UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Filed by the Registrant x                             Filed by a Party other than the Registrant ¨

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¨   Preliminary Proxy Statement

 

¨   Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

¨   Definitive Proxy Statement

 

x   Definitive Additional Materials

 

¨   Soliciting Material Pursuant to §240.14a-12

 

 

ENTRUST, INC.

 

(Name of Registrant as Specified In Its Charter)

 

 

  

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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  (2)   Aggregate number of securities to which transaction applies:

 

  

 
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This filing consists of information initially used on June 15, 2009 by Entrust, Inc. in connection with a presentation made to RiskMetrics Group.

Investor Relations
June -
July 2009

©
Copyright Entrust, Inc. 2008
2
This presentation does not constitute an offer of any securities for sale.  In connection with the proposed
merger transaction, Entrust has filed a proxy statement regarding the proposed merger transaction with the
Securities and Exchange Commission.  Investors and security holders are urged to read the proxy statement
and other documents filed by Entrust with the SEC because they contain important information about Entrust
and the proposed merger transaction.  Investors and security holders may obtain a free copy of the definitive
proxy statement and other documents at the SEC ’ s website at www.sec.gov .  The definitive proxy statement
and other relevant documents may also be obtained free of charge from Entrust by directing such requests to:
Entrust, Inc., 5400 LBJ Freeway, Suite 1340, Dallas, Texas 75240, Attention:  Investor Relations.  Investors
and security holders are urged to read the proxy statement and other relevant materials before making any
voting or investment decisions with respect to the merger.

©
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Agenda
•
Transaction Background and Key Dates (through signing)
•
Go-Shop Process and Results
•
Additional Information in Go-Shop process
•
Conclusion
The Board of Directors of Entrust, Inc. believes that $1.85 per share is likely to
result in greater value to the company’s stockholders than the other
alternatives it has considered.

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Transaction Background and Key Dates (through signing)

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5
Transaction Background and Key Dates (through signing)
Date
Event
10/15/2007
Board of directors approved the engagement of Barclays Capital as Entrust’s financial advisor to assist Entrust
in exploring various strategic alternatives
12/2007 - 3/2008
Entrust ran sell side process which ended in the Board determining the bid was insufficient
9/2008
Board directed company to evaluate "Go Private" alternatives
9/2008
Thoma Bravo contacted Entrust in regards to exploring an acquisition of Entrust
9/2008 - 10/2008
Entrust management conducted initial discussions with Thoma Bravo and another private equity firm in regards
to a potential acquisition of the company
- Thoma Bravo and the other private equity firm negotiated NDAs and gave initial price guidance
11/2008 - 12/2008
Thoma Bravo and the other private equity firm conducted initial due diligence with access to data room
12/23/2008 - 12/24/2008
Received bid package from Thoma Bravo offering $1.75 and the other private equity firm conveyed it was no
longer interested in exploring a transaction with Entrust
12/26/2008
Strategic Planning Committee decided to continue negotiations with Thoma Bravo and grant access to more
diligence materials in an effort to receive a better offer price
1/2009 - 4/2009
Thoma Bravo conducted further diligence and held management meetings
2/20/2009
Thoma Bravo sent Letter of Intent offering $1.85 per share for Entrust
4/11/2009
Entrust Board of Directors approved transaction with Thoma Bravo

