EX-99.1 2 d246436dex991.htm EX-99.1 EX-99.1
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Exhibit 99.1

LOGO

 

December 16, 2016

Dear Fellow Stockholders:

As previously announced, LogMeIn, Inc., which we refer to as LMI, and Citrix Systems, Inc., which we refer to as Citrix, have entered into an agreement and plan of merger, dated as of July 26, 2016, as may be amended from time to time, which we refer to as the Merger Agreement, under which LMI will combine with Citrix’s “GoTo” family of service offerings, which we refer to as the GoTo Business. The GoTo Business offers cloud-based communications and workflow software-as-a-service solutions, including GoToMeeting, GoToWebinar, GoToTraining, OpenVoice, Grasshopper, GoToMyPC and GoToAssist.

As a stockholder of LMI, we wanted to provide you with information about the proposed transactions and ask you to vote on certain related matters at the special meeting of LMI stockholders. The principal transactions described in this document include the following:

 

    Separation—The transfer by Citrix of the assets and liabilities of the GoTo Business to Citrix’s wholly owned subsidiary GetGo, Inc., which we refer to as GetGo.

 

    Distribution—The distribution by Citrix of all of the outstanding shares of GetGo common stock to Citrix stockholders on a pro rata basis.

 

    Merger—The merger of Lithium Merger Sub, Inc., a newly formed, wholly owned subsidiary of LMI, which we refer to as Merger Sub, with and into GetGo. GetGo will survive the Merger as a wholly owned subsidiary of LMI.

In connection with the Merger, Citrix stockholders will receive LMI common stock in exchange for the shares of GetGo common stock to which they are entitled in the Distribution. LMI currently expects to issue an aggregate of approximately 27.3 million shares of LMI common stock to equityholders of Citrix in connection with the Merger. This number includes an estimated 0.5 million shares of LMI common stock that may be issued following the Merger upon settlement of LMI restricted stock units to be granted to GetGo employees in substitution for outstanding Citrix restricted stock units. However, the actual number of LMI restricted stock units to be issued to GetGo employees in substitution for outstanding Citrix restricted stock units in connection with the Merger (and, accordingly, the number of shares of LMI common stock that may be issued following the Merger upon settlement of the LMI restricted stock units) will be determined shortly following the closing of the Merger based upon the relative stock prices of Citrix prior to the Merger and LMI following the Merger. Immediately following the Merger, Citrix equityholders are expected to own approximately 50.1% of LMI’s issued and outstanding common stock on a fully diluted basis, and existing LMI equityholders are expected to own the remaining 49.9% of the issued and outstanding common stock of LMI on a fully diluted basis. LMI common stock is traded on the NASDAQ Global Select Market under the ticker symbol “LOGM.” On December 5, 2016, the closing price of LMI common stock was $101.15 per share.

After consideration, the board of directors of LMI, which we refer to as the LMI Board of Directors or LMI Board, has unanimously determined that the Merger and the issuance of LMI common stock in connection therewith, which we refer to as the Share Issuance, are in the best interests of LMI and its stockholders and has approved the Merger Agreement, the Merger and the Share Issuance. In order to complete the Merger, LMI must obtain the requisite approval of its stockholders for the Share Issuance. Mr. Michael K. Simon, the chairman of the LMI Board, who currently owns more than 3% of LMI’s common stock, has agreed to vote in favor of the Share Issuance. At a special meeting of LMI stockholders to be held on January 25, 2017 at 9:00 a.m., Eastern time, at the offices of Latham & Watkins LLP, 200 Clarendon Street, 27th Floor, Boston, Massachusetts 02116, you will be asked to vote on proposals to:

 

    approve the Share Issuance;

 

    adopt an amendment to the restated certificate of incorporation of LMI to increase the authorized number of shares of LMI common stock by an additional 75,000,000 shares, which we refer to as the Charter Amendment;

 

    approve an amendment and restatement of LMI’s Amended and Restated 2009 Stock Incentive Plan to increase the number of shares of LMI common stock that may be issued under the plan by an additional 4,500,000 shares and extend the term of the plan to December 5, 2026, which we refer to as the Plan Amendment; and

 

    approve the adjournment of the special meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the Share Issuance, which we refer to as the meeting adjournment proposal.

The LMI Board of Directors unanimously recommends that you vote FOR the proposal to approve the Share Issuance, FOR the proposal to adopt the Charter Amendment, FOR the proposal to approve the Plan Amendment and FOR the meeting adjournment proposal.

Your vote is very important, regardless of the number of shares you own. We cannot complete the Merger unless the Share Issuance is approved by our stockholders at the special meeting. Only stockholders who owned shares of LMI common stock at the close of business on December 9, 2016 will be entitled to vote at the special meeting. Whether or not you plan to be present at the special meeting, please complete, sign, date and return your proxy card in the enclosed envelope, or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by using the internet as described in the instructions included with your proxy card. If you hold your shares in “street name,” you should instruct your broker how to vote your shares in accordance with your voting instruction form.

This proxy statement/prospectus-information statement explains the Merger Agreement, the Merger, the Share Issuance and the transactions contemplated thereby and provides specific information concerning the special meeting. Please review this document carefully. You should carefully consider, before voting, the matters discussed under the heading “Risk Factors” beginning on page 33.

On behalf of LMI, I thank you for your support and appreciate your consideration of this matter.

Cordially,

William R. Wagner

President and Chief Executive Officer

Neither the U.S. Securities and Exchange Commission nor any state securities regulator has approved or disapproved the transactions described in this proxy statement/prospectus-information statement, including the Merger and the Share Issuance, or determined if this proxy statement/prospectus-information statement is accurate or adequate. Any representation to the contrary is a criminal offense.

The date of this proxy statement/prospectus-information statement is December 16, 2016, and it is being mailed to LMI stockholders on or about December 20, 2016.


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LOGMEIN, INC.

320 Summer Street

Boston, Massachusetts

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held on January 25, 2017

To the Stockholders of LogMeIn, Inc.:

NOTICE IS HEREBY GIVEN of a special meeting of stockholders of LogMeIn, Inc., a Delaware corporation, which we refer to as LMI, which will be held at the offices of Latham & Watkins LLP, 200 Clarendon Street, 27th Floor, Boston, Massachusetts 02116, on January 25, 2017 at 9:00 a.m., Eastern time, for the following purposes:

 

  1. to vote on a proposal to approve the issuance of LMI common stock in connection with the Agreement and Plan of Merger, or the Merger Agreement, dated as of July 26, 2016, as it may be amended from time to time, among LMI, Lithium Merger Sub, Inc., Citrix Systems, Inc. and GetGo, Inc., which we refer to as the Share Issuance;

 

  2. to vote on a proposal to adopt an amendment to LMI’s restated certificate of incorporation to increase the authorized number of shares of LMI common stock by an additional 75,000,000 shares, conditioned upon the closing of the Merger, which we refer to as the Charter Amendment;

 

  3. to vote on a proposal to approve an amendment and restatement of LMI’s Amended and Restated 2009 Stock Incentive Plan to increase the number of shares of LMI common stock that may be issued under the plan by an additional 4,500,000 shares and extend the term of the plan to December 5, 2026, conditioned upon the closing of the Merger, which we refer to as the Plan Amendment; and

 

  4. to vote on a proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to approve the Share Issuance, which we refer to as the meeting adjournment proposal.

The approval of the proposal set forth in item 1 above is the only approval of LMI stockholders required for completion of the transactions contemplated by the Merger Agreement. LMI will transact no other business at the special meeting except such business as may properly be brought before the special meeting or any adjournment or postponement thereof.

The LMI Board of Directors has fixed the close of business on December 9, 2016 as the record date for the special meeting. Only LMI stockholders of record as of the record date are entitled to receive notice of, and to vote at, the special meeting or any adjournment or postponement thereof. A complete list of such stockholders will be available for inspection by any LMI stockholder for any purpose germane to the special meeting during ordinary business hours for the ten days preceding the special meeting at LMI’s principal executive offices located at 320 Summer Street, Boston, Massachusetts. The eligible LMI stockholder list will also be available at the special meeting for examination by any stockholder present at such meeting.

THE LMI BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE MERGER, THE SHARE ISSUANCE, THE CHARTER AMENDMENT AND THE PLAN AMENDMENT AND UNANIMOUSLY RECOMMENDS THAT LMI STOCKHOLDERS VOTE FOR THE SHARE ISSUANCE, FOR THE CHARTER AMENDMENT, FOR THE PLAN AMENDMENT AND FOR THE MEETING ADJOURNMENT PROPOSAL.

Your vote is very important. Whether or not you expect to attend the special meeting in person, to ensure your representation at the special meeting, we urge you to authorize the individuals named on your proxy card to vote your shares as promptly as possible by (1) accessing the internet site listed on the proxy card, (2) calling the toll-free number listed on the proxy card or (3) submitting your proxy card by mail by using the provided self-addressed, stamped envelope. If you hold your shares in “street name,” you should instruct your broker how to vote your shares in accordance with your voting instruction form. LMI stockholders may revoke their proxy in the manner described in the accompanying proxy statement/prospectus-information statement before it has been voted at the special meeting.

By Order of the LMI Board of Directors,

Michael J. Donahue

Secretary

Boston, Massachusetts


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WHERE YOU CAN FIND ADDITIONAL INFORMATION; INCORPORATION BY REFERENCE

This proxy statement/prospectus-information statement incorporates by reference important business and financial information about LMI from documents filed with the U.S. Securities and Exchange Commission, or the SEC, that have not been included herein or delivered herewith. LMI files reports (including annual, quarterly and current reports which may contain audited financial statements), proxy statements and other information with the SEC. Copies of LMI’s filings with the SEC are available to investors without charge by request made to LMI in writing, by telephone or by email with the following contact information:

LogMeIn, Inc.

Attn: Investor Relations

320 Summer Street

Boston, Massachusetts

Telephone: (781) 897-0694

Email: InvestorRelations@logmein.com

In order to receive timely delivery of these materials, you must make your requests no later than January 18, 2017, which date is five business days before the date of the special meeting.

You may also obtain LMI’s SEC reports at https://investor.logmein.com/sec.cfm or Citrix’s SEC reports at http://investors.citrix.com/sec.cfm. LMI’s filings with the SEC and Citrix’s filings with the SEC are available to the public over the internet at the SEC’s website at www.sec.gov, or at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the public reference facilities.

The SEC allows certain information to be “incorporated by reference” into this proxy statement/prospectus-information statement. This means that LMI can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this proxy statement/prospectus-information statement except for any information modified or superseded by information contained directly in this proxy statement/prospectus-information statement or in any document subsequently filed by LMI that is also incorporated or deemed to be incorporated by reference herein. This proxy statement/prospectus-information statement incorporates by reference the documents set forth below that LMI has previously filed with the SEC and any future filings by LMI under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, from the date of this proxy statement/prospectus-information statement to the date that the LMI special meeting is held, except, in any such case, for any information therein which has been furnished rather than filed, which shall not be incorporated herein. Subsequent filings with the SEC will automatically modify and supersede information in this proxy statement/prospectus-information statement. These documents contain important information about LMI and its financial condition.

This proxy statement/prospectus-information statement, and the registration statement of which this proxy statement/prospectus-information statement forms a part, hereby incorporate by reference the following documents that LMI has filed with the SEC:

 

    LMI’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 19, 2016;

 

    the information specifically incorporated by reference into LMI’s Annual Report on Form 10-K for the year ended December 31, 2015 from LMI’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 8, 2016;

 

    LMI’s Quarterly Reports on Form 10-Q filed with the SEC on April 29, 2016, July 27, 2016 and October 28, 2016;

 

    LMI’s Current Report on Form 8-K/A filed with the SEC on December 23, 2015 and LMI’s Current Reports on Form 8-K filed with the SEC on January 8, 2016, January 27, 2016, February 4, 2016, March 24, 2016, May 26, 2016, July 26, 2016 (except with respect to Item 2.02 thereof), July 26, 2016 (as amended by the Current Report on Form 8-K/A filed with the SEC on July 28, 2016), September 26, 2016, October 27, 2016 (except with respect to Items 2.02 and 7.01 thereof) and December 7, 2016; and


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    the description of LMI’s common stock contained in its Registration Statement on Form 8-A (File No. 001-34391) filed with the SEC on June 24, 2009, including any amendments or reports filed for the purpose of updating such description.

If you are an LMI stockholder and you have any questions about the proposed transactions, please contact LMI’s Investor Relations Department at (781) 897-0694.

If you are a Citrix stockholder and you have any questions about the proposed transactions, please contact Citrix’s Investor Relations Department at (954) 229-5758.

NONE OF LMI, MERGER SUB, CITRIX OR GETGO HAS AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ABOUT THE PROPOSED TRANSACTIONS OR ABOUT LMI, MERGER SUB, CITRIX OR GETGO THAT DIFFERS FROM OR ADDS TO THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS-INFORMATION STATEMENT OR THE DOCUMENTS THAT LMI PUBLICLY FILES WITH THE SEC. THEREFORE, IF ANYONE GIVES YOU DIFFERENT OR ADDITIONAL INFORMATION, YOU SHOULD NOT RELY ON IT.

IF YOU ARE IN A JURISDICTION WHERE OFFERS TO EXCHANGE OR SELL, OR SOLICITATIONS OF OFFERS TO EXCHANGE OR PURCHASE, THE SECURITIES OFFERED BY THIS PROXY STATEMENT/PROSPECTUS-INFORMATION STATEMENT ARE UNLAWFUL, OR IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO DIRECT THESE TYPES OF ACTIVITIES, THEN THE OFFER PRESENTED IN THIS PROXY STATEMENT/PROSPECTUS-INFORMATION STATEMENT DOES NOT EXTEND TO YOU. IF YOU ARE IN A JURISDICTION WHERE SOLICITATIONS OF A PROXY ARE UNLAWFUL, OR IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO DIRECT THESE TYPES OF ACTIVITIES, THEN THE SOLICITATION PRESENTED IN THIS PROXY STATEMENT/PROSPECTUS-INFORMATION STATEMENT DOES NOT EXTEND TO YOU.

THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS-INFORMATION STATEMENT SPEAKS ONLY AS OF ITS DATE UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE HEREOF. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN ANY DOCUMENT INCORPORATED BY REFERENCE HEREIN IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE OF SUCH DOCUMENT. ANY STATEMENT CONTAINED IN A DOCUMENT INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE INTO THIS DOCUMENT WILL BE DEEMED TO BE MODIFIED OR SUPERSEDED TO THE EXTENT THAT A STATEMENT CONTAINED HEREIN OR IN ANY OTHER SUBSEQUENTLY FILED DOCUMENT THAT ALSO IS OR IS DEEMED TO BE INCORPORATED BY REFERENCE INTO THIS DOCUMENT MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY STATEMENT SO MODIFIED OR SUPERSEDED WILL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO CONSTITUTE A PART OF THIS DOCUMENT. NEITHER THE MAILING OF THIS DOCUMENT TO THE RESPECTIVE STOCKHOLDERS OF LMI AND CITRIX, NOR THE TAKING OF ANY ACTIONS CONTEMPLATED HEREBY BY LMI OR CITRIX AT ANY TIME WILL CREATE ANY IMPLICATION TO THE CONTRARY.


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ABOUT THIS DOCUMENT

Citrix has supplied all information contained in this proxy statement/prospectus-information statement relating to Citrix and GetGo. LMI has supplied all information contained in or incorporated by reference into this proxy statement/prospectus-information statement relating to LMI and Merger Sub and has provided certain purchase accounting adjustments. Citrix and LMI have both contributed information to this proxy statement/prospectus-information statement relating to the proposed transactions.

This proxy statement/prospectus-information statement forms a part of a registration statement on Form S-4 (Registration No. 333-213651) filed by LMI with the SEC to register with the SEC the issuance of shares of LMI common stock to be issued pursuant to the Merger Agreement. It constitutes a prospectus of LMI under Section 5 of the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder, which we refer to as the Securities Act, with respect to the shares of LMI common stock to be issued to Citrix stockholders in exchange for the shares of GetGo common stock to which they are entitled in the Distribution. It also constitutes a proxy statement under Section 14(a) of the Exchange Act and a notice of meeting and action to be taken with respect to the LMI special meeting of stockholders at which LMI stockholders will consider and vote on the proposal to approve the issuance of shares of LMI common stock in connection with the Merger Agreement and certain other matters described herein. In addition, it constitutes an information statement relating to the proposed Separation and Distribution.

As allowed by the SEC rules, this proxy statement/prospectus-information statement does not contain all of the information you can find in LMI’s registration statement or its exhibits. For further information pertaining to LMI and the shares of LMI common stock to be issued in connection with the proposed transactions, reference is made to that registration statement and its exhibits. Statements contained in this document or in any document incorporated in this document by reference as to the contents of any contract or other document referred to within this document or other documents that are incorporated by reference are not necessarily complete and, in each instance, reference is made to the copy of the applicable contract or other document filed as an exhibit to the registration statement or otherwise filed with the SEC. Each statement contained in this document is qualified in its entirety by reference to the underlying documents. We encourage you to read the registration statement. You may obtain copies of the Form S-4 (and any amendments to those documents) by following the instructions under “Where You Can Find Additional Information; Incorporation By Reference.”


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TABLE OF CONTENTS

 

Questions and Answers About the Transactions

     1   

Questions and Answers For LMI Stockholders

     7   

Questions and Answers For Citrix Stockholders

     11   

Summary

     14   

Risk Factors

     33   

Risks Related to the Transactions

     33   

Risks Related to LMI, Including the GoTo Business, After the Transactions

     39   

Risks Related Ownership of LMI Common Stock

     52   

Cautionary Statement Regarding Forward-Looking Statements

     56   

The LMI Special Meeting

     57   

General

     57   

Date, Time and Place

     57   

Matters for Consideration

     57   

Record Date; Voting Information

     57   

Quorum

     58   

Required Vote

     58   

Voting by Proxy

     59   

Revocation of Proxies

     59   

Voting by LMI Directors and Executive Officers

     60   

Solicitation of Proxies

     60   

Other Matters

     60   

Assistance

     61   

The Transactions

     62   

General

     62   

Transaction Sequence

     62   

The Separation and Distribution

     64   

The Merger

     64   

Calculation of Merger Consideration

     64   

Anticipated Costs of the Transactions

     65   

Trading Markets

     66   

Background of the Merger

     66   

LMI’s Reasons for the Merger

     75   

Citrix’s Reasons for the Separation, the Distribution and the Merger

     77   

Estimated Run-Rate Cost Synergies from the Transactions

     80   

Opinion of LMI’s Financial Advisor

     80   

Certain Projections

     88   

Ownership of LMI Following the Merger

     91   

Board of Directors and Executive Officers of LMI Following the Merger; Operations Following the Merger

     91   

Interests of Certain Persons in the Merger

     92   

Regulatory Approvals

     93   

Listing

     94   

Federal Securities Law Consequences; Resale Restrictions

     94   

Accounting Treatment of the Merger

     94   

Rights of Appraisal

     95   

U.S. Federal Income Tax Consequences of the Distribution and Merger

     96   

The Transaction Agreements

     101   

The Merger Agreement

     101   

The Separation Agreement

     122   

Additional Agreements Related to the Separation, the Distribution and the Merger

     129   

Employee Matters Agreement

     129   

Tax Matters Agreement

     130   


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IP License Agreement

     132   

Transition Services Agreement

     137   

Voting Agreement

     138   

Cooperation Agreement

     139   

Information About Merger Sub and LMI

     140   

Information About Merger Sub

     140   

Information about LMI

     140   

Information About Citrix

     144   

Information About the GoTo Business

     145   

Overview

     145   

History

     145   

Industry

     146   

Service Offerings

     146   

Technology

     147   

Sales & Marketing

     148   

Research and Development

     148   

Intellectual Property

     148   

Customers

     149   

Competition

     149   

Seasonality

     150   

Employees

     150   

Property and Facilities

     150   

Legal Proceedings

     151   

Regulatory

     151   

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the GoTo Business

     152   

Overview

     152   

The Separation and Separation Costs

     153   

Critical Accounting Polices and Estimates

     153   

Summary of Results for the Year Ended December 31, 2015

     156   

Grasshopper Acquisition

     156   

Results of Operations for the Years Ended December 31, 2015, 2014 and 2013

     157   

Liquidity and Capital Resources for the Years Ended December 31, 2015, 2014 and 2013

     162   

Summary of Results for the Nine Months Ended September 30, 2016 and 2015

     163   

Results of Operations for the Nine Months Ended September 30, 2016 and 2015

     164   

Liquidity and Capital Resources for the Nine Months Ended September 30, 2016 and 2015

     167   

Non-GAAP Financial Measure

     169   

Contractual Obligations and Off-Balance Sheet Arrangements

     170   

Off-Balance Sheet Arrangements

     170   

Seasonality

     171   

Quantitative and Qualitative Disclosures About Market Risk

     171   

Selected Historical Combined Financial Data of the GoTo Business

     172   

Selected Historical Consolidated Financial Data of LMI

     174   

Unaudited Pro Forma Combined Financial Information

     176   

Historical Per Share Data, Market Price and Dividend Data

     196   

Security Ownership of Certain Beneficial Owners, Directors and Executive Officers of LMI

     198   

Description of Capital Stock of LMI Before and After the Merger

     200   

Description of Capital Stock of LMI

     200   

Certain Provisions in the Certificate of Incorporation and Bylaws of LMI

     201   

Limitation of Liability of Directors; Indemnification of Directors

     202   

Exclusive Forum

     203   

Amendments to the Certificate of Incorporation and Bylaws

     204   

Transfer Agent

     204   


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Description of GetGo Capital Stock

     205   

Comparison of the Rights Of Stockholders Before and After the Transactions

     206   

Certain Anti-Takeover Effects of Various Provisions of Delaware Law and LMI’s Certificate of Incorporation and Bylaws

     212   

Certain Relationships and Related Party Transactions

     215   

Legal Matters

     217   

Experts

     217   

Submission of Future Stockholder Proposals

     217   

Proposal 1

     219   

Proposal 2

     220   

Proposal 3

     222   

Proposal 4

     234   

Index to Financial Statements

     F-1   

ANNEX A—Opinion of RBC Capital Markets, LLC

  

ANNEX B—Amendment to LMI’s certificate of incorporation

  

ANNEX C—LMI’s Amended and Restated 2009 Stock Incentive Plan

  


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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

The following are brief answers to some of the common questions that stockholders of LMI and stockholders of Citrix may have regarding the transactions contemplated by the Merger Agreement and the Separation Agreement, which provide for, among other things, the Separation, the Distribution and the Merger, all of which we refer to as the Transactions. For more detailed information about the matters discussed in these questions and answers, see “The Transactions” beginning on page 62 and “The Transaction Agreements” beginning on page 101. These questions and answers are not meant to be a substitute for the information contained in the remainder of this proxy statement/prospectus-information statement, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this proxy statement/prospectus-information statement. Stockholders of LMI and stockholders of Citrix are urged to read this proxy statement/prospectus-information statement in its entirety. Additional important information is also contained in the annexes to this proxy statement/prospectus-information statement. You should pay special attention to the “Risk Factors” beginning on page 33 and “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 56.

 

Q: What are the transactions described in this proxy statement/prospectus-information statement?

 

A: This proxy statement/prospectus-information statement describes the process through which LMI will combine with Citrix’s GoTo Business through a Reverse Morris Trust transaction. References to the “Transactions” mean the transactions contemplated by the Agreement and Plan of Merger among Citrix, GetGo, LMI and Merger Sub dated as of July 26, 2016, as may be amended from time to time, which we refer to as the Merger Agreement, and the Separation and Distribution Agreement by and among Citrix, GetGo and LMI dated as of July 26, 2016, as may be amended from time to time, which we refer to as the Separation Agreement. These agreements provide for, among other things:

 

    the separation of the GoTo Business from the other businesses of Citrix, which we refer to as the Separation;

 

    the distribution of all of the shares of common stock, par value $0.01 per share, of GetGo, which we refer to as GetGo common stock, to the holders of the shares of common stock, par value $0.001 per share, of Citrix, which we refer to as Citrix common stock, on a pro rata basis, which we refer to as the Distribution; and

 

    the merger of Merger Sub with and into GetGo, which we refer to as the Merger, with GetGo continuing as the surviving company and as a wholly owned subsidiary of LMI, as contemplated by the Merger Agreement.

The Separation, the Distribution and the Merger are described in more detail in “The Transactions” and elsewhere in this proxy statement/prospectus-information statement.

 

Q: What is a Reverse Morris Trust transaction?

 

A:

A Reverse Morris Trust transaction structure allows a parent company (in this case, Citrix) to divest a subsidiary (in this case, GetGo) in a tax-efficient manner. The first step of such a transaction is a distribution (a “spin-off”) of the subsidiary’s stock to the parent company stockholders in a transaction that is generally tax-free under Section 355 of the Internal Revenue Code of 1986, as amended, or the Code. The distributed subsidiary then merges with an acquiring third party (in this case, LMI through a merger of Merger Sub with and into GetGo) in a reorganization that is generally tax-free under Section 368 of the Code. Such a transaction can qualify as generally tax-free for U.S. federal income tax purposes for the parent company, its stockholders and the stockholders of the acquiring third party if the transaction structure meets all applicable requirements, including that the parent company stockholders own more than 50% of the stock of the combined entity immediately after the merger. For information about the material tax consequences to Citrix stockholders resulting from the Reverse Morris Trust structure of the Transactions, see “U.S. Federal

 

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  Income Tax Consequences of the Distribution and Merger” beginning on page 96. For information about the material risks that the Distribution, the Merger or both could be taxable to Citrix stockholders or the Distribution could be taxable to Citrix, see “Risk Factors—Risks Related to the Transactions—Depending upon the facts and circumstances, the Distribution, the Merger or both could be taxable to Citrix stockholders, the Distribution could be taxable to Citrix, and GetGo and LMI may be obligated to indemnify Citrix for such taxes and certain tax-related losses” beginning on page 35.

 

Q: What will happen in the Separation?

 

A: Pursuant to the Separation Agreement, in an internal reorganization, Citrix and certain of Citrix’s subsidiaries will engage in a series of transactions in which certain assets and liabilities not currently owned by GetGo will be transferred from Citrix and certain of its subsidiaries to GetGo and entities that will become GetGo subsidiaries. The purpose of these transactions is to separate the GoTo Business from Citrix’s other businesses. These transactions will include a contribution of specified assets and liabilities of the GoTo Business, which we refer to as the Contribution. In consideration for the Contribution, GetGo will issue shares of GetGo common stock to Citrix.

 

Q: What will happen in the Distribution?

 

A: Pursuant to the Separation Agreement, after the Separation and immediately prior to the Merger, Citrix will distribute all of the shares of GetGo common stock that it holds on a pro rata basis to Citrix’s stockholders as of the record date of the Distribution.

 

Q: What will happen in the Merger?

 

A: Pursuant to the Merger Agreement, in the Merger, Merger Sub will merge with GetGo, and GetGo will survive the Merger as a wholly owned subsidiary of LMI. Following completion of the Merger, LMI will continue to be a separately traded public company and will own and operate the combined businesses of LMI and the GoTo Business. At the effective time of the Merger, each issued and outstanding share of GetGo common stock will be automatically converted into the right to receive one share of LMI common stock, par value $0.01 per share, which we refer to as LMI common stock. As a result, immediately following the effective time of the Merger, Citrix equityholders are expected to own approximately 50.1% of LMI common stock on a fully diluted basis, and current LMI equityholders are expected to own approximately 49.9% of LMI common stock on a fully diluted basis. LMI currently expects to issue approximately 27.3 million shares of LMI common stock to Citrix equityholders in connection with the Merger. This number includes an estimated 0.5 million shares of LMI common stock that may be issued following the Merger upon settlement of LMI restricted stock units to be granted to GetGo employees in substitution for outstanding Citrix restricted stock units. However, the actual number of LMI restricted stock units to be issued to GetGo employees in substitution for outstanding Citrix restricted stock units in connection with the Merger (and, accordingly, the number of shares of LMI common stock that may be issued following the Merger upon settlement of the LMI restricted stock units) will be determined shortly following the closing of the Merger based upon the relative stock prices of Citrix prior to the Merger and LMI following the Merger.

 

Q: Will the Distribution and Merger occur on the same day?

 

A: Yes. The Merger will occur immediately after the Distribution.

 

Q: Who will serve on the LMI Board of Directors following completion of the Transactions?

 

A:

Immediately following the Merger, the LMI Board of Directors will consist of nine members: five current LMI directors designated by LMI and four directors designated by Citrix and satisfactory to LMI. Each of the directors designated by Citrix must qualify as an “independent director” of LMI, as such term is defined in NASDAQ Marketplace Rule 5605(a)(2). The directors designated by Citrix are currently expected to be

 

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  Robert M. Calderoni, Jesse A. Cohn, David J. Henshall and Peter J. Sacripanti, each of whom is satisfactory to LMI and would, as of the date of the Merger Agreement, qualify as an independent director of LMI. Michael K. Simon, LMI’s former Chief Executive Officer and current Chairman of the LMI Board of Directors, will remain in place as Chairman of the LMI Board of Directors following the completion of the Transactions. William R. Wagner, LMI’s current President and Chief Executive Officer, will also remain on the LMI Board of Directors. The other three directors designated by LMI will be named at a later date. See “The Transactions—Board of Directors and Executive Officers of LMI Following the Merger; Operations Following the Merger.”

 

Q: Will LMI’s current senior management team manage the business of LMI after the Transactions?

 

A: Yes. LMI’s current President and Chief Executive Officer, William R. Wagner, and current Chief Financial Officer, Edward K. Herdiech, will continue in their roles. Certain members of the GetGo management team are expected to join LMI’s senior management team as well. See “The Transactions—Board of Directors and Executive Officers of LMI Following the Merger; Operations Following the Merger.”

 

Q: What is the estimated total value of the consideration to be paid by LMI in the Merger?

 

A: LMI currently expects to issue approximately 27.3 million shares of LMI common stock in connection with the Merger. This number includes an estimated 0.5 million shares of LMI common stock that may be issued following the Merger upon settlement of LMI restricted stock units to be granted to GetGo employees in substitution for outstanding Citrix restricted stock units. However, the actual number of LMI restricted stock units to be issued to GetGo employees in substitution for outstanding Citrix restricted stock units in connection with the Merger (and, accordingly, the number of shares of LMI common stock that may be issued following the Merger upon settlement of the LMI restricted stock units) will be determined shortly following the closing of the Merger based upon the relative stock prices of Citrix prior to the Merger and LMI following the Merger. See “The Transaction Agreements—The Merger Agreement—Merger Consideration.”

Based upon the reported closing price for LMI common stock on the NASDAQ Global Select Market of $65.31 per share on July 25, 2016, the last trading day before the announcement of the signing of the Merger Agreement, the estimated total value of the shares to be issued by LMI to Citrix equityholders in the Merger would have been approximately $1.8 billion. Based upon the reported closing price for LMI common stock on the NASDAQ Global Select Market of $101.15 per share on December 5, 2016, the estimated total value of the shares to be issued by LMI to Citrix equityholders pursuant to the Merger would have been approximately $2.8 billion. The actual total value of the consideration to be paid by LMI in connection with the Merger will depend on the market price of shares of LMI common stock at the time of the closing of the Merger.

 

Q: Is GetGo required to have certain amounts of cash and/or working capital in connection with the Merger?

 

A:

The Merger Agreement provides that at the closing of the Merger GetGo will have a target amount of cash and cash equivalents equal to $25.0 million, a target amount of non-cash working capital of $29.0 million, a target amount of deferred revenue of $124.0 million, and no indebtedness. The target amount of cash and cash equivalents for this purpose will be reduced by the amount of specified assets as of the closing of the Merger as described in the Merger Agreement. Non-cash working capital for this purpose is calculated excluding cash and cash equivalents, deferred revenue, specified employee-related accruals, tax-related assets and liabilities and specified assets and liabilities, all as described in the Merger Agreement. Based upon the actual amounts of cash and cash equivalents, non-cash working capital and deferred revenue for GetGo at the closing of the Merger, and taking into account any indebtedness of GetGo at the closing of the Merger, GetGo may be required to distribute cash to Citrix or Citrix may be required to contribute cash to GetGo. Any such adjustment will impact the assets held by GetGo at the closing of the Merger but will not impact the number of shares of

 

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  LMI common stock to be issued in the Merger. See “The Transaction Agreements—The Merger Agreement—Cash and Adjustments.”

 

Q: Is the number of shares LMI will issue to Citrix stockholders in the Merger subject to adjustment?

 

A: It is currently expected that LMI will issue approximately 26.9 million shares of LMI common stock to Citrix stockholders in the Merger. However, under certain circumstances, LMI may be required to issue additional shares in the Merger if Citrix otherwise would be unable to receive certain tax opinions. Accordingly, as a result of this adjustment, it is possible that LMI could be required to issue more than 26.9 million shares of LMI common stock to Citrix stockholders in the Merger. See “The Transaction Agreements—The Merger Agreement—Merger Consideration.”

 

Q: Will LMI or GetGo incur indebtedness in connection with the Separation, the Distribution and the Merger?

 

A: It is not anticipated that GetGo will incur or cause to be incurred indebtedness in connection with the Transactions.

The Merger Agreement contemplated that Citrix and LMI would enter into an unsecured credit facility pursuant to which Citrix would provide LMI with a line of credit of up to $25.0 million for the two-year period following the Merger, but Citrix and LMI have waived that requirement. Following the Merger, LMI will continue to be obligated with respect to LMI’s other existing indebtedness and LMI may decide to incur additional indebtedness.

 

Q. What are the “Special Dividends”?

 

A: On July 26, 2016, the LMI Board of Directors declared a cash dividend of $0.50 per share of LMI common stock, payable to LMI’s stockholders of record as of August 8, 2016. The dividend was paid on August 26, 2016. On October 27, 2016, the LMI Board of Directors declared a cash dividend of $0.50 per share of LMI common stock, payable to LMI’s stockholders of record as of November 7, 2016. The dividend was paid on November 22, 2016. The LMI Board of Directors also intends to declare and pay one additional cash dividend, which would be up to $0.50 per share of LMI common stock, as permitted by the Merger Agreement. The dividend is expected to be declared and paid shortly before the consummation of the Transactions, subject to the Merger Agreement being in effect. The Merger Agreement also permits LMI to declare additional dividends as follows: (1) in the event the closing of the Merger does not occur on or before March 31, 2017, LMI may pay an additional dividend of $0.50 per share with respect to the completed first quarter of calendar year 2017; (2) in the event the closing of the Merger does not occur on or before June 30, 2017, LMI may pay an additional dividend of $0.50 per share with respect to the completed second quarter of calendar year 2017; and (3) in the event the closing of the Merger does not occur on or before September 30, 2017, LMI may pay an additional dividend of $0.50 per share with respect to the completed third quarter of calendar year 2017. Accordingly, the “special dividends” are the total amount of up to $3.00 per share permitted to be declared and paid to LMI stockholders under the Merger Agreement, $1.50 of which may only be declared if the Merger does not close prior to certain dates. See “The Transaction Agreements—The Merger Agreement-Conduct of Business Pending the Merger—LMI Special Dividends.”

 

Q: How will the rights of stockholders of Citrix and LMI change after the Merger?

 

A: The rights of stockholders of Citrix will remain the same as prior to the Merger, except that stockholders of Citrix entitled to shares of GetGo common stock in the Distribution will receive shares of LMI common stock and cash paid in lieu of fractional shares in connection with the Merger. Citrix stockholders will retain all of their shares of Citrix common stock and will not be required to pay for any shares of LMI common stock they receive in the Merger. See “Description of Capital Stock of LMI Before and After the Merger—Description of Capital Stock of LMI” and “Comparison of the Rights of Stockholders Before and After the Transactions.”

 

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The rights of stockholders of LMI will not change as a result of the Merger. LMI has proposed to amend its restated certificate of incorporation, which we refer to as LMI’s certificate of incorporation, in connection with the Merger to increase the authorized number of shares of LMI common stock by an additional 75,000,000 shares pursuant to the proposed Charter Amendment. See “Questions and Answers for LMI Stockholders—What are LMI stockholders being asked to vote on at the special meeting?” LMI will not amend its bylaws in connection with the Merger.

 

Q: What are the material tax consequences to Citrix stockholders resulting from the Distribution and the Merger?

 

A: Citrix stockholders are not expected to recognize any gain or loss as a result of the Distribution and the Merger, except for any gain or loss attributable to the receipt of cash in lieu of a fractional share of LMI common stock pursuant to the Merger. The U.S. federal income tax consequences of the Distribution and the Merger are described in more detail under “U.S. Federal Income Tax Consequences of the Distribution and Merger” beginning on page 96.

 

Q: Does LMI have to pay a termination fee to Citrix or reimburse Citrix’s expenses if the Share Issuance is not approved by the LMI stockholders or if the Merger Agreement is otherwise terminated?

 

A: If LMI’s stockholders do not approve the Share Issuance at the LMI special meeting of stockholders and the Merger Agreement is terminated by either Citrix or LMI, LMI is required to reimburse Citrix’s out-of-pocket fees and expenses in connection with the Transactions in an amount up to $10.0 million. In addition, LMI has agreed that if the Merger Agreement is terminated for any reason, LMI will reimburse Citrix’s out-of-pocket costs and expenses incurred in connection with the improvement or development of certain GetGo properties in an amount up to $3.8 million.

In specified circumstances, depending on the reasons for termination of the Merger Agreement, LMI may be required to pay Citrix a termination fee of $62.0 million, which would be reduced by any Transaction expense reimbursement described above but not any property improvement or development expense reimbursement described above. For a discussion of the circumstances under which the termination fee is payable by LMI or the requirement to reimburse expenses applies, see “The Transaction Agreements—The Merger Agreement—Termination Fee and Expenses Payable in Certain Circumstances.”

 

Q: Does Citrix have to pay a termination fee to LMI or reimburse LMI’s expenses if the Merger Agreement is terminated?

 

A: No.

 

Q: What are the anticipated transaction expenses of the Transactions?

 

A: As of the date of this proxy statement/prospectus-information statement, LMI, Citrix and GetGo expect their combined transaction expenses to be approximately $165 to $180 million, approximately $45 to $50 million of which are expected to be incurred by LMI and approximately $120 to $130 million of which are expected to be incurred by Citrix and GetGo on a pre-tax basis. LMI, Citrix and GetGo anticipate that a significant portion of these total transaction expenses will be attributable to advisory fees to be paid to legal, financial and tax advisors, accountants and auditors.

 

Q: Are there risks associated with the Transactions?

 

A: Yes. LMI and GetGo may not realize the expected benefits of the Transactions because of the risks and uncertainties discussed in the section entitled “Risk Factors” beginning on page 33 and the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 56. These risks include, among others, risks relating to the uncertainty that the Transactions will close, the uncertainty that LMI will be able to integrate the GoTo Business successfully, and uncertainties relating to the performance of LMI after the Transactions.

 

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Q: Can LMI or Citrix stockholders demand appraisal of their shares?

 

A: No. Neither LMI nor Citrix stockholders have appraisal rights under Delaware law in connection with the Separation, the Distribution or the Merger.

 

Q: When will the Transactions be completed?

 

A: The Transactions are expected to be completed in the first quarter of 2017, subject to receipt of LMI stockholder approval, applicable antitrust and other regulatory approvals, and satisfaction of other customary closing conditions.

 

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QUESTIONS AND ANSWERS FOR LMI STOCKHOLDERS

The following are some of the questions that stockholders of LMI may have regarding the LMI special meeting of stockholders, and brief answers to those questions. For more detailed information about the matters discussed in these questions and answers, see “The LMI Special Meeting” beginning on page 57. These questions and answers are not meant to be a substitute for the information contained in the remainder of this proxy statement/prospectus-information statement, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this proxy statement/prospectus-information statement. LMI urges its stockholders to read this proxy statement/prospectus-information statement in its entirety prior to making any decision.

 

Q: What are LMI stockholders being asked to vote on at the special meeting?

 

A: LMI stockholders are being asked to approve the issuance of LMI common stock in connection with the Merger, which we refer to as the Share Issuance. LMI stockholder approval of the Share Issuance is required under NASDAQ rules and is a condition to the completion of the Distribution and the Merger.

LMI stockholders are also being asked to adopt an amendment to LMI’s restated certificate of incorporation to increase the authorized number of shares of LMI common stock by an additional 75,000,000 shares, conditioned upon the closing of the Merger, which we refer to as the Charter Amendment. The approval by LMI stockholders of the Charter Amendment is not a condition to the completion of the Distribution or the Merger.

LMI stockholders are also being asked to approve an amendment and restatement of LMI’s Amended and Restated 2009 Stock Incentive Plan to increase the number of shares of LMI common stock that may be issued under the plan by an additional 4,500,000 shares and extend the term of the plan to December 5, 2026, conditioned upon the closing of the Merger, which we refer to as the Plan Amendment. The approval by LMI stockholders of the Plan Amendment is not a condition to the completion of the Distribution or the Merger.

Lastly, LMI stockholders are being asked to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to approve the Share Issuance, which we refer to as the meeting adjournment proposal. The approval by LMI stockholders of the meeting adjournment proposal is not a condition to the completion of the Distribution or the Merger.

 

Q: When and where is the special meeting of LMI stockholders?

 

A: The LMI special meeting of stockholders will be held at the offices of Latham & Watkins LLP, 200 Clarendon Street, 27th Floor, Boston, Massachusetts 02116, on January 25, 2017 at 9:00 a.m., Eastern time.

 

Q: Who can vote at the LMI special meeting of stockholders?

 

A: Only stockholders who own LMI common stock at the close of business on December 9, 2016 are entitled to vote at the special meeting. Each holder of LMI common stock is entitled to one vote per share. There were 25,552,047 shares of LMI common stock outstanding on the record date.

 

Q: How does the LMI Board of Directors recommend that LMI stockholders vote?

 

A:

The LMI Board of Directors has determined that the terms of the Merger Agreement, the Merger, the Transactions, the Share Issuance, the Charter Amendment and the Plan Amendment are advisable, fair to, and in the best interest of LMI and its stockholders. Accordingly, the LMI Board of Directors has unanimously approved the Merger Agreement, the Merger, the Transactions, the Share Issuance, the Charter Amendment and the Plan Amendment. The LMI Board of Directors unanimously recommends that LMI

 

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  stockholders vote “FOR” the proposal to approve the Share Issuance, “FOR” the proposal to approve the Charter Amendment, “FOR” the proposal to approve the Plan Amendment and “FOR” the meeting adjournment proposal.

 

Q: What vote is required to approve each proposal at the LMI special meeting of stockholders?

 

A: In accordance with NASDAQ rules, the Delaware General Corporation Law, which we refer to as the DGCL, and LMI’s organizational documents, the approval of the Share Issuance requires the affirmative vote of a majority of the votes cast by the holders of the shares of LMI common stock present in person or represented by proxy at the special meeting at which a quorum is present. This means the number of shares voted “FOR” the Share Issuance must exceed the number of shares voted “AGAINST” the Share Issuance. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the vote for the Share Issuance.

In accordance with the DGCL and LMI’s organizational documents, the approval of the Charter Amendment requires the affirmative vote of the holders of a majority of the shares of LMI common stock outstanding and entitled to vote at the special meeting. This means that of the outstanding shares, a majority of them must be voted “FOR” the Charter Amendment for it to be approved. Abstentions and broker non-votes will have the effect of a vote “AGAINST” the Charter Amendment.

In accordance with Section 162(m) of the Code, the DGCL and LMI’s organizational documents, the approval of the Plan Amendment requires the affirmative vote of a majority of the votes cast by the holders of the shares of LMI common stock present in person or represented by proxy at the special meeting at which a quorum is present. This means the number of shares voted “FOR” the Plan Amendment must exceed the number of shares voted “AGAINST” the Plan Amendment. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the vote for the Plan Amendment.

In accordance with the DGCL and LMI’s organizational documents, the approval of the meeting adjournment proposal requires the affirmative vote of a majority of the votes cast by the holders of the shares of LMI common stock present in person or represented by proxy at the special meeting. This means the number of shares voted “FOR” the meeting adjournment must exceed the number of shares voted “AGAINST” the meeting adjournment proposal. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the vote for the meeting adjournment proposal.

 

Q: What is a quorum?

 

A: In order for business to be conducted at the LMI special meeting of stockholders, the DGCL and LMI’s bylaws require that a quorum must be present. A quorum consists of the holders of a majority of the shares of LMI common stock outstanding and entitled to vote at the special meeting.

Shares of LMI common stock present in person or represented by proxy (including shares that reflect abstentions) will be counted for the purpose of determining whether a quorum exists. “Broker non-votes” will not be counted for the purpose of determining whether a quorum exists.

If a quorum is not present, the special meeting may be adjourned until a quorum is obtained by the chairman of the meeting or the stockholders.

 

Q: Have any LMI stockholders already agreed to vote in favor of the Share Issuance proposal?

 

A: Yes. Michael K. Simon, Chairman of the LMI Board of Directors and former Chief Executive Officer, has entered into a voting agreement with Citrix in which he has agreed to, among other things, vote his shares of LMI common stock in favor of the Share Issuance and Charter Amendment. See “Additional Agreements Related to the Separation, the Distribution and the Merger—Voting Agreement.” These shares represent more than 3% of the currently outstanding LMI common stock.

 

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Q: What should LMI stockholders do now in order to vote on the proposals being considered at the LMI special meeting?

 

A: LMI stockholders may submit a proxy by mail, telephone or internet by following the instructions on the proxy card.

Submitting a proxy means that a stockholder gives someone else the right to vote his or her shares in accordance with his or her instructions. In this way, the stockholder ensures that his or her vote will be counted even if he or she is unable to attend the LMI special meeting. If an LMI stockholder properly executes a proxy, but does not include specific instructions on how to vote, the individuals named as proxies will vote the LMI stockholders’ shares as follows:

 

    “FOR” the proposal to approve the Share Issuance;

 

    “FOR” the proposal to approve the Charter Amendment;

 

    “FOR” the proposal to approve the Plan Amendment; and

 

    “FOR” the meeting adjournment proposal.

If an LMI stockholder holds shares in “street name,” which means the shares are held of record by a broker, bank or nominee, please see “Q: If an LMI stockholder’s shares are held in ‘street name’ by his or her broker, will the broker vote the shares for the stockholder?” below.

LMI stockholders may also vote in person at the meeting. If an LMI stockholder plans to attend the LMI special meeting and wishes to vote in person, he or she will be given a ballot at the LMI special meeting. Please note, however, that if an LMI stockholder’s shares are held in “street name,” and he or she wishes to vote in person at the LMI special meeting, the LMI stockholder must bring a proxy from the record holder of the shares authorizing him or her to vote at the LMI special meeting. Whether or not an LMI stockholder plans to attend the LMI special meeting, he or she is encouraged to submit his or her proxy as described in this proxy statement/prospectus-information statement.

 

Q: If an LMI stockholder is not going to attend the special meeting, should the stockholder return his or her proxy card or otherwise vote his or her shares?

 

A: Yes. Submitting a proxy by mail, telephone or internet by following the instructions on the proxy card ensures that the stockholder’s shares will be represented and voted at the special meeting, even if the stockholder is unable to or does not attend.

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE ENCOURAGED TO SUBMIT YOUR PROXY AS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS-INFORMATION STATEMENT.

 

Q: If an LMI stockholder’s shares are held in “street name” by his or her broker, will the broker vote the shares for the stockholder?

