VMWARE, INC. (NYSE:VMW) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On August 22, 2019, VMware, Inc. (the Company) entered into an Agreement and Plan of Merger (the Merger Agreement) by and among the Company, Calistoga Merger Corp., a wholly owned subsidiary of the Company (Merger Sub), and Carbon Black, Inc. (Carbon Black). to the Merger Agreement, and upon the terms and subject to the conditions thereof, Merger Sub will commence a cash tender offer (the Offer) to purchase all of the outstanding shares of common stock, par value $0.001 per share, of Carbon Black (Carbon Black Common Stock) at a price per share of $26.00 (such amount, or any other amount per share paid in the Offer in accordance with the Merger Agreement, the Offer Price), net to the holders of Carbon Black Common Stock in cash, without interest and subject to any required withholding of taxes (the Merger Consideration).
Promptly following the consummation of the Offer, upon the terms and subject to the conditions of the Merger Agreement, Merger Sub shall, in accordance with section 251(h) of the Delaware General Corporation Law (the DGCL), merge with and into Carbon Black (the Merger), with Carbon Black surviving the Merger and each share of Carbon Black Common Stock that is not validly tendered and irrevocably accepted for payment to the Offer will be converted into the right to receive the Merger Consideration.
Under the terms of the Merger Agreement, Merger Subs obligation to accept and pay for any shares of Carbon Black Common Stock to the Offer is subject to customary conditions, including, among others, (i) the condition that, prior to the expiration of the Offer, the number of shares of Carbon Black Common Stock validly tendered and not properly withdrawn (but excluding shares tendered to guaranteed delivery procedures that have not yet been received by the depository, as such terms are defined in section 251(h)(6) of the DGCL), together with any shares of Carbon Black Common Stock otherwise owned by Merger Sub or its affiliates (as defined in section 251(h)(6) of the DGCL), represent at least a majority of the shares of Carbon Black Common Stock outstanding immediately following the consummation of the Offer (the Minimum Condition); (ii) no law or order is in effect that has the effect of restraining, enjoining or otherwise prohibiting consummation of the Offer or the Merger; (iii) the expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of all other required approvals, consents or clearances under specified foreign merger control laws; (iv) the accuracy of Carbon Blacks representations and warranties in the Merger Agreement, subject to specified materiality qualifications; (v) compliance by Carbon Black with its covenants in the Merger Agreement in all material respects; and (vi) the absence of any changes that have (or would reasonably be expected to have) a material adverse effect on the business, results of operations, assets or condition (financial or otherwise) of Carbon Black and its subsidiaries taken as a whole (subject to customary carveouts) that is continuing as of immediately prior to the expiration of the Offer.
The Merger Agreement and the consummation of the transactions contemplated thereby have been unanimously approved by the Carbon Black board of directors, and the Carbon Black board of directors has resolved to recommend to the stockholders of Carbon Black to accept the Offer and tender their shares of Carbon Black Common Stock in the Offer. Carbon Black has agreed not to solicit alternative transactions, subject to customary exceptions.
The Merger Agreement provides that at the effective time of the Merger, (1) all outstanding vested options with a per share exercise price less than the Merger Consideration relating to Carbon Black Common Stock other than rollover options, as defined in the Merger Agreement, will be cancelled and the holders will be entitled to receive the Merger Consideration in respect of each net share covered by such option (as determined in accordance with the formula in the Merger Agreement), less applicable withholding of taxes, (2) all outstanding unvested options relating to Carbon Black Common Stock with a per share exercise price less than the Merger Consideration held by continuing employees (as defined in the Merger Agreement), (rollover options), and unvested restricted stock units relating to Carbon Black Common Stock held by continuing employees will be substituted by the Company and converted into corresponding awards (with any incentive stock options converted to nonqualified stock options) relating to Company Class A common stock in accordance with the terms set forth in the Merger Agreement, (3) all outstanding restricted stock units relating to Carbon Black Common Stock that are not converted into awards relating to Company Class A common stock will be cancelled, (4) any restricted Carbon Black Common Stock will be cancelled and the holders will be entitled to receive the Merger Consideration subject to the same vesting schedule and (5) all outstanding options relating to Carbon Black Common Stock with a per share exercise price equal to or greater than the Merger Consideration or held by non-continuing employees shall be cancelled for no consideration.
The Merger Agreement contains representations, warranties and covenants of the Company, Merger Sub and Carbon Black that are customary for a transaction of this nature, including among others, covenants by Carbon Black regarding the conduct of its business during the pendency of the transactions contemplated by the Merger Agreement, public disclosures and other matters.