SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the
Registrant ¨
Filed by a Party
other than the Registrant þ
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under Rule 14a-12
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Pluralsight, Inc.
(Name of Registrant as Specified In Its Charter)
Eminence
Capital, LP
Ricky C. Sandler
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
Payment of Filing Fee (check the appropriate
box):
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No fee required.
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Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
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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):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Date Filed:
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February [●], 2021
Dear Fellow Pluralsight Stockholders:
The attached proxy
statement and the enclosed GOLD proxy card are being furnished to you, the stockholders of Pluralsight, Inc., a Delaware
corporation (“Pluralsight” or the "Company"), in connection with the solicitation of proxies by Eminence
Capital, LP and the other participants listed in Annex I to the proxy statement (collectively, “Eminence Capital” or
“we”) for use at the special meeting of stockholders of Pluralsight and at any adjournments or postponements thereof
(the “Special Meeting”), relating to the proposed acquisition of Pluralsight (the “Merger”) by affiliates
of Vista Equity Partners Management, LLC (“Vista Equity”). In connection with the proposed Merger, Pluralsight entered
into an Agreement and Plan of Merger, dated as of December 11, 2020, with Lake Holdings, LP, Lake Guarantor, LLC, Lake Merger Sub
I, Inc., Lake Merger Sub II, LLC and Pluralsight Holdings, LLC.
Pursuant to the attached
proxy statement, we are soliciting proxies from holders of shares of Pluralsight common stock to vote AGAINST adopting the
proposed Merger.
The Special Meeting
will be held on March 2, 2021, at 10:30 a.m., Mountain time via live interactive webcast on the internet at http://www.virtualshareholdermeeting.com/PS2021SM.
We recommend that
you carefully consider the information contained in the attached proxy statement and then support our efforts by signing, dating
and returning the enclosed GOLD proxy card today, or by voting against adopting the Merger via the internet or telephone.
The attached proxy statement and the enclosed GOLD proxy card are first being furnished to the stockholders on or about
February [●], 2021.
If you have already
voted for management’s proposals relating to the Merger on the white proxy card, you have every right to change your vote
by signing, dating and returning a later dated proxy card or by voting via the internet or telephone.
If you have any questions
or require any assistance with your vote, please contact Okapi Partners LLC, which is assisting us, at their address and toll-free
numbers listed below.
Thank you for your support,
Eminence Capital, LP
If you have any questions, require assistance
in voting your GOLD proxy card or voting via the internet or telephone, or need additional copies of Eminence Capital’s
proxy materials, please call Okapi Partners LLC at the phone numbers listed below
1212 Avenue
of the Americas, 24th Floor
New York, NY 10036
Banks and Brokerage Firms, Please Call: (212)
297-0720
Shareholders and All Others Call Toll-Free: (877)
279-2311
Email: info@okapipartners.com
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PRELIMINARY COPY SUBJECT TO COMPLETION
SPECIAL MEETING OF STOCKHOLDERS OF
Pluralsight,
inc.
42 Future Way
Draper, UT 84020
__________________________
PROXY STATEMENT
OF
_________________________
PLEASE SIGN, DATE AND MAIL THE ENCLOSED GOLD
PROXY CARD TODAY
Eminence Capital, LP (“Eminence Capital” or “we”)
beneficially owns 5,958,463 shares of Class A Common Stock, par value $0.0001 per share (the “Class A Common
Stock”) of Pluralsight, Inc. (“Pluralsight” or the “Company”). We are writing to you in connection
with the proposed acquisition of Pluralsight (the “Merger”) by affiliates of Vista Equity Partners Management, LLC
(“Vista Equity”). In connection with the proposed Merger, Pluralsight entered into an Agreement and Plan of Merger,
dated as of December 11, 2020, with Lake Holdings, LP, Lake Guarantor, LLC, Lake Merger Sub I, Inc., Lake Merger Sub II, LLC and
Pluralsight Holdings, LLC (the “Merger Agreement”). The Board of Directors of Pluralsight (the “Board”)
has scheduled a special meeting of stockholders for the purpose of adopting the Merger Agreement (the “Special Meeting”).
The Special Meeting will be held on March 2, 2021, at 10:30 a.m., Mountain time, via live interactive webcast on the internet at
http://www.virtualshareholdermeeting.com/PS2021SM.
For the reasons set
forth in this Proxy Statement, we oppose the adoption of the Merger because we believe it is not in the best interests of stockholders,
and we are soliciting proxies from the stockholders of Pluralsight to vote AGAINST the following Merger proposals (the “Merger
Proposals”):
Proposal
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Our Recommendation
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Pluralsight’s proposal to adopt the Merger Agreement (the “Merger Agreement Proposal”).
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AGAINST
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Pluralsight’s proposal to approve any adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the Merger Agreement Proposal (the “Adjournment Proposal”).
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AGAINST
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Pluralsight’s proposal to approve, on a non-binding, advisory basis, the compensation that may be paid or become payable by Pluralsight to its named executive officers in connection with the Merger (the “Compensation Proposal”).
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AGAINST
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To transact any other business that properly comes before the Special Meeting, including any postponement or adjournment thereof.
