West Corporation
WEST CORP (Form: PREM14A, Received: 06/15/2017 17:03:51)
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

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

Check the appropriate box:

 

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

WEST CORPORATION

(Name of Registrant as Specified In Its Charter)

 

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

Payment of Filing Fee (Check the appropriate box):

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

Title of each class of securities to which transaction applies:

 

Common Stock, $0.001 par value per share, of West Corporation (which we refer to as “West common stock”)

  (2)  

Aggregate number of securities to which transaction applies:

 

85,990,945 shares of West common stock, which consists of (a) 83,568,652 shares of West common stock as of June 9, 2017, (b) 154,168 shares of West common stock subject to issuance upon exercise of outstanding options with exercise prices below $23.50 as of June 9, 2017 and (c) 2,268,125 shares of West common stock with respect to outstanding awards of restricted stock units as of June 9, 2017. The calculation of the aggregate amount of outstanding awards subject to performance-based vesting conditions assumes the satisfaction of the applicable performance goal(s) at the target level.

  (3)  

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

 

In accordance with Exchange Act Rule 0-11, the filing fee of $213,813.99 was determined by multiplying 0.0001159 by the proposed maximum aggregate value of the transaction. The proposed maximum aggregate value of the transaction was calculated as the sum of (a) 83,568,652 shares of West common stock multiplied by $23.50 per share, (b) options to purchase 154,168 shares of West common stock with exercise prices below $23.50 per share, multiplied by $1.3799 per share (which is the difference between $23.50 and the weighted average exercise price per share of $22.1201) and (c) 2,268,125 restricted stock units multiplied by $23.50 per share.

  (4)  

Proposed maximum aggregate value of transaction:

 

$2,017,376,996

  (5)  

Total fee paid:

 

$233,813.99

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

 

  (1)  

Amount previously paid:

 

     

  (2)  

Form, Schedule or Registration Statement No.:

 

     

  (3)  

Filing party:

 

     

  (4)  

Date Filed:

 

     

 

 

 


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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION—DATED JUNE 15, 2017

 

 

LOGO

[●], 2017

Dear Fellow Stockholders:

A special meeting of stockholders of West Corporation, a Delaware corporation (which we refer to as “ West ” or the “ Company ”), will be held on [●], 2017, at [●] a.m. Central Time. This special meeting will be a completely virtual meeting of stockholders, which will be conducted solely via webcast. You will be able to attend the special meeting online, vote your shares and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/WSTC2017SM . Please note that you will not be able to attend the special meeting in person. The purpose of the meeting is to consider and vote on proposals relating to the proposed acquisition of West by Mount Olympus Holdings, Inc., a Delaware corporation (which we refer to as “ Parent ”), for $23.50 per share in cash. Parent is an affiliate of certain funds managed by affiliates of Apollo Global Management, LLC. Regardless of whether you plan to attend the special meeting online, we encourage you to vote your shares by mail, by telephone or through the Internet following the procedures outlined below.

On May 9, 2017, West entered into an Agreement and Plan of Merger (which we refer to as the “ merger agreement ”) with Parent and Olympus Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (which we refer to as “ Sub ”), providing for, subject to the satisfaction or waiver of specified conditions, the acquisition of West by Parent at a price of $23.50 per share in cash. Subject to the terms and conditions of the merger agreement, Sub will be merged into West (which we refer to as the “ merger ”), with West surviving the merger as a wholly owned subsidiary of Parent. At the special meeting, West will ask you to adopt the merger agreement, among other proposals related to the merger.

At the effective time of the merger, each share of West common stock issued and outstanding immediately prior to the effective time (other than (i) shares held by stockholders of West who have properly exercised and perfected appraisal rights under Delaware law, (ii) shares that are held in the treasury of West or (iii) shares that are owned of record by any wholly owned subsidiary of West, Parent or any wholly owned subsidiary of Parent) will be converted into the right to receive $23.50 per share in cash, without interest, subject to any applicable withholding taxes.

The proxy statement accompanying this letter provides you with more specific information concerning the special meeting, the merger agreement, the merger and the other transactions contemplated by the merger agreement. We encourage you to carefully read the accompanying proxy statement and the copy of the merger agreement attached as Annex  A to the proxy statement.

The board of directors of West (which we refer to as the “ Board ”) carefully reviewed and considered the terms and conditions of the merger agreement, the merger and the other transactions contemplated by the merger agreement. By a unanimous vote, the Board (i) approved the merger agreement and the transactions contemplated thereby, including the merger, (ii) declared the merger agreement and the consummation by West of the transactions contemplated thereby, including the merger, to be advisable and in the best interests of West and its stockholders, (iii) directed that a proposal to adopt the merger agreement be submitted to a vote at a meeting of West stockholders and (iv) resolved to recommend that West stockholders vote for the adoption of the merger agreement. Accordingly, the Board unanimously recommends a vote “FOR” the proposal to adopt the merger agreement.


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Your vote is important. Whether or not you plan to attend the special meeting online and regardless of the number of shares you own, your careful consideration of, and vote on, the proposal to adopt the merger agreement is important, and we encourage you to vote promptly. The merger cannot be completed unless the merger agreement is adopted by stockholders holding at least a majority of the outstanding shares of West common stock entitled to vote on such matter. The failure to vote will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

After reading the accompanying proxy statement, please make sure to vote your shares promptly by completing, signing and dating the accompanying proxy card and returning it in the enclosed prepaid envelope or by voting by telephone or through the Internet by following the instructions on the accompanying proxy card. Instructions regarding all three methods of voting are provided on the proxy card. If you hold shares through an account with a bank, broker, trust or other nominee, please follow the instructions you receive from your bank, broker, trust or other nominee to vote your shares.

Thank you in advance for your continued support and your consideration of this matter.

Thomas B. Barker

Chief Executive Officer and Chairman of the Board

[●], 2017

Neither the United States 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.

The accompanying proxy statement is dated [●], 2017 and is first being mailed to West stockholders on or about [●], 2017.


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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION—DATED JUNE 15, 2017

 

LOGO

WEST CORPORATION

11808 Miracle Hills Drive

Omaha, Nebraska 68154

 

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

 

 

To Be Held on [●], 2017

To the Stockholders of West Corporation:

A special meeting of stockholders of West will be held on [●], 2017, at [●] a.m. Central Time, for the following purposes:

 

  1. To consider and vote on a proposal to adopt the merger agreement, by and among West, Parent and Sub;

 

  2. To consider and vote on a proposal to approve, by a non-binding advisory vote, the compensation that may be paid or become payable to West’s named executive officers that is based on or otherwise relates to the merger; and

 

  3. To consider and vote on a proposal to adjourn the special meeting to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

This special meeting will be a completely virtual meeting of stockholders, which will be conducted solely via webcast. You will be able to attend the special meeting online, vote your shares and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/WSTC2017SM . Please note that you will not be able to attend the special meeting in person.

Stockholders of record at the close of business on [●], 2017 are entitled to notice of, and to vote at, the special meeting and any adjournments or postponements thereof.

For more information concerning the special meeting, the merger agreement, the merger and the other transactions contemplated by the merger agreement, please review the accompanying proxy statement and the copy of the merger agreement attached as Annex  A to the proxy statement.

The Board carefully reviewed and considered the terms and conditions of the merger agreement, the merger and the other transactions contemplated by the merger agreement. By a unanimous vote, the Board (i) approved the merger agreement and the transactions contemplated thereby, including the merger, (ii) declared the merger agreement and the consummation by West of the transactions contemplated thereby, including the merger, to be advisable and in the best interests of West and its stockholders, (iii) directed that a proposal to adopt the merger agreement be submitted to a vote at a meeting of West stockholders and (iv) resolved to recommend that West stockholders vote for the adoption of the merger agreement.


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The Board unanimously recommends that at the special meeting you vote “FOR” the proposal to adopt the merger agreement, “FOR” the approval, by a non-binding advisory vote, of the compensation that may be paid or become payable to West’s named executive officers that is based on or otherwise relates to the merger and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies.

To assure that your shares are represented at the special meeting, regardless of whether you plan to attend the special meeting online, please fill in your vote, sign and mail the enclosed proxy card as soon as possible. We have enclosed a return envelope, which requires no postage if mailed in the United States. Alternatively, you may vote by telephone or through the Internet. Instructions regarding each of the methods of voting are provided on the enclosed proxy card. If you are voting by telephone or through the Internet, your voting instructions must be received by 11:59 p.m. Eastern Time on the day before the special meeting. Your proxy is being solicited by the Board.

A list of West stockholders entitled to vote at the special meeting will be available for examination by any West stockholder at the Company’s headquarters. At least ten days prior to the date of the special meeting, this stockholder list will be available for inspection by West stockholders, subject to compliance with applicable provisions of Delaware law, during ordinary business hours at our corporate offices located at 11808 Miracle Hills Drive, Omaha, Nebraska 68154. The stockholder list will also be available for examination by any stockholder during the whole time of the special meeting by visiting www.virtualshareholdermeeting.com/WSTC2017SM .

If you have any questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please call our proxy solicitor, Innisfree M&A Incorporated, toll-free at (888) 750-5834. Banks and brokers may call (212) 750-5833.

If you fail to return your proxy card, vote by telephone or through the Internet or attend the special meeting online, your shares will 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 proposal to adopt the merger agreement.

 

By Order of the Board of Directors

 

David Mussman, Executive Vice President, Secretary and General Counsel

 

Omaha, Nebraska   
[●], 2017   

Please Vote—Your Vote is Important


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TABLE OF CONTENTS

 

     Page  

SUMMARY TERM SHEET

     1  

The Parties

     1  

The Merger

     1  

The Special Meeting

     2  

Stockholders Entitled to Vote; Vote Required to Adopt the Merger Agreement

     2  

How to Vote

     2  

Recommendation of the Board; Reasons for Recommending the Adoption of the Merger Agreement

     3  

Opinion of Centerview Partners LLC

     3  

Market Price and Dividend Data

     4  

Voting Agreements

     4  

Certain Effects of the Merger

     5  

Consequences if the Merger is Not Completed

     5  

Treatment of Equity Awards

     5  

Interests of Directors and Executive Officers in the Merger

     6  

Conditions to the Merger

     6  

Regulatory Approvals

     7  

Financing

     7  

Limited Guarantee

     7  

Restriction on Solicitation of Competing Proposals

     8  

Termination of the Merger Agreement

     8  

Termination Fees

     9  

Appraisal Rights

     10  

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

     10  

Additional Information

     10  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     18  

PARTIES TO THE MERGER

     19  

West Corporation

     19  

Parent (Mount Olympus Holdings, Inc.)

     19  

Sub (Olympus Merger Sub, Inc.)

     19  

THE SPECIAL MEETING

     20  

Date, Time and Place of the Special Meeting

     20  

Purpose of the Special Meeting

     20  

Recommendation of the Board

     20  

Record Date and Quorum

     20  

Vote Required for Approval

     21  

Effect of Abstentions and Broker Non-Votes

     21  

How to Vote

     22  

Revocation of Proxies

     23  

Adjournments and Postponements

     23  

Solicitation of Proxies

     23  

Stockholder List

     24  

Questions and Additional Information

     24  

PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

     25  

PROPOSAL 2: NON-BINDING COMPENSATION ADVISORY PROPOSAL

     26  

PROPOSAL 3: AUTHORITY TO ADJOURN THE SPECIAL MEETING

     27  

 

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     Page  

THE MERGER

     28  

Overview

     28  

Background of the Merger

     28  

Recommendation of the Board

     40  

Reasons for Recommending the Adoption of the Merger Agreement

     40  

Forward-Looking Financial Information

     45  

Opinion of Centerview Partners LLC

     49  

Summary of Centerview Financial Analysis

     51  

Interests of Directors and Executive Officers in the Merger

     56  

Certain Effects of the Merger

     66  

Consequences if the Merger is Not Completed

     67  

Financing of the Merger

     67  

Limited Guarantee

     70  

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

     71  

Regulatory Approvals Required for the Merger

     74  

THE AGREEMENT AND PLAN OF MERGER

     75  

Explanatory Note Regarding the Merger Agreement

     75  

Date of the Merger Agreement

     75  

The Merger

     75  

Closing; Effective Time of the Merger

     75  

Organizational Documents; Directors and Officers

     76  

Merger Consideration

     76  

Treatment of Options, Stock Units and Restricted Stock

     77  

Treatment of the West Stock Purchase Plan

     78  

Treatment of the West Deferred Compensation Plan

     78  

Exchange Procedures

     78  

Representations and Warranties

     79  

Covenants Regarding Conduct of Business by West Prior to the Merger

     82  

Obligations with Respect to the Special Meeting

     85  

Restriction on Solicitation of Competing Proposals

     85  

Obligation of the Board of Directors with Respect to Its Recommendation

     87  

Efforts to Complete the Merger

     89  

Access to Information

     93  

Director and Officer Indemnification and Insurance

     93  

Employee Benefits

     93  

Defense of Litigation

     94  

Other Covenants and Agreements

     95  

Conditions to the Closing of the Merger

     95  

Termination of the Merger Agreement

     96  

Termination Fees

     98  

Miscellaneous

     99  

APPRAISAL RIGHTS

     101  

MARKET PRICE AND DIVIDEND DATA

     106  

STOCK OWNERSHIP

     107  

THE VOTING AGREEMENTS

     110  

OTHER MATTERS

     112  

FUTURE STOCKHOLDER PROPOSALS

     113  

HOUSEHOLDING OF PROXY MATERIAL

     114  

 

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WHERE YOU CAN FIND MORE INFORMATION

     115  

Annex A—Agreement and Plan of Merger, dated as of May 9, 2017

  

Annex B—Opinion of Centerview Partners LLC

  

Annex C—Section  262 of the General Corporation Law of the State of Delaware

  

Annex D—Voting Agreements , dated as of May 9, 2017

  

Annex D-1—Entities affiliated with Thomas H. Lee Partners, L.P.

  

Annex D-2—Entities affiliated with the Quadrangle Group LLC

  

Annex D-3—Gary L. West and affiliated entities

  

Annex D-4—Mary E. West and affiliated entities

  

 

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SUMMARY TERM SHEET

This summary highlights certain information in this proxy statement, but may not contain all of the information that may be important to you. You should carefully read the entire proxy statement and the attached Annexes and the other documents to which this proxy statement refers you for a more complete understanding of the matters being considered at the special meeting. In addition, this proxy statement incorporates by reference important business and financial information about West Corporation. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions in the section entitled “Where You Can Find More Information.” Unless the context otherwise indicates, we refer to West Corporation as “West,” the “Company,” “we,” “us” or “our.”

The Parties (see page 19)

West is a global provider of communication and network infrastructure services. West helps its clients more effectively communicate, collaborate and connect with their audiences through a diverse portfolio of solutions that include unified communications services, safety services, interactive services such as automated notifications, telecom services and specialized agent services. For 30 years, West has provided reliable, high-quality voice and data services. West has sales and operations in the United States, Canada, Europe, the Middle East, Asia Pacific and Latin America. West’s principal executive offices are located at 11808 Miracle Hills Drive, Omaha, Nebraska 68154, and our telephone number is (800) 841-9000.

Parent is an affiliate of certain funds (which funds we refer to as the “ Apollo Funds ”) managed by affiliates of Apollo Management VIII, L.P. (which we refer to as “ Apollo Management ”; we refer to Apollo Management, acting on behalf of the Apollo Funds, as “ Apollo ”). Parent, Apollo Management and the Apollo Funds are affiliates of Apollo Global Management, LLC (which we refer to as “ AGM ”). AGM is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai. AGM had assets under management of approximately $197 billion as of March 31, 2017 in private equity, credit and real estate funds invested across a core group of nine industries where AGM has considerable knowledge and resources. AGM’s units are listed on the New York Stock Exchange (which we refer to as the “ NYSE ”) under the symbol “ APO .” Parent was formed on May 5, 2017, solely for the purpose of engaging in the transactions contemplated by the merger agreement. Parent has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement. Parent’s principal executive offices are located at 9 West 57th Street, 43rd Floor, New York, NY 10019, and its telephone number is (212) 515-3200.

Sub is a wholly owned subsidiary of Parent and was formed on May 5, 2017, solely for the purpose of engaging in the transactions contemplated by the merger agreement. Sub has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement. Sub’s principal executive offices are located at 9 West 57th Street, 43rd Floor, New York, NY 10019, and its telephone number is (212) 515-3200.

The Merger (see page 28)

On May 9, 2017, West, Parent and Sub entered into the merger agreement. Under the terms of the merger agreement, subject to the satisfaction or waiver of specified conditions, Sub will merge with and into West. West will survive the merger as a wholly owned subsidiary of Parent (which we refer to as the “ surviving corporation ”).

Upon completion of the merger, each issued and outstanding share of West common stock, par value $0.001 per share (which we refer to as “ West common stock ”), that is issued and outstanding immediately prior to the effective time of the merger (other than (i) shares held by stockholders of West who have properly exercised and perfected appraisal rights under Delaware law, (ii) shares that are held in the treasury of West or (iii) shares that

 

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are owned of record by any wholly owned subsidiary of West, Parent or any wholly owned subsidiary of Parent) will automatically be cancelled, cease to exist, and will be converted into the right to receive $23.50 per share in cash, without interest (which we refer to as the “ merger consideration ”), subject to any applicable withholding taxes.

Following the completion of the merger, West will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent.

The Special Meeting (see page 20)

The special meeting will be held on [●], 2017, at [●] a.m. Central Time. This special meeting will be a completely virtual meeting of stockholders, which will be conducted solely via webcast. You will be able to attend the special meeting online, vote your shares and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/WSTC2017SM . Please note that you will not be able to attend the special meeting in person. At the special meeting, you will be asked to, among other things, vote for the proposal to adopt the merger agreement. See the section entitled “The Special Meeting,” beginning on page 20, for additional information on the special meeting, including how to vote your shares of West common stock.

Stockholders Entitled to Vote; Vote Required to Adopt the Merger Agreement (see page 21)

You may vote at the special meeting if you were a holder of record of shares of West common stock as of the close of business on [●], 2017, which is the record date for the special meeting (which we refer to as the “ record date ”). You will be entitled to one vote for each share of West common stock that you held and owned on the record date. As of the record date, there were [●] shares of West common stock issued and outstanding and entitled to vote at the special meeting. The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of West common stock entitled to vote on such matter.

How to Vote

Stockholders of record have a choice of voting by proxy by completing a proxy card and mailing it in the prepaid envelope provided, by calling a toll-free telephone number or through the Internet. Please refer to your proxy card or the information forwarded by your bank, broker, trust or other nominee to see which options are available to you. The telephone and Internet voting facilities for stockholders of record will close at 11:59 p.m. Eastern Time on the day before the special meeting.

If you wish to vote by proxy and your shares are held by a bank, broker, trust or other nominee, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee. Unless you give your bank, broker, trust or other nominee instructions on how to vote your shares of West common stock, your bank, broker, trust or other nominee will not be able to vote your shares at the special meeting. Because the proposal to adopt the merger agreement requires the affirmative vote of a majority of the outstanding shares of West common stock, the failure to provide your nominee with voting instructions will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement. Furthermore, your shares will not be included in the calculation of the number of shares of West common stock present at the special meeting for purposes of determining whether a quorum is present.

If you wish to vote online during the special meeting and your shares are held in the name of a bank, broker or other holder of record, you must obtain a legal proxy, executed in your favor, from the bank, broker or other holder of record authorizing you to vote at the special meeting.

YOU SHOULD NOT SEND IN YOUR STOCK CERTIFICATE(S) WITH YOUR PROXY CARD.

A letter of transmittal with instructions for the surrender of certificates representing shares of West common stock will be mailed to stockholders if the merger is completed.

 

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For additional information regarding the procedure for delivering your proxy, see the sections entitled “The Special Meeting—How to Vote,” beginning on page 22 and “The Special Meeting—Solicitation of Proxies,” beginning on page 23. If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please call our proxy solicitor, Innisfree M&A Incorporated, toll-free at (888) 750-5834. Banks and brokers may call (212) 750-5833.

Recommendation of the Board; Reasons for Recommending the Adoption of the Merger Agreement (see page 40)

After careful consideration, the board of directors of West (which we refer to as the “ Board ”) unanimously declared the merger agreement and the transactions contemplated thereby, including the merger, to be advisable and in the best interests of West and its stockholders. Accordingly, the Board unanimously recommends that at the special meeting you vote “FOR” the proposal to adopt the merger agreement, “FOR” the approval, by a non -binding advisory vote, of the compensation that may be paid or become payable to West’s named executive officers that is based on or otherwise relates to the merger and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, including to solicit additional proxies.

In reaching its conclusions, the Board consulted with West management and outside legal counsel and financial advisors and considered and evaluated a variety of factors, including, but not limited to, each of the following:

 

    the current and historical financial condition, results of operations and business of West, West’s financial plan and prospects if it were to remain an independent company, the risks associated with achieving and executing upon West’s financial plan, and West’s historical experience in achieving its projections;

 

    the risks of West remaining an independent public company;

 

    the fact that the long-term trends and current significant market headwinds affecting West’s audio conferencing business may affect the attractiveness of West’s stock and offset positive prospects of West’s other segments;

 

    the strategic review process conducted by the Board with the assistance of its financial advisor, Centerview Partners LLC (which we refer to as “ Centerview ”), which included a review of various strategic alternatives in addition to a possible sale of the Company;

 

    the attractiveness of the merger consideration and the fact that the merger consideration was the result of negotiations and a price increase from Parent and the fact that the Company engaged in a publicly announced, broad and competitive process; and

 

    the general terms of the merger agreement, including the Company’s ability to respond to certain unsolicited acquisition proposals, the Board’s ability to change its recommendation in certain circumstances and the likelihood of closing.

For a more detailed discussion of factors considered by the Board in reaching its conclusions, see the section entitled “The Merger—Reasons for Recommending the Adoption of the Merger Agreement,” beginning on page 40. In addition, in considering the recommendation of the Board with respect to the merger agreement, you should be aware that some of our directors and executive officers have interests that may be different from, or in addition to, the interests of West stockholders generally. See the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 56.

Opinion of Centerview Partners LLC (see page 49)

The Company retained Centerview as financial advisor to the Board in connection with the merger and the other transactions contemplated by the merger agreement (which we collectively refer to as the “ Transaction

 

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throughout this section and the summary of Centerview’s opinion below under the caption “The Merger—Opinion of Centerview Partners LLC”). In connection with this engagement, the Board requested that Centerview evaluate the fairness, from a financial point of view, to the holders of outstanding shares of West common stock (which we refer to as “ Shares ”) (other than (i) Shares that are held in the treasury of the Company, (ii) Shares owned of record by any wholly owned Company subsidiary, (iii) Shares owned of record by Parent or any of its wholly owned subsidiaries and (iv) dissenting shares (which we refer to, collectively, together with Shares held by any other affiliate of Parent, as “ Excluded Shares ”)) of the merger consideration proposed to be paid to such holders pursuant to the merger agreement. On May 9, 2017, Centerview rendered to the Board its oral opinion, which was subsequently confirmed by delivery of a written opinion dated May 9, 2017, that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the merger consideration proposed to be paid to the holders of Shares (other than Excluded Shares) pursuant to the merger agreement was fair, from a financial point of view, to such holders.

The full text of Centerview’s written opinion, dated May 9, 2017, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex B and is incorporated herein by reference. Centerview’s financial advisory services and opinion were provided for the information and assistance of the Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction and Centerview’s opinion addressed only the fairness, from a financial point of view, as of the date thereof, to the holders of Shares (other than Excluded Shares) of the merger consideration to be paid to such holders pursuant to the merger agreement. Centerview’s opinion did not address any other term or aspect of the merger agreement or the Transaction and does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the merger or otherwise act with respect to the Transaction or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

Market Price and Dividend Data (see page 106)

West common stock is traded on the Nasdaq Global Select Market (which we refer to as “ Nasdaq ”) under the symbol “ WSTC .” On November 1, 2016, the last full trading day prior to West’s post-market close public announcement that it was exploring potential strategic alternatives, the closing price for West common stock was $20.01 per share. On May 9, 2017, the last full trading day prior to the public announcement of the merger, the closing price for West common stock was $24.11 per share. On [●], 2017, the last full trading day prior to the date of this proxy statement, the closing price for West common stock was $[●] per share.

Voting Agreements (see page 110)

Certain West stockholders, including certain affiliates of Thomas H. Lee Partners, L.P. (which we refer to as “ THL ”), certain affiliates of Quadrangle Group LLC (which we refer to as “ Quadrangle ”), Gary L. West and Mary E. West have entered into voting agreements with Parent and Sub (which we refer to, collectively, as the “ voting agreements ,” and each, a “ voting agreement ”). Subject to their terms, the voting agreements obligate these stockholders to, among other things, vote their shares of West common stock in favor of the proposal to adopt the merger agreement. As of the close of business on the record date, these stockholders and their affiliates beneficially owned, in the aggregate, approximately [●]% of our common stock.

 

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Certain Effects of the Merger (see page 66)

Upon completion of the merger, Sub will be merged with and into West upon the terms set forth in the merger agreement. As the surviving corporation in the merger, West will continue to exist following the merger as a wholly owned subsidiary of Parent.

Following the completion of the merger, shares of West common stock will no longer be traded on the Nasdaq or any other public market. In addition, the registration of shares of West common stock under the Securities Exchange Act of 1934, as amended (which we refer to as the “ Exchange Act ”), will be terminated.

Consequences if the Merger is Not Completed (see page 67)

If the proposal to adopt the merger agreement does not receive the required approval from West stockholders, or if the merger is not completed for any other reason, you will not receive any consideration from Parent or Sub for your shares of West common stock. Instead, West will remain a public company, and West common stock will continue to be listed and traded on the Nasdaq. See also the section below entitled “—Termination Fees,” beginning on page 98, for a summary of certain termination fees that may be payable if the merger agreement is terminated under certain circumstances.

Treatment of Equity Awards (see page 57)

The merger agreement provides that, with respect to all outstanding options to acquire shares of West common stock (which we refer to as “ options ”), stock unit awards and restricted stock awards under the Company’s equity plans, as a result of the merger:

 

    immediately prior to the effective time, each option will be fully vested and cancelled, and each holder of a cancelled Company option will receive a payment in cash equal to the product of (i) the total number of shares subject to the cancelled Company option and (ii) the excess, if any, of (A) the merger consideration over (B) the exercise price per share subject to the cancelled Company option, without interest, less any required tax withholding (provided, however, that any Company option with respect to which the exercise price per share is equal to or greater than the merger consideration will be cancelled in exchange for no consideration);

 

    immediately prior to the effective time, each stock unit and restricted stock award (other than notional shares credited under the Company’s deferred compensation plan) will be converted into the right to receive a payment in cash equal to the sum of (i) the merger consideration multiplied by the number of shares subject to each such award and (ii) the dividend equivalents accrued on such award prior to the closing date, and to the extent required by an existing award agreement such cash amount will be held in escrow and become vested and payable in accordance with the terms of the awards on the vesting schedule set forth in the awards.

For any stock unit awards that are subject to performance-based vesting conditions, the merger agreement provides that the number of shares subject to such awards that are earned based on performance will be determined as of the closing date in accordance with the terms of the applicable award agreements, which award agreements the Company may amend between signing and closing to provide that, for all relevant periods, the performance goals will be deemed to have been satisfied at 100% of the target level. For the restricted stock award that is subject to performance-based vesting conditions that was previously granted to West’s Chief Executive Officer, the award agreement provides that performance will be deemed achieved at the maximum level set forth in the award agreement. In addition, any notional shares accrued under the Company’s deferred compensation plan will be valued based on the merger consideration and will be notionally reinvested in one or more other “measurement funds” (as defined under the deferred compensation plan) as determined by the Company prior to the effective time of the merger until such accounts are distributed to participants in connection with the termination and pay-out of the Company’s existing account balance deferred compensation

 

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plans on the later to occur of (i) December 31, 2017 and (ii) the closing date, in accordance with the terms of such plans and applicable law. The existing offering period under the Company’s employee stock purchase plan shall end on June  30, 2017 and no further offering period will commence thereafter.

Interests of Directors and Executive Officers in the Merger (see page 56)

In considering the recommendation of the Board that you vote “ FOR ” the proposal to adopt the merger agreement, you should be aware that some of our directors and executive officers have interests that may be different from, or in addition to, the interests of West stockholders generally, including the entry by certain affiliates of THL, which has two representatives on the Board, and certain affiliates of Quadrangle, which has one representative on the Board, into the voting agreements. The Board was aware of these interests and considered them at the time it approved the merger agreement and made its recommendation to West stockholders.

Conditions to the Merger (see page 95)

Each party’s obligations to complete the merger are subject to the satisfaction or waiver (where permitted) of the following conditions:

 

    receipt of the West stockholder approval;

 

    the waiting period (and any extensions thereof) applicable to the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (which we refer to as the “ HSR Act ”) having expired or been terminated and the approvals or clearances under applicable antitrust laws by certain additional governmental entities in Austria, Canada and Germany having been obtained or the applicable waiting periods relating thereto having been terminated or expired;

 

    receipt of the approval of the Federal Communications Commission (which we refer to as the “ FCC ”) required in connection with the merger; and

 

    no governmental entity having issued, enacted, entered, promulgated or enforced any law or order that is in effect and renders the merger illegal, or prohibits, enjoins or otherwise prevents the merger.

The obligations of Parent and Sub to complete the merger are also subject to the satisfaction or waiver by Parent of additional conditions, including:

 

    subject to, in certain cases, certain materiality qualifiers, the accuracy of each of West’s representations and warranties;

 

    West’s performance and compliance in all material respects with all agreements and covenants required to be performed or complied with by West under the merger agreement;

 

    since the date of the merger agreement, there not having occurred any changes, circumstances, events or effects, that individually or in the aggregate have had or would reasonably be expected to have a material adverse effect on West; and

 

    approvals having been obtained from (or notices being filed with) certain state telecommunications and healthcare regulatory authorities in connection with the merger.

West’s obligations to complete the merger are also subject to the satisfaction or waiver by West of additional conditions, including:

 

    subject to certain materiality qualifiers, the accuracy of each of the representations and warranties of Parent and Sub; and

 

    Parent’s and Sub’s performance and compliance in all material respects with all agreements and covenants required to be performed or complied with by them under the merger agreement.

 

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Regulatory Approvals (see page 74)

Under the merger agreement, the respective obligations of West, Parent and Sub to complete the merger are subject to, among other things, the expiration of the waiting period (and any extension thereof) or the granting of early termination applicable to the completion of the merger under the HSR Act, the receipt of antitrust approval from the applicable governmental entities in Austria, Canada and Germany and the receipt of the approval of the FCC. On June 6, 2017, the United States Federal Trade Commission (which we refer to as the “ FTC ”) granted early termination of the waiting period under the HSR Act. Additionally, the obligations of Parent and Sub to complete the merger are subject to, among other things, receipt of approvals of (or filing of notice with) certain state telecommunications and healthcare regulatory authorities.

In the event that the merger has not been consummated on or before November 9, 2017, if all of the conditions to closing of the merger, other than the receipt of approval of the FCC and the applicable state telecommunications and healthcare regulatory approvals, have been satisfied or are capable of being satisfied at such time, then the deadline for completing the merger may be extended by up to 30 days up to three times (i.e., until February 7, 2018, assuming all three 30 day extensions have been utilized) (subject to certain additional extensions in connection with the marketing period (as such term is defined under the section entitled “The Agreement and Plan of Merger—Efforts to Complete the Merger—Marketing Period Cooperation and Efforts,” beginning on page 91)) by either West or Parent from time to time by written notice to the other party. For a description of West’s and Parent’s respective obligations under the merger agreement with respect to regulatory approvals, see the section entitled “The Agreement and Plan of Merger—Efforts to Complete the Merger,” beginning on page 89.

Financing (see page 67)

West anticipates that the total funds needed to complete the merger (including the funds to pay (i) West stockholders, (ii) the holders of other equity-based interests the amounts due to them under the merger agreement and (iii) the fees and expenses in connection with the merger), which is expected to be approximately $5.1 billion, will be funded through a combination of the following:

 

    debt financing in an aggregate principal amount of up to $4.4 billion, including a committed $350 million senior secured revolving facility, a portion of which will be available at closing. Parent has received commitments from a consortium of financial institutions and certain other lenders to provide the debt financing, which includes the revolving credit facility. For more information, see the section of this proxy statement captioned “The Merger—Financing of the Merger—Debt Financing,” beginning on page 67;

 

    equity commitments by the Apollo Funds in an aggregate amount of up to $1.3 billion. Parent has received equity commitments for the equity financing from the Apollo Funds. For more information, see the section of this proxy statement captioned “The Merger—Financing of the Merger—Equity Financing,” beginning on page 69; and

 

    cash of West and its subsidiaries available to be utilized in respect of the payment of the merger consideration to West stockholders and holders of company stock-based awards and company options.

The completion of the merger is not conditioned upon Parent’s receipt of financing.

Limited Guarantee (see page 70)

Concurrently with the execution of the merger agreement, and as a condition and inducement to West’s willingness to enter into the merger agreement, Parent and Sub delivered to West a limited guarantee (which we refer to as the “ limited guarantee ”) in favor of West from Apollo Investment Fund VIII, L.P., Apollo Overseas Partners (Delaware 892) VIII, L.P., Apollo Overseas Partners (Delaware) VIII, L.P., and AOP VIII (AIV), L.P. (which we refer to as the “ guarantors ”) pursuant to which, and subject to the terms and conditions contained

 

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therein, the guarantors are guaranteeing certain obligations of Parent and Sub in connection with the merger agreement, including the $134 million termination fee potentially payable by Parent.

Restriction on Solicitation of Competing Proposals (see page 85)

The merger agreement generally restricts West’s ability to solicit, directly or indirectly, potential competing proposals (as such term is defined under the section entitled “The Agreement and Plan of Merger—Restrictions on Solicitation of Competing Proposals,” beginning on page 85) from third parties, or engage in discussions or negotiations with, or furnish non-public information regarding West or any of our subsidiaries to, third parties regarding any potential competing proposal, or approve or recommend a competing proposal. Under certain limited circumstances, however, and in compliance with certain obligations contained in the merger agreement, West is permitted to furnish information with respect to West and our subsidiaries and participate in discussions or negotiations with third parties making a competing proposal if the Board determines in good faith, after consultation with our financial advisors and outside legal counsel, that the competing proposal constitutes or could reasonably be expected to lead to a superior proposal (as such term is defined under the section entitled “The Agreement and Plan of Merger—Restrictions on Solicitation of Competing Proposals,” beginning on page 85) and that the failure to furnish information to or participate in discussions or negotiations with respect to such competing proposal would be inconsistent with the Board’s fiduciary duties under applicable law. Under certain limited circumstances, at any time prior to receipt of the West stockholder approval, West is permitted to terminate the merger agreement in order to enter into a definitive acquisition agreement with respect to a superior proposal, upon payment by West to Parent of a $72 million termination fee.

Termination of the Merger Agreement (see page 96)

The merger agreement may be terminated at any time by the mutual written consent of Parent and West. The merger agreement may also be terminated by either Parent or West if:

 

    the merger has not been consummated on or before November 9, 2017, provided that if all of the conditions to closing of the merger, other than the receipt of approval of the FCC and the applicable state telecommunications and healthcare regulatory approvals, have been satisfied or are capable of being satisfied at such time, then the deadline for completing the merger may be extended by up to 30 days up to three times (i.e., until February 7, 2018, assuming all three 30-day extensions have been utilized) (subject to certain additional extensions in connection with the marketing period) from time to time by written notice to the other party; provided, further, that this termination right will not be available to any party if the failure of the merger to be consummated by such deadline was primarily caused by (A) such party’s material breach of any provision of the merger agreement or (B) such party’s failure to comply in any material respect with its obligations thereunder;

 

    any governmental entity issues any decision, order, directive, writ, injunction, judgment or decree permanently enjoining or otherwise permanently prohibiting the merger and such decision, order, directive, writ, injunction, judgment or decree has become final and nonappealable; provided, that this termination right will not be available to any party that has failed to use its reasonable best efforts to contest, resolve or lift, as applicable, such decision, order, directive, writ, injunction, judgment or decree; provided, further, that this termination right will not be available to any party if such decision, order, directive, writ, injunction, judgment or decree was primarily caused by (i) such party’s material breach of any provision of the merger agreement or (ii) such party’s failure to comply in any material respect with its obligations under the merger agreement; or

 

    the West stockholders have not adopted the merger agreement at the stockholder meeting (or at any postponement or adjournment of such meeting) at which a vote on the adoption of the merger agreement was taken.

West may also terminate the merger agreement prior to the effective time if:

 

   

Parent breaches or fails to perform or comply with its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform (i) would give rise to the failure

 

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of a closing condition and (ii) cannot be or has not been cured within 30 days after the giving of written notice to Parent of such breach (provided that West is not then in breach of any representation, warranty or covenant in the merger agreement that would give rise to the failure of a closing condition set forth therein);

 

    prior to the adoption of the merger agreement at the stockholder meeting (or any postponement or adjournment of such meeting), (i) West has complied with its representations, warranties or covenants contained in “The Agreement and Plan of Merger—Obligation of the Board of Directors with Respect to Its Recommendation,” beginning on page 87, and with respect to mailing this proxy statement and relating to the West stockholder meeting (other than any failure to comply that is de minimis ), (ii) the Board authorizes West to enter into an acquisition agreement with respect to a superior proposal in accordance with the terms of the merger agreement, (iii) substantially concurrently with the termination of the merger agreement, West enters into an acquisition agreement providing for such superior proposal, and (iv) prior to or concurrently with such termination, West pays to Parent in immediately available funds a termination fee of $72 million (as further described below under the section entitled “The Agreement and Plan of Merger—Termination Fees,” beginning on page 98); or

 

    (i) all of the conditions to closing (other than those conditions that by their nature are to be satisfied at the closing of the merger and that would be satisfied if there were a closing) have been satisfied or waived, (ii) West has notified Parent in writing at least three business days prior to such termination that West is irrevocably ready, willing and able to consummate the closing of the merger, and (iii) Parent and Sub have failed to consummate the closing of the merger within three business days after the date by which the closing of the merger is required to have occurred pursuant to the terms of the merger agreement.

Parent may also terminate the merger agreement prior to the effective time if:

 

    West breaches or fails to perform or comply with its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth therein and (ii) cannot be or has not been cured within 30 days after the giving of written notice to West of such breach (provided that Parent is not then in breach of any representation, warranty or covenant contained in the merger agreement that would give rise to the failure of a condition set forth therein); or

 

    prior to the adoption of the merger agreement at the stockholder meeting (or any postponement or adjournment of such meeting), the Board or any committee of the Board makes a change of Company recommendation (as such term is defined under the section entitled “The Agreement and Plan of Merger—Obligation of the Board of Directors with Respect to Its Recommendation,” beginning on page 87).

Termination Fees (see page 98)

West is obligated to pay Parent a $72 million termination fee if the merger agreement is terminated in any of the following circumstances: (a) the Board changes its recommendation and Parent terminates the merger agreement, (b) among other things, the Company’s stockholders do not approve the merger agreement at the stockholder meeting (or any postponement or adjournment of such meeting), and the Company enters into a definitive agreement with respect to a qualifying transaction (as such term is defined under the section entitled “The Agreement and Plan of Merger—Termination Fees,” beginning on page 98) within 12 months of the termination of the merger agreement and any qualifying transaction is thereafter consummated or (c) the Company terminates the merger agreement in accordance with certain procedures set forth in the merger agreement in order to enter into an acquisition agreement with a third party providing for a superior proposal.

The merger agreement also provides that Parent will be required to pay the Company a reverse termination fee of $134 million if (x) the conditions to the Company’s closing obligation are satisfied, (y) Parent and Sub fail

 

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to consummate the closing within three business days after the date by which the closing of the merger is required to have occurred pursuant to the terms of the merger agreement and (z) the Company terminates after notifying Parent that it is irrevocably ready, willing and able to consummate the closing. See the section entitled “The Agreement and Plan of Merger—Termination Fees,” beginning on page 98.

Appraisal Rights (see page 101)

Under Delaware law, holders of shares of West common stock are entitled to appraisal rights in connection with the merger, provided that such holders meet all of the conditions set forth in Section 262 of the Delaware General Corporation Law (which we refer to as the “ DGCL ”). A holder of West common stock who properly seeks appraisal and complies with the applicable requirements under Delaware law (which we refer to as a “ dissenting stockholder ”) will forego the merger consideration and instead receive a cash payment equal to the fair value of his, her or its shares of West common stock in connection with the merger. Fair value will be determined by the Delaware Court of Chancery following an appraisal proceeding. Dissenting stockholders will not know the appraised fair value at the time such holders must elect whether to seek appraisal. The ultimate amount dissenting stockholders receive in an appraisal proceeding may be more or less than, or the same as, the amount such holders would have received under the merger agreement. A detailed description of the appraisal rights available to holders of West common stock and procedures required to exercise statutory appraisal rights is included in the section entitled “Appraisal Rights,” beginning on page 101.

To seek appraisal, a West stockholder of record must deliver a written demand for appraisal to West before the vote on the merger agreement at the West special meeting, not vote in favor of the proposal to adopt the merger agreement, continuously hold the shares of West common stock through the date the merger is completed, and otherwise comply with the procedures set forth in Section  262 of the DGCL. Failure to follow exactly the procedures specified under Delaware law will result in the loss of appraisal rights.

Material U.S. Federal Income Tax Consequences of the Merger (see page 71)

The receipt of cash for shares of West common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder (as such term is defined under the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” beginning on page 71) who receives cash in exchange for shares of West common stock in the merger will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the cash received and the U.S. holder’s adjusted tax basis in the shares converted into the right to receive cash in the merger. Gain or loss will be determined separately for each block of shares of West common stock (that is, shares acquired for the same cost in a single transaction). You should refer to the discussion in the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” beginning on page 71, and consult your tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of the merger.

