UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14C

Information Statement Pursuant to Section 14(c) of the

Securities Exchange Act of 1934

 

 

Check the appropriate box:

 

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Preliminary Information Statement

 

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Confidential, for Use of the Commission Only (as permitted by Rule 14c–5(d)(2))

 

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Definitive Information Statement

VIZIO HOLDING CORP.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check all boxes that apply):

 

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No fee required.

 

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Fee paid previously with preliminary materials.

 

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Fee computed on table in exhibit required by Item 25(b) of Schedule 14A (17 CFR 240.14a–101) per Item 1 of this Schedule and Exchange Act Rules 14c–5(g) and 0–11.

 

 

 

 

VIZIO Holding Corp.

39 Tesla

Irvine, California 92618

(949) 428-2525

 

NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT AND APPRAISAL RIGHTS AND INFORMATION STATEMENT   WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY

Dear Stockholders:

This notice of stockholder action by written consent and appraisal rights and information statement is being furnished to the holders of Class A common stock, par value $0.0001 per share (which we refer to as our “Class A common stock”), of VIZIO Holding Corp., a Delaware corporation (which we refer to as “VIZIO,” “we,” “us,” “our”), in connection with the Agreement and Plan of Merger, dated as of February 19, 2024 (which we refer to as the “merger agreement”), by and among VIZIO, Walmart Inc. (which we refer to as “Walmart”), and Vista Acquisition Corp., Inc., a Delaware corporation and a wholly owned subsidiary of Walmart (which we refer to as “Merger Sub”), a copy of which is attached as Annex A to this information statement. Pursuant to the merger agreement, Merger Sub will merge with and into VIZIO with VIZIO surviving such merger as a wholly owned subsidiary of Walmart (which we refer to as the “merger” and the time at which the merger occurs the “effective time of the merger”).

Upon consummation of the merger, each share of our Class A common stock and Class B common stock, par value $0.0001 per share (which we refer to as our “Class B common stock,” and together with Class A common stock, “common stock”), issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive $11.50 in cash (which we refer to as the “price per share”), without interest, subject to applicable withholding taxes. However, the price per share will not be paid, nor will any distribution be made, in respect of any shares of our common stock owned immediately prior to the effective time of the merger by (1) us (including our treasury shares), Merger Sub, Walmart or any direct or indirect wholly owned subsidiary of Walmart, which at the effective time of the merger will automatically be cancelled without any conversion thereof, (2) any of our wholly owned subsidiaries, which shares will be unaffected by the merger and will remain outstanding as an equal number of shares of common stock of the entity surviving the merger (which we refer to as the “surviving corporation”), and (3) stockholders or beneficial owners of shares of our common stock who have neither voted in favor of the merger nor consented thereto in writing and who have properly and timely demanded appraisal for such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (which we refer to as the “DGCL”), which at the effective time of the merger holders thereof will be entitled only to such rights as are granted by the DGCL.

Our board of directors (which we refer to as the “VIZIO Board”) unanimously: (1) determined that the merger and the merger agreement are advisable and fair to, and in the best interests of, us and our stockholders, (2) adopted and approved the merger agreement, and authorized and approved the execution, delivery and performance of the merger agreement by us and the merger and the transactions contemplated thereby and (3) recommended that our stockholders adopt the merger agreement.

 

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The adoption of the merger agreement by our stockholders required the affirmative vote or written consent of the holders of (1) a majority of the voting power of the outstanding shares of common stock entitled to vote on the merger and (2) two-thirds of the outstanding shares of our Class B common stock (which we refer to as the “requisite stockholder approval”).

On February 19, 2024, effective following the execution and delivery of the merger agreement, certain stockholders (including William Wang, our Chief Executive Officer, and Mr. Wang’s related trusts) (which we refer to collectively as the “consenting stockholders”), representing approximately 89 percent of the voting power of the outstanding shares of our common stock and 100 percent of the outstanding shares of our Class B common stock as of such date (which was the record date for determining stockholders entitled to consent to the adoption of the merger agreement), delivered a written consent (which we refer to as the “written consent”) constituting the requisite stockholder approval, adopting the merger agreement in all respects and approving the transactions contemplated thereby, including the merger, in accordance with the DGCL and our amended and restated certificate of incorporation (which we refer to as the “charter”). As a result, no further action by any stockholder of VIZIO is required under applicable law, the charter or the merger agreement to adopt the merger agreement, and we will not be (1) soliciting your vote for the adoption of the merger agreement, or (2) calling a special meeting of our stockholders for purposes of voting on the adoption of the merger agreement. This notice and the accompanying information statement shall constitute notice to you from us of the action taken pursuant to the written consent contemplated by Section 228(e) of the DGCL.

Under Section 262 of the DGCL, if the merger is completed, subject to compliance with the requirements of Section 262 of the DGCL, holders of record and certain beneficial owners of shares of our common stock, other than the consenting stockholders, will have the right to seek an appraisal for, and be paid the “fair value” in cash of, their shares of common stock (as determined by the Delaware Court of Chancery) instead of receiving the price per share. To exercise your appraisal rights, you must submit a written demand for an appraisal no later than twenty (20) days after the mailing of this notice and the accompanying information statement, which mailing date is March 18, 2024, and comply precisely with other procedures set forth in Section 262 of the DGCL, which are summarized in the accompanying information statement. This notice and the accompanying information statement shall constitute notice to you from us of the availability of appraisal rights under Section 262 of the DGCL in connection with the merger.

The accompanying information statement is for informational purposes only. However, we urge you to read the information statement in its entirety for a more complete description of the transactions referenced above and the actions taken by the VIZIO Board and the consenting stockholders.

We thank you for your continued support and interest in VIZIO.

 

The accompanying information statement is dated March 18, 2024 and is first being mailed to stockholders on or about March 18, 2024.

 

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TABLE OF CONTENTS

 

TRANSACTION SUMMARY			1
Introduction			1
Parties Involved in the Merger			1
Effect of the Merger			2
Price Per Share			2
Recommendation of the VIZIO Board and Reasons for the Merger			3
Requisite Stockholder Approval for the Merger			3
Opinion of J.P. Morgan Securities LLC			3
Treatment of Equity Awards in the Merger			4
Treatment of 2021 Employee Stock Purchase Plan			5
Interests of VIZIO’s Directors and Executive Officers in the Merger			5
Appraisal Rights			6
Material U.S. Federal Income Tax Consequences of the Merger			7
Regulatory Clearance Required for the Merger			8
Holdback Agreements			8
Support Agreements			8
No Solicitation of Other Acquisition Offers			9
Conditions to the Closing of the Merger			10
Termination of the Merger Agreement			11
Transaction Expenses, Termination Fees and Remedies			13
Specific Performance			13
Delisting and Deregistration of Our Class A Common Stock			14
Effect on VIZIO if the Merger is Not Completed			14
QUESTIONS AND ANSWERS			15
FORWARD-LOOKING STATEMENTS			21
THE PARTIES TO THE MERGER AGREEMENT			23
THE MERGER			24
Background of the Merger			24
Recommendation of the VIZIO Board and Reasons for the Merger			39
Requisite Stockholder Approval			43
Opinion of J.P. Morgan Securities LLC			43
Financial Projections			48
Holdback Agreements			51
Interests of VIZIO’s Directors and Executive Officers in the Merger			52
Appraisal Rights			64
Accounting Treatment			70
Material U.S. Federal Income Tax Consequences of the Merger			70
Regulatory Clearance Required for the Merger			73
Delisting and Deregistration of Our Class A Common Stock			74
THE MERGER AGREEMENT			75
Closing and Effective Time of the Merger			75
Effects of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers			76
Conversion of Shares			76
Treatment of VIZIO Equity Awards			77
Treatment of the ESPP			77
Payment and Issuance of Merger Consideration; Surrender of Shares			78
Representations and Warranties			79

Conduct of Business Pending the Closing			81
No-Shop; Acquisition Proposals			84
The VIZIO Board Recommendation			86
Fiduciary Termination Right			87
Written Consent			88
Employee Matters			88
Indemnification and Insurance			89
Conditions to the Closing of the Merger			90
Termination of the Merger Agreement			91
Effect of Termination			93
Transaction Expenses and Termination Fee			93
Specific Performance			93
Amendment; Extension; Waiver			94
Assignment			94
Governing Law; Jurisdiction			94
SUPPORT AGREEMENTS			96
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			98
WHERE YOU CAN FIND MORE INFORMATION			100
HOUSEHOLDING OF INFORMATION STATEMENT			101
MISCELLANEOUS			102
ANNEX A – AGREEMENT AND PLAN OF MERGER			A-1
ANNEX B – OPINION OF J.P. MORGAN SECURITIES LLC			B-1
ANNEX C-1 – FORM OF SUPPORT AGREEMENT			C-1-1
ANNEX C-2 – FORM OF SUPPORT AGREEMENT			C-2-1

 

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QUESTIONS AND ANSWERS

The following questions and answers address some commonly asked questions regarding the merger and the merger agreement. These questions and answers may not address all questions that are important to you. We encourage you to carefully read the more detailed information contained elsewhere in this information statement, including the annexes to this information statement and the other documents to which we refer in this information statement. You may obtain the information incorporated by reference in this information statement without charge by following the instructions in the section of this information statement captioned “Where You Can Find More Information.”

 

Q:	Why am I receiving these materials?

 

A:

Applicable requirements of Delaware law and federal securities laws require us to provide you with notice of action taken by the written consent that was delivered by the consenting stockholders, as well as other information regarding the merger, even though your vote or consent is neither required nor requested to adopt or authorize the merger agreement or complete the merger. This information statement also constitutes notice to you of the availability of appraisal rights in connection with the merger under Section 262 of the DGCL, as further described in the section of this information statement captioned “The Merger—Appraisal Rights.”

 

Q:	What is the proposed merger and what effects will it have on VIZIO?

 

A:

The proposed transaction is the acquisition of us by Walmart pursuant to the merger agreement. Once the closing conditions under the merger agreement have been satisfied or waived, and subject to the other terms and conditions in the merger agreement, Merger Sub will merge with and into VIZIO, with VIZIO continuing as the surviving corporation. As a result, (1) VIZIO’s stockholders will receive $11.50 per share of our common stock in cash, without interest and subject to any required withholding taxes, (2) VIZIO will become a wholly owned subsidiary of Walmart, and (3) VIZIO’s Class A common stock will no longer be publicly traded and will be delisted from the NYSE. In addition, our Class A common stock will be deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC.

 

Q:	What will I receive if the merger is completed?

 

A:

Upon completion of the merger and subject to the terms and conditions of the merger agreement, each stockholder will be entitled to receive $11.50 per share in cash, without interest and subject to any required withholding taxes, for each share of our common stock outstanding immediately prior to the effective time of the merger, unless you properly and timely exercise, and do not effectively withdraw or fail to perfect, appraisal rights under Section 262 of the DGCL. For example, if you own 100 shares of our Class A common stock, you will receive $1,150 in cash in exchange for your shares of Class A common stock, without interest and less any applicable withholding taxes. Upon the completion of the merger, you will not own shares of the surviving corporation.

 

Q:	How does the price per share compare to the market price of VIZIO’s Class A common stock?

 

A:

The price per share of $11.50 constitutes a premium of approximately 47 percent to the unaffected closing price of our Class A common stock on February 12, 2024, which was the last full trading day prior to the publication of an article in The Wall Street Journal stating that we were in discussions to be acquired by Walmart.

 

Q:	Why am I not being asked to vote on the merger?

 

A:	Under the merger agreement and applicable Delaware law, the adoption of the merger agreement by our stockholders required the affirmative vote or written consent of the holders of (1) a majority of the voting

 

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power of the outstanding shares of common stock entitled to vote on the merger and (2) two-thirds of the outstanding shares of Class B common stock. Such requisite stockholder approval was obtained on February 19, 2024, when, effective following the execution and delivery of the merger agreement, the consenting stockholders (representing approximately 89 percent of the voting power of outstanding shares of common stock and 100 percent of the outstanding shares of Class B common stock as of the record date for determining stockholders entitled to consent to the adoption of the merger agreement), delivered the written consent. Therefore, your vote is not required and is not being sought. We are not asking you for a proxy, and you are requested not to send us a proxy.

 

Q:	Did the VIZIO Board approve and recommend the merger agreement?

 

A:

Yes. The VIZIO Board unanimously: (1) determined that the merger and the merger agreement are advisable and fair to, and in the best interests of, us and our stockholders, (2) adopted and approved the merger agreement, and authorized and approved the execution, delivery and performance of the merger agreement by us and the merger and the transactions contemplated thereby and (3) recommended that our stockholders adopt the merger agreement (which adoption occurred upon delivery of the written consent by the consenting stockholders).

 

Q:	What happens if I sell my shares before the completion of the merger?

 

A:

If you transfer your shares of our common stock before the effective time of the merger, you will have transferred the right to receive the price per share and will lose your appraisal rights for those shares. For more information, see the section of this information statement captioned “The Merger—Appraisal Rights.” In order to receive the price per share or exercise appraisal rights for those shares, you must hold those shares through the completion of the merger. In the event of a transfer of ownership of any shares of our common stock that has not been registered in the records of our transfer agent prior to the effective time of the merger, the cash consideration may be paid to a person other than the registered owner, provided specified requirements are satisfied. Please refer to the section of this information statement captioned “The Merger Agreement—Conversion of Shares.”

 

Q:	Are there conditions to the completion of the merger?

 

A:

Yes. The completion of the merger is conditioned on the satisfaction or waiver of certain conditions, including (1) the adoption of the merger agreement by our stockholders (which was satisfied on February 19, 2024); (2) the expiration or early termination of the applicable waiting period under the HSR Act, and the absence of any timing agreement; (3) the absence of an order or law preventing the consummation of the merger; (4) the accuracy of representations and warranties of the parties, subject to applicable materiality qualifiers; (5) the performance of each party’s covenants in all material respects; (6) the absence of specified governmental litigation relating to the merger that is pending or overtly asserted; and (7) no material adverse effect (as defined in the section of this information statement captioned “The Merger Agreement—Representations and Warranties”) having occurred with respect to VIZIO that is continuing. Please refer to the section of this information statement captioned “The Merger Agreement—Conditions to the Closing of the Merger.”

 

Q:	What will happen to VIZIO equity awards?

 

A:	Generally, at the effective time of the merger:

 

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each cashed-out VIZIO option will be cancelled in exchange for the right to receive an amount in cash equal to the product of (1) the total number of shares of our Class A common stock covered by such option, multiplied by (2) the excess of (i) the price per share over (ii) the per share exercise price of such option, subject to applicable withholding taxes;

 

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each cancelled VIZIO option will be cancelled for no consideration;

 

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each vested VIZIO RSU will be cancelled in exchange for the right to receive an amount in cash equal to the product of (1) the price per share, multiplied by (2) the total number of shares of our common stock covered by the vested VIZIO RSU, subject to applicable withholding taxes;

 

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each cancelled VIZIO RSU award will be cancelled for no consideration; and

 

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each director option and each director RSU that, in each case, is then outstanding and unvested, will accelerate vesting in full.

On or promptly after the closing date of the merger, Walmart will grant to each continuing employee who held a cancelled VIZIO award a Walmart RSU award with a grant date fair value (determined in accordance with U.S. generally accepted accounting principles) equal to the product of (1) the total number of shares of our Class A common stock covered by the corresponding cancelled VIZIO award, multiplied by (2) the excess of (i) the price per share over (ii) the per share exercise price of that cancelled VIZIO award, if any, on the terms and subject to the conditions set forth in the merger agreement and any agreement between Walmart and such employee.

For more information, see the section of this information statement captioned “The Merger Agreement—Treatment of VIZIO Equity Awards.”

 

Q:	What will happen to the ESPP?

 

A:	Generally, the merger agreement requires us to take action to provide for the following:

 

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no new offering period (or similar period during which shares may be purchased) will commence under the ESPP after the date of the merger agreement;

 

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participants in the ESPP may not increase their payroll deductions under the ESPP from those in effect on the date of the merger agreement;

 

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no new participants may begin participating in the ESPP after the date of the merger agreement;

 

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any offering period (or similar period during which shares may be purchased) in progress under the ESPP as of the date of the merger agreement will be the final offering period under the ESPP and will be terminated on the final exercise date;

 

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any pro-rata adjustments that may be necessary to reflect the shortened offering period (or similar period) will be made, but the shortened offering period (or similar period) will otherwise be treated as a fully effective and completed offering period for all purposes under the ESPP;

 

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each participant’s then-outstanding share purchase right under the ESPP will be exercised as of the final exercise date; and

 

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the ESPP will be terminated as of the effective time of the merger.

For more information, see the section of this information statement captioned “The Merger Agreement—Treatment of the ESPP.”

 

Q:	What happens if the merger is not completed?

 

A:

If the merger is not completed, our stockholders will not receive any payment for their shares of our common stock. Instead: (1) we will remain an independent public company; (2) our Class A common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act; and (3) we will continue to file periodic reports with the SEC.

In specified circumstances in which the merger agreement is terminated, we have agreed to pay Walmart a termination fee. For more information, see the section of this information statement captioned “The Merger Agreement—Transaction Expenses and Termination Fee.”

 

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Q:	What is the difference between holding shares as a stockholder of record and as a beneficial owner?

 

A:

If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC), you are considered, with respect to those shares, to be the “stockholder of record.” If you are a stockholder of record, this information statement has been sent directly to you by or on behalf of us. You will automatically receive the price per share as promptly as reasonably practicable after the effective time of the merger without any further action required on your part, except with respect to excluded shares (as defined in the section of this information statement captioned “The Merger Agreement—Conversion of Shares”). Please refer to the section of this information statement titled “The Merger Agreement—Conversion of Shares.”

If your shares are held through a bank, broker or other nominee, you are considered the “beneficial owner” of shares of common stock held in “street name.” In that case, this information statement has been forwarded to you by your bank, broker or other nominee who is considered, with respect to those shares, to be the stockholder of record. If you are a beneficial owner, payment for your shares will be made through your bank, broker or other nominee.

 

Q:	Will I be subject to U.S. federal income tax upon the exchange of common stock for cash pursuant to the Merger?

 

A:

If you are a U.S. Holder (as defined in the section of this information statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”), the exchange of our common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes, which generally will require you to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received by you in the merger and your adjusted tax basis in the shares of our common stock surrendered in the merger.

If you are a Non-U.S. Holder (as defined in the section of this information statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”), you generally will not be subject to U.S. federal income tax with respect to the exchange of our common stock for cash in the merger unless you have certain connections to the United States, but you may be subject to backup and FATCA withholding tax unless you comply with certain certification procedures or otherwise establish a valid exemption from backup or FATCA (as defined in the section of this information statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) withholding tax.

Because particular circumstances may differ, we recommend that you consult your own tax advisor to determine the U.S. federal income tax consequences relating to the merger in light of your own particular circumstances and any consequences arising under U.S. federal non-income tax laws or the laws of any state, local or foreign taxing jurisdiction. This discussion is provided for general information only and does not constitute legal advice to any holder. A more complete description of material U.S. federal income tax consequences of the merger is provided in the section of this information statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger.”

 

Q:	When do you expect the merger to be completed?

 

A:

We currently expect to complete the merger in the second calendar quarter of 2024. However, the exact timing of completion of the merger, if at all, cannot be predicted because the merger is subject to the closing conditions specified in the merger agreement, many of which are outside of our control.

