CONFIDENTIAL — SUBJECT TO THE CONFIDENTIALITY / NON-DISCLOSURE AGREEMENT DATED SEPTEMBER 5, 2023
SUPPLEMENTAL DUE DILIGENCE REQUEST LIST NO. 3
EMPLOYEE BENEFITS AND COMPENSATION
Date: October 22, 2023
Matter No.: 1041-00003
CONFIDENTIALITY NOTICE: This Supplemental Due Diligence Request List No. 3 and all information and documents produced in response hereto are subject to the terms and conditions of the Confidentiality / Non-Disclosure Agreement dated September 5, 2023, by and between Solara Digital Infrastructure LP (and its affiliates, representatives, and advisors, including Calderwood & Harkness LLP) and Cloudium Technologies plc (and its affiliates, representatives, and advisors, including Ridgeway Phelps & Sato LLP) (the "NDA"). All such information and documents constitute "Confidential Information" as defined in the NDA. Recipients are reminded of their obligations under the NDA with respect to the use, protection, and return or destruction of Confidential Information. Nothing in this request list or in any documents produced in response hereto constitutes a waiver of any rights or obligations under the NDA.
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INTRODUCTORY INSTRUCTIONS AND GENERAL NOTES
This Supplemental Due Diligence Request List No. 3 (this "Supplemental Request List") is issued by Calderwood & Harkness LLP on behalf of its client, Solara Digital Infrastructure LP ("Buyer"), in connection with Buyer's proposed acquisition of Cloudium Technologies plc (the "Company" or "Target") by means of a reverse triangular merger under the Delaware General Corporation Law (the "Proposed Transaction"). This Supplemental Request List supplements and should be read in conjunction with the Preliminary Due Diligence Request List dated September 10, 2023, previously delivered to Ridgeway Phelps & Sato LLP (the "Preliminary Request List"), and the Supplemental Due Diligence Request List No. 2 dated October 3, 2023 (the "Second Supplemental Request List"). To the extent that documents responsive to requests set forth herein have already been produced in the virtual data room in connection with prior requests, the Company need not produce such documents a second time but should indicate by cross-reference where such documents may be located in the data room.
The requests set forth in this Supplemental Request List cover the Company and all of its direct and indirect subsidiaries (collectively, the "Cloudium Group" or the "Group"), including without limitation the following entities:
(a) Cloudium Technologies plc (Company No. 09734521), the parent company, with its registered office at 45 Broadwick Street, London W1F 0DB, United Kingdom, and its US headquarters at 600 Townsend Street, Suite 800, San Francisco, CA 94103;
(b) Cloudium Technologies UK Ltd. (Company No. 11287456), a wholly-owned subsidiary of the Company incorporated in England and Wales, with offices in London and Manchester, employing approximately 1,200 employees;
(c) Cloudium Technologies India Pvt. Ltd., a wholly-owned subsidiary of the Company incorporated under the laws of the Republic of India, with offices in Bangalore, Karnataka, India, employing approximately 2,400 employees; and
(d) Cloudium Solutions GmbH, a wholly-owned subsidiary of the Company organized under the laws of the Federal Republic of Germany, with offices in Berlin, Germany, employing approximately 400 employees.
The total global workforce of the Cloudium Group is approximately 6,800 employees. Based on the foregoing subsidiary headcounts, the US-based workforce (which may be employed by the Company or any US subsidiary not separately identified above) is estimated to be approximately 2,800 employees. To the extent the foregoing headcount estimates are materially inaccurate, the Company is requested to provide corrected figures and identify the employing entities.
General Instructions:
1. Virtual Data Room. All documents produced in response to this Supplemental Request List should be uploaded to the virtual data room (the "VDR") hosted by Thackeray Solutions, which was established on September 18, 2023, in the folder structure designated for employee benefits and compensation matters. Each document should be clearly labeled and indexed in accordance with the numbering of the requests set forth herein.
2. Scope of Requests. The requests contained herein encompass all current, pending, and recently terminated (within the past three years) plans, programs, agreements, arrangements, policies, practices, and commitments, whether written or unwritten, formal or informal, funded or unfunded, insured or self-insured, US or non-US, that relate to employee benefits, compensation, equity incentives, retirement, deferred compensation, severance, retention, or any other form of remuneration or benefit provided to current or former employees, directors, officers, consultants, or independent contractors of any member of the Cloudium Group.
3. Foreign Language Documents. Where documents responsive to these requests are in languages other than English, including but not limited to German (for Cloudium Solutions GmbH) and Hindi or Kannada (for Cloudium Technologies India Pvt. Ltd.), please provide both the original-language version and a certified English translation prepared by a qualified translator. Summaries in English may be provided on an interim basis pending completion of full translations, but full certified translations will be required prior to the anticipated signing date.
4. Change-of-Control Provisions. Given the proposed transaction structure (a reverse triangular merger under the DGCL in which a newly formed acquisition subsidiary of Buyer will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of Buyer), the Company is specifically requested to identify, with respect to each plan, program, agreement, or arrangement produced in response to this Supplemental Request List, whether such plan, program, agreement, or arrangement contains any provision that would be triggered by a "change of control," "change in control," "change of ownership," "corporate transaction," "merger," "acquisition," "sale of assets," "business combination," or similar event (however defined in the relevant document). For each such provision, please describe the consequences that would arise upon the occurrence of such an event in the context of the Proposed Transaction, including any acceleration of vesting, lapse of restrictions, payment of cash or other consideration, enhanced severance or benefits, modification of terms, or other special treatment.