Additional Information (see page 115)

You can find more information about West in the periodic reports and other information we file with the U.S. Securities and Exchange Commission (which we refer to as the “ SEC ”). The information is available at the SEC’s public reference facilities and at the website maintained by the SEC at www.sec.gov .

 

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to briefly address some commonly asked questions regarding the special meeting of stockholders and the merger. These questions and answers do not address all questions that may be important to you as a West stockholder. Please refer to the more detailed information contained elsewhere in this proxy statement, the Annexes to this proxy statement and the documents referred to in this proxy statement.

 

Q: Why am I receiving this proxy statement?

 

A: On May 9, 2017, West entered into the merger agreement with Parent and Sub. You are receiving this proxy statement in connection with the solicitation of proxies by the Board in favor of the proposal to adopt the merger agreement. The enclosed materials allow you to submit a proxy to vote your shares without attending the special meeting.

Your vote is very important. Even if you plan to attend the special meeting online, we encourage you to submit a proxy as soon as possible.

 

Q: As a stockholder, what will I receive in the merger?

 

A: If the merger is completed, you will be entitled to receive $23.50 in cash, without interest, and subject to any applicable withholding taxes, for each share of West common stock you own as of immediately prior to the effective time of the merger.

The receipt of cash for shares of West common stock pursuant to the merger generally will be a taxable transaction for U.S. federal income tax purposes. Please see the discussion in the section entitled “The Merger—Material U.S. Federal Income Tax Consequences of the Merger,” beginning on page 71, for a more detailed discussion of the U.S. federal income tax consequences of the merger. The tax consequences of the merger to you will depend on your own particular circumstances. You should consult your own tax advisor for a full understanding of how the merger will affect your U.S. federal, state, local and foreign taxes.

 

Q: What will happen to outstanding West equity compensation awards in the merger?

 

A: For information regarding the treatment of West’s outstanding equity awards, please see the sections entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 56, “The Agreement and Plan of Merger—Treatment of Options, Stock Units and Restricted Stock,” beginning on page 77, “The Agreement and Plan of Merger—Treatment of the West Stock Purchase Plan,” beginning on page 78 and “The Agreement and Plan of Merger—Treatment of the West Deferred Compensation Plan,” beginning on page 78.

 

Q: When and where will the special meeting of stockholders be held?

 

A: The special meeting of West stockholders will be held on [●], 2017, at [●] a.m. Central Time. This special meeting will be a completely virtual meeting of stockholders, which will be conducted solely via webcast. You will be able to attend the special meeting online, vote your shares and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/WSTC2017SM . Please note that you will not be able to attend the special meeting in person.

 

Q: Who is entitled to vote at the special meeting?

 

A: Only holders of record of West common stock as of the close of business on [●], 2017 the record date for the special meeting, are entitled to vote at the special meeting. You will be entitled to one vote on each of the proposals presented in this proxy statement for each share of West common stock that you held on the record date.

 

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Q: What proposals will be considered at the special meeting?

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

 

    a proposal to adopt the merger agreement;

 

    a proposal to approve, by a non-binding advisory vote, the compensation that may be paid or become payable to West’s named executive officers that is based on or otherwise relates to the merger, as discussed in the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 56; and

 

    a proposal to adjourn the special meeting to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

 

Q: What vote is required to approve each of the proposals?

 

A: The proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of West common stock entitled to vote on such matter. Abstentions, failures to vote and “broker non-votes” will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement.

The approval of the non-binding compensation advisory proposal requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. Although the Board intends to consider the vote resulting from this proposal, the vote is advisory only and, therefore, is not binding on West or Parent or any of their respective subsidiaries, and, if the merger agreement is adopted by West stockholders and the merger is completed, the compensation that is based on or otherwise relates to the merger will be payable to our named executive officers even if this proposal is not approved. Broker non-votes will have no effect on approval of the non-binding compensation advisory proposal; however, the abstention from voting will have the same effect as a vote “ AGAINST ” the non-binding compensation advisory proposal.

The approval of the proposal to adjourn the special meeting if necessary or appropriate requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. In addition, even if a quorum is not present at the special meeting, the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter may adjourn the meeting to another place, date or time. In each case, broker non-votes will have no effect on approval of the proposal to adjourn the special meeting if necessary or appropriate; however, the abstention from voting will have the same effect as a vote “ AGAINST ” the proposal to adjourn the special meeting if necessary or appropriate.

 

Q: How does the Board recommend that I vote on the proposals?

 

A: Upon careful consideration, the Board has unanimously determined that the merger agreement and the transactions contemplated thereby, including the merger, are in the best interests of West and its stockholders, and unanimously recommends that you vote “ FOR ” the proposal to adopt the merger agreement, “ FOR ” the non-binding compensation advisory proposal and “ FOR ” the proposal to adjourn the special meeting if necessary or appropriate.

For a discussion of the factors that the Board considered in determining to recommend the adoption of the merger agreement, please see the section entitled “The Merger—Reasons for Recommending the Adoption of the Merger Agreement,” beginning on page 40. In addition, in considering the recommendation of the Board with respect to the merger agreement, you should be aware that some of our directors and executive officers have interests that may be different from, or in addition to, the interests of West stockholders generally. See the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 56.

 

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Q: Do I need to attend the special meeting and vote via the webcast?

 

A: No. It is not necessary for you to attend the special meeting online in order to vote your shares. You may vote by mail, by telephone or through the Internet, as described in more detail below.

 

Q: How many shares need to be represented at the special meeting?

 

A: The presence at the special meeting, via the webcast or by proxy, of the holders of a majority of the voting power of the shares of West common stock issued and outstanding and entitled to vote constitutes a quorum for the purpose of considering the proposals. As of the close of business on the record date, there were [●] shares of West common stock outstanding. If you are a West stockholder as of the close of business on the record date and you vote by mail, by telephone, through the Internet or online during the special meeting, you will be considered part of the quorum. If you are a “street name” holder of shares of West common stock and you provide your bank, broker, trust or other nominee with voting instructions, then your shares will be counted in determining the presence of a quorum. If you are a “street name” holder of shares and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares will not be counted in determining the presence of a quorum.

All shares of West common stock held by stockholders that are present via the webcast, or represented by proxy, and entitled to vote at the special meeting, regardless of how such shares are voted or whether such stockholders have indicated on their proxy that they are abstaining from voting, will be counted in determining the presence of a quorum. In the absence of a quorum, the special meeting may be adjourned.

 

Q: Why am I being asked to consider and cast a non-binding advisory vote to approve the compensation that may be paid or become payable to West’s named executive officers that is based on or otherwise relates to the merger?

 

A: SEC rules require companies to seek a non-binding advisory vote to approve certain compensation that may be paid or become payable to their named executive officers that is based on or otherwise relates to corporate transactions such as the merger. In accordance with the rules promulgated under Section 14A of the Exchange Act, West is providing its stockholders with the opportunity to cast a non-binding advisory vote on compensation that may be paid or become payable to West’s named executive officers in connection with the merger. For additional information, see the section entitled “Proposal 2: Non-Binding Compensation Advisory Proposal,” beginning on page 26.

 

Q: What will happen if West stockholders do not approve the non-binding compensation advisory proposal?

 

A: The vote to approve the non-binding compensation advisory proposal is a vote separate and apart from the vote to adopt the merger agreement. Approval of the non-binding compensation advisory proposal is not a condition to completion of the merger, and it is advisory only, meaning that it will not be binding on West or Parent or any of their respective subsidiaries. Accordingly, if the merger agreement is adopted by West’s stockholders and the merger is completed, the compensation that is based on or otherwise relates to the merger will be payable to our named executive officers even if this proposal is not approved.

 

Q: What do I need to do now?

 

A: After carefully reading and considering the information contained in this proxy statement and the Annexes attached to this proxy statement, please vote your shares of West common stock in one of the ways described below as soon as possible. You will be entitled to one vote for each share of West common stock that you held and owned on the record date.

 

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Q: What is a proxy?

 

A: A proxy is your legal designation of another person, referred to as a “proxy,” to vote your shares of common stock. The written document describing the matters to be considered and voted on at the special meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of common stock is called a “proxy card.”

 

Q: How do I vote if I am a stockholder of record?

 

A: You may vote by:

 

    submitting your proxy by completing, signing and dating each proxy card you receive and returning it by mail in the enclosed prepaid envelope;

 

    submitting your proxy by calling the telephone number printed on each proxy card you receive;

 

    submitting your proxy through the Internet voting instructions printed on each proxy card you receive; or

 

    by voting online during the special meeting.

If you are submitting your proxy by telephone or through the Internet, your voting instructions must be received by 11:59 p.m. Eastern Time on the day before the special meeting.

Submitting your proxy by mail, by telephone or through the Internet will not prevent you from voting during the special meeting. If you are present at the special meeting and vote via the webcast by ballot, your previous vote by proxy will not be counted. You are encouraged to submit a proxy by mail, by telephone or through the Internet even if you plan to attend the special meeting online to ensure that your shares of West common stock are represented at the special meeting.

If you return your signed proxy card, but do not mark the boxes showing how you wish to vote, your shares will be voted “ FOR ” the proposal to adopt the merger agreement, “ FOR ” the approval of the non-binding compensation advisory proposal and “ FOR ” the approval of the proposal to adjourn the special meeting if necessary or appropriate.

 

Q: If my shares are held for me by a bank, broker, trust or other nominee, will my bank, broker, trust or other nominee vote those shares for me with respect to the proposals?

 

A: If your shares are held in “street name” through a bank, broker or other nominee, you may vote through your bank, broker or other nominee by completing and returning the voting instruction form provided by your bank, broker or other nominee, or, if such a service is provided by your bank, broker or other nominee, electronically over the Internet or by telephone.

Your bank, broker, trust or other nominee will not have the power to vote your shares of West common stock at the special meeting unless you provide instructions to your bank, broker, trust or other nominee on how to vote. You should instruct your bank, broker, trust or other nominee on how to vote your shares with respect to the proposals, using the instructions provided by your bank, broker, trust or other nominee. You may be able to vote by telephone or through the Internet if your bank, broker, trust or other nominee offers these options.

 

Q: What if I fail to instruct my bank, broker, trust or other nominee how to vote?

 

A:

Your bank, broker, trust or other nominee will NOT be able to vote your shares of West common stock unless you have properly instructed your bank, broker, trust or other nominee on how to vote. Because the proposal to adopt the merger agreement requires the affirmative vote of a majority of the outstanding shares of West common stock, the failure to provide your nominee with voting instructions will have the same

 

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  effect as a vote “ AGAINST ” the proposal to adopt the merger agreement. Furthermore, your shares will not be included in the calculation of the number of shares of West common stock present at the special meeting for purposes of determining whether a quorum is present.

 

Q: May I change my vote after I have mailed my proxy card or after I have submitted my proxy by telephone or through the Internet?

 

A: Yes. You may revoke your proxy or change your vote at any time before it is voted at the special meeting by:

 

    delivering a signed written notice of revocation stating that your proxy is revoked and bearing a date later than the date of the proxy to West’s Corporate Secretary at 11808 Miracle Hills Drive, Omaha, Nebraska 68154;

 

    submitting another proxy by telephone or through the Internet in accordance with the instructions on the enclosed proxy card;

 

    submitting a later-dated proxy card relating to the same shares of West common stock and returning it to us prior to the special meeting; or

 

    attending the special meeting and voting via the webcast by ballot.

If you voted by completing, signing, dating and returning the enclosed proxy card, you should retain a copy of the voter control number found on the proxy card in the event that you later decide to revoke your proxy or change your vote by telephone or through the Internet. Simply attending the special meeting online without voting will not revoke or change your proxy.

“Street name” holders of shares of West common stock should contact their bank, broker, trust or other nominee to obtain instructions as to how to revoke or change their proxies. If you have instructed a bank, broker, trust or other nominee to vote your shares, you must follow the instructions received from your bank, broker, trust or other nominee to change your vote.

All properly submitted proxies received by us before the special meeting that are not revoked or changed prior to being exercised at the special meeting will be voted at the special meeting in accordance with the instructions indicated on the proxies or, if no instructions were provided, “ FOR ” each of the proposals.

 

Q: What does it mean if I receive more than one proxy?

 

A: If you receive more than one proxy, it means that you hold shares of West common stock that are registered in more than one account. For example, if you own your shares in various registered forms, such as jointly with your spouse, as trustee of a trust or as custodian for a minor, you will receive, and you will need to sign and return, a separate proxy card for those shares because they are held in a different form of record ownership. Therefore, to ensure that all of your shares are voted, you will need to submit your proxies by mailing in each proxy card you receive or by telephone or through the Internet by using the different voter control number(s) on each proxy card.

 

Q: What happens if I sell my shares of West common stock before the special meeting?

 

A: The record date for the special meeting is earlier than the expected date of the merger. If you own shares of West common stock as of the close of business on the record date but transfer your shares prior to the special meeting, you will retain your right to vote at the special meeting, but the right to receive the merger consideration will pass to the person who holds your shares as of immediately prior to the effective time of the merger.

 

Q: May I exercise dissenters’ rights or rights of appraisal in connection with the merger?

 

A:

Yes. In order to exercise your appraisal rights, you must follow the requirements set forth in Section 262 of the DGCL. Under Delaware law, holders of record of West common stock who do not vote in favor of

 

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  adopting the merger agreement will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed. Appraisal rights only will be available to these holders if they deliver a written demand for an appraisal to West prior to the vote on the proposal to adopt the merger agreement at the special meeting and they comply with the procedures and requirements set forth in Section 262 of the DGCL, which are summarized in this proxy statement. The appraisal amount could be more than, the same as or less than the amount a stockholder would be entitled to receive under the terms of the merger agreement. A copy of Section 262 of the DGCL is included as Annex C to this proxy statement. For additional information, see the section entitled “Appraisal Rights,” beginning on page 101.

 

Q: If I hold my shares in certificated form, should I send in my stock certificates now?

 

A: No. Shortly after the merger is completed, you will be sent a letter of transmittal that includes detailed written instructions on how to return your stock certificates. You must return your stock certificates in accordance with such instructions in order to receive the merger consideration. PLEASE DO NOT SEND IN YOUR STOCK CERTIFICATE(S) NOW .

 

Q: Should I send in my options, stock units and restricted stock awards now?

 

A: No. Shortly after the merger is completed, your options, stock units and restricted stock awards will either be automatically exchanged for the applicable consideration, or you will receive further instructions for such exchange.

 

Q: When is the merger expected to be completed?

 

A: We and Parent are working toward completing the merger as quickly as possible. We currently anticipate that the merger will be completed during the second half of 2017, but we cannot be certain when or if the conditions to the merger will be satisfied or, to the extent permitted, waived. The merger cannot be completed until the conditions to closing are satisfied (or, to the extent permitted, waived), including the adoption of the merger agreement by West stockholders and the receipt of certain regulatory approvals. For additional information, see the section entitled “The Agreement and Plan of Merger—Conditions to the Closing of the Merger,” beginning on page 95.

 

Q: What happens if the merger is not completed?

 

A: If the proposal to adopt the merger agreement is not approved by the holders of a majority of the outstanding shares of West common stock entitled to vote on the matter or if the merger is not completed for any other reason, you will not receive any consideration from Parent or Sub for your shares of West common stock. Instead, West will remain a public company, and West common stock will continue to be registered under the Exchange Act and listed and traded on the Nasdaq. We expect that our management will operate our business in a manner similar to that in which it is being operated today and that holders of shares of West common stock will continue to be subject to the same risks and opportunities to which they are currently subject with respect to their ownership of West common stock. Under certain circumstances, if the merger is not completed, we may be obligated to pay Parent a termination fee. For additional information, see the section entitled “The Merger—Consequences if the Merger is Not Completed,” beginning on page 67.

 

Q: Where can I find more information about West?

 

A:

West files periodic reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our

 

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  SEC filings are also available to the public at the SEC’s website at www.sec.gov . For a more detailed description of the information available, see the section entitled “Where You Can Find More Information,” beginning on page 115.

 

Q: Who can help answer my questions?

 

A: For additional questions about the merger, assistance in submitting proxies or voting shares of West common stock, or additional copies of the proxy statement or the enclosed proxy card, please contact our proxy solicitor:

Innisfree M&A Incorporated

501 Madison Avenue, 20th floor

New York, New York 10022

Stockholders may call toll free: (888) 750-5834

Banks and Brokers may call collect: (212) 750-5833

If your shares are held for you by a bank, broker, trust or other nominee, you should also call your bank, broker, trust or other nominee for additional information.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including with respect to the merger and business combination between Apollo and the Company, including statements regarding the benefits of the merger and the anticipated timing of the merger. Forward-looking statements can be generally identified by the use of words such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “continue” or similar terminology. These statements reflect only West’s current expectations and are not guarantees of future performance or results. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that the merger may not be completed in a timely manner, or at all, which may adversely affect the Company’s business and the price of West common stock; the failure to satisfy the conditions to the consummation of the merger, including the adoption of the merger agreement by the stockholders of the Company and the receipt of certain governmental and regulatory approvals; the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; the risk that the merger agreement may be terminated in circumstances that require West to pay Parent a termination fee of $72 million; the effect of the announcement or pendency of the merger on the Company’s business relationships, operating results, and business generally; risks that the merger disrupts current plans and operations of the Company and potential difficulties in the Company’s employee retention as a result of the merger; risks related to diverting management’s attention from the Company’s ongoing business operations; the outcome of any legal proceedings that may be instituted against the Company, its officers or directors related to the merger agreement or the merger; the possibility that competing offers or acquisition proposals for the Company will be made; risks regarding the failure to obtain the necessary financing to complete the merger; risks related to the equity and debt financing and related guarantee arrangements entered into in connection with the merger; competition in West’s highly competitive markets; increases in the cost of voice and data services or significant interruptions in these services; West’s ability to keep pace with its clients’ needs for rapid technological change and systems availability; the continued deployment and adoption of emerging technologies; the loss, financial difficulties or bankruptcy of any key clients; security and privacy breaches of the systems West uses to protect personal data; the effects of global economic trends on the businesses of West’s clients; the non-exclusive nature of West’s client contracts and the absence of revenue commitments; the cost of pending and future litigation; the cost of defending against intellectual property infringement claims; the effects of extensive regulation affecting many of West’s businesses; West’s ability to protect its proprietary information or technology; service interruptions to West’s data and operation centers; West’s ability to retain key personnel and attract a sufficient number of qualified employees; increases in labor costs and turnover rates; the political, economic and other conditions in the countries where West operates; changes in foreign exchange rates; West’s ability to complete future acquisitions, integrate or achieve the objectives of its recent and future acquisitions; and future impairments of our substantial goodwill, intangible assets, or other long-lived assets. In addition, West is subject to risks related to its level of indebtedness. Such risks include West’s ability to generate sufficient cash to service its indebtedness and fund its other liquidity needs; West’s ability to comply with covenants contained in its debt instruments; West’s ability to obtain additional financing; the incurrence of significant additional indebtedness by West and its subsidiaries; and the ability of West’s lenders to fulfill their lending commitments. West is also subject to other risk factors described in documents filed by the Company with the SEC, including the factors described in Item 1A of West’s Annual Report on Form 10-K for the year ended December 31, 2016. See the section entitled “Where You Can Find More Information,” beginning on page 115.

These forward-looking statements speak only as of the date on which the statements were made. West undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

 

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PARTIES TO THE MERGER

West Corporation

West is a global provider of communication and network infrastructure services. West helps its clients more effectively communicate, collaborate and connect with their audiences through a diverse portfolio of solutions that include unified communications services, safety services, interactive services such as automated notifications, telecom services and specialized agent services. For 30 years, West has provided reliable, high-quality voice and data services. West has sales and operations in the United States, Canada, Europe, the Middle East, Asia Pacific and Latin America.

West’s five operating segments (Unified Communications Services, Telecom Services, Safety Services, Interactive Services and Specialized Agent Services) are aggregated into four reportable segments as follows:

 

    Unified Communications Services, including collaboration services, unified communications as a service services and telecom services and which, for the year ended December 31, 2016, represented approximately 62.2% of West’s total revenue;

 

    Safety Services, including carrier services, next generation 9-1-1, government solutions and advanced services;

 

    Interactive Services, including outbound (proactive notifications—voice, text/SMS and chat), inbound speech solutions (interactive voice response), cloud contact center technologies, web, mobile and professional services; and

 

    Specialized Agent Services, including healthcare advocacy services, cost management services and revenue generation services.

West’s principal executive offices are located at 11808 Miracle Hills Drive, Omaha, Nebraska 68154, and our telephone number is (800) 841-9000. Our website address is www.west.com. The information provided on our website is not part of this proxy statement and is not incorporated by reference in this proxy statement by this or any other reference to our website in this proxy statement.

Additional information about West is contained in our public filings, which are incorporated by reference in this proxy statement. See the section entitled “Where You Can Find More Information,” beginning on page 115, for more information.

Parent (Mount Olympus Holdings, Inc.)

Parent is an affiliate of the Apollo Funds managed by Apollo Management. Parent, Apollo Management and the Apollo Funds are affiliates of AGM. AGM is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong and Shanghai. AGM had assets under management of approximately $197 billion as of March 31, 2017 in private equity, credit and real estate funds invested across a core group of nine industries where AGM has considerable knowledge and resources. AGM’s units are listed on the NYSE under the symbol “ APO .” Parent was formed on May 5, 2017, solely for the purpose of engaging in the transactions contemplated by the merger agreement. Parent has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement. Parent’s principal executive offices are located at 9 West 57th Street, 43rd Floor, New York, NY 10019, and its telephone number is (212) 515-3200.

Sub (Olympus Merger Sub, Inc.)

Sub is a wholly owned subsidiary of Parent and was formed on May 5, 2017, solely for the purpose of engaging in the transactions contemplated by the merger agreement. Sub has not engaged in any business activities other than in connection with the transactions contemplated by the merger agreement. Sub’s principal executive offices are located at 9 West 57th Street, 43rd Floor, New York, NY 10019, and its telephone number is (212) 515-3200.

 

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THE SPECIAL MEETING

We are furnishing this proxy statement as part of the solicitation of proxies by the Board for use at the special meeting and at any properly convened meeting following an adjournment or postponement of the special meeting.

Date, Time and Place of the Special Meeting

The special meeting will be held on [●], 2017, at [●] a.m. Central Time. This special meeting will be a completely virtual meeting of stockholders, which will be conducted solely via webcast. You will be able to attend the special meeting online, vote your shares and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/WSTC2017SM . Please note that you will not be able to attend the special meeting in person.

Purpose of the Special Meeting

At the special meeting, West’s stockholders of record will be asked to consider and vote on:

 

  1. A proposal to adopt the merger agreement, pursuant to which, subject to the satisfaction or waiver of certain specified conditions, Sub will merge with and into West, with West continuing as the surviving corporation;

 

  2. A proposal to approve, by a non-binding advisory vote, the compensation that may be paid or become payable to West’s named executive officers that is based on or otherwise relates to the merger, as discussed in the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger,” beginning on page 56; and

 

  3. A proposal to adjourn the special meeting to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

Recommendation of the Board

The Board carefully reviewed and considered the terms and conditions of the merger agreement, the merger and the other transactions contemplated by the merger agreement. By a unanimous vote, the Board approved the merger agreement and the transactions contemplated thereby, including the merger, declared that, on the terms and subject to the conditions set forth in the merger agreement, the merger agreement and the consummation by West of the transactions contemplated by the merger agreement, including the merger, are advisable and in the best interests of, West and its stockholders, directed that a proposal to adopt the merger agreement be submitted to a vote at a meeting of West stockholders and resolved to recommend that West stockholders vote for adoption of the merger agreement. Accordingly, the Board unanimously recommends a vote “ FOR ” the proposal to adopt the merger agreement.

The Board also unanimously recommends a vote “ FOR ” the non-binding compensation proposal and “ FOR ” the approval of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

Record Date and Quorum

Each holder of record of shares of West common stock as of the close of business on [●], 2017, which is the record date for the special meeting, is entitled to receive notice of, and to vote at, the special meeting. You will be entitled to one vote for each share of West common stock that you held and owned on the record date. As of

 

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the record date, there were [●] shares of West common stock issued and outstanding and entitled to vote at the special meeting. The presence at the special meeting, via the webcast or by proxy, of the holders of [●] shares of West common stock (a majority of the voting power of the shares of West common stock issued and outstanding and entitled to vote) constitutes a quorum for the special meeting.

If you are a West stockholder of record and you vote by mail, by telephone or through the Internet or online during the special meeting, then your shares of West common stock will be counted as part of the quorum. If you are a “street name” holder of shares of West common stock and you provide your bank, broker, trust or other nominee with voting instructions, then your shares will be counted in determining the presence of a quorum. If you are a “street name” holder of shares and you do not provide your bank, broker, trust or other nominee with voting instructions, then your shares will not be counted in determining the presence of a quorum.

All shares of West common stock held by stockholders of record that are present via the webcast, or represented by proxy and entitled to vote at the special meeting, regardless of how such shares are voted or whether such stockholders abstain from voting, will be counted in determining the presence of a quorum. In the absence of a quorum, the special meeting may be adjourned.

Vote Required for Approval

Merger Agreement Proposal. The proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of West common stock entitled to vote on such matter.

Non-Binding Compensation Advisory Proposal. The approval of the non-binding compensation advisory proposal requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. The vote is advisory only and, therefore, is not binding on West or Parent or any of their respective subsidiaries, and, if the merger agreement is adopted by West stockholders and the merger is completed, the compensation that is based on or otherwise relates to the merger will be payable to our named executive officers even if this proposal is not approved.

Adjournment Proposal. The approval of the proposal to adjourn the special meeting if necessary or appropriate requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. In addition, even if a quorum is not present at the special meeting, the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter may adjourn the meeting to another place, date or time.

Effect of Abstentions and Broker Non-Votes

The proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of West common stock entitled to vote on such matter. Therefore, the failure to vote or the abstention from voting will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement.

The approval of the non-binding compensation advisory proposal requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. Consequently, broker non-votes will have no effect on approval of the proposal. However, the abstention from voting will have the same effect as a vote “ AGAINST ” the proposal.

The proposal to adjourn the special meeting if necessary or appropriate requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy

 

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at the special meeting entitled to vote on such matter. Consequently, broker non-votes will have no effect on approval of the proposal. However, the abstention from voting will have the same effect as a vote “ AGAINST ” the proposal. In addition, even if a quorum is not present at the special meeting, the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter may adjourn the meeting to another place, date or time. In that case, broker non-votes will have no effect on approval of the proposal; however, the abstention from voting will have the same effect as a vote “ AGAINST ” the proposal.

Under Nasdaq rules, all of the proposals in this proxy statement are non-routine matters. Accordingly, if your shares are held in “street name,” a bank, broker, trust or other nominee will NOT be able to vote your shares of West common stock (which we refer to as a “ broker non-vote ”), and your shares will not be counted in determining the presence of a quorum unless you have properly instructed your bank, broker, trust or other nominee on how to vote. Because the proposal to adopt the merger agreement requires the affirmative vote of a majority of the outstanding shares of West common stock, the failure to provide your bank, broker, trust or other nominee with voting instructions will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement. Because the approval of each of (1) the non-binding compensation advisory proposal and (2) the proposal to adjourn the special meeting if necessary or appropriate requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter, and because your bank, broker, trust or other nominee does not have discretionary authority to vote on either proposal, the failure to provide your bank, broker, trust or other nominee with voting instructions will have no effect on approval of that proposal.

How to Vote

Stockholders have a choice of voting by proxy by completing a proxy card and mailing it in the prepaid envelope provided, by calling a toll-free telephone number or through the Internet. Please refer to your proxy card or the information forwarded by your bank, broker, trust or other nominee to see which options are available to you. The telephone and Internet voting facilities for stockholders of record will close at 11:59 p.m. Eastern Time on the day before the special meeting.

If you submit your proxy by mail, by telephone or through the Internet voting procedures, but do not include “ FOR, AGAINST ” or “ ABSTAIN ” on a proposal to be voted, your shares of West common stock will be voted in favor of that proposal. If you indicate “ ABSTAIN ” on a proposal to be voted, it will have the same effect as a vote “ AGAINST ” that proposal. If you wish to vote by proxy and your shares are held by a bank, broker, trust or other nominee, you must follow the voting instructions provided to you by your bank, broker, trust or other nominee. Unless you give your bank, broker, trust or other nominee instructions on how to vote your shares of West common stock, your bank, broker, trust or other nominee will not be able to vote your shares on the proposals.

If you wish to vote via the webcast at the special meeting and your shares are held in the name of a bank, broker or other holder of record, you must obtain a legal proxy, executed in your favor, from the bank, broker or other holder of record authorizing you to vote at the special meeting.

If you do not submit a proxy or otherwise vote your shares of West common stock in any of the ways described above, it will have the same effect as a vote “ AGAINST ” the proposal to adopt the merger agreement, but will have no effect on approval of the non-binding compensation advisory proposal or the approval of the proposal to adjourn the special meeting if necessary or appropriate. Furthermore, your shares will not be included in the calculation of the number of shares of West common stock present at the special meeting for purposes of determining whether a quorum is present.

If you have any questions about how to vote or direct a vote in respect of your shares of West common stock, you may contact our proxy solicitor, Innisfree M&A Incorporated, toll-free at (888) 750-5834. Banks and brokers may call (212) 750-5833.

 

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YOU SHOULD NOT SEND IN YOUR SHARE CERTIFICATE(S) WITH YOUR PROXY CARD. A letter of transmittal with instructions for the surrender of certificates representing shares of West common stock will be mailed to stockholders if the merger is completed.

Revocation of Proxies

Any proxy given by a West stockholder may be revoked at any time before it is voted at the special meeting by doing any of the following:

 

    by submitting another proxy by telephone or through the Internet, in accordance with the instructions on the proxy card;

 

    by delivering a signed written notice of revocation bearing a date later than the date of the proxy to West’s Corporate Secretary at 11808 Miracle Hills Drive, Omaha, Nebraska 68154, stating that your proxy is revoked;

 

    by submitting a later-dated proxy card relating to the same shares of West common stock; or

 

    by attending the special meeting online and voting (your attendance at the special meeting will not, by itself, revoke your proxy; you must vote online during the special meeting).

“Street name” holders of shares of West common stock should contact their bank, broker, trust or other nominee to obtain instructions as to how to revoke or change their proxies.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned or postponed one or more times to a later day or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement. Your shares will be voted on any adjournment proposal in accordance with the instructions indicated in your proxy.

If a quorum is present at the special meeting, the special meeting may be adjourned if there is an affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. In addition, even if a quorum is not present at the special meeting, the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter may adjourn the meeting to another place, date or time. In either case, the adjourned meeting may take place without further notice other than by an announcement made at the special meeting unless the adjournment is for more than 30 days or, if, after the adjournment, a new record date is fixed for the adjourned meeting, in which case a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the special meeting. If a quorum is not present at the special meeting, or if a quorum is present at the special meeting but there are insufficient votes at the time of the special meeting to adopt the merger agreement, then West may seek to adjourn the special meeting. In addition, the Board may, after consultation with Parent, postpone the special meeting upon public announcement made prior to the date previously scheduled for the special meeting for the purpose of soliciting additional proxies or as otherwise permitted under the merger agreement.

Solicitation of Proxies

West is soliciting the enclosed proxy card on behalf of the Board, and West will bear the expenses in connection with the solicitation of proxies. In addition to solicitation by mail, West and its directors, officers and employees may solicit proxies in person, by telephone or by electronic means. These persons will not be specifically compensated for doing this.

West has retained Innisfree M&A Incorporated to assist in the solicitation process. West will pay Innisfree M&A Incorporated a fee of approximately $17,500 plus reimbursement of certain specified out-of-pocket

 

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expenses. West also has agreed to indemnify Innisfree M&A Incorporated against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

West will ask banks, brokers, trusts and other nominees to forward West’s proxy solicitation materials to the beneficial owners of shares of West common stock held of record by such banks, brokers, trusts or other nominees. West will reimburse these banks, brokers, trusts or other nominees for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

Stockholder List

A list of West stockholders entitled to vote at the special meeting will be available for examination by any West stockholder at the Company’s headquarters. At least ten days prior to the date of the special meeting, this stockholder list will be available for inspection by West stockholders, subject to compliance with applicable provisions of Delaware law, during ordinary business hours at our corporate offices located at 11808 Miracle Hills Drive, Omaha, Nebraska 68154. The stockholder list will also be available for examination by any stockholder during the whole time of the special meeting by visiting www.virtualshareholdermeeting.com/WSTC2017SM .

Questions and Additional Information

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please call our proxy solicitor, Innisfree M&A Incorporated, toll-free at (888) 750-5834. Banks and brokers may call (212) 750-5833.

 

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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

As discussed elsewhere in this proxy statement, West stockholders will consider and vote on a proposal to adopt the merger agreement. You should carefully read this proxy statement in its entirety for more detailed information concerning the merger agreement and the merger. In particular, you should read in its entirety the merger agreement, which is attached as Annex  A to this proxy statement. In addition, see the sections entitled “The Merger,” beginning on page 28, and “The Agreement and Plan of Merger,” beginning on page 75.

The Board unanimously recommends that West stockholders vote “ FOR ” the proposal to adopt the merger agreement.

If you return a properly executed proxy card, but do not indicate instructions on your proxy card, your shares of West common stock represented by such proxy card will be voted “ FOR ” the proposal to adopt the merger agreement.

Under our restated certificate of incorporation and Delaware law, the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of West common stock entitled to vote on such proposal.

 

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PROPOSAL 2: NON-BINDING COMPENSATION ADVISORY PROPOSAL

Under Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are required to provide stockholders the opportunity to vote to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable to West’s named executive officers, Thomas Barker, Ronald Beaumont, Nancee Berger, J. Scott Etzler and Jan Madsen, that is based on or otherwise relates to the merger, as disclosed in the section entitled “The Merger—Interests of Directors and Executive Officers in the Merger—Golden Parachute Compensation,” beginning on page 63 including the table entitled “Golden Parachute Payments” and accompanying footnotes. Accordingly, West stockholders are being provided with the opportunity to cast an advisory vote on such payments.

As an advisory vote, this proposal is not binding upon West or the Board, and approval of this proposal is not a condition to completion of the merger. Because the merger-related executive compensation is based on the terms of the merger agreement as well as the contractual arrangements with the named executive officers, such compensation will be payable, regardless of the outcome of this advisory vote, if the merger agreement is adopted (subject only to the contractual conditions applicable thereto). However, West seeks your support and believes that your support is appropriate because West has a comprehensive executive compensation program designed to link the compensation of our executives with West’s performance and the interests of West’s stockholders. Accordingly, we ask that you vote on the following resolution:

“RESOLVED, that the stockholders of West Corporation approve, on an advisory, non-binding basis, the compensation that may be paid or become payable to the named executive officers of West Corporation that is based on or otherwise relates to the merger, as disclosed pursuant to Item 402(t) of Regulation S-K under the heading “The Merger—Interests of Directors and Executive Officers in the Merger—Golden Parachute Compensation,” beginning on page 63 (which disclosure includes the Golden Parachute Compensation Table required pursuant to Item 402(t) of Regulation S-K).”

The Board unanimously recommends that West stockholders vote “ FOR ” the non-binding compensation advisory proposal.

If you return a properly executed proxy card, but do not indicate instructions on your proxy card, your shares of West common stock represented by such proxy card will be voted “ FOR ” the non-binding compensation advisory proposal.

The approval of the non-binding compensation advisory proposal requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. The vote is advisory only and, therefore, not binding on West or Parent or any of their respective subsidiaries, and, if the merger agreement is adopted by West’s stockholders and the merger is completed, the compensation that is based on or otherwise relates to the merger will be payable to our named executive officers even if this proposal is not approved.

 

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PROPOSAL 3: AUTHORITY TO ADJOURN THE SPECIAL MEETING

West stockholders may be asked to adjourn the special meeting to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

The Board unanimously recommends that stockholders vote “ FOR ” the proposal to adjourn the special meeting to a later date or time if necessary or appropriate, including to solicit additional proxies in favor of the proposal to adopt the merger agreement if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

If you return a properly executed proxy card, but do not indicate instructions on your proxy card, your shares of West common stock represented by such proxy card will be voted “ FOR ” the proposal to adjourn the special meeting to a later date or time if necessary or appropriate.

The approval of the proposal to adjourn the special meeting if necessary or appropriate requires the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter. In addition, even if a quorum is not present at the special meeting, the affirmative vote of shares representing a majority of the voting power of the shares present via the webcast or represented by proxy at the special meeting entitled to vote on such matter, may adjourn the meeting to another place, date or time.

 

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THE MERGER

Overview

West is seeking the adoption by West stockholders of the merger agreement West entered into on May 9, 2017 with Parent and Sub. Under the terms of the merger agreement, subject to the satisfaction or waiver of specified conditions, Sub will merge with and into West. West will survive the merger as a wholly owned subsidiary of Parent. The Board has approved the merger agreement and the transactions contemplated thereby, including the merger, and unanimously recommends that West stockholders vote “ FOR ” the proposal to adopt the merger agreement.

Upon completion of the merger, each share of West common stock that is issued and outstanding immediately prior to the effective time of the merger (other than (i) shares held by stockholders of West who have properly exercised and perfected appraisal rights under Delaware law, (ii) shares that are held in the treasury of West or (iii) shares that are owned of record by any wholly owned subsidiary of West, Parent or any wholly owned subsidiary of Parent) will automatically be cancelled, cease to exist, and will be converted into the right to receive $23.50 per share in cash, without interest, and subject to any applicable withholding taxes.

Following the completion of the merger, West will cease to be a publicly traded company and will become a wholly owned subsidiary of Parent.

Background of the Merger

Since West’s initial public offering in March 2013, the Board and Company management have regularly reviewed the Company’s business strategy and strategic plan and evaluated strategic and financial opportunities to maximize stockholder value. In addition, the Board and management periodically review and assess West’s competitive position and actively monitor and assess industry trends; West’s short- and long-term performance; West’s stock price performance; and potential strategic and financial initiatives, including stock buybacks, internal restructurings, dispositions of all or part of the Company, acquisitions and strategic partnerships available to the Company. The Board and management also periodically discuss potential challenges that West faces in executing its strategic plan.

In September 2015, representatives of a strategic party, which we refer to as “ Party A ,” contacted Mr. Thomas Barker, the Company’s Chief Executive Officer and the Chairman of the Board, and Mr. David Treinen, the Company’s Executive Vice President, Corporate Development and Planning, to express Party A’s interest in potentially acquiring the Company’s Safety Services segment. The Company subsequently entered into a confidentiality and standstill agreement with Party A in October 2015. After an in-person meeting with members of Company management in December 2015, Party A submitted a preliminary indication of interest on January 20, 2016 with respect to the potential acquisition of the Company’s Safety Services segment, excluding its 911 Enable business (which we refer to as the “ January 2016 Party A Proposal ”).

In late November 2015, a representative of a financial sponsor, which we refer to as “ Party B ,” contacted a representative of THL (along with Quadrangle, one of the Company’s two financial sponsors, affiliates of which are significant stockholders in the Company and representatives of which are members of the Board), regarding the potential combination of the Company’s Unified Communications Services segment with a portfolio company of Party B, which we refer to as “ Party C .” A representative of THL contacted Messrs. Barker and Treinen regarding this outreach by Party B, and on January 22, 2016, Mr. Treinen had a discussion with a representative of Party B regarding such a combination.

At a regular meeting of the Board on January 28, 2016, Company management provided an update to the Board on the discussions with Party A and Party B and reviewed the January 2016 Party A Proposal. After discussion with Company management, the Board determined that the January 2016 Party A Proposal did not

 

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reflect an attractive valuation of the Company’s Safety Services segment and that, in any event, in order to help the Board evaluate the merits of any divestiture of one or more of the Company’s segments, the Board should first consider the full range of strategic and financial alternatives available to the Company. The Board instructed Company management to begin an evaluation of each of the Company’s segments, both individually and as a whole, including the creation of five-year financial projections for the Company and its segments. The Board also instructed Company management to begin the process of considering outside resources, including financial advisors, that could be engaged to assist in such evaluation. The Board authorized Company management to continue to have preliminary conversations with any parties expressing inbound interest in a potential business combination involving the Company if, in Company management’s judgment, such party’s ability to undertake a transaction was credible and such party’s interest was serious.

After the January 28, 2016 Board meeting, Company management began outreach to investment banking firms that could potentially be engaged by the Company to conduct a financial analysis of the Company to assist the Company with its analysis of each of the competitive landscape, market trends, growth opportunities, profitability, margins, products and services of the Company and each of the Company’s segments and to assist the Board in assessing, among other things, the Company’s current positioning and valuation in the equity market, as well as potential strategies to enhance shareholder value. The Company solicited proposals from certain investment banking firms, ultimately interviewing four finalists, including Centerview.

On February 19, 2016, Mr. Barker met with representatives of Party B to discuss the Company’s Unified Communications Services segment and Party C’s business.

In April 2016, the Company selected Centerview to serve as financial advisor with respect to the analysis described above on the basis of Centerview’s qualifications, expertise and reputation. The Company entered into an engagement agreement with Centerview on June 23, 2016 that detailed the financial advisory services to be provided by Centerview, but did not finalize the amount and structure of fees to be paid to Centerview.

Beginning in the spring of 2016 and continuing into the fourth quarter of 2016, Company management continued its business and financial analysis of each of the Company’s segments, including a review of the competitive landscape, market trends, growth opportunities, profitability, margins, products and services of each segment.

