Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On May 1, 2016, Opower,
Inc., a Delaware corporation (the Company), OC Acquisition LLC, a Delaware limited liability company (Parent), Olympus II Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (Merger
Subsidiary), and, solely for certain limited purposes, Oracle Corporation, a Delaware corporation and the ultimate parent entity of Parent and Merger Subsidiary (Ultimate Parent), entered into an Agreement and Plan of Merger (the
Merger Agreement).
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Parent has
agreed that Merger Subsidiary will commence a cash tender offer (the Offer) to acquire all of the shares of the Companys common stock (Common Stock) for a purchase price of $10.30 per share, net to the holders thereof,
in cash (the Offer Price), without interest, subject to the terms and conditions of the Merger Agreement.
At the effective
time of the Merger (the Effective Time), the unvested portion of each option to purchase Common Stock (the Stock Options), each restricted stock of the Company outstanding under any Company Stock Plan or otherwise
(Company Restricted Stock) and each award of restricted stock units with respect to shares of Common Stock (RSUs, and together with the Stock Options and Company Restricted Stock, the Compensatory Awards), that is
outstanding immediately prior to the Effective Time and held by a person who is an employee of the Company or any of its subsidiaries immediately prior to the Effective Time will be assumed by Ultimate Parent and converted automatically at the
Effective Time into an option, restricted stock or restricted stock unit award, as the case may be, denominated in shares of Ultimate Parent common stock. These assumed Compensatory Awards will be subject to terms and conditions substantially
identical to those applicable to such Compensatory Awards as in effect at the Effective Time except that the number of shares subject to these awards and the per share exercise price or purchase price will be adjusted to reflect the Offer Price and
the price of Ultimate Parents common stock on the New York Stock Exchange over the five trading days immediately preceding the date on which the Effective Time occurs.
At the Effective Time, the vested portion (including any portion that pursuant to its terms becomes vested solely as a result of the
transactions contemplated by the Merger Agreement) of each Compensatory Award that is outstanding immediately prior to the Effective Time (each such award, a Cashed Out Compensatory Award), will not be assumed by Ultimate Parent and
will, immediately prior to the Effective Time, be cancelled and extinguished in exchange for an amount in cash equal to the product of (x) the aggregate number of shares of Common Stock subject to such Cashed Out Compensatory Award immediately prior
to the Effective Time and (y) the Offer Price less any per share exercise or purchase price of such Cashed Out Compensatory Award immediately prior to such cancellation; provided that any Cashed Out Compensatory Award in respect of a Stock Option
that has an exercise price equal to or greater than the Offer Price will be cancelled without any consideration therefor.
The Merger
Agreement may be terminated under certain circumstances, including in specified circumstances in connection with superior proposals. Upon the termination of the Merger Agreement, under specified circumstances, the Company will be required to pay
Parent a termination fee of $20 million, or under other specified circumstances, an expense reimbursement of $5 million.
Merger
Subsidiary has agreed to commence the Offer as promptly as reasonably practicable from the date of the Merger Agreement (but in no event later than twelve business days from the date of the Merger Agreement). The consummation of the Offer will be
conditioned on (i) at least a majority of the shares of the Common Stock (calculated on a fully diluted basis in accordance with the Merger Agreement) having been validly tendered into and not withdrawn from the Offer, (ii) receipt of certain
regulatory approvals, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain foreign antitrust laws, (iii) the accuracy of the representations and warranties and compliance with the
covenants contained in the Merger Agreement, subject to qualifications, and (iv) other customary conditions.
The Merger Agreement
provides that, following the consummation of the Offer, Merger Subsidiary will merge with and into the Company (the Merger), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. The Merger will be governed by
Section 251(h) of the General Corporation Law of the State of Delaware, with no stockholder vote required to consummate the Merger. In the Merger, each outstanding share of Common Stock (other than shares of Common Stock held by the
Company as treasury stock, or owned by Ultimate Parent, Parent, or Merger Subsidiary or held by stockholders who are entitled to demand, and who properly demand, appraisal rights under Delaware law) will be converted into the right to receive cash
in an amount equal to the Offer Price, without interest.
The foregoing description of the Merger Agreement is not complete and is
qualified in its entirety by reference to the Merger Agreement, which is attached as Exhibit 2.1 to this report and incorporated herein by reference.
The Merger Agreement and the foregoing description of the Merger Agreement have been included to provide investors and stockholders with
information regarding the terms of the Merger Agreement. It is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Merger Agreement were made only as of specified
dates for the purposes of such agreement, were solely for the benefit of the parties to such agreement and may be subject to qualifications and limitations agreed upon by such parties. In particular, in reviewing the representations, warranties and
covenants contained in the Merger Agreement and discussed in the foregoing description, it is important to bear in mind that such representations, warranties and covenants were negotiated with the principal purpose of allocating risk between the
parties, rather than establishing matters as facts. Such representations, warranties and covenants may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed
with the U.S.
Securities and Exchange Commission (the SEC). Investors and stockholders are not third-party beneficiaries under the Merger Agreement. Accordingly, investors and stockholders should
not rely on such representations, warranties and covenants as characterizations of the actual state of facts or circumstances described therein. Information concerning the subject matter of such representations, warranties and covenants may change
after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties public disclosures.
Support Agreement
Concurrent with the execution and
delivery of the Merger Agreement, on May 1, 2016, each director and executive officer of the Company (and parties related to or affiliated with such directors and executive officers) entered into a tender and support agreement (the Support
Agreement) with Parent and Merger Subsidiary, pursuant to which each such director, executive officer and party related to or affiliated with such director or executive officer agreed, among other things, to tender his, her or its shares of
Common Stock pursuant to the Offer. Shares of Common Stock held by these directors, executive officers and parties related to or affiliated with such directors and executive officers that are eligible to be tendered into the Offer represent, in
the aggregate, approximately 49.9% of the shares of Common Stock outstanding on the date of the Merger Agreement. Subject to the terms and conditions of the Support Agreement, such stockholders agreed, among other things, to tender their shares of
Common Stock in the Offer no later than five business days following the commencement of the Offer. The foregoing description of the Support Agreement does not purport to be complete and is qualified in its entirety by reference to the form of
Support Agreement. The form of Support Agreement is provided as Exhibit A to the Merger Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.