FULLY-DILUTED BASIS (INCLUDING, WITHOUT LIMITATION, ALL SHARES
ISSUABLE UPON THE CONVERSION OF ANY CONVERTIBLE SECURITIES OR UPON THE EXERCISE
OF ANY OPTIONS, WARRANTS OR RIGHTS, BUT EXCLUDING OPTIONS AND WARRANTS OWNED BY
THE SELLING STOCKHOLDERS (AS DEFINED BELOW)).
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of August 6, 2001 (the "Merger Agreement"), among Parent, Purchaser and
NewsEdge. The Merger Agreement provides, among other things, that as promptly as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction or, if permissible, waiver of the other conditions set forth in the
Merger Agreement and in accordance with the relevant provisions of the Delaware
General Corporation Law ("Delaware Law"), Purchaser will be merged with and into
NewsEdge (the "Merger"). As a result of the Merger, NewsEdge will continue as
the surviving corporation (the "Surviving Corporation") and will become an
indirect wholly owned subsidiary of Parent. At the effective time of the Merger
(the "Effective Time") and without any action on the part of the holder thereof,
each Share issued and outstanding immediately prior to the Effective Time (other
than Shares held in the treasury of NewsEdge and other than Shares held by
stockholders who shall have demanded and perfected appraisal rights under
Delaware Law, if any) will be cancelled and converted automatically into the
right to receive $2.30 net in cash, or any higher price that may be paid per
Share in the Offer, without interest.
Simultaneously with the execution of the Merger Agreement, Parent
and Purchaser have entered into a Stockholders Agreement dated as of August 6,
2001 (the "Stockholders Agreement") with all of the directors and certain
executive officers of NewsEdge and a significant stockholder of NewsEdge
(collectively, the "Selling Stockholders") pursuant to which each Selling
Stockholder agreed, among other things, to tender all of their respective Shares
in the Offer and agreed to vote all of their respective Shares in favor of the
approval and adoption of the Merger Agreement, the Merger and all the
transactions contemplated by the Merger Agreement and against certain
alternative transactions. The Merger Agreement, the Stockholders Agreement and
related agreements and transactions contemplated thereby are more fully
described in the Offer to Purchase.
THE BOARD OF DIRECTORS OF NEWSEDGE HAS UNANIMOUSLY DETERMINED THAT
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE
OFFER AND THE MERGER (COLLECTIVELY, THE "TRANSACTIONS"), ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE HOLDERS OF THE SHARES, AND HAS APPROVED AND DECLARED
ADVISABLE THE TRANSACTIONS, AND HAS RECOMMENDED THAT THE HOLDERS OF SHARES
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER AND APPROVE AND
ADOPT THE MERGER AGREEMENT.
For purposes of the Offer, Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn, if and when Purchaser gives oral or written notice to Computershare
Trust Company of New York (the "Depositary") of Purchaser's acceptance for
payment of such Shares pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Shares will be made by depositing the
aggregate purchase price therefor with the Depositary, which will act as agent
for tendering stockholders for the purpose of receiving payments from Purchaser
and transmitting such payments to tendering stockholders whose Shares have been
accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE
FOR SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT. In all
cases, payment for Shares tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i) the stock
certificates evidencing such Shares validly tendered and not properly withdrawn
(the "Share Certificates") or timely confirmation of a book-entry transfer of
such Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in Section 2 of the Offer to Purchase) pursuant to the procedure set
forth in Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or
a manually signed facsimile thereof), properly completed and duly executed, with
any required signature guarantees or an Agent's Message (as defined in Section 2
of the Offer to Purchase), in connection with any book-entry transfer and (iii)
any other documents required under the Letter of Transmittal.
The Offer and withdrawal rights expire at 12:00 midnight, New York
City time, on Tuesday, September 18, 2001 (the "Expiration Date"), unless and
until Purchaser (subject to the terms and conditions of the Merger Agreement)
extends the period during which the Offer is open, in which case the "Expiration
Date" will mean the latest time and date at which the Offer, as Purchaser has
extended it, will expire.
Purchaser expressly reserves the right (subject to the terms and
conditions of the Merger Agreement), to extend the Offer beyond the Expiration
Date if any of the conditions specified in Section 14 of the Offer to Purchase
shall not have been satisfied or waived until such conditions are satisfied or
waived, provided that Purchaser shall only be permitted three such extensions
for periods of up to five business days, by giving oral or written notice of
such extension to the Depositary. Any such extension will be followed as
promptly as practicable by public announcement thereof, such announcement to be
made no later than 9:00 a.m., New York City time, on the next business day after
the previously scheduled Expiration Date. During any such extension, all Shares
previously tendered and not properly withdrawn will remain subject to the Offer
and subject to the right of a tendering stockholder to withdraw such
stockholder's Shares.
Shares may be withdrawn at any time prior to the Expiration Date.
For the withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must
be timely received by the Depositary at one of its addresses set forth on the
back cover page of the Offer to Purchase. If a stockholder tenders Shares by
giving instructions to a broker or bank, such stockholder must instruct the
broker or bank to arrange for the withdrawal of such Shares. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of such Shares, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates, the serial numbers shown on such Share
Certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an eligible guarantor institution,
unless such Shares have been tendered for the account of an eligible guarantor
institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures. All
questions as to the form and validity (including the time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding.
The information required to be disclosed by Rule 14d-6(d)(1) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
NewsEdge has provided Purchaser with NewsEdge's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on NewsEdge's stockholder
lists and will be furnished, for subsequent transmittal to beneficial owners of
Shares, to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY IN THEIR ENTIRETY, BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
Questions and requests for assistance or for additional copies of
the Offer to Purchase and the related Letter of Transmittal, Notice of
Guaranteed Delivery and other tender offer materials may be directed to the
Information Agent as set forth below, and copies will be furnished promptly at
Purchaser's expense. Neither Parent nor Purchaser will pay any fees or
commissions to any broker, dealers or other persons (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[INNISFREE LOGO]
501 Madison Avenue, 20th Floor
New York, New York 10022
BANKS AND BROKERS CALL COLLECT: (212) 750-5833
ALL OTHERS CALL TOLL FREE: (888) 750-5834
August 21, 2001
[THOMSON LETTERHEAD]
NEWS RELEASE
INVESTOR CONTACTS: MEDIA CONTACTS:
John Kechejian David Scott Jason Stewart
Vice President, Investor Relations Vice President, Marketing Director, Corporate Communications
The Thomson Corporation NewsEdge Corp. The Thomson Corporation
(203) 328-9470 (781) 229-3000 (203) 328-8339
john.kechejian@thomson.com david.scott@newsedge.com jason.stewart@thomson.com
Ron Benanto John Shaughnessy
Vice President, CFO Director, Corporate Communications
NewsEdge Corp. Thomson Legal & Regulatory
(781) 229-3000 (651) 687-4749
ron.benanto@newsedge.com john.shaughnessy@westgroup.com
FOR IMMEDIATE RELEASE
- --------------------------------------------------------------------------------
THE THOMSON CORPORATION TO ACQUIRE
NEWSEDGE CORPORATION
- --------------------------------------------------------------------------------
TORONTO AND BURLINGTON, MASS., AUGUST 7, 2001 - The Thomson Corporation
(TSE: TOC), a leading e-information and solutions company in the business and
professional marketplace, and NewsEdge Corporation (NASDAQ: NEWZ), today
announced that they have signed a definitive agreement under which Thomson will
acquire NewsEdge.
Under the terms of the agreement, a newly formed Thomson subsidiary will
make a cash tender offer for all of the shares of NewsEdge common stock, at a
price of US$2.30 per share, or approximately US$43 million, which includes cash
in the business.
"The acquisition of NewsEdge builds on the commitment of The Thomson
Corporation to provide broad and powerful information and tools to the business
and professional market," said Brian H. Hall, president and chief executive
officer of Thomson Legal & Regulatory. "Like Westlaw(R), Dialog(R) and other
Thomson products, NewsEdge offers timeliness, breadth of coverage and editorial
excellence. It also provides an important complement to our news and current
awareness services, and enhances our position in the business news and corporate
market segments," he added.
THOMSON TO ACQUIRE NEWSEDGE
Page 2
August 7, 2001
NewsEdge is a US$71 million provider of real-time news and information
products and services to approximately 1,500 corporations and professional
service firms worldwide. NewsEdge combines proprietary technology, content and
specialized editorial processes to deliver tailored information and
decision-support solutions to knowledge workers through its information products
and content solutions. Thomson plans to align NewsEdge with The Dialog
Corporation, a leading provider of online information services for business,
science, engineering, finance and law professionals, as part of the Thomson
Legal & Regulatory market group. NewsEdge will continue to be run by its current
management team, headed by President and Chief Executive Officer Clifford M.
Pollan, a long-time information services executive.
Roy Martin, president and chief executive officer of Dialog, said NewsEdge
is seen as a key to supporting the Thomson strategy of integrating its
information and technology tools within the infrastructure of its customers. "In
today's business environment, critical decisions are only as good as the
information they are based on," said Martin. "NewsEdge's unique strength in
developing enterprise content and decision-support solutions helps its customers
more easily navigate and unlock the unrealized value of all of their information
assets, shaping the strategies and decisions that drive the success of the
organization."
NewsEdge President and Chief Executive Officer Pollan said, "Today's
announcement signals a new future for NewsEdge, giving us new resources and an
even stronger presence in the corporate enterprise market. By leveraging the
strength, technology and reputation of The Thomson Corporation across our lines
of business, we can deliver even greater value to our customers, our partners
and our employees."
THOMSON TO ACQUIRE NEWSEDGE
Page 3
August 7, 2001
The closing of the offer, which is expected to be completed during the
second half of the year, is conditioned upon the tender of a majority of
NewsEdge's shares and customary closing conditions. All of NewsEdge's directors
and certain of the executive officers, as well as a significant shareholder of
NewsEdge, have pledged to tender their shares in the offer and/or vote in favor
of the Thomson acquisition. NewsEdge was advised by Broadview Associates LLC,
which rendered a fairness opinion to its board.
The offer will be followed by a back-end merger of the Thomson subsidiary
with and into NewsEdge on the same terms as those in the offer and will be
subject to customary closing conditions. The offer is expected to commence as
soon as practicable following filing of required documents with the Securities
and Exchange Commission.
This news release is for informational purposes only. It does not
constitute an offer to purchase shares of NewsEdge or a
solicitation/recommendation statement under the rules and regulations of the
Securities and Exchange Commission. At the time Thomson commences the offer,
Thomson will file with the Securities and Exchange Commission a tender offer
statement on Schedule TO and NewsEdge will file a solicitation/recommendation
statement on Schedule 14D-9. These documents will contain important information
and security holders of NewsEdge are advised to carefully read these documents
(when they become available) before making any decision with respect to the
tender offer. These documents will be provided to NewsEdge security holders at
no expense to them and, when filed with the Securities and Exchange Commission,
may be obtained free at www.sec.gov.
ABOUT THE THOMSON CORPORATION
The Thomson Corporation (TSE: TOC), with 2000 revenues of approximately
$6.0 billion, is a leading global e-information and solutions company in the
business and professional marketplace. The Corporation's common shares are
listed on the Toronto and London stock exchanges. For more information, visit
The Thomson Corporation at www.thomson.com.
THOMSON TO ACQUIRE NEWSEDGE
Page 4
August 7, 2001
ABOUT DIALOG
Dialog (www.dialog.com) is the worldwide leader in providing online-based
information services to organizations seeking competitive advantages in such
fields as business, science, engineering, finance and law. Its products and
services, such as Dialog(R), Profound(R) and DataStar(TM), offer organizations
the ability to precisely retrieve data from more than 6 billion pages of key
information, accessible via the Internet or through delivery to enterprise
intranets. For almost three decades, Dialog's brands have been known for their
breadth and depth of content, precision searching and speed. Headquartered in
Cary, N.C., U.S.A., with offices around the world, Dialog products are used by
more than 100,000 professional researchers in more than 100 countries.
ABOUT NEWSEDGE
NewsEdge Corporation (NASDAQ: NEWZ) is a global provider of content
solutions for business. Its customers include both content creators and the
operators of the world's most active Web sites. NewsEdge offers technology and
services for its customers to create, manage and deploy content for millions of
end-users through enterprise sites, portals, publisher Web sites and
distribution channels. NewsEdge services make organizations smarter, attract
specialized audiences, foster high-frequency usage, promote Web site
"stickiness" and ultimately cultivate commerce. NewsEdge serves thousands of
sites and companies with highly targeted content solutions from the NewsEdge
Refinery(TM), including industry-specific topics, wireless services, turn-key
permission marketing and publishing tools, outsourced editorial capabilities and
sub-second live news feeds and applications. The NewsEdge Refinery combines a
patented combination of sophisticated technology and human editorial review to
deliver highly targeted news on more than 2,000 business topics from more than
2,000 sources. NewsEdge is headquartered in Burlington, Mass., with offices and
distributors throughout North America, South America, Europe, Japan and the
Middle East. For more information about NewsEdge Corporation, visit
www.NewsEdge.com.
Certain statements made herein are forward-looking statements under the Private
Securities Litigation Reform Act of 1995. They include statements regarding
expected benefits of the NewsEdge acquisition. These statements are based on
management's current expectations and estimates; actual results may differ
materially due to certain risks and uncertainties. For example, Thomson's
ability to achieve expected results may be affected by competitive price
pressures, inability to successfully integrate NewsEdge's operations, failure of
the transaction to close due to the inability to obtain regulatory or other
approvals, failure of NewsEdge shareholders to tender shares or to approve the
merger, if that approval is necessary, inability of the combined company to
retain key executives and other personnel, conditions of the economy, industry
growth and internal factors, such as the ability to control expenses. For a
discussion of additional factors affecting Thomson, see the Thomson Annual
Report on Form 40-F for the fiscal year ended December 31, 2000 as filed with
the Securities and Exchange Commission.
- 30 -
[THE THOMSON CORPORATION LETTERHEAD]
NEWS RELEASE
INVESTOR CONTACTS: MEDIA CONTACTS:
John Kechejian Jason Stewart David Scott
Vice President, Investor Relations Director, Corporate Communications Vice President, Marketing
The Thomson Corporation The Thomson Corporation NewsEdge Corp.
(203) 328-9470 (203) 328-8339 (781) 229-3000
john.kechejian@thomson.com jason.stewart@thomson.com david.scott@newsedge.com
Ron Benanto
Vice President, CFO
NewsEdge Corp.
(781) 229-3000
ron.benanto@newsedge.com
For Immediate Release
THE THOMSON CORPORATION ANNOUNCES
COMMENCEMENT OF CASH TENDER OFFER FOR
NEWSEDGE CORPORATION
TORONTO, August 21, 2001 - The Thomson Corporation (TSE: TOC) announced today
that its indirect wholly owned subsidiary, InfoBlade Acquisition Corporation
(InfoBlade), has commenced a cash tender offer for all of the issued and
outstanding shares of NewsEdge Corporation (NASDAQ: NEWZ) common stock.
The cash tender offer is being made in connection with the proposed merger of
InfoBlade and NewsEdge pursuant to an Agreement and Plan of Merger dated as of
August 6, 2001 among Thomson, InfoBlade and NewsEdge. In accordance with the
Merger Agreement, InfoBlade today has commenced a cash tender offer for all of
the issued and outstanding shares of NewsEdge common stock at a price of
US$2.30 per share. If the proposed merger is consummated, NewsEdge will become
an indirect wholly owned subsidiary of Thomson. The NewsEdge board of directors
has unanimously voted to recommend that NewsEdge stockholders accept the cash
tender offer.
-more-
The cash tender offer is subject to the tender of at least a majority of
NewsEdge shares and other customary conditions. The cash tender offer and
withdrawal rights will expire at 12:00 Midnight (E.D.T.), on September 18, 2001,
unless extended.
InfoBlade and Thomson are mailing today to registered holders of NewsEdge shares
an Offer to Purchase regarding the cash tender offer, the NewsEdge
Solicitation/Recommendation Statement on Schedule 14D-9, and a Letter of
Transmittal to be used to tender NewsEdge shares in the cash tender offer.
Beneficial owners of NewsEdge holding shares in "street name" through their
brokers may receive the Offer to Purchase and Letter of Transmittal through the
Information Agent, Innisfree M&A Incorporated, by calling toll free 1-888-750-
5834. The Depositary for the cash tender offer is Computershare Trust Company of
New York.
This news release is for informational purposes only. It does not constitute
an offer to purchase shares of NewsEdge or a Solicitation/Recommendation
Statement under the rules and regulations of the Securities and Exchange
Commission. Thomson has filed with the Securities and Exchange Commission a
Tender Offer Statement on Schedule TO and NewsEdge has filed a
Solicitation/Recommendation Statement on Schedule 14D-9. These documents
contain important information and security holders of NewsEdge are advised to
carefully read these documents before making any decision with respect to the
cash tender offer. These documents may be obtained free at the
Securities and Exchange Commission's website at www.sec.gov. Persons with
questions regarding the offer should contact the Information Agent at (888)
750-5834.
ABOUT THE THOMSON CORPORATION
The Thomson Corporation, with 2000 revenues of approximately $6.0 billion,
is a leading global e-information and solutions company in the business and
professional marketplace. The Corporation's common shares are listed on the
Toronto and London stock exchanges. For more information, visit The Thomson
Corporation at www.thomson.com.
###
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
THE THOMSON CORPORATION
INFOBLADE ACQUISITION CORPORATION
AND
NEWSEDGE CORPORATION
DATED AS OF AUGUST 6, 2001
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS
SECTION 1.01. Definitions.....................................................2
ARTICLE II THE OFFER
SECTION 2.01. The Offer.......................................................7
SECTION 2.02. Company Action..................................................9
ARTICLE III THE MERGER
SECTION 3.01. The Merger.....................................................10
SECTION 3.02. Effective Time; Closing........................................10
SECTION 3.03. Effect of the Merger...........................................11
SECTION 3.04. Certificate of Incorporation; By-laws..........................11
SECTION 3.05. Directors and Officers.........................................11
SECTION 3.06. Conversion of Securities.......................................12
SECTION 3.07. Employee Stock Options; Employee Stock Purchase Plan...........12
SECTION 3.08. Warrants.......................................................13
SECTION 3.09. Dissenting Shares..............................................13
SECTION 3.10. Surrender of Shares; Stock Transfer Books......................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Organization and Qualification; Subsidiaries...................16
SECTION 4.02. Certificate of Incorporation and By-laws.......................16
SECTION 4.03. Capitalization.................................................17
SECTION 4.04. Authority Relative to This Agreement...........................18
SECTION 4.05. No Conflict; Required Filings and Consents.....................18
SECTION 4.06. Permits; Compliance............................................19
SECTION 4.07. SEC Filings; Financial Statements..............................20
SECTION 4.08. Absence of Certain Changes or Events...........................21
SECTION 4.09. Absence of Litigation..........................................21
SECTION 4.10. Employee Benefit Plans.........................................21
SECTION 4.11. Labor and Employment Matters...................................24
SECTION 4.12. Offer Documents; Schedule 14D-9; Proxy Statement...............26
SECTION 4.13. Property and Leases............................................26
SECTION 4.14. Intellectual Property..........................................27
SECTION 4.15. Taxes..........................................................30
SECTION 4.16. Environmental Matters..........................................31
SECTION 4.17. Material Contracts.............................................31
SECTION 4.18. Insurance......................................................34
SECTION 4.19. Brokers........................................................34
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.01. Corporate Organization.........................................35
SECTION 5.02 Authority Relative to This Agreement............................35
SECTION 5.03. No Conflict; Required Filings and Consents.....................35
SECTION 5.04. Financing......................................................36
SECTION 5.05. Offer Documents; Proxy Statement...............................36
SECTION 5.06. Brokers........................................................37
SECTION 5.07. Performance....................................................37
SECTION 5.08. Litigation.....................................................37
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. Conduct of Business by the Company Pending the Merger..........37
ARTICLE VII ADDITIONAL AGREEMENTS
SECTION 7.01. Stockholders' Meeting..........................................40
SECTION 7.02. Proxy Statement................................................41
SECTION 7.03. Company Board Representation; Section 14(f)....................41
SECTION 7.04. Access to Information; Confidentiality.........................42
SECTION 7.05. No Solicitation of Transactions................................43
SECTION 7.06. Employee Benefits Matters......................................44
SECTION 7.07. Directors' and Officers' Indemnification and Insurance.........44
SECTION 7.08. Notification of Certain Matters................................45
SECTION 7.09. Further Action; Reasonable Best Efforts........................45
SECTION 7.10. Public Announcements...........................................46
ARTICLE VIII CONDITIONS TO THE MERGER
SECTION 8.01. Conditions to the Merger.......................................46
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. Termination....................................................47
SECTION 9.02. Effect of Termination..........................................48
SECTION 9.03 Fees and Expenses...............................................48
SECTION 9.04. Amendment......................................................50
SECTION 9.05. Waiver.........................................................50
ARTICLE X GENERAL PROVISIONS
SECTION 10.01 Notices........................................................50
SECTION 10.02. Severability..................................................51
SECTION 10.03. Entire Agreement; Assignment..................................52
SECTION 10.04. Parties in Interest...........................................52
SECTION 10.05. Specific Performance..........................................52
SECTION 10.06. Governing Law.................................................52
SECTION 10.07. Waiver of Jury Trial..........................................52
SECTION 10.08. Headings......................................................53
SECTION 10.09. Counterparts..................................................53
ANNEX A - CONDITIONS TO THE OFFER
SCHEDULES
SCHEDULE I - SELLING STOCKHOLDERS
SCHEDULE II - OFFICERS
EXHIBIT A - AMENDED EMPLOYMENT AGREEMENTS
DISCLOSURE SCHEDULE
AGREEMENT AND PLAN OF MERGER, dated as of August 6, 2001 (this
"Agreement"), among THE THOMSON CORPORATION, a corporation incorporated under
the laws of the Province of Ontario (the "Parent"), INFOBLADE ACQUISITION
CORPORATION, a Delaware corporation and an indirect wholly owned subsidiary of
Parent ("Purchaser"), and NEWSEDGE CORPORATION, a Delaware corporation (the
"Company").
WHEREAS, the Parent and the respective Boards of Directors of
Purchaser and the Company have each determined that it is in the best interests
of their respective stockholders for Parent to acquire the Company upon the
terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, it is proposed that
Purchaser shall make a cash tender offer (the "Offer") to acquire all the shares
of common stock, par value $0.01 per share, of the Company ("Shares") that are
issued and outstanding for $2.30 per Share (such amount, or any greater amount
per Share paid pursuant to the Offer, being the "Per Share Amount"), net to the
seller in cash, upon the terms and subject to the conditions of this Agreement
and the Offer;
WHEREAS, the Board of Directors of the Company (the "Board") has
unanimously approved the making of the Offer and resolved to recommend that
holders of Shares tender their Shares pursuant to the Offer;
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Purchaser and the Company have each approved this Agreement and
declared its advisability and approved the merger (the "Merger") of Purchaser
with and into the Company in accordance with the General Corporation Law of the
State of Delaware ("Delaware Law"), following the consummation of the Offer and
upon the terms and subject to the conditions set forth herein;
WHEREAS, Parent, Purchaser and certain of the stockholders of the
Company set forth in Schedule I hereto (the "Selling Stockholders") have entered
into stockholder agreements, dated as of the date hereof (the "Stockholder
Agreement"), providing that, among other things, such Selling Stockholders
shall (i) tender their Shares into the Offer and (ii) vote their Shares in favor
of the Merger and, if applicable, in each case on the terms and subject to the
conditions set forth therein; and
WHEREAS, the Company and each of the officers of the Company set
forth in Schedule II hereto (the "Officers") have entered into an amended and
restated employment agreement dated as of the date hereof and in the form of
Exhibit A hereto (the "Amended Employment Agreements").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) For purposes of this Agreement:
"ACQUISITION PROPOSAL" means (i) any proposal or offer from any
person other than Parent or Purchaser regarding any direct or indirect
acquisition of (A) all or a substantial part of the assets of the Company or of
any Subsidiary or (B) over 15% of any class of equity securities of the Company
or of any Subsidiary; (ii) any tender offer or exchange offer, as defined
pursuant to the Exchange Act, that, if consummated, would result in any person
beneficially owning 15% or more of any class of equity securities of the Company
or any Subsidiary; or (iii) any proposal or offer from any person other than
Parent or Purchaser regarding any merger, consolidation, business combination,
sale of all or a substantial part of the assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any Subsidiary,
other than the Transactions.
"AFFILIATE" of a specified person means a person who, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified person.
