Xerox Corporation Affiliated Computer Services, Inc. MERGER PROPOSAL PDF
Preview Xerox Corporation Affiliated Computer Services, Inc. MERGER PROPOSAL
XeroxCorporation AffiliatedComputerServices,Inc. MERGERPROPOSAL—YOURVOTEISVERYIMPORTANT December28,2009 DearStockholders: XeroxCorporationandAffiliatedComputerServices,Inc.haveenteredintoamergeragreementpursuanttowhich XeroxwillacquireACS.Intheproposedmerger,eachoutstandingshareofACSClassAcommonstockwillbeconverted intotherighttoreceive4.935sharesofXeroxcommonstockand$18.60incash.EachshareofACSClassBcommonstock willbeconvertedintotherighttoreceive4.935sharesofXeroxcommonstock,$18.60incashandafractionofashareofa newseriesofpreferredstocktobeissuedbyXeroxanddesignatedasXeroxCorporationSeriesAConvertiblePerpetual PreferredStock.Uponcompletionofthemerger,XeroxandACSexpectthatformerACSstockholderswillown approximately36%oftheoutstandingsharesofXeroxcommonstockandformerXeroxstockholderswillown approximately64%oftheoutstandingsharesofXeroxcommonstock,basedonthenumberofsharesofXeroxcommon stockissuedandoutstandingasofSeptember27,2009,thedateoftheexecutionofthemergeragreement. TheboardofdirectorsofXeroxhasdeterminedthatthemergeragreementandthemergerareadvisableandinthebest interestsofXeroxanditsstockholdersandhasapprovedthemergeragreementandthemerger.Theboardofdirectorsof ACS(otherthanMr.DarwinDeason,whowasrecusedfromthemeeting),actingupontheunanimousrecommendationof thestrategictransactioncommitteeoftheACSboardofdirectors,hasdeterminedthatthemergeragreementandthemerger areadvisableandinthebestinterestsofACSanditsstockholdersandhasapprovedthemergeragreementandthemerger. THEBOARDOFDIRECTORSOFXEROXUNANIMOUSLYRECOMMENDSTHATXEROX STOCKHOLDERSVOTE“FOR”THEPROPOSALTOISSUESHARESOFXEROXCOMMONSTOCK REQUIREDTOBEISSUEDPURSUANTTOTHEMERGERAGREEMENT.THEBOARDOFDIRECTORSOF ACS(OTHERTHANMR.DARWINDEASON,WHOWASRECUSEDFROMTHEMEETING),ACTINGUPON THEUNANIMOUSRECOMMENDATIONOFTHESTRATEGICTRANSACTIONCOMMITTEEOFTHEACS BOARDOFDIRECTORS,UNANIMOUSLYRECOMMENDSTHATACSSTOCKHOLDERSVOTE“FOR”THE PROPOSALTOADOPTTHEMERGERAGREEMENT. WecannotcompletethemergerunlesstheissuanceofsharesofXeroxcommonstockrequiredtobeissuedpursuantto themergeragreementisapprovedbytheaffirmativevoteofholdersofamajorityinvotingpowerofthesharesofXerox commonstockrepresented(whetherinpersonorbyproxy)attheXeroxspecialmeeting(providedthatatleastamajorityin votingpowerofthesharesofXeroxcommonstockoutstandingarerepresentedinpersonorbyproxyatsuchmeetingorany adjournmentorpostponementthereof)oranyadjournmentorpostponementthereofandthemergeragreementisadoptedby theaffirmativevoteofholdersofamajorityinvotingpoweroftheoutstandingsharesofACSClassAcommonstockand ACSClassBcommonstock,votingtogetherasasingleclass,andtheaffirmativevoteofholdersofamajorityofthe outstandingsharesofACSClassAcommonstock(otherthanthosesharesofACSClassAcommonstockheld,directlyor indirectly,byholdersofACSClassBcommonstock),votingasasingle,separateclass.Weurgeyoutoreadcarefullythe accompanyingjointproxystatement/prospectus,whichincludesimportantinformationaboutXerox,ACSandthe proposedmerger.Inparticular,pleaseseethesectionentitled“RiskFactors”beginningonpage28ofthe accompanyingjointproxystatement/prospectuswhichcontainsadescriptionoftherisksthatyoushouldconsiderin evaluatingtheproposedmerger. SharesofXeroxcommonstockarelistedontheNewYorkStockExchangeandtheChicagoStockExchangeunderthe symbol“XRX.”SharesofACSClassAcommonstockarelistedontheNewYorkStockExchangeunderthesymbol “ACS.”OnDecember22,2009,themostrecentpracticabletradingdaypriortotheprintingoftheaccompanyingjointproxy statement/prospectus,thelastsalespriceofXeroxcommonstockwas$8.58pershareandthelastsalespriceofACSClassA commonstockwas$59.93pershare.YoushouldobtaincurrentmarketquotationsforbothXeroxcommonstockandACS ClassAcommonstock. OnFebruary5,2010,eachcompanyisholdingaspecialmeetingofstockholdersinordertoobtainthestockholder approvalsnecessarytocompletethemergerasmorefullydescribedintheaccompanyingjointproxystatement/prospectus. Whetherornotyouexpecttoattendthespecialmeetinginperson,weurgeyoutosubmityourproxyaspromptlyas