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Lexmark International Inc/KY – ‘PREM14A’ for 5/19/16

On:  Thursday, 5/19/16, at 5:24pm ET   ·   For:  5/19/16   ·   Accession #:  1193125-16-596190   ·   File #:  1-14050

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

 5/19/16  Lexmark International Inc/KY      PREM14A     5/19/16    1:1.3M                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: PREM14A     Preliminary Proxy Solicitation Material - Merger    HTML   1.00M 
                          or Acquisition                                         

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  x                             Filed by a Party other than the Registrant  ¨

Check the appropriate box:

LEXMARK INTERNATIONAL, INC.

(Name of Registrant as Specified in its Charter)

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

Payment of Filing Fee (Check the appropriate box):

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED MAY 19, 2016

One Lexmark Centre Drive

Lexington, Kentucky 40550

[●], 2016

Dear Stockholder:

You are cordially invited to attend a special meeting of the stockholders of Lexmark International, Inc., a Delaware corporation (“Lexmark,” the “Company,” “we,” “our” or “us”), which we will hold on [●], 2016, at [●] Eastern Daylight Time, at [●].

At the special meeting, holders of our Class A Common Stock, par value $0.01 per share (“common stock”), will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger (as it may be amended from time to time, the “merger agreement”), dated as of April 19, 2016, by and among the Company, Ninestar Holdings Company Limited, a Cayman Islands exempted limited liability company (“Holdings”), Ninestar Group Company Limited, a Cayman Islands exempted limited liability company and a wholly owned subsidiary of Holdings (“Parent”), Ninestar Lexmark Company Limited, a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and (solely for purposes of specified provisions of the merger agreement) Apex Technology Co., Ltd., a company organized under the laws of the People’s Republic of China.

Pursuant to the merger agreement and subject to the terms and conditions set forth therein, Merger Sub will be merged with and into the Company (the “merger”), and each share of common stock outstanding at the effective time of the merger (other than shares owned by the Company, any wholly owned subsidiary of the Company, Holdings, Parent or Merger Sub, or by stockholders who have properly exercised and perfected appraisal rights under Delaware law) will be cancelled and converted into the right to receive $40.50 in cash, without interest and less any applicable withholding taxes.

The board of directors of the Company (the “board”) has approved the merger agreement and determined that the merger agreement is advisable, fair to and in the best interests of the Company and its stockholders, in each case by the unanimous vote of the directors present at the meeting held to approve the transaction. The board unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the merger agreement. In addition, the board unanimously recommends that the stockholders of the Company vote “FOR” the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and “FOR” the proposal to adjourn the special meeting if necessary or appropriate to solicit additional proxies.

The enclosed proxy statement describes the merger agreement and the merger and provides specific information concerning the special meeting. In addition, you may obtain information about us from documents filed with the Securities and Exchange Commission (the “SEC”). We urge you to, and you should, read the entire proxy statement carefully, as it sets forth the details of the merger agreement and other important information related to the merger.

Your vote is very important. The merger cannot be completed unless holders of a majority of the outstanding shares of common stock vote in favor of the adoption of the merger agreement. If you fail to vote on the adoption of the merger agreement, the effect will be the same as a vote against the adoption of the merger agreement.

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While our stockholders may exercise their right to vote their shares in person, we recognize that many stockholders may not be able to attend the special meeting. Accordingly, we have enclosed a proxy that will enable your shares of common stock to be voted on the matters to be considered at the special meeting even if you are unable to attend. If you desire your shares of common stock to be voted in accordance with the board’s recommendation on all proposals, you need only sign, date and return the proxy in the enclosed postage-paid envelope. Otherwise, please mark the proxy to indicate your voting instructions, sign and date the proxy, and return it in the enclosed postage-paid envelope. You also may submit a proxy by using a toll-free telephone number or the Internet. We have provided instructions on the proxy card for using these convenient services. Submitting a proxy will not prevent you from voting your shares of common stock in person if you subsequently choose to attend the special meeting.

If you hold your shares of common stock in “street name” through a broker, bank or other nominee, you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares of common stock. Without those instructions, your shares of common stock will not be voted, which will have the same effect as voting against the proposal to adopt the merger agreement.

If you have any questions or need assistance in voting your shares, please contact our proxy solicitor, Georgeson LLC, 480 Washington Blvd., 26th Floor, Jersey City, New Jersey 07310, toll-free (866) 431-2108.

Thank you for your continued support.

Sincerely,

Paul A. Rooke

Chairman and Chief Executive Officer

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.

This proxy statement is dated [●], 2016 and is first being mailed to stockholders on or about [●], 2016.

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION, DATED MAY 19, 2016

LEXMARK INTERNATIONAL, INC.

One Lexmark Centre Drive

740 West New Circle Road

Lexington, Kentucky 40550

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To the Stockholders of Lexmark:

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders of Lexmark International, Inc., a Delaware corporation (“Lexmark,” the “Company,” “we,” “our” or “us”), will be held on [●], 2016, at [●] Eastern Daylight Time, at [●] to consider and vote upon the following proposals:

The holders of record of our Class A Common Stock, par value $0.01 per share (“common stock”), as of the close of business on [●], 2016, are entitled to notice of and to vote at the special meeting or at any adjournment thereof. All stockholders of record are cordially invited to attend the special meeting in person.

The board has approved the merger agreement and determined that the merger agreement is advisable, fair to and in the best interests of the Company and its stockholders, in each case by the unanimous vote of the directors present at the meeting held to approve the transaction. The board unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the merger agreement. In addition, the board unanimously recommends that the stockholders of the Company vote “FOR” the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and “FOR” the proposal to adjourn the special meeting if necessary or appropriate to solicit additional proxies.

Your vote is important, regardless of the number of shares of common stock you own. The adoption of the merger agreement by the affirmative vote of holders of a majority of the outstanding shares of common stock is a condition to the consummation of the merger. The advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and the proposal to adjourn the special meeting if necessary or appropriate to solicit additional proxies each require the affirmative vote of holders of a majority of the shares of common stock present at the meeting and entitled to vote thereon. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy and thus ensure that your shares of common stock will be represented at the special meeting if you are unable to attend.

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You also may submit your proxy by using a toll-free telephone number or the Internet. We have provided instructions on the proxy card for using these convenient services.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of the adoption of the merger agreement, the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger and the proposal to adjourn the special meeting if necessary or appropriate to solicit additional proxies. If you fail to vote or submit your proxy, the effect will be that your shares of common stock may not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote against the adoption of the merger agreement, but will not affect the advisory vote to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger or the vote regarding the adjournment of the special meeting, if necessary or appropriate to solicit additional proxies.

Under Delaware law, stockholders who do not vote in favor of the proposal to adopt the merger agreement will have the right to seek appraisal of the fair value of their shares of the common stock as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for such an appraisal before the vote on the proposal to adopt the merger agreement and comply with the other Delaware law procedures explained in the accompanying proxy statement.

Your proxy may be revoked at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement. If you are a stockholder of record, you may revoke your proxy by attending the meeting and voting in person.

By Order of the Board of Directors,

Robert J. Patton

Secretary

[●], 2016

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting, the merger agreement and the merger. These questions and answers may not address all of the questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

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As of the close of business on [●], 2016, the record date for the special meeting, there were [●] shares of common stock outstanding.

If you submit a proxy but fail to provide voting instructions or abstain on any of the proposals listed on the proxy card, your shares will be counted for the purpose of determining whether a quorum is present at the special meeting.

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If your shares are held in “street name” by your broker, bank or other nominee and you do not instruct the nominee how to vote your shares, these shares will be counted for purposes of determining whether a quorum is present for the transaction of business at the special meeting.

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If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of each of the proposal to adopt the merger agreement, the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger, and the proposal to adjourn the special meeting if necessary or appropriate to solicit additional proxies.

If you hold your shares in “street name” through a broker, bank or other nominee, you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares. Without those instructions, your shares will not be voted, which will have the same effect as voting against the proposal to adopt the merger agreement.

The record date for stockholders entitled to vote at the special meeting is earlier than the consummation of the merger. So, if you transfer your shares of common stock after the record date but before the closing of the merger, you will have transferred your right to receive the merger consideration in the merger, but you will have retained the right to vote at the special meeting.

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Georgeson LLC

480 Washington Blvd., 26th Floor

Jersey City, New Jersey 07310

(866) 431-2108

or

Lexmark International, Inc. 740 West New Circle Road Lexington, Kentucky 40550 Attention: Investor Relations (859) 232-5568

If your broker, bank or other nominee holds your shares, you should also call your broker, bank or other nominee for additional information.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING

STATEMENTS

This proxy statement, and the documents incorporated by reference in this proxy statement, include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which are identified by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “will,” “contemplate,” “would” and similar expressions that contemplate future events. Such forward-looking statements are based on management’s current assumptions and expectations, including the expected completion and timing of the merger and other information relating to the merger. You should be aware that forward-looking statements involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that the actual results or developments we anticipate will be realized, or even if realized, that they will have the expected effects on the business or operations of the Company. These forward-looking statements speak only as of the date on which the statements were made, and we undertake no obligation to update or revise any forward-looking statements made in this proxy statement or elsewhere as a result of new information, future events or otherwise, except as required by law. In addition to other factors and matters contained in or incorporated by reference in this document, we believe the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

and other risks detailed in our filings with the SEC, including our most recent Annual Report on Form 10-K and later filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. See “Where You Can Find Additional Information.” Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We cannot guarantee any future results, levels of activity, performance or achievements.

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THE COMPANIES

Lexmark International, Inc.

Lexmark International, Inc., referred to as “Lexmark,” the “Company,” “we,” “our” or “us,” is a Delaware corporation. Lexmark is a leading developer, manufacturer and supplier of printing, imaging, device management, managed print services, document workflow and business process and content management solutions. Lexmark operates in the office printing and imaging, enterprise content management, business process management, document output management, intelligent data capture and search software markets. Its products include printers, multifunction devices, and imaging and workflow software solutions. Lexmark’s offerings make it easier for businesses of all sizes to improve their business processes by enabling them to capture, manage and access unstructured business information while speeding the movement and management of information between the paper and digital worlds. Lexmark operates on a global basis, and as of December 31, 2015, Lexmark had 14,000 employees across the United States, Europe, Canada, Latin America, Asia Pacific, the Middle East and Africa.

Lexmark’s principal executive offices are located at One Lexmark Centre Drive, 740 West New Circle Road, Lexington, Kentucky 40550; our telephone number is (859) 232-2000; and our Internet website address is www.lexmark.com. The information provided on or accessible through Lexmark’s website is not part of this proxy statement and is not incorporated in this information statement by this or any other reference to its website provided in this information statement.

A detailed description of the Company’s business is contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which is incorporated by reference into this proxy statement. See “Where You Can Find Additional Information.”

The Consortium: Apex Technology Co., Ltd., PAG Asia Capital and Legend Capital

Apex Technology Co., Ltd., or Apex, is a company organized under the laws of the PRC with principal executive offices located at No. 3833 Zhuhai Avenue, Xiangzhou District, Zhuhai, Guangdong, PRC 519606. Apex designs, manufactures and markets inkjet and laser cartridge components for remanufacturers and distributors and is the largest manufacturer and solution provider for the global aftermarket imaging supplies channel. Apex was founded in 2004. Zhuhai Seine Technology Co., Ltd., or Seine, is the largest stockholder of Apex, holding approximately 68.7% of the voting shares of Apex. Apex is listed on the Shenzhen Stock Exchange under the symbol “002180.” Subject to the limitations set forth in the merger agreement, Apex has agreed to guarantee the obligations of Holdings, Parent and Merger Sub pursuant to the merger agreement.

PAG Asia I LP and PAG Asia II LP, or the PAG Funds, are exempted limited partnerships organized under the laws of the Cayman Islands, sponsored and managed by PAG Asia Capital, with their principal executive offices located at 32/F AIA Central, 1 Connaught Road, Central, Hong Kong. PAG Asia Capital is the private equity buyout arm of PAG, one of Asia’s largest private equity firms. Founded in 2002, PAG currently has approximately $15 billion in capital under management.

Legend Capital Management Co., Ltd., or Legend Capital, is a company organized under the laws of the PRC and with its principal executive offices at Room 368, Unit 302, No. 211 Fute North Road, China (Shanghai) Pilot Free Trade Zone, Shanghai, PRC. Legend Capital is the venture capital arm of Legend Holdings Corporation, a large diversified holding corporation in the PRC, and has been a shareholder of Seine since 2007.

Apex, the PAG Funds and Legend Capital, each of which has entered into an equity commitment letter with the Company and Holdings to provide certain equity financing in connection with the merger (as further described under “The Merger (Proposal 1)—Financing—Equity Financing”), are collectively referred to herein as the “Consortium.”

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Ninestar Holdings Company Limited

Ninestar Holdings Company Limited, or Holdings, is a Cayman Islands exempted limited liability company with principal executive offices located at No. 3833 Zhuhai Avenue, Xiangzhou District, Zhuhai, Guangdong, PRC 519606. Holdings was formed by the Consortium solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement.

Ninestar Group Company Limited

Ninestar Group Company Limited, or Parent, is a Cayman Islands exempted limited liability company and a wholly owned subsidiary of Holdings with principal executive offices located at No. 3833 Zhuhai Avenue, Xiangzhou District, Zhuhai, Guangdong, PRC 519606. Parent was formed by the Consortium solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement.

Ninestar Lexmark Company Limited

Ninestar Lexmark Company Limited, or Merger Sub, is a Delaware corporation and a wholly owned subsidiary of Parent with principal executive offices located at No. 3833 Zhuhai Avenue, Xiangzhou District, Zhuhai, Guangdong, PRC 519606. Merger Sub was formed by the Consortium solely for the purpose of entering into the merger agreement and consummating the transactions contemplated by the merger agreement.

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THE SPECIAL MEETING

We are furnishing this proxy statement to the Company’s stockholders as part of the solicitation of proxies by the board for use at the special meeting. This proxy statement provides the Company’s stockholders with the information they need to know to be able to vote or instruct their vote to be cast at the special meeting.

Date, Time and Place of the Special Meeting

This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the board for use at the special meeting to be held on [●], 2016, starting at [●] Eastern Daylight Time at [●], or at any adjournment or postponement thereof.

Purposes of the Special Meeting

One purpose of the special meeting is for our stockholders to consider and vote upon the proposal to adopt the merger agreement. Our stockholders must approve the proposal to adopt the merger agreement for the merger to occur. If our stockholders fail to approve the proposal to adopt the merger agreement, the merger will not occur. A copy of the merger agreement is attached to this proxy statement as Annex A, and the material provisions of the merger agreement are described under “The Merger Agreement.” Our stockholders are also being asked to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

In addition, in accordance with Section 14A of the Exchange Act, the Company is providing its stockholders with the opportunity to cast an advisory (non-binding) vote on the compensation that may be payable to its named executive officers in connection with the merger, the value of which is disclosed in the table in the section of the proxy statement entitled “The Merger (Proposal 1)—Interests of the Company’s Directors and Executive Officers in the Merger.” The vote on executive compensation payable in connection with the merger is a vote separate and apart from the vote to adopt the merger agreement. Accordingly, a stockholder may vote to approve the executive compensation and vote not to adopt the merger agreement and vice versa. Because the vote on executive compensation is advisory only, it will not be binding on the Company, Apex, Holdings, Parent or Merger Sub. Accordingly, because the Company is contractually obligated to pay the compensation, the compensation will be payable, subject only to the conditions applicable thereto, if the merger agreement is adopted and the merger is completed, regardless of the outcome of the advisory vote.