5. Privilege. To the extent any documents responsive to these requests are withheld on the basis of attorney-client privilege, work product protection, or any other applicable privilege or immunity, please provide a privilege log identifying such documents with reasonable particularity, including the date, author, recipient(s), subject matter, and basis for the privilege claim.
6. Continuing Obligation. The Company's obligation to respond to this Supplemental Request List is a continuing obligation. If, after initial production, the Company becomes aware of additional responsive documents or information, the Company should promptly supplement its production.
SECTION I: EQUITY INCENTIVE PLANS AND EQUITY-BASED COMPENSATION
A. Plan Documents
1.1. Copies of all equity incentive plans, stock option plans, restricted stock unit ("RSU") plans, performance share unit ("PSU") plans, employee stock purchase plans ("ESPPs"), phantom equity plans, stock appreciation rights ("SAR") plans, and any other equity-based or equity-linked compensation plans or programs currently in effect or under which any awards or rights remain outstanding, whether applicable to employees, directors, officers, consultants, or independent contractors of any member of the Cloudium Group.
1.2. All amendments, restatements, and supplements to each equity incentive plan or program identified in response to Request 1.1, including any amendments adopted by the Board of Directors, any committee thereof, or the stockholders of the Company, from the date of initial adoption of each such plan through the date hereof.
1.3. Copies of all resolutions of the Board of Directors of the Company (or any committee thereof, including the Compensation Committee and the Nomination and Governance Committee) approving the adoption, amendment, restatement, termination, or material modification of each equity incentive plan or program, together with copies of all stockholder resolutions or written consents approving any such action where stockholder approval was required or obtained.
1.4. Any summary plan descriptions, employee communications, prospectuses, or offering memoranda distributed to participants or potential participants in connection with any equity compensation plan or program.
1.5. Copies of all registration statements on Form S-8 (and any amendments thereto) filed with the US Securities and Exchange Commission (the "SEC") relating to equity compensation plans or programs of the Company, together with any opinions of counsel filed as exhibits thereto and any no-action letters or exemptive relief obtained from the SEC in connection with equity compensation matters.
B. Award Agreements and Grant Documentation
1.6. Forms of each type of award agreement used under each equity incentive plan, including without limitation: (a) stock option agreements (both incentive stock option and nonqualified stock option forms); (b) restricted stock unit award agreements; (c) performance share unit award agreements; (d) ESPP enrollment and subscription forms; (e) phantom equity or SAR award agreements; and (f) any other form of equity-based or equity-linked award agreement. Where multiple forms have been used over time or for different employee levels or jurisdictions, please provide all such forms.
1.7. A comprehensive schedule (the "Equity Award Schedule") setting forth all outstanding equity awards as of the most recent practicable date (which should be no earlier than October 1, 2023), including for each individual award the following information:
(a) Grantee name and current title or position;
(b) Employing entity within the Cloudium Group;
(c) Type of award (e.g., incentive stock option, nonqualified stock option, time-based RSU, performance-based RSU/PSU, ESPP right, phantom equity, SAR);
(d) Grant date;
(e) Vesting schedule, specifying whether vesting is time-based (cliff or ratable), performance-based, or a combination thereof, and identifying all applicable vesting dates and any vesting acceleration provisions;
(f) Number of shares of Company common stock subject to the award (or, in the case of phantom equity or SARs, the number of notional shares or units);
(g) Exercise price or strike price (for stock options and SARs);
(h) For performance-based awards: the applicable performance metrics, performance period, target level of achievement, threshold and maximum levels of achievement, and the current status of achievement against such metrics;
(i) Expiration or forfeiture date; and
(j) Whether the award is subject to any change-of-control acceleration provision (single-trigger, double-trigger, or discretionary).
1.8. With respect to the Equity Award Schedule requested in Request 1.7, please specifically identify and separately detail all awards held by each of the following individuals:
(a) Jonathan Hargrove, Chief Executive Officer;
(b) Sienna Whitfield, Chief Financial Officer;
(c) Nadia Chowdhury, General Counsel;
(d) Douglas Pemberton, Chair of the Board of Directors; and
(e) All other executive officers (as defined under Section 16 of the Securities Exchange Act of 1934, as amended) and all members of the Board of Directors.
1.9. A capitalization reconciliation for each equity incentive plan, setting forth: (a) the total number of shares of Company common stock authorized for issuance under the plan; (b) the total number of shares subject to outstanding and unexercised awards; (c) the total number of shares previously issued upon exercise of options, settlement of RSUs and PSUs, or purchase under the ESPP; (d) the total number of shares available for future grant; and (e) any "evergreen" or automatic share replenishment provisions. Such reconciliation should be prepared as of the same date as the Equity Award Schedule and should be reconciled to the 184,200,000 shares of Company common stock reported as outstanding as of the anticipated signing date of the Proposed Transaction.
