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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Medallia Inc | NYSE:MDLA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 33.99 | 0 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-2
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MEDALLIA, INC.
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(Name of Registrant as Specified In Its Charter)
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N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Common stock, par value $0.001 per share, of Medallia, Inc. (“common stock”)
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(2)
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Aggregate number of securities to which transaction applies:
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As of August 20, 2021, there were issued and outstanding: (1) 160,956,790 shares of common stock; (2) equity-based awards representing the right to receive up to 8,754,867 shares of common stock; and (3) options to acquire 20,949,726 shares of common stock.
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
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(Set forth the amount on which the filing fee is calculated and state how it was determined):
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The maximum aggregate value was determined based upon the sum of: (1) 160,956,790 shares of common stock multiplied by $34.00 per share; (2) equity-based awards representing the right to receive up to 8,754,867 shares of common stock (with any performance-based equity calculated at the levels of achievement assumed in the merger agreement) multiplied by $34.00 per share; and (3) options to acquire 20,949,726 shares of common stock with an exercise price per share below $34.00 multiplied by $27.93 per share (the difference between $34.00 and the weighted average exercise price of $6.07 per share). In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the sum calculated in the preceding sentence by $0.0001091.
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(4)
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Proposed maximum aggregate value of transaction:
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$6,355,322,185
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(5)
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Total fee paid:
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$693,366
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Very truly yours,
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Leslie Stretch
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President and Chief Executive Officer
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By Order of the Board of Directors,
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Hanna Steinbach
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Executive Vice President, Chief Legal Officer
and Secretary
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Dated: [•], 2021
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San Francisco, CA
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Proposal 1: Approval of the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the shares of our common stock outstanding as of the record date.
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Proposal 2: Approval of the proposal to approve the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger requires the affirmative vote of a majority of the voting power of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal. This vote will be on a non-binding, advisory basis.
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Proposal 3: Approval of the proposal to adjourn the special meeting to a later date or dates to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting requires the affirmative vote of a majority of the voting power of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal.
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by proxy, by returning a signed and dated proxy card (a prepaid reply envelope is provided for your convenience);
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by proxy, by granting a proxy electronically over the internet or by telephone (using the instructions found on the proxy card); or
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by attending the special meeting and voting at the special meeting using the control number on the enclosed proxy card.
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Restricted stock units (including performance-based restricted stock units) (which we refer to as “Medallia equity-based awards”) that are vested as of the effective time of the merger (which we refer to as “vested Medallia equity-based awards”) will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the per share price and (2) the total number of shares of our common stock then-subject to such Medallia equity-based award. This amount (less any required withholding and other taxes) will be paid to the applicable holder promptly following the effective time of the merger.
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Medallia equity-based awards that are unvested as of the effective time of the merger (which we refer to as “unvested Medallia equity-based awards”) will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the per share price and (2) the total number of shares of our common stock then-subject to such unvested Medallia equity-based award. Subject to the holder’s continued service with Parent and its representatives through the applicable vesting dates, these unvested cash amounts will vest and be payable (less any required withholding and other taxes) pursuant to the corresponding unvested Medallia equity-based award’s vesting schedule. For unvested Medallia equity-based awards that are subject to performance-based vesting conditions that remain unsatisfied as of the effective time of the merger, the performance metrics of such awards will be deemed achieved at a specified level of achievement, and the corresponding cash amount will vest and be paid out in lump sum at the end of the original award’s performance period, subject to the holder’s continued service.
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Stock options (which we refer to as “Medallia options”) that are vested as of the effective time of the merger (which we refer to as “vested Medallia options”) will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the excess, if any, of the per share price less the exercise price per share of such option, and (2) the number of shares of our common stock then issuable upon exercise in full of such vested Medallia option. This amount (less any required withholding and other taxes) will be paid to the applicable holder promptly following the effective time of the merger.
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Stock options that are unvested as of the effective time of the merger (which we refer to as “unvested Medallia options”) will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the excess, if any, of the per share price less the exercise price per share of such option, and (2) the number of shares of our common stock then issuable upon exercise in full of such unvested Medallia option. Subject to the holder’s continued service with Parent and its representatives through the applicable vesting dates, these unvested cash amounts will vest and be payable (less any required withholding and other taxes) pursuant to the corresponding unvested Medallia option’s vesting schedule.
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From and after the date of the merger agreement, (1) no further offering period or purchase period will commence pursuant to our Amended and Restated Employee Stock Purchase Plan (which we refer to as the “ESPP”); and (2) no participant may increase his or her rate of payroll deductions under the ESPP.
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Any offering period or purchase period under the ESPP that otherwise would be in progress as of the effective time of the merger will be terminated no later than one business day prior to the date on which the effective time of the merger occurs.
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No later than one business day prior to the effective time of the merger, we will apply any funds within each ESPP participant’s account to the purchase of whole shares of our common stock in accordance with the terms of the ESPP. These shares will be deposited into the applicable participant’s account and will treated in the same manner as any other outstanding share of common stock in connection with the consummation of the merger. Any amounts not used for the purchase of shares of our common stock will be refunded.
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maintain for the benefit of continuing employees the Medallia benefit plans (other than the opportunity to participate in equity-based incentive compensation, defined benefit pension, retiree or post-employment welfare or nonqualified deferred compensation (which we refer to as “excluded benefits”)) that are substantially similar in the aggregate to those in effect on the date of the merger agreement;
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provide other compensation and benefits (other than excluded benefits) to each continuing employee that, taken as a whole, are substantially similar in the aggregate to the compensation and benefits (other than the excluded benefits) provided to such continuing employee immediately prior to the effective time (which we refer to as “comparable plans”); or
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provide some combination of Medallia benefit plans and comparable plans such that each continuing employee receives compensation and benefits (other than excluded benefits) that, taken as a whole, are substantially similar in the aggregate to the compensation and benefits (other than excluded benefits) provided to such continuing employee immediately prior to the effective time.
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continuing employees will be allowed to participate immediately in any new compensation or benefit arrangements that replace Medallia benefit plans to the same extent as such continuing employees were eligible under the replaced Medallia benefit plans;
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all waiting periods, pre-existing conditions or similar requirements will be waived to the same extent they were waived under the replaced Medallia benefit plans;
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any eligible expenses paid by a continuing employee and his or her covered dependents under a Medallia benefit plan will be given credit with respect to any new benefit arrangement that replaces the applicable Medallia benefit plan for purposes of satisfying the corresponding deductible, co-payment, coinsurance, offset and maximum out-of-pocket requirements for the applicable plan year;
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continuing employees will be credited for any unused balances in flexible spending accounts; and
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continuing employees will receive credit for any accrued but unused vacation or paid time off as of immediately prior to the effective time of the merger.
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For our executive officers, the treatment of their outstanding awards of restricted stock units and options, and outstanding rights to purchase shares or our common stock under the ESPP, as described in more detail in the section of this proxy statement captioned “The Merger—Interests of Medallia’s Directors and Executive Officers in the Merger—Treatment of Equity-Based Awards.”
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For our non-employee directors, the accelerated vesting, at or immediately prior to the effective time of the merger, of Medallia equity-based awards and Medallia options, and the treatment of their Medallia equity-based awards and Medallia options, as described in more detail in the section of this proxy statement captioned “The Merger—Interests of Medallia’s Directors and Executive Officers in the Merger—Treatment of Equity-Based Awards.”
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The entitlement of each of our executive officers to receive payments and benefits pursuant to Medallia’s Change in Control and Severance Policy (which we refer to as the “Severance Policy”) if, during the period beginning three months before our change in control through 12 months after our change in control, Medallia terminates their employment with Medallia for a reason other than “cause,” death or “disability” or they resign for “good reason,” in each case as set forth in the Severance Policy. These payments and benefits include:
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a lump sum payment equal to 12 months’ base salary (18 months for Leslie Stretch, our president and chief executive officer);
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a lump sum equal to a pro-rata target annual bonus for the year of termination plus 100 percent of the executive’s target annual bonus for the year of termination (150 percent for Mr. Stretch);
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payment of COBRA continuation coverage premiums for up to 12 months (18 months for Mr. Stretch), or taxable payments in lieu of such payment; and
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100 percent acceleration of unvested time-based equity awards; and payment of COBRA continuation coverage premiums for up to 12 months (18 months for Mr. Stretch) or taxable payments in lieu of such payments.
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The continued indemnification and insurance coverage for our directors and executive officers from the surviving corporation and Parent under the terms of the merger agreement.
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solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any proposal or inquiry that constitutes, or is reasonably expected to lead to, an acquisition proposal;
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furnish to any person (other than Parent, Merger Sub or any of their respective designees) any non-public information relating to Medallia or any of its subsidiaries or afford to any person (other than Parent, Merger Sub or any of their respective designees) access to the business, properties, assets, books, records or other non-public information, or to any personnel, of Medallia or any of its subsidiaries, in any such case in connection with any acquisition proposal or with the intent to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, an acquisition proposal or the making of any proposal that would reasonably be expected to lead to an acquisition proposal;
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participate, or engage in discussions or negotiations, with any person with respect to an acquisition proposal or with respect to any inquiries from third persons relating to the making of an acquisition proposal;
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approve, endorse or recommend any proposal that constitutes, or is reasonably expected to lead to, an acquisition proposal;
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enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement or other contract relating to an acquisition transaction, other than an acceptable confidentiality agreement (we refer to any of these as an “alternative acquisition agreement”); or
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authorize or commit to do any of the foregoing.
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the adoption of the merger agreement by the requisite affirmative vote of our stockholders;
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the expiration or termination of the waiting periods, if any, applicable to the merger pursuant to the HSR Act and the Austrian Cartel Act; and
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the absence of any temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the merger, any action taken by any governmental authority of competent jurisdiction, and any law enacted, entered, enforced or deemed applicable to the merger, that, in each case, prohibits, makes illegal or enjoins the consummation of the merger.
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the accuracy of the representations and warranties of Medallia in the merger agreement, subject to applicable materiality or other qualifiers, as of the effective time of the merger or the date in respect of which such representation or warranty was specifically made;
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Medallia having performed and complied in all material respects with all covenants and obligations under the merger agreement required to be performed and complied with by it at or prior to the closing;
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receipt by Parent and Merger Sub of a customary closing certificate of Medallia; and
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the absence of any Company Material Adverse Effect (as defined in the section of this proxy statement captioned “The Merger Agreement—Representations and Warranties”) having occurred after the date of the merger agreement that is continuing.
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the accuracy of the representations and warranties of Parent and Merger Sub in the merger agreement, subject to applicable materiality or other qualifiers, as of the effective time of the merger or the date in respect of which such representation or warranty was specifically made;
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Parent and Merger Sub having performed and complied in all material respects with all covenants and obligations under the merger agreement required to be performed and complied by Parent and Merger Sub prior to the effective time of the merger; and
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the receipt by Medallia of a customary closing certificate of Parent and Merger Sub.
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by mutual written agreement of Medallia and Parent;
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by either Medallia or Parent if:
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any permanent injunction or other judgment or order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the merger is in effect, or any action has been taken by any governmental authority of competent jurisdiction, that, in each case, prohibits, makes illegal or enjoins the consummation of the merger and has become final and non-appealable or any law is enacted, entered, enforced or deemed applicable to the merger that prohibits, makes illegal or enjoins the consummation of the merger, except, in each case, that the right to terminate will not be available to any party that has failed to use its reasonable best efforts to resist, appeal, obtain consent pursuant to, resolve or lift, as applicable, such injunction, judgment, order, restraint, prohibition, action or law;
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the merger has not been consummated by 11:59 p.m., Pacific time, on January 21, 2022 (which we refer to as the “termination date”), except that a party may not terminate the merger agreement pursuant to this provision if such party’s action or failure to act constitutes a breach of the merger agreement and has been the primary cause of, or primarily resulted in the failure to satisfy the conditions to the closing of the merger or the failure to consummate the merger by the termination date; or
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our stockholders do not adopt the merger agreement at the special meeting, except that a party may not terminate the merger agreement pursuant to this provision if such party’s action or failure to act constitutes a breach of the merger agreement and causes, or results in, the failure to obtain the approval of our stockholders at the special meeting;
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by Medallia if:
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subject to a 45-day cure period, Parent or Merger Sub has breached or failed to perform in any material respect any of its respective representations, warranties, covenants or other agreements in the merger agreement such that the related closing condition would not be satisfied;
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prior to the adoption of the merger agreement by our stockholders: (1) Medallia has received a superior proposal; (2) the Medallia Board (or a committee thereof) has authorized Medallia to enter into an alternative acquisition agreement to consummate the acquisition transaction contemplated by that superior proposal; (3) concurrently with such termination, Medallia pays the applicable termination fee; and (4) Medallia has complied in all material respects with its covenants under the merger agreement with respect to soliciting such superior proposal; or
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(1) certain of the closing conditions set forth in the merger agreement have been and continue to be satisfied (other than those conditions that by their terms are to be satisfied at the closing, each of which is capable of being satisfied at the closing) or waived; and (2) Parent and Merger Sub fail to consummate the merger as required;
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by Parent if:
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subject to a 45-day cure period, Medallia has breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements in the merger agreement such that the related closing condition would not be satisfied;
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the Medallia Board has withdrawn its recommendation that our stockholders adopt the merger agreement (except that Parent’s right to terminate in such instance will expire at 5:00 p.m., Pacific time, on the 10th business day following the date on which such right to terminate first arose); or
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Medallia has breached or failed to perform in any material respect certain of its commitments related to alternative acquisition proposals.
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by Parent, if the Medallia Board changes its recommendation with respect to the merger;
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by Parent, if Medallia breaches or fails to perform, in accordance with the merger agreement, in any material respects, its obligations under the alternative solicitation provisions in the merger agreement; or
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by Medallia, if the Medallia Board authorizes the acceptance of a superior proposal.
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the merger agreement is terminated (1) because the merger is not completed by the termination date; (2) because of Medallia’s failure to obtain the required approval of our stockholders; or (3) subject to a 45-day cure period, because Medallia breaches or fails to perform in any material respect any of its representations, warranties or covenants in a manner that would cause the related closing conditions to not be satisfied;
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prior to such termination (but after the date of the merger agreement) a proposal, generally speaking, to acquire at least 50 percent of Medallia’s stock or assets is publicly announced or publicly disclosed by a third party and not withdrawn or otherwise abandoned; and
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Medallia subsequently consummates, or enters into a definitive agreement providing for, a transaction involving the acquisition of at least 50 percent of its stock or assets within one year of such termination.
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subject to a 45-day cure period, by Medallia, if Parent or Merger Sub breaches or fails to perform in any material respect any of its representations, warranties or covenants in a manner that would cause the related closing conditions to not be satisfied; or
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by Medallia, if Parent failed to consummate the merger as required pursuant to, and in the circumstances specified in, the merger agreement.
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Why am I receiving these materials?
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On July 26, 2021, we announced that Medallia entered into the merger agreement. Under the merger agreement, Parent will acquire Medallia for $34.00 in cash per share of our common stock. In order to complete the merger, our stockholders representing a majority of all issued and outstanding common stock must vote to adopt the merger agreement at the special meeting. This approval is a condition to the consummation of the merger. See the section of this proxy statement captioned “The Merger Agreement—Conditions to the Closing of the Merger.” The Medallia Board is furnishing this proxy statement and form of proxy card to the holders of shares of our common stock in connection with the solicitation of proxies of our stockholders to be voted at the special meeting.