"BENEFICIAL OWNER", with respect to any Shares, means a person who
shall be deemed to be the beneficial owner of such Shares (i) which such person
or any of its affiliates or associates (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) beneficially owns, directly or indirectly,
(ii) which such person or any of its affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject to the passage of time or other conditions), pursuant to
any agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding or (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates or person with whom such person or
any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
Shares.
"BROADVIEW" means Broadview International, LLC.
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"BUSINESS DAY" means any day on which banks are not required or
authorized to close in the City of New York.
"COMPANY INDEBTEDNESS" shall mean all obligations and liabilities
created, issued or incurred by the Company or any Subsidiary for borrowed money
(excluding any trade payable incurred in the ordinary course of business and
consistent with past practice) or long-term debt, including without limitation,
bank loans, mortgages, notes payable, purchase money installment debt, capital
lease obligations, guarantees of indebtedness of others, loans from stockholders
or other affiliates of the Company or any Subsidiary (excluding any expense
reimbursement owed to employees of the Company as a result of travel and other
activities in the ordinary course of business and consistent with past
practice), and all principal, interest, fees, prepayment penalties or amounts
due or owing with respect thereto.
"CONTROL" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise.
"ENVIRONMENTAL LAWS" means any Laws relating to (i) releases or
threatened releases of Hazardous Substances or materials containing Hazardous
Substances; (ii) the manufacture, handling, transport, use, treatment, storage
or disposal of Hazardous Substances or materials containing Hazardous
Substances; or (iii) pollution or protection of the environment, health, safety
or natural resources.
"HAZARDOUS SUBSTANCES" means (i) those substances defined in or
regulated under the following United States federal Laws and their state
counterparts, as each may be amended from time to time, and all regulations
thereunder: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and Rodenticide
Act and the Clean Air Act; (ii) petroleum and petroleum products, including
crude oil and any fractions thereof; (iii) natural gas, synthetic gas, and any
mixtures thereof; (iv) polychlorinated biphenyls, asbestos or asbestos
containing materials, lead and lead-based paint; (v) any other contaminant; and
(vi) any substance, material or waste regulated by any Governmental Authority
pursuant to any Environmental Law.
"INTELLECTUAL PROPERTY" means (i) United States, non-United States,
and international patents, patent applications and statutory invention
registrations, (ii) trademarks, service marks, trade dress, logos, trade names,
corporate names and other
3
source identifiers, and registrations and applications for registration thereof,
(iii) copyrightable works, copyrights, and registrations and applications for
registration thereof, (iv) confidential and proprietary information, including
trade secrets, technical information and know-how, (v) Software, (vi) domain
names, URLs, world wide web pages, internet and intranet sites (including all
content thereof), together with member or user lists and information associated
therewith, and (vii) customer lists, confidential marketing and customer
information.
"KNOWLEDGE OF THE COMPANY" means the knowledge of any of the
Officers.
"MATERIAL ADVERSE EFFECT" means, when used in connection with the
Company or any Subsidiary, any event, circumstance, change or effect that is or
is reasonably likely to be materially adverse to the business, prospects,
financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole (it being understood, that (i) the Company's
receipt of notification from the Nasdaq - AMEX Market Group of the Company's
pending delisting from the Nasdaq National Market or the Company's actual
delisting from the Nasdaq National Market will not, in either case constitute a
Material Adverse Effect, (ii) any adverse effect that is caused by conditions
affecting the economy or securities markets generally shall not be taken into
account in determining whether there has been a Material Adverse Effect, (iii)
any adverse effect that is caused by conditions affecting the primary industry
in which the Company currently competes shall not be taken into account in
determining whether there has been a Material Adverse Effect (provided that such
effect does not affect the Company in a disproportionate manner), (iv) any
adverse effect resulting from the Offer, the Merger or any of the Transactions
or the announcement thereof and (v) any adverse effect to the extent
attributable to the Action (as defined in Section 4.09) set forth as item 1 in
Section 4.09 of the Disclosure Schedule, shall not be taken into account in
determining whether there has been a Material Adverse Effect).
"PERSON" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),
trust, association or entity or government, political subdivision, agency or
instrumentality of a government.
"SOFTWARE" means computer software, programs and databases in any
form, including source code, object code, operating systems and specifications,
data, databases, database management code, utilities, graphical user interfaces,
menus, images, icons, forms, methods of processing, software engines, platforms,
and data formats, all versions, updates, corrections, enhancements, and
modifications thereof, and all related documentation, developer notes, comments
and annotations.
4
"SUBSIDIARY" OR "SUBSIDIARIES" of the Company means any affiliate
controlled by the Company, directly or indirectly, through one or more
intermediaries.
"SUPERIOR PROPOSAL" means any Acquisition Proposal not solicited,
initiated or encouraged in violation of Section 7.05(a) made by a third person
on terms which, the Board determines, in its good faith judgment, after having
received the advice of Broadview or another financial advisor of nationally
recognized reputation after taking into account all of the terms and conditions
of such Acquisition Proposal and the ability of the third person making such
Acquisition Proposal to consummate it, that the proposed transaction would be
more favorable from a financial point of view to the stockholders of the Company
than the Offer and the Merger and the Transactions.
"TAXES" shall mean any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any Governmental Authority or taxing authority, including, without
limitation: taxes or other charges on or with respect to income, franchise,
windfall or other profits, gross receipts, property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value-added or gains taxes; license,
registration and documentation fees; and customers' duties, tariffs and similar
charges.
(b) The following terms have the meaning set forth in the Sections
set forth below:
Defined Term Location of Definition
------------ ----------------------
Action 4.09
Agreement Preamble
Amended Employment Agreements Recitals
Blue Sky Laws 4.05(b)
Board Recitals
Certificate of Merger 3.02
Certificates 3.10(b)
Code 4.10(a)
Company Preamble
Company Licensed Intellectual Property 4.14(a)
Company Owned Intellectual Property 4.14(a)
Company Preferred Stock 4.03
Company Stock Option Plans 3.07(a)
Confidentiality Agreement 7.04(b)
Delaware Law Recitals
Disclosure Schedule Article IV
5
Defined Term Location of Definition
------------ ----------------------
Dissenting Shares 3.09(a)
Effective Time 3.02
Environmental Permits 4.16
ERISA 4.10(a)
ESPP 3.07(b)
ESPP Date 3.07(b)
Exchange Act 2.01(a)
Fee 9.03(a)
GAAP 4.07(b)
Governmental Authority 4.05(b)
IRS 4.10(a)
June 30 Financials 4.07(b)
Law 4.05(a)
Liens 4.13(b)
Material Contracts 4.17(a)
Merger Recitals
Merger Consideration 2.01(a)
Minimum Condition 2.01(a)
Multiemployer Plan 4.10(b)
Multiple Employer Plan 4.10(b)
Non-U.S. Benefit Plan 4.10(h)
Number of Optioned Shares 3.07(b)
Offer Recitals
Offer Documents 2.01(b)
Offer to Purchase 2.01(b)
Officers Recitals
Option 3.07(a)
Parent Preamble
Paying Agent 3.10(a)
Payment Fund 3.10(a)
Permits 4.06
Permitted Investments 3.10(a)
Permitted Liens 4.13(b)
Per Share Amount Recitals
Plans 4.10(a)
Proxy Statement 4.12
Purchaser Preamble
Schedule14D-9 2.02(b)
Schedule TO 2.01(b)
SEC 2.01(a)
SEC Reports 4.07(a)
Securities Act 4.07(a)
Selling Stockholders Recitals
6
Defined Term Location of Definition
------------ ----------------------
Shares Recitals
Standard Form Confidentiality Agreement 4.11(d)
Stockholder Agreement Recitals
Stockholders' Meeting 7.01(a)
Surviving Corporation 3.03
Transactions 2.02(a)
Warrants 4.03
2000 Balance Sheet 4.07(c)
ARTICLE II
THE OFFER
SECTION 2.01. THE OFFER. (a) Provided that none of the events set
forth in paragraphs (d)(ii) and (h) of Annex A shall have occurred, Purchaser
shall commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) the Offer as promptly as
reasonably practicable after the date hereof but in no event later than ten (10)
Business Days after the public announcement (on the date hereof or the following
Business Day) of the execution of this Agreement. The obligation of Purchaser to
accept for payment Shares tendered pursuant to the Offer shall be subject only
to (i) the condition (the "Minimum Condition") that at least the number of
Shares that shall constitute a majority of the then outstanding Shares on a
fully diluted basis (including, without limitation, all Shares issuable upon the
conversion of any convertible securities or upon the exercise of any options,
warrants or rights, but excluding Options and Warrants owned by the Selling
Stockholders) shall have been validly tendered and not withdrawn prior to the
expiration of the Offer and (ii) the satisfaction of each of the other
conditions set forth in Annex A hereto. Purchaser expressly reserves the right
to waive any such condition (other than the Minimum Condition), to increase the
price per Share payable in the Offer, and to make any other amendments or
changes in the terms and conditions of the Offer; provided, however, that no
amendment or change may be made which decreases the price per Share payable in
the Offer, which reduces the maximum number of Shares to be purchased in the
Offer or which imposes conditions to the Offer in addition to those set forth in
Annex A hereto. Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, (i) extend the Offer beyond the initial scheduled
expiration date, which shall be 20 Business Days following the commencement of
the Offer or any extended expiration date of the Offer, if, at the initial
scheduled expiration of the Offer or any extended expiration date of the Offer,
any of the conditions to Purchaser's obligation to accept for payment Shares,
shall not be satisfied or waived until such time as such conditions are
satisfied or waived; provided that Purchaser shall only be permitted three (3)
extensions of the Offer pursuant to this clause (i) for periods of up to five
(5) Business Days for each such extension, it
7
being understood that if the conditions to Purchaser's obligations to accept for
payment Shares are satisfied or waived during an extension, no further
extensions pursuant to this clause (i) shall be permitted or (ii) extend the
Offer for any period required by any rule, regulation or interpretation of the
Securities and Exchange Commission (the "SEC"), or the staff thereof, applicable
to the Offer. The Per Share Amount shall, subject to applicable withholding of
taxes, be net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Subject to the terms of the Offer and this Agreement
and the satisfaction (or waiver to the extent permitted by this Agreement) of
the conditions to the Offer, Purchaser shall accept for payment all Shares
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after the applicable expiration date of the Offer and Purchaser shall pay for
all Shares validly tendered and not withdrawn promptly following the acceptance
of Shares for payment pursuant to the Offer. Notwithstanding the immediately
preceding sentence and subject to the applicable rules of the SEC and the terms
and conditions of the Offer, Purchaser expressly reserves the right to delay
payment for Shares in order to comply in whole or in part with applicable laws.
Any such delay shall be effected in compliance with Rule 14e-1(c) under the
Exchange Act. If the payment equal to the Per Share Amount in cash (the "Merger
Consideration") is to be made to a person other than the person in whose name
the surrendered certificate formerly evidencing Shares is registered on the
stock transfer books of the Company, it shall be a condition of payment that the
certificate so surrendered shall be endorsed properly or otherwise be in proper
form for transfer and that the person requesting such payment shall have paid
all transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the certificate
surrendered, or shall have established to the satisfaction of Purchaser that
such taxes either have been paid or are not applicable. Purchaser may, in its
sole discretion, provide a "subsequent offering period" as contemplated by Rule
14d-11 under the Exchange Act following acceptance for payment of Shares in the
Offer. Parent shall provide or cause to be provided to Purchaser on a timely
basis the funds necessary to accept for payment, and pay for, any Shares that
Purchaser becomes obligated to accept for payment and pay for, pursuant to the
Offer.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, Parent and Purchaser shall (i) file with the SEC a
Tender Offer Statement on Schedule TO (together with all amendments and
supplements thereto, the "Schedule TO") with respect to the Offer which shall
contain or shall incorporate by reference an offer to purchase (the "Offer to
Purchase") and forms of the related letter of transmittal and any related
summary advertisement (the Schedule TO, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being referred
to herein collectively as the "Offer Documents"), (ii) deliver a copy of the
Schedule TO to the Company at its principal executive office, (iii) give
telephonic notice and mail to the National Association of Securities Dealers,
Inc. (the "NASD") a copy of the Schedule TO in accordance with Rule 14d-3
promulgated under the Exchange Act, and (iv) mail the Offer Documents to the
holders of Shares. Parent, Purchaser and the Company agree to correct promptly
any information provided by any of them for use in the Offer Documents that
shall have become false or misleading, and
8
Parent and Purchaser further agree to take all steps necessary to cause the
Schedule TO, as so corrected, to be filed with the SEC, and the other Offer
Documents, as so corrected, to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws. Parent
and Purchaser shall give the Company and its counsel a reasonable opportunity to
review and comment on the Schedule TO prior to the filing thereof with the SEC
or its dissemination to the Company's stockholders. Parent and Purchaser shall
provide the Company and its counsel with any comments, written or oral, Parent
or Purchaser or their counsel may receive from the SEC or its staff with respect
to the Offer Documents promptly after the receipt of such comments and any
written responses thereto.
(c) In the event the Agreement has been terminated pursuant to
Section 9.01, Purchaser will terminate the Offer (in accordance with all
applicable laws) without accepting any Shares for payment.
SECTION 2.02. COMPANY ACTION. (a) The Company hereby approves of and
consents to the Offer and represents that (i) the Board, at a meeting duly
called and held on August 6, 2001, has unanimously (A) determined that this
Agreement and the transactions contemplated hereby, including each of the Offer
and the Merger, and the transactions contemplated by the Stockholder Agreement
(collectively, the "Transactions"), are fair to, and in the best interests of,
the holders of Shares, (B) approved, adopted and declared advisable this
Agreement and the Transactions (such approval and adoption having been made in
accordance with Delaware Law including, without limitation, Section 203 thereof
and (C) resolved to recommend that the holders of Shares accept the Offer and
tender their Shares pursuant to the Offer, and approve and adopt this Agreement,
and (ii) Broadview has delivered to the Board a written opinion that the
consideration to be received by the holders of Shares pursuant to each of the
Offer and the Merger is fair to the holders of Shares from a financial point of
view. The Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board described in the immediately preceding sentence, and
the Company shall not withhold, withdraw, amend, change or modify such
recommendation in any manner adverse to Purchaser or Parent except as provided
in Section 7.05(b). The Company has been advised by the Selling Stockholders
that they intend to tender all Shares beneficially owned by them to Purchaser
pursuant to the Offer and to vote the Shares held by them in favor of the
approval and adoption of this Agreement pursuant to their Stockholder
Agreement.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, except as
provided in Section 7.05(b), the recommendation of the Board described in
Section 2.02(a), and shall disseminate the Schedule 14D-9 to the extent required
by Rule 14d-9 promulgated under the Exchange Act, and any other applicable
federal securities laws.
9
The Company, Parent and Purchaser agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 which shall have become
false or misleading, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9, as so corrected, to be filed with the SEC and
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. The Company shall give Parent and its
counsel a reasonable opportunity to review and comment on the Schedule 14D-9
prior to filing thereof with the SEC or its dissemination to the Company's
stockholders. The Company shall provide Parent, Purchaser and their counsel with
any comments, written or oral, the Company or its counsel may receive from the
SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt
of such comments and any written responses thereto.
(c) The Company shall promptly furnish or cause to be furnished to
Purchaser mailing labels containing the names and addresses of all record
holders of Shares and with security position listings of Shares held in stock
depositories, each as of a recent date, together with all other available
listings and computer files containing names, addresses and security position
listings of record holders and beneficial owners of Shares as Purchaser or its
agents may request in disseminating the Offer Documents to the Company's
stockholders. The Company shall promptly furnish or cause to be furnished to
Purchaser such additional information, including, without limitation, updated
listings and computer files of stockholders, mailing labels and security
position listings, and such other assistance in disseminating the Offer
Documents to holders of Shares as Parent or Purchaser may reasonably request.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer or the Merger, Parent and Purchaser shall hold in
confidence the information contained in such labels, listings and files, shall
use such information only in connection with the Transactions, and, if this
Agreement shall be terminated in accordance with Section 9.01, shall deliver or
cause to be delivered to the Company all copies of such information then in
their possession.
ARTICLE III
THE MERGER
SECTION 3.01. THE MERGER. Upon the terms and subject to the
conditions set forth in Article VIII, and in accordance with Delaware Law, at
the Effective Time, Purchaser shall be merged with and into the Company.
SECTION 3.02. EFFECTIVE TIME; CLOSING. Subject to the terms and
conditions of this Agreement as promptly as practicable after the satisfaction
or, if permissible, waiver of the conditions set forth in Article VIII, the
parties hereto shall cause the Merger to be consummated by filing a certificate
of merger (the "Certificate of Merger") with the Secretary of State of the State
of Delaware in such form as is required by, and executed in accordance with, the
relevant provisions of Delaware Law (the date
10
and time of such filing being the "Effective Time"). Prior to such filing, a
closing shall be held at the offices of Torys, 237 Park Avenue, New York, New
York 10017, or such other place as the parties shall agree, for the purpose of
confirming the satisfaction or waiver, as the case may be, of the conditions set
forth in Article VIII.
SECTION 3.03. EFFECT OF THE MERGER. As a result of the Merger, the
separate corporate existence of Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation"). At the Effective Time, the effect of the Merger shall be as
provided in the applicable provisions of Delaware Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
property, rights, privileges, powers and franchises of the Company and Purchaser
shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of the Company and Purchaser
shall become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation.
SECTION 3.04. CERTIFICATE OF INCORPORATION; BY-LAWS. (a) At the
Effective Time, subject to Section 7.07(a), the Certificate of Incorporation of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation; provided,
however, that, at the Effective Time, Article I of the Certificate of
Incorporation of the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is NewsEdge Corporation."
(b) Unless otherwise determined by Parent prior to the Effective
Time, and subject to Section 7.07(a), the By-laws of Purchaser, as in effect
immediately prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such By-laws.
SECTION 3.05. DIRECTORS AND OFFICERS. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of
Purchaser immediately prior to the Effective Time (which shall include the
officers of the Company immediately prior to the Effective Time) shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified or until their
earlier death, resignation or removal.
SECTION 3.06. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
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(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be canceled pursuant to Section 3.06(b)
and any Dissenting Shares (as hereinafter defined)) shall be canceled and shall
be converted automatically into the right to receive an amount equal to the
Merger Consideration payable, without interest, to the holder of such Share,
upon surrender, in the manner provided in Section 3.10, of the certificate that
formerly evidenced such Share (or in the case of a lost, stolen or destroyed
Certificate, upon delivery of an affidavit (and bond, if required) in the manner
provided in Section 3.10(c));
(b) Each Share held in the treasury of the Company and each Share
owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of
Parent or of the Company immediately prior to the Effective Time shall be
canceled without any conversion thereof and no payment or distribution shall be
made with respect thereto; and
(c) Each share of common stock, par value $0.01 per share, of
Purchaser issued and outstanding immediately prior to the Effective Time shall
be converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the Surviving
Corporation.
SECTION 3.07. EMPLOYEE STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLAN.
(a) Effective as of the Effective Time, the Company shall (i) terminate the
Company's Amended and Restated 1989 Stock Option Plan, 1995 Stock Plan, 1995
Non-Employee Director Stock Option Plan, 2000 Non-Officer and Non-Director Stock
Plan and Individual, Inc.'s 1996 Non-Employee Director Stock Option Plan (the
"1996 Option Plan"), each as amended through the date of this Agreement (the
"Company Stock Option Plans"), and (ii) cancel, at the Effective Time, each
outstanding option to purchase Shares granted under the Company Stock Option
Plans (each, an "Option") that is outstanding and unexercised as of such date.
Each holder of an Option that is outstanding and unexercised at the Effective
Time shall be entitled, to the extent any such option is exercisable, to receive
from the Surviving Corporation immediately after the Effective Time, in exchange
for the cancellation of such Option, an amount in cash equal to the excess, if
any, of (x) the Per Share Amount over (y) the per share exercise price of such
Option, multiplied by the number of Shares subject to such Option as of the
Effective Time. From and after the date of this Agreement, the Company shall not
accelerate or permit the acceleration of the vesting or exercisability of any
Options, other than with respect to certain Options that will vest upon the
closing of the Offer and solely to the extent expressly set forth in Section
4.03 of the Disclosure Schedule. Any such payment shall be subject to all
applicable federal, state and local tax withholding requirements.
(b) As of the last day of the payroll period immediately preceding
the Effective Time (the "ESPP Date"), all offering and purchase periods under
way under the Company's Employee Stock Purchase Plan (the "ESPP"), shall be
terminated and, as of the date of this Agreement, no new offering or purchase
periods shall be commenced. The Company shall take all necessary action,
including providing all required notices to participants, to ensure that the
rights of participants in the ESPP with respect to any such
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offering or purchase periods shall be determined by treating the ESPP Date as
the last day of such offering and purchase periods. The Company shall take all
actions as may be necessary in order to freeze the rights of the participants in
the ESPP, effective as of the date of this Agreement, to existing participants
and, to the extent permissible under the ESPP, existing participation levels. At
the ESPP Date, the Company shall terminate the ESPP and each participant's
rights thereunder shall terminate in exchange for a cash payment equal to the
excess of (i) the Per Share Amount multiplied by the number of Shares that the
participant's accumulated payroll deductions as of the ESPP Date could purchase,
at the option price under the ESPP, determined with reference only to March 1,
2001 and subject to the limitations set forth in the ESPP (the "Number of
Optioned Shares"), over (ii) the result of multiplying the Number of Optioned
Shares by such option price, subject to any applicable federal, state and local
tax withholding requirements.
SECTION 3.08. WARRANTS. At the Effective Time, the holder of each
Warrant (each as defined in Section 4.03) shall be entitled to receive, and
shall, upon surrender of such Warrant to Purchaser for cancellation, receive, in
settlement and cancellation thereof, an amount of cash, if any, equal to the
excess, if any, of (x) the Per Share Amount multiplied by the number of Shares
issuable upon exercise of such Warrant if such Warrant were exercised
immediately prior to the Effective Time with respect to all Shares remaining to
be exercised thereunder over (y) the exercise price of each such Warrant with
respect to all Shares remaining to be exercised thereunder, which payment shall
be made to each such Warrant holder as soon as practicable after the Effective
Time. The Company shall take all necessary action, including, without
limitation, providing notice to each holder of a Warrant, as required under and
in accordance with the terms of such Warrant, to effect the disposition of the
Warrants as contemplated by this Section 3.08 and the terms of such Warrant.
Upon surrender of such Warrants by the holders thereof, any Warrant not
surrendered for cancellation as provided above shall survive the Merger and
shall become a warrant to receive, upon payment of the exercise price provided
for therein, an amount of cash based on the Per Share Amount in accordance with
the merger adjustment provisions of each such Warrant.
SECTION 3.09. DISSENTING SHARES. (a) Notwithstanding any provision
of this Agreement to the contrary, Shares that are outstanding immediately prior
to the Effective Time and that are held by stockholders who shall have not voted
in favor of the Merger and who shall have demanded properly in writing appraisal
for such Shares in accordance with Section 262 of Delaware Law (collectively,
the "Dissenting Shares") shall not be converted into, or represent the right to
receive, the Merger Consideration. Such stockholders shall be entitled to
receive payment of the appraised value of such Shares held by them in accordance
with the provisions of such Section 262, except that all Dissenting Shares held
by stockholders who shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such Shares under such Section
262 shall thereupon be deemed to have been converted into, and to have become
exchangeable for, as of the Effective Time, the right to receive the Merger
13
Consideration, without any interest thereon, upon surrender, in the manner
provided in Section 3.10, of the certificate or certificates that formerly
evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and any
other instruments served pursuant to Delaware Law and received by the Company
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under Delaware Law. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle or settle any such demands.
SECTION 3.10. SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a) Prior
to the Effective Time, Purchaser shall designate a bank or trust company to act
as agent (the "Paying Agent") for the holders of Shares to receive the funds to
which holders of Shares shall become entitled pursuant to Section 3.06(a).
Purchaser shall deposit or shall cause to be deposited with the Paying Agent in
a separate fund established for the benefit of the holders of Shares, for
payment in accordance with this Article III, through the Paying Agent (the
"Payment Fund"), immediately available funds in amounts necessary to make the
payments pursuant to Section 3.06(a) to holders of Shares (other than the
Company or any Subsidiary or Parent, Purchaser or any other subsidiary of
Parent, or holders of Dissenting Shares). The Paying Agent shall, pursuant to
irrevocable instructions, pay the Merger Consideration out of the Payment Fund.
