Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in the Introduction of this Current Report on Form 8-K is incorporated herein by reference.
On the Closing Date, at the Effective Time, each share of common stock, par value $0.001 per share, of the Company (collectively, the “Shares” and each a “Share”), issued and outstanding immediately prior to the Effective Time (other than (i) Shares owned by Parent or Merger Sub or any of their respective subsidiaries, (ii) Shares owned by the Company as treasury stock, (iii) Shares held by stockholders who did not vote in favor of the adoption of the Merger Agreement (as may be amended) and who have properly exercised appraisal rights in respect of such Shares in accordance with Section 262 of the Delaware General Corporation Law, and (iv) shares of restricted stock issued to certain officers in connection with the settlement of certain restricted stock units and performance restricted stock units (such restricted shares, the “Restricted Shares”)), was cancelled and converted into the right to receive $21.00 per Share in cash, without interest (the “Merger Consideration”).
In addition, at the Effective Time, unless otherwise mutually agreed by Parent and the Company, or by Parent and the applicable holder, after consultation with the Company, each option to purchase Shares (a “Company Option”) that was granted under the Company’s 2006 Stock Incentive Plan, the Company’s Amended and Restated 2015 Equity Incentive Plan and the Nexmo Inc. 2011 Stock Plan (collectively, the “Company Stock Plans”) and was outstanding as of immediately prior to the Effective Time, whether vested or unvested, (i) if the per Share exercise price of such Company Option was equal to or greater than the Merger Consideration, such Company Option was terminated and cancelled, without any consideration being paid in respect thereof, and has no further force or effect and (ii) if the per Share exercise price of such Company Option was less than the Merger Consideration, such Company Option was terminated and cancelled in exchange for the right to receive a lump sum cash payment in the amount equal to (A) the number of Shares underlying the Company Option immediately prior to the Effective Time, multiplied by (B) an amount equal to the Merger Consideration minus the applicable exercise price.
Each restricted stock unit that was subject to only time-based vesting conditions (a “Restricted Stock Unit”) that was granted under the Company Stock Plans and was outstanding as of immediately prior to the Effective Time, whether vested or unvested, was, unless otherwise mutually agreed by Parent and the Company, or by Parent and the applicable holder, after consultation with the Company, terminated and cancelled in exchange for: (i) with respect to Restricted Stock Units that vested in accordance with their terms on or prior to the Effective Time but had not yet been paid, the right to receive a lump sum cash payment in the amount equal to (A) the number of Shares underlying such Restricted Stock Unit, multiplied by (B) the Merger Consideration; and (ii) with respect to all other Restricted Stock Units, a new cash-based award representing the right to receive an unvested amount in cash equal to (A) the number of Shares underlying such Restricted Stock Unit, multiplied by (B) the Merger Consideration, vesting, subject to the continued employment of the former holder of such Restricted Stock Unit with Parent and its Affiliates (including the Surviving Corporation), on the same vesting schedule (including with respect to any terms providing for acceleration of vesting) and otherwise on substantially the same terms as the corresponding Restricted Stock Unit, except as otherwise provided for in the Merger Agreement.
Each performance restricted stock unit that was subject to performance-based vesting conditions (a “Performance Restricted Stock Unit”) that was granted under the Company Stock Plans and was outstanding immediately prior to the Effective Time, whether vested or unvested, was, unless otherwise mutually agreed by Parent and the Company, or by Parent and the applicable holder, after consultation with the Company, terminated and cancelled in exchange for: (i) with respect to Performance Restricted Stock Units with a performance period that ended on or prior to the Effective Time, the right to receive a lump sum cash payment in the amount equal to (A) the number of Shares subject to such Performance Restricted Stock Unit that vested based on the actual level of achievement under the awards, multiplied by (B) the Merger Consideration; and (ii) with respect to all other Performance Restricted Stock Units, a new cash-based award representing the right to receive an unvested amount in cash equal to (A) the number of Shares subject to such Performance Restricted Stock Unit that would vest based on the actual level of achievement as of the Effective Time compared against pro-rated performance measures as of the Effective Time, multiplied by (B) the Merger Consideration, vesting, subject to the continued employment of the former holder of such Performance Restricted Stock Unit with Parent and its Affiliates (including the Surviving Corporation), on the same time-based vesting schedule (including with respect to any terms providing for acceleration of vesting) and otherwise on substantially the same terms as the corresponding Performance Restricted Stock Unit, except as otherwise provided for in the Merger Agreement.
Each Restricted Share that was outstanding immediately prior to the Effective Time was terminated and cancelled in exchange for a cash-based award representing the right to receive an unvested amount in cash equal to (A) the number of Restricted Shares multiplied by (B) the Merger Consideration, vesting, subject to the continued employment of the former holder of such Restricted Shares with Parent and its Affiliates (including the Surviving Corporation), on the same vesting schedule (including
with respect to any terms providing for acceleration of vesting) and otherwise on substantially the same terms as the corresponding Restricted Shares, except as otherwise provided for in the Merger Agreement.
In addition, as a result of the Merger and pursuant to the terms of an amendment (“Amendment No. 1”) to the Tax Benefits Preservation Plan, dated as of June 7, 2012, by and between the Company and American Stock Transfer & Trust Company, LLC (the “Preservation Plan”), as of immediately prior to the Effective Time, the Rights (as defined in the Preservation Plan) have expired. A copy of Amendment No. 1 was filed as Exhibit 4.1 to the Current Report on Form 8-K filed by the Company with the SEC on November 22, 2021 and a copy of the Preservation Plan was filed as Exhibit 4.1 to the Current Report on Form 8-K filed by the Company with the SEC on June 8 2012. Amendment No. 1 and the Preservation Plan are incorporated herein by reference.
The description of the Merger set forth above does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed by the Company as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on November 22, 2021.
