Revised Preliminary Proxy Pertaining to a Merger
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

 

 

INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Filed by the Registrant  ☒                              Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

TELENAV, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

  (2)  

Aggregate number of securities to which transaction applies:

 

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

  (4)  

Proposed maximum aggregate value of transaction:

 

 

  (5)  

Total fee paid:

 

 

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount previously paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing Party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


Table of Contents

PRELIMINARY COPY—SUBJECT TO COMPLETION

 

LOGO   

T +1 408.245.3800

F +1 408.245.0238

E IR@telenav.com

4655 Great America Parkway, Suite 300

Santa Clara, CA 95054

www.telenav.com

[●], 202[●]

Dear Stockholders:

You are cordially invited to attend a special meeting of stockholders of Telenav, Inc., a Delaware corporation (“Telenav”), to be held at [●], Pacific Time, on [●], 2021. Due to public health concerns regarding the coronavirus, or COVID-19, pandemic, for the safety and well-being of stockholders, employees and other community members, and taking into account the protocols of local, state and federal governments, the special meeting will be held in a virtual format only. To attend the meeting, please visit www.virtualshareholdermeeting.com/TNAV2021SM. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting. Telenav encourages you to vote by proxy—over the Internet, by telephone or by mail—well in advance of the special meeting, to ensure your shares are represented whether or not you decide to attend.

On November 2, 2020, Telenav entered into an Agreement and Plan of Merger (as amended on December 17, 2020, and as it may be further amended, supplemented or otherwise modified in accordance with its terms, the “Merger Agreement”) with V99, Inc., a Delaware corporation led by H.P. Jin, Co-Founder, Chair of the Board of Directors, President and Chief Executive Officer of Telenav (“V99”), and Telenav99, Inc., a newly formed Delaware corporation and a wholly owned subsidiary of V99 (“Merger Sub”), providing for, subject to the satisfaction or waiver of specified conditions, the acquisition of Telenav by V99. Subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into Telenav (the “Merger”), with Telenav surviving the Merger as a wholly owned subsidiary of V99.

At the special meeting, you will be asked to consider and vote on:

 

   

a proposal to adopt and approve the Merger Agreement;

 

   

a proposal to adjourn or postpone the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt and approve the Merger Agreement if there are insufficient votes at the time of the special meeting to approve such proposal; and

 

   

a proposal to approve, by nonbinding, advisory vote, compensation that will or may become payable to Telenav’s named executive officers in connection with the Merger.

If the Merger contemplated by the Merger Agreement is completed, the holders of Telenav’s common stock, par value $0.001 per share (the “Common Stock”), will receive $4.80 in cash, without interest and less applicable withholding tax, for each share of Common Stock that they own immediately prior to the time the Merger becomes effective (the “Effective Time”), other than shares (i) held in the treasury of Telenav or (ii) held by holders who shall neither have voted in favor of the Merger nor consented thereto in writing, and who shall have properly and validly perfected, and not withdrawn or lost, their statutory rights of appraisal under Section 262 of the Delaware General Corporation Law immediately prior to the Effective Time.


Table of Contents

A special committee (the “Special Committee”) of the board of directors of Telenav (the “Telenav Board”), consisting entirely of independent and disinterested directors, carefully reviewed and considered the terms and conditions of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. The Special Committee unanimously (i) determined that the Merger Agreement and the Merger are advisable and in the best interests of Telenav and its stockholders, (ii) approved the Merger Agreement and the Merger, (iii) recommended that the Telenav Board approve and adopt the Merger Agreement and the Merger, and (iv) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger.

After due and careful discussion and consideration, and upon the unanimous recommendation of the Special Committee, the Telenav Board (unanimously, among those independent and disinterested directors voting) (i) determined that the Merger Agreement and the Merger are advisable and fair to, and in the best interests of, Telenav and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the Merger, and (iii) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger, subject to the right of the Telenav Board to withdraw or modify such recommendation in accordance with the Merger Agreement.

Accordingly, the Special Committee recommends, and the Telenav Board (unanimously, among those independent and disinterested directors voting) recommends, a vote (i) “FOR” the adoption and approval of the Merger Agreement, (ii) “FOR” the proposal to adjourn or postpone the special meeting if necessary or appropriate to solicit additional proxies, and (iii) “FOR” the nonbinding, advisory proposal to approve compensation that will or may become payable to Telenav’s named executive officers.

The proxy statement attached to this letter provides you with more specific information about the special meeting, the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. You should carefully read the entire proxy statement, including the annexes and documents incorporated by reference. You may also obtain more information about Telenav from documents Telenav has filed with the U.S. Securities and Exchange Commission (the “SEC”).

Your vote is important. Adoption and approval of the Merger Agreement requires the affirmative vote of the holders of (i) at least 66 and two-thirds percent of the outstanding shares of Common Stock not beneficially owned by V99, Merger Sub, Dr. Jin, Samuel Chen, Fiona Chang, Yi-Ting Chen, Yi-Chun Chen, Changbin Wang and Digital Mobile Venture Limited (and any affiliate of the foregoing or trust in which any of the foregoing are a beneficiary) (which will also serve as a waiver of certain limitations set forth in Section 203 of the Delaware General Corporation Law), and (ii) at least a majority of the outstanding shares of Common Stock. The failure of any stockholder to vote will have the same effect as a vote against adopting and approving the Merger Agreement. Accordingly, whether you plan to attend the special meeting, you are requested to promptly vote your shares by completing, signing and dating the enclosed proxy card and returning it in the envelope provided, or by voting over the telephone or over the Internet as instructed in these materials. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote:

 

  1.

FOR” adoption and approval of the Merger Agreement;

 

  2.

FOR” adjourning or postponing the special meeting, if necessary or appropriate, to solicit additional proxies; and

 

  3.

FOR” the nonbinding, advisory proposal to approve compensation that will or may become payable to Telenav’s named executive officers.

Voting by proxy will not prevent you from voting your shares in person if you subsequently choose to attend the special meeting.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instruction form you will receive from your bank, broker or other nominee. Your bank, broker or other nominee cannot vote on any of the proposals, including the proposal to adopt and approve the Merger Agreement, without your instructions.


Table of Contents

If you have any questions or need assistance voting your shares, please contact: MacKenzie Partners, Inc., Telenav’s proxy solicitor, by calling (800) 322-2885 (toll-free) or (212) 929-5500.

Thank you for your ongoing support of Telenav.

TELENAV, INC.

Steve Debenham

Vice President, General Counsel and Secretary

Santa Clara, California


Table of Contents

PRELIMINARY COPY—SUBJECT TO COMPLETION

 

LOGO

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held [], 2021

To the Stockholders of Telenav, Inc.:

A special meeting of stockholders of Telenav, Inc., a Delaware corporation (“Telenav”), will be held at [], Pacific Time, on [], 2021. Due to public health concerns regarding the COVID-19 pandemic, for the safety and well-being of stockholders, employees and other community members, and taking into account the protocols of local, state and federal governments, the special meeting will be held in a virtual format only. To attend the meeting, please visit www.virtualshareholdermeeting.com/TNAV2021SM. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting. The special meeting will be held to consider and vote on the following proposals (as more fully described in the proxy statement accompanying this notice):

 

  1.

Adoption and Approval of the Merger Agreement. To consider and vote on a proposal to adopt and approve the Agreement and Plan of Merger, dated as of November 2, 2020 (as amended on December 17, 2020, and as it may be further amended, supplemented, or otherwise modified in accordance with its terms, the “Merger Agreement”), among Telenav, V99, Inc., a Delaware corporation (“V99”), and Telenav99, Inc., a Delaware corporation and a wholly owned subsidiary of V99 (“Merger Sub”), pursuant to which Merger Sub will be merged with and into Telenav (the “Merger”), with Telenav surviving the Merger as a wholly owned subsidiary of V99 (such proposal, the “Merger Agreement Proposal”);

 

  2.

Adjournment or Postponement of the Special Meeting. To consider and vote on a proposal to approve the adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to adopt and approve the Merger Agreement (such proposal, the “Adjournment Proposal”); and

 

  3.

Compensation Payable to Telenav’s Named Executive Officers. To consider and vote on a nonbinding, advisory proposal to approve compensation that will or may become payable to Telenav’s named executive officers in connection with the Merger (such proposal, the “Executive Compensation Proposal”).

The Board of Directors of Telenav (unanimously, among those independent and disinterested directors voting) recommends that the stockholders of Telenav vote (i) “FOR” the Merger Agreement Proposal, (ii) “FOR” the Adjournment Proposal, and (iii) “FOR” the Executive Compensation Proposal.

Only stockholders of record at the close of business on [●], 202[●] are entitled to notice of and to vote at the special meeting and at any adjournment or postponement of the special meeting. All stockholders of record are cordially invited to attend the special meeting. To ensure your representation at the meeting in case you cannot attend, you are urged to vote your shares by completing, signing, dating and returning the enclosed proxy card as promptly as possible in the postage-paid envelope enclosed for that purpose or by submitting your proxy by telephone or over the Internet. Any stockholder attending the special meeting may vote in person even if he or she has returned or otherwise submitted a proxy card.

Stockholders who do not vote in favor of adopting and approving the Merger Agreement will have the right to seek appraisal of the fair value of their shares if the Merger is completed, but only if they submit a written demand for appraisal to Telenav prior to the time the vote is taken on the Merger Agreement and comply with all other requirements of the Delaware General Corporation Law (“DGCL”). A copy of the applicable DGCL statutory provisions is included as Annex C to the accompanying proxy statement, and a summary of these provisions can be found under the section captioned “Appraisal Rights” in the accompanying proxy statement.


Table of Contents

Adoption and approval of the Merger Agreement requires the affirmative vote of the holders of (i) at least 66 and two-thirds percent of the outstanding shares of Telenav’s common stock, per value $0.001 per share (the “Common Stock”) not beneficially owned by V99, Merger Sub, H.P. Jin, Co-Founder, Chair of the Board of Directors, President and Chief Executive Officer of Telenav, Samuel Chen, a Telenav director, Fiona Chang, Yi-Ting Chen, Yi-Chun Chen, Changbin Wang or Digital Mobile Venture Limited (and any affiliate of the foregoing or trust in which any of the foregoing are a beneficiary) (which will also serve as a waiver of certain limitations set forth in Section 203 of the DGCL), and (ii) at least a majority of the outstanding shares of Common Stock. The failure to vote will have the same effect as a vote against the adoption and approval of the Merger Agreement. Even if you plan to attend the special meeting in person, please complete, sign, date and return the enclosed proxy or vote over the telephone or the Internet as instructed in these materials as promptly as possible to ensure that your shares will be represented at the special meeting if you are unable to attend. If you do attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person. If you sign, date and mail your proxy card without indicating how you wish to vote, your vote will be counted as a vote in favor of the Merger Agreement Proposal, the Adjournment Proposal and the Executive Compensation Proposal. If you fail to return your proxy card, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting, and it will have the same effect as a vote against the Merger Agreement Proposal.

 

By Order of the Board of Directors,

 

Steve Debenham

Vice President, General Counsel and Secretary

 

Santa Clara, California

[●], 202[●]


Table of Contents

PRELIMINARY COPY—SUBJECT TO COMPLETION

 

LOGO

ABOUT THIS PROXY STATEMENT

This document constitutes the proxy statement of Telenav, Inc., a Delaware corporation (“Telenav” or the “Company”), under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act’). In addition, it constitutes a notice of meeting with respect to the special meeting of the stockholders of the Company to be held virtually at [●], Pacific Time, on [●], 2021.

On November 2, 2020, Telenav entered into an Agreement and Plan of Merger (as amended on December 17, 2020, and as it may be further amended, supplemented or otherwise modified in accordance with its terms, the “Merger Agreement”) with V99, Inc., a Delaware corporation led by H.P. Jin, Co-Founder, Chair of the Board of Directors, President and Chief Executive Officer of Telenav (“V99”), and Telenav99, Inc., a newly formed Delaware corporation and a wholly owned subsidiary of V99 (“Merger Sub”), providing for, subject to the satisfaction or waiver of specified conditions, the acquisition of Telenav by V99. Subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into Telenav (the “Merger”), with Telenav surviving the Merger as a wholly owned subsidiary of V99.

Other than as provided below, if the Merger is completed, each share of Telenav’s common stock, par value $0.001 per share (the “Common Stock”) will be converted into the right to receive $4.80 in cash, without interest and less any required withholding taxes (the “Merger Consideration”). The following shares of Common Stock will not be converted into the right to receive the Merger Consideration in connection with the Merger: (i) shares held by any Telenav stockholders who shall neither have voted in favor of the Merger nor consented thereto in writing and who shall have properly and validly perfected, and not effectively withdrawn or lost, their statutory rights of appraisal in respect of such shares of Common Stock in accordance with Section 262 of the Delaware General Corporation Law (“DGCL”) and (ii) shares held in the treasury of Telenav.

You should rely only on the information contained in or incorporated by reference into this proxy statement. No one has been authorized to provide you with information that is different from that contained in or incorporated by reference into this proxy statement. This proxy statement is dated [●], 202[●] and, together with the enclosed form of proxy, is first being mailed to stockholders of Telenav on or about [●], 202[●]. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date or, in the case of information in a document incorporated by reference, as of the date of such document, unless the information specifically indicates that another date applies. The mailing of this proxy statement to stockholders will not create any implication to the contrary.

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.


Table of Contents

YOUR VOTE IS IMPORTANT

EVEN IF YOU PLAN TO ATTEND THE SPECIAL MEETING, TELENAV ENCOURAGES YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) BY TELEPHONE, (2) OVER THE INTERNET, OR (3) BY SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before it is voted at the special meeting.

If you hold your shares in “street name,” you should instruct your bank, broker or other nominee, how to vote your shares in accordance with the voting instruction form that you will receive from your bank, broker or other nominee. Your broker or other agent cannot vote on any of the proposals, including the Merger Agreement Proposal, without your instructions.

If you are a stockholder of record, voting in person at the special meeting will revoke any proxy that you previously submitted. If you hold your shares through a bank, broker or other nominee, you must obtain a “legal proxy” in order to vote in person at the special meeting.

If you fail to (1) return your proxy card, (2) grant your proxy electronically over the Internet or by telephone or (3) attend the special meeting in person, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, it will have the same effect as a vote “AGAINST” the Merger Agreement Proposal but will have no effect on the other two proposals.

Telenav encourages you to read the accompanying proxy statement and its annexes, including all documents incorporated by reference into the accompanying proxy statement, carefully and in their entirety. If you have any questions concerning the Merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of Common Stock, please contact:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, NY 10018

Stockholders May Call Toll-Free: (800) 322-2885

Banks & Brokers May Call Collect: (212) 929-5500


Table of Contents

TABLE OF CONTENTS

 

SUMMARY TERM SHEET

     1  

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND MERGER

     12  

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

     17  

THE PARTIES TO THE MERGER

     19  

Telenav, Inc.

     19  

V99, Inc.

     19  

Telenav99, Inc.

     19  

THE SPECIAL MEETING OF TELENAV’S STOCKHOLDERS

     20  

Time, Place and Purpose of the Special Meeting

     20  

Who Can Vote at the Special Meeting

     20  

Quorum for the Special Meeting

     20  

Votes Required

     20  

Voting by Proxy

     21  

Householding

     21  

Solicitation of Proxies

     22  

SPECIAL FACTORS

     23  

Background of the Merger

     23  

Recommendation of the Telenav Special Committee and the Telenav Board of Directors; Purposes and Reasons for the Merger; Fairness of the Merger

     43  

Opinion of Financial Advisor to the Telenav Special Committee

     51  

Financial Projections

     57  

Purposes and Reasons of the Purchaser Group for the Merger

     61  

Position of the Purchaser Group as to the Fairness of the Merger

     61  

Sources and Amounts of Funds or Other Consideration; Expenses

     66  

Plans for Telenav After the Merger

     67  

Certain Effects of the Merger

     67  

Effects on Telenav if the Merger is Not Completed

     69  

Interests of Telenav’s Directors and Executive Officers in the Merger

     69  

Interests of the Purchaser Group in the Merger

     79  

Material U.S. Federal Income Tax Consequences of the Merger

     80  

Litigation Related to the Merger

     81  

SELECTED CONSOLIDATED FINANCIAL DATA OF TELENAV

     82  

THE MERGER AGREEMENT

     84  

The Merger

     84  

Closing and Effective Time of the Merger

     84  

Directors and Officers

     84  

Consideration to be Received in the Merger

     84  

Payment for the Common Stock

     85  

Treatment of Options

     86  

Treatment of RSUs

     87  

Treatment of the ESPP

     87  

Representations and Warranties

     88  

Conduct of Business Pending the Merger

     92  

The “Go-Shop” Period; Solicitation of Other Offers

     94  

No Solicitation; Recommendations of the Merger

     96  

Commercially Reasonable Efforts; Other Agreements

     99  

Indemnification and Insurance

     101  

Conditions to Completion of the Merger

     102  

Financing

     103  

Regulatory Approvals

     103  


Table of Contents

Termination of the Merger Agreement

     104  

Termination Fees and Expenses

     106  

Effect of Termination

     107  

Specific Performance

     107  

Employee Matters

     108  

Amendment; Extension and Waiver

     108  

Governing Law

     109  

VOTING AND SUPPORT AGREEMENT

     110  

PROVISIONS FOR UNAFFILIATED STOCKHOLDERS

     111  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     112  

Transactions in Common Stock

     113  

CERTAIN INFORMATION REGARDING THE PURCHASER GROUP

     116  

TRANSACTIONS BETWEEN TELENAV AND THE PURCHASER GROUP

     118  

PROPOSAL 1: MERGER AGREEMENT PROPOSAL

     119  

PROPOSAL 2: ADJOURNMENT PROPOSAL

     120  

PROPOSAL 3: EXECUTIVE COMPENSATION PROPOSAL

     121  

APPRAISAL RIGHTS

     122  

DEADLINE FOR RECEIPT OF FUTURE STOCKHOLDER PROPOSALS

     127  

WHERE YOU CAN FIND MORE INFORMATION

     128  

ANNEX A—Agreement and Plan of Merger

     A-1  

ANNEX B—Opinion of B. Riley Securities, Inc.

     B-1  

ANNEX C—Section 262 of Delaware General Corporation Law

     C-1  


Table of Contents

SUMMARY TERM SHEET

This Summary Term Sheet, together with “Questions and Answers About the Special Meeting and Merger” beginning on page 12, highlights certain information in this proxy statement but may not contain all of the information that may be important to you. Telenav encourages you to read carefully this entire proxy statement, its annexes and the documents referred to or incorporated by reference in this proxy statement for a more complete understanding of the matters being considered at the special meeting. Each item in this Summary Term Sheet includes a page reference directing you to a more complete description of that topic. See “Where You Can Find More Information” beginning on page 128. In this proxy statement, the term “Telenav” refers to Telenav, Inc. and its subsidiaries, unless the context requires otherwise.

The Parties to the Merger (page 19)

Telenav is a leading provider of automotive software and services providing both in-vehicle and cloud-based solutions. Over the past twenty years, Telenav’s focus has been on navigation and location-based services (“LBS”), where Telenav has pioneered many innovations, including the market’s first mobile cloud-based navigation service. As a leader in hybrid navigation, Telenav counts among its customers three of the top five automotive manufacturers by revenue and sales—Ford Motor Company, General Motors Holdings and Toyota Motor Corporation. Navigation and LBS are the primary applications for in-vehicle infotainment (“IVI”) systems, and Telenav is using its strengths and core competencies to address the growing demand for overall connected-car services.

V99 was formed on September 30, 2020, for the purpose of engaging in the transactions contemplated by the Merger Agreement and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement and arranging of the debt financing in connection with the Merger. Dr. Jin is the sole stockholder of V99.

Telenav99 is a wholly owned subsidiary of V99 and was formed on November 2, 2020, solely for the purpose of facilitating V99’s acquisition of Telenav.

The Merger (page 84)

You are being asked to adopt and approve the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub will merge with and into Telenav, with Telenav surviving the Merger as the surviving corporation (the “Surviving Corporation”) and a wholly owned subsidiary of V99 (the “Merger Agreement Proposal”). Upon completion of the Merger, Telenav will cease to be a publicly traded company, and you will cease to have any rights in Telenav as a stockholder.

Consideration to be Received in the Merger (page 84)

Other than as provided below, if the Merger is completed, each share of the Common Stock will be converted into the right to receive the Merger Consideration. The following shares of Common Stock will not be converted into the right to receive the Merger Consideration in connection with the Merger: (i) shares held by any Telenav stockholders who shall neither have voted in favor of the Merger nor consented thereto in writing and who shall have properly and validly perfected, and not effectively withdrawn or lost, their statutory rights of appraisal in respect of such shares of Common Stock in accordance with Section 262 of the DGCL and (ii) shares held in the treasury of Telenav.



 

1


Table of Contents

Treatment of Options, RSUs and the ESPP (page 87)

Treatment of Options

No options to acquire shares of Common Stock (“Telenav Options”) will be assumed by V99, and all outstanding Telenav Options have exercise prices per share in excess of the Merger Consideration. Subject to the terms of the Merger Agreement, each Telenav Option that is outstanding and unexercised as of immediately prior to the time the Merger becomes effective (the “Effective Time”), will immediately vest and be cancelled and converted into the right to receive, at the Effective Time, an amount in cash, without interest, equal to the product of (i) the excess, if any, of the Merger Consideration over the per share exercise price of such Telenav Option and (ii) the total number of shares of Common Stock subject to such Telenav Option as of immediately prior to the Effective Time, less any taxes required to be withheld; provided, however, that any Telenav Option for which its per share exercise price is greater than the Merger Consideration will be cancelled and terminated at the Effective Time for no consideration. For more information, see “The Merger Agreement—Treatment of Options.”

Treatment of RSUs

Subject to the terms of the Merger Agreement:

 

   

Restricted stock unit awards covering shares of Common Stock (“Telenav RSUs”) that are outstanding and vested as of immediately prior to the Effective Time but for which the shares of Common Stock issuable with respect thereto have not yet been delivered immediately prior to the Effective Time (and after giving effect to any acceleration provided under the terms of the Telenav equity plans, the applicable RSU award agreement and any other written agreement between the holder of such Telenav RSU and Telenav or any of its subsidiaries governing any vesting terms of such Telenav RSU) will be cancelled and converted into the right to receive, at the Effective Time, an amount in cash, without interest, equal to the Merger Consideration for each share of Common Stock otherwise deliverable in settlement of such vested Telenav RSU, less any taxes required to be withheld.

 

   

Telenav RSUs (including without limitation those Telenav RSUs granted subject to any performance-based vesting requirements) that are unvested, outstanding and unsettled immediately prior to the Effective Time (and after giving effect to any acceleration provided under the terms of the Telenav equity plans, the applicable RSU award agreement and any other written agreement between the holder of such Telenav RSU and Telenav or any of its subsidiaries governing any vesting terms of such Telenav RSU) will be cancelled and converted into the unfunded, unsecured right to receive an amount in cash, without interest, equal to the Merger Consideration (less any taxes required to be withheld), subject to the holder’s satisfaction of any vesting based on continued service (“time-based” vesting terms) (including any accelerated vesting in connection with a termination of service) that applied to the corresponding Telenav RSU immediately prior to the Effective Time; provided, however, that V99 may enter into agreements after December 2, 2020, with up to twelve individuals holding such unvested Telenav RSUs providing for different treatment of such unvested Telenav RSUs.

For more information, see “The Merger Agreement—Treatment of RSUs.”



 

2


Table of Contents

Treatment of the ESPP

With respect to Telenav’s 2019 Employee Stock Purchase Plan (the “ESPP”), Telenav will take all actions that may be necessary to provide that (i) no new offering period or purchase period will commence under the ESPP following the date of the Merger Agreement, (ii) participants in the ESPP as of the date of the Merger Agreement may not increase their payroll deductions under the ESPP from those in effect on the date of the Merger Agreement, and (iii) no new participants may commence participation in the ESPP following the date of the Merger Agreement.

Telenav will take such action as may be necessary prior to the closing to (i) cause any offering period or purchase period in progress under the ESPP as of the date of the Merger Agreement to be the final such period under the ESPP and to be terminated no later than three (3) business days prior to the anticipated date of closing (the “Final Exercise Date”), (ii) make any pro-rata adjustments that may be necessary to reflect the shortened offering or purchase period, but otherwise treat such shortened offering or purchase period as a fully effective and completed offering or purchase period for all purposes under the ESPP, (iii) cause each participant’s then-outstanding share purchase right under the ESPP (the “ESPP Rights”) to be exercised as of the Final Exercise Date, and (iv) terminate the ESPP as of the Effective Time.

For more information, see “The Merger Agreement—Treatment of the ESPP.”

When the Merger is Expected to be Completed

Telenav currently anticipates that the Merger will be completed in the first quarter of calendar 2021. However, there can be no assurances that the Merger will be completed at all, or if completed, that it will be completed by such time.

Record Date and Quorum (page 20)

Only holders of record of Telenav’s Common Stock as of the close of business on [●], 202[●], which is the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. If you own shares that are registered in the name of someone else, such as a broker, you need to direct that person to vote those shares or obtain an authorization from them and vote the shares yourself at the meeting. On the record date, there were [●] shares of Common Stock outstanding.

To conduct any business at the special meeting, a quorum must be present in person or represented by valid proxies. The holders of a majority of the outstanding shares of Common Stock, present in person or by proxy, will constitute a quorum for the transaction of business at the meeting. For more information, see “The Special Meeting of Telenav’s Stockholders—Who Can Vote at the Special Meeting” and “The Special Meeting of Telenav’s Stockholders—Quorum for the Special Meeting.”

Votes Required (page 20)

Approval of the Merger Agreement Proposal requires the affirmative vote of the holders of (i) at least 66 and two-thirds percent of the outstanding shares of Common Stock not beneficially owned by V99, Merger Sub, H.P. Jin, Samuel Chen, Fiona Chang, Yi-Ting Chen, Yi-Chun Chen, Changbin Wang and Digital Mobile Venture Limited (“Digital”), and any affiliate of the foregoing or trust in which any of the foregoing are a beneficiary (collectively, the “Purchaser Group”) (the “Two-Thirds of the Minority Approval”), which approval will also serve as a waiver of certain limitations set forth in Section 203 of the DGCL, and (ii) at least a majority of the outstanding shares of Common Stock (the “Company Stockholder Approval”).

Approval of the proposal for adjournment or postponement of the special meeting, if necessary or appropriate, to solicit additional proxies in the event that there are not sufficient votes at the time of the special meeting to approve the Merger Agreement Proposal (the “Adjournment Proposal”) requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock having voting power present in person or represented by proxy at the special meeting and entitled to vote on the subject matter.



 

3


Table of Contents

Approval of the nonbinding, advisory proposal of compensation that will or may become payable to Telenav’s named executive officers in connection with the Merger (the “Executive Compensation Proposal”) requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock having voting power present in person or represented by proxy at the special meeting and entitled to vote on the subject matter.

The Special Meeting

See “Questions and Answers About the Special Meeting and Merger” beginning on page 12 and “The Special Meeting of Telenav’s Stockholders” beginning on page 20.

Recommendation of the Telenav Special Committee and the Telenav Board (page 43)

A special committee (the “Special Committee”) of the board of directors of Telenav (the “Telenav Board”), consisting entirely of independent and disinterested directors, carefully reviewed and considered the terms and conditions of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger. The Special Committee unanimously (i) determined that the Merger Agreement and the Merger are advisable and in the best interests of Telenav and its stockholders, (ii) approved the Merger Agreement and the Merger, (iii) recommended that the Telenav Board approve and adopt the Merger Agreement and the Merger, and (iv) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger.

After due and careful discussion and consideration, and upon the unanimous recommendation of the Special Committee, the Telenav Board (unanimously, among those independent and disinterested directors voting) (i) determined that the Merger Agreement and the Merger are advisable and fair to, and in the best interests of, Telenav and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the Merger, and (iii) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger, subject to the right of the Telenav Board to withdraw or modify such recommendation in accordance with the Merger Agreement.

The Special Committee further believes that the Merger is fair to Telenav’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act. The Telenav Board, on behalf of Telenav, further believes that the Merger is fair to Telenav’s “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act.

For a discussion of the material factors considered by the Special Committee in reaching its conclusions, see “Special FactorsRecommendation of the Telenav Special Committee and the Telenav Board of Directors; Purposes and Reasons for the Merger; Fairness of the Merger.”

Accordingly, the Special Committee recommends, and the Telenav Board (unanimously, among those independent and disinterested directors voting) recommends, a vote “FOR” the Merger Agreement Proposal, “FOR” the Adjournment Proposal, and “FOR” the Executive Compensation Proposal.

Interests of Telenav’s Directors and Executive Officers in the Merger (page 69)

In considering the recommendation of the Special Committee and the Telenav Board, you should be aware that some of Telenav’s directors and executive officers have interests in the Merger that are different from, or in addition to, your interests as a stockholder and that may present actual or potential conflicts of interest. These interests include, among others:

 

   

with respect to certain executive officers, the opportunity to receive cash severance payments and benefits and vesting acceleration of outstanding unvested equity awards in connection with a qualifying termination of employment pursuant to change in control and severance agreements entered into with Telenav; and

 

   

continued indemnification and directors’ and officers’ liability insurance applicable to the period prior to completion of the Merger.



 

4


Table of Contents

The Telenav Board was aware of these interests and considered them, among other matters, prior to making its determination to recommend the adoption of the Merger Agreement to Telenav stockholders. For more information, see the section of this proxy statement captioned “Special Factors—Interests of Telenav’s Directors and Executive Officers in the Merger.”

Opinion of Financial Advisor to the Telenav Special Committee (page 51)

In connection with the Merger, B. Riley Securities, Inc. (“B. Riley”) rendered to the Special Committee its oral opinion, subsequently confirmed in writing, that as of November 2, 2020, and based upon and subject to the qualifications, limitations, assumptions and other matters considered by B. Riley in connection with the preparation of the opinion, the consideration to be received by the holders of shares of Common Stock (other than shares of Common Stock beneficially owned by the Purchaser Group) in the Merger pursuant to the Merger Agreement is fair from a financial point of view to such holders, as more fully described in the section of this proxy statement captioned “Special FactorsOpinion of Financial Advisor to the Telenav Special Committee.”

The full text of B. Riley’s written opinion to the Special Committee, dated November 2, 2020, is attached as Annex B to this proxy statement and is incorporated by reference herein in its entirety. The summary of the opinion of B. Riley in this proxy statement is qualified in its entirety by reference to the full text of the opinion. You are encouraged to read B. Riley’s opinion carefully. The written opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by B. Riley in rendering the opinion. B. Riley’s opinion was directed to the Special Committee, in its capacity as such, and addressed only the fairness from a financial point of view of the Merger Consideration to be received by holders of shares of Common Stock (other than shares of Common Stock beneficially owned by the Purchaser Group) in the Merger pursuant to the Merger Agreement as of the date of the opinion and did not address any other aspects of the Merger. B. Riley’s opinion was not intended to, and does not, constitute advice or a recommendation to any holder of Common Stock as to how to vote at the special meeting to be held in connection with the Merger or whether to take any other action with respect to the Merger.

Material U.S. Federal Income Tax Consequences of the Merger (page 80)

In general, the Merger will be a taxable transaction for you as a U.S. holder (as defined in “Special Factors—Material U.S. Federal Income Tax Consequences of the Merger”) of Common Stock. For U.S. federal income tax purposes, you will generally recognize gain or loss measured by the difference, if any, between the cash you receive (before reduction for any required withholding tax) in exchange for your Common Stock in the Merger and your tax basis in your Common Stock. Gain or loss will be determined separately for each block of your Common Stock (i.e., shares you acquired at the same cost in a single transaction). You should consult your own tax advisor for a complete analysis of the effect of the Merger on your U.S. federal, state or local and/or non-U.S. taxes.

The “Go-Shop” Period; Solicitation of Other Offers (page 94)

In the Merger Agreement, until 11:59 p.m., Pacific Time, on December 2, 2020 (the “No-Shop Period Start Date”), Telenav and its subsidiaries and their respective representatives had the right to (1) initiate, solicit, facilitate and encourage any inquiry or the making of any proposal or offer that constitutes, or could reasonably be expected to constitute or lead to an Acquisition Proposal (as defined in “The Merger Agreement—The ‘Go-Shop’ Period; Solicitation of Other Offers”), and (2) engage in, enter into or otherwise participate in any discussions or negotiations with any persons (and their respective representatives, including potential Financing Sources (as defined below) with respect to any Acquisition Proposals (or inquiries, proposals or offers or other efforts that constitute or could reasonably be expected to constitute or lead to an Acquisition Proposal, including any person that has informed Telenav or its representatives of an intention to make or has publicly announced an intention to make an Acquisition Proposal) and cooperate with or assist or participate in or facilitate or encourage



 

5


Table of Contents

any such inquiries, proposals, offers, discussions or negotiations or any effort or attempt to make any Acquisition Proposals, including granting a waiver, amendment or release under any confidentiality or pre-existing standstill or similar provision with respect to Telenav and its subsidiaries.

From the date of the Merger Agreement until the No-Shop Period Start Date, Telenav and its financial advisor contacted 39 parties which were potential acquirers (for a total of 109 parties from the date of V99’s initial offer). Although Telenav entered into nondisclosure agreements with six parties from the date of V99’s initial offer and held discussions with three parties, no party made an offer to acquire Telenav or other proposal that the Special Committee determined would constitute or could reasonably be expected to constitute an Acquisition Proposal.

No Solicitation; Recommendations of the Merger (page 96)

In the Merger Agreement, Telenav agreed that, except as it may relate to an Excluded Party (as defined in “The Merger Agreement—The ‘Go-Shop’ Period; Solicitation of Other Offers”), and except for actions or omissions taken at the direction of V99 or Merger Sub (together, the “Purchaser Parties”), from the No-Shop Period Start Date until the Effective Time, neither Telenav nor its subsidiaries shall, and Telenav and its subsidiaries shall instruct their respective representatives not to, directly or indirectly:

 

   

solicit or initiate, or knowingly facilitate or knowingly encourage the submission of any Acquisition Proposal;

 

   

furnish any nonpublic information regarding or afford access to the properties, books or records of Telenav or its subsidiaries to any person for the purpose of knowingly facilitating or knowingly encouraging an Acquisition Proposal;

 

   

engage in discussions or negotiations with any person for the purpose of knowingly facilitating or knowingly encouraging any Acquisition Proposal;

 

   

approve, endorse, recommend or enter into any agreement in principle, letter of intent, Merger Agreement, acquisition agreement or other similar agreement relating to any Acquisition Proposal, other than an Acceptable Confidentiality Agreement (as defined in “The Merger Agreement—The ‘Go-Shop’ Period; Solicitation of Other Offers”) entered into in accordance with the terms of the Merger Agreement; or

 

   

resolve to propose, agree or publicly announce an intention to do any of the foregoing.

Telenav agreed further that it would immediately cease any solicitations, discussions or negotiations with any person in connection with any Acquisition Proposal, provided that Telenav could continue to engage in such activities with Excluded Parties until the receipt of the Company Stockholder Approval and Two-Thirds of the Minority Approval.

At any time prior to obtaining the Company Stockholder Approval and Two-Thirds of the Minority Approval, Telenav may furnish nonpublic information regarding Telenav, afford access to, and engage in discussions or negotiations with, any person in response to an Acquisition Proposal submitted to Telenav after the No-Shop Period Start Date if, among other things, (i) the Telenav Board or any Independent Committee (as defined in “The Merger Agreement—The ‘Go-Shop’ Period; Solicitation of Other Offers”) concludes in good faith, after consultation with its financial advisor and outside legal counsel, that such Acquisition Proposal constitutes or is reasonably likely to constitute or lead to a Superior Proposal (as defined in “The Merger Agreement—No Solicitation; Recommendations of the Merger”), (ii) the Telenav Board or any Independent Committee determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, and



 

6


Table of Contents

(iii) (x) prior to furnishing nonpublic information regarding Telenav, Telenav receives from such person or group of persons an executed Acceptable Confidentiality Agreement and (y) subsequent to entering into discussions with such person, Telenav gives V99 written notice setting forth the identity of such person.

Neither Telenav, nor the Telenav Board nor any committee thereof may (i) withhold, withdraw, amend, qualify or modify, in a manner adverse to the Purchaser Parties, the recommendation that Telenav stockholders approve the Merger Agreement Proposal, (ii) adopt, approve or recommend any Acquisition Proposal, (iii) fail to include a recommendation that Telenav stockholders approve the Merger Agreement Proposal in this proxy statement or fail to recommend against any Acquisition Proposal as promptly as practicable after the commencement of such Acquisition Proposal (but in any event within ten (10) business days following such commencement), (iv) following receipt of an Acquisition Proposal, fail to reaffirm its approval or recommendation of the Merger Agreement and the Merger within ten (10) business days after receipt of any reasonable request to do so from V99, or (v) resolve or agree to take any of the foregoing actions (any of the actions or events described in any of the foregoing clauses (i) – (v), a “Change in Recommendation”), except that prior to obtaining the Company Stockholder Approval or Two-Thirds of the Minority Approval, the Telenav Board or any Independent Committee may make a Change in Recommendation in response to an Intervening Event (each as defined in “The Merger Agreement—No Solicitation; Recommendations of the Merger”) if it determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, or in response to an Acquisition Proposal, if it determines in good faith, after consultation with its financial advisor and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal and that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law.

Conditions to Completion of the Merger (page 102)

The completion of the Merger is subject to, among other things, the following conditions:

 

   

the adoption of the Merger Agreement by the holders of Telenav’s Common Stock pursuant to the votes described above in this Summary Term Sheet;

 

   

the absence of any laws or orders that have the effect of preventing the consummation of the Merger;

 

   

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

 

   

each party’s respective representations and warranties in the Merger Agreement being true and correct as of the date of the Merger Agreement and the closing date in the manner described in “The Merger Agreement—Conditions to Completion of the Merger;” and

 

   

each party’s performance of its obligations and compliance with its covenants, in each case in all material respects, required by the Merger Agreement to be performed or complied with prior to the closing date of the Merger.

Financing (page 103)

The Merger Agreement does not contain any financing-related closing condition. In connection with the financing of the Merger, Dr. Jin, Mr. Chen and Digital (the “Financing Sources”) and V99 have entered into a commitment letter, dated as of November 2, 2020, as amended December 17, 2020 (the “Commitment Letter”), pursuant to which the Financing Sources have committed jointly and severally, to provide debt financing in an amount sufficient to pay (a) (i) the aggregate of all Merger Consideration payable in connection with the Merger, (ii) all fees and expenses associated with the transactions incurred by the Purchaser Parties or any of their respective affiliates and required to be paid on the closing date by such party, and (iii) all amounts necessary to repay or prepay any indebtedness of Telenav required to be repaid or prepaid at the closing of the Merger (the



 

7


Table of Contents

sum of clauses (i) through (iii), the “Commitment Amount”), or (b) the Parent Termination Fee (as defined below), if applicable. The funding of the Commitment Amount is subject only to the satisfaction by Telenav or waiver by V99 of the conditions to V99’s obligations to close the Merger that are applicable to Telenav. Subject to the terms and conditions of the Commitment Letter, Telenav has certain third party beneficiary rights to enforce the terms of the Commitment Letter against the Financing Sources.

Pursuant to the Commitment Letter, V99, Merger Sub and the Financing Sources are contemplating to enter into a credit agreement pursuant to which the debt funding sources will provide a term loan to Telenav. Although the terms of the loan are still being negotiated at this time, Telenav has been advised by V99 that the loan is expected to bear an interest rate equal to the sum of the Internal Revenue Service’s current “applicable federal rate” plus 1% per annum and to require a balloon payment equal to the total principal amount and all interest accrued thereon upon the maturity date, which is expected to be the fifth anniversary of the closing date of the loan. Telenav has been advised by V99 that the loan is intended to be unsecured. As currently contemplated, Telenav has been advised by V99 that V99 does not have any plans or arrangement to finance or repay the loan other than out of the revenues generated from business operations of Telenav or V99.

Termination of the Merger Agreement (page 104)

The Merger Agreement may be terminated, and the Merger may be abandoned at any time prior to its completion:

 

   

by mutual written agreement of Telenav and V99;

 

   

by either Telenav or V99, if:

 

   

the Merger has not occurred by May 2, 2021 (the “Initial Termination Date”); provided, however, that if on such date, the HSR Condition (as defined below), any other consents, approvals or waivers from governmental entities or the No Injunction Condition (each, as defined in “The Merger Agreement—Conditions to Completion of the Merger”) have not been satisfied, and each of other conditions to closing have been satisfied or waived, or are capable of being satisfied if the closing date were to occur on such date (such requirements, the “Automatic Extension Conditions”), then the Initial Termination Date will be automatically extended to July 31, 2021 (the “Second Termination Date”); provided further that, if on the Second Termination Date, the Automatic Extension Conditions are met, then the Second Termination Date will be automatically extended to October 29, 2021 (the “Third Termination Date”); provided further that the right to terminate the Merger Agreement will not be available to any party whose breach of its obligations under the Merger Agreement has been a primary cause of the failure to consummate the Merger by the applicable termination date;

 

   

a governmental entity having competent jurisdiction has enacted or issued a law or order, or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger and such order or other action has become final and nonappealable; or

 

   

the Company Stockholder Approval and the Two-Thirds of the Minority Approval have not been obtained at the special meeting (after taking into account any adjournment or postponement thereof); provided, however, that V99 will not have the right to terminate the Merger Agreement if the failure to obtain the Company Stockholder Approval is due to the failure of one or more stockholder parties to the Voting and Support Agreement (as defined in “—Voting and Support Agreement”) to vote the shares of Common Stock beneficially owned by it in accordance with the Voting and Support Agreement;



 

8


Table of Contents
   

by V99, if:

 

   

there has been a breach or failure of any representation, warranty or covenant of Telenav under the Merger Agreement, which breach or failure has given rise to the failure of any of V99’s conditions to effect the Merger, which has not been cured within thirty (30) days of the receipt by Telenav of written notice from V99 of such breach or failure stating V99’s intention to terminate the Merger Agreement; provided, however, that, V99 will not have the right to terminate the Merger Agreement pursuant to this provision if it is in material breach of the Merger Agreement; or

 

   

prior to obtaining the Company Stockholder Approval and the Two-Thirds of the Minority Approval, the Telenav Board or an Independent Committee has effected a Change in Recommendation; or

 

   

by Telenav, if:

 

   

there has been a breach or failure of any representation, warranty or covenant of V99 or Merger Sub under the Merger Agreement, which breach or failure has given rise to the failure of any of Telenav’s conditions to effect the Merger, which has not been cured within thirty (30) days of the receipt by V99 of written notice from Telenav of such breach or failure stating Telenav’s intention to terminate the Merger Agreement; provided, however, that, Telenav will not have the right to terminate the Merger Agreement pursuant to this provision if it is in material breach of the Merger Agreement;

 

   

If, prior to the receipt of the Company Stockholder Approval and the Two-Thirds of the Minority Approval, the Telenav Board authorizes Telenav to enter into a definitive agreement with respect to a Superior Proposal;

 

   

if (a) all mutual conditions to the Merger have been satisfied or waived, (b) all of the conditions to the Purchaser Parties’ obligations to effect the Merger have been satisfied or waived, (c) Telenav has irrevocably confirmed by written notice to V99 that (1) all of the conditions to Telenav’s obligations to effect the Merger have been satisfied or waived and (2) Telenav stands ready, willing and able to consummate the Merger and the transactions contemplated thereby, and (d) V99 fails to consummate the closing within two (2) business days of such notice; or

 

   

V99 has materially breached its obligation under the Merger Agreement to maintain at least $6,000,000 in its identified bank account.

Termination Fees and Expenses (page 106)

If the Merger Agreement is terminated under certain circumstances, Telenav will be obligated to pay V99 a termination fee of $3.5 million (or $2.0 million in the event an Excluded Party makes a Superior Proposal and the Special Committee changes its recommendation with respect to such Superior Proposal prior to obtaining the Company Stockholder Approval and the Two-Thirds of the Minority Approval), and V99 will be obligated to pay Telenav a termination fee of $3.5 million.

Specific Performance (page 107)

Under certain circumstances, Telenav and V99 are entitled to specific performance of the terms of the Merger Agreement, in addition to any other remedy at law or equity.

Voting and Support Agreement (page 110)

Concurrently with the initial execution of the Merger Agreement, as an inducement to Telenav to enter into the Merger Agreement, Dr. Jin, Mr. Chen, Fiona Chang, Digital, Yi-Ting Chen, Yi-Chun Chen and Changbin Wang (the “Support Agreement Stockholders”) entered into a voting and support agreement (the “Voting and



 

9


Table of Contents

Support Agreement”) with Telenav, pursuant to which, among other things, and subject to the terms and conditions set forth therein, the Support Agreement Stockholders agreed to vote all shares of Common Stock owned by them in accordance with the publicly disclosed recommendation to Telenav stockholders by action of the Telenav Board, the Independent Committee or any other duly constituted committee of the Telenav Board (a “Public Board Recommendation”), irrespective of whether such Public Board Recommendation is to vote: (i) in favor of the adoption of the Merger Agreement and the approval of the Merger and the transactions contemplated thereby or against an extraordinary corporate transaction or proposal provided that certain specified circumstances are met, (ii) subject to specified exceptions, in favor of an Accepted Superior Proposal (as defined below) if, in the event that the Merger Agreement is terminated, the Telenav Board or Independent Committee has delivered a Change in Recommendation Notice (as defined in “The Merger Agreement—No Solicitation; Recommendations of the Merger”) to V99 no later than December 16, 2020 with respect to a Superior Proposal received from an Excluded Party (including any amendment to such Superior Proposal made in response to a proposal by V99 during any applicable Notice Period) (an “Accepted Superior Proposal”), or (iii) in favor of or against any other matter determined by action of the Telenav Board, the Independent Committee or any other duly constituted committee of the Telenav Board, in good faith, to be necessary or appropriate in connection with the Merger Agreement and the Merger or any Accepted Superior Proposal, in each case if recommended to Telenav stockholders by a Public Board Recommendation. As of [●], 202[●], the record date for the special meeting, the Support Agreement Stockholders held in the aggregate [●] shares of Common Stock, representing approximately [●]% of the outstanding shares of Common Stock. For more information, see the section of this proxy statement captioned “Voting and Support Agreement.”

