Item 1.01Entry into a Material Definitive Agreement.
Merger Agreement
On
Consummation of the Offer is subject to various conditions set forth in the Merger Agreement, including (a) a majority of shares of Common Stock, on a fully diluted basis, being tendered in the Offer, (b) the accuracy of the Company's representations and warranties contained in the Merger Agreement, subject to agreed-upon materiality standards, (c) the Company's performance in all material respects of its obligations under the Merger Agreement, and (d) the other conditions set forth in Exhibit C to the Merger Agreement. The consummation of the Offer and Merger is not subject to a financing condition.
The Offer will expire on the date that is 20 business days following the
commencement date of the Offer, unless extended in accordance with the terms of
the Offer and the Merger Agreement and the applicable rules and regulations of
the
Following consummation of the Offer, Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the "Merger"). In the Merger, each outstanding share of Common Stock that is not tendered and accepted pursuant to the Offer (other than shares held in the treasury of the Company, any subsidiary of the Company, Parent or Merger Sub, and shares of Common Stock as to which appraisal rights have been perfected in accordance with applicable law) will be cancelled and converted into the right to receive the Offer Price, on the terms and conditions set forth in the Merger Agreement. Immediately prior to the Effective Time (as defined in the Merger Agreement), all unvested stock options will become fully vested, and at the Effective Time, each stock option will be canceled and converted into the right to receive an amount in cash equal to the difference between the Offer Price and the applicable per share exercise price, less any applicable tax withholding.
The board of directors of the Company (the "Board") has unanimously (a)
determined that the Offer, the Merger, the Merger Agreement and the other
transactions contemplated by the Merger Agreement and/or the ancillary
agreements and plans to be entered into as contemplated by the Merger Agreement
(collectively, the "Transactions") are advisable and in the best interests of
the shareholders of the
If after the Acceptance Time (as defined in the Merger Agreement) the shares of Common Stock owned by Merger Sub represent at least 90% of the then-outstanding shares of Common Stock, the Merger will be governed by Section 16-10a-1104 of the Utah Revised Business Corporation Act (the "URBCA") and shall be effected by Merger Sub and the Company as soon as practicable following the consummation of the Offer without a shareholders' meeting pursuant to the URBCA.
The Merger Agreement contains customary representations and warranties by Parent, Merger Sub and the Company. The Merger Agreement also contains customary covenants and agreements, including with respect to the operations of the business of the Company between signing and closing, governmental filings and approvals and other matters.
The Merger Agreement contains customary non-solicitation restrictions prohibiting the solicitation by the Company or its representatives of proposals relating to alternative business combination transactions and restricts the Company's ability to furnish non-public information to, or participate in any discussions or negotiations with, any third party with respect to any such transaction, subject to customary exceptions in the event of an acquisition proposal that was not solicited in violation of these restrictions and that the Board determines constitutes or could reasonably be expected to lead to a Superior Offer (as defined in the Merger Agreement).
The Merger Agreement contains termination rights for each of Parent, Merger Sub and the Company including by either Parent or the Company if the Acceptance Time (as defined in the Merger Agreement) shall not have occurred on or before
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A copy of the Merger Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Merger Agreement is qualified in its entirety by reference to the full text of the . . .
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 Merger Agreement as described in Item 1.01 of this Current Report, the Company entered into compensation and employment arrangements with certain of its executive officers as more fully described in this Item 5.02. The description of the Merger Agreement is incorporated into this Item 5.02 by reference.