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What is the proposed merger and what effects will it have on Medallia?
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The proposed merger is the acquisition of Medallia by Parent. If the proposal to adopt the merger agreement is approved by our stockholders and the other closing conditions under the merger agreement are satisfied or waived, Merger Sub will merge with and into Medallia, with Medallia continuing as the surviving corporation. As a result of the merger, Medallia will become a wholly owned subsidiary of Parent, and our common stock will no longer be publicly traded and will be delisted from the NYSE. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC.
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What will I receive if the merger is completed?
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Upon completion of the merger, you will be entitled to receive $34.00 in cash, without interest and less any applicable withholding taxes, for each share of our common stock that you own, unless you have properly exercised, and not validly withdrawn or subsequently lost, your appraisal rights under the DGCL, and certain other conditions under the DGCL are satisfied. For example, if you own 100 shares of our common stock, you will receive $3,400.00 in cash in exchange for your shares of our common stock, without interest and less any applicable withholding taxes.
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How does the per share price compare to the market price of Medallia’s common stock?
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This amount constitutes (1) a premium of approximately 20 percent to the closing price of our common stock on June 10, 2021, which was the last full trading day before public speculation that Medallia was pursuing a sale; and (2) a premium of approximately 29 percent to Medallia’s unaffected 30-day price average.
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What will happen to Medallia equity-based awards and Medallia options?
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Generally speaking, Medallia equity-based awards and Medallia options will be treated as follows:
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Vested Medallia equity-based awards will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the per share price and (2) the total number of shares of our common stock then-subject to such Medallia equity-based award. This amount (less any required withholding and other taxes) will be paid to the applicable holder promptly following the effective time of the merger.
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Unvested Medallia equity-based awards will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the per share price and (2) the total number of shares of our common stock then-subject to such unvested Medallia equity-based award. Subject to the holder’s continued service with Parent and its representatives through the applicable vesting dates, these unvested cash amounts will vest and be payable (less any required withholding and other taxes) pursuant to the corresponding unvested Medallia equity-based award’s vesting schedule. For unvested Medallia equity-based awards that are subject to performance-based vesting conditions that remain unsatisfied as of the effective time of the merger, the performance metrics of such awards will be deemed achieved at a specified level of achievement, and the corresponding cash amount will vest and be paid out in lump sum at the end of the original award’s performance period, subject to the holder’s continued service.
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Vested Medallia options will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the excess, if any, of the per share price less the exercise price per share of such option, and (2) the number of shares of our common stock then issuable upon exercise in full of such vested Medallia option. This amount (less any required withholding and other taxes) will be paid to the applicable holder promptly following the effective time of the merger.
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Unvested Medallia options will be cancelled and converted into a right to receive an amount in cash, without interest, equal to the product of (1) the excess, if any, of the per share price less the exercise price per share of such option, and (2) the number of shares of our common stock then issuable upon exercise in full of such unvested Medallia option. Subject to the holder’s continued service with Parent and its representatives through the applicable vesting dates, these unvested cash amounts will vest and be payable (less any required withholding and other taxes) pursuant to the corresponding unvested Medallia option’s vesting schedule.
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What will happen to the ESPP?
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Generally speaking, the ESPP will be treated as follows:
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From and after the date of the merger agreement, (1) no further offering period or purchase period will commence pursuant to the ESPP; and (2) no participant may increase his or her rate of payroll deductions under the ESPP.
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Any offering period or purchase period under the ESPP that otherwise would be in progress as of the effective time of the merger will be terminated no later than one business day prior to the date on which the effective time of the merger occurs.
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No later than one business day prior to the effective time of the merger, we will apply any funds within each ESPP participant’s account to the purchase of whole shares of our common stock in accordance with the terms of the ESPP. These shares will be deposited into the applicable participant’s account and will treated in the same manner as any other outstanding share of common stock in connection with the consummation of the merger. Any amounts not used for the purchase of shares of our common stock will be refunded.
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What am I being asked to vote on at the special meeting?
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You are being asked to vote on the following proposals:
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to adopt the merger agreement pursuant to which Merger Sub will merge with and into Medallia and Medallia will become a wholly owned subsidiary of Parent;
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to approve, on a non-binding, advisory basis, the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger; and
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to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.
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When and where is the special meeting?
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The special meeting will take place on [•], [•], 2021, at [•] a.m., Pacific time. You may attend the special meeting via a live interactive webcast on the internet at http://www.virtualshareholdermeeting.com/MDLA2021SM. You will be able to listen to the special meeting live and vote online. You will need the control number found on your proxy card or voting instruction form in order to participate in the special meeting (including voting your shares).
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Who is entitled to vote at the special meeting?
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All of our stockholders as of the close of business on [•], 2021, which is the record date for the special meeting, are entitled to vote their shares of our common stock at the special meeting. As of the close of business on the record date, there were [•] shares of our common stock outstanding and entitled to vote at the special meeting. Each share of our common stock outstanding as of the record date is entitled to one vote per share on each matter properly brought before the special meeting.
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What vote is required to approve the proposal to adopt the merger agreement?
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The affirmative vote of the holders of a majority of the shares of our common stock outstanding as of the record date is required to adopt the merger agreement.
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What vote is required to approve (1) the proposal to approve, on a non-binding, advisory basis, the compensation that will or may become payable by Medallia to its named executive officers in connection with the merger; and (2) the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting?
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Approval of the proposal to approve, on a non-binding, advisory basis, the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger requires the affirmative vote of a majority of the voting power of the shares of our common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal.
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What do I need to do now?
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We encourage you to read this proxy statement, the annexes to this proxy statement and the documents that we refer to in this proxy statement carefully and consider how the merger affects you. Then, even if you
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How does the Medallia Board recommend that I vote?
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The Medallia Board unanimously recommends that you vote: (1) “FOR” the adoption of the merger agreement; (2) “FOR” the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger; and (3) “FOR” the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.
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What happens if the merger is not completed?
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If the merger agreement is not adopted by our stockholders or if the merger is not completed for any other reason, our stockholders will not receive any payment for their shares of our common stock. Instead: (1) Medallia will remain an independent public company; (2) our common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act; and (3) we will continue to file periodic reports with the SEC.
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What is the compensation that will or may become payable by Medallia to its named executive officers in connection with the merger?
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The compensation that will or may become payable by Medallia to our named executive officers in connection with the merger is certain compensation that is tied to or based on the merger and payable to certain of Medallia’s named executive officers pursuant to underlying plans and arrangements that are contractual in nature. Compensation that will or may become payable by Parent or its affiliates (including, following the consummation of the merger, the surviving corporation) to our named executive officers in connection with or following the merger is not subject to this advisory vote. For further information, see the section of this proxy statement captioned “Proposal 2: Approval, on a Non-Binding, Advisory Basis, of Certain Merger-Related Executive Compensation.”
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Why am I being asked to cast a vote to approve the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger?
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Medallia is required to seek approval, on a non-binding, advisory basis, of compensation that will or may become payable by Medallia to our named executive officers in connection with the merger. Approval of the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger is not required to consummate the merger.
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What will happen if Medallia’s stockholders do not approve the compensation that will or may become payable by Medallia to its named executive officers in connection with the merger?
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Approval of the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger is not a condition to consummation of the merger. This is an advisory vote and will not be binding on Medallia or Parent. The underlying plans and arrangements providing for such compensation are contractual in nature and are not, by their terms, subject to stockholder approval.
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What is the difference between holding shares as a stockholder of record and as a beneficial owner?
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If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are considered, with respect to those shares, to be the “stockholder of record.” If you are a stockholder of record, this proxy statement and your proxy card have been sent directly to you by or on behalf of Medallia. As a stockholder of record, you may attend the special meeting and vote your shares at the special meeting using the control number on the enclosed proxy card.
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If my broker holds my shares in “street name,” will my broker vote my shares for me?
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No. Your bank, broker or other nominee is permitted to vote your shares on any proposal currently scheduled to be considered at the special meeting only if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee to vote your shares. Without instruction, your shares will not be counted for the purpose of obtaining a quorum or voted on the proposals, which will have the same effect as if you voted “AGAINST” adoption of the merger agreement, but will have no effect on the proposal to approve, on a non-binding, advisory basis, the compensation that will or may become payable by Medallia to our named executive officers in connection with the merger or the adjournment proposal, except to the extent affecting the obtaining of a quorum at the meeting.
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How may I vote?
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If you are a stockholder of record (that is, if your shares of our common stock are registered in your name with American Stock Transfer & Trust Company, LLC, our transfer agent), there are four ways to vote:
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by signing, dating and returning the enclosed proxy card (a prepaid reply envelope is provided for your convenience);
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by visiting the internet address on your proxy card;
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by calling the toll-free (within the U.S. or Canada) phone number on your proxy card; or
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by attending the special meeting and voting at the special meeting using the control number on the enclosed proxy card.
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May I attend the special meeting and vote at the special meeting?
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Yes. You may attend the special meeting via a live interactive webcast on the internet at http://www.virtualshareholdermeeting.com/MDLA2021SM. You will be able to listen to the special meeting live and vote online. The special meeting will begin at [•] a.m., Pacific time. Online check-in will begin a few minutes prior to the special meeting. You will need the control number found on your proxy card or voting instruction form in order to participate in the special meeting (including voting your shares). As the special meeting is virtual, there will be no physical meeting location.
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Why did Medallia choose to hold a virtual special meeting?
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The Medallia Board decided to hold the special meeting virtually in response to public health concerns over large gatherings of people and in order to help limit potential transmission of COVID-19. Furthermore, our experience with virtual meetings demonstrated that the goals of accessibility and stockholder participation can be well served by the virtual format.
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What is a proxy?
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A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of our common stock. The written document describing the matters to be considered and voted on at the special meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of our common stock is called a “proxy card.” You may follow the instructions on the proxy card to designate a proxy by telephone or by the Internet in the same manner as if you had signed, dated and returned a proxy card. Leslie Stretch and Roxanne Oulman, each with full powers of substitution and resubstitution, are the proxy holders for the special meeting.
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May I change my vote after I have mailed my signed and dated proxy card?
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Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the special meeting by:
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signing another proxy card with a later date and returning it to us prior to the special meeting;
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submitting a new proxy electronically over the internet or by telephone after the date of the earlier submitted proxy;
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delivering a written notice of revocation to our Corporate Secretary; or
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attending the special meeting and voting at the special meeting using the control number on the enclosed proxy card.
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If a stockholder gives a proxy, how are the shares voted?
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Regardless of the method you choose to grant your proxy, the individuals named on the enclosed proxy card will vote your shares in the way that you direct.
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Should I send in my stock certificates now?
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No. After the merger is completed, any holders of physical stock certificates will receive a letter of transmittal containing instructions for how to send your stock certificates to the payment agent in order to receive the appropriate cash payment for the shares of our common stock represented by your stock certificates. Unless you are seeking appraisal, you should use the letter of transmittal to exchange your stock certificates for the cash payment to which you are entitled. Please do not send your stock certificates with your proxy card. If you hold your shares of our common stock in book-entry form, you will not receive a letter of transmittal. Instead the payment agent will pay you the appropriate portion of the merger consideration upon receipt of a customary “agent’s message” and any other items specified by the payment agent.
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What happens if I sell or transfer my shares of common stock after the record date but before the special meeting?
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The record date for the special meeting is earlier than the date of the special meeting and the expected effective date of the merger. If you sell or transfer your shares of our common stock after the record date but before the special meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or transfer your shares and each of you notifies Medallia in writing of such special arrangements, you will transfer the right to receive the per share price with respect to such shares, if the merger is completed, to the person to whom you sell or transfer your shares, but you will retain your right to vote those shares at the special meeting. Even if you sell or transfer your shares of our common stock after the record date, we encourage you to sign, date and return the enclosed proxy card (a prepaid reply envelope is provided for your convenience) or grant your proxy electronically over the internet or by telephone (using the instructions found on the proxy card).
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What should I do if I receive more than one set of voting materials?
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Please sign, date and return (or grant your proxy electronically over the internet or by telephone for) each proxy card and voting instruction form that you receive to ensure that all of your shares are voted.
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Where can I find the voting results of the special meeting?
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If available, Medallia may announce preliminary voting results at the conclusion of the special meeting. Medallia intends to publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the special meeting. All reports that Medallia files with the SEC are publicly available when filed. See the section of this proxy statement captioned “Where You Can Find More Information.”
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Will I be subject to U.S. federal income tax upon the exchange of common stock for cash pursuant to the merger?
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If you are a U.S. Holder, the exchange of our common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes, which generally will require a U.S. Holder to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received by such U.S. Holder in the merger and such U.S. Holder’s adjusted tax basis in the shares of our common stock surrendered in the merger.
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When do you expect the merger to be completed?
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We currently expect to complete the merger in 2021. However, the exact timing of completion of the merger, if at all, cannot be predicted because the merger is subject to the closing conditions specified in the merger agreement, many of which are outside of our control.
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What governmental and regulatory approvals are required?
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Under the terms of the merger agreement, the merger cannot be completed until the waiting period applicable to the merger under the HSR Act has expired or been terminated. Additionally, under the terms of the merger agreement, the merger cannot be completed until affirmative approval or clearance required under the Austrian Cartel Act has been obtained.
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Am I entitled to appraisal rights under the DGCL?
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If the merger is consummated, our stockholders who (1) do not vote in favor of the adoption of the merger agreement; (2) continuously hold their shares of our common stock through the effective time of the merger; (3) properly perfect appraisal of their shares; (4) meet certain other conditions and statutory requirements as described in this proxy statement; and (5) do not withdraw their demands or otherwise lose their rights to appraisal, will be entitled to seek appraisal of their shares in connection with the merger under Section 262 of the DGCL. This means that such stockholders will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with (unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown) interest on the amount determined by the Delaware Court of Chancery to be fair value from the effective date of the
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Do any of Medallia’s directors or officers have interests in the merger that may differ from those of Medallia stockholders generally?
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Yes. In considering the recommendation of the Medallia Board with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of our stockholders generally. In: (1) evaluating and negotiating the merger agreement; (2) approving the merger agreement and the merger; and (3) unanimously recommending that the merger agreement be adopted by our stockholders, the Medallia Board was aware of and considered these interests to the extent that they existed at the time, among other matters. For more information, see the section of this proxy statement captioned “The Merger—Interests of Medallia’s Directors and Executive Officers in the Merger.”
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Who can help answer my questions?
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If you have any questions concerning the merger, the special meeting or this proxy statement, would like additional copies of the accompanying proxy statement or need help submitting your proxy or voting your shares of our common stock, please contact our proxy solicitor:
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the inability to complete the merger due to the failure of our stockholders to adopt the merger agreement or the failure to satisfy the other conditions to the completion of the merger, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval;
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the risk that the merger agreement may be terminated in circumstances that require us to pay a termination fee;
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the outcome of any legal proceedings that may be instituted against us and others related to the merger agreement;
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risks that the merger affects our current operations or our ability to retain or recruit employees;
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the fact that receipt of the all-cash per share price will be taxable to our stockholders that are treated as U.S. Holders for U.S. federal income tax purposes;
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the fact that, if the merger is completed, our stockholders will forgo the opportunity to realize the potential long-term value of the successful execution of Medallia’s current strategy as an independent company;
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the possibility that Medallia could, at a later date, engage in unspecified transactions, including restructuring efforts, special dividends or the sale of some or all of Medallia’s assets to one or more as yet unknown purchasers, that could conceivably produce a higher aggregate value than that available to our stockholders in the merger;
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the fact that under the terms of the merger agreement, Medallia is restrained at certain times from soliciting other acquisition proposals during the pendency of the merger;
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the effect of the announcement or pendency of the merger on our business relationships, customers, operating results and business generally, including risks related to the diversion of the attention of Medallia management or employees during the pendency of the merger;
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the amount of the costs, fees, expenses and charges related to the merger agreement or the merger;
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the risk that the proposed merger will not be consummated in a timely manner, exceeding the expected costs of the merger;
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the risk that our stock price may fluctuate during the pendency of the merger and may decline significantly if the merger is not completed; and
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risks related to obtaining the requisite stockholder approval to the merger.