 

A:

If an LMI stockholder’s shares are held in “street name,” which means such shares are held of record by a broker, bank or nominee, the LMI stockholder will receive instructions from his or her broker, bank or other nominee that he or she must follow in order to have his or her shares of LMI common stock voted. If an LMI stockholder has not received such voting instructions or requires further information regarding such voting instructions, the LMI stockholder should contact his or her bank, broker or other nominee. Brokers, banks or other nominees who hold shares of LMI common stock for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers, banks and other nominees are not allowed to exercise their voting discretion with respect to the approval of matters that are “non-routine” without specific instructions from the beneficial owner. All proposals for the LMI special meeting are non-routine

 

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  and non-discretionary. Broker non-votes are shares held by a broker, bank or other nominee that are represented at the meeting but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal, and the broker, bank or other nominee does not have discretionary voting power on such proposal. If an LMI stockholder’s broker, bank or other nominee holds the LMI stockholder’s shares of LMI common stock in “street name,” the LMI stockholder’s bank, broker or other nominee will vote the LMI stockholder’s shares only if the LMI stockholder provides instructions on how to vote by filling out the voter instruction form sent to him or her by his or her bank, broker or other nominee with this proxy statement/prospectus-information statement.

 

Q: Can LMI stockholders change their vote?

 

A: Yes. Holders of record of LMI common stock who have properly completed and submitted their proxy card or have submitted their proxy by telephone or internet can change their vote before the proxy is voted at the LMI special meeting in any of the following ways:

 

    sending a written notice that is received prior to the special meeting stating that the stockholder revokes his or her proxy to LogMeIn, Inc., Attention: Senior Vice President, General Counsel and Secretary, 320 Summer Street, Boston, Massachusetts 02210;

 

    properly completing, signing and dating a new proxy card bearing a later date and properly submitting it so that it is received prior to the special meeting;

 

    visiting the website shown on the proxy card prior to the special meeting and submitting a new proxy in the same manner that the stockholder would submit his or her proxy via the internet or by calling the toll-free number shown on the proxy card to submit a new proxy by telephone; or

 

    attending the special meeting in person and voting their shares.

Simply attending the special meeting, without voting your shares, will not revoke a proxy.

An LMI stockholder whose shares are held in “street name” by his or her broker and who has directed that person to vote his or her shares should instruct that person to change his or her vote.

 

Q: What will happen if an LMI stockholder abstains from voting, fails to vote or does not direct how to vote on their proxy?

 

A: If an LMI stockholder abstains from voting, it will have no effect on the vote for the Share Issuance, Plan Amendment or meeting adjournment proposals, but will be counted as a vote “AGAINST” the Charter Amendment proposal.

If an LMI stockholder fails to vote (or fails to instruct his or her broker, bank or nominee to vote if his or her shares are held in “street name,” which will result in a broker non-vote), it will have no effect on the vote for the Shares Issuance, Plan Amendment or meeting adjournment proposals, but will be counted as a vote “AGAINST” the Charter Amendment. The failure to vote (or failure to give instructions to vote) may also have the effect of LMI failing to have a quorum at the special meeting. See “Q: What vote is required to approve each proposal at the LMI special meeting of stockholders?” and “Q: What is a quorum?”

All properly signed proxies that are received prior to the special meeting and that are not revoked will be voted at the special meeting according to the instructions indicated on the proxies. If a properly executed proxy is returned without an indication as to how shares of LMI common stock represented are to be voted with regard to a particular proposal, the shares of LMI common stock represented by the proxy will be voted in accordance with the recommendation of the LMI Board of Directors and therefore, “FOR” the proposal to approve the Share Issuance, “FOR” the proposal to approve the Charter Amendment, “FOR” the proposal to approve the Plan Amendment and “FOR” the meeting adjournment proposal.

 

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QUESTIONS AND ANSWERS FOR CITRIX STOCKHOLDERS

The following are some of the questions that the stockholders of Citrix may have regarding the Transactions, and brief answers to those questions. For more detailed information about the matters discussed in these questions and answers, see “The Transactions” beginning on page 62. These questions and answers, as well as the following summary, are not meant to be a substitute for the information contained in the remainder of this proxy statement/prospectus-information statement, and this information is qualified in its entirety by the more detailed descriptions and explanations contained elsewhere in this proxy statement/prospectus-information statement. Citrix’s stockholders are urged to read this proxy statement/prospectus-information statement in its entirety. You should pay special attention to the “Risk Factors” beginning on page 33 and “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 56.

 

Q: What will Citrix stockholders be entitled to receive pursuant to the Distribution and the Merger?

 

A: It is currently expected that approximately 26.9 million shares of GetGo common stock will be distributed to Citrix stockholders in connection with the Distribution, and each share of GetGo common stock will be converted into the right to receive one share of LMI common stock pursuant to the Merger. As a result, it is currently estimated that, based on the number of shares of Citrix common stock outstanding on December 5, 2016, Citrix stockholders will receive approximately 0.17207 shares of LMI common stock pursuant to the Merger for each share of Citrix common stock that they hold on the record date for the Distribution. The actual number of shares of LMI common stock that Citrix stockholders will receive with respect to each share of Citrix common stock will be determined based on the number of shares of Citrix common stock outstanding on the record date. Therefore, the actual number of shares of LMI common stock that Citrix stockholders will be entitled to receive in the Merger may be higher or lower if the number of outstanding shares of Citrix common stock changes for any reason.

Based on the closing price of LMI common stock of $101.15 on December 5, 2016, as reported by the NASDAQ Global Select Market, and the assumptions described above, the approximate value Citrix equityholders will receive in the Merger will equal $2.8 billion in the aggregate and $17.40 per share of Citrix common stock they own on December 5, 2016. However, any change in the market value of LMI common stock at the effective time of the Merger or the number of shares of Citrix common stock outstanding and entitled to receive GetGo common stock in the Distribution will cause the estimated per share value Citrix stockholders receive in the Merger to change. Also, those Citrix stockholders who would otherwise receive a fractional share of LMI common stock pursuant to the Merger may receive a different per share value with respect to fractional shares when those fractional shares are liquidated by the exchange agent. See “The Transaction Agreements—The Merger Agreement—Merger Consideration.”

 

Q: Has Citrix set a record date for the Distribution?

 

A: No. Citrix will publicly announce the record date for the Distribution when the record date has been determined. This announcement will be made prior to the completion of the Distribution and the Merger.

 

Q: What will happen to the shares of Citrix common stock owned by Citrix stockholders?

 

A: Holders of Citrix common stock will retain all of their shares of Citrix common stock. The Distribution will not affect the number of outstanding shares of Citrix common stock or any rights of Citrix stockholders.

 

Q: How will shares of LMI common stock be distributed to Citrix stockholders?

 

A: Holders of Citrix common stock on the record date for the Distribution will receive shares of LMI common stock in book-entry form. Stockholders of record will receive additional information from the exchange agent shortly after the Distribution. Beneficial holders will receive information from their brokerage firms or other nominees.

 

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Q: Will Citrix stockholders who sell their shares of Citrix common stock shortly before the completion of the Distribution and the Merger still be entitled to receive shares of LMI common stock with respect to the shares of Citrix common stock that were sold?

 

A: It is currently expected that beginning two business days before the record date to be established for the Distribution, and continuing through the closing date of the Merger (or the previous business day, if the Merger closes before the opening of trading in Citrix common stock and LMI common stock on the NASDAQ Global Select Market on the closing date), there will be two markets in Citrix common stock on the NASDAQ Global Select Market: a “regular way” market and an “ex-distribution” market.

If a Citrix stockholder sells shares of Citrix common stock in the “regular way” market under the ticker symbol “CTXS” during this time period, that Citrix stockholder will be selling both his shares of Citrix common stock and the right (represented by a “due-bill”) to receive shares of GetGo common stock in the Distribution that will be converted into shares of LMI common stock, and cash in lieu of fractional shares (if any), at the closing of the Merger. Citrix stockholders should consult their brokers before selling their shares of Citrix common stock in the “regular way” market during this time period to be sure they understand the effect of NASDAQ’s “due-bill” procedures. The “due-bill” process is not managed, operated or controlled by Citrix or LMI.

If a Citrix stockholder sells shares of Citrix common stock in the “ex-distribution” market during this time period, that Citrix stockholder will be selling only his shares of Citrix common stock, and will retain the right to receive shares of GetGo common stock in the Distribution that will be converted into shares of LMI common stock, and cash in lieu of fractional shares (if any), at the closing of the Merger. It is currently expected that “ex-distribution” trades of Citrix common stock will settle within three business days after the closing date of the Merger and that if the Merger is not completed all trades in this “ex-distribution” market will be cancelled.

After the closing date of the Merger, shares of Citrix common stock will no longer trade in this “ex-distribution” market, and shares of Citrix common stock that are sold in the “regular way” market will no longer reflect the right to receive shares of GetGo common stock in the Distribution that will be converted into shares of LMI common stock, and cash in lieu of fractional shares (if any), at the closing of the Merger.

 

Q: May Citrix stockholders sell the shares of LMI common stock which they are entitled to receive in the Merger prior to receiving those shares of LMI common stock?

 

A: It is currently expected that beginning two business days before the record date to be established for the Distribution, and continuing through the closing date of the Merger (or the previous business day, if the Merger closes before the opening of trading in Citrix common stock and LMI common stock on the NASDAQ Global Select Market on the closing date), there will be two markets in LMI common stock on the NASDAQ Global Select Market: a “regular way” market and a “when issued” market.

The “regular way” market will be the regular trading market for issued shares of LMI common stock under the ticker symbol “LOGM.”

The “when issued” market will be a market for the shares of LMI common stock that will be issued to Citrix stockholders at the closing of the Merger. If a Citrix stockholder sells shares of LMI common stock in the “when issued” market during this time period, that Citrix stockholder will be selling his right to receive shares of GetGo common stock in the Distribution that will be converted into shares of LMI common stock, and cash in lieu of fractional shares (if any), at the closing of the Merger. It is currently expected that “when issued” trades of LMI common stock will settle within three business days after the closing date of the Merger and that if the Merger is not completed, all trades in this “when issued” market will be cancelled. After the closing date of the Merger, shares of LMI common stock will no longer trade in this “when issued” market.

 

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Q: Are Citrix stockholders required to do anything?

 

A: Citrix stockholders are not required to take any action to approve the Separation, the Distribution or the Merger. Citrix is not asking its stockholders for a proxy, and Citrix stockholders are requested not to send a proxy to Citrix. However, Citrix stockholders should carefully read this proxy statement/prospectus-information statement, which contains important information about the Separation, the Distribution, the Merger, the GoTo Business and LMI. After the Merger, LMI will mail to holders of Citrix common stock who are entitled to receive shares of LMI common stock pursuant to the Merger, book-entry statements evidencing their ownership of LMI common stock, cash payments in lieu of fractional shares (if any) and related tax information, and other information regarding their receipt of shares of LMI common stock.

CITRIX STOCKHOLDERS WILL NOT BE REQUIRED TO SURRENDER THEIR SHARES OF CITRIX COMMON STOCK IN THE DISTRIBUTION OR THE MERGER AND THEY SHOULD NOT RETURN THEIR CITRIX STOCK CERTIFICATES. THE TRANSACTIONS WILL NOT RESULT IN ANY CHANGE IN CITRIX STOCKHOLDERS’ OWNERSHIP OF CITRIX COMMON STOCK FOLLOWING THE MERGER.

 

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SUMMARY

This summary, together with the sections titled “Questions and Answers About the Transactions,” “Questions and Answers for LMI Stockholders” and “Questions and Answers for Citrix Stockholders” immediately preceding this summary, provide a summary of the material terms of the Separation, the Distribution and the Merger. These sections highlight selected information contained in this proxy statement/prospectus-information statement and may not include all the information that is important to you. To better understand the proposed Separation, the Distribution and the Merger, and the risks related to the Transactions, and for a more complete description of the legal terms of the Separation, the Distribution and the Merger, you should read this entire proxy statement/prospectus-information statement carefully, including the annexes, as well as those additional documents to which we refer you. See also “Where You Can Find Additional Information; Incorporation By Reference.”

The Companies (See “Information About Merger Sub and LMI,” “Information About Citrix,”, and “Information About the GoTo Business” beginning on page 140)

LogMeIn, Inc.

320 Summer Street

Boston, Massachusetts 02210

Telephone: (781) 638-9050

LMI, a Delaware corporation, is a leading provider of cloud-based solutions that enable people and companies to connect and engage with their workplace, colleagues, customers and products anywhere, anytime. LMI’s services are focused on high growth markets such as Identity and Access Management, Collaboration and the Internet of Things and are delivered via the cloud as hosted services, commonly called software-as-a-service, or SaaS.

Lithium Merger Sub, Inc.

c/o LogMeIn, Inc.

320 Summer Street

Boston, Massachusetts 02210

Telephone: (781) 638-9050

Merger Sub, a wholly owned subsidiary of LMI, was organized in the State of Delaware on July 22, 2016 for the purposes of merging with and into GetGo in the Merger. Merger Sub has not carried on any activities other than in connection with the Merger Agreement. For more information on Merger Sub, see “Information About Merger Sub and LMI.”

Citrix is a Delaware corporation founded on April 17, 1989. Citrix develops and sells products and services that enable the secure and reliable delivery of applications and data over public, private or hybrid clouds or networks, to virtually any type of device. For 27 years, Citrix has innovated and delivered products consistent with a vision of a workplace where people can securely and easily collaborate across boundaries of time, place and device, creating better business outcomes, improving productivity, and making businesses far more agile and responsive to change—both in information technology change as well as business change. Citrix markets and licenses its products directly to customers, over the Web, and through systems integrators, in addition to indirectly through value-added resellers, value-added distributors, original equipment manufacturers, and service providers. For more information on Citrix, see “Information About Citrix.”

GetGo, Inc.

7414 Hollister Avenue

Goleta, California 93117

Telephone: (805) 690-6400

 



 

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GetGo was formed on March 31, 2016 to own and operate Citrix’s GoTo Business. The service offerings of the GoTo Business are delivered entirely as cloud-based software-as-a-service, and include collaboration and engagement tools such as GoToMeeting and GoToWebinar, business voice solutions such as Grasshopper, and remote access and support tools such as GoToMyPC and GoToAssist. These service offerings are platform agnostic, working across all leading desktop and mobile platforms and devices. In connection with the Transactions, Citrix will cause specified assets and liabilities used in the GoTo Business to be conveyed to GetGo and then distribute pro rata all of the shares of GetGo common stock to Citrix stockholders. Each share of GetGo common stock will be converted into the right to receive one share of LMI common stock pursuant to the Merger. For more information on the GoTo Business, see “Information About the GoTo Business.”

The Transactions (See “The Transactions” beginning on page 62)

On July 26, 2016, LMI and Citrix announced that they had entered into a Merger Agreement pursuant to which LMI will combine with Citrix’s GoTo Business through the Merger on the terms and conditions set forth therein. As a result of and immediately following the transactions contemplated by the Merger Agreement, Citrix equityholders as of the record date of the Distribution are expected to own approximately 50.1% of LMI common stock after the Merger, and current LMI equityholders are expected to own approximately 49.9% of LMI common stock after the Merger, in each case, on a fully diluted basis. Citrix stockholders will retain the shares of Citrix common stock that they held prior to the Merger.

In connection with the Transactions, LMI, Citrix and GetGo have entered into a Separation Agreement to effect the Separation and Distribution and have or will enter into several other agreements to provide a framework for their relationship after the Distribution and the Merger. These agreements provide for the allocation between Citrix, on the one hand, and GetGo and LMI, on the other hand, of certain assets, liabilities and obligations related to the GoTo Business and will govern the relationship between Citrix, GetGo and LMI after the Distribution and the Merger (including with respect to employee matters, intellectual property rights and tax matters). In connection with the transactions contemplated by the Separation Agreement:

 

  (1) GetGo and Citrix will enter into a Transition Services Agreement, pursuant to which each party will, on a transitional basis, provide the other party with certain support services and other assistance after the Distribution and Merger;

 

  (2) LMI, GetGo and Citrix have entered into an Amended and Restated Tax Matters Agreement, providing for, among other things, the allocation between Citrix, on the one hand, and GetGo and LMI, on the other hand, of certain tax assets and obligations;

 

  (3) LMI, GetGo and Citrix will enter into an Intellectual Property License Agreement, which we refer to as the IP License Agreement, pursuant to which Citrix will grant GetGo a non-exclusive license to certain intellectual property owned by Citrix and its subsidiaries and related to the GoTo Business, and GetGo will grant Citrix a non-exclusive license to certain intellectual property owned by GetGo and its subsidiaries; and

 

  (4) LMI, GetGo and Citrix will enter into an Employee Matters Agreement, which will govern, among other things, Citrix, GetGo and LMI’s obligations with respect to current and former employees of the GoTo Business.

The Merger Agreement contemplated that LMI and Citrix would enter into an agreement regarding an unsecured revolving credit facility, which we refer to as the Loan Agreement, pursuant to which Citrix would provide LMI with a line of credit of up to $25.0 million for the two-year period following the consummation of the Transactions, but LMI and Citrix have waived that requirement.

For a more complete discussion of the agreements related to the Transactions, see “The Transaction Agreements” and “Additional Agreements Related to the Separation, the Distribution and the Merger.”

 



 

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Overview (See “The Transactions—Transaction Sequence” beginning on page 62)

Below is a step-by-step list illustrating the sequence of material events relating to the Separation, the Distribution and the Merger. Each of these events is discussed in more detail elsewhere in this proxy statement/prospectus-information statement. LMI and Citrix anticipate that the Separation, Distribution and Merger will occur in the following order:

Step 1: At or prior to the date of the Distribution, referred to as the Distribution Date, as part of the Separation, Citrix, GetGo and certain of each of their subsidiaries will engage in a series of steps, which may include transfers of securities, formation of new entities or other actions, to effect an internal reorganization. The internal reorganization is referred to as the Reorganization.

Step 2: On the Distribution Date, to the extent not previously effected pursuant to the Reorganization, (a) Citrix and certain Citrix subsidiaries will transfer to GetGo or a GetGo designee certain assets related to the GoTo Business and certain liabilities related to the GoTo Business, and (b) GetGo and certain GetGo subsidiaries will transfer to Citrix or a Citrix designee assets excluded from the GoTo Business and liabilities excluded from the GoTo Business. The separation of the GoTo Business from the other businesses of Citrix pursuant to the Separation Agreement is referred to as the Separation.

Step 3: Following the Separation in Step 2, Citrix will distribute shares of GetGo common stock to the stockholders of Citrix, referred to as the Distribution. Citrix will effect the Distribution by distributing on a pro rata basis all of the shares of GetGo common stock it holds to Citrix stockholders entitled to shares of GetGo common stock in the Distribution as of the record date of the Distribution. Citrix will deliver the shares of GetGo common stock to its transfer agent, who will hold such shares for the benefit of Citrix stockholders.

Step 4: Immediately following the Distribution, Merger Sub will merge with and into GetGo, with GetGo being the surviving corporation of the Merger as a wholly owned subsidiary of LMI. In the Merger, each share of GetGo common stock held by Citrix stockholders will be automatically converted into the right to receive one share of LMI common stock. Citrix equityholders are expected to collectively own approximately 50.1% of the shares of LMI common stock on a fully diluted basis after the Merger, and LMI equityholders immediately prior to the Merger are expected to collectively own approximately 49.9% of the shares of LMI common stock on a fully diluted basis after the Merger.

Step 5: The exchange agent will distribute to Citrix stockholders entitled to shares of GetGo common stock in the Distribution shares of LMI common stock in the form of a book-entry authorization and cash in lieu of fractional shares (if any) in accordance with the terms of the Merger Agreement.

 



 

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Set forth below are diagrams that graphically illustrate, in simplified form, the existing corporate structure of the parties to the Transactions, the corporate structure of the parties immediately following the Distribution but before the Merger, and the final corporate structure immediately following the consummation of the Merger.

 

 

LOGO

 

 

LOGO

The Separation and the Distribution (See “The Transactions—The Separation and Distribution” beginning on page 64)

As part of the Separation and immediately prior to the Distribution, to the extent not previously effected pursuant to the Reorganization, (a) Citrix and certain Citrix subsidiaries will transfer to GetGo or a GetGo designee certain assets related to the GoTo Business and certain liabilities related to the GoTo Business, and (b) GetGo and certain GetGo subsidiaries will transfer to Citrix or a Citrix designee certain assets excluded from

 



 

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the GoTo Business and certain liabilities excluded from the GoTo Business, in order to separate the GoTo Business from Citrix’s other businesses prior to the Distribution.

After the Separation and immediately prior to the Merger, Citrix will distribute all of the shares of GetGo common stock it holds to the Citrix stockholders as of the record date of the Distribution on a pro rata basis. Citrix will effect the Distribution by delivering the shares of GetGo common stock to its transfer agent. The transfer agent will hold such shares for the benefit of Citrix stockholders that are entitled to shares of GetGo common stock pending the effective time of the Merger and the automatic conversion of such shares of GetGo common stock into shares of LMI common stock. After the Distribution, Citrix will not own any shares of GetGo common stock.

Conditions to the Separation and the Distribution (See “The Transaction Agreements—The Separation Agreement—Conditions to the Distribution” beginning on page 126)

The obligation of Citrix to consummate the Distribution is subject to the satisfaction or waiver by Citrix (to the extent permitted by applicable law) in accordance with the Merger Agreement of each of the conditions to the obligations of the parties to the Merger Agreement to consummate the Merger and effect the other transactions contemplated by the Merger Agreement. The parties have agreed that the Distribution will occur on the same date as the closing of the Merger.

The Merger; Merger Consideration (See “The Transactions—The Merger” beginning on page 64)

Pursuant to the Merger Agreement, immediately after the Distribution, Merger Sub will merge with GetGo and GetGo will survive the Merger as a wholly owned subsidiary of LMI. After the Merger, LMI will continue to be a separately traded public company and will own and operate the combined businesses of LMI and the GoTo Business.

At the effective time of the Merger, each issued and outstanding share of GetGo common stock (except for shares held as treasury stock, which will be cancelled) will be automatically converted into the right to receive one share of LMI common stock. The conversion set forth in the Merger Agreement, after giving effect to the issuance of GetGo shares to Citrix under the Separation Agreement and the distribution of GetGo shares to the stockholders of Citrix in the Distribution, is expected to result in Citrix equityholders collectively holding approximately 50.1% of the shares of LMI common stock on a fully diluted basis immediately following the Merger. It is currently estimated that Citrix equityholders will be entitled to receive approximately 27.3 million shares of LMI common stock pursuant to the Merger. This number includes an estimated 0.5 million shares of LMI common stock that may be issued following the Merger upon settlement of LMI restricted stock units to be granted to GetGo employees in substitution for outstanding Citrix restricted stock units in connection with the Merger.

Pursuant to an adjustment provision in the Merger Agreement, in the event that Citrix would be unable to receive the Distribution Tax Opinion or the Citrix Merger Tax Opinion, or LMI would be unable to receive and provide a copy to Citrix of the LMI Merger Tax Opinion (each as defined in “U.S. Federal Income Tax Consequences of the Distribution and Merger” beginning on page 96) because the percentage of outstanding shares of LMI common stock to be received by stockholders of GetGo with respect to GetGo common stock that was not acquired directly or indirectly pursuant to a plan (or series of related transactions) which includes the Distribution (within the meaning of Section 355(e) of the Code), which we refer to as Qualified GetGo Common Stock, would be less than 50.1% of all outstanding LMI common stock (determined before any adjustment pursuant to this provision), then the aggregate number of shares of LMI common stock into which the shares of GetGo common stock will automatically be converted in the Merger may be increased such that the number of shares of LMI common stock to be received by stockholders of GetGo with respect to Qualified GetGo Common

 



 

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Stock will equal 50.1% of all outstanding shares of LMI common stock. As a result of the adjustment provision, it is possible that LMI could be required to issue additional shares of LMI common stock pursuant to the Merger. However, it is not currently expected that this adjustment provision will be triggered in the Merger. The adjustment mechanism is subject to the requirements that:

 

  (1) prior to an adjustment, Citrix must first provide notice to LMI describing in detail the reasons for the adjustment and must consider in good faith comments provided by LMI; and

 

  (2) in certain cases the target amount of cash and cash equivalents required to be on hand at GetGo at the effective time of the Merger will be increased by an amount equal to $63.92 multiplied by the number of additional shares of LMI common stock to be issued pursuant to the adjustment.

No fractional shares of LMI common stock will be issued pursuant to the Merger. All fractional shares of LMI common stock that a Citrix stockholder entitled to shares of GetGo common stock in the Distribution would otherwise be entitled to receive as a result of the Merger will be aggregated by the exchange agent selected by Citrix, and the exchange agent will cause the whole shares obtained by such aggregation to be sold in the open market or otherwise at then-prevailing market prices no later than five business days after the Distribution. The exchange agent will make available the net proceeds of the sale, after deducting agent fees estimated at $0.05 per share, on a pro rata basis, without interest, as soon as practicable following the Merger to those Citrix stockholders entitled to shares of GetGo common stock in the Distribution that would otherwise be entitled to receive such fractional shares of LMI common stock pursuant to the Merger. Any cash in lieu of fractional shares paid in connection with the Merger will be reduced by any applicable tax withholding. See “U.S. Federal Income Tax Consequences of the Distribution and Merger—Information Reporting and Backup Withholding” for further information.

Conditions to the Merger (See “The Transaction Agreements—The Merger Agreement—Conditions to the Merger” beginning on page 118)

As more fully described in this proxy statement/prospectus-information statement and in the Merger Agreement, each of LMI’s, Merger Sub’s, Citrix’s and GetGo’s obligations to effect the Merger are subject to the satisfaction, or to the extent permitted by law, waiver, of the following conditions, which we refer to as the Joint Conditions to the Merger:

 

    the consummation in all material respects of the Reorganization, the Separation and the Distribution in accordance with the Separation Agreement;

 

    the effectiveness of the registration statement of LMI and the registration statement of GetGo and the absence of any stop order issued by the SEC or any pending proceeding before the SEC seeking a stop order with respect thereto;

 

    the approval for listing on the NASDAQ Global Select Market of the shares of LMI common stock to be issued in the Merger;

 

    the approval by LMI stockholders of the Share Issuance;

 

    the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act;

 

    consent of the FCC and certain other state communications authorities; and

 

    the absence of any law or order by a governmental authority that enjoins or makes illegal the consummation of the Reorganization, the Distribution or the Merger.

 



 

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LMI’s and Merger Sub’s obligations to effect the Merger are subject to the satisfaction or, if permitted by applicable law, waiver, of the following additional conditions:

 

    the performance or compliance in all material respects by Citrix and GetGo of all covenants required to be complied with or performed by them on or prior to the effective time of the Merger under the Merger Agreement;

 

    the truthfulness and correctness in all material respects of Citrix’s representations and warranties with respect to corporate existence and power and authority, corporate organization, approvals, certain subsidiaries and brokers as of the date of the Merger;

 

    the truthfulness and correctness in all respects of Citrix’s representations and warranties with respect to the capital stock of GetGo as of the date of the Merger (except for de minimis deviations);

 

    the truthfulness and correctness in all respects of all other representations and warranties made by Citrix in the Merger Agreement (without giving effect to any materiality, material adverse effect or similar qualifiers) as of the date of the Merger (except for certain representations and warranties that by their terms address matters only as of a specified date, which are to be true and correct only as of such specified date), except as would not have a material adverse effect on the GoTo Business;

 

    the receipt by LMI of a legal opinion regarding certain tax matters in connection with the Merger from LMI’s tax counsel, and copies of legal opinions received by Citrix from Citrix’s tax counsel regarding certain tax matters in connection with the Distribution and the Merger;

 

    execution and delivery of the Loan Agreement by Citrix (which condition LMI and Citrix have waived);

 

    the execution and delivery by Citrix of a certificate stating that the interests of GetGo are not U.S. real property interests for purposes of certain U.S. Treasury regulations; and

 

    the entry by Citrix and GetGo into all other applicable documents relating to the Transactions, and performance in all material respects of all covenants thereunder to be performed or complied with prior to the closing of the Merger.

Citrix’s and GetGo’s obligations to effect the Merger are subject to the satisfaction or, if permitted by applicable law, waiver, of the following additional conditions:

 

    the performance or compliance in all material respects by LMI of all covenants required to be complied with or performed by it on or prior to the effective time of the Merger under the Merger Agreement;

 

    the truthfulness and correctness in all material respects of LMI’s representations and warranties with respect to corporate existence and power and authority, corporate organization, approvals and brokers as of the date of the Merger;

 

    the truthfulness and correctness in all respects of LMI’s representations and warranties with respect to the capital stock of LMI as of the date of the Merger (except for de minimis deviations);

 

    the truthfulness and correctness in all respects of all other representations and warranties made by LMI in the Merger Agreement (without giving effect to any materiality, material adverse effect or similar qualifiers) as of the date of the Merger (except for certain representations and warranties that by their terms address matters only as of a specified date, which are to be true and correct only as of such specified date), except as would not have a material adverse effect on LMI;

 

    the receipt by Citrix of legal opinions from Citrix’s tax counsel regarding certain tax matters in connection with the Distribution and the Merger, and a copy of a legal opinion received by LMI from LMI’s tax counsel regarding certain tax matters in connection with the Merger; and

 



 

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    the entry by LMI and Merger Sub into all applicable other documents related to the Transaction, and performance in all material respects of all covenants thereunder to be performed or complied with prior to the closing of the Merger.

Voting by LMI Directors and Executive Officers (See “The LMI Special Meeting—Voting by LMI Directors and Executive Officers” beginning on page 60)

At the close of business on the record date for the LMI special meeting, LMI directors and executive officers and their affiliates were entitled to vote approximately 4.7% of the shares of LMI common stock outstanding on the record date. In addition, the Chairman of the LMI Board of Directors, who owns more than 3% of the currently outstanding LMI common stock, has entered into a voting agreement with Citrix in connection with the Merger Agreement in which he agreed to vote all shares of LMI common stock held by him in favor of the Share Issuance and the Charter Amendment. See “Additional Agreements Related to the Separation, the Distribution and the Merger—Voting Agreement.” LMI currently expects that all LMI directors and executive officers will vote their shares in favor of the Share Issuance, the Charter Amendment, the Plan Amendment and the meeting adjournment proposal.

No vote of Citrix stockholders is required in connection with the Transactions, and the only vote required with respect to GetGo is by Citrix as its sole stockholder, which stockholder approval has been obtained. No directors, executive officers or affiliates of GetGo or Citrix will have voting rights in connection with the Transactions with respect to their ownership of any Citrix common stock or GetGo common stock.

Opinion of LMI’s Financial Advisor (See “The Transactions—Opinion of LMI’s Financial Advisor” beginning on page 80)

LMI has retained RBC Capital Markets, LLC, referred to as RBC Capital Markets, as its financial advisor in connection with the Merger. As part of this engagement, RBC Capital Markets delivered a written opinion, dated July 26, 2016, to the LMI Board as to the fairness, from a financial point of view and as of such date, to LMI of the aggregate merger consideration to be paid by LMI pursuant to the Merger Agreement. For purposes of RBC Capital Markets’ analyses and opinion, the term aggregate merger consideration refers to the 26,868,269 shares of LMI common stock issuable in the Merger in exchange for all outstanding shares of GetGo common stock. The full text of RBC Capital Markets’ written opinion, dated July 26, 2016, is attached as Annex A to this proxy statement/prospectus-information statement and is incorporated by reference herein and sets forth, among other things, the procedures followed, assumptions made, factors considered and qualifications and limitations on the review undertaken by RBC Capital Markets in connection with its opinion. RBC Capital Markets delivered its opinion to the LMI Board for the benefit, information and assistance of the LMI Board (in its capacity as such) in connection with its evaluation of the proposed Merger. RBC Capital Markets’ opinion addressed only the fairness, from a financial point of view and as of the date of such opinion, to LMI of the aggregate merger consideration to be paid by LMI pursuant to the Merger Agreement (to the extent expressly specified in such opinion) and did not in any way address any related transactions or other terms, conditions, implications or other aspects of the Merger. RBC Capital Markets’ opinion also did not address the underlying business decision of LMI to engage in the Merger or any related transactions or the relative merits of the Merger or any related transactions compared to any alternative business strategy or transaction that may be available to LMI or in which LMI might engage. RBC Capital Markets does not express any opinion and does not make any recommendation to any stockholder as to how such stockholder should vote or act with respect to any proposal to be voted upon in connection with the Merger, any related transactions or otherwise.

 



 

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Board of Directors and Management of LMI After the Merger (See “The Transactions—Board of Directors and Executive Officers of LMI Following the Merger; Operations Following the Merger” beginning on page 91)

Immediately following the Merger, the number of directors comprising the LMI Board of Directors will consist of nine directors, including five of the current directors on the LMI Board of Directors and four individuals designated by Citrix and satisfactory to LMI. The Citrix director designees will be assigned to

Class I, Class II and Class III of the LMI Board of Directors. The Citrix director designees are currently expected to be Robert Calderoni, Jesse Cohn, Peter Sacripanti and David Henshall. However, the appointment of Jesse Cohn to the LMI Board of Directors is conditioned upon the execution of a Cooperation Agreement by Elliott International Capital Advisors Inc. and certain of its affiliates, the form of which is attached to the Merger Agreement. See “Additional Agreements Related to the Separation, the Distribution and the Merger—Cooperation Agreement.”

Interests of Certain Persons in the Merger (See “The Transactions—Interests of Certain Persons in the Merger” on page 92)

Certain of LMI’s directors and executive officers have financial interests in the Transactions that may be different from, or in addition to, the interests of LMI’s stockholders generally. The members of the LMI Board of Directors were aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Transactions, including the Share Issuance and the Merger, and in recommending to LMI’s stockholders that they vote to approve the Share Issuance. At the close of business on the record date for the LMI special meeting, LMI’s directors and executive officers beneficially owned approximately 4.7% of the outstanding shares of LMI’s common stock.

The compensation committee of the LMI Board of Directors will continue to oversee LMI’s executive compensation program and approve all executive compensation decisions after the Merger. LMI’s compensation committee is expected to review its executive compensation program with respect to the executive officers of LMI after the Merger but has not yet made any determinations with respect to the compensation of those officers following the Merger.

As with all Citrix stockholders, if a director or executive officer of GetGo owns shares of Citrix common stock on the record date for the Distribution, such person will participate in the Distribution and the Merger on the same terms as other Citrix stockholders. All of GetGo’s outstanding common stock is currently owned directly by Citrix. None of GetGo’s directors or executive officers, other than Christopher Hylen, Citrix’s Senior Vice President and General Manager of the GoTo Business, will receive any severance or other compensation as a result of the Merger.

Risk Factors (See “Risk Factors” beginning on page 33)

LMI stockholders and Citrix stockholders should carefully consider the matters described in the section “Risk Factors,” as well as other information included in this proxy statement/prospectus-information statement and the other documents to which they have been referred.

Regulatory Approvals (See “The Transactions—Regulatory Approvals” beginning on page 93)

Under the HSR Act and related rules, the Merger may not be completed until the parties have filed notification and report forms with the U.S. Federal Trade Commission and the Antitrust Division of the Department of Justice, which we refer to as the Antitrust Division, and observed a specified statutory waiting period. LMI and Citrix filed the requisite notification and report forms with the U.S. Federal Trade Commission and Antitrust Division in August 2016 and received notice of the early termination of the waiting period under the HSR Act in September 2016.

Under the Communications Act of 1934, as amended, or the Communications Act, the Merger may not be completed unless the FCC approves the transfer of control of authorizations of certain Citrix subsidiaries to LMI.

 



 

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In connection with such approval, the FCC must determine whether LMI is qualified to control the FCC authorizations and whether such transfer of control is consistent with the Communications Act and FCC rules and would serve the public interest, convenience and necessity. The application for FCC consent to the transaction was filed in August 2016 and FCC consent was received in September 2016.

In addition, the Transactions require the approval of certain state public utility commissions or similar state authorities that have jurisdiction over authorizations to provide telecommunications services held by Grasshopper Group, LLC, Citrix Communications LLC, and Citrix Communications Virginia LLC, which we refer to as the Citrix Telecommunications Subsidiaries. As a general matter, those state commissions, consistent with their states’ laws, must determine whether LMI is qualified to control the state authorizations and whether the transfer of control of such authorizations is consistent with the public interest, convenience and necessity. With respect to the state approvals, Citrix and LMI have agreed that satisfaction of the relevant closing condition requires evidence of consent, approval, or other authorization, if required, from state commissions covering not less than 90% of the aggregate number of audio service subscribers of the Citrix Telecommunications Subsidiaries.

Termination (See “The Transaction Agreements—The Merger Agreement—Termination” beginning on page 120)

The Merger Agreement may be terminated prior to the completion of the Merger by the written consent of Citrix and LMI. In addition, subject to specified qualifications and exceptions, either Citrix or LMI may terminate the Merger Agreement prior to the completion of the Merger if:

 

    the Merger has not been consummated on or prior to July 26, 2017 (subject to extension to October 26, 2017 under certain circumstances if all of the closing conditions have been satisfied or waived except for the conditions related to competition law approvals, communications law approvals or absence of governmental orders prohibiting the Merger), which we refer to as the Termination Date;

 

    any governmental authority has issued an order, decree or ruling or taken any other action permanently enjoining the Transactions, and such order, decree, ruling or other action has become final and nonappealable; or

 

    LMI’s stockholders fail to approve the Share Issuance at the special meeting of LMI’s stockholders (including any adjournment, continuation or postponement thereof).

In addition, subject to specified qualifications and exceptions, Citrix may terminate the Merger Agreement if:

 

    LMI has breached any representation, warranty, covenant or agreement in the Merger Agreement that would cause the Joint Conditions to the Merger or the conditions to Citrix’s obligation to consummate the Merger described above not to be satisfied, and such breach is not cured by the earlier of 30 days after notice of the breach and the Termination Date, or is incapable of cure prior to the Termination Date;

 

    the LMI Board of Directors withdraws, qualifies or modifies its recommendation that LMI stockholders vote in favor of the Share Issuance, makes a public statement inconsistent with such recommendation or approves, recommends or publicly proposes to approve certain alternative transactions (each of such actions is referred to as a Change in Recommendation); provided that such termination must be elected by Citrix within 30 days of receiving notice from LMI of a Change in Recommendation if such change is in connection with certain other transactions, such as a merger, share exchange, sale, license or tender offer involving LMI, referred to as a Competing Parent Transaction;

 

    LMI fails to include in this proxy statement/prospectus-information statement the recommendation of the LMI Board of Directors that its stockholders approve the Share Issuance;

 



 

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    LMI has failed to convene a meeting of LMI’s stockholders for the purpose of voting on the Share Issuance at least 60 days prior to the Termination Date; or

 

    LMI has failed to comply in all material respects with its obligations under the Merger Agreement relating to non-solicitation of Competing Parent Transactions.

In addition, subject to specified qualifications and exceptions, LMI may terminate the Merger Agreement if Citrix or GetGo has breached any representation, warranty, covenant or agreement in the Merger Agreement that would cause the Joint Conditions to the Merger or the conditions to LMI’s obligation to consummate the Merger described above not to be satisfied, and such breach is not cured by the earlier of 30 days after notice of the breach and the Termination Date, or is incapable of cure prior to the Termination Date.

In the event of termination of the Merger Agreement, the Merger Agreement will terminate without any liability on the part of any party except as described below under “—Termination Fee and Expenses Payable in Certain Circumstances,” provided that nothing in the Merger Agreement will relieve any party of liability for fraud committed prior to such termination or for any willful and material breach of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement.

Termination Fee and Expenses Payable in Certain Circumstances (See “The Transaction Agreements—The Merger Agreement—Termination Fee and Expenses Payable in Certain Circumstances” beginning on page 121)

The Merger Agreement provides that, upon termination of the Merger Agreement under specified circumstances, LMI is required to pay Citrix a termination fee of $62.0 million. The circumstances under which this termination fee would be payable include:

 

    if Citrix terminates the Merger Agreement following a Change in Recommendation by the LMI Board of Directors;

 

    if Citrix terminates the Merger Agreement because LMI has failed to include the LMI Board Recommendation in this proxy statement/prospectus-information statement;

 

    if Citrix terminates the Merger Agreement because LMI breached its obligation to hold a special meeting of LMI stockholders to vote on the Share Issuance proposal at least 60 days prior to the Termination Date; and

 

    if Citrix terminates the Merger Agreement because LMI has failed to comply in all material respects with its obligations under the Merger Agreement with respect to non-solicitation of Competing Parent Transactions.

In addition, if the Merger Agreement is terminated under any of the circumstances listed below, (1) prior to the termination of the Merger Agreement, a Competing Parent Transaction is publicly announced or otherwise communicated to the LMI Board or management and not withdrawn and (2) within twelve months of the termination of the Merger Agreement LMI enters into a definitive agreement with respect to a Competing Parent Transaction or consummates a Competing Parent Transaction (whether or not the applicable Competing Parent Transaction is the same as the original Competing Parent Transaction publicly announced or communicated), then LMI must pay Citrix the Termination Fee, less any expenses previously reimbursed by LMI:

 

    if the Merger Agreement is terminated by Citrix or LMI because the transactions contemplated by the Merger Agreement have not been consummated prior to the Termination Date;

 

    if the Merger Agreement is terminated by either Citrix or LMI after the failure to obtain approval from LMI stockholders of the Share Issuance at the special meeting of LMI’s stockholders; or

 

    if the Merger Agreement is terminated by Citrix because LMI has committed an uncured or incurable breach of any representation, warranty, covenant or agreement in the Merger Agreement such that the conditions to the closing of the Merger would not be satisfied.

 



 

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If the Merger Agreement is terminated because LMI’s stockholders fail to approve the Share Issuance at the meeting of LMI stockholders, LMI will otherwise be required to reimburse Citrix in cash for certain out-of-pocket fees and expenses incurred by Citrix in connection with the Transactions, up to a maximum of $10.0 million in the aggregate. In addition, LMI has agreed that if the Merger Agreement is terminated for any reason, LMI will reimburse Citrix’s out-of-pocket costs and expenses incurred in connection with the improvement or development of certain GetGo properties, up to a maximum of $3.8 million.

Except for expenses in connection with the termination of the Merger Agreement, which are discussed immediately above, the Merger Agreement provides that each party will pay all of its own fees and expenses, whether or not the Merger is completed.

No Dissenters’ or Appraisal Rights (See “The Transactions—Rights of Appraisal” beginning on page 95)

Neither LMI nor Citrix stockholders have appraisal rights under Delaware law in connection with the Separation, the Distribution or the Merger.

U.S. Federal Income Tax Consequences of the Distribution and Merger (See “U.S. Federal Income Tax Consequences of the Distribution and Merger” beginning on page 96)

Citrix stockholders are not expected to recognize any gain or loss as a result of the Distribution and the Merger, except for any gain or loss attributable to the receipt of cash in lieu of a fractional share of LMI common stock pursuant to the Merger. Citrix is not expected to recognize any gain or loss as a result of the Distribution and Merger, except for taxable income or gain possibly arising as a result of certain internal reorganization transactions undertaken prior to or in anticipation of the Distribution.

Accounting Treatment of the Merger (See “The Transactions—Accounting Treatment of the Merger” beginning on page 94)

Accounting Standards Codification Topic 805, Business Combinations, or ASC 805, requires the use of the acquisition method of accounting for business combinations. In applying the acquisition method, it is necessary to identify both the accounting acquiree and the accounting acquirer. In a business combination effected through an exchange of equity interests, such as the Merger, the entity that issues the interests (LMI in this case) is generally the accounting acquirer; however, all pertinent facts and circumstances must be considered.

LMI’s management has determined that LMI represents the accounting acquirer in this combination based on an analysis of the criteria outlined in ASC 805 and the facts and circumstances specific to this transaction. As a result, LMI will record the business combination in its financial statements and will apply the acquisition method to account for the acquired assets and assumed liabilities of the GoTo Business upon consummation of the Merger. Applying the acquisition method includes recording the identifiable assets acquired and liabilities assumed at their fair values, and recording goodwill for the excess of the purchase price over the aggregate fair value of the identifiable assets acquired and liabilities assumed.

 



 

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Summary Historical Combined Financial Data of the GoTo Business

The following tables set forth summary historical combined financial data of the GoTo Business. The summary combined statement of operations data for the years ended December 31, 2013, 2014 and 2015 and the summary combined balance sheet data as of December 31, 2014 and 2015 have been derived from the audited combined financial statements of the GoTo Business, which are included elsewhere in this proxy statement/prospectus-information statement. The summary combined statement of operations data for the nine months ended September 30, 2015 and 2016 and the combined balance sheet data as of September 30, 2016 have been derived from the unaudited combined condensed financial statements of the GoTo Business, which are included elsewhere in this proxy statement/prospectus-information statement. The historical combined financial statements of the GoTo Business reflect the business as it was operated within Citrix. The historical results of the GoTo Business are not necessarily indicative of results that should be expected in the future, and the results for the nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016. This information is only a summary, and you should read it in conjunction with the combined financial statements of the GoTo Business and related notes included elsewhere in this proxy statement/prospectus-information statement and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the GoTo Business” and “Selected Historical Combined Financial Data of the GoTo Business.”

 

     Year Ended December 31,     Nine Months Ended
September 30,
 
     2013     2014     2015     2015     2016  
     (In thousands)  

Combined Statement of Operations Data:

          

Net revenues

   $ 540,491      $ 579,792      $ 629,440      $ 464,608      $ 508,413   

Cost of net revenues:

          

Cost of net revenues

     106,644        123,401        138,637        102,224        116,335   

Amortization of product related intangibles

     4,369        4,235        3,953        2,651        3,837   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of net revenues

     111,013        127,636        142,590        104,875        120,172   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     429,478        452,156        486,850        359,733        388,241   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Research and development

     62,938        71,732        90,882        67,473        76,055   

Sales, marketing and services

     219,075        207,903        201,112        149,572        163,396   

General and administrative

     48,907        61,438        75,277        52,407        74,244   

Amortization of other intangible assets

     4,039        3,994        11,254        7,310        10,618   

Restructuring

     —          6,332        1,750        924        830   

Separation

     —          —          —          —          16,869   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     334,959        351,399        380,275        277,686        342,012   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     94,519        100,757        106,575        82,047        46,229   

Interest expense

     —          5,194        8,484        6,491        6,805   

Other income (expense), net

     (209     847        (389     (1,467     354   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     94,310        96,410        97,702        74,089        39,778   

Income tax expense

     (32,107     (33,106     (26,658     (22,296     (10,620
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 62,203      $ 63,304      $ 71,044      $ 51,793      $ 29,158   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     As of December 31,      As of
September 30,
2016
 
     2014      2015     
     (In thousands)  

Combined Balance Sheet Data:

        

Cash

   $ 34,934       $ 55,414       $ 74,512   

Total assets

     488,321         661,973         667,007   

Deferred revenue, including long-term portion

     112,608         115,002         119,198   

Total liabilities

     169,408         177,681         188,948   

Total equity

     318,913         484,292         478,059   

 



 

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Summary Historical Consolidated Financial Data of LMI

The following tables set forth summary historical consolidated financial data of LMI. The summary consolidated statement of operations data for the years ended December 31, 2013, 2014 and 2015 and the summary consolidated balance sheet data as of December 31, 2014 and 2015 have been derived from the audited consolidated financial statements of LMI included in LMI’s most recent Annual Report on Form 10-K, which is incorporated by reference into this proxy statement/prospectus-information statement. The summary consolidated balance sheet data as of December 31, 2013 has been derived from LMI’s audited consolidated financial statements not included in or incorporated by reference into this proxy statement/prospectus-information statement. The summary consolidated statement of operations data for the nine months ended September 30, 2015 and 2016 and the consolidated balance sheet data as of September 30, 2016 have been derived from the unaudited condensed consolidated financial statements of LMI included in LMI’s most recent Quarterly Report on Form 10-Q, which is incorporated by reference into this proxy statement/prospectus-information statement. The unaudited condensed consolidated financial statements of LMI have been prepared on the same basis as the audited financial statements of LMI. In the opinion of LMI management, the unaudited condensed consolidated interim financial information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial information in those statements. The historical results of LMI are not necessarily indicative of results that should be expected in the future, and the results for the nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016. This information is only a summary, and you should read it in conjunction with LMI’s consolidated financial statements and related notes and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section included in LMI’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, each of which is incorporated by reference into this proxy statement/prospectus-information statement. See also “Where You Can Find Additional Information; Incorporation by Reference.”