In April 2016, the Company and Party B entered into a confidentiality and standstill agreement in order to, among other things, permit each party to share information with the other in order to understand potential cost synergies that could result from a potential combination of the Company’s Unified Communications Services segment with Party C.

In May 2016, Mr. Treinen and Ms. Jan Madsen, the Company’s Chief Financial Officer, met telephonically with representatives of Party B to discuss potential synergies that could result from a potential combination of the Company’s Unified Communications Services segment with Party C.

In June 2016, a representative of a strategic party, which we refer to as “ Party D ,” contacted Messrs. Barker and Treinen and indicated that Party D was interested in a possible business combination involving the Company’s Unified Communications Services segment or all of the Company.

Also in June 2016, Mr. Treinen and representatives from Centerview met with Party B and their financial advisors in New York City to review the analyses conducted by both West and Party B of the potential synergies resulting from a potential combination of the Company’s Unified Communications Services segment with Party C, and to review the potential tax, legal and credit implications of various alternative structures for a potential business combination. At such meeting, representatives of Party B indicated that they may in due course revert to the Company with a proposal regarding a potential transaction.

 

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In June 2016, the Company and Party D entered into a confidentiality agreement. On June 30, 2016, Messrs. Barker and Treinen, together with Scott Etzler, the Company’s President—Unified Communications Services and President—Revenue Generation, met with representatives of Party D to discuss the Company.

At a regular meeting of the Board on July 29, 2016, Company management and representatives of Centerview discussed with the Board the Company’s historical financial performance and the five-year financial projections that the Company was in the process of developing, as well as their ongoing evaluation of the strategic positioning of each of the Company’s segments. Centerview discussed a preliminary analysis of the Company’s stock market valuation, as well as factors impacting that valuation, including, among other things, the Company’s operating performance and financial outlook, capital structure, capital allocation priorities and other areas of investor focus. The Board, Centerview and Company management observed that West’s various segments exhibit differing financial profiles and, as a result, investors may have difficulty giving appropriate value to the Company’s individual segments or to the Company as a whole. The Board also noted, among other things, the continuing challenges facing the Unified Communications Services segment, namely trends indicating declining minute volumes growth and compression of pricing that results in a difficult revenue growth profile for the segment. Company management also discussed with the Board the unsolicited inquiry that was received from Party D and reported on the status of discussions with Party A and Party B.

In August 2016, a representative of a financial sponsor, which we refer to as “ Party E ,” contacted Messrs. Barker and Treinen to indicate that Party E was interested in exploring a possible business combination involving some or all of the Company. The Company and Party E entered into a confidentiality and standstill agreement on September 27, 2016, and representatives of Party E met with Messrs. Barker and Treinen on September 28, 2016 to discuss the Company.

At a regular meeting of the Board on October 27, 2016, Company management reviewed third quarter 2016 results which showed, among other things, that the Company had lower than expected revenue from its conferencing business, with July being the weakest month of the quarter, and that conferencing total minutes and minutes per business day were lower than expected in the third quarter. In addition, Company management informed the Board that it intended to indicate publicly that the Company would end the year at the low end of guidance, while the market’s consensus at the time was that the Company would end the year at the mid to upper range of guidance. Company management provided an update to the Board on the status of discussions with Party A, Party B, Party D and Party E. The Board determined that, as a result of the continued expected decline of conferencing revenue and profitability, the Company should formalize a process to explore potential strategic and financial alternatives, including conducting broad-based outreach to potential bidders. The Board concluded that the evaluation of alternatives should include the potential sale or other disposition of one or more of West’s segments, in particular the Company’s Unified Communications Services segment, as well as the possible sale of the Company. It was later concluded that the Company would make a public announcement to that effect, which announcement (which we refer to as the “ Announcement ”) was included in the Company’s third quarter results, released after the close of trading on November 1, 2016. The Company disclosed in the Announcement that it had retained Centerview as its financial advisor and Sidley Austin LLP (which we refer to as “ Sidley Austin ”) as its legal advisor in connection with this effort. We refer to the process conducted by the Company after the Announcement to explore a potential sale or other disposition of one or more of West’s segments, including a sale of the Company, as the “ Process .”

On November 2, 2016, the Company’s shares closed at $21.56, representing an increase of approximately 8% over the closing price of $20.01 per share on the prior trading day, despite the fact that its revenue was lower for the third quarter compared to the prior year period, the conferencing business’s revenue for the third quarter was lower than expected and that the Company expected to finish the year with revenue and adjusted earnings per share at the low end of the Company’s original guidance ranges. Subsequent to November 2, 2016, at the Board’s instruction, Centerview began preliminary outreach to potentially interested parties to highlight the Announcement.

 

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The Board held a telephonic meeting on November 15, 2016 with its financial and legal advisors. Representatives of Sidley Austin discussed with the Board its fiduciary duties in the context of the Process, including a potential sale of West, and reviewed with the Board the financial advisor due diligence (including review of a report provided by Centerview on its relationships with the Company and certain large stockholders of the Company) conducted by Sidley Austin and the Company with respect to Centerview. Mr. Treinen then discussed with the Board an overview of (i) management’s updated five-year financial projections and a comparison of such revised five-year financial projections to the preliminary five-year projections previously discussed with the Board on July 27, 2016, (ii) an analysis of the Company’s estimated tax basis in its various segments, (iii) the tax implications of possible sale or spin-off transaction structures, and (iv) certain structuring considerations with respect to the Company’s outstanding debt. Representatives of Centerview then discussed with the Board (i) Centerview’s preliminary views regarding the Company’s stock price and trading volumes following the Announcement, (ii) potential strategic and financial alternatives available in addition to a sale of the Company (including the implications of selling the Unified Communications Services segment for cash, selling one or all of the non-Unified Communications Services segments for cash, and separating the Unified Communications Services segment from the non-Unified Communications Services segments via a spin-off) and (iii) a preliminary financial analysis of the valuation of the Company, as well as of its segments independently. Representatives of Centerview also discussed the proposed Process, including the results of the initial outreach conducted by Centerview following the Announcement, a broad list of more than 50 potentially-interested parties to be contacted (consisting of both strategic parties and financial sponsors that Centerview and Company management believed would potentially be interested in, and capable of completing, a transaction), Centerview’s proposed plans for outreach to such parties and potential timing of certain milestones in the Process, including a target date for preliminary indications of interest to be submitted by potential bidders. The Board directed Centerview to continue its outreach efforts to potentially-interested parties and agreed to meet again in early December to receive a further report and update regarding the Process. The Board determined that management would not be permitted to engage in any discussions with any potential buyer regarding post-closing compensation and employment arrangements unless authorized by the Board.

After the November 15, 2016 Board meeting, at the direction of the Board, representatives of Centerview began broad outreach efforts, contacting strategic buyers and financial sponsors that might be interested in acquiring the Company or one or more of its segments. In addition, Centerview responded to potentially-interested parties that approached West or Centerview in response to the Announcement. (Those interested in discrete assets within the Company’s segments were informed that the Company was not entertaining such transactions at this time.) Potentially-interested parties were provided a confidentiality agreement that included standstill and anti-clubbing provisions, which were designed to enhance the Board’s control over the Process. The standstill provisions did not include any so-called “don’t ask, don’t waive” provisions which would prohibit bidders from requesting, publicly or privately, that the Company waive the standstill and permitted bidders to make proposals to the Board even after West’s entry into any definitive acquisition agreement.

In late-November 2016, at the direction of the Board, Centerview began providing to parties that executed confidentiality agreements information related to the Company, including a confidential information memorandum (“ CIM ”), which contained general background and confidential non-public business and financial information, including financial projections for the years 2017 through 2019 (see the section entitled “—Forward-Looking Financial Information” below). Centerview assisted the Company in managing first-round buyer due diligence and was in contact with the parties that received CIMs to answer questions and discuss the Process. Among others, each of Apollo, Party A, Party B, Party D, Party E and certain other financial sponsors which we refer to as “ Party F ,” “ Party G ,” “ Party H ,” “ Party I ,” “ Party J ,” “ Party K ” and “ Party L ” were contacted by Centerview in November and December 2016 as part of the initial outreach process, executed confidentiality agreements in November or December 2016 and were provided with CIMs and the ability to engage in first-round buyer due diligence. On December 5, 2016, with the Board’s approval, Centerview sent over 20 potentially-interested parties, including each of Apollo, Party A, Party B, Party D, Party E, Party F, Party G, Party H, Party I, Party J, Party K and Party L, a bid letter requesting a preliminary indication of interest for a potential acquisition of the Company (which we refer to as a “ Potential Whole-Company Acquisition ”) or a possible acquisition of one or more of the Company’s segments (which we refer to, each, as a “ Potential Segment Acquisition ”) by December 20, 2016.

 

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The Board held a telephonic meeting on December 9, 2016 with its financial and legal advisors. At the meeting, representatives of Centerview provided to the Board an update regarding the Process, including a description of potentially-interested parties contacted by Centerview to date, the status of confidentiality agreements executed by or being negotiated with such parties and inbound inquiries received from additional parties regarding certain discrete assets of the Company, and the December 20, 2016 deadline for potentially-interested parties to submit a preliminary indication of interest. Representatives of Centerview then discussed with the Board the information provided to potentially-interested parties that had executed confidentiality agreements, including the CIM, and preliminary due diligence being conducted by such parties. The Board discussed with the financial and legal advisors, and with Company management, the next steps in the Process, in the event the Board determined to move forward with the Process following analysis of the preliminary indications of interest received, including the commencement of management presentations and detailed due diligence with a limited number of parties starting in January 2017.

On December 14, 2016, Party E informed Centerview that it would not be submitting any proposal.

On December 16, 2016, Party B submitted a written indication of interest proposing that West acquire Party C for an undetermined amount of cash and stock (which we refer to as the “ Party B Proposal ”). No other financial terms of the proposed acquisition were provided, other than Party B’s view of potential synergies and impact on West earnings per share and stock price.

On December 20, 2016 and December 21, 2016, the Company received three non-binding, preliminary indications of interest regarding a Potential Whole-Company Acquisition from Apollo, Party F and Party H, respectively, and five non-binding, preliminary indications of interest regarding a Potential Segment Acquisition from Party A, Party G, Party J, Party K and Party L, respectively (which we refer to collectively as the “ Preliminary Indications of Interest ”).

With respect to the Preliminary Indications of Interest contemplating a Potential Whole-Company Acquisition, Apollo’s proposal contemplated a price per share in the range of $26.00 to $30.00, Party F’s proposal contemplated a price per share in the range of $26.50 to $28.50, and Party H’s proposal contemplated a price per share in the range of $25.00 to $26.00. Party F’s proposal also required that Party F be allowed to partner with Party I. Party I had previously been contacted by Centerview with regard to the Process, and Party F and Party I were granted permission for such partnership.

With respect to the Preliminary Indications of Interest contemplating a Potential Segment Acquisition, Party A’s Preliminary Indication of Interest contemplated an acquisition of the Safety Services segment for between $1.1 billion and $1.2 billion. Party G’s Preliminary Indication of Interest contemplated an acquisition of the Interactive Services segment for between $836 million and $912 million. Party J’s Preliminary Indication of Interest contemplated an acquisition of the Specialized Agent Services segment for between $600 million and $650 million. Party K’s Preliminary Indication of Interest contemplated an acquisition of the Unified Communications Services segment for $2.3 billion. Party L’s Preliminary Indication of Interest contemplated an acquisition of the non-Unified Communications Services segments for $1.85 billion; such indication was raised on January 5, 2017 to $2.5 billion after Centerview informed Party L that its value was insufficient and would not be considered. Each of the Preliminary Indications of Interest was subject to, among other things, the completion of due diligence and the negotiation of a definitive agreement.

Also on December 20, 2016, Party D informed Centerview that it was only interested in specific assets within West’s Unified Communications Services segment and thus would not be submitting any proposal.

The Board held a telephonic meeting on December 21, 2016 with its financial and legal advisors. At the meeting, representatives of Centerview provided to the Board an update regarding the Process, including a description of potentially-interested parties contacted by Centerview to date, a summary of the Preliminary Indications of Interest received to date (which did not include those received from Party K and Party L, which

 

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were delivered after the telephonic Board meeting), the Party B Proposal, and a report on indications of interest that may be forthcoming from additional parties. Centerview also proposed potential next steps in the Process. The Board agreed to meet in early January to receive additional analyses and reports from Centerview regarding the Preliminary Indications of Interest, including any additional proposals that were submitted, and determined next steps in the Process. At the Board’s direction, Centerview informed the bidders that they would receive formal feedback on their Preliminary Indications of Interest, as well next steps with regard to the Process, after the December 2016 holiday period.

The Board held a telephonic meeting on January 10, 2017 with its financial and legal advisors. Representatives of Sidley Austin reviewed with the Board their fiduciary duties and certain legal issues in connection with the Process. Representatives of Centerview then provided to the Board an update regarding the Process and further analyses of the Preliminary Indications of Interest (including a summary of each Preliminary Indication of Interest, including those received after the last Board meeting on December 21, 2016) and the Party B Proposal. Representatives of Centerview next discussed with the Board Centerview’s updated observations regarding the Company from a financial perspective, including an analysis of the trading of the Company’s stock and a preliminary financial analysis of the Company and its businesses. Representatives of Centerview also discussed with the Board an analysis of the potential strategic alternatives available to the Company, including (i) continuing to execute management’s plan without engaging in a transaction, (ii) a sale of the Unified Communications Services segment for cash, (iii) separation of the Unified Communications Services segment from the non-Unified Communications Services segments via a spin-off (including a potential spin-merge transaction with Party C or a “sponsored spin-off,” meaning an investment by a financial sponsor made in connection with a spin-off), (iv) a sale of one or more of the non-Unified Communications Services segments and (v) a sale of the Company. The Board determined to continue with the Process, but to focus for the time being on those parties that had submitted Preliminary Indications of Interest for a Potential Whole-Company Acquisition, which the Board believed were most likely to result in the greatest value for stockholders.

After the January 10, 2017 Board meeting, at the direction of the Board, representatives of Centerview contacted the parties that had submitted Preliminary Indications of Interest regarding a Potential Segment Acquisition (Party A, Party, G, Party J, Party K and Party L) and informed them that, for the time being, the Company was prioritizing parties interested in a Potential Whole-Company Acquisition, but the Company could reengage later with parties that could be efficiently partnered in order to effect a sale of the entire Company.

Also after the Board meeting on January 10, 2017, Mr. Lee Adrean, a member of the Board, contacted Mr. David Mussman, the Company’s Executive Vice President, Secretary and General Counsel, and inquired whether the fact that he serves on the board of two entities that are or were at one time affiliated with Party F could create a potential conflict of interest in light of Party F’s participation in the Process. Mr. Mussman agreed to discuss the matter with Sidley Austin.

On January 12, 2017, Mr. Adrean, Mr. Mussman and Sidley Austin discussed Mr. Adrean’s connections with Party F. On January 15, 2017, Sidley Austin provided its recommendation that, notwithstanding Mr. Adrean having satisfied Sidley Austin that he was in fact independent of Party F, in light of Mr. Adrean’s connections to Party F and to avoid any appearance of a conflict, Mr. Adrean should recuse himself from participation in any Board activities regarding the Process unless and until such time as Party F was no longer participating in the Process.

On January 21, 2017, each of Apollo, Party F (together with Party I) and Party H, being the three parties potentially interested in a Potential Whole-Company Acquisition, were provided access to a virtual data room with additional documents and information regarding the Company and its segments. Also, in January 2017, Company management updated the financial projections to account for projected 2017 foreign exchange rates (as estimated by Company management) and certain other immaterial corrections. In February 2017, the Company made available in the virtual data room these updated financial projections for the years 2017 through 2021. Over the ensuing weeks, Centerview and Company management responded to diligence requests and participated in numerous diligence calls. Additionally, between January 18 and January 30, 2017, Company management held in-person management meetings with each of Apollo, Party F (together with Party I) and Party H.

 

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The Board held a regular meeting on January 26, 2017. At such meeting, Mr. Adrean notified the Board that he would recuse himself from participation in any further Board activities regarding the Process unless and until such time as Party F was no longer participating in the Process. Company management then discussed with the Board possible fee structures for Centerview in connection with any transaction. On January 30, 2017, representatives of Centerview provided the Company with a report describing Centerview’s relationships with certain potential bidders, including AGM, and confirming there was no new information regarding its relationships with the Company and certain large stockholders of the Company.

Following management presentations, (1) representatives of Apollo communicated to Centerview that Apollo was considering both a Potential Whole-Company Acquisition, as well as a Potential Segment Acquisition; (2) representatives of Party H communicated to Centerview that Party H was interested only in a possible acquisition of the non-Unified Communications Services segments, rather than in a Potential Whole-Company Acquisition, as a result of the industry trends, recent operating performance and financial outlook of the Unified Communications Services segment; and (3) Party F remained focused on a Potential Whole-Company Acquisition. The Company’s financial and legal advisors continued to analyze potential transaction structures that could effect a sale of the Company by partnering multiple bidders interested in discrete segments, taking into account the effect of tax and other considerations of such transaction structures.

Given the increased possibility that parties interested in a Potential Segment Acquisition would need to be partnered in order to effect a sale of the entire Company, on or around February 28, 2017, after consulting with the Company, Centerview contacted Party A to ask whether Party A would be interested in bidding for the Safety Services segment and on or around February 28, 2017, Centerview contacted Party L to ask whether Party L would be interested in bidding for the non-Unified Communications Services segments. Because the value indicated in Party K’s Preliminary Indication of Interest was viewed by the Board as insufficient, and a cash sale of the Unified Communications Services segment would incur significant tax leakage, the Company, in consultation with Centerview, determined not to renew contact with Party K at that time. Also, the Company, in consultation with Centerview, determined not to renew contact with Party G or Party J at that time because at that time it did not appear likely that such parties could be efficiently partnered in order to effect a sale of the entire Company. After continued discussions, Party A notified Centerview that it had determined not to participate in the Process. Party L notified Centerview that it did have continued interest in a Potential Segment Acquisition, and would bid for all three of the non-Unified Communications Services segments. Party L was provided access to the virtual data room on March 2, 2017.

On March 3, 2017, Messrs. Barker and Treinen provided to the Board a report via email on the status of the Process, including the status of discussions with Apollo, Party F, Party H, Party A and Party L, and noted that the Company was contemplating asking bidders for second round bids in late March or early April.

On or around March 9, 2017, Party F notified Centerview that it was withdrawing from the Process, primarily as a result of the industry trends, recent operating performance and financial outlook of the Unified Communications Services segment. In light of Party F’s withdrawal from the Process, Mr. Adrean thereafter resumed participation in all Board activities regarding the Process.

On March 16, 2017 members of Company management and Centerview telephonically met with representatives of Party L and their advisors to provide an overview of the Company’s non-Unified Communications Services segments.

On March 17, 2017 members of Company management and Centerview met in person with representatives of Party H and their advisors to provide an additional overview of the Company’s non-Unified Communications Services segments.

The Board held a telephonic meeting on March 24, 2017 with its financial and legal advisors. At the meeting, the Board reviewed with its advisors the current status of the Process. Centerview observed that

 

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representatives of Centerview had been in contact with 55 potential bidders for the Company or one or more of its segments during the Process, 19 of which were strategic parties and 36 of which were financial sponsors. Of the 55 potential bidders, a total of 30 potential bidders executed confidentiality agreements, of which 5 were strategic parties and 25 were financial sponsors. Centerview reported that there were currently three active bidders remaining: Apollo was still interested in a Potential Whole-Company Acquisition, and Party H and Party L were each interested in a Potential Segment Acquisition of all or certain of the non-Unified Communications Services segments. Together with its financial and legal advisors, the Board considered a range of strategic alternatives available to the Company, including a sale of the Company, the sale or separation (including through a spin-off or sponsored spin-off) of one or more of the Company’s segments, or attempting to effect a sale of the Company by partnering multiple bidders interested in discrete segments. The Board discussed the difficulties associated with selling or separating one or more of the Company’s segments, including the effects on the valuation and trading dynamics of the segment(s) left behind. Representatives from Centerview discussed the anticipated timeline for bids for a Potential Whole-Company Acquisition or a Potential Segment Acquisition, the anticipated strategy for assessing the bids once received and the proposed next steps in the Process. The Board reviewed a draft of a letter to be sent to the remaining bidders which described the next steps of the Process. Representatives of Sidley Austin then reviewed with the Board a draft merger agreement for the Potential Whole-Company Acquisition and a draft segment purchase agreement for a Potential Segment Acquisition that were proposed to be delivered to the potential buyers. The Board directed Centerview to provide such letter, draft merger agreement and, if applicable, draft segment purchase agreement to each of Apollo, Party H and Party L. After Centerview and Sidley Austin departed the meeting, Company management reviewed with the Board the proposed fee structure for Centerview in connection with any transaction.

On March 29, 2017, Centerview sent each of Apollo, Party H and Party L a letter requesting a final proposal by April 13, 2017 regarding, in the case of Apollo, a Potential Whole-Company Acquisition and, in the case of each of Party H and Party L, a Potential Whole-Company Acquisition or a Potential Segment Acquisition. Bidders were also asked to provide a mark-up of the draft merger agreement or draft segment purchase agreement, as applicable.

Between April 3 and April 5, 2017, at Apollo’s request, Apollo and its advisors met with members of Company management and Centerview in a series of diligence meetings in Chicago. Party H and Party L continued their due diligence evaluation through access to the virtual data room and submission of questions to Company management. Neither Party H nor Party L requested additional face-to-face meetings with Company management.

On April 13, 2017, Apollo submitted a non-binding bid for a Potential Whole-Company Acquisition for $23.00 per share in cash (with a prohibition on dividends after signing of the merger agreement) (which we refer to as the “ April  13 Apollo Proposal ”), Party H submitted a non-binding bid for a possible acquisition of 100% of the non-Unified Communications Services segments for between $2.4 billion and $2.6 billion in cash (which we refer to as the “ April  13 Party H Proposal ”), and Party L submitted a non-binding bid for a possible acquisition of 100% of the Interactive Services and Safety Services segments and certain assets within the Specialized Agent Services segment for $2.36 billion in cash (which we refer to as the “ April  13 Party L Proposal ,” and together with the April 13 Apollo Proposal and the April 13 Party H Proposal, the “ April  13 Proposals ”). The April 13 Apollo Proposal also included a revised draft of the merger agreement, draft debt commitment letters, a draft equity commitment letter, a draft limited guarantee, a form of voting agreement and a draft exclusivity agreement. The April 13 Apollo Proposal explained that the lower price per share reflected in such proposal compared with the per share price range included in Apollo’s Preliminary Indication of Interest resulted from the key learnings from Apollo’s due diligence, including its concerns regarding recent industry trends, recent operating performance and the financial outlook of the Company, in particular the Unified Communications Services segment. Neither the April 13 Party H Proposal nor the April 13 Party L Proposal included a mark-up of the draft of the segment purchase agreement (but each included general comments on the draft of the segment purchase agreement).

 

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The Board held a telephonic meeting on April 17, 2017 with its financial and legal advisors. At the meeting, the Board reviewed the current status of the Process. Centerview provided to the directors a detailed analysis of the three April 13 Proposals. Centerview also reviewed with the Board its illustrative financial analysis of the Company on a standalone basis assuming that it achieved its projections, as well as the implications to value if the Company fell short or exceeded such projections, and certain structured alternatives to a sale of the entire Company, including (i) potential alternative structures in which one or more parties could partner to acquire all segments of the Company and (ii) the separation of the Unified Communications Services segment from the non-Unified Communications Services segments via a sponsored spin-off. Representatives of Sidley Austin reviewed with the Board the key issues raised by Apollo’s mark-up of the merger agreement and the general comments that had been received from Party H and Party L regarding the draft segment purchase agreement. Representatives of Sidley Austin noted, among other things, that Apollo had requested a period of exclusivity as well as voting agreements from each of THL, Quadrangle and Mr. and Mrs. Gary and Mary West. Sidley Austin also reviewed Apollo’s request for a break-up fee of 4.0% of the equity value of the transaction in the event that the Board accepted a superior proposal and Apollo’s offer for a reverse break-up fee of 4.0% of the equity value of the transaction in the event that it was unable to close due to the failure to obtain financing. The Board considered the key features of each of the proposals and the prospects for the Company on a standalone basis. The Board made a preliminary determination that the proposals for Potential Segment Acquisitions presented by Party H and Party L were less attractive for a number of reasons, including with regard to valuation, after-tax proceeds and timing and certainty of closing when compared to the April 13 Apollo Proposal. In evaluating the Company’s potential standalone value, the Board considered, among other things, the likelihood of the Company achieving its forecasts, the risks to the business and the timeframes needed to realize certain values. The members of the Board determined to proceed with discussions with Apollo and request that Apollo revise its proposal to increase its price and improve other terms, particularly those that related to the likelihood of a transaction being consummated. Mr. Anthony DiNovi, Co-President of THL and a member of the Board, indicated that, at that time and subject to satisfactory resolution of the open issues in a timely manner, THL was willing to sign a voting agreement to support a transaction with Apollo, if the Board ultimately approved the transaction. The Board directed representatives of Centerview and Sidley Austin to prepare a list of key items to be raised with Apollo regarding its proposal. The Board asked to review the list before it was submitted to Apollo. The Board rejected Apollo’s request for exclusivity. Following the meeting, representatives of Centerview and Sidley Austin prepared the list of key items and shared it with the Board prior to its dissemination to Apollo. At the direction of the Board, representatives of Centerview also continued to maintain contact with Party H and Party L, requesting that they consider potential alternative structures, such as a sponsored spin-off, which could be effected without significant tax leakage to the Company.

Later on April 17, 2017, Mr. Michael Huber, President and Managing Principal of Quadrangle and a member of the Board, called Mr. Mussman and indicated that, at that time and subject to satisfactory resolution of the open issues in a timely manner, Quadrangle was also willing to sign a voting agreement to support a transaction with Apollo if the Board ultimately approved the transaction.

On April 18, 2017, representatives of Centerview communicated to Apollo the key items previously discussed with the Board, including the Board’s view that the economic terms as well as terms related to deal certainty must be improved and that the Board had rejected Apollo’s request for exclusivity. Centerview also communicated to Apollo that Mr. and Mrs. West were not officers or directors of West, had not been provided with any non-public information and were not otherwise informed of or involved in the Process. As a result, Centerview noted that the Board did not know at that time whether Mr. and Mrs. West would be willing to support the April 13 Apollo Proposal.

On April 18 and 19, 2017, Sidley Austin and Wachtell, Lipton, Rosen & Katz (which we refer to as “ Wachtell ”), counsel to Apollo, discussed the draft merger agreement and the key features of Apollo’s mark-up, including Apollo’s break-up fee and reverse break-up fee proposals. Sidley Austin proposed a break-up fee of 3.0% of the equity value of the transaction and a reverse break-up fee of 7.0% of the equity value of the transaction. Over the same time period, Sidley Austin also discussed aspects of Apollo’s merger agreement

 

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mark-up and the other transaction documents, in each case related to Apollo’s financing of the merger, with Wachtell and Paul, Weiss, Rifkind, Wharton & Garrison LLP (which we refer to as “ Paul Weiss ”), Apollo’s financing counsel.

On April 19, 2017, Apollo increased the price of its proposal to $23.50 per share in cash, and continued to insist, among other things, that the definitive merger agreement include a prohibition against the payment of any cash dividends and that Apollo receive a voting agreement from each of THL, Quadrangle and Mr. and Mrs. West. Apollo also requested exclusivity as part of its revised proposal. Representatives of Apollo communicated to representatives of Centerview that this represented its best and final offer on price.

The Board held a telephonic meeting on April 20, 2017 with its financial and legal advisors. The Board reviewed the progress of negotiations since the last meeting of the Board on April 17, 2017, including the increase in Apollo’s price from its initial offer of $23.00 to $23.50 per share in cash and the fact that Apollo continued to insist, among other things, that the definitive merger agreement include a prohibition against the payment of any cash dividends. Representatives of Centerview also discussed certain other provisions of the Apollo proposal, including terms of the merger agreement relating to the Company’s employee benefits and severance arrangements. The members of the Board also discussed additional key issues with respect to the Apollo proposal, including provisions affecting the certainty of closing (such as Apollo’s proposed reverse break-up fee and the closing condition that the parties shall have obtained all necessary regulatory approvals), Apollo’s request for a period of exclusivity, and Apollo’s requirement that certain large stockholders, including Mr. and Mrs. West, enter into voting agreements. The Board continued to reject Apollo’s request for exclusivity. The Board, management and representatives of Centerview and Sidley Austin then discussed additional timing considerations and strategic concerns with respect to the Apollo proposal including the voting agreements that Apollo had required be delivered as part of its proposal. The members of the Board then directed representatives from Centerview and Sidley Austin to continue to negotiate with Apollo regarding its proposal.

Between April 20 and 26, 2017, Sidley Austin and Wachtell (and with respect to financing matters, Paul Weiss) continued to negotiate outstanding issues in the draft merger agreement, limited guarantee and equity commitment letter and exchanged drafts of the merger agreement and other transaction documents. Over the same time period, counsel to THL, counsel to Quadrangle, Sidley Austin and Wachtell exchanged drafts of the voting agreement.

On April 25, 2017, Apollo and its advisors met with Company management and representatives of Centerview in Omaha to conduct additional diligence on the Company.

On April 26, 2017, Wachtell communicated to Sidley Austin that Apollo would agree to a reverse break-up fee equal to 6.5% of the equity value of the transaction and a Company break-up fee equal to 3.5% of the equity value of the transaction, provided that each of THL, Quadrangle and Mr. and Mrs. West signed voting agreements.

At an in-person meeting of the Board on April 27, 2017, representatives from Centerview, who participated by phone, presented an update regarding discussions with Apollo that had occurred since the last meeting of the Board on April 20, 2017. Representatives from Centerview informed the members of the Board that Apollo had agreed to the Company’s terms with respect to certain outstanding issues, including agreeing to permit the Company to adopt after signing the merger agreement a retention plan for the benefit of the Company’s employees of up to $3 million, but that other terms remained subject to negotiation. Representatives from Sidley Austin, who also participated by phone, updated the members of the Board with respect to negotiations that had occurred with Wachtell, including preliminary agreement on a 6.5% reverse break-up fee and a 3.5% Company break-up fee, resolution of certain open issues on the draft merger agreement and discussions relating to the obligations of Apollo to secure antitrust approval with respect to the proposed transaction and anticipated timing of telecommunications regulatory review. The Board considered the fact that the 6.5% reverse break-up fee was higher than similar fees in certain recent transactions, including those involving Apollo, and should result in a

 

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higher level of deal certainty. The Board also found the 3.5% break-up fee acceptable under the circumstances, particularly given the publicly announced, lengthy (six months) and broad-based exploration of strategic and financial alternatives. The discussion among the Board, management and representatives of Centerview and Sidley Austin continued regarding other key provisions of the draft merger agreement. Representatives of Centerview informed the Board that they had continued discussions with representatives of each of Party H and Party L with respect to their interest in a transaction with the Company. Party H had confirmed a preliminary interest in a sponsored spin-off transaction involving its investment in the non-Unified Communications Services segments, but that such a transaction would require additional time and due diligence, and would likely involve a valuation significantly below Party H’s prior expression of interest regarding a Potential Segment Acquisition in which Party H proposed to acquire the non-Unified Communications Services segments for cash. Party H also had reiterated that it was not interested in a Potential Whole-Company Acquisition. Party L had confirmed that it was not interested in pursuing either a sponsored spin-off transaction or a Potential Whole-Company Acquisition. The Board concluded that further discussions with Party H and Party L were unlikely to produce a proposal more attractive than the proposed transaction with Apollo. The directors then discussed the value offered by the Apollo proposal compared to the alternative of operating the Company on a standalone basis, including the likelihood of the Company achieving its projections and risks of executing the Company’s existing strategy. The Board directed Centerview and Sidley Austin to continue to negotiate with Apollo. The Board also requested that Mr. Barker contact Mr. and Mrs. West and discuss their willingness to support the Apollo proposal by entering into a voting agreement. After Centerview and Sidley Austin departed the meeting, Company management provided an update to the Board regarding the proposed fee structure for Centerview in connection with any transaction, and the Board approved such proposed fee structure.

After the Board meeting on April 27, 2017, the Company finalized its engagement letter with Centerview with respect to Centerview serving as financial advisor to the Company in connection with the Process.

On April 28, 2017, Mr. Barker met with Mr. West in California to provide Mr. West with an update regarding the Company’s recent operating performance and financial outlook, a presentation on the Process and to convey Apollo’s demand that Mr. and Mrs. West enter into voting agreements as a condition to the transaction. Later that same day, Mr. West spoke with a representative of Centerview regarding the proposed transaction with Apollo. Mr. West indicated that he and Mrs. West would agree to Apollo’s request if Apollo would either increase its price to $24.00 per share or keep its price at $23.50 per share but allow the Company to continue to pay its quarterly dividend. Mr. West also requested indemnification by the Company of Mr. and Mrs. West in the event that they agreed to enter into any voting agreement with Apollo. Representatives of Centerview thereafter relayed Mr. West’s requests to Apollo. Representatives of Apollo informed representatives of Centerview that they would not agree to such terms, stating that, as Apollo had previously communicated, their proposal of a price of $23.50 per share and no dividends was its best and final offer with respect to price.

Between April 28 and May 2, 2017, Sidley Austin and Wachtell (and with respect to financing matters, Paul Weiss) continued to negotiate outstanding issues in the draft merger agreement, limited guarantee and equity commitment letter and exchanged drafts of the merger agreement and other transaction documents. Over the same time period, counsel to THL, counsel to Quadrangle, counsel to Mr. and Mrs. West, Sidley Austin and Wachtell exchanged drafts of the voting agreement.

The Board held a telephonic meeting on May 3, 2017 with its financial and legal advisors. At the meeting, the Board reviewed the discussions with Apollo that had occurred since the last meeting of the Board on April 27, 2017, including an update on Apollo’s remaining diligence and the status of Apollo’s debt financing. The directors reviewed the discussions that had occurred with Mr. West and Apollo’s response to Mr. West’s request. In light of the fact that Apollo’s position was that the Wests’ support of a transaction was required in order for Apollo to move forward, the Board discussed whether there were any proposals that the Company could make that would secure the Wests’ support of a transaction, including whether there were any alternatives that would not change the economics of the transaction for Apollo or that would involve Apollo increasing the

 

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consideration it would pay to public stockholders (including Mr. and Mrs. West, but excluding THL and Quadrangle), if THL and Quadrangle accepted less. Mr. DiNovi and Mr. Huber indicated that THL and Quadrangle would consider such alternatives. Mr. Mussman and representatives of Sidley Austin then provided the Board with an update on the merger agreement and related transaction documents, including the open items.

Between May 3 and May 6, 2017, Sidley Austin and Wachtell (and with respect to financing matters, Paul Weiss) continued to negotiate outstanding issues in the draft merger agreement, limited guarantee and equity commitment letter and exchanged drafts of the merger agreement and other transaction documents. Over the same time period, counsel to THL, counsel to Quadrangle, counsel to Mr. and Mrs. West, Sidley Austin and Wachtell exchanged drafts of the voting agreement.

On May 6, 2017, Mr. West indicated to Mr. Barker that, because there was not a way to increase the consideration payable to all West stockholders, he was willing to accept Apollo’s price of $23.50 per share and no payment of dividends, and that he and Mrs. West would sign voting agreements, provided that he and Mrs. West were indemnified by the Company in the event that they are brought into any stockholder litigation.

The Board held a telephonic meeting on May 7, 2017 with its financial and legal advisors. At the meeting, the Board reviewed the progress of the negotiations with Apollo and the discussions with Mr. and Mrs. West, including their decision to agree to Apollo’s price of $23.50 per share and no payment of dividends. Centerview again noted Apollo’s insistence that this price reflected its best and final proposal. Representatives of Sidley Austin then reviewed with the Board its fiduciary duties under Delaware law in connection with the proposed transaction, the key terms of the draft merger agreement, the key terms of the related transaction documents and the list of remaining open items in the transaction documents. The review by representatives of Sidley Austin included, among other things, (i) a discussion of the key deal protection items in the draft agreements and the ability of the Board to entertain and accept a superior proposal, (ii) a review of the regulatory approvals needed to consummate the merger, including the view of the Company’s regulatory counsel that such approvals were not expected to pose a significant impediment and (iii) the voting agreements required by Apollo, including the fact that Mr. and Mrs. West had requested an indemnification agreement in the event that they were brought into any stockholder litigation. Representatives from Centerview then reviewed with the Board Centerview’s preliminary financial analysis of Apollo’s proposed merger consideration of $23.50 per share. Representatives of Centerview then provided an updated report on its relationships with AGM and confirmed there was no new information regarding its relationships with the Company and certain large stockholders of the Company. Representatives of Centerview informed the Board that Apollo would not be ready to enter into any agreement until the morning of May 9, 2017 at the earliest. In light of the agreement that had been reached with Apollo on price and all other material terms of a potential transaction, the Board determined that management could now discuss with Apollo any plans that Apollo wished to propose for post-closing management compensation and arrangements. The Board agreed to reconvene after the close of trading on May 9, 2017 to potentially approve the transaction. Following that discussion, Mr. DiNovi noted that THL and Quadrangle would be willing to provide between $3 million and $5 million (in the aggregate) of their proceeds from the transaction to fund an additional retention plan for the Company’s senior management, payable at the closing of the transaction. The Board determined to defer discussion of this topic until after the signing of the merger agreement (after which Apollo’s consent to the adoption of such additional retention plan would be required under the merger agreement). Following discussions between the Company and Apollo, such consent was not provided and such additional retention plan was not adopted.

After the Board meeting on May 7, 2017, Sidley Austin provided Wachtell with a revised draft of the merger agreement, limited guarantee, equity commitment letter and other transaction documents. On May 8 and May 9, 2017, Sidley Austin and Wachtell (and with respect to financing matters, Paul Weiss) negotiated the remaining open issues and exchanged drafts of the merger agreement, limited guarantee and equity commitment letter and other transaction documents.

The Board held a telephonic meeting after the close of trading on May 9, 2017 with its financial and legal advisors. At the meeting, representatives from Sidley Austin reviewed with the Board the final changes to the draft merger agreement and the related transaction documents since the prior meeting of the Board.

 

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Representatives from Sidley Austin noted that all open issues that had been previously discussed with the Board had been resolved. Representatives of Centerview reviewed with the Board Centerview’s financial analysis of the merger consideration, and rendered to the Board an oral opinion, which was subsequently confirmed by delivery of a written opinion dated such date, that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing its opinion, the merger consideration to be paid to the holders of West common stock (other than certain shares of West common stock as specified in such opinion) pursuant to the merger agreement was fair, from a financial point of view, to such holders. For a detailed discussion of Centerview’s opinion, please see below under the caption “—Opinion of Centerview Partners LLC,” beginning on page 49. Following discussion, the Board unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement. Mr. Barker advised the Board that, notwithstanding the Board’s authorization of such discussions at the conclusion of its prior meeting, the management team had not had any discussions with Apollo regarding any plans for post-closing management compensation and arrangements.

During the evening of May 9, 2017, concurrently with the delivery by Parent to West of the executed equity commitment letter and the executed debt commitment letter, the parties executed the merger agreement and the limited guarantee. Each of THL, Quadrangle and Mr. and Mrs. West executed voting agreements with Parent, and the Company entered into an indemnification agreement with each of Mr. and Mrs. West. Later that evening, West and Apollo issued a joint press release announcing the execution of the merger agreement.

Recommendation of the Board

At the special meeting of the Board on May 9, 2017, after careful consideration, including detailed discussions with West’s management and its legal and financial advisors, the Board unanimously:

 

    approved the merger agreement and the transactions contemplated thereby, including the merger;

 

    declared that, on the terms and subject to the conditions set forth in the merger agreement, the merger agreement and the consummation by West of the transactions contemplated by the merger agreement, including the merger, are advisable and in the best interests of West and its stockholders;

 

    directed that the adoption of the merger agreement be submitted to a vote at a meeting of West stockholders; and

 

    resolved to recommend that West stockholders vote for adoption of the merger agreement.

