Carolyn Herzog Executive Vice President and General Counsel, Arm Limited

WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

GUEST OF HONOR: Carolyn Herzog Executive Vice President and General Counsel, Arm Limited

THE SPEAKERS

Carolyn Herzog Doug Cogen Lior Nuchi Executive Vice President and Partner, Fenwick & West LLP Partner, Norton Rose Fulbright LLP General Counsel, Arm Limited

Dominic Robertson Karalyn Mildorf Kevin Anderson Partner, Slaughter and May Partner, White & Case LLP Partner, Wiley Rein LLP

(The biographies of the speakers are presented at the end of this transcript. Further information about the Directors Roundtable can be found at our website, directorsroundtable.com.)

TO THE READER General Counsel are more important than ever in history. Boards of Directors look increasingly to them to enhance financial and business strategy, compliance, and integrity of corporate operations. In recognition of our distinguished Guest of Honor and her colleagues, we are presenting Carolyn Herzog and the Legal Department of Arm with the leading global honor for General Counsel and Law Departments. Arm is a world-leading global semiconductor and software IP company, providing solutions for AI, IoT [Internet of Things], and security.

Her address focused on key issues facing the General Counsel of an international technology corporation. The panelists’ additional topics include mergers and acquisitions, technology and innovation, UK/EU digital tax proposals; national security and CFIUS; and intellectual property.

The Directors Roundtable Institute is a 501(c)(3) which organizes the preeminent worldwide programming for Directors and their advisors, including General Counsel. Join us on social media for the latest news for Directors on corporate governance and other important VIP issues.

Carolyn Herzog is EVP and General Counsel region, based in the UK. Carolyn has served at Arm. Carolyn joins Arm from Symantec on the European Board of the Association where she served as the Chief Compliance of Corporate Counsel as well as the Board Offi cer, Vice President and Deputy General for the National Cyber Security Alliance, Counsel responsible for the Offi ce of Ethics and prior to moving to the technology sec- and Compliance, the Privacy Program Offi ce, tor, Carolyn worked in the international Litigation, Employment, Product Legal, development arena, both in the non- Global Enterprise Go-to-Market, Americas profi t sector and with The World Bank in Sales and Services and License Compliance. Washington, D.C.

Carolyn Herzog Previously, Carolyn was the Vice President, Head of Legal and Public Affairs for Executive Vice President and Symantec’s Europe, Middle East and Africa General Counsel

Arm Limited Arm-based chips in products that connect Our People people, enhance the human experience, Arm was founded by a dozen engi- and make anything possible. Extensible, neers working from a converted barn in Arm defi nes the pervasive computing shap- scalable, and ever evolving, it is a founda- Cambridge, UK, a quarter of a century ago. ing today’s connected world. Realized in tion that confi rms how we lead by design By the end of 2015, that team had grown to 125+ billion silicon chips, our device archi- — to serve today, anticipate tomorrow. more than 4,200 people in sites around the tectures orchestrate the performance of the world. Arm gives its people the capabilities, technology transforming our lives — from ARM Company Highlights processes and infrastructure to enable them smartphones to supercomputers, from med- • World’s leading semiconductor IP company to develop and thrive as the business scales ical instruments to agricultural sensors, and and strengthens. At the same time, we seek from base stations to servers. • Arm technologies reach 70% of the global population to nurture a work culture that remains true to our founders’ original vision; empower- A Global Ecosystem of Innovators • More than 6,000 employees from 61 ing our engineers to be innovative and drive The foundation of a global ecosystem of nationalities Arm-based technology into all areas where technology innovators, we empower the compute happens, maximizing their creative world’s most successful business and con- • More than 130 billion Arm-based chips potential and enabling all of our people to sumer brands. Every day our thousands shipped to date be their brilliant selves. of partners embed more than 45 million • An ecosystem of more than 1,000 partners

KAREN TODD: Good morning. I’m Karen Todd, the Executive Director and Chief Operating Officer of Directors Roundtable, and I’d like to welcome you here today. I especially want to thank the law firms, Bar groups, professional groups, universities, and other organizations who invited their members to attend this event. We do appreciate it, and we hope that you enjoy the discussion.

I wanted to give you a brief on this program series. We honor General Counsel because they are the moral compass of companies, and they have a lot to handle. We wanted to give them an opportunity to tell you about their successful actions and how they deal with business in today’s changing world.

We’ve been doing this program since 2005, and in that time, we’ve honored over 50 Herzog and the Law Department of Arm. KAREN TODD: With that, I’m going to different companies internationally. Today, Carolyn has held the role of EVP and turn it over to Carolyn. we’re here to honor Carolyn Herzog and the General Counsel with Arm, the world’s Law Department of Arm. I’d like to acknowl- leading semiconductor IP company, since CAROLYN HERZOG: Thank you so edge all the people of the Law Department February of 2017. She joined Arm from much! It’s nice, because I was reminding of Arm who are here. [APPLAUSE] Symantec, where she served as the Chief the panel last night how much fun I had Compliance Officer, Vice President, and in law school, but that particular Dean Thank you. We’ve very glad you were able Deputy General Counsel. Carolyn is a very was not there when I was in law school. to be here. Arm has two different bases; one talented and sought-after professional. Prior [LAUGHTER] in the UK and another in Silicon Valley. to moving to the technology sector, Carolyn Obviously, it would be difficult to bring all worked in the non-profit sector and with the Thank you all so much for being here the UK people here, so we appreciate the World Bank in Washington, D.C. She is an and thank you very much to the Directors Silicon Valley people who are present. excellent Guest of Honor for the Directors Roundtable and our guests today for this Roundtable Institute. recognition. I’m truly grateful for this oppor- We have a distinguished panel that I tunity to represent Arm and our amazing Carolyn is an ideal candidate to address the will now introduce: Doug Cogan from legal team here. I’m also hugely appreciative key issues facing General Counsels’ offices Fenwick & West; Lior Nuchi from Norton to our law firm partners who support us in international technology corporations. Rose Fulbright; Dominic Robertson from every day, some of them through the fas- Her wide range of experiences in two major Slaughter and May; Karalyn Mildorf with cinating evolution of the company. You’ll technology companies, plus her wide range White & Case; and Kevin Anderson hear a little bit about that in this program. with Wiley Rein. of international experience, will ensure an engaging program. When I began my career, I couldn’t have Before we get started, I have a special sur- Congratulations to Carolyn for this worthy imagined the path that would lead me to prise for Carolyn. We contacted the Dean and well-earned honor. We are very proud where I am today. After honing my skills of the Law School of Wisconsin about this to be her law school. as a waitress, my first job was working event and she sent us this letter: on health and education projects at the My best wishes, World Bank in the African Department Dear Director Todd: Margaret Raymond in Washington, D.C. Now, I lead the legal Fred W. and Vi Miller Dean and It is my honor to be included in the Directors team for one of the most influential technol- Professor of Law Roundtable Institute World Recognition ogy companies in the world. It’s a company of Distinguished General Counsel Carolyn [APPLAUSE] that many of you probably have never heard

of. Along the way — as you heard — I worked rhinoceros, and they use this tracking device for many years with a company you proba- in the horn of the rhinoceros to help protect bly have heard of — Symantec — one of the them from poachers. With this, they drasti- world’s leading cyber security companies. cally reduced the killing of rhinos in Africa This path, and my role now, illustrate the as a result of being able to track them. challenges and the changing role of General Counsel for all companies as we look to the Implementing technology for good is very future. Let’s face it — we’re here in Silicon much at the core of what Arm does. It Valley, and all of us spend our days looking made Simon proud and excited to hear this towards the future. story. We hear these kinds of stories every day, where Arm technology ends up in the This is a photo from my days post-World most unexpected places being used for excit- Bank, after law school. I joked last night that ing opportunities. my father was a little disappointed that I was one of the few people — I went to work for As you can see from some of these statistics, a non-profit that was World Bank-funded — Arm is everywhere. Seventy percent of the that made less money after law school than world’s population uses Arm’s technology. before law school. [LAUGHTER] That’s usually a pretty surprising statistic for people. Ninety-five percent of all smart- I began my career in the pre-smartphone era, phones use Arm’s architecture. I guarantee before we saw the potential of a smartphone derives from an acronym, Advanced Risk the phone that is in your pocket or in your or supercomputer in your pocket, and knew Machines. Yes — we are so geeky that we bag today is using Arm’s architecture. how incredibly transformative that would have an acronym within an acronym for our be. Thinking back to what we wanted to name, but like an “artist formerly known We partner with over 1,000 companies achieve in those projects in Africa, the chal- as,” we are actually a name and not an in the Arm ecosystem, so we are all about lenges were often about unlocking the key acronym. My children asked, “What is that the partnership and 130 billion chips are to personal behaviors. I’ve worked on the leg company that you work for?” but it is shipped with Arm’s technology today. first regional AIDS project in Africa, and “Arm.” [LAUGHTER] recall being surrounded by these incredibly Our Chairman, Masayoshi Son, likes to smart economists and strategists — and yet What we do is we create technology that say that “trillion is the new billion,” orange the ultimate solution came down to culture powers everything from smartphones to IoT is the new black, and trillion is the new and predicting human behavior. We cannot [Internet of Things] to cars, robots, cellular billion! [LAUGHTER] solve for the world’s greatest needs without networks and more. We license that technol- taking into consideration culture, behavior ogy across the technology industry, where My choice to leave a successful company and and, of course, taking on some big bets. other companies then build it into devices industry in cyber security couldn’t have been Now, technology unlocks completely differ- that use services that you all use today. at a more exciting time. I was completely at ent opportunities and solutions. But some home and, honestly, absolutely thrilled with of that same technology brings new chal- I absolutely love hearing stories about how my management — people often say that you lenges for us in the legal field every day. Arm is used in the most unexpected ways. leave your manager — I did not. I loved my That’s incredibly exciting for us. I was traveling with our CEO — this last manager, and I absolutely loved the people week, we went to Tokyo — and he was at that I worked with (and I just waved to one I’m forever grateful for two things in this an event at the Tech Museum here in San of them) — it was just a wonderful company unexpected career path that I’ve taken. Jose the night before. He was looking at all and a wonderful place. I was one of the One, I have never, ever been bored; and of these demonstrations and was attracted to lucky people that could afford to be picky two, I’ve always felt that I’ve been doing one in particular. The presenter was incredi- about where I wanted to go next. something incredibly important to help bly excited when our CEO approached him make the world a better place. and said that he was Simon Segars of Arm. Choosing Arm was not just about the fasci- The presenter said, “Oh my goodness — we nating technology and the potential trajectory Now, Arm isn’t exactly a household use your technology!” Simon wasn’t aware of of the company. It was about the mission of name, but I can guarantee that you’ve all this at the time. They use the Arm technol- the company and the highly inclusive and used our technology. The name originally ogy to embed a device into the horn of a high-integrity culture to which I was going.

Arm is an amazingly employee-focused When I began my career, I couldn’t have imagined the company, with an incredibly long-tenured leadership. Some people in the audience path that would lead me to where I am today. After honing know these stories — our CEO has been my skills as a waitress, my first job was working on health with the company for over 27 years. He has a lot of interesting stories to tell. I some- and education projects at the World Bank in the African times have to remind him to slow down. I look at him blindly and think I have abso- Department in Washington, D.C. Now, I lead the legal lutely no idea what he’s talking about. We team for one of the most influential technology companies talk about “we,” not “I.” Arm is an incredibly curious company, and our people are in the world. — Carolyn Herzog willing to challenge the status quo. We have an Intranet chatter site where people will say aware that this is about the incredible team This also requires the foresight and the almost anything. In our open forums, they at Arm that is responsible for our success emotional intelligence required to leverage will challenge the CEO or me openly. It’s and enabling the success of the company. available resources all around us. A legal incredibly unique that way — people are not department is not about individuals per- afraid to challenge what they’re hearing or The Arm Legal and Public Affairs Team forming individual roles, but an ecosystem seeing, and to think about new and innova- is made up of approximately 90 profes- of resources which help us to rely on the best tive ways of doing things. Arm is absolutely sionals and, as Karen mentioned, it is version of ourselves. This includes choosing a global company with unique and wonder- primarily split between our headquarters in the absolute best outside counsel to part- ful people, and a very inclusive culture. I’ll Cambridge in the UK, our two U.S. offices ner with us on this journey. Relationships talk about diversity a little bit later, but we here in San Jose and our site in Austin, have never been more important inside and have the motto of “being your brilliant self.” which is heavily engineering based. One of outside the company, and we are always It’s not that we don’t have more that we our team members from Austin is here. We looking at what we are building and what is need to do in diversity — we absolutely do — also have a few team members located in changing and why. but the inclusiveness is absolutely apparent key countries. on a day-to-day basis. Our team has been recognized in the past, particularly for our IP expertise in Europe, Many Arm team members have been with but this is the first time that we’ve been rec- Integrity is also important. We believe in the company for tenures that rival my 16 ognized as a global team, so I want to thank technology for good, but the last thing years at Symantec, and we are bringing in you again for this recognition today. that keeps me up at night, as a General new talent every day. Our team includes Counsel, is people doing the wrong thing. other strategic functions. Like many legal People at Arm do not act unethically, and I also recognize that the team has to be departments, we have Trade Compliance; we they ask challenging questions. I find it very embedded across the business. We sit on have an Office of Ethics and Compliance; interesting — one of the first things that was some important committees and team areas, Public Affairs; and an Operations Team to apparent to me when I joined is that people not only as an executive team, but we’re help us run like a business. would ask the legal team, “Do you want to also involved in areas like our Investment check that with outside counsel one more Committee, the IP Steering Committee, time?”, which was not something that I had In this role, being a tremendously intellec- and the Executive Committee and Board experienced before in my career. tually talented lawyer is simply not enough. committees. We’ve developed an AI Ethics It requires a broader view of what the busi- Committee, which I’ll talk about later. We Now, you might recognize some of these ness wants to achieve, and a growth mindset sit on the Security Council. I encourage all handsome people in the room in this slide. to help the business get where it needs to people who have the opportunity to think It’s my pleasure to talk a bit about the legal go, while also managing risk. about where the legal department sits, and team at Arm, because the legal team is just what kind of influence you have across as unique as the company in which we oper- We are embedded within the business — your organizations. ate. I want to take a moment to acknowledge and this has always been true — but we also some of the amazing work that this team need to give the right advice at the right I’m going to talk a little about what it’s has been doing. Obviously, I’ve been with time as the business develops, allowing us like going through a period of transforma- the company less than two years, so this to act as a true business partner in achiev- tion. Of course, many of the people that recognition is not about me. I’m very well ing the company goals. know Arm also know that a little over two

