Item 1.01 Entry into a Material Definitive Agreement
Merger Agreement
On April 14,
2019, Electronics For Imaging, Inc., a Delaware corporation (the Company or EFI) entered into an Agreement and Plan of Merger (the Merger Agreement) with East Private Holdings II, LLC, a Delaware limited liability
company (Parent) and East Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (Merger Sub), providing for the merger of Merger Sub with and into the Company (the Merger), with the
Company continuing as the surviving company of the Merger and a wholly owned subsidiary of Parent. Parent and Merger Sub are affiliates of the Siris Funds (as defined below).
The board of directors of the Company (the Company Board) unanimously, among other things, (1) determined that the Merger
Agreement and the transactions contemplated thereby, including the Merger (collectively, the Transactions), are advisable and fair to, and in the best interests of, the Company and its stockholders (the Company Shareholders),
(2) adopted the Merger Agreement and the Transactions, including the Merger, (3) directed that the Merger Agreement be submitted to the Company Shareholders for their adoption and (4) resolved, subject to Section 5.3 of the Merger
Agreement, to recommend that the Company Shareholders adopt the Merger Agreement.
Subject to the terms and conditions set forth in the
Merger Agreement, at the effective time of the Merger (the Effective Time), each share of common stock of the Company, par value $0.01 per share (a Company Common Share), outstanding as of immediately prior to the Effective
Time (other than Company Common Shares (1) held by the Company as treasury shares, (2) owned by the Parent or Merger Sub, (3) owned by any direct or wholly owned subsidiary of the Company, or (4) held by Company Shareholders who
properly exercised their appraisal rights under the Delaware General Corporation Law (the DGCL)) will automatically be cancelled, extinguished and converted into the right to receive an amount equal to $37.00 in cash per share, without
interest (the Merger Consideration).
In addition, at or immediately prior to the Effective Time, each of the Companys
outstanding restricted stock units that is subject to time-based vesting requirements only (a Company RSU) and each of the Companys outstanding restricted stock units that is subject to both time-based and performance-based vesting
requirements (a Company PSU) will be treated, as follows: (1) each Company RSU that is currently outstanding as of the date hereof that is vested or scheduled to vest within 12 months after the closing of the Merger (the
Closing) will be converted into the right to receive the Merger Consideration promptly following the Closing; (2) each other Company RSU will be assumed and converted into the right to receive the Merger Consideration, subject to
applicable tax withholding, in accordance with its existing vesting schedule and applicable terms and conditions immediately prior to the Effective Time, including the holders continued employment or service through the applicable vesting
date; (3) each Company PSU granted pursuant to the Companys 2019 annual bonus program will be assumed and converted into the right to receive the Merger Consideration, subject to applicable tax withholding, in accordance with its existing
vesting schedule and applicable terms and conditions immediately prior to the Effective Time, including achievement of the applicable performance goals and the holders continued employment or service through the applicable vesting date;
(4) each other Company PSU (a Company LTIP PSU), to the extent it would vest if the target level of performance established for the award had been attained, will be assumed and converted into a right to receive the Merger
Consideration, subject to applicable tax withholding, in accordance with the time-based vesting schedule for the award (but in no event earlier than the end of the applicable performance period) and the applicable terms and conditions immediately
prior to the Effective Time (other than the performance-based vesting conditions), including the holders continued employment through the applicable vesting date; and (5) each Company LTIP PSU, to the extent eligible to vest only if the
target level of performance under the award was exceeded and held by an individual employed by the Company or one of its subsidiaries at the Effective Time, will be assumed and converted into the right to receive the Merger Consideration, subject to
applicable tax withholding, in accordance with the applicable terms and conditions immediately prior to the Effective Time, including the time-based and performance-based vesting requirements applicable to the award, and any such Company LTIP PSU
held by an individual not employed by the Company or one of its subsidiaries at the Effective Time will be cancelled without payment at the Effective Time. Any Company PSUs as to which the applicable performance period has ended prior to the
Effective Time and that remain subject only to time-based vesting conditions will be treated as Company RSUs as described above. In addition, at or immediately prior to the Effective Time, each of the Companys stock options (whether vested or
unvested) will be canceled and converted into the right to receive, for each Company Common Share subject to the option, the Merger Consideration less the
per-share
exercise price of the option (with any
option that has a
per-share
exercise price equal to or greater than the Merger Consideration being cancelled without payment at the Effective Time), subject to applicable tax withholding. In each case, any
existing provisions for accelerated vesting of Company equity awards in connection with the transaction or in connection with a severance event under an employment or similar agreement will continue in effect in accordance with their terms.