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Pluralsight has set the record date for determining stockholders
entitled to notice of and to vote at the Special Meeting as January 15, 2021 (the “Record Date”). Stockholders of record
at the close of business on the Record Date will be entitled to vote at the Special Meeting. As of the Record Date, there were
122,729,434 shares of Class A Common Stock outstanding and entitled to vote at the Special Meeting, 12,097,175 shares of Class B
Common Stock, par value $0.0001 per share (the “Class B Common Stock”), outstanding and entitled to vote at the Special
Meeting and 13,400,787 shares of Class C Common Stock, par value $0.0001 per share (the “Class C Common Stock”), outstanding
and entitled to vote at the Special Meeting according to the Company’s definitive proxy statement filed with the Securities
and Exchange Commission (the “SEC”) on January 29, 2021 (the “Company’s Proxy Statement”).
On February 4, 2021, Eminence Capital filed a complaint with
the Chancery Court for the State of Delaware (the “Chancery Court”) against the Company, alleging, among other
things, that the Company has failed to comply with its obligations in response to a demand made by Eminence Capital pursuant
to Section 220 of the Delaware General Corporate Law (the “220 Demand”) to produce certain documents related to
the Merger, including communications relating to the negotiations of an amendment to the Tax Receivable Agreement, so that
Eminence Capital may, among other things, investigate potential breaches of fiduciary duties by the Board of the Company
during the Company’s sales process. Eminence Capital has requested that the Chancery Court provide relief by requiring
the Company to, among other things, produce the books and records sought under the 220 Demand.
As of the close of business on February [●], 2021, Eminence
Capital beneficially owns 5,958,463 shares of Class A Common Stock (“Shares”), representing approximately 4.85%
of the outstanding shares of the Company as further described on Annex I.
We intend to vote our Shares AGAINST Pluralsight’s Merger
Proposals.
We urge you to sign, date and return the GOLD proxy
card voting “AGAINST” Pluralsight’s Merger Proposals.
This Proxy Statement and GOLD proxy card are first
being mailed or given to the Company’s stockholders on or about
February [●], 2021.
This Proxy Solicitation is being made by Eminence Capital and
the participants named in Annex I hereto (the “Participants”), and not on behalf of the Board or management of the
Company or any other third party. We are not aware of any other matters to be brought before the Special Meeting other than
as described herein. Should other matters be brought before the Special Meeting, the persons named as proxies in the enclosed GOLD
proxy card will vote on such matters in their discretion.
If you have already voted using the Company’s white proxy
card, you have every right to change your vote by completing and mailing the enclosed GOLD proxy card in the enclosed pre-paid
envelope or by voting via Internet or by telephone by following the instructions on the GOLD proxy card to vote AGAINST
the Merger Proposals. Only the latest validly executed proxy that you submit will be counted; any proxy may be revoked at any
time prior to its exercise at the Special Meeting by following the instructions under “Can I change my vote or revoke my
proxy?” in the Questions and Answers section.
For instructions on how to vote and other information about the
proxy materials, see the Questions and Answers section starting on page 7.
We urge you to promptly
sign, date and return your GOLD proxy card.
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If you have any questions or require any assistance
with voting your shares, please contact our proxy solicitor, Okapi Partners LLC, toll free at (877) 279-2311 or email at info@okapipartners.com.
PROPOSAL 1: MERGER AGREEMENT PROPOSAL
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You are being asked by
Pluralsight to adopt the Merger Agreement. It is a condition to the consummation of the Merger that Pluralsight’s stockholders
adopt the Merger Agreement. For the reasons discussed below, we oppose the Merger and the adoption of the Merger Agreement. To
that end, we are soliciting your proxy to vote AGAINST Proposal 1.
We recommend that you
demonstrate your opposition to the proposed Merger and send a message to the Board that the proposed Merger is not in the best
interest of Pluralsight’s stockholders by signing, dating and returning the enclosed GOLD proxy card as soon as possible.
You may also vote via the internet or by telephone at any time before 11:59 PM EST on March 1, 2021 by following the instructions
on your GOLD voting information card.
Reasons
to Vote Against Adopting the Merger Agreement:
Vista Equity’s Offer Price Represents a de minimis
Premium to Pluralsight’s Recent Stock Price and a Discount to Multiples in Recent Enterprise Software and SaaS Acquisitions
The Merger Agreement contemplates that, upon consummation of the
Merger, each holder of Pluralsight common stock will receive $20.26 per share in cash (the “Merger Consideration”).
Less than six months ago, Pluralsight’s shares were trading at $22.36, 10% higher than the Merger Consideration. The Merger
Consideration represents a mere 15.4% premium to the closing price of Pluralsight’s stock on September 16, 2020 (the day
before Pluralsight was approached by Vista Equity on an unsolicited basis) and only a 6.7% premium over the closing price of $18.98
on the last trading day prior to the announcement of the Merger.
As noted in Akaris Global Partners’ December 28, 2020 letter
to the Board, the Merger Consideration represents a multiple to LTM sales and 2022 recurring sales estimates that is far lower
than recent peer transactions, as well as the current valuation of comparable public companies.
Vista Equity’s Offer Price Deprives Pluralsight’s
Stockholders of the Value from Pluralsight’s Unique Position to Capitalize on Two Intersecting Secular Tailwinds: The Transition
to Enterprise Digital Learning and the Growing Demand for Continuing Software Development Training
We believe Pluralsight is poised to enter a period of sustained accelerated
growth. At just $390 million in annual recurring revenue and approximately 1.5 million users, we believe that Pluralsight has significant
room to grow with an immediate total addressable market of $42 billion and 102 million potential global users. Longer term, Pluralsight
has the ability to grow as a legitimate alternative to individuals going back to school and will be able to start taking share
in the global eLearning market that is over $300 billion.