possible.YouhaveachoiceofsubmittingyourproxyovertheInternet,bytelephoneorbymarking,signingand datingtheenclosedproxycardandreturningitinthepostage-paidenvelopeprovided.Pleaserefertotheinstructions ontheenclosedproxycard. UrsulaM.Burns LynnR.Blodgett ChiefExecutiveOfficerofXeroxCorporation PresidentandCEOofAffiliatedComputerServices,Inc. NeithertheSecuritiesandExchangeCommissionnoranystatesecuritiescommissionhasapprovedor disapprovedthesecuritiestobeissuedinconnectionwiththemergerordeterminediftheaccompanyingjointproxy statement/prospectusisaccurateorcomplete.Anyrepresentationtothecontraryisacriminaloffense. Theaccompanyingjointproxystatement/prospectusisdatedDecember28,2009,andisfirstbeingmailedorotherwise deliveredtostockholdersofXeroxandstockholdersofACSonoraboutDecember28,2009. ADDITIONALINFORMATION Theaccompanyingjointproxystatement/prospectusincorporatesbyreferenceimportantbusinessand financialinformationaboutXeroxandACSfromdocumentsthatarenotincludedinordeliveredwiththejoint proxystatement/prospectus.Thisinformationisavailabletoyouwithoutchargeuponyourwrittenororal request.Youcanobtainthedocumentsincorporatedbyreferenceinthejointproxystatement/prospectusby requestingtheminwritingorbytelephonefromtheappropriatecompanyatthefollowingaddressesand telephonenumbers: XeroxCorporation AffiliatedComputerServices,Inc. 45GloverAvenue 2828NorthHaskell P.O.Box4505 Dallas,Texas75204 Norwalk,Connecticut06856-4505 Attention:InvestorRelations Attention:InvestorRelations (214)841-8281 (203)968-3000 www.acs-inc.com(“InvestorRelations”tab) www.xerox.com(“InvestorRelations”tab) Inaddition,ifyouhavequestionsaboutthemergerorthespecialmeetings,orifyouneedtoobtaincopies oftheaccompanyingjointproxystatement/prospectus,proxycards,electionformsorotherdocuments incorporatedbyreferenceinthejointproxystatement/prospectus,youmaycontacttheappropriatecontactlisted below.Youwillnotbechargedforanyofthedocumentsyourequest. IfyouareaXeroxstockholder: IfyouareanACSstockholder: InnisfreeM&AIncorporated MacKenziePartnersInc. 501MadisonAvenue,20thFloor 105MadisonAvenue NewYork,NY10022 NewYork,NY10016 (877)456-3442(tollfree) (800)322-2885(tollfree) (212)750-5833(banksandbrokerscollect) (212)929-5500(collect) E-mail:[email protected] Ifyouwouldliketorequestdocuments,pleasedosobyJanuary29,2010,inordertoreceivethem beforethespecialmeetings. Foramoredetaileddescriptionoftheinformationincorporatedbyreferenceintheaccompanyingjoint proxystatement/prospectusandhowyoumayobtainit,see“WhereYouCanFindMoreInformation”beginning onpage183oftheaccompanyingjointproxystatement/prospectus. XeroxCorporation 45GloverAvenue P.O.Box4505 Norwalk,CT06856-4505 NOTICEOFSPECIALMEETINGOFSTOCKHOLDERS December28,2009 DearStockholders: YouarecordiallyinvitedtoattendaspecialmeetingofstockholdersofXeroxCorporation(“Xerox”)tobeheld onFebruary5,2010,at10:00a.m.,localtime,atXerox’sCorporateHeadquarters,45GloverAvenueinNorwalk, Connecticut,unlessthespecialmeetingisadjournedorpostponed.Thepurposesofthespecialmeetingaretoconsider andvoteuponthefollowingmatters: 1. aproposaltoapprovetheissuanceofsharesofXeroxcommonstockrequiredtobeissuedtoAffiliated ComputerServices,Inc.(“ACS”)stockholderspursuanttotheAgreementandPlanofMerger,datedasof September27,2009,asamendedbyAmendmentNo.1totheAgreementandPlanofMerger,datedasof December13,2009(the“mergeragreement”),amongXerox,BoulderAcquisitionCorp.(awholly-owned subsidiaryofXeroxestablishedforthepurposeofeffectingthemerger)andACS,whichprovidesforthe mergerofACSwithandintoBoulderAcquisitionCorp.