This Agreement (this "Agreement") is made and entered into as of
February 25, 2008, by and between Sybase, Inc. (the "Company" or "Sybase"), and
the entities listed on SCHEDULE A hereto (collectively, the "Xxxxxxx Group")
(each of the Company and the Xxxxxxx Group, a "Party" to this Agreement, and
collectively, the "Parties").
RECITALS
A. Of the outstanding common stock of the Company, par value $0.001 per
share (the "Common Stock"), the Xxxxxxx Group beneficially owns, in the
aggregate, 5,407,300 shares (the "Share Amount"), and, through its affiliate
Castlerigg Master Investments, Ltd., had previously delivered a notice of intent
to nominate three directors for election to the Sybase Board of Directors (the
"Sybase Board") and indicated that it intends to initiate a proxy solicitation
in respect thereof (the "Proxy Solicitation");
B. The Parties have agreed that the Xxxxxxx Group shall withdraw its
nominees to the Sybase Board and terminate the Proxy Solicitation and that the
Xxxxxxx Group will not present any nominees or proposals at the Company's 2008
Annual Meeting of Stockholders (including any adjournment or postponement
thereof, the "2008 Annual Meeting");
C. The Xxxxxxx Group has agreed to certain additional restrictions on
its activities and obligations with respect to the Company prior to the end of
the Standstill Period (as defined below) and to vote in favor of the Company's
nominees for directors at the 2008 Annual Meeting and the Company's 2009 Annual
Meeting of Stockholders (the "2009 Meeting");
D. The Company has agreed to conduct a "Dutch auction" self-tender
offer to purchase $300,000,000 worth of Common Stock (the "Tender Offer") as
promptly as practicable after the date hereof, and the Company's existing
authorization to repurchase approximately $82.9 million of Common Stock will
remain outstanding (the "Existing Authorization").
E. The Company and the Xxxxxxx Group desire, in connection with the
foregoing, to make certain covenants and agreements with one another pursuant to
this Agreement.
NOW THEREFORE, in consideration of the covenants and premises set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as
follows:
1. Upon issuance of the press release referred to in Section 8, the
Xxxxxxx Group withdraws its nomination of Xxxx Xxxxxxxx, Xxxx X. XxXxxxxxx and
Xxxxxxxx X. Xxxxx (the "Xxxxxxx Nominees") for election at the 2008 Annual
Meeting, and withdraws and terminates the Proxy Solicitation. The Xxxxxxx Group
shall take any actions necessary to terminate the Proxy Solicitation.
2. As promptly as practicable following the date hereof, the Company
will conduct and complete the Tender Offer. The Tender Offer shall provide for a
purchase in the range of $28 to $30, and shall have an initial expiration date
no later than April 15, 2008. The Existing Authorization will remain outstanding
after the date hereof, and the Company shall use its reasonable best efforts to
complete the repurchases in the amount of the Existing Authorization prior to
the completion of Company's 2009 Annual Meeting.
3. No matter shall be presented for a vote at the 2008 Annual Meeting
by the Company other than re-election of incumbent directors and the
ratification of auditors. The Xxxxxxx Group will cause all shares of Common
Stock beneficially owned by it and its controlled affiliates to be present for
quorum purposes and to be voted at the 2008 Annual Meeting and 2009 Meeting, (a)
in favor of election of the nominees recommended by the Company's Board of
Directors (the "Board Nominees") at the 2008 Annual Meeting and at the 2009
Annual Meeting; and (b) against any nominee that is not recommended by Company's
Board of Directors at the 2008 Annual Meeting and at the 2009 Annual Meeting.