Appraisal Rights (page 122)

Under the DGCL, holders of Common Stock who do not vote in favor of the Merger Agreement Proposal will have the right to seek appraisal of the fair value of their shares of Common Stock as determined by the Court of Chancery of the State of Delaware if the Merger is completed, but only if they comply with all requirements of the DGCL for exercising appraisal rights (including Section 262 of the DGCL, the text of which can be found in Annex C to this proxy statement), which are summarized in this proxy statement. This appraisal amount could be more than, the same as or less than the Merger Consideration. Any holder of Common Stock intending to exercise appraisal rights must, among other things, submit a written demand for an appraisal to Telenav prior to the vote on the Merger Agreement Proposal at the special meeting and must not vote or otherwise submit a proxy in favor of the Merger Agreement Proposal. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights.

Litigation Related to the Merger (page 81)

As of the date of this proxy statement, Telenav is aware of one complaint related to the Merger Agreement having been filed: George P. Assad, Jr. v. Telenav, Inc., et al., C.A. No. 2020-0950-JTL (Del. Ch.) (filed Nov. 6, 2020) (the “Delaware Action” and such complaint filed in the Delaware Action, the “Delaware Complaint”). The Delaware Complaint was brought by a putative stockholder against Telenav and members of the Telenav Board and Special Committee, and it asserts one count for violation of Section 203 of the DGCL (“Section 203”). Specifically, the Delaware Complaint alleges that Dr. Jin and/or his affiliated entities reached an “agreement, arrangement or understanding,” as those terms are defined in Section 203, with Samuel Chen and/or his affiliates, prior to Special Committee and Board approval of the Merger, that shares owned by Mr. Chen and/or his affiliates would be voted in favor of the Merger and, therefore, triggered Section 203’s requirement that at least 66 and two-thirds percent of the outstanding stock unaffiliated with Dr. Jin and Mr. Chen vote in favor of the Merger. The Delaware Complaint seeks, among other things, an order enjoining the stockholder vote on the Merger. Telenav disputes the Delaware Complaint’s allegations, including the allegation that Dr. Jin and Mr. Chen entered into any “agreement, arrangement, or understanding” with respect to the Merger prior to the Telenav Board’s approval of the Merger and/or prior to the Telenav Board’s approval of any such “agreement,



 

10


Table of Contents

arrangement, or understanding.” A preliminary injunction hearing is currently set for January 15, 2021. As of the date of this proxy statement, the parties to the Delaware Action have agreed that the Merger will be conditioned on the vote described in the section of this proxy statement captioned “The Special Meeting of Telenav’s Stockholders—Votes Required,” and have entered into and filed with the Delaware Court of Chancery a stipulation memorializing that agreement for the purpose of mooting the Delaware Action. The plaintiff in the Delaware Action has agreed to voluntarily dismiss the Delaware Action within three (3) days of the date of filing of this proxy statement.

Market Price of Telenav’s Common Stock

The closing trading price of the Common Stock on the NASDAQ Global Market (“NASDAQ”) was $3.60 on September 30, 2020 (the “Last Unaffected Trading Day”), the day before Dr. Jin filed an amendment to his Schedule 13D after the close of regular market trading hours disclosing that V99 had delivered a letter addressed to the Special Committee on September 30, 2020 pursuant to which it proposed to acquire all of the issued and outstanding shares of Common Stock for cash consideration of $4.32 per share. The closing trading price of the Common Stock on NASDAQ was $3.97 on November 2, 2020, the day the Merger Agreement was approved by the Special Committee and the Telenav Board. On [●], 202[●], which is the latest practicable trading day before this proxy statement was printed, the closing price for the Common Stock on NASDAQ was $[●].

Additional Information

You can find more information about Telenav in the periodic reports and other information Telenav files with the U.S. Securities and Exchange Commission (the “SEC”). The information is available at the website maintained by the SEC at www.sec.gov. See “Where You Can Find More Information” beginning on page 128.



 

11


Table of Contents

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND MERGER

 

Q:

What is the proposed Merger?

 

A:

The proposed transaction is the acquisition of Telenav by V99. V99 has agreed to acquire Telenav pursuant to the Merger Agreement, among V99, Merger Sub and Telenav. Merger Sub is a wholly owned subsidiary of V99. Once the Merger Agreement Proposal has been approved by Telenav stockholders and the other closing conditions under the Merger Agreement have been satisfied or waived, Merger Sub will merge with and into Telenav. Telenav will be the Surviving Corporation in the Merger and will become a wholly owned subsidiary of V99.

The Merger Agreement is attached as Annex A to this proxy statement.

 

Q:

What will Telenav stockholders receive in the Merger?

 

A:

If the Merger is completed, the holders of Common Stock will receive $4.80 for each share of Common Stock that they own immediately prior to the Effective Time, unless they exercise and perfect their appraisal rights under the DGCL.

 

Q:

Where and when is the special meeting?

 

A:

The special meeting will take place at [●], Pacific Time, on [●], 2021. Due to public health concerns regarding the COVID-19 pandemic, for the safety and wellbeing of stockholders, employees and other community members, and taking into account the protocols of local, state and federal governments, the special meeting will be held in a virtual format only. To attend the meeting, please visit www.virtualshareholdermeeting.com/TNAV2021SM. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

 

Q:

Who can attend and vote at the special meeting?

 

A:

All holders of Common Stock as of the close of business on [●], 202[●], the record date for the special meeting, including stockholders of record and beneficial owners, are invited to attend the special meeting, which will be held in a virtual only format at www.virtualshareholdermeeting.com/TNAV2021SM.

If you are a stockholder of record, you will need your assigned 16-digit control number to vote shares electronically at the special meeting. The control number can be found on the proxy card, voting instruction form, or other applicable proxy notices. If you hold your shares in “street name,” and you do not have the assigned 16-digit control number, please follow the instructions on the voting instruction form, or other applicable proxy notices, furnished by your bank, broker or other nominee to vote your shares accordingly.

Telenav encourages you to access the meeting prior to the start time. Please allow ample time for online check-in, which will begin at [●], Pacific Time, on [●], 2021. If you have difficulties during the check-in time or during the meeting, please call the technical support number that will be posted on the virtual meeting platform’s log in page.

 

Q:

How many votes do Telenav stockholders have?

 

A:

Holders of Common Stock have one vote for each share of Common Stock that such holder owned at the close of business on [●], 202[●], the record date for the special meeting.

 

12


Table of Contents
Q:

What vote of Telenav stockholders is required to adopt and approve the Merger Agreement?

 

A:

Approval of the Merger Agreement Proposal requires the affirmative vote of the holders of (i) at least 66 and two-thirds percent of the outstanding shares of Common Stock not beneficially owned by any member of the Purchaser Group, which approval will also serve as a waiver of certain limitations set forth in Section 203 of the DGCL, and (ii) at least a majority of the outstanding shares of Common Stock.

 

Q:

What vote of Telenav stockholders is required to approve the Adjournment Proposal and the Executive Compensation Proposal?

 

A:

Approval of the Adjournment Proposal and the Executive Compensation Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock having voting power present in person or represented by proxy at the special meeting and entitled to vote on the subject matter.

 

Q:

How does the Telenav Board recommend that I vote?

 

A:

After due and careful discussion and consideration, and upon the unanimous recommendation of the Special Committee, the Telenav Board, unanimously among those independent and disinterested directors voting, (i) determined that the Merger Agreement and the Merger are advisable and fair to, and in the best interests of, Telenav and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the Merger, and (iii) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger, subject to the right of the Telenav Board to withdraw or modify such recommendation in accordance with the Merger Agreement.

Accordingly, the Special Committee recommends, and the Telenav Board (unanimously, among those independent and disinterested directors voting) recommends, a vote “FOR” the Merger Agreement Proposal, “FOR” the Adjournment Proposal, and “FOR” the Executive Compensation Proposal.

You should be aware that some of Telenav’s directors and executive officers are subject to agreements or arrangements that may provide them with interests in the Merger that are different from, or are in addition to, the interests of Telenav stockholders generally. These interests relate to equity securities held by such persons and their affiliates; change of control severance covering Telenav’s executive officers; and indemnification of Telenav’s directors and officers by the Surviving Corporation following the Merger. See the section of this proxy statement captioned “Special Factors—Interests of Telenav’s Directors and Executive Officers in the Merger.”

 

Q:

Have a majority of directors who are not employees of Telenav retained an unaffiliated representative to act solely on behalf of unaffiliated Telenav stockholders for purposes of negotiating the terms of the Merger or preparing a report concerning the fairness of the Merger?

 

A:

Neither the Special Committee nor a majority of the directors on the Telenav Board who are not employees of the Company retained an unaffiliated representative to act solely on behalf of the unaffiliated stockholders for purposes of negotiating the terms of the Merger Agreement and the Merger. The Special Committee and the directors on the Telenav Board who are not employees of the Company believe that it was not necessary to retain an unaffiliated representative because the Special Committee was charged with representing the interests of the unaffiliated stockholders and the Company, the Special Committee consisted solely of directors who are not officers or controlling stockholders of Telenav or any of the Purchaser Group Members, the Special Committee engaged its own financial and legal advisors to act on its behalf and was actively involved in deliberations and negotiations regarding the merger on behalf of the unaffiliated stockholders.

 

Q:

What do I need to do now?

 

A:

Please read this proxy statement carefully, including its annexes, to consider how the Merger affects you. After you read this proxy statement, you should complete, sign and date your proxy card and mail it in the

 

13


Table of Contents
  enclosed return envelope or submit your proxy over the telephone or over the Internet as soon as possible so that your shares can be voted at the special meeting of Telenav stockholders. If you sign, date and mail your proxy card without indicating how you wish to vote, your shares will be voted in accordance with the recommendations of the Telenav Board, as applicable, with respect to each proposal.

 

Q:

Have any Telenav stockholders already agreed to support the Merger Agreement?

 

A:

Concurrently with the initial execution of the Merger Agreement, the Support Agreement Stockholders entered into the Voting and Support Agreement with Telenav, pursuant to which the Support Agreement Stockholders agreed to vote all shares of Common Stock owned by them in accordance with the Public Board Recommendation. As of [●], 202[●], the record date for the special meeting, the Support Agreement Stockholders held in the aggregate [●] shares of Common Stock, representing approximately [●]% of the outstanding shares of Common Stock.

 

Q:

What happens if I do not return a proxy card or otherwise vote?

 

A:

The failure to return your proxy card or to otherwise vote will have the same effect as voting against the Merger Agreement Proposal, but it will have no effect on the Adjournment Proposal or the Executive Compensation Proposal. A vote to abstain will have the same effect as voting against the Merger Agreement Proposal, against the Adjournment Proposal and against the Executive Compensation Proposal.

 

Q:

How can I vote my shares during the special meeting?

 

A:

Stockholders of record may vote their shares electronically during the meeting by logging in at www.virtualshareholdermeeting.com/TNAV2021SM. If you are a stockholder of record, you will need your assigned 16-digit control number to vote shares electronically at the special meeting. The control number can be found on the proxy card, voting instruction form, or other applicable proxy notices. Beneficial owners may vote their shares electronically during the meeting only if they obtain a “legal proxy” from the broker, bank or nominee that holds the shares giving the beneficial owner the right to vote the shares. Voting online during the meeting will replace any previous votes.

Whether or not you plan to attend the meeting, Telenav urges you to vote by proxy to ensure your vote is counted.

 

Q:

How can I vote my shares without attending the special meeting?

 

A:

Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the special meeting. If you are a stockholder of record, you may vote by submitting a proxy over the Internet, by telephone or by mail; please refer to the voting instructions below. If you hold shares beneficially in street name, you may vote by submitting voting instructions to your broker, bank or nominee; please refer to the voting instructions provided to you by your broker, bank or nominee. If you vote by proxy, your shares will be voted as you specify. You may still attend the special meeting and vote in person if you have already voted by proxy.

 

   

Internet—Stockholders of record with Internet access may submit proxies over the Internet by following the instructions at www.proxyvote.com. You will be asked to provide your assigned 16-digit control number. Your vote must be received by [●], Pacific Time, on [●], 2021 to be counted.

 

   

Telephone—Stockholders of record may submit proxies telephonically by dialing the toll-free telephone number located on the enclosed proxy card and following the recorded instructions. Your vote must be received by [●], Pacific Time, on [●], 2021 to be counted.

 

14


Table of Contents
   

Mail—Stockholders of record may submit proxies by mail using the enclosed proxy card. Simply complete, sign and date the enclosed proxy card and return it promptly in the enclosed return envelope. If you return your signed proxy card to Telenav before the special meeting, Telenav will vote your shares as you direct on the signed proxy card.

If your shares of Common Stock are held in “street name” by your broker, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from Telenav. Your broker will vote your shares only if you provide instructions to your broker on how to vote. You should instruct your broker to vote your shares, following the procedures provided by your broker. Without such instructions, your shares will not be voted, which will have the same effect as voting against the Merger Agreement Proposal. See “The Special Meeting of Telenav’s Stockholders—Voting by Proxy.”

Telenav provides Internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

 

Q:

What does it mean if I receive more than one set of materials?

 

A:

This means you own shares of the Common Stock that are registered under different names. For example, you may own some shares directly as a stockholder of record and other shares through a broker or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. You must complete, sign, date and return each of the proxy cards that you receive, or vote all of your shares over the telephone or over the Internet in accordance with the instructions above in order to vote all of the shares you own. Each proxy card you receive comes with its own prepaid return envelope and control number(s); if you vote by mail, make sure you return each proxy card in the return envelope that accompanies that proxy card, and if you vote by telephone or over the Internet, use the control number(s) on each proxy card.

 

Q:

Am I entitled to appraisal rights?

 

A:

Under Section 262 of the DGCL, stockholders will be entitled to dissent and to seek appraisal for their shares only if certain criteria are satisfied. See the section of this proxy statement captioned “Appraisal Rights” and Annex C of this proxy statement.

 

Q:

Is the Merger expected to be taxable to owners of the Common Stock?

 

A:

In general, your receipt of the cash consideration for each of your shares of the Common Stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes and may be a taxable transaction under U.S. state or local and/or non-U.S. tax laws. You should read the section of this proxy statement captioned “Special Factors—Material U.S. Federal Income Tax Consequences of the Merger” for a more detailed discussion of the U.S. federal income tax consequences of the Merger. You should also consult your own tax advisor regarding the U.S. state or local and/or non-U.S. tax consequences of the Merger in light of your particular circumstances.

 

Q:

When do you expect the Merger to be completed?

 

A:

Telenav and V99 are working to complete the Merger as quickly as possible after the special meeting. Telenav anticipates that the Merger will be completed in the first quarter of calendar 2021. In order to complete the Merger, Telenav must obtain the Company Stockholder Approval and the Two-Thirds of the Minority Approval, and a number of other closing conditions under the Merger Agreement must be satisfied or waived. See “The Merger Agreement—Conditions to Completion of the Merger.”

 

15


Table of Contents
Q:

Should I send in my stock certificates now?

 

A:

No. At or about the date of completion of the Merger, if you hold certificated shares, you will receive a letter of transmittal with instructions informing you how to send in your stock certificates to V99’s Paying Agent (as defined below) in order to receive the Merger Consideration. You should use the letter of transmittal to exchange stock certificates for the Merger Consideration to which you are entitled as a result of the Merger. DO NOT SEND ANY STOCK CERTIFICATES WITH YOUR PROXY.

If you own shares of Common Stock that are held in “street name” by your broker, you will receive instructions from your broker as to how to surrender your “street name” shares and receive cash for those shares following the completion of the Merger.

 

Q:

Who can help answer my questions?

 

A:

The information provided above in the Q&A format is for your convenience only and is merely a summary of some of the information in this proxy statement. You should carefully read the entire proxy statement, including its annexes and the documents incorporated herein by reference. If you would like additional copies of this proxy statement, without charge, or if you have questions about the Merger, including the procedures for voting your shares, you should contact Telenav’s proxy solicitation agent:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, NY 10018

Stockholders May Call Toll-Free: (800) 322-2885

Banks & Brokers May Call Collect: (212) 929-5500

You may also wish to consult your legal, tax and/or financial advisors with respect to any aspect of the Merger, the Merger Agreement or other matters discussed in this proxy statement.

 

16


Table of Contents

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This proxy statement, and the documents incorporated by reference in this proxy statement, include “forward-looking statements” that reflect our current views, including without limitation views as to the expected completion and timing of the Merger. There are forward-looking statements throughout this proxy statement, including, among others, under the headings “Summary Term Sheet,” “Questions and Answers about the Special Meeting and Merger,” “Special Factors—Plans for Telenav After the Merger,” “Special Factors—Certain Effects of the Merger,” “Special Factors—Recommendation of the Telenav Special Committee and the Telenav Board of Directors; Purposes and Reasons for the Merger; Fairness of the Merger,” “Special Factors—Opinion of Financial Advisor to the Telenav Special Committee,” “Special Factors—Financial Projections,” “Special Factors—Sources and Amounts of Funds or Other Consideration; Expenses,” and “The Merger Agreement,” and in statements containing the words “believes,” “expects,” “anticipates,” “intends,” “estimates” or other similar expressions. You should be aware that forward-looking statements involve known and unknown risks and uncertainties. There can be no assurances that the actual results or developments described in such forward-looking statements will be realized, or even if realized, that they will have the expected effects on the business or operations of Telenav. These forward-looking statements speak only as of the date on which the statements were made. Telenav undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this proxy statement, except as required by law. In addition to other factors and matters contained or incorporated in this document, the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

 

   

the inability to complete timely, if at all, the Merger due to the failure to obtain stockholder approval or failure to satisfy the other conditions precedent to the completion of the Merger;

 

   

the risk that the proposed Merger disrupts Telenav’s current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction;

 

   

the risk related to diverting management’s attention from Telenav’s ongoing business operations;

 

   

the risk that the Merger Agreement may be terminated in circumstances that require Telenav to pay V99 a termination fee of $3.5 million;

 

   

the outcome of any legal proceedings that may be instituted against Telenav and others related to the Merger;

 

   

the effect of the announcement or pendency of the Merger on Telenav’s business relationships, operating results and business generally;

 

   

unexpected costs, charges or expenses resulting from the proposed Merger;

 

   

the impact of the COVID-19 pandemic on business activity, including but not limited to the shutdown of manufacturing operations by Ford, GM and other automobile manufacturer customers, consumer demand for new vehicles and Telenav’s operations;

 

   

whether Ford, GM and other automobile manufacturer partners will be required to suspend production in response to spikes in COVID-19 cases and if so, when and to what extent they will be able to resume full production and the impact the continued period of reduced volume of new vehicles being produced will have on Telenav’s revenue and operating results;

 

   

the economic recession resulting from the COVID-19 pandemic;

 

   

Telenav’s ability to achieve future revenue currently estimated under customer engagements, including Telenav’s ability to determine, achieve and accurately recognize revenue under customer engagements;

 

   

Telenav’s ability to develop and implement products for Ford, GM and Toyota and to support Ford, GM and Toyota and their customers;

 

   

the impact of tariffs on sales of automobiles in the United States and other markets;

 

17


Table of Contents
   

Telenav’s success in extending its contracts for current and new generations of products with its existing automobile manufacturers and tier ones, particularly Ford;

 

   

the possibility that GM, Ford and other OEMs may transition additional business to other platforms and providers, such as Google Automotive Services;

 

   

Telenav’s ability to achieve additional design wins and the delivery dates of automobiles including Telenav’s products;

 

   

adoption by vehicle purchasers of Scout GPS Link;

 

   

Telenav’s dependence on a limited number of automobile manufacturers and tier ones for a substantial portion of its revenue, such as Ford and GM;

 

   

reductions in demand for automobiles in general and specifically for Ford and GM vehicles; potential impacts of automobile manufacturers and tier ones, in particular Ford and GM, including competitive capabilities in their vehicles such as Apple CarPlay and Android Auto;

 

   

Telenav’s continued reporting of losses and operating expenses in excess of expectations;

 

   

the timing of new product releases and vehicle production by Telenav’s automotive customers, including inventory procurement and fulfillment;

 

   

possible warranty claims, and the impact on consumer perception of Telenav’s brand;

 

   

Telenav’s ability to perform under its initiatives with Amazon and Microsoft, and benefit from those initiatives;

 

   

the potential that Telenav may not be able to realize its deferred tax assets and may have to take a reserve against them; and

 

   

other factors that are described from time to time in Telenav’s periodic filings with the SEC. See the section of this proxy statement captioned “Where You Can Find More Information” for documents incorporated by reference into this proxy statement.

 

18


Table of Contents

THE PARTIES TO THE MERGER

Telenav, Inc.

Telenav is a leading provider of automotive software and services providing both in-vehicle and cloud-based solutions. Over the past twenty years, Telenav’s focus has been on navigation and LBS, where Telenav has pioneered many innovations including the market’s first mobile cloud-based navigation service. As a leader in hybrid navigation, Telenav counts among its customers three of the top five automotive manufacturers by revenue and sales—Ford Motor Company, General Motors Holdings and Toyota Motor Corporation. Navigation and LBS are the primary applications for IVI systems, and Telenav is using its strengths and core competencies to address the growing demand for overall connected car services.

Telenav’s executive offices are located at 4655 Great America Parkway, Suite 300, Santa Clara, CA 95054. Telenav’s telephone number is (408) 245-3800. For additional information about Telenav, see “Important Information About Telenav, Inc.”

V99, Inc.

V99 was formed on September 30, 2020, for the purpose of engaging in the transactions contemplated by the Merger Agreement and has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement and arranging of the debt financing in connection with the Merger. V99’s business address is Attention: H.P. Jin, c/o Telenav, Inc., 4655 Great America Parkway, Suite 300, Santa Clara, CA 95054. V99’s telephone number is (408) 245-3800. Dr. Jin is the sole stockholder, sole director, and President, Chief Executive Officer and Treasurer of V99.

Telenav99, Inc.

Telenav99, or Merger Sub, is a wholly owned subsidiary of V99 and was formed on November 2, 2020, solely for the purpose of facilitating V99’s acquisition of Telenav. Merger Sub’s business address is Attention: H.P. Jin, c/o Telenav, Inc., 4655 Great America Parkway, Suite 300, Santa Clara, CA 95054. Merger Sub’s telephone number is (408) 245-3800.

 

19


Table of Contents

THE SPECIAL MEETING OF TELENAV’S STOCKHOLDERS

Time, Place and Purpose of the Special Meeting

The special meeting will be held at [●], Pacific Time, on [●], 2021. Due to public health concerns regarding the COVID-19 pandemic, for the safety and well-being of stockholders, employees and other community members, and taking into account the protocols of local, state and federal governments, the special meeting will be held in a virtual format only at www.virtualshareholdermeeting.com/TNAV2021SM. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting. The purpose of the special meeting is to consider and vote on (i) the Merger Agreement Proposal, (ii) the Adjournment Proposal and (iii) the Executive Compensation Proposal.

After due and careful discussion and consideration, and upon the recommendation of the Special Committee, the Telenav Board (unanimously, among those independent and disinterested directors voting) (i) determined that the Merger Agreement and the Merger are advisable and fair to, and in the best interests of, Telenav and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the Merger, and (iii) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger, subject to the right of the Telenav Board to withdraw or modify such recommendation in accordance with the Merger Agreement.

Accordingly, the Special Committee recommends and the Telenav Board (unanimously, among those independent and disinterested directors voting) recommends, a vote (i) “FOR” the Merger Agreement Proposal, (ii) “FOR” the Adjournment Proposal and (iii) “FOR” the Executive Compensation Proposal.

Who Can Vote at the Special Meeting

Only holders of record of the Common Stock as of the close of business on [●], 202[●], which is the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. If you own shares that are registered in the name of someone else, such as a broker, you need to direct that person to vote those shares or obtain an authorization from them and vote the shares yourself at the meeting. On the record date, there were [●] shares of Common Stock outstanding.

Quorum for the Special Meeting

To conduct any business at the special meeting, a quorum must be present in person or represented by valid proxies. The holders of a majority of the outstanding shares of Common Stock, present in person or by proxy, will constitute a quorum for the transaction of business at the meeting.

Once a share is represented at the special meeting, it will be counted for the purpose of determining a quorum and any adjournment or postponement of the special meeting, unless the holder is present solely to object to the special meeting. In addition, broker nonvotes (shares held by banks, brokerage firms or nominees that are present in person or by proxy at the special meeting but with respect to which the broker or other stockholder of record is not instructed by the beneficial owner of such shares how to vote on a particular proposal and the broker does not have discretionary voting power on such proposal), if any, will be counted as present for purposes of establishing a quorum. Votes FOR and AGAINST and abstentions will be counted for purposes of determining the presence of a quorum. However, if a new record date is set for an adjourned meeting, a new quorum will have to be established.

Votes Required

Adoption and approval of the Merger Agreement requires the affirmative vote of the holders of (i) at least 66 and two-thirds percent of the outstanding shares of Common Stock not beneficially owned by the Purchaser

 

20


Table of Contents

Group, which approval will also serve as a waiver of certain limitations set forth in Section 203 of the DGCL, and (ii) at least a majority of the outstanding shares of Common Stock. Approval of the transaction does not require the affirmative vote of the holders of at least a majority of “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock having voting power present in person or represented by proxy at the special meeting and entitled to vote on the subject matter.

Approval of the Executive Compensation Proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock having voting power present in person or represented by proxy at the special meeting and entitled to vote on the subject matter.

Failure to submit a proxy or to vote in person will have the same effect as a vote AGAINST the Merger Agreement Proposal, but it will have no effect on the Adjournment Proposal or the Executive Compensation Proposal. A vote to abstain will have the same effect as voting against the Merger Agreement Proposal, against the Adjournment Proposal and against the Executive Compensation Proposal.

If your shares of Common Stock are held in “street name,” you should instruct your bank, broker or other nominee how to vote your shares in accordance with the voting instructions form you will receive from your bank, broker or other nominee. Under applicable regulations, brokers who hold shares in “street name” for customers may not exercise their voting discretion with respect to nonroutine matters such as the approval of the Merger Agreement Proposal. As a result, if you do not instruct your broker to vote your shares of Common Stock, your shares will not be voted, which will have the same effect as voting against the Merger Agreement Proposal.

Voting by Proxy

This proxy statement is being sent to you on behalf of the Telenav Board for the purpose of requesting that you allow your shares of Common Stock to be represented at the special meeting by the persons named in the enclosed proxy card. All shares of Common Stock represented at the special meeting by properly executed proxy cards, voted over the telephone or voted over the Internet will be voted in accordance with the instructions indicated on those proxies. If you sign and return a proxy card without giving voting instructions, your shares will be voted as recommended by the Telenav Board. The Telenav Board (unanimously, among those independent and disinterested directors voting) recommends a vote (i) “FOR” the Merger Agreement Proposal, (ii) “FOR” the Adjournment Proposal and (iii) “FOR” the Executive Compensation Proposal.

You may revoke your proxy at any time before the vote is taken at the special meeting. To revoke your proxy, you must either advise Telenav’s Corporate Secretary in writing, deliver a proxy dated after the date of the proxy you wish to revoke, or attend the special meeting and vote your shares in person. Attendance at the special meeting will not by itself constitute revocation of a proxy. If you have instructed your broker to vote your shares, you must follow the directions provided by your broker to change those instructions.

Householding

Certain Telenav stockholders who share an address and have consented, or been deemed by law to have consented, to receipt of a single notice are being delivered only one copy of this proxy statement unless Telenav or one of its mailing agents has received contrary instructions from such stockholders.

Upon the written request of a Telenav stockholder at a shared address to which a single copy of this proxy statement was delivered, Telenav will promptly deliver a separate copy of such document to the requesting stockholder. Written requests can be addressed to Telenav, Inc., Attn: Investor Relations, 4655 Great America Parkway, Santa Clara, California 95054 or emailed to Telenav’s Investor Relations at IR@telenav.com. Stockholders may also call Telenav’s Investor Relations at (408) 245-3800.

 

21


Table of Contents

Telenav stockholders sharing an address who are receiving multiple copies of Telenav’s notice of internet availability of proxy materials and/or proxy statements and annual reports may request delivery of a single copy of such documents by emailing Telenav at the address above.

Solicitation of Proxies

The expense of soliciting proxies will be borne by Telenav. Telenav has engaged MacKenzie Partners, Inc. to assist in the solicitation of proxies for the special meeting and will pay MacKenzie Partners a fee of approximately $12,500, plus reimbursement of out-of-pocket expenses. The address of MacKenzie Partners is 1407 Broadway, 27th Floor New York, NY 10018. You can call MacKenzie Partners toll-free at (800) 322-2885 or collect at (212) 929-5500.

In addition to soliciting proxies by mail, directors, officers and employees of Telenav may solicit proxies personally and by telephone, email or otherwise. None of these persons will receive additional or special compensation for soliciting proxies.

 

22


Table of Contents

SPECIAL FACTORS

The discussion of the Merger in this proxy statement is qualified by reference to the Merger Agreement, which is attached to this proxy statement as Annex A. You should read the Merger Agreement carefully.

Background of the Merger

As part of Telenav’s strategic planning process, the Telenav Board regularly reviews and discusses with Telenav management Telenav’s performance, business strategy, prospects for growth and competitive position in the industry in which it operates. In addition, the Telenav Board and Telenav management regularly review and evaluate various strategic alternatives, including acquisitions, dispositions, major commercial partnerships and other strategic transactions, as part of ongoing efforts to strengthen Telenav’s overall business and enhance stockholder value. In the course of Telenav’s strategic planning process, representatives of Telenav have, in the ordinary course and from time to time, discussed with various companies in the software, technology and automobile industries potential commercial and strategic relationships and investments that might expand their respective businesses, improve their respective customer offerings and create value for Telenav stockholders.

On September 7, 2020, Dr. Jin contacted Douglas Miller, a member of the Telenav Board and Telenav’s lead independent director, and indicated he had been considering strategic alternatives for Telenav and was exploring whether Mr. Miller thought the Telenav Board would be open to discussing a possible going private transaction in the event the transaction to purchase assets of a third party that Telenav had been considering did not go through and Dr. Jin were to consider making an offer to take Telenav private. Dr. Jin expressed concern about the timing or feasibility of such a transaction in light of the separate transaction to purchase assets of a third party that Telenav had been considering. Mr. Miller contacted Randy Ortiz and Wes Cummins, two other independent members of the Telenav Board, and they discussed the matter with representatives of Wilson Sonsini Goodrich and Rosati, P.C. (“WSGR”) on that day. The three board members had a subsequent discussion with representatives of WSGR on September 9, 2020. Dr. Jin also had contacted Steve Debenham, Telenav’s general counsel, to notify him of the possibility of a potential offer, and Mr. Miller also spoke with Mr. Debenham as did the representatives of WSGR. Mr. Miller contacted Dr. Jin and discussed disclosure issues related to the proposed asset acquisition and Dr. Jin informed Mr. Miller that he was not going to move forward in considering a potential transaction until such time as Telenav completed the asset acquisition or terminated the discussions relating to such transaction. On September 21, 2020, the potential third party seller of the assets notified Telenav that it was terminating discussions regarding the proposed asset acquisition by Telenav due to its internal determination not to sell the assets to a third party at such time.

On September 23, 2020, Dr. Jin contacted Mr. Miller by phone and indicated that in light of the termination of the discussions with a third party, Dr. Jin was contemplating making a proposal to acquire Telenav, and that Dr. Jin had engaged in preliminary exploratory discussions with Samuel Chen, another member of the Telenav Board, regarding such a transaction and potential financing in connection therewith. On September 23, 2020, Mr. Miller had a telephone discussion with representatives of WSGR during which Mr. Miller relayed Mr. Miller’s conversation with Dr. Jin. Dr. Jin also advised Mr. Miller that he would be represented by Norton Rose Fulbright US LLP (“Norton Rose”) in any possible transaction, whose relationship partner had represented Telenav from 1999 to 2009 while at another firm and had a long relationship with Dr. Jin.

On September 24, 2020, the Telenav Board held a telephonic meeting during which Ken Xie announced to the Telenav Board that he would not be seeking re-election at the upcoming 2020 Annual Meeting of Telenav Stockholders and would step down when his current term expired at the upcoming 2020 Annual Meeting of Stockholders. Thereafter, Dr. Jin and Mr. Chen informed the other members that they were considering making an offer to acquire Telenav in a negotiated transaction with the Telenav Board and that Mr. Chen was considering financially supporting such transaction, but confirmed that neither they, nor any of their affiliates, had yet made a proposal to Telenav regarding such a transaction. Representatives of WSGR reviewed with the Telenav Board relevant considerations and conditions that would guide the Telenav Board’s consideration of a proposal from

 

23


Table of Contents

Dr. Jin and Mr. Chen regarding any potential strategic transaction, including the fiduciary duties of the Telenav Board and legal standards of review in the context of a potential management buyout, criteria to establish and demonstrate the Telenav Board’s independent consideration and evaluation of any such proposal, and a process for stockholder review and approval of any such transaction. The Telenav Board discussed with representatives of WSGR establishing a special committee comprised of independent and disinterested members of the Telenav Board to independently consider and evaluate a strategic transaction in the event that Dr. Jin and/or Mr. Chen made an offer to acquire Telenav, and to vest the special committee with authority sufficient and commensurate with this function. The Telenav Board discussed membership criteria for a special committee, and evaluated the independence of Douglas Miller, Wes Cummins and Randy Ortiz to serve on a special committee. The Telenav Board discussed Mr. Miller’s prior service as Telenav’s chief financial officer, which ended in June 2012, and discussed his relationship with Dr. Jin and Mr. Chen. The Telenav Board noted that Mr. Miller had a well-established career prior to serving as chief financial officer of Telenav, had served as a public company chief financial officer at two companies prior to Telenav and had served as a nonemployee, independent director on another public company board of directors prior to joining Telenav Board. The Telenav Board noted that Mr. Cummins had previously had a relationship with Nokomis Securities (which was a significant holder of Common Stock) but confirmed that he has no current or continuing agreements with Nokomis Securities, including any that would provide him with a certain benefit or profit upon the sale of any equity interests of Telenav held by Nokomis Securities or any of its affiliates. The Telenav Board also noted (i) that Mr. Cummins had confirmed that he had not made any proposals to Dr. Jin or Mr. Chen, or received any requests from Dr. Jin or Mr. Chen, to invest in Mr. Cummins’s new fund, (ii) discussed Mr. Cummins’ relationship with Dr. Jin and Mr. Chen, and (iii) concluded that Mr. Cummins had no other incentive in conjunction with any potential transaction with Dr. Jin or Mr. Chen. The Telenav Board also concluded that Mr. Ortiz had no business relationships with Dr. Jin and Mr. Chen and had no other relationships with them outside of his participation on the Telenav Board. The Telenav Board noted that each of Messrs. Cummins, Miller and Ortiz had separately confirmed that neither he nor any entity that he controlled or was affiliated with had or has any family, business, investment or social relationship with, or debt or other obligations to, either Dr. Jin or Mr. Chen or any entities they control or are affiliated with, or otherwise had or has any relationships which would compromise or preclude him from serving independently on a special committee or independently considering and evaluating any potential offer by Dr. Jin and/or Mr. Chen. Following such discussion, the Telenav Board identified no factors that would call into question the independence of Messrs. Cummins, Miller, and Ortiz or otherwise render any of them unfit to serve on the contemplated special committee. The Telenav Board also discussed compensation arrangements for members of the special committee and determined that Telenav would not pay fees above customary market rates for any such services and requested that Mr. Ortiz, the chair of the board’s compensation committee, contact Compensia LLC, a compensation consultant the board had engaged in prior board compensation matters, to discuss what market compensation for services on a special committee would be. The Telenav Board, determining it to be in the best interests of Telenav and its stockholders, formed the Special Committee with the full authority of the Telenav Board to review, evaluate and negotiate any potential strategic transaction involving Telenav, Dr. Jin and Mr. Chen (or any alternative thereto and any related transaction). The Telenav Board thereafter approved resolutions authorizing the Special Committee to, among other things, (i) review, evaluate, and negotiate any such potential transaction; (ii) exercise all power and authority that may otherwise be exercised by the Telenav Board that the Special Committee may determine is necessary in furtherance of the consideration of a potential transaction, including, without limitation, the power and authority to approve, modify, or amend any Telenav equity awards and other compensatory arrangements in connection with a potential transaction; (iii) explore, review, approve, or disapprove the terms of a potential transaction; (iv) make recommendations to the Telenav Board with respect to a potential transaction; (v) negotiate and approve all agreements and other documents in connection with a potential transaction, and (vi) direct and receive advice and cooperation from any officers, employees, advisors, consultants, and agents of Telenav, and to retain, at Telenav’s expense, legal counsel and any additional third parties or advisors that the Special Committee may deem necessary. The Telenav Board further resolved that Telenav would not effect a strategic transaction (a) if it had not first been approved by the Special Committee, and (b) if required by the Special Committee, unless holders of the majority of shares of Common Stock not held by (x) Dr. Jin and Mr. Chen and their

 

24


Table of Contents

respective affiliates and any other stockholder who is part of a “group” with Dr. Jin and Mr. Chen and (y) any officer of Telenav, had approved such transaction.

On September 24, 2020, the Special Committee held a telephonic meeting with representatives of WSGR in attendance during which the participants discussed a potential proposal from Dr. Jin and Mr. Chen to acquire the shares of Common Stock not owned by them. Representatives of WSGR led a discussion regarding the Special Committee’s fiduciary duties in the context of any potential strategic transaction, including the potential proposal from Dr. Jin and Mr. Chen, as well as the functions and authority of, and resources available to the Special Committee, and the process for stockholder approval of any transaction, including voting requirements. The Special Committee and representatives also discussed retaining a financial advisor, including possible conflicts of several financial advisors with which Telenav had recently interacted for various proposed transactions, as well as possible incentive structures for the financial advisor’s compensation to encourage the financial advisor to succeed in soliciting offers from parties other than Dr. Jin and Mr. Chen. The Special Committee also decided to advise Telenav’s Chief Financial Officer, Adeel Manzoor, of the potential transaction and the need to update Telenav’s long-term financial forecast in light of the discussions with a large manufacturing customer about a potential shift by the customer to the Android operating system for future vehicle models, which presented a lack of clarity regarding Telenav’s role in the customer’s next-generation products. The Special Committee discussed the uncertainty resulting from the change in operating systems and the need to consider a long-term forecast with different assumptions regarding such products. The Special Committee also expressed a desire to obtain Mr. Manzoor’s thoughts regarding the various financial advisors with whom Telenav had recently worked.

On September 27, 2020, the Special Committee held a telephonic meeting with representatives of WSGR in attendance during which the participants discussed Dr. Jin and Mr. Chen’s potential offer to acquire Telenav and the different interests of Telenav and Dr. Jin and Mr. Chen in any potential transaction. The Special Committee directed representatives of WSGR to contact outside legal counsel to Dr. Jin to discuss the potential timing of Dr. Jin’s offer, if any, and any associated Schedule 13D filing. The Special Committee discussed potential disclosure issues in the transaction related to a potential shift by a Telenav manufacturing customer to the Android operating system for future vehicle models, which presented a lack of clarity regarding Telenav’s role in the customer’s next-generation products, the status of the strategic market check process, and the content and timing of a possible disclosure. The Special Committee further discussed retaining a financial advisor, identifying five possible candidates, and discussed the factors to consider in retaining a financial advisor, and possible conflicts of interest therewith, ultimately determining to contact two potential advisors, B. Riley and another financial advisor referred to herein as “Advisor A.” The Special Committee also discussed whether to retain counsel other than WSGR in light of WSGR’s role as counsel to the Telenav Board and Telenav. Representatives of WSGR discussed with the Special Committee that the fees related to WSGR’s work for Telenav represented a relatively small percentage of WSGR’s revenue and reviewed the WSGR team’s relationships with members of Telenav management, the Telenav Board and the Special Committee. After representatives from WSGR left the meeting, the Special Committee determined that WSGR was sufficiently independent from Dr. Jin and Mr. Chen and Telenav’s management and given that WSGR’s primary relationships were with Telenav’s general counsel and members of the Special Committee, all of whom were not likely to participate in a buyer group in connection with a potential transaction. In light of these factors, as well as WSGR’s knowledge of Telenav, the sector, its mergers and acquisitions expertise, and the lack of perceived conflicts, the Special Committee approved the retention of WSGR as the Special Committee’s legal advisor.

On September 28, 2020, representatives of WSGR had a telephone call with representatives of Norton Rose, counsel to Dr. Jin, during which call the parties discussed Dr. Jin and Mr. Chen’s potential offer to acquire Telenav, the timing associated with any potential offer and any Schedule 13D filings, whether there would be additional members of the Purchaser Group, whether Dr. Jin and Mr. Chen had considered whether to allow Telenav to conduct a strategic market check prior to any definitive agreement or to have a “go-shop” period after execution of any such agreement, and how Dr. Jin and Mr. Chen proposed to finance any transaction. The representatives of Norton Rose communicated that discussions regarding potential financing for any proposal were ongoing and that no agreement in principle had been reached. WSGR responded that the Special Committee

 

25


Table of Contents

expected that fully committed financing be obtained and customary commitment papers be executed concurrently with the signing of any definitive agreement for a potential transaction.

On September 30, 2020, Mr. Miller had a telephone call with Dr. Jin, during which Dr. Jin indicated that he wanted to start the strategic process and that Dr. Jin would send a formal offer to the Special Committee shortly.

On September 30, 2020, the Special Committee held a telephonic meeting with representatives of WSGR in attendance to hear presentations from B. Riley and Advisor A, the two remaining candidates to serve as financial advisor to the Special Committee. The Special Committee and WSGR discussed the merits of each potential advisor, noting that both knew Telenav and its industry well, and that B. Riley had extensive recent experience working with the Telenav and its management (including in conjunction with the potential purchase of the third party’s assets). Representatives of Advisor A then joined the meeting, summarized Advisor A’s credentials and experience working with Telenav’s management, and provided an overview of what third parties it would target and its market check strategy. After all representatives of Advisor A left the meeting, representatives of B. Riley joined the meeting and presented to the Special Committee regarding its expertise and credentials, its substantial recent experience and familiarity in working with Telenav management, and its strategy to target numerous different strategic parties and financial sponsors in a variety of different technology, software and industrial spaces.

On September 30, 2020, the Special Committee held a second telephonic meeting with representatives of WSGR in attendance. There was discussion regarding the factors for the Special Committee to consider in its selection of a financial advisor to the Special Committee for a potential sale of Telenav, including its fiduciary duty obligations, and the approach of the Delaware courts to decisions regarding the selection of financial advisors in sale of control transactions. The Special Committee discussed the two final candidates and the strengths and weaknesses of each, noting that B. Riley provides research coverage for a large number of small cap issuers, had analyst coverage of Telenav, had recently been providing services to Telenav with respect to potential strategic alternatives and had assisted Telenav in other matters as well. Following a discussion regarding the terms of the potential engagement, the Special Committee unanimously determined to engage B. Riley as its financial advisor.

On the night of September 30, 2020, V99, of which Dr. Jin is the sole stockholder, sole director, Chief Executive Officer and Treasurer, delivered a letter to the Special Committee regarding its non-binding proposal to acquire 100% of the outstanding shares of Common Stock for a purchase price in cash equal to a 20% premium over the closing price of a share of Common Stock on September 30, 2020, or $4.32 per share. V99’s proposal stipulated that it would not move forward with any such transaction unless it was approved by the Special Committee, that the offer was subject to the satisfaction of certain conditions, including a nonwaivable condition that the holders of a majority of the shares of Common Stock not owned by V99 or its affiliates approve the transaction, and that V99 would permit the Special Committee to have a to-be-agreed upon “go-shop” period. V99’s proposal made no mention of V99’s financing arrangements or whether Mr. Chen would provide financing or otherwise participate in the proposed transaction.

On the morning of October 1, 2020, the Special Committee held a telephonic meeting with representatives of B. Riley and WSGR in attendance, during which the participants discussed V99’s proposal, the possible public announcements that might be made by the Special Committee and Dr. Jin in connection with such proposal, B. Riley’s preliminary analysis of the proposed consideration, and when and how to respond to Dr. Jin. The Special Committee authorized the representatives of B. Riley to reach out to third parties to gauge their interest in making a proposal to acquire Telenav. The Special Committee then again discussed management’s long-term financial model and the need to update it to reflect recent developments in Telenav’s business, including a potential shift by a Telenav customer to the Android operating system for future vehicle models, which presented a lack of clarity regarding Telenav’s role in the customer’s next-generation products. The Special Committee and representatives of WSGR discussed which members of Telenav’s management should serve as liaisons to the Special Committee and determined that Mr. Manzoor and Mr. Debenham should be requested to act as liaisons to

 

26


Table of Contents

Telenav’s management for the Special Committee. The Special Committee discussed whether other members of Telenav’s management beyond Dr. Jin might be participating in V99’s proposed acquisition of Telenav and requested that the representatives of WSGR contact Norton Rose to discuss limitations on Dr. Jin’s communications with Telenav employees and members of Telenav’s management, and to seek clarification regarding certain matters regarding V99’s proposal.    