C. Change-of-Control Provisions in Equity Plans
1.10. A detailed description and analysis of all provisions in each equity incentive plan and in each form of individual award agreement (including any non-standard or individually negotiated award agreements) that provide for acceleration of vesting, lapse of forfeiture restrictions, cash-out, conversion, assumption, substitution, or any other special treatment of equity awards upon the occurrence of a "change of control," "corporate transaction," "merger," "acquisition," or similar event (however defined in the relevant plan or agreement). For each such provision, please specify:
(a) The definition of the triggering event and whether the Proposed Transaction (structured as a reverse triangular merger under the DGCL) would constitute such a triggering event;
(b) Whether the acceleration or special treatment is "single-trigger" (i.e., triggered solely by the occurrence of the change of control) or "double-trigger" (i.e., requiring both the occurrence of a change of control and a qualifying termination of employment within a specified period);
(c) The specific consequences that would apply to each type of award (e.g., full acceleration, partial acceleration, pro-rata acceleration, cash-out at the merger consideration price, assumption or substitution by the acquiror, or forfeiture);
(d) Any provisions permitting the Board of Directors or the Compensation Committee to exercise discretion regarding the treatment of awards upon a change of control, including discretion to accelerate vesting, to determine whether awards will be assumed or substituted, or to cash out awards; and
(e) Any notice, consent, or other procedural requirements that must be satisfied in connection with the treatment of awards upon a change of control.
1.11. A quantification of the aggregate equity compensation value that would vest, accelerate, or become payable as a result of the Proposed Transaction, assuming (a) closing of the Proposed Transaction on the anticipated closing date and (b) payment of the per-share merger consideration currently contemplated. Such quantification should be broken down by: (i) plan; (ii) type of award; and (iii) individual, for each executive officer and director. For all other employees, aggregate totals by plan and award type will be sufficient. For stock options, the quantification should reflect the "spread" value (i.e., the excess of the per-share merger consideration over the exercise price, multiplied by the number of shares subject to accelerated options). For performance-based awards, please state the assumptions used regarding the level of performance achievement.
1.12. Copies of any resolutions, determinations, or actions taken by the Board of Directors, the Compensation Committee, or any other committee of the Board in connection with or in contemplation of the treatment of equity awards in the Proposed Transaction, including any resolutions adopted after the date of the Company's receipt of Buyer's initial indication of interest.
D. International Equity Sub-Plans
1.13. Copies of any sub-plans, addenda, supplements, or country-specific appendices to any equity incentive plan that have been adopted for the purpose of granting awards to, or facilitating the participation of, employees, directors, or consultants of Cloudium Technologies UK Ltd., Cloudium Technologies India Pvt. Ltd., Cloudium Solutions GmbH, or any other non-US member of the Cloudium Group.
1.14. Documentation of any tax-qualified or tax-advantaged equity arrangements applicable to non-US employees, including without limitation:
(a) Any UK Company Share Option Plan ("CSOP") established in accordance with Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003;
(b) Any UK Enterprise Management Incentives ("EMI") scheme established in accordance with Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003;
(c) Any UK Share Incentive Plan ("SIP") established in accordance with Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003;
(d) Any UK Save As You Earn ("SAYE") option scheme established in accordance with Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003;
(e) Any Indian employee stock option trust structures or other Indian ESOP arrangements, including any trust deeds, SEBI compliance documentation, and filings with the Registrar of Companies; and
(f) Any German equity participation arrangements subject to specific German tax treatment.
1.15. Any analyses, memoranda, or opinions of counsel (whether internal or external) addressing the compliance of equity awards granted to employees outside the United States with applicable non-US securities laws, exchange control regulations, data privacy requirements, and tax laws, including without limitation: (a) UK Financial Conduct Authority requirements; (b) Indian securities regulations (SEBI and FEMA); and (c) German securities and tax regulations. To the extent such analyses are protected by attorney-client privilege, please include them on the privilege log requested in the Introductory Instructions.
SECTION II: RETIREMENT AND PENSION PLANS
A. US Retirement Plans
2.1. Copies of all tax-qualified retirement plans sponsored or maintained by any US member of the Cloudium Group, including without limitation all 401(k) plans, profit-sharing plans, money purchase pension plans, defined benefit pension plans, cash balance plans, employee stock ownership plans ("ESOPs"), and any other plans intended to be qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), together with all amendments, restatements, and supplements thereto.
2.2. Copies of the most recent summary plan descriptions ("SPDs") and any summaries of material modifications ("SMMs") for each tax-qualified retirement plan.
2.3. Copies of the most recent favorable determination letters, advisory letters, or opinion letters issued by the Internal Revenue Service (the "IRS") with respect to each tax-qualified retirement plan, together with any applications pending before the IRS for a determination letter.
2.4. Copies of the Form 5500 annual reports (including all required schedules, financial statements, actuarial certifications, and attachments) for each tax-qualified retirement plan for the last three completed plan years.
2.5. Copies of the most recent nondiscrimination testing results for each tax-qualified retirement plan, including without limitation:
(a) Actual Deferral Percentage ("ADP") and Actual Contribution Percentage ("ACP") testing under Sections 401(k)(3) and 401(m)(2) of the Code;
(b) Top-heavy testing under Section 416 of the Code;
(c) Coverage testing under Section 410(b) of the Code;
(d) General nondiscrimination testing under Section 401(a)(4) of the Code; and
(e) Any corrective distributions, forfeitures, or qualified nonelective contributions ("QNECs") made in connection with failed nondiscrimination tests.
