As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/06/06  Traffic.com, Inc.                 DEFA14A    11/06/06    8:1.8M                                   Merrill Corp-MD/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFA14A     Current Report of Material Events or Corporate      HTML     53K 
                          Changes                                                
 2: EX-2.1      Plan of Acquisition, Reorganization, Arrangement,   HTML    776K 
                          Liquidation or Succession                              
 3: EX-10.11.1  Material Contract                                   HTML     28K 
 4: EX-10.27    Material Contract                                   HTML    180K 
 5: EX-10.28    Material Contract                                   HTML     98K 
 6: EX-99.5     Miscellaneous Exhibit                               HTML     26K 
 7: EX-99.6     Miscellaneous Exhibit                               HTML     13K 
 8: EX-99.7     Miscellaneous Exhibit                               HTML     17K 

Item 1.01.  Entry into a Material Definitive Agreement.

On November 5, 2006, Traffic.com, Inc., a Delaware corporation (“Traffic.com”), NAVTEQ Corporation, a Delaware corporation (“NAVTEQ”), NAVTEQ Holdings B.V., a corporation organized under the laws of The Netherlands, and NAVTEQ Holdings Delaware, Inc., a Delaware corporation (“Merger Subsidiary”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Traffic.com will be merged with and into Merger Subsidiary (the “Merger”).  Upon consummation of the Merger, the separate existence of Traffic.com will cease, and Merger Subsidiary will be the surviving corporation.  The equity value of the transaction is approximately $179 million.  The Merger has been approved by the Board of Directors of both NAVTEQ and Traffic.  NAVTEQ issued a press release dated November 6, 2006 announcing the Merger Agreement and the transactions contemplated thereby.  A copy of the press release is filed as Exhibit 99.5 to this report and is incorporated herein by reference.

Pursuant to the Merger Agreement, at the effective time of the Merger, each share outstanding of Traffic.com common stock will be converted into the right to receive, at the election of the holder thereof (subject to certain conditions, including those pertaining to pro-ration): (i) $8.00 in cash, without interest or (ii) 0.235 shares of NAVTEQ common stock (collectively, the “Merger Consideration”).  The election of cash or stock will be subject to a limit on total cash consideration of approximately $49 million (minus the cash value of dissenting shares) and a total stock consideration equal to approximately 4.3 million shares of NAVTEQ common stock (less the shares of NAVTEQ common stock issued to holders of warrants to purchase Traffic.com stock that are exchanged for NAVTEQ common stock based on the per share stock consideration).

The Merger Agreement includes customary representations, warranties and covenants of the parties.  The covenants of Traffic.com include, subject to certain exceptions, covenants to (i) conduct its business in the ordinary course consistent with past practice during the period between the execution of the Merger Agreement and the consummation of the Merger, (ii) have its Board of Directors recommend that its stockholders vote for the approval and adoption of the Merger Agreement and the Merger, (iii) hold a stockholders’ meeting for the purpose of voting on the adoption of the Merger Agreement, (iv) not withdraw its Board of Director’s recommendation, approve an alternative business combination transaction or proposal, or approve or enter into an agreement for an alternative business combination transaction, (v) not solicit, encourage or facilitate alternative business combination transaction proposals, and (vi) not engage in discussions or negotiations concerning or disclose nonpublic information in connection with alternative business combination transactions or proposals, subject to the Board of Directors’ fiduciary duties under Delaware law.

