UNITED STATES
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
MILLENNIAL
MEDIA, INC.
(Name of Subject Company)
MARS ACQUISITION SUB, INC.
(Offeror)
A WHOLLY
OWNED DIRECT SUBSIDIARY OF
AOL INC.
(Parent of Offeror)
(Names of Filing Persons)
Common Stock,
$0.001 Par Value
(Title of Class of Securities)
60040N105
(CUSIP Number of
Class of Securities)
Julie M. Jacobs
General Counsel
22000
AOL Way
Dulles, VA 20166
(703) 265-1000
(Name,
address and telephone number of person authorized to receive notices and communications on behalf of filing persons)
With a
copy to:
David E. Shapiro
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New
York, NY 10019
(212) 403-1000
CALCULATION OF FILING FEE
|
|
|
| Transaction valuation* |
|
Amount of filing fee** |
| $280,713,492.50 |
|
$32,618.91 |
| * |
Estimated for purposes of calculating the filing fee only. The transaction valuation was calculated by adding the sum of (i) 142,731,031 shares of common stock, par value $0.001 per share (the “Shares”),
of Millennial Media, Inc. (“Millennial Media”) outstanding multiplied by the offer price of $1.75 per share; (ii) 7,426,395 Shares reserved for issuance upon settlement of outstanding Millennial Media restricted stock unit awards
multiplied by the offer price of $1.75 per Share; and (iii) 10,250,284 Shares issuable pursuant to outstanding options with an exercise price less than the offer price of $1.75 per share, multiplied by the offer price of $1.75 per share minus
the exercise price for each such option. The calculation of the filing fee is based on information provided by Millennial Media as of September 15, 2015. |
| ** |
The filing fee was calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for Fiscal Year 2015, issued August 29, 2014, by multiplying the
transaction valuation by 0.0001162. |
| ¨ |
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: N/A |
|
Filing Party: N/A |
| Form or Registration No.: N/A |
|
Date Filed: N/A |
| ¨ |
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below 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: ¨
This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the tender
offer by Mars Acquisition Sub, Inc., a Delaware corporation (which we refer to as “Purchaser”) and a wholly owned direct subsidiary of AOL Inc., a Delaware corporation (which we refer to as “Parent”), to purchase all of the
outstanding shares of common stock, par value $0.001 per share (the “Shares”), of Millennial Media, Inc., a Delaware corporation (which we refer to as “Millennial Media”), at a purchase price of $1.75 per Share, net to the seller
in cash, without interest thereon and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated September 18, 2015 (the “Offer to Purchase”), a copy of which is
attached as Exhibit (a)(1)(A), and in the related letter of transmittal (the “Letter of Transmittal”), a copy of which is attached as Exhibit (a)(1)(B), which together with other related materials, as each may be amended or supplemented
from time to time, collectively constitute the “Offer.”
All the information set forth in the Offer to Purchase is incorporated
by reference herein in response to Items 1 through 9 and Item 11 of this Schedule TO, and is supplemented by the information specifically provided in this Schedule TO.
| Item 1. |
Summary Term Sheet. |
Regulation M-A Item 1001
The information set forth in the Offer to Purchase under the caption SUMMARY TERM SHEET is incorporated herein by reference.
| Item 2. |
Subject Company Information. |
Regulation M-A Item 1002
(a) Name and Address. The name, address, and telephone number of the subject company’s principal executive offices are as follows:
Millennial Media, Inc.
2400
Boston Street, Suite 300
Baltimore, Maryland 21224
Telephone: (410) 522-8705
(b)-(c) Securities; Trading Market and Price. The information set forth in the Offer to Purchase under the following captions is
incorporated herein by reference.
INTRODUCTION
THE TENDER OFFER — Section 6 (“Price Range of Shares; Dividends”)
| Item 3. |
Identity and Background of Filing Person. |
Regulation M-A Item 1003
(a)-(c) Name and Address; Business and Background of Entities; and Business and Background of Natural Persons. The
information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 8 (“Certain Information Concerning Parent and Purchaser”)
SCHEDULE I — Information Relating to Parent and Purchaser
2
| Item 4. |
Terms of the Transaction. |
Regulation M-A Item 1004
(a) Material Terms. The information set forth in the Offer to Purchase is incorporated herein by reference.
| Item 5. |
Past Contacts, Transactions, Negotiations and Agreements. |
Regulation M-A
Item 1005
(a) Transactions. The information set forth in the Offer to Purchase under the following captions is
incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Millennial Media”)
(b) Significant Corporate Events. The information set forth in the Offer to Purchase under the following captions is
incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 8 (“Certain Information Concerning Parent and Purchaser”)
THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Millennial Media”)
THE TENDER OFFER — Section 11 (“The Merger Agreement”)
THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Millennial Media”)
| Item 6. |
Purposes of the Transaction and Plans or Proposals. |
Regulation M-A
Item 1006
(a) Purposes. The information set forth in the Offer to Purchase under the following captions is incorporated
herein by reference:
THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Millennial Media”)
(c) (1)-(7) Plans. The information set forth in the Offer to Purchase under the following captions is incorporated herein
by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 9 (“Source and Amount of Funds”)
THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Millennial Media”)
THE TENDER OFFER — Section 11 (“The Merger Agreement”)
THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Millennial Media”)
THE TENDER OFFER — Section 13 (“Certain Effects of the Offer”)
THE TENDER OFFER — Section 14 (“Dividends and Distributions”)
3
| Item 7. |
Source and Amount of Funds or Other Consideration. |
Regulation M-A
Item 1007
(a) Source of Funds. The information set forth in the Offer to Purchase under the following captions is
incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 9 (“Source and Amount of Funds”)
(b) Conditions. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER
OFFER — Section 9 (“Source and Amount of Funds”)
(d) Borrowed Funds. The information set forth in the
Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 9 (“Source and Amount of Funds”)
| Item 8. |
Interest in Securities of the Subject Company. |
Regulation M-A Item 1008
(a) Securities Ownership. The information set forth in the Offer to Purchase under the following captions is incorporated
herein by reference:
THE TENDER OFFER — Section 8 (“Certain Information Concerning Parent and Purchaser”)
THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Millennial Media”)
SCHEDULE I — Information Relating to Parent and Purchaser
(b) Securities Transactions. None.
| Item 9. |
Persons/Assets Retained, Employed, Compensated or Used. |
Regulation M-A
Item 1009
(a) Solicitations or Recommendations. The information set forth in the Offer to Purchase under the following
captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 3 (“Procedures for Accepting the Offer and Tendering Shares”)
THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Millennial Media”)
THE TENDER OFFER — Section 18 (“Fees and Expenses”)
4
| Item 10. |
Financial Statements. |
Regulation M-A Item 1010
(a) Financial Information. Not Applicable.
(b) Pro Forma Information. Not Applicable.
| Item 11. |
Additional Information. |
Regulation M-A Item 1011
(a) Agreements, Regulatory Requirements and Legal Proceedings. The information set forth in the Offer to Purchase under the following
captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER — Section 10 (“Background of the Offer; Past Contacts or Negotiations with Millennial Media”)
THE TENDER OFFER — Section 11 (“The Merger Agreement”)
THE TENDER OFFER — Section 12 (“Purpose of the Offer; Plans for Millennial Media”)
THE TENDER OFFER — Section 13 (“Certain Effects of the Offer”)
THE TENDER OFFER — Section 16 (“Certain Legal Matters; Regulatory Approvals”)
(b) Other Material Information. The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated
herein by reference.
Regulation M-A Item 1016
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| Exhibit
No. |
|
Description |
|
|
| (a)(1)(A) |
|
Offer to Purchase, dated September 18, 2015. |
|
|
| (a)(1)(B) |
|
Form of Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on Form W-9). |
|
|
| (a)(1)(C) |
|
Form of Notice of Guaranteed Delivery. |
|
|
| (a)(1)(D) |
|
Form of Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
|
|
| (a)(1)(E) |
|
Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
|
|
| (a)(1)(F) |
|
Press Release issued by AOL Inc., dated September 3, 2015 (incorporated by reference to Exhibit 99.1 to the Schedule TO-C filed by AOL Inc. with the Securities and Exchange Commission on
September 3, 2015). |
|
|
| (a)(1)(G) |
|
Summary Advertisement as published in The Wall Street Journal on September 18, 2015. |
|
|
| (a)(5)(A) |
|
Complaint filed by Paul Parshall in the Delaware Court of Chancery, dated September 9, 2015. |
5
|
|
|
| Exhibit
No. |
|
Description |
|
|
| (a)(5)(B) |
|
Complaint filed by David Desjardins in the Delaware Court of Chancery, dated September 10, 2015. |
|
|
| (a)(5)(C) |
|
Complaint filed by Kien Chen in the Delaware Court of Chancery, dated September 10, 2015. |
|
|
| (a)(5)(D) |
|
Complaint filed by Joseph Wagner in the Delaware Court of Chancery, dated September 15, 2015. |
|
|
| (a)(5)(E) |
|
Complaint filed by An Nguyen in the Delaware Court of Chancery, dated September 16, 2015. |
|
|
| (d)(1) |
|
Agreement and Plan of Merger, dated as of September 3, 2015, by and among AOL Inc., Mars Acquisition Sub, Inc. and Millennial Media, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by
Millennial Media, Inc. with the Securities and Exchange Commission on September 3, 2015). |
|
|
| (d)(2) |
|
Confidential Non-Disclosure Agreement, effective January 16, 2015, by and between AOL Inc. and Millennial Media, Inc. |
|
|
| (d)(3) |
|
Joinder Agreement to Confidential Non-Disclosure Agreement, dated May 18, 2015, by and between AOL Inc., Millennial Media, Inc. and Verizon Communications Inc. |
|
|
| (d)(4) |
|
Letter Agreement, dated August 26, 2015, by and between AOL Inc., Millennial Media, Inc. and Verizon Communications Inc. |
|
|
| (d)(5) |
|
Exclusivity Agreement, dated as of June 15, 2015, by and between AOL Inc. and Millennial Media, Inc. |
|
|
| (d)(6) |
|
Exclusivity Agreement Amendment No. 1, dated as of July 21, 2015, by and between AOL Inc. and Millennial Media, Inc. |
|
|
| (d)(7) |
|
Employment Offer Letter, dated July 13, 2015, as revised August 6, 2015, between AOL Inc. and Ernie Cormier. |
|
|
| (d)(8) |
|
Employment Offer Letter and Retention Bonus Letter, dated July 9, 2015, as revised August 11, 2015, between AOL Inc. and Matthew Gillis. |
|
|
| (g) |
|
None. |
|
|
| (h) |
|
None. |
| Item 13. |
Information Required by Schedule 13E-3. |
Not applicable.
6
SIGNATURES
After due inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
|
|
|
|
|
| Dated: September 18, 2015 |
|
| MARS ACQUISITION SUB, INC. |
|
|
| By: |
|
/s/ Julie Jacobs |
|
|
Name: |
|
Julie Jacobs |
|
|
Title: |
|
VP, Secretary |
|
| AOL INC. |
|
|
| By: |
|
/s/ Julie Jacobs |
|
|
Name: |
|
Julie Jacobs |
|
|
Title: |
|
EVP, Secretary |
7
EXHIBIT INDEX
|
|
|
| Exhibit
No. |
|
Description |
|
|
| (a)(1)(A) |
|
Offer to Purchase, dated September 18, 2015. |
|
|
| (a)(1)(B) |
|
Form of Letter of Transmittal (including Guidelines for Certification of Taxpayer Identification Number on Form W-9). |
|
|
| (a)(1)(C) |
|
Form of Notice of Guaranteed Delivery. |
|
|
| (a)(1)(D) |
|
Form of Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
|
|
| (a)(1)(E) |
|
Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
|
|
| (a)(1)(F) |
|
Press Release issued by AOL Inc., dated September 3, 2015 (incorporated by reference to Exhibit 99.1 to the Schedule TO-C filed by AOL Inc. with the Securities and Exchange Commission on
September 3, 2015). |
|
|
| (a)(1)(G) |
|
Summary Advertisement as published in The Wall Street Journal on September 18, 2015. |
|
|
| (a)(5)(A) |
|
Complaint filed by Paul Parshall in the Delaware Court of Chancery, dated September 9, 2015. |
|
|
| (a)(5)(B) |
|
Complaint filed by David Desjardins in the Delaware Court of Chancery, dated September 10, 2015. |
|
|
| (a)(5)(C) |
|
Complaint filed by Kien Chen in the Delaware Court of Chancery, dated September 10, 2015. |
|
|
| (a)(5)(D) |
|
Complaint filed by Joseph Wagner in the Delaware Court of Chancery, dated September 15, 2015. |
|
|
| (a)(5)(E) |
|
Complaint filed by An Nguyen in the Delaware Court of Chancery, dated September 16, 2015. |
|
|
| (d)(1) |
|
Agreement and Plan of Merger, dated as of September 3, 2015, by and among AOL Inc., Mars Acquisition Sub, Inc. and Millennial Media, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by
Millennial Media, Inc. with the Securities and Exchange Commission on September 3, 2015). |
|
|
| (d)(2) |
|
Confidential Non-Disclosure Agreement, effective January 16, 2015, by and between AOL Inc. and Millennial Media, Inc. |
|
|
| (d)(3) |
|
Joinder Agreement to Confidential Non-Disclosure Agreement, dated May 18, 2015, by and between AOL Inc., Millennial Media, Inc. and Verizon Communications Inc. |
|
|
| (d)(4) |
|
Letter Agreement, dated August 26, 2015, by and between AOL Inc., Millennial Media, Inc. and Verizon Communications Inc. |
|
|
| (d)(5) |
|
Exclusivity Agreement, dated as of June 15, 2015, by and between AOL Inc. and Millennial Media, Inc. |
|
|
| (d)(6) |
|
Exclusivity Agreement Amendment No. 1, dated as of July 21, 2015, by and between AOL Inc. and Millennial Media, Inc. |
|
|
| (d)(7) |
|
Employment Offer Letter, dated July 13, 2015, as revised August 6, 2015, between AOL Inc. and Ernie Cormier. |
8
|
|
|
| Exhibit
No. |
|
Description |
|
|
| (d)(8) |
|
Employment Offer Letter and Retention Bonus Letter, dated July 9, 2015, as revised August 11, 2015, between AOL Inc. and Matthew Gillis. |
|
|
| (g) |
|
None. |
|
|
| (h) |
|
None. |
9
Exhibit (a)(1)(A)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
MILLENNIAL MEDIA,
INC.
at
$1.75
Net Per Share
by
MARS ACQUISITION SUB, INC.
a wholly owned direct subsidiary
of
AOL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON OCTOBER 16, 2015, UNLESS THE OFFER IS EXTENDED OR EARLIER
TERMINATED.
Mars Acquisition Sub, Inc., a Delaware corporation (which we refer to as “Purchaser”) and a wholly owned direct
subsidiary of AOL Inc., a Delaware corporation (which we refer to as “Parent”), is offering to purchase for cash all of the outstanding shares of common stock, par value $0.001 per share (the “Shares”), of Millennial Media, Inc.,
a Delaware corporation (which we refer to as “Millennial Media”), at a purchase price of $1.75 per Share (the “Offer Price”), net to the seller in cash, without interest thereon and less any applicable withholding taxes, upon the
terms and subject to the conditions set forth in this Offer to Purchase (the “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal” which, together with this Offer to Purchase and other related
materials, as each may be amended or supplemented from time to time, constitutes the “Offer”).
The Offer is being made pursuant
to the Agreement and Plan of Merger, dated as of September 3, 2015 (as it may be amended from time to time, the “Merger Agreement”), by and among Parent, Purchaser and Millennial Media. The Merger Agreement provides, among other
things, that following the consummation of the Offer and subject to the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Millennial Media (the “Merger”), with Millennial Media continuing as the surviving
corporation (which we refer to as the “Surviving Corporation”) in the Merger. In the Merger, each Share outstanding immediately prior to the effective time of the Merger (other than Shares held (i) in the treasury of Millennial Media
or by Parent or Purchaser, which Shares shall be canceled and shall cease to exist, (ii) by a wholly owned subsidiary of Millennial Media or Parent (other than Purchaser) or a wholly owned subsidiary of Purchaser, which Shares shall be
converted into shares of the Surviving Corporation representing the same percentage ownership in the Surviving Corporation that such holder owned in Millennial Media prior to the effective time of the Merger, and (iii) by stockholders who
validly exercise appraisal rights under Delaware law with respect to such Shares) will be automatically canceled and converted into the right to receive $1.75 or any greater per Share price paid in the Offer, without interest thereon and less any
applicable withholding taxes. As a result of the Merger, Millennial Media will cease to be a publicly traded company and will become wholly owned by Parent. Under no circumstances will interest be paid on the purchase price for Shares, regardless of
any extension of the Offer or any delay in making payment for Shares.
The Offer is conditioned upon, among other things, (a) the
absence of a termination of the Merger Agreement in accordance with its terms and (b) the satisfaction of (i) the Minimum Condition, (ii) the Antitrust Law Condition, (iii) the Governmental Authority Condition, (iv) the
Representations Condition, (v) the Covenants Condition and (vi) the Material Adverse Effect Condition, each as described below. The Minimum Condition requires that the number of Shares validly tendered in accordance with the terms of the
Offer and not validly withdrawn on or prior to 11:59 p.m. (New York City time) on October 16, 2015 (the “Expiration Date,” unless Purchaser shall have extended the period during which the Offer is open in accordance with the Merger
Agreement, in which event “Expiration Date” shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire) (excluding Shares tendered pursuant to guaranteed delivery procedures but
not yet delivered) together with any Shares then owned by Parent or its subsidiaries, represent a majority of the outstanding Shares as of the Expiration Date (determined on a fully diluted
basis, which for these purposes means the number of Shares issued and outstanding plus the number of Shares which Millennial Media would be required to issue pursuant to any then outstanding warrants, options, benefit plans or obligations or
securities convertible or exchangeable into Shares or otherwise, but only to the extent so exercisable, convertible or exchangeable prior to consummation of the Merger or exercisable, convertible or exchangeable as a result of the consummation of
the Offer or the Merger). The Antitrust Law Condition requires that any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the “HSR Act”) and any
other applicable antitrust law shall have expired or otherwise been terminated. Under the HSR Act, each of Parent and Millennial Media is required to file a Premerger Notification and Report Form with the Federal Trade Commission (the
“FTC”) and the Antitrust Division of the U.S. Department of Justice in connection with the purchase of Shares in the Offer, which filings were made prior to the date hereof. The Governmental Authority Condition requires that no
governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or order which is then in effect and has the effect of making the Offer or the Merger illegal or otherwise prohibiting, restraining
or preventing the consummation of the Offer or the Merger. The Representations Condition requires that certain representations and warranties made by Millennial Media in the Merger Agreement be accurate, subject to the materiality and other
qualifications set forth in the Merger Agreement. The Covenants Condition requires that Millennial Media materially comply with all covenants pursuant to the Merger Agreement. The Material Adverse Effect Condition requires that since
September 3, 2015, there shall not have occurred and be continuing as of the Expiration Date a Company Material Adverse Effect (or any event, development or circumstances that, if it had occurred, would have, or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect), in each case as defined under the Merger Agreement. The Offer also is subject to other conditions as described in this Offer to Purchase. See Section 15 —
“Conditions to the Offer.”
After careful consideration, the board of directors of Millennial Media, duly and unanimously
adopted resolutions (i) determining that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to and in the best interests of Millennial Media and its stockholders, (ii) approving and
declaring advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, in accordance with the requirements of Delaware law and (iii) recommending that the stockholders of Millennial Media accept
the Offer and tender their Shares to Purchaser in the Offer.
A summary of the principal terms of the Offer appears on pages S-1 through
S-7. You should read this entire Offer to Purchase carefully before deciding whether to tender your Shares in the Offer.
September 18, 2015
IMPORTANT
If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you should either (a) complete and sign the
Letter of Transmittal for the Offer, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal, and mail or deliver the Letter of Transmittal (or a manually executed facsimile thereof)
and any other required documents to American Stock Transfer & Trust Company, LLC, in its capacity as depositary for the Offer (which we refer to as the “Depositary”), and either deliver the certificates for your Shares to the
Depositary along with the Letter of Transmittal (or a manually executed facsimile thereof) or tender your Shares by book-entry transfer by following the procedures described in Section 3 — “Procedures for Accepting the Offer and
Tendering Shares,” in each case by the Expiration Date, or (b) request that your broker, dealer, commercial bank, trust company or other nominee effect the transaction for you. If you hold Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, you must contact that institution in order to tender your Shares to Purchaser pursuant to the Offer. If you are a record holder but your stock certificate is not available or you cannot deliver it to
the Depositary before the Offer expires, you may be able to tender your Shares using the enclosed Notice of Guaranteed Delivery (See Section 3 — “Procedures for Accepting the Offer and Tendering Shares” for further details).
* * * * *
Questions and
requests for assistance should be directed to the Information Agent (as described herein) at its address and telephone numbers set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the related Letter of
Transmittal, and other materials related to the Offer may also be obtained for free from the Information Agent. Additionally, copies of this Offer to Purchase, the related Letter of Transmittal, and any other material related to the Offer may be
obtained at the website maintained by the United States Securities and Exchange Commission (the “SEC”) at www.sec.gov. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance.
This Offer to Purchase and the related Letter of Transmittal contain important information and you should read both carefully and
in their entirety before making a decision with respect to the Offer.
The Offer has not been approved or disapproved by the SEC or
any state securities commission nor has the SEC or any state securities commission passed upon the fairness or merits of or upon the accuracy or adequacy of the information contained in this Offer to Purchase. Any representation to the contrary is
unlawful.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders
may call toll free: (877) 825-8964
Banks and Brokers may call collect: (212) 750-5833
TABLE OF CONTENTS
-i-
SUMMARY TERM SHEET
The information contained in this summary term sheet is a summary only and is not meant to be a substitute for the more detailed
description and information contained in the Offer to Purchase, the Letter of Transmittal and other related materials. You are urged to read carefully the Offer to Purchase, the Letter of Transmittal and other related materials in their entirety.
Purchaser has included cross-references in this summary term sheet to other sections of the Offer to Purchase where you will find more complete descriptions of the topics mentioned below. The information concerning Millennial Media contained herein
and elsewhere in the Offer to Purchase has been provided to Purchaser by Millennial Media or has been taken from or is based upon publicly available documents or records of Millennial Media on file with the United States Securities and Exchange
Commission (the “SEC”) or other public sources at the time of the Offer. Purchaser has not independently verified the accuracy and completeness of such information. Purchaser has no knowledge that would indicate that any statements
contained herein relating to Millennial Media provided to Purchaser or taken from or based upon such documents and records filed with the SEC are untrue or incomplete in any material respect.
|
|
|
| Securities Sought |
|
All issued and outstanding shares of common stock, par value $0.001 per share of Millennial Media, Inc. |
|
|
| Price Offered Per Share |
|
$1.75 net to the seller in cash, without interest thereon and less any applicable withholding taxes (the “Offer Price”) |
|
|
| Scheduled Expiration of Offer |
|
11:59 p.m. (New York City time) on October 16, 2015, unless the Offer is extended or terminated in accordance with the Merger Agreement (as described below). See Section 1 — “Terms of the Offer.” |
|
|
| Purchaser |
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Mars Acquisition Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of AOL Inc., a Delaware corporation |
Who is offering to purchase my shares?
Mars Acquisition Sub, Inc., or Purchaser, a wholly owned direct subsidiary of AOL Inc., or Parent, is offering to purchase for cash all of the
outstanding Shares. Purchaser is a Delaware corporation that was formed for the sole purpose of making the Offer and completing the process by which Purchaser will be merged with and into Millennial Media. See the “Introduction” and
Section 8 — “Certain Information Concerning Parent and Purchaser.”
Unless the context indicates otherwise, in this
Offer to Purchase, we use the terms “us,” “we” and “our” to refer to Purchaser and, where appropriate, Parent. We use the term “Parent” to refer to AOL Inc. alone, the term “Purchaser” to refer to
Mars Acquisition Sub, Inc. alone and the terms “Millennial Media” and the “Company” to refer to Millennial Media, Inc. alone.
What
are the classes and amounts of securities sought in the Offer?
We are offering to purchase all of the outstanding shares of common
stock, par value $0.001 per share of Millennial Media on the terms and subject to the conditions set forth in this Offer to Purchase. Unless the context otherwise requires, in this Offer to Purchase we use the term “Offer” to refer to this
offer and the term “Shares” to refer to shares of Millennial Media common stock that are the subject of the Offer.
See the
“Introduction” and Section 1 — “Terms of the Offer.”
Why are you making the Offer?
We are making the Offer because we want to acquire the entire equity interest in Millennial Media. If the Offer is consummated, Parent intends
to have Purchaser consummate the Merger (as described below) as soon as practicable following the consummation of the Offer. Upon consummation of the Merger (as described below), Millennial Media will cease to be a publicly traded company and will
be a wholly owned subsidiary of Parent.
How much are you offering to pay and what is the form of payment? Will I have to pay any fees or commissions?
We are offering to pay $1.75 per Share, net to the seller in cash, without interest and less any applicable withholding taxes. If you
are the record owner of your Shares and you tender your Shares to us in the Offer, you will not have to pay brokerage fees, commissions or similar expenses. If you own your Shares through a broker or other nominee and your broker or other nominee
tenders your Shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply.
See the “Introduction,” Section 1 — “Terms of the Offer” and Section 2 — “Acceptance for Payment
and Payment for Shares.”
Is there an agreement governing the Offer?
Yes. Parent, Purchaser and Millennial Media have entered into an Agreement and Plan of Merger, dated as of September 3, 2015 (as it may be
amended from time to time, the “Merger Agreement”). The Merger Agreement provides, among other things, for the terms and conditions of the Offer and the subsequent merger of Purchaser with and into Millennial Media (the
“Merger”).
See Section 11 — “The Merger Agreement” and Section 15 — “Conditions to the
Offer.”
Will you have the financial resources to make payment?
Yes, we will have sufficient resources available to us. We estimate that we will need approximately $279 million to complete the Offer and the
Merger, to repay certain existing indebtedness of Millennial Media, and to pay related transaction fees and expenses. We expect that we will have at the completion of the Offer and the closing of the Merger access to sufficient cash from Verizon
Communications Inc., a Delaware corporation (“Verizon”), and our other affiliates to provide us with funds for these purposes through an intercompany loan (the terms of which have not yet been determined). We believe that it will not be
necessary for Verizon to borrow funds in order to enable us to complete the Offer and close the Merger. Parent and Purchaser do not have any alternative financing plans or arrangements. The Offer is not conditioned upon our ability to finance the
purchase of Shares pursuant to the Offer.
See Section 9 — “Source and Amount of Funds.”
Is your financial condition relevant to my decision to tender my Shares in the Offer?
No. We do not think our financial condition is relevant to your decision whether to tender Shares and accept the Offer because:
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the Offer is being made for all outstanding Shares solely for cash; |
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the Offer is not subject to any financing condition; |
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if we consummate the Offer, we expect to acquire all remaining Shares for the same cash price in the Merger; and |
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our access to cash from Verizon is sufficient to provide us with funds to purchase all Shares tendered pursuant to the Offer and to complete the Merger. |
See Section 9 — “Source and Amount of Funds.”
How long do I have to decide whether to tender my Shares in the Offer?
You will have until 11:59 p.m. (New York City time) on October 16, 2015, unless we extend the Offer pursuant to the terms of the Merger
Agreement (such date and time, as it may be extended in accordance with the
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terms of the Merger Agreement, the “Expiration Date”) or the Offer is earlier terminated. If you cannot deliver everything required to make a valid tender to the Depositary prior to
such time, you may be able to use a guaranteed delivery procedure, which is described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”
Acceptance and payment for Shares pursuant to and subject to the conditions of the Offer, which shall occur on October 19, 2015, unless
we extend the Offer pursuant to the terms of the Merger Agreement, is referred to as the “Offer Closing,” and the date on which such Offer Closing occurs is referred to as the “Offer Closing Date.” The date and time at which the
Merger becomes effective is referred to as the “Effective Time.”
See Section 1 — “Terms of the Offer” and
Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”
Can the Offer be extended and under what circumstances?
Yes. We have agreed in the Merger Agreement that, subject to our rights to terminate the Merger Agreement in accordance with its
terms, Purchaser must extend the Offer (i) on one or more occasions, for successive periods of up to 5 business days each (or up to 20 business days if Parent so desires and the Company agrees) in order to ensure satisfaction of the Offer
Conditions and (ii) for any period required by applicable law or any applicable rules, regulations, interpretations or positions of the SEC or its staff or the New York Stock Exchange (the “NYSE”). Except in the event that the only
condition to the Offer not satisfied or waived is the Antitrust Law Condition or the Governmental Authority Condition, in no event will the Purchaser be required, or permitted without the Company’s consent, to extend the Offer beyond
March 3, 2016 (the “Outside Date”) unless at such time Parent is in material breach of the Merger Agreement and such material breach has caused or resulted in the Offer not being consummated by such date.
See Section 1 — “Terms of the Offer.”
How will I be notified if the Offer is extended?
If we extend the Offer, we will inform American Stock Transfer & Trust Company, LLC, which is the depositary for the Offer (the
“Depositary”), of any extension and will issue a press release announcing the extension not later than 9:00 a.m., New York City time, on the next business day after the day on which the Offer was scheduled to expire.
See Section 1 — “Terms of the Offer.”
What are the most significant conditions to the Offer?
The Offer is conditioned upon, among other things:
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that there shall have been validly tendered in the Offer (excluding Shares tendered pursuant to guaranteed delivery procedures but not yet delivered) and not properly withdrawn by the Expiration Date that number of
Shares which, together with the number of Shares (if any) then owned by Parent (or its subsidiaries), represent a majority of the outstanding Shares (determined on a fully diluted basis, which for these purposes means the number of Shares issued and
outstanding plus the number of Shares which Millennial Media would be required to issue pursuant to any then outstanding warrants, options, benefit plans or obligations or securities convertible or exchangeable into Shares or otherwise, but only to
the extent so exercisable, convertible or exchangeable prior to consummation of the Merger or exercisable, convertible or exchangeable as a result of the consummation of the Offer or the Merger) (the “Minimum Condition”);
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that the Merger Agreement shall not have been terminated in accordance with its terms (the “Termination Condition”); |
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the expiration or termination of any applicable waiting period (or any extension thereof) under the HSR Act and any other applicable antitrust law (the “Antitrust Law Condition”); |
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that no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or order which has the effect of making the Offer or Merger illegal or otherwise prohibiting,
restraining or preventing the consummation of the Offer or Merger; provided that Parent and Purchaser have made reasonable best efforts to oppose any such action by such governmental authority (the “Governmental Authority Condition”);
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the accuracy of certain representations and warranties made by the Company in the Merger Agreement, subject to the materiality and other qualifications set forth in the Merger Agreement (the “Representations
Condition”); |
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the performance or compliance of the Company in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by it under the Merger Agreement (the
“Covenants Condition”); |
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that since September 3, 2015, no Company Material Adverse Effect (as described below) or event, development or circumstance that would reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect (as described below) shall have occurred and be continuing as of the Expiration Date (the “Material Adverse Effect Condition”); |
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that the Purchaser receive a certificate of the Company, executed by the Chief Executive Officer or the Chief Financial Officer of the Company stating that the Representations Condition, the Covenants Condition and the
Material Adverse Effect Condition have been met; and |
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that the board of directors of the Company shall not have withdrawn or modified in a manner adverse to Parent or Purchaser its recommendation that the Company’s stockholders accept the Offer and tender their Shares
pursuant thereto. |
The foregoing conditions shall be in addition to, and not a limitation of, the rights of Parent and
Purchaser to extend, terminate, amend and/or modify the Offer pursuant to the terms and conditions of the Merger Agreement.
Purchaser
expressly reserves the right to waive, in whole or in part, any condition to the Offer or modify the terms of the Offer; provided, however, that, without the prior written consent of Millennial Media, we are not permitted to (i) decrease the
Offer Price, (ii) change the form of consideration payable in the Offer, (iii) change the number of Shares to be purchased in the Offer, (iv) amend or waive the Minimum Condition, the Termination Condition, the Antitrust Law Condition
or the Governmental Authority Condition, (v) add any condition to the Offer or any term that is adverse to holders of Shares, (vi) extend the expiration of the Offer except as required or permitted by the Merger Agreement,
(vii) provide for a “subsequent offering period” (or any extension thereof) in accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or (viii) modify, supplement or amend
any other term or condition of the Offer in a manner adverse to the holders of Shares.
See Section 15 — “Conditions to the
Offer.”
Have any Millennial Media stockholders entered into agreements with Parent or its affiliates requiring them to tender their Shares?
No.
How do I tender my Shares?
If you hold your Shares directly as the registered owner, you can (i) tender your Shares in the Offer by delivering the
certificates representing your Shares, together with a completed and signed Letter of Transmittal
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and any other documents required by the Letter of Transmittal, to the Depositary or (ii) tender your Shares by following the procedure for book-entry transfer set forth in Section 3
— “Procedures for Accepting the Offer and Tendering Shares,” no later than the Expiration Date. If you are the registered owner but your stock certificate is not available or you cannot deliver it to the Depositary before the Offer
expires, you may have a limited amount of additional time by having a broker, a bank or other fiduciary that is an eligible institution guarantee that the missing items will be received by the Depositary within three NYSE trading days. For the
tender to be valid, however, the Depositary must receive the missing items within that three trading-day period. See Section 3 — “Procedures for Accepting the Offer and Tendering Shares” for further details. The Letter of
Transmittal is enclosed with this Offer to Purchase.
If you hold your Shares in street name through a broker, dealer, commercial bank,
trust company or other nominee, you must contact the institution that holds your Shares and give instructions that your Shares be tendered. You should contact the institution that holds your Shares for more details.
See Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”
Until what time may I withdraw previously tendered Shares?
You may withdraw your previously tendered Shares at any time until 11:59 p.m. (New York City time) on the Expiration Date. In addition, if we
have not accepted your Shares for payment by the end of November 17, 2015, which is the 60th day after the date of the commencement of the Offer, you may withdraw them at any time after that date until we accept your Shares for payment.
See Section 4 — “Withdrawal Rights.”
How do I withdraw previously tendered Shares?
To withdraw previously tendered Shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information
to the Depositary while you still have the right to withdraw Shares. If you tendered Shares by giving instructions to a broker, bank or other nominee, you must instruct the broker, bank or other nominee to arrange for the withdrawal of your Shares.
See Section 4 — “Withdrawal Rights.”
Has the Offer been approved by the Company’s board of directors?
After careful consideration, the board of directors of Millennial Media duly and unanimously adopted resolutions (i) determining that the
Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to and in the best interests of Millennial Media and its stockholders, (ii) approving and declaring advisable the Merger Agreement and the
transactions contemplated thereby, including the Offer and the Merger, in accordance with the requirements of Delaware law and (iii) recommending that the stockholders of Millennial Media accept the Offer and tender their Shares to Purchaser in
the Offer.
See the “Introduction” and Section 10 — “Background of the Offer; Past Contacts or Negotiations with
Millennial Media.” A more complete description of the reasons for Millennial Media’s board of directors’ approval of the Offer and the Merger is set forth in the Solicitation/Recommendation Statement on Schedule 14D-9 of Millennial
Media.
If the Offer is completed, will Millennial Media continue as a public company?
No. As soon as practicable following consummation of the Offer, we expect to complete the Merger pursuant to applicable provisions of Delaware
law and the Merger Agreement, after which the Surviving Corporation will be a wholly owned subsidiary of Parent and the Shares will no longer be publicly traded.
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See Section 13 — “Certain Effects of the Offer.”
Will the Offer be followed by the Merger if all of the Shares are not tendered in the Offer?
If the Minimum Condition is satisfied and we accordingly acquire at least a majority of the Shares on a fully-diluted basis in the Offer then,
in accordance with the terms of the Merger Agreement, we will complete the Merger without a vote of the stockholders of Millennial Media pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”).
If the Minimum Condition is not satisfied, pursuant to the Merger Agreement we are not required to accept the Shares for purchase or consummate the Merger and we are not permitted to accept the Shares tendered without the Company’s consent.
Under the applicable provisions of the Merger Agreement, the Offer and the DGCL, stockholders of Millennial Media (i) will not be
required to vote on the Merger, (ii) will be entitled to seek appraisal rights under Delaware law in connection with the Merger if they do not tender Shares in the Offer and (iii) will, if they do not validly exercise appraisal rights
under Delaware law, receive the same cash consideration, without interest and less any applicable withholding taxes, in the Merger for their Shares as was payable in the Offer (the “Merger Consideration”).
See Section 11 — “The Merger Agreement,” Section 12 — “Purpose of the Offer; Plans for Millennial Media
— Merger Without a Stockholder Vote” and Section 17 — “Appraisal Rights.”
What is the market value of my Shares as of a
recent date?
On September 2, 2015, the trading day before the public announcement of the execution of the Merger Agreement and
the terms of the Offer and the Merger, the reported closing sales price of the Shares on the NYSE was $1.34. On September 17, 2015, the last full trading day before the commencement of the Offer, the reported closing sales price of the Shares
on the NYSE was $1.75. We encourage you to obtain a recent market quotation for Shares before deciding whether to tender your Shares.
See
Section 6 — “Price Range of Shares; Dividends.”
Will I be paid a dividend on my Shares during the pendency of the Offer?
The Merger Agreement provides that from the date of the Merger Agreement to the Effective Time, without the prior written consent of Parent,
Millennial Media will not declare, set aside, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the capital stock of Millennial Media.
See Section 6 — “Price Range of Shares; Dividends.”
Will I have appraisal rights in connection with the Offer?
No appraisal rights will be available to you in connection with the Offer. However, if we accept Shares in the Offer and the Merger is
completed, stockholders will be entitled to appraisal rights in connection with the Merger if they did not tender Shares in the Offer, subject to and in accordance with the DGCL. Stockholders must properly perfect their right to seek appraisal under
the DGCL in connection with the Merger in order to exercise appraisal rights.
See Section 17 — “Appraisal Rights.”
What will happen to my stock options in the Offer?
The Offer is made only for Shares and is not made for any stock options to purchase Shares, including options that were granted under certain
Millennial Media equity compensation plans. If you hold a stock option
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to purchase Shares that is exercisable you may, in accordance with the terms and conditions governing such stock option, and, subject to any applicable blackout period(s), exercise the stock
option for Shares and thereafter participate in the Offer, subject to the terms and conditions governing the Offer. Any stock options which remain outstanding and unexercised as of the Effective Time shall be treated as provided in accordance with
the Merger Agreement.
See Section 11 — “The Merger Agreement — Merger Agreement — Treatment of Company
Options.”
What will happen to my restricted stock unit awards in the Offer?
The Offer is made only for Shares and is not made for any award of restricted stock units that was granted under certain Millennial Media
equity compensation plans. Any award of restricted stock units outstanding as of immediately prior to the Effective Time shall be treated as provided in accordance with the Merger Agreement.
See Section 11 — “The Merger Agreement — Merger Agreement — Treatment of Company RSUs.”
What are the material United States federal income tax consequences of the Offer and the Merger?
The receipt of cash in exchange for your Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal
income tax purposes. However, the tax consequences of the Offer or Merger will depend on your particular circumstances so we urge you to consult your own tax advisor as to the particular tax consequences to you of the Offer and the Merger.
See Section 5 — “Certain United States Federal Income Tax Consequences” for a more detailed discussion of the tax
consequences of the Offer and the Merger.
Who should I call if I have questions about the Offer?
You may call Innisfree M&A Incorporated toll-free at (877) 825-8964. Banks and brokers may call collect at (212) 750-5833.
Innisfree M&A Incorporated is acting as the information agent (the “Information Agent”) for our tender offer. See the back cover of this Offer to Purchase for additional contact information.
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INTRODUCTION
To the Holders of Shares of Common Stock of Millennial Media, Inc.:
Mars Acquisition Sub, Inc., a Delaware corporation (which we refer to as “Purchaser”) and a wholly owned direct subsidiary of AOL
Inc., a Delaware corporation (which we refer to as “Parent”) is offering to purchase for cash all of the outstanding shares of common stock, par value $0.001 per share (the “Shares”), of Millennial Media, Inc., a Delaware
corporation (which we refer to as “Millennial Media” or the “Company”), at a purchase price of $1.75 per Share (the “Offer Price”), net to the seller in cash, without interest thereon and less any applicable withholding
taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (the “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal” which, together with this Offer to Purchase
and other related materials, as each may be amended or supplemented from time to time, constitutes the “Offer”).
We are
making the Offer pursuant to an Agreement and Plan of Merger, dated as of September 3, 2015 (as it may be amended from time to time, the “Merger Agreement”), by and among Parent, Purchaser and Millennial Media. The Merger Agreement
provides, among other things, that following the consummation of the Offer and subject to the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Millennial Media (the “Merger”), with Millennial Media
continuing as the surviving corporation (which we refer to as the “Surviving Corporation”) in the Merger. In the Merger, each Share outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other
than Shares held (i) in the treasury of Millennial Media or by Parent or Purchaser, which Shares shall be canceled and shall cease to exist, (ii) by a wholly owned subsidiary of Millennial Media or Parent (other than Purchaser) or a wholly
owned subsidiary of Purchaser, which Shares shall be converted into shares of the Surviving Corporation representing the same percentage ownership in the Surviving Corporation that such holder owned in Millennial Media prior to the Effective Time,
or (iii) by stockholders who validly exercise appraisal rights under Delaware law with respect to such Shares) will be automatically canceled and converted into the right to receive $1.75 or any greater per Share price paid in the Offer,
without interest thereon and less any applicable withholding taxes. As a result of the Merger, Millennial Media will cease to be a publicly traded company and will become wholly owned by Parent. Under no circumstances will interest be paid on the
purchase price for Shares, regardless of any extension of the Offer or any delay in making payment for Shares. The Merger Agreement is more fully described in Section 11 — “The Merger Agreement,” which also contains a
discussion of the treatment of Millennial Media’s equity and equity-based compensation awards.
Tendering stockholders who are
record owners of their Shares and who tender directly to American Stock Transfer & Trust Company, LLC (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. Stockholders who hold their Shares through a broker, bank or other nominee should consult such institution as to whether it
charges any service fees or commissions.
The Offer is conditioned upon, among other things, (a) the absence of a termination of the
Merger Agreement in accordance with its terms (the “Termination Condition”) and (b) the satisfaction of (i) the Minimum Condition (as defined below), (ii) the Antitrust Law Condition (as defined below), (iii) the
Governmental Authority Condition (as defined below), (iv) the Representations Condition (as defined below), (v) the Covenants Condition (as defined below) and (vi) the Material Adverse Effect Condition (as defined below). The Minimum
Condition requires that the number of shares validly tendered in accordance with the terms of the Offer and not validly withdrawn on or prior to 11:59 p.m. (New York City time) on October 16, 2015 (the “Expiration Date,” unless
Purchaser shall have extended the period during which the Offer is open in accordance with the Merger Agreement, in which event “Expiration Date” shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall
expire) (excluding Shares tendered pursuant to guaranteed delivery procedures but not yet delivered) together with any Shares then owned by Parent or its subsidiaries, shall equal at least a majority of the outstanding Shares as of the Expiration
Date (determined on a fully diluted basis, which for these purposes means the number of Shares issued and outstanding plus the number of Shares which Millennial Media would be required to issue pursuant to any then outstanding warrants, options,
benefit plans or
obligations or securities convertible or exchangeable into Shares or otherwise, but only to the extent so exercisable, convertible or exchangeable prior to consummation of the Merger or
exercisable, convertible or exchangeable as a result of the consummation of the Offer or the Merger) (the “Minimum Condition”). The Antitrust Law Condition requires that any applicable waiting period (or any extension thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the “HSR Act”) and any other applicable antitrust law shall have expired or otherwise been terminated (the “Antitrust Law
Condition”). Under the HSR Act, each of Parent and Millennial Media is required to file a Premerger Notification and Report Form with the FTC and the Antitrust Division of the U.S. Department of Justice in connection with the purchase of Shares
in the Offer, which filings were made prior to the date hereof. The Governmental Authority Condition requires that no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or order
which has the effect of making the Offer or Merger illegal or otherwise prohibiting, restraining or preventing the consummation of the Offer or Merger (the “Governmental Authority Condition”). The Representations Condition requires that
certain representations and warranties made by the Company in the Merger Agreement be materially accurate, subject to the materiality and other qualifications set forth in the Merger Agreement (the “Representations Condition”). The
Covenants Condition requires that Millennial Media materially comply with all covenants pursuant to the Merger Agreement (the “Covenants Condition”). The Material Adverse Effect Condition requires that since September 3, 2015, there
shall not have occurred and be continuing as of the Expiration Date a Company Material Adverse Effect (or any event, development or circumstances that, if it had occurred, would have, or would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect), in each case as defined under the Merger Agreement (the “Material Adverse Effect Condition”). The Offer also is subject to other conditions as described in this Offer to Purchase. See
Section 15 — “Conditions to the Offer.”
After careful consideration, the board of directors of Millennial Media,
duly and unanimously adopted resolutions (i) determining that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to and in the best interests of Millennial Media’s stockholders,
(ii) approving and declaring advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, in accordance with the requirements of the DGCL and (iii) recommending that the stockholders of
Millennial Media accept the Offer and tender their Shares to Purchaser in the Offer.
A more complete description of Millennial
Media’s board of directors’ reasons for authorizing and approving the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, is set forth in the Solicitation/Recommendation Statement on Schedule
14D-9 of Millennial Media (together with any exhibits and annexes attached thereto, the “Schedule 14D-9”), that is being furnished to stockholders in connection with the Offer. Stockholders should carefully read the information set forth
in the Schedule 14D-9, including the information set forth under the sub-heading “Background of the Merger; Reasons for the Recommendation of the Board.”
Millennial Media has advised Parent that, as of September 15, 2015, there were (i) 142,731,031 Shares issued and outstanding, and
(ii) 28,408,191 Shares authorized and reserved for future issuance under certain of Millennial Media’s equity compensation plans including outstanding stock options to purchase 15,182,812 Shares, and 7,426,395 Shares reserved for issuance
upon settlement of outstanding Company restricted stock unit awards. As of September 15, 2015, assuming the Offer expired on that date, the Minimum Condition would be satisfied if at least approximately 78,401,167 Shares are validly tendered
and not validly withdrawn.
Pursuant to the Merger Agreement, the board of directors of the Surviving Corporation effective as of, and
immediately following, the Effective Time shall consist of the members of the board of directors of Purchaser immediately prior to the Effective Time, and the officers of the Surviving Corporation shall consist of the officers of the Company
immediately prior to the Effective Time, in each case unless Parent in its sole discretion elects prior to the Effective Time to appoint other persons to such positions.
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This Offer to Purchase does not constitute a solicitation of proxies, and Purchaser is not
soliciting proxies in connection with the Offer or the Merger. If the Minimum Condition is satisfied and Purchaser consummates the Offer, Purchaser will consummate the Merger under the DGCL without a vote of the stockholders of Millennial Media.
Certain United States federal income tax consequences of the sale of Shares pursuant to the Offer and the exchange of Shares pursuant to
the Merger are described in Section 5 — “Certain United States Federal Income Tax Consequences.”
This Offer to Purchase and the
related Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer.
THE TENDER OFFER
Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), we will accept for payment and promptly pay for all Shares validly tendered by the Expiration Date and not properly withdrawn as permitted
under Section 4 — “Withdrawal Rights.”
Acceptance and payment for Shares pursuant to and subject to the conditions of
the Offer is referred to as the “Offer Closing,” and the date on which such Offer Closing occurs, which shall be October 19, 2015, unless we extend the Offer pursuant to the terms of the Merger Agreement, is referred to as the
“Offer Closing Date.” The time at which the Merger becomes effective is referred to as the “Effective Time.”
The
Offer is conditioned upon, among other things, (a) the Termination Condition and (b) the satisfaction of (i) the Minimum Condition, (ii) the Antitrust Law Condition, (iii) the Governmental Authority Condition, (iv) the
Representations Condition, (v) the Covenants Condition and (vi) the Material Adverse Effects Condition, and the other conditions described in Section 15 — “Conditions to the Offer.”
We have agreed in the Merger Agreement that, subject to our rights to terminate the Merger Agreement in accordance with its terms, Purchaser
must extend the Offer (i) on one or more occasions, for successive periods of up to 5 business days each (or up to 20 business days if Parent so elects and the Company agrees) in order to enable the Offer Conditions to be satisfied and
(ii) for any period required by applicable law or any applicable rules, regulations, interpretations or positions of the SEC or its staff or the New York Stock Exchange (the “NYSE”). In no event will Purchaser be required, or
permitted without the Company’s consent, to extend the Offer beyond March 3, 2016 (the “Outside Date”) unless at such time Parent is in material breach of the Merger Agreement and such material breach has caused or resulted in
the Offer not being consummated by such date.
Subject to the applicable rules and regulations of the SEC, Purchaser expressly reserves
the right to waive, in whole or in part, any condition to the Offer or modify the terms of the Offer; provided, however, that, without the consent of Millennial Media, we are not permitted to, (i) decrease the Offer Price, (ii) change the
form of consideration payable in the Offer, (iii) change the number of Shares to be purchased in the Offer, (iv) amend or waive the Minimum Condition, the Termination Condition, the Antitrust Law Condition or the Governmental Authority
Condition, (v) add any condition to the Offer or any term that is adverse to holders of Shares, (vi) extend the expiration of the Offer except as required or permitted by the Merger Agreement, (vii) provide for a “subsequent
offering period” (or any extension thereof) in accordance with Rule 14d-11 under the Exchange Act or (viii) modify, supplement or amend any other term or condition of the Offer in a manner adverse to the holders of Shares.
-3-
Any extension, delay, termination or amendment of the Offer will be followed as promptly as
practicable by public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the
manner in which Purchaser may choose to make any public announcement, it currently intends to make announcements regarding the Offer by issuing a press release and making any appropriate filing with the SEC.
If we extend the Offer, are delayed in our acceptance for payment of, or payment (whether before or after our acceptance for payment of
Shares) for, Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer and the Merger Agreement, the Depositary may retain tendered Shares on our behalf, and such
Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described herein under Section 4 — “Withdrawal Rights.” However, our ability to delay the payment for Shares that
we have accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires us to promptly pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or
withdrawal of the Offer.
If we make a material change in the terms of the Offer or the information concerning the Offer or if we waive a
material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d)(1), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an offer must
remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative
materiality of the changes in terms or information. In a published release, the SEC has stated that, in its view, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to
stockholders, and that if material changes are made with respect to information that approaches the significance of price and the percentage of securities sought, a minimum period of 10 business days may be required to allow for adequate
dissemination to stockholders and investor response.
If, on or before the Expiration Date, we increase the consideration being paid for
Shares accepted for payment in the Offer, such increased consideration will be paid to all stockholders whose Shares are purchased in the Offer, whether or not such Shares were tendered before the announcement of the increase in consideration.
Pursuant to the terms of the Merger Agreement, we are not permitted to provide a subsequent offering period for the Offer without prior
written approval of Millennial Media.
We expressly reserve the right, in our sole discretion, subject to the terms and conditions of the
Merger Agreement and the applicable rules and regulations of the SEC, not to accept for payment any Shares if, at the Expiration Date, any of the conditions to the Offer have not been satisfied. See Section 15 — “Conditions to the
Offer.” Under certain circumstances, we may terminate the Merger Agreement and the Offer. See Section 11 — “The Merger Agreement — Merger Agreement — Termination.”
Immediately following the purchase of Shares in the Offer, in accordance with the terms of the Merger Agreement, we will complete the Merger
without a vote of the stockholders of Millennial Media pursuant to Section 251(h) of the DGCL.
Millennial Media has provided us with
its stockholder list and security position listings for the purpose of disseminating this Offer to Purchase, the related Letter of Transmittal and other related materials to holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on the stockholder list of Millennial Media 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 for subsequent transmittal to
beneficial owners of Shares.
-4-
| 2. |
Acceptance for Payment and Payment for Shares. |
Subject to the satisfaction or waiver of
all the conditions to the Offer set forth in Section 15 — “Conditions to the Offer,” we will accept for payment and pay for Shares validly tendered and not properly withdrawn pursuant to the Offer promptly after the Expiration
Date. If we, with the consent of Millennial Media, commence a subsequent offering period in connection with the Offer, we will immediately accept for payment and promptly pay for all additional Shares tendered during such subsequent offering period,
subject to and in compliance with the requirements of Rule 14d-11(e) under the Exchange Act. Subject to compliance with Rule 14e-1(c) under the Exchange Act and the Merger Agreement, we expressly reserve the right to delay payment for Shares in
order to comply in whole or in part with any applicable law, including, without limitation, the HSR Act and any other applicable antitrust competition or merger control laws. See Section 16 — “Certain Legal Matters; Regulatory
Approvals.”
In all cases, we will pay for Shares tendered and accepted for payment pursuant to the Offer only after timely receipt
by the Depositary of (i) the certificates evidencing such Shares (the “Share Certificates”) or confirmation of a book-entry transfer of such Shares (a “Book-Entry Confirmation”) into the Depositary’s account at The
Depository Trust Company (“DTC”) pursuant to the procedures set forth in Section 3 — “Procedures for Accepting the Offer and Tendering Shares,” (ii) 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 (as described below) in lieu of the Letter of Transmittal and (iii) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when Share Certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary.
The term “Agent’s Message” means a message, transmitted by DTC to and received by the Depositary and forming a part of a
Book-Entry Confirmation, that states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by
the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against such participant.
For purposes of the
Offer, we will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn as, if and when we give oral or written notice to the Depositary of our 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 Offer Price for such Shares with the Depositary, which will act as paying agent for
tendering stockholders for the purpose of receiving payments from us and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. Under no circumstances will we pay interest on the purchase price for
Shares by reason of any extension of the Offer or any delay in making such payment for Shares.
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 DTC pursuant to the procedure set forth in Section 3 — “Procedures for Accepting the Offer and
Tendering Shares,” such Shares will be credited to an account maintained at DTC), promptly following the expiration or termination of the Offer.
| 3. |
Procedures for Accepting the Offer and Tendering Shares. |
Valid Tenders. In order for a stockholder 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 in lieu of the Letter of Transmittal) 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 (A) the Share Certificates
-5-
evidencing tendered Shares must be received by the Depositary at such address, (B) 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 or (C) the tendering stockholder must comply with the guaranteed delivery procedures described below under “— Guaranteed Delivery”, in each case by the Expiration
Date.
Book-Entry Transfer. The Depositary will establish an account with respect to the Shares at DTC 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 DTC may make a book-entry delivery of Shares by causing DTC to transfer such Shares into the Depositary’s
account at DTC in accordance with DTC’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at DTC, either 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 in lieu of the Letter of Transmittal, 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 by the Expiration Date. Delivery of documents to DTC does not constitute delivery to the Depositary.
Guaranteed Delivery. If you wish to tender Shares pursuant to the Offer and cannot deliver such Shares and all other required documents
to the Depositary by the Expiration Date or cannot complete the procedure for delivery by book-entry transfer on a timely basis, you may nevertheless tender such Shares if all of the following conditions are met:
| |
• |
|
such tender is made by or through an Eligible Institution (as defined below); |
| |
• |
|
a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by us with this Offer to Purchase is received by the Depositary (as provided below) by the Expiration Date; and
|
| |
• |
|
the Share certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with a properly completed and duly executed Letter of Transmittal with any
required signature guarantee (or an Agent’s Message) and any other required documents, are received by the Depositary within three (3) NYSE trading days after the date of execution of the Notice of Guaranteed Delivery. |
The Notice of Guaranteed Delivery may be transmitted by overnight courier or mail to the Depositary and must include a guarantee by an
Eligible Institution (as defined below) in the form set forth in the form of Notice of Guaranteed Delivery made available by Purchaser.
Guarantee of Signatures. No signature guarantee is required on the Letter of Transmittal (i) if the Letter of Transmittal is
signed by the registered holder(s) (which term, for purposes of this Section 3, includes any participant in DTC’s systems whose name appears on a security position listing as the owner of the Shares) of the Shares tendered therewith,
unless such registered holder has completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (ii) if the Shares are tendered for the
account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of the Securities Transfer Agents Medallion Program or any other “eligible guarantor
institution,” as such term is defined in Rule 17Ad-15 of the Exchange Act (each an “Eligible Institution” and collectively “Eligible Institutions”). In all other cases, all signatures on a Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a Share Certificate is registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made or
delivered to, or a Share Certificate not accepted for payment or not tendered is to be issued in, the name of a person other than the registered holder, then the Share Certificate must be endorsed or accompanied by duly executed stock powers, in
either case signed exactly as the name of the registered holder appears on the Share Certificate, with the signature on such Share Certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See
Instructions 1 and 5 of the Letter of Transmittal.
-6-
The method of delivery of Share Certificates, the Letter of Transmittal and all other required
documents, including delivery through DTC, is at the option and risk of the tendering stockholder, and the delivery of all such documents will be deemed made (and the risk of loss and the title of Share Certificates will pass) only when actually
received by the Depositary (including, in the case of a book-entry transfer, receipt of a Book-Entry Confirmation). 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 by the Expiration Date.
The tender of Shares pursuant to any one of the procedures
described above will constitute the tendering stockholder’s acceptance of the Offer, as well as the tendering stockholder’s representation and warranty that such stockholder has the full power and authority to tender and assign the Shares
tendered, as specified in the Letter of Transmittal. Our acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and us upon the terms and subject to the conditions of the
Offer (and if the Offer is extended or amended, the terms of or the conditions to any such extension or amendment).
Determination of
Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by us, in our sole discretion, which determination shall be final and binding on all
parties. We reserve the absolute right to reject any and all tenders determined by us not to be in proper form or the acceptance for payment of which may, in our opinion, be unlawful. We also reserve the absolute right to waive any defect or
irregularity in the tender of 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 waived or cured within such time as Purchaser shall determine. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defects or irregularities in tenders or
incur any liability for failure to give any such notice. Subject to applicable law as applied by a court of competent jurisdiction and the terms of the Merger Agreement, our interpretation of the terms and conditions of the Offer (including the
Letter of Transmittal and the instructions thereto) will be final and binding.