years ago, Arm was acquired by SoftBank The company is entering new markets, has been a new learning experience, and and taken private. This event has pushed and we’re entering into new types of incredibly challenging. the company through a massive amount of relationships. We have new technology change. As a result, our legal team needs to developments, and our technology is also One of the things that’s also transformative think about how we are evolving and chang- entering into new devices, like cars, robots for me — and I would expect many of you ing with the business. and almost anything that is using machine are also thinking about this, and certainly learning and AI. outside counsel is thinking about this — is I often say that nobody works in technology that today, and as we look to the future, if you’re not somewhat addicted to change; We’ve also chosen to take a stand on some every company will be a technology company. otherwise, we’d work in a dentist’s office. issues that we see as important for our busi- We were speaking last night about farming Transformation requires more than just this ness, but also for the industry as a whole. — farming and automated tractors — even “change management skill” that we like to The legal team is taking a more active role as farming is a technology company now. The talk about a lot. It’s not a simple concept, a partner to the leadership and the business ability to partner and lead through trans- and it’s not just around adaptability or say- areas in driving the future of the company. formation is a critical skill for General ing, “we’re open to change.” Counsels and legal teams going forward. We ask powerful questions; we ask “why,” Where Arm works in an ecosystem, we’re As a leader, when we’re going through this “how,” “when,” and “who with.” We are thinking about all the companies that we parenting the heck out of our company, partner with and the companies that they kind of transformational change, I’m look- because we are in deep, and we are every- serve, and this is all about technology in ing for change champions — people that where. Like parenting, we also have to learn the future. want to be a part of change — visionaries. when to let go. We are automating; we are Leaders who are not just comfortable with letting our smart, talented leaders make Because of the rapid growth of new tech- ambiguity and are willing to take on risk, but judgment calls for themselves; and we are nologies, technology is transforming every who are accountable professionals and who giving them guardrails so that we are only company into a tech company soon. At know that it has to be the right risk at the involved when they need us most. Arm, we see — as I mentioned earlier — one right time with all the right protections. They trillion connected devices being online by know that what we value most, and what our We engage where we add the most value. We 2035. The Internet of Things, AI, auton- most important assets are, what has to be continually look for these opportunities to omous vehicles and more will be enabled protected — and where we sometimes have to let go. Then we also have to look for those by these devices. That is going to lead to a let go. We also have to protect our culture, twists and turns in the road, so that we can transformation of every business and their and we have to be thinking about our cus- plan ahead. In a global economy where tech- interactions with partners and customers. tomers first and know what they value most. nology is almost always preceding regulation, we have to use our knowledge and skills to We are already seeing this in cases where The strength of the Arm legal team is crit- be more predictive than ever before. linked data systems have led to one com- ical now, and like many companies who pany’s systems being compromised by have been in the tech industry for a while, One of the interesting things about another’s. Where are the liabilities when Arm’s business is transforming rapidly. The working with SoftBank is that we don’t corrupted IoT data leads to a failure of a trajectory of our opportunity is both excit- do one-year planning and two-year partner’s system or equipment? If a land- ing and very daunting. planning. We do 10-year planning. That scaper installs a smart watering system for

a customer and the poor security settings of Now, Arm isn’t exactly a household name, but I can that system cause the broader smart house to be hacked, who is at fault? That is not a guarantee that you’ve all used our technology. The name far-fetched scenario. There has already been originally derives from an acronym, Advanced Risk a situation where a smart fish tank system in a casino was hacked and used to gain Machines. Yes — we are so geeky that we have an acronym access to the casino’s customer files. within an acronym for our name . . . — Carolyn Herzog These examples don’t even get into the incredible increase in personal data com- What are we afraid of? What should we competitive. The future of every company in panies will possess in the AI era, or the be afraid of? Are the movies all wrong? this room is based on the premise that people implications of explaining AI decisions We know that AI is being used now for will open up more of their lives and per- when people don’t agree on the outcome. credit scores, for bail or sentencing recom- sonal information to technology. We need mendations, and for guiding social media to be trusted in order to make this happen. This brings me to an issue that we’ve been results. With the fear of the unknown and thinking about a lot in the company. There all of these horrible headlines, it’s easy to AI is arguably the biggest economic and have been a lot of discussions about AI, see why people are forming a negative view technological revolution to take place with every day bringing new headlines into about AI. This technology is still relatively in our lifetime. It’s not news that we are how AI will either save the world or destroy unknown in terms of how it’s being used expecting this data explosion; computing it. Recently, I went to my nephew’s grad- today, and what it can do. is everywhere. Everywhere there’s comput- uation in Boston. As soon as we entered ing, there will be intelligence. How do we into the museum at MIT, there was a father This is one of the biggest challenges for the device the intelligence from all of this com- walking behind his daughter, saying, “I am a future of AI, and it’s already impacting our puting power? There is another challenge robot, must destroy!” This is the image that lives on a daily basis. How do people feel that Arm is prepared to tackle. In order to we have of robots and artificial intelligence. about it? best serve our global customers of AI and The debate around artificial intelligence has the data consumer, we must be able to keep created a lot of mixed feelings on this sub- How do we form our views? Is it by how up with these global solutions. With the ject. Our own research at Arm has shown it’s being used currently — do we under- data explosion, there is an ever-increasing that people are excited about the opportu- stand it — or is it most likely by movies interest in the need to protect data. There nity for AI, and also these opportunities and books — by I, Robot, by The Terminator, are inconsistent global views. That’s proba- to transform healthcare or transportation. by Transformers, Minority Report — I’ve bly not news to anybody in this room. It’s They’re also concerned about the potential seen them all — War Games, The Matrix, nice to have a global panel, to be able to for AI to be hacked or to cause harm. and Blade Runner. We’re probably more talk about that. There has to be a balancing influenced by these movies than by how of the fragmentation of regulation and the Arm research has shown that 75% of people AI is actually being used. We know that globalization of commerce and technology. are concerned about autonomous vehicles this is the generation of AI and the data We have an interest in being able to provide being hacked; 85% are concerned about AI revolution; it’s already upon us, it’s already global solutions, but fragmentation of tech- itself getting hacked; 57% about AI that will happening. We want to be able to tell a nology and fragmentation of regulation will become more intelligent than humans; and different story, because the reality is that the never enable us to be able to provide those 60% are concerned that AI will be used by data revolution and AI are happening; it is global solutions. criminals. This is actually not unfounded going to happen, and it’s important to build — 2017 research proved that AI is actually trust around this important technology. Foundationally, digital protectionism or the good at generating spear phishing attacks localization of data is inconsistent with the on social media faster than humans. AI relies on massive amounts of informa- principles of AI innovation, which is about tion and data, to be able to learn. If we open and fair markets. We are constantly Right now, AI is battling a massive trust want to use more personal AI, we have to looking at the top key issues, such as data issue. Of course, there are concerns about be able to give it more of our personal infor- protection, cyber security and consumer AI and the black box — this closed system mation. I was hearing a story about some rights. There is also a competition question. that receives input and produces output, but interesting case that was in Canada earlier, Honestly, when you consider the apparent actually provides no clue as to how or why a and we have to be able to look at this global imbalance between western use and our decision has been made. landscape and see how we are going to be interests of governance, and eastern use

— such as China — and governance, there this, society, companies and governments is just an imbalance in how we are able to have a responsibility to protect information compete in a global market. not only because data privacy laws say we must, but because ethically, securing and Why does Arm care? Why is Arm involved? responsibly managing our employees’ and One, with the growth of devices in AI and our customers’ information is a transparent intelligence at the edge, Arm is going to and consistent matter as the right thing to play a critical role in the future of AI; and, do. Companies and customers care. therefore, we have an obligation to participate and lead in the discussion of ethics. Generally, becoming a trusted solution We know that technology moves faster than can not only be solved by legislation or regulation, and that by leveraging an ethical litigation. Both of these generally move too discussion and encouraging everyone to do slowly, but technology is advancing and the the right thing, we can influence law and risks are too high, so advancing discussion regulation. I don’t know if everybody agrees around these things is incredibly important. with me, but that’s what I believe. I’m going to talk a little bit about privacy Culture will create a diverse perspective, so and security, because you can’t talk about there is, in ethics, no one culture; there is ethics and managing data without talking no one rule of law that everyone can agree about them also. Of course, I’ve spent a on. How do we implement, globally, a view lifetime talking about these things. around ethics and morality? One of the key components of our contract tech report. It’s a public commitment with I believe the answer lies in diversity, and with customers is data privacy. It’s interest- about 60 global companies, including companies can’t answer this question alone. ing, because people always seem to sit on Microsoft, to protect and empower civilians We need the partnership of a diverse com- different sides of the fence around “do you online and to improve security, stability and munity which includes governments, public care a lot about it?” or “are you bored by it?” resilience in cyber space. and private debate, and a lot of interaction. It’s incredibly important, and I can’t stop talking about it, but I also think that you As I mentioned, I spent about 20 years I don’t have all the answers, but within can’t discuss data privacy [pronounced with working in the field of cyber security before Arm I’ve chaired an AI Ethics Working a short “I”] or data privacy [pronounced Group. Arm is preparing to release for with a long “I”] — whichever way you want moving to Arm. It’s still very much a critical public discussion an AI Trust Manifesto to say it — without a real focus on security. part of my role as General Counsel. There together with an AI Code of Practice, to It’s no longer an issue of whether you’re a are probably very few General Counsels in bring together the strength of collaboration technology company or you don’t consider the world who are not extremely focused within the Arm ecosystem and a discussion yourself a technology company. You can’t on responsibilities around data privacy around this important topic. omit focusing on the responsibility around and security. It’s also much on the minds customer data. You cannot be competitive of boards and executives in every company, In this manifesto, we address issues such in any world, and certainly not a world and, of course, it’s on the minds of the as bias, transparency and accountability, around artificial intelligence, without focus- companies that we serve. It is increasingly responsibility — discussing topics like ing on data privacy and responsibilities a part of our daily lives. liability and insurance and the future of around security. jobs. Another “why” is that this is core to There are not only legal and regulatory our foundational principles that we are in Arm has now produced a second security requirements around privacy and security, the business of developing technology for manifesto, encouraging all companies to but this is an area of responsibility that good. Trust promotes adoption — it’s good take a collaborative responsibility around is increasingly, as I’ve mentioned, an area for business — we need full transparency. discussions around security and sharing of ethical responsibility. If you have some more information around security. I encour- responsibility as a chief compliance officer, We are producing and analyzing more data age everyone to go to our web site and read or you’re connecting with people that are than ever before and have more powerful that. It’s a helpful document and very easy responsible for ethics, you’ll find this more tools at our fingertips than ever before. With to read. We’ve also participated in a cyber and more in that area of dialogue.

like Canada will pass a more country-wide and fundraising. In just 12 months, our legislation. It will be interesting to see what people at Arm helped to raise and donate will follow on from GDPR. Again, fragmen- over £1 million to charitable contributions. tation is not a good thing in terms of how do we better serve our customers; how do Contributing to my community and sup- we implement a more global solution from porting D&I is in my DNA. These are a technology perspective. things that I’ve always believed in, and believed they were the right things to do. The final topic I want to talk about today is They motivate me in my day-to-day work. one that is, again, not only near and dear to It’s easy and innate for me. I recognize that my heart, but critical to the future of legal I can’t bring people along just because it’s professionals — and that is diversity and the right thing to do. The strategy is not inclusion. Like ethics of AI and data privacy working in domestic politics today, and it’s and security, we have to look beyond the certainly not the right way to engage in the legal requirements and risks to the broader office. Now, more than ever, I have an obli- benefits of a more diverse, inclusive and gation to speak my truth. fully engaged workforce. While remaining open and inviting to I’m happy that Arm shares my belief that opinions and perspectives of others, I also people must have an equal opportunity to believe that coming to the table with solu- In security, we’re very much aware of find success in any business. It’s the law in tions, rather than just speeches, is essential. most countries, and the right thing to do. increased regulation in this area and a Here are a few things that I will do: I will A more diverse and inclusive workforce is potential for greater fines, lawsuits and bad invite everyone to the discussion, and I will a stronger and more innovative workforce, press. The court of public opinion is weigh- be open to different views while making and companies are better for it. ing in more and more, and certainly, in my views clear, defensible, and enabling privacy, we’re seeing the same. company objectives. I will create a positive At Arm, we have a belief in being your bril- platform to help my company attract and liant self. This isn’t just a nicer way to say Being hacked or experiencing a security inci- retain very diverse talent. I will vote, and that we comply with the laws for EEO [Equal dent is not a matter of “if” or “when”; it’s I will encourage others to vote. I will give a matter of “how often,” these days. These Employment Opportunity] and discrimina- credit where credit is due. I will invite diverse days, we’re dealing with privacy by default, tion; it’s a core belief of the company that voices to the table. I will resist settlement and privacy by design, we have to constantly we want different perspectives, and we want agreements for substantiated allegations of ask ourselves if privacy is designed into our ideas born from life experiences that span a sexual harassment. Harassment is a viola- systems, into our products, and where else range of cultures and countries. The world is tion of our code of conduct and the law. does privacy need to be designed in. becoming more diverse and connected every day, we need ideas that reflect that diversity. I also want to note that the world faces some GDPR [General Data Protection Regulation] We demonstrate this in our commitment was a wakeup call for everybody to look to corporate responsibility and sustainabil- massive global challenges. Climate change, in every possible system and every possi- ity, and through our D&I [Diversity and collusion, poverty and inequality in edu- ble product to see, “Are we doing all the Inclusion] programs. Through our Employee cation that is designed for the 21st century right things?” Now, with the California Community Engagement Program Team and available for everyone. We all know that Consumer Privacy Act, like one of our infa- Arm, our people are using their skills, expe- technology is a great opportunity for posi- mous wildfires, it’s a bad joke this week rience and expertise to create sustainable, tive transformational change. We need to be — but we’re all actively watching and waiting positive change in the communities where doing more, and to prove it, the news about to see how are these regulations going to be we are based. tech these days just isn’t helping our image. enforced — are we going to see more frag- Emerging technologies like AI and IoT have mentation in the United States? I was asked Last year, members of Team Arm con- an incredible opportunity to help solve major earlier, is it possible that we’ll see a federal tributed more than 9,000 hours — the challenges. Arm is participating by focusing law passed in the United States? I would equivalent of over 1,000 days of community on the UN’s 2030 Sustainable Development like to see that, but I don’t think it’s likely. time — to tackling sustainable development Goals. These are also called the Global We’re seeing whether or not other countries goals, through campaigning, volunteering Goals, and you may have heard of them.

It’s the world’s most comprehensive to-do As you can see from some of these statistics, Arm is list today, aimed at ending extreme poverty, fighting inequality, and being the last gen- everywhere. Seventy percent of the world’s population eration threatened by the effects of climate uses Arm’s technology. That’s usually a pretty surprising change. The Global Goals are adopted by 193 governments and an ever-increas- statistic for people. Ninety-five percent of all smartphones ing number of businesses. Arm was even involved in developing these 17 goals. The use Arm’s architecture. — Carolyn Herzog 2030 Vision is an organization that Arm founded. We’ve partnered with the UN’s I also recently learned that Arm is sup- decisions. The Oculus VR headset that I system and other organizations who under- porting the difficult task of tackling bias in used has an Arm processor. It’s the same stand the problems that need solving and the classroom, and through an interesting foundational IP that powers our phones, our are now reaching out to the broader ecosys- collaboration. I’d like to show you a short traffic systems, and pretty much all the tech tem to identify solutions and to demonstrate video to demonstrate how Arm partners. I used for coding. positive power of emerging technologies. Teachers are immersed into a virtual [VIDEO PLAYS] We also commissioned research to look at classroom, and they are tested for things like the role of technology in goals and the com- their expectations that might be influenced I felt insulted; I felt defeated. I got my Masters mercial opportunities they represent. by race or by gender. We can see what in Interaction Design. I was the only woman students they look at the longest, who they of color in my class. The teaching assistant The 2030 Vision represents an incredible interact with, and also their response times. would tell me that he would think things way to support Global Goals and to unlock Teachers want to provide their students with were too complicated for me; that he didn’t commercial opportunities at the same time. quality of care, especially those who may need to see my work — he already knows Arm has a long-standing commercial part- need it most. nership with UNICEF [United Nations what grade he’s going to give me. The bias International Children’s Emergency that I was subject to made me feel defeated. It’s great, because we have this tool that allows us to see and experience our bias in a Fund]. You may wonder why UNICEF, The day I was going to quit the course, the VR environment, and it makes it possible for and how we made this connection. As a program director told us that he was giving us to change our attitudes in the real world. for instance, re this partnership, Arm initi- us an assignment for our master’s thesis, to ated a Wearables for Good Challenge. The solve a social problem using technology. My name is Clorama Dorvilias, and my winner in 2015 is called Khushi Baby, and innovation is made possible by Arm. it’s recorded 80,000 vaccinations in India, In that moment, I decided I wanted to and has helped to achieve the support of take this experience and apply my skills [END OF VIDEO] the Gates Foundation to start scaling. to reverse racism and sexism in the Our support has actually increased fund- workplace. I discovered terminology like Another interesting way that Arm’s ing for this incredible new technology, “microaggressions,” “implicit bias” and technology is being used for good, and I and with UNICEF, the Gates Foundation “empathy gap.” love that video! has become the first private company to You cannot force people to empathize In closing, I just want to share that I’m for- cobrand with this product. with someone else. That’s why I started tunate to have grown up in an environment using virtual reality to develop immersive We’ve also started, with the Gates where my belief in fairness and justice was experiences, where people’s bias is tested Foundation, a Global WASH [Water, nurtured and encouraged. While I didn’t in a gamified world. Sanitation and Hygiene] Challenge, calling actually set out in life to be a lawyer, I for innovators and entrepreneurs to pro- The thesis project went well. We had very believe that this foundational belief must mote technologies to support solutions that positive reactions. Oculus Launch Pad have informed my decision to become a law- make it easy for the urban core to access was a huge training point for me. I met yer and go to law school. I certainly didn’t safe, clean water and sanitation services. my collaborator, Jessica Outlaw. She plan on becoming a technology lawyer, but was interested in eliminating bias in the perhaps being involved in something that is This is just another example about classroom. Our project is called “Teacher’s constantly changing and possibly disruptive how technology can be used to address Lens.” Teachers are tested on their is just a comfortable place for me. Certainly, problems on a global scale and used for unconscious biases by being placed in a my nature as a teenager seems to inform good solutions. virtual classroom and asked to make certain that. [LAUGHTER]

What’s my obligation as a General Counsel? CAROLYN HERZOG: It is unique, and One is to ensure that my team is prepared to certainly, Arm’s voice at the heart and soul act as change agents; that we can make prac- of the company is definitely in the U.K. tical and ethical decisions; that each team Most of our customers and our partners — member knows what they are here for, and the same thing — are in the U.S. or in Asia. why, and what they can do to help us move By being in the UK and having that global forward; together, to instill a sense of pride presence, it’s a uniquely, globally-minded in helping other people inside the company, company. Having worked at the World as a core element of our job, or doing some- Bank and at Symantec — both very global thing meaningful within our community. companies with very global customers — Arm is uniquely global in that mindset, and There are endless opportunities to enable it has to be very global in that mindset. positive change, and there is no better place or time to be a part of this amazing global, KAREN TODD: Thank you. Our next innovative practice. speaker is Doug Cogen from Fenwick & West.

I will leave you with a quote, because I DOUG COGEN: I am going to do two believe somebody else has always said it things today with my time. One is to talk better than I have. It is from one of my a bit about what we’re seeing at Fenwick in Despite the reality that I’m now looking at heroes, Eleanor Roosevelt — who, by coin- the tech M&A market. I’m an M&A lawyer my first child getting ready to go to college cidence, my grandmother designed several and have been running the M&A practice and explore the vast wonders of opportuni- suits for. This is quite ironic, as Eleanor ties in the world, I couldn’t be more excited at Fenwick for about 20 years. Fenwick’s ´ ´´ to be working in this industry and in this Roosevelt was 5 11 and my grandmother one of the indigenous Silicon Valley firms. company with this team right now, as the only designed for petites — not surprising M&A’s a big piece of what we do. I have generation of disruptive technology is in full looking at me! You may be aware that San a lot of colleagues here from other practice flight at such an innovative time. Jose has been voted the “happiest city in groups at the firm. I’ll talk a little about the United States” by Forbes, and through what we’re seeing in the marketplace, and Today’s youth, from kindergarten through several studies. I’ve lived in many places, then also talk about a case that came down university, represents the first generation of and I found that quite curious, but this last month, which is one of the more signif- young people to grow up with disruption quote by Eleanor Roosevelt brought it home icant cases in M&A law that’s happened in and innovative technology. They’re at home for me. She said that “the most unhappy the last few years. I’ll help you understand in the midst of this accelerated rate of change, people in the world are those who face the about that case, because it’s important. replacement and innovation. While I lament days without knowing what to do with their the loss of the mom and pop bookstore and time. But if you have more projects than First, what we’re seeing in tech M&A. So remembering what it was like to just look up you have time for, you are not going to be far, global M&A in 2018 is approaching at the stars without the use of technology, an unhappy person. This is as much a ques- $3 trillion, which is an absolute record and getting lost in my thoughts, we can cel- tion of having imagination and curiosity as that shatters prior records. U.S. M&A is ebrate that today’s youth is more connected it is in actually making plans.” up 25%. Interestingly, overall deal count and more aware of global challenges than is down a little bit, so we’re seeing slightly any generation before. This positive disrup- I hope you leave here today with a little fewer, but much bigger, deals. Every day we tion provides them with key insights into big more pride in the power of our profession see a new giant deal; you just saw the IBM/ issues, such as closing the gap between rich to do good, and a little more curiosity about Lenovo deal; SAP just announced a huge and poor, protecting the environment, and a Arm, and also of our role. Thank you very deal yesterday; and earlier in the year, we sense of social justice. much! [APPLAUSE] did the acquisition of GitHub by Microsoft — a $7.5 billion deal. Companies are pay- Their powerful thinking and their ability to KAREN TODD: Before we move on to ing top dollar for key technologies that help use big data and modern technology will our panelists, I have noticed that Arm is them achieve the goals that Carolyn was enable them to address these global chal- unique in having a presence in the UK, as talking about that Arm is seeking. lenges better than previous generations. I well as the U.S. What have you seen as a might have mentioned earlier that I am an general counsel in that dual structure that’s There has been a bit of a slowdown in incredible optimist, as well. unique for you? Q3, and a couple of things driving that,

which probably won’t surprise you. One is environment to raise debt in, even though Also, companies are continuing to ratio- U.S. inbound M&A — and you’re going interest rates are creeping up — as a matter nalize their portfolios and optimize their to be hearing some more about CFIUS of government policy, almost universally, businesses. There are a lot of good busi- [Committee on Foreign Investment in the in the west. We’re still seeing a very favor- nesses housed within large companies United States] later in this discussion — is able environment in which to raise huge that don’t make sense any more for that down, and that is, in all likelihood, due to amounts of debt. There is very big equity company for margin reasons or strategic government policies and some of the changes support — we’re seeing a lot of IPOs in reasons. That’s driving companies to divest in CFIUS that make it harder to do deals for the U.S. equity markets — more than we’ve those assets and put them either in the foreign acquirors. Obviously, Chinese invest- seen in the last five or six years. There’s hands of a strategic or a financial buyer who ment is particularly affected by this, and I’m a lot of sovereign wealth and other lim- has a better use for them. sure that’s not surprising to anybody. ited partner-type equity investors who are willing to support large multibillion-dollar Seventy-three percent of companies, in an That’s starting to enter the boardroom in transactions. That’s become an increasing EY survey, said that transforming their port- terms of what deals are doable and what part of what we’re seeing in the Valley. folio and rationalizing it and focusing their you can get through the regulatory envi- Sectors are consolidating for the reasons business is an objective. Nearly 90% of ronment. Probably, there’s not too much you’ll appreciate. companies plan to do a strategic divestment surprise there. in the next two years. That’s a tremendous One of the more interesting things to call statistic. Divestitures, by the way, are an art. It’s interesting — I put this slide together out here is stockholder receptivity to the They are at least 20 times harder than an without coordinating with Carolyn before — big transformative deals. Just to go back acquisition. They are hard to get companies but if you look, virtually everything on this to that Microsoft deal when they acquired organized around. There are obviously a list is something Carolyn mentioned. The GitHub for such an extraordinary price, lot more issues that come up when you’re chip sector is incredibly active. Arm and the the markets might have been shocked or trying to figure out how to put the assets companies it competes with and partners disturbed to see such a high multiple deal. and the people and the resources together with are out there doing deals. We’re seeing Instead, the markets almost universally to create a viable business and pull that out a tremendous number of deals focusing on cheered Microsoft making that transaction. of a company. That’s a very difficult thing SAAS [software as a service] business mod- It had a lot to do, actually, with why IBM to do — it’s a lot easier to just buy the stock els. We at Fenwick have also been doing chose to pay what they did for Red Hat. of a target you’re interested in. a ton of gaming-related deals in gaming Stockholders in the stock market get it, and technologies. FinTech, blockchain-enabled they are rewarding companies and their We’re seeing significant revenue multiples technologies, have been tremendously stock prices in terms of supporting what in software M&A. I mentioned a few of the important. Obviously, security and cyber they see as transformative deals and deals deals with eye-popping prices being paid for security is the number one issue in virtually that help bring them into the next stage of companies. Companies are willing to buy every boardroom in the world right now. technology development. earlier and buy bigger, and profitability can Companies that can find acquisition tar- come later. That’s the Silicon Valley way; gets that help them scale in cyber security In the United States, we had a tremendous it’s how some of the big companies that and become more relevant to that market boost from repatriation. Everybody under- are household names built themselves into are tremendously important. Then, again stands the basics there, but a lot of cash being the largest companies on the planet. — as Carolyn was talking about — machine came into the United States, and there’s learning and AI are driving a tremendous a “use it or lose it” mentality in board- We’re seeing a lot of these same trends, in amount of deal activity. Companies almost rooms, where the stockholder community terms of union of government policy, of universally — probably Arm is one of the is pressuring companies to return that market reaction, and that’s going to keep few exceptions — feel like they are way money in the form of stock buybacks or driving deals. behind where they need to be. We are cer- dividends. Boards who want to do some- tainly seeing a lot of car manufacturers and thing transformative with that cash need to This, I thought, is very interesting. I wanted first-tier automotive suppliers very active in do acquisitions. That’s been driving a lot of to make sure I included this in my slides Silicon Valley, and the whole autonomous deal activity, as well. Stockholder activism today. I have two clichés that I will bust in vehicle area is obviously huge. — as everybody appreciates — has become my conversation today. The first one, peo- an ever-increasing dynamic in U.S. markets, ple have always said — since I’ve been doing What’s driving deal activity, in addition to and that drives deal activity both on the sell M&A now for a couple of decades — “most strategy, continues to be a very attractive side and on the buy side. deals don’t work.” Most M&A doesn’t