This proxy statement and the enclosed form of proxy are first being mailed to our stockholders on or about [●], 2016.

Recommendation of the Company’s Board of Directors

After careful consideration, the board has approved the merger agreement, the merger and the transactions contemplated thereby and determined that the merger agreement is advisable, fair to and in the best interests of the Company and its stockholders, in each case by the unanimous vote of the directors present at the meeting held to approve the transaction. Certain factors considered by the board in reaching its decision to approve the merger agreement and the merger can be found in the section entitled “The Merger (Proposal 1)—Reasons for the Merger.”

The board unanimously recommends that the Company’s stockholders vote “FOR” the proposal to adopt the merger agreement, “FOR” the adjournment proposal and “FOR” the named executive officer merger-related compensation proposal.

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Record Date and Quorum

The holders of record of common stock as of the close of business on [●], 2016, the record date, are entitled to receive notice of and to vote at the special meeting. As of the close of business on the record date, approximately [●] shares of common stock were outstanding.

The presence at the special meeting, in person or by proxy, of the holders of record of a majority of the common stock outstanding at the close of business on the record date will constitute a quorum, permitting the Company to conduct its business at the special meeting. Once a share is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting. However, if a new record date is set for an adjourned special meeting, then a new quorum will have to be established. Proxies received but marked as abstentions and broker non-votes, described below under the sub-heading “—Voting; Proxies; Revocation—Providing Voting Instructions by Proxy,” will be included in the calculation of the number of shares considered to be present at the special meeting.

Required Vote

Each share of common stock outstanding at the close of business on the record date is entitled to one vote at the special meeting on each matter properly brought before the special meeting.

For the Company to complete the merger, stockholders holding a majority of the shares of common stock outstanding at the close of business on the record date must vote “FOR” the proposal to adopt the merger agreement. A failure to vote your shares of common stock or an abstention from voting will have the same effect as a vote against the proposal to adopt the merger agreement.

Approval of each of the adjournment proposal and the advisory (non-binding) proposal on executive compensation payable to the Company’s named executive officers in connection with the merger requires the affirmative vote of the holders of a majority of the shares of common stock present or represented by proxy at the special meeting and entitled to vote thereon. An abstention will have the same effect as a vote against these proposals, but the failure to vote your shares will have no effect on the outcome of these proposals.

As of the close of business on the record date, there were [●] shares of common stock outstanding.

Voting by the Company’s Directors and Executive Officers

At the close of business on the record date, directors and executive officers of the Company and their subsidiaries were entitled to vote [●] shares of common stock, or approximately [●]% of the shares of common stock issued and outstanding on that date. We currently expect that the Company’s directors and executive officers will vote their shares in favor of the proposal to adopt the merger agreement and the other proposals to be considered at the special meeting, although none of them is obligated to do so.

Voting; Proxies; Revocation

Attendance

All holders of shares of common stock as of the close of business on [●], 2016, the record date, including stockholders of record and beneficial owners of common stock registered in the “street name” of a bank, broker or other nominee, are invited to attend the special meeting. If you are a stockholder of record, please be prepared to provide proper identification, such as a driver’s license. If you hold your shares in “street name,” you will need to provide proof of ownership, such as a recent account statement or voting instruction form provided by your bank, broker or other nominee or other similar evidence of ownership, along with proper identification.

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Voting in Person

Stockholders of record will be able to vote in person at the special meeting. If you are not a stockholder of record, but instead hold your shares of common stock in “street name” through a bank, broker or other nominee, you must provide a proxy executed in your favor from your bank, broker or other nominee in order to be able to vote in person at the special meeting.

Providing Voting Instructions by Proxy

To ensure that your shares of common stock are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting in person.

Shares of Common Stock Held by Record Holder

If you are a stockholder of record, you may provide voting instructions by proxy using one of the methods described below.

Submit a Proxy by Telephone or via the Internet. This proxy statement is accompanied by a proxy card with instructions for submitting voting instructions. You may vote by telephone by calling the toll-free number or via the Internet by accessing the Internet address as specified on the enclosed proxy card. Your shares of common stock will be voted as you direct in the same manner as if you had completed, signed, dated and returned your proxy card, as described below.

Submit a Proxy Card. If you complete, sign, date and return the enclosed proxy card by mail so that it is received in time for the special meeting, your shares of common stock will be voted in the manner directed by you on your proxy card.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted in favor of the proposal to adopt the merger agreement, the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger, and the proposal to adjourn the special meeting if necessary or appropriate to solicit additional proxies. If you fail to return your proxy card and you are a holder of record as of the close of business on the record date, unless you attend the special meeting and vote in person, the effect will be that your shares of common stock will be considered present at the special meeting for purposes of determining whether a quorum is present at the special meeting, will have the same effect as a vote against the proposal to adopt the merger agreement and will not affect the vote regarding the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies, or the advisory (non-binding) proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the merger.

Shares of Common Stock Held in “Street Name”

If your shares of common stock are held by a bank, broker or other nominee on your behalf in “street name,” your bank, broker or other nominee will send you instructions as to how to provide voting instructions for your shares. Many banks and brokerage firms have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by a voting instruction form.

In accordance with the rules of the NYSE, banks, brokers and other nominees who hold shares of common stock in “street name” for their customers do not have discretionary authority to vote the shares with respect to the proposal to adopt the merger agreement. Accordingly, if banks, brokers or other nominees do not receive specific voting instructions from the beneficial owner of such shares, they may not vote such shares with respect to the proposal to adopt the merger agreement. Under such circumstance, a “broker non-vote” would arise. Broker non-votes, if any, will be considered present at the special meeting for purposes of determining whether a quorum is

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present at the special meeting, will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement and will have no effect on the adjournment proposal or the advisory (non-binding) proposal on executive compensation payable to the Company’s named executive officers in connection with the merger. For shares of common stock held in “street name,” only shares of common stock affirmatively voted “FOR” the proposal to adopt the merger agreement will be counted as a favorable vote for such proposal.

Revocation of Proxies

Any person giving a proxy pursuant to this solicitation has the power to revoke and change it any time before it is voted. If you are a stockholder of record, you may revoke your proxy at any time before the vote is taken at the special meeting by:

Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company or by sending a written notice of revocation to the Company, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by the Company before the special meeting.

If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee in order to revoke your proxy or submit new voting instructions.

Abstentions

An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting. Abstentions will be included in the calculation of the number of shares of common stock represented at the special meeting for purposes of determining whether a quorum has been achieved. Abstaining from voting will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement, a vote “AGAINST” the advisory (non-binding) proposal on executive compensation payable to the Company’s named executive officers in connection with the merger and a vote “AGAINST” the adjournment proposal.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed for the purpose of soliciting additional proxies. In the event that there is present, in person or by proxy, sufficient favorable voting power to secure the vote of the stockholders of the Company necessary to approve the proposal to adopt the merger agreement, the Company does not anticipate that it will adjourn or postpone the special meeting unless it is advised by counsel that failure to do so could reasonably be expected to result in a violation of applicable law.

The special meeting may be adjourned by the affirmative vote of the holders of a majority of the shares of common stock present in person or represented by proxy at the special meeting and entitled to vote at the special meeting. Any signed proxies received by the Company in which no voting instructions are provided on such matter will be voted in favor of an adjournment in these circumstances. Any adjournment or postponement of the special meeting for the purpose of soliciting additional proxies will allow the Company’s stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or postponed.

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Solicitation of Proxies

The board is soliciting your proxy, and we will bear the cost of this solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding common stock. Georgeson LLC, a proxy solicitation firm, has been retained to assist us in the solicitation of proxies for the special meeting, and we expect to pay Georgeson LLC approximately $15,000, plus reimbursement of out-of-pocket expenses, in connection with this solicitation. Proxies may be solicited by mail, personal interview, e-mail, telephone, or via the Internet by Georgeson LLC or, without additional compensation, by certain of the Company’s directors, officers and employees.

Other Information

You should not return your stock certificate or send documents representing common stock with the proxy card. If the merger is completed, the paying agent for the merger will send you a letter of transmittal and related materials and instructions for exchanging your shares of common stock for the merger consideration.

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THE MERGER (PROPOSAL 1)

Certain Effects of the Merger

If the merger agreement is adopted by the Company’s stockholders and the other conditions to the closing of the merger are either satisfied or waived, Merger Sub will be merged with and into the Company with the Company being the surviving corporation in the merger.

Upon the consummation of the merger, each share of common stock issued and outstanding immediately prior to the effective time (other than shares held by the Company, any wholly owned subsidiary of the Company, Holdings, Parent or Merger Sub, which will be cancelled, or by stockholders who have properly exercised and perfected appraisal rights under Delaware law) will be converted into the right to receive $40.50 in cash, without interest and less any applicable withholding taxes.

Our common stock is currently registered under the Exchange Act and is quoted on the NYSE under the symbol “LXK.” As a result of the merger, the Company will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent. Following the consummation of the merger, our common stock will be delisted from the NYSE and deregistered under the Exchange Act, and the Company will no longer be required to file periodic reports with the SEC with respect to our common stock, in each case in accordance with applicable law, rules and regulations.

Background of the Merger

As part of their ongoing evaluation of the Company’s business, the board and the Company’s senior management periodically review, consider and assess the Company’s operations, financial performance and industry conditions as they may affect the Company’s long-term strategic goals and plans.

Beginning in 2010, in light of domestic and foreign challenges facing the industry in which the Company’s Imaging Solutions and Services (“ISS”) segment conducts its business, including increasing competition from hardware and supplies producers, the Company undertook more than a dozen acquisitions, including the acquisition of Kofax Limited in May 2015, to expand its product and service offerings into software and solutions, which businesses currently make up the Company’s Enterprise Software (“ES”) segment. Also during this period, the Company announced in August 2012 that it was exiting the development and manufacturing of inkjet technology, and in the second quarter of 2013 the Company completed the sale of its inkjet-related technology and assets to Funai Electric Co., Ltd.

In July 2015, the board held a regularly scheduled meeting at which the board discussed the continuing industry challenges facing the Company, continuing declines in the Company’s ISS segment and other challenges facing the Company’s businesses. At this meeting, the board directed members of the Company’s senior management to begin to meet on a regular basis with representatives of Goldman Sachs, which had been engaged as the Company’s financial advisor several times in recent years in connection with a number of the Company’s acquisitions and had periodically advised the board with respect to reviews of strategic alternatives, to discuss market conditions and the Company’s potential opportunities for business combinations, dispositions or acquisitions and other financial and strategic alternatives reasonably available to the Company. In addition, following consultation with directors and in furtherance of the board’s prior direction, in late September 2015 members of the Company’s senior management met in Japan with representatives of three potential strategic acquirors to preliminarily gauge their interest in exploring a potential transaction involving the Company should the board determine to pursue that path.

On October 22, 2015, at a regularly scheduled board meeting held in Lexington, Kentucky, the board reviewed the Company’s five-year strategic financial plan and discussed with members of senior management and representatives of Goldman Sachs and Wachtell, Lipton, Rosen & Katz, the Company’s outside legal counsel (“Wachtell Lipton”), the challenges facing the industry and the Company and potential strategic alternatives reasonably available to the Company. Members of senior management also discussed with the board the

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meetings that had been held in Japan during the prior month with the three potential strategic acquirors. After discussion, the board determined that it was in the best interests of the Company and its stockholders to undertake an exploration of strategic alternatives reasonably available to the Company to enhance shareholder value, including a potential sale of the Company, a spin-off, sale or other disposition of the Company’s ISS segment or ES segment or remaining as a standalone public company. The board further determined that the Company should publicly announce the board’s decision to undertake such an exploration. The board authorized senior management, with the assistance of the Company’s financial and legal advisors, to commence a process that would include approaching both potential strategic acquirors and financial sponsors. The board also discussed with representatives of Wachtell Lipton terms of the confidentiality agreements that each interested party would be required to sign prior to receiving nonpublic information about the Company. At the meeting, the board formed a transaction committee (the “Transaction Committee”) comprised of three independent directors, Jean-Paul Montupet (who was appointed Chairman of the Transaction Committee), Stephen R. Hardis and Kathi P. Seifert, to be kept apprised of developments and consulted between full board meetings and make recommendations as appropriate to the full board for its consideration.

Later on October 22, 2015, The Wall Street Journal reported on its website that the Company was exploring strategic alternatives, including a possible sale of the Company.

On October 23, 2015, the Company issued a press release announcing that the board had authorized the exploration of strategic alternatives to enhance shareholder value.

On November 10, 2015, the Transaction Committee held a meeting with members of senior management at which they discussed the status of the Company’s strategic alternatives review process and contacts made and received since the Company’s public announcement on October 23, as well as reactions of shareholders, customers and employees to the public announcement.

Between late October 2015 and early December 2015, representatives of Goldman Sachs responded to numerous inbound inquiries prompted by the Company’s public announcement and contacted 24 potential strategic acquirors and 37 financial sponsors. Goldman Sachs distributed initial marketing materials, based on publicly available information, to all 61 parties, and invited parties interested in receiving nonpublic information about the Company and the strategic alternatives review process to enter into confidentiality agreements. Nine potential strategic acquirors and 22 financial sponsors entered into confidentiality agreements, which also included customary standstill provisions (which provisions were suspended in accordance with their terms upon the execution of the merger agreement). Goldman Sachs provided each party that had executed a confidentiality agreement with a confidential information memorandum that Company management had prepared after consultation with Goldman Sachs. The confidential information memorandum provided business and financial information concerning the Company and its operations including prospective financial information through fiscal 2019 derived from the Company’s five-year strategic financial plan. Each of these parties was instructed to submit a first-round, non-binding proposal on or before December 9, 2015, to acquire all equity interests in the Company. Potential bidders that had expressed interest in acquiring the ISS business or ES business on a standalone basis were advised that the Company would permit the submission of such proposals.

During October and November 2015, representatives of Goldman Sachs and Wachtell Lipton assisted the Company’s management in gathering due diligence materials that would be made available to potential bidders invited to participate in the second round of the process, if any. During November and December 2015, members of the Company’s management and representatives of Goldman Sachs provided bidders with the Company’s responses to diligence questions received from bidders that had executed confidentiality agreements.

On November 25, 2015, Company A, a potential strategic acquiror, submitted a proposal to acquire the entire Company with a per share indicative range of $35.00 to $40.00. Company A subsequently entered into a confidentiality agreement with the Company and received the confidential information memorandum.

On December 1, 2015, representatives of Company B, a potential strategic acquiror that had previously entered into a confidentiality agreement with the Company and with whom members of senior management had met in

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Japan in late September 2015, attended a detailed management presentation at the offices of Goldman Sachs in New York. The Company had agreed to the meeting with Company B in advance of the deadline for first round proposals based on the belief that Company B might view a potential combination with the Company as strategically compelling and, as a result, might be incentivized to submit an attractive proposal early in the process. The other two potential Japanese strategic acquirors with whom members of senior management had met in September indicated that they did not wish to pursue a potential transaction with the Company.

On December 2, 2015, the Transaction Committee held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton to receive an update on the status of outbound and inbound contacts with potentially interested parties and on the prior day’s meeting with Company B.

On or around December 9, 2015, the Company, through Goldman Sachs, received 14 first-round all-cash proposals, six from potential strategic acquirors and eight from financial sponsors.