2.6. Documentation of all employer matching contributions and any discretionary employer contributions made to each tax-qualified retirement plan for each of the last three plan years, including the formula or methodology used to determine such contributions.
2.7. Copies of all trust agreements, custodial agreements, and group annuity contracts for each tax-qualified retirement plan.
2.8. Copies of all investment policy statements currently in effect for each tax-qualified retirement plan, together with the current lineup of investment options available to participants and a summary of fees and expenses charged to plan participants.
2.9. Description of any pending or threatened audits, examinations, investigations, or inquiries by the IRS, the US Department of Labor (the "DOL"), the Pension Benefit Guaranty Corporation (the "PBGC"), or any other governmental authority relating to any tax-qualified retirement plan, including copies of any correspondence with such authorities.
2.10. Copies of any submissions made under the IRS Employee Plans Compliance Resolution System ("EPCRS"), including submissions under the Voluntary Correction Program ("VCP") or documentation of corrections made under the Self-Correction Program ("SCP"), together with any compliance statements or closing agreements received from the IRS. Additionally, copies of any submissions made under the DOL's Voluntary Fiduciary Correction Program ("VFCP") or the DOL's Delinquent Filer Voluntary Compliance Program ("DFVCP").
B. UK Pension Schemes
2.11. Copies of all pension scheme documentation for Cloudium Technologies UK Ltd., including without limitation the following:
2.12. For any defined benefit ("DB") pension scheme: (a) the trust deed and rules (including all supplemental trust deeds and amendments); (b) the most recent actuarial valuation report prepared by the scheme actuary; (c) the statement of funding principles; (d) the schedule of contributions; (e) the most recent recovery plan (if applicable); (f) the most recent annual report and financial statements prepared by the scheme trustees; and (g) any actuarial certificates required under Part 3 of the Pensions Act 2004.
2.13. For any defined contribution ("DC") pension scheme: (a) the governing documentation (including trust deeds, rules, or policy documentation, as applicable); (b) the most recent annual report and financial statements; (c) details of the current contribution rates (both employer and employee); (d) a description of the default investment strategy and the range of investment options available to members; and (e) documentation confirming compliance with automatic enrollment obligations under the Pensions Act 2008 and the Employers' Duties (Implementation) Regulations 2010, including any re-enrollment and re-declaration processes.
2.14. Documentation of any section 75 employer debt obligations or triggers that may arise in connection with the Proposed Transaction, including any analysis of whether the Proposed Transaction would constitute a "cessation event" for purposes of section 75 of the Pensions Act 1995, or whether the Proposed Transaction would trigger a change of the "principal employer" or "participating employer" under the scheme rules.
2.15. Copies of any guarantees, indemnities, letters of comfort, escrow arrangements, or parent company support provided by any member of the Cloudium Group (including the Company) in respect of obligations under any UK pension scheme, and any analysis of whether such guarantees or support arrangements would be affected by the Proposed Transaction.
2.16. Documentation relating to any consultation with UK pension scheme trustees in connection with a change of control, a change of the principal employer, or any other corporate event related to the Proposed Transaction, including copies of any correspondence between the Company (or its advisors) and the trustees (or their advisors).
2.17. Copies of any correspondence with The Pensions Regulator ("TPR") in the past three years, including any notifications, clearance applications, warning notices, contribution notices, financial support directions, or other regulatory correspondence. Please also identify whether the Company or any of its advisors has considered whether a clearance application to TPR would be appropriate in connection with the Proposed Transaction.
2.18. Auto-enrollment compliance documentation and certification, including copies of any declarations of compliance filed with TPR and evidence of compliance with the auto-enrollment duties (including the timing of automatic enrollment, opt-out procedures, and contribution levels).
2.19. Details of any Pension Protection Fund ("PPF") levies paid or assessed in respect of any UK DB pension scheme for the last three levy years, including the risk-based levy calculation methodology and any related correspondence with the PPF.
C. India Provident Fund and Gratuity Obligations
2.20. Documentation relating to the provident fund ("PF") obligations of Cloudium Technologies India Pvt. Ltd., including without limitation:
(a) Employees' Provident Fund ("EPF") registration certificates and establishment codes;
(b) Copies of any documentation evidencing whether the PF arrangement is administered through the Employees' Provident Fund Organisation ("EPFO") or through a trust-managed (exempt) provident fund, and if trust-managed, copies of the trust deed, investment policies, and board of trustees' minutes;
(c) Records of EPF contributions (both employer and employee) for the last three fiscal years, including contribution challans and electronic challan cum return (ECR) filings;
(d) Documentation of any arrears, deficiencies, or penalties relating to PF contributions, and the current status of any such arrears;
(e) Compliance certificates issued by the EPFO or by any auditor confirming PF compliance; and
(f) Copies of any pending or threatened proceedings, notices, or orders from the EPFO, the EPF Appellate Tribunal, or any court relating to PF matters.
2.21. Documentation relating to gratuity obligations of Cloudium Technologies India Pvt. Ltd. under the Payment of Gratuity Act, 1972, including without limitation:
(a) The most recent actuarial valuation report for gratuity liability, prepared in accordance with Indian Accounting Standard (Ind AS) 19;
(b) Details of the gratuity funding arrangement, including whether gratuity obligations are funded through a gratuity trust, an insured arrangement with a life insurance carrier (and if so, copies of the relevant insurance policy documentation and the name of the insurance carrier), or are maintained on an unfunded book reserve basis;
(c) A statement of the current funded status of the gratuity obligation (i.e., the difference between the actuarially determined gratuity liability and the fair value of any plan assets or insurance policy values); and
(d) Details of any gratuity payments made in the last three fiscal years and the projected gratuity liability as of the most recent practicable date.