(the“merger”);and 2. aproposaltoapprovetheadjournmentofthespecialmeeting,ifnecessaryorappropriate,includingtosolicit additionalproxies. Theaccompanyingjointproxystatement/prospectusdescribesthemergeragreementandtheproposedmergerin detail.THEXEROXBOARDOFDIRECTORSHASDETERMINEDTHATTHEMERGERAGREEMENT ANDMERGERAREADVISABLEANDINTHEBESTINTERESTSOFXEROXANDITS STOCKHOLDERSANDUNANIMOUSLYRECOMMENDSTHATXEROXSTOCKHOLDERSVOTE “FOR”THEPROPOSALTOAPPROVETHEISSUANCEOFSHARESOFXEROXCOMMONSTOCK REQUIREDTOBEISSUEDPURSUANTTOTHEMERGERAGREEMENTAND“FOR”THEPROPOSAL TOAPPROVETHEADJOURNMENTOFTHESPECIALMEETING,IFNECESSARYORAPPROPRIATE, INCLUDINGTOSOLICITADDITIONALPROXIES.Wecannotcompletethemergerunlesstheissuanceof sharesofXeroxcommonstockrequiredtobeissuedpursuanttothemergeragreementisapprovedbytheaffirmative voteofholdersofamajorityinvotingpowerofthesharesofXeroxcommonstockrepresented(whetherinpersonor byproxy)attheXeroxspecialmeetingoranyadjournmentorpostponementthereof(providedthatatleastamajority invotingpowerofthesharesofXeroxcommonstockoutstandingarerepresentedinpersonorbyproxyatsuch meetingoranyadjournmentorpostponementthereof). StockholdersofrecordofXeroxcommonstockasofthecloseofbusinessonDecember11,2009areentitledto receivenoticeofthespecialmeetingandtovoteatitoratanyadjournmentorpostponementthereof.Stockholderswho holdsharesinstreetnamemayvotethroughtheirbrokers,banksorothernominees.Ifyouwishtoattendthespecial meetingandyoursharesareheldinthenameofabroker,trust,bankorothernominee,youmustbringwithyoua proxyorletterfromthebroker,trustee,bankornomineetoconfirmyourbeneficialownershipoftheshares.Alistof stockholderseligibletovoteatthespecialmeetingwillbeavailableforinspectionatthespecialmeeting. FortheBoardofDirectors, AnneM.Mulcahy ChairmanoftheBoard Yourvoteisveryimportant.Pleasereturnyourproxyassoonaspossible,whetherornotyouexpectto attendthespecialmeetinginperson.YoumaysubmityourproxyovertheInternet,bytelephoneorbymarking, signinganddatingtheenclosedproxycardandreturningitinthepostage-paidenvelopeprovided.Youmay revokeyourproxyatanytimebeforethespecialmeeting.Ifyouattendthespecialmeetingandvoteinperson, yourproxywillnotbeused. [THISPAGEINTENTIONALLYLEFTBLANK] AFFILIATEDCOMPUTERSERVICES,INC. 2828NorthHaskellAvenue Dallas,Texas75204 NOTICEOFSPECIALMEETINGOFSTOCKHOLDERS December28,2009 TothestockholdersofAffiliatedComputerServices,Inc: AspecialmeetingofthestockholdersofAffiliatedComputerServices,Inc.(“ACS”)willbeheldat CityplaceConferenceCenter,2711NorthHaskellAvenue,Dallas,Texas75204onFebruary5,2010,at 2:00p.m.,centralstandardtime,unlessthespecialmeetingisadjournedorpostponed.Atthespecialmeeting, ACSstockholderswillbeaskedto: • considerandactonaproposaltoadopttheAgreementandPlanofMerger,datedasofSeptember27, 2009,asamendedbyAmendmentNo.1totheAgreementandPlanofMerger,datedasofDecember 13,2009(the“mergeragreement”),amongXerox,BoulderAcquisitionCorp.(awholly-owned subsidiaryofXeroxestablishedforthepurposeofeffectingthemerger)andACS,whichprovidesfor themergerofACSwithandintoBoulderAcquisitionCorp.(the“merger”)andpursuanttowhichACS stockholderswillhavetherighttoreceive,foreachshareofACSClassAcommonstockheld immediatelypriortothemerger(i)4.935sharesofXeroxcommonstockand(ii)$18.60incash,and foreachshareofACSClassBcommonstockheldimmediatelypriortothemerger(i)4.935sharesof Xeroxcommonstock,(ii)$18.60incashand(iii)afractionofashareofanewseriesofpreferred stocktobeissuedbyXeroxanddesignatedasXeroxCorporationSeriesAConvertiblePerpetual PreferredStock;and • approvetheadjournmentoftheACSspecialmeeting(ifnecessaryorappropriate,includingtosolicit additionalproxiesiftherearenotsufficientvotestoadoptthemergeragreement). Theaccompanyingjointproxystatement/prospectusdescribesthemergeragreementandtheproposed mergerindetail. PleasenotethatonlystockholdersofrecordasofthecloseofbusinessonDecember11,2009willbe eligibletovoteatthespecialmeeting.Stockholderswhoholdsharesinstreetnamemayvotethroughtheir brokers,banksorothernominees.Ifyouwishtoattendthespecialmeetingandyoursharesareheldinthename ofabroker,trust,bankorothernominee,youmustbringwithyouaproxyorletterfromthebroker,trustee,bank ornomineetoconfirmyourbeneficialownershipoftheshares.Yourvoteisimportant.Youmaysubmitaproxy overtheInternet,bytelephoneorbymail.Inordertocompletethemerger,theholdersofamajorityinvoting poweroftheoutstandingsharesofACSClassAcommonstockandACSClassBcommonstock,votingtogether asasingleclass,andtheholdersofamajorityoftheoutstandingsharesofACSClassAcommonstock(other thanthosesharesofACSClassAcommonstockheld,directlyorindirectly,byholdersofACSClassBcommon