The Paying Agent shall invest portions of the Payment Fund as Parent directs in
obligations of or guaranteed by the United States of America, in commercial
paper obligations receiving the highest investment grade rating from both
Moody's Investors Services, Inc. and Standard & Poor's Corporation, or in
certificates of deposit, bank repurchase agreements or banker's acceptances of
commercial banks with capital exceeding $1,000,000,000 (collectively, "Permitted
Investments"); provided, however, that the maturities of Permitted Investments
shall be such as to permit the Paying Agent to make prompt payment to former
holders of the Shares entitled thereto as contemplated by this Section. All
earnings on Permitted Investments shall be the sole and exclusive property of
Parent and no part of the earnings shall accrue to the benefit of holders of
Shares. If for any reason the Payment Fund is inadequate to pay the amounts to
which holders of Shares shall be entitled, Parent and the Surviving Corporation
shall in any event be liable for payment thereof. The Payment Fund shall not be
used for any purpose except as expressly provided in this Agreement.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each person who was, at the Effective Time, a holder
of record of Shares entitled to receive the Merger Consideration pursuant to
Section 3.06(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon
14
surrender to the Paying Agent of a Certificate, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each Share formerly evidenced
by such Certificate, and such Certificate shall then be canceled. No interest
shall accrue or be paid on the Merger Consideration payable upon the surrender
of any Certificate for the benefit of the holder of such Certificate. If the
payment equal to the Merger Consideration is to be made to a person other than
the person in whose name the surrendered certificate formerly evidencing Shares
is registered on the stock transfer books of the Company, it shall be a
condition of payment that the Certificate so surrendered shall be endorsed
properly or otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other taxes required by
reason of the payment of the Merger Consideration to a person other than the
registered holder of the certificate surrendered, or shall have established to
the reasonable satisfaction of Purchaser that such taxes either have been paid
or are not applicable.
(c) In the event that any Certificates shall have been lost, stolen
or destroyed, the Paying Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that fact by the
holder thereof, the cash consideration payable with respect thereto pursuant to
Section 3.06; provided, however, that Parent may, in its reasonable discretion
and as a condition precedent to the issuance of such cash, require the owner of
such lost, stolen or destroyed Certificates to deliver a bond in such sum as it
may reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Paying Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
(d) At any time following the 180th day after the Effective Time,
Purchaser shall no longer be required to retain the Paying Agent and the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds which had been made available to the Paying Agent and not
disbursed to holders of Shares (including, without limitation, all interest and
other income received by the Paying Agent in respect of all funds made available
to it), and, thereafter, such holders shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat and other similar laws) only
with respect to any Merger Consideration that may be payable upon due surrender
of the Certificates held by them. Notwithstanding the foregoing, neither the
Surviving Corporation nor the Paying Agent shall be liable to any holder of a
Share for any Merger Consideration delivered in respect of such Share to a
public official pursuant to any abandoned property, escheat or other similar
law.
(e) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers of Shares on the records of the Company.
From and after the Effective Time, the holders of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law.
15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Parent and Purchaser to enter into this
Agreement, the Company hereby represents and warrants to Parent and Purchaser
that, except as otherwise disclosed in the disclosure schedule delivered to
Parent simultaneously herewith (the "Disclosure Schedule"):
SECTION 4.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. (a) Each
of the Company and each Subsidiary is a corporation duly organized, validly
existing and, to the extent applicable, in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted. The
Company and each Subsidiary is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its business makes such qualification or licensing necessary except where the
failure to be so qualified or licensed would not, individually or in the
aggregate, prevent or materially delay consummation of the Offer or have a
Material Adverse Effect.
(b) A true and complete list of all the Subsidiaries, together with
the jurisdiction of incorporation of each Subsidiary and the percentage of the
outstanding capital stock of each Subsidiary owned by the Company and each other
Subsidiary, is set forth in Section 4.01(b) of the Disclosure Schedule. Except
as disclosed in Section 4.01(b) of the Disclosure Schedule, the Company does not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity.
SECTION 4.02. CERTIFICATE OF INCORPORATION AND BY-LAWS. The Company
has heretofore furnished to Parent a complete and correct copy of the Second
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") and the By-laws or equivalent organizational documents, each as
amended to date, of the Company and each Subsidiary. Such Certificate of
Incorporation, By-laws or equivalent organizational documents are in full force
and effect. Neither the Company nor any Subsidiary is in violation of any of the
provisions of its Certificate of Incorporation, By-laws or equivalent
organizational documents.
SECTION 4.03. CAPITALIZATION. The authorized capital stock of the
Company consists of 35,000,000 Shares and 1,000,000 shares of preferred stock,
$0.01 value ("Company Preferred Stock"). As of the date hereof, (a) 18,621,403
Shares are issued and outstanding, all of which are validly issued, fully paid
and nonassessable, (b)
16
432,000 Shares are held in the treasury of the Company, (c) no Shares are held
by any Subsidiary, (d) 3,841,026 Shares are reserved for future issuance
pursuant to outstanding employee stock options or stock incentive rights granted
pursuant to the Company Stock Option Plans and (e) rights to purchase 19,579
Shares are outstanding pursuant to the ESPP. As of the date hereof, no shares of
Company Preferred Stock are issued and outstanding. Except as set forth in
Section 4.03 of the Disclosure Schedule and except (a) for the Stockholder
Agreement and (b) the warrants to purchase 801,497 Shares (the "Warrants") and
(c) the rights to purchase 19,579 Shares pursuant to the ESPP, there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock of the Company or
any Subsidiary or obligating the Company or any Subsidiary to issue or sell any
shares of capital stock of, or other equity interests in, the Company or any
Subsidiary. Section 4.03 of the Disclosure Schedule accurately sets forth
information regarding the holder, the exercise price, the grant date and the
number of underlying Shares issuable in respect of each Warrant and Option, and
in respect of each right to purchase Shares pursuant to the ESPP (through the
end of the ESPP's current offer period ending August 31, 2001) and the number of
underlying Shares issuable pursuant to vested Options as of the date hereof. All
Shares subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. No holder
of any Warrant shall be entitled to receive any securities of any kind or other
property, other than cash, if any, as, and to the extent, provided in Section
3.08 hereof. Section 4.03 of the Disclosure Schedule sets forth the number of
unvested or unexercisable Options that will accelerate upon the closing of the
Offer and the number of Shares issuable upon exercise thereof. Except with
respect to the Options referred to in the immediately preceding sentence, no
unvested or unexercisable Options will be vested or exercisable after the date
hereof except for Options that vest after the date hereof monthly pursuant to
their existing terms and which are exercisable for (x) no more than 137,599
Shares in the aggregate through December 31, 2001 and (y) no more than 38,433
Shares in the aggregate through December 31, 2001 with respect to Options with
an exercise price that is less than the Per Share Price. There are no Options
outstanding under the 1996 Option Plan other than Options exercisable for 5,000
Shares held by one of the Selling Stockholders. The total number of Shares
issuable pursuant to the exercise of all Options and Warrants held by all
Selling Stockholders is 1,797,665. There are no outstanding contractual
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any Shares or any other capital stock or other securities of the Company
or any Subsidiary or to provide funds to, or make any investment (in the form of
a loan, capital contribution or otherwise) in, any Subsidiary or any other
person. Each outstanding share of capital stock of each Subsidiary is duly
authorized, validly issued, fully paid and nonassessable, and each such share is
owned by the Company or another Subsidiary free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or any Subsidiary's voting rights, charges and
other encumbrances of any nature whatsoever.
17
SECTION 4.04. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and, subject in the case of the Merger, to
obtaining approval of the stockholders of the Company, if required, to
consummate the Transactions. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the Transactions have been duly
and validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the Transactions (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
then-outstanding Shares, if and to the extent required by applicable law, and
the filing and recordation of appropriate merger documents as required by
Delaware Law). This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Purchaser, constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or similar laws relating to
creditors' rights and general principles of equity. The Board has approved this
Agreement and the Transactions and such approvals are sufficient so that the
restrictions on business combinations set forth in Section 203(a) of Delaware
Law shall not apply to the Transactions.
SECTION 4.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of Incorporation or By-laws of the Company or equivalent
organizational documents of any Subsidiary, (ii) subject to obtaining approval
of the Company's stockholders described in Section 4.04 with respect to this
Agreement and compliance with the requirements described in 4.05(b) below,
conflict with or violate any United States or non-United States statute, law,
ordinance, regulation, rule, code, common law standard or obligation, executive
order, governmental directive, injunction, judgment, decree or other order
("Law") applicable to the Company or any Subsidiary or by which any property or
asset of the Company or any Subsidiary is bound or affected, or (iii) except as
set forth in Section 4.05(a)(iii) of the Disclosure Schedule, result in any
breach of or constitute a default (or an event which, with notice or lapse of
time or both, would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any property or asset of the Company or any Subsidiary is bound or
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, prevent or materially delay consummation of
the Offer or the Merger and would not have a Material Adverse Effect.
18
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any United States federal, state, county or local or non-United States
government, governmental, regulatory or administrative authority, agency,
instrumentality or commission or any court, tribunal, or judicial or arbitral
body (a "Governmental Authority"), except (i) for applicable requirements, if
any, of the Exchange Act, state securities or "blue sky" laws ("Blue Sky Laws"),
and filing and recordation of appropriate merger documents as required by
Delaware Law, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
individually or in the aggregate, would not prevent or materially delay
consummation of the Offer or the Merger and would not have a Material Adverse
Effect.
SECTION 4.06. PERMITS; COMPLIANCE. Each of the Company and the
Subsidiaries is in possession of all registrations, franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Authority necessary for
each of the Company or the Subsidiaries to own, lease and operate its properties
or to carry on its business as it is now being conducted (the "Permits"), except
where the failure to have, or the suspension or cancellation of, any of the
Permits, individually or in the aggregate, would not prevent or materially delay
consummation of the Offer or the Merger and would not have a Material Adverse
Effect. As of the date hereof, no suspension or cancellation of any of the
Permits is pending or, to the knowledge of the Company, threatened, except where
the failure to have, or the suspension or cancellation of, any of the Permits,
individually or in the aggregate, would not prevent or materially delay
consummation of the Offer or the Merger and would not have a Material Adverse
Effect. Neither the Company nor any Subsidiary is in conflict with, or in
default, breach or violation of, (a) any Law applicable to the Company or any
Subsidiary or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (b) any note, bond, mortgage, indenture, contract,
agreement, lease, license, Permit, franchise or other instrument or obligation
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any property or asset of the Company or any Subsidiary is bound,
except for any such conflicts, defaults, breaches or violations, individually or
in the aggregate, that would not prevent or materially delay consummation of the
Offer or the Merger and would not have a Material Adverse Effect.
SECTION 4.07. SEC FILINGS; FINANCIAL STATEMENTS. (a) The Company has
filed all forms, reports and documents required to be filed by it with the SEC
since January 1, 1998 and has heretofore delivered or made available to Parent,
in the form filed with the SEC, (i) its Annual Reports on Form 10-K for the
fiscal years ended December 31, 1998, 1999 and 2000, respectively, (ii) its
Quarterly Reports on Form 10-Q for the periods ended December 31, 2000 and March
31, 2001, (iii) all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held since April 30, 1998 and (iv) all
other forms including reports on Form 8-K and other registration statements
(other than Quarterly Reports on Form 10-Q not referred to in
19
clause (ii) above) filed by the Company with the SEC since January 1, 2000 (the
forms, reports and other documents referred to in clauses (i), (ii), (iii) and
(iv) above being, collectively, the "SEC Reports"). The SEC Reports (i) were
prepared in accordance with either the requirements of the Securities Act of
1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), or the Exchange Act, as the case may be, and
the rules and regulations promulgated thereunder, and (ii) did not, at the time
they were filed, or, if amended, as of the date of such amendment, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. No
Subsidiary is required to file any form, report or other document with the SEC.
(b) The Company has furnished to Parent the unaudited consolidated
balance sheet, the unaudited consolidated statement of operations and the
unaudited consolidated statement of cash flows of the Company and the
Subsidiaries as at June 30, 2001 and for the 6-month period then ended (the
"June 30 Financials"). Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the SEC Reports and the June 30
Financials was prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto), and each
fairly presents, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company and its consolidated
Subsidiaries as at the respective dates thereof and for the respective periods
indicated therein (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which would not, individually or in the
aggregate, have had, and would not have, a Material Adverse Effect).
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and its consolidated Subsidiaries as at December
31, 2000, including the notes thereto (the "2000 Balance Sheet"), neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except for liabilities and
obligations, incurred in the ordinary course of business and consistent with
past practice since December 31, 2000, which would not, individually or in the
aggregate, prevent or materially delay consummation of the Offer or the Merger
and would not, individually or in the aggregate, have a Material Adverse Effect.
(d) The Company has no Company Indebtedness.
(e) The Company has heretofore furnished to Parent complete and
correct copies of all amendments and modifications that have not been filed by
the Company with the SEC to all agreements, documents and other instruments that
previously had been filed by the Company with the SEC and are currently in
effect.
20
SECTION 4.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31,
2001, except as set forth in Section 4.08 of the Disclosure Schedule, or as
expressly contemplated by this Agreement, (a) the Company and the Subsidiaries
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice, (b) there has not been any Material Adverse
Effect, and (c) neither of the Company nor any Subsidiary has taken any action
that, if taken after the date of this Agreement, would constitute a breach of
any of the covenants set forth in Section 6.01.
SECTION 4.09. ABSENCE OF LITIGATION. Except as set forth in Section
4.09 of the Disclosure Schedule, there is no litigation, suit, claim, action,
proceeding or investigation (an "Action") pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary, or any property or
asset of the Company or any Subsidiary, before any Governmental Authority.
Neither the Company nor any Subsidiary nor any property or asset of the Company
or any Subsidiary is subject to any continuing order, writ, judgement,
injunction, consent decree, determination or award of, settlement agreement or
similar written agreement with, or, to the knowledge of the Company, continuing
investigation by, any Governmental Authority.
SECTION 4.10. EMPLOYEE BENEFIT PLANS. (a) Section 4.10(a) of the
Disclosure Schedule lists (i) all employee benefit plans (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements, to which the Company or any Subsidiary is a party, with respect to
which the Company or any Subsidiary has any obligation or which are maintained,
contributed to or sponsored by the Company or any Subsidiary for the benefit of
any current or former employee, officer or director of the Company or any
Subsidiary, (ii) each employee benefit plan for which the Company or any
Subsidiary could incur liability under Section 4069 of ERISA in the event such
plan has been terminated, (iii) any plan in respect of which the Company or any
Subsidiary could incur liability under Section 4212(c) of ERISA, and (iv) any
contracts or arrangements between the Company or any Subsidiary and any employee
of the Company or any Subsidiary including, without limitation, any contracts or
arrangements relating to a sale of the Company or any Subsidiary (collectively,
the "Plans"). The Company has furnished or made available to Purchaser a true
and complete copy of each Plan which is in writing or a written summary of the
material terms (including participants) of any Plan not in writing, and (i) each
trust or other funding arrangement, (ii) the most recent plan description, (iii)
the most recently filed Internal Revenue Service ("IRS") Form 5500, (iv) the
most recently received IRS determination letter for each such Plan, and (v) the
most recently prepared actuarial report and financial statement in connection
with each such Plan. Neither the Company nor any Subsidiary has any commitment,
(i) to create, incur liability with respect to or cause to exist any other
employee benefit plan, program or arrangement, (ii) to enter into any contract
or agreement to provide compensation or benefits to any individual, or (iii) to
modify, change or terminate any Plan, other than with respect to a
21
modification, change or termination required by this Agreement, ERISA or the
Internal Revenue Code of 1986, as amended (the "Code") or a modification or
change that would not materially increase the cost of maintaining such Plan.
(b) None of the Plans is a multiemployer plan (within the meaning of
Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan") or a single
employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for
which the Company or any Subsidiary could incur liability under Section 4063 or
4064 of ERISA (a "Multiple Employer Plan"). Except as set forth in Section
4.10(b) of the Disclosure Schedule, none of the Plans (i) provides for the
payment of separation, severance, termination or similar-type benefits to any
person, (ii) obligates the Company or any Subsidiary to pay separation,
severance, termination or similar-type benefits solely or partially as a result
of any transaction contemplated by this Agreement, or (iii) obligates the
Company or any Subsidiary to make any payment or provide any benefit as a result
of a "change in control", within the meaning of such term under Section 280G of
the Code. None of the Plans provides for or promises retiree medical, disability
or life insurance benefits to any current or former employee, officer or
director of the Company or any Subsidiary. Each of the Plans, other than
Non-U.S. Benefit Plans (defined below), is subject only to the Laws of the
United States or a political subdivision thereof.
(c) Each Plan is now and has always been operated in all material
respects in accordance with its terms and the requirements of all applicable
Laws including, without limitation, ERISA and the Code. The Company and the
Subsidiaries have performed all material obligations required to be performed by
them under, are not in any respect in default under or in violation of, and have
no knowledge of any default or violation by any party to, any Plan. No Action is
pending or, to the knowledge of the Company, threatened with respect to any Plan
(other than claims for benefits in the ordinary course) and, to the knowledge of
the Company, no fact or event exists that could give rise to any such Action.
(d) Each Plan that is intended to be qualified under Section 401(a)
of the Code or Section 401(k) of the Code has received a favorable determination
letter from the IRS that the Plan is so qualified and each trust established in
connection with any Plan which is intended to be exempt from federal income
taxation under Section 501(a) of the Code is so exempt, and no fact or event has
occurred since the date of such determination letter from the IRS to adversely
affect the qualified status of any such Plan.
(e) There has not been any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any
Plan which could subject the Company or any Subsidiary to any material
liability. Neither the Company nor any Subsidiary has incurred any material
liability under, arising out of or by operation of Title IV of ERISA (other than
liability for premiums to the Pension Benefit Guaranty Corporation arising in
the ordinary course), including, without
22
limitation, any liability in connection with (i) the termination or
reorganization of any employee benefit plan subject to Title IV of ERISA, or
(ii) the withdrawal from any Multiemployer Plan or Multiple Employer Plan, and
no fact or event exists which could give rise to any such liability.
(f) All contributions, premiums or payments required to be made with
respect to any Plan have been made on or before their due dates. All such
contributions have been fully deducted for federal income tax purposes.
(g) Any amount or economic benefit that could be received (whether
in cash or property or the vesting of property) by any current or former
director, officer, employee or consultant of the Company or any Subsidiary who
is a "disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any Plan, employment agreement or otherwise
as a result of the execution and delivery of this Agreement by the Company or
the consummation of the Merger or any other transaction contemplated by this
Agreement (including as a result of termination of employment on or following
the Effective Time) would not be characterized as an "excess parachute payment"
(as defined in Section 280G(b)(1) of the Code).
(h) In addition to the foregoing, with respect to each Plan that is
not subject to United States law (a "Non-U.S. Benefit Plan"):
(i) all employer and employee contributions to each Non-U.S.
Benefit Plan required by law or by the terms of such Non-U.S.
Benefit Plan have been made, or, if applicable, accrued in
accordance with normal accounting practices, and a pro rata
contribution for the period prior to and including the date of
this Agreement has been made or accrued;
(ii) no such Non-U.S. Benefit Plan is a defined benefit plan or
provides for or promises retiree medical, disability or life
insurance benefits to any current or former employee, officer
or director of the Company or any Subsidiary; and
(iii) each Non-U.S. Benefit Plan required to be registered has been
registered and has been maintained in good standing with
applicable regulatory authorities and is approved by any
applicable taxation authorities to the extent such approval is
required. Each Non-U.S. Benefit Plan is now and always has
been operated in full
23
compliance with all applicable non-United States laws and
regulations.
SECTION 4.11. LABOR AND EMPLOYMENT MATTERS. (a) There are no claims
pending or, to the knowledge of the Company, threatened between the Company or
any Subsidiary and any of their respective employees, which claims, individually
or in the aggregate, would prevent or materially delay consummation of the Offer
or the Merger or would have a Material Adverse Effect. Neither the Company nor
any Subsidiary is a party to any collective bargaining agreement, work council
agreement, work force agreement or other labor union contract applicable to
persons employed by the Company or any Subsidiary, nor, to the knowledge of the
Company, are there any activities or proceedings of any labor union to organize
any such employees. There are no unfair labor practice complaints pending
against the Company or any Subsidiary before the National Labor Relations Board,
any other court or tribunal or any current union representation questions
involving employees of the Company or any Subsidiary and there is no strike,
slowdown, work stoppage or lockout, or, to the knowledge of the Company, threat
thereof, by or with respect to any employees of the Company or any Subsidiary.
(b) The Company and the Subsidiaries are in compliance in all
material respects with all applicable Laws relating to employment and employment
practices, including those related to wages, hours, collective bargaining and
the payment and withholding of taxes and other sums as required by the
appropriate Governmental Authority and has withheld and paid to the appropriate
Governmental Authority or are holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees of the
Company or any Subsidiary and are not liable for any arrears of wages, taxes,
penalties or other sums for failure to comply with any of the foregoing. The
Company and the Subsidiaries have paid in full to all employees or adequately
accrued in accordance with GAAP, all wages, salaries, commissions, bonuses,
benefits and other compensation due to or on behalf of such employees and there
is no claim with respect to payment of wages, salary or overtime pay that has
been asserted or is now pending or threatened before any Governmental Authority
with respect to any persons currently or formerly employed by the Company or any
Subsidiary. Neither the Company nor any Subsidiary is a party to, or otherwise
bound by, any consent decree with, or citation by, any Governmental Authority
relating to employees or employment practices. There is no charge or proceeding
with respect to a violation of any occupational safety or health standards that
has been asserted or is now pending or threatened with respect to the Company.
Except for item 3 set forth in Section 4.09 of the Disclosure Schedule, there is
no charge of discrimination in employment or employment practices, for any
reason, including, without limitation, age, gender, race, religion or other
legally protected category, which has been asserted or is now pending or
threatened before the United States Equal Employment Opportunity Commission, or
any other Governmental Authority in any jurisdiction in which the Company or any
Subsidiary have employed or employ any person.
24
(c) Except as set forth in Section 4.11(c) of the Disclosure
Schedule, (i) all subsisting contracts of employment to which the Company or any
Subsidiary is a party are terminable by the Company or any Subsidiary on three
months' notice or less without compensation (other than in accordance with
applicable legislation); (ii) there are no customs, established practices or
discretionary arrangements of the Company or any Subsidiary in relation to the
termination of employment of any of its employees (whether voluntary or
involuntary); and (iii) neither the Company nor any Subsidiary has any
outstanding liability to pay compensation for loss of office or employment to
any present or former employee or to make any payment for breach of any
agreement listed in Section 4.10(a) of the Disclosure Schedule.
(d) All officers, management employees, and technical and
professional employees of the Company and the Subsidiaries have entered into the
standard form confidentiality agreement of the Company (the "Standard Form
Confidentiality Agreement") which has been delivered to Parent and provides,
among other matters, that they maintain in confidence all confidential or
proprietary information acquired by them in the course of their employment and
to assign to the Company and the Subsidiaries all inventions made by them within
the scope of their employment during such employment and for a reasonable period
thereafter.
(e) Section 4.11(e) of the Disclosure Schedule lists the name, the
place of employment, the current annual salary rates (including descriptions of
any raises in the preceding three months), bonuses, deferred or contingent
compensation (in cash or otherwise) in the current fiscal year and the date of
employment of each current salaried employee, officer, director, consultant or
agent of the Company and each Subsidiary.
SECTION 4.12. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT.
Neither the Schedule 14D-9 nor any information supplied by the Company for
inclusion in the Offer Documents shall, at the times the Schedule 14D-9, the
Offer Documents or any amendments or supplements thereto are filed with the SEC
or are first published, sent or given to stockholders of the Company, as the
case may be, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Neither the proxy statement to be sent to the stockholders
of the Company in connection with the Stockholders' Meeting (as hereinafter
defined), if applicable, or the information statement to be sent to such
stockholders, as appropriate (such proxy statement or information statement, as
amended or supplemented, being referred to herein as the "Proxy Statement"),
shall, at the date the Proxy Statement (or any amendment or supplement thereto)
is first mailed to stockholders of the Company, at the time of the Stockholders'
Meeting and at the Effective Time, contain any statement which, at the time and
in light of the circumstances under which it was made, is false or misleading
with respect to any material fact, or which omits to state any material fact
necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier
25
communication with respect to the solicitation of proxies for the Stockholders'
Meeting which shall have become false or misleading. The Schedule 14D-9 and the
Proxy Statement shall comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder.
SECTION 4.13. PROPERTY AND LEASES. (a) The Company and the
Subsidiaries have sufficient title to all their properties and assets to conduct
their respective businesses as currently conducted or as contemplated to be
conducted, with only such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary owns any real property.