2.22. Documentation of any other statutory benefit obligations of Cloudium Technologies India Pvt. Ltd., including without limitation:
(a) Employee State Insurance ("ESI") registration and compliance records, contribution history, and any pending proceedings with the Employees' State Insurance Corporation ("ESIC");
(b) Bonus obligations under the Payment of Bonus Act, 1965, including records of bonus payments for the last three fiscal years and any pending disputes; and
(c) Any other statutory benefit obligations under applicable central or state legislation, including the Maternity Benefit Act, 1961, and applicable Karnataka state shop and establishment legislation.
D. German Pension and Social Insurance Arrangements
2.23. Documentation relating to any company pension (betriebliche Altersversorgung, or "bAV") arrangements of Cloudium Solutions GmbH, including without limitation:
(a) For any direct pension commitments (Direktzusage): copies of individual pension commitment letters (Versorgungszusagen), general pension regulations (Versorgungsordnungen), and any amendments thereto;
(b) For any support fund arrangements (Unterstützungskasse): copies of the support fund charter, contribution commitments, and benefit regulations;
(c) For any direct insurance arrangements (Direktversicherung): copies of the insurance contracts and certificates, group insurance policies, and benefit summaries;
(d) For any pension fund arrangements (Pensionsfonds): copies of the pension fund regulations, plan rules, and participation agreements;
(e) For any provident fund arrangements (Pensionskasse): copies of the provident fund charter, contribution schedules, and benefit regulations; and
(f) Copies of any corresponding reinsurance policies (Rückdeckungsversicherung) purchased by Cloudium Solutions GmbH to fund pension obligations.
2.24. The most recent actuarial reports and pension reserve calculations (Pensionsrückstellungen) prepared in connection with the bAV arrangements of Cloudium Solutions GmbH, prepared in accordance with applicable German accounting standards (HGB) and International Financial Reporting Standards (IFRS), as applicable.
2.25. Social insurance (Sozialversicherung) compliance records and contribution documentation for Cloudium Solutions GmbH, including records of contributions to the statutory pension insurance (gesetzliche Rentenversicherung), health insurance (Krankenversicherung), long-term care insurance (Pflegeversicherung), unemployment insurance (Arbeitslosenversicherung), and accident insurance (Unfallversicherung) for the last three fiscal years, together with any social insurance audit reports (Betriebsprüfungsberichte) issued by the Deutsche Rentenversicherung.
2.26. Any analysis or description of change-of-control consequences under German pension arrangements, including whether the Proposed Transaction would constitute a "Betriebsübergang" (transfer of undertaking) under Section 613a of the German Civil Code (Bürgerliches Gesetzbuch, "BGB") with respect to pension obligations, and any resulting obligations of the acquiror.
SECTION III: NONQUALIFIED DEFERRED COMPENSATION PLANS
3.1. Copies of all nonqualified deferred compensation plans, supplemental executive retirement plans ("SERPs"), excess benefit plans (within the meaning of Section 3(36) of ERISA), top-hat plans (within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA), and any other arrangements providing for the deferral of compensation beyond the taxable year in which such compensation is earned, whether applicable to employees, directors, officers, consultants, or independent contractors of any US member of the Cloudium Group. Please include all plan documents, amendments, restatements, and supplements.
3.2. Copies of all trust agreements, including any "rabbi trust" agreements (i.e., grantor trust agreements within the meaning of Revenue Procedure 92-64), established to secure or fund obligations under any nonqualified deferred compensation arrangement.
3.3. A schedule of all current participants in each nonqualified deferred compensation arrangement identified in response to Request 3.1, setting forth for each participant: (a) name and title; (b) the applicable plan or arrangement; (c) the aggregate account balance or accrued benefit as of the most recent practicable date; and (d) the form and timing of distribution elected by the participant.
3.4. Any analysis, memorandum, or opinion of counsel (whether internal or external) addressing the compliance of each nonqualified deferred compensation arrangement with Section 409A of the Code and the Treasury Regulations promulgated thereunder, including without limitation:
(a) Whether the arrangement constitutes a "nonqualified deferred compensation plan" within the meaning of Section 409A(d);
(b) Whether the arrangement satisfies the requirements for initial deferral elections under Section 409A(a)(4)(B);
(c) Whether the arrangement satisfies the requirements for distributions under Section 409A(a)(2), including permissible distribution events and the prohibition on acceleration of distributions;
(d) Whether any provision of the arrangement permits or requires accelerated distribution upon a "change in control event" as defined in Treasury Regulation Section 1.409A-3(i)(5), and if so, whether the Proposed Transaction would constitute such a change in control event; and
(e) The application of the six-month delay rule for distributions to "specified employees" (within the meaning of Section 409A(a)(2)(B)(i)) upon separation from service, and the interaction of such rule with any change-of-control distribution provisions.
3.5. Copies of any Section 409A correction or remediation documentation, including any corrections made under IRS Notice 2008-113 or Notice 2010-6, any income inclusion and additional tax assessments under Section 409A(a)(1)(B), and any related correspondence with the IRS.