stock),votingasasingle,separateclass,ineachcase,entitledtovoteonsuchproposalatsuchmeetingatwhich aquorumispresentmustvotetoadoptthemergeragreement. UnderDelawarelaw,holdersofrecordofACScommonstockwhodonotvoteinfavorofadoptionofthe mergeragreementandwhoproperlydemandappraisaloftheirshareswillhavetherighttoseekappraisalofthe fairvalueoftheirsharesofACScommonstockifthemergeriscompleted.Toexerciseyourappraisalrights,you muststrictlyfollowtheproceduresprescribedbyDelawarelaw,including,amongotherthings,submittinga writtendemandforappraisaltoACSbeforethevoteistakenonthemergerproposal.Theseproceduresare summarizedintheaccompanyingjointproxystatement/prospectusinthesectionentitled“TheMerger— AppraisalRights”beginningonpage131(thetextoftheapplicableprovisionsofDelawarelawisincludedas AnnexGtotheaccompanyingjointproxystatement/prospectus). FormoreinformationaboutthetransactionscontemplatedbythemergeragreementandtheACSspecial meeting,pleasereviewcarefullytheaccompanyingjointproxystatement/prospectus,theannexestheretoandthe informationincorporatedthereto. THEACSBOARDOFDIRECTORS(OTHERTHANMR.DARWINDEASON,WHOWAS RECUSEDFROMTHEMEETING),ACTINGUPONTHEUNANIMOUSRECOMMENDATIONOF THESTRATEGICTRANSACTIONCOMMITTEEOFTHEACSBOARDOFDIRECTORS, UNANIMOUSLYRECOMMENDSTHATACSSTOCKHOLDERSVOTE“FOR”THEPROPOSALTO ADOPTTHEMERGERAGREEMENTAND“FOR”THEPROPOSALTOAPPROVETHE ADJOURNMENTOFTHEACSSPECIALMEETING,IFNECESSARYORAPPROPRIATE, INCLUDINGTOSOLICITADDITIONALPROXIESIFTHEREARENOTSUFFICIENTVOTESTO ADOPTTHEMERGERAGREEMENT. Verytrulyyours, LynnR.Blodgett PresidentandCEO JOINTPROXYSTATEMENT/PROSPECTUS TABLEOFCONTENTS Page QUESTIONSANDANSWERSABOUTTHEMERGERANDTHESPECIALMEETINGS .......... 1 SUMMARY ........................................................................... 9 InformationabouttheCompanies ...................................................... 9 TheMerger ........................................................................ 9 MergerConsideration ................................................................ 10 TreatmentofACSStockOptions ....................................................... 10 TotalXeroxSharestobeIssued ........................................................ 10 ComparativePerShareMarketPriceandDividendInformation............................... 11 ACSSpecialMeeting ................................................................ 11 XeroxSpecialMeeting ............................................................... 12 RecommendationoftheACSBoardofDirectors .......................................... 13 OpinionofFinancialAdvisortoACS ................................................... 13 OpinionofFinancialAdvisortotheStrategicTransactionCommittee .......................... 14 RecommendationoftheXeroxBoardofDirectors ......................................... 14 OpinionsofFinancialAdvisorstoXerox ................................................. 14 InterestsofACS’sDirectorsandExecutiveOfficersintheTransaction ......................... 15 GovernmentalandRegulatoryApprovals ................................................ 15 Financing ......................................................................... 15 NoSolicitation ..................................................................... 16 RestrictionsonRecommendationWithdrawal ............................................. 16 ConditionstoCompletionoftheMerger ................................................. 16 Closing ........................................................................... 17 TerminationoftheMergerAgreement................................................... 17 TerminationFees ................................................................... 18 MaterialU.S.FederalIncomeTaxConsequences .......................................... 18 AppraisalRights .................................................................... 19 ListingofXeroxCommonStockontheNYSE ............................................ 19 DifferencesBetweenRightsofXeroxandACSStockholders ................................ 19 LitigationRelatingtotheMerger ...................................................... 