We Believe Pluralsight Ran a Deeply Flawed Sales Process that
was NOT Designed to Maximize Stockholder Value
We believe the Transaction Committee (the “Transaction Committee”)
that the Board formed on September 24, 2020, to review a possible sale of the Company after being approached by Vista Equity on
September 17, 2020, was not completely independent given that a majority of its members were parties to the Company’s Tax
Receivable Agreement (the “Tax Receivable Agreement”). Even after the Company acknowledged the inadequacy of the original
Transaction Committee and changed its composition and enhanced its formal power, the Transaction Committee never engaged legal or financial advisors that were independent from the
Board as a whole and many of its meetings were attended by management and members of the Board who were not Transaction Committee
members.
As described in the Company’s Proxy Statement, the Tax Receivable
Agreement, which was entered into between the Company and certain Company insiders or other persons who had held units of an affiliate
of the Company upon its initial public offering (the "TRA Beneficiaries"), existed prior to the Merger Agreement, and
originally required an estimated aggregate payout of approximately $400 million to the TRA Beneficiaries upon a Company change
of control. This significant potential payout may partially explain why nearly all the prospective buyers of the Company never
even made a formal offer. Rather than addressing this obvious obstacle to maximizing stockholder value when the Company’s
own advisors acknowledge the true economic value of the Tax Receivable Agreement was only approximately $130 million, the Company
continued with the sales process and did not engage in negotiations to amend the Tax Receivable Agreement to reduce the change-of-control
payout until November 2020, when Vista Equity was the only active potential buyer.
On its November 5, 2020 earnings call, the Company provided some
optically disappointing results and guidance that were each conveniently approximately 1-3% below consensus estimates. Notably:
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The Company’s third quarter billings were $100
million (up 9% year over year) versus consensus estimates of $103 million (up 12% year over year). Additionally, on the third quarter
conference call, the Company chose to issue forward quarter billings guidance for the first time in its history. Conveniently,
this billings growth guidance for the fourth quarter of 2020 was +12% to 13% year over year, just below consensus estimates of
+14% year over year.
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As a result of this misleading and disappointing guidance
and disclosure, on November 6, 2020, the Company’s stock price dropped 22% from its November 5th closing price
of $19.00 and created an artificially depressed stock price. Additionally, on the same date, Vista Equity made its initial offer
for the Company of $16.50 per share. This is less than what the Company’s stock was trading for when Vista first approached
the Company on September 17th.
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Just two weeks after the disappointing earnings call, the Company
agreed to terms with Vista Equity at what we believe was an unfairly low price..
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Importantly, on February 1, 2021, the Company pre-announced fourth
quarter 2020 financial results that included an expectation of a 17-18% year over year billings acceleration.
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Qatalyst’s Fairness Opinion Substantially Understates the
Value of the Pluralsight Stock
Discounted Cash Flow Analysis:
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The discounted cash flow (“DCF”) analysis
used by Qatalyst described in the Company’s Proxy Statement and relied upon by Qatalyst to deliver its opinion as to the
fairness of the Merger and the Merger Consideration to the Company’s stockholders (the “Qatalyst Fairness Opinion”)
uses an Unlevered Free Cash Flow (“UFCF”) multiple range of 20-35x, while most comparable public companies today trade
at a UFCF multiple of between 30x-45x.
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The DCF analysis uses a range of discount rates of
9.5% to 11%, which we believe is high for a software company such as Pluralsight. At least one major sell-side analyst uses a 9%
discount rate for the Company.
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Selected Company Analysis
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The selected company analysis used by Qatalyst described
in the Company’s Proxy Statement and relied upon by Qatalyst to deliver the Qatalyst Fairness Opinion uses the wrong comparable
companies. Only three of the 21 companies used by the Compensation Committee of the Company’s Board of Directors for its
2019 compensation decisions (as set forth in the Company’s 2020 proxy statement) were used by Qatalyst in its analysis. For
Qatalyst’s selections, the average CY2021E Revenue Multiple (defined as the fully-diluted enterprise value divided by the
consensus estimated revenue for the calendar year 2021) is approximately 8.5x. The same multiple is nearly 17.0x for the Compensation
Committee’s peer company selections.
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Selected Transactions Analysis
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Qatalyst selected certain transactions going back
all the way back to 2011, when software companies were valued at significantly lower revenue multiples. Further, Qatalyst seemed
to exclude certain transactions that occurred during this time period, such as the acquisition of MuleSoft, Inc.
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In light of the above,
among other reasons, Eminence Capital recommends that you vote AGAINST the Merger Agreement Proposal. Other than soliciting
your vote AGAINST the Merger Agreement Proposal, we do not intend to make any other proposals in person at the Special Meeting
regarding the Merger, although we reserve the right to make such proposals at a later meeting of stockholders or through a separate
consent solicitation.
Consequences of Defeating the Proposed Merger
In the event that the
Merger Agreement is terminated as a result of the failure to obtain the requisite vote of Pluralsight’s stockholders, Pluralsight’s
stockholders will not receive any payment for their Shares pursuant to the Merger Agreement. Instead, Pluralsight will remain an
independent public company, Shares will continue to be listed and traded on the Nasdaq and registered under the Exchange Act, and
Pluralsight will continue to file periodic reports with the SEC.
In the event that the
Merger Agreement is terminated as a result of the failure to obtain the requisite vote of Pluralsight’s stockholders and
if (i) since the date of the Merger Agreement and prior to its termination, an “Acquisition Proposal” (as such term
is defined in the Merger Agreement) has been publicly announced or publicly disclosed and not withdrawn or otherwise abandoned
and (ii) Pluralsight enters into an agreement relating to, or consummates, an Acquisition Transaction within 12 months of such
termination, subject to certain conditions, then Pluralsight is required to pay Vista Equity a termination fee of $104.6 million.
Vote Required.
According to the Company’s Proxy Statement, the approval of
the Merger Agreement Proposal requires the affirmative vote of each of (1) the holders of a majority of the voting power of
the outstanding shares of common stock of the Company (voting together as a single class) and (2) the holders of a majority
of the voting power of the outstanding shares of common stock Company (voting together as a single class) not held by any party
to Pluralsight’s Tax Receivable Agreement, any person that Pluralsight has determined to be an “officer” of Pluralsight
within the meaning of Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended, and any other stockholder known by certain
executive officers of Pluralsight to be an affiliate or immediate family member of any of the foregoing. An abstention vote will
have the same effect as if the stockholder voted “AGAINST” the Merger Agreement Proposal. Nevertheless, we urge
stockholders to vote “AGAINST” the Merger Agreement Proposal to make sure their voices are heard and that there
can be no doubt that the Company’s stockholders stand in opposition to the Merger.
We urge you to sign, date and return our GOLD proxy card.
If you have already voted using the Company’s white proxy card, you have every right to change your vote by completing and
mailing the enclosed GOLD proxy card in the enclosed pre-paid envelope or by voting via Internet or by telephone
by following the instructions on the GOLD proxy card. Only the latest validly executed proxy that you submit will
be counted; any proxy may be revoked at any time prior to its exercise at the Special Meeting by following the instructions under
“Can I change my vote or revoke my proxy?” If you have any questions or require any assistance with voting your shares,
please contact our proxy solicitor, Okapi Partners LLC, toll free at (877) 279-2311 or email at info@okapipartners.com.
The
We
Recommend a Vote AGAINST the Merger Agreement Proposal on the GOLD proxy card.
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PROPOSAL 2: ADJOURNMENT PROPOSAL
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You are being asked by Pluralsight to approve the adjournment
of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve
the Merger Agreement Proposal. Approval of the Adjournment Proposal requires the affirmative vote of a majority of the voting power
of the shares of common stock present at the Special Meeting or represented by proxy at the Special Meeting and entitled to vote
on the Adjournment Proposal. For the reasons discussed above in “REASONS TO VOTE AGAINST ADOPTING THE MERGER AGREEMENT”,
we oppose the proposed Merger. To that end, we are soliciting your proxy to vote AGAINST Proposal 2.
Eminence Capital recommends
that you vote AGAINST the Adjournment Proposal.
Vote Required.
According to the Company’s Proxy Statement, the approval
of the Adjournment Proposal requires the affirmative vote of the majority of the voting power of the shares of common stock
present at the Special Meeting or represented by proxy at the Special Meeting and entitled to vote on the Adjournment
Proposal. An abstention vote will have the same effect as if the stockholder voted “AGAINST” the
Adjournment Proposal. Nevertheless, we urge stockholders to vote “AGAINST” the Adjournment Proposal to
make sure their voices are heard and that there can be no doubt that the Company’s stockholders stand in opposition to
the Merger.
We Recommend a Vote AGAINST the Adjournment
Proposal on the GOLD proxy card.
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PROPOSAL 3: COMPENSATION PROPOSAL
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You are being asked by Pluralsight to approve, on a non-binding,
advisory basis, the compensation that may be paid or become payable by Pluralsight to its named executive officers in connection
with the Merger. Approval of the Compensation Proposal requires the affirmative vote of a majority of the voting power of the shares
present at the Special Meeting or represented by proxy at the Special Meeting and entitled to vote on the Compensation Proposal.
For the reasons discussed above in “REASONS TO VOTE AGAINST ADOPTING THE MERGER AGREEMENT”, we oppose the proposed
Merger. To that end, we are soliciting your proxy to vote AGAINST Proposal 3.
Eminence Capital recommends
that you vote AGAINST the Compensation Proposal.
Vote Required.
According to the Company’s Proxy Statement, the approval of
the Compensation Proposal requires the affirmative vote of the majority of the voting power of the shares of common stock present
at the Special Meeting or represented by proxy at the Special Meeting and entitled to vote on the Compensation Proposal. An abstention
vote will have the same effect as if the stockholder voted “AGAINST” the Compensation Proposal. Nevertheless,
we urge stockholders to vote “AGAINST” the Compensation Proposal to make sure their voices are heard and that
there can be no doubt that the Company’s stockholders stand in opposition to the Merger.
We Recommend a Vote AGAINST the Adjournment
Proposal on the GOLD proxy card.
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QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE SPECIAL MEETING
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Who is entitled to vote?
Only holders of the Company’s voting stock at the close of
business on the Record Date, January 15, 2021, are entitled to notice of and to vote at the Special Meeting. Stockholders who sold
shares before the Record Date (or acquire them without voting rights after the Record Date) may not vote such shares. Stockholders
of record on the Record Date will retain their voting rights in connection with the Special Meeting even if they sell such shares
after the Record Date (unless they also transfer their voting rights).
How do I vote my shares?
Shares held in record name. If your shares are registered
in your own name, please vote today by signing, dating and returning the enclosed GOLD proxy card in the postage-paid
envelope provided. Execution and delivery of a proxy by a record holder of shares will be presumed to be a proxy with respect to
all shares held by such record holder unless the proxy specifies otherwise.
Shares beneficially owned or held in “street” name.
If you hold your shares in “street” name with a broker, bank, dealer, trust company or other nominee, only that nominee
can exercise the right to vote with respect to the shares that you beneficially own through such nominee and only upon receipt
of your specific instructions. Accordingly, it is critical that you promptly give instructions to your broker, bank, dealer,
trust company or other nominee to vote AGAINST the Merger Proposals. Please follow the instructions to vote provided
on the enclosed GOLD proxy card. If your broker, bank, dealer, trust company, or other nominee provides for proxy
instructions to be delivered to them by telephone or Internet, instructions will be included on the enclosed GOLD
proxy card. We urge you to confirm in writing your instructions to the person responsible for your account and provide a copy of
those instructions by emailing them to info@okapipartners.com or mailing them to Eminence Capital, LP, c/o Okapi Partners, 1212
Avenue of the Americas, 24th Floor, New York, NY 10036, so that we will be aware of all instructions given and can attempt to ensure
that such instructions are followed.
Note: Shares represented by properly executed GOLD
proxy cards will be voted at the Special Meeting as marked and, in the absence of specific instructions, “AGAINST”
the Merger Proposals.
How should I vote on each proposal?
We recommend that you vote your shares on the GOLD
proxy card as follows:
“AGAINST” the Merger Agreement Proposal
(Proposal 1);
“AGAINST” the Adjournment Proposal
(Proposal 2); and
“AGAINST” the Compensation Proposal
(Proposal 3).
How many shares must be present
to hold the Special Meeting?
According to the Company’s Proxy Statement, the holders of
a majority of the voting power Pluralsight’s capital stock issued and outstanding and entitled to vote, present in person
or represented by proxy, will constitute a quorum at the Special Meeting. According to the Company’s Proxy Statement, abstentions
(shares for which proxies have been received but for which the holders have abstained from voting) and broker non-votes, which
are described below, will be included in the calculation of the number of Shares present at the meeting for purposes of determining
whether a quorum has been met.
What are “broker non-votes”
and what effect do they have on the proposals?
A “broker non-vote”
generally occurs when a bank, broker or other nominee holding shares on a stockholder’s behalf does not vote on a proposal
because the bank, broker or other nominee has not received voting instructions from the stockholder and lacks discretionary power
to vote the shares. If your shares are held in the name of a brokerage firm, and the brokerage firm has not received voting instructions
from the beneficial owner of the shares with respect to that
proposal, the brokerage firm
cannot vote the shares on that proposal unless it is a “routine” matter. However, because of the rules applicable to
banks, brokers and other nominees, each of the proposals to be presented at the Special Meeting is considered non-routine. As a
result, no broker will be permitted to vote your shares at the Special Meeting without receiving instructions. Failure to instruct
your broker on how to vote your shares will have the same effect as a vote “against” the Merger Agreement Proposal,
but will have no effect on the Adjournment Proposal or the Compensation Proposal.
What should I do if I receive a
proxy card from the Company?
You may receive proxy solicitation materials from Pluralsight, including
a merger proxy statement and white proxy card. We are not responsible for the accuracy of any information contained in any proxy
solicitation materials used by the Company or any other statements that it may otherwise make.
We recommend that you disregard any proxy card or solicitation
materials that may be sent to you by the Company. If you have already voted using the Company’s white proxy card, you have
every right to change your vote by completing and mailing the enclosed GOLD proxy card in the enclosed pre-paid envelope
or by voting via Internet or by telephone by following the instructions on the GOLD proxy card. Only the latest validly
executed proxy that you submit will be counted; any proxy may be revoked at any time prior to its exercise at the Special Meeting
by following the instructions below under “Can I change my vote or revoke my proxy?” If you have any questions or require
any assistance with voting your shares, please contact our proxy solicitor, Okapi Partners LLC, toll free at (877) 279-2311 or
via email at info@okapipartners.com.
Can I change my vote or revoke my
proxy?
If you are the stockholder of record, you may change your proxy
instructions or revoke your proxy at any time before your proxy is voted at the Special Meeting. Proxies may be revoked by any
of the following actions:
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signing, dating and returning the enclosed GOLD
proxy card (the latest dated proxy is the only one that counts);
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delivering a written revocation or a later dated proxy
for the Special Meeting to Eminence Capital, LP, c/o Okapi Partners, 1212 Avenue of the Americas, 24th Floor, New York, NY 10036,or
to the secretary of the Company; or
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·
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attending the Special Meeting and voting in person
(although attendance at the Special Meeting will not, by itself, revoke a proxy).
