8-KSecurities & Listing

Dell Technologies Inc. 8-K Report, Unregistered Securities Sale (Sep 13, 2016)

Filed September 13, 2016For Securities:DELL

Summary

This Form 8-K filing by Dell Technologies Inc. (DELL) details the unregistered sale of equity securities following the completion of the EMC Corporation merger on September 7, 2016. The primary focus is on the issuance of Class C common stock and related options to certain EMC executives as part of retention and incentive arrangements tied to the merger. These issuances include 'rollover options' granted in exchange for unvested EMC restricted stock units (RSUs) and shares purchased directly for cash by EMC executives. These transactions were conducted under the private offering exemption (Section 4(a)(2) of the Securities Act), indicating they were not publicly registered. Investors should note the terms of these equity awards, including exercise prices, vesting schedules, and potential dilution, as they relate to the overall capital structure and executive compensation following this significant acquisition.

Key Highlights

  • 1Completion of the merger between Dell Technologies Inc. and EMC Corporation, making EMC a wholly-owned subsidiary.
  • 2Issuance of new Class C common stock and rollover options to EMC executives in connection with the merger.
  • 3Executives could exchange unvested EMC RSUs for deferred cash awards and options to purchase Dell Class C common stock.
  • 4Rollover options have a three-year term and an exercise price of $27.50 per share.
  • 5EMC executives also had the opportunity to purchase Class C common stock directly for cash at $27.50 per share.
  • 6Total expected issuance of up to 1,779,100 shares via rollover options and up to 262,000 shares via cash purchase.
  • 7All issuances were conducted under the private offering exemption (Section 4(a)(2) of the Securities Act).

Frequently Asked Questions

This 8-K filing announces the unregistered sale of equity securities by Dell Technologies Inc. following its merger with EMC Corporation. It details the issuance of Class C common stock and stock options to former EMC executives as part of retention and incentive programs related to the merger.

The 'rollover opportunity' allowed certain EMC executives to exchange their unvested EMC Restricted Stock Units (RSUs) for a combination of a deferred cash award and an option to purchase Dell's Class C common stock. The 'cash investment opportunity' allowed these executives to purchase Dell's Class C common stock directly for cash.

The issuance of Class C common stock and options was made in reliance on the private offering exemption from registration under the Securities Act of 1933, specifically Section 4(a)(2) and Regulation D. This means the securities were not offered to the general public.

The rollover options to purchase Class C common stock have an exercise price of $27.50 per share, which was the fair market value of a share of Class C Common Stock on the date of grant. The cash investment opportunity also involved shares purchased at $27.50 per share.