On October 1, 2020, representatives of WSGR had a telephone call with representatives of Norton Rose in which the parties discussed V99’s proposal, including whether there was contemplated any financing from or other involvement of Mr. Chen, and the potential Schedule 13D filings by Dr. Jin and whether Mr. Chen would participate in Dr. Jin’s Schedule 13D filing in connection with V99’s offer. The representatives of Norton Rose indicated that Dr. Jin and Mr. Chen were still discussing potential financing arrangements from Mr. Chen and whether Mr. Chen would become a stockholder of V99, that there was not any agreement in principal between the two of them, and that Mr. Chen would not be filing a Schedule 13D with Dr. Jin at the time. The Norton Rose representatives also confirmed that Dr. Jin would be filing a Schedule 13D as soon as that evening.

Later on October 1, 2020, the Special Committee held a telephonic meeting with representatives of B. Riley and WSGR, Mr. Manzoor and Mr. Debenham in attendance. Representatives of WSGR reported on the discussions they had had with Norton Rose regarding the V99 proposal, the contemplated Schedule 13D filings by Dr. Jin and the timing thereof, as well as uncertainties regarding whether Mr. Chen would file a Schedule 13D in light of the status of the discussions between him and Dr. Jin. The Special Committee discussed its communications strategy, whether to have meetings with employees regarding the announcement that Telenav had received an offer from V99, and whether to permit Dr. Jin to appear at a meeting of Telenav employees and concluded that Dr. Jin should not participate in such meetings. The Special Committee discussed the V99 proposal, including V99’s possible sources of financing, the participants in any purchaser group, stockholders of V99, whether Mr. Chen would guarantee the payment of the consideration in the transaction contemplated by the V99 proposal, the diligence process Dr. Jin and V99 would expect to undertake, whether Dr. Jin, Mr. Chen and their affiliates would agree to support alternative transactions the Special Committee recommended to the Telenav Board, possible regulatory filings and regulatory and other impediments, and the impact on the timing of a potential strategic transaction if any regulatory and other impediments were not resolved. The Special Committee once again discussed the need to prepare an update to Telenav’s long-term financial model (the “Long Term Financial Model”) and its forecast for the fiscal year ending June 30, 2021 (the “Fiscal 2021 Plan”). The Special Committee also noted that the updated forecast would assist the Special Committee in its evaluation of Telenav and the V99 proposal and would also assist potential acquirers in considering whether or not to make a proposal to acquire Telenav. Mr. Manzoor summarized the various assumptions in the long-term financial model and the fiscal 2021 plan that would have to be updated. Those present discussed the status of Telenav’s discussions with a large automobile manufacturer customer regarding the customer’s plans to change direction in its next-generation product.

On October 1, 2020, Dr. Jin and V99 filed an amendment to Dr. Jin’s previously filed Schedule 13D with the SEC disclosing that V99 had made a nonbinding proposal to the Special Committee to acquire all of the issued and outstanding shares of Common Stock for a purchase price in cash equal to a 20% premium over the closing price of a share of Common Stock on September 30, 2020, or $4.32 per share.

On October 2, 2020, before markets opened, Telenav issued a press release announcing that Telenav had received V99’s proposal, and that the Telenav Board had formed the Special Committee to review the proposal and consider all potential strategic alternatives. Two letters were also sent to Telenav employees, one from the Special Committee, and one from Dr. Jin, in which Dr. Jin communicated that he had committed to the Special Committee that if the Special Committee decided to sell Telenav to another third party, that Dr. Jin would support that transaction by voting his shares in the manner directed by the Special Committee.

On October 2, 2020, the Special Committee and B. Riley executed an engagement letter for B. Riley to serve as financial advisor to the Special Committee. On October 2, 2020, Mr. Chen, his wife Fiona Chang, and his affiliate Digital jointly filed a Schedule 13D with the SEC in which Mr. Chen, Ms. Chang and Digital stated

 

27


Table of Contents

that they intended to vote their shares of Common Stock in support of any transaction led by Dr. Jin to acquire Telenav, and that Mr. Chen orally expressed to Dr. Jin that he intended to provide funding for any such transaction on economic terms to be agreed and to provide Dr. Jin access to his network of potential financing sources. On October 5, 2020, the Special Committee held a telephonic meeting with representatives of B. Riley and WSGR in attendance. Representatives of B. Riley summarized discussions with a possible acquirer with which Telenav had engaged in strategic discussions early in calendar year 2020 and the process that party would undertake before reverting with a decision whether to engage in renewed discussions. Representatives of B. Riley then reviewed a list of other third parties that may be interested in entering a strategic transaction with Telenav. The Special Committee discussed such list and authorized B. Riley to contact such parties. The Special Committee also discussed when and how to respond to Dr. Jin regarding the offer he made on behalf of V99, including whether the Special Committee or B. Riley should engage in discussions with Dr. Jin. At the conclusion of this discussion, the Special Committee determined that Mr. Miller would set up discussions with Dr. Jin and representatives of B. Riley once the B. Riley representatives had the opportunity to review the revised draft long-term model.

As part of the strategic process, and at the direction of the Special Committee, prior to Telenav entering into the definitive merger agreement, B. Riley contacted 70 third parties, of which 50 were strategic parties and 20 were financial sponsors. Nine of such parties entered into nondisclosure agreements with Telenav (or confirmed that previously existing nondisclosure agreements entered into with Telenav would govern any information or materials shared in connection with a potential strategic transaction), all of which received access to a virtual data room containing nonpublic information of Telenav. Of those nine nondisclosure agreements, two contained standstill provisions preventing such counterparties from making public acquisition proposals for a period of one year after their respective execution of such nondisclosure agreements, which standstill restrictions would terminate and be of no further force and effect in certain circumstances, including upon Telenav’s entry into a definitive agreement contemplating a sale of more than 50% of Telenav’s outstanding equity securities or all or substantially all of its assets, and have terminated as a result of Telenav’s entry into the Merger Agreement with V99. None of such parties made a proposal to acquire Telenav prior to Telenav entering into the definitive Merger Agreement.

On October 6, 2020, the third party with which Telenav had previously engaged in strategic discussions in early calendar year 2020 informed B. Riley that it did not have interest in pursuing discussions regarding a strategic transaction with Telenav at that time.

On October 7, 2020, a member of Telenav management contacted a representative of a strategic party, which Telenav refers to as “Party A”, to provide an introduction to representatives of B. Riley.

On October 7, 2020, the Special Committee held a telephonic meeting with representatives of Telenav’s finance department, including Mr. Manzoor, and Mr. Debenham in attendance. Mr. Manzoor presented to the Special Committee two sets of draft financial projections of Telenav’s statement of operations for future periods. Mr. Manzoor noted that the primary difference between the two sets of draft projections related to a potential shift by the customer to the Android operating system for future vehicle models, presenting a lack of clarity regarding Telenav’s role in the customers’ next-generation products. The Special Committee authorized management to share the two draft sets of projections with B. Riley. In light of the uncertainty facing Telenav with industry trends among automobile manufacturers adopting competing services such as Android Auto, Apple Car Play and others, the Special Committee then requested that Telenav management prepare a third draft set of projections based on an assumption that Telenav would cease to compete for new contracts and programs, sell its investments in third party companies and minimize operating expenses to those necessary to support existing customer obligations.

Later on October 7, 2020, the Telenav Board held a telephonic meeting with representatives of WSGR in attendance, to discuss matters related to year end SEC filings, assessments of director independence and planning for the 2020 Annual Meeting of Stockholders. During the meeting, the Telenav Board discussed the recent filing on Schedule 13D by Mr. Chen in which Mr. Chen indicated his intention to support the transaction by V99 to

 

28


Table of Contents

acquire Telenav, including by providing financing in connection therewith. The Telenav Board determined to revisit the question of whether Mr. Chen could continue to serve as an independent member of the Telenav Board or its committees at a later time following additional developments with the potential transaction. The Telenav Board determined to defer the filing of the draft proxy statement for Telenav’s 2020 Annual Meeting of Stockholders and discussed the potential filing by October 28, 2020 of an amendment to Telenav’s Annual Report on Form 10-K to provide information that would typically be included in such proxy statement. The Telenav Board also reviewed information provided by Compensia regarding compensation for the members of the Special Committee and approved that each member of the Special Committee would receive $2,000 for each meeting of the Special Committee of at least thirty minutes, with a cap of $30,000 in total payments to any member for each 12-month period.

On October 8, 2020, a member of Telenav management contacted a representative of a strategic party, which Telenav refers to as “Party B”, to provide an introduction to representatives of B. Riley.

On October 9, 2020, representatives of B. Riley had a telephone call with representatives of Party A to discuss Party A’s interest in pursuing an opportunity to acquire Telenav, Party A’s interest in obtaining non-public information regarding Telenav, and whether Party A’s pre-existing non-disclosure agreement with Telenav could govern the exchange of any such non-public information.

On October 9, 2020, the Special Committee held a telephonic meeting with representatives of B. Riley and WSGR in attendance. The Special Committee discussed the appropriate strategy for speaking with Dr. Jin at a meeting scheduled for later that day among the Special Committee, representatives of WSGR, Dr. Jin and Norton Rose. The Special Committee also discussed the messaging for B. Riley to convey to Dr. Jin at a separate meeting to be scheduled between B. Riley and Dr. Jin.

Later that afternoon on October 9, 2020, the Special Committee and representatives of WSGR held a telephonic meeting with Dr. Jin and representatives of Norton Rose. Members of the Special Committee told Dr. Jin that the Special Committee had an obligation to run a regimented process in order to maximize stockholder value and to consider Telenav’s strategic alternatives, and in connection therewith, B. Riley was continuing to review and analyze V99’s proposal to acquire all outstanding shares of Telenav for $4.32 per share. In response to questions from the Special Committee and representatives of WSGR, Dr. Jin and representatives of Norton Rose informed the Special Committee that no other members of management were part of any potential purchaser group and Dr. Jin and Mr. Chen were continuing to negotiate how to structure the financing for the acquisition but that there was no arrangement then in place. Dr. Jin and the representatives of Norton Rose also noted that they were still evaluating the potential treatment of Telenav’s outstanding equity awards with respect to the offer and that Dr. Jin did not plan any material changes to Telenav’s operations following any potential transaction. The Special Committee then requested that Dr. Jin continue to refrain from discussing the potential transaction with any Telenav employees, including members of Telenav management.

On October 12, 2020, the Special Committee held a telephonic meeting with members of Telenav management and representatives of WSGR in attendance, during which the participants discussed Telenav’s planned annual evergreen restricted stock unit (“RSU”) grants to employees other than the officers of Telenav in light of V99’s proposal. Although a pool for annual evergreen awards had been approved by the board’s compensation committee in August 2020, management had just recently finalized individual award recommendations due to a change in Telenav’s annual performance review process unrelated to V99’s offer. In light of the pendency of V99’s proposal, the Special Committee discussed possible alternatives with respect to issuing the RSUs and representatives of WSGR discussed the impact of a possible transaction on the proposed RSUs and dilution to Telenav stockholders. Members of Telenav management also discussed with the Special Committee a proposal to provide retention bonuses to certain employees in connection with the potential announcement of an acquisition of Telenav by V99. The Special Committee discussed with representatives of WSGR its fiduciary duties in considering the proposed retention bonuses, and requested that Telenav management work with Compensia to obtain additional information and further refine a proposed candidate list.

 

29


Table of Contents

On October 13, 2020, representatives of Party B contacted representatives of B. Riley to request a call to discuss the opportunity to pursue a strategic transaction with Telenav.

On October 13, 2020, representatives of WSGR delivered to Norton Rose a draft confidentiality agreement to be executed by and among the Special Committee, V99, Dr. Jin, Mr. Chen and Digital (the “V99 NDA”). On October 14, 2020 and October 15, 2020, representatives of WSGR and Norton Rose had multiple calls to discuss the terms of the proposed V99 NDA, including (i) Norton Rose’s request that Mr. Chen and Digital not be parties to the agreement, (ii) Dr. Jin’s objections to the proposed provisions that would preclude Dr. Jin and V99 from discussing the transaction or share confidential information with equity financing sources, and (iii) the proposed provisions that would require the parties to the proposed V99 NDA to be subject to a customary standstill arrangement.

On October 15, 2020, Party A received access to a virtual data room containing non-public information of Telenav, which information would be subject to Party A’s pre-existing non-disclosure agreement with Telenav, which agreement did not contain a standstill provision.

On October 15, 2020, the Special Committee held a telephonic meeting with representatives of B. Riley and WSGR in attendance. Representatives of B. Riley reviewed their preliminary financial analysis, including comparable market trading prices, a discounted cash flow analysis, a premiums-paid analysis and other matters, including the assumptions behind their analyses. The B. Riley representatives then reviewed the efforts that they had undertaken to contact other potential bidders, including their assessment of the various categories of potential bidders, those who had passed on a further discussion, those who had entered into nondisclosure agreements and those who had yet to respond. Representatives of WSGR updated the Special Committee on the status of negotiations regarding the proposed V99 NDA, including (i) Dr. Jin’s desire that he not be subject to a standstill agreement and the implications that the lack of a standstill agreement might have on other prospective bidders, including their willingness to provide standstills. Representatives of WSGR also discussed a request by Dr. Jin to contact persons other than Mr. Chen and Digital to provide debt or equity financing for V99, as well as the implications for the Special Committee’s efforts to obtain other proposals if prospective bidders were to team up with V99 instead of making a separate proposal. At the conclusion of the discussion, the Special Committee authorized WSGR to negotiate for a limited standstill that would accommodate some of Dr. Jin’s requests or, in the event that was not successful, no standstill, and instructed that WSGR request that Dr. Jin obtain the Special Committee’s consent prior to approaching other potential sources of debt or equity financing, which consent would not be unreasonably withheld, delayed or conditioned. The Special Committee with the assistance of B. Riley representatives then discussed a strategy to obtain a higher per-share price from Dr. Jin and possible negotiations with Dr. Jin. The Special Committee discussed various strategies and tactics and the risks and uncertainties of each.

On October 16, 2020, following various discussions between representatives of WSGR and Norton Rose, the Special Committee, V99 and Dr. Jin executed the V99 NDA. The V99 NDA prohibited Dr. Jin from approaching other potential bidders, required Dr. Jin to obtain the Special Committee’s written consent prior to approaching potential sources of equity financing, did not contain a standstill arrangement and restricted Dr. Jin from having any discussions or communications, or entering into any agreements with any director, officer or employee of Telenav regarding any employment arrangement with Telenav or any parent company thereof, any retention or other compensation arrangement or any equity rollover or other similar transaction.

On October 16, 2020, representatives of B. Riley informed Dr. Jin on a telephone call that the proffered price of $4.32 per share was not sufficiently high in order to permit the Special Committee to approve the proposed transaction. Dr. Jin told B. Riley that he believed that $4.32 was a fair price, and that while V99 may have room to increase the per share price, any such raise would not be significant. Dr. Jin reiterated that he believed V99’s proposal was in the best interests of Telenav and its stockholders, and that he wanted the potential transaction effected quickly.

 

30


Table of Contents

On October 19, 2020, representatives of B. Riley contacted representatives of a financial sponsor, who Telenav refers to as “Sponsor A”, to inquire as to Sponsor A’s potential interest in a strategic transaction with Telenav. The next day, Sponsor A executed a non-disclosure agreement that did not contain a standstill provision.

On October 20, 2020, Dr. Jin and representatives of B. Riley had another telephone call during which Dr. Jin told B. Riley that he was increasing V99’s proposal to $4.80 per share, noting that this would be V99’s best and final offer, that negotiations on the definitive agreement must be expedited, and that a “go-shop” period would only be permitted until October 30, 2020. Dr. Jin conveyed that the Special Committee should accept this revised proposal. Dr. Jin also discussed alternatives Dr. Jin was considering if he could not come to agreement with the Special Committee on the proposal, including potentially initiating a tender offer for shares of Common Stock. Following the telephone call, Dr. Jin delivered a term sheet to B. Riley summarizing V99’s revised proposal, which term sheet reflected, among other things, a $4.80 per share price, a “go-shop” that expired on October 30, break-up fees in the event that Telenav opted for an alternative transaction after signing a definitive agreement with V99, proposed treatment for Telenav’s equity awards, and a transaction structured as a negotiated tender offer. On October 21, 2020, representatives of B. Riley and Party had a telephone call during which Party B described its typical process for acquiring companies, explained that it was exploring whether Telenav fit into its strategic plans, and agreed to review a non-disclosure agreement in order for it to obtain non-public information regarding Telenav.

On the morning of October 21, 2020, the Special Committee held a telephonic meeting with Mr. Manzoor, Mr. Debenham and representatives of B. Riley and WSGR in attendance. The Special Committee discussed Dr. Jin’s revised proposal, his anticipated timeline and his indication that he would not further increase the purchase price. Representatives of WSGR informed the Special Committee that the revised offer did not provide greater clarity regarding how Dr. Jin and V99 proposed to finance the transaction nor regarding the proposed transaction structure, and summarized other issues with V99’s proposal, including the shortened “go-shop” period and treatment of equity awards. The Special Committee then discussed the potential ramifications if Dr. Jin were to initiate a tender offer that was not approved by the Special Committee, as he indicated he was considering to the representatives of B. Riley. The representatives of B. Riley updated the Special Committee on B. Riley’s activities, summarizing the number of bidders contacted, the number of bidders that had passed on a further discussion, those that had entered into nondisclosure agreements, and the status of preliminary discussions with possible bidders who remained in the process. The Special Committee and representatives of WSGR and B. Riley discussed Dr. Jin’s proposed “go-shop” termination date of October 30th, whether such period would be sufficient for an appropriate “go-shop” process and whether such a proposal would comport with the Special Committee’s fiduciary duties and market norms. The Special Committee then discussed potential strategies with respect to V99’s revised proposal, including the timing of a definitive agreement, potential exclusivity with V99, the length of a “go shop”, breakup fees, transaction structure, equity award treatment and concerns regarding V99’s ability to finance the proposed transaction. Representatives of WSGR provided advice on the nature of a “go-shop”, breakup fees and financing commitments in light of the Special Committee’s fiduciary obligations related thereto. The Special Committee authorized the representatives of WSGR to contact Norton Rose to obtain clarity regarding the terms of V99’s revised proposal. Those present then discussed the financial forecasts that would be shared with potential bidders in light of the various scenarios the Special Committee had considered with respect to the lack of clarity regarding Telenav’s role in a large customer’s next-generation products, the likelihood that such information was already in the marketplace, and the financial analyses that B. Riley may perform in connection with any potential transaction as it related to such financial forecasts.

After the meeting of the Special Committee, representatives of WSGR and Norton Rose held a telephone call to discuss V99’s revised proposal. Representatives of Norton Rose communicated that V99 was willing to consider changes proposed by the Special Committee, including structuring the transaction as a merger, permitting the Special Committee to have a “go-shop” period after the signing of any definitive agreement and the proposed treatment of equity awards. The representatives also discussed the need for V99 to clarify how it intended to finance the potential acquisition.

 

31


Table of Contents

Later on October 21, 2020, the Special Committee held a second meeting with Messrs. Manzoor and Debenham and representatives of B. Riley and WSGR in attendance. Representatives of WSGR updated the Special Committee on their discussions with representatives of Norton Rose, including Norton Rose’s input that V99 was willing to (i) structure the transaction as a merger, (ii) permit a “go-shop” period after the signing of the definitive agreement, and (iii) consider changes to the proposed equity award treatment. The Special Committee and others present discussed the proposed revisions to V99’s proposal, including the transaction structure, the proposed breakup fee, the “go-shop” period, and the treatment of proposed equity awards. Representatives of WSGR also provided an update of their discussions with representatives of Norton Rose regarding the timing and content of any commitment letters from Mr. Chen, Digital and other financing participants in the proposed transaction. In light of information received from V99’s counsel, the Special Committee expressed the belief that there was not currently a clear path to financing the transaction as it appeared that Dr. Jin and Mr. Chen had not yet reached an understanding with respect to V99’s capitalization or the financing of the offer. The Special Committee discussed the need to have a customary commitment letter for such financing entered into at the time of the execution of the merger agreement.

Following the second meeting of the Special Committee on October 21, 2020, representatives of WSGR delivered a revised draft of the term sheet to Norton Rose which modified the proposed equity award treatment, extended the “go-shop” period to 30 days after the signing of any definitive agreement, lowered the breakup fees payable by Telenav and revised the transaction structure to a statutory merger.

On the night of October 21, 2020, Norton Rose delivered to WSGR an initial draft of the merger agreement providing for V99’s acquisition of all of the outstanding shares of Common Stock.

On October 23, 2020, the Special Committee held a meeting with Mr. Manzoor, Mr. Debenham, Hassan Wahla (Telenav’s Chief Customer Officer) and representatives of B. Riley and WSGR in attendance. Members of management summarized for the Special Committee recent discussions with a large customer a potential shift by the customer to the Android operating system for future vehicle models, which presented a lack of clarity regarding Telenav’s role in the customers’ next-generation products. Telenav management noted that an agreement with GAS was still under negotiation and had not yet been signed by the customer and that the timeline to transition various vehicle models was likely to be delayed past the initial adoption date the customer had previously indicated. The Special Committee discussed the status of the customer relationship and potential the impact on Telenav’s business and on a proposed sale of Telenav. Mr. Wahla left the meeting after this discussion and Mr. Manzoor then reviewed and discussed with the Special Committee the assumptions and inputs underlying the third scenario for Telenav’s long-term financial projections (in addition to the “Extension Projection” and the “No Extension Projections” as further described in the section “Special Factors—Financial Projections,”) that Telenav’s management had modeled at the request of the Special Committee (the “Maintenance Projections”). Members of Telenav management reviewed the financial metrics underlying the Maintenance Projections, the impact that various assumptions had had on the Maintenance Projections, and the results of the analysis, including a review of the combined organic and inorganic revenue analysis for the Maintenance Projections. The Special Committee then discussed with the assistance of those present which of the three sets of projections should be provided to potential bidders and used by B. Riley in connection with its financial analysis, the assumptions underlying each, which set of projections was most consistent with management’s expectations for Telenav’s business and the costs and benefits of providing multiple projections to potential bidders. At the conclusion of the discussion, the Special Committee requested that management place the “Extension Projections” and “No Extension Projections” in the data room to be available to potential bidders.

On October 23, 2020, the Special Committee held a second telephonic meeting with members of WSGR in attendance. Representatives of WSGR led a discussion regarding the material terms of the draft merger agreement, which included a summary of the lack of financing commitments or covenants, the treatment of equity awards, fiduciary-out provisions and related breakup fees, the proposed closing conditions, the absence of employee-related covenants, regulatory matters, the obligations of the parties to use commercially reasonable best efforts to effect the closing, the termination dates and the proposed extension of such dates in the event that

 

32


Table of Contents

regulatory approvals were still pending, and representations and warranties. The Special Committee provided guidance to WSGR regarding WSGR’s response draft of the merger agreement, including that such draft must provide for the delivery of concurrent financial commitment papers by Mr. Chen and Digital. The Special Committee resumed its prior discussion regarding the projections for Telenav’s long-term financial model to be provided in the data room for prospective bidders and used by B. Riley in preparing its financial analysis.

On October 24, 2020, WSGR delivered a revised draft of the merger agreement to Norton Rose, which revisions included (i) provisions requiring V99 to deliver financing commitment papers concurrently with the execution of the merger agreement and customary representations and covenants regarding such financing, (ii) provisions requiring Dr. Jin and Mr. Chen and their respective affiliates to enter into a voting and support agreement concurrently with the execution of the merger agreement pursuant to which they would agree to vote their shares in accordance with directions from the Special Committee and otherwise support transactions consistent with the directions of the Special Committee, (iii) the deletion of certain closing conditions and other changes reducing closing uncertainty, (iv) a reduction in the number of days in which V99 could match a Superior Proposal and other changes so that Telenav’s fiduciary out provisions were more favorable, including a reduction in the related fees if the Special Committee were to terminate the merger agreement or change its recommendation in connection with a superior proposal, (v) covenants requiring the parties to use their respective reasonable best efforts to close the merger, (vi) revised provisions concerning the treatment of equity awards proposed to be cashed out at closing, (vii) improving the definition of what constituted a material adverse effect to provide additional carve outs, and (viii) otherwise requiring V99 to make more comprehensive representations and warranties.

On October 26, 2020, Norton Rose delivered to WSGR an initial draft of a financing commitment letter from Dr. Jin and Mr. Chen pursuant to which Dr. Jin and Mr. Chen would, if executed, agree to jointly and severally commit to provide equity and debt financing in an amount sufficient to fund the aggregate merger consideration. Representatives of WSGR and Norton Rose discussed the terms of the draft financing commitment letter over the course of the next two days.

On October 27, 2020, Telenav and Party B executed a non-disclosure agreement that did not contain a standstill provision. Later that day, Party B received access to a virtual data room containing non-public information of Telenav.

On October 28, 2020, Sponsor A informed B. Riley that it would like to have a meeting with members of Telenav’s management to further assess Telenav’s operations, technologies and prospects. Later that day, Sponsor A received access to a virtual data room containing non-public information of Telenav.

On October 28, 2020, Norton Rose delivered an updated draft of a financing commitment letter, which provided greater clarity and certainty regarding all operative terms, including limiting the conditionality of the financing to the satisfaction or waiver of the conditions to V99’s obligations to consummate the merger contemplated by the merger agreement and revising the financing construct such that Dr. Jin and Mr. Chen would be jointly and severally committing to provide V99 with debt financing in an amount sufficient to fund the aggregate merger consideration.

On October 28, 2020, the Telenav Board held a regularly scheduled telephonic meeting with members of Telenav management and representatives of WSGR in attendance. The Telenav Board did not discuss V99’s proposal to acquire Telenav during such meeting.

After the regularly scheduled Telenav Board meeting on October 28, 2020, the Special Committee held a telephonic meeting with Mr. Manzoor, Mr. Debenham, Scott Kelly (Telenav’s executive leader of human resources), and representatives of B. Riley and WSGR in attendance. Members of Telenav management led a discussion regarding annual incentive equity awards proposed to be issued to nonexecutive employees, and explained how the pool of proposed awards differed from the pool of awards approved by the board’s

 

33


Table of Contents

compensation committee in August 2020, and summarized the prior communications to employees regarding the proposed awards subject to approval by the compensation committee. Representatives of WSGR reviewed the fiduciary duties of the Special Committee in approving grants of equity awards and, after further discussion, the Special Committee approved the annual equity incentive awards and equity incentive awards for new hires. A member of Telenav management informed the Special Committee that Telenav management was deferring any request regarding cash retention bonuses. Mr. Kelly left the meeting after this discussion. Next, representatives of B. Riley updated the Special Committee regarding the strategic process being conducted on behalf of the Special Committee, summarizing the third parties that had indicated that they were not interested in acquiring Telenav, the parties that had entered into nondisclosure agreements, the parties that had been granted access to the virtual data room, the level of activity of their review of the materials in the data room, and that two parties had requested a management meeting. The Special Committee then discussed the timetable for the two management meetings and the timing of the strategic process relative to negotiation of a transaction with V99. The Special Committee led a discussion regarding the merger agreement, including (i) the proposed “go-shop” period and the potential impact that signing a definitive agreement with V99 on the expedited timeline required by Dr. Jin could have on other potential bidders evaluating whether to make an offer during the “go shop” period, and (ii) potential regulatory matters. Representatives of WSGR updated the Special Committee regarding negotiations with Norton Rose on the terms and conditions of the financing commitment letter, and discussed the need for Telenav to have third-party beneficiary rights in respect of any such commitment. The Special Committee discussed the timeline of negotiations with Dr. Jin in light of Telenav’s schedule to issue its earnings release on November 5, 2020, and provided input to WSGR regarding negotiations with Norton Rose on the merger agreement and other ancillary agreements.

On October 28, 2020, Mr. Miller, on behalf of the Special Committee, had a call with Dr. Jin to discuss open issues on the merger agreement, commitment letter and transaction timing. Mr. Miller communicated to Dr. Jin that it was important for a financing commitment to be in place at the time of signing the merger agreement so that the Special Committee could enforce the terms of any such commitment and have visibility into the V99 capital structure and its financing arrangements. Dr. Jin told Mr. Miller that V99 planned to finalize its financing after the signing of the merger agreement and did not necessarily agree that it had to be organized before then. Mr. Miller and Dr. Jin agreed that an additional call between the Special Committee, Dr. Jin and their respective legal counsel would be helpful to reach an understanding. Mr. Miller also conveyed to Dr. Jin the challenges with requiring any Telenav employee to convert his or her equity awards into equity awards for shares of V99 common stock or that of the surviving corporation. At the conclusion of the call, Dr. Jin reiterated to Mr. Miller his desire to sign the merger agreement and announce the transaction as soon as practicable and, in any event, before Telenav’s planned November 5, 2020 earnings call.

On October 28, 2020, representatives of WSGR and Norton Rose had a call to discuss the merger agreement, the commitment letter, a voting and support agreement, and transaction timing. During such call, representatives of Norton Rose informed representatives of WSGR that Dr. Jin wanted to sign the merger agreement by October 30, 2020, and that Dr. Jin had indicated that V99 might reduce the proposed offer price per share or withdraw V99’s offer to acquire Telenav, if the merger agreement was not signed by such date. In addition, representatives of Norton Rose communicated that, irrespective of the timing of signing of a merger agreement, Dr. Jin was not willing to agree to vote in accordance with the recommendations of the Special Committee with respect to any alternative transaction proposal submitted after the 30-day “go-shop” period.

On October 28, 2020, Norton Rose delivered a revised draft of the merger agreement to WSGR, which revisions included a construct of mutual termination fees in the event either party breached its obligations under the merger agreement under certain circumstances, a mutual liability cap for potential damages, a limitation of the period of time in which V99 could match a superior proposal, a reduction of V99’s financing-related representations and covenants, an expansion of the circumstances in which V99 could claim that Telenav had suffered a material adverse effect, and a revision to the proposed equity award treatment such that holders of unvested RSUs would receive cash payments equal to the merger consideration, subject to continued vesting

 

34


Table of Contents

requirements, but that the unvested restricted stock units of certain specified employees would convert into restricted stock units of the surviving corporation.

On October 29, 2020, B. Riley contacted representatives of Party A to assess Party A’s interest in acquiring Telenav and to potentially schedule a telephonic meeting with members of Telenav’s management.

On October 29, 2020, WSGR sent an initial draft of the voting and support agreement to Norton Rose, the terms of which required Dr. Jin, Mr. Chen, Digital and other members of the purchaser group to, among other things, vote all shares of Common Stock held by such persons in accordance with the publicly disclosed recommendation to Telenav stockholders by the Telenav Board or Special Committee, irrespective of whether such recommendation was to vote in favor of the adoption of the merger agreement or in favor of alternative superior transaction proposal.

On October 29, 2020, the Special Committee held a telephonic meeting with Messrs. Manzoor and Debenham and representatives of B. Riley and WSGR in attendance. Representatives of WSGR summarized for the Special Committee the material terms of the merger agreement and the latest draft financing commitment letter, and provided an update on their conversations with Norton Rose, including that Dr. Jin wanted to sign the merger agreement by October 30, and that Dr. Jin said V99 might lower the per share price or withdraw the offer if that timing was not met. The Special Committee discussed its concerns regarding V99’s status as a newly formed company with no material assets, Mr. Chen being a non-U.S. resident and Digital’s status as a British Virgin Islands entity, and the resulting difficulty in enforcing a judgment against V99, Mr. Chen or Digital, and the various mechanisms for providing remedies to Telenav in the event that any of V99, Dr. Jin or Mr. Chen failed to perform. The Special Committee discussed the benefits and costs of the various alternatives to enforce the obligations under the commitment letter, including the Special Committee’s concern that reacting too aggressively could stall further negotiations. The Special Committee then discussed a package for breakup fees and reverse breakup fees, and instructed the WSGR representatives to make a proposal regarding those fees to V99’s counsel. Representatives of WSGR also discussed V99’s proposed treatment of Telenav’s equity awards in the merger agreement, and the Special Committee determined that the equity awards held by certain employees should not be subject to different treatment as compared to equity awards held by other employees, but that V99 should be permitted to negotiate with a limited number of individuals after the “go-shop” period in case of mutual interest. Representatives of WSGR updated the committee that V99’s counsel had indicated that Dr. Jin would not agree to vote in accordance with the recommendations of the Special Committee with respect to any alternative transaction proposal submitted after expiration of the “go-shop” period. The Special Committee discussed Dr. Jin’s position, including that it was inconsistent with Dr. Jin’s prior public statements.

On October 30, 2020 at 7:00 a.m. (Pacific Time), the Special Committee and representatives from WSGR held a telephonic meeting with Dr. Jin and representatives from Norton Rose. The Special Committee discussed the importance of finalizing financing documentation and V99’s structure, including ensuring that Telenav had adequate remedial measures in the event that V99 or its financing sources did not perform their obligations under the merger agreement or the commitment letter. Dr. Jin communicated that the commitment papers would be finalized, but under no circumstances would V99, or any of its affiliates, deposit cash into a third party escrow account. Instead, Dr. Jin proposed that he would deposit an amount of cash equal to a percentage of the transaction value into V99’s bank account in the United States, and, to assuage the Special Committee’s concerns regarding V99 or the financing sources’ performance under the merger agreement and/or commitment letter, V99 would accept a reverse breakup fee equal to 4% of the transaction value. Dr. Jin communicated that this reverse breakup fee was contingent upon the Special Committee accepting the breakup fee proposed in V99’s latest draft of the merger agreement. Dr. Jin again expressed his desire to sign the merger agreement and conveyed that it was imperative that the Special Committee and its advisors finalize all transaction documentation expeditiously.

Following the call with Dr. Jin and his legal counsel, the Special Committee held a meeting on the morning of October 30, 2020, with representatives of B. Riley and WSGR in attendance. The Special Committee led a discussion regarding the terms of the financing commitment letter, its concerns regarding V99’s status as a newly

 

35


Table of Contents

formed company with no material assets, the identities of the financing sources under the commitment letter and the difficulty in enforcing remedies against them, the proposals related to breakup fees in the merger agreement in connection with V99’s failure to perform, and Dr. Jin’s proposal that Dr. Jin deposit and retain funds a U.S. bank account of which V99 was the beneficiary. The Special Committee also discussed the terms of the voting and support agreement, Dr. Jin’s statement that he would not agree to vote in accordance with the recommendations of the Special Committee with respect to any alternative transaction proposal submitted after the “go-shop” period, and the likelihood that another party would provide an offer that would be superior to V99’s proposal. Representatives of WSGR reviewed with the Special Committee its fiduciary obligations to Telenav stockholders in negotiating the terms of the definitive transaction documents, and the Special Committee discussed such duties and the means by which the Special Committee was addressing them in negotiating such agreements. The Special Committee then discussed the proposed transaction timing and the upcoming Telenav earnings release, and, at the request of the Special Committee, representatives of B. Riley confirmed that B. Riley expected to be in a position to render an opinion as to the fairness of the consideration in the proposed merger in line with the anticipated timing. The Special Committee discussed a proposed package of provisions to resolve open issues on the merger agreement, the commitment letter and the voting and support agreement and instructed WSGR to present the proposal to Dr. Jin and his counsel.

Later that morning on October 30, 2020, representatives of WSGR held a telephone call with representatives of Norton Rose, during which meeting the WSGR representatives communicated the package that the Special Committee proposed to resolve the open issues in the merger agreement, commitment letter and voting and support agreement, including a reverse breakup fee of 4% of the transaction value payable by V99 (limited to 3% with respect to a regulatory termination), agreeing to V99’s position on a 3% breakup fee payable by Telenav (limited to 1.5% in circumstances related to an excluded party), that V99 must have a specified amount of cash in its U.S. bank account prior to signing and covenant to leave such amount in the account during the pendency of the merger agreement, that the Special Committee be permitted to terminate the merger agreement and recover a reverse breakup fee in the event that the amount in such account fell below the agreed-upon threshold any time prior to closing, that the counterparties to the voting and support agreement need only vote their shares in favor of an alternative transaction with respect to an excluded party, and that Digital be a party to the commitment letter. In summarizing this position, representatives of WSGR also reiterated that the proposal assumed that Dr. Jin was and would continue to be the sole equity owner of V99. Following the telephone call, representatives of Norton Rose communicated to WSGR that Dr. Jin would agree to deposit an amount of cash into V99’s bank account up to $10 million, but that V99’s reverse breakup fee would be limited to 2% of the transaction value calculated based not on the equity value of Telenav, but on the merger consideration payable to Telenav stockholders not part of the Purchaser Group, which Dr. Jin estimated to be approximately $150 million, resulting in an approximate $3 million reverse breakup fee. Conversely, Norton Rose communicated Dr. Jin’s position that Telenav’s breakup fee of 3.5% would be calculated based on the equity value of Telenav and not the merger consideration payable to Telenav stockholders not part of the Purchaser Group. Finally, representatives of Norton Rose indicated that with respect to the voting and support agreement, Dr. Jin and the other members of the Purchaser Group would only agree to follow the Special Committee’s instruction that they support an alternative superior proposal if an agreement with such third party was reached during the “go-shop” period.

On October 30, 2020 at 12:30 p.m. (Pacific Time), the Special Committee held a second telephonic meeting with representatives of WSGR in attendance. Representatives of WSGR updated the Special Committee on their communications with Norton Rose regarding the open issues in the merger agreement, commitment letter and voting and support agreement, and Dr. Jin’s latest counterproposals in respect thereof. The Special Committee agreed upon a response for representatives of WSGR to present to Norton Rose addressing the outstanding matters, including the reverse breakup fees, the breakup fees, the “go shop” period, the terms of the voting and support agreement, and the requirement that V99 maintain certain minimum levels of cash during the pendency of the transaction.

Following the meeting of the Special Committee, representatives of WSGR had a telephone call with representatives of Norton Rose, during which call the WSGR representatives conveyed the Special Committee’s

 

36


Table of Contents

proposal, including: (i) a breakup fee of $4 million payable by Telenav with respect to terminations relating to superior proposals (limited to $2 million with respect to excluded parties), (ii) a reverse breakup fee of $4 million payable by V99 in cases of breaches of the merger agreement, or $3 million for regulatory-related terminations, (iii) that V99 be required to have $6 million in its U.S. bank account at signing, which amount must be maintained through the closing of the proposed transaction, and (iv) that the counterparties to the voting and support agreement agree to support alternative transaction proposals from excluded parties recommended by the Special Committee.

Soon after WSGR’s telephone call with Norton Rose, representatives of Norton Rose communicated to representatives of WSGR that Dr. Jin would accept a reverse breakup fee limited to $3 million payable by V99 in all respects, and that he and the other counterparties to the voting and support agreement would only agree to vote their shares in favor of a superior proposal with respect to a definitive agreement that was entered into during the “go-shop” period. Representatives of WSGR and Norton Rose then had another telephone call during which representatives of Norton Rose indicated that Dr. Jin and the other members of the Purchaser Group would agree to vote their shares in favor of a superior proposal received during the “go-shop” period and recommended by the Special Committee so long as the Special Committee notified V99 no later than two weeks after the expiration of the “go-shop” period that it was entering into a merger agreement in respect of such superior proposal.

On the afternoon of October 30, 2020, Mr. Cummins, on behalf of the Special Committee, had a telephone call with Dr. Jin, during which call both sides agreed that the breakup fee payable by Telenav in respect of terminations related to a superior proposal would be $3.5 million (limited to $2 million for superior proposals with respect to excluded parties), the reverse breakup fee payable by V99 would be $3.5 million in all applicable circumstances, and Dr. Jin and the other counterparties to the voting and support agreement would vote their shares in favor of a superior proposal recommended by the Special Committee so long as such proposal was received during the “go-shop” period and a definitive agreement was entered into within fifteen days of the end of the “go-shop” period.

On October 30, 2020 at 4:00 p.m. (Pacific Time), the Special Committee held a telephonic meeting with members of B. Riley and WSGR in attendance. Mr. Cummins updated the Special Committee regarding his recent discussion with Dr. Jin, and representatives of WSGR updated the Special Committee regarding their recent interactions with Norton Rose, including clarifying that Dr. Jin and the other members of the Purchaser Group would agree to vote their shares in favor of a superior proposal recommended by the Special Committee so long as the Special Committee notified V99 no later than two weeks after the expiration of the “go-shop” period that it was effecting a change in recommendation in accordance with the terms of the merger agreement in respect of such superior proposal. The Special Committee also discussed V99’s revised proposal regarding reverse breakup fees, breakup fees and the likelihood of a third party making an offer after the “go shop” period. The Special Committee discussed its fiduciary duties with representatives of WSGR and asked B. Riley to provide an update on the strategic process and the status of its discussions with potential bidders. The Special Committee discussed the current market environment, the likelihood of Telenav receiving offers from third parties, Dr. Jin’s position that it was his best and final offer and the results of the negotiations to date, the impact of stock market volatility on Dr. Jin’s, Mr. Chen’s and Digital’s ability to fund the merger consideration for the potential transaction, the premium relative to the unaffected price of shares of Common Stock before Dr. Jin’s initial offer and various other considerations for and against V99’s proposal to acquire Telenav. After discussion, the Special Committee authorized the WSGR representatives to agree to the proposal made by Dr. Jin with the changes proposed by the Special Committee and to continue negotiation of the definitive agreements on those terms.

On the night of October 30, 2020, WSGR sent updated drafts of the merger agreement, commitment letter and voting and support agreement to Norton Rose. In addition to revising the terms of the merger agreement to match the parties’ agreements with respect to breakup fees, reverse breakup fees, and the requirement that V99 maintain $6 million in its U.S. bank account at signing and all times during the period prior to closing, the

 

37


Table of Contents

updated draft merger agreement, among other things, clarified the circumstances in which Telenav would be entitled to receive a reverse breakup fee from V99 in connection with a termination of the merger agreement, revised the proposed equity award treatment such that all employees that held unvested restricted stock units would receive a cash payment equal to the merger consideration in respect of such awards, subject to continued vesting requirements, and enhanced the representations that V99 would be making to Telenav, including in respect of its financing arrangements. The updated draft commitment letter clarified that Telenav was an express third-party beneficiary of Dr. Jin’s, Mr. Chen’s and Digital’s joint and several commitment to provide V99 with financing in an amount sufficient to fund the aggregate merger consideration, and that Telenav had the right to specific performance in connection therewith.

On the morning of October 31, 2020, Mr. Cummins and Dr. Jin had a telephone call during which Dr. Jin expressed his frustration that the definitive transaction documents were not yet finalized, and communicated that he wanted to sign the definitive agreements by Sunday, November 1, 2020 so that the transaction could be publicly announced prior to the market opening on Monday, November 2, 2020. Dr. Jin told Mr. Cummins that the proposed purchase price would drop by 10 cents every day after Monday, November 2, 2020 if the merger agreement had not yet been signed.

Later that morning, Dr. Jin sent an email to the Special Committee and representatives of WSGR that he wanted the definitive agreements executed by 8:00 p.m. (Pacific Time) that evening. To the extent that the merger agreement was not signed by 8:00 p.m. (Pacific Time) on October 31, 2020, Dr. Jin said that the offer price would drop to $4.70 per share, that if the merger agreement was not signed by 8:00 p.m. (Pacific Time) on November 1, 2020, the offer price would drop to $4.60 per share, and that if the merger agreement was not signed by 6:00 a.m. (Pacific Time) on November 2, 2020, V99 would withdraw its offer.

On the afternoon of October 31, 2020, representatives of Norton Rose contacted representatives of WSGR to discuss two potential modifications to the merger agreement: (i) Dr. Jin’s proposal that the sole remedy for V99’s failure to close the transaction if all closing conditions had otherwise been satisfied would be the reverse breakup fee of $3.5 million payable by V99, and (ii) that Dr. Jin be permitted to contact certain employees to inquire whether they would agree to different treatment in respect of their unvested RSUs than as otherwise set forth in the merger agreement. Representatives of WSGR and Norton Rose also discussed Dr. Jin’s email and the fact that it was not possible to sign a definitive merger agreement on Dr. Jin’s timeline because V99 had not formed a merger subsidiary, which would need to execute the merger agreement, and because V99 had not provided evidence of the required deposit of funds into a U.S. bank account in the name of V99.

Representatives of WSGR subsequently discussed the proposed changes with the members of the Special Committee and, following the Special Committee’s approval, WSGR sent a revised draft of the merger agreement incorporating these revisions, with the qualification that Dr. Jin’s communications in respect of the Telenav equity awards be limited to no more than 12 Telenav employees, and that all such discussions take place after the “go-shop” period.

On the afternoon of October 31, 2020, Norton Rose sent a revised draft of the commitment letter, eliminating Telenav’s third-party beneficiary and specific performance rights. WSGR and Norton Rose finalized the terms of the commitment letter shortly thereafter, reinserting such rights, but clarifying that Dr. Jin’s, Mr. Chen’s and Digital’s obligation to fund a cash amount equal to the aggregate merger consideration in accordance with the terms of the commitment letter would terminate upon a valid termination of the merger agreement in accordance with its terms. Norton Rose confirmed that it had no further substantive modifications to the voting and support agreement last circulated by WSGR on October 30, 2020.

