Item 1.01 Entry into a Material Definitive Agreement.
As previously reported in the Current Report on Form8-K (the “July8-K”) filed on July 2, 2018 by VMware, Inc. (“VMware”), VMware disclosed that on July 1, 2018, it entered into a letter agreement (the “Governance Agreement”) with Dell Technologies Inc. (“Dell Technologies”) that provides for a continuation of strong independent governance for VMware and its stockholders. The Governance Agreement was entered into in connection with the announcement of a conditional, special cash dividend (the “Special Dividend”) on each share of VMware’s common stock and the entry by Dell Technologies into a definitive merger agreement dated as of July 1, 2018 (the “Dell Merger Agreement”) pursuant to which Teton Merger Sub Inc. (“Merger Sub”), a wholly owned subsidiary of Dell Technologies, will merge with and into Dell Technologies, with Dell Technologies surviving the merger (the “Dell Merger”). Among other provisions, the Governance Agreement included a provision requiring Dell Technologies to use its reasonable best efforts to complete the Dell Merger in accordance with the terms of the Dell Merger Agreement.
On November 14, 2018, pursuant to a waiver (the “Waiver”) entered into between VMware and Dell Technologies on the same date, VMware waived certain provisions of the Governance Agreement that restricted the ability of Dell Technologies to enter into a proposed amendment of the Dell Merger Agreement (the “Merger Agreement Amendment”). The Waiver also included Dell Technologies’ waiver of the provisions of the Governance Agreement that would otherwise restrict the ability of the VMware Board of Directors to approve of the resolutions reaffirming VMware’s declaration of the Special Dividend and modifying the method for determining the record date for determining stockholders of VMware entitled to receive the Special Dividend and the payment date for the Special Dividend.
The foregoing description of the Waiver is not complete and is qualified in its entirety by reference to the Waiver, which is filed as Exhibit 10.1 and is incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On November 14, 2018, Dell Technologies, the controlling stockholder of VMware, provided the consent of its wholly owned subsidiary EMC Corporation, the sole Class B common stockholder of VMware, to the reaffirmation of the declaration of the Special Dividend and the modification of the method used to determine the record date for determining stockholders of VMware entitled to receive the Special Dividend and the payment date for the Special Dividend, in accordance with VMware’s Amended and Restated Certificate of Incorporation, in an action by written consent pursuant to Section 228 of the Delaware General Corporation Law.
Item 8.01 Other Events.
Reaffirmation of Declaration of Special Dividend and Modification of Record Date and Payment Date
In light of the Merger Agreement Amendment and based on the recommendation of a special committee of the Board of Directors of VMware consisting solely of independent and disinterested directors (the “Special Committee”), the Board of Directors of VMware reaffirmed, and determined not to revoke, VMWare’s declaration of the Special Dividend, and modified the method for determining the record date for determining stockholders of VMware entitled to receive the Special Dividend and the payment date for the Special Dividend as follows:
Record Date. Subject to the Dividend Conditions (as defined below), the Special Dividend will be payable to stockholders of record as of (i) the business day following the Election Deadline (as defined below) (or if such business day is December 24th or December 31st, the next succeeding business day), provided such day is at least eight calendar days following the later of (x) the date on which Dell Technologies issues a public announcement that it has received votes from its stockholders sufficient to approve the Dell Merger and (y) the date the shares of Dell Technologies Class C Common Stock to be issued in the Dell Merger have been approved for listing on the New York Stock Exchange, with such listing subject to official notice of issuance and compliance by Dell Technologies with all applicable listing standards of the New York Stock Exchange on the date such shares begin trading on the New York Stock Exchange or (ii) any other date which a committee of the Board of Directors of VMware (the “Dividend Committee”) may establish for the Special Dividend (so long as the Dividend Committee takes such action before the date that would be established pursuant to (i) above) with the approval of Dell Technologies (such date, the “Record Date”). “Election Deadline” means 5:30 p.m., New York City time, on the 8th trading day following the date on which Dell Technologies issues a public announcement that it has received votes from its stockholders sufficient to approve the Dell Merger.
Payment Date. Subject to the satisfaction of the Dividend Conditions, the payment date for the Special Dividend shall be (a) the business day immediately following the Record Date; subject to Dell Technologies providing a certification to VMware that if Dell Technologies’ pro rata share of the special dividend is received by Dell Technologies’ subsidiaries who are holders of record of VMware common stock by 3:30 p.m. Eastern time on such date, the closing of the Dell Merger will occur on such date (provided that if payment cannot occur prior to 3:30 p.m. Eastern time, the special dividend will be paid on the next business day), or (b) any other date which the Dividend Committee may establish as the payment date for the Special Dividend (so long as the Dividend Committee takes such action before the date that would be established pursuant to (a) above) with the approval of Dell Technologies (such date, the “Payment Date”).