achieve the objectives that the companies Open source compliance is a huge area. thought they would achieve when they went Obviously, deep diligence is needed into IP into the deal. This was a global survey done [Intellectual Property] ownership, misappro- by Deloitte, and the question was asked, “Did priation, and infringement issues. Chain of the deal generate the value or the ROI that title, all these questions around the ownership you expected it to?” Look at the difference, and potential exploitation of IP in terms of as you go into 2017, of how many compa- existing contractual relationships, and license nies feel like the transaction did achieve their terms are a huge area. Usually, the largest sin- objectives. This is just astounding. When gle cost center in any transaction of scale we you look on the left side of the slide, you see work on, is IP and commercial diligence. how few companies, in looking back on the deals they did in the prior two years, didn’t In terms of process, we recommend hav- feel they generated what they had hoped it ing an intensely iterative diligence process, would, in terms of an ROI. The vast major- where you’re interviewing target company ity of both strategic and private equity buyers employees, doing your hard research with feel the majority of their deals are success- documents, bringing that back into the deal ful, and only about 25% or less didn’t work. terms and just educating the client. When That’s pretty interesting, when people walk we do deals for Arm, we have regular all- around and say, “M&A doesn’t work,” most hands meetings where we’re talking about companies are actually saying it does. the key issues in the transaction; everybody’s getting up to speed together. That improved the product and made it more I’ve done about 150 deals for Cisco, and a feeds back into the next loop of diligence; reasonably priced and more comprehensive. famous old saying of John Chambers, the into the deal terms; and having that robust They are able to move faster in the course long-term CEO of Cisco, was, “If every one of iterative process is critical to having a suc- of getting a deal done to actually put it in our deals is working, we’re not doing enough cessful, no-surprises deal. place. It’s definitely a growing trend, and I’d deals.” The feeling is, “Go out there and be more aggressive.” What this shows is more A few quick observations of what we’re see- expect to see more of it. and more deals are achieving their objectives. ing in the marketplace in key areas. There is more emphasis on IP reps having more exten- One of the big fights we’re having a lot in Diligence is something a lot of the folks in sive indemnification in escrow and support deals and the value these days is the ques- this room do; it’s one of the main things we around them. This is also true in the tax area. tion of if there are indemnification claims do for Arm in the transactions we do for This creates an issue, because a lot of the tar- made, and litigation-related costs, whether them. Some of the things we’ve been seeing get companies are VC [venture capital]-backed or not you need to prove that there is an over the past year is a changing regulatory companies. To the extent that you have underlying breach of the rep in the contract environment. As Carolyn mentioned, target indemnification for a longer period of time in order for the acquiror to have recourse to companies have relatively weak compliance than a 12- or 18-month escrow, that creates a the escrow to cover the defense costs. programs. They need a lot of help there; real issue for the VC funds in being able to they just don’t have the architecture; they distribute the proceeds of the deal out to their Generally, historically, the idea had been don’t have 90 legal staff — sometimes limited partners. It’s an area of real tension. that you had to prove that at the bottom of they don’t have any legal staff, and yet these the pile, there was a breach, in order to get are companies selling for $1 billion. One of the ways this is being addressed indemnified. It’s evolved over the last five — although less so with strategic buyers years or so. Most acquirors are successfully There is data privacy, obviously, and a quickly than with financial buyers, and less so in getting the term that any claim made arising evolving regulatory environment, particularly the United States than in Europe since we out of the acquisition should be indemni- in Europe. Companies are just barely catch- have a lot of UK and European lawyers in fied, whether or not there’s a breach there, ing up. When it comes to GDPR compliance the room today — is with rep and warranty on a “but for” theory. these days, we find you almost can’t ask insurance. It’s coming on, and just barely the question, “Are you in compliance?” The being adopted by strategic buyers in the I’ll now shift to the second piece of what I question is, “What are you trying to do to U.S., but it does seem to be the trend, and wanted to talk about. I’m going to do this start looking forward to compliance?” Most the product has gotten a lot better. The rep very quickly, I condensed one of the longest target companies are barely catching up. and warranty insurance companies have opinions I’ve ever read. [LAUGHTER]

It was a nearly 200-page opinion by the We have an Intranet chatter site where people will say Chancery Court, because they knew what a big deal it was when they were deciding this. almost anything. In our open forums, they will challenge I’ve condensed it to three slides. This was a the CEO or me openly. It’s incredibly unique that way — case that came down early in October 2018. It’s called Akorn v. Fresenius. Fresenius is people are not afraid to challenge what they’re hearing or a German pharmaceutical company buying a U.S. biotech company. Hopefully, every- seeing, and to think about new and innovative ways of body appreciates what the role of a material doing things. — Carolyn Herzog adverse effect is in an acquisition contract. An MAE [Material Adverse Effect] is the — you get to the brink in MAE litigation, potential fraud. The whole situation was standard by which the acquiror is held to and something changes; the price changes, very dire at Akorn. They were trying to deal acquire the target if there are declines in the or the parties walk away for a termination with these compliance issues; more and target business, between signing and clos- fee, or something. A great many deals walk more kept coming out over the course of ing. It usually has two functions in a deal: up to the MAE line, but don’t actually get to the deal; but the business was falling off a one is pure decline in the business; without the point where the court makes this deci- cliff at the same time. a representation in the acquisition agree- sion. Here, the court made the decision and ment saying the business is great. There are decided in favor of the buyer. To put some numbers around it, because a hundred other possible representations: they’re interesting, to remediate their regula- “I own my IP; I comply with law,” etc., but What was the story here? The business tory problems, even the target company said there’s no rep that says. “My business is just of Akorn had a horrific decline in perfor- this was nearly a $50 million fix. The buyer fine, thank you.” What there is, instead, is mance. (These are quarterly numbers in my said it was a $250 million fix with about the concept that if the business suffers a slide.) Quarter after quarter, the business, a $2 billion valuation impact. The court catastrophic decline between signing and revenues were declining by about 30% each ultimately found it was about $1 billion closing, and that decline is going to go to quarter. It took about a year to get this deal valuation impact, which was about 20% of the heart of the bargain, the idea that the up to the point it otherwise would have the value of the whole deal. Keep that 20% long-term value of the company has been closed. It had a long sign-to-close period. number it in your mind as you go back to impeded in a very fundamental and signifi- The income of the company was falling off your companies and law firms, because a cant way, maybe the buyer should be let out a cliff, as you can see. A whole bunch of lot of folks are now wondering, “Is 20% of its obligation to close the deal. Delaware things were happening in the larger environ- some kind of measure now?” The court courts historically had been very reluctant ment both to Akorn and others, in terms of was careful to say, “Don’t take it literally. It to let buyers out of acquisition contracts, its products, that were creating issues. The doesn’t mean a 21% decline in valuation is for obvious reasons, considering how dis- reason I italicized disproportionate effect is an MAE.” But now, people are very mind- ruptive that would be to the target company when you define MAE, often what you say ful of that number, and as lawyers now who’s announced the deal. is if this bad thing happens, it’s potentially negotiate deals, you’re going to think about an MAE; but not if this bad thing is hap- whether you take that number into account It is the second great cliché that M&A pening to everybody in the industry. If it’s and you explicitly say, “We don’t mean 20% lawyers always say, “There’s never been an just part of a general downward trend in to be a valuation decline to be an MAE” or MAE declared by a Delaware court.” That the industry, then the buyer shouldn’t be otherwise try to define it in a more bright- has been said a thousand times by every let out of its obligation to buy the company. line way, which, of course, has risk. Any M&A lawyer. Now, there has been. That makes sense on a gut level. In this time you define something in a bright-line situation, what particularly drove it is Akorn way, you’ve made it easier — potentially, if What is at the heart of the Akorn v. Fresenius also was having horrific FDA compliance you hit that bright line, now you’ve got it. decision is that the Chancery Court decided issues. They had a whistleblower; there were There’s always an interesting question there that the things that occurred in the Akorn clearly data integrity violations. For anybody of whether you put specific numbers in. company — and we’re going to talk in the who works with FDA-regulated companies, next slide about what those things were — you understand the significance of this. The Everybody agreed it would take years to fix this was about a $4 billion deal, by the way FDA looms as a regulator over life science the issues in Akorn. And “years” is import- — actually did constitute an MAE, and let companies in a way that nobody looms as ant, because, as I said earlier, the basic Fresenius out of the deal. Now, in a great a regulator in the tech industry, period — idea of MAE is not only is it a catastrophic many deals — this is my sub-bullet up there there’s just nothing like it. There was even decline, it also needs to be lasting in its

effect; it can’t just be a one-year blip. That’s standing on its own,” but nobody’s quite words “ordinary course of business” had this always been a key aspect of the concept of sure about that, either, and nobody could backward-looking element, “If I did what I MAE, and the court supported that. tell you exactly what a court thought “in all always did, if it was consistent with what I material respects” meant — at least what the always did, that’s ‘ordinary course.’” The In addition to the basic MAE decision — Delaware Chancery Court meant by those court said, “No, that’s not necessarily good this is my last slide, so everybody’s got a words when the lawyers use them. enough. If you are in the middle of a regula- sense of the arc here — the court also did a tory disaster, you have to adapt your business lot of other things, and some of these are They did an interesting thing here. I feel to that. That is your new ordinary course.” just funny and interesting, especially to an strange about this, but they analogized to U.S. That was an interesting difference. M&A geek. The court not only decided the securities law, and they said that “in all mate- MAE, they decided a whole bunch of other rial respects” means the same as it means in Important change: Delaware is a pro- things in this 200-page opinion, and some securities law, where if it alters the total mix sandbagging state. What that means is that of them are fascinating. We put together of information, then it potentially meets that things you learn in the diligence process, a quick list of some of the things that the standard of “in all material respects.” It is if you’re an acquiror — if you’re Arm and court also touched on. analogizing to securities law the idea of what’s you go into a deal and you want to buy a “material.” What’s a “material failure to dis- company, and you do your diligence, and One is lawyers love to debate — M&A law- close” something? What’s something you’re you spend weeks diligencing that company, yers, especially — when you have a contract supposed to disclose? If it alters the total mix that doesn’t get held against you if later on that says that “I have best efforts to do this, of information that an investor would make you make a claim arising out of something and I have reasonable best efforts to do that, in terms of buying or selling a stock, that’s you learned in the diligence process. You are and I have commercially reasonable efforts “material”; that’s what “material” means allowed to get as smart as you can and still to do that other thing,” and we, as practi- in that context. They analogized that and get a set of reps in the contract that protect tioners, always think there are differences brought that into an M&A contract, and they you and that you can make indemnity there. It just feels like there are differences said that’s what they think it means. claims on. That’s called “sandbagging.” The between having “best efforts” versus “rea- idea is you knew about it, you shouldn’t be sonable best efforts” versus “commercially The counter-argument was that it had to able to make a claim. By the way, for some reasonable.” There are subtle differences of fundamentally alter the purpose of the con- of our European colleagues, most European effort that if I ever had to litigate these ques- tract; that’s what the litigants were arguing jurisdictions are very uncomfortable with tions, they would be meaningful. The court about. The court said, “No, that’s not what sandbagging. Delaware is very comfortable said, “No. All the same thing. We’re not it means.” That was an interesting and real with it. One of the fundamental concepts going to try to figure out what the difference difference. That’s more like what the idea of Delaware law is the contract rules. If the is in effort between a ‘commercially reason- of MAE is, that it goes to the fundamental parties agree to something in a contract, able effort’ and a ‘reasonable best effort.’” basis of the bargain. The Court said, “No we’re not going to take a paternalistic view The court threw out the whole thing and — it’s not that. It’s ‘does it alter the total and try to figure out something different. just said, “Take it easy, lawyers — efforts are mix?’” Which is a lighter standard than a Interestingly, for those of us in California, efforts; you have an effort to move forward lot of us might have thought. it is an anti-sandbagging state, for reasons and do what you’re supposed to do.” We’ll I won’t get into here, but that’s something see, now, if lawyers actually stop arguing as What does the “ordinary course of business” to be careful of. You won’t see too many much about that. I thought that was wild. mean, and what does it mean to have the merger agreements governed by California “ordinary course” consistent with past prac- law, for all sorts of reasons and that’s There was also an interesting discussion tice — another area that lawyers love to argue one of them. of — one of the terms you see in contracts about in my zone. Here, in the context of a million times, and M&A contracts in all the FDA things going on, the question Next is a provision in any acquisition particular — is a standard called “in all was, “What should the company have done contract that talks about continuing dil- material respects.” You have to comply to change the conduct of its business?” The igence and having access to the company with your covenants in a contract “in all court said that you can’t just look back at what to continue to learn about the company, material respects.” People like to debate you used to do. If your world has changed, and acquirors routinely have that. Add in what that means. The one thing that every- your course of business — even if it’s some- non-disclosure agreements, and they are body was sure of was it meant less than thing you never did before — has to change, probably the first things two parties who MAE. We knew that much and maybe it too. It makes sense on an intuitive level. It’s are considering an acquisition sign between meant more than just the word “material” interesting, because most people thought the them — which talk about what you can use