 

     Year Ended December 31,     Nine Months Ended
September 30,
 
     2013     2014     2015     2015     2016  
     (In thousands, except per share data)  

Consolidated Statement of Operations Data:

          

Revenue

   $ 166,258      $ 221,956      $ 271,600      $ 195,516      $ 248,103   

Cost of revenue

     18,816        28,732        35,458        25,195        34,121   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     147,442        193,224        236,142        170,321        213,982   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Research and development

     29,023        33,516        42,597        29,758        43,571   

Sales and marketing

     88,794        119,508        138,946        102,919        123,533   

General and administrative

     29,181        30,526        33,034        23,771        40,350   

Legal settlements

     1,688        —          3,600        3,600        —     

Amortization of acquired intangibles

     682        987        1,916        844        4,103   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     149,368        184,537        220,093        160,892        211,557   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     (1,926     8,687        16,049        9,429        2,425   

Interest income

     549        604        654        529        546   

Interest expense

     (2     (2     (574     (261     (1,094

Other income (expense), net

     (89     105        1,389        981        (676
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (1,468     9,394        17,518        10,678        1,201   

Provision for income taxes

     (6,214     (1,439     (2,960     (2,355     (425
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (7,682   $ 7,955      $ 14,558      $ 8,323      $ 776   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

          

Basic

   $ (0.32   $ 0.33      $ 0.59      $ 0.34      $ 0.03   

Diluted

   $ (0.32   $ 0.31      $ 0.56      $ 0.32      $ 0.03   

Weighted average shares outstanding:

          

Basic

     24,351        24,385        24,826        24,733        25,230   

Diluted

     24,351        25,386        25,780        25,678        26,009   

 



 

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     As of December 31,      As of
September 30,
2016
 
     2013      2014      2015     
     (In thousands)  

Consolidated Balance Sheet Data:

           

Cash, cash equivalents and short-term marketable securities

   $ 189,556       $ 201,169       $ 208,427       $ 217,209   

Total assets

     279,613         317,849         455,699         461,910   

Deferred revenue, including long-term portion

     85,163         105,250         136,989         163,659   

Long-term debt

     —           —           60,000         37,500   

Total liabilities

     112,274         144,005         247,888         265,428   

Total equity

     167,339         173,844         207,811         196,482   

 



 

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Summary Unaudited Pro Forma Combined Financial Data of LMI and the GoTo Business

The following summary unaudited pro forma combined financial data present the pro forma financial position and results of operations of LMI based on the historical financial statements of LMI and the GoTo Business, after giving effect to the Merger. The unaudited pro forma combined balance sheet data as of September 30, 2016 gives effect to the Merger as if it had occurred on September 30, 2016. The unaudited pro forma combined statement of operations data for the year ended December 31, 2015 and the nine months ended September 30, 2016 gives effect to the Merger as if it had occurred on January 1, 2015. LMI will account for the Merger with the GoTo Business as an acquisition of the GoTo Business, with LMI being the accounting acquirer. The allocation of purchase consideration reflected in the unaudited pro forma combined financial information is preliminary and will be adjusted based on the fair value of purchase consideration on the Merger date and upon completion of LMI’s final valuations of the fair value of the assets acquired and liabilities assumed of the GoTo Business as of the Merger date. Although LMI believes the fair values assigned to the assets to be acquired and liabilities to be assumed reflected in the unaudited pro forma combined financial information are based on reasonable estimates and assumptions using currently available data, the results of the final allocation could be materially different from the preliminary allocation.

In addition, the unaudited pro forma combined statement of operations data for the year ended December 31, 2015 and the nine months ended September 30, 2016 gives effect to the acquisition by LMI of Marvasol, Inc. (d/b/a LastPass) and the acquisition by the GoTo Business of Grasshopper Group, LLC as if those acquisitions had occurred on January 1, 2015.

The pro forma amounts in the tables below are presented for illustrative purposes only and do not indicate what the financial position or the results of operations of the combined company would have been had the Merger occurred as of the date or for the periods presented. The pro forma amounts also do not indicate what the financial position or results of operations of the combined company will be in the future.

This information is only a summary and has been derived from and should be read in conjunction with “Unaudited Pro Forma Combined Financial Information,” including the unaudited pro forma combined financial statements and related notes, which have been prepared in accordance with Article 11 of Regulation S-X. As a result, no adjustment has been included in the pro forma amounts for any anticipated cost savings or other synergies that LMI expects to result from the Merger.

This information should also be read in conjunction with “Selected Historical Combined Financial Data of the GoTo Business”, “Selected Historical Consolidated Financial Data of LMI”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations of the GoTo Business”, the consolidated financial statements of LMI and related notes in LMI’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, each of which is incorporated by reference into this proxy statement/prospectus-information statement, and the combined financial statements and related notes of the GoTo Business, which are included elsewhere in this proxy statement/prospectus-information statement.

The tax amounts reflected in the unaudited pro forma combined financial information are based on the assumption that the Distribution, followed by the Merger, are tax-free.

 



 

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     Pro Forma  
     Year Ended
December 31, 2015
    Nine Months Ended
September 30, 2016
 
     (In thousands, except per share data)  

Combined Statement of Operations Data:

    

Revenue

   $  889,937      $ 755,154   

Cost of revenue

     186,539        166,588   
  

 

 

   

 

 

 

Gross profit

     703,398        588,566   
  

 

 

   

 

 

 

Operating expenses:

    

Research and development

     142,407        119,809   

Sales and marketing

     368,683        295,917   

General and administrative

     109,145        104,966   

Legal settlements

     3,600        —     

Amortization of acquired intangibles

     142,649        115,437   

Restructuring

     1,750        830   

Separation

     —          935   
  

 

 

   

 

 

 

Total operating expenses

     768,234        637,894   
  

 

 

   

 

 

 

Loss from operations

     (64,836     (49,328

Interest income

     454        546   

Interest expense

     (9,889     (7,899

Other income (expense), net

     980        (322
  

 

 

   

 

 

 

Loss before income taxes

     (73,291     (57,003

Benefit from income taxes

     28,277        18,163   
  

 

 

   

 

 

 

Net loss

   $ (45,014   $ (38,840
  

 

 

   

 

 

 

Net loss per share:

    

Basic

   $ (0.87   $ (0.75

Diluted

   $ (0.87   $ (0.75

Weighted average shares outstanding:

    

Basic

     51,695        52,098   

Diluted

     51,695        52,098   

 

     Pro Forma
as of
September 30, 2016
 
     (In thousands)  

Combined Balance Sheet Data:

  

Cash, cash equivalents and short-term marketable securities

   $ 241,691   

Total assets

     3,659,493   

Deferred revenue, including long-term portion

     245,559   

Long-term debt

     37,500   

Total liabilities

     761,572   

Total equity

     2,897,921   

 



 

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Summary Historical and Pro Forma Per Share Data

The summary below sets forth certain historical per share information for LMI and unaudited pro forma per share information of the combined company as if the GoTo Business and LMI had been combined as of and for the periods presented. The historical per share data of LMI as of and for the year ended December 31, 2015 has been derived from the audited consolidated financial statements of LMI included in LMI’s most recent Annual Report on Form 10-K, which is incorporated by reference into this proxy statement/prospectus-information statement. The historical per share data of LMI as of and for the nine months ended September 30, 2016 has been derived from the unaudited condensed consolidated financial statements of LMI included in LMI’s most recent Quarterly Report on Form 10-Q, which is incorporated by reference into this proxy statement/prospectus-information statement. The unaudited pro forma combined per share data for the year ended December 31, 2015 and as of and for the nine months ended September 30, 2016 has been derived from the unaudited pro forma combined financial information included elsewhere in this proxy statement/prospectus-information statement. See “Unaudited Pro Forma Combined Financial Information.” The pro forma amounts in the table below are presented for illustrative purposes only and are not necessarily indicative of what the financial position or the results of operations of the combined company would have been had the Merger occurred as of the date or for the period presented. The pro forma amounts also do not indicate what the financial position or results of operations of the combined company will be in the future. No adjustment has been included in the pro forma amounts for any anticipated cost savings or other synergies that LMI expects to result from the Merger.

 

     As of or for
the Year Ended
December 31, 2015
    As of or for the
Nine Months Ended
September 30, 2016
 

(shares in thousands)

   Historical      Pro Forma     Historical      Pro Forma  

Net income (loss) per share—Basic

   $ 0.59       $ (0.87   $ 0.03       $ (0.75

Net income (loss) per share—Diluted

   $ 0.56       $ (0.87   $ 0.03       $ (0.75

Weighted average common shares outstanding—Basic

     24,826         51,695        25,230         52,098   

Weighted average common shares outstanding—Diluted

     25,780         51,695        26,009         52,098   

Book value per share of common stock

   $ 8.27         N/A      $ 7.71       $ 55.34   

Dividends declared per share of common stock

   $ —         $ —        $ 0.50       $ 1.00   

 



 

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Historical Market Price and Dividend Information of LMI Common Stock

LMI common stock currently trades on the NASDAQ Global Select Market under the ticker symbol “LOGM.” On July 25, 2016, the last trading day before the announcement of the Transactions, the closing price of LMI common stock was $65.31 per share. On December 5, 2016, the last practicable trading day for which information is available as of the date of this proxy statement/prospectus-information statement, the closing price of LMI common stock was $101.15 per share. The following table sets forth the high and low prices per share of LMI common stock on the NASDAQ Global Select Market for the periods indicated. For current price information, LMI and Citrix stockholders are urged to consult publicly available sources.

 

     LMI Common Stock  
     High      Low  

Year Ending December 31, 2016

     

Fourth Quarter (through December 5, 2016)

   $ 110.10       $ 86.22   

Third Quarter

   $ 94.42       $ 59.06   

Second Quarter

   $ 65.90       $ 47.36   

First Quarter

   $ 65.94       $ 35.00   

Year Ended December 31, 2015

     

Fourth Quarter

   $ 74.77       $ 64.65   

Third Quarter

   $ 75.42       $ 56.64   

Second Quarter

   $ 70.00       $ 54.56   

First Quarter

   $ 58.16       $ 45.06   

Year Ended December 31, 2014

     

Fourth Quarter

   $ 53.38       $ 40.92   

Third Quarter

   $ 50.00       $ 39.06   

Second Quarter

   $ 47.69       $ 37.06   

First Quarter

   $ 47.57       $ 31.08   

LMI had never declared or paid dividends on its common stock prior to July 26, 2016. On July 26, 2016, the LMI Board of Directors declared a cash dividend of $0.50 per share of LMI common stock, payable to LMI’s stockholders of record as of August 8, 2016. The dividend was paid on August 26, 2016. On October 27, 2016, the LMI Board of Directors declared a cash dividend of $0.50 per share of LMI common stock, payable to LMI’s stockholders of record as of November 7, 2016. The dividend was paid on November 22, 2016. The LMI Board of Directors also intends to declare and pay one additional cash dividend, which would be up to $0.50 per share of LMI common stock, as permitted by the Merger Agreement.

Per the terms of the Merger Agreement, LMI is currently restricted from declaring and paying any dividends, other than the dividends described above, prior to the effective time of the Merger. Any determination as to the declaration of future dividends following such time is at the sole discretion of the LMI Board of Directors. Following the Merger, the reconstituted LMI Board of Directors intends to consider the declaration and payment of any additional future dividends based on a number of factors, including the results of LMI’s operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors the LMI Board of Directors deems relevant.

Market price data for GetGo common stock has not been presented because GetGo is a wholly owned subsidiary of Citrix, and shares of GetGo common stock do not trade separately from shares of Citrix common stock.

 



 

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RISK FACTORS

You should carefully consider the following risk factors, together with the other information contained or incorporated by reference in this proxy statement/prospectus-information statement, including the factors discussed in Part I, Item 1A—Risk Factors, in LMI’s Annual Report on Form 10-K for the year ended December 31, 2015. The risks described below are the material risks, although not the only risks relating to the Separation, the Distribution, the Merger and LMI after the Transactions. The risks described below are not the only risks that LMI currently faces or will face after the consummation of the Transactions. Additional risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect LMI’s business, financial condition or results of operations or the price of LMI common stock following the consummation of the Transactions.

If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on LMI’s business, financial condition or results of operations after the Transactions. In addition, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

Risks Related to the Transactions

LMI may not realize the anticipated cost synergies and growth opportunities from the Transactions.

LMI expects that it will realize cost synergies, growth opportunities and other financial and operating benefits as a result of the Transactions. LMI’s success in realizing these benefits, and the timing of their realization, depends on the successful integration of the business operations of the GoTo Business with LMI. Even if LMI is able to integrate the GoTo Business successfully, LMI cannot predict with certainty if or when these cost synergies, growth opportunities and benefits will occur, or the extent to which they will actually be achieved. For example, the benefits from the Transactions may be offset by costs incurred in integrating the companies or in obtaining or attempting to obtain regulatory approvals for the Transactions. Realization of any benefits and synergies could be affected by the factors described in other risk factors and a number of factors beyond LMI’s control, including, without limitation, general economic conditions, further consolidation in the industry in which LMI operates, increased operating costs and regulatory developments.

The integration of the GoTo Business with LMI following the Transactions may present significant challenges.

There is a significant degree of difficulty inherent in the process of integrating the GoTo Business with LMI. These difficulties include:

 

    the integration of the GoTo Business with LMI’s current businesses while carrying on the ongoing operations of all businesses;

 

    managing a significantly larger company than before the consummation of the Transactions;

 

    coordinating geographically separate organizations;

 

    integrating the business cultures of each of the GoTo Business and LMI, which may prove to be incompatible;

 

    creating uniform standards, controls, procedures, policies and information systems and controlling the costs associated with such matters;

 

    integrating certain information technology, purchasing, accounting, finance, sales, billing, human resources, payroll and regulatory compliance systems; and

 

    the potential difficulty in retaining key officers and personnel of LMI and GetGo.

 

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The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of the GoTo Business or LMI’s business. Members of LMI’s or the GoTo Business’ senior management may be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage LMI or the GoTo Business, serve the existing LMI business or the GoTo Business, or develop new products or strategies. If LMI’s or the GoTo Business’ senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, the business of LMI or the GoTo Business could suffer.

LMI’s successful or cost-effective integration of the GoTo Business cannot be assured. The failure to do so could have a material adverse effect on LMI’s business, financial condition or results of operations after the Transactions.

LMI and Citrix may fail to obtain the required regulatory approvals in connection with the Merger in a timely fashion, if at all, or regulators may impose burdensome conditions.

LMI and Citrix are subject to certain antitrust, competition and communications laws, and the proposed Merger is subject to review and approval by regulators under those laws, including, but not limited to, review and approval by the Antitrust Division of the U.S. Department of Justice under the HSR Act, the Federal Communications Commission under the Communications Act and certain state public utility commissions under the applicable law(s) of those states. Although LMI and Citrix have agreed to use reasonable best efforts to obtain the requisite approvals, and have already obtained approvals under the HSR Act and Communications Act, there can be no assurance that the other regulatory approvals will be obtained. Failure to obtain these regulatory approvals could adversely affect LMI’s ability to operate its business after the Transactions or jeopardize the consummation of the Transactions themselves. For example, if LMI and Citrix were to close the Transactions prior to receiving all required state regulatory approvals as noted above, LMI could become subject to fines, loss of licenses, restrictions on LMI’s ability to operate or offer certain GoTo services, or other enforcement actions that could have a materially adverse impact on LMI.

Failure to complete the Transactions could adversely impact the market price of LMI common stock as well as its business and operating results.

The consummation of the Transactions is subject to numerous conditions, including without limitation: (i) the spin-off having taken place in accordance with the Separation Agreement; (ii) the effectiveness of LMI’s registration statement registering LMI common stock to be issued pursuant to the Merger Agreement, and any other registration statement required in connection with the Transactions; (iii) approval of the Share Issuance by the requisite vote of LMI’s stockholders; (iv) expiration of the applicable waiting period under the HSR Act; (v) consent of the Federal Communications Commission and certain other state communications authorities; and (vi) receipt of opinions of counsel with respect to the tax-free nature of certain aspects of the proposed Transactions. See “The Transaction Agreements—the Merger Agreement—Conditions to the Merger.” There is no assurance that these conditions will be met and that the Transactions will be consummated.

If the Transactions are not completed for any reason, the price of LMI common stock may decline to the extent that the market price of LMI common stock reflects positive market assumptions that the Transactions will be completed and the related benefits will be realized. Failure to consummate the Transactions may also make it more difficult for LMI to maintain profitability in the future, as LMI’s growth in revenue and customer base may not be sustainable. In addition, LMI and Citrix have expended and will continue to expend significant management time and resources and have incurred and will continue to incur significant expenses due to legal, advisory, printing and financial services fees related to the Transactions. These expenses must be paid regardless of whether the Transactions are consummated. Even if the Transactions are completed, any delay in the completion of the Transactions could diminish the anticipated benefits of the Transactions or result in additional transaction expenses, loss of revenue or other effects associated with uncertainty about the Transactions. If the Transactions are not consummated because the Merger Agreement is terminated, LMI may be required under certain circumstances to pay Citrix a termination fee or may under other circumstances be required to reimburse Citrix for certain expenses in connection with the Transactions.

 

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The announcement and pendency of the Merger could have an adverse effect on LMI’s stock price, business, financial condition, results of operations or business prospects.

The announcement and pendency of the Merger could disrupt LMI’s business in negative ways. For example, customers and other third-party business partners of LMI or the GoTo Business may seek to terminate and/or renegotiate their relationships with LMI or GetGo as a result of the Merger, whether pursuant to the terms of their existing agreements with LMI and/or GetGo or otherwise. In addition, current and prospective employees of LMI and the GoTo Business may experience uncertainty regarding their future roles with the combined company, which might adversely affect LMI’s ability to retain, recruit and motivate key personnel. Should they occur, any of these events could adversely affect the stock price of, or harm the financial condition, results of operations or business prospects of, LMI.

LMI will incur significant costs related to the Transactions that could have a material adverse effect on its liquidity, cash flows and operating results.

LMI expects to incur significant one-time costs in connection with the Transactions in 2016 and 2017, including approximately $45 to $50 million of transaction-related fees and expenses, including legal, accounting and other professional fees and transition and integration-related expenses. Citrix and GetGo also expect to incur significant one-time costs in connection with the Transactions, including approximately $120 to $130 million of transaction-related expenses. LMI will not be responsible for those expenses of Citrix and GetGo. While LMI expects to be able to fund its one-time costs using cash from operations and borrowings under existing and anticipated credit sources, these costs will negatively impact LMI’s liquidity, cash flows and results of operations in the periods in which they are incurred.

The Transactions may discourage other companies from trying to acquire LMI before or for a period of time following completion of the Transactions.

Certain provisions in the Merger Agreement prohibit LMI from soliciting any acquisition proposal during the pendency of the Merger. In addition, the Merger Agreement obligates LMI to pay Citrix a termination fee, LMI’s financial condition will be adversely affected as a result of the payment of the termination fee in certain circumstances involving alternative acquisition proposals, which might deter third parties from proposing alternative acquisition proposals, including acquisition proposals that might result in greater value to LMI stockholders than the Transactions. In addition, certain provisions of the Amended and Restated Tax Matters Agreement, which we refer to as the Tax Matters Agreement, which are intended to preserve the tax-free nature of certain aspects of the Separation and the Distribution for U.S. federal income tax purposes, may discourage acquisition proposals for a period of time following the Transactions. LMI currently expects to issue approximately 27.3 million shares of its common stock in connection with the Merger. This number includes an estimated 0.5 million shares of LMI common stock that may be issued following the Merger upon settlement of LMI restricted stock units to be granted to GetGo employees in substitution for outstanding Citrix restricted stock units. However, the actual number of LMI restricted stock units to be issued to GetGo employees in substitution for outstanding Citrix restricted stock units in connection with the Merger (and, accordingly, the number of shares of LMI common stock that may be issued following the Merger upon settlement of the LMI restricted stock units) will be determined shortly following the closing of the Merger based upon the relative stock prices of Citrix prior to the Merger and LMI following the Merger. See “The Transaction Agreements—The Merger Agreement—Merger Consideration.” Because LMI will be a significantly larger company and have significantly more shares of common stock outstanding after the consummation of the Transactions, an acquisition of LMI may become more expensive. As a result, some companies may not seek to acquire LMI.

Depending upon the facts and circumstances, the Distribution, the Merger or both could be taxable to Citrix stockholders, the Distribution could be taxable to Citrix, and GetGo and LMI may be obligated to indemnify Citrix for such taxes and certain tax-related losses.

The U.S. federal income tax consequences of the Distribution and Merger to Citrix and Citrix stockholders will depend upon whether the Contribution and Distribution, taken together, qualify as a reorganization under

 

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Sections 368(a) and 355 of the Code, and the Merger qualifies as a reorganization under Section 368(a) of the Code, in each case based on the applicable facts and circumstances existing on the date of the Distribution and the Merger. If each of the Distribution and Merger so qualify, then (i) Citrix stockholders will generally not recognize any gain or loss for U.S. federal income tax purposes as a result of the Distribution or the Merger, except for any gain or loss attributable to the receipt of cash in lieu of fractional shares of LMI common stock, and (ii) except for taxable income or gain possibly arising as a result of certain internal reorganization transactions undertaken prior to or in anticipation of the Distribution, Citrix will not recognize any gain or loss. The completion of the Distribution and Merger is conditioned on Citrix’s receipt of the Distribution Tax Opinion (as defined in “U.S. Federal Income Tax Consequences of the Distribution and Merger” beginning on page 96), which will provide in part that the Distribution and Contribution, taken together, will qualify as a reorganization under Sections 368(a)(1)(D) and 355 of the Code, and on the receipt by each of Citrix and LMI of opinions from their respective outside legal counsel that will provide in part that the Merger will qualify as a reorganization under Section 368(a) of the Code. These opinions will not be binding on the IRS or the courts, and the IRS or the courts may not agree with the conclusions reached in the opinions. There can be no assurance that the IRS will not successfully assert that either or both of the Distribution and the Merger are taxable transactions, and that a court will not sustain such assertion, which could result in tax being incurred by Citrix stockholders and Citrix.

Even if the Contribution and Distribution, taken together, otherwise qualify as a reorganization under Sections 368(a) and 355 of the Code, the Distribution will nonetheless be taxable to Citrix (but not to Citrix stockholders) pursuant to Section 355(e) of the Code if 50% or more of the stock of either Citrix or GetGo (including stock of LMI after the Transactions, as the parent of GetGo) is acquired, directly or indirectly (taking into account the stock of LMI acquired by Citrix stockholders in the Merger), as part of a plan or series of related transactions that includes the Distribution. In that regard, because Citrix stockholders will own more than 50% of the stock of LMI following the Merger, the Merger standing alone will not cause the Distribution to be taxable under Section 355(e) of the Code, and the Distribution Tax Opinion will so provide. However, if the IRS were to determine that other acquisitions of Citrix stock or LMI stock are part of a plan or series of related transactions that includes the Distribution, such determination could result in the recognition of gain by Citrix (but not by Citrix stockholders) for U.S. federal income tax purposes, and the amount of taxes on such gain would likely be substantial. See “U.S. Federal Income Tax Consequences of the Distribution and Merger” beginning on page 96.

Under the Tax Matters Agreement, GetGo and LMI may be obligated, in certain cases, to indemnify Citrix against taxes and certain tax-related losses on the Distribution that arise as a result of GetGo’s or LMI’s actions, or failure to act. See “U.S. Federal Income Tax Consequences of the Distribution and Merger” beginning on page 96 and “Additional Agreements Related to the Separation, the Distribution and the Merger—Tax Matters Agreement” beginning on page 130. Any such indemnification obligation would be substantial and would likely have a material adverse effect on LMI.

Under the Tax Matters Agreement, LMI and GetGo will be restricted from taking certain actions that could adversely affect the intended U.S. federal income tax treatment of the Contribution, the Distribution, the Merger and certain related transactions consummated in connection with Citrix’s internal reorganization, and such restrictions could significantly impair LMI’s and GetGo’s ability to implement strategic initiatives that otherwise would be beneficial.

The Tax Matters Agreement generally restricts LMI and GetGo from taking certain actions after the Transactions that could adversely affect the intended U.S. federal income tax treatment of the Transactions and certain related transactions consummated in connection with Citrix’s internal reorganization. Failure to adhere to these restrictions, including in certain circumstances that may be outside of LMI’s control, could result in tax being imposed on Citrix for which LMI and GetGo could bear responsibility and for which LMI and GetGo could be obligated to indemnify Citrix. In addition, even if LMI and GetGo are not responsible for tax liabilities of Citrix under the Tax Matters Agreement, GetGo nonetheless could be liable under applicable tax law for such liabilities if Citrix were to fail to pay such taxes. Because of these provisions in the Tax Matters Agreement, LMI and GetGo will be restricted from taking certain actions, particularly for the two years following the Merger,

 

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including (among other things) the ability to freely issue stock, to make acquisitions and to raise additional equity capital. These restrictions could have a material adverse effect on LMI’s liquidity and financial condition, and otherwise could impair LMI’s and GetGo’s ability to implement strategic initiatives. Also, GetGo’s and LMI’s indemnity obligation to Citrix might discourage, delay or prevent a change of control that stockholders of LMI may consider favorable.

Current LMI stockholders’ percentage ownership interest in LMI will be substantially diluted in the Merger.

The LMI common stock outstanding on a fully diluted basis immediately prior to the Merger will represent, in the aggregate, approximately 49.9% of LMI’s common stock outstanding on a fully diluted basis immediately following the Merger. In addition, as a result of the true-up provision in the Merger Agreement, it is possible that LMI could be required to issue more than the anticipated 27.3 million shares of its common stock in connection with the Transactions to ensure the intended tax treatment of certain aspects of the Transactions. See “The Transaction Agreements—the Merger Agreement—Merger Consideration.” Consequently, LMI’s pre-Merger equityholders, as a group, will be substantially diluted in the Merger and have less ability to exercise influence over the management and policies of LMI following the Merger than immediately prior to the Merger.

The calculation of the number of shares of LMI common stock to be distributed in the Merger will not be adjusted if there is a change in the value of the GoTo Business or LMI before the Merger is completed.

The number of shares of LMI common stock to be issued by LMI in the Merger will not be adjusted if there is a change in the value of the GoTo Business or its assets or the value of LMI prior to the closing of the Transactions. Citrix stockholders will receive a fixed number of shares of LMI common stock pursuant to the Merger rather than a number of shares with a particular fixed market value. As a result, the actual value of the LMI common stock to be received by Citrix stockholders in the Merger will depend on the value of such shares at the time of closing of the Merger, and may be more or less than the current value of LMI common stock.

The GoTo Business may be negatively impacted if LMI is unable to provide benefits and services, or access to equivalent financial strength and resources, to the GoTo Business that historically have been provided by Citrix.

The GoTo Business has historically received benefits and services from Citrix and has benefited from Citrix’s financial strength and extensive network of service offerings. After the Transactions, GetGo will be a subsidiary of LMI, and the GoTo Business will no longer benefit from Citrix’s services, financial strength or business relationships to the extent not otherwise addressed in the other transaction documents contemplated by the Merger Agreement, referred to as the Transaction Documents. While Citrix has agreed to provide certain transition services to GetGo for a period of time following the consummation of the Transactions, it cannot be assured that LMI will be able to adequately replace or provide resources formerly provided by Citrix, or replace them at the same or lower cost. If LMI is not able to replace the resources provided by Citrix or is unable to replace them without incurring significant additional costs or is delayed in replacing the resources provided by Citrix, LMI’s results of operations may be negatively impacted.

The historical financial information of the GoTo Business may not be representative of its results if it had been operated independently of Citrix and as a result, may not be a reliable indicator of future results of the GoTo Business.

The GoTo Business is currently operated through various subsidiaries of Citrix. Consequently, the financial information of the GoTo Business included in this proxy statement/prospectus-information statement has been derived from the consolidated financial statements and accounting records of Citrix and reflects assumptions and allocations made by Citrix. The financial position, results of operations and cash flows of the GoTo Business presented may be different from those that would have resulted if the GoTo Business had been operated as a standalone company or by a company other than Citrix. For example, in preparing the financial statements of the

 

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GoTo Business, Citrix made an allocation of Citrix costs and expenses that are attributable to the GoTo Business. However, these costs and expenses reflect the costs and expenses attributable to the GoTo Business as part of a larger organization and do not necessarily reflect costs and expenses that would be incurred by the GoTo Business had it been operated independently, and may not reflect costs and expenses that would have been incurred had the GoTo Business been operated as a part of LMI. As a result, the historical financial information of the GoTo Business may not be a reliable indicator of the GoTo Business’ future results or the results that it will achieve as a part of LMI.

The unaudited pro forma combined financial information of LMI and the GoTo Business is based in part on certain assumptions regarding the Transactions and may not be indicative of LMI’s future operating performance.

The historical financial statements included or incorporated by reference in this document consist of the separate financial statements of the GoTo Business and LMI. The unaudited pro forma combined financial information presented in this document is for illustrative purposes only and does not represent what LMI’s actual results or financial condition would have been if the Merger and other Transactions had occurred on the dates indicated. In addition, such unaudited pro forma combined financial information is based in part on certain assumptions regarding the Transactions that LMI believes are reasonable.

LMI will account for the Merger as an acquisition of the GoTo Business, with LMI being the accounting acquirer. Following the effective date of the Merger, LMI expects to complete the purchase price allocation for the acquisition of the GoTo Business after determining the fair value of the GoTo Business’ assets and liabilities. The final purchase price allocation may be different than the preliminary one reflected in the unaudited pro forma purchase price allocation presented in this document, and this difference may be material.

The unaudited pro forma combined financial information does not reflect the costs of any integration activities or transaction-related costs or incremental capital expenditures that LMI management believes are necessary to realize the anticipated synergies from the Transactions. Accordingly, the unaudited pro forma combined financial information included in this document does not reflect what LMI’s results of operations or operating condition would have been had LMI and the GoTo Business been a consolidated entity during all periods presented, or what LMI’s results of operations and financial condition will be in the future.

Sales of LMI common stock after the Transactions may negatively affect the market price of LMI common stock.

The shares of LMI common stock to be issued in the Merger to holders of GetGo common stock (following the Distribution) will generally be eligible for immediate resale. The market price of LMI common stock could decline as a result of sales of a large number of shares of LMI common stock in the market after the consummation of the Transactions, or even the perception that these sales could occur.

Currently, Citrix stockholders may include index funds that have performance tied to the Standard & Poor’s 500 Index or other stock indices, and institutional investors subject to various investing guidelines. Because LMI may not be included in these indices or may not meet the investing guidelines of some of these institutional investors, these index funds and institutional investors may decide or may be required to sell the LMI common stock that they receive in the Merger. These sales, or the possibility that these sales may occur, may also make it more difficult for LMI to obtain additional capital by selling equity securities in the future at a time and at a price that it deems appropriate.

LMI and the GoTo Business may have difficulty attracting, motivating and retaining executives and other employees in light of the Transactions.

Uncertainty about the effect of the Transactions on the employees of LMI and the GoTo Business may have an adverse effect on LMI and the GoTo Business. This uncertainty may impair LMI’s and the GoTo Business’ ability to attract, retain and motivate personnel until the Transactions are completed. Employee retention may be

 

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particularly challenging during the pendency of the Transactions, as employees may feel uncertain about their future roles with LMI or the GoTo Business after their combination. If employees of LMI or the GoTo Business depart because of issues relating to the uncertainty or perceived difficulties of integration or a desire not to become employees of LMI after the Transactions, LMI’s ability to realize the anticipated benefits of the Transactions could be reduced.

Due to the Merger, the ability of the combined company to use net operating losses to offset future taxable income may be restricted and these net operating losses could expire or otherwise be unavailable.

As of December 31, 2015, LMI had federal net operating loss carryforwards, or NOLs, of approximately $8 million due to other acquisitions and $22 million of state NOLs that are not acquisition-related. In addition, LMI had foreign NOLs of $17.3 million that are not expected to be utilized. In general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income. If the Merger is completed, LMI’s existing NOLs may be subject to limitations and the combined company may not be able to fully use these NOLs to offset future taxable income. In addition, if the combined company undergoes any subsequent ownership change, its ability to utilize NOLs could be further limited. There is also a risk that, due to regulatory changes, such as suspensions on the use of NOLs, or for other unforeseen reasons, existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities.

Risks Related to LMI, Including the GoTo Business, After the Transactions

LMI’s operating results may fluctuate in the future. As a result, LMI may fail to meet or exceed the expectations of research analysts or investors, which could cause LMI’s stock price to decline.

LMI’s operating results may fluctuate as a result of a variety of factors, many of which are outside of LMI’s control. If LMI’s operating results or guidance fall below the expectations of research analysts or investors, the price of LMI common stock could decline substantially. Fluctuations in LMI’s operating results or guidance may be due to a number of factors, including, but not limited to, those listed below:

 

    LMI’s ability to renew existing customers, including the ability to renew existing GoTo Business customers, increase sales to existing customers and attract new customers;

 

    the amount and timing of operating costs and capital expenditures related to the operation, maintenance and expansion of LMI’s business;

 

    service outages or security breaches;

 

    changes in LMI’s pricing policies or those of LMI’s competitors;

 

    LMI’s ability to successfully implement strategic business model changes;

 

    the timing and success of new services, features and upgrades by LMI or LMI’s competitors;

 

    changes in sales compensation plans or organizational structure;

 

    the timing of costs related to the development or acquisition of technologies, services or businesses;

 

    seasonal variations or other cyclicality in the demand for LMI’s services;

 

    general economic, industry and market conditions and those conditions specific to Internet usage and online businesses;

 

    litigation, including class action litigation, involving LMI and its services, the GoTo Business, the Transactions, or the industry in which LMI and the GoTo Business operate, in general;

 

    the purchasing and budgeting cycles of LMI’s customers;

 

    the financial condition of LMI’s customers; and

 

    geopolitical events such as war, threat of war or terrorist acts.

 

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LMI believes that its revenue and operating results may continue to vary in the future and that period-to-period comparisons of LMI’s operating results may not be meaningful.

If LMI’s services or computer systems are breached, LMI’s customers may be harmed, its reputation may be damaged and it may be exposed to significant liabilities.

LMI’s services and computer systems store and transmit confidential data of LMI’s customers and their customers, which may include credit card information, account and device information, passwords and other critical data. Any breach of the cybersecurity measures LMI has taken to safeguard this information may subject it to fines and penalties, time consuming and expensive litigation, trigger indemnification obligations and other contractual liabilities, damage LMI’s reputation and harm LMI’s customers and its business.

Cyber-attacks from computer hackers and cyber criminals and other malicious Internet-based activity continue to increase generally, and LMI’s services and systems, including the systems of LMI’s outsourced service providers, have been and may in the future continue to be the target of various forms of cyber-attacks such as DNS attacks, wireless network attacks, viruses and worms, malicious software, application centric attacks, peer-to-peer attacks, phishing attempts, backdoor trojans and distributed denial of service attacks. The techniques used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and generally are not detected until after an incident has occurred. While LMI makes significant efforts to maintain the security and integrity of LMI’s services and computer systems, LMI’s cybersecurity measures and the cybersecurity measures taken by LMI’s third-party data center facilities may be unable to anticipate, detect or prevent all attempts to compromise LMI’s systems. If LMI’s cybersecurity measures are compromised as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, LMI’s reputation could be damaged, LMI’s business may be harmed and LMI could incur significant liabilities.

Many states have enacted laws requiring companies to notify individuals of security breaches involving their personal data. These mandatory disclosures regarding a security breach may be costly to comply with and may lead to widespread negative publicity, which may cause LMI’s customers to lose confidence in the effectiveness of LMI’s cybersecurity measures. Additionally, some of LMI’s customer contracts require LMI to notify customers in the event of a security breach and/or indemnify customers from damages they may incur as a result of a breach of LMI’s services and computer systems. There can be no assurance that the limitations of liability provisions in LMI’s contracts for a security breach would be enforceable or would otherwise protect LMI from any such liabilities or damages with respect to any particular claim. LMI also cannot be sure that its existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims related to a breach of LMI’s services or computer systems. The successful assertion of one or more large claims against LMI that exceed LMI’s available insurance coverage could have a material adverse effect on LMI’s business, financial condition and operating results.

LMI’s business strategy includes acquiring or investing in other companies, which may ultimately fail to meet LMI’s expectations, divert LMI’s management’s attention, result in additional dilution to LMI’s stockholders and disrupt LMI’s business and operating results.

In addition to the risks related to the Transactions and LMI’s combination with the GoTo Business, LMI’s business strategy continues to contemplate LMI making periodic acquisitions of, or strategic investments in, complementary businesses, services, technologies and intellectual property rights. Acquisitions of high-technology companies are inherently risky, and negotiating these transactions can be time-consuming, difficult and expensive and LMI’s ability to close these transactions may often be subject to conditions or approvals that are beyond LMI’s control. Consequently, these transactions, even if undertaken and announced, may not close. In connection with an acquisition, investment or strategic transaction LMI may do one or more of the following, which may harm LMI’s business and adversely affect LMI’s operating results:

 

    issue additional equity securities that would dilute LMI’s stockholders and decrease LMI’s earnings per share;

 

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    use cash and other resources that LMI may need in the future to operate its business;

 

    incur debt on unfavorable terms or that LMI is unable to repay;

 

    incur large charges or substantial liabilities; and

 

    become subject to adverse tax consequences, substantial depreciation or deferred compensation charges.

Following an acquisition, the integration of an acquired company may cost more than LMI anticipates, and LMI may be subject to unforeseen liabilities arising from an acquired company’s past or present operations. These liabilities may be greater than the warranty and indemnity limitations LMI negotiates. Any unforeseen liability that is greater than these warranty and indemnity limitations could have a negative impact on LMI’s financial condition. Some of the additional risks associated with integrating acquired companies may include, but are not limited to:

 

    difficulties and delays integrating the employees, culture, technologies, products and systems of the acquired companies;

 

    an uncertain revenue and earnings stream from the acquired company, which could dilute LMI’s earnings;

 

    being subject to unfavorable revenue recognition or other accounting treatment as a result of an acquired company’s practices;

 

    difficulties retaining the customers of any acquired business due to changes in management or otherwise;

 

    LMI’s ongoing business may be disrupted and LMI’s management’s attention may be diverted by acquisition, transition or integration activities;

 

    the potential loss of key employees of the acquired company;

 

    undetected errors or unauthorized use of a third-party’s code in products of the acquired companies;

 

    unforeseen or unanticipated legal liabilities which are not discovered by due diligence during the acquisition process, including stockholder litigation related to the acquisition, third party intellectual property claims or claims for potential violations of applicable law, rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses;

 

    entry into markets in which LMI has no or limited direct prior experience and where competitors have stronger market positions and which are highly competitive; and

 

    assuming pre-existing contractual relationships of an acquired company that LMI would not have otherwise entered into, the termination or modification of which may be costly or disruptive to LMI’s business.

If LMI fails to successfully integrate and manage the companies and technologies it acquires, or if an acquisition does not further LMI’s business strategy as expected, LMI’s operating results will be adversely affected. Even if successfully integrated, there can be no assurance that any of LMI’s acquisitions or future acquisitions will be successful in helping LMI achieve its financial and strategic goals.

A significant portion of LMI’s historical revenues and the historical revenues of the GoTo Business have come from the sale of remote access and support products and any decline in sales for these products could adversely affect LMI’s results of operations and financial condition.

A significant portion of LMI’s annual revenues and the annual revenues of the GoTo Business have historically come from the sale of remote access and remote support services and LMI continues to anticipate that sales of its remote access and remote support products will constitute a majority of its revenue for the

 

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foreseeable future. Any decline or variability in sales of LMI’s remote access and remote support products could adversely affect LMI’s results of operations and financial condition. Declines and variability in sales of these products could potentially occur as a result of:

 

    the growing use of mobile devices such as smartphones and tablet computers to perform functions that have been traditionally performed on desktops and laptops, resulting in less demand for these types of remote access products;

 

    the introduction of new or alternative technologies, products or service offerings by competitors;

 

    LMI’s failure to innovate or introduce new product offerings, features and enhancements;

 

    potential market saturation or LMI’s inability to enter into new markets;

 

    increased price and product competition;

 

    dissatisfied customers; or

 

    general weak economic, industry or market conditions.

If sales of LMI’s remote access and remote support products decline as a result of these or other factors, LMI’s revenue would decrease and LMI’s results of operations and financial condition would be adversely affected.

LMI may not be able to capitalize on potential emerging market opportunities, like the Internet of Things, and new services that LMI introduces may not generate the revenue and earnings LMI anticipated, which may adversely affect LMI’s business.

LMI’s business strategy involves identifying emerging market opportunities which it can capitalize on by successfully developing and introducing new services designed to address those market opportunities. LMI has made and expects to continue to make significant investments in research and development in an effort to capitalize on potential emerging market opportunities that LMI has identified. One such emerging market which LMI has identified is the Internet of Things, or IoT, and LMI has made and expects to continue to make significant investments in its Xively IoT platform. However, emerging markets and opportunities often take time to fully develop, and they attract a significant number of competitors. If the emerging markets LMI has targeted, such as the IoT, ultimately fail to materialize as LMI or others have anticipated or if potential customers choose to adopt solutions offered by LMI’s competitors rather than LMI’s own solutions, LMI may not be able to generate the revenue and earnings it anticipated, and LMI’s business and results of operations would be adversely affected.

Assertions by a third party that LMI’s services and solutions infringe its intellectual property, whether or not correct, could subject LMI to costly and time-consuming litigation or expensive licenses.

There is frequent litigation in the software and technology industries based on allegations of infringement or other violations of intellectual property rights. LMI has been, and may in the future be, subject to third party patent infringement or other intellectual property-related lawsuits as LMI faces increasing competition and becomes increasingly visible. For example, upon the closing of the Merger with GetGo, LMI will assume all liabilities with respect to certain intellectual property-related lawsuits to which Citrix is a party, all of which are currently on appeal. Regardless of the merit of these claims, they can be time-consuming, result in costly litigation and diversion of technical and management personnel or require LMI to develop a non-infringing technology or enter into license agreements. There can be no assurance that such licenses will be available on acceptable terms and conditions, if at all, and although LMI has previously licensed proprietary technology, LMI cannot be certain that the owners’ rights in such technology will not be challenged, invalidated or circumvented. For these reasons and because of the potential for court awards that are difficult to predict, it is not unusual to find even arguably unmeritorious claims settled for significant amounts. In addition, many of LMI’s service agreements require LMI to indemnify LMI’s customers from certain third-party intellectual property infringement claims, which could increase LMI’s costs as a result of defending such claims and may require that LMI pay damages if there were an adverse ruling related to any such claims. These types of claims could harm LMI’s relationships with LMI’s customers, deter future

 

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customers from subscribing to LMI’s services or expose LMI to further litigation. These costs, monetary or otherwise, associated with defending against third party allegations of infringement could have negative effects on LMI’s business, financial condition and operating results.

If LMI’s services are used to commit fraud or other similar intentional or illegal acts, LMI may incur significant liabilities, its services may be perceived as not secure, and customers may curtail or stop using LMI’s services.

Certain services offered by LMI enable users to remotely access third-party computer systems. LMI does not control the use or content of information accessed by LMI’s customers through LMI’s services. If LMI’s services are used to commit fraud or other bad or illegal acts, including, but not limited to, posting, distributing or transmitting any computer files that contain a virus or other harmful component, interfering or disrupting third-party networks, infringing any third party’s copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy, transmitting any unlawful, harassing, libelous, abusive, threatening, vulgar or otherwise objectionable material, or accessing unauthorized third-party data, LMI may become subject to claims for defamation, negligence or intellectual property infringement and subject to other potential liabilities. As a result, defending such claims could be expensive and time-consuming, and LMI could incur significant liability to LMI’s customers and to individuals or businesses who were the targets of such acts. As a result, LMI’s business may suffer and LMI’s reputation may be damaged.

If LMI is unable to attract new customers to LMI’s services on a cost-effective basis, LMI’s revenue and results of operations will be adversely affected.

LMI must continue to attract a large number of customers on a cost-effective basis. LMI relies on a variety of marketing methods to attract new customers to its services, such as paying providers of online services and search engines for advertising space and priority placement of LMI’s website in response to Internet searches. LMI’s ability to attract new customers also depends on the competitiveness of the pricing of LMI’s services. If LMI’s current marketing initiatives are not successful or become unavailable, if the cost of such initiatives were to significantly increase, or if LMI’s competitors offer similar services at lower prices, LMI may not be able to attract new customers on a cost-effective basis and, as a result, LMI’s revenue and results of operations would be adversely affected.

If LMI is unable to retain its existing customers or the existing customers of the GoTo Business, its revenue and results of operations would be adversely affected.

The services offered by LMI and the GoTo Business are generally sold pursuant to agreements that are one year in duration. Customers have no obligation to renew their subscriptions after their subscription period expires, and these subscriptions may not be renewed on the same or on more profitable terms. As a result, LMI’s ability to grow depends in part on subscription renewals. LMI may not be able to accurately predict future trends in customer renewals, and LMI’s customers’ renewal rates may decline or fluctuate because of several factors, including their satisfaction or dissatisfaction with LMI’s services, the prices of LMI’s services, the prices of services offered by LMI’s competitors or reductions in LMI’s customers’ spending levels. If LMI’s customers or the existing customers of the GoTo Business do not renew their subscriptions for LMI’s services, renew on less favorable terms, or do not purchase additional functionality or subscriptions, LMI’s revenue may grow more slowly than expected or decline, and its profitability and gross margins may be harmed.

If LMI fails to convert free users to paying customers, LMI’s revenue and financial results will be harmed.

A significant portion of LMI’s user base utilizes its services free of charge through LMI’s free services or free trials of its premium services. LMI seeks to convert these free and trial users to paying customers of its premium services. If LMI’s rate of conversion suffers for any reason, LMI’s revenue may decline and its business may suffer.

 

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If LMI’s efforts to build a strong brand identity are not successful, LMI may not be able to attract or retain subscribers and its operating results may be adversely affected.

LMI believes that building and maintaining a strong brand identity plays an important role in attracting and retaining subscribers to LMI’s services, who may have other options from which to obtain their remote connectivity services. In order to build a strong brand, LMI believes that it must continue to offer innovative remote connectivity services that LMI’s subscribers value and enjoy using, and also market and promote those services through effective marketing campaigns, promotions and communications with LMI’s user base. From time to time, subscribers may express dissatisfaction with LMI’s services or react negatively to LMI’s strategic business decisions, such as changes that it makes in pricing, features or service offerings, including the discontinuance of LMI’s free services. To the extent that user dissatisfaction with LMI’s services or strategic business decisions is widespread or not adequately addressed, LMI’s overall brand identity may suffer and, as a result, its ability to attract and retain subscribers may be adversely affected, which could adversely affect LMI’s operating results.

The markets in which LMI participates are competitive, with low barriers to entry, and if LMI does not compete effectively, LMI’s operating results may be harmed.

The markets for remote-connectivity solutions are competitive and rapidly changing, with relatively low barriers to entry. With the introduction of new technologies and market entrants, LMI expects competition to intensify in the future. In addition, pricing pressures and increased competition generally could result in reduced sales, reduced margins or the failure of LMI’s services to achieve or maintain widespread market acceptance. Often LMI competes against existing services that LMI’s potential customers have already made significant expenditures to acquire and implement.