Each parcel of real property leased by the Company or any Subsidiary (i) is
leased free and clear of all mortgages, pledges, liens, security interests,
conditional and installment sale agreements, encumbrances, charges or other
claims of third parties of any kind against the Company or any Subsidiary,
including, without limitation, any easement, right of way or other encumbrance
to title, or any option, right of first refusal, or right of first offer
applicable to the Company or any Subsidiary (collectively, "Liens"), other than
(A) Liens for current taxes and assessments not yet past due, (B) inchoate
mechanics' and materialmen's Liens for construction in progress, (C) workmen's,
repairmen's, warehousemen's and carriers' Liens arising in the ordinary course
of business of the Company or such Subsidiary consistent with past practice, and
(D) all matters of record, Liens and other imperfections of title and
encumbrances that, individually or in the aggregate, would not have a Material
Adverse Effect (collectively, "Permitted Liens"), and (ii) is neither subject to
any governmental decree or order to be sold nor is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefor, nor, to the knowledge of the Company, has any such
condemnation, expropriation or taking been proposed.
(c) All leases of real property leased for the use or benefit of the
Company or any Subsidiary to which the Company or any Subsidiary is a party, and
all amendments and modifications thereto, are in full force and effect and have
not been modified or amended, and there exists no default under any such lease
by the Company or any Subsidiary, nor any event which, with notice or lapse of
time or both, would constitute a default thereunder by the Company or any
Subsidiary, except as would not, individually or in the aggregate, prevent or
materially delay consummation of the Offer or the Merger and would not,
individually or in the aggregate, have a Material Adverse Effect.
(d) To the knowledge of the Company, there are no contractual or
legal restrictions that preclude or restrict the ability to use any real
property leased by the Company or any Subsidiary for the purposes for which it
is currently being used. To the knowledge of the Company, there are no material
latent defects or material adverse
26
physical conditions affecting the real property, and improvements thereon,
leased by the Company or any Subsidiary other than those that, individually or
in the aggregate, would not prevent or materially delay consummation of the
Offer or the Merger and would not have a Material Adverse Effect.
SECTION 4.14. INTELLECTUAL PROPERTY. (a) Section 4.14(a) of the
Disclosure Schedule lists all registered and material unregistered trademarks
and applications therefor, trade names, service marks, registered and material
unregistered copyrights and applications therefor, patents and patent
applications, if owned by or licensed to the Company or any Subsidiary and
indicating whether owned by or licensed to the Company or any Subsidiary.
Section 4.14(a) of the Disclosure Schedule also lists all domain names owned by
or licensed or registered to the Company or any Subsidiary. In addition, the
Company represents and warrants to Parent and Purchaser as follows:
(i) the conduct of the business of the Company and the
Subsidiaries as currently conducted does not conflict with,
infringe upon, misappropriate or otherwise violate the
Intellectual Property rights of any third party, and no claim
has been asserted against the Company or any Subsidiary or, to
the knowledge of the Company, is threatened alleging that the
conduct of the business of the Company and the Subsidiaries as
currently conducted conflicts with, infringes upon or may
infringe upon, misappropriates or otherwise violates the
Intellectual Property rights of any third party except, in
each case, where such conflict, infringement, misappropriation
or other violation would not, individually or in the
aggregate, have a Material Adverse Effect;
(ii) with respect to each item of Intellectual Property owned by
the Company or any Subsidiary and material to the business,
financial condition or results of operations of the Company
and the Subsidiaries, taken as a whole ("Company Owned
Intellectual Property"), the Company and/or each such
Subsidiary is the sole owner of the entire right, title and
interest in and to such Company Owned Intellectual Property
and is entitled to use such Company Owned Intellectual
Property in the continued operation of its respective
business;
(iii) with respect to each item of Intellectual Property licensed to
the Company or any Subsidiary and material to the business,
financial condition or results of operations of the Company
and the Subsidiaries, taken as a whole ("Company Licensed
Intellectual Property"), the Company and/or each such
Subsidiary has valid licenses or other rights to use such
Company Licensed Intellectual
27
Property in the continued operation of its respective business
in accordance with the terms of the license agreements
governing such Company Licensed Intellectual Property and each
such license pertaining to the Company Licensed Intellectual
Property has been delivered to Parent;
(iv) the Company Owned Intellectual Property and, to the knowledge
of the Company, the Company Licensed Intellectual Property,
are valid and enforceable, and have not been adjudged invalid
or unenforceable in whole or in part;
(v) the Company Owned Intellectual Property and the Company
Licensed Intellectual Property constitute all of the material
Intellectual Property necessary for the operation of the
business of the Company and each Subsidiary as currently
conducted;
(vi) no Action is pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary (A) based
upon or challenging or seeking to deny or restrict the
ownership by or license rights of the Company or any
Subsidiary of any of the Company Owned Intellectual Property
or Company Licensed Intellectual Property, (B) alleging that
any services provided by, processes used by the Company or any
Subsidiary conflict with, infringe upon, misappropriate or
violate any Intellectual Property right of any third party, or
(C) alleging that the Company Licensed Intellectual Property
is being licensed or sublicensed in conflict with the terms of
any license or other agreement;
(vii) to the knowledge of the Company, no person is engaging in any
activity that materially conflicts with, infringes upon or may
infringe upon, misappropriates or violates the Company Owned
Intellectual Property or Company Licensed Intellectual
Property;
(viii) each license of the Company Licensed Intellectual Property is
valid and enforceable, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity, is binding
on all parties to such license, and is in full force and
effect;
(ix) to the knowledge of the Company, no party to any license of
the Company Licensed Intellectual Property is in breach
thereof or default thereunder and no event has occurred that,
with notice or
28
lapse of time, would constitute such breach or default or
permit the termination or cancellation of the license;
(x) neither the Company nor any Subsidiary received any notice of
termination or cancellation under any license for the Company
Licensed Intellectual Property; and
(xi) neither the execution of this Agreement nor the consummation
of any Transaction shall materially adversely affect any of
the Company's or any Subsidiary's rights with respect to the
Company Owned Intellectual Property or the Company Licensed
Intellectual Property.
(b) The Software owned or purported to be owned by the Company or
any Subsidiary, was either (i) developed by employees of the Company or a
Subsidiary within the scope of their employment who have validly assigned all
their rights to the Company or a Subsidiary pursuant to the Standard Form
Confidentiality Agreement, (ii) developed by independent contractors who have
assigned their rights to the Company or a Subsidiary pursuant to written
agreements or (iii) otherwise lawfully acquired by the Company or a Subsidiary
from a third party pursuant to written agreements. The source code of any of the
Company's Software and the data associated therewith have not been licensed or
otherwise provided to another person. To the Company's knowledge, the Software
is free of all viruses, worms, Trojan horses and other material known
contaminants, and does not contain any bugs, errors, or problems of a material
nature that could disrupt its operation or have an adverse impact on the
operation of other material software programs or operating systems. The Company
has obtained all approvals necessary for exporting the Software outside the
United States and importing the Software into any country in which the Software
is now sold or licensed for use, and all such export and import approvals in the
United States and throughout the world are valid, current, outstanding and in
full force and effect, except where the failure to obtain such approvals or the
failure of such approvals to be valid, current, outstanding and in full force
and effect would not, individually or in the aggregate, have a Material Adverse
Effect.
(c) The Company has taken all reasonable steps in order to safeguard
and protect as confidential and proprietary its trade secrets and other
confidential Intellectual Property. To the knowledge of the Company, (i) there
has been no misappropriation of any material trade secrets or other material
confidential Company Owned Intellectual Property by any person; (ii) no
employee, independent contractor or agent of the Company has misappropriated any
trade secrets of any other person in the course of such performance as an
employee, independent contractor or agent; and (iii) no employee, independent
contractor or agent of the Company is in material default or breach of any term
of any employment agreement, non-disclosure agreement, assignment
29
of invention agreement or similar agreement or contract relating in any way to
the protection, ownership, development, use or transfer of Company Owned
Intellectual Property.
SECTION 4.15. TAXES. The Company and the Subsidiaries have filed all
United States federal, state, local and non-United States Tax returns and
reports required to be filed by them and have paid and discharged all Taxes
required to be paid or discharged, other than (a) such payments as are being
contested in good faith by appropriate proceedings and (b) such filings,
payments or other occurrences that would not have a Material Adverse Effect.
Neither the IRS nor any other United States or non-United States taxing
authority or agency is now asserting or, to the knowledge of the Company,
threatening to assert against the Company or any Subsidiary any deficiency or
claim for any Taxes or interest thereon or penalties in connection therewith.
Neither the Company nor any Subsidiary has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of
any Tax. The accruals and reserves for Taxes reflected in the 2000 Balance Sheet
are adequate to cover all Taxes accruable through such date (including interest
and penalties, if any, thereon) in accordance with GAAP. Neither the Company nor
any Subsidiary has made an election under Section 341(f) of the Code. There are
no Tax liens upon any property or assets of the Company or any of the
Subsidiaries except liens for current Taxes not yet due. Neither the Company nor
any of the Subsidiaries has been required to include in income any adjustment
pursuant to Section 481 of the Code by reason of a voluntary change in
accounting method initiated by the Company or any of the Subsidiaries, and the
IRS has not initiated or proposed any such adjustment or change in accounting
method, in either case which adjustment or change would have a Material Adverse
Effect. Except as set forth in the financial statements described in Section
4.07, neither the Company nor any of the Subsidiaries has entered into a
transaction which is being accounted for under the installment method of Section
453 of the Code, which would prevent or materially delay consummation of the
Offer or the Merger or would have a Material Adverse Effect.
SECTION 4.16. ENVIRONMENTAL MATTERS. Except as specifically
described in Section 4.16 of the Disclosure Schedule or as would not,
individually or in the aggregate, prevent or materially delay the consummation
of the Offer or the Merger and would not have a Material Adverse Effect, (a) the
Company and each Subsidiary are and have always been in compliance with all
applicable Environmental Laws; (b) none of the properties currently or, to the
knowledge of the Company, formerly, owned, leased or operated by the Company or
any Subsidiary (including, without limitation, soils and surface and ground
waters) are contaminated with any Hazardous Substance; (c) the Company is not
actually or allegedly or, to the knowledge of the Company, potentially liable
for any off-site contamination by Hazardous Substances; (d) the Company has not
received any notice alleging that it is liable under any Environmental Law
(including, without limitation, pending or threatened liens); (e) the Company
has all permits, licenses and other authorizations required under any
Environmental Law ("Environmental Permits"); (f) the Company has always been and
is in compliance with its Environmental Permits; and (g) neither the execution
of this Agreement nor the consummation of the
30
Transactions will require any investigation, remediation or other action with
respect to Hazardous Substances, or any notice to or consent of Governmental
Authorities or third parties, pursuant to any applicable Environmental Law or
Environmental Permit.
SECTION 4.17. MATERIAL CONTRACTS. (a) Subsections (i) through (xii)
of Section 4.17(a) of the Disclosure Schedule contain a list of the following
types of contracts and agreements to which the Company or any Subsidiary is a
party (such contracts, agreements and arrangements as are required to be set
forth in Section 4.17(a) of the Disclosure Schedule being the "Material
Contracts"):
(i) each contract and agreement (other than a contract with a
customer of the Company) which (A) is likely to involve
consideration of more than $250,000, in the aggregate, during
the calendar year ending December 31, 2001, (B) is likely to
involve consideration of more than $350,000, in the aggregate,
over the remaining term of such contract, and which, in either
case, cannot be canceled by the Company or any Subsidiary
without penalty or further payment and without more than 90
days' notice;
(ii) each contract and agreement with a customer of the Company or
any Subsidiary which is likely to involve consideration of
more than $350,000 annually over the remaining term of such
contract and which cannot be canceled by the Company or any
Subsidiary without penalty or further payment and without more
than 90 days' notice;
(iii) all material broker, distributor, reseller, dealer,
manufacturer's representative, franchise, agency, sales
promotion, market research, marketing consulting and
advertising contracts and agreements to which the Company or
any Subsidiary is a party;
(iv) all management contracts (excluding contracts for employment)
and contracts with other consultants, including any contracts
involving the payment of royalties or other amounts calculated
based upon the revenues or income of the Company or any
Subsidiary or income or revenues related to any product or
service of the Company or any Subsidiary to which the Company
or any Subsidiary is a party; and which (A) is likely to
involve consideration of more than $250,000 in the aggregate,
during the calendar year ending December 31, 2001, (B) is
likely to involve consideration of more than $350,000, in the
aggregate, over the remaining term of such contract, and
which, in either case, cannot
31
be cancelled by the Company or any Subsidiary without penalty
or further payment and without more than 90 days' notice;
(v) all contracts and agreements evidencing indebtedness for
borrowed money, if any;
(vi) all contracts and agreements with any Governmental Authority
to which the Company or any Subsidiary is a party (other than
standard form customer contracts previously disclosed to
Purchaser);
(vii) all contracts and agreements including, without limitation,
licensing agreements, that limit, or purport to limit, the
ability of the Company or any Subsidiary to compete in any
line of business or with any person or entity or in any
geographic area or during any period of time;
(viii) all contracts or arrangements that result in any person or
entity holding a power of attorney from the Company or any
Subsidiary that relates to the Company, any Subsidiary or
their respective businesses;
(ix) all contracts relating in whole or in part to Intellectual
Property pursuant to which the Company or any Subsidiary
obtains from a third party the right to sell, distribute or
otherwise display data or works owned or controlled by such
third party and that is (A) likely to involve consideration of
more than $250,000 in the aggregate during the calendar year
ending December 31, 2001, (B) likely to involve consideration
of more than $350,000, in the aggregate, over the remaining
term of such contract, or (C) that does not involve any cash
consideration but is otherwise material to the Company or any
Subsidiary;
(x) all contracts relating in whole or in part to Intellectual
Property pursuant to which the Company or any Subsidiary
grants to a third party the right to sell, distribute or
otherwise display data or works owned or controlled by the
Company or any Subsidiary and that is (A) likely to involve
consideration of more than $250,000 in the aggregate during
the calendar year ending December 31, 2001, (B) likely to
involve consideration of more than $350,000 annually over the
remaining term of such contract, or (C) that does not
32
involve any cash consideration but is otherwise material to
the Company or any Subsidiary;
(xi) all contracts for employment required to be listed in Section
4.10(a) of the Disclosure Schedule; and
(xii) all other contracts and agreements, whether or not made in the
ordinary course of business, which are material to the Company
and the Subsidiaries, taken as a whole, or the conduct of
their respective businesses, or the absence of which would
prevent or materially delay consummation of the Offer or the
Merger or would have a Material Adverse Effect.
(b) Except as would not prevent or materially delay consummation of
the Offer or the Merger and would not have a Material Adverse Effect,
individually or in the aggregate and except as set forth in Section 4.17(b) of
the Disclosure Schedule, (i) each Material Contract is a legal, valid and
binding agreement, neither the Company nor any of the Subsidiaries is in default
thereunder and, to the knowledge of the Company, none of the Material Contracts
has been canceled by the other party; (ii) to the Company's knowledge, no other
party is in breach or violation of, or default under, any Material Contract;
(iii) the Company and the Subsidiaries are not in receipt of any claim of
default under any such Material Contract; and (iv) neither the execution of this
Agreement nor the consummation of any Transaction shall constitute default, give
rise to cancellation rights, or otherwise adversely affect any of the Company's
rights under any Material Contract. The Company has furnished to Parent true and
complete copies of all Material Contracts, including any amendments thereto.
SECTION 4.18. INSURANCE. (a) Section 4.18(a) of the Disclosure
Schedule sets forth, with respect to each insurance policy under which the
Company or any Subsidiary is insured, a named insured or otherwise the principal
beneficiary of coverage which is currently in effect, (i) the names of the
insurer, the principal insured and each named insured, (ii) the policy number,
(iii) the period, scope and amount of coverage and (iv) the premium charged.
Such insurance policies and the types and amounts of coverage provided therein
are adequate and usual and customary in the context of the businesses and
operations in which the Company and Subsidiaries are engaged.
(b) With respect to each such insurance policy: (i) to the knowledge
of the Company, the policy is legal, valid, binding and enforceable in
accordance with its terms and is in full force and effect; (ii) neither the
Company nor any Subsidiary is in material breach or default (including any such
breach or default with respect to the payment of premiums or the giving of
notice), and no event has occurred which, with
33
notice or the lapse of time, would constitute such a material breach or default,
or permit termination or modification, under the policy; and (iii) to the
knowledge of the Company, no insurer on the policy has been declared insolvent
or placed in receivership, conservatorship or liquidation.
(c) At no time subsequent to January 1, 1998 has the Company or any
Subsidiary (i) been denied any insurance or indemnity bond coverage which it has
requested, (ii) made any material reduction in the scope or amount of its
insurance coverage, or (iii) received notice from any of its insurance carriers
that any insurance premiums will be subject to increase in an amount materially
disproportionate to the amount of the increases with respect thereto (or with
respect to similar insurance) in prior years or that any insurance coverage
listed in Section 4.18(a) of the Disclosure Schedule will not be available in
the future substantially on the same terms as are now in effect.
SECTION 4.19. BROKERS. No broker, finder or investment banker (other
than Broadview) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and Broadview
pursuant to which such firm would be entitled to any payment relating to the
Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement, Parent
and Purchaser hereby, jointly and severally, represent and warrant to the
Company that:
SECTION 5.01. CORPORATE ORGANIZATION. Each of Parent and Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted. Parent and
Purchaser have heretofore made available to the Company complete and correct
copies of their respective Certificates of Incorporation and By-laws, and each
such instrument is in full force and effect.
SECTION 5.02 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent
and Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions. The execution and delivery of this Agreement by Parent and
Purchaser and the consummation by Parent and Purchaser of the Transactions have
been duly and validly
34
authorized by all necessary corporate action, and no other corporate proceedings
on the part of Parent or Purchaser are necessary to authorize this Agreement or
to consummate the Transactions (other than, with respect to the Merger, the
filing and recordation of appropriate merger documents as required by Delaware
Law). This Agreement has been duly and validly executed and delivered by Parent
and Purchaser and, assuming due authorization, execution and delivery by the
Company, constitutes a legal, valid and binding obligation of each of Parent and
Purchaser enforceable against each of Parent and Purchaser in accordance with
its terms subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity.
SECTION 5.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws of either Parent or
Purchaser, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 5.03(b) have been obtained and all filings and
obligations described in Section 5.03(b) have been made, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or Purchaser or by which any property or asset of either of them is bound
or affected, or (iii) result in any breach of, or constitute a default (or an
event which, with notice or lapse of time or both, would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or Purchaser is a party or by which
Parent or Purchaser or any property or asset of either of them is bound or
affected, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, prevent or materially delay consummation of
the Transactions or otherwise prevent Parent and Purchaser from performing their
material obligations under this Agreement.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with, or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and filing and
recordation of appropriate merger documents as required by Delaware Law, and
(ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or
materially delay consummation of the Transactions, or otherwise prevent Parent
or Purchaser from performing their material obligations under this Agreement.
35
SECTION 5.04. FINANCING. Parent has, will have through the Effective
Time and will make available to Purchaser sufficient funds or available
borrowing capacity to permit Purchaser to consummate all the Transactions,
including, without limitation, acquiring all the outstanding Shares in the Offer
and the Merger.
SECTION 5.05. OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents
shall not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The information supplied by Parent for inclusion in the Schedule
14D-9 and Proxy Statement, if any, shall not, at the date the Proxy Statement
(or any amendment or supplement thereto) is first mailed to stockholders of the
Company, at the time of the Stockholders' Meeting or at the Effective Time,
contain any untrue statement of a material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not false or
misleading, or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders' Meeting which
shall have become false or misleading. Notwithstanding the foregoing, Parent and
Purchaser make no representation or warranty with respect to any information
supplied by the Company or any of its representatives for inclusion in any of
the foregoing documents or the Offer Documents. The Offer Documents shall comply
in all material respects as to form with the requirements of the Exchange Act
and the rules and regulations thereunder.
SECTION 5.06. BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
SECTION 5.07. PERFORMANCE. Since March 31, 2001, there has not been
with respect to Parent any condition, event or occurrence which, individually or
in the aggregate, would reasonably be expected to prevent or materially delay
the ability of Parent or Purchaser to consummate the Transactions or to perform
their obligations thereunder.
SECTION 5.08. LITIGATION. As of the date of this Agreement, there
are no Actions pending or, to the knowledge of Parent, threatened, against
Parent or any of its subsidiaries or any of their respective properties, before
any Governmental Authority that seeks to restrain or enjoin the consummation of
the transactions contemplated by this Agreement or prevent or materially delay
the ability of Parent and Purchaser to consummate the Transactions or for Parent
and Purchaser to perform their obligations thereunder.
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ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
The Company agrees that, between the date of this Agreement and the earlier of
the termination of this Agreement pursuant to Section 9.01 hereof or the
Effective Time, except as set forth in Section 6.01 of the Disclosure Schedule,
unless Parent shall otherwise agree in writing, the businesses of the Company
and the Subsidiaries shall be conducted only in, and the Company and the
Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and the Company shall
use its reasonable best efforts to preserve substantially intact the business
organization of the Company and the Subsidiaries, to keep available the services
of the current officers, employees and consultants of the Company and the
Subsidiaries and to preserve the current relationships of the Company and the
Subsidiaries with customers, suppliers and other persons with which the Company
or any Subsidiary has significant business relations. By way of amplification
and not limitation, except as expressly contemplated by this Agreement and
Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary
shall, between the date of this Agreement and the earlier of the termination of
this Agreement pursuant to Section 9.01 hereof or the Effective Time, directly
or indirectly, do, or propose to do, any of the following without the prior
written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares
of any class of capital stock of the Company or any Subsidiary, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Company or any Subsidiary
(except for the issuance of a maximum of 3,841,026 Shares issuable pursuant to
options outstanding on the date hereof under the Company Stock Option Plans and
801,497 Shares issuable pursuant to the Warrants, or rights to purchase Shares
pursuant to the ESPP in each case as set forth in Section 4.03 of the Disclosure
Schedule), or (ii) any assets of the Company or any Subsidiary, except in the
ordinary course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock;
37
(d) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other business organization or any
division thereof or any material amount of assets; (ii) incur any indebtedness
for borrowed money or issue any debt securities or assume, guarantee or endorse,
or otherwise become responsible for, the obligations of any person, or make any
loans or advances (except for the extension of advances to employees in the
ordinary course of business and consistent with past practice), or grant any
security interest in any of its assets; (iii) enter into any contract or
agreement other than in the ordinary course of business and consistent with past
practice; (iv) authorize, or make any commitment with respect to, any single
capital expenditure which is in excess of $50,000 or capital expenditures which
are, in the aggregate, in excess of $250,000 for the Company and the
Subsidiaries taken as a whole; (v) make or direct to be made any capital
investments or equity investments in any entity, other than a wholly owned
Subsidiary; or (vi) enter into or amend any contract, agreement, commitment or
arrangement with respect to any matter set forth in this Section 6.01(e);
(f) Intentionally deleted.
(g) increase the compensation payable or to become payable or the
benefits provided to its directors, officers or employees, except for increases
in the ordinary course of business and consistent with past practice in salaries
or wages of employees of the Company or any Subsidiary who are not directors or
officers of the Company, or grant any severance or termination pay to, or enter
into any employment or severance agreement with, any director, officer or other
employee of the Company or of any Subsidiary, or hire any new officer, or hire
any new employee other than employees hired in the ordinary course of business
and consistent with past practice, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit-sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee (unless
required by law);
(h) change any accounting methods used by it unless required by
GAAP;
(i) make any material tax election or settle or compromise any
material United States federal, state, local or non-United States income tax
liability;
(j) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction, (A) in the ordinary course of business
and consistent with past practice, of liabilities reflected or reserved against
in the 2000 Balance Sheet or subsequently incurred in the ordinary course of
business and consistent with past
38
practice, (B) of any liabilities under the existing employment or executive
bonus agreements of the Company set forth in Section 4.10(a) of the Disclosure
Schedule, and (C) of fees and expenses in connection with the transition of
control of the Company's business to Parent and Purchaser;
(k) pay or delay the payment of accounts payable or accelerate the
collection of accounts receivable, in either case outside of the ordinary course
of business and consistent with past practice other than the payment of fees and
expenses in connection with the transition of control of the Company's business
to Parent or Purchaser;
(l) amend, modify or consent to the termination of any Material
Contract, or amend, waive, modify or consent to the termination of the Company's
or any Subsidiary's rights thereunder, other than in the ordinary course of
business and consistent with past practice;
(m) commence or settle any Action other than, with the prior written
consent of Parent (which consent shall not be unreasonably withheld or delayed)
the Actions set forth in Section 4.09 of the Disclosure Schedule;
(n) amend or modify any of the Amended Employment Agreements;
(o) accelerate the vesting or exercisability of any Options, other
than as and to the extent expressly set forth in Section 4.03 of the Disclosure
Schedule; or
(p) announce an intention, enter into any formal or informal
agreement or otherwise make a commitment, to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. STOCKHOLDERS' MEETING. (a) If required by applicable
law in order to consummate the Merger, the Company, acting through the Board,
shall, in accordance with applicable law and the Company's Certificate of
Incorporation and By-laws, (i) duly call, give notice of, convene and hold an
annual or special meeting of its stockholders as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on this Agreement and the Transactions (the "Stockholders' Meeting") and
(ii) (A) except as provided in Section 7.05(b), include in the Proxy Statement,
and not subsequently withhold, withdraw, amend, change or modify
39
in any manner adverse to Purchaser or Parent, the unanimous recommendation of
the Board that the stockholders of the Company approve and adopt this Agreement
and the Transactions and (B) use its best efforts to obtain such approval and
adoption. At the Stockholders' Meeting, Parent and Purchaser shall cause all
Shares then owned by them and their subsidiaries to be voted in favor of the
approval and adoption of this Agreement and the Transactions.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90% of the then outstanding Shares, the parties shall take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 253 of Delaware Law, as promptly as reasonably
practicable after such acquisition, without a meeting of the stockholders of the
Company.