the information you learn for. When a deal Lastly, one interesting twist, and since we starts to go sideways, like it did with these have some folks on the panel who are two, can you use your continuing diligence very regulatory in their focus, there was an capabilities, and can you use the rights you antitrust provision that had what’s called have to do diligence and have those cov- a “hell or high water.” This is the highest ered by the NDA, to get out of the deal? The level of antitrust standard to try to get the target got very concerned and said, “You’re deal through the antitrust process, and the using continuing diligence, but you’re doing court actually found that the buyer breached it to try to build a case to get out of our its obligation. “Hell or high water” is a very deal. You can’t do that!” The court said, high standard, but the court didn’t hold it “Yes, you actually can do that,” unless it’s against the buyer, because there was a twist explicitly prevented. Now look for that to in the antitrust regulatory section that said become a negotiating point in NDAs and the buyer controls the antitrust strategy. in merger agreements. Despite the fact that they had a “hell or high water” obligation, the fact that they were I’m going to jump to the last one, because allowed to control and direct the strategy its related to what I was just talking about. — which is a very common provision — the If you are trying to get out of a deal, make court let them off the hook on what they sure you’re trying to get the deal done right thought was a breach of that standard. That up until the moment you are terminated by was interesting, and you can be sure that LIOR NUCHI: Good morning, everyone. a court or by agreement. You have to have will become an intensely negotiated point. I’m Lior Nuchi, a partner at Norton Rose clean hands when you come to it. Fresenius Fulbright in the San Francisco office. If was scrupulous in every step of the way, That’s all I will say about that deal. It’s a you’re familiar with the firm, we are a multi- moving the deal forward at the same time very important deal; it’s interesting to read national firm — 4,000 lawyers, large offices as they were trying to get out of it. I have it, but it is a long case. If you’re an M&A in Europe, the U.S., Canada, Australia and actually been in the unhappy situation of person, you should definitely be aware of South Africa. I’d like to start by introducing having a very large deal almost have an this development. Thank you. [APPLAUSE] three of my partners who are here. Katrina MAE called on it — I won’t name names is from Germany, Anthony from Canada, but it wasn’t for Arm — and the acquiror KAREN TODD: Thank you. It seems and Nick from Australia. played it very well in that situation. We like, from what you’ve said, that MAE were under tremendous pressure, and they is still a pretty high bar. Is that going to I was asked to discuss technology and inno- were trying to get out of a multi-billion-dol- change the kind of due diligence that com- vation in the legal practice, especially when lar deal. It was a horrible experience; we panies should do going into a deal? it comes to M&A. Probably Nick should be were getting grilled by their litigators; they giving this presentation rather than me, but were asserting all sorts of bad conduct on DOUG COGEN: Yes. It’s still an abso- Nick is a global thought leader in the use our part. At the same time, the corporate lutely high bar. I don’t think the bar of technology in providing legal services, lawyers were just happy — they’d call me up necessarily has changed; instead, you now and I may refer to Nick a few times during — and acted like nothing was happening. I have a roadmap to understand some of the this presentation. had the white hat team there just trying to ways in which a court might find arguments move the deal forward while five minutes about whether an MAE has occurred. I’ll start with an anecdote, a story. I’m prob- later, I’d hang up and talk to the litigation ably one of the older lawyers in this room. I partner from the same firm who was just Does it change what you do in diligence? went to college and law school in New York, being nice to me, grilling me as if I were a No, I don’t think so. Companies that do and then started at a San Francisco law criminal. [LAUGHTER] their diligence and do it well, like Arm, firm, a regional firm at the time. This was are going to continue to do diligence. You before we had computers on our desks; we That’s how you have to do it — you have to want to be in a jurisdiction that is pro-sand- didn’t even have voicemail at the time. I was try to get your deal done until the moment bagging, so that your diligence is not held very excited to start at a law firm. I thought the judge says you don’t, or else the court against you. I was going to work on big, important mat- may prevent you from having the right to get ters — the kinds of deals that Doug works the deal done. It’s very important to “main- KAREN TODD: Alright. Our next speaker on — earth-changing deals that Arm does, tain clean hands” through a transaction. is Lior Nuchi with Norton Rose Fulbright. and things like that. I was very pleasantly

surprised — on the first day on the job, I A legal department is not about individuals performing was told I was going to be working on a deal representing a lender, a $200 million loan individual roles, but an ecosystem of resources which help facility for a wind-renewable project, which us to rely on the best version of ourselves. This includes was very much new technology at the time. We started out by having meetings between choosing the absolute best outside counsel to partner with our client, the insurance company that was providing the loan, and the borrower, us on this journey. — Carolyn Herzog a renewable wind farm company, and the various law firms for the parties. Everyone whole process — this is kind of critical — people are doing, and make sure that they was sitting in the room, and I was assigned this is how you get to bill a lot of hours.” were managing the transaction in a way to a senior associate, who told me to take [LAUGHTER] that met the same hourly goals and hourly rates that they would normally apply to copious notes throughout the day because measuring productivity and profitability. we would have to review all of the discus- “Your bonus is going to be contingent on That caused what is a revolution inside law sion and the changes at the end of the day. those hours, so this is all good. A couple firms, because you started to focus on using Being a diligent recent law grad, I spent the of years from now, you’ll move on to real software tools internally, to measure what day taking copious notes. At the end of the intellectual work.” you were doing and to try to figure out how day, I watched him prepare a markup of the to be more efficient in order to increase document, and then we handed it over to Anyways, I became a vociferous advocate for margin. Various law firms developed their Word Processing. Then he told me that he a technological solution to this, and about own internal management software. We, as was leaving for the day, and that I was going two years later, somebody called me up and a firm, have a program that we developed, to be meeting with a paralegal, who would he said, “They’ve just invented the software for blacklining. You should get your firm called “Transform,” where we track what teach me how to proofread the document, people are doing and how they are doing, and then do a blackline markup. That way, to adopt it.” Armed with that, I went to management and I said, “They now have a and try to be as cost-effective and as profit- the next day, when everybody came in to able as possible, using that software. continue negotiations, they’d have a black- software solution.” It took a long time to get it adopted, because there was a lot of institu- line document showing all the changes that Over time, what law firms started doing was tional resistance along the lines of adopting had been made. sharing that project management software technology, making things more efficient, with their clients, so that you could basically because it was going to be a decrease in I actually sat there that evening, learning corroborate in being cost-effective and effi- hours and training. all kinds of proofreading marks — there are cient. That brought a level of transparency certain specific marks you made when you to the outside counsel/inhouse counsel Over the years, law firms were a little slow deleted a big paragraph, when you made a relationship. It provided both sides with a small change, or you moved a comma — to adopt technology. That started chang- lot of data that they could analyze: where and then I blacklined all the changes and ing a few years ago, especially the inhouse should we be spending time; where should so on. I did that every night for the next 10 counsel in Silicon Valley. In particular, we not be spending time; and other issues. days while the deal was being negotiated. Mark Chandler, who’s General Counsel of Doug, for example, mentioned that now, in At the end of that, I thought to myself, “I Cisco, one of Doug’s clients, who started M&A, a big time-sink is around diligence just spent seven years getting this very chal- coming up with a model for law firms, say- and IP diligence, and to what extent has the lenging, elite education,” and here I was ing, “If you want to be working with us, target complied with regulations. proofreading. When the deal finally closed, you have to get off of the traditional hourly I took the senior associate to lunch, and I billing model and have a project of billing As law firms and clients started seeing the said, “There’s got to be a better way than structure. We need to have some level of data as to where time was going, they could doing this. This makes no sense to bring predictability in terms of what our legal say, “Is there a more efficient way to do this?” in all these talented young lawyers and have spend is, and this is generally how we work them do this kind of work,” and he said, with our vendors on a somewhat fixed fee What also came out of that is business people “No, this is very critical, and this is how I or modified fixed fee basis.” started focusing on it and saying, “Is doing learned to be a lawyer — this is how we all this particular work the only way to solve this learned how to be corporate lawyers. You’re When law firms started having to work that problem?” People started looking at insur- learning a lot by osmosis; you’re learning way, they began developing project manage- ance products, because for business people, what’s going in, what’s going out, and the ment processes and software to track what when you’re looking at risks, oftentimes you

just pass that on to insurers. They started how you report hours.’” So, he decided to bringing in insurance companies to look at build a software program that could do this the data and say, “Are there insurance prod- just as well as attorneys can. ucts that can be developed to help reduce some of this cost and mitigate the risk?” That is getting widely adopted. We’re working with WeWork right now on developing Now we work in an environment, as law- AI software for them to manage all of their yers, where we’re often working with our leases. We’re working with RPX, which has client and with insurance companies to developed an insurance product for IP liti- see if there is a way to move a risk into an gation and IP breaches, and that’s getting insurance product as opposed to just con- widely adopted both in M&A and for tractually between the parties. That’s a big managing litigation. We just did a transac- area of innovation and development. More tion for a startup called Zeguro — for their significantly than anything is the adoption Series A financing — and they are creating and development of AI software to create an insurance product for data breach and tools to help in this whole process. cyber-attack incidents. They’re working with a number of law firms and insurance compa- To give you an example, we’re working nies to come up with an insurance product with Salesforce. The head of M&A in the that’s going to be provided to mid-sized legal department, Ray Chan, has started companies and help them with data breach. a project, she calls the “Atticus Project.” it appears across 60 transactions, and in She’s working with a number of law this number of cases it creates a problem. The area that I find most interesting and firms to develop AI software to do due This is what the cost is down the line, we that I’m most involved in is one Doug diligence review of data room agreements can basically come up with an insurance mentioned. From the perspective of stra- and contracts in M&A. We went out and product where you pay X dollars today to tegic buyers, when they get into an M&A canvassed what’s available in the market. be insured against that potential outcome.” transaction, one of the biggest challenges There’s a lot of funding right now of legal is that the targets, which have great tech- processes software companies. One of the As a result of all of that data and those nology and great founders haven’t been most high-profile companies is called Kira discussions, we’re finding that reps and doing compliance. They haven’t been doing Software, which is developing AI tools for warranties insurance is becoming more regulatory review; their IP is messy. When document management and for due dili- adopted now in the United States. When I you talk to those startup companies — my gence review of documents in M&A. first called Kira to talk about working with DNA was being a startup lawyer — they’re them, it turns out that it was founded by reluctant to call law firms and do it by the As part of this Atticus project, we started three recent graduates from the same law book because they’re cash-constrained, working with Kira. You have to adopt their school that I went to. They’d all started as they’re resource-constrained; they don’t software and then feed it documents, like junior associates at leading New York law want to incur the costs. Right now, there the types of documents you would review in firms and they dropped out when they were is a fair amount of investment in creating an M&A data room. Over time, it learns third-year associates to start this company. I compliance software. I’ve seen some early what the provisions are and starts coming asked the main founder how they had come versions of this, and I have to say, I started up with patterns, giving you data and saying up with the idea, and he said, “We were out as a skeptic, but the software is terrific. “If you have this provision, if you compare junior associates at these firms, we joined The startups can, as they are building the that to 60 other transactions, this kind of there after seven years of intense education company, work with the software. It’s very problem could arise or that other problem at New York schools. I had to go into the interactive; it’s super-intelligent. It asks could arise.” Then you can take that data data room and review agreements to see if them, “Do you do this, did you do that?” — and Doug talked about the fact that reps they had change of control provisions that It basically connects them to the various and warranties insurance has been adopted might get triggered in an M&A context, and things they have to do. in Europe and in Asia, but not so much in I was spending days reviewing these agree- the United States. Now, with all the data ments. I went to the senior associate, and It’s being slowly adopted. That is very much you can bring back, you can share that with said, ‘There’s got to be a better way than in the future. What we’re seeing is the adop- insurance companies. They can say, “This me spending all of this time,’ and they said, tion of a lot of software to help with all of is what you’re finding, and this is the way ‘No, this is how you get trained and this is these processes.

Nick has been developing AI chatbots. The LIOR NUCHI: I noticed on your web first one that he did was during GDPR. We site, you talk about them. were getting lots of questions from our clients and spending a lot of time answering DOUG COGEN: Yes. them. We were enjoying all the interactions with the clients and building that relation- LIOR NUCHI: When Salesforce came ship, but when you’ve answered the same to us and asked us to talk to Kira, there question 30 times, you start asking yourself, were three or four law firms in that meeting, “Is this the most efficient way to do this?” It and none of us had actually heard about becomes expensive for each client. Nick cre- it. When we were told that we needed to ated this amazing chatbot where the clients use AI software; I reported to the firm that could get about 70% of the information they Salesforce wanted us to help them develop needed by interacting with this online chat- software for doing due diligence. Their bot and then come to us when they needed reaction was, “What are the junior associ- extra attention. It was hugely successful, and ates going to do? How are they going to get we’ve now been developing similar things trained? What will happen to the hours?” for compliance and regulatory. We’re seeing [LAUGHTER] how many companies now that wouldn’t have sought out our advice on these issues, In just six months, people have looked at it because they thought we were going to be and say, “Wow! That is very value-added!” too expensive, are using that to get 70-80% If “A” is this and “B” is that, the risk is of the work done, and then coming to us for KAREN TODD: As the only non-lawyer “this.” Quantifying the risk, it can be in the extra work to get it finished. on this panel — my background is in engi- this range of cost, and the probability of neering — do you see an educational process that happening, when you look at statistics We’re in Silicon Valley; people here like the occurring where software engineers train as across a spectrum of events, is wide. If you word “disrupt.” Our clients, both from an lawyers or vice versa, and the law firms then then share the cost of all of that amongst economic perspective and a technology per- have someone or several people who are dual all the participants in the market, each one spective, have been disrupting legal services software/legal experts? can pay “X” dollars and there can be a pay- and changing it into a technology-driven out to whoever suffers that outcome. That’s product. When Andreessen Horowitz got LIOR NUCHI: As lawyers, we were very the way engineers and economists think. As formed by Marc Andreessen and Ben skeptical that non-lawyers can understand lawyers, we don’t tend to think that way, but Horowitz, they famously said that software the issues that we are dealing with. The it seems to be a very accurate and rational is going to eat the world. We’re seeing that point was made earlier, also, that we view way to think about it. in many contexts, and increasingly, it’s ourselves as operating in a world where cul- becoming a bigger part of legal practice. If ture, history, personality — the intangible KAREN TODD: Thank you. Our next we look back at this, five or ten years from aspects of human society — are very import- speaker is Dominic Robertson. He’s from now, the level of technology usage in our ant. We’re generally skeptical of engineers Slaughter and May, and he’s going to give work is going to be much higher than it is sitting there telling us that a machine can us a UK perspective. today. We’re going to look back at some of do what we can do. the things that we are doing now, and it’s DOMINIC ROBERTSON: Thank you going to be like my first anecdote — you Kira has been successful in part because it very much for having us here; particularly mean there was actually a world when peo- was founded by lawyers, and people give thanks to Carolyn for a thought-provoking ple blacklined without using software? It’s them a certain level of credibility in what discussion earlier on. Slaughter and May is going to seem very odd to us that people they do. I will honestly say that as I sit here one of Arm’s outside counsel in the UK. ever worked that way. and see some of the software read the ques- We helped them with the acquisition by tion, see the answers, I’ve become more SoftBank. Normally, when we advise clients That’s the future, and it’s a very positive devel- and more convinced that engineers are on an acquisition, we think it’s been great opment for what we’re doing. [APPLAUSE] very capable of mapping out, in software, working with them, but it’s now goodbye the decision tree that goes into a lot of the and good luck. It’s been a real privilege for DOUG COGEN: We use Kira, by the way. analysis that we do. They’re good at figuring us, to carry on working with Arm, and to We find Kira extremely helpful. out a very economically rational outcome. do a lot of interesting projects with them.

