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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: September 13, 2010
(Date of earliest event reported)
ArcSight, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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001-33923
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52-2241535 |
(Commission File Number)
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(IRS Employer Identification No.) |
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5 Results Way |
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Cupertino, California
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95014 |
(Address of Principal Executive Offices)
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(Zip Code) |
(408) 864-2600
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On September 13, 2010, ArcSight, Inc. (ArcSight) entered into an Agreement and Plan of
Merger (the Merger Agreement) with Hewlett-Packard Company (HP) and Priam Acquisition
Corporation, a wholly owned subsidiary of HP (Purchaser). Pursuant to the Merger Agreement, and
upon the terms and subject to the conditions thereof, Purchaser will commence a cash tender offer
(the Tender Offer) for all outstanding shares of ArcSights common stock (the Shares) at a
purchase price of $43.50 per share, in cash to the seller without interest and less any required
withholding taxes (the Offer Price). As soon as practicable following completion of the Tender
Offer, including any subsequent offering period or the exercise of the top-up option described
below, Purchaser will merge with and into ArcSight, and ArcSight will become a wholly owned
subsidiary of HP (the Merger) as described in more detail below. In the Merger, the remaining
stockholders of ArcSight, other than such stockholders who have validly exercised their appraisal
rights under the Delaware General Corporation Law, would be entitled to receive the Offer Price.
At the effective time of the Merger (the Effective Time), (1) each Company stock option that
(a) is outstanding and vested as of immediately prior to the Effective Time (after giving effect to
any acceleration in connection with the Effective Time) and (b) has an exercise price per share
that is less than the Offer Price shall be cancelled and in exchange each former holder of any such
cancelled Company stock option shall be paid an amount in cash equal to the product of (i) the
excess of the Offer Price over the exercise price per share under such Company stock option and
(ii) the number of shares subject to such Company stock option and (2) each Company stock option
that (a) is outstanding and unvested as of immediately prior to the Effective Time and (b) has an
exercise price per share that is less than the Offer Price, shall be assumed by HP and converted
automatically at the Effective Time into an option to purchase shares of HP common stock
(proportionally adjusted).
As a condition to consummating the Tender Offer, ArcSight stockholders must have validly
tendered (and not withdrawn) outstanding Shares constituting at least a majority of the Shares
(taking into account all Shares that ArcSight would be required to issue pursuant to the conversion
or exercise of options, rights and securities that are then convertible into or exercisable for
Shares). In addition, the obligation of Purchaser to consummate the Tender Offer is subject to
several additional customary conditions described in the Merger Agreement, including, among others,
the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the receipt of antitrust or merger control approvals under applicable laws of
Germany and Austria. The consummation of the Tender Offer is not subject to a financing condition.
If more than a majority of the outstanding Shares, but fewer than 90% of the outstanding
Shares, are validly tendered (and not withdrawn) in the Tender Offer, Purchaser shall be obligated
to purchase the tendered Shares but may elect to conduct a subsequent offering period in order to
achieve ownership of 90% of the outstanding Shares, in order to effect a short-form
merger under
the Delaware General Corporation Law. In addition, subject to certain conditions
and limitations, ArcSight has granted HP a top-up option to purchase that number of
authorized but unissued Shares as would enable Purchaser upon exercise of such top-up option to
achieve ownership of 90% of the then outstanding Shares, provided, that, in no event shall the
top-up option be exercisable for a number of such authorized but unissued shares in excess of the
total authorized but unissued Shares.
Under the terms of the Merger Agreement, ArcSight has agreed not to solicit or knowingly
facilitate any alternative Acquisition Proposals (as defined in the Merger Agreement), subject to
customary exceptions that permit ArcSight to respond to an Acquisition Proposal that ArcSights
Board of Directors concludes in good faith constitutes or is reasonably likely to lead to a
Superior Proposal (as defined in the Merger Agreement), provided, that, ArcSights Board of
Directors has determined in good faith that the failure to do so would reasonably be expected to
result in a breach of its fiduciary duties. ArcSight is also permitted to terminate the Merger
Agreement in order to accept a Superior Proposal, subject to giving HP three business days notice
of its intention to do so, but only if HP fails to make a binding counter-offer that ArcSights
Board of Directors determines in good faith, is at least as favorable to ArcSight stockholders as
such Superior Proposal and ArcSight pays HP a termination fee of $61 million. In addition, this
termination fee is payable by ArcSight to HP under other specified circumstances.
The closing of the Merger is also subject to customary closing conditions. If Purchaser
achieves ownership of 90% of the outstanding Shares through the Tender Offer or the exercise of the
top-up option described above, it may effect the Merger as a short-form merger without a vote or
any further action by ArcSight stockholders. Otherwise, HP and Purchaser will need to obtain the
approval of ArcSight stockholders holding a majority of the Shares to adopt the Merger Agreement
prior to consummating the Merger. In this event, ArcSight will call and convene a stockholder
meeting to obtain this approval, and Purchaser will vote all Shares it acquires pursuant to the
Tender Offer, subsequent offering period, if any, and the exercise of the top-up option, if any, in
favor of the adoption of the Merger Agreement, thereby assuring approval.
