PERSPECTA INC. Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
The Merger Agreement provides that, upon the terms and subject to the conditions
set forth in the Merger Agreement, Merger Sub will merge with and into the
Company (the "Merger"), with the Company surviving as a wholly owned subsidiary
of Parent. Subject to the terms and conditions set forth in the Merger
Agreement, at the effective time of the Merger (the "Effective Time"), each of
the Company's issued and outstanding shares of common stock, par value
In addition, at the Effective Time:
• each stock option to acquire Shares ("Company Stock Option") granted pursuant
to thePerspecta Inc. 2018 Omnibus Incentive Plan (the "Company Stock Plan"), whether vested or unvested, outstanding immediately prior to the Effective Time, will be fully vested, canceled and converted into the right to receive a lump-sum cash payment, without interest, equal to the product of (A) the excess, if any, of the Merger Consideration over the applicable exercise price per Share subject to such Company Stock Option multiplied by (B) the number of Shares subject to such Company Stock Option; provided, however, that the portion of each Company Stock Option with respect to which the applicable exercise price per Share subject to such Company Stock Option is equal to or greater than the Merger Consideration will be canceled for no consideration;
• each restricted share unit payable in Shares, or whose value is determined with
reference to the value of Shares, granted pursuant to the Company Stock Plan,
whose vesting is conditioned in full or in part based on achievement of
performance goals or metrics ("Company PSUs") outstanding immediately prior to
the Effective Time will vest at the greater of the target level and actual
performance based on the results through the Effective Time as determined by
the Compensation Committee of the Company's Board of Directors and will be
canceled and converted into the right to receive, for each Share subject to
such then-vested Company PSU, a lump-sum cash payment equal to the Merger
Consideration;
• each restricted share unit payable in Shares, or whose value is determined with
reference to the value of Shares, granted pursuant to the Company Stock Plan,
other than a Company PSU ("Company RSU") outstanding immediately prior to the
Effective Time will vest in full and will be canceled and converted into the
right to receive, for each Share subject to such Company RSU, a lump-sum cash
payment equal to the Merger Consideration;
• each restricted share unit payable in Shares, or whose value is determined with
reference to the value of Shares, granted pursuant to thePerspecta Inc. 2018 Non-Employee Director Incentive Plan ("Director RSU") outstanding immediately prior to the Effective Time will vest in full and be canceled and converted into the right to receive, for each Share subject to such Director RSU, a lump-sum cash payment equal to the Merger Consideration; and
• all dividend equivalent payments with respect to Company RSUs, Company PSUs and
Director RSUs that have been accumulated or retained by the Company until the vesting or settlement of such awards will be distributed.
The Merger Agreement contains various customary representations, warranties and covenants, including, among others, covenants with respect to the conduct of the Company's business prior to the Effective Time. Pursuant to the terms of the Merger Agreement, prior to the Effective Time, the Company is permitted to pay its regular quarterly dividend to its stockholders consistent with past practice.
The Company has also agreed not to (a) solicit proposals relating to certain alternative transactions or (b) enter into discussions or negotiations or provide non-public information in connection with any proposal for an alternative transaction from a third party, subject to certain exceptions to permit the Company's Board of Directors to comply with its fiduciary obligations. The Company has also agreed to cease and cause to be terminated any existing discussions or negotiations, if any, with regard to certain alternative transactions. However, subject to satisfaction of certain conditions and under the circumstances specified in the Merger Agreement, the Company's Board of Directors may change its recommendation and may also terminate the Merger Agreement either (i) to accept a superior proposal, (ii) in response to a bona fide alternative acquisition proposal that the Company's Board of Directors determines constitutes a superior proposal or (iii) in response to an intervening event, in each case upon payment of the termination fee described below.
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The Merger Agreement includes a remedy of specific performance for Parent and,
subject to certain conditions specified in the Merger Agreement, for the
Company. The Merger Agreement also contains customary termination provisions for
each of the Company and Parent. Upon termination of the Merger Agreement, under
specified circumstances, including termination by the Company to accept and
enter into a definitive agreement with respect to a Company Superior Proposal
(as defined in the Merger Agreement), or by the Company or Parent following a
Company Change in Recommendation (as defined in the Merger Agreement), the
Company will be required to pay Parent a termination fee of
The Merger Agreement has been adopted by the Company's Board of Directors, and the Company's Board of Directors has recommended that stockholders of the Company vote in favor of the approval of the Merger and the Merger Agreement.
