iPass Inc. Redwood Shores, California 94065
Exhibit 99.1
iPass
Inc.
0000
Xxxxxx Xxxxxxx
Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
June 2,
2009
Foxhill
Opportunity Master Fund, L.P.
c/o
Foxhill Capital Partners LLC
000
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx,
Xxx Xxxxxx 00000
Attention: Xxxx
Xxxxxx
The following sets forth the agreement
(the “Agreement”) between Foxhill Opportunity Master Fund, L.P. (“FOMF”) and its
affiliates listed in the signature blocks below (collectively, “Foxhill”) and
iPass Inc. (“iPass”):
|
|
1.
|
Xx.
Xxxxxxx X. Xxxxx will be appointed to the Board of Directors of iPass (the
“Board”) effective on the first business day following the execution of
this Agreement by all parties hereto, to fill a vacancy existing on the
Board, and will be appointed to the class of directors the term of which
expires at the 2009 annual meeting of stockholders (the “2009 Annual
Meeting”). Xx. Xxxxx will serve in such capacity until the 2009
Annual Meeting or until his successor is duly elected and qualified,
subject to the terms of this Agreement. Xx. Xxxxx will also be
appointed to the Corporate Governance and Nominating Committee and
Compensation Committee of the Board. Xx. Xxxxx will be the
initial Foxhill Designee (as that term is defined below). Xxxx
Xxxxxx will be moved into the class of directors the term of which expires
at the 2010 annual meeting of stockholders (the “2010 Annual
Meeting”).
|
|
|
2.
|
iPass
hereby covenants and agrees that, provided that Xx. Xxxxx delivers to
iPass the conditional resignation required by iPass’ bylaws, Xx. Xxxxx
will be nominated by the Board for election at the 2009 Annual Meeting, to
the class the term of office of which will expire at the 2012 annual
meeting of stockholders. Prior to the 2009 Annual Meeting, and
provided that Xx. Xxxxx delivers to iPass the conditional resignation
required by iPass’ bylaws, (i) the Board shall recommend that iPass’
stockholders vote in favor of Xx. Xxxxx at the 2009 Annual Meeting and
(ii) iPass shall solicit proxies for the election of Xx. Xxxxx at the 2009
Annual Meeting.
|
|
|
3.
|
Xxxx
Xxxxx is not standing for election at the 2009 Annual
Meeting. One (1) incumbent director on the Board in the class
of directors the term of office of which will expire at the 2010 Annual
Meeting will resign as of the 2009 Annual Meeting and Xxxx Xxxxxxxx will,
subject to such person consenting to such appointment, be appointed to the
Board no later than fourteen (14) days following the 2009 Annual Meeting
to the class of directors the term of office of which expires at the 2010
Annual Meeting.
|
|
|
4.
|
The
size of the Board will not be increased to more than ten (10) directors at
any time before the 2010 Annual Meeting, unless approved by a majority of
the independent directors and the Foxhill
Designee.
|
|
|
5.
|
For
so long as Foxhill continues to own not less than 5% of the outstanding
shares of iPass common stock: if the Foxhill Designee is unable
or unwilling to continue to serve on the Board and as a result there is a
vacancy created on the Board, the Board shall, consistent with its
fiduciary duties, appoint a replacement director designated by FOMF to
fill the resulting vacancy, provided that
such replacement director is reasonably acceptable to iPass (and the Board
will not unreasonably withhold acceptance of any such replacement
director); and, provided that such replacement director delivers to iPass
the conditional resignation required by iPass’ bylaws, iPass will use its
commercially reasonable efforts to secure the election to the Board of
such replacement director. iPass hereby confirms that Xx. Xxxxx
is reasonably acceptable to the Board, and his appointment to the Board in
satisfaction of the requirement of paragraph 1 meets the requirements of
this paragraph 5. For purposes of this Agreement, Xx.
Xxxxx and any replacement director shall each be deemed a “Foxhill
Designee”.
|
|
|
6.
|
Until
the earlier to occur of (i) December 31, 2010, and (ii) the date no
Foxhill Designee is serving as a member of the Board and FOMF has advised
iPass in writing that iPass is no longer obligated to nominate or appoint
a Foxhill Designee to the Board under this Agreement (which notice shall
be binding on all Foxhill
entities):
|
|
|
(a)
|
Foxhill
will vote all of the shares it owns in support of each slate of Directors
nominated by the Board (and will not support or participate in any
“withhold the vote” or similar campaign, or support any other nominees
other than the slate of Directors nominated by the
Board);
|
|
|
(b)
|
Except
for the candidate FOMF is entitled to have appointed pursuant to paragraph
1 or nominated as a Foxhill Designee pursuant to paragraph 2 or designated
as a replacement for a Foxhill Designee who has left the Board pursuant to
paragraph 5 above, Foxhill will not propose (other than a
private proposal to the Board or committee thereof as permitted by
paragraph 5(c)) any candidates for election as directors of iPass;
and
|
|
|
(c)
|
Foxhill
will not: (i) propose (pursuant to Rule 14a-8 or
otherwise) any proxy resolutions or nominees for director for approval by
iPass stockholders; provided, however, that
Foxhill will be entitled to make any non-public proposals or nominee
suggestions it wishes solely to the Board or a committee thereof; or
(ii) except as permitted pursuant to paragraph 7, support any
proxy resolutions or conduct any proxy solicitations or seek to advise or
influence in any manner any person with respect to the voting of iPass
voting securities against the recommendation of the Board on such
matters.
|
2
provided, however, that
nothing herein shall limit Foxhill’s rights as a stockholder to nominate
directors for approval by iPass stockholders at the 2011 annual meeting of
stockholders.
|
|
7.
|
Notwithstanding
the foregoing or anything to the contrary herein, nothing in this
Agreement shall in any way limit Foxhill’s rights as a stockholder to
freely vote its securities on any matter submitted to a vote of the
stockholders of iPass (other than with respect to the election of
directors as set forth in paragraph 6(a)) or limit the ability of the
Foxhill Designee to exercise its rights as a member of the Board while
serving as a member of the Board.
|
|
|
8.
|
Subject
to the appointment of the person specified in paragraph 1 as a director of
iPass and iPass’ and the Board’s continued compliance with the terms
hereof, Foxhill withdraws its previously announced notice of its intent to
nominate directors with respect to the 2009 Annual
Meeting.
|
|
|
9.
|
The
Board will, subject to the limitations set forth in this paragraph 9,
return capital to iPass stockholders as
follows:
|
|
|
a.
|
the
Board will seek stockholder approval, at a special meeting called for such
purpose, of an amendment to iPass’ outstanding stock options and other
equity awards, and related plans, such that the value of such stock
options and other equity awards, in the good faith determination of the
Board, shall not be impaired by the declaration and payment of an
extraordinary dividend or stock repurchase, the proxy statement for the
stockholder vote with respect to such matters to be filed no later than
July 15, 2009;
|
|
|
b.
|
if
the iPass stockholders shall approve the amendments described in
subparagraph a. above, then the Board shall declare a dividend in an
amount per share such that the aggregate amount of the dividend shall
equal approximately $20 million, such declaration to occur as soon as
practicable following stockholder approval of the amendments described in
subparagraph a. above; and
|
|
|
c.
|
following
the payment of such dividend, the Board shall use its commercially
reasonable efforts to return an additional $20 million to the iPass
stockholders by the end of 2009 (the “Second Capital Reduction”), in a
form, or combination of forms, to be determined at the discretion of the
Board, which may be in the form of a tender offer, cash dividend or other
form determined by the Board, such Board action with respect to the return
of cash pursuant to this subparagraph c. (e.g., by the authorization to
file a Schedule TO, or declaration of a dividend record date), to occur on
or before such date as the Board, in its good faith determination, shall
enable iPass to complete the Second Capital Reduction before December 31,
2009; provided,
however, that if the Board determines that the Second Capital
Reduction shall be in the form of a self tender offer, and such self
tender offer shall not be fully subscribed, then the failure to deliver
the full $20 million of the Second Capital Reduction shall not be a breach
of this Agreement, and the Board shall use the remaining portion of the
Second Capital Reduction for a stock buyback program or a cash dividend to
be completed on or prior to December 31,
2010.
|
3
Notwithstanding
anything to the contrary set forth in this paragraph 9, the Board shall not be
obligated to return any amount of cash if (i) the Board shall have submitted the
return of such cash to the iPass stockholders for approval and the iPass
stockholders shall not have approved such return of cash, or (ii) the Board
shall have determined, with the advice of counsel, that the return of such cash
would cause the Board to be in breach of its fiduciary duties, or to be in
violation of applicable law.
|
|
10.
|
iPass
will reimburse Foxhill for its reasonable and documented out-of-pocket
expenses incurred in the commencement of the proxy contest, in an amount
not to exceed $150,000, within ten (10) business days of receiving
reasonably satisfactory documentation with respect to such
expenses.
|
|
|
11.
|
The
Board shall include, and recommend that iPass stockholders vote in favor
of, the declassification proposal in iPass’ revised definitive proxy
statement for the 2009 Annual
Meeting.
|
|
|
12.
|
Promptly
after the execution of this Agreement, iPass and Foxhill will issue a
joint press release in the form attached hereto as Schedule
A.
|
|
|
13.
|
Each
of FOMF and the other entities included within Foxhill agrees that it will
cause its controlled affiliates, current and future, to comply with the
terms of this Agreement as if party
hereto.
|
|
|
14.
|
This
Agreement may only be modified through a written agreement signed by iPass
and by FOMF. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and thereof
and supersedes all prior and contemplated arrangements and understandings
with respect thereto. This Agreement may be signed in
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same
Agreement.
|
|
|
15.
|
This
Agreement and the legal relations hereunder between the parties hereto
shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and performed therein,
without giving effect to the principles of conflicts of law
thereof. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America, in
each case located in the County of New Castle, for any action, proceeding
or investigation in any court or before any governmental authority arising
out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any action, proceeding or investigation
relating thereto except in such courts), and further agrees that service
of any process, summons, notice or document by registered mail to its
respective address set forth in this Agreement shall be effective service
of process for any action, proceeding or investigation brought against it
in any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any action,
proceeding or investigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of Delaware or
the United States of America, in each case located in the County of New
Castle, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action,
proceeding or investigation brought in any such court has been brought in
an inconvenient forum.
|
4
|
|
16.
|
Each
party hereto shall do and perform or cause to be done and performed all
such further acts and things and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other party
hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
|
If you
are in agreement please sign below.
| Very truly yours, | |
| iPass Inc. | |
|
By:
|
/s/
Xxxx Xxxxxx
|
|
Xxxx
Xxxxxx
|
|
|
Chief
Executive Officer and
President
|
|
Accepted
and agreed as of the date set forth above.
|
Foxhill
Opportunity Master Fund, L.P.
|
|
|
By:
Foxhill Opportunity Offshore Fund Ltd.
its general partner
|
|
|
By:
Foxhill Capital Partners LLC
its investment manager
|
|
|
By:
|
/s/
Xxxx Xxxxxx
|
|
Xxxx
Xxxxxx
|
|
|
Managing
Member
|
|
|
Foxhill
Opportunity Fund, L.P.
|
|
|
By:
Foxhill Capital (GP), LLC its general partner
|
|
|
By:
|
/s/
Xxxx Xxxxxx
|
|
Xxxx
Xxxxxx
|
|
|
Managing
Member
|
|
|
Foxhill
Opportunity Offshore Fund, LTD.
|
|
|
By:
|
/s/
Xxxx Xxxxxx
|
|
Xxxx
Xxxxxx
|
|
|
Director
|
|
|
Foxhill
Capital (GP), LLC
|
|
|
By:
|
/s/
Xxxx Xxxxxx
|
|
Xxxx
Xxxxxx
|
|
|
Managing
Member
|
|
|
Foxhill
Capital Partners, LLC
|
|
|
By:
|
/s/
Xxxx Xxxxxx
|
|
Xxxx
Xxxxxx
|
|
|
Managing
Member
|
|
|
/s/
Xxxx Xxxxxx
|
|
Xxxx Xxxxxx
|
5