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If your shares are held in a brokerage account by a broker, bank
or other nominee, you should follow the instructions provided by your broker, bank or other nominee. If you attend the Special
Meeting and you beneficially own shares but are not the record owner, your mere attendance at the Special Meeting WILL NOT be sufficient
to revoke your prior given proxy card. You must have written authority from the record owner to vote your shares held in its name
at the meeting. Contact Okapi Partners LLC, toll free at (877) 279-2311 or via email at info@okapipartners.com for assistance or
if you have any questions.
IF YOU HAVE ALREADY VOTED USING THE COMPANY’S WHITE PROXY
CARD, WE URGE YOU TO REVOKE IT BY FOLLOWING THE INSTRUCTIONS ABOVE. Although a revocation is effective if delivered to the
Company, we request that either the original or a copy of any revocation be mailed to Eminence Capital, LLC, c/o Okapi Partners,
1212 Avenue of the Americas, 24th Floor, New York, NY 10036.
Who is making this Proxy Solicitation
and who is paying for it?
The solicitation of proxies pursuant to
this Proxy Solicitation is being made by the Participants named on Annex I hereto. Proxies may be solicited by mail, facsimile,
telephone, telegraph, Internet, in person and by advertisements. The Participants will solicit proxies from individuals, brokers,
banks, bank nominees and other institutional holders. Eminence Capital has requested banks, brokerage houses and other custodians,
nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares they hold of record. Eminence
Capital will reimburse these record holders for their reasonable out-of-pocket expenses in so doing.
Eminence Capital has retained Okapi
Partners LLC (“Okapi”) to provide solicitation and advisory services in connection with this solicitation. Okapi
will be paid initial retainer of $25,000 plus additional fees and expenses to be agreed upon based upon the campaign services
provided. In addition, Eminence Capital will reimburse Okapi for its reasonable out-of-pocket expenses and will indemnify
Okapi against certain liabilities and expenses, including certain liabilities under the federal securities laws. Okapi will
solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders. It is anticipated that Okapi
will employ up to 35 persons to solicit the Company’s stockholders as part of this solicitation. Okapi does not believe
that any of its directors, officers, employees, affiliates or controlling persons, if any, is a “participant” in
this Proxy Solicitation.
The costs related to this Proxy Solicitation
will be borne by Eminence Capital. Costs of this Proxy Solicitation are currently estimated to be approximately $1,000,000. The
actual amount could be higher or lower depending on the facts and circumstances arising in connection with the solicitation. We
estimate that through the date hereof, Eminence Capital’s expenses in connection with this Proxy Solicitation are approximately
$400,000. If successful, Eminence Capital may seek reimbursement of these costs from the Company. In the event that Eminence
Capital decides to seek reimbursement of its expenses, Eminence Capital does not intend to submit the matter to a vote of the Company’s
stockholders. The Board would be required to evaluate the requested reimbursement consistent with its fiduciary duties to the Company
and its stockholders. Costs related to the solicitation of proxies include expenditures for attorneys, public relations and other
advisors, solicitors, printing, advertising, postage, transportation and other costs incidental to the solicitation.
Where can I find additional information
concerning Pluralsight and the Merger?
Pursuant to Rule 14a-5(c) promulgated under the Securities Exchange
Act of 1934 (the “Exchange Act”), we have omitted from this proxy statement certain disclosure required by applicable
law to be included in the Company’s Proxy Statement in connection with the Special Meeting. Such disclosure includes:
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a summary term sheet of the Merger;
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the terms of the Merger Agreement and the Merger and
related transactions;
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any reports, opinions and/or appraisals received by
Pluralsight in connection with the Merger;
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·
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past contacts, transactions and negotiations by and
among the parties to the Merger and their respective affiliates and advisors;
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·
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federal and state regulatory requirements that must
be complied with and approvals that must be obtained in connection with the Merger;
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security ownership of certain beneficial owners and
management of Pluralsight, including 5% owners;
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the trading prices of Pluralsight stock over time;
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the establishment of a quorum;
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the compensation paid and payable to Pluralsight’s
directors and executive officers;
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the requirements for the submission of stockholder
proposals to be considered for inclusion in Pluralsight’s proxy statement for the 2021 annual meeting of stockholders; and
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appraisal rights and dissenters’ rights.
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We take no responsibility for the accuracy or completeness of information
contained in the Company’s Proxy Statement. Except as otherwise noted herein, the information in this proxy statement concerning
the Company has been taken from or is based upon documents and records on file with the SEC and other publicly available information.
This proxy statement and all other solicitation materials in connection
with this Proxy Solicitation will be available on the internet, free of charge, on the SEC’s website at https://www.sec.gov.
We urge you to carefully consider the information contained in this
proxy statement and then support our efforts by signing, dating, and returning the enclosed GOLD proxy card today
to vote AGAINST the Merger Proposals.
Thank you for your support,
February [●], 2021
ANNEX I: INFORMATION
ON THE PARTICIPANTS
This Proxy Solicitation is being
made by Eminence Capital, LP (“Eminence Capital”) and Ricky C. Sandler, a United States citizen (“Mr. Sandler”,
and together with Eminence Capital, the “Participants”).