On October 31, 2020 at 6:30 p.m. (Pacific Time), the Special Committee held a telephonic meeting with representatives of WSGR in attendance. Representatives of WSGR updated the Special Committee regarding the status of the definitive agreements and discussed Dr. Jin’s requirement that the parties sign such agreements by 8:00 p.m. that evening. Representatives of WSGR informed the Special Committee that even if Dr. Jin wanted to

 

38


Table of Contents

sign the merger agreement that evening, formally doing so was impossible because V99 had yet to create its merger subsidiary and impracticable because V99 had not yet provided evidence that it had $6 million in its U.S. bank account. Representatives of WSGR discussed possible approaches considering Dr. Jin’s requirement that the parties “sign” by 8:00 p.m. (Pacific Time). The Special Committee authorized representatives of WSGR to prepare signature pages, stipulating that such signature pages, when signed, would be held in escrow until after the merger subsidiary had been formed, V99 had the funds in its bank account, and the Special Committee and Telenav Board had approved the merger agreement and the merger.

On October 31, 2020 at 8:00 p.m. (Pacific Time), representatives of WSGR circulated signature pages to all contemplated parties to the merger agreement, voting and support agreement and commitment letter. The parties to such agreements executed the applicable signature pages, with such signature pages to be held in escrow until the merger subsidiary had been formed, V99 had the funds in its bank account and the Special Committee and Telenav Board had approved the merger agreement and the merger, and that in the event there was any modification to the terms of the applicable underlying agreements, such signatory would have to confirm that his, her or its signature was effective once again.

From the night of October 31, 2020 through November 2, 2020, WSGR and Norton Rose exchanged several drafts of the merger agreement to clarify and/or correct certain nonmaterial terms. The merger agreement was finalized on the morning of November 2, 2020.

On November 1, 2020, the Special Committee held a meeting with Messrs. Manzoor and Debenham and representatives of B. Riley in attendance. Representatives of WSGR updated the Special Committee on the status of the merger agreement, commitment letter, and the voting and support agreement, and reviewed the open action items, which included evidence that a merger subsidiary had been formed and that wire of funds had been made to V99’s bank account. Representatives of B. Riley reviewed a draft of B. Riley’s financial analysis. The Special Committee discussed the impact on B. Riley’s analysis of the different sets of assumptions previously discussed by the Special Committee about whether a large customer would transition to an Android platform. Representatives from B. Riley indicated that based on the October 31, 2020 draft of the merger agreement and related documents and B. Riley’s preliminary financial analysis, and assuming no material changes to the draft merger agreement, B. Riley would be prepared to render an opinion as to the fairness, from a financial point of view, to Telenav stockholders (other than the members of the Purchaser Group) of the per share consideration of $4.80 to be received by such holders in the merger pursuant to the merger agreement. Representatives of WSGR then reviewed the fiduciary duties applicable to the Special Committee in considering the merger agreement and the merger and the other components of the transaction, as well as the legal standard for review in the context of a potential sale of Telenav. Representatives of WSGR reviewed the material terms of the merger agreement, the terms of the commitment letter and the voting and support agreements, including, with respect to the merger agreement, the treatment of equity awards, certain covenants and closing conditions, the termination provisions, including those that would be applicable in the event that the Special Committee changed its recommendation in respect of a superior proposal during and after the “go shop” period, as well as the various fees payable upon the occurrence of certain events. Representatives of WSGR then discussed a proposed amendment to Telenav’s bylaws to adopt a forum-selection provision, and reviewed the draft resolutions that the Special Committee would be adopting in the event it approved the merger agreement and merger.

On November 2, 2020, representatives of Party A confirmed to B. Riley that it was available to telephonically meet with members of Telenav’s management on November 4, 2020, and provided an agenda of the topics to be covered during such meeting.

On November 2, 2020 at 12:00 p.m. (Pacific Time), the Telenav Board held a telephonic meeting with Messrs. Manzoor and Debenham and representatives of B. Riley and WSGR in attendance. Two directors were absent, Mr. Chen and Ken Xie. Representatives of WSGR explained the purpose of the meeting and noted that Mr. Chen had waived notice of the meeting, but that Mr. Xie had not yet responded to a request for such a waiver. At the end of this discussion, Dr. Jin left the meeting. The meeting was then suspended so that the Special Committee could hold its meeting.

 

39


Table of Contents

On November 2, 2020 at 12:05 p.m. (Pacific Time), the Special Committee held a telephonic meeting with members of Telenav management and representatives of B. Riley and WSGR in attendance. Representatives of WSGR reported that the definitive transaction agreements were in final form and summarized the changes since the prior Special Committee meeting and updated the Special Committee regarding the receipt of open deliverables, including evidence that a merger subsidiary had been formed and a wire of funds had been made into V99’s U.S. bank account. Representatives of B. Riley confirmed that there had been no changes to the financial analysis B. Riley reviewed with the Special Committee on November 1, 2020, and reviewed the various qualifications, assumptions and limitations set forth in B. Riley’s draft written opinion. At the request of the Special Committee, a representative of B. Riley orally provided the opinion of B. Riley that, as of November 2, 2020, and based upon and subject to the qualifications, limitations and assumptions set forth in the draft written opinion provided to the Special Committee, the per-share consideration of $4.80 to be received by Telenav stockholders (other than the members of the Purchaser Group) in the Merger pursuant to the Merger Agreement was fair to such stockholders from a financial point of view. The B. Riley representative noted that such opinion would be confirmed in writing by delivery of a written opinion promptly following the meeting. Representatives of WSGR then reviewed the draft resolutions that had been provided to the Special Committee prior to the meeting, and at the conclusion of the discussion, the Special Committee adopted resolutions approving, among other things, the Merger Agreement and the Merger.

Following the conclusion of the Special Committee meeting, the Telenav Board resumed its telephonic meeting, without Dr. Jin rejoining, and without Messrs. Chen or Xie attending. Representatives of WSGR reviewed with the Telenav Board the draft resolutions that were circulated prior to the meeting to consider the proposal by V99 to acquire the outstanding shares of Common Stock pursuant to the merger agreement and the transactions contemplated thereby. Representatives of WSGR reviewed with the Telenav Board the actions taken by the Special Committee, including the Special Committee’s recommendation that the Telenav Board adopt resolutions to approve the merger agreement and merger. At the conclusion of the discussion, the Telenav Board adopted resolutions approving, among other things, the Merger Agreement, the Merger and the amendment of Telenav’s bylaws to adopt a forum-selection provision.

Following the conclusion of the Telenav Board meeting, in response to requests that Mr. Xie waive notice of such meeting, Mr. Xie informed Dr. Jin that Mr. Xie would not be providing a waiver of notice of the Telenav Board meeting, and notified Dr. Jin and representatives of WSGR that Mr. Xie resigned from the Telenav Board with immediate effect.

On November 2, 2020 at 6:00 p.m. (Pacific Time), the Telenav Board held a telephonic meeting with Messrs. Manzoor and Debenham and representatives of B. Riley and WSGR in attendance. Mr. Chen was absent from and waived notice of the meeting. Representatives of WSGR described the purpose of the meeting and noted that Mr. Chen had provided a waiver of notice of the meeting. Representatives of WSGR noted that Mr. Xie had earlier resigned from the Telenav Board and had not provided his waiver of notice of the meeting held at 12:00 p.m. (Pacific Time). Representatives of WSGR described the impact of the lack of waiver on the validity of the prior Telenav Board meeting from a legal perspective. Those present discussed reducing the size of the Telenav Board to five members and, at the end of this discussion, Dr. Jin left the meeting. The meeting was then suspended so that the Special Committee could hold its meeting.

On November 2, 2020 at 6:05 p.m. (Pacific Time), the Special Committee held a telephonic meeting with Messrs. Manzoor and Debenham and representatives of B. Riley and WSGR in attendance. Representatives of WSGR described the purpose of the meeting and noted that Mr. Xie had resigned from the Telenav Board and had not provided his waiver of notice of the Telenav Board meeting held at 12:00 p.m. (Pacific Time). Representatives of WSGR described the impact of the lack of waiver on the validity of such board meeting from a legal perspective. Representatives of WSGR reported on discussions between Norton Rose and counsel for Mr. Xie regarding the possibility of Mr. Xie becoming a member of the Purchaser Group, and noted that Mr. Xie would need the approval of his employer to join the Purchaser Group, which approval had not yet been provided. The Special Committee then discussed whether Mr. Xie’s resignation and his possible participation in the

 

40


Table of Contents

Purchaser Group would alter the Special Committee’s views of the transaction and whether the Special Committee would have undertaken a different process. The Special Committee determined that it would not have changed its process and that its conclusions regarding V99’s proposal and the proposed Merger would not change as a result of Mr. Xie’s resignation and possible participation in the Purchaser Group. At the request of the Special Committee, representatives of B. Riley confirmed that Mr. Xie’s resignation would not impact B. Riley’s financial analysis or its fairness opinion. The representatives of B. Riley confirmed that there had been no changes to the analysis previously provided by B. Riley and again reviewed the various qualifications, assumptions and limitations set forth in B. Riley’s draft written opinion. At the request of the Special Committee, representatives of B. Riley then orally confirmed the opinion of B. Riley that, as of November 2, 2020, and based upon and subject to the qualifications, limitations and assumptions set forth in the draft written opinion provided to the Special Committee, the per share consideration of $4.80 to be received by Telenav stockholders (other than the members of the Purchaser Group) in the Merger pursuant to the Merger Agreement was fair to such stockholders from a financial point of view. The representatives of B. Riley further noted that such opinion would be confirmed in writing by delivery of a written opinion promptly following the meeting. Representatives of WSGR then reviewed the draft resolutions that had been provided to the Special Committee prior to the meeting, and at the conclusion of the discussion, the Special Committee adopted resolutions approving, among other things, the Merger Agreement and the Merger.

Following the conclusion of the Special Committee meeting, the Telenav Board resumed its telephonic meeting, without Dr. Jin rejoining or Mr. Chen attending. Representatives of WSGR reviewed with the Telenav Board the draft resolutions that were circulated prior to the meeting to reduce the size of the board to five members and to consider the proposal by V99 to acquire the outstanding shares of Common Stock pursuant to the Merger Agreement and the transactions contemplated thereby. Representatives of WSGR reviewed with the Telenav Board the actions taken by the Special Committee, including the Special Committee’s recommendation that the Telenav Board adopt resolutions to approve the Merger Agreement and Merger. At the conclusion of the discussion, the Telenav Board adopted resolutions approving, among other things, the reduction of the size of the board to five members, the Merger Agreement, the Merger, and the amendment of Telenav’s bylaws to adopt a forum-selection provision.

Also on November 2, 2020 following the conclusion of the Telenav Board meeting, Telenav, V99 and Telenav99, Inc., executed and delivered the Merger Agreement and, concurrently therewith, the Commitment Letter and the Voting and Support Agreement were executed and delivered by the parties thereto.

Before markets opened on November 3, 2020, the parties issued a joint press release announcing the execution of the Merger Agreement.

On November 3, 2020, at the direction of the Special Committee, B. Riley began contacting additional potential counterparties to an alternative transaction proposal with Telenav in connection with the “go-shop” period. During the “go-shop” period, which expired at 11:59 p.m. (Pacific Time) on December 2, 2020, B. Riley contacted 39 third parties, of which 16 were strategic parties and 23 were financial sponsors. No third party first contacted by B. Riley during the “go-shop” period entered into a non-disclosure agreement or made a proposal to acquire Telenav prior to the expiration of the “go-shop” period. During the “go-shop” period, B. Riley continued to engage with certain third parties who had been contacted by B. Riley during the strategic process prior to Telenav entering into the Merger Agreement, including Party A, Party B and Sponsor A, all of whom would have telephonic management meetings with Telenav during the “go-shop” period, as described below. Ultimately, no third party made a proposal to acquire Telenav prior to the expiration of the “go-shop” period.

During the “go-shop” period, the Special Committee held weekly telephonic meetings with representatives of B. Riley and WSGR in attendance (the dates of such meetings: November 6, 2020, November 13, 2020, November 20, 2020, November 27, 2020 and December 1, 2020). During each meeting, B. Riley representatives reviewed the efforts that they had undertaken to contact other potential bidders during the “go-shop” period and summarized discussions that they or Telenav’s management had with third parties potentially interested in a

 

41


Table of Contents

strategic transaction with Telenav, including Party A, Party B and Sponsor A, and the Special Committee discussed efforts to contact additional potentially interested third parties and solicit an offer from parties already engaged in discussions with B. Riley.

On November 3, 2020, B. Riley updated representatives of Party A, Party B, and Sponsor A regarding Telenav’s entry into the Merger Agreement with V99. B. Riley informed all such parties that (i) the “go-shop” period expired at 11:59 p.m. (Pacific Time) on December 2, 2020, (ii) pursuant to the voting and support agreement, any third party must submit an alternative transaction proposal prior to the expiration of the “go-shop” period in order for Dr. Jin and the other members of the Purchaser Group to have any possible contractual obligation to vote in favor of such alternative proposal, and (iii) pursuant to the Merger Agreement, Telenav’s termination fee would be $2,000,000 (and not $3,500,000) if Telenav terminated the Merger Agreement to enter into a definitive agreement with respect to an alternative transaction proposal that was made by such party prior to the expiration of the “go-shop” period.

On November 4, 2020, B. Riley sent representatives of Party A, Party B and Sponsor A a presentation summarizing Telenav’s operations, competitors, products, technologies, growth initiatives, investments, and financial performance and prospects.

On November 4, 2020, Telenav held a telephonic management presentation with representatives of Party A, with representatives of B. Riley participating as well. Members of Telenav’s management presented to Party A regarding operational, financial, and technical aspects of Telenav.

On November 11, 2020, representatives of Party B, responding to outreach from representatives of B. Riley, confirmed that Party B still had interest in a possible strategic transaction with Telenav and wanted to schedule a meeting with members of Telenav’s management.

On November 11, 2020, representatives of Party A informed B. Riley that Party A’s corporate development team continued to assess the opportunity to pursue a strategic transaction with Telenav and planned to hold an internal meeting during the week of November 16, 2020, and would contact B. Riley thereafter.

On November 16, 2020, representatives of B. Riley and Party B had a telephone call during which the agenda for Party B’s upcoming management meeting was discussed.

On November 19, 2020, Telenav held a telephonic management presentation with representatives of Party B, with representatives of B. Riley participating as well. Members of Telenav’s management presented to Party B regarding operational, financial, and technical aspects of Telenav. Later that day, representatives of Party B indicated to B. Riley that Party B would like a second management meeting with Telenav, and Party B circulated diligence questions regarding certain of Telenav’s businesses, competitors and financial performance.

On November 23, 2020, B. Riley circulated to Party B Telenav’s response to Party B’s diligence questions. Later that day, Telenav held a second telephonic management presentation with representatives of Party B, with representatives of B. Riley participating as well. Members of Telenav’s management presented to Party B regarding revenue forecasts, operational expenses, insurance and human resource matters.

On November 24, 2020, a member of Telenav’s management had a telephone call with a representative of Party B to discuss potential synergies between Party B and Telenav.

On November 30, 2020, a member of Telenav’s management had a telephone call with a representative of Party B to discuss Party B’s interest in acquiring Telenav, including the potential benefits and risks associated with any such strategic transaction, and the expiration of the “go-shop” period on December 2, 2020.

On December 1, 2020, representatives of Party B and B. Riley had a telephone call during which Party B explained that it was passing on the opportunity to acquire Telenav because Party B believed that potential opportunities could be optimally pursued through a commercial partnership between the two companies.

 

42


Table of Contents

On December 2, 2020, a representative of Party A informed B. Riley that Party A would not pursue a strategic transaction with Telenav because Party A had concluded that acquiring Telenav would not provide Party A with the capabilities Party A was looking to develop, and that Party A would have to purchase additional assets to supplement any such strategic transaction.

In connection with the Delaware Complaint and after the expiration of the “go shop” period, the Special Committee met on December 3, 2020 and authorized representatives of WSGR to enter into a stipulation with the plaintiff that would provide for the Two-Thirds of the Minority Approval to be a nonwaivable closing condition to the Merger. Telenav and the plaintiff entered into the stipulation on December 10, 2020.

On December 17, 2020, the Special Committee held a telephonic meeting with Mr. Debenham and representatives of WSGR in attendance to consider a proposed amendment to the Merger Agreement to provide for (i) the Two-Thirds of the Minority Approval as a nonwaivable closing condition to the Merger and (ii) the shares of Common Stock held by the Purchaser Group to be converted into the right to receive the Merger Consideration (rather than no consideration as initially set forth in the Merger Agreement). Representatives of WSGR provided an overview of the proposed amendment, and, at the conclusion of the discussion, the Special Committee adopted resolutions approving the proposed amendment and the Merger Agreement, as amended by the proposed amendment. The Special Committee further believes that the Merger is fair to Telenav’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act.

Following the conclusion of the Special Committee meeting, the Telenav Board held a telephonic meeting, without Dr. Jin or Mr. Chen attending, with Mr. Debenham and representatives of WSGR in attendance to consider the proposed amendment to the Merger Agreement to provide for (i) the Two-Thirds of the Minority Approval as a nonwaivable closing condition to the Merger and (ii) the shares of Common Stock held by the Purchaser Group to be converted into the right to receive the Merger Consideration (rather than no consideration as initially set forth in the Merger Agreement). Representatives of WSGR provided an overview of the proposed amendment, and, at the conclusion of the discussion, the Telenav Board adopted resolutions approving the proposed amendment and the Merger Agreement, as amended by the proposed amendment. The Telenav Board, on behalf of Telenav, further believes that the Merger is fair to Telenav’s “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act.

Thereafter, on December 17, 2020, Telenav, V99 and Merger Sub entered into an amendment to the Merger Agreement to provide for (i) the Two-Thirds of the Minority Approval as a nonwaivable closing condition to the Merger and (ii) the shares of Common Stock held by the Purchaser Group to be converted into the right to receive the Merger Consideration (rather than no consideration as initially set forth in the Merger Agreement).

Recommendation of the Telenav Special Committee and the Telenav Board of Directors; Purposes and Reasons for the Merger; Fairness of the Merger

In response to Dr. Jin’s indication to independent members of the Telenav Board that he was considering a potential acquisition of Telenav, in light of, among other things, the presence of Dr. Jin and Mr. Chen on the Telenav Board and the fact that the beneficial ownership of Dr. Jin and Mr. Chen combined was approximately 20% of the outstanding Common Stock of Telenav, the Telenav Board determined that it was in the best interests of Telenav and its stockholders to form the Special Committee to manage the process for reviewing, evaluating, and negotiating the any potential strategic transaction involving Telenav, Dr. Jin and Mr. Chen (or any alternative thereto or related transactions). The Telenav Board delegated full power and authority to the Special Committee in connection with its evaluation of any potential transaction, including the full power and authority to, among other things: (i) review, evaluate, and negotiate any potential transaction; (ii) exercise all power and authority that may otherwise be exercised by the Telenav Board that the Special Committee may determine is necessary in furtherance of the consideration of a potential transaction, including, without limitation, the power and authority to approve, modify, or amend any Telenav equity awards and other compensatory arrangements in connection with a potential transaction; (iii) explore, review, approve, or disapprove the terms of a potential transaction; (iv) make recommendations to the Telenav Board with respect to a potential transaction;

 

43


Table of Contents

(v) negotiate and approve all agreements and other documents in connection with a potential transaction; and (vi) direct and receive advice and cooperation from any officers, employees, advisors, consultants, and agents of Telenav, and to retain, at Telenav’s expense, legal counsel and any additional third parties or advisors that the Special Committee may deem necessary. The Telenav Board further resolved that Telenav would not effect a strategic transaction (a) if it had not first been approved by the Special Committee, and (b) if required by the Special Committee, unless holders of the majority of shares of Common Stock not held by (x) Dr. Jin and Mr. Chen and their respective affiliates and any other stockholder who is part of a “group” with Dr. Jin and Mr. Chen and (y) any officer of Telenav, had approved such transaction.

The Special Committee

The Special Committee, acting with the advice and assistance of its independent legal and financial advisors, evaluated and directed the negotiation of the proposed Merger, including the terms and conditions of the Merger Agreement and the December 17, 2020 amendment thereto. At the telephonic meeting held on the evening of November 2, 2020 (described above in the section captioned “—Background of the Merger”), the Special Committee unanimously (i) determined that the Merger Agreement and the Merger were advisable and in the best interests of Telenav and its stockholders, (ii) approved the Merger Agreement and the Merger, (iii) recommended that the Telenav Board approve and adopt the Merger Agreement and the Merger, and (iv) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger. The Special Committee also recommended that the Telenav Board approve an amendment to the Telenav bylaws regarding forum selection matters.

At the telephonic meeting held on December 17, 2020 (described above in the section captioned “—Background of the Merger”), the Special Committee unanimously: (i) determined that (a) the proposed amendment to the Merger Agreement, (b) the Merger Agreement, as amended by such proposed amendment, and (c) the Merger were advisable and in the best interests of Telenav and its stockholders, (ii) approved the proposed amendment, the Merger Agreement, as amended by the amendment, and the Merger, (iii) recommended that the Telenav Board approve and adopt the proposed amendment, the Merger Agreement, as amended by the proposed amendment, and the Merger, and (iv) recommended that Telenav stockholders adopt the Merger Agreement, as amended by the proposed amendment, and approve the Merger. The Special Committee further believes that the Merger is fair to Telenav’s “unaffiliated security holders,” as defined under Rule 13e-3 of the Exchange Act.

In the course of its deliberations and in reaching its determination and making its recommendations, the Special Committee considered a number of substantive and procedural factors, including the following material factors:

 

   

the attractiveness of the Merger Consideration to the holders of Common Stock other than the members of the Purchaser Group, including:

 

   

the Special Committee’s belief that it had obtained V99’s best and final offer at the conclusion of an active negotiation process and that the Merger Consideration of $4.80 per share in cash represented the highest per share consideration reasonably obtainable;

 

   

the then-current and recent trading prices of the Common Stock on NASDAQ relative to the $4.80 Merger Consideration, including that: (i) the Merger Consideration represented an approximate 33.3% premium to $3.60, the closing trading price on the Last Unaffected Trading Day, and (ii) the Merger Consideration represented a 14.3% premium to $4.20, the volume weighted average closing trading prices of the Common Stock on NASDAQ for the 30 days ending on the Last Unaffected Trading Day; and

 

   

the fact that the Merger Consideration will be paid in cash, providing certainty, immediate value and liquidity to the holders of the Common Stock;

 

   

the oral opinion of B. Riley, subsequently confirmed in writing, rendered to the Special Committee, that as of November 2, 2020, and based upon and subject to the qualifications, limitations, assumptions and other matters considered by B. Riley in connection with the preparation of the opinion, the

 

44


Table of Contents
 

consideration to be received by the holders of shares of Common Stock (other than members of the Purchaser Group) in the Merger pursuant to the Merger Agreement was fair from a financial point of view to such holders, as set forth in such opinion, together with B. Riley’s financial analyses, each as more fully described in the section captioned “—Opinion of Financial Advisor to the Telenav Special Committee;”

 

   

the Special Committee’s analysis and discussions with the assistance of Telenav management and representatives of B. Riley regarding the current and historical financial condition, results of operations, business and prospects of Telenav, as well as Telenav’s financial plan and prospects and risks if Telenav were to remain independent and the potential impact of those factors on the trading price of the Common Stock;

 

   

the likelihood that the Merger would be completed based on, among other things:

 

   

the concurrent execution of the Commitment Letter with the Merger Agreement, and the representations and warranties of V99 in the Merger Agreement that the aggregate proceeds contemplated by the Commitment Letter are sufficient to enable the purchaser parties to consummate the Merger upon the terms contemplated by the Merger Agreement;

 

   

the absence of any significant regulatory impediments to the Merger;

 

   

Telenav’s ability, under certain circumstances pursuant to the Merger Agreement, to seek specific performance and to enforce specifically the terms of the Merger Agreement; and

 

   

the factors described below regarding the Voting and Support Agreement;

 

   

the financial projections, prepared by Telenav’s management and more fully described in the section “Special Factors—Financial Projections”, which were reviewed by the Special Committee and provided to B. Riley by Telenav management and approved by the Special Committee for use by B. Riley for the purposes of its financial analysis and opinion;

 

   

the terms of the Merger Agreement, including:

 

   

the fact that the Merger Agreement was not likely to preclude competing acquisition proposals, considering, among other things: (i) the ability of Telenav to solicit proposals for an offer that constitutes, or could reasonably be expected to constitute or lead to an Acquisition Proposal, and engage in discussions or negotiations with respect to any Acquisition Proposals until 11:59 p.m. on December 2, 2020, (ii) the ability of Telenav under certain circumstances to entertain unsolicited proposals for an acquisition that constitutes or is reasonably likely to constitute or lead to a Superior Proposal and negotiate with, and provide information to, third parties making such proposals, (iii) the ability of the Special Committee under certain circumstances to withdraw or modify its recommendation that the holders of Common Stock approve the Merger, including in connection with a Superior Proposal, (iv) Telenav’s right to terminate the Merger Agreement under certain circumstances in order to enter into a definitive agreement with respect to a Superior Proposal, (v) the termination fee Telenav would be required to pay to V99 in connection with the termination of the Merger Agreement in order to enter into an agreement with respect to a Superior Proposal and certain other circumstances being limited to $3.5 million (or $2.0 million in connection with superior proposals from excluded parties), which the Special Committee considered to be reasonable and customary given market practice, (vi) the termination fee of $3.5 million V99 would be required to pay Telenav in connection with the termination of the Merger Agreement in connection with, among other circumstances, a failure by V99 to consummate the Merger upon the satisfaction or waiver of all closing conditions and Telenav’s notice to V99 that it was ready, able and willing to close, and (vii) the factors described below regarding the Voting and Support Agreement; and

 

   

the other terms and conditions of the Merger Agreement, described in the section of this proxy statement captioned “The Merger Agreement,” which the Special Committee, after consulting

 

45


Table of Contents
 

with its legal counsel, considered to be reasonable and consistent with precedents it deemed relevant;

 

   

with respect to the entry by each Support Agreement Stockholders into the Voting and Support Agreement with Telenav:

 

   

the fact that the Voting and Support Agreement obligates the Support Agreement Stockholders to, subject to the terms and conditions of the Voting and Support Agreement, vote all shares of Common Stock owned by them in accordance with a Public Board Recommendation to Telenav stockholders (with respect to a Superior Proposal, if such proposal is made by an Excluded Party and the Special Committee changes its recommendation within 14 days after the end of the “go shop” period); and

 

   

the other terms of the Voting and Support Agreement, described in the section of this proxy statement captioned “Voting and Support Agreement,” which the Special Committee, after consulting with its legal counsel, considered to be reasonable;

 

   

the fact that there were no indications of interest or other proposals from third parties with respect to an acquisition of or other strategic transaction involving Telenav following the public announcement on October 1, 2020 in an amendment to Dr. Jin’s Schedule 13D, in a press release issued by Telenav on October 2, 2020 and a Current Report on Form 8-K publicly filed by Telenav on October 2, 2020, disclosing that V99 made a nonbinding proposal to Telenav regarding the acquisition by V99 of 100% of the outstanding shares of Common Stock of Telenav;

 

   

the factors that the Special Committee believes were and are present to establish sufficient procedural safeguards providing for the fairness of the Merger and for the Special Committee to represent the interests of Telenav’s unaffiliated security holders:

 

   

the Special Committee consists solely of directors of Telenav who are independent, disinterested with respect to the Merger and not otherwise affiliated with Telenav or V99;

 

   

the Special Committee engaged independent financial and legal advisors to advise it;

 

   

the fact that the consummation of the Merger was originally conditioned on, among other things, the vote of the holders of a majority of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition was not waivable, and the fact that, following the December 17, 2020 amendment to the Merger Agreement, the consummation of the Merger is conditioned on, among other things, the vote of the holders of 66 and two-thirds percent of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition is not waivable;

 

   

the resolutions of the Telenav Board forming the Special Committee and delegating to it the exercise all power and authority that may otherwise be executed by the Telenav Board;

 

   

the availability of appraisal rights to each of the holders of Common Stock who comply with all of the required procedures under the DGCL, as further described in the section of this proxy statement captioned “Appraisal Rights;” and

 

   

the Telenav Board’s ability (acting upon the recommendation of the Special Committee), under certain circumstances, to withdraw (or modify or qualify) its recommendation that Telenav stockholders vote to adopt the Merger Agreement; and

 

   

the process followed by the Special Committee prior to entry into the Merger Agreement, including that:

 

   

the Special Committee, together with its legal and financial advisors, met on twenty-five (25) occasions prior to Telenav’s entry into the Merger Agreement on November 2, 2020 to discuss and evaluate the strategic and other alternatives available to Telenav (including Telenav’s standalone growth prospects), the procedures for the sale process, the management of the sale

 

46


Table of Contents
 

process and the review of various transaction documents including the Merger Agreement, Voting and Support Agreement and Commitment Letter;

 

   

the fact that the terms of the Merger Agreement and the Merger Consideration resulted from arms’ length negotiations between the Special Committee, Telenav management and their legal and financial advisors, on the one hand, and V99 and its legal and financial advisors, on the other hand;

 

   

the uncertainties present in Telenav’s long-term business prospects as a result of one of its large automobile manufacturer customer’s likely shift to the Android operating system for future vehicle models and a lack of clarity regarding Telenav’s role in the customer’s next generation products as a result;

 

   

the fact that the Special Committee, Telenav management and their financial advisors ran an extensive pre-signing market check that resulted in B. Riley contacting seventy (70) strategic parties and financial sponsors, of which nine (9) entered into nondisclosure agreements with Telenav (or confirmed that previously existing nondisclosure agreements entered into with Telenav would govern any information or materials shared in connection with a potential strategic transaction), nine (9) received access to a virtual data room hosted by Telenav and three (3) held management meetings with Telenav; and

 

   

the fact that the Special Committee and its advisors negotiated the right for Telenav to solicit alternative acquisition proposals from third parties and to provide information to, and participate in discussions and engage in negotiations with, third parties regarding any alternative acquisition proposals for a 30-day “go shop” period beginning on November 2, 2020 and continuing until 11:59 p.m. on December 2, 2020.

The Special Committee also considered a number of potentially negative factors in its deliberations concerning the Merger, including the following material factors:

 

   

the risk that the Merger might not be completed, including the effect of the pendency of the Merger and the effect such failure to be completed may have on:

 

   

the trading price of shares of the Common Stock;

 

   

Telenav’s operating results, including the costs incurred in connection with the Merger; and

 

   

Telenav’s ability to attract and retain key personnel and customers;

 

   

that Telenav will no longer exist as a publicly traded company and that the unaffiliated security holders will no longer participate in the future potential growth of Telenav’s business;

 

   

that, under the terms of the Merger Agreement, Telenav is restricted from, after December 2, 2020, actively soliciting acquisition proposals other than from certain Excluded Parties who make certain proposals prior to such date;

 

   

that, under the terms of the Merger Agreement, Telenav will be required to pay to V99 a termination fee if the Merger Agreement is terminated to enter into an alternative agreement in connection with a Superior Proposal and under certain other circumstances, which may deter other parties from making an Acquisition Proposal that may be more advantageous to Telenav stockholders;

 

   

that, under the terms of the Merger Agreement, in order for Telenav to terminate the Merger Agreement to enter a definitive agreement with respect to a Superior Proposal from (i) a third party that is not an Excluded Party or (ii) an Excluded Party to the extent that the Telenav Board or an Independent Committee does not provide a Change in Recommendation notice to V99 by December 16, 2020, Telenav must enter into such definitive agreement with respect to such Superior Proposal without knowing with certainty if the Support Agreement Stockholders, who collectively own 34.7% of the outstanding Common Stock as of December 5, 2020 will support such Superior Proposal;

 

47


Table of Contents
   

that if the Merger does not close, (i) Telenav’s management and employees will have expended extensive time and efforts to attempt to complete the Merger and will have experienced significant distractions from their work during the pendency of the Merger, (ii) Telenav will have incurred significant transaction costs, and (iii) Telenav’s relationships with its customers, key partners, personnel and other third parties may be adversely affected;

 

   

the restrictions on the conduct of Telenav’s business prior to the completion of the Merger, which could delay or prevent Telenav from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of Telenav absent the pending completion of the Merger and which could impact the ability of Telenav to attract and retain key personnel;

 

   

the fact that there can be no assurance that all conditions to the parties’ obligations to complete the Merger will be satisfied or waived within the time frames contemplated by the Merger Agreement, and, as a result, the Merger may not be consummated;

 

   

the risk of litigation in connection with the Merger;

 

   

the fact that certain of Telenav’s directors and officers have interests in the Merger that are different from, or in addition to, Telenav stockholders. See “—Interests of Telenav’s Directors and Executive Officers in the Merger;” and

 

   

the fact that, for U.S. federal income tax purposes, the Merger Consideration will be taxable to Telenav stockholders who are entitled to receive such consideration.

The foregoing discussion of the factors considered by the Special Committee is not intended to be exhaustive, but rather includes the material factors considered by the Special Committee. In reaching its decision to approve the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement, the Special Committee did not quantify or assign any relative weights to the factors considered and individual directors may have given different weights to different factors. The Special Committee based its recommendation to the Telenav Board on the totality of the information made available to the Special Committee.

Neither the Special Committee nor a majority of the directors on the Telenav Board who are not employees of the Company retained an unaffiliated representative to act solely on behalf of the unaffiliated stockholders for purposes of negotiating the terms of the Merger Agreement and the Merger. The Special Committee and the directors on the Telenav Board who are not employees of the Company believe that it was not necessary to retain an unaffiliated representative because the Special Committee was charged with representing the interests of the unaffiliated stockholders and the Company, the Special Committee consisted solely of directors who are not officers or controlling stockholders of Telenav or any of the Purchaser Group Members, the Special Committee engaged its own financial and legal advisors to act on its behalf and was actively involved in deliberations and negotiations regarding the merger on behalf of the unaffiliated stockholders.

The Telenav Board

At a special meeting of the Telenav Board on the evening of November 2, 2020, after careful consideration, and acting upon the unanimous recommendation of the Special Committee, the Telenav Board unanimously (other than Dr. Jin and Mr. Chen) (i) determined that the Merger Agreement and the Merger are advisable and fair to, and in the best interests of, Telenav and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the Merger, (iii) recommended that Telenav stockholders adopt the Merger Agreement and approve the Merger, and (iv) approved an amendment to the Telenav bylaws regarding forum selection matters. The approval of the members of the Telenav Board present at the meeting constituted the approval of a majority of the directors who are not employees of Telenav.

At a special meeting of the Telenav Board on December 17, 2020, after careful consideration, and acting upon the unanimous recommendation of the Special Committee, the Telenav Board unanimously (other than Dr. Jin and Mr. Chen): (i) determined that (a) the proposed amendment to the Merger Agreement, (b) the Merger

 

48


Table of Contents

Agreement, as amended by such proposed amendment, and (c) the Merger are advisable and fair to, and in the best interests of, Telenav and its stockholders, (ii) approved, adopted and declared advisable the proposed amendment, the Merger Agreement, as amended by the proposed amendment, and the Merger, and (iii) recommended that Telenav stockholders adopt the Merger Agreement, as amended by the proposed amendment, and approve the Merger. The approval of the members of the Telenav Board present at the meeting constituted the approval of a majority of the directors who are not employees of Telenav.

The Telenav Board, on behalf of Telenav, further believes that the Merger is fair to Telenav’s “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act.

As described in the section captioned “—Background of the Merger,” prior to and in reaching these determinations, the Telenav Board consulted with and received the advice of the Special Committee and the financial and legal advisors to the Special Committee, and considered a variety of factors weighing positively in favor of the Merger and the fairness of the Merger to Telenav’s “unaffiliated security holders,” as defined under Rule 13e-3 under the Exchange Act, including the following material factors:

 

   

the factors considered by the Special Committee that are listed in the section of this proxy statement captioned “The Special Committee” above (including with respect to the process followed by the Special Committee prior to entering into the Merger Agreement);

 

   

the Special Committee’s analysis, conclusions and unanimous (i) determination that the Merger Agreement and the Merger are advisable and in the best interests of Telenav and its stockholders (other than the Purchaser Group), (ii) approval of the Merger Agreement and the Merger, (iii) recommendation that the Telenav Board approve and adopt the Merger Agreement and the Merger and (iv) recommendation that Telenav stockholders adopt the Merger Agreement and approve the Merger; and

 

   

the fact that the Special Committee is comprised of three independent directors who are not affiliated with the Purchaser Group or their respective affiliates and are not employees of Telenav or any of its subsidiaries, and the fact that, other than any compensation for their service on the Telenav Board and the Special Committee (which is not contingent upon the consummation of the Merger or the Special Committee’s or Telenav Board’s recommendation of the Merger) and their interests described under “—Interests of Telenav’s Directors and Executive Officers in the Merger,” the members of the Special Committee do not have an interest in the Merger different from, or in addition to, that of the holders of the Common Stock generally.

The Telenav Board also considered a number of potentially negative factors in its deliberations concerning the Merger, including the same potentially negative factors considered by the Special Committee that are listed in the above-captioned section of this proxy statement under the heading “—The Special Committee.”

To avoid any actual conflict of interest or the appearance of any conflict of interest, Dr. Jin, the Chief Executive Officer of V99 and the President and Chief Executive Officer of Telenav and a director of the Telenav Board, and Mr. Chen recused themselves from all discussions and presentations of Telenav and the Special Committee regarding the transactions contemplated by the Merger Agreement, including the Merger. As a result of the recusal of Dr. Jin and Mr. Chen and the resignation of Mr. Xie, the board members approving the matters were the members of the Special Committee.

The foregoing discussion of the factors considered by the Telenav Board is not intended to be exhaustive, but rather includes the material factors considered by the Telenav Board. In reaching its decision to approve the Merger Agreement and deem the Merger Agreement and the Merger advisable and in the best interests of Telenav and its stockholders, the Telenav Board did not quantify or assign any relative weights to the factors considered and individual directors may have given different weights to different factors. The Telenav Board based its recommendation on the totality of the information made available to the Telenav Board.

The Special Committee and the Telenav Board determined, on behalf of Telenav, that the Merger is procedurally and substantively fair to Telenav’s unaffiliated security holders after considering the variety of factors described or referenced above under this heading starting on page 48 and the heading “—The Special

 

49


Table of Contents

Committee” starting on page 44. In the course of reaching their respective determinations, the Special Committee and the Telenav Board considered that the consummation of the Merger was originally conditioned, among other things, on approval by a majority of the outstanding shares of Common Stock not beneficially owned by any member of the Purchaser Group and, after the December 17, 2020 amendment to the Merger Agreement, is conditioned, among other things, on the Two-Thirds of the Minority Approval. The Special Committee and the Telenav Board considered that Telenav’s directors and officers, who are deemed under SEC rules to be affiliates of Telenav, are able to vote their shares of Common Stock in support of the approval of the Merger Agreement as part of the Two-Thirds of the Minority Approval condition so long as such directors and officers are not affiliates of V99 (the “Unaffiliated Telenav Directors and Officers”). The Special Committee and the Telenav Board believe that the interests of the Unaffiliated Telenav Directors and Officers are aligned with those of the unaffiliated security holders of Telenav. Following the Merger, the Unaffiliated Telenav Directors and Officers will not retain any equity interest in Telenav. None of the Unaffiliated Telenav Directors and Officers will be a director of Telenav or V99 following the Merger. In addition, as of December 5, 2020, the Unaffiliated Telenav Directors and Officers hold approximately 1.4% of the outstanding shares of Common Stock.

In the course of reaching its decision, the Special Committee and the Telenav Board did not consider the liquidation value of Telenav’s assets because they consider Telenav to be a viable going concern business where value is derived from cash flows generated from its continuing operations. In addition, they believed that the value of Telenav’s assets that might be realized in a liquidation would be significantly less than its going concern value. Further, the Special Committee and the Telenav Board did not consider net book value, which is an accounting concept, as a factor because they believe that net book value is a not a material indicator of the value of Telenav as a going concern but rather is indicative of historical costs and because net book value does not take into account the prospects and opportunities of Telenav, market conditions, trends in Telenav’s industry or the business risks inherent in such industry. Telenav notes, however, that the Merger Consideration of $4.80 per share is higher than the net book value of Telenav per share of $2.16 as of September 30, 2020. The Special Committee and the Telenav Board did not view the purchase prices paid in the transactions described under “Transactions in Common Stock” beginning on page 113 to be relevant except to the extent those prices indicated the trading price of the Common Stock during the applicable periods. The Special Committee and Telenav Board did not seek to determine a pre-merger going concern value for the Common Stock to determine the fairness of the Merger Consideration to Telenav’s unaffiliated stockholders. The Special Committee and Telenav Board believe that the trading price of the Common Stock at any given time represents the best available indicator of Telenav’s going concern value at that time, so long as the trading price at that time is not impacted by speculation regarding the likelihood of a potential transaction. The Special Committee and the Telenav Board were not aware of any offer during the past two years by any person, other than V99, for the merger or consolidation of Telenav with or into another company, the sale or other transfer of all or any substantial part of the assets of Telenav or a purchase of Telenav’s securities that would enable the holder to exercise control of Telenav. There are no material U.S. federal tax consequences to Telenav in connection with the Merger. The Special Committee and the Telenav Board considered the opinion and related financial analyses of B. Riley, among other factors described or referenced above, in the course of its evaluation of the Merger. The Special Committee and the Telenav Board noted that the opinion of B. Riley related to the Merger Consideration to be received by all holders of shares of Common Stock (other than shares of Common Stock beneficially owned by the Purchaser Group). However, the fact that the opinion of B. Riley related to the Merger Consideration to be received by all such stockholders, including unaffiliated security holders and certain affiliated stockholders of Telenav such as certain officers and directors of Telenav, did not affect the determination of the Special Committee and the Telenav Board that the Merger was fair to all Telenav stockholders since all such persons would be entitled to the same $4.80 per share Merger Consideration on the terms set forth in the Merger Agreement.

None of the Special Committee or the Telenav Board, nor a majority of the directors of Telenav who are not employees of Telenav (excluding Mr. Chen) retained an unaffiliated representative to act solely on behalf of the unaffiliated stockholders for purposes of negotiating the terms of the Merger Agreement and the Merger. The Special Committee, the Telenav Board and the directors of Telenav who are not employees of Telenav (excluding Mr. Chen) believe that it was not necessary to retain an unaffiliated representative because the Special

 

50


Table of Contents

Committee was charged with representing the interests of the unaffiliated stockholders and Telenav, the Special Committee consisted solely of directors who are not officers or controlling stockholders of Telenav or members of the Purchaser Group, the Special Committee engaged its own financial and legal advisors to act on its behalf and the Special Committee was actively involved in deliberations and negotiations regarding the Merger on behalf of the unaffiliated stockholders.

The Special Committee and the Telenav Board unanimously (other than Dr. Jin and Mr. Chen) approved the Merger. The Special Committee and the Telenav Board (other than Dr. Jin and Mr. Chen) is each composed of independent directors who are not affiliated with the Purchaser Group or their respective affiliates and who are not employees of Telenav or any of its subsidiaries. Accordingly, the Merger was approved by a majority of the directors of Telenav who are not employees of Telenav.

This summary of the Telenav Special Committee’s and the Telenav Board’s reasons for recommending the adoption of the Merger Agreement and other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors described in the section of this proxy statement captioned “Cautionary Statement Concerning Forward-Looking Statements.” In addition, in considering the recommendation of the Telenav Board with respect to the Merger Agreement, you should be aware that some of Telenav’s directors and executive officers have interests that may be different from, or in addition to, the interests of Telenav stockholders generally. Please see the section captioned “—Interests of Telenav’s Directors and Executive Officers in the Merger.”

Opinion of Financial Advisor to the Telenav Special Committee

On November 2, 2020, B. Riley rendered to the Special Committee its oral opinion (which was subsequently confirmed in writing by delivery of B. Riley’s written opinion dated November 2, 2020), that, as of November 2, 2020, and based upon and subject to the qualifications, limitations, assumptions and other matters considered by B. Riley in connection with the preparation of the opinion, the Merger Consideration to be received by the holders of shares of Common Stock (other than shares of Common Stock beneficially owned by the Purchaser Group) in the Merger pursuant to the Merger Agreement was fair from a financial point of view to such holders.

B. Riley’s opinion was directed to the Special Committee (in its capacity as such) and only addressed the fairness, from a financial point of view, of the Merger Consideration to be received by the holders of shares of Common Stock (other than shares of Common Stock beneficially owned by the Purchaser Group) in the Merger pursuant to the Merger Agreement and did not address any other aspect or implication of the Merger, the Merger Agreement or any other agreement or understanding entered into in connection with the Merger or otherwise. The summary of B. Riley’s opinion in this proxy statement is qualified in its entirety by reference to the full text of its written opinion, which is included as Annex B to this proxy statement and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by B. Riley in preparing its opinion. However, neither B. Riley’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement is intended to be, and they do not constitute, a recommendation to the Special Committee, the Telenav Board, Telenav, any security holder of Telenav or any other person as to how to act or vote on any matter relating to the Merger or otherwise.