19 SelectedConsolidatedHistoricalFinancialDataofXerox ................................... 21 SelectedConsolidatedHistoricalFinancialDataofACS .................................... 23 ComparativePerShareData........................................................... 24 ComparativePerShareMarketPriceDataandDividendInformation .......................... 26 RISKFACTORS ....................................................................... 28 RiskFactorsRelatingtotheMerger ..................................................... 28 RiskFactorsRelatingtoXeroxandACS ................................................. 32 XEROXANDACSUNAUDITEDPROFORMACONDENSEDCOMBINEDFINANCIAL INFORMATION ..................................................................... 33 SPECIALNOTECONCERNINGFORWARD-LOOKINGSTATEMENTS ........................ 52 INFORMATIONABOUTTHECOMPANIES ................................................ 53 XeroxCorporation .................................................................. 53 BoulderAcquisitionCorp. ............................................................ 53 AffiliatedComputerServices,Inc. ...................................................... 53 THEXEROXSPECIALMEETING ........................................................ 54 Date,TimeandPlace ................................................................ 54 MatterstobeConsidered ............................................................. 54 RecommendationoftheXeroxBoardofDirectors ......................................... 54 RecordDate;SharesEntitledtoVote .................................................... 54 i Page VotingbyXerox’sDirectorsandExecutiveOfficers ....................................... 54 QuorumandRequiredVote ........................................................... 55 EffectsofAbstentionsandBrokerNon-Votes ............................................. 55 ESOPVotingInstruction ............................................................. 55 Proxies ........................................................................... 55 SpecialMeetingAdmission ........................................................... 56 SolicitationofProxies ............................................................... 57 ConfidentialVoting ................................................................. 57 THEACSSPECIALMEETING ........................................................... 58 Date,TimeandPlace ................................................................ 58 Purpose ........................................................................... 58 RecommendationoftheACSBoardofDirectors .......................................... 58 RecordDate;SharesEntitledtoVote .................................................... 58 Quorum ........................................................................... 59 VoteRequired ...................................................................... 59 VotingbyACS’sDirectorsandExecutiveOfficers ......................................... 59 HowtoVote ....................................................................... 60 VotingofProxies ................................................................... 60 RevokingYourProxy ................................................................ 60 StockholdersSharinganAddress ....................................................... 61 ProxySolicitations .................................................................. 61 OtherBusiness ..................................................................... 61 Assistance ......................................................................... 61 THEMERGER ......................................................................... 62 General ........................................................................... 62 BackgroundoftheMerger ............................................................ 62 RecommendationoftheACSBoardofDirectors;ACS’sReasonsfortheMerger................. 76 OpinionofFinancialAdvisortoACS ................................................... 