Reasons for Recommending the Adoption of the Merger Agreement

In evaluating the merger agreement and the transactions contemplated thereby, the Board consulted with Company management and outside legal counsel and financial advisors and considered and evaluated a variety of factors over the course of 12 meetings of the Board since the Company announced publicly the commencement of a process to explore the Company’s strategic alternatives on November 1, 2016, including:

Challenges the Company Faces as an Independent Company; Strategic Alternatives

The Board considered the possibility of continuing to operate the Company as an independent public company, including the related risks and uncertainties and the prospects for the Company going forward as an independent entity. In doing so, the Board considered the following:

 

    the current and historical financial condition, results of operations and business of the Company, the Company’s financial plan and prospects if it were to remain an independent company, the risks associated with achieving and executing upon the Company’s financial plan, the Company’s historical experience in achieving its projections and the other risks disclosed under “Risk Factors” in the Company’s most recent annual report on Form 10-K;

 

    the risks of remaining an independent public company, including

 

    the challenges resulting from the fact that West’s various segments exhibit differing financial profiles and, as a result, investors may have difficulty giving appropriate value to the Company’s individual segments or to the Company as a whole;

 

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    the Company’s significant level of indebtedness (including the higher level of indebtedness relative to the Company’s peers) which limits the Company’s financial flexibility and its ability to invest in new businesses or return more capital to its stockholders, and the Company’s limited ability to reduce debt either through free cash flow or by raising equity capital due to low trading multiples and resulting dilution; and

 

    the uncertainties associated with pursuing the Company’s strategic business plan in light of the Company’s potential for future growth;

 

    the fact that the long-term trends and current significant market headwinds affecting the Company’s audio conferencing business, namely trends indicating declining minute volumes and compression of pricing that results in a difficult revenue growth profile for the segment, may affect the attractiveness of the Company’s stock and offset positive prospects of the Company’s other segments;

 

    the historic trading ranges of the Company’s common stock and the possible trading ranges of the Company’s common stock in the absence of takeover speculation, which may be significantly below the market price immediately prior to the execution of the merger agreement;

 

    the Board’s concern that without a substantial transaction, the Company common stock would continue to trade at a discount compared to peer companies; and

 

    the strategic review process conducted by the Board with the assistance of Centerview, which included in addition to a possible sale of the Company:

 

    a review of other strategic alternatives, including the possibility of continuing to operate the Company as an independent public company, a sale or divestiture of one or more of the Company’s segments in one or more separate transactions or in connection with the sale of the entire Company, the spin-off of one or more of the Company’s segments and the possibility of acquiring or combining with other companies;

 

    a review of proposals received by the Company to purchase certain of the Company’s segments, the financial and other terms of which the Board concluded were not in the best interests of the Company’s stockholders;

 

    an assessment of the difficulty of carving out for sale or spinning off certain of the Company’s segments from the remainder of the Company’s business, including challenges resulting from the Company’s current high level of debt (and in particular the potential challenges facing the Company’s growth-oriented segments if required to carry a high amount of debt), the significant tax leakage that might result from such divestiture and the potential costs and negative synergies that would result from a divestiture;

 

    a review of the range of possible benefits to the Company’s stockholders of the various strategic alternatives and the timing and the costs, risks and likelihood of accomplishing the goals of any of these alternatives; and

 

    an assessment by the Board that none of the above-described strategic alternatives was reasonably likely to present superior opportunities for the Company, or reasonably likely to create greater value for the Company’s stockholders, than the merger.

Merger Consideration

The Board also considered the following, with respect to the merger consideration:

 

   

the fact that the merger consideration represents a 17.4% premium over the closing price of shares of West common stock on November 1, 2016 (the last trading day prior to the public announcement by the Company of the commencement of a process to explore the Company’s strategic alternatives after market close on November 1, 2016), and in that regard, the Board’s observation that the price of shares

 

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of West common stock would likely have declined after such date in the absence of such announcement (and subsequent media speculation regarding the status of a potential transaction) as a result of:

 

    the Company’s release of its third quarter 2016 financial results on November 1, 2016, along with the Company communicating that it expected the full year 2016 revenue and adjusted earnings per share to be near the bottom of its guidance (which was meaningfully below market consensus estimates at that time); and

 

    the Company’s release of its fourth quarter and full year 2016 financial results on February 1, 2017, along with the Company communicating its guidance for 2017 with respect to adjusted earnings per share (which guidance was meaningfully below the market consensus estimate at that time);

 

    the fact that the merger consideration is a fixed cash amount, providing the Company’s stockholders with certainty of value and liquidity immediately upon the closing, in comparison to the risks and uncertainty that would be inherent in engaging in a transaction in which all or a portion of the consideration is payable in stock;

 

    the fact that the consideration to be paid by Parent was the result of negotiations and a price increase by Parent from its April 13, 2017 offer of $23.00 per share and the Board’s belief that the merger consideration represented the highest consideration to which Parent was willing to agree;

 

    the fact that the Company engaged in a publicly announced, broad and competitive process, in connection with which the Company had contacted, either directly or through the Company’s advisors, a total of 55 financial sponsor and strategic parties since November 1, 2016, and the fact that, after such process, Parent was the only bidder that submitted a definitive bid to acquire the entire Company;

 

    the Board’s belief, based on the process described above, that it was unlikely that any other financial sponsors or strategic buyers would be willing to acquire the Company at a price in excess of $23.50 per share; and

 

    the opinion of Centerview rendered to the Board on May 9, 2017, which was subsequently confirmed by delivery of a written opinion dated such date, that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the merger consideration to be paid to the holders of West common stock (other than certain shares of West common stock as specified in such opinion) pursuant to the merger agreement was fair, from a financial point of view, to such holders, as more fully described below under the caption “—Opinion of Centerview Partners LLC,” beginning on page 49.

Merger Agreement

 

    General Terms . The Board considered the general terms and conditions of the merger agreement, including the parties’ representations, warranties and covenants, the conditions to their respective obligations as well as the likelihood of the consummation of the merger, the proposed transaction structure, the termination provisions of the merger agreement and the Board’s evaluation of the likely time period necessary to close the transactions contemplated by the merger agreement.

 

    Structure; Stockholder Approval. The Board considered that the structure of the transaction as a one-step statutory merger will result in detailed public disclosure and a substantial period of time prior to consummation of the merger during which an unsolicited superior proposal could be brought forth, particularly given the belief of the Board that other potential acquirers of the Company are familiar with the Company. The Board also considered that completion of the merger requires the affirmative vote of the holders of at least a majority of the outstanding shares of West common stock.

 

   

No Financing Condition . The Board considered the absence of a financing condition and the fact that Parent had represented that, assuming that Parent’s financing is funded in accordance with the equity

 

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commitment letter and debt commitment letter, it will have sufficient available funds to fund all of the amounts required to be provided by Parent under the merger agreement for the consummation of the transactions contemplated thereby.

 

    Committed Financing . The fact that Parent has obtained committed debt and equity financing for the transaction, the limited number and nature of the conditions to the debt and equity financing, the reputation of the financing sources (including Apollo’s demonstrated ability to complete large acquisition transactions) and the obligation of Parent to use its reasonable best efforts to obtain the financing.

 

    Ability to Respond to Certain Unsolicited Acquisition Proposals . The Board considered the Company’s ability, under certain circumstances, to furnish information to and conduct negotiations with a third party, if the Board determines in good faith, after consultation with its financial advisors and outside counsel, that the third party has made a takeover proposal that constitutes or could reasonably be expected to lead to a superior proposal.

 

    Ability to Change Recommendation in Certain Circumstances . The Board considered the fact that, in certain circumstances, the Board is permitted to change its recommendation that the Company’s stockholders vote in favor of the merger and terminate the merger agreement, including to enter into an agreement with respect to a superior proposal, subject to the payment to Parent of a termination fee of $72 million in connection with the termination of the merger agreement.

 

    Company Termination Fee . The Board considered the fact that the Board believed that the termination fee of $72 million payable to Parent under the merger agreement in certain situations, or approximately 3.5% of the aggregate equity value of the transaction, is reasonable and not preclusive of other offers from potential acquirers.

 

    Voting Agreements . The Board considered that THL, Quadrangle and Gary and Mary West, who collectively controlled approximately 45% of the aggregate voting power of shares of West common stock as of the date of the merger agreement, supported the transaction, as evidenced by their agreement to execute and deliver the voting agreements to Parent. The Board also considered that the voting agreements will terminate under certain circumstances, including if the Board changes its recommendation or if the Company terminates the merger agreement for any reason, including in connection with a superior proposal, thereby permitting the stockholders who signed such agreements to support the superior proposal. The Board also considered that the voting agreements do not preclude the stockholders signing the voting agreements or any of their affiliates, employees or representatives from exercising their fiduciary duties as directors of the Company.

 

    Specific Performance Right . The Board considered the fact that, under certain circumstances and subject to certain limitations, if Parent fails, or threatens to fail, to satisfy its obligations under the merger agreement, the Company is entitled to specifically enforce the merger agreement, in addition to any other remedies to which the Company may be entitled.

 

    Reverse Termination Fee . The fact that the merger agreement provides that, in the event of a failure of the closing of the merger under certain circumstances, Parent will pay the Company a termination fee of $134 million, or approximately 6.5% of the aggregate equity value of the transaction, the payment of which is guaranteed pursuant to a limited guarantee between the equity sponsors of Parent and the Company (see the section entitled “—Limited Guarantee,” beginning on page 70).

 

    Likelihood of Closing . The Board considered Parent’s obligation under the merger agreement to take all actions necessary or advisable to eliminate each impediment to the completion of the transactions contemplated by the merger agreement and obtain all required governmental approvals. The Board also considered that from time to time the Company or Parent could extend the outside date for completion of the merger from November 9, 2017 to as late as February 7, 2018 (subject to certain additional extensions in connection with the marketing period) if the parties have not obtained the regulatory approvals that are conditions to closing under the merger agreement.

 

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    Availability of Appraisal Rights . The Board considered the availability of appraisal rights under Delaware law to the Company’s Dissenting Stockholders who comply with all of the required procedures under Delaware law, which provides those eligible stockholders with an opportunity to have the Delaware Court of Chancery determine the fair value of their shares of West common stock, which may be more than, less than or the same as the amount such stockholders would have received under the merger agreement.

Negative Factors

The Board also considered certain risks and other potentially negative factors concerning the transactions contemplated by the merger agreement, including:

 

    the fact that the merger consideration represents a discount of 2.5% to the closing price of the shares of West common stock on May 9, 2017 (the last trading day prior to the approval of the merger agreement by the Board) and that the closing price of the shares of West common stock during the period after the announcement by the Company of the commencement of a process to explore the Company’s strategic alternatives after market close on November 1, 2016 was generally higher than the merger consideration (although, as discussed above under “—Merger Consideration,” the Board observed that the price of shares of West common stock would likely have declined after such date in the absence of such announcement (and subsequent media speculation regarding the status of a potential transaction) due to the factors discussed above);

 

    the fact that the merger agreement prohibits the Company from declaring or paying dividends during the pendency of the transactions contemplated by the merger agreement;

 

    the fact that the merger agreement prohibits the Company from affirmatively soliciting alternative proposals;

 

    the possibility that the Company’s obligation to pay Parent a termination fee of $72 million if the merger agreement is terminated under certain circumstances and Parent’s matching rights could discourage other potential acquirers from making an alternative proposal to acquire the Company;

 

    the fact that, following the merger, the Company will no longer exist as an independent public company and the Company’s existing stockholders will not participate in the Company’s or Parent’s future earnings or growth;

 

    the fact that the merger might not be consummated in a timely manner or at all, due to a failure of certain conditions, including the condition requiring the expiration or termination of the waiting period (and any extensions thereof) under the HSR Act, the condition related to antitrust clearance in certain other countries or the condition that approval of the FCC and certain state regulatory agencies has been received;

 

    the risk that the merger will not occur if the financing contemplated by the financing commitments, described under “—Financing of the Merger—Debt Financing,” beginning on page 67, is not obtained, as Parent and Sub do not on their own possess sufficient funds to complete the transaction;

 

    the fact that the Company has incurred and will incur substantial expenses related to the transactions contemplated by the merger agreement, regardless of whether the merger is consummated;

 

    that, under certain circumstances, the Company’s damages remedy in the event of a failure by Parent or Sub to consummate the merger when required is limited to the receipt of the $134 million termination fee;

 

    the restrictions on the conduct of the Company’s business prior to the consummation of the merger, which may delay or prevent the Company from undertaking business opportunities that may arise or any other action that it might otherwise take with respect to the operations of the Company;

 

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    the fact that, for U.S. federal income tax purposes, the receipt of the merger consideration will generally be taxable to the Company’s stockholders that are U.S. holders;

 

    the significant costs involved in connection with entering into and completing the merger and the substantial time and effort of management required to complete the transactions contemplated by the merger agreement, which may disrupt the Company’s business operations; and

 

    the risks and contingencies related to the announcement and pendency of the transactions contemplated by the merger agreement, including the impact on the Company’s employees and its relationships with existing and prospective customers and suppliers and other third parties and the possibility of a suit, action or proceeding in respect of the merger agreement or the transactions contemplated by the merger agreement.

Other

The Board also considered the following other factors:

 

    the fact that affiliates of THL and Quadrangle are party to stockholder and registration rights agreements with the Company and, if the Company did not enter into the merger agreement, could elect to distribute their shares of West common stock to their limited partners, which could have a negative impact on the Company’s stock price;

 

    the fact that the Company’s directors and executive officers may receive certain benefits that are different from, and in addition to, those of the Company’s stockholders (see the section entitled “—Interests of Directors and Executive Officers in the Merger,” beginning on page 56); and

 

    the fact that, as of the execution of the merger agreement, members of senior management had not had any discussions with Parent regarding their post-closing employment with, compensation from or equity participation in the surviving corporation or its affiliates.

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. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Board did not undertake to make any specific determination as to whether, or to what extent, 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 presented, including the factors described above.

The Board unanimously recommends a vote “FOR” the proposal to adopt the merger agreement.

Forward-Looking Financial Information

Due to the unpredictability of the underlying assumptions and estimates inherent in preparing financial projections, West does not as a matter of general practice publicly disclose detailed projections as to the Company’s anticipated financial position or results of operations, other than providing, from time to time, estimated ranges for the then-current fiscal year of certain expected financial results and operational metrics in our regular earnings press releases. In connection with the Board’s detailed evaluation of the Company’s performance, opportunities and challenges and its subsequent analysis of potential strategic alternatives to maximize shareholder value, as discussed above under “Background of the Merger,” at the request of the Board in January 2016, Company management began preparing forward-looking financial information for the years 2017 through 2021 based upon projections developed by Company management. Preliminary financial projections were reviewed by Company management with the Board in July 2016. Updated financial projections

 

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were reviewed by Company management with the Board in November 2016, and such financial projections for the years 2017 through 2019 were included in the CIM provided to bidders, including Apollo, who entered into confidentiality and standstill agreements with the Company. After updating the financial projections in January 2017 to account for projected 2017 foreign exchange rates (as estimated by Company management) and other immaterial corrections, these updated financial projections (which we refer to as the “ financial projections ”) were provided to Centerview (with respect to the financial projections related to the Company as a whole, for use in connection with its financial analysis and its opinion). The financial projections (for the avoidance of doubt, not including Unlevered Free Cash Flow (as defined below)) were also made available in the virtual data room to Apollo, Party F, Party H and Party L. The financial projections are summarized below.

None of the financial projections nor Unlevered Free Cash Flow were intended for public disclosure. Nonetheless, a summary of the financial projections and Unlevered Free Cash Flow is included in this proxy statement only because certain of the financial projections and Unlevered Free Cash Flow were made available to the Board, Centerview and/or Apollo. The inclusion of the financial projections and Unlevered Free Cash Flow in this proxy statement does not constitute an admission or representation by West, Apollo, Parent, Sub, Centerview or any other recipient of this information that the information is material.

The financial projections are unaudited and were not prepared with a view toward public disclosure or compliance with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information or United States generally accepted accounting principles (which we refer to as “ GAAP ”) or the published guidelines of the SEC regarding projections and the use of non-GAAP financial measures. Neither our independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the financial projections, nor have they expressed any opinion or any other form of assurance on the financial projections or their achievability, and they assume no responsibility for, and disclaim any association with, the financial projections.

In the view of Company management, the financial projections for the Company as a whole and for each of the segments included in the financial projections were prepared on a reasonable basis reflecting management’s best available estimates and judgments regarding our future financial performance. The financial projections provided below have not been updated since the time of their preparation, are not facts and should not be relied upon as necessarily indicative of actual future results, and you are cautioned not to rely on the financial projections. Some or all of the assumptions that have been made in connection with the preparation of the financial projections may have changed since the date the financial projections were prepared. None of West, Parent or any of their respective affiliates, advisors or other representatives assumes any responsibility for the validity, reasonableness, accuracy or completeness of the financial projections. Neither West nor any of its affiliates intends to, and each of them disclaims any obligation to, update, revise or correct the financial projections if any or all of them have become, are or become inaccurate (even in the short term) since the time of their preparation. These considerations should be taken into account in reviewing the financial projections, which were prepared as of an earlier date.

The financial projections reflect various estimates, assumptions and methodologies of West, all of which are difficult to predict and many of which are beyond our control, including, among others, assumptions with respect to industry performance, general business, economic, regulatory, litigation, market and financial conditions, foreign currency rates, interest on investments and matters specific to our business, including, without limitation, assumptions that currency exchange rates remain constant based on projected 2017 foreign exchange rates (as estimated by Company management) and general cost inflation is between 2-3%.

The financial projections do not necessarily reflect revised prospects for our businesses, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the financial projections were prepared, and the financial projections are not necessarily indicative of current values or future performance, which may be significantly more favorable or less favorable than as set forth below and should not be regarded as a representation that the financial forecasts will be achieved.

 

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Because the financial projections reflect subjective judgment in many respects, they are susceptible to multiple interpretations and frequent revisions based on actual experience and business developments. The financial projections also cover multiple years, and such information by its nature becomes less predictive with each succeeding year. The financial projections constitute forward-looking information and are subject to a wide variety of significant risks and uncertainties that could cause the actual results to differ materially from the projected results, including, without limitation, the factors described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 and in our other filings with the SEC. For additional information on factors that may cause our future financial results to materially vary from the projected results summarized below, see the section entitled “Cautionary Statement Regarding Forward-Looking Statements,” beginning on page 18. Accordingly, there can be no assurance that the projected results summarized below will be realized or that actual results will not differ materially from the projected results summarized below, and the financial projections cannot be considered a guarantee of future operating results and should not be relied upon as such.

The financial projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding West contained in our public filings with the SEC. The financial projections do not take into account any circumstances or events occurring after the date they were prepared, including the merger. Further, the financial projections do not take into account the effect of any failure of the merger to be consummated and should not be viewed as accurate or continuing in that context.

Financial Projections

The following tables summarize the financial projections and Unlevered Free Cash Flow:

Revenue and Adjusted EBITDA

 

West Corporation
($ in millions)

   2017E      2018E      2019E      2020E      2021E  

Revenue

     2,362        2,469        2,592        2,732        2,892  

Adjusted EBITDA

     672        694        722        757        798  

Revenue by Segment (1)

 

Segment
($ in millions)

   2017E      2018E      2019E      2020E      2021E  

Unified Communications Services

     1,420        1,444        1,471        1,503        1,545  

Interactive Services

     326        352        381        411        445  

Safety Services

     324        349        377        409        443  

Specialized Agent Services

     303        335        375        420        470  

 

(1) The segment-level financial projections for revenue do not reflect inter-segment eliminations.

Adjusted EBITDA by Segment (1)

 

Segment
($ in millions)

   2017E      2018E      2019E      2020E      2021E  

Unified Communications Services

     406        395        391        393        396  

Interactive Services

     91        103        114        125        138  

Safety Services

     114        124        133        142        153  

Specialized Agent Services

     58        68        80        93        107  

 

(1) The segment-level financial projections for Adjusted EBITDA (as defined below) do not include unallocated corporate Adjusted EBITDA.

 

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Unlevered Free Cash Flow

In addition, at the direction of Company management, Centerview calculated, utilizing the financial projections and reflecting certain adjustments based on the assumptions provided by Company management, Unlevered Free Cash Flow (as defined below), which calculation was provided to the Board, but was not made available to Apollo or any other bidder, and is summarized in the following table:

 

West Corporation
($ in millions)

   2017E      2018E      2019E      2020E      2021E  

Unlevered Free Cash Flow

     348        354        359        374        394  

Non-GAAP Financial Measures

Adjusted EBITDA and Unlevered Free Cash Flow are non-GAAP financial measures. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

For purposes of this section entitled “Forward-Looking Financial Information,” we define “ Adjusted EBITDA ” to mean earnings before interest expense, stock-based compensation, income taxes, depreciation and amortization and non-recurring items (gain on sale of buildings, significant restructuring costs and transaction costs).

For purposes of this section entitled “Forward-Looking Financial Information,” we define “ Unlevered Free Cash Flow ” to mean unlevered net operating profit after tax, adjusted for depreciation and amortization, capital expenditures and changes in net working capital. Unlevered Free Cash Flow was calculated after deducting estimated stock-based compensation expense.

West uses Adjusted EBITDA for financial and operational decision making and as a means to evaluate period-to-period comparisons. West believes that Adjusted EBITDA, among other things, (1) provides useful information about operating results; (2) enhances the overall understanding of past financial performance and future prospects; (3) allows for greater transparency with respect to key metrics used by West management in its financial and operational decision making; and (4) is used by investors as a measure of West’s historical ability to service debt and compliance with covenants in West’s senior credit facilities.

West included Adjusted EBITDA in the financial projections because it is a key measure used by West management and the Board to, among other things, (1) understand and evaluate West’s core operating performance and trends; (2) prepare and approve West’s annual budget; and (3) develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of West’s core business. Accordingly, West believes that Adjusted EBITDA provides useful information in understanding and evaluating West’s projections in the same manner as West management and the Board.

Unlevered Free Cash Flow provides another measure by which to evaluate West’s core operating performance and trends, but is not used by West for financial and operational decision making or as a means to evaluate period-to-period comparisons. Unlevered Free Cash Flow was calculated by Centerview at the direction of Company management solely for purposes of the discounted cash flow analysis in connection with Centerview’s opinion, and none of West, Parent or Centerview assumes any responsibility for any use of such estimates, or reliance on such estimates, for any other purpose.

Non-GAAP financial measures, including Adjusted EBITDA and Unlevered Free Cash Flow, have limitations as analytical tools, and you should not consider any non-GAAP financial measure in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include the omission of certain material costs, such as depreciation, amortization and interest, necessary to operate our business. Other companies, including companies in West’s industry, may calculate similarly titled non-GAAP financial measures differently, which reduces their usefulness as a comparative measure.

 

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Because of these limitations, our non-GAAP financial measures should not be considered in isolated form or as substitutes for financial information presented in compliance with GAAP and you should consider our non-GAAP financial measures alongside other financial performance measures, including various cash flow metrics, net income and our other GAAP results.

Opinion of Centerview Partners LLC

On May 9, 2017, Centerview rendered to the Board its oral opinion, subsequently confirmed in a written opinion dated such date that, as of such date and based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the merger consideration to be paid to the holders of Shares (other than Excluded Shares) pursuant to the merger agreement was fair, from a financial point of view, to such holders.

The full text of Centerview’s written opinion, dated May 9, 2017, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Annex B and is incorporated herein by reference. The summary of the written opinion of Centerview set forth below is qualified in its entirety by reference to the full text of Centerview’s written opinion attached as Annex B . Centerview’s financial advisory services and opinion were provided for the information and assistance of the Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction and Centerview’s opinion only addressed the fairness, from a financial point of view, as of the date thereof, to the holders of Shares (other than Excluded Shares) of the merger consideration to be paid to such holders pursuant to the merger agreement. Centerview’s opinion did not address any other term or aspect of the merger agreement or the Transaction and does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the merger or otherwise act with respect to the Transaction or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

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

 

    a draft of the merger agreement dated May 9, 2017 (which we refer to in this summary of Centerview’s opinion as the “ Draft Merger Agreement ”);

 

    Annual Reports on Form 10-K of the Company for the years ended December 31, 2016, 2015 and 2014;

 

    certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company;

 

    certain publicly available research analyst reports for the Company;

 

    certain other communications from the Company to its stockholders; and

 

    certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of the Company, including certain financial forecasts, analyses and projections relating to the Company prepared by management of the Company and furnished to Centerview by the Company for purposes of Centerview’s analysis (which we refer to in this summary of Centerview’s opinion as the “ Forecasts ,” and which we collectively refer to in this summary of Centerview’s opinion as the “ internal data ”).

Centerview also participated in discussions with members of the senior management and representatives of the Company regarding their assessment of the internal data. In addition, Centerview reviewed publicly available

 

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financial and stock market data, including valuation multiples, for the Company and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant. Centerview also compared certain of the proposed financial terms of the Transaction with the financial terms, to the extent publicly available, of certain other transactions that Centerview deemed relevant and conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.

Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with the Company’s consent, Centerview relied upon such information as being complete and accurate. In that regard, Centerview assumed, at the Company’s direction, that the internal data (including, without limitation, the Forecasts) were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby and Centerview relied, at the Company’s direction, on the internal data for purposes of Centerview’s analysis and opinion. Centerview expressed no view or opinion as to the internal data or the assumptions on which it was based. In addition, at the Company’s direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company, nor was Centerview furnished with any such evaluation or appraisal, and was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company. Centerview assumed, at the Company’s direction, that the final executed merger agreement would not differ in any respect material to Centerview’s analysis or opinion from the Draft Merger Agreement reviewed by Centerview. Centerview also assumed, at the Company’s direction, that the Transaction will be consummated on the terms set forth in the merger agreement and in accordance with all applicable laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview’s analysis or Centerview’s opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change will be imposed, the effect of which would be material to Centerview’s analysis or Centerview’s opinion. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of the Company, or the ability of the Company to pay its obligations when they come due, or as to the impact of the Transaction on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.

Centerview’s opinion expressed no view as to, and did not address, the Company’s underlying business decision to proceed with or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. Centerview’s opinion was limited to and addressed only the fairness, from a financial point of view, as of the date of Centerview’s written opinion, to the holders of Shares (other than Excluded Shares) of the merger consideration to be paid to such holders pursuant to the merger agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the merger agreement or the Transaction, including, without limitation, the structure or form of the Transaction, or any other agreements or arrangements contemplated by the merger agreement or entered into in connection with or otherwise contemplated by the Transaction, including, without limitation, the fairness of the Transaction or any other term or aspect of the Transaction to, or any consideration to be received in connection therewith by, or the impact of the Transaction on, the holders of any other class of securities, creditors or other constituencies of the Company or any other party. In addition, Centerview expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company or any party, or class of such persons in connection with the Transaction, whether relative to the merger consideration to be paid to the holders of Shares (other than Excluded Shares) pursuant to the merger agreement or otherwise. Centerview’s opinion was necessarily based on financial, economic, monetary, currency, market and other

 

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conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview’s written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview’s written opinion. Centerview’s opinion does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the merger or otherwise act with respect to the Transaction or any other matter. Centerview’s financial advisory services and its written opinion were provided for the information and assistance of the Board (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction. The issuance of Centerview’s opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

Summary of Centerview Financial Analysis

The following is a summary of the material financial analyses prepared and reviewed with the Board in connection with Centerview’s opinion, dated May 9, 2017. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be Centerview’s view of the actual value of the Company. Some of the summaries of the financial analyses set forth below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses performed by Centerview. Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying Centerview’s financial analyses and its opinion. In performing its analyses, Centerview made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company or any other parties to the Transaction. None of the Company, Parent, Sub or Centerview or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of the Company do not purport to be appraisals or reflect the prices at which shares of West common stock may actually be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. 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 May 9, 2017 (the last trading day prior to the public announcement of the Transaction) and is not necessarily indicative of current market conditions.

 

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Selected Public Company Analysis

Centerview reviewed certain financial information of the Company and compared it to corresponding financial information of certain publicly traded companies that Centerview selected based on its experience and professional judgment (which we refer to as the “ selected companies ” in this summary of Centerview’s opinion). Although none of the selected companies is directly comparable to the Company, the companies listed below were chosen by Centerview, among other reasons, because they are publicly traded technology-enabled communication and business services companies with certain operational, business and/or financial characteristics that, for purposes of Centerview’s analysis, may be considered similar to those of the Company. However, because none of the selected companies is exactly the same as the Company, Centerview believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected public company analysis. Accordingly, Centerview also made qualitative judgments, based on its experience and professional judgment, concerning differences between the business, financial and operating characteristics and prospects of the Company and the selected companies that could affect the public trading values of each in order to provide a context in which to consider the results of the quantitative analysis.

 

Selected Companies

   EV / 2017E Adj.
EBITDA
 

Citrix Systems, Inc. (1)

     11.0x  

j2 Global, Inc.

     10.8x  

Mitel Networks Corporation

     7.1x  

Motorola Solutions, Inc.

     10.1x  

Nuance Communications, Inc.

     10.7x  

Verint Systems Inc.

     12.2x  

 

(1) Citrix Systems, Inc. data as of March 10, 2017, one day prior to reports that Citrix was exploring a sale.

Using publicly available information obtained from SEC filings and other data sources as of May 9, 2017, Centerview calculated, among other things, for each selected company, the implied enterprise value (calculated, to the extent publicly available, as the market value of common equity (determined using the treasury stock method and taking into account outstanding in the money options, other equity awards and other convertible securities, as applicable) plus the face value of debt, preferred stock and noncontrolling interests less cash and cash equivalents (excluding cash held on trust and restricted cash), as applicable) as a multiple of Wall Street research analyst consensus estimated earnings before interest expense, stock-based compensation, income taxes, depreciation and amortization and non-recurring items (which we refer to in this summary of Centerview’s opinion as “ Adjusted EBITDA ”) for calendar year 2017. The results of this analysis are summarized as follows:

 

     EV / 2017E Adj. EBITDA  
     Low      Median      High  

Selected Companies

     7.1x        10.8x        12.2x  

Based on the foregoing analysis and other considerations that Centerview deemed relevant in its professional judgment and experience, Centerview applied a range of 7.0x to 8.5x to the Company’s estimated 2017 calendar year Adjusted EBITDA of approximately $672 million based on the Forecasts, which resulted in a range of implied values per Share of approximately $19.25 to $30.75, rounded to the nearest $0.25. In selecting this range of multiples, Centerview made qualitative judgments based on its experience and professional judgment concerning differences between the business, financial and operating characteristics and prospects of the Company and the selected companies that could affect the public trading values in order to provide a context in which to consider the results of the quantitative analysis. Centerview also observed that the Company consistently traded at a significant discount to the median of the enterprise value / estimated next twelve months Adjusted EBITDA multiple for the selected companies over the prior three years. Centerview compared this range to the merger consideration of $23.50 per Share to be paid to the holders of Shares (other than Excluded Shares) pursuant to the merger agreement.

 

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Selected Transactions Analysis

Centerview reviewed and compared certain information relating to the following selected transactions involving technology-enabled communication and business services companies announced since January 1, 2010 that Centerview, based on its experience and professional judgment, deemed relevant to consider in relation to the Company and the Transaction. These transactions were selected, among other reasons, because their participants, size or other factors, for purposes of Centerview’s analysis, may be considered similar to the Transaction. Centerview used its experience, expertise and knowledge of these industries to select transactions that involved companies with certain operations, results, business mix or product profiles that, for purposes of this analysis, may be considered similar to certain operations, results, business mix or product profiles of the Company.

 

Announcement Date

 

Acquirer

 

Target

   EV / LTM
Adj.
EBITDA (1)
 

December 2016

  Investment Group led by Golden Gate Private Equity, Inc.   NeuStar, Inc.     
11.0x
(2) 
 

May 2016 (3)

  Siris Capital Group, LLC   Polycom, Inc.      7.0x  

November 2015

  Comtech Telecommunications Corp.   TeleCommunications Systems, Inc.      10.7x  

September 2015

  Siris Capital Group, LLC   Premiere Global Services, Inc.     
9.5x
(4) 
 

September 2015

  Interoute Communications Limited   Easynet Limited      10.7x  

June 2015

  Comverse, Inc.   Acision Limited      6.0x  

June 2014

  Consolidated Communications Holdings, Inc.   Enventis Corporation      7.1x  

November 2013

  Mitel Networks Corporation   Aastra Technologies Limited      6.0x  

 

(1) Represents LTM Adjusted EBITDA when sufficient information was disclosed to determine Adjusted EBITDA; otherwise represents EBITDA figure disclosed publicly.
(2) Excludes from implied enterprise value the value of the Number Portability Administration Center (which we refer to as “ NPAC ”) business, for which NeuStar, Inc.’s contract had not been renewed and which was expected to roll off in 2018. Assumes annual NPAC revenue of $500 million and EBITDA margin of approximately 65%, based on Wall Street research. Assumes estimated residual value of NPAC business to NeuStar, Inc. of $500 million (annual free-cash flow generation of $250 to $300 million), based on Wall Street research.
(3) Represents date when reports surfaced that Siris Capital Group, LLC was said to be bidding for Polycom, Inc. Final terms of the transaction were not officially publicly announced until July 2016.
(4) Pro forma for $60 million in anticipated cost savings expected to be realized by year-end 2017, the multiple would be 6.0x.

No company or transaction used in this analysis is identical or directly comparable to the Company or the Transaction. The companies included in the selected transactions listed above were selected, among other reasons, because they have certain characteristics that, for the purposes of this analysis, may be considered similar to certain characteristics of the Company. The reasons for and the circumstances surrounding each of the selected transactions analyzed were diverse and there are inherent differences in the business, operations, financial conditions and prospects of the Company and the companies included in the selected transactions

 

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analysis. Accordingly, Centerview believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected transactions analysis. This analysis involves complex considerations and qualitative judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the selected target companies and the Company.

Financial data for the selected transactions were based solely on publicly available information at the time of the announcement of the relevant transactions that Centerview obtained from SEC filings and other data sources.

Centerview calculated, for each selected transaction set forth above, among other things, the implied enterprise value (calculated, to the extent publicly available, as the market value of common equity (determined using the treasury stock method and taking into account outstanding in the money options, other equity awards and other convertible securities, as applicable) plus the face value of debt, preferred stock and noncontrolling interests less cash and cash equivalents (excluding cash held on trust and restricted cash), as applicable) implied for the applicable target company based on the consideration payable in the applicable selected transaction as a multiple of the target company’s Adjusted EBITDA (or in cases where not determinable, the target company’s EBITDA figure disclosed publicly), for the latest twelve-month period for which financial information had been made public (which we refer to as “ LTM ”) at the time of the transaction announcement. The results of this analysis are summarized as follows:

 

     EV / LTM
Adj.
EBITDA
     Low    High

Selected Transactions

   6.0x    11.0x

Based on its analysis and other considerations that Centerview deemed relevant in its professional judgment and experience, Centerview applied a range of multiples of 6.5x to 8.5x to the Company’s LTM Adjusted EBITDA of $663 million for the period ended March 31, 2017, which resulted in a range of implied values per Share of approximately $14.75 to $29.75, rounded to the nearest $0.25. In selecting this range of multiples, Centerview made qualitative judgments based on its experience and professional judgment concerning differences between the business, financial and operating characteristics and prospects of the Company and the companies included in the selected transactions and other factors that could affect the public trading, acquisition or other values of such companies or the Company. Centerview compared this range to the merger consideration of $23.50 per Share to be paid to the holders of Shares (other than Excluded Shares) pursuant to the merger agreement.

Discounted Cash Flow Analysis

Centerview performed a discounted cash flow analysis of the Company based on the Forecasts. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset by calculating the “present value” of estimated future cash flows of the asset. “Present value” refers to the current value of future cash flows and is obtained by discounting those future cash flows by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

In performing this analysis, Centerview calculated a range of illustrative equity values for the Company by (a) discounting to present value as of May 9, 2017, using discount rates ranging from 8.5% to 9.5% (reflecting Centerview’s analysis of the Company’s weighted average cost of capital) and the mid-year convention: (i) the forecasted fully taxed unlevered free cash flows of the Company (more information regarding West forward-looking financial information can be found in the section entitled “—Forward-Looking Financial Information,” beginning on page 45) over the period beginning January 1, 2017 and ending on December 31, 2021, utilizing the Forecasts and the assumptions provided by Company management, and (ii) a range of illustrative terminal values

 

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of the Company, calculated by Centerview applying perpetuity growth rates ranging from 1.0% to 2.0% to the Company’s fully taxed unlevered free cash flows for the terminal year and (b) subtracting from the foregoing results the face value of the Company’s net debt as of March 31, 2017. Centerview divided the result of the foregoing calculations by the number of fully-diluted outstanding shares of West common stock as of May 8, 2017 based on the internal data to derive a range of implied values per Share of approximately $18.50 to $32.50 per Share, rounded to the nearest $0.25. Centerview compared this range to the merger consideration of $23.50 per Share to be paid to the holders of Shares (other than Excluded Shares) pursuant to the merger agreement.

Certain Additional Information

Centerview observed certain additional information that was not considered part of its financial analyses for its opinion but was noted for informational purposes, including, among other things, the following:

 

    Historical Stock Price Trading Analysis . Centerview reviewed historical trading prices for shares of West common stock for the 52-week period ended May 9, 2017, (which 52-week period included the period following the Announcement), which reflected low and high closing prices for shares of West common stock during this 52-week period of $18.89 and $26.91.

 

    Analyst Price Target Analysis . Centerview reviewed stock price targets for shares of West common stock in Wall Street research analyst reports publicly available as of May 9, 2017, which indicated the latest available low and high stock price targets for shares of West common stock ranging from $20.00 to $30.00 per Share.

General

The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. In arriving at its opinion, Centerview did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of the analyses.

Centerview’s financial analyses and opinion were only one of many factors taken into consideration by the Board in its evaluation of the Transaction. Consequently, the analyses described above should not be viewed as determinative of the views of the Board or management of the Company with respect to the merger consideration or as to whether the Board would have been willing to determine that a different consideration was fair. The consideration for the Transaction was determined through arm’s-length negotiations between the Company and Parent and was approved by the Board. Centerview provided advice to the Company during these negotiations. Centerview 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 Transaction.

Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the two years prior to delivery of its opinion, Centerview was engaged to provide financial advisory services with respect to potential strategic and financial alternatives that may be available to the Company, including the Transaction, but, except for fees payable in connection with the Transaction as described below, did not receive any compensation for such services that were provided. In the two years prior to the delivery of its opinion, Centerview was engaged to provide financial advisory services unrelated to the Company or the Transaction to the Board of Directors of Clear Channel Outdoor Holdings, Inc. (“ Clear Channel Outdoor ”). During such period, Centerview received between $2.5 million and $5 million in aggregate fees for the foregoing services. Clear Channel Outdoor is a publicly traded company that is controlled by iHeartMedia, Inc., another publicly traded company in which affiliates of THL (which owns approximately 21% of the Company’s outstanding common stock), together with affiliates of Bain Capital Private Equity, L.P., collectively hold a majority ownership interest. In the two years

 

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prior to the delivery of its opinion, Centerview has not been engaged to provide financial advisory or other services to Parent or Sub and Centerview has not received compensation from Parent or Sub. In the two years prior to the delivery of its opinion, Centerview has been engaged to provide, and is currently providing, (i) financial advisory services unrelated to the Company or the Transaction to a portfolio company of AGM, an affiliate of Parent, and (ii) financial advisory services to AGM and/or its affiliates, as lenders under a debtor-in-possession facility entered into in connection with a bankruptcy proceeding unrelated to the Company or the Transaction. Centerview received between $2.5 million and $5 million in aggregate fees during such period, and may in the future receive additional compensation, for the foregoing services. In addition, in the two years prior to the delivery of its opinion, Centerview has been engaged to provide, and in certain cases is currently providing, financial advisory services unrelated to the Company or the Transaction to financial creditor groups or ad hoc creditor committees (of which one or more affiliates of AGM is or may have been at some point during Centerview’s engagement a member and held less than a majority of the aggregate face value of the relevant notes held by the members of each group) in connection with restructurings or potential restructurings involving the relevant issuer, and Centerview has received, and may in the future receive, compensation for such services. Centerview also noted that in the two years prior to the delivery of its opinion, Centerview has been engaged to provide, and is currently providing, financial advisory services to a committee of independent members of the Board of Directors of Caesars Entertainment Corporation, a publicly traded portfolio company of AGM and TPG Capital, LP, in connection with a merger transaction with Caesars Acquisition Corporation, another publicly traded portfolio company of AGM and TPG Global, LLC, and other matters, and Centerview has received, and may in the future receive, compensation for such services. Centerview may provide financial advisory and other services to or with respect to the Company, THL, Parent or AGM or their respective affiliates, including portfolio companies of THL and AGM, in the future, for which Centerview may receive compensation. Certain (i) of Centerview and Centerview’s affiliates’ directors, officers, members and employees, or family members of such persons, (ii) of Centerview’s affiliates or related investment funds and (iii) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade in debt, equity and other securities or financial instruments (including derivatives, bank loans or other obligations) of, or investments in, the Company, THL, Parent, AGM or any of their respective affiliates, including portfolio companies of THL and AGM, or any other party that may be involved in the Transaction.

The Board selected Centerview as its financial advisor in connection with the Transaction based on Centerview’s qualifications, expertise and reputation. Centerview is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Transaction.

In connection with Centerview’s services as the financial advisor to the Board, the Company has agreed to pay Centerview an estimated aggregate fee of $28 million, $2 million of which was payable upon the rendering of Centerview’s opinion and the remainder of which is payable contingent upon consummation of the Transaction. In addition, the Company has agreed to reimburse certain of Centerview’s expenses arising, and to indemnify Centerview against certain liabilities that may arise, out of Centerview’s engagement.

Interests of Directors and Executive Officers in the Merger

Members of the Board and our executive officers have various interests in the merger described in this section that may be in addition to, or different from, the interests of West’s stockholders generally. You should keep this in mind when considering the recommendation of the Board to vote “FOR ” the adoption of the merger agreement. The members of the Board were aware of these interests and considered them at the time they approved the merger agreement and in making their recommendation that West stockholders adopt the merger agreement. These interests are described below.

 

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Certain Assumptions

Except as otherwise specifically noted, for purposes of quantifying the potential payments and benefits described in this section, the following assumptions, as well as those described in the footnotes to the table in the section entitled “—Golden Parachute Compensation” below were used:

 

    the relevant price per share of West common stock is $23.50 per share, which is the fixed price per share to be received by our stockholders in respect of their shares of West common stock in connection with the merger;

 

    for any stock unit awards subject to performance-based vesting conditions, the performance goals are deemed to be achieved at 100% of the target level;

 

    for the restricted stock award subject to performance-based vesting conditions that was previously granted to West’s Chief Executive Officer, the performance goals are deemed to be achieved at the maximum level in accordance with the terms of the applicable award agreement;

 

    the effective time is June 2, 2017, which is the assumed date of the effective time solely for purposes of the disclosure in this section and the section entitled “—Golden Parachute Compensation” below (which we refer to as the “ assumed effective time ”);

 

    the employment of each executive officer of West is terminated without “cause” or due to the executive officer’s resignation for “good reason” (as each such term is defined in the relevant plan(s) and/or agreement(s)), in each case, immediately following the assumed effective time; and

 

    the service of each non-employee director of West is terminated immediately following the assumed effective time.