The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference.
The Merger Agreement, and the foregoing description of the Merger Agreement,
have been included to provide investors and our stockholders with information
regarding the terms of the Merger. The assertions embodied in the
representations, warranties and covenants contained in the Merger Agreement were
made only for purposes of the Merger Agreement, were solely for the benefit of
the parties to the Merger Agreement, and may be subject to limitations agreed
upon by the contracting parties, including being qualified by information in a
confidential disclosure letter provided by the Company to Parent in connection
with the signing of the Merger Agreement. Moreover, certain representations and
warranties in the Merger Agreement were made as of a specified date, may be
subject to a contractual standard of materiality different from what might be
viewed as material to stockholders, or may have been used for the purpose of
allocating risk between the parties to the Merger Agreement. Accordingly, the
representations and warranties in the Merger Agreement should not be relied on
by any persons as characterizations of the actual state of facts and
circumstances about the Company, Parent or Merger Sub at the time they were made
or otherwise, and information in the Merger Agreement should be considered in
conjunction with the entirety of the factual disclosure about the Company in the
Company's public reports filed with the
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On
Important Information for Investors and Stockholders
This communication is being made in respect of the proposed transaction
involving the Company and Parent. In connection with the proposed transaction,
the Company intends to file the relevant materials with the
The Company and its directors, executive officers, other members of its
management and employees may be deemed to be participants in the solicitation of
proxies of the Company stockholders in connection with the proposed transaction
under
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Forward-Looking Statements
All statements and assumptions in this communication that do not directly and
exclusively relate to historical facts could be deemed "forward-looking
statements." Forward-looking statements are often identified by the use of words
such as "anticipates," "believes," "estimates," "expects," "may," "could,"
"should," "forecast," "goal," "intends," "objective," "plans," "projects,"
"strategy," "target" and "will" and similar words and terms or variations of
such. These statements represent current intentions, expectations, beliefs or
projections, and no assurance can be given that the results described in such
statements will be achieved. Forward-looking statements include, among other
things, statements about the potential benefits of the proposed transaction; the
prospective performance and outlook of the Company's business, performance and
opportunities; the ability of the parties to complete the proposed transaction
and the expected timing of completion of the proposed transaction; as well as
any assumptions underlying any of the foregoing. Such statements are subject to
numerous assumptions, risks, uncertainties and other factors that could cause
actual results to differ materially from those described in such statements,
many of which are outside of the Company's control. Important factors that could
cause actual results to differ materially from those described in
forward-looking statements include, but are not limited to, (i) the ability to
obtain the requisite approval from stockholders of the Company; (ii)
uncertainties as to the timing of the proposed transaction; (iii) the risk that
the proposed transaction may not be completed in a timely manner or at all; (iv)
the possibility that competing offers or acquisition proposals for the Company
will be made; (v) the possibility that any or all of the various conditions to
the consummation of the proposed transaction may not be satisfied or waived,
including the failure to receive any required regulatory approvals from any
applicable governmental entities (or any conditions, limitations or restrictions
placed on such approvals); (vi) the occurrence of any event, change or other
circumstance that could give rise to the termination of the Merger Agreement,
including in circumstances that would require the Company to pay a termination
fee or other expenses; (vii) the effect of the pendency of the proposed
transaction on the Company's ability to retain and hire key personnel, its
ability to maintain relationships with its customers, suppliers and others with
whom it does business, its business generally or its stock price; (viii) risks
related to diverting management's attention from the Company's ongoing business
operations; (ix) the risk that stockholder litigation in connection with the
proposed transaction may result in significant costs of defense, indemnification
and liability; (x) various risks related to health epidemics, pandemics and
similar outbreaks, such as the COVID-19 pandemic, which may have material
adverse effects on the Company's business, financial position, results of
operations and/or cash flows; (xi) any issue that compromises the Company's
relationships with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description of Exhibit 2.1 Agreement and Plan of Merger Agreement, dated as ofJanuary 27, 2021 , by and amongPerspecta Inc. ,Jaguar Parentco Inc. andJaguar Merger Sub Inc. 3.1 Amendment to Bylaws ofPerspecta Inc. , effectiveJanuary 26, 2021 . 104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101). 4
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