Item 1.01.
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Entry into a Material Definitive Agreement.
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On August 11, 2016, Silicon Graphics International Corp.
(the
Company
) entered into an Agreement and Plan of Merger (the
Merger Agreement
) with Hewlett Packard Enterprise Company, a Delaware corporation (
Parent
), and Satellite Acquisition Sub, Inc.,
a Delaware corporation and a wholly-owned subsidiary of Parent (
Acquisition Sub
), pursuant to which, subject to satisfaction or waiver of the conditions set forth therein, Acquisition Sub will be merged with and into the Company,
with the Company surviving as a wholly-owned subsidiary of Parent (the
Merger
).
Subject to the terms and conditions of the Merger
Agreement, at the effective time of the Merger (the
Effective Time
), each outstanding share of the Companys common stock (other than shares owned by Parent, Acquisition Sub or any other wholly-owned subsidiary of Parent,
shares held by the Company as treasury stock, and shares held by stockholders of the Company who have perfected their statutory rights of appraisal under Section 262 of the Delaware General Corporation Law) will be converted into the right to
receive $7.75 in cash without interest (the
Merger Consideration
).
At the Effective Time, each option to acquire shares of Company
common stock that is outstanding immediately prior to the Effective Time and is held by a person then providing services to the Company or one of its subsidiaries shall be converted into a fully vested and exercisable option to acquire shares of
Parent common stock based on a conversion ratio set forth in the Merger Agreement and the applicable equity plan, and each award of restricted stock units (
Company RSUs
) representing the right to receive shares of Company
common stock that is outstanding immediately prior to the Effective Time (but excluding any Company RSU that becomes settlable as a result of the consummation of the Merger) and is held by a person then providing services to the Company or one of
its subsidiaries shall be converted into the right to acquire shares of Parent common stock based on the conversion ratio and the applicable equity plan.
The Companys board of directors (the
Board
) has unanimously approved the Merger and the Merger Agreement. The Merger Agreement
requires that the Merger be approved by the holders of at least a majority of the voting power of the outstanding common stock (the
Stockholder Approval
). The Board has adopted resolutions recommending that the stockholders
of the Company vote in favor of the adoption and approval of the Merger Agreement and the Merger.
In addition to the Stockholder Approval, consummation
of the Merger is subject to other customary closing conditions, including the expiration or termination of the respective waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and applicable foreign antitrust or
competition-related laws, the absence of any government order or other legal restraint prohibiting the Merger and no material adverse effect on the Company and its subsidiaries.
The Merger Agreement contains customary representations, warranties and covenants by each of the parties. The Company has also agreed, subject to certain
exceptions, not to enter into discussions concerning, or provide confidential information in connection with, any alternative transaction.
The Merger
Agreement contains certain termination rights for both the Company and Parent, including for the Company if the Board determines to enter into a superior proposal. Upon termination of the Merger Agreement under certain circumstances, the
Company may be obligated to pay Parent a termination fee of $12,200,000.
The foregoing description of the Merger and the Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
There are representations and warranties contained in the Merger Agreement which were made by the parties to each other as of specific dates. The
assertions embodied in these representations and warranties were made solely for purposes of the Merger Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating its
terms. Moreover, certain representations and warranties may not be
accurate or complete as of any specified date because they are subject to a contractual standard of materiality that is different from certain standards generally applicable to stockholders or
were used for the purpose of allocating risk between the parties rather than establishing matters as facts. Based upon the foregoing reasons, you should not rely on the representations and warranties as statements of factual
information. Investors should read the Merger Agreement together with the other information concerning the Company and Parent that the Company publicly files in reports and statements with the U.S. Securities and Exchange Commission (the
SEC
) as well as any public disclosures with respect to the Merger and the Merger Agreement made by Parent.