Date: July 2, 2010 To: Intelligroup, Inc. Optionees Subject: Important Stock Option Information — 1996 Stock Plan
Exhibit (a)(5)(xi)
Date:
|
July 2, 2010 | |
To:
|
Intelligroup, Inc. Optionees | |
Subject:
|
Important Stock Option Information — 1996 Stock Plan |
On June 14, 2010, Intelligroup, Inc. (the “Company”) entered into an Agreement and Plan of
Merger (the “Agreement”) with NTT Data Corporation (“Parent”) and Mobius Subsidiary Corporation,
which is an indirect wholly-owned subsidiary of Parent (“Purchaser”), which, if completed, will
result in the Company becoming a wholly-owned subsidiary of Parent (the “Merger”). This letter is
being provided to inform you about (1) the pending Merger between the Company, Parent and
Purchaser, and (2) the effect the Merger will have on your outstanding options (the “Options”)
under the 1996 Stock Plan (the “1996 Plan”).
Transaction
Pursuant to the Agreement, on June 21, 2010, Purchaser commenced a cash tender offer (the
“Tender Offer”) to acquire all of the shares of common stock of the Company that are issued and
outstanding. The Agreement contemplates that following the expiration of the Tender Offer (the
“Tender Offer Closing”), Purchaser will be merged with and into the Company, with the Company
surviving the Merger as a wholly-owned subsidiary of the Parent (the “Surviving Corporation”). The
Merger will be consummated as promptly as practicable after the expiration of the Tender Offer,
subject to the terms and conditions set forth in the Agreement (the “Merger Closing”). The Tender
Offer Closing and the Merger Closing are each subject to certain terms and conditions described in
the Agreement and other documents relating to the Tender Offer and Merger that are publicly
available for your review prior to making a decision with respect to your options. You may obtain
information regarding your options by contacting Xxxxxxx Xxxxxxxxxx, by email,
xxxxxxx.xxxxxxxxxx@xxxxxxxxxxxx.xxx, or phone 000-000-0000.
Blackout Period
Pursuant to the Company’s Xxxxxxx Xxxxxxx Policy, on June 16, 2010, the Company entered into a
“blackout period” in connection with the public release of the financial results for the Company’s
second fiscal quarter. The blackout period will end three trading days after the earnings release,
which release is expected to occur in late July 2010. During the blackout period, you will be
permitted to exercise your options (to the extent exercisable) for cash. However, during the
blackout period, you may not sell the underlying shares of common stock you acquire as a result of
exercising your options, and you may not engage in a cashless exercise of an option through a
broker (because this entails selling a portion of the underlying common stock to cover the costs of
exercise). If you exercise your options, you will be required to provide cash to the Company in
respect of the exercise price of the options and any related withholding taxes.
Treatment of Options
In connection with the Merger, your Options under the 1996 Plan will not be assumed by Parent
or the Surviving Corporation. As a result, any such Options outstanding immediately prior to the
Effective Time (as such term is defined in the Agreement) will become fully vested (contingent upon
the Merger Closing) in accordance with the terms and conditions of the 1996 Plan and your
individual option agreements and will be cancelled at the Effective Time. As described in further
detail below, you have two alternatives with respect to your Options. You may elect to either (1)
do nothing and your Options will be converted automatically into the right to receive an amount in
cash as of the Effective Time or (2) exercise your Options, to the extent then exercisable, prior
to the Effective Time.
Please note that to the extent you do not exercise your Options (to the extent they are
exercisable), they will automatically be cancelled as of the Effective Time and converted into the
right to receive the cash payment described below. Additionally, please note that if you terminate
your service and your post-termination exercise period specified in your applicable option
agreement expires prior to the Effective Time, your Options will no longer be outstanding and you
will not be entitled to the cash payment described below or any other rights or benefits.
Vested and Exercisable Options
To the extent you hold Options that are both vested and exercisable (“Vested Options”), you
have the following choices:
(1) You may exercise your Vested Options (subject to the blackout period restrictions
described above) and tender your shares of common stock of the Company in the Tender Offer.
However, please note that any exercise of Vested Options should be completed sufficiently in
advance of the Tender Offer Closing to assure that you will have sufficient time to comply with the
procedures for tendering shares of Company common stock. You may receive tender instructions by
contacting the Chief Financial Officer of the Company at the address provided below;
(2) You may exercise your Vested Options (subject to the blackout period restrictions
described above) prior to the Merger Closing or prior to the Tender Offer Closing (but, in the
latter case, choose not to tender your shares in the Tender Offer). If you exercise such Options
in accordance with the preceding sentence and you hold shares of common stock of the Company at the
Merger Closing, you will receive the same amount of cash per share ($4.65 per share (“Merger
Consideration”)) that you would have received had you tendered your shares in the Tender Offer,
without any interest being paid on such amount; or
(3) You may decide not to exercise your Vested Options, in which case each such Option will
be canceled in the Merger and converted into the right to receive an amount in cash (referred to
herein as the “Cash Payment”) equal to (i) the excess, if any, of the Merger Consideration per
share over the exercise price of the Option, multiplied by (ii) the number of shares of Company
common stock subject to the Vested Option, less applicable withholding taxes.
