Item 1.01 Entry into a Material Definitive Agreement.
On December 20, 2020, RigNet, Inc., a Delaware corporation ("RigNet"), entered
into an Agreement and Plan of Merger (the "Merger Agreement"), by and among
RigNet, Viasat, Inc., a Delaware corporation ("Viasat"), and Royal Acquisition
Sub, Inc., a Delaware corporation and wholly owned subsidiary of Viasat
("Acquisition Sub"). Upon the terms and subject to the conditions set forth in
the Merger Agreement, Acquisition Sub will merge with and into RigNet (the
"Merger"), with RigNet continuing as the surviving entity and a wholly owned
subsidiary of Viasat. Each of the board of directors of Viasat and the board of
directors of RigNet (the "RigNet Board") have unanimously approved the Merger
Agreement.
At the effective time of the Merger (the "Effective Time"), each share of common
stock of RigNet, par value $0.001 per share (the "RigNet Common Stock"), issued
and outstanding immediately prior to the Effective Time will be converted into
the right to receive 0.1845 (the "Exchange Ratio") fully paid and non-assessable
shares of common stock of Viasat, par value $0.0001 per share ("Viasat Common
Stock") (such consideration collectively, the "Merger Consideration").
At the Effective Time, (i) each RigNet option ("RigNet Option") held by an
individual who, as of immediately after the Effective Time, is an employee of
Viasat within the meaning of Form S-8 that is outstanding and unexercised,
whether vested or unvested, immediately prior the Effective Time (each, an
"Assumed RigNet Option") will be assumed by Viasat and converted automatically
into an option to purchase shares of Viasat Common Stock on the same terms and
conditions (including applicable vesting, exercise and expiration provisions) as
applied to such Assumed RigNet Option immediately prior to the Effective Time
(with the number of options and exercise price being adjusted based on the
Exchange Ratio); (ii) each RigNet Option that is not an Assumed RigNet Option
will accelerate in full and be terminated for no consideration; (iii) each award
of RigNet restricted stock units ("RigNet RSU") (a) that is held by an
individual who, as of immediately after the Effective Time, is an employee of
Viasat within the meaning of Form S-8, (b) that is outstanding immediately prior
to the Effective Time and (c) that vests solely on the basis of continued
employment or service (as opposed to performance vesting) (each, an "Assumed
RigNet RSU Award") will be assumed by Viasat and converted automatically into a
restricted stock unit award with respect to shares of Viasat Common Stock and
will otherwise remain subject to the same vesting, settlement and other terms
and conditions that applied to the underlying Assumed RigNet RSU Award
immediately prior to the Effective Time based on the Exchange Ratio; (iv) each
RigNet RSU (other than a Deferred RigNet RSU (as defined below)) that is not an
Assumed RigNet RSU Award will accelerate in full and be settled in shares of
Viasat Common Stock as of immediately prior to the Effective Time; and (v) each
RigNet RSU that is subject to, and not exempt from the requirements of,
Section 409A of the Internal Revenue Code of 1986, as amended (each a "Deferred
RigNet RSU") will be treated in accordance with the terms of the Merger
Agreement.
The completion of the Merger is subject to the satisfaction or waiver of
customary closing conditions, including: (i) a registration statement on Form
S-4 to be filed in connection with the Merger shall have become effective;
(ii) the adoption of the Merger Agreement by holders of a majority of the
outstanding shares of RigNet Common Stock; (iii) the expiration or termination
of review under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended; (iv) the receipt of certain other material regulatory consents and
approvals; (v) the authorization for listing of shares of Viasat Common Stock to
be issued in the Merger on Nasdaq; (vi) the absence of any court order or
regulatory injunction prohibiting completion of the Merger; (vii) subject to
specified materiality standards, the accuracy of the representations and
warranties of each party; (viii) compliance by each party in all material
respects with its covenants; (ix) the absence of any effects that have
constituted or resulted in, or would reasonably be expected to constitute or
result in, a material adverse effect with respect to either party; and (x) the
receipt by each party of certain closing tax opinions.
RigNet has agreed, subject to certain exceptions with respect to unsolicited
proposals, not to directly or indirectly solicit competing acquisition proposals
or to enter into discussions concerning, or provide confidential information in
connection with, any unsolicited alternative acquisition proposals.