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signing another proxy card with a later date and returning it to us prior to the special meeting;
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submitting a new proxy electronically over the internet or by telephone after the date of the earlier submitted proxy;
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delivering a written notice of revocation to our Corporate Secretary; or
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attending the special meeting and voting at the special meeting using the control number on the enclosed proxy card.
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each share of our common stock that is (1) held by Medallia as treasury stock; (2) owned by Parent or Merger Sub; or (3) owned by any direct or indirect wholly owned subsidiary of Parent or Merger Sub as of immediately prior to the effective time of the merger will be cancelled and extinguished without any conversion thereof or consideration paid therefor;
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each share of our common stock that is issued and outstanding as of immediately prior to the effective time of the merger (other than the shares identified in the prior bullet and shares of our common stock held by our stockholders who have (1) neither voted in favor of the adoption of the merger agreement nor consented thereto in writing; and (2) properly and validly exercised their statutory rights of appraisal in respect of such shares in accordance with the DGCL) will be cancelled and extinguished and automatically converted into the right to receive cash in an amount equal to the per share price; and
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each certificate formerly representing any shares of our common stock or any book-entry shares that represented shares of our common stock immediately prior to the effective time of the merger will automatically be cancelled and retired and all such shares will cease to exist and will thereafter only represent the right to receive the per share price.
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Financial Condition, Results of Operations and Prospects of Medallia; Risks of Execution. The current, historical and projected financial condition, results of operations and business of Medallia, as well as Medallia’s prospects and risks if it were to remain an independent company. In particular, the Medallia Board considered Medallia’s current business plan and long-term operating plan (as reflected in the Projected Financial Information). The Medallia Board considered these plans and the potential opportunities that they presented against, among other things: (1) the risks and uncertainties associated with achieving and executing Medallia’s current business plan and long-term operating plan in the short and long term; (2) the impact of market, customer and competitive trends on Medallia; and (3) the general risks related to market conditions that could reduce the price of our common stock. Among the potential risks identified by the Medallia Board were:
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Medallia’s competitive positioning and prospects as an independent company. Included among these risks were consideration of (1) Medallia’s size, as well as its financial resources, relative to those of its competitors; (2) new and evolving competitive threats; and (3) the substantial risks to achieving Medallia’s long-term operating plan. The Medallia Board was also aware that adoption of Medallia’s product offerings is subject to competing strategic and financial priorities among its existing and potential customers; as a result, existing customers may determine to reduce or eliminate their use of Medallia’s product offerings, and potential customers may determine not to adopt them at all, any of which could impact Medallia’s operating results.
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Medallia’s historical customer churn rate and the impact that this has had, and could continue to have, on Medallia’s ability to achieve stable and consistent operating results.
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The historical quarter-over-quarter fluctuations in Medallia’s bookings and the impact that these fluctuations have had, and could continue to have, on Medallia’s stock price.
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The continued business and economic uncertainty related to the COVID-19 pandemic and the possibility that business conditions—for Medallia and the larger economy—will not improve and could get worse. In this regard, the Medallia Board was aware that some of Medallia’s customers are associated with the hospitality industry, which has been particularly impacted by the COVID-19 pandemic. Decreased demand for hospitality services—whether due to “stay-at-home” orders or an unwillingness of people to travel—could have significant and prolonged effects on demand for Medallia’s products by these customers.
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The challenges of making investments to achieve long-term growth prospects for a publicly traded company, which is subject to scrutiny based on its quarter-over-quarter performance. The Medallia Board was aware that the price of our common stock could be negatively impacted if Medallia failed to meet investor expectations, including if Medallia failed to meet its growth objectives.
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The historical execution of Medallia’s business plan by Medallia management and their ability to continue to drive Medallia’s business. In this regard, the Medallia Board was aware of instances in which Medallia failed to achieve certain expectations of Medallia’s financial and operational performance, and of the impact that these failures had on the price of our common stock.
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Results of Strategic Review Process. The merger was the result of an extensive strategic review process overseen by the Strategic Committee. The Medallia Board considered that, at Medallia’s direction, Morgan Stanley affirmatively contacted four potential strategic acquirers and five financial acquirers (including Thoma Bravo) concerning their interest in an acquisition of Medallia. The Medallia Board considered the nature of the engagement by each of these potential acquirers over a multiple week period and that, of these potential acquirers, only Thoma Bravo made a proposal for an acquisition of Medallia that was capable of being accepted. The Medallia Board also was aware of the public speculation since early June 2021 that Medallia was pursuing a sale and noted that, following such speculation, two additional financial acquirers (and no strategic acquirers) contacted Medallia about pursuing an acquisition. Neither of these financial acquirers engaged in substantive discussions regarding an acquisition or made a proposal that was capable of being accepted.
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Certainty of Value. The consideration to be received by our stockholders in the merger consists entirely of cash, which provides certainty of value measured against the ongoing business and financial execution risks of Medallia’s long-term operating plan. The receipt of cash consideration eliminates uncertainty and risk for our stockholders related to the continued execution of Medallia’s business. In that regard, the Medallia Board noted that Medallia’s stock price could be negatively impacted if we failed to meet investor expectations.
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Best Value Reasonably Obtainable. The belief of the Medallia Board that the per share merger consideration represents the best value reasonably obtainable for the shares of our common stock, taking into account the Medallia Board’s familiarity with the business, operations, prospects, business strategy, assets, liabilities and general financial condition of Medallia on a historical and prospective basis. In addition, the Medallia Board believed that, measured against the longer-term execution risks described above, the per share merger consideration reflects a fair and favorable price for the shares of our common stock. The Medallia Board also considered that the per share merger consideration constitutes (1) a premium of approximately 20 percent to the closing price of our common stock on June 10, 2021, which was the last full trading day before public speculation that Medallia was pursuing a sale; and (2) a premium of approximately 29 percent to Medallia’s unaffected 30-day price average.
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Permitted Solicitation of Alternative Acquisition Proposals. The merger agreement permits Medallia and its representatives, at the direction of the Medallia Board, from the date of the merger agreement until the no-shop period start date, to (1) initiate, solicit, propose, induce or encourage any alternative acquisition proposals from third parties; (2) provide nonpublic information to third parties; and (3) participate in discussions and negotiations with third parties regarding alternative acquisition proposals.
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Potential Strategic Alternatives. The assessment of the Medallia Board that none of the possible alternatives to the merger (including the possibility of continuing to operate Medallia as an independent company or pursuing a different transaction, and the desirability and perceived risks of those alternatives, as well as the potential benefits and risks to Medallia’s stockholders of those alternatives and the timing and likelihood of effecting such alternatives) was reasonably likely to present superior opportunities for us to create greater value for our stockholders, taking into account execution risks as well as business, competitive, financial, industry, legal, market and regulatory risks.
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Fairness Opinion of Morgan Stanley. The oral opinion of Morgan Stanley rendered to the Medallia Board, subsequently confirmed in writing, that, as of July 25, 2021, and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of the review undertaken by Morgan Stanley as set forth in the written opinion, the per share price to be received by our stockholders (other than the holders of the excluded shares) pursuant to the merger agreement was fair from a financial point of view to such stockholders. The opinion is more fully described in the section of this proxy statement captioned “—Opinion of Morgan Stanley & Co. LLC” and the full text of the opinion is attached as Annex C to this proxy statement.
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Negotiations with Parent and Terms of the Merger Agreement. The terms of the merger agreement, which was the product of arms’-length negotiations, and the belief of the Medallia Board that the merger agreement contained terms that provided Medallia with a high level of closing certainty. The factors considered included:
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Medallia’s ability to affirmatively solicit alternative transactions for a period of time.
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Medallia’s ability, under certain circumstances, to furnish information to, and conduct negotiations with, third parties regarding acquisition proposals.
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The Medallia Board’s belief that the terms of the merger agreement would be unlikely to deter third parties from making a superior proposal.
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The Medallia Board’s ability, under certain circumstances, to withdraw or modify its recommendation that our stockholders vote in favor of the adoption of the merger agreement.
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The Medallia Board’s ability, under certain circumstances, to terminate the merger agreement to enter into an alternative acquisition agreement. In that regard, the Medallia Board believed that the termination fee payable by Medallia in such instance was reasonable, consistent with or below similar fees payable in comparable transactions, and not preclusive of other offers.
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The limited conditions to Parent’s obligation to consummate the merger, making the merger reasonably likely to be consummated.
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The reverse termination fee of $382,220,000 payable by Parent in certain circumstances and the other remedies available to Medallia under the merger agreement. The Medallia Board also considered the terms of the limited guaranty, which guarantees payment of the reverse termination fee.
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The consummation of the merger not being subject to a financing condition.
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Business Reputation of Thoma Bravo. The business reputation and financial resources of Thoma Bravo. The Medallia Board believed that these factors supported the conclusion that a transaction with Parent (which is owned by Thoma Bravo) could be completed quickly and in an orderly manner, and had a substantial likelihood of being consummated successfully.
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Appraisal Rights. The appraisal rights in connection with the merger available to our stockholders who timely and properly exercise such appraisal rights under the DGCL if certain conditions are met.
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No Stockholder Participation in Future Growth or Earnings. The nature of the merger as a cash transaction means that our stockholders will not participate in Medallia’s future earnings or growth and will not benefit from any appreciation in value of the surviving corporation. The Medallia Board also considered the other potential alternative strategies available to Medallia as an independent company, which, despite significant uncertainty, had the potential to result in a more successful and valuable company.
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No-Shop Restrictions. The restrictions in the merger agreement on Medallia’s ability to solicit competing proposals after the go-shop period (subject to certain exceptions to allow the Medallia Board to exercise its fiduciary duties and to accept a superior proposal, and then only upon the payment of a termination fee).
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Risk Associated with Failure to Consummate the Merger. The possibility that the merger might not be consummated, and if it is not consummated, that: (1) Medallia’s directors, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work on behalf of Medallia during the pendency of the merger; (2) Medallia will have incurred significant transaction and other costs; (3) Medallia’s continuing business relationships with customers, business partners and employees may be adversely affected; (4) the trading price of our common stock could be adversely affected; (5) the reverse termination fee of $382,220,000 payable by Parent to Medallia will not be available in all instances in which the merger agreement is terminated
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Impact of Interim Restrictions on Medallia’s Business Pending the Completion of the Merger. The restrictions on our conduct of Medallia’s business prior to the consummation of the merger, which may delay or prevent us from undertaking strategic initiatives before the completion of the merger that, absent the merger agreement, Medallia might have pursued.
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Effects of the Merger Announcement. The effects of the public announcement of the merger, including the: (1) effects on Medallia’s employees, customers, operating results and stock price; (2) impact on Medallia’s ability to attract and retain key management, sales and marketing and technical personnel; and (3) potential for litigation in connection with the merger.
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Termination Fee Payable by Medallia. The requirement that Medallia pay Parent a termination fee under certain circumstances following termination of the merger agreement, including if the Medallia Board terminates the merger agreement to accept a superior proposal. The Medallia Board considered the potentially discouraging impact that this termination fee could have on a third party’s interest in making a competing proposal to acquire Medallia.
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Taxable Consideration. The receipt of cash in exchange for shares of our common stock in the merger will be a taxable transaction for U.S. federal income tax purposes for many Medallia stockholders.
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Interests of Medallia’s Directors and Executive Officers. The interests that Medallia’s directors and executive officers may have in the merger, which may be different from, or in addition to, those of our other stockholders.
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reviewed certain publicly available financial statements and other business and financial information of Medallia;
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reviewed certain internal financial statements and other financial and operating data concerning Medallia;
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reviewed certain financial projections prepared by the management of Medallia (which we refer to as the “management case”) and certain extrapolations prepared with guidance from the management of Medallia (which were reviewed and approved for Morgan Stanley’s use by the management of Medallia) (we refer to the management case, together with such extrapolations, as the “financial projections” for the purposes of this section);
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discussed the past and current operations and financial condition and the prospects of Medallia with senior executives of Medallia;
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reviewed the reported prices and trading activity for our common stock;
|
•
|
compared the financial performance of Medallia and the prices and trading activity of our common stock with that of certain other publicly traded companies comparable with Medallia, and their securities;
|
•
|
reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;
|
•
|
participated in certain discussions and negotiations among representatives of Medallia, Parent and their financial and legal advisors;
|
•
|
reviewed a draft of the merger agreement, dated July 25, 2021; a draft of the debt commitment letter, dated July 25, 2021; a draft of the equity commitment letter, dated July 25, 2021; a draft of the limited guaranty dated July 24, 2021; and certain related documents; and
|
•
|
performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate.
|
Public Trading Multiples
|
| |
Selected
Comparable
Company
AV/Estimated
Revenue Multiple
Ranges
|
| |
Implied Value per
Share of
Medallia Common
Stock ($)
|
CY 2021E AV / Revenue
|
| |
|
| |
|
Street Case
|
| |
8.0x – 15.0x
|
| |
23.48 – 42.09
|
Management Case
|
| |
8.0x – 15.0x
|
| |
23.79 – 42.70
|
CY 2022E AV / Revenue
|
| |
|
| |
|
Street Case
|
| |
6.0x – 13.0x
|
| |
21.10 – 43.75
|
Management Case
|
| |
6.0x – 13.0x
|
| |
21.90 – 45.53
|
Based on Calendar Year 2023
|
| |
Selected AV / Estimated
Revenue Multiple
Ranges
|
| |
Implied Value per Share
of Medallia Common
Stock ($)
|
Estimated Revenue
|
| |
|
| |
|
Street Case
|
| |
8.0x – 15.0x
|
| |
27.46 – 50.94
|
Management Case
|
| |
8.0x – 15.0x
|
| |
29.26 – 54.09
|
|
| |
Implied Value Per
Share of Medallia Common
Stock ($)
|
Management Case
|
| |
20.01 – 38.36
|
Selected Software Transactions (Target/Acquiror)
|
| |
AV / NTM
Revenue
Multiple
|
Strategic Acquirors
|
| |
|
Adaptive Insights Inc. / Workday, Inc.
|
| |
11.0x
|
AppDynamics Inc. / Cisco Systems, Inc.
|
| |
13.7x
|
Auth0, Inc. / Okta, Inc.
|
| |
~38.7x
|
AVG Technologies N.V. / Avast Holding B.V.
|
| |
3.3x
|
Broadsoft, Inc. / Cisco Systems, Inc.
|
| |
4.8x
|
Callidus Software Inc. / SAP America, Inc.
|
| |
8.3x
|
Carbon Black, Inc. / VMware, Inc.