Treatment of Outstanding Equity Awards

The merger agreement provides that, with respect to all outstanding options, stock unit awards and restricted stock awards under West’s equity plans, as a result of the merger:

 

    immediately prior to the effective time, each option will be fully vested and cancelled, and each holder of a cancelled Company option will receive a payment in cash equal to the product of (i) the total number of shares subject to the cancelled Company option and (ii) the excess, if any, of (A) the merger consideration over (B) the exercise price per share subject to the cancelled Company option, without interest, less any required tax withholding (provided, however, that any Company option with respect to which the exercise price per share is equal to or greater than the merger consideration will be cancelled in exchange for no consideration);

 

    immediately prior to the effective time, each stock unit and restricted stock award (other than notional shares credited under the Company’s deferred compensation plan) will be converted into the right to receive a payment in cash equal to the sum of (i) the merger consideration multiplied by the number of shares subject to each such award and (ii) the dividend equivalents accrued on such award prior to the closing date, and to the extent required by an existing award agreement such cash amount will be held in escrow and become vested and payable in accordance with the terms of the awards on the vesting schedule set forth in the awards, less any required tax withholding.

For any stock unit awards that are subject to performance-based vesting conditions, the merger agreement provides that the number of shares subject to such awards that are earned based on performance will be determined as of the closing date in accordance with the terms of the applicable award agreements, which award agreements West may amend between signing and closing to provide that, for all relevant periods, the performance goals will be deemed to have been satisfied at 100% of the target level. For the restricted stock award that is subject to performance-based vesting conditions that was previously granted to West’s Chief Executive Officer, the award agreement provides that performance will be deemed achieved at the maximum level set forth in the award agreement. In addition, any notional shares accrued under West’s deferred

 

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compensation plan will be valued based on the merger consideration of $23.50 per share and will be notionally reinvested in one or more other “measurement funds” (as defined under the deferred compensation plan), as determined by the Company prior to the effective time of the merger, until such accounts are distributed to participants in connection with the termination and pay-out of the Company’s existing account balance deferred compensation plans on the later to occur of (i) December 31, 2017 and (ii) the closing date, in accordance with the terms of such plans and applicable law.

Treatment of Outstanding Equity Awards—Summary Tables

Non-Employee Directors

The following table sets forth the cash proceeds that each of our non-employee directors would receive in respect of outstanding equity awards held by such director as of the assumed effective time in accordance with the treatment of outstanding equity awards described above. In addition, following the entry into the merger agreement, in lieu of annual equity awards, certain of our non-employee directors will receive a restricted cash award in the amount of $100,000, on the applicable non-employee director’s anniversary date of joining the Board, which will vest in full on the earlier to occur of (i) the effective time and (ii) the one-year anniversary of the date of grant. Because each non-employee director’s anniversary date for joining the Board is after the assumed effective time, none of the non-employee directors were entitled to the $100,000 restricted cash award as of the assumed effective time.

Depending on when the effective time occurs, certain of these equity awards may vest, be exercised and/or cancelled, in each case, prior to the actual effective time in accordance with their terms and independent of the occurrence of the merger. All share numbers have been rounded to the nearest whole number.

Non-Employee Director Equity Summary Table

 

Non-Employee Directors

   Number of
Shares of Restricted
Stock
(#) (1)
     Value of
Restricted Stock
Awards
($) (1)
 

Lee Adrean

     4,101        96,374  

Donald M. Casey, Jr.

     4,508        95,199  

Anthony J. DiNovi

     —          —    

Paul R. Garcia

     4,159        97,737  

Laura A. Grattan

     —          —    

Jeanette A. Horan

     4,025        94,588  

Michael A. Huber

     —          —    

Diane E. Offereins

     4,543        106,761  

Gregory T. Sloma

     4,159        97,737  

 

(1) As of immediately prior to the effective time, each outstanding restricted stock award will be converted into the right to receive a payment in cash equal to the merger consideration of $23.50 per share multiplied by the number of shares subject to each such award.

Executive Officers

The following table sets forth the cash proceeds that each of our executive officers would receive in respect of vested Company options and the dollar value, based on the merger consideration, of each executive officer’s vested notional shares in West’s deferred compensation plan, based on each executive officer’s outstanding awards and deferred compensation account as of the assumed effective time in accordance with the treatment of outstanding equity awards described above. No executive officer held any other vested equity awards as of the assumed effective time. The vested options may be exercised and/or cancelled, in each case, prior to the actual effective time in accordance with their terms and independent of the occurrence of the merger. All share numbers have been rounded to the nearest whole number.

 

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Executive Officer Vested Equity Awards Summary Table

 

Executive Officers

   Number of
Vested Stock
Options (#) (1)
     Value of Vested
Stock Options
($) (1)
     Number of
Notional Shares
in Deferred
Compensation
Plan (#) (2)
     Value of Notional
Shares in
Deferred
Compensation
Plan ($) (2)
     Estimated Total
Consideration ($)
 

Thomas B. Barker*

     770,624        —          394,947        9,281,255        9,281,255  

Ronald R. Beaumont

     53,749        20,700        —          —          20,700  

Nancee R. Berger

     125,000        —          370,228        8,700,358        8,700,358  

J. Scott Etzler

     88,750        15,525        88,323        2,075,591        2,091,116  

Jon R. Hanson

     62,500        —          37,800        888,300        888,300  

Rod J. Kempkes

     31,250        —          94,866        2,229,351        2,229,351  

Jan D. Madsen

     —          —          47,468        1,115,498        1,115,498  

David C. Mussman

     100,000        —          147,930        3,476,355        3,476,355  

Nicole B. Theophilus

     —          —          257        6,040        6,040  

David J. Treinen

     100,000        —          144,095        3,386,233        3,386,233  

 

* Also a director.
(1) As of immediately prior to the effective time, each outstanding vested option will be cancelled, and each holder of a cancelled Company option will receive a payment in cash equal to the product of (i) the total number of shares subject to the cancelled Company option and (ii) the excess, if any, of (A) the merger consideration of $23.50 per share over (B) the exercise price per share subject to the cancelled Company option, without interest, less any required tax withholding (provided, however, that any Company option with respect to which the exercise price per share is equal to or greater than the merger consideration will be cancelled in exchange for no consideration).
(2) Under the terms of the merger agreement, any notional shares accrued under West’s deferred compensation plan will be valued based on the merger consideration of $23.50 per share and will be notionally reinvested in one or more other “measurement funds” (as defined under the deferred compensation plan), as determined by the Company prior to the assumed effective time, until such accounts are distributed to participants in connection with the termination and pay-out of the Company’s existing account balance deferred compensation plans on the later to occur of (x) December 31, 2017 and (y) the closing date, in accordance with the terms of such plans and applicable law. For Ms. Berger, these columns also include 57,550 deferred stock units deferred by Ms. Berger under the Company’s stock deferral program.

The following table sets forth the cash proceeds that each of our executive officers would receive in respect of stock units and restricted stock awards and unvested Company options held by such executive officer as of the assumed effective time in accordance with the treatment of outstanding equity awards described above. Depending on when the effective time occurs, certain of these equity awards may vest, be exercised and/or cancelled, in each case, prior to the effective time in accordance with their terms and independent of the occurrence of the merger. All share and unit numbers have been rounded to the nearest whole number.

 

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Executive Officer Unvested Equity Awards Summary Table

 

Executive Officers

  Number of
Stock Units
and
Restricted
Stock
Awards (#) (1)
    Value of
Stock Units
and
Restricted
Stock ($) (1)
    Number of
Unvested
Stock
Options (#) (2)
    Value of
Unvested
Stock
Options ($) (2)
    Number of
Notional
Shares in
Deferred
Compensation
Plan

(#) (3)
    Value of
Notional
Shares in
Deferred
Compensation
Plan

($) (3)
    Estimated
Total
Consideration

($)
 

Thomas B. Barker*

    450,000       11,587,500       —         —         —         —         11,587,500  

Ronald R. Beaumont

    93,200       2,297,075       10,000       6,900       —         —         2,303,975  

Nancee R. Berger

    141,350       3,452,225       —         —         —         —         3,452,225  

J. Scott Etzler

    139,750       3,444,438       7,500       5,175       —         —         3,449,613  

Jon R. Hanson

    93,200       2,297,075       —         —         —         —         2,297,075  

Rod J. Kempkes

    93,200       2,297,075       —         —         —         —         2,297,075  

Jan D. Madsen

    121,000       2,976,391       —         —         11,867       278,875       3,255,266  

David C. Mussman

    122,250       3,006,469       —         —         —         —         3,006,469  

Nicole B. Theophilus

    45,700       1,094,200       —         —         129       3,032       1,097,232  

David J. Treinen

    139,700       3,443,263       —         —         —         —         3,443,263  

 

* Also a director.
(1) Each outstanding stock unit award (as of immediately prior to the effective time) and each restricted stock award (as of the effective time) will be converted into the right to receive a payment in cash equal to the sum of (i) the merger consideration of $23.50 per share multiplied by the number of shares subject to each such award and (ii) the dividend equivalents accrued on such award prior to the closing date, less any required tax withholding. For any stock unit awards that are subject to performance-based vesting conditions, the merger agreement provides that the number of shares subject to such awards that are earned based on performance will be determined as of the closing date in accordance with the terms of the applicable award agreements, which award agreements West may amend between signing and closing to provide that, for all relevant periods, the performance goals will be deemed to have been satisfied at 100% of the target level. For any stock unit awards subject to performance-based vesting conditions, the performance goals are assumed to be achieved at 100% of the target level for the purposes of this table. For the restricted stock award subject to performance-based vesting conditions that was previously granted to West’s Chief Executive Officer, the performance goals are assumed to be achieved at maximum level, in accordance with the terms of the applicable award agreement. Under the terms of the service-based stock unit and restricted stock awards granted prior to September 2015, such awards will vest upon the earlier to occur of (i) the six-month anniversary of a change in control (provided the executive officer remains employed or otherwise provides services through such date) and (ii) the executive officer’s qualifying termination of employment (i.e., a termination without cause or resignation for good reason). Under the terms of the service-based stock unit and restricted stock awards granted during or following September 2015, such awards will vest upon the executive officer’s qualifying termination of employment (i.e., a termination without cause or resignation for good reason), provided the executive officer’s employment remains continuous until immediately prior to the qualifying termination. The cash amount related to the stock unit awards and restricted stock awards will be held in escrow and become vested and payable in accordance with the terms of the awards on the vesting schedule set forth in the awards or, if earlier, upon a qualifying termination of employment (i.e., a termination without cause or resignation for good reason). Also included in the value of stock unit awards and restricted stock unit awards are accrued dividends and dividend equivalents payable upon the vesting of the award in accordance with the terms of the award.
(2) As of immediately prior to the effective time, each outstanding option will be fully vested and cancelled (i.e., single trigger vesting), and each holder of a cancelled Company option will receive a payment in cash equal to the product of (i) the total number of shares subject to the cancelled Company option and (ii) the excess, if any, of (A) the merger consideration of $23.50 per share over (B) the exercise price per share subject to the cancelled Company option, without interest, less any required tax withholding (provided, however, that any Company option with respect to which the exercise price per share is equal to or greater than the merger consideration will be cancelled in exchange for no consideration).

 

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(3) Under the terms of the merger agreement, any notional shares accrued under West’s deferred compensation plan will be valued based on the merger consideration of $23.50 per share and will be notionally reinvested in one or more other “measurement funds” (as defined under the deferred compensation plan), as determined by the Company prior to the assumed effective time, until such accounts are distributed to participants in connection with the termination and pay-out of the Company’s existing account balance deferred compensation plans on the later to occur of (x) December 31, 2017 and (y) the closing date, in accordance with the terms of such plans and applicable law. Under the terms of the deferred compensation plan, any vesting conditions associated with notional shares that were received as matching contributions under the plan will be accelerated (i.e., single trigger vest) in full at the closing date.

Change in Control Severance Benefits for Executive Officers

West is party to employment agreements and Change in Control Agreements with West’s executive officers. Under the terms of the Change in Control Agreements, an executive officer who enters into a Change in Control Agreement is entitled to the following severance benefits if the executive officer’s employment with West terminates during the two-year period following the consummation of a change in control (as defined in the Change in Control Agreement) for any reason other than cause, resignation without good reason, death or disability or if the executive officer’s employment is terminated by West without cause prior to the consummation of a change in control at the direction or request of the person or group contemplating the change in control:

 

    any unpaid base salary and bonus earned with respect to the year prior to termination;

 

    a prorated bonus for the year in which the termination occurs, based on the higher of the target bonus for the year of termination or the target bonus in effect immediately prior to the consummation of the change in control;

 

    a lump sum payment equal to (i) one times the sum of the executive officer’s highest annual base salary in effect during the 12 months prior to the termination date plus the executive officer’s target annual bonus in effect immediately prior to the termination date (or, if higher, the average of the executive officer’s bonuses during the three years prior to the date of the change in control) if the executive officer is a Tier 3 employee, (ii) a lump sum payment equal to two times such sum if the executive officer is a Tier 2 employee, or (iii) a lump sum payment equal to three times such sum if the executive officer is a Tier 1 employee;

 

    continued benefit coverage for the executive officer and his or her dependents for a period of (i) one year after the date of termination if the executive officer is a Tier 3 employee, (ii) two years after the date of termination if the executive officer is a Tier 2 employee, or (iii) three years after the date of termination if the executive officer is a Tier 1 employee;

 

    accelerated vesting of any long-term incentive award (including, without limitation, any option, restricted stock, restricted stock unit, and other equity-based award) held by the executive officer, with any applicable performance goals deemed satisfied at the target level, except to the extent such long-term incentive award, by its terms, provides for a different treatment for the performance goals; and

 

    outplacement assistance for a period of six months, for Tier 3 employees, or 12 months for Tier 2 and Tier 1 employees (but with a cost not to exceed $15,000 per executive officer).

Pursuant to the Internal Revenue Code of 1986, as amended (which we refer to as the “ Code ”), if the payments to the employee would cause the employee to be subject to an excise tax under Section 4999 of the Code, then the executive officer may elect to reduce the payments to the largest amount that could be payable without causing any payment to be (i) subject to the excise tax or (ii) nondeductible by West by reason of Section 280G of the Code.

Under the terms of the Change in Control Agreements, “cause” has the meaning set forth in the executive officer’s employment agreement; provided that if the executive officer has no employment agreement with such

 

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definition, then “cause” will mean the occurrence of any of the following: (i) the Compensation Committee of the Board, in good faith, determines that the executive officer has engaged, during the performance of his or her duties, in significant objective acts or omissions constituting dishonesty, willful misconduct or gross negligence relating to the business of West or (ii) a plea of guilty or nolo contendere by the executive officer, or conviction of the executive officer, for a felony.

Under the Change in Control Agreements, “good reason” means, in relevant part, (i) either (1) a reduction in any material respect in the executive officer’s position(s), duties or responsibilities with West, as in effect during the 90-day period immediately prior to such change in control, or (2) an adverse material change in the executive officer’s reporting responsibilities, titles or offices with West as in effect immediately prior to the such change in control; (ii) a reduction of 20% or more in the executive officer’s rate of annual base salary as in effect immediately prior to such change in control or as the same may be increased from time to time thereafter; (iii) any requirement of West that the executive officer be based more than 50 miles from the facility where the executive officer is based immediately prior to such change in control; (iv) the failure of West to provide the executive officer with target bonus opportunities and employee benefits (excluding equity-based compensation, equity-based benefits and nonqualified deferred compensation) that are substantially comparable in the aggregate to the target bonus opportunities and employee benefits provided to the executive officer by West and its affiliates immediately prior to such change in control; or (v) the failure of West to obtain the assumption of the Change in Control Agreement from any successor or any other material breach of the Change in Control Agreement or the executive officer’s employment agreement.

Pursuant to each executive officer’s employment agreement, each executive officer is subject to restrictive covenants related to the protection of confidential information, non-competition, inventions and discoveries and the diversion of our employees. The term of the non-competition and non-solicitation covenants is one year following termination of employment, plus the duration of any consulting period that an executive officer is engaged for, pursuant to the terms of such executive officer’s employment agreement. An executive officer’s breach of any of the restrictive covenants contained in an employment agreement entitles West to injunctive relief and the return of any severance payments (excluding accrued obligations) in addition to any other remedies to which we may be entitled.

The severance benefits under the Change in Control Agreement are in lieu of any severance and consulting compensation paid under the employee’s existing employment agreement; except that, if the cash severance and consulting compensation payable under the employee’s existing employment agreement exceed the cash severance under the Change in Control Agreement, then the employee will receive the cash severance and consulting compensation payable under such employment agreement rather than the cash severance payable under the Change in Control Agreement. Mr. J. Scott Etzler is the only executive officer who would receive cash severance and consulting compensation under his employment agreement and not cash severance under his Change in Control Agreement. Under the terms of Mr. Etzler’s employment agreement, Mr. Etzler is entitled to the following benefits in the event he is terminated without cause or resigns due to good reason (each as defined in his employment agreement): (i) any unpaid base salary and bonus earned prior to termination; (ii) an amount equal to two times Mr. Etzler’s base salary, payable in equal installments for the two-year period beginning on the date of termination; (iii) provided Mr. Etzler is providing consulting services pursuant to the employment agreement which provides for a two-year consulting period, an amount equal to the projected annual bonus payable to Mr. Etzler as of the date of termination, determined based on the weekly performance projection for the remainder of the calendar year, which amount is payable in equal installments for the two-year consulting period; and (iv) continued benefit coverage for Mr. Etzler and his dependents during the consulting period, provided Mr. Etzler continues to provide consulting services to the Company (which payments will cease if (x) Mr. Etzler’s consulting services cease prior to the end of such period or (y) if Mr. Etzler commences other employment).

For illustrative purposes only, based on the assumptions described above under “—Certain Assumptions,” it is currently estimated that the entire group of West’s current executive officers would be entitled to receive, in the aggregate, approximately $23,750,000 in cash severance benefits under the Change in Control Agreements and, in the case of Mr. Etzler, the applicable employment agreement. See the section entitled “—Golden

 

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Parachute Compensation” below for an estimate of the amounts that would become payable to each of West’s named executive officers under the Change in Control Agreements or, in the case of Mr. Etzler, the applicable employment agreement, in accordance with the terms thereof.

Golden Parachute Compensation

The information set forth in the table below is intended to comply with Item 402(t) of Regulation S-K, which requires disclosure of compensation that each named executive officer could receive that is based on or otherwise relates to the merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules, and in this section we use such term to describe the merger-related compensation payable to West’s named executive officers. For additional details regarding the terms of the payments and benefits described below, see the discussion above. This merger-related compensation is subject to a non-binding advisory vote of West stockholders, as set forth in proposal two to this proxy statement. See the section entitled “Proposal 2: Non-Binding Compensation Advisory Proposal,” beginning on page 26.

The amounts set forth below are estimates of amounts that would be payable to the named executive officers using the assumptions above described under “—Certain Assumptions.” These estimates are based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement. Some of the assumptions are based on information not currently available, and as a result the actual amounts, if any, to be received by a named executive officer may differ in material respects from the amounts set forth below. All dollar amounts set forth below have been rounded to the nearest whole number.

Golden Parachute Payments (1)

 

Name

  Cash (2)     Equity (3)     Pension/
NQDC (4)
    Perquisites/
Benefits (5)
    Tax
Reimbursement (6)
    Other     Total  

Thomas B. Barker

    7,490,244       11,587,500       —         23,554       —         15,000       19,116,298  

Chief Executive Officer

             

Ronald R. Beaumont

    1,625,534       2,303,975       —         7,849       —         15,000       3,952,358  

President—Telecom Services and President—Safety Services

             

Nancee R. Berger

    3,542,641       3,452,225       —         44,121       —         15,000       7,053,987  

President and Chief Operating Officer

             

J. Scott Etzler

    1,966,027       3,449,613       —         7,069       —         15,000       5,437,709  

President—Unified Communications Services and President—Revenue Generation

             

Jan D. Madsen

    1,770,904       2,976,391       278,875       9,880       —         15,000       5,051,050  

Chief Financial Officer

             

 

(1)

The amounts reported in the “Cash” column for each of the named executive officers other than Mr. Etzler are attributable to double-trigger arrangements ( i.e., the amounts are triggered by the change in control that will occur upon completion of the merger and payment is conditioned upon the named executive officer’s termination of employment during the two-year period following the consummation of a change in control (as defined in the Change in Control Agreement) for any reason other than cause, resignation without good reason, death or disability, as described in the Change in Control Agreement, or if the named executive officer’s employment is terminated by West without cause prior to the consummation of a change in control at the direction or request of the person or group contemplating the change in control). In the case of Mr. Etzler, the amounts reported in the “Cash” column are payable under the terms of his employment agreement upon a termination of employment without cause or resignation due to good reason and are not contingent upon a change in control occurring. The amounts reported in the “Equity” column with respect to

 

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  Company options and the “Pension/NQDC” column with respect to unvested Company matching contributions (i.e., notional shares of Company common stock) granted under West’s nonqualified deferred compensation plans are attributable to a single- trigger arrangement ( i.e., the accelerated vesting and payment will occur upon completion of the merger and with respect to which payment is not conditioned upon the named executive officer’s qualifying termination of employment).
(2) Amounts reflect cash severance benefits under the Change in Control Agreements for each of the named executive officers other than Mr. Etzler that would be payable in a lump sum under double-trigger arrangements (i.e., assuming a termination of employment by the named executive officer for any reason other than cause, resignation without good reason, death or disability, as described in the Change in Control Agreement, or if the named executive officer’s employment is terminated by West without cause prior to the consummation of a change in control at the direction or request of the person or group contemplating the change in control), as follows: (i) a prorated bonus for the year in which the termination occurs, based on the higher of the target bonus for the year of termination or the target bonus in effect immediately prior to the consummation of the change in control (Mr. Barker, $544,932; Mr. Beaumont, $184,438; Ms. Berger, $381,452; and Ms. Madsen, $150,904); and (ii) a lump sum payment equal to a severance multiple times the sum of the named executive officer’s highest annual base salary in effect during the 12 months prior to the termination date plus the named executive officer’s target annual bonus in effect immediately prior to the termination date (or, if higher, the average of the named executive officer’s bonuses during the three years prior to the date of the change in control), with the severance multiple equal to three for Mr. Barker, two for Ms. Berger and Ms. Madsen and one for Mr. Beaumont (Mr. Barker, $6,945,312; Mr. Beaumont, $1,441,101; Ms. Berger, $3,161,189; and Ms. Madsen, $1,620,000). The amounts reported for Mr. Etzler are payable pursuant to his employment agreement for a termination without cause or resignation due to good reason and are not contingent upon a change in control occurring and reflect: (i) an amount equal to two times Mr. Etzler’s base salary, payable in equal installments for the two-year period beginning on the date of termination ($1,150,000); (ii) provided Mr. Etzler is providing consulting services pursuant to the employment agreement for a two-year consulting period, an amount equal to Mr. Etzler’s projected annual bonus as of the date of termination, determined based on the weekly performance projection for the remainder of the calendar year, which amount is payable in equal installments for the two-year consulting period, which payments will cease if Mr. Etzler’s consulting services cease prior to the end of the two-year consulting period ($575,000, assuming target projections for purposes of this table); and (iii) a pro-rated actual bonus for the year of termination ($241,027). The cash severance benefits payable to the named executive officers are described in more detail above in the section entitled “—Change in Control Severance Benefits for Executive Officers.”
(3) Amounts reflect the consideration to be received by each named executive officer in connection with the accelerated vesting, cancellation and termination of unvested Company options, stock unit and restricted stock awards held by each of the named executive officers, which acceleration of vesting for Company options will occur upon completion of the merger (i.e., single-trigger vesting), as described in more detail above in the section entitled “—Treatment of Outstanding Equity Awards.” The consideration to be received by each named executive officer with respect to this accelerated vesting and cancellation of unvested Company options, stock unit and restricted stock awards held by each of the named executive officers is summarized in the following tables:

SINGLE TRIGGER EQUITY ACCELERATION (A)

 

Executive Officers

   Number of
Unvested Stock

Options (#)
     Value of Unvested
Stock
Options ($)
 

Thomas B. Barker

     —          —    

Ronald R. Beaumont

     10,000        6,900  

Nancee R. Berger

     —          —    

J. Scott Etzler

     7,500        5,175  

Jan D. Madsen

     —          —    

 

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DOUBLE TRIGGER EQUITY ACCELERATION (B)

 

Executive Officers

   Number
of Stock
Unit Awards
(#)
     Value of
Stock Units
($)
     Number of
Shares of
Restricted
Stock
(#)
     Value of
Restricted
Stock
Awards

($)
 

Thomas B. Barker

     —          —          450,000        11,587,500  

Ronald R. Beaumont

     43,920        1,065,870        49,280        1,231,205  

Nancee R. Berger

     141,350        3,452,225        —          —    

J. Scott Etzler

     65,850        1,598,100        73,900        1,846,338  

Jan D. Madsen

     65,850        1,598,100        55,150        1,378,291  

(A) Pursuant to the terms of the merger agreement, each outstanding option will be fully vested and cancelled, and each holder of a cancelled Company option will receive a payment in cash equal to the product of (i) the total number of shares subject to the cancelled Company option and (ii) the excess, if any, of (A) the merger consideration of $23.50 per share over (B) the exercise price per share subject to the cancelled Company option, without interest, less any required tax withholding. Any Company option with respect to which the exercise price per share is equal to or greater than the merger consideration will be cancelled in exchange for no consideration.

(B) Pursuant to the terms of the merger agreement, each outstanding each stock unit award (as of immediately prior to the assumed effective time) and each restricted stock award (as of the assumed effective time) will be converted into the right to receive a payment in cash equal to the sum of (i) the merger consideration of $23.50 per share multiplied by the number of shares subject to each such award and (ii) the dividend equivalents accrued on such award prior to the closing date, less any required tax withholding. For any stock unit awards that are subject to performance-based vesting conditions, the merger agreement provides that the number of shares subject to such awards that are earned based on performance will be determined as of the closing date in accordance with the terms of the applicable award agreements, which West may amend between signing and closing to provide that, for all relevant periods, the performance goals will be deemed to have been satisfied at 100% of the target level. For any stock unit awards subject to performance-based vesting conditions, the performance goals are assumed to be achieved at 100% of the target performance level for the purposes of this table. For the restricted stock award subject to performance-based vesting conditions that was previously granted to West’s Chief Executive Officer, the performance goals are assumed to be achieved at maximum performance, in accordance with the terms of the applicable award agreement. Under the terms of the service-based stock unit and restricted stock awards granted prior to September 2015, such awards will vest upon the earlier to occur of (i) the six-month anniversary of a change in control (provided the executive officer remains employed or otherwise provides services through such date) and (ii) the executive officer’s qualifying termination of employment. Under the terms of the service-based stock unit and restricted stock awards granted during or following September 2015, such awards will vest upon the executive officer’s qualifying termination of employment (i.e., a termination without cause or resignation for good reason), provided the executive officer’s employment remains continuous until immediately prior to the qualifying termination. The cash amount related to stock unit awards and restricted stock awards will be held in escrow and become vested and payable in accordance with the terms of the awards on the vesting schedule set forth in the awards or, if earlier, upon a qualifying termination of employment (i.e., a termination without cause or resignation due to good reason). Also included in the value of stock unit awards and restricted stock unit awards are accrued dividends and dividend equivalents payable upon the vesting of the award in accordance with the terms of the award.

 

(4) Under the terms of West’s nonqualified deferred compensation plans, all matching contributions (including matching contributions in the form of notional shares of West common stock) are subject to vesting terms, which accelerate (i.e., single-trigger vest) upon a change in control.
(5)

Amounts reflect the payments in respect of continued coverage under West’s welfare insurance benefits following the named executive officer’s termination of employment, under the same circumstances as the

 

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  cash severance benefits are payable, as provided for under the Change in Control Agreements or, in the case of Mr. Etzler, the applicable employment agreement, as described in footnote 1 to this table and in detail above in the section entitled “—Change in Control Severance Benefit for Executive Officers,” and outplacement assistance in the amount of $15,000 for each named executive officer. The welfare insurance benefits will continue post-employment for three years for Mr. Barker, two years for Ms. Berger and Ms. Madsen, one year for Mr. Etzler (but if Mr. Etzler’s employment were to terminate without good reason by Mr. Etzler, then two years, subject to Mr. Etzler continuing to provide consulting services pursuant to the terms of his employment agreement) and one year for Mr. Beaumont, and are estimated based on the current insurance rates under the applicable plans.
(6) None of the named executive officers are eligible to receive a tax reimbursement based on or otherwise related to the merger.

Director and Officer Indemnification and Insurance

For more information, see the section entitled “The Agreement and Plan of Merger—Director and Officer Indemnification and Insurance,” beginning on page 93.

Certain Effects of the Merger

If the proposal to adopt the merger agreement is approved by the holders of shares representing a majority of the outstanding shares of West common stock entitled to vote on such matter and the other conditions to the closing of the merger are either satisfied or (to the extent permitted by applicable law) waived, Sub will be merged with and into West upon the terms set forth in the merger agreement. As the surviving corporation in the merger, West will continue to exist following the merger as a wholly owned subsidiary of Parent.

Following the merger, all of West’s equity interests will be beneficially owned by Parent, and none of West’s current stockholders will, by virtue of the merger, have any ownership interest in, or be a stockholder of, West, the surviving corporation or Parent after the completion of the merger. As a result, West’s current stockholders will no longer benefit from any increase in the value, nor will they bear the risk of any decrease in the value, of West common stock. Following the merger, Parent will benefit from any increase in West’s value and also will bear the risk of any decrease in West’s value.

Upon completion of the merger, each share of West common stock issued and outstanding immediately prior to the effective time of the merger (other than (i) shares held by stockholders of West who have properly exercised and perfected appraisal rights under Delaware law, (ii) shares that are held in the treasury of West or (iii) shares that are owned of record by any wholly owned subsidiary of West, Parent or any wholly owned subsidiary of Parent) will automatically be cancelled, cease to exist, and will be converted into the right to receive $23.50 per share in cash, without interest, and subject to any applicable withholding taxes. See the section entitled “The Agreement and Plan of Merger—Merger Consideration,” beginning on page 76.

For information regarding the effects of the merger on West’s outstanding equity awards, please see the sections entitled “—Interests of Directors and Executive Officers in the Merger,” beginning on page 56, “The Agreement and Plan of Merger—Treatment of Options, Stock Units and Restricted Stock,” beginning on page 77, “The Agreement and Plan of Merger—Treatment of the West Stock Purchase Plan,” beginning on page 78 and “The Agreement and Plan of Merger—Treatment of the West Deferred Compensation Plan,” beginning on page 78.

West common stock is currently registered under the Exchange Act and trades on the Nasdaq under the symbol “ WSTC .” Following the completion of the merger, shares of West common stock will no longer be traded on the Nasdaq or any other public market. In addition, the registration of shares of West common stock under the Exchange Act will be terminated, and West will no longer be required to file periodic and other reports with the

 

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SEC with respect to West common stock. Termination of registration of West common stock under the Exchange Act will reduce the information required to be furnished by West to West’s stockholders and the SEC, and would make certain provisions of the Exchange Act, such as the requirement to file annual and quarterly reports pursuant to Section 13(a) or 15(d) of the Exchange Act, the short-swing trading provisions of Section 16(b) of the Exchange Act and the requirement to furnish a proxy statement in connection with stockholders’ meetings pursuant to Section 14(a) of the Exchange Act, no longer applicable to West to the extent that they apply solely as a result of the registration of West common stock under the Exchange Act.

Consequences if the Merger is Not Completed

If the proposal to adopt the merger agreement is not approved by the holders of shares representing a majority of the outstanding shares of West common stock entitled to vote on such matter or if the merger is not completed for any other reason, you will not receive any consideration from Parent or Sub for your shares of West common stock. Instead, West will remain a public company, and West common stock will continue to be listed and traded on the Nasdaq. We expect that our management will operate our business in a manner similar to that in which it is being operated today and that holders of shares of West common stock will continue to be subject to the same risks and opportunities as they currently are subject to with respect to their ownership of West common stock. If the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of West common stock, including the risk that the market price of West common stock may decline to the extent that the current market price of West common stock reflects a market assumption that the merger will be completed. If the proposal to adopt the merger agreement is not approved by the holders of shares representing a majority of the outstanding shares of West common stock entitled to vote on such matter or if the merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to us will be offered or that our business, prospects or results of operations will not be adversely impacted.

In addition, if the merger agreement is terminated under specified circumstances, West is required to pay Parent a termination fee of $72 million. See the section entitled “The Agreement and Plan of Merger—Termination Fees,” beginning on page  98.

Financing of the Merger

Debt Financing

In connection with the entry into the merger agreement, Olympus Holdings II, LLC (which we refer to as “ Holdings ”), has entered into a commitment letter, as amended or modified from time to time (which we refer to as the “ debt commitment letter ”), with Credit Suisse AG (acting through such of its affiliates or branches as it deems appropriate, which we refer to as “ CS ”), Credit Suisse Securities (USA) LLC, Royal Bank of Canada, RBC Capital Markets, LLC, Barclays Bank PLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding, Inc. and Goldman Sachs Bank USA (which we collectively refer to as the “ arrangers ”), and CDPQ American Fixed Income V Inc. and PSP Investments Credit USA LLC (which, collectively with the arrangers, we refer to as the “ debt commitment parties ”) to provide Sub, severally but not jointly, upon the terms and subject to the conditions set forth in the debt commitment letter, in the aggregate up to $4.4 billion in debt financing, including a $350 million senior secured revolving facility (only a portion of which is available to be drawn at the closing of the merger), consisting of the following:

 

    up to a $2.7 billion senior secured term facility (which we refer to as the “ term facility ”) (less the amount of any of West’s outstanding senior secured notes that remain outstanding on the closing date after giving effect to the consummation of the transactions);

 

    a $350 million senior secured revolving facility (which we refer to as the “ revolving facility ”, and together with the term facility, the “ senior facilities ”); and

 

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    up to a $1.35 billion senior unsecured bridge facility (which we refer to as the “ senior unsecured bridge facility ”) (less (i) the amount of any senior unsecured notes issued as described below and (ii) the amount of any of West’s outstanding senior notes that remain outstanding on the closing date after giving effect to the consummation of the transactions).

The debt commitment letter also contemplates that Sub will, at its option, either (1) issue senior unsecured notes in a Rule 144A or other private placement on or prior to the closing date yielding up to $1.35 billion in aggregate gross cash proceeds; and/or (2) if any or all of the senior unsecured notes are not issued on or prior to the closing date of the merger and the proceeds thereof made available to Sub on the closing date of the merger, borrow up to such unissued amount in the form of senior unsecured bridge loans under the senior unsecured bridge facility.

The proceeds of the debt financing will be used (1) to finance, in part, the payment of the amounts payable under the merger agreement; (2) to repay certain existing indebtedness of West, including West’s credit agreement and, if tendered in one or more tender offers and/or “change of control offers,” West’s senior notes and senior secured notes; and (3) in the case of the revolving facility, for general corporate purposes. West has been advised that Sub (and/or one of its affiliates) presently intends to make “change of control offers” at a price of 101% plus accrued and unpaid interest and potentially one or more alternative offers (which may include tender offers and/or related consent solicitations) at or around the same price as the “change of control offers,” in each case prior to the closing date and conditioned thereon, with respect to West’s outstanding senior notes and senior secured notes. West has been advised that on the closing date, it is expected that Sub and/or one of its affiliates will purchase any senior notes and senior secured notes validly tendered (and not withdrawn) in such “change of control offers” and alternative offers in accordance with their terms. West has been advised that it is expected that any senior notes and senior secured notes not purchased in such offers will remain outstanding following the closing date.

The obligations of the debt commitment parties to provide the debt financing under the debt commitment letter are subject to a number of conditions, including (1) the execution and delivery of definitive documentation consistent with the terms of the debt commitment letter; (2) the substantially simultaneous completion of the merger with the closing under the senior facilities in accordance with the merger agreement (without giving effect to any amendment, waiver, consent or other modification thereof by Holdings to the merger agreement that is materially adverse to the lenders in their capacities as such unless it is approved by the arrangers); (3) the consummation of the equity financing, prior to, or substantially simultaneously with, the initial borrowings under the senior facilities; (4) since May 9, 2017, no material adverse effect (as defined in the section of this proxy statement entitled “The Agreement and Plan of Merger—Representations and Warranties,” beginning on page 79); (5) delivery of certain audited, unaudited and pro forma financial statements; (6) as a condition to the availability of the senior unsecured bridge facility, Sub having used commercially reasonable efforts to afford the investment banks a marketing period of 15 consecutive calendar days prior to the closing date (subject to certain blackout dates) following receipt of a customary preliminary prospectus, preliminary offering memorandum or preliminary private placement memorandum, which includes certain financial statements; (7) as a condition to the availability of the term facility and the revolving facility, Sub having used commercially reasonable efforts to (i) ensure that the arrangers receive a confidential information memorandum and other customary marketing materials to be used in connection with the syndication and (ii) afford the arrangers a marketing period of 15 consecutive calendar days prior to the closing date (subject to certain blackout dates) following receipt of such customary confidential information memorandum; (8) payment of all applicable invoiced fees and expenses; (9) the repayment of certain outstanding debt of West (but not West’s outstanding senior notes and/or senior secured notes to the extent the financing incurred is reduced on a dollar-for-dollar basis, as described above); (10) if any senior secured notes remain outstanding on the closing date after giving effect to the transactions contemplated by the merger agreement and the debt commitment letter that are secured (we refer to such notes as the “ rollover secured notes ”) and governed by that certain first lien intercreditor agreement, dated as of June 17, 2016 (which we refer to as the “ first lien intercreditor agreement ”), among Sub, the other grantors party thereto, Wells Fargo Bank, National Association and U.S. Bank National Association, then the senior facilities shall join

 

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and be designated as the “Credit Agreement” under and pursuant to the terms of the first lien intercreditor agreement such that, among other things, the senior facilities are entitled to share pari passu with the rollover secured notes in the collateral securing the senior facilities pursuant to the terms of the first lien intercreditor agreement and CS is the “Controlling Collateral Agent” under the first lien intercreditor agreement; (11) the receipt of documentation and other information about the borrower and guarantors under the senior facilities required under applicable “know your customer” and anti-money laundering rules and regulations (including the PATRIOT Act); (12) the execution and delivery of guarantees by certain guarantors and the taking of certain actions necessary to establish and perfect a security interest in specified items of collateral; (13) the accuracy in all material respects of specified representations and warranties in the loan documents under which the debt financing will be provided and of certain representations and warranties in the merger agreement (but only to the extent that Holdings has the right to terminate its obligations under the merger agreement as a result of a breach of such representations in the merger agreement) and (14) delivery of certain customary closing documents (including, among others, a customary solvency certificate).

The obligations of the debt commitment parties to provide the debt financing under the debt commitment letter will terminate at the earliest of (1) the Outside Date (as defined in and, if applicable, extended pursuant to and as set forth in the section of this proxy entitled “The Agreement and Plan of Merger—Termination of the Merger Agreement,” beginning on page 96) if the closing date shall not have occurred on or prior to such date; (2) the termination of the merger agreement without the consummation of the merger having occurred; and (3) the completion of the merger without the use of the applicable debt financing.

Parent and Sub are required under the merger agreement to use their respective reasonable best efforts to do (or cause to be done) all things necessary or advisable to arrange and obtain the financing on the terms and conditions described in the debt commitment letter and any related fee letter. In the event any portion of the debt financing becomes unavailable on the terms and conditions contemplated in the debt commitment letter, Parent and Sub are required under the merger agreement to use their reasonable best efforts to arrange and obtain alternative third-party debt financing from alternative sources in an amount that when added to the available portion of the debt financing, available cash of the Company and its subsidiaries and the equity financing (as such term is defined under “—Equity Financing”) is sufficient to fund the aggregate per share merger consideration, fees and expenses of Parent, Sub and the surviving corporation in connection with the merger and the refinancing or repayment of all indebtedness of West contemplated by the merger agreement and financing commitments and their other payment obligations of Parent, Sub and the surviving corporation contemplated under the merger agreement (the “ required amount ”), and on terms and conditions that are at least as favorable to Parent or Sub as the terms in the debt commitment letter. In no event will reasonable best efforts of Parent and Sub be deemed or construed to require Parent or Sub to pay any material fees in excess of those contemplated by the debt commitment letter. As of the last practicable date before the printing of this proxy statement, the debt commitment letter remains in effect, and Parent has not notified us of any plans to utilize financing in lieu of the financing described above. The definitive documentation governing the debt financing contemplated by the debt commitment letter has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described in this proxy statement.

The arrangers may invite other banks, financial institutions and institutional lenders to participate in the debt financing contemplated by the debt commitment and to undertake a portion of the arrangers’ commitments to provide such debt financing.

Equity Financing

Parent received an equity commitment letter, dated as of May 9, 2017 (which we refer to as the “ equity commitment letter ”) from the Apollo Funds pursuant to which the Apollo Funds have committed, on a several but not joint basis, subject to the conditions of the equity commitment letter, to provide equity financing (which we refer to as the “ equity financing ”) in an aggregate amount of up to approximately $1.3 billion, or such lesser amount as in the aggregate suffices to fully fund the merger consideration at the closing of the merger as set forth in the merger agreement, when taken together with (1) the cash of West and its subsidiaries utilized in respect of

 

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the payment of the merger consideration to West stockholders and holders of company stock-based awards and company options; and (2) the debt financing that may be required by Parent (A) to make the payment of the merger consideration to West stockholders, option holders and stock unit holders at the closing of the merger as set forth in the merger agreement and (B) to pay all estimated fees and expenses of Parent required to be paid by Parent at the closing of the merger in connection with the transactions contemplated by the merger agreement consistent with the terms thereof. Funding of the equity financing is subject to the conditions provided in the equity commitment letter, which include: (1) the satisfaction in full or valid waiver, on or before the closing of the merger, of all of the conditions precedent to Parent and Sub’s obligations to consummate the merger; and (2) the debt financing having been funded or will be funded if the equity financing is funded at the closing of the merger.