Nine parties, including two potential U.S. strategic acquirors and two potential non-U.S. strategic acquirors, submitted proposals to acquire the entire Company. These parties included Apex, with Seine (which owns a controlling interest in Apex as described elsewhere in this proxy statement) submitting this and subsequent proposals on Apex’s behalf (with a per share indicative range of $40.00 to $43.00), Company A (with a per share indicative range of $40.00 to $44.00), Company C (with a per share indicative range of $40.00 to $45.00), Sponsor D (with a per share indicative range of $42.00 to $44.00) and Sponsor E (with a per share indicative range of $42.00 to $43.00). The remaining whole-Company proposals, which were received from parties that were not subsequently invited to participate in the second round of the process, all indicated lower values.

Five parties—including Apex, Company B and Company F, who would be invited to participate in the second round of the process—submitted proposals to acquire the Company’s ISS segment on a standalone basis. The indicative price ranges for these proposals, which were subject to various assumptions, were between $1.5 billion and $2.5 billion. Two parties that indicated prices not deemed to be competitive with the other proposals received were subsequently not invited to participate in the second round of the process.

Six parties—including Sponsor E, Sponsor G, Sponsor H and Company I, who would be invited to participate in the second round of the process—submitted proposals to acquire the Company’s ES segment on a standalone basis. The indicative price ranges for these proposals, which were subject to various assumptions, were between $1.4 billion and $2.25 billion. The two parties that indicated the lowest prices were not subsequently invited to participate in the second round of the process.

On December 14, 2015, the Transaction Committee held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton to review the first-round proposals, discuss, in consultation with management and Goldman Sachs, preliminary recommendations for next steps in the strategic alternatives review process and determine recommendations for the Transaction Committee to make to the full board.

On December 17, 2015, the board held a meeting to review and discuss the first-round proposals with members of senior management and representatives of Goldman Sachs and Wachtell Lipton and to receive and discuss the Transaction Committee’s recommendation on next steps. Representatives of Goldman Sachs provided preliminary financial analyses of the proposals received, the Company, and alternatives to a sale of the Company, including a spin-off or sale of the ISS segment or ES segment, or remaining as a standalone public company. The members of the board also discussed with members of senior management and representatives of Goldman Sachs and Wachtell Lipton the various challenges the Company was facing and the impact of those challenges on these alternatives. The Transaction Committee recommended that the board invite 10 parties that had submitted first round proposals—Apex, Company A, Company B, Company C, Sponsor D, Sponsor E, Company F, Sponsor G, Sponsor H and Company I—to proceed to a second-round bidding process. After discussion, the board determined to proceed as recommended by the Transaction Committee.

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Over the next several days, representatives of Goldman Sachs communicated the board’s decisions to all parties that had submitted proposals in the first round. Goldman Sachs informed each bidder invited to participate in the second round that second-round, non-binding proposals would be due on or before February 5, 2016, and that more detailed instructions regarding the process would be provided in due course. On December 23, 2015, the ten second-round participants were provided access to a virtual data room that contained detailed business, financial, regulatory, legal and other information concerning the Company.

On December 24, 2015, Sponsor H informed representatives of Goldman Sachs that it had determined not to participate further in the process.

From late December 2015 into early January 2016, members of management and representatives of Goldman Sachs provided bidders with the Company’s responses to diligence requests from the remaining bidders regarding the Company’s business operations and financial, legal, tax, human resources and other matters concerning the Company. Throughout January 2016, the Company’s management gave separate detailed, in-person presentations to representatives of all remaining bidders, other than Company B, which had earlier received such a presentation. In addition, during mid-January, Apex and Company C separately visited the Company’s Boulder, Colorado manufacturing facility, and Sponsor D visited the Company’s ES offices in Irvine, California.

On January 14, 2016, representatives of Goldman Sachs sent letters to all remaining bidders describing the requirements established by the board for the second round of the process. The letters stated that all second-round non-binding proposals should specify the proposed consideration (either on a per-share basis, in the case of a proposal for the whole Company, or as an absolute cash amount, in the case of a proposal for the ISS segment or the ES segment only), material conditions, terms or assumptions on which the proposal was based, outstanding confirmatory due diligence items, proposed financing sources, required approvals and anticipated timing, and should include a memorandum summarizing material changes intended to be made by the bidder to the form of merger agreement to be provided by the Company to all remaining participants.

On January 20, 2016, a form of merger agreement was made available to the remaining second-round participants.

On January 22, 2016, the Transaction Committee held a meeting to discuss with members of senior management and representatives of Goldman Sachs and Wachtell Lipton recent developments in the process and the progress of the remaining bidders and the then-current state of the capital markets.

On January 29, 2016, Company B informed Mr. Paul Rooke, the Company’s Chairman and Chief Executive Officer, of its decision to withdraw from the process.

In late January and early February 2016, the Company made available to Goldman Sachs and all remaining bidders updated prospective information for the Company’s five-year strategic plan for fiscal years 2016 through 2019, reflecting revised assumptions regarding currency exchange rates in light of changing market conditions (see “—Projected Financial Information”).

On February 3, 2016, representatives of Sponsor D met with members of management at the Company’s offices in Irvine, California.

On February 5, 2016, the Company, through Goldman Sachs, received seven second-round all-cash proposals. Four bidders submitted proposals to acquire the entire Company: Apex (with a per share indicative range of $43.00 to $45.00), Company A (with a per share indicative range of $33.00 to $38.00), Company C (with a per share indicative range of $42.00 to $44.00) and Sponsor D (with a per share indicative range of $30.00 to $32.00). In its proposal, Company A indicated that it expected support for the equity financing component of a potential transaction from two prominent U.S. private equity firms. Three bidders submitted proposals to acquire

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the ES segment on a standalone basis at prices ranging from $1.35 billion to $1.65 billion, and Apex submitted a proposal to acquire the ISS segment on a standalone basis for $2.6 billion. Each of the second-round proposals to acquire the ISS segment or the ES segment on a standalone basis assumed, among other things, that such business would be acquired on a debt-free, cash-free basis.

On February 8, 2016, the Transaction Committee held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton to review and discuss the second-round proposals, including certain regulatory considerations regarding a potential transaction with some of the bidders and other issues raised by bidders regarding the form of merger agreement that had been made available to them, and to consider recommendations to be made to the full board. The Transaction Committee was provided updates that had been made to the prospective information in the Company’s five-year strategic financial plan to reflect the revised assumptions regarding currency exchange rates. The members of the Transaction Committee discussed with representatives of Goldman Sachs and Wachtell Lipton the values of the proposals received for the whole company and the ISS and ES segments on a standalone basis, the significantly increased execution risk associated with successfully completing one or more separate transactions involving the ES and the ISS segments and the substantial uncertainty regarding whether separate transactions would provide additional value due to the potential costs of separating the segments. In light of these factors, the Transaction Committee resolved to recommend that the board consider only proposals to acquire the whole Company in the third round of the process.

On February 9, 2016, the board held a meeting to review and discuss the second-round proposals received with members of senior management and representatives of Goldman Sachs and Wachtell Lipton. Representatives of Goldman Sachs provided preliminary financial analyses of proposals received, the Company, and alternatives to a sale of the Company. There was a discussion regarding various challenges the Company was facing and the impact of those challenges on those alternatives. Representatives of Goldman Sachs also presented a preliminary analysis of management’s estimates of the potential costs associated with separating the Company’s ISS and ES segments and the board was provided by management with the updated five-year strategic financial plan information that had been discussed with the Transaction Committee the previous day. At the meeting, the Transaction Committee recommended that the board invite three bidders—Apex, Company A and Company C—to proceed to a third round of the process. After a discussion of the various risks and potential costs associated with separating the ISS and ES segments, the relative value of the proposals received for the whole company and the ISS and ES segments on a standalone basis, and the other factors discussed at the meeting of the Transaction Committee the prior day, the Transaction Committee recommended that the board consider only proposals to acquire the whole Company in the third round of the process. In addition, based on its view that Sponsor D’s proposal was not competitive with other proposals to acquire the whole Company, the Transaction Committee recommended that Sponsor D not be invited to proceed to the third round.

The board and its advisors discussed the recommendations of the Transaction Committee, the issues raised by the bidders regarding the form of merger agreement that had been provided and certain regulatory considerations regarding a potential transaction with some of the bidders. The board determined to proceed as recommended by the Transaction Committee and instructed Goldman Sachs to invite Apex, Company A and Company C to submit fully financed proposals for an acquisition of the Company by March 3, 2016, and to encourage bidders to discuss the form of merger agreement with Wachtell Lipton and submit a full mark-up of the merger agreement in advance of the third-round bid submission deadline. The board also instructed Goldman Sachs on the messages to be communicated to each bidder, including that each of Apex, Company A and Company C would need to consider raising its bid.

On February 9, 2016, following the board meeting, representatives of Goldman Sachs contacted representatives of Apex, Company A, Company C, Sponsor D, Sponsor E, Sponsor G and Company I to inform them of the board’s determination. Later that same day, Company C communicated a revised proposal to representatives of Goldman Sachs to acquire the Company with a per share indicative range of $44.00 to $46.00.

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On February 11, 2016, representatives of Company A met with members of management at the Company’s offices in Irvine, California.

On February 18, 2016, the board held a meeting at the Company’s offices in Lexington, Kentucky with members of senior management and representatives of Goldman Sachs and Wachtell Lipton to review and discuss the progress of the third round of the process.

On February 23, 2016, Seine, Apex and representatives of potential equity financing sources to Apex met with members of the Company’s senior management team to discuss the Company’s business strategy and operations and potential revenue and cost synergies at the Company’s offices in Lexington, Kentucky.

On February 27, 2016, representatives of Skadden, Arps, Slate, Meagher & Flom LLP, Seine’s and Apex’s outside legal counsel (“Skadden”), delivered a mark-up of the form of merger agreement to representatives of Wachtell Lipton.

From mid-February through early March 2016, members of the Company’s management continued to participate in telephone conference calls with the remaining bidders to answer diligence questions regarding the Company’s business operations and financial, legal, tax, human resources and other matters concerning the Company. In addition, during this period, representatives of Wachtell Lipton discussed each of Company B’s, Company C’s and Apex’s comments on the form of merger agreement with their respective outside counsels, and representatives of Goldman Sachs discussed various terms of the draft merger agreement with representatives of the bidders’ respective financial advisors.

On March 1, 2016, representatives of Company C delivered a mark-up of the form of merger agreement to representatives of Goldman Sachs.

On March 3, 2016, the Company, through Goldman Sachs, received third-round proposals from Company A and Company C. Company C proposed to acquire the Company for a per share price of $46.00 and included with its proposal preliminary letters of intent from several potential debt and equity financing sources. Company A’s proposal to acquire the Company specified a per share indicative range of $33.00 to $38.00, unchanged from Company A’s second-round proposal, and identified several potential equity and debt financing sources. Company A’s proposal did not include a mark-up of the form of merger agreement. Both Company A and Company C requested additional time to secure committed financing for their proposals.

Also on March 3, 2016, representatives of Seine and Apex informed representatives of Goldman Sachs that they had been unable to secure committed transaction financing in time for the third-round deadline and were not in a position to submit a proposal. Nevertheless, Seine and Apex expressed strong interest in remaining in the process and indicated that Apex intended to submit a fully financed proposal within the next two weeks.

On March 4, 2016, the Transaction Committee held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton to review and discuss the third-round proposals received, the failure of Seine and Apex to submit a third-round proposal, the status of the bidders’ transaction financing and the key merger agreement issues that had been raised by the mark-ups submitted by Company C and Seine and Apex concerning, among other matters, conditionality and transaction certainty (including enforceability of contractual commitments), the level of commitment of the potential acquiror to obtain required regulatory approvals and other considerations regarding regulatory matters, deal protection provisions, the circumstances under which various termination fees would be payable by the Company or the acquiror and the amounts of such termination fees. After discussion, in light of the uncertain status of the bidders’ financing, the Transaction Committee determined to allow Company A and Company C additional time to secure committed financing, directing Goldman Sachs to instruct Company A and Company C to continue their efforts to secure financing commitments and to stay in regular contact with representatives of Goldman Sachs regarding their progress, and to communicate to Company A that its proposal was disappointing, and that the board would not transact at its

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proposed price. The Transaction Committee also directed Goldman Sachs to inform Seine and Apex that they were excluded from further participation in the process at this time given their failure to submit a third-round proposal. Following the meeting, representatives of Goldman Sachs communicated these messages to representatives of Company A, Company C and Seine and Apex.

During the first weeks of March 2016, representatives of Goldman Sachs and Wachtell Lipton conducted regular telephone conference calls with representatives of Company A and Company C (and with representatives of Seine and Apex following Apex’s March 10, 2016 proposal submission described below) to discuss, among other things, their progress on securing committed financing and the parties’ respective analyses of regulatory requirements relating to a potential transaction and to negotiate various issues in the merger agreement.

On March 6, 2016, representatives of Wachtell Lipton provided a revised draft merger agreement to Company C’s outside legal counsel.

On March 10, 2016, the Company, through Goldman Sachs, received from Apex a proposal to acquire the Company at a price of $38.00 per share. The proposal outlined commitments from the Consortium for the equity-financed portion of the proposed consideration, but requested additional time to finalize definitive debt commitment letters for the remainder. Apex’s proposal also included a revised mark-up of the form of merger agreement.

On March 11, 2016, representatives of Goldman Sachs informed representatives of Seine, Apex and PAG (which, along with Legend Capital, had joined Apex to form the Consortium) that, if the Consortium wished to continue to participate in the process, the Consortium would need to acknowledge its ability and willingness to transact at a higher price than that contained in its proposal from March 10, 2016. The representatives of the Consortium acknowledged this message and stated that they would take it under consideration.

On March 12, 2016, a representative of Goldman Sachs spoke with a representative of Company C’s financial advisor regarding Company C’s progress toward securing committed financing. Company C’s representative stated that Company C’s delay in obtaining transaction financing was due in significant part to disagreements among Company C’s equity consortium members on the terms of their proposed investments, and that Company C and its equity consortium had set a deadline for themselves of March 20, 2016 for finalization and submission to the Company of all financing commitments.

Also on March 12, 2016, representatives of Wachtell Lipton discussed Apex’s merger agreement mark-up with representatives of Skadden and, on March 13, 2016, provided representatives of Skadden a revised draft of the merger agreement.

On March 14, 2016, representatives of Company C’s legal counsel sent a revised draft merger agreement to representatives of Wachtell Lipton and, on March 16, 2016, representatives of the two legal counsels engaged in negotiations regarding the draft. On March 18, 2016, representatives of Wachtell Lipton provided a revised draft merger agreement to representatives of Company C’s legal team.

On March 15, 2016, a representative of Goldman Sachs spoke with a representative of Company A’s financial advisor concerning Company A’s progress in arranging transaction financing, and encouraged Company A to continue its efforts if it remained interested in pursuing a potential transaction. This followed the board’s discussion and determination at prior meetings that Company A was a promising candidate as a potential acquiror because as a U.S. company it did not face as many regulatory issues and enforceability challenges in a transaction with the Company, and because its proposed equity partners in a potential transaction were well-known private equity firms in the United States with significant financial resources and past experience with transactions of similar size and sophistication.

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On March 17, 2016, the Company made available to the remaining bidders revised prospective financial information for the Company’s first fiscal quarter of 2016, to reflect an expected shortfall from plan amounts.

