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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-12 |
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o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||||
(1 | ) | Title of each class of securities to which transaction applies: | ||||
Common Stock | ||||||
(2 | ) | Aggregate number of securities to which transaction applies: | ||||
(3 | ) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | ||||
(4 | ) | Proposed maximum aggregate value of transaction: | ||||
(5 | ) | Total fee paid: | ||||
o | Fee paid previously with preliminary materials. |
o | 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. | |||||
(1 | ) | Amount Previously Paid: | ||||
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Filed by 3Com Corporation | ||
Pursuant to Rule 14a-12 under the | ||
Securities Exchange Act of 1934 | ||
Subject Company: 3Com Corporation | ||
Commission File No.: 000-12867 |
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To: From: Subject: Date: |
All Employees Edgar Masri Strategic Announcement September 28, 2007 |
| Today we announced that 3Com has entered into a definitive agreement under which 3Com will be acquired by affiliates of Bain Capital, a private equity firm, in a transaction with a total equity value of $2.2 billion, or $5.30 per share, in cash. As part of the transaction, affiliates of Huawei Technologies will acquire a minority interest in the company and become a commercial and strategic partner of 3Com. | ||
| Upon the close of the transaction, 3Com will become a private company. | ||
| This announcement is the first step in a process that is expected to be completed by the first quarter of calendar year 2008, subject to the receipt of shareholder approval, customary regulatory approvals and closing conditions. | ||
| There will be more detail related to the transaction in the proxy statement to be filed with the Securities and Exchange Commission at a future date. |
| When a company goes private the companys stock is no longer traded on the public market. Once we receive shareholder approval, approval from regulatory bodies and have satisfied all of the closing conditions, we will be owned by Bain Capital with Huawei as a minority interest partner. |
| There are several benefits of this transaction for 3Com and 3Coms customers and shareholders: |
| Shareholders see an immediate 44% premium relative to yesterdays stock price. | ||
| We will have increased opportunity to expand our global networking leadership position. | ||
| We believe that having Huawei as a strategic partner commits one of our largest OEM partners to the long-term success of the business. | ||
| It enables us to increase our focus on our long-term strategic objectives rather than the intense quarterly focus required of a publicly traded company. | ||
| We are being acquired by Bain Capital, a global private investment firm that has a strong track record of helping its portfolio companies achieve their full potential. |
| In summary, an affiliate of Bain Capital, LLC will acquire all of the outstanding shares of 3Com for $5.30 per share in cash for a total equity value of $2.2 billion. |
| As part of the arrangement, Bain Capital has entered into a partnership with affiliates of Huawei Technologies which will acquire a minority investment in the company. |
| Specific terms will be available in the merger agreement that will be filed with the Securities and Exchange Commission. |
| We expect the transaction will be completed by the first quarter of calendar year 2008, pending satisfaction of all closing conditions. |
| Our current IPO timeline would fall after our expected acquisition by Bain Capital, and therefore it is likely that Bain Capital will make the ultimate decision. | ||
| We cannot comment on Bain Capitals plans in that regard. | ||
| Prior to the close of the transaction, however, we have no plans to change our course of action on TippingPoint. |
| The price was as a result of negotiation between the parties. | ||
| The board also received a fairness opinion from Goldman Sachs & Co. |
| After a thorough review of Bain Capitals proposal, the companys valuation prospects in the public market and other strategic alternatives, 3Coms Board of Directors determined this transaction to be in the best interests of all 3Com shareholders. | ||
| Further information regarding the Boards process will be disclosed in the transaction proxy statement when it is filed with the SEC. |
| The management team will continue to run the day-to-day operations of the company through the close of the transaction. | ||
| Following the close of the transaction, any decisions regarding management, will be made by the new shareholders. |
| Management has no current plans to do so. We believe that Bain Capital is investing to position the company for long-term growth and success, not simply to take costs out of the business. |
| After a thorough review of Bain Capitals proposal in the context of the companys valuation prospects in the public markets and other strategic alternatives, 3Coms Board of Directors determined this transaction to be in the best interests of all 3Com shareholders. |
| Vesting of options, RSUs and RSAs will continue until on the usual schedule until the close of the transaction under existing terms and conditions. Employees at the date of closing will have all unvested equity accelerate. | ||
| RSUs and RSAs, less applicable shares withheld for taxes, will be purchased at the closing for $5.30 per share, in cash. | ||
| Options with an exercise price below $5.30 per share will be cashed out at the difference between the purchase price and the exercise price, less applicable withholdings for taxes. | ||
| We will be providing more specifics as the deal progresses of the exact steps that you will need to take in regard to your 3Com equity. |
| The ESPP is a benefit which can only be provided by public companies so this benefit will have to be terminated when the company is taken private in this transaction. | ||
| The current ESPP (commencing October 1st) will continue through to the closing date. Effective after September 26th, ESPP elections cannot be increased for this ESPP period. Immediately prior to the closing, ESPP will conclude the period, and shares will be deposited into employees accounts. | ||
| These shares will then be purchased in the same manner as all other outstanding equity. |
| In general, you need to be an employee of 3Com at the time of the closing to receive accelerated vesting. |
| As long as the trading window is open and you are not prevented from trading due to your possession of material non-public information, you can trade your vested equity. |
| After the close of the transaction, we expect that the management team will examine our compensation programs. | ||
| We have a historical practice of maintaining a competitive compensation structure, and 3Com expects to continue that practice through available compensation vehicles, consistent with private equity owned companies, which encourage employee participation in the long-term success of 3Com. |
| Until the acquisition closes we will continue to operate our business in a standard manner which sometimes includes changes in the companys organizational structure. |
| Standard compensation programs will continue without interruption until the close of the transaction which will likely occur after our upcoming merit and 3Bonus cycles. | ||
| 401(k) and other benefits are not impacted by this transaction. | ||
| After the close of the transaction we anticipate that the management team will examine our compensation programs. | ||
| 3Com has a historical practice of maintaining a competitive compensation structure, and the Company anticipates continuing that practice through available compensation vehicles, consistent with private equity owned companies, which encourage employee participation in the long-term success of 3Com. |
| The timing was based on the Boards judgment regarding what was in the best interests of the shareholders. | ||
| After a thorough review of Bain Capitals proposal in the context of other strategic alternatives, we believe that this transaction is in the best interest of our shareholders. We believe that as a private company, we can invest in our future without the pressures of delivering on short-term quarterly results. |
| We have been very open with Bain Capital about managements plans to grow 3Com as a global company through a strategic plan designed to build our business in all regions. | ||
| We believe that Bain Capital is making this investment because they see growth potential in 3Com and wants us to be a global networking leader, which will require worldwide resources. |
| We have no current plans to change 3Coms headquarters. | ||
| North America is one of the most significant markets in the world and Marlborough has a valued staff of knowledgeable and talented 3Com employees. |
| We believe that 3Com is a well recognized brand in many global markets which makes the brand attractive to retain. |
| All media calls are to be forwarded to John Vincenzo at (508) 323-1260. Except for those individuals who have been designated as spokespersons for the company, no one should have any contact with the media or any industry analysts (other than to simply refer any inbound contact to the appropriate person). |
| In general, we will continue to operate the business as we usually do. You can help the success of 3Com by continuing business as usual, and delivering on our objectives such as profitability revenue growth. If you have questions on any specific activities, you should speak with your supervisor. |