In arriving at its opinion, B. Riley, among other things:

 

   

reviewed the financial terms of the draft Merger Agreement circulated to the Special Committee on November 1, 2020;

 

   

reviewed certain publicly available business and financial information related to Telenav;

 

   

reviewed certain other information relating to Telenav concerning its business, financial condition and operations, made available to B. Riley by Telenav, including forecasts with respect to the future financial performance of Telenav prepared and furnished to B. Riley by Telenav management (the “Projections”);

 

51


Table of Contents
   

held discussions with members of senior management of Telenav concerning the Merger and the business, financial condition, and strategic objectives of Telenav;

 

   

reviewed certain publicly available financial data, stock market performance data and trading multiples of companies which B. Riley deemed relevant;

 

   

reviewed the publicly available financial terms of certain other business combinations that B. Riley deemed relevant; and

 

   

performed such other financial studies, analyses and investigations, and considered such other matters, as B. Riley deemed necessary or appropriate for purposes of rendering its opinion.

In preparing its opinion, at the Special Committee’s direction, B. Riley relied, without assuming responsibility or liability for independent verification, upon the accuracy and completeness of all financial and other information available from public sources and all other information provided to B. Riley or otherwise discussed with or reviewed by B. Riley. Telenav management advised B. Riley and, at the Special Committee’s direction, B. Riley assumed that the Projections were reasonably prepared in good faith and represent Telenav management’s best currently available estimates and judgments with respect to the future financial performance of Telenav. B. Riley assumed no responsibility for and expressed no view or opinion as to such Projections or the assumptions on which they were based. At the Special Committee’s direction, B. Riley used and relied upon such Projections for purposes of its analyses and opinion and assumed that such Projections provided a reasonable basis upon which to evaluate Telenav and the proposed Merger. B. Riley also assumed that there were no changes in the assets, financial condition, results of operations, business or prospects of Telenav since the respective dates of the last financial statements and other information, financial or otherwise, made available to B. Riley that would be material to its analyses or opinion, and that there was no information or any facts or developments that would make any of the information reviewed by B. Riley inaccurate, incomplete or misleading.

B. Riley was not asked to, and did not, undertake an independent verification of any information provided to or reviewed by it, nor was B. Riley furnished with any such verification, and B. Riley did not assume any responsibility or liability for the accuracy or completeness of such information. B. Riley did not make an independent evaluation or appraisal of the assets or the liabilities (contingent or otherwise) of Telenav, nor did B. Riley evaluate the solvency of Telenav under any state or federal laws. B. Riley did not undertake any independent analysis of any pending or threatened litigation, possible unasserted claims or other contingent liabilities to which Telenav was may have been a party or was or may have been subject, and its opinion made no assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of any such matters.

B. Riley also assumed, with the Special Committee’s consent, that (i) in the course of obtaining any regulatory or third party consents or approvals in connection with the Merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Telenav or the contemplated benefits of the Merger, (ii) the representations and warranties made by the parties in the Merger Agreement were accurate and complete in all respects material to its analyses and opinion; (iii) each party to the Merger Agreement would perform all of its covenants and obligations thereunder; and (iv) the Merger would be consummated in accordance with the terms of the Merger Agreement, without waiver, modification or amendment of any term, condition or provision thereof material to B. Riley’s analyses or opinion. B. Riley also assumed that the Merger Agreement, when executed by the parties thereto, would conform to the version reviewed by B. Riley in all respects material to its analyses and opinion. B. Riley is not a legal, tax or regulatory advisor, and B. Riley relied upon, without independent verification, the assessments of Telenav and its legal, tax and regulatory advisors with respect to such matters.

B. Riley’s opinion was limited to the fairness, from a financial point of view, to the holders of shares of Common Stock (other than shares of Common Stock beneficially owned by the Purchaser Group) of the Merger

 

52


Table of Contents

Consideration to be received by such holders in the Merger pursuant to the Merger Agreement, and B. Riley expressed no view or opinion as to the fairness of the Merger to the holders of any other class of securities, creditors or other constituencies of Telenav. B. Riley’s opinion did not address any other aspect or implication of the Merger, the Merger Agreement, or any other agreement or understanding entered into in connection with the Merger or otherwise. B. Riley expressed no view or opinion as to the fairness of the amount or nature of the compensation to any of Telenav’s officers, directors or employees, or any class of such persons, relative to the Merger Consideration or otherwise. B. Riley expressed no view or opinion as to the prices or range of prices at which the Common Stock may trade at any time. Furthermore, B. Riley did not express any opinion as to the impact of the Merger on the solvency or viability of Telenav, or the ability of Telenav to pay its obligations when they become due.

B. Riley’s opinion was necessarily based upon economic, market, monetary, regulatory and other conditions as they existed and could be evaluated, and the information made available to it, as of the date of the opinion. Although subsequent developments may affect its opinion, B. Riley does not have any obligation to update, revise or reaffirm its opinion. As the Special Committee was aware, the credit, financial and stock markets were experiencing significant volatility due to, among other things, the COVID-19 pandemic and related illnesses and the direct and indirect business, financial, economic and market implications thereof, and B. Riley expressed no view or opinion as to any potential effects of such volatility on Telenav or the proposed Merger.

B. Riley’s opinion was for the information of the Special Committee (in its capacity as such) in connection with its consideration of the proposed Merger. B. Riley’s opinion does not constitute a recommendation to the Special Committee, the Telenav Board, Telenav, any security holder of Telenav or any other person as to how to act or vote on any matter relating to the Merger or otherwise. B. Riley’s opinion does not address the relative merits of the Merger as compared to alternative transactions or strategies that might be available to Telenav or any other party to the Merger, nor does it address the underlying business decision of the Special Committee, the Telenav Board, Telenav or any other party to effect the Merger.

In preparing its opinion to the Special Committee, B. Riley performed a variety of analyses, including those described below. The summary of B. Riley’s analyses is not a complete description of the analyses underlying B. Riley’s opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial, comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither B. Riley’s opinion nor its underlying analyses is readily susceptible to summary description. B. Riley arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching B. Riley’s overall conclusion with respect to fairness, B. Riley did not make separate or quantifiable judgments regarding individual analyses. Accordingly, B. Riley believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying B. Riley’s analyses and opinion.

In performing its analyses, B. Riley considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. No company, transaction or business used in B. Riley’s analyses for comparative purposes is identical to Telenav or the proposed Merger and an evaluation of the results of those analyses is not entirely mathematical. The estimates contained in the Projections and the implied value reference ranges indicated by B. Riley’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of Telenav. Much of the information used in, and accordingly the results of, B. Riley’s analyses are inherently subject to substantial uncertainty.

 

53


Table of Contents

B. Riley’s opinion was only one of many factors considered by the Special Committee in evaluating the proposed Merger. Neither B. Riley’s opinion nor its analyses were determinative of the Merger Consideration or of the views of the Special Committee, the Telenav Board or management with respect to the Merger or the Merger Consideration. The type and amount of Merger Consideration payable in the Merger were determined through negotiation between Telenav and V99, and the decision to enter into the Merger Agreement was solely that of the Special Committee and the Telenav Board.

Summary of Financial Analyses

The following is a summary of the material financial analyses performed by B. Riley in connection with the preparation of its opinion and reviewed with the Special Committee on November 2, 2020. The order of the analyses does not represent relative importance or weight given to those analyses by B. Riley. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis could create a misleading or incomplete view of B. Riley’s analyses.

For purposes of its analyses, B. Riley reviewed a number of financial metrics, including:

 

   

Enterprise Value—generally, the value as of a specified date of the relevant company’s outstanding equity securities plus the amount of debt outstanding, preferred stock and non-controlling interests, and less the amount of cash and cash equivalents and the carrying value of its equity investments on its balance sheet.

 

   

EBITDA—generally, the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period.

 

   

Adjusted EBITDA—generally, the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period, as adjusted for stock-based compensation and certain non-recurring items.

Unless the context indicates otherwise, enterprise values and equity values used in the selected companies analysis described below were calculated using the closing price of Telenav’s Common Stock and the common stock of the selected companies listed below as of October 30, 2020, and transaction values for the selected transactions analysis described below were calculated on an enterprise value basis based on the value of the equity consideration in the announced transaction and other publicly available information at the time of the announcement. The estimates of the future financial performance of Telenav relied upon for the financial analyses described below were based on the Projections. The estimates of the future financial performance of the selected companies listed below were based on publicly available research analyst estimates for those companies.

Selected Companies Analysis. B. Riley reviewed certain financial data for selected companies with publicly traded equity securities that B. Riley deemed relevant. The selected companies were selected because they were deemed similar to Telenav in one or more respects. The financial data reviewed included enterprise value as a multiple of estimated adjusted EBITDA for the calendar year ending December 31, 2021, or “CY 2021E Adjusted EBITDA.”

 

54


Table of Contents

The selected companies and corresponding multiples were:

 

     Enterprise Value /
CY 2021E Adj. EBITDA
 

Garmin Ltd.

     16.2x  

Trimble Inc.

     18.5x  

Cerence Inc.

     17.9x  

TomTom N.V.

     7.0x  

Ituran Location and Control Ltd.

     4.2x  

CalAmp Corp.

     9.5x  

PowerFleet, Inc.

     9.9x  

MiX Telematics Limited

     6.7x  

Taking into account the results of the selected companies analysis and its experience and professional judgment, B. Riley applied a selected multiple range of 7.0x to 9.0x to Telenav’s estimated fiscal year 2021E Adjusted EBITDA and, taking into account the results of its analysis of the estimated tax savings attributable to Telenav’s net operating losses, or “NOLs,” B. Riley added $0.17 to the resulting implied value reference range per share of Telenav Common Stock. The selected companies analysis indicated an implied value reference range per share of Telenav Common Stock, inclusive of the implied value of Telenav’s NOLs, of $4.13 to $4.47, as compared to the Merger Consideration of $4.80 per share of Telenav Common Stock in the Merger pursuant to the Merger Agreement. After the completion of the Merger, V99 will receive the benefit of the NOLs for fiscal years 2017-2020, but such amounts will be subject to an annual limitation.

Selected Transactions Analysis. B. Riley reviewed certain financial terms of certain transactions involving target companies that B. Riley deemed relevant. The selected transactions were selected because they involved target companies that were deemed similar to Telenav in one or more respects. The financial data reviewed included enterprise value as a multiple of EBITDA for the last twelve months available prior to the date of announcement, or “LTM EBITDA.”

The selected transactions and corresponding multiples were:

 

Date
Announced

   

Acquiror

 

Target

  Enterprise
Value/
LTM
EBITDA
 
  4/2/2019     Lear Corporation   Xevo Inc     NA  
  1/22/2019     Bridgestone Europe NV/SA   TomTom Telematics BV (nka:Webfleet Solutions B.V.)     NA  
  11/1/2018     AMETEK, Inc.   Telular Corporation/Forza Silicon Corporation     NA  
  10/24/2017     Delphi Automotive PLC (nka:Aptiv PLC)   nuTonomy Inc.     NA  
  3/13/2017     Intel Corporation   Mobileye N.V.     NM  
  11/14/2016     Samsung Electronics America, Inc.   Harman International Industries, Incorporated     10.4x  
  8/1/2016     Verizon Communications Inc.   Fleetmatics Group PLC     32.9x  
  12/18/2015     Laird PLC   Novero GmbH     6.9x  
  12/10/2015     CalAmp Corp.   LoJack Corporation     18.4x  
  8/3/2015     Daimler AG; Bayerische Motoren Werke AG; AUDI AG   HERE Holding Corporation     NA  
  7/30/2015     BSM Technologies Inc.   Webtech Wireless Inc.     16.0x  
  5/19/2015     Continental Aktiengesellschaft   Elektrobit Automotive GmbH     26.8x  
  6/16/2014     Vodafone Global Enterprise Limited   Cobra Automotive Technologies SPA (nka:Vodafone Automotive)     10.9x  

 

“NM” refers to data not meaningful.

“NA” refers to not publicly available.

 

55


Table of Contents

Taking into account the results of the selected transactions analysis and its experience and professional judgment, B. Riley applied a selected multiple range of 6.0x to 8.0x to Telenav’s LTM EBITDA for the period ended September 30, 2020 and, taking into account the results of its analysis of the estimated tax savings attributable to Telenav’s NOLs and limitations on use following a change in control, B. Riley added $0.04 to the resulting implied value reference range per share of Telenav Common Stock. The selected transactions analysis indicated an implied value reference range per share of Telenav Common Stock, inclusive of the implied value of Telenav’s NOLs, of $4.60 to $5.20, as compared to the Merger Consideration of $4.80 per share of Telenav Common Stock in the Merger pursuant to the Merger Agreement. After the completion of the Merger, V99 will receive the benefit of the NOLs for fiscal years 2017-2020, but such amounts will be subject to an annual limitation.

Discounted Cash Flow Analysis. B. Riley performed a discounted cash flow analysis of Telenav based on the Projections under two scenarios provided by Telenav management: one that assumed Telenav would secure a next-generation program with one of its automobile manufacturer customers and a second that assumed that Telenav would not secure a next-generation program with one of its automobile manufacturer customers. The Projections for each scenario included Telenav management’s estimates of the impact of Telenav’s NOLs. With respect to the scenario in which Telenav secured a next-generation program with one of its automobile manufactures, B. Riley applied a range of terminal value multiples of 5.5x to 6.5x to Telenav’s estimated fiscal year 2025E Adjusted EBITDA and discount rates ranging from 15.5% to 20.5% taking into account a calculation of Telenav’s weighted average cost of capital. With respect to the scenario in which Telenav did not secure a next-generation program with one of its automobile manufactures, B. Riley applied a range of terminal value multiples of 3.5x to 4.5x to Telenav’s estimated fiscal year 2025E Adjusted EBITDA and discount rates ranging from 15.5% to 20.5%. The discounted cash flow analysis indicated implied value reference ranges per share of Telenav Common Stock of $5.36 to $6.36 based on the scenario in which Telenav secured a next-generation program with one of its automobile manufactures and $4.47 to $5.22 based on the scenario in which Telenav did not secure a next-generation program with one of its automobile manufactures, in each case as compared to the Merger Consideration of $4.80 per share of Telenav Common Stock in the Merger pursuant to the Merger Agreement.

Premiums Paid Analysis. B. Riley performed a premiums paid analysis of Telenav using the stock price premiums paid in transactions involving U.S. public company targets over the last five years prior to October 30, 2020, which resulted in 265 transactions, including 158 small-cap transactions with deal values of less than $500 million. B. Riley calculated the median premiums paid to the target company’s stockholders relative to the target company’s single day closing share price for the date (i) one day prior to the announcement of the transaction, (ii) one week prior to the announcement of the transaction and (iii) one month prior to the announcement of the transaction. The results of these calculations are summarized in the following table:

 

     Median Transaction Premium  
     1 Day Prior     1 Week Prior     1 Month Prior  

All Transactions

     27.2     28.3     25.8

Small Cap Transactions

     31.4     31.1     26.0

Taking into account the results of the premiums paid analysis, B. Riley applied the premiums indicated above for all transactions and the small cap transactions for the date (i) one day prior to the announcement of the transaction, (ii) one week prior to the announcement of the transaction and (iii) one month prior to the announcement of the transaction to the corresponding stock prices of Telenav Common Stock for the date (a) one day prior to the public announcement of V99’s initial proposal to acquire Telenav, (b) one week prior to the public announcement of V99’s initial proposal to acquire Telenav and (c) one month prior to the public announcement of V99’s initial proposal to acquire Telenav. The premiums paid analysis indicated an implied value reference range per share of Telenav Common Stock of $4.58 to $5.83, as compared to the Merger Consideration of $4.80 per share of Telenav Common Stock in the Merger pursuant to the Merger Agreement.

NOL Analysis. For purposes of the selected companies analysis and the selected transactions analysis, B. Riley calculated the implied net present value of the estimated tax savings attributable to Telenav’s NOLs

 

56


Table of Contents

based on Telenav management estimates under two scenarios: one without limitations on the use of such NOLs to achieve future tax savings and a second with limitations arising from a change in control of Telenav on the use of such NOLs to achieve future tax savings. For purposes of this analysis B. Riley applied discount rates ranging from 16.5% to 19.5% taking into account a calculation of Telenav’s weighted average cost of capital. This analysis indicated an implied value reference range of the Telenav NOLs of $0.14 to $0.20 per share of Telenav Common Stock without limitations on the use of such NOLs to achieve future tax savings and an implied reference value of the Telenav NOLs of $0.04 per share of Telenav Common Stock with limitations arising from a change of control on the use of such NOLs to achieve future tax savings. After the completion of the Merger, V99 will receive the benefit of the NOLs for fiscal years 2017-2020, but such amounts will be subject to an annual limitation.

Other Matters. B. Riley acted as financial advisor to the Special Committee of Telenav in connection with the Merger and will receive a fee for such services based on the transaction value of the proposed Merger, which fee is currently estimated to be approximately $2,090,000, of which $200,000 became payable to B. Riley upon its engagement as the financial advisory to the Special Committee, $500,000 became payable to B. Riley upon the delivery of its opinion to the Special Committee and the remainder is payable to B. Riley upon the consummation of the Merger. B. Riley may become entitled to an additional fee in connection with the solicitation of third party indications of interest in acquiring Telenav following the execution of the Merger Agreement. In addition, Telenav has agreed to indemnify B. Riley and certain related parties for certain liabilities arising out of or related to its engagement and to reimburse B. Riley for certain expenses incurred in connection with its engagement. The Special Committee engaged B. Riley based on B. Riley’s knowledge of Telenav and its industry, as well as its extensive experience working with Telenav and its management. B. Riley is regularly engaged to render financial opinions in connection with mergers, acquisitions, divestitures, leveraged buyouts, and for other purposes.

B. Riley is a full service securities firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, B. Riley and its affiliates may acquire, hold or sell, for its and its affiliates own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of Telenav, V99, certain of their affiliates and any other company that may be involved in the transaction. B. Riley and its affiliates in the past provided, and may in the future provide, investment banking and other financial services to Telenav and certain of its affiliates, for which B. Riley and its affiliates have received, or would expect to receive, compensation, including, during the past two years, having provided financial advisory services to Telenav in connection with contemplated acquisition opportunities as well as financing alternatives for which B. Riley and its affiliates may in the future receive compensation. B. Riley and its affiliates may in the future provide investment banking and other financial services to V99 and certain of its affiliates, for which B. Riley and its affiliates would expect to receive compensation. B. Riley has adopted policies and procedures designed to preserve the independence of its research and credit analysts whose views may differ from those of the members of the team of investment banking professionals advising Telenav.

Financial Projections

In the ordinary course of business, Telenav’s management prepared the Fiscal 2021 Plan, as well as the Long Term Financial Model. In October 2020, the Special Committee directed Telenav management to update the Fiscal 2021 Plan and the Long Term Financial Model in order to assist B. Riley in connection with B. Riley’s financial analyses and potential acquirors other than V99 in considering whether or not to make a proposal to acquire Telenav. The Special Committee directed Telenav management to prepare two updates—one that assumed that Telenav would secure a next generation program with one of its automobile manufacturer customers (the “Extension Projections”) and one that assumed that Telenav would not secure a next generation program with such automobile manufacturer customer (the “No Extension Projections”, and together with the Extension Projections, the “Financial Projections”). The Extension Projections and No Extension Projections were each based upon certain financial, operating and commercial assumptions developed solely using the information available to Telenav’s management at the time such projections were developed and prepared. The Special Committee reviewed the Financial Projections and directed B. Riley to use and rely on the Financial

 

57


Table of Contents

Projections to prepare its financial analyses and fairness opinion. For a detailed description of B. Riley’s fairness opinion, see “—Opinion of Financial Advisor to the Telenav Special Committee.”

Telenav’s management does not, as a matter of course, publicly disclose forecasts or internal projections as to future performance due to, among other things, the inherent difficulty of predicting financial performance for future periods and the likelihood that the underlying assumptions and estimates may not be realized. The Financial Projections are included herein because (1) the Financial Projections were made available to V99 in connection with its due diligence review, (2) the Financial Projections were made available to B. Riley by Telenav management and approved by the Special Committee for use in connection with its financial analysis as described in the section of this proxy statement captioned “—Opinion of Financial Advisor to the Telenav Special Committee” and (3) the Financial Projections were made available to the Special Committee in connection with its consideration of the Merger and other strategic alternatives available to Telenav.

The Financial Projections were not prepared with a view toward public disclosure or with a view toward complying with the published guidelines of the SEC regarding projections or accounting principles generally accepted in the United States (“GAAP”), or the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information. In the view of Telenav management, the Financial Projections have been reasonably prepared by Telenav management on bases reflecting the best currently available estimates and judgments of Telenav management of the future financial performance of Telenav and other matters covered thereby. However, the information contained in the Financial Projections is not fact and should not be relied upon as being necessarily indicative of future results.

The Financial Projections were developed by Telenav management without giving effect to the Merger and the other transactions contemplated by the Merger Agreement and, therefore, the Financial Projections do not give effect to the Merger and the other transactions contemplated by the Merger Agreement or any changes to Telenav’s operations or strategy that may be implemented after the consummation of the Merger, including any costs incurred in connection with the Merger and the other transactions contemplated by the Merger Agreement. Furthermore, the management projections do not take into account the effect of any failure of the transactions contemplated by the Merger Agreement to be completed and should not be viewed as accurate or continuing in that context.

The Financial Projections, while presented with numerical specificity, reflect numerous estimates and assumptions made by Telenav management with respect to industry performance, general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to Telenav’s business, all of which are difficult or impossible to predict accurately and many of which are beyond Telenav’s control, including assumptions that (i) customer demand for Telenav’s products and services would continue consistent with recent years, (ii) the competitive environment would not change significantly and (iii) Telenav would continue to invest in the business, particularly in sales and marketing and research and development. Further, the Extension Projections assume that Telenav will secure a next generation program with an automobile manufacturer, while the No Extension Projections assume that Telenav will not secure such program. The Financial Projections reflect subjective judgment in many respects and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. As such, the projections constitute forward-looking information and are subject to many risks and uncertainties that could cause actual results to differ materially from the results forecasted in the Financial Projections, including, but not limited to, Telenav’s performance, industry performance, general business and economic conditions, customer requirements, staffing levels, competition, adverse changes in applicable laws, regulations or rules, and the various risks set forth in Telenav’s reports filed with the SEC. There can be no assurance that the Financial Projections will be realized or that actual results will not be significantly higher or lower than forecast. The Financial Projections cover several years and such information by its nature becomes less reliable with each successive year. In addition, the Financial Projections will be affected by Telenav’s ability to achieve strategic goals, objectives and targets over the applicable periods. The Financial Projections reflect assumptions as to certain business decisions that are subject to change. The Financial Projections cannot, therefore, be considered a

 

58


Table of Contents

guarantee or reliable prediction of future operating results, and this information should not be relied on as such. The inclusion of the Financial Projections should not be regarded as an indication that Telenav, B. Riley, their respective officers, directors, affiliates, advisors, or other representatives or anyone who received this information then considered, or now considers, them a reliable prediction of future events, and this information should not be relied upon as such. The inclusion of the Financial Projections herein should not be deemed an admission or representation by Telenav that Telenav views such Financial Projections as material information; in fact, Telenav views the Financial Projections as nonmaterial because of the inherent risks and uncertainties associated with such long-range forecasts. The inclusion of the Financial Projections in this proxy statement should not be regarded as an indication that the Financial Projections will be necessarily predictive of actual future events. No representation is made by Telenav or any other person regarding the Financial Projections or Telenav’s ultimate performance compared to such information. The Financial Projections should be evaluated, if at all, in conjunction with the historical financial statements and other information about Telenav contained in Telenav’s public filings with the SEC. For more information, please see the section of this proxy statement captioned “Where You Can Find More Information.” In light of the foregoing factors, and the uncertainties inherent in the Financial Projections, stockholders are cautioned not to place undue, if any, reliance on the Financial Projections.

Neither Telenav’s independent auditor nor any other independent accountant has compiled, examined, or performed any procedures with respect to the Financial Projections, nor have they expressed any opinion or any other form of assurance on such information or its achievability.

Operating profit, income before taxes, income from continuing operations, net income, pro-forma net income and adjusted EBITDA contained in the Financial Projections are “non-GAAP financial measures,” which are financial performance measures that are not calculated in accordance with GAAP. Such financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP. Telenav’s or B. Riley’s calculations of these financial measures may differ from others in Telenav’s industry and are not necessarily comparable with information presented under similar captions used by other companies. Financial measures provided to a financial advisor are excluded from the SEC’s definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which may otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure to be presented. Reconciliations of these financial measures were not relied upon by B. Riley for purposes of its financial analyses as described above in the section captioned “—Opinion of Financial Advisor to the Telenav Special Committee” or by the Special Committee or the Telenav Board. Accordingly, a reconciliation of the financial measures included in the Financial Projections is not provided.

In addition, the Financial Projections have not been updated or revised to reflect information or results after the date they were prepared or as of the date of this proxy statement, and, except as required by applicable securities laws, Telenav does not intend to update or otherwise revise the Financial Projections or the specific portions presented to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the underlying assumptions are shown to be in error.

Subject to the foregoing qualifications, the following is a summary of the Financial Projections.

 

59


Table of Contents

Extension Projections

 

     (dollars in millions)                             
     FY21F      FY22F        FY23F        FY24F        FY25F  

Product

   $ 203.7      $ 199.6        $ 170.1        $ 177.8        $ 162.4  

Service

   $ 38.9      $ 61.5        $ 112.7        $ 172.8        $ 235.0  

Total Revenue

   $ 242.6      $ 261.1        $ 282.8        $ 350.6        $ 397.4  

Product

   $ 112.0      $ 111.8        $ 95.3        $ 99.6        $ 90.9  

Service

   $ 23.9      $ 36.8        $ 65.1        $ 98.3        $ 130.4  

Cost of Revenue

   $ 135.9      $ 148.5        $ 160.4        $ 197.9        $ 221.3  

Gross Profit

   $ 106.7      $ 112.6        $ 122.4        $ 152.7        $ 176.1  

R&D

   $ 77.1      $ 76.0        $ 74.8        $ 82.8        $ 85.3  

Sales and Marketing

   $ 8.1      $ 12.0        $ 16.5        $ 21.4        $ 26.1  

G&A

   $ 25.8      $ 24.3        $ 24.5        $ 27.9        $ 30.7  

Restructuring and other costs

   $ —        $ —          $ —          $ —          $ —    

Operating Profit

   $ (4.3    $ 0.3        $ 6.6        $ 20.6        $ 34.0  

Interest Income (expense)

   $ 2.7      $ 3.8        $ 3.6        $ 3.8        $ 3.6  

Income before taxes

   $ (1.6    $ 4.1        $ 10.2        $ 24.5        $ 37.5  

Income tax expense

   $ 0.3      $ 0.3        $ 0.3        $ 0.3        $ 0.3  

Income from continuing operations

   $ (1.9    $ 3.8        $ 9.9        $ 24.2        $ 37.3  

Equity in net (income) of equity method investees

   $ (0.6    $ —          $ —          $ —          $ —    

Discontinued operations, net of tax

   $ —        $ —          $ —          $ —          $ —    

Net Income

   $ (1.3    $ 3.8        $ 9.9        $ 24.2        $ 37.3  

Pro-forma Net Income

   $ 9.0      $ 11.6        $ 16.5        $ 30.7        $ 42.9  

Adjusted EBITDA

   $ 8.7      $ 10.8        $ 16.1        $ 30.7        $ 43.7  

No Extension Projections

 

     (dollars in millions)  
     FY21F      FY22F        FY23F        FY24F        FY25F  

Product

   $ 203.7      $ 198.8        $ 164.9        $ 165.8        $ 152.6  

Service

   $ 38.9      $ 61.5        $ 112.2        $ 170.7        $ 229.7  

Total Revenue

   $ 242.6      $ 260.3        $ 277.2        $ 336.5        $ 382.2  

Product

   $ 112.0      $ 111.3        $ 92.4        $ 92.8        $ 85.4  

Service

   $ 23.9      $ 36.8        $ 64.8        $ 96.9        $ 127.2  

Cost of Revenue

   $ 135.9      $ 148.1        $ 157.1        $ 189.7        $ 212.7  

Gross Profit

   $ 106.7      $ 112.2        $ 120.0        $ 146.8        $ 169.6  

R&D

   $ 77.1      $ 76.0        $ 72.8        $ 79.3        $ 83.3  

Sales and Marketing

   $ 8.1      $ 12.0        $ 16.0        $ 20.9        $ 25.6  

G&A

   $ 25.8      $ 24.3        $ 24.5        $ 27.9        $ 30.7  

Restructuring and other costs

   $ —        $ —          $ —          $ —          $ —    

Operating Profit

   $ (4.3    $ 0.1        $ 6.8        $ 18.7        $ 29.9  

Interest Income (expense)

   $ 2.7      $ 3.8        $ 3.6        $ 3.8        $ 3.4  

Income before taxes

   $ (1.6    $ 3.7        $ 10.4        $ 22.5        $ 33.4  

Income tax expense

   $ 0.3      $ 0.3        $ 0.3        $ 0.3        $ 0.3  

Income from continuing operations

   $ (1.9    $ 3.5        $ 10.1        $ 22.2        $ 33.1  

Equity in net (income) of equity method investees

   $ (0.6    $ —          $ —          $ —          $ —    

Discontinued operations, net of tax

   $ —        $ —          $ —          $ —          $ —    

Net Income

   $ (1.3    $ 3.5        $ 10.1        $ 22.2        $ 33.1  

Pro-forma Net Income

   $ 9.0      $ 11.3        $ 16.4        $ 28.3        $ 38.4  

Adjusted EBITDA

   $ 8.7      $ 10.5        $ 16.0        $ 28.3        $ 39.2  

 

60


Table of Contents

Purposes and Reasons of the Purchaser Group for the Merger

Under the SEC rules governing “going-private” transactions, each member of the Purchaser Group may be deemed to be an affiliate of Telenav and engaged in a “going-private” transaction and, therefore, may be required to express his, her or its purposes and reasons for the Merger to Telenav’s “unaffiliated security holders” as defined under Rule 13e-3 of the Exchange Act. Each member of the Purchaser Group is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. However, the views of each member of the Purchaser Group should not be construed as a recommendation to any Telenav stockholder as to how that stockholder should vote on the Merger Agreement Proposal. Certain members of the Purchaser Group have interests in the Merger that are different from, or in addition to, those of other Telenav stockholders.

If the Merger is completed, Telenav will become a wholly owned subsidiary of V99 and the Common Stock will cease to be publicly traded. For the Purchaser Group, the purpose of the Merger is to enable V99 to acquire 100% ownership and control of Telenav in a transaction in which the holders of Common Stock (other than the Dissenting Shares (as defined below)) will receive the Merger Consideration. In this regard, V99 and Dr. Jin will bear the risks and receive the rewards of such ownership of Telenav after the Merger, including any future earnings and growth of Telenav as a result of improvements to Telenav’s operations, acquisitions of other businesses and the benefits of operating Telenav within V99.

The benefits of the Merger for the Purchaser Group include, but are not limited to the following:

 

   

the Purchaser Group believes the Merger will provide Telenav with greater operational flexibility to pursue alternatives than it would have had as a public company, and management will be able to concentrate on long-term growth, reducing the focus on the quarter-to-quarter performance and the impact thereof on the public equity market’s valuation of the Common Stock; and

 

   

the Purchaser Group believes that, as a privately-held company, Telenav will be relieved of many of the expenses, burdens and constraints imposed on companies that are subject to the public reporting requirements under the federal securities laws of the United States, thereby enabling management and employees of Telenav to devote more time and be able to better execute on Telenav’s future strategic plans.

The Purchaser Group also believes that structuring the transaction as a Merger is preferable to other transaction structures as it enables the holders of shares of Common Stock (other than the Dissenting Shares) to immediately realize the value of their investment in Telenav through their receipt of the Merger Consideration of $4.80 in cash, which represents a premium of approximately 33.3% to $3.60, the closing trading price of the Common Stock on the Last Unaffected Trading Day. In addition, the Purchaser Group believes that structuring the transaction in such a manner is preferable to other alternative transaction structures because it will enable V99 to indirectly acquire all of the outstanding shares of Telenav at the same time in a single step and allow Telenav to cease to be a public reporting company, without the necessity of financing separate purchases of the Common Stock in a tender offer and implementing a second-step merger to acquire any Common Stock not tendered into any such tender offer, and without incurring additional transaction costs associated with such activities.

Accordingly, the Purchaser Group has decided to undertake to pursue the Merger at this time for the reasons described above.

Position of the Purchaser Group as to the Fairness of the Merger

Under the SEC rules governing “going-private” transactions, each member of the Purchaser Group may be deemed to be an affiliate of Telenav and engaged in a “going-private” transaction and, therefore, may be required to express his, her or its beliefs as to the fairness of the Merger to Telenav’s “unaffiliated security holders” as

 

61


Table of Contents

defined under Rule 13e-3 of the Exchange Act. Each member of the Purchaser Group is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. However, the views of each member of the Purchaser Group should not be construed as a recommendation to any Telenav stockholder as to how that stockholder should vote on the Merger Agreement Proposal. Certain members of the Purchaser Group have interests in the Merger that are different from, or in addition to, those of other Telenav stockholders.

Telenav’s unaffiliated stockholders were represented by the Special Committee, which negotiated the terms and conditions of the Merger Agreement on the unaffiliated stockholders’ behalf, with the assistance of the Special Committee’s independent financial and legal advisors. The Special Committee consisted solely of independent and disinterested directors who are not affiliated with any member of the Purchaser Group, are not employees of Telenav or any of its affiliates and have no financial interest in the Merger different from, or in addition to, Telenav’s unaffiliated stockholders (other than their interests described in the section of this proxy statement captioned “—Interests of Telenav’s Directors and Executive Officers in the Merger”). The members of the Purchaser Group did not participate in the deliberations of the Special Committee or the Telenav Board regarding, or receive advice from Telenav’s or the Special Committee’s legal or financial advisors as to, the substantive or procedural fairness of the Merger to Telenav’s unaffiliated stockholders, nor did the Purchaser Group undertake any independent evaluation of the fairness of the Merger to Telenav’s unaffiliated stockholders, or engage a financial advisor for such purposes. See “—Background of the Merger.”

The Purchaser Group believes, based on, among other things, the factors considered by, and the analysis and resulting conclusions of, the Telenav Board and the Special Committee described in the section entitled “—Recommendation of the Telenav Special Committee and the Telenav Board of Directors; Purposes and Reasons for the Merger; Fairness of the Merger,” that the Merger is substantively and procedurally fair to Telenav’s unaffiliated security holders.

In particular, the Purchaser Group considered the following substantive factors, which are not presented in any relative order of importance:

 

   

the Merger Consideration represented (i) an approximate 33.3% premium to $3.60, the closing trading price on the Last Unaffected Trading Day, (ii) an increase of 11.1% over the $4.32 purchase price per share initially offered by V99, and (iii) a 14.3% premium to $4.20, the volume weighted average closing trading prices of the Common Stock on NASDAQ for the thirty (30) days ending on the Last Unaffected Trading Day;

 

   

the Merger Consideration is all cash, which provides a degree of certainty of value and liquidity to Telenav’s unaffiliated stockholders, since such stockholders are able to immediately realize a certain value for all of their shares of Common Stock and such stockholders will no longer be exposed to the various risks and uncertainties related to continued ownership of Common Stock and will have the ability to pursue other investment alternatives;

 

   

in addition to being conditioned on approval by the holders of at least a majority of the outstanding shares of Common Stock, the fact that consummation of the Merger was originally conditioned on approval by the holders of a majority of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition was not waivable, and the fact that, following the December 17, 2020 amendment to the Merger Agreement, consummation of the Merger is conditioned on approval by the holders of 66 and two-thirds percent of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition is not waivable;

 

   

the Merger Agreement allows the Special Committee under certain circumstances to withdraw or modify its recommendation that Telenav stockholders approve the Merger, including in connection with a Superior Proposal, subject to Telenav paying V99 a termination fee of $2.0 million or $3.5 million, as the case may be, depending upon the timing of the Superior Proposal;

 

62


Table of Contents
   

the Special Committee was deliberative in its process to determine whether the Merger was fair and reasonable to, and in the best interests of, Telenav’s unaffiliated stockholders and to analyze, evaluate and negotiate the terms of the Merger;

 

   

no member of the Purchaser Group participated in or had any influence on the deliberative process of, or the conclusions reached by, the Special Committee or the negotiating positions of the Special Committee;

 

   

the authorization of the Special Committee to (i) review and evaluate any potential conflicts arising in connection with the Merger, (ii) review and evaluate the terms and conditions of the Merger on behalf of Telenav and Telenav’s unaffiliated stockholders, (iii) negotiate the terms and conditions of the Merger, (iv) determine whether the Merger is fair and reasonable to Telenav, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to Telenav), and in the best interests of Telenav, and (v) determine whether to recommend that the Telenav Board approve the Merger;

 

   

the Merger and the Merger Agreement were unanimously recommended by the Special Committee for approval by the Telenav Board and the Telenav Board unanimously, among those independent and disinterested directors voting, determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, were in the best interests of Telenav and its stockholders;

 

   

notwithstanding that the Purchaser Group may not rely upon the opinion provided by B. Riley to the Special Committee, the Special Committee received from B. Riley, an opinion, dated November 2, 2020, as to the fairness, from a financial point of view, of the Merger Consideration to be received by the unaffiliated stockholders in the Merger, based upon and subject to the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by B. Riley in preparing its opinion;

 

   

the Merger Agreement requires V99 to pay Telenav a termination fee of $3.5 million, if the Merger Agreement is terminated under certain circumstances;

 

   

V99 has deposited $6 million into its bank account, and agreed to maintain a cash balance of not less than such amount, to enable payment to Telenav of any requisite V99 termination fee;

 

   

Telenav has the ability, under certain circumstances, to specifically enforce the terms of the Merger Agreement and specifically enforce the terms of the Commitment Letter;

 

   

the Merger is not conditioned on any financing being obtained by the Purchaser Parties;

 

   

the fact that, subject to the terms and conditions of the Voting and Support Agreement, the Support Agreement Stockholders agreed to vote all their shares of Common Stock in accordance with a Public Board Recommendation to Telenav stockholders, including with respect to a Superior Proposal, if such proposal is made by an Excluded Party and the Special Committee changes its recommendation within 14 days after the expiration of the “go shop” period; and

 

   

the availability of appraisal rights under Delaware law to Telenav stockholders who do not vote in favor of the adoption of the Merger Agreement and comply with all the required procedures under Delaware law, which provides those eligible stockholders with an opportunity to have the Delaware Court of Chancery determine the fair value of their shares, which may be more than, less than, or the same as the amount such stockholders would have received under the Merger Agreement.

In addition, the Purchaser Group considered the following procedural factors, which are not presented in any relative order of importance:

 

   

the Telenav Board established a Special Committee of independent and disinterested directors who are not affiliated with the Purchaser Group, to consider V99’s proposal and to negotiate with V99;

 

   

the Telenav Board and Telenav were advised by experienced and qualified legal counsel, consisting of WSGR;

 

63


Table of Contents
   

the Special Committee retained and was advised by experienced and qualified advisors, consisting of WSGR, as legal counsel, and B. Riley, as financial advisor;

 

   

the V99 board and V99 were advised by experienced and qualified legal counsel, consisting of Norton Rose;

 

   

the Merger Consideration resulted from active negotiations between the Special Committee and V99 and their respective advisors;

 

   

the Merger Agreement and the transactions contemplated thereby, including the Merger, were negotiated by the Special Committee, V99 and other relevant parties;

 

   

in addition to the approval by the holders of at least a majority of the outstanding shares of Common Stock, the fact that consummation of the Merger was originally conditioned on approval by the holders of a majority of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition was not waivable, and the fact that, following the December 17, 2020 amendment to the Merger Agreement, consummation of the Merger is conditioned on approval by the holders of 66 and two-thirds percent of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition is not waivable;

 

   

the “going private” proposal from V99 was conditioned on the approval of the Special Committee and included a nonwaivable condition requiring the approval of the proposal by a majority of the disinterested stockholders; and

 

   

the Merger and the Merger Agreement were unanimously recommended by the Special Committee for approval by the Telenav Board, and the Telenav Board unanimously, among those independent and disinterested directors voting, determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, were in the best interests of Telenav and its stockholders.

In the course of reaching their determination as to the fairness of the Merger to Telenav’s unaffiliated stockholders, the Purchaser Group also considered a variety of risks and other countervailing factors related to the Merger Agreement and Merger, including the following:

 

   

the fact that Telenav stockholders unaffiliated with V99 will have no ongoing equity participation in Telenav following the Merger and that those unaffiliated stockholders (i) will cease to participate in Telenav’s future earnings or growth, if any, (ii) will not benefit from increases, if any, in the value of the Common Stock, and (iii) will not benefit from any potential sale to a third party in the future;

 

   

the risk that the Merger might not be completed in a timely manner or that the Merger might not be consummated at all as a result of a failure to satisfy the conditions contained in the Merger Agreement, and the fact that a failure to complete the Merger could negatively affect the trading price of the Common Stock or could result in significant costs and disruption to Telenav’s normal business;

 

   

the restrictions on the conduct of Telenav’s business prior to the completion of the proposed Merger, which may delay or prevent Telenav from undertaking business opportunities that may arise and certain other actions it might otherwise take with respect to the operations of Telenav’s pending completion of the proposed Merger;

 

   

the fact that consummation of the Merger was originally conditioned on approval by the holders of a majority of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition was not waivable, and the fact that, following the December 17, 2020 amendment to the Merger Agreement, consummation of the Merger is conditioned on approval by the holders of 66 and two-thirds percent of the shares of Common Stock not beneficially owned by any member of the Purchaser Group, which condition is not waivable and which reduces the certainty that the Merger will be completed;

 

   

the fact that litigation may occur in connection with the Merger and any such litigation may result in significant costs and a diversion of management focus;

 

64


Table of Contents
   

the risk, if the Merger is not consummated, that the pendency of the Merger could affect adversely the relationship of Telenav and its subsidiaries with their respective customers, employees, suppliers, agents and others with whom they have business dealings;

 

   

the fact that the Merger Agreement provides that, after the end of the “go-shop” period, Telenav is restricted from actively soliciting alternative Acquisition Proposals from third parties other than certain Excluded Parties who make certain proposals prior to the end of such period;

 

   

the fact that Telenav has incurred and will continue to incur significant transaction costs and expenses in connection with the potential transaction, regardless of whether the Merger is consummated;

 

   

the risk related to amounts that may be payable by Telenav upon the termination of the Merger Agreement, including a termination fee of $2.0 million or $3.5 million, depending on the basis for termination, and the processes required to terminate the Merger; and

 

   

the fact that the receipt of the Merger Consideration in exchange for Common Stock pursuant to the Merger generally will be taxable to U.S. holders (as defined below in “—Material U.S. Federal Income Tax Consequences of the Merger”) of Common Stock.

The Purchaser Group did not conduct a going-concern valuation of the Common Stock for the purposes of determining the fairness of the Merger Consideration, including the Merger Consideration to Telenav’s unaffiliated stockholders, because the Purchaser Group believes that the trading price of Common Stock at any given time represents the best available indicator of Telenav’s going-concern value at that time, so long as the trading price at that time is not impacted by speculation regarding the likelihood of a potential transaction.

In addition, the Purchaser Group did not consider net book value, which is an accounting concept, for purposes of determining the fairness of the Merger Consideration to Telenav’s unaffiliated stockholders because, in the Purchaser Group’s view, net book value is neither indicative of Telenav’s market value nor its value as a going concern, but rather is an indicator of historical costs.

Moreover, the Purchaser Group did not consider liquidation value in determining the fairness of the Merger Consideration, including the fairness of the Merger Consideration to Telenav’s unaffiliated stockholders, because (i) of their belief that liquidation sales generally result in proceeds substantially less than the sales of a going concern, (ii) of the impracticability of determining a liquidation value given the significant execution risk involved in any breakup, (iii) they considered Telenav to be a viable going concern, and (iv) Telenav’s business is expected to continue to be operated following the Merger.

In making their determination as to the substantive fairness of the Merger to Telenav stockholders unaffiliated with V99, while the Purchaser Group considered the trading history of the Common Stock and noted that at various times, this trading history reflected prices above the $4.80 to be paid for each share of Common Stock held by Telenav stockholders (other than the Dissenting Shares) as part of the Merger Consideration, the Purchaser Group concluded that was not relevant to determining present value. In the Purchaser Group’s judgment, the historical trading prices for the Common Stock are not indicative of the value of the Common Stock as of the date of the proposed Merger in light of Telenav’s current business operations and future prospects.

In making their determination as to the substantive fairness of the Merger to Telenav’s unaffiliated stockholders, the Purchaser Group was not aware of any firm offers by any person for (i) the merger or consolidation of Telenav with another company, (ii) the sale or transfer of all or any substantial part of Telenav’s assets, or (iii) a purchase of Telenav’s securities that would enable the holder to exercise control of Telenav.

As discussed above, the Purchaser Group determined that the Merger is procedurally and substantively fair to the unaffiliated security holders. In the course of reaching this determination, the Purchaser Group considered that the consummation of the Merger is conditioned, among other things, on the Two-Thirds of the Minority Approval condition.

 

65


Table of Contents

The foregoing discussion of the information and factors considered and given weight by the Purchaser Group in connection with the fairness of the Merger is not intended to be exhaustive but includes all material factors considered by the Purchaser Group. The Purchaser Group did not find it practicable to, and did not, quantify or otherwise assign relative weights to the individual factors considered in reaching their conclusions as to the fairness of the Merger. Rather, the fairness determinations were made after consideration of all of the foregoing factors as a whole.