Certain of LMI’s competitors offer, or may in the future offer, lower priced, or free, products or services that compete with LMI’s services. This competition may result in reduced prices and a substantial loss of customers for LMI’s services or a reduction in LMI’s revenue.

Many of LMI’s services directly compete with large, established competitors such as WebEx (a division of Cisco Systems), and certain of LMI’s services also compete with current or potential services offered by companies like Adobe, AgileBits, Apple, Ayla Networks, BlueJeans Networks, Box, Dashlane, Dropbox, GFI, Google, IBM, KeePass, LivePerson, Microsoft, OKTA, Oracle, PTC, Splashtop, TeamViewer and Zoom Video Communications. Many of LMI’s actual and potential competitors enjoy competitive advantages over LMI, such as greater name recognition, longer operating histories, more varied services and larger marketing budgets, as well as substantially greater financial, technical and other resources. In addition, many of LMI’s competitors have established marketing relationships, access to larger customer bases and have major distribution agreements with consultants, system integrators and resellers.

If LMI is not able to compete effectively for any of these reasons, its operating results will be harmed.

Industry consolidation may result in increased competition.

Some of LMI’s competitors have made or may make acquisitions or may enter into partnerships or other strategic relationships to offer a more comprehensive service than they individually had offered. In addition, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships or strategic relationships. LMI expects these trends to continue as companies attempt to strengthen or maintain their market positions. Many of the companies driving this trend have significantly greater financial, technical and other resources than LMI does and may be better positioned to acquire and offer complementary services and technologies. The companies resulting from such combinations may create more compelling service offerings and may offer greater pricing flexibility than LMI can or may engage in business practices that make it more difficult for LMI to compete effectively, including on the basis of price, sales and marketing programs, technology or service functionality. These pressures could result in a substantial loss of customers or a reduction in LMI’s revenues.

 

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LMI may not be able to respond to rapid technological changes in time to address the needs of its customers, which could have a material adverse effect on LMI’s sales and profitability.

The cloud-based remote-connectivity services market is characterized by rapid technological change, the frequent introduction of new services and evolving industry standards. LMI’s ability to remain competitive will depend in large part on its ability to continue to enhance its existing services and develop new service offerings that keep pace with the market’s rapid technological developments. Additionally, to achieve market acceptance for its services, LMI must effectively anticipate and offer services that meet changing customer demands in a timely manner. Customers may require features and capabilities that LMI’s current services do not have. If LMI fails to develop services that satisfy customer requirements in a timely and cost-effective manner, LMI’s ability to renew services with existing customers and its ability to create or increase demand for its services will be harmed, and LMI’s revenue and results of operations would be adversely affected.

LMI uses a limited number of data centers to deliver its services. Any disruption of service at these facilities could harm LMI’s business.

The majority of LMI’s services are hosted from third-party data center facilities located throughout the world. LMI does not control the operation of these facilities. The owners of LMI’s data center facilities have no obligation to renew their agreements with LMI on commercially reasonable terms, or at all. If LMI is unable to renew these agreements on commercially reasonable terms, LMI may be required to transfer to new data center facilities, and it may incur significant costs and possible service interruption in connection with doing so.

Any changes in third-party service levels at LMI’s data centers or any errors, defects, disruptions or other performance problems with LMI’s services could harm LMI’s reputation and may damage LMI’s customers’ businesses. Interruptions in LMI’s services might reduce its revenue, cause LMI to issue credits to customers, subject LMI to potential liability, cause customers to terminate their subscriptions or harm LMI’s renewal rates.

LMI’s data centers are vulnerable to damage or interruption from human error, intentional bad acts, pandemics, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. At least one of LMI’s data facilities is located in an area known for seismic activity, increasing LMI’s susceptibility to the risk that an earthquake could significantly harm the operations of these facilities. The occurrence of a natural disaster, an act of terrorism, vandalism or other misconduct, a decision to close the facilities without adequate notice or other unanticipated problems could result in lengthy interruptions in LMI’s services.

Failure to comply with credit card processing standards may cause LMI to lose the ability to offer its customers a credit card payment option, which would increase LMI’s costs of processing customer orders and make LMI’s services less attractive to customers, the majority of which purchase LMI’s services with a credit card.

Major credit card issuers have adopted credit card processing standards and have incorporated these standards into their contracts with LMI. If LMI fails to maintain compliance with applicable credit card processing and documentation standards adopted by the major credit card issuers, these issuers could terminate their agreements with LMI, and LMI could lose LMI’s ability to offer LMI’s customers a credit card payment option. Most of LMI’s individual and small and medium-sized business, or SMB, customers purchase LMI’s services online with a credit card, and LMI’s business depends substantially upon the ability to offer the credit card payment option. Any loss of LMI’s ability to offer LMI’s customers a credit card payment option would make its services less attractive and hurt LMI’s business. LMI’s administrative costs related to customer payment processing would also increase significantly if it were not able to accept credit card payments for LMI’s services.

 

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Evolving regulations and legal obligations related to data privacy, data protection and information security and LMI’s actual or perceived failure to comply with such obligations, could have an adverse effect on LMI’s business.

LMI’s handling of the data LMI collects from LMI’s customers, as further described in LMI’s privacy policy, and LMI’s processing of personally identifiable information and data of LMI’s customers’ customers through the services LMI provides, is subject to a variety of laws and regulations, which have been adopted by various federal, state and foreign governments to regulate the collection, distribution, use and storage of personal information of individuals. Several foreign countries in which LMI conducts business, including the European Union and Canada, currently have in place, or have recently proposed, laws or regulations concerning privacy, data protection and information security, which are more restrictive than those imposed in the United States. Some of these laws are in their early stages and LMI cannot yet determine the impact these revised laws and regulations, if implemented, may have on LMI’s business. However, any failure or perceived failure by LMI to comply with these privacy laws, regulations, policies or obligations or any security incident that results in the unauthorized release or transfer of personally identifiable information or other customer data in LMI’s possession, could result in government enforcement actions, litigation, fines and penalties and/or adverse publicity, all of which could have an adverse effect on LMI’s reputation and business.

LMI has in the past relied on the U.S. Department of Commerce’s Safe Harbor Privacy Principles and compliance with the U.S.-EU and U.S.-Swiss Safe Harbor Frameworks as a means for legitimizing the transfer of personally identifiable information from the European Economic Area, or EEA, to the United States. However, in October 2015, the European Union Court of Justice, or ECJ, ruled that the U.S.—EU Safe Harbor Framework is no longer deemed to be a valid method of transfer of data outside of the EEA. In response to the ECJ’s opinion, LMI has been working to implement alternative methods to transfer data from the EEA to the United States. However, LMI may ultimately be unsuccessful in establishing an acceptable means for the transfer of data from the EEA.

Data protection regulation remains an area of increased focus in all jurisdictions and data protection regulations continue to evolve. There is no assurance that LMI will be able to meet new requirements that may be imposed on the transfer of personally identifiable information from the EU to the United States without incurring substantial expense or at all. European and/or multi-national customers may be reluctant to purchase or continue to use LMI’s services due to concerns regarding their data protection obligations. In addition, LMI may be subject to claims, legal proceedings or other actions by individuals or governmental authorities if they have reason to believe that LMI’s data privacy or security measures fail to comply with current or future laws and regulations.

Certain of the GoTo Business’ services are subject to regulation by the FCC and similar state agencies, and future legislative or regulatory actions could adversely affect LMI’s business and expose LMI to liability.

A portion of the GoTo Business is subject to existing or potential regulation by the Federal Communications Commission, or FCC, and state public utility commissions, including regulations related to privacy, disabilities access, telephone number porting, rural call completion, contributions to federal and state Universal Service Funds, or USFs, regulatory fee payments, obligations under the Communications Assistance for Law Enforcement Act, and other requirements. FCC or state action, including decisions extending additional regulation to information services and/or classifying services of the GoTo Business as telecommunications services, could result in additional federal and state regulatory obligations that would require LMI to change the way it conducts the GoTo Business, increase LMI’s operating expenses, or otherwise harm the GoTo Business’ results of operations. If LMI does not comply with applicable rules and regulations, including any future rules and regulations that may be adopted, LMI could be subject to FCC and/or state enforcement action, fines, loss of licenses, and other restrictions on its ability to operate or offer certain services of the GoTo Business. Any enforcement action by the FCC or state public utility commissions, which may be a public process, could hurt LMI’s reputation in the industry, impair its ability to sell certain service offerings to customers and have a materially adverse impact on LMI’s revenues.

 

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The GoTo Business includes competitive local exchange carrier services, or CLEC services, and interexchange services, or IXC services, both of which are regulated by the FCC and states as traditional telecommunications services. The CLEC and IXC services depend in part on access to wholesale services from other providers that are themselves regulated by the FCC and/or the states, and regulatory changes may affect LMI’s ability to access wholesale services and/or the prices for those services, which could adversely affect LMI’s costs and could have a materially adverse impact on LMI’s operating results and cash flows.

The GoTo Business pays compensation to other communications providers to deliver their communications traffic or receives compensation from other providers in exchange for handling their communications traffic; such compensation is generally referred to as intercarrier compensation. Intercarrier compensation has been a frequent subject of litigation and of regulatory reform. It is possible that LMI could become involved in intercarrier compensation litigation, or could be affected by existing or new intercarrier compensation reforms. Intercarrier compensation disputes could impose costs on LMI, including litigation costs, increased intercarrier compensation obligations and decreased intercarrier compensation revenue, as well as judgments that could cause LMI to incur additional expenses and which may harm LMI’s business and damage its brand and reputation.

Additionally, if LMI expands the GoTo Business internationally, LMI may be subject to similar laws and regulations in foreign countries. Any international operations are potentially subject to country-specific governmental regulation and related actions that may increase costs or prevent LMI from providing certain GoTo Business’ service offerings in certain countries. Certain of the GoTo Business’ service offerings may be used by customers located in countries where VoIP and other forms of IP communications may be illegal or require special licensing, or in countries on a U.S. embargo list. Users in those countries may be able to continue to use these service offerings in those countries notwithstanding the illegality or embargo, and LMI may be subject to costly penalties or governmental action if customers continue to use such service offerings in countries where it is illegal to do so. LMI may be required to incur additional expenses to meet applicable international regulatory requirements or be required by law to discontinue those subscriptions.

LMI is required to comply with certain financial and operating covenants under its existing credit facilities; any failure to comply with those covenants could cause amounts borrowed under those facilities to become immediately due and payable or prevent LMI from borrowing under the facilities.

In February 2015, LMI entered into a credit agreement with a syndicate of banks, financial institutions and other lending entities pursuant to which they made available to LMI a secured revolving credit facility of $150 million (which may be increased by an additional $50 million if the existing or additional lenders are willing to make such increased commitments) which is available through February 18, 2020, at which time any amounts outstanding will be due and payable in full. As of November 10, 2016, LMI had $30.0 million of outstanding borrowings under the credit facility. LMI may wish to borrow additional amounts under the facility in the future, or may decide to incur indebtedness under new credit facilities, for general corporate purposes, including, but not limited to, the potential acquisition of complementary products or businesses, and share repurchases, as well as for working capital.

Under the credit agreement, LMI is required to comply with certain financial and operating covenants which will limit its ability to operate its business as LMI otherwise might operate it. LMI’s failure to comply with any of these covenants or to meet any payment obligations under the credit facility could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable. LMI might not have sufficient working capital or liquidity to satisfy any repayment obligations in the event of an acceleration of those obligations. In addition, if LMI is not in compliance with the financial and operating covenants at the time it wishes to borrow additional funds, LMI will be unable to borrow such funds.

 

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The loss of key employees or an inability to attract and retain additional personnel may impair LMI’s ability to grow its business.

LMI is highly dependent upon the continued service and performance of its executive management team as well as other key technical and sales employees. These key employees are not party to an employment agreement with LMI, and they may terminate their employment at any time with no advance notice. The replacement of these key employees likely would involve significant time and costs, and the loss of these key employees may significantly delay or prevent the achievement of LMI’s business objectives.

LMI faces intense competition for qualified individuals from numerous technology, software and manufacturing companies. For example, LMI’s competitors may be able to attract and retain a more qualified engineering team by offering more competitive compensation packages. If LMI is unable to attract new engineers and retain its current engineers, LMI may not be able to develop and maintain its services at the same levels as LMI’s competitors and LMI may, therefore, lose potential customers and sales penetration in certain markets. LMI’s failure to attract and retain suitably qualified individuals could have an adverse effect on its ability to implement LMI’s business plan and, as a result, LMI’s ability to compete would decrease, its operating results would suffer and its revenues would decrease.

LMI’s long-term success depends, in part, on its ability to expand the sales of LMI’s services to customers located outside of the United States, and thus LMI’s business is susceptible to risks associated with international sales and operations.

LMI currently maintains offices and has sales personnel outside of the United States and is expanding its international operations. LMI’s international expansion efforts may not be successful. In addition, conducting international operations subjects LMI to new risks than it has generally faced in the United States. These risks include:

 

    localization of LMI’s services, including translation into foreign languages and adaptation for local practices and regulatory requirements;

 

    lack of familiarity with and unexpected changes in foreign regulatory requirements;

 

    longer accounts receivable payment cycles and difficulties in collecting accounts receivable;

 

    difficulties in managing and staffing international operations;

 

    fluctuations in currency exchange rates;

 

    potentially adverse tax consequences, including the complexities of foreign value added or other tax systems and restrictions on the repatriation of earnings;

 

    dependence on certain third parties, including channel partners with whom LMI does not have extensive experience;

 

    the burdens of complying with a wide variety of foreign laws and legal standards;

 

    increased financial accounting and reporting burdens and complexities;

 

    political, social and economic instability abroad, terrorist attacks and security concerns in general; and

 

    reduced or varied protection for intellectual property rights in some countries.

Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability.

 

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Failure to effectively and efficiently service SMBs would adversely affect LMI’s ability to increase its revenue.

LMI markets and sells a significant amount of its services to SMBs. SMBs are challenging to reach, acquire and retain in a cost-effective manner. To grow LMI’s revenue quickly, LMI must add new customers, sell additional services to existing customers and encourage existing customers to renew their subscriptions. Selling to and retaining SMBs is more difficult than selling to and retaining large enterprise customers because SMB customers generally:

 

    have high failure rates;

 

    are price sensitive;

 

    are difficult to reach with targeted sales campaigns;

 

    have high churn rates in part because of the scale of their businesses and the ease of switching services; and

 

    generate less revenue per customer and per transaction.

In addition, SMBs frequently have limited budgets and may choose to spend funds on items other than LMI’s services. Moreover, SMBs are more likely to be significantly affected by economic downturns than larger, more established companies, and if these organizations experience economic hardship, they may be unwilling or unable to expend resources on IT.

If LMI is unable to market and sell its services to SMBs with competitive pricing and in a cost-effective manner, LMI’s ability to grow its revenue quickly and maintain profitability will be harmed.

If LMI fails to meet the minimum service level commitments offered to some of its customers, LMI could be obligated to issue credits for future services or pay penalties to customers, which could significantly harm its revenue.

Some of LMI’s current customer agreements provide minimum service level commitments addressing uptime, functionality or performance. If LMI is unable to meet the stated service level commitments for these customers or its services suffer extended periods of unavailability, LMI is or may be contractually obligated to provide these customers with credits for future services or pay other penalties. LMI’s revenue could be significantly impacted if LMI is unable to meet LMI’s service level commitments and is required to provide a significant amount of LMI’s services at no cost or pay other penalties. LMI does not currently have any reserves on its balance sheet for these commitments.

LMI’s sales cycles for enterprise customers can be long, unpredictable and require considerable time and expense, which may cause its operating results to fluctuate.

The timing of LMI’s revenue from sales to enterprise customers is difficult to predict. These efforts require LMI to educate its customers about the use and benefit of LMI’s services, including the technical capabilities and potential cost savings to an organization. Enterprise customers typically undertake a significant evaluation process that has in the past resulted in a lengthy sales cycle, typically several months. LMI spends substantial time, effort and money on LMI’s enterprise sales efforts without any assurance that these efforts will produce any sales. In addition, service subscriptions are frequently subject to budget constraints and unplanned administrative, processing and other delays. If sales expected from a specific customer for a particular quarter are not realized in that quarter or at all, LMI’s results could fall short of public expectations and LMI’s business, operating results and financial condition could be adversely affected.

Adverse economic conditions or reduced IT spending may adversely impact LMI’s revenues and profitability.

LMI’s business depends on the overall demand for IT and on the economic health of LMI’s current and prospective customers. The use of LMI’s service is often discretionary and may involve a commitment of capital

 

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and other resources. Weak economic conditions in the United States, European Union and other key international economies may affect the rate of IT spending and could adversely impact LMI’s customers’ ability or willingness to purchase LMI’s services, delay prospective customers’ purchasing decisions, reduce the value or duration of their subscription contracts, or affect renewal rates, all of which could have an adverse effect on LMI’s business, operating results and financial condition.

The results of the United Kingdom’s referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and LMI’s business.

In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a national referendum. The referendum was advisory, and the terms of any withdrawal are subject to a negotiation period that could last at least two years after the government of the United Kingdom formally initiates a withdrawal process. Nevertheless, the referendum has created significant uncertainty about the future relationship between the United Kingdom and the European Union, including with respect to the laws and regulations that will apply as the United Kingdom determines which European Union laws to replace or replicate in the event of a withdrawal. The referendum may also give rise to calls for the governments of other European Union member states to consider withdrawal. These developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Any of these factors could depress economic activity and restrict LMI’s access to capital, which could have a material adverse effect on LMI’s business, financial condition and results of operations and reduce the price of LMI common stock.

LMI’s success depends in large part on LMI’s ability to protect and enforce LMI’s intellectual property rights.

LMI relies on a combination of patent, copyright, service mark, trademark and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect its intellectual property rights, all of which provide only limited protection. In addition, LMI has patented certain technologies used to provide its services and has additional patents pending. LMI cannot assure you that any patents will issue from LMI’s currently pending patent applications in a manner that gives it the protection sought, if at all, or that any future patents issued will not be challenged, invalidated or circumvented. Any patents that may issue in the future from pending or future patent applications may not provide sufficiently broad protection or they may not prove to be enforceable in actions against alleged infringers. Also, LMI cannot assure you that any future service mark or trademark registrations will be issued for pending or future applications or that any registered service marks or trademarks will be enforceable or provide adequate protection of LMI’s proprietary rights.

LMI endeavors to enter into agreements with its employees and contractors and agreements with parties with whom LMI does business to limit access to and disclosure of LMI’s proprietary information. The steps LMI has taken, however, may not prevent unauthorized use or the reverse engineering of LMI’s technology. Moreover, others may independently develop technologies that are competitive to LMI’s or infringe its intellectual property. Enforcement of LMI’s intellectual property rights also depends on LMI’s successful legal actions against these infringers, but these actions may not be successful, even when LMI’s rights have been infringed.

Furthermore, effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which LMI’s services are available. In addition, the legal standards relating to the validity, enforceability and scope of protection of intellectual property rights in Internet-related industries are uncertain and still evolving.

LMI’s use of “open source” software could negatively affect its ability to sell its services and subject LMI to possible litigation.

A portion of the technologies LMI licenses incorporate so-called “open source” software, and LMI may incorporate additional open source software in the future. Open source software is generally licensed by its

 

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authors or other third parties under open source licenses. If LMI fails to comply with these licenses, it may be subject to certain conditions, including requirements that LMI offer its services that incorporate the open source software for no cost, that it make available source code for modifications or derivative works it creates based upon, incorporating or using the open source software and/or that LMI licenses such modifications or derivative works under the terms of the particular open source license. If an author or other third party that distributes such open source software were to allege that LMI had not complied with the conditions of one or more of these licenses, LMI could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of its services that contained the open source software and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of LMI’s services.

LMI relies on third-party software, including server software and licenses from third parties to use patented intellectual property that is required for the development of LMI’s services, which may be difficult to obtain or which could cause errors or failures of LMI’s services.

LMI relies on software licensed from third parties to offer its services, including server software from Microsoft and patented third-party technology. In addition, LMI may need to obtain future licenses from third parties to use intellectual property associated with the development of its services, which might not be available to LMI on acceptable terms, or at all. Any loss of the right to use any software required for the development and maintenance of LMI’s services could result in delays in the provision of LMI’s services until equivalent technology is either developed by LMI, or, if available, is identified, obtained and integrated, which could harm LMI’s business. Any errors or defects in third-party software could result in errors or a failure of LMI’s services which could harm its business.

Material defects or errors in the software LMI uses to deliver its services could harm LMI’s reputation, result in significant costs to LMI and impair LMI’s ability to sell its services.

The software applications underlying LMI’s services are inherently complex and may contain material defects or errors, particularly when first introduced or when new versions or enhancements are released. LMI has from time to time found defects in LMI’s services, and new errors in its existing services may be detected in the future. Any defects that cause interruptions to the availability of LMI’s services could result in:

 

    a reduction in sales or delay in market acceptance of LMI’s services;

 

    sales credits or refunds to customers;

 

    loss of existing customers and difficulty in attracting new customers;

 

    diversion of development resources;

 

    reputational harm; and

 

    increased insurance costs.

After the release of LMI’s services, defects or errors may also be identified from time to time by LMI’s internal team and by LMI’s customers. The costs incurred in correcting any material defects or errors in LMI’s services may be substantial and could harm LMI’s operating results.

Government regulation of the Internet, telecommunications and other communications technologies could harm LMI’s business and operating results.

As Internet commerce and telecommunications continue to evolve, increasing regulation by federal, state or foreign governments and agencies becomes more likely. For example, LMI believes increased regulation is likely in the area of data privacy, and laws and regulations applying to the solicitation, collection, processing or use of personal or consumer information could affect LMI’s customers’ ability to use and share data, potentially

 

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reducing demand for LMI’s products and services. In addition, taxation of products and services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the Internet or utilizing telecommunications services may also be imposed. Any regulation imposing greater fees for Internet use or restricting the exchange of information over the Internet could diminish the viability of LMI’s services, which could harm LMI’s business and operating results.

LMI’s software products contain encryption technologies, certain types of which are subject to U.S. and foreign export control regulations and, in some foreign countries, restrictions on importation and/or use. LMI has submitted encryption products for technical review under U.S. export regulations and has received the necessary approvals. Any failure on LMI’s part to comply with encryption or other applicable export control requirements could result in financial penalties or other sanctions under the U.S. export regulations, which could harm LMI’s business and operating results. Foreign regulatory restrictions could impair LMI’s access to technologies that LMI seeks for improving LMI’s products and services and may also limit or reduce the demand for its products and services outside of the United States.

LMI’s operating results may be harmed if it is required to collect sales or other related taxes for its subscription services or pay regulatory fees in jurisdictions where it has not historically done so.

Primarily due to the nature of LMI’s services in certain states and countries, LMI does not believe it is required to collect sales or other related taxes from its customers in certain states or countries. However, one or more other states or countries may seek to impose sales, regulatory fees or other tax collection obligations on it, including for past sales by LMI or LMI’s resellers and other partners. A successful assertion that LMI should be collecting sales or other related taxes on its services or paying regulatory fees could result in substantial tax liabilities for past sales, discourage customers from purchasing LMI’s services or otherwise harm LMI’s business and operating results.

LMI’s reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

Generally accepted accounting principles in the United States, or GAAP, are subject to interpretation by the Financial Accounting Standards Board, or FASB, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on LMI’s reported financial results for periods prior and subsequent to such change. For example, recent new standards issued by the FASB that could materially impact LMI’s financial statements include revenue from contracts with customers, certain improvements to employee share-based payment accounting and accounting for leases. LMI may adopt one or more of these standards retrospectively to prior periods and the adoption may result in an adverse change to previously reported results. Additionally, the adoption of these standards may potentially require enhancements or changes in LMI’s systems and will require significant time and cost on behalf of LMI’s financial management. The prescribed periods of adoption of these standards and other pending changes in accounting principles generally accepted in the United States, are further discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Accounting Pronouncements” in LMI’s most recent Annual Report on Form 10-K, which is incorporated by reference.

Risks Related to Ownership of LMI Common Stock

LMI’s failure to raise additional capital or generate the cash flows necessary to expand LMI’s operations and invest in LMI’s services could reduce LMI’s ability to compete successfully.

LMI may need to raise additional funds, and LMI may not be able to obtain additional debt or equity financing on favorable terms, if at all. If LMI raises additional equity financing, LMI’s stockholders may experience significant dilution of their ownership interests, and the per share value of LMI common stock could decline. If LMI engages in debt financing, LMI may be required to accept terms that restrict LMI’s ability to pay

 

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dividends or make distributions, incur additional indebtedness and force LMI to maintain specified liquidity or other ratios. If LMI needs additional capital and cannot raise it on acceptable terms, LMI may not be able to, among other things:

 

    develop or enhance services;

 

    continue to expand its development, sales and marketing organizations;

 

    acquire complementary technologies, products or businesses;

 

    expand LMI’s operations, in the United States or internationally;

 

    hire, train and retain employees; or

 

    respond to competitive pressures or unanticipated working capital requirements.

LMI’s stock price may be volatile, and the market price of LMI common stock may drop in the future.

During the period from LMI’s initial public offering in July 2009 through December 5, 2016, LMI common stock has traded as high as $110.10 and as low as $15.15. An active, liquid and orderly market for LMI common stock may not be sustained, which could depress the trading price of LMI common stock. Some of the factors that may cause the market price of LMI common stock to fluctuate include:

 

    the success or failure of the Merger as well as LMI’s ability to realize the anticipated cost synergies, growth opportunities and other financial and operating benefits as a result of the Transactions;

 

    fluctuations in LMI’s quarterly financial results or the quarterly financial results of companies perceived to be similar to LMI;

 

    fluctuations in LMI’s recorded revenue, even during periods of significant sales order activity;

 

    changes in estimates of LMI’s financial results or recommendations by securities analysts;

 

    failure of any of LMI’s services to achieve or maintain market acceptance;

 

    changes in market valuations of companies perceived to be similar to LMI;

 

    announcements regarding changes to LMI’s current or planned products or services;

 

    success of competitive companies, products or services;

 

    changes in LMI’s capital structure, such as future issuances of securities or the incurrence of debt;

 

    announcements by LMI or its competitors of significant new services, contracts, acquisitions or strategic alliances;

 

    regulatory developments in the United States, foreign countries or both;

 

    litigation, including stockholder litigation and/or class action litigation, involving LMI’s company, LMI’s services or LMI’s general industry, as well as announcements regarding developments in on-going litigation matters;

 

    additions or departures of key personnel;

 

    general perception of the future of the remote-connectivity market or LMI’s services;

 

    investors’ general perception of LMI; and

 

    changes in general economic, industry and market conditions.

In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of LMI common stock could decline for reasons unrelated to its business, financial condition or results of operations. If any of the foregoing occurs, it could cause LMI’s stock price to fall and may expose LMI to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

 

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If securities or industry analysts who cover LMI, LMI’s business or LMI’s market publish a negative report or change their recommendations regarding LMI’s stock adversely, LMI’s stock price and trading volume could decline.

The trading market for LMI common stock is influenced by the research and reports that industry or securities analysts publish about LMI, LMI’s business, LMI’s market or LMI’s competitors. If any of the analysts who cover LMI or may cover LMI in the future publish a negative report or change their recommendation regarding LMI’s stock adversely, or provide more favorable relative recommendations about LMI’s competitors, LMI’s stock price would likely decline.

Certain stockholders could attempt to influence changes within LMI which could adversely affect LMI’s operations, financial condition and the value of LMI common stock.

LMI’s stockholders may from time-to-time seek to acquire a controlling stake in LMI’s company, engage in proxy solicitations, advance stockholder proposals or otherwise attempt to effect changes. Campaigns by stockholders to effect changes at publicly-traded companies are sometimes led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales of assets or the entire company. Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, and could disrupt LMI’s operations and divert the attention of the LMI Board of Directors and senior management from the pursuit of its business strategies. These actions could adversely affect LMI’s operations, financial condition and the value of LMI common stock.

Anti-takeover provisions contained in LMI’s certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

LMI’s certificate of incorporation, bylaws and Delaware law contain provisions that could have the effect of rendering more difficult or discouraging an acquisition deemed undesirable by the LMI Board of Directors. LMI’s corporate governance documents include provisions:

 

    establishing that the LMI Board of Directors is divided into three classes, with each class serving three-year staggered terms;

 

    authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to LMI common stock;

 

    limiting the liability of, and providing indemnification to, LMI’s directors and officers;

 

    limiting the ability of LMI’s stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;

 

    requiring advance notice of stockholder proposals for business to be conducted at meetings of LMI’s stockholders and for nominations of candidates for election to the LMI Board of Directors;

 

    controlling the procedures for the conduct and scheduling of LMI Board of Directors and stockholder meetings;

 

    providing the LMI Board of Directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings;

 

    restricting the forum for certain litigation brought against LMI to Delaware;

 

    providing the LMI Board of Directors with the exclusive right to determine the number of directors on the LMI Board of Directors and the filling of any vacancies or newly created seats on the LMI Board of Directors; and

 

    providing that directors may be removed by stockholders only for cause.

These provisions, alone or together, could delay hostile takeovers and changes in control of LMI’s company or changes in LMI’s management.

 

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As a Delaware corporation, LMI is also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which generally prevents certain interested stockholders, including a person who beneficially owns 15% or more of LMI’s outstanding common stock, from engaging in certain business combinations with LMI within three years after the person becomes an interested stockholder unless certain approvals are obtained. Any provision of LMI’s certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for LMI’s stockholders to receive a premium for their shares of LMI common stock, and could also affect the price that some investors are willing to pay for LMI common stock.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus-information statement, including information incorporated by reference into this proxy statement/prospectus-information statement, contains certain statements which may constitute “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Statements that are not historical fact are forward looking-statements, and are contained throughout this document. These forward-looking statements reflect management’s views and assumptions as of the date of this proxy statement/prospectus-information statement regarding future events and operating performance. Some of the forward-looking statements in this document can be identified by the use of forward-looking terms such as “believes”, “intends”, “expects”, “may”, “will”, “estimates”, “should”, “could”, “anticipates”, “plans”, “projects”, “forecasts” or other comparable terms. Forward-looking statements, such as certain pro forma information; any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; any statements of belief; any statements regarding the expected effect or outcome of contingencies and litigation; and any statements of assumptions underlying any of the foregoing, are subject to known and unknown risks and uncertainties, many of which may be beyond the control of GetGo, Citrix and/or LMI, that could cause actual results to differ materially from any future results, performance, or achievements expressed or implied by the forward-looking statements.

You should understand that the following important factors, assumptions, risks and uncertainties could affect the future results of LMI and/or GetGo and could cause actual results to differ materially from those expressed in the forward-looking statements:

 

    the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

    the risk that the LMI stockholders may not approve the Share Issuance in connection with the proposed Merger;

 

    the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated;

 

    risks that any of the closing conditions to the Merger, including Citrix’s distribution of the shares of GetGo common stock, may not be satisfied in a timely manner;

 

    risks related to disruption of management time from ongoing business operations due to the proposed transactions;

 

    failure to realize the estimated synergies or growth from the proposed transactions or that such benefits may take longer to realize than expected;

 

    risks related to unanticipated costs of integration of GetGo by LMI;

 

    the effect of the announcement of the proposed transactions or the consummation of the proposed transactions on the ability of LMI, Citrix and GetGo to retain and hire key personnel and maintain relationships with their key business partners and customers, and on their operating results and businesses generally;

 

    the length of time necessary to consummate the proposed transactions;

 

    adverse trends in economic conditions generally or in the industries in which LMI, Citrix and GetGo operate;

 

    adverse changes to, or interruptions in, relationships with third parties unrelated to the announcement;

 

    LMI’s ability to compete effectively and successfully and to add new products and services;

 

    LMI’s ability to successfully manage and integrate acquisitions;

 

    the ability to attract new customers and retain existing customers in the manner anticipated;

 

    unanticipated changes relating to competitive factors in the parties’ industries; and

 

    potential business interruptions in connection with LMI’s technology systems.

 

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THE LMI SPECIAL MEETING

General

This proxy statement/prospectus-information statement is being provided to LMI stockholders as part of a solicitation of proxies by the LMI Board of Directors for use at the LMI special meeting. This proxy statement/prospectus-information statement provides LMI stockholders with important information they need to know to be able to vote, or instruct their brokers or other nominees to vote, at the LMI special meeting.

Date, Time and Place

The LMI special meeting of stockholders will be held at the offices of Latham & Watkins LLP, 200 Clarendon Street, 27th Floor, Boston, Massachusetts 02116, on January 25, 2017 at 9:00 a.m., Eastern time.

Matters for Consideration

At the special meeting, LMI stockholders will be asked to vote on the following proposals:

 

    a proposal to approve the issuance of LMI common stock in connection with the Merger, which we refer to as the Share Issuance;

 

    a proposal to adopt an amendment to LMI’s restated certificate of incorporation to increase the authorized number of shares of LMI common stock by an additional 75,000,000 shares, conditioned upon the closing of the Merger, which we refer to as the Charter Amendment;

 

    a proposal to approve an amendment and restatement of LMI’s Amended and Restated 2009 Stock Incentive Plan to increase the number of shares of LMI common stock that may be issued under the plan by an additional 4,500,000 shares and extend the term of the plan to December 5, 2026, conditioned upon the closing of the Merger, which we refer to as the Plan Amendment; and

 

    a proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies in the event there are not sufficient votes at the time of the special meeting to approve the Share Issuance, which we refer to as the meeting adjournment proposal.

Completion of the Merger is conditioned on approval by LMI stockholders of the Share Issuance, but is not conditioned on the approval of the Charter Amendment, the Plan Amendment or the meeting adjournment proposal. The Share Issuance, the Charter Amendment and the Plan Amendment become effective only if the Merger is completed.

THE LMI BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE MERGER, THE SHARE ISSUANCE, THE CHARTER AMENDMENT AND THE PLAN AMENDMENT AND UNANIMOUSLY RECOMMENDS THAT LMI STOCKHOLDERS VOTE FOR THE SHARE ISSUANCE, FOR THE CHARTER AMENDMENT AND FOR THE PLAN AMENDMENT.

THE LMI BOARD OF DIRECTORS ALSO UNANIMOUSLY RECOMMENDS THAT LMI STOCKHOLDERS VOTE FOR THE MEETING ADJOURNMENT PROPOSAL.

Record Date; Voting Information

The record date for the special meeting is December 9, 2016. Only holders of record of LMI common stock at the close of business on the record date will be entitled to notice of, and to vote at, the special meeting or any adjournment or postponement thereof. As of the record date, approximately 25,552,047 shares of LMI common stock were issued and outstanding and entitled to notice of, and to vote at, the special meeting, and there were approximately 10 holders of record of LMI common stock. Each share of LMI common stock shall entitle the

 

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holder to one vote on each of the proposals to be considered at the special meeting. A complete list of stockholders entitled to vote at the special meeting will be open to the examination of stockholders on the special meeting date and for a period of ten days prior to the special meeting, during normal business hours, at the offices of LogMeIn, Inc., 320 Summer Street, Boston, Massachusetts 02210.

If you are a record holder of LMI common stock on the record date, you may vote your shares of LMI common stock in person at the special meeting or by proxy as described below under “—Voting by Proxy.”

Quorum

The holders of a majority of the issued and outstanding common stock of LMI present either in person or by proxy at the special meeting will constitute a quorum. Proxies received but marked as abstentions will be included in the calculation of the number of shares considered to be present at the special meeting for purposes of determining if a quorum is present. Broker non-votes will not be included in the calculation of the number of shares considered to be present at the special meeting for purposes of determining if a quorum is present. If a quorum is not present or if there are not sufficient votes for the approval of the Share Issuance, LMI expects to, and if reasonably requested by Citrix will, adjourn the LMI special meeting to solicit additional proxies, subject to approval of the meeting adjournment proposal by the affirmative vote of a majority in voting power of the votes cast by the holders of all of the shares of LMI common stock present or represented at the special meeting and voting affirmatively or negatively. At any subsequent reconvening of the LMI special meeting, all proxies will be voted in the same manner as the proxies would have been voted at the original convening of the LMI special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the adjourned meeting.

Required Vote

LMI stockholders of record on the record date for the LMI special meeting may vote “FOR” or “AGAINST,” or may abstain from voting, on the proposal to approve each of the Share Issuance, the Charter Amendment, the Plan Amendment and the meeting adjournment. Consummation of the Transactions requires only the approval of the Share Issuance.

In accordance with NASDAQ rules, the DGCL, and LMI’s organizational documents, the approval by LMI stockholders of the Share Issuance proposal requires the affirmative vote of a majority of the votes cast by the holders of all of the shares of LMI common stock present in person or represented by proxy at the special meeting at which a quorum is present. This means the number of shares voted “FOR” the Share Issuance must exceed the number of shares voted “AGAINST” the Share Issuance. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the vote for the Share Issuance proposal.

In accordance with the DGCL and LMI’s organizational documents, the approval of the Charter Amendment requires the affirmative vote of the holders of a majority of the shares of LMI common stock outstanding and entitled to vote at the special meeting. This means that of the outstanding shares, a majority of them must be voted “FOR” the Charter Amendment for it to be approved. Abstentions and broker non-votes will have the effect of a vote “AGAINST” the Charter Amendment proposal.

In accordance with Section 162(m) of the Code, the DGCL and LMI’s organizational documents, the approval of the Plan Amendment requires the affirmative vote of a majority of the votes cast by the holders of all of the shares of LMI common stock present in person or represented by proxy at the special meeting at which a quorum is present. This means the number of shares voted “FOR” the Plan Amendment must exceed the number of shares voted “AGAINST” the Plan Amendment. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the vote for the Plan Amendment proposal.

 

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In accordance with the DGCL and LMI’s organizational documents, the approval of the meeting adjournment proposal requires the affirmative vote of a majority of the votes cast by the holders of all of the shares of LMI common stock present in person or represented by proxy at the special meeting, whether or not a quorum is present. This means the number of shares voted “FOR” the meeting adjournment must exceed the number of shares voted “AGAINST” the meeting adjournment. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose, and will have no effect on the vote for the meeting adjournment proposal.

No vote of Citrix stockholders is required in connection with the Transactions, and the only vote required with respect to GetGo is the vote of Citrix as its sole stockholder, which stockholder approval has been obtained. No directors, executive officers or affiliates of Citrix or GetGo will have voting rights in connection with the Transactions with respect to their ownership of any Citrix common stock or GetGo common stock.

Voting by Proxy

If you were a record holder of LMI common stock at the close of business on the record date of the special meeting, a proxy card is enclosed for your use. LMI requests that you submit your proxy to vote your shares as promptly as possible by mail, telephone or internet by following the instructions on the proxy card. Information and applicable deadlines for submitting your proxy by mail, telephone or internet are set forth on the enclosed proxy card. When the accompanying proxy is properly returned, the shares of LMI common stock represented by it will be voted at the special meeting or any adjournment or postponement thereof in accordance with the instructions contained in the proxy card. Submitting your proxy by internet or telephone authorizes the named proxies to vote your shares in the same manner as if you had marked, signed and returned a proxy card.

If a properly executed proxy is returned without an indication as to how the shares of LMI common stock represented are to be voted with regard to a particular proposal, the LMI common stock represented by the proxy will be voted in accordance with the recommendation of the LMI Board of Directors and, therefore, “FOR” the proposal to approve the Share Issuance, “FOR” the proposal to approve the Charter Amendment, “FOR” the proposal to approve the Plan Amendment and “FOR” the meeting adjournment proposal.

At the date hereof, the LMI Board of Directors has no knowledge of any business that will be presented for consideration at the special meeting and that would be required to be set forth in this proxy statement/prospectus-information statement or the related proxy card other than the matters set forth in the Notice of Special Meeting of Stockholders. If any other matter is properly presented at the special meeting for consideration, it is intended that the persons named in the enclosed form of proxy and acting thereunder will vote in accordance with their best judgment on such matter.

If your broker, bank or other nominee holds your shares of LMI common stock in street name, you must either direct your nominee on how to vote your shares or obtain a proxy from your nominee to vote in person at the special meeting. Please check the voting form used by your nominee for information on how to submit your instructions to them.

Your vote is important. Accordingly, if you were a record holder of LMI common stock on the record date of the special meeting, please sign and return the enclosed proxy card or submit your proxy via the internet or telephone whether or not you plan to attend the special meeting in person. Proxies submitted through the specified internet website or by phone must be received by 11:59 p.m., Eastern Time, on January 24, 2017.

Revocation of Proxies

If you are the record holder of LMI common stock, you can change your vote or revoke your proxy at any time before your proxy is voted at the special meeting. You can do this by:

 

    sending a written notice that is received prior to the special meeting stating that you revoke your proxy;

 

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    timely delivering a new, valid proxy bearing a later date (by mail, telephone or internet by following the instructions on the proxy card); or

 

    attending the LMI special meeting and voting in person, which will revoke any proxy previously given. Simply attending the special meeting without voting will not revoke any proxy that you have previously given or change your vote.

A registered LMI stockholder may revoke a proxy by any of these methods, regardless of the method used to deliver the stockholder’s previous proxy.

Written notices of revocation and other communications with respect to the revocation of proxies should be addressed as follows:

LogMeIn, Inc.

320 Summer Street

Boston, Massachusetts 02210

Attention: Senior Vice President, General Counsel and Secretary

If your shares are held in “street name” through a broker, bank or other nominee, you may change your vote by submitting new voting instructions to your broker, bank or nominee in accordance with its established procedures. If your shares are held in the name of a broker, bank or other nominee and you decide to revoke your proxy by attending the special meeting and voting in person, your vote in person at the special meeting will not be effective unless you have obtained and present an executed proxy issued in your name from the record holder (your broker, bank or nominee).

Voting by LMI Directors and Executive Officers

At the close of business on the record date of the special meeting, LMI directors and executive officers were entitled to vote approximately 4.7% of the shares of LMI common stock outstanding on the record date. LMI currently expects that its directors and executive officers and their affiliates will vote their shares in favor of all proposals. In addition, Michael K. Simon, Chairman of the LMI Board of Directors and former Chief Executive Officer, who owns more than 3% of the LMI common stock outstanding, has entered into a voting agreement with Citrix whereby he has agreed to, among other things, vote all shares held by him in favor of the Share Issuance and the Charter Amendment.

Solicitation of Proxies

LMI is soliciting proxies for the special meeting and will bear all expenses in connection with solicitation of proxies. LMI has retained Georgeson LLC, a third-party proxy consultant, to solicit proxies in connection with the special meeting at a cost of approximately $17,500 plus expenses. Upon request, LMI will pay brokerage houses, custodians, nominees and fiduciaries their reasonable out-of-pocket expenses for sending proxy materials to, and obtaining instructions from, persons for whom they hold shares. LMI expects to solicit proxies primarily by mail, but its directors, officers and other employees of LMI may, without any pay, solicit in person or by internet, telephone or mail.

Other Matters

As of the date of this proxy statement/prospectus-information statement, the LMI Board of Directors knows of no other matters that will be presented for consideration at the special meeting other than as described in this proxy statement/prospectus-information statement. If any other matters properly come before the special meeting of LMI stockholders, or any adjournments or postponements of the special meeting, and are properly voted upon, the enclosed proxies will give the individuals that LMI stockholders name as proxies therein discretionary

 

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authority to vote the shares represented by these proxies as to any of these matters; provided, however, that those individuals will only exercise this discretionary authority with respect to matters that were unknown a reasonable time before the solicitation of proxies.

Assistance

LMI stockholders who need assistance in voting their shares or need a copy of this proxy statement/prospectus-information statement should contact:

Georgeson LLC

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Telephone: (212) 440-9800

LMI stockholders should contact LMI’s transfer agent, at the phone number or address listed below, if they have questions concerning transfer of ownership or other matters pertaining to their stock accounts.

American Stock Transfer & Trust Company

6201 15th Avenue

Brooklyn, NY 11219

Telephone: (800) 937-5449

 

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THE TRANSACTIONS

General

GetGo was incorporated in Delaware on March 31, 2016 for the purpose of holding the GoTo Business. On July 26, 2016, Citrix and LMI announced that they had entered into an agreement pursuant to which LMI will combine with Citrix’s GoTo Business. In connection with the Transactions, Citrix will effect (1) the separation of the GoTo Business from Citrix’s other businesses, (2) the distribution of all of the shares of GetGo common stock to Citrix’s stockholders entitled to shares of GetGo common stock in the Distribution, and (3) immediately thereafter, the merger of Merger Sub with and into GetGo, with GetGo becoming a wholly owned subsidiary of LMI. Following the consummation of the Transactions, Citrix equityholders are expected to own approximately 50.1% of LMI common stock on a fully diluted basis after the Merger, and current LMI equityholders are expected to own approximately 49.9% of LMI common stock on a fully diluted basis after the Merger. Citrix stockholders will retain the shares of Citrix common stock that they held prior to the Merger.

In order to effect the Separation, the Distribution and the Merger, LMI, Citrix, GetGo and Merger Sub entered into a number of agreements, including the Merger Agreement and the Separation Agreement. These agreements, which are described in greater detail in this proxy statement/prospectus-information statement, provide for (1) the contribution of assets by Citrix and its subsidiaries to GetGo, and certain entities that will be subsidiaries of GetGo at the closing of the Merger, pursuant to an internal reorganization of certain assets, liabilities and entities, in order to separate the GoTo Business from Citrix’s other businesses, (2) the distribution of all of the shares of GetGo common stock to its transfer agent to be held collectively for the benefit of Citrix stockholders of record on the record date for the Distribution who are entitled to a pro rata distribution of such shares in the Distribution, (3) the merger of Merger Sub with and into GetGo, with GetGo being the surviving corporation of the Merger and a wholly owned subsidiary of LMI and (4) the automatic conversion of shares of GetGo common stock into shares of LMI common stock pursuant to the Merger, the distribution of book-entry authorizations for such shares of LMI common stock to Citrix stockholders entitled to shares of GetGo common stock in the Distribution and the payment of cash in lieu of fractional shares (if any) of such LMI common stock. In addition, LMI, Citrix, GetGo and Merger Sub have also entered into various ancillary agreements in connection with the Transactions that will govern the relationship among LMI, Citrix, GetGo and their respective affiliates after the Separation, the Distribution and the Merger.

Transaction Sequence

Below is a step-by-step list illustrating the sequence of material events relating to the Separation, the Distribution and the Merger. Each of these events is discussed in more detail elsewhere in this proxy statement/prospectus-information statement. LMI and Citrix anticipate that the Separation, Distribution and Merger will occur in the following order:

Step 1: At or prior to the date of the Distribution, referred to as the Distribution Date, Citrix, GetGo and certain of each of their subsidiaries will engage in a series of steps, which may include transfers of securities, formation of new entities or other actions, to effect an internal reorganization.

Step 2: On the Distribution Date, to the extent not previously effected pursuant to the internal reorganization, (a) Citrix and certain Citrix subsidiaries will transfer to GetGo or a GetGo designee certain assets related to the GoTo Business and certain liabilities related to the GoTo Business, and (b) GetGo and certain GetGo subsidiaries will transfer to Citrix or a Citrix designee assets excluded from the GoTo Business and liabilities excluded from the GoTo Business. The separation of the GoTo Business from the other businesses of Citrix pursuant to the Separation Agreement is referred to as the Separation.

Step 3: Following the Separation in Step 2, Citrix will distribute shares of GetGo common stock to the stockholders of Citrix, referred to as the Distribution. Citrix will effect the Distribution by distributing on a pro rata basis all of the shares of GetGo common stock it holds to Citrix stockholders entitled to shares of GetGo

 

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common stock in the Distribution as of the record date of the Distribution. Citrix will deliver the shares of GetGo common stock to its transfer agent, who will hold such shares for the benefit of Citrix stockholders.