Additionally, the RigNet Board is required to recommend the adoption of the
Merger Agreement to its stockholders, subject to certain exceptions. Prior to
the approval of the transaction-related proposals by the RigNet stockholders,
the RigNet Board may change its recommendation in response to an unsolicited
proposal for an alternative transaction, if the RigNet
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Board determines in good faith after consultation with its outside legal counsel
and financial advisor that the proposal constitutes a "Company Superior
Proposal" (as defined in the Merger Agreement), and that failure to take such
action would reasonably be expected to be inconsistent with their fiduciary
duties to RigNet and its stockholders under applicable law, subject to complying
with certain procedures set forth in the Merger Agreement. Prior to the approval
of the transaction-related proposals by the RigNet stockholders, the RigNet
Board may also change its recommendation if a "Company Intervening Event" (as
defined in the Merger Agreement) occurs, and the RigNet Board determines in good
faith after consultation with its outside legal counsel and financial advisor
that failing to change its recommendation would reasonably expected to be
inconsistent with its fiduciary duties, subject to complying with certain
procedures set forth in the Merger Agreement.
RigNet and Viasat have made customary representations and warranties in the
Merger Agreement. The Merger Agreement also contains customary covenants and
agreements, including covenants and agreements relating to (i) the conduct of
each of RigNet's and Viasat's business between the date of the signing of the
Merger Agreement and the closing date of the Merger and (ii) the efforts of the
parties to cause the Merger to be completed, including actions which may be
necessary to obtain the required regulatory consents and approvals for the
transaction.
The Merger Agreement contains certain customary termination rights for RigNet
and Viasat, including, among others, (i) the right to terminate with mutual
written consent, (ii) the right of either party to terminate if the Merger is
not completed by September 30, 2021 (subject to certain extensions in the event
that certain regulatory closing conditions remain outstanding), (iii) the right
of either party to terminate if a relevant legal restraint makes consummation of
the Merger illegal, (iv) the right of Viasat to terminate if the RigNet Board
. . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
In connection with the execution of the Merger Agreement, the RigNet Board
approved a retention program (the "Retention Program") for certain of the RigNet
executive officers, including its named executive officers. Pursuant to the
Retention Program, subject to the completion of the Merger, participants
(including RigNet's named executive officers) that remain employees of RigNet
through the closing of the Merger will be entitled to receive (1) a lump sum
cash bonus payable on the first regular payroll date following closing of the
Merger and (2) a grant of restricted stock units covering shares of Viasat
Common Stock ("Viasat RSUs") at the Effective Time. The awards payable to
RigNet's named executive officers under the Retention Program are as follows:
Name Retention Bonus Viasat RSUs
Steve Pickett $300,000 8,786
Lee Ahlstrom $245,000 7,175
Brad Eastman $210,000 6,150
The Viasat RSUs will vest on the 12-month anniversary of the closing of the
Merger, subject to such named executive officer's continued employment or
service with Viasat or a subsidiary of Viasat (including RigNet); provided that
vesting will accelerate in full if such named executive officer is terminated
without cause or such named executive officer resigns for good reason prior to
such date. Each of the named executive officers entered into a letter agreement
with RigNet governing the Retention Program, which also provides for a cutback
in the event that such awards, together with other payments and benefits, would
otherwise be subject to adverse tax consequences under Sections 280G and 4999 of
the Internal Revenue Code of 1986, as amended.
In addition, the third paragraph of Item 1.01 is incorporated by reference into
this Item 5.02.
The foregoing description of the letter agreements regarding the Retention
Program with each of the named executive officers of RigNet does not purport to
be complete and is qualified in its entirety by the full text of the letter
agreement, which will be filed with RigNet's Annual Report on Form 10-K for the
fiscal year ending December 31, 2020.
Item 8.01 Other Events.
Contemporaneously with the execution of the Merger Agreement, Viasat and Digital
Oilfield Investments LP, an affiliate of Kohlberg Kravis Roberts & Co. (the
"Stockholder"), entered into a support agreement (the "Support Agreement").
Pursuant to the Support Agreement, the Stockholder agreed to, among other
things, vote all of its shares in RigNet that it owns as of the record date for
the RigNet stockholder meeting (i) in favor of the adoption of the Merger
Agreement, (ii) against any acquisition proposal, and (iii) against any
proposal, action or agreement that would reasonably be expected to impede,
interfere with, delay or postpone, prevent or otherwise impair the Merger or the
other transactions contemplated by the Merger Agreement.