Unvested and Unexercisable Options
To the extent you hold unvested and unexercisable Options under the 1996 Plan, pursuant to
Section 13 of the 1996 Plan, you will have the right to exercise your Options (subject to the
-2-
blackout period restrictions described above) any time during the 15-day period prior to the
Merger Closing. The exercise of the Options will be subject to, and effective as of immediately
prior to, the Merger Closing. If you do not exercise your Options prior to the end of the 15-day
period, each such Option will be canceled in the Merger and converted into the right to receive the
Cash Payment.
Please note that if the exercise price of your Options is greater than $4.65 (the
consideration payable to holders of Company common stock in the Tender Offer and the Merger), you
will realize no benefit by exercising your Options prior to the Effective Time.
U.S. Tax Implications
You should consult your own tax advisor as to the specific tax implications to you of the
Tender Offer and the Merger with respect to your Options, including the applicability and effect of
federal, state, local and foreign tax laws. Your federal, state, local and foreign tax
consequences depend upon your unique circumstances.
Cash Payment. If you do not exercise your Options prior to the Effective Time, your
outstanding Options will be cancelled at the Effective Time and converted automatically into the
right to receive the Cash Payment. If you are a U.S. taxpayer, you will recognize ordinary income
in an amount equal to your Cash Payment at the time the payment is made, regardless of whether your
Options were incentive stock options or nonqualified stock options. Such income will constitute
wages and will therefore be subject to withholding of applicable U.S. federal and state income and
employment withholding taxes.
Option Exercise. To the extent you exercise incentive stock options, your receipt of
the cash consideration for the Company common stock received upon such exercise in connection with
either the Tender Offer or the Merger will be a disqualifying disposition of such Company common
stock. If you are a U.S. taxpayer, upon the disqualifying disposition, you will recognize ordinary
income equal to (1) the excess, if any, of $4.65 over the exercise price of your Option, multiplied
by (2) the number of shares for which you exercised your Option. Such income will not be subject
to withholding of applicable U.S. federal and state income and employment withholding taxes.
However, such income will constitute wages and you will be responsible for paying the resulting
applicable U.S. federal and state income taxes. Any additional gain or loss will generally be
short-term capital gain or loss.
To the extent you exercise nonqualified stock options, if you are a U.S. taxpayer, you will
recognize ordinary income equal to the excess, if any, of (1) the fair market value of those shares
of Company common stock at the time of exercise over (2) the aggregate exercise price paid for
those shares. If you were an employee on the date of your Option grant, such income will
constitute wages subject to withholding of applicable federal and state income and employment
withholding taxes. Any additional gain or loss resulting from the sale of the shares in the Tender
Offer or upon receipt of the Merger Consideration in the Merger (or upon another disposition the
shares if the Tender Offer and Merger are not completed) will generally be short-term capital gain
or loss.
Instructions
-3-
| • | If you wish to exercise your options, please complete and return Exhibit A to the Chief Financial Officer of the Company, Xxxx Xxxxxx, in person or by certified mail to Intelligroup Global Headquarters, 0 Xxxxxxxxxxxx Xxx, Xxxxx #000, Xxxxxxxxx, XX 00000 prior to the Merger Closing (or, if you have Vested Options and wish to tender shares in the Tender Offer, sufficiently in advance of the Tender Offer Closing). Please note that if you hold an Option that is partially vested (without regard to any vesting acceleration that would occur in connection with the Merger), you will need to complete separate exercise notices with respect to the portion of the Option that is vested and the portion of the Option that will accelerate in connection with the Merger, if you wish to exercise your entire Option. | ||
| • | If you DO NOT wish to exercise your options, you do not need to take any action at this time. |
Important Legal Information
This letter is neither an offer to purchase, nor a solicitation of an offer to sell, any
securities. The tender offer to purchase shares of Intelligroup common stock is only being made
pursuant to a Tender Offer Statement on Schedule TO containing an offer to purchase, forms of
letters of transmittal and other documents relating to the tender offer (the “Tender Offer
Statement”), which Mobius Subsidiary Corporation previously filed with the Securities and Exchange
Commission (the “SEC”) and mailed to Intelligroup shareholders. In addition, Intelligroup
previously filed a Solicitation / Recommendation Statement with respect to the tender offer (the
“Recommendation Statement”). Security holders of Intelligroup are advised to read the Tender Offer
Statement and Recommendation Statement, because they contain important information about the tender
offer. Investors and security holders of Intelligroup also are advised that they may obtain free
copies of the Tender Offer Statement and other documents filed by Mobius Subsidiary Corporation
with the SEC and the Recommendation Statement and other documents filed by Intelligroup on the
SEC’s website at xxxx://xxx.xxx.xxx.
Attachments:
Exhibit A — Notice of Exercise of Stock Option
Exhibit B — 1996 Plan
-4-
EXHIBIT A
NOTICE OF EXERCISE OF STOCK OPTION
TO:
|
Intelligroup, Inc. | |
DATE:
|
, 2010 | |
RE:
|
Exercise of Stock Option |
I hereby exercise my option to purchase shares of Common Stock at $ per
share (total exercise price of $ ).
Attached is a check payable to Intelligroup, Inc. for the total exercise price of the shares
being purchased, and applicable withholding taxes.
| Sincerely, |
||||
| (Signature) | ||||
| (Print or Type Name) | ||||
| Letter and consideration received on this ___ day of , 2010 Intelligroup, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
-5-
EXHIBIT B
1996 STOCK PLAN
-6-
