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EXHIBIT 1
This email explains in a Q&A format how outstanding pcOrder stock options will
be treated in connection with the acquisition of pcOrder by Trilogy. This email
is for informational purposes and you are not being asked to complete any
documents at this time.
pcOrder security holders and any potential investors in pcOrder stock are
advised to carefully read the tender offer/going private statement on Schedule
TO, the solicitation/recommendation statement on Schedule 14D-9 and any other
documents pcOrder or Trilogy files with the Securities and exchange Commission
in connection with the proposed tender offer or merger when they become
available because they will contain important information about the proposed
transaction. Investors and security holders may obtain free copies of these
documents (when available) and other documents filed by pcOrder or Trilogy at
the SEC's website at www.sec.gov. These documents (when available) may also be
obtained for free by contacting Tiffany O'Brien at pcOrder (512.684.1171) or
Jeanne McNeil at Trilogy (512.794.5900).
Q1. What will I receive for my stock options if I do not voluntarily terminate
my employment?
A. If you do not voluntarily terminate your employment with pcOrder prior to the
closing of the merger, then your in-the-money options will be bought out at the
closing, subject to you entering into an Option Settlement Agreement provided by
the company. "In-the-money" refers to options that have an exercise price below
the tender offer price ($6.375). Regardless of what plan the options are issued
under, 100% of the vested and unvested in-the-money options will be accelerated
and bought out. The value of the buy out will be the difference between the
tender offer price and the exercise price of the in-the-money options. Option
holders will receive a net cash payment and will not be required to lay out any
money to receive the buy out payment. All out-of-the-money options will be
cancelled upon the closing pursuant to the Option Settlement Agreement.
Q2. What happens if I accept a job offer with Trilogy?
A. If you take a job with Trilogy and sign the Option Settlement Agreement, then
you will receive the same treatment as described in the answer to Question 1,
including the acceleration of unvested options.
Q3. When will I receive the buy out payment?
A. The transaction is structured in two steps. First, Trilogy will make a
tender offer for all outstanding shares of pcOrder common stock. At the closing
of the tender offer, Trilogy will purchase the shares that have been tendered by
their holders. The second step of the transaction is a merger in which pcOrder
will merge with a subsidiary of Trilogy. In that merger, pcOrder will become a
wholly-owned subsidiary of Trilogy and the remaining pcOrder stockholders will
receive a payment per share equal to the tender offer price. The option buy out
payments will occur immediately following this second step.
Q4. What happens if I voluntarily resign from the Company?
A. If you voluntarily resign from the Company prior to the closing of the
merger, then you will not be entitled to any acceleration of vesting.
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In that case, if the merger closes within 30 days of your termination, then upon
the closing you will receive a buy out payment equal to the difference between
the tender offer price and the exercise price of your vested in-the-money
options that have not been exercised, subject to you entering into an Option
Settlement Agreement with the Company. If the merger does not close within 30
days of your termination, then you must exercise your vested in-the-money
options for cash (or through a brokers' cashless exercise and sale) within that
30-day period, or your options will terminate and you will lose the economic
value of those options. All out-of-the-money options will be cancelled upon the
closing pursuant to the Option Settlement Agreement.
Q5. What happens if I do not enter into an Option Settlement Agreement with the
Company?
A. If you do not enter into an Option Settlement Agreement, you will not be
entitled to the acceleration of unvested options described in Question 1 and,
upon the closing of the merger, your options will become the right to receive
the tender offer price upon exercise of the option. In addition. if your
employment with the company terminates for any reason, then you must exercise
your in-the-money vested options within 30 days of the date of your termination
to realize the economic value of those options. Otherwise the options will
terminate after 30 days. If you exercise within that 30-day period and that
exercise occurs prior to the closing of the merger, you will receive shares of
pcOrder stock. For those shares, you will receive the tender offer price either
in the tender offer or the merger depending on the timing of your exercise and
whether you tender in the tender offer. If that exercise occurs following the
closing of the merger, then you will receive a cash amount equal to the tender
offer price for each vested option that is exercised.
Q6. What are the federal income tax consequences of receiving a buy out payment?
A. The buy out payment will be treated as ordinary income and will be subject to
applicable withholding.
Q7. What do I need to do to receive the buy out payment?
A. Shortly you will receive an individualized Option Settlement Agreement for
your review and signature. The deadline for returning that agreement will be
provided to you at that time.
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Q8. What if I have additional questions regarding the treatment of my stock
options in the transaction?
A. If you have any questions regarding the treatment of your stock options,
please contact Rick Friedman directly.
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