Step 4: Immediately following the Distribution, Merger Sub will merge with and into GetGo, with GetGo being the surviving corporation of the Merger as a wholly owned subsidiary of LMI. In the Merger, each share of GetGo common stock held by Citrix stockholders will be automatically converted into the right to receive one share of LMI common stock. Citrix equityholders are expected to collectively own approximately 50.1% of the shares of LMI common stock on a fully diluted basis after the Merger, and LMI equityholders immediately prior to the Merger are expected to collectively own approximately 49.9% of the shares of LMI common stock on a fully diluted basis after the Merger.

Step 5: The exchange agent will distribute to Citrix stockholders entitled to shares of GetGo common stock in the Distribution shares of LMI common stock in the form of a book-entry authorization and cash in lieu of fractional shares (if any) in accordance with the terms of the Separation Agreement and the Merger Agreement.

Set forth below are diagrams that graphically illustrate, in simplified form, the existing corporate structure of the parties to the Transactions, the corporate structure of the parties immediately following the Distribution but before the Merger, and the final corporate structure immediately following the consummation of the Merger.

 

LOGO

 

 

LOGO

 

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The Separation and Distribution

As part of the Separation and immediately prior to the Distribution, to the extent not previously effected pursuant to an internal reorganization, (a) Citrix and certain Citrix subsidiaries will transfer to GetGo or a GetGo designee certain assets related to the GoTo Business and certain liabilities related to the GoTo Business, and (b) GetGo and certain GetGo subsidiaries will transfer to Citrix or a Citrix designee assets excluded from the GoTo Business and liabilities excluded from the GoTo Business, in order to separate the GoTo Business from Citrix’s other businesses prior to the Distribution.

After the Separation, and immediately prior to the Merger, Citrix will distribute all of the shares of GetGo common stock it holds to the Citrix stockholders as of the record date of the Distribution on a pro rata basis. Citrix will effect the Distribution by delivering the shares of GetGo common stock to its transfer agent. The transfer agent will hold such shares for the benefit of Citrix stockholders that are entitled to shares of GetGo common stock pending the effective time of the Merger and the automatic conversion of such shares of GetGo common stock into shares of LMI common stock. After the Distribution, Citrix will not own any shares of GetGo common stock.

As part of the Separation and pursuant to the Merger Agreement, the parties have agreed that at the closing of the Merger GetGo should have a target amount of non-cash working capital of $29.0 million, a target amount of deferred revenue of $124.0 million, zero indebtedness, and a target amount of cash on hand of $25.0 million.

As of the date of this proxy statement/prospectus-information statement, the Citrix Board of Directors has not set a record date for the Distribution. Citrix will publicly announce the record date for the Distribution when the record date has been determined, and prior to the completion of the Distribution and the Merger.

The specific terms of the Separation, including the specific assets and liabilities to be transferred to GetGo or a GetGo designee and the procedures by which Citrix and GetGo will become separate companies are described in more detail in “The Transaction Agreements—The Separation Agreement” on page 122.

The Merger

Immediately after the Distribution, pursuant to and in accordance with the terms and conditions of the Merger Agreement, Merger Sub will merge with and into GetGo whereby the separate corporate existence of Merger Sub will cease and GetGo will survive the Merger as a wholly owned subsidiary of LMI. After the Merger, LMI will continue its existence as a separately traded public company, owning the combined businesses of LMI and GetGo.

In the Merger, each share of GetGo common stock (except for any such shares held as treasury stock, which will be cancelled) will be automatically converted into the right to receive LMI common stock, as described below under “—Calculation of Merger Consideration.” Following the Merger, an exchange agent will distribute to each Citrix equityholder entitled to shares of GetGo common stock in the Distribution book-entry authorizations representing the number of whole shares of LMI common stock that such equityholder is entitled to receive in the Merger. The exchange agent will also distribute to each Citrix equityholder entitled to shares of GetGo common stock in the Distribution cash in lieu of fractional shares of LMI common stock, if any. Citrix stockholders entitled to shares of GetGo common stock in the Distribution will not be required to pay for the shares of LMI common stock that they will receive in the Merger, and they will also retain all of their shares of Citrix common stock that they held prior to the Merger.

Calculation of Merger Consideration

The Merger Agreement provides that, at the effective time of the Merger, each issued and outstanding share of GetGo common stock (except for any such shares held as treasury stock, which will be cancelled) will be

 

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automatically converted into the right to receive one share of LMI common stock. The conversion set forth in the Merger Agreement, after giving effect to the issuance of GetGo shares to Citrix under the Separation Agreement and the distribution of GetGo shares to the stockholders of Citrix in the Distribution, is expected to result in equityholders of Citrix collectively holding approximately 50.1% of the shares of LMI common stock on a fully diluted basis immediately following the Merger. Citrix expects to distribute 26,868,269 shares of GetGo common stock to Citrix stockholders in the Distribution. As a result, it is presently estimated that Citrix stockholders entitled to shares of GetGo common stock in the Distribution will be entitled to receive approximately 0.17207 shares of LMI common stock for each share of Citrix common stock that they own on the record date for the Distribution, based on the number of shares of Citrix common stock outstanding on December 5, 2016. LMI currently expects to issue approximately 27.3 million shares of LMI common stock to Citrix equityholders in connection with the Merger. This number includes an estimated 0.5 million shares of LMI common stock that may be issued following the Merger upon settlement of LMI restricted stock units to be granted to GetGo employees in substitution for outstanding Citrix restricted stock units in connection with the Merger. However, the actual number of LMI restricted stock units to be issued to GetGo employees in substitution for outstanding Citrix restricted stock units in connection with the Merger (and, accordingly, the number of shares of LMI common stock that may be issued following the Merger upon settlement of the LMI restricted stock units) will be determined shortly following the closing of the Merger based upon the relative stock prices of Citrix prior to the Merger and LMI following the Merger.

The number of shares of LMI common stock to be issued in the Merger is subject to an adjustment mechanism in limited circumstances. See “Transaction Agreements—Merger Agreement—Merger Consideration.”

Immediately after the Merger, the exchange agent will distribute to each Citrix stockholder entitled to shares of GetGo common stock in the Distribution the number of whole shares of LMI common stock to which the stockholder has a right to receive in the form of a book-entry authorization. No fractional shares of LMI common stock will be issued pursuant to the Merger. All fractional shares of LMI common stock that a Citrix stockholder entitled to shares of GetGo common stock in the Distribution would otherwise be entitled to receive as a result of the Merger will be aggregated by the exchange agent selected by Citrix, and the exchange agent will cause the whole shares obtained by such aggregation to be sold in the open market or otherwise at then-prevailing market prices no later than five business days after the Distribution. The exchange agent will make available the net proceeds of the sale, after deducting agent fees estimated at $0.05 per share, on a pro rata basis, without interest, as soon as practicable following the Merger to the Citrix stockholders entitled to shares of GetGo common stock in the Distribution that would otherwise be entitled to receive such fractional shares of LMI common stock pursuant to the Merger. Any cash in lieu of fractional shares paid in connection with the Merger will be reduced by any applicable tax withholding. See “U.S. Federal Income Tax Consequences of the Distribution and Merger—Information Reporting and Backup Withholding” for further information.

Anticipated Costs of the Transactions

Citrix and LMI have incurred certain costs and will incur additional costs in connection with the Transactions. The Merger Agreement provides that the fees and expenses incurred in connection with printing and mailing this proxy statement/prospectus-information statement and GetGo’s registration statement on Form 10 and all SEC filing fees relating to the Transactions will be borne by the party responsible for such disclosure, with LMI bearing the costs associated with this proxy statement/prospectus-information statement and Citrix bearing the cost of GetGo’s registration statement on Form 10.

The Merger Agreement also provides that all filing or notice fees required in connection with any required governmental consents, authorizations or notices will be paid by the applicable party making such notice or filing, except that with respect to any required antitrust regulatory approvals (including under the HSR Act), LMI or Citrix, as applicable, will reimburse the other for its portion of the antitrust filings fees such that LMI and Citrix will bear the cost of such fees evenly.

 

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The Merger Agreement provides that all other fees and expenses incurred by the parties in connection with the Transactions shall be borne solely by the party that has incurred such fees and expenses.

As of the date of this proxy statement/prospectus-information statement, LMI, Citrix and GetGo expect their combined transaction expenses to be approximately $165 to $180 million, approximately $45 to $50 million of which are expected to be incurred by LMI and approximately $120 to $130 million of which are expected to be incurred by Citrix and GetGo on a pre-tax basis. LMI, Citrix and GetGo anticipate that a significant portion of these total transaction expenses will be attributable to advisory fees to be paid to legal, financial and tax advisors, accountants, and auditors.

Trading Markets

Citrix Common Stock

Following the Merger, Citrix stockholders will continue to hold their shares of Citrix common stock, subject to the same rights as prior to the Separation, the Distribution and the Merger, except that their shares of Citrix common stock will represent an interest in Citrix that no longer reflects the ownership and operation of the GoTo Business. Shares of Citrix common stock will continue to be traded publicly on the NASDAQ Global Select Market. Citrix stockholders, to the extent they were holders of record on the record date of the Distribution, will also hold shares of LMI common stock after the Transactions.

GetGo Common Stock

There currently is no trading market for shares of GetGo common stock, and no such trading market is expected to be established in the future prior to the Merger. All outstanding shares of GetGo common stock will automatically be canceled and cease to exist at the effective time of the Merger and upon their conversion into shares of LMI common stock.

LMI Common Stock

LMI common stock began trading on the NASDAQ Global Select Market under the ticker symbol “LOGM” on July 1, 2009. After the Merger, shares of LMI will continue to trade on the NASDAQ Global Select Market.

Background of the Merger

Each of the LMI Board and the Citrix Board, together with senior management, periodically, and in the ordinary course, evaluate and consider a variety of financial and strategic opportunities to enhance stockholder value as part of their respective long-term business plans.

On July 28, 2015, as a result of such a review of these opportunities by the Citrix Board, together with senior management, Citrix publicly announced a review of strategic alternatives for its GoTo family of service offerings with assistance from its financial advisors, Qatalyst Partners LP and Goldman, Sachs & Co. The Citrix Board subsequently formed a Transaction Committee of independent directors to oversee such review, which we refer to as the Citrix Transaction Committee.

On August 20, 2015, Michael Simon, Chairman of the LMI Board and Chief Executive Officer at the time, contacted Thomas Bogan, the then Citrix Lead Independent Director, to express interest in a potential strategic transaction involving Citrix’s GoTo family of service offerings. Mr. Bogan told Mr. Simon that Citrix was in the process of considering strategic alternatives for those offerings and that LMI’s interest would be reported to the Citrix Board in connection with this process. Mr. Bogan also introduced Mr. Simon to representatives of Citrix’s financial advisors. Mr. Simon then introduced members of the LMI management team to such representatives.

On August 25, 2015, members of the LMI management team spoke by telephone with representatives of Citrix’s financial advisors regarding Citrix’s process for review of its strategic alternatives with respect to the GoTo family of service offerings.

 

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During the fall of 2015, the Citrix Board and the Citrix Transaction Committee held meetings to review potential strategic alternatives for the GoTo family of service offerings, which alternatives included retaining the GoTo Business, effecting a spin-off of the GoTo Business into a separate, publicly traded company, pursuing a spin-sale hybrid transaction such as a Reverse Morris Trust transaction, and engaging in a taxable sale transaction involving the GoTo Business. Representatives of Citrix’s senior management and financial advisors were generally present and participated in these meetings. At these meetings, the Citrix Board and the Citrix Transaction Committee reviewed the risks and benefits of separating the GoTo Business from Citrix’s other businesses as described under “—Citrix’s Reasons for the Separation, the Distribution and the Merger”. They also considered that either a spin-off or a Reverse Morris Trust transaction would allow Citrix to divest the assets related to the GoTo Business in a tax-efficient manner since neither Citrix nor its stockholders generally would recognize gain or loss for tax purposes in connection with the transaction. In contrast, an asset sale for cash would generally be taxable to Citrix, making such a transaction financially unattractive to Citrix or requiring potential counterparties to pay additional consideration. As a result of such review, the Citrix Board, upon the recommendation of the Citrix Transaction Committee, determined that Citrix should separate the GoTo Business for strategic and operational reasons and pursue a spin-off of the GoTo Business while also exploring a potential combination of the GoTo Business with a strategic party in a Reverse Morris Trust transaction.

From August 26, 2015 through mid-November 2015, LMI management periodically exchanged emails with representatives of Citrix’s financial advisors inquiring about the status of Citrix’s process in considering strategic alternatives with respect to the GoTo family of service offerings.

On November 17, 2015, Citrix announced a plan to spin off the GoTo Business into a separate, publicly traded company. Thereafter, Citrix engaged in activities to prepare for the separation of the GoTo Business, which was expected to be completed in the second half of 2016.

On November 18, 2015, representatives of Citrix’s financial advisors, at the direction of the Citrix Board, contacted LMI to discuss the possibility of a Reverse Morris Trust transaction involving the GoTo Business.

On November 19, 2015, the LMI Board, at a regularly scheduled meeting, discussed the recent announcement by Citrix and the possibility of a strategic combination between LMI and the GoTo Business. The LMI Board determined that LMI management should pursue further discussions with Citrix and its advisors regarding the potential transaction involving the GoTo Business.

On November 20, 2015, representatives of Citrix’s financial advisors, at the direction of the Citrix Board, and representatives of LMI management held a telephone conference call in which the LMI management representatives relayed LMI’s interest in potentially exploring a transaction involving the GoTo Business, and the participants agreed to facilitate scheduling an in-person meeting between representatives of LMI and Citrix.

On November 23, 2015, LMI and Citrix entered into a confidentiality agreement to facilitate exploratory discussions and the exchange of confidential information to determine whether there was mutual interest in pursuing a possible transaction.

On December 17, 2015, William Wagner, President and Chief Executive Officer of LMI, along with other senior members of LMI management, met with representatives of Citrix, including senior management of the GoTo Business, at the offices of one of Citrix’s financial advisors in New York City, New York, to discuss the GoTo Business, its operations and related financial matters. Mr. Wagner also provided an overview of LMI’s business. Representatives of LMI’s and Citrix’s respective financial advisors also attended this meeting. Thereafter, LMI and Citrix, together with their respective financial advisors, continued to discuss a potential strategic combination involving LMI and the GoTo Business, and LMI and Citrix conducted preliminary due diligence.

On December 29, 2015, Citrix’s financial advisors, at the direction of the Citrix Board, sent LMI a formal process letter inviting LMI to submit a written proposal regarding a strategic combination with the GoTo Business and outlining the content to be included and procedures for submitting such a proposal.

 

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On January 13, 2016, Mr. Wagner met with Christopher Hylen, Senior Vice President and General Manager of the GoTo Business, in Las Vegas, Nevada, where they discussed their respective businesses and the potential cultural and strategic fit.

On January 21, 2016, Rob Lawrence, Senior Vice President of Corporate Strategy of LMI, had a telephone conversation with representatives of one of Citrix’s financial advisors regarding LMI’s continued interest in a potential transaction involving the GoTo Business and agreed that LMI would inform Citrix’s financial advisors once LMI had made a decision as to whether to proceed with submitting a written indication of interest.

On February 2, 2016, the LMI Board held a regularly scheduled meeting during which the potential transaction with the GoTo Business was discussed, and Mr. Wagner and other members of the LMI management team provided an update regarding LMI management’s initial due diligence investigation of the GoTo Business and the potential transaction. Representatives of LMI’s financial and legal advisors also attended this meeting. At this meeting, the LMI Board determined to proceed with submission of a preliminary non-binding proposal to Citrix for a strategic combination involving LMI and the GoTo Business and authorized Mr. Wagner to engage and negotiate with Citrix’s representatives regarding this proposal.

On February 5, 2016, Mr. Wagner contacted Mr. Hylen via telephone to present the terms of LMI’s non-binding proposal to Citrix for a strategic combination involving LMI and the GoTo Business. LMI later submitted a written non-binding proposal containing the terms presented by Mr. Wagner to Citrix. LMI’s non-binding proposal contemplated a strategic combination to be effected through a Reverse Morris Trust transaction that would result in an ownership split of approximately 50.1% for Citrix holders and 49.9% for LMI holders, upon consummation of the transaction. LMI’s non-binding proposal also contemplated: (1) a $100 million cash contribution by Citrix to the GoTo Business; (2) no debt on the GoTo Business’ balance sheet at the time of closing; (3) a normalized level of working capital for the GoTo Business; and (4) one or two seats for Citrix designees on the board of directors of the combined company, expanding the board from nine to ten members. The proposal was accompanied by a request for exclusive negotiations between the parties.

On February 15, 2016, representatives of Citrix’s financial advisors, at the direction of the Citrix Board, contacted Mr. Lawrence to propose: (1) an ownership split of 62% for Citrix holders and 38% for LMI holders; (2) no cash contribution by Citrix; and (3) equal representation on the combined company board.

On February 16, 2016, Mr. Wagner contacted Mr. Hylen and expressed concern about the difference in the equity ownership split proposed by each party.

On February 18, 2016, Mr. Lawrence spoke telephonically with representatives of one of Citrix’s financial advisors regarding LMI’s preliminary proposal and the proposed equity ownership percentages.

On February 24, 2016, representatives of Citrix’s financial advisors, at the direction of the Citrix Board, contacted Mr. Lawrence to propose an ownership split of 55% to 45%.

On February 27, 2016, Mr. Lawrence spoke with representatives of Citrix’s financial advisors and indicated that the LMI Board would not accept this ownership split, but that LMI would consider submitting a revised non-binding proposal in the next week.

On March 1, 2016, LMI submitted a further revised non-binding written proposal to Citrix for a strategic combination involving LMI and the GoTo Business. LMI’s revised non-binding proposal contemplated: (1) an ownership split of 52% to 48%; (2) sufficient working capital to be contributed by Citrix for the GoTo Business, including a cash component equivalent to at least two months of GAAP expenses and capital expenditure requirements for the GoTo Business and funds required to execute a proposed synergy plan in an amount proportionate to the Citrix stockholders’ pro rata ownership of the combined company; and (3) four seats for Citrix designees on the combined company board, which board would remain at nine members.

 

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On March 4, 2016, at the direction of LMI management, representatives of RBC Capital Markets, LMI’s financial advisor, provided Citrix’s financial advisors with certain financial due diligence requests on behalf of LMI with respect to the GoTo Business.

On March 13, 2016, representatives of Citrix’s financial advisors, at the direction of the Citrix Board, and representatives of LMI’s financial advisor, at the direction of the LMI Board, held a telephone conference to discuss potential next steps and determined that an appropriate next step to facilitate discussions would be for Citrix to provide LMI with three-year audited financial statements for the GoTo Business, which could further inform discussions between LMI and Citrix regarding the economic terms for the proposed transaction. LMI’s financial advisor subsequently informed LMI about the telephone conference and the proposed course of action.

On March 17, 2016, Mr. Wagner and Mr. Hylen had a telephone call during which they discussed the parties’ ongoing interest in pursuing the proposed transaction, the timing of such transaction, including delivery of audited financial statements for the GoTo Business, and the terms of LMI’s March 1st proposal. Mr. Wagner informed Mr. Hylen that LMI wished to suspend further formal discussions regarding a potential transaction until Citrix provided LMI with audited financial statements for the GoTo Business.

During the period between March 17, 2016 and May 3, 2016, Mr. Wagner and Mr. Hylen continued to have periodic telephone calls to discuss the status of the audited financial statements for the GoTo Business and related matters.

On May 3, 2016, Citrix provided LMI with three-year audited financial statements for the GoTo Business and related business and financial due diligence materials.

On May 9, 2016, the parties resumed discussions regarding a potential transaction when Mr. Wagner, Mr. Simon, Robert Calderoni, Executive Chairman of the Citrix Board, Mr. Hylen and members of the senior management teams of LMI and Citrix met for dinner in Boston, Massachusetts, at which they discussed LMI and the GoTo Business, the potential cultural and strategic fit between the two businesses, and the economic terms for a possible transaction.

On May 13, 2016, several members of LMI’s senior management held a conference call with members of the senior management team of the GoTo Business during which the parties discussed the GoTo Business financial statements and the Citrix representatives reviewed Citrix’s preliminary financial forecasts for the GoTo Business for 2016-2018. The LMI management team presented an overview of LMI’s business and reviewed LMI’s preliminary financial outlook for 2016-2018. The parties also discussed potential synergies in the proposed transaction. Representatives of the parties’ respective financial advisors also attended this meeting.

On May 17, 2016, representatives of LMI and Citrix, including Mr. Wagner, Mr. Hylen and other senior management of the GoTo Business, held an in-person meeting in Boston, Massachusetts and discussed potential synergies in the proposed transaction and also conducted preliminary business and financial due diligence. Representatives of the parties’ respective financial advisors also attended this meeting.

On May 25, 2016, Mr. Simon contacted Mr. Calderoni to discuss a potential transaction between the parties with a 50.1% to 49.9% ownership split.

On May 26, 2016, the LMI Board convened a regularly scheduled meeting in Boston, Massachusetts, during which the potential transaction with the GoTo Business was discussed, and Mr. Wagner and other senior members of the LMI management team provided an update regarding LMI management’s due diligence findings with respect to the GoTo Business and the potential transaction. At this meeting, the LMI Board also discussed the strategic rationales for the proposed transaction, and LMI’s financial advisor discussed preliminary financial aspects related to the proposed transaction. The LMI Board directed management to continue to pursue further discussions with Citrix representatives regarding the potential transaction but reiterated the position that the LMI Board would not support a transaction that did not include a 50.1% to 49.9% ownership split.

 

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Later on May 26, 2016, Mr. Wagner contacted Mr. Hylen to reiterate LMI’s interest, but also indicated that the LMI Board would not support a transaction that did not include the 50.1% to 49.9% ownership split as previously proposed by LMI.

On May 31, 2016, Mr. Calderoni contacted Mr. Simon to schedule a meeting to discuss the terms of a potential transaction between the parties with a 50.1% to 49.9% ownership split as proposed by LMI, noting that certain other financial and governance terms would need to be negotiated by the parties.

On June 2, 2016, Mr. Simon and Mr. Wagner had dinner with Mr. Calderoni in Boston, Massachusetts, at which they discussed the terms of a potential transaction between the parties. At this meeting, Mr. Calderoni indicated that Citrix would be willing to continue discussions with respect to a transaction with a 50.1% to 49.9% ownership split if Citrix did not have to contribute cash in the transaction and only had to deliver a normalized level of non-cash working capital for the GoTo Business. The parties also discussed potential synergies in the proposed transaction, a governance structure to oversee the execution of the synergy opportunities, and the public announcement of those synergy opportunities. In connection with this discussion, Mr. Calderoni proposed (1) the formation of an operating committee of the combined company board of two Citrix director designees and two existing LMI directors, to oversee the realization of these potential synergies, and (2) the engagement by the combined company of a third-party advisor to further assist with the realization of the anticipated synergies.

On June 5, 2016, the LMI Board held a special meeting for the purpose of discussing the potential strategic combination with the GoTo Business and a revised non-binding proposal that LMI would submit to Citrix. The LMI Board determined to proceed with submission of the further revised non-binding proposal.

On June 6, 2016, Mr. Wagner and Mr. Calderoni had a telephone conversation to further discuss the potential terms of a transaction. During this conversation, Mr. Wagner requested that Citrix contribute $25 million of cash and 60 days of working capital for the GoTo Business as part of the transaction. Mr. Calderoni reiterated Citrix’s unwillingness at such time to contribute cash as part of a transaction with a 50.1% to 49.9% ownership split.

Following the telephone conversation on June 6, 2016, LMI submitted a revised non-binding written proposal to Citrix for a strategic combination involving LMI and the GoTo Business based upon a 50.1% to 49.9% ownership split on a fully diluted basis that contemplated as part of the transaction: (1) a $25 million cash contribution by Citrix; and (2) an additional $55 to $65 million of cash to cover 45 days of GAAP expenses for the GoTo Business. LMI’s June 6, 2016 proposal also included a $25 million cash contribution by LMI to fund the proposed synergy plan. Shortly following receipt of the revised proposal, Mr. Calderoni contacted Mr. Wagner and reiterated Citrix’s unwillingness at such time to contribute the requested cash as part of a transaction with a 50.1% to 49.9% ownership split. During this conversation, Mr. Wagner also informed Mr. Calderoni of LMI’s desire to pay at least one cash dividend to its existing stockholders prior to the closing of the proposed transaction, depending on the timing of the closing.

Later on June 6, 2016, Citrix provided a revised non-binding written proposal to LMI based upon a 50.1% to 49.9% ownership split and that contemplated: (1) no cash contribution by Citrix; (2) a normalized level of working capital for the GoTo Business; (3) a $50 million loan from Citrix to LMI; (4) no cash dividend payable by LMI prior to closing; and (5) the formation of an operating committee of the combined company board with equal representation by Citrix and LMI board designees, the engagement by the combined company of a third-party advisor to assist with the realization of potential synergies, and the public announcement of $100 million of run-rate synergy opportunities identified with respect to the proposed transaction.

On June 7, 2016, Mr. Wagner contacted Mr. Calderoni to propose that each party deliver $60 million of net cash to the combined entity as part of the transaction. Mr. Calderoni reiterated Citrix’s unwillingness at such time to contribute cash as part of a transaction with a 50.1% to 49.9% ownership split. Later on June 7, 2016, representatives of Citrix’s financial advisors, at the direction of the Citrix Board, contacted representatives of LMI’s financial advisor to discuss the cash contribution component and LMI’s desire to pay at least one cash

 

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dividend to its existing stockholders prior to the closing of the proposed transaction. LMI’s financial advisor subsequently informed LMI as to the feedback received from Citrix’s financial advisors in such discussion.

On June 8, 2016, Mr. Wagner and Mr. Calderoni had further discussions regarding the cash contribution component and LMI’s desire to pay at least one cash dividend to its existing stockholders prior to the closing of the proposed transaction, depending on the timing of the closing. Mr. Calderoni reiterated Citrix’s unwillingness at such time to contribute cash as part of a transaction with a 50.1% to 49.9% ownership split. During this conversation, Mr. Wagner indicated that LMI would be sending Citrix a revised proposal.

On June 9, 2016, LMI sent Citrix a further revised non-binding written proposal based upon a 50.1% to 49.9% ownership split and that contemplated an $85 million cash contribution by Citrix, noting that LMI would contribute approximately the same amount of net cash to the combined entity after taking into account payment of the proposed cash dividend to its existing stockholders prior to closing. Following receipt of this proposal, Mr. Calderoni contacted Mr. Wagner to indicate that Citrix was not willing to continue discussions regarding a potential transaction given the inability of the parties to reach agreement on the cash component to be provided by each party.

On June 10, 2016, LMI notified the members of the LMI Board that the parties had been unable to reach agreement on certain terms of the proposed transaction and that Citrix had discontinued discussions.

On June 11 and 12, 2016, Mr. Wagner had various telephone discussions with members of the LMI Board, including Mr. Simon, during which it was determined that Mr. Simon would contact Mr. Calderoni.

On June 13, 2016, Mr. Simon contacted Mr. Calderoni to indicate that LMI would like to continue discussions regarding a potential transaction and expected to submit a further revised proposal.

On June 14, 2016, LMI submitted a revised non-binding written proposal to Citrix for a strategic combination involving LMI and the GoTo Business. LMI’s revised non-binding proposal contemplated: (1) an ownership split of 50.1% for Citrix equityholders and 49.9% for existing LMI equityholders; (2) sufficient working capital for the GoTo Business to operate on a stand-alone basis, including a cash component equal to $25 million; (3) a $25 million loan from Citrix to LMI; (4) payment by LMI of up to three dividends of $0.50 per share to its stockholders prior to closing; (5) four seats for Citrix designees on the combined company board, which board would remain at nine members; and (6) the formation of an operating committee of the combined company board with equal representation by Citrix and LMI board designees, the engagement by the combined company of a third-party advisor to assist with the realization of the anticipated synergies as requested by Citrix, and the public announcement of $100 million of run-rate synergy opportunities identified with respect to the proposed transaction.

On June 15, 2016, Citrix provided a revised non-binding written proposal to LMI in order to clarify certain terms, including the timing for payment of the cash dividend to LMI stockholders. The revised proposal also contemplated the delivery by Citrix of a normalized level of non-cash working capital for the GoTo Business instead of sufficient working capital for the GoTo Business to operate on a stand-alone basis as included in LMI’s June 14th proposal.

On June 15 and June 16, 2016, Mr. Wagner and Mr. Calderoni had various telephonic discussions regarding Citrix’s revised non-binding written proposal.

On June 16, 2016, LMI submitted a further revised non-binding written proposal to Citrix, having accepted the material terms proposed by Citrix, as the basis for proceeding with confirmatory business and legal due diligence and transaction documentation. Citrix and LMI also executed an exclusivity agreement providing for a mutual exclusive negotiation period of 45 days.

On June 17, 2016, LMI and Citrix exchanged due diligence request lists, and thereafter, the parties populated on-line data rooms in preparation for performing reciprocal confirmatory business and legal due diligence.

 

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On June 18, 2016, a conference call was held between members of LMI and Citrix management and the companies’ respective outside counsel regarding proposed next steps with respect to legal documentation and actions and deliverables for a definitive merger agreement and separation agreement. During this conference call, the parties agreed that Citrix and its counsel would provide initial drafts of these agreements in the coming days and that the parties would schedule in-person meetings to negotiate the terms of the transaction documentation during the first week of July.

On June 21, 2016, Mr. Wagner and Mr. Hylen met in Santa Monica, California, and discussed the structure and organization of the GoTo Business. Separately, a conference call was held between members of LMI and Citrix management and the companies’ respective outside counsel regarding the proposed transaction timing and process for preparation of SEC filings and financial statements in connection with the Merger. On June 21, 2016, the parties also opened access to their respective on-line data rooms.

On June 22, 2016, the LMI Board appointed a Transaction Committee for the purpose of assisting and consulting with LMI’s management team in connection with the proposed transaction, referred to as the LMI Transaction Committee.

On June 23, 2016, Goodwin Procter LLP, counsel to Citrix, distributed an initial draft of the Merger Agreement to Latham & Watkins LLP, referred to as Latham, counsel to LMI.

On June 24, 2016, Skadden, Arps, Slate, Meagher & Flom LLP, counsel to Citrix, distributed an initial draft of the Separation Agreement to Latham. Over the next two weeks, LMI and Citrix and their respective legal advisors exchanged drafts of the Merger Agreement, Separation Agreement and other Transaction Documents and spoke by telephone regarding the terms of these agreements.

In June and July 2016, the LMI Transaction Committee met periodically to evaluate the terms reflected in the non-binding proposal and to discuss the merits of the proposed transaction with and provide guidance to members of LMI management. In each instance, the LMI Transaction Committee continued to support the proposed transaction and recommended that the LMI management team and the full LMI Board continue pursuing the proposed transaction.

On June 28 and 29, 2016, members of managements of both LMI and Citrix met in Redwood City, California, to discuss potential synergies in the proposed transaction and conduct reciprocal due diligence. Representatives of the companies’ respective financial and other advisors assisting with the synergy plan also attended this meeting. Those efforts and discussions continued over the next few weeks.

On July 1, 2016, the LMI Board held a special telephonic meeting during which the proposed transaction was discussed. The LMI management team reviewed the business and strategic rationales for the proposed transaction, as well as the preliminary results of due diligence. LMI’s financial advisor discussed preliminary financial aspects related to the proposed transaction, and Latham reviewed the fiduciary responsibilities of the LMI Board and certain other legal matters regarding the proposed transaction. The LMI Board directed LMI management and LMI’s advisors to continue pursuing the proposed transaction.

On July 7, 2016, representatives from LMI and Citrix and the companies’ respective legal and financial advisors held a negotiation session at the offices of Latham in Boston, Massachusetts. Thereafter, LMI and Citrix, together with their respective legal advisors, continued to exchange drafts and negotiate the terms of the Merger Agreement, the Separation Agreement and the other Transaction Documents.

On July 8, 2016, the members of the LMI Transaction Committee met with LMI management to discuss the proposed transaction. The members of the LMI Transaction Committee agreed that the transaction as currently contemplated would be in the best interests of LMI and its stockholders, and determined to recommend to the full LMI Board that LMI continue to pursue negotiations toward a definitive agreement involving a 50.1% to 49.9% ownership split.

 

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On July 9, 2016, members of the management of both LMI and the GoTo Business met to discuss synergy estimates and opportunities.

On July 14, 2016, the LMI Board held a special telephonic meeting to discuss the proposed transaction. Mr. Wagner and the LMI management team provided their views with respect to the business and strategic rationales for the proposed transaction, as well as an update regarding the results of due diligence. LMI’s financial advisor discussed preliminary financial aspects related to the proposed transaction, and Latham reviewed the fiduciary responsibilities of the LMI Board and certain other legal matters regarding the proposed transaction. The LMI Board directed LMI management and LMI’s advisors to continue pursuing the proposed transaction. Following the LMI Board meeting, the LMI Transaction Committee met to further discuss the terms of the proposed transaction.

On July 18, 2016, Mr. Wagner and Mr. Hylen had a telephone conversation to discuss the status of the proposed transaction and certain due diligence items.

On July 22, 2016, representatives of LMI, including Mr. Wagner, and Citrix, including Mr. Calderoni, and LMI’s and Citrix’s respective legal advisors held a telephone conference to negotiate the open issues in the Merger Agreement, including (i) LMI’s ability to pay additional pre-closing dividends to its stockholders if the closing of the Merger were to occur later than the parties previously expected, (ii) Citrix’s obligations to fund certain severance and retention payments for employees of the GoTo Business, (iii) the LMI Board’s ability to change its recommendation to stockholders and the related requirement that, unless Citrix elected to terminate the Merger Agreement, LMI must submit the Share Issuance to LMI stockholders for approval regardless of a change in such recommendation, (iv) the termination events triggering payment of the termination fee or expense reimbursement by LMI, and (v) the parties’ obligations to seek antitrust regulatory approval. The parties also discussed certain business issues with respect to the other Transaction Documents. During this conference call and in a series of discussions over the next few days, LMI and Citrix finalized the forms of the definitive agreements for the proposed transaction.

On July 24, 2016, the LMI Board held a special in-person meeting in Boston, Massachusetts, with LMI’s management and advisors in attendance, to receive an update regarding the terms of the proposed transaction and the anticipated process and timing to finalize and announce the Merger and to consider whether to proceed with the proposed terms reflected in the Transaction Documents. In advance of the meeting, the directors were provided with, among other things, near-final drafts of the Merger Agreement, Separation Agreement, and the other Transaction Documents. Mr. Wagner and senior members of the LMI management team again presented their views on the strategic rationales for the proposed transaction, including the potential benefits of the proposed transaction versus the LMI standalone plan, and reported to the LMI Board that management was fully supportive of the proposed transaction as currently contemplated. The LMI Board, with input from LMI management, reviewed other potential strategic alternatives or scenarios and discussed the relative merits of each, concluding that none of these potential strategic alternatives or scenarios would be foreclosed by the proposed transaction and that future strategic alternatives could be enhanced as a result of the transaction with the GoTo Business. The LMI Board also discussed potential synergies contemplated to be realized in the transaction, including LMI management’s estimate that $100 million of run-rate cost synergies would be achievable by year two following the proposed transaction.

At this meeting, representatives of Latham also reviewed the LMI Board’s fiduciary duties in connection with the proposed transaction, as well as regulatory matters, including antitrust considerations, legal due diligence findings and a summary of the material terms and conditions reflected in the Transaction Documents, including with respect to: (i) LMI’s right to pay up to an aggregate of $3.00 per share in special dividends consisting of up to three $0.50 per share special dividends prior to the closing, and, in the event the closing of the Merger did not occur prior to certain specified dates in 2017, up to three additional $0.50 per share special dividends; (ii) the LMI Board’s ability to change its recommendation to stockholders and the related requirement that, unless Citrix elected to terminate the Merger Agreement, LMI must submit the Share Issuance to LMI stockholders for approval regardless of a change in such recommendation to stockholders in the event of

 

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a superior proposal by a third party to acquire LMI; (iii) the antitrust regulatory obligations under the draft Merger Agreement; (iv) the scope of the intellectual property license agreements to be entered into with Citrix in connection with the proposed transaction; (v) the standards under the draft Separation Agreement for determining whether assets and liabilities will be transferred with the GoTo Business; (vi) the proposed transition services to be provided by Citrix; and (vii) the terms of the various ancillary Transaction Documents, including the Employee Matters Agreement and the Tax Matters Agreement. The LMI Board discussed these material terms and provided guidance to management and LMI’s legal advisors with respect to the remaining open points.

In addition, at the July 24, 2016 meeting of the LMI Board, LMI’s financial advisor discussed with the LMI Board preliminary financial aspects related to the proposed transaction.

From the evening of July 24, 2016 through the morning of July 26, 2016, representatives of LMI and Citrix, together with their respective legal advisors, continued to negotiate and finalize the terms of the proposed Transaction Documents, ultimately resolving the remaining open points on the morning of July 26, 2016.

On July 26, 2016, the LMI Board held a special telephonic meeting. Members of management and representatives of each of RBC Capital Markets and Latham also attended the meeting. Prior to the meeting, the directors received various materials relating to their review of the proposed transaction, including final copies of the Transaction Documents, draft resolutions approving the transaction and presentation materials from each of RBC Capital Markets and Latham. LMI management reported that the parties had reached agreement with respect to each of the remaining open deal points. Mr. Wagner and senior members of LMI management again reviewed with the LMI Board the strategic rationales for the proposed transaction and the expected synergies and material business terms. Representatives of Latham reviewed the LMI Board’s fiduciary duties in connection with the proposed transaction, as well as the changes that had been made to the proposed Transaction Documents since the drafts that had been distributed to the LMI Board in advance of the July 24, 2016 meeting. In addition, RBC Capital Markets reviewed its financial analysis of the aggregate merger consideration with the LMI Board and rendered an oral opinion, confirmed by delivery of a written opinion dated July 26, 2016, to the LMI Board to the effect that, as of that date and based on and subject to the procedures followed, assumptions made, factors considered and qualifications and limitations described in the opinion, the aggregate merger consideration to be paid by LMI pursuant to the Merger Agreement was fair, from a financial point of view, to LMI. A discussion ensued regarding the proposed transaction. In the course of its deliberations, the LMI Board considered a number of factors, including those described more fully below under “—LMI’s Reasons for the Merger.” Following these discussions, representatives of LMI management and Latham reviewed resolutions that previously had been distributed to the LMI Board approving the Merger Agreement, the Separation Agreement, the Share Issuance, the declaration of the first cash dividend of $0.50 per share of LMI common stock payable to LMI’s stockholders of record as of August 8, 2016, and related matters. The LMI Board unanimously determined that the terms of the Merger Agreement, the Merger, the Transactions and the Share Issuance, were advisable, fair to, and in the best interest of LMI and its stockholders, and unanimously approved the Merger Agreement, the Merger, the Transactions and the Share Issuance and authorized the appropriate officers of LMI to execute and deliver the Transaction Documents.

In addition, on July 26, 2016, after numerous meetings of the Citrix Board and the Citrix Transaction Committee throughout the process at which senior management provided periodic updates and the proposed transaction with LMI was discussed, the Citrix Board met to review the terms and conditions of the proposed transaction with LMI. At such meeting, the Citrix Board unanimously determined that the Separation, the Distribution and the Merger were advisable and in the best interests of Citrix and its stockholders, and approved the Merger Agreement, the Separation Agreement and the other Transaction Documents.

Subsequently on July 26, 2016, LMI, Citrix, GetGo and Merger Sub entered into the Merger Agreement, LMI, Citrix and GetGo entered into the Separation Agreement and the Tax Matters Agreement (which was subsequently amended and restated on September 13, 2016), and LMI and Citrix issued a joint press release and held a joint conference call announcing the transaction following the closing of the U.S. stock markets.

 

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LMI’s Reasons for the Merger

The LMI Board of Directors and LMI senior management routinely review LMI’s business and consider whether possible strategic transactions, including potential acquisitions of, or strategic investments in, complementary businesses, services, technologies and intellectual property rights, might be advisable in order to maximize value for LMI and its stockholders. In evaluating the Merger, the LMI Board consulted with LMI’s management and legal and financial advisors and, in reaching its decision to unanimously approve the Merger Agreement and the transactions contemplated thereby, the Merger, the Share Issuance and the other Transaction Documents to which LMI is a party, and to recommend that the LMI stockholders approve the Share Issuance, the LMI Board of Directors carefully considered a number of factors, including, but not limited to, the following significant factors which generally supported its decision to approve the Transactions and recommend that the LMI stockholders approve the Share Issuance:

 

    the belief that the Merger will bring together two companies that are committed to developing and delivering easy-to-use software designed to address the challenges customers face in the wake of compelling secular trends, including workforce mobility, the rapid adoption of cloud-based applications and the proliferation of connected products;

 

    the opportunity to create an industry leading software-as-a-service company with a diverse product portfolio that will help fill in gaps in the respective product lines of each business, resulting in a more complete suite of product offerings which will benefit both existing and new customers and also enhance the competitiveness of the combined company to meet robust existing and future competition from a variety of different solutions providers of all sizes;

 

    the overall strategic and financial benefits that could be achieved by combining LMI and the GoTo Business relative to the future prospects of LMI on a standalone basis, including, but not limited to: (i) the expectation that the combined company could achieve estimated run-rate cost synergies of $65 million within the first year after the consummation of the Transactions, and $100 million of estimated run-rate cost synergies within two years, as more fully described under “—Estimated Run-Rate Cost Synergies from the Transactions;” (ii) the expectation that the combined company will generate significant free cash flows as a result of anticipated synergy capture; and (iii) the belief that the scale and financial stability of the combined company would enable LMI to further expand the range of acquisition opportunities it will be able to pursue in the future;

 

    the expectation that the combined company will have annual revenues in excess of $1 billion, stronger global brand recognition and more than two million customers and millions of free users worldwide with products used in virtually every country around the globe;

 

    the expectation that the combined research and development resources coupled with the additional scale and stability of the combined company will present an opportunity to accelerate growth and further expand into key emerging verticals, including cloud-based telephony and identity, as well as the Internet of Things;

 

    the relative valuations implied by the exchange ratio contemplated in the Merger Agreement and Separation Agreement and the favorable then current stock price of LMI’s common stock issuable in the Merger;

 

    the expectation that LMI will benefit from an improved public company profile, including increased liquidity in its stock, as a result of the issuance of shares of LMI common stock in the transaction, benefitting all stockholders;

 

    the financial presentation and opinion, dated July 26, 2016, of RBC Capital Markets to the LMI Board as to the fairness, from a financial point of view and as of such date, to LMI of the aggregate merger consideration to be paid by LMI pursuant to the Merger Agreement, which opinion was based on and subject to the procedures followed, assumptions made, factors considered and qualifications and limitations on the review undertaken, as more fully described below under the caption “The Transactions—Opinion of LMI’s Financial Advisor;”

 

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    that the experienced and proven executive officers of LMI prior to the closing of the Transactions are expected to be executive officers of LMI immediately following the closing of the Transactions, allowing the combined company to benefit from the demonstrated ability of such officers to perform throughout business cycles and their strong record of successful integrations of various acquisitions;

 

    that the LMI Board following the closing of the Transactions will be composed of five of the current directors of LMI and four directors designated by Citrix;

 

    that certain executive officers and other employees of GetGo who will remain with the combined company following the closing of the Transactions will bring talents that complement the capabilities of LMI’s executive officers, as well as proven experience driving growth, innovation and stockholder value; and

 

    the ability of LMI to change its recommendation in response to a superior proposal, subject to the right of Citrix to terminate the Merger Agreement and receive the termination fee.

The LMI Board also considered certain countervailing factors in its deliberations concerning the Merger and the other Transactions, including:

 

    the possibility that the estimated run-rate cost synergies expected to result from the Transactions could fail to materialize, and that any failure could adversely impact the value to LMI stockholders;

 

    the possibility that revenue dis-synergies could result from the Transactions, which could adversely affect the combined company’s results of operations;

 

    the initial dilution of the ownership interests of LMI’s current stockholders that would result from the Share Issuance;

 

    the challenges and difficulties, foreseen and unforeseen, relating to the separation of the GoTo Business from the other businesses of Citrix;

 

    the challenges inherent in the combination and integration of two businesses of the size and complexity of LMI and the GoTo Business;

 

    the fact that the completion of the Merger is conditioned, among other things, on the Separation and the Distribution;

 

    the risk that the GoTo Business does not generate sufficient sales;

 

    the risk that the Transactions and subsequent integration may divert management’s attention and resources away from other strategic opportunities and operational matters;

 

    the significant one-time costs, including transaction-related expenses, expected to be incurred in connection with the Transactions;

 

    the fact that integration of the GoTo Business is dependent on ongoing transition services from Citrix under the Transition Services Agreement;

 

    the restrictions imposed on LMI’s ability to take certain corporate actions under applicable federal income tax laws and the terms of the Tax Matters Agreement;

 

    the restrictions on the conduct of LMI’s business during the period between the execution of the Merger Agreement and the consummation of the Merger;

 

    the risk that LMI’s stockholders may not approve the Share Issuance, which is a condition to the consummation of the Transactions;

 

    the restrictions on LMI’s ability to solicit alternative transaction proposals and the required payment by LMI in certain circumstances of a termination fee or the reimbursement of Citrix’s expenses under the Merger Agreement;

 

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    the risks inherent in requesting regulatory approvals from multiple government agencies in multiple jurisdictions, as more fully described under the caption “—Regulatory Approvals”;

 

    the possibility that the Transactions may not be consummated and the potential adverse consequences if the Transactions are not completed, including substantial costs incurred and potential stockholder and market reaction; and

 

    the ability of Citrix to require that LMI submit the Share Issuance to the LMI stockholders for approval, regardless of whether the LMI Board has changed its recommendation in respect of the Transactions.

The LMI Board considered all of the factors in support of and weighing against the Transactions as a whole, including the factors described above, and, on balance, concluded that those factors supported a determination to approve the Merger Agreement, the Separation Agreement and the other Transaction Documents and to proceed with the Transactions.

This discussion of the information and factors considered by the LMI Board is not exhaustive. In view of the wide variety and complexity of factors considered by the LMI Board in connection with the evaluation of the Transactions, the LMI Board did not consider it practical to, and did not attempt to, quantify, rank or assign relative weights to the factors that it considered in making its decision to approve Merger Agreement and the transactions contemplated thereby, the Merger and the Share Issuance and making its recommendation to the LMI stockholders that they approve the Share Issuance. In considering the factors described above and any other factors, individual members of the LMI Board may have viewed factors differently or given different weight, merit or consideration to different factors.

This explanation of the factors considered by the LMI Board is in part forward-looking in nature and, therefore, should be read in light of the factors discussed in the sections of this proxy statement/prospectus-information statement entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.”

After consideration, on July 26, 2016, the LMI Board of Directors unanimously (a) resolved that the Merger and the Merger Agreement are advisable and approved the Merger Agreement and the transactions contemplated thereby, including the Merger and the Share Issuance, and (b) recommended the approval by LMI’s stockholders of the Share Issuance.