 

Q:	What governmental and regulatory approvals are required?

 

A:

Under the terms of the merger agreement, the merger cannot be completed until the waiting period applicable to the merger under the HSR Act has expired or been terminated. For more information, see the section of this information statement captioned “The Merger—Regulatory Clearance Required for the Merger.”

 

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Q:	Am I entitled to appraisal rights under the DGCL?

 

A:

Our stockholders and beneficial owners of our Class A common stock are entitled, under certain circumstances, to seek appraisal of their shares in connection with the merger under Delaware law. Pursuant to Section 262(d) of the DGCL, this information statement serves as notice that record or beneficial owners of our Class A common stock may be entitled to appraisal rights under Section 262 of the DGCL in connection with the merger. Under Section 262 of the DGCL, if the merger is consummated, our stockholders (including beneficial owners of shares of our Class A common stock) will be entitled to seek appraisal of their shares of our Class A common stock if they (1) do not deliver a written consent or otherwise vote in favor of the merger; (2) properly and timely demand appraisal of their shares; (3) continuously hold of record or beneficially own their shares through the effective date of the merger; (4) meet certain statutory requirements described in this information statement; and (5) do not withdraw their demands or otherwise lose their rights to appraisal. This means that these persons will be entitled to have their shares of our Class A common stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of our Class A common stock, exclusive of any elements of value arising from the accomplishment or expectation of the merger, together with (unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown) interest, if any, on the amount determined by the Delaware Court of Chancery to be the fair value from the effective date of the merger through the date of payment of the judgment at a rate of five percent over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment, compounded quarterly (except that, if at any time before the entry of judgment in the proceeding, the surviving corporation makes a voluntary cash payment to each person seeking appraisal, interest will accrue thereafter only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Delaware Court of Chancery and (2) interest theretofore accrued, unless paid at that time). The surviving corporation is under no obligation to make such voluntary cash payment prior to such entry of judgment. Due to the complexity of the appraisal process, persons who wish to seek appraisal of their shares are encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights. The DGCL requirements for exercising appraisal rights are described in additional detail in this information statement, which description is qualified in its entirety by Section 262 of the DGCL regarding appraisal rights, available at the following URL, accessible without subscription or cost, which is incorporated herein by reference: https://delcode.delaware.gov/title8/c001/sc09/index.html#262.

 

Q:	Do any of VIZIO’s directors or officers have interests in the merger that may differ from those of VIZIO stockholders generally?

 

A:

Yes. In considering the recommendation of the VIZIO Board with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of our stockholders generally. In: (1) evaluating and negotiating the merger agreement; (2) approving the merger agreement and the merger; and (3) unanimously recommending that the merger agreement be adopted by our stockholders, the VIZIO Board was aware of and considered these interests to the extent that they existed at the time, among other matters. For more information, see the section of this information statement captioned “The Merger—Interests of VIZIO’s Directors and Executive Officers in the Merger.”

 

Q:	Where can I find more information about VIZIO?

 

A:

We file periodic reports and other information with the SEC. You may read and copy this information at the SEC’s public reference facilities. Please call the SEC at 1-800-SEC-0330 for information about these facilities. This information is also available on the Internet site maintained by the SEC at http://www.sec.gov. For further information, please refer to the section of this information statement captioned “Where You Can Find More Information.”

 

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Q:	Who can help answer my questions?

 

A:	If you have any questions regarding the merger after reading this information statement, please contact our Investor Relations department by email at ir@vizio.com. If your broker holds your shares of common stock, you should call your broker for additional information.

 

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FORWARD-LOOKING STATEMENTS

This information statement, the documents to which we refer you in this information statement and information included in oral statements or other written statements made or to be made by us or on our behalf contain “forward-looking statements” that do not directly or exclusively relate to historical facts, including, without limitation, statements relating to the completion of the merger. You can typically identify forward-looking statements by the use of forward-looking words, such as “may,” “will,” “should,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “continue,” “potential,” “plan,” “forecast,” “intend,” “target,” “possible” and other words of similar import, or the negative versions of such words. These forward-looking statements generally include statements regarding the expected timetable for completing the merger, the ability to complete the merger, and financial projections. Our management has based these forward-looking statements largely on current expectations and projections about future events and financial trends that management believes may affect our business, financial condition and results of operations.

Our stockholders are cautioned that any forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the SEC, including in our most recent filings on Forms 10-K and 10-Q, factors and matters described or incorporated by reference in this information statement, and the following factors:

 

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the inability to complete the merger due to the failure to satisfy the other conditions to the completion of the merger, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory clearance;

 

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the occurrence of any event, change or other circumstances that could give rise to the right to terminate the merger, and the risk that the merger agreement may be terminated in circumstances that require us to pay a termination fee;

 

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the nature, cost and outcome of any legal proceedings that may be instituted against us and others related to the merger agreement;

 

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risks that the pendency of the merger affects our current operations or our ability to retain or recruit employees;

 

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economic, market, business, consumer or geopolitical conditions or competition, or changes in such conditions, negatively affecting our business, operations and financial performance;

 

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the fact that receipt of the all-cash price per share will be taxable to our stockholders that are treated as U.S. Holders (as defined in the section of this information statement captioned “The Merger—Material U.S. Federal Income Tax Consequences of the Merger”) for U.S. federal income tax purposes;

 

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the fact that, if the merger is completed, our stockholders will forgo the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company;

 

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the possibility that we could, at a later date, engage in unspecified transactions, including licensing, partnership, collaboration or other strategic transactions;

 

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the fact that under the terms of the merger agreement, we are restrained at certain times from soliciting other acquisition proposals (as defined in the section of this information statement captioned “The Merger Agreement—No-Shop; Acquisition Proposals”) during the pendency of the merger;

 

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the effect of the announcement or pendency of the merger on our business relationships, customers, operating results and business generally, including risks related to the diversion of the attention of our management or employees during the pendency of the merger;

 

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the amount of the costs, fees, expenses and charges related to the merger agreement or the merger;

 

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the risk that the proposed merger will not be consummated in a timely manner, creating potential uncertainty around the transaction and exceeding the expected costs of the merger; and

 

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the risk that our stock price may fluctuate during the pendency of the merger and may decline significantly if the merger is not completed.

Consequently, all of the forward-looking statements that we make in this information statement are qualified by the information contained or incorporated by reference in this information statement, including: (1) the information contained under this caption; and (2) information in our most recent filings on Form 10-K and Form 10-Q, including the information contained under the caption “Risk Factors,” and information in our consolidated financial statements and notes thereto. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

Except as required by applicable law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Our stockholders are advised to consult any future disclosures that we make on related subjects as may be detailed in our other filings made from time to time with the SEC.

 

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THE PARTIES TO THE MERGER AGREEMENT

VIZIO

We, VIZIO Holding Corp., develop high-performance smart TVs, sound bars, and accessories. These products are sold to retailers, distributors and through online channels throughout the United States. Additionally, we offer Platform+, which is comprised of SmartCast, our award-winning Smart TV operating system that enables a fully integrated entertainment solution, and Inscape, which powers its data intelligence and services. SmartCast delivers content and applications through an easy-to-use interface, supports leading streaming apps, and hosts our free ad-supported video app, WatchFree+. We provide broad support for third-party voice platforms and second screen experiences to offer additional interactive features and experiences.

Our Class A common stock is listed on the NYSE under the symbol “VZIO.” Our corporate offices are located at 39 Tesla, Irvine, California 92618.

Walmart

Walmart Inc. is a people-led, technology-powered omni-channel retailer dedicated to help people around the world save money and live better – anytime and anywhere – by providing the opportunity to shop in both retail stores and through eCommerce. Through innovation, Walmart is striving to continuously improve a customer-centric experience that seamlessly integrates eCommerce and retail stores in an omni-channel offering that saves time for its customers.

Walmart’s address is Walmart Inc., 702 S.W. 8^th Street, Bentonville, Arkansas 72716, and its telephone number is (479) 273-4000.

Merger Sub

Vista Acquisition Corp. is a wholly owned subsidiary of Walmart and was formed on February 13, 2024, solely for the purpose of engaging in the transactions contemplated by the merger agreement. Merger Sub has not engaged in any business activities other than as incidental to its formation and in connection with the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will cease to exist, and VIZIO will continue as the surviving corporation.

Merger Sub’s address is c/o Walmart Inc., 702 S.W. 8^th Street, Bentonville, Arkansas 72716, and its telephone number is (479) 273-4000.

 

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THE MERGER

The rights and obligations of the parties to the merger agreement are governed by the specific terms and conditions of the merger agreement and not by any summary or other information provided in this information statement. Therefore, this discussion of the merger is qualified in its entirety by reference to the merger agreement, a copy of which is attached as Annex A to this information statement and incorporated into this information statement by reference. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

Background of the Merger

The following chronology summarizes the key meetings and events that led to the signing of the merger agreement. This chronology does not purport to catalogue every conversation of or among the VIZIO Board, the Transactions Committee (as defined below), our representatives, and other parties.

The VIZIO Board regularly evaluates our strategic direction and ongoing business plans with a view toward strengthening our business and enhancing stockholder value. As part of this evaluation, the VIZIO Board has, from time to time, considered a variety of strategic alternatives. These have included, among others: (1) the continuation of, and potential improvements to, our current business plan, with VIZIO remaining an independent company; (2) the investment in, and development of, new products and services; (3) potential expansion opportunities through investments, acquisitions, partnerships or other commercial and strategic relationships; and (4) business combinations and other financial and strategic alternatives, including the sale of VIZIO. In addition, VIZIO management holds introductory and informational meetings with actual and potential investors, as well as other counterparties that may have an interest in engaging in potential commercial or strategic transactions with VIZIO, for the purpose of discussing, in general terms and based on publicly available information, our business and industry. VIZIO management regularly updates the VIZIO Board with respect to these meetings.

Around July 2018, a representative of a potential strategic acquiror (which we refer to as “Party A”) contacted members of VIZIO management and expressed an interest in exploring a strategic partnership with VIZIO. In September 2018, we entered into a confidentiality agreement with Party A. Thereafter, VIZIO management met with representatives of Party A to discuss our business and provided due diligence information regarding our business to Party A. After Party A received and reviewed due diligence information provided by us, it became apparent that Party A did not wish to engage further. These discussions did not result in the receipt by VIZIO of an acquisition proposal from Party A.

In March 2021, we completed our initial public offering at a price of $21.00 per share of our Class A common stock. Following our initial public offering, we experienced a variety of challenges to executing our business plan, including increased competition from other consumer electronics manufacturers and television operating system providers. VIZIO management regularly reviewed with the VIZIO Board these and other challenges to achieving our business plan. By June 2023, the trading price of our Class A common stock had declined to approximately $7.00 per share from a high of approximately $26.00 per share in July 2021.

Walmart and its affiliated retailers are VIZIO’s largest customer and have been since 2008. Representatives of Walmart management meet frequently with members of VIZIO management to discuss the parties’ commercial partnership.

On or about January 4, 2023, members of VIZIO management met with senior management representatives of Walmart in Las Vegas, Nevada to discuss potential opportunities to expand our commercial partnership. These conversations continued from time to time until June 2023. At various points, William Wang, our Chief Executive Officer, participated in these conversations.

On March 27, 2023, Mr. Wang met with senior management representatives of Walmart in Bentonville, Arkansas in order to continue these discussions concerning the expansion of our commercial partnership with Walmart and to enable Walmart to better understand our advertising business. Prior to the meeting, we entered into a mutual

 

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confidentiality agreement with Walmart to facilitate the sharing of due diligence information with Walmart. This confidentiality agreement did not include a “standstill” or similar restriction limiting Walmart’s ability to make public or private proposals to acquire VIZIO.

On June 7, 2023, at Walmart’s request, Mr. Wang and Ben Wong, our Chief Operating Officer, met with senior management representatives of Walmart in Orange County, California. During this meeting, the representatives of Walmart expressed a general interest in exploring a potential acquisition of VIZIO. The representatives of Walmart did not make a specific acquisition proposal. The members of VIZIO management acknowledged the interest from Walmart but did not otherwise engage on the topic of an acquisition of VIZIO during the meeting.

Following the June 7, 2023 meeting, members of each of VIZIO management and Walmart management engaged in high-level, preliminary discussions regarding the broad contours of potential strategic transactions involving both Walmart and VIZIO. These potential strategic transactions included, among others, a minority equity investment by Walmart into VIZIO, an acquisition of VIZIO by Walmart, and an expansion of our commercial partnership with Walmart.

On June 20, 2023, Messrs. Wang and Wong met with senior management representatives of Walmart in Bentonville, Arkansas. During this meeting, the representatives of Walmart stated that Walmart had concluded that (1) of all the potential strategic transactions available to Walmart and VIZIO, its preference was to pursue an acquisition of VIZIO; and (2) it wished to continue acquisition discussions at future meetings. The representatives of Walmart did not make a specific acquisition proposal at the meeting. The members of VIZIO management expressed openness to exploring a potential acquisition of VIZIO by Walmart, subject to their fiduciary obligations.

On July 13, 2023, members of VIZIO management met with representatives of J.P. Morgan to discuss perspectives and considerations that VIZIO management could consider in the event Walmart made an acquisition proposal. J.P. Morgan is well known to VIZIO given its service as a joint book running manager in our initial public offering.

On August 3, 2023, the VIZIO Board met, with members of VIZIO management and Wilson Sonsini Goodrich & Rosati, Professional Corporation (which we refer to as “Wilson Sonsini”), our outside legal counsel, in attendance. The members of VIZIO management provided an update on our preliminary financial and operating results for our fiscal second quarter and provided perspectives on our anticipated financial and operating results for our fiscal third quarter. Mr. Wang provided an overview of the preliminary discussions with Walmart (including Walmart’s potential interest in pursuing an acquisition of VIZIO), including that these discussions remained at a preliminary stage and Walmart had not made a specific acquisition proposal.

On August 14, 2023, senior management representatives of Walmart met virtually with Messrs. Wang and Wong. In that meeting, the Walmart representatives stated that Walmart intended to make a proposal to acquire VIZIO. The Walmart representatives expressed a preference for Walmart to enter into an exclusivity agreement with VIZIO.

On August 15, 2023, Walmart submitted a non-binding written proposal to acquire VIZIO for $9.25 in cash per share of our common stock. We refer to this proposal as the “initial Walmart proposal.” The initial Walmart proposal requested that 25 percent of the merger proceeds that each of Messrs. Wang and Wong would otherwise be entitled to receive in such transaction would be deferred and paid over a four-year period in order to encourage Messrs. Wang and Wong to remain part of VIZIO’s management team following the consummation of the acquisition. We refer to this overall deferral structure as a “holdback.” As part of the initial Walmart proposal, Walmart requested that VIZIO agree to negotiate exclusively with Walmart regarding a potential strategic transaction for 45 days and included a form of exclusivity agreement to be countersigned by VIZIO. A copy of the initial Walmart proposal was subsequently provided by Mr. Wang to the VIZIO Board and to J.P. Morgan.

 

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On August 17, 2023, representatives of J.P. Morgan met with members of VIZIO management. The representatives of J.P. Morgan discussed a preliminary financial perspective on and potential responses to the initial Walmart proposal.

On August 18, 2023, the VIZIO Board met, with members of VIZIO management and representatives of each of J.P. Morgan and Wilson Sonsini in attendance. The VIZIO Board discussed the initial Walmart proposal, including the request that VIZIO negotiate exclusively with Walmart. The representatives of Wilson Sonsini reviewed with the members of the VIZIO Board their fiduciary duties relating to a potential sale of VIZIO. The representatives of J.P. Morgan discussed preliminary financial analyses of the initial Walmart proposal. The VIZIO Board determined that the initial Walmart proposal was credible and had the potential to lead to a transaction that would be attractive to, and serve the best interests of, VIZIO and our stockholders. In making its determination, the VIZIO Board considered (1) our commercial relationship with Walmart; and (2) the increasing competition that we were facing from other consumer electronics manufacturers and television operating system providers. To provide assistance to, and oversight of, VIZIO management during the strategic review process, the VIZIO Board established a committee of independent directors (which we refer to as the “Transactions Committee”). The Transactions Committee was formed in light of the benefits, convenience and efficiency of having a subset of directors oversee any process of considering the initial Walmart proposal and any strategic alternatives thereto given (1) the potentially significant workload that could be involved in the evaluation of the initial Walmart proposal and any other strategic alternatives; (2) the possibility that VIZIO management may need feedback and direction on relatively short notice in connection with a potential process of considering the initial Walmart proposal and other strategic alternatives; and (3) the benefits and convenience of having a subset of directors oversee a potential process of considering the initial Walmart proposal and other strategic alternatives. The Transactions Committee was not formed for the purposes of addressing potential or actual conflicts of interest of any director or officer of VIZIO. The VIZIO Board appointed R. Michael Mohan, Julia Gouw and David Russell to serve on the Transactions Committee, with Mr. Mohan serving as chair. The VIZIO Board delegated to the Transactions Committee the full power and authority of the VIZIO Board to, among other things, (1) evaluate, consider and respond to the initial Walmart proposal; (2) explore, evaluate and consider counterparties to potential strategic transactions, and authorize and direct VIZIO management and VIZIO’s advisors to engage in discussions and negotiations regarding potential strategic transactions; (3) explore, evaluate, consider, review, negotiate and, as appropriate, recommend to the VIZIO Board for approval the terms and conditions of potential strategic alternatives; and (4) supervise and direct discussions and negotiations with respect to any strategic alternative. The VIZIO Board retained the power and authority to make any final determination to enter into any such potential strategic transaction. It was also understood by the VIZIO Board that: (1) the VIZIO Board would continue to have an active role in (i) the evaluation of any acquisition proposal from Walmart, (ii) any discussions with Walmart or other potential acquirers with respect to a potential strategic transaction and (iii) any broader review of strategic alternatives; (2) the Transactions Committee would update and seek input from the VIZIO Board as appropriate; and (3) members of the VIZIO Board who were not also members of the Transactions Committee would be invited to attend the meetings of the Transactions Committee. The VIZIO Board did not provide for the payment of any new or additional compensation to the members of the Transactions Committee in connection with this delegation of authority. At the same meeting, outside of the presence of the representatives of J.P. Morgan, the VIZIO Board discussed a variety of potential candidates to act as financial advisor in connection with a potential strategic transaction involving Walmart and any strategic alternatives thereto. The VIZIO Board determined to engage J.P. Morgan to act as financial advisor in connection with a potential strategic transaction involving Walmart and any possible strategic alternatives thereto due to J.P. Morgan’s knowledge of our company from its role as joint book running manager in our initial public offering, as well as its qualifications, knowledge of the industry in which we operate, and experience in advising similar companies in connection with potential strategic transactions. The VIZIO Board directed the Transactions Committee to oversee the negotiation and execution of an appropriate engagement letter with J.P. Morgan. The VIZIO Board also met in executive session at this meeting (without Mr. Wang or other members of VIZIO management in attendance), and it was the practice of the VIZIO Board at future meetings to meet in executive session for a portion of each meeting.