The equity commitment letter and the obligations of the Apollo Funds to fund all or any portion of the equity financing will automatically terminate and cease to be of any further force or effect without the need for any further action by any person (at which time the obligations of the Apollo Funds under the equity commitment letter shall be immediately terminated) upon the earliest of (1) the valid termination of the merger agreement in accordance with its terms; (2) the closing of the merger; (3) the payment in full by the Apollo Funds of all amounts which may become due under their guaranteed obligation pursuant to the limited guarantee; and (4) the assertion, directly or indirectly, by the Company, its subsidiaries or any of their respective officers, directors or affiliates (other than West stockholders) of any claim in any litigation or any other proceeding against any of the Apollo Funds or any former, current or future direct or indirect equity holder, controlling person, general or limited partner, officer, director, employee, investment professional, manager, stockholder, member, agent, affiliate, assignee, financing source or representative of any of the foregoing or any of their respective successors or assigns (which we refer to as a “ related party ”) or any related party of a related party thereof in connection with the equity commitment letter, the merger agreement, the debt commitment letter, the limited guarantee or any other transaction document or any of the transactions contemplated thereby (including the termination or abandonment thereof) (including in respect of any oral representations made or alleged to be made in connection therewith), except, solely with respect to clause (4), for (a) a claim brought by the Company against Parent or Sub in accordance with and subject to the terms and conditions of the merger agreement, (b) the Company seeking payment of the obligations under the Limited Guarantee in accordance with and subject to the terms and conditions thereof or (c) the Company making a claim against Apollo Management VIII, L.P. under, and in accordance with, the confidentiality letter agreement, dated November 30, 2016, between West and Apollo Management (which we refer to as the “ confidentiality agreement ”), in each case subject to the terms and conditions of the equity commitment letter. Immediately upon termination of the equity commitment letter and without the need for any further action by any person, no Apollo Fund or any related party of an Apollo Fund, or any related party of a related party shall have any further obligation or liability under the equity commitment letter.

West is an express third-party beneficiary of the equity commitment letter for the purpose of causing the equity financing to be funded, but solely to the extent that West has been awarded, in accordance with the terms and conditions of the merger agreement, specific performance to require Parent to cause the equity financing under the equity commitment letter to be funded. West may not enforce Parent’s obligation to cause the equity financing to be funded or to complete the merger if the debt financing has not been funded or would not be funded if the equity financing was funded.

Limited Guarantee

Concurrently with the execution of the merger agreement, and as a condition and inducement to West’s willingness to enter into the merger agreement, Parent and Sub delivered to West the limited guarantee, pursuant to which, and subject to the terms and conditions contained therein, the guarantors are guaranteeing certain obligations of Parent and Sub in connection with the merger agreement, including the $134 million termination fee potentially payable by Parent.

 

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

The following is a general summary of the material U.S. federal income tax consequences of the merger to beneficial owners of West common stock who receive cash for their shares of West common stock in the merger. This summary is general in nature and does not discuss all aspects of U.S. federal income taxation that might be relevant to a beneficial owner of shares in light of such beneficial owner’s particular circumstances. In addition, this summary does not describe any tax consequences arising under the laws of any state, local or foreign jurisdiction, does not consider any aspects of U.S. federal tax law other than the income tax (e.g., the estate or gift tax), and does not discuss any tax consequences arising from the Medicare tax on net investment income. This summary only addresses shares of West common stock held as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). This summary does not address the U.S. federal income tax consequences to holders of shares who demand appraisal rights under Delaware law. This summary also does not address tax considerations applicable to any holder of shares that may be subject to special treatment under the U.S. federal income tax laws, including without limitation:

 

    a bank, insurance company or other financial institution;

 

    a tax-exempt organization;

 

    a retirement plan or other tax-deferred account;

 

    a partnership, an S corporation or other pass-through entity (or an investor in such an entity);

 

    a mutual fund;

 

    a real estate investment trust or regulated investment company;

 

    a personal holding company;

 

    a dealer or broker in stocks and securities or currencies;

 

    a trader in securities that elects mark-to-market treatment;

 

    a holder of shares that received the shares through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;

 

    a U.S. holder that has a functional currency other than the U.S. dollar;

 

    a “controlled foreign corporation,” “passive foreign investment company” or corporation that accumulates earnings to avoid U.S. federal income tax;

 

    a holder that holds shares as part of a hedge, straddle, constructive sale, conversion or other risk reduction strategy or integrated transaction;

 

    a holder subject to the alternative minimum tax; or

 

    a U.S. expatriate or former long-term resident of the United States.

This summary is based on the Code, the Treasury regulations promulgated under the Code and rulings and judicial decisions, all as in effect as of the date of this proxy statement, and all of which are subject to change or differing interpretations at any time, possibly with retroactive effect. We have not sought, and do not intend to seek, any ruling from the U.S. Internal Revenue Service (which we refer to as the “ IRS ”) with respect to the statements made and the conclusions reached in the following summary. No assurance can be given that the IRS will agree with the views expressed in this summary, or that a court will not sustain any challenge by the IRS in the event of litigation.

THIS DISCUSSION IS INTENDED ONLY AS A GENERAL SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO A HOLDER OF SHARES OF WEST COMMON STOCK. WE URGE BENEFICIAL OWNERS OF SHARES TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER IN LIGHT OF THEIR

 

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PARTICULAR CIRCUMSTANCES, INCLUDING FEDERAL ESTATE, GIFT AND OTHER NON-INCOME TAX CONSEQUENCES, AND TAX CONSEQUENCES UNDER FEDERAL, STATE, LOCAL OR FOREIGN TAX LAWS, INCLUDING POSSIBLE CHANGES IN SUCH LAWS.

For purposes of this discussion, we use the term “U.S. holder” to mean a beneficial owner of shares of West common stock that is, for U.S. federal income tax purposes:

 

    an individual citizen or resident of the United States;

 

    a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia;

 

    a trust that (i) is subject to the supervision of a court within the United States and the control of one or more United States persons or (ii) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person; or

 

    an estate that is subject to U.S. federal income tax on its income regardless of its source.

A “non-U.S. holder” means a beneficial owner of West common stock (other than a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is not a U.S. holder.

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) beneficially owns shares of West common stock, the tax treatment of the partnership and its partners generally will depend on the status of the partners and the activities of the partnership. A partner in a partnership holding shares of West common stock should consult such partner’s tax advisor.

U.S. Holders

General . A U.S. holder’s receipt of cash for shares of West common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes, and a U.S. holder who receives cash in exchange for shares of West common stock in the merger will recognize gain or loss equal to the difference, if any, between the amount of cash received and the U.S. holder’s adjusted tax basis in the shares converted into the right to receive cash in the merger. Gain or loss generally will be determined separately for each block of shares of West common stock (that is, shares acquired at the same cost in a single transaction). Such gain or loss generally will be capital gain or loss, and generally will be long-term capital gain or loss if the U.S. holder’s holding period for the shares is more than one year at the effective time of the merger. Long-term capital gain recognized by an individual U.S. holder generally is subject to tax at a reduced rate of U.S. federal income tax. There are limitations on the deductibility of capital losses.

Information Reporting and Backup Withholding . A U.S. holder may be subject to information reporting. In addition, all payments to which a U.S. holder would be entitled pursuant to the merger will be subject to backup withholding at a statutory rate unless such holder (i) is a corporation or other exempt recipient (and, when required, demonstrates this fact) or (ii) provides a taxpayer identification number (which we refer to as a “ TIN ”) and certifies, under penalty of perjury, that the U.S. holder is not subject to backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. A U.S. holder that does not otherwise establish an exemption should complete and sign an IRS Form W-9 in order to provide the information and certification necessary to avoid backup withholding and possible penalties. If a U.S. holder does not provide a correct TIN, such U.S. holder may be subject to backup withholding and penalties imposed by the IRS.

Any amount paid as backup withholding does not constitute an additional tax and generally will be creditable against a U.S. holder’s U.S. federal income tax liability, provided the required information is given to the IRS in a timely manner. If backup withholding results in an overpayment of tax, a U.S. holder generally may obtain a refund by filing a U.S. federal income tax return in a timely manner. U.S. holders are urged to consult their tax advisors as to qualifications for exemption from backup withholding and the procedure for obtaining such an exemption.

 

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Non-U.S. Holders

General . A non-U.S. holder’s receipt of cash for shares of West common stock pursuant to the merger generally will not be subject to U.S. federal income tax unless:

 

    the non-U.S. holder is an individual who was present in the United States for 183 days or more during the taxable year of the merger and certain other conditions are met;

 

    the gain, if any, is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States and, if required by an applicable tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States, or in the case of an individual, a fixed base in the United States maintained by such non-U.S. holder; or

 

    we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the merger or the period that the non-U.S. holder held shares and the non-U.S. holder held (actually or constructively) more than five percent of our shares at any time during the five year period ending on the date of the merger.

Gain described in the first bullet point above generally will be subject to tax at a flat rate of 30% (or such lower rate as may be specified under an applicable income tax treaty), net of applicable U.S.-source losses from sales or exchanges of other capital assets recognized by such non-U.S. holder during the taxable year. Unless a tax treaty provides otherwise, gain described in the second bullet point above will be subject to U.S. federal income tax on a net income basis in the same manner as if the non-U.S. holder were a U.S. holder and a non-U.S. holder that is a foreign corporation also may be subject to a 30% (or applicable lower treaty rate) branch profits tax. Non-U.S. holders are urged to consult their tax advisors as to any applicable tax treaties that might provide for different rules.

With respect to the third bullet point above, we believe that we have not been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the five year period ending on the date of the merger.

Information Reporting and Backup Withholding . Information reporting and backup withholding will generally apply to payments made pursuant to the merger to a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a non-U.S. holder and satisfies certain other requirements, or otherwise establishes an exemption. Dispositions effected through a non-U.S. office of a U.S. broker or a non-U.S. broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. A non-U.S. holder must generally submit an IRS Form W-8BEN or W-8BEN-E (or other applicable IRS Form W-8) attesting to its exempt foreign status in order to qualify as an exempt recipient. Any amount paid as backup withholding does not constitute an additional tax and generally will be creditable against a non-U.S. holder’s U.S. federal income tax liability, provided the required information is given to the IRS in a timely manner. If backup withholding results in an overpayment of tax, a non-U.S. holder generally may obtain a refund by filing appropriate U.S. federal income tax documentation in a timely manner. Non-U.S. holders are urged to consult their tax advisors as to qualifications for exemption from backup withholding and the procedure for obtaining such an exemption.

THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS OF SHARES OF WEST COMMON STOCK. HOLDERS OF SHARES ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE RECEIPT OF CASH FOR THEIR SHARES PURSUANT TO THE MERGER UNDER ANY U.S. FEDERAL, STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.

 

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Regulatory Approvals Required for the Merger

Completion of the merger is conditioned on the expiration of the waiting period (and any extension thereof) or the granting of early termination applicable to the completion of the merger under the HSR Act. On May 26, 2017, West and Parent filed their respective notification and report forms under the HSR Act with the Antitrust Division of the Department of Justice (which we refer to as the “ DOJ ”) and the FTC, which triggered the start of the HSR Act 30-day waiting period. On June 6, 2017, the FTC granted early termination of the waiting period under the HSR Act.

Completion of the merger is also conditioned on (1) the expiration or termination of any applicable waiting period (and any extension thereof) or receipt of any necessary approval or clearance required under the Austrian Cartel Act, (2) the expiration or termination of any applicable waiting period (and any extension thereof) or receipt of any necessary approval or clearance required under the German Act against Restraints of Competition and (3) the receipt of a no action letter in respect of the merger from the Canadian Commissioner of Competition pursuant to the Canadian Competition Act, along with the expiration or termination of the applicable waiting period under the Competition Act (Canada).

We expect that Parent will submit a notification to the Austrian Federal Competition Authority, the antitrust authority in Austria, and to the Federal Cartel Office, the antitrust authority in Germany. We expect that both West and Parent will file their respective pre-merger notification forms with the Canadian Competition Commissioner, and Parent will file a request for an advance ruling certificate or no-action letter.

Completion of the merger is also conditioned on approvals having been obtained from (or notices being filed with) the FCC and certain state telecommunications and healthcare regulatory authorities in connection with the transfer of entities holding certain telecommunications licenses and authorizations in the merger. West and Parent filed their joint application with the FCC on May 24, 2017, and West and Parent have filed, or anticipate filing, the applicable applications or notices with various state telecommunications and healthcare regulatory authorities.

At any time before or after the effective time of the merger, the antitrust or regulatory authorities outside the United States or U.S. state attorneys general could take action under applicable antitrust or regulatory laws, including seeking to enjoin the completion of the merger, conditionally approving the merger upon the divestiture of West’s or Parent’s assets, subjecting the completion of the merger to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

We currently expect to obtain all antitrust and other regulatory approvals that are required for the completion of the merger during the second half of 2017; however, we cannot guarantee when any such approvals will be obtained, or that they will be obtained at all.

 

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THE AGREEMENT AND PLAN OF MERGER

Explanatory Note Regarding the Merger Agreement

The summary of the material provisions of the merger agreement set forth below and elsewhere in this proxy statement is qualified in its entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Annex  A and which is incorporated by reference in this proxy statement. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this discussion, which is summary by nature. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read the merger agreement carefully in its entirety, as well as this proxy statement and any documents incorporated by reference herein, before making any decisions regarding the merger.

The merger agreement is described in this proxy statement and included as Annex  A only to provide you with information regarding its terms and conditions and not to provide any other factual information regarding West, Parent or Sub or their respective businesses. Such information can be found elsewhere in this proxy statement and, in the case of West, in the public filings that West makes with the SEC, which are available without charge through the SEC’s website at www.sec.gov . See the section entitled “Where You Can Find More Information,” beginning on page 115.

The representations, warranties and covenants made in the merger agreement by West, Parent and Sub are qualified and subject to important limitations agreed to by West, Parent and Sub in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the right not to close the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC and in some cases were qualified by disclosures that were made by West, which disclosures are not reflected in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement.

Date of the Merger Agreement

The merger agreement was executed by West, Parent and Sub on May 9, 2017 (which we refer to as the “ date of the merger agreement ”).

The Merger

The merger agreement provides that, upon the terms and subject to the conditions of the merger agreement, and in accordance with Delaware law, at the effective time of the merger, Sub will be merged with and into West, whereupon the separate corporate existence of Sub will cease and West will continue as the surviving corporation of the merger and a wholly owned subsidiary of Parent. As a result of the merger, West, as the surviving corporation, will succeed to and assume all of the rights and obligations of Sub and West.

Closing; Effective Time of the Merger

The closing of the merger will take place on the second business day after the satisfaction or waiver (to the extent permitted under the merger agreement) of the last to be satisfied or waived of the closing conditions of the merger (as described in the section of this proxy statement entitled “—Conditions to the Closing of the Merger,”

 

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beginning on page 95), other than conditions that by their terms are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of each of such conditions. Notwithstanding the foregoing, if the marketing period (as described in the section of this proxy statement entitled “—Efforts to Complete the Merger—Marketing Period Cooperation and Efforts,” beginning on page 91) has not ended at the time of satisfaction or waiver of the last to be satisfied or waived of the conditions to closing of the merger, other than conditions that by their terms are to be satisfied at the closing of the merger, then closing will occur on the earlier of (1) any business day during such marketing period specified by Parent to West on no less than two business days’ prior written notice to West; and (2) the third business day after the final day of the marketing period, subject to certain terms and conditions set forth in the merger agreement.

On the closing date, the parties will file the certificate of merger with the Secretary of State of the State of Delaware in accordance with Delaware law. The merger will become effective at the time the certificate of merger is filed with the Secretary of State of the State of Delaware or at such other date and time as the parties agree upon in writing and specify in the certificate of merger (such date and time, we refer to as the “ effective time ”).

Organizational Documents; Directors and Officers

At the effective time of the merger, the certificate of incorporation of the surviving corporation will be amended and restated in a form to which West and Parent have mutually agreed and attached to the merger agreement as Exhibit A. At the effective time of the merger, the bylaws of Sub will become the bylaws of the surviving corporation, except that references to the name of Sub will be replaced by references to the name of the surviving corporation, until thereafter amended in accordance with Delaware law and the certificate of incorporation and bylaws of the surviving corporation.

The merger agreement provides that the directors of Sub immediately prior to the effective time of the merger will be the directors of the surviving corporation until their respective successors are duly appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the surviving corporation. At the effective time of the merger, the officers of West will serve as the officers of the surviving corporation until their respective successors are duly appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the surviving corporation.

Merger Consideration

Outstanding West Common Stock

Except as described below, at the effective time of the merger, each share of West common stock issued and outstanding immediately prior to the effective time of the merger (other than (i) shares held by stockholders of West who have properly exercised and perfected appraisal rights under Delaware law, (ii) shares that are held in the treasury of West or (iii) shares that are owned of record by any wholly owned subsidiary of West, Parent or any wholly owned subsidiary of Parent) will be converted into the right to receive $23.50 in cash, without interest, subject to any applicable withholding taxes.

Treasury Shares; Shares Owned by Parent or Subsidiaries of Parent or West

At the effective time of the merger, each share of West common stock (i) held in our treasury, (ii) owned of record by any of our wholly owned subsidiaries or (iii) owned of record by Parent or any of its wholly owned subsidiaries will, in each case, be automatically cancelled and cease to exist, and no consideration will be delivered in exchange for those shares.

Sub Common Stock

At the effective time of the merger, each share of common stock of Sub outstanding immediately prior to the effective time of the merger will be converted into and become one share of common stock of the surviving corporation.

 

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Dissenting Shares

Any issued and outstanding shares of West common stock held by a person who is entitled to appraisal rights under Section 262 of the DGCL and has complied with all provisions of the DGCL concerning the right of holders of shares to require appraisal of such shares (which we refer to as the “ dissenting shares ”) will not be converted into, or represent the right to receive, the merger consideration. Instead, at the effective time of the merger, the dissenting shares will no longer be outstanding and will automatically be cancelled and cease to exist, and the West stockholders will cease to have any rights with respect to such dissenting shares, other than the right to receive the fair value of the dissenting shares in accordance with Section 262 of the DGCL. Any dissenting shares held by West stockholders who fail to perfect or who effectively withdraw or lose their rights to appraisal under Section 262 of the DGCL will no longer be considered dissenting shares and will thereupon be deemed to have been converted into, and to have become exchangeable for, as of the effective time of the merger, the right to receive the merger consideration, without interest, subject to any applicable withholding taxes, upon surrender of the certificate or certificates that formerly evidenced such West common stock pursuant to the applicable exchange procedures under the merger agreement.

West is required to provide Parent with prompt notice of any demands for appraisal received by West, any withdrawals of such demands, and any other instruments served pursuant to Delaware law and received by West in respect of dissenting shares, and the opportunity to participate in negotiations and proceedings with respect to demands for appraisal under Delaware law. Absent the prior written consent of Parent, West is prohibited from making any payment with respect to any demand for appraisal or from settling or offering to settle any such demands for payment in respect of dissenting shares.

Treatment of Options, Stock Units and Restricted Stock

Options.  Upon the terms and subject to the conditions set forth in merger agreement, immediately prior to the effective time of the merger, each then-outstanding option will be fully vested (or, in the case of options granted after the date of the merger agreement, vest on a prorated basis) and be cancelled and, in exchange therefor, each holder of any such cancelled option will be entitled to receive a cash payment, without interest, and less any applicable withholding taxes, in an amount equal to the product of (i) the total number of shares of West common stock subject to such cancelled option and (ii) the excess, if any, of the merger consideration of $23.50 per share over the exercise price per share of such cancelled option. Any cancelled options with respect to which the exercise price per share subject thereto is greater than or equal to the merger consideration of $23.50 per share will be cancelled in exchange for no consideration. From and after the effective time of the merger, no options will be exercisable.

Stock Units.  Upon the terms and subject to the conditions set forth in merger agreement, prior to the effective time of the merger, any restricted stock units or deferred stock units (other than notional shares of common stock credited under West’s deferred compensation plan) (which we refer to as, collectively, the “ Stock Units ”) with respect to shares of common stock granted pursuant to our company stock plan will be converted into a right to receive a payment in cash of an amount equal to the sum of (i) the product of (A) the merger consideration of $23.50 per share multiplied by (B) the number of Stock Units subject to such Stock Unit award, without interest, and (ii) the dividend equivalents accrued on such Stock Unit award prior to the closing date, which will be funded, and become vested and payable, in accordance with the terms and conditions of the applicable award agreement relating to such Stock Unit award. In the case of a Stock Unit award that is subject to performance-based vesting conditions, the number of shares of common stock subject to such Stock Unit award that are earned based on performance will be determined as of the closing date in accordance with the terms of the applicable award agreement, unless such agreement is amended as permitted under the terms of the merger agreement to provide that, for all relevant periods, the performance goals will be deemed to have been satisfied at 100% of the target level.

Restricted Stock . Upon the terms and subject to the conditions set forth in the merger agreement and without any action on the part of Parent, Sub, West or any holder of an outstanding award of restricted stock (which we

 

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refer to as “ Restricted Stock ”) granted pursuant to our company stock plan (which we refer to as a “ Restricted Stock Award ”), as of the effective time of the merger each holder of Restricted Stock will be entitled to receive an amount equal to the sum of (i) the merger consideration of $23.50 per share multiplied by the number of shares of common stock subject to such Restricted Stock Award (less any required tax withholdings) and (ii) the dividend equivalents accrued on such Restricted Stock Award prior to the closing date, which merger consideration of $23.50 per share will be funded, and become vested and payable, in accordance with the terms and conditions of the applicable award agreement relating to such Restricted Stock Award. In the case of the Restricted Stock Award that is subject to performance-based vesting conditions, the number of shares of common stock subject to such Restricted Stock Award that are deemed to have been earned will be equal to the maximum number of shares subject to such award, in accordance with the terms of the applicable award agreement.

At the effective time of the merger, Parent will make a cash contribution to the surviving corporation or use cash available to West or its subsidiaries in an amount necessary to make the payments described above, and, to the extent required by an existing award agreement, such cash amount will be held in escrow and become vested and payable in accordance with the terms of the awards on the vesting schedule set forth in the applicable award agreements.

Treatment of the West Stock Purchase Plan

Pursuant to the terms of the merger agreement, we are required to, prior to the closing date of the merger, take all actions necessary to terminate West’s 2013 Employee Stock Purchase Plan (which we refer to as the “ West Stock Purchase Plan ”) and all outstanding rights thereunder as of immediately prior to the effective time of the merger; provided that from and after the date of the merger agreement, we have agreed to take all actions necessary to (i) ensure that the current offering period will end on June 30, 2017 and the West Stock Purchase Plan will thereafter be suspended, such that no new offering period will commence after the date of the merger agreement; (ii) ensure that no new participants be permitted to participate in the West Stock Purchase Plan and that the existing participants thereunder may not increase their elections with respect to the offering period in effect on the date of the merger agreement; and (iii) provide notice to participants describing the treatment of the West Stock Purchase Plan.

Treatment of the West Deferred Compensation Plan

Upon the terms and subject to the conditions set forth in the merger agreement and without any action on the part of Parent, Sub, West or any participant in West’s Nonqualified Deferred Compensation Plan (which we refer to as the “ Deferred Compensation Plan ”), any participant accounts (or portions thereof) which are notionally invested in shares of common stock immediately prior to the effective time of the merger will be notionally reinvested in one or more other “Measurement Funds” (as defined in the Deferred Compensation Plan) as determined by us prior to the effective time of the merger until such accounts are distributed to the participants in the Deferred Compensation Plan in connection with the termination and pay-out of the Company’s existing account balance deferred compensation plans on the later to occur of (x) December 31, 2017 and (y) the closing date, in accordance with the terms of such plans and applicable law.

Exchange Procedures

Prior to the effective time of the merger, Parent will designate Wells Fargo Bank, N.A. or another U.S.-based nationally recognized financial institution reasonably acceptable to West to act as paying agent. At or prior to the effective time of the merger, Parent will deposit, or cause to be deposited, with the paying agent an amount in cash equal to the aggregate merger consideration to be paid in respect of shares of West common stock that were converted into the right to receive the merger consideration.

As promptly as practicable after the effective time of the merger, and in any event not later than the third business day thereafter, Parent will cause the paying agent to mail to each record holder of a certificate representing any shares of West common stock whose shares were converted into a right to receive the merger

 

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consideration a letter of transmittal in customary form and instructions for surrendering the certificate in exchange for payment of the merger consideration. Upon surrender of a certificate (or an affidavit of loss in lieu thereof) for cancellation to the paying agent, and upon delivery of a duly executed letter of transmittal in proper form, the holder of such certificate will be entitled to receive the portion of the aggregate merger consideration for each share payable to such holder pursuant to the merger. The surrendered certificates representing shares of West common stock will be cancelled.

Notwithstanding the foregoing, any holder of shares of common stock held in book-entry form (which we refer to as “ book-entry shares ”) will not be required to deliver a certificate or an executed letter of transmittal (as both are described above) to the paying agent to receive the consideration payable in respect thereof. In lieu thereof, each holder of record (as of immediately prior to the effective time of the merger) of book-entry shares that immediately prior to the effective time of the merger represented an outstanding share of common stock (subject to certain exceptions) will automatically upon the effective time be entitled to receive, and the paying agent will pay and deliver as promptly as reasonably practicable (but in no event more than three business days after the effective time), an amount in cash equal to the portion of the aggregate merger consideration for each share payable to such holder pursuant to the merger.

No interest will be paid or will accrue on the cash payable upon surrender of any certificate representing any shares of West common stock (or affidavit of loss in lieu thereof) or any book-entry share. The cash paid upon surrender of any such certificate or book-entry share will be deemed to have been paid in full satisfaction of all rights pertaining to the shares of West common stock formerly represented by such certificate or book-entry share. The amount of any per share merger consideration paid to West stockholders may be reduced by any applicable withholding taxes.

You should not return your stock certificates with the enclosed proxy card, and you should not send in your stock certificates to the paying agent until you receive a letter of transmittal from the paying agent with instructions for the surrender of your stock certificates.

Lost, Stolen and Destroyed Certificates

If a West stock certificate is lost, stolen or destroyed, the holder of such certificate must deliver an affidavit (in form and substance reasonably acceptable to the paying agent) of that fact prior to receiving any merger consideration and, if required by the paying agent in its reasonable discretion, may also be required to provide a bond (in a customary amount) prior to receiving any merger consideration.

Representations and Warranties

West, on the one hand, and Parent and Sub, on the other hand, have each made representations and warranties to each other in the merger agreement. The representations and warranties of each of the parties to the merger agreement will expire at the effective time of the merger.

Representations and Warranties of West

We have made customary representations and warranties to Parent and Sub in the merger agreement regarding aspects of our business and various other matters. The topics covered by our representations and warranties include the following:

 

    the organization, qualification to do business and good standing, in each case, with respect to West and our subsidiaries;

 

    the capital structure of, and the absence of restrictions or encumbrances, in each case, with respect to the capital stock of, West and our subsidiaries;

 

    our corporate power and authority to enter into, deliver and perform, and consummate the transactions contemplated by the merger agreement;

 

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    the certificate of incorporation and bylaws of West and its subsidiaries;

 

    the absence of conflicts with, or violations of, laws, organizational documents or contracts to which we or our any of our subsidiaries is a party, in each case as a result of West entering into, or consummating the transactions contemplated by, the merger agreement;

 

    the governmental and regulatory approvals required to complete the merger;

 

    the authorizations, licenses and permits of West and our subsidiaries;

 

    our compliance with laws;

 

    our SEC filings and the financial statements contained in those filings;

 

    the accuracy of the information supplied by West for this proxy statement;

 

    our internal controls over financial reporting and disclosure controls and procedures;

 

    the absence of certain changes or events;

 

    West’s off-balance sheet arrangements;

 

    the absence of undisclosed liabilities;

 

    the absence of litigation or outstanding judgments;

 

    employee benefits matters;

 

    labor matters;

 

    tax matters;

 

    our owned and leased real properties;

 

    environmental matters;

 

    trademarks, patents, copyrights and other intellectual property matters;

 

    our material contracts and the absence of breaches of such contracts;

 

    our insurance policies;

 

    receipt of the fairness opinion from Centerview;

 

    the inapplicability of takeover laws to the merger;

 

    the vote of West stockholders required to adopt the merger agreement;

 

    the absence of any brokerage, finder’s or other fee or commission, other than those payable to Centerview, in connection with the transactions contemplated by the merger agreement;

 

    the usage of certain baskets under our existing indentures and the absence of defaults or events of defaults under such indentures;

 

    compliance with anti-corruption and international trade laws, including the Foreign Corrupt Practices Act;

 

    compliance with certain data privacy and security matters;

 

    our top ten customers and suppliers; and

 

    subject to stated exceptions, the absence of any transactions, relations or understandings between West or any of its subsidiaries and any affiliate or related person.

Many of our representations and warranties are qualified by the concept of a “material adverse effect.” Under the terms of the merger agreement, a material adverse effect on West means any change, circumstance, event or effect (each of which we refer to as an “ Effect ”) that (A) individually or in the aggregate, has or would

 

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reasonably be expected to have a material adverse effect on the business, financial condition or results of operations of West and our subsidiaries, taken as a whole or (B) prevents or materially impairs or delays us or our subsidiaries from performing in any material respect our respective obligations under the merger agreement or consummating the transactions contemplated by the merger agreement. However, no Effect resulting from the following will be taken into account in determining whether there has been a material adverse effect on the business, financial condition or results of operations of West and our subsidiaries, taken as a whole:

 

    the entry into or the announcement or pendency of the merger agreement or the transactions contemplated by the merger agreement or the consummation of the transactions contemplated by the merger agreement, including (i) by reason of the identity of Parent and its affiliates, (ii) by reason of any communication made by Parent or any of its affiliates regarding their respective plans with respect to the conduct of West’s business following the effective time of the merger and (iii) the impact of the foregoing on relationships with customers, suppliers, vendors, business partners, employees or regulators;

 

    West’s November 1, 2016 announcement regarding the commencement of a process to explore our range of financial and strategic alternatives;

 

    any Effect generally affecting the economy or the financial, credit or securities markets in the United States or elsewhere in the world or any business or industries in which West or any of our subsidiaries operates, except to the extent materially and disproportionately affecting West and our subsidiaries, taken as a whole, compared to other companies operating primarily in the same industries in which West and our subsidiaries operate;

 

    the suspension of trading in securities generally on the Nasdaq, except to the extent materially and disproportionately affecting West and our subsidiaries, taken as a whole, compared to other companies operating primarily in the same industries in which West and our subsidiaries operate;

 

    any development or change after the date of the merger agreement in applicable law or GAAP, except to the extent materially and disproportionately affecting West and our subsidiaries, taken as a whole, compared to other companies operating primarily in the same industries in which West and our subsidiaries operate;

 

    any action taken by West or any of our subsidiaries that is expressly required by the merger agreement or taken with Parent’s prior written consent or at Parent’s written request, or the failure by West or any of our subsidiaries to take any action that is expressly prohibited by the merger agreement (including any action taken or the failure to take any action by West or any of our subsidiaries in order to comply with our covenants described below under “—Covenants Regarding Conduct of Business by West Prior to the Merger,” beginning on page 82, prior to the effective time of the merger to the extent Parent fails to provide its consent to such action after receipt of a written request therefor and after the disclosure to Parent by us of all material and relevant facts and information known to us);

 

    the commencement, occurrence, continuation or escalation of any armed hostilities or acts of war or terrorism, except to the extent materially and disproportionately affecting West and our subsidiaries, taken as a whole, compared to other companies operating primarily in the same industries in which West and our subsidiaries operate;

 

    the existence, occurrence or continuation of any weather-related or force majeure events, including any earthquakes, floods, hurricanes, tropical storms, fires or other natural disasters or any national, international or regional calamity, except to the extent materially and disproportionately affecting West and our subsidiaries, taken as a whole, compared to other companies operating primarily in the same industries in which West and our subsidiaries operate; or

 

   

any changes in the market price or trading volume of shares of West common stock, any changes in the ratings or the ratings outlook for West or any of our subsidiaries by any applicable rating agency, any changes in any analyst’s recommendations or ratings with respect to West or any of our subsidiaries or any failure of West to meet any internal or external projections, budgets, guidance, forecasts or

 

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estimates of revenues, earnings or other metrics for any period ending on or after the date of the merger agreement (it being understood that the foregoing exceptions described in this bullet point will not prevent or otherwise affect the underlying cause of any such change or failure referred to in this bullet point (to the extent not otherwise falling within any of the exceptions provided above) from being taken into account).

Representations and Warranties of Parent and Sub

Parent and Sub made customary representations and warranties to us in the merger agreement, including representations and warranties relating to the following:

 

    organization and good standing of Parent and Sub;

 

    their authority to enter into, and consummate the transactions contemplated by, the merger agreement;

 

    the absence of conflicts with, or violations of, laws, organizational documents or contracts to which Parent or Sub is a party, in each case as a result of Parent’s or Sub’s entering into, or consummation of the transactions contemplated by, the merger agreement;

 

    the governmental and regulatory approvals required to complete the merger;

 

    the accuracy of the information supplied by Parent and Sub for this proxy statement;

 

    the absence of litigation which would prevent or materially delay the merger;

 

    the ownership of Sub by Parent and Sub’s lack of other operating activity;

 

    matters with respect to Parent’s financing in connection with the merger, including Parent’s sufficiency of funds;

 

    the validity of the guarantee provided by the guarantors in respect of certain obligations of Parent under the merger agreement;

 

    the absence of any exclusivity arrangement with any bank or other potential debt financing source prohibiting such bank or debt financing source from providing debt financing to any person other than Parent or Sub in connection with a transaction relating to West (including in connection with a competing proposal);

 

    the absence of broker’s or finder’s fees, other than those payable to LionTree Advisors, LLC, in connection with the transactions contemplated by the merger agreement;

 

    the solvency, on a consolidated basis, of Parent, the surviving corporation and each subsidiary of the surviving corporation in the merger immediately following the effective time of the merger;

 

    the absence of certain arrangements between Parent or Sub, on the one hand, and our or our subsidiaries’ officers, directors, employees or stockholders, on the other hand; and

 

    Parent’s entity structure and certain other matters related to Parent’s application for FCC approval in connection with the merger.

The representations and warranties contained in the merger agreement will not survive the consummation of the merger.

Covenants Regarding Conduct of Business by West Prior to the Merger

Under the merger agreement, until the effective time of the merger, except as required under the provisions of the merger agreement or as agreed to in writing by Parent (which agreement will not be unreasonably withheld, conditioned or delayed), we have agreed to, and to cause our subsidiaries to use commercially reasonable efforts to conduct our operations in all material respects in the ordinary course of business and to:

 

    preserve intact our material assets, properties and contracts;

 

    keep available the services of our current officers and key employees;

 

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    preserve our current relationships with customers, suppliers, distributors, lessors, licensors, licensees, creditors, contractors, governmental entities and other persons with whom we have business relations; and

 

    take certain actions contemplated in the confidential disclosure letter to the merger agreement delivered by West to Parent.

In addition, until the effective time of the merger, except as required under the provisions of the merger agreement, or as agreed to in writing by Parent (which agreement will not be unreasonably withheld, conditioned or delayed), and subject to certain specified exceptions (including those in in the confidential disclosure letter to the merger agreement delivered by West to Parent), we have agreed that we will not, and will not permit our subsidiaries to:

 

    amend West’s certificate of incorporation, West’s bylaws or any equivalent organizational or governing documents of any subsidiary of West;

 

    transfer, issue, sell, grant, encumber, deliver, pledge or authorize the transfer, issuance, sale, grant, encumbrance, delivery or pledge of any equity securities in West or any of our subsidiaries, or securities convertible into, or exchangeable or exercisable for, any such equity securities, or any rights of any kind to acquire any such equity securities or such convertible or exchangeable securities, other than the issuance of shares upon the exercise of options and options granted under the West Stock Purchase Plan and the vesting or settlement of stock units or notional shares, in each case in accordance with the terms thereof and outstanding as of the date of the merger agreement (or otherwise permitted to be granted thereunder);

 

    sell, assign, lease, license, sublicense, pledge, transfer, convey or otherwise dispose of, divest or spin off, abandon, waive, relinquish or permit to lapse, exchange or swap, mortgage or otherwise encumber or subject to any lien (other than any certain specified permitted liens) any properties or assets with a value in excess of $5 million in the aggregate, except in each case:

 

    in connection with any transaction solely between or among West and any of its wholly owned subsidiaries or solely between or among West’s wholly owned subsidiaries; or

 

    sales or dispositions made in the ordinary course of business (and not, for the avoidance of doubt, sales or dispositions of any person, division, a substantial portion of the assets of any person, business or equity securities);

 

    declare, set aside, make or pay any dividend or other distribution with respect to the capital stock of West, whether payable in cash, stock, property or a combination thereof;

 

    other than in connection with the exercise of any outstanding options permitted by the terms of such options, or the payment of related withholding taxes, by net exercise or by the tendering of shares, or tax withholdings on the vesting or payment of stock units, restricted stock or notional shares, reclassify, combine, split, subdivide or amend the terms of, or redeem, purchase or otherwise acquire, directly or indirectly, any of its equity securities or any options, warrants, securities or other rights exercisable for or convertible into any such equity securities;

 

    merge or consolidate any subsidiary of West with any person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of West;

 

    make or offer to make any acquisition of any interest in any person or any division, assets, properties, businesses or equity securities thereof (including by merger, consolidation or acquisition of stock or assets), other than acquisitions of assets or properties (and not, for the avoidance of doubt, the acquisition of any person, division, substantially all of the assets of any person, business or equity securities) in the ordinary course of operations;

 

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    make any loans, advances or capital contributions to, or investments in, any other person (other than any wholly owned subsidiary of West) other than (i) loans made in the ordinary course of business not to exceed $5 million in the aggregate and (ii) in connection with transactions permitted pursuant to the immediately preceding bullet;

 

    incur any indebtedness for borrowed money or issue any debt securities, or assume or guarantee the obligations of any person (other than a wholly owned subsidiary of West) for borrowed money, except:

 

    in connection with refinancings of existing indebtedness (other than indebtedness under our existing senior secured credit facilities and outstanding senior notes and senior secured notes);

 

    for borrowings in the ordinary course of business not to exceed $5 million;

 

    indebtedness among West and our wholly owned subsidiaries or among our wholly owned subsidiaries;

 

    indebtedness under any revolving credit facility of West in existence as of the date of the merger agreement and any credit facility of West thereafter created with revolving indebtedness on terms substantially the same as those governing West’s existing revolving credit facility as it may have been amended consistent herewith) in an aggregate amount under this sub bullet not to exceed the aggregate amount of commitments under West’s revolving credit facility in existence as of the date of the merger agreement; or

 

    for any guarantee by West of indebtedness of our wholly owned subsidiaries or guarantee by our subsidiaries of indebtedness of West or any of our wholly owned subsidiaries;

 

    except to the extent required by law or the terms of any West benefit plan or as specifically contemplated by the terms of the merger agreement: (i) increase the compensation or benefits payable or to become payable to our directors, officers or employees other than in the ordinary course of business with respect to members of the Board and employees whose annual rate of base pay is less than $150,000; (ii) adopt or enter into any employment agreement or retention bonus or incentive plan, agreement or other arrangement; (iii) except as otherwise permitted by this bullet, establish, adopt, enter into, amend or terminate any collective bargaining, bonus, profit sharing, thrift, pension, retirement, deferred compensation, employment, termination, severance or other plan or agreement; (iv) terminate any employees whose annual rate of base pay is greater than $150,000, other than for cause or (v) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability, payment or funding under any West benefit plan;

 

    make any material change in accounting policies or procedures, other than as required by GAAP, applicable law or any governmental entity with competent jurisdiction;

 

    enter into or amend any contract with certain affiliates of West that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;

 

    except in the ordinary course of business, (i) terminate or fail to use commercially reasonable efforts to renew any material contract or material lease (as each are defined in the merger agreement), (ii) modify, amend, waive, release or assign any material rights or claims under any material contract or material lease or (iii) enter into any contract that would have constituted a material contract or material lease if entered into prior to the date of the merger agreement;

 

    make any capital expenditures that in the aggregate exceed $5 million other than (i) with respect to capital expenditures prior to December 31, 2017, capital expenditures that are in accordance to and consistent with the capital expenditure budget set forth in the confidential disclosure letter to the merger agreement and (ii) with respect to capital expenditures after January 1, 2018, in accordance with a 2018 capital expenditure budget subject to Parent’s prior written approval;

 

    enter into any contract with respect to the voting or registration of the shares of West’s or any of its subsidiaries’ capital stock or other securities, equity interests or ownership interests;

 

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    cancel, settle or compromise any legal proceedings, including any action, claim, demand, inquiry, audit notice of violation, litigation, citation, investigation, proceeding or arbitration, other than cancellations, settlements or compromises that do not, individually or in the aggregate, involve the payment of more than $2 million (net of any amount covered by insurance or indemnification) in excess of the amount reserved for such legal proceeding or otherwise permitted by Parent in accordance with the terms of the merger agreement(subject to specified exceptions);

 

    except as required by applicable law, make, change or revoke any material tax election; change any material method of tax accounting; change any tax accounting period; file any material amended tax return; settle or compromise any legal proceeding, audit, examination or investigation relating to a material amount of taxes; or take certain other specified actions with respect to taxes;

 

    fail to use commercially reasonable efforts to prevent any material permit from expiring or being revoked, suspended or adversely modified, or knowingly take or fail to take any action that is reasonably likely to cause the FCC or any state telecommunications regulatory authority to institute proceedings for the suspension, revocation or adverse modification of any material permit; or

 

    authorize or enter into any contract to do any of the foregoing.