Citrix’s Reasons for the Separation, the Distribution and the Merger

From time to time the Citrix Board, together with Citrix’s senior management, has reviewed Citrix’s product portfolio and considered a variety of financial and strategic opportunities to enhance stockholder value. As a result of this process, in July 2015, Citrix publicly announced a review of potential strategic alternatives for its GoTo family of service offerings, with assistance from its financial advisors, which alternatives included retaining the GoTo Business, effecting a spin-off of the GoTo Business into a separate, publicly traded company, pursuing a spin-sale hybrid transaction, and engaging in a taxable sale transaction involving the GoTo Business. In reaching a decision to approve the Merger Agreement, the Separation Agreement and the other Transaction Documents and to proceed with the Transactions, the Citrix Board, in consultation with Citrix senior management and its financial and legal advisors, held numerous meetings, received materials for its review and consideration, and considered a variety of factors, including the significant factors listed below in support of the decision:

 

    the strategic and operational benefits of separating the GoTo Business from Citrix’s other businesses, including that:

 

    the separation of the GoTo Business from Citrix would provide each business with the ability to adapt more quickly to rapid changes and customer dynamics in their respective markets;

 

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    the separation of the GoTo Business from Citrix would provide each business with greater flexibility to invest capital in a manner appropriate for its distinct strategy and business needs and facilitate a more efficient allocation of capital; and

 

    the separation of the GoTo Business from Citrix would allow management of each business more flexibility to pursue its distinct operating priorities and strategies and opportunities for long-term growth, with Citrix being able to further enhance its strategic focus and operational efficiency and to accelerate execution of its strategy to provide integrated technology services for secure delivery of apps and data;

 

    the complementary nature of the service offerings of the GoTo Business with those of LMI, the greater scale that would be created through the combination of the GoTo Business with LMI, and the opportunity for the combined company to have a superior future growth rate, earnings and prospects compared to the future growth rate, earnings and prospects of the GoTo Business on a stand-alone basis;

 

    the potential synergies associated with a combination of LMI and the GoTo Business, which synergies are believed to be significant ($65 million of estimated cost synergies on a run-rate basis anticipated to be realized within the first year after the consummation of the Transactions, and $100 million of estimated cost synergies on a run-rate basis within two years, as more fully described under the caption “—Estimated Run-Rate Cost Synergies from the Transactions”);

 

    the fact that Citrix equityholders would own approximately 50.1% of the combined company on a fully diluted basis immediately following the Merger and would have the opportunity to participate in any increase in the value of the shares of LMI common stock, including potential increases in stockholder value associated with executing on the identified synergy opportunities;

 

    the fact that four individuals designated by Citrix would be directors of the combined company for an agreed-upon period of time following the Merger;

 

    the formation of an operating committee of the combined company board, including equal representation on such committee by Citrix board designees for an agreed-upon period of time following the Merger, to oversee the realization of the potential synergy opportunities, and the engagement by the combined company of a third-party advisor to further assist with the realization of the anticipated synergies;

 

    the expectation that the Separation, the Distribution and the Merger generally would result in a tax-efficient disposition of the GoTo Business for Citrix and its stockholders, while a sale of the GoTo Business for cash would result in a taxable disposition of the GoTo Business, making such a transaction financially unattractive to Citrix or requiring potential counterparties to pay additional consideration;

 

    the scope of the due diligence review conducted by Citrix’s management of LMI’s business and the reported findings from such due diligence; and

 

    the review by the Citrix Board of materials regarding the proposed transaction with LMI provided by Citrix’s financial and legal advisors, and of the terms, conditions and structure of the Merger Agreement, the Separation Agreement and the other Transaction Documents and the Transactions, including the parties’ representations, warranties and covenants, the conditions to their respective obligations and the termination provisions of the Transaction Documents, as well as the likelihood of the consummation of the Transactions.

 

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In the course of its deliberations, the Citrix Board also considered a variety of risks and other potentially negative factors, including the following:

 

    risks relating to the separation of the GoTo Business from Citrix and the operation of the GoTo Business separate from the other Citrix businesses, including the loss of synergies and joint purchasing power, the costs of separation, and the risk of not realizing the anticipated benefits of the separation;

 

    while the Transactions are expected to be completed, there is no assurance that all conditions to the parties’ obligations to complete the Transactions will be satisfied or waived, including the receipt of LMI stockholder approval and required regulatory approvals and, as a result, it is possible that the Transactions might not be completed;

 

    because the consideration to be received by Citrix stockholders pursuant to the Merger consists of a fixed number of shares of LMI common stock, the value of the LMI common stock received pursuant to the Merger could fluctuate significantly prior to and following the Merger based on a number of factors, many of which are outside of the control of Citrix or are unrelated to the performance of the GoTo Business and some of which are outside of the control of both Citrix and LMI, including general market conditions;

 

    the risk that the integration of LMI and the GoTo Business may be complex and time-consuming and may require substantial resources and effort, and that the synergies and cost savings anticipated by the parties may not be realized or may take longer to realize than anticipated;

 

    the risk that an extended period of time could pass between the signing of the Merger Agreement and completion of the Transactions, and the uncertainty created for Citrix, the GoTo Business and their respective customers, employees and stockholders during that period;

 

    Citrix, prior to the completion of the Transactions, is required to conduct the GoTo Business in the ordinary course, subject to specific limitations and exceptions, which could delay or prevent Citrix from pursuing business opportunities that might arise prior to the completion of the Transactions;

 

    the risk that the Distribution might not qualify as a tax-free transaction under Section 368(a)(1)(D) or Section 355 of the Code or that the Merger might not qualify as a tax-free “reorganization” under Section 368(a) of the Code, in which case Citrix and/or Citrix stockholders could be required to pay substantial U.S. federal income taxes;

 

    the effect of divesting the GoTo Business pursuant to the Transactions on Citrix’s future growth rate, earnings per share and cash flows from operating activities; and

 

    risks of the type and nature described under the section of this document titled “Risk Factors.”

The Citrix Board considered all of the factors in support of and weighing against the Transactions as a whole, including the factors described above, and, on balance, concluded that those factors supported a determination to approve the Merger Agreement, the Separation Agreement and the other Transaction Documents and to proceed with the Transactions.

This discussion of the information and factors considered by the Citrix Board is not exhaustive. In view of the wide variety and complexity of factors considered by the Citrix Board in connection with the evaluation of the strategic alternatives available to Citrix for the GoTo Business and the evaluation of the Transactions, the Citrix Board did not consider it practical to, and did not attempt to, quantify, rank or assign relative weights to the factors that it considered in making its decision to approve the Merger Agreement, the Separation Agreement and the other Transaction Documents and to proceed with the Transactions. In considering the factors described above and any other factors, individual members of the Citrix Board may have viewed factors differently or given different weight, merit or consideration to different factors.

This discussion of Citrix’s reasons for the Transactions is forward-looking in nature and involves risks and uncertainties that could result in the expectations contained in such forward-looking statements not to occur,

 

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including those risks and uncertainties discussed in the sections of this document titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors,” which sections should be read in conjunction with this discussion of Citrix’s reasons for the Transactions.

Estimated Run-Rate Cost Synergies from the Transactions

LMI management prepared, and discussed with Citrix management, non-public, internal estimates of cost synergies that it expects would result from LMI’s combination with the GoTo Business. These synergies were derived, in part, from information provided by Citrix to LMI in connection with LMI’s due diligence review of the GoTo Business and adjustments made to such information that LMI’s management deemed appropriate. These estimated cost synergies were provided to the LMI Board and LMI’s financial advisor.

As shown in the table below, LMI management estimated that the combination of the GoTo Business with LMI would result in estimated total run-rate cost synergies of $65 million during year one following the closing of the Merger, and at least $100 million of estimated total run-rate cost synergies during the second year following the Merger.

 

     Estimated Annual Cost Synergies (in millions)  
     Year 1            Year 2        

Estimated run-rate cost synergies

   $ 65       $ 100   

Estimated one-time costs of achieving synergies

   $ 43       $ 13   
  

 

 

    

 

 

 

Estimated annual synergies net of one-time costs

   $ 22       $ 87   
  

 

 

    

 

 

 

In order to achieve these estimated net cost synergies, LMI management expects to incur total one-time costs between approximately $47 million and $64 million over years one and two following the Merger, more than three quarters of which is expected to be incurred in the first year following the Merger. The table above assumes total one-time costs of approximately $56 million, the midpoint of the range. These one-time costs are expected to include severance expense, system integration and hardware purchases, facility consolidation costs and marketing and branding costs. The estimates of these one-time costs do not include costs associated with the Transition Services Agreement or expenses incurred in connection with the Transactions.

In order to achieve these estimated net cost synergies, LMI expects to implement synergy work plans in each functional area, engage a third party consultant to assist with synergy capture and integration, and develop a tracking system to monitor progress relative to the work plans. LMI has agreed under the Merger Agreement to create an operating committee of the LMI Board to oversee the potential realization of the estimated run-rate cost synergies. The operating committee would consist of two existing LMI directors and two Citrix-designated directors.

Important factors that may affect LMI’s actual ability to achieve these estimated net cost synergies are further described under “Cautionary Statement Regarding Forward-Looking Statements.” Information regarding the uncertainties associated with realizing these estimated net cost synergies is also described under the heading “Risk Factors—Risks Related to the Transactions—LMI may not realize the anticipated cost synergies and growth opportunities from the Transactions.”

Opinion of LMI’s Financial Advisor

LMI has retained RBC Capital Markets as LMI’s financial advisor in connection with the Merger. As part of this engagement, the LMI Board requested that RBC Capital Markets evaluate the fairness, from a financial point of view, to LMI of the aggregate merger consideration to be paid by LMI pursuant to the Merger Agreement. At a July 26, 2016 meeting of the LMI Board held to evaluate the Merger, RBC Capital Markets rendered an oral opinion, confirmed by delivery of a written opinion dated July 26, 2016, to the LMI Board to the effect that, as of that date and based on and subject to the procedures followed, assumptions made, factors considered and qualifications and limitations described in the opinion, the aggregate merger consideration to be paid by LMI

 

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pursuant to the Merger Agreement was fair, from a financial point of view, to LMI. For purposes of RBC Capital Markets’ analyses and opinion, the term aggregate merger consideration refers to the 26,868,269 shares of LMI common stock issuable in the Merger in exchange for all outstanding shares of GetGo common stock. The full text of RBC Capital Markets’ written opinion, dated July 26, 2016, is attached as Annex A to this proxy statement/prospectus-information statement and is incorporated in this document by reference. The written opinion sets forth, among other things, the procedures followed, assumptions made, factors considered and qualifications and limitations on the review undertaken by RBC Capital Markets in connection with its opinion. The following summary of RBC Capital Markets’ opinion is qualified in its entirety by reference to the full text of the opinion. RBC Capital Markets delivered its opinion to the LMI Board for the benefit, information and assistance of the LMI Board (in its capacity as such) in connection with its evaluation of the proposed Merger. RBC Capital Markets’ opinion addressed only the fairness, from a financial point of view and as of the date of such opinion, to LMI of the aggregate merger consideration to be paid by LMI pursuant to the Merger Agreement (to the extent expressly specified in such opinion) and did not in any way address any related transactions or any other terms, conditions, implications or other aspects of the Merger. RBC Capital Markets’ opinion also did not address the underlying business decision of LMI to engage in the Merger or any related transactions or the relative merits of the Merger or any related transactions compared to any alternative business strategy or transaction that may be available to LMI or in which LMI might engage. RBC Capital Markets does not express any opinion and does not make any recommendation to any stockholder as to how such stockholder should vote or act with respect to any proposal to be voted upon in connection with the Merger, any related transactions or otherwise.

In connection with its opinion, RBC Capital Markets, among other things:

 

    reviewed the financial terms of execution versions, provided to RBC Capital Markets on July 26, 2016, of the Merger Agreement and the Separation Agreement;

 

    reviewed certain publicly available financial and other information, and certain historical operating data, with respect to LMI made available to RBC Capital Markets from published sources and internal records of LMI;

 

    reviewed certain financial and other information, and certain historical operating data, with respect to the GoTo Business made available to RBC Capital Markets from published sources and internal records of Citrix;

 

    reviewed financial projections and other estimates and data relating to LMI and the GoTo Business prepared by the respective managements of LMI and Citrix that RBC Capital Markets was directed to utilize in its analyses (in the case of financial projections and other estimates and data relating to the GoTo Business, as adjusted by the management of LMI);

 

    conducted discussions with members of the senior managements of LMI and Citrix with respect to the respective businesses, prospects and financial outlook of LMI and the GoTo Business and also held discussions with members of the senior managements of LMI and Citrix regarding the strategic rationale and potential cost savings anticipated by such managements to be realized from the Merger and related transactions;

 

    reviewed the reported prices and trading activity for LMI common stock;

 

    compared certain financial metrics of LMI and the GoTo Business with those of selected publicly traded companies in lines of businesses that RBC Capital Markets considered generally relevant in evaluating LMI and the GoTo Business; and

 

    considered other information and performed other studies and analyses as RBC Capital Markets deemed appropriate.

In arriving at its opinion, RBC Capital Markets employed several analytical methodologies and no one method of analysis should be regarded as critical to the overall conclusion reached by RBC Capital Markets. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques. The overall conclusion reached by RBC Capital

 

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Markets was based on all analyses and factors considered, taken as a whole, and also on application of RBC Capital Markets’ own experience and judgment. Such conclusion may have involved significant elements of subjective judgment and qualitative analysis. RBC Capital Markets therefore gave no opinion as to the value or merit standing alone of any one or more portions of such analyses or factors.

In rendering its opinion, RBC Capital Markets assumed and relied upon the accuracy and completeness of all information that was reviewed by RBC Capital Markets, including all of the financial, legal, tax, accounting, operating and other information provided to or discussed with RBC Capital Markets by or on behalf of LMI or Citrix (including, without limitation, financial statements and related notes), and upon the assurances of the respective managements and other representatives of LMI and Citrix that they were not aware of any relevant information that was omitted or that remained undisclosed to RBC Capital Markets. RBC Capital Markets did not assume responsibility for independently verifying and it did not independently verify such information. RBC Capital Markets also assumed that the financial projections and other estimates and data (as adjusted by the management of LMI in the case of the GoTo Business) that RBC Capital Markets was directed to utilize in its analyses were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments as to the future financial performance of, and were a reasonable basis upon which to evaluate, LMI, the GoTo Business and the other matters covered thereby and RBC Capital Markets further assumed that the financial results reflected therein would be realized in the amounts and at the times projected. RBC Capital Markets expressed no opinion as to any such financial projections and other estimates or data (including any adjustments) or the assumptions upon which they were based. RBC Capital Markets relied upon the assessments of the managements of LMI and Citrix as to, among other things, (i) the related transactions, including with respect to the timing thereof and assets, liabilities and financial and other terms involved, (ii) the potential impact on LMI and the GoTo Business of market, competitive and other trends and developments in and prospects for, and governmental, regulatory and legislative matters relating to or otherwise affecting, the software and technology and software-as-a-service industries in which LMI and the GoTo Business operate, including in the cloud-based software solutions and remote connectivity services markets, (iii) the validity of, and risks associated, with the products, licenses and intellectual property of LMI and the GoTo Business (including, without limitation, the validity and duration of patents), (iv) existing and future relationships, agreements and arrangements with, and the ability to attract, retain and/or replace, key employees of LMI and the GoTo Business and (v) the ability to integrate the operations of LMI and the GoTo Business. RBC Capital Markets assumed that there would be no developments with respect to any such matters, or any adjustments to the aggregate merger consideration or capital structure of GetGo, that would have an adverse effect on LMI, GetGo (including the GoTo Business), the Merger or related transactions (including the contemplated benefits thereof) or that otherwise would be meaningful in any material respect to its analyses or opinion. RBC Capital Markets also relied on estimates of the management of LMI as to the capitalization of LMI and GetGo, including as to the number of fully diluted shares of LMI common stock and GetGo common stock as of the effective time of the Merger, and RBC Capital Markets assumed that such number of shares would not vary in any material respect that would be meaningful to its analyses or opinion.

In rendering its opinion, RBC Capital Markets did not assume any responsibility to perform, and it did not perform, an independent evaluation or appraisal of any of the assets or liabilities (contingent, off-balance sheet, derivative or otherwise) of or relating to LMI, GetGo (including the GoTo Business) or any other entity or business, and RBC Capital Markets was not furnished with any such valuations or appraisals. RBC Capital Markets did not assume any obligation to conduct, and it did not conduct, any physical inspection of the properties or facilities of LMI, GetGo (including the GoTo Business) or any other entity or business. RBC Capital Markets did not evaluate the solvency or fair value of LMI, GetGo (including the GoTo Business) or any other entity or business under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. RBC Capital Markets assumed that the Merger and related transactions would be consummated in accordance with the terms of the Merger Agreement and the Separation Agreement and in compliance with all applicable laws, documents and other requirements, without waiver, modification or amendment of any material term, condition or agreement, and that, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers and agreements for the Merger and related transactions, no delay,

 

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limitation, restriction or condition would be imposed or occur, including any divestiture or other requirements, that would have an adverse effect on LMI, GetGo (including the GoTo Business), the Merger or related transactions (including the contemplated benefits thereof) or that otherwise would be meaningful in any material respect to its analyses or opinion. RBC Capital Markets also assumed that the Merger and related transactions would qualify, as applicable, for the intended tax treatment contemplated by the Merger Agreement and the Separation Agreement. RBC Capital Markets further assumed that GetGo would retain or acquire all assets, properties and rights necessary for the operations of the GoTo Business, that appropriate reserves, indemnification arrangements or other provisions had been made with respect to liabilities of or relating to GetGo (including the GoTo Business) that would be assumed in connection with the Merger and related transactions, and that neither GetGo nor LMI would directly or indirectly assume or incur any liabilities that were contemplated to be excluded as a result of the Merger, the related transactions or otherwise. In addition, RBC Capital Markets assumed that the final executed Merger Agreement and Separation Agreement would not differ, in any respect that would be meaningful to its analyses or opinion, from the execution versions of the Merger Agreement and Separation Agreement reviewed by RBC Capital Markets.

RBC Capital Markets’ opinion spoke only as of its date, was based on conditions as they existed and information which RBC Capital Markets was supplied as of the date of its opinion, and was without regard to any market, economic, financial, legal or other circumstances or event of any kind or nature which may exist or occur after such date. RBC Capital Markets did not undertake to reaffirm or revise its opinion or otherwise comment upon events occurring after the date of its opinion and does not have an obligation to update, revise or reaffirm its opinion. RBC Capital Markets’ opinion related to the relative values of LMI and GetGo (including the GoTo Business). RBC Capital Markets did not express any opinion as to what the value of LMI common stock or any other securities actually would be when issued or distributed or the price or range of prices at which LMI common stock or any other securities may trade or otherwise be transferable at any time, including following announcement or consummation of the Merger and related transactions.

RBC Capital Markets’ opinion addressed only the fairness, from a financial point of view and as of the date of such opinion, to LMI of the aggregate merger consideration (to the extent expressly specified therein). RBC Capital Markets’ opinion did not in any way address any related transactions or any other terms, conditions, implications or other aspects of the Merger, the Merger Agreement, the Separation Agreement or any related agreements or voting agreements, including, without limitation, the form or structure of the Merger or related transactions, any adjustments to the aggregate merger consideration or the capital structure of GetGo, or any indemnification or other agreement, arrangement or understanding to be entered into in connection with or contemplated by the Merger, the related transactions or otherwise. RBC Capital Markets did not express any opinion or view with respect to, and RBC Capital Markets relied upon the assessments of LMI and its representatives regarding, legal, regulatory, tax, accounting and similar matters, as to which RBC Capital Markets understood that LMI obtained such advice as it deemed necessary from qualified professionals. Further, in rendering its opinion, RBC Capital Markets did not express any view on, and its opinion did not address, the fairness of the amount or nature of the compensation (if any) to any officers, directors or employees of any party, or class of such persons, relative to the aggregate merger consideration or otherwise.

The issuance of RBC Capital Markets’ opinion was approved by RBC Capital Markets’ fairness opinion committee. Except as described in this summary, LMI imposed no other instructions or limitations on the investigations made or procedures followed by RBC Capital Markets in rendering its opinion.

In preparing its opinion to the LMI Board, RBC Capital Markets performed various financial and comparative analyses, including those described below. The summary below of RBC Capital Markets’ material financial analyses provided to the LMI Board in connection with RBC Capital Markets’ opinion and certain factors considered is not a comprehensive description of all analyses undertaken or factors considered by RBC Capital Markets in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description.

 

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In performing its analyses, RBC Capital Markets considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of LMI and Citrix. The estimates of the future performance of LMI and the GoTo Business in or underlying RBC Capital Markets’ analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by RBC Capital Markets’ analyses. The analyses do not purport to be appraisals or to reflect the prices at which a company or business might actually be sold or acquired or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as RBC Capital Markets’ view of the actual value of LMI or the GoTo Business.

The aggregate merger consideration to be paid by LMI pursuant to the Merger Agreement was determined through negotiations between LMI and Citrix and was approved by the LMI Board. The decision to enter into the Merger Agreement and related documents was solely that of the LMI Board. RBC Capital Markets’ opinion and analyses were only one of many factors considered by the LMI Board in its evaluation of the Merger and should not be viewed as determinative of the views of the LMI Board, management or any other party with respect to the Merger or related transactions or the consideration payable in the Merger or related transactions.

Financial Analyses

The following is a summary of the material financial analyses provided by RBC Capital Markets to the LMI Board in connection with RBC Capital Markets’ opinion, dated July 26, 2016. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by RBC Capital Markets, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Selecting portions of RBC Capital Markets’ financial analyses or factors considered or focusing on the data set forth in the tables below without considering all analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of RBC Capital Markets’ financial analyses. 

Introduction. In its analysis of the aggregate merger consideration, RBC Capital Markets performed various financial analyses, as more fully described below. Utilizing selected public companies and discounted cash flow analyses, RBC Capital Markets calculated approximate implied enterprise value reference ranges for the GoTo Business (which ranges were rounded to the nearest $5 million) and approximate implied per share equity value reference ranges for LMI. RBC Capital Markets then calculated approximate implied reference ranges of the aggregate number of issuable shares of LMI common stock (excluding in respect of restricted stock units), referred to as implied issuable shares, based on the approximate implied enterprise value and approximate implied per share equity value reference ranges derived from these analyses. The low-ends of such approximate implied reference ranges were calculated by dividing the low-ends of the approximate implied enterprise value reference ranges derived for the GoTo Business by the high-ends of the approximate implied per share equity value reference ranges derived for LMI and the high-ends of such approximate implied reference ranges were calculated by dividing the high-ends of the approximate implied enterprise value reference ranges derived for the GoTo Business by the low-ends of the approximate implied per share equity value reference ranges derived for LMI. RBC Capital Markets also performed a relative contributions analysis to derive a range of approximate implied issuable shares based on the relative contributions of the GoTo Business and LMI to various financial metrics of the pro forma combined company. For purposes of the analyses described below, (a) the assumed transfer of $25 million in cash to GetGo from Citrix and special cumulative cash dividend totaling $1.50 per share in the aggregate to be paid by LMI to holders of LMI common stock were taken into account and (b) (i) EBITDA refers to earnings before interest, taxes, depreciation and amortization, adjusted for non-recurring items or, in the case of LMI and the GoTo Business, EBITDA refers to earnings before interest, taxes, depreciation and amortization (including amortization of acquired intangible assets), adjusted for acquisition-related costs, stock-based compensation expense, litigation-related expenses, and non-recurring expenses or benefits, as applicable; (ii) adjusted EBITDA

 

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refers to EBITDA less capitalized software costs; and (iii) adjusted free cash flow refers to cash flow from operations less capital expenditures, adjusted for non-recurring items or, in the case of LMI and the GoTo Business, adjusted free cash flow refers to cash flow from operations less capital expenditures and capitalized software costs.

Financial data utilized for the GoTo Business in the financial analyses described below was based on financial projections and other estimates and data relating to the GoTo Business prepared by the management of Citrix (as adjusted by the management of LMI), referred to as the GoTo Business forecasts, and financial data utilized for LMI in such financial analyses was based on financial projections and other estimates and data relating to LMI prepared by the management of LMI, referred to as the LMI forecasts.

Selected Public Companies Analyses. RBC Capital Markets performed separate selected public companies analyses of the GoTo Business and LMI in which RBC Capital Markets reviewed certain financial information of the GoTo Business, certain financial and stock market information of LMI and certain financial and stock market information of the following five selected companies that RBC Capital Markets considered generally relevant as publicly traded companies with operations in the software and technology and software-as-a-service industries in which LMI and the GoTo Business operate, including in cloud-based software solutions targeted at small-to-medium sized businesses, which are collectively referred to as the selected companies:

 

    Fleetmatics Group PLC

 

    GoDaddy Inc.

 

    Intuit Inc.

 

    j2 Global, Inc.

 

    RealPage, Inc.

In its selected public companies analyses of the GoTo Business and LMI, RBC Capital Markets reviewed, among other things, enterprise values, calculated as equity values based on closing stock prices on July 25, 2016 plus debt and non-controlling interests less cash and cash equivalents, as multiples of calendar year 2016 estimated revenue and calendar year 2016 estimated EBITDA, and reviewed equity values based on closing stock prices on July 25, 2016, as a multiple of calendar year 2016 estimated adjusted free cash flow. Financial data of the selected companies were based on publicly available research analysts’ estimates, public filings and other publicly available information. Financial data of the GoTo Business was based on the GoTo Business forecasts, and financial data of LMI was based on the LMI forecasts.

The overall low to high calendar year 2016 estimated revenue, calendar year 2016 estimated EBITDA and calendar year 2016 estimated adjusted free cash flow multiples observed for the selected companies were 2.0x to 6.2x (with a median of 4.1x), 8.9x to 18.2x (with a median of 14.0x) and 9.8x to 35.8x (with a median of 24.4x), respectively. RBC Capital Markets noted that the calendar year 2016 estimated revenue, calendar year 2016 estimated EBITDA and calendar year 2016 estimated adjusted free cash flow multiples observed for LMI were 4.8x, 17.9x and 19.3x, respectively. In deriving approximate implied enterprise value reference ranges for the GoTo Business and approximate implied per share equity value reference ranges for LMI, RBC Capital Markets then applied selected ranges of calendar year 2016 estimated revenue, calendar year 2016 estimated EBITDA and calendar year 2016 estimated adjusted free cash flow multiples derived from the selected companies of 2.0x to 6.0x, 9.0x to 18.0x and 10.0x to 36.0x, respectively, to the calendar year 2016 estimated revenue, calendar year 2016 estimated adjusted EBITDA and calendar year 2016 estimated adjusted free cash flow of the GoTo Business, respectively, based on the GoTo Business forecasts, and to the calendar year 2016 estimated revenue, calendar year 2016 estimated EBITDA and calendar year 2016 estimated adjusted free cash flow of LMI, respectively, based on the LMI forecasts. These analyses indicated approximate implied enterprise value reference ranges for the GoTo Business of $1,365 million to $4,100 million (based on calendar year 2016 estimated revenue), $1,575 million to $3,145 million (based on calendar year 2016 estimated adjusted EBITDA)

 

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and $955 million to $3,430 million (based on calendar year 2016 estimated adjusted free cash flow) and approximate implied equity value reference ranges for LMI of $31.40 to $80.21 per share (based on calendar year 2016 estimated revenue), $36.38 to $65.62 per share (based on calendar year 2016 estimated EBITDA) and $33.97 to $121.06 per share (based on calendar year 2016 estimated adjusted free cash flow). Utilizing the approximate implied enterprise value reference ranges derived for the GoTo Business and the approximate implied per share equity value reference ranges derived for LMI described above, RBC Capital Markets calculated the following approximate ranges of implied issuable shares, as compared to the aggregate merger consideration:

 

Ranges of Implied Issuable Shares Based on:

   Aggregate Merger
Consideration

CY2016E Revenue

  

CY2016E Adjusted
EBITDA/EBITDA

  

CY2016E Adjusted

Free Cash Flow

    

17.2 million – 139.6 million

   24.6 million – 91.7 million    7.6 million – 107.5 million    26,868,269

No company used in these analyses is identical to the GoTo Business or LMI. Accordingly, an evaluation of the results of these analyses is not entirely mathematical. Rather, these analyses involve complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which the GoTo Business and LMI were compared.

Discounted Cash Flow Analyses. RBC Capital Markets performed separate discounted cash flow analyses of the GoTo Business and LMI by calculating the estimated present values of the standalone unlevered, after-tax free cash flows that the GoTo Business and LMI were forecasted to generate during the second half of the fiscal year ending December 31, 2016 through the fiscal year ending December 31, 2020 based on, in the case of the GoTo Business, the GoTo Business forecasts and, in the case of LMI, the LMI forecasts. For purposes of these analyses, stock-based compensation was treated as a cash expense. RBC Capital Markets calculated terminal values for the GoTo Business and LMI by applying to the respective terminal year estimated unlevered, after-tax free cash flows of the GoTo Business and LMI a range of perpetuity growth rates of 2.0% to 4.0% in the case of the GoTo Business and 3.0% to 5.0% in the case of LMI. The unlevered, after-tax free cash flows and terminal values were then discounted to present value (as of July 25, 2016) using a selected discount rate range of 10.0% to 11.0% in the case of each of the GoTo Business and LMI. These analyses indicated an approximate implied enterprise value reference range for the GoTo Business of $1,185 million to $1,675 million and an approximate implied equity value reference range for LMI of $45.91 to $66.34 per share.

Utilizing the approximate implied enterprise value reference range derived for the GoTo Business and the approximate implied per share equity value reference range derived for LMI described above, RBC Capital Markets calculated the following approximate range of implied issuable shares, as compared to the aggregate merger consideration:

 

Range of Implied Issuable Shares

 

Aggregate Merger Consideration

18.2 million – 38.2 million

  26,868,269

Relative Contributions Analysis. RBC Capital Markets performed a relative contributions analysis of the GoTo Business and LMI in which RBC Capital Markets reviewed the relative contributions of the GoTo Business and LMI to the combined company’s calendar year 2016 and calendar year 2017 estimated revenue, EBITDA (or adjusted EBITDA in the case of the GoTo Business) and adjusted free cash flow. Financial data of the GoTo Business was based on the GoTo Business forecasts, and financial data of LMI was based on the LMI forecasts and other publicly available information. This analysis indicated overall relative contributions by the GoTo Business and LMI to these financial metrics of the combined company of approximately 51.0% to 67.2% and 32.8% to 49.0%, respectively.

 

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Utilizing the overall relative contributions of the GoTo Business and LMI to the combined company described above, RBC Capital Markets calculated the following approximate range of implied issuable shares (taking into account LMI’s net cash position at June 30, 2016), as compared to the aggregate merger consideration:

 

Range of Implied Issuable Shares

 

Aggregate Merger Consideration

27.9 million – 51.4 million

  26,868,269

RBC Capital Markets noted that, based on the fully diluted shares of LMI common stock and the implied fully diluted shares of LMI common stock issuable to holders of GetGo common stock in the Merger as estimated by LMI management as of an assumed closing date for the Merger of February 28, 2017, the implied pro forma equity ownership of holders of GetGo equity interests and LMI equity interests upon consummation of the Merger would be approximately 50.1% and 49.9%, respectively, on a fully diluted basis.

Certain Informational Factors

RBC Capital Markets observed certain factors that were not considered part of RBC Capital Markets’ financial analyses with respect to its opinion but were referenced for informational purposes, including, among other things, the following:

 

  the estimated enterprise value of the GoTo Business based on publicly available forward research analysts’ estimates, which indicated an estimated enterprise value of the GoTo Business (rounded to the nearest $5 million) of approximately $1,400 million to $3,400 million, as compared to the enterprise value of the GoTo Business implied by the aggregate merger consideration of approximately $1,713 million;

 

  the historical trading performance of LMI common stock over the 52-week period ended July 25, 2016, which indicated low and high closing prices for LMI common stock during such period of approximately $35.00 to $74.94 per share, as compared to the volume-weighted average price of LMI common stock over the five-day period ended July 25, 2016 of $63.92 per share and the closing price for LMI common stock on July 25, 2016 of $65.31 per share; and

 

  publicly available forward research analysts’ stock price targets for LMI common stock of $57 to $85 per share (with a median of $70 per share) and, when discounted to present value using a discount rate based on LMI’s cost of equity of 12%, of approximately $50.89 to $75.89 per share, as compared to the volume-weighted average price of LMI common stock over the five-day period ended July 25, 2016 of $63.92 per share and the closing price for LMI common stock on July 25, 2016 of $65.31 per share.

Miscellaneous

In connection with RBC Capital Markets’ services as LMI’s financial advisor, LMI has agreed to pay RBC Capital Markets an aggregate fee of $12 million, of which a portion was payable upon delivery of RBC Capital Markets’ opinion and $10.5 million is contingent upon consummation of the Merger. LMI also has agreed to reimburse RBC Capital Markets for expenses reasonably incurred in connection with RBC Capital Markets’ services and to indemnify RBC Capital Markets and related persons against certain liabilities, including liabilities under the federal securities laws, arising out of RBC Capital Markets’ engagement.

As the LMI Board was aware, RBC Capital Markets and certain of its affiliates in the past have provided and currently are providing investment banking, commercial banking and financial advisory services to LMI, Citrix and certain of their respective affiliates unrelated to the proposed merger and related transactions, for which services RBC Capital Markets and its affiliates have received and expect to receive customary compensation, including, during the two-year period prior to the date of RBC Capital Markets’ opinion, having acted or acting as a bookrunner for, and counterparty in respect of, a convertible senior notes issuance of Citrix. From January 1, 2014 through June 30, 2016, RBC Capital Markets and its affiliates received aggregate fees from Citrix for such services of approximately $3 million. During the same period, RBC Capital Markets and its affiliates did not perform services for which fees were received from LMI. RBC Capital Markets and its affiliates in the future may provide investment banking, commercial banking and financial advisory services to LMI, Citrix and/or their respective affiliates, for which services RBC Capital Markets and such affiliates would expect to receive compensation.

 

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RBC Capital Markets, as part of its investment banking services, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, corporate restructurings, underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. In the ordinary course of business, RBC Capital Markets or one or more of its affiliates may act as a market maker and broker in the publicly traded securities of LMI, Citrix, GetGo and/or any other entity that may be involved in the Merger and related transactions or their respective affiliates and receive customary compensation in connection therewith, and may also actively trade securities of LMI, Citrix, GetGo and/or any other entity that may be involved in the Merger and related transactions or their respective affiliates for RBC Capital Markets’ or its affiliates’ own account and the accounts of RBC Capital Markets’ or its affiliates’ customers and, accordingly, RBC Capital Markets and its affiliates may hold a long or short position in such securities.

RBC Capital Markets is an internationally recognized investment banking firm which is regularly engaged in providing financial advisory services in connection with mergers and acquisitions. LMI selected RBC Capital Markets to act as its financial advisor in connection with the Merger on the basis of RBC Capital Markets’ experience in similar transactions, reputation in the investment community and familiarity with LMI and its business and the industries in which it operates.

Certain Projections

LMI does not as a matter of course make public any long-term financial projections as to future performance, earnings or other results beyond the current fiscal year given the inherent unpredictability of the underlying assumptions and estimates for extended periods. However, in connection with its evaluation of the Merger, LMI’s management prepared certain non-public, internal financial projections regarding LMI’s anticipated future operations as a standalone business, based on assumptions that LMI’s management believed to be reasonable at the time, for the calendar years ending December 31, 2016, 2017 and 2018. LMI also prepared, in connection with RBC Capital Markets’ discounted cash flow analysis of LMI, certain non-public extrapolations of certain of these financial projections for the calendar years ending December 31, 2019 and 2020. We refer to the internal financial projections prepared by LMI for the calendar years ending December 31, 2016, 2017 and 2018, together with the extrapolations for the calendar years ending December 31, 2019 and 2020, as the LMI Projections. A summary of the LMI Projections has been provided below.

Citrix also does not as a matter of course make public any long-term financial projections as to the future performance, earnings or other results of the GoTo Business. However, in connection with the process leading to the signing of the Merger Agreement and the Separation Agreement, Citrix management prepared certain non-public, internal financial projections for the GoTo Business for the calendar years ending December 31, 2016, 2017 and 2018, which were then provided to LMI as part of LMI’s due diligence review of the GoTo Business and to LMI’s financial advisor. We refer to these projections as the Citrix GetGo Projections. A summary of the Citrix GetGo Projections has been provided below.

In connection with LMI’s evaluation of the Transactions, LMI’s management also prepared its own non-public, internal financial projections regarding the GoTo Business’ anticipated future operations for the calendar years ending December 31, 2016, 2017 and 2018, which were derived from the financial information provided by Citrix to LMI, including the Citrix GetGo Projections, in connection with LMI’s due diligence review of the GoTo Business. In preparing its own financial projections for the GoTo Business, LMI management considered the Citrix GetGo Projections and, as it believed appropriate, made adjustments to certain individual revenue indicators such as average order size, net new customer revenue, sales representative productivity and dollar retention rate in a manner that LMI management believed reflected the historical performance of each business, as well as potential business and financial risks that LMI management believed could impact the GoTo Business’ future financial performance. LMI also prepared, in connection with RBC Capital Markets’ discounted cash flow analysis of the GoTo Business, certain non-public extrapolations of its financial projections for the GoTo Business for the calendar years ending December 31, 2019 and 2020. The Citrix GetGo Projections did not include financial projections for the calendar years ending December 31, 2019 and 2020. Thus, unlike the adjustments made to the Citrix GetGo Projections for the calendar years ending December 31, 2016, 2017 and

 

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2018, these extrapolations were not based on individual revenue indicators, but instead were intended to simply reflect what LMI management believed to be the natural run rate of the GoTo Business, assuming that those revenue indicators, such as dollar retention rate, net new customer revenue, average order size and sales representative productivity, were to perform generally in line with the projections prepared by LMI management for the GoTo Business for the prior three years. We refer to the internal financial projections prepared by LMI for the GoTo Business for the calendar years ending December 31, 2016, 2017 and 2018, together with the extrapolations for the calendar years ending December 31, 2019 and 2020, as the LMI Adjusted GetGo Projections. A summary of the LMI Adjusted GetGo Projections has been provided below.

LMI Projections

 

     CY2016E      CY2017E      CY2018E  
     (In millions)  

Revenue

   $ 333       $ 385       $ 437   

Adjusted Gross Profit

   $ 295       $ 340       $ 386   

Adjusted Total Operating Expenses

   $ 218       $ 248       $ 273   

Adjusted Operating Profit

   $ 76       $ 92       $ 112   

Adjusted EBITDA

   $ 89       $ 107       $ 130   

Adjusted Free Cash Flow

   $ 92       $ 98       $ 123   

Adjusted Unlevered Free Cash Flow After Tax

   $ 52       $ 55       $ 74   

For purposes of the LMI Projections, (a) Adjusted Gross Profit, Adjusted Total Operating Expenses and Adjusted Operating Profit refer to gross profit, total operating expenses and operating profit, respectively, in each case excluding the effect of acquisition-related costs, amortization of acquired intangible assets, stock-based compensation expense, litigation-related expenses, and non-recurring expenses or benefits, as applicable; (b) Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization (including amortization of acquired intangible assets), adjusted for acquisition-related costs, stock-based compensation expense, litigation-related expenses, and non-recurring expenses or benefits, as applicable; (c) Adjusted Free Cash Flow refers to cash flow from operations less capital expenditures and capitalized software costs; and (d) Adjusted Unlevered Free Cash Flow After Tax refers to Adjusted Free Cash Flow less stock-based compensation expense and excluding the impact of interest income and expense and including certain tax adjustments.

The portion of the LMI Projections constituting LMI management’s extrapolations for the calendar years ending December 31, 2019 and 2020 included the following (all in millions): Revenue for 2019 of $490 and Revenue for 2020 of $539; Adjusted EBITDA for 2019 of $152 and Adjusted EBITDA for 2020 of $172; and Adjusted Unlevered Free Cash Flow After Tax for 2019 of $85 and Adjusted Unlevered Free Cash Flow After Tax for 2020 of $94.

Citrix GetGo Projections

 

     CY2016E      CY2017E      CY2018E  
     (In millions)  

Net Revenues

   $ 687       $ 755       $ 852   

Non-GAAP Cost of Revenues

   $ 160       $ 174       $ 192   

Non-GAAP Total Operating Expenses

   $ 363       $ 400       $ 451   
  

 

 

    

 

 

    

 

 

 

Non-GAAP Income from Operations

   $ 164       $ 181       $ 209   

For purposes of the Citrix GetGo Projections, Non-GAAP Cost of Revenues, Non-GAAP Total Operating Expenses and Non-GAAP Income from Operations exclude the effects of stock-based compensation expense, amortization of acquired intangible assets, restructuring charges, separation costs associated with the separation of the GoTo Business, charges or benefits related to patent lawsuits, and non-recurring expenses or benefits, as applicable.

 

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LMI Adjusted GetGo Projections

 

     CY2016E      CY2017E      CY2018E  
     (In millions)  

Adjusted Revenue

   $ 683       $ 719       $ 746   

Adjusted Gross Profit

   $ 536       $ 562       $ 584   

Adjusted Total Operating Expenses

   $ 383       $ 396       $ 410   

Adjusted Operating Profit

   $ 154       $ 165       $ 174   

Adjusted EBITDA

   $ 175       $ 187       $ 198   

Adjusted Free Cash Flow

   $ 95       $ 120       $ 126   

Adjusted Unlevered Free Cash Flow After Tax

   $ 69       $ 93       $ 97   

For purposes of these LMI Adjusted GetGo Projections, (a) Adjusted Revenue refers to revenue excluding the effect of the acquisition accounting fair-value adjustment for acquired GetGo deferred revenue; (b) Adjusted Gross Profit, Adjusted Total Operating Expenses and Adjusted Operating Profit, respectively, refer to gross profit, total operating expenses and operating profit, respectively, in each case excluding the effect of the acquisition accounting fair-value adjustment for acquired GetGo deferred revenue, acquisition-related costs, amortization of acquired intangible assets, stock-based compensation expense, litigation-related expenses, and non-recurring expenses or benefits, as applicable; (c) Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization (including amortization of acquired intangible assets), adjusted for acquisition-related costs, stock-based compensation expense, litigation-related expenses, and non-recurring expenses or benefits, as applicable, less capitalized software costs; (d) Adjusted Free Cash Flow refers to cash flow from operations less capital expenditures and capitalized software costs; and (e) Adjusted Unlevered Free Cash Flow After Tax refers to Adjusted Free Cash Flow less stock-based compensation expense.

The portion of the LMI Adjusted GetGo Projections constituting LMI management’s extrapolations for the calendar years ending December 31, 2019 and 2020 included the following (all in millions): Adjusted Revenue for 2019 of $768 and Adjusted Revenue for 2020 of $783; Adjusted EBITDA for 2019 of $238 and Adjusted EBITDA for 2020 of $251; and Adjusted Unlevered Free Cash Flow After Tax for 2019 of $102 and Adjusted Unlevered Free Cash Flow After Tax for 2020 of $110.

The LMI Projections and the LMI Adjusted GetGo Projections were independently prepared by LMI management based on assumptions that LMI’s management believed to be reasonable at the time and were provided to the LMI Board in its evaluation of the Transactions and to LMI’s financial advisor, RBC Capital Markets, for its use and reliance in connection with its financial analyses and opinion (see “The Transactions—Opinion of LMI’s Financial Advisor”). LMI has included the above summaries of these financial projections to provide its stockholders with access to certain non-public information that was considered by the LMI Board for purposes of evaluating the Transactions and which was also provided to LMI’s financial advisor.

The inclusion of the above financial projections should not be deemed a representation by LMI, Citrix or any of their respective officers, directors, affiliates, advisors or other representatives with respect to such financial projections. The future financial results of LMI and the GoTo Business may materially differ from those expressed in the LMI Projections, the Citrix GetGo Projections and the LMI Adjusted GetGo Projections due to a number of factors that are beyond the control of LMI’s management and the management of GetGo and Citrix. Important factors that may affect actual results and cause the financial projections to not be achieved include, but are not limited to, risks and uncertainties relating to the businesses of each of LMI and GetGo (including each of LMI’s and GetGo’s ability to achieve strategic goals, objectives and targets over applicable periods), overall industry performance, foreign exchange rates, changes in the regulatory environment, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which LMI and GetGo operate. You are urged to review the “Risk Factors” beginning on page 33 of this proxy statement/prospectus-information statement for a description of risk factors relating to the Transactions as well as the other factors described under “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 56 of this proxy statement/prospectus-information statement for additional information regarding the risks inherent

 

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in forward-looking information such as these financial projections. These financial projections also reflect assumptions as to certain business decisions that are subject to change. Accordingly, there can be no assurance that these financial projections will be realized. The information from the financial projections included above should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the GoTo Business contained in this proxy statement/prospectus-information statement and in LMI’s public filings with the SEC. In light of the foregoing factors and the uncertainties inherent in these financial projections, stockholders are cautioned not to place undue, if any, reliance on these projections.

The LMI Projections, the Citrix GetGo Projections and the LMI Adjusted GetGo Projections were not prepared with a view toward public disclosure, nor were they prepared with a view toward compliance with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. Neither LMI’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained therein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information. The summaries of the LMI Projections, the Citrix GetGo Projections and the LMI Adjusted GetGo Projections are not being included in this proxy statement/prospectus-information statement to influence LMI stockholders’ decisions whether to vote for the Share Issuance.

The inclusion of summaries of the LMI Projections, the Citrix GetGo Projections and the LMI Adjusted GetGo Projections in this proxy statement/prospectus-information statement should not be regarded as an indication that any of LMI, GetGo, Citrix or their respective affiliates, officers, directors, partners, advisors or representatives considered these financial projections to be necessarily predictive of actual future events, and these financial projections should not be relied upon as such. None of LMI, GetGo or Citrix or their respective affiliates, officers, directors, partners, advisors or representatives can give any assurance that actual results will not differ materially from these financial projections, and none of LMI, GetGo, Citrix or any of their respective affiliates, officers, directors or partners undertakes any obligation to update or otherwise revise or reconcile these financial projections to reflect circumstances existing after the date the financial projections were generated or to reflect the occurrence of future events even if any or all of the assumptions underlying the financial projections are not realized. LMI does not intend to make publicly available any update or other revision to these financial projections. None of LMI, GetGo, Citrix or any of their respective affiliates, officers, directors, partners, advisors or representatives has made, makes or is authorized in the future to make any representation to any stockholder or other person regarding LMI’s or the GoTo Business’ ultimate performance compared to the information contained in these financial projections or that the estimated results will be achieved.

Ownership of LMI Following the Merger

Immediately after the closing of the Merger, Citrix equityholders are expected to own approximately 50.1% of the shares of LMI common stock on a fully diluted basis, and current LMI equityholders are expected to own approximately 49.9% of the shares of LMI common stock on a fully diluted basis.

Board of Directors and Executive Officers of LMI Following the Merger; Operations Following the Merger

Immediately following the Merger, the LMI Board of Directors will consist of nine directors, including five directors currently serving on the LMI Board of Directors and four individuals designated by Citrix and satisfactory to LMI. The Citrix director designees will be assigned to Class I, Class II and Class III of the LMI Board of Directors as follows:

 

    two director designees will be appointed to the class of directors whose terms expire at the first annual meeting of LMI stockholders following the effective time of the Merger; and

 

    one director designee will be appointed to each of the other two classes of directors.

 

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The Citrix director designees are currently expected to be Robert Calderoni, Jesse Cohn, Peter Sacripanti and David Henshall. However, the appointment of Jesse Cohn to the LMI Board of Directors is conditioned upon the execution of a Cooperation Agreement by Elliott International Capital Advisors Inc. and certain of its affiliates, the form of which is attached to the Merger Agreement. See “Additional Agreements Related to the Separation, the Distribution and the Merger—Cooperation Agreement.”