For purposes of this Agreement, "affiliate" has the meaning set forth in Rule
12b-2 promulgated by the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
4. During the period (the "Standstill Period") commencing with the
execution of this Agreement and ending on the earlier to occur of (a) the
completion of the 2009 Annual Meeting, and (b) a material breach by the Company
of its obligations under this Agreement, neither the Xxxxxxx Group nor any of
its controlled affiliates shall, without the prior written consent of the
Company:
(a) effect or seek to effect (including, without limitation,
by entering into any discussions, negotiations, agreements or understandings
with any third person), offer or propose (whether publicly or otherwise) to
effect, or cause or participate in, or in any way assist or facilitate any other
person to effect or seek, offer or propose (whether publicly or otherwise) to
effect or participate in, (i) any acquisition of any securities (or beneficial
ownership thereof), or rights or options to acquire any securities (or
beneficial ownership thereof), if as a result thereof the Xxxxxxx Group would
beneficially own, together with its controlled affiliates, or any 13D Group (as
defined below) in which it participates, in excess of the Share Amount in the
aggregate, or any assets, business, subsidiary or division of the Company or any
of its subsidiaries, (ii) any tender offer or exchange offer, merger,
acquisition or other business combination involving the Company or any of its
subsidiaries, or (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries; provided, however, that nothing herein shall limit the
ability of the Xxxxxxx Group to (A) transfer any securities of the Company
pursuant to the terms of Section 5 hereof or (B) enter into any swap or other
arrangement whereby it acquires the economic consequences of ownership of the
Common Stock without also acquiring any of the voting or other rights,
privileges or powers associated with the ownership of the underlying Common
Stock;
(b) other than as provided in this Agreement, seek or propose
to influence or control the management or the policies of the Company or to
obtain representation on the Sybase Board, directly or indirectly engage in any
activities in opposition to the recommendation of the Sybase Board (including
the recommendation of the Board Nominees at the 2008 Annual Meeting and the 2009
Annual Meeting), submit any proposal (whether pursuant to Rule 14a-8 or
otherwise) or nomination of a director or directors for stockholder action, or
solicit, or encourage or in any way participate in the solicitation of, any
proxies or consents with respect to any voting securities of the Company;
provided, however, that the foregoing shall not prohibit the Xxxxxxx Group from
(i) making public statements (including statements contemplated by Rule
14a-1(l)(2)(iv) under the Exchange Act), or (ii) engaging in discussions with
other stockholders (so long as the Xxxxxxx Group does not seek directly or
indirectly, either on its own or another's behalf, the power to act as proxy for
a security holder and does not furnish or otherwise request, or act on behalf of
a person who furnishes or requests, a form of revocation, abstention, consent or
authorization, and such discussions are in compliance with subsection (d)
hereof) (clause (i) and (ii), together, "Permitted Actions") with respect to any
transaction that has been publicly announced by the Company involving (A) a
recapitalization of the Company, (B) an acquisition, disposition or sale of
assets or a business by the Company with respect to a transaction (or series of
transactions) where the consideration to be received or paid is in excess of
$250,000,000 in the aggregate, or (C) a change of control of the Company (each,
a "Material Transaction");
(c) make any public announcement with respect to, or publicly
offer to effect, seek or propose (with or without conditions) a merger,
consolidation, business combination or other extraordinary transaction with or
involving the Company or any of its subsidiaries or any of its or their
securities or assets; provided, however, that nothing in this subsection (c)
shall prevent the Xxxxxxx Group from taking Permitted Actions with respect to a
Material Transaction;
(d) (i) form, join or in any way participate in a
"partnership, limited partnership, syndicate or other group" as defined in
Section 13(d)(3) of the Exchange Act, and the rules and regulations promulgated
thereunder, other than a "group" that includes only all or some lesser number of
persons identified as members of the Xxxxxxx Group with respect to any of the
Company's securities (a "13D Group"), or (ii) deposit any of the Company's
securities in a voting trust or similar arrangement or subject any of the
Company's securities to any voting agreement or pooling arrangement; or (iii)
enter into any negotiations, arrangements or understandings with any third
parties, other than members of the Xxxxxxx Group solely with respect to the
existing members of the Xxxxxxx Group, in connection with becoming a "group" as
defined in Section 13(d)(3) of the Exchange Act with respect to any of the
Company's securities; or
(e) publicly seek or request permission to do any of the
foregoing, request to amend or waive any provision of this paragraph (including,
without limitation, any of clauses (a)-(d) hereof), or make or seek permission
to make any public announcement with respect to any of the foregoing.
