Item 2.01 Completion of Acquisition or Disposition of Assets
Pursuant to the Merger Agreement, at the Effective Time, each outstanding share
of E*TRADE common stock, par value $0.01 per share (the "E*TRADE Common Stock"),
issued and outstanding immediately prior to the Effective Time (other than
shares of E*TRADE common stock held (1) in treasury and (2) by Morgan Stanley
(other than any such shares held by Morgan Stanley (i) in its fiduciary,
representative or other capacity on behalf of other persons, (ii) as a result of
debts previously contracted by it, (iii) in its capacity as an underwriter or
market-maker or in connection with its proprietary trading or arbitrage
activities or other similar activities in the ordinary course of business,
(iv) in the context of its ordinary course brokerage (including prime
brokerage), asset management, private banking, wealth management, research or
similar activities or (v) in connection with its transactions that are
undertaken by pension funds or employee benefit programs), which were cancelled
at the Effective Time) were converted into the right to receive 1.0432 shares of
Morgan Stanley common stock, par value $0.01 per share (together with the cash
payments in lieu of fractional shares referred to in the following sentence,
such consideration, the "Common Share Consideration"). No fractional shares of
Morgan Stanley common stock were issued and each former E*TRADE stockholder who
would otherwise have been entitled to receive a fraction of a share of Morgan
Stanley common stock in connection with the Merger is entitled to receive in
lieu thereof a cash payment (together with the Common Share Consideration, the
"Common Merger Consideration"), without interest and subject to any applicable
withholding taxes, in accordance with the Merger Agreement.
Pursuant to the Merger Agreement, at the Effective Time, each outstanding
E*TRADE restricted stock unit award that was eligible to vest solely based on
continued service, restricted stock unit award that was eligible to vest based
on the achievement of performance goals, restricted stock award made to
directors of E*TRADE and deferred restricted stock unit award made to directors
of E*TRADE vested (if unvested) and was cancelled and converted into the right
to receive the Common Merger Consideration as if such award (including any
shares of E*TRADE common stock in respect of dividend equivalent units credited
thereon) had been settled in shares of E*TRADE common stock immediately prior to
the Effective Time. In the case of restricted stock unit awards that were
eligible to vest based on the achievement of performance goals, (i) with respect
to any performance periods that are completed on or before the Effective Time,
each such award vested at the greater of the target or actual level of
performance, as determined by the Compensation Committee of E*TRADE's board of
directors prior to the Effective Time and (ii) with respect to any performance
periods that are not completed on or before the Effective Time, each such award
vested at the target level of performance.
Pursuant to the Merger Agreement, at the Effective Time, each share of the
Company's Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock,
Series A, par value $0.01 per share (the "Series A Preferred Stock"),
outstanding immediately before the Effective Time was converted into the right
to receive one share of a newly created series of preferred stock of Morgan
Stanley with such rights, preferences, privileges and voting powers, and
limitations and restrictions, that, taken as a whole, are not materially less
. . .
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On the Closing Date, in connection with the consummation of the Merger, the
Company notified The NASDAQ Stock Market LLC and Nasdaq Global Select Market
(collectively, "Nasdaq") that the Merger has been consummated and requested that
the trading of shares of the E*TRADE Common Stock on Nasdaq be suspended and
that the listing of shares of the E*TRADE Common Stock on Nasdaq be withdrawn.
In addition, the Company requested that Nasdaq file with the SEC a notification
on Form 25 to report the delisting of the E*TRADE Common Stock from Nasdaq and
to deregister the E*TRADE Common Stock under Section 12(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Company intends to
file a Form 15 with the SEC to request the termination of the registration of
the E*TRADE Common Stock under Section 12(g) of the Exchange Act and to suspend
the Company's reporting obligations under Sections 13 and 15(d) of the Exchange
Act as soon as practicable.
Item 3.03. Material Modification to Rights of Security Holders.
The information set forth or incorporated by reference in Items 2.01, 3.01, 5.01
and 5.03 of this Current Report on Form 8-K is incorporated into this Item 3.03
by reference.
Pursuant to the Merger Agreement and in connection with the consummation of the
Merger, each share of E*TRADE Common Stock was converted into the right to
receive the Common Merger Consideration.