Sources and Amounts of Funds or Other Consideration; Expenses

V99 estimates that the aggregate amount of cash required to consummate the Merger will consist of the approximately $254.6 million required to pay the Merger Consideration and to make all payments in respect of Telenav Options and Telenav RSUs (each as defined under “—Interests of Telenav’s Directors and Executive Officers in the Merger”), plus all related fees and expenses. V99 anticipates that substantially all the funds needed by it to complete the Merger will be derived from debt financing under the Commitment Letter described below.

In connection with the financing of the Merger, V99 entered into the Commitment Letter with the Financing Sources, for an aggregate debt commitment equal to the sum of (i) the entire Merger Consideration, (ii) all fees and expenses associated with the transaction incurred by the Purchaser Parties or any of their respective affiliates and required to be paid on the closing date by such party, and (iii) all amounts necessary to repay or prepay indebtedness required under the Merger Agreement to be repaid or prepaid on the closing date. Telenav cannot assure you that the amount committed under the Commitment Letter will be sufficient to consummate the Merger. Those amounts might be insufficient if, among other things, one or more of the parties to the Commitment Letter fails to fund the committed amounts in breach of such letter or if the conditions to such commitment are not met. Although obtaining the proceeds of any financing, including the financing under the Commitment Letter, is not a condition to the consummation of the Merger, the failure of V99 and Merger Sub to obtain any portion of the debt financing (or any alternative financing) is likely to result in the failure of the Merger to be completed. In that case, V99 may be obligated to pay Telenav a termination fee of $3.5 million, as described in the section of this proxy statement captioned “The Merger Agreement—Termination Fees and Expenses.”

The estimated fees and expenses incurred or expected to be incurred by Telenav, V99 and Merger Sub in connection with the Merger are as follows:

 

Item     Amount  
     (in thousands)  

Financial advisory fees and expenses

   $ 1,487.6  

Legal, accounting and other professional fees

     2,500.0  

Filing fees

     158.1  

Proxy solicitation, printing and mailing costs

   $ 35.4  

Miscellaneous

     30.0  

Total

   $ 4,211.1  

The estimate for legal fees set forth in the table above does not include any amounts attributable to any existing or future litigation challenging the Merger. All fees and expenses incurred in connection with the Merger Agreement, the Merger and the other transactions contemplated under the Merger Agreement will be paid by the party incurring such fees or expenses, whether the Merger is consummated.

Pursuant to the Commitment Letter, V99, Merger Sub and the Financing Sources are contemplating to enter into a credit agreement pursuant to which the debt funding sources will provide a term loan to Telenav. Although the terms of the loan are still being negotiated at this time, Telenav has been advised by V99 that the loan is expected to bear an interest rate equal to the sum of the Internal Revenue Service’s current “applicable federal

 

66


Table of Contents

rate” plus 1% per annum and to require a balloon payment equal to the total principal amount and all interest accrued thereon upon the maturity date, which is expected to be the fifth anniversary of the closing date of the loan. Telenav has been advised by V99 that the loan is intended to be unsecured. As currently contemplated, Telenav has been advised by V99 that V99 does not have any plans or arrangement to finance or repay the loan other than out of the revenues generated from business operations of Telenav or V99.

Plans for Telenav After the Merger

Following the consummation of the Merger, V99 will own 100% of the Equity Interests (as defined below) of Telenav. The Purchaser Parties and Dr. Jin anticipate that Telenav’s operations will continue to be conducted substantially as they currently are being conducted.

Following the completion of the Merger, Telenav will no longer be subject to the Exchange Act and the NASDAQ listing rules and the related direct and indirect costs and expenses, and may experience positive effects on profitability as a result of the elimination of such costs and expenses.

Immediately following the Merger, the director of Merger Sub will be the sole director of the Surviving Corporation. The Purchaser Parties and Dr. Jin intend that, upon consummation of the Merger, the officers of Telenav will remain officers of the Surviving Corporation.

As of the date of this proxy statement, other than the Merger, the Purchaser Parties and Dr. Jin have no current plans, proposals or negotiations which would relate to or result in an extraordinary transaction involving Telenav’s business or management, such as a merger, reorganization, liquidation, relocation of any operations, or sale or transfer of a material amount of assets, or any other material changes to its business or the composition of its management. Following the Merger, the Purchaser Parties and Dr. Jin plan to evaluate and review Telenav’s business and operations, its assets, capital structure, capitalization, properties and personnel to determine what changes, if any, would be desirable following the Merger to enhance the business and operations of Telenav and may cause Telenav to engage in the types of extraordinary transactions set forth above if the management or board of directors decides that such transactions are in the best interest of Telenav upon such review.

Certain Effects of the Merger

If the Merger Agreement Proposal receives the required approvals of the stockholders described elsewhere in this proxy statement and the other conditions to the closing of the Merger are either satisfied or waived, Merger Sub will be merged with and into Telenav upon the terms set forth in the Merger Agreement. As the Surviving Corporation in the Merger, Telenav will continue to exist following the Merger as a wholly owned subsidiary of V99.

Telenav’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and Amended and Restated Bylaws (“Bylaws”) will be the certificate of incorporation and bylaws of the Surviving Corporation following the Merger until thereafter amended in accordance with their respective terms and the DGCL.

Following the Merger, all of Telenav’s Common Stock will be beneficially owned by V99 and none of the holders of the Common Stock will, by virtue of the Merger, have any direct ownership interest in, or be a stockholder of, Telenav, the Surviving Corporation or V99 after the consummation of the Merger (other than Dr. Jin’s equity ownership in V99). As a result, the holders of the Common Stock will no longer benefit from any increase in the value, nor will they bear the risk of any decrease in the value, of Common Stock. Following the Merger, V99 (and Dr. Jin through his equity ownership in V99) will benefit from any increase in Telenav’s value and also will bear the risk of any decrease in Telenav’s value.

Upon consummation of the Merger, each share of Common Stock issued and outstanding immediately prior to the Effective Time of the Merger (other than shares held in the treasury of Telenav and Dissenting Shares) will

 

67


Table of Contents

be converted into the right to receive the Merger Consideration and all shares of Common Stock so converted will, at the Effective Time, be cancelled. Please see the section of this proxy statement captioned “The Merger Agreement—Consideration to be Received in the Merger.”

For information regarding the effects of the Merger on Telenav’s outstanding equity awards and the employee stock purchase plan, please see the sections of this proxy statement captioned “The Merger Agreement—Treatment of Options,” “The Merger Agreement—Treatment of RSUs,” “The Merger Agreement—Treatment of the ESPP” and “—Interests of Telenav’s Directors and Executive Officers in the Merger.”

The Common Stock is currently registered under the Exchange Act and trades on the NASDAQ under the symbol “TNAV.” Following the consummation of the Merger, shares of Common Stock will no longer be traded on the NASDAQ or any other public market. In addition, the registration of the Common Stock under the Exchange Act will be terminated and Telenav will no longer be required to file periodic and other reports with the SEC with respect to the Common Stock or otherwise. Termination of registration of the Common Stock under the Exchange Act will reduce the information required to be furnished by Telenav to its stockholders and the SEC, and would make provisions of the Exchange Act, such as the requirement to file annual and quarterly reports pursuant to Section 13(a) or 15(d) of the Exchange Act, the short-swing trading provisions of Section 16(b) of the Exchange Act and the requirement to furnish a proxy statement in connection with stockholders’ meetings pursuant to Section 14(a) of the Exchange Act, no longer applicable to Telenav. The Company has made preliminary estimates of certain structural and recurring costs it currently incurs and which it potentially could avoid in the future were it no longer a publicly listed company subject to associated governance, reporting and disclosure requirements. Based on these current preliminary estimates, the Company projects that such savings for annual recurring fees could be between $3,350,000 and $3,650,000 for the Company’s fiscal year beginning July 1, 2021. V99 will become the beneficiary of the cost savings achieved by Telenav no longer remaining a company subject to the reporting requirements under the federal securities laws.

Net Book Value and Net Earnings

Following consummation of the Merger, V99 will own 100% of the interest in Telenav’s net book value and net earnings and Dr. Jin will own 100% of the outstanding common stock of V99. The table below sets forth the direct and indirect interests in Telenav’s net book value and net earnings and in Merger Sub immediately before the Merger and immediately after the Merger based on the net book value at September 30, 2020 and June 30, 2020, and net income attributable to stockholders for the three months ended September 30, 2020 and the fiscal year ended June 30, 2020.

 

    Prior to the Merger
(in thousands, except percentages)
    After the Merger
(in thousands, except percentages)
 
    % Interest
at
September 30,
2020 (1)
    Net book
value at
September 30,
2020
    Net
book
value at
June 30,
2020
    Net
income
(loss) for
the three
months
ended
September 30,
2020
    Net
income
(loss)
for the
fiscal
year
ended
June 30,
2020
    % Interest
at
September 30,
2020
    Net book
value at
September 30,
2020
    Net
book
value at
June 30,
2020
    Net
income
(loss) for
the three
months
ended
September 30,
2020
    Net
income
(loss) for
the fiscal
year
ended
June 30,
2020
 

V99(2)

    —     $ —       $ —       $ —       $ —         100   $ 102,489     $ 96,970     $ 3,335     $ (930

Dr. Jin(3)

    5.0   $ 5,124     $ 4,848     $ 167     $ (47     100   $ 102,489     $ 96,970     $ 3,335     $ (930

Dr. Chen(4)

    15.4   $ 15,783     $ 14,933     $  514     $ (143     —     $ —       $ —       $ —       $ —    

Merger Sub(5)

    —     $ —       $ —       $ —       $ —         N/A       N/A       N/A       N/A       N/A  

 

(1)

Percentage interest expresses percentage interest in net book value and net earnings.

(2)

Reflects shares of Common Stock beneficially owned by V99.

(3)

Reflects shares of Common Stock beneficially owned directly or indirectly by Dr. Jin.

(4)

Reflects shares of Common Stock beneficially owned directly or indirectly by Dr. Chen.

(5)

Merger Sub’s separate corporate existence will cease as a result of the Merger.

 

68


Table of Contents

A primary benefit of the Merger to Telenav stockholders (other than any member of the Purchaser Group) will be the right of such stockholders to receive the Merger Consideration as described above: the Merger Consideration of $4.80 per share of Common Stock, which represents a premium of approximately 33.3% premium to the closing trading price on September 30, 2020, the Last Unaffected Trading Day.

The primary detriments of the Merger to such stockholders include the lack of interest of such stockholders in Telenav’s potential future earnings, growth or value. Additionally, the receipt of cash in exchange for the Common Stock pursuant to the Merger will generally be a taxable sale transaction for U.S. federal income tax purposes to Telenav’s stockholders who surrender shares of Common Stock in the Merger.

Effects on Telenav if the Merger is Not Completed

In the event that the Merger Agreement Proposal does not receive the required approvals of the stockholders described elsewhere in this proxy statement, or if the Merger is not completed for any other reason, Telenav stockholders will not receive any payment for their shares of Common Stock in connection with the Merger. Instead, Telenav will remain an independent public company, the Common Stock will continue to be listed and traded on the NASDAQ, the Common Stock will continue to be registered under the Exchange Act and Telenav stockholders will continue to own their shares of the Common Stock and will continue to be subject to the same general risks and opportunities as they currently are with respect to ownership of the Common Stock.

If the Merger is not completed, there can be no assurances as to the effect of these risks and opportunities on the future value of your shares of Common Stock, including the risk that the market price of the Common Stock may decline to the extent that the current market price of the Common Stock reflects a market assumption that the Merger will be completed. If the Merger is not completed, there can be no assurances that any other transaction acceptable to Telenav will be offered or that the business, operations, financial condition, earnings or prospects of Telenav will not be adversely impacted. Pursuant to the Merger Agreement, under certain circumstances Telenav is permitted to terminate the Merger Agreement in order to enter into an alternative transaction. Please see the section of this proxy statement captioned “The Merger Agreement—Termination of the Merger Agreement.”

Under certain circumstances, if the Merger is not completed, Telenav may be obligated to pay to V99 a termination fee. Please see the section of this proxy statement captioned “The Merger Agreement—Termination Fees and Expenses.”

Interests of Telenav’s Directors and Executive Officers in the Merger

Certain of Telenav’s directors and executive officers have interests in the Merger that are in addition to, or different from, the interests of other stockholders. The Special Committee and the Telenav Board were each aware of these interests and considered them, among other matters, in evaluating and approving the Merger Agreement and the Merger, and in recommending the approval of the Merger Agreement Proposal, the Adjournment Proposal and the Executive Compensation Proposal to Telenav stockholders. These interests are described in further detail below. For purposes of the agreements and plans described below, to the extent applicable, the completion of the Merger will constitute a change in control.

Dr. Jin, Telenav’s President and Chief Executive Officer and Chair of the Telenav Board, owns stock in V99. In addition, Mr. Chen, a member of the Telenav Board, is a member of the Purchaser Group.

Certain of Telenav’s directors and executive officers hold Telenav Options and Telenav RSUs. See the section of this proxy statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

Treatment of Options

In connection with the completion of the Merger and subject to the terms of the Merger Agreement, each Telenav Option that is outstanding and unexercised as of immediately prior to the Effective Time will

 

69


Table of Contents

immediately vest and be cancelled and converted into the right to receive, at the Effective Time, an amount in cash, without interest, equal to the product of (i) the excess, if any, of the Merger Consideration over the per share exercise price of such Telenav Option and (ii) the total number of shares of Common Stock subject to such option as of immediately prior to the Effective Time, less any taxes required to be withheld; provided, however, that any Telenav Option for which its per share exercise price is greater than the Merger Consideration (“Underwater Options”) will be cancelled and terminated at the Effective Time for no consideration.

As of December 5, 2020, there were outstanding Telenav Options to purchase an aggregate of 1,582,374 shares of Common Stock, of which Telenav Options to purchase an aggregate of 400,666 shares of Common Stock were held by Telenav’s current executive officers and of which Telenav Options to purchase an aggregate of 74,162 shares of Common Stock were held by Telenav’s current nonemployee directors and Karen Francis, whose service as a director terminated in November 2019 but who remains an advisor to Telenav as of such date. As of the same date, Philipp Kandal, Telenav’s former Vice President, Engineering, whose employment with Telenav terminated effective October 4, 2019, did not hold any Telenav Options. All Telenav Options outstanding as of December 5, 2020, including any held by Telenav’s executive officers and directors and Ms. Francis, were Underwater Options.

Treatment of RSUs

In connection with the completion of the Merger and subject to the terms of the Merger Agreement, each Telenav RSU (including without limitation those granted subject to any performance-based vesting requirements) will be treated as follows:

 

   

Telenav RSUs that are outstanding and vested as of immediately prior to the Effective Time but for which the shares of Common Stock issuable with respect thereto have not yet been delivered immediately prior to the Effective Time (and after giving effect to any acceleration provided under the terms of the Telenav equity plans, the applicable RSU award agreement and any other written agreement between the holder of such Telenav RSU and Telenav or any of its subsidiaries governing any vesting terms of such Telenav RSU) will be cancelled and converted into the right to receive, at the Effective Time, an amount in cash, without interest, equal to the Merger Consideration for each share of Common Stock otherwise deliverable in settlement of such vested Telenav RSU, less any taxes required to be withheld.

 

   

Telenav RSUs that are unvested, outstanding and unsettled immediately prior to the Effective Time (and after giving effect to any acceleration provided under the terms of the Telenav equity plans, the applicable RSU award agreement and any other written agreement between the holder of such Telenav RSU and Telenav or any of its subsidiaries governing any vesting terms of such Telenav RSU) will be cancelled and converted into the unfunded, unsecured right to receive an amount in cash, without interest, equal to the Merger Consideration (less any taxes required to be withheld), subject to the holder’s satisfaction of any time-based vesting terms (including any accelerated vesting in connection with a termination of service) that applied to the corresponding Telenav RSU immediately prior to the Effective Time; provided, however, that V99 may enter into agreements after December 2, 2020, with up to twelve individuals holding such unvested Telenav RSUs providing for different treatment of such unvested Telenav RSUs.

As of December 5, 2020, there were outstanding Telenav RSUs covering an aggregate of 4,356,710 shares of Common Stock, of which Telenav’s executive officers held Telenav RSUs covering an aggregate of 2,290,426 shares of Common Stock, including Telenav RSUs that are subject to the achievement of performance-based goals in addition to any service-based vesting requirements (“Telenav PRSUs”) covering an aggregate of 1,495,000 shares of Common Stock (at target, which also is equal to the maximum number of shares eligible to vest under the Telenav PRSUs). All outstanding Telenav PRSUs are held by Telenav’s executive officers. As of the same date, Mr. Kandal did not hold any outstanding Telenav RSUs. As of December 5, 2020, none of Telenav’s current nonemployee directors held any outstanding Telenav RSUs, and Ms. Francis held Telenav RSUs covering an aggregate of 21,331 shares of Common Stock, none of which constitute Telenav PRSUs.

 

70


Table of Contents

Additional Terms of Telenav PRSUs

Telenav granted certain Telenav PRSUs to Dr. Jin in October 2018 and to each of Messrs. Dhanani and Wahla in September 2019 under Telenav’s 2009 Equity Incentive Plan (the “2009 Plan”) and applicable award agreements under such plan. Each such Telenav PRSU award agreement between such executive officer and Telenav provides for certain performance goals relating to Telenav’s stock price to be achieved generally over a three-year performance period starting on the date of grant, in order for the Telenav PRSUs to become eligible to vest, subject additionally to certain time-based vesting requirements. Each such Telenav PRSU award agreement also provides that, if a change in control (as defined in the 2009 Plan and which the Merger will constitute) occurs during the performance period, then the performance period will be shortened, and Telenav will measure the final performance with respect to the Telenav PRSUs prior to the change in control based on the per-share consideration Telenav stockholders would receive in connection with the change in control. If no portion of such award of Telenav PRSUs has become eligible to vest based on actual performance achievement with respect to the shortened performance period, then 20% of the target number of shares subject to the Telenav PRSUs will become eligible to vest, and will be scheduled to vest on the one-year anniversary of the change in control, subject to continued service through the applicable vesting date. Any remaining shares subject to such Telenav PRSUs that have not become eligible to vest upon the final performance measurement will be forfeited. Any portion of such Telenav PRSUs that has become eligible to vest is subject to any vesting acceleration applicable to time-based Telenav RSUs as may be specified in the executive officer’s change in control and severance agreement, as described further below.

Telenav granted certain Telenav PRSUs to each of Messrs. Dhanani and Wahla in February 2020 and to each of Dr. Jin and Messrs. Dhanani, Manzoor, Wahla and Debenham in September 2020 under Telenav’s 2019 Equity Incentive Plan (the “2019 Plan”) and applicable award agreements under such plan. Each such Telenav PRSU award agreement between the applicable executive officer and Telenav provides for certain performance goals relating to Telenav’s stock price to be achieved over a specified performance period, in order for the Telenav PRSUs to become eligible to vest, subject additionally to certain time-based vesting requirements. If the Telenav Board approves entering into a transaction that if consummated would constitute a change in control (as defined in the 2019 Plan and which the Merger will constitute), these Telenav PRSUs require achievement of adjusted performance goals relating to higher Telenav stock prices than were applicable prior to the occurrence of such approval, over a five-year performance period. Each such Telenav PRSU award agreement also provides that if a change in control occurs during the performance period and at least 50% of the total consideration paid by the acquirer to Telenav stockholders is in the form of cash, then the performance period will be shortened, and Telenav will measure the final performance with respect to the Telenav PRSUs prior to the change in control based on the per-share consideration Telenav stockholders would receive in connection with the change in control. For purposes of these Telenav PRSUs, the Merger constitutes a change in control of Telenav pursuant to which at least 50% of the total consideration to be paid by the acquirer to Telenav stockholders is in the form of cash. Any shares of Common Stock subject to such Telenav PRSUs that have not become eligible to vest based on actual achievement of the performance goals upon the final performance measurement will be forfeited. Any portion of such Telenav PRSUs that has become eligible to vest will be scheduled to vest in equal, quarterly installments on March 10, June 10, September 10, and December 10 following the date of the final performance measurement, subject to continued service through the applicable vesting date and any vesting acceleration applicable to time-based RSUs as may be specified in the executive officer’s change in control and severance agreement, as described further below.

Additional Terms of Director Equity Awards

Each of the 2009 Plan and 2019 Plan provides that, with respect to any equity awards covering shares of Common Stock granted to a nonemployee director that are assumed or substituted for in a change in control (as defined in the applicable plan), if on the date of or after such assumption or substitution the individual’s status as a director of Telenav or its successor, as applicable, is terminated other than upon a voluntary resignation by him or her (unless such resignation is at the request of the acquirer), then such individual will fully vest in all of such equity awards covering shares of Common Stock held by him or her (and have the right to exercise any such

 

71


Table of Contents

awards that are options or stock appreciation rights), with any performance goals or other vesting criteria, if applicable, deemed achieved at one hundred percent (100%) of target levels, unless, in the case of any such awards granted under the 2019 Plan, specifically provided otherwise under the applicable award agreement or other written agreement between the individual and Telenav (or any of its parents or subsidiaries, as applicable) governing such award. As of December 5, 2020, none of Telenav’s current nonemployee directors held any outstanding Telenav RSUs, and all Telenav Options held by Telenav’s current nonemployee directors were fully vested and Underwater Options.

Treatment of the ESPP

The ESPP will be terminated as of the Effective Time of the Merger. Telenav will take all actions that may be necessary to provide that (i) no new offering period or purchase period will commence under the ESPP following the date of the Merger Agreement, (ii) participants in the ESPP as of the date of the Merger Agreement may not increase their payroll deductions under the ESPP from those in effect on the date of the Merger Agreement, and (iii) no new participants may commence participation in the ESPP following the date of the Merger Agreement.

Telenav will take such action as may be necessary prior to the closing to (i) cause any offering period or purchase period in progress under the ESPP as of the date of the Merger Agreement to be the final such period under the ESPP and to be terminated no later than three (3) business days prior to the Final Exercise Date, (ii) make any pro-rata adjustments that may be necessary to reflect the shortened offering or purchase period, but otherwise treat such shortened offering or purchase period as a fully effective and completed offering or purchase period for all purposes under the ESPP, (iii) cause each participant’s then-outstanding ESPP Rights to be exercised as of the Final Exercise Date, and (iv) terminate the ESPP as of the Effective Time. On the Final Exercise Date, the funds credited by participants in the ESPP as of such date under the ESPP will be used to purchase shares of Common Stock in accordance with the terms of the ESPP, and each such share purchased under the ESPP will be cancelled as of the Effective Time and converted into the right to receive the Merger Consideration, less any taxes required to be withheld. Any accumulated contributions of a participant in the ESPP and not used to purchase shares of Common Stock will be refunded to such participant as promptly as practicable following the Final Exercise Date, without interest. Of Telenav’s executive officers, Messrs. Dhanani, Wahla and Debenham currently participate in the ESPP. Mr. Kandal (who no longer is a Telenav employee), Ms. Francis and Telenav’s nonemployee directors are not eligible to participate in the ESPP.

Equity Interests of Telenav’s Executive Officers and Nonemployee Directors

The following table sets forth for each person who has been a Telenav executive officer or member of the Telenav Board at any time since the beginning of Telenav’s fiscal year ended June 30, 2020, (i) the number and value of shares of Common Stock held directly, (ii) the number of shares of Common Stock subject to and value of Telenav RSUs other than Telenav PRSUs, and (iii) the number of shares of Common Stock subject to and value of Telenav PRSUs (at target, which also is the maximum), assuming the following and such additional assumptions set forth in the footnotes to the table:

 

   

the Telenav RSUs and Telenav PRSUs include such awards that would be outstanding as of January 22, 2021 (which solely for purposes of this proxy statement, is the assumed closing date of the Merger), prior to the Effective Time, in accordance with their regular vesting schedules and assuming continued service by each holder of any such awards through such date;

 

   

the values of the shares of Common Stock and equity awards held by the individuals are based on the Merger Consideration of $4.80; and

 

   

Telenav grants no additional Telenav Options, Telenav RSUs, Telenav PRSUs, or other Telenav equity awards to any such individual on or before such date.

None of the individuals set forth in the table below holds any Telenav Options with a per share exercise price that is less than the Merger Consideration.

 

72


Table of Contents

Equity Interests of Telenav’s Executive Officers and Nonemployee Directors

 

Name    Number of
Shares of
Common
Stock Held
Directly
(#)(1)
     Value of
Shares of
Common
Stock Held
Directly
($)(2)
     Number of
Shares of
Common
Stock
Subject to
Telenav
RSUs
Excluding
Telenav
PRSUs
(#)(3)
     Value of
Shares of
Common
Stock
Subject to
Telenav
RSUs
Excluding
Telenav
PRSUs
($)(4)
     Number of
Shares of
Common
Stock
Subject to
Telenav
PRSUs
(#)(5)
     Value of
Shares of
Common
Stock
Subject to
Telenav
PRSUs
($)(6)
     Total
($)(7)
 

H.P. Jin

     2,358,200        11,319,360        4,583        21,998        655,000        3,144,000        14,485,358  

Salman Dhanani

     284,388        1,365,062        276,667        1,328,002        510,000        2,448,000        5,141,064  

Adeel Manzoor

     26,363        126,542        200,634        963,043        60,000        288,000        1,377,585  

Hassan Wahla

     87,541        420,197        122,500        588,000        240,000        1,152,000        2,160,197  

Steve Debenham

     24,942        119,722        174,375        837,000        30,000        144,000        1,100,722  

Philipp Kandal(8)

     167,815        805,512        0        0        0        0        805,512  

Samuel Chen(9)

     54,183        260,078        0        0        0        0        260,078  

Wes Cummins

     89,848        431,270        0        0        0        0        431,270  

Douglas Miller(10)

     70,450        338,160        0        0        0        0        338,160  

Randy Ortiz

     99,848        479,270        0        0        0        0        479,270  

Ken Xie(11)

     115,288        553,382        0        0        0        0        553,382  

Karen Francis(12)

     73,022        350,506        15,998        76,790        0        0        427,296  

 

(1)

This number represents the number of shares of Common Stock directly held by the individual as of January 22, 2021, without regard to any change in control-related accelerated vesting, and consisting of the number of shares of Common Stock directly held by the individual as of December 5, 2020 (or with respect to Mr. Kandal, Mr. Xie and Ms. Francis, as of the date set forth in footnotes (8), (11) and (12) below, respectively), plus any additional shares expected to be issued to such individual as a result of the vesting of any of his or her Telenav RSUs that occurs on or before January 22, 2021. The number assumes that no individual will dispose of shares of Common Stock from December 5, 2020, through January 22, 2021, and that any Telenav RSUs scheduled to vest in accordance with its regular time-based vesting requirements after December 5, 2020, but before January 22, 2021 (and which consists of Telenav RSUs covering 16,667 shares for Mr. Dhanani and 5,333 shares for Ms. Francis, each scheduled to vest on December 10, 2020), are issued in full without regard to any shares that may be withheld to satisfy any applicable tax obligations and are settled by such date. No Telenav PRSUs held by the individuals are scheduled to vest through January 22, 2021, in accordance with their regular vesting requirements. The number of shares shown does not include shares of Common Stock that an executive officer may purchase after December 5, 2020, under the ESPP. For additional information regarding the treatment of the ESPP in the Merger, see the above-captioned section under the heading “—Treatment of the ESPP” and the section of this proxy statement captioned “The Merger Agreement—Treatment of the ESPP.” For additional information regarding beneficial ownership of Common Stock, see the section of this proxy statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

(2)

The value shown with respect to the shares is determined as the product of (a) the corresponding number of shares of Common Stock in the “Number of Shares of Common Stock Held Directly” column, multiplied by (b) the Merger Consideration.

(3)

This number represents the total number of shares of Common Stock subject to outstanding Telenav RSUs (excluding Telenav PRSUs) that are not scheduled to vest in accordance with their regular vesting schedules on or before January 22, 2021 (and without giving effect to any vesting acceleration as may apply in connection with the completion of the Merger). For additional information regarding the Telenav RSUs held by Telenav’s named executive officers including certain vesting acceleration applicable to the Telenav RSUs, see the section of this proxy statement captioned “—Golden Parachute Compensation.”

(4)

The value shown with respect to Telenav RSUs (excluding Telenav PRSUs) is determined as the product of (a) the corresponding number of shares of Common Stock in the “Number of Shares of Common Stock Subject to Telenav RSUs Excluding Telenav PRSUs” column, multiplied by (b) the Merger Consideration.

 

73


Table of Contents
(5)

This number represents the total number of shares of Common Stock subject to outstanding Telenav PRSUs that have not yet become eligible to vest or are not otherwise scheduled to vest in accordance with any applicable time-based vesting schedule on or before January 22, 2021, and assuming that no additional portion of the Telenav PRSUs becomes eligible to vest on or before such date based on performance achievement or otherwise (and without giving effect to any vesting or vesting acceleration as may apply in connection with the completion of the Merger). Certain adjustments and vesting provisions apply to the Telenav PRSUs in connection with the Merger, as described in the section of this proxy statement captioned “—Additional Terms of Telenav PRSUs.” For additional information regarding the Telenav PRSUs held by Telenav’s named executive officers, see the section of this proxy statement captioned “—Golden Parachute Compensation.”

(6)

The value shown with respect to Telenav PRSUs is determined as the product of (a) the corresponding number of shares of Common Stock in the “Number of Shares of Common Stock Subject to Telenav PRSUs” column, multiplied by (b) the Merger Consideration.

(7)

Each of Telenav’s named executive officers is eligible for vesting acceleration of his time-based Telenav equity awards in connection with certain qualifying terminations of employment under his severance agreement. For additional information regarding the Telenav RSUs and Telenav PRSUs for the Telenav named executive officers, see the section of this proxy statement captioned “—Golden Parachute Compensation.” Each of Telenav’s nonemployee directors is eligible for full vesting acceleration of his Telenav RSUs if his or her status as a director is terminated other than upon a voluntary resignation by him (unless such resignation is at the request of the acquirer). For additional information regarding the Telenav RSUs for the Telenav nonemployee directors, see the section of this proxy statement captioned “—Additional Terms of Director Equity Awards.”

(8)

Mr. Kandal’s employment with Telenav terminated on October 4, 2019. The number of shares of Common Stock held by Mr. Kandal shown in the table above is based on Telenav’s records as of October 4, 2019.

(9)

The number of shares of Common Stock held by Mr. Chen shown in the table above excludes shares of Common Stock held by Digital over which Mr. Chen and his wife share voting and dispositive power as described in the section of this proxy statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

(10)

The number of shares of Common Stock held by Mr. Miller shown in the table above includes shares of Common Stock held by a trust over which Mr. Miller has shared control as described in the section of this proxy statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

(11)

Mr. Xie’s service as a member of the Telenav Board terminated on November 2, 2020. The number of shares of Common Stock held by Mr. Xie shown in the table above is based on Telenav’s records as of November 2, 2020, and includes 23,433 shares of Common Stock held by a trust over which Mr. Xie has shared control as of the same date.

(12)

Ms. Francis’ service as a member of the Telenav Board terminated on November 20, 2019. The number of shares of Common Stock held by Ms. Francis shown in the table above is based on Telenav’s records as of November 20, 2019. The portion of the Telenav RSUs held by Ms. Francis covering a total of 15,998 shares of Common Stock is subject to vesting acceleration as described in the section of this proxy statement captioned “—Other Agreements.”

Change in Control and Severance Agreements

Telenav entered into a change in control and severance agreement with each of Dr. Jin and Messrs. Dhanani, Manzoor, Debenham, and Wahla (each, a severance agreement). Each of the severance agreements provides that if during the period beginning on the date three (3) months prior to a change in control of Telenav through the one-year anniversary of the change in control (the “Change in Control Period”), the executive officer’s employment is terminated by (x) Telenav other than for “cause,” death or disability, or (y) by him for “good reason,” then Telenav will provide the executive officer:

 

   

a lump sum payment equal to eighteen (18) months (in the case of Dr. Jin) or twelve (12) months (in the case of such other executive officers) of his then-current annual base salary;

 

74


Table of Contents
   

a lump sum payment equal to the amount of such executive officer’s target cash bonus in effect for the year in which the termination occurs, prorated to reflect the portion of the applicable performance period during which he was employed with Telenav;

 

   

a lump sum payment equal to 50% (or 75% for Dr. Jin) of the amount of such executive officer’s target cash bonus in effect for the year in which the termination occurs;

 

   

up to eighteen (18) months (in the case of Dr. Jin) or twelve (12) months (in the case of such other executive officers) of company-paid group health, dental and vision coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for such executive officer and any of his eligible dependents; and

 

   

accelerated vesting as to 100% of the executive officer’s outstanding equity awards that are subject to vest based on continued employment or other service but not any performance-based objectives.

Each severance agreement conditions receipt of the severance payments and benefits under the severance agreement on the executive officer entering into a separation agreement and release of claims in favor of Telenav and continuing to comply with his obligations under a proprietary information agreement entered into with Telenav, including non-disclosure obligations of certain confidential or proprietary information of Telenav. The proprietary information agreement for each of Dr. Jin and Messrs. Dhanani and Wahla also obligates them not to solicit any Telenav employees for a period of one year after employment with Telenav terminates, or to solicit following termination of employment any customers or other parties with which Telenav does business to the extent that the information regarding such parties constitute trade secrets. The severance agreements superseded any prior terms under an employment agreement or change in control and severance agreement providing for severance benefits payable upon certain qualifying terminations of employment. The closing of the Merger will constitute a change in control under each of the severance agreements.

For purposes of the severance agreements, the following terms generally have the following meanings:

The term “cause” generally means any material act of personal dishonesty by the executive officer in connection with his responsibilities as an employee; the executive officer’s conviction of, or plea of no contest to, a felony or any crime involving fraud, embezzlement or act of moral turpitude; the executive officer’s gross misconduct; the executive officer’s unauthorized use or disclosure of any proprietary information or trade secrets of Telenav or any other party to whom the executive officer owes an obligation of nondisclosure as a result of his relationship with Telenav; the executive officer’s willful breach of any obligations under any written agreement or covenant with Telenav; or the executive officer’s continued failure to perform his employment duties after he has received written demand of performance from Telenav and a ten (10) business day cure period.

The term “good reason” generally means the executive officer’s resignation within thirty (30) days after expiration of Telenav’s cure period after the occurrence of any of the following, without the executive officer’s written consent: assignment to the executive officer of any duties, reduction of his duties, or removal of the executive officer from his position and responsibilities, that results in a material reduction of his authorities, duties or responsibilities with Telenav, unless he is provided with a comparable position; a material reduction in the executive officer’s base salary unless Telenav also similarly reduces the base salaries of all other similarly situated employees; a material change in the geographic location of the executive officer’s primary work facility or location; failure of Telenav to have the executive officer’s severance agreement assumed by any successor to Telenav. To resign for good reason, the executive officer must provide Telenav with notice of occurrence of the good reason trigger within ninety (90) days of its initial existence and provide Telenav with a reasonable cure period of at least thirty (30) days.

Other Agreements

Telenav paid certain merit-based retention bonuses to Messrs. Dhanani and Wahla in the amount of $250,000 and $150,000, respectively, as approved by the compensation committee of the Telenav Board in February 2020 and pursuant to a retention bonus letter agreement between Telenav and such executive officer.

 

75


Table of Contents

Each of Messrs. Dhanani and Wahla has an obligation to repay his retention bonus in full to Telenav pursuant to the terms of such letter agreement in the event that the executive officer’s employment with Telenav is terminated at any time before March 1, 2022, by Telenav for cause or by the executive officer other than for good reason (as defined in the executive officer’s severance agreement).

Telenav paid a signing bonus in the amount of $150,000 to Mr. Manzoor, pursuant to an offer of employment agreement between Telenav and him, in September 2019 in connection with the commencement of his employment with Telenav. Mr. Manzoor’s signing bonus is subject to full repayment if Mr. Manzoor’s employment with Telenav is terminated within the first two years of his employment by Telenav for cause (as defined in his severance agreement), or other than due to his death or disability and other than as a result of a termination pursuant to which he is entitled to receive severance benefits under his severance agreement during the Change in Control Period, as described in the above section of this proxy statement captioned “—Change in Control and Severance Agreements.”

Ms. Francis provides consulting services to Telenav pursuant to an advisor agreement between Ms. Francis and Telenav, which became effective as of November 20, 2019, and contemplates a term of two years (unless extended, renewed or earlier terminated). The advisor agreement provides that if during the term of the advisor agreement a change in control of Telenav (as defined in the 2019 Plan) occurs after the one-year anniversary of the effective date of such advisory agreement, then the RSU award that Telenav granted to her under the 2019 Plan in November 2019 in connection with the commencement of her consulting services and that is scheduled to vest over the two-year term of the advisory agreement, will accelerate vesting to the extent that such award otherwise would have vested during the term of her advisory agreement.

Golden Parachute Compensation

The following table sets forth the information required by Item 402(t) of Regulation S-K published by the SEC regarding certain compensation that each of Telenav’s named executive officers may receive that is based on, or that otherwise relates to, the Merger. Telenav’s “named executive officers” for purposes of the disclosure in this proxy statement are H.P. Jin, Salman Dhanani, Adeel Manzoor, Hassan Wahla and Steve Debenham. For additional details regarding the terms of the payments quantified below, see the sections of this proxy statement captioned “—Change in Control and Severance Agreements” and “—Additional Terms of Telenav PRSUs.”

The amounts in the table are estimated using the following assumptions and such additional assumptions set forth in the footnotes to the table: (i) that the Effective Time of the Merger will occur on January 22, 2021 (which is the assumed closing date of the Merger solely for purposes of this proxy statement, including this golden parachute compensation disclosure); (ii) that the named executive officer will have a qualifying termination of his employment at the Effective Time of the Merger that results in severance benefits becoming payable to him under his change in control and severance agreement; (iii) that all of the Telenav equity awards held by the named executive officers that are outstanding as of January 22, 2021, are those equity awards that Telenav granted to the named executive officers through December 5, 2020; and (iv) the compensation and benefit levels in effect on the date of the termination of the named executive officer’s employment with Telenav are those in effect as of December 5, 2020, that otherwise are scheduled to be outstanding through January 22, 2021. The amounts reported below are estimates based on multiple assumptions that may or may not actually occur or be accurate on the relevant date. Accordingly, the ultimate values to be received by a named executive officer in connection with the Merger may differ from the amounts set forth below. Telenav’s named executive officers will not receive pension, non-qualified deferred compensation, or tax reimbursements in connection with the Merger.

As required by the applicable SEC rules, all amounts below that are determined using the per share value of the Common Stock have been calculated based on the Merger Consideration.

 

76


Table of Contents

Golden Parachute Compensation (estimated assuming an Effective Time of the Merger and a qualifying employment termination as of January 22, 2021)

 

Name    Cash
($)(1)
     Equity
($)(2)
     Perquisites /
Benefits
($)(3)
     Total Payments
($)(4)
 

H.P. Jin

     1,122,939        617,198        36,093        1,776,230  

Salman Dhanani

     675,800        1,404,802        24,090        2,104,692  

Adeel Manzoor

     557,134        963,043        18,442        1,538,619  

Hassan Wahla

     516,168        684,000        24,046        1,224,214  

Steve Debenham

     499,404        837,000        21,400        1,357,804  

 

(1)

This amount would be considered “double trigger” cash severance payments to which each named executive officer may become entitled under his severance agreement, as described in further detail in the section of this proxy statement captioned “—Change in Control and Severance Agreements.” The amount for each named executive officer represents a single, lump sum cash payment of severance upon a qualifying termination of employment that occurs during the Change in Control Period, which is the period beginning on the date three (3) months prior to a change in control of Telenav through the one-year anniversary of the change in control. The amount of such cash severance consists of: twelve (12) months (or eighteen (18) months, in the case of Dr. Jin) of salary severance, in the amounts of $598,500 for Dr. Jin, $365,000 for Mr. Dhanani, $340,000 for Mr. Manzoor, and $315,000 for each of Messrs. Wahla and Debenham; target cash bonus in effect for the year in which the termination occurs, prorated for the portion of the performance period during which the named executive officer was employed with Telenav, in the amount of $225,189 for Dr. Jin, $164,800 for Mr. Dhanani, $115,134 for Mr. Manzoor, $106,668 for Mr. Wahla, and $97,779 for Mr. Debenham; and 50% (or 75%, in the case of Dr. Jin) of the named executive officer’s target bonus in effect for the year in which the termination occurs, in the amount of $299,250 for Dr. Jin, $146,000 for Mr. Dhanani, $102,000 for Mr. Manzoor, $94,500 for Mr. Wahla and $86,625 for Mr. Debenham.

(2)

This amount represents the value of the equity awards unvested as of January 22, 2021, held by each of the named executive officers that are eligible for the “double trigger” vesting acceleration under the named executive officer’s severance agreement. Except for such equity awards subject to performance-based objectives, 100% of the portion of such equity awards that are scheduled to vest based on continued employment or other service that are outstanding and unvested as of the date that the named executive officer has a qualifying termination of employment during the Change in Control Period are subject to such vesting acceleration provisions under his severance agreement (as described in further detail in the section of this proxy statement captioned “—Change in Control and Severance Agreements”). The following table quantifies the value of the payments and the number of shares to which such payments relate. All Telenav Options held by the named executive officers are Underwater Options.

 

Name    Number of Shares
Subject to Telenav
RSUs Excluding
Telenav PRSUs
(#)(a)
     Value of Telenav
RSUs Excluding
Telenav PRSUs
($)(b)
     Number of Shares
Subject to Telenav
PRSUs
(#)(c)
     Value of Telenav
PRSUs
($)(d)
 

H.P. Jin

     4,583        21,998        124,000        595,200  

Salman Dhanani

     276,667        1,328,002        16,000        76,800  

Adeel Manzoor

     200,634        963,043        0        0  

Hassan Wahla

     122,500        588,000        20,000        96,000  

Steve Debenham

     174,375        837,000        0        0  

 

  (a)

Excludes 16,667 shares of Common Stock subject to time-based Telenav RSUs held by Mr. Dhanani that are scheduled to vest on December 10, 2020, subject to Mr. Dhanani’s continued service. No Telenav RSUs held by any other named executive officer is scheduled to vest before January 22, 2021.

  (b)

This amount represents a cash amount equal to the product of (i) the Merger Consideration and (ii) the aggregate number of shares of Common Stock subject to the Telenav RSUs held by the named executive officer as set forth in the column immediately to the left of this column in the table set forth in this footnote (2).

 

77


Table of Contents
  (c)

This amount represents the number of shares of Common Stock subject to Telenav PRSUs that would become eligible to vest upon achievement of the applicable performance goals under the Telenav PRSUs, based on a Telenav stock price equal to the Merger Consideration. Such Telenav PRSUs consist of the Telenav PRSUs granted to Dr. Jin in October 2018 and September 2019, and to each of Messrs. Dhanani and Wahla in September 2019, pursuant to which 20% of the total number of shares subject to the Telenav PRSUs will become eligible to vest, and will be scheduled to vest on the one-year anniversary of the change in control subject to continued service through such date, as a result of no portion of such award of Telenav PRSUs having become eligible to vest based on actual performance achievement as of the final performance measurement shortly before the closing of the Merger. For additional information regarding the named executive officers’ Telenav PRSUs, see the sections of this proxy statement captioned “—Additional Terms of Telenav PRSUs” and “—Equity Interests of Telenav’s Executive Officers and Nonemployee Directors.” Upon becoming eligible to vest in connection with the Merger, these Telenav PRSUs will be considered solely time-based for purposes of the named executive officer’s severance agreement and thus will be eligible for the “double trigger” vesting acceleration as described above in this footnote (2).

  (d)

This amount represents a cash amount equal to the product of (i) the Merger Consideration and (ii) the number of shares of Common Stock subject to Telenav PRSUs held by the named executive officer that would be payable (based on the assumptions described in footnote (b) above) as set forth in the column immediately to the left of this column in the table above in this footnote (2). The amounts would be paid to the named executive officer upon vesting on the one-year anniversary of the change in control, subject to continued service through such date and the vesting acceleration described in footnote (c) above.

(3)

This amount represents “double trigger” company-paid group health, dental and vision coverage under COBRA for the executive officer and any of his eligible dependents, that each named executive officer may become entitled to receive under his severance agreement upon a qualifying termination of employment that occurs during the Change in Control Period, as described in further detail in the section of this proxy statement captioned “—Change in Control and Severance Agreements.” Telenav will pay the cost of such continued COBRA coverage for a period of up to eighteen (18) months in the case of Dr. Jin or twelve (12) months in the case of each of the other named executive officers.

(4)

Under the severance agreements, amounts are subject to reduction in the event that the named executive officer would receive a greater benefit on an after-tax basis by having some of his change in control-related payments and benefits being reduced rather than paying the excise tax under Internal Revenue Code Section 4999 on such amounts. This amount assumes no such reduction is applied.

Board of Directors and Management Following the Merger

Prior to the Effective Time, Telenav will direct each member of the Telenav Board to execute and deliver a resignation letter, which will be effective immediately prior to the Effective Time. At the Effective Time, the director of Merger Sub will be the sole director of the Surviving Corporation, and the officers of Telenav will be the officers of the Surviving Corporation, in each case, until the earlier of their resignation or removal or until their successors are duly elected and qualified, subject to the Surviving Corporation’s certificate of incorporation and bylaws and the DGCL.