SECTION 7.02. PROXY STATEMENT. If approval of the Company's
stockholders is required by applicable law to consummate the Merger, promptly
following consummation of the Offer, the Company shall file the Proxy Statement
with the SEC under the Exchange Act, and shall use its best efforts to have the
Proxy Statement cleared by the SEC promptly after such filing. Parent, Purchaser
and the Company shall cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Parent of the receipt of any comments of
the SEC with respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional information and shall
provide to Parent promptly copies of all correspondence between the Company or
any representative of the Company and the SEC. The Company shall provide Parent
and its counsel the opportunity to review the Proxy Statement, including all
amendments and supplements thereto, prior to its being filed with the SEC and
shall give Parent and its counsel the opportunity to review all responses to
requests for additional information and replies to comments prior to their being
filed with, or sent to, the SEC. Each of the Company, Parent and Purchaser
agrees to use its reasonable best efforts, after consultation with the other
parties hereto, to respond promptly to all such comments of and requests by the
SEC and to cause the Proxy Statement and all required amendments and supplements
thereto to be mailed to the holders of Shares entitled to vote at the
Stockholders' Meeting at the earliest practicable time.
SECTION 7.03. COMPANY BOARD REPRESENTATION; SECTION 14(f). (a)
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from
time to time thereafter, Purchaser shall be entitled to designate up to such
number of directors, rounded up to the next whole number but rounded down if
rounding up would cause Purchaser's representatives to constitute the entire
Board, on the Board as shall give Purchaser representation on the Board equal to
the product of the total number of directors on the Board (giving effect to the
directors elected pursuant to this sentence) multiplied by the percentage that
the aggregate number of Shares beneficially owned by Purchaser or any affiliate
of Purchaser following such purchase bears to the total number of Shares then
outstanding, and the Company shall, at such time, promptly take all
40
actions necessary to cause Purchaser's designees to be elected as directors of
the Company, including increasing the size of the Board or securing the
resignations of incumbent directors, or both. At such times, the Company shall
use its reasonable best efforts to cause persons designated by Purchaser to
constitute the same percentage as persons designated by Purchaser shall
constitute of the Board of (i) each committee of the Board, (ii) each board of
directors of each Subsidiary, and (iii) each committee of each such board, in
each case only to the extent permitted by applicable Law. Notwithstanding the
foregoing, until the Effective Time, the Company shall use its reasonable best
efforts to ensure that at least two members of the Board and each committee of
the Board and such boards and committees of the Subsidiaries, as of the date
hereof, who are not employees of the Company shall remain members of the Board
and of such boards and committees.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder to
fulfill its obligations under this Section 7.03, and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Purchaser shall supply to the Company, and be solely
responsible for, any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant to
this Section 7.03, prior to the Effective Time, any amendment of this Agreement
or the Certificate of Incorporation or By-laws of the Company, any termination
of this Agreement by the Company, any extension by the Company of the time for
the performance of any of the obligations or other acts of Parent or Purchaser,
or waiver of any of the Company's rights hereunder, shall require the
concurrence of a majority of the directors of the Company then in office who
neither were designated by Purchaser nor are employees of the Company or any
Subsidiary.
SECTION 7.04. ACCESS TO INFORMATION; CONFIDENTIALITY. (a) From the
date hereof until the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser reasonable access at all reasonable times to the officers,
employees, agents, properties, offices, plants and other facilities, books and
records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser with such financial, operating and other data and information as
Parent or Purchaser, through their officers, employees or agents, may reasonably
request.
(b) All information obtained by Parent or Purchaser pursuant to this
Section 7.04 shall be kept confidential in accordance with the confidentiality
agreement,
41
dated May 16, 2001, (the "Confidentiality Agreement"), between West Group, an
affiliate of Parent and the Company.
(c) No investigation pursuant to this Section 7.04 or otherwise
shall affect any representation or warranty in this Agreement of any party
hereto or any condition to the obligations of the parties hereto or any
condition to the Offer.
SECTION 7.05. NO SOLICITATION OF TRANSACTIONS. (a) Neither the
Company nor any Subsidiary shall, directly or indirectly, through any officer,
director, employee, representative, agent or otherwise, (i) solicit, initiate or
take any action intended to encourage the submission of any Acquisition
Proposal, or (ii) except as required by the fiduciary duties of the Board under
applicable Law (as determined in good faith) after having received advice from
outside legal counsel in response to unsolicited proposals, participate in any
discussions or negotiations regarding, or furnish to any person, any information
(provided that prior to furnishing such information, the Company enters into a
customary, confidentiality agreement on terms no less favorable to the Company
than those contained in the Confidentiality Agreement) with respect to, or
otherwise cooperate in any way with respect to, or assist or participate in, or
take any action intended to facilitate or encourage, any proposal that
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal.
(b) Except as set forth in this Section 7.05(b), neither the Board
nor any committee thereof shall (i) withhold, withdraw, amend, change or modify,
or propose to withhold, withdraw, amend, change or modify, in a manner adverse
to Parent or Purchaser, the approval or recommendation by the Board or any such
committee of this Agreement, the Offer, the Merger or any other Transaction,
(ii) approve or recommend, or propose to approve or recommend, any Acquisition
Proposal or (iii) enter into any agreement with respect to any Acquisition
Proposal. Notwithstanding the foregoing, in the event that, prior to the time of
acceptance for payment of Shares pursuant to the Offer, the Board determines in
good faith that it is required to do so by its fiduciary duties under applicable
law after having received advice from outside legal counsel and that the
Acquisition Proposal constitutes, or may reasonably be expected to lead to, a
Superior Proposal, after giving prior written notice to Parent and Purchaser,
the Board may withhold, withdraw, amend, change or modify its approval or
recommendation of the Offer and the Merger, but only to terminate this Agreement
in accordance with Section 9.01(d)(ii).
(c) The Company shall, and shall direct or cause its directors,
officers, employees, representatives, agents or other representatives to,
immediately cease and cause to be terminated any discussions or negotiations
with any parties that may be ongoing with respect to any Acquisition Proposal as
of the date hereof.
42
(d) The Company shall promptly advise Parent orally (within one (1)
Business Day) and in writing (within two (2) Business Days) of (i) any
Acquisition Proposal or any request for information with respect to any
Acquisition Proposal, the material terms and conditions of such Acquisition
Proposal or request and the identity of the person making such Acquisition
Proposal or request and (ii) any changes in any such Acquisition Proposal or
request.
(e) Nothing contained in this Section 7.05 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders, if the Board determines in good
faith that it is required to do so by its fiduciary duties under applicable law
after having received advice from outside legal counsel; provided, however, that
neither the Company nor the Board nor any committee thereof shall, except as
permitted by Section 7.05(b), withhold, withdraw, amend, change or modify, or
propose publicly to withhold, withdraw, amend, change or modify, its position
with respect to this Agreement, the Offer, the Merger or any other Transaction
or to approve or recommend, or propose publicly to approve or recommend, an
Acquisition Proposal, including a Superior Proposal.
(f) The Company agrees, except as required by the Board's fiduciary
duties under applicable law after having received advice from outside legal
counsel, not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party.
SECTION 7.06. EMPLOYEE BENEFITS MATTERS. As of the Effective Time,
Parent shall cause the Surviving Corporation to honor, in accordance with their
terms, all employee benefit plans and programs in effect immediately prior to
the Effective Time that are applicable to any current or former employees of the
Company or any Subsidiary. Employees of the Company or any Subsidiary shall
receive credit for the purposes of eligibility to participate and vesting (but
not for benefit accruals) under any employee benefit plan or program established
or maintained by the Surviving Corporation for service accrued or deemed accrued
prior to the Effective Time with the Company or any Subsidiary; provided,
however, that such crediting of service shall not operate to duplicate any
benefit or the funding of any such benefit. Notwithstanding anything in this
Section 7.06 to the contrary, nothing in this Section 7.06 shall be deemed to
limit or otherwise affect the right of Parent, Purchaser or the Surviving
Corporation (i) to terminate employment or change the place of work,
responsibilities, status or description of any employee or group of employees,
or (ii) to terminate any employee benefit plan without establishing a
replacement plan, in each case as Parent, Purchaser or Surviving Corporation may
determine in its discretion.
SECTION 7.07 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The By-laws of the Surviving Corporation shall contain provisions no
43
less favorable with respect to indemnification than are set forth in Article 7
of the By-laws of the Company, which provisions shall not be amended, repealed
or otherwise modified for a period of three years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who, at
or prior to the Effective Time, were directors, officers, employees, fiduciaries
or agents of the Company, unless such modification shall be required by law.
(b) The Surviving Corporation shall use its reasonable best efforts
to maintain in effect for three years from the Effective Time, if available, the
current directors' and officers' liability insurance policies maintained by the
Company (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions that are
not materially less favorable) with respect to matters occurring prior to the
Effective Time.
SECTION 7.08. NOTIFICATION OF CERTAIN MATTERS. The Company shall
give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (a) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which reasonably could be expected to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (b) any failure of the Company, Parent or
Purchaser, as the case may be, to comply with or satisfy any covenant or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this Section 7.08 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 7.09. FURTHER ACTION; REASONABLE BEST EFFORTS. (a) Upon the
terms and subject to the conditions hereof, each of the parties hereto shall (i)
make promptly its respective filings, and thereafter promptly make any other
required submissions in any country where a merger filing or other antitrust
notification is necessary or desirable, including but not limited to the United
Kingdom, the Federal Democratic Republic of Germany and Brazil, with respect to
the Transactions and (ii) use its reasonable best efforts to take, or cause to
be taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Transactions, including, without limitation,
using its reasonable best efforts to obtain all Permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with the Company and the Subsidiaries as are necessary for
the consummation of the Transactions and to inform or consult with any trade
unions, work councils, employee representative or any other representative body
as required and to fulfill the conditions to the Offer and the Merger; provided
that neither Purchaser nor Parent will be required by this Section 7.09 to take
any action, including entering into any consent decree, hold separate orders or
other arrangements, that (A) requires the divestiture of any assets of any of
Purchaser, Parent, the Company or any of their respective subsidiaries or (B)
limits Parent's freedom of action with respect to, or its ability to retain, the
Company and the Subsidiaries or any portion thereof or any of Parent's or its
44
affiliates' other assets or businesses. In case, at any time after the Effective
Time, any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of each party to this
Agreement shall use their reasonable best efforts to take all such action.
(b) Each of the parties hereto agrees to cooperate and use its
reasonable best efforts to vigorously contest and resist any Action, including
administrative or judicial Action, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and that restricts, prevents or
prohibits consummation of the Transactions, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal.
(c) Immediately prior to the consummation of the Offer, the Company
shall deliver to Purchaser a certificate, executed by a senior officer of the
Company, in respect of the conditions set forth in paragraphs (ii)(e) and
(ii)(f)(i) of Annex A.
SECTION 7.10. PUBLIC ANNOUNCEMENTS. Parent, Purchaser and the
Company agree that no public release or announcement concerning the
Transactions, the Offer or the Merger shall be issued by any party without the
prior consent of the other party (which consent shall not be unreasonably
withheld), except as such release or announcement may be required by Law or the
rules or regulations of any United States or non-United States securities
exchange, in which case the party required to make the release or announcement
shall use its best efforts to allow the other parties reasonable time to comment
on such release or announcement in advance of such issuance.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01. CONDITIONS TO THE MERGER. The obligations of each
party to effect the Merger shall be subject to the satisfaction, at or prior to
the Effective Time, of the following conditions:
(a) Stockholder Approval. If necessary under Delaware Law, this
Agreement shall have been approved and adopted by the affirmative vote of the
stockholders of the Company;
(b) No Order. No Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any Law (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the acquisition
of Shares
45
by Parent or Purchaser or any affiliate of either of them illegal or otherwise
restricting, preventing or prohibiting consummation of the Transactions; and
(c) Offer. Purchaser or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. TERMINATION. This Agreement may be terminated and the
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of this
Agreement by the stockholders of the Company:
(a) By mutual written consent of each of Parent, Purchaser and the
Company duly authorized by the Boards of Directors of Purchaser and the Company;
or
(b) By either Parent, Purchaser or, upon approval of the Board, by
the Company if (i) the Effective Time shall not have occurred on or before
December 31, 2001; provided, however, that the right to terminate this Agreement
under this Section 9.01(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Effective Time to occur on or before such date or (ii)
any Governmental Authority shall have enacted, issued, promulgated, enforced or
entered any injunction, order, decree or ruling (whether temporary, preliminary
or permanent) which has become final and nonappealable and has the effect of
making consummation of the Offer or the Merger illegal or otherwise preventing
or prohibiting consummation of the Offer or the Merger; or
(c) By Parent if (i) Purchaser shall have (A) failed to commence the
Offer within ten (10) Business Days following the date of this Agreement due to
the occurrence of any of the events set forth in paragraph (d)(ii) of Annex A,
(B) terminated the Offer due to the occurrence of any of the events set forth in
paragraph (d)(ii) of Annex A, or the Offer shall have expired, without Purchaser
having accepted any Shares for payment thereunder or (C) failed to accept Shares
for payment pursuant to the Offer within 90 days following the commencement of
the Offer, unless such action or inaction under (A), (B) or (C) shall have been
caused by or resulted from the failure of Parent or Purchaser to perform, in any
material respect, any of their material covenants or agreements contained in
this Agreement, or the material breach by Parent or Purchaser of any of their
material representations or warranties contained in this Agreement or (ii) prior
to the purchase of Shares pursuant to the Offer, the Board or any committee
thereof shall have withheld, withdrawn, amended, changed or modified in a manner
adverse to
46
Purchaser or Parent its approval or recommendation of this Agreement, the Offer,
the Merger or any other Transaction, or shall have recommended or approved any
Acquisition Proposal, or shall have resolved to do any of the foregoing; or
(d) By the Company, upon approval of the Board, if (i) Purchaser
shall have (A) failed to commence the Offer within ten (10) Business Days
following the date of this Agreement other than due to the occurrence of any of
the events set forth in paragraph (d)(ii) of Annex A, (B) terminated the Offer,
or the Offer shall have expired, without Purchaser having accepted any Shares
for payment thereunder or (C) failed to accept Shares for payment pursuant to
the Offer within 90 days following the commencement of the Offer, unless such
action or inaction under (A), (B) or (C) shall have been caused by or resulted
from the failure of the Company or any Selling Stockholder, as applicable, to
perform, in any material respect, any of its material covenants or agreements
contained in this Agreement or any Stockholder Agreement or the material breach
by the Company or any Selling Stockholder of any of its material representations
or warranties contained in this Agreement or any Stockholder Agreement or (ii)
prior to the purchase of Shares pursuant to the Offer, the Board determines in
good faith that it is required to do so by its fiduciary duties under applicable
law after having received advice from outside legal counsel in order to enter
into a definitive agreement with respect to a Superior Proposal, upon five (5)
Business Days' prior written notice to Parent, setting forth in reasonable
detail the identity of the person making, and the final terms and conditions of,
the Superior Proposal and after duly considering any proposals that may be made
by Parent during such five (5) Business Day period; provided, however, that any
termination of this Agreement pursuant to this Section 9.01(d)(ii) shall not be
effective until the Company has made full payment of all amounts provided under
Section 9.03.
SECTION 9.02. EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 9.01, this Agreement shall forthwith
become void, and there shall be no liability on the part of any party hereto,
except (a) as set forth in Section 9.03 and (b) nothing herein shall relieve any
party from liability for any breach hereof prior to the date of such
termination; provided, however, that the Confidentiality Agreement shall survive
any termination of this Agreement.
SECTION 9.03 FEES AND EXPENSES. (a) In the event that:
(i) (A) any person (including, without limitation, the Company or
any affiliate thereof), other than Parent or any affiliate of
Parent, shall have become the beneficial owner of more than
15% of the then-outstanding Shares, (B) this Agreement shall
have been terminated pursuant to Section 9.01(b)(i), 9.01(c)
or 9.01(d) and (C) the Company enters into an agreement with
respect to an Acquisition
47
Proposal or an Acquisition Proposal is consummated, in each
case within 12 months after such termination of this
Agreement; or
(ii) any person shall have commenced, publicly proposed or
communicated to the Company an Acquisition Proposal that is
publicly disclosed and (A) the Offer shall have remained open
for at least 20 Business Days, (B) the Minimum Condition shall
not have been satisfied, and (C) this Agreement shall have
been terminated pursuant to Section 9.01; or
(iii) this Agreement is terminated (A) pursuant to (x) Section
9.01(c)(ii) or 9.01(d)(ii) or (y) Section 9.01(c)(i) or
9.01(d)(i), to the extent that the failure to commence, the
termination or the failure to accept any Shares for payment,
as set forth in Section 9.01(c)(i) or 9.01(d)(i), as the case
may be, shall relate to the failure of the Company to perform,
in any material respect, any of its material covenants or
agreements contained in this Agreement or a material breach by
the Company of any of its material representations or
warranties contained in this Agreement and (B) the Company
enters into an agreement with respect to an Acquisition
Proposal or an Acquisition Proposal is consummated, in each
case within 12 months after such termination of this
Agreement; or
(iv) an Acquisition Proposal that was commenced, publicly proposed
or communicated to the Company prior to the termination of
this Agreement pursuant to Section 9.01 is consummated within
12 months after the termination of this Agreement pursuant to
Section 9.01, and the Company shall not theretofore have been
required to pay the Fee to Parent pursuant to Section
9.03(a)(i), 9.03(a)(ii) or 9.03(a)(iii);
then, in any such event, the Company shall pay Parent promptly (but in no event
later than two (2) Business Days after the first of such events shall have
occurred) a fee of One Million Four Hundred and Thirty-Two Thousand ($1,432,000)
(the "Fee"), which amount shall be payable in immediately available funds.
(b) Except as set forth in this Section 9.03, all costs and expenses
incurred in connection with this Agreement, the Stockholder Agreement and the
48
Transactions shall be paid by the party incurring such expenses, whether or not
any Transaction is consummated.
(c) In the event that the Company shall fail to pay the Fee when
due, the term "Fee" shall be deemed to include the costs and expenses actually
incurred or accrued by Parent and Purchaser (including, without limitation, fees
and expenses of counsel) in connection with the collection under and enforcement
of this Section 9.03, together with interest on such unpaid Fee, commencing on
the date that the Fee became due, at a rate equal to the rate of interest
publicly announced by Citibank, N.A., from time to time, in the City of New
York, as such bank's Base Rate plus 1%.
SECTION 9.04. AMENDMENT. Subject to Section 7.03, this Agreement may
be amended by the parties hereto by action taken by or on behalf of Parent and
the respective Boards of Directors of Purchaser and the Company at any time
prior to the Effective Time; provided, however, that, after the approval and
adoption of this Agreement and the Transactions by the stockholders of the
Company, no amendment may be made that would reduce the amount or change the
type of consideration into which each Share shall be converted upon consummation
of the Merger. This Agreement may not be amended except by an instrument in
writing signed by each of the parties hereto.
SECTION 9.05. WAIVER. Subject to Section 7.03, at any time prior to
the Effective Time, any party hereto may (a) extend the time for the performance
of any obligation or other act of any other party hereto, (b) waive any
inaccuracy in the representations and warranties of any other party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any agreement of any other party or any condition to its own obligations
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 10.01):
if to Parent or Purchaser:
49
The Thomson Corporation
Metro Center
One Station Plaza
Stamford, Connecticut 06902
Telecopier No: (203) 348-5718
Attention: General Counsel
with a copy to:
Torys
237 Park Avenue
New York, New York 10017
Telecopier No: (212) 682-0200
Attention: Joseph J. Romagnoli, Esq.
Email: jromagnoli@torys.com
if to the Company:
NewsEdge Corporation
80 Blanchard Road
Burlington, MA 01803
Telecopier No: (781) 229-3030
Attention: President
with a copy to:
Testa Hurwitz Thibeault, LLP
125 High Street
Boston, MA 02110-2704
Telecopier No: 617-790-0296
Attention: Lawrence S. Wittenberg, Esq.
E-mail: wittenbe@tht.com
SECTION 10.02. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
50
SECTION 10.03. ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and
Stockholder Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be assigned
(whether pursuant to a merger, by operation of law or otherwise), except that
Parent and Purchaser may assign all or any of their rights and obligations
hereunder to any affiliate of Parent, provided that no such assignment shall
relieve the assigning party of its obligations hereunder if such assignee does
not perform such obligations.
SECTION 10.04. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 7.07 (which is intended to be for the
benefit of the persons covered thereby and may be enforced by such persons).
SECTION 10.05. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 10.06. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that State. The parties hereto
hereby (a) submit to the non-exclusive jurisdiction of any state or federal
court sitting in the City of Wilmington in the State of Delaware for the purpose
of any Action arising out of or relating to this Agreement brought by any party
hereto, and (b) irrevocably waive, and agree not to assert by way of motion,
defense, or otherwise, in any such Action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the Transactions may not be enforced in or by any of the
above-named courts.
SECTION 10.07. WAIVER OF JURY TRIAL. Each of the parties hereto
hereby waives to the fullest extent permitted by applicable law any right it may
have to a trial by jury with respect to any litigation directly or indirectly
arising out of, under or in connection with this Agreement or the Transactions.
Each of the parties hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce that
foregoing waiver and (b) acknowledges that it and the other hereto have been
51
induced to enter into this Agreement and the Transactions, as applicable, by,
among other things, the mutual waivers and certifications in this Section 10.07.