On the Closing Date, in connection with the consummation of the Mergers, the
Company, Second Merger Sub, Moon-Eagle Co-Obligor, Inc., a Delaware corporation
(the "Co-Obligor"), and The Bank of New York Mellon Trust Company, N.A., as
trustee (the "Trustee"), entered into the Fourth Supplemental Indenture (the
"Fourth Supplemental Indenture") to the Indenture, dated August 24, 2017 between
the Company and the Trustee (the "Base Indenture"), as supplemented by (i) the
First Supplemental Indenture, dated August 24, 2017 (the "First Supplemental
Indenture"), with respect to the Company's 2.950% Senior Notes due 2022 (the
"2022 Notes"), (ii) the Second Supplemental Indenture, dated August 24, 2017
(the "Second Supplemental Indenture"), with respect to the Company's 3.800%
Senior Notes due 2027 (the "2027 Notes"), and (iii) the Third Supplemental
Indenture, dated June 20, 2018 (the "Third Supplemental Indenture" and, together
with the Base Indenture, the First Supplemental Indenture and the Second
Supplemental Indenture, the "Indenture"), with respect to the Company's 4.500%
Senior Notes due 2028 (the "2028 Notes" and, together with the 2022 Notes and
the 2027 Notes, the "Notes"). Pursuant to the terms of the Fourth Supplemental
Indenture, each of Second Merger Sub and the Co-Obligor assumed all of the
Company's obligations under the Indenture and the Notes, including, without
limitation, the payment of the principal of and any premium and interest on the
Notes, as applicable, and the performance of every covenant of the Indenture and
the Notes on the part of the Company.
The foregoing descriptions of the Indenture and the Fourth Supplemental
Indenture do not purport to be complete and are qualified in their entirety by
reference to the full text of such agreements, copies of which are attached as
Exhibits 4.1, 4.2 and 4.3 to the Company's Current Report on Form 8-K filed on
August 24, 2017, Commission File Number 1-11921, Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on June 20, 2018, Commission File Number
1-11921, and Exhibit 4.1 to this Current Report on Form 8-K, respectively, and
are incorporated herein by reference.
Item 5.01. Changes in Control of Registrant.
The information set forth in the Introductory Note and Item 2.01 of this Current
Report on Form 8-K is incorporated into this Item 5.01 by reference. As a result
of the consummation of the Merger, pursuant to the Merger Agreement, a change in
control of E*TRADE occurred, and E*TRADE became a wholly owned subsidiary of
Morgan Stanley.
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Upon completion of the Merger on October 2, 2020, Sebastiano Visentini, who
constituted the sole director of Merger Sub as of immediately prior to the
Effective Time, became the sole director of the Company as of immediately
following the Effective Time, and the following directors of the Company
immediately prior to the Effective Time ceased to be directors of the Company
pursuant to the terms of the Merger Agreement (and not because of any
disagreement with the Company or its operations, policies or practices): Richard
J. Carbone, Robert Chersi, Jaime W. Ellertson, James P. Healy, Kevin T. Kabat,
James Lam, Rodger A. Lawson, Shelley B. Leibowitz, Michael A. Pizzi, Rebecca
Saeger, Donna L. Weaver and Joshua Weinreich.
In addition, upon completion of the Merger, all of the officers of the Company
immediately prior to the Effective Time ceased serving in their capacity as
officers of the Company. From and after the Effective Time, until their
respective successors are duly elected or appointed and qualified in accordance
with applicable law, the officers of Merger Sub will be the officers of the
surviving entity pursuant to the terms of the Merger Agreement.
The information set forth in the Introductory Note of this Current Report on
Form 8-K is incorporated by reference herein.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
At the Effective Time, the Company's amended and restated certificate of
incorporation and amended and restated bylaws were amended, respectively, to be
the same form as the certificate of incorporation and bylaws of Merger Sub as in
effect immediately prior to the Effective Time, which are filed herewith as
Exhibits 3.1 and 3.2, respectively, to this Form 8-K and are incorporated by
reference herein.
After giving effect to the Second Merger, the certificate of formation and
limited liability company agreement of Second Merger Sub continued in full force
and effect as the organizational documents of the surviving company in the
Second Merger, which was renamed E*TRADE Financial LLC, each of which is filed
herewith as Exhibits 3.3 and 3.4 respectively, to this Form 8-K and are
incorporated by reference herein.
Item 8.01. Other Events
On October 2, 2020, the Company and Morgan Stanley issued a joint press release
announcing the completion of the Mergers. A copy of the joint press release is
filed as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit
No. Description
3.1 Amended and Restated Certificate of Incorporation of E*TRADE
Financial Corporation.
3.2 Amended and Restated Bylaws of E*TRADE Financial Corporation.
3.3 Certificate of Formation of Moon-Eagle Merger Sub II, LLC.
3.4 Amended and Restated Limited Liability Company Agreement of E*TRADE
Financial, LLC.
4.1 Fourth Supplemental Indenture, dated as of October 2, 2020, among
Moon-Eagle Merger Sub II, LLC, Moon-Eagle Co-Obligor, Inc., E*TRADE
Financial Corporation and The Bank of New York Mellon Trust Company,
N.A., as trustee.
99.1 Joint Press Release issued by Morgan Stanley and E*TRADE, dated
October 2, 2020.
104 Cover Page Interactive Data File - the cover page XBRL tags are
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