The consummation of the Merger is subject to the approval of stockholders of Traffic.com by a majority of the votes cast at the meeting of Traffic.com’s stockholders and other customary closing conditions, including (i) expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the absence of any law or regulation that makes illegal the Merger or the transactions contemplated thereby or prohibits or otherwise prevents the consummation of the Merger or any of the transactions contemplated thereby, (iii) the effectiveness of the registration statement on Form S-4 to be filed with the Securities and Exchange Commission (“SEC”), (iv) the number of shares dissenting from approval of the Merger not exceeding ten percent of the aggregate number of shares of Traffic.com capital stock outstanding as of the record date for Traffic.com’s stockholders’ meeting, and (iv) the approval of NAVTEQ’s common stock to be issued in the Merger for listing on the New York Stock Exchange.  Each party’s obligation to close is also subject to, among other closing conditions, the accuracy of representations and warranties of the other party and compliance by the other party of the covenants required to be complied with on or prior to closing, the receipt of required regulatory approvals, the delivery to each party of customary tax opinions from its counsel that the Merger will qualify as a tax-free reorganization for federal income purposes, the absence of an event constituting a material adverse effect on the other party, as described in the Merger Agreement, and the delivery of certain third party consents by the other party.  Furthermore, NAVTEQ’s obligation to close is subject to, among other closing conditions, the delivery of written agreements from certain holders of outstanding Traffic.com warrants providing for the exercise of such warrants in full at or prior to closing, the exchange of such warrants for the per share stock consideration set forth in the Merger Agreement or the replacement of such warrants by new warrants in a form agreed to by NAVTEQ and such holders.

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The Merger Agreement contains certain termination rights of Traffic.com and NAVTEQ and further provides that Traffic.com will be required to pay NAVTEQ a termination fee of $6.25 million under certain specified circumstances.

The foregoing description of the Merger Agreement and the Merger does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement filed hereto as Exhibit 2.1, which is incorporated herein by reference.

Concurrently with the execution and delivery of the Merger Agreement, certain stockholders of Traffic.com entered into agreements with NAVTEQ and Traffic.com (the “Voting Agreements”) pursuant to which those stockholders have agreed to vote their Traffic.com shares in favor of adoption and approval of the Merger Agreement and approval of the Merger.  Copies of the forms of Voting Agreements are filed herewith as Exhibits 10.27 and 10.28.

Cautionary Statement

The Merger Agreement contains representations and warranties that the parties have made to each other as of specific dates.  Except for its status as a contractual document that establishes and governs the legal relations among the parties thereto with respect to the transactions described above, the Merger Agreement is not intended to be a source of factual, business or operational information about the parties.  The representations and warranties contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates, were solely for the benefit of the parties to that agreement, and may be subject to limitations agreed between those parties, including being qualified by disclosures between those parties.  Those representations and warranties may have been made to allocate risks among the parties to the Merger Agreement, including where the parties do not have complete knowledge of all facts, instead of establishing matters as facts.  In addition, the representations and warranties may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.  The assertions embodied in such representations and warranties are qualified by information contained in disclosure letters that the parties exchanged in connection with signing the Merger Agreement.  Investors are not third party beneficiaries under the Merger Agreement and, accordingly, should not rely on the representations, warranties or covenants or any descriptions thereof as characterization of the actual state of facts or condition of NAVTEQ, Traffic.com or Merger Subsidiary, or any of their respective affiliates.  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 fully reflected in NAVTEQ’s or Traffic.com’s public disclosures.

Important Information for Investors and Stockholders

NAVTEQ will file a registration statement, which will contain a proxy statement/prospectus of NAVTEQ and Traffic.com, and other relevant documents with the Securities and Exchange Commission (SEC) with respect to the proposed merger.  A definitive proxy statement/prospectus, when available, will be sent to security holders of Traffic.com seeking their approval of the proposed merger.  Investors and security holders are urged to read carefully the definitive proxy statement/prospectus and other materials when they become available before making any voting or investment decision because it will contain important information regarding NAVTEQ, Traffic.com and the proposed merger.

The documents filed with the SEC by NAVTEQ may be obtained free of charge from NAVTEQ’s website at www.navteq.com or by directing a request to NAVTEQ Corporation, 222 Merchandise Mart, Suite 900 Chicago, Illinois 60654, Attention: Investor Relations, telephone: (312) 894-7000.  The documents filed with the SEC by Traffic.com may be obtained free of charge from Traffic.com’s website at www.traffic.com or by directing a request to Traffic.com, Inc., 851 Duportail Road, Wayne, PA 19087, Attention: Investor Relations, telephone: (610) 725-9700.

NAVTEQ, Traffic.com and their respective executive officers, directors and other employees may be deemed to be participants in the solicitation of proxies from the stockholders of Traffic.com in favor of the proposed merger.  Information about the executive officers, directors and other employees of NAVTEQ and Traffic.com and their direct or indirect interests, by security holdings or otherwise, in the merger will be set forth in the proxy statement/prospectus when it becomes available.

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Neither this Current Report on Form 8-K nor the documents filed as exhibits hereto shall constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for “forward-looking statements” made by or on behalf of Traffic.com.  This Current Report on Form 8-K contains forward-looking statements that you should read in conjunction with the financial statements and notes to financial statements that Traffic.com has included elsewhere in this report.  These statements are based on Traffic.com’s current expectations, assumptions, estimates and projections about Traffic.com’s business and Traffic.com’s industry, and involve known and unknown risks, uncertainties, and other factors that may cause Traffic.com’s or Traffic.com’s industry’s results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in, or contemplated by, the forward-looking statements.  Traffic.com generally identifies these statements by words or phrases such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” “should,” “estimate,” “predict,” “potential,” “continue,” or the negative of such terms or other similar expressions.  Traffic.com’s actual results and the timing of events may differ significantly from the results discussed in the forward-looking statements, and you should not place undue reliance on these statements.  Factors that might cause such a difference include those discussed under the heading “Risk Factors,” in Traffic.com’s Annual Report on Form 10-K, filed on March 24, 2006, as well as those discussed elsewhere therein and in this Current Report on Form 8-K.  Traffic.com disclaims any intent or obligation to update any forward-looking statements as a result of developments occurring after the date of this report.

On November 5, 2006, Traffic.com also entered into an agreement with Robert N. Verratti, Traffic.com’s Chief Executive Officer, which provides that, in the event of a “change in control” of Traffic.com 1) Mr. Verratti will have the right to receive a lump sum payment equal to $290,000 if Mr. Verratti’s employment with Traffic.com is terminated other than for cause within 12 months of the “change in control;” and 2) any unvested options held by Mr. Verratti will become vested upon the “change in control”.

For purposes of this agreement, a “change in control” means (x) a merger, consolidation or issuance or sale of Traffic.com’s securities, in which securities possessing more than fifty percent (50%) of the total combined voting power of Traffic.com’s (or any successor’s outstanding securities are transferred to a person or persons different from the persons holding such securities immediately prior to such transaction), or (y) the sale, transfer or other disposition of a majority of Traffic.com’s non-liquid assets to an unaffiliated third party.  The Merger will be considered a “change in control” for purposes of Mr. Verratti’s agreement.

The agreement with Mr. Verratti was approved by the Compensation Committee of the Board of Directors on May 23, 2006 and the terms of Mr. Verratti’s agreement were disclosed in Traffic.com’s Proxy Statement filed with the Securities and Exchange Commission on May 24, 2006.  A copy of Mr. Verratti’s agreement is attached hereto as Exhibit 10.11.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

d)  Exhibits

The following exhibits are filed in accordance with Item 601 of Regulation S-K:

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated as of November 5, 2006, by and among NAVTEQ Corporation, NAVTEQ Holdings B.V., NAVTEQ Holdings Delaware, Inc. and Traffic.com, Inc.
10.11.1		Agreement, dated as of November 5, 2006, between Traffic.com, Inc. and Robert N. Verratti.

 

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Exhibit No.		Description
10.27		Voting Agreement.
10.28		Voting Agreement.
99.5		Press Release dated November 6, 2006.
99.6		Email correspondence from Robert N. Verratti to Traffic.com employees dated November 6, 2006.
99.7		Powerpoint presentation entitled “Driving Into The Future” dated November 6, 2006.

 

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