Transaction Bonus Agreement
On
Amendment to Employment Agreements
On
Pursuant to the Amendments to Employment Agreement, the Executive Employment Agreements are amended effective as of the Closing Date as defined in the Merger Agreement, to include the following material terms (capitalized terms used below but not otherwise defined have the meanings ascribed to such terms in the Amendments to Employment Agreement or the Executive Employment Agreements, as applicable):
(1)executive will not be required to relocate to a new office location;
(2)the term of employment includes an annual automatic renewal at the end of the respective agreement terms, for additional terms of one year each; provided that either the Company or the executive may terminate employment at any time, with or without cause subject to conditions contained in the Amendment;
(3)the executive's current Base Salary will be maintained, is subject to periodic review, and may not be reduced below current levels in any given year;
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(4)executive will be paid a retention bonus in the amount of
(5)in the event the executive voluntarily terminates his employment for any reason, he will receive only his Base Salary, benefits and pro-rata amount of Retention Bonus through the date of termination;
(6)upon a Separation (as defined in the Executive Employment Agreement) due to a termination without Cause, or as a result of death or Disability (as defined in the Executive Employment Agreement), executive will receive (a) severance payments equal to six months Base Salary at the time of termination, less applicable withholding, payable over six months following the date of Separation, (b) payment of health and other benefits during the severance period; and (c) the Retention Bonus payments that would have been earned had employment continued for an additional six months beyond the date of Separation; provided, that the executive executes and delivers to the Company a release in the form attached to the Amendment; and
(7)the rights related to termination by the executive for Good Reason are waived and deleted.
All remaining provisions of the Executive Employment Agreements remain in full force and effect.
The foregoing descriptions of the Amendments to Employment Agreement and Transaction Bonus Agreements are qualified in their entirety by reference to the full text of the respective agreements.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The description of the Merger Agreement in Item 1.01 is incorporated into this Item 5.03 by reference.
On
The description of the Bylaw Amendment provided above is qualified in its entirety by reference to the actual Bylaw Amendment, a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by reference.
Item 8.01Other Events.
On
Additional Information about the Merger and Where to Find It
The Offer for the shares of Common Stock referenced in this Current Report on
Form 8-K has not yet commenced. This announcement is for informational purposes
only and is neither an offer to purchase nor a solicitation of an offer to sell
shares of Common Stock, nor is it a substitute for the Offer materials that
Parent and Merger Sub will file with the
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WILL CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF THE COMPANY'S SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SECURITIES.
The Offer to Purchase, the related Letter of Transmittal and certain other
tender offer documents, as well as the Solicitation/Recommendation Statement,
will be made available to all holders of shares of Common Stock at no expense to
them. The Offer materials and the Solicitation/Recommendation Statement will be
made available for free at the
In addition to the Offer to Purchase, the related Letter of Transmittal and
certain other tender offer documents, as well as the Solicitation/Recommendation
Statement, the Company files annual, quarterly and current reports and other
information with the
Cautionary Notice Regarding Forward-Looking Statements
This Form 8-K contains "forward-looking statements" relating to the acquisition
of Company by Parent. Such forward-looking statements include the ability of the
Company and Parent to complete the transactions contemplated by the Merger
Agreement, including the parties' ability to satisfy the conditions to the
consummation of the Offer and the other conditions set forth in the Merger
Agreement and the possibility of any termination of the Merger Agreement. Such
forward-looking statements are based upon current expectations that involve
risks, changes in circumstances, assumptions and uncertainties. Actual results
may differ materially from current expectations because of risks associated with
uncertainties as to the timing of the Offer and the subsequent Merger;
uncertainties as to the percentage of shares of Common Stock that will be
tendered in the Offer; the possibility that various conditions to the
consummation of the Offer or the Merger may not be satisfied or waived; the
effects of disruption from the transactions contemplated by the Merger Agreement
on the Company's business and the fact that the announcement and pendency of the
transactions may make it more difficult to establish or maintain relationships
with employees, suppliers and other business partners; the risk of shareholder
litigation in connection with the Offer or the Merger; other uncertainties
pertaining to the business of the Company, including those set forth in the
"Risk Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" sections of the Company's Annual Report on Form 10-K
for the year ended
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. 2.1 Agreement and Plan of Merger by and amongElevate Entertainment Inc.,Elevate Acquisition Corporation andEvans & Sutherland Computer Corporation , datedFebruary 9, 2020 .* 3.1 Bylaw Amendment No. 3 to Amended and Restated Bylaws ofEvans & Sutherland Computer Corporation ,February 9, 2020 99.1 Joint Press Release, datedFebruary 10, 2020 (incorporated by reference to Exhibit 99.1 to the Company's Schedule 14D-9, filed with theSecurities and Exchange Commission onFebruary 10, 2020 ) * Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to theSEC upon request.
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