Tender and Stockholder Support Agreement
In order to induce HP and Purchaser to enter into the Merger Agreement, certain stockholders
of ArcSight (in their capacities as stockholders of ArcSight) entered into Tender and Support
Agreements (the Tender Agreements) with HP and Purchaser concurrently with the execution and
delivery of the Merger Agreement. Subject to the terms and conditions of the Tender Agreements,
these stockholders agreed to (1) tender the Shares beneficially owned by them in the tender offer
five business days prior to the expiration of the tender offer and not withdraw the Shares, and (2)
vote against any actions or agreements, which would materially impede, delay or interfere with, or
prevent or nullify, the Merger. Pursuant to their terms, the Tender Agreements will terminate upon
the earlier of (a) the termination of the Merger Agreement in accordance with its terms, (b) the
written agreement of the parties to the Tender Agreements to terminate the Tender Agreements, (c)
the consummation of the Merger and (d)
the date and time as any amendment or change to the Merger
Agreement or the Tender Offer that decreases the Offer Price is effected.
The foregoing descriptions of the Merger Agreement and the Tender Agreements are only summaries, do
not purport to be complete and are qualified in their entirety by reference to the Merger Agreement
and form of Tender Agreement, copies of which are filed as Exhibit 2.1 and Exhibit 4.1,
respectively, hereto and are incorporated herein by reference. The representations, warranties and
covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement and
as of specified dates, were solely for the benefit of the parties to the Merger Agreement, and may
be subject to limitations agreed upon by the contracting parties, including being qualified by
confidential disclosures exchanged between the parties in connection with the execution of the
Merger Agreement. The representations and warranties may have been made for the purposes of
allocating contractual risk between the parties to the Merger Agreement instead of establishing
these matters as facts, and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors. Investors should not rely on
the representations, warranties and covenants or any descriptions thereof as characterizations of
the actual state of facts or condition of HP, Purchaser, ArcSight or any of their respective
subsidiaries or affiliates. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Merger Agreement, which subsequent
information may or may not be fully reflected in ArcSights public disclosures.
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Item 5.02. |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers. |
On September 12, 2010, ArcSights Compensation Committee approved, and ArcSights Board of
Directors ratified, a change of control arrangement for Hugh Njemanze, ArcSights Founder, Chief
Technology Officer and Executive Vice President of Research and Development. The arrangement
provides that if Mr. Njemanze is terminated without cause or terminates his employment for good
reason within 18 months after a change of control transaction, the vesting of Mr. Njemanzes
ArcSight stock options (the Options) will be accelerated such that he will receive credit for an
additional 24 months of vesting of the Options (beyond the amount vested as of such termination in
accordance with their original vesting schedules); provided, that, this arrangement is only
applicable to the transactions contemplated by the Merger Agreement.
Item 8.01. Other Events.
On September 13, 2010, HP and ArcSight issued a joint press release relating to the Merger
Agreement. A copy of the press release is attached hereto as Exhibit 99.1.
Forward-Looking Statements
This report contains projections and other forward-looking statements regarding the expected
performance of HP following completion of the acquisition, including statements related to HPs
product and service offerings and the future of the enterprise threat and risk management market.
Statements regarding future events are based on the parties current expectations and are
necessarily subject to associated risks related to, among other things, obtaining a sufficient
number of tendered shares of common stock and regulatory approval of the merger, the potential
impact on the business of ArcSight due to the uncertainty about the acquisition, the retention of
employees of ArcSight and the ability of HP to successfully integrate ArcSight and to achieve
expected benefits. Actual results may differ materially from those in the projections or other
forward-looking statements. For information regarding other related risks, please see the Risk
Factors section of ArcSights filings with the United States Securities and Exchange Commission,
including its most recent filings on Form 10-K and Form 10-Q.
Securities Law Disclosures
This report is for informational purposes only and is not an offer to buy or the solicitation of an
offer to sell any securities. The solicitation and the offer to buy shares of ArcSight common
stock will be made only pursuant to an offer to purchase and related materials that HP intends to
file with the United States Securities and Exchange Commission. ArcSight stockholders and other
investors should read these materials carefully because they contain important information,
including the terms and conditions of the offer. Once filed, copies of the tender offer statement
on Schedule TO, the offer to purchase and related documents will be made available to ArcSight
stockholders at no expense to them. In addition, those materials will be available without charge
from ArcSight Investor Relations at (415) 293-4427 or by email at robert.dougherty@fd.com, or the
United States Securities and Exchange Commission through the Commissions website at www.sec.gov.
ArcSight stockholders and other investors are urged to read carefully those materials prior to
making any decisions with respect to the offer.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Description |
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2.1
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Agreement and Plan of Merger, dated as of September 13, 2010, among
HP, Purchaser and ArcSight. |
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4.1
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Form of Tender and Support Agreement, among HP, Purchaser and
certain stockholders of ArcSight. |
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99.1
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Joint Press Release by HP and ArcSight, dated September 13, 2010. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ArcSight, Inc.
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By: |
/s/ Stewart Grierson
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Stewart Grierson |
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Chief Financial Officer |
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Date: September 13, 2010
EXHIBIT INDEX
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Number |
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Description |
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2.1
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Agreement and Plan of Merger, dated as of September 13, 2010, among
HP, Purchaser and ArcSight. |
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4.1
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Form of Tender and Support Agreement, among HP, Purchaser and
certain stockholders of ArcSight. |
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99.1
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Joint Press Release by HP and ArcSight, dated September 13, 2010. |