On March 22, 2016, representatives of Goldman Sachs received revised financing documentation from representatives of Company C’s financial advisor. The following day, representatives of Wachtell Lipton and Goldman Sachs discussed the revised financing documentation with Company C’s legal and financial advisors, informing Company C’s advisors that the documentation, in form and substance, were not customary and did not reflect committed financing upon which the Company would agree to transact. Following discussion, Company C’s advisors agreed to provide a copy of the capital funding agreement that Company C’s equity financing sources had been negotiating (which was never subsequently provided), and the Company’s advisors agreed to provide Company C with a draft form of equity commitment letter that would be acceptable to the Company, which Wachtell Lipton provided to Company C’s legal advisors the next day. Company C and its advisors never responded to this draft.

On March 24, 2016, representatives of Skadden sent a revised draft of the merger agreement to representatives of Wachtell Lipton.

Also on March 24, 2016, a representative of Moelis & Company, the Consortium’s financial advisor (“Moelis”), spoke with a representative of Goldman Sachs regarding the Consortium’s desire to conduct in-person negotiations in New York on an exclusive basis during the week of March 28. The representative of Goldman Sachs informed Moelis that, while the Company was prepared to meet in person at the appropriate time, the Company preferred not to do so until such time as the Consortium had obtained and provided evidence of committed debt financing for the transaction. The representative of Goldman Sachs further informed Moelis that granting the Consortium’s request for exclusive negotiations at this time would not be appropriate in light of the other bidders in the process, the status of the Consortium’s financing commitments and the fact that the parties remained significantly apart on important business and contractual terms, including, among other open points, transaction price.

Later on March 24, 2016, representatives of Goldman Sachs exchanged emails with Mr. Dongying Wang, the Chairman of Apex and Seine, and Mr. Weijian Shan, the Group Chairman of PAG Asia Capital, with Mr. Shan expressing confidence that the Consortium had reached substantive agreement on debt financing with Bank of China Limited, although noting that delivery of final documentation was delayed due to internal bank processes. Mr. Shan reiterated the Consortium’s desire to meet the week of March 28 in light of other scheduled travel obligations that would impede their ability to meet in person following the week of April 4. The representative of Goldman Sachs again communicated the Company’s desire to receive secured debt and equity financing documentation prior to any in-person meeting, and agreed that the parties target the week of April 4 for an in-person meeting.

Later still on March 24, 2016, representatives of Goldman Sachs discussed with representatives of Company C’s financial advisor a proposed path for Company C to progress its proposal, in particular by providing additional details on Company C’s proposed financing, and by continuing negotiations of the draft merger agreement, regarding which representatives of Company C and its legal advisor had not responded to the Wachtell Lipton draft delivered on March 18. The representatives of Company C’s financial advisor acknowledged this message and stated that they would take it to Company C for consideration.

On March 27, 2016, representatives of Wachtell Lipton and representatives of Skadden engaged in negotiations regarding certain open issues in the draft merger agreement and other transaction documentation.

On March 28, 2016, a representative of Company C’s financial advisor informed a representative of Goldman Sachs that Company C was continuing to struggle to arrange committed financing for the transaction to a greater degree than had previously been communicated, stating that Company C’s equity consortium had not been able to agree on terms for their investment and that there could be no assurance that the financing would be achieved in the course of the next two weeks or at all.

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On March 29, 2016, representatives of Wachtell Lipton sent a revised draft of the merger agreement to representatives of Skadden, which followed their negotiations on March 27 concerning the various open points reflected in Skadden’s prior draft.

On March 30, 2016, representatives of Moelis sent representatives of Goldman Sachs draft equity commitment letters, pursuant to which the members of the Consortium would agree to fund the equity portion of the proposed transaction, and draft commitment letters from certain affiliates of Bank of China Limited, pursuant to which they would agree to provide a portion of the Consortium’s proposed debt financing.

On April 1, 2016, the Transaction Committee held a meeting to receive an update from members of senior management and representatives of Goldman Sachs and Wachtell Lipton on and to discuss developments with each of the bidders.

From April 5 to 8, 2016, members of the Company’s senior management team and representatives of Goldman Sachs and Wachtell Lipton met in New York with representatives of the Consortium, Moelis and Skadden. During this time, the parties negotiated various terms of the draft merger agreement and documentation for the debt and equity financing commitments, including the terms of a letter of credit that the board and the Company were insisting that the Consortium provide to and in favor of the Company to serve as a backstop for any termination fee payable by Parent pursuant to the merger agreement.

On April 5, 2016, a representative of the Consortium communicated to the Company’s senior management a revised offer price of $40.00 per share in cash. In addition, the parties were not able to reach agreement on certain key contract terms, including the amount of the termination fees that would be payable by the Company in the event the merger agreement were terminated under specified circumstances.

Early on April 7, 2016, media outlets began reporting that Apex was in negotiations to acquire the Company.

On April 7, 2016, Mr. Wang, Mr. Shan, a representative of Legend Capital and representatives of Skadden and outside counsel to the Company met in Washington, D.C. on a preliminary basis with representatives of certain government agencies. The meeting came at the request of representatives of the Consortium, who had deferred making a proposal regarding the termination fees to be payable in the transaction until after this meeting.

Also on April 7, 2016, a representative of Company C’s financial advisor telephoned a representative of Goldman Sachs to report that Company C was still pursuing a potential transaction with the Company and that the members of Company C’s equity consortium were again in discussions. However, the representative of Company C’s financial advisor said he could give no indication of the timing for Company C’s next steps in the process regarding the terms of its financing, nor could he provide any assurance that Company C would be able to secure financing at all.

On April 8, 2016, at Company A’s request, members of the Company’s senior management team and representatives of Goldman Sachs met with representatives of Company A and its potential financing sources to hold additional discussions regarding various aspects of the Company’s businesses and operations. No specific proposals were made by Company A’s representatives at the meeting, and no further communications from Company A’s representatives were received following this meeting.

On April 10, 2016, representatives of Skadden sent a revised draft of the merger agreement to representatives of Wachtell Lipton.

On April 10 through 12, 2016, representatives of Goldman Sachs and Wachtell Lipton and representatives of the Consortium and Skadden continued to engage in negotiations regarding certain of the open contract points in the draft merger agreement, and in particular the amounts of the termination fees to be paid by each of the Company and the acquiring entities if the merger agreement were terminated in certain circumstances and the circumstances that would trigger payment of those fees and provisions regarding regulatory matters.

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On April 12, 2016, a representative of the Consortium sent a revised set of transaction documents to representatives of Goldman Sachs, including revised drafts of the merger agreement, the debt commitment letters and the equity commitment letters. The documentation reflected the Consortium’s previously communicated offer to acquire the Company for $40.00 per share in cash.

Later on April 12, 2016, the Transaction Committee held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton. The members of senior management and the representatives of Goldman Sachs and Wachtell Lipton provided the Transaction Committee with an update on the status of the negotiations with representatives of the Consortium and the terms of the most recent proposal received from the Consortium, including the Consortium’s proposed $40.00 cash price per share and proposals regarding other merger agreement terms. The Transaction Committee also discussed the status of discussions with Company A and Company C and their respective efforts to obtain committed financing for a transaction, including the fact that representatives of Company C had not been in contact for several weeks other than the one telephone call on April 7, 2016 described above and the fact that representatives of Company A had not been in contact since the April 8, 2016 meeting described above. The Transaction Committee determined to recommend to the board that the Company authorize a counterproposal to the Consortium, as further described below.

On April 13, 2016, the board held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton. Senior management and representatives of Goldman Sachs and Wachtell Lipton discussed with the board the status of the negotiations with the Consortium and reviewed the history of negotiations with the Consortium and with the other interested parties. The board discussed with senior management and the Company’s advisors the lack of progress with Company A and Company C during the preceding several weeks, in particular the failure of either bidder to present evidence of committed financing documentation or a credible and reasonably prompt timeline for the delivery of such documentation. The board reviewed and supported the Transaction Committee’s recommendation that Goldman Sachs be authorized to respond to the Consortium’s latest proposal with a counterproposal of a transaction price of $43.00 per share, a termination fee payable by the Company of $85 million, a termination fee payable by Parent of $175 million (including termination for failure to obtain any required regulatory approval other than CFIUS clearance) or $125 million in the event of termination due to a failure to obtain CFIUS clearance, along with positions on other significant open issues.

Later on April 13, 2016, a representative of Goldman Sachs delivered the counterproposal to the Consortium’s representative, along with a revised draft of the merger agreement, and communicated to the Consortium’s representative that the board would be willing to move forward expeditiously on the basis of the counterproposal.

On April 14, 2016, a representative of the Consortium informed a representative of Goldman Sachs that the Consortium would need access to additional information in order to respond to the board’s April 13 counterproposal, including preliminary results of the Company’s financial performance for the first fiscal quarter of 2016 (see “—Projected Financial Information”) and an update on specified diligence matters. Later on April 14, 2016, the Company made the requested information available to representatives of the Consortium, and the Company’s Chief Financial Officer held a telephonic conference call to discuss the information with representatives of the Consortium.

On April 15, 2016, a representative of the Consortium delivered a written proposal to representatives of Goldman Sachs, reiterating the Consortium’s prior proposal of $40.00 per share.

Later on April 15, 2016, the Transaction Committee held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton. After receiving an update from management and the advisors on the negotiations with the Consortium, the Transaction Committee authorized Goldman Sachs and Wachtell Lipton to negotiate further with the Consortium to seek an increase in the per share merger consideration and to communicate a counterproposal regarding the amount of the termination fees, along with positions on other significant open issues.

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Later on April 15, 2016, a representative of Goldman Sachs spoke with a representative of the Consortium as directed by the Transaction Committee, after which the Transaction Committee reconvened with members of senior management and the Company’s financial and legal advisors in attendance. The representative of Goldman Sachs reported that the Consortium’s representative had agreed to consider the Company’s proposed termination fee amounts and payment triggers, and that the Consortium would increase the per share merger consideration to $40.50, but no further. That evening, representatives of the Company and the Consortium and their respective legal advisors discussed and resolved certain remaining open issues in the draft merger agreement.

On April 17, 2016, the board held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton. At the meeting, members of management and the Company’s legal and financial advisors reviewed with the board the terms of the transaction proposed by the Consortium, including the increase in price to $40.50 per share in cash, and discussed the status of negotiations with the Consortium. The board also discussed with senior management and the advisors the lack of further communications by Company A and Company C. The board, in consultation with representatives of Goldman Sachs, reviewed the course of the Company’s exploration of strategic alternatives reasonably available to the Company, and the fact that the process had led to only one credible, financed acquisition proposal (from the Consortium) from among the many bidders that were engaged at various points in the review process over the past several months. Representatives of Wachtell Lipton reviewed with the board in detail the material terms of the draft merger agreement and related transaction documentation, including the letter of credit to be provided by the Consortium in favor of the Company in the amount of the maximum termination fee payable by Parent, the debt and equity commitment letters, and the remaining open issues. The board authorized the Company’s management and legal and financial advisors to proceed with negotiations with the Consortium to determine if agreement could be reached on all remaining issues, including the amounts of and triggers for the termination fees and matters concerning the letter of credit, which the Consortium had advised it could not deliver in the coming several days due to internal bank processes.

From April 17 to April 19, 2016, representatives of Wachtell Lipton and Skadden exchanged and engaged in negotiations regarding the draft merger agreement, equity and debt commitment letters, and other related documentation, by the conclusion of which all remaining open issues were resolved, including with respect to the amounts of and triggers for the termination fees payable by each of Parent and the Company and with respect to the letter of credit.

On April 19, 2016, the board held a meeting with members of senior management and representatives of Goldman Sachs and Wachtell Lipton in attendance. The Company’s senior management and its legal and financial advisors reviewed with the board the course of the strategic alternatives review process that the Company had first embarked upon in October 2015, the terms of the proposal made by the Consortium, including as compared to the merits and considerations of remaining as a standalone entity and as compared to the proposals made by Company A and Company C over the course of the strategic alternatives review process (and the substantial uncertainties associated with the proposals of Company A and Company C). Representatives of Goldman Sachs reviewed with the board Goldman Sachs’s financial analyses of the $40.50 per share cash consideration to be paid to the Company’s stockholders in the proposed merger and delivered to the board Goldman Sachs’s oral opinion, subsequently confirmed in writing, that, as of April 19, 2016 and based upon and subject to the factors and assumptions set forth therein, the $40.50 per share in cash to be paid to the holders of the Company’s common stock (other than Holdings and its affiliates) pursuant to the merger agreement was fair, from a financial point of view, to such holders. See “—Opinion of Goldman, Sachs & Co.” Representatives of Wachtell Lipton reviewed with the board the resolution of the points in the merger agreement that had remained open as of the board’s prior meeting but which had since been resolved. In its deliberations, the board considered, among other factors discussed under “—Reasons for the Merger,” that Company C had proposed a transaction price in excess of the $40.50 per share consideration to be paid pursuant to the merger agreement but, despite ample time and opportunity, had failed to present a credible and financed proposal or any evidence of committed financing or the ability to secure such financing, had failed to engage meaningfully with the Company and its advisors for several weeks, and that as of the last time representatives of Company C had credibly engaged in

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negotiations of the merger agreement, a number of their proposed provisions were less favorable to the Company and its stockholders than those agreed with the Consortium, all of which in the board’s view rendered Company C’s proposed transaction not reasonably available to the Company. Following extensive discussion, the board determined, by the unanimous vote of the directors present, to approve the merger and the merger agreement and the transactions contemplated thereby and to recommend that stockholders of the Company adopt the merger agreement.

Following the board’s approval of the merger and the merger agreement, representatives of the parties executed the merger agreement and the other transaction documents in the early evening on April 19, 2016.

Thereafter, on April 19, 2016, the Company issued a press release announcing its entry into the merger agreement.

Reasons for the Merger

At a meeting duly called and held on April 19, 2016, the board determined that the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, the Company and its stockholders and approved and declared advisable the merger agreement and the merger and the other transactions contemplated by the merger agreement, in each case by the unanimous vote of the directors present at such meeting. The board also resolved that the merger agreement be submitted for consideration by the stockholders of the Company at a special meeting of stockholders and to recommend that the stockholders of the Company vote to adopt the merger agreement. The board consulted with the Company’s outside financial and legal advisors and senior management at various times and considered a number of factors, including the following principal factors (not in any relative order of importance) that the board believes support its decision:

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The board also considered various potentially countervailing factors in its deliberations related to the merger, including the following:

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The foregoing discussion of the information and factors considered by the board is not intended to be exhaustive, but includes the material factors considered by the board. The board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The board based its recommendation on the totality of the information it considered.

In considering the recommendation of the board with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers have interests in the merger that are different from, or in addition to, yours. The board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that the merger agreement be adopted by the stockholders of the Company. See the section entitled “—Interests of the Company’s Directors and Executive Officers in the Merger—Quantification of Payments and Benefits to the Company’s Named Executive Officers.”

Recommendation of the Company’s Board of Directors

After careful consideration, the board has approved the merger agreement and determined that the merger agreement is advisable, fair to and in the best interests of the Company and its stockholders, in each case by the unanimous vote of the directors present at the meeting held to approve the transaction.

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The board unanimously recommends that the stockholders of the Company vote “FOR” the proposal to adopt the merger agreement.

Opinion of Goldman, Sachs & Co.