SECTION 10.08. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
52
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
THE THOMSON CORPORATION
By: /s/ Michael S. Harris
____________________________________
Name: Michael S. Harris
Title: Senior Vice President,
General Counsel and
Secretary
INFOBLADE ACQUISITION CORPORATION
By: /s/ Kenneth Carson
____________________________________
Name: Kenneth Carson
Title: Vice President
NEWSEDGE CORPORATION
By: /s/ Clifford M. Pollan
____________________________________
Name: Clifford M. Pollan
Title: President and Chief
Executive Officer
53
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall
not be required to accept for payment any Shares tendered pursuant to the Offer,
if immediately prior to the expiration of the Offer, (i) the Minimum Condition
shall not have been satisfied, (ii) any of the conditions in paragraphs (a),
(b), (c), (e), (f), (g) and (i) below shall exist and be continuing or (iii) any
of the conditions in paragraphs (d) and (h) below shall exist:
(a) there shall have been instituted or be pending any Action (other
than the Action set forth as item 1 in Section 4.09 of the Disclosure Schedule
to the extent such Action has not resulted in a preliminary or permanent
injunction with respect to this Agreement or any of the Transactions) before any
Governmental Authority (i) challenging or seeking to make illegal, materially
delay, or otherwise, directly or indirectly, restrain or prohibit the making of
the Offer, the acceptance for payment of any Shares by Parent, Purchaser or any
other affiliate of Parent, or the purchase of Shares pursuant to the Stockholder
Agreement, or the consummation of any other Transaction, or seeking to obtain
material damages in connection with any Transaction; (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Parent or any of
their subsidiaries of all or any of the business or assets of the Company,
Parent or any of their subsidiaries that is material to either Parent and its
subsidiaries or the Company and the Subsidiaries, in either case, taken as a
whole, or to compel the Company, Parent or any of their subsidiaries, as a
result of the Transactions, to dispose of or to hold separate all or any portion
of the business or assets of the Company, Parent or any of their subsidiaries
that is material to either Parent and its subsidiaries or the Company and the
Subsidiaries, in each case, taken as a whole; (iii) seeking to impose any
limitation on the ability of Parent, Purchaser or any other affiliate of Parent
to exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by Purchaser pursuant
to the Offer or any Stockholder Agreement or otherwise on all matters properly
presented to the Company's stockholders, including, without limitation, the
approval and adoption of this Agreement and the Transactions; (iv) seeking to
require divestiture by Parent, Purchaser or any other affiliate of Parent of any
Shares; or (v) which otherwise would prevent or materially delay consummation of
the Offer or the Merger or would have a Material Adverse Effect;
(b) there shall have been any statute, rule, regulation, legislation
or interpretation enacted, promulgated, amended, issued or deemed applicable to
(i) Parent, the Company or any subsidiary or affiliate of Parent or the Company
or (ii) any Transaction, by any United States or Canadian legislative body or
Governmental Authority with appropriate jurisdiction, the Stockholder Agreement
or the Merger, that
A-1
is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) there shall have occurred any general suspension of trading in,
or limitation on prices for, securities on the NASDAQ National Market (other
than a shortening of trading hours or any coordinated trading halt triggered
solely as a result of a specified increase or decrease in a market index);
(d) (i) (A) it shall have been publicly disclosed, or Purchaser
shall have otherwise learned, that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 15% or more of the then-outstanding Shares has been acquired by
any person, other than Parent or any of its affiliates, and (B) the number of
Shares validly tendered pursuant to the Offer and not withdrawn prior to the
expiration of the Offer do not constitute a majority of the then outstanding
Shares on a fully diluted basis (including, without limitation, all Shares
issuable upon the conversion of any convertible securities or upon the exercise
of any options, warrants or rights) or (ii) (A) the Board, or any committee
thereof, shall have withheld, withdrawn, amended, changed or modified, in a
manner adverse to Parent or Purchaser, the approval or recommendation of the
Offer, the Agreement or approved or recommended any Acquisition Proposal or any
other acquisition of Shares other than the Offer, the Merger or (B) the Board,
or any committee thereof, shall have resolved to do any of the foregoing;
provided, however, that if at any time after the commencement of the Offer, any
of the foregoing events in this paragraph (d)(ii) has occurred, Purchaser may
terminate the Offer at any time upon or after such occurrence;
(e) any representation or warranty of the Company in the Agreement
that is qualified as to materiality or Material Adverse Effect shall not be true
and correct, or any such representation or warranty that is not so qualified
shall not be true and correct in any material respect, in each case as if such
representation or warranty was made as of such time on or after the date of this
Agreement ; provided, however, that this condition shall be deemed to exist only
if the failure of such representations and warranties to be true and correct (to
the extent provided above in this paragraph (e)), individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect;
(f) (i) the Company shall have failed to perform, in any material
respect, any obligation or to comply, in any material respect, with any
agreement or covenant of the Company to be performed or complied with by it
under the Agreement, or (ii) the Selling Stockholders shall have failed to
perform, in any material respect, any obligation or to comply, in any material
respect, with any agreement or covenant of the Selling Stockholders to be
performed or complied with by them under the Stockholder Agreement if any such
failure adversely impacts the Offer or any of the Transactions;
(g) any Company Indebtedness exists;
(h) this Agreement shall have been terminated in accordance with its
terms; or
(i) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of Shares.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
SCHEDULE I - SELLING STOCKHOLDERS
Basil P. Regan
Donald L. McLagan
Clifford Pollan
William A. Devereaux
Michael E. Kolowich
Murat H. Davidson, Jr.
Rory J. Cowan
Peter Woodward
Ronald Benanto
James D. Daniell
SCHEDULE II - OFFICERS
Clifford Pollan
Ronald Benanto
Charles White
Thomas Karanian
Alton Zink
David Scott
John Crozier
Lee Phillips
[BROADVIEW LETTERHEAD]
May 16, 2001
CONFIDENTIAL
Mr. David Hanssens
Vice President Corporate Development
West Group
610 Opperman Drive
PO Box 64526
Eagan, MN 55123
Dear Mr. Hanssens:
In connection with your consideration of a possible transaction with NewsEdge
Corporation (the "Company"), you have requested financial and other information
concerning the business and affairs of the Company. As a condition to the
Company's furnishing to you and your representatives financial and other
information which has not theretofore been made available to the public, you
agree to treat all such non-public information furnished to you in writing or
orally by the Company or its representatives on and after the date of this
agreement (herein collectively referred to as the "evaluation material"), as
follows:
(1) You recognize and acknowledge the competitive value and confidential
nature of the evaluation material and the damage that could result to the
Company if information contained therein is disclosed to any third party. You
also recognize and acknowledge that the evaluation material is being provided to
you in reliance upon your acceptance of the terms of this agreement.
(2) You agree that the evaluation material will be used solely for the purpose
of evaluating the proposed transaction. You also agree that you, your directors,
officers, employees and agents and representatives of your advisors, herein
collectively referred to as "your representatives," will not disclose or permit
the disclosure of any of the evaluation material now or hereafter received or
obtained from the Company or its representatives to any third party or otherwise
use or permit the use of the evaluation material in any way detrimental to
the Company, except as required by applicable law or legal process, without the
prior written consent of the Company, provided, however, that any such
information may be disclosed to such of your representatives who need to know
such information for the purpose of evaluating the proposed transaction and who
are advised of this agreement and agree to keep such
[BROADVIEW LOGO]
Mr. David Hanssens May 16, 2001
Page 2
information confidential and to be bound by this agreement to the same extent as
if they were parties hereto, it being understood that you shall be responsible
for any breach of this agreement by your representatives.
(3) In the event that the transaction contemplated by this agreement is not
consummated, neither you nor any of your representatives shall, without prior
written consent of the Company, use any of the evaluation material now or
hereafter received or obtained from the Company or its representatives for any
purpose.
(4) In the event that the transaction contemplated by this agreement is not
consummated, all evaluation material (and all copies, summaries, and notes of
the contents or parts thereof) shall be returned upon the Company's request or
destroyed and not retained by you or your representatives in any form or for
any reason.
(5) You and your representatives shall have no obligation hereunder with
respect to any information in the evaluation materials to the extent that such
information has been made publicly available nor any obligation with respect to
information which can be demonstrated by you to be already properly in your
possession on a non-confidential basis from sources other than the Company, or
its representatives other than by acts by you or your representatives in
violation of this agreement.
(6) You are aware, and will advise your representatives who are informed of
the matters that are the subject of this Agreement, of the restrictions imposed
by the United States securities laws on the purchase or sale of securities by
any person who has received material, non-public information from the Company
and on the communication of such information to any other person who may
purchase or sell such securities in reliance upon such information. You and your
representatives will comply with all applicable securities laws in connection
with the purchase or sale, directly or indirectly, of securities of the Company
for as long as you or your representatives are in possession of material
non-public information about the Company.
(7) This agreement shall be governed by the laws of the Commonwealth of
Massachusetts applicable to agreements made and to be performed within.
It is further agreed that the intention of NewsEdge Corporation to engage in
these discussions, and the subsequent exercise of that intention shall be kept
confidential by you.
[BROADVIEW LOGO]
Mr. David Hanssens May 16, 2001
Page 3
Acceptance of the above terms shall be indicated by having this letter
countersigned on your behalf and returning one original to Broadview.
Sincerely,
BROADVIEW INTERNATIONAL LLC
For: NewsEdge Corporation
By: /s/ Rodd Langenhagen
------------------------------
Rodd Langenhagen
Received and consented to this
17th day of May, 2001.
WEST GROUP
By: /s/ David Hanssens
------------------------------
David Hanssens
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated as of August 6, 2001 (this
"Agreement"), among THE THOMSON CORPORATION, a corporation incorporated under
the laws of the Province of Ontario ("Parent"), INFOBLADE ACQUISITION
CORPORATION, a Delaware corporation and an indirect wholly owned subsidiary of
Parent ("Purchaser"), and each of the parties identified on Schedule I hereto
(each, a "Stockholder" and, collectively, the "Stockholders"), as individual
stockholders of NEWSEDGE CORPORATION, a Delaware corporation (the "Company"),
W I T N E S S E T H:
WHEREAS, the Purchaser wishes to commence an offer to all
stockholders of the Company to tender their shares of Common Stock, par value
$0.01, of the Company for the offer price of $2.30 per share of Common Stock
(the "Offer");
WHEREAS, concurrently with the execution of this Agreement, Parent
and Purchaser are entering into an Agreement and Plan of Merger dated as of the
date hereof (the "Merger Agreement"; capitalized terms used and not otherwise
defined herein shall have the respective meanings assigned to them in the Merger
Agreement) with the Company, pursuant to which (i) Purchaser will commence the
Offer, and (ii) following consummation of the Offer, Purchaser shall merge with
and into the Company;
WHEREAS, as a condition to entering into the Merger Agreement and
incurring the obligations set forth therein, including the Offer, Parent and
Purchaser have required that each of the Stockholders enter into this Agreement
in order to provide for the tender of their respective Shares (as defined below)
to the Offer and the voting of such Shares at any meeting of the stockholders of
the Company in favor of the approval and adoption of the Merger Agreement, the
Merger and all the transactions contemplated by the Merger Agreement and
otherwise in such manner as may be necessary to consummate the Merger; and
WHEREAS, the Stockholders believe that it is in the best interests
of the Company and its stockholders to induce Parent and Purchaser to enter into
the Merger Agreement and, therefore, the Stockholders are willing to enter into
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
TENDER OF SHARES; OPTIONS
SECTION 1.01. TENDER OF SHARES. Each Stockholder, severally but not
jointly, agrees that, as soon as practicable following commencement of the
Offer, such Stockholder shall tender or cause to be tendered all of such
Stockholder's respective
Shares (as defined below) pursuant to and in accordance with the terms of the
Offer, and shall not withdraw such Shares from the Offer unless the Offer is
terminated. Each Stockholder, severally but not jointly, acknowledges and agrees
that Purchaser's obligation to accept for payment the shares of Common Stock in
the Offer, including any Shares tendered by such Stockholder, is subject to the
terms and conditions of the Offer. For the purposes of this Agreement "Shares"
shall mean: (i) all shares of Common Stock of the Company and all such shares of
Common Stock issuable upon the exercise or conversion of options, warrants and
other rights to acquire shares of Common Stock (other than those which are
cancelled in accordance with Sections 3.07 and 3.08 of the Merger Agreement or
Section 1.02 hereof) owned of record and /or beneficially by each Stockholder as
of the date of this Agreement; and (ii) all additional shares of Common Stock of
the Company (including any shares of Common Stock received as a result of a
stock split, recapitalization, combination, exchange of shares or the like) and
all additional such shares of Common Stock issuable upon the exercise or
conversion of additional options, warrants and other rights to acquire shares of
Common Stock of the Company (other than those which are cancelled in accordance
with Sections 3.07 and 3.08 of the Merger Agreement or Section 1.02 hereof)
which each Stockholder acquires ownership of, of record and/or beneficially,
during the period from the date of this Agreement through the termination of the
Offer. When used with respect to any Share, the "beneficial ownership" thereof
or similar terms means the power to vote or dispose of, or direct the voting or
disposition of, such Share. Each Stockholder hereby agrees, while this Agreement
is in effect, to promptly notify Parent and Purchaser of the number of any new
Shares acquired by such Stockholder, if any, after the date hereof.
SECTION 1.02. OPTIONS. Each Stockholder, severally but not jointly,
agrees, subject to the terms and conditions of the Merger Agreement, to the
cancellation of each outstanding option and/or warrant to purchase shares of
Common Stock of the Company held by such Stockholder as set forth on Schedule I
hereto, in exchange for the consideration, if any, described in Sections 3.07
and 3.08 of the Merger Agreement.
ARTICLE II
VOTING AGREEMENT
SECTION 2.01. VOTING AGREEMENT. Each Stockholder, severally but not
jointly, hereby agrees that, from and after the date hereof and until the
Expiration Date, at any meeting of the stockholders of the Company, however
called, and in any action by consent of the stockholders of the Company, such
Stockholder shall vote (or cause to be voted) such Stockholder's Shares (i) in
favor of the approval and adoption of the Merger Agreement, the Merger and all
the transactions contemplated by the Merger Agreement and this Agreement and
otherwise in such manner as may be necessary to consummate the Merger; (ii)
except as otherwise agreed to in writing by Parent, against any action,
proposal, agreement or transaction that would result in a breach of any
covenant, obligation, agreement, representation or warranty of the Company under
the Merger Agreement or of the Stockholder contained in this Agreement; and
(iii) against (A) any action, agreement or transaction that would impair or
materially delay the ability
2
of the Company to consummate the transactions provided for in the Merger
Agreement or (B) any Acquisition Proposal.
SECTION 2.02. IRREVOCABLE PROXY. Each Stockholder hereby irrevocably
appoints Parent and each of Parent's executive officers as such Stockholder's
true and lawful attorney, agent and proxy, to vote and otherwise act (by written
consent or otherwise) with respect to such Stockholder's Shares at any meeting
of stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or by written consent in lieu of any such
meeting or otherwise, on the matters and in the manner specified in Section
2.01, giving and granting to such Stockholder's attorney, agent and proxy the
full power and authority to do and perform each and every act and thing whether
necessary or desirable to be done in and about the premises, as fully as it
might or could do if personally present with full power of substitution,
appointment and revocation, hereby ratifying and confirming all that such
Stockholder's attorney, agent and proxy shall do or cause to be done by virtue
hereof (the "Irrevocable Proxy"). THIS PROXY AND POWER OF ATTORNEY ARE
IRREVOCABLE (UNTIL THE EXPIRATION DATE) AND COUPLED WITH AN INTEREST AND, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, SHALL BE VALID AND BINDING ON ANY PERSON
TO WHOM A STOCKHOLDER MAY TRANSFER ANY OF SUCH STOCKHOLDER'S SHARES IN BREACH OF
THIS AGREEMENT. Each Stockholder hereby revokes all other proxies and powers of
attorney with respect to such Stockholder's Shares that may have heretofore been
appointed or granted, and no subsequent proxy or power of attorney shall be
given or written consent executed (and if given or executed, shall not be
effective) by any Stockholder with respect thereto prior to the Expiration Date.
All authority herein conferred or agreed to be conferred shall survive the death
or incapacity of any Stockholder and the termination of the Irrevocable Proxy
and any obligation of the Stockholder under this Agreement shall be binding upon
the heirs, personal representatives, successors and assigns of such Stockholder.
This proxy shall terminate on the Expiration Date.
SECTION 2.03. CONFLICTS. In the case of any Stockholder who is a
director of the Company, no provision of this Agreement, including Section 5.02
hereof, shall prevent or interfere with such Stockholder's performance of such
Stockholder's obligations, if any, solely in such Stockholder's capacity as a
director of the Company, including, without limitation, the fulfillment of such
Stockholder's fiduciary duties, and in no event shall such performance
constitute a breach of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder, severally but not jointly, hereby represents and
warrants to Parent and Purchaser as follows:
SECTION 3.01. LEGAL CAPACITY. Such Stockholder has all legal
capacity to enter into this Agreement, to carry out such Stockholder's
obligations hereunder and to consummate the transactions contemplated hereby.
3
SECTION 3.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each Stockholder
has all necessary right, power and authority to execute and deliver this
Agreement, to perform such Stockholder's obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by such Stockholder and constitutes a legal, valid and
binding obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
SECTION 3.03. NO CONFLICT. (a) The execution and delivery of this
Agreement by such Stockholder do not, and the performance of this Agreement by
such Stockholder shall not, (i) conflict with or violate its organizational
documents, if applicable, (ii) to the knowledge of such Stockholder, conflict
with or violate any Law applicable to such Stockholder (in such Stockholder's
capacity as a Stockholder) or by which the Shares of such Stockholder are bound
or affected or (iii) result in any breach of, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the Shares of
such Stockholder pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise, judgment, injunction, order,
decree or other instrument or obligation to which such Stockholder is a party or
by which such Stockholder or the Shares of such Stockholder are bound or
affected, except for any such conflicts, violations, breaches, defaults or other
occurrences that would not prevent or materially delay consummation of the
transactions contemplated by this Agreement or otherwise prevent or materially
delay such Stockholder from performing its obligations under this Agreement.
(b) To the knowledge of such Stockholder, the execution and delivery
of this Agreement by such Stockholder do not, and the performance of this
Agreement by such Stockholder shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except (i) for applicable requirements, if any, of the Exchange Act,
and (ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not prevent or
materially delay consummation of the transactions contemplated by this Agreement
or otherwise prevent or materially delay such Stockholder from performing its
obligations under this Agreement.
SECTION 3.04. TITLE TO THE SHARES. As of the date hereof, such
Stockholder is the sole record and/or beneficial owner of, and has good and
unencumbered title to, the number of shares of Common Stock and/or the options
and/or warrants to purchase shares of Common Stock set forth in respect of such
Stockholder on Schedule I hereto. Such Shares are all the securities of the
Company owned, either of record and/or beneficially, by such Stockholder and
such Stockholder does not have any option or other right to acquire any other
securities of the Company. The Shares owned by such Stockholder are owned free
and clear of all Liens, other than any Liens created by this Agreement. Except
as provided in this Agreement, such Stockholder has not appointed or granted any
proxy, which appointment or grant is still effective, with respect to the Shares
owned by such Stockholder and none of the Shares owned of record and/or
4
beneficially by such Stockholder are subject to any voting trust or other
agreement or arrangement with respect to the voting of such Shares.
SECTION 3.06. INTERMEDIARY FEES. No investment banker, broker,
finder or other intermediary is, or shall be, entitled to a fee or commission
from Parent, Purchaser or the Company in respect of this Agreement based on any
arrangement or agreement made by or, to the knowledge of the Stockholder, on
behalf of such Stockholder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and
warrant to each Stockholder as follows:
SECTION 4.01. CORPORATE ORGANIZATION. Each of Parent and Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing or in good
standing or to have such power, authority and governmental approvals would not
prevent or materially delay consummation of the transactions contemplated by
this Agreement or otherwise prevent or materially delay Parent or Purchaser from
performing their respective obligations under this Agreement.
SECTION 4.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent
and Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery of this Agreement by Parent and Purchaser and the performance by
Parent and Purchaser of their obligations hereunder have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Parent or Purchaser are necessary to authorize this Agreement.
This Agreement has been duly and validly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and delivery by each of the
Stockholders, constitutes a legal, valid and binding obligation of each of
Parent and Purchaser enforceable against each of Parent and Purchaser in
accordance with its terms.
SECTION 4.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by Parent and Purchaser do not, and the
performance of this Agreement by Parent and Purchaser shall not, (i) conflict
with or violate the Certificate of Incorporation or By-laws of Parent or
Purchaser and (ii) conflict with or violate any Law applicable to Parent or
Purchaser, except any such conflicts or violations that would not prevent or
materially delay consummation of the transactions contemplated by this Agreement
or otherwise prevent or materially delay Parent or Purchaser from performing its
obligations under this Agreement.
5
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
shall not, require any consent, approval, authorization or permit of, or filing
with, or notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the
transactions contemplated by this Agreement or otherwise prevent or materially
delay Parent or Purchaser from performing its obligations under this Agreement.
ARTICLE V
COVENANTS OF THE STOCKHOLDERS
SECTION 5.01. NO PROXY, DISPOSITION OR ENCUMBRANCE OF SHARES. Each
Stockholder, severally but not jointly, hereby agrees that, except as
contemplated by this Agreement or with the prior written consent of Parent, such
Stockholder shall not, prior to the Expiration Date, (i) grant any proxies or
voting rights or enter into any voting trust or other agreement or arrangement
with respect to the voting of any Shares of such Stockholder, (ii) sell, assign,
transfer, encumber, pledge or hypothecate or otherwise dispose of, or enter into
any contract, option or other arrangement or understanding with respect to the
direct or indirect sale, assignment, transfer, encumbrance, pledge,
hypothecation or other disposition of, any such Shares or interest therein, or
create or permit to exist any Liens of any nature whatsoever with respect to,
any of such Shares, (iii) take any action that would make any representation or
warranty of such Stockholder herein untrue or incorrect or have the effect of
preventing or materially impairing such Stockholder from performing such
Stockholder's obligations hereunder, (iv) directly or indirectly, initiate,
solicit or encourage any person to take actions that could reasonably be
expected to lead to the occurrence of any of the foregoing or (v) agree or
consent to, or offer to do, any of the foregoing.
SECTION 5.02. NO SOLICITATION OF TRANSACTIONS. Subject to Section
2.03 hereof, each Stockholder, severally and not jointly, agrees that between
the date of this Agreement and the Expiration Date, such Stockholder shall not,
directly or indirectly, (i) solicit, initiate or take any action intended to
encourage the submission of any Acquisition Proposal, or (ii) participate in any
discussions or negotiations regarding, or furnish to any person, any information
with respect to, or otherwise cooperate in any way with respect to, or assist or
participate in, or take any action intended to facilitate or encourage, any
proposal that constitutes, or may reasonably be expected to lead to, an
Acquisition Proposal.
SECTION 5.03. FURTHER ACTION; REASONABLE BEST EFFORTS. Upon the
terms and subject to the conditions hereof, Parent, Purchaser and each
Stockholder shall use their reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws to consummate and make
effective this Agreement and the transactions contemplated hereby.
6
SECTION 5.04. DISCLOSURE. Each Stockholder agrees to permit Parent
and Purchaser to publish and disclose in the Offer Documents, Proxy Statement
and related filings under the securities laws such Stockholder's identity and
ownership of such Stockholder's Shares and the nature of such Stockholder's
commitments, arrangements and understandings under this Agreement.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. TERMINATION. This Agreement shall terminate, and no
party shall have any rights or obligations hereunder and this Agreement shall
become null and void and have no further effect upon the earlier to occur of (i)
such date and time as the Merger Agreement shall have been validly terminated
pursuant to Article IX thereof and (ii) the Effective Time (the "Expiration
Date"). Nothing in this Section 6.01 shall relieve any party of liability for
any willful breach of this Agreement. Parent and Purchaser acknowledge that, in
the event of termination of this Agreement, Stockholders shall no longer have
the obligation to tender, and may withdraw, their Shares. Parent acknowledges
and agrees that this Agreement shall not be binding upon any Stockholder in the
event that the Merger Agreement shall be amended by the parties thereto to lower
or change the form of consideration set forth in the definition of Merger
Consideration (as defined in the Merger Agreement).
SECTION 6.02. AMENDMENT. This Agreement may not be amended except by
an instrument in writing signed by all the parties hereto.
SECTION 6.03. WAIVER. Any party to this Agreement may (i) extend the
time for the performance of any obligation or other act of any other party
hereto, (ii) waive any inaccuracy in the representations and warranties of
another party contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any agreement of another party contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 6.04. NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy, or by registered or certified mail (postage prepaid, return receipt
requested) to the Parent or Purchaser specified below, or specified (in the case
of each Stockholder) adjacent to each Stockholder's name in Schedule I:
if to Parent or Purchaser:
The Thomson Corporation
Metro Center, One Station Plaza
Stamford, CT 06902
Telecopy: (203) 348-5718
Attention: General Counsel
7
with a copy to:
Torys
237 Park Avenue
New York, New York 10017
Telecopy: (212) 682-0200
Attention: Joseph J. Romagnoli, Esq.
SECTION 6.05. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
SECTION 6.06. ASSIGNMENT. This Agreement shall not be assigned by
operation of Law or otherwise, except that Parent and Purchaser may assign all
or any of their rights and obligations hereunder to any affiliate of Parent,
provided that no such assignment shall relieve Parent or Purchaser of its
obligations hereunder if such assignee does not perform such obligations.
SECTION 6.07. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 6.08. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance and injunctive and other equitable relief to
enforce the performance of this Agreement in addition to any other remedy at law
or in equity.
SECTION 6.09. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that State.
SECTION 6.10. WAIVER OF JURY TRIAL. Each of the parties hereto
hereby waives to the fullest extent permitted by applicable law any right it may
have to a trial by jury with respect to any actions or proceedings directly or
indirectly arising out of, under or in connection with this Agreement.