 

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On August 22, 2023, the Transactions Committee met, with members of VIZIO management in attendance. The Transactions Committee affirmed the determination of the VIZIO Board to engage J.P. Morgan as financial advisor in connection with a potential strategic transaction involving Walmart and any strategic alternatives thereto. The Transactions Committee discussed the initial Walmart proposal and other potential strategic alternatives available to VIZIO (including remaining an independent company), and reviewed ways to potentially improve the initial Walmart proposal for the benefit of our stockholders. The Transactions Committee determined that the initial Walmart proposal was not compelling, but that the Transactions Committee was willing to continue to provide due diligence information to allow Walmart to better understand VIZIO’s long-term value, potential cost and revenue synergy opportunities, and the growth prospects that we could provide to Walmart. The Transactions Committee believed that providing this information could help Walmart increase the value of its acquisition proposal for the benefit of our stockholders.

On August 23, 2023, at the instruction of the Transactions Committee, Mr. Wang informed Walmart of the Transactions Committee’s decision that the initial Walmart proposal was not compelling, but that we were willing to provide due diligence information to allow Walmart to better understand VIZIO’s long-term value, potential cost and revenue synergy opportunities, and the growth prospects that we could provide to Walmart.

On August 25, 2023, the Transactions Committee met, with members of VIZIO management in attendance. During the meeting, members of VIZIO management provided an update on the status of discussions with Walmart, and the Transactions Committee authorized VIZIO management to provide due diligence information to allow Walmart to better understand VIZIO’s long-term value, potential cost and revenue synergy opportunities, and the growth prospects that we could provide to Walmart.

Later on August 25, 2023, at Party A’s request, Mr. Wang met with senior management representatives of Party A. At the meeting, the representatives of Party A expressed a general interest in exploring a potential acquisition of VIZIO but did not specify a proposed purchase price. Also at the meeting, Mr. Wang acknowledged the interest from Party A and offered to permit the representatives of Party A to speak with other members of VIZIO management to further the discussions. Mr. Wang did not otherwise respond to Party A at the meeting regarding Party A’s interest in exploring an acquisition of VIZIO.

Still later on August 25, 2023, Messrs. Wang and Wong met virtually with a senior management representative of Walmart. At the meeting, the representative of Walmart stated that Walmart intended to acquire, develop or obtain television operating system technology and was exploring a number of different paths to achieve such objective, with a potential acquisition of VIZIO being the most attractive option at the time, but such a transaction would not be without risks or dyssynergies. The representative of Walmart invited VIZIO to provide Walmart with additional information.

On August 29, 2023, the Transactions Committee met, with members of VIZIO management in attendance. At the meeting, members of VIZIO management provided an update on the status of discussions with Walmart. Also at the meeting, Mr. Wang shared his recent conversation with Party A, including Party A’s interest in exploring a potential acquisition of VIZIO. The Transactions Committee noted Party A’s historical interest in an acquisition (which interest had never gone beyond the highly preliminary stage) and concluded that it was appropriate for members of VIZIO management to meet with Party A.

On August 31, 2023, senior management representatives of Walmart met with Messrs. Wang and Wong in Orange County, California to discuss the initial Walmart proposal. At the meeting, Messrs. Wang and Wong suggested that J.P. Morgan connect with representatives of Walmart to share J.P. Morgan’s views with respect to VIZIO’s prospects and value.

On September 5, 2023, the Transactions Committee met, with members of VIZIO management in attendance. The status of discussions with Walmart and Party A was reviewed at the meeting.

 

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On September 8, 2023, representatives of J.P. Morgan met with representatives of each of Walmart and Evercore Group L.L.C. (which we refer to as “Evercore”), Walmart’s financial advisor, to discuss VIZIO’s business, with the goal of helping Walmart better understand our long-term value, potential cost and revenue synergy opportunities, and the growth prospects that we could provide to Walmart. Following this meeting, representatives of J.P. Morgan and members of VIZIO management, on the one hand, and representatives of each of Evercore and Walmart, on the other hand, engaged from time to time in discussions regarding these matters.

On September 11, 2023, Adam Townsend, our Chief Financial Officer, met with senior management representatives of Party A. During this meeting, the representatives of Party A expressed a general interest in exploring a potential acquisition of VIZIO (without specifying a proposed purchase price) and requested access to due diligence information for the purpose of formulating an acquisition proposal.

On September 13, 2023, a senior management representative of Walmart reiterated to Messrs. Wang and Wong the request from Walmart that VIZIO agree to negotiate exclusively with Walmart. The senior management representative of Walmart then sent to Messrs. Wang and Wong an updated form of exclusivity agreement.

Also on September 13, 2023, the Transactions Committee met, with members of VIZIO management and representatives of J.P. Morgan in attendance. At the meeting, members of VIZIO management provided an update on the recent discussions with Walmart. Also at the meeting, the representatives of J.P. Morgan provided an update on the recent discussion with representatives of each of Walmart and Evercore. It was the consensus of the Transactions Committee at the meeting that Walmart was uniquely positioned to offer compelling terms in connection with an acquisition of VIZIO based on the potential synergies inherent in combining VIZIO with Walmart. In that regard, it was the consensus of the Transactions Committee at the meeting that the VIZIO Board would only consider authorizing VIZIO to enter into exclusive negotiations with Walmart if Walmart improved the value of its acquisition proposal to at least $11.00 per share of our common stock. At the meeting, the Transactions Committee authorized VIZIO management to seek to raise the initial Walmart proposal to a price in excess of $11.00 per share of our common stock, if possible. Also at the meeting, Mr. Townsend described his recent conversation with senior management representatives of Party A, and the Transactions Committee instructed VIZIO management to renew our expired confidentiality agreement with Party A (which was originally entered into in September 2018), and provide due diligence information to Party A.

On September 14, 2023, representatives of J.P. Morgan met with representatives of Evercore. The representatives of J.P. Morgan stated that we would only consider exclusive negotiations if Walmart improved the value of its acquisition proposal.

On September 15, 2023, representatives of J.P. Morgan met with representatives of Evercore. The representatives of J.P. Morgan reiterated that we would only consider exclusive negotiations if Walmart improved the value of its acquisition proposal. The representatives of Evercore responded that Walmart would need additional information in order to consider whether an incremental price increase was merited.

Later on September 15, 2023, representatives of Evercore sent to representatives of J.P. Morgan a list of preliminary due diligence requests that would further assist Walmart in its valuation analysis.

On September 18, 2023, Mr. Wong met virtually with a senior management representative of Walmart. Mr. Wong stated his personal belief that the VIZIO Board would consider entering into exclusive negotiations with Walmart if Walmart improved the value of its acquisition proposal to $11.50 per share of our common stock. Later that day, Mr. Wong followed up to inform a senior management representative of Walmart that VIZIO planned to provide Walmart with additional information to enable Walmart to increase its proposed purchase price.

Later on September 18, 2023, the Transactions Committee met, with members of VIZIO management in attendance. The Transactions Committee noted that members of VIZIO management had expressed to Walmart

 

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that the VIZIO Board would consider entering into exclusive negotiations if Walmart improved the value of its acquisition proposal to $11.50 per share of our common stock. Members of VIZIO management described the efforts underway to renew VIZIO’s confidentiality agreement with Party A.

On September 19, 2023, we renewed our confidentiality agreement with Party A with respect to the disclosure of any confidential information shared between VIZIO and Party A since August 1, 2023, including discussions between the parties regarding a potential acquisition. This confidentiality agreement included a mutual “standstill” provision (which was similar to the then-expired “standstill” provision included in the September 2018 confidentiality agreement with Party A) restricting Party A from (among other things): (1) making, effecting, initiating, causing or participating in (i) any acquisition of beneficial ownership of any securities of VIZIO or (ii) any tender offer, exchange offer, merger, business combination, recapitalization, restructuring, liquidation, dissolution or extraordinary transaction involving VIZIO; (2) taking any action that might require VIZIO to make a public announcement regarding any of the foregoing; or (3) acting, alone or in concert with others, to seek to control or influence VIZIO management, the VIZIO Board or policies of VIZIO, except, in each case, with the prior written consent of VIZIO. The confidentiality agreement did not contain “don’t ask, don’t waive” provisions prohibiting Party A from requesting that VIZIO release Party A from its “standstill” restrictions.

Also on September 19, 2023, Walmart and its representatives were granted access to due diligence information regarding VIZIO in a virtual data room. Thereafter, and through the signing of the merger agreement, Walmart and its representatives engaged in a due diligence investigation of VIZIO, which included numerous meetings with members of VIZIO management and representatives of each of J.P. Morgan and Wilson Sonsini.

On September 21, 2023, representatives of Evercore contacted representatives of J.P. Morgan to express a need to review VIZIO’s long-term financial projections in order to refine Walmart’s understanding of VIZIO’s long-term value, potential cost and revenue synergy opportunities, and the growth prospects that we provide to Walmart. Representatives of J.P. Morgan responded that VIZIO would share its long-term financial projections with Walmart if Walmart increased the value of its acquisition proposal to a price acceptable to the VIZIO Board.

On September 25, 2023, Mr. Wong met with a senior management representative of Walmart. The Walmart representative made an oral proposal, on behalf of Walmart, to acquire VIZIO for $9.75 per share of our common stock. We refer to this proposal as the “second Walmart proposal.” As part of the second Walmart proposal, the representative of Walmart reiterated Walmart’s request that VIZIO agree to negotiate exclusively with Walmart.

On September 26, 2023, the Transactions Committee met, with members of VIZIO management in attendance. Members of VIZIO management reviewed the second Walmart proposal, including Walmart’s request for exclusivity. The Transactions Committee concluded that the second Walmart proposal did not represent an acquisition proposal that warranted negotiating with Walmart on an exclusive basis. The Transactions Committee authorized VIZIO management to continue to engage with Walmart and provide due diligence information in an effort to seek an increase in the value of Walmart’s acquisition proposal to a price in excess of $11.00 per share of our common stock, if possible. The status of discussions with Party A was reviewed.

On September 27, 2023, Messrs. Wang and Wong informed senior management representatives of Walmart that (1) the Transactions Committee had determined that the second Walmart proposal did not represent an acquisition proposal that warranted negotiating with Walmart on an exclusive basis and (2) that it was their respective beliefs that the VIZIO Board would consider entering into exclusive negotiations if Walmart improved the second Walmart proposal to $11.50 per share of our common stock.

On October 2, 2023, a senior management representative of Walmart met with Messrs. Wang and Wong. At the meeting, the Walmart representative communicated that Walmart was not willing to increase its price above its

 

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current proposal of $9.75 per share of our common stock without access to VIZIO’s long-term financial projections. Also at the meeting, the Walmart representative reiterated Walmart’s desire to enter into an exclusivity agreement with VIZIO and informed Messrs. Wang and Wong that the parties should cease communications regarding a potential acquisition unless VIZIO was willing to proceed on the basis proposed by Walmart.

On October 3, 2023, representatives of Evercore contacted representatives of J.P. Morgan to reiterate the message communicated by the senior management representative of Walmart on October 2, 2023. Later that day, J.P. Morgan informed Evercore that VIZIO was not willing to enter into exclusivity with Walmart at that time, but VIZIO would be willing to share a copy of its long-term financial projections with Walmart to facilitate Walmart improving its acquisition proposal.

On October 3, 2023, the Transactions Committee met, with members of VIZIO management in attendance. The status of discussions with Walmart and Party A was reviewed.

On October 4, 2023, Party A was granted access to preliminary due diligence information in a virtual data room.

On October 5, 2023, members of VIZIO management and representatives of J.P. Morgan met with representatives of Party A to discuss due diligence information regarding our business to Party A.

Also on October 5, 2023, representatives of a potential strategic acquiror (which we refer to as “Party B”) contacted representatives of J.P. Morgan, on an unsolicited basis, to express Party B’s interest in learning more about VIZIO’s business. The representatives of Party B stated that they were aware of rumors that J.P. Morgan was working with VIZIO on a potential sale. In response, representatives of J.P. Morgan did not confirm that J.P. Morgan was working with VIZIO, but offered to connect representatives of Party B with members of VIZIO management so that Party B could learn more about VIZIO. The representatives of Party B expressed a desire to better understand VIZIO.

On October 8, 2023, representatives of J.P. Morgan, at the instruction of VIZIO management, provided Evercore with a preliminary draft of VIZIO management’s long-term financial and operating plan (which we refer to as the “draft VIZIO long-term plan”).

On October 9, 2023, representatives of J.P. Morgan, at the direction of VIZIO management, discussed the status of Party A’s due diligence process with representatives of Party A’s financial advisor and suggested that Party A progress its due diligence of VIZIO in order to make an acquisition proposal in the near term.

On October 17, 2023, Mr. Townsend contacted representatives of Party A to inquire about the status of Party A’s due diligence process and to encourage Party A to progress its due diligence in the near term. Mr. Townsend subsequently contacted representatives of Party A on multiple occasions, including on October 25, 2023, and November 10, 2023, to inquire about the status of Party A’s due diligence and to reiterate the need to progress any due diligence in the near term. In response to Mr. Townsend’s inquiries, the representatives of Party A did not commit to any timeline for completing Party A’s due diligence review or provide any indication that Party A would ever submit an acquisition proposal.

Also on October 17, 2023, the Transactions Committee met, with members of VIZIO management and representatives of J.P. Morgan in attendance. The status of discussions with Walmart and Party A was reviewed. With regard to Party A, the Transactions Committee noted that Party A was not pursuing due diligence with urgency and appeared unlikely to make an acquisition proposal in the near term. The recent discussion among representatives of J.P. Morgan and Party B was reviewed, and the Transactions Committee requested that representatives of J.P. Morgan meet with representatives of Party B to further discuss VIZIO.

On October 18, 2023, representatives of J.P. Morgan, at the direction of VIZIO management, discussed with representatives of Party A’s financial advisor the status of Party A’s due diligence and reiterated the need to progress any due diligence in the near term.

 

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On October 19, 2023, Messrs. Wang and Wong met in Los Angeles, California with a senior management representative of Walmart to continue to discuss our long-term value and potential cost and revenue synergy opportunities. Messrs. Wang and Wong reiterated that the VIZIO Board would consider entering into exclusive negotiations if Walmart improved the value of its acquisition proposal to $11.50 per share of our common stock. The Walmart representative restated Walmart’s proposed price of $9.75 per share of VIZIO and informed Messrs. Wang and Wong that, based on information received to date, Walmart was not willing proceed with a transaction on the terms proposed by VIZIO.

Also on October 19, 2023, representatives of J.P. Morgan, at the direction of the Transactions Committee, met with representatives of Party B to further discuss VIZIO’s business and operations. Following this meeting, on approximately November 6, 2023, representatives of J.P. Morgan contacted representatives of Party B to inquire whether Party B was willing to further engage in discussions with respect to a potential transaction between Party B and VIZIO and representatives of Party B conveyed that Party B was not willing to engage in any further discussions.

On October 31, 2023, Mr. Wang met with a senior management representative of Walmart in Bentonville, Arkansas. Mr. Wang reiterated that the VIZIO Board would consider entering into exclusive negotiations if Walmart improved the value of its acquisition proposal to $11.50 per share of our common stock. The representative of Walmart advised Mr. Wang that Walmart had an upcoming board meeting and a potential transaction with VIZIO, including Walmart’s proposed price, would be addressed at that meeting.

On November 14, 2023, Mr. Townsend met with a senior management representative of Party A to discuss the status of Party A’s due diligence review. Mr. Townsend (1) reiterated the importance of Party A completing any remaining due diligence in the near term; and (2) requested that the representative of Party A provide a general indication of the price per share of our common stock that Party A would propose if Party A were to make an acquisition proposal. The representative of Party A requested that Mr. Townsend provide an indication of a price per share of our common stock that the VIZIO Board would find acceptable. Mr. Townsend stated that it was his belief that the VIZIO Board was focused on a price per share of our common stock in the double-digits. The representative of Party A indicated that a price per share of our common stock in the double-digits would likely not be acceptable to Party A.

Later on November 14, 2023, the Transactions Committee met, with members of VIZIO management and representatives of J.P. Morgan in attendance. Mr. Townsend reviewed his discussion with Party A. While the meeting was in process, a senior management representative of Walmart informed Mr. Wang that Walmart was increasing its acquisition proposal to $11.50 in cash per share of our common stock (which we refer to as the “final Walmart proposal”), but that such proposal was conditioned on VIZIO agreeing to negotiate exclusively with Walmart. The Transactions Committee discussed the final Walmart proposal. The Transactions Committee approved VIZIO negotiating exclusively with Walmart given: (1) the lack of urgency from Party A, which (i) had failed to progress its due diligence review despite repeated requests of the need to do so, and (ii) appeared unlikely to be working toward making an acquisition proposal in the near term at the price level being offered by Walmart, if at all; and (2) the price per share contemplated by the final Walmart proposal and the associated value that it would deliver to our stockholders. The Transactions Committee instructed VIZIO management to work with J.P. Morgan, Wilson Sonsini and our other advisors to provide additional due diligence to Walmart, to negotiate and execute an appropriate exclusivity agreement with Walmart, and to begin negotiations with Walmart and its representatives on definitive transaction agreements.

Still later on November 14, 2023, a senior management representative of Party A contacted Mr. Townsend and requested a meeting with Mr. Wang and Party A’s chief executive officer later that week. Mr. Townsend responded that Mr. Wang was unavailable to meet at the time requested by Party A. In response, the representative of Party A proposed that they schedule the meeting approximately two weeks later, during the week of November 27, 2023. Mr. Townsend responded that he would speak with Mr. Wang about Mr. Wang’s schedule.

 

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Still later on November 14, 2023, Walmart submitted a non-binding written proposal to acquire VIZIO reflecting the terms of the final Walmart proposal, along with an exclusivity agreement to be countersigned by VIZIO.

On November 16, 2023, after concluding negotiations on the terms of the exclusivity agreement, we entered into an exclusivity agreement with Walmart, which provided that we would negotiate exclusively with Walmart with respect to a potential acquisition of VIZIO until December 31, 2023 (which period would be automatically extended until January 15, 2024, if certain conditions were met) (we refer to this period as the “exclusivity period”).

Also on November 16, 2023, and again on November 17, 2023, and November 19, 2023, a senior management representative of Party A contacted Mr. Townsend regarding Party A’s request to schedule a meeting with Mr. Wang and the chief executive officer of Party A. Mr. Townsend informed the representative of Party A that we were not in a position to engage with Party A at that time.

On November 21, 2023, representatives of Hogan Lovells US LLP (which we refer to as “Hogan Lovells”), outside counsel to Walmart, and representatives of Wilson Sonsini engaged in a preliminary discussion regarding the “no solicitation” provisions of a merger agreement and related fiduciary exceptions. During such conversation, representatives of Wilson Sonsini proposed that any draft of a merger agreement should include the ability of VIZIO to entertain offers from third parties following signing of a merger agreement in light of the fact that VIZIO and its financial advisor had not broadly solicited offers for the potential sale of VIZIO prior to entering into the exclusivity agreement with Walmart.

On November 22, 2023, Party A sent a letter to Mr. Townsend indicating that Party A believed VIZIO to be in exclusivity with a third party, was disappointed by Mr. Townsend’s response, and that at the meeting that Party A had sought to arrange, it would have been prepared make an offer to acquire VIZIO that Party A believed would offer significant value to our stockholders (no price or range was mentioned). Party A indicated that it remained interested in having the meeting with Mr. Wang.