Goldman Sachs rendered its opinion to the Company’s board that, as of April 19, 2016, and based upon and subject to the factors and assumptions set forth therein, the $40.50 in cash per share of common stock to be paid to the holders (other than Holdings and its affiliates) of common stock pursuant to the merger agreement was fair from a financial point of view to such holders.

The full text of the written opinion of Goldman Sachs, dated April 19, 2016, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided its opinion for the information and assistance of the Company’s board in connection with its consideration of the merger. The Goldman Sachs opinion is not a recommendation as to how any holder of common stock should vote with respect to the proposal to adopt the merger agreement or any other matter.

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

Goldman Sachs also held discussions with members of the senior management of the Company regarding their assessment of the past and current business operations, financial condition and future prospects of the Company; reviewed the reported price and trading activity for shares of common stock; compared certain financial and stock market information for the Company with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the printing and imaging and software industries and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

For purposes of rendering its opinion, Goldman Sachs, with the Company’s consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed with the Company’s consent that the Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of the Company or any of its subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on the expected benefits of the merger in any way meaningful to its analysis. Goldman Sachs has also assumed that the merger will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

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Goldman Sachs’ opinion does not address the underlying business decision of the Company to engage in the merger or the relative merits of the merger as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs’ opinion addresses only the fairness from a financial point of view to the holders (other than Holdings and its affiliates) of common stock, as of the date of the opinion, of the $40.50 in cash per share to be paid to such holders pursuant to the merger agreement. Goldman Sachs’ opinion does not express any view on, and does not address, any other term or aspect of the merger agreement or the merger or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the merger, including the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons in connection with the merger, whether relative to the $40.50 in cash per share to be paid to the holders (other than Holdings and its affiliates) of common stock pursuant to the merger agreement or otherwise. Goldman Sachs does not express any opinion as to the impact of the merger on the solvency or viability of the Company, Holdings, Parent or Apex or the ability of the Company, Holdings, Parent or Apex to pay their respective obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary market and other conditions, as in effect on, and the information made available to it as of the date of the opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. Goldman Sachs’ opinion was approved by a fairness committee of Goldman Sachs.

The following is a summary of the material financial analyses delivered by Goldman Sachs to the board in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before April 18, 2016, the last trading day before the meeting of the board that approved the merger, and is not necessarily indicative of current market conditions.

Historical Stock Trading Analysis. Goldman Sachs reviewed the historical trading prices and volumes for shares of common stock for the five-year period ended April 18, 2016. In addition, Goldman Sachs analyzed the consideration to be paid to holders of shares of common stock pursuant to the merger agreement in relation to (i) the closing price per share of common stock on October 21, 2015, the last trading day prior to news of the Company’s exploration of strategic alternatives becoming public, (ii) the closing price per share of common stock on April 18, 2016, the last trading day before the meeting of the board that approved the merger, (iii) the volume weighted average price per share of common stock (“VWAP”) for the preceding one-month, three-month, six-month, nine-month, one-year, two-year, three-year, and five year periods ended April 18, 2016 and (iv) the high and low trading prices per share of common stock over the one-year period ended April 18, 2016. This analysis indicated that the price per share of common stock to be paid to the Company stockholders pursuant to the merger agreement represented:

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Selected Companies Analysis. Goldman Sachs reviewed and compared certain financial information for the Company to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the hardware, content management software and mid-cap software sectors (collectively referred to as the “selected companies”):

Hardware

Content Management Software

Mid-Cap Software

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Although none of the selected companies is directly comparable to the Company, the selected companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of the Company.

Goldman Sachs calculated and compared various financial multiples based on market data as of April 18, 2016 and Institutional Brokers’ Estimate System (“IBES”) estimates and, in the case of the Company, both IBES estimates and the Forecasts. With respect to its analysis, Goldman Sachs calculated for the Company and the selected companies:

Illustrative Present Value of Future Share Price Analysis. Goldman Sachs performed an illustrative analysis of the implied present value of the Company’s future value per share of common stock, which is designed to provide an indication of the present value of a theoretical future value of a company’s equity as a function of (1) the company’s estimated future EBITDA and its assumed forward EV to EBITDA multiple and (2) the company’s estimated future earnings and its assumed share trading price to future earnings per share multiple. For this analysis, Goldman Sachs used the Forecasts for each of the years 2016 through 2018 to calculate an illustrative range of implied present values per share as of December 31, 2015 (based on the number of fully diluted outstanding shares of the Company, as provided by management of the Company and calculated using the Treasury Stock Method). Goldman Sachs first calculated illustrative implied future equity values per share of common stock for each of the years 2016 through 2018 by (a) applying the next twelve month EV to forward EBITDA multiples, which we refer to as “Forward EV/EBITDA,” ranging from 5.0x to 6.0x to estimated EBITDA for each of the years 2016 through 2018 and (b) applying the next twelve month price to forward earnings per share of common stock, which we refer to as “Forward P/E”, multiples ranging from 8.5x to 10.5x to estimated earnings per share of common stock for each of the years 2016 through 2018. These implied per share future equity values were then discounted back to December 31, 2015, using an illustrative discount rate of

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12.7%, reflecting an estimate of the Company’s cost of equity. This analysis resulted in an illustrative range of implied present values per share of (i) $27.17 to $38.06 based on the Forward EV/EBITDA multiples and (ii) $28.96 to $35.79 based on the Forward P/E multiples.

Illustrative Discounted Cash Flow Analysis. Using the Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis on the Company. Using discount rates ranging from 9.50% to 10.50%, reflecting estimates of the Company’s weighted average cost of capital, Goldman Sachs discounted to present value as of December 31, 2015 (1) estimates of unlevered free cash flow for the Company for the years 2016 through 2019 as reflected in the Forecasts and (2) a range of illustrative terminal values for the Company, which were calculated by applying perpetuity growth rates ranging from 1.50% to 2.50%, to the 2019 terminal year estimate of the free cash flow to be generated by the Company, as reflected in the Forecasts. Goldman Sachs derived ranges of illustrative enterprise values for the Company by adding the ranges of present values it derived above. Goldman Sachs then subtracted $905 million, the estimated amount of net debt of the Company as of December 31, 2016 as provided by the management of the Company, from the range of illustrative enterprise values it derived for the Company to derive a range of illustrative equity values for the Company. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of the Company, as provided by the management of the Company and calculated using the Treasury Stock Method, to derive a range of illustrative present values per share ranging from $29.85 to $40.33.

Selected Historical Premia Analysis. Goldman Sachs reviewed and analyzed, based on publicly available data, those acquisition premia, ranging from 0% to 150%, for announced transactions with disclosed Enterprise Values between $100 million and $5 billion involving target companies based in the United States from January 1, 2010 to April 18, 2016. Announced premia were calculated relative to the target’s closing share price one day, one week and four weeks, in each case, prior to announcement. The following table presents the results of these analyses:

Based on the review by Goldman Sachs of the implied premia for the selected transactions and their professional judgment and experience, Goldman Sachs calculated the illustrative premia ranging from 25.0% to 40.0% to the closing price per share of common stock on October 21, 2015, the last trading day prior to news of the Company’s exploration of strategic alternatives becoming public, and derived an illustrative range of implied values per share of common stock ranging from $38.83 to $43.48.

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to the Company or the contemplated transaction.

Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the Company’s board as to the fairness from a financial point of view of the $40.50 in cash per share to be paid to such holders pursuant to the merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results

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are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of the Company, Holdings, Parent, Apex, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

The merger consideration was determined through arm’s-length negotiations between the Company and the Consortium and was approved by the Company’s board. Goldman Sachs provided advice to the Company during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to the Company or the board or that any specific amount of consideration constituted the only appropriate consideration for the merger.

As described above, Goldman Sachs’ opinion to the Company’s board was one of many factors taken into consideration by the board in making its determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.

Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities in which they invest or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Holdings, Parent, Apex, any of their respective affiliates and third parties, including Legend Capital, PAG Asia Capital, Sino IC Capital Co. Ltd. (“Sino”) and Seine, each an affiliate of a respective significant shareholder of Holdings, and the PRC and its agencies or instrumentalities, an affiliate of Sino, and any of their respective affiliates and, in the case of Legend Capital, PAG Asia Capital and Sino, portfolio companies, or any currency or commodity that may be involved in the transactions contemplated by the merger agreement for the accounts of Goldman Sachs and its affiliates and employees and their customers. Goldman Sachs acted as financial advisor to the Company in connection with, and participated in certain of the negotiations leading to, the merger. Goldman Sachs has provided certain investment banking services to the Company and/or its affiliates from time to time for which the Investment Banking Division of Goldman Sachs has received, and may receive, compensation, including having acted as financial advisor to the Company in connection with the acquisition of Readsoft AB in May 2014 and as financial advisor to the Company in connection with the acquisition of Kofax Limited in March 2015. Goldman Sachs has also provided certain financial advisory and/or underwriting services to Legend Capital and/or its affiliates and portfolio companies from time to time for which the Investment Banking Division has received, and may receive, compensation, including having acted as joint bookrunner with respect to the initial public offering of common stock of Legend Holdings Corporation in June 2015. Goldman Sachs has also provided certain financial advisory and/or underwriting services to PAG Asia Capital and/or its affiliates and portfolio companies from time to time for which the Investment Banking Division has received, and may receive, compensation, including having acted as sole bookrunner with respect to an offering of shares of China South City Holdings Ltd., a former portfolio company of PAG Asia Capital, in July 2014 and with respect to an offering of shares of Haitong Securities Co. Ltd., a former portfolio company of PAG Asia Capital, in July 2014. Goldman Sachs has also provided certain financial advisory and/or underwriting services to the PRC and/or its affiliates from time to time for which the Investment Banking Division has received, and may receive, compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to the Company, Holdings, Parent, Apex, Legend Capital, PAG Asia Capital, Seine, Sino, the PRC and their respective affiliates and, in the case of Legend Capital, PAG Asia Capital and Sino, their respective portfolio companies for which our Investment Banking Division may receive compensation. Affiliates of Goldman Sachs also may have co-invested with Legend Capital, PAG Asia Capital, Sino and their respective affiliates from time to time and may have invested in limited partnership units of respective affiliates of Legend Capital, PAG Asia Capital and Sino from time to time and may do so in the future.

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The board selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the merger and their prior experience working with the Company as discussed in “—Background of the Merger”. Pursuant to a letter agreement dated December 9, 2015, the Company engaged Goldman Sachs to act as its financial advisor in connection with the merger. The engagement letter between the Company and Goldman Sachs provides for a transaction fee that is estimated, based on the information available as of the date of announcement, at approximately $38 million, all of which is contingent upon consummation of the merger. In addition, the Company has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Projected Financial Information

The Company does not as a matter of course make public projections as to future performance or earnings beyond the current fiscal year due to the unpredictability of the underlying assumptions and estimates and the inherent unreliability of such projections. However, financial forecasts for fiscal years 2016, 2017, 2018 and 2019 prepared by management were made available to the members of the Consortium as well as to the board and our financial advisor Goldman Sachs. We have included a summary of these projections below (the “Projections”) to give our stockholders access to certain nonpublic information provided to the members of the Consortium and our financial advisor for purposes of considering and evaluating the merger. The inclusion of the Projections should not be regarded as an indication that the board, the Company, any member of the Consortium, Holdings, Parent, Merger Sub, Goldman Sachs, or any other recipient of this information considered, or now considers, it to be an assurance of the achievement of future results.

The Company advised the recipients of the Projections that its internal financial forecasts upon which the Projections were based are subjective in many respects. The Projections reflect numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, many of which are difficult to predict, subject to significant economic and competitive uncertainties and beyond the Company’s control. As a result, there can be no assurance that the Projections will be realized or that actual results will not be significantly higher or lower than projected. The Projections were prepared for internal use and to assist the members of the Consortium and the Company’s financial advisor with their respective due diligence investigations of the Company and were not prepared with a view toward public disclosure or toward compliance with U.S. generally accepted accounting principles (“GAAP”), published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The prospective financial information included in this proxy statement has been prepared by, and is the responsibility of, the Company’s management. PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, has neither examined, compiled nor performed any procedures with respect to the Projections, and accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report incorporated by reference in this proxy statement relates to the Company’s historical financial information. It does not extend to the Projections and should not be read to do so.

Projections of this type are based on estimates and assumptions that are inherently subject to factors such as industry performance, general business, economic, regulatory, market and financial conditions, as well as changes to the business, financial condition or results of operations of the Company, including the factors described under “Cautionary Statement Concerning Forward-Looking Statements,” which factors may cause the Projections or the underlying assumptions to be inaccurate. Since the Projections cover multiple years, such information by its nature becomes less reliable with each successive year. The Projections do not take into account any circumstances or events occurring after the date they were prepared.

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The following is a summary of the Projections:

Summary of the Projections⁽¹⁾

(dollars in millions)

Readers of this proxy statement are cautioned not to place undue reliance on the specific portions of the Projections set forth above. No one has made or makes any representation to any stockholder regarding the information included in the Projections.

For the foregoing reasons, as well as the basis and assumptions on which the Projections were compiled, the inclusion of specific portions of the Projections in this proxy statement should not be regarded as an indication that such Projections will be an accurate prediction of future events, and they should not be relied on as such. Except as required by applicable securities laws, the Company does not intend to update or otherwise revise the Projections or the specific portions presented to reflect circumstances existing after the date such Projections were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

Financing

The Company and the Consortium estimate that the total amount of funds required to complete the merger and related transactions and pay related fees and expenses will be approximately $3.9 billion. We understand from the Consortium that they intend to fund this amount through a combination of the following:

The consummation of the merger is not subject to any financing condition (although funding of each of the debt financing and the equity financing is subject to the satisfaction of the conditions set forth in the applicable debt commitment letters or equity commitment letters, respectively, under which such financing will be provided).

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Equity Financing

In connection with the execution of the merger agreement, on April 19, 2016, Holdings and the Company entered into separate equity commitment letters (collectively, the “equity commitment letters”) with each of the members of the Consortium (plus, in the case of Apex, Seine) for the purpose of funding a portion of the merger consideration, as follows:

The obligation of each member of the Consortium to provide financing under its equity commitment letter as set forth above is subject to the prior satisfaction or waiver of Parent’s and Merger Sub’s conditions to closing under the merger agreement and, in the case of the commitments by Legend Capital and the PAG Funds, the concurrent funding of the equity commitments of Apex and the PAG Funds (in Legend Capital’s case) or Apex and Legend Capital (in each of the PAG Funds’ cases).

The obligation of each member of the Consortium to provide financing under its equity commitment letter will automatically terminate upon the earliest to occur of (1) the merger consideration having been paid at closing, (2) the merger agreement being terminated in accordance with its terms or (3) such member of the Consortium having fully funded its equity commitment to Holdings.

Debt Financing

In connection with the execution of the merger agreement, Apex and Merger Sub obtained a debt commitment letter (the “senior commitment letter”), pursuant to which certain affiliates of Bank of China Limited and China Citic Bank International Limited (collectively, the “senior lenders”) have agreed to provide $1.140 billion of term loan facilities to Merger Sub, which, immediately following consummation of the merger, will be secured by substantially all of the assets of Holdings, Parent and the Company and its wholly owned subsidiaries (subject to certain customary exceptions). In addition, Apex and Parent obtained a debt commitment letter (the “mezzanine commitment letter” and, together with the senior commitment letter, the “debt commitment letters”), pursuant to which certain affiliates of the senior lenders (collectively, the “mezzanine lenders” and, together with the senior lenders, the “lenders”) have agreed to provide $443 million of term loan facilities to Parent.