As of the close
of business on February [●], 2021, the Participants may be deemed to beneficially own, in the aggregate, 5,958,463
Shares, representing approximately 4.85% of the Company’s outstanding Shares. The percentages used herein are based
upon 122,729,434 shares of Class A Common Stock outstanding as of January 15, 2021, which is the Record Date for the Special
Meeting, as disclosed in the Company's Proxy Statement. Of the 5,958,463 Shares owned in the aggregate by the Participants,
such Shares may be deemed to be beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) as follows: (a)
5,958,463 Shares may be deemed to be beneficially owned by Eminence Capital by virtue of its status as the investment
manager of various funds (the "Eminence Funds") and separately managed accounts and (b) 5,958,463 Shares may
be deemed to be beneficially owned by Mr. Sandler by virtue of his direct control of Eminence Capital.
The principal business
of Eminence Capital is that of an investment manager engaging in the purchase and sale of securities on behalf of clients. The
principal owner of Eminence Capital is Mr. Sandler. The principal occupation of Mr. Sandler is Chief Executive Officer and Chief
Investment Officer of Eminence Capital. The principal business address of each of the Participants is 399 Park Avenue, 25th Floor,
New York, New York 10022.
The Shares described herein are held by each of the Eminence Funds
in commingled margin accounts, which may extend margin credit to the Eminence Funds from time to time, subject to applicable federal
margin regulations, stock exchange rules and credit policies. In such instances, the positions held in the margin account are pledged
as collateral security for the repayment of debit balances in the account. The margin accounts bear interest at a rate based upon
the broker's call rate from time to time in effect. Because other securities are held in the margin accounts, it is not possible
to determine the amounts, if any, of margin used to purchase the Common Stock reported herein.
Disclaimer
Except as set forth in this Proxy Statement (including the Annexes),
(i) during the past ten years, no Participant has been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors); (ii) each Participant does not directly or indirectly beneficially own any securities of the Company; (iii) each
Participant does not own any securities of the Company which are owned of record but not beneficially; (iv) each Participant has
not purchased or sold any securities of the Company during the past two years; (v) no part of the purchase price or market value
of the securities of the Company owned by Eminence Capital is represented by funds borrowed or otherwise obtained for the purpose
of acquiring or holding such securities; (vi) each Participant is not, or within the past year was not, a party to any contract,
arrangements, or understandings with any person with respect to any securities of the Company, including, but not limited to, joint
ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies; (vii) no associate of any Participant owns beneficially, directly or indirectly, any securities
of the Company; (viii) each Participant does not own beneficially, directly or indirectly, any securities of any parent or subsidiary
of the Company; (ix) none of the Participants nor any of their associates were a party to any transaction, or series of similar
transactions, since the beginning of the Company’s last fiscal year, or is a party to any currently proposed transaction,
or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount
involved exceeds $120,000; (x) none of the Participants nor any of their associates have any arrangement or understanding with
any person with respect to any future employment by the Company or its affiliates, nor with respect to any future transactions
to which the Company or any of its affiliates will or may be a party; and (xi) no person, including any Participant, has a substantial
interest, direct or indirect, by security holdings or otherwise in any matter to be acted on as set forth in this Proxy Statement.
There are no material proceedings to which any Participant or any of their associates is a party adverse to the Company or any
of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
Transactions by the Participants
with respect to the Company’s securities
The following tables set forth all transactions effected during the
past two years by the Participants with respect to securities of the Company. The Shares reported herein are held in either cash
accounts or margin accounts in the ordinary course of business. Unless otherwise indicated, all transactions were effected on the
open market.
Eminence Capital, in its capacity
as investment manager of the Eminence Funds and separately managed accounts, and
Ricky C. Sandler (by virtue of being Chief Executive Officer and Chief Investment Officer of Eminence Capital)
Shares
Date
of Purchase/Sale
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Shares
Purchased/(Sold)
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7/27/2020
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318,976
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7/28/2020
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259,488
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7/29/2020
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22,288
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7/30/2020
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1,243,659
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7/31/2020
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366,341
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8/2/2020
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171,171
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8/4/2020
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139,811
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8/10/2020
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(17,778)
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8/11/2020
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14,682
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8/13/2020
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1,700
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8/14/2020
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139,687
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8/17/2020
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567,684
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8/18/2020
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228,578
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8/19/2020
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194,217
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8/20/2020
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335,617
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8/21/2020
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285,728
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8/24/2020
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481,272
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8/25/2020
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161,171
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8/26/2020
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241,829
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8/31/2020
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(91,799)
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9/1/2020
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(383,930)
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9/2/2020
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(491,522)
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9/28/2020
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(69,391)
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9/29/2020
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(69,402)
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9/30/2020
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(69,403)
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10/1/2020
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731
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10/5/2020
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(13,849)
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10/14/2020
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23.481
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10/20/2020
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58,522
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10/27/2020
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(18,110)
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10/29/2020
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58,280)
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11/2/2020
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394,265
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11/3/2020
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40,400
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11/9/2020
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11,922
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11/16/2020
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662,399
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11/17/2020
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96,580
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11/20/2020
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(415)
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12/17/2020
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(89,512)
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12/18/2020
|
(82,351)
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12/21/2020
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(400)
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12/28/2020
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(2,034)
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1/5/2021
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847,972
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1/6/2021
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127,028
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1/8/2021
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29,979
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1/19/2021
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(50,829)
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IMPORTANT
Tell your Board what you think! YOUR VOTE IS
VERY IMPORTANT, no matter how many or how few shares you own. Please give us your proxy “AGAINST” Pluralsight’s
Merger Proposals by taking three steps:
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SIGNING the enclosed GOLD
proxy card,
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DATING the enclosed GOLD
proxy card, and
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MAILING the enclosed GOLD proxy card TODAY in the envelope provided (no postage is
required if mailed in the United States).