Indemnification and Insurance

Under the Merger Agreement, V99 and Merger Sub agreed that all preexisting rights to indemnification in favor of Telenav’s current or former directors or officers as in effect on the date of the Merger Agreement for acts or omissions occurring prior to the Effective Time will be assumed and performed by the Surviving Corporation and will continue in full force and effect until the later of six (6) years following the Effective Time or the expiration of the applicable statute of limitations with respect to any claims against such directors or officers arising out of such acts or omissions, except as otherwise required by applicable law. For six (6) years after the Effective Time, V99 will cause to be maintained in effect provisions in the Surviving Corporation’s

 

78


Table of Contents

certificate of incorporation and bylaws regarding elimination of liability of directors, indemnification of officers, directors and employees and advancement of expenses that are no less advantageous to the intended beneficiaries than the corresponding provisions in existence prior to the date of the Merger Agreement. In addition, at or prior to the Effective Time, Telenav will, or if Telenav is unable to, V99 will, cause the Surviving Corporation to obtain and pay the premium for a six-year prepaid noncancelable “tail policy” providing directors’ and officers’ liability insurance on terms that are no less favorable than the coverage provided under Telenav’s existing policies, with respect to matters arising at or prior to the Effective Time and with a claims reporting or discovery period of at least six (6) years from the Effective Time. For more information, see “The Merger Agreement—Indemnification and Insurance.”

New Arrangements

As of the date of this proxy statement, none of Telenav’s directors or executive officers has entered into any amendments or modifications to his existing employment, compensation or other agreements or arrangements with Telenav in connection with the Merger, nor have they entered into any such agreements or arrangements with V99 or its affiliates. The Merger is not conditioned upon any director or executive officer of Telenav entering into any such agreements or arrangements.

Post-Closing Compensation and Employee Benefits

Under the Merger Agreement, V99 has agreed to provide, or cause the Surviving Corporation to provide, to any continuing employee, including any continuing employee who was an executive officer of Telenav, the compensation and benefits described under “The Merger Agreement—Employee Matters.”

Interests of the Purchaser Group

Certain members of the Purchaser Group have interests in the Merger that are in addition to, or different from, the interests of other Telenav stockholders. These interests are described below.

Among the Purchaser Group, Dr. Jin is Telenav’s Chairman, Chief Executive Officer and President. Mr. Chen is a member of the Telenav Board. Dr. Jin holds Telenav Options and Telenav RSUs, and Mr. Chen holds Telenav Options. See the section of this proxy statement captioned “Security Ownership of Certain Beneficial Owners and Management.” Also, see the section captioned “Special Factors—Interests of Telenav’s Directors and Executive Officers in the Merger” for a detailed discussion on treatment of the Telenav Options and the Telenav RSUs held by Dr. Jin and Mr. Chen and their interests in the Merger in their capacity as a director and/or executive officer of Telenav.

Dr. Jin is the sole stockholder in V99, and after the consummation of the Merger, Telenav will become a wholly owned subsidiary of V99. As the sole stockholder of the parent entity of Telenav, Dr. Jin will bear the risks and receive the rewards of such indirect ownership of Telenav after the Merger, including any future earnings and growth of Telenav as a result of improvements to Telenav’s operations, acquisitions of other businesses. Dr Jin has agreed to fund the transaction, jointly and severally, with Mr. Chen and Digital.

Mr. Chen and Digital, a British Virgin Islands company beneficially owned by Mr. Chen and his wife, Fiona Chang, agreed to fund the transaction, jointly and severally with Dr. Jin. See the section of this proxy statement captioned “Special Factors—Sources and Amounts of Funds or Other Consideration; Expenses.” Under the Merger Agreement as initially executed, each member of the Purchaser Group (V99, Merger Sub, Dr. Jin, Mr. Chen, Digital and Ms. Chang, along with Yi-Ting Chen and Yi-Chun Chen (who are daughters of Mr. Chen and Ms. Chang), and Changbin Wang) had agreed to the cancellation of their shares of Common Stock beneficially owned by them and to not receive the Merger Consideration. Under the Merger Agreement Proposal to be voted on by Telenav stockholders, each member of the Purchaser Group will receive the Merger Consideration in exchange for their shares of Common Stock on the same terms as Telenav’s unaffiliated stockholders.

 

79


Table of Contents

Material U.S. Federal Income Tax Consequences of the Merger

The following are the material U.S. federal income tax consequences of the Merger to U.S. holders (as defined below) of the Common Stock. This discussion applies only to U.S. holders that hold the Common Stock as a capital asset within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment). This discussion does not address the consequences of the Merger to U.S. holders who receive cash pursuant to the exercise of appraisal rights. In addition, this discussion does not address the application of the Medicare contribution tax on net investment income or the application of the U.S. alternative minimum tax. This discussion does not describe all of the tax consequences that may be relevant to a U.S. holder in light of the U.S. holder’s particular circumstances or to U.S. holders subject to special rules, such as:

 

   

dealers or traders subject to a mark-to-market method of tax accounting with respect to the Common Stock;

 

   

persons holding the Common Stock as part of a straddle, hedging transaction, conversion transaction, integrated transaction or constructive sale transaction;

 

   

persons whose functional currency is not the U.S. dollar;

 

   

entities classified as partnerships or other pass-through entities for U.S. federal income tax purposes;

 

   

persons who acquired the Common Stock through the exercise of compensatory stock options or otherwise as compensation;

 

   

persons who own stock or another equity interest in V99;

 

   

persons subject to special accounting rules under Section 451(b) of the Code;

 

   

certain financial institutions;

 

   

regulated investment companies;

 

   

real estate investment trusts; or

 

   

tax-exempt entities, including an “individual retirement account” or “Roth IRA.”

If an entity that is classified as a partnership for U.S. federal income tax purposes holds the Common Stock, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding the Common Stock and partners in such partnerships should consult their own tax advisers as to the particular U.S. federal income tax consequences of the Merger to them.

This discussion is based on the Code, published administrative pronouncements, judicial decisions and final and temporary Treasury regulations, all as of the date hereof, any of which is subject to change, possibly with retroactive effect. Tax considerations under U.S. federal tax laws other than income tax laws (such as estate and gift tax laws), U.S. state or local tax laws and non-U.S. tax laws are not addressed.

Telenav has not requested, and does not intend to request or obtain, a ruling from the U.S. Internal Revenue Service (the “IRS”) regarding the U.S. federal income tax consequences described below. This summary is not binding on the IRS, and the IRS may take a position that is different from, or contrary to, the positions described in this summary. There can be no assurance that a court will not sustain any challenge by the IRS.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of the Common Stock that is:

 

   

a citizen or individual who is a resident of the United States for U.S. federal income tax purposes;

 

   

a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or 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

 

80


Table of Contents
   

a trust (i) if a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) that was in existence on August 20, 1996, and has a valid election in place to be treated as a U.S. person for U.S. federal income tax purposes.

The exchange of the Common Stock for cash in the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose Common Stock is converted into the right to receive cash in the Merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received with respect to such Common Stock and the U.S. holder’s tax basis in such Common Stock. Gain or loss will be determined separately for each block of the Common Stock (i.e., each group of shares of the Common Stock acquired at the same cost in a single transaction). Such gain or loss generally will be treated as long-term capital gain or loss if the U.S. holder’s holding period for the relevant block of the Common Stock exceeds one year at the time of the completion of the Merger. Long-term capital gains of noncorporate U.S. holders generally are subject to U.S. federal income tax at preferential rates. The deductibility of capital losses is subject to limitations.

Payments made in exchange for shares of the Common Stock generally will be subject to information reporting unless the U.S. holder is an “exempt recipient” and may also be subject to backup withholding at a rate of 24%. To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should complete and return IRS Form W-9, certifying that such U.S. holder is a U.S. person and is not subject to backup withholding, and also providing its U.S. federal identification number and certifying that the number provided is correct.

Amounts withheld under the backup withholding rules are not additional taxes and may be refunded or credited against a U.S. holder’s U.S. federal income tax liability, provided the relevant information is timely furnished to the IRS.

You are urged to consult your own tax adviser with respect to the application of U.S. federal income tax laws to your particular circumstances as well as any tax consequences arising under the U.S. federal estate or gift tax rules, or under any U.S. state or local or non-U.S. tax laws.

Litigation Related to the Merger

As of the date of this proxy statement, Telenav is aware of one complaint related to the Merger Agreement having been filed: George P. Assad, Jr. v. Telenav, Inc., et al., C.A. No. 2020-0950-JTL (Del. Ch.) (filed Nov. 6, 2020). The Delaware Complaint was brought by a putative stockholder against Telenav and members of the Telenav Board and Special Committee, and it asserts one count for violation of Section 203. Specifically, the Delaware Complaint alleges that Dr. Jin and/or his affiliated entities reached an “agreement, arrangement or understanding,” as those terms are defined in Section 203, with Samuel Chen and/or his affiliates, prior to Special Committee and Board approval of the Merger, that shares owned by Mr. Chen and/or his affiliates would be voted in favor of the Merger and, therefore, triggered Section 203’s requirement that at least 66 and two-thirds percent of the outstanding stock unaffiliated with Dr. Jin and Mr. Chen vote in favor of the Merger. The Delaware Complaint seeks, among other things, an order enjoining the stockholder vote on the Merger. Telenav disputes the Delaware Complaint’s allegations, including the allegation that Dr. Jin and Mr. Chen entered into any “agreement, arrangement, or understanding” with respect to the Merger prior to the Telenav Board’s approval of the Merger and/or prior to the Telenav Board’s approval of any such “agreement, arrangement, or understanding.” A preliminary injunction hearing is currently set for January 15, 2021. As of the date of this proxy statement, the parties to the Delaware Action have agreed that the Merger will be conditioned on the vote described in the section of this proxy statement captioned “The Special Meeting of Telenav’s Stockholders—Votes Required,” and have entered into and filed with the Delaware Court of Chancery a stipulation memorializing that agreement for the purpose of mooting the Delaware Action. The plaintiff in the Delaware Action has agreed to voluntarily dismiss the Delaware Action within three (3) days of the date of filing of this proxy statement.

 

81


Table of Contents

SELECTED CONSOLIDATED FINANCIAL DATA OF TELENAV

The following tables contain selected consolidated financial data of Telenav. Telenav’s fiscal year ends on June 30 of each year. Telenav’s fiscal 2021 (“Fiscal 2021”) ends on June 30, 2021, Telenav’s fiscal 2020 (“Fiscal 2020”) ended on June 30, 2020, Telenav’s fiscal 2019 (“Fiscal 2019”) ended on June 30, 2019, Telenav’s fiscal 2018 (“Fiscal 2018”) ended on June 30, 2018, Telenav’s fiscal 2017 (“Fiscal 2017”) ended on June 30, 2017, and Telenav’s fiscal 2016 (“Fiscal 2016”) ended on June 30, 2016. Telenav’s first quarter of Fiscal 2021 ended on September 30, 2020, and Telenav’s first quarter of fiscal 2020 ended on September 30, 2019.

The selected consolidated statements of operations data for Fiscal 2020, Fiscal 2019, Fiscal 2018, Fiscal 2017 and Fiscal 2016 and the selected consolidated balance sheet data as June 30, 2020, 2019, 2018, 2017 and 2016 are derived from the annual audited consolidated financial statements included in Telenav’s Annual Reports on Form 10-K for Fiscal 2020, Fiscal 2019, Fiscal 2018 and Fiscal 2017, which are incorporated by reference herein. The selected consolidated statements of operations data for the three months ended September 30, 2020 and 2019, and the selected consolidated balance sheet data as of September 30, 2020 is derived from the unaudited consolidated financial statements included in Telenav’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, which is incorporated by reference herein. Telenav has prepared the consolidated financial statements in accordance with U.S. generally accepted accounting principles, or GAAP. Telenav has classified the results of operations of its advertising business, which were previously presented as a component of consolidated operating results, as discontinued operations in the statement of operations for all periods presented. Telenav has not declared or distributed any cash dividends on its Common Stock.

Telenav’s historical results are not necessarily indicative of the results that may be expected in the future. The following summary consolidated financial and other data should be read in conjunction with the other information contained in Telenav’s Annual Report on Form 10-K for Fiscal 2020 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included therein.

 

Consolidated Statements of Operations Data:
(in thousands, except per share data)
  Three Months
Ended
September 30,
    Fiscal Year Ended June 30,  
  2020     2019     2020     2019     2018     2017     2016(1)  

Total revenue

  $ 69,596     $ 66,629     $ 240,351     $ 196,655     $ 191,234     $ 182,874     $ 161,602  

Total cost of revenue

    40,083       36,851       126,431       113,149       114,730       107,712       88,501  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    29,513       29,778       113,920       83,506       76,504       75,162       73,101  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

             

Research and development

    18,986       20,663       79,256       78,603       79,946       62,340       64,189  

Sales and marketing

    1,996       1,946       8,280       7,584       9,168       11,470       11,765  

General and administrative

    6,512       7,287       25,822       23,811       21,550       21,854       21,063  

Goodwill impairment

    —         —         —         —         2,666       —         —    

Legal settlements and contingencies

    —         —         —         700       425       6,424       935  

Restructuring

    —         —         —         —         —         —         (1,132
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    27,494       29,896       113,358       110,698       113,755       102,088       96,820  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

    2,019       (118     562       (27,192     (37,251     (26,926     (23,719

Other income (expense), net

    714       561       3,010       2,916       833       892       (229
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before provision for income taxes

    2,733       443       3,572       (24,276     (36,418     (26,034     (23,948

Provision for income taxes

    14       411       1,336       1,376       1,012       841       511  

Equity in net (income) of equity method investees

    (616     —         (876     —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

    3,335       32       3,112       (25,652     (37,430     (26,875     (24,459

Loss on discontinued operations, net of tax

    —         (3,986     (4,042     (6,836     (3,404     (2,661     (10,862
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 3,335     $ (3,954   $ (930   $ (32,488   $ (40,834   $ (29,536   $ (35,321
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

82


Table of Contents
Consolidated Statements of Operations Data:
(in thousands, except per share data)
  Three Months
Ended
September 30,
    Fiscal Year Ended June 30,  
  2020     2019     2020     2019     2018     2017     2016(1)  

Basic income (loss) per share

             

Income (loss) from continuing operations

  $ 0.07     $ —       $ 0.07     $ (0.56   $ (0.84   $ (0.62   $ (0.59

Loss on discontinued operations

    —         (0.08     (0.08     (0.15     (0.08     (0.06     (0.26
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 0.07     $ (0.08   $ (0.02   $ (0.71   $ (0.92   $ (0.68   $ (0.85
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted income (loss) per share

             

Income (loss) from continuing operations

  $ 0.07     $ —       $ 0.06     $ (0.56   $ (0.84   $ (0.62   $ (0.59

Loss on discontinued operations

    —         (0.08     (0.08     (0.15     (0.08     (0.06     (0.26
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

  $ 0.07     $ (0.08   $ (0.02   $ (0.71   $ (0.92   $ (0.68   $ (0.85
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computing income (loss) per share, basic

    47,227       47,780       47,868       45,577       44,498       43,343       41,567  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computing income (loss) per share, diluted

    47,841       49,648       48,761       45,577       44,498       43,343       41,567  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Consolidated Balance Sheet Data:

(in thousands)

   As of
September 30,
     As of June 30,  
   2020      2020      2019      2018      2017      2016(1)  

Current assets

   $ 178,968      $ 177,495      $ 200,075      $ 149,742      $ 186,531      $ 163,870  

Non-current assets

     116,977        116,256        96,940        87,938        54,363        54,377  

Total assets

   $ 295,945      $ 293,751      $ 297,015      $ 237,680      $ 240,894      $ 218,247  

Current liabilities

   $ 92,484      $ 89,975      $ 100,403      $ 72,746      $ 78,714      $ 45,688  

Non-current liabilities

     100,972        106,806        105,972        56,051        20,476        22,874  

Total liabilities

   $ 193,456      $ 196,781      $ 206,375      $ 128,797      $ 99,190      $ 68,562  

 

(1)

The summary consolidated financial data for Fiscal 2016 have not been updated to reflect the adoption of Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) and subsequent amendments (ASC 606). Refer to Telenav’s Annual Report on Form 10-K for Fiscal 2019 for additional discussion regarding the adoption of ASC 606.

Book Value Per Share

Telenav’s net book value per share as of September 30, 2020 was approximately $2.16 (calculated based on 47,522,790 shares outstanding as of such date).

 

83


Table of Contents

THE MERGER AGREEMENT

The following discussion sets forth the principal terms of the Agreement and Plan of Merger, which is referred to as the Merger Agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the Merger Agreement and not by this discussion, which is summary by nature. This discussion is not complete and is qualified in its entirety by reference to the complete text of the Merger Agreement. You are urged to read the Merger Agreement carefully in its entirety, as well as this proxy statement, before making any decisions regarding the Merger.

The Merger

Subject to the terms and conditions of the Merger Agreement and in accordance with the DGCL, Merger Sub, a Delaware corporation and a wholly owned subsidiary of V99, will merge with and into Telenav, and Telenav will survive the Merger as a wholly owned subsidiary of V99.

Closing and Effective Time of the Merger

The closing of the Merger will occur at 9:00 a.m., San Francisco, California local time, on a date to be specified by the parties, which shall be no later than two (2) business days after the satisfaction or waiver (subject to the restriction on waiving the condition that 66 and two-thirds percent of the outstanding shares of Common Stock not beneficially owned by any member of the Purchaser Group have approved the Merger Agreement) of the conditions to the closing described under “—Conditions to Completion of the Merger” (other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions). The Merger will become effective at such time as the parties duly file a certificate of merger with the Delaware Secretary of State (or at such later time as the parties may agree in writing and be specified in the certificate of merger).

Directors and Officers

Prior to the Effective Time, Telenav will direct each member of the Telenav Board to execute and deliver a resignation letter, which will be effective immediately prior to the Effective Time. At the Effective Time, the director of Merger Sub will be the sole director of the Surviving Corporation, until his successor shall have been duly elected or appointed and qualified, or until his earlier death, resignation or removal in accordance with the Surviving Corporation’s certificate of incorporation and bylaws.

The officers of Telenav shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors shall have been duly elected or appointed and qualified, or until their earlier death, resignation or removal in accordance with the Surviving Corporation’s certificate of incorporation and bylaws.

Consideration to be Received in the Merger

Common Stock. At the Effective Time, each share of Common Stock (other than shares held in treasury (the “Cancelled Shares”) and shares issued and outstanding immediately prior to the Effective Time held by holders who shall neither have voted in favor of the Merger nor consented thereto in writing and who shall have properly and validly perfected, and not effectively withdrawn or lost, their statutory rights of appraisal in respect of such shares of Common Stock in accordance with section 262 of the DGCL (the “Dissenting Shares”)) will be converted into the right to receive the Merger Consideration. As of the Effective Time, all shares of Common Stock will no longer be outstanding and will cease to exist, and will cease to have any rights with respect to such shares of Common Stock other than the right to receive the Merger Consideration. All Cancelled Shares will be cancelled and will cease to exist, and no consideration will be delivered in exchange therefor. Additionally, any

 

84


Table of Contents

share of Common Stock of Merger Sub issued and outstanding prior to the Effective Time will be converted into and become one validly issued, fully paid and nonassessable share of Common Stock of the Surviving Corporation.

Dissenting Shares. A holder of Common Stock may exercise appraisal rights available under Section 262 of the DGCL, the text of which is included with this proxy statement as Annex C. The shares of stock held by holders who have neither voted in favor of the Merger nor consented thereto in writing and who have properly and validly perfected, and not effectively withdrawn or lost, their statutory appraisal rights in respect of such shares will not be converted into, or represent the right to receive, the Merger Consideration, but will instead be entitled to receive payment of the appraised value of such shares in accordance with the provisions of Section 262 of the DGCL.

Payment for the Common Stock

V99 will designate Telenav’s transfer agent or a U.S.-based bank or trust company reasonably acceptable to Telenav (the “Paying Agent”) for the purpose of exchanging certificates that, immediately prior to the Effective Time, represented shares of outstanding Common Stock (“Certificates”), and shares of outstanding Common Stock not represented by Certificates (“Book-Entry Shares”), and, immediately prior to the Effective Time, the Purchaser Parties will, for the benefit of the holders of shares of Common Stock at the Effective Time, deposit cash with the Paying Agent in an amount sufficient to pay the aggregate Merger Consideration in exchange for all outstanding shares of Common Stock (other than Cancelled Shares and Dissenting Shares) (such deposited cash amount, the “Exchange Fund”).

If you are a holder of record of Common Stock, you will not be entitled to receive the Merger Consideration until you deliver a duly completed and executed letter of transmittal to the Paying Agent. If your shares are certificated, you must also surrender your Certificates to the Paying Agent. As promptly as practicable after the Effective Time, any in any event not later than the second business day thereafter, the Surviving Corporation will cause the Paying Agent to mail to each holder of record of Certificates or Book-Entry Shares (other than Cancelled Shares or Dissenting Shares) a form of letter of transmittal and instructions for use in effecting the surrender of Certificates or Book-Entry Shares in exchange for the payment of the Merger Consideration. Upon surrender of a Certificate (or affidavit in lieu thereof) together with a duly executed letter of transmittal to the Paying Agent, the holder of such Certificate will be entitled to receive the Merger Consideration for each surrendered share, and any Certificate so surrendered will be cancelled. As promptly as practicable after Effective Time, the Paying Agent will issue and deliver to each holder of Book-Entry Shares (other than Cancelled Shares or Dissenting Shares) a check or wire transfer for the Merger Consideration that such holder is entitled to receive in respect of such shares, without such holder having to deliver a Certificate or letter of transmittal to the Paying Agent; provided, that an “agent’s message” has been previously delivered to the Paying Agent regarding such Book-Entry Shares, and such Book-Entry Shares will then cease to represent any right to receive the Merger Consideration.

If the Merger Consideration is to be paid to someone other than in whose name the surrendered Certificate representing Common Stock or book-entry share is registered, it is a condition to such exchange that the person requesting such exchange will pay to the Paying Agent any transfer or other taxes required by reason of such payment of the Merger Consideration, or such person must establish that any such tax has been paid or is not applicable.

At the Effective Time, the share transfer books of Telenav will be closed and there will be no further registration of transfers of the shares of Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates or Book-Entry Shares representing Common Stock are presented to the Surviving Corporation or Paying Agent for any reason, they will be cancelled and exchanged for the Merger Consideration.

 

85


Table of Contents

The Paying Agent will invest the Exchange Fund as directed by V99, or after the Effective Time, the Surviving Corporation, provided that any such investments shall be in securities issued or directly and fully guaranteed or insured as to principal and interest by the United States government or any agency or instrumentality thereof. Earnings on the Exchange Fund will be the sole and exclusive property of the Surviving Corporation and will be paid to the Surviving Corporation. No investment will relieve the Purchaser Parties, the Surviving Corporation or the Paying Agent from paying the Merger Consideration, and following any losses from any such investment (or any other circumstance in which the Exchange Fund diminishes below the level required for the Paying Agent to promptly pay the Merger Consideration, the Purchaser Parties will promptly provide additional funds to the Paying Agent in the amount of such losses (or in the amount necessary to ensure that the Exchange Fund is at all times fully available for paying the Merger Consideration), which additional funds shall be deemed to be part of the Exchange Fund.

Any portion of the Exchange Fund that remains unclaimed by former holders of Common Stock for a period of twelve (12) months after the Effective Time will be delivered, upon demand, to V99. Holders of Common Stock who have not complied with the procedures described in the Merger Agreement will look only to V99 for payment of their Merger Consideration. If any holder shall not have surrendered a Certificate or book-entry share prior to the date on which such amounts would otherwise escheat to or become property of any governmental entity, any Merger Consideration in respect thereof will become, to the extent permitted by applicable law, the property of the Surviving Corporation, and any holder shall only look to the Surviving Corporation for payment of the Merger Consideration. None of V99, the Merger Sub, the Surviving Corporation, the Paying Agent, Telenav or any other stockholder, partner, member, representative or affiliate thereof will be liable in respect of any portion of the Exchange Fund that is delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

Prior to the Effective Time, the Purchaser Parties will cooperate to establish procedures with the Paying Agent and the Depository Trust Company (“DTC”) with the objective that the Paying Agent will transmit to DTC or its nominees no later than the first business day after closing an amount in cash equal to the number of shares of Common Stock (other than Cancelled Shares and Dissenting Shares) held of record by DTC or such nominee immediately prior to the effective Time multiplied by the Merger Consideration.

Lost, Stolen or Destroyed Certificates

If a Certificate has been lost, stolen or destroyed, the Paying Agent will still deliver the Merger Consideration to the holder claiming such Certificate to be lost, stolen or destroyed, provided such holder makes an affidavit in form and substance reasonably acceptable to V99 and the Paying Agent, and, if required by the Paying Agent, providing an indemnity against any claim that may be made against the Paying Agent in respect of such Certificate.

Treatment of Options

No Telenav Options will be assumed by V99, and all outstanding Telenav Options have exercise prices per share in excess of the Merger Consideration. In connection with the completion of the Merger and subject to the terms of the Merger Agreement, each Telenav Option that is outstanding and unexercised as of immediately prior to the Effective Time, will immediately vest and be cancelled and converted into the right to receive, at the Effective Time, an amount in cash, without interest, equal to the product of (i) the excess, if any, of the Merger Consideration over the per share exercise price of such Telenav Option, and (ii) the total number of shares of Common Stock subject to such Telenav Option as of immediately prior to the Effective Time, less any taxes required to be withheld; provided, however, that any Telenav Option for which its per share exercise price is greater than the Merger Consideration will be cancelled and terminated at the Effective Time for no consideration.

 

86


Table of Contents

Treatment of RSUs

In connection with the completion of the Merger and subject to the terms of the Merger Agreement, each Telenav RSU (including without limitation any Telenav RSU granted subject to any performance-based vesting requirements) will be treated as follows:

 

   

Vested Company RSU Awards. As of the Effective Time, each Telenav RSU (or portion thereof) that is outstanding and vested as of immediately prior to the Effective Time but for which the shares of Common Stock issuable with respect thereto have not yet been delivered immediately prior to the Effective Time (and after giving effect to any acceleration provided under the terms of the Telenav equity plans, the applicable Telenav RSU award agreement and any other written agreement between the holder of such Telenav RSU and Telenav or any of its subsidiaries governing any vesting terms of such Telenav RSU) will be cancelled and converted into the right to receive, at the Effective Time, an amount in cash, without interest, equal to the Merger Consideration for each share of Common Stock otherwise deliverable in settlement of such vested Telenav RSU (or portion thereof), less any taxes required to be withheld.

 

   

Unvested Company RSU Awards. Each Telenav RSU (or portion thereof) that is unvested, outstanding and unsettled immediately prior to the Effective Time (and after giving effect to any acceleration provided under the terms of the Telenav equity plans, the applicable RSU award agreement and any other written agreement between the holder of such Telenav RSU and Telenav or any of its subsidiaries governing any vesting terms of such Telenav RSU) will be cancelled and converted into the unfunded, unsecured right (the “Cash-Out RSU Award”) to receive an amount in cash, without interest, equal to the Merger Consideration (less any taxes required to be withheld), subject to the holder’s satisfaction of any time-based vesting terms (including any accelerated vesting in connection with a termination of service) that applied to the corresponding Telenav RSU immediately prior to the Effective Time; provided, however, that V99 may enter into agreements after December 2, 2020, with up to twelve individuals holding such unvested Telenav RSUs providing for different treatment of such unvested Telenav RSUs. Each Cash-Out RSU Award will continue to have, and will be subject to, the same terms and conditions (including time-based vesting conditions and, if applicable, any accelerated vesting in connection with a termination of service) that applied to the corresponding Telenav RSU immediately prior to the Effective Time, except that the Surviving Corporation may modify terms rendered inoperative by reason of the Merger, or as necessary or appropriate to reflect that the Surviving Corporation’s securities are not publicly traded, or for such other immaterial administrative or ministerial changes as in the reasonable and good faith determination of the Surviving Corporation are appropriate to administer the Cash-Out RSU Award.

Treatment of the ESPP

With respect to the ESPP, Telenav will take all actions that may be necessary to provide that (i) no new offering period or purchase period will commence under the ESPP following the date of the Merger Agreement, (ii) participants in the ESPP as of the date of the Merger Agreement may not increase their payroll deductions under the ESPP from those in effect on the date of the Merger Agreement, and (iii) no new participants may commence participation in the ESPP following the date of the Merger Agreement.

Telenav will take such action as may be necessary prior to the closing to (i) cause any offering period or purchase period in progress under the ESPP as of the date of the Merger Agreement to be the final such period under the ESPP and to be terminated no later than three (3) business days prior to the Final Exercise Date, (ii) make any pro-rata adjustments that may be necessary to reflect the shortened offering or purchase period, but otherwise treat such shortened offering or purchase period as a fully effective and completed offering or purchase period for all purposes under the ESPP, (iii) cause each participant’s then-outstanding ESPP Rights to be exercised as of the Final Exercise Date, and (iv) terminate the ESPP as of the Effective Time.

 

87


Table of Contents

Any accumulated contributions of a participant under the ESPP will, if not used to purchase shares in accordance with the terms and conditions of the ESPP (and consistent with the terms of the Merger Agreement), be refunded to such participant as promptly as practicable following the Final Exercise Date (without interest). No further ESPP Rights will be exercised under the ESPP after the Final Exercise Date. Telenav will provide timely notice to participants of the setting of the Final Exercise Date and the termination of the ESPP in accordance with the terms of the ESPP.

Representations and Warranties

The Merger Agreement contains representations and warranties made by Telenav to V99 and representations and warranties made by V99 and Merger Sub, jointly and severally, to Telenav. The assertions embodied in those representations and warranties were made solely for purposes of the Merger Agreement, were made only as of specific dates and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Merger Agreement. The assertions embodied in Telenav’s representations and warranties are qualified by information contained in a confidential disclosure letter that Telenav provided to V99 and Merger Sub in connection with the Merger Agreement, were made for the purpose of allocating contractual risk between the parties instead of establishing matters of facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors or security holders. Additionally, certain of the assertions embodied in Telenav’s representations and warranties are qualified by information disclosed in documents publicly filed Telenav with the SEC. Accordingly, Telenav stockholders and other investors should not rely on representations and warranties as characterizations of the actual state of facts or circumstances. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be reflected in the Telenav’s public disclosures. For the foregoing reasons, you should not rely on the representations and warranties contained in the Merger Agreement as statements of fact. This description of the representations and warranties is included to provide Telenav stockholders with information regarding the terms of the Merger Agreement. The representations and warranties in the Merger Agreement and the description of them in this proxy statement should be read in conjunction with the other information contained in the reports, statements and filings the parties publicly file with the SEC. See the section of this proxy statement captioned “Where You Can Find More Information.”

In the Merger Agreement, Telenav, V99 and Merger Sub made a number of representations and warranties to each other. The parties each made representations and warranties relating to, among other things:

 

   

due organization, valid existence, good standing, qualification, and corporate power to carry on their businesses as conducted;

 

   

the parties’ capitalization;

 

   

corporate power and authority, subject to the receipt of the requisite stockholder approvals, to execute, deliver and perform such party’s obligations under the Merger Agreement and to consummate the transactions contemplated thereby;

 

   

the absence of any violation of or conflict with such party’s organizational documents, material contracts or applicable laws, rulings or regulations as a result of entering into the Merger Agreement and consummating the Merger;

 

   

the absence of consents, approvals or authorizations of, or registration, filing with or notice to governmental entities, subject to certain exceptions, including this proxy statement and a Schedule 13E-3, such filings and reports as may be required under the federal securities laws, compliance with any applicable foreign or states securities or “blue sky” laws, the filing of the certificate of merger with the Delaware Secretary of State, the HSR filing required under the HSR Act, and any required NASDAQ filings or approvals;

 

   

this proxy statement, a Schedule 13E-3 and the accuracy of information contained herein and therein;

 

88


Table of Contents
   

the absence of undisclosed brokers’ and financial advisors’ fees related to the Merger; and

 

   

the absence of litigation or legal proceedings.

In addition to the foregoing, the Merger Agreement contains representations and warranties made by Telenav to V99 and Merger Sub, including regarding:

 

   

the Telenav Board’s (unanimously, among those independent and disinterested directors voting and acting on the recommendation of the Special Committee) approval of the Merger Agreement and its resolution to recommend that Telenav stockholders adopt the Merger Agreement and approve the Merger;

 

   

receipt by the Special Committee of a fairness opinion from B. Riley;

 

   

Telenav’s subsidiaries;

 

   

required third-party consents and approvals related to the Merger;

 

   

documents filed by Telenav with the SEC since July 1, 2018 and Telenav’s financial statements;

 

   

disclosure controls and internal control over financial reporting;

 

   

the absence of undisclosed liabilities;

 

   

the absence, since June 30, 2020, of any change, circumstance, development or event that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (as defined below) on Telenav;

 

   

the absence of any action or omission since June 30, 2020, that would constitute a breach of certain interim operating covenants of Telenav if such actions were taken following the execution of the Merger Agreement;

 

   

compliance with applicable laws and possession of permits, licenses and authorizations of any governmental entity owned, leased or used in the operation of the business;

 

   

employment, benefits and labor matters;

 

   

required stockholder approvals;

 

   

compliance with environmental laws and regulations and other environmental matters;

 

   

tax matters;

 

   

matters with respect to material contracts;

 

   

insurance matters;

 

   

matters related to property, leases and assets;

 

   

intellectual property matters;

 

   

the inapplicability of certain state takeover statutes to the Merger; and

 

   

information technology matters.

In addition to the foregoing, the Merger Agreement contains representations and warranties made by V99 to Telenav, including regarding:

 

   

Merger Sub’s operations;

 

   

that no Purchaser Party, or any other member of the Purchaser Group, became an interested stockholder (as such term is defined in Section 203 of the DGCL) of Telenav at any time during the three years prior to the date of the Merger Agreement;

 

89


Table of Contents
   

absence of a shareholder vote of V99 to approve the Merger Agreement;

 

   

the absence of any arrangement between any member of the Purchaser Group and any of their affiliates, on the one hand, and any beneficial owner of Common Stock, or any member of the Telenav Board or management (other than a member of the Purchaser Group) relating to Common Stock, the transactions contemplated by the Merger Agreement or the ownership or operations of Telenav after the Effective Time;

 

   

the absence of any discussions between any member of the Purchaser Group and any of their affiliates, on the one hand, and any director, officer or employee of Telenav on the other hand (other than a member of the Purchaser Group) relating to retention, severance or other compensation or incentive benefits, any equity rollover or equity or other investment in Telenav, or any directorship or employment arrangement with Telenav or any affiliate of Telenav or any parent company following the Merger;

 

   

the solvency of the Purchaser Parties;

 

   

V99’s bank account;

 

   

V99’s financing arrangements;

 

   

acknowledging that the Purchaser Parties have conducted their own investigation of Telenav and its subsidiaries, and that the Purchaser Parties have relied solely upon such investigation in entering into the Merger Agreement;

 

   

acknowledging that any estimates, projections or forecasts provided by Telenav to the members of the Purchaser Group contain uncertainties and that the Purchaser Parties are fully responsible for making their own evaluation of the adequacy and accuracy of such materials, and that no Purchaser Party is relying on any such materials or the accuracy thereof, and that the Purchaser Parties will not, and will cause their affiliates and representatives not to, hold any person liable with respect thereto; and

 

   

acknowledging the absence of other representations and warranties from Telenav outside of the representations and warranties contained in the article IV of the Merger Agreement.

A “Material Adverse Effect” is defined with respect to Telenav as any effect, event, fact, development, occurrence, circumstance, condition or change that, individually or in the aggregate, (A) has had or would reasonably be expected to have a material adverse effect on the business, financial conditions, results of operations or assets of the of Telenav and its subsidiaries, taken as a whole, or (B) the ability of Telenav to consummate the Merger or comply with its obligations under this Agreement.

The definition of Material Adverse Effect in clause (A) immediately above excludes any effect to the extent resulting from:

 

   

any change or prospective change in the market price or trading volume of the Telenav’s Common Stock or the credit ratings of Telenav (but not any effect underlying such change to the extent that such effect would otherwise constitute a Material Adverse Effect);

 

   

general economic conditions in the United States or any other country or region in the world (or changes in such conditions) or conditions in the global economy generally (or changes in such conditions);

 

   

changes in conditions in the financial markets, credit markets or capital markets in the United States or any other country or region in the world, including (A) changes in interest rates or credit ratings in the United States or any other country; (B) changes in exchange rates for the currencies of any country; or (C) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market operating in the United States or any other country or region in the world;

 

90


Table of Contents
   

changes in applicable laws (or any interpretation or enforcement thereof) that are binding on any of Telenav or any of its subsidiaries;

 

   

changes in GAAP or regulatory accounting requirements (or any interpretation or enforcement thereof);

 

   

geopolitical conditions (or changes in such conditions) or acts of war, outbreak of hostilities, sabotage, military actions, terrorism, civil unrest, protests, or riots (including any escalation or general worsening of any such acts of war, outbreak of hostilities, sabotage, military actions, terrorism, civil unrest, protests, or riots) in the United States or any other country or region in the world;

 

   

changes in regulatory, legislative or political conditions in the United States or any other country or region in the world;

 

   

the existence, occurrence or continuation of any force majeure event, including any earthquakes, floods, mudslides, hurricanes, tropical storms, nuclear incidents, pandemics, epidemics, or disease outbreaks (including COVID-19), quarantine restrictions, severe weather conditions, tsunamis, tornados, volcanic eruptions, fires or other natural disasters in the United States or any other country or region in the world (including any quarantine, shelter-in-place, stay-at-home or any other law, order, directive, guideline or recommendation by any governmental entity in connection with or in response to COVID-19 (each, a “COVID-19 measure”);

 

   

changes in conditions generally affecting the principal industry in which Telenav or its subsidiaries operate;

 

   

any failure by Telenav to meet any analysts’ estimates or expectations of Telenav’s revenue, earnings or other financial performance or results of operations for any period, or any failure by Telenav or its subsidiaries to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that the effects giving rise to or contributing to such failures may constitute, or be taken into account in determining whether there has been or will be, a Material Adverse Effect);

 

   

matters disclosed on a specified section of the disclosure letter provided by Telenav to V99; or

 

   

the execution and delivery of the Merger Agreement and compliance by Telenav with the terms of, or any action taken or not taken by any of Telenav or its subsidiaries that is expressly required by, the Merger Agreement, or any action taken or not taken by or at the written request of a Purchaser Party, or the public announcement of the Merger Agreement or the Merger, departures of officers or employees, changes in relationships with suppliers or customers or other business relations, in each case only to the extent resulting from the execution and delivery of the Merger Agreement and the Merger.

The exclusions described in the second through ninth bullet above in the immediately preceding list require that the impact of such effect is not disproportionately adverse to Telenav and its subsidiaries, taken as a whole, as compared to other companies of a similar size in the industries in which Telenav and its subsidiaries operate (in which case, only the incremental disproportionate adverse impact may be taken into account in determining whether there has occurred a Material Adverse Effect).

The definition of Material Adverse Effect in clause (B) above excludes any effect resulting from the execution and delivery of the Merger Agreement and compliance by Telenav with the terms of, or any action taken or not taken by any of Telenav or its subsidiaries that is expressly required by, the Merger Agreement, or any action taken or not taken by or at the written request of a Purchaser Party, or the public announcement of the Merger Agreement or the Merger, departures of officers or employees, changes in relationships with suppliers or customers or other business relations, in each case only to the extent resulting from the execution and delivery of the Merger Agreement and the Merger.

A “Parent Material Adverse Effect” means any effect that, individually or in the aggregate, prevents or materially impedes, or materially delays or would reasonably be expected to prevent or materially impede, or

 

91


Table of Contents

materially delay (i) the consummation by the Purchaser Parties of the Merger or (ii) the compliance by each of the Purchaser Parties of each of their respective obligations under the Merger Agreement in any material respect.

Conduct of Business Pending the Merger

From the date of the Merger Agreement until the closing, or the date, if any, on which the Merger Agreement is terminated, except (i) as consented to in writing in advance by V99 (which consent may not be unreasonably withheld, conditioned or delayed), (ii) for any actions required to comply with any COVID-19 measure, (iii) as may be required by law, (iv) as required or specifically contemplated by the Merger Agreement, (v) confidential disclosure letter that Telenav provided to V99 and Merger Sub in connection with the Merger Agreement, or (vi) for such actions or omissions taken by or at the direction of any member of the Purchaser Group, Telenav has agreed to ensure that the business of Telenav and its subsidiaries will be conducted in the ordinary course in accordance with past practices and in compliance with laws.

In addition, during such period, (i) as consented to in writing in advance by V99 (which consent may not be unreasonably withheld, conditioned or delayed), (ii) for any actions required to comply with any COVID-19 measure, (iii) as may be required by law, (iv) as required or specifically contemplated by the Merger Agreement, (v) confidential disclosure letter that Telenav provided to V99 and Merger Sub in connection with the Merger Agreement, or (vi) for such actions or omissions taken by or at the direction of any member of the Purchaser Group, neither Telenav nor any of its subsidiaries will:

 

   

offer, issue, deliver, sell, grant, dispose of, pledge or otherwise encumber (other than encumbrances that are permitted by the terms of the Merger Agreement), or authorize or propose the offering, issuance, delivery, sale, grant, disposition, or encumbrance (other than encumbrances that are permitted by the terms of the Merger Agreement) of (i) any shares of capital stock of any class or any other ownership interest of any of Telenav or its subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or any other ownership interest of any of Telenav or its subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any other ownership interest of Telenav or its subsidiaries or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or any other ownership interest of Telenav or its subsidiaries (collectively, the “Equity Interests”) or (ii) any other securities of Telenav or its subsidiaries in respect of, in lieu of, or in substitution for, Common Stock outstanding on the date of the Merger Agreement, other than, with respect to each of clauses (i) and (ii), (A) the issuance of or sales of Common Stock pursuant to the ESPP or pursuant to a Telenav benefits plan in effect as of the date of the Merger Agreement in accordance with its terms, (B) grants of Telenav Options or RSUs covering up to 50,000 shares of Common Stock and made in the ordinary course of business in accordance with past practices, and the issuance of or sales of Common Stock in settlement of such Telenav Options or RSUs in accordance with their terms, or (C) in connection with the settlement of Telenav Options or RSUs pursuant to the terms of award agreements in effect as of the date of the Merger Agreement, or as contemplated by the sixth bullet point in this list below;

 

   

redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any outstanding shares of capital stock or other securities of Telenav or its subsidiaries, except (i) in order to satisfy tax obligations with respect to awards granted under the applicable Telenav equity plan or the exercise price of Telenav Options, in accordance with the terms and conditions of the applicable Telenav equity plan or award agreement governing the applicable award, (ii) upon forfeiture of any awards granted under any applicable Telenav equity plan or ESPP by the holder thereof, (iii) transactions between Telenav or any of its subsidiaries, or (iv) in connection with contracts in effect as of the date of the Merger Agreement or entered into in compliance with the terms of the Merger Agreement;

 

92


Table of Contents
   

split, combine, subdivide or reclassify any capital stock or other Equity Interests of Telenav or its subsidiaries or declare, accrue, set aside for payment or pay any dividend in respect of any outstanding capital stock or other Equity Interests of Telenav or its subsidiaries or otherwise make any payments to any such holders in their capacity as such (other than dividends and distributions by a subsidiary of Telenav to its parent and distributions resulting from the vesting, exercise or settlement (as applicable) of Telenav Options or RSUs or under the ESPP);

 

   

acquire, sell, transfer, encumber or dispose of, or agree to acquire, sell, transfer, encumber or dispose of, any material assets or properties owned by Telenav or its subsidiaries, except (i) in connection with contracts in effect as of the date of this Merger Agreement or entered into in compliance with the terms of the Merger Agreement, (ii) any intellectual property abandoned or permitted to lapse in accordance with Telenav’s reasonable business judgment, (iii) encumbrances permitted by the terms of the Merger Agreement or (iv) otherwise in the ordinary course of business (including sales of products of Telenav or its subsidiaries, and ordinary course disposals of inventory or used equipment);

 

   

(i) incur, create, issue or assume any indebtedness or guarantee or otherwise become liable for any indebtedness (including increasing the indebtedness under contracts in existence as of the date of the Merger Agreement) in excess of $50,000; or (ii) make any loans, advances or capital contributions to, or investments in, any other person or entity in excess of $50,000, other than (A) to Telenav or any wholly-owned subsidiary of Telenav, (B) trade payables and extensions of credit in the ordinary course of business, and (C) advances to employees, in each case in the ordinary course of business consistent with past practice;

 

   

except as may be required to the terms of a Telenav compensatory or benefit plan, agreement or arrangement, or as otherwise required by law, (A) increase the compensation or other benefits payable or to become payable to current or former employees, directors or officers of Telenav or its subsidiaries, other than in the ordinary course of business consistent with past practice and in an amount not to exceed $1,000,000 in the aggregate for all such individuals, (B) grant any rights to severance or termination pay or other termination benefit, or enter into or amend any employment or severance agreement with, any current or former employees, directors, or officers of Telenav or its subsidiaries, (C) enter into any consulting, bonus, retention, retirement or similar agreement with any employee, officer or director of Telenav (including any change to performance targets associated therewith), (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former employees, directors or officers or any of their beneficiaries, except, in each case, such action with respect to current or former employees that would not result in an increase to Telenav in the cost of maintaining such collective bargaining agreement, plan, trust, fund, policy or arrangement; (E) amend or adopt any material benefit plans (other than (i) any such adoption or amendment that is not material to and does not materially increase the cost to Telenav of maintaining such material benefits plan, (ii) as required pursuant to the terms of such material Telenav compensatory or benefit plan, agreement or arrangement, or (iii) at-will offer letters with new-hire employees entered into in the ordinary course of business consistent with past practice that do not provide for any severance or change-in-control benefits)); (F) amend or adopt any of Telenav’s equity plans; (G) accelerate the vesting, exercisability or payment of (or waive any performance conditions with respect to), any compensation or benefit (including any equity-based awards), except as otherwise expressly set forth in the Merger Agreement; or (H) grant any additional awards under any applicable Telenav equity plan;

 

   

terminate, materially modify, assign or materially amend, or waive or assign any material rights under, any material contract, except in the ordinary course of business or for renewals, expirations or terminations in accordance with the terms of any material contract;

 

   

change any of Telenav’s accounting principles, practices or methods unless required by law or GAAP, including Regulation S-X under the Exchange Act;

 

93


Table of Contents
   

amend or permit the adoption of any amendment to the organizational documents of Telenav or to the charter or other organizational documents of any of its subsidiaries, or form any subsidiary;

 

   

acquire any equity interest or other interest in any other person or entity or effect or become a party to any Merger, consolidation, plan of arrangement, share exchange, business combination, amalgamation, recapitalization, reclassification of shares, stock split, reverse stock split, issuance of bonus shares, division or subdivision of shares, consolidation of shares or similar transaction;

 

   

authorize or make any commitment with respect to any material capital expenditure greater than $100,000 that is not budgeted in Telenav’s current plan approved by the Telenav Board as of the date of the Merger Agreement;

 

   

(i) make, revoke or change any material tax election, (ii) adopt or change any method of tax accounting, (iii) file any amended tax return, (iv) enter into any tax allocation agreement, tax sharing agreement or tax indemnity agreement or similar contract relating to any tax (other than contracts entered in the ordinary course of business consistent with past practices the primary purpose of which is not tax), (v) surrender the right to claim a tax refund, (vi) settle or compromise any claim, notice, assessment or legal proceeding in respect of any tax, (vii) consent to any waiver of the statute of limitations period applicable to any material tax claim or assessment, (viii) request any tax ruling, (ix) fail to pay any material tax when due and payable, (x) incur any material taxes outside of the ordinary course of business, or (xi) prepare and file any income or other material tax return in a manner which is not consistent with the past custom and practice with respect to the preparation of such tax return;

 

   

commence any legal proceeding, except (A) as required with respect to continuation of legal proceedings previously commenced and routine collection matters and other matters in the ordinary course of business consistent with past practices, (B) legal proceedings to enforce the terms of the Merger Agreement, (C) as required to perfect or protect material rights of Telenav or its subsidiaries or (D) legal proceedings in connection with the Merger Agreement and the Merger;

 

   

subject to section 6.12 of the Merger Agreement, waive, release, assign, settle or compromise or offer or propose to waive, release, assign, settle or compromise any material legal proceeding;

 

   

take affirmative action to extend, renew or enter into any contracts containing noncompete or exclusivity provisions that (A) would restrict or limit, in any material respect, the operations of Telenav or its subsidiaries and (B) apply to any current or future affiliates of Telenav, the Surviving Corporation or V99;

 

   

authorize, recommend, propose, enter into, adopt a plan or announce an intention to adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, merger (other than the Merger), consolidation or other reorganization (other than reorganizations involving only wholly owned subsidiaries of Telenav which would not result in a material increase in the tax liability of Telenav or its subsidiaries); or

 

   

enter into any contract to do any of the foregoing.