The Merger Agreement provides that in the event of a vacancy in one of the four director seats designated by Citrix during the two years following the effective time of the Merger (or for a director whose term expires at LMI’s second annual meeting of stockholders, the period ending on the second LMI annual meeting of stockholders following the effective time of the Merger), the LMI Board of Directors will appoint a Citrix-designated replacement that is satisfactory to LMI’s nominating and corporate governance committee to fill the vacancy. In connection with the first LMI annual meeting of stockholders following the effective time of the Merger, the LMI Board of Directors will, subject to the reasonable exercise of its fiduciary duties, recommend the election of the individuals designated by Citrix for re-election to the LMI Board of Directors.

Pursuant to the Merger Agreement, the LMI Board of Directors has agreed to take all action necessary to appoint at least one Citrix director designee to each of the nominating and corporate governance committee, the audit committee, the compensation committee and any other standing committee of the LMI Board of Directors. In addition, the Merger Agreement provides that the LMI Board of Directors will establish an operating committee to be effective immediately following the Merger and for a period of at least two years thereafter. This committee will be comprised of two Citrix designees and two current members of the LMI Board of Directors, and will be authorized, among other things, to design and oversee a plan to achieve the synergies expected to result from the Merger.

Michael K. Simon, LMI’s former Chief Executive Officer and current Chairman of the LMI Board of Directors, will remain in place as Chairman of the LMI Board of Directors following the completion of the Transactions. William R. Wagner, LMI’s current President and Chief Executive Officer, will also remain on the LMI Board of Directors. The other three directors designated by LMI will be named at a later date. LMI’s current President and Chief Executive Officer, William R. Wagner, and current Chief Financial Officer, Edward K. Herdiech, will continue to serve LMI in their current roles while certain members of the GetGo management team are expected to join LMI as well.

Following the Merger, the location of the headquarters and principal executive offices of LMI and GetGo will be LMI’s executive offices in Boston, Massachusetts.

Interests of Certain Persons in the Merger

Certain of LMI’s directors and executive officers have financial interests in the Transactions that may be different from, or in addition to, the interests of LMI’s stockholders generally. The members of the LMI Board of Directors were aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Transactions, including the Share Issuance and the Merger, and in recommending to LMI’s stockholders that they vote to approve the Share Issuance. At the close of business on the record date for the LMI special meeting, LMI’s directors and executive officers beneficially owned approximately 4.7% of the outstanding shares of LMI’s common stock.

The compensation committee of the LMI Board of Directors will continue to oversee LMI’s executive compensation program and approve all executive compensation decisions after the Merger. LMI’s compensation committee is expected to review its executive compensation program with respect to the executive officers of LMI after the Merger but has not yet made any determinations with respect to the compensation of those officers following the Merger.

As with all Citrix stockholders, if a director or executive officer of GetGo owns shares of Citrix common stock on the record date for the Distribution, such person will participate in the Distribution and the Merger on the same terms as other Citrix stockholders. All of GetGo’s outstanding common stock is currently owned

 

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directly by Citrix. None of GetGo’s directors or executive officers, other than Christopher Hylen, Citrix’s Senior Vice President and General Manager of the GoTo Business, will receive any severance or other compensation as a result of the Merger. Pursuant to an incentive agreement between Mr. Hylen and Citrix, Mr. Hylen will be entitled to a $150,000 cash bonus payable upon completion of the Merger if he remains employed with Citrix through such date. In addition, Mr. Hylen will be entitled to receive a severance amount equal to the sum of his then current annual base salary, his target variable cash compensation, and $2.0 million if his employment is terminated by Citrix without “cause” or by Mr. Hylen for “good reason” in connection with the Merger. In such event, he also will vest in the portion of his equity awards with service-based vesting and his equity awards with performance-based vesting will be deemed earned either at target or based on actual achievement, if higher (the foregoing will not apply to his 2016 annual equity awards). In addition, Mr. Hylen will be entitled to his target variable cash compensation on a prorated basis, and continued health insurance coverage for 18 months following his date of termination. Such payments and benefits are subject to the execution by Mr. Hylen of a separation and release agreement containing a general release of claims in favor of Citrix.

Regulatory Approvals

HSR

Each party to the Merger Agreement has also agreed to make its respective filings under the HSR Act within ten business days of the execution of the Merger Agreement and, as promptly as practicable, to make any other filings required or advisable under any competition laws with respect to the transactions contemplated by the Merger Agreement and to supply the appropriate governmental authorities any additional information and documentary material that may be requested pursuant to the HSR Act and such other laws as promptly as practicable. LMI and Citrix filed the requisite notification and report forms with the U.S. Federal Trade Commission and Antitrust Division in August 2016 and received notice of the early termination of the waiting period under the HSR Act in September 2016. The parties have agreed to use reasonable best efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act, which waiting periods were terminated in September 2016, and the receipt of approvals under other applicable competition laws as soon as practicable.

In addition, LMI has agreed to, and to cause its subsidiaries to, use reasonable best efforts to avoid or eliminate each and every impediment under any antitrust, competition or trade regulation law that may be asserted by any governmental authority with respect to the Merger so as to enable the closing of the Merger to occur as promptly as practicable, including proposing, negotiating, committing to, and effecting, by consent decree, hold separate order, or otherwise, the sale, divestiture or disposition of such assets or businesses of GetGo (or GetGo’s subsidiaries) or LMI (or LMI’s subsidiaries), as applicable, in each case, as may be required in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order, or other order in any suit or proceeding, which would otherwise have the effect of preventing the closing of the Merger (provided that the effectiveness of any such sale, divestiture or disposition or action or commitment must be contingent on consummation of the Merger and no such action that affects LMI or GetGo may be taken without the consent of LMI). However, (i) LMI will not be required to take any such action that would require sales, divestitures or dispositions of any assets, properties or businesses if such assets, properties or businesses account for more than $40.0 million in estimated, or, if applicable, actual revenues for the fiscal year ended December 31, 2016 and (ii) no other such actions will be required if such actions would reasonably be expected, individually or in the aggregate, to result in a reduction in annual revenue to LMI and its subsidiaries (including GetGo and its subsidiaries) of more than $40.0 million.

In addition, LMI agreed to defend and litigate on the merits through a lower-court ruling, any action, claim, litigation, investigation or similar proceeding by any party in order to avoid entry of, or to have vacated or terminated, any decree, order or judgment (whether temporary, preliminary or permanent) that would prevent the closing of the Merger prior to the agreed upon outside date.

Communications Regulatory Approvals

Under the Communications Act, and as a condition to, and before the completion of, the transactions contemplated by the Merger Agreement and the Separation Agreement, the FCC must approve the transfer of

 

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control of authorizations of certain Citrix subsidiaries to LMI. In connection with such approval, the FCC must determine whether LMI is qualified to control the FCC authorizations and whether such transfer of control is consistent with the Communications Act and FCC rules and would serve the public interest, convenience and necessity. The application for FCC consent to the transaction was filed in August 2016 and FCC consent was received in September 2016.

In addition, the Transactions require the approval of certain state public utility commissions or similar state authorities that have jurisdiction over authorizations to provide telecommunications services held by Grasshopper Group, LLC, Citrix Communications LLC, and Citrix Communications Virginia LLC, which we refer to as the Citrix Telecommunications Subsidiaries. As a general matter, those state commissions, consistent with their states’ laws, must determine whether LMI is qualified to control the state authorizations and whether the transfer of control of such authorizations is consistent with the public interest, convenience and necessity. With respect to the state approvals, Citrix and LMI have agreed that satisfaction of the relevant closing condition requires evidence of consent, approval, or other authorization, if required, from state commissions covering not less than 90% of the aggregate number of audio service subscribers of the Citrix Telecommunications Subsidiaries.

Citrix and LMI each have agreed to use commercially reasonable efforts to (i) obtain consent of the FCC, which was obtained in September 2016, and (ii) obtain all approvals, authorizations, or consents from, and submit all notices to, the state commissions having jurisdiction over the Transactions. For a further description, see “The Transaction Agreements—The Merger Agreement—Conduct of Business Pending the Merger—Regulatory Matters.

Listing

LMI filed an application to the NASDAQ Global Select Market for the listing of the shares of LMI common stock to be issued in connection with the Merger and agreed to use reasonable best efforts to cause such listing application to be approved. LMI has been informed that NASDAQ has completed its review of such listing application. It is a condition to the obligation of the parties to consummate the Merger that the shares of LMI common stock to be issued in connection with the Merger have been approved for listing on the NASDAQ Global Select Market.

Federal Securities Law Consequences; Resale Restrictions

LMI common stock issued pursuant to the Merger Agreement will not be subject to any restrictions on transfer arising under the Securities Act, except for shares issued to any Citrix stockholder who may be deemed to be an “affiliate” of LMI for purposes of Rule 145 under the Securities Act.

Accounting Treatment of the Merger

Accounting Standards Codification Topic 805, Business Combinations, or ASC 805, requires the use of the acquisition method of accounting for business combinations. In applying the acquisition method, it is necessary to identify both the accounting acquiree and the accounting acquirer. In a business combination effected through an exchange of equity interests, such as the Merger, the entity that issues the interests (LMI in this case) is generally the accounting acquirer; however, all pertinent facts and circumstances must be considered, including, but not limited to, the following:

 

    The composition of the senior management of the combined entity. In this case, the chief executive officer and chief financial officer of LMI immediately following the Merger will consist of the chief executive officer and chief financial officer of LMI immediately prior to consummation of the Merger. In addition, a substantial majority of senior management (inclusive of executive officers) of LMI immediately following the Merger is expected to consist of the senior management of LMI immediately prior to consummation of the Merger.

 

   

The composition of the governing body of the combined entity. In this case, the LMI Board of Directors immediately following the Merger will be composed of five members of the LMI Board of Directors (including its Chairman) immediately prior to the Merger and four members designated by Citrix. In

 

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addition, the nominating and corporate governance committee will be composed of three members, consisting of two designees of LMI and one designee of Citrix. As a result of the initial composition of the staggered-term Board of Directors of the combined entity and its director nominating committee, it is expected that members of the Board of Directors elected by LMI stockholders prior to the Merger will maintain a five-member majority of the Board of Directors for a substantive period after the Merger, including through May 2018, when LMI’s 2018 annual meeting of stockholders is expected to occur.

 

    The relative voting interests in the combined entity after the combination. In this case, immediately following the Merger, equityholders of Citrix, the sole stockholder of GetGo, are expected to receive approximately 50.1% of LMI’s issued and outstanding common stock on a fully diluted basis and LMI equityholders are expected to own the remaining approximately 49.9% of LMI’s issued and outstanding common stock on a fully diluted basis.

LMI’s management has determined that LMI represents the accounting acquirer in this combination based on an analysis of the criteria outlined in ASC 805 and the facts and circumstances specific to this transaction. As a result, LMI will record the business combination in its financial statements and will apply the acquisition method to account for the acquired assets and assumed liabilities of the GoTo Business upon consummation of the Merger. Applying the acquisition method includes recording the identifiable assets acquired and liabilities assumed at their fair values, and recording goodwill for the excess of the purchase price over the aggregate fair value of the identifiable assets acquired and liabilities assumed.

Rights of Appraisal

Neither LMI’s nor Citrix’s stockholders will be entitled to exercise appraisal or dissenters’ rights under the DGCL in connection with the Separation, the Distribution or the Merger.

 

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U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION AND MERGER

The following is a general discussion of the material U.S. federal income tax consequences of the Distribution and Merger to the U.S. holders, as defined below, of Citrix common stock. The following discussion is based on the Code, the Treasury regulations promulgated under the Code, and interpretations of such authorities by the courts and the IRS, all as they exist as of the date of this proxy statement/prospectus-information statement and all of which are subject to change, possibly with retroactive effect. Any such change could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion is limited to holders of Citrix common stock that are U.S. holders, as defined below, and hold such stock as a capital asset within the meaning of Section 1221 of the Code. Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that may be relevant to U.S. holders of Citrix common stock in light of their particular circumstances, nor does it address the consequences to holders of Citrix common stock subject to special treatment under the U.S. federal income tax laws, such as:

 

    tax-exempt entities;

 

    partnerships (including entities treated as partnerships for U.S. federal income tax purposes);

 

    persons who are subject to the alternative minimum tax;

 

    certain former citizens or long-term residents of the United States;

 

    persons who acquire their shares of Citrix common stock or LMI common stock pursuant to the exercise of employee stock options or otherwise as compensation;

 

    banks, insurance companies and other financial institutions;

 

    regulated investment companies and real estate investment trusts;

 

    dealers or traders in securities;

 

    traders in securities who elect to apply a mark-to-market method of accounting;

 

    holders who have a functional currency other than the U.S. dollar; and

 

    persons who hold their shares of Citrix common stock or LMI common stock as part of a straddle, hedge, conversion, constructive sale, synthetic security, integrated investment or other risk-reduction transaction for U.S. federal income tax purposes.

This discussion does not address any U.S. federal estate, gift or other non-income tax consequences or any state, local or foreign tax consequences, or the consequences of the Medicare tax on net investment income. Holders of Citrix common stock should consult their tax advisors as to the particular tax consequences to them of the Distribution and Merger.

For purposes of this discussion, a U.S. holder is a beneficial owner of Citrix common stock that is, for U.S. federal income tax purposes:

 

    an individual who is a citizen or a resident of the United States;

 

    a corporation, or other entity taxable as a corporation for U.S. federal tax purposes, created or organized under the laws of the United States, any state thereof or the District of Columbia;

 

    an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

 

    a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United States persons (within the meaning of Section 7701(a)(30) of the Code) have the authority to control all of its substantial decisions, or (ii) the trust has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

 

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If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) holds shares of Citrix common stock, the tax treatment of a partner in the partnership generally will depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding shares of Citrix common stock and partners in such partnerships should consult their own tax advisors regarding the tax consequences of the Distribution and Merger.

CITRIX STOCKHOLDERS ARE ENCOURAGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE DISTRIBUTION AND MERGER.

Treatment of the Distribution

The completion of the Distribution is conditioned upon the receipt by Citrix of an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, or Skadden, to the effect that (i) the Contribution and Distribution, taken together, will constitute a “reorganization” within the meaning of Section 368(a) of the Code and each of Citrix and GetGo will be a party to the reorganization within the meaning of Section 368(b) of the Code, (ii) the Distribution, as such, will qualify as a distribution of the GetGo common stock to Citrix’s stockholders pursuant to Section 355 of the Code, and as a transaction in which the stock distributed is thereby “qualified property” for purposes of Sections 355(d), 355(e) and 361(c) of the Code, and (iii) the Merger will not cause Section 355(e) of the Code to apply to the Distribution. We refer to Skadden’s opinion covering the foregoing matters as the Distribution Tax Opinion. The Distribution Tax Opinion will be based on, among other things, current law and factual representations and assumptions as of the date of the Distribution made by Citrix, GetGo, LMI and Merger Sub. The failure of any of those representations or assumptions to be true, correct and complete in all material respects could adversely affect the conclusions stated herein. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the conclusions reached in the opinion. Neither Citrix nor LMI intends to request any ruling from the IRS as to the U.S. federal income tax consequences of the Distribution. Consequently, no assurance can be given that the IRS will not challenge the conclusions reflected herein or in the Distribution Tax Opinion or that a court would not sustain such a challenge.

Based on and assuming the validity of the Distribution Tax Opinion, the following is a discussion of the material U.S. federal income tax consequences of the Contribution and the Distribution:

 

    subject to the discussion below regarding Section 355(e), and except for taxable income or gain possibly arising as a result of certain internal reorganization transactions undertaken prior to or in anticipation of the Distribution, Citrix will not recognize gain or loss in connection with the Contribution and the Distribution;

 

    no gain or loss will be recognized by, or be includible in the income of, a U.S. holder of Citrix common stock solely as a result of the receipt of GetGo common stock in the Distribution;

 

    the aggregate tax basis in the shares of Citrix common stock and GetGo common stock in the hands of each U.S. holder of Citrix common stock immediately after the Distribution will be the same as the aggregate tax basis of the shares of Citrix common stock held by such U.S. holder immediately before the Distribution, allocated between the shares of Citrix common stock and GetGo common stock in proportion to their relative fair market values immediately following the Distribution; and

 

    the holding period for each U.S. holder of Citrix common stock for the GetGo common stock received in the Distribution will include the holding period for the Citrix common stock with respect to which the GetGo common stock was received.

Even if the Contribution and Distribution were to qualify as a reorganization under Sections 368(a) and 355 of the Code, the Distribution would be taxable to Citrix (but not to U.S. holders of Citrix common stock) pursuant to Section 355(e) of the Code if there is a 50% or greater change in ownership of either Citrix or GetGo

 

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(or of LMI after the Merger), directly or indirectly, as part of a plan or series of related transactions that include the Distribution. For purposes of Section 355(e), any acquisitions of Citrix, GetGo or LMI stock within the period beginning two years before the Distribution and ending two years after the Distribution are generally presumed to be part of such a plan, although Citrix may, depending on the facts and circumstances, be able to rebut that presumption. For purposes of this test, the Merger will be treated as part of a plan with the Distribution, but the Merger standing alone will not cause the Distribution to be taxable to Citrix under Section 355(e) of the Code because holders of GetGo common stock will own more than 50% of the common stock of LMI following the Merger. If the IRS were to determine that other acquisitions of Citrix, GetGo or LMI stock, either before or after the Distribution, were part of a plan or series of related transactions that included the Distribution, such determination could result in the recognition of a material amount of taxable gain by Citrix under Section 355(e) of the Code. In connection with the Distribution Tax Opinion, Citrix and GetGo will represent that the Distribution is not part of any such plan or series of related transactions, and LMI will represent that the Merger is not part of any such plan or series of related transactions with the Distribution, in each case pursuant to which one or more persons will acquire directly or indirectly equity representing a 50% or greater interest in Citrix or GetGo.

In general, if the Contribution and Distribution, taken together, were determined not to qualify as a “reorganization” under Sections 368(a) and 355 of the Code, Citrix would recognize taxable gain, which could result in significant tax to Citrix. In addition, each U.S. holder of Citrix common stock who receives GetGo common stock in the Distribution would be treated as receiving a taxable distribution equal to the amount of the fair market value of the GetGo common stock received by the U.S. holder. Specifically, the full value of GetGo common stock distributed to a U.S. holder generally would be treated first as a taxable dividend to the extent of the holder’s pro rata share of Citrix’s current and accumulated earnings and profits, then as a non-taxable return of capital to the extent of the holder’s basis in the Citrix common stock, and finally as capital gain from the sale or exchange of Citrix common stock with respect to any remaining value.

In connection with the Transactions, Citrix, GetGo and LMI have executed a Tax Matters Agreement pursuant to which GetGo and LMI will be restricted from taking certain actions or failing to take certain actions that could adversely affect the intended U.S. federal income tax treatment of the Distribution and certain related transactions. Under the Tax Matters Agreement, GetGo and LMI may be obligated, in certain cases, to indemnify Citrix against taxes on the Distribution that arise as a result of GetGo’s or LMI’s actions, or failure to act. If the Distribution were to be taxable to Citrix, the liability for payment of such tax by Citrix, or by LMI under the Tax Matters Agreement, could have a material adverse effect on Citrix or LMI, as the case may be. For more information regarding the Tax Matters Agreement, see “Additional Agreements Related to the Separation, The Distribution and The Merger—Tax Matters Agreement.”

Treatment of the Merger

Immediately following the receipt by a U.S. holder of Citrix stock of shares of GetGo common stock in the Distribution, the shares of GetGo common stock so received will be exchanged for shares of LMI common stock pursuant to the Merger. The completion of the Merger is conditioned upon (i) Citrix’s receipt of the Distribution Tax Opinion from Skadden and (ii) Citrix’s and LMI’s receipt of opinions, from Skadden and from Latham & Watkins LLP, respectively, which we refer to as the Citrix Merger Tax Opinion and LMI Merger Tax Opinion, respectively, that, based on customary representations and assumptions set forth in each such opinion, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and that each of LMI, Merger Sub and GetGo will be a party to the reorganization within the meaning of Section 368(b). We refer to the Citrix Merger Tax Opinion and the LMI Merger Tax Opinion collectively as the Merger Tax Opinions. The LMI Merger Tax Opinion will also be based on the assumption that the Contribution and Distribution, taken together, will constitute a “reorganization” within the meaning of Section 368(a) of the Code and each of Citrix and GetGo will be a party to the reorganization within the meaning of Section 368(b) of the Code. As stated above, an opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the conclusions reached in the opinion. Neither Citrix nor LMI

 

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intends to request any ruling from the IRS as to the U.S. federal income tax consequences of the Merger. Consequently, no assurance can be given that the IRS will not challenge the conclusions reflected herein or in the Merger Tax Opinions or that a court would not sustain such a challenge.

Based on and assuming the validity of the Merger Tax Opinions, in general, for U.S. federal income tax purposes:

 

    GetGo will not recognize gain or loss in the Merger;

 

    U.S. holders of GetGo common stock will not recognize gain or loss upon the receipt of LMI common stock pursuant to the Merger, except for any gain or loss recognized with respect to cash received in lieu of a fractional share of LMI common stock;

 

    the aggregate tax basis in the shares of LMI common stock received by a U.S. holder of GetGo common stock pursuant to the Merger (including fractional shares deemed received as described below) will be equal to such holder’s aggregate tax basis in its GetGo common stock surrendered in exchange for the LMI common stock;

 

    a U.S. holder’s holding period for the LMI common stock received in the Merger (including fractional shares deemed received as described below) will include the holding period for the GetGo common stock surrendered in the Merger; and

 

    a U.S. holder that receives cash in lieu of a fractional share of LMI common stock will be treated as having received such fractional share pursuant to the Merger and then as having sold such fractional share for cash. Gain or loss generally will be recognized based on the difference between the amount of cash received in lieu of the fractional share and such holder’s adjusted basis in the fractional share. Such gain or loss will be long-term capital gain or loss if the holder’s holding period for its GetGo common stock, as described above, exceeds one year at the effective time of the Merger. Long-term capital gains generally are subject to preferential rates of U.S. federal income tax for certain non-corporate U.S. holders (including individuals). The deductibility of capital losses is subject to limitations.

Information Reporting and Backup Withholding

If the Contribution and Distribution qualify as a reorganization under Sections 368(a) and 355 of the Code, current Treasury regulations require certain U.S. holders who are “significant distributees” (generally, a U.S. holder that owns at least 5% of the outstanding Citrix stock immediately before the Distribution) and who receive GetGo common stock pursuant to the Distribution to attach to their U.S. federal income tax returns for the taxable year in which the Distribution occurs a statement setting forth certain information with respect to the transaction. Citrix will provide U.S. holders of Citrix common stock with the information necessary to comply with this requirement. Holders should consult their tax advisors to determine whether they are significant distributees required to provide the foregoing statement.

If the Merger qualifies as a reorganization under Section 368(a) of the Code, current Treasury regulations require certain U.S. holders who become “significant holders” of GetGo common stock in the Distribution (generally, a U.S. holder that owns at least 1% of the outstanding GetGo common stock immediately before the Merger) to comply with certain reporting requirements. Significant holders generally will be required to file a statement with their U.S. federal income tax returns for the taxable year in which the Merger occurs setting forth certain information with respect to the transaction. Holders should consult their tax advisors to determine whether they are significant holders required to provide the foregoing statement.

In addition, payments of cash to a holder of GetGo common stock in lieu of fractional shares of LMI common stock pursuant to the Merger may be subject to information reporting, unless the U.S. holder provides proof of an applicable exemption. Such payments that are subject to information reporting may also be subject to

 

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backup withholding (currently at a rate of 28%), unless such holder provides a correct taxpayer identification number (generally on an IRS Form W-9) and otherwise complies with the requirements of the backup withholding rules. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may generally be obtained from the IRS, provided that the required information is properly furnished in a timely manner to the IRS.

THE FOREGOING IS A SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION AND MERGER UNDER CURRENT LAW. THE FOREGOING DOES NOT PURPORT TO ADDRESS ALL U.S. FEDERAL INCOME TAX CONSEQUENCES OR TAX CONSEQUENCES THAT MAY ARISE UNDER THE TAX LAWS OR THAT MAY APPLY TO PARTICULAR CATEGORIES OF STOCKHOLDERS. EACH CITRIX STOCKHOLDER IS ENCOURAGED TO CONSULT ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES OF THE DISTRIBUTION AND MERGER TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS, AND THE EFFECT OF POSSIBLE CHANGES IN TAX LAWS THAT MAY AFFECT THE TAX CONSEQUENCES DESCRIBED ABOVE.

 

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THE TRANSACTION AGREEMENTS

The Merger Agreement

The following is a summary of the material provisions of the Merger Agreement. The summary is qualified in its entirety by the Merger Agreement, dated as of July 26, 2016, which is incorporated by reference in this proxy statement/prospectus-information statement. Stockholders of LMI and Citrix are urged to read the Merger Agreement in its entirety. This summary of the Merger Agreement has been included to provide LMI stockholders and Citrix stockholders with information regarding its terms. The rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information included in this document. This summary is not intended to provide any other factual information about LMI, Merger Sub, Citrix or GetGo. Information about LMI, Merger Sub, Citrix and GetGo can be found elsewhere in this proxy statement/prospectus-information statement and in the documents incorporated by reference into this proxy statement/prospectus-information statement.

The Merger Agreement contains representations and warranties of LMI and Merger Sub that are solely for the benefit of Citrix and GetGo and representations and warranties of Citrix that are solely for the benefit of LMI and Merger Sub. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the Merger Agreement as of a specified date. Moreover, the representations and warranties in the Merger Agreement were made solely for the benefit of the other parties to the Merger Agreement and were used for the purpose of allocating risk among the respective parties. Therefore, stockholders should not treat them as categorical statements of fact. Moreover, these representations and warranties may apply standards of materiality in a way that is different from what may be material to stockholders and were made only as of the date of the Merger Agreement or such other date or dates as may be specified in the Merger Agreement and are subject to more recent developments. Accordingly, information concerning the subject matter of the representations and warranties may have changed since the date of the Merger Agreement, and stockholders should read the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other information about LMI and Citrix and their subsidiaries that the respective companies include in this proxy statement/prospectus-information statement and in other reports and statements they file with the SEC.

The Merger

Under the Merger Agreement and in accordance with the DGCL, at the effective time of the Merger, Merger Sub will merge with and into GetGo. As a result of the Merger, the separate corporate existence of Merger Sub will terminate, and GetGo will continue as the surviving corporation as a wholly owned subsidiary of LMI. In accordance with the DGCL, GetGo will succeed to and assume all the rights, powers and privileges and be subject to all of the obligations of Merger Sub. The certificate of incorporation and bylaws of GetGo in effect immediately prior to the Merger will be amended and restated in their entirety to read as set forth in Annex B and Annex C, respectively, to the Merger Agreement and, as so amended and restated, will be the certificate of incorporation and bylaws of GetGo following completion of the Merger.

Under the terms of the Merger Agreement, the directors of Merger Sub before the Merger will be the initial directors of GetGo after the Merger, and the officers of GetGo before the Merger will be the initial officers of GetGo after the Merger.

Closing; Effective Time

Under the terms of the Merger Agreement, the closing of the Merger will take place on the third business day after all conditions precedent to the Merger (other than those that are to be satisfied or, where permissible under applicable law, waived at the closing, but subject to the satisfaction or waiver of those conditions at closing) have been satisfied or, where permissible under applicable law, waived, or such other date and time as the parties may mutually agree. Under the Separation Agreement, the Distribution will occur on the same day as and prior to the closing of the Merger.

 

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At the closing of the Merger, GetGo and Merger Sub will cause to be filed a certificate of merger with the Secretary of State of the State of Delaware to effect the Merger. The Merger will become effective at the time of filing of the certificate of merger or at such later time as LMI and GetGo agree and specify in the certificate of merger.

Merger Consideration

The Merger Agreement provides that, at the effective time of the Merger, each issued and outstanding share of GetGo common stock (except for any such shares held as treasury stock, which will be cancelled) will be automatically converted into the right to receive one share of LMI common stock. The conversion set forth in the Merger Agreement, after giving effect to the issuance of GetGo shares to Citrix under the Separation Agreement and the distribution of GetGo shares to the stockholders of Citrix in the Distribution, is expected to result in equityholders of Citrix following the Distribution collectively holding approximately 50.1% of the shares of LMI common stock on a fully diluted basis immediately following the Merger.

Pursuant to an adjustment provision in the Merger Agreement, in the event that Citrix would be unable to receive the Distribution Tax Opinion or the Citrix Merger Tax Opinion, or LMI would be unable to receive or provide a copy to Citrix of the LMI Merger Tax Opinion because the percentage of outstanding shares of LMI common stock to be received by stockholders of GetGo with respect to GetGo common stock that was not acquired directly or indirectly pursuant to a plan (or series of related transactions) which includes the Distribution (within the meaning of Section 355(e) of the Code), which we refer to as Qualified GetGo Common Stock, would be less than 50.1% of all outstanding LMI common stock (determined before any adjustment pursuant to this provision), then the aggregate number of shares of LMI common stock into which the shares of GetGo common stock will automatically be converted in the Merger may be increased such that the number of shares of LMI common stock to be received by stockholders of GetGo with respect to Qualified GetGo Common Stock will equal 50.1% of all outstanding LMI common stock. As a result of the adjustment provision, it is possible that LMI could be required to issue additional shares of LMI common stock pursuant to the Merger. However, it is not currently expected that this adjustment provision will be triggered in the Merger. The adjustment mechanism is subject to the requirements that (i) prior an adjustment, Citrix must first provide notice to LMI describing in detail the reasons for the adjustment and must consider in good faith comments provided by LMI and (ii) in certain cases the target amount of cash and cash equivalents required to be on hand at GetGo at the effective time will be increased by an amount equal to $63.92 multiplied by the number of additional shares of LMI common stock to be issued pursuant to the adjustment.

No fractional shares of LMI common stock will be issued pursuant to the Merger. All fractional shares of LMI common stock that a Citrix stockholder entitled to shares of GetGo common stock in the Distribution would otherwise be entitled to receive as a result of the Merger will be aggregated by the exchange agent selected by Citrix, and the exchange agent will cause the whole shares obtained by such aggregation to be sold in the open market or otherwise at then-prevailing market prices no later than five business days after the Distribution. The exchange agent will make available the net proceeds of the sale, after deducting agent fees estimated at $0.05 per share, on a pro rata basis, without interest, as soon as practicable following the Merger to the Citrix stockholders entitled to shares of GetGo common stock in the Distribution that would otherwise be entitled to receive such fractional shares of LMI common stock pursuant to the Merger.

The merger consideration and any cash in lieu of fractional shares paid in connection with the Merger will be reduced by any applicable tax withholding. See “U.S. Federal Income Tax Consequences of the Distribution and Merger—Information Reporting and Backup Withholding” for further information.

Cash and Other Adjustments

The Merger Agreement provides that at the closing of the Merger GetGo will have a target amount of cash and cash equivalents equal to $25.0 million, a target amount of non-cash working capital of $29.0 million, a target amount of deferred revenue of $124.0 million, and no indebtedness. The target amount of cash and cash

 

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equivalents for this purpose will be reduced by the amount of specified assets as of the closing of Merger date as described in the Merger Agreement. Non-cash working capital for this purpose is calculated excluding cash and cash equivalents, deferred revenue, specified employee-related accruals, tax-related assets and liabilities and specified assets and liabilities, all as described in the Merger Agreement. Prior to the closing of the Merger, Citrix will prepare a report setting forth an estimate of GetGo’s cash and cash equivalents, non-cash working capital, deferred revenue and indebtedness as of the date of the closing of the Merger. Based upon these estimates and the amounts by which such estimates exceed or fall short of their target amounts (or in the case of GetGo’s indebtedness, an amount greater than zero, and deferred revenue, an amount exceeding the target), GetGo may be required to distribute cash to Citrix, or Citrix may be required to contribute cash to GetGo, in each case, immediately prior to the closing of the Merger (except that as to non-cash working capital, no closing adjustment will be made if the estimated closing non-cash working capital is within $3.0 million of the target non-cash working capital). Within 90 days after the closing of the Merger, LMI will prepare a report setting forth its own calculations of GetGo’s actual cash and cash equivalents, non-cash working capital, deferred revenue and indebtedness as of the date of the closing of the Merger and, if necessary to correct any discrepancy between the estimates delivered at the closing of the Merger and the calculations included in LMI’s post-closing report, either Citrix will pay to the surviving corporation the amount of any such discrepancy (if the discrepancy at closing was in favor of Citrix) or the surviving corporation will pay to Citrix the amount of such discrepancy (if the discrepancy at closing was in favor of LMI), except that as to non-cash working capital, no post-closing adjustment will be made if the final calculation of non-cash working capital at closing is within $3.0 million of the target non-cash working capital.

Distribution of Per Share Merger Consideration

Prior to the effective time of the Merger, LMI will deposit in a reserve account with an exchange agent appointed by Citrix and reasonably acceptable to LMI, book-entry authorizations representing shares of LMI common stock for the benefit of the Citrix equityholders entitled to shares of GetGo common stock in the Distribution and for distribution in the Merger upon conversion of the GetGo common stock. At the effective time of the Merger, all issued and outstanding shares of GetGo common stock (except for such shares held as treasury stock, which will be cancelled) will be automatically converted into the right to receive shares of LMI common stock as described above under “—Merger Consideration.” Immediately thereafter, the exchange agent will distribute to each Citrix equityholder entitled to shares of GetGo common stock in the Distribution book-entry authorizations representing the number of whole shares of LMI common stock that such equityholder is entitled to receive in the Merger. The exchange agent will also distribute to each Citrix stockholder entitled to shares of GetGo common stock in the Distribution and who would otherwise be entitled to a fractional shares of LMI common stock in connection with the Merger, cash in lieu of fractional shares of LMI common stock as described above under “—Merger Consideration”. See “—Distributions With Respect to Shares of LMI Common Stock after the Effective Time” below for a discussion of other distributions with respect to shares of LMI common stock.

Treatment of Citrix Equity Awards

Following the effective time of the Merger, all outstanding Citrix stock options held by GetGo employees will remain outstanding as options to purchase Citrix shares in accordance with and subject to the terms of the applicable options. In addition, all outstanding Citrix performance-based restricted stock units held by GetGo employees with respect to Citrix’s 2014 through 2016 performance period will remain outstanding and continue to constitute the right to earn shares of Citrix common stock based on the actual performance of Citrix during the 2014 through 2016 performance period in accordance with the terms of the applicable awards, except that the Merger and the related transactions will not constitute a termination of employment for purposes of the Citrix restricted stock units. At the effective time of the Merger, all other outstanding Citrix restricted stock units held by GetGo employees will, after giving effect to any applicable accelerated vesting provisions, be cancelled and substituted with LMI restricted stock units. The number of LMI shares subject to each substituted restricted stock unit will equal the number of Citrix shares subject to the corresponding Citrix restricted stock unit as of immediately before the effective time of the Merger multiplied by the adjustment ratio described below and rounded down to the nearest whole LMI share.

 

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Citrix restricted stock units that are subject to performance-based vesting conditions immediately before the effective time of the Merger (other than Citrix restricted stock units with respect to the 2014 through 2016 performance period, which will continue to constitute the right to earn shares of Citrix common stock as described above) will be adjusted based on an interim performance assessment as if the applicable performance period ended on the day immediately prior to the effective time of the Merger and will be prorated based on the portion of the performance period which has then elapsed, rounded down to the nearest whole share. LMI restricted stock units issued in substitution for these Citrix restricted stock units will have the same terms and conditions as applied to the corresponding Citrix restricted stock units, as adjusted, immediately before the effective time of the Merger except that the LMI restricted stock units will not be subject to performance-based vesting conditions and will instead be subject to cliff vesting on the final day of the applicable performance period. LMI restricted stock units issued in substitution for Citrix restricted stock units that were subject to time-based vesting conditions immediately before the effective time of the Merger will have the same terms and conditions as applied to the corresponding Citrix restricted stock units immediately before the effective time of the Merger.

The adjustment ratio to be used for determining the number of LMI shares subject to substituted restricted stock units will equal the quotient obtained by dividing the volume-weighted average per-share trading price of Citrix common stock on the five trading days immediately prior to the date upon which the effective time of the Merger occurs by the volume-weighted average per-share trading price of LMI common stock on the five trading days immediately following the date upon which the effective time of the Merger occurs.

Distributions With Respect to Shares of LMI Common Stock After the Effective Time

No dividend or other distributions declared or made after the effective time of the Merger with respect to LMI common stock will be paid with respect to any shares of LMI common stock that are not able to be distributed promptly after the effective time of the Merger, whether due to a legal impediment to such distribution or otherwise. Subject to the effect of applicable laws, following the distribution of any previously undistributed shares of LMI common stock that are able to be distributed promptly following the effective time of the Merger, the following amounts will be paid to the record holder of such shares of LMI common stock, without interest:

 

    at the time of the distribution of such previously undistributed shares, the amount of cash payable in lieu of fractional shares of LMI common stock to which such holder is entitled pursuant to the Merger Agreement and the amount of dividends or other distributions with a record date after the effective time of the Merger theretofore paid with respect to such whole shares of LMI common stock; and

 

    at the appropriate payment date, the amount of dividends or other distributions with a record date after the effective time of the Merger but prior to the distribution of such whole shares of LMI common stock and a payment date subsequent to the distribution of such whole shares of LMI common stock.

Termination of Exchange Fund

Any portion of the amounts deposited with the exchange agent under the Merger Agreement that remains undistributed to the Citrix stockholders entitled to shares of GetGo common stock in the Distribution on the one-year anniversary of the effective time of the Merger will be delivered to LMI, and any Citrix stockholders entitled to shares of GetGo common stock in the Distribution who have not received shares of LMI common stock as described above may thereafter look only to LMI for payment of the shares of LMI common stock as merger consideration under the Merger Agreement or cash in lieu of fractional shares with respect to LMI common stock (subject to any abandoned property, escheat or similar law).

Post-Closing LMI Board of Directors and Committees

The Merger Agreement provides that the LMI Board of Directors will take all actions necessary to cause, effective as of immediately following the effective time of the Merger, the number of directors comprising the

 

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LMI Board of Directors to consist of nine directors, and to cause four individuals designated by Citrix to be appointed to the LMI Board of Directors as of the effective time of the Merger. The Citrix director designees will be assigned to Class I, Class II and Class III of the LMI Board of Directors as follows:

 

    two director designees will be appointed to the class of directors whose terms expire at the first annual meeting of LMI stockholders following the effective time of the Merger; and

 

    one director designee will be appointed to each of the other two classes of directors.

The Citrix director designees are currently expected to be Robert Calderoni, Jesse Cohn, Peter Sacripanti and David Henshall. However, the appointment of Jesse Cohn to the LMI Board of Directors is conditioned upon the execution of a Cooperation Agreement by Elliott International Capital Advisors Inc. and certain of its affiliates, the form of which is attached to the Merger Agreement. See “Additional Agreements Related to the Separation, the Distribution and the Merger—Cooperation Agreement.”

Pursuant to the Merger Agreement, the LMI Board of Directors has agreed to take all action necessary to appoint at least one Citrix director designee to each of the nominating and corporate governance committee, the audit committee, the compensation committee and any other standing committee of the LMI Board of Directors. In addition, the Merger Agreement provides that the LMI Board of Directors will establish an operating committee to be effective immediately following the Merger and for a period of at least two years thereafter. This committee will be comprised of two Citrix designees and two current members of the LMI Board of Directors, and will be authorized, among other things, to design and oversee a plan to achieve the synergies expected to result from the Merger.

Michael K. Simon, LMI’s former Chief Executive Officer and current Chairman of the LMI Board of Directors, will remain in place as Chairman of the LMI Board of Directors following the completion of the Transactions. William R. Wagner, LMI’s current President and Chief Executive Officer, will also remain on the LMI Board of Directors. The other three directors designated by LMI will be named at a later date.

LMI’s current President and Chief Executive Officer, William R. Wagner, and current Chief Financial Officer, Edward K. Herdiech, will continue in their roles. Certain members of the GetGo management team are expected to join LMI as well.

Stockholders’ Meeting

Under the terms of the Merger Agreement, LMI is required to, as soon as practicable following the date on which the SEC has cleared the effectiveness of this proxy statement/prospectus-information statement, call a meeting of its stockholders for the purpose of voting upon the Share Issuance. LMI is required to solicit proxies from its stockholders in favor of the approval of the Share Issuance and to take all other action reasonably necessary or advisable to secure the approval of LMI’s stockholders of the Share Issuance.

Representations and Warranties

In the Merger Agreement, each of LMI and Merger Sub has made representations and warranties to Citrix and GetGo relating to LMI, Merger Sub and their business as of the date of the Merger Agreement, and Citrix has made representations and warranties to LMI and Merger Sub relating to Citrix and the GoTo Business as of the date of the Merger Agreement, which representations and warranties will also be made, subject to certain materiality, “material adverse effect,” knowledge and other qualifications, as of the date of the closing of the Merger (except for certain representations and warranties that by their terms address matters only as of a specified date, which are made only as of such specified date), as described below. These representations and warranties relate to, among other things:

 

    due organization, good standing and qualification;

 

    capital structure;

 

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    subsidiaries;

 

    authority to enter into the Merger Agreement and other Transaction Documents;

 

    absence of conflicts with or violations of governance documents, other obligations or laws;

 

    board of director and stockholder approvals;

 

    governmental consents and approvals;

 

    financial statements and the absence of undisclosed liabilities;

 

    absence of certain changes or events;

 

    absence of investigations or litigation;

 

    accuracy of information supplied for use in LMI’s registration statement, which is a part of this proxy statement/prospectus-information statement and the registration statement to be filed by GetGo with respect to the Separation and the Distribution;

 

    compliance with applicable laws;

 

    intellectual property, information technology and data security matters;

 

    interests in real property;

 

    employee benefit matters and labor matters;

 

    tax matters;

 

    material contracts;

 

    environmental matters; and

 

    payment of fees to brokers or finders in connection with the Transactions.

LMI and Merger Sub also made representations and warranties to Citrix and GetGo relating to the receipt by the LMI Board of Directors of an opinion of LMI’s financial advisor, the required vote of LMI stockholders on the transactions contemplated by the Merger Agreement, including the Share Issuance, and the absence of any stockholder rights plan, anti-takeover plan or other similar device of LMI in effect. Citrix also made representations and warranties to LMI relating to the sufficiency of assets to be transferred to the GoTo Business in connection with the Separation as well as the relationships between the GoTo Business and Citrix and any obligations between GetGo and Citrix following the closing of the Merger.

Many of the representations and warranties contained in the Merger Agreement are subject to a “material adverse effect” standard (that is, they will not be deemed to be untrue or incorrect unless their failure to be true or correct, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on LMI, Citrix or GetGo, as applicable), knowledge qualifications, or both, and none of the representations and warranties will survive the effective time of the Merger. The Merger Agreement does not contain any post-closing indemnification obligations with respect to these matters.

Under the Merger Agreement, a material adverse effect means, with respect to LMI, any event, circumstance, change in or effect on LMI and its subsidiaries that, individually or in the aggregate, is or would reasonably be expected to be materially adverse to the business, results of operations or financial condition of LMI and its subsidiaries, taken as a whole and, with respect to GetGo, any event, circumstance, change in or effect on the GoTo Business that, individually or in the aggregate, is or would reasonably be expected to be materially adverse to the business, results of operations or the financial condition of the GoTo Business taken as a whole. However, none of the following, either alone or in combination, will be deemed either to constitute, or be taken into account in determining whether there is, a material adverse effect:

 

    events, circumstances, changes or effects that generally affect the industries or segments in which LMI and its subsidiaries, or the GoTo Business, as applicable, operate;

 

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    general business, economic, or political conditions (or changes therein);

 

    events, circumstances, changes or effects affecting the financial, credit or securities markets in the United States or in any other country or region in the world, including changes in interest rates or foreign exchange rates;

 

    events, circumstances, changes or effects arising out of, or attributable to, the announcement of the execution of, or the consummation of the transactions contemplated by, the Merger Agreement, the Separation Agreement (in the case of GetGo) or any ancillary agreement, including with respect to employees, customers, suppliers, distributors, financing sources, landlords, licensors or licensees;

 

    events, circumstances, changes or effects arising out of, or attributable to, acts of armed hostility, sabotage, terrorism or war (whether or not declared), including any escalation or worsening thereof;

 

    events, circumstances, changes or effects arising out of, or attributable to, earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides or other natural disasters, weather-related conditions, explosions or fires, or any force majeure events;

 

    any events, circumstances, changes or effects arising out of, or attributable to, changes (or proposed changes) or modifications in GAAP, other applicable accounting standards or applicable law or the interpretation or enforcement thereof; or

 

    events, circumstances, changes or effects arising out of, or attributable to, the failure to meet any internal or other estimates, expectations, forecasts, plans, projections or budgets for any period (but not, in each case, the underlying cause or factors contributing to, any such changes).

Notwithstanding the foregoing, none of the categories of exclusions described in the first, second, third, fifth, sixth or seventh bullets above will apply to the extent that such event, circumstance, change or effect has a disproportionate effect on LMI’s and its subsidiaries’ business, taken as a whole, or the GoTo Business, taken as a whole, as compared with other participants in the industries in which they operate.

Conduct of Business Pending the Merger

Each of the parties to the Merger Agreement has undertaken to perform customary covenants in the Merger Agreement that place restrictions on it and its subsidiaries until the effective time of the Merger. In general, each of LMI and Citrix (with respect to GetGo and the GoTo Business) has agreed that, prior to the effective time of the Merger, except as contemplated by the Merger Agreement or the other Transaction Documents (including with respect to the Reorganization), required by applicable law or consented to by the other party thereto (which consent may not be unreasonably withheld, conditioned or delayed), subject to certain agreed exceptions, it will conduct its business in the ordinary course in all material respects.

In addition, LMI has agreed that, prior to the effective time of the Merger, except as contemplated by the Merger Agreement or the other Transaction Documents, required by applicable law, or consented to by Citrix (which consent may not be unreasonably withheld, conditioned or delayed), subject to certain agreed exceptions set forth in LMI’s disclosure schedules to the Merger Agreement, LMI will not, and will cause its subsidiaries not to, take any of the following actions:

 

    issue, sell, pledge, dispose of, grant or encumber, or authorize any such actions with respect to, any shares of capital stock of, or any other ownership interests in LMI or any of its subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any “phantom” interest) of LMI or any of its subsidiaries subject to certain exceptions, including with respect to the issuance of equity awards to employees in the ordinary course of business and upon the exercise of settlement of equity awards outstanding as of the date of the Merger Agreement;

 

   

sell, pledge, dispose of, encumber (other than permitted encumbrances under the Merger Agreement) or authorize any such actions with respect to any material assets of the businesses of LMI and its

 

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subsidiaries, except in the ordinary course of business and consistent with past practice and dispositions of obsolete or worn out assets that are no longer useful in the operation or conduct of the business of LMI or its subsidiaries;

 

    amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of LMI or any of its subsidiaries, except for the Charter Amendment;

 

    declare, set aside, make or pay any dividend or other distribution with respect to any of its capital stock (whether in cash, stock, property or otherwise), except for cash dividends or distributions by any wholly owned subsidiary and one or more special cash dividends in an aggregate amount of up to $1.50 per share of LMI common stock as described in “—LMI Special Dividends” below.