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Go-Shop Process and Results

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7
Transaction
Background
and
Key
Dates
(“Go
Shop”)
Date
Event
4/12/2009 - 5/13/09
During
the
“go-shop”
period
between
April
12,
2009
and
May
13,
2009,
the
company
and
its
financial
advisor
actively
initiated,
solicited
and
encouraged
the
submission
of
acquisition
proposals
by
third
parties.
During
this
time,
the
company
and
its
advisors
were
in
contact
with
35
separate
parties
to
discuss
their
interest
in
making
a
proposal
to
acquire
the
company.
These
35
separate
parties
included
a
combination
of
security
software
companies,
diversified
software,
technology
and
industrial
companies
and
private
equity
parties.
Of
the
35,
11
completed
NDAs
with
the
Company
and
all
of
these
11
met
with
the
company
and
were
granted
access
to
key
company information inside a virtual data room.
5/14/2009
Entrust announced that, as a result of the “go-shop” process, it had received written, non-binding indications of
interest from three separate parties.  One of the parties was a private equity firm and two were modestly sized
operating companies.  Each of the non-binding indications of interest contemplated a per share price payable to
the company’s stockholders higher than the per share price contemplated by the merger agreement, but each
was also subject to significant conditions, including conducting due diligence, arranging financing and negotiation
of definitive agreements. 
5/14/2009 - 6/3/09
After designating the three as “excluded parties” under the merger agreement, the company provided extensive
due diligence materials to, and continued discussions and negotiations with, each of these three parties and their
representatives as permitted under the merger agreement.
6/4/2009
Entrust Board of Directors announced that none of the three non-binding indications of interest delivered during
the “go-shop” period under its existing merger agreement resulted in a “superior proposal.”  As a result, the “go-
shop” process under the existing merger agreement is deemed terminated and Entrust is no longer pursuing
discussions with the “excluded parties” identified during this “go-shop” process. 
6/4/2009
The Company also announced that it has postponed the special meeting of stockholders until July 10, 2009
6/4/2009
Entrust Board of Directors unconditionally reaffirmed its recommendation that all Entrust stockholders vote “FOR”
the approval of the Merger

©
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8
35 Parties Contacted
( security
software
companies,
diversified
software,
technology
and
industrial
companies
and
private
equity
parties)
11 Executed NDAs
11 engaged in
Due Diligence
Process
3 Made non -
binding
indications of
interest
None of the parties presented an offer sufficient
to constitute a “superior proposal”
Go-Shop Process and Results

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9
Additional Information in Go-Shop process

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10
•
Potential conflicts of interests among executives
–
At the time the Company was negotiating the definitive merger agreement with Thoma
Bravo,
it
was
aware
of
the
potential
for
a
perceived
conflict
of
interest
with
respect
to
management’s involvement in the process. The board of directors took two steps to
ensure that there was not a conflict of interest. 
•
The Board of Directors separated the role of CEO and Chairman of
the Board. 
•
They also delegated authority to the Strategic Planning Committee to negotiate the terms
of the merger agreement, including the terms of the Go-Shop provisions.
–
The Strategic Planning Committee of the board of directors of the Company conducted
all negotiations on behalf of the Company with the three Excluded Parties, assisted by
Barclays Capital (the Company’s financial advisor)
–
Management was involved only as necessary to facilitate due diligence and only as
approved by the Strategic Planning Committee. 
–
Any allegation that management led the process or engaged in conflicts of interest
with respect to the process is entirely unfounded and contrary to the findings of the
board of directors.

©
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11
•
Did
the
management
receive
a
“success
fee”
for
their
part
in
this transaction?
–
The “ success fees ”
actually represent payments to the executives in lieu of contractually
guaranteed larger payments
•
These executives have agreed to enter into new severance arrangements that provide for
substantially
reduced
severance
entitlements
and
no
change
in
control
bonuses. 
•
These new arrangements are reflected in non-binding term sheets entered into between the executives
and Thoma
Bravo
–
The existing Severance & Change in Control Agreements were approved by both t he
Company’s board of directors and Compensation Committee
•
The dissenting director served on both of these bodies, at the time they were implemented. 
•
The board of directors believes the Severance & Change in Control Agreements have fulfilled
both
functions
for
which
they
were
designed
in
2003
to
deal
with
CEO
retention
and
as
incentives
for their cooperation in completing a sale of the business
–
The equity in the surviving corporation to be received by certain members of the company’s
management cannot be easily valued.  It is subject to vesting (both time and performance) and
is comprised primarily of common stock, which will be junior to outstanding preferred stock both
in liquidation and other preferences.

©
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12
•
Entrust stock traded above the offer price during the
“Go-shop”
period
–
With significant deal certainty in the Thoma
Bravo transaction a “virtual floor”
of $1.85 was in
place, which allowed for speculation that a higher value could be possible in the “go-shop”
period.
–
The Company also believes that those inflated stock prices were the result of speculation that
one or more of the three non-binding indications of interest would mature into a binding offer at
a more than $1.85 per share.
–
Once the Company issued its press release on June 4, 2009 reporting that no Superior
Proposal had been received, the Company Common Stock price returned to trading below the
offer price of $1.85.
–
Moreover, the downside risk of our stockholders voting against the proposed transaction with
Thoma
Bravo could be significant.
•
As described in definitive proxy statement, the company faces significant challenges operating as a
stand alone entity.
•
Were the stock to trade down to its average closing price for just the 30-days prior to April 9, 2009, the
date we announced the proposed Merger, our stockholders would face substantial losses in value.