On November 28, 2023, the VIZIO Board met, with members of VIZIO management and representatives of each of Wilson Sonsini and J.P. Morgan in attendance. The members of VIZIO management reviewed VIZIO management’s long-term financial and operating plan, including the underlying key assumptions, as well as potential risks and opportunities regarding the potential achievement of such plan. We refer to this long-term plan as the “VIZIO long-term plan.” Additional information about the VIZIO long-term plan is contained in the section of this information statement captioned “—Financial Projections.” The VIZIO Board (1) adopted the VIZIO long-term plan, (2) directed J.P. Morgan to use and rely on the VIZIO long-term plan for purposes of its financial analyses and (3) directed J.P. Morgan to provide the VIZIO long-term plan to Walmart. In so doing, the VIZIO Board noted refinements to the VIZIO long-term plan from the draft previously provided to Walmart (which refinements reflected VIZIO management’s evolving understanding of the current dynamics affecting our business).

On December 2, 2023, Hogan Lovells distributed a draft of the merger agreement to Wilson Sonsini. The draft merger agreement contemplated that, concurrently with the execution of the agreement, certain key employees of VIZIO would agree to offer letters relating to post-closing employment with Walmart. Walmart also renewed its request that each of Messrs. Wang and Wong agree to subject an unspecified portion of the proceeds that they would otherwise be entitled to receive in the merger to a holdback. This holdback would only be paid to each of Messrs. Wang and Wong if they remained employed by Walmart for a to-be-agreed-upon period of service following the closing of the merger. At that time, Messrs. Wang and Wong had not engaged in discussions with Walmart regarding their post-closing compensation arrangements. The draft of the merger agreement also provided for, among other things, (1) “no solicitation” restrictions applicable to VIZIO, including a 30-day period during which VIZIO would be able to respond to and accept an unsolicited superior offer in certain circumstances, (2) a termination fee of four percent of VIZIO’s equity value payable by VIZIO in the event the merger agreement was terminated in certain circumstances, including (i) for the failure to receive the required

 

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vote of VIZIO stockholders within 24 hours of signing the merger agreement, (ii) to accept a superior offer or (iii) for the failure to consummate the proposed merger by the end date and the subsequent entry by VIZIO into a definitive agreement with respect to an alternative transaction, (3) the obligation of VIZIO to reimburse Walmart’s expenses in the event the required vote of VIZIO stockholders was not delivered within 24 hours of signing the merger agreement, (4) the cancellation of all unvested equity awards for no consideration, and (5) a closing condition related to the absence of governmental litigation.

On December 5, 2023, the VIZIO Board met, with members of VIZIO management and representatives of each of Wilson Sonsini and J.P. Morgan in attendance. The representatives of Wilson Sonsini reviewed the terms of the initial draft of the merger agreement. The status of discussions with Walmart was reviewed. The VIZIO Board discussed the terms of the merger agreement to be negotiated.

On December 10, 2023, representatives of Wilson Sonsini, on our behalf, distributed a revised draft of the merger agreement to Hogan Lovells. At that time, the representatives of Wilson Sonsini informed the representatives of Hogan Lovells that Messrs. Wang and Wong were not accepting a holdback. The draft of the merger agreement also provided for, among other things: (1) a 45-day period during which VIZIO would be able to respond to and accept an unsolicited superior offer in certain circumstances; (2) a termination fee equal to 2.75 percent of VIZIO’s equity value payable by VIZIO solely in the event the merger agreement was terminated to accept a superior offer and no termination fee or reimbursement of Walmart’s expenses in the event the required vote of the VIZIO stockholders was not achieved; (3) the assumption by Walmart of VIZIO’s unvested equity awards, which would be converted into economically equivalent equity awards in Walmart; (4) an obligation of Walmart to pursue litigation and agree to certain remedies in connection with obtaining antitrust clearance; (5) a 12-month end date, subject to an automatic extension of six months in the event antitrust clearance had not been obtained; and (6) no closing condition related to the absence of governmental litigation. Thereafter, members of VIZIO management and representatives of Wilson Sonsini, on the one hand, and representatives of each of Walmart and Hogan Lovells, on the other hand, communicated regularly to negotiate the terms of the merger agreement. The principal areas of negotiation included: (1) the terms of the “no-shop” restrictions applicable to VIZIO, including (i) the date before which, and other terms pursuant to which, VIZIO would be able to respond to and accept a superior offer; and (ii) VIZIO’s ability to waive any existing “standstill” restrictions; (2) the amount of the termination fee payable by VIZIO and the circumstances in which it would be payable; (3) the respective efforts required by VIZIO and Walmart to obtain the required regulatory clearance to consummate the merger; (4) the inclusion of a reverse termination fee payable by Walmart in connection with the failure to obtain the required regulatory clearance to consummate the merger, and the terms on which it might be payable; (5) the end date of the merger agreement and the extensions thereto; (6) the restrictions on the operation of our business prior to the completion of the merger, including with respect to material contracts and employee compensation and retention matters; (7) the conditions to each party’s obligations to close the merger; (8) the definition of “material adverse effect”; (9) the circumstances in which each party would have the right to terminate the merger agreement; and (10) the terms of the replacement equity awards for continuing VIZIO employees.

On December 12, 2023, the VIZIO Board met, with members of VIZIO management and representatives of each of Wilson Sonsini and J.P. Morgan in attendance. The status of discussions with Walmart was reviewed. The representatives of J.P. Morgan provided preliminary financial analyses of the final Walmart proposal.

On December 14, 2023, Mr. Wang informed a senior management representative of Walmart that a holdback was not acceptable to Mr. Wang.

On December 19, 2023, the VIZIO Board met, with members of VIZIO management and representatives of each of Wilson Sonsini and J.P. Morgan in attendance. The status of discussions with Walmart was reviewed.

On December 21, 2023, representatives of Evercore contacted representatives of J.P. Morgan to formally request that VIZIO agree to extend the exclusivity period to January 31, 2024 (which period would be automatically extended until February 15, 2024, if certain conditions were met) to allow Walmart additional time to complete its due diligence review.

 

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On December 27, 2023, VIZIO management informed the Transactions Committee, via email, of Walmart’s request to extend the exclusivity period. VIZIO management also summarized for the Transactions Committee the terms of a proposed engagement letter being negotiated with J.P. Morgan and reviewed for the Transactions Committee J.P. Morgan’s customary relationship disclosure previously provided to the Transactions Committee, which relationship disclosure included information regarding fees received from Walmart and VIZIO in connection with certain investment banking and other services, as more fully described in the section of this information statement captioned “—Opinion of J.P. Morgan Securities LLC.” The Transactions Committee did not identify in J.P. Morgan’s relationship disclosure any matter that would affect the ability of J.P. Morgan to fulfill its responsibilities as financial adviser to VIZIO. The Transactions Committee authorized VIZIO management to (1) finalize the terms of the engagement letter with J.P. Morgan and (2) negotiate an extension of the exclusivity period to January 26, 2024 (which period would be extended until February 9, 2024, if both Walmart and VIZIO so agreed).

On December 28, 2023, representatives of J.P. Morgan, conveyed to Evercore the Transactions Committee’s proposal to extend the exclusivity period to January 26, 2024 (which period would be extended until February 9, 2024, if both Walmart and VIZIO so agreed).

On January 2, 2024, a senior management representative of Party A contacted Mr. Townsend and requested an update on our ability to engage with Party A. Mr. Townsend did not respond.

On or about January 3, 2024, a representative of Walmart conveyed to Mr. Townsend that Walmart (1) required additional time to complete its due diligence review and (2) would be making a counterproposal to extend the exclusivity period to January 31, 2024 without any further extensions.

On January 4, 2024, the VIZIO Board met, with members of VIZIO management and representatives of each of Wilson Sonsini and J.P. Morgan in attendance. The status of discussions with Walmart was reviewed. Representatives of J.P. Morgan informed the VIZIO Board of the recent discussions between a representative of Walmart and Mr. Townsend regarding the extension of the exclusivity period to January 31, 2024. The VIZIO Board authorized VIZIO management to extend the exclusivity period through January 31, 2024.

On January 5, 2024, Hogan Lovells delivered a revised draft of the merger agreement to Wilson Sonsini. The draft merger agreement restated Walmart’s position that certain key employees would enter into holdback agreements and enter into offer letters relating to post-closing employment with Walmart concurrently with the execution of the merger agreement. That draft merger agreement also provided for, among other things, (1) an acceptance of VIZIO’s proposal of a 45-day period during which VIZIO would be able to respond to and accept an unsolicited superior offer in certain circumstances; (2) a termination fee equal to 3.65 percent of VIZIO’s equity value payable by VIZIO in certain circumstances, including upon termination of the merger agreement by VIZIO to accept a superior offer; (3) reimbursement of Walmart’s expenses in the event the required vote of VIZIO’s stockholders was not delivered within 24 hours of signing the merger agreement, subject to a cap equal to one percent of VIZIO’s equity value; (4) cancellation of all unvested equity awards, but an acknowledgement by Walmart that Walmart would grant certain continuing VIZIO employees with replacement equity in Walmart; (5) certain additional closing conditions, including relating to the absence of governmental litigation and no modification of the stipulated order; and (6) no obligation of Walmart to litigate or accept any remedies in connection with obtaining antitrust clearance.

On January 8, 2024, a senior management representative of Party A contacted Mr. Wang. The representative of Party A again requested a meeting with Mr. Wang. Mr. Wang informed the representative of Party A that we were not in a position to engage with Party A at that time. Mr. Wang subsequently informed the VIZIO Board of his conversation with Party A.

On January 11, 2024, representatives of Hogan Lovells and Wilson Sonsini discussed the revised draft of the merger agreement, including the holdback agreements and offer letters relating to post-closing employment, conditions to closing, the provisions of the merger agreement addressing VIZIO’s ability to respond to unsolicited acquisition proposals, Walmart’s obligations to litigate or accept any remedies in connection with obtaining antitrust clearance, provisions relating to the termination rights of each party, and the termination fees

 

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payable by VIZIO and Walmart. From time to time thereafter, representatives of Hogan Lovells and Wilson Sonsini engaged in periodic conversations and negotiations regarding issues in the merger agreement and related transaction agreements.

On January 12, 2024, Wilson Sonsini delivered a revised draft of the merger agreement to Hogan Lovells, which included, among other things, (1) a termination fee of three percent of VIZIO’s equity value payable by VIZIO in certain circumstances, including upon termination of the merger agreement by VIZIO to accept a superior offer; and (2) a reverse termination fee, the amount of which was not specified, payable by Walmart in connection with the failure to obtain the required antitrust clearance to consummate the merger.

Also on January 12, 2024, representatives of Evercore received an updated draft of an amendment to the exclusivity agreement, in which VIZIO proposed that exclusivity would extend through January 31, 2024, subject to a mutually agreed extension to February 15, 2024.

On January 16, 2024, the VIZIO Board met, with members of VIZIO management and representatives of each of Wilson Sonsini and J.P. Morgan in attendance. The status of discussions with Walmart was reviewed.

On January 17, 2024, representatives of Evercore informed representatives of J.P. Morgan that Walmart requested that the exclusivity period be extended to February 15, 2024, to allow Walmart additional time to complete its due diligence review.

Also on January 17, 2024, VIZIO management informed the Transactions Committee of Walmart’s most recent request to extend the exclusivity period. The Transactions Committee authorized VIZIO management to extend the exclusivity period to February 15, 2024.

On January 21, 2024, Hogan Lovells delivered a revised draft of the merger agreement to Wilson Sonsini. The revised draft of the merger agreement contemplated the delivery of the holdback agreements and the entry into offer letters relating to post-closing employment by Messrs. Wang and Wong, rejected the reverse termination fee payable by Walmart in connection with the failure to obtain the required antitrust clearance, and included a termination fee payable by VIZIO of 3.5 percent of VIZIO’s equity value as a result of the acceptance by VIZIO of a superior offer.

On January 22, 2024, we and Walmart amended our exclusivity agreement to extend the exclusivity period to February 15, 2024.

On January 24, 2024, the VIZIO Board met, with members of VIZIO management and representatives of each of Wilson Sonsini and J.P. Morgan in attendance. The status of discussions with Walmart was reviewed.

On or about January 25, 2024, we became aware of market rumors regarding a potential transaction between VIZIO and Walmart. The source of these rumors was not known to VIZIO.

On January 26, 2024, the Transactions Committee met, with members of VIZIO management and representatives of Wilson Sonsini in attendance. The Transactions Committee discussed the rumors regarding a potential transaction between VIZIO and Walmart. The representatives of Wilson Sonsini provided an update on the status of negotiations with Walmart and reviewed the open points in the merger agreement. It was noted that Walmart had requested to meet with Mr. Wang in person, in his capacity as a stockholder of VIZIO, on January 29, 2024, to discuss a holdback (which holdback had, at that time, been rejected by Messrs. Wang and Wong), and that Mr. Wang had agreed to this meeting. The Transactions Committee concluded that (1) it would allow the meeting on January 29, 2024, between Mr. Wang and representatives of Walmart to proceed, but that Mr. Mohan should attend the meeting as an observer and (2) any subsequent meetings between Mr. Wang (or any other officer of VIZIO) and Walmart to discuss a holdback could proceed, but only if a member of the Transactions Committee was in attendance as an observer. The Transactions Committee requested that Mr. Wang not discuss with Walmart any future, post-closing compensation arrangement between Mr. Wang and Walmart.

 

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Also on January 26, 2024, representatives of J.P. Morgan, at the direction of VIZIO management, provided VIZIO management’s operating budget for fiscal year 2024 (which we refer to as the “2024 operating budget”) to Walmart. Additional information about the 2024 operating budget is contained in the section of this information statement captioned “—Financial Projections.”

On January 28, 2024, Wilson Sonsini delivered a revised draft of the merger agreement to Hogan Lovells. The revised draft of the merger agreement (1) continued to reject the delivery of the holdback agreements and the entry into offer letters relating to post-closing employment by Messrs. Wang and Wong, (2) included a reverse termination fee payable by Walmart in connection with the failure to obtain the required antitrust clearance and also in the event of termination in connection with pending governmental litigation as a result of the merger or pending litigation by the FTC or the New Jersey Attorney General to expand the scope of the stipulated order; (3) included a termination fee payable by VIZIO of 3.25 percent of VIZIO’s equity value as a result of the acceptance by VIZIO of a superior offer; and (4) provided a revised proposal regarding the continuation of benefits for continuing VIZIO employees.

On January 29, 2024, VIZIO management met with representatives of Walmart, with representatives of J.P. Morgan and Evercore in attendance, to review VIZIO’s Q4 2023 actual results as well as to discuss the future operating plan.

Also on January 29, 2024, Mr. Wang met with a senior management representative of Walmart in Orange County, California to discuss a holdback. Mr. Mohan attended this meeting as the representative of the Transactions Committee. The representative of Walmart stated that Walmart was not prepared to proceed with an acquisition of VIZIO without an appropriate holdback from Messrs. Wang and Wong. Mr. Wang informed the representative of Walmart (1) that he was willing to consider a holdback and requested that Walmart provide a proposal for his review and (2) of the importance that Walmart agree to pay VIZIO a reverse termination fee if the acquisition could not proceed in certain circumstances. The parties did not discuss any future, post-closing compensation arrangement between Mr. Wang and Walmart.

On January 30, 2024, the VIZIO Board met, with members of VIZIO management and representatives of each of J.P. Morgan and Wilson Sonsini in attendance. Messrs. Mohan and Wang described their meeting with a representative of Walmart the previous day. The representatives of J.P. Morgan reviewed preliminary financial analyses of the final Walmart proposal. The members of the Transactions Committee reported on the decision to authorize Mr. Wang’s meeting with Walmart to discuss a holdback. The VIZIO Board concurred with the decision of the Transactions Committee. In light of Walmart’s position that it would not proceed with an acquisition of VIZIO without a holdback from Messrs. Wang and Wong, the VIZIO Board authorized (1) Messrs. Wang and Wong to retain independent legal counsel to represent them in connection with the acquisition and (2) VIZIO to pay the fees of such counsel.

On February 2, 2024, a senior management representative of Walmart met with Mr. Wang. Mr. Russell attended this meeting as the representative of the Transactions Committee. The representatives of Walmart proposed a $275 million holdback of merger proceeds for Mr. Wang, and a $15.5 million holdback of merger proceeds for Mr. Wong. In each case, 25 percent of the applicable holdback amount would be paid to Messrs. Wang and Wong, as applicable, over a four-year period on each anniversary following the closing of the merger, subject to Messrs. Wang or Wong, as applicable, continuing to work for Walmart or one of its affiliates. We refer to this proposal as the “initial holdback proposal.”

Later on February 2, 2024, Walmart provided to each of Messrs. Wang and Wong a written proposal memorializing the initial holdback proposal.

Following the receipt of the initial holdback proposal, Messrs. Wang and Wong, through their independent personal counsel, continued to negotiate the terms of their respective holdback arrangements with Walmart. The final terms of the holdback arrangements are summarized in the section of this information statement captioned “—Holdback Agreements.”

 

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On February 6, 2024, the VIZIO Board met, with members of VIZIO management and representatives of each of J.P. Morgan and Wilson Sonsini in attendance. The VIZIO Board discussed the status of the holdback negotiations. The representatives of Wilson Sonsini reviewed the draft merger agreement. The representatives of J.P. Morgan discussed certain other parties (including Party A and Party B) that might have an interest in pursuing an acquisition of VIZIO, and the considerations that might impact each such party’s interest. The representatives of J.P. Morgan provided their perspective that, from a financial point of view, such other parties either were unlikely to have the ability or were not reasonably expected to desire to consummate an all-cash acquisition of VIZIO at the price level contemplated by the final Walmart proposal. The VIZIO Board determined not to contact other parties concerning their interest in pursuing an acquisition of VIZIO because of: (1) the perspective of the representatives of J.P. Morgan; (2) the significant time that would likely be required for any other party to submit an acquisition proposal and the potential risk of losing the favorable opportunity with Walmart if we sought to pursue discussions with any other party; (3) the exclusivity agreement between VIZIO and Walmart, which remained in effect; (4) the negotiated terms of “no solicitation” provisions of the merger agreement, including the ability of any interested party to pursue an acquisition of VIZIO for 45 days after entry into the merger agreement under certain circumstances; and (5) our ongoing commercial relationship with Walmart. Members of VIZIO management reviewed the 2024 operating budget. The VIZIO Board adopted the 2024 operating budget and ratified its sharing with each of Walmart and J.P. Morgan, and directed J.P. Morgan to use the 2024 operating budget for purposes of its financial analyses.

On February 11, 2024, a senior management representative of Party A, at an industry event, expressed to Mr. Wang a desire to have the meeting with Mr. Wang that Party A had previously requested. Mr. Wang informed the representative of Party A that we were not in a position to engage with Party A at that time.

On February 12, 2024, and February 13, 2024, representatives of each of Walmart, Hogan Lovells, Wilson Sonsini, VIZIO management and legal counsel to Messrs. Wang and Wong met to negotiate the final open points in the merger agreement, support agreements, holdback agreements and other transaction documents. Mr. Russell attended these meetings as the representative of the Transactions Committee. At the conclusion of these meetings, the material economic terms of the definitive agreements had been negotiated in a manner amenable to the parties, subject to approval by the VIZIO Board. During the meetings, the representatives of Walmart stated that, as a condition to approving the acquisition and in addition to the holdback agreements with Messrs. Wang and Wong, Walmart’s board of directors would require each of Messrs. Wang and Wong to enter into offer letters related to their post-closing employment with Walmart.

On February 13, 2024, The Wall Street Journal published an article stating that we were in discussions to be acquired by Walmart.

On February 14, 2024, Walmart provided draft offer letters to each of Messrs. Wang and Wong related to their post-closing employment with Walmart. Mr. Wang’s offer letter provided for substantially equivalent compensation to his existing employment arrangement with VIZIO. At that time, Messrs. Wang and Wong still had not engaged in discussions with Walmart regarding their future, post-closing compensation arrangements.

Later on February 14, 2024, the VIZIO Board met, with members of VIZIO management and representatives of each of J.P. Morgan and Wilson Sonsini in attendance. The representatives of Wilson Sonsini reviewed with the members of the VIZIO Board their fiduciary duties. The representatives of Wilson Sonsini summarized the material terms of the merger agreement. Mr. Wang described his recent contact with, and response to, a representative of Party A. The representatives of J.P. Morgan provided preliminary financial analyses of the final Walmart proposal. The VIZIO Board discussed the possibility of contacting other parties that might have an interest in pursuing an acquisition of VIZIO. Again, the representatives of J.P. Morgan provided their perspective that, from a financial point of view, such other parties either were unlikely to have the ability or were not reasonably expected to desire to consummate an all-cash acquisition of VIZIO at the price level contemplated by the final Walmart proposal. The VIZIO Board determined not to contact other parties concerning their interest in a pursuing an acquisition of VIZIO, despite the imminent expiration of the exclusivity period set forth in the

 

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exclusivity agreement between VIZIO and Walmart, because of: (1) the perspectives of the representatives of J.P. Morgan; (2) the significant time that would likely be required for any other party to submit an acquisition proposal and the potential risk of losing the favorable opportunity with Walmart if we sought to pursue discussions with any other party; (3) the negotiated terms of the “no solicitation” provisions of the merger agreement, including the ability of any interested party to pursue an acquisition of VIZIO for 45 days after entry into the merger agreement under certain circumstances; and (4) our commercial relationship with Walmart. The representatives of Wilson Sonsini summarized the terms of a proposed engagement letter with J.P. Morgan. The VIZIO Board approved our entry into the engagement letter with J.P. Morgan. The draft employment offer letters provided to Messrs. Wang and Wong were discussed. The VIZIO Board authorized Messrs. Wang and Wong to engage in negotiations with Walmart to finalize the terms of their employment with Walmart following the consummation of the merger. The VIZIO Board discussed Mr. Wang’s potential interests in the acquisition and concluded that Mr. Wang did not have an interest in the acquisition that would be additional to or different from the interests of our other stockholders, and, in fact, was at an economic disadvantage relative to our other stockholders as a result of his holdback agreement. The VIZIO Board instructed VIZIO management, Wilson Sonsini and J.P. Morgan to work to finalize the transaction agreements as soon as possible.

Following the February 14, 2024 meeting of the VIZIO Board and through February 19, 2024, representatives of Walmart, Hogan Lovells, Wilson Sonsini, VIZIO management and legal counsel to Messrs. Wang and Wong continued to communicate regularly to (1) finalize Walmart’s due diligence and (2) negotiate the final terms of the merger agreement, support agreements, holdback agreements and other transaction documents.

On February 15, 2024, the exclusivity period expired and was not extended by VIZIO and Walmart.

On February 19, 2024, the VIZIO Board met, with members of VIZIO management and representatives of each of J.P. Morgan and Wilson Sonsini in attendance. The representatives of Wilson Sonsini reviewed with the members of the VIZIO Board their fiduciary duties. The representatives of Wilson Sonsini summarized the final terms of the merger agreement and the proposed employment offer letters to be entered into between each of Messrs. Wang and Wong. The terms of these offer letters are summarized in the section of this information statement captioned “—Interests of VIZIO’s Directors and Executive Officers in the Merger—Employment Arrangements Following the Merger.” The VIZIO Board discussed Mr. Wang’s potential interests in the acquisition and again concluded that Mr. Wang did not have an interest in the acquisition that would be additional to or different from the interests of our other stockholders, and, in fact, was at a disadvantage relative to our other stockholders as a result of his holdback agreement. The representatives of J.P. Morgan summarized the contents of its relationship disclosure that had been distributed to the VIZIO Board, which included information regarding fees received from Walmart and VIZIO in connection with certain investment banking and other services, as more fully described in the section of this information statement captioned “—Opinion of J.P. Morgan Securities LLC.” The VIZIO Board did not identify in J.P. Morgan’s relationship disclosure any matter that would affect the ability of J.P. Morgan to fulfill its responsibilities as financial advisor to VIZIO. The representatives of J.P. Morgan rendered J.P. Morgan’s oral opinion, which was subsequently confirmed by delivery of its written opinion, dated February 19, 2024, to the VIZIO Board that, as of such date and based upon and subject to the factors and assumptions set forth in its written opinion, the price per share to be paid to the holders of our Class A common stock (other than Mr. Wang and his affiliates) in the proposed merger was fair, from a financial point of view, to such holders. For more information, see the section of this information statement captioned “—Opinion of J.P. Morgan Securities LLC.” The VIZIO Board discussed the acquisition. It was noted that since the article in The Wall Street Journal, no other potential acquiror (including Party A and Party B) had contacted VIZIO regarding a potential transaction. Copies of the final merger agreement were provided to each member of the VIZIO Board. The VIZIO Board, after considering the factors more fully described in the section of this information statement captioned “—Recommendation of the VIZIO Board and Reasons for the Merger,” unanimously: (1) determined that the merger and the merger agreement are advisable and fair to, and in the best interests of, us and our stockholders, (2) adopted and approved the merger agreement, and authorized and approved the execution, delivery and performance of the merger agreement by us and the merger and the transactions contemplated thereby and (3) recommended that our stockholders adopt the merger agreement.

 

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Later on February 19, 2024, we entered into the merger agreement and Messrs. Wang and Wong entered into the holdback agreements and employment offer letters, and the consenting stockholders entered into the support agreements. Promptly following the execution of the merger agreement, the consenting stockholders delivered the written consent. For more information, see the section of this information statement captioned “—Holdback Agreements.”

On February  20, 2024, before the opening of trading on the NYSE, Walmart and VIZIO jointly announced the merger.

Recommendation of the VIZIO Board and Reasons for the Merger

Recommendation of the VIZIO Board

The VIZIO Board unanimously: (1) determined that the merger and the merger agreement are advisable and fair to, and in the best interests of, us and our stockholders, (2) adopted and approved the merger agreement, and authorized and approved the execution, delivery and performance of the merger agreement by us and the merger and the transactions contemplated thereby and (3) recommended that our stockholders adopt the merger agreement.

Reasons for the Merger

In evaluating the merger agreement and the merger, the VIZIO Board consulted with VIZIO management, as well as representatives of each of Wilson Sonsini and J.P. Morgan. In recommending that our stockholders vote “FOR” the adoption of the merger agreement and approval of the merger, the VIZIO Board considered and analyzed a number of factors, including the following (which factors are not necessarily presented in order of relative importance). Based on these consultations, considerations and analyses, and the factors discussed below, the VIZIO Board concluded that entering into the merger agreement was advisable, fair to and in our best interests and in the best interests of our stockholders.

The VIZIO Board believed that the following material factors and benefits supported its determination and recommendation:

 

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Business, Financial Condition, Prospects and Execution Risks. The VIZIO Board considered the current and historical financial condition, results of operations, business, and competitive positioning of VIZIO, as well as our prospects and risks if we were to remain an independent company. In particular, the VIZIO Board considered VIZIO management’s then-current business plan, including the financial projections (as defined in the section of this information statement captioned “—Financial Projections”). Additional information about the preparation and substance of the financial projections is contained in the section of this information statement captioned “—Financial Projections.” The VIZIO Board considered that business plan and the potential opportunities that it presented against, among other things, various execution and other risks to achieving that business plan, including (1) the likelihood that the business plan could be achieved in the face of operational and execution risks in the short and long term, (2) the impact of market, customer, consumer and

 

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Our competitive positioning and prospects as an independent company. Included among these risks were consideration of:

 

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Our size, as well as our financial resources, relative to those of our competitors.

 

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Evolving competitive threats. In that regard, the VIZIO Board was aware of increasing competition that we were facing from other television operating system providers.

 

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Other factors affecting the revenues, operating costs and profitability of companies in our industry generally.

 

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The other risk factors described in our other filings with the SEC, as listed in the section of this information statement captioned “Where You Can Find More Information.”

 

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Recent market volatility and the current and prospective business environment in which we operate, including evolving macroeconomic headwinds facing us and our industry more generally, and the impact of changed economic circumstances on key customer segments, and the likely effect of these factors on us and our business plans as an independent public company.

 

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Declining television sales in recent periods relative to our historical experience.

 

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Increased pricing pressure from competitors. In this regard, the VIZIO Board considered that larger competitors, many of whom have significantly greater financial resources than we do and the ability to cross-subsidize low-margin operations from their other higher-margin operations, may have competitive advantages in relation to us and the ability to offer lower prices for longer periods.

 

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The possibility that our customers may seek profit-sharing arrangements with us related to our Platform+ revenue, which could result in a decline in our gross profit.

 

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The challenges of making investments to achieve long-term growth for a publicly traded company, which is subject to scrutiny based on its quarterly performance. The VIZIO Board was aware that the price of our Class A common stock could be negatively impacted if we failed to meet investor expectations, including if we failed to meet our growth or profitability objectives.

 

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The historical market prices, volatility and trading information with respect to shares of our Class A common stock.

 

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Cash Consideration and Certainty of Value. The consideration to be received by our stockholders in the merger consists entirely of cash. The receipt of cash consideration provides certainty of value and eliminates uncertainty and risk for our stockholders related to the continued execution of our business as well as risks related to the financial markets generally.

 

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Best Value Reasonably Obtainable. The belief of the VIZIO Board that the price per share represents the best value reasonably obtainable for the shares of our Class A common stock, taking into account the VIZIO Board’s familiarity with our business, operations, prospects, business strategy, assets, liabilities and general financial condition on a historical and prospective basis. In addition, the VIZIO Board believed that, measured against our longer-term execution risks, the price per share reflects a favorable price for the shares of our Class A common stock. The VIZIO Board also considered that the price per share constitutes a premium of approximately 47 percent to our closing stock price on February 12, 2024, the last full trading day prior to the publication of an article in The Wall Street Journal stating that we were in discussions to be acquired by Walmart.

 

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Potential Strategic Alternatives. The assessment of the VIZIO Board that none of the possible alternatives to the merger (including the possibility of us continuing to operate as an independent public company or pursuing a different transaction, and the desirability and perceived risks of those alternatives, as well as the potential benefits and risks to our stockholders of those alternatives and the timing and likelihood of effecting such alternatives) was reasonably likely to present superior opportunities for us to create greater value for our stockholders, taking into account execution risks as well as business, competitive, financial, industry, legal, market and regulatory risks.

 

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Results of Strategic Review Process. The merger was the result of a reasoned, fully informed process overseen by the Transactions Committee. In this regard, the VIZIO Board considered the limited universe of potential buyers that might have an interest in pursuing an acquisition of VIZIO, and J.P. Morgan’s perspective from a financial point of view on the ability and desire of such other potential buyers to consummate an all-cash acquisition of VIZIO at the price level contemplated by the final Walmart proposal. The VIZIO Board also considered the fact that the merger agreement permits us to respond to unsolicited acquisition proposals from third parties, and, subject to compliance with the terms of the merger agreement, to terminate the merger agreement to accept a superior offer. The VIZIO Board also considered the potential risk of losing the favorable opportunity with Walmart if the VIZIO Board determined to pursue acquisition discussions with third parties.

 

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Fairness Opinion of J.P. Morgan. The oral opinion rendered by J.P. Morgan, which was subsequently confirmed by delivery of its written opinion, to the VIZIO Board on February 19, 2024, that, as of such date and based upon and subject to the factors and assumptions set forth in its written opinion, the price per share to be paid to the holders of VIZIO Class A common stock (other than William Wang and his affiliates) in the proposed merger was fair, from a financial point of view, to such holders. For more information, see the section of this information statement captioned “—Opinion of J.P. Morgan Securities LLC.”

 

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Negotiations with Walmart and Terms of the Merger Agreement. The terms of the merger agreement, which was the product of arm’s-length negotiations, and the belief of the VIZIO Board that the merger agreement contained terms that provided us with a reasonable level of closing certainty. The factors considered included:

 

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Our ability, under certain circumstances, to furnish information to, and conduct negotiations with, third parties regarding alternative acquisition proposals.

 

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Our ability, under certain circumstances, to release a person or entity from, or amend or waive any provision of, or decline to enforce, any “standstill” agreement or provision.

 

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The VIZIO Board’s belief that the terms of the merger agreement would be unlikely to deter third parties from making a superior offer.

 

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Our ability, under certain circumstances, to terminate the merger agreement to enter into an alternative acquisition agreement. In that regard, the VIZIO Board believed that the termination fee payable by us in such instance was reasonable and not preclusive of other offers.

 

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Our ability to specifically enforce Walmart’s obligation to cause the merger to be consummated.

 

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Reasonable Likelihood of Consummation. The belief of the VIZIO Board that an acquisition by Walmart has a reasonable likelihood of closing, including the VIZIO Board’s belief that there was a reasonable likelihood that the antitrust clearance required to consummate the merger would be obtained.

 

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Business Reputation of Walmart. The belief of the VIZIO Board that the business reputation and financial resources of Walmart supported the conclusion that a transaction with Walmart could be consummated, and had a reasonable likelihood of being consummated successfully.

 

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Appraisal Rights. The appraisal rights that are available to our Class A stockholders in connection with the merger.

The VIZIO Board also considered a number of uncertainties and risks and other potentially negative factors related to its recommendation, including the following:

 

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No Stockholder Participation in Future Growth or Earnings. The nature of the merger as a cash transaction means that our stockholders will not participate in our future earnings or growth and will not benefit from any appreciation in value of the surviving corporation following the merger. The VIZIO Board also considered the other potential alternative strategies available to us as an independent company, which, despite significant uncertainty, had the potential to result in a more valuable company.

 

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Uncertain Antitrust Clearance Process. The possibility that the FTC or Department of Justice may delay, object to or challenge the merger or may seek to impose terms and conditions on their clearance that could ultimately result in the merger not occurring. The VIZIO Board was aware that the process to obtain clearance under the HSR Act could be prolonged and could have an impact on our business, and that we would not receive compensation from Walmart if the merger could not be consummated as a result of the failure to obtain clearance under the HSR Act.

 

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•

Risks Associated with Failure to Consummate the Merger. The possibility that the merger might not be consummated, and if it is not consummated, that: (1) our directors, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work on behalf of VIZIO during the pendency of the merger; (2) we will have incurred significant transaction and other costs, which would not be recovered through expense reimbursement or a reverse termination fee; (3) our continuing business relationships with customers may be adversely affected, and such customers may not return if the merger is not consummated and we remain an independent company; (4) our continuing business relationships with other business partners and employees may be adversely affected; (5) the trading price of our Class A common stock could be adversely affected; (6) the other contractual and legal remedies available to us in the event of the termination of the merger agreement may be insufficient from a variety of perspectives, costly to pursue or both; and (7) the failure of the merger to be consummated could result in an adverse perception among our current and prospective customers, consumers, suppliers, employees and investors, which could cause an adverse impact on our operating results.

 

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No Ability to Solicit an Alternative Transaction. The restrictions in the merger agreement that prevent us from soliciting competing proposals from the date of the merger agreement (subject to certain exceptions to allow the VIZIO Board to exercise its fiduciary duties and to accept a superior offer, and then only upon the payment of a termination fee).

 

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Termination Fee Payable by VIZIO. The requirement that we pay Walmart a termination fee of $78 million under certain circumstances following termination of the merger agreement, including if the VIZIO Board terminates the merger agreement to accept a superior offer. The VIZIO Board considered the potentially dampening effect that this termination fee could have on a third party’s interest in making a proposal to acquire us.

 

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Impact of Interim Restrictions on VIZIO’s Business Pending the Consummation of the Merger. The restrictions in the merger agreement on the conduct of our business prior to the consummation of the merger, which may delay or prevent us from undertaking strategic initiatives before the consummation of the merger that, absent the merger agreement, we might have pursued.

 

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Effects of the Announcement of the Merger. The effects of the public announcement of the merger, including the: (1) effects on our employees, customers, consumers, operating results and stock price; (2) impact on our ability to attract and retain management, sales and marketing, and technical personnel; and (3) potential for litigation in connection with the merger.

 

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Taxable Consideration. The receipt of cash in exchange for shares of our common stock in the merger will generally be a taxable transaction for U.S. federal income tax purposes for our stockholders.

 

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Interests of VIZIO’s Directors and Executive Officers. The interests that our directors and executive officers may have in the merger, which may be different from, or in addition to, those of our other stockholders. For more information, see the section of this information statement captioned “—Interests of VIZIO’s Directors and Executive Officers in the Merger.”

 

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Costs and Time Required. The significant costs involved in connection with entering into the merger agreement and consummating the merger (many of which are payable whether or not the merger is consummated) and the substantial time and effort of VIZIO management required to consummate the merger.

This discussion is not meant to be exhaustive. Rather, it summarizes the material reasons and factors evaluated by the VIZIO Board in its consideration of the merger. After considering these and other factors, the VIZIO Board concluded that the potential benefits of entering into the merger agreement outweighed the uncertainties and risks. In the light of the variety of factors considered by the VIZIO Board and the complexity of these factors, the VIZIO Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the foregoing factors in reaching its determination and recommendations. Moreover, each member of the VIZIO Board applied his or her own personal business judgment to the process and may have assigned different relative weights to the different factors. The VIZIO Board adopted and approved the merger agreement and the

 

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merger, and recommended that our stockholders adopt the merger agreement, based upon the totality of the information presented to, and considered by, the VIZIO Board. The explanation of the factors and reasoning set forth above may contain forward-looking statements, which should be read in conjunction with the section of this information statement captioned “Forward-Looking Statements.”

Requisite Stockholder Approval

The adoption of the merger agreement by our stockholders required the affirmative vote or written consent of the holders of (1) a majority of the voting power of the outstanding shares of common stock entitled to vote on the merger and (2) two-thirds of the outstanding shares of Class B common stock. The holders of our Class A common stock are entitled to one vote for each share held of record, and the holders of our Class B common stock are entitled to 10 votes for each share of Class B common stock held of record on all matters on which stockholders are entitled to vote generally, including adoption of the merger agreement.

Such requisite stockholder approval was obtained on February 19, 2024, when, effective following the execution and delivery of the merger agreement, the consenting stockholders, representing approximately 89 percent of the voting power of outstanding shares of common stock and 100 percent of the outstanding shares of Class B common stock as of such date (which was the record date for determining stockholders entitled to consent to the adoption of the merger agreement), delivered the written consent adopting the merger agreement in all respects and approving the transactions contemplated thereby, including the merger, in accordance with the DGCL, the charter and the merger agreement.

As a result, no further action by any other VIZIO stockholder is required under applicable law or the merger agreement (or otherwise) to adopt the merger agreement, and we are not, and will not be, soliciting your vote for or consent to the adoption of the merger agreement and the approval of the transactions contemplated thereby and will not call a stockholders’ meeting for the purposes of voting on the adoption of the merger agreement and the approval of the transactions contemplated thereby. No action by the stockholders of Walmart is required to complete the merger, and all requisite corporate action by and on behalf of Merger Sub required to complete the merger has been taken.

Opinion of J.P. Morgan Securities LLC

Pursuant to an engagement letter dated February 14, 2024, VIZIO retained J.P. Morgan as its financial advisor in connection with the proposed merger.

At the meeting of the VIZIO Board on February 19, 2024, J.P. Morgan rendered its oral opinion to the VIZIO Board that, as of such date and based upon and subject to the factors and assumptions set forth in its written opinion, the price per share to be paid to the holders of VIZIO Class A common stock (other than William Wang and his affiliates) in the proposed merger was fair, from a financial point of view, to such holders. J.P. Morgan has confirmed its February 19, 2024 oral opinion by delivering its written opinion to the VIZIO Board, dated February 19, 2024, that, as of such date, the price per share to be paid to the holders of VIZIO Class A common stock (other than William Wang and his affiliates) in the proposed merger was fair, from a financial point of view, to such holders.

The full text of the written opinion of J.P. Morgan dated February 19, 2024, which sets forth, among other things, the assumptions made, matters considered and limits on the review undertaken, is attached as Annex B to this information statement and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this information statement is qualified in its entirety by reference to the full text of such opinion. VIZIO’s stockholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the VIZIO Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the price per share to be paid to the holders of VIZIO Class A common stock (other than William Wang and his affiliates) in the proposed merger, and did not address any other aspect of the

 

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proposed merger. J.P. Morgan expressed no opinion as to (1) the fairness of any consideration to be paid in connection with the proposed merger to the holders of any other class of securities, creditors or other constituencies of VIZIO, (2) the allocation of the aggregate merger consideration to be paid to all holders of VIZIO common stock between the holders of VIZIO Class A common stock and VIZIO Class B common stock, or the relative fairness of the proposed price per share to the holders of any shares of VIZIO common stock or (3) the underlying decision by VIZIO to engage in the proposed merger. The issuance of J.P. Morgan’s opinion was approved by a fairness opinion committee of J.P. Morgan. The opinion does not constitute a recommendation to any stockholder of VIZIO as to how such stockholder should vote with respect to the proposed merger or any other matter.

In connection with preparing its opinion, J.P. Morgan, among other things:

 

•

reviewed the merger agreement;

 

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reviewed certain publicly available business and financial information concerning VIZIO and the industries in which it operates;

 

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compared the financial and operating performance of VIZIO with publicly available information concerning certain other companies J.P. Morgan deemed relevant and reviewed the current and historical market prices of VIZIO Class A common stock and certain publicly traded securities of such other companies;

 

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reviewed certain internal financial analyses and forecasts prepared by the management of VIZIO relating to its business; and

 

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performed such other financial studies and analyses and considered such other information as J.P. Morgan deemed appropriate for the purposes of its opinion.

In addition, J.P. Morgan held discussions with certain members of the management of VIZIO with respect to certain aspects of the merger, and the past and current business operations of VIZIO, the financial condition and future prospects and operations of VIZIO and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by VIZIO or otherwise reviewed by or for J.P. Morgan, and J.P. Morgan did not independently verify any such information or its accuracy or completeness and, pursuant to its engagement letter with VIZIO, J.P. Morgan did not assume any obligation to undertake any such independent verification. J.P. Morgan did not conduct or was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of VIZIO, Walmart or Merger Sub under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, J.P. Morgan assumed that they had been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of VIZIO to which such analyses or forecasts relate. J.P. Morgan expressed no view as to such analyses or forecasts or the assumptions on which they were based. J.P. Morgan also assumed that the merger and the other transactions contemplated by the merger agreement will be consummated as described in the merger agreement. J.P. Morgan also assumed that the representations and warranties made by VIZIO, Walmart and Merger Sub in the merger agreement and the related agreements were and will be true and correct in all respects material to its analysis. J.P Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to VIZIO with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on VIZIO or on the contemplated benefits of the merger.

The financial projections furnished to J.P. Morgan were prepared by the management of VIZIO. VIZIO does not publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P.

 

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Morgan’s analysis of the proposed merger, and such financial projections were not prepared with a view toward public disclosure. These financial projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of the management of VIZIO, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates. Accordingly, actual results could vary significantly from those set forth in such financial projections. For more information regarding the use of the financial projections and other forward-looking statements, see the section of this information statement captioned “—Financial Projections.”

J.P. Morgan’s opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan’s opinion noted that subsequent developments may affect J.P. Morgan’s opinion, and that J.P. Morgan does not have any obligation to update, revise or reaffirm such opinion. J.P. Morgan’s opinion is limited to the fairness, from a financial point of view, of the price per share to be paid to the holders of VIZIO Class A common stock (other than William Wang and his affiliates) in the proposed merger. J.P. Morgan also expressed no opinion as to the voting rights associated with the VIZIO Class B common stock or any governance or other rights of the holders thereof (and did not take any such rights into account in its analysis). Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors or employees of any party to the proposed merger, or any class of such persons relative to the price per share to be paid to the holders of VIZIO Class A common stock (other than William Wang and his affiliates) in the proposed merger or with respect to the fairness of any such compensation.

The terms of the merger agreement, including the price per share, were determined through arm’s length negotiations between VIZIO and Walmart, and the decision to enter into the merger agreement was solely that of the VIZIO Board. J.P. Morgan’s opinion and financial analyses were only one of the many factors considered by the VIZIO Board in its evaluation of the proposed merger and should not be viewed as determinative of the views of the VIZIO Board or the management of VIZIO with respect to the proposed merger or the price per share.

In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodology in rendering its opinion to the VIZIO Board on February 19, 2024 and contained in the presentation delivered to the VIZIO Board on such date in connection with the rendering of such opinion and this summary does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan’s analyses.

Public Trading Multiples Analysis

Using publicly available information, J.P. Morgan compared selected financial data of VIZIO with similar data for certain selected publicly traded companies engaged in the connected TV and consumer devices businesses that, for purposes of J.P. Morgan’s analysis, J.P. Morgan judged to be sufficiently similar to VIZIO’s operations and businesses or aspects thereof. The companies selected by J.P. Morgan were:

 

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Roku, Inc. (“Roku”)

 

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Sonos Inc. (“Sonos”)

 

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Xperi, Inc. (“Xperi”)

The selected companies were chosen, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analyses, may be considered sufficiently similar to those of VIZIO or aspects thereof based on business sector participation, operational characteristics and financial

 

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metrics. However, none of the selected companies reviewed are identical to VIZIO and certain of these companies have financial and operating characteristics that are materially different from those of VIZIO. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies differently than they would affect VIZIO.

Using information obtained from the selected companies’ public filings, public equity research analysts’ estimates and FactSet Research Systems as of February 12, 2024, for each of VIZIO and Roku, and as of February 16, 2024, for each of Sonos and Xperi, J.P. Morgan calculated for each selected company and for VIZIO:

 

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the ratio of such company’s firm value (which we refer to as “FV”) to the consensus equity research analyst estimates for (1) Roku’s operating platform revenue and (2) Sonos’ and Xperi’s total revenue, for each of the calendar years 2024 and 2025 (which we refer to, respectively, as “FV/24E Platform Revenue” and “FV/25E Platform Revenue”); and

 

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the ratio of such company’s FV to the consensus equity research analyst estimates for such company’s adjusted earnings before interest, taxes, depreciation and amortization, unburdened by stock-based compensation (which we refer to as “Adjusted EBITDA”), for the calendar year 2024 (which we refer to as “FV/24E Adjusted EBITDA”).

These analyses indicated a range of FV/24E Platform Revenue of 0.8x to 3.9x, a range of FV/25E Platform Revenue of 0.7x to 3.4x and a range of FV/24E Adjusted EBITDA of 6.9x to 13.9x.

Based on the results of the above analyses and other factors J.P. Morgan considered appropriate based on their experience and professional judgment, J.P. Morgan (1) derived an FV/24E Platform Revenue multiple reference range of 1.25x to 4.00x and applied that multiple reference range to VIZIO’s projected revenue from its Platform+ business for the year ending December 31, 2024, (2) derived an FV/25E Platform Revenue multiple reference range of 1.25x to 3.50x and applied that multiple reference range to VIZIO’s projected revenue from its Platform+ business for the year ending December 31, 2025 and (3) derived an FV/24E Adjusted EBITDA multiple reference range of 7.00x to 14.00x and applied that multiple reference range to VIZIO’s projected Adjusted EBITDA for the year ending December 31, 2024, in each case as reflected in the financial projections (as defined and summarized in the section of this information statement captioned “—Financial Projections”), deriving the following ranges of implied equity values per share of VIZIO Class A common stock, rounded to the nearest $0.05:

 

Metric		Implied Equity Values per Share
FV/24E Platform Revenue		$6.35 – $16.10
FV/25E Platform Revenue		$7.20 – $16.75
FV/24E Adjusted EBITDA		$4.25 – $6.65

Discounted Cash Flow Analysis

J.P. Morgan conducted a discounted cash flow analysis of VIZIO using the unlevered free cash flows that VIZIO was forecasted to generate from calendar year 2024 through 2028 based on the financial projections. J.P. Morgan calculated ranges of terminal values for VIZIO at the end of such period by applying terminal growth rates estimated by the management of VIZIO ranging from 2.0 percent to 3.0 percent to the total revenue of VIZIO during the final year of such period. The unlevered free cash flows and the range of terminal values were then discounted to present values as of December 31, 2023 using a range of discount rates from 10.75 percent to 12.75 percent, which was chosen by J.P. Morgan based on an analysis of the weighted average cost of capital of VIZIO. The ranges of present values were then added together to derive ranges of firm values for VIZIO under the financial projections, which were then adjusted by adding VIZIO’s net cash and cash equivalents of

 

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approximately $351.6 million and the value of certain unconsolidated investments of approximately $9.1 million, in each case as of December 31, 2023 (except unconsolidated investments consisting of publicly traded common stock or certain instruments convertible into publicly traded common stock, which in each case were valued as of February 16, 2024), and dividing the result by the fully diluted number of shares of VIZIO common stock outstanding, the range of which was approximately 201.0 million to approximately 202.1 million, in each case as provided by and approved for J.P. Morgan’s use by the management of VIZIO. Based on the results of this analysis, J.P. Morgan arrived at ranges of implied equity value per share of VIZIO Class A common stock, rounded to the nearest $0.05, of $8.40 to $11.15.

Miscellaneous

The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or a summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of VIZIO. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan’s analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary is identical to VIZIO. However, the companies selected were chosen because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan’s analysis, may be considered similar to those of VIZIO. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to VIZIO.

As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise VIZIO with respect to the merger and deliver an opinion to the VIZIO Board with respect to the merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with VIZIO and the industries in which it operates.

For services rendered in connection with the merger and the delivery of its opinion, VIZIO has agreed to pay J.P. Morgan a fee of approximately $25.8 million, of which $3 million became payable upon delivery of its opinion and the remainder of which is contingent and payable upon the closing of the merger. In addition, VIZIO has agreed to reimburse J.P. Morgan for reasonable expenses incurred in connection with its services, including but not limited to the fees and expenses of outside counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan’s engagement. During the two-year period preceding the date of J.P. Morgan’s opinion, neither J.P. Morgan nor its affiliates have had any material financial advisory or other material commercial or investment banking relationships with VIZIO. During the two-year period preceding the date of

 

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J.P. Morgan’s opinion, J.P. Morgan and its affiliates have had commercial or investment banking relationships with Walmart for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included acting as joint lead bookrunner on a high grade bond issuance in September 2022 and joint lead arranger and joint lead bookrunner on a revolving credit facility in April 2023. During the two-year period preceding the date of J.P. Morgan’s opinion, the aggregate fees recognized by J.P. Morgan from Walmart were approximately $4.5 million. In addition, J.P. Morgan’s commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of Walmart, for which it receives customary compensation or other financial benefits. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1.0 percent of the outstanding VIZIO Class A common stock and the outstanding common stock of Walmart. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of VIZIO or Walmart for their own account or for the accounts of customers and, accordingly, they may at any time hold long or short positions in such securities or other financial instruments.

Financial Projections

Other than in connection with our regular earnings press releases and related investor materials, we do not, as a matter of course, make public our future financial projections, due to, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, VIZIO management regularly prepares, and the VIZIO Board regularly evaluates, prospective financial information concerning our future performance as part of VIZIO management’s long-term business and strategic planning processes. In addition, VIZIO management regularly makes and reviews with the VIZIO Board updates to its business plan, including to reflect actual results and trends in our performance and the industry in which it operates.

In connection with our evaluation of a transaction with Walmart and strategic alternatives available to us (including continuing as an independent company), VIZIO management prepared and reviewed with the VIZIO Board (1) VIZIO’s long-term business plan adopted by the VIZIO Board on November 27, 2023 and (2) VIZIO’s operating budget for fiscal year 2024, adopted by the VIZIO Board on February 6, 2024. For purposes of this information statement, we refer to the VIZIO long-term plan and the 2024 operating budget, collectively, as the “financial projections.” The financial projections are summarized in the table below. In addition, the draft VIZIO long-term plan was provided to Walmart on October 8, 2023, as part of Walmart’s customary due diligence. The draft VIZIO long-term plan provided for (1) total revenue of $1,918 million, $2,122 million, $2,332 million, $2,536 million and $2,689 million in fiscal years 2024, 2025, 2026, 2027 and 2028, respectively, and (2) adjusted EBITDA of $70 million, $121 million, $178 million, $241 million and $298 million in fiscal years 2024, 2025, 2026, 2027 and 2028, respectively.

The financial projections were prepared for internal use and not for public disclosure and were provided by VIZIO management to the VIZIO Board for the purposes of considering, analyzing and evaluating the merger and other strategic alternatives available to us. The unaudited prospective financial information for our fiscal year 2024 included in the 2024 operating budget and the unaudited prospective financial information for fiscal years 2025 through 2028 included in the VIZIO long-term plan was also provided to, and approved by the VIZIO Board for use and reliance by, J.P. Morgan, our financial advisor, in connection with its financial analyses and opinion to the VIZIO Board, as described in more detail in the section of this information statement captioned “—Opinion of J.P. Morgan Securities LLC.” In addition, as described in the section of this information statement captioned “—Background of the Merger,” the financial projections were provided to, and discussed with, Walmart as part of its due diligence review. For more information on the preparation and use of the financial projections, please see the section of this information statement captioned “—Background of the Merger.”

The financial projections were developed by VIZIO management as then-current estimates of our future financial performance as an independent company. The financial projections do not give effect to the merger, including (1) any impact of the negotiation or execution of the merger agreement or the merger, (2) the expenses that have already been, and will be, incurred in connection with completing the merger or (3) any changes to our

 

48

operations or strategy that may be implemented in connection with the pendency, or following the consummation, of the merger. The financial projections also do not consider the effect of any failure of the merger to be completed and the financial projections should not be viewed as accurate or continuing in that context.

The financial projections constitute forward-looking statements. The financial projections are not included in this information statement to influence any decision on whether to seek appraisal for shares of our common stock or any other matter, but rather are included in this information statement to give our stockholders access to certain non-public information that was provided to the VIZIO Board, J.P. Morgan and Walmart, as applicable, for the purposes described above. By including the financial projections in this information statement, none of us, the VIZIO Board, the Transactions Committee, J.P. Morgan or any other person has made or makes any representation to any person regarding our ultimate performance as compared to the information contained in the financial projections. The inclusion of the financial projections should not be regarded as an indication that us, the VIZIO Board, the Transactions Committee, J.P. Morgan or any other person considered, or now considers, them to be necessarily predictive of actual future results, and such information should not be relied on as such. Further, the inclusion of the financial projections in this information statement does not constitute an admission or representation by us that the information presented is material.

The financial projections were not prepared with a view toward public disclosure or complying with U.S. generally accepted accounting principles (which we refer to as “GAAP”). In addition, the financial projections were not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information. The financial projections were prepared by, and are the responsibility of, VIZIO management. Our independent registered public accounting firm, KPMG LLP, has not audited, reviewed, examined, compiled or applied agreed-upon procedures with respect to the financial projections and, accordingly, KPMG LLP does not express an opinion or any other form of assurance with respect thereto. The report of KPMG LLP incorporated by reference into this information statement relates solely to our previously issued financial statements. It does not extend to the financial projections and should not be read to do so.

Although the financial projections are presented with numerical specificity, they reflect numerous assumptions, estimates and uncertainties as to future events made by VIZIO management that VIZIO management believed in good faith were reasonable at the time that the financial projections were prepared, including with respect to: (1) macroeconomic factors; (2) geopolitical, market, industry, customer and competitive trends in our business and the consumer electronics industry generally; (3) our technology, product development and device and platform content offerings; (4) advertiser relationships; (5) our capital requirements; (6) our sales strategy and seasonal fluctuations in consumer demand; (7) our addressable market and market share; (8) our brand and reputation; and (9) other relevant operating and financial measures. Our ability to achieve the financial results contemplated by the financial projections will be affected by our ability to achieve our strategic goals, objectives and targets over the applicable periods, and will be subject to operational and execution risks associated therewith. The financial projections reflect assumptions as to certain business decisions that are subject to change. Important factors that may affect actual results and cause the financial projections not to be achieved can be found in the risk factors included in our periodic filings with the SEC. These factors are difficult to predict, and may be outside of our control. As a result, there can be no assurance that the financial projections will be realized, and our actual results may be materially better or worse than those implied by the financial projections. For information on factors that may cause our future results to materially vary, see the section of this information statement captioned “Forward-Looking Statements.” The financial projections may differ from publicized analyst estimates and forecasts. Stockholders should evaluate the financial projections, if at all, in conjunction with our historical financial statements and other information regarding us contained in our public filings with the SEC. The financial projections may not be consistent with our historical operating data as a result of the assumptions utilized in preparing such information.

The financial projections have not been updated or revised to reflect information or results either as of or after the date of this information statement. Except to the extent required by applicable federal securities laws, we do

 

49

not intend to update or otherwise revise the financial projections to reflect circumstances existing after the date that such information was prepared or to reflect the occurrence of future events. We may have reported, and may continue to report, results of operations for periods included in the financial projections that were or will be completed following the preparation of the financial projections. Stockholders and investors are urged to refer to our periodic filings with the SEC for information on actual historical results.

Because the financial projections reflect estimates and judgments, they are susceptible to sensitivities and assumptions, as well as to multiple interpretations based on actual experience and business developments. The financial projections also cover multiple years, and such information by its nature becomes less predictive with each succeeding year. The financial projections are not, and should not be considered to be, a guarantee of future operating results. Further, the financial projections are not fact and should not be relied upon as being necessarily indicative of our future results or for purposes of making any investment decision.

Certain of the financial measures included in the financial projections are non-GAAP financial measures (which we refer to as “non-GAAP financial measures”). These are financial performance measures that are not calculated in accordance with GAAP. These non-GAAP financial measures should not be viewed as a substitute for GAAP financial measures, and may be different from similarly titled non-GAAP financial measures used by other companies. Furthermore, there are limitations inherent in non-GAAP financial measures because they exclude charges and credits that are required to be included in a GAAP presentation. Accordingly, these non-GAAP financial measures should be considered together with, and not as an alternative to, financial measures prepared in accordance with GAAP.

Financial measures included in forecasts provided to a financial advisor and a board of directors in connection with a business combination transaction, such as the financial projections, are excluded from the definition of “non-GAAP financial measures” under applicable SEC rules and regulations. As a result, the financial projections are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Reconciliations of non-GAAP financial measures were not provided to or relied upon by the VIZIO Board, the Transactions Committee, J.P. Morgan or any other person. Accordingly, no reconciliation of the financial measures included in the financial projections is provided in this information statement.

 

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The following table summarizes the unaudited prospective financial information for our fiscal year 2024 included in the 2024 operating budget and the unaudited prospective financial information for fiscal years 2025 through 2028 included in the VIZIO long-term plan. VIZIO management made various estimates and assumptions when preparing the financial projections, including: (1) year-over-year growth in Total Revenue of 7.3 percent in fiscal year 2024 and a compound annual growth rate for Total Revenue of 8.3 percent from fiscal years 2025 through 2028, driven by compound annual growth rates of 4.1 percent for Device Revenue and 13.7 percent for Platform+ Revenue from fiscal years 2025 through 2028; (2) average Total Gross Profit margin expansion from 23.9 percent in fiscal year 2024 to 26.1 percent in fiscal year 2028; and (3) Adjusted EBITDA margin expansion from 3.8 percent in fiscal year 2024 to 11.1 percent in fiscal year 2028.

 

		Fiscal Year Ending December 31,
(dollars in millions)		2024E(3)				2025E				2026E				2027E				2028E(4)
Device Revenue		$	1,073			$	1,253			$	1,321			$	1,386			$	1,414
Platform+ Revenue		$	729			$	869			$	1,012			$	1,152			$	1,279
Total Revenue		$	1,802			$	2,122			$	2,333			$	2,538			$	2,692
Device Gross Profit			(23	)			(33	)			(35	)			(37	)			(37	)
Platform+ Gross Profit			431				512				591				669				739
Total Gross Profit		$	408			$	479			$	556			$	633			$	702
Adjusted EBITDA(1)		$	69			$	120			$	177			$	241			$	298
Stock-Based Compensation Expense		$	53			$	58			$	62			$	66			$	68
Taxes		$	1			$	12			$	25			$	40			$	53
Capital Expenditures		$	5			$	6			$	7			$	8			$	8
Change in Net Working Capital		$	(36	)		$	(12	)		$	(12	)		$	(13	)		$	(14	)
Unlevered Free Cash Flow(2)		$	(27	)		$	32			$	71			$	115			$	155

 

(1)	Adjusted EBITDA is defined as GAAP Gross Profit, subtracting Operating Expenses and adding back Depreciation & Amortization Expenses and Stock-Based Compensation Expenses.

(2)	Unlevered Free Cash Flow is calculated as Adjusted EBITDA (as defined above), subtracting Stock-Based Compensation Expenses, Taxes and Capital Expenditures and adding (or subtracting) change in Net Working Capital.

(3)	Unaudited prospective financial information for VIZIO’s fiscal year 2024 included in the VIZIO long-term plan consisted of Total Revenue of approximately $1,918 million, Total Gross Profit of approximately $403 million and Adjusted EBITDA of approximately $69 million.

(4)

For purposes of J.P. Morgan’s opinion and financial analyses, VIZIO management provided J.P. Morgan with, and J.P. Morgan used, with the approval of the VIZIO Board, terminal year unaudited prospective financial information consisting of Total Revenue of approximately $2,760 million, Total Gross Profit of approximately $771 million, Adjusted EBITDA of approximately $357 million and Unlevered Free Cash Flow of approximately $204  million.

Holdback Agreements

Simultaneously with the execution of the merger agreement, Mr. Wang, our Chief Executive Officer, certain of Mr. Wang’s related trusts, and Ben Wong, our Chief Operating Officer, in their respective capacities as stockholders of VIZIO, have each entered into a holdback agreement with Walmart. Pursuant to the holdback agreements, Messrs. Wang (acting in his personal capacity and in his capacity as trustee of his related trusts) and Wong have agreed that a portion of the after-tax merger consideration that would otherwise be payable to them as a result of the merger will be placed into a third-party escrow account to be released to them over time, subject to, and in accordance with, the terms and conditions of the holdback agreements. The release of such amounts is contingent on the stockholder’s continued employment with Walmart or any of its subsidiaries, affiliates and their respective successors and assigns; provided, however, that if on or prior to the third anniversary of the effective time of the merger, the stockholder’s employment with the applicable Walmart employer is terminated without cause (as defined in the holdback agreements), by the stockholder for good reason (as defined in the holdback agreements), or due to the stockholder’s death or disability (as defined in the holdback agreements), the full amount remaining in the third-party escrow account will be released back to the stockholder. In the aggregate, Mr. Wang and his related trusts have agreed to a holdback of $100 million of their collective after-tax merger consideration, and Mr. Wong has agreed to a holdback of $6 million of his after-tax merger consideration.

 

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Interests of VIZIO’s Directors and Executive Officers in the Merger

You should be aware that our directors and executive officers have interests in the merger that are different from, or in addition to, the interests of our stockholders. In (1) evaluating and negotiating the merger agreement, (2) approving the merger agreement and the merger, and (3) recommending that the merger agreement be adopted by our stockholders, the VIZIO Board was aware of and considered these interests to the extent that they existed at the time, among other matters. These interests are more fully described below.

Insurance and Indemnification of Directors and Executive Officers

Pursuant to the terms of the merger agreement, our directors and officers will be entitled to certain ongoing indemnification and insurance coverage, including under directors’ and officers’ liability insurance policies. For more information, see the section of this information statement captioned “The Merger Agreement—Indemnification and Insurance.”

VIZIO Equity Interests

Treatment of VIZIO Equity Awards

As of February 15, 2024, there were outstanding VIZIO options covering an aggregate of 14,051,566 shares of our Class A common stock, with outstanding VIZIO options held by our executive officers covering an aggregate of 6,524,220 shares. As of the same date, outstanding VIZIO options with a per share exercise price less than the price per share (which we refer to as “in-the-money VIZIO options”) covered an aggregate of 12,538,886 shares of our Class A common stock, with outstanding in-the-money VIZIO options held by our executive officers covering an aggregate of 5,771,704 shares. As of February 15, 2024, there were no outstanding VIZIO options held by our non-employee directors, and there were no options to purchase shares of our Class B common stock.

Under the merger agreement, VIZIO options will generally be treated as follows:

 

•

at the effective time of the merger, each cashed-out VIZIO option will be cancelled in exchange for the right to receive an amount in cash equal to the product of (1) the total number of shares of our common stock covered by the cashed-out VIZIO option, multiplied by (2) the excess of (i) the price per share over (ii) the per share exercise price of the cashed-out VIZIO option, subject to applicable withholding taxes;

 

•

at the effective time of the merger, each cancelled VIZIO option will be cancelled for no consideration; and

 

•

effective as of immediately before the effective time of the merger, each director option that is then outstanding and unvested will accelerate vesting in full.

As of February 15, 2024, there were outstanding VIZIO RSUs covering an aggregate of 13,932,111 shares of our Class A common stock, of which VIZIO RSUs covering an aggregate of 74,363 and 3,100,879 shares of our Class A common stock were held by our current non-employee directors and current executive officers, respectively. These numbers reflect achievement of the performance goals for performance-based VIZIO RSUs (which we refer to as “VIZIO PSUs”) at target levels. If the performance goals are achieved at the maximum levels, the outstanding VIZIO RSUs would cover an aggregate of 15,586,003 shares of our Class A common stock, of which VIZIO RSUs covering an aggregate of 4,223,003 shares of our Class A common stock would be held by our current executive officers (and none would be held by our current non-employee directors). As of February 15, 2024, there were no outstanding VIZIO RSUs covering shares of our Class B common stock.

Under the merger agreement, VIZIO RSUs will generally be treated as follows:

 

•

at the effective time of the merger, each vested VIZIO RSU will be cancelled in exchange for the right to receive an amount in cash equal to the product of (1) the price per share, multiplied by (2) the total

 

52

number of shares of VIZIO common stock covered by the vested VIZIO RSU, subject to applicable withholding taxes;

 

•

at the effective time of the merger, each cancelled VIZIO RSU award will be cancelled for no consideration;

 

•

effective as of immediately before the effective time of the merger, each director RSU that is then outstanding and unvested will be accelerated and vested in full; and

 

•

the merger agreement provides that, on or promptly after the closing date of the merger, except as otherwise provided in the merger agreement, Walmart will grant a Walmart RSU award under Walmart’s Stock Incentive Plan of 2015 and its standard form of restricted stock unit agreement to each continuing employee who held a cancelled VIZIO award. Each Walmart RSU award will have a grant date fair value (determined in accordance with U.S. generally accepted accounting principles) equal to the product of (1) the total number of shares of VIZIO common stock covered by the corresponding cancelled VIZIO award, multiplied by (2) the excess of (i) the price per share over (ii) the per share exercise price of that cancelled VIZIO award, if any. Except as agreed between Walmart and any continuing employee, each Walmart RSU award will have the same vesting schedule as the cancelled VIZIO award (including any acceleration provisions), except that the regular time-based vesting of each tranche of a Walmart RSU award will occur on a Walmart monthly vesting date in the same month that the corresponding tranche of the corresponding cancelled VIZIO award would have vested under the regular time-based vesting schedule that applied to that tranche, subject to the continuing employee’s continued service with Walmart or any of its subsidiaries.

Equity Interests of VIZIO’s Directors and Executive Officers

The following table sets forth, for each person who has been a director or executive officer of VIZIO at any time since the beginning of our fiscal year ended December 31, 2023, (1) the number of shares of our common stock beneficially held, (2) the number of shares of our common stock underlying his or her VIZIO RSUs, and (3) the number of shares of our common stock underlying in-the-money VIZIO options, in each case expected to be held on the closing date of the merger, assuming the following and the additional assumptions in the footnotes to the table:

 

•

February 15, 2024, as the date of the closing of the merger (solely for purposes of this information statement); and

 

•

the number of outstanding shares of our Class A common stock and the number of shares underlying outstanding VIZIO RSUs and in-the-money VIZIO options for each executive officer and director on the closing date of the merger is equal to the number of outstanding shares of our Class A common stock and the number of shares underlying outstanding VIZIO RSUs and in-the-money VIZIO options as of February 15, 2024, and do not reflect any issuances, exercises, settlements, transfers, deferrals, forfeitures, or sales of any shares or VIZIO equity awards that have occurred or may occur following February 15, 2024.

 

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Name		VIZIO Shares(1)								VIZIO RSUs(2)(4)								In-the-Money VIZIO Options(3)(4)
		Number of Shares (#)				Value ($)				Number of Underlying Shares (#)				Value ($)				Number of Underlying Shares (#)				Value ($)				Total ($)
William Wang(5)			755,492				8,688,158				1,898,000				21,827,000				1,025,136				2,972,894				33,488,052
Ben Wong			2,605,275				29,960,663				847,286				9,743,789				3,032,220				21,481,368				61,185,820
Adam Townsend			195,957				2,253,506				676,176				7,776,024				851,912				2,497,995				12,527,525
Michael O’Donnell			69,961				804,552				666,887				7,669,201				862,436				3,668,265				12,142,018
John R. Burbank			43,614				501,561				14,577				167,636				—				—				669,197
Vicky L. Free			47,208				542,892				14,577				167,636				—				—				710,528
Julia S. Gouw			69,385				797,928				14,577				167,636				—				—				965,564
R. Michael Mohan			19,012				218,638				16,055				184,633				—				—				403,271
David Russell(6)			80,420				924,830				14,577				167,636				—				—				1,092,466

 

(1)

Represents shares of VIZIO Class A common stock beneficially owned by the individual as of February 15, 2024. These numbers do not include any shares of Class A common stock that may be issued upon exercise of VIZIO options or in settlement of vested VIZIO RSUs after that date. For additional information regarding beneficial ownership of our common stock, see the section of this information statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

(2)	Represents outstanding VIZIO RSUs held by the individual as of February 15, 2024. The values shown with respect to VIZIO RSUs are determined as the product of (i) the total number of shares of our Class A common stock underlying the VIZIO RSUs, multiplied by (ii) the price per share.

The VIZIO PSUs held by our executive officers become eligible to vest (which we refer to as “eligible VIZIO PSUs”) based on how VIZIO’s total shareholder return during a one-year performance period ending on June 1, 2024, compares to the total shareholder returns of certain companies during that performance period, and any eligible VIZIO PSUs are subject to a time-based vesting schedule of approximately four years from the date the VIZIO PSUs were granted. If there is a change in control before the last day of the performance period, the performance period will be shortened so that it ends before the change in control, and the number of eligible VIZIO PSUs will be determined based on actual performance during the shortened performance period. However, the change in control will not change the dates that the eligible VIZIO PSUs vest under the time-based vesting schedule.

As of February 15, 2024, the one-year performance period would not yet have ended, and based on actual performance through that date, the performance goal for our executive officers’ VIZIO PSUs would have been achieved at 188 percent. Accordingly, the numbers of underlying shares and the corresponding values reported in the “VIZIO RSUs” section of the table above assume that the performance goal for our executive officers’ VIZIO PSUs is achieved at that level. However, if the performance goal is achieved at the target level, the number of VIZIO RSUs and the value of the underlying shares that would be reported in that section would be (i) for Mr. Wang, 525,784 VIZIO RSUs with a value of $6,046,516, (ii) for Mr. Wong, 237,452 VIZIO RSUs with a value of $2,730,698, (iii) for Mr. Townsend, 155,360 VIZIO RSUs with a value of $1,786,640, and (iv) for Mr. O’Donnell, 203,528 VIZIO RSUs with a value of $2,340,572. If the performance goal is achieved at the maximum level, the number of VIZIO RSUs and the value of the underlying shares that would be reported in that section would be (i) for Mr. Wang, 1,051,568 VIZIO RSUs with a value of $12,093,032, (ii) for Mr. Wong, 474,904 VIZIO RSUs with a value of $5,461,396, (iii) for Mr. Townsend, 310,720 VIZIO RSUs with a value of $3,573,280, and (iv) for Mr. O’Donnell, 407,056 VIZIO RSUs with a value of $ $4,681,144.

(3)

Represents outstanding VIZIO options held by the individual as of February 15, 2024, including both the portions of the VIZIO options that are expected to be vested and unvested as of the assumed closing date. The values shown with respect to VIZIO options are determined as the product of (i) the total number of underlying shares covered by that portion of the VIZIO option, multiplied by (ii) the price per share minus the per share exercise price of the VIZIO option. The expected number of shares underlying the vested and unvested portions of the VIZIO options as of the assumed closing date and the value of those portions of the VIZIO option are as follows:

 

Name		Vested In-the-Money VIZIO Options								Unvested In-the-Money VIZIO Options
		Number of Underlying Shares (#)				Value ($)				Number of Underlying Shares (#)				Value ($)
William Wang			256,284				743,224				768,852				2,229,671
Ben Wong			2,708,805				20,543,465				323,415				937,904
Adam Townsend			487,478				1,434,274				364,434				1,063,721
Michael O’Donnell			615,119				2,946,121				247,317				722,145

 

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(4)

As described further in the sections of this information statement captioned “—Treatment of VIZIO Equity Awards” and “—Change in Control and Severance Benefits under Existing Agreements—Non-Employee Director Equity Awards,” any then-outstanding VIZIO RSUs held by our non-employee directors will accelerate vesting in full immediately before the effective time of the merger.

In addition, as described further in the section of this information statement captioned “—Change in Control and Severance Benefits under Existing Agreements—Change in Control and Severance Agreements,” each of our executive officers is eligible for vesting acceleration of his VIZIO equity awards in connection with certain qualifying terminations (as defined below) of employment under his change in control and severance agreement. The figures in the table above assume that, before the effective time of the merger, none of the executive officers will experience a qualifying termination under his severance agreement that entitles him to receive that vesting acceleration.

(5)

Does not include 76,180,453 shares of our Class B common stock indirectly beneficially owned by Mr. Wang, including 63,890,333 shares of our Class B common stock held of record by Mr. Wang, as trustee of The William W. Wang Separate Property Trust; 5,712,871 shares of our Class B common stock held of record by Mr. Wang and Sakura Wang (Mr. Wang’s spouse), as trustees of the Wang Family Trust; 1,836,205 shares of our Class B common stock held of record by Mr. Wang, as trustee of the W. Wang 2022 GRAT (March 8, 2022); or 4,741,044 shares of our Class B common stock held of record by Mr. Wang, as trustee of the W. Wang 2023 GRAT (February 22, 2023). See the section of this information statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

(6)

Does not include 2,806,542 shares of our Class A common stock indirectly beneficially owned by Mr. Russell, including 270,000 shares of our Class A common stock held of record by the David E. Russell Grantor Retained Annuity Trust, of which Mr. Russell is trustee, and 2,536,542 shares of our Class A common stock held by T Russ-D LLC, a limited liability company held in a trust of which Mr. Russell is trustee. See the section of this information statement captioned “Security Ownership of Certain Beneficial Owners and Management.”

Change in Control and Severance Benefits under Existing Agreements

Non-Employee Director Equity Awards

Our non-employee directors hold outstanding VIZIO RSUs that were granted under the Amended and Restated 2017 Incentive Award Plan (which we refer to as the “2017 Plan”). The 2017 Plan and our Outside Director Compensation Policy (which we refer to as the “outside director compensation policy”) each provide that in the event of a change in control, each non-employee director will fully vest in and have the right to exercise his or her outstanding equity awards and, with respect to equity awards with performance-based vesting, unless specifically provided otherwise under the applicable award agreement, a VIZIO policy applicable to the non-employee director, or other written agreement between the non-employee director and VIZIO, all performance goals or other vesting criteria will be deemed achieved at 100 percent of target levels and all other terms and conditions met. The closing of the merger will constitute a change in control within the meaning of the 2017 Plan and the outside director compensation policy.

Change in Control and Severance Agreements

We have entered into change in control and severance agreements with each of our executive officers (which we refer to as the “severance agreements”), under which our executive officers are eligible to receive certain severance and change in control payments and benefits, as described below.

Under each executive officer’s severance agreement, if the executive officer’s employment is terminated by us or any of our subsidiaries for a reason other than cause, death or disability or by the executive officer for good reason (which termination we refer to as a “qualifying termination”) and the qualifying termination during the period beginning 3 months before a change in control and ending 18 months following that change in control (which we refer to as the “change-in-control period”), the executive officer will receive the following severance payments and benefits if such officer timely signs and does not revoke a release of claims in our favor:

 

•

a lump sum payment equal to 18 months of the executive officer’s annual base salary as in effect immediately prior to such termination (or if such termination is due to a resignation for good reason based on a material reduction in base salary, then as in effect immediately prior to the reduction) or if greater, at the level in effect immediately prior to the change in control);

 

•

a lump sum payment equal to 150 percent of the executive officer’s target annual bonus as in effect for the fiscal year in which the termination occurs;

 

55

•

our payment of premiums for coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (which we refer to as “COBRA”), for the executive officer and such officer’s eligible dependents, if any, for up to 18 months, or taxable monthly payments for the equivalent period in the event payment of the COBRA premiums would violate or be subject to an excise tax under applicable law; and

 

•

accelerated vesting and exercisability as to 100 percent of the then-unvested shares subject to all of the executive officer’s outstanding equity awards and, in the case of an equity award with performance-based vesting, all performance goals and other vesting criteria generally will be deemed achieved at the greater of actual achievement (if determinable) or 100 percent of target levels.