SECTION IV: EMPLOYMENT AGREEMENTS
A. Executive Employment Agreements
4.1. Copies of all employment agreements, offer letters, retention letters, and side letters for each of the following individuals, together with all amendments, addenda, and modifications thereto:
(a) Jonathan Hargrove, Chief Executive Officer;
(b) Sienna Whitfield, Chief Financial Officer;
(c) Nadia Chowdhury, General Counsel;
(d) All other officers (including all individuals holding the title of Senior Vice President or above);
(e) All vice presidents; and
(f) All other members of senior management (i.e., individuals reporting directly to any of the foregoing).
4.2. A summary schedule (the "Executive Compensation Schedule") setting forth the material terms of each employment agreement or arrangement identified in response to Request 4.1, including without limitation:
(a) Base salary (current annual rate);
(b) Target annual bonus (expressed as a percentage of base salary and/or as a dollar amount);
(c) Equity grant commitments (including any commitments to make annual or periodic equity grants of a specified type or value);
(d) Severance entitlements upon termination without "cause" and upon resignation for "good reason" (including the definition of such terms, the severance multiplier, the benefit continuation period, and any conditions to receipt of severance such as execution of a release of claims);
(e) Change-of-control provisions (including enhanced severance, bonus payments, accelerated vesting, retention bonuses, modified notice periods, or any other benefits triggered by a change of control, whether on a single-trigger or double-trigger basis);
(f) Notice periods required for termination by the employer and by the employee;
(g) Restrictive covenant provisions, including non-competition, non-solicitation (of employees and of customers/clients), non-disclosure, and non-disparagement covenants, specifying the duration, geographic scope, and scope of restricted activities;
(h) Invention assignment, work-for-hire, and intellectual property assignment provisions;
(i) Clawback or recoupment provisions; and
(j) Governing law and dispute resolution provisions (including any mandatory arbitration clauses).
4.3. Please specifically identify, for each employment agreement or arrangement produced in response to Request 4.1, all provisions that are specifically triggered by a change of control (however defined in the relevant agreement), including without limitation: (a) enhanced severance payments or benefits; (b) lump-sum bonus or retention payments; (c) accelerated vesting of equity or deferred compensation; (d) retention bonuses conditioned on continued employment through or following a change of control; (e) modified notice periods or garden leave provisions; and (f) any provisions that would limit, restrict, or condition the acquiror's ability to terminate the executive's employment or modify the executive's compensation or benefits following the closing of the Proposed Transaction.
B. Non-US Employment Agreements
4.4. Cloudium Technologies UK Ltd.: Copies of all employment contracts, offer letters, and written particulars of employment (i.e., Section 1 statements issued pursuant to Section 1 of the Employment Rights Act 1996, as amended) for: (a) all Managing Directors; (b) all senior managers (i.e., individuals at the director level or above); and (c) any other employees with annual total compensation (including base salary, bonus, and the annualized value of equity grants) exceeding £100,000. Please also provide copies of any contractual side letters, variation letters, or agreed modifications to such employment contracts.
4.5. Cloudium Technologies India Pvt. Ltd.: Copies of all employment agreements, appointment letters, and compensation letters for: (a) all members of senior management (i.e., individuals at the vice president level or above); and (b) any other employees with annual total compensation (including base salary, bonus, and the annualized value of equity grants) exceeding INR 25,000,000 (Indian Rupees Twenty-Five Million).
4.6. Cloudium Solutions GmbH: Copies of all employment agreements (Arbeitsverträge) for: (a) all managing directors (Geschäftsführer); (b) all senior employees (leitende Angestellte) within the meaning of Section 5(3) of the Works Constitution Act (Betriebsverfassungsgesetz, "BetrVG"); and (c) any other employees with annual total compensation exceeding €120,000.
4.7. Copies of all secondment agreements, international assignment letters, expatriate assignment agreements, and cross-border mobility arrangements pursuant to which any employee of one member of the Cloudium Group performs services for, or is assigned to, another member of the Cloudium Group in a different jurisdiction.
C. Independent Contractor and Consultant Agreements
4.8. Copies of all material independent contractor agreements, consulting agreements, and advisory agreements pursuant to which any individual (as distinguished from a firm or entity) performs services for any member of the Cloudium Group, particularly where the individual performs services that are similar in nature to services performed by employees of the Cloudium Group or where the engagement has continued for a period of twelve months or more. For purposes of this request, an agreement is "material" if the aggregate fees payable thereunder exceed $100,000 per annum (or the equivalent in local currency).
4.9. Documentation of any audits, investigations, determinations, assessments, or disputes by the IRS, the DOL, any US state agency (including state labor departments and state tax authorities), HM Revenue & Customs ("HMRC") in the United Kingdom, the Indian tax authorities, the German social insurance authorities (Deutsche Rentenversicherung), or any other governmental authority, relating to the classification of any individual as an independent contractor rather than an employee of any member of the Cloudium Group, including copies of all correspondence, determinations, and settlement agreements relating to any such matter.
SECTION V: SEVERANCE PLANS, PROGRAMS, AND ARRANGEMENTS
A. Formal Severance Plans
5.1. Copies of all severance plans, severance policies, severance programs, and severance guidelines applicable to employees at all levels (including executives, managers, and non-management employees), for each jurisdiction in which any member of the Cloudium Group employs individuals (including the United States, the United Kingdom, India, and Germany), together with all amendments, restatements, and supplements thereto.