SECTION 6.11. EXPENSES. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements
8
of counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
SECTION 6.12. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 6.13. COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
9
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
/s/ Stockholder
----------------------------------
Name: Name of Stockholder
THE THOMSON CORPORATION
By: /s/ Michael S. Harris
----------------------------------
Name: Michael S. Harris
Title: Senior Vice President,
General Counsel and Secretary
INFOBLADE ACQUISITION CORPORATION
By: /s/ Kenneth Carson
----------------------------------
Name: Kenneth Carson
Title: Vice President
10
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
Ronald R. Benanto 9,412 300,000 5,333 314,745
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
Rory J. Cowan 70,294 32,500 20,000 122,794
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
James Daniell 6,500 25,000 -- 31,500
SCHEDULE I
Name and Address Common Stock Options Warrants Total Shares
- ---------------- ------------ ------- -------- ------------
Murat H. Davidson, Jr. 87,224 20,000 26,666 133,890
SCHEDULE I
Name and Address Common Stock Options Warrants Total Shares
- ---------------- ------------ ------- -------- ------------
William A. Devereaux 230,556 56,001 -- 286,557
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
Michael Kolowich 105,861 -- 8,000 113,861
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
Donald McLagan 1,707,557 -- -- 1,707,557
40 Plympton Road
Sudbury, MA
Marnie Elizabeth 221,221 -- -- 221,221
McLagan Trust of 1993
Christopher R. McLagan 221,221 -- -- 221,221
Trust of 1993
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
Clifford M. Pollan 127,744 845,500 5,333 978,577
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
Basil P. Regan 90,729 20,000 13,333 124,062
Regan Partners,L.P. 3,172,382 173,333 3,345,715
600 Madison Avenue
26th Floor
New York, NY 10022
Regan International 1,225,000 -- 73,333 1,298,333
Fund Ltd.
600 Madison Avenue
26th Floor
New York, NY 10022
Wellcome Trust-JD84 445,588 -- 153,333 598,921
600 Madison Avenue
26th Floor
New York, NY 10022
Deutsche Daiwa 353,500 -- -- 353,500
Super Hedge Fund
600 Madison Avenue
26th Floor
New York, NY 10022
SCHEDULE I
NAME AND ADDRESS COMMON STOCK OPTIONS WARRANTS TOTAL SHARES
- ---------------- ------------ ------- -------- ------------
Peter Woodward 6,000 20,000 -- 26,000
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and Ronald Benanto (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as Vice President of Finance and
Chief Financial Officer of the Company pursuant to an Amended and Restated
Executive Employment Agreement dated as of April 1, 2001 (the "Original
Employment Agreement") between the Company and the Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's Vice
President of Finance and Chief Finance Officer, reporting to the Company's
President and Chief Executive Officer (the Executive's "Supervisor") and having
such powers and duties consistent with his position as may reasonably be
assigned to him from time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$210,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 40% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $210,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
-2-
to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other provision of
this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination and (subject
to Section 3(D) below), will likewise continue to provide the Executive
with the benefits that he was receiving at the time of termination (or, if
the Company is unable to do so because
-3-
such benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or operations over which Executive has substantial responsibility
from the date hereof to the date of termination of the Executive's employment
with the Company (or an affiliate thereof), being
-4-
hereinafter referred to as the "Restricted Activity"); (ii) his services to the
Company and Thomson have been and will be special and unique; (iii) his work for
the Company and Thomson will give him access to trade secrets of and
confidential information concerning the Company, Thomson and their affiliated
companies; (iv) the Restricted Activity is national and international in scope;
(v) the Company would not have entered into this Agreement but for the
agreements and covenants contained in this Section 5; (vi) he has the means to
support himself and his dependents other than by engaging in the Restricted
Activity and the provisions of this Section 5 will not impair such ability; and
(vii) the agreements and covenants contained in this Section 5 are essential to
protect the business and goodwill of the Company, Thomson and their affiliates.
In order to induce the Company to enter into this Agreement, and in
consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors, licensees or partners of the
Company or Thomson, including, without limitation, all information concerning
trade secrets and the products or projects of the Company or Thomson and/or any
-5-
improvements therein, all sales and financial information concerning the Company
or Thomson, all customer and supplier lists, all information concerning projects
in research and development or marketing plans for any such products or
projects, all information concerning technical data, designs, patterns,
formulae, computer programs, source code, object code, algorithms and
subroutines of the Company or Thomson, and all information in any way concerning
the products, projects, activities, business or affairs of customers of the
Company or Thomson which is furnished to the Executive by the Company or Thomson
or any of their respective employees (current or former), agents or customers,
as such; provided, however, that the term "confidential material" shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by the Executive, (b) was available to the
Executive on a non-confidential basis prior to his employment with the Company
or (c) becomes available to the Executive on a non-confidential basis from a
source other than the Company or Thomson or any of their agents, franchisees,
creditors, suppliers, lessors, lessees, licensors, licensees, partners or
customers provided that such source is not bound by a confidentiality agreement
with the Company or Thomson or any of such agents or customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's right,
title and interest throughout the world in and to all Developments. The
Executive agrees that such Developments shall constitute works made for hire
under the copyright laws of the United States and hereby assigns to the Company
all copyrights, patents and other proprietary rights the Executive may have in
such Developments. The Executive shall make and maintain adequate and current
written records of all Developments, and the Executive shall disclose all
developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request, provided, however, that
developments excluded under the following paragraph shall be received by the
Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to exclude from the restrictions set
forth in the previous paragraph because it was developed by the Executive prior
to the commencement of his employment by the Company. There shall also be
-6-
excluded from the restrictions set forth in the previous paragraph any
Development made by the Executive (a) which is developed by the Executive
without the use of the Company's property or facilities, (b) which does not make
any use of confidential information, (c) which is developed by the Executive
entirely on his own time, and (d) which does not relate to the Company's
business or to the Company's ongoing or planned research and development
efforts. At any time at the request of the Company (and at the Company's
expense), the Executive shall execute all documents and perform all lawful acts
the Company considers necessary or advisable to secure its rights hereunder and
to carry out the intent of this Section 5(D). At any time upon the request of
the Company, the Executive shall return promptly to the Company all the
Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at its address set forth in the first
paragraph hereof (or to such other address as the recipient party may have
furnished to the
-7-
sending party for the purpose pursuant to this section) and, with respect to any
notice given on or prior to the Effective Date, with a copy sent to the
Purchaser at its address set forth in the Merger Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
the Stockholders Agreement between the Executive and the Company and Section
3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
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IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ Ronald Benanto
- -----------------------------------
Ronald Benanto
COMPANY:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
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AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and John Crozier (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as Vice President, North American
Sales of the Company pursuant to an Amended and Restated Executive Employment
Agreement dated as of April 1, 2001 (the "Original Employment Agreement")
between the Company and the Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's Vice
President, North American Sales, reporting to the Company's President and Chief
Executive Officer (the Executive's "Supervisor") and having such powers and
duties consistent with his position as may reasonably be assigned to him from
time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$180,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 50% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $180,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
-2-
to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination, and
(subject to Section 3(D) below), will likewise continue to provide the
Executive with the benefits that he was receiving at the time of
termination (or, if the Company is unable to do so because
-3-
such benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or operations over which Executive has substantial responsibility
from the date hereof to the date of termination of the Executive's employment
with the Company (or an affiliate thereof), being
-4-
hereinafter referred to as the "Restricted Activity"); (ii) his services to the
Company and Thomson have been and will be special and unique; (iii) his work for
the Company and Thomson will give him access to trade secrets of and
confidential information concerning the Company, Thomson and their affiliated
companies; (iv) the Restricted Activity is national and international in scope;
(v) the Company would not have entered into this Agreement but for the
agreements and covenants contained in this Section 5; (vi) he has the means to
support himself and his dependents other than by engaging in the Restricted
Activity and the provisions of this Section 5 will not impair such ability; and
(vii) the agreements and covenants contained in this Section 5 are essential to
protect the business and goodwill of the Company, Thomson and their affiliates.
In order to induce the Company to enter into this Agreement, and in
consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors, licensees or partners of the
Company or Thomson, including, without limitation, all information concerning
trade secrets and the products or projects of the Company or Thomson and/or any
-5-
improvements therein, all sales and financial information concerning the Company
or Thomson, all customer and supplier lists, all information concerning projects
in research and development or marketing plans for any such products or
projects, all information concerning technical data, designs, patterns,
formulae, computer programs, source code, object code, algorithms and
subroutines of the Company or Thomson, and all information in any way concerning
the products, projects, activities, business or affairs of customers of the
Company or Thomson which is furnished to the Executive by the Company or Thomson
or any of their respective employees (current or former), agents or customers,
as such; provided, however, that the term "confidential material" shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by the Executive, (b) was available to the
Executive on a non-confidential basis prior to his employment with the Company
or (c) becomes available to the Executive on a non-confidential basis from a
source other than the Company or Thomson or any of their agents, franchisees,
creditors, suppliers, lessors, lessees, licensors, licensees, partners or
customers provided that such source is not bound by a confidentiality agreement
with the Company or Thomson or any of such agents or customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's
right, title and interest throughout the world in and to all Developments.
The Executive agrees that such Developments shall constitute works made for
hire under the copyright laws of the United States and hereby assigns to the
Company all copyrights, patents and other proprietary rights the Executive
may have in such Developments. The Executive shall make and maintain adequate
and current written records of all Developments, and the Executive shall
disclose all developments promptly, fully and in writing to the Company
promptly after development of the same, and at any time upon request,
provided, however, that developments excluded under the following paragraph
shall be received by the Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to exclude from the restrictions set
forth in the previous paragraph because it was developed by the Executive prior
to the commencement of his employment by the Company. There shall also be
-6-
excluded from the restrictions set forth in the previous paragraph any
Development made by the Executive (a) which is developed by the Executive
without the use of the Company's property or facilities, (b) which does not make
any use of confidential information, (c) which is developed by the Executive
entirely on his own time, and (d) which does not relate to the Company's
business or to the Company's ongoing or planned research and development
efforts. At any time at the request of the Company (and at the Company's
expense), the Executive shall execute all documents and perform all lawful acts
the Company considers necessary or advisable to secure its rights hereunder and
to carry out the intent of this Section 5(D). At any time upon the request of
the Company, the Executive shall return promptly to the Company all the
Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at its address set forth in the first
paragraph hereof (or to such other address as the recipient party may have
furnished to the
-7-
sending party for the purpose pursuant to this section) and, with respect to any
notice given on or prior to the Effective Date, with a copy sent to the
Purchaser at its address set forth in the Merger Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
Section 3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
-8-
IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ John Crozier
- -----------------------------------
John Crozier
COMPANY:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
-9-
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and Thomas Karanian (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as Vice President, Development,
Operations and Customer Service of the Company pursuant to an Amended and
Restated Executive Employment Agreement dated as of April 1, 2001 (the "Original
Employment Agreement") between the Company and the Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's Vice
President, Development, Operations and Customer Service, reporting to the
Company's President and Chief Executive Officer (the Executive's "Supervisor")
and having such powers and duties consistent with his position as may reasonably
be assigned to him from time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$185,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 40% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $185,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
-2-
to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination, and
(subject to Section 3(D) below), will likewise continue to provide the
Executive with the benefits that he was receiving at the time of
termination (or, if the Company is unable to do so because
-3-
such benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or operations over which Executive has substantial responsibility
from the date hereof to the date of termination of the Executive's employment
with the Company (or an affiliate thereof), being
-4-
hereinafter referred to as the "Restricted Activity"); (ii) his services to the
Company and Thomson have been and will be special and unique; (iii) his work for
the Company and Thomson will give him access to trade secrets of and
confidential information concerning the Company, Thomson and their affiliated
companies; (iv) the Restricted Activity is national and international in scope;
(v) the Company would not have entered into this Agreement but for the
agreements and covenants contained in this Section 5; (vi) he has the means to
support himself and his dependents other than by engaging in the Restricted
Activity and the provisions of this Section 5 will not impair such ability; and
(vii) the agreements and covenants contained in this Section 5 are essential to
protect the business and goodwill of the Company, Thomson and their affiliates.
In order to induce the Company to enter into this Agreement, and in
consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors, licensees or partners of the
Company or Thomson, including, without limitation, all information concerning
trade secrets and the products or projects of the Company or Thomson and/or any
-5-
improvements therein, all sales and financial information concerning the Company
or Thomson, all customer and supplier lists, all information concerning projects
in research and development or marketing plans for any such products or
projects, all information concerning technical data, designs, patterns,
formulae, computer programs, source code, object code, algorithms and
subroutines of the Company or Thomson, and all information in any way concerning
the products, projects, activities, business or affairs of customers of the
Company or Thomson which is furnished to the Executive by the Company or Thomson
or any of their respective employees (current or former), agents or customers,
as such; provided, however, that the term "confidential material" shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by the Executive, (b) was available to the
Executive on a non-confidential basis prior to his employment with the Company
or (c) becomes available to the Executive on a non-confidential basis from a
source other than the Company or Thomson or any of their agents, franchisees,
creditors, suppliers, lessors, lessees, licensors, licensees, partners or
customers provided that such source is not bound by a confidentiality agreement
with the Company or Thomson or any of such agents or customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's right,
title and interest throughout the world in and to all Developments. The
Executive agrees that such Developments shall constitute works made for hire
under the copyright laws of the United States and hereby assigns to the Company
all copyrights, patents and other proprietary rights the Executive may have in
such Developments. The Executive shall make and maintain adequate and current
written records of all Developments, and the Executive shall disclose all
developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request, provided, however, that
developments excluded under the following paragraph shall be received by the
Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to exclude from the restrictions set
forth in the previous paragraph because it was developed by the Executive prior
to the commencement of his employment by the Company. There shall also be
-6-
excluded from the restrictions set forth in the previous paragraph any
Development made by the Executive (a) which is developed by the Executive
without the use of the Company's property or facilities, (b) which does not make
any use of confidential information, (c) which is developed by the Executive
entirely on his own time, and (d) which does not relate to the Company's
business or to the Company's ongoing or planned research and development
efforts. At any time at the request of the Company (and at the Company's
expense), the Executive shall execute all documents and perform all lawful acts
the Company considers necessary or advisable to secure its rights hereunder and
to carry out the intent of this Section 5(D). At any time upon the request of
the Company, the Executive shall return promptly to the Company all the
Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at its address set forth in the first
paragraph hereof (or to such other address as the recipient party may have
furnished to the
-7-
sending party for the purpose pursuant to this section) and, with respect to any
notice given on or prior to the Effective Date, with a copy sent to the
Purchaser at its address set forth in the Merger Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
Section 3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
-8-
IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ Thomas Karanian
- -----------------------------------
Thomas Karanian
COMPANY:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
-9-
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and Lee Phillips (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as Vice President, Product
Marketing of the Company pursuant to an Amended and Restated Executive
Employment Agreement dated as of April 1, 2001 (the "Original Employment
Agreement") between the Company and the Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's Vice
President, Product Marketing, reporting to the Company's President and Chief
Executive Officer (the Executive's "Supervisor") and having such powers and
duties consistent with his position as may reasonably be assigned to him from
time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$150,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 40% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $150,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
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to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination, and
(subject to Section 3(D) below), will likewise continue to provide the
Executive with the benefits that he was receiving at the time of
termination (or, if the Company is unable to do so because
-3-
such benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or operations over which Executive has substantial responsibility
from the date hereof to the date of termination of the Executive's employment
with the Company (or an affiliate thereof), being
-4-
hereinafter referred to as the "Restricted Activity"); (ii) his services to the
Company and Thomson have been and will be special and unique; (iii) his work for
the Company and Thomson will give him access to trade secrets of and
confidential information concerning the Company, Thomson and their affiliated
companies; (iv) the Restricted Activity is national and international in scope;
(v) the Company would not have entered into this Agreement but for the
agreements and covenants contained in this Section 5; (vi) he has the means to
support himself and his dependents other than by engaging in the Restricted
Activity and the provisions of this Section 5 will not impair such ability; and
(vii) the agreements and covenants contained in this Section 5 are essential to
protect the business and goodwill of the Company, Thomson and their affiliates.
In order to induce the Company to enter into this Agreement, and in
consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors, licensees or partners of the
Company or Thomson, including, without limitation, all information concerning
trade secrets and the products or projects of the Company or Thomson and/or any
-5-
improvements therein, all sales and financial information concerning the Company
or Thomson, all customer and supplier lists, all information concerning projects
in research and development or marketing plans for any such products or
projects, all information concerning technical data, designs, patterns,
formulae, computer programs, source code, object code, algorithms and
subroutines of the Company or Thomson, and all information in any way concerning
the products, projects, activities, business or affairs of customers of the
Company or Thomson which is furnished to the Executive by the Company or Thomson
or any of their respective employees (current or former), agents or customers,
as such; provided, however, that the term "confidential material" shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by the Executive, (b) was available to the
Executive on a non-confidential basis prior to his employment with the Company
or (c) becomes available to the Executive on a non-confidential basis from a
source other than the Company or Thomson or any of their agents, franchisees,
creditors, suppliers, lessors, lessees, licensors, licensees, partners or
customers provided that such source is not bound by a confidentiality agreement
with the Company or Thomson or any of such agents or customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's right,
title and interest throughout the world in and to all Developments. The
Executive agrees that such Developments shall constitute works made for hire
under the copyright laws of the United States and hereby assigns to the Company
all copyrights, patents and other proprietary rights the Executive may have in
such Developments. The Executive shall make and maintain adequate and current
written records of all Developments, and the Executive shall disclose all
developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request, provided, however, that
developments excluded under the following paragraph shall be received by the
Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to exclude from the restrictions set
forth in the previous paragraph because it was developed by the Executive prior
to the commencement of his employment by the Company. There shall also be
-6-
excluded from the restrictions set forth in the previous paragraph any
Development made by the Executive (a) which is developed by the Executive
without the use of the Company's property or facilities, (b) which does not make
any use of confidential information, (c) which is developed by the Executive
entirely on his own time, and (d) which does not relate to the Company's
business or to the Company's ongoing or planned research and development
efforts. At any time at the request of the Company (and at the Company's
expense), the Executive shall execute all documents and perform all lawful acts
the Company considers necessary or advisable to secure its rights hereunder and
to carry out the intent of this Section 5(D). At any time upon the request of
the Company, the Executive shall return promptly to the Company all the
Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at its address set forth in the first
paragraph hereof (or to such other address as the recipient party may have
furnished to the
-7-
sending party for the purpose pursuant to this section) and, with respect to any
notice given on or prior to the Effective Date, with a copy sent to the
Purchaser at its address set forth in the Merger Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
Section 3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
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IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ Lee Phillips
- -----------------------------------
Lee Phillips
COMPANY:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
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AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and Cliff Pollan (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as President and Chief Executive
Officer of the Company pursuant to an Amended and Restated Executive Employment
Agreement dated as of April 1, 2001 (the "Original Employment Agreement")
between the Company and the Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's
President and Chief Executive Officer, reporting to the President and Chief
Executive Officer of Dialog (the Executive's "Supervisor") and having such
powers and duties consistent with his position as may reasonably be assigned to
him from time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$275,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 40% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $365,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
-2-
to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination and will pay
the Executive an amount equal to the maximum amount of the Executive's
bonus pursuant to Section 2(B) hereof as of the date of such termination
payable in twelve (12) equal monthly
-3-
installments, and (subject to Section 3(D) below), will likewise continue
to provide the Executive with the benefits that he was receiving at the
time of termination (or, if the Company is unable to do so because such
benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or
-4-
operations over which Executive has substantial responsibility from the date
hereof to the date of termination of the Executive's employment with the Company
(or an affiliate thereof), being hereinafter referred to as the "Restricted
Activity"); (ii) his services to the Company and Thomson have been and will be
special and unique; (iii) his work for the Company and Thomson will give him
access to trade secrets of and confidential information concerning the Company,
Thomson and their affiliated companies; (iv) the Restricted Activity is national
and international in scope; (v) the Company would not have entered into this
Agreement but for the agreements and covenants contained in this Section 5; (vi)
he has the means to support himself and his dependents other than by engaging in
the Restricted Activity and the provisions of this Section 5 will not impair
such ability; and (vii) the agreements and covenants contained in this Section 5
are essential to protect the business and goodwill of the Company, Thomson and
their affiliates. In order to induce the Company to enter into this Agreement,
and in consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors,
-5-
licensees or partners of the Company or Thomson, including, without limitation,
all information concerning trade secrets and the products or projects of the
Company or Thomson and/or any improvements therein, all sales and financial
information concerning the Company or Thomson, all customer and supplier lists,
all information concerning projects in research and development or marketing
plans for any such products or projects, all information concerning technical
data, designs, patterns, formulae, computer programs, source code, object code,
algorithms and subroutines of the Company or Thomson, and all information in any
way concerning the products, projects, activities, business or affairs of
customers of the Company or Thomson which is furnished to the Executive by the
Company or Thomson or any of their respective employees (current or former),
agents or customers, as such; provided, however, that the term "confidential
material" shall not include information which (a) becomes generally available to
the public other than as a result of a disclosure by the Executive, (b) was
available to the Executive on a non-confidential basis prior to his employment
with the Company or (c) becomes available to the Executive on a non-confidential
basis from a source other than the Company or Thomson or any of their agents,
franchisees, creditors, suppliers, lessors, lessees, licensors, licensees,
partners or customers provided that such source is not bound by a
confidentiality agreement with the Company or Thomson or any of such agents or
customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's right,
title and interest throughout the world in and to all Developments. The
Executive agrees that such Developments shall constitute works made for hire
under the copyright laws of the United States and hereby assigns to the Company
all copyrights, patents and other proprietary rights the Executive may have in
such Developments. The Executive shall make and maintain adequate and current
written records of all Developments, and the Executive shall disclose all
developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request, provided, however, that
developments excluded under the following paragraph shall be received by the
Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to
-6-
exclude from the restrictions set forth in the previous paragraph because it was
developed by the Executive prior to the commencement of his employment by the
Company. There shall also be excluded from the restrictions set forth in the
previous paragraph any Development made by the Executive (a) which is developed
by the Executive without the use of the Company's property or facilities, (b)
which does not make any use of confidential information, (c) which is developed
by the Executive entirely on his own time, and (d) which does not relate to the
Company's business or to the Company's ongoing or planned research and
development efforts. At any time at the request of the Company (and at the
Company's expense), the Executive shall execute all documents and perform all
lawful acts the Company considers necessary or advisable to secure its rights
hereunder and to carry out the intent of this Section 5(D). At any time upon the
request of the Company, the Executive shall return promptly to the Company all
the Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy
-7-
in complete, readable form), addressed to the recipient party at its address set
forth in the first paragraph hereof (or to such other address as the recipient
party may have furnished to the sending party for the purpose pursuant to this
section) and, with respect to any notice given on or prior to the Effective
Date, with a copy sent to the Purchaser at its address set forth in the Merger
Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
the Stockholders Agreement between the Executive and the Company and Section
3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
-8-
IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
COMPANY:
/s/ Rory Cowan
- -----------------------------------
Rory Cowan
-9-
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and David Scott (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as Vice President, Corporate
Marketing of the Company pursuant to an Executive Employment Agreement dated as
of January 18, 2001 (the "Original Employment Agreement") between the Company
and the Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's Vice
President, Corporate Marketing, reporting to the Company's President and Chief
Executive Officer (the Executive's "Supervisor") and having such powers and
duties consistent with his position as may reasonably be assigned to him from
time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$160,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 40% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $160,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
-2-
to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination, and
(subject to Section 3(D) below), will likewise continue to provide the
Executive with the benefits that he was receiving at the time of
termination (or, if the Company is unable to do so because
-3-
such benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or operations over which Executive has substantial responsibility
from the date hereof to the date of termination of the Executive's employment
with the Company (or an affiliate thereof), being
-4-
hereinafter referred to as the "Restricted Activity"); (ii) his services to the
Company and Thomson have been and will be special and unique; (iii) his work for
the Company and Thomson will give him access to trade secrets of and
confidential information concerning the Company, Thomson and their affiliated
companies; (iv) the Restricted Activity is national and international in scope;
(v) the Company would not have entered into this Agreement but for the
agreements and covenants contained in this Section 5; (vi) he has the means to
support himself and his dependents other than by engaging in the Restricted
Activity and the provisions of this Section 5 will not impair such ability; and
(vii) the agreements and covenants contained in this Section 5 are essential to
protect the business and goodwill of the Company, Thomson and their affiliates.
