defa14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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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 |
TERREMARK WORLDWIDE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials: |
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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
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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This filing relates to the proposed merger between Terremark Worldwide, Inc., a Delaware
corporation (the Company), and Verizon Communications Inc., a Delaware corporation
(Parent). On January 27, 2011, the Company entered into an Agreement and Plan of Merger
with Parent and Verizon Holdings Inc., a Delaware corporation and a wholly-owned subsidiary of
Parent (Purchaser), as amended by Amendment No. 1 to the Agreement and Plan of Merger,
dated February 28, 2011, among the Company, Parent and Purchaser (as amended, the Merger
Agreement). Pursuant to the Merger Agreement, upon the terms and subject to the conditions
thereof, Purchaser commenced a tender offer (the Offer) on February 10, 2011 to acquire
all outstanding shares of common stock, par value $0.001 per share, of the Company (Common
Stock) at a purchase price of $19.00 per share, net to the seller in cash, less any required
withholding taxes. The Merger Agreement further provides that, following completion of the Offer,
Purchaser will merge with and into the Company, with the Company continuing as the surviving
corporation and as a direct, wholly-owned subsidiary of Parent (the Merger). The Merger
Agreement was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on
January 27, 2011.
This filing consists of a form of letter from the Company to its stockholders and a letter
from the Companys Human Resources department to the Companys option holders, each distributed on
March 30, 2011.
Dear Stockholder:
You are receiving this letter and the enclosed Letter of Transmittal because you own shares of
restricted common stock of Terremark Worldwide, Inc. Your shares are held in escrow by
Terremark, and the certificate(s) representing your shares are listed below:
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As previously reported, Verizon Holdings Inc. (Verizon), a wholly-owned
subsidiary of Verizon Communications Inc., has commenced a cash tender offer to purchase all of the
outstanding shares of Terremarks common stock at a price of $19.00 per share, net to the seller in
cash, without interest and less any required withholding taxes (the Offer). The Offer is
described in detail in Verizons Tender Offer Statement on Schedule TO, filed with the Securities
and Exchange Commission on February 10, 2011, as amended. We encourage you to read the Schedule TO
and the enclosed Letter of Transmittal carefully. You may access the Schedule TO and the related
exhibits and amendments online at the Securities and Exchange Commissions website at www.sec.gov.
Following completion of the Offer, Verizon will merge with and into Terremark, with Terremark
continuing as the surviving corporation and as a wholly-owned subsidiary of Verizon Communications
Inc. (the Merger).
Certain conditions must be satisfied before Verizon can close the Offer (referred to as the
Offer Closing), one of them being that holders of Terremark common stock must have
tendered at least 50% of the shares of common stock then outstanding, determined on a fully-diluted
basis. If this and the other required conditions are met, and the Offer Closing occurs, then a
change of control of Terremark will have occurred, and your restricted stock will become fully
vested. Following the Offer Closing, which is currently scheduled for March 31, 2011, Verizon may
commence a subsequent offering period that would begin on the first business day immediately
following the Offer Closing. If Verizon commences a subsequent offering period, you will have the
ability to tender your newly-vested shares of stock to Verizon.
If you would like to tender your shares during the subsequent offering period please complete
page 1 and the bottom half of page 6 of the enclosed Letter of Transmittal and submit the Letter of
Transmittal according to the instructions contained therein (Terremark will send your stock
certificate(s) to the Depositary on your behalf).
During the subsequent offering period, Verizon will wire payment for your newly vested and
validly tendered shares to Terremark, which amount will be paid to you via the standard Terremark
payroll and payment practices in accordance with your current banking directives. If you are a
U.S. employee, Terremark will withhold any applicable
2 South Biscayne Blvd., Suite 2800, Miami, Florida 33131, T. 305.961.3200 F. 305.961.3500
Social Security, Medicare, federal, state and
local taxes. Please note that the minimum federal withholding tax is 25% (35% if the aggregate
amount of supplemental distributions, including the Merger distribution, to be made to you for a
calendar year exceed $1,000,000). Additionally, no 401(k) contributions will be withheld from
these payments. If you are a non-U.S. employee, Terremark will remit payment to your local
Terremark office for processing. If you are not an employee of Terremark, payment will be made to
you through Terremark U.S. Payables.
If you complete and submit the Letter of Transmittal, but Verizon decides not to commence a
subsequent offering period, you will not be able to tender your shares in the Offer, your Letter of
Transmittal
will not become effective, and the certificates representing your shares will be returned to
you. If you choose not to tender your shares, you will receive payment for your shares only if the
Merger closes.
If you have any questions, please contact us at restrictedstock@terremark.com.
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Sincerely,
Terremark Worldwide, Inc.
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2 South Biscayne Blvd., Suite 2800, Miami, Florida 33131, T. 305.961.3200 F. 305.961.3500
Dear Terremark Option Holder:
You are receiving this informational letter because you own options to purchase shares of
common stock of Terremark Worldwide, Inc. that were granted to you under a Terremark stock plan.
As previously reported, Terremark has entered into a Merger Agreement with Verizon
Communications Inc. and Verizon Holdings Inc. (Verizon). Pursuant to the Merger Agreement,
Verizon has commenced a cash tender offer to purchase all of the outstanding shares of Terremarks
common stock at a price of $19.00 per share, net to the seller in cash, without interest and less
any required withholding taxes (referred to as the Offer). The Merger Agreement provides that,
following completion of the Offer, Verizon will merge with and into Terremark, with Terremark
continuing as the surviving corporation and as a wholly-owned subsidiary of Verizon Communications
Inc. (the Merger).