Appointment. By executing the Letter of Transmittal
as set forth above, the tendering stockholder will irrevocably appoint designees of Purchaser as such stockholder’s attorneys-in-fact and proxies in the manner set forth in the Letter of Transmittal, each with full power of substitution, 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 securities or rights issued or issuable in respect of such Shares. All
such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, we accept for payment Shares tendered by such stockholder
as provided herein. Upon such appointment, all prior powers of attorney, proxies and consents given by such stockholder with respect to such Shares or other securities or rights will, without further action, be revoked and no subsequent powers of
attorney, proxies, consents or revocations may be given by such stockholder (and, if given, will not be deemed effective). The designees of Purchaser will thereby be empowered to exercise all voting, consent and other rights with respect to such
Shares and other related securities or rights, including, without limitation, in respect of any annual, special or adjourned meeting of the Company’s stockholders, actions by written consent in lieu of any such meeting, as they in their sole
discretion deem proper. We reserve the right to require that, in order for Shares to be deemed validly tendered, immediately upon our acceptance for payment of such Shares, Purchaser or its designees must be able to exercise full voting, consent
and other rights with respect to such Shares and other related securities or rights, including voting at any meeting of the Company’s stockholders.
Information Reporting and Backup Withholding. Payments made to stockholders of Millennial Media in the Offer or the Merger generally
will be subject to information reporting and may be subject to backup withholding on the cash received pursuant to the Offer or Merger. To avoid backup withholding, U.S. stockholders that do not otherwise establish an exemption should complete and
return the Internal Revenue Service (“IRS”) Form W-9 included in the Letter of Transmittal, certifying that such stockholder is a United States person, that the taxpayer
-7-
identification number (generally a social security number, in the case of an individual, or employer identification number in the case of other stockholders) provided is correct, and that
such stockholder is not subject to backup withholding. To avoid backup withholding, foreign stockholders should submit an appropriate and properly completed IRS Form W-8, a copy of which may be obtained from the Depositary, in order to avoid backup
withholding. Such foreign stockholders should consult a tax advisor to determine which Form W-8 is appropriate.
Backup withholding
is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a stockholder’s U.S. federal income tax liability, provided the required information is timely furnished in the
appropriate manner to the IRS.
Shares tendered pursuant to the Offer may
be withdrawn at any time prior to 11:59 p.m. (New York City time) on the Expiration Date and, unless previously accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after November 17, 2015, which is the
60th day after the date of the commencement of the Offer.
For a withdrawal to be effective, a written, telegraphic 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 —
“Procedures for Accepting the Offer and Tendering Shares,” any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares.
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 by again following one of the procedures described in Section 3 — “Procedures for Accepting the Offer and Tendering Shares” at any time by the Expiration Date.
We will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice of
withdrawal subject to applicable law as applied by a court of competent jurisdiction, and our determination will be final and binding. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notice
of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.
| 5. |
Certain United States Federal Income Tax Consequences. |
The
following is a general summary of the material United States federal income tax consequences of the Offer and the Merger to U.S. Holders (as defined below) of Millennial Media whose Shares are tendered and accepted for payment pursuant to the Offer
or whose Shares are converted into the right to receive cash in the Merger. The summary is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing, proposed and temporary regulations thereunder
and administrative and judicial interpretations thereof, all of which are subject to change, possibly with retroactive effect. Any such change could affect the accuracy of the statements and conclusions set forth in this discussion. We have not
sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed herein, or that a
court will not sustain any challenge by the IRS in the event of litigation.
-8-
The summary applies only to U.S. Holders who hold Shares as capital assets within the meaning of
Section 1221 of the Code (generally, property held for investment). This summary does not address the application of the Medicare tax on net investment income under Section 1411 of the Code, nor does it address any foreign, state or local
tax consequences of the Offer or the Merger. In addition, this summary does not address United States federal taxes other than income taxes. Further, this discussion does not purport to consider all aspects of United States federal income taxation
that may be relevant to a holder in light of its particular circumstances, or that may apply to a holder that is subject to special treatment under the United States federal income tax laws (including, for example, but not limited to, foreign
taxpayers, small business investment companies, regulated investment companies, real estate investment trusts, S corporations, controlled foreign corporations, passive foreign investment companies, cooperatives, banks and certain other financial
institutions, insurance companies, tax-exempt organizations, retirement plans, stockholders that are, or hold Shares through, partnerships or other pass-through entities for United States federal income tax purposes, U.S. Holders whose functional
currency is not the United States dollar, dealers or brokers in securities or foreign currencies, traders that mark-to-market their securities, expatriates and former long-term residents of the United States, persons subject to the alternative
minimum tax, stockholders holding Shares that are part of a straddle, hedging, constructive sale or conversion transaction, stockholders who receive cash pursuant to the exercise of appraisal rights, and stockholders who received Shares pursuant to
the exercise or settlement of employee stock options, stock purchase rights, restricted stock units or stock appreciation rights, as restricted stock, or otherwise as compensation).
For purposes of this summary, the term “U.S. Holder” means a beneficial owner of Shares that, for United States federal income tax
purposes, is: (i) an individual who is a citizen or resident of the United States; (ii) a corporation, or an entity treated as a corporation for United States federal income tax purposes, created or organized under the laws of the United
States, any state thereof or the District of Columbia; (iii) an estate that is subject to United States federal income tax on its income regardless of its source; or (iv) a trust, if (A) a United States court is able to exercise
primary supervision over the trust’s administration and one or more United States persons, within the meaning of Section 7701(a)(30) of the Code, have authority to control all of the trust’s substantial decisions or (B) the trust
has validly elected to be treated as a United States person for United States federal income tax purposes. This discussion does not address the tax consequences to stockholders who are not U.S. Holders.
If a partnership, or another entity treated as a partnership for United States federal income tax purposes, holds Shares, the tax treatment of
its partners or members generally will depend upon the status of the partner or member and the partnership’s activities. Accordingly, partnerships or other entities treated as partnerships for United States federal income tax purposes that hold
Shares, and partners or members in those entities, are urged to consult their tax advisors regarding the specific United States federal income tax consequences to them of the Offer and the Merger.
Because individual circumstances may differ, each stockholder should consult its, his or her own tax advisor to determine the applicability
of the rules discussed below and the particular tax consequences of the Offer and the Merger on a beneficial owner of Shares, as well as any consequences arising under the alternative minimum tax and any state, local and foreign tax laws.
The exchange of Shares for cash pursuant to the Offer or the Merger will be a taxable transaction to U.S. Holders for United States federal
income tax purposes. In general, a U.S. Holder who exchanges Shares for cash pursuant to the Offer or the Merger will recognize gain or loss for United States federal income tax purposes in an amount equal to the difference, if any, between the
amount of cash received and the U.S. Holder’s adjusted tax basis in the Shares exchanged. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction). Such gain or loss
will generally be capital gain or loss and will be long-term capital gain or loss if a U.S. Holder’s holding period for such Shares is more than one year at the time of the exchange of Shares pursuant to the Offer or the Merger, as the case may
be. Long-term capital gain recognized by a non-corporate U.S. Holder is generally taxable at a reduced rate. The deductibility of capital losses is subject to certain limitations.
-9-
A stockholder who exchanges Shares pursuant to the Offer or the Merger is subject to information
reporting and may be subject to backup withholding unless certain information is provided to the Depositary or an exemption applies. See Section 3 — “Procedures for Accepting the Offer and Tendering Shares.”
| 6. |
Price Range of Shares; Dividends. |
The Shares currently trade on the NYSE under the
symbol “MM”. Millennial Media advised Parent that, as of September 15, 2015, there were (i) 142,731,031 Shares issued and outstanding and (ii) 28,408,191 Shares authorized and reserved for future issuance under certain of
Millennial Media’s equity compensation plans (including outstanding stock options) to purchase 15,182,812 Shares and 7,426,395 Shares reserved for issuance upon settlement of outstanding Company restricted stock unit awards. As of
September 15, 2015, no Shares were held in treasury and no Shares were held by a subsidiary of Millennial Media.
The following table
sets forth, for the periods indicated, the high and low sale prices per Share for each quarterly period within the three preceding fiscal years, as reported on the NYSE per share for each such quarterly period. Millennial Media has not declared or
paid cash dividends on its Shares to date.
|
|
|
|
|
|
|
|
|
| |
|
High |
|
|
Low |
|
| Year Ended December 31, 2012 |
|
|
|
|
|
|
|
|
| First Quarter |
|
$ |
27.90 |
|
|
$ |
22.61 |
|
| Second Quarter |
|
|
23.64 |
|
|
|
10.98 |
|
| Third Quarter |
|
|
16.49 |
|
|
|
9.00 |
|
| Fourth Quarter |
|
|
16.86 |
|
|
|
11.51 |
|
| Year Ended December 31, 2013 |
|
|
|
|
|
|
|
|
| First Quarter |
|
$ |
14.66 |
|
|
$ |
6.26 |
|
| Second Quarter |
|
|
8.95 |
|
|
|
5.87 |
|
| Third Quarter |
|
|
10.48 |
|
|
|
6.36 |
|
| Fourth Quarter |
|
|
7.48 |
|
|
|
5.78 |
|
| Year Ended December 31, 2014 |
|
|
|
|
|
|
|
|
| First Quarter |
|
$ |
8.44 |
|
|
$ |
5.81 |
|
| Second Quarter |
|
|
7.14 |
|
|
|
2.90 |
|
| Third Quarter |
|
|
5.00 |
|
|
|
1.66 |
|
| Fourth Quarter |
|
|
2.11 |
|
|
|
1.46 |
|
| Year Ended December 31, 2015 |
|
|
|
|
|
|
|
|
| First Quarter |
|
$ |
1.74 |
|
|
$ |
1.28 |
|
| Second Quarter |
|
|
1.88 |
|
|
|
1.40 |
|
| Third Quarter (through September 17, 2015) |
|
|
2.06 |
|
|
|
1.18 |
|
On September 2, 2015, the trading day before the public announcement of the execution of the Merger
Agreement and the terms of the Offer and the Merger, the reported closing sales price of the Shares on the NYSE was $1.34. On September 17, 2015, the last full trading day before the commencement of the Offer, the reported closing sales price
of the Shares on the NYSE was $1.75. Stockholders are encouraged to obtain a recent market quotation for Shares before deciding whether to tender Shares.
The Merger Agreement provides that from the date of the Merger Agreement to the Effective Time, without the prior written consent of Parent,
Millennial Media will not, and will not allow its subsidiaries to, declare, set aside, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the capital stock of Millennial Media or
any subsidiary of Millennial Media, subject to limited exceptions.
| 7. |
Certain Information Concerning Millennial Media. |
Except as specifically set forth
herein, the information concerning Millennial Media contained in this Offer to Purchase has been taken from or is based upon information furnished by Millennial Media or its
-10-
representatives or upon publicly available documents and records on file with the SEC and other public sources. You should consider the summary information set forth below in conjunction with the
more comprehensive financial and other information in Millennial Media’s public filings with the SEC (which may be obtained and inspected as described below) and other publicly available information.
General. Millennial Media was incorporated as a Delaware corporation on May 30, 2006. Millennial Media’s principal offices
are located at 2400 Boston Street, Suite 300, Baltimore, Maryland 21224 and its telephone number is (410) 522-8705. The following description of Millennial Media and its business has been taken from Millennial Media’s Annual Report on Form
10-K for the fiscal year ended December 31, 2014 and is qualified in its entirety by reference to such Form 10-K. Millennial Media is the leading independent mobile advertising marketplace, making mobile advertising simple for the world’s
top brands, app developers and mobile web publishers. Millennial Media’s unique data and technology assets enable its advertising clients to connect with their target audiences at scale. Millennial Media also drives monetization for its
publisher and developer partners by connecting them to networks, advertisers and a real-time bidding exchange.
Available
Information. The Shares are registered under the Exchange Act. Accordingly, Millennial Media is subject to the information reporting requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the SEC relating to its business, financial condition and other matters. Information as of particular dates concerning Millennial Media’s directors and officers, their remuneration, stock options granted to
them, the principal holders of Millennial Media’s securities, any material interests of such persons in transactions with Millennial Media and other matters is required to be disclosed in proxy statements, the most recent one having been filed
with the SEC on April 24, 2015 and distributed to Millennial Media’s stockholders on April 24, 2015. Certain of this information also will be available in the Schedule 14D-9. Such reports, proxy statements and other information are
available for inspection at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Copies of such information may be obtainable
by mail, upon payment of the SEC’s customary charges, by writing to the SEC at the address above. The SEC also maintains a web site on the Internet at www.sec.gov that contains reports, proxy statements and other information regarding
registrants, including Millennial Media, that file electronically with the SEC.
Stockholders are encouraged to review the Schedule
14D-9 carefully and in its entirety before deciding whether to tender Shares.
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Certain Information Concerning Parent and Purchaser. |
Parent and Purchaser.
Parent is a Delaware corporation. Parent is a wholly owned subsidiary of Verizon Communications Inc., a Delaware corporation (“Verizon”) and holding company that, acting through its subsidiaries, is one of the world’s leading
providers of communications, information and entertainment products and services to consumers, businesses and governmental agencies. Verizon offers voice, data and video services and solutions on its wireless and wireline networks that are designed
to meet customers’ demand for mobility, reliable network connectivity, security and control. Parent is a leading global media technology company with a substantial worldwide audience and a suite of digital brands, products and services offered
to consumers, advertisers, publishers and subscribers. Parent is focused on attracting and engaging consumers by creating and offering high quality branded online digital content, products and services and providing valuable advertising services on
both its owned and operated properties and third-party websites.
Purchaser is a Delaware corporation formed on September 1,
2015 solely for the purpose of completing the proposed Offer and Merger and has conducted no business activities other than those related to the structuring and negotiation of the Offer and the Merger in connection with the Offer and the Merger.
Purchaser has minimal assets and liabilities other than the contractual rights and obligations related to the Merger Agreement. Upon the completion of the Merger, Purchaser’s separate corporate existence will cease and Millennial Media will
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continue as the Surviving Corporation. Until immediately prior to the time Purchaser purchases 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 incidental to its formation and capitalization and the transactions contemplated by the Offer and the Merger. Purchaser is a wholly owned subsidiary of Parent.
The business address of each of Parent and Purchaser is 770 Broadway, New York, New York 10003. The business telephone number for each of
Parent and Purchaser is 212-652-6400. The business address of Verizon is 1095 Avenue of the Americas, New York, New York 10036 and Verizon’s business telephone number is (212) 395-1000.
The name, citizenship, business address, present principal occupation or employment and five-year employment history of each of the directors
and executive officers of Parent, Purchaser and Verizon are listed in Schedule I to this Offer to Purchase.
During the last five years,
none of Parent, Purchaser, Verizon or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was 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 such person from future
violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of such laws.
Except
as described above or in Schedule I hereto, (i) none of Parent, Purchaser, Verizon or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned
subsidiary of Parent, Purchaser or Verizon or any of the persons so listed beneficially owns or has any right to acquire, directly or indirectly, any Shares and (ii) none of Parent, Purchaser, Verizon or, to the best knowledge of Parent and
Purchaser, any of the persons or entities referred to in Schedule I hereto nor any director, executive officer or subsidiary of any of the foregoing has effected any transaction in respect of any Shares during the past 60 days.
Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent, Purchaser, Verizon or, to the
best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Millennial Media
(including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any 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, none
of Purchaser, Parent, Verizon or, to the best knowledge of Purchaser and Parent, any of the persons listed in Schedule I hereto, has had any business relationship or transaction with Millennial Media or any of its executive officers, directors or
affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer. Except as set forth in this Offer to Purchase, there have been no material contacts, negotiations or transactions between Parent, Verizon
or any of their respective subsidiaries or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and Millennial Media or its affiliates, on the other hand, concerning a
merger, consolidation, acquisition, tender offer for or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets during the past two years.
Available Information. Pursuant to Rule 14d-3 under the Exchange Act, we have filed with the SEC a Tender Offer Statement on Schedule
TO (the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The Schedule TO and the exhibits thereto, as well as other information filed by Parent and Purchaser with the SEC, are available for
inspection at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
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public reference room. Copies of such information may be obtainable by mail, upon payment of the SEC’s customary charges, by writing to the SEC at the address above. The SEC also
maintains a web site on the Internet at www.sec.gov that contains the Schedule TO and the exhibits thereto and other information that Purchaser has filed electronically with the SEC.
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Source and Amount of Funds. |
Purchaser estimates that the total funds required to
complete the Offer and the Merger, to repay certain existing indebtedness of Millennial Media, and to pay related transaction fees and expenses will be approximately $279 million.
We expect that we will have at the completion of the Offer and the closing of the Merger access to sufficient cash from Verizon and our other
affiliates to provide us with funds for these purposes through an intercompany loan (the terms of which have not yet been determined). We believe that it will not be necessary for Verizon to borrow funds in order to enable us to complete the Offer
and close the Merger. Parent and Purchaser do not have any alternative financing plans or arrangements. The Offer is not conditioned upon Parent’s or Purchaser’s ability to finance the purchase of Shares pursuant to the Offer.
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Background of the Offer; Past Contacts or Negotiations with Millennial Media. |
The
following is a description of contacts between representatives of Parent or Purchaser and representatives of Millennial Media that resulted in the execution of the Merger Agreement and the other agreements related to the Offer. The chronology below
covers only the key events leading up to the execution of the Merger Agreement and the other agreements related to the Offer, and does not purport to catalogue every conversation between representatives of Parent or Purchaser and representatives of
Millennial Media. For a review of Millennial Media’s activities relating to these contacts, please refer to the Schedule 14D-9, including the information set forth in Item 4 under the sub-headings “Background of the Merger; Reasons
for the Recommendation of the Board”.
Parent and Purchaser have no knowledge that the information provided by Millennial Media set
forth below regarding Millennial Media and meetings or discussions in which Parent, Purchaser and their affiliates or representatives did not participate is untrue or incomplete in any material respect.
Background of the Offer
Members
of Parent’s management over time have reviewed and discussed business, operational and strategic plans to enhance and complement Parent’s business. Further to such discussions, on January 16, 2015, Parent’s Chief Executive
Officer contacted Millennial Media’s Chief Executive Officer to schedule a meeting. On January 19, 2015, Parent and Millennial Media entered into a mutual confidentiality agreement, effective January 16, 2015, to facilitate
discussions at the meeting.
On January 20, 2015, Parent’s Chief Executive Officer and Parent’s Senior Vice President for
Corporate Development met with Millennial Media’s Chief Executive Officer and Executive Vice President for Business Strategy. At the meeting, Parent expressed an interest in exploring a potential strategic transaction with Millennial Media and
presented preliminary views on potential structuring for such a transaction. No other specific terms of a potential transaction were discussed, including price.
On January 29, 2015, at a meeting of Parent’s board of directors, a strategic transaction with Millennial Media was discussed as one
of a number of potential strategic transactions.
On February 4, 2015, members of Parent’s management team met with members of
Millennial Media’s management team to discuss Millennial Media’s business and potential operational and strategic benefits that
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could result from a possible strategic transaction between the parties. Millennial Media’s management team presented an overview of Millennial Media’s current and future business
strategies, and provided information regarding Millennial Media’s managed media and platform business units.
On February 13,
2015, members of Millennial Media’s technical team met with representatives of Parent, during which Millennial Media’s technical team presented a review of Millennial Media’s product strategy and execution.
On February 18 and 19, 2015, members of Millennial Media’s technical team met with members of Parent’s technical and product
team to discuss Millennial Media’s products and technology. The meetings included a detailed diligence review of Millennial Media’s technical and product suite.
On February 27, 2015, at a meeting of Parent’s board of directors, Parent’s Senior Vice President for Corporate Development
reviewed Parent’s strategic priorities, which included a discussion of a potential strategic transaction with Millennial Media.
On
April 22, 2015, Parent’s Chief Executive Officer and Senior Vice President for Corporate Development informed Millennial Media that Parent was pursuing other strategic options that would not necessarily preclude a strategic transaction,
but that Parent wished to defer discussions with Millennial Media while it pursued the other options.
On April 26 and May 3,
2015, at meetings of Parent’s board of directors, Parent’s Chief Executive Officer provided an update on several strategic initiatives, including the status of a potential strategic transaction with Millennial Media.
On May 12, 2015, Verizon publicly announced that it had entered into an agreement to acquire Parent.
On May 18, 2015, Parent, Millennial Media and Verizon executed a joinder agreement to add Verizon as a party to the mutual
confidentiality agreement between Parent and Millennial Media.
On May 27, 2015, at a meeting of Parent’s board of directors,
Parent’s Senior Vice President for Corporate Development provided an update on several strategic initiatives, including the status of the potential strategic transaction with Millennial Media.
On May 29, 2015, Parent’s Senior Vice President for Corporate Development called Millennial Media’s Chief Executive Officer and
made an oral non-binding proposal pursuant to which Parent would acquire Millennial Media for $2.00 per share in cash.
On June 5,
2015, Millennial Media’s Chief Executive Officer informed representatives of Parent that Millennial Media had rejected Parent’s proposal of $2.00 per share.
Later on June 5, 2015, representatives of Parent and Millennial Media’s Chief Executive Officer spoke by telephone, Parent indicated
that it was willing to increase its offer price to $2.10, that this offer was its best offer and was conditioned on exclusivity, and that Parent was prepared to move expeditiously to negotiate and sign a definitive agreement to effect the
transaction. Millennial Media’s Chief Executive Officer responded that he would discuss Parent’s revised proposal with the board of directors of Millennial Media.
On June 6, 2015, Parent delivered a written, non-binding proposal to Millennial Media reflecting the terms of its June 5, 2015
proposal, and which also included an exclusivity period to negotiate a transaction between the parties until July 17, 2015.
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On June 10, 2015, Millennial Media made available to Parent an online data room containing
due diligence information regarding Millennial Media, and Parent, including certain of its external advisors, commenced due diligence on Millennial Media.
On June 15, 2015, Millennial Media’s Chief Executive Officer telephoned representatives of Parent to discuss the possibility of a
further price increase. Parent confirmed that the $2.10 per share price was its best offer on price. Accordingly, Parent and Millennial Media executed an exclusivity agreement pursuant to which the parties agreed to negotiate exclusively until
July 17, 2015, and which contained a standstill provision that would terminate if Millennial Media entered into a definitive agreement with a third party (including Parent) to effect a business combination.
On June 17, 18 and 19, 2015, representatives of Parent held meetings with representatives of Millennial Media. During these meetings, the
parties discussed Millennial Media’s financials, business operations, product and technology, real estate and security infrastructure.
On June 23, 2015, Verizon publicly announced that it had completed its acquisition of Parent.
On June 30, 2015, Parent’s outside counsel, Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”), circulated a first
draft of the Merger Agreement to Goodwin Procter LLP (“Goodwin Procter”), Millennial Media’s outside counsel. The draft Merger Agreement provided, among other things, for the payment by Millennial Media of a termination fee equal to
4.5% of the equity value of the transaction if, among other circumstances, (i) the Merger Agreement was terminated following a specified outside date of the tender offer, or as a result of a material breach by Millennial Media, and
(ii) Millennial Media entered into an alternative transaction within an 18-month period following termination. The draft Merger Agreement also provided for the reimbursement by Millennial Media of Parent’s transaction expenses if the
Merger Agreement was terminated under certain other circumstances.
Over the next two weeks, the parties negotiated the Merger Agreement,
related documents and various issues via conference calls, and several drafts of the Merger Agreement and related documents were exchanged between the parties. In addition, representatives of Parent deliberated to determine which employees of
Millennial Media would potentially be extended offer letters in connection with the execution of the Merger Agreement.
On July 7, 2015,
representatives of Parent, including Parent’s Chief Executive Officer, met with certain employees of Millennial Media. At the meeting, Parent gave an overview of certain of Parent’s assets and discussed the possibility of extending offer
letters to those employees. Later on July 7, 2015, Millennial Media’s Chief Executive Officer had a call with Parent’s Senior Vice President for Corporate Development to discuss the process for extending offer letters to such employees in
advance of execution of the Merger Agreement.
On July 10, 2015, Millennial Media provided Parent a copy of a letter from the SEC
dated July 6, 2015 notifying Millennial Media that the SEC was conducting an informal investigation related to Millennial Media’s goodwill for impairment accounting treatment from October 1, 2013 through the present (“Goodwill
Accounting Treatment”) and requested Millennial Media to produce certain related documents.
Between July 13 and August 24, 2015,
Parent entered into offer letters with Ernest Cormier, Matthew Gillis and seven other Millennial Media employees, which are conditioned upon, and will become effective as of, the closing of the Merger (see Section 12 — “Purpose of the
Offer; Plans for Millennial Media — Plans for Millennial Media” for further details).
On July 14, 2015, Parent communicated
to Millennial Media that until Parent completed to its satisfaction its own diligence of the Goodwill Accounting Treatment, Parent would not proceed with the acquisition of Millennial Media. Parent indicated that its continued evaluation and
negotiation of the proposed transaction required expenditure of additional time, effort and resources, both internal and external, by Parent. As a result of this, the parties agreed to extend discussions regarding the potential transaction beyond
the July 17, 2015
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expiration of the exclusive negotiating period under the exclusivity agreement. Parent requested that Millennial Media agree to maintain exclusivity with Parent and extend the terms of the
exclusivity agreement. Millennial Media informed Parent that it would not agree to do so.
Between July 10 and August 28, 2015,
Parent, along with its outside advisors, conducted diligence related to the Goodwill Accounting Treatment, as well as additional diligence on IT security and privacy matters.
On July 17, 2015, the exclusive negotiating period under the exclusivity agreement expired by its terms.
On July 21, 2015, Parent and Millennial Media executed an amendment to the exclusivity agreement pursuant to which, in lieu of an
extended exclusive negotiating period, Millennial Media agreed that until August 20, 2015 it would promptly notify Parent of the receipt of the initial communication from any third party regarding an acquisition proposal for Millennial Media.
Between August 11 and August 24, 2015, representatives of Parent had conversations with Millennial Media’s Chief Executive
Officer to discuss the status of Parent’s due diligence efforts and the proposed per share consideration. During these conversations, Parent informed Millennial Media that Parent was unwilling to consummate an acquisition of Millennial Media
unless the informal SEC investigation was concluded and resolved favorably to Millennial Media.
On August 25, 2015, Parent delivered
to Millennial Media’s Chief Executive Officer a written non-binding letter of intent with a revised proposed per share price of $1.70, based on (i) Millennial Media’s recent performance, including its recently revised guidance to
lower its earnings forecast; (ii) the results of Parent’s due diligence review, including greater costs than anticipated associated with IT security and privacy matters, among other things; and (iii) the severe downturn in general
market conditions.
On August 26, 2015, Parent, Millennial Media and Verizon executed an amendment to their mutual confidentiality
agreement that extended the term of the agreement.
Also on August 26, 2015, Millennial Media’s Chief Executive Officer called
Parent’s Senior Vice President of Corporate Development to seek an increase in the per share price and an agreement to finalize and execute the Merger Agreement before the upcoming Labor Day weekend. Later on August 26, 2015, Parent
increased the per share consideration set forth in its revised proposal to $1.75, and agreed to work towards execution of the Merger Agreement before Labor Day weekend. Parent communicated that the increased per share purchase price represented its
best and final offer, that there was no further room for negotiation with respect to the offer price, and that if this price was not of interest to Millennial Media and its board of directors, Parent was prepared to withdraw its offer.
On August 27, 2015, representatives of Wachtell Lipton and Goodwin Procter discussed various alternatives to resolving issues related to
the Goodwill Accounting Treatment and the SEC inquiry.
Between August 27, 2015 and September 2, 2015, discussions were held
between Wachtell Lipton and Goodwin Procter related to finalizing the draft Merger Agreement and Millennial Media’s disclosure schedules, including negotiations regarding the amount of the termination fee and expense reimbursement.
On September 2, 2015, Millennial Media informed Parent of Millennial Media’s receipt of a letter from the SEC confirming the closing
of the informal investigation of the Goodwill Accounting Treatment.
Later on September 2, 2015, following a meeting of the board of
directors of Millennial Media, Goodwin Procter communicated to Wachtell Lipton that the board of directors of Millennial Media had approved the transaction and would recommend that Millennial Media’s stockholders accept the Offer and tender
their Shares in the Offer.
Also on September 2, 2015, Parent’s board of directors approved the Merger Agreement, the
consummation of the Offer and the Merger and authorized the execution of the Merger Agreement.
Before the opening of trading on U.S.
stock markets on September 3, 2015, the Merger Agreement was finalized and executed by Parent, Purchaser and Millennial Media, and Parent issued a press release announcing the execution by the parties of the Merger Agreement.
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Past Contacts, Transactions, Negotiations and Agreements.
In connection with advertising agreements entered into in the ordinary course of business, Millennial Media received aggregate revenues
(measured in accordance with United States generally accepted accounting principles (“GAAP”)) of approximately $6.0 million from Verizon and Parent and their respective subsidiaries over the past 24 months, representing approximately 1% of
Millennial Media’s total GAAP revenues during that same time frame.
For more information on the Merger Agreement and the other
agreements between Millennial Media and Purchaser and their respective related parties, see Section 8 — “Certain Information Concerning Parent and Purchaser,” Section 11 — “The Merger Agreement” and
Section 12 — “Purpose of the Offer; Plans for Millennial Media.”
Merger Agreement
The following summary of certain provisions of the Merger Agreement and all other provisions of the Merger Agreement discussed herein are
qualified by reference to the Merger Agreement itself, which is incorporated herein by reference. We have filed a copy of the Merger Agreement as Exhibit (d)(1) to the Schedule TO. The Merger Agreement may be examined and copies may be obtained at
the places and in the manner set forth in Section 8 — “Certain Information Concerning Parent and Purchaser.” Stockholders and other interested parties should read the Merger Agreement for a more complete description of the
provisions summarized below. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Merger Agreement.
The Offer. The Merger Agreement provides that Purchaser will commence the Offer as promptly as practicable, and in any event on or
before September 18, 2015. Purchaser’s obligation to accept for payment and pay for Shares validly tendered in the Offer is subject to the satisfaction of the Minimum Condition and the other conditions that are described in Section 15
— “Conditions to the Offer.” Subject to the satisfaction of the Minimum Condition and the other conditions that are described in Section 15 — “Conditions to the Offer,” the Merger Agreement provides that Purchaser
will, and Parent will cause Purchaser to, accept for payment and pay for all Shares validly tendered and not properly withdrawn in the Offer as promptly as possible on or after the Expiration Date, as may be extended pursuant to the terms of the
Merger Agreement. Acceptance of payment for Shares pursuant to and subject to the conditions of the Offer, which shall occur on October 19, 2015 unless we extend the Offer pursuant to the terms of the Merger Agreement, is referred to herein as
the “Offer Closing,” and the date on which the Offer Closing occurs is referred to herein as the “Offer Closing Date.”
Parent and Purchaser expressly reserve the right to increase the Offer Price, to make other changes in the terms and conditions of the Offer
and to waive conditions to the Offer, except that Millennial Media’s prior written approval is required for Parent and Purchaser to:
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decrease the Offer Price; |
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change the form of consideration payable in the Offer; |
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change the number of Shares to be purchased in the Offer; |
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amend or waive the Minimum Condition, the Termination Condition, the Antitrust Law Condition or the Governmental Authority Condition; |
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add any condition to the Offer or any term that is adverse to the holders of Shares; |
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extend the Expiration Date except as required or permitted by the Merger Agreement; |
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provide for a “subsequent offering period” in accordance with Rule 14d-11 promulgated under the Exchange Act; or |
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modify, supplement or amend any other term or condition of the Offer in a manner adverse to the holders of Shares. |
The Merger Agreement contains provisions to govern the circumstances in which Purchaser is required or permitted to extend the Offer and
Parent is required to cause Purchaser to extend the Offer. Specifically, the Merger Agreement provides that:
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If any Offer Condition has not been satisfied or, to the extent waivable by Parent or Purchaser pursuant to the Merger Agreement, waived by Parent or Purchaser, Purchaser shall (and Parent shall cause Purchaser to)
extend the Offer for successive periods of up to 5 business days each (or up to 20 business days if Parent so desires and Millennial Media consents in writing prior to such extension), the length of each such period to be determined by Parent in its
sole discretion in order to permit the satisfaction of the Offer Conditions. |
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Purchaser shall extend the Offer for any period or periods required by applicable law or applicable rules, regulations, interpretations or positions of the SEC or its staff or the NYSE. |
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However, in no event will Purchaser be required, or permitted without the Company’s consent, to extend the Offer beyond the Outside Date, unless at such time Parent is in material breach of the Merger Agreement and
such material breach has caused or resulted in the Offer not being consummated by such date. |
Purchaser has agreed that it
will terminate the Offer promptly upon any termination of the Merger Agreement.
Board of Directors and Officers. Under the Merger
Agreement, subject to applicable law, Parent, Purchaser and Millennial Media have agreed to take all necessary action to ensure that the board of directors of Millennial Media immediately prior to the Acceptance Time remains in place until the
Effective Time, and that the board of directors of the Surviving Corporation immediately following the Effective Time shall consist of the members of the board of directors of Purchaser immediately prior to the Effective Time, each to hold office in
accordance with the certificate of incorporation and by-laws of the Surviving Corporation until their respective successors shall have been duly elected, designated or qualified, or until their earlier death, resignation or removal in accordance
with the certificate of incorporation and by-laws of the Surviving Corporation.
From and after the Effective Time, the officers of
Millennial Media at the Effective Time, or such other persons as Parent shall select prior to the Effective Time in its sole discretion, shall be the officers of the Surviving Corporation, until their respective successors are duly elected or
appointed and qualified in accordance with applicable law.
The Merger. The Merger Agreement provides that, as soon as practicable
following consummation of the Offer and subject to the terms and conditions of the Merger Agreement, and in accordance with the DGCL, at the Effective Time, Purchaser will be merged with and into Millennial Media, the separate existence of Purchaser
will cease, and Millennial Media will continue as the Surviving Corporation and shall continue to be governed by the laws of the State of Delaware.
From and after the Effective Time, the Surviving Corporation shall possess all properties, rights, privileges, powers and franchises of
Millennial Media and Purchaser, and all of the claims, obligations, liabilities, debts and duties of Millennial Media and Purchaser shall become the claims, obligations, liabilities, debts and duties of the Surviving Corporation.
At the Effective Time, the certificate of incorporation and by-laws of the Surviving Corporation will be amended to be identical to the
certificate of incorporation and by-laws of Purchaser, except that the name of the Surviving Corporation shall be Millennial Media, Inc. until amended in accordance with applicable law and the applicable provisions of the certificate of
incorporation and by-laws.
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The obligations of Millennial Media and Parent to complete the Merger are subject to the
satisfaction or waiver by Millennial Media and Parent of the following conditions:
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Purchaser shall have accepted for payment, or caused to be accepted for payment, all the Shares validly tendered and not withdrawn in the Offer; and |
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no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or order which is then in effect and has the effect of making the Merger illegal or otherwise
prohibiting the consummation of the Merger, provided that each party shall have used its reasonable best efforts to oppose any such action by such governmental authority. |
Conversion of Capital Stock at the Effective Time. Shares issued and outstanding immediately prior to the Effective Time (other than
Shares held (i) in the treasury of Millennial Media or by Parent or Purchaser, which Shares shall be canceled and shall cease to exist, (ii) by a wholly owned subsidiary of Millennial Media or Parent (other than Purchaser) or a wholly
owned subsidiary of Purchaser, which Shares will be converted into shares of the Surviving Corporation as described below or (iii) by stockholders who validly exercise appraisal rights under Delaware law with respect to such Shares) will be
converted into the right to receive the Offer Price, without interest (the “Merger Consideration”) and subject to any withholding of taxes as required by applicable law.
Each Share that is owned by any direct or indirect wholly owned subsidiary of Millennial Media or any direct or indirect wholly owned
subsidiary of Parent (other than Purchaser) or a wholly owned subsidiary of Purchaser shall be converted into such number of shares of common stock of the Surviving Corporation such that the ownership percentage of any such subsidiary in the
Surviving Corporation immediately following the Effective Time shall equal the ownership percentage of such subsidiary in Millennial Media immediately prior to the Effective Time.
Each share of Purchaser’s common stock issued and outstanding prior to the Effective Time will be converted into one fully paid share of
common stock of the Surviving Corporation and, except for the Shares in the preceding paragraph, will constitute the only outstanding shares of capital stock of the Surviving Corporation.
The holders of certificates or book-entry shares which immediately prior to the Effective Time represented Shares (other than Shares (i) held
in the treasury of Millennial Media or by Parent or Purchaser, which Shares shall be canceled and shall cease to exist and (ii) Shares held by a wholly owned subsidiary of Millennial Media or Parent (other than Purchaser) or a wholly owned
subsidiary of Purchaser, which Shares will be converted into shares of the Surviving Corporation as described above) shall cease to have any rights with respect to such Shares other than the right to receive, upon surrender of such certificates or
book-entry shares in accordance with the procedures set forth in the Merger Agreement, the Merger Consideration, or, with respect to Shares of a holder who exercises appraisal rights in accordance with Delaware law, the rights set forth in
Section 262 of the DGCL.
Treatment of Company Options. As of the Effective Time, each Company Option (or portion thereof)
that is outstanding and unexercised as of the Effective Time, will be canceled by virtue of the Merger and without any action on the part of any holder of any Company Option in consideration for the right to receive a cash payment with respect
thereto equal to the product of (i) the number of Shares subject to such Company Option as of the Effective Time and (ii) the excess, if any, of the Merger Consideration over the exercise price per Share subject to such Company Option as
of the Effective Time (the “Option Cash Payment”). The Option Cash Payment will be paid, less any required withholding Taxes, as promptly as practicable following the Effective Time. Company Options with an exercise price per Share subject
to such Company Option that is equal to or greater than the Merger Consideration will be cancelled for no consideration as of the Effective Time, and the holder thereof will have no further rights with respect thereto.
Treatment of Company RSUs. As of the Effective Time, each Company RSU Award (or portion thereof) that is outstanding and unvested as of
the Effective Time, will, unless otherwise agreed to by Parent and the applicable award holders, be canceled by virtue of the Merger and without any action on the part of the holder of
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the applicable Company RSU Award in consideration for the right to receive, following the Effective Time and subject to the conditions below, a cash payment with respect thereto equal to
(x) the product of (1) the number of Shares subject to such Company RSU Award as of the Effective Time and (2) the Merger Consideration (the “Company RSU Award Cash Payment”). The Company RSU Award Cash Payment which
a former holder of a Company RSU Award may be eligible to receive will (A) be earned subject to the same vesting schedule and other vesting terms and conditions (including any applicable acceleration provisions, except as otherwise agreed to by
Parent and selected holders thereof in writing with respect to acceleration provisions relating to certain specified employment or other service termination rights) which applied to such holder’s Company RSU Award as of the Effective Time and
(B) become payable, less any required withholding Taxes, on the applicable settlement date (or an alternative date during the month in which such settlement date occurs) or within the applicable settlement period following vesting that applied
to such Company RSU Award as of the Effective Time.
Representations and Warranties. The Merger Agreement contains various
representations and warranties made by Millennial Media to Parent and Purchaser and representations and warranties made by Parent and Purchaser to Millennial Media. The representations and warranties contained in the Merger Agreement were made
solely for purposes of the Merger Agreement and as of specific dates, were the product of negotiations among Millennial Media, Parent and Purchaser, and may be subject to important qualifications and limitations agreed to by the parties in
connection with negotiating the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully
reflected in Millennial Media’s, Parent’s or Purchaser’s public disclosures. Some of those representations and warranties may not be accurate or complete as of any particular date because they are subject to a contractual standard of
materiality or material adverse effect different from that generally applicable to public disclosures to stockholders or used for the purpose of allocating risk between the parties to the Merger Agreement rather than establishing matters of fact.
In the Merger Agreement, Millennial Media has made customary representations and warranties to Parent and Purchaser with respect to,
among other things:
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corporate matters related to Millennial Media and its subsidiaries, such as organization, governing documents, standing, qualification, power and authority; |
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• |
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authority relative to the Merger Agreement; |
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required consents and approvals, and no violations of organizational or governance documents; |
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permits and licenses and compliance with laws; |
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its financial statements and SEC filings; |
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its disclosure controls and internal controls over financial reporting; |
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the conduct of its business and the absence of certain changes; |
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the absence of undisclosed liabilities; |
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the absence of litigation; |
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employee benefit plans, ERISA matters and certain related matters; |
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intellectual property, technology and privacy matters; |
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• |
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the opinion of its financial advisor; |
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brokers’ fees and expenses; |
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environmental health and safety matters; |
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customers and suppliers; |
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compliance with anti-corruption and anti-bribery laws; |
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compliance with applicable takeover statutes; and |
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the accuracy of information supplied for purposes of the offer documents and the Schedule 14D-9. |
Some of the representations and warranties in the Merger Agreement made by Millennial Media are qualified as to “materiality”,
“knowledge” or “Company Material Adverse Effect.” For purposes of the Merger Agreement, a “Company Material Adverse Effect” means any change, effect, fact, development or circumstance that, individually or in the
aggregate, (a) has a material adverse effect on the business, results of operations or financial condition of Millennial Media and its subsidiaries taken as a whole or (b) would reasonably be expected to prevent, materially impair or
materially delay Millennial Media’s ability to consummate the Merger and the other transactions contemplated by the Merger Agreement. With respect to clause (a), the definition of “Company Material Adverse Effect” excludes the
following and any effect attributable to the following:
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(i) |
changes after the date of the Merger Agreement in general economic or political conditions or financial, credit or securities markets in general (including changes in interest or exchange rates) in any country or region
in which Millennial Media or any of its subsidiaries conducts business; |
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(ii) |
any events, circumstances, changes or effects after the date of the Merger Agreement that affect the industries in which Millennial Media or any of Millennial Media’s subsidiaries operate; |
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(iii) |
any changes after the date of the Merger Agreement in laws applicable to Millennial Media or any of Millennial Media’s subsidiaries or any of their respective properties or assets or changes after the date of the
Merger Agreement in GAAP; |
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(iv) |
acts of war, armed hostilities, sabotage or terrorism, or any escalation or worsening of any acts of war, armed hostilities, sabotage or terrorism; |
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(v) |
the negotiation or announcement of, or any action taken that is required or expressly contemplated by the Merger Agreement (including the impact thereon on relationships (contractual or otherwise) with customers,
vendors, lenders, employees or other business partners), or any action taken at the request of or with the written consent of Parent; |
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(vi) |
any changes in the credit rating of Millennial Media or any of its subsidiaries, the market price or trading volume of Shares or any failure by the Company to meet internal or published projections, forecasts or revenue
or earnings predictions for any period, it being understood that any underlying event causing such changes or failures in whole or in part may be taken into account in determining whether a Company Material Adverse Effect has occurred; or
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(vii) |
any litigation arising from allegations of a breach of fiduciary duty relating to the Merger Agreement or the transactions contemplated by the Merger Agreement; |
except, in the cases of the foregoing clauses (i), (ii), (iii), and (iv), to the extent that such change, event, fact, development, circumstance, act,
escalation or worsening has a disproportionate impact on Millennial Media and its subsidiaries relative to other companies in similar industries to those in which Millennial Media and its subsidiaries operate.
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In the Merger Agreement, Parent and Purchaser have made customary representations and warranties
to Millennial Media with respect to:
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corporate matters, such as organization, organizational documents, standing, qualification, power and authority; |
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• |
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required consents and approvals, and no violations of laws, governance documents or agreements; |
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authority relative to the Merger Agreement; |
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capitalization of Purchaser; |
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broker’s fees and expenses; |
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available funds to consummate the transactions contemplated by the Merger Agreement; |
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ownership of securities of Millennial Media; and |
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the accuracy of information supplied for purposes of the offer documents and the Schedule 14D-9. |
Some of the representations and warranties in the Merger Agreement made by Parent and Purchaser are qualified as to “materiality” or
“Parent Material Adverse Effect.” For purposes of the Merger Agreement, a “Parent Material Adverse Effect” means any change, effect or circumstance that, individually or in the aggregate, would reasonably be expected to prevent,
materially impair or materially delay the ability of Parent to consummate the Merger and the other transactions contemplated by the Merger Agreement.
None of the representations and warranties of the parties to the Merger Agreement contained in the Merger Agreement or in any certificate
delivered pursuant to the Merger Agreement survive the Effective Time.
Conduct of Business Pending the Merger. Millennial Media
has agreed that, from the date of the Merger Agreement until the Effective Time or until the termination of the Merger Agreement, except as required by law, as agreed in writing by Parent (which consent may not be unreasonably withheld, conditioned
or delayed), as expressly required or contemplated by the Merger Agreement or as disclosed prior to execution of the Merger Agreement in Millennial Media’s confidential disclosure letter, the business of Millennial Media and its subsidiaries
will be conducted only in the ordinary course of business and in a manner consistent with past practice, and Millennial Media and its subsidiaries shall use their reasonable best efforts to preserve intact Millennial Media’s business
organization and the assets of Millennial Media and its subsidiaries, to keep available the services of their current officers, key employees and key consultants, and to maintain existing relations and goodwill with governmental authorities,
material customers, material suppliers, material creditors, material lessors and other persons with which Millennial Media or any of its subsidiaries has significant business relations.
Millennial Media has further agreed that, from the date of the Merger Agreement until the Effective Time or until the termination of the
Merger Agreement, except as required by law, as agreed in writing by Parent (which consent may not be unreasonably withheld, conditioned or delayed), as expressly required or contemplated by the Merger Agreement or as disclosed prior to execution of
the Merger Agreement in Millennial Media’s confidential disclosure letter, Millennial Media will not, among other things and subject to certain exceptions:
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amend or otherwise change, or permit any of its subsidiaries to amend of otherwise change, the certificate of incorporation or bylaws of Millennial Media or such similar applicable organizational documents of any of its
subsidiaries; |
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split, combine, subdivide, reclassify, purchase, redeem, repurchase or otherwise acquire, issue, sell, pledge, dispose, encumber or grant any shares
of its or its subsidiaries’ capital stock, any right to receive cash based on the value of its or its subsidiaries’ capital stock, or any options, warrants, convertible or exchangeable securities, stock-based performance units, equity
awards denominated in shares of Millennial Media’s capital stock or other rights of any kind to acquire any shares of its or its |
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subsidiaries’ capital stock or other rights to receive any economic interest of a nature accruing to the holders of Shares; provided, however, that (i) Millennial Media may issue shares
upon exercise or settlement of any equity award outstanding as of the date hereof, and (ii) Millennial Media may acquire shares of capital stock in connection with tax withholdings and exercise price settlements upon the exercise of Company
Options and vesting of Millennial Media restricted stock unit awards, in each case, existing on the date of the Merger Agreement; |
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declare, set aside, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise with respect to Millennial Media’s or any of its subsidiaries’ capital stock, other
than dividends or other distributions paid by any direct or indirect wholly owned subsidiary of Millennial Media to Millennial Media or any wholly owned subsidiary of Millennial Media; |
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except as required pursuant to any Company Benefit Plan in existence on the date of the Merger Agreement or as required by applicable law: |
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increase the compensation or other benefits payable or to become payable to directors, executive officers, employees or independent contractors of Millennial Media or any of its subsidiaries; |
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grant any severance or termination pay to, or enter into any severance agreement with any director, executive officer, employee or independent contractor of Millennial Media or any of its subsidiaries, other than
payments of severance benefits in accordance with the Company Benefit Plans, as in effect as of the date of the Merger Agreement and set forth in Millennial Media’s confidential disclosure letter; |
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enter into any employment, severance, retention or change of control agreement with any employee or new hire of Millennial Media or any of its subsidiaries (except for employment agreements on customary terms that are
terminable on less than thirty (30) days’ notice without payment of severance benefits or penalty or similar payments); |
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establish, adopt, enter into, amend or terminate any Company Benefit Plan or other plan, trust, fund, policy, agreement or arrangement for the benefit of any current or former directors, officers, employees or
independent contractors or any of their beneficiaries, except for amendments in the ordinary course of business consistent with past practice that do not in any manner materially increase the cost to Millennial Media or its subsidiaries;
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take any action to fund in a nonqualified trust the payment of compensation or benefits under any Company Benefit Plan; |
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adopt, enter into, establish, amend or terminate any collective bargaining, works council or similar agreement or other arrangement relating to a union, works council, employee representative group or organized
employees of Millennial Media or any of its subsidiaries; |
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terminate the employment of any executive officer of Millennial Media, other than for cause; or |
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hire or promote any employee other than hires or promotions in the ordinary course of business consistent with past practice below the level of vice president with a total annual cash compensation (base salary plus
annual target bonus opportunity) below $250,000; or |
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grant, confer or award options, convertible securities, restricted stock, restricted stock units or other rights to acquire any of Millennial Media’s or its subsidiaries’ capital stock or any right to receive
cash based on the value of its subsidiaries’ capital stock, or take any action not otherwise expressly contemplated by the Merger Agreement to accelerate the vesting of or cause to be exercisable any otherwise unvested or unexercisable option
or other equity or equity-based award; |
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acquire or permit its subsidiaries to acquire any entity, business or material portion of the assets of any person; |
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incur any indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt securities of the
Company, except for (A) debt incurred pursuant to the |
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Credit Agreement (as defined below) in the ordinary course of business consistent with past practice, and in no event in excess of $1,000,000 in the aggregate, and (B) any indebtedness among
the Company and its wholly owned subsidiaries, or redeem, repurchase, prepay, defease, guarantee, cancel or otherwise acquire for value any such indebtedness, debt securities or warrants or other rights; |
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(i) terminate, modify or amend any material contract or material lease or enter into any contract, agreement or arrangement that would have been a material contract or material lease if entered into prior to the date of
the Merger Agreement, (ii) waive in any material respect any term of, or waive any material default under any material contract, or (iii) enter into any contract which contains a change of control or similar provision that would require a
payment to the other party or parties thereto in connection with the Offer Closing, the Merger, or the other transactions contemplated in the Merger Agreement; |
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make any material change to its methods of accounting for financial accounting purposes in effect at December 31, 2014 other than those changes required by GAAP or applicable law; |
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sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber or subject to any lien (other than liens permitted pursuant to the Merger Agreement) or otherwise dispose of any material portion of its
properties or assets, other than advertising inventory in the ordinary course of business consistent with past practice; |
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make any loans, advances or capital contributions to or investments in any other person (other than its wholly owned subsidiaries) in excess of $500,000 in the aggregate, or form any subsidiary; |
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make or change any material Tax election, change any method of Tax accounting, file any material amended Tax Return, or settle or compromise any audit or proceeding relating to a material amount of Taxes;
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make or permit any of its subsidiaries to make capital expenditures totaling in the aggregate more than $500,000; |
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adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Millennial Media or any of its subsidiaries;
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settle, pay, discharge or satisfy any claim, action, suit, proceeding or investigation against or regarding Millennial Media or any of its subsidiaries, other than routine immaterial matters in the ordinary course of
business or settlements that involve only the payment of monetary damages not in excess of $100,000 individually or $500,000 in the aggregate, excluding amounts covered by insurance or certain third-party indemnification obligations;
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permit to lapse or intentionally cancel any material intellectual property rights of Millennial Media and any of its subsidiaries; |
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amend in a manner that adversely impacts in any material respect the ability to conduct its business, or allow to lapse, any material permits; |
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fail to maintain insurance policies in a form and amount consistent with past practice in all material respects; |
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take or omit to take any action which would reasonably be expected to cause a default under the Amended and Restated Loan and Security Agreement, dated as of November 21, 2014, between Silicon Valley Bank and
Millennial Media (the “Credit Agreement”); |
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make any change to its privacy or data security policies or practices other than changes in the ordinary course of business that are immaterial to Millennial Media or any of its subsidiaries; or |
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agree to do any of the things described in the preceding bullet points. |
Access to
Information. Until the Effective Time or until the termination of the Merger Agreement, Millennial Media has agreed to provide Parent and its representative with reasonable access during normal business hours to Millennial Media’s
employees, properties, books, commitments, contracts and records and
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other information (including tax returns) as Parent may reasonably request regarding Millennial Media and its subsidiaries, subject to certain exceptions and limitations. The information
provided to Parent shall be used solely for the purpose of the Merger and the transactions contemplated thereby and will be subject to the Confidentiality Agreement (as described below).
Directors’ and Officers’ Indemnification and Insurance. The Merger Agreement provides for certain indemnification and
insurance rights in favor of any individual who, on or prior to the Effective Time, was an officer or director of Millennial Media or served on behalf of Millennial Media as an officer or director of any of Millennial Media’s subsidiaries or
affiliates or any of their predecessors in all of their capacities (including as stockholder, controlling or otherwise) and the heirs, executors, trustees, fiduciaries and administrators of such officer or director, who we refer to as
“indemnitees.” Specifically, Parent and Purchaser have agreed that all rights to exculpation, indemnification and advancement for acts or omissions occurring at or prior to the Effective Time existing in favor of the indemnitees as
provided in Millennial Media’s or its subsidiaries’ certificate of incorporation or bylaws (or comparable organization documents) or in any agreement of Millennial Media or any of its subsidiaries shall survive the Merger. Parent and
Purchaser have agreed to indemnify, defend and hold harmless, and advance expenses to, indemnitees with respect to all acts or omissions by such persons in their capacities as such at any time prior to the Effective Time, to the fullest extent
permitted by applicable law, and to not amend, repeal or otherwise modify the provisions of the certificate of incorporation, bylaws or other comparable organizational documents of Millennial Media and its subsidiaries as in effect on the date of
the Merger Agreement or of indemnification agreements in effect on the date of the Merger Agreement and provided to Parent, in any manner that would adversely affect the rights thereunder of an indemnitee.
In addition, for six years following the Effective Time, Parent, the Surviving Corporation and its subsidiaries will, to the fullest extent
permitted by applicable law: (1) indemnify, defend and hold harmless each indemnitee against and from any claims, judgments, fines, damages, liabilities, costs or expenses (including attorneys’ fees) and amounts paid in settlement arising
out of or pertaining to any action or omission by such indemnitee in its capacity as a director or officer of Millennial Media, its subsidiaries or affiliates occurring at or prior to the Effective Time, or the Offer, the Merger, the Merger
Agreement and any transactions contemplated thereby; and (2) advance expenses of any indemnitee, subject to repayment if it is ultimately determined that such indemnitee is not entitled to be indemnified.
Prior to the Effective Time, Millennial Media will, and, if Millennial Media is unable to, Parent will cause the Surviving Corporation as of
the Effective Time to, purchase a non-cancellable extension of the directors’ and officers’ liability coverage of Millennial Media’s existing directors’ and officers’ insurance policies and its existing fiduciary liability
insurance policies, which are commonly referred to as “tail” policies, covering a claims reporting or discovery period of at least six years from the Effective Time with respect to any claim related to any period at or prior to the
Effective Time from an insurance carrier with the same or better credit rating as Millennial Media’s current insurance carrier with terms, conditions, retentions and limits of liability that are not less favorable than the coverage provided
under Millennial Media’s existing policies as of the date of the Merger Agreement, subject to a limit on the premium for such “tail” policy of 275% of the annual premium currently paid by Millennial Media. If “tail” policies
have not been obtained as of the Effective Time, the Surviving Corporation shall continue to maintain in effect, for a period of at least six years after the Effective Time, the director and officer insurance in place as of the date of the Merger
Agreement with Millennial Media’s current insurance carrier or with an insurance carrier with the same or better credit rating as Millennial Media’s current insurance carrier with terms, conditions, retentions and limits of liability that
are no less favorable than the coverage provided under Millennial Media’s existing policies as of the date of the Merger Agreement, or Parent will provide, or cause the Surviving Corporation to provide, for a period of at least six years after
the Effective Time, comparable director and officer insurance that provides coverage of the indemnitees for events occurring at or prior to the Effective Time from an insurance carrier with the same or better credit rating as Millennial Media’s
current insurance carrier with terms, conditions, retentions and limits of liability that are no less favorable than Millennial Media’s existing policy, subject to a limit on annual premiums of 275% of the annual premium currently paid by
Millennial Media for such insurance. In the event that the annual premiums of
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such insurance coverage exceed this amount, Parent or the Surviving Corporation shall be obligated to obtain a policy with the greatest coverage available for a cost not exceeding such amount.
The indemnitees are third party beneficiaries of these provisions of the Merger Agreement.
Appropriate Action; Consents; Filings. Each of Millennial Media, Parent and Purchaser has agreed to cooperate with each other and use
their respective reasonable best efforts to consummate and make effective the transactions contemplated by the Merger Agreement and to satisfy the conditions to the Offer and the Merger, including (i) obtaining all actions, nonactions,
consents, clearances, waivers and approvals from governmental authorities or other third persons necessary or advisable in connection with the consummation of the transactions contemplated by the Merger Agreement, and making all registrations and
filings and taking of all reasonable or customary steps in each case as may be necessary or advisable to obtain an approval from, or to avoid an action or proceeding by, any governmental authority or other third person in connection with the
consummation of the transactions contemplated by the Merger Agreement, (ii) defending or contesting of any claims, actions, investigations, lawsuits or other legal proceedings challenging the Merger Agreement or the consummation of the
transactions contemplated by the Merger Agreement, including seeking to have any stay or temporary restraining order entered by any court or other governmental authority vacated or reversed and (iii) the execution and delivery of any additional
instruments necessary to consummate the Offer and the Merger and any other transactions to be performed or consummated by such party in accordance with the terms of the Merger Agreement and to carry out fully the purposes of the Merger Agreement.
Each of the parties is required to promptly (and in no event later than September 18, 2015 (10 business days following the date that the Merger Agreement was executed)) make its respective filings under the HSR Act with respect to the
transactions contemplated by the Merger Agreement. Under the HSR Act, each of Parent and Millennial Media is required to file a Premerger Notification and Report Form with the FTC and the Antitrust Division in connection with the purchase of Shares
in the Offer and the Merger, which filings were made prior to the date hereof. In addition, Millennial Media, Parent and Purchaser have agreed to make any and all other filings required pursuant to other antitrust laws as promptly as reasonably
practicable following the execution of the Merger Agreement.