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If any of your shares are held in the name
of a broker, bank, bank nominee, or other institution, only it can vote your shares and only upon receipt of your specific instructions.
Depending upon your broker or custodian, you may be able to vote either by toll-free telephone or by the Internet. You may also
vote by signing, dating and returning the enclosed GOLD voting form in the postage-paid envelope provided, and to
ensure that your shares are voted, you should also contact the person responsible for your account and give instructions for a
GOLD proxy card to be issued representing your shares.
After signing the enclosed GOLD
proxy card, DO NOT SIGN OR RETURN PLURALSIGHT’S WHITE PROXY CARD UNLESS YOU INTEND TO CHANGE YOUR VOTE, because only
your latest dated proxy card will be counted.
If you have previously signed and returned a
white proxy card to Pluralsight, you have every right to change your vote. Only your latest dated proxy card will count. You may
revoke any proxy card already sent to Pluralsight by signing, dating and mailing the enclosed GOLD proxy card in
the postage-paid envelope provided or by voting by telephone or Internet. Any proxy may be revoked at any time prior to the Special
Meeting by delivering a written notice of revocation or a later dated proxy for the Special Meeting or by voting in person at the
Special Meeting. Attendance at the Special Meeting will not in and of itself constitute a revocation.
If you have any questions concerning this
proxy statement, would like to request additional copies of this proxy statement, or need help voting your shares, please contact
our proxy solicitor:
Okapi Partners LLC
1212 Avenue of the Americas, 24th Floor
New York, NY 10036
Call Toll-Free: (877) 279-2311
Banks and Brokerage Firms Call: (212) 297-0720
Email: info@okapipartners.com
PRELIMINARY COPY SUBJECT TO COMPLETION
Form of Gold Proxy Card
Pluralsight, Inc.
Proxy Card for Special Meeting of Shareholders
(the “Special Meeting”)
THIS PROXY IS SOLICITED ON BEHALF OF EMINENCE
CAPITAL, LP ("EMINENCE CAPITAL") AND RICKY C. SANDLER
THE BOARD OF DIRECTORS OF PLURALSIGHT, INC.
IS NOT SOLICITING THIS PROXY
The undersigned appoints Ricky C. Sandler, Bruce Goldfarb and Eleazer
Klein, and each of them, attorneys and agents with full power of substitution to vote all shares of common stock of Pluralsight,
Inc., a Delaware corporation (the “Company”), that the undersigned would be entitled to vote at the Special Meeting
of stockholders of the Company scheduled to be held on March 2, 2021, at 10:30 a.m. Mountain time via a live interactive webcast
on the internet at http://www.virtualshareholdermeeting.com/PS2021SM, including at any adjournments or postponements thereof, with
all powers that the undersigned would possess if personally present, upon and in respect of the instructions indicated herein,
with discretionary authority as to any and all other matters that may properly come before the meeting or any adjournment, postponement
or substitution thereof that are unknown to us a reasonable time before this solicitation.
The undersigned hereby revokes any other proxy or proxies heretofore
given to vote or act with respect to said shares, and hereby ratifies and confirms all action the herein named attorneys and proxies,
their substitutes, or any of them may lawfully take by virtue hereof. This proxy will be valid until the sooner of one year from
the date indicated on the reverse side and the completion of the Special Meeting (including any adjournments or postponements thereof).
If this proxy is signed and returned, it will be voted in accordance
with your instructions. If you do not specify how the proxy should be voted, this proxy will be voted “AGAINST” Proposals
1, 2 and 3. None of the matters currently intended to be acted upon pursuant to this proxy are conditioned on the approval
of other matters.
– – – – – – – –
– – – – – – – – – – – – – – – –
– – – – – – – – – – – – – – – –
– – – – – – – – – – – – – – – –
– – – – –
INSTRUCTIONS:
FILL IN VOTING BOXES “n”
IN BLACK OR BLUE INK)
Eminence Capital recommends that you vote “AGAINST”
each of the Proposals:
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FOR
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AGAINST
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ABSTAIN
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Proposal 1 – Pluralsight’s Merger Agreement Proposal
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□
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□
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Proposal 2 - Pluralsight’s Adjournment Proposal
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□
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□
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Proposal 3 – Pluralsight’s Compensation Proposal
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□
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IN ORDER FOR YOUR PROXY TO BE VALID, IT MUST BE DATED.
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Signature (Capacity)
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Date
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Signature (Joint Owner) (Capacity/Title)
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Date
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NOTE: Please sign exactly as your name(s) appear(s) on stock certificates or on the label affixed hereto. When signing as attorney, executor, administrator or other fiduciary, please give full title as such. Joint owners must each sign personally. ALL HOLDERS MUST SIGN. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer and give full title as such.
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PLEASE SIGN, DATE AND PROMPTLY RETURN THIS
PROXY IN THE ENCLOSED RETURN ENVELOPE THAT IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
Grafico Azioni Pluralsight (NASDAQ:PS)
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