In order to induce the Company to enter into this Agreement, and in
consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors, licensees or partners of the
Company or Thomson, including, without limitation, all information concerning
trade secrets and the products or projects of the Company or Thomson and/or any
-5-
improvements therein, all sales and financial information concerning the Company
or Thomson, all customer and supplier lists, all information concerning projects
in research and development or marketing plans for any such products or
projects, all information concerning technical data, designs, patterns,
formulae, computer programs, source code, object code, algorithms and
subroutines of the Company or Thomson, and all information in any way concerning
the products, projects, activities, business or affairs of customers of the
Company or Thomson which is furnished to the Executive by the Company or Thomson
or any of their respective employees (current or former), agents or customers,
as such; provided, however, that the term "confidential material" shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by the Executive, (b) was available to the
Executive on a non-confidential basis prior to his employment with the Company
or (c) becomes available to the Executive on a non-confidential basis from a
source other than the Company or Thomson or any of their agents, franchisees,
creditors, suppliers, lessors, lessees, licensors, licensees, partners or
customers provided that such source is not bound by a confidentiality agreement
with the Company or Thomson or any of such agents or customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's right,
title and interest throughout the world in and to all Developments. The
Executive agrees that such Developments shall constitute works made for hire
under the copyright laws of the United States and hereby assigns to the Company
all copyrights, patents and other proprietary rights the Executive may have in
such Developments. The Executive shall make and maintain adequate and current
written records of all Developments, and the Executive shall disclose all
developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request, provided, however, that
developments excluded under the following paragraph shall be received by the
Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to exclude from the restrictions set
forth in the previous paragraph because it was developed by the Executive prior
to the commencement of his employment by the Company. There shall also be
-6-
excluded from the restrictions set forth in the previous paragraph any
Development made by the Executive (a) which is developed by the Executive
without the use of the Company's property or facilities, (b) which does not make
any use of confidential information, (c) which is developed by the Executive
entirely on his own time, and (d) which does not relate to the Company's
business or to the Company's ongoing or planned research and development
efforts. At any time at the request of the Company (and at the Company's
expense), the Executive shall execute all documents and perform all lawful acts
the Company considers necessary or advisable to secure its rights hereunder and
to carry out the intent of this Section 5(D). At any time upon the request of
the Company, the Executive shall return promptly to the Company all the
Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at its address set forth in the first
paragraph hereof (or to such other address as the recipient party may have
furnished to the
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sending party for the purpose pursuant to this section) and, with respect to any
notice given on or prior to the Effective Date, with a copy sent to the
Purchaser at its address set forth in the Merger Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
Section 3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
-8-
IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ David Scott
- -----------------------------------
David Scott
COMPANY:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
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AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and Charles White (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as Vice President, e-Content
Business of the Company pursuant to an Amended and Restated Executive Employment
Agreement dated as of April 1, 2001 (the "Original Employment Agreement")
between the Company and the Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's Vice
President, e-Content Business, reporting to the Company's President and Chief
Executive Officer (the Executive's "Supervisor") and having such powers and
duties consistent with his position as may reasonably be assigned to him from
time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$185,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 40% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $185,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
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to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination, and
(subject to Section 3(D) below), will likewise continue to provide the
Executive with the benefits that he was receiving at the time of
termination (or, if the Company is unable to do so because
-3-
such benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or operations over which Executive has substantial responsibility
from the date hereof to the date of termination of the Executive's employment
with the Company (or an affiliate thereof), being
-4-
hereinafter referred to as the "Restricted Activity"); (ii) his services to the
Company and Thomson have been and will be special and unique; (iii) his work for
the Company and Thomson will give him access to trade secrets of and
confidential information concerning the Company, Thomson and their affiliated
companies; (iv) the Restricted Activity is national and international in scope;
(v) the Company would not have entered into this Agreement but for the
agreements and covenants contained in this Section 5; (vi) he has the means to
support himself and his dependents other than by engaging in the Restricted
Activity and the provisions of this Section 5 will not impair such ability; and
(vii) the agreements and covenants contained in this Section 5 are essential to
protect the business and goodwill of the Company, Thomson and their affiliates.
In order to induce the Company to enter into this Agreement, and in
consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors, licensees or partners of the
Company or Thomson, including, without limitation, all information concerning
trade secrets and the products or projects of the Company or Thomson and/or any
-5-
improvements therein, all sales and financial information concerning the Company
or Thomson, all customer and supplier lists, all information concerning projects
in research and development or marketing plans for any such products or
projects, all information concerning technical data, designs, patterns,
formulae, computer programs, source code, object code, algorithms and
subroutines of the Company or Thomson, and all information in any way concerning
the products, projects, activities, business or affairs of customers of the
Company or Thomson which is furnished to the Executive by the Company or Thomson
or any of their respective employees (current or former), agents or customers,
as such; provided, however, that the term "confidential material" shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by the Executive, (b) was available to the
Executive on a non-confidential basis prior to his employment with the Company
or (c) becomes available to the Executive on a non-confidential basis from a
source other than the Company or Thomson or any of their agents, franchisees,
creditors, suppliers, lessors, lessees, licensors, licensees, partners or
customers provided that such source is not bound by a confidentiality agreement
with the Company or Thomson or any of such agents or customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's right,
title and interest throughout the world in and to all Developments. The
Executive agrees that such Developments shall constitute works made for hire
under the copyright laws of the United States and hereby assigns to the Company
all copyrights, patents and other proprietary rights the Executive may have in
such Developments. The Executive shall make and maintain adequate and current
written records of all Developments, and the Executive shall disclose all
developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request, provided, however, that
developments excluded under the following paragraph shall be received by the
Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to exclude from the restrictions set
forth in the previous paragraph because it was developed by the Executive prior
to the commencement of his employment by the Company. There shall also be
-6-
excluded from the restrictions set forth in the previous paragraph any
Development made by the Executive (a) which is developed by the Executive
without the use of the Company's property or facilities, (b) which does not make
any use of confidential information, (c) which is developed by the Executive
entirely on his own time, and (d) which does not relate to the Company's
business or to the Company's ongoing or planned research and development
efforts. At any time at the request of the Company (and at the Company's
expense), the Executive shall execute all documents and perform all lawful acts
the Company considers necessary or advisable to secure its rights hereunder and
to carry out the intent of this Section 5(D). At any time upon the request of
the Company, the Executive shall return promptly to the Company all the
Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at its address set forth in the first
paragraph hereof (or to such other address as the recipient party may have
furnished to the
-7-
sending party for the purpose pursuant to this section) and, with respect to any
notice given on or prior to the Effective Date, with a copy sent to the
Purchaser at its address set forth in the Merger Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
Section 3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
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IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ Charles White
- -----------------------------------
Charles White
COMPANY:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
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AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement (this
"Agreement") dated as of August 6, 2001 is by and between NEWSEDGE CORPORATION
(the "Company"), a Delaware corporation having its principal executive offices
at 80 Blanchard Road, Burlington, Massachusetts, and Alton Zink (the
"Executive").
WHEREAS, THE THOMSON CORPORATION ("Parent") proposes to acquire the
Company pursuant to that certain Agreement and Plan of Merger dated as of August
6, 2001 ("Merger Agreement") by and among the Company, Parent and INFOBLADE
ACQUISITION CORPORATION ("Purchaser"); and
WHEREAS, the Executive currently serves as Vice President, Human Resources
of the Company pursuant to an Executive Employment Agreement dated as of January
18, 2001 (the "Original Employment Agreement") between the Company and the
Executive; and
WHEREAS, the Company and the Executive desire to amend and restate the
Original Employment Agreement in its entirety as of the date hereof and to
provide for the employment of Executive by the Company from and after the
Effective Date (as hereinafter defined) in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree to amend and restate the Original Employment Agreement in its
entirety as follows:
1. EFFECTIVENESS; EMPLOYMENT OF EXECUTIVE; TERM.
(A) EFFECTIVENESS. The terms and conditions of this Agreement shall
become effective automatically, without further act or deed by the Executive or
the Company, on the date hereof and the Original Employment Agreement is hereby
superseded in its entirety and of no further force and effect, provided,
however, that notwithstanding the foregoing, in the event that the Merger
Agreement is terminated prior to the Effective Time (as defined in the Merger
Agreement), this Agreement shall automatically terminate and have no further
force or effect and the Original Employment Agreement shall be automatically
reinstated upon such termination of the Merger Agreement.
(B) EMPLOYMENT. Subject to the terms and conditions of this
Agreement, during the Term (as hereinafter defined), the Company agrees to
employ the Executive, and the Executive agrees to serve, as the Company's Vice
President, Human Resources, reporting to the Company's President and Chief
Executive Officer (the Executive's "Supervisor") and having such powers and
duties consistent with his position as may reasonably be assigned to him from
time to time.
(C) COMMITMENT. The Executive represents that he is not currently
party to or bound by any commitments that might interfere with or impair his
performance of such duties and responsibilities or that are inconsistent with
his obligations hereunder. The Executive will devote such time and attention to
his duties and responsibilities hereunder as reasonably are required, and will
not undertake any commitments that would interfere with or impair his
performance of such duties and responsibilities.
TERM. The term of the Executive's employment under this Agreement
shall commence on the Effective Date (as defined in Section 4 below) and shall
terminate on the one-year anniversary date of the Effective Date, unless sooner
terminated in accordance with Section 3 of this Agreement (the "Term"). Upon the
expiration of the Term, the Executive's employment with the Company shall be "at
will" and such Executive's employment may be terminated by the Company at any
time upon or after such expiration with or without cause, and that upon such
termination the Executive shall have no rights under this Agreement including,
without limitation, any right to any severance or other termination payments.
2. COMPENSATION. During the Term of the Executive's employment with the
Company hereunder, the Company will compensate the Executive as follows:
(A) SALARY. The Company will pay to the Executive a base salary,
payable in accordance with the payroll practices of the Company, at the rate of
$150,000 per annum. The Executive's base salary shall be subject to annual
review by the Company and Parent.
(B) PERFORMANCE BONUSES. The Executive will be eligible to receive
an annual cash bonus at an annualized rate of up to 45% of his base salary,
based on the achievement of reasonable individual and Company performance
targets to be established by the Company and Parent.
(C) STAY BONUS. If the Executive is an active employee of the
Company on the one-year anniversary (the "Anniversary Date") of the Effective
Date, the Executive will be paid a bonus equal to $150,000.
(D) BENEFITS. The Company will promptly reimburse all out-of-pocket
expenses reasonably incurred by the Executive in the course of performing his
employment duties and responsibilities hereunder, subject to receipt of
appropriate documentation. The Company will also provide consistent with his
position, Company-paid health and life insurance, and with such other fringe
benefits as it from time to time may make generally available to its other
senior executives at the Executive's level.
3. TERMINATION.
(A) EVENTS CAUSING TERMINATION. The Executive's employment hereunder
will terminate upon the occurrence of any of the following events:
(1) The Executive's death, or a determination of his legal
incapacity by a court of competent jurisdiction;
(2) The termination of the Executive's employment hereunder by the
Company, by written notice to the Executive, upon the Executive's
inability due
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to illness or injury to perform the essential functions of his position
with or without reasonable accommodation;
(3) The termination of the Executive's employment hereunder by the
Company, for Cause, by written notice to the Executive;
(4) The termination of the Executive's employment hereunder by the
Company, without Cause, by written notice to the Executive;
(5) The termination of the Executive's employment hereunder by the
Executive, for Good Reason, by thirty (30) days prior written notice to
the Company; or
(6) The expiration of the Term of this Agreement under Section 1(D)
hereof.
(B) "CAUSE" AND "GOOD REASON" DEFINED. For purposes of this
Agreement: "Cause" means: (a) the Executive's conviction of any crime (whether
or not involving the Company) (other than unintentional motor vehicle felonies);
(b) any act of theft, fraud or embezzlement by the Executive in connection with
his work with the Company; or (c) the Executive's continuing, repeated and
willful failure or refusal to perform, or continuing, repeated and gross
negligence in the performance of, his material duties and services to the
Company (other than due to his incapacity due to illness or injury), provided
that such failure or refusal or gross negligence continues uncorrected for a
period of 30 days after the Executive shall have received written notice from
the Company setting forth with specificity the nature of such failure, refusal,
or gross negligence; (d) the breach of this Agreement by the Executive; or (e)
the willful violation of Federal and/or state securities laws.
"GOOD REASON" means the occurrence of one or more of the following
occurring without the specific written consent of the Executive: (i) a material
reduction of duties of the Executive, excluding any such reduction in duties
reasonably occurring as a result of the transactions contemplated by the Merger
Agreement; (ii) a material demotion, or a reduction in base salary of the
Executive; (iii) any requirement that the Executive's principal place of work be
relocated outside of the Commonwealth of Massachusetts or more than twenty-five
(25) miles from its location as of the date of this Agreement; (iv) the
Company's breach of any term of this Agreement which is not fully remedied
within fifteen (15) calendar days after receipt by the Company of a written
notice from the Executive of such breach.
(C) ADJUSTMENTS UPON TERMINATION. Notwithstanding any other
provision of this Agreement:
(1) If the Executive's employment with the Company terminates during
the Term pursuant Section 3(A)(4) (by the Company, without Cause) or
Section 3(A)(5) (by the Executive, for Good Reason), then, for a twelve
(12) month period immediately following the date of such termination, the
Company will continue to pay the Executive a base salary at a rate equal
to that at which he was being paid at the time of termination, and
(subject to Section 3(D) below), will likewise continue to provide the
Executive with the benefits that he was receiving at the time of
termination (or, if the Company is unable to do so because
-3-
such benefits may only be provided to current employees, subject to the
provisions of Section 3(D) it will provide the Executive with the cash
value thereof). In addition to the payments and benefits specified above,
the Company will pay the Executive on the date of termination a lump sum
payment for all accrued unused vacation time. It is agreed and understood
that the Company's duty to make the payments and provide the benefits
described in this Section 3(C)(1) shall be conditioned upon the
Executive's execution of a satisfactory general release in favor of the
Company and the Executive's compliance with Section 5 hereof.
(2) If the Executive's employment with the Company terminates during
the Term other than pursuant to Section 3(A)(4) (by the Company, without
Cause) or Section 3(A)(5) (by the Executive, with Good Reason), then the
rights of the Executive to receive future compensation pursuant to Section
2 and Section 3(C)(1) hereof, and all other rights of the Executive
hereunder, will cease as of the date of such termination except as may be
required by law. As of the date of such termination, the Executive shall
receive a lump sum payment for all accrued unpaid wages and accrued unused
vacation time.
(D) NO DUTY TO MITIGATE; TERMINATION OF BENEFITS. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 3(C)(1) hereof, whether by seeking other employment or
otherwise. If, during the period during which he is receiving such compensation,
the Executive obtains new full-time employment providing him with benefits
comparable to those he is entitled to receive from the Company hereunder, then,
when the Executive begins receiving such benefits from his new employer, the
Executive will no longer be entitled to receive such benefits from the Company
but will continue to be entitled to receive payment of his base salary (and
other non-duplicative benefits) as provided for herein.
4. CHANGE OF CONTROL
Upon the date (the "Effective Date") that is the earlier to occur of
(x) the date that Purchaser pays for the Shares pursuant to the Offer and (y)
the date of the Effective Time, the Executive (if such Executive is still
employed by the Company immediately prior to such date) will be paid a bonus in
an amount equal to the amount that would be payable to the Executive under
Section 4(A) of the Original Employment Agreement upon the consummation of the
Merger as if such Section 4(A) were in effect as of the Effective Time.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
The Executive acknowledges that (i) the Company, Parent and Parent's
affiliates (collectively, "Thomson") are engaged and in the future will be
engaged in the businesses of developing, operating, offering for sale and
selling news or other current information or software-based solutions pertaining
thereto to corporations and other businesses, government agencies, universities
and other academic institutions and professional services providers (e.g. law,
accounting and consulting firms) (the foregoing, together with any other
businesses or operations over which Executive has substantial responsibility
from the date hereof to the date of termination of the Executive's employment
with the Company (or an affiliate thereof), being
-4-
hereinafter referred to as the "Restricted Activity"); (ii) his services to the
Company and Thomson have been and will be special and unique; (iii) his work for
the Company and Thomson will give him access to trade secrets of and
confidential information concerning the Company, Thomson and their affiliated
companies; (iv) the Restricted Activity is national and international in scope;
(v) the Company would not have entered into this Agreement but for the
agreements and covenants contained in this Section 5; (vi) he has the means to
support himself and his dependents other than by engaging in the Restricted
Activity and the provisions of this Section 5 will not impair such ability; and
(vii) the agreements and covenants contained in this Section 5 are essential to
protect the business and goodwill of the Company, Thomson and their affiliates.
In order to induce the Company to enter into this Agreement, and in
consideration for the benefits received by the Executive pursuant to this
Agreement, and other good and valuable consideration the receipt of which is
hereby acknowledged, the Executive covenants and agrees as follows:
(A) NON-COMPETE. During the Restricted Period (as hereinafter
defined), the Executive shall not in the United States of America, or in any
foreign country, directly or indirectly, (i) engage in the Restricted Activity
for the benefit of any person or entity other than the Company, Thomson and
their affiliated companies; (ii) be an employee or consultant of, or provide
services to, Factiva or Lexus/Nexis or any of their respective direct or
indirect subsidiaries; (iii) have an interest in any person engaged in the
Restricted Activity in any capacity, including, without limitation, as a
partner, shareholder, officer, director, principal, agent, employee, trustee or
consultant or any other relationship or capacity; provided, however, the
Executive may own, directly or indirectly, solely as an investment, securities
of any person which are publicly traded if the Executive (a) is not a
controlling person of, or a member of a group which controls, such person, and
(b) does not, directly or indirectly, own 1% or more of any class of securities
of such person; or (iv) interfere with business relationships (whether formed
heretofore or hereafter) between the Company or any of its affiliates and
customers or suppliers of the Company or any of its affiliates. The term
"Restricted Period" shall mean the period ending on the date that is (x) with
respect to clause (ii) of this Section 5(A), eighteen (18) months following the
end of the Executive's employment by the Company (or any affiliate of the
Company) whether or not pursuant to this Agreement and (y) with respect to
clauses (i), (iii) and (iv) of this Section 5(A), twelve (12) months following
the end of the Executive's employment by the Company (or any affiliates of the
Company) whether or not pursuant to this Agreement.
(B) NON-DISCLOSURE. The Executive shall, during the Term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential material (as hereinafter
defined). The Executive agrees that all confidential material, together with all
notes and records of the Executive relating thereto, and all copies or
facsimiles thereof in the possession of the Executive, are the exclusive
property of the Company or Thomson, as the case may be, and the Executive agrees
to return such material to the Company promptly upon the termination of the
Executive's employment with the Company. For the purposes hereof, the term
"confidential material" shall mean all information acquired by the Executive in
the course of the Executive's employment with the Company in any way concerning
the products, projects, activities, business or affairs of the Company or
Thomson or the customers, suppliers, licensors, licensees or partners of the
Company or Thomson, including, without limitation, all information concerning
trade secrets and the products or projects of the Company or Thomson and/or any
-5-
improvements therein, all sales and financial information concerning the Company
or Thomson, all customer and supplier lists, all information concerning projects
in research and development or marketing plans for any such products or
projects, all information concerning technical data, designs, patterns,
formulae, computer programs, source code, object code, algorithms and
subroutines of the Company or Thomson, and all information in any way concerning
the products, projects, activities, business or affairs of customers of the
Company or Thomson which is furnished to the Executive by the Company or Thomson
or any of their respective employees (current or former), agents or customers,
as such; provided, however, that the term "confidential material" shall not
include information which (a) becomes generally available to the public other
than as a result of a disclosure by the Executive, (b) was available to the
Executive on a non-confidential basis prior to his employment with the Company
or (c) becomes available to the Executive on a non-confidential basis from a
source other than the Company or Thomson or any of their agents, franchisees,
creditors, suppliers, lessors, lessees, licensors, licensees, partners or
customers provided that such source is not bound by a confidentiality agreement
with the Company or Thomson or any of such agents or customers.
(C) NON-SOLICITATION. During the Restricted Period, the Executive
shall not (i) hire or attempt to hire, or (ii) solicit or entice or attempt to
solicit or entice away, any person who is (at the applicable time or was within
the six month period prior to any such hire, solicitation or enticement) an
officer, employee or consultant of the Company or Thomson Legal & Regulatory
(including without limitation Dialog) (in the case of clause (i) above) or the
Company or Thomson (in the case of clause (ii) above), as applicable, either for
his own account or for any individual, firm or corporation, whether or not such
person would commit any breach of his contract of employment by reason of
leaving the service of the Company, Thomson or Thomson Legal & Regulatory
(including without limitation Dialog), as applicable.
(D) DEVELOPMENTS. The Executive agrees that all discoveries,
inventions, processes, methods and improvements, conceived, developed or
otherwise made by the Executive at any time, alone or with others in any way
relating to the Company's present or future business or products, whether
patentable or subject to copyright protection and whether or not reduced to
practice, during the period of the Executive's employment with the Company
("Developments"), shall be the sole property of the Company. The Executive
agrees to, and hereby does, assign to the Company all of the Executive's right,
title and interest throughout the world in and to all Developments. The
Executive agrees that such Developments shall constitute works made for hire
under the copyright laws of the United States and hereby assigns to the Company
all copyrights, patents and other proprietary rights the Executive may have in
such Developments. The Executive shall make and maintain adequate and current
written records of all Developments, and the Executive shall disclose all
developments promptly, fully and in writing to the Company promptly after
development of the same, and at any time upon request, provided, however, that
developments excluded under the following paragraph shall be received by the
Company in confidence.
The Executive has informed the Company in writing of any continuing
obligations to any previous employers which require him not to disclose to the
Company any information, and the Executive has also informed the Company in
writing of any and all confidential information or Developments which the
Executive claims as his own and intends to exclude from the restrictions set
forth in the previous paragraph because it was developed by the Executive prior
to the commencement of his employment by the Company. There shall also be
-6-
excluded from the restrictions set forth in the previous paragraph any
Development made by the Executive (a) which is developed by the Executive
without the use of the Company's property or facilities, (b) which does not make
any use of confidential information, (c) which is developed by the Executive
entirely on his own time, and (d) which does not relate to the Company's
business or to the Company's ongoing or planned research and development
efforts. At any time at the request of the Company (and at the Company's
expense), the Executive shall execute all documents and perform all lawful acts
the Company considers necessary or advisable to secure its rights hereunder and
to carry out the intent of this Section 5(D). At any time upon the request of
the Company, the Executive shall return promptly to the Company all the
Company's property, including all copies of all confidential information or
Developments.
(E) In the event of a breach or threatened breach by the Executive
of any of the provisions of Section 5 of this Agreement, the Executive hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have with respect to any such breach or
threatened breach.
6. MISCELLANEOUS.
(A) BENEFITS OF AGREEMENT; NO ASSIGNMENTS; NO THIRD-PARTY
BENEFICIARIES.
(1) This Agreement will bind and inure to the benefit of the parties
hereto and their respective heirs, successors, and permitted assigns.
(2) Neither party will assign any rights or delegate any obligations
hereunder without the consent of the other party (except that the Company
may assign its rights and delegate its obligations hereunder to any
affiliate of the Company or to any successor to its business, whether by
merger or consolidation, sale of stock or of all or substantially all of
its assets, or otherwise), and any attempt to do so will be void.
(3) Nothing in this Agreement is intended to or will confer any
rights or remedies on any person or entity other than the parties hereto,
their respective heirs, successors, and permitted assigns.
(B) NOTICES. All notices, requests, payments, instructions, or other
documents to be given hereunder will be in writing or by written
telecommunication, and will be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed to the recipient party at its address set forth in the first
paragraph hereof (or to such other address as the recipient party may have
furnished to the
-7-
sending party for the purpose pursuant to this section) and, with respect to any
notice given on or prior to the Effective Date, with a copy sent to the
Purchaser at its address set forth in the Merger Agreement.
(C) COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered will be an
original, but all of which together will constitute one and the same agreement.
In pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.
(D) CAPTIONS. The captions of sections or subsections of this
Agreement are for reference only and will not affect the interpretation or
construction of this Agreement.
(E) CONSTRUCTION. The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction will be applied against either party.
(F) WAIVERS; AMENDMENTS. No waiver of any breach or default
hereunder will be valid unless in writing signed by the waiving party. No
failure or other delay by any party exercising any right, power, or privilege
hereunder will be or operate as a waiver thereof, nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power, or privilege. No amendment or modification of this
Agreement will be valid or binding unless in a writing signed by both the
Executive and the Company and, with respect to any amendment or modification of
this Agreement prior to the Effective Date, by Purchaser.
(G) ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any prior
understandings or agreements between them, with respect to the subject matter
hereof (including, without limitation, the Original Employment Agreement). The
parties acknowledge and agree that any and all agreements between the parties
relating to stock options granted by the Company (including its predecessors,
successors and affiliates) to the Executive, are superseded by and subject to
Section 3.07 of the Merger Agreement.
(H) GOVERNING LAW. This Agreement will be governed by and
interpreted and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, without reference to principles of conflicts or
choice of law.
* * *
-8-
IN WITNESS WHEREOF, each of the Company and the Executive has executed and
delivered this Agreement as an agreement under seal as of the date first above
written.
EXECUTIVE:
/s/ Alton Zink
- -----------------------------------
Alton Zink
COMPANY:
/s/ Clifford Pollan
- -----------------------------------
Clifford Pollan
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