Each of Parent, Purchaser and Millennial Media agree use reasonable
best efforts to take, and to cause their subsidiaries to take, promptly any and all steps necessary to avoid or eliminate each and every impediment and obtain all consents under any antitrust laws so as to enable the parties to close the
transactions contemplated by the Merger Agreement as promptly as practicable. In no event, however, shall Parent, Purchaser or any of their respective affiliates be obligated to divest or hold separate any business or assets in connection with the
consummation of the transactions contemplated by the Merger Agreement, agree to any condition, restriction or limitation with respect to Parent, Purchaser or any of their respective affiliates or any of their respective assets or operations, or, pay
any money to any person or to offer or grant other financial or other accommodations to any person in connection with their obligations under the Merger Agreement. Each of Parent, Acquisition Sub and the Company shall, if advisable, respond as
promptly as practicable under the circumstances to any inquiries received from any governmental authority under any antitrust laws for additional information or documentation and to all inquiries and requests received from a governmental authority.
Millennial Media has agreed not to offer or agree to divest, license, hold separate or otherwise commit Millennial Media, Parent, Purchaser, or any of their respective subsidiaries to take any action that limits any freedom of action with respect to
their ability to retain or operate any of their businesses, services or assets without the prior written approval of Parent. The Company has agreed to give notice to third parties and the Company and Parent have agreed to cooperate in obtaining any
other third party consents necessary, proper or advisable to consummate the Offer or the Merger, except that none of Millennial Media, Parent or any of their respective subsidiaries shall be required to make any payments to a third party to obtain
any consent or approval of such third party prior to the Acceptance Time.
Public Announcements. Parent and Millennial Media have
agreed not to issue any press release or make any other public statement regarding the Merger Agreement, the Offer and the Merger without the prior consent of the other (which shall not be unreasonably withheld, conditioned or delayed), subject to
certain exceptions.
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Employee Matters. The Surviving Corporation shall provide or cause to be provided to each
employee of Millennial Media and its subsidiaries who continues as an employee of the Surviving Corporation or Parent or any of their respective subsidiaries following the Closing Date (a “Continuing Employee”), for a period extending
until the earlier of the termination of such Continuing Employee’s employment with such entities or the first anniversary of the Closing Date, (x) a base wage or salary that is no less than that provided to such Continuing Employee
immediately prior to the Effective Time, and (y) incentive compensation and employee benefits that are substantially comparable to those provided to similarly situated employees of Parent or its subsidiaries.
Parent shall, and shall cause the Surviving Corporation to: (i) waive any applicable pre-existing condition exclusions and waiting
periods with respect to participation and coverage requirements in any replacement or successor welfare benefit plan of Parent or the Surviving Corporation that an employee of Millennial Media or any of its subsidiaries is eligible to participate in
immediately following the Effective Time to the extent such exclusions or waiting periods were inapplicable to, or had been satisfied by, such employee immediately prior to the Effective Time under the relevant Company Benefit Plan in which such
employee participated; (ii) provide each such employee with credit for any co-payments and deductible paid prior to the Effective Time (to the same extent such credit was given under the analogous Millennial Media compensation or benefit plan
prior to the Effective Time) in satisfying any applicable deductible requirements; and (iii) to the extent that any Continuing Employee is eligible to participate in any employee benefit plan of Parent, the Surviving Corporation or any of their
subsidiaries following the Effective Time, cause such plan to recognize the service of such Continuing Employee with the Company and its subsidiaries prior to the Effective Time for purposes of eligibility to participate, vesting, vacation
entitlement and severance benefits (but not for benefit accrual under any defined benefit or, retiree welfare plan) to the same extent such service was recognized by Millennial Media and its subsidiaries under any similar Company Benefit Plan in
which such Continuing Employee participated immediately prior to the Effective Time; provided, that the foregoing shall not apply to the extent it would result in any duplication of benefits for the same period of service.
With respect to any Continuing Employee whose employment is terminated by Parent, the Surviving Corporation or any of their respective
subsidiaries on or prior to June 23, 2016 without cause, Parent or the Surviving Corporation shall provide or cause to be provided to each such Continuing Employee severance payments and benefits no less than the severance payments and benefits
that such Continuing Employee would have received under Parent’s applicable severance guidelines (with the base salary component of such severance payments or benefits not to exceed 12 months of base salary for Continuing Employees who,
immediately prior to the Effective Time, were at or below the vice president level or 18 months of base salary for Continuing Employees who, immediately prior to the Effective Time, were at the senior vice president or executive vice president
level); provided, however, that if any such Continuing Employee is entitled to severance benefits under an individual severance, employment or similar agreement, the terms of such agreement will govern.
With respect to any Company Benefit Plan intended to be qualified under Section 401(a) of the Code, the Company shall cause each
participant in such Qualified Plan to be fully vested in such participant’s Qualified Plan account effective as of immediately prior to the Closing Date. The Company will terminate each Qualified Plan in accordance with its terms and applicable
Law effective immediately prior to the Closing Date.
Millennial Media will consult with Parent (and consider in good faith the advice of
Parent) prior to Millennial Media sending any mass written notices or other mass communication materials (including any postings to any website) with respect to the foregoing items described in this section (and, for the avoidance of doubt, not
including any compensation or benefits matters not related to the Merger) to its employees or former employees of Millennial Media or any of its subsidiaries, but excluding any mass written notices or other mass communication materials with respect
to administrative matters. Prior to the Effective Time, Millennial Media will provide Parent with reasonable access following advance notice to such employees or former employees for purposes of Parent’s providing notices or other communication
materials regarding Parent compensation and benefit plans and the matters described in this section; provided, that such access shall not unduly interfere with the operation of the business of Millennial Media prior to the Closing.
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Millennial Media and each of its subsidiaries will, after the date of the Merger Agreement and
prior to the Effective Time, (i) provide any and all notices to; (ii) make any and all filings or registrations with; and (iii) obtain any and all consents or approvals of, any labor organization, works council or any similar entity,
council or organization, required to be made or obtained in connection with the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement, except, in the case of each of clauses (i), (ii) and (iii), as would
not, individually or the aggregate, result in material fines or penalties or could not be corrected following the Effective Time.
Stockholder Litigation. Prior to the Effective Time or the termination of the Merger Agreement, Millennial Media will control the
defense of any stockholder litigation against Millennial Media and/or its directors relating to the transactions contemplated by the Merger Agreement, but will (i) promptly provide Parent with copies of all proceedings and correspondence
relating to such litigation, (ii) give Parent the opportunity to participate in the defense or settlement of any such litigation, (iii) give due consideration to Parent’s advice with respect to such litigation and (iv) not
compromise, settle, come to an arrangement regarding or agree to compromise, settle or come to an arrangement regarding any litigation arising or resulting from the transactions contemplated by the Merger Agreement, subject to certain exceptions, or
consent to the same without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed.
No Solicitation. Millennial Media has agreed that, except as described below, it and its subsidiaries shall immediately cease any
discussions or negotiations with any persons that may be ongoing with respect to a Competing Proposal (as defined below) and, until the earlier of the Effective Time or the termination of the Merger Agreement, it and its subsidiaries shall not, and
Millennial Media shall use its reasonable best efforts to cause their representatives to not, directly or indirectly:
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(i) |
solicit, initiate or knowingly facilitate or encourage any Competing Proposal; |
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(ii) |
participate in any negotiations regarding, or furnish to any person any nonpublic information with respect to, any Competing Proposal; |
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(iii) |
engage in discussions with any person with respect to any Competing Proposal; |
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(iv) |
approve or recommend any Competing Proposal; |
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(v) |
enter into any letter of intent or similar document or any agreement or commitment providing for any Competing Proposal; |
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(vi) |
take any action to make the provisions of any “fair price,” “moratorium,” “control share acquisition,” “business combination” or other similar anti-takeover statute or regulation
(including any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the DGCL), or any restrictive provision of any applicable anti-takeover provision in the Restated Certificate of
Incorporation or Bylaws of Millennial Media, inapplicable to any person other than Parent and its affiliates or to any transactions constituting or contemplated by a Competing Proposal; or |
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(vii) |
resolve or agree to do any of the foregoing. |
Millennial Media has agreed to promptly instruct
each person that had executed a confidentiality agreement prior to the date of the Merger Agreement (other than the existing confidentiality agreement between Millennial Media and Parent) relating to a Competing Proposal or potential Competing
Proposal with or for the benefit of Millennial Media promptly to return to Millennial Media or destroy all information, documents, and materials relating to the Competing Proposal or to Millennial Media or its businesses, operations or affairs
previously furnished by Millennial Media or any of its representatives to such person or any of its representatives. Millennial Media has further agreed to use reasonable best efforts to enforce, and not waive without Parent’s prior written
consent, any standstill or similar provision in any confidentiality or other agreement with such person, except that if the board of directors of Millennial Media determines in good faith, after consultation with its outside legal advisors, that it
would be inconsistent with the directors’ exercise of their fiduciary duties under
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applicable law not to do so, Millennial Media may waive any standstill or similar provision to permit a person to make, on a confidential basis to the board of directors of Millennial Media, a
Competing Proposal, conditioned upon such person agreeing to disclosure of such Competing Proposal to Parent and Acquisition Sub, in each case as contemplated by the Merger Agreement.
Notwithstanding the above limitations, if Millennial Media receives a bona fide Competing Proposal not solicited after the date of the Merger
Agreement that did not result from a breach of the non-solicitation provisions of the Merger Agreement at any time prior to the Acceptance Time which (i) constitutes a Superior Proposal (as defined below) or (ii) which the board of
directors of Millennial Media determines in good faith after consultation with Millennial Media’s outside legal and financial advisors could reasonably be expected to result, after the taking of any of the actions referred to in either of
clause (x) or (y) below, in a Superior Proposal, Millennial Media may take the following actions:
(x) furnish information to the
third party making such Competing Proposal (provided, that substantially concurrently Millennial Media makes available such nonpublic information to Parent to the extent such information was not previously made available to Parent) and
(y) engage in discussions or negotiations with the third party with respect to the Competing Proposal.
In the case of each of clauses (x) and (y) above, prior to so furnishing such information, Millennial Media must receive from the
third party an executed confidentiality agreement on terms no less favorable in the aggregate to Millennial Media than the Confidentiality Agreement between Millennial Media and Parent (an “Acceptable Confidentiality Agreement”). As
promptly as reasonably practicable following Millennial Media taking such actions as described in clauses (x) and (y) above, Millennial Media shall provide written notice to Parent of the determination of the board of directors of
Millennial Media as provided for in clauses (i) or (ii) above.
Millennial Media shall notify Parent promptly (but in any event
within 24 hours) of the receipt of any Competing Proposal, and (i) if it is in writing, deliver to Parent a copy of such Competing Proposal and any related draft agreements and other written material setting forth the terms and conditions of
such Competing Proposal or (ii) if oral, provide to Parent a detailed summary of the material terms and conditions thereof including the identity of the person making such Competing Proposal. Millennial Media shall keep Parent reasonably
informed on a prompt and timely basis of the status and material details of any such Competing Proposal and with respect to any material change to the terms of any such Competing Proposal within 24 hours of such material change.
For purposes of the Merger Agreement:
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• |
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“Competing Proposal” means any bona fide proposal (other than a proposal or offer by Parent or any of its subsidiaries) for: |
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any merger, consolidation, share exchange, business combination, issuance of securities, direct or indirect acquisition of securities, recapitalization, tender offer, exchange offer or other similar transaction in which
(i) a person or “group” (as defined in the Exchange Act and the rules promulgated thereunder) of persons directly or indirectly acquires, or if consummated in accordance with its terms would acquire, beneficial or record ownership of
securities representing more than 10% of the outstanding shares of any class of voting securities of Millennial Media or (ii) Millennial Media issues securities representing more than 10% of the outstanding shares of any class of voting
securities of Millennial Media; |
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• |
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any direct or indirect sale, lease, exchange, transfer, acquisition or disposition of any assets of Millennial Media and of the subsidiaries of
Millennial Media that constitute or account for more than 10% of the consolidated net revenues of Millennial Media, consolidated net income of |
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Millennial Media or consolidated book value of Millennial Media; or more than 10% of the fair market value of the assets of Millennial Media; or |
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• |
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any liquidation or dissolution of Millennial Media. |
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• |
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“Superior Proposal” means a Competing Proposal (with all percentages in the definition of Competing Proposal increased to 50%) on terms that the board of directors of Millennial Media determines in good faith,
after consultation with Millennial Media’s outside legal and financial advisors, would (i) offer a higher per share price to the stockholders of Millennial Media than the Offer Price and (ii) be more favorable to the stockholders of
Millennial Media than the transactions contemplated by the Merger Agreement, taking into account all factors the board of directors of Millennial Media acting in good faith considers to be appropriate, including any proposal by Parent in writing to
amend or modify the terms of the Merger Agreement, the identity of the person making such Competing Proposal, and the consideration, terms, conditions, timing, likelihood of consummation, financing terms and legal, financial, and regulatory aspects
of such Competing Proposal. |
Notwithstanding the foregoing, Millennial Media and its subsidiaries shall not be
prohibited from complying with Rule 14e-2, Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act (including making any “stop, look and listen” communication or similar communication of the type contemplated
by Rule 14d-9(f)) or prohibited from making any disclosure if the board of directors of Millennial Media determines in good faith, after consultation with its outside counsel, that failure to do so would be inconsistent with the directors’
exercise of their fiduciary duties under applicable law, nor shall any such action be deemed to constitute a breach of Millennial Media’s obligations under the Merger Agreement. However, Millennial Media shall not be permitted to effect a
Change of Recommendation (as described below), including in compliance with Rule 14e-2, Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act or any other applicable law) without complying with the procedures described
in “—Change of Recommendation” below.
Change of Recommendation. Subject to the provisions described
below, the board of directors of Millennial Media has recommended that the stockholders of Millennial Media accept the Offer and tender their Shares to Purchaser in the Offer. The foregoing recommendation is referred to herein as the
“Millennial Media board recommendation.” Millennial Media’s board of directors also agreed to include the Millennial Media board recommendation with respect to the Offer in the Schedule 14D-9 and has permitted Parent to refer to such
recommendation in this Offer to Purchase and documents related to the Offer.
Except as described below, neither the board of
directors of Millennial Media nor any committee thereof may (any action described in (i) through (v) below, a “Change of Recommendation”):
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(i) |
withdraw or withhold, amend, modify or qualify in any manner adverse to Parent or Purchaser the Millennial Media board recommendation or make any public announcement inconsistent with the Millennial Media board
recommendation, or publicly propose to do any of the foregoing; |
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(ii) |
approve, adopt, endorse, or recommend any Competing Proposal or any inquiry or proposal that would reasonably be expected to lead to a Competing Proposal; |
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(iii) |
following the date any Competing Proposal or any material modification thereto is first made public, sent or given to the stockholders of Millennial Media, fail to issue a press release that expressly reaffirms the
Millennial Media board recommendation within four business days following Parent’s written request to do so (which request may not be made more than twice with respect to any such Competing Proposal and each material modification thereto);
|
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(iv) |
fail to include the Millennial Media board recommendation in the Schedule 14D-9 or any amendment thereof; or |
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(v) |
cause or permit Millennial Media to enter into any contract, letter of intent, memorandum of understanding, or agreement in principle regarding or
providing for any Competing Proposal (other |
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than an Acceptable Confidentiality Agreement in accordance with the terms of the Merger Agreement) or requiring Millennial Media to abandon, terminate, delay or fail to consummate the
transactions contemplated by the Merger Agreement. |
Notwithstanding the foregoing, at any time prior to the Acceptance Time,
if (i) an event, fact, circumstance, development, change or occurrence that materially affects the business, assets or operations of Millennial Media that is unknown to the board of directors of Millennial Media as of the date of the Merger
Agreement and reasonably should not have been known as of such date becomes known to the board of directors of Millennial Media, or (ii) Millennial Media receives a Competing Proposal which the board of directors of Millennial Media has
concluded in good faith after consultation with Millennial Media’s outside legal and financial advisors constitutes a Superior Proposal after giving effect to all of the adjustments to the terms of the Merger Agreement which may be offered by
Parent, the board of directors of Millennial Media may effect a Change of Recommendation it if has concluded in good faith, after consultation with its outside legal advisors, that the failure of the board of directors of Millennial Media to make
such Change of Recommendation would be inconsistent with the directors’ exercise of their fiduciary duties under applicable Law. However, such action may only be taken if:
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(i) |
Millennial Media shall have fully complied with the non-solicitation provisions of the Merger Agreement and first provided prior written notice to Parent in advance of its intention to make a Change of Recommendation
and the reasons therefor, including the terms of any Competing Proposal to which the Change of Recommendation relates and the identity of the person making such Competing Proposal, and |
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(ii) |
at a time that is after the third business day following Millennial Media’s delivery to Parent of such notice (during which time Parent shall be entitled to deliver to Millennial Media one or more proposals for
amendments to the Merger Agreement and, if requested by Parent, Millennial Media shall negotiate with Parent in good faith with respect thereto), the board of directors of Millennial Media determines in good faith, after consultation with Millennial
Media’s outside legal advisors, taking into account all amendments or revisions to the Merger Agreement proposed by Parent, that the failure of the board of directors to effect such Change of Recommendation still would be inconsistent with the
directors’ exercise of their fiduciary duties under applicable law. |
Any material amendment to a Competing Proposal to
which such Change of Recommendation relates, including any revision to price, shall require Millennial Media to deliver to Parent a new notice and again comply with the above requirements with respect to such revised Competing Proposal.
Acceptance of Superior Proposal. If at any time prior to the Acceptance Time the board of directors of Millennial Media has concluded
in good faith after consultation with Millennial Media’s outside legal and financial advisors that a Competing Proposal constitutes a Superior Proposal, then the board of directors of Millennial Media may cause Millennial Media to terminate the
Merger Agreement, pay the Millennial Media Termination Fee (as defined below) and enter into a binding written agreement (a “Superior Proposal Agreement”) with respect to such Superior Proposal. However, such action may be only be taken
if:
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(i) |
Millennial Media shall have fully complied with the non-solicitation provisions of the Merger Agreement and first provided prior written notice to Parent in advance of its intention to terminate the Merger Agreement and
the terms of the Superior Proposal, including the final draft of the Superior Proposal Agreement and the identity of the person making such Competing Proposal; |
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(ii) |
at a time that is after the third business day following Millennial Media’s delivery to Parent of such notice (during which time Parent shall be
entitled to deliver to Millennial Media one or more proposals for amendments to the Merger Agreement and, if requested by Parent, Millennial Media shall negotiate with the Parent in good faith with respect thereto), the board of directors of
Millennial Media determines in good faith, after consultation with Millennial Media’s outside legal and financial |
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advisors, taking into account all amendments or revisions to the Merger Agreement proposed by Parent, that the Competing Proposal remains a Superior Proposal; |
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(iii) |
Millennial Media pays the Millennial Media Termination Fee to Parent upon the termination of the Merger Agreement; and |
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(iv) |
Millennial Media enters into a Superior Proposal Agreement. |
Any material amendment to a
Competing Proposal, including any revision to price, shall require Millennial Media to deliver to Parent a new notice and again comply with the above requirements with respect to such revised Competing Proposal.
Termination. The Merger Agreement may be terminated as follows:
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• |
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by mutual written consent of each of Parent and Millennial Media by action of their respective boards of directors at any time prior to the Acceptance Time; |
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by either Millennial Media or Parent, at any time prior to the Acceptance Time and after the Outside Date, if the Acceptance Time has not occurred by the Outside Date; provided that (i) if on the Outside Date all
conditions to the Offer, other than the Antitrust Law Condition and the Governmental Authority Condition and those conditions that by their nature are to be satisfied at the Expiration Date, shall have been satisfied or waived, then the Outside Date
shall automatically be extended by a period of 60 calendar days, and (ii) this right to terminate the Merger Agreement shall not be available to any party whose material breach of the Merger Agreement has caused or resulted in the Offer not
being consummated by such date (an “Outside Date Termination”); |
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by either Parent or Millennial Media, if any court or governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting
(i) prior to the Acceptance Time, the acceptance for payment of, or payment for, the Shares pursuant to the Offer or (ii) prior to the Effective Time, consummation of the Merger, and in either case such order or other action shall have
become final and non-appealable; provided that the party seeking to exercise this termination right shall have used its reasonable best efforts to remove such order or other action, and that this right to terminate shall not be available to a party
if the issuance of such order was due to the failure of such party (including, in the case of Parent, the Purchaser) to perform any of its obligations under certain sections of the Merger Agreement (see “—Appropriate Action; Consents;
Filings” above); |
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by Millennial Media, at any time prior to the Acceptance Time, if Parent or Purchaser shall have breached or failed to perform in any material respect any of its representations or warranties, covenants or other
agreements set forth in the Merger Agreement, which (i) would reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger and (ii) cannot be cured on or before the Outside Date or, if curable in such
time frame, is not cured by Parent within 30 days of receipt by Parent of written notice of such breach or failure; provided that Millennial Media shall not have the right to so terminate the Merger Agreement if Millennial Media has materially
breached of any of its covenants, agreements, representations or warranties contained in the Merger Agreement, which breach has not been cured; |
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• |
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by Parent, at any time prior to the Acceptance Time, if Millennial Media shall have breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements set forth
in the Merger Agreement, which breach or failure to perform (i) would result in a failure of the Representations Condition or Covenants Condition and (ii) cannot be cured on or before the Outside Date or, if curable in such time frame, is
not cured by Millennial Media within 30 days of receipt by Millennial Media of written notice of such breach or failure; provided that Parent shall not have the right to so terminate the Merger Agreement if Parent or Purchaser has materially
breached any of its covenants, agreements, representations or warranties contained in the Merger Agreement, which breach has not been cured (a “Millennial Media Breach Termination”); |
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• |
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by Parent, at any time prior to the Acceptance Time, if any events, developments or circumstances have occurred that would result in a failure of the Material Adverse Effect Condition that cannot be cured on or before
the Outside Date or, if curable in such time frame, is not cured by Millennial Media within thirty (30) days of receipt by Millennial Media of written notice of such breach or failure; |
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• |
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by Parent at any time prior to the Acceptance Time, if the board of directors of Millennial Media shall have effected a Change of Recommendation (whether or not in compliance with the Merger Agreement) (a “Change
of Recommendation Termination”); or |
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• |
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by Millennial Media in accordance with the provisions described in “—Acceptance of Superior Proposal” above (a “Superior Proposal Termination”). |
Effect of Termination. If the Merger Agreement is terminated, the Merger Agreement will become void and of no effect without liability
on the part of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other party, except that (i) certain specified provisions of the Merger Agreement will survive, including those
described in “—Millennial Media Termination Fee” below, and (ii) in the event of any liability arising out of or the result of, fraud or any willful breach of any covenant, agreement, representation or warranty, the
aggrieved party shall be entitled to all rights and remedies available at law or in equity.
Millennial Media Termination
Fee. Millennial Media has agreed to pay Parent a termination fee of $10,257,222 (the “Millennial Media Termination Fee”) in cash less the amount of any Expense Reimbursement (as described below) if the Merger Agreement is terminated
because:
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(i) |
Millennial Media or Parent effects an Outside Date Termination (but in the case of a termination by Millennial Media, only if at such time Parent would not be prohibited from effecting an Outside Date Termination) or
Parent effects an Millennial Media Breach Termination and (y) within eighteen (18) months after termination of the Merger Agreement, Millennial Media consummates a transaction in respect of, or enters into a letter of intent, agreement in
principle, acquisition agreement or other definitive agreement providing for, any Competing Proposal (substituting 50% for the 10% thresholds set forth in the definition of Competing Proposal); |
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(ii) |
Parent effects a Change of Recommendation Termination; or |
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(iii) |
Millennial Media effects a Superior Proposal Termination. |
Following payment of the
Millennial Media Termination Fee, neither Millennial Media nor any other person shall (subject to the provisions described in “—Effect of Termination” above) have any further liability to Parent or any other person with respect
to the Merger Agreement or the transactions contemplated hereby, and upon payment thereof the Millennial Media Termination Fee shall be the sole and exclusive remedy (subject to the provisions described in “—Effect of
Termination” above) of Parent and Purchaser against Millennial Media, its subsidiaries and their respective former, current and future representatives for any loss suffered as a result of the failure of the transactions contemplated by the
Merger Agreement to be consummated or for a breach or failure to perform under the Merger Agreement. In no event shall Millennial Media be required to pay the Millennial Media Termination Fee on more than one occasion and any payment by Millennial
Media of the Expense Reimbursement shall be credited against the Millennial Media Termination Fee, if any, that may become payable by Millennial Media.
Availability of Specific Performance. The parties agreed that irreparable damage for which monetary damages, even if available, would
not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of the Merger Agreement in accordance with its specified terms or otherwise breach such provisions. The parties acknowledged and agreed that
the parties would be entitled to an injunction, specific performance and other equitable relief to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement, in addition to any other
remedy to which they are entitled at law or in equity.
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Expenses. All fees and expenses incurred by the parties in connection with the Merger
Agreement and the transactions contemplated thereby will be paid by the party incurring such fees and expenses whether or not the Offer and/or the Merger is consummated, except that Parent shall pay all filing fees under the HSR Act. In the event
that (i) Parent effects an Millennial Media Breach Termination or (ii) Parent effects an Outside Date Termination, provided that prior to such Outside Date Termination the Antitrust Law Condition and the Governmental Authority Condition
have been satisfied, then the Company shall reimburse Parent $2,735,259 in respect of expenses incurred by Parent, Purchaser and their respective affiliates in connection with the Merger Agreement and the transactions contemplated thereby (the
“Expense Reimbursement”), without need for supporting documentation.
Amendment and Waiver. The Merger Agreement
may be amended by mutual written agreement of the parties by action taken by or on behalf of their respective boards of directors at any time prior to the Effective Time, except that after the Acceptance Time, no amendment may decrease the Offer
Price or the Merger Consideration. At any time prior to the Effective Time, subject to applicable law, any party may (a) extend the time for the performance of any obligation or other act of any other party, (b) waive any inaccuracy in the
representations and warranties of the other parties and (c) subject to the prohibited amendment described in the prior sentence, waive compliance by any other party with any agreement or condition contained in the Merger Agreement.
Confidentiality Agreement
On
January 19, 2015, Millennial Media and Parent entered into a confidentiality agreement, effective January 16, 2015, as amended on May 18, 2015, pursuant to which Verizon joined the agreement, and August 26, 2015 (the
“Confidentiality Agreement”) in connection with a possible transaction involving Millennial Media. Under the Confidentiality Agreement, the parties agreed, each on behalf of itself and its affiliates and subject to certain exceptions, to
keep confidential any non-public information concerning each other party for a period of two years from the date of the Confidentiality Agreement. This summary of the Confidentiality Agreement does not purport to be complete and is qualified in its
entirety by reference to the Confidentiality Agreement and applicable amendments, copies of which are filed as Exhibit (d)(2), Exhibit (d)(3) and Exhibit (d)(4) to the Schedule TO filed with the SEC, which is incorporated by reference herein.
Exclusivity Agreement
On June 15,
2015, Millennial Media and Parent entered into an exclusivity agreement (as amended, the “Exclusivity Agreement”), pursuant to which Millennial Media agreed that, during the period commencing on June 15, 2015 and ending on the
earliest to occur of (i) the date of execution of a definitive written agreement between Millennial Media and Parent, (ii) the termination of negotiations between Millennial Media and Parent with respect to the proposed transaction,
(iii) any reduction in the proposed purchase price of the proposed transaction or (iv) July 17, 2015, Millennial Media would not, among other things, solicit any inquiries or engage in discussions with respect to, or provide any
information to any other persons in connection with, any alternative transaction involving Millennial Media, or enter into any agreement with respect thereto. Parent agreed to a customary one-year standstill with respect to Millennial Media that
would terminate if, among other circumstances, Millennial Media entered into a definitive agreement with a third party (including Parent) to effect a business combination. On July 21, 2015, following the expiration of the exclusivity period,
Millennial Media and Parent executed an amendment to the Exclusivity Agreement pursuant to which Millennial Media agreed that until August 20, 2015, it would continue to promptly notify Parent of the receipt of the initial communication from
any third party regarding an alternative transaction. This summary of the Exclusivity Agreement does not purport to be complete and is qualified in its entirety by reference to the Exclusivity Agreement, copies of which are filed as Exhibit (d)(5)
and Exhibit (d)(6) to the Schedule TO filed with the SEC, which is incorporated by reference herein.
| 12. |
Purpose of the Offer; Plans for Millennial Media. |
Purpose of the Offer. The
purpose of the Offer is for Purchaser to acquire control of, and the entire equity interest in, Millennial Media. The Offer, as the first step in the acquisition of Millennial Media, is intended to
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facilitate the acquisition of all outstanding Shares. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. If the Offer is
successful, Purchaser intends to consummate the Merger as promptly as practicable.
If you sell your Shares in the Offer, you will
cease to have any equity interest in Millennial Media or any right to participate in its earnings and future growth. If you do not tender your Shares, but the Merger is consummated, you also will no longer have an equity interest in Millennial
Media. After selling your Shares in the Offer or the subsequent Merger, you will not bear the risk of any decrease in the value of Millennial Media.
Merger Without a Stockholder Vote. If the Offer is consummated, we do not anticipate seeking the approval of the public stockholders of
Millennial Media before effecting the Merger. Section 251(h) of the DGCL provides that following consummation of a successful tender offer for a public corporation, and subject to certain statutory provisions, if the acquirer holds at least the
amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger for the target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable
in the tender offer, the acquirer can effect a merger without the action of the other stockholders of the target corporation. Accordingly, if we consummate the Offer, we intend to effect the closing of the Merger without a vote of the stockholders
of Millennial Media in accordance with Section 251(h) of the DGCL.
Plans for Millennial Media. It is expected that, initially
following the Merger, the business and operations of Millennial Media will, except as set forth in this Offer to Purchase, be continued substantially as they are currently being conducted. Parent will continue to evaluate the business and operations
of Millennial Media 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. Parent expects that the business and operations of
Millennial Media will further strengthen its mobile capabilities and underline its position as the first global mobile media technology company. Millennial Media’s business will add a supply-side platform for app monetization to its publisher
suite of offerings, add significant mobile brand advertising scale across Parent’s ONE platform, have access to global active unique users and robust addressable and cross-screen targeting capabilities, accelerate Parent’s mobile position
in key international markets, including Singapore, Japan, UK, France and Germany, and add engineering, sales and product talent that specialize in mobile to Parent.
At the Effective Time, the certificate of incorporation and the by-laws of the Surviving Corporation will be amended to be in the form of the
certificate of incorporation and by-laws of Purchaser except that the name of the Surviving Corporation shall be “Millennial Media, Inc.” The directors of Purchaser will become the directors of the Surviving Corporation and the officers of
Millennial Media at the Effective Time will be the officers of the Surviving Corporation in each case until their respective successors are duly elected or appointed and in each case unless Parent determines to appoint other persons to such
positions. See Section 11 — “The Merger Agreement — Merger Agreement — Board of Directors and Officers.”
In
connection with the negotiation and execution of the Merger Agreement, Parent entered into employment offer letters with Ernest Cormier, Matthew Gillis and seven other Company employees, which are conditioned upon, and will become effective as of,
the closing date of the Merger (the “Effective Date”). The employment offer letters will supersede any prior employment arrangements that such employees had previously entered into with the Company. Parent also entered into retention bonus
letters with Matthew Gillis and seven other Company employees, which are conditioned upon, and will become effective as of, the Effective Date.
Mr. Cormier’s employment offer letter provides for (i) an annual base salary of $450,000, (ii) an annual target cash bonus
of 75% of base salary, (iii) an annual Parent equity award with a target grant date value of $600,000, that will be settled in cash, (iv) a sign-on cash bonus of $25,000, payable in the second pay period following his first day of
employment with Parent and (v) a pro-rated annual bonus under the Company’s annual bonus plan, assuming that performance has been achieved at target, payable within 60 days following the Effective Date. In the event that
Mr. Cormier’s employment is terminated by Parent without cause, subject to Mr. Cormier’s execution and non-revocation of a release of claims, Mr. Cormier would be entitled to continued
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payment of base salary, COBRA premium reimbursements and outplacement services for 12 months. In addition, Mr. Cormier is entitled to two one-time Parent equity grants: (i) a
founder’s grant of Parent restricted stock units with a grant date value of $700,000, which will vest in full on June 30, 2018, which will be settled in cash and (ii) a sign-on Parent equity grant with a grant date value of $600,000,
which will vest in three equal installments on each of the first three anniversaries of the grant date, and will be settled in cash. Vesting of the sign-on equity award and founder’s equity award are subject to Mr. Cormier’s continued
employment through the applicable vesting dates.
Mr. Gillis’s employment offer letter provides for (i) an annual base
salary of $420,000, (ii) an annual target bonus of 75% of base salary, and (iii) a pro-rated annual bonus under the Company’s annual bonus plan, assuming that performance has been achieved at target, payable within 60 days following
the Effective Date. In the event that Mr. Gillis’s employment is terminated by Parent without cause, subject to Mr. Gillis’s execution and non-revocation of a release of claims, Mr. Gillis would be entitled to continued
payment of base salary, COBRA premium reimbursements and outplacement services for six months. Parent has also entered into a retention bonus letter with Mr. Gillis, which provides for a cash bonus in an aggregate amount of $500,000 to be paid
to Mr. Gillis in two equal installments on each of the first and second anniversaries of the Effective Date. If Mr. Gillis is terminated without cause prior to the end of the bonus period, he will receive any unpaid retention bonus payments.
The employment offer letters and retention bonus letters for the seven other employees generally contain provisions regarding base
salary, incentive compensation, retention bonuses, employee benefits, severance and non-competition obligations, among other standard provisions.
Parent has proposed entering into employment offer letters and retention bonus letters with two additional employees, Jason Kelly and Marc
Theermann. At this time, Messrs. Theermann and Kelly have not entered into employment offer letters or retention bonus letters with the Company.
| 13. |
Certain Effects of the Offer. |
Market for the Shares. If the Offer is successful,
there will be no market for the Shares because Purchaser intends to consummate the Merger as soon as practicable following the Offer Closing.
Stock Quotation. The Shares are currently listed on the NYSE. Immediately following the consummation of the Merger (which is expected
to occur as soon as practicable following the Offer Closing), the Shares will no longer meet the requirements for continued listing on the NYSE because the only stockholders will be Parent and its subsidiaries. The NYSE requires, among other
things, that any listed shares of common stock have at least 400 total stockholders. Immediately following the consummation of the Merger we expect to cause the Surviving Corporation to delist the Shares from the NYSE.
Margin Regulations. The Shares are currently “margin securities” under the Regulations 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 the Shares. Depending upon factors similar to those described above regarding the
market for the Shares and stock quotations, it is possible that, following the Offer, the Shares would no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could
no longer be used as collateral for loans made by brokers.
Exchange Act Registration. The Shares are currently registered
under the Exchange Act. Such registration may be terminated upon application of the Surviving Corporation to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of
registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Surviving Corporation to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer
applicable to the Surviving Corporation, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection
with stockholders’ meetings and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to “going private”
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transactions. Furthermore, the ability of “affiliates” of the Surviving Corporation and persons holding “restricted securities” of the Surviving Corporation to dispose of
such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. We expect to cause the Surviving Corporation 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. If registration of the Shares is not terminated prior to the Merger, the registration of the Shares under the Exchange Act will be terminated following the
consummation of the Merger.
| 14. |
Dividends and Distributions. |
The Merger Agreement provides that from the date of the
Merger Agreement to the Effective Time, without the prior written consent of Parent, Millennial Media will not, and will not allow its subsidiaries to, declare, authorize, make or pay any dividend or other distribution, payable in cash, stock,
property or otherwise, with respect to the capital stock of Millennial Media or any subsidiary of Millennial Media, subject to limited exceptions.
| 15. |
Conditions to the Offer. |
Notwithstanding any other term of the Offer or the Merger
Agreement, Purchaser shall not be required to, and Parent shall not be required to cause Purchaser to, accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act
(relating to Purchaser’s obligation to pay for or return tendered shares of Millennial Media common stock promptly after the termination or withdrawal of the Offer), pay for any shares of Millennial Media common stock tendered pursuant to the
Offer if:
| |
(a) |
The Minimum Condition and the Termination Condition shall have not been satisfied at the Expiration Date; |
| |
(b) |
any waiting period under the HSR Act or any other applicable antitrust law as set forth in the Merger Agreement applicable to the transactions contemplated by the Merger Agreement has not expired or terminated at or
prior to the Expiration Date; or |
| |
(c) |
any of the following conditions shall have occurred and be continuing at the Expiration Date: |
| |
(i) |
any governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or order which is then in effect and has the effect of making the Offer or Merger illegal or
otherwise prohibiting, restraining or preventing the consummation of the Offer or Merger (provided that Parent and Purchaser have used its reasonable best efforts to oppose any such action by such governmental authority); |
| |
(ii) |
the representations and warranties of Millennial Media relating to the capitalization of Millennial Media (contained in
Section 4.3(a)-(d) of the Merger Agreement) shall not be true and correct in all respects when made and at and as of immediately prior to the expiration of the Offer as if made at and as of such time (other than such representations and
warranties that by their terms address matters only as of another specified time, which shall be required to be true and correct in all respects only as of such time), except for any failures to be so true and correct that, individually or in the
aggregate, are de minimis; (B) the representations and warranties of Millennial Media relating to the due incorporation and valid existence of Millennial Media (contained in Section 4.1 of the Merger Agreement), regarding the
organizational documents of Millennial Media (contained in Section 4.2 of the Merger Agreement), or regarding Millennial Media’s corporate authority and the validity of the Merger Agreement (contained in Section 4.4 of the Merger
Agreement) shall not be true and correct in all material respects when made and at and as of immediately prior to the expiration of the Offer as if made at and as of such time (other than such representations and warranties that by their terms
address matters only as of another specified |
-37-
| |
time, which shall be required to be true and correct in all material respects only as of such time); (C) the representations and warranties of Millennial Media regarding the absence of a
Company Material Adverse Effect (contained in Section 4.9(a)(ii) of the Merger Agreement) (as described above in Section 11 — “The Merger Agreement — Merger Agreement — Representations and Warranties”) shall not be
true and correct in all respects when made and at and as of immediately prior to the expiration of the Offer as if made at and as of such time (other than such representations and warranties that by their terms address matters only as of another
specified time, which shall be required to be true and correct in all respects only as of such time); and (D) all of the remaining representations and warranties of Millennial Media set forth in the Merger Agreement, without giving effect to
materiality or “Company Material Adverse Effect” qualifications, shall not be true and correct when made and at and as of immediately prior to the expiration of the Offer as if made at and as of such time (other than such representations
and warranties that by their terms address matters only as of another specified time, which shall be required to be true and correct only as of such time), except with respect to this clause (D), where the failure of such representations and
warranties to be so true and correct would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; |
| |
(iii) |
Millennial Media shall have breached or failed to perform or to comply with, in any material respect, any agreement or covenant to be performed or complied with by it under the Merger Agreement at or prior to the
Acceptance Time (and such breach or failure shall not have been waived by Parent or Purchaser or cured by Millennial Media at or prior to the Acceptance Time); |
| |
(iv) |
since the date of the Merger Agreement, a Company Material Adverse Effect (or any event, development or circumstances that would reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect) shall have occurred and shall be continuing as of the Expiration Date; |
| |
(v) |
Purchaser shall have failed to receive a certificate of Millennial Media, executed by the Chief Executive Officer or the Chief Financial Officer of Millennial Media, dated as of the Expiration Date, to the effect that
none of the conditions set forth in the foregoing clauses (c)(ii), (c)(iii) or (c)(iv) have occurred; or |
| |
(vi) |
the board of directors of Millennial Media shall have withdrawn or modified (including by amendment of the Schedule 14D-9) in a manner adverse to Parent or Purchaser its recommendation that the stockholders of
Millennial Media accept the Offer and tender their Shares to Purchaser in the Offer or shall have made a Change of Recommendation. |
The foregoing conditions are in addition to, and not a limitation of, the rights of Parent and Purchaser to extend, terminate or modify the
Offer pursuant to the terms and conditions of the Merger Agreement.
The foregoing conditions, other than the Minimum Condition and the
Termination Condition, are for the sole benefit of Parent and Purchaser and, subject to the terms and conditions of the Merger Agreement and applicable law, Parent and Purchaser expressly reserve the right to waive, in whole or in part, any
condition to the Offer; provided, however, that, without the consent of Millennial Media, we are not permitted to amend or waive the Minimum Condition, the Termination Condition, the Antitrust Law Condition or the Governmental Authority Condition.
| 16. |
Certain Legal Matters; Regulatory Approvals. |
Legal Proceedings. On
September 9, 2015, a putative class action lawsuit, captioned Parshall v. Millennial Media, Inc. et al., C.A. No. 11485-VCG, was filed in connection with the Offer and the Merger in the Court of Chancery of the State of
Delaware (the “Delaware Court”). On September 10, 2015, two additional complaints,
-38-
captioned Desjardins v. Millennial Media, Inc. et al., C.A. No. 11490-VCG and Chen v. Barrett et al., C.A. No. 11496-VCG were filed in the Delaware Court. On
September 15, 2015, a complaint, captioned Wagner v. Millennial Media, Inc. et al., C.A. No. 11503-VCG was filed in the Delaware Court. On September 16, 2015, a complaint, captioned Nguyen v. Millennial Media, Inc. et al.,
C.A. No. 11511-VCG was filed in the Delaware Court. The complaints name Millennial Media, the members of Millennial Media’s board of directors, Parent and Purchaser as defendants, although the Chen and Nguyen complaints do not
formally name Millennial Media as a defendant. The complaints generally allege that the members of Millennial Media’s board of directors breached their fiduciary duties to Millennial Media’s stockholders by agreeing to the Offer and the
Merger. The complaints also allege that Parent and Purchaser and, in the case of the Parshall and Desjardins complaints, Millennial Media, aided and abetted the alleged breaches of fiduciary duty. The complaints seek, among other
things, to enjoin the Offer and the Merger.
General. Except as described in this Section 16, based on our examination
of publicly available information filed by Millennial Media with the SEC and other information concerning Millennial Media, we are not aware of any governmental license or regulatory permit that appears to be material to Millennial Media’s
business that might be adversely affected by our acquisition of Shares as contemplated herein or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for
the acquisition or ownership of Shares by Purchaser or Parent as contemplated herein. Should any such approval or other action be required, we currently contemplate that, except as described below under — “State Takeover Laws,”
such approval or other action will be sought. While we do not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to Millennial Media’s business, any
of which under certain conditions specified in the Merger Agreement, could cause us to elect to terminate the Offer without the purchase of Shares thereunder. See Section 15 — “Conditions to the Offer.”
Antitrust Compliance. Under the HSR Act, our purchase of Shares in the Offer may not be completed until the expiration of a 15 calendar
day waiting period following the filing by Parent, on behalf of Purchaser, of a Premerger Notification and Report Form concerning the Offer with the FTC and the Antitrust Division of the U.S. Department of Justice, unless the waiting period is
earlier terminated by the FTC and the Antitrust Division. Each of Parent and Millennial Media is required to file a Premerger Notification and Report Form with the FTC and the Antitrust Division in connection with the purchase of Shares in the
Offer, which filings were made prior to the date hereof. If within the 15 calendar day waiting period either the FTC or the Antitrust Division issues a request for additional information and documentary material (a “Second Request”), the
waiting period with respect to the Offer would be extended until 10 calendar days following the date of substantial compliance by Parent with that request, unless the FTC or the Antitrust Division terminates the additional waiting period before its
expiration. After the expiration of the 10 calendar day waiting period, the waiting period could be extended only by court order or with the consent of Parent. In practice, complying with a Second Request can take a significant period of time.
Although Millennial Media is required to file certain information and documentary material with the FTC and the Antitrust Division in connection with the Offer, neither Millennial Media’s failure to make those filings nor a request for
additional documents and information issued to Millennial Media from the FTC or the Antitrust Division will extend the waiting period with respect to the purchase of Shares in the Offer. The Merger will not require an additional filing under the HSR
Act if Purchaser owns more than 50% of the outstanding Shares at the time of the Merger and if the Merger occurs within one year after the HSR Act waiting period applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division will scrutinize the legality under the antitrust laws of Purchaser’s proposed acquisition of
Millennial Media. At any time before or after Purchaser’s acceptance for payment of Shares pursuant to the Offer, if the Antitrust Division or the FTC believes that the Offer would violate the U.S. federal antitrust laws by substantially
lessening competition in any line of commerce affecting U.S. consumers, the FTC and the Antitrust Division have the authority to challenge the transaction by seeking a federal court order enjoining the transaction or, if Shares have already been
acquired, requiring disposition of such Shares, or
-39-
the divestiture of substantial assets of Purchaser, Millennial Media, or any of their respective subsidiaries or affiliates or requiring other conduct relief. United States state attorneys
general and private persons may also bring legal action under the antitrust laws seeking similar relief or seeking conditions to the completion of the Offer. While Parent believes that consummation of the Offer would not violate any antitrust laws,
there can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if a challenge is made, what the result will be. If any such action is threatened or commenced by the FTC, the Antitrust Division or any state or any
other person, Purchaser may not be obligated to consummate the Offer or the Merger. See Section 15 — “Conditions to the Offer.”
State Takeover Laws. Millennial Media is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL
prevents a Delaware corporation from engaging in a “business combination” (defined to include mergers and certain other actions) with an “interested stockholder” (including a person who owns or has the right to acquire 15% or
more of a corporation’s outstanding voting stock) for a period of three years following the date such person became an “interested stockholder” unless, among other things, the “business combination” is approved by the board
of directors of such corporation before such person became an “interested stockholder.” Millennial Media’s board of directors has approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the
Merger, for purposes of Section 203 of the DGCL.
Millennial Media, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted takeover laws. We do not know whether any of these laws will, by their terms, apply to the Offer or the Merger and have not attempted to comply with any such laws. Should any
person seek to apply any state takeover law, we 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 any person asserts that
the takeover laws of any state are 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 or the Merger, we may be required to file certain information with, or
receive approvals from, the relevant state authorities. In addition, if enjoined, we may 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,
we may not be obligated to accept for payment any Shares tendered in the Offer. See Section 15 — “Conditions to the Offer.”
Going Private Transactions. The SEC 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 other business combination following the purchase of Shares pursuant to the Offer in which we seek to acquire the remaining Shares not then held by
us. We believe that Rule 13e-3 under the Exchange Act will not be applicable to the Merger because we were not, at the time the Merger Agreement was executed, and are not, an affiliate of Millennial Media (for purposes of the Exchange Act); it is
anticipated that the Merger will be effected as soon as practicable after consummation of the Offer; and, in the Merger, stockholders will receive the same price per Share as the Offer Price.
Stockholder Approval Not Required. Section 251(h) of the DGCL provides that stockholder approval of a merger is not required if
certain requirements are met, including that (1) the acquiring company consummates a tender offer for any and all of the outstanding common stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be entitled to
vote on the merger, (2) following the consummation of such tender offer, the acquiring company owns at least such percentage of the stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be required to adopt the
merger, and (3) at the time that the board of directors of the company to be acquired approves the merger, no other party to the merger agreement is an interested stockholder under the DGCL. If the Minimum Condition is satisfied and we accept
Shares for payment pursuant to the Offer, we will hold a sufficient number of Shares to ensure that Millennial Media will not be required to submit the adoption of the Merger Agreement to a vote of the stockholders of Millennial Media. Following the
consummation of the Offer and subject to the satisfaction of the remaining conditions to the Merger set forth in the Merger Agreement, Parent, Purchaser and Millennial Media will take all necessary and appropriate action to effect the Merger as
promptly as practicable without a meeting of stockholders of Millennial Media in accordance with Section 251(h) the DGCL.
-40-
No appraisal rights are available to the holders of Shares in
connection with the Offer. However, if the Merger is consummated, the holders of Shares immediately prior to the Effective Time who (i) did not tender their Shares in the Offer; (ii) follow the procedures set forth in Section 262 of
the DGCL and (iii) do not thereafter withdraw their demand for appraisal of such Shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to have their Shares appraised by the Delaware Court
and receive payment of the “fair value” of such Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with a fair rate of interest, as determined by such court.
The “fair value” of any Shares could be based upon considerations other than, or in addition to, the price paid in the Offer and the
market value of such Shares. Holders of Shares should recognize that the value so determined could be higher or lower than, or the same as, the Offer Price or the consideration payable in the Merger (which is equivalent in amount to the Offer
Price). Moreover, we may argue in an appraisal proceeding that, for purposes of such proceeding, the fair value of such Shares is less than such amount.
Under Section 262 of the DGCL, where a merger is approved under Section 251(h), either a constituent corporation before the
effective date of the merger, or the surviving corporation within 10 days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger
or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of Section 262 of the DGCL. The Schedule 14D-9
constitutes the formal notice of appraisal rights under Section 262 of the DGCL.
As described more fully in the Schedule
14D-9, if a stockholder elects to exercise appraisal rights under Section 262 of the DGCL, such stockholder must do all of the following:
| |
• |
|
within the later of the consummation of the Offer, which shall occur on the Offer Closing Date (i.e., the date on which acceptance and payment for the Shares occurs, which shall be October 19, 2015 unless we extend
the Offer pursuant to the terms of the Merger Agreement) and 20 days after the mailing of the Schedule 14D-9 (which date of mailing is on or around September 18, 2015), deliver to Millennial Media a written demand for appraisal of Shares
held, which demand must reasonably inform Millennial Media of the identity of the stockholder and that the stockholder is demanding appraisal; |
| |
• |
|
not tender their Shares in the Offer; and |
| |
• |
|
continuously hold of record the Shares from the date on which the written demand for appraisal is made through the Effective Time. |
The foregoing summary of the appraisal rights of stockholders under the DGCL does not purport to be a complete statement of the procedures
to be followed by stockholders desiring to exercise any appraisal rights available thereunder and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires strict and timely adherence
to the applicable provisions of Delaware law. A copy of Section 262 of the DGCL is included as Annex B to the Schedule 14D-9.
The information provided above is for informational purposes only with respect to your alternatives if the Merger is consummated. If you
tender your Shares in the Offer, you will not be entitled to exercise appraisal rights with respect to your tendered Shares but, instead, subject to the conditions to the Offer, you will receive the Offer Price for your tendered Shares.
Parent and Purchaser have retained Innisfree M&A Incorporated to
be the Information Agent and American Stock Transfer & Trust Company, LLC to be the Depositary in connection with the Offer. The Information Agent
-41-
may contact holders of Shares by mail, telephone, telecopy, telegraph and personal interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer
to beneficial owners of Shares.
The Information Agent and the Depositary each will receive reasonable and customary compensation for
their respective services in connection with the Offer, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under federal
securities laws.
Neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than
to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by Purchaser for customary mailing
and handling expenses incurred by them in forwarding offering materials to their customers. In those jurisdictions where applicable 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 to be designated by Purchaser.
We are not aware of any state in which the making of the Offer or the
tender of Shares in connection therewith would not be in compliance with the laws of that state. If we become aware of any state in which the making of the Offer would not be in compliance with applicable law, we will make a good faith effort to
comply with any such law. If after such good faith effort, we cannot comply with any such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares residing in such state.
No person has been authorized to give any information or to make any representation on behalf of Parent or Purchaser not contained herein
or in the Letter of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized. No broker, dealer, bank, trust company, fiduciary or other person shall be deemed to be the agent of
Purchaser, the Depositary, or the Information Agent for the purpose of the Offer.
Purchaser has filed with the SEC a Tender Offer
Statement on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. Millennial
Media has advised Purchaser that it is filing today with the SEC its Solicitation/ Recommendation Statement on Schedule 14D-9 setting forth the recommendation of the board of directors of Millennial Media with respect to the Offer and the reasons
for such recommendation and furnishing certain additional related information. A copy of such documents, and any amendments thereto, may, when filed, be examined at, and copies may be obtained from, the SEC in the manner set forth under
Section 7 — “Certain Information Concerning Millennial Media” above.
Mars Acquisition Sub, Inc.
September 18, 2015
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SCHEDULE I — INFORMATION RELATING TO PARENT AND PURCHASER
Purchaser. The following table sets forth the name, present principal occupation or employment and material occupations,
positions, offices or employments for the past five years of each executive officer and director of Purchaser. The current business address of each person is c/o AOL Inc., 770 Broadway, New York, New York 10003 and the business telephone number is
212-652-6400.
|
|
|
|
|
| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
| Robert Lord
President and Director |
|
US |
|
Mr. Lord has served as Executive Vice President and President of AOL since January 2015, overseeing AOL’s unified global advertising operations. Prior to that, Mr. Lord served as Executive Vice President and Chief
Executive Officer of AOL Platforms, a role he held from August 2013 to January 2015. Prior to that, Mr. Lord served as the Global CEO of Razorfish LCC, a digital agency which provides services such as web development and emerging media,
technology and social influence marketing, from February 2009 to August 2013. Mr. Lord also worked for Publicis Group S.A., a multinational advertising and public relations company, as CEO of Publicis Groupe’s Digital Technology
Division, which includes Razorfish, the Digitas LBi Network, Denuo, Fluent and CRM365, from February 2013 to August 2013, and CEO of VivaKi Interactive from December 2011 to January 2013. Prior to his CEO roles, Mr. Lord held various
positions at Razorfish, including as East Region President from August 2004 to January 2009, as Executive Vice President SBI-Razorfish from March 2003 to July 2004 and as Chief Operating Officer from January 2002 to February 2003. |
|
|
|
| Julie Jacobs
Director |
|
US |
|
Ms. Jacobs, has served as Executive Vice President, General Counsel and Corporate Secretary of AOL since May 2010, responsible for all legal, regulatory, compliance and public policy matters for AOL. She also oversees
AOL’s Corporate Services function, encompassing AOL’s facilities and operations. Prior to that, Ms. Jacobs served as Senior Vice President, Deputy General Counsel and Assistant Corporate Secretary, a role she held from March 2006
until May 2010. Ms. Jacobs joined AOL in 2000 as Assistant General Counsel. Prior to joining AOL, Ms. Jacobs was an attorney at Milbank Tweed Hadley & McCloy LLP, where her practice focused on a wide variety of international
development and telecommunications projects. |
Parent. The following table sets forth the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five years of each executive officer and director of Parent. Unless otherwise indicated, the current business address of each person is c/o AOL Inc., 770 Broadway, New York, New
York 10003 and the business telephone number is 212-652-6400.
|
|
|
|
|
| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
| Tim Armstrong
Chief Executive Officer |
|
US |
|
Mr. Armstrong has served as Chief Executive Officer of AOL since April 2009 and served as Chairman of the Board of AOL from April 2009 until May 2015. Prior to that, Mr. Armstrong was President, Americas Operations
of |
|
|
|
|
|
| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
|
|
|
|
Google Inc. Mr. Armstrong joined Google Inc. in 2000 as Vice President, Advertising Sales, and in 2004 was promoted to Vice President, Advertising and Commerce. In 2007 Mr. Armstrong was named President, Americas
Operations and Senior Vice President of Google Inc. Before joining Google, Mr. Armstrong served as Vice President of Sales and Strategic Partnerships for Snowball.com from 1998 to 2000. Prior to that, he served as Director of Integrated Sales
and Marketing at Starwave’s and Disney’s ABC/ESPN internet Ventures. |
|
|
|
| Marni M. Walden
Director |
|
US |
|
Ms. Walden is Executive Vice President and President of Product Innovation and New Businesses for Verizon Communications Inc. She is responsible for developing and growing Verizon’s emerging businesses and for overseeing
Verizon’s Strategy Development and Planning Group. Before being named to her current position in February 2015, Ms. Walden was Executive Vice President and President — Product and New Business Innovation for Verizon. Prior to that, Ms.
Walden served as Executive Vice President and Chief Operating Officer for Verizon Wireless. |
|
|
|
| John Doherty
Director |
|
US |
|
Mr. Doherty is Senior Vice President — Corporate Development and Verizon Ventures for Verizon Communications Inc. He is responsible for corporate wide joint ventures, strategic investment activity, acquisitions and
divestitures. Before being named to his current position in January 2013, Mr. Doherty was Senior Vice President — Investor Relations for Verizon. Prior to that, Mr. Doherty served as chief financial officer for Verizon Services
Operations. |
|
|
|
| Holly Hess
Executive Vice President and Chief Financial Officer |
|
US |
|
Ms. Hess has served as the Executive Vice President and Chief Financial Officer of AOL since June 2015. She is responsible for all of AOL’s finance functions, corporate strategy and corporate development. Prior to this, Ms.
Hess held a number of finance leadership positions with Verizon Communications and Verizon Wireless, including Senior Vice President for Verizon Communications Inc.’s Internal Audit organization from February 2015 until June 2015, Senior Vice
President and Chief Financial Officer of Verizon Wireless from June 2013 until February 2015, Senior Vice President of Operational Excellence and Transformation responsible for identifying and implementing process improvements to drive efficiencies
of Verizon Communications Inc. from September 2011 until June 2013 and Senior Vice President and Treasurer of Verizon Communications Inc. from October 2009 until August 2011. Ms. Hess also worked as a senior auditor at Price Waterhouse and Deloitte
and Touche. |
-2-
|
|
|
|
|
| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
| Robert Lord
Executive Vice President and President |
|
US |
|
Mr. Lord has served as Executive Vice President and President of AOL since January 2015, overseeing AOL’s unified global advertising operations. Prior to that, Mr. Lord served as Executive Vice President and Chief
Executive Officer of AOL Platforms, a role he held from August 2013 to January 2015. Prior to that, Mr. Lord served as the Global CEO of Razorfish LCC, a digital agency which provides services such as web development and emerging media,
technology and social influence marketing, from February 2009 to August 2013. Mr. Lord also worked for Publicis Group S.A., a multinational advertising and public relations company, as CEO of Publicis Groupe’s Digital Technology
Division, which includes Razorfish, the Digitas LBi Network, Denuo, Fluent and CRM365, from February 2013 to August 2013, and CEO of VivaKi Interactive from December 2011 to January 2013. Prior to his CEO roles, Mr. Lord held various
positions at Razorfish, including as East Region President from August 2004 to January 2009, as Executive Vice President SBI-Razorfish from March 2003 to July 2004 and as Chief Operating Officer from January 2002 to February 2003. |
|
|
|
| Jimmy Maymann
Executive Vice President and President, AOL Content & Consumer Brands |
|
Denmark |
|
Mr. Maymann has served as Executive Vice President and President of Content and Consumer Brands at AOL since August 2015, with responsibility for leading AOL’s portfolio of content brands, as well as AOL’s content strategy
and OTT operations. From 2011 to 2015, Mr. Maymann held several senior roles with AOL, including Chief Executive Officer of TheHuffingtonPost.com, Inc. and prior to that Senior Vice President International of AOL. Prior to joining AOL, Mr. Maymann
co-founded GoViral, an early innovator in online video production and distribution, developing video advertising platforms able to track, distribute and host video ads across multiple sites online. Mr. Maymann was with GoViral from 2005 until
2011, when it was acquired by AOL. |
|
|
|
| Julie Jacobs
Executive Vice President, General Counsel and Corporate Secretary |
|
US |
|
Ms. Jacobs has served as Executive Vice President, General Counsel and Corporate Secretary of AOL since May 2010, responsible for all legal, regulatory, compliance and public policy matters for AOL. She also oversees AOL’s
Corporate Services function, encompassing AOL’s facilities and operations. Prior to that, Ms. Jacobs served as Senior Vice President, Deputy General Counsel and Assistant Corporate Secretary, a role she held from March 2006 until May 2010.