5. The Xxxxxxx Group agrees that, during the Standstill Period, it
shall not offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend (other than in a customary commingled brokerage
account in the ordinary course of business), or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable, directly or indirectly, for
Common Stock (including without limitation the Company's 1.75% Convertible Notes
Due 2025), whether any such transaction described above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise (any
such action a "Transfer"), in each case without the prior written consent of the
Company; provided that the foregoing shall not restrict the Xxxxxxx Group from
(i) a Transfer of any shares to a controlled affiliate which agrees to be bound
by the terms of this Agreement and executes a joinder agreement to this
Agreement in the form attached hereto as EXHIBIT B, (ii) subject to compliance
with law, the Transfer of shares in either (1) brokers' transactions (within the
meaning of Rule 144(g) of the Securities Act of 1933 (the "Securities Act")),
but not in transactions directly with a market maker (as defined in Section
3(a)(38) of the Exchange Act), or (2) private Transfers other than transactions
with a market maker that comply with the requirements of Rule 144(f) of the
Securities Act, in a single Transfer or series of related Transfers, which would
not result in the ultimate purchaser of such shares of Common Stock from the
Xxxxxxx Group beneficially owning, together with its affiliates, following such
Transfer or Transfers, in excess of 1% of the Common Stock in the aggregate, or
(3) in a transaction with a market maker that complies with requirements of Rule
144(f) of the Securities Act other than a transaction in which the Xxxxxxx Group
has actual knowledge that the ultimate purchaser of such shares of Common Stock
from the Xxxxxxx Group will beneficially own, together with its affiliates,
following such Transfer or Transfers, in excess of 5% of the Common Stock in the
aggregate, or (iii) Transfers made pursuant to (x) tender offers in respect of
the Common Stock made by the Company or any third party, or (y) repurchase
offers in respect of the Common Stock made directly with the Company or a broker
acting on behalf of the Company.
6. It is understood that in consideration of the mutual promises and
covenants contained herein, and after consultation with their respective
counsel, the Company, on the one hand, and the Xxxxxxx Group, on the other hand,
on behalf of themselves and for all of their past and present affiliated,
associated, related, parent and subsidiary companies, joint venturers and
partnerships, successors, assigns, and the respective owners, officers,
directors, agents, employees, shareholders, consultants and attorneys of each of
them
(collectively "Affiliated Persons"), irrevocably and unconditionally release,
acquit and forever discharge the other and all of their Affiliated Persons, from
any and all causes of action, claims, actions, rights, judgments, obligations,
damages, demands, losses, controversies, contentions, complaints, promises,
accountings, bonds, bills, debts, dues, sums of money, expenses, specialties and
fees and costs (whether direct, indirect or consequential, incidental or
otherwise including, without limitation, attorney's fees or court costs, of
whatever nature) incurred in connection therewith of any kind whatsoever,
whether known or unknown, suspected or unsuspected, in their own right and
derivatively, in law or in equity or liabilities of whatever kind or character
(the "Claims"), which the Parties have or may have against one another based
upon events occurring prior to the date of the execution of this Agreement
arising out of or related to the proxy solicitations being conducted by each of
the Company and the Xxxxxxx Group in connection with the 2008 Annual Meeting
(the "Released Matters"). The Parties acknowledge that this general release of
claims includes, but is not limited to, any and all statutory and common law
claims for, among other things, fraud and breach of fiduciary duty based upon
events occurring prior to the date of the execution of this Agreement. The
Parties intend that the foregoing release be broad with respect to the Released
Matters, provided, however, this release and waiver of Claims shall not include
claims to enforce the terms of this Agreement.
7. The Parties do hereby expressly waive and relinquish all rights and
benefits afforded by California Civil Code Section 1542, and do so understanding
and acknowledging the significance and consequences of such specific waiver of
California Civil Code Section 1542.
The Parties acknowledge and understand that they are being represented
in this matter by counsel of their own choice, and acknowledge that they are
familiar with the provisions of California Civil Code Section 1542, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
Thus, notwithstanding these provisions of law, the Parties expressly
acknowledge and agree that this Section 7 is also intended to include in its
effect, without limitation, all such claims which they do not know or suspect to
exist at the time of the execution of this Agreement, and that this Agreement
contemplates the extinguishment of those claims.
8. (a) Promptly following the execution of this Agreement, (i)
the Company and the Xxxxxxx Group shall jointly issue a press release mutually
acceptable to the Parties announcing the terms of this Agreement, in the form
attached hereto as EXHIBIT A and (ii) the Xxxxxxx Group shall file with the SEC
an amendment to the Schedule 13D originally filed on October 12, 2007 indicating
that it has withdrawn its nomination of the Xxxxxxx Nominees and it will not
solicit proxies for the 2008 Annual Meeting and 2009 Annual Meeting and
including a copy of this Agreement as an exhibit thereto.
(b) During the Standstill Period, neither the Company nor the
Xxxxxxx Group, nor any of their respective affiliates will, directly or
indirectly, make or issue or cause to be made or issued any disclosure,
announcement or statement (including without limitation the filing of any
document or report with the SEC or any other governmental agency or any
disclosure to any journalist, member of the media or securities analyst)
concerning the other Party or any of its controlled affiliates, which disparages
such Party or any of its controlled affiliates as individuals (provided that
each Party, after consultation with counsel, may make any disclosure that it
determines in good faith is required to be made under applicable law; and
provided further, that the foregoing shall not prohibit the Xxxxxxx Group from
taking a Permitted Action with respect to any Material Transaction).
(c) The Xxxxxxx Group agrees during the Standstill Period to
refrain from taking action which is intended to encourage any other stockholder
of the Company to engage in any actions that if taken by the Xxxxxxx Group would
violate Sections 4(a)(ii) or (iii) or Section 4(b) of this Agreement.
9. The Xxxxxxx Group agrees it will cause its controlled affiliates to
comply with the terms of this Agreement.
10. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
telecopy, when such telecopy is transmitted to the telecopy number set forth
below and the appropriate confirmation is received or (b) if given by any other
means, when actually received during normal business hours at the address
specified in EXHIBIT C or such other address as may be given pursuant to this
notice provision.
11. This Agreement constitutes the entire agreement between the Parties
with respect to the subject matter hereof and supersedes all prior agreements or
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than the Nondisclosure and Non-Use Agreement, dated
as of February 14, 2008, between the Company and the Xxxxxxx Group, as amended
(the "Confidentiality Agreement"), as such agreement may be amended from time to
time, which shall survive in accordance with its terms. No modifications of this
Agreement can be made except in writing signed by an authorized representative
of each of the Company and the Xxxxxxx Group. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns, and nothing in this Agreement is intended to confer on
any person other than the parties hereto or their respective successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
12. If at any time subsequent to the date hereof, any provision of this
Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon the
legality or enforceability of any other provision of this Agreement.
13. Each Party agrees to take or cause to be taken such further
actions, and to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments, and to obtain such consents, as
may be reasonably required or requested by the other party in order to
effectuate fully the purposes, terms and conditions of this Agreement.
14. Each of the Parties acknowledges and agrees that irreparable injury
to the other Parties hereto would occur in the event any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached and that such injury would not be adequately compensable
in damages. It is accordingly agreed by each of the Parties that a Party so
moving (the "Moving Party") shall each be entitled to specific enforcement of,
and injunctive relief to prevent any violation of, the terms hereof and the
other Parties hereto will not take action, directly or indirectly, in opposition
to the Moving Party seeking such relief on the grounds that any other remedy or
relief is available at law or in equity.
15. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without reference to the
conflict of laws principles thereof. Each of the Parties hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement and
the rights and obligations arising hereunder, or for recognition and enforcement
of any judgment in respect of this
Agreement and the rights and obligations arising hereunder brought by the other
party hereto or its successors or assigns, shall be brought and determined
exclusively in the Delaware Court of Chancery and any state appellate court
therefrom within the State of Delaware (or, if the Delaware Court of Chancery
declines to accept jurisdiction over a particular matter, any state or federal
court within the State of Delaware). Each of the Parties hereto hereby
irrevocably submits with regard to any such action or proceeding for itself and
in respect of its property, generally and unconditionally, to the personal
jurisdiction of the aforesaid courts and agrees that it will not bring any
action relating to this Agreement in any court other than the aforesaid courts.
16. This Agreement may be executed in one or more counterparts which
together shall constitute a single agreement.
PLEASE READ CAREFULLY THIS AGREEMENT THAT INCLUDES
A RELEASE OF KNOWN AND UNKNOWN CLAIMS
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused the same to be executed by its duly authorized
representative as of the date first above written.
SYBASE, INC.
By: /s/ Xxxx X. Xxxx
-----------------------
Name: Xxxx X. Xxxx
Title: Chairman, CEO and President
[SIGNATURE PAGE TO SETTLEMENT AGREEMENT]
PLEASE READ CAREFULLY THIS AGREEMENT THAT INCLUDES
A RELEASE OF KNOWN AND UNKNOWN CLAIMS
XXXXXXX ASSET MANAGEMENT CORP.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
CASTLERIGG MASTER INVESTMENTS LTD.
By: XXXXXXX ASSET MANAGEMENT CORP,
AS INVESTMENT MANAGER
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
CASTLERIGG INTERNATIONAL LIMITED
By: XXXXXXX ASSET MANAGEMENT CORP,
AS INVESTMENT MANAGER
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
CASTLERIGG INTERNATIONAL HOLDINGS LIMITED
By: XXXXXXX ASSET MANAGEMENT CORP,
AS INVESTMENT MANAGER
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
CASTLERIGG GLOBAL SELECT FUND, LIMITED
By: XXXXXXX ASSET MANAGEMENT CORP,
AS INVESTMENT MANAGER
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
CGS, LTD.
By: XXXXXXX ASSET MANAGEMENT CORP,
AS INVESTMENT MANAGER
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO SETTLEMENT AGREEMENT]
PLEASE READ CAREFULLY THIS AGREEMENT THAT INCLUDES
A RELEASE OF KNOWN AND UNKNOWN CLAIMS
CASTLERIGG GS HOLDINGS, LTD.
By: XXXXXXX ASSET MANAGEMENT CORP,
AS INVESTMENT MANAGER
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
[SIGNATURE PAGE TO SETTLEMENT AGREEMENT]
SCHEDULE A
XXXXXXX GROUP
Xxxxxxx Asset Management Corp.
Castlerigg Master Investments Ltd.
Castlerigg International Limited
Castlerigg International Holdings Limited
Castlerigg Global Select Fund, Limited
CGS, Ltd.
Castlerigg GS Holdings, Ltd.
EXHIBIT A
FORM OF PRESS RELEASE
[OMITTED]
EXHIBIT B
FORM OF JOINDER AGREEMENT
The undersigned hereby agrees, effective as of the date hereof,
to become a party to that certain Agreement, dated as of February 25, 2008, by
and among Sybase, Inc., a Delaware corporation (the "Company"), and the entities
listed on SCHEDULE A thereto (collectively, the "Xxxxxxx Group") (the
"Settlement Agreement"). By executing this joinder agreement, the undersigned
hereby agrees to be, and shall be, deemed a "Party" and a member of the "Xxxxxxx
Group" for all purposes of the Settlement Agreement, entitled to the rights and
subject to the obligations thereunder with respect to the securities of the
Company acquired from the Xxxxxxx Group.
The address and facsimile number to which notices may be sent
to the undersigned is as follows:
-------------------------
-------------------------
Facsimile No.:
-----------------
-----------------------
Name:
Date:
-------------------
EXHIBIT C
ADDRESSES FOR NOTICE
if to the Company:
Sybase, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
if to the Sandell Group:
Xxxxxxx Asset Management Corp.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxxxx
