VINE ENERGY INC. Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On
Pursuant to the Merger Agreement, on and subject to the terms and conditions set
forth therein, (i)
On and subject to the terms and conditions set forth in the Merger Agreement,
(A) immediately prior to the effective time of the First Merger (the "Effective
Time") each Holdings membership interest designated as a Class B unit, and each
corresponding share of the Company's Class B common stock, par value
In connection with the Merger Agreement, at the Effective Time, each restricted stock unit granted pursuant to the Company's equity plan (each, a "Company Restricted Stock Unit Award") that is not accelerated by its terms by reason of the Merger shall be cancelled and converted into a number of restricted stock units with respect to Parent Common Stock (each, a "Parent Restricted Stock Unit Award") equal to the product of the number of shares of Company Common Stock subject to the Company Restricted Stock Unit Award immediately prior to the Effective Time multiplied by a conversion factor that is equal to the sum of (i) the Exchange Ratio and (ii) the Cash Consideration divided by the closing price of a share of Company Common Stock on the last day of trading before the closing of the Merger, rounded to the nearest whole share.
Immediately following the Effective Time, each converted Parent Restricted Stock Unit Award otherwise shall continue to be governed by the same terms and conditions (including vesting and forfeiture) as were applicable to the corresponding Company Restricted Stock Unit Award immediately prior to the Effective Time, except that any performance-based vesting condition that applied to a Company Restricted Stock Unit Award immediately prior to the Effective Time will be treated as having been attained at the target level, so that such converted Parent Restricted Stock Unit Award will remain solely subject to the time-based vesting requirements in effect for the corresponding Company Restricted Stock Unit Award immediately prior to the Effective Time.
The Company and Parent each have made customary representations, warranties and covenants in the Merger Agreement, in each case generally subject to customary materiality qualifiers. Among other things, each party has agreed to, respectively, conduct its business in the ordinary course and preserve its present businesses, goodwill and assets and its respective relationships with employees, customers and similar persons. From the date of the Merger Agreement until the Effective Time, (i) the Company is subject to customary interim operating covenants requiring the Company to refrain from certain acquisition and divestiture activities, dividend payments, capital expenditures,
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borrowing, amending organizational documents, employee-related matters and governance matters and (ii) the Parent is subject to interim operating covenants requiring the Parent to refrain from certain actions, including certain dividend payments, amending organizational documents or entering to or adopting a plan of complete or partial liquidation.
The closing of the Merger is conditioned on (i) the adoption of the Merger
Agreement by the holders of at least a majority of the outstanding shares of
Company Common Stock entitled to vote thereon (the "Company Common Shareholder
Approval"), (ii) certain customary conditions such as the expiration of
applicable waiting periods under the Hart-Scott-Rodino Act and any commitment to
any governmental entity not to close the transactions contemplated by the Merger
Agreement, including the Merger (the "Transactions"), before a certain date,
(iii) the absence of any law or order prohibiting the consummation of the
Merger, (iv) the effectiveness of the registration statement on Form S-4
pursuant to which the shares of Parent Common Stock issuable in the Merger are
registered with the
The Merger Agreement provides that, during the period from the date of the Merger Agreement until the Effective Time, the Company will be subject to certain restrictions on its ability to solicit alternative acquisition proposals from third parties, to provide non-public information to third parties and to engage in discussions with third parties regarding alternative acquisition proposals, subject to customary exceptions. The Company is required to call a meeting of its stockholders to approve the Merger Agreement and, subject to certain exceptions, to recommend that its stockholders approve the Merger Agreement.
The Merger Agreement contains certain termination rights for both the Company and Parent, including, among others:
(a) by mutual written consent of the Company and Parent;
(b) by Parent, prior to, but not after, the Company Common Shareholder
Approval is obtained, if the Company's board of directors changes
its recommendation ("Company Change of Recommendation") with
respect to the Transactions;
(c) by the Company or Parent, if the Company Common Shareholder
Approval shall not have been obtained;
(d) by the Company or Parent, if the other party breaches or fails to
perform any of its representations, warranties or covenants in the
Merger Agreement that cannot be or is not cured in accordance with
the terms of the Merger Agreement and such breach or failure to
perform would cause applicable closing conditions not to be
satisfied;
(e) by the Company in order to enter into a definitive agreement with
respect to a Company Competing Proposal (as defined in the Merger
Agreement); and
(f) by the Company or Parent, if the Merger shall not have been
consummated on or before 5:00 p.m. CST on February 10, 2022 (the
"Outside Date"). The Outside Date may, under certain
circumstances, be extended to June 24, 2022 if the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, has not yet expired.
If the Merger Agreement is terminated by (i) Parent pursuant to clause (b), (ii)
the Company pursuant to clause (e) or (ii) the Company or Parent pursuant to
clauses (c) or (f) at any time when Parent would have been entitled to terminate
the Merger Agreement pursuant to clause (b) then the Company shall be required
to pay Parent a termination fee of
If (i) (A) the Merger Agreement is terminated by the Company or Parent pursuant to clause (c) or (f) at any time when Parent would have been entitled to terminate the Merger Agreement pursuant to clause (c) and on or before
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the date of any such termination a Company Competing Proposal shall have been publicly announced or publicly disclosed and not been publicly withdrawn at least five (5) business days prior to the Company Stockholders Meeting (as defined in the Merger Agreement) or (B) the Company terminates the Merger Agreement pursuant to clause (f) at a time when Parent would be permitted to terminate the Merger Agreement pursuant to clause (d) or Parent terminates this Agreement pursuant to clause (d) and on or before the date of any such . . .
Item 7.01. Regulation FD Disclosure.
On
On
The information furnished in this Item 7.01 and the accompanying Exhibits 99.1 and 99.2 will not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor will it be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this Item 7.01 and the accompanying Exhibits 99.1 and 99.2 not intended to, and does not, constitute a determination or admission by the Company that the information in this Item 7.01 and the accompanying Exhibits 99.1 and 99.2 are material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
2.1* Agreement and Plan of Merger by and among Chesapeake Energy
Corporation, Hannibal Merger Sub, Inc. , Hannibal Merger Sub, LLC , Vine
Energy, Inc. and Vine Energy Holdings, LLC ., dated as of August 10,
2021 .
10.1 Merger Support Agreement, dated August 10, 2021 by and among
Chesapeake Energy Corporation, Hannibal Merger Sub, Inc. , Hannibal
Merger Sub, LLC , Vine Energy, Inc. and the stockholders of Vine
Energy, Inc. listed thereto.
10.2 Tax Receivable Agreement Amendment, dated August 10, 2021 by and
among Vine Energy Inc. , Vine Investment LLC , Vine Investment II LLC ,
Brix Investment LLC , Brix Investment II LLC , Harvest Investment LLC
and Harvest Investment II LLC .
99.1 Joint Press Release, dated August 11, 2021 .
99.2 Press Release, dated August 11, 2021 .
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL
* Schedules and similar attachments to this agreement have been omitted pursuant
to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedules and
attachments will be furnished supplementally to the Securities and Exchange
Commission upon request; provided, however, that the parties may request
confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any
document so furnished.
Additional Information and Where to Find It
This Current Report on Form 8-K is for information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any proxy, vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
In connection with the proposed transaction, the Company and Parent intend to
file materials with the
Investors will be able to obtain free copies of the Registration Statement and
joint proxy statement/prospectus, as each may be amended from time to time, and
other relevant documents filed by the Company and Parent with the
Participants in Proxy Solicitation
The Company, Parent and their respective directors and certain of their
executive officers and other members of management and employees may be deemed,
under
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executive officers and directors of Parent is included in its definitive proxy
statement for its 2020 special meeting filed with the
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this Current Report on Form 8-K concerning the proposed merger between the Company and Parent, including any statements regarding the expected timetable for completing the proposed transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance, the tax treatment of the proposed transaction, the timing and amount of future production of natural gas, the hedging strategy and results, future drilling plans and cost estimates, competition and government regulation, the impact of the COVID-19 pandemic, changes to cash flow generation, anticipated liquidity, anticipated cash general and administrative savings and any other statements regarding the Company's or Parent's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, failure to obtain the required votes of the Company's shareholders to approve the transaction and related matters; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of the Company and Parent; the effects of the merger of the Company and Parent, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies and other benefits in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity price changes; and the risks of oil and gas activities. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those
described above can be found in the Company's registration statement Form S-1,
as amended, which was originally filed with the
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither the Company nor Parent assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
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