Ms. Jacobs joined AOL in 2000 as Assistant General Counsel. Prior to joining AOL, Ms. Jacobs was an attorney at Milbank Tweed Hadley & McCloy LLP, where her practice focused on a wide variety of international development and
telecommunications projects. |
|
|
|
| William Pence
Executive Vice President and Chief Technology Officer |
|
US |
|
Mr. Pence has served as Executive Vice President and Chief Technology Officer since May 2014. Mr. Pence leads all |
-3-
|
|
|
|
|
| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
|
|
|
|
|
|
|
aspects of AOL’s global technology strategy, platform development and external technology partnerships, as well as playing a key leadership role in the overall strategy and direction of AOL. Prior to that, Mr. Pence served as
Executive Vice President and Chief Technology Officer from November 2007 to April 2014 and Chief Operating Officer from March 2012 to April 2014 of WebMD Health Corporation, a provider of Internet information, communities and reference material
about health subjects. Prior to that, Mr. Pence served as Senior Vice President and Chief Technology Officer of Napster, Inc. from May 2003 to October 2007. From March 2001 to April 2003, Mr. Pence held the position of Senior Vice President and
Chief Technology Officer of pressplay, a Universal Music Group/Sony Music Entertainment joint venture. Prior to that, Mr. Pence held the position of Senior Vice President and Chief Technology Officer of Universal Music Group and various
technical positions at IBM Corporation. |
|
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| Terri Zandhuis
Executive Vice President and Chief People Officer |
|
US |
|
Ms. Zandhuis has served as the Executive Vice President and Chief People Officer of AOL since June 2015, with responsibility to lead all aspects of AOL’s global human resources strategy, including Talent Acquisition,
Compensation and Benefits programs, Business Advisory programs, and all other AOL Workplace programs. Before joining AOL, she served as Vice President of Human Resources for eBay Enterprise from April 2012 until June 2015. Prior to eBay, Ms.
Zandhuis held several senior positions at Bank of America, including Senior Vice President, Human Resources Executive in the Global Technology and Operations group from 2010 until 2012 and in the Global Corporate Banking/Global Commercial Banking
group from 2008 until 2010. |
Verizon. The following table sets forth the name, present principal occupation or employment and
material occupations, positions, offices or employments for the past five years of each executive officer and director of Verizon. Unless otherwise indicated, the current business address of each person is c/o Verizon Communications Inc., 1095
Avenue of the Americas, New York, New York 10036 and the business telephone number is (212) 395-1000.
|
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| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
| Lowell C. McAdam
Chairman and Chief Executive Officer |
|
US |
|
Mr. McAdam is Chairman and Chief Executive Officer of Verizon Communications Inc. Mr. McAdam has served as CEO since 2011 and Chairman since 2012. Prior to becoming CEO, Mr. McAdam served in numerous positions of responsibility,
including President and Chief Operating Officer of Verizon Communications Inc., President and CEO of Verizon Wireless, and Executive Vice President and Chief Operating Officer of Verizon Wireless. Before Verizon Wireless was formed, Mr. McAdam held
executive positions with PrimeCo Personal Communications, AirTouch Communications and Pacific Bell. In the past five years, Mr. McAdam has also served as a member of the Verizon Wireless Board of
Representatives. |
-4-
|
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| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
| Shellye L. Archambeau
Director |
|
US |
|
Ms. Archambeau is Chief Executive Officer of MetricStream, Inc., a leading provider of governance, risk, compliance and quality management solutions to corporations across diverse industries. Prior to joining MetricStream in 2002,
Ms. Archambeau served as Chief Marketing Officer and Executive Vice President of Sales for Loudcloud, Inc., Chief Marketing Officer of NorthPoint Communications, and President of Blockbuster Inc.’s
e-commerce division. Before she joined Blockbuster, she held domestic and international executive positions during a 15-year career at IBM. Ms. Archambeau has served on
the board of Nordstrom, Inc. since February 2015 and, in the past five years, she has served on the board of Arbitron, Inc. |
|
|
|
| Mark T. Bertolini
Director |
|
US |
|
Mr. Bertolini is Chairman and Chief Executive Officer of Aetna Inc., a Fortune 100 diversified healthcare benefits company with $58.0 billion in 2014 revenue. Prior to assuming the role of Aetna’s CEO in 2010 and Chairman in
2011, Mr. Bertolini served as President from 2007, responsible for all of Aetna’s businesses and operations across the company’s range of healthcare products and related services, and as Executive Vice President and head of Aetna’s
regional businesses prior to that. He joined Aetna in 2003 as head of Aetna’s Specialty Products after holding executive positions at Cigna, NYLCare Health Plans and SelectCare, Inc. |
|
|
|
| Richard L. Carrión
Director |
|
US |
|
Mr. Carrión has served for over 19 years as Chairman and Chief Executive Officer of Popular, Inc., a diversified bank holding company, and Banco Popular de Puerto Rico, Popular Inc.’s principal bank subsidiary. Mr.
Carrión has served as a class A director of the Federal Reserve Bank of New York since 2008. He also served as a director of NYNEX Corporation, one of Verizon’s predecessor companies, from 1995 to 1997. |
|
|
|
| Melanie L. Healey
Director |
|
US
Brazil England |
|
Ms. Healey is former Group President and Advisor to the Chairman and Chief Executive Officer of The Procter & Gamble Company, one of the world’s leading providers of branded consumer packaged goods. Prior to assuming that
role, Ms. Healey served as Group President of North America. While at Procter & Gamble, which she joined in 1990, Ms. Healey held a number of positions of responsibility, including Group President, Global Feminine and Health Care, and President,
Global Feminine Care & Adult Care. |
|
|
|
| M. Frances Keeth
Director |
|
US |
|
Ms. Keeth was Executive Vice President of Royal Dutch Shell plc, a global energy company, from 2005 to 2006, and was President and Chief Executive Officer of Shell Chemicals LP from 2001 to 2006. During her long tenure at Royal
Dutch Shell, Ms. Keeth served in a number of other |
-5-
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| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
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|
positions of responsibility, including Executive Vice President, Finance and Business Systems, and Executive Vice President, Customer Fulfillment and Product Business Units. Prior to these positions, Ms. Keeth was controller and
principal accounting officer of Mobil Corporation. Ms. Keeth has served as a director of Arrow Electronics, Inc. since 2004 and, in the past five years, she has served as a director of Peabody Energy Corporation. |
|
|
|
| Donald T. Nicolaisen
Director |
|
US |
|
Mr. Nicolaisen served as Chief Accountant of the United States Securities and Exchange Commission (SEC) from 2003 to 2005. Prior to joining the SEC, he was a senior partner at the accounting firm PricewaterhouseCoopers.
Mr. Nicolaisen began his career at the firm’s predecessor, Price Waterhouse, in 1967, and held a wide range of management and leadership positions, including serving on the firm’s U.S. and global boards and leading Price
Waterhouse’s national office for accounting and SEC services. Since 2006, Mr. Nicolaisen has served as a director of MGIC Investment Corporation, Morgan Stanley, and Zurich Insurance Group. |
|
|
|
| Clarence Otis, Jr.
Director |
|
US |
|
Mr. Otis is the former Chairman and Chief Executive Officer of Darden Restaurants, Inc., the largest company-owned and operated full-service restaurant company in the world. He served as CEO of Darden Restaurants from 2004 to 2014
and as Chairman from 2005 to 2014. While at Darden, which he joined in 1995 as Vice President and Treasurer, Mr. Otis served in a number of positions of responsibility, including Chief Financial Officer, Executive Vice President, and President of
Smokey Bones Barbeque & Grill, a restaurant concept formerly owned and operated by Darden. Since 2010, Mr. Otis has served as a class B director of the Federal Reserve Bank of Atlanta. He has also served as a director of VF Corporation since
2004. |
|
|
|
| Rodney E. Slater
Director |
|
US |
|
Mr. Slater is a Partner at the law firm Squire Patton Boggs LLP, practicing in the areas of transportation, infrastructure and public policy, a position he has held since 2001. Previously, Mr. Slater served as the U.S. Secretary of
Transportation from 1997 to 2001 and as the Administrator of the Federal Highway Administration from 1993 to 1997. Mr. Slater has served as a director of Kansas City Southern since 2001 and Transurban Group since 2009. In the past five years, Mr.
Slater has also served as a director of Delta Air Lines, Inc., ICx Technologies, Inc. and Atkins plc. |
|
|
|
| Kathryn A. Tesija
Director |
|
US |
|
Ms. Tesija is Strategic Advisor of Target Corporation, the second largest discount retailer in the United States. Prior to assuming her current role, Ms. Tesija served as Target’s Executive Vice President and Chief
Merchandising and Supply Chain Officer — a position she held since 2008. She is also a member of Target’s executive committee. Since |
-6-
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| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
|
|
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|
joining Target in 1986, Ms. Tesija has served in numerous positions of responsibility, including Director, Merchandise Planning and Senior Vice President, Hardlines Merchandising. |
|
|
|
| Gregory D. Wasson
Director |
|
US |
|
Mr. Wasson is the former President and Chief Executive Officer of Walgreens Boots Alliance, Inc., the first global pharmacy-led health and wellbeing enterprise. From 2009 through 2014 he was Director, President and Chief Executive
Officer of Walgreen Co. A registered pharmacist, he joined Walgreen in 1980 and served in a number of positions of responsibility, including President of Walgreens Health Initiatives, Senior Vice President, Executive Vice President, and President
and Chief Operating Officer. Mr. Wasson also served as a director of AmerisourceBergen Corporation through January 2015. |
|
|
|
| Gregory G. Weaver
Director |
|
US |
|
Mr. Weaver served as Chairman and Chief Executive Officer of Deloitte’s audit and enterprise risk services firm, Deloitte & Touche LLP, from 2012 to 2014 and from 2001 to 2005. From 2006 to 2012, he served on the Board of
Directors of Deloitte’s U.S. organization and on its Governance, Compensation and Succession Committees. During Mr. Weaver’s 38 years of experience at Deloitte, including 27 years as a partner, he served as lead client service
partner, audit partner and advisory partner for several of Deloitte & Touche’s largest clients. Mr. Weaver has served on the board of trustees of the Goldman Sachs Trust since 2015. |
|
|
|
| Francis J. Shammo
Executive Vice President and Chief Financial Officer |
|
US |
|
Mr. Shammo is Executive Vice President and Chief Financial Officer for Verizon Communications Inc., responsible for Verizon’s finance and strategic planning operations, and financial transaction services. Before being appointed
to his current position, effective November 1, 2010, he was President and Chief Executive Officer of Verizon Telecom and Business. |
|
|
|
| Daniel S. Mead
Executive Vice President and President of Strategic Initiatives |
|
US |
|
Mr. Mead is Executive Vice President and President of Strategic Initiatives for Verizon Communications Inc., with responsibility for directing the transfer of Verizon’s consumer and mass business operations in California,
Florida and Texas to Frontier Communications under a definitive agreement with Frontier to purchase those assets. Before being named to his current position in February 2015, Mr. Mead served for four years as President and Chief Executive Officer of
Verizon Wireless. Prior to that, Mr. Mead served as Chief Operating Officer at Verizon Wireless. When Mr. Mead completes his current assignment, in the first half of 2016, he plans to retire. |
|
|
|
| John G. Stratton
Executive Vice President and President of Operations |
|
US |
|
Mr. Stratton is Executive Vice President and President of Operations for Verizon Communications Inc., with responsibility for overseeing and growing Verizon’s
wireless |
-7-
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| Name |
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Citizenship |
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Present Principal Occupation or Employment |
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and wireline businesses: Verizon Wireless, Consumer and Mass Business, Verizon Enterprise Solutions and Verizon Partner Solutions. Before being named to his current position in February 2015, Mr. Stratton was Executive Vice
President and President – Global Enterprise and Consumer Wireline. Prior to that, Mr. Stratton served as President of Verizon Enterprise Solutions, and before that, he was Executive Vice President and Chief Operating Officer of Verizon
Wireless. |
|
|
|
| Roger Gurnani
Executive Vice President and Chief Information and Technology Architect |
|
US |
|
Mr. Gurnani is Executive Vice President and Chief Information and Technology Architect for Verizon Communications Inc. with responsibility for developing and guiding Verizon’s technology strategy and investments. His role
includes network and technology planning, development of architecture and roadmaps, continued evolution of digital platforms and oversight and direction for the CIO and CTO teams across Verizon. Before being named to his current position in January
2015, Mr. Gurnani was Executive Vice President and Chief Information Officer for Verizon since 2008. |
|
|
|
| Marc C. Reed
Executive Vice President and Chief Administrative Officer |
|
US |
|
Mr. Reed is Executive Vice President and Chief Administrative Officer for Verizon Communications Inc. with responsibility for human resources, real estate, supply chain services, procurement and fleet. Before being named to his
current position in December 2011, Mr. Reed served as Executive Vice President — Human Resources for Verizon where he was responsible for compensation, benefits, labor policy, executive staffing, diversity, safety/environment and
ethics. |
|
|
|
| Diego Scotti
Executive Vice President and Chief Marketing Officer |
|
US Argentina |
|
Mr. Scotti is Executive Vice President and Chief Marketing Officer for Verizon Communications Inc. with responsibility for building and managing the Verizon global brand. Prior to joining Verizon in October 2014, Mr. Scotti served
as the Chief Marketing Officer of J. Crew, and before that he oversaw 20 print and digital media brands at Conde Nast Publications. He also worked as the head of global advertising and brand management at American Express. |
|
|
|
| Craig L. Silliman
Executive Vice President of Public Policy and General Counsel |
|
US |
|
Mr. Silliman is Executive Vice President of Public Policy and General Counsel for Verizon Communications Inc., responsible for leading Verizon’s public policy, legal, regulatory, government affairs and security groups. Before
assuming his current position in January 2015, Mr. Silliman was Senior Vice President for public policy and government affairs, with responsibility for Verizon’s global public policy, federal and state legislative affairs, federal regulatory
affairs, strategic alliances, national security, privacy and corporate citizenship. |
|
|
|
| Anthony T. Skiadas
Senior Vice President and Controller |
|
US |
|
Mr. Skiadas is Senior Vice President and Controller for Verizon Communications Inc. with responsibility for |
-8-
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|
| Name |
|
Citizenship |
|
Present Principal Occupation or Employment |
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|
corporate wide accounting, finance operations, compliance, financial policies and SEC financial reporting. In addition, Mr. Skiadas serves as the principal accounting officer for Verizon. Before being named to his current position
in 2011, Mr. Skiadas was the Senior Vice President and Chief Financial Officer for Verizon Finance Operations. From 2010 through 2011, Mr. Skiadas was Vice President and Chief Financial Officer for Verizon Services Operations. |
|
|
|
| Marni M. Walden
Executive Vice President and President of Product Innovation and New Businesses |
|
US |
|
Ms. Walden is Executive Vice President and President of Product Innovation and New Businesses for Verizon Communications Inc. She is responsible for developing and growing Verizon’s emerging businesses and for overseeing
Verizon’s Strategy Development and Planning Group. Before being named to her current position in February 2015, Ms. Walden was Executive Vice President and President — Product and New Business Innovation for Verizon. Prior to that, Ms.
Walden served as Executive Vice President and Chief Operating Officer for Verizon Wireless. |
-9-
Manually signed facsimiles of the Letter of Transmittal, properly completed, will be accepted.
The Letter of Transmittal and certificates evidencing Shares and any other required documents should be sent or delivered by each stockholder or its, 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:
|
|
|
| If delivering by mail: |
|
If delivering by hand, express mail, courier
or any other expedited service:
|
|
|
| American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, NY 10272-2042 |
|
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, NY 11219 |
Questions and requests for assistance may be directed to the Information Agent at its address and telephone
numbers set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and Notice of Guaranteed Delivery may be directed to the Information Agent. Such copies will be furnished promptly at Purchaser’s
expense. Stockholders may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information
Agent or the Depositary) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders
may call toll free: (877) 825-8964
Banks and Brokers may call collect: (212) 750-5833
Exhibit (a)(1)(B)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
MILLENNIAL MEDIA,
INC.
at
$1.75
Net Per Share
Pursuant to the Offer to Purchase
dated September 18, 2015
by
MARS ACQUISITION SUB,
INC.
a wholly owned direct subsidiary
of
AOL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON OCTOBER
16, 2015, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE”).
The Depositary for the Offer is:
|
|
|
| If delivering by mail:
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, NY 10272-2042 |
|
If delivering by hand, express mail, courier or any other expedited service:
American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, NY 11219 |
|
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|
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| DESCRIPTION OF SHARES TENDERED |
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as name(s) appear(s)
on
certificate(s)) (Attach additional signed list if necessary) |
|
Shares Tendered |
| |
|
Certificate
Number(s) |
|
Total Number of
Shares Represented
by
Certificate(s)(*) |
|
Total Number of
Shares
Tendered(**) |
| |
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Total Shares |
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(*) Certificate numbers are not required if tender is being made by book-entry transfer.
(**) Unless a lower number of Shares to be tendered is otherwise indicated, it will be assumed that all
Shares described above are being tendered. See Instruction 4. |
Delivery of this Letter of Transmittal to an address other than as set forth above will not
constitute a valid delivery to the Depositary (as defined below). You must sign this Letter of Transmittal in the appropriate space provided therefor below, with signature guaranteed, if required, and complete the IRS Form W-9 included in this
Letter of Transmittal, if required. The instructions set forth in this Letter of Transmittal should be read carefully before you tender any of your Shares (as defined below) into the Offer (as defined below).
The Offer is not being made to (and no tenders will be accepted from or on behalf of) holders of Shares in any state in which the making of
the Offer or acceptance thereof would not be in compliance with the securities, “blue sky” or other laws of such state.
This
Letter of Transmittal is to be used by stockholders of Millennial Media, Inc. (“Millennial Media”), if certificates for Shares (the “Share Certificates”) are to be forwarded herewith or, unless an Agent’s Message (as defined
in Section 2 of the Offer to Purchase) is utilized, if delivery of Shares is to be made by book-entry transfer to an account maintained by the Depositary at The Depository Trust Company (“DTC”) (as defined in Section 2 of the
Offer to Purchase and pursuant to the procedures set forth in Section 3 thereof).
Stockholders whose Share Certificates are
not immediately available, or who cannot complete the procedure for book-entry transfer on a timely basis, or who cannot deliver all other required documents to the Depositary prior to the Expiration Date, must tender their Shares according to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase in order to participate in the Offer. See Instruction 2. Delivery of documents to DTC does not constitute delivery to the Depositary.
| ¨ |
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN DTC MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER): |
|
|
|
| Name of Tendering Institution: |
|
|
2
| ¨ |
CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: |
|
|
|
| Name(s) of Tendering Stockholder(s): |
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| Window Ticket Number (if any): |
|
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| Date of Execution of Notice of Guaranteed Delivery: |
|
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| Name of Eligible Institution that Guaranteed Delivery: |
|
|
Additional Information if Shares Have Been Lost
If Share Certificates you are tendering with this Letter of Transmittal have been lost, stolen, destroyed or mutilated, you should
contact American Stock Transfer & Trust Company, LLC, as Millennial Media’s transfer agent (the “Transfer Agent”), toll free at (877) 248-6417 regarding the requirements for replacement. You may be required to post a
bond to secure against the risk that the Share Certificates may be subsequently recirculated. You are urged to contact the Transfer Agent immediately in order to receive further instructions, for a determination of whether you will need to post a
bond and to permit timely processing of this documentation. See Instruction 11.
| ¨ |
CHECK HERE IF YOU HAVE LOST YOUR SHARE CERTIFICATE(S) AND REQUIRE ASSISTANCE IN OBTAINING REPLACEMENT CERTIFICATE(S). BY CHECKING THIS BOX, YOU UNDERSTAND THAT YOU MUST CONTACT AMERICAN STOCK TRANSFER & TRUST
COMPANY, LLC TO OBTAIN INSTRUCTIONS FOR REPLACING LOST CERTIFICATES. SEE INSTRUCTION 11. |
NOTE: SIGNATURES MUST BE
PROVIDED BELOW. PLEASE READ ACCOMPANYING
INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby
tenders to Mars Acquisition Sub, Inc., a Delaware corporation (“Purchaser”), the above described shares of common stock, par value $0.001 per share (the “Shares”), of Millennial Media, Inc., a Delaware corporation
(“Millennial Media”), pursuant to Purchaser’s offer to purchase all of the outstanding Shares, at a purchase price of $1.75 per Share (the “Offer Price”), net to the seller in cash, without interest thereon and less any
applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 18, 2015 (the “Offer to Purchase”), and in this Letter of Transmittal (the “Letter of
Transmittal” which, together with the Offer to Purchase and other related materials, as each may be amended and supplemented from time to time, constitutes the “Offer”), receipt of which is hereby acknowledged.
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 effective upon acceptance for payment of the Shares validly tendered herewith and not properly withdrawn prior to the Expiration Date (as defined in the Introduction to the Offer to Purchase) 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 of the Shares that are being tendered hereby (and any and all dividends, distributions, rights, other Shares or
other securities issued or issuable in respect thereof on or after the date hereof (collectively, “Distributions”)) and irrevocably constitutes and appoints American Stock Transfer & Trust Company, LLC (the “Depositary”)
the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest
in the Shares tendered
3
by this Letter of Transmittal), to (i) deliver Share Certificates for such Shares (and any and all Distributions) or transfer ownership of such Shares (and any and all Distributions) on the
account books maintained by DTC, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares (and any and all Distributions) for transfer on the books of
Millennial Media and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any 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 Julie Jacobs and Holly Hess, and each of them and any
other designees of Purchaser the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, (i) to vote at any annual or special meeting of Millennial Media’s stockholders or any adjournment or postponement
thereof or otherwise in such manner as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper, (ii) to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper and (iii) to otherwise act as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole
discretion deem proper, in each case, with respect to all of the Shares (and any and all Distributions) tendered hereby and accepted for payment by Purchaser. This appointment will be effective if and when, and only to the extent that, Purchaser
accepts such Shares for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Such acceptance for
payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such Shares (and any and all Distributions), and no subsequent powers of attorney, proxies, consents or
revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon Purchaser’s
acceptance for payment of such Shares, Purchaser or its designees must be able to exercise full voting, consent and other rights with respect to such Shares (and any and all Distributions), including voting at any meeting of Millennial Media’s
stockholders.
The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign
and transfer any and all of the Shares tendered hereby (and any and all Distributions) and that, when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title to such Shares (and such
Distributions), free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or
Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any 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 any and all of the 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 the 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 shall survive the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the
Offer to Purchase, this tender is irrevocable.
The undersigned hereby acknowledges that delivery of any Share Certificate shall be
effected, and risk of loss and title to such Share Certificate shall pass, only upon actual receipt of such Share Certificate to the Depositary.
Unless otherwise indicated under “Special Payment Instructions,” please issue the check for the purchase price of all of the Shares
purchased and, if appropriate, return any Share Certificates evidencing Shares not
4
tendered or not accepted for payment in the name(s) of the registered holder(s) appearing above under
“Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” please mail the check for the purchase price of all of the Shares purchased and, if appropriate, return any Share
Certificates evidencing Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under “Description of Shares Tendered.” In the event
that the boxes entitled “Special Payment Instructions” and “Special Delivery Instructions” are both completed, please issue the check for the purchase price of all Shares purchased and, if appropriate, return any Share
Certificates evidencing Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and, if appropriate, return any such certificates (and any accompanying documents, as
appropriate) to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled “Special Payment Instructions,” please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by
crediting the account at DTC 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 thereof if Purchaser
does not accept for payment any of the Shares so tendered.
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SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) |
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To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or certificates for Shares not tendered or not accepted are to be
issued in the name of someone other than the undersigned. |
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certificates to: |
| Name: |
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(Taxpayer Identification or Social Security No.) |
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(Also Complete, as appropriate, IRS Form W-9 Included Below)
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SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7) |
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To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or Share Certificates evidencing Shares not tendered or not
accepted are to be mailed to someone other than the undersigned or to the undersigned at an address other than that shown above. |
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Share Certificates to: |
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(Include Zip Code)
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IMPORTANT
STOCKHOLDER: SIGN HERE
(U.S. Holders: Please complete and return the IRS Form W-9 included below)
(Non-U.S. Holders: Please obtain, complete and return appropriate IRS Form W-8)
(Signature(s) of
Holder(s) of Shares)
(Please Print)
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| Capacity (full title) (See Instruction 5): |
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(Include Zip Code)
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| Area Code and Telephone No.: |
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| Tax Identification or Social Security No. (See IRS Form W-9 included below): |
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(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or 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,
agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.)
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal (i) if this Letter of Transmittal is
signed by the registered holder(s) (which term, for purposes of this Instruction, includes any participant in DTC’s systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered herewith, unless such
registered holder has completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on this Letter of Transmittal or (ii) if such Shares are tendered for the account of
a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of the Securities Transfer Agents Medallion Program or any other “eligible guarantor
institution,” as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each, an “Eligible Institution”). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instruction 5.
2. Requirements of Tender. No alternative, conditional or contingent tenders will be
accepted. In order for Shares to be validly tendered pursuant to the Offer, one of the following procedures must be followed:
For Shares
held as physical certificates, the Share Certificates representing tendered Shares, a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal before the Expiration Date (unless the tender is made during a subsequent offering period, if one is provided, in which
case the Share Certificates representing Shares, this Letter of Transmittal and other documents must be received before the expiration of the subsequent offering period).
For Shares held in book-entry form, either a properly completed and duly executed Letter of Transmittal, together with any required signature
guarantees, or an Agent’s Message in lieu of this Letter of Transmittal, and any other required documents, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal, and such Shares
must be delivered according to the book-entry transfer procedures (as set forth in Section 3 of the Offer to Purchase) and a timely confirmation of a book-entry transfer of Shares into the Depositary’s account at DTC (a “Book-Entry
Confirmation”) must be received by the Depositary, in each case before the Expiration Date (unless the tender is made during a subsequent offering period, if one is provided, in which case this Letter of Transmittal or an Agent’s Message
in lieu of this Letter of Transmittal, and other documents must be received before the expiration of the subsequent offering period).
Stockholders whose Share Certificates are not immediately available, or who cannot complete the procedure for delivery by book-entry transfer
on a timely basis or who cannot deliver all other required documents to the Depositary prior to the Expiration Date, may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedure set forth 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 (a “Notice of Guaranteed Delivery”), substantially in the form made available by Purchaser, must be received by the Depositary (as provided below) prior to the Expiration Date and (iii) Share Certificates (or a Book-Entry
Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with this Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees (or, in the case of book-entry
transfer of Shares, either this Letter of Transmittal or an Agent’s Message in lieu of this Letter of Transmittal), and any other documents required by this Letter of Transmittal, must be received by the Depositary within three (3) New
York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery. A Notice of Guaranteed Delivery may be transmitted by overnight courier or mail 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. In the case of Shares held through DTC, the Notice of Guaranteed Delivery must be delivered to the Depositary by a participant by means of
the confirmation system of DTC.
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The term “Agent’s Message” means a message, transmitted by DTC to and received by
the Depositary and forming a part of a Book-Entry Confirmation, that states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that are the subject of such Book-Entry Confirmation and agrees to be bound
by the terms of this Letter of Transmittal and that Purchaser may enforce such agreement against such participant.
The method of
delivery of Share Certificates, this Letter of Transmittal and all other required documents, including delivery through DTC, is at the election and risk of the tendering stockholder, and the delivery of all such documents will be deemed made (and
the risk of loss and the title of Share Certificates will pass) only when actually received by the Depositary (including, in the case of a book-entry transfer, receipt of a Book-Entry Confirmation). 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 by the Expiration Date.
No fractional Shares will be purchased. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any
notice of the acceptance for payment of Shares.
3. Inadequate Space. If the space provided herein is inadequate, the Share
Certificate numbers and/or the number of Shares tendered should be listed on a separate signed schedule attached hereto.
4. Partial
Tenders (Not Applicable to Stockholders who Tender by Book-Entry Transfer). If fewer than all the Shares represented by any Share Certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered
in the box entitled “Total Number of Shares Tendered”. In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise
provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented 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.
(a) Exact Signatures. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the
signature(s) must correspond with the name(s) as written on the face of the Share Certificates without alteration, enlargement or any change whatsoever.
(b) Joint Holders. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this
Letter of Transmittal.
(c) Different Names on Certificates. If any of the Shares tendered hereby are registered in different names
on different Share Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Share Certificates.
(d) Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of
Share Certificates or separate stock powers are required unless payment of the purchase price is to be made, or Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any
such Share Certificates or stock powers must be guaranteed by an Eligible Institution.
(e) Stock Powers. If this Letter of
Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, Share Certificates must be endorsed or accompanied by duly executed stock powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on the Share Certificates for such Shares. Signature(s) on any such Share Certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1.
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(f) Evidence of Fiduciary or Representative Capacity. 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 legal entity or other person acting in a fiduciary or representative capacity, such person should so
indicate when signing, and proper evidence satisfactory to the Depositary of the authority of such person so to act must be submitted.
6.
Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, Purchaser or any successor entity thereto will pay all stock transfer taxes with respect to the transfer and sale of any Shares to it or its order pursuant to the Offer
(for the avoidance of doubt, transfer taxes do not include United States federal income taxes or backup withholding taxes). If, however, payment of the purchase price is to be made to, or if Share Certificate(s) for Shares not tendered or not
accepted for payment are to be registered in the name of, any person(s) other than the registered holder(s), or if tendered Share Certificate(s) are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal,
the amount of any stock transfer taxes or other taxes required by reason of the payment to a person other than the registered holder of such Shares (whether imposed on the registered holder(s) or such other person(s)) payable on account of the
transfer to such other person(s) 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 Certificate(s)
evidencing the Shares tendered hereby.
7. Special Payment and Delivery Instructions. If a check is to be issued for the purchase
price of any Shares tendered by this Letter of Transmittal in the name of, and, if appropriate, Share Certificates for Shares not tendered or not accepted for payment are to be issued or returned to, any person(s) other than the signer of this
Letter of Transmittal or if a check and, if appropriate, such Share Certificates are to be returned to any person(s) other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal,
the appropriate boxes on this Letter of Transmittal must be completed.
8. Form W-9. To avoid backup withholding, a tendering
stockholder that is a United States person (as defined for United States federal income tax purposes) is required to provide the Depositary with a correct Taxpayer Identification Number (“TIN”) on Internal Revenue Service (“IRS”)
Form W-9, which is included herein following “Important Tax Information” below, and to certify, under penalties of perjury, that such number is correct and that such stockholder is not subject to backup withholding of federal income tax,
and that such stockholder is a United States person (as defined for United States federal income tax purposes). If the tendering stockholder has been notified by the IRS that such stockholder is subject to backup withholding, such stockholder must
cross out item (2) of the Certification section of the IRS Form W-9, unless such stockholder has since been notified by the IRS that such stockholder is no longer subject to backup withholding. Failure to provide the information on the IRS Form
W-9 may subject the tendering stockholder to backup 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 for the TIN on the IRS Form W-9, sign and date the IRS Form W-9 and sign and date the Certificate of Awaiting Taxpayer Identification Number under
“Important Tax Information” below. If you write “Applied For” in the space for the TIN and the Depositary is not provided with a TIN by the time of payment, the Depositary will withhold a portion of all payments of the purchase
price to such stockholder until a TIN is provided to the Depositary.
Certain stockholders (including, among others, corporations and
certain foreign persons) may not be subject to backup withholding. Foreign stockholders that are not a United States persons (as defined for United States federal income tax purposes) should submit an appropriate and properly completed applicable
IRS Form W-8, a copy of which may be obtained from the Depositary or from the IRS website at http://www.irs.gov/uac/Form-W-8,-Certificate-of-Foreign-Status, in order to avoid backup withholding. Such stockholders should consult a tax advisor to
determine which IRS Form W-8 is appropriate. Exempt stockholders, other than foreign stockholders,
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should furnish their TIN, enter the applicable exempt payee code on the IRS Form W-9 and sign, date and return the Form W-9 to the Depositary in order to avoid erroneous backup withholding.
See the instructions enclosed with the IRS Form W-9 included in this Letter of Transmittal for more instructions.
9. Irregularities. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any
tender of Shares, subject to applicable law as applied by a court of competent jurisdiction, 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 us not to be in proper form or the acceptance for payment of which may, in our opinion, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of
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
waived or cured within such time as Purchaser shall determine. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defects or irregularities in tenders or incur any liability for
failure to give any such notice. Subject to applicable law as applied by a court of competent jurisdiction and the terms of the Merger Agreement, Purchaser’s interpretation of this Letter of Transmittal and the instructions thereto will be
final and binding.
10. Requests for Additional Copies. The Information Agent may be contacted at the address and telephone number
set forth on the last page of this Letter of Transmittal for questions and/or requests for additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials. You may also
contact your broker, dealer, commercial bank, trust company or other nominee for assistance. Such copies will be furnished promptly at Purchaser’s expense.
11. Lost, Stolen Destroyed or Mutilated Certificates. If any Share Certificate has been lost, stolen, destroyed or mutilated, the
stockholder should promptly notify the Transfer Agent toll free at (877) 248-6417. The stockholder will then be instructed as to the steps that must be taken in order to replace such Share Certificate(s). This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost, stolen, destroyed or mutilated Share Certificates have been followed.
Share Certificates evidencing tendered Shares, or a Book-Entry Confirmation into the Depositary’s account at DTC, as well as this
Letter of Transmittal, properly completed and duly executed, with any required signature guarantees, or an Agent’s Message (if utilized in lieu of this Letter of Transmittal in connection with a book-entry transfer), and any other documents
required by this Letter of Transmittal, must be received before the Expiration Date, or the tendering stockholder must comply with the procedures for guaranteed delivery.
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IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder who is a U.S. person (as defined for U.S. federal income tax purposes) surrendering Shares must,
unless an exemption applies, provide the Depositary (as payer) with the stockholder’s correct TIN on the IRS Form W-9 included in this Letter of Transmittal. If the stockholder is an individual, the stockholder’s TIN is such
stockholder’s Social Security number. If the correct TIN is not provided, the stockholder may be subject to a penalty imposed by the IRS and payments of cash to the stockholder (or other payee) pursuant to the Offer may be subject to backup
withholding of a portion of all payments of the purchase price.
Certain stockholders (including, among others, corporations and certain
foreign persons) may not be subject to backup withholding and reporting requirements. In order for a stockholder that is not a United States person (as defined for United States federal income tax purposes) to avoid backup withholding, such person
should complete, sign and submit an appropriate IRS Form W-8 signed under penalties of perjury, attesting to his or her exempt status. An IRS Form W-8 can be obtained from the Depositary or from the IRS website at
http://www.irs.gov/uac/Form-W-8,-Certificate-of-Foreign-Status. Such stockholders should consult a tax advisor to determine which IRS Form W-8 is appropriate. Exempt stockholders, other than foreign stockholders, should furnish their TIN, enter the
applicable exempt payee code on the IRS Form W-9 and sign, date and return the Form W-9 to the Depositary in order to avoid erroneous backup withholding. See the enclosed IRS Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold and pay over to the IRS a portion of any payment made to a 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 backup withholding results in an overpayment of taxes, a refund may be
obtained from the IRS if eligibility is established and appropriate procedure is followed.
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| Form W-9
(Rev. December 2014) Department of the Treasury
Internal Revenue Service |
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Request for Taxpayer
Identification Number and Certification |
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Give Form to the
requester. Do not
send to the IRS. |
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| Print or type
See Specific Instructions
on page 2. |
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1 Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.
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2 Business name/disregarded entity name, if different from above
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3 Check appropriate box for federal tax classification; check only one of the following seven boxes: |
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4 Exemptions (codes apply only to
certain entities, not individuals; see instructions
on page 3):
Exempt payee code (if any)
Exemption from FATCA reporting
code (if any)
(Applies to accounts maintained outside the
U.S.) |
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¨ Individual/sole proprietor or
single-member LLC |
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C Corporation |
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S Corporation |
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Partnership |
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Trust/estate |
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¨ Limited liability company.
Enter the tax
classification (C=C corporation, S=S corporation P=partnership) u
Note. For a single-member LLC that is disregarded, do not check LLC; check the appropriate box
in
the line above for the tax classification of the single-member owner.
¨ Other (see instructions) u |
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5 Address (number, street, and apt. or suite no.) |
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Requester’s name and address (optional) |
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6 City, state, and ZIP code
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7 List account number(s) here (optional) |
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Taxpayer Identification Number (TIN) |
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| Enter your TIN in the appropriate box. The TIN provided must
match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other
entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3.
Note. If the account is in more than one name, see the instructions for line 1 and the chart on page 4 for guidelines on whose number to enter. |
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Social security number |
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or |
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Employer Identification Number |
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Under penalties of perjury, I certify that:
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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 |
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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 (IRS) that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
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I am a U.S. citizen or other U.S. person (defined below); and |
The FATCA code(s) entered on this form (if any)
indicating that I am exempt from FATCA reporting is correct.
Certification 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 you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or
abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your
correct TIN. See the instructions on page 3.
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Sign
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Signature of
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General Instructions
Section references are to the Internal Revenue Code unless otherwise noted.
Future developments. Information about developments affecting Form W-9 (such as legislation enacted after we release it) is at
www.irs.gov/fw9.
Purpose of Form
An
individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification
number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns
include, but are not limited to, the following:
● Form 1099-INT (interest earned or paid)
● Form 1099-DIV (dividends, including those from stocks or mutual funds)
● Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
● Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
● Form 1099-S (proceeds from real estate transactions)
● Form 1099-K (merchant card and third party network transactions)
● Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)
● Form 1099-C (canceled debt)
● Form 1099-A
(acquisition or abandonment of secured property)
Use Form W-9 only if you are a U.S. person (including a resident alien), to provide
your correct TIN.
If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What
is backup withholding? on page 2.
By signing the filled-out form, you:
1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),
2. Certify that you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person,
your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income, and
4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See
What is FATCA reporting? on page 2 for further information.
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Cat. No. 10231X |
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Form W-9 (Rev.
12-2014) |
Note. If you are a U.S. person and a requester gives you a form other than Form W-9 to request your
TIN, you must use the requester’s form if it is substantially similar to this Form W-9.
Definition of a U.S.
person. For federal tax purposes, you are considered a U.S. person if you are:
● An individual who is a U.S. citizen or U.S. resident
alien,
● A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States,
● An estate (other than a foreign estate), or
● A
domestic trust (as defined in Regulations section 301.7701-7).
Special rules for partnerships. Partnerships that
conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners’ share of effectively connected taxable income from such business. Further, in certain cases where a
Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership
conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income.
In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding
withholding on its allocable share of net income from the partnership conducting a trade or business in the United States:
● In the case of a
disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity;
● In the case of a grantor trust with a U.S.
grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and
● In the case of a U.S.
trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.
Foreign
person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Publication 515,
Withholding of Tax on Nonresident Aliens and Foreign Entities).
Nonresident alien who becomes a
resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a
“saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.
If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S.
tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items:
1. The treaty country.
Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.
2. The treaty article addressing
the income.
3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.
4. The type and amount of income that qualifies for the exemption from tax.
5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.
Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received
by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to
the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2
of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.
If you are a nonresident alien or a foreign entity, give the requester the appropriate completed
Form W-8 or Form 8233.
Backup Withholding
What
is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 28% of such payments. This is called “backup withholding.” Payments that may be
subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain
payments from fishing boat operators. Real estate transactions are not subject to backup withholding.
You will not be subject to backup
withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.
Payments you receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester,
2. You do not certify your TIN when required (see the Part II instructions on page 3 for details),
3. The IRS tells the requester that you furnished an incorrect TIN,
4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return
(for reportable interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup withholding
under 4 above (for reportable interest and dividend accounts opened after 1983 only).
Certain payees and payments are exempt from backup
withholding. See Exempt payee code on page 3 and the separate Instructions for the Requester of Form W-9 for more information.
Also see Special rules for partnerships above.
What is FATCA reporting?
The Foreign Account Tax
Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from
FATCA reporting code on page 3 and the Instructions for the Requester of Form W-9 for more information.
Updating Your Information
You must provide updated
information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are
a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account, for example, if the grantor of a grantor trust dies.
Penalties
Failure to
furnish TIN. If you fail to furnish your correct TIN to a requester, 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.
Civil penalty for false information with respect to withholding.
If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.
Criminal
penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.
Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.
Specific Instructions
Line 1
You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return.
If this Form W-9 is for a joint account, list first, and then circle, the name of the person or entity whose number you entered in Part I of
Form W-9.
a. Individual. Generally, enter the name shown on your tax return. If you have changed your last name without
informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.
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Cat. No. 10231X |
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Form W-9 (Rev.
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Note. ITIN applicant: Enter your individual name as it was entered on
your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application.
b. Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ
on line 1. You may enter your business, trade, or “doing business as” (DBA) name on line 2.
c. Partnership,
LLC that is not a single-member LLC, C Corporation, or S Corporation. Enter the entity’s name as shown on the entity’s tax return
on line 1 and any business, trade, or DBA name on line 2.
d. Other entities. Enter your name as shown on required U.S.
federal tax documents on line 1. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.
e. Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is
treated as a “disregarded entity.” See Regulations section 301.7701-2(c)(2)(iii). Enter the owner’s name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name
shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner’s name is
required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity’s name on line 2, “Business
name/disregarded entity name.” If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.
Line 2
If you have a business name, trade name, DBA name,
or disregarded entity name, you may enter it on line 2.
Line 3
Check the appropriate box in line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box in line 3.
Limited Liability Company (LLC). If the name on line 1 is an LLC treated as a partnership for U.S.
federal tax purposes, check the “Limited Liability Company” box and enter “P” in the space provided. If the LLC has filed Form 8832 or 2553 to be taxed as a corporation, check the “Limited Liability Company” box and in
the space provided enter “C” for C corporation or “S” for S corporation. If it is a single-member LLC that is a disregarded entity, do not check the “Limited Liability Company” box; instead check the first box in line 3
“Individual/sole proprietor or single-member LLC.”
Line 4, Exemptions
If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space in line 4 any code(s) that may apply to you.
Exempt payee code.
● Generally, individuals
(including sole proprietors) are not exempt from backup withholding.
● Except as provided below, corporations are exempt from backup withholding for
certain payments, including interest and dividends.
● Corporations are not exempt from backup withholding for payments made in settlement of payment
card or third party network transactions.
● Corporations are not exempt from backup withholding with respect to attorneys’ fees or gross
proceeds paid to attorneys, and corporations that provide medical or health care services are not exempt with respect to payments reportable on Form 1099-MISC.
The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.
1—An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies
the requirements of section 401(f)(2)
2—The United States or any of its agencies or instrumentalities
3—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
4—A foreign government or any of its political subdivisions, agencies, or instrumentalities
5—A corporation
6—A
dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession
7—A futures commission merchant registered with the Commodity Futures Trading Commission
8—A real estate investment trust
9—An entity registered at all times during the tax year under the Investment Company Act of 1940
10—A common trust fund operated by a bank under section 584(a)
11—A financial institution
12—A middleman known in the investment community as a nominee or custodian
13—A trust exempt from tax under section 664 or described in section 4947
The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1
through 13.
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| IF the payment is for . . . |
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THEN the payment is exempt
for . . . |
| Interest and dividend payments |
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All exempt payees except for 7 |
| Broker transactions |
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Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities
acquired prior to 2012. |
| Barter exchange transactions and patronage dividends |
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Exempt payees 1 through 4 |
| Payments over $600 required to be reported and direct sales over $5,0001 |
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Generally, exempt payees
1 through 52 |
| Payments made in settlement of payment card or third party network transactions |
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Exempt payees 1 through 4 |
| 1 |
See Form 1099-MISC, Miscellaneous Income, and its instructions. |
| 2 |
However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney
reportable under section 6045(f), and payments for services paid by a federal executive agency. |
Exemption from FATCA
reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign
financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is
subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA exemption code.
A—An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)
B—The United States or any of its agencies or instrumentalities
C—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities
D—A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section
1.1472-1(c)(1)(i)
E—A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations
section 1.1472-1(c)(1)(i)
F—A dealer in securities, commodities, or derivative financial
instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state
G—A real estate investment trust
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Cat. No. 10231X |
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Form W-9 (Rev.
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H—A regulated investment company as defined in section 851 or an entity registered at all
times during the tax year under the Investment Company Act of 1940
I—A common trust fund as defined in section 584(a)
J—A bank as defined in section 581
K—A broker
L—A trust
exempt from tax under section 664 or described in section 4947(a)(1)
M—A tax exempt trust under a section 403(b) plan or section
457(g) plan
Note. You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or
exempt payee code should be completed.
Line 5
Enter
your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns.
Line 6
Enter your city, state, and ZIP code.
Part I.
Taxpayer Identification Number (TIN)
Enter your TIN in the appropriate box. If you are a
resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. However, the IRS prefers that you use your SSN.
If you are a single-member LLC that is disregarded as an entity separate from its owner (see Limited Liability Company
(LLC) on this page), enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.
Note. See the chart on page 4 for further clarification of name and TIN combinations.
How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an
SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.ssa.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer
Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer
Identification Number (EIN) under Starting a Business. You can get Forms W-7 and SS-4 from the IRS by visiting IRS.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write “Applied For” in the space for the TIN, sign
and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are
subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.
Note. Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon.
Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.
Part II. Certification
To establish to the withholding
agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if items 1, 4, or 5 below indicate otherwise.
For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person
identified on line 1 must sign. Exempt payees, see Exempt payee code earlier.
Signature requirements. Complete the certification as
indicated in items 1 through 5 below.
1. Interest, dividend, and barter exchange accounts
opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.
2. Interest, dividend, broker, and barter exchange accounts opened after
1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely
providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.
3. Real
estate transactions. You must sign the certification. You may cross out item 2 of the certification.
4. Other
payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the
requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment
card and third party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).
5. Mortgage interest paid by you, acquisition or abandonment of secured
property, cancellation of debt, qualified tuition program payments (under section 529), IRA, Coverdell ESA, Archer
MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.
What Name and Number To Give the Requester
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| For this type of account: |
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Give name and SSN of: |
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1. |
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Individual |
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The individual |
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2. |
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Two or more individuals (joint account) |
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The actual owner of the account or, if combined funds, the first individual on the account 1 |
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3. |
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Custodian account of a minor (Uniform Gift to Minors Act) |
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The minor 2 |
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4. |
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a. The usual revocable savings trust (grantor is also trustee) |
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The grantor-trustee 1 |
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b. So-called trust account that is not a legal or valid trust under state
law |
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The actual owner 1 |
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5. |
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Sole proprietorship or disregarded entity owned by an individual |
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The owner 3 |
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6. |
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Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulation section 1.671-4(b)(2)(i)(A)) |
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The grantor * |
| For this type of account: |
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Give name and EIN of: |
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7. |
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Disregarded entity not owned by an individual |
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The owner |
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8. |
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A valid trust, estate, or pension trust |
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Legal entity 4 |
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9. |
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Corporation or LLC electing corporate status on Form 8832 or Form 2553 |
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The corporation |
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10. |
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Association, club, religious, charitable, educational, or other tax-exempt organization |
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The organization |
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11. |
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Partnership or multi-member LLC |
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The partnership |
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12. |
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A broker or registered nominee |
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The broker or nominee |
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13. |
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Account with the 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 |
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The public entity |
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Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulation section 1.671-4(b)(2)(i)(B)) |
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The trust |
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Cat. No. 10231X |
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Form W-9 (Rev.
12-2014) |
| 1 |
List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.
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| 2 |
Circle the minor’s name and furnish the minor’s SSN. |
| 3 |
You must show your individual name and you may also enter your business or “DBA” name on the “Business name/disregarded entity” name line. You may
use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN. |
| 4 |
List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity
itself is not designated in the account title.) Also see Special rules for partnerships on page 2. |
| * |
Note. Grantor also must provide a Form W-9 to trustee of trust. |
Note. If no name is
circled when more than one name is listed, the number will be considered to be that of the first name listed.
Secure Your Tax Records from Identity
Theft
Identity theft occurs when someone uses your personal information such as your name, social security number (SSN), or other identifying
information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.
To reduce your risk:
● Protect your SSN,
● Ensure your employer is protecting your SSN, and
● Be careful when choosing a tax preparer.
If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number
printed on the IRS notice or letter.
If your tax records are not currently affected by identity theft but you think you are at risk due to
a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.
For more information, see Publication 4535, Identity Theft Prevention and Victim Assistance.
Victims of identity theft who are experiencing economic harm or a system problem, or are seeking help in resolving tax problems that have not
been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.
Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business
emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.
The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask
taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.
If
you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration at
1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at: spam@uce.gov or contact them at www.ftc.gov/idtheft or 1-877-IDTHEFT (1-877-438-4338).
Visit IRS.gov to learn more about identity theft and how to reduce your risk.
Privacy Act Notice
Section 6109 of the Internal Revenue
Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the
acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting
the above information. Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering
their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your
TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties
may also apply for providing false or fraudulent information.
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Cat. No. 10231X |
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Form W-9 (Rev.
12-2014) |
The Depositary for the Offer is:
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| If delivering by mail: |
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If delivering by hand, express mail, courier
or any other expedited service: |
| American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department P.O. Box 2042
New York, NY 10272-2042 |
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American Stock Transfer & Trust Company, LLC
Operations Center Attn:
Reorganization Department 6201 15th Avenue
Brooklyn, NY 11219 |
Questions and requests for assistance may be directed to the Information Agent at its address and telephone
numbers set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and Notice of Guaranteed Delivery may be directed to the Information Agent. Such copies will be furnished promptly at Purchaser’s
expense. Stockholders may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information
Agent or the Depositary) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders
may call toll free: (877) 825-8964
Banks and Brokers may call collect: (212) 750-5833
Exhibit (a)(1)(C)
NOTICE OF GUARANTEED DELIVERY
For Tender of Shares of Common Stock
of
MILLENNIAL MEDIA,
INC.
at
$1.75
Net Per Share
Pursuant to the Offer to Purchase
dated September 18, 2015
by
MARS ACQUISITION SUB,
INC.
a wholly owned direct subsidiary
of
AOL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON OCTOBER
16, 2015, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE”).
This
Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates representing shares of common stock, par value $0.001 per share (the “Shares”), of
Millennial Media, Inc., a Delaware corporation (“Millennial Media”), are not immediately available, (ii) the procedure for book-entry transfer cannot be completed prior to the Expiration Date or (iii) time will not permit all
required documents to reach American Stock Transfer & Trust Company, LLC (the “Depositary”) prior to the Expiration Date. This Notice of Guaranteed Delivery may be delivered by overnight courier or mailed to the Depositary. See
Section 3 of the Offer to Purchase (as defined below).
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| If delivering by mail: |
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If delivering by hand, express mail, courier
or any other expedited service: |
| American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
P.O. Box 2042 New York, NY
10272-2042 |
|
American Stock Transfer & Trust Company, LLC
Operations Center
Attn: Reorganization Department
6201 15th Avenue Brooklyn, NY
11219 By Facsimile Transmission:
For Eligible Institutions Only:
(718) 234-5001
For Confirmation Only:
(718) 921-8317 |
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY 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 (AS DEFINED IN SECTION 3 OF THE OFFER TO PURCHASE) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE
BOX ON THE APPROPRIATE LETTER OF TRANSMITTAL.
The Eligible Institution that completes this Notice of Guaranteed Delivery must communicate
the guarantee to the Depositary and must deliver the Letter of Transmittal (as defined below) or an Agent’s Message (as defined in Section 2 of the Offer to Purchase) and certificates for Shares (or Book-Entry Confirmation, as defined in
Section 2 of the Offer to Purchase) to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.
Ladies and Gentlemen:
The undersigned hereby
tenders to Mars Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of AOL Inc., a Delaware corporation, upon the terms and subject to the conditions set forth in the offer to purchase, dated September 18, 2015 (as it
may be amended or supplemented from time to time, the “Offer to Purchase”), and the related letter of transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer
to Purchase and other related materials, the “Offer”), receipt of which is hereby acknowledged, the number of Shares of Millennial Media specified below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase.
Number of Shares and Certificate No(s)
(if available)
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| ¨ Check here if Shares will be tendered by book-entry transfer. |
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| Name of Tendering Institution: |
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| Name(s) of Record Holder(s): |
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(Daytime telephone number) |
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| Notice of Guaranteed Delivery |
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2
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution, hereby (i) represents that the tender of Shares effected hereby complies with Rule 14e-4 under
the U.S. Securities Exchange Act of 1934, as amended, and (ii) within three New York Stock Exchange trading days of the date hereof, (A) guarantees delivery to the Depositary, at one of its addresses set forth above, of certificates
representing the Shares tendered hereby, in proper form for transfer, together with a properly completed and duly executed Letter of Transmittal and any other documents required by the Letter of Transmittal or (B) guarantees a Book-Entry
Confirmation of the Shares tendered hereby into the Depositary’s account at The Depository Trust Company (pursuant to the procedures set forth in Section 3 of the Offer to Purchase), together with a properly completed and duly executed
Letter of Transmittal, or an Agent’s Message (defined in Section 2 of the Offer to Purchase) in lieu of such Letter of Transmittal, and any other documents required by the Letter of Transmittal.
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NOTE: DO NOT SEND CERTIFICATES REPRESENTING TENDERED SHARES WITH THIS NOTICE. CERTIFICATES REPRESENTING TENDERED
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
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Exhibit (a)(1)(D)
Offer To Purchase For Cash
All Outstanding Shares of Common Stock
of
MILLENNIAL MEDIA,
INC.
at
$1.75
Net Per Share
Pursuant to the Offer to Purchase dated September 18, 2015
by
MARS ACQUISITION SUB,
INC.
a wholly owned direct subsidiary
of
AOL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON OCTOBER
16, 2015, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE”).
September 18, 2015
To Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees:
We have been engaged by Mars Acquisition Sub, Inc., a Delaware corporation (which we
refer to as “Purchaser”) and a wholly owned direct subsidiary of AOL Inc., a Delaware corporation (which we refer to as “Parent”), to act as Information Agent in connection with Purchaser’s offer to purchase for cash all
outstanding shares of common stock, par value $0.001 per share (the “Shares”), of Millennial Media, Inc., a Delaware corporation (which we refer to as “Millennial Media”), at a purchase price of $1.75 per Share, net to the seller
in cash, without interest thereon and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated September 18, 2015 (the “Offer to Purchase”), and the related Letter of
Transmittal (the “Letter of Transmittal” which, together with the Offer to Purchase and other related materials, as each may be amended or supplemented from time to time, constitutes the “Offer”) enclosed herewith. Please furnish
copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.
Certain
conditions to the Offer are described in Section 15 of the Offer to Purchase.
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, we are enclosing the following documents:
1. The Offer to Purchase;
2. The Solicitation/Recommendation Statement on Schedule 14D-9 of Millennial Media;
3. The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients,
together with the included Internal Revenue Service Form W-9;
4. A notice of guaranteed delivery to be used to accept the
Offer if Shares and all other required documents cannot be delivered to American Stock Transfer & Trust Company, LLC (the “Depositary”) by the Expiration Date or if the procedure for book-entry transfer cannot be completed by the
Expiration Date (the “Notice of Guaranteed Delivery”);
5. A form of 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; and
6. A return envelope addressed to the Depositary for your use only.
We urge you to contact your clients as promptly as possible. Please note that the Offer and
withdrawal rights will expire at 11:59 p.m., New York City time, on October 16, 2015, unless the Offer is extended or earlier terminated.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of September 3, 2015 (the “Merger Agreement”), by and
among Parent, Purchaser and Millennial Media. The Merger Agreement provides, among other things, that following the consummation of the Offer and subject to the satisfaction or waiver of certain conditions, Purchaser will be merged with and into
Millennial Media (the “Merger”), with Millennial Media continuing as the surviving corporation in the Merger.
For Shares to be
properly tendered pursuant to the Offer, (a) the share certificates or confirmation of receipt of such Shares under the procedure for book-entry transfer, together with a properly completed and duly executed Letter of Transmittal, including any
required signature guarantees, or, in the case of book-entry transfer, either such Letter of Transmittal or an Agent’s Message (as defined in Section 2 of the Offer to Purchase) in lieu of such Letter of Transmittal, and any other documents
required in the Letter of Transmittal, must be timely received by the Depositary or (b) the tendering stockholder must comply with the guaranteed delivery procedures, all in accordance with the Offer to Purchase and the Letter of Transmittal. You
may gain some additional time by making use of the Notice of Guaranteed Delivery.
Except as set forth in the Offer to Purchase, Purchaser
will not pay any fees or commissions to any broker or dealer or other person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks
and trust companies will, upon request, be reimbursed by Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers. Purchaser will pay all stock transfer taxes applicable to its
purchase of Shares pursuant to the Offer, subject to Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect
to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the undersigned at the address and telephone numbers set forth below.
Very truly yours,
Innisfree
M&A Incorporated
Nothing contained herein or in the enclosed documents shall render you the agent of Purchaser, the Information Agent or the
Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders
may call toll free: (877) 825-8964
Banks and Brokers may call collect: (212) 750-5833
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Exhibit (a)(1)(E)
Offer To Purchase For Cash
All Outstanding Shares of Common Stock
of
MILLENNIAL MEDIA,
INC.
at
$1.75
Net Per Share
Pursuant to the Offer to Purchase dated September 18, 2015
by
MARS ACQUISITION SUB,
INC.
a wholly owned direct subsidiary
of
AOL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON OCTOBER
16, 2015, UNLESS THE OFFER IS EXTENDED OR EARLIER TERMINATED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE “EXPIRATION DATE”).
September 18, 2015
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated September 18, 2015 (what we refer to as the “Offer to Purchase”),
and the related Letter of Transmittal (what we refer to as the “Letter of Transmittal” and what, together with the Offer to Purchase, as each may be amended or supplemented from time to time, we refer to as the “Offer”) in
connection with the offer by Mars Acquisition Sub, Inc., a Delaware corporation (which we refer to as “Purchaser”) and a wholly owned direct subsidiary of AOL Inc., a Delaware corporation (which we refer to as “Parent”), to
purchase all outstanding shares of common stock, par value $0.001 per share (which we refer to as the “Shares”), of Millennial Media, Inc., a Delaware corporation (which we refer to as “Millennial Media”), at a purchase price of
$1.75 per Share, net to the seller in cash, without interest thereon and less any applicable withholding taxes, upon the terms and subject to the conditions of the Offer.
We or our nominees are the holder of record of Shares held 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 Letter of Transmittal accompanying this letter 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 us to tender any or all of the Shares held by us for your account, upon the terms and
subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.
Please note carefully the
following:
1. The offer price for the Offer is $1.75 per Share, net to you in cash, without interest thereon and
less any applicable withholding taxes.
2. The Offer is being made for all outstanding Shares.
3. The Offer is being made in connection with the Agreement and Plan of Merger, dated as of September 3, 2015 (together
with any amendments or supplements thereto, what we refer to as the “Merger Agreement”), among Parent, Purchaser and Millennial Media, pursuant to which, after the consummation of the Offer and the satisfaction or waiver of the conditions
set forth therein, Purchaser will be merged with and into Millennial Media, and Millennial Media will be the surviving corporation and a wholly owned subsidiary of Parent (which we refer to as the “Merger”).
4. The Offer and withdrawal rights will expire at 11:59 p.m., New York City time, on October 16,
2015, unless the Offer is extended by Purchaser or earlier terminated.
5. The Offer is subject to certain conditions described in Section
15 of the Offer to Purchase.
6. Tendering stockholders who are record owners of their Shares and who tender directly to American Stock
Transfer & Trust Company, LLC (the “Depositary”) will not be obligated to pay brokerage fees, commissions or similar expenses 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.
If you wish to have us tender any or all of your Shares, then
please so instruct us by completing, executing, detaching and returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, then all such Shares
will be tendered unless otherwise specified on the Instruction Form.
Your prompt action is requested. Your Instruction Form should be
forwarded to us with sufficient time to permit us to submit the tender on your behalf before the Expiration Date.
The Offer is not
being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any state in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such state.
INSTRUCTION FORM
With Respect to the Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
MILLENNIAL MEDIA,
INC.
at
$1.75
Net Per Share
Pursuant to the Offer to Purchase dated September 18, 2015
by
MARS ACQUISITION SUB,
INC.
a wholly owned direct subsidiary
of
AOL INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated September 18, 2015 (what we refer to as the
“Offer to Purchase”), and the related Letter of Transmittal (what we refer to as the “Letter of Transmittal” and what, together with the Offer to Purchase, as each may be amended or supplemented from time to time, we refer to as
the “Offer”), in connection with the offer by Mars Acquisition Sub, Inc., a Delaware corporation (which we refer to as “Purchaser”) and a wholly owned direct subsidiary of AOL Inc., a Delaware corporation, to purchase all
outstanding shares of common stock, par value $0.001 per share (which we refer to as the “Shares”), of Millennial Media, Inc., a Delaware corporation, at a purchase price of $1.75 per Share, net to the seller in cash, without interest
thereon and less any applicable withholding taxes, upon the terms and subject to the conditions of the Offer.
The undersigned hereby
instruct(s) you to tender to Purchaser the number of Shares indicated below or, if no number is indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. The
undersigned understands and acknowledges that all questions as to validity, form and eligibility of the surrender of any certificate representing Shares submitted on my behalf will be determined by Purchaser and such determination shall be final and
binding.
NUMBER OF SHARES BEING TENDERED
HEREBY*:
The method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered
mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery prior to the Expiration Date (as defined in the Offer to Purchase).
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Unless otherwise indicated, it will be assumed that all Shares held by us for our account are to be tendered. |
Exhibit (a)(1)(G)
This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below), and the provisions herein are subject
in their entirety to the provisions of the Offer (as defined below). The Offer is made by the Offer to Purchase, dated September 18, 2015, and the related Letter of Transmittal and other related materials as each may be amended or supplemented,
and is being made to all holders of Shares. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in
compliance with the securities, “blue sky” or other laws of such jurisdiction. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser (as defined below) by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
MILLENNIAL MEDIA,
INC.
at
$1.75
Net Per Share
Pursuant to the Offer to Purchase dated September 18, 2015
by
MARS ACQUISITION SUB,
INC.
a wholly owned direct subsidiary
of
AOL INC.
Mars Acquisition Sub, Inc., a Delaware corporation (“Purchaser”) and a wholly owned direct subsidiary of AOL Inc., a Delaware
corporation (“Parent”), is offering to purchase for cash all of the outstanding shares of common stock, par value $0.001 per share (the “Shares”), of Millennial Media, Inc., a Delaware corporation (“Millennial Media”),
at a purchase price of $1.75 per Share (the “Offer Price”), net to the seller in cash, without interest thereon and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated September 18, 2015 (the “Offer to Purchase”), and in the related Letter of Transmittal (the “Letter of Transmittal” which, together with the Offer to Purchase and other related materials, as each may be amended or
supplemented from time to time, constitutes the “Offer”).
Tendering stockholders who are record owners of their Shares and who
tender directly to American Stock Transfer & Trust Company, LLC (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. Stockholders who hold their Shares through a broker, bank or other nominee should consult such institution as to whether it charges any service fees or
commissions.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON OCTOBER 16, 2015, UNLESS THE OFFER IS
EXTENDED OR EARLIER TERMINATED.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of
September 3, 2015 (as it may be amended from time to time, the “Merger Agreement”), by and among Parent, Purchaser and Millennial Media. The Merger Agreement provides, among other things, that following the consummation of the Offer
and subject to the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Millennial Media (the “Merger”), with Millennial Media continuing as the surviving corporation in the Merger (the “Surviving
Corporation”). Because the Merger will be governed by Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), no stockholder vote will be required to consummate the Merger. In the Merger, each Share
outstanding immediately prior to the effective time of the Merger (other than Shares held (i) in the treasury of Millennial Media or by Parent or Purchaser, which Shares shall be canceled and shall cease to exist, (ii) by a wholly owned
subsidiary of Millennial Media or Parent (other than Purchaser) or a wholly owned subsidiary of Purchaser, which Shares shall be converted into shares of the Surviving Corporation representing the same percentage ownership in the Surviving
Corporation that such holder owned in Millennial Media prior to the effective time of the
Merger, and (iii) by stockholders who validly exercise appraisal rights under Delaware law with respect to such Shares) will be automatically canceled and converted into the right to receive
$1.75 or any greater per Share price paid in the Offer, without interest thereon and less any applicable withholding taxes. As a result of the Merger, Millennial Media will cease to be a publicly traded company and will become wholly owned by
Parent. Under no circumstances will interest be paid on the purchase price for Shares, regardless of any extension of the Offer or any delay in making payment for Shares. The Merger Agreement is more fully described in the Offer to Purchase.
The Offer is conditioned upon, among other things, (a) the absence of a termination of the Merger Agreement in accordance with its terms
(the “Termination Condition”) and (b) the satisfaction of (i) the Minimum Condition, (ii) the Antitrust Law Condition, (iii) the Governmental Authority Condition, (iv) the Representations Condition, (v) the
Covenants Condition and (vi) the Material Adverse Effect Condition, each as described below. The Minimum Condition requires that the number of Shares validly tendered in accordance with the terms of the Offer and not validly withdrawn on or
prior to 11:59 p.m. (New York City time) on October 16, 2015 (the “Expiration Date,” unless Purchaser shall have extended the period during which the Offer is open in accordance with the Merger Agreement, in which event
“Expiration Date” shall mean the latest time and date at which the Offer, as so extended by Purchaser, shall expire) (excluding Shares tendered pursuant to guaranteed delivery procedures but not yet delivered), together with any Shares
then owned by Parent or its subsidiaries, represent a majority of the outstanding Shares as of the Expiration Date (determined on a fully diluted basis, which for these purposes means the number of Shares issued and outstanding plus the number of
Shares which Millennial Media would be required to issue pursuant to any then outstanding warrants, options, benefit plans or obligations or securities convertible or exchangeable into Shares or otherwise, but only to the extent so exercisable,
convertible or exchangeable prior to consummation of the Merger or exercisable, convertible or exchangeable as a result of the consummation of the Offer or the Merger). The Antitrust Law Condition requires that any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the “HSR Act”) and any other applicable antitrust law shall have expired or otherwise been terminated. Under the HSR Act, each
of Parent and Millennial Media is required to file a Premerger Notification and Report Form with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the U.S. Department of Justice in connection with the purchase of
Shares in the Offer. The Governmental Authority Condition requires that no governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any law or order which is then in effect and has the effect of
making the Offer or the Merger illegal or otherwise prohibiting, restraining or preventing the consummation of the Offer or the Merger. The Representations Condition requires that certain representations and warranties made by Millennial Media in
the Merger Agreement be accurate, subject to the materiality and other qualifications set forth in the Merger Agreement. The Covenants Condition requires that Millennial Media materially comply with all covenants pursuant to the Merger Agreement.
The Material Adverse Effect Condition requires that since September 3, 2015, there shall not have occurred and be continuing as of the Expiration Date a Company Material Adverse Effect (or any event, development or circumstances that, if it had
occurred, would have, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect), in each case as defined under the Merger Agreement. The Offer also is subject to other conditions as described in
the Offer to Purchase.
After careful consideration, the board of directors of Millennial Media, duly and unanimously adopted
resolutions (i) determining that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to and in the best interests of Millennial Media and its stockholders, (ii) approving and
declaring advisable the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, in accordance with the requirements of Delaware law and (iii) recommending that the stockholders of Millennial Media accept
the Offer and tender their Shares to Purchaser in the Offer.
The Merger Agreement contains provisions to govern the circumstances in
which Purchaser is required or permitted to extend the Offer and Parent is required to cause the Purchaser to extend the Offer. Specifically, the Merger Agreement provides that:
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If any Offer condition has not been satisfied or, to the extent waivable by Parent or Purchaser pursuant to the Merger Agreement, waived by Parent or Purchaser, Purchaser shall (and Parent shall cause Purchaser to)
extend the Offer for successive periods of up to 5 business days each (or up to 20 business days if Parent so desires and Millennial Media consents in writing prior to such extension), the length of each such period to be determined by Parent in its
sole discretion in order to permit the satisfaction of the Offer conditions. |
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Purchaser shall extend the Offer for any period or periods required by applicable law or applicable rules, regulations, interpretations or positions of the Securities and Exchange Commission (the “SEC”) or its
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However, in no event will Purchaser be required, or permitted without the Millennial Media’s consent, to extend the Offer beyond the Outside Date (as defined under the Merger Agreement), unless at such time Parent
is in material breach of the Merger Agreement and such material breach has caused or resulted in the Offer not being consummated by such date. |
Purchaser has agreed that it will terminate the Offer promptly upon any termination of the Merger Agreement.
Subject to the applicable rules and regulations of the SEC, Purchaser expressly reserves the right to waive, in whole or in part, any
condition to the Offer or modify the terms of the Offer; provided, however, that, without the consent of Millennial Media, Purchaser is not permitted to, (i) decrease the Offer Price, (ii) change the form of consideration payable in the
Offer, (iii) change the number of Shares to be purchased in the Offer, (iv) amend or waive the Minimum Condition, the Termination Condition, the Antitrust Law Condition or the Governmental Authority Condition, (v) add any condition to
the Offer or any term that is adverse to holders of Shares, (vi) extend the expiration of the Offer except as required or permitted by the Merger Agreement, (vii) provide for a “subsequent offering period” (or any extension
thereof) in accordance with Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or (viii) modify, supplement or amend any other term or condition of the Offer in a manner adverse to the holders of
Shares.
Any extension, delay, termination or amendment of the Offer will be followed as promptly as practicable by public announcement
thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which Purchaser may
choose to make any public announcement, it currently intends to make announcements regarding the Offer by issuing a press release and making any appropriate filing with the SEC.
Because the Merger will be governed by Section 251(h) of the DGCL, Purchaser does not expect there to be a significant period between the
consummation of the Offer and the consummation of the Merger.
For purposes of the Offer, 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 its 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 Offer Price for such Shares with the Depositary, which will act as paying 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. 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 and the Merger Agreement, the Depositary may retain tendered Shares on Purchaser’s behalf, and such Shares may
not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described in the Offer to Purchase and as otherwise required by Rule 14e-1(c) under the Exchange Act. Under no circumstances will Purchaser pay
interest on the purchase price for Shares by reason of any extension of the Offer or any delay in making such payment for Shares.
In
all cases, Purchaser will pay for Shares tendered and accepted for payment pursuant to the Offer only after timely receipt by the Depositary of (i) the certificates evidencing such Shares (the “Share Certificates”) or confirmation of
a book-entry transfer of such Shares (a “Book-Entry Confirmation”) into the Depositary’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in 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, in the case of a book-entry transfer, an Agent’s Message (as described in the Offer to
3
Purchase) in lieu of the Letter of Transmittal and (iii) any other documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times
depending upon when Share Certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary.
Shares
tendered pursuant to the Offer may be withdrawn at any time prior to 11:59 p.m. (New York City time) on the Expiration Date and, unless previously accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after
November 17, 2015, which is the 60th day after the date of the commencement of the Offer. For a withdrawal to be effective, a written, telegraphic 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. 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 (as described in the Offer to
Purchase), 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 the Offer to Purchase, any notice of withdrawal must also
specify the name and number of the account at DTC to be credited with the withdrawn Shares. 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 by again following one of the procedures described in the Offer to Purchase at any time by the Expiration Date.
Purchaser will determine, in its sole discretion, all questions as to the form and validity (including time of receipt) of any notice of
withdrawal subject to applicable law as applied by a court of competent jurisdiction, and Purchaser’s determination will be final and binding. None of Purchaser, the Depositary, the Information Agent or any other person will be under any duty
to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.
The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is
contained in the Offer to Purchase and is incorporated herein by reference.
Millennial Media has provided Purchaser with Millennial
Media’s stockholder list and security position listings for the purpose of disseminating the Offer to Purchase, the related Letter of Transmittal and other related materials to holders of Shares. The Offer to Purchase and related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on the stockholder list of Millennial Media 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 exchange of Shares for cash pursuant to the Offer or the Merger will be a taxable transaction to U.S. Holders for United States
federal income tax purposes. See the Offer to Purchase for a more detailed discussion of the tax treatment of the Offer. Each holder of Shares should consult with its tax advisor as to the particular tax consequences to such holder of exchanging
Shares for cash in the Offer or the Merger.
The Offer to Purchase and the related Letter of Transmittal contain important
information. Holders of Shares should carefully read both documents in their entirety before any decision is made with respect to the Offer.
Questions and requests for assistance may be directed to the Information Agent at its address and telephone numbers set forth below. Requests
for copies of the Offer to Purchase, the Letter of Transmittal, the notice of guaranteed delivery and other tender offer materials may be directed to the Information Agent. Such copies will be furnished promptly at Purchaser’s expense.
Stockholders may also contact brokers, dealers, commercial banks or trust companies for assistance concerning the Offer. Except as set forth in the Offer to Purchase, neither Purchaser nor Parent will pay any fees or commissions to any broker or
dealer or any other person (other than the Information Agent or the Depositary) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks, trust companies or other nominees will, upon request, be reimbursed by
Purchaser for customary mailing and handling expenses incurred by them in forwarding the Offer materials to their customers.
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The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, NY 10022
Stockholders
may call toll free: (877) 825-8964
Banks and Brokers may call collect:
(212) 750-5833
September 18, 2015
5
Exhibit (a)(5)(A)
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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| PAUL PARSHALL, On Behalf of Himself and All Others Similarly Situated, |
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| Plaintiff, |
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Civil Action No. |
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| MILLENNIAL MEDIA, INC., MICHAEL BARRETT, BOB GOODMAN, THOMAS EVANS,
PATRICK KERINS, ROSS LEVINSOHN, WENDA HARRIS MILLARD, JIM THOLEN, AOL, INC., and MARS ACQUISITION SUB, INC., |
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VERIFIED CLASS ACTION COMPLAINT
Plaintiff, by his undersigned attorneys, for this Verified Class Action Complaint against defendants, alleges upon personal knowledge
with respect to himself, and upon information and belief based upon, inter alia, the investigation of counsel as to all other allegations herein, as follows:
NATURE OF THE ACTION
1. This is a class action brought on behalf of the public stockholders of Millennial Media, Inc. (“Millennial” or the
“Company”) against Millennial and its Board of Directors (the “Board” or the “Individual Defendants”), to enjoin a proposed transaction announced on September 3, 2015 (the “Proposed
Transaction”), pursuant to which Millennial will be acquired by AOL, Inc. (“Parent”) and its wholly-owned subsidiary, Mars Acquisition Sub, Inc. (“Merger Sub,” and
together with Parent, “AOL”).
2. On September 3, 2015, the Board caused Millennial to enter into an agreement and plan of
merger (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Merger Sub will commence a tender offer (the “Tender Offer”) to acquire all of the outstanding shares of Millennial for $1.75 per share in cash.
3. The Proposed Transaction is the product of a flawed process and deprives Millennial’s public stockholders of the ability to
participate in the Company’s long-term prospects. Furthermore, in approving the Merger Agreement, the Individual Defendants breached their fiduciary duties to plaintiff and the Class (defined herein). Moreover, as alleged herein, Millennial and
AOL aided and abetted the Individual Defendants’ breaches of fiduciary duties.
4. Plaintiff seeks enjoinment of the Proposed
Transaction or, alternatively, rescission of the Proposed Transaction in the event defendants are able to consummate it.
PARTIES
5. Plaintiff is, and has been continuously throughout all times relevant hereto, the owner of Millennial common stock.
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6. Defendant Millennial is a Delaware corporation and maintains its principal executive offices
at 2400 Boston Street, Suite 300, Baltimore, Maryland 21224. The Company is an advertising company that places display ads on mobile devices. Millennial’s common stock is traded on the NYSE under the ticker symbol “MM.”
7. Defendant Michael Barrett (“Barrett”) is currently Chief Executive Officer (“CEO”) and a director of Millennial.
8. Defendant Bob Goodman (“Goodman”) is currently a director of Millennial. According to the Company’s website, Goodman is a
member of the Compensation Committee.
9. Defendant Thomas Evans (“Evans”) is currently a director of Millennial. According to
the Company’s website, Evans is a member of the Audit Committee.
10. Defendant Patrick Kerins (“Kerins”) is currently a
director of Millennial. According to the Company’s website, Kerins is Chairperson of the Compensation Committee.
11. Defendant Ross
Levinsohn (“Levinsohn”) is currently a director of Millennial. According to the Company’s website, Levinsohn is a member of the Audit Committee.
12. Defendant Wenda Harris Millard (“Millard”) is currently a director of
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Millennial. According to the Company’s website, Millard is Chairperson of the Nominating and Corporate Governance Committee.
13. Defendant Jim Tholen (“Tholen”) is currently a director of Millennial. According to the Company’s website, Tholen is
Chairperson of the Audit Committee as well as a “financial expert.”
14. The defendants identified in paragraphs seven through
thirteen are collectively referred to herein as the “Individual Defendants.” By virtue of their positions as directors and/or officers of Millennial, the Individual Defendants are in a fiduciary relationship with plaintiff and the other
public stockholders of Millennial.
15. Each of the Individual Defendants at all relevant times had the power to control and direct
Millennial to engage in the misconduct alleged herein. The Individual Defendants’ fiduciary obligations required them to act in the best interest of plaintiff and all Millennial stockholders.
16. Each of the Individual Defendants owes fiduciary duties of loyalty, good faith, due care, and full and fair disclosure to plaintiff and
the other members of the Class. The Individual Defendants are acting in concert with one another in violating their fiduciary duties as alleged herein, and, specifically, in connection with the Proposed Transaction.
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17. Plaintiff alleges herein that the Individual Defendants, separately and together, in
connection with the Proposed Transaction, violated, and are continuing to violate, the fiduciary duties they owe to plaintiff and the Company’s other public stockholders, due to the fact that they have engaged in all or part of the unlawful
acts, plans, schemes, or transactions complained of herein.
18. Defendant Parent is a Delaware corporation with its corporate
headquarters located at 770 Broadway, New York, New York 10003.
19. Defendant Merger Sub is a Delaware corporation and a wholly-owned
subsidiary of Parent.
CLASS ACTION ALLEGATIONS
20. Plaintiff brings this action as a class action, pursuant to Court of Chancery Rule 23, on behalf of himself and the other public
stockholders of Millennial (the “Class”). Excluded from the Class are defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any defendant.
21. This action is properly maintainable as a class action.
22. The Class is so numerous that joinder of all members is impracticable. As of July 31, 2015, there were approximately 141,644,009
shares of Millennial common stock outstanding, held by hundreds, if not thousands, of individuals and entities scattered throughout the country.
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23. Questions of law and fact are common to the Class, including, among others: (i) whether
defendants have breached their fiduciary duties owed to plaintiff and the Class and/or aided and abetted such breaches; and (ii) whether defendants will irreparably harm plaintiff and the other members of the Class if defendants’ conduct
complained of herein continues.
24. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in
litigation of this nature. Plaintiff’s claims are typical of the claims of the other members of the Class and plaintiff has the same interests as the other members of the Class. Accordingly, plaintiff is an adequate representative of the Class
and will fairly and adequately protect the interests of the Class.
25. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications that would establish incompatible standards of conduct for defendants, or adjudications that would, as a practical matter, be dispositive of the interests of individual members of
the Class who are not parties to the adjudications or would substantially impair or impede those non-party Class members’ ability to protect their interests.
26. Defendants have acted, or refused to act, on grounds generally applicable to the Class as a whole, and are causing injury to the entire
Class. Therefore, final injunctive relief on behalf of the Class is appropriate.
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SUBSTANTIVE ALLEGATIONS
Background of the Company
27.
Millennial is the leading independent mobile marketplace, making mobile advertising simple for the world’s top brands, app developers, and mobile web publishers.
28. Millennial’s unique data and technology assets enable its advertising clients to connect with their target audiences at scale. The
Company also drives monetization for its publisher and developer partners by connecting them to networks, advertisers, and a real-time-bidding exchange.
29. Millennial is positioned for future growth and success.
30. On December 4, 2014, the Company issued a press release wherein it announced its acquisition of mobile supply-side platform
(“SSP”) and programmatic pioneer Nexage. According to the press release, the acquisition created one of the world’s most complete mobile ad technology stacks, and will allow Millennial to bring ad dollars from hundreds of demand
sources and thousands of advertisers to its network of 60,000-plus applications and mobile sites around the globe. Individual Defendant Barrett, President and CEO of the Company, commented:
The entire industry is facing a programmatic shift. Advertisers and publishers are moving toward automated channels to buy and sell measurable
media, and Millennial Media is uniquely positioned to help them succeed. We cut our teeth as a full service network, so we
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understand the unique challenges of today’s mobile-centric publishers. Now, we have the technology and smarts to help them achieve those objectives with greater transparency and less
friction[.] The reaction we received from advertisers, publishers, and partners has been overwhelmingly positive. We are excited to formally welcome the Nexage team into the Millennial Media family.
31. On March 9, 2015, Millennial issued a press release wherein it announced its 2014 fourth quarter and full year financial results.
Among other things, the Company reported that revenue increased to $296.2 million for the full year 2014, compared to $259.2 million for the full year 2013. With respect to the financial results, Individual Defendant Barrett commented:
Millennial Media ended 2014 on a high note. We successfully completed our acquisition of Nexage, added several key management personnel, and
exceeded our fourth quarter revenue expectations[.] Through these accomplishments, we’ve entered 2015 with a stronger, more complete set of tools to help us execute on our full-stack marketplace vision and make mobile simple for our partners.
We’ve already begun inventory integrations to our owned and operated programmatic exchange, The Millennial Media Exchange powered by Nexage, which will enable hundreds of mobile ad buyers to transact with thousands of developers and publishers.
Supported by the foundation of our managed media business, we expect to accelerate our programmatic platform capabilities and revenue production during 2015.
32. On May 5, 2015, the Company issued a press release wherein it announced its first quarter 2015 financial results. Individual
Defendant Barrett summarized the first quarter results as follows:
Millennial Media is entering its second quarter with a strong
foundation. First quarter results exceeded guidance across the board and we’re seeing early success through our Nexage integration[.]
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Combined with solid revenues from our Managed Media business, the pieces of our owned and operated programmatic exchange are fully assembled and we’re executing on our full-stack,
independent marketplace vision. We believe we are well positioned in the growing mobile ad ecosystem and expect to accelerate our programmatic platform capabilities and revenue production throughout 2015.
33. As of March 31, 2015, Millennial reached over 670 million monthly unique users globally, including approximately
175 million monthly unique users in the United States alone. Additionally, approximately 65,000 apps were enabled by mobile app developers to operate on Millennial’s platform, and Millennial had more than 750 million proprietary,
anonymous user profiles used for delivering the most relevant ads to consumers.
The Inadequate Proposed Transaction and Deal Protection Provisions
34. Despite the Company’s prospects for future growth and success, the Board caused the Company to enter into the Merger
Agreement, pursuant to which Millennial will be acquired for inadequate consideration.
35. The parties have agreed that if, pursuant to
Delaware General Corporation Law Section 251(h), after the purchase of the Company common stock tendered in the Tender Offer, AOL owns at least fifty percent of the outstanding Company common stock, AOL will execute a short-form merger, which
will not require the consent of the Company’s stockholders.
36. To the detriment of the Company’s stockholders, the terms of
the Merger Agreement substantially favor AOL and are calculated to unreasonably
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dissuade potential suitors from making competing offers.
37. For example, the
Individual Defendants have all but ensured that another entity will not emerge with a competing proposal by agreeing to a “No Solicitation” provision in the Merger Agreement that prohibits the Individual Defendants from soliciting
alternative proposals and severely constrains their ability to communicate and negotiate with potential buyers who wish to submit or have submitted unsolicited alternative proposals. Section 6.4(a) of the Merger Agreement states:
(a) Except as otherwise provided for in this Agreement, the Company agrees that it and its subsidiaries shall, and that it shall use its
reasonable best efforts to cause its and their respective Representatives to, immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a Competing Proposal and, until the earlier of the Effective Time or
the date, if any, on which this Agreement is terminated pursuant to Section 8.1, not, directly or indirectly: (i) solicit, initiate or knowingly facilitate or encourage any Competing Proposal; (ii) participate in any negotiations
regarding, or furnish to any person any nonpublic information with respect to, any Competing Proposal; (iii) engage in discussions with any person with respect to any Competing Proposal; (iv) approve or recommend any Competing Proposal;
(v) enter into any letter of intent or similar document or any agreement or commitment providing for any Competing Proposal; (vi) take any action to make the provisions of any “fair price,” “moratorium,” “control
share acquisition,” “business combination” or other similar anti-takeover statute or regulation (including any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the DGCL), or
any restrictive provision of any applicable anti- takeover provision in the Restated Certificate of Incorporation or By- laws of the Company, inapplicable to any person other than Parent and its Affiliates or to any transactions constituting or
contemplated by a Competing Proposal; or (vii) resolve or agree to do any of the
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foregoing. The Company shall promptly after the date hereof instruct each person that has executed a confidentiality agreement (other than the Confidentiality Agreement) relating to a Competing
Proposal or potential Competing Proposal with or for the benefit of the Company promptly to return to the Company or destroy all information, documents, and materials relating to the Competing Proposal or to the Company or its businesses, operations
or affairs heretofore furnished by the Company or any of its Representatives to such person or any of its Representatives in accordance with the terms of any confidentiality agreement with such person, and shall use reasonable best efforts to
enforce, and not waive without Parent’s prior written consent, any standstill or similar provision in any confidentiality or other agreement with such person; provided that if the Company Board determines in good faith, after consultation with
its outside legal advisors, that it would be inconsistent with the directors’ exercise of their fiduciary duties under applicable Law not to do so, the Company may waive any standstill or similar provisions in its agreements to the extent
necessary to permit a person to make, on a confidential basis to the Company Board, a Competing Proposal, conditioned upon such person agreeing to disclosure of such Competing Proposal to Parent and Acquisition Sub, in each case as contemplated by
and subject to compliance with this Section 6.4.
38. Further, pursuant to Section 6.4(b) of the Merger Agreement, the Company
must advise AOL, within twenty-four hours, of any proposals or inquiries received from other parties, including, inter alia, the material terms and conditions of the proposal and the identity of the party making the proposal. Section 6.4(b) of
the Merger Agreement states, in relevant part:
From and after the execution of this Agreement, the Company shall notify Parent promptly
(but in any event within 24 hours) of the receipt of any Competing Proposal, and (A) if it is in writing, deliver to Parent a copy of such Competing Proposal and any related draft agreements and other written material setting forth the terms
and conditions of such Competing Proposal or (B) if oral, provide to Parent a detailed summary of the material terms and conditions
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thereof including the identity of the person making such competing proposal. The Company shall keep Parent reasonably informed on a prompt and timely basis of the status and material details of
any such Competing Proposal and with respect to any material change to the terms of any such Competing Proposal within 24 hours of such material change.
39. Moreover, the Merger Agreement contains a highly restrictive “fiduciary out” provision permitting the Board to withdraw its
approval of the Proposed Transaction under extremely limited circumstances, and grants AOL a “matching right” with respect to any “Superior Proposal” made to the Company. Sections 6.4(d) and (f) of the Merger Agreement
provide:
(d) Notwithstanding anything to the contrary contained in this Agreement, at any time prior to the Acceptance Time, if
(i) an event, fact, circumstance, development, change or occurrence (an “Intervening Event”) that materially affects the business, assets or operations of the Company that is unknown to the Company Board as of the date of this
Agreement and reasonably should not have been known as of the date of this Agreement, becomes known to the Company Board or (ii) the Company receives a Competing Proposal which the Company Board concludes in good faith, after consultation with
outside legal and financial advisors, constitutes a Superior Proposal after giving effect to all of the adjustments to the terms of this Agreement which may be offered by Parent, the Company Board may effect a Change of Recommendation if the Company
Board has concluded in good faith, after consultation with the Company’s outside legal advisors, that the failure of the Company Board to make such Change of Recommendation would be inconsistent with the directors’ exercise of their
fiduciary duties under applicable Law; provided, however, that such action may be only be taken (A) if the Company shall have (x) fully complied with this Section 6.4 and (y) first provided prior written notice to Parent in
advance of its intention to make a Change of Recommendation and the reasons therefor, including the terms of any Competing Proposal with respect to which the Change of Recommendation relates and the identity of the person
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making such Competing Proposal (it being understood that the delivery of such notice shall not, in and of itself, be deemed a Change in Recommendation) and (B) at a time that is after the
third (3rd) Business Day following the Company’s delivery to Parent of such notice, during which time Parent shall be entitled to deliver to the Company one or more proposals for amendments to this Agreement and, if requested by Parent,
the Company shall negotiate with the Parent in good faith with respect thereto, if the Company Board determines in good faith, after consultation with the Company’s outside legal advisors, taking into account all amendments or revisions to this
Agreement proposed by Parent, that the failure of the Company Board to effect such Change of Recommendation still would be inconsistent with the directors’ exercise of their fiduciary duties under applicable Law. Any material amendment to a
Competing Proposal to which such Change of Recommendation relates, including any revision to price, shall require the Company to deliver to Parent a new notice and again comply with the requirements of this Section 6.4(d) with respect to such
revised Competing Proposal.
(f) If at any time prior to the Acceptance Time the Company Board has concluded in good faith after
consultation with the Company’s outside legal and financial advisors that a Competing Proposal constitutes a Superior Proposal, then the Company Board may cause the Company to terminate this Agreement in accordance with Section 8.1(h), pay
the Company Termination Fee and enter into a binding written agreement (a “Superior Proposal Agreement”) with respect to such Superior Proposal; provided, however, that such termination shall only be effective if: (i) the Company
(x) shall have fully complied with this Section 6.4 and (y) first provided prior written notice to Parent in advance of its intention to terminate this Agreement of the terms of the Superior Proposal, including the final draft of the
Superior Proposal Agreement and the identity of the person making such Competing Proposal; (ii) at a time that is after the third (3rd) Business Day following the Company’s delivery to Parent of such notice, during which time Parent
shall be entitled to deliver to the Company one or more proposals for amendments to this Agreement and, if requested by Parent, the Company shall negotiate with Parent in good faith with respect thereto, if the Company Board determines in good
faith, after consultation with the Company’s
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outside legal and financial advisors, taking into account all amendments or revisions to this Agreement proposed by Parent, that the Competing Proposal remains a Superior Proposal; (iii) the
Company pays the Company Termination Fee to Parent upon the termination of this Agreement in accordance with the terms of this Agreement; and (iv) the Company enters into a Superior Proposal Agreement. Any material amendment to a Competing
Proposal, including any revision to price, shall require the Company to deliver to Parent a new notice and again comply with the requirements of this Section 6.4(f) with respect to such revised Competing Proposal. For the avoidance of doubt,
the Company may simultaneously give notice of its intention both to make a Change of Recommendation and to terminate this Agreement to enter into a Superior Proposal Agreement and the notice and negotiation periods set forth in Section 6.4(d)
and this Section 6.4(f) may pass simultaneously.
40. Further locking up control of the Company in favor of AOL is Section 8.3
of the Merger Agreement, which contains a provision for a “Termination Fee” of $10,257,222, payable by the Company to AOL if the Individual Defendants cause the Company to terminate the Merger Agreement pursuant to the lawful exercise of
their fiduciary duties. Millennial may also be required to reimburse AOL’s expenses up to $2,735,259.
41. By agreeing to all of the
deal protection devices, the Individual Defendants have locked up the Proposed Transaction and have precluded other bidders from making successful competing offers for the Company.
42. The consideration to be paid to plaintiff and the Class in the Proposed Transaction is unfair and inadequate because, among other things,
the intrinsic value of the Company is materially in excess of the amount offered in the Proposed Transaction.
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43. Accordingly, the Proposed Transaction will deny Class members their right to share
proportionately and equitably in the true value of the Company’s valuable and profitable business, and future growth in profits and earnings.
44. As a result, defendants have breached their fiduciary duties that they owe to the Company’s public stockholders because the
stockholders will not receive adequate or fair value for their Company common stock in the Proposed Transaction.
COUNT I
(Breach of Fiduciary Duties against the Individual Defendants)
45. Plaintiff repeats and realleges the preceding allegations as if fully set forth herein.
46. As members of the Company’s Board, the Individual Defendants have fiduciary obligations to: (a) undertake an appropriate
evaluation of Millennial’s net worth as a merger/acquisition candidate; (b) take all appropriate steps to enhance Millennial’s value and attractiveness as a merger/acquisition candidate; (c) act independently to protect the
interests of the Company’s public stockholders; (d) adequately ensure that no conflicts of interest exist between the Individual Defendants’ own interests and their fiduciary obligations, and, if such conflicts exist, to ensure that
all conflicts are resolved in the best interests of Millennial’s
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public stockholders; (e) actively evaluate the Proposed Transaction and engage in a meaningful auction with third parties in an attempt to obtain the best value on any sale of Millennial;
and (f) disclose all material information to the Company’s stockholders.
47. The Individual Defendants have breached their
fiduciary duties to plaintiff and the Class.
48. As alleged herein, the Individual Defendants have initiated a process to sell Millennial
that undervalues the Company. In addition, by agreeing to the Proposed Transaction, the Individual Defendants have capped the price of Millennial at a price that does not adequately reflect the Company’s true value. The Individual Defendants
also failed to sufficiently inform themselves of Millennial’s value, or disregarded the true value of the Company. Furthermore, any alternate acquiror will be faced with engaging in discussions with a management team and Board that are
committed to the Proposed Transaction.
49. As such, unless the Individual Defendants’ conduct is enjoined by the Court, they will
continue to breach their fiduciary duties to plaintiff and the other members of the Class.
50. Plaintiff and the members of the Class
have no adequate remedy at law.
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COUNT II
(Aiding and Abetting the Board’s Breaches of Fiduciary Duties
Against Millennial and AOL)
51. Plaintiff repeats and realleges the preceding allegations as if fully set forth herein.
52. Defendants Millennial and AOL knowingly assisted the Individual Defendants’ breaches of fiduciary duties in connection with the
Proposed Transaction, which, without such aid, would not have occurred. In connection with discussions regarding the Proposed Transaction, Millennial provided, and AOL obtained, sensitive non-public information concerning Millennial and thus had
unfair advantages that are enabling it to pursue the Proposed Transaction, which offers unfair and inadequate consideration.
53. As a
result of this conduct, plaintiff and the other members of the Class have been and will be damaged in that they have been and will be prevented from obtaining fair consideration for their Millennial shares.
54. Plaintiff and the members of the Class have no adequate remedy at law.
PRAYER FOR RELIEF
WHEREFORE, plaintiff prays for judgment and relief as follows:
A. Ordering that this action may be maintained as a class action and certifying plaintiff as the Class representative and plaintiff’s
counsel as Class
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counsel;
B. Preliminarily and permanently enjoining defendants and all persons
acting in concert with them from proceeding with, consummating, or closing the Proposed Transaction;
C. In the event defendants
consummate the Proposed Transaction, rescinding it and setting it aside or awarding rescissory damages to plaintiff and the Class;
D.
Directing defendants to account to plaintiff and the Class for their damages sustained because of the wrongs complained of herein;
E.
Awarding plaintiff the costs of this action, including reasonable allowance for plaintiff’s attorneys’ and experts’ fees; and
F. Granting such other and further relief as this Court may deem just and proper.
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| Dated: September 9, 2015 |
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RIGRODSKY & LONG, P.A. |
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By: |
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/s/ Gina M. Serra |
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Seth D. Rigrodsky (#3147) |
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Brian D. Long (#4347) |
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Gina M. Serra (#5387) |
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Jeremy J. Riley (#5791) |
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2 Righter Parkway, Suite 120 |
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Wilmington, DE 19803 |
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(302) 295-5310 |
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Attorneys for Plaintiff |
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Exhibit (a)(5)(B)
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EFiled: Sep 10 2015 12:51PM EDT
Transaction ID 57846045 Case
No. 11490- |
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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| DAVID DESJARDINS, Individually and on behalf of all others similarly situated, |
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| Plaintiff,
v. |
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Civil Action No.
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| MILLENNIAL MEDIA, INC., MICHAEL BARRETT, BOB GOODMAN, THOMAS EVANS, PATRICK KERINS, ROSS LEVINSOHN, WENDA HARRIS MILLARD, JIM THOLEN, AOL, INC., and MARS ACQUISITION SUB, INC., |
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VERIFIED CLASS ACTION COMPLAINT
Plaintiff David Desjardins (“Plaintiff”), by and through his attorneys, alleges upon personal knowledge as to himself, and upon
information and belief based upon, among other things, the investigation of counsel as to all other allegations herein, as follows:
SUMMARY OF THE ACTION
1. This is a stockholder class action brought by Plaintiff on behalf of the stockholders of Millennial Media, Inc. (“Millennial
Media” or “Company”) against Millennial Media, the board of directors of Millennial Media (“Board” or
“Individual Defendants”), AOL, Inc. (“AOL”), and Mars Acquisition Sub, Inc. (“Merger Sub”) to enjoin the sale of the Company (“Proposed Transaction”) as
detailed herein.
2. On September 3, 2015, Millennial Media announced that it had entered into a definitive agreement with AOL
(“Merger Agreement”) under which AOL, through Merger Sub, would acquire all of the outstanding shares of Millennial Media in a tender offer involving cash consideration. Under the terms of the Merger Agreement, Millennial Media
stockholders will receive $1.75 in cash in exchange for each share of Millennial Media. The Proposed Transaction is expected to close in the fall of 2015.
3. In facilitating the acquisition of Millennial Media by AOL for inadequate consideration and through a flawed process, each of the
Defendants (defined herein) breached and/or aided the other Defendants’ breaches of their fiduciary duties.
4. Moreover, the terms
of the Proposed Transaction were designed to ensure a transaction with AOL on terms preferential to AOL, and to subvert the interests of Plaintiff and the other public stockholders of Millennial Media. The Board has breached its fiduciary duties by
agreeing to preclusive deal protection devices in the Merger Agreement including, inter alia, (a) a “no-shop” provision which prohibits the Company from, among other things, soliciting or negotiating
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any alternative proposals; (b) a “matching rights” provision which grants AOL the right to revise its proposal in response to a superior alternative proposal; (c) an
“information rights” provision that entitles AOL to receive a copy of any alternative proposal as well as the material terms thereof; and (d) a provision that requires the Company to pay a termination fee of $10,257,222 in connection
with the Merger Agreement if the Proposed Transaction is terminated under certain circumstances. These provisions substantially and improperly limit the Board’s ability to act with respect to investigating and pursuing superior proposals. Thus,
the Board compounded its breaches by agreeing to these unreasonable deal protection devices that preclude other bidders from making a successful competing offer for the Company.
5. For these reasons and as set forth in detail herein, Plaintiff seeks to enjoin the Proposed Transaction or, in the event the Proposed
Transaction is consummated, recover damages resulting from the Individual Defendants’ violations of their fiduciary duties.
PARTIES
6.
Plaintiff is, and at all relevant times was, a continuous stockholder of Millennial Media.
7. Defendant Millennial Media is a Delaware
corporation with its principal executive offices located at 2400 Boston Street, Suite 300, Baltimore,
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MD 21224.
8. Defendant Patrick Kerins (“Kerins”) has served as Chairman
of the Board of the Company and has served as a director of the Company since 2009.
9. Defendant Michael Barrett (“Barrett”)
has served as a director of the Company since January 2014.
10. Defendant Bob Goodman (“Goodman”) has served as a director of
the Company since 2009.
11. Defendant Thomas Evans (“Evans”) has served as a director of the Company since February 2014.
12. Defendant Ross Levinsohn (“Levinsohn”) has served as a director of the Company since February 2014.
13. Defendant Wenda Harris Millard (“Millard”) has served as a director of the Company since May 2009.
14. Defendant Jim Tholen (“Tholen”) has served as a director of the Company since 2011.
15. Defendants Kerins, Barrett, Goodman, Evans, Levinsohn, Millard, and Tholen are collectively referred to herein as the “Board” or
the “Individual Defendants.”
16. Defendant AOL is a Delaware corporation with its principal executive offices located at 770
Broadway, New York, NY 10003.
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17. Defendant Merger Sub is a Delaware corporation and wholly-owned subsidiary of AOL.
18. Collectively, Millennial Media, AOL, the Individual Defendants, and Merger Sub are referred to herein as the “Defendants.”
CLASS ACTION ALLEGATIONS
19. Plaintiff brings this action on his own behalf and as a class action pursuant to Rule 23 on behalf of all holders of Millennial Media
shares who are being and will be harmed by Defendants’ actions described below (“Class”). Excluded from the Class are Defendants herein and any person, firm, trust, corporation or other entity related to or affiliated with any of the
Defendants.
20. This action is properly maintainable as a class action because:
a. The Class is so numerous that joinder of all members is impracticable. The Company’s most recent 10-Q indicates that, as of
July 31, 2015, there were 141,644,009 common shares of Millennial Media issued and outstanding. The actual number of stockholders of Millennial Media can be ascertained through discovery.
b. There are questions of law and fact that are common to the Class, including:
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i) whether the Individual Defendants have breached their fiduciary duties with respect to
Plaintiff and the other members of the Class in connection with the Proposed Transaction; and
ii) whether Plaintiff and the other
members of the Class would suffer irreparable injury were the Proposed Transaction complained of herein consummated.
c. Plaintiff is an
adequate representative of the Class, has retained competent counsel experienced in litigation of this nature, and will fairly and adequately protect the interests of the Class.
d. Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to
the Class.
e. The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying
adjudications that would establish incompatible standards of conduct for Defendants, or adjudications that would, as a practical matter, be dispositive of the interests of individual members of the Class who are not parties to the adjudications or
would substantially impair or impede those non-party Class members’ ability to protect their interests.
f. Defendants have acted on
grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.
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SUBSTANTIVE ALLEGATIONS
21. Millennial Media is an independent mobile advertising
marketplace delivering products and services to advertisers and developers. Millennial Media offers advertisers a suite of solutions that allow them to reach and connect with their target audiences across screens—from smartphones, tablets and
other mobile devices to PCs—with the scale to make significant impact to their business. The Company offers developers the ability to maximize their advertising revenue and acquire new users for their apps. The Company’s advertiser and
developer solutions support all major mobile operating systems, including Apple iOS, Android, Windows Phone and BlackBerry. The Company’s proprietary technology and data platform allows advertisers and developers to interact with the Company in
the way that suits them best. For clients who want a higher degree of customer service, the Company offers its “managed media” services with dedicated account teams. For the Company’s clients who want to interact with the Company on a
more automated basis, the Company offers tools that allow advertisers to buy Millennial Media’s ad supply in a programmatic fashion through the Company’s ad exchange and developers the opportunity to manage and monetize their ad inventory
through Millennial Media’s supply side tool.
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| B. |
The Company is Poised for Growth |
22. A press release dated March 9, 2015
announced Millennial Media’s fourth quarter and full year 2014 results. Millennial Media Chief Executive Officer Barrett assessed the quarter as follows:
Millennial Media ended 2014 on a high note. We successfully completed our acquisition of Nexage, added several key management personnel, and
exceeded our fourth quarter revenue expectations. Through these accomplishments, we’ve entered 2015 with a stronger, more complete set of tools to help us execute on our full-stack marketplace vision and make mobile simple for our partners.
We’ve already begun inventory integrations to our owned and operated programmatic exchange, The Millennial Media Exchange powered by Nexage, which will enable hundreds of mobile ad buyers to transact with thousands of developers and publishers.
Supported by the foundation of our managed media business, we expect to accelerate our programmatic platform capabilities and revenue production during 2015.
23. Millennial Media announced its first quarter 2015 financial results in a May 5, 2015 press release. Barrett assessed the quarter as
follows:
Millennial Media is entering its second quarter with a strong foundation. First quarter results exceeded guidance across the
board and we’re seeing early success through our Nexage integration. Combined with solid revenues from our Managed Media business, the pieces of our owned and operated programmatic exchange are fully assembled and we’re executing on our
full-stack, independent marketplace vision. We believe we are well positioned in the growing mobile ad ecosystem and expect to accelerate our programmatic platform capabilities and revenue production throughout 2015.
24. Millennial Media announced its second quarter 2015 financial results in an August 10, 2015 press release. Barrett assessed the
quarter as follows:
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We have built a strong, comprehensive mobile ad marketplace, with what we believe are the right
tools and talent to help meet the needs of our dynamic market. Clearly however, revenue is ramping more slowly than we had hoped. We are evaluating strategic opportunities to maximize the value of our capabilities in this rapidly evolving ecosystem.
25. In light of these factors, the Company is well-positioned to enjoy long-term growth in its market when the Company begins to convert
its revenue into earnings.
| C. |
The Proposed Transaction |
26. On September 3, 2015, Millennial Media issued
a press release announcing the Proposed Transaction:
AOL today announced its continued investment in cross platform programmatic
technology for marketers and publishers by signing an agreement to acquire Millennial Media, Inc. (NYSE: MM), a leading end-to-end mobile platform, for $1.75 per share of Millennial Media common stock.
Following AOL’s recent acquisition by Verizon, which operates the nation’s largest and most reliable wireless network, and its global
enterprise-level partnership with Microsoft, today’s announcement further strengthens AOL’s mobile capabilities and underlines its position as the first global mobile media technology company. AOL now operates scaled global content brands,
a scaled global content delivery network, a scaled global programmatic advertising platform and a subscription services platform.
With the
acquisition of Millennial Media, AOL will:
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Add a leading supply-side platform for app monetization with over 65,000 apps to its publisher suite of offering |
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Add significant mobile brand advertising scale across ONE by AOL |
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Have access to approximately 1 billion global active unique users and robust addressable and cross-screen targeting capabilities |
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Accelerate its mobile position in key international markets, including Singapore, Japan, UK, France and Germany |
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Add world-class engineering, sales and product talent that specialize in mobile to AOL |
“AOL is well positioned as consumers spend more and more time on mobile devices, and as advertisers, agencies and publishers become more
reliant on programmatic monetization tools,” said Bob Lord, President, AOL. “As we continue to invest in our platforms and technology, the acquisition of Millennial Media accelerates our competitive mobile offering in ONE by AOL and
enhances our current publisher offering with an ‘all in’ monetization platform for app developers.”
“By joining AOL,
we will be adding additional mobile expertise to AOL’s growing technology assets,” said Michael Barrett, President & CEO of Millennial Media. “I am excited by what this acquisition means for our shareholders, our employees
and our partners.”
According to eMarketer, 69% of mobile ad spend will be bought and sold programmatically (more than $14 billion),
and programmatic video will reach $4 billion by 2016. Furthermore, Cowen & Company expects mobile display and video advertising to grow from approximately $3.8 billion in 2015 to $9.2 billion in 2018 at a compound annual growth rate of 35%.
Founded in 2006, Millennial Media is headquartered in Baltimore, MD and has additional U.S. offices in Atlanta, Boston, New York and San
Francisco, and international offices in Hamburg, London, Paris, Singapore and Tokyo. Millennial Media’s portfolio of assets includes acquisitions of TapMetrics, Condaptive, Metaresolver, Jumptap and Nexage.
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The transaction will take the form of a tender offer followed by a merger, with Millennial Media
becoming a wholly owned subsidiary of AOL upon completion. The transaction is subject to customary regulatory approvals and other closing conditions, and is expected to close this fall.
Goldman, Sachs & Co. served as AOL’s financial advisor on the transaction, and Wachtell, Lipton, Rosen & Katz served as
AOL’s legal advisor.
LUMA Partners served as Millennial Media’s financial advisor on the transaction, and Goodwin Procter LLP
served as Millennial Media’s legal advisor.
27. The Company’s stockholders will receive $1.75 in
cash in exchange for each common share of Millennial Media. The Proposed Transaction’s price represents a 30.6 percent premium over Millennial Media’s $1.34 closing share price on January 2, 2015, the last day of trading prior to the
announcement of the Proposed Transaction. As recently as August 3, 2015, Millennial Media traded at a valuation greater than the consideration offered by the Proposed Transaction.
28. The consideration is inadequate because, among other things, the intrinsic value of the Company’s common shares is materially in
excess of the amount offered in the Proposed Transaction. In short, the Proposed Transaction undervalues Millennial Media.
29. Millennial
Media shares have underperformed relative those of the Company’s peers. Below is a chart depicting the relative growth of $10,000
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worth of Millennial Media shares versus $10,000 invested in shares of other companies in the same industry purchased in 2010.
30. Even after the announcement of the Proposed Transaction, Millennial Media continues to be
undervalued according to the Company’s price-book ratio and trailing twelve months price-sales ratio. According to Morningstar.com, as of September 4, 2015, Millennial Media has a price-book ratio of 1.1 compared to an industry
average of 11.7. As of the same date, Millennial Media has a trailing twelve months price-sales ratio of 0.8 compared to an industry average of 1.1 according to Morningstar.com.
31. In sum, the Proposed Transaction comes at the most opportune time, at a time when the Company is positioned for growth in the
Company’s stock price.
32. As these indicators make clear, Millennial Media, if properly exposed
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to the market for corporate control, would bring a price materially in excess of the amount offered in the Proposed Transaction.
| E. |
The Preclusive Deal Protection Devices |
33. The Proposed Transaction is
also unfair because, as part of the Merger Agreement, the Individual Defendants agreed to certain onerous and preclusive deal protection devices that operate conjunctively to make the Proposed Transaction a fait accompli and ensure that no
competing offers will emerge for the Company.
34. The Merger Agreement contains a “no-shop” provision. Pursuant to
Section 6.4(a) of the Merger Agreement, Millennial Media and its subsidiaries must immediately cease and cause to be terminated any existing discussions or negotiations with any person or its representatives with respect to any acquisition
proposal. Specifically, Section 6.4(a) provides that:
Except as otherwise provided for in this Agreement, the Company agrees that it
and its subsidiaries shall, and that it shall use its reasonable best efforts to cause its and their respective Representatives to, immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a Competing
Proposal and, until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 8.1, not, directly or indirectly: (i) solicit, initiate or knowingly facilitate or encourage any Competing
Proposal; (ii) participate in any negotiations regarding, or furnish to any person any nonpublic information with respect to, any Competing Proposal; (iii) engage in discussions with any person with respect to any Competing Proposal;
(iv) approve or recommend any Competing Proposal; (v) enter into any letter of intent or similar document or any agreement or
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commitment providing for any Competing Proposal; (vi) take any action to make the provisions of any “fair price,” “moratorium,” “control share acquisition,”
“business combination” or other similar anti-takeover statute or regulation (including any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the DGCL), or any restrictive
provision of any applicable anti-takeover provision in the Restated Certificate of Incorporation or By-laws of the Company, inapplicable to any person other than Parent and its Affiliates or to any transactions constituting or contemplated by a
Competing Proposal; or (vii) resolve or agree to do any of the foregoing. The Company shall promptly after the date hereof instruct each person that has executed a confidentiality agreement (other than the Confidentiality Agreement) relating to
a Competing Proposal or potential Competing Proposal with or for the benefit of the Company promptly to return to the Company or destroy all information, documents, and materials relating to the Competing Proposal or to the Company or its
businesses, operations or affairs heretofore furnished by the Company or any of its Representatives to such person or any of its Representatives in accordance with the terms of any confidentiality agreement with such person, and shall use reasonable
best efforts to enforce, and not waive without Parent’s prior written consent, any standstill or similar provision in any confidentiality or other agreement with such person; provided that if the Company Board determines in good faith, after
consultation with its outside legal advisors, that it would be inconsistent with the directors’ exercise of their fiduciary duties under applicable Law not to do so, the Company may waive any standstill or similar provisions in its agreements
to the extent necessary to permit a person to make, on a confidential basis to the Company Board, a Competing Proposal, conditioned upon such person agreeing to disclosure of such Competing Proposal to Parent and Acquisition Sub, in each case as
contemplated by and subject to compliance with this Section 6.4.
35. In addition, the Merger Agreement contains a “matching
rights” provision that serves as a deterrent to any alternative acquisition proposals. Pursuant to Section 6.4(d) of the Merger Agreement, the Company may not revise or withdraw the Board’s recommendation of the Proposed Transaction
or terminate
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the Merger Agreement for a superior proposal without first providing AOL with advance notice of the same, including the material terms and conditions of such proposal, as well as at least
three business days to renegotiate the terms of its own proposal. Further, any amendment to the financial terms or other material terms of the alternative proposal requires a new notice period of three business days before an adverse recommendation
change is made. Specifically, Section 6.4(d) provides, in relevant part, that:
Notwithstanding anything to the contrary contained in
this Agreement, at any time prior to the Acceptance Time, if (i) an event, fact, circumstance, development, change or occurrence (an “Intervening Event”) that materially affects the business, assets or operations of the Company that
is unknown to the Company Board as of the date of this Agreement and reasonably should not have been known as of the date of this Agreement, becomes known to the Company Board or (ii) the Company receives a Competing Proposal which the Company
Board concludes in good faith, after consultation with outside legal and financial advisors, constitutes a Superior Proposal after giving effect to all of the adjustments to the terms of this Agreement which may be offered by Parent, the Company
Board may effect a Change of Recommendation if the Company Board has concluded in good faith, after consultation with the Company’s outside legal advisors, that the failure of the Company Board to make such Change of Recommendation would be
inconsistent with the directors’ exercise of their fiduciary duties under applicable Law; provided, however, that such action may be only be taken (A) if the Company shall have (x) fully complied with this Section 6.4 and
(y) first provided prior written notice to Parent in advance of its intention to make a Change of Recommendation and the reasons therefor, including the terms of any Competing Proposal with respect to which the Change of Recommendation relates
and the identity of the person making such Competing Proposal (it being understood that the delivery of such notice shall not, in and of itself, be deemed a Change in Recommendation) and (B) at a time that is after the third (3rd)
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Business Day following the Company’s delivery to Parent of such notice, during which time Parent shall be entitled to deliver to the Company one or more proposals for amendments to this
Agreement and, if requested by Parent, the Company shall negotiate with the Parent in good faith with respect thereto, if the Company Board determines in good faith, after consultation with the Company’s outside legal advisors, taking into
account all amendments or revisions to this Agreement proposed by Parent, that the failure of the Company Board to effect such Change of Recommendation still would be inconsistent with the directors’ exercise of their fiduciary duties under
applicable Law. Any material amendment to a Competing Proposal to which such Change of Recommendation relates, including any revision to price, shall require the Company to deliver to Parent a new notice and again comply with the requirements of
this Section 6.4(d) with respect to such revised Competing Proposal.
36. Moreover, the Merger Agreement contains an additional
“information rights” provision. Pursuant to Section 6.4(b) of the Merger Agreement, promptly after the receipt by Millennial Media of any request for information or other inquiry that Millennial Media reasonably believes could lead to
any proposal or other transaction, Millennial Media must provide AOL with the material terms and conditions of any such request or inquiry, the identity of the person making any such request or inquiry, and copies of any written offer, proposal or
request, or inquiry. Specifically, Section 6.4(b) provides, in relevant part:
From and after the execution of this Agreement, the
Company shall notify Parent promptly (but in any event within 24 hours) of the receipt of any Competing Proposal, and (A) if it is in writing, deliver to Parent a copy of such Competing Proposal and any related draft agreements and other
written material setting forth the terms and conditions of such Competing Proposal or (B) if oral, provide to Parent a detailed summary of the material terms and conditions
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thereof including the identity of the person making such competing proposal. The Company shall keep Parent reasonably informed on a prompt and timely basis of the status and material details of
any such Competing Proposal and with respect to any material change to the terms of any such Competing Proposal within 24 hours of such material change.
Thus, AOL can easily match any competing offer because it is granted unfettered access to the offer, in its entirety, and has significant matching rights that
eliminate any leverage that the Company has in receiving a competing offer.