The obligations of the lenders to provide financing under each of the debt commitment letters are subject to certain conditions, including the following (subject to certain exceptions and qualifications as set forth in the debt commitment letters):

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Under the mezzanine commitment letter, the obligations of the mezzanine lenders to provide the mezzanine financing are also conditioned on Mr. Wang Dongying, Apex and Seine guaranteeing the mezzanine financing and supporting the mezzanine financing with certain share pledges. Each of Mr. Wang Dongying, Apex and Seine have executed a letter of undertaking addressed to the Company and Holdings committing to provide the requisite guarantees and share pledges.

The commitment of the lenders under the debt commitment letters expire upon the earliest to occur of (1) December 16, 2016, (2) as to either of the facilities, the consummation of the merger with or without the use of such facility and (3) the valid termination of the merger agreement.

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

In considering the recommendation of the board that you vote to adopt the merger agreement, you should be aware that aside from their interests as stockholders of the Company, the Company’s directors and executive officers have interests in the merger that are different from, or in addition to, those of other stockholders of the Company generally. Members of the board were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending to the stockholders of the Company that the merger agreement be adopted. See the section entitled “The Merger (Proposal 1)—Background of the Merger” and the section entitled “The Merger (Proposal 1)—Reasons for the Merger.” These interests are described in more detail below, and certain of them are quantified in the narrative and the table below.

Treatment of Company Equity Awards

Options. Each option to purchase shares of common stock that is outstanding immediately prior to the effective time, whether vested or unvested, will, as of the effective time, become fully vested (to the extent not already vested) and be converted into the right to receive an amount in cash equal to the product obtained by multiplying

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(1) the excess, if any, of the merger consideration of $40.50 per share over the exercise price per share of that option by (2) the total number of shares subject to that option, less applicable tax withholdings. Any option that has an exercise price that is equal to or greater than the merger consideration of $40.50 will be cancelled without consideration.

Restricted Stock Units and Deferred Stock Units. Each award of restricted stock units or deferred stock units that corresponds to shares of common stock that is outstanding immediately prior to the effective time, whether vested or unvested, will, as of the effective time, become fully vested and be converted into the right to receive an amount in cash equal to the product obtained by multiplying (1) the total number of shares subject to that restricted stock unit or deferred stock unit award by (2) the merger consideration of $40.50 per share, less applicable tax withholdings. With respect to any restricted stock unit award that is subject to performance-based vesting conditions, the total number of shares of common stock underlying the restricted stock unit award will be determined based on the greater of target performance and actual performance through the date on which the effective time occurs (extrapolating such performance through the end of the full performance period) and, in the case of awards granted prior to 2016, prorated based on the number of days in the performance period through and including the closing date.

Quantification of Payments. For an estimate of the amounts that would be payable to each of the Company’s named executive officers on settlement of their unvested Company equity awards, see “—Quantification of Payments and Benefits to the Company’s Named Executive Officers” below. The estimated aggregate amount that would be payable to the Company’s two executive officers who are not named executive officers in settlement of their unvested equity-based awards if the effective time occurred on May 17, 2016 is $2,841,566 ($4,798,166 assuming applicable performance criteria are satisfied at maximum levels). This amount excludes $1,419,687 of restricted stock units, which would become 100% vested if the applicable executive officer retired from the Company on May 17, 2016. We estimate that the aggregate amount that would be payable to the Company’s eleven non-employee directors for their unvested Company equity awards if the effective time occurred on May 17, 2016 is $990,550.

Change in Control Agreements with Executive Officers

Each of the Company’s executive officers has previously entered into a change in control agreement with the Company, which provides for enhanced severance benefits in the event that, within 12 months prior to a change in control, the executive officer’s employment is terminated by the Company in connection with or in anticipation of a change in control, or within 24 months following a change in control, the executive officer’s employment is terminated by the Company without “cause” (as defined in the executive officer’s change in control agreement) or by the executive officer with “good reason” (as defined in the executive officer’s change in control agreement) (each of which we refer to as a “qualifying termination”). The merger will constitute a change in control for purposes of the change in control agreements.

Each change in control agreement provides that, in the event of a qualifying termination, the executive officer will be entitled to:

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Payments under the change in control agreement are conditioned upon the executive officer executing a general release in favor of the Company. In addition, pursuant to the change in control agreements, any payments or benefits payable to the executive officer will be cut back to the extent that such payments or benefits would result in the imposition of excise taxes under Section 4999 of the Code, unless the executive officer would be better off on an after-tax basis receiving all such payments or benefits. The change in control agreements also contain a confidentiality covenant and two-year (three-year, in the case of Messrs. Rooke and Canning) post-termination noncompetition and nonsolicitation covenants in favor of the Company (except in the case of Reynolds Bish, the Company’s Vice President and President of Enterprise Software, whose change in control agreement does not include a noncompetition covenant and limits the scope of the nonsolicitation covenant to employees and certain former employees and the duration to 18 months following the date of termination due to restrictions on such covenants in California, where Mr. Bish resides).

For an estimate of the value of the payments and benefits described above that would be payable to the Company’s named executive officers under their change in control agreement upon a qualifying termination in connection with the merger, see “—Quantification of Payments and Benefits to the Company’s Named Executive Officers” below. The estimated aggregate amount that would be payable to the Company’s two executive officers who are not named executive officers under their change in control agreements if the merger were to be completed and they were to experience a qualifying termination on May 17, 2016 is $2,782,500.

2016 Fiscal Year Annual Bonus

Under the merger agreement, the Company has the right to pay, immediately prior to the effective time, prorated annual bonuses in respect of the Company’s 2016 fiscal year to each employee of the Company and its subsidiaries who is actively employed as of immediately prior to the effective time (reduced by any performance bonus previously paid to such individual in respect of a quarterly performance period during calendar year 2016). These prorated annual bonuses will be based on the greater of target performance and actual performance as of the effective time (extrapolated through the end of the Company’s 2016 fiscal year). See the section entitled “The Merger Agreement—Other Covenants and Agreements—Employee Matters” elsewhere in this proxy statement.

For an estimate of the prorated annual bonuses payable to the Company’s named executive officers upon consummation of the merger, see “—Quantification of Payments and Benefits to the Company’s Named Executive Officers” below. The estimated aggregate prorated annual bonuses payable to the Company’s two executive officers who are not named executive officers if the effective time were to occur on May 17, 2016 is $224,816 ($449,632, assuming applicable performance criteria are satisfied at maximum levels).

Cash-Based Long-Term Incentive Bonuses

Under the merger agreement, the Company has the right to pay, immediately prior to the effective time, prorated long-term incentive bonuses under any cash-based long-term incentive plan with respect to each performance period under that plan to each employee of the Company and its subsidiaries who is actively employed as of immediately prior to the effective time and then participating in any cash-based long-term incentive plan. These prorated long-term incentive bonuses will be based on the greater of target performance and actual performance as of the effective time (extrapolated through the end of the applicable performance period). See the section entitled “The Merger Agreement—Other Covenants and Agreements—Employee Matters” elsewhere in this proxy statement.

For an estimate of the prorated long-term incentive bonuses payable to the Company’s named executive officers upon consummation of the merger, see “—Quantification of Payments and Benefits to the Company’s Named Executive Officers” below. The estimated aggregate prorated long-term incentive bonuses payable to the Company’s two executive officers who are not named executive officers if the effective time were to occur on May 17, 2016 is $235,200 ($470,400, assuming applicable performance criteria are satisfied at maximum levels). This amount excludes $250,756 ($501,511, assuming applicable performance criteria are satisfied at maximum levels), which would become payable to the applicable executive officer, if such executive officer retired from the Company on May 17, 2016.

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Post-Closing Employee Benefits

Under the merger agreement, Parent has agreed to offer certain compensation and benefits to Company employees generally, including the Company’s executive officers. Such compensation and benefits are described in more detail in the section entitled “The Merger Agreement—Other Covenants and Agreements—Employee Matters.”

Indemnification and Insurance

The Company is party to indemnification agreements with each of its directors and executive officers that require the Company, among other things, to indemnify the directors and executive officers against certain liabilities that may arise by reason of their status or service as directors or officers. In addition, pursuant to the terms of the merger agreement, the Company’s directors and executive officers will be entitled to certain ongoing indemnification and coverage under directors’ and officers’ liability insurance policies from the surviving corporation. This indemnification and insurance coverage is further described in the section entitled “The Merger Agreement—Other Covenants and Agreements—Indemnification of Directors and Officers; Insurance.”

Quantification of Payments and Benefits to the Company’s Named Executive Officers

The table below sets forth the amount of payments and benefits that each of the Company’s named executive officers would receive in connection with the merger, assuming that the merger were consummated and each such executive officer experienced a qualifying termination on May 17, 2016. The amounts below are determined using a per share price of Company common stock of $40.50, do not take into account any potential cut back under the named executive officer’s change in control agreement, and are based on multiple assumptions that may or may not actually occur or be accurate on the relevant date, including the assumptions described in the footnotes to the table. As a result of the foregoing assumptions, the actual amounts, if any, to be received by a named executive officer may materially differ from the amounts set forth below.

Golden Parachute Compensation

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

The following is a general discussion of the material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of common stock whose shares are exchanged for cash pursuant to the merger. This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), applicable U.S. Treasury regulations promulgated thereunder, judicial opinions, and administrative rulings and published positions of the Internal Revenue Service (“IRS”), each as in effect as of the date hereof. These authorities are subject to change, possibly on a retroactive basis, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010, nor does it address any tax consequences arising under state, local or foreign tax laws or U.S. federal tax laws other than those pertaining to the U.S. federal income tax. This discussion is not binding on the IRS or the courts and, therefore, could be subject to challenge, which could be sustained. No ruling is intended to be sought from the IRS with respect to the merger.

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

This discussion applies only to U.S. holders of shares of common stock who hold their shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that may be relevant to a U.S. holder in light of its particular circumstances, or that may apply to a U.S. holder that is subject to special treatment under the U.S. federal income tax laws (including, for example, insurance companies, dealers or brokers in securities or foreign currencies, traders in securities who elect the mark-to-market method of accounting, holders subject to the alternative minimum tax, U.S. holders that have a functional currency other than the U.S. dollar, tax-exempt organizations, banks and certain other financial institutions, mutual funds, certain expatriates, partnerships, S corporations, other pass-through entities or investors in partnerships or such other entities, U.S. holders who hold shares of common stock as part of a hedge, straddle, constructive sale or conversion transaction, and U.S. holders who acquired their shares of common stock through the exercise of employee stock options or other compensation arrangements).

If a partnership (including for this purpose any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of common stock, the tax treatment of a partner in such partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding shares of common stock, you should consult your tax advisor.

Holders of common stock should consult their own tax advisors to determine the particular tax consequences to them of the merger, including the applicability and effect of the alternative minimum tax, and any federal, state, local, foreign income and other tax laws.

General Tax Consequences of the Merger

The receipt of cash by U.S. holders in exchange for shares of common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, for U.S. federal income tax purposes, a U.S.

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holder who receives cash in exchange for shares of common stock pursuant to the merger will recognize gain or loss in an amount equal to the difference, if any, between (1) the amount of cash received and (2) the U.S. holder’s adjusted tax basis in such shares (generally the purchase price paid by the U.S. holder to acquire such shares of common stock).

If a U.S. holder’s holding period in the shares of common stock surrendered in the merger is greater than one year as of the date of the merger, the gain or loss will be long-term capital gain or loss. Long-term capital gains of certain non-corporate holders, including individuals, are generally subject to U.S. federal income tax at preferential rates. The deductibility of a capital loss recognized on the exchange is subject to limitations. If a U.S. holder acquired different blocks of common stock at different times and different prices, such U.S. holder must determine its adjusted tax basis and holding period separately with respect to each identifiable block of common stock.

Information Reporting and Backup Withholding

Payments made in exchange for shares of common stock pursuant to the merger may be subject, under certain circumstances, to information reporting and backup withholding (currently at a rate of 28%). To avoid backup withholding, a U.S. holder that does not otherwise establish an exemption should return a properly completed IRS Form W-9, certifying that such U.S. holder is a “United States person” (within the meaning of the Code), that the taxpayer identification number provided is correct and that such U.S. holder is not subject to backup withholding.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a holder’s U.S. federal income tax liability, if any, provided that such holder furnishes the required information to the IRS in a timely manner.

Holders of common stock should consult their tax advisors as to the specific tax consequences to them of the merger, including the applicability and effect of the alternative minimum tax and the effect of any federal, state, local, foreign income and other tax laws.

Regulatory Approvals

Antitrust Approval in the United States

Under the HSR Act and related rules, certain transactions, including the merger, may not be completed until required information and materials are furnished to the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission and statutory waiting period requirements have been satisfied. On May 3, 2016, both the Company and Parent filed their respective Notification and Report Forms with the Antitrust Division and the FTC. The waiting period under the HSR Act was terminated early on May 19, 2016.

In addition, U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. Private parties may also seek to take legal action under the antitrust laws under some circumstances. Although neither the Company nor Parent believes that the merger will violate federal antitrust laws, there can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

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CFIUS

The merger agreement provides for the parties to file a joint voluntary notice under Section 721 of the DPA. The DPA, as amended and as implemented by regulations 31 CFR Part 800, et seq., provides for national security reviews and, where appropriate, investigations by CFIUS of transactions in which a foreign person or entity acquires control of a U.S. business. CFIUS review of a covered transaction is subject to an initial 30-day review period that may be extended by CFIUS for an additional 45-day investigation period. A joint voluntary notice filed by the parties with CFIUS may be rejected if the parties to the transaction fail to respond promptly to additional questions or requests from CFIUS. At the close of its review or investigation, CFIUS may (1) issue a letter to the parties indicating that there are no unresolved national security concerns and CFIUS action is concluded with respect to the transaction, (2) impose mitigation terms to resolve any national security concerns with the covered transaction or (3) send a report to the President of the United States recommending that the transaction be suspended or prohibited or notifying the President that CFIUS cannot agree on a recommendation relative to the covered transaction. The President then has 15 days to decide whether to block the transaction or to take other action. Parties may request at any point to withdraw their joint notice, including in situations where CFIUS advises the parties that if they do not voluntarily withdraw and abandon the transaction, CFIUS will make a negative recommendation to the President. The parties can then choose to abandon the transaction, thereby avoiding a negative recommendation to the President and potential decision by the President to block a transaction, or allow CFIUS’ negative recommendation to go forward for decision by the President.

Under the terms of the merger agreement, completion of the merger is subject to the condition that (1) CFIUS has issued a written notice that it has concluded a review or investigation of the notification voluntarily provided pursuant to the DPA with respect to the transactions contemplated by the merger agreement, and has terminated all action under Section 721 of the DPA or (2) if CFIUS has sent a report to the President requesting the President’s decision, then (a) the President has announced a decision not to take any action to suspend or prohibit the transactions contemplated by the merger agreement, or (b) having received a report from CFIUS requesting the President’s decision, the President has not taken any action after 15 days from the date the President received such report from CFIUS.