|
| |
8.0x
|
Concur Technologies, Inc. / SAP America, Inc.
|
| |
10.3x
|
Five9, Inc. / Zoom Technologies Inc.
|
| |
25.7x
|
Fleetmatics Group Ltd. / Verizon Business International Holdings B.V.
|
| |
6.6x
|
Lifelock, Inc. / Symantec Corporation
|
| |
3.2x
|
Livongo Health, Inc. / Teladoc Health, Inc.
|
| |
44.9x
|
Mulesoft, Inc. / Salesforce.com, Inc.
|
| |
15.7x
|
Netsuite Inc. / Oracle Corporation
|
| |
9.1x
|
Qualtrics International Inc. / SAP America, Inc.
|
| |
16.5x
|
SendGrid, Inc. / Twilio Inc.
|
| |
15.7x
|
Slack Technologies, Inc. / Salesforce.com, Inc.
|
| |
24.9x
|
Tableau Software Inc. / Salesforce.com, Inc.
|
| |
11.0x
|
|
| |
|
Financial Sponsor Acquirors
|
| |
|
Apptio Inc. / Vista Equity Partners Management, LLC
|
| |
7.0x
|
Barracuda Networks Inc. / Thoma Bravo LP
|
| |
3.8x
|
Cambium Learning Group, Inc. / Veritas Capital Fund Management, L.L.C.
|
| |
4.2x
|
Cloudera, Inc. / Clayton Dubilier & Rice, LLC; Kohlberg Kravis Roberts & Co. L.P.
|
| |
5.3x
|
Cvent Inc. / Vista Equity Partners Management, LLC
|
| |
6.4x
|
Ellie Mae Inc. / Thoma Bravo LP
|
| |
6.8x
|
Forescout Technologies, Inc. / Advent International Corporation; Crosspoint Capital Partners
|
| |
4.9x
|
Gigamon Inc. / Elliott Management Corporation
|
| |
3.7x
|
Imperva Inc. / Thoma Bravo LP
|
| |
4.7x
|
Infloblox Inc. / Vista Equity Partners Management, LLC
|
| |
3.6x
|
Informatica Corporation / Permira Advisers LLC
|
| |
4.1x
|
Instructure Inc. / Thoma Bravo LP
|
| |
6.6x
|
LogMeIn, Inc. / Francisco Partners; Evergreen Coast Capital Corp.
|
| |
3.4x
|
Marketo, Inc. / Vista Equity Partners Management, LLC
|
| |
5.9x
|
MINDBODY, Inc. / Vista Equity Partners Management, LLC
|
| |
6.8x
|
Pluralsight, Inc. / Vista Equity Partners Management, LLC
|
| |
7.8x
|
Proofpoint, Inc. / Thoma Bravo LP
|
| |
9.3x
|
QAD Inc. / Thoma Bravo LP
|
| |
5.3x
|
RealPage, Inc. / Thoma Bravo LP
|
| |
8.2x
|
SolarWinds Corporation / Silver Lake Group, LLC; Thoma Bravo LLC
|
| |
7.8x
|
Sophos Ltd. / Thoma Bravo LP
|
| |
5.1x
|
Talend S.A. / Thoma Bravo LP
|
| |
7.3x
|
Ultimate Software / Hellman & Friedman LLC
|
| |
8.2x
|
Precedent Transaction Multiples
|
| |
Representative
Ranges of AV/
NTM Revenue
Multiples
|
| |
Implied Value per
Share of
Medallia Common
Stock ($)
|
Street Case
|
| |
6.0x – 15.0x
|
| |
18.56 – 44.34
|
Management Case
|
| |
6.0x – 15.0x
|
| |
18.88 – 45.15
|
Premia
|
| |
Representative
Ranges
|
| |
Implied Value per
Share of
Medallia Common
Stock ($)
|
Premia to 1-Day Unaffected Share Price
|
| |
15% - 45%
|
| |
32.64 – 41.15
|
Premia to 52-Week High Share Price
|
| |
(20)% - 15%
|
| |
38.00 – 54.63
|
Trading Periods
|
| |
Range of Trading Prices per Share
of Medallia Common Stock ($)
|
Last 30 Days ending on June 10, 2021
|
| |
23.86 – 29.99
|
Last 30 Days ending on July 23, 2021
|
| |
30.57 – 34.16
|
Last 90 Days ending on July 23, 2021
|
| |
23.86 – 34.16
|
Last 365 Days ending on July 23, 2021
|
| |
23.86 – 47.50
|
|
| |
Fiscal year ended January 31,
|
|||||||||
(dollars in millions)(1)
|
| |
2022E
|
| |
2023E
|
| |
2024E
|
| |
2025E
|
Revenue
|
| |
$578
|
| |
$708
|
| |
$876
|
| |
$1,074
|
Cost of Goods Sold
|
| |
(186)
|
| |
(214)
|
| |
(250)
|
| |
(292)
|
Gross Profit
|
| |
392
|
| |
494
|
| |
626
|
| |
782
|
Non-GAAP Operating Expenses(2)
|
| |
(412)
|
| |
(444)
|
| |
(507)
|
| |
(560)
|
Non-GAAP EBIT(3)
|
| |
(20)
|
| |
50
|
| |
119
|
| |
222
|
Additional Cash Adjustments(4)(5)
|
| |
(18)
|
| |
(7)
|
| |
(4)
|
| |
(5)
|
Depreciation
|
| |
24
|
| |
31
|
| |
34
|
| |
37
|
Stock-based Compensation Expense
|
| |
(125)
|
| |
(141)
|
| |
(162)
|
| |
(187)
|
EBITDA(5)(6)
|
| |
(139)
|
| |
(68)
|
| |
(14)
|
| |
66
|
Taxes(5)
|
| |
—
|
| |
—
|
| |
—
|
| |
(9)
|
Change in Net Working Capital
|
| |
(8)
|
| |
(19)
|
| |
(8)
|
| |
(36)
|
Capital Expenditures
|
| |
(34)
|
| |
(37)
|
| |
(52)
|
| |
(54)
|
Unlevered free cash flow(5)(7)
|
| |
(180)
|
| |
(124)
|
| |
(74)
|
| |
(32)
|
(1)
|
Totals may not foot due to rounding.
|
(2)
|
Non-GAAP operating expenses include non-GAAP sales and marketing, research and development, and general and administrative expenses.
|
(3)
|
Non-GAAP EBIT is defined as Medallia’s GAAP loss from operations plus stock-based compensation, employer payroll tax expense related to stock-based compensation, amortization of acquired intangible assets, acquisition-related costs, option acceleration payments, and restructuring and other expenses.
|
(4)
|
Additional cash adjustments include cash expenses for acquisitions and corporate development, employee RSU taxes and option payment expenses.
|
(5)
|
Not provided to Parent.
|
(6)
|
EBITDA is defined as Medallia’s non-GAAP EBIT less cash expenses for acquisitions and corporate development, employee RSU taxes and option payment expenses, plus depreciation, and less stock based compensation expenses.
|
(7)
|
Unlevered free cash flow is defined as Medallia’s EBITDA less taxes (at estimated marginal tax rate) less capital expenditures including capitalized R&D, plus or minus changes in net working capital and other adjustments.
|
•
|
Medallia PSUs granted on April 15, 2019, will be deemed achieved at 50 percent of target levels;
|
•
|
Medallia PSUs granted on June 19, 2019, will be deemed achieved at 100 percent of target levels;
|
•
|
Medallia PSUs granted on March 15, 2020, will be deemed achieved at 100 percent of target levels;
|
•
|
Medallia PSUs granted on April 15, 2021, will be deemed achieved at 117 percent of target levels;
|
•
|
Medallia PSUs granted on May 15, 2021, will be deemed achieved at 107 percent of target levels; and
|
•
|
Medallia PSUs granted on June 15, 2021, will be deemed achieved at 107 percent of target levels.
|
•
|
the Medallia options, Medallia RSUs and Medallia PSUs include those that would be outstanding as of October 25, 2021 (which, solely for purposes of this proxy statement, is the assumed closing date of the merger), in accordance with their regular vesting schedules and assuming continued service by the individual through such date;
|
•
|
that the values of these shares of our common stock and equity awards are equal to the per share price of $34.00 (minus any applicable exercise price in the case of the in-the-money Medallia options); and
|
•
|
that none of the individuals exercises any of his or her Medallia options on or before October 25, 2021, and that no additional Medallia options, Medallia RSUs or Medallia PSUs are granted to any such individual on or before such date.
|
|
| |
Shares Held Directly(1)
|
| |
In-the-Money
Medallia Options(2)
|
| |
Medallia RSUs and
Medallia PSUs(3)
|
| |
|
|||||||||
Name
|
| |
Number of
Shares (#)
|
| |
Value of
Shares ($)
|
| |
Number of
Shares
Subject to
Vested
Portion (#)
|
| |
Value of
Shares
Subject to
Vested
Portion ($)
|
| |
Number
of
Shares
(#)
|
| |
Value ($)
|
| |
Total ($)
|
Leslie Stretch(4)
|
| |
194,824
|
| |
6,624,016
|
| |
7,192,444
|
| |
197,736,870
|
| |
605,275
|
| |
20,579,350
|
| |
224,940,236
|
Roxanne Oulman(5)
|
| |
201,086
|
| |
6,836,924
|
| |
564,585
|
| |
15,396,233
|
| |
495,699
|
| |
16,853,766
|
| |
39,086,923
|
Elizabeth Carducci(6)
|
| |
1,296,451
|
| |
44,079,334
|
| |
155,623
|
| |
4,367,657
|
| |
248,974
|
| |
8,465,116
|
| |
59,912,107
|
Mikael Ottosson(7)
|
| |
38,923
|
| |
1,323,382
|
| |
497,079
|
| |
13,984,277
|
| |
177,231
|
| |
6,025,854
|
| |
21,333,513
|
Jimmy Duan(8)
|
| |
110,614
|
| |
3,760,876
|
| |
—
|
| |
—
|
| |
292,886
|
| |
9,958,124
|
| |
13,719,000
|
Robert Bernshteyn(9)
|
| |
19,672
|
| |
668,848
|
| |
—
|
| |
—
|
| |
13,591
|
| |
462,094
|
| |
1,130,942
|
Mitchell Dauerman(10)
|
| |
19,976
|
| |
679,184
|
| |
—
|
| |
—
|
| |
14,006
|
| |
476,204
|
| |
1,155,388
|
Borge Hald(11)
|
| |
3,213,614
|
| |
109,262,876
|
| |
1,900,000
|
| |
55,787,000
|
| |
50,001
|
| |
1,700,034
|
| |
166,749,910
|
Leslie Kilgore(12)
|
| |
277,036
|
| |
9,419,224
|
| |
—
|
| |
—
|
| |
7,791
|
| |
264,894
|
| |
9,684,118
|
Douglas Leone(13)
|
| |
1,477,421
|
| |
50,232,314
|
| |
—
|
| |
—
|
| |
7,791
|
| |
264,894
|
| |
50,497,208
|
Stanley Meresman(14)
|
| |
22,312
|
| |
758,608
|
| |
—
|
| |
—
|
| |
7,791
|
| |
264,894
|
| |
1,023,502
|
Amy Pressman(11)
|
| |
3,586,697
|
| |
121,947,698
|
| |
1,250,000
|
| |
37,385,500
|
| |
57,792
|
| |
1,964,928
|
| |
161,298,126
|
Steven Walske(15)
|
| |
507,575
|
| |
17,257,550
|
| |
—
|
| |
—
|
| |
7,791
|
| |
264,894
|
| |
17,522,444
|
James White(16)
|
| |
3,898
|
| |
132,532
|
| |
—
|
| |
—
|
| |
13,784
|
| |
468,656
|
| |
601,188
|
(1)
|
Represents shares of our common stock directly held by the individual as of August 20, 2021, plus any shares of our common stock subject to Medallia RSUs and Medallia PSUs that are scheduled to vest and be settled before October 25, 2021 (without regard to any change in control-related accelerated vesting). The amounts shown are determined assuming that no individual will dispose of shares of our common stock from August 20, 2021, through October 25, 2021, and that the Medallia RSUs and Medallia PSUs scheduled to vest and be settled prior to October 25, 2021, are so settled. The number of shares shown does not include shares of our common stock that the executive officer may purchase after the date of the merger agreement under the ESPP. For additional information regarding the treatment of our ESPP in the merger, see the section of this proxy statement captioned “—Interests of Medallia's Directors and Executive Officers in the Merger—Treatment of Equity-Based Awards.” For additional information regarding beneficial ownership of common stock, see the section of this proxy statement captioned “Security Ownership of Certain Beneficial Owners and Management.”
|
(2)
|
Represents outstanding in-the-money Medallia options held by the individual. All options held by the individuals named in the table above are in-the-money, and all such options are vested as of October 25, 2021. The values shown are determined as the excess of (i) the total number of vested shares of our common stock subject to such Medallia options multiplied by the per share price, over (ii) the aggregate exercise price for such Medallia options.
|
(3)
|
Represents outstanding Medallia RSUs and Medallia PSUs (at levels of achievement assumed in the merger agreement) that are not scheduled to vest on or before October 25, 2021. The values shown with respect to Medallia RSUs and Medallia PSUs are determined as the product of the per share merger consideration, multiplied by the total number of shares of our common stock subject to Medallia RSUs or Medallia PSUs, as applicable. The number of shares of our common stock subject to Medallia PSUs is based on the levels of achievement assumed in the merger agreement. Accordingly, the number of shares represents unvested Medallia PSUs covering a total of 0 shares of our common stock for Mr. Stretch; 244,588 shares of our common stock for Ms. Oulman; 52,223 shares of our common stock for Ms. Carducci; 60,298 shares of our common stock for Mr. Ottosson; and 131,906 shares of our common stock for Mr. Duan. As described further in the section of this proxy statement captioned “—Interests of Medallia's Directors and Executive Officers in the Merger—Treatment of Equity-Based Awards—2019 Equity Incentive Plan” Medallia RSUs and Medallia PSUs outstanding as of the date of the closing of the merger (which date, solely for purposes of this proxy statement, is assumed to be October 25, 2021) that are held by Medallia's non-employee directors will accelerate vesting in full (at the levels of achievement assumed in the merger agreement, for Medallia PSUs). In addition, each of the Medallia executive officers is eligible for vesting acceleration of his or her Medallia RSUs and Medallia PSUs in connection with certain qualifying terminations of employment under the Severance Policy. For additional information regarding the Medallia RSUs and Medallia PSUs for our named executive officers, see the section of this proxy statement captioned “—Interests of Medallia's Directors and Executive Officers in the Merger—Golden Parachute Compensation.”
|
(4)
|
Consists of (i) 73,776 shares of our common stock held of record by Mr. Stretch; (ii) 121,048 shares of our common stock issuable upon vesting of RSUs and PSUs that are scheduled to vest and be settled before October 25, 2021; (iii) 7,192,444 shares of our common stock subject to vested and outstanding in-the-money options as of October 25, 2021; and (iv) 605,275 shares of our common stock subject to unvested RSUs and PSUs (at levels of achievement assumed in the merger agreement) as of October 25, 2021.
|
(5)
|
Consists of (i) 172,217 shares of our common stock held of record by Ms. Oulman; (ii) 28,869 shares of our common stock issuable upon vesting of RSUs and PSUs that are scheduled to vest and be settled before October 25, 2021; (iii) 564,585 shares of our common stock subject to vested and outstanding in-the-money options as of October 25, 2021; and (iv) 495,699 shares of our common stock subject to unvested RSUs and PSUs (at levels of achievement assumed in the merger agreement) as of October 25, 2021.
|
(6)
|
Consists of (i) 785,429 shares of our common stock held of record by Ms. Carducci; (ii) 500,000 shares of our common stock held of record by The Elizabeth Carducci 2020 Irrevocable Trust dtd 12/11/2020 for which Ms. Carducci serves as an investment advisor; (iii) 11,022 shares of our common stock issuable upon vesting of RSUs and PSUs that are scheduled to vest and be settled before October 25, 2021; (iv) 155,623 shares of our common stock subject to vested and outstanding in-the-money options as of October 25, 2021; and (v) 248,974 shares of our common stock subject to unvested RSUs and PSUs (at levels of achievement assumed in the merger agreement) as of October 25, 2021.
|
(7)
|
Consists of (i) 30,292 shares of our common stock held of record by Mr. Ottosson; (ii) 8,631 shares of our common stock issuable upon vesting of RSUs and PSUs that are scheduled to vest and be settled before October 25, 2021; (iii) 497,079 shares of our common stock subject to vested and outstanding in-the-money options as of October 25, 2021; and (iv) 177,231 shares of our common stock subject to unvested RSUs and PSUs (at levels of achievement assumed in the merger agreement) as of October 25, 2021.
|
(8)
|
Consists of (i) 83,530 shares of our common stock held of record by Mr. Duan; (ii) 27,084 shares of our common stock issuable upon vesting of RSUs and PSUs that are scheduled to vest and be settled before October 25, 2021; and (iii) 292,886 shares of our common stock subject to unvested RSUs and PSUs (at levels of achievement assumed in the merger agreement) as of October 25, 2021.
|
(9)
|
Consists of (i) 19,672 shares of our common stock held of record by Mr. Bernshteyn and (ii) 13,591 shares of our common stock subject to unvested RSUs as of October 25, 2021.
|
(10)
|
Consists of (i) 19,976 shares of our common stock held of record by Mr. Dauerman and (ii) 14,006 shares of our common stock subject to unvested RSUs as of October 25, 2021.
|
(11)
|
Consists of (i) 1,465,925 shares of our common stock held of record by Mr. Hald; (ii) 16,666 shares of our common stock issuable upon vesting of RSUs that are scheduled to vest and be settled before October 25, 2021; (iii) 1,900,000 shares of our common stock subject to vested and outstanding in-the-money options as of October 25, 2021; (iv) 50,001 shares of our common stock subject to unvested RSUs as of October 25, 2021; (v) 1,979,742 shares of our common stock held of record by Amy Pressman, Mr. Hald’s spouse; (vi) 16,666 shares of our common stock issuable upon vesting of RSUs that are scheduled to vest and be settled before October 25, 2021 to Ms. Pressman; (vii) 1,250,000 shares of our common stock subject to vested and outstanding in-the-money options as of October 25, 2021 to Ms. Pressman; (viii) 57,792 shares of our common stock subject to unvested RSUs as of October 25, 2021 to Ms. Pressman; (ix) 1,731,023 shares of our common stock held of record by the Borge Hald Irrevocable Trust U/A/D 11/4/2019 First Republic Trust Company of Delaware LLC, Trustee for which Mr. Hald serves as investment advisor; and (x) 1,590,289 shares of our common stock held of record by the Amy Hald Irrevocable Trust U/A/D 11/4/2019 First Republic Trust Company of Delaware LLC, Trustee for which Ms. Pressman serves as investment advisor.
|
(12)
|
Consists of (i) 247,208 shares of our common stock held of record by Ms. Kilgore; (ii) 29,828 shares of our common stock held of record by the JLK Revocable Trust dated October 13, 2003 for which Ms. Kilgore serves as trustee; and (iii) 7,791 shares of our common stock subject to unvested RSUs as of October 25, 2021.
|
(13)
|
Consists of (i) 406,638 shares of our common stock held of record by Mr. Leone; (ii) 1,069,358 shares of our common stock held of record by estate planning vehicle; (iii) shares of our common stock held by certain entities affiliated with Sequoia Capital; and (iv) 7,791 shares of our common stock subject to unvested RSUs as of October 25, 2021.
|
(14)
|
Consists of (i) 22,312 shares of our common stock held of record by Mr. Meresman and (ii) 7,791 shares of our common stock subject to unvested RSUs as of October 25, 2021.
|
(15)
|
Consists of (i) 507,575 shares of our common stock held of record by Mr. Walske and (ii) 7,791 shares of our common stock subject to unvested RSUs as of October 25, 2021.
|
(16)
|
Consists of (i) 3,898 shares of our common stock held of record by Mr. White and (ii) 13,784 shares of our common stock subject to unvested RSUs as of October 25, 2021.
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a lump sum payment equal to six months’ base salary (12 months for Mr. Stretch);
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a lump sum pro rata payment of the executive’s target annual bonus; and
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payment of COBRA continuation coverage premiums for up to six months (12 months for Mr. Stretch), or taxable payments in lieu of such payment.
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a lump sum payment equal to 12 months’ base salary (18 months for Mr. Stretch);
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a lump sum equal to a pro-rata target annual bonus for the year of termination plus 100 percent of the executive’s target annual bonus for the year of termination (150 percent for Mr. Stretch);
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payment of COBRA continuation coverage premiums for up to 12 months (18 months for Mr. Stretch), or taxable payments in lieu of such payment; and
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100 percent acceleration of unvested time-based equity awards; and payment of COBRA continuation coverage premiums for up to 12 months (18 months for Mr. Stretch) or taxable payments in lieu of such payments.
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that the effective time of the merger will occur on October 25, 2021 (which is the assumed closing date of the merger solely for purposes of this proxy statement, including this golden parachute compensation disclosure);
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that the named executive officer will have a qualifying termination of his or her employment at the effective time of the merger that results in severance benefits becoming payable to him under the Severance Policy;
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that the equity awards that are outstanding as of October 25, 2021, are the equity awards that Medallia has granted to the named executive officer through August 20, 2021; and
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that the number of shares of our common stock subject to Medallia PSUs will be determined at the levels of achievement provided for in the merger agreement.
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Name
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Cash
($)(1)
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Equity
($)(2)
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Perquisites/
Benefits
($)(3)
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Total
($)(4)
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Leslie J. Stretch
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1,833,333
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98,038,965
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50,781
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99,923,079
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Roxanne M. Oulman
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933,333
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24,239,600
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33,854
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25,206,787
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Elizabeth M. Carducci
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933,333
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8,996,759
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27,287
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9,957,379
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Mikael J. Ottosson
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800,000
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6,661,683
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33,854
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7,495,537
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Jimmy C. Duan
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800,000
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9,958,124
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33,854
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10,791,978
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Name
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Base Salary
Severance ($)
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Target
Incentive
Opportunity
Severance ($)
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Total ($)
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Leslie J. Stretch
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750,000
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1,083,333
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1,833,333
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Roxanne M. Oulman
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400,000
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533,333
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933,333
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Elizabeth M. Carducci
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350,000
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583,333
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933,333
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Mikael J. Ottosson
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400,000
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400,000
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800,000
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Jimmy C. Duan
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300,000
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500,000
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800,000
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(1)
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The amount for each named executive officer represents the “double-trigger” cash severance payments to which the named executive officer may become entitled under the Severance Policy in connection with a qualifying termination during the change in control period, as described in further detail in the section of this proxy statement captioned “—Interests of Medallia’s Directors and Executive Officers in the Merger—Severance Policy.” The amounts represent a lump sum cash payment equal to the sum of (i) 12 months’ of each named executive officer’s base salary (or 18 months with respect to Mr. Stretch); and (ii) each named executive officer’s pro-rata target annual bonus for the year of termination plus 100 percent of the executive’s target annual bonus for the year of termination (or 150 percent with respect to Mr. Stretch). The following table sets forth the value of each of the base salary and target incentive opportunity severance benefits payable to a named executive officer under the terms of the Severance Policy.
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(2)
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This amount includes the “double-trigger” vesting acceleration of 100 percent of the unvested portion of the named executive officer’s outstanding Medallia RSUs, Medallia PSUs (to the extent that the applicable performance metrics are deemed achieved pursuant to the
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(3)
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This amount represents a lump sum cash payment equal to 12 months of premiums (18 months with respect to Mr. Stretch) that the named executive officer otherwise would be required to pay for continued post-employment, group health coverage. These amounts are a “double-trigger” severance benefit that each of Messrs. Stretch, Ottosson and Duan and Ms. Oulman and Ms. Carducci may become entitled to receive under the Severance Policy in connection with a qualifying termination during the change in control period, as described in further detail in the section of this proxy statement captioned “—Interests of Medallia’s Directors and Executive Officers in the Merger—Severance Policy.”
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(4)
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Under the Severance Policy, amounts are subject to reduction in the event the named executive officer would receive a greater benefit on an after-tax basis by having some of his or her change in control-related payments and benefits being cut back rather than paying the excise tax under Section 4999 of the Internal Revenue Code on such amounts. This amount assumes no such reduction is applied.
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the stockholder must not vote in favor of the proposal to adopt the merger agreement;
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the stockholder must deliver to Medallia a written demand for appraisal before the vote on the merger agreement at the special meeting;
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the stockholder must continuously hold the shares from the date of making the demand through the effective time of the merger (a stockholder will lose appraisal rights if the stockholder transfers the shares before the effective time of the merger); and
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a stockholder (or any person who is the beneficial owner of shares of our common stock held either in a voting trust or by a nominee on behalf of such person) or the surviving corporation must file a petition in the Delaware Court of Chancery demanding a determination of the value of the stock of all such stockholders within 120 days after the effective time of the merger (the surviving corporation is under no obligation to file any petition and has no intention of doing so).
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tax consequences that may be relevant to holders who may be subject to special treatment under U.S. federal income tax laws, such as financial institutions; tax-exempt organizations; S corporations, partnerships and any other entity or arrangement treated as a partnership or pass-through entity for U.S. federal income tax purposes; insurance companies; mutual funds; dealers in stocks and securities; traders in securities that elect to use the mark-to-market method of accounting for their securities; regulated investment companies; real estate investment trusts; entities subject to the U.S. anti-inversion rules; holders who hold their common stock as “qualified small business stock” for purposes of Sections 1045 and 1202 of the Code; Non-U.S. Holders that own (directly or by attribution) more than five percent of our common stock; or certain former citizens or long-term residents of the United States;
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tax consequences to holders holding the shares as part of a hedging, constructive sale or conversion, straddle or other risk reduction transaction;
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tax consequences to holders who received their shares of our common stock in a compensatory transaction or pursuant to the exercise of options or warrants;
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tax consequences to U.S. Holders whose “functional currency” is not the U.S. dollar;
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tax consequences to holders who hold their common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;
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tax consequences arising from the Medicare tax on net investment income;
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tax consequences to holders subject to special tax accounting rules as a result of any item of gross income with respect to the shares of our common stock being taken into account in an “applicable financial statement” (as defined in the Code);
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the U.S. federal estate, gift or alternative minimum tax consequences, if any;
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any state, local or non-U.S. tax consequences; or
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tax consequences to holders that do not vote in favor of the merger and who properly demand appraisal of their shares under Section 262 of the DGCL.
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an individual who is a citizen or resident of the United States;
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a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
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an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
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a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in section 7701(a)(30) of the Code; or (2) has a valid election in effect under applicable Treasury regulations to be treated as a United States person.
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the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of 30 percent (or a lower rate under an applicable income tax treaty);
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such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the completion of the merger, and certain other specified conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30 percent (or a lower rate under an applicable income tax treaty); or
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Medallia is or has been a “United States real property holding corporation” as such term is defined in Section 897(c) of the Code (which we refer to as “USRPHC”), at any time within the shorter of the five-year period preceding the Merger or such Non-U.S. Holder’s holding period with respect to the applicable shares of our common stock (which we refer to as the “relevant period”) and, if shares of our common stock are regularly traded on an established securities market (within the meaning of Section 897(c)(3) of the Code), such Non-U.S. Holder owns (directly, indirectly or constructively) more than five percent of our common stock at any time during the relevant period, in which case such gain will be subject to U.S. federal income tax at rates generally applicable to U.S. persons (as described in the first bullet point above), except that the branch profits tax will not apply. Generally, a corporation is a USRPHC if the fair market value of its U.S. real property interests (as defined in the Code) equals or exceeds 50 percent of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. For this purpose, U.S. real property interests generally include land, improvements and associated personal property. Although there can be no assurances in this regard, we believe that we are not, and have not been, a USRPHC at any time during the five-year period preceding the merger. Non-U.S. Holders are encouraged to consult their own tax advisors regarding the possible consequences to them if we are a USRPHC.
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the closing of the merger in accordance with the terms of the merger agreement;
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the payment and discharge of any reimbursement obligations for which Medallia has requested reimbursement within 90 days following the valid termination of the merger agreement;
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the valid termination of the merger agreement other than a termination pursuant to which Medallia would be entitled to a termination fee, in which case the limited guaranty will terminate 90 days after such termination unless Medallia has delivered a written notice with respect to the guaranteed obligations; and
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performance of the payment obligations under the limited guaranty.
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the execution and delivery of definitive loan, guaranty and security documentation for the credit facilities and the delivery of customary closing documents;
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subject to customary limitations, the accuracy of certain representations and warranties made by Medallia or with respect to the business of Medallia in the merger agreement (giving effect to the
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the substantially concurrent closing of the merger in accordance with the merger agreement (without any amendment, modification or waiver of any of the provisions thereof that would be materially adverse to the interests of the debt financing sources in their capacity as such without the approval of the lead arranger (such approval not be unreasonably withheld, conditioned or delayed));
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the occurrence or substantially concurrent funding of the equity contribution; and
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that no Company Material Adverse Effect has occurred since the date of the merger agreement and be continuing.
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changes in general economic conditions in the United States or any other country or region in the world, or changes in conditions in the global economy generally (except to the extent that such effect has had a materially disproportionate adverse effect on Medallia relative to other companies of a similar size operating in the industries in which Medallia and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred);
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changes in conditions in the financial markets, credit markets or capital markets in the United States or any other country or region in the world, including (1) changes in interest rates or credit ratings in the United States or any other country; (2) changes in exchange rates for the currencies of any country; or (3) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any
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changes in conditions in the industries in which Medallia and its subsidiaries conduct business (except to the extent that such effect has had a materially disproportionate adverse effect on Medallia relative to other companies of a similar size operating in the industries in which Medallia and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred);
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changes in regulatory, legislative or political conditions (including the imposition or adjustment of tariffs) in the United States or any other country or region in the world (except to the extent that such effect has had a materially disproportionate adverse effect on Medallia relative to other companies of similar size operating in the industries in which Medallia and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred);
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any geopolitical conditions, outbreak of hostilities, civil unrest, civil disobedience, acts of war, sabotage, cyberattack, cybercrime, terrorism or military actions (including any escalation or worsening of any of the foregoing) in the United States or any other country or region in the world, including an outbreak or escalation of hostilities involving the United States or any other governmental authority or the declaration by the United States or any other governmental authority of a national emergency or war (except to the extent that such effect has had a materially disproportionate adverse effect on Medallia relative to other companies of similar size operating in the industries in which Medallia and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred);
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earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wildfires or other natural disasters, weather conditions, or other force majeure events in the United States or any other country or region in the world (or escalation or worsening of any such events or occurrences, including, in each case, the response of governmental authorities) (except to the extent that such effect has had a materially disproportionate adverse effect on Medallia relative to other companies of similar size operating in the industries in which Medallia and its subsidiaries conduct business, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred);
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pandemics (including the COVID-19 pandemic), epidemics, contagious disease outbreaks or other comparable events (or escalation or worsening of any such events or occurrences, including, in each case, the response of governmental authorities (including any quarantine, “shelter in place,” “stay at home,” social distancing, shut down, closure, sequester, safety or similar law, directive, guideline, response or recommendation of or promulgated by any governmental authority, including the Centers for Disease Control and Prevention and the World Health Organization, or other reasonable actions taken, in each case, in connection with or in response to COVID-19 and including, in each case, any changes in any such law, directive, guidance, response or recommendation (which we refer to as “COVID-19 measures”));
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any effect with respect to COVID-19 or any COVID-19 measures;
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any effect resulting from the public announcement of the merger agreement or the pendency of the merger, including the impact thereof on the relationships, contractual or otherwise, of Medallia and its subsidiaries with employees, suppliers, customers, partners, vendors, governmental authorities or any other third person;
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the compliance by any party with the terms of the merger agreement, including any action taken or refrained from being taken pursuant to or in accordance with the merger agreement;
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any action taken or refrained from being taken, in each case to which Parent has expressly approved, consented to or requested in writing following the date of the merger agreement;
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changes or proposed changes in GAAP or other accounting standards or applicable law (or the enforcement or interpretation of any of the foregoing) or changes in the regulatory accounting requirements applicable to any industry in which Medallia and its subsidiaries operate, or any action taken for the purpose of complying with GAAP or any law (including any action taken or not taken as required by any law, governmental authority or otherwise to respond to the impact, presence, outbreak or spread of any pandemic (including COVID-19), epidemic, contagious disease outbreaks or other comparable event);
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changes in the price or trading volume of our common stock or indebtedness, in each case in and of itself (it being understood that any cause of such change may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has occurred);
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any failure, in and of itself, by Medallia and its subsidiaries to meet (1) any public estimates or expectations of Medallia’s revenue, earnings or other financial performance or results of operations for any period; or (2) any internal budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that the cause of any such failure may be deemed to constitute, in and of itself, a Company Material Adverse Effect and may be taken into consideration when determining whether a Company Material Adverse Effect has occurred);
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the availability or cost of equity, debt or other financing to Parent or Merger Sub;
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any transaction litigation or other legal proceeding threatened, made or brought by any of our current or former stockholders (on their own behalf or on behalf of Medallia) against Medallia, any of its executive officers or other employees or any member of the Medallia Board arising out of the merger; or
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the identity of, or any facts or circumstances relating to, Parent or Merger Sub or their respective affiliates or the respective financing sources of or investors in any of the foregoing.
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organization and good standing;
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corporate power and enforceability;
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approval of the Medallia Board;
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the nature of the required approval of our stockholders;
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non-contravention of certain agreements and laws;
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requisite governmental approvals;
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Medallia’s capitalization;
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Medallia’s subsidiaries and their capitalization;
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Medallia’s SEC reports;
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Medallia’s financial statements, internal controls and indebtedness;
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no undisclosed liabilities;
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absence of certain changes;
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material contracts;
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real property matters;
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environmental matters;
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intellectual property matters;
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tax matters;
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employee plans;
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labor matters;
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permits;
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compliance with laws;
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legal proceedings and orders;
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insurance;
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related party transactions; and
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brokers.
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organization and good standing;
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power and enforceability;
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non-contravention of certain agreements and laws;
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requisite governmental approvals;
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legal proceedings and orders;
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ownership of Parent and Merger Sub capital stock;
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brokers;
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no Parent vote or approval required;
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the limited guaranty;
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financing;
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absence of stockholder and management arrangements; and
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non-foreign status.
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use its reasonable best efforts to maintain its existence in good standing pursuant to applicable law;
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subject to certain exceptions, use its reasonable best efforts to conduct its business and operations in the ordinary course of business; and
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use its reasonable best efforts to (1) preserve intact its material assets, properties, contracts and business organizations; (2) keep available the services of its current officers and key employees; and (3) preserve the current relationships with material customers, suppliers, distributors, lessors, licensors, licensees, creditors, contractors and other persons with whom Medallia or any of its subsidiaries has business relations.
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amend or otherwise change Medallia’s charter, bylaws or any other similar organizational document of or any of its subsidiaries;
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propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
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issue, sell, or deliver, or agree or commit to issue, sell or deliver, any Medallia securities (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except (1) for the issuance, delivery or sale of shares of our common stock pursuant to the Medallia equity-based awards, Medallia options or convertible notes outstanding as of July 22, 2021, or pursuant to the ESPP in accordance with their terms and the terms of the merger agreement; (2) in connection with agreements in effect on the date of the merger agreement set forth on the confidential disclosure letter to the merger agreement; or (3) as contemplated by the relevant sections of the merger agreement;
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directly or indirectly acquire, repurchase or redeem any securities, except for (1) with respect to Medallia securities pursuant to the terms and conditions of the Medallia equity-based awards, the capped call transactions or the Medallia options outstanding as of the date of the merger agreement in accordance with their terms as in effect as of the date of the merger agreement or to otherwise satisfy tax obligations with respect to awards granted pursuant to the Medallia equity plans or pay the exercise price of the Medallia options, in each case in accordance with the terms of the Medallia equity plans as in effect on the date of the merger agreement; or (2) transactions between Medallia and any of its direct or indirect subsidiaries;
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acquire (by merger, consolidation or acquisition of stock or assets) any other person or any material equity interest therein or enter into any joint venture, partnership, limited liability corporation or similar arrangement with any third person;
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acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property;
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(1) adjust, split, subdivide, combine or reclassify any shares of capital stock, or issue or authorize or propose the issuance of any other Medallia securities in respect of, in lieu of or in substitution for, shares of capital stock or other equity or voting interest; (2) declare, set aside, establish a record date for, authorize or pay any dividend or other distribution (whether in cash, shares or property or any combination thereof) in respect of any shares of capital stock or other equity or voting interest, or make any other actual, constructive or deemed distribution in respect of the shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned subsidiary of Medallia to Medallia or one of its other wholly owned subsidiaries; (3) pledge or encumber any shares of its capital stock or other equity or voting interest; or (4) modify the terms of any shares of its capital stock or other equity or voting interest;
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(1) incur, assume, suffer or modify the terms of any indebtedness or issue any debt securities, except (a) for loans or advances between Medallia subsidiaries or between Medallia and its
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except (a) in order to comply with applicable law, (b) as required pursuant to the existing terms of any Medallia benefit plan in effect on the date of the merger agreement and made available to Parent, (c) as provided in the merger agreement or (d) pursuant to the proposed budget set forth in the Medallia disclosure schedule, (1) establish, adopt, enter into, terminate or amend, or take any action to accelerate the vesting, payment or funding of any compensation, or benefits under, any material Medallia benefit plan, except as appropriate to implement hires not prohibited under clauses (4) and (5) below; (2) grant to any service provider whose total annual base compensation exceeds $300,000 any increase in cash- or equity-based compensation, bonus, incentive or fringe or other benefits (or, in the case of any such person whose annual base cash compensation does not exceed such amount, grant any such increase unless done in the ordinary course of business and consistent with past practice); (3) grant to any service provider, any new or increased change in control, retention, deal or stay bonus, severance or termination pay, or materially amend or modify any such arrangement; (4) enter into, terminate or materially amend or modify any employment agreement, offer letter, consulting agreement or arrangement, or change in control, retention, deal or stay bonus, severance or termination agreement with any service providers (other than entering into offer letters or consulting agreements with newly-hired non-officer employees or consultants with total annual base compensation equal to or less than $300,000 in the ordinary course of business and consistent with past practice); or (5) terminate any employee of Medallia or any of its subsidiaries with total annual base compensation in excess of $300,000, other than terminations for cause; provided that “total annual compensation” shall not take into account any temporary reductions to total annual compensation due to COVID-19;
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settle, release, waive or compromise any pending or threatened legal proceeding, except for the settlement of any legal proceedings (1) solely for monetary damages in an amount (a) not in excess of $350,000 or (b) that does not exceed the amount reflected or reserved against in the audited Medallia balance sheet; or (2) settled in compliance with the merger agreement;
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except as required by applicable law or GAAP, (1) other than in the ordinary course of business, revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable; or (2) make any change in any of its accounting principles or practices;
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(1) make or change any material tax election; (2) settle or compromise any material tax claim or assessment; or (3) consent to any extension or waiver of any limitation period with respect to any material tax claim or assessment;
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(1) incur, authorize or commit to incur any material capital expenditures other than (a) consistent in all material respects with the capital expenditure budget set forth in the confidential disclosure letter to the merger agreement; (b) pursuant to obligations imposed by material contracts or leases; or (c) pursuant to agreements in effect prior to the date of the merger agreement; (2) enter into, modify, amend, extend, fail to perform the terms of or terminate any contract that if so entered into, modified, amended, extended, failed to be performed or terminated would have a Company Material Adverse Effect; (3) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; (4) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any affiliate of Medallia or other person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; (5) effectuate a “plant closing,” “mass layoff” or other employee layoff event affecting in whole or in part any site of employment, facility, operating unit or employee; (6) grant any material refunds, credits, rebates or other allowances
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enter into any material contract that is outside the ordinary course of business;
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modify, amend, terminate or assign, or waive or assign any rights under any material contract in any material manner, except in the ordinary course of business or pursuant to Medallia’s reasonable business judgment;
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negotiate, modify, extend, terminate or enter into any labor agreement, or recognize or certify any labor union, works council or other labor organization as the bargaining representative for any employees of Medallia or its subsidiaries;
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waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation of any service provider;
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sell, assign, transfer, lease, license, abandon, let lapse, cancel, dispose of, or otherwise subject to any lien any material Medallia intellectual property, except for non-exclusive licenses of intellectual property entered in the ordinary course of business;
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disclose or abandon any material trade secrets except in the ordinary course of business and to the extent not economically desirable to maintain for the conduct of the business of Medallia and its subsidiaries, or disclose, license, make available, or deliver any source code for any Medallia software to any person except to a third-party service provider or other agent obligated in writing to (1) maintain the confidentiality of, and not disclose, such source code; and (2) use such source code only in the provision of services to Medallia or any of its subsidiaries;
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make any material change to Medallia’s or any of its subsidiaries’ policies or procedures with respect to their processing of personal information, except as required by applicable law; or
|
•
|
enter into or agree or commit to enter into a contract to take any such prohibited actions.
|
•
|
initiate, solicit, propose, induce or encourage the making, submission or announcement of one or more acquisition proposals from any person or its representatives;
|
•
|
continue, enter into, participate in or engage in any discussions or negotiations with any person or its representatives with respect to one or more acquisition proposals or any other proposals that could lead to an acquisition proposal; and
|
•
|
otherwise cooperate with, assist or take any action to facilitate any acquisition proposal or any other proposals that could lead to any acquisition proposal.
|
•
|
solicit, initiate, propose or induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any proposal or inquiry that constitutes, or is reasonably expected to lead to, an acquisition proposal;
|
•
|
furnish to any person (other than Parent, Merger Sub or any of their respective designees) any non-public information relating to Medallia or any of its subsidiaries or afford to any person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of Medallia or any of its subsidiaries (other than Parent, Merger Sub or any of their respective designees), in any such case in connection with any acquisition proposal or with the intent to induce the making, submission or announcement of, or to knowingly encourage, facilitate or assist, an acquisition proposal or the making of any proposal that would reasonably be expected to lead to an acquisition proposal;
|
•
|
participate, or engage in discussions or negotiations, with any person with respect to an acquisition proposal or with respect to any inquiries from third persons relating to the making of an acquisition proposal (other than only informing such persons of the provisions contained in merger agreement);
|
•
|
approve, endorse or recommend any proposal that constitutes, or is reasonably expected to lead to, an acquisition proposal;
|
•
|
enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement or other contract relating to an acquisition transaction, other than an acceptable confidentiality agreement; or
|
•
|
authorize or commit to do any of the foregoing.
|
•
|
any excluded party or its representatives; or
|
•
|
any person or its representatives that has made, renewed or delivered to Medallia a written acquisition proposal after the no-shop period start date that was not solicited in material breach of the merger agreement, but only if the Medallia Board (or a committee thereof) has determined in good faith (after consultation with its financial advisor and outside legal counsel) that (1) such acquisition proposal either constitutes a superior proposal or is reasonably likely to lead to a superior proposal; and (2) the failure to take actions would be reasonably expected to be inconsistent with its fiduciary duties pursuant to applicable law.
|
•
|
“excluded party” means a person or group that, prior to the no-shop period start date, has submitted a written acquisition proposal to Medallia or one of its representatives that the Medallia Board (or a committee thereof) determines in good faith (after consultation with its financial advisor and outside legal counsel) constitutes a superior proposal or is reasonably likely to lead to a superior proposal; however, a person shall immediately cease to be an excluded party (and the provisions of the merger agreement applicable to excluded parties will cease to apply with respect to such person) if such alternative acquisition proposal is withdrawn by such person, it being understood that a modification of an acquisition proposal submitted by a person or group will not be deemed to be a withdrawal or
|
•
|
“superior proposal” means any written acquisition proposal on terms that the Medallia Board (or a committee thereof) has determined in good faith (after consultation with its financial advisor and outside legal counsel) would be more favorable, from a financial point of view, to our stockholders (in their capacity as such) than the merger (taking into account (1) any revisions to the merger agreement made or proposed in writing by Parent prior to the time of such determination; and (2) those factors and matters deemed relevant in good faith by the Medallia Board (or any committee thereof). For purposes of the reference to an acquisition proposal” in this definition, all references to “15 percent” in the definition of “acquisition transaction” will be deemed to be references to “50 percent.”
|
•
|
withhold, withdraw, amend, qualify or modify, or publicly propose to withhold, withdraw, amend, qualify or modify, the Medallia Board recommendation in a manner adverse to Parent;
|
•
|
adopt, approve or recommend an acquisition proposal;
|
•
|
fail to publicly reaffirm the Medallia Board recommendation within 10 business days of the occurrence of a material event or development and after Parent so requests in writing (or, if the Medallia stockholder meeting is scheduled to be held within 10 business days, then within one business day after Parent so requests in writing) (it being understood that Medallia will not be obligated to affirm the Medallia Board recommendation pursuant to the merger agreement on more than three occasions);
|
•
|
take or fail to take any formal action or make or fail to make any recommendation in connection with a tender or exchange offer, other than a recommendation against such offer or a “stop, look and listen” communication by the Medallia Board (or a committee thereof) to our stockholders pursuant to Rule 14d-9(f) promulgated under the Exchange Act (or any substantially similar communication) (it being understood that the Medallia Board (or a committee thereof) may refrain from taking a position with respect to an acquisition proposal until 5:30 p.m., Eastern time, on the 10th business day after the commencement of a tender or exchange offer in connection with such acquisition proposal without such action being considered a violation of the merger agreement);
|
•
|
fail to include the recommendation of the Medallia Board to adopt the merger agreement in the proxy statement (we refer to the actions described in these five bullets as a “Medallia Board recommendation change”); or
|
•
|
cause or permit Medallia or any of its subsidiaries to enter into an alternative acquisition agreement.