37. Section 8 provides that under specified
circumstances, including if Millennial Media terminates the Merger Agreement to approve or recommend a superior proposal, Millennial Media pay a termination fee of $10,257,222 in connection with the Merger Agreement if the Proposed Transaction is
terminated under certain circumstances, which all but ensures that no competing offer will be forthcoming.
38. This provision, coupled
with the “no-shop” provision, “matching rights” provision, and “information rights” provision, all but ensures that no competing offer will be forthcoming.
39. Ultimately, these preclusive deal protection provisions improperly restrain the Company’s ability to solicit or engage in
negotiations with any third party regarding a proposal to acquire all or a significant interest in the Company. The circumstances under which the Board may respond to an unsolicited written bona fide proposal for an alternative transaction
that constitutes or would
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reasonably constitute a superior proposal are too narrowly circumscribed to provide an effective “fiduciary out” under the circumstances.
FIRST CAUSE OF ACTION
(Against the Individual Defendants for Breach of Fiduciary Duties)
40. Plaintiff repeats and realleges each allegation set forth herein.
41. The Individual Defendants have violated fiduciary duties owed to stockholders of Millennial Media.
42. By the acts, transactions, and courses of conduct alleged herein, the Individual Defendants have failed to obtain a fair price for the
stockholders of Millennial Media.
43. As alleged herein, the Individual Defendants have initiated a process to sell Millennial Media that
undervalues the Company. In addition, by agreeing to the Proposed Transaction, the Individual Defendants have capped the price of Millennial Media at a price that does not adequately reflect the Company’s true value. The Individual Defendants
also failed to sufficiently inform themselves of Millennial Media’s value, or disregarded the true value of the Company. Furthermore, any alternate acquiror will be faced with engaging in discussions with a management team and Board that are
committed to the Proposed Transaction.
44. As a result of the actions of Defendants, Plaintiff and the Class will
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suffer irreparable injury in that they have not and will not receive a fair price for their equity interest in Millennial Media. Unless the Individual Defendants are enjoined by the Court, they
will continue to breach their fiduciary duties owed to Plaintiff and the members of the Class, all to the irreparable harm of the members of the Class.
45. Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can
Plaintiff and the Class be fully protected from immediate and irreparable injury, which the Individual Defendants’ actions threaten to inflict.
SECOND CAUSE OF ACTION
(Against Millennial Media, AOL, and Merger Sub for Aiding and
Abetting the Individual Defendants’ Breaches of Fiduciary Duty)
46. Plaintiff repeats and realleges each allegation set forth herein.
47. Millennial Media, AOL, and Merger Sub are acting with knowledge of, or with reckless disregard to, the fact that the Individual Defendants
are in breach of their fiduciary duties to the stockholders of Millennial Media, and are participating in such breaches of fiduciary duties.
48. Millennial Media, AOL, and Merger Sub knowingly aided and abetted the Individual Defendants’ wrongdoing alleged herein. In so doing,
Millennial Media, AOL, and Merger Sub have rendered substantial assistance in order to effectuate the Individual Defendants’ plan to consummate the Proposed
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Transaction in breach of their fiduciary duties.
49. Plaintiff has no adequate
remedy at law.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands relief in his favor and in favor of the Class and against Defendants as follows:
A. Declaring that this action is properly maintainable as a Class action and certifying Plaintiff as Class representative;
B. Enjoining Defendants, their agents, counsel, employees, and all persons acting in concert with them from consummating the Proposed
Transaction, unless and until the Company adopts and implements a procedure or process to obtain a merger agreement providing the best available terms for stockholders;
C. Rescinding, to the extent already implemented, the Proposed Transaction or any of the terms thereof, or granting Plaintiff and the Class
rescissory damages;
D. Directing the Individual Defendants to account to Plaintiff and the Class for all damages suffered as a result of
the wrongdoing;
E. Awarding Plaintiff the costs and disbursements of this action, including reasonable attorney’ and experts’
fees; and
F. Granting such other and further equitable relief as this Court may deem just and proper.
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| Dated: September 10, 2015 |
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RIGRODSKY & LONG, P.A. |
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By: |
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/s/ Brian D. Long |
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Seth D. Rigrodsky (#3147) |
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Brian D. Long (#4347) |
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Gina M. Serra (#5387) |
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Jeremy J. Riley (#5791) |
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2 Righter Parkway, Suite 120 |
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Wilmington, DE 19803 |
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(302) 295-5310 |
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Attorneys for Plaintiff |
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| OF COUNSEL: |
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| BROWER PIVEN
A PROFESSIONAL CORPORATION |
| Brian C. Kerr 475 Park Avenue South, 33rd
Floor New York, NY 10016 (212) 501-9000 |
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Exhibit (a)(5)(C)
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EFiled: Sep 10 2015 05:44PM EDT
Transaction ID 57846723 Case
No. 11496- |
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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| KIEN CHEN, on Behalf of Himself and All Others Similarly Situated, |
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C.A. No. - |
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| Plaintiff,
v. |
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| MICHAEL G. BARRETT, PATRICK J. KERINS, ROBERT P. GOODMAN, THOMAS R. EVANS, ROSS B. LEVINSOHN, WENDA HARRIS MILLARD, JAMES A THOLEN, AOL INC., and MARS ACQUISITION SUB, INC. |
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| Defendants. |
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VERIFIED CLASS ACTION COMPLAINT
Plaintiff Kien Chen (“Plaintiff”), by his undersigned attorneys, for this Verified Class Action Complaint, alleges upon information
and belief, except as to the allegations specifically pertaining to Plaintiff, which are based on personal knowledge, as follows:
NATURE OF THE ACTION
1. This is a stockholder class action brought by Plaintiff on behalf of the public stockholders of Millennial Media, Inc.
(“Millennial” or the “Company”) against Millennial, the Company’s Board of Directors (the “Board” or the “Individual Defendants”), AOL Inc. (“AOL”), and Mars Acquisition Sub, Inc. (“Merger
Sub”). This action seeks to enjoin defendants from further breaching their fiduciary duties in their pursuit of a sale of the Company at an unfair price
1
through an unfair process that was tilted in favor of AOL (the “Proposed Acquisition”). Defendants announced on September 3, 2015, that the Board had agreed to sell Millennial to
AOL, whereby AOL will acquire all of the outstanding common stock of Millennial for $1.75 per share in cash (the “Proposed Consideration”). The Proposed Acquisition, valued at approximately $238 million, undervalues Millennial and is
marred by preclusive deal protections that effectively prevent the Company from receiving a superior offer.
2. Millennial is an
independent mobile advertising marketplace that delivers products and services to advertisers and developers. Millennial offers advertisers a suite of solutions that allow them to reach and connect with their target audiences across
screens—from smartphones, tablets, and other mobile devices to personal computers. Millennial also provides developers with tools and services that allow their software applications (or “apps”) to display video, banner ads,
interactive rich media, and native ad formats. Through this relationship and access to Millennial’s platform, developers gain access to advertising campaigns from brand marketers and performance-based advertisers. In return, developers supply
Millennial with space on their apps to deliver ads for their advertiser clients and provide Millennial with access to anonymous data associated with their apps and users.
2
3. Defendants have publicly admitted that mobile display and video advertising will grow from
$3.8 billion in 2015 to $9.2 billion in 2018, a compound annual growth rate equal to an amazing 35%. Ad space on mobile phone apps will be a primary driver of this growth. In fact, studies show that 84% of mobile phone use is spent on mobile phone
apps.
4. Millennial has positioned itself to substantially benefit from this industry boom. The Company has invested heavily in automated
technology for mobile advertising and maintains a substantial footprint in mobile ad space. Millennial’s mobile ad space reaches over 670 million unique users worldwide and includes more than 65,000 apps. In fact, the Company expects its
mobile advertisement revenues to grow 3.5% in fiscal 2015 compared to fiscal 2014. Even defendant Michael G. Barrett (“Barrett”), Millennial’s President and Chief Executive Officer (“CEO”), recognizes that the Company
“ha[s] built a strong, comprehensive mobile ad marketplace, with what we believe are the right tools and talent to help meet the needs of our dynamic market . . . . ”
5. Unfortunately, defendants are attempting to prevent Millennial’s public stockholders from appreciating this upside, as the Individual
Defendants decided to sell Millennial now, right as it is set to capitalize on an impending industry boom and its strong market position. In fact, as recently as August 8, 2015, Millennial’s stock traded above the deal price.
3
6. Additional factors further demonstrate that the Proposed Consideration is unfair. First,
Millennial’s financials indicate that its current slump in stock price is temporary. For example, Millennial has beat consensus analyst estimates for adjusted earnings per share (“EPS”) and adjusted net income in each of the last four
quarters, and has bested consensus analyst estimates for sales in three of the last four quarters. Second, at least one analyst has recently predicted a target price well above the offer price of $1.75. Canaccord Genuity has had a target price of $2
since August 31, 2015. Third, the average one-day premium to a target’s stock price for transactions valued between $100 million and $500 million in the last year in the internet software and services industry is about 49.2%. In
comparison, the premium AOL is offering Millennial stockholders here is a mere 30.6%.
7. In order to lock up the Proposed Acquisition on
these unfair terms, the defendants adopted numerous preclusive and onerous deal protection devices, which are set forth in the Agreement and Plan of Merger entered into on September 3, 2015 (the “Merger Agreement”). These provisions,
which collectively preclude any competing offers for the Company, include: (i) an exorbitant termination fee of more than $10 million if the Company accepts a competing bid; (ii) a no-solicitation clause; (iii) a three business-day
matching rights period during which AOL can match any superior proposal received by the
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Company; and (iv) a requirement that the Individual Defendants issue a press release reaffirming their recommendation in favor of the Proposed Acquisition upon AOL’s request.
8. In short, the Proposed Acquisition is designed to unlawfully divest Millennial’s public stockholders of the Company’s valuable
assets for grossly inadequate consideration and allow Individual Defendants to reap the benefits of accelerated vesting of unvested stock and deferred compensation. To remedy defendants’ breaches of fiduciary duties and other misconduct,
Plaintiff seeks injunctive relief preventing consummation of the Proposed Acquisition, unless and until the Company adopts and implements a procedure or process to obtain a transaction that provides the best possible terms for stockholders, or in
the event the Proposed Acquisition is consummated recover damages.
THE PARTIES
9. Plaintiff is and has been a stockholder of Millennial at all times relevant hereto.
10. Millennial is a Delaware corporation with principal executive offices located at 2400 Boston Street, Suite 300, Baltimore, Maryland.
Millennial is an independent mobile advertising marketplace that delivers products and services to advertisers and developers. Millennial offers advertisers a suite of solutions that allow them to reach and connect with their target audiences across
screens—from
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smartphones, tablets, and other mobile devices to personal computers. Millennial also provides developers with tools and services that allow their apps to display video, banner ads, interactive
rich media and native ad formats. Through this relationship and access to Millennial’s platform, developers gain access to advertising campaigns from brand marketers and performance-based advertisers. In return, developers supply Millennial
with space on their apps to deliver ads for their advertiser clients and provide Millennial with access to anonymous data associated with their apps and users. As of December 31, 2014, Millennial had 636 employees. Upon completion of the
Proposed Acquisition, defendant Merger Sub will merge with and into Millennial with Millennial surviving the merger as a wholly owned subsidiary of AOL.
11. Defendant Barrett is Millennial’s President, CEO, and a director and has been since January 2014.
12. Defendant Patrick J. Kerins is Millennial’s Chairman of the Board and has been since at least February 2014; lead director and has
been since November 2013; and a director and has been since November 2009.
13. Defendant Robert P. Goodman is a Millennial director and
has been since June 2009.
14. Defendant Thomas R. Evans is a Millennial director and has been since February 2014.
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15. Defendant Ross B. Levinsohn is a Millennial director and has been since February 2014.
16. Defendant Wenda Harris Millard is a Millennial director and has been since May 2009.
17. Defendant James A. Tholen is a Millennial director and has been since May 2011.
18. Defendant AOL is a Delaware corporation with principal executive offices at 770 Broadway, New York, New York. Defendant AOL is a global
media technology company with a worldwide audience and a suite of digital brands, products, and services that it offers to consumers, advertisers, publishers, and subscribers. Defendant AOL attracts and engages consumers by creating and offering
high quality branded online digital content, products, and services and providing valuable advertising services on both its owned and operated properties and third-party websites.
19. Defendant Merger Sub is a Delaware corporation and wholly owned subsidiary of defendant AOL. Upon completion of the Proposed Acquisition,
defendant Merger Sub will merge with and into Millennial and cease its separate corporate existence.
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SUBSTANTIVE ALLEGATIONS
The Proposed Acquisition
20. On
September 3, 2015, AOL issued press release (which Millennial posted on its website) announcing that the Individual Defendants had agreed to sell Millennial to AOL. Under the terms of the agreement, holders of Millennial common stock will
receive $1.75 for each share of Millennial common stock they own. The all-cash transaction values Millennial at approximately $2.38 million. AOL’s September 3, 2015 press release stated, in relevant part:
AOL’s Suite of Publisher Offerings Will be Enhanced with a Leading Monetization Platform for App Developers with More than 65,000 Apps
NEW YORK, September 3, 2015 – AOL today announced its continued investment in cross platform programmatic technology
for marketers and publishers by signing an agreement to acquire Millennial Media, Inc. (NYSE: MM), a leading end-to-end mobile platform, for $1.75 per share of Millennial Media common stock.
Following AOL’s recent acquisition by Verizon, which operates the nation’s largest and most reliable wireless network, and its global
enterprise-level partnership with Microsoft, today’s announcement further strengthens AOL’s mobile capabilities and underlines its position as the first global mobile media technology company. AOL now operates scaled global content brands,
a scaled global content delivery network, a scaled global programmatic advertising platform and a subscription services platform.
With the
acquisition of Millennial Media, AOL will:
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Add a leading supply-side platform for app monetization with over 65,000 apps to its publisher suite of offerings |
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Add significant mobile brand advertising scale across ONE by AOL |
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Have access to approximately 1 billion global active unique users and robust addressable and cross-screen targeting capabilities |
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Accelerate its mobile position in key international markets, including Singapore, Japan, UK, France and Germany |
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Add world-class engineering, sales and product talent that specialize in mobile to AOL |
“AOL is well positioned as consumers spend more and more time on mobile devices, and as advertisers, agencies and publishers become more
reliant on programmatic monetization tools,” said Bob Lord, President, AOL. “As we continue to invest in our platforms and technology, the acquisition of Millennial Media accelerates our competitive mobile offering in ONE by AOL and
enhances our current publisher offering with an ‘all in’ monetization platform for app developers.”
“By joining AOL,
we will be adding additional mobile expertise to AOL’s growing technology assets,” said Michael Barrett, President & CEO of Millennial Media. “I am excited by what this acquisition means for our shareholders, our employees
and our partners.”
According to eMarketer, 69% of mobile ad spend will be bought and sold programmatically (more than $14 billion),
and programmatic video will reach $4 billion by 2016.* Furthermore, Cowen & Company expects mobile display and video advertising to grow from approximately $3.8 billion in 2015 to $9.2 billion in 2018 at a compound annual growth rate of
35%.
Founded in 2006, Millennial Media is headquartered in Baltimore, MD and has additional U.S. offices in Atlanta, Boston, New York and
San Francisco, and international offices in Hamburg, London, Paris, Singapore and Tokyo. Millennial Media’s portfolio of assets includes acquisitions of TapMetrics, Condaptive, Metaresolver, Jumptap and Nexage.
The transaction will take the form of a tender offer followed by a merger, with Millennial Media becoming a wholly owned subsidiary
9
of AOL upon completion. The transaction is subject to customary regulatory approvals and other closing conditions, and is expected to close this fall.
21. Also on September 3, 2015, Millennial filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission wherein it
disclosed the Merger Agreement. The Merger Agreement contains a number of draconian deal protection devices designed to preclude any competing bids for Millennial from emerging in the period following the announcement of the Proposed Acquisition,
which effectively locked-up the deal in favor of AOL. As the Individual Defendants were duty bound to maximize stockholder value in connection with the Proposed Acquisition, the inclusion of these provisions, as detailed below, constitutes a further
breach of their fiduciary duties.
22. Under the Merger Agreement, Millennial is subject to a no-solicitation clause that prohibits the
Company from seeking a superior offer for its stockholders. Specifically, section 6.4(a) of the Merger Agreement states, in pertinent part:
Section 6.4 Solicitation; Change of Recommendation.
(a) Except as otherwise provided for in this Agreement, the Company agrees that it and its subsidiaries shall, and that it shall use its
reasonable best efforts to cause its and their respective Representatives to, immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a Competing Proposal and, until the earlier of the Effective Time or
the date, if any, on which this Agreement is terminated pursuant to Section 8.1, not, directly or indirectly: (i) solicit, initiate or knowingly facilitate or
10
encourage any Competing Proposal; (ii) participate in any negotiations regarding, or furnish to any person any nonpublic information with respect to, any Competing Proposal;
(iii) engage in discussions with any person with respect to any Competing Proposal; (iv) approve or recommend any Competing Proposal; (v) enter into any letter of intent or similar document or any agreement or commitment providing for
any Competing Proposal; (vi) take any action to make the provisions of any “fair price,” “moratorium,” “control share acquisition,” “business combination” or other similar anti-takeover statute or
regulation (including any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the DGCL), or any restrictive provision of any applicable anti-takeover provision in the Restated Certificate of
Incorporation or By-laws of the Company, inapplicable to any person other than Parent and its Affiliates or to any transactions constituting or contemplated by a Competing Proposal; or (vii) resolve or agree to do any of the foregoing. The
Company shall promptly after the date hereof instruct each person that has executed a confidentiality agreement (other than the Confidentiality Agreement) relating to a Competing Proposal or potential Competing Proposal with or for the benefit of
the Company promptly to return to the Company or destroy all information, documents, and materials relating to the Competing Proposal or to the Company or its businesses, operations or affairs heretofore furnished by the Company or any of its
Representatives to such person or any of its Representatives in accordance with the terms of any confidentiality agreement with such person, and shall use reasonable best efforts to enforce, and not waive without Parent’s prior written consent,
any standstill or similar provision in any confidentiality or other agreement with such person; provided that if the Company Board determines in good faith, after consultation with its outside legal advisors, that it would be inconsistent
with the directors’ exercise of their fiduciary duties under applicable Law not to do so, the Company may waive any standstill or similar provisions in its agreements to the extent necessary to permit a person to make, on a confidential basis
to the Company Board, a Competing Proposal, conditioned upon such person agreeing to disclosure of such Competing Proposal to Parent and Acquisition Sub, in each case as contemplated by and subject to compliance with this Section 6.4.
11
23. Though the Merger Agreement ostensibly has a “fiduciary out” provision that allows
the Company to negotiate with other bidders, this provision would require a potential acquirer to first make an unsolicited offer. Without access to non-public information, which the Company is prevented from offering under the Merger Agreement
prior to the receipt of an offer that the Company reasonably expects to lead to a superior deal, no other bidders will emerge to make a superior proposal.
24. Even if the Company does receive an unsolicited competing bid, pursuant to Section 6.4(c) of the Merger Agreement, the Company must
issue a press release that expressly reaffirms the Company’s recommendation in support of the Proposed Acquisition within four business days of AOL’s written request. AOL may make such a request up to twice for each competing bid. Pursuant
to section 6.4(d), the Board is only excused from its obligation under section 6.4(c) if: (i) the Board’s fiduciary duties require it to change its recommendation; and (ii) before changing its recommendation, the Board notifies AOL of
its intent to change its recommendation and allows AOL three business days to match the competing bid.
25. Furthermore, under sections
6.4(d) and 6.4(f) of the Merger Agreement, should it receive an unsolicited bid, the Company must notify AOL of the bidder’s offer and all changes thereto. Thereafter, should the Board determine
12
that the unsolicited offer is superior, AOL is granted three business days to amend the terms of the Merger Agreement to make a counter offer that only needs to be as favorable to the
Company’s stockholders as the unsolicited offer. AOL will be able to match the unsolicited offer because it is granted unfettered access to the unsolicited offer, in its entirety, eliminating any leverage the Company has in receiving the
unsolicited offer.
26. Also, pursuant to Section 8.3 of the Merger Agreement, Millennial must pay AOL an exorbitant $10,257,222
termination fee if it accepts a superior proposal. The termination fee represents more than 4% of the total equity value of the Proposed Acquisition and increases the amount that a competing bidder would have to offer to acquire the Company by at
least $0.07 per share before it would even potentially qualify as a superior proposal under the Merger Agreement.
The Proposed Acquisition Undervalues
Millennial
27. The Individual Defendants’ fiduciary duties require them to maximize stockholder value when entering into a
change-in-control transaction such as the Proposed Acquisition. Here, however, the Individual Defendants’ eagerness to enter into an acquisition with AOL was not designed to obtain the maximum price for Millennial stockholders. As a result, the
Company’s public stockholders have been, and will continue to be, denied the fair process and arm’s-length negotiated terms to which they are entitled to in a sale of their Company. Indeed, the
13
Proposed Consideration does not reflect the true inherent value of the Company as known to the Individual Defendants and AOL.
28. At the expense of the Company’s stockholders, the Individual Defendants sold the Company to AOL during a time that Millennial’s
stock price is temporarily depressed, and therefore does not accurately reflect the true value of the Company. In fact, as recently as August 8, 2015, Millennial’s stock traded above the Proposed Consideration. Further, as defendants’
own press release announcing the Proposed Acquisition indicates, industry experts expect mobile display and video advertising to grow from $3.8 billion in 2015 to $9.2 billion in 2018 at a compound annual growth rate of 35%. Ad space on mobile phone
apps will be a primary driver of this growth. Studies show that 84% of mobile phone use is spent on mobile phone apps.
29. Millennial has
positioned itself to benefit substantially from this industry boom. The Company has invested heavily in automated technology for mobile advertising and maintains a substantial footprint in mobile ad space. In fact, Millennial’s mobile ad space
reaches over 670 million unique users worldwide and includes more than 65,000 apps. Moreover, Millennial recently acquired Nexage, a leader in mobile supply-side platform and advertising exchange. The Company announced the acquisition via press
release on September 23, 2014. According to the press release, Nexage’s offerings accelerate Millennial’s “leading
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position in mobile advertising” and are strong compliments to its “independent mobile advertising platform and vital programmatic marketplace.” In the Company’s press release
dated December 4, 2014, regarding the completion of the acquisition, defendant Barrett, Millennial’s President and CEO, further explained the significance of Millennial’s acquisition of Nexage to Millennial’s future, stating:
The entire industry is facing a programmatic shift. Advertisers and publishers are moving toward automated channels to buy and sell
measurable media, and Millennial Media is uniquely positioned to help them succeed. We cut our teeth as a full service network, so we understand the unique challenges of today’s mobile-centric publishers. Now, we have the technology and smarts
to help them achieve those objectives with greater transparency and less friction.... The reaction we received from advertisers, publishers, and partners has been overwhelmingly positive. We are excited to formally welcome the Nexage team into the
Millennial Media family.
Later, in the September 3, 2015 press release announcing the Proposed Acquisition, defendant Barrett reaffirmed his
confidence in Millennial’s product offerings and market position, recognizing that the Company “ha[s] built a strong, comprehensive mobile ad marketplace, with what we believe are the right tools and talent to help meet the needs of our
dynamic market. . . . ”
30. Millennial’s financials also indicate an impending turnaround for the Company. Notably, Millennial
continues to see growth in its mobile advertisement revenues—the Company expects its mobile advertisement revenues to grow 3.5% in fiscal 2015 compared to fiscal 2014. Moreover, on March 9, 2015, Millennial
15
issued a press release announcing its 2014 fourth quarter and full year financial results. According to that press release, Millennial’s revenue increased to $296.2 million for the full year
2014, compared to $259.2 million for the full year 2013. Defendant Barrett further commented on the Company’s improving condition:
Millennial Media ended 2014 on a high note. We successfully completed our acquisition of Nexage, added several key management
personnel, and exceeded our fourth quarter revenue expectations.... Through these accomplishments, we’ve entered 2015 with a stronger, more complete set of tools to help us execute on our full-stack marketplace vision and make mobile
simple for our partners. We’ve already begun inventory integrations to our owned and operated programmatic exchange, The Millennial Media Exchange powered by Nexage, which will enable hundreds of mobile ad buyers to transact with
thousands of developers and publishers. Supported by the foundation of our managed media business, we expect to accelerate our programmatic platform capabilities and revenue production during 2015.
31. Defendant Barrett again touted Millennial’s improving situation and benefits from the Nexage acquisition on May 5, 2015, when
the Company issued a press release announcing its first quarter 2015 financial results. Specifically, defendant Barrett commented:
Millennial Media is entering its second quarter with a strong foundation. First quarter results exceeded guidance across the board and
we’re seeing early success through our Nexage integration.... Combined with solid revenues from our Managed Media business, the pieces of our owned and operated programmatic exchange are fully assembled and we’re executing on our
full-stack, independent marketplace vision. We believe we are well positioned in the growing mobile ad ecosystem and expect to accelerate our programmatic platform capabilities and revenue production throughout 2015.
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32. In fact, Millennial has beat consensus analyst estimates for adjusted EPS and adjusted net
income in each of the last four quarters, and has bested consensus analyst estimates for sales in three of the last four quarters. Moreover, on August 10, 2015, the Company announced its financial results for the second quarter of its 2015
fiscal year. Among other things, Millennial announced that its gross margin increased to 43.9% and loss decreased to $0.11 per share, a substantial improvement from its results during the same time period last year of 40.2% gross margin and a loss
of $0.14 per share.
33. With Millennial’s earning potential expected to grow substantially by 2018, the Proposed Consideration
significantly undervalues Millennial’s growth potential and future revenue potential. As a result, stockholders will only receive $1.75 per share in the transaction.
34. Additional factors further demonstrate that the Proposed Consideration is too low. For example, at least one analyst has recently
predicted a target price well above the offer price of $1.75. Canaccord Genuity has had a target price of $2 since August 31, 2015. In addition, the average one-day premium to a target’s stock price for transactions valued between $100
million and $500 million in the last year in the internet software and services industry is about 49.2%. In comparison, the premium AOL is offering Millennial stockholders here is a mere 30.6%
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CLASS ACTION ALLEGATIONS
35. Plaintiff brings this action as a class action pursuant to Court of Chancery Rule 23 on behalf of himself and all other public
stockholders of Millennial that have been or will be harmed by defendants’ conduct described herein (the “Class”). Excluded from the Class are defendants and any individual or entity affiliated with any defendant.
36. This action is properly maintainable as a class action.
37. The Class is so numerous that joinder of all members is impracticable. According to the Merger Agreement, there were more than
141 million shares of Millennial common stock outstanding as of September 1, 2015.
38. There are questions of law and fact that
are common to the Class and that predominate over questions affecting any individual Class member. The common questions include the following:
(a) whether the Individual Defendants have breached their fiduciary duties of loyalty, good faith, and/or due care with respect to Plaintiff
and the other members of the Class in connection with the Proposed Acquisition;
(b) whether the Individual Defendants breached their
fiduciary duty to secure and obtain the best price reasonably available under the circumstances for the benefit of Plaintiff and the other members of the Class in connection with the Proposed Acquisition;
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(c) whether the Individual Defendants, in bad faith and for improper motives, impeded or erected
barriers designed to discourage other potentially interested parties from making an offer to acquire the Company or its assets;
(d)
whether AOL and Merger Sub aided and abetted any of the Individual Defendants’ breaches of fiduciary duties owed to Plaintiff and the other members of the Class in connection with the Proposed Acquisition; and
(e) whether Plaintiff and the other members of the Class would suffer irreparable injury were the Proposed Acquisition consummated.
39. Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to
the Class.
40. Plaintiff has retained competent counsel experienced in litigation of this nature and will fairly and adequately represent
and protect the interests of the Class.
41. The prosecution of separate actions by individual members of the Class would create a risk of
inconsistent or varying adjudications with respect to individual members of the Class that would establish incompatible standards of conduct for the party opposing the Class.
42. Defendants have acted, or failed to act, on grounds generally applicable to the Class with respect to the matters complained of herein,
thereby
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making appropriate the relief sought herein with respect to the Class as a whole.
FIRST CAUSE OF ACTION
(Claim for Breach of Fiduciary Duties Against the Individual Defendants)
43. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.
44. The Individual Defendants have violated the fiduciary duties of care, loyalty, and good faith owed to the public stockholders of
Millennial and have acted to put their personal interests ahead of the interests of Millennial stockholders.
45. By the acts,
transactions, and course of conduct alleged herein, defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive Plaintiff and the other members of the Class of the true value of Millennial.
46. The Individual Defendants have violated their fiduciary duties by entering Millennial into the Proposed Acquisition without regard to the
effect of the Proposed Acquisition on Millennial’s stockholders.
47. As demonstrated by the allegations above, the Individual
Defendants failed to exercise the care required and breached their duty of loyalty owed to the stockholders of Millennial because, among other reasons:
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(a) they failed to take steps to maximize the value of Millennial to its public stockholders; and
(b) they failed to properly value Millennial and its various assets and operations.
48. Because the Individual Defendants control the business and corporate affairs of Millennial, and have access to private corporate
information concerning Millennial’s assets, business, and future prospects, there exists an imbalance and disparity of knowledge and economic power between them and the public stockholders of Millennial that makes it inherently unfair for them
to pursue and recommend the Proposed Acquisition wherein they will reap disproportionate benefits to the exclusion of maximizing stockholder value.
49. By reason of the foregoing acts, practices, and course of conduct, the Individual Defendants have failed to exercise ordinary care and
diligence in the exercise of their fiduciary duties toward Plaintiff and the other members of the Class.
50. The Individual Defendants
are not acting in good faith toward Plaintiff and the other members of the Class, and have breached and are breaching their fiduciary duties to the Class.
51. As a result of the Individual Defendants’ unlawful actions, Plaintiff and the other members of the Class will be irreparably harmed
in that they will not
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receive their fair portion of the value of Millennial’s assets and operations. Unless the Proposed Acquisition is enjoined by the Court, the Individual Defendants will continue to breach
their fiduciary duties owed to Plaintiff and the members of the Class, and may consummate the Proposed Acquisition, all to the irreparable harm of the members of the Class.
52. Plaintiff and the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and
the Class be fully protected from the immediate and irreparable injury that defendants’ actions threaten to inflict.
SECOND CAUSE
OF ACTION
(Claim for Aiding and Abetting Breaches of Fiduciary Duty
Against AOL and Merger Sub)
53. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.
54. Defendants AOL and Merger Sub knowingly assisted the Individual Defendants’ breaches of fiduciary duties in connection with the
Proposed Acquisition, which, without such aid, would not have occurred. In connection with discussions regarding the Proposed Acquisition, Millennial provided, and AOL and Merger Sub obtained, sensitive, non-public information concerning Millennial
and, thus, had unfair advantages that are enabling AOL to acquire the Company at an unfair and inadequate price.
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55. As a result of this conduct, Plaintiff and the other members of the Class have been and will
be damaged in that they have been and will be prevented from obtaining a fair price for their Millennial shares.
56. As a result,
Plaintiff and the Class members are being irreparably harmed.
57. Plaintiff and the Class have no adequate remedy at law. Only through
the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury that defendants’ actions threaten to inflict.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands injunctive relief, in his favor and in favor of the Class and against defendants as follows:
A. Declaring that this action is properly maintainable as a class action and certifying Plaintiff’s counsel as Lead Counsel;
B. Enjoining defendants, their agents, counsel, employees, and all persons acting in concert with them from consummating the Proposed
Acquisition, unless and until the Company adopts and implements a procedure or process reasonably designed to enter into a merger agreement providing the best possible value for stockholders;
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C. To the extent that the Proposed Acquisition is consummated before this Court’s entry of
final judgment, award rescissory damages;
D. Directing defendants to account to Plaintiffs and the Class for all damages suffered by them
as a result of defendants’ wrongful conduct alleged herein;
E. Awarding Plaintiff the costs and disbursements of this action,
including reasonable attorneys’ and experts’ fees; and
F. Granting such other and further equitable relief as this Court may
deem just and proper.
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ANDREWS & SPRINGER, LLC |
| OF COUNSEL: |
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By: |
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/s/ Peter B. Andrews |
| ROBBINS ARROYO LLP |
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Peter B. Andrews (Del. Bar No. 4623) |
| Brian J. Robbins, Esq. |
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Craig J. Springer (Del. Bar No. 5529) |
| Stephen J. Oddo, Esq. |
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3801 Kennett Pike, |
| 600 B Street, Suite 1900 |
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Building C, Suite 305 |
| San Diego, CA 92101 |
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Wilmington, DE 19807 |
| (619) 525-3990 |
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(302) 504-4957 |
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| LAW OFFICES OF BERNARD M. GROSS, P.C. |
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Counsel for Plaintiff |
| Deborah R. Gross, Esq. |
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| 100 Penn Square East, Suite 450 |
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| Philadelphia, PA 19107 |
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| Counsel for Plaintiff |
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| DATED: September 10, 2015 |
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Exhibit (a)(5)(D)
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EFiled: Sep 15 2015
02:31PM EDT
Transaction ID 57860645
Case No. 11503 |
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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| JOSEPH WAGNER, Individually and On
Behalf of All Others Similarly Situated,
Plaintiff,
v.
MICHAEL BARRETT, ROBERT P. GOODMAN, WENDA HARRIS
MILLARD, PATRICK J. KERINS, JAMES THOLEN, THOMAS R. EVANS,
ROSS LEVINSOHN, MILLENNIAL MEDIA INC., AOL INC., AND MARS
ACQUISITION SUB, INC.
Defendants. |
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) )
) )
) )
) )
) )
) )
) ) |
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Civil Action No. |
VERIFIED CLASS ACTION COMPLAINT
FOR BREACH OF FIDUCIARY DUTY
Plaintiff Joseph Wagner (“Plaintiff”), on behalf of himself and all others similarly situated, by and through the undersigned
counsel, alleges the following upon information and belief, including the investigation of counsel and review of publicly-available information, except as to those allegations pertaining to Plaintiff, which are alleged upon personal knowledge:
SUMMARY OF THE ACTION
1. This is a stockholder class action brought by Plaintiff on behalf of himself and all other similarly situated public stockholders of
Millennial Media Inc. (“Millennial” or the “Company”) against the Company’s Board of Directors
(the “Board” or the “Individual Defendants”) for breaches of fiduciary duties, and against AOL Inc. (“Parent”) and Mars Acquisition Sub, Inc. (“Merger
Sub,” and together with Parent, “AOL”) for aiding and abetting such breaches of fiduciary duties.
2. Headquartered in
Baltimore, Maryland, and founded in 2006, Millennial is a leading mobile advertising company both in the United States and internationally. The Company provides advertisers and developers with solutions to reach and engage their targeted audiences
across mobile devices through multiple types of ad displays, while gaining insight into the performance of their ads and ad campaigns.
3.
On September 3, 2015, the Company announced that it had entered into an Agreement and Plan of Merger, dated September 3, 2015 (the “Merger Agreement”), pursuant to which Merger Sub will commence a tender offer (the “Tender
Offer”) to acquire all the outstanding shares of the Company for $1.75 per share in cash (the “Proposed Transaction”).
4.
The Proposed Transaction is valued at $240 million.
5. The Proposed Transaction wholly undervalues Millennial, as the merger
consideration represents a premium of 27% under the Company’s 52-week high price of $2.40 on September 3, 2014, and 7.9% under the closing price of $1.90 on July 15, 2015, less than two months prior to the
announcement of the
2
Proposed Transaction. Additionally, the Company has a one-year analyst target estimate of $2.15, which is 18.6% over the $1.75 merger price.
6. Furthermore, given the strength of the Company’s product and its poise for future success, AOL will acquire Millennial at an
unreasonably low price if the Proposed Transaction is permitted to close.
7. In discussing the financial results for the second quarter
(“Q2”) ended June 30, 2014 in an August 10, 2015 press release, Defendant Michael Barrett (“Barrett”), President and Chief Executive Officer (“CEO”) of Millennial, touted the Company’s strong position in
the mobile advertising market, and his positive outlook for the future, stating:
We have built a strong, comprehensive
mobile ad marketplace, with what we believe are the right tools and talent to help meet the needs of our dynamic market. Clearly however, revenue is ramping more slowly than we had hoped. We are evaluating strategic opportunities to maximize the
value of our capabilities in this rapidly evolving ecosystem.
8. Under the terms of the Merger Agreement, the Individual Defendants
tilted the playing field in favor of AOL by agreeing, in breach of their fiduciary duties owed to Millennial stockholders, to a slate of deal protection provisions that unreasonably deter third party bidders from launching topping bids, including:
(i) a strict no-solicitation provision that prevents the Company from soliciting other potential acquirers or even in continuing discussions and negotiations with potential acquirer; (ii) an information rights provision that requires the
Company to
3
disclose confidential information about competing bids to AOL within twenty-four (24) hours; (iii) a matching rights provision that provides AOL with at least three (3) business
days to merely match any competing proposal in the event one is made; and (iv) a prohibitively large termination fee to be paid by Millennial in the event it chooses to pursue an alternative, superior offer.
9. These deal protection provisions, particularly when considered collectively, substantially and improperly limit the Board’s ability to
act with respect to investigating and pursuing superior proposals and alternatives, including a sale of all or part of Millennial.
10.
For these reasons and as set forth in detail herein, Plaintiff seeks to enjoin Defendants from taking any steps to consummate the Proposed Transaction or, in the event the Proposed Transaction is consummated, to recover damages resulting from the
Individual Defendants’ violations of their fiduciary duties of loyalty, good faith, and due care.
THE PARTIES
11. Plaintiff is, and has been at all relevant times, a stockholder of Millennial common stock.
12. Millennial is a corporation organized and existing under the laws of Delaware, with principal executive offices located at 2400 Boston
Street, Suite
4
300, Baltimore, Maryland 21224. Millennial’s common stock is traded on the New York Stock Exchange under the ticker symbol “MM.”
13. Defendant Barrett has been the President, CEO, and a director of the Company since 2014.
14. Defendant Robert P. Goodman (“Goodman”) has been a director of the Company since 2009. He is also a member of the Compensation
Committee.
15. Defendant Wenda Harris Millard (“Millard”) has been a director of the Company since May 2009. She is also a
member of the Compensation and Nominating and Corporate Governance Committees.
16. Defendant Patrick J. Kerins (“Kerins”) has
been a director of the Company since 2009. He is also a member of the Compensation Committee.
17. Defendant James Tholen
(“Tholen”) has been a director of the Company since 2011. He is also a member of the Audit and Nominating and Corporate Governance Committees.
18. Defendant Thomas R. Evans (“Evans”) has been a director of the Company since February 2014. He is also a member of the Audit
Committee.
19. Defendant Ross Levinsohn (“Levinsohn”) has been a director of the Company since February 2014. He is also a
member of the Audit Committee.
20. Defendant Parent is a corporation organized and existing under the laws of the state of Delaware with
principal executive offices located at 770
5
Broadway, New York, New York 10003. Parent is a multinational mass media corporation which develops, grows, and invests in brands and websites. Parent’s was acquired by Verizon
Communications Inc. on June 23, 2015 and no longer trades on the New York Stock Exchange.
21. Defendant Merger Sub is a Delaware
corporation and a wholly owned subsidiary of Parent.
THE FIDUCIARY DUTIES OF THE INDIVIDUAL DEFENDANTS
22. By reason of the Individual Defendants’ positions with the Company as officers and/or directors, said individuals are in a fiduciary
relationship with Plaintiff and the other stockholders of Millennial, and owe Plaintiff and the other members of the Class (defined herein) the duties of good faith, loyalty, and care.
23. By virtue of their positions as directors and/or officers of Millennial, the Individual Defendants, at all relevant times, had the power
to control and influence, and did control and influence and cause Millennial to engage in the practices complained of herein.
24. Each of
the Individual Defendants is required to act in good faith, in the best interests of the Company’s stockholders and with such care, including reasonable inquiry, as would be expected of an ordinarily prudent person. In a situation where the
directors of a publicly traded company undertake a transaction that may result in a change in corporate control, the directors must take all steps
6
reasonably required to maximize the value stockholders will receive rather than use a change of control to benefit themselves. To diligently comply with this duty, the directors of a corporation
may not take any action that:
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(a) |
adversely affects the value provided to the corporation’s stockholders; |
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(b) |
contractually prohibits them from complying with or carrying out their fiduciary duties; |
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(c) |
discourages or inhibits alternative offers to purchase control of the corporation or its assets; |
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(d) |
will otherwise adversely affect their duty to search for and secure the best value reasonably available under the circumstances for the corporation’s stockholders; or |
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(e) |
will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public stockholders. |
25. Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction, violated
duties owed to Plaintiff and the other stockholders of Millennial, including their duties of loyalty, good faith and due care, insofar as they, inter alia, failed to obtain the best price possible under the circumstances before entering into
the Proposed Transaction,
7
and engaged in self-dealing and obtained for themselves personal benefits, including personal financial benefits, not shared equally by Plaintiff or the other stockholders of Millennial common
stock.
CLASS ACTION ALLEGATIONS
26. Plaintiff brings this action pursuant to Court of Chancery Rule 23, individually and on behalf of the stockholders of Millennial common
stock who are being and will be harmed by Defendants’ actions described herein (the “Class”). The Class specifically excludes Defendants herein, and any person, firm, trust, corporation or other entity related to, or affiliated
with, any of the Defendants.
27. This action is properly maintainable as a class action because:
| |
(a) |
The Class is so numerous that joinder of all members is impracticable. As of September 1, 2015, there were approximately 141,702,750 shares of Millennial common stock issued and outstanding. The actual number of
public stockholders of Millennial will be ascertained through discovery; |
| |
(b) |
There are questions of law and fact that are common to the Class, including, inter alia, the following: |
| |
i. |
whether the Individual Defendants have breached their fiduciary duties of loyalty or due care with respect to Plaintiff
|
8
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and the other members of the Class in connection with the Proposed Transaction; |
| |
ii. |
whether the Individual Defendants have breached their fiduciary duty to secure and obtain the best price reasonable under the circumstances for the benefit of Plaintiff and the other members of the Class in connection
with the Proposed Transaction; and |
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iii. |
whether Plaintiff and the other members of the Class would suffer irreparable injury were the Proposed Transaction complained of herein consummated. |
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(c) |
Plaintiff is an adequate representative of the Class, has retained competent counsel experienced in litigation of this nature, and will fairly and adequately protect the interests of the Class; |
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(d) |
Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff does not have any interests adverse to the Class; |
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(e) |
The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications that would
establish incompatible standards of conduct for defendants, or adjudications that would, as a practical matter, be |
9
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dispositive of the interests of individual members of the Class who are not parties to the adjudications or would substantially impair or impede those non-party Class members’ ability to
protect their interests; and |
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(f) |
Defendants have acted on grounds generally applicable to the Class with respect to the matters complained of herein, thereby making appropriate the relief sought herein with respect to the Class as a whole.
|
BACKGROUND OF THE COMPANY AND ITS
POSITIONING IN AN EXPANDING MARKET
28. Founded in 2006 in Baltimore, Maryland and incorporated in Delaware that same year, Millennial has been a global leader in the mobile
advertising market. The Company allows advertisers to reach and engage their target audiences across all mobile devices and screens, enables them to gain insight into how their ads are performing, manage their ad campaigns, and follow a single user
across multiple devices. The Company also offers services to ad developers, including software that allows the use of traditional ads, video ads, interactive ads, banner displays, and native ad formats. The Company allows advertisers and developers
to interact directly with each other as well, providing advertisers with access to inventory directly from developers through its ad exchange, and allows developers to allocate ad requests among various advertising campaign sources.
10
The Company also allows advertisers to use a set of templates to design ads and to target specific ads based on
users’ locations, interests, and behaviors. Developers are able to use the Company’s solutions to comprise reporting and analytics, including revenue generation reports.
29. Although the Company was not profitable in its first few years, it has had a huge turn around since Barrett took over as President and CEO
in 2014. On November 6, 2014, in announcing its third quarter (“Q3”) 2014 financial results, Individual Defendant Barrett commented:
We had another productive quarter as we took significant steps towards strengthening and accelerating our programmatic
capabilities. During the quarter we announced our agreement to acquire Nexage—a leading independent mobile supply side platform and exchange—and we have begun to align our management organization towards best addressing both the manual and
machine-based segments of the mobile advertising market. As we head into 2015, we have a much improved set of capabilities, and we are well positioned, in terms of our organization, people and strategy, to drive revenue growth.
30. In discussing the financial results for the Q3 2014, during an Earnings Call on November 6, 2014, Andrew J. Jeanneret
(“Jeanneret”), Chief Financial Officer (“CFO”) and Executive Vice President, echoed Barrett’s sentiments as he discussed Millennial’s increased revenue and financial projections:
In Q3, we delivered $69.8 million in revenue, which was at the high end of our guidance range, an increase of 24% from
Millennial’s standalone Q3 2013 GAAP revenue and a 19% decrease from 2013 Q3 pro forma combined revenue of $86.3 million, giving effect to Jumptap results for the entire 2013 period. Adjusted EBITDA was a loss of $6.9 million for Q3, which was
slightly better than our
11
guidance range, driven primarily by revenue at the high end of our range.
***
Now turning to our future outlook, I will share our thoughts regarding the fourth quarter 2014 based on information available
to us as of today, November 6, 2014. This outlook is for Millennial only. For the fourth quarter of 2014, we anticipate revenue to be in the range of $70 million to $75 million. We anticipate adjusted EBITDA in the fourth quarter of 2014 to be
in the range of a loss of $5.5 million to $6.5 million.
31. The year 2014 proved profitable for Millennial, particularly with the
acquisition of Nexage. In discussing the Company’s year-end 2014 success in a press conference on March 9, 2015, Defendant Barrett stated:
Millennial Media ended 2014 on a high note. We successfully completed our acquisition of Nexage, added several key management
personnel, and exceeded our fourth quarter revenue expectations. Through these accomplishments, we’ve entered 2015 with a stronger, more complete set of tools to help us execute on our full-stack marketplace vision and make mobile simple for
our partners. We’ve already begun inventory integrations to our owned and operated programmatic exchange, The Millennial Media Exchange powered by Nexage, which will enable hundreds of mobile ad buyers to transact with thousands of developers
and publishers. Supported by the foundation of our managed media business, we expect to accelerate our programmatic platform capabilities and revenue production during 2015.
32. The Company experienced financial success, with full year 2014 revenue of $296.2 million, compared to $259.2 million for the full year of
2013. The Company also expanded the number of users that it reached, which Jeanneret
12
discussed during the Company’s fourth quarter (“Q4”) 2014 Earnings Call on March 9, 2015:
At the end of Q4 2014, our total reach was more than 650 million monthly unique users. Our reach included more than
175 million monthly unique users in the U.S. alone. The number of sites and apps enabled on our platform was approximately 60,000, as compared to approximately 50,000 at the end of Q4 last year.
We also have developed more than 700 million active anonymous user profiles and over 60 million of these are
cross-screen profiles that link users across mobile devices and PCs. Our profiles are our key assets for the company, enabling us to identify unique users on a completely anonymous basis across mobile devices and to target ads more effectively based
on demographics, interest or locations of the consumer.
33. Millennial’s success only continued to increase into 2015. During the
Company’s first quarter (“Q1”) 2015 Earnings Call on May 5, 2015, Defendant Barrett praised the Company’s financial growth, stating:
The first quarter was stronger than we expected and we exceeded our revenue and adjusted EBITDA guidance. Our Q1 results and
outlook keep us on a path to achieve steady, sequential revenue growth and adjusted EBITDA profitability in Q4 2015.
34. Defendant Barrett
expanding on this further during the press release for Q1 on May 5, 2015:
Millennial Media is entering its second
quarter with a strong foundation. First quarter results exceeded guidance across the board and we’re seeing early success through our Nexage integration. Combined with solid revenues from our Managed Media business, the pieces of our owned and
operated programmatic exchange are fully assembled and we’re executing on our full-stack, independent marketplace vision. We believe we are well positioned in the growing
13
mobile ad ecosystem and expect to accelerate our programmatic platform capabilities and revenue production throughout 2015.
35. The Company had a slow start to its second quarter (“Q2”) 2015, slightly missing the revenue expectations. However, Millennial
remained strong in other areas, and continued to innovate with more valuable ad products, which included enhanced video capabilities, native data and insight tools, and therefore saw a positive initial response. Defendant Barrett remained optimistic
for the Company’s future, and during the Earnings Call on August 10, 2015, he stated:
Our brand business
remains strong. We’ve remained challenged on the app download business. Our Platform business is well positioned and its growing steadily, but more slowly than expected and we expect the new formats and capabilities enabled by STK 6.0 to help
that growth.
Our combined marketplace offering is a unique differentiator. We are more important than ever to our supply
partners as we expose them to more buying opportunities.
36. As reflected in these quotes and in the Company’s recent financial
results and concurrent press releases and statements, Millennial has made significant expansion and marketing efforts that have begun to, and are expected to continue to, yield returns for the Company and its stockholders well into the future.
37. However, despite the financial strength of the Company, its position as a premier player in its field, and the increase in demand for
Millennial’s mobile ad services, the Individual Defendants have entered into the Merger Agreement with AOL, depriving the Plaintiff and the minority public stockholders of the
14
Company the opportunity to participate in the growth of the Company they have loyally invested in.
THE PROPOSED TRANSACTION
38. On September 3, 2015, the Company issued a press release announcing the Proposed Transaction. That press release stated, in relevant
part:
New York, NY, September 3, 2015 – AOL today announced its continued investment in cross platform
programmatic technology for marketers and publishers by signing an agreement to acquire Millennial Media, Inc. (NYSE: MM), a leading end-to-end mobile platform, for $1.75 per share of Millennial Media common stock.
Following AOL’s recent acquisition by Verizon, which operates the nation’s largest and most reliable wireless
network, and its global enterprise-level partnership with Microsoft, today’s announcement further strengthens AOL’s mobile capabilities and underlines its position as the first global mobile media technology company. AOL now operates
scaled global content brands, a scaled global content delivery network, a scaled global programmatic advertising platform and a subscription services platform.
With the acquisition of Millennial Media, AOL will:
| |
• |
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Add a leading supply-side platform for app monetization with over 65,000 apps to its publisher suite of offerings |
|
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• |
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Add significant mobile brand advertising scale across ONE by AOL |
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• |
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Have access to approximately 1 billion global active unique users and robust addressable and cross-screen targeting capabilities |
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• |
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Accelerate its mobile position in key international markets, including Singapore, Japan, UK, France and Germany |
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• |
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Add world-class engineering, sales and product talent that specialize in mobile to AOL |
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15
“AOL is well positioned as consumers spend more and more time on mobile
devices, and as advertisers, agencies and publishers become more reliant on programmatic monetization tools,” said Bob Lord, President, AOL. “As we continue to invest in our platforms and technology, the acquisition of Millennial Media
accelerates our competitive mobile offering in ONE by AOL and enhances our current publisher offering with an ‘all in’ monetization platform for app developers.”
“By joining AOL, we will be adding additional mobile expertise to AOL’s growing technology assets,” said
Michael Barrett, President & CEO of Millennial Media. “I am excited by what this acquisition means for our shareholders, our employees and our partners.”
According to eMarketer, 69% of mobile ad spend will be bought and sold programmatically (more than $14 billion), and
programmatic video will reach $4 billion by 2016. Furthermore, Cowen & Company expects mobile display and video advertising to grow from approximately $3.8 billion in 2015 to $9.2 billion in 2018 at a compound annual growth rate of 35%.
Founded in 2006, Millennial Media is headquartered in Baltimore, MD and has additional U.S. offices in Atlanta, Boston,
New York and San Francisco, and international offices in Hamburg, London, Paris, Singapore and Tokyo. Millennial Media’s portfolio of assets includes acquisitions of TapMetrics, Condaptive, Metaresolver, Jumptap and Nexage.
The transaction will take the form of a tender offer followed by a merger, with Millennial Media becoming a wholly owned
subsidiary of AOL upon completion. The transaction is subject to customary regulatory approvals and other closing conditions, and is expected to close this fall.
39. Also on September 3, 2015, the Company filed a Form 8-K with the United States Securities and Exchange Commission (“SEC”),
wherein it disclosed the Merger Agreement. Collectively, the press release announcing the transaction
16
and the filing of the Merger Agreement reveal that the Proposed Transaction is the product of a flawed sales process and, unless the merger consideration is increased, would be consummated at an
unfair price.
40. Additionally, the sale of the Company is being timed in an effort to curb any future increase in the share price of
Millennial common stock, thus ensuring that AOL can effectuate its takeover on the cheap.
41. Furthermore, the Proposed Transaction is
also being effectuated at a total price well below the Company’s 52 week high of $2.40 per share and analyst’s projection of $2.15 per share.
42. Having failed to maximize the sale price for the Company, the Individual Defendants breached the fiduciary duties they owe to the
Company’s public stockholders because the Company has been improperly valued, and public stockholders will not receive adequate or fair value for their Millennial common stock.
THE MERGER AGREEMENT UNFAIRLY DETERS COMPETITIVE
OFFERS AND IS UNDULY BENEFICIAL TO AOL
43. The Proposed Transaction is also unfair because, as part of the Merger Agreement, Defendants agreed to certain onerous and
preclusive deal protection devices that operate conjunctively to make the Proposed Transaction a fait accompli and ensure that no competing offers will emerge for the Company.
17
44. The Merger Agreement contains a No-Solicitation clause in which the Company must immediately
cease and terminate any existing solicitation. In fact, Section 6.4(a) of the Merger Agreement expressly prohibits the Company from soliciting any Competing Proposals and forces the Company to cease any communications already occurring,
stating:
(a) Except as otherwise provided for in this Agreement, the Company agrees that it and its subsidiaries
shall, and that it shall use its reasonable best efforts to cause its and their respective Representatives to, immediately cease any discussions or negotiations with any persons that may be ongoing with respect to a Competing Proposal and, until the
earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 8.1, not, directly or indirectly: (i) solicit, initiate or knowingly facilitate or encourage any Competing Proposal;
(ii) participate in any negotiations regarding, or furnish to any person any nonpublic information with respect to, any Competing Proposal; (iii) engage in discussions with any person with respect to any Competing Proposal;
(iv) approve or recommend any Competing Proposal; (v) enter into any letter of intent or similar document or any agreement or commitment providing for any Competing Proposal; (vi) take any action to make the provisions of any
“fair price,” “moratorium,” “control share acquisition,” “business combination” or other similar anti-takeover statute or regulation (including any transaction under, or a third party becoming an
“interested stockholder” under, Section 203 of the DGCL), or any restrictive provision of any applicable anti-takeover provision in the Restated Certificate of Incorporation or By-laws of the Company, inapplicable to any person other
than Parent and its Affiliates or to any transactions constituting or contemplated by a Competing Proposal; or (vii) resolve or agree to do any of the foregoing.
45. Furthermore, Section 6.4(b) grants AOL recurring and unlimited information rights, which gives Millennial twenty-four (24) hours
to provide
18
unfettered access to confidential, non-public information about competing proposals from third parties which AOL can then use to prepare a matching bid.
46. Additionally, Section 6.3(f) grants AOL at least three (3) business days to negotiate with Millennial, amend the terms of the
Merger Agreement, and make a counter-offer that only matches any superior third-party offer.
47. This matching rights provision
essentially ensures that no superior bidder will emerge, as any potential suitor will be unlikely to expend the time, cost and effort to perform due diligence and make a superior proposal while knowing that AOL will become aware of its bid and the
details and terms thereof and can easily top it. As a result, the matching rights provision unreasonably favors AOL, to the detriment of Millennial’s public stockholders.
48. Compounding matters, Section 8.3(c) of the Merger Agreement requires the Company to pay a termination fee to AOL in the event the
Company decides to pursue any alternative offer. By the terms of the Merger Agreement, this termination fee will be payable in cash to Parent in the amount of $10,257,222. As such, this termination fee would require any competing bidder to agree to
pay a naked premium simply for the right to provide Millennial’s stockholders a superior offer.
49. Ultimately, these preclusive
deal protection provisions illegally restrain the Company’s ability to solicit or engage in negotiations with any third
19
party regarding a proposal to acquire all or a significant interest in the Company. The narrow circumstances under which the Board may respond to alternative proposals and the Company’s
inability to terminate the Merger Agreement if it accepts a superior proposal fail to provide an effective “fiduciary out” under the Merger Agreement.
50. Accordingly, Plaintiff seeks injunctive and other equitable relief to prevent the irreparable injury that the Company’s stockholders
will continue to suffer absent judicial intervention.
CLAIMS FOR RELIEF
COUNT I
Breach of
Fiduciary Duties
(Against All Individual Defendants)
51. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.
52. The Individual Defendants have violated fiduciary duties of care, loyalty, and good faith owed to the public stockholders of Millennial.
53. By the acts, transactions, and courses of conduct alleged herein, the Individual Defendants, individually and acting as a part of a
common plan, are attempting to unfairly deprive Plaintiff and other members of the Class of the true value of their investment in Millennial.
20
54. As demonstrated by the allegations above, the Individual Defendants failed to exercise the
care required, and breached their duty of loyalty owed to the stockholders of Millennial because, among other reasons, they failed to take reasonable steps to obtain and/or ensure that Millennial stockholders receive adequate and fair value for
their shares.
55. The Individual Defendants dominate and control the business and corporate affairs of Millennial both through their
positions within the Company and on the Board, and are in possession of private corporate information concerning Millennial assets, business and future prospects. Thus, there exists an imbalance and disparity of knowledge and economic power between
them and the public stockholders of Millennial which makes it inherently unfair for them to benefit their own interests to the exclusion of maximizing stockholder value.
56. By reason of the foregoing acts, practices, and course of conduct, the Individual Defendants have failed to exercise ordinary care and
diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.
57. As a result of the
actions of Defendants, Plaintiff and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of Millennial’s assets and businesses and have been and will be prevented from obtaining a
fair price for their common stock.
21
58. Unless the Individual Defendants are enjoined by the Court, they will continue to breach
their fiduciary duties owed to Plaintiff and the members of the Class, all to the irreparable harm of the members of the Class.
59.
Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which the Individual
Defendants’ actions threaten to inflict.
COUNT II
Aiding and Abetting
(Against Parent and Merger Sub)
60. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.
61. Parent and Merger Sub have acted and are acting with knowledge of, or with reckless disregard to, the fact that the Individual Defendants
are in breach of their fiduciary duties to Millennial’s public stockholders, and have participated in such breaches of fiduciary duties.