5.2. For any US severance plan that constitutes an "employee welfare benefit plan" within the meaning of Section 3(1) of ERISA, copies of: (a) the ERISA plan document; (b) the summary plan description; (c) the most recent Form 5500 (if applicable); and (d) any claims and appeals procedures established in accordance with ERISA Section 503 and DOL Regulation Section 2560.503-1.
5.3. A schedule of severance benefits by employee level for each jurisdiction, including without limitation: (a) the severance pay formula or multiplier (e.g., weeks of base salary per year of service); (b) the maximum severance pay period; (c) the continuation of health insurance or other benefits during the severance period; (d) the provision of outplacement services; (e) any conditions to receipt of severance benefits (such as execution of a general release of claims, compliance with restrictive covenants, or return of company property); and (f) any enhanced severance benefits that are triggered by a change of control or by a termination without cause (or resignation for good reason) occurring within a specified period following a change of control (i.e., "double-trigger" enhanced severance).
B. Change-of-Control Severance Agreements
5.4. Copies of all individual change-of-control severance agreements, change-of-control employment agreements, executive retention agreements, transaction bonus agreements, and any other agreements or arrangements that provide for payments or benefits to any individual that are contingent upon or triggered by the occurrence of a change of control, whether such payments or benefits are payable upon the change of control itself (single-trigger) or upon a qualifying termination of employment following a change of control (double-trigger).
5.5. A quantification of the aggregate potential change-of-control severance payments, retention payments, and transaction bonus payments that would be triggered by the Proposed Transaction, assuming (a) closing of the Proposed Transaction on the anticipated closing date and (b) where double-trigger provisions apply, a qualifying termination of employment immediately following closing. Such quantification should be broken down: (i) by individual, for each named executive officer (within the meaning of Item 402 of SEC Regulation S-K); and (ii) in the aggregate, for all other employees.
5.6. Any "golden parachute" analysis prepared under Section 280G of the Code, including without limitation:
(a) Computation of the "base amount" (within the meaning of Section 280G(b)(3) of the Code) for each "disqualified individual" (within the meaning of Section 280G(c) of the Code);
(b) Computation of the aggregate "parachute payments" (within the meaning of Section 280G(b)(2) of the Code) for each disqualified individual, including payments attributable to accelerated vesting of equity awards, severance payments, continued benefits, and any other payments contingent on the change of control;
(c) Determination of whether any "excess parachute payments" (within the meaning of Section 280G(b)(1) of the Code) would result, and if so, the amount of the 20% excise tax that would be imposed on each disqualified individual under Section 4999 of the Code;
(d) The amount of the non-deductible compensation expense that would be borne by the Company under Section 280G(a) of the Code; and
(e) Any "reasonable compensation" analyses or valuations that may reduce the amount of parachute payments subject to the excise tax.
5.7. Copies of any documentation relating to any stockholder approval solicitation undertaken (or contemplated to be undertaken) in accordance with Section 280G(b)(5)(B) of the Code, to exempt parachute payments from the excise tax, and copies of any waivers by disqualified individuals of their right to receive excess parachute payments.
5.8. A description of any "best net" or "cutback" provisions in employment agreements, severance plans, or change-of-control agreements that would limit or reduce parachute payments to avoid the application of the Section 280G excise tax, including a specification of whether such provisions provide for a "best net" analysis (i.e., the individual receives the greater of the after-tax amount of the full parachute payment (net of the Section 4999 excise tax) and the after-tax amount of the reduced payment (at the Section 280G safe harbor level)) or a hard cutback to the safe harbor level.
C. Statutory Severance and Redundancy Obligations
5.9. United Kingdom: A description of the statutory redundancy pay entitlements applicable to employees of Cloudium Technologies UK Ltd. under Part XI of the Employment Rights Act 1996, including the formula for calculating statutory redundancy pay (based on age, length of service, and weekly pay, subject to the statutory cap). In addition, a description of any enhanced or contractual redundancy policies maintained by Cloudium Technologies UK Ltd. that provide for redundancy payments in excess of the statutory minimum. Please also identify any collective consultation obligations that would be triggered under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 in the event that post-closing restructuring results in the proposed dismissal of 20 or more employees at a single establishment within a period of 90 days or less.
5.10. India: A description of the retrenchment compensation obligations of Cloudium Technologies India Pvt. Ltd. under Section 25F of the Industrial Disputes Act, 1947, including any conditions and limitations on the right to retrench workmen (including the requirements for prior notice, government permission for establishments employing 100 or more workmen, and the formula for calculating retrenchment compensation). In addition, a description of any obligations under applicable Karnataka state shop and establishment legislation or other applicable state-specific labor legislation that may affect the ability of Cloudium Technologies India Pvt. Ltd. to terminate employees or modify terms and conditions of employment following the Proposed Transaction.
5.11. Germany: A description of any social plan (Sozialplan) obligations, reconciliation of interests (Interessenausgleich) requirements, or other severance obligations that may arise under German law in connection with any post-closing restructuring of Cloudium Solutions GmbH, including any rights of the works council (Betriebsrat) to negotiate a social plan and reconciliation of interests in the event of a "Betriebsänderung" (operational change) under Sections 111–113 of the BetrVG. In addition, a description of any individual or collective severance obligations arising under German employment law, including statutory notice periods under Section 622 of the BGB and any contractual notice periods in excess of the statutory minimum.