©
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13
•
While the selected comparable companies are reasonably similar in their business to Entrust, there are
inherent
differences
between
Entrust
and
the
peer
companies
that
could
affect
the
trading
value
of
each
–
Differences in scale, growth prospects, profitability levels, competitive position and  product breadth
–
Public company and other costs have a larger relative impact on sub-scale companies than on large-scale companies (depresses earnings
for sub-scale companies more so than for large-scale companies)
–
P/E multiples for certain peer companies are not meaningful
•
The Company considered these qualitative judgments and believes it is inappropriate to, and therefore
did not, rely solely on the quantitative results of the selective comparable company analysis
•
Entrust Historical and 2009 expected revenue growth rate would put it at the bottom of both a large scale
and peer analysis
–
Historical growth rates of peers are all in excess of Entrust
–
At the time of the transaction, Entrust traded at the bottom end
of the range of its peer group
•
Entrust profitability figures suggest offer price of $1.85 is fair    
–
EBITDA multiple is a premium to comparable companies
–
PE and growth-adjusted PE (PEG) are in-line with comparable companies
–
The
offer
price
of
$1.85
per
share
represents
a
premium
of
approximately
22.5
percent
to
the
average
closing
share
price
for
the
30
trading
days
prior
to
April
9,
2009,
and
a
premium
of
approximately
25.8
percent
to
the
average
closing
price
for
the
90
trading
days
prior
to
April
9, 2009
Entrust implied valuation multiples at offer price are fair
After a two year process $1.85 is the price the market has been willing to pay

©
Copyright Entrust, Inc. 2008
14
•
Why was the date moved to July 10th
–
Entrust needed to set a new date after maximizing the time available under the “ go shop ”
–
The Board of Directors looked at the calendar to evaluate the number of days for the market
to
absorb
the
new
information
that
was
going
to
be
released
on
June
4
th
regarding
the
absence of any “Superior Proposals”
•
Key determinates for setting date were;
–
The necessary time to contact shareholders to explain the process and answer any
questions
–
Required time for the proxy advisory firms to absorb the data and provide an update, if any, to their
recommendations.
–
The July 4
th
holiday weekend
–
The Board of Directors looked to do it as soon after the July 4th holiday while not risking poor
attendance
because
of
the
holiday;
July
10
th
seemed
to
be
the
best
date.
–
The
record
date
for
stockholders
entitled
to
vote
at
the
special
meeting
will
remain
May 11, 2009,
which will allow those stockholders as of that date to vote on the
acquisition as well as provide the timeliest vote.
–
Stockholders who have previously voted may change their vote, but need not vote
again.

©
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15
Reaffirmation of Board Recommendation
In view of the absence of any Superior Proposal and for all of the
reasons provided in the Proxy Statement, the board of directors of
the Company reaffirms its view that that Merger contemplated by
the Merger Agreement is fair to and in the best interests of the
Company and its stockholders, and unconditionally reaffirms its
recommendation that all Entrust stockholders vote “FOR”
the
approval of the Merger contemplated by the Merger
Agreement at the special meeting of stockholders now
scheduled to be held on July 10, 2009 .

©
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16
Conclusion

©
Copyright Entrust, Inc. 2008
17
Conclusion
•
Board process designed to ensure stockholders receive maximum value
for
their investment
–
After two years of actively evaluating strategic alternatives the board of directors determined the
Thoma
Brava offer was the best alternative for stockholders
•
Fair value of $1.85 cash per share
–
Fairness of price supported by valuation analysis
–
$1.85 per share represents a premium of approximately 22.5%
to the average closing share
price
of
the
Company's
Common
Stock
for
the
thirty
days
prior
to
April
9,
2009
•
Optimal structure and certainty of terms
–
Strong
certainty
to
close
terms
~
favorable
to
company
~
“they
signed
it,
they
bought
it
contract”
–
100% cash with no financing condition
•
“Go-shop”
provision allowed Entrust to consider and accept better offers ~
–
No “Superior Proposals”
were submitted
•
Entrust Board continues to believe the proposed transaction
is in the
best interest of stockholders
•
The Board recommends stockholders vote “FOR”
the proposed transaction
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