|
•
|
Medallia has provided prior written notice to Parent at least three business days in advance to the effect that the Medallia Board (or a committee thereof) has (1) so determined; and (2) resolved to effect a Medallia Board recommendation change, which notice will specify the basis for such Medallia Board recommendation change and will describe the intervening event in reasonable detail; and
|
•
|
prior to effecting such Medallia Board recommendation change, Medallia and its representatives, during such three business day period, have (1) negotiated with Parent and its representatives in good faith (to the extent that Parent requests to negotiate) to make such adjustments to the terms and conditions of the merger agreement and the transaction documents so that the Medallia Board (or a committee
|
•
|
the Medallia Board (or a committee thereof) determines in good faith (after consultation with its financial advisor and outside legal counsel) that the failure to do so would be reasonably expected to be inconsistent with its fiduciary duties pursuant to applicable law;
|
•
|
Medallia has complied in all material respects with its obligations pursuant to the merger agreement with respect to such acquisition proposal;
|
•
|
(1) Medallia has provided prior written notice to Parent at least three business days in advance (which we refer to as the “notice period”) to the effect that the Medallia Board (or a committee thereof) has (a) received a written acquisition proposal that has not been withdrawn; (b) concluded in good faith (after consultation with its financial advisor and outside legal counsel) that such acquisition proposal constitutes a superior proposal; and (c) resolved to effect a Medallia Board recommendation change or to terminate the merger agreement, which notice describes the basis for such Medallia Board recommendation change or termination, including the identity of the person or group making such acquisition proposal, the material terms of such acquisition proposal and include copies of all relevant documents relating to such acquisition proposal; and (2) prior to effecting such Medallia Board recommendation change or termination, Medallia and its representatives, until 5:00 p.m. on the last day of the notice period, have (a) negotiated with Parent and its representatives in good faith (to the extent that Parent desires to negotiate) to make such adjustments to the terms and conditions of the merger agreement and the transaction documents so that such acquisition proposal would cease to constitute a superior proposal; (b) taken into account any adjustments to the terms and conditions of the merger agreement proposed by Parent and other information provided by Parent during the notice period, and the transaction documents in each case, that are offered in writing by Parent, no later than 11:59 p.m. on the last day of the notice period, in a manner that would constitute a binding agreement between the parties if accepted by Medallia; and (c) permitted Parent and its representatives to make a presentation to the Medallia Board regarding the merger agreement and any adjustments with respect thereto (to the extent that Parent requests to make such a presentation), it being understood that (i) in the event of any material revision, amendment, update or supplement to such acquisition proposal, Medallia will be required to deliver a new written notice to Parent and to comply with the requirements of the merger agreement with respect to such new written notice (with the “notice period” in respect of such new written notice being two business days); and (ii) at the end of the notice period, the Medallia Board (or a committee thereof) must have in good faith (after consultation with its financial advisor and outside legal counsel) reaffirmed its determination that such acquisition proposal is a superior proposal;
|
•
|
in the event of any termination of the merger agreement in order to cause or permit Medallia to enter into an alternative acquisition agreement with respect to such acquisition proposal, Medallia will have validly terminated the merger agreement in accordance with the applicable provisions of the merger agreement, including paying the applicable termination fee; and
|
•
|
will not and will instruct and use reasonable best efforts to cause its representatives acting on its behalf not to, disclose publicly the terms or other information with respect to any offer of, or negotiations with, Parent unless and until a definitive agreement with respect to such offer or negotiations is executed or the merger agreement is terminated (and then only to the extent required by applicable law).
|
•
|
cause the closing conditions to the merger to be satisfied;
|
•
|
(1) seek to obtain all consents, waivers, approvals, orders and authorizations from governmental authorities; and (2) make all registrations, declarations and filings with governmental authorities, in each case that are necessary or advisable to consummate the merger; and
|
•
|
(1) seek to obtain all consents, waivers and approvals; and (2) deliver all notifications, in each case pursuant to any material contracts in connection with the merger agreement and the consummation of the merger so as to seek to maintain and preserve the benefits to the surviving corporation of such material contracts as of and following the consummation of the merger.
|
•
|
maintaining in effect the equity commitment letter in accordance with the terms and subject to the conditions thereof;
|
•
|
complying with its obligations under the equity commitment letter;
|
•
|
satisfying on a timely basis all conditions to funding that are applicable to Parent and Merger Sub in the equity commitment letter that are within its control;
|
•
|
consummating the equity financing at or prior to the closing, including causing the guarantor to fund the equity financing at the closing;
|
•
|
complying with its obligations pursuant to the equity commitment letter; and
|
•
|
enforcing its rights pursuant to the equity commitment letters.
|
•
|
maintain in effect the debt commitment letters in accordance with the terms and subject to the conditions thereof;
|
•
|
negotiate, execute and deliver definitive agreements with respect to the debt financing contemplated by the debt commitment letters on the terms and conditions (including any “flex” provisions) contemplated by the debt commitment letters or the fee letters;
|
•
|
accept (and comply with) to the fullest extent all “flex” provisions contemplated by the debt commitment letters or the fee letters and the debt financing to the extent that such “flex” provisions are exercised in accordance with the terms thereof or other terms reasonably satisfactory to Parent and Merger Sub;
|
•
|
satisfy on a timely basis all conditions to funding that are applicable to and within the control of Parent and Merger Sub in the debt commitment letters and such definitive agreements related thereto;
|
•
|
consummate the debt financing at the closing, including causing the financing sources to fund the debt financing at the closing;
|
•
|
comply with its obligations pursuant to the debt commitment letters and the fee letters; and
|
•
|
enforce its rights pursuant to the debt commitment letters.
|
•
|
alternative financing from the same or alternative sources on terms and conditions not materially less favorable in the aggregate to Parent and Merger Sub than those contained in the debt commitment letters and the fee letters and in an amount at least equal to the debt financing or such unavailable portion thereof, as the case may be (which we refer to as the “alternate debt financing”); and
|
•
|
one or more new financing commitment letters with respect to such alternate debt financing (which we refer to as the “new debt commitment letters”), which new debt commitment letters will replace the existing debt commitment letters in whole or in part.
|
•
|
the adoption of the merger agreement by the requisite affirmative vote of our stockholders;
|
•
|
the expiration or termination of the waiting periods, if any, applicable to the merger pursuant to the HSR Act and the Austrian Cartel Act; and
|
•
|
the absence of any temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the merger, any action taken by any governmental authority of competent jurisdiction, and any law enacted, entered, enforced or deemed applicable to the merger, that, in each case, prohibits, makes illegal or enjoins the consummation of the merger.
|
•
|
the accuracy of the representations and warranties of Medallia in the merger agreement, subject to applicable materiality or other qualifiers, as of the effective time of the merger or the date in respect of which such representation or warranty was specifically made;
|
•
|
Medallia having performed and complied in all material respects with all covenants and obligations under the merger agreement required to be performed and complied with by it at or prior to the closing;
|
•
|
receipt by Parent and Merger Sub of a customary closing certificate of Medallia; and
|
•
|
the absence of any Company Material Adverse Effect having occurred after the date of the merger agreement that is continuing.
|
•
|
the accuracy of the representations and warranties of Parent and Merger Sub in the merger agreement, subject to applicable materiality or other qualifiers, as of the effective time of the merger or the date in respect of which such representation or warranty was specifically made;
|
•
|
Parent and Merger Sub having performed and complied in all material respects with all covenants and obligations under the merger agreement required to be performed and complied by Parent and Merger Sub prior to the effective time of the merger; and
|
•
|
the receipt by Medallia of a customary closing certificate of Parent and Merger Sub.
|
•
|
by mutual written agreement of Medallia and Parent;
|
•
|
by either Medallia or Parent if:
|
•
|
any permanent injunction or other judgment or order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the merger is in effect, or any action has been taken by any governmental authority of competent jurisdiction, that, in each case, prohibits, makes illegal or enjoins the consummation of the merger and has become final and non-appealable or any law is enacted, entered, enforced or deemed applicable to the merger that prohibits, makes illegal or enjoins the consummation of the merger, except, in each case, that the right to terminate will not be available to any party that has failed to use its reasonable best efforts to resist, appeal, obtain consent pursuant to, resolve or lift, as applicable, such injunction, judgment, order, restraint, prohibition, action or law;
|
•
|
the merger has not been consummated by 11:59 p.m., Pacific time, on January 21, 2022 (which we refer to as the “termination date”), except that a party may not terminate the merger agreement pursuant to this provision if such party’s action or failure to act constitutes a breach of the merger agreement and has been the primary cause of, or primarily resulted in the failure to satisfy the conditions to the closing of the merger or the failure to consummate the merger by the termination date; or
|
•
|
our stockholders do not adopt the merger agreement at the special meeting, except that a party may not terminate the merger agreement pursuant to this provision if such party’s action or failure to act constitutes a breach of the merger agreement and causes, or results in, the failure to obtain the approval of our stockholders at the special meeting;
|
•
|
by Medallia if:
|
•
|
subject to a 45-day cure period, Parent or Merger Sub has breached or failed to perform in any material respect any of its respective representations, warranties, covenants or other agreements in the merger agreement such that the related closing condition would not be satisfied;
|
•
|
prior to the adoption of the merger agreement by our stockholders: (1) Medallia has received a superior proposal; (2) the Medallia Board (or a committee thereof) has authorized Medallia to enter into an alternative acquisition agreement to consummate the acquisition transaction contemplated by that superior proposal; (3) concurrently with such termination, Medallia pays the applicable termination fee; and (4) Medallia has complied in all material respects with its covenants under the merger agreement with respect to soliciting such superior proposal; or
|
•
|
(1) certain of the closing conditions set forth in the merger agreement have been and continue to be satisfied (other than those conditions that by their terms are to be satisfied at the closing, each of which is capable of being satisfied at the closing) or waived; and (2) Parent and Merger Sub fail to consummate the merger as required;
|
•
|
by Parent if:
|
•
|
subject to a 45-day cure period, Medallia has breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements in the merger agreement such that the related closing condition would not be satisfied;
|
•
|
the Medallia Board has withdrawn its recommendation that our stockholders adopt the merger agreement (except that Parent’s right to terminate in such instance will expire at 5:00 p.m., Pacific time, on the 10th business day following the date on which such right to terminate first arose); or
|
•
|
Medallia has breached or failed to perform in any material respect certain of its commitments related to alternative acquisition proposals.
|
•
|
by Parent, if the Medallia Board changes its recommendation with respect to the merger;
|
•
|
by Parent, if Medallia breaches or fails to perform, in accordance with the merger agreement, in any material respects, its obligations under the alternative solicitation provisions in the merger agreement; or
|
•
|
by Medallia, if the Medallia Board authorizes the acceptance of a superior proposal.
|
•
|
the merger agreement is terminated (1) because the merger is not completed by the termination date; (2) because of Medallia’s failure to obtain the required approval of our stockholders; or (3) subject to a 45-day cure period, because Medallia breaches or fails to perform in any material respect any of its representations, warranties or covenants in a manner that would cause the related closing conditions to not be satisfied;
|
•
|
prior to such termination (but after the date of the merger agreement) a proposal, generally speaking, to acquire at least 50 percent of Medallia’s stock or assets is publicly announced or publicly disclosed by a third party and not withdrawn or otherwise abandoned; and
|
•
|
Medallia subsequently consummates, or enters into a definitive agreement providing for, a transaction involving the acquisition of at least 50 percent of its stock or assets within one year of such termination.
|
•
|
subject to a 45-day cure period, by Medallia, if Parent or Merger Sub breaches or fails to perform in any material respect any of its representations, warranties or covenants in a manner that would cause the related closing conditions to not be satisfied; or
|
•
|
by Medallia, if Parent failed to consummate the merger as required pursuant to, and in the circumstances specified in, the merger agreement.
|
Name of Beneficial Owner
|
| |
Number of
Shares
Beneficially
Owned
|
| |
Percentage
of
Shares
Beneficially
Owned
|
Named Executive Officers and Directors:
|
| |
|
| |
|
Leslie Stretch(1)
|
| |
7,235,958
|
| |
4.3%
|
Roxanne Oulman(2)
|
| |
765,671
|
| |
*
|
Elizabeth Carducci(3)
|
| |
1,452,074
|
| |
*
|
Mikael Ottosson(4)
|
| |
536,022
|
| |
*
|
Jimmy Duan(5)
|
| |
110,614
|
| |
*
|
Robert Bernshteyn(6)
|
| |
19,672
|
| |
*
|
Mitchell Dauerman(7)
|
| |
19,976
|
| |
*
|
Borge Hald(8)
|
| |
9,916,979
|
| |
6.1
|
Leslie Kilgore(9)
|
| |
277,036
|
| |
*
|
Douglas Leone(10)
|
| |
8,711,733
|
| |
5.4
|
Stanley Meresman(11)
|
| |
22,312
|
| |
*
|
Amy Pressman(8)
|
| |
9,916,979
|
| |
6.1
|
Steven Walske(12)
|
| |
507,575
|
| |
*
|
James White(13)
|
| |
3,898
|
| |
*
|
All current directors and executive officers as a group (14 persons)(14)
|
| |
29,579,500
|
| |
17.1
|
Greater than 5% Stockholders:
|
| |
|
| |
|
Entities affiliated with Sequoia Capital(15)
|
| |
32,728,614
|
| |
20.3
|
Champlain Investment Partners, LLC(16)
|
| |
11,921,759
|
| |
7.4
|
Wasatch Advisors, Inc.(17)
|
| |
8,981,686
|
| |
5.6
|
*
|
Represents beneficial ownership of less than one percent of the outstanding shares of our common stock.
|
(1)
|
Consists of (i) 73,776 shares of our common stock held of record by Mr. Stretch; (ii) 7,101,658 shares of our common stock subject to options exercisable within 60 days of August 20, 2021; and (iii) 60,524 shares of our common stock issuable upon vesting of RSUs within 60 days of August 20, 2021.
|
(2)
|
Consists of (i) 172,217 shares of our common stock held of record by Ms. Oulman; (ii) 564,585 shares of our common stock subject to options exercisable within 60 days of August 20, 2021; and (iii) 28,869 shares of our common stock issuable upon vesting of RSUs within 60 days of August 20, 2021.
|
(3)
|
Consists of (i) 785,429 shares of our common stock held of record by Ms. Carducci; (ii) 500,000 shares of our common stock held of record by The Elizabeth Carducci 2020 Irrevocable Trust dtd 12/11/2020 for which Ms. Carducci serves as an investment advisor; (iii) 155,623 shares of our common stock subject to options exercisable within 60 days of August 20, 2021; and (iv) 11,022 shares of our common stock issuable upon vesting of RSUs within 60 days of August 20, 2021.
|
(4)
|
Consists of (i) 30,292 shares of our common stock held of record by Mr. Ottosson; (ii) 497,079 shares of our common stock subject to options exercisable within 60 days of August 20, 2021; and (iii) 8,631 shares of our common stock issuable upon vesting of RSUs within 60 days of August 20, 2021.
|
(5)
|
Consists of (i) 83,530 shares of our common stock held of record by Mr. Duan; and (ii) 27,084 shares of our common stock issuable upon vesting of RSUs within 60 days of August 20, 2021.