The “Go-Shop” Period; Solicitation of Other Offers

In the Merger Agreement, from November 2, 2020 until the No-Shop Period Start Date, Telenav and its subsidiaries and their respective representatives had the right to, (1) initiate, solicit, facilitate and encourage any inquiry or the making of any proposal or offer that constitutes, or could reasonably be expected to constitute or lead to an Acquisition Proposal, including by providing information (including nonpublic information and data) regarding, and affording access to the business, properties, assets, books, records and personnel of, Telenav and its subsidiaries to any person (and its representatives, including potential financing sources) subject to the entry into, and in accordance with, an Acceptable Confidentiality Agreement; provided that Telenav makes available to the Purchaser Parties any nonpublic information or data concerning Telenav or its subsidiaries that Telenav has

 

94


Table of Contents

provided to any person given such access that was not previously made available to the Purchaser Parties, and (2) engage in, enter into or otherwise participate in any discussions or negotiations with any persons (and their respective representatives, including potential financing sources) with respect to any Acquisition Proposals (or inquiries, proposals or offers or other efforts that constitute or could reasonably be expected to constitute or lead to an Acquisition Proposal, including any person that has informed Telenav or its representatives of an intention to make or has publicly announced an intention to make an Acquisition Proposal) and cooperate with or assist or participate in or facilitate or encourage any such inquiries, proposals, offers, discussions or negotiations or any effort or attempt to make any Acquisition Proposals, including granting a waiver, amendment or release under any confidentiality or pre-existing standstill or similar provision with respect to the Telenav and its subsidiaries. No later than 48 hours after the No-Shop Period Start Date, Telenav must notify V99 in writing of the number of parties that submitted an Acquisition Proposal prior to the No-Shop Period Start Date, which notice shall include a summary of all material terms of any pending Acquisition Proposals that were made in writing by any Excluded Party or any other Acquisition Proposal which the Telenav Board or any Independent Committee determined in good faith, after consultation with its financial advisor and outside legal counsel, warranted the Telenav Board’s or any Independent Committee’s further discussion.

For purposes of this proxy statement and the Merger Agreement:

 

   

“Acceptable Confidentiality Agreement” means an executed confidentiality agreement (including any confidentiality agreement entered into prior to the date of the Merger Agreement together with any amendment thereto), containing terms determined in good faith by any Independent Committee or its representatives to be appropriate for transactions of the nature contemplated by an Acquisition Proposal; provided, for the avoidance of doubt, that an Acceptable Confidentiality Agreement need not prohibit the making or amendment of an Acquisition Proposal or otherwise prohibit compliance by Telenav with any of the applicable nonsolicitation provisions of the Merger Agreement. Notwithstanding the foregoing, an “Acceptable Confidentiality Agreement” need not contain any “standstill” or other similar provisions.

 

   

“Acquisition Proposal” means other than the Merger, any offer or proposal of any third party relating to (i) any acquisition or purchase, direct or indirect, of assets equal to 15% or more of the consolidated assets of Telenav or its subsidiaries or to which 15% or more of the consolidated revenues or earnings of Telenav or its subsidiaries are attributable or 15% or more of the total voting power of the equity securities of Telenav; (ii) any tender offer or exchange offer that, if consummated, would result in such third party beneficially owning 15% or more of the total voting power of the equity securities of Telenav; (iii) a Merger, consolidation, statutory share exchange, business combination, sale of assets, liquidation, dissolution or other similar extraordinary transaction involving any of Telenav or its subsidiaries whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of Telenav or its subsidiaries or to which 15% or more of the consolidated revenues or earnings of Telenav or its subsidiaries are attributable; or (iv) any combination of the foregoing.

 

   

“Excluded Party” means any person or group of persons from whom Telenav, the Telenav Board (or any Independent Committee) or any of their respective representatives has received a bona fide written Acquisition Proposal prior to the No-Shop Period Start Date that the Telenav Board (or any Independent Committee) determines in good faith (such determination to be made no later than three (3) business days after the No-Shop Period Start Date and after consultation with its financial advisor and outside legal counsel), constitutes or is reasonably likely to constitute or lead to a Superior Proposal; provided that any person shall immediately and irrevocably cease to be an Excluded Party (and the provisions of the Merger Agreement applicable to excluded parties shall cease to apply with respect to such person) if the Acquisition Proposal submitted by such person is withdrawn or terminated (it being understood that a modification of an Acquisition Proposal submitted by such person or group of persons shall not, in and of itself, be deemed to be a withdrawal or termination of an Acquisition Proposal submitted by such person or group of persons).

 

95


Table of Contents
   

“Independent Committee” means the Special Committee and, solely if the Special Committee no longer exists, any other committee of the Telenav Board composed solely of disinterested and independent directors who are (i) unaffiliated with the Purchaser Group and (ii) appointed by the Telenav Board (including by directors constituting at least a majority of the Unaffiliated Directors (as defined below)).

 

   

“Unaffiliated Directors” means a member of the Telenav Board who is not an employee of any of Telenav or its subsidiaries and who is (a) independent from the Purchaser Group, (b) not an affiliate (including an employee, director or officer) of any member of the Purchaser Group, and (c) has not received any material consideration from any member of the Purchaser Group or entered into any agreement, arrangement or understanding (whether written or oral) to receive any material consideration from any member of the Purchaser Group.

No Solicitation; Recommendations of the Merger

In the Merger Agreement, Telenav has agreed that, except as it may relate to an Excluded Party, and except for actions or omissions taken at the direction of a Purchaser Party, from the No-Shop Period Start Date until the Effective Time, neither Telenav nor its subsidiaries shall, and Telenav and its subsidiaries shall instruct their respective representatives not to, directly or indirectly:

 

   

solicit or initiate, or knowingly facilitate or knowingly encourage the submission of any Acquisition Proposal;

 

   

furnish any nonpublic information regarding or afford access to the properties, books or records of Telenav or its subsidiaries to any person for the purpose of knowingly facilitating or knowingly encouraging an Acquisition Proposal;

 

   

engage in discussions or negotiations with any person for the purpose of knowingly facilitating or knowingly encouraging any Acquisition Proposal;

 

   

approve, endorse, recommend or enter into any agreement in principle, letter of intent, Merger Agreement, acquisition agreement or other similar agreement relating to any Acquisition Proposal (other than an Acceptable Confidentiality Agreement entered into in accordance with the terms of the Merger Agreement); or

 

   

resolve to propose, agree or publicly announce an intention to do any of the foregoing.

Telenav agreed further that it would, and it would cause each of its subsidiaries and its and their respective representatives to cease, any solicitations, discussions or negotiations with any person (other than the Purchaser Parties and their respective representatives) in connection with any Acquisition Proposal, provided that Telenav and its subsidiaries and their respective representatives could, until the receipt of the requisite stockholder approval of the Merger, continue to engage in the permitted activities with respect to excluded parties (described in the immediately preceding section captioned “—The ‘Go-Shop’ Period; Solicitation of Other Offers”) so long as such Excluded Party remained an Excluded Party, including with respect to any amended Acquisition Proposal submitted by an Excluded Party following the No-Shop Period Start Date if such Excluded Party’s Acquisition Proposal had not been withdrawn or terminated at any time prior to the submission of such amendment.

Telenav also agreed that, except as it relates to an Excluded Party, (1) Telenav would within three (3) business days of the No-Shop Period Start Date request each person that executed a confidentiality agreement in connection with its consideration of a potential transaction involving the acquisition of Telenav return or destroy all confidential information furnished to such person, and (2) Telenav would within 48 hours of the No-Shop Period Start Date notify Parent in writing of the receipt of any Acquisition Proposal (or any inquiry that could reasonably be expected to lead to an Acquisition Proposal) after the No-Shop Period Start Date, which notice must include a copy of any such Acquisition Proposal made in writing and any other written terms and proposals provided (including financing commitments) to Telenav and its representatives and a written summary

 

96


Table of Contents

of material terms and conditions of any such Acquisition Proposal not made in writing. Telenav agreed to keep V99 reasonably informed of the status and material terms of any such Acquisition Proposal including any material changes in respect thereof and the material terms thereof. Telenav further agreed that it would not enter into any agreement with any person that prohibited Telenav from providing any information or materials to V99 in accordance with the terms of the Merger Agreement.

Telenav is permitted under the Merger Agreement to grant a waiver, amendment or release under any confidentiality or standstill agreement to allow for an Acquisition Proposal to be made to Telenav or the Telenav Board or any Independent Committee so long as Telenav notifies V99 within 48 hours after granting any such waiver, amendment or release.

At any time following the date of the Merger Agreement and prior to obtaining stockholder approval and Two-Thirds of the Minority Approval, Telenav may furnish nonpublic information regarding Telenav and its subsidiaries to, afford access to, and engage in discussions or negotiations with, any person or group of persons in response to an Acquisition Proposal submitted to Telenav, the Telenav Board or any Independent Committee by such person or group after the No-Shop Period Start Date if:

 

   

the Telenav Board or any Independent Committee concludes in good faith, after consultation with its financial advisor and outside legal counsel, that such Acquisition Proposal constitutes or is reasonably likely to constitute or lead to a Superior Proposal;

 

   

such Acquisition Proposal did not arise from a material breach of Telenav’s nonsolicitation obligations in the Merger Agreement (other than any such breach caused by any member of the Purchaser Group);

 

   

the Telenav Board or any Independent Committee determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law;

 

   

(x) prior to furnishing nonpublic information regarding Telenav or its subsidiaries, Telenav receives from such person or group of persons an executed Acceptable Confidentiality Agreement and (y) subsequent to entering into discussions with such person or group of persons, Telenav gives V99 written notice setting forth the identity of such person or group of persons and the Telenav’s intention to furnish nonpublic information to, or enter into discussions with, such person or group of persons; and

 

   

concurrently with furnishing any such material nonpublic information to such person or group of persons, Telenav furnishes such nonpublic information to V99 (to the extent such nonpublic information has not been previously furnished or made available by Telenav to any Purchaser Party); provided that, notwithstanding the foregoing, following the receipt of an Acquisition Proposal that did not arise from a material breach of Telenav’s nonsolicitation obligations in the Merger Agreement (other than any such breach caused by any member of the Purchaser Group), the Telenav Board or any Independent Committee may contact the person or group of persons who has made such Acquisition Proposal solely to clarify and understand the terms and conditions thereof.

In the Merger Agreement, Telenav has also agreed that neither Telenav, nor the Telenav Board nor any committee thereof will:

 

   

withhold, withdraw, amend, qualify or modify, in a manner adverse to the Purchaser Parties, the recommendation that Telenav stockholders approve the Merger Agreement Proposal;

 

   

adopt, approve or recommend any Acquisition Proposal;

 

   

fail to include a recommendation that Telenav stockholders approve the Merger Agreement Proposal in this proxy statement or fail to recommend against any Acquisition Proposal subject to Regulation 14D under the Exchange Act in any solicitation or recommendation statement on Schedule 14D-9 as promptly as practicable after the commencement of such Acquisition Proposal (but in any event within ten (10) business days following such commencement);

 

97


Table of Contents
   

following receipt of an Acquisition Proposal, fail to reaffirm its approval or recommendation of the Merger Agreement and the Merger within ten (10) business days after receipt of any reasonable request to do so from V99; or

 

   

resolve or agree to take any of the foregoing actions (any of the actions or events described in this bullet point or any of the foregoing four bullet points, a “Change in Recommendation”).

However, at any time prior to obtaining the Company Stockholder Approval or Two-Thirds of the Minority Approval, the Telenav Board or any Independent Committee may make a Change in Recommendation if:

 

   

in response to an Intervening Event, the Telenav Board or any Independent Committee determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law; or

 

   

in response to an Acquisition Proposal that did not arise from a material breach of Telenav’s nonsolicitation obligations in the Merger Agreement (other than any such breach caused by any member of the Purchaser Group) and that has not been previously withdrawn or terminated, the Telenav Board or any Independent Committee determines in good faith, after consultation with its financial advisor and outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal and that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable Law.

The Merger Agreement provides that Telenav can make such Change in Recommendation only if:

 

   

the Telenav Board or any Independent Committee has notified V99 in writing of its intent to take such action (any such notice, a “Change in Recommendation Notice”), which notice shall be provided at least four business days in advance of such action, and, if delivered in connection with (A) a Superior Proposal, such Change in Recommendation Notice shall include the material terms and conditions of the Superior Proposal and a copy of the available proposed transaction agreement to be entered into in respect of such Superior Proposal) or (B) an Intervening Event, such Change in Recommendation Notice contains a reasonably detailed description of the material details of such Intervening Event;

 

   

if requested by V99, Telenav will, and will cause its representatives to, following receipt by V99 of the Change in Recommendation Notice and a period of four (4) business days in advance of making a change of recommendation (such time period, the “Notice Period”), negotiate with V99 and its representatives in good faith to permit V99 to propose amendments to the terms and conditions of the Merger Agreement (a “V99 Proposal”);

 

   

following the Notice Period, and taking into account any received V99 Proposal, the Telenav Board or any Independent Committee must have considered in good faith such V99 Proposal, if any, and must have determined that the Superior Proposal would continue to constitute a Superior Proposal or, in respect of such Intervening Event, the failure to make a Change in Recommendation with respect to such Intervening Event would be reasonably likely to be inconsistent with its fiduciary duties under applicable law, if the revisions proposed in such V99 Proposal, if any, were to be given effect; and

 

   

such Superior Proposal did not arise from a material breach of Telenav’s nonsolicitation obligations in the Merger Agreement (other than any such breach caused by any member of the Purchaser Group).

Telenav further agreed that, in connection with a Change in Recommendation Notice delivered in connection with an Acquisition Proposal that is determined to be a Superior Proposal, each successive material modification to the financial terms or other material terms or conditions (including the provision of financing) of such Acquisition Proposal would be deemed to constitute a new Acquisition Proposal and trigger a new obligation (taking into account any changes offered and agreed to in writing by V99 during the Notice Period), except that such Change in Recommendation Notice need only be delivered two business days in advance of any Change in Recommendation (during which time, if V99 requests, Telenav will, and will cause its representatives to, negotiate with V99 and its representatives in good faith).

 

98


Table of Contents

For purposes of this proxy statement and the Merger Agreement:

 

   

The term “Intervening Event” means any material effect with respect to Telenav and its subsidiaries taken as a whole that (A) was not, as of the date of the Merger Agreement, known to or reasonably foreseeable to the Telenav Board or the Special Committee or if known to, or reasonably foreseeable to the Telenav Board or the Special Committee as of the date of the Merger Agreement, the material consequences of which were not known and reasonably foreseeable to the Telenav Board or the Special Committee as of the date of the Merger Agreement and (B) becomes known to or by the Telenav Board or the Special Committee prior to the receipt of the later of the Company Stockholder Approval and the Two-Thirds of the Minority Approval; provided, however, that in no event shall the following alone constitute an Intervening Event: (i) the receipt, existence or terms of any Acquisition Proposal or any matter relating thereto; (ii) any change in the price, or change in trading volume, of the Common Stock or the fact that Telenav meets or exceeds internal or published projections, budgets, forecasts or estimates of revenues, earnings or other financial results for any period (provided, however, that the underlying causes giving rise to or contributing to such change or fact may be taken into account in determining whether an Intervening Event has occurred); or (iii) any matters generally affecting the industry in which Telenav operates as a whole that have not had or would not reasonably be expected to have a disproportionate effect on Telenav or its subsidiaries.

 

   

The term “Superior Proposal” means a bona fide written Acquisition Proposal which did not arise from a material breach of Telenav’s nonsolicitation obligations in the Merger Agreement (with all references to “15%” in the definition of Acquisition Proposal increased to “50%”) that the Telenav Board or any Independent Committee determines in good faith, after consultation with its financial advisor and outside legal counsel, to be more favorable from a financial point of view to the holders of shares not beneficially owned by members of the Purchaser Group than the transactions contemplated hereby (including the Merger), in each case taking into account all financial considerations, the identity of the third party making such Superior Proposal, all legal and regulatory (including antitrust and CFIUS) considerations, the anticipated likelihood, timing and conditions thereof (including any financing condition or the reliability of any debt or equity funding commitments, any break-up fee, expense reimbursement provisions and conditions to consummation) and after taking into account any changes to the Merger Agreement proposed by V99 in connection with the exercise of its rights in response to such Superior Proposal pursuant to the terms of the Merger Agreement described above, and all other factors and matters that the Telenav Board or any Independent Committee determines in good faith to be relevant.

Reasonable Best Efforts; Other Agreements

Reasonable Best Efforts

Telenav and V99 agreed to use their reasonable best efforts to, among other things, (i) take, or cause to be taken, all actions and to do, or to cause to be done, and to assist and cooperate with the other parties to the Merger Agreement in doing all things necessary, proper or advisable under applicable law or otherwise to consummate and make effective the Merger, (ii) obtain from any governmental entity any actions, nonactions, clearances, waivers, consents, approvals, permits or orders required to be obtained by Telenav and V99 or any of their respective subsidiaries in connection with the authorization, execution, delivery and performance of the Merger Agreement and the consummation of the Merger, (iii) make all registrations, filings, notifications or submissions which are necessary or advisable, and thereafter make any other required submissions, with respect to the Merger Agreement and the Merger required under (a) any applicable federal or state securities laws and (b) any other applicable law, and (iv) avoid the entry of, or have vacated or terminated, any decree, order, or judgment that would restrain, prevent or delay the consummation of the Merger, including defending any lawsuits or other legal proceedings, whether judicial or administrative, challenging the Merger Agreement or the consummation of the Merger. V99’s obligations to use reasonable best efforts include, solely to the extent that any of the following actions are not material to the business, financial condition, results of operations of assets of

 

99


Table of Contents

Telenav or its subsidiaries, taken as a whole, (i) proposing, negotiating, committing to or effecting, by consent decree, hold separate order, or otherwise, the sale, transfer, license, divestiture or other disposition of, or any prohibition or limitation on the ownership (including conduct or behavioral remedies or covenants), operation, effective control or exercise of full rights of ownership of, any of the businesses, product lines or assets of V99 or any of its affiliates or of Telenav, and (ii) defending any judicial or administrative action or similar proceeding instituted (or threatened to be instituted) by any governmental entity or seeking to have any stay, restraining order, injunction or similar order entered by any governmental entity vacated, lifted, reversed, or overturned.

Preparation of Proxy Statement, Schedule 13E-3 and Other Filings

Under the Merger Agreement, Telenav agreed to prepare and file this proxy statement with the SEC, and to prepare and file with V99 a Schedule 13E-3. Telenav agreed to reasonably cooperate with and allow V99 a reasonable opportunity to review and comment on the proxy statement, and Telenav and the Purchaser Parties agreed to cooperate and provide each other with a reasonable opportunity to review and comment on the Schedule 13E-3 and all responses to requests for additional information by and replies to comments of the SEC, prior to filing such with or sending such to the SEC. Telenav and the Purchaser Parties agreed to use their respective reasonable best efforts so that the proxy statement and the Schedule 13E-3 comply in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder, and to have the proxy statement and Schedule 13E-3 cleared by the SEC as promptly as reasonably practicable after such filing.

Telenav also agreed that it would use its reasonable best efforts to take all action required under the DGCL, its organizational documents and the rules of NASDAQ to hold a special meeting of stockholders for the purposes of obtaining the Company Stockholder Approval and the Two-Thirds of the Minority Approval required for the Merger as promptly as reasonably practicable after mailing of the of the proxy statement. Except in the case of a Change in Recommendation, Telenav agreed to use all reasonable efforts to solicit proxies in favor of the adoption of the Merger Agreement and approval of the Merger. However, Telenav is not required to convene and hold the special meeting at any time prior to the twentieth business day following the mailing of the proxy statement to Telenav stockholders.

V99 and Telenav have the right to review in advance any material communication (and consider the other party’s reasonable comments thereto) delivered to any governmental entity relating to the Merger or in connection with any legal proceeding by a private party relating thereto, consult in advance with and give the other party the opportunity to attend and participate in any meetings and conferences with any governmental entity relating to the Merger or in connection with any legal proceeding by a private party relating thereto (to the extent permitted by such governmental entity or private party), and keep the other party promptly (and in any event within three (3) days) informed in all material respects of any material communication received by such party from, or given by such party to, any governmental entity and of any material communication received or given in connection with any legal proceeding by a private party, in each case relating to the Merger, and if in writing, provide a copy of such material communication to the other party.

Other Agreements

The Merger Agreement contains certain other agreements, including agreements relating to access to information, confidentiality and publicity, Telenav’s and the Purchaser Parties’ and their respective board of director’s obligations with respect to the application of takeover laws to Telenav, the Purchaser Parties or the Merger, notification obligations of Telenav upon the initiation of, or to the knowledge of Telenav, threatened, litigation regarding the Merger, the Merger Agreement or the transactions contemplated thereby, participant rights for V99 and consultation with V99 regarding the defense and settlement of any such litigation, the process of delisting the Common Stock from NASDAQ and deregistering the Common Stock under the Exchange Act, matters related to Section 16 of the Exchange Act and the rules and regulations thereunder, V99’s obligation to cause Merger Sub and the Surviving Corporation to perform their obligations under the Merger Agreement, and

 

100


Table of Contents

to ensure that prior to the Effective Time, Merger Sub does not conduct any business, make any investments or incur any indebtedness, V99’s obligation to execute a written consent approving the Merger in its capacity as sole stockholder of Merger Sub, and the parties’ respective agreements that the restrictions in the Merger Agreement are not intended to give the Purchaser Parties, on the one hand, or Telenav, on the other hand, directly or indirectly, the right to control or direct the business or operations of the other at any time prior to the Effective Time.

Indemnification and Insurance

Under the Merger Agreement, for six (6) years after the Effective Time, the Surviving Corporation will, and V99 will cause the Surviving Corporation to, indemnify and hold harmless all past and present directors and officers of Telenav and its subsidiaries (collectively, the “Indemnified Parties”) against any costs, expenses or damages (or other related items) in connection with actual or threatened claims, actions or investigations (or related matters) in respect of acts or omissions occurring or alleged to have occurred at or prior to the Effective Time (including acts or omissions occurring in connection with the approval of the Merger Agreement and the consummation of the Merger), to the fullest extent permitted by applicable law, the organizational documents of Telenav or its subsidiaries, or any indemnification, employment or other similar contracts by and between Telenav or its subsidiaries and an indemnified party.

For six (6) years after the Effective Time, V99 has agreed to cause the Surviving Corporation to provide that the organizational documents of the Surviving Corporation and its subsidiaries will contain provisions with respect to exculpation, indemnification and advancement of expenses at least as favorable as the exculpation, indemnification and advancement of expenses provisions set forth in the organizational documents of Telenav and its subsidiaries in effect immediately prior to the Effective Time, and the Surviving Corporation shall not, and V99 has agreed to cause its subsidiaries not to amend repeal or otherwise modify such exculpation, indemnification and advancement of expenses provisions, or similar provisions in any in any indemnification, employment or other similar contracts by and between Telenav and its subsidiaries and an indemnified party in effect immediately prior to the Effective Time, except as required by applicable law.

Telenav must obtain at or prior to the Effective Time, a “tail” insurance policy from an insurance carrier with the same or better credit rating as Telenav’s current directors’ and officers’ liability insurance carrier, with a claims period of six (6) years from the Effective Time with at least the same coverage and amounts, and containing terms, conditions and exclusions that are not less advantageous to the Indemnified Parties than Telenav’s current directors’ and officers’ liability insurance policies, in each case in respect of claims arising out of or relating to events which occurred before or at the Effective Time (including in connection with the transactions contemplated by the Merger Agreement); provided, however, that Telenav is not required to expend an annual premium for such coverage in excess of three hundred percent (300%) of the last annual premium paid by Telenav or any of its subsidiaries. If such “tail” policy has been established by Telenav, V99 has agreed not to terminate such policy and will cause all of Telenav’s obligations thereunder to be honored by V99, the Surviving Corporation and its subsidiaries.

Special Committee

Prior to the Effective Time, without the consent of the Special Committee, (i) the Telenav Board must not eliminate the Special Committee, or revoke or diminish its authority, (ii) none of the Purchaser Parties will, and each of the Purchaser Parties will cause each member of the Purchaser Group not to, remove or cause the removal of any director of the Telenav Board that is a member of the Special Committee either as a member of the Telenav Board or such Special Committee and (iii) each Purchaser Party will, and will cause each member of the Purchaser Group to, vote, or cause to be voted, all shares of Common Stock beneficially owned by any member of the Purchaser Group, or over which any member of the Purchaser Group has voting control, from time to time and at all times, in whatever manner necessary to ensure that at any annual or special meeting of the stockholders of Telenav at which an election of directors is held or pursuant to any written consent of the

 

101


Table of Contents

stockholders of Telenav, each director of the Telenav Board that is a member of the Special Committee shall be elected to the Telenav Board.

V99 Bank Account

V99 has agreed to maintain a cash balance in its bank account of an amount not less than $6,000,000, and V99 will not, and V99 will cause its representatives not to, transfer, distribute, or otherwise dispose of any cash to the extent that such transfer, distribution or dispositions would result in its bank account having a cash balance less than $6,000,000.

Purchaser Party Restrictions

V99 agreed that without the prior written consent of any Independent Committee, that no Purchaser Party will, and each Purchaser Party will use its reasonable best efforts to cause the other members of the Purchaser Group not to, (a) have any communications or discussions or enter into any agreements with any of Telenav’s or its subsidiaries’ directors, officers, employees or stockholders (i) that relate to the Merger, (ii) regarding any directorship, employment arrangement, consulting arrangement or similar association with the Surviving Corporation or any of its subsidiaries, affiliates or parent companies after the Effective Time, (iii) regarding any retention, severance or other compensation, incentives or benefits that may be or become payable to such individuals in connection with the Merger or following its consummation, (iv) pursuant to which any stockholder of Telenav would be entitled to receive consideration of a different amount or nature than the Merger Consideration, (v) pursuant to which any such individual would agree to provide, directly or indirectly, an equity investment, debt financing or similar transaction to the Purchaser Parties, the Surviving Corporation or any of their respective subsidiaries, affiliates or parent companies, or (vi) pursuant to which any stockholder of Telenav would agree to vote to approve the Merger Agreement or the Merger or against any Superior Proposal or (b) enter into or modify any contract which would prevent or materially impair the ability of any management member, director or stockholder of Telenav or any of its respective affiliates, with respect to any Acquisition Proposal Telenav may receive, from taking any of the actions that Telenav is permitted to take under the Merger Agreement with respect to such proposals.

Conditions to Completion of the Merger

The obligations of Telenav, V99 and Merger Sub to consummate the Merger are subject to the satisfaction or waiver (other than the Two-Thirds of the Minority Approval) of certain customary conditions on or prior to the Effective Time, including the following:

 

   

the receipt of the Two-Thirds of the Minority Approval and the Company Stockholder Approval;

 

   

the expiration or termination of the applicable waiting period under the HSR Act (the “HSR Condition”) or any other consents, waivers or approvals from any other governmental entity has been obtained; and

 

   

the absence of any order or law having been enacted, issued, promulgated, enforced or entered into by any governmental entity or any other action which is then in effect (whether temporary, preliminary or permanent) that has the effect of enjoining, restraining or otherwise prohibiting the consummation of the Merger (the “No Injunction Condition”).

V99’s and Merger Sub’s obligations to consummate the Merger are subject to the satisfaction or waiver of additional conditions, which include the following:

 

   

the representations and warranties of Telenav relating to organization, authorization, validity and Telenav action, the opinion of Telenav’s financial advisor and the absence of any Material Adverse Effect being true and correct on the date of the Merger Agreement and as of the date on which the closing occurs as though made on such date;

 

102


Table of Contents
   

the representations and warranties of Telenav relating to Telenav’s capitalization being true and correct on the date of the Merger Agreement and as of the date on which the closing occurs as though made on such date, except for any de minimis inaccuracies;

 

   

the other representations and warranties of Telenav set forth elsewhere in the Merger Agreement being true and correct on the date of the Merger Agreement and as of the date on which the closing occurs as though made on such date, except for such failures to be true and correct does not have, and would not reasonably be expected to have, a Material Adverse Effect;

 

   

Telenav having performed all obligations and complied with all covenants, in each case in all material respects, required by the Merger Agreement to be performed or complied with by it at or prior to the closing; and

 

   

the delivery to V99 of a certificate of Telenav, signed by a duly authorized executive officer of Telenav, certifying that the conditions described in the preceding four bullets have been satisfied.

Telenav’s obligations to complete the Merger are subject to the satisfaction or waiver of additional conditions, which include the following:

 

   

the representations and warranties of V99 and Merger Sub set forth in the Merger Agreement being true and correct as of the date of the Merger Agreement and as of the date on which the closing occurs as though made on such date, except where the failure of such representations and warranties of such Purchaser Party to be so true and correct, does not have, and would not reasonably be expected to have, individually, or in the aggregate, a Parent Material Adverse Effect;

 

   

V99 and Merger Sub having performed all obligations and complied with all covenants, in each case in all material respects, required by the Merger Agreement to be performed or complied with by it at or prior to the closing; and

 

   

the delivery to Telenav of a certificate signed by duly authorized executive officer of V99 certifying that the conditions described in the immediately preceding two bullets have been satisfied.

Financing

The Merger Agreement does not contain any financing-related closing condition.

Pursuant to the Commitment Letter, the Financing Sources have committed, jointly and severally, to provide debt financing in an amount sufficient to pay the Commitment Amount or the Parent Termination Fee, if applicable. The funding of the Commitment Amount is subject only to the satisfaction by Telenav or waiver by V99 of the conditions to V99’s obligations to close the Merger that are applicable to Telenav.

The Commitment Letter provides, among other things, that Telenav is an express third party beneficiary thereof, that Telenav is entitled to specifically enforce the terms of the Commitment Letter against the Financing Sources, and that the Financing Sources will not oppose the granting of specific performance or other equitable relief in connection with the exercise of such third party beneficiary rights. The Financing Sources’ obligation to fund the Commitment Amount will terminate and expire upon the valid termination of the Merger Agreement in accordance with its terms.

Regulatory Approvals

HSR Act

Under the HSR Act and the rules promulgated thereunder, the Merger cannot be completed until Telenav and V99 file a notification and report form with the FTC and the Antitrust Division of the Department of Justice (the “DOJ”) under the HSR Act and the applicable waiting period has expired or been terminated. A transaction

 

103


Table of Contents

notifiable under the HSR Act may not be completed until the expiration of a thirty (30) calendar day waiting period following the parties’ filing of their respective HSR Act notification forms or the early termination of that waiting period. Telenav and V99 made the necessary filings with the FTC and the Antitrust Division of the DOJ on November 16, 2020. On December 3, 2020, the U.S. Federal Trade Commission notified Telenav that early termination of the waiting period under the HSR Act was granted, effective immediately.

At any time before or after consummation of the Merger, the FTC or the Antitrust Division of the DOJ could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the completion of the Merger, seeking divestiture of substantial assets of the parties or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the Merger, any state could take such action under the antitrust laws as it deems necessary or desirable in the public interest. Such action could include seeking to enjoin the completion of the Merger or seeking divestiture of substantial assets of the parties. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

Other Regulatory Approvals

One or more governmental entities may impose a condition, restriction, qualification, requirement or limitation when it grants the necessary approvals and consents. Third parties may also seek to intervene in the regulatory process or litigate to enjoin or overturn regulatory approvals, any of which actions could significantly impede or even preclude obtaining required regulatory approvals. There is currently no way to predict how long it will take to obtain all of the required regulatory approvals or whether such approvals will ultimately be obtained and there may be a substantial period of time between the approval by stockholders and the completion of the Merger.

Although Telenav expects that all required regulatory clearances and approvals will be obtained, Telenav cannot assure you that these regulatory clearances and approvals will be timely obtained, obtained at all or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the Merger, including the requirement to divest assets, or require changes to the terms of the Merger Agreement. These conditions or changes could result in the conditions to the Merger not being satisfied.

Termination of the Merger Agreement

The Merger Agreement may be terminated, and the Merger may be abandoned at any time prior to its completion:

 

   

by mutual written agreement of Telenav and V99;

 

   

by either Telenav (with approval of an Independent Committee) or V99, if:

 

   

a governmental entity having competent jurisdiction has enacted, issued, promulgated, enforced or entered any law or order which is then in effect, or taken any other action, in each case, permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger and such order or other action has become final and nonappealable; provided, that the right to terminate the Merger Agreement in connection therewith will not be available to a party whose breach of, or failure to fulfill, any of its obligations under the Merger Agreement has been a primary cause of, or resulted in, the enactment, issuance, promulgation, enforcement or entry of any such order or other action, or who has failed to use its reasonable best efforts to avoid the entry of, oppose, or have vacated or terminated, any such order in accordance with its obligations under the Merger Agreement (the “Injunction Termination”);

 

   

the Merger has not occurred by Initial Termination Date; provided, however, that if on such date, the Automatic Extension Conditions are met, then the Initial Termination Date will be automatically extended to the Second Termination Date; provided further that, if on the Second

 

104


Table of Contents
 

Termination Date, the Automatic Extension Conditions are met, then the Second Termination Date will be automatically extended to the Third Termination Date; provided further that the right to terminate the Merger Agreement shall not be available to any party whose breach of, or failure to fulfill, any of its obligations under the Merger in any manner has been a primary cause of the failure to consummate the Merger by the applicable termination date (the “Outside Date Termination”); or

 

   

the Company Stockholder Approval, including the Two-Thirds of the Minority Approval, has not have been obtained at the special meeting (after taking into account any adjournment or postponement thereof); provided, however, that V99 will not have the right to terminate the Merger Agreement if the failure to obtain the Company Stockholder Approval is due to the failure of one or more Support Agreement Stockholders to vote the shares of Common Stock beneficially owned by it in accordance with the Voting and Support Agreement;

 

   

by V99, if:

 

   

there has been a breach or failure of any representation, warranty or covenant of Telenav under the Merger Agreement, which breach or failure has given rise to the failure of any of V99’s conditions to effect the Merger, which has not been cured within thirty (30) days of the receipt by Telenav of written notice from V99 of such breach or failure stating V99’s intention to terminate the Merger Agreement; provided, however, that, V99 will not have the right to terminate the Merger Agreement pursuant to this provision if it is in material breach of the Merger Agreement; or

 

   

prior to obtaining the Company Stockholder Approval and the Two-Thirds of the Minority Approval, the Telenav Board or an Independent Committee has effected a Change in Recommendation; or

 

   

by Telenav, if:

 

   

there has been a breach or failure of any representation, warranty or covenant of V99 or Merger Sub under the Merger Agreement, which breach or failure has given rise to the failure of any of Telenav’s conditions to effect the Merger and which has not been cured within thirty (30) days of the receipt by V99 of written notice from Telenav of such breach or failure stating Telenav’s intention to terminate the Merger Agreement; provided, however, that Telenav will not have the right to terminate the Merger Agreement pursuant to this provision if it is in material breach of the Merger Agreement;

 

   

prior to the receipt of the Company Stockholder Approval and the Two-Thirds of the Minority Approval, the Telenav Board authorizes Telenav to enter into a definitive agreement with respect to a Superior Proposal, to the extent permitted by and in accordance with the terms of the Merger Agreement; provided, however, that Telenav shall concurrently with, and as a condition of, such termination, pay the Company Termination Fee (as defined below) in accordance with the applicable provisions of the Merger Agreement;

 

   

(a) all mutual conditions to the Merger have been satisfied or waived (other than those conditions that by their nature are only capable of being satisfied at the closing), (b) all of the conditions to the Purchaser Parties’ obligations to effect the Merger have been satisfied or waived (other than those conditions that by their nature are only capable of being satisfied at the closing), (c) Telenav has irrevocably confirmed by written notice to V99 that (1) all of the conditions to Telenav’s obligations to effect the Merger have been satisfied or waived (other than those conditions that by their nature are only capable of being satisfied at the closing) and (2) Telenav stands ready, willing and able to consummate the Merger and the transactions contemplated thereby, and (d) V99 fails to consummate the closing within two (2) business days of such notice; or

 

   

V99 has materially breached its obligation under the Merger Agreement to maintain at least $6,000,000 in its identified bank account.

 

105


Table of Contents

Termination Fees and Expenses

Telenav has agreed to pay V99 a termination fee of $3.5 million (the “Company Termination Fee”) in the event that:

 

   

The Merger Agreement is terminated by V99 following the Telenav Board or an Independent Committee having effected a Change in Recommendation (provided that such termination fee will be $2.0 million if V99 has terminated the Merger Agreement following a Change in Recommendation in connection with a Superior Proposal by an Excluded Party);

 

   

The Merger Agreement is terminated by Telenav following the Telenav Board authorizing Telenav to enter into a definitive agreement with respect to a Superior Proposal (provided, that, such termination fee will be $2.0 million if Telenav has terminated the Merger Agreement in connection with a Superior Proposal by an Excluded Party); or

 

   

The following occurs:

 

   

the Merger Agreement is terminated by Telenav or V99 due to the Merger not having been consummated on or before the applicable termination date or due to the failure to obtain the Company Stockholder Approval or the Two-Thirds of the Minority Approval at the special meeting; provided, however, that such failure to obtain the Company Stockholder Approval is not due to the failure of one or more Support Agreement Stockholders to vote the shares of Common Stock beneficially owned by it in accordance with the Voting and Support Agreement;

 

   

following the execution and delivery of the Merger Agreement and prior to termination of the Merger Agreement, an Acquisition Proposal has been made directly to Telenav stockholders or publicly announced and not publicly withdrawn or otherwise abandoned; and

 

   

within twelve (12) months following such termination, either a transaction contemplated by such Acquisition Proposal is consummated or Telenav enters into a definitive agreement providing for the consummation of a transaction contemplated by such Acquisition Proposal and such transaction is subsequently consummated; provided that for purposes of this provision, all references to “15%” in the definition of “Acquisition Proposal” will be deemed to be references to “50%.”

If Telenav is required to pay the Company Termination Fee, the sole and exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) of the Purchaser Parties and the other members of the Purchaser Group, without prejudice the Purchaser Parties’ right of specific performance, against Telenav and its subsidiaries and any of its or their respective former, current and future direct or indirect equity holders, controlling persons, stockholders, members, managers, general or limited partners, assignees, or any representatives of the foregoing (each a “Telenav Related Party” and collectively, the “Telenav Related Parties”) for any breach, loss or damage will be to terminate the Merger Agreement and receive payment of the Company Termination Fee, and upon payment of such amount, no member of the Purchaser Group will have any rights or claims against any Telenav Related Party (or any of such party’s affiliates or representatives) under the Merger Agreement or otherwise in connection with this the Merger Agreement or the transactions contemplated hereby; provided, however, that this provision shall not relieve or release any Telenav Related Party from any liabilities or damages arising out of actual or intentional fraud as specified in the Merger Agreement.

V99 has agreed to pay Telenav a termination fee of $3.5 million (the “Parent Termination Fee”) in the event that:

 

   

the Merger Agreement is terminated by Telenav following V99’s material breach of its obligation under the Merger Agreement to maintain at least $6,000,000 in its identified bank account;

 

   

the Merger Agreement is terminated by Telenav after the following circumstances have been met: (i) all mutual conditions to the Merger have been satisfied or waived (other than those conditions that

 

106


Table of Contents
 

by their nature are only capable of being satisfied at the closing), (ii) all of the conditions to the Purchaser Parties’ obligations to effect the Merger have been satisfied or waived (other than those conditions that by their nature are only capable of being satisfied at the closing), (iii) Telenav has irrevocably confirmed by written notice to V99 that (a) all of the conditions to Telenav’s obligations to effect the Merger have been satisfied or waived (other than those conditions that by their nature are only capable of being satisfied at the closing) and (b) Telenav stands ready, willing and able to consummate the Merger and the transactions contemplated thereby, and (iv) V99 fails to consummate the closing within two (2) business days of such notice;

 

   

there has been an Outside Date Termination, and at the time of such termination, all conditions to V99’s obligations to consummate the Merger, other than the HSR Condition or the No Injunction Condition, have been satisfied or waived (other than those conditions that by their nature are only capable of being satisfied at the closing); or

 

   

there has been an Injunction Termination, and at the time of such termination, all conditions to V99’s obligations to consummate the Merger, other than the HSR Condition or the No Injunction Condition, have been satisfied or waived (other than those conditions that by their nature are only capable of being satisfied at the closing).

If the Purchaser Parties are required to pay the Parent Termination Fee, the sole and exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) of Telenav against the Purchaser Parties (or any obligor under the Commitment Letter) or any of their respective former, current or future general or limited partners, shareholders, controlling persons, managers, members, directors, officers, employees, affiliates, agents or any their respective assignees or successors or any former, current or future general or limited partner, shareholder, controlling person, manager, member, director, officer, employee or any representatives of the foregoing (each a “V99 Related Party” and collectively, the “V99 Related Parties”) for any breach, loss or damage is to terminate the Merger Agreement and receive payment of the Parent Termination Fee, and upon payment of such amount, Telenav will have no rights or claims against any V99 Related Party (or any of such party’s affiliates or representatives) under the Merger Agreement or otherwise in connection with the Merger Agreement or the transactions contemplated thereby; provided that this provision will not relieve or release any Purchaser Party from any liabilities or damages arising out of actual or intentional fraud as specified in the Merger Agreement.

Except as described above, all fees and expenses incurred in connection with the Merger Agreement, the Merger and the other transactions contemplated under the Merger Agreement will be paid by the party incurring such fees or expenses, whether the Merger is consummated.

Effect of Termination

If the Merger Agreement is terminated, it will immediately become void and there shall be no liability under the Merger Agreement on the party of any party thereto, except that:

 

   

certain provisions of the Merger Agreement, including, among others, the provisions relating to the confidentiality agreement between V99 and Telenav, the provisions related to publicity, the effect of termination of the Merger Agreement, fees and expenses, the notice information and obligations of the parties, governing law, jurisdiction and waiver of jury trial will survive termination; and

 

   

no