 

    adjust, reclassify, combine, split, subdivide or redeem, or purchase or otherwise directly or indirectly acquire any of its capital stock;

 

    other than in the ordinary course of business and consistent with past practice or as required by existing compensation or benefit programs: acquire or dispose of (including by merger, consolidation or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division, business unit or material assets thereof having a value in excess of $50.0 million individually or in the aggregate (provided that no such acquisition or disposition, whether alone or in combination, is significant to LMI such that pro forma financial statements would be required to be included in the registration statement contained in this proxy statement/prospectus-information statement under Regulation S-X) or make any loans or advances or capital contribution to, or investment in, any entity other than LMI or a subsidiary of LMI, except for travel advances to employees in the ordinary course of business consistent with past practice;

 

    other than in the ordinary course of business and consistent with past practice or as required by existing compensation or benefit programs, increase the compensation or benefits payable to any employee of LMI or its subsidiaries, materially amend or supplement any bonus, equity incentive, deferred compensation or other employee benefit plan, enter into or amend any employment, consulting, change in control, retention, severance or termination agreement with any employee of LMI, terminate the employment (other than for cause) of or hire or promote any individual who is an officer of LMI or its subsidiaries at the vice president level or above, hire (subject to certain exceptions) any other employee of LMI and its affiliates or enter into any collective bargaining agreement;

 

    change any method of accounting or accounting practice or policy used by LMI as it relates to the businesses of LMI and its subsidiaries, other than such changes as are required by GAAP or a governmental authority;

 

    other than in the ordinary course of business and consistent with past practice, make any change (or file any such change) in any method of tax accounting or any annual tax accounting period, make, change or rescind any tax election, settle or compromise any tax liability or consent to any claim or assessment relating to taxes, file any amended tax return or claim for refund, enter into any closing agreement relating to taxes or waive or extend the statute of limitations in respect of taxes; in each case, to the extent that doing so would reasonably be expected to result in a material incremental cost to Citrix or any of its subsidiaries;

 

    pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the financial statements set forth in reports filed or furnished by LMI to the SEC or incurred in the ordinary course of business and consistent with past practice;

 

   

incur, guarantee or assume or otherwise become responsible for any indebtedness for borrowed money other than (i) indebtedness incurred under LMI’s current credit facilities; (ii) indebtedness solely between or among LMI and its subsidiaries; (iii) refinancing, replacements, extensions and renewals of

 

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existing indebtedness entered into in the ordinary course of business consistent with past practice; and (iv) letters of credit or similar arrangements entered into in the ordinary course of business consistent with past practice;

 

    commence or settle any action or investigation other than in the ordinary course of business and consistent with past practice;

 

    enter into, extend, materially amend, cancel or terminate any material contract of LMI other than in the ordinary course of business and consistent with past practice;

 

    abandon, disclaim, sell, assign or grant any security interest in, to or under any intellectual property material to LMI, or grant to any third party any license, or enter into any covenant not to sue, with respect to any intellectual property material to LMI, in each case, except for non-exclusive licenses granted to customers in the ordinary course of business and consistent with past practice and on LMI’s (or a subsidiary’s) standard form of customer contract without material modification of any provisions relating to any intellectual property material to LMI;

 

    fail to exercise any rights of renewal with respect to any material real property leased, subleased, licensed or otherwise occupied by LMI or any of its subsidiaries that by its terms would otherwise expire unless LMI (or, if the lessee is a subsidiary of LMI, such subsidiary) determines in good faith that a renewal would not be in the best interests of LMI;

 

    fail to maintain (with insurance companies substantially as financially responsible as its existing insurers) insurance in at least such amounts and against at least such risks and losses as are consistent in all material respects with the past practice of LMI and its subsidiaries; or

 

    announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Citrix has agreed that, prior to the effective time of the Merger, except as contemplated by the Merger Agreement or the other Transaction Documents, required by applicable law or consented to by LMI (which consent may not be unreasonably withheld, conditioned or delayed), subject to certain agreed exceptions set forth in Citrix’s disclosure schedules to the Merger Agreement, Citrix will not, and will cause its subsidiaries not to, to the extent relating to the GoTo Business, take any of the following actions:

 

    issue, sell, pledge, dispose of, grant or encumber, or authorize any such actions with respect to, any shares of capital stock of, or any other ownership interests in GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization), or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any “phantom” interest) of GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization);

 

    sell, pledge, dispose of, encumber (other than permitted encumbrances under the Merger Agreement) or authorize any such actions with respect to any material assets of the GoTo Business, except in the ordinary course of business and consistent with past practice and dispositions of obsolete or worn out assets that are no longer useful in the operation or conduct of the GoTo Business;

 

    amend or restate the certificate of incorporation or bylaws (or similar organizational documents) of GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization) other than an amendment to the certificate of incorporation of GetGo to increase the number of authorized shares of GetGo common stock;

 

    adjust, reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of GetGo or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization;

 

   

acquire or dispose of any corporation, partnership, other business organization or any division thereof; or make any loans or advances or capital contribution to, or investment in, any individual or entity

 

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other than GetGo (or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization), except for travel advances to employees in the ordinary course of business consistent with past practices;

 

    issue equity awards that, pursuant to the Merger Agreement, are required to be substituted with equity awards of LMI;

 

    other than in the ordinary course of business and consistent with past practice or as required by existing compensation or benefit programs: increase the compensation or benefits payable to any employee of Citrix or its affiliates, materially amend or supplement any bonus, equity incentive, deferred compensation or other employee benefit plan, enter into or amend any employment, consulting, change in control, retention, severance or termination agreement with any employee of Citrix performing services primarily related to the GoTo Business, which we refer to herein as a GetGo Employee, terminate the employment (other than for cause) of or hire or promote any individual who is or who will, upon consummation of the Reorganization, be an officer of GetGo at the vice president level or above or enter into any collective bargaining agreement;

 

    subject to certain exceptions, hire, transfer internally or otherwise alter the duties and responsibilities of any employee of Citrix and its affiliates in a manner that would affect whether such employee is or is not classified as a GetGo Employee;

 

    change any method of accounting or accounting practice or policy used by Citrix as it relates to the GoTo Business, other than such changes as are required by GAAP or a governmental authority;

 

    other than in the ordinary course of business and consistent with past practice, make any change (or file any such change) in any method of tax accounting or any annual tax accounting period, make, change or rescind any tax election, settle or compromise any tax liability or consent to any claim or assessment relating to taxes, file any amended tax return or claim for refund, enter into any closing agreement relating to taxes or waive or extend the statute of limitations in respect of taxes; in each case, to the extent that doing so would reasonably be expected to result in a material incremental cost to LMI, GetGo or any of their respective subsidiaries;

 

    pay, discharge or satisfy any material claim, liability or obligation, other than the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in certain financial statements provided to LMI or subsequently incurred in the ordinary course of business and consistent with past practice;

 

    incur, guarantee or assume or otherwise become responsible for any indebtedness for borrowed money other than (i) indebtedness solely between or among Citrix and any of its subsidiaries that will be repaid prior to the Distribution; and (ii) letters of credit or similar arrangements entered into in the ordinary course of business consistent with past practice;

 

    commence or settle any action, claim, litigation, investigation or similar proceeding other than (i) in the ordinary course of business and consistent with past practice or (ii) settlements not involving any material obligations following the closing of the Merger of GetGo or any other subsidiary of Citrix that Citrix will contribute to GetGo in connection with the Reorganization;

 

    other than in the ordinary course of business and consistent with past practice, enter into, extend, materially amend, cancel or terminate any material contract of GetGo;

 

    abandon, disclaim, sell, assign or grant any security interest in, to or under any intellectual property material to the GoTo Business, or grant to any third party any license, or enter into any covenant not to sue, with respect to any intellectual property material to the GoTo Business, in each case, except for non-exclusive licenses granted to customers in the ordinary course of business and consistent with past practice and on Citrix’s (or a subsidiary’s) standard form of customer contract without material modification of any provisions relating to any intellectual property material to the GoTo Business;

 

    fail to exercise any rights of renewal with respect to certain material real property leased by Citrix that by its terms would otherwise expire;

 

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    fail to maintain (with insurance companies substantially as financially responsible as its existing insurers) insurance in at least such amounts and against at least such risks and losses as are consistent in all material respects with Citrix’s past practice with respect to the GoTo Business;

 

    adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization or other material reorganization;

 

    amend or modify the Reorganization or fail to implement the Reorganization consistent with the plan set forth in the Separation Agreement, except in each case as otherwise permitted under the terms of the Separation Agreement; or

 

    announce an intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.

Tax Matters

The Merger Agreement contains certain additional representations, warranties and covenants relating to the preservation of the intended tax treatment of the Contribution, the Distribution and the Merger. Additional representations, warranties and covenants relating to the intended tax treatment of the Transactions are contained in the Tax Matters Agreement. Indemnification for taxes generally is governed by the terms, provisions and procedures described in the Tax Matters Agreement. See “Additional Agreements Related to the Separation, the Distribution and the Merger—Tax Matters Agreement” beginning on page 130.

SEC Filings

LMI, Citrix and GetGo agreed to jointly prepare (i) this proxy statement/prospectus-information statement and the registration statement contained herein with respect to the issuance of shares of LMI common stock pursuant to the Merger and (ii) the registration statement for the distribution of GetGo common stock in the Distribution, and to use reasonable best efforts to have each registration statement declared effective by the SEC as promptly as practicable after being filed.

LMI is required under the terms of the Merger Agreement to use its reasonable best efforts to mail this proxy statement/prospectus-information statement to its stockholders as promptly as practicable after the SEC declares this proxy statement/prospectus-information statement effective.

LMI Special Dividends

The Merger Agreement provides that LMI may declare one or more special cash dividends in an aggregate amount of up to $1.50 per share of LMI common stock to holders of record of the issued and outstanding shares of LMI common stock prior to the effective time of the Merger (regardless of whether the actual payment date for any special dividend is before, on or after the effective time of the Merger); provided that, if the Merger does not close prior to certain dates, LMI may declare additional special cash dividends as follows: (i) in the event the closing of the Merger does not occur on or before March 31, 2017, LMI may pay an additional dividend of $0.50 per share with respect to the completed first quarter of calendar year 2017; (ii) in the event the closing of the Merger does not occur on or before June 30, 2017, LMI may pay an additional dividend of $0.50 per share with respect to the completed second quarter of calendar year 2017; and (iii) in the event the closing of the Merger does not occur on or before September 30, 2017, LMI may pay an additional dividend of $0.50 per share with respect to the completed third quarter of calendar year 2017. The total amount of special dividends LMI is permitted to pay pursuant to the Merger Agreement is up to $3.00 per share, $1.50 of which may only be declared if the Merger does not close prior to certain dates.

On July 26, 2016, the LMI Board of Directors declared a cash dividend of $0.50 per share of LMI common stock, payable to LMI’s stockholders of record as of August 8, 2016. This dividend was paid on August 26, 2016. On October 27, 2016, the LMI Board of Directors declared a cash dividend of $0.50 per share of LMI common stock, payable to LMI’s stockholders of record as of November 7, 2016. The dividend was paid on November 22, 2016.

 

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Regulatory Matters

The Merger Agreement provides that each party to the Merger Agreement will use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, and to assist and cooperate with the other parties in doing or causing to be done, all things necessary, proper or advisable under the Merger Agreement and applicable laws to consummate the Merger and the other transactions contemplated by the Merger Agreement as soon as practicable after the date thereof, including preparing and filing as promptly as practicable all documentation to effect and taking all reasonable steps necessary to obtain all necessary applications, notices, petitions and filings to obtain any required consents.

HSR

Each party to the Merger Agreement has also agreed to make its respective filings under the HSR Act within ten business days of the execution of the Merger Agreement and, as promptly as practicable, to make any other filings required or advisable under any competition laws with respect to the transactions contemplated by the Merger Agreement and to supply the appropriate governmental authorities any additional information and documentary material that may be requested pursuant to the HSR Act and such other laws as promptly as practicable. LMI and Citrix filed the requisite notification and report forms with the U.S. Federal Trade Commission and Antitrust Division in August 2016 and received notice of the early termination of the waiting period under the HSR Act in September 2016. The parties have agreed to use reasonable best efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act, which waiting periods were terminated in September 2016, and the receipt of approvals under other applicable competition laws as soon as practicable.

In addition, LMI has agreed to, and to cause its subsidiaries to, use reasonable best efforts to avoid or eliminate each and every impediment under any antitrust, competition or trade regulation law that may be asserted by any governmental authority with respect to the Merger so as to enable the closing of the Merger to occur as promptly as practicable, including proposing, negotiating, committing to, and effecting, by consent decree, hold separate order, or otherwise, the sale, divestiture or disposition of such assets or businesses of GetGo (or GetGo’s subsidiaries) or LMI (or LMI’s subsidiaries), as applicable, in each case, as may be required in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order, or other order in any suit or proceeding, which would otherwise have the effect of preventing the closing of the Merger (provided that the effectiveness of any such sale, divestiture or disposition or action or commitment must be contingent on consummation of the Merger and no such action that affects LMI or GetGo may be taken without the consent of LMI). However, (i) LMI will not be required to take any such action that would require sales, divestitures or dispositions of any assets, properties or businesses if such assets, properties or businesses account for more than $40.0 million in estimated, or, if applicable, actual revenues for the fiscal year ended December 31, 2016 and (ii) no other such actions will be required if such actions would reasonably be expected, individually or in the aggregate, to result in a reduction in annual revenue to LMI and its subsidiaries (including GetGo and its subsidiaries) of more than $40.0 million.

In addition, LMI agreed to defend and litigate on the merits through a lower-court ruling any action, claim, litigation, investigation or similar proceeding by any party in order to avoid entry of, or to have vacated or terminated, any decree, order or judgment (whether temporary, preliminary or permanent) that would prevent the closing of the Merger prior to the agreed upon outside date.

Communications Regulatory Approvals

Under the Communications Act, and as a condition to, and before the completion of, the transactions contemplated by the Merger Agreement and the Separation Agreement, the FCC must approve the transfer of control of authorizations of certain Citrix subsidiaries to LMI. In connection with such approval, the FCC must determine whether LMI is qualified to control the FCC authorizations and whether such transfer of control is consistent with the Communications Act and FCC rules and would serve the public interest, convenience and necessity. The application for FCC consent to the transaction was filed in August 2016 and FCC consent was received in September 2016.

 

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In addition, the Transactions require the approval of certain state public utility commissions or similar state authorities that have jurisdiction over authorizations to provide telecommunications services held by Grasshopper Group, LLC, Citrix Communications LLC, and Citrix Communications Virginia LLC, which we refer to as the Citrix Telecommunications Subsidiaries. As a general matter, those state commissions, consistent with their states’ laws, must determine whether LMI is qualified to control the state authorizations and whether the transfer of control of such authorizations is consistent with the public interest, convenience and necessity. With respect to the state approvals, Citrix and LMI have agreed that satisfaction of the relevant closing condition requires evidence of consent, approval, or other authorization, if required, from state commissions covering not less than 90% of the aggregate number of audio service subscribers of the Citrix Telecommunications Subsidiaries.

Citrix and LMI each have agreed to use commercially reasonable efforts to (i) obtain consent of the FCC, which was obtained in September 2016, and (ii) obtain all approvals, authorizations, or consents from, and submit all notices to, the state commissions having jurisdiction over the Transactions.

No Solicitation of Transactions

The Merger Agreement contains provisions restricting LMI’s ability to seek an alternative transaction. Under these provisions, LMI agrees that it will not, and will cause its subsidiaries and representatives not to, directly or indirectly:

 

    solicit, initiate or knowingly encourage, or take any other action to knowingly facilitate, any inquiries or the making of any proposal or offer (including any proposal or offer to LMI’s stockholders), with respect to any Competing Parent Transaction (as defined below);

 

    enter into, maintain, continue or otherwise engage or participate in any discussions or negotiations with any person or entity in furtherance of such inquiries or to obtain a proposal or offer with respect to a Competing Parent Transaction;

 

    agree to, approve, endorse, recommend or consummate any Competing Parent Transaction;

 

    enter into any agreement with respect to a Competing Parent Transaction;

 

    take any action to approve a third party becoming an “interested stockholder”, or to approve any transaction, for purposes of Section 203 of the DGCL; or

 

    resolve, propose or agree to do any of the foregoing.

The Merger Agreement provides that the term “Competing Parent Transaction” means any transaction or series of related transactions (other than the Merger) that constitutes, or is reasonably likely to lead to:

 

    any merger, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution or other similar transaction involving LMI or any of its subsidiaries, the assets of which constitute or represent more than 15% of the total revenue, operating income or fair market value of the assets of LMI and its subsidiaries, taken as a whole;

 

    any sale, lease, license, transfer or other disposition of, or joint venture involving, assets or businesses that constitute or represent more than 15% of the total revenue, operating income or fair market value of the assets of LMI and its subsidiaries, taken as a whole;

 

    any sale, exchange, transfer or other disposition to any individual or entity of more than 15% of any class of equity securities, or securities convertible into or exchangeable for equity securities, of LMI;

 

    any tender offer or exchange offer that, if consummated, would result in any individual or entity becoming the beneficial owner of more than 15% of any class of equity securities of LMI; or

 

    any combination of the foregoing.

 

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LMI also agreed to cease, and to cause its subsidiaries and representatives to cease, any discussions or negotiations conducted with any person or entity with respect to a Competing Parent Transaction prior to the date of signing of the Merger Agreement.

Under the Merger Agreement, LMI must promptly (and in any event within 24 hours after LMI attains knowledge thereof) notify Citrix of the receipt of any proposal, inquiry, offer or request with respect to a Competing Parent Transaction as well of any request for information relating to LMI or its affiliates in connection therewith or for access to the business, properties, assets, books or records of LMI or its affiliates with respect thereto. The notice must include the identity of the person or entity making the proposal, inquiry, offer or request and a description of the proposal, inquiry, offer or request, including the material terms and conditions of any proposed Competing Parent Transaction and copies of any written materials received by LMI in connection with the foregoing. LMI must also keep Citrix reasonably informed of the status and material details related to such matters. LMI has also agreed that it will substantially simultaneously provide to Citrix any non-public information concerning LMI that may be made available to any other person or entity in response to such a proposal, inquiry, offer or request unless such information has previously been provided or made available to Citrix.

Notwithstanding the covenants described in the foregoing paragraphs of this section, at any time prior to the receipt of the approval of LMI stockholders for the Share Issuance, LMI is permitted to furnish information to, and enter into discussions and negotiations with, a person or entity who has made an unsolicited, written, bona fide proposal or offer with respect to a Competing Parent Transaction that did not arise or result from a breach of the foregoing non-solicitation provisions by LMI if, prior to furnishing such information and entering into such discussions, the LMI Board of Directors has: (1) determined, in its good faith judgment after consulting with a financial advisor of nationally recognized reputation and outside legal counsel, that such proposal or offer constitutes, or is reasonably likely to lead to, a Superior Proposal (which is defined in the following paragraph), and, after consulting with outside legal counsel, that the failure to furnish such information to, or enter such discussions with, the individual or entity who made such proposal or offer with respect to such Competing Parent Transaction would be a breach of the fiduciary duties of the LMI Board of Directors under applicable law; (2) provided written notice to Citrix of its intent to furnish information or enter into discussions with such individual or entity prior to taking the first of any such action with respect to any given individual or entity; and (3) obtained from such individual or entity a confidentiality agreement (a) on terms no less favorable in the aggregate to LMI than those contained in the confidentiality agreement between LMI and Citrix and (b) that does not include any provision granting such individual or entity exclusive rights to negotiate with LMI or having the effect of prohibiting LMI from satisfying its obligations under the Merger Agreement, and, immediately upon its execution, delivered to Citrix a copy of such confidentiality agreement.

The Merger Agreement provides that the term “Superior Proposal” means an unsolicited written bona fide offer or proposal with respect to a Competing Parent Transaction by a third party (except the references therein to 15% being replaced by 50%) that the LMI Board of Directors has determined in its good faith judgment (after consultation with a financial advisor of nationally recognized reputation and outside legal counsel) and taking into account all legal, financial and regulatory and other aspects of the proposal, including availability of financing, and any changes to the terms of the Merger Agreement proposed in writing by Citrix in response to such proposal, to be (a) more favorable to LMI’s stockholders, from a financial point of view, than the Merger; and (b) reasonably expected to be consummated.

The Merger Agreement similarly contains provisions restricting Citrix’s ability to seek an alternative transaction. Under these provisions, Citrix agrees that it will not, and will cause its subsidiaries and representatives not to, directly or indirectly:

 

    solicit, initiate or knowingly encourage, or take any other action to knowingly facilitate, any inquiries or the making of any proposal or offer (including any proposal or offer to LMI’s stockholders), with respect to any Competing SpinCo Transaction (as defined below);

 

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    enter into, maintain, continue or otherwise engage or participate in any discussions or negotiations with any person or entity in furtherance of such inquiries or to obtain a proposal or offer with respect to a Competing SpinCo Transaction;

 

    agree to, approve, endorse, recommend or consummate any Competing SpinCo Transaction;

 

    enter into any agreement with respect to a Competing SpinCo Transaction; or

 

    resolve, propose or agree to do any of the foregoing.

Citrix also agreed to cease, and to cause its subsidiaries and representatives to cease, any discussions or negotiations conducted with any person or entity with respect to a Competing SpinCo Transaction prior to the date of signing of the Merger Agreement.

Under the Merger Agreement, Citrix must promptly (and in any event within 24 hours after Citrix attains knowledge thereof) notify LMI of the receipt of any proposal, inquiry, offer or request with respect to a Competing SpinCo Transaction as well as the receipt of any request for discussions and negotiations and any request for information relating to Citrix or its affiliates with respect to the GoTo Business, or for access to the business, properties, assets, books or records of Citrix or any of its affiliates with respect to the GoTo Business.

The Merger Agreement provides that the term “Competing SpinCo Transaction” means any transaction or series of related transactions (other than the Merger, the Reorganization, the Separation and other than certain asset sales, licenses and transfers in the ordinary course of business) that constitutes, or is reasonably likely to lead to, any merger, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution, sale, lease, license, transfer or other disposition or other similar transaction involving the GoTo Business or a material portion of the assets of the GoTo Business, taken as a whole. However, a Competing SpinCo Transaction does not include any other transaction involving Citrix or its subsidiaries or the assets or businesses thereof (other than the GoTo Business).

Board Recommendation

LMI has agreed in the Merger Agreement that neither the LMI Board of Directors, nor any committee thereof will (each action constituting a Change in Recommendation):

 

    withdraw, qualify or modify, amend or fail to make or publicly propose to withdraw, qualify or modify or amend its recommendation that LMI’s stockholders vote in favor of the Share Issuance, which we refer to as the LMI Board Recommendation;

 

    make any public statement inconsistent with the LMI Board Recommendation; or

 

    approve or adopt, or recommend, the approval or adoption of, or publicly propose to approve or adopt a Competing Parent Transaction.

Notwithstanding the foregoing, the LMI Board of Directors may, at any time prior to receiving stockholder approval of the Share Issuance, make a Change in Recommendation in response to:

 

    receipt by LMI of a bona fide offer or proposal with respect to a Competing Parent Transaction if LMI has not violated the provisions described in “—No Solicitation of Transactions” above; or

 

    the occurrence of an Intervening Event, which is defined below;

provided, in each case, the LMI Board of Directors determined in its good faith judgment, after consultation with outside legal counsel, that the failure to make a Change in Recommendation would be a breach of its fiduciary duties under applicable law, and, with respect to a proposed Competing Parent Transaction, that such offer or proposal constitutes a Superior Proposal.

 

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The Merger Agreement provides that the term “Intervening Event” means any event, development or change in circumstances with respect to LMI (1) which first occurs or comes to the attention of the LMI Board of Directors after the date of the Merger Agreement and prior to obtaining the LMI stockholder approval, (2) that is material to LMI and its subsidiaries, taken as a whole, (3) which was not known or foreseen and could not reasonably have been known or foreseen by the LMI Board of Directors as of or prior to the date of the Merger Agreement, (4) does not include or relate to a Competing Parent Transaction, and (5) does not involve or relate to GetGo or any other entity Citrix will contribute to GetGo. However, none of the following, either alone or in combination, shall be deemed to constitute an “Intervening Event”:

 

    events, circumstances, changes or effects affecting general business, economic or political conditions, the industries or segments thereof in which LMI and its subsidiaries operate, or the financial, credit or securities markets in the United States or in any other country or region in the world;

 

    events, circumstances, changes or effects arising out of, or attributable to, changes (or proposed changes) or modifications in GAAP, other applicable accounting standards or applicable law or the interpretation or enforcement thereof;

 

    events, circumstances, changes or effects arising out of, or attributable to, the announcement of the execution of, or the consummation of the transactions contemplated by, the Merger Agreement or the identity of the parties to the Merger Agreement;

 

    the status of the Merger under the HSR Act or any other antitrust laws;

 

    events, circumstances, changes or effects arising out of, or attributable to, any action taken or omitted to be taken pursuant to the Merger Agreement, the Separation Agreement, the Loan Agreement or any of the other agreements ancillary to the foregoing;

 

    any potential acquisition or disposition of any other individual or entity or assets by LMI or any of its subsidiaries;

 

    any change in the price or trading volume of LMI common stock;

 

    meeting or exceeding, or failing to meet or exceed, internal or other estimates, expectations, forecasts, plans, projections or budgets for any period; or

 

    any matter relating to the foregoing or consequences of the foregoing.

LMI may not make a Change in Recommendation under the circumstances described above, unless:

 

    LMI has provided written notice to Citrix advising Citrix that the LMI Board has received a Superior Proposal or that an Intervening Event has occurred promptly after the LMI Board determines to make a Change in Recommendation in response to a Superior Proposal or Intervening Event, stating that the LMI Board intends to make a Change in Recommendation and describing the material terms and conditions of such Superior Proposal or the material facts and circumstances of such Intervening Event; and

 

    Citrix does not, within five business days of receipt of the notice described above, make a written offer or proposal to revise the terms of the Merger Agreement in a manner that the LMI Board determines in its good faith judgment, after consulting with a financial advisor of nationally recognized reputation and outside legal counsel, to be at least as favorable to LMI’s stockholders as such Superior Proposal or, in the case of an Intervening Event, after consulting with outside legal counsel, permits the Board (consistent with its fiduciary duties under applicable laws) to not make a Change in Recommendation; provided, however, that, during the notice period, LMI must negotiate in good faith with Citrix (to the extent Citrix desires to negotiate) regarding any such revised transaction proposal; and provided, further, that any amendment to the terms of such Superior Proposal or any material change to the facts and circumstances of the Intervening Event during the Notice Period will require a new written notice from LMI describing such amendment or material change and an additional three business day notice period.

 

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The Merger Agreement provides that LMI is not prohibited from making disclosures to its stockholders of any proposal or offer with respect to a Competing Transaction under applicable law or under Item 1012(a) of Regulation M-A or Rule 14e-2(a) or Rule 14d-9 of the Securities Exchange Act of 1934, as amended, which, together with the rules and regulations promulgated thereunder, we refer to as the Exchange Act. However, neither the LMI Board nor any committee thereof is permitted to (i) make a Change in Recommendation in connection with such disclosure unless permitted by the events described above and (ii) any public statement made that relates to a Competing Parent Transaction will be deemed to be a Change in Recommendation unless the LMI Board references or otherwise reaffirms the LMI Board Recommendation in such public statement (it being understood that any “stop, look and listen” communication by or on behalf of LMI pursuant to Rule 14d-9(f) will not be considered a Change in Recommendation). Any Change in Recommendation will not change the approval of the LMI Board for purposes of causing any state takeover statute or other state law to be inapplicable to the Transactions.

Employee Benefits Matters

The Merger Agreement provides that, for at least one year following the effective time of the Merger, LMI will provide to those employees of GetGo and its subsidiaries who were employed as of the effective time of the Merger the opportunity to participate in employee benefit plans and programs in substantially the same manner as other similarly situated employees of LMI and its subsidiaries, except as otherwise required by the Employee Matters Agreement. LMI and its subsidiaries are also generally required to recognize the service of each such employee prior to the effective time of the Merger for purposes of eligibility to participate, levels of benefits and vesting under severance programs and, for at least one year, under other compensation and benefit programs to the extent such service was recognized by Citrix and its subsidiaries under a comparable program, except for accruals under a defined benefit pension plan or as would result in a duplication of benefits. LMI has further agreed to use commercially reasonable efforts to cause the employee benefit programs of LMI and its subsidiaries to waive exclusions with respect to participation for such employees that did not apply under corresponding employee benefit programs of Citrix and its subsidiaries and to provide credit to such employees for co-payments and deductibles paid prior to the effective time of the Merger for the year in which the effective time occurs to the extent that such amounts were recognized under comparable employee benefit programs of Citrix and its subsidiaries.

Non-Solicitation of Employees /Covenant Not to Compete

Citrix has agreed that, from and after the date of the Merger Agreement, it will not, and will cause its subsidiaries not to, without the prior written consent of LMI, directly or indirectly, (i) solicit for employment any of the GetGo Employees for a period of two years following the closing of the Merger or (ii) hire certain GetGo Employees for one year following the closing of the Merger, in each case subject to certain exceptions. LMI has agreed that, from and after the date of the Merger Agreement, it will not, and will cause its subsidiaries not to, without the prior written consent of Citrix, directly or indirectly, (i) solicit for employment any of the employees of Citrix or its subsidiaries for a period of one year following the closing of the Merger, (ii) solicit for employment certain employees of Citrix and its subsidiaries for a period of two years following the closing of the Merger or (iii) hire certain employees of Citrix and its subsidiaries for one year following the closing of the Merger, in each case subject to certain exceptions.

Citrix has further agreed that, from the date of the closing of the Merger and for three years thereafter, subject to certain exceptions, it will not, and will cause its subsidiaries not to, without the prior written consent of LMI, directly or indirectly, engage in any Competitive Business anywhere throughout the world. The Merger Agreement provides that “Competitive Business” means the business of designing, developing, marketing, selling and supporting cloud-based SaaS services each of which consist of a central processing component (including a communication server, central server or broker) connected to computerized end point devices (including host and client end point devices and mobile applications) such that all network traffic for such service is routed through the SaaS service provider’s owned or controlled infrastructure and that provide standalone:

 

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(a) integrated screen sharing technology, conference calling voice services, video technology and chat used to support online meetings and collaboration; (b) personal computer-based (i.e., as an end point device) remote access technology that permits one end point device to stream the contents of its screen to another end point device via an Internet connection; (c) virtual PBX voice services offering phone numbers, VoIP based endpoints, PSTN/VoIP bridging and mobile-based voice communication and text message services; or (d) clientless remote support technology that permits one end point device to stream the contents of its screen to another end point device via an Internet connection giving IT support specialists or call center agents the ability to remotely control a device from another system that can access the Web integrated with a purpose-built set of functionalities geared towards the IT support specialist or call center agents, in each case (meaning for each numbered subpart of this definition) designed, developed, marketed, sold and supported for either individuals, small and medium businesses or small and medium organizational units or functions within larger overall organizations (known as “small in big” segments).

Certain Other Covenants and Agreements

The Merger Agreement contains certain other covenants and agreements, including covenants (with certain exceptions specified in the Merger Agreement) relating to:

 

    access to each of LMI’s and GetGo’s offices, properties, books and records;

 

    financial statements for the GoTo Business that Citrix will provide on a quarterly basis between the signing of the Merger Agreement and the Closing;

 

    preservation of the indemnification provisions in the governing documents of GetGo with respect to directors and officers;

 

    advanced consent requirements for public announcements concerning the transactions contemplated by the Merger Agreement;

 

    litigation brought against LMI and/or its directors in connection with the Transactions;

 

    steps required to cause any disposition of GetGo common stock or acquisitions of LMI common stock resulting from the Transactions by each officer or director who is subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to LMI or GetGo to be exempt under Rule 16b-3 promulgated under the Exchange Act;

 

    any “fair price,” “moratorium,” “control share acquisition,” “business combination” or other form of anti-takeover statute or regulation;

 

    Citrix’s and GetGo’s obligations to ensure GetGo has a sufficient number of authorized shares to effect the issuances under the Distribution;

 

    LMI’s and Citrix’s obligations to cause all documents related to the Transaction to be executed and delivered at the closing of the Merger; and

 

    the listing of the shares of LMI common stock issued in the Merger on the NASDAQ Global Select Market.

Conditions to the Merger

The obligations of the parties to the Merger Agreement to consummate the Merger are subject to the satisfaction or, if permitted under applicable law, waiver, of the following conditions, which are referred to as the Joint Conditions to the Merger:

 

    the consummation in all material respects of the Reorganization, the Separation and the Distribution in accordance with the Separation Agreement;

 

    the effectiveness of the registration statement of LMI and the registration statement of GetGo and the absence of any stop order issued by the SEC or any pending proceeding before the SEC seeking a stop order with respect thereto;

 

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    the approval for listing on the NASDAQ Global Select Market of the shares of LMI common stock to be issued in the Merger;

 

    the approval by LMI stockholders of the Share Issuance;

 

    the expiration or termination of any applicable waiting period under the HSR Act;

 

    consent of the FCC and certain other state communications authorities; and

 

    the absence of any law or order by a governmental authority that enjoins or makes illegal the consummation of the Reorganization, the Distribution or the Merger.

LMI’s and Merger Sub’s obligations to effect the Merger are subject to the satisfaction or, if permitted by applicable law, waiver, of the following additional conditions:

 

    the performance or compliance in all material respects by Citrix and GetGo of all covenants required to be complied with or performed by them on or prior to the effective time of the Merger under the Merger Agreement;

 

    the truthfulness and correctness in all material respects of Citrix’s representations and warranties with respect to corporate existence and power and authority, corporate organization, approvals, certain subsidiaries and brokers as of the date of the Merger;

 

    the truthfulness and correctness in all respects of Citrix’s representations and warranties with respect to the capital stock of GetGo as of the date of the Merger (except for de minimis deviations);

 

    the truthfulness and correctness in all respects of all other representations and warranties made by Citrix in the Merger Agreement (without giving effect to any materiality, material adverse effect or similar qualifiers) as of the date of the Merger (except for certain representations and warranties that by their terms address matters only as of a specified date, which are to be true and correct only as of such specified date), except as would not have a material adverse effect on the GoTo Business;

 

    the receipt by LMI of the LMI Merger Tax Opinion, and copies of the Distribution Tax Opinion and the Citrix Merger Tax Opinion;

 

    execution and delivery of the Loan Agreement by Citrix (which condition LMI and Citrix have waived);

 

    the execution by GetGo and delivery by Citrix of a certificate stating that the interests of GetGo are not U.S. real property interests for purposes of certain U.S. Treasury regulations; and

 

    the entry by Citrix and GetGo into all other applicable documents relating to the Transactions, and performance in all material respects of all covenants thereunder to be performed or complied with prior to the closing of the Merger.

Citrix’s and GetGo’s obligations to effect the Merger are subject to the satisfaction or, if permitted by applicable law, waiver, of the following additional conditions:

 

    the performance or compliance in all material respects by LMI of all covenants required to be complied with or performed by it on or prior to the effective time of the Merger under the Merger Agreement;

 

    the truthfulness and correctness in all material respects of LMI’s representations and warranties with respect to corporate existence and power and authority, corporate organization, approvals and brokers as of the date of the Merger;

 

    the truthfulness and correctness in all respects of LMI’s representations and warranties with respect to the capital stock of LMI as of the date of the Merger (except for de minimis deviations);

 

    the truthfulness and correctness in all respects of all other representations and warranties made by LMI in the Merger Agreement (without giving effect to any materiality, material adverse effect or similar qualifiers) as of the date of the Merger (except for certain representations and warranties that by their terms address matters only as of a specified date, which are to be true and correct only as of such specified date), except as would not have a material adverse effect on LMI;

 

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    the receipt by Citrix of the Distribution Tax Opinion and the Citrix Merger Tax Opinion, and a copy of the LMI Merger Tax Opinion; and

 

    the entry by LMI and Merger Sub into all applicable other documents related to the Transaction, and performance in all material respects of all covenants thereunder to be performed or complied with prior to the closing of the Merger.

Termination

The Merger Agreement may be terminated prior to the consummation of the Merger by the mutual written consent of Citrix and LMI. Also, subject to specified qualifications and exceptions, either Citrix or LMI may terminate the Merger Agreement prior to the consummation of the Merger if:

 

    the Merger has not been consummated on or prior to July 26, 2017 (subject to extension to October 26, 2017 under certain circumstances if all of the closing conditions have been satisfied or waived except for the conditions related to competition law approvals, communications laws approvals or absence of governmental orders prohibiting the Merger), which we refer to herein as the Termination Date;

 

    any governmental authority has issued an order, decree or ruling or taken any other action permanently enjoining the transactions, and such order, decree, ruling or other action has become final and nonappealable; or

 

    LMI’s stockholders fail to approve the Share Issuance at the special meeting of LMI’s stockholders (including any adjournment, continuation or postponement thereof).

In addition, subject to specified qualifications and exceptions, Citrix may terminate the Merger Agreement if:

 

    LMI has breached any representation, warranty, covenant or agreement in the Merger Agreement that would cause the Joint Conditions to the Merger or the conditions to Citrix’s obligation to consummate the Merger described above not to be satisfied, and such breach is not cured by the earlier of 30 days after notice of the breach and the Termination Date, or is incapable of cure prior to the Termination Date;

 

    the LMI Board of Directors withdraws, qualifies or modifies its recommendation that LMI stockholders vote in favor of the Share Issuance, makes a public statement inconsistent with such recommendation or approves, recommends or publicly proposes to approve certain alternative transactions (each action constituting a Change in Recommendation), provided that such termination must be elected by Citrix within 30 days of receiving notice from LMI of a Change in Recommendation if such change is in connection with certain other transactions such as a merger, share exchange, sale, license or tender offer involving LMI, referred to as a Competing Parent Transaction;

 

    LMI fails to include in this proxy statement/prospectus-information statement the recommendation of the LMI Board of Directors that its stockholders approve the Share Issuance;

 

    LMI has failed to convene a meeting of LMI’s stockholders for the purpose of voting on the Share Issuance at least 60 days prior to the Termination Date; or

 

    LMI has failed to comply in all material respects with its obligations under the Merger Agreement relating to non-solicitation of a Competing Parent Transaction.

In addition, subject to specified qualifications and exceptions, LMI may terminate the Merger Agreement if Citrix or GetGo has breached any representation, warranty, covenant or agreement in the Merger Agreement that would cause the Joint Conditions to the Merger or the conditions to LMI’s obligation to consummate the Merger described above not to be satisfied, and such breach is not cured by the earlier of 30 days after notice of the breach and the Termination Date, or is incapable of cure prior to the Termination Date.

 

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In the event of termination of the Merger Agreement, the Merger Agreement will terminate without any liability on the part of any party except as described below under “—Termination Fee and Expenses Payable in Certain Circumstances,” provided that nothing in the Merger Agreement will relieve any party of liability for fraud committed prior to such termination or for any willful and material breach of any of its representations, warranties, covenants or agreements set forth in the Merger Agreement.

Termination Fee and Expenses Payable in Certain Circumstances

The Merger Agreement provides that, upon termination of the Merger Agreement under specified circumstances, LMI is required to pay Citrix a termination fee of $62 million. The circumstances under which this termination fee would be payable include:

 

    if Citrix terminates the Merger Agreement following a Change in Recommendation by the LMI Board of Directors;

 

    if Citrix terminates the Merger Agreement because LMI has failed to include the LMI Board Recommendation in this proxy statement/prospectus-information statement;

 

    if Citrix terminates the Merger Agreement because LMI breached its obligation to hold a special meeting of LMI stockholders to vote on the Share Issuance proposal at least 60 days prior to the Termination Date; and

 

    if Citrix terminates the Merger Agreement because LMI has failed to comply in all material respects with its obligations under the Merger Agreement with respect to non-solicitation of Competing Parent Transactions.

In addition, if the Merger Agreement is terminated under any of the circumstances listed below, (1) prior to the termination of the Merger Agreement, a Competing Parent Transaction is publicly announced or otherwise communicated to the LMI Board or management and not withdrawn and (2) within twelve months of the termination of the Merger Agreement LMI enters into a definitive agreement with respect to a Competing Parent Transaction or consummates a Competing Parent Transaction (whether or not the applicable Competing Parent Transaction is the same as the original Competing Parent Transaction publicly announced or communicated), then LMI must pay Citrix the Termination Fee, less any expenses previously reimbursed by LMI:

 

    if the Merger Agreement is terminated by Citrix or LMI because the transactions contemplated by the Merger Agreement have not been consummated prior to the Termination Date;

 

    if the Merger Agreement is terminated by either Citrix or LMI after the failure to obtain approval from LMI stockholders of the Share Issuance at the special meeting of LMI stockholders; or

 

    if the Merger Agreement is terminated by Citrix because LMI has committed an uncured or incurable breach of any representation, warranty, covenant or agreement in the Merger Agreement such that the conditions to the closing of the Merger would not be satisfied.

If the Merger Agreement is terminated because LMI’s stockholders fail to approve the Share Issuance at the meeting of LMI stockholders, LMI will otherwise be required to reimburse Citrix in cash for certain out-of-pocket fees and expenses incurred by Citrix in connection with the Transactions, up to a maximum of $10.0 million in the aggregate. In addition, LMI has agreed that if the Merger Agreement is terminated for any reason, LMI will reimburse Citrix’s out-of-pocket costs and expenses incurred in connection with the improvement or development of certain GetGo properties, up to a maximum of $3.8 million. If any Transaction expense reimbursement is paid under the provision described in the first sentence of this paragraph and then the Termination Fee later becomes payable, the Termination Fee will be reduced by the amount of such Transaction expenses previously paid.

Except as described above, all other expenses of the parties will be paid by the parties incurring them, whether or not the Merger is completed.

 

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Specific Performance

In the Merger Agreement, the parties acknowledge and agree any breach of the Merger Agreement by any party could not be adequately compensated by monetary damages alone and that the parties would not have any adequate remedy at law. Accordingly, the parties have agreed that in addition to any other right or remedy to which a party may be entitled, in the event of any actual or threatened default or breach of any of the terms or conditions or provisions of the Merger Agreement, the non-breaching party will have the right to specific performance and injunctive or other equitable relief in respect of its rights under the Merger Agreement.

Amendments

The Merger Agreement may not be amended or modified, in whole or in part, except by an instrument in writing duly signed by an authorized representative of each party to the Merger Agreement that expressly references the Merger Agreement.

The Separation Agreement

The following is a summary of the material provisions of the Separation Agreement. This summary is qualified in its entirety by the Separation Agreement, which is incorporated by reference in this proxy statement/prospectus-information statement. Citrix stockholders and LMI stockholders are urged to read the Separation Agreement in its entirety. This description of the Separation Agreement has been included to provide Citrix stockholders and LMI stockholders with information regarding its terms. The rights and obligations of the parties under the Separation Agreement are governed by the express terms and conditions of the Separation Agreement and not by this summary or any other information included in this document. It is not intended to provide any other factual information about LMI, Merger Sub, Citrix or GetGo. Information about LMI, Merger Sub, Citrix and GetGo can be found elsewhere in this document and in the documents incorporated by reference into this document. See “Where You Can Find Additional Information; Incorporation By Reference.”

Overview

The Separation Agreement provides for the separation of the GoTo Business from Citrix. Among other things, the Separation Agreement identifies those assets of Citrix related to the GoTo Business that are to be transferred to, and those liabilities of Citrix related to the GoTo Business that are to be assumed by GetGo and describes when and how these transfers and assumptions will occur. The Separation Agreement also includes procedures by which Citrix and GetGo will become separate and independent companies. The matters addressed by the Separation Agreement include, but are not limited to, the matters described below.

Separation of the GoTo Business

Conveyance of Assets; Assumption and Discharge of Liabilities

Generally, subject to the terms and conditions contained in the Separation Agreement, to the extent not already completed pursuant to an internal reorganization:

 

    Citrix and its subsidiaries will transfer to GetGo assets related to the GoTo Business, and GetGo or a GetGo designee will assume all of the liabilities related to the GoTo Business;

 

    GetGo and its subsidiaries will transfer to Citrix assets to be excluded from the GoTo Business, and Citrix or a Citrix designee will assume all of the liabilities to be excluded from the GoTo Business;

 

    Citrix will retain assets and liabilities that are not transferred to, or assumed by, GetGo or a GetGo designee in the Separation; and

 

    following the Distribution, if Citrix or GetGo receives or comes to possess any asset (including any receipt of payments pursuant to contracts or proceeds from accounts receivable) or liability that is allocated to the other party pursuant to the Separation Agreement or any ancillary agreement, then the applicable party will transfer such misallocated asset or liability to the party entitled thereto.

 

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The assets to be transferred or assigned to GetGo include, among other things, the following assets of Citrix (other than excluded assets described below):

 

    all interests in the capital stock of, or any other equity interests in, certain subsidiaries of Citrix that are contemplated to be owned by GetGo immediately prior to the Distribution;

 

    all intellectual property that is exclusively related to, exclusively used in or exclusively held for use in the GoTo Business;

 

    all contracts to which GetGo or Citrix or any Citrix subsidiary is a party as of immediately prior to the Distribution that are exclusively related to the GoTo Business, and any rights or claims arising thereunder;

 

    with respect to any contract entered into prior to the Distribution to which Citrix or any of its subsidiaries is a party that relates to both the GoTo Business and the Citrix business, all contracts for the benefit of GetGo into which such shared contracts are separated pursuant to and in accordance with the Separation Agreement;

 

    certain real property leased or owned by Citrix or its subsidiaries which Citrix and LMI have identified and agreed are related to the GoTo Business;

 

    all rights, claims, credits, causes of action or rights of set-off against persons other than Citrix and its subsidiaries to the extent relating to the GoTo Business or the assets to be transferred to GetGo under the Separation Agreement, including unliquidated rights under manufacturers’ and vendors’ warranties;

 

    all transferable licenses, permits, registrations, approvals and authorizations of GetGo or Citrix or any subsidiary of Citrix which relate primarily to the GoTo Business;

 

    (i) all business records to the extent primarily related to the GoTo Business (including corporate and limited liability company minute books and related stock records of GetGo, information and records used to demonstrate compliance with applicable law and other compliance records related to the GoTo Business), (ii) all of the separate financial and property tax records of GetGo that do not form part of the general ledger of Citrix, (iii) all other books, records, documentation or other materials in any form to the extent primarily related to the GoTo Business and (iv) any other asset expressly identified in any ancillary agreement or conveyance and assumption instrument;

 

    all accounts receivable to the extent relating to the operation of the GoTo Business;

 

    all assets expressly identified in any ancillary agreement or conveyance and assumption instrument as assets to be acquired by GetGo and its subsidiaries;

 

    all tangible equipment (including information technology equipment and machinery), infrastructure, wires, inventory, supplies and other tangible property that is owned, leased or licensed by Citrix or any of its subsidiaries and primarily related to the GoTo Business;

 

    all other assets not expressly covered above that are primarily related to, used in or held for use in the GoTo Business; and

 

    all other assets not expressly covered above that are owned, in whole or in part, by GetGo and the entities that will be subsidiaries of GetGo at the closing of the Merger, but not owned in part by Citrix or its subsidiaries immediately prior to the date of the Distribution (after giving effect to the internal reorganization).

The Separation Agreement provides that the assets to be transferred or assigned to GetGo or a GetGo designee will not in any event include, among other things, any of the following assets:

 

    the domain Citrixonline.com and any related Apple Developer Accounts associated to Citrixonline.com;

 

    subject to the specific terms of the Separation Agreement, cash and cash equivalents;

 

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    certain insurance policy binders and claims and rights thereunder and all prepaid insurance premiums (other than any insurance policies acquired prior to the Distribution directly by and in the name of GetGo and the entities that will be GetGo subsidiaries at the closing of the Merger);

 

    any work papers of Citrix’s auditors and any other tax records (including accounting records) of Citrix (which are separately provided for in the Tax Matters Agreement);

 

    all other assets expressly identified in any ancillary agreement or any conveyance and assumption instrument as assets to be retained by Citrix;

 

    any and all other assets that are owned, used or held, at or prior to the Distribution, by Citrix or any of its subsidiari