Obligations with Respect to the Special Meeting

Under the terms of the merger agreement, we have agreed to, as promptly as reasonably practicable following the date on which the proxy statement is cleared by the SEC for mailing to our stockholders, mail this proxy statement to our stockholders and duly call, give notice of, convene and hold a meeting of West stockholders, subject to our ability to postpone or adjourn the meeting under certain circumstances. Unless the merger agreement is terminated or there has been a change of Company recommendation (as such term is defined in the section entitled “—Obligation of the Board of Directors with Respect to Its Recommendation,” beginning on page 87), the Board has agreed to recommend the approval of the merger agreement to West stockholders. We have also agreed to use our reasonable best efforts to obtain the affirmative vote, in favor of the adoption of the agreement of merger contained in the merger agreement, of the holders a majority of the outstanding shares entitled to vote at the meeting of West common stockholders or any adjournment or postponement thereof (which we refer to as the “ West stockholder approval ”), unless the merger agreement is terminated or there has been a change of Company recommendation. Whether or not a change of Company recommendation has occurred or a competing proposal (as such term is defined under the section entitled “—Restrictions on Solicitation of Competing Proposals,” beginning on page 85) has been publicly announced or otherwise been made known to West or our directors, representatives or stockholders, West is obligated to submit the merger and the merger agreement for the approval of its stockholders.

Restriction on Solicitation of Competing Proposals

Under the terms of the merger agreement, from and after the date of the merger agreement, subject to certain exceptions described below, we have agreed to and have agreed to cause our subsidiaries and our and their respective directors, officers and employees to, and have agreed to use reasonable best efforts to cause our and our subsidiaries’ advisors, affiliates, representatives, consultants, advisors, investment bankers, accountants and counsel (which we refer to, collectively, together with our and our subsidiaries’ respective directors, officers and employees, as the “ West Representatives ”) to, immediately:

 

    cease any solicitations, discussions or negotiations with any persons that may be ongoing with respect to any competing proposal and for such persons to have destroyed or returned to us any confidential information that has been provided to such person in connection with any competing proposal; and

 

    enforce and, except as otherwise prohibited by applicable law, not waive any provisions of, any confidentiality or standstill agreement (or any similar agreement) to which us or any of our subsidiaries is a party relating to any such competing proposal; provided, that we are permitted to grant a waiver of any standstill agreement, in response to a bona fide unsolicited request (and to permit such request) for such waiver from the counterparty thereto, to permit a competing proposal to be made.

 

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Additionally, from the date of the merger agreement until the effective time of the merger (or the earlier termination of the merger agreement), we have agreed that we will not, will cause our subsidiaries not to and West and our subsidiaries will use our reasonable best efforts to cause the West Representatives not to, directly or indirectly:

 

    initiate, solicit or knowingly encourage or facilitate (including by way of furnishing non-public information) any inquiry, proposal, indication of interest or offer which constitutes, or would reasonably be expected to lead to, the submission of any competing proposal;

 

    furnish any non-public information regarding us or any of our subsidiaries to any third person in connection with or in response to a competing proposal;

 

    initiate, solicit, knowingly encourage or facilitate, or participate in any discussions or negotiations with, knowingly encourage or facilitate in any way any effort by, any third person with respect to any competing proposal;

 

    approve or recommend, or propose to approve or recommend, a competing proposal; or

 

    agree to do any of the foregoing.

A “ competing proposal ” is defined in the merger agreement to mean any proposal or offer from any person (other than the transactions contemplated by the merger agreement and other than a proposal or offer by Parent, Sub or any of their respective affiliates) relating to:

 

    the acquisition (whether by merger, consolidation, equity investment, joint venture, recapitalization, reorganization, exchange offer, self-tender, recapitalization, liquidation or otherwise) by any person of more than twenty percent (20%) of the consolidated assets of West and our subsidiaries (measured by either book value or fair market value), taken as a whole, or to which more than twenty percent (20%) of West’s revenue on a consolidated basis is attributable; or

 

    the acquisition in any manner, directly or indirectly, by any person of beneficial ownership of more than twenty percent (20%) of the issued and outstanding shares of common stock or any other equity interest in West or securities convertible into or exchangeable for such shares of West common stock or equity interests.

Notwithstanding the foregoing prohibitions, if, at any time following the date of the merger agreement and prior to receipt of the West stockholder approval, (i) we receive a  bona  fide  written competing proposal from a third party that did not result from a breach of the non-solicitation provisions described above (other than a breach that is de minimis ), (ii) the Board determines in good faith, after consultation with its financial advisors and outside counsel, that such competing proposal constitutes or could reasonably be expected to lead to a superior proposal (as such term is defined below) and (iii) we provide prior written notice to Parent disclosing our receipt of the competing proposal and including the name of the person making such competing proposal, the material terms and conditions of such competing proposal and a copy of any relevant acquisition agreement (as such term is defined under “—Obligation of the Board of Directors with Respect to Its Recommendation” below) and any other relevant transaction documents, and disclosing our intent to furnish information or enter into discussions or negotiations with such person, then we may (a) furnish information with respect to us and our subsidiaries to the person making such competing proposal (and its representatives) and (b) participate in discussions or negotiations with the person making such competing proposal (and its representatives) regarding such competing proposal; provided that we will:

 

    not, not permit our subsidiaries to, and not authorize the West Representatives to, disclose any material non-public information to such person without first entering into a confidentiality agreement (which we refer to as an “ acceptable confidentiality agreement ”), with such person that contains confidentiality provisions that are no less favorable in all material respects than those contained in the confidentiality agreement between Parent and West; provided that such acceptable confidentiality agreement and does not prohibit compliance by West with any of the non-solicitation provisions described above in this section and need not include a “standstill” or similar provision;

 

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    keep Parent reasonably informed, on a prompt basis (and in any event within 24 hours), of any material amendments or material developments with respect to such competing proposal (including any material changes thereto, and including by providing copies of any revised or new acquisition agreement and any other relevant transaction documents); and

 

    provide Parent any material information concerning West or our subsidiaries to be provided or made available to such person that was not previously provided or made available to Parent.

A “ superior proposal ” is defined in the merger agreement to mean a competing proposal (with all references to percentages in the definition of competing proposal increased to “70%”) made by any person on terms that the Board determines in good faith, after consultation with its financial advisors and outside legal counsel, and considering all legal, financial, tax, regulatory, timing and other aspects of the proposal and the person making such proposal (including any break-up fees, expense reimbursement provisions, the conditionality and the timing and likelihood of consummation of such proposal), that (a) if consummated, would result in a transaction that is more favorable, including from a financial point of view, to West and our stockholders than the transactions contemplated by the merger agreement and (b) is reasonably capable of being completed on the terms proposed.

Obligation of the Board of Directors with Respect to Its Recommendation

The merger agreement provides that, except as described below, neither the Board nor any committee of the Board will:

 

  (i) adopt, authorize, approve or recommend, or publicly propose to adopt, authorize, approve or recommend any competing proposal;

 

  (ii) withhold, withdraw, modify, qualify or amend, or publicly propose to withhold, withdraw, modify, qualify or amend, in each case in a manner adverse to Parent, the recommendation of the Board that West stockholders adopt the merger agreement or fail to include such recommendation in this proxy statement;

 

  (iii) take any formal action or make any recommendation or public statement in connection with a tender offer or exchange offer other than a recommendation against such offer or a temporary “stock, look and listen” communication by the Board pursuant to Rule 14d-9(f) of the Exchange Act;

 

  (iv) fail to publicly recommend against any competing proposal, or fail to publicly reaffirm the recommendation of the Board that West stockholders adopt the merger agreement, in each case within 10 days after the written request of Parent following a competing proposal that has been publicly announced (or such fewer number of days as remains prior to the meeting of the West stockholders);

 

  (v) resolve, propose or agree to do any of the foregoing; or

 

  (vi) allow West or any of its subsidiaries to enter into any letter of intent, term sheet, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement relating to, or that is intended to result in, or would reasonably be expected to lead to, any competing proposal (other than an acceptable confidentiality agreement) (which we refer to as an “acquisition agreement”) or requiring West to abandon, terminate or fail to consummate the transactions contemplated by the merger agreement.

We refer to any action described in clauses (i), (ii), (iii), (iv) or (v) above as a “ change of Company recommendation .”

Notwithstanding the foregoing, at any time prior to receipt of the West stockholder approval, the Board may make a change of Company recommendation, solely in response to (1) a superior proposal or (2) an intervening

 

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event and terminate the merger agreement, as further discussed in the sections entitled “—Termination of the Merger Agreement,” beginning on page 96, and “—Termination Fees,” beginning on page 98, if:

 

  (i) either (A) a competing proposal (that did not result from a breach of the provisions described in the section entitled “—Restriction on Solicitation of Competing Proposals,” beginning on page 85) (other than a breach that is de minimis ) is made to West by a third party and such competing proposal is not withdrawn or (B) an intervening event has occurred and is continuing;

 

  (ii) the Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that (x) in the case of a competing proposal, such competing proposal constitutes a superior proposal and (y) the failure to make a change of Company recommendation would be inconsistent with its fiduciary duties under applicable law;

 

  (iii) we provide Parent with at least three business days’ prior written notice of our intention to make a change of Company recommendation, which notice (x) states expressly that it has received a superior proposal or that an intervening event has occurred, (y) in the case of a superior proposal, identifies the person making such superior proposal and includes the material terms and conditions of such superior proposal (and we contemporaneously provide a copy of any relevant acquisition agreement and any other relevant transaction documents to Parent), or, in the case of an intervening event, the material facts and circumstances of such intervening event and (z) states expressly that the Board intends to make a change of Company recommendation and specifies, in reasonable detail, the reasons therefor;

 

  (iv) if requested by Parent, we have negotiated in good faith with Parent with respect to any changes to the terms of the merger agreement proposed by Parent for at least three business days following receipt by Parent of that notice (and an additional two business days for any amendment to any material term of such superior proposal);

 

  (v) taking into account any changes to the terms of the merger agreement offered by Parent in writing, the Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that (x) in the case of a competing proposal, such competing proposal would continue to constitute a superior proposal if such changes offered in writing by Parent were to be given effect and (y) the failure to make a change of Company recommendation would be inconsistent with the Board’s fiduciary duties under applicable law; and

 

  (vi) we have complied with the terms of the merger agreement with respect to such superior proposal or intervening event (other than with respect to any breach that is de minimis ).

An “ intervening event ” is defined in the merger agreement any material event, change, effect, development, state of facts, condition or occurrence that occurs or arises after the date of the merger agreement that (a) was not known, or reasonably foreseeable (or the material consequences were not known or reasonably foreseeable) to or by the Board as of or prior to the date of the merger agreement and did not result from a breach of the merger agreement by West, any of its subsidiaries or any West Representative, and (b) does not involve or relate to the receipt, existence or terms of a competing proposal.

Notwithstanding any change of Company recommendation, unless the merger agreement has been terminated in accordance with the terms thereof, (x) the merger agreement will be submitted to the West stockholders at a meeting of the West stockholders for the purpose of obtaining the West stockholder approval and (y) the Board will not submit to the West stockholders any competing proposal, or, except as permitted by the terms of the merger agreement, propose to do so.

The merger agreement does not prohibit us or the Board from:

 

    disclosing to West stockholders a position contemplated by Rule 14e-2(a) or Rule 14d-9 under the Exchange Act or Item 1012(a) of Regulation M-A under the Exchange Act;

 

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    making any disclosure to West’s stockholders that the Board determines, in good faith after consultation with outside counsel, that the failure to make such disclosure would be inconsistent with its fiduciary duties under applicable law; or

 

    issuing a “stop, look and listen” statement pending disclosure of its position (which statement will not constitute a change of Company recommendation).

Efforts to Complete the Merger

Under the terms of the merger agreement, we and Parent have each agreed to use our respective reasonable best efforts (and Parent has agreed to cause its affiliates to use their respective reasonable best efforts) to cause the conditions to the merger to be satisfied (as described below in the section entitled “—Conditions to the Closing of the Merger,” beginning on page 95), including:

 

    promptly obtaining all actions or non-actions, consents, licenses, permits (including environmental permits), waivers, approvals, authorizations and orders from governmental entities or other persons necessary or advisable in connection with the consummation of the transactions contemplated by the merger agreement;

 

    as promptly as practicable (and, (x) solely with respect to the filings required of the parties to the merger agreement or their “ultimate parent entities” under the HSR Act, in any event within 15 business days after the date of the merger agreement and (y) solely with respect to certain filings set forth on West’s confidential disclosure letter to the merger agreement, in any event within 15 calendar days after the date of the merger agreement), making (or causing to be made) all registrations and filings or, if consistent with agency practice, a draft of such a filing, with any governmental entity or other persons necessary or advisable in connection with the consummation of the transactions contemplated by the merger agreement, including the filings required of the parties or their “ultimate parent entities” under the HSR Act or any other antitrust law and in connection with the approval of the FCC and applicable state telecommunications regulatory approvals, and promptly make any further filings pursuant thereto that may be necessary or advisable, including the furnishing to the FCC or state telecommunications regulatory authorities of any documents, materials or other information requested;

 

    defending all lawsuits or other legal, regulatory, administrative or other proceedings challenging or affecting the merger agreement or the consummation of the transactions contemplated by the merger agreement, in each case until the issuance of a final, non-appealable order with respect to each such lawsuit or other proceeding;

 

    seeking to have lifted or rescinded any injunction or restraining order which may adversely affect the ability of the parties to consummate the transactions contemplated by the merger agreement, in each case until the issuance of a final, non-appealable order with respect thereto;

 

    seeking to resolve any objection or assertion by any governmental entity challenging the merger agreement or the transactions contemplated by the merger agreement; and

 

    executing and delivering any additional instruments necessary or advisable to consummate the transactions contemplated by the merger agreement.

Parent has also agreed to promptly take any and all actions necessary or advisable in order to avoid or eliminate each and every impediment to the consummation of the transactions contemplated by the merger agreement and to obtain all approvals and consents, including approvals and consents under any antitrust laws, that may be required by any foreign or U.S. federal, state or local governmental entity, in each case, with competent jurisdiction, so as to enable the parties to consummate such transactions as promptly as practicable, including accepting operational restrictions or limitations on, and committing to or effecting, by consent decree, hold separate orders, trust or otherwise, the sale, license, disposition or holding separate of, such assets or businesses of Parent, Sub, West or any of their respective affiliates (and the entry into agreements with, and submission to decrees, judgments, injunctions or orders of the relevant governmental entity), in each case,

 

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conditioned on the closing of the merger, as may be required to obtain such approvals or consents of such governmental entities or to avoid the entry of, or to effect the dissolution of or vacate or lift, any decrees, judgments, injunctions or orders that would otherwise have the effect of preventing or materially delaying the consummation of the transactions contemplated by the merger agreement. Parent and Sub have agreed to not take any action, including acquiring or making any investment in any person or any division or assets thereof, that would reasonably be expected to prevent or cause a material delay in the satisfaction of the conditions contained in the merger agreement or the consummation of the transactions contemplated by the merger agreement.

Each party will give each other prompt notice of the making or commencement of any legal proceeding by or to any government entity, keep each other informed as to the status of each legal proceeding and promptly inform each other of any communication with the FTC, the DOJ, the FCC, any state telecommunications regulatory authority, or any other governmental entity. Except as may be prohibited by law, in connection with any such legal proceeding, each party will permit authorized representatives of the other parties to be present, to the extent practicable, at each meeting relating to such legal proceeding and to have access to, be consulted in connection with and, to the extent practicable, provide the opportunity to review in advance any document made or submitted to any government entity. We have agreed to, within five business days of such request, provide all information reasonably requested by Parent to determine the necessity of any regulatory filing necessary to consummate the transactions contemplated by the merger agreement. With respect to each registration, filing and submission made with the FTC, the DOJ, the FCC, any state telecommunications regulatory authority, or any other governmental entity, each of Parent and West will (i) provide the other with all information necessary for the preparation of such registration, filing or submission on a timely basis, and will work diligently to prosecute the applications for such approvals and (ii) have the right to review, comment and approve such registration, filing, and submission, subject to certain exceptions. Upon designation by a party, certain such designated materials and the information contained therein will be given only to the outside antitrust counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, directors or managers of the recipient unless express permission is obtained in advance from the source of the materials (Parent or West, as the case may be) or its legal counsel.

Notwithstanding anything to the contrary in the merger agreement or otherwise, but subject to the obligation of Parent set forth in the merger agreement, (i) Parent will determine strategy and timing, lead all proceedings and coordinate all activities with respect to seeking any actions, non-actions, terminations or expirations of waiting periods, consents, approvals or waivers of any governmental entity, after consultation with West, (ii) West will, and will cause each of our subsidiaries to, use its reasonable best efforts to take such actions as reasonably requested by Parent, after consultation with West, in connection with obtaining any such actions, non-actions, terminations or expirations of waiting periods, consents, approvals or waivers, and (iii) Parent will have the sole and exclusive right, after consultation with West, and subject to Parent’s obligations under the merger agreement, to propose, negotiate, offer or commit to make or effect any divestitures, dispositions, or licenses of any assets, properties, products, rights, services or businesses, or to agree to any other remedy, requirement, obligation, condition or restriction to resolve any governmental entity’s objections to or concerns about the transactions contemplated by the merger agreement.

Debt Financing Cooperation

Prior to the closing of the merger, at Parent’s sole expense, West will, and will cause its subsidiaries and our and their respective representatives to, in each case, use their respective reasonable best efforts to provide to Parent and Sub all customary cooperation reasonably requested by Parent or Sub in connection with the debt financing contemplated in connection with the merger (provided that the “reasonable best efforts” of West, any of its subsidiaries or our or their respective representatives will not be deemed or construed to require such persons to, and such persons will not be required, to provide such cooperation to the extent it would, among other things, interfere unreasonably with the business or operations of West or any of our subsidiaries or require West or any of its subsidiaries to take any action that would reasonably be expected to conflict with, or result in any violation or breach of, or default under such entity’s organizational documents or any applicable laws or any material contract or cause any condition to closing of the merger to fail to be satisfied or otherwise cause any

 

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breach of the merger agreement or result in any employee, officer or director of such person incurring any personal liability with respect to any matters related to the debt financing). West will arrange to be delivered to Parent, on or prior to the closing date of the merger, customary payoff letters, lien terminations and releases and instruments and acknowledgements of discharge with respect to West’s senior secured credit facilities.

The obligations of Parent and Sub to consummate the merger are not conditioned upon the obtaining of the debt financing or any replacement financing. None of West or its subsidiaries will be required to execute or enter into or perform any agreement (other than customary representation letters and authorization letters) with respect to the debt financing that is not contingent upon the closing or that would be effective prior to the closing or that otherwise requires West or any of its subsidiaries, prior to the closing of the merger, to be an issuer or other obligor with respect to the debt financing. Parent will, promptly upon request by us, reimburse us for all reasonable and documented out-of-pocket expenses in connection with the equity financing and the debt financing and will indemnify and hold harmless West, its subsidiaries and West’s and its subsidiaries’ representatives from and against any and all losses, liabilities, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with the financing and any information utilized in connection therewith (other than historical information provided in writing by West and our subsidiaries specifically for use in connection therewith), in each case, except to the extent any of the foregoing was suffered or incurred as a result of bad faith, gross negligence, willful misconduct or material breach of the financing cooperation covenants in the merger agreement by West, its subsidiaries or West’s and its subsidiaries’ representatives.

Marketing Period Cooperation and Efforts

Under the merger agreement, West has agreed to allow Parent a period of 17 consecutive days (subject to customary blackout dates) to market the debt financing. This “marketing period” is a period throughout and at the end of which (1) Parent has received certain required financial information and the required information is compliant; (2) the conditions to the obligations of West, Parent and Sub to consummate the merger are satisfied (other than those conditions that by their nature can only be satisfied at closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions); and (3) nothing has occurred and no condition exists that would cause the conditions to the obligations of West, Parent and Sub to consummate the merger to fail to be satisfied (other than those conditions that by their nature can only be satisfied at the closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of such conditions), assuming that such conditions were applicable at any time during such 17 consecutive day period.

The marketing period will not be deemed to have commenced if prior to its expiration (1) West’s independent accountant has withdrawn its audit opinion with respect to any financial statements contained in West’s most recently filed Annual Report on Form 10-K, in which case the marketing period will not be deemed to commence until, at the earliest, a new unqualified audit opinion is issued by the independent accountant or another “Big Four” or other nationally recognized independent public accounting firm or other public accounting firm reasonably acceptable to Parent; (2) West or any of its subsidiaries publicly announces an intention to restate any historical financial statements or that any such restatement is under active consideration, in which case the marketing period will not commence unless and until, at the earliest, such restatement has been completed and the relevant required information has been amended or West announces no such restatement is required in accordance with GAAP; (3) any required financial information would not be compliant at any time during such 17 consecutive day period or otherwise does not include the required information; or (4) West or any of its subsidiaries have failed to file any report on Form 10-K, Form 10-Q or Form 8-K required to be filed with the SEC by the date required under the Exchange Act, in which case (a) in the case of a failure to file a Form 10-K or Form 10-Q, the marketing period will not be deemed to commence unless and until such reports have been filed; and (b) in the case of a failure to file a Form 8-K, the marketing period will be tolled until such report has been filed, except that if the failure to file such report occurs during the final five business days of the marketing period, the marketing period will be extended so that the final day of the marketing period will be no earlier than the fifth business day after such report has been filed. If the marketing period is not completed on or

 

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before August 18, 2017, then it will not commence until September 5, 2017, except that notwithstanding anything to the contrary, the marketing period in any event will end on any earlier date on which the debt financing is consummated.

Treatment of Existing Notes

Parent and Sub are permitted under the terms of the merger agreement to commence and conduct one or more offers to purchase, including any “Change of Control Offer” (as such term is defined in the applicable indenture governing West’s existing notes) and any tender offer, or any exchange offer, and to conduct any consent solicitations with respect to any or all of the outstanding aggregate principal amount of West’s existing senior secured notes and senior notes identified by Parent to us in writing prior to, on, or after the date of the merger agreement on terms that are acceptable to Parent, subject to certain additional conditions. Parent has covenanted and agreed to provide (or to cause to be provided) immediately available funds for the full payment at the effective time of the merger of all notes properly tendered and not withdrawn and any related consent payments to the extent required pursuant to the terms of any applicable debt offer.

West has been advised that Sub (and/or one of its affiliates) presently intends to make “change of control offers” at a price of 101% plus accrued and unpaid interest and potentially one or more alternative offers (which may include tender offers and/or related consent solicitations) at or around the same price as the “change of control offers,” in each case prior to the closing date and conditioned thereon, with respect to West’s outstanding senior notes and senior secured notes. West has been advised that on the closing date, it is expected that Sub and/or one of its affiliates will purchase any senior notes and senior secured notes validly tendered (and not withdrawn) in such “change of control offers” and alternative offers in accordance with their terms. West has been advised that it is expected that any senior notes and senior secured notes not purchased in such offers will remain outstanding following the closing date.

Subject to the receipt of any requisite consents, we have agreed to execute a supplemental indenture to the applicable indenture governing each series of our outstanding notes identified by Parent to us in writing prior to, on, or after the date of the merger agreement in accordance with the applicable indenture, amending the terms and provisions of each such indenture as described in the applicable debt offer documents as reasonably requested by Parent, which supplemental indenture will become operative no earlier than the effective time of the merger, and to use reasonable best efforts to cause the trustee under each such Indenture to enter into such supplemental indenture prior to or substantially simultaneously with the closing of the merger as determined by Parent; provided that in no event will we or any West Representatives have any obligation to authorize, adopt or execute any amendments or other agreement that would become operative prior to the effective time of the merger.

In certain circumstances, if requested by Parent, West will use its reasonable best efforts to issue a notice of redemption for all or a portion of the outstanding principal amount of the existing notes in accordance with the terms and conditions applicable thereto, but only if the redemption can be conditioned on the consummation of the merger.

Parent has agreed to reimburse West for its reasonable and documented out-of-pocket costs and expenses incurred in connection with West’s cooperation with the actions described above regarding the existing notes. Parent has also agreed to indemnify West, its subsidiaries and their respective officers and representatives from and against any and all losses incurred by them in connection with the actions described above, subject to limited exceptions.

West has agreed, between the date of the merger agreement and the earlier of the effective time of the merger and the termination of the merger agreement in accordance with its terms, West will not, and will not permit any of its subsidiaries to, among other things, utilize certain baskets or amounts otherwise available under the indentures governing our outstanding notes or make certain reclassifications relating thereto, subject to specified exceptions.

 

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Access to Information

Under the merger agreement, we have agreed to provide, and to cause our subsidiaries to provide, Parent and Sub and their respective representatives, upon prior written notice to West, reasonable access during normal business hours to the officers, employees, properties, offices and other facilities of West and our subsidiaries and to the books and records thereof, in such a manner as not to interfere with the operation of any business conducted by West or our subsidiaries and furnish promptly such information related thereto as Parent or its representatives may reasonably request, in each case subject to certain exceptions.

Director and Officer Indemnification and Insurance

After the effective time of the merger, Parent is obligated to and is obligated to cause the surviving corporation to indemnify, defend and hold harmless each current or former director or officer of West or any of our subsidiaries, to the fullest extent that West or any of our subsidiaries is permitted by applicable law to indemnify its own directors and officers, against (i) damages and losses arising out of actions or omissions occurring at or prior to the effective time of the merger to the extent that they are based on or arise out of the fact that such person is or was a director or officer or performed services at the request of West or any of our subsidiaries (which we refer to as “ indemnified liabilities ”), and (ii) all indemnified liabilities to the extent they are based on or arise out of or pertain to the transactions contemplated by the merger agreement. The surviving corporation will pay the reasonable fees and expenses of counsel to any such director or officer and otherwise advance documented expenses reasonably incurred in connection with any such indemnified liabilities, subject to repayment if it is determined that such director or officer is not entitled to indemnification under law.

West is permitted to, prior to the effective time of the merger, and if West fails to do so, Parent is obligated to cause the surviving corporation to, obtain and fully pay the premium for an insurance and indemnification policy that provides coverage for a period of six years from and after the effective time of the merger for events occurring prior to the effective time of the merger that is substantially equivalent to and in any event not less favorable in the aggregate to the intended beneficiaries thereof than our existing directors’ and officers’ liability insurance policy (but in no event will compliance with the foregoing obligations require Parent or the surviving corporation, or West, to pay a premium for such insurance in excess of six times 250% of the annual aggregate premium currently paid by West).

In addition, for not less than six years following the effective time of the merger, Parent and the surviving corporation are required to maintain provisions in the organizational documents of the surviving corporation and its subsidiaries with respect to exculpation, indemnification and advancement of expenses that are no less favorable than the exculpation, indemnification and advancement of expenses provisions contained in the current organizational documents of West and our subsidiaries. The contractual indemnification rights, if any, in existence on the date of the merger agreement with any of the directors, officers or employees of West and our subsidiaries will be assumed by the surviving corporation and will continue in full force and effect in accordance with their terms following the effective time of the merger.

Employee Benefits

Under the terms of the merger agreement, Parent has agreed to provide or cause its subsidiaries, including the surviving corporation, to provide, through the period ending on December 31, 2017:

 

    base salary and wages to each individual who is an employee of West or our subsidiaries immediately prior to the effective time of the merger (each of which we refer to as a “ Company employee ”) at a rate that is no less favorable than the rate of base salary or wages provided to such Company employee immediately prior to the effective time of the merger;

 

    an annual bonus opportunity or commission opportunity, as applicable, to each Company employee that is not less favorable than the annual bonus opportunity or commission opportunity, as applicable, provided to such Company employee for the calendar year in which the effective time of the merger occurs;

 

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    severance benefits to each Company employee that are no less favorable than the severance benefits provided under the severance policy or agreement in effect for the benefit of such Company employee immediately prior to the effective time of the merger; and

 

    other compensation and benefits (including paid-time off, but excluding long-term incentive compensation opportunities and deferred compensation benefits) to each Company employee that are substantially comparable, in the aggregate, to the other compensation and benefits provided to such Company employee under specified benefit plans immediately prior to the effective time of the merger.

In addition, Parent has agreed that the surviving corporation will assume, honor and continue our employment, severance, retention and termination plans, policies, programs, agreements and arrangements in accordance with their terms as in effect immediately prior to the effective time of the merger. For the avoidance of doubt, the surviving corporation will be permitted to amend or terminate any of the foregoing plans in accordance with the terms thereof.

Following the merger, each Company employee’s pre-merger service with or otherwise credited by us and our subsidiaries will be treated as service with Parent or one of its subsidiaries, including the surviving corporation, for all purposes (including for purposes of determining eligibility to participate, level of benefits, vesting and benefits accruals) of any vacation, paid time off and severance plans, under any employee benefit plan, program, policy or arrangement maintained by Parent and its subsidiaries, including the surviving corporation, except that such service need not be recognized to the extent that such recognition would result in any duplication of benefits. Parent has further agreed to, and to cause its subsidiaries (including the surviving corporation) to, waive any pre-existing condition limitations, exclusions, actively at work requirements and waiting periods under any welfare benefit plan maintained by Parent or any of its subsidiaries, including the surviving corporation, in which Company employees (and their eligible dependents) will be eligible to participate from the effective time of the merger (except to the extent that such pre-existing condition limitations, exclusions, actively at work requirements or waiting periods would not have been satisfied or waived under the comparable benefit plan of West immediately prior to the effective time of the merger). Parent will, or will cause its subsidiaries, including the surviving corporation, to recognize or cause to be recognized the dollar amount of all co-payments, deductibles and similar expenses incurred by each Company employee during the calendar year in which the effective time of the merger occurs for purposes of satisfying such year’s deductible and co-payment limitations under the relevant welfare benefit plans in which such Company employees (and dependents) will be eligible to participate from and after the effective time of the merger.

Prior to the effective time of the merger, we are permitted to implement a retention plan for the benefit of our employees, which will provide for retention benefits to such employees in an aggregate amount not to exceed $3 million, payable 6 months after the Closing Date. The Company is required to consult with Parent in connection with the adoption of such plan and the allocation of awards under such plan, which shall be subject to Parent’s review and consent (such consent not to be unreasonably withheld, conditioned or delayed).

Defense of Litigation

Pursuant to the terms of the merger agreement, West will control, and to the extent reasonably practicable, West will consult with Parent and keep Parent reasonably informed with respect to any material developments regarding, the defense of any legal proceeding brought by West stockholders against West or its directors or officers arising out of or relating to the transactions contemplated by the merger agreement (which we refer to as the “ transaction litigation ”); provided that West may not settle any such legal proceeding without the prior written consent of Parent (which consent will not be unreasonably withheld, conditioned or delayed) and West will give Parent the opportunity to participate in the defense or settlement of any transaction litigation. West has agreed to promptly notify Parent in writing of any transaction litigation that is brought or, to West’s knowledge, threatened, and will keep Parent reasonably informed on a current basis with respect to the status and terms thereof.

 

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Other Covenants and Agreements

We and Parent have made certain other covenants to and agreements with each other regarding various other matters including:

 

    preparation of this proxy statement and relating to the West stockholder meeting;

 

    West taking actions as may be necessary to ensure that the disposition of West equity securities (including derivative securities) by West officers and directors who are covered persons for purposes of Section 16 of the Exchange Act in connection with the transactions contemplated by the merger agreement is exempt under Rule 16b-3 promulgated under the Exchange Act;

 

    all costs and expenses incurred in connection with the merger agreement and the transactions contemplated by the merger agreement will be paid by the party incurring such expenses, provided that whether or not the merger is consummated, any filing fees required in connection with the approval of the FCC or the state telecommunications regulatory approvals will be shared equally by Parent and West;

 

    delisting of West and shares of West common stock from the Nasdaq as promptly as practicable after the effective time of the merger and the deregistration of the shares pursuant to the Exchange Act as promptly as practicable after such delisting; and

 

    West providing prompt notice to Parent of any failure or reasonably anticipated failure by West to comply with or satisfy in any respect any representation, warranty, covenant, condition or agreement to be complied with or satisfied by us pursuant to the merger agreement, in each case if and only to the extent that such untruth, inaccuracy or failure would reasonably be expected to cause any of the conditions to the obligations of Parent and Sub to consummate the merger set forth in the merger agreement to fail to be satisfied at the closing of the merger.

Conditions to the Closing of the Merger

Conditions to Each Party’s Obligations

Each party’s obligations to effect the merger are subject to the satisfaction or waiver (if permitted by law) of the following conditions:

 

    receipt of the West stockholder approval;

 

    the waiting period (and any extensions thereof) applicable to the merger under the HSR Act having expired or been terminated and the approvals or clearances under applicable antitrust laws by certain additional governmental entities in Austria, Canada and Germany having been obtained or the applicable waiting periods relating thereto having been terminated or expired;

 

    receipt of the approval of the FCC required in connection with the merger; and

 

    no governmental entity having issued, enacted, entered, promulgated or enforced any law or order that is in effect and renders the merger illegal, or prohibits, enjoins or otherwise prevents the merger.

Conditions to Parent’s and Sub’s Obligations

The obligations of Parent and Sub to effect the merger are also subject to the satisfaction or waiver by Parent of the following additional conditions:

 

    the representations and warranties of West relating to certain aspects of West’s capitalization being true and correct in all respects, as of the date of the merger agreement and as of the closing date as though made on the closing date, except to the extent such representations and warranties expressly relate to another date (in which case such representations and warranties being true and correct in all respects on and as of such other date), other than failures to be true and correct which, individually or in the aggregate, are a  de  minimis  inaccuracy;

 

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    the representations and warranties of West relating to organization, good standing, corporate power, authority and enforceability, anti-takeover laws and no broker fees being true and correct in all material respects as of the date of the merger agreement and as of the closing date as though made on the closing date, except to the extent such representations and warranties expressly relate to another date (in which case such representations and warranties being true and correct in all material respects on and as of such other date);

 

    the representations and warranties of West relating to the absence of any material adverse effect being true and correct in all respects as of the closing date as though made on the closing date;

 

    the representations and warranties of West in the merger agreement other than those relating to certain aspects of West’s capitalization, organization, good standing, corporate power, authority and enforceability, anti-takeover laws, no broker fees and the absence of any material adverse effect, without regard to materiality or material adverse effect qualifiers contained within such representations and warranties, being true and correct as of the date of the merger agreement and as of the closing date as though made on the closing date, except to the extent such representations and warranties expressly relate to another date (in which case such representations and warranties being true and correct on and as of such other date), other than such failures to be true and correct that, individually and in the aggregate, would not reasonably be expected to have a material adverse effect;

 

    West having performed or complied in all material respects with the obligations required by the merger agreement to be performed or complied with by it at or before the closing date;

 

    Parent having received a certificate signed on behalf of West by an executive officer of West as to the satisfaction of the foregoing conditions;

 

    the absence of any material adverse effect since the date of the merger agreement; and

 

    approvals having been obtained from (or notices being filed with) certain state telecommunications and healthcare regulatory authorities in connection with the merger.

Conditions to Our Obligations

Our obligations to effect the merger are also subject to the satisfaction or waiver by us of the following additional conditions:

 

    the representations and warranties of Parent and Sub in the merger agreement being true and correct in all material respects on the date of the merger agreement and on the closing date as though made on the closing date, except to the extent such representations and warranties expressly relate to another date (in which case such representations and warranties being true and correct in all material respects on and as of such other date);

 

    each of Parent and Sub having performed or complied in all material respects with the obligations required by the merger agreement to be performed or complied with by them at or before the closing date; and

 

    West having received a certificate signed on behalf of Parent by an executive officer of Parent as to the satisfaction of the foregoing conditions.

Each of Parent and Sub, on the one hand, and West, on the other hand, may, to the extent permitted by applicable law, waive the conditions to the performance of its respective obligations under the merger agreement and effect the merger even though one or more of these conditions has not been met. We cannot give any assurance that all of the conditions of the merger will be either satisfied or waived or that the merger will occur.

Termination of the Merger Agreement

Mutual Termination Right

The merger agreement may be terminated prior to the effective time of the merger, whether before or after receipt of the West stockholder approval, by the mutual written consent of Parent and West.

 

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Termination Rights Exercisable by Either Parent or West

The merger agreement may also be terminated prior to the effective time of the merger, whether before or after receipt of the West stockholder approval, by either Parent or West if:

 

    the merger has not been consummated on or before November 9, 2017 (which we refer to as the “ Outside Date ”), provided that:

 

  (A) if all of the conditions to closing of the merger, other than the receipt of the approval of the FCC and certain specified state telecommunications and healthcare regulatory approvals, have been satisfied or be capable of being satisfied at such time, the Outside Date may be extended by either Parent or West by written notice to the other party to the date that is 30 days after the Outside Date (which we refer to as the “ First Extended Outside Date ”), which date will thereafter be deemed to be the Outside Date;

 

  (B) if all of the conditions to closing of the merger, other than the receipt of the approval of the FCC and certain specified state telecommunications and healthcare regulatory approvals, have been satisfied or will be capable of being satisfied at the First Extended Outside Date, the Outside Date may be extended by either Parent or West by written notice to the other party to a date that is 30 days after the First Extended Outside Date (which we refer to as the “ Second Extended Outside Date ”), which date will thereafter be deemed to be the Outside Date;

 

  (C) if all of the conditions to closing of the merger, other than the receipt of the approval of the FCC and certain specified state telecommunications and healthcare regulatory approvals, have been satisfied or be capable of being satisfied at the Second Extended Outside Date, the Outside Date may be extended by either Parent or West by written notice to the other party to a date that is 30 days after the Second Extended Outside Date, which date will thereafter be deemed to be the Outside Date; and

 

  (D) in the event the marketing period has commenced but has not completed as of the then applicable Outside Date, such Outside Date may be extended (or further extended) by Parent in its sole discretion by providing written notice thereof to West at least one business day prior to such Outside Date until four business days after the then-scheduled expiration date of the marketing Period;

provided that this termination right will not be available to any party if the failure of the merger to be consummated by the Outside Date was primarily caused by (A) such party’s material breach of any provision of the merger agreement or (B) such party’s failure to comply in any material respect with its obligations thereunder;

 

    any governmental entity issues any decision, order, directive, writ, injunction, judgment or decree permanently enjoining or otherwise permanently prohibiting the merger and such decision, order, directive, writ, injunction, judgment or decree has become final and nonappealable; provided, that this termination right will not be available to any party that has failed to use its reasonable best efforts to contest, resolve or lift, as applicable, such decision, order, directive, writ, injunction, judgment or decree; provided, further, that this termination right will not be available to any party if such decision, order, directive, writ, injunction, judgment or decree was primarily caused by (i) such party’s material breach of any provision of the merger agreement or (ii) such party’s failure to comply in any material respect with its obligations under the merger agreement; or

 

    upon a vote at a duly held meeting to obtain the West stockholder approval at the West stockholder meeting (including any postponement or adjournment thereof), the West stockholder approval is not obtained.

West Termination Rights

We may also terminate the merger agreement prior to the effective time if:

 

   

Parent breaches or fails to perform or comply with its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform (i) would give rise to the failure

 

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of a closing condition and (ii) cannot be or has not been cured within 30 days after the giving of written notice to Parent of such breach (provided that West is not then in breach of any representation, warranty or covenant in the merger agreement that would give rise to the failure of a closing condition set forth therein);

 

    prior to the adoption of the merger agreement at the stockholder meeting (or any postponement or adjournment of such meeting), (i) West has complied with its representations, warranties or covenants contained in “—Obligation of the Board of Directors with Respect to Its Recommendation,” beginning on page 87, and with respect to mailing this proxy statement and relating to the West stockholder meeting (other than any failure to comply that is  de  minimis ), (ii) the Board authorizes West to enter into an acquisition agreement with respect to a superior proposal in accordance with the terms of the merger agreement, (iii) substantially concurrently with the termination of the merger agreement, West enters into an acquisition agreement providing for such superior proposal, and (iv) prior to or concurrently with such termination, West pays to Parent in immediately available funds a termination fee of $72 million (as further described below under the section entitled “—Termination Fees,” beginning on page 98); or

 

    (i) all of the conditions to closing (other than those conditions that by their nature are to be satisfied at the closing of the merger and that would be satisfied if there were a closing) have been satisfied or waived, (ii) West has notified Parent in writing at least three business days prior to such termination that West is irrevocably ready, willing and able to consummate the closing of the merger, and (iii) Parent and Sub have failed to consummate the closing of the merger within three business days after the date by which the closing of the merger is required to have occurred pursuant to the terms of the merger agreement.

Parent Termination Rights

Parent may also terminate the merger agreement prior to the effective time if:

 

    West breaches or fails to perform or comply with its representations, warranties or covenants contained in the merger agreement, which breach or failure to perform (i) would give rise to the failure of a condition set forth therein and (ii) cannot be or has not been cured within 30 days after the giving of written notice to West of such breach (provided that Parent is not then in breach of any representation, warranty or covenant contained in the merger agreement that would give rise to the failure of a condition set forth therein); or

 

    prior to the adoption of the merger agreement at the stockholder meeting (or any postponement or adjournment of such meeting), the Board or any committee of the Board makes a change of Company recommendation.

Effect of Termination

If the merger agreement is terminated by either West or Parent, the merger agreement will become void and there will be no liability or obligation on the part of Parent, Sub or West or their respective affiliates, officers, directors or other representatives, in either case, except for certain provisions with respect to confidentiality, payment of expenses associated with, and indemnification for liabilities incurred in connection with, Parent’s debt financing for the merger, expenses, termination fees and termination of the merger agreement will not relieve any party of any liabilities or damages resulting from fraud or West from its willful breach of any of its representations, warranties, covenants or agreements set forth in the merger agreement.