I absolutely endorse what Carolyn said are our companies, and that’s been the case This is something that the UK government about the importance and quality of their both under the Obama administration and is still consulting on. It comes into effect in legal team — and what is very clear when under the Trump administration. April 2020. The UK Treasury is very inter- you work with Arm is the level of respect ested to hear from people who might be which the business has for the legal team. It looks like, for the foreseeable future, U.S. affected by this. If you do have clients or That doesn’t happen by accident. opposition in particular means there isn’t you, yourselves, are GCs of companies who going to be a globally agreed reform of the may be affected, do think about getting in I wanted to talk today about the introduction corporate tax system to enable people to tax touch with the UK Treasury either directly of digital taxes in the UK and the EU which profits based on the location of users and or through our advisors, because they are are going to fall very heavily on businesses generation of data. trying to get this right and to make it tar- in Silicon Valley. I know that Americans geted. Unfortunately, per what they’ve said have a bit of an issue with British taxes As to what several European countries are to us, politically, in the UK, we have to have going back to the 1770s. [LAUGHTER] now doing, they therefore want a temporary this tax. This is our way of dealing with the fix for this. A short-term measure to placate public anger in Europe about how much Hopefully, this won’t provoke a San Jose our voters is that we will get some reve- tax big companies aren’t paying when they Tea Party this morning. [LAUGHTER] nue-based tax on digital companies. The come in and do business in the EU. last time we had temporary tax in the UK What we’ve got at the minute is a big debate was to pay for the Napoleonic Wars in the This has been a common theme across sev- in the tax world about where value is being 1800s, and we’ve still got it today. They can eral other European countries recently. Italy generated. Everyone agrees that profits last a while. has already brought in a broader digital should be taxed where they are generated, services tax, which is going to apply to all but they don’t always agree where that is. The UK announced two weeks ago that we automated online sales. That would apply Traditionally, people have said, “You’ve got are bringing in a digital services tax, which to online sales of software and probably all value being generated where the capital is, will likely be two percent of all revenues of Amazon’s business, unlike the UK tax. where the significant people are.” For tech- involving UK users. That has got a lot of Spain has said they’re going to unilaterally nology companies, that’s led overwhelmingly press. In fact, when you look at it, it is a tax in a similar way as the UK and France, to value being attributed to the United States. much more narrowly targeted measure than announced at the start of yesterday. They’re Thanks to the tax deferral system that existed you might have thought. A lot of people looking at doing this too. before tax reform, you had very low effective have said to me, “Does this actually apply tax rates on U.S. technology companies’ rest to every technology company?” The answer Now, there is a broader discussion in the of world business, until the profits were even- is, “No, it’s only being focused on those EU about whether to bring this in on an tually distributed back to the U.S. technology companies that are deriving a EU-wide basis. It feels as if it’s getting stuck particularly high value from user data, so within the EU political process. Four of the That has provoked a huge amount of political it’s only being applied to companies which five big EU economies — UK, Italy, Spain challenge across Europe about whether this are running search engines, social networks and France — are very much in favor of is the right answer. The UK Treasury and and online marketplaces connecting third- this. A lot of smaller countries — Ireland other EU treasuries have tried to develop a party sellers and customers.” and the Netherlands — who, of course, rely model where they say there are some busi- a lot on U.S. investment, have opposed. nesses where a huge amount of their value is When you read the consultation docu- Scandinavia is also opposed. Sweden is being derived from user data, not from tra- ments, it’s bizarre, because they keep talking worried this is going to be extended to ditional sources. We therefore have to have a about these in an abstract sense. Just call Spotify at some point. Germany, very much means of taxing these companies’ profits, in them Google, Facebook and Amazon! the biggest power within the EU, has taken those countries where those users are gener- [LAUGHTER] the stance that it is pretty neutral at the ating valuable data for their company. moment. They feel honor-bound to try and It’s only going to apply to businesses which help France out, and France is very keen The EU has been, for several years, push- have over £500 million sterling of world- on doing this. However, German busi- ing for a change to the corporate tax system wide revenues, and over £25 million of UK nesses themselves are very worried about to rebalance taxing rights away from the revenue. It could be, if anyone is getting up this. This report is trying to come up with traditional model and towards a new data- to £500 million, you could suddenly find a new category of data-driven companies driven model. The U.S., understandably, there’s a big cliff-edge effect when you tip and say, “These companies are deriving has said this is a terrible idea, because these over into this. lots of value from user data, and we should

the United States. Therefore, you held the this exemption doesn’t apply to a CFC-type cash there for as long as possible, and that’s [controlled foreign corporation] charge like why, as Doug said, post-tax reform, there’s GILTI. When we suggested to the Treasury now a lot of cash coming back into the U.S. that there should be an exclusion for businesses subject to GILTI or other CFC All of those profits have now been taxed as charges, they see this as a question of who at the end of last year, and from now on, has taxing rights over this. If the U.S. is those profits will be taxed in the United having to step in and tax its subsidiaries on States on a current basis under the won- untaxed income, it’s because nobody else derfully named “GILTI [Global Intangible is. Maybe we should get in first. Again, we Low-Taxed Income] rules.” American tax tried this in the 1770s and it didn’t work does have better acronyms than UK tax. out too well. [LAUGHTER] This tax will kick in in April 2019, a year It will all be taxed in the U.S. on the cur- earlier than the digital services tax. It’s also rent basis of at least a 10.5% rate. going to be a short-term measure in terms tax them based on where their users are.” of impact. In fact, from October 2020, The UK has actually missed the boat a bit For all other companies, this model argues the Double Irish structures are all stop- that user data doesn’t drive value in the in trying to deal with this. There has again ping, because Ireland was persuaded that same way. That doesn’t really stack up: as been concern in the UK that you’ve got they have to get rid of that structure. This Carolyn said earlier, “every company is now your UK sales; but a substantial amount of explains why the UK offshore intangibles a data company.” The German car compa- the profit on those sales is untaxed. The tax raises £475 million in the first year, and nies, in particular, look at this tax and say, way that this tax is going to work is that then the revenue drops off a cliff thereafter. “Increasingly we are going to be deriving the royalty which is paid to the IPCo, will value in analyzing user data in our cars in have a UK tax imposed of 20% on that roy- For this one, again, the Treasury is listening developing autonomous driving, and we are alty, to the extent that it is derived from UK to representations. For me, the area which worried that over time, this taxing model is sales. That can be a sale to your own affiliate people should be focusing on most here is going to start applying to us.” distributor; it can be sales to third parties where you have income which is genuinely outside the UK where your technology then being taxed somewhere else — it’s not just It may well be that for a long time, there- plays a substantial part in the value of a being taxed in Bermuda — this isn’t the fore, we don’t see anything happening in product which is sold into the UK. When intended target, and you should be focusing the EU as a whole, but we see more and we asked the Treasury how they’re going to only on income which is actually untaxed more unilateral European taxes in this area. trace that, they said, “That’s an interesting anywhere else. [APPLAUSE] question; we’d like to hear your thoughts on The other tax I wanted to talk about, which how that works.” KAREN TODD: Thank you. Is there had much less publicity, but affects far more ever a situation where you get a cumula- people is the UK Offshore Intangibles Tax, There are two main exemptions to this. One tive effect of UK, U.S. and EU taxes all at which was also announced in the budget a is if your IPCo is resident in a good tax the same time? couple of weeks ago. What I’ve got in this treaty country with the UK. Bermuda isn’t slide is the classic Double Irish structure, one, but the U.S., obviously, is. Ireland also DOMINIC ROBERTSON: For the rev- which a lot of U.S. tech companies have is a good treaty country — then this doesn’t enue tax, yes, absolutely. That’s where the used for the many years. A U.S. top com- apply at all. What they’re mainly targeting big downside is with a revenue tax. If you pany, IP in Bermuda or Cayman Islands is income where the UK tax base is being pay that, it can’t be credited against any and an Irish principal sitting underneath eroded and people are being tempted to other taxes. The expectation here is that the that, and your local distributors or its sales suck too much profit out to a low-tax coun- offshore intangibles tax will be creditable support providers in the UK or anywhere try. Another exemption, therefore applies against your GILTI charge; to the extent that else. Until tax reform happened in the U.S. where IPCo is paying tax equal to half the your GILTI tax in the U.S. is being derived at the end of last year, the U.S. had the UK rate — the UK rate’s only 19% now; so from UK sales, it will be crowded out com- large majority of the rest of world profits that’s only 9.5%. You might look at that pletely by this UK tax. At that point, you rolled up in IPCo; they wouldn’t be taxed and think, that’s fine for the U.S., because worry about how the Tweeter-in-Chief is until such time as IP pays dividends back to everyone’s paying GILTI at 10.5%+. But going to react to that. [LAUGHTER]

KAREN TODD: When Brexit comes Arm is in a space that, as you can imagine, about, are we going to see a separation has a lot of national security interest. Arm has between the EU’s tax and the UK tax? been very successful in acquiring companies that have had very interesting and sensitive DOMINIC ROBERTSON: Quite possi- technologies. We’ve had the pleasure and bly. At the moment, the UK tax is coming privilege of working with Arm to advise on in unilaterally, without waiting for the EU. these issues and get through the process. We will see, by the end of 2020, at least four of the big five EU economies — UK, Italy, The biggest thing I want to highlight, and Spain and France — will all have adopted then some specific things within it, is the their own subtly different versions of digital importance of considering CFIUS issues services tax. This is, of course, exactly why and national security issues in any transac- the EU always says it makes sense to have tion that involves both a foreign investor and a common system rather than having four a U.S. business. National security, while it different sets of rules. sounds very hard-core and you would think might be obvious or something that’s defined, KAREN TODD: Right. Our next speaker is actually quite deliberately not defined and is Karalyn Mildorf, from White & Case. is interpreted — which is a very consistent theme within CFIUS — quite broadly. We’ve KARALYN MILDORF: Good morning. seen “national security” cover a hugely wide It’s a pleasure to be with you today and to have been changes in the law. Probably range of areas. You have the very traditional honor Carolyn and Arm, who we’ve had most significantly, which led to more obvious things — defense contractors, criti- the privilege of working with on a number changes in the law (which I’ll talk about cal infrastructure, and aerospace contractors of very interesting transactions and matters. a little bit later), there was an enormous that are doing a lot of classified work for the On a personal note, I am excited for some- influx of Chinese investment about five or U.S. government. You also get into technol- thing new, which is participating in an event six years ago. China overtook the historical ogy. There has been particular sensitivity on with such a fantastic diversity of Carolyns. leader of the United Kingdom, which had things like semiconductors. Emerging tech- This is wonderful! [LAUGHTER] usually been followed by Canada, as the nologies like AI and autonomous driving country most represented in CFIUS filings. have raised a lot of concerns, and they’re I’m a national security attorney with White As you can imagine, China presented quite tricky, because these can be technologies that & Case. I spend most of my time, for a a different threat profile for CFIUS to catch have enormous commercial applications, but while now, on the Committee on Foreign up with in the transaction review context also have enormous defense applications, as Investment in the United States, or CFIUS, — the same types of issues you hear about well. They have to find a balance in looking reviews. For those of you not familiar with all the time with China, such as technology at those things. CFIUS, CFIUS is a multi-agency commit- theft and espionage. There were basically a tee led by the Treasury Department that lot more evolving threats that CFIUS had We’ve seen sensitivity and interest in conducts national security reviews of foreign to adapt to. As the concerns increased, the things like healthcare, biotechnology, iden- direct investment into the United States. scrutiny increased, and you started hearing tity authentication, cyber security, mining, a lot more about CFIUS. Usually when you transportation, oil and gas, and energy. I’ve been doing this for about a dozen hear a lot about CFIUS, it’s not because it Food safety has come up. When the years now, and when I started out, nobody went great for the transaction parties. Chinese bought Smithfield Ham a few years knew what CFIUS was. There were only a ago, that went for a CFIUS review. handful of firms that did it on any kind of Sometimes you get high-profile cases. The regular basis — it was usually a pretty quiet biggest one was earlier this year, when It’s important in any transaction — even practice and process. I would tell people President Trump, on CFIUS’s recommenda- if it sounds pretty commercial — to go what I did, and I would just get blank, con- tion, blocked the acquisition of Qualcomm through and ask the questions and try to fused stares. I would have to clarify, “No, by Broadcom. You can see major deals being assess whether there might be concerns. CFIUS, not syphilis!” [LAUGHTER] impacted by CFIUS. Although you tend to The best way to do that is to think about hear about CFIUS when things go wrong, how CFIUS conducts its analysis, which, Since then, it has been quite an evolution, as you can also know that the vast majority of fundamentally, is a risk-based analysis that a number of things have happened. There transactions are still approved by CFIUS. looks at the “threat.” I’m going to put it

in quotes, especially since I’m sitting next As a leader, when we’re going through this kind of to a foreign-owned company, the “threat” posed by the foreign acquiror, the “vulner- transformational change, I’m looking for change ability” exposed by the U.S. business, and champions — people that want to be a part of change the consequences of combining that threat and that vulnerability. You have to analyze — visionaries. Leaders who are not just comfortable these issues through a lot of due diligence. with ambiguity and are willing to take on risk, but White & Case, where I am, is an enormous who are accountable professionals and who know that global law firm; we have offices in more than 20 countries throughout the world. We have it has to be the right risk at the right time with all a lot of M&A that’s coming in, and we end the right protections. — Carolyn Herzog up spending a lot of our time counseling clients on the front end and assessing if there last year, and it was passed earlier this It also incorporates one of the other key are CFIUS risks; what are they; and then summer and enacted. In August, President aspects of FIRRMA, a big change, which is analyzing whether a filing is appropriate. Trump signed the Foreign Investment Risk that, historically, CFIUS has always been, Just because you can find nexus to national Review Modernization Act, or FIRRMA, at least ostensibly, a voluntary process. You security, it doesn’t mean that you necessarily into law, which is the first big statutory could get exceptions to that, where CFIUS need to file or that you’re going to have a overhaul in more than a decade to the would request parties file if they learned of problem. What you don’t want to do is find CFIUS process. It does a couple of notable a transaction of interest or initiate a filing if out later in the process that you should have things, and the most important things are, needed. Generally speaking though, parties filed, and you do have a problem. You want one, it expands CFIUS’s jurisdiction, for would choose to go in and notify, and get to head these issues off and plan for them as the first time in history, to include, most the clearance and avoid any long-term risk much as possible on the front end, because notably, certain non-controlling but non- by having that approval letter in hand. the CFIUS process tends to take quite a while. passive transactions. You have a minority You want to have those issues as part of your investment and a board seat, and all of FIRRMA actually made notification, at deal-planning timeline at the very beginning. a sudden, that, alone, can subject you to least of a shorter-form version to let CFIUS CFIUS jurisdiction. know about the transaction, called a decla- Jurisdictionally, it’s important to note that ration, mandatory in certain circumstances, there have been a number of key changes. It also captures certain real estate trans- and gave CFIUS a lot of leeway to deter- Historically, CFIUS has had (and still does actions, regardless of there being any mine how widely they want to use that have) the jurisdiction to review any transac- investment. You don’t need traditional mandatory authority. tion that can result in control of the U.S. M&A activity. If you are purchasing, or business, which, as you’ll note, is very even leasing, real estate that’s in close prox- The pilot program focuses on a relatively broad. Control, itself, is a term that is both imity to sensitive U.S. government facilities, narrow set of industries and targets U.S. defined and interpreted by CFIUS very that can be subject to CFIUS review. businesses, but it makes notifying qualifying broadly. It doesn’t mean a 50% acquisition; investments mandatory. A pilot program you can have a 5% acquisition that, if it Now, that jurisdictional expansion, by and U.S. business, one that would be captured, comes with certain rights, that investment large, is not going to happen until new reg- is one that is involved with critical technolo- will be deemed to confer control. Looking ulations are implemented, which may take gies in connections with certain industries. at the specific rights involved is a key part of up to 18 months. We started in August, It is not surprising that critical technologies the analysis of CFIUS issues. so a lot of that is a long way out. We’ll is the focus of the first pilot program as this get to see what draft regulations look like is one of the biggest concerns of CFIUS. Even with that broad jurisdiction, there and comment on them. One thing that They identified 27 industries by NAICS has been concern, largely directed at FIRRMA does is it authorizes pilot pro- [North American Industry Classification transaction structures that we’re seeing grams to essentially test-run certain aspects System] code. If you have those two factors out of China and others, that there was of the law earlier. CFIUS just released their in play: critical technologies, and involve- not a wide enough net for CFIUS to get first pilot program; it actually took effect ment with those critical technologies in its hands on all the transactions it would this past Saturday, November 10th, so we connection with these industries, you would want to review. New legislation came out are now live. The pilot program focuses on be a U.S. business where foreign investment earlier this year; it was originally introduced specific areas, which I’ll get to in a second. would capture you in the pilot program.

They also impose the jurisdictional expan- Hopefully they’ll be able to use the declaration sion. Both control transactions relative to process under the new regulations, which, a U.S. business and non-controlling but aside from the mandatory one, allows for non-passive investments, where you would get a shorter form and potentially quicker board membership or observer rights, access adjudication of more benign cases. If they to material non-public technical information are able to use that effectively, they may then in the possession of the U.S. business, or dedicate more of their resources to efficiently the ability to participate in substantive deci- dealing with more complex transactions sion-making of the U.S. business. If you have that need a deeper look. There are a lot of minority investment with any of those, even challenges in ramping up to that, but over without control, that would be an investment time, there will be improvements in the that would be subject to CFIUS’s jurisdic- timing of the process, and the efficiency and tion. If you meet all of those components of the reliability of the timeline for parties. being captured on both the investment side and the target business side, you are subject KAREN TODD: Thank you. Our next, to a mandatory declaration. They wanted to and final, speaker is Kevin Anderson with cast a wide net and incentivize parties to come Wiley Rein. in and notify them so that they could look at the transactions of interest and dispose of the KEVIN ANDERSON: I have some very ones in which there is less interest. To do actual review and investigation are actually short comments here to get us wrapped up. that, they are authorized to issue penalties up mandated by statute. The problem that I wanted to focus on an issue that is unin- to the value of the transaction, which, you there has been with CFIUS is that there is tentionally very consistent with Carolyn’s can imagine, is a very steep price to pay for a pre-filing period, where you have a draft presentation at the beginning. I believe that non-compliance. that goes in. You submit a draft of your fil- Arm is uniquely situated — at least from my ing, and you wait for CFIUS to come back. narrow perspective — to effectuate the goals They have the ability to get at you if they You address whatever their questions and that you stated. want you. How aggressively they’ll use that, comments are, you submit the final notice, of course, remains to be seen. My personal and then they have to accept it as complete. Carolyn is the fourth General Counsel over expectation would be that they would use That process, right now, is taking about the last 15 years at Arm with whom I’ve that where they felt it was necessary, but a month at the best, and sometimes can had the opportunity to interact. During that not in the ordinary course. It is important, take substantially longer. There are no set time period, I’ve come to learn that for each if you have a transaction that might come timelines for that, currently. The new law of those four General Counsel, I will be under the pilot program, or even if you’re does implement timelines which will come their least favorite outside attorney, because not sure, to assess that, just because it’s not with the new regulation. Unfortunately, I do IP litigation. Unlike all the other peo- your general CFIUS risk analysis. You have not immediately, that will put caps on ple here, when she interacts with me only that penalty component if you have a poten- both that pre-filing process and the accep- something bad can happen. Whereas with tial mandatory declaration obligation. tance process, that will hopefully give a them, something good — the transaction is lot more certainty. They’re trying to beef happening! [LAUGHTER] Those are the key issues in my view of up resources, which is a challenge and a CFIUS. [APPLAUSE] problem, and they’ve lost a lot of staff, espe- CFIUS is good, it means you’re doing a cially with the new law. There’s been a lot transaction. With us, there’s only the possi- KAREN TODD: Thank you.! Do you feel of turnover in the office. They’re trying to bility for doing bad things. there is a trend to standardize CFIUS more replace those who have left and build up as we go forward, in terms of time limita- to handle new resources. You can imagine, When I was trying to come up with some tions and other parameters? with this new process of declarations and comments today, I was trying, like a good mandatory requirements for filing, there’s litigator does, to turn that into a positive. KARALYN MILDORF: Every trans going to be a substantial increase in filings, [LAUGHTER] action party — and I’m not going to speak and they were already overworked. They’ve for Carolyn — but I’m pretty confident seen historical increases in the number of The best I can come up with is that one of would love to see more of a standardization transactions reviewed in the last two years, the reasons that’s true is that Arm is an IP of timelines for CFIUS. The timelines for and it stayed steady at that high level. company, and maybe the world’s preeminent

IP company, and it never has to sue anyone. Companies are going to continue that, and It never has to initiate action. Why is that? replacing the director of the Patent Office This is where Carolyn’s goals are consistent who was previously someone from Google with, and honor, the concepts that I’ve seen who was probably less pro-patent, with a in the company over the last 15 years. Arm plaintiff-side litigator who is more pro-pat- has commercial relationships with virtually ent, you’re going to see a lot more patent anybody in the tech space, even its main litigation in the next few years. competitors, Intel and Andy, are licensees. The reason that Arm has been successful KAREN TODD: Thank you. I’m going over that time is that it relates specifically to to go down the panel for one final ques- what I do, which is valuation of intellectual tion, and from each of your practice areas, property. During that time period, Arm has and also from your position as General developed a reputation for dealing honestly Counsel, tell me what key issue you would with its licensees, and for fostering the gen- advise boards on these days. We’ll start eral overall good of the ecosystem out there. with Dominic. There are certainly many times during that period where I believe that Arm could have DOMINIC ROBERTSON: The princi- maximized its own profit at the expense of pal issue which your tax advisors now have the general good and the ecosystem. Going to advise boards on is reputational. That’s all the way back to the founders and cer- Arm continues to be in a position to use its been a massive change in the 12 years I’ve tainly everyone that I’ve interacted with at corporate history as an example of how the been working as a tax lawyer, that tax had Arm, they have taken the long view, and overall collective good can ultimately achieve moved from being a technical black box understood that what’s good for everyone a better result for everyone. subject, where people just do what they can as a whole is ultimately going to be good to minimize their effective tax rate, to being for Arm. That has played itself out; it’s not Carolyn, you pointed out that legislation in a position of affecting reputation. Time just in the IP space, where I am, but in all and litigation are frequently trailing, and and again, what boards want to know is of the spaces with which Arm deals. A good that is true. I would urge Arm to continue not is this good to minimize our taxes; it’s example that we had earlier this year, and to reach out in those areas, because I do how will this look on the front page of the it’s just a bit of a shout out to Arm and its think that people can see Arm as an exam- Financial Times or The Wall Street Journal if legal team, and I’m sure everyone in here ple of the optimism that one sees when you it becomes public. is familiar with the specter and meltdown come to Silicon Valley. As opposed to the issues related to processor security. We pessimism that one sees when one goes to KAREN TODD: Thank you. Doug? were fortunate to have some limited interac- the political capitals of the world. I look for- tion with Arm and provide assistance with ward to hopefully helping you in that area. DOUG COGEN: There are lots of issues them on that. I would say that, both from [APPLAUSE] on the minds of boards these days, but if I a technological standpoint and from an have to pick one thing, it’s definitely cyber interaction with the government, Arm set KAREN TODD: Thank you. In the area security and what to do in the event of a the gold standard. That’s widely recognized of IP, do you see tech companies leaning breach. How to prevent one, how to pro- out there, that Arm set the gold standard in more towards handling their IP assets as tect the data of customers and of users, and handling that problem. trade secrets or through patents? every board is talking about this, almost in every board meeting. That would be it. What I would say is that Arm is able to KEVIN ANDERSON: I would say pat- do that because — and this is true about ents, without talking about too many of KAREN TODD: Great. Carolyn? the valuation — everyone recognizes Arm as the panelists’ clients up there, there are still a party that can be trusted to provide the plenty of patent battles out there. I would CAROLYN HERZOG: I’m going to have common good there. say that you’ve seen, over the last couple to steal from both of them, because it is rep- of years, a decline in the number of patent utational. When you’re looking at risk at the While I know that in today’s political cases but an increase in the seriousness of board level, and depending on the agenda, environment, there is very much a focus, those cases that are brought. Fortunately, cyber security and data privacy have to be certainly in some areas, on maximizing from Arm’s perspective, Arm has been able on the board agenda. It is the responsibility one’s own country or one’s own party good, to largely stay out of those serious cases. of the Executive Committee to be looking

CFIUS issues, even if it might not be obvi- Boards are paying a lot of attention to that ous that they’re at play. If you’re in an area and shifting and learning as they go. That’s where CFIUS is relevant or could be of rel- a big issue right now. evance and you want to do M&A activity, just the importance of being very proactive KAREN TODD: Thank you. Kevin? in developing a strategy so that you can manage the process and manage risk as KEVIN ANDERSON: As a litigator, if I effectively as possible. That goes to all lev- get in front of the board, it’s probably a very els of the transaction. That goes from your bad thing! [LAUGHTER] initial assessments in asking the right questions about the potential risks involved and Try to avoid that! I’ll just free-form away in due diligence with the target. Structuring from litigation, and all the risk management the deal potentially to minimize CFIUS is on board, but I would go more towards risks and negotiating purchase agreement advice that Warren Buffett would probably terms to give you as much protection as pos- give, which is to be optimistic and remem- sible so that the deal you’re doing is what ber that, even when it looks like there’s you want to be doing. If you do that, you’re downtime, that we do have an incredible not going to end up in a situation where you political and economic system. Try not to run into problems that frustrate your goals. forget that, and act accordingly with a sense of optimism for the country. [APPLAUSE] KAREN TODD: Great. Lior? at the board from a risk perspective and KAREN TODD: Great! I want to thank whether it’s cyber security or data privacy LIOR NUCHI: I would add to all of those all the speakers for their expertise today. I or other types of reputational risk, it’s the excellent comments, globalization, diversity want to thank the Law Department of Arm responsibility of the General Counsel and and inclusion. We’ve been working with for being here, and Carolyn for represent- the Executive Committee to be constantly Google where there’s a worldwide walking them. I’d like to give them a final round advising the board of the most high-profile out relating to harassment issues. I don’t of applause. [APPLAUSE] risks and, particularly, the reputational risks think that the company saw that coming. It that are going to be impacting the board. ended up being a much bigger issue than Thank you again to the audience for anybody imagined. Some of the takeaways being here. KAREN TODD: Thank you. Karalyn? are, for the companies that we’re dealing with, you’re looking at a very highly edu- KARALYN MILDORF: This is consistent cated global workforce, a younger workforce with what I spoke about before, aware- that has views about these issues. They’re ness and consideration for transactions of being very proactive and active in that way.

Doug Cogen concentrates his practice on billion acquisition of Duo Security. Mr. mergers and acquisitions, strategic and Cogen has also led multiple deals for commercial transactions, corporate coun- Symantec including its $4.6 billion merger seling and governance, securities matters, with Blue Coat and $7.4 billion sale of shareholder activism and takeover defense. Veritas to Carlyle. Other representative Doug is the co-chair of Fenwick & West’s transactions include Concur’s $8.3 billion M&A practice and served as a member of acquisition by SAP, GitHub’s $7.5 billion the firm’s Executive Committee for 10 years. acquisition by Microsoft, Cepheid’s $4 billion acquisition by Danaher Corporation Doug’s transactional experience includes and Macromedia’s $3.4 billion merger with over $100 billion of completed mergers, Adobe Systems. Doug Cogen acquisitions and divestitures including Partner cross-border transactions in the software, Mr. Cogen is ranked as a leading M&A internet, life sciences, medical devices, lawyer both nationally and in Northern telecommunications, networking, semiconductor, computer hardware and consumer California by Chambers USA. He was also products industries; public company tender named 2018 Lawyer of the Year for technol- offers; and private placements of equity ogy and telecom dealmaking by The Deal, and debt securities. He has handled over and the Daily Journal ranked him one of 125 deals for Cisco Systems including California’s Top 100 Attorneys in 2018, several multibillion dollar acquisitions 2013 and 2006. He was also included in such as Cisco’s $6.9 billion acquisition of The Legal 500 “Hall of Fame” in 2018 and Scientific-Atlanta, $3.7 billion acquisition named by The Legal 500 as a Leading Lawyer of AppDynamics, $3.2 billion acquisition in the United States – M&A/Corporate cat- of WebEx Communications and $2.3 egory in each of the last five years.

Fenwick & West LLP law firms in the world, and is now one transactions, startup and venture capital, of the 100 largest law firms in the U.S., initial public offerings, intellectual property For more than four decades, Fenwick & representing leading companies such as protection and licensing, securities litiga- West has helped some of the world’s most Airbnb, Amazon, Cisco Systems, Dropbox, tion, and domestic and international tax recognized companies become, and remain, Facebook, Intuit, Netflix, Shutterfly, planning and tax controversies. market leaders. From emerging enterprises Symantec, Twitter and Uber. to large public corporations as well as the For instance, our M&A group was named venture capital and investment banking Named Technology Group of the Year Technology M&A Law Firm of the Year for firms that are financing them, our clients are in 2018 for the fifth consecutive year by the fourth consecutive year by Global M&A leaders in the technology and life sciences Law360, Fenwick is continually recognized Network in 2018. Chambers USA also high- sectors that are fundamentally changing the for being at the forefront of emerging tech- lights the group as “very strong… a superb world through rapid innovation. nology with deep roots in Silicon Valley’s team that handles a high volume of M&A history and ecosystem, allowing the firm to work for major corporations.” The group Fenwick consists of over 400 attorneys understand the business models and intel- has completed over $500 billion in trans- with offices throughout the United States lectual property that drives deals. Fenwick actions in recent years, including executing and abroad, including Silicon Valley, San has repeatedly earned ranking among the significant acquisition programs for lead- Francisco, Seattle, Shanghai and New York. leading firms for mergers and acquisi- ing serial acquirers such as Cisco Systems, The firm was one of the first technology tions, complex financial and commercial Facebook, HPE, Proofpoint and Symantec.

Lior O. Nuchi represents multinational com- Lior has extensive experience in intellectual panies in initial public offerings, mergers property matters for technology companies and acquisitions, strategic alliances and ven- and has led teams of intellectual property ture capital fi nancings. He also represents lawyers in litigating and settling major major investment banks in underwriting patent cases in Federal District Courts in public offerings for technology companies, California, Texas and Delaware and at the as well as a wide variety of private equity International Trade Commission in the fi rms, fi nancial sponsors and venture cap- U.S., as well as in various European juris- ital fi rms, family offi ces, non-institutional dictions such as England, Germany, France investors and universities in connection and the Netherlands. Lior has represented with their investments in, and acquisitions several major technology companies in Lior Nuchi of, technology companies, fund formation, formulating and implementing their intel- Partner monetizing intellectual property and tech- lectual property strategies by prosecuting nology and commercial transactions. strategic patents and via acquisitions of strategic patent portfolios. Lior is also active Lior’s clients are based in Silicon Valley, Israel, in the Privacy and Cybersecurity area and Europe, China, Taiwan, Korea and India and counsels clients on these issues on a regu- Lior has extensive experience in cross-border lar basis with the assistance of his partners transactions in the technology industry, hav- who are experts in the fi eld. ing practiced in Israel, Tokyo, Hong Kong and Taiwan in addition to the San Francisco As outside counsel to many corporations, Bay Area. Lior further assists technology com- Lior frequently advises on other legal mat- panies and investors with respect to corporate ters important to the management team, governance matters and typically acts as prin- including commercial transactions, equity ciple outside counsel to his clients, focused plans, executive compensation, labor and on their most important legal needs. Lior’s employment matters, regulatory compli- securities and corporate governance practice ance, commercial disputes and structuring has included representing Boards of Directors and managing international operations. and Committees of Independent Directors in connection with a wide variety of governmen- tal and internal investigations.

Norton Rose Fulbright LLP fi nancial institutions; energy; infrastructure, the highest possible standard of legal ser- mining and commodities; transport; tech- vice in each of our offi ces and to maintain Norton Rose Fulbright is a global law fi rm. nology and innovation; and life sciences and that level of quality at every point of contact. We provide the world’s preeminent corpo- healthcare. Through our global risk advisory rations and fi nancial institutions with a full group, we leverage our industry experience Norton Rose Fulbright Verein, a Swiss business law service. We have more than with our knowledge of legal, regulatory, com- verein, helps coordinate the activities of 4,000 lawyers and other legal staff based in pliance and governance issues to provide our Norton Rose Fulbright members but does Europe, the United States, Canada, Latin clients with practical solutions to the legal America, Asia, Australia, the Middle East and regulatory risks facing their businesses. not itself provide legal services to clients. and Africa. Norton Rose Fulbright has offi ces in more Wherever we are, we operate in accordance than 50 cities worldwide, including London, Recognized for our industry focus, we are with our global business principles of qual- Houston, New York, Toronto, Mexico City, strong across all the key industry sectors: ity, unity and integrity. We aim to provide Hong Kong, Sydney and Johannesburg.

Dominic is a Tax Partner and a member of • Virgin on the IPO of Virgin Money and the Technology Group. He advises a wide the sale of part of its stake in Virgin Active range of clients, including U.S. companies • GKN on its defense against the hostile and various fi nancial institutions, on all takeover bid from Melrose, including areas of corporate tax law. advice on the merger of its Driveline business with Dana Inc. He spends much of his time advising on structuring and other tax aspects of M&A • Various banking and corporate clients on and other corporate fi nance transactions. tax issues affecting their treasury operations, including FX hedging, anti-hybrid Dominic is ranked in the tax section of tax rules and the special tax regime for Dominic Robertson Chambers UK 2018 and listed as a leading regulatory capital securities Partner individual for Tax. Dominic has previously • Wren House Infrastructure Management been named by the Tax Journal as one of on the acquisition of North Sea their “40 under 40” leading young UK Midstream Partners from funds managed tax professionals. He regularly writes for by ArcLight Capital Partners the Tax Journal and is the co-editor (with • GSK on various transactions, including another of our tax partners) of the Transfer a major asset swap with Novartis, the Pricing Law Review. creation of a consumer healthcare joint venture with Novartis, and the creation of Experience a bioelectronics joint venture with Verily • Liverpool Football Club on its sale to Life Sciences Fenway Sports Group (previously New England Sports Ventures) • Several U.S. technology companies on structuring their UK operations, including advice on transfer pricing, and updating their structures to adapt the U.S. Tax Cuts & Jobs Act

Slaughter and May The U.S. is one of their most active inter- • In the last year, they have worked in over national markets; they advise over 100 of 140 countries, working with over 200 dif- A Global Law Firm the U.S. companies in the Fortune 500 and ferent relationship law fi rms Slaughter and May is a leading interna- multi-national businesses with signifi cant • Their lawyers speak 77 different lan- tional law fi rm that supports a broad U.S. interests. guages and represent 39 nationalities range of clients on strategic projects, from • They advise over 100 of the U.S. Fortune many of the largest multi-national listed They regularly work alongside elite U.S. law 500 companies corporations, through serial entrepreneurs fi rms, including on some of the most signif- and private investors, to new entrants and icant global transactions. They work closely • They advise 34 of the FTSE 100 on their some high growth early-stage companies. with the leading independent Californian activities in Europe and beyond They provide the full range of legal service, fi rms, as well as major law fi rms in key regional • “They have a fantastic reputation, and their including corporate/M&A, litigation and centres across the entire country including M&A work is second to none. They stand fi nancings. They are recognised throughout New York, Texas, Illinois and Massachusetts. out from the crowd with their ability to spot the global business community for pro- issues at a really early stage.” — Chambers viding legal advice of the highest quality, Supporting Facts: & Partners, 2019 for creativity in fi nding solutions and for • Over 70% of their turnover comes from commercial awareness. cross-border work

Karalyn Mildorf is a partner in the National transactions, developing and implementing Security and CFIUS (Committee on Foreign CFIUS strategies, negotiating CFIUS- Investment in the United States) practice related deal terms, representing clients in of White & Case, focusing her practice all stages of the CFIUS fi ling and review in the areas of Exon-Florio reviews before process, engaging with relevant govern- the Committee on Foreign Investment in ment offi cials, and negotiating and advising the United States and foreign ownership, regarding implementation of and compli- control or infl uence (FOCI) mitigation ance with CFIUS mitigation arrangements. matters. Chambers USA has consistently recognized Karalyn as a leading CFIUS Karalyn also has extensive experience rep- expert, noting in 2018 that “The ‘very dedi- resenting clients in a myriad of FOCI Karalyn Mildorf cated and hard-working’ Karalyn Mildorf is mitigation matters. She has negotiated, pre- Partner ‘always responsive and understands client pared, and advised regarding compliance needs.’” Comments in Chambers USA 2017 with, and implementation of, numerous include that “She has a strong track record FOCI mitigation arrangements, includ- in national security work, including CFIUS ing Special Security Agreements, Proxy fi lings and FOCI compliance, and has a Agreements, Security Control Agreements particular niche in Exon-Florio reviews.” In and FOCI Board Resolutions. 2017, Karalyn was named one of only four “International Trade Rising Stars” under She has also represented clients in national 40 by Law360. security reviews before Team Telecom; con- ducted export compliance and industrial She has advised clients on CFIUS issues security due diligence for many transac- in hundreds of transactions covering a wide tions covering a range of business sectors; variety of industries and investor countries, advised clients with respect to voluntary and has extensive experience with national disclosures before the U.S. Department of security requirements in connection with State, the U.S. Department of Commerce complex transactions. Karalyn advises cli- and the Department of the Treasury’s ents on all matters pertaining to CFIUS Offi ce of Foreign Assets Control; and rep- reviews, including conducting detailed resented clients with respect to a variety of due diligence and assessing potential export control compliance matters. national security issues in connection with

White & Case LLP Firm’s global experience, practice experi- governments and state-owned entities. Our ence and industry knowledge to our clients. lawyers embrace new ideas and innovative Global law fi rm White & Case LLP is We assemble and integrate the best teams thinking, devising legal answers to the chal- uniquely positioned to help our clients to deliver the highest-quality legal work in lenges set by its clients. achieve their ambitions in today’s G20 world. any one market, or across many. As testament to our global accomplishments, From our Firm’s beginnings in New York In both established and emerging markets, The Financial Times honored White & Case in 1901, we’ve built an unrivalled network our lawyers are integral, long-standing mem- as the second-most innovative law fi rm in of 44 offi ces in 30 countries, servicing cli- bers of the community, who give our clients North America in its FT Innovative Lawyers ents in 160 countries. White & Case is a actionable and commercial insights into the full-service fi rm of more than 2,000 lawyers, local business environment, alongside our North America 2018 report. In addition, the 25 practice areas and 17 industry groups. experience in multiple jurisdictions. report ranked White & Case as an innova- tor for seven matters in six categories, and White & Case adheres to six principles We work with some of the world’s most the Firm received top rankings in all three that empower us to deliver distinctive client respected and well-established banks and FT Innovative Lawyers reports for North service. We strive to bring the best of the businesses, as well as start-up visionaries, America, Europe and Asia during 2018.

Kevin Anderson is a Partner in the the SMS; navigation systems; communica- Intellectual Property Practice at Wiley Rein tions and other networking technologies; LLP in Washington, D.C. With more than microprocessor technology; wireless email 15 years of experience representing Fortune products; software; computer systems; LEDs; 100 companies, innovators, and a wide range pharmaceuticals; and medical devices. He of technology-centered entrepreneurs, Kevin has also appeared on behalf of defendants assists clients in developing, protecting, and in intellectual property cases in broad variety capitalizing on their intellectual property. He of venues including Federal district courts specializes in patent litigation, counseling, in Virginia, Texas, Delaware, New York, and licensing; copyrights for technology and Illinois, California, New Jersey, Michigan, computer-related companies; and trademark/ Florida, West Virginia, and Georgia. Kevin Anderson trade dress infringement. Partner Mr. Anderson has been named an “Acritas Mr. Anderson has successfully litigated cases Star Lawyer” (2018) and named one of D.C.’s involving a broad swath of technologies “Super Lawyers” for Intellectual Property including: wireless standards such as CDMA Litigation by Super Lawyers magazine (2013- and WiFi; broadband Internet technolo- 2018). Mr. Anderson earned his J.D. from gies such as asymmetric digital subscriber Duke University School of Law and received line (ADSL); wireless applications such as his B.A., from Arizona State University.

Wiley Rein LLP U.S. Department of Justice. Many of our clients. We do this by understanding the attorneys also have active high-level security industries and economic climate in which Wiley Rein is a dominant presence in clearances that allow them to quickly “read they operate and the current and potential Washington, D.C., with more than 240 in” to matters when there is a need to access legal issues that impact their business. Most attorneys and public policy advisors. Our classified materials. The Legal Times has importantly, because Wiley Rein remains a firm has earned international promi- noted that the firm “represents as perfect Washington, D.C.-based firm that largely nence by representing clients in complex, a merging of public policy and corporate operates out of a single office, we are able to high-stakes regulatory, litigation, and transac- America as exists in Washington.” control costs and billing rates in a manner tional matters. Many of the firm’s attorneys that is nearly impossible in large, multi-office have held high-level positions in the White Wiley Rein operates at the intersection of or multinational law firms. House, on Capitol Hill, and in federal politics, law, government, business, and tech- agencies including the U.S. Department of nological innovation, representing a wide In addition, Wiley Rein generously gives Defense, the U.S. Patent and Trademark range of clients — from Fortune 500 corpora- back to the community, providing signifi- Office, the Federal Communications tions to trade associations to individuals — in cant pro bono legal services and charitable Commission, the U.S. Department of virtually all industries. We believe delivering contributions to more than 450 local and State, the U.S. Department of Commerce, consistent and successful results is achieved national organizations every year. the Federal Election Commission, and the through building true partnerships with our