|
(6)
|
Consists of 19,672 shares of our common stock held of record by Mr. Bernshteyn.
|
(7)
|
Consists of 19,976 shares of our common stock held of record by Mr. Dauerman.
|
(8)
|
Consists of (i) 1,465,925 shares of our common stock held of record by Mr. Hald; (ii) 1,900,000 shares of our common stock subject to options exercisable within 60 days of August 20, 2021 by Mr. Hald; (iii) 1,979,742 shares of our common stock held of record by Amy Pressman, Mr. Hald’s spouse; (iv) 1,250,000 shares of our common stock that are issuable upon exercise of outstanding options within 60 days of August 20, 2021 by Ms. Pressman; (v) 1,731,023 shares of our common stock held of record by the Borge Hald Irrevocable Trust U/A/D 11/4/2019 First Republic Trust Company of Delaware LLC, Trustee for which Mr. Hald serves as investment advisor; and (vi) 1,590,289 shares of our common stock held of record by the Amy Hald Irrevocable Trust U/A/D 11/4/2019 First Republic Trust Company of Delaware LLC, Trustee for which Ms. Pressman serves as investment advisor.
|
(9)
|
Consists of (i) 247,208 shares of our common stock held of record by Ms. Kilgore and (ii) 29,828 shares of our common stock held of record by the JLK Revocable Trust dated October 13, 2003 for which Ms. Kilgore serves as trustee.
|
(10)
|
Consists of (i) 406,638 shares of our common stock held of record by Mr. Leone; (ii) 1,069,358 shares of our common stock held of record by an estate planning vehicle; and (iii) shares of our common stock held by certain entities affiliated with Sequoia Capital. See footnote (15) below.
|
(11)
|
Consists of 22,312 shares of our common stock held of record by Mr. Meresman.
|
(12)
|
Consists of 507,575 shares of our common stock held of record by Mr. Walske.
|
(13)
|
Consists of 3,898 shares of our common stock held of record by Mr. White.
|
(14)
|
Consists of (i) 17,974,425 shares of our common stock beneficially owned by our executive officers and directors; (ii) 11,468,945 shares of our common stock subject to options exercisable within 60 days of August 20, 2021; and (iii) 136,130 shares of our common stock issuable upon vesting of RSUs within 60 days of August 20, 2021.
|
(15)
|
Based on Forms 4 filed with the SEC on June 1, 2021 by the Sequoia Capital entities, consists of: (i) 18,203,774 shares of our common stock held of record by SC US GF V Holdings, Ltd., or SC US GFV Holdco; (ii) 6,801,123 shares of our common stock held of record by Sequoia Capital U.S. Growth Fund VI, L.P., or SC US GF VI; (iii) 486,555 shares of our common stock held of record by Sequoia Capital U.S. Growth VI Principals Fund, L.P., or SC US GF VI PF; (iv) 6,982,507 shares of our common stock held of record by Sequoia Capital Global Growth Fund, LP, or SC GGF; (v) 253,230 shares of our common stock held of record by Sequoia Capital Global Growth Principals Fund, LP, or SC GGF PF; and (vi) 1,425 shares of our common stock held of record by Denarvor, L.L.C. SC US (TTGP), Ltd. is the general partner of SCGF V Management, L.P., which is the general partner of Sequoia Capital U.S. Growth Fund V, L.P. and Sequoia Capital USGF Principals Fund V, L.P., or collectively, the SC US GF V Funds, which together own 100% of the outstanding shares of SC US GFV Holdco, the general partner of SC U.S. Growth VI Management, L.P., which is the general partner of each of SC US GF VI and SC US GF VI PF, or collectively, the SC US GF VI Funds, and the general partner of SCGGF Management, L.P., which is the general partner of each of SC GGF and SC GGF PF, or collectively, the SC GGF Funds. As a result, SC US (TTGP), Ltd. shares voting and dispositive power with respect to the shares held by the SC US GFV Holdco, SC US GF VI Funds and the SC GGF Funds. SC US SSF 2013 (TTGP), L.L.C. is the general partner of SC U.S. Scout Seed Fund 2013 Management, L.P., which is the general partner of Sequoia Capital U.S. Scout Seed Fund 2013, L.P., which wholly owns Sequoia Capital U.S. Scout Fund IV, L.L.C., which in turn wholly owns Denarvor, L.L.C. Voting and disposition decisions at SC US (TTGP), Ltd. with respect to the shares held by SC US GFV Holdco and the SC US GF VI Funds are made by an investment committee, the members of which include Mr. Leone, a member of our board of directors. Voting and disposition decisions at SC US (TTGP), Ltd. with respect to the shares held by the SC GGF Funds are made by an investment committee consisting of Mr. Leone and James J. Goetz. Voting and disposition decisions of SC US SSF 2013 (TTGP), L.L.C. with respect to the shares held by Denarvor, L.L.C. are made by an investment committee, the members of which include Mr. Leone. The address for these entities is c/o Sequoia Capital, 2800 Sand Hill Road, Suite 101, Menlo Park, California 94025.
|
(16)
|
Based on a Schedule 13G filed with the SEC on February 14, 2021 by Champlain Investment Partners, LLC, or Champlain, which reflects 11,921,759 shares of our common stock beneficially owned and for which Champlain has sole voting and dispositive power with respect to all reported shares. The address for this entity is 180 Battery Street, Burlington, Vermont 05401.
|
(17)
|
Based on a Schedule 13G filed with the SEC on February 11, 2021 by Wasatch Advisors, Inc., or Wasatch, which reflects 8,981,686 shares of our common stock beneficially owned and for which Wasatch has sole voting and dispositive power with respect to all reported shares. The address for this entity is 505 Wakara Way, Salt Lake City, Utah 84108.
|
•
|
Annual Report on Form 10-K for the fiscal year ended January 31, 2021, filed on March 22, 2021;
|
•
|
Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2021, filed on June 4, 2021; and
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•
|
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Term
|
| |
Section Reference
|
Agreement
|
| |
Preamble
|
Alternate Debt Financing
|
| |
6.5(d)
|
Alternative Acquisition Agreement
|
| |
5.3(a)
|
Certificates
|
| |
2.9(c)(i)
|
Clearance Date
|
| |
6.3(a)
|
Closing
|
| |
2.3
|
Closing Date
|
| |
2.3
|
Company
|
| |
Preamble
|
Company Board Recommendation
|
| |
3.3(a)
|
Company Board Recommendation Change
|
| |
5.3(d)(i)
|
Company Disclosure Letter
|
| |
1.4
|
Company Equity-Based Award Consideration
|
| |
2.8(a)
|
Company Liability Limitation
|
| |
8.3(f)(ii)
|
Company Performance Awards Company Plans
|
| |
2.8(a)(ii) 6.11(b)
|
Company Privacy Policy
|
| |
3.16(g)
|
Company SEC Reports
|
| |
3.9
|
Term
|
| |
Section Reference
|
Company Securities
|
| |
3.7(c)
|
Company Stockholder Meeting
|
| |
6.4(a)
|
Comparable Plans
|
| |
6.11(b)
|
Copyrights
|
| |
1.1(mmm)
|
Debt Commitment Letters
|
| |
4.10(a)
|
Debt Financing
|
| |
4.10(a)
|
DGCL
|
| |
Recitals
|
Dissenting Company Shares
|
| |
2.7(c)(i)
|
DTC Payment
|
| |
2.9(d)
|
Effect
|
| |
1.1(aa)
|
Effective Time
|
| |
2.2
|
Electronic Delivery
|
| |
9.14
|
Enforcement Expenses
|
| |
8.3(e)
|
Equity Commitment Letter
|
| |
4.10(a)
|
Equity Financing
|
| |
4.10(a)
|
Event Notice Period
|
| |
5.3(e)(i)(1)
|
Exchange Fund
|
| |
2.9(b)
|
Existing Confidentiality Agreement
|
| |
5.3(a)
|
Fee Letters
|
| |
4.10(a)
|
Financing
|
| |
4.10(a)
|
Financing Letters
|
| |
4.10(a)
|
Guaranty
|
| |
Recitals
|
Guarantor
|
| |
Recitals
|
Indemnified Persons
|
| |
6.10(a)
|
International Employee Plans
|
| |
3.18(a)
|
IP Contracts
|
| |
3.16(d)
|
Labor Agreements
|
| |
3.19(a)
|
Labor Entities
|
| |
3.19(a)
|
Lease
|
| |
3.14(b)
|
Leased Real Property
|
| |
3.14(b)
|
Lookback Date
|
| |
Article III
|
Marks
|
| |
1.1(mmm)
|
Material Customers
|
| |
1.1(sss)(ix)
|
Material Suppliers
|
| |
1.1(sss)(ix)
|
Maximum Annual Premium
|
| |
6.10(c)
|
Merger
|
| |
Recitals
|
Merger Sub
|
| |
Preamble
|
New Debt Commitment Letters
|
| |
6.5(d)
|
New Plans
|
| |
6.11(c)
|
No-Shop Period Start Date
|
| |
5.3(a)
|
Non-Cooperation Notice
|
| |
6.6(b)
|
Notice Period
|
| |
5.3(e)(ii)(3)
|
October Closing Event
|
| |
2.3
|
Old Plans
|
| |
6.11(c)
|
Option Consideration
|
| |
2.8(a)
|
Other Required Company Filing
|
| |
6.3(e)
|
Other Required Parent Filing
|
| |
6.3(f)
|
Owned Company Shares
|
| |
2.7(a)(ii)
|
Parent
|
| |
Preamble
|
Parent Liability Limitation
|
| |
8.3(f)(i)
|
Term
|
| |
Section Reference
|
Party
|
| |
Preamble
|
Patents
|
| |
1.1(mmm)
|
Payment Agent
|
| |
2.9(a)
|
Per Share Price
|
| |
2.7(a)(iii)
|
Proxy Statement
|
| |
6.3(a)
|
Reimbursement Obligations
|
| |
6.6(f)
|
Required Financing Information
|
| |
6.6(a)(iv)
|
Requisite Stockholder Approval
|
| |
3.4
|
SEC Reports
|
| |
Article III
|
Surviving Corporation
|
| |
2.1
|
Tail Policy
|
| |
6.10(c)
|
Termination Date
|
| |
8.1(c)
|
Trade Secrets
|
| |
1.1(mmm)
|
Uncertificated Shares
|
| |
2.9(c)(ii)
|
Voting Agreements
|
| |
Recitals
|
WARN Act
|
| |
3.19(b)
|
|
| |
c/o Thoma Bravo, L.P.
|
|||
|
| |
600 Montgomery Street, 20th Floor
|
|||
|
| |
San Francisco, CA 91444
|
|||
|
| |
Attn:
|
| |
S. Scott Crabill and Peter Stefanski
|
|
| |
Email:
|
| |
scrabill@thomabravo.com and pstefanski@thomabravo.com
|
|
| |
|
| |
|
|
| |
with a copy (which will not constitute notice) to:
|
|||
|
| |
|
| |
|
|
| |
Kirkland & Ellis LLP
|
|||
|
| |
300 N. LaSalle Street
|
|||
|
| |
Chicago, IL 60654
|
|||
|
| |
Attn:
|
| |
Theodore A. Peto, P.C. and Daniel A. Hoppe
|
|
| |
Email:
|
| |
theodore.peto@kirkland.com and dan.hoppe@kirkland.com
|
|
| |
PROJECT METAL PARENT, LLC
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ S. Scott Crabill
|
|||
|
| |
|
| |
Name:
|
| |
S. Scott Crabill
|
|
| |
|
| |
Title:
|
| |
President
|
|
| |
|
| |
|
| |
|
|
| |
PROJECT METAL MERGER SUB, INC.
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ S. Scott Crabill
|
|||
|
| |
|
| |
Name:
|
| |
S. Scott Crabill
|
|
| |
|
| |
Title:
|
| |
President
|
|
| |
|
| |
|
| |
|
|
| |
MEDALLIA, INC.
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
/s/ Leslie Stretch
|
|||
|
| |
|
| |
Name:
|
| |
Leslie Stretch
|
|
| |
|
| |
Title:
|
| |
President and Chief Executive Officer
|
1)
|
Reviewed certain publicly available financial statements and other business and financial information of the Company;
|
2)
|
Reviewed certain internal financial statements and other financial and operating data concerning the Company;
|
3)
|
Reviewed certain financial projections prepared by the management of the Company and certain extrapolations prepared with guidance from the management of the Company (which were reviewed and approved for our use by the management of the Company) (collectively, the “Financial Projections”);
|
4)
|
Discussed the past and current operations and financial condition and the prospects of the Company with senior executives of the Company;
|
5)
|
Reviewed the reported prices for and trading activity of the Company Common Stock;
|
6)
|
Compared the financial performance of the Company and the prices and trading activity of the Company Common Stock with that of certain other publicly traded companies comparable with the Company, and their securities;
|
7)
|
Reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;
|
8)
|
Participated in certain discussions and negotiations among representatives of the Company, Parent and their financial and legal advisors;
|
9)
|
Reviewed the Merger Agreement; the debt commitment letters from debt financing sources to the Parent, substantially in the form of the drafts dated July 25, 2021 (the “Debt Commitment Letters”) and the draft equity commitment letter from Thoma Bravo Fund XIV, L.P. to the Parent, substantially in the form of the draft dated July 24, 2021 (the “Equity Commitment Letter” and, together with the Debt Commitment Letters, the “Commitment Letters”); a guaranty made by Thoma Bravo Fund XIV, L.P. substantially in the form of the draft dated July 24, 2021; and certain related documents; and
|
10)
|
Performed such other analyses, reviewed such other information and considered such other factors as we have deemed appropriate.
|
|
| |
Very truly yours,
|
|||
|
| |
|
|||
|
| |
MORGAN STANLEY & CO. LLC
|
|||
|
| |
|
|||
|
| |
By:
|
| |
/s/ Taylor Henricks
|
|
| |
|
| |
Taylor Henricks
|
|
| |
|
| |
Managing Director
|
|
| |
|
| |
650 Page Mill Road
|
||||||
|
| |
|
| |
Palo Alto, CA 94304-1050
|
||||||
|
| |
|
| |
Attn:
|
| |
Rezwan D. Pavri
|
|||
|
| |
|
| |
|
| |
Martin W. Korman
|
|||
|
| |
|
| |
|
| |
Douglas K. Schnell
|
|||
|
| |
|
| |
Fax:
|
| |
(650) 493-6811
|
|||
|
| |
|
| |
Email:
|
| |
rpavri@wsgr.com
|
|||
|
| |
|
| |
|
| |
mkorman@wsgr.com
|
|||
|
| |
|
| |
|
| |
dschnell@wsgr.com
|
|
| |
MEDALLIA, INC.
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
|
|||
|
| |
|
| |
Name:
|
| |
Leslie Stretch
|
|
| |
|
| |
Title:
|
| |
President and Chief Executive Officer
|
|
| |
|
| |
|
| |
|
|
| |
PROJECT METAL PARENT, LLC
|
||||||
|
| |
|
| |
|
| |
|
|
| |
By:
|
| |
|
|||
|
| |
|
| |
Name:
|
| |
|
|
| |
|
| |
Title:
|
| |
|
|
| |
|
| |
|
| |
|
|
| |
[STOCKHOLDER]
|
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|
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