Termination Fees

We will be required to pay Parent a termination fee in the amount of $72 million (the “ Company Termination Fee ”) if:

 

   

(i) West has complied with its representations, warranties or covenants contained in “—Obligation of the Board of Directors with Respect to Its Recommendation” and with respect to mailing this proxy

 

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statement and relating to the West stockholder meeting (other than any failure to comply that is  de  minimis ), (ii) the Board authorizes West to enter into an acquisition agreement with respect to a superior proposal in accordance with the terms of the merger agreement, (iii) West terminates the merger agreement and substantially concurrently with the termination of the merger agreement, West enters into an acquisition agreement providing for such superior proposal and (iv) prior to or concurrently with such termination, West pays to Parent in immediately available funds the Company Termination Fee;

 

    the Board or any committee of the Board makes a change of Company recommendation and Parent terminates the merger agreement;

 

    either party validly terminates the merger agreement at such time as Parent could have terminated the merger agreement as a result of the Board or any committee of the Board making a change of Company recommendation; or

 

    (i) any person makes a competing proposal (substituting “50%” for each reference in the definition of “competing proposal” to “20%”) (which we refer to as a “ qualifying transaction ”) that was publicly disclosed or otherwise made publicly known to the West stockholders before the West stockholder meeting and not publicly withdrawn at least one business day prior to the date of the West stockholder meeting, and thereafter the merger agreement is validly terminated (A) as a result of the expiration of the Outside Date (if the West stockholder approval has not theretofore been obtained), (B) if, upon a vote at a duly held meeting to obtain the West stockholder approval at the West stockholder meeting (including any postponement or adjournment thereof), such West stockholder approval is not obtained, or (C) with respect to a termination because West has breached or failed to perform or comply with its covenants contained in the merger agreement and (ii) within 12 months of such termination West enters into a definitive agreement to consummate a qualifying transaction, and a qualifying transaction is subsequently consummated (which need not be the same qualifying transaction that was made, disclosed or publicly known prior to the termination of the merger agreement).

West will be entitled to receive the termination fee of $134 million from Parent if West terminates the merger agreement because (i) all of the conditions to closing (other than those conditions that by their nature are to be satisfied at the closing of the merger and that would be satisfied if there were a closing) have been satisfied or waived, (ii) West has notified Parent in writing at least three business days prior to such termination that West is irrevocably ready, willing and able to consummate the closing of the merger, and (iii) Parent and Sub have failed to consummate the closing of the merger within three business days after the date by which the closing of the merger is required to have occurred pursuant to the terms of the merger agreement.

Miscellaneous

Specific Performance

Subject to the terms and conditions set forth in the merger agreement, West, Sub and Parent are entitled to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement, in addition to any other remedy to which they are entitled at law or in equity.

West’s right to specific performance in connection with enforcing Parent’s obligation to cause the equity financing to be funded and to consummate the merger is subject to the following requirements: (1) all of the conditions applicable to Parent, Sub and West’s obligations to close the merger and all of the conditions applicable to Parent and Sub’s obligations to close the merger (described in the section of this proxy statement entitled “—Conditions to the Closing of the Merger,” beginning on page 95) have been satisfied or waived; (2) the debt financing has been fully funded or will be fully funded if the equity financing is funded at closing of the merger; (3) Parent fails to consummate the closing on the closing date (described in the section of this proxy

 

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statement entitled “—Closing; Effective Time of the Merger,” beginning on page 75); (4) West has irrevocably confirmed that if specific performance is granted and the equity financing and debt financing are funded, it would cause the closing of the merger to occur (and West has not revoked, withdrawn, modified or conditioned such irrevocable confirmation); and (5) Parent and Sub fail to complete the closing within three business days after delivery of such confirmation.

Amendment and Waiver of the Merger Agreement

The merger agreement may be amended by Parent, Sub and West at any time before or after receipt of the West stockholder approval. However, (a) after receipt of the West stockholder approval, there may be made no amendment that by law requires further approval by the stockholders of West without the further approval of such stockholders and (b) no amendment will be made to the merger agreement after the effective time of the merger. The merger agreement may not be amended, except by an instrument in writing signed by each of Parent, Sub and West. Except as required by law, no amendment of the merger agreement requires the approval of the stockholders of West.

At any time prior to the effective time of the merger, Parent and Sub, on the one hand, and West, on the other hand, may (a) extend the time for the performance of any of the obligations or other acts of the other, (b) waive any breach or inaccuracy of the representations and warranties of the other contained in the merger agreement or in any document delivered pursuant thereto and (c) waive compliance by the other with any of the covenants or conditions contained in the merger agreement. However, (i) after receipt of the West stockholder approval, there will be made no waiver that by law requires further approval by the stockholders of West without the further approval of such stockholders and (ii) no waiver may be made under the merger agreement after the effective time of the merger. Except as required by law, no extension or waiver by West will require the approval of the stockholders of West. Any such extension or waiver will be valid only if set forth in an instrument in writing signed by the party or parties to be bound by the merger agreement.

Governing Law

The merger agreement is governed by the laws of the State of Delaware, without giving effect to principles of conflicts of law thereof.

Waiver of Jury Trial

Each of the parties irrevocably waived any and all right to trial by jury in any claim, complaint, action or legal proceeding arising out of or relating to the merger agreement, the merger, the limited guarantee, the financing letters or the financing (including any such claim, complaint, action or legal proceeding involving or against any financing source).

Non-Recourse

Any claim, complaint, action or legal proceeding based upon, arising under, out or by reason of, or relating to, among other things, (1) the merger agreement or any of the other transaction documents or any other agreement referenced therein or the merger or any other transactions contemplated thereunder (including the financing); (2) the negotiation, execution or performance of the merger agreement or any of the other transaction documents or any other agreement referenced therein; (3) any breach or violation of the merger agreement or any of the other transaction documents or any other agreement referenced therein; or (4) any failure of the merger or any other transactions contemplated by the merger agreement or the other transaction documents to be consummated or any other agreement referenced therein (including the financing), in each case, may only be made against the persons that are parties to such agreement or other transaction document and in accordance with, and subject to the terms and conditions of, the merger or such other transaction document, as applicable.

 

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APPRAISAL RIGHTS

Under Delaware law, holders of shares of West common stock are entitled to appraisal rights in connection with the merger, provided that such holders meet all of the conditions set forth in Section 262 of the DGCL. If the merger is completed, holders of shares of West common stock immediately prior to the effective time of the merger who did not vote in favor of the merger and who otherwise complied with the applicable statutory procedures under Section 262 of the DGCL will be entitled to appraisal rights in connection with the merger under Section 262 of the DGCL.

The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 of the DGCL, which is attached to this proxy statement as Annex  C . All references in Section 262 of the DGCL and in this summary to a “stockholder” are to the record holder of shares of West common stock immediately prior to the effective time of the merger as to which appraisal rights are asserted. A person having a beneficial interest in shares held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. Stockholders should carefully review the full text of Section 262 of the DGCL as well as the information discussed below.

Under the DGCL, if the merger is effected, holders of shares of West common stock immediately prior to the effective time of the merger who (i) did not cast their vote in favor of the merger; (ii) follow the procedures set forth in Section 262 of the DGCL; and (iii) do not thereafter withdraw their demand for appraisal of such shares or otherwise lose their appraisal rights, in each case, in accordance with the DGCL, will be entitled to have such shares appraised by the Delaware Court of Chancery and to receive payment of the “fair value” of such shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, as determined by such court, together with interest, if any, to be paid upon the amount determined to be the fair value. The “fair value” could be greater than, less than or the same as the merger consideration.

Under Section 262 of the DGCL, West is required not less than 20 days before the special meeting to vote on the merger to notify each of the holders of any class or series of its stock who are entitled to appraisal rights of the approval of the merger and that appraisal rights are available for any or all of such shares, and is required to include in such notice a copy of Section 262. This proxy statement constitutes a formal notice of appraisal rights under Section  262 of the DGCL. Any holder of shares of West common stock who wishes to exercise such appraisal rights, or who wishes to preserve such holder’s right to do so, should review the following discussion and Annex  C carefully because failure to timely and properly comply with the procedures specified will result in the loss of appraisal rights under the DGCL.

Any stockholder wishing to exercise appraisal rights is urged to consult legal counsel before attempting to exercise such rights.

If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 set forth in Annex  C to this proxy statement and consult your legal advisor. If you fail to timely and properly comply with the requirements of Section 262, your appraisal rights may be lost. To exercise appraisal rights with respect to your shares of West common stock, you must:

 

    NOT vote your shares of West common stock in favor of the merger;

 

    deliver to West a written demand for appraisal of your shares before the taking of the vote on the proposal to adopt the merger agreement at the special meeting, as described further below under “—Written Demand by the Record Holder,” beginning on page 102;

 

    continuously hold your shares of West common stock through the date the merger is completed; and

 

    otherwise comply with the procedures set forth in Section 262.

 

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Written Demand by the Record Holder

All written demands for appraisal should be addressed to West Corporation, 11808 Miracle Hills Drive, Omaha, Nebraska 68154, Attention: General Counsel. Such demand will be sufficient if it reasonably informs West of the identity of the stockholder and that the stockholder intends thereby to demand appraisal of such stockholder’s shares. Under Section 262 of the DGCL, a proxy or vote against the merger does not constitute such a demand.

The written demand for appraisal must be executed by or for the record holder of shares, fully and correctly, as such holder’s name appears on the certificate(s) for the shares of West common stock owned by such holder. If the shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of the demand must be made in that capacity, and if the shares are owned of record by more than one person, such as in a joint tenancy or a tenancy in common, the demand must be executed by or for all joint owners. An authorized agent, including one of two or more joint owners, may execute the demand for appraisal for a holder of record. However, the agent must identify the record owner(s) and expressly disclose the fact that, in executing the demand, the agent is acting as agent for the record owner(s).

A beneficial owner of shares of West common stock held in “street name” who wishes to exercise appraisal rights should take such actions as may be necessary to ensure that a timely and proper demand for appraisal is made by the record holder of the shares. If the shares are held through a brokerage firm, bank or other nominee who in turn holds the shares through a central securities depository nominee, such as Cede & Co., a demand for appraisal of such shares must be made by or on behalf of the depository nominee and must identify the depository nominee as the record holder. Any beneficial owner who wishes to exercise appraisal rights and holds shares through a nominee holder is responsible for ensuring that the demand for appraisal is timely made by the record holder. The beneficial holder of the shares should instruct the nominee holder that the demand for appraisal should be made by the record holder of the shares, which may be a central securities depository nominee if the shares have been so deposited.

Filing a Petition for Appraisal

Within 120 days after the effective time of the merger, but not thereafter, the surviving corporation (which, in this case, will be West), or any holder of shares of West common stock who has complied with Section 262 of the DGCL and is entitled to appraisal rights under Section 262, may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all holders who did not adopt the merger and demanded appraisal of such shares. If no such petition is filed within that 120-day period, appraisal rights will be lost for all holders of shares who had previously demanded appraisal of their shares. West is under no obligation to, and has no present intention to, file a petition, and holders should not assume that West will file a petition or that it will initiate any negotiations with respect to the fair value of shares of West common stock. Accordingly, it is the obligation of the holders of shares to initiate all necessary action to perfect their appraisal rights in respect of the shares within the period prescribed in Section 262 of the DGCL.

Within 120 days after the effective time of the merger, any holder of shares of West common stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the surviving corporation a statement setting forth the aggregate number of shares not voted in favor of the merger and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such statement must be mailed within 10 days after a written request therefor has been received by the surviving corporation or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. Notwithstanding the requirement that a demand for appraisal must be made by or on behalf of the record owner of shares, a person who is the beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person, and as to which demand has been properly made and not effectively withdrawn, may, in such person’s own name, file a petition for appraisal or request from the surviving corporation the statement described in this paragraph.

 

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Upon the filing of such petition by any such holder of shares, service of a copy thereof must be made upon the surviving corporation, which will then be obligated within 20 days after such service to file with the Register in Chancery of the Court of Chancery of the State of Delaware (which we refer to as the “ Delaware Register in Chancery ”) a duly verified list (which we refer to as the “ verified list ”) containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares has not been reached. Upon the filing of any such petition, the Delaware Court of Chancery may order that notice of the time and place fixed for the hearing on the petition be mailed to the surviving corporation and all of the stockholders shown on the verified list. Such notice will also be published at least one week before the day of the hearing in a newspaper of general circulation published in the City of Wilmington, Delaware or in another publication determined by the Delaware Court of Chancery. The costs of these notices are borne by the surviving corporation.

After notice to the stockholders as required by the Delaware Court of Chancery, the Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 of the DGCL and who have become entitled to appraisal rights thereunder. The Court of Chancery may require the stockholders who demanded payment for their shares of West common stock to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency of the appraisal proceeding, and, if any stockholder fails to comply with the direction, the Court of Chancery may dismiss the proceedings as to that stockholder. If immediately before the merger or consolidation, the shares of the class or series of stock of the constituent corporation as to which appraisal rights are available were listed on a national securities exchange, the Court of Chancery must dismiss the proceedings as to all holders of such shares who are otherwise entitled to appraisal rights unless the total number of shares entitled to appraisal exceeds 1% of the outstanding shares of the class or series eligible for appraisal, the value of the consideration provided in the merger or consolidation for such total number of shares exceeds $1 million, or the merger was approved pursuant to § 253 or § 267 of the DGCL.

Determination of Fair Value

After the Delaware Court of Chancery determines which stockholders are entitled to appraisal, the appraisal proceeding will be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through the appraisal proceeding, the Court of Chancery will determine the fair value of the shares, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. Unless the Court of Chancery in its discretion determines otherwise for good cause shown, unless otherwise provided, interest from the effective time of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving corporation may pay to each stockholder entitled to appraisal an amount in cash, in which case interest will accrue thereafter only upon the sum of the difference, if any, between the amount paid and the fair value of the shares as determined by the Court, and interest accrued, unless paid at that time.

In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc. , the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods that are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “fair price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the Court of Chancery must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger[.]” In Cede  & Co. v. Technicolor, Inc., the

 

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Delaware Supreme Court stated that such exclusion is a “narrow exclusion that does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger , the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Stockholders considering appraisal should be aware that the fair value of their shares of West common stock as so determined could be more than, the same as or less than the merger consideration and that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the merger, is not an opinion as to, and does not otherwise address, “fair value” under Section 262 of the DGCL. Although West believes that the merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery. Neither Parent nor West anticipates offering more than the merger consideration to any stockholder exercising appraisal rights, and Parent and West reserve the right to assert, in any appraisal proceeding, that for purposes of Section 262 of the DGCL, the fair value of a share of West common stock is less than the merger consideration.

Upon application by the surviving corporation or by any holder of shares of West common stock entitled to participate in the appraisal proceeding, the Delaware Court of Chancery may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any holder of shares of West common stock whose name appears on the verified list and, if such shares are represented by certificates and if so required, who has submitted such stockholder’s certificates of stock to the Delaware Register in Chancery, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights. The Court of Chancery will direct the payment of the fair value of the shares of West common stock, together with interest, if any, by the surviving corporation to the stockholders entitled thereto. Payment will be so made to each such stockholder upon the surrender to the surviving corporation of such stockholder’s certificates. The Court of Chancery’s decree may be enforced as other decrees in such Court may be enforced.

The costs of the action (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Court of Chancery deems equitable. Upon application of a stockholder, the Court of Chancery may order all or a portion of the expenses incurred by a stockholder in connection with an appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts utilized in the appraisal proceeding, to be charged pro  rata against the value of all the shares of West common stock entitled to appraisal. In the absence of an order, each party bears its own expenses.

Any stockholder who has duly demanded and perfected appraisal rights for shares of West common stock in compliance with Section 262 of the DGCL will not, after the effective time of the merger, be entitled to vote such shares for any purpose or be entitled to the payment of dividends or other distributions thereon, except dividends or other distributions payable to holders of record of shares of West common stock as of a date or time prior to the effective time of the merger.

At any time within 60 days after the effective time of the merger, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party will have the right to withdraw such stockholder’s demand for appraisal and to accept the terms offered in the merger; after this period, the stockholder may withdraw such stockholder’s demand for appraisal only with the consent of West. If no petition for appraisal is filed with the Delaware Court of Chancery within 120 days after the effective time of the merger, stockholders’ rights to appraisal shall cease, and all holders of shares of West common stock will be entitled to receive the merger consideration. Inasmuch as West has no obligation to file such a petition and has no present intention to do so, any holder of shares of West common stock who desires such a petition to be filed is advised to file it on a timely basis. Any stockholder may withdraw such stockholder’s demand for appraisal by delivering to West a written withdrawal of its demand for appraisal and acceptance of the merger consideration, except that

 

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(i) any such attempt to withdraw made more than 60 days after the effective time of the merger will require written approval of West and (ii) no appraisal proceeding in the Delaware Court of Chancery shall be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just. Notwithstanding the foregoing, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw such stockholder’s demand for appraisal and accept the terms offered upon the merger within 60 days after the effective time of the merger.

If you wish to exercise your appraisal rights, you must not vote your shares of West common stock in favor of the merger, and you must comply with the procedures set forth in Section 262 of the DGCL. If you fail to take any required step in connection with the exercise of appraisal rights, it will result in the termination or waiver of your appraisal rights.

The foregoing summary of the rights of West stockholders to seek appraisal rights under Delaware law does not purport to be a complete statement of the procedures to be followed by West stockholders desiring to exercise any appraisal rights available thereunder and is qualified in its entirety by reference to Section 262 of the DGCL. The proper exercise of appraisal rights requires adherence to the applicable provisions of the DGCL. A copy of Section 262 of the DGCL is included as Annex  C to this proxy statement.

 

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MARKET PRICE AND DIVIDEND DATA

West common stock is traded on the Nasdaq under the symbol “ WSTC .” As of the close of business on [●], 2017, the latest practicable trading day before the filing of this proxy statement, there were [●] shares of West common stock outstanding and entitled to vote, held by approximately [●] holders of record of West common stock. The following table presents the high and low sale prices of West common stock for the period indicated in published financial sources and the dividend declared per share during such period:

 

Quarter

   High      Low      Dividend  

2014

        

First Quarter

   $ 26.24      $ 21.43      $ 0.225  

Second Quarter

     27.72        23.00        0.225  

Third Quarter

     31.54        24.93        0.225  

Fourth Quarter

     34.12        26.82        0.225  

2015

        

First Quarter

     35.98        30.45        0.225  

Second Quarter

     33.91        30.00        0.225  

Third Quarter

     30.90        22.26        0.225  

Fourth Quarter

     26.52        19.64        0.225  

2016

        

First Quarter

     23.90        17.26        0.225  

Second Quarter

     23.42        18.55        0.225  

Third Quarter

     24.36        18.62        0.225  

Fourth Quarter

     25.85        19.64        0.225  

2017

        

First Quarter

     25.46        22.48        0.225  

Second Quarter (through [●], 2017)

     [●]        [●]        —    

The following table presents the closing per share sales price of West common stock, as reported on the Nasdaq on November 1, 2016, the last full trading day prior to West’s post-market close public announcement that it was exploring potential strategic alternatives, on May 9, 2017, the last full trading day before the public announcement of the merger, and on [●], 2017, the latest practicable trading day before the filing of this proxy statement:

 

Date

   Closing per
Share Price
 

November 1, 2016

   $ 20.01  

May 9, 2017

   $ 24.11  

[●], 2017

   $ [●]  

You are encouraged to obtain current market prices of West common stock in connection with voting your shares. Following the merger, there will be no further market for West common stock, and West common stock will be delisted from the Nasdaq and deregistered under the Exchange Act.

The merger agreement prohibits us declaring or paying any dividend or other distribution with respect to the capital stock of West, whether payable in cash, stock, property or a combination thereof. On May 9, 2017, we announced the payment of future dividends had been suspended.

 

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STOCK OWNERSHIP

We have listed below, as of June 9, 2017 (except as otherwise indicated), the beneficial ownership of West common stock by (a) each person or group who we know beneficially owns more than 5% of our common stock, (b) each member of the Board, (c) each of our “named executive officers,” and (d) all members of the Board and our executive officers as a group. Beneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Shares of common stock subject to options currently exercisable or exercisable within 60 days of June 9, 2017 are deemed to be outstanding and beneficially owned by the person and any group of which that person is a member, but are not deemed outstanding for the purpose of computing the percentage of beneficial ownership for any other person. Except as noted by footnote, and subject to community property laws where applicable, we believe based on the information provided to us that the persons and entities named in the table below have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them.

Except as noted by footnote, all stockholdings are as of June 9, 2017 and the percentage of beneficial ownership is based on 85,154,529 shares of common stock outstanding as of June 9, 2017.

 

Name and Address of
Beneficial Owners(1)

   Shares
Beneficially
Owned
     Percent
of
Common Shares
 

5% Stockholders

     

Thomas H. Lee Partners Funds (2)

     18,176,113        21.3

Gary L. West (3)

     8,452,009        9.9

Mary E. West (4)

     8,340,935        9.8

The Vanguard Group (5)

     5,126,867        6.0

Quadrangle Funds (6)

     3,781,961        4.4

Directors and Named Executive Officers

     

Lee Adrean

     19,796        *  

Thomas B. Barker (7)

     2,163,876        2.5

Ronald R. Beaumont (8)

     121,775        *  

Nancee R. Berger (9)

     442,816        *  

Donald M. Casey

     8,559        *  

Anthony J. DiNovi (10)

     —          —    

J. Scott Etzler (11)

     177,581        *  

Paul R. Garcia

     28,384        *  

Laura A. Grattan (10)

     —          —    

Jeanette A. Horan

     8,570        *  

Michael A. Huber

     —          —    

Jan D. Madsen

     73,258        *  

Diane E. Offereins

     7,793        *  

Gregory T. Sloma

     24,984        *  

All directors and executive officers as a group (14 persons) (12)

     4,020,169        4.7

 

* Less than 1%
(1) The address of each of our executive officers and directors is c/o West Corporation, 11808 Miracle Hills Drive, Omaha, Nebraska 68154.
(2)

As reported on a Schedule 13G/A filed with the SEC in February 2016 on behalf of (i) Thomas H. Lee Advisors, LLC; (ii) Thomas H. Lee Equity Fund VI, L.P.; (iii) Thomas H. Lee Parallel Fund VI, L.P.; (iv) Thomas H. Lee Parallel (DT) Fund VI, L.P.; (v) THL Coinvestment Partners, L.P.; (vii) THL Equity Fund VI Investors (West), L.P.; (vii) THL Equity Fund VI Investors (West) HL, L.P.; (viii) Putnam Investment Holdings, LLC and (ix) Putnam Investments Employees’ Securities Company III LLC (collectively, the “Thomas H. Lee Partners Funds”). Includes 7,532,661 shares of common stock owned by Thomas H. Lee Equity Fund VI, L.P.; 5,100,718 shares of common stock owned by Thomas H. Lee Parallel Fund VI, L.P.;

 

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  890,993 shares of common stock owned by Thomas H. Lee Parallel (DT) Fund VI, L.P.; 13,820 shares of common stock owned by THL Coinvestment Partners, L.P.; 3,955,934 shares of common stock owned by THL Equity Fund VI Investors (West), L.P.; and 605,113 shares of common stock owned by THL Equity Fund VI Investors (West) HL, L.P. (collectively, the “THL Funds”); 38,444 shares of common stock owned by Putnam Investment Holdings, LLC; and 38,430 shares of common stock owned by Putnam Investments Employees’ Securities Company III LLC (collectively, the “Putnam Funds”). The general partner of the THL Funds, other than THL Coinvestment Partners, L.P., is THL Equity Advisors VI, LLC, whose managing member is Thomas H. Lee Partners, L.P., whose general partner is Thomas H. Lee Advisors, LLC, whose managing member is THL Holdco, LLC. The general partner of THL Coinvestment Partners, L.P. is Thomas H. Lee Partners, L.P. The Putnam Funds are co-investment entities of the THL Funds and are contractually obligated to co-invest (and dispose of securities) alongside certain of the THL Funds on a pro rata basis. Voting and investment determinations with respect to the shares held or controlled by the THL Funds are made by the private equity management committee of THL Holdco, LLC (the “THL Committee”). Todd M. Abbrecht, Anthony J. DiNovi, Thomas M. Hagerty, Soren L. Oberg, Scott M. Sperling and Kent R. Weldon are the members of the THL Committee, and as such may be deemed to share beneficial ownership of the shares held or controlled by the THL Funds. Each of them disclaims beneficial ownership of such securities. Each of Mr. DiNovi and Ms. Grattan is a managing director of THL. Each of them disclaim beneficial ownership of the securities held or controlled by the THL Funds. Their addresses are c/o Thomas H. Lee Partners, L.P., 100 Federal Street, 35th Floor, Boston, MA 02110. Putnam Investments, LLC is the managing member of Putnam Investment Holdings, LLC (which we refer to as “Holdings”), which is in turn is the managing member of Putnam Investments Employees’ Securities Company III LLC (which we refer to as “ESC III”). Holdings disclaims any beneficial ownership of any shares held by ESC III. Putnam Investments LLC disclaims beneficial ownership of any shares held by the Putnam Funds. The Putnam Funds have an address c/o Putnam Investment, Inc., 1 Post Office Square, Boston, MA 02109.
(3) As reported on a Schedule 13D filed with the SEC in May 2017 on behalf of Gary L. West and Mary E. West. Gary L. West has sole voting power with respect to 8,342,535 shares of common stock; shared voting power with respect to 109,474 shares of common stock; sole dispositive power with respect to 8,342,535 shares of common stock and shared dispositive power with respect to 109,474 shares of common stock. Includes 109,474 shares of common stock owned by West Investment Holdings, LLC; 2,465,432 shares of common stock owned by Gary West CRT1 LLC; 2,080,676 shares of common stock owned by Gary West CRT2 LLC; 1,689,077 shares of common stock owned by Gary West CRT3 LLC; 1,162,681 shares of common stock owned by Gary West CRT4 LLC; 833,594 shares of common stock owned by Gary West CRT5 LLC and 17,325 shares of common stock owned in a rollover individual rollover account, the Gary West IRA. 93,750 shares of common stock are owned by the Gary and Mary West Health Institute (the “Institute”), a non-profit organization, which has appointed Mr. West as sole representative and proxy with respect to its shares. Mr. West disclaims any beneficial ownership of any shares held by the Institute. The address for the Institute is 10350 N. Torrey Pines Rd., La Jolla, CA 92037. The address for each of Gary West CRT1 LLC, Gary West CRT2 LLC, Gary West CRT3 LLC, Gary West CRT4 LLC, Gary West CRT5 LLC and West Investment Holdings, LLC is c/o West Corporation, 11808 Miracle Hills Drive, Omaha, NE 68154.
(4) As reported on a Schedule 13D filed with the SEC in May 2017 on behalf of Gary L. West and Mary E. West. Mary E. West has sole voting power with respect to 8,231,461 shares of common stock; shared voting power with respect to 109,474 shares of common stock; sole dispositive power with respect to 8,231,461 shares of common stock and shared dispositive power with respect to 109,474 shares of common stock. Includes 109,474 shares of common stock owned by West Investment Holdings, LLC; 2,465,434 shares of common stock owned by Mary West CRT1 LLC; 2,080,675 shares of common stock owned by Mary West CRT2 LLC; 1,689,076 shares of common stock owned by Mary West CRT3 LLC; 1,162,681 shares of common stock owned by Mary West CRT4 LLC; and 833,595 shares of common stock owned by Mary West CRT5 LLC. The address for each of Mary West CRT1 LLC, Mary West CRT2 LLC, Mary West CRT3 LLC, Mary West CRT4 LLC, Mary West CRT5 LLC and West Investment Holdings, LLC is c/o West Corporation, 11808 Miracle Hills Drive, Omaha, NE 68154.

 

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(5) As reported on a Schedule 13G filed with the SEC in February 2017 on behalf of The Vanguard Group—23-1945930 (the “Vanguard Group”). The Vanguard Group has sole voting power with respect to 57,817 shares of common stock; shared voting power with respect to 5,991 shares of common stock; sole dispositive power with respect to 5,065,657 shares of common stock and shared dispositive power with respect to 61,210 shares of common stock. The Vanguard Group, with principal offices at 100 Vanguard Blvd. Malvern, Pennsylvania, 19355, is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 and is the beneficial owner of shares as a result of acting as an investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940.
(6) Includes 3,309,900 shares of common stock owned by Quadrangle Capital Partners II LP; 88,797 shares of common stock owned by Quadrangle Select Partners II LP; and 383,264 shares of common stock owned by Quadrangle Capital Partners II-A LP (collectively, the “Quadrangle Funds”). The Quadrangle Funds’ general partner is Quadrangle GP Investors II LP, whose general partner is Quadrangle GP Investors II LLC. Each of QCP GP Investors II LLC and Quadrangle GP Investors II LP may be deemed to be the beneficial owner of the Shares held by the Quadrangle Funds. Each of the Quadrangle Funds has an address c/o Quadrangle Group LLC, 1271 Avenue of the Americas, Suite 43A, New York, NY 10020. The managing member of QCP GP Investors II LLC is Quadrangle Holdings LLC, a Delaware limited liability company, and the coordinating managing member of Quadrangle Holdings LLC is Michael Huber. Voting or investment control over securities that the Quadrangle Funds own are acted upon by the investment committee of QCP GP Investors II LLC as general partner of Quadrangle GP Investors II LP, the general partner of the Quadrangle Funds. Each of the two members of the investment committee of QCP GP Investors II LLC, Brian Bytof and Michael A. Huber, disclaims ownership of such securities held or controlled by the Quadrangle Funds, QCP GP Investors II LLC and Quadrangle GP Investors II LP. The information presented in this table is based solely on a review of the Schedule 13Gs filed by the Quadrangle Funds in January 2017.
(7) Includes 770,624 shares subject to options.
(8) Includes 51,249 shares subject to options.
(9) Includes 125,000 shares subject to options and 152,898 shares held by family trusts.
(10) Each of Mr. DiNovi and Ms. Grattan is a managing director of THL. Each of them disclaim beneficial ownership of the securities held or controlled by the THL Funds. Their addresses are c/o Thomas H. Lee Partners, L.P., 100 Federal Street, 35th Floor, Boston, MA 02110.
(11) Includes 86,875 shares subject to options.
(12) Includes 1,327,498 shares subject to options.

The table above does not include 1,525,885 shares notionally granted under our Nonqualified Deferred Compensation Plan at June 2, 2017. These notional shares have not been issued, do not carry voting rights and cannot be sold until the end of the deferral periods unless there is an early distribution event.

 

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THE VOTING AGREEMENTS

The summary of the material provisions of the voting agreements set forth below and elsewhere in this proxy statement is qualified in its entirety by reference to the voting agreements, copies of which are attached to this proxy statement as Annex D and which are incorporated by reference in this proxy statement. The rights and obligations of the parties are governed by the express terms and conditions of the voting agreements and not by this discussion, which is summary by nature. This summary does not purport to be complete and may not contain all of the information about the voting agreements that is important to you. We encourage you to read the voting agreements carefully in their entirety, as well as this proxy statement and any documents incorporated by reference herein, before making any decisions regarding the merger.

In connection with the execution of the merger agreement, Parent and Sub entered into voting agreements with certain affiliates of THL, certain affiliates of Quadrangle, Gary L. West and Mary E. West (which we refer to, collectively, as the “ covered stockholders ” and each a “ covered stockholder ”), who in the aggregate beneficially owned approximately [●]% of West’s outstanding common stock as of the close of business on the record date.

Voting Provisions

Under the voting agreements, the covered stockholders agreed during the term of the voting agreement to (A) vote (or cause to be voted) all of their shares of West common stock as of the applicable record date so that all of such shares are duly counted for purposes of determining whether a quorum is present at the special meeting and (B) vote (or cause to be voted) all of their shares of West common stock as of the applicable record date (1) for the approval and adoption of the merger agreement and the approval of the transactions contemplated thereby, including the merger; (2) in favor of any proposal to adjourn or postpone the special meeting to a later date if there is not a sufficient number of votes to adopt the merger agreement; and (3) against (a) any action or proposal in favor of a competing proposal (without regard to the terms of such competing proposal) and (b) any action, proposal, transaction or agreement that would prevent or materially delay or would reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by the merger agreement, including the merger.

Restrictions on Transfer

Pursuant to the voting agreements, the covered stockholders agreed that, during the term of the agreement, they will not (1) sell, transfer, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding providing for any of the foregoing with respect to any of their shares of West common stock (which we refer to as a “ transfer ”); (2) deposit any of their shares of West common stock into a voting trust or enter into a voting agreement or grant any proxy or power of attorney with respect thereto that is inconsistent with the voting agreement; or (3) commit or agree to take any of the actions prohibited by the foregoing clause (1) or (2), in each case, other than any transfer to any person who agrees in writing to be bound by the applicable terms of the voting agreement, any transfer with Parent’s prior written consent and any transfer after the receipt of the West stockholder approval.

Non-Solicitation

Pursuant to the voting agreements, the covered stockholders agreed, and agreed to cause each of their controlled affiliates not to, during the term of the voting agreement (1) initiate, solicit or knowingly encourage or facilitate any inquiry, proposal, indication of interest or offer which constitutes, or would reasonably be expected to lead to, the submission of any competing proposal, (2) furnish any non-public information regarding West or any of its subsidiaries to any third person in connection with or in response to a competing proposal, (3) initiate, solicit, knowingly encourage or facilitate, or participate in any discussions or negotiations with any third person with respect to, any competing proposal, (4) approve or recommend, or propose to approve or recommend, a

 

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competing proposal, (5) enter into any contract with any person that prohibits West from complying with its non-solicitation obligations under the merger agreement (without giving effect to any amendment or modification of such provision after the date of the voting agreements) or (6) agree to do any of the foregoing; provided, that each covered stockholder or affiliate thereof may participate in discussions or negotiations with any person regarding a competing proposal if West is permitted to engage in discussions or negotiations with such person regarding such competing proposal pursuant to the merger agreement (without giving effect to any amendment or modification of such provision after the date of the voting agreements).

Termination

The voting agreements terminate upon the earliest of: (i) the mutual written agreement of the parties thereto; (ii) the consummation of the merger; (iii) the entry without the prior written consent of the covered stockholders into any amendment, modification or waiver of any provision of the merger agreement (A) that reduces the amount, or modifies the form, of the merger consideration payable to any of the West stockholders (other than adjustments in accordance with the terms of the merger agreement), (B) that amends or modifies any of the closing conditions in a manner that would reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by the merger agreement, including the merger, or (C) that is in any way material and adverse, or adverse from a financial standpoint, to any of the covered stockholders; (iv) the termination of the merger agreement pursuant to and in compliance with the terms therein; (v) the Board making a change of Company recommendation (as such term is defined under the section entitled “The Agreement and Plan of Merger—Obligation of the Board of Directors with Respect to Its Recommendation,” beginning on page 87) in accordance with the terms of the merger agreement in response to a competing proposal; and (vi) the Board making a change of Company recommendation in accordance with the terms of the merger agreement in response to an intervening event.

 

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OTHER MATTERS

Other Matters for Action at the Special Meeting

As of the date of this proxy statement, the Board knows of no matters that will be presented for consideration at the special meeting other than as described in this proxy statement.

 

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FUTURE STOCKHOLDER PROPOSALS

It is expected that West will not hold its 2018 annual meeting of stockholders unless the merger is not completed. If the merger is not completed, West’s stockholders will continue to be entitled to attend and participate in West stockholder meetings.

Proposals that stockholders wish to submit for inclusion in our proxy statement for our 2018 annual meeting of stockholders pursuant to Rule 14a-8 under the Exchange Act must be received by the Company’s Secretary at West Corporation, 11808 Miracle Hills Drive, Omaha, Nebraska 68154 no later than December 8, 2017, unless the date of our 2018 annual meeting is more than 30 days before or after May 16, 2018, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials for our 2018 annual meeting. Any stockholder proposal submitted for inclusion must be eligible for inclusion in our proxy statement in accordance with the rules and regulations promulgated by the SEC.

With respect to proposals submitted by a stockholder other than for inclusion in our proxy statement for our 2018 annual meeting, timely notice of any stockholder proposal must be received by us in accordance with our Third Amended and Restated Bylaws no earlier than January 16, 2018 nor later than February 15, 2018, unless the date of our 2018 annual meeting is more than 30 days before or 60 days after May 16, 2018, in which case notice by the stockholder to be timely must be received no earlier than 120 days prior to the date of the 2018 annual meeting nor later than the later of (i) 90 days prior to the 2018 annual meeting and (ii) 10 days after the earlier of (A) the day on which notice of the date of the 2018 annual meeting was mailed or (B) the day on which public disclosure of the date of the 2018 annual meeting was made. Such notice must contain the information required by our Third Amended and Restated Bylaws.

 

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HOUSEHOLDING OF PROXY MATERIAL

If you and other residents at your mailing address own shares of West common stock in “street name,” your bank, broker, trust or other nominee may have sent you a notice that your household will receive only one annual report and proxy statement or notice of Internet availability of proxy for each company in which you hold stock through that broker or bank. This practice, known as “householding,” is designed to reduce our printing and postage costs. If you did not respond that you did not want to participate in householding, the bank, broker, trust or other nominee will assume that you have consented and will send only one copy of our annual report and proxy statement or notice of Internet availability of proxy to your address. You may revoke your consent to householding at any time by sending your name, the name of your brokerage firm and your account number to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. The revocation of your consent to householding will be effective 30 days following its receipt. In any event, if you did not receive an individual copy of this proxy statement or if you wish to receive individual copies of our proxy statements, annual reports or notices of Internet availability of proxy, as applicable, for future meetings, we will send a copy to you if you write to West Corporation, Attn. Investor Relations, 11808 Miracle Hills Drive, Omaha, Nebraska 68154 or request materials from our website at www.west.com .

If you and other residents at your mailing address are registered stockholders and you received more than one copy of this proxy statement, but you wish to receive only one copy of our annual report and proxy statement or notice of Internet availability of proxy, you may request, in writing, that West cease these duplicate mailings. To request the elimination of duplicate copies, please write to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

 

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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at the SEC’s public reference room located at 100 F Street, NE, Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room. Our SEC filings are also available to the public at the SEC’s website at www.sec.gov .

Statements contained in this proxy statement, or in any document incorporated in this proxy statement by reference, regarding the contents of any contract or other document, are not necessarily complete, and each such statement is qualified in its entirety by reference to that contract or other document filed as an exhibit with the SEC. The SEC allows us to “incorporate by reference” into this proxy statement documents we file with the SEC. This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this proxy statement. This proxy statement and the information that we later file with the SEC may update and supersede the information incorporated by reference. Similarly, the information that we later file with the SEC may update and supersede the information in this proxy statement. We also incorporate by reference the documents listed below and any documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy statement and before the date of the special meeting (provided that we are not incorporating by reference any information furnished to, but not filed with, the SEC):

 

    West’s Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 16, 2017;

 

    West’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed on May 10, 2017;

 

    West’s Definitive Proxy Statement for our 2017 annual meeting of stockholders, filed on April 6, 2017; and

 

    West’s Current Reports on Form 8-K filed on March 15, 2017, March 31, 2017, May 11, 2017 and May 19, 2017.

Copies of any of the documents we file with the SEC may be obtained free of charge either on our website, by contacting our Corporate Secretary at West Corporation, 11808 Miracle Hills Drive, Omaha, Nebraska 68154, Attention: Corporate Secretary or by calling (402) 963-1500.

If you would like to request documents from us, please do so at least five business days before the date of the special meeting in order to receive timely delivery of those documents prior to the special meeting.

THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED [●], 2017. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS SHALL NOT CREATE ANY IMPLICATION TO THE CONTRARY.

 

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ANNEX A

EXECUTION VERSION

 

AGREEMENT AND PLAN OF MERGER

among

MOUNT OLYMPUS HOLDINGS, INC.,

OLYMPUS MERGER SUB, INC.

and

WEST CORPORATION

Dated as of May 9, 2017

 

 

 


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TABLE OF CONTENTS

ARTICLE I

THE MERGER

 

Section 1.01

    

The Merger

     A-1  

Section 1.02

    

Closing

     A-2  

Section 1.03

    

Effective Time

     A-2  

Section 1.04

    

Organizational Documents, Directors and Officers of the Surviving Corporation

     A-2  
ARTICLE II  
EFFECT OF THE MERGER ON CAPITAL STOCK  

Section 2.01

    

Conversion of Securities

     A-3  

Section 2.02

    

Exchange of Certificates; Payment for Shares

     A-3  

Section 2.03

    

Treatment of Company Options, Stock Units, Restricted Stock and Equity Plans

     A-5  

Section 2.04

    

Dissenting Shares

     A-6  

Section 2.05

    

Withholding Rights

     A-7  

Section 2.06

    

Further Actions

     A-7  
ARTICLE III  
REPRESENTATIONS AND WARRANTIES OF THE COMPANY  

Section 3.01

    

Organization and Qualification; Subsidiaries

     A-7  

Section 3.02

    

Capitalization

     A-8  

Section 3.03

    

Authority

     A-9  

Section 3.04

    

No Conflict; Required Filings and Consents

     A-9  

Section 3.05

    

Permits; Compliance with Laws

     A-10  

Section 3.06

    

Company SEC Documents; Financial Statements

     A-11  

Section 3.07

    

Information Supplied

     A-12  

Section 3.08

    

Internal Controls and Disclosure Controls

     A-12  

Section 3.09

    

Absence of Certain Changes

     A-12  

Section 3.10