62. Moreover, Parent and Merger Sub knowingly aided and abetted the Individual Defendants’ wrongdoing alleged herein. In so doing, they
rendered substantial assistance in order to effectuate the Individual Defendants’ plan to consummate the Proposed Transaction in breach of their fiduciary duties.
22
63. As a result of the unlawful actions of Parent and Merger Sub, Plaintiff and the other members
of the Class will be irreparably harmed in that they will not receive the true value for Millennial’s assets and business. Unless their actions are enjoined by the Court, Defendants Parent and Merger Sub will continue to aid and abet the
Individual Defendants’ breaches of their fiduciary duties owed to Plaintiff and the members of the Class.
64. As a result of Parent
and Merger Sub’s conduct, Plaintiff and the other members of the Class have been and will be damaged in that they have been and will be prevented from obtaining a fair and reasonable price for their Millennial shares.
65. Plaintiff and other members of the Class have no adequate remedy at law.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands injunctive relief in his favor and in favor of the Class and against Defendants as follows:
A. Declaring that this action is properly maintainable as a class action and certifying Plaintiff as Class representative;
B. Preliminarily and permanently enjoining Defendants and their counsel, agents, employees and all persons acting under, in concert with, or
for them, from proceeding with, consummating, or closing the Proposed Transaction,
23
unless and until the Company adopts and implements a procedure or process to obtain an agreement providing fair and reasonable terms and consideration to Plaintiff and the Class;
C. Rescinding, to the extent already implemented, the Merger Agreement or any of the terms thereof, or granting Plaintiff and the Class
rescissory damages;
D. Directing the Individual Defendants to account to Plaintiff and the Class for all damages suffered as a result of
the Individual Defendants wrongdoing;
E. Awarding Plaintiff the costs and disbursements of this action, including reasonable
attorneys’ and experts’ fees; and
F. Granting such other and further equitable relief as this Court may deem just and proper.
|
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| Dated: September 15, 2015 |
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RIGRODSKY & LONG, P.A. |
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/s/ Brian D. Long |
| OF COUNSEL: |
|
Seth D. Rigrodsky (#3147) |
| LEVI & KORSINSKY, LLP
Shane Rowley 733 Summer Street, Suite 304
Stamford, CT 06901 (212) 363-7500 |
|
Brian D. Long (#4347) Gina M. Serra (#5387)
Jeremy J. Riley (#5791) 2 Righter Parkway, Suite 120
Wilmington, DE 19803 (302) 295-5310 |
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Attorneys for Plaintiff |
24
Exhibit (a)(5)(E)
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EFiled: Sept 16 2015 05:40PM EDT
Transaction ID 57880393 Case No. 11511- |
|
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
|
|
|
| AN NGUYEN, Individually and On Behalf of All Others
Similarly Situated,
Plaintiff,
v.
MICHAEL G. BARRETT, THOMAS R. EVANS, ROBERT P. GOODMAN, PATRICK KERINS, ROSS B.
LEVINSOHN, WENDA HARRIS MILLARD, JAMES A. THOLEN, AOL INC., and MARS ACQUISITION SUB, INC.,
Defendants.
|
|
C.A. No. |
VERIFIED CLASS ACTION COMPLAINT
An Nguyen (“Plaintiff”), individually and on behalf of all others similarly situated, by and through her attorneys, alleges the
following upon information and belief, including the investigation of counsel and a review of publicly-available information, except as to those allegations pertaining to Plaintiff, which are alleged upon personal knowledge:
NATURE AND SUMMARY OF THE ACTION
1. Plaintiff brings this stockholder class action on behalf of herself and the other public stockholders of Millennial Media, Inc.
(“Millennial” or the “Company”), other than Defendants (defined below) and their affiliates, against the
members of Millennial’s board of directors (the “Board” or the “Individual Defendants”) for breaching their fiduciary duties in connection with the proposed acquisition
of all the outstanding stock of Millennial by AOL Inc. (“AOL”). Plaintiff also asserts claims against AOL and its wholly owned subsidiary Mars Acquisition Sub, Inc. (“Merger Sub”) for aiding and abetting the Individual
Defendants’ breaches of fiduciary duty.
2. Millennial is a Delaware corporation that maintains its principal executive offices in
Baltimore, Maryland. The Company is a leading independent mobile ad marketplace, making mobile simple for the world’s top brands, app developers and mobile web publishers. The Company’s unique data and technology assets enable its
advertising clients to connect with their target audiences at scale. Millennial also drives monetization for its publisher and developer partners by connecting them to networks, advertisers and a real time bidding (RTB) exchange.
3. While the Company’s stock went public at $13 per share in March 2012 and quickly skyrocketed to $23.50 per share, the Company’s
stockholders now stand to receive only $1.75 a share.
4. On September 3, 2015, Millennial and AOL jointly announced that they had
reached a definitive Agreement and Plan of Merger (“Merger Agreement”) pursuant to which Merger Sub will commence a tender offer (the
-2-
“Tender Offer”) to acquire all of Millennial’s outstanding common stock for $1.75 per share in cash (the “Merger Consideration”).
5. Pursuant to the Merger Agreement, Merger Sub will commence the Tender Offer no later than September 18, 2015. The Merger Agreement
further provides that, following the completion of the Tender Offer, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and as a wholly owned subsidiary of AOL (the “Merger” and
together with the Tender Offer, the “Proposed Transaction”). The Merger will be governed by Section 251(h) of the General Corporation Law of the State of Delaware, with no stockholder vote required to consummate the Merger.
6. Both the Merger Consideration and the process by which Defendants have agreed to consummate the Proposed Transaction are fundamentally
unfair to Millenial’s public stockholders. Indeed, the $1.75 per share Merger Consideration is 21.8% lower than the Company’s 52 week high closing price of $2.24, 86.5% below the $13 initial public offering (“IPO”)
price of the Company’s common stock in March 2012, and 92.5% less than the Company’s March 30, 2012 high of $23.50. Tellingly, the Company’s stock price closed above the value of the Merger Consideration as recently as
July 23, 2015.
7. Further, several analysts have recently set price targets for the Company significantly above the value of the
Merger Consideration. Specifically,
-3-
analysts from Canaccord Genuity issued a price target of $2.50 per share, 42% above the Merger Consideration, on July 9, 2015. And analysts from Evercore ISI, Telsey Advisory Group,
and Goldman Sachs each set price targets of $5.00 per share within the past year.
8. The Merger Consideration Millennial stockholders
stand to receive is particularly inadequate given the significant benefits AOL will reap if the Proposed Transaction is consummated. The purchase will enable AOL to benefit tremendously from Millennial’s strong presence in the mobile app space.
According to Don Kennedy, AOL’s president of advertiser platforms, Millennial has “software development kits’ baked into close to 70,000 apps,” meaning that app developers use Millennial’s software for analytics and ad
delivery, among other things. Given that research has shown that close to 84% of people’s time on mobile devices is spent using apps, Millennial’s strong presence in the app sphere will enable it to generate significant revenues in the
foreseeable future. Indeed, analysts have stated that acquiring Millennial will provide AOL with a strong position within the $600 billion global advertising market.
9. According to news reports, when Millennial and AOL first began discussing a potential merger back in July 2015, the acquisition price
ranged from $300 million to $350 million. Yet less than two months after discussions between
-4-
the two companies commenced, the Board has now agreed to sell the Company to AOL for only $238 million.
10. News reports indicate that the Board felt “forced” to sell the Company because several of its founding officers have left in
recent months. Specifically, Millennial’s founder and former CEO Paul Palmieri, former Chief Technology Officer Chris Brandenburg and former Chief Financial Officer Michal Avon each left the Company in 2014.
11. The inadequate Merger Consideration thus appears to be the result of a sale process that was motivated primarily by unjustified pressure
to quickly sell the Company, as well as the self-interest of certain Millennial insiders.
12. If the Proposed Transaction is consummated,
Millennial’s Chief Executive Officer (“CEO”), Individual Defendant Michael Barrett, who first joined the Company in 2014, will reap significant personal financial gain. Specifically, according to SEC filings, if the Proposed
Transaction is consummated Barrett will receive an additional 12 months salary of $476,000, 100% of his restricted stock units, and 100% of his stock options. Thus, Barrett stands to personally receive approximately $10 million in connection with
the Proposed Transaction.
13. Barrett also held senior positions at AOL prior to joining Millennial in 2014. The Company’s strategic
review process and the negotiations leading up to
-5-
the signing of the Merger Agreement were thus likely tainted by a material conflict of interest.
14. The remaining Individual Defendants each hold significant amounts of restricted stock units that will vest upon the consummation of the
Proposed Transaction, providing them with lucrative payouts.
15. Compounding the failure to obtain adequate consideration for Millennial
stockholders, Defendants also agreed to unreasonable deal-protection provisions in the Merger Agreement that unfairly favor AOL and discourage other potential bidders from submitting a superior offer to acquire Millennial. These preclusive devices
include: (i) a strict non-solicitation provision that restricts the Board from soliciting other potentially superior offers; (ii) an “information rights” provision, which provides AOL with unfettered access to information about
other potential proposals, gives AOL three business days to negotiate a new deal with Millennial in the event a competing offer emerges, and provides AOL with the perpetual right to attempt to match any superior bid; and (iii) a termination fee
of $10.25 million, and a provision that requires Millennial to pay AOL $2.735 million in expenses under certain circumstances.
16. As
alleged in further detail below, both the consideration Millennial’s stockholders stand to receive in connection with the Proposed Transaction and the process by which Defendants propose to consummate the Proposed Transaction are
-6-
fundamentally unfair to Plaintiff and the other public stockholders of the Company.
17. The Individual Defendants’ conduct constitutes a breach of their fiduciary duties owed to Millennial’s public stockholders, and
a violation of applicable legal standards governing their conduct.
18. For these reasons and as set forth in detail herein, Plaintiff
seeks to enjoin Defendants from taking any steps to consummate the Proposed Transaction, or, in the event the Proposed Transaction is consummated, to recover damages resulting from the Individual Defendants’ violations of their fiduciary duties
of loyalty, good faith and due care.
THE PARTIES
19. Plaintiff is, and at all relevant times has been, a stockholder of Millennial since prior to the wrongs complained of herein.
20. Individual Defendant Michael G. Barrett (“Barrett”) has served as Millennial’s President and Chief Executive Officer and as
a director of the Company since January 2014. Barrett has served as the President of Ichabod Farm Ventures LLC, an internet investment company that he founded, since December 2012. From July 2012 until December 2012, he served as Global Chief
Revenue Officer and Executive Vice President at Yahoo! Inc. Prior to Yahoo!, from January 2012 until July 2012, Barrett served as Director at Google Inc., where he
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led the integration efforts following Google’s acquisition of Admeld Inc., a global supply side platform solution for premium publishers. Barrett previously served as Chief Executive Officer
of Admeld from November 2008 until December 2011. Barrett has also held senior positions at AOL, Fox Interactive Media and Disney Online. He currently serves on the board of directors of Tremor Video, Inc., a publicly held provider of
technology-driven video advertising solutions.
21. Individual Defendant Thomas R. Evans (“Evans”) has served as a director of
the Company since February 2014. Evans served as the President and Chief Executive Officer of Bankrate, Inc., a publisher, aggregator and distributor of online personal finance content, from 2004 until December 2013. From 1999 to 2003, Evans served
as Chairman and Chief Executive Officer of Official Payments Corp., a processor of consumer credit card payments for governmental entities. From 1998 to 1999, Evans was President and Chief Executive Officer of GeoCities Inc., a community of personal
websites. From 1991 to 1998, Evans was President and Publisher of U.S. News & World Report. In addition to his duties at U.S. News & World Report, Evans served as President of The Atlantic Monthly from 1996 to 1998 and as President
and Publisher of Fast Company from the launching of the magazine in 1995 until 1998. Evans also currently serves as a director of the public companies FutureFuel Corp. and Shutterstock, Inc. and
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within the past five years also served as a director of the public company NaviSite, Inc.
22. Individual Defendant Robert P. Goodman (“Goodman”) has served as a director of the Company since 2009. He is the founding
partner of Bessemer Venture Partners’ investment office in Larchmont, New York. Goodman is also a managing member of Deer Management Co. LLC, the management company for Bessemer Venture Partners’ investment funds. Prior to joining Bessemer
in 1998, Goodman founded and served as the chief executive officer of two privately held telecommunications companies, Celcore and Boatphone, a group of cellular operating companies. Until December 2012, Goodman served as a member of the board of
directors of Broadsoft, Inc., a publicly held technology company. Goodman continues to serve as a member of the board of directors of several private Bessemer portfolio companies.
23. Individual Defendant Patrick Kerins (“Kerins”) has served as a director of the Company since 2009. Since 2006, Kerins has been a
general partner with New Enterprise Associates, Inc., a venture capital firm. From 1997 to 2006, he was general partner of Grotech Capital Group, a venture capital firm. Prior to Grotech, Kerins was an investment banker with Alex, Brown &
Sons, focusing on high-technology companies. Kerins currently serves on the boards of directors of ChannelAdvisor Corporation, a publicly held technology provider of
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cloud-based e-commerce solutions, and a number of privately held companies, and is chairman emeritus of the Mid-Atlantic Venture Association.
24. Individual Defendant Ross B. Levinsohn (“Levinsohn”) has served as a director of the Company since February 2014. Levinsohn has
served as Chief Executive Officer of Guggenheim Digital Media, a subsidiary of Guggenheim Partners, a privately held global financial services firm, since January 2013. Levinsohn served as interim Chief Executive Officer and President of Yahoo! Inc.
from May 2012 until July 2012, as Executive Vice President and Head of Global Media in early May 2012, and as Executive Vice President, Americas from November 2010 to May 2012. He was the co-founder and managing director of Fuse Capital (formerly
Velocity Interactive Group), an investment firm focused on digital media and communications, from 2007 to October 2010. From 2000 to 2006, he served in leadership roles at News Corporation, a media and entertainment company, including as President
of Fox Interactive Media, Senior Vice President and General Manager of Fox Sports Interactive Media, and Senior Vice President of News Digital Media.
25. Individual Defendant Wenda Harris Millard (“Millard”) has served as a director of the Company since May 2009. Since April 2009,
she has served as president and chief operating officer of MediaLink LLC, a strategic advisory and business development firm that provides counsel to the media, advertising and
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entertainment industries. From July 2007 to April 2009, she served as president of media for Martha Stewart Living Omnimedia, Inc. and as co-chief executive officer from June 2008 to April 2009.
From 2004 to 2007, she also served as a member of the board of directors of Martha Stewart Living Omnimedia. From 2001 to 2007, Millard was the chief sales officer of Yahoo! Inc. From 2000 to 2001, she was chief internet officer at Ziff Davis Media
and president of Ziff Davis Internet. From 1996 to 2000, Millard was executive vice president and one of the founding members of DoubleClick. Millard currently serves on the board of directors of Verifone Systems, Inc., a publicly held provider of
electronic payment solutions.
26. Individual Defendant James A. Tholen (“Tholen”) has served as a director of the Company since
2011. He has served as the chief financial officer of Broadsoft, Inc., a publicly held technology company, since 2007. Between 2006 and 2007, Tholen was engaged in consulting, advisory and investing activities. From 2003 to 2006, Tholen served as
both chief financial officer and chief operating officer at Network Security Technologies, Inc., or NetSec, a managed and professional security services company acquired by MCI, Inc., now part of Verizon. Prior to joining NetSec, he served as chief
strategy officer and chief financial officer for CareerBuilder, Inc. and was a member of that company’s board of directors.
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27. Defendant AOL Inc. (AOL) is a Delaware corporation which maintains its principal executive
offices in New York, New York. AOL is a web services company. Its business spans online content, products and services that the company offers consumers, publishers and advertisers. AOL focuses on attracting consumers and providing online
advertising services on company owned and operated properties as well as third party websites. AOL also operates an internet subscription access service. AOL is a subsidiary of Verizon Communications Inc.
28. Defendant Mars Acquisition Sub, Inc. (Merger Sub) is a Delaware corporation and a wholly owned subsidiary of AOL, and was formed for
purposes of effectuating the Merger.
29. The defendants referenced in the preceding paragraphs are collectively referred to as the
“Defendants.”
THE FIDUCIARY DUTIES OF THE INDIVIDUAL DEFENDANTS
30. By reason of the Individual Defendants’ positions as directors and/or officers of Millennial, said individuals are in a fiduciary
relationship with Plaintiff and the other public stockholders of Millennial and owe Plaintiff and the other members of the Class (defined herein) the duties of care, loyalty and good faith.
31. By virtue of their positions as directors and/or officers of Millennial, the Individual Defendants, at all relevant times, had the power
to control and
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influence, and did control and influence and cause Millennial to engage in the practices complained of herein.
32. Each of the Individual Defendants are required to act in good faith, in the best interests of the Company’s stockholders and with
such care, including reasonable inquiry, as would be expected of an ordinarily prudent person. In a situation where the directors of a publicly traded company undertake a transaction that may result in a change in corporate control, the directors
must take all steps reasonably necessary to maximize the value stockholders will receive or obtain a reasonable premium. To diligently comply with this duty, the directors of a corporation may not take any action that:
(a) adversely affects the value provided to the corporation’s stockholders;
(b) contractually prohibits them from complying with or carrying out their fiduciary duties;
(c) discourages or inhibits alternative offers to purchase control of the corporation or its assets;
(d) will otherwise adversely affect their duty to search for and secure the best value reasonably available under the circumstances for the
corporation’s stockholders; or
(e) will provide the directors and/or officers with preferential treatment at the expense of, or
separate from, the public stockholders.
33. Plaintiff alleges herein that the Individual Defendants, separately and together, in
connection with the Proposed Transaction, violated duties owed to
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Plaintiff and the other public stockholders of Millennial, including their duties of loyalty, good faith and care, insofar as they, inter alia, failed to obtain the best price possible or
a reasonable premium under the circumstances before entering into the Proposed Transaction, agreed to unreasonable deal protection devices that all but ensure that Millennial’s stockholders will not receive a superior offer, and engaged in
self-dealing and obtained for themselves personal benefits, including personal financial benefits, not shared equally by Plaintiff or the other holders of Millennial common stock.
CLASS ACTION ALLEGATIONS
34. Plaintiff brings this action on her own behalf and as a class action pursuant to Court of Chancery Rule 23, on behalf of all holders of
Millennial common stock who are being and will be harmed by Defendants’ actions described herein (the “Class”). Excluded from the Class are Defendants and any person, firm, trust, corporation, or other entity related to or affiliated
with any Defendants.
35. This action is properly maintainable as a class action. The Class is so numerous that joinder of all members is
impracticable. As of July 31, 2015, there were approximately 141.64 million shares of Millennial common stock outstanding, owned by numerous stockholders.
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36. There are questions of law and fact which are common to the Class and which predominate over
any questions affecting only individual members, including inter alia, the following:
a) whether the Individual Defendants have
fulfilled and are capable of fulfilling their fiduciary duties owed to Plaintiff and the Class;
b) whether the Individual Defendants have
engaged and continue to engage in a scheme to benefit themselves at the expense of Millennial stockholders in violation of their fiduciary duties;
c) whether the Individual Defendants are acting in furtherance of their own self-interest to the detriment of the Class; and
d) whether Plaintiff and the other members of the Class will be irreparably harmed if Defendants are not enjoined from continuing the conduct
described herein.
37. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of
this nature. Plaintiff’s claims are typical of the claims of the other members of the Class and Plaintiff has the same interests as the other members of the Class. Accordingly, Plaintiff is an adequate representative of the Class and will
fairly and adequately protect the interests of the Class.
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38. The prosecution of separate actions by individual members of the Class would create the risk
of inconsistent or varying adjudications with respect to individual members of the Class, which would establish incompatible standards of conduct for Defendants, or adjudications with respect to individual members of the Class which would, as a
practical matter, be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.
39. Preliminary and final injunctive relief on behalf of the Class as a whole is entirely appropriate because Defendants have acted or refused
to act on grounds generally applicable to the class and are causing injury to the Class.
SUBSTANTIVE ALLEGATIONS
| A. |
Summary of the Proposed Transaction |
40. On September 3, 2015, Millennial
and AOL issued a press release announcing the Proposed Transaction, which states in relevant part:
NEW YORK, September 3, 2015
– AOL today announced its continued investment in cross platform programmatic technology for marketers and publishers by signing an agreement to acquire Millennial Media, Inc. (NYSE: MM), a leading end-to-end mobile platform, for $1.75 per
share of Millennial Media common stock.
Following AOL’s recent acquisition by Verizon, which operates the nation’s largest and
most reliable wireless network, and its global enterprise-level partnership with Microsoft, today’s announcement further strengthens AOL’s mobile capabilities and underlines its position as the first global mobile media technology company.
AOL now operates scaled global content brands, a
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scaled global content delivery network, a scaled global programmatic advertising platform and a subscription services platform.
With the acquisition of Millennial Media, AOL will:
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Add a leading supply-side platform for app monetization with over 65,000 apps to its publisher suite of offerings |
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Add significant mobile brand advertising scale across ONE by AOL |
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Have access to approximately 1 billion global active unique users and robust addressable and cross-screen targeting capabilities |
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Accelerate its mobile position in key international markets, including Singapore, Japan, UK, France and Germany |
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Add world-class engineering, sales and product talent that specialize in mobile to AOL |
“AOL is well positioned as consumers spend more and more time on mobile devices, and as advertisers, agencies and publishers become more
reliant on programmatic monetization tools,” said Bob Lord, President, AOL. “As we continue to invest in our platforms and technology, the acquisition of Millennial Media accelerates our competitive mobile offering in ONE by AOL and
enhances our current publisher offering with an ‘all in’ monetization platform for app developers.”
“By joining AOL,
we will be adding additional mobile expertise to AOL’s growing technology assets,” said Michael Barrett, President & CEO of Millennial Media. “I am excited by what this acquisition means for our shareholders, our employees
and our partners.”
According to eMarketer, 69% of mobile ad spend will be bought and sold programmatically (more than $14 billion),
and programmatic video will reach $4 billion by 2016.* Furthermore, Cowen & Company expects mobile display and video advertising to grow from approximately $3.8 billion in 2015 to $9.2 billion in 2018 at a compound annual growth rate of
35%.**
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Founded in 2006, Millennial Media is headquartered in Baltimore, MD and has additional U.S.
offices in Atlanta, Boston, New York and San Francisco, and international offices in Hamburg, London, Paris, Singapore and Tokyo. Millennial Media’s portfolio of assets includes acquisitions of TapMetrics, Condaptive, Metaresolver, Jumptap and
Nexage.
The transaction will take the form of a tender offer followed by a merger, with Millennial Media becoming a wholly owned
subsidiary of AOL upon completion. The transaction is subject to customary regulatory approvals and other closing conditions, and is expected to close this fall.
Goldman, Sachs & Co. served as AOL’s financial advisor on the transaction, and Wachtell, Lipton, Rosen & Katz served as
AOL’s legal advisor.
LUMA Partners served as Millennial Media’s financial advisor on the transaction, and Goodwin Procter LLP
served as Millennial Media’s legal advisor.
| B. |
The Proposed Transaction Undervalues Millennial Shares |
41. Millennial provides
mobile advertising solutions to advertisers and developers in the United States and internationally. It offers advertisers the opportunity to reach and engage with their targeted audiences across mobile devices and screens. The Company’s
technology enables advertisers to gain insights into the performance of their ad campaigns, and provides a cross-screen device map that allows advertisers to associate a single user with multiple online and mobile devices. The Company’s
solutions for advertisers also include mmDSP, a demand side platform that accesses inventory directly from developers through its ad exchange, and mmStudio solution, which enables advertisers and
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advertising agencies to design ads using a set of templates. The Company also provides solutions for developers, including software development kits that allow apps to receive various kinds of
ads, including video, interactive rich media, banner display, and native ad formats, and ad serving capabilities, mediation tools, and access to its ad exchange, which allow developers to allocate ad requests among various advertising campaign
sources. The Company’s solutions for developers also comprise reporting and analytics that include ad revenue generation reports for their apps across various mobile operating systems. In addition, the Company operates MYDAS, a mobile
advertising technology that: identifies unique users; targets ads based on user interest, behavior, and location; delivers ads to users; runs on various device types; ensures that the ads work over wireless connections; and measures user engagement
and ad performance. Millennial was founded in 2006 and is headquartered in Baltimore, Maryland. Its shares are traded on the New York Stock Exchange under the symbol MM.
42. The $1.75 per share Merger Consideration fails to adequately compensate Millennial’s stockholders for their shares in light of the
Company’s recent strategic achievements and strong growth prospects.
43. After completing its initial public offering in March 2012
at $13.00 per share, Millennial embarked on a period of rapid expansion, quickly commencing its plan to acquire numerous assets in the mobile advertising industry.
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44. On November 6, 2013, Millennial completed its acquisition of Jumptap Inc. for $225
million. The acquisition was expected to ultimately make it easier for Millennial to challenge larger competitors, such as Google Inc.
45. On December 4, 2014, Millennial completed its acquisition of mobile ad technology firm Nexage for $108 million. The acquisition was
attractive to Millennial because of Nexage’s real-time bidding tools and mobile web and app inventory across various publishers, which will allow Millennial to expand on its current products and services and help generate significant revenues
in the near future.
46. Millennial’s acquisition spree was funded largely by the Company’s stockholders; however, now that the
Company has completed its expansion plans on its investors’ dime, the Board has decided to shortchange the Company’s stockholders by agreeing to sell the Company at a price below its intrinsic value, while depriving them of the opportunity
to realize the benefits from the Company’s recent acquisitions.
47. As a result of the Company’s rapid acquisition strategy,
its financial results have missed analysts’ expectations in recent quarters, causing its stock price to drop. However, analysts remain optimistic about the Company’s future growth prospects now that it has slowed-down its spending spree
and began to reap the benefits of the acquisitions it made over the past two years. Indeed, analysts from
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Canaccord Genuity issued a price target of $2.50 per share, 42% above the Merger Consideration, on July 9, 2015.
48. On March 9, 2015, Millennial announced its financial results for the fourth quarter and full year ended December 31, 2014. The
Company exceeded its fourth quarter revenue expectations. Commenting on the results, Individual Defendant Barrett stated:
Millennial Media
ended 2014 on a high note. We successfully completed our acquisition of Nexage, added several key management personnel, and exceeded our fourth quarter revenue expectations… Through these accomplishments, we’ve entered 2015 with a
stronger, more complete set of tools to help us execute on our full-stack marketplace vision and make mobile simple for our partners. We’ve already begun inventory integrations to our owned and operated programmatic exchange, The Millennial
Media Exchange powered by Nexage, which will enable hundreds of mobile ad buyers to transact with thousands of developers and publishers. Supported by the foundation of our managed media business, we expect to accelerate our programmatic platform
capabilities and revenue production during 2015.
49. As of March 31, 2015, Millennial reached over 670 million monthly
unique users globally, including approximately 175 million monthly unique users in the United States alone. Further, approximately 65,000 apps were enabled by mobile app developers to operate on Millennial’s platform, and Millennial had
more than 750 million proprietary, anonymous user profiles used for delivering the most relevant ads to consumers.
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50. Consistent with analysts’ recent expectations, the tide appears to have turned for
Millennial during the most recent fiscal quarter. On May 5, 2015, Millennial announced its financial results for the first quarter of 2015, which exceeded guidance across the board. Commenting on the results, Individual Defendant Barrett
stated:
Millennial Media is entering its second quarter with a strong foundation. First quarter results exceeded guidance across
the board and we’re seeing early success through our Nexage integration… Combined with solid revenues from our Managed Media business, the pieces of our owned and operated programmatic exchange are fully assembled and we’re
executing on our full-stack, independent marketplace vision. We believe we are well positioned in the growing mobile ad ecosystem and expect to accelerate our programmatic platform capabilities and revenue production throughout 2015
51. Accordingly, the Merger Consideration Millennial’s public stockholders stand to receive is insufficient, as it fails to account for
the Company’s future earnings potential and fails to adequately compensate the Class when factoring in the significant benefits AOL stands to reap if the Proposed Transaction is completed.
52. In sum, Millennial is well-positioned to generate significant earnings in the foreseeable future. Despite Millennial’s bright
financial prospects, the Board has now agreed to sell the Company at a time when its stock price does not
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accurately reflect the Company’s intrinsic value and growth prospects, to the detriment of Millennial’s common stockholders.
| C. |
The Preclusive Deal Protection Provisions |
53. In addition to failing to obtain
adequate consideration for Millennial’s stockholders, the Individual Defendants agreed to certain deal protection devices that operate conjunctively to lock-up the Proposed Transaction and ensure that no competing offers will emerge for the
Company.
54. First, the Merger Agreement provides for an onerous no solicitation provision that prohibits the Company or the Individual
Defendants from taking any affirmative action to comply with their fiduciary duties to obtain the best price possible under the circumstances. Specifically, section 6.4 of the Merger Agreement states that the Company and the Individual Defendants
shall not:
(i) solicit, initiate or knowingly facilitate or encourage any Competing Proposal;
(ii) participate in any negotiations regarding, or furnish to any person any nonpublic information with respect to, any Competing Proposal;
(iii) engage in discussions with any person with respect to any Competing Proposal;
(iv) approve or recommend any Competing Proposal;
(v) enter into any letter of intent or similar document or any agreement or commitment providing for any Competing Proposal;
(vi) take any action to make the provisions of any “fair price,” “moratorium,” “control share acquisition,”
“business combination”
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or other similar anti-takeover statute or regulation (including any transaction under, or a third party becoming an “interested stockholder” under, Section 203 of the DGCL), or any
restrictive provision of any applicable anti-takeover provision in the Restated Certificate of Incorporation or By-laws of the Company, inapplicable to any person other than Parent and its Affiliates or to any transactions constituting or
contemplated by a Competing Proposal; or
(vii) resolve or agree to do any of the foregoing.
55. Additionally, Section 6.4 of the Merger Agreement grants AOL recurring and unlimited matching rights, which provides it with:
(i) unfettered access to confidential, non-public information about competing proposals from third parties which it can use to prepare a matching bid; and (ii) three business days to negotiate with Millennial, amend the terms of the Merger
Agreement and make a counter-offer in the event a superior offer is received.
56. The non-solicitation and matching rights provisions
essentially ensure that a superior bidder will not emerge, as any potential suitor will undoubtedly be deterred from expending the time, cost, and effort of making a superior proposal while knowing that AOL can easily foreclose a competing bid. As a
result, these provisions unreasonably favor AOL, to the detriment of Millennial’s public stockholders.
57. Lastly, section 8.3 of
the Merger Agreement provides that Millennial must pay AOL a termination fee of $10.25 million in the event the Company elects to terminate the Merger Agreement to pursue a superior proposal. Further, the
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Merger Agreement requires Millennial to pay AOL $2.735 million in expenses under certain circumstances. The termination fee and expense reimbursement provisions further ensure that no competing
offer will appear, as any competing bidder would have to pay a naked premium for the right to provide Millennial’s stockholders with a superior offer.
58. Ultimately, these deal protection provisions unreasonably restrain the Board’s ability to solicit or engage in negotiations with any
third party regarding a proposal to acquire all or a significant interest in the Company.
59. In sum, the Board failed to obtain fair and
reasonable consideration for Millennial’s stockholders, agreed to onerous deal protection provisions that will likely prevent the emergence of a superior offer, and put their personal interests ahead of Millennial’s stockholders while
negotiating the terms of the Proposed Transaction.
60. The Board has thus prevented Plaintiff and the Class from being adequately
compensated for their Millennial shares. Accordingly, Plaintiff seeks injunctive and other equitable relief to prevent the irreparable injury that the Company’s stockholders will continue to suffer absent judicial intervention.
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COUNT I
Claim for Breach of Fiduciary Duties Against the Individual Defendants
61. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.
62. The Individual Defendants have violated fiduciary duties of care, loyalty and good faith owed to the public stockholders of Millennial.
63. By the acts, transactions and courses of conduct alleged herein, the Individual Defendants, individually and acting as a part of a
common plan, are attempting to unfairly deprive Plaintiff and other members of the Class of the true value of their investment in Millennial.
64. As demonstrated by the allegations above, the Individual Defendants failed to exercise the care required, and breached their duties of
loyalty, good faith, and care owed to the stockholders of Millennial. The Individual Defendants failed to take reasonable steps to obtain and/or ensure that Millennial stockholders receive adequate consideration for their shares, agreed to
restrictive deal protection devices that deter other suitors from making a superior bid for the Company, and placed their personal financial interests ahead of those of the Company’s stockholders.
65. The Individual Defendants dominate and control the business and corporate affairs of Millennial, and are in possession of private
corporate
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information concerning Millennial’s assets, business and future prospects. Thus, there exists an imbalance and disparity of knowledge and economic power between them and the public
stockholders of Millennial which makes it inherently unfair for them to benefit their own interests to the exclusion of maximizing stockholder value.
66. By reason of the foregoing acts, practices and course of conduct, the Individual Defendants have failed to exercise ordinary care and
diligence in the exercise of their fiduciary obligations toward Plaintiff and the other members of the Class.
67. As a result of the
actions of the Individual Defendants, Plaintiff and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of Millennial’s assets and businesses and have been and will be prevented
from obtaining a fair price for their common stock.
68. Unless the Individual Defendants are enjoined by the Court, they will continue to
breach their fiduciary duties owed to Plaintiff and the members of the Class, all to the irreparable harm of the members of the Class.
69. Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can
Plaintiff and the Class be fully protected from the immediate and irreparable injury which the Individual Defendants’ actions threaten to inflict.
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COUNT II
On Behalf of Plaintiff and the Class Against
AOL and Merger Sub For Aiding and Abetting
the Individual Defendants’ Breaches of Fiduciary Duty
70. Plaintiff incorporates by reference and realleges each and every allegation contained above, as though fully set forth herein.
71. AOL and Merger Sub have acted and are acting with knowledge of, or with reckless disregard to, the fact that the Individual Defendants are
in breach of their fiduciary duties to Millennial’s public stockholders, and have participated in such breaches of fiduciary duties.
72. AOL and Merger Sub knowingly aided and abetted the Individual Defendants’ wrongdoing alleged herein. In so doing, they rendered
substantial assistance in order to effectuate the Individual Defendants’ plan to consummate the Proposed Transaction in breach of their fiduciary duties.
73. As a result of the unlawful actions of AOL and Merger Sub, Plaintiff and the other members of the Class will be irreparably harmed in that
they will not receive the true and fair value for Millennial’s assets and business. Unless their actions are enjoined by the Court, AOL and Merger Sub will continue to aid and abet the Individual Defendants’ breaches of their fiduciary
duties owed to Plaintiff and the members of the Class.
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74. As a result of the conduct of AOL and Merger Sub, Plaintiff and the other members of the
Class have been and will be damaged in that they have been and will be prevented from obtaining a fair and reasonable price for their Millennial shares.
75. Plaintiff and other members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers
can Plaintiff and the Class be fully protected from the immediate and irreparable injury which the Defendants’ actions threaten to inflict.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands injunctive relief in her favor and in favor of the Class and against Defendants as follows:
A. Declaring that this action is properly maintainable as a class action and certifying Plaintiff as Class representative;
B. Preliminarily and permanently enjoining Defendants and their counsel, agents, employees and all persons acting under, in concert with, or
for them, from proceeding with, consummating, or closing the Proposed Transaction, unless and until the Company adopts and implements a procedure or process to obtain an agreement providing fair and reasonable terms and consideration to Plaintiff
and the Class;
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C. Rescinding, to the extent already implemented, the Merger Agreement or any of the terms
thereof, or granting Plaintiff and the Class rescissory damages;
D. Directing the Individual Defendants to account to Plaintiff and the
Class for all damages suffered as a result of the Individual Defendants wrongdoing;
E. Awarding Plaintiff the costs and disbursements of
this action, including reasonable attorneys’ and experts’ fees; and
F. Granting such other and further equitable relief as this
Court may deem just and proper.
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| Dated: September 16, 2015 |
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FARUQI & FARUQI, LLP |
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By: |
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/s/ James R. Banko |
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James R. Banko (#4518) Derrick
B. Farrell (#5747) 20 Montchanin Road, Suite 145 Wilmington,
DE 19807 Tel.: (302) 482-3182 Fax: (302) 482-3612
Email: jbanko@faruqilaw.com Email: dfarrell@faruqilaw.com
Counsel for Plaintiff |
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| Of Counsel: |
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| FARUQI & FARUQI, LLP Juan E.
Monteverde Miles D. Schreiner 369 Lexington Ave., Tenth
Floor New York, NY 10017 Tel.: (212) 983-9330
Email: jmonteverde@faruqilaw.com Email:
mschreiner@faruqilaw.com Counsel for Plaintiff |
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| KAHN SWICK & FOTI, LLC Michael
J. Palestina, Esq. 206 Covington Street Madisonville, LA
70447 Tel.: (504) 455-1400 Fax: (504) 455-1498
E-mail: Michael.Palestina@ksfcounsel.com
Counsel for Plaintiff |
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EFiled: Sept 16 2015 05:40PM EDT
Transaction ID 57880393 Case No. 11511- |
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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| AN NGUYEN, Individually and On Behalf of All Others
Similarly Situated,
Plaintiff
v.
MICHAEL G. BARRETT, THOMAS R. EVANS, ROBERT P. GOODMAN, PATRICK KERINS, ROSS B. LEVINSOHN, WENDA HARRIS MILLARD, JAMES A. THOLEN, AOL INC., and MARS
ACQUISITION SUB, INC.,
Defendants.
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C.A. No. |
VERIFICATION AND AFFIDAVIT OF AN NGUYEN
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| STATE OF CALIFORNIA |
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ss.: |
| COUNTY OF SANTA CLARA |
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) |
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I, AN NGUYEN, being duly sworn depose and state that:
1. I am the plaintiff in the above-entitled action. I have read the foregoing Verified Class Action Complaint and authorized its filing.
The facts set forth in the Verified Class Action Complaint that relate to the acts and deeds for myself are true to my knowledge. With respect to the facts set forth in the
forgoing Verified Class Action Complaint that relate to the acts of others, as to those matters, I believe them to be true based on the investigation of my attorneys.
2. I have not received, been promised or offered and will not accept any form of compensation, directly or indirectly, for prosecuting or
serving as a representative party in this action except (i) such damages or other relief as the Court may award me as a member of the Class; (ii) such fees, costs or other payments as the Court expressly approves to be paid to me; or
(iii) reimbursement, paid by my attorneys, of actual and reasonable out-of-pocket expenditures incurred directly in connection with the prosecution of this action.
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A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which
this
certificate is attached, and not the truthfulness,
accuracy, or validity of that document. |
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| State of California County of SANTA
CLARA Subscribed and sworn to (or affirmed) before me on this
16th day of September 2015 by AN NGUYEN
proved to me on the basis of satisfactory evidence to be the
person(s) who appeared before me. Signature: /s/ Cathy M.
Wong |
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EFiled: Sept 16 2015 05:40PM EDT
Transaction ID 57880393 Case No. 11511- |
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SUPPLEMENTAL INFORMATION PURSUANT TO RULE 3(A)
OF THE RULES OF THE COURT OF CHANCERY
The information contained herein is for the use by the Court for statistical and administrative purposes only. Nothing stated herein shall be
deemed an admission by or binding upon any party.
An Nguyen, Individually and On Behalf of All Others Similarly Situated vs.
Michael G. Barrett, Thomas R. Evans, Robert P. Goodman, Patrick Kerins, Ross B. Levinsohn, Wenda Harris Millard, James A. Tholen, AOL Inc., and Mars Acquisition Sub, Inc.
| 2. |
Date Filed: September 16, 2015 |
| 3. |
Name and address of counsel for plaintiff(s): |
James R. Banko, Esquire and Derrick B. Farrell,
Esquire
Faruqi &
Faruqi, LLP
20 Montchanin Road, Suite 145, Wilmington, DE 19807
| 4. |
Short statement and nature of claim asserted: |
Plaintiff and other public stockholders of
Millennial Media, Inc. (“Millennial”) brings this class action suit against the Board of Directors of Millennial and other defendants for breach of fiduciary duties in connection with the proposed acquisition of Millennial.
| 5. |
Substantive Field of Law involved (check one): |
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| ¨ Administrative law |
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¨ Labor law |
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¨ Trusts, Wills and Estates |
| ¨ Commercial law |
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¨ Real Property |
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¨ Consent trust petitions |
| ¨ Constitutional law |
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¨ 348 Deed Restriction |
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¨ Partition |
| x Corporation law |
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¨ Zoning |
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¨ Rapid Arbitration (Rules 96,97) |
| ¨ Trade secrets/trade mark/or other intellectual property |
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¨ Other |
| 6. |
Related cases, including any Register of Wills matters (this requires copies of all documents in this matter to be filed with the Register of Wills): |
David Desjardins v. Millennial Media, Inc., et al., C.A. No. 11490-VCG; Joseph Wagner v. Michael Barrett, et al., C.A.
No. 11503-VCG; Paul Parshall v. Millennial Media, Inc., et al., C.A. No. 11485-VCG; Kien Chen v. Michael G. Barrett, et al., C.A. No. 11496-VCG
| 7. |
Basis of court’s jurisdiction (including the citation of any statute(s) conferring jurisdiction): |
10 Del. C. § 341
| 8. |
If the complaint seeks preliminary equitable relief, state the specific preliminary relief sought. |
| 9. |
If the complaint seeks a TRO, summary proceedings, a Preliminary Injunction, or Expedited Proceedings, check here ¨. (If #9 is checked, a Motion to Expedite must
accompany the transaction.) |
| 10. |
If the complaint is one that in the opinion of counsel should not be assigned to a Master in the first instance, check here and attach a statement of good cause. x
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/s/ James R.
Banko (#4518)
Signature of Attorney of Record & Bar ID
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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| AN NGUYEN, Individually and On Behalf of
All
Others Similarly Situated,
Plaintiff
v.
MICHAEL G. BARRETT, THOMAS R. EVANS,
ROBERT P. GOODMAN, PATRICK KERINS,
ROSS B. LEVINSOHN, WENDA HARRIS
MILLARD, JAMES A. THOLEN, AOL INC.,
and
MARS ACQUISITION SUB, INC.,
Defendants.
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C.A. No. |
STATEMENT OF
GOOD CAUSE
I am a partner of Faruqi & Faruqi, LLP, and a member in good standing of the Bar of the State of Delaware.
With my firm, I am counsel to Plaintiff in this action. We respectfully submit that this action is inappropriate for submission to a Master in the first instance, as the case involves complex issues under Delaware corporate law.
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| Dated: September 16, 2015 |
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Respectfully submitted |
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FARUQI & FARUQI, LLP |
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By: /s/ James R.
Banko |
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James R. Banko (Del. Bar. No. #4518) Derrick
B. Farrell (Del Bar. No. #5747) 20 Montchanin Road, Suite 145
Wilmington, DE 19807 Tel.: (302) 482-3182
Fax: (302) 482-3612 Email: jbanko@faruqilaw.com
dfarrell@faruqilaw.com
Attorneys for Plaintiff |
Exhibit (d)(2)
AOL INC.
CONFIDENTIAL NON-DISCLOSURE AGREEMENT
Effective Date: January 16, 2015
In order to induce the parties hereto to disclose certain Confidential Information (as described below) and to protect such Confidential
Information, AOL Inc., with offices at 22000 AOL Way, Dulles, Virginia 20166 (“AOL”) and Millennial Media Inc. with offices at COMPANY ADDRESS (the “Company”) hereby agree as follows:
1. Disclosing Party: AOL and the Company are sometimes referred to herein separately as a “Party” and together as
the “Parties.” The Party disclosing Confidential Information is sometimes referred to herein as “Discloser” and the Party in receipt of such Confidential Information is sometimes referred to herein as “Recipient.”
2. Primary Representative: Each Party’s representative for coordinating disclosure or receipt of Confidential Information
is: (i) AOL: Mark Roszkowski, Senior Vice President, AOL Inc., 770 Broadway, New York, NY 10003; and (ii) the Company: CONTACT NAME, CONTACT’S TITLE, Millennial Media Inc., COMPANY ADDRESS.
3. Description of Confidential Information: For purposes of this Confidential Non-Disclosure Agreement
(“Agreement”), “Confidential Information” means any information which is disclosed during the Term (as defined below) and which (i) is or should be reasonably understood to be confidential or proprietary to Discloser or its
Affiliates (as defined below) (such information may include without limitation information concerning Discloser’s business, products, services, content, finances, subscribers, users, tools, source code, product designs and plans, customer lists
and other marketing and technical information, the terms and existence of this Agreement, and other unpublished information) or (ii) is so designated by Discloser by prominently marking it with a “confidential,”
“proprietary” or similar legend. “Affiliate(s)” shall mean an entity controlling, controlled by or under common control with a Party.
4. Use of Confidential Information: Recipient shall make use of the Confidential Information only for the purpose of
discussing and evaluating a possible business relationship between the Parties (the “Transaction”), described more fully as follows: an investment in and/or acquisition of the Company by AOL. During the Term of this Agreement, neither
Party shall disclose the existence or nature of this Agreement or the Transaction to any third party without the other Party’s prior written consent.
5. Term: This Agreement shall terminate six (6) months after the Effective
Date (the “Term”), however Recipient’s obligations to protect Confidential Information shall survive for two (2) years after termination.
6. Standard of Care: Recipient shall not use Confidential Information for any purpose other than the intended use set forth in
paragraph 4 above, and shall not disclose, disseminate or otherwise publish or communicate Confidential Information of the other Party to any person, firm, corporation or other third party without the prior written consent of Discloser, except to
Recipient’s employees, consultants, Affiliates and representatives who have a need to know, who have been informed of Recipient’s obligations hereunder, and who have previously agreed (e.g., as a condition of their employment or agency) to
be bound by terms regarding the protection of confidential information that are substantially similar to those of this Agreement and which would extend to Discloser’s Confidential Information. Recipient agrees to use the same degree of care
that it uses to protect its own confidential information of a like nature from unauthorized disclosure, but in no event less than a reasonable degree of care.
7. Exclusions: This Agreement imposes no obligation upon Recipient with respect to information that: (i) was in
Recipient’s possession before receipt from Discloser; (ii) is or becomes a matter of public knowledge through no fault of Recipient; (iii) is rightfully received by Recipient from a third party without a duty of confidentiality;
(iv) represents general conceptual information (as compared to, e.g., specific technical or financial information, specific product offerings or specific product ideas) which is incidentally retained in the unaided memories of persons who have
had access to the Confidential Information; (v) is independently developed by Recipient without use of Discloser’s Confidential Information; (vi) is disclosed under operation of law, provided that the Recipient will use reasonable
efforts to provide Discloser with prompt written notice of any such requirement in order to enable Discloser to seek an appropriate protective order or other remedy, and that Recipient will disclose only such information as is legally required and
will use reasonable efforts to obtain confidential treatment for any Confidential Information that is so disclosed; or (vii) is disclosed by Recipient with Discloser’s prior written approval.
8. Warranty: Each Discloser warrants that it has the right to make the disclosures under this Agreement. NO OTHER
WARRANTIES ARE MADE BY EITHER PARTY UNDER THIS
Confidential
AGREEMENT. ANY INFORMATION EXCHANGED UNDER THIS AGREEMENT IS PROVIDED “AS IS”.
9. Other Business Activities: (a) Nothing in this Agreement will be construed as a representation or agreement to
restrict reassignment of Recipient’s employees, or in any manner affect or limit either Party’s present or future business activities.
(b) Nothing in this Agreement will be construed as a representation or agreement that Recipient will not develop or have developed for it
products, concepts, systems or techniques that are similar to or compete with any such products, concepts, systems or techniques described in the Confidential Information, provided that Recipient does not violate any of its obligations under this
Agreement in connection with such development.
(c) This Agreement does not create any agency or partnership relationship. Nothing in
this Agreement shall be construed as implying any commitment or agreement by either Party to make an investment in the other Party or in any business of the other Party or to enter into any other business arrangement of any nature whatsoever.
10. Ownership and Other Rights: Neither Party acquires any intellectual property rights under this Agreement except the
limited rights necessary to carry out the intended use set forth in paragraph 4 (Use of Confidential Information) above.
11.
Return of Confidential Information: Recipient will, at Recipient’s option, return or destroy all tangible material embodying Confidential Information (in any form or medium and including, without limitation, all summaries, copies and
excerpts of Confidential Information) at any such time as Discloser may so request. Notwithstanding anything contained herein to the contrary, and subject to the continuing confidentiality obligations set forth herein, Recipient (a) will not be
obligated to erase Confidential Information contained in archived computer system backups in accordance with Recipient’s security and/or disaster recovery procedures, and (b) may maintain one copy of any Confidential Information in
Recipient’s records as may be required by the regulations and rules of any governmental agency or other regulatory authority, including any self-regulatory organization having, or claiming to have, jurisdiction.
12. Injunctive Relief: Recipient acknowledges that disclosure or use of Confidential Information in violation of this
Agreement could cause irreparable harm to Discloser for which monetary damages may be difficult to ascertain or an inadequate remedy.
Recipient therefore agrees that Discloser will have the right, in addition to its other rights and remedies, to seek injunctive relief for any violation of this Agreement.
13. Nonwaiver: Any failure by either Party to enforce the other Party’s strict performance of any provision of this
Agreement will not constitute a waiver of its right to subsequently enforce such provision or any other provision of this Agreement.
14. Miscellaneous: (a) Any notice, approval, request, authorization, direction or other communication under this
Agreement shall be given in writing and shall be deemed to have been delivered and given for all purposes (i) on the delivery date if delivered personally to the Party to whom the same is directed; (ii) one (1) business day after
deposit with a commercial overnight carrier, with written verification of receipt, or (iii) five (5) business days after the mailing date, whether or not actually received, if sent by U.S. mail, return receipt requested, postage and
charges prepaid, or any other means of rapid mail delivery for which a receipt is available. In the case of AOL, such notice will be provided to the Deputy General Counsel for Transactions, located at AOL Inc., 22000 AOL Way, Dulles, VA 20166. In
the case of the Company, such notice will be provided to the Company Primary Representative identified in paragraph 2 and the General Counsel, each located at the address set forth in paragraph 2 above.
(b) All additions or modifications to this Agreement must be made in writing and signed by a duly authorized representative of each Party.
(c) This Agreement shall be interpreted, construed and enforced in all respects in accordance with the laws of the State of New York
except for its conflicts of laws principles. Each Party irrevocably consents to the exclusive jurisdiction, forum and venue of the Commercial Division of the Supreme Court of the State of New York, New York County and the United States District
Court for the Southern District of New York over any and all claims, disputes, controversies or disagreements between the Parties or any of their respective subsidiaries, affiliates, successors and assigns under or related to this Agreement.
(d) This Agreement may be executed in counterparts, each of which shall be deemed an original and both of which together shall constitute
one and the same document and such original signatures may be delivered to the other Party by facsimile transmission or by email.
-2-
Confidential
(e) Neither Party shall assign or transfer any rights or obligations under this Agreement
without the prior written consent of the other Party; except that either Party may assign or transfer this Agreement to an Affiliate. Subject to the limitations set forth in this Agreement, this Agreement will inure to the benefit of and be binding
upon the Parties, their successors and assigns.
(f) If any provision of this Agreement shall be held by a court of competent
jurisdiction to be unenforceable, the remaining provisions shall remain in full force and effect.
* * *
|
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| AOL INC. |
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| By: |
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/s/ Mark Roszkowski |
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| Name: |
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Mark Roszkowski |
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| Title: |
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SVP, Head Corporate Development |
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| Date: |
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1/20/15 |
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| MILLENNIAL MEDIA INC. |
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| By: |
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/s/ Michael Barrett |
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| Name: |
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Michael Barrett |
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| Title: |
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President & CEO |
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| Date: |
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1.19.15 |
-3-
Exhibit (d)(3)
JOINDER AGREEMENT TO CONFIDENTIAL NON-DISCLOSURE AGREEMENT
This Joinder Agreement (this “Joinder”) to the Confidential Non-Disclosure Agreement (the “Original
Agreement”), effective as of January 16, 2015, by and between AOL Inc., a Delaware corporation (“AOL”), and Millennial Media Inc., a Delaware corporation (the “Company”), is entered into as of the 18th
day of May, 2015 (the “Effective Date”), by and between AOL, the Company and Verizon Communications Inc. (together with its Affiliates, “Verizon”).
WITNESSETH:
WHEREAS, AOL has entered into an Agreement and Plan of Merger with Verizon (the “Merger Agreement”); and
WHEREAS, AOL desires to share Confidential Information of the Company with Verizon and Verizon desires to receive and review such
Confidential Information; and
WHEREAS, the Company and AOL desire to make Verizon a party to and bound by the Original Agreement;
and
WHEREAS, Verizon shall become a “Party” to the Original Agreement with the same rights and obligations as the other
Parties to the Original Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:
1.
Joinder. Effective as of the date hereof, by executing and delivering this Joinder, Verizon agrees to become a “Party” to, to be bound by, and to comply with the provisions of the Original Agreement in the same manner as if Verizon
were an original signatory to the Original Agreement. Notwithstanding anything to the contrary in paragraph 6 of the Original Agreement, AOL may share the Company’s Confidential Information with Verizon and Verizon and AOL may discuss and
communicate the Company’s Confidential Information with each other; provided that the Merger Agreement is in effect and has not been terminated in accordance with its terms. Verizon’s representative for coordinating receipt or disclosure
of Confidential Information is: Alex Gonzalez, Vice President – Corporate Development, Verizon, One Verizon Way, Basking Ridge, New Jersey 07920.
2.
No Other Amendments. Except as specifically provided in this Joinder, no other amendments, revisions or changes are made or have been made to the Original Agreement. All other terms and conditions of the Original Agreement remain in full
force and effect and the parties hereby ratify and confirm their rights, obligations and representations under the Original Agreement, as amended hereby.
3. Conforming References. Upon the effectiveness of this Joinder, each reference in the Original Agreement
to “this Agreement”, “thereunder”, “hereto”, “herein”, or words of like import, shall mean and be a reference to the Original Agreement as modified by this Joinder.
4. Capitalized Terms. Any capitalized terms used in this Joinder but not defined herein shall have the respective meanings ascribed thereto in the
Original Agreement.
5. Counterparts. This Joinder may be executed in one or more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement, and shall become binding when one or more counterparts have been signed by each of the parties and delivered to the other.
6. Effectiveness of Joinder. The modifications to the Original Agreement contemplated by this Joinder shall be effective as of the Effective Date.
[Remainder of page left blank intentionally.]
-2-
IN WITNESS WHEREOF, the parties have caused this Joinder to be executed as of the
Effective Date.
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| MILLENNIAL MEDIA INC. |
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| By: |
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/s/ Ho Shin |
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Name: |
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Ho Shin |
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Title: |
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General Counsel |
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| AOL INC. |
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| By: |
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/s/ Mark Roszkowski |
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Name: |
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Mark Roszkowski |
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Title: |
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SVP, Corporate Development |
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| VERIZON COMMUNICATIONS INC. |
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| By: |
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/s/ William L. Horton, Jr. |
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Name: |
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William L. Horton, Jr. |
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Title: |
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Senior Vice President, Deputy General Counsel & Secretary |
Exhibit (d)(4)
PRIVATE AND CONFIDENTIAL
August 26, 2015
Millennial Media, Inc.
2400 Boston Street, Suite 300
Baltimore, Maryland 21224
Attn: Michael G. Barrett, President
and CEO
| |
Re: |
Extension of Confidential Non-Disclosure |
Ladies and Gentlemen:
Reference is made to that certain (i) Confidential Non-Disclosure Agreement (the “Agreement”), effective as of
January 16, 2015, by and between AOL Inc. (“AOL”) and Millennial Media, Inc. (the “Company”) and (ii) Joinder Agreement to Confidential Non-Disclosure Agreement,
entered into as of May 18, 2015, by and between AOL, the Company and Verizon Communications Inc. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Agreement.
The Parties hereby agree that Section 5 of the Agreement is amended by deleting “six (6) months” and inserting in place
thereof “nine (9) months”.
Except as specifically modified hereby, the Agreement shall continue in full force and effect
without modification. Sections 9(c), 12, 13 and 14 of the Agreement arc incorporated by reference into this letter agreement as if set forth in full herein.
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| Very truly yours, |
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| AOL INC. |
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| By: |
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/s/ Tom C. Lee |
| Name: |
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Tom C. Lee |
| Title: |
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VP, Corporate Development |
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| VERIZON COMMUNICATIONS INC. |
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| By: |
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/s/ William L. Horton, Jr. |
| Name: |
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William L. Horton, Jr. |
| Title: |
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SVP, Deputy GC and Corporate Secretary |
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| Agreed to and accepted as of the date first set forth above: |
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| MILLENNIAL MEDIA INC. |
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| By: |
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/s/ Ho Shin |
| Name: |
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Ho Shin |
| Title: |
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General Counsel |
[Signature Page to Extension of Confidential Non-Disclosure Agreement]
Exhibit (d)(5)
PRIVATE AND CONFIDENTIAL
June 15, 2015
Millennial Media, Inc.
2400 Boston Street, Suite 300
Baltimore, Maryland 21224
Attn: Michael G. Barrett, President
and CEO
| |
Re: |
Exclusivity Agreement |
Ladies and Gentlemen:
AOL Inc. (together with its successors and assigns, “AOL”) has commenced discussions with Millennial Media, Inc.
(“Millennial Media”) regarding a possible acquisition of a majority of the consolidated assets or securities of Millennial Media by AOL, whether by merger, purchase or otherwise (the “Proposed Transaction”).
Millennial Media recognizes that AOL’s continued evaluation and negotiation of the Proposed Transaction would require the expenditure of significant additional time, effort and resources, both internal and external, by AOL. In consideration
for, among other things, the willingness of AOL to devote such time, effort and resources in connection with the pursuit of the Proposed Transaction, the parties hereto, intending to be legally bound, hereby agree as follows (this
“Agreement”):
1. (a) During the period commencing with the date hereof and ending on the earliest to occur of (1) the date of
execution of a definitive written agreement with respect to the Proposed Transaction, (2) the termination of negotiations between AOL and Millennial Media with respect to the Proposed Transaction as confirmed in writing by both parties
hereto, (3) any reduction in the proposed purchase price of the Proposed Transaction communicated either verbally or in writing by AOL or one of its Representatives (as defined below) to Millennial Media or one of its Representatives as set
forth in Exhibit A hereto, or (4) 5:00 p.m. New York City time on July 17, 2015 (the “Exclusivity Period”), AOL shall have the exclusive right to negotiate with Millennial Media regarding the Proposed Transaction.