On December 21, 2020, RigNet issued a press release captioned "Viasat to Acquire
RigNet in All-Stock Transaction." A copy of the press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
On December 21, 2020, RigNet provided supplemental information regarding the
Merger in connection with a presentation to investors. A copy of the investor
presentation is attached hereto as Exhibit 99.2 and is incorporated herein by
reference.
Important Additional Information and Where to Find It
This communication does not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities or a solicitation of any
vote or approval. In connection with the proposed Merger, Viasat will file with
the SEC a registration statement on Form S-4, which will include the proxy
statement of RigNet that also constitutes a prospectus of Viasat (the "proxy
statement/prospectus").
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STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, THE REGISTRATION
STATEMENT AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC REGARDING THE
TRANSACTION CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. These documents (when they
become available) will contain important information about the proposed
transaction that should be read carefully before any decision is made with
respect to the proposed transaction. These materials will be made available to
stockholders of RigNet at no expense to them. Investors will be able to obtain
free copies of these documents (if and when available) and other documents filed
with the SEC by RigNet and/or Viasat through the website maintained by the SEC
at http://www.sec.gov. Copies of the documents filed with the SEC by RigNet will
be available free of charge on RigNet's internet website at http://www.rig.net.
Copies of the documents filed with the SEC by Viasat will be available free of
charge on Viasat's internet website at http://www.viasat.com.
Participants in the Solicitation
Viasat, RigNet, their respective directors and certain of their respective
executive officers may be considered, under SEC rules, participants in the
solicitation of proxies from the stockholders of RigNet in connection with the
proposed transaction. Information about the directors and executive officers of
RigNet is set forth in its Annual Report on Form 10-K for the year ended
December 31, 2019, which was filed with the SEC on March 11, 2020, and its proxy
statement for its 2020 annual meeting of stockholders, which was filed with the
SEC on March 30, 2020. Information about the directors and executive officers of
Viasat is set forth in its Annual Report on Form 10-K for the year ended
March 31, 2020, which was filed with the SEC on May 29, 2020, and its proxy
statement for its 2020 annual meeting of stockholders, which was filed with the
SEC on July 23, 2020. These documents can be obtained free of charge from the
sources indicated above. Additional information regarding the participants in
the proxy solicitation and a description of their direct and indirect interests
in the transaction, by security holdings or otherwise, will be contained in the
proxy statement/prospectus and other relevant materials to be filed with the SEC
when they become available.
Forward Looking Statements
This report includes "forward-looking statements" within the meaning of the safe
harbor provisions of the United States Private Securities Litigation Reform Act
of 1995 - that is, statements related to future, not past, events.
Forward-looking statements may include comments about the expected benefits of
the transaction, potential value to be realized by RigNet's stockholders, timing
of and ability to ultimately close the transaction, Viasat's financial position
and long-term strategy, the nature of any synergies, and other similar
statements. Forward-looking statements are based on current expectations and
include any statement that does not directly relate to a current or historical
fact. In this context, forward-looking statements often address RigNet's
expected future business and financial performance, and often contain words such
as "anticipate," "believe," "intend," "will," "expect," "plan" or other similar
words. These forward-looking statements involve certain risks and uncertainties,
including those risks set forth in Item 1A - Risk Factors of the Company's most
recent 10-K filing, and Item 1A- Risk Factors of the Company's 10-Q filing for
the quarter ended March 31, 2020, filed with the SEC on Monday, May 11, 2020,
and ultimately may not prove to be accurate. Actual results and future events
could differ materially from those anticipated in such statements. For further
discussion of risks and uncertainties, individuals should refer to RigNet's SEC
filings. RigNet undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances occurring after
this report. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report. All
forward-looking statements are qualified in their entirety by this cautionary
statement.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Number Description
2.1 Agreement and Plan of Merger, dated as of December 20, 2020, by and
among Viasat, Inc., Royal Acquisition Sub, Inc. and RigNet, Inc.†
99.1 Press Release, dated December 21, 2020, issued by RigNet, Inc.
99.2 Investor Presentation, dated December 21, 2020.
104 Cover Page Interactive Data File (embedded within the inline XBRL
Document).
†Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
registrant hereby undertakes to furnish supplementally copies of any of the
omitted schedules upon request by the SEC.
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