Chinese Regulatory Approvals and Filings

In order to consummate the transactions contemplated by the merger agreement, the parties will be required under the applicable laws of the PRC to make certain filings with or obtain specified approvals of PRC governmental entities. These filings include (1) the filings with and/or approvals of the National Development and Reform Commission of the PRC or its competent local counterparts, or NDRC, and the Ministry of Commerce of the PRC or its competent local counterparts, or MOFCOM, with respect to the transactions contemplated by the merger agreement and (2) the registration and/or approvals of the State Administration of Foreign Exchange of the PRC or its competent local counterparts, or SAFE, in connection with the transactions contemplated by the merger agreement, including registration and/or approvals for conversion of RMB funds into U.S. dollar funds and transfer of U.S. dollar funds to Merger Sub or the holders of common stock or other interests pursuant to or in connection with the merger agreement. Additionally, Apex must obtain clearance from the Shenzhen Stock Exchange of the disclosure of the major assets purchase report of Apex with respect to the transactions contemplated by the merger agreement (which clearance Apex has informed the Company has been obtained), although this clearance is not a closing condition.

Other Foreign Regulatory Approvals and Filings

In connection with the merger agreement, the parties also expect to make certain filings necessary to obtain regulatory approvals under the competition laws of Austria, Germany, Mexico, Poland, Russia and Turkey. The merger cannot be consummated until the applicable waiting periods have expired or the relevant approvals have been obtained under the antitrust and competition laws of such countries. Although the Company and the Consortium believe that they will be able to obtain the other requisite regulatory clearances in a timely manner, they cannot be certain when or if they will do so.

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THE MERGER AGREEMENT

The following is a summary of the material provisions of the merger agreement, a copy of which is attached to this proxy statement as Annex A and is incorporated by reference into this proxy statement. This summary may not contain all of the information about the merger agreement that is important to you. We encourage you to read carefully the merger agreement in its entirety, as the rights and obligations of the parties thereto are governed by the express terms of the merger agreement and not by this summary or any other information contained in this proxy statement.

Explanatory Note Regarding the Merger Agreement

The following summary of the merger agreement, and the copy of the merger agreement attached hereto as Annex A to this proxy statement, are intended to provide investors with information regarding its terms. The merger agreement is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the merger agreement were made only for purposes of the merger agreement as of the specific dates therein, were solely for the benefit of the parties to the merger agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk among the parties to the merger agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Stockholders are not third-party beneficiaries under the merger agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. Moreover, the description of the merger agreement below does not purport to describe all of the terms of such agreement and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Annex A and is incorporated herein by reference.

Additional information about the Company may be found elsewhere in this proxy statement and the Company’s other public filings. See “Where You Can Find Additional Information.”

Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

At the effective time, Merger Sub will merge with and into the Company and the separate corporate existence of Merger Sub will cease. The Company will be the surviving corporation in the merger and will continue its corporate existence as a Delaware corporation after the merger. The certificate of incorporation of Merger Sub as in effect immediately prior to the effective time will be the certificate of incorporation of the surviving corporation (except that the surviving corporation’s name will be Lexmark International, Inc.) until thereafter amended. The bylaws of Merger Sub as in effect immediately prior to the effective time will be the bylaws of the surviving corporation until thereafter amended. The directors of Merger Sub immediately prior to the effective time (or other individuals designated by Parent) will be the initial directors of the surviving corporation and will hold office until their respective successors are duly elected, designated or qualified, or their earlier death, resignation or removal. The officers of Merger Sub immediately prior to the effective time (or other individuals designated by Parent) will be the initial officers of the surviving corporation and will hold office until their respective successors are duly elected, designated or qualified, or their earlier death, resignation or removal.

When the Merger Becomes Effective

Closing; Effective Time

The closing of the merger will take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036, at 8: 00 a.m., New York City time, on a date to be agreed by the

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parties, but in any case no later than the third business day after the satisfaction or waiver (by the party having the benefit of the applicable condition) of the closing conditions set forth in the merger agreement (other than those conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver (by the party having the benefit of the applicable condition) of such conditions), or at such other place, date and time as the parties to the merger agreement may agree in writing.

The merger will become effective at the time a certificate of merger is filed with the Secretary of State of the State of Delaware, or such later date and time as is agreed upon by the parties to the merger agreement and specified in the certificate of merger. The parties must cause the certificate of merger to be filed on the closing date, or on such other date and time to which Merger Sub and the Company may agree in writing.

Effect of the Merger on the Common Stock

At the effective time, each share of the common stock outstanding immediately prior to the effective time (other than shares owned by the Company, any wholly owned subsidiary of the Company, Holdings, Parent or Merger Sub, or by stockholders who have properly exercised and perfected appraisal rights under Delaware law), will be converted automatically into and will represent the right to receive $40.50 in cash, without interest and less any applicable withholding taxes.

At the effective time, each share that is owned directly by the Company (or any wholly owned subsidiary of the Company), Holdings, Parent or Merger Sub immediately prior to the effective time will be cancelled and retired and will cease to exist, and no consideration will be delivered in exchange for such cancellation and retirement.

At the effective time, each share of common stock of Merger Sub issued and outstanding immediately 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 and will constitute the only outstanding shares of capital stock of the surviving corporation.

Treatment of Company Equity Awards

Under the merger agreement, awards outstanding under the Company’s stock plans as of the effective time will be treated as follows:

Options. Each option to purchase shares of common stock that is outstanding immediately prior to the effective time, whether vested or unvested, will, as of the effective time, become fully vested (to the extent not already vested) and be converted into the right to receive an amount in cash equal to the product obtained by multiplying (1) the excess, if any, of the merger consideration of $40.50 per share over the exercise price per share of that option by (2) the total number of shares subject to that option, less applicable tax withholdings. Any option that has an exercise price that is equal to or greater than the merger consideration of $40.50 will be cancelled without consideration.

Restricted Stock Units and Deferred Stock Units. Each award of restricted stock units or deferred stock units that corresponds to shares of common stock that is outstanding immediately prior to the effective time, whether vested or unvested, will, as of the effective time, become fully vested and be converted into the right to receive an amount in cash equal to the product obtained by multiplying (1) the total number of shares subject to that restricted stock unit or deferred stock unit award by (2) the merger consideration of $40.50 per share, less applicable tax withholdings. With respect to any restricted stock unit award that is subject to performance-based vesting conditions, the total number of shares of common stock underlying the restricted stock unit award will be determined based on the greater of target performance and actual performance through the date on which the effective time occurs (extrapolating such performance through the end of the full performance period) and, in the case of awards granted prior to 2016, prorated based on the number of days in the performance period through and including the closing date.

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Payment for Common Stock and Company Equity Awards in the Merger

Prior to the effective time, Merger Sub will deposit, or cause to be deposited, with a reputable U.S. bank or trust company designated by Merger Sub as the paying agent for the transaction (subject to the Company’s prior reasonable approval of the identity of such agent and terms of its appointment) the aggregate merger consideration to which the Company’s stockholders will be entitled pursuant to the merger agreement.

As soon as practicable after the effective time and in any event not later than the third business day following the closing date, the paying agent will be required to mail to each record holder of shares of common stock that were converted into the merger consideration a letter of transmittal and instructions for use in effecting the surrender of certificates that formerly represented shares of the common stock or non-certificated shares represented by book-entry in exchange for the merger consideration (less any applicable withholding taxes). Holdings, Parent, the surviving corporation or one of its subsidiaries will pay to each holder of Company options and restricted stock unit and deferred stock unit awards the cash amounts described above under “—Treatment of Company Equity Awards” within one business day following the effective time.

Representations and Warranties

The merger agreement contains representations and warranties of each of the Company, Apex, Holdings, Parent and Merger Sub, subject to certain exceptions set forth in the merger agreement and the disclosure schedules delivered in connection with the merger agreement, as to, among other things:

The merger agreement also contains representations and warranties of the Company, subject to certain exceptions in the merger agreement and the disclosure schedules delivered in connection with the merger agreement, as to, among other things:

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The merger agreement also contains representations and warranties of Apex, Holdings, Parent and Merger Sub, subject to certain exceptions in the merger agreement and the disclosure schedules delivered in connection with the merger agreement, as to, among other things:

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Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a “Company material adverse effect” or a “Parent material adverse effect” clause.

For purposes of the merger agreement, a “Company material adverse effect” means a change, event, effect, occurrence or development that, individually or in aggregate, would reasonably be expected to (1) have a material adverse effect on the business, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, or (2) prevent or materially delay the Company from consummating the merger, but each of the following will not in itself constitute or be taken into account in determining whether a Company material adverse effect has occurred or would reasonably be expected to occur:

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However, with respect to the matters described in the first, second and third bullets above, those matters may be taken into account in determining whether a Company material adverse effect has occurred or would reasonably be expected to occur to the extent that the Company and its subsidiaries, taken as a whole, are disproportionately affected thereby as compared with other participants in the industries in which the Company and its subsidiaries operate (in which case the incremental disproportionate impact or impacts may be taken into account).

For the purpose of the merger agreement, a “Parent material adverse effect” means any change, event, development, condition, occurrence or effect that prevents or materially impairs or delays, or would reasonably be expected to prevent or materially delay, the consummation of the merger or performance by Apex, Holdings, Parent or Merger Sub of any of their material obligations under the merger agreement.

Conduct of Business Pending the Merger

The merger agreement provides that, subject to certain exceptions in the merger agreement and the disclosure schedules delivered by the Company in connection with the merger agreement, during the period from the signing of the merger agreement to the effective time, except as may be required by law or as consented to by Parent in writing or as expressly required or permitted by the merger agreement, the Company, among other things, will conduct the business of the Company and its subsidiaries in the ordinary course of business consistent with past practice and will not, and will not permit any of its subsidiaries to, take the following actions:

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Notwithstanding the foregoing covenants, the merger agreement provides that Apex, Holdings, Parent and Merger Sub do not have the right to control or direct the operations of the Company prior to the consummation of the merger, and that, prior to the effective time, the Company will exercise, consistent with the terms and conditions of the merger agreement, complete unilateral control and supervision over its business operations.

Other Covenants and Agreements

Access to Information

Subject to certain exceptions and limitations set forth in the merger agreement, the Company must afford Holdings, Parent, Merger Sub and the parties to the debt commitment letters and certain of their affiliates, and their respective directors, officers, employees, accountants, consultants, legal counsel, financial advisors and other agents and other representatives, reasonable access during normal business hours, throughout the period prior to the effective time, to the Company’s and its subsidiaries’ officers, employees, properties, offices and other facilities of the Company and its subsidiaries and to the books and records thereof.

Subject to certain exceptions and limitations set forth in the merger agreement, the Company must also use commercially reasonable efforts to furnish during normal business hours upon prior notice such information concerning the business, properties, contracts, assets and liabilities of the Company and its subsidiaries as may be reasonably requested by Parent and its directors, officers, employees, accountants, consultants, legal counsel, financial advisors and other agents and other representatives.

No Solicitation

While the merger is pending, the Company and its subsidiaries, and their respective representatives, are, subject to certain exceptions, not permitted to:

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Notwithstanding the provisions of the merger agreement described above, if prior to obtaining the required vote of the Company’s stockholders to adopt the merger agreement, the Company receives a bona fide written acquisition proposal that the board determines in good faith, after consultation with its advisors, constitutes or could reasonably be expected to lead to a superior proposal, then the Company may:

In the event that the Company receives an acquisition proposal, the Company is required to promptly (and in any event within 72 hours):

As used in the merger agreement, “acquisition proposal” means any bona fide proposal or offer made by any person (other than Holdings, Parent, Merger Sub or their respective affiliates) for:

As used in the merger agreement, “superior proposal” means a bona fide written acquisition proposal, substituting “50%” for each reference to “25%” in the definition of acquisition proposal, made by a third party which, in the good faith judgment of the board (after consultation with its financial advisors and outside counsel), taking into account such factors as the board considers in good faith to be appropriate (including the conditionality, timing, financial terms and likelihood of consummation of such proposals), if consummated would reasonably be expected to result in a transaction that is more favorable from a financial point of view to the Company’s stockholders than the merger with Merger Sub.

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In addition and notwithstanding anything to the contrary in the merger agreement, if, prior to obtaining the required vote of the Company’s stockholders to adopt the merger agreement, the Company receives a bone fide written acquisition proposal that the board determines in good faith, after consultation with its outside counsel and financial advisors, constitutes a superior proposal (taking into account any adjustment to the terms and conditions of the merger proposed by Parent in response to such acquisition proposal), then the board may change its recommendation or terminate the merger agreement to enter into a definitive agreement with respect to such superior proposal, if and only if:

Each time material revisions to the terms of a superior proposal are made, the Company must notify Parent of those material revisions and comply again with the requirements described in the bullet points above, except that the notice and negotiation period will be two business days rather than three.

Moreover and notwithstanding anything to the contrary in the merger agreement, if, at any time prior to obtaining the required vote of the Company’s stockholders to adopt the merger agreement, an intervening event (as defined below) has occurred and is continuing, the board may effect a change of recommendation if the board determines in good faith (after consultation with outside counsel) that the failure to change its recommendation would be inconsistent with the directors’ fiduciary duties under applicable law (taking into account any adjustments to the terms and conditions of the merger proposed by Parent in response to such intervening event) if and only if:

As used in the merger agreement, “intervening event” means an event, development, occurrence or change that does not involve or relate to an acquisition proposal and was not known or reasonably foreseeable to the board as of or prior to April 19, 2016.

The merger agreement provides that nothing will prohibit the board from (1) disclosing to the Company’s stockholders a position contemplated by Rule 14d-9, Rule 14e-2(a) and Item 1012(a) of Regulation M-A under the Exchange Act, (2) issuing a “stop, look and listen” statement pending disclosure of its position, as

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contemplated by Rules 14d-9 and 14e-2(a) or (3) making any disclosure to stockholders if the board determines in good faith, after consultation with outside legal counsel, that the failure to make such disclosure would reasonably be expected to be inconsistent with the directors’ fiduciary duties to stockholders under applicable law, subject to the board not effecting a change of recommendation unless the requirements described above have been satisfied.

Efforts to Complete the Merger

The merger agreement requires each of the Company, Holdings, Parent and Merger Sub to use its best efforts to take, or cause to be taken, all appropriate actions, and to do, or 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 laws or otherwise to consummate and make effective the merger and the other transactions contemplated by the merger agreement as promptly as practicable.

Each of the Company, Holdings, Parent and Merger Sub must also use best efforts to:

Holdings, Parent and Merger Sub further agree to use their respective best efforts to avoid or eliminate every impediment under any competition law that may be asserted by any governmental entity with respect to the merger so as to enable the closing to occur as promptly as practicable, including (1) proposing, negotiating, committing to and effecting the sale, divestiture, licensing or disposition of any assets, properties or businesses of Holdings, Parent, Merger Sub or the Company or any of their respective subsidiaries and (2) accepting any

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operational restrictions or otherwise taking or committing to take any actions that after the closing would limit the freedom of Holdings’, Parent’s or any of Parent’s subsidiaries’ assets, properties, licenses, rights, product lines, operations or businesses, in each case as may be required in order to avoid the entry, or to effect the dissolution, of any injunction, temporary restraining order or other order that would otherwise have the effect of preventing or delaying the closing.