80 OpinionofFinancialAdvisortotheStrategicTransactionCommittee .......................... 90 ACSUnauditedProspectiveFinancialInformation ......................................... 104 RecommendationoftheXeroxBoardofDirectors;Xerox’sReasonsfortheMerger .............. 106 OpinionsofFinancialAdvisorstoXerox ................................................. 108 XeroxUnauditedProspectiveFinancialInformation ........................................ 119 InterestsofACS’sDirectorsandExecutiveOfficersintheTransaction ......................... 120 Xerox’sBoardofDirectorsandManagementaftertheMerger................................ 126 MannerandProcedureforExchangingSharesofACSCommonStock;NoFractionalShares ....... 126 GovernmentalandRegulatoryApprovals ................................................ 127 MergerExpenses,FeesandCosts ...................................................... 128 MaterialU.S.FederalIncomeTaxConsequences .......................................... 128 AppraisalRights .................................................................... 131 RestrictionsonSalesofSharesbyCertainAffiliates ........................................ 135 StockExchangeListingofXeroxCommonStock .......................................... 135 DelistingandDeregistrationofACSClassACommonStock ................................ 135 LitigationRelatingtotheMerger ....................................................... 135 THEMERGERAGREEMENT ............................................................ 139 FormoftheMerger.................................................................. 139 Closing ........................................................................... 139 EffectiveTime ..................................................................... 139 MergerConsideration ................................................................ 139 TreatmentofStockOptions ........................................................... 140 RepresentationsandWarranties ........................................................ 140 ii Page CovenantsandAgreements ........................................................... 142 ConditionstotheMerger ............................................................. 153 Termination........................................................................ 156 EffectofTermination ................................................................ 157 TerminationFees ................................................................... 157 AmendmentandWaiver .............................................................. 159 SpecificPerformance;Third-PartyBeneficiaries ........................................... 159 THEVOTINGAGREEMENT............................................................. 161 DESCRIPTIONOFDEBTFINANCING .................................................... 164 DESCRIPTIONOFXEROXCAPITALSTOCK .............................................. 166 DESCRIPTIONOFXEROXCONVERTIBLEPREFERREDSTOCK ............................. 168 COMPARATIVERIGHTSOFXEROXANDACSSTOCKHOLDERS ........................... 170 EXPERTS ............................................................................. 181 LEGALMATTERS ..................................................................... 181 FUTURESTOCKHOLDERPROPOSALS ................................................... 181 WHEREYOUCANFINDMOREINFORMATION ........................................... 183 ANNEXA AgreementandPlanofMerger,asamendedbyAmendmentNo.1...................... A-1 ANNEXB VotingAgreement ............................................................ B-1 ANNEXC OpinionofCitigroupGlobalMarketsInc. ......................................... C-1 ANNEXD OpinionofEvercoreGroupL.L.C. ............................................... D-1 ANNEXE OpinionofBlackstoneAdvisoryServicesL.P. ..................................... E-1 ANNEXF OpinionofJ.P.MorganSecuritiesInc. ............................................ F-1 ANNEXG Section262oftheGeneralCorporationLawoftheStateofDelaware ................... G-1 iii [THISPAGEINTENTIONALLYLEFTBLANK]
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