SECTION VI: BONUS AND INCENTIVE COMPENSATION PLANS
6.1. Copies of all annual bonus plans, short-term incentive plans, long-term incentive plans (other than equity-based plans covered by Section I above), commission plans, sales incentive plans, profit-sharing bonus programs, and any other cash-based incentive compensation plans or programs applicable to employees, directors, or officers of any member of the Cloudium Group, together with all amendments, restatements, and supplements thereto.
6.2. For each plan or program identified in response to Request 6.1, a description of: (a) the performance metrics used to determine bonus or incentive payments (e.g., revenue, EBITDA, customer acquisition, individual performance ratings); (b) the target level of achievement and corresponding target payout (expressed as a percentage of base salary or as a fixed dollar amount); (c) the threshold and maximum levels of achievement and corresponding payouts; and (d) the actual achievement levels and actual payouts for each of the last three completed fiscal years (fiscal years ending September 30, 2021, September 30, 2022, and September 30, 2023).
6.3. For the current fiscal year (fiscal year ending September 30, 2024): (a) a description of the plan terms, performance metrics, and target payouts; (b) year-to-date accruals for bonus and incentive compensation as of the most recent practicable date; and (c) the Company's current assessment of the likelihood of achieving target performance levels.
6.4. A description of any guaranteed bonus, minimum bonus, sign-on bonus, or discretionary bonus arrangements in effect for any employee, director, or officer, including any such arrangements that are not documented in a formal plan but are reflected in individual employment agreements or offer letters.
6.5. A description of any provisions in bonus or incentive compensation plans that provide for acceleration, pro-ration, or special treatment of bonus or incentive payments upon a change of control, including any provisions that would cause bonuses to become payable at target (or at any other level) upon the occurrence of the Proposed Transaction, and any provisions that would require pro-ration of bonuses for a partial performance period in the event the closing of the Proposed Transaction occurs prior to the end of a performance period.
6.6. A description of any transaction bonuses, completion bonuses, deal bonuses, or other one-time payments that have been contemplated, approved, communicated, or promised to any employee, director, or officer in connection with the Proposed Transaction, including any such payments that are conditioned upon the successful closing of the Proposed Transaction or upon continued employment through a specified date following closing.
SECTION VII: HEALTH, WELFARE, AND FRINGE BENEFIT PLANS
A. US Welfare Plans
7.1. Copies of all health and welfare benefit plans sponsored or maintained by any US member of the Cloudium Group, including without limitation all plans providing the following benefits: (a) medical insurance; (b) dental insurance; (c) vision insurance; (d) life insurance (basic and supplemental/voluntary); (e) accidental death and dismemberment ("AD&D") insurance; (f) short-term disability; (g) long-term disability; (h) health care flexible spending accounts ("Health FSAs"); (i) dependent care flexible spending accounts ("DCFSAs"); (j) health savings accounts ("HSAs"); (k) health reimbursement arrangements ("HRAs"); (l) employee assistance programs ("EAPs"); (m) wellness programs; and (n) any other welfare benefit plans or fringe benefit programs.
7.2. Copies of the most recent Form 5500 for each welfare benefit plan for which a Form 5500 filing is required.
7.3. Copies of all insurance contracts, insurance policies, administrative services only ("ASO") agreements, and stop-loss insurance policies (both specific and aggregate) relating to any self-insured or partially self-insured welfare benefit plan, together with a description of the current funding arrangement for each welfare benefit plan (i.e., whether fully insured, self-insured with stop-loss coverage, or a combination thereof).
7.4. Documentation of compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), including copies of COBRA election notices, COBRA procedures, and any open claims or disputes relating to COBRA continuation coverage. In addition, documentation of compliance with the requirements of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), the Affordable Care Act (including the employer shared responsibility provisions and the reporting requirements under Sections 6055 and 6056 of the Code), the Mental Health Parity and Addiction Equity Act, and any applicable state insurance continuation laws (e.g., California's Cal-COBRA).
7.5. A description of any retiree health or welfare benefits (i.e., other post-employment benefits or "OPEB") provided by any US member of the Cloudium Group to former employees, including: (a) the eligibility requirements for retiree benefits; (b) the benefit levels provided; (c) the most recent actuarial valuation of the accumulated postretirement benefit obligation ("APBO"); and (d) the current funding status of any OPEB obligations.
B. UK Benefits
7.6. A comprehensive summary of all benefits (whether contractual, discretionary, or statutory) provided to employees of Cloudium Technologies UK Ltd., including without limitation: (a) private medical insurance (including the name of the insurer and a summary of coverage levels); (b) life assurance (including the multiple of salary and the name of the insurer); (c) income protection or permanent health insurance; (d) dental insurance; (e) gym memberships or wellness benefits; (f) company car or car allowance; (g) cycle-to-work schemes; (h) childcare vouchers or tax-free childcare arrangements; and (i) any other contractual or discretionary benefits.
7.7. Documentation of any UK benefit arrangements that contain change-of-control triggers or that may be affected by the Proposed Transaction, including any provisions permitting the termination, modification, or replacement of benefits upon a change of control or a change of employer.