The Company, Holdings, Parent and Merger Sub are required to cooperate and consult with each other in connection with (1) determining whether any action by or in respect of, or any filing with, any governmental entity is required in connection with the consummation of the merger, (2) seeking any such actions, consents, approvals or waivers or making any such filings and (3) the preparation of this proxy statement and all other applicable filings. The parties must also generally update each other in respect of matters relevant to the closing, including by providing:

Holdings, Parent and the Company are required to use (and to cause their respective affiliates to use) reasonable best efforts in order to obtain the CFIUS approval, which includes promptly making any draft and final filings required in connection with the CFIUS approval in accordance with the DPA. The draft filings must be made by May 19, 2016 (unless the parties agree otherwise in writing). The parties must provide any information requested by CFIUS or any other agency or branch of the U.S. government in connection with the CFIUS review or investigation of the transactions contemplated by the merger agreement within the timeframes required by the DPA (unless CFIUS agrees in writing to an extension of such timeframe). Additionally, each of Holdings, Parent and the Company, in connection with the efforts to obtain CFIUS approval, must:

With respect to Holdings and Parent, these reasonable best efforts also include agreeing to any action, condition or restriction required by CFIUS in connection with the CFIUS approval, including the sale, divestiture, licensing or disposition of any assets, properties or businesses of Holdings, Parent, Merger Sub or the Company or any of their respective subsidiaries or affiliates and any operational restrictions or otherwise taking or committing to take actions that limit Holdings’ or Parent’s or any Parent Subsidiary’s or Parent’s affiliates’ freedom of action with respect to, or its ability to retain, any of the assets, properties, licenses, rights, product lines, operations or businesses of Holdings, Parent, the Company or any of their respective subsidiaries or affiliates.

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In the event that CFIUS has completed its review or investigation or has determined that it requires no more time to review or investigate and intends to send a report to the President of the United States recommending that the President act to suspend or prohibit the merger, Parent may request a withdrawal of the notice filed with CFIUS in connection with the CFIUS approval and none of Holdings, Parent or the Company shall have any further obligation to seek CFIUS approval, so long as Holdings and Parent have complied with certain termination provisions of the merger agreement in addition to their obligation to use reasonable best efforts to avoid an adverse CFIUS recommendation.

Subject to the foregoing, none of Holdings, Parent or the Company may take or permit any of its subsidiaries or affiliates to take any action that would reasonably be expected to prevent, delay or impede the CFIUS approval. The obligations specific to the CFIUS approval summarized above are the sole obligations of the parties with respect to the efforts required to obtain CFIUS approval under the merger agreement.

In addition, pursuant to the merger agreement, the Company has agreed to cooperate reasonably with Parent at Parent’s request in connection with a potential divestiture of the enterprise software business of the Company, so long as the consummation of any such sale or divestiture is conditioned on, or occurs after, the closing of the merger.

Employee Matters

For a period of one year following the effective time, Parent will provide to each employee of the Company and its subsidiaries who continues to be employed by the surviving corporation:

For all purposes under the employee benefit plans of Holdings, Parent and its subsidiaries providing benefits to any continuing employee after the effective time, the employee will be credited with his or her years of service with the Company and its subsidiaries and their respective predecessors before the effective time to the same extent as the employee was entitled, before the effective time, to credit for such service under any similar benefit plan in which the employee participated or was eligible to participate immediately prior to the effective time, subject to certain exceptions. In addition, each continuing employee will be immediately eligible to participate, without any waiting time, in any and all Parent benefit plans to the extent that coverage under the plan is comparable to a benefit plan in which the employee participated immediately prior to the effective time. For purposes of each Parent benefit plan providing medical, dental, pharmaceutical and/or vision benefits to any continuing employee, Parent will cause all pre-existing condition exclusions and actively-at-work requirements of the plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the comparable plans of the Company or its subsidiaries in which such employee participated immediately prior to the effective time, and Holdings and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year of the applicable Company benefit plan ending on the date such employee’s participation in the corresponding Parent benefit plan begins to be taken into account under the Parent benefit plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with Parent benefit plan.

Under the merger agreement, immediately prior to the effective time, the Company may pay to each employee of the Company and its subsidiaries actively employed as of immediately prior to the effective time and then

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participating in any annual bonus plan a bonus equal to the product obtained by multiplying (1) the employee’s full-year bonus entitlement under all such annual bonus plans for the Company’s 2016 fiscal year, based on the greater of (a) deemed performance at “target” levels and (b) actual performance as of the effective time, extrapolated through the end of the Company’s 2016 fiscal year, and (2) a fraction, the numerator of which equals the number of days that have elapsed during the Company’s 2016 fiscal year through the closing date and the denominator of which equals 365 (reduced by any performance bonus previously paid to such individual in respect of a quarterly performance period during calendar year 2016).

Under the merger agreement, immediately prior to the effective time, the Company may pay to each employee of the Company and its subsidiaries actively employed as of immediately prior to the effective time and then participating in any cash-based long-term incentive plan, with respect to each performance period under each such plan, a bonus equal to the product obtained by multiplying (1) the employee’s full bonus entitlement under such plan for the applicable performance period based on the greater of (a) deemed performance at “target” levels and (b) actual performance as of the effective time, extrapolated through the end of the applicable performance period, and (2) a fraction, the numerator of which equals the number of completed months that have elapsed during the applicable performance period through the closing date and the denominator of which equals the total number of months in the applicable performance period.

The Company may establish a cash-based retention program to promote retention and to incentivize efforts to consummate the closing and to assist in the transition following the closing, with any awards thereunder payable no sooner than quarterly in equal installments on the three-month, six-month, nine-month and twelve-month anniversaries of the closing date. If a participating employee experiences a qualifying termination of employment prior to payment of the full award, the employee will be entitled to receive the unpaid portion of the award on the employee’s date of termination. In addition, the Company may use the retention program to increase the base compensation of one or more individuals and in such case the amount of the retention program will be decreased by the annualized amount of such increase. Amounts under the retention program will be allocated among the employees of the Company and its subsidiaries identified, and in the amounts and on the terms determined, by the Chief Executive Officer of the Company (or his designee(s)); however, no such amounts will be allocated to any person deemed to be an “officer” of the Company for purposes of Section 16(a) of the Exchange Act.

In addition, Holdings and Parent have acknowledged that a “change of control” (or similar phrase) within the meaning of the benefit plans will occur at or prior to the effective time.

Indemnification of Directors and Officers; Insurance

For six years following the effective time, the surviving corporation must maintain in effect the exculpation, indemnification and advancement of expenses provisions of the Company’s charter or bylaws as in effect immediately prior to the effective time. Following the effective time, the indemnification agreements with any of the directors, officers or employees of the Company or its subsidiaries will be assumed by the surviving corporation. All rights of indemnification with respect to any claim made within the six-year period will continue until the disposition of the action or resolution of the claim. Further, the Company and the surviving corporation must, to the fullest extent permitted under applicable law, indemnify and hold harmless each current and former director, officer or employee of the Company or any of its subsidiaries and each person who served or is currently serving as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or other employee benefit plan or enterprise at the request or for the benefit of the Company or any of its subsidiaries against any costs and expenses (including advancing attorneys’ fees and expenses in advance of the final disposition of any claim, action, suit, proceeding or investigation to each such person to the fullest extent permitted by law), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of indemnifiable acts or omissions at the request or for the benefit of the Company at or prior to the effective time.

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The Company and the surviving corporation are also required to hold harmless those persons to the fullest extent permitted by law for acts or omissions occurring in connection with the process resulting in and the adoption and approval of the merger agreement and the consummation of the transactions contemplated thereby. From and after the effective time, the Company and the surviving corporation must advance expenses (including reasonable legal fees and expenses) incurred in the defense of any proceeding or investigation with respect to the matters subject to indemnification under the merger agreement in accordance with the procedures (if any) set forth in the Company’s and its subsidiaries’ charter, bylaws or similar organizational documents, and indemnification agreements, if any, in existence on April 19, 2016. In the event of any such proceeding or investigation, the Company and the surviving corporation will cooperate with the indemnified person in the defense of any such proceeding or investigation.

Also, for six years from the effective time, Parent must cause the surviving corporation to maintain in effect an insurance and indemnification policy that provides coverage for events occurring prior to the effective time that is substantially equivalent to and in any event not less favorable in the aggregate than the existing policies of the Company and its subsidiaries (except that if substantially equivalent coverage is unavailable, Parent must obtain the best available coverage). However, the surviving corporation will not be required to pay annual premiums in excess of 300% of the last annual premium paid by the Company prior to April 19, 2016. The Company may purchase, prior to the effective time, a six-year prepaid “tail” policy on terms and conditions providing substantially equivalent benefits as the current policies and any policies in effect immediately prior to the effective time of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its subsidiaries with respect to matters arising on or before the effective time, covering without limitation the transactions contemplated by the merger agreement.

Financing

Each of Holdings, Parent and Merger Sub must use its reasonable best efforts to obtain the proceeds of the financing under and on the terms and conditions described in the equity commitment letters and the debt commitment letters and may not, without the prior written consent of the Company, permit any termination of, amendment or modification to, or any waiver of any provision or remedy under, or replace, the equity commitment letters or debt commitment letters if such termination, amendment, modification, waiver or remedy or replacement would:

Each of Holdings, Parent and Merger Sub is required to use its reasonable best efforts to:

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In the event any portion of the debt financing contemplated in the senior commitment letter or the mezzanine commitment letter becomes unavailable on the terms and conditions contemplated in such commitment letter and such portion is reasonably required to consummate the transactions contemplated by the merger agreement, Holdings, Parent and Merger Sub are required to use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or advisable to arrange to obtain alternative financing from alternative sources in an amount sufficient to consummate the transactions contemplated by the merger agreement and on terms and conditions no less favorable, in the aggregate, to Parent and Merger Sub than those in the applicable commitment letter as promptly as practicable following the occurrence of such event.

Parent will keep the Company reasonably informed on a current basis of the status of its efforts to consummate the financing. Parent will provide the Company with prompt notice of any breach or default by Parent and/or Merger Sub or by any other party to any commitment letter of which it gains knowledge, or of any threatened breach, default, termination or repudiation by any of the financing sources that could result in Parent and Merger Sub not receiving any portion of the proceeds of the financing on the closing date.

Prior to the closing, the Company will provide, cause its subsidiaries to provide and use reasonable best efforts to cause its representatives, including legal and accounting advisors, to provide all cooperation reasonably requested by Parent or Merger Sub in connection with the arrangement of the financing or any permitted replacement or alternative financing (so long as the requested cooperation does not unreasonably interfere with the ongoing operations of the Company or its subsidiaries), including by:

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Holdings and Parent will indemnify and hold harmless the Company, its subsidiaries and their respective representatives from and against any and all liabilities, losses, damages, claims, costs, expenses and similar amounts, actually suffered or incurred by them in connection with the arrangement of the financing and the performance of their obligations in accordance with the financing cooperation covenant of the merger agreement and any information utilized in connection therewith (other than historical information related to the Company or its subsidiaries provided by or on behalf of the Company or its subsidiaries in writing specifically for use in connection with the financing). Holdings and Parent will, promptly upon request of the Company, reimburse the Company and its subsidiaries for all out-of-pocket costs and expenses incurred by the Company or any of its subsidiaries (including their respective representatives) in connection with the cooperation required by the financing cooperation covenant.

Parent may commence and conduct offers to purchase or exchange, including any “Change of Control Offer” and conduct consent solicitations with respect to, any or all of (1) the 6.650% Senior Notes due 2018 (the “2018 notes”) issued pursuant to the supplemental indenture dated as of May 22, 2008, between the Company and The Bank of New York Trust Company, N.A., as trustee, supplementing that certain indenture, dated as of May 22, 2008, between the Company and The Bank of New York Trust Company, N.A., as trustee (the “2018 indenture”), and (2) the 5.125% Senior Notes due 2020 (together with the 2018 notes, the “notes”), issued pursuant to the supplemental indenture dated as of March 4, 2013 between the Company, Wilmington Trust, National Association, as trustee, supplementing that certain indenture dated as of March 4, 2013, between the Company and Wilmington Trust, National Association, as trustee (together with the 2018 indenture, the “indentures”), in each case on such terms and conditions, including pricing terms and amendments to the terms and provisions of the applicable indenture, that are specified, from time to time, by Parent (each, a “debt offer” and collectively, the “debt offers”) and which are permitted by the terms of such notes, the applicable indentures and applicable law, including SEC rules and regulations. However:

Subject to certain exceptions and limitations, the Company will, and will cause its subsidiaries to, and will use its reasonable best efforts to cause its and their respective officers, directors, employee, attorneys, accountants and other representatives to, use reasonable best efforts to provide all reasonable cooperation reasonably requested by Parent in connection with any debt offer.

The Company will not be required to pay, purchase or otherwise retire any indebtedness pursuant to the provisions above prior to the effective time, and then only subject to provision of adequate funds by Parent, and the Company, its subsidiaries and their respective representatives will not have any obligation to authorize, adopt or execute any supplemental indenture or other agreement that would become effective prior to the effective time.

Parent will make available to the Company on or prior to the effective time all funds necessary to satisfy any obligations of the Company to holders of the notes that may arise as a result of the transactions contemplated above. Parent will, promptly upon written request by the Company, reimburse the Company for all reasonable and documented out-of-pocket costs, fees and expenses (including attorneys’ fees and expenses) to the extent

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those costs, fees and expenses are incurred by the Company, its subsidiaries or its or their respective representatives in connection with them complying with their obligations relating to the debt offers or redemption, and Parent will, subject to limited specified exceptions, indemnify and hold harmless the Company, its subsidiaries and its or their representatives from and against any and all losses, damages, claims, expenses and similar amounts suffered or incurred by them to the extent such losses, damages, claims, expenses and similar amounts arose out of the actions taken by the Company, its subsidiaries or its or their respective representatives pursuant to the provisions above (other than historical information provided in writing by the Company or its subsidiaries or its or their representatives specifically for use in connection with the transactions contemplated by the debt offers).

Apex Shareholder Approval and Seine Voting Agreement

Under PRC law, the transactions contemplated by the merger agreement must be approved by Apex shareholders at a meeting to be held to approve the merger and certain related matters. In connection with the execution of the merger agreement, Seine, the holder of approximately 68.7% of the outstanding shares of Apex, entered into a voting agreement with the Company, pursuant to which Seine has agreed to vote all of its Apex shares in favor of the proposed transaction at the Apex shareholder meeting. The requisite Apex shareholder meeting was held, and the Apex shareholder approval was obtained, on May 10, 2016, China Standard Time. Apex shareholder approval is not a closing condition for the merger.

Other Covenants

The merger agreement contains additional agreements among the Company, Apex, Parent and Merger Sub relating to, among other matters:

Conditions to the Merger

The obligations of the Company, Apex, Holdings, Parent and Merger Sub to effect the merger are subject to the fulfillment (or waiver, if permitted by law), at or prior to and as of the effective time, of the following conditions:

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The obligation of the Company to effect the merger is subject to the fulfillment (or waiver by the Company, if permitted by law), at or prior to and as of the effective time, of the following additional conditions:

The obligation of Parent and Merger Sub to consummate the merger is subject to the fulfillment (or waiver by Parent and Merger Sub, if permitted by law), at or prior to and as of the effective time, of the following additional conditions:

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None of the Company, Apex, Holdings, Parent or Merger Sub may rely, either as a basis for not consummating the merger or terminating the merger agreement and abandoning the merger, on the failure of any condition set forth above to be satisfied if the failure was caused by that party’s uncured, material breach of any provision of the merger agreement.

Termination

The merger agreement may be terminated and the merger abandoned at any time prior to the effective time:

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Termination Fees

Company Termination Fee

The Company must pay to Parent a termination fee of $95 million in cash (the “Company termination fee”) in the event that the merger agreement is validly terminated:

Parent Termination Fee

Parent must pay to the Company a termination fee of $150 million in cash in the event that the merger agreement is validly terminated: