Completion of the Cray Merger
On September 25, 2019, pursuant to and subject
to the terms of the Agreement and Plan of Merger, dated as of May 16, 2019 (the “Merger Agreement”), by and
among Hewlett Packard Enterprise Company (“HPE”), Canopy Merger Sub, Inc., a Washington corporation and
a wholly owned subsidiary of HPE (“Merger Sub”), and Cray Inc., a Washington corporation (“Cray”),
Merger Sub merged with and into Cray (the “Merger”) with Cray continuing as the surviving corporation (the “Surviving
Corporation”). Upon completion of the Merger, Cray became a wholly owned subsidiary of HPE.
Pursuant to and subject to the terms of
the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock,
par value $0.01 per share, of Cray (“Cray Common Stock”) issued and outstanding immediately prior to the Effective
Time (excluding shares of Cray Common Stock (i) owned by Cray as treasury stock or by HPE or Merger Sub, which shares were canceled
and have ceased to exist, (ii) held by any wholly owned subsidiary of Cray or HPE (other than Merger Sub), which shares were converted
into such number of shares of common stock of the Surviving Corporation so as to maintain relative ownership percentages and (iii)
that are restricted shares of Cray Common Stock underlying any Cray restricted stock award, which were converted as described below),
was automatically canceled and converted into the right to receive $35.00 per share in cash, without interest thereon, subject
to any required withholding taxes (the “Merger Consideration”).
The aggregate consideration paid by HPE
in the Merger was approximately $1.4 billion, net of cash acquired and without giving effect to HPE’s related transaction
fees and expenses.
Pursuant to and subject to the terms of
the Merger Agreement, each Cray stock option that was vested as of immediately prior to the Effective Time was canceled in
exchange for an amount in cash equal to, for each share of Cray Common Stock underlying such option, the excess of the Merger Consideration
over the exercise price per share, less applicable tax withholding, and each Cray stock option that was unvested as of the Effective
Time was converted into an HPE stock option and otherwise remained subject to the same terms and conditions (in each case, other
than Cray stock options with exercise prices equal to, or greater than, the Merger Consideration, which were canceled for no consideration).
Each Cray restricted stock unit that was vested as of immediately prior to the Effective Time was canceled in exchange for an amount
in cash equal to the Merger Consideration, less applicable tax withholding, and each Cray restricted stock unit that was unvested
as of the Effective Time was converted into an HPE restricted stock unit and otherwise remained subject to the same terms and conditions.
Each Cray performance-based restricted stock unit award was converted into an HPE restricted stock unit award (and for purposes
of such conversion, the number of shares of Cray Common Stock underlying the award equaled 50% of the number of shares covered
by the award immediately prior to the Effective Time) which generally vests based on continued service through the one-year anniversary
of the Effective Time. Each Cray restricted stock award that was then-outstanding and unvested and that was held by a nonemployee
director of Cray vested, was canceled and was converted into the right to receive an amount of cash from the Surviving Corporation
equal to the product of the total number of shares of Cray Common Stock then underlying such Cray restricted stock award multiplied
by the Merger Consideration, less applicable tax withholding.
The foregoing description of the Merger,
the Merger Agreement and the other transactions contemplated thereby is not complete and is qualified in its entirety by reference
to the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by HPE with the SEC on
May 17, 2019 and which is incorporated herein by reference.
Communications
On September 25, 2019, HPE issued a press
release announcing the consummation of the Merger. The press release is attached as Exhibit 99.1 hereto and is incorporated
herein by reference.