In accordance with the Merger Agreement, upon completion of the Merger, your options will be
cancelled in exchange for a cash payment to you. The cash payment for each option that you own
will be equal to the excess of $19 over the exercise price of that option, multiplied by the number
of shares subject to that option, less applicable withholding taxes. For example, if you have an
option to purchase 100 shares at an exercise price of $10 per share, following completion of the
Merger, you would receive $900 (calculated as follows: $19 minus $10 = $9, multiplied by 100
shares = $900), less applicable withholding taxes. Following the Merger, you will receive payment
for your options through the standard payroll and payment practices of Terremark. There will be no
fees associated with liquidating these options as a result of the closing of the Merger, but all
payments are subject to applicable withholding taxes. Options that have an exercise price equal to
or in excess of $19 will be cancelled in the Merger, and no consideration will be paid in respect
thereof.
If you are a U.S. employee, Terremark will withhold any applicable Social Security, Medicare,
federal, state and local taxes. Please note that the minimum federal withholding tax is 25% (35%
if the aggregate amount of supplemental distributions, including the Merger distribution, to be
made to you for a calendar year exceed $1,000,000). Additionally, no 401(k) contributions will be
withheld from these payments. If you are a non-U.S. employee, Terremark will remit payment to your
local Terremark office for processing. If you are not an employee of Terremark, payment will be
made to you through Terremark U.S. Payables.
Please note that there is nothing for you to do at this time. We will continue to
keep you updated on the status of the Offer and Merger. Should you have any questions, please do
not hesitate to contact Terremark Human Resources at hrcommunications@terremark.com.
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Sincerely,
Terremark Human Resources
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2 South Biscayne Blvd., Suite 2800, Miami, Florida 33131, T. 305.961.3200 F. 305.961.3500
Additional Information and Where to Find It
This filing is neither an offer to purchase nor a solicitation of an offer to sell any
securities. The Offer for outstanding shares of Common Stock commenced on February 10, 2011, and,
in connection with the Offer, Parent caused Purchaser to file a tender offer statement on Schedule
TO with the Securities and Exchange Commission (the SEC). The Companys stockholders are
strongly advised to read the tender offer statement, as amended from time to time (including the
offer to purchase, letter of transmittal and related tender offer documents), and the related
solicitation/recommendation statement on Schedule 14D-9, as amended from time to time, filed by the
Company with the SEC because they contain important information about the proposed transaction.
These documents are available at no charge on the SECs website at www.sec.gov. In addition, a
copy of the offer to purchase, letter of transmittal and certain other related tender offer
documents may be obtained free of charge by directing a request to Parent at 212-395-1525. A copy
of the tender offer statement and the solicitation/recommendation statement are also available to
all stockholders of the Company by contacting the Companys Investor Relations at 305-961-3109 or
hblankenbaker@terremark.com.
This communication may be deemed to be solicitation material in respect of the proposed
acquisition of the Company by Parent. In connection with the proposed acquisition, the Company
filed a proxy statement in preliminary form with the SEC on February 22, 2011, and intends to file
relevant materials with the SEC, including the Companys proxy statement in definitive form. The
Companys stockholders are strongly advised to read all relevant documents filed with the SEC,
including the Companys definitive proxy statement, because they will contain important information
about the proposed transaction. These documents will be available at no charge on the SECs website
at www.sec.gov. In addition, documents will also be available for free from the
Company by contacting the Companys Investor Relations at 305-860-7822 or
hblankenbaker@terremark.com.
Participants in the Solicitation
The Company and its directors and executive officers may be deemed to be participants in the
solicitation of proxies from the Companys stockholders in connection with the Merger. Information
about the Companys directors and executive officers is set forth in the Companys proxy statement
on Schedule 14A, as amended, filed with the SEC on June 18, 2010 and the Companys Annual Report on
Form 10-K filed with the SEC on June 14, 2010. Additional information regarding the interests of
participants in the solicitation of proxies in connection with the Merger will be included in the
definitive proxy statement that the Company intends to file with the SEC.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements made in this Current Report on Form 8-K that reflect managements
expectations regarding future events are forward-looking in nature and, accordingly, are subject to
risks and uncertainties. These forward-looking statements include references to the Companys
announced transaction with Parent and Purchaser. Forward-looking statements are only predictions
and are not guarantees of performance. These statements are based on beliefs and assumptions of
management, which in turn are based on currently available information. The forward-looking
statements also involve risks and uncertainties, which could cause actual results to differ
materially from those contained in any forward-looking statement. Many of these factors are beyond
our ability to control or predict. Important factors that could cause actual results to differ
materially from those contained in any forward-looking statement include, but are not limited to,
uncertainties as to the timing of the Offer and Merger; uncertainties as to how many of the Company
stockholders will tender their shares of Common Stock in the Offer; the possibility that competing
offers will be made; the possibility that various closing conditions for the Offer and the Merger
may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse
to grant approval for the consummation of the Offer or the Merger; and other risks and
uncertainties discussed in documents filed with the SEC by the Company, as well as the tender offer
documents filed by Parent and Purchaser and the solicitation/recommendation statement and proxy
statement and other relevant materials filed or to be filed by the Company. Although we believe
the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, level of activity, performance or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy or completeness of any of these forward-looking
statements. You should not rely upon forward-looking statements as predictions of future events.
We do not undertake any responsibility to update any of these forward-looking statements to conform
our prior statements to actual results or revised expectations, except as expressly required by
law.