Mercury Interactive

Mercury Interactive Corp.
Hewlett-Packard Company (HPQ)
$4.5B Two-Step Merger

Summary

HP buys business optimization software company

For $52 per share, $4.5B total
Mercury had been caught up in option backdating scandal

Stock option backdating

Advisors

HP: Wilson Sonsini
Mercury: Goldman / Morrison & Foerster

Announced 7.25.06

Closed 11.07.06

Tender offer closed
Press release
Schedule 13D

Developments

Tender offer completed 11.02.06
Lock-up tender and voting agreement

Offer to Purchase

Offer to purchase

Merger Agreement

General

EDGAR filing
Hyperlinked version
Detailed hyperlinked index follows

Article I Definitions & Interpretations

1.1 Certain Definitions
1.2 Additional Definitions
1.3 Certain Interpretations

Article II The Offer

2.1 The Offer
2.2 Company Actions
2.3 Company Board of Directors and Committees; Section
14(f) of Exchange Act
2.4 50% Top-up Option
2.5 90% Top-up Option

Article III The Merger

3.1 The Merger
3.2 The Effective Time
3.3 The Closing
3.4 Effect of The Merger
3.5 Certificate of Incorporation and Bylaws
3.6 Directors and Officers
3.7 Effect on Capital Stock
3.8 Exchange of Certificates
3.9 No Further Ownership Rights in Company Common
Stock
3.10 Lost, Stolen or Destroyed Certificates
3.11 Taking of Necessary Action; Further Action

Article IV Company Reps

4.1 Organization and Standing
4.2 Subsidiaries
4.3 Authorization
4.4 Capitalization
4.5 Non-contravention; Required Consents
4.6 Sec Reports
4.7 Financial Statements
4.8 Schedule 14d-9; Proxy Statement; Offer Documents
4.9 No Undisclosed Liabilities
4.10 Absence of Certain Changes
4.11 Material Contracts
4.12 Compliance with Laws
4.13 Permits
4.14 Litigation
4.15 Antitrust Matters
4.16 Taxes
4.17 Environmental Matters
4.18 Employee Benefit Plans
4.19 Labor Matters
4.20 Real Property
4.21 Assets; Personal Property
4.22 Intellectual Property
4.23 Insurance
4.24 Related Party Transactions
4.25 Vote Required
4.26 Brokers
4.27 Opinion of Financial Advisors
4.28 State Anti-takeover Statutes

Article V Parent and Merger Sub Reps

5.1 Organization
5.2 Authorization
5.3 Non-contravention; Required Consents
5.4 Offer Documents; Schedule 14d-9; Proxy Statement
5.5 Litigation
5.6 Ownership of Company Capital Stock
5.7 Funds

Article VI Interim Conduct of Business

6.1 Affirmative Obligations of the Company
6.2 Negative Obligations of the Company

Article VII Additional Agreements

7.1 No Solicitation
7.2 Company Board Recommendation
7.3 Company Stockholders Meeting; Short-form Merger
7.4 Proxy Statement
7.5 Commercially Reasonable Efforts to Complete
7.6 Access
7.7 Notification
7.8 Certain Litigation
7.9 Confidentiality
7.10 Public Disclosure
7.11 Company Options; Company ESPP
7.12 Employee Matters
7.13 Directors and Officers Indemnification and Insurance
7.14 FIRPTA Certificate
7.15 Obligations of Merger Sub

Article VIII Conditions To The Merger

8.1 Conditions

Article IX Termination, Amendment and Waiver

9.1 Termination Prior to Appointment Time
9.2 Termination Before or after Appointment Time and Prior
to Effective Time
9.3 Notice of Termination; Effect of Termination
9.4 Fees and Expenses
9.5 Amendment
9.6 Extension; Waiver

Article X General Provisions

10.1 Survival of Representations, Warranties and
Covenants
10.2 Notices
10.3 Assignment
10.4 Entire Agreement
10.5 Third Party Beneficiaries
10.6 Severability
10.7 Other Remedies
10.8 Specific Performance
10.9 Governing Law
10.10 Consent to Jurisdiction
10.11 Waiver of Jury Trial
10.12 Counterparts

SEC Filings

Schedule TO filings

Schedule TO 8.17.06

Exhibits

Amendment #1 8.24.06

Amendment #2 9.15.06

Amendment #3 9.29.06

Amendment #4 10.16.06

Amendment #5 10.25.06

Amendment #6 10.30.06
Amendment #7 11.02.06
Amendment #8 11.07.06

Schedule 14D-9 filings

Schedule 14D-9 8.17.06

Amendment #1 8.24.06

Amendment #2 9.07.06

Amendment #3 9.15.06

Amendment #4 9.29.06

Amendment #5 10.16.06

Amendment #6 10.25.06

Amendment #7 10.31.06
Amendment #8 11.02.06
Amendment #9 11.07.06

Deal Protection

Lock-up agreement

Lock-up tender and voting agreement

No shop covenant

Merger agreement §7.1

Break-up fee

$170mm, plus out-of-pocket expenses
Agreement §9.4

Regulatory Approvals

HSR Act

Merger agreement §7.5

Fairness Opinion

Goldman Sachs fairness opinion

Proxy statement disclosure

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