Notwithstanding the foregoing, the Exclusivity Period shall not terminate due to a verbal communication pursuant to clause (3) of the immediately preceding sentence unless and until (A) Millennial Media in writing (i) represents
that it has received such a verbal communication from AOL and (ii) requests that AOL provide written confirmation that the proposed purchase price remains consistent with Exhibit A hereto and (B) AOL fails to provide the written
confirmation described in the immediately preceding clause (A)(ii) within two (2) business days after receipt of Millennial Media’s written request.
(b) Without limiting the foregoing, during the Exclusivity Period Millennial Media shall not, and shall cause its affiliates and its and their
respective officers, directors, employees, investment bankers, attorneys, accountants, financial advisors, agents and other representatives (collectively, its “Representatives”) not to, directly or indirectly, (i) initiate,
offer, knowingly encourage, or solicit any inquiries with respect to any Alternative Transaction (as defined below) or the making of any proposal or offer for an Alternative Transaction; (ii) engage or participate in negotiations or discussions
with, or furnish access to its properties, books or records or provide any information to, any persons or entities in connection with an Alternative Transaction or any offer or proposal for an Alternative Transaction; (iii) approve or
recommend any Alternative Transaction; or (iv) enter into any letter of intent, agreement in principle, acquisition agreement, option agreement or other similar statement of intention or agreement relating to any Alternative Transaction.
(c) During the Exclusivity Period, if Millennial Media or any of its Representatives shall have
taken any of the actions set forth in clauses (i) through (iv) above in breach of this Agreement, Millennial Media shall notify AOL promptly (and in no event later than the end of the next business day) after it becomes aware of the taking
of such action. Millennial Media agrees that it shall be responsible for any breach of this Agreement by its Representatives (acting on behalf of Millennial Media).
(d) Millennial Media will, and will cause its Representatives to, immediately cease and terminate (and, during the Exclusivity Period,
Millennial Media will not, and will instruct its Representatives not to, resume or otherwise continue) any existing solicitation, discussion or negotiation or other direct or indirect contact with any third parties with respect to any Alternative
Transaction. During the Exclusivity Period, Millennial Media agrees to promptly (and in no event later than the end of the next business day) notify AOL of the receipt of any communication from a third party regarding any Alternative Transaction.
(e) As used in this Agreement, “Alternative Transaction” means, other than the Proposed Transaction: (i) any sale,
transfer, disposition or similar transaction or series of related transactions in which any third party or group would acquire beneficial ownership (as defined in Rule 13d-3 as promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of (or an interest that currently or with the passage of time or other event is convertible into or exchangeable or exercisable for) fifteen percent (15%) or more of any class of equity or voting securities of
Millennial Media or any of its subsidiaries, (ii) a merger, consolidation, business combination, reorganization, share exchange, recapitalization or similar transaction or series of related transactions involving Millennial Media or any of its
subsidiaries with any third party, (iii) any sale, lease, transfer, license or other disposition of assets (including equity interests in subsidiaries) of Millennial Media or any of its subsidiaries that would result in a third party’s
acquisition of more than fifteen percent (15%) of the fair market value of the total consolidated assets of Millennial Media and its subsidiaries, taken as a whole, or to which more than fifteen percent (15%) of the consolidated revenues
and earnings of Millennial Media and its subsidiaries, taken as a whole, are attributable, in any transaction or series of related transactions, or (iv) any joint venture or other sale of interests, pursuant to which a third party or joint
venture would own more fifteen percent (15%) of the consolidated assets of Millennial Media and its subsidiaries, taken as a whole.
2. Unless and
until a definitive agreement with respect to a Proposed Transaction has been duly and validly executed and delivered by the parties thereto, none of AOL or Millennial Media will be under any (and nothing in this Agreement shall be construed as a)
legal obligation or commitment to continue discussions or negotiations about, to enter into one or more definitive written agreements for, or to consummate, a Proposed Transaction or any other transaction by virtue of this Agreement or any other
written or oral expression with respect thereto. No party shall have any obligation to authorize the Proposed Transaction or any other transaction with the other party. The terms and existence of this Agreement, as well as the existence of
negotiations between the parties, shall be held confidential in accordance with the provisions of that certain Confidentiality Non-Disclosure Agreement, effective as of January 16, 2015, between AOL and Millennial Media (as it may be amended
from time to time, the “Confidentiality Agreement”).
3. AOL hereby acknowledges and agrees that, except for negotiations concerning the
Proposed Transaction or as otherwise agreed in writing by Millennial Media, for a period of one (1) year from the date of this Agreement, none of AOL or any of its controlled Affiliates (as such term is defined in Rule 12b-2 of the Securities
Exchange Act of 1934, as amended) will: (a) propose (i) any merger, consolidation, business combination, tender or exchange offer, purchase of all or 50% or more of Millennial Media’s assets or businesses, or similar transactions
involving Millennial Media or (ii) any recapitalization, restructuring, liquidation or other extraordinary transaction with respect to Millennial Media; (b) (i) acquire beneficial ownership of any securities (including in derivative
form) of Millennial Media (collectively, a transaction specified in (a)(i), (a)(ii) and (b)(i) involving a majority of the Millennial Media’s outstanding capital stock or consolidated assets, is referred to as a “Business
Combination”), (ii) propose or seek, whether alone or
2
in concert with others, any “solicitation” (as such term is used in the rules of the Securities and Exchange Commission) of proxies or consents to vote any securities (including in
derivative form) of Millennial Media, (iii) nominate any person as a director of Millennial Media, or (iv) propose any matter to be voted upon by the stockholders of Millennial Media; (c) directly or indirectly, form, join or in any
way participate in a third party “group” (as such term is used in the rules of the Securities and Exchange Commission) (or discuss with any third party the potential formation of a group) with respect to any securities (including in
derivative form) of Millennial Media or a Business Combination involving Millennial Media; (d) request Millennial Media (or any of its officers, directors or Representatives), directly or indirectly, to amend or waive any provision of this
paragraph (including this sentence); or (e) take any action with respect to Millennial Media that would reasonably be expected to require Millennial Media to make a public announcement regarding a potential Business Combination;
provided, however, that (x) the restrictions set forth in this paragraph shall terminate and be of no further force and effect if (A) Millennial Media enters into a definitive agreement with respect to, or announces that it
plans to enter into, a transaction involving all or 50% or more of Millennial Media’s outstanding voting securities or the consolidated assets of Millennial Media and its subsidiaries (whether by merger, consolidation, business combination,
joint venture, tender or exchange offer, recapitalization, restructuring, sale, equity issuance or another transaction), including with respect to a Potential Transaction, (B) any third party commences a tender offer or exchange offer for
Millennial Media’s outstanding voting securities, (C) any third party nominates directors or otherwise attempts to acquire control of Millennial Media (including by way of a solicitation of proxies) or (D) Millennial Media provides
confidential information or enters into discussions with respect to a Business Combination with any third party without requiring such third party to agree to “standstill” and non-solicitation provisions, in each case no less restrictive
than those set forth in this and the following paragraph, or waives any such provisions with respect to any third party, and (y) nothing in this Agreement shall prohibit AOL from communicating any offer or proposal to the board of directors or
chief executive officer of Millennial Media if requested or invited by Millennia Media. In addition, nothing in this Agreement shall prohibit investments for cash management purposes in diversified investment vehicles in the ordinary course of
business or acquisitions of securities or derivative securities by company benefit plans in the ordinary course of business.
4. AOL, agrees that, for a
period of one (1) year from the date of this Agreement, none of AOL or any of its controlled Affiliates will, directly or indirectly, solicit for employment any of the individuals listed on Exhibit B hereto without obtaining the prior written
consent of Millennial Media; provided that AOL may make general solicitations for employment not specifically directed at Millennial Media or any of its subsidiaries or their respective employees.
5. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and assigns, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement. This Agreement may be amended only pursuant to a written instrument signed by both
parties hereto. No failure or delay by any party in exercising any of its rights hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof. If any provision of this
Agreement is held to be invalid, void or unenforceable, the remainder of the provisions of this Agreement will remain in full force and effect.
6. This
Agreement will be governed by and construed in accordance with the laws of the State of Delaware (without giving effect to principles of conflicts of laws). Each party (a) irrevocably consents and submits to the jurisdiction of the state courts
(and if state courts are not available, federal courts) located in the State of Delaware (the “Chosen Courts”) for purposes of any action, suit or proceeding arising out of or relating to this Agreement; (b) agrees that service
of any process, summons, notice or document by U.S. registered mail to the address set forth on the signature page of this Agreement shall be effective service of process for any action, suit or proceeding brought against such party;
(c) irrevocably waives any objection
3
to venue of proceeding arising out of or relating to this Agreement in any Chosen Court; (d) agrees not to claim that any proceeding relating to this Agreement that is brought in any Chosen
Court has been brought in an inconvenient forum and (e) agrees that monetary damages would not be a sufficient remedy for any breach of this Agreement and that the non-breaching party shall be entitled to equitable relief, including an
injunction and specific performance, as a remedy for any such breach, and that such remedy shall not be deemed to be the exclusive remedy for a breach by either party of this Agreement but shall be in addition to all other remedies available at law
or in equity.
7. This Agreement may be executed and delivered (including, without limitation, by facsimile transmission or PDF) in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Signature Page Follows]
4
If you are in agreement with the terms of this Agreement and desire to proceed on that basis,
please sign this Agreement in the space provided below and return an executed copy to AOL, upon which this Agreement will be a binding agreement between us.
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| AOL INC. |
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/s/ Mark Roszkowski |
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Name: |
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Mark Roszkowski |
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Title: |
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SVP, Head of Corporate Development |
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| Address: |
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770 Broadway, 4th Floor |
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New York, NY 10003 |
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| ACCEPTED AND AGREED |
| as of this 15th day of June, 2015: |
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| MILLENIAL MEDIA, INC. |
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| By: |
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/s/ Michael Barrett |
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Name: |
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Michael Barrett |
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Title: |
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CEO |
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150 W. 22nd St., 12th Floor |
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New York, NY 10011 |
[Signature page to Exclusivity Agreement]
EXHIBIT A
$2.10 per share of common stock
EXHIBIT B
Matt Gillis
Jason Kelly
Mark Connon
Matt Tengler
Jim Butler
Ray Colwell
Alia Lamborghini
Lewis Rothkopf
Michael Sullivan
Patrick McCormick
Ben Widhelm
Bob Hammond
Carl Wartzack
Zac Pinkham
Robert Woolfrey
Exhibit (d)(6)
PRIVATE AND CONFIDENTIAL
July 21, 2015
Millennial Media, Inc.
2400 Boston Street, Suite 300
Baltimore, Maryland 21224
Attn: Michael G. Barrett, President
and CEO
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Re: |
Exclusivity Agreement Amendment No.1 |
Ladies and Gentlemen:
Reference is made to that certain Exclusivity Agreement (the “Agreement”), dated as of June 9, 2015, by and between AOL
Inc. (together with its successors and assigns, “AOL”) and Millennial Media, Inc. (“Millennial Media”). AOL acknowledges that its exclusive right to negotiate with Millennial Media regarding the Proposed Transaction
under the Agreement terminated on July 17, 2015. Millennial Media recognizes that AOL’s continued evaluation and negotiation of the Proposed Transaction requires the expenditure of additional time, effort and resources, both internal and
external, by AOL. In consideration for, among other things, the willingness of AOL to devote such time, effort and resources in connection with the pursuit of the Proposed Transaction, the parties, intending to be legally bound, hereby agree to
amend the Agreement as follows (this “Amendment”):
1. Amendment. The second sentence of paragraph 1(d) of the
Agreement is hereby amended and restated in its entirety as follows:
“Until August 20, 2015, notwithstanding the expiration of
the Exclusivity Period, Millennial Media agrees to promptly (and in no event later than the end of the next business day) notify AOL of the receipt of any communication from a third party regarding any Alternative Transaction. The foregoing
notification requirement shall only apply to the initial communication from each third party received after the date of Amendment No. 1 to the Agreement, and not to ongoing communications should Millennial Media engage in discussions with such
third-party.”
2. Effectiveness of this Amendment. Upon the execution of this Amendment by the parties hereto, the Agreement
shall be amended and supplemented in accordance herewith, and this Amendment shall form a part of the Agreement for all purposes. Except for the amendment set forth herein, the text of the Agreement shall remain unmodified and in full force and
effect in accordance with its terms.
3. Captions; Defined Terms. Section captions used in this Amendment are for convenience only,
and shall not affect the construction of this Amendment. Capitalized terms not otherwise defined in this Amendment shall have the meanings assigned to them in the Agreement.
4. Governing Law; Venue. This Amendment will be governed by and construed in accordance
with the laws of the State of Delaware (without giving effect to principles of conflicts laws). Each party (a) irrevocably consents and submits to the jurisdiction of the state courts (and if state courts are not available, federal courts)
located in the State of Delaware (the “Chosen Courts”) for purposes of any action, suit or proceeding arising out of or relating to this Amendment; (b) agrees that service of any process, summons, notice or document by U.S.
registered mail to the address set forth on the signature page of this Amendment shall be effective service of process for any action, suit or proceeding brought against such party; (c) irrevocably waives any objection to venue of proceeding
arising out of or relating to this Amendment in any Chosen Court; (d) agrees not to claim that any proceeding relating to this Amendment that is brought in any Chosen Court has been brought in an inconvenient forum; and (e) agrees that
monetary damages would not be a sufficient remedy for any breach of this Amendment and that the non-breaching party shall be entitled to equitable relief, including an injunction and specific performance, as a remedy for any such breach, and that
such remedy shall not be deemed to be the exclusive remedy for a breach by either party of this Amendment but shall be in addition to all other remedies available at law or in equity.
5. Counterparts. This Amendment may be executed and delivered (including, without limitation, by facsimile transmission or PDF) in one
or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[Signature Page Follows]
2
If you are in agreement with the terms of this Amendment, please sign this Amendment in the space
provided below and return an executed copy to AOL, upon which this Amendment will be a binding agreement between us.
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| AOL INC. |
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| By: |
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/s/ Mark Roszkowski |
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Name: |
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Mark Roszkowski |
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Title: |
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SVP, Head of Corporate Development |
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| Address: |
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770 Broadway, 4th Floor |
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New York, NY 10003 |
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| ACCEPTED AND AGREED |
| as of this 21st day of July, 2015: |
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| MILLENIAL MEDIA, INC. |
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| By: |
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/s/ Michael Barrett |
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Name: |
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Michael Barrett |
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Title: |
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President and CEO |
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| Address: |
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150 W. 22nd St., 12th Floor |
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New York, NY 10011 |
[Signature page to Exclusivity Agreement Amendment No. 1]
Exhibit (d)(7)
Revised August 6, 2015
July 13, 2015
Ernie Cormier
504 Brush Hill Road
Milton, MA 02186
Dear Ernie:
Today is a good day! In connection with AOL
Inc.’s acquisition of Millennial Media, Inc. (“Millennial”), AOL Inc. (together with its subsidiaries, “AOL” or the “Company”) is pleased to offer you the position of Senior Vice President and Chief Product Officer
reporting to Seth Demsey, on the terms and conditions set forth in this letter. Please read this letter carefully.
The terms of employment set forth in
this letter are conditioned upon the closing of AOL’s acquisition of Millennial (the “Closing”) and do not become effective until the date of the Closing (the “Closing Date”). In the event the Closing does not occur, the
Company will promptly notify you and this offer will be null and void and not become effective.
This letter constitutes the full terms and conditions of
your employment with the Company and is contingent on you starting employment with the Company on the Closing Date. This letter supersedes any prior oral or written promises that may have been made to you by Millennial or the Company, including, but
not limited to, any offer letter, employment agreement, severance agreement, bonus plan, commission plan, incentive program, sales program, or any similar arrangement, including any bonus or commission arrangement set forth in your employment
agreement or offer letter, contractor agreement, consulting agreement or other arrangement entered into between you and Millennial; provided that this letter will not supersede, modify or otherwise affect the terms and conditions of the applicable
Millennial equity plan and employment or award agreement governing your equity awards, or the treatment of equity awards contemplated by the Merger Agreement governing AOL’s acquisition of Millennial. Further, the provisions in your equity
award agreements with Millennial (including Section 2.3 of your Millennial employment agreement) that provide for the vesting of Millennial restricted share units upon a change in control, or upon a termination without “Cause” or
resignation with “Good Reason” in connection with a change in control will not be superseded, modified or otherwise affected by the terms of this letter, and will apply with respect to the cash-based awards into which such restricted share
unit awards will convert as of the Closing; provided that the definition of “good reason” used therein shall be superseded by the definition of
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“Good Reason” set forth in this letter. Except as otherwise provided in this letter, any such prior
oral or written promise made to you by Millennial or the Company is hereby terminated, and you agree that by accepting this offer you are consenting to terminate any such oral or written promises made to you by Millennial or the Company and waiving
any applicable notice requirements.
Base Salary: Your semi-monthly base salary will be $18,750, less applicable withholdings, which if calculated
on a yearly basis is $450,000 (“Base Salary”). Your semi-monthly paydays fall on the 15th and the last day of each month. If the 15th or the last day of the month falls on a weekend or bank holiday, the payday is the preceding business
day.
Signing Bonus: You will also receive a one-time signing bonus of $25,000.00, less applicable withholdings. It will be paid the second
pay period following your first day of employment.
2015 Millennial Bonus: You will receive a pro-rated annual incentive payment based upon
the assumption of full achievement of targets set forth in your annual incentive plan with Millennial (for the avoidance of doubt, such amount will be a pro-rated portion of $320,000) through the Closing Date (“Millennial Bonus”). The
Millennial Bonus will be made payable on or before sixty (60) days following the Closing Date.
AOL Annual Bonus Plan: In addition to
your Base Salary, you will be eligible to participate in AOL’s Annual Bonus Plan (“ABP”), pursuant to its terms as determined by the Company from time to time. AOL will review its performance (including any Segment/Brand/Group
performance, if applicable) and your individual performance to determine your eligibility for a bonus under the ABP, if any (“Bonus”). Any Bonus (and its amount, if a Bonus is paid) is fully discretionary. Your target Bonus as a percentage
of your Base Salary is seventy-five (75%) percent. For the current calendar year, your Bonus will be pro-rated as of the Closing Date for the portion of the year you are employed at AOL in an ABP eligible position.
AOL Founder’s Grant: You will be granted a one-time “founder’s grant” with a grant date value of $700,000.00 (rounded down to the
nearest whole unit) (the “Founder’s Grant”). The Founder’s Grant will be in the form of AOL Restricted Stock Units (“RSUs”) and will vest on June 30, 2018, subject to your continued employment with the Company
through the vesting date.
RSUs are valued based on the fair market value of AOL as determined under the terms of the applicable plan, notices and
award agreements under which they are issued. Upon vesting, you are eligible to receive either the cash value of your RSUs based on the most recent valuation of AOL or the stock equivalent of such award.
The Founder’s Grant is subject to corporate approval and will be governed by the plan, agreements and notices under which it is issued, the terms and
conditions of which you hereby agree to accept and which are incorporated herein by reference.
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Equity Grant: Within thirty-one (31) days of your hire date, you will be granted a one-time sign-on
grant with a grant date value of $600,000 (rounded down to the nearest whole unit) (the “Sign-On Grant”). The Sign-On Grant will be in the form of RSUs and will vest over a 3-year period, with one-third (1/3) vesting on each of the
first, second and third anniversaries of the grant date, subject to your continued employment through the applicable vesting date. The Sign-On Grant is subject to corporate approval and will be governed by the plan, agreements and notices under
which it is issued, the terms and conditions of which you hereby agree to accept and which are incorporated herein by reference.
Ongoing, you will
be eligible to receive annual equity-based awards in accordance with the Company’s annual equity award cycle with an annual target value of $600,000 subject to your performance and the available equity pool.
All such awards are to be granted upon and subject to corporate approval and are subject to the terms and conditions of the applicable plan, notices and award
agreements.
Health and Welfare Benefits: The Company offers a generous and comprehensive benefits package, including health, disability, and life
insurance. Effective immediately following the Closing Date (the “Eligibility Date”), you and your family members will be eligible to participate in a full range of benefits in accordance with the Company’s current eligibility
requirements. It will be necessary for you to make benefit elections within thirty (30) days of your Eligibility Date with the Company. If you do not make an election within the designated timeframe, you will be automatically enrolled into our
health plan at the default level of benefits coverage with sole responsibility for any associated costs. Employee benefits are subject to change at the sole discretion of the Company.
Vacation Policy: You will accrue vacation at the regular Company vacation accrual rate based on your years of service in accordance with the
Company’s vacation policy. For purposes of determining your rate of accrual, you will receive service credit for your time worked at Millennial.
Key Employment Conditions: This offer is contingent on your submission of satisfactory proof of eligibility to work in the United States. You must
bring documentary proof of your eligibility to work with you on your first day of work.
This offer and your continued employment is contingent
upon the satisfactory results of a background check as determined by the Company in its discretion, which may include confirmation of your Social Security number, verification of prior employment, verification of education, if applicable, and a
criminal records check. If the results of the background check are not satisfactory or if the Company determines that you have falsified or failed to disclose relevant information on your background check application, the Company reserves the right
to withdraw this offer and will terminate your employment.
If you have any claims or actions against Millennial or the Company or are aware of any facts
that would support any claim or action against Millennial or the Company, please immediately
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advise Robin Eletto at reletto@millennialmedia.com. Otherwise, by signing this offer letter, you are acknowledging that you have no such claims or actions and are not aware of any facts
that would support a claim or action against Millennial or the Company. Notwithstanding the foregoing, nothing herein waives or modifies your rights to indemnification under Millennial’s bylaws, director and officer liability or other insurance
or otherwise.
In addition, as a condition of your employment, you must sign and comply with the enclosed Confidentiality and Invention Assignment
Agreement for Sale of Business (“CIA Agreement”). You agree that acceptance of this offer and your start of employment at AOL also constitutes your agreement to the terms of the CIA Agreement.
Further, as a condition of your employment, you will be required to electronically sign AOL’s Standards of Business Conduct within the first thirty
(30) days of your employment and periodically thereafter during your employment as requested by the Company as an affirmation of your agreement to the Company’s code of ethical and appropriate workplace conduct.
Termination: The terms and conditions of any prior Millennial severance you may have been eligible for as detailed in your offer of employment or
employment agreement with Millennial are hereby terminated and replaced by the following.
Your employment with the Company is at-will, meaning
that you or the Company may terminate your employment at any time for any reason not prohibited by law, with or without notice or Cause (as defined below), provided the following conditions are observed and subject to the following consequences.
In the event the Company terminates your employment for Cause (as defined below) or you resign your employment or in the event of your death, you shall
be entitled as of the termination date to no further compensation under this letter, except for your Base Salary through the termination date, any accrued, but unused vacation in accordance with Company policy, reimbursement of any expenses properly
incurred prior to termination, and any benefits that may be payable upon termination under any of the Company’s benefit plans.
In the event the
Company terminates your employment without Cause, you will be entitled to receive the payments and benefits described below, conditioned upon your execution and delivery to the Company of a standard separation agreement, which shall contain, among
other obligations, a valid release of any and all claims against the Company and its related entities and agents:
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An amount equal to twelve (12) months of your Base Salary at the time of termination, less applicable withholdings. This amount will be paid in
twenty-four (24) semi-monthly, substantially equal installments starting on the second payroll period following your termination date (“Original Payment Date”); provided, however, that if your separation agreement is not effective and
irrevocable on the Original Payment Date, the first payment will be made on the second payroll period following the date that it becomes effective and irrevocable and will include any prior installments otherwise payable to
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you beginning on the Original Payment Date. These payments will not be eligible for deferrals to the Company’s 401(k) plan |
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If you are eligible for and timely elect COBRA continuation coverage for your medical, dental and/or vision benefits, the Company will pay the COBRA premium for you and your eligible dependents to continue coverage
under those benefits pursuant to COBRA (based on your elected level of coverage as in effect immediately prior to your termination date) for twelve (12) months beginning the first day of the calendar month following your termination date, or
until such earlier date as you cease to be eligible for COBRA continuation coverage. After such time, provided you remain eligible, you may, at your own expense, continue medical, dental and/or vision benefits for whatever balance of time remains
under COBRA. |
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Subject to the terms of the ABP, if you are terminated between January 1 and March 15 of any calendar year, you will be entitled to a Bonus payment under the ABP for the calendar year ending prior to your
termination (“Prior Year”) equal to the amount that would have otherwise been payable to you based on the actual attainment of performance goals for such year, less applicable tax withholdings, but in no event to exceed 100% of your ABP
target payout; provided that (i) the Company pays a Bonus to eligible employees under the Company’s ABP for the Prior Year, (ii) the Bonus has not already been paid to you at the time of termination of your employment, and
(iii) you were otherwise eligible for such Bonus payment if you had remained employed through the date of payout. This amount will be paid to you in a lump sum on the earlier of the date on which other eligible employees are paid bonuses under
the ABP for the Prior Year provided the separation agreement has become effective and irrevocable by its terms, or the sixtieth (60th) day following your termination of employment. This payment will not be eligible for deferrals to the
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The services of a professional outplacement and counseling firm, as designated by the Company, for twelve (12) months to assist you in securing employment following your separation from employment with the Company.
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In order for you to be entitled to the payments described in this section, your separation agreement must become effective within the time period specified therein and in all events within sixty (60) days following
your termination date. If the 60-day period spans two calendar years, then the payments provided in the first bullet point above will commence on the first regularly scheduled payroll date that occurs in the second calendar year (or such later date
as may be otherwise specified above) and will include any prior installments that would have been paid beginning on the Original Payment Date. |
For purposes of this letter, “Cause” shall be limited to (i) your conviction of, or nolo contendere or guilty plea to, a felony (whether any
right to appeal has been or may be exercised); (ii) your failure or refusal, without proper cause (which proper cause shall include by reason of death or disability as defined below), to perform your duties with the Company, including your
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obligations under this letter, if such failure or refusal remains uncured for fifteen (15) days after written notice to you; (iii) fraud, embezzlement, misappropriation, or reckless or
willful destruction of Company property; (iv) a breach of any statutory or common law duty of loyalty to the Company; (v) your violation of the Confidentiality Agreement, this offer letter or the SBC, if such violation of this offer letter
remains uncured for fifteen (15) days after written notice to you; (vi) your improper conduct substantially prejudicial to the Company’s business; (vii) your failure to reasonably cooperate in any internal or external
investigation involving the Company; or (viii) your indictment for a felony alleging fraud, embezzlement, misappropriation or destruction of Company property, or alleging fraud, embezzlement, or monetary theft with respect to another party.
For purposes of this letter, “Good Reason” shall mean (i) a material diminution of your authority, responsibilities or duties;
provided, however, that the impact of the acquisition of Millennial or the Company and subsequent conversion of Millennial or the Company to a division or unit of the acquiring company will not by itself result in a diminution of your authority,
responsibilities or duties; (ii) a material diminution by the Company in your Base Salary; (iii) the Company’s requiring you to be based anywhere other than Boston, MA; or (iv) a material breach of this offer letter by the
Company; provided, that prior to any termination for Good Reason, you shall first provide the Company with reasonable written notice within sixty (60) days from the initial existence of the Good Reason condition, setting forth the
reasons that you believe exist that give rise to “Good Reason” for resignation, stating that the Company shall have thirty (30) days to cure such “Good Reason”, and if the Company has not remedied the “Good Reason”
condition within thirty (30) days following such notice from you, then you must resign your employment with Company within thirty (30) days of the end of the remedy period or you will forever waive your right to resign for Good Reason for
such condition upon that occurrence, but not future occurrences of the same condition. You acknowledge that this definition has no application other than for purposes of pre-Closing Millennial restricted share unit awards (as converted into the
cash-based awards described above).
Notwithstanding anything to the contrary herein, the Company reserves the right to terminate your employment
on account of your disability (as the term “disability” is defined in the Company’s long-term disability plan, but which definition must also constitute a “disability” for purposes of Section 409A of the Code), and in
such event the Company shall have no further obligation to you or your heirs other than: (i) to pay your Base Salary through the termination date, any accrued unused vacation in accordance with Company policy, reimbursement of any expenses
properly incurred prior to termination, and any benefits payable upon termination under any Company benefit plan, and (ii) provided you are eligible for and timely elect COBRA continuation coverage for your medical, dental and/or vision
benefits, to pay the COBRA premium for you and your eligible dependents to continue coverage under those benefits pursuant to COBRA (based on your elected level of coverage as in effect immediately prior to your termination date) for twelve
(12) months beginning the first day of the calendar month following your termination date, or until such earlier date as you cease to be eligible for COBRA continuation coverage. After such twelve (12) month period, provided you remain
eligible, you may, at your own expense, continue medical, dental and/or vision benefits for whatever balance of time remains under COBRA.
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Noncompetition: You acknowledge that the services to be performed under this offer letter are of a
special, unique, unusual, extraordinary and intellectual character. You further acknowledge that the business of the Company is international in scope, that its products and services are marketed throughout the world, that Company competes in nearly
all of its business activities with other entities that are or could be located in nearly any part of the world and that the nature of your services, position and expertise are such that you are capable of competing with the Company from nearly any
location in the world.
You also agree that, in addition to your obligations under the Confidentiality Agreement, while employed by the Company and
for twelve (12) months following termination of your employment for any reason, you shall not, directly or indirectly, except as a shareholder holding less than a one percent (1%) interest in a corporation whose shares are traded on a
national securities exchange, participate in the ownership, control, or management of, or perform any services for or be employed by (i) Time Inc., Yahoo!, Inc., The Walt Disney Company, including its Maker Studios, Inc. subsidiary, Google,
Inc., including its YouTube subsidiary, Microsoft Corporation, IAC/Interactive Corp., Facebook, Inc., LinkedIn Corporation, Amazon.com, Inc., Pinterest, Inc., Conversant, Inc. and Twitter Inc., or any of their respective subsidiaries, affiliates or
successors, or (ii) without the written consent of the Chief Executive Officer or the General Counsel of the Company, any entity that engages in any line of business that is substantially the same as any line of business which Company engages
in, conducts or, to your knowledge, has definitive plans to engage in or conduct, and has not ceased to engage in or conduct, or any of their respective subsidiaries, affiliates or successors, but only in those geographic areas in which Company is
then engaged, or has definitive plans to engage, in the conduct of such line of business (any such entity identified by this paragraph (ii) is a “Competitive Entity”). Notwithstanding the preceding, in order to be considered a
Competitive Entity, the entity must derive fifty percent (50%) or more of its total annual revenues from substantially similar products and services offered by Company.
You acknowledge that the geographic boundaries, scope of prohibited activities, and time duration of the preceding paragraphs are reasonable in nature and are
no broader than are necessary to maintain the confidential information, trade secrets and the goodwill of Company and to protect the other legitimate business interests of Company and are not unduly restrictive on you.
You and the Company agree and intend that the covenants contained in this offer letter, including but not limited to the covenants set forth in this section,
shall be deemed to be a series of separate covenants and agreements, one for each and every county or political subdivision of each applicable state of the United States and each country of the world. It is the desire and intent of the parties
hereto that the provisions of this offer letter be enforced to the fullest extent permissible under the governing laws and public policies of the State of New York, and to the extent applicable, each jurisdiction in which enforcement is sought.
Accordingly, if any provision in this offer letter or deemed to be included in this offer letter shall be adjudicated to be invalid or unenforceable, such provision, without any action on the part of the parties hereto, shall be deemed amended to
delete or to modify (including, without
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limitation, a reduction in duration, geographical area or prohibited business activities) the portion adjudicated to be invalid or unenforceable, such deletion or modification to apply only with
respect to the operation of such provision in the particular jurisdiction in which such adjudication is made, and such deletion or modification to be made only to the extent necessary to cause the provision as amended to be valid and enforceable.
Cooperation: During and after your employment, you agree to assist the Company, upon its reasonable request, in connection with any litigation,
investigation, or other matter involving the Company or its directors, officers, employees, shareholders, agents, representatives, clients or vendors. You agree that such assistance may include, but is not limited to, meeting with the Company’s
representatives and legal counsel upon request. The Company will reimburse reasonable costs and expenses (including personal attorneys’ fees) incurred by you in connection with such assistance.
Return of Company Property: Upon termination of your employment, or at any other time the Company so requests, you must promptly return to your manager
all the Company property in your possession, including, but not limited to, keys, access cards, computers, pagers and other mobile devices, badges, laptops, phones and the original and all copies of any written, recorded, or computer readable
information about Company practices, procedures, trade secrets, customer lists or marketing associated with the Company’s business, and any other information deemed proprietary or confidential in accordance with Company policies and/or the CIA
agreement.
At-Will Employment: Your employment with the Company is at-will, meaning that you or the Company may terminate the employment at
any time for any reason not prohibited by law, with or without cause or notice. Nothing in this offer is intended to create a contract for employment or guarantee of continued employment with the Company. This at-will employment relationship cannot
be modified except by an express written agreement signed by you and an authorized officer of the Company.
Governing Law and Jurisdiction:
This offer letter, including the CIA Agreement and any other enclosed documents, will be governed by, construed and enforced in accordance with the laws of the State of New York without regard to the principles of conflicts of law. By accepting this
offer, you irrevocably consent and submit to the personal jurisdiction of the Supreme Court of the State of New York, in New York, New York, and the United States District Court for the Southern District of New York, which you agree shall be the
exclusive forum, in connection with any suit, action, arbitration or other proceeding concerning the interpretation of the terms of this offer letter and the enclosed documents, and you waive and agree not to assert any defense of lack of
jurisdiction, that venue is improper, inconvenient forum, or otherwise.
Severability: If any term or clause of this letter should ever be
determined to be unenforceable, you and the Company agree that this will not affect the enforceability of any other term or clause of this letter. Further, if any provision of this letter is deemed overbroad or unreasonable, such provision shall be
enforced to the maximum extent possible under law.
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Section 409A: This letter is intended to be exempt from Section 409A of the Code, which is how
the Company intends to administer and interpret this letter. The Company is not liable for any tax, interest or penalties that may be imposed on you by Section 409A of the Code or any damages for failing to comply with Section 409A of the
Code. To the extent not so exempt, this offer letter (and any definitions in this offer letter) will be construed in a manner that complies with Section 409A of the Code, and incorporates by reference all required definitions and payment
terms.
Section 280G: You and the Company agree that your execution of a non-competition agreement is a material inducement to the
severance payments and benefits provided pursuant to this offer letter, and the Company further agrees such severance payments and benefits are payable on account of such non-competition agreement. Notwithstanding the foregoing, if at any time or
from time to time, it shall be determined by independent tax professionals selected by Company (“Tax Professional”) that any payment or benefit you would receive from the Company or otherwise (“Payment”) is or will be, but for
the provisions of this paragraph, subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (x) the
largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (y) the largest portion, up to and including the total, of the Payment, whichever amount ((x) or (y)), after taking into account
all applicable federal, state and local employment taxes, income taxes, and the Excise Tax, results in your receipt of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a
Reduced Amount will give rise to the greater after tax benefit, the reduction in the Payments will occur in the following order: (a) reduction of cash payments; (b) cancellation of accelerated vesting of equity awards other than stock
options; (c) cancellation of accelerated vesting of stock options; and (d) reduction of other benefits paid to you. Within any such category of payments and benefits (that is, (a), (b), (c) or (d)), a reduction will occur first with
respect to amounts that are not “deferred compensation” within the meaning of Section 409A and then with respect to amounts that are. In the event that acceleration of compensation from your equity awards is to be reduced, such
acceleration of vesting will be canceled, subject to the immediately preceding sentence, in the reverse order of the date of grant.
This letter
and the enclosed documents referenced herein constitute the full terms and conditions of your employment with the Company. It supersedes all prior discussions, letters, agreements, plans, commitments, promises, or understandings or any kind related
thereto, whether oral or written, between you and the Company.
If you agree to accept this offer please sign and date this letter and the enclosed CIA
Agreement so that we can begin making arrangements for your arrival.
We hope that your employment with the Company will prove to be exciting and
beneficial for both you and us. We truly look forward to having you aboard. If you have any questions, please do not hesitate to contact me.
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| Sincerely, |
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| /s/ Terri L. Zandhuis |
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| Terri Zandhuis |
| Chief People Officer |
| AOL Inc. |
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| ACCEPTED: |
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/s/ Ernie Cormier |
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DATE: |
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Aug 6, 2015 |
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Exhibit (d)(8)
Revised August 11, 2015
July 9, 2015
Matthew Gillis
5111 Holly Creek Lane
Clarksville, MD 21029
Dear Matthew:
Today is a good day! In connection with
AOL Inc.’s acquisition of Millennial Media, Inc. (“Millennial”), AOL Inc. (together with its subsidiaries, “AOL” or the “Company”) is pleased to offer you the role of Head of Mobile Platforms reporting to Seth
Demsey, on the terms and conditions set forth in this letter. Please read this letter carefully.
The terms of employment set forth in this letter are
conditioned upon the closing of AOL’s acquisition of Millennial (the “Closing”) and do not become effective until the date of the Closing (the “Closing Date”). In the event the Closing does not occur, this offer will be null
and void and not become effective.
This letter constitutes the full terms and conditions of your employment with the Company and is contingent on you
starting employment with the Company on the Closing Date. This letter supersedes any prior oral or written promises that may have been made to you by Millennial or the Company, including, but not limited to, any offer letter, employment agreement,
severance agreement, bonus plan, commission plan, incentive program, sales program, or any similar arrangement, including any bonus or commission arrangement set forth in your employment agreement or offer letter, contractor agreement, consulting
agreement or other arrangement entered into between you and Millennial; provided that this letter will not supersede, modify or otherwise affect the terms and conditions of the applicable Millennial equity plan and award agreement governing your
equity awards, or the treatment of equity awards contemplated by the Merger Agreement governing AOL’s acquisition of Millennial. Further, the provisions in your equity award agreements with Millennial (including Section 2.3 of your
Millennial employment agreement) that provide for the vesting of Millennial restricted share units upon a change in control, or upon a termination without “Cause” or resignation with “Good Reason” in connection with a change in
control will not be superseded, modified or otherwise affected by the terms of this letter, and will apply with respect to the cash-based awards into which such restricted share unit awards will convert as of the Closing; provided that the
definition of “good reason” used therein shall be superseded by the definition of “Good Reason” set forth in this
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letter. Except as otherwise provided in this letter, any such prior oral or written promise made to you by Millennial or the Company is hereby terminated, and you agree that by accepting this
offer you are consenting to terminate any such oral or written promises made to you by Millennial or the Company and waiving any applicable notice requirements.
Base Salary: Your semi-monthly base salary will be $17,500.00 semi-monthly, less applicable withholdings, which if calculated on a yearly basis is
$420,000.00 (“Base Salary”). Your semi-monthly paydays fall on the 15th and the last day of each month. If the 15th or the last day of the month falls on a weekend or bank holiday, the payday is the preceding business day.
2015 Millennial Bonus: You will receive a pro-rated annual incentive payment at target (as defined in your offer of employment or employment agreement
with Millennial) through the Closing Date (“Millennial Bonus”). The Millennial Bonus will be made payable on or before 60 days following the Closing Date.
AOL Annual Bonus Plan: In addition to your Base Salary, you will be eligible to participate in AOL’s Annual Bonus Plan (“ABP”), pursuant
to its terms as determined by the Company from time to time. AOL will review its performance (including any Segment/Brand/Group performance, if applicable) and your individual performance to determine your eligibility for a bonus under the ABP, if
any (“Bonus”). Any Bonus (and its amount, if a Bonus is paid) is fully discretionary. Your target Bonus as a percentage of your Base Salary is 75 percent. For the current calendar year, your Bonus will be pro-rated as of the Closing Date
for the portion of the year you are employed at AOL in an ABP eligible position.
Health and Welfare Benefits: The Company offers a generous
and comprehensive benefits package, including health, disability, and life insurance. Effective immediately following the Closing Date (the “Eligibility Date”), you and your family members will be eligible to participate in a full range of
benefits in accordance with the Company’s current eligibility requirements. It will be necessary for you to make benefit elections within 30 days of your Eligibility Date with the Company. If you do not make an election within the designated
timeframe, you will be automatically enrolled into our health plan at the default level of benefits coverage with sole responsibility for any associated costs. Employee benefits are subject to change at the sole discretion of the Company.
Vacation Policy: You will accrue vacation at the regular Company vacation accrual rate based on your years of service in accordance with the
Company’s vacation policy. For purposes of determining your rate of accrual, you will receive service credit for your time worked at Millennial.
Key Employment Conditions: This offer is contingent on your submission of satisfactory proof of eligibility to work in the United States. You must
bring documentary proof of your eligibility to work with you on your first day of work.
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This offer and your continued employment is contingent upon the satisfactory results of a background check as
determined by the Company in its discretion, which may include confirmation of your Social Security number, verification of prior employment, verification of education, if applicable, and a criminal records check. If the results of the background
check are not satisfactory or if the Company determines that you have falsified or failed to disclose relevant information on your background check application, the Company reserves the right to withdraw this offer and will terminate your
employment.
If you have any claims or actions against Millennial or the Company or are aware of any facts that would support any claim or action against
Millennial or the Company, please immediately advise Robin Eletto at reletto@millennialmedia.com. Otherwise, by signing this offer letter, you are acknowledging that you have no such claims or actions and are not aware of any facts that would
support a claim or action against Millennial or the Company.
In addition, as a condition of your employment, you must sign and comply with the enclosed
Confidentiality and Invention Assignment Agreement for Sale of Business (“CIA Agreement”). You agree that acceptance of this offer and your start of employment at AOL also constitutes your agreement to the terms of the CIA Agreement.
Further, as a condition of your employment, you will be required to electronically sign AOL’s Standards of Business Conduct within the first 30 days of
your employment and periodically thereafter during your employment as requested by the Company as an affirmation of your agreement to the Company’s code of ethical and appropriate workplace conduct.
Termination: The terms and conditions of any prior Millennial severance you may have been eligible for as detailed in your offer of employment or
employment agreement with Millennial are hereby terminated and replaced by the following.
Your employment with the Company is at-will, meaning
that you or the Company may terminate the employment at any time for any reason not prohibited by law, with or without notice or Cause (as defined below), provided the following conditions are observed and subject to the following consequences.
In the event the Company terminates your employment for Cause or you resign your employment, you shall be entitled as of the termination date to no further
compensation under this letter, except for your base salary through the termination date, any accrued, but unused vacation in accordance with Company policy, reimbursement of any expenses properly incurred prior to termination, and any benefits that
may be payable upon termination under any of the Company’s benefit plans.
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In the event the Company terminates your employment without Cause, you will be entitled to receive the payments
and benefits described below, conditioned upon your execution and delivery to the Company of a standard separation agreement, which shall contain, among other obligations, a valid release of any and all claims against the Company and its related
entities and agents:
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An amount equal to 6 months of your base salary at the time of termination, less applicable withholdings. This amount will be paid in 6 semi-monthly, substantially equal installments starting on the second payroll
period following your termination date (“Original Payment Date”); provided, however, that if your separation agreement is not effective and irrevocable on the Original Payment Date, the first payment will be made on the second payroll
period following the date that it becomes effective and irrevocable and will include any prior installments otherwise payable to you beginning on the Original Payment Date. These payments will not be eligible for deferrals to the Company’s
401(k) plan |
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If you are eligible for and timely elect COBRA continuation coverage for your medical, dental and/or vision benefits, the Company will pay the COBRA premium for you and your eligible dependents to continue coverage
under those benefits pursuant to COBRA (based on your elected level of coverage as in effect immediately prior to your termination date) for 6 months beginning the first day of the calendar month following your termination date, or until such
earlier date as you cease to be eligible for COBRA continuation coverage. After such time, provided you remain eligible, you may, at your own expense, continue medical, dental and/or vision benefits for whatever balance of time remains under COBRA.
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Subject to the terms of the ABP, if you are terminated between January 1 and March 15, you will be entitled to a bonus payment under the ABP for the calendar year ending prior to your termination (“Prior
Year”) equal to the amount that would have otherwise been payable to you based on the actual attainment of performance goals for such year, less applicable tax withholdings, but in no event to exceed 100% of your ABP target payout;
provided that (i) Company pays a Bonus to eligible employees under Company’s ABP for the Prior Year, (ii) the Bonus has not already been paid to you at the time of termination of your employment, and (iii) you were otherwise
eligible for such Bonus payment if you had remained employed through the date of payout. This amount will be paid to you in a lump sum on the earlier of the date on which other eligible employees are paid bonuses under the ABP for the Prior Year
provided the separation agreement has become effective and irrevocable by its terms, or the sixtieth (60th) day following your termination of employment. This payment will not be eligible for deferrals to Company’s 401(k) plan.
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The services of a professional outplacement and counseling firm, as designated by the Company, for 6 months to assist you in securing employment following your separation from employment with the Company.
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In order for you to be entitled to the payments described in this section, your separation agreement must become effective within the time period specified therein and in all events within sixty (60) days following
your termination date. If the 60-day period spans two calendar years, then the payments provided in the first bullet point above will commence on the first regularly scheduled payroll date that occurs in the second calendar year (or such later date
as may be otherwise specified above) and will include any prior installments that would have been paid beginning on the Original Payment Date. |
For purposes of this letter, “Cause” shall be limited to (i) your conviction of, or nolo contendere or guilty plea to, a felony (whether any
right to appeal has been or may be exercised); (ii) your failure or refusal, without proper cause, to perform your duties with the Company, including your obligations under this letter, if such failure or refusal remains uncured for 15
days after written notice to you; (iii) fraud, embezzlement, misappropriation, or reckless or willful destruction of Company property; (iv) breach of any statutory or common law duty of loyalty to the Company; (v) your violation of
the Confidentiality Agreement, this offer letter or the SBC; (vi) your improper conduct substantially prejudicial to the Company’s business; (vii) your failure to cooperate in any internal or external investigation involving the
Company; or (viii) your indictment for a felony alleging fraud, embezzlement, misappropriation or destruction of Company property, or alleging fraud, embezzlement, or monetary theft with respect to another party.
For purposes of this letter, “Good Reason” shall mean (i) a material diminution of your authority, responsibilities or duties; provided,
however, that the impact of the acquisition of Millennial or the Company and subsequent conversion of Millennial or the Company to a division or unit of the acquiring company will not by itself result in a diminution of your authority,
responsibilities or duties; (ii) a material diminution by the Company in your Base Salary; or (iii) a material breach of this offer letter by the Company; provided, that prior to any termination for Good Reason, you shall first
provide the Company with reasonable written notice within sixty (60) days from the initial existence of the Good Reason condition, setting forth the reasons that you believe exist that give rise to “Good Reason” for resignation,
stating that the Company shall have thirty (30) days to cure such “Good Reason”, and if the Company has not remedied the “Good Reason” condition within thirty (30) days following such notice from you, then you must
resign your employment with Company within thirty (30) days of the end of the remedy period or you will forever waive your right to resign for Good Reason for such condition upon that occurrence, but not future occurrences of the same
condition. You acknowledge that this definition has no application other than for purposes of pre-Closing Millennial restricted share unit awards (as converted into the cash-based awards described above).
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Noncompetition: You acknowledge that the services to be performed under this offer letter are of a
special, unique, unusual, extraordinary and intellectual character. You further acknowledge that the business of the Company is international in scope, that its products and services are marketed throughout the world, that Company competes in
nearly all of its business activities with other entities that are or could be located in nearly any part of the world and that the nature of your services, position and expertise are such that you are capable of competing with the Company from
nearly any location in the world.
You also agree that, in addition to your obligations under the Confidentiality Agreement, while employed by the
Company and for six (6) months following termination of your employment for any reason, you shall not, directly or indirectly, except as a shareholder holding less than a one percent (1%) interest in a corporation whose shares are traded
on a national securities exchange, participate in the ownership, control, or management of, or perform any services for or be employed by (i) Time Inc., Yahoo!, Inc., The Walt Disney Company, including its Maker Studios, Inc. subsidiary,
Google, Inc., including its YouTube subsidiary, Microsoft Corporation, IAC/Interactive Corp., Facebook, Inc., Linkedln Corporation, Amazon.com, Inc., Pinterest, Inc., Conversant, Inc. and Twitter Inc., or any of their respective subsidiaries,
affiliates or successors, or (ii) without the written consent of the Chief Executive Officer or the General Counsel of the Company, any entity that engages in any line of business that is substantially the same as any line of business
which Company engages in, conducts or, to your knowledge, has definitive plans to engage in or conduct, and has not ceased to engage in or conduct, or any of their respective subsidiaries, affiliates or successors, but only in those geographic
areas in which Company is then engaged, or has definitive plans to engage, in the conduct of such line of business (any such entity identified by this paragraph (ii) is a “Competitive Entity”). Notwithstanding the preceding, in order
to be considered a Competitive Entity, the entity must derive fifty percent (50%) or more of its total annual revenues from substantially similar products and services offered by Company.
You acknowledge that the geographic boundaries, scope of prohibited activities, and time duration of the preceding paragraphs are reasonable in nature and are
no broader than are necessary to maintain the confidential information, trade secrets and the goodwill of Company and to protect the other legitimate business interests of Company and are not unduly restrictive on you.
You and the Company agree and intend that the covenants contained in this offer letter, including but not limited to the covenants set forth in this section,
shall be deemed to be a series of separate covenants and agreements, one for each and every county or political subdivision of each applicable state of the United States and each country of the world. It is the desire and intent of the parties
hereto that the provisions of this offer letter be enforced to the fullest extent permissible under the
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governing laws and public policies of the State of New York, and to the extent applicable, each jurisdiction in which enforcement is sought. Accordingly, if any provision in this offer letter or
deemed to be included in this offer letter shall be adjudicated to be invalid or unenforceable, such provision, without any action on the part of the parties hereto, shall be deemed amended to delete or to modify (including, without limitation, a
reduction in duration, geographical area or prohibited business activities) the portion adjudicated to be invalid or unenforceable, such deletion or modification to apply only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made, and such deletion or modification to be made only to the extent necessary to cause the provision as amended to be valid and enforceable.
Cooperation: During and after your employment, you agree to assist the Company, upon its reasonable request, in connection with any litigation,
investigation, or other matter involving the Company or its directors, officers, employees, shareholders, agents, representatives, clients or vendors. You agree that such assistance may include, but is not limited to, meeting with the Company’s
representatives and legal counsel upon request.
Return of Company Property: Upon termination of your employment, or at any other time the
Company so requests, you must promptly return to your manager all the Company property in your possession, including, but not limited to, keys, access cards, computers, pagers and other mobile devices, badges, laptops, phones and the original and
all copies of any written, recorded, or computer readable information about Company practices, procedures, trade secrets, customer lists or marketing associated with the Company’s business, and any other information deemed proprietary or
confidential in accordance with Company policies and/or the CIA agreement.
At-Will Employment: Your employment with the Company is at-will,
meaning that you or the Company may terminate the employment at any time for any reason not prohibited by law, with or without cause or notice. Nothing in this offer is intended to create a contract for employment or guarantee of continued
employment with the Company. This at-will employment relationship cannot be modified except by an express written agreement signed by you and an authorized officer of the Company.
Governing Law and Jurisdiction: This offer letter, including the CIA Agreement and any other enclosed documents, will be governed by, construed and
enforced in accordance with the laws of the State of New York without regard to the principles of conflicts of law. By accepting this offer, you irrevocably consent and submit to the personal jurisdiction of the Supreme Court of the State of New
York, in New York, New York, and the United States District Court for the Southern District of New York, which you agree shall be the exclusive forum, in connection with any suit, action, arbitration or other proceeding concerning the interpretation
of the terms of this offer letter and the enclosed documents, and you waive and agree not to assert any defense of lack of jurisdiction, that venue is improper, inconvenient forum, or otherwise.
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Severability: If any term or clause of this letter should ever be determined to be unenforceable, you and
the Company agree that this will not affect the enforceability of any other term or clause of this letter. Further, if any provision of this letter is deemed overbroad or unreasonable, such provision shall be enforced to the maximum extent possible
under law.
Section 409A: This letter is intended to be exempt from Section 409A of the Code, which is how the Company intends to
administer and interpret this letter. The Company is not liable for any tax, interest or penalties that may be imposed on you by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. To the extent not
so exempt, this offer letter (and any definitions in this offer letter) will be construed in a manner that complies with Section 409A of the Code, and incorporates by reference all required definitions and payment terms.
This letter and the enclosed documents referenced herein constitute the full terms and conditions of your employment with the Company. It supersedes all prior
discussions, letters, agreements, plans, commitments, promises, or understandings or any kind related thereto, whether oral or written, between you and the Company.
If you agree to accept this offer please sign and date this letter, the enclosed CIA Agreement and the Non-Competition Agreement so that we can begin making
arrangements for your arrival.
We hope that your employment with the Company will prove to be exciting and beneficial for both you and us. We truly look
forward to having you aboard. If you have any questions, please do not hesitate to contact me.
Sincerely,
/s/ Terri L. Zandhuis
Terri Zandhuis
Chief People Officer
AOL Inc.
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| ACCEPTED: |
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/s/ Matthew Gillis |
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DATE: |
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Aug. 12,
2015 |
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| TO: |
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Matthew Gillis |
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| FROM: |
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Terri Zandhuis |
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| DATE: |
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July 10, 2015 (revised August 11, 2015) |
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Retention Bonus Program |
Today is a good day! You’re eligible to participate in a one-time retention bonus program (“Bonus Program”) with AOL Inc. (together with its
subsidiaries, “AOL” or “the Company”). The details and terms and conditions of the Bonus Program are set forth below.
The Bonus
Program is effective on the day following the date on which AOL Inc.’s acquisition of Millennial Media, Inc. closes (the “Closing Date”) and ends after the payment to you of all Bonus Payments which you are eligible to earn under the
Bonus Program.
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Bonus Periods. The Bonus Program is divided into two (2) Bonus Periods: |
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Bonus Period 1: The Closing Date through the day preceding the first anniversary of the Closing Date. |
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Bonus Period 2: The first anniversary of the Closing Date through the day preceding the second anniversary of the Closing Date. |
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Bonus Amount. Subject to your satisfaction of the Conditions to Payment in Section 2 below, the total bonus amount that you are eligible to earn is $500,000.00, less applicable withholdings, and payable in
two (2) installments (each such installment a “Bonus Payment”): |
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Bonus Period 1 Payment: One-time payment of $250,000.00 |
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Bonus Period 2 Payment: One-time payment of $250,000.00 |
1
To be eligible for and in order to earn a Bonus Payment relating to a particular Bonus Period, you must satisfy
all of the below conditions:
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Employment. You must be a full-time, active employee of AOL throughout the Bonus Period, except: |
If AOL terminates your employment without Cause (as defined below) before the end of the Bonus Period, in exchange for your execution and
delivery of AOL’s standard separation agreement (as provided under Section 3(a) below), you will receive any unpaid Bonus Payments under the Bonus Program.
If AOL terminates your employment for Cause or you resign your employment with the Company before the end of the Bonus Period, you will not be
eligible for a Bonus Payment for such Bonus Period or for any Bonus Periods thereafter.
Cause means: (i) your conviction of, or
nolo contendere or guilty plea to, a felony (whether any right to appeal has been or may be exercised); (ii) your failure or refusal, without proper cause, to perform your duties with the Company, including your obligations under this Bonus
Program, if such failure or refusal remains uncured for 15 days after written notice to you; (iii) fraud, embezzlement, misappropriation, or reckless or willful destruction of Company property; (iv) breach of any statutory or common law
duty of loyalty to the Company; (v) your violation of your Confidentiality, Non-Competition and Proprietary Rights Agreement or Confidentiality and inventions Assignment Agreement (each, a “Confidentiality Agreement”), any
obligations in your offer letter or employment agreement, or the Standards of Business Conduct; (vi) your improper conduct substantially prejudicial to the Company’s business, (vii) your failure to cooperate in any internal or
external investigation involving the Company, or (viii) your indictment for a felony alleging fraud, embezzlement, misappropriation or destruction of Company property, or alleging fraud, embezzlement, or monetary theft with respect to another
party.
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Performance. You must perform your job satisfactorily throughout the Bonus Period. Satisfactory performance is determined by your supervisor and the HR Business Advisor, at their reasonable good faith discretion.
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Confidentiality Agreement/Non-Disparagement. You agree that you will comply with your Confidentiality Agreement, the Standards of Business Conduct and all other obligations and Company policies throughout the
Bonus Period. In addition, you agree not to make any disparaging or untruthful remarks or statements about the Company, its operations or its officers, directors, employees or agents. This provision does not limit your right and ability voluntarily
to file a charge with or participate in any investigation by any government agency, or to testify truthfully in any legal proceeding. |
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Payment Date and Withholding. Any Bonus Payment for which you are eligible under the Bonus Program will be paid, less applicable withholdings, on the second regularly-scheduled pay date following the completion
of the applicable Bonus Period. |
If AOL terminates your employment without Cause prior to the end of a Bonus Period, AOL will
pay any unpaid Bonus Payments, less applicable withholdings, in a lump sum within thirty (30) days of its receipt of your executed, effective, and irrevocable separation agreement and in all events not later than March 15 of the year
following your termination date. However, your separation agreement must become effective and irrevocable in accordance with its terms and in all events within sixty (60) days of your termination date in order for you to receive this payment.
Any Bonus Payments payable to you as a result of your termination without Cause will not be eligible for deferrals to the Company’s 401(k) plan.
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Section 409A. This Bonus Program is intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), which is how the Company intends to administer and
interpret the Bonus Program. The Company is not liable for any tax, interest or penalties that may be imposed on you by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. In this Bonus Program, a
“termination” or a “termination of employment” means a “separation from service” under Section 409A of the Code and its regulations. |
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At-Will Employment; Other. All other terms and conditions of your employment with AOL remain in effect. Your employment with AOL remains at-will, unless otherwise provided in a separate writing signed by an
authorized officer of the Company. Nothing in this Bonus Program is intended to create a contract for employment or guarantee of continued employment with the Company for any period of time. |
If you’d like to participate in the Bonus Program, sign and return.
Go AOL!
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| ACCEPTED: |
|
/s/ Matthew Gillis |
|
|
|
DATE: |
|
Aug. 12,
2015 |
3
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