Under each executive officer’s severance agreement, if the executive officer experiences a qualifying termination outside of the change-in-control period, the executive officer will receive the following severance payment and benefit if such officer timely signs and does not revoke a release of claims in our favor:

 

•

a lump-sum payment equal to the executive officer’s annual base salary as in effect immediately prior to such termination (or if such termination is due to a resignation for good reason based on a material reduction in base salary, then as in effect immediately prior to the reduction) for a period of 12 months; and

 

•

our payment of premiums for coverage under COBRA for the executive officer and his eligible dependents, if any, for up to a period of 12 months, or taxable monthly payments for the equivalent period in the event payment of the COBRA premiums would violate or be subject to an excise tax under applicable law.

If any of the amounts provided for under an executive officer’s severance agreement or otherwise payable to the executive officer would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and could be subject to the related excise tax, the executive officer would be entitled to receive either full payment of those payments and benefits or a lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to the executive officer. The severance agreements do not require us to provide any tax gross-up payments.

Under each executive officer’s severance agreement, “cause” means the executive officer has:

 

•

been convicted of or pled guilty or no contest to a felony under federal or state law, or of a misdemeanor involving fraud, moral turpitude or embezzlement;

 

•

committed an intentional act of fraud, embezzlement, theft, dishonesty or any intentional material violation of law that occurs during or in the course of employment with us or any of our subsidiaries, including any material violation of any securities law, which has or may reasonably be expected to result in economic or financial injury, or have a material adverse effect upon, us or any of our subsidiaries;

 

•

intentionally disclosed confidential or proprietary information of ours or any of our subsidiaries contrary to the executive officer’s employment agreement, the employee proprietary information and inventions agreement, or our policies or any of our subsidiaries’ policies or in breach of any nondisclosure or confidentiality agreement between the executive officer and us or any of our subsidiaries;

 

•

breached the executive officer’s material obligations under the executive officer’s employment agreement or the executive officer’s employee proprietary information and inventions agreement;

 

•

intentionally engaged in any competitive activity that would constitute a breach of obligations under the executive officer’s employee proprietary information and inventions agreement;

 

56

•

intentionally breached any of our material written policies or those of our subsidiaries, such as a code of conduct or employee handbook;

 

•

failed to substantially perform the lawful duties and responsibilities for us or any of our subsidiaries under the executive officer’s employment agreement (other than as a result of incapacity due to physical or mental illness, or any such actual or anticipated failure after the executive officer’s issuance of a notice of termination for good reason); or

 

•

willfully engaged in conduct that is demonstrably and materially injurious to us or any of our subsidiaries, monetarily or otherwise.

In order for the executive officer’s termination to be for “cause” in the case of the third through eighth bullets above, the executive officer must have received written demand from us or an applicable subsidiary of ours or the VIZIO Board for substantial performance that specifically identifies the conduct giving rise to the “cause” and the executive officer must not have cured the same within 30 business days of the executive officer’s receipt of such notice (or, if able to be cured and the cure reasonably requires longer than 30 business days, then within such longer reasonable period, as long as the executive officer promptly undertakes action to cure and diligently pursues the same until cured). However, with respect to subsequent identical or substantially similar failures, the right to cure will only extend to the first such failure. In Mr. Wang’s case, the termination of his employment will not be deemed to be for “cause” unless and until there has been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than two-thirds of the entire membership of the VIZIO Board at a meeting of our board of directors called and held for such purpose (after reasonable notice is provided to Mr. Wang and he is given an opportunity, together with his counsel, to be heard before the VIZIO Board), finding that, in the good faith opinion of our board of directors, Mr. Wang is guilty of any of the conduct above, and specifying the particulars thereof in detail.

For purposes of “cause,” an executive officer’s act or failure to act will not be considered “willful” unless it is done, or omitted to be done, in bad faith or without reasonable belief that the action or omission was in the best interests of the VIZIO group. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the VIZIO Board or based upon the advice of counsel for VIZIO will be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the VIZIO group.

Under each executive officer’s severance agreement, “good reason” means the termination of the executive officer’s employment with us or our subsidiaries by the executive officer after the occurrence of one or more of the following events without the executive officer’s express written consent:

 

•

the material reduction, without the executive officer’s consent, in the executive officer’s base salary (other than a reduction in base salary implemented as part of a decrease of base compensation of all our officers or its applicable subsidiary, and then by no greater percentage as the percentage decrease in the base compensation of all such officers);

 

•

the material diminution, without the executive officer’s consent, of the executive officer’s authority, duties, responsibilities, or title (other than a temporary suspension of authority, duties or responsibilities due to the executive officer’s illness or disability, or an investigation of misconduct), or the assignment to the executive officer, without the consent of the executive officer, of any duties materially inconsistent with the executive officer’s position, authority, duties or responsibilities (including status, offices, titles and reporting requirements);

 

•

a material breach by us or our applicable subsidiary of the executive officer’s employment agreement;

 

•

the failure of any successor to us (whether by merger, acquisition, consolidation, reorganization or otherwise) to assume, upon the successor becoming such, our obligations under the severance agreement; and/or

 

•

a material change in the geographic location of the executive officer’s principal place of employment to a location more than 50 miles from our Irvine, California offices.

 

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For purposes of interpreting the second bullet above, following a change in control, the executive officer will have experienced a material diminution in such officer’s “authority, duties or responsibilities” if such officer does not serve in the capacity with titles and offices of the ultimate parent entity that are comparable to those set forth in the executive officer’s employment agreement and such officer’s duties or authority is not customary for that position (or an equivalent position, and the duties and authority customary for that position).

The executive officer’s resignation will only constitute a resignation for good reason under the executive officer’s severance agreement if (1) the executive officer provides us or our applicable subsidiary with a written notice of termination within 60 days following the initial existence of the action or event that the executive officer believes gives rise to good reason, (2) we or our applicable subsidiary have failed to cure the same within 30 business days of its receipt of such notice (or, if able to be cured and the cure reasonably requires longer than 30 business days, then within such longer reasonable period, as long as we or our applicable subsidiary promptly undertakes action to cure and diligently pursues the same until cured), and (3) the date of termination occurs no later than 110 days after the later of (i) the initial occurrence of the action or event constituting good reason or (ii) the date on which the executive officer learns or reasonably should have learned of such action or event (but in no event later than 2 years after the initial occurrence of the action or event constituting good reason). We or our applicable subsidiary may relieve the executive officer of some or all of such officer’s authority, duties and responsibilities during any notice period, and such relief will not serve as a basis for the executive officer to claim “good reason.”

Legal Fees

The VIZIO Board (or the compensation committee of the VIZIO Board) has authorized VIZIO to pay the fees of independent legal counsel to Messrs. Wang, Wong and Townsend in connection with the merger and the transactions contemplated by the merger agreement.

Employment Arrangements Following the Merger

Walmart Offer Letter with William Wang

On February 19, 2024, Mr. Wang and Walmart entered into an offer letter that becomes effective on the closing date of the merger, subject to the completion of the merger. Under the offer letter, Mr. Wang will be employed as CEO of VIZIO at Walmart. The offer letter provides that Mr. Wang’s base salary will be $995,000 and his target incentive opportunity will be $825,000 (with his incentive award to be reduced based on bonus amounts already paid to him by us for the fiscal year as of the closing of the merger).

In addition, as soon as administratively possible after the closing of the merger, Mr. Wang will receive a one-time grant of transition Walmart time-based restricted stock units that are designed to replace his cancelled VIZIO awards. Mr. Wang’s transition time-based restricted stock units will vest over 4 years (with vesting occurring in the same month and year that the corresponding portion of his cancelled VIZIO awards would have vested had they not been terminated in connection with the closing of the merger), subject to his continued employment with Walmart, except as provided under his VIZIO severance agreement as amended.

Under Mr. Wang’s offer letter with Walmart, his severance agreement with us (as described above) will be amended so that (1) he will be eligible to receive only the vesting acceleration for a qualifying termination during the change-in-control period, which only applies to the transition time-based restricted stock units and not to any other Walmart equity awards or compensation, (2) he will not be eligible to receive any severance payments or benefits under his severance agreement, other than acceleration of the transition time-based restricted stock units in connection with a qualifying termination during the change-in-control period, including any severance payments or benefits for a qualifying termination that occurs outside of the change-in-control period, and (3) the definitions of “cause” and “good reason” will be replaced with the definitions described below.

 

58

As a result of the amendment of Mr. Wang’s severance agreement, for purposes of the severance agreement, “cause” will mean his termination of employment by Walmart or one of its controlled affiliates (which we refer to as the “Walmart group”) due to:

 

•

intentional or grossly negligent unauthorized misuse of any trade secrets or proprietary information of any Walmart group member thereof;

 

•

conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude;

 

•

committing an act of fraud against any Walmart group member;

 

•

gross negligence or willful misconduct that has had, will have or would reasonably be expected to have an adverse effect on any Walmart group member’s reputation or business;

 

•

violation of any written Walmart policy that has been provided to him if such violation is not cured (to the extent curable) within 30 days following written notification by Walmart of such violation;

 

•

willful and repeated failure or refusal to attempt to perform his duties to the applicable Walmart group member if such failure is not cured (to the extent curable) within 30 days following written notification by the applicable Walmart group member of such failure; or

 

•

material breach of the nondisclosure and restricted use agreement, the non-competition, non-solicitation and no-hire agreement, or the proprietary information and inventions agreement with a Walmart group member, if such breach is not cured (to the extent curable) within 30 days following written notification by the applicable Walmart group member of such breach.

As a result of the amendment of Mr. Wang’s severance agreement, for purposes of the severance agreement, “good reason” will mean the termination of Mr. Wang’s employment with all Walmart group members by him in accordance with the following paragraph after the occurrence of one or more of the following events without Mr. Wang’s express written consent: (1) the material reduction, without his consent, of the salary offered by Walmart to him in his Walmart offer letter, (2) a material change in the geographic location of his principal place of employment to a location more than 50 miles from his current work location of record (made available to the Walmart group), or (3) a material breach by any Walmart group member of the offer letter.

Mr. Wang’s resignation will only constitute a resignation for good reason under his severance agreement if (1) he provides Walmart with a written notice of termination within 60 days following the initial existence of the action or event that he believes gives rise to good reason, (2) the applicable Walmart group member has failed to cure the action or event within 30 business days of its receipt of such notice (or, if able to be cured and the cure reasonably requires longer than 30 business days, then within such longer reasonable period, if the applicable Walmart group member promptly undertakes action to cure and diligently pursues the same until cured), and (3) the date of termination occurs no later than 110 days after the later of (i) the initial occurrence of the action or event constituting good reason or (ii) the date on which Mr. Wang learns or reasonably should have learned of such action or event. The applicable Walmart group member may relieve Mr. Wang of some or all of his authority, duties and responsibilities during any notice period, and such relief will not serve as a basis for Mr. Wang to claim “good reason.”

Walmart Offer Letter with Ben Wong

On February 19, 2024, Mr. Wong and Walmart entered into an offer letter that becomes effective on the closing date of the merger, subject to the completion of the merger. Under the offer letter, Mr. Wong will be employed as President and COO of VIZIO at Walmart. The offer letter provides that Mr. Wong’s base salary will be $970,000, his target incentive opportunity will be $780,000 (with his incentive award to be reduced based on bonus amounts already paid to him by VIZIO for the fiscal year as of the closing of the merger), and that he has an annual equity award target value of $850,000.

 

59

In addition, as a new officer of Walmart, Mr. Wong will receive the following Walmart equity awards: (1) an initial equity award of time-based restricted shares with a target value of $850,000 (or $1,275,000 if the closing of the merger occurs between April 1, 2024, and December 30, 2024), which will be granted within one month after the closing of the merger and will vest monthly over a three-year period, (2) an award of performance-based restricted stock units with a target value of $425,000, which will be granted within one month after the closing of the merger and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2025, (3) an award of performance-based restricted stock units with a target value of $425,000, which will be granted in April 2025 and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2026, and (4) if the closing of the merger occurs between April 1, 2024, and December 30, 2024, an award of performance-based restricted stock units with a target value of $425,000, which will be granted in April 2026 and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2027. The number of shares of Walmart common stock to be covered by each of these equity awards will be determined by dividing the target value by the closing price of Walmart common stock on the date of grant.

As soon as administratively possible after the closing of the merger, Walmart will also grant Mr. Wong (1) a one-time grant of transition Walmart time-based restricted stock units that are designed to make up for his cancelled VIZIO awards and (2) an additional grant of Walmart performance-based restricted stock units with a value of $5,500,000. These performance-based restricted stock units will vest 66 percent on the 2-year anniversary of the closing of the merger and 34 percent on the 3-year anniversary of the closing of the merger, subject to the achievement of VIZIO Platform+ revenues of $975.2 million in 2025 or the sale of 5.75 million VIZIO SmartCast units in 2025. Mr. Wong’s transition time-based restricted stock units will vest over 3 years according to the following schedule:

 

•

to the extent his corresponding cancelled VIZIO awards would have vested in the 12 months following the closing of the merger, the transition time-based restricted stock units will vest on the 1-year anniversary of the closing of the merger;

 

•

to the extent his corresponding cancelled VIZIO awards would have vested 12 to 24 months following the closing of the merger, the transition time-based restricted stock units will vest on the 2-year anniversary of the closing of the merger; and

 

•

to the extent his corresponding cancelled VIZIO awards would have vested more than 24 months from the closing of the merger, the transition time-based restricted stock units will vest on the 3-year anniversary of the closing of the merger.

Vesting of the Walmart equity awards described above will be subject to Mr. Wong’s continued employment with Walmart, except as provided under his VIZIO severance agreement as amended.

Under Mr. Wong’s offer letter with Walmart, his severance agreement with VIZIO (as described above) will be amended so that (1) he will be eligible to receive only the vesting acceleration for a qualifying termination during the change-in-control period, which only applies to the transition time-based restricted stock units and not to the additional performance-based restricted stock units or any other Walmart equity awards or compensation, (2) he will not be eligible to receive any severance payments or benefits under his severance agreement, other than acceleration of the transition time-based restricted stock units in connection with a qualifying termination during the change-in-control period, including any severance payments or benefits for a qualifying termination that occurs outside of the change-in-control period, and (3) the definitions of “cause” and “good reason” will be replaced with similar definitions as those used in Mr. Wang’s offer letter with Walmart (as described above).

Walmart Offer Letter with Mike O’Donnell

Prior to the execution of the merger agreement, Walmart and Mr. O’Donnell did not discuss any future, post-closing compensation arrangement between Mr. O’Donnell and Walmart. On March 1, 2024,

 

60

Mr. O’Donnell and Walmart entered into an offer letter that becomes effective on the closing date of the merger, subject to the completion of the merger. Under the offer letter, Mr. O’Donnell will be employed as an associate of Walmart. The offer letter provides that Mr. O’Donnell’s base salary will be $600,000, his target incentive opportunity will be $600,000 (with his incentive award to be reduced based on bonus amounts already paid to him by VIZIO for the fiscal year as of the closing of the merger), and that he has an annual equity award target value of $550,000.

In addition, as a new officer of Walmart, Mr. O’Donnell will receive the following Walmart equity awards: (1) an initial equity award of time-based restricted shares with a target value of $550,000 (or $825,000 if the closing of the merger occurs between April 1, 2024, and December 31, 2024), which will be granted within one month after the closing of the merger and will vest monthly over a three-year period, (2) an award of performance-based restricted stock units with a target value of $275,000, which will be granted within one month after the closing of the merger and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2025, (3) an award of performance-based restricted stock units with a target value of $275,000, which will be granted in April 2025 and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2026, and (4) if the closing of the merger occurs between April 1, 2024, and December 31, 2024, an award of performance-based restricted stock units with a target value of $275,000, which will be granted in April 2026 and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2027. The number of shares of Walmart common stock to be covered by each of these equity awards will be determined by dividing the target value by the closing price of Walmart common stock on the date of grant.

As soon as administratively possible after the closing of the merger, Walmart will also grant Mr. O’Donnell (1) a one-time grant of transition Walmart time-based restricted stock units that are designed to make up for his cancelled VIZIO awards and (2) an additional grant of Walmart retention restricted stock units with a value of $2,600,000. These retention restricted stock units will vest as follows: $1,200,000 on the 1-year anniversary of the closing of the merger and $1,400,000 on the 2-year anniversary of the closing of the merger. Mr. O’Donnell’s transition time-based restricted stock units will vest over 3 years according to the following schedule:

 

•

to the extent his corresponding cancelled VIZIO awards would have vested in the 36 months following the closing of the merger, the transition time-based restricted stock units will vest in the same month and year that such corresponding portion of his cancelled VIZIO awards would have vested had his cancelled VIZIO awards not been terminated in connection with the closing of the merger; and

 

•

to the extent his corresponding cancelled VIZIO awards would have vested more than 36 months from the closing of the merger, the transition time-based restricted stock units will vest on the 3-year anniversary of the closing of the merger.

Vesting of the Walmart equity awards described above will be subject to Mr. O’Donnell’s continued employment with Walmart, except as provided under his VIZIO severance agreement as amended.

Under Mr. O’Donnell’s offer letter with Walmart, his severance agreement with VIZIO (as described above) will be amended so that (1) he will be eligible to receive only the vesting acceleration for a qualifying termination during the change-in-control period, which only applies to the transition time-based restricted stock units and not to any other Walmart equity awards or compensation, (2) he will not be eligible to receive any severance payments or benefits under his severance agreement, other than acceleration of the transition time-based restricted stock units in connection with a qualifying termination during the change-in-control period, including any severance payments or benefits for a qualifying termination that occurs outside of the change-in-control period, and (3) the definitions of “cause” and “good reason” will be replaced with similar definitions as those used in Mr. Wang’s offer letter with Walmart (as described above), except that the grounds for a resignation for “good reason” will not include a material breach by any Walmart group member of Mr. O’Donnell’s offer letter.

 

61

Walmart Offer Letter with Adam Townsend

Prior to the execution of the merger agreement, Walmart and Mr. Townsend did not discuss any future, post-closing compensation arrangement between Mr. Townsend and Walmart. On March 2, 2024, Mr. Townsend and Walmart entered into an offer letter that becomes effective on the closing date of the merger, subject to the completion of the merger. Under the offer letter, Mr. Townsend will be employed as an associate of Walmart. The offer letter provides that Mr. Townsend’s base salary will be $580,000, his target incentive opportunity will be $532,000 (with his incentive award to be reduced based on bonus amounts already paid to him by VIZIO for the fiscal year as of the closing of the merger), and that he has an annual equity award target value of $450,000.

In addition, as a new officer of Walmart, Mr. Townsend will receive the following Walmart equity awards: (1) an initial equity award of time-based restricted shares with a target value of $450,000 (or $675,000 if the closing of the merger occurs between April 1, 2024, and December 31, 2024), which will be granted within one month after the closing of the merger and will vest monthly over a three-year period, (2) an award of performance-based restricted stock units with a target value of $225,000, which will be granted within one month after the closing of the merger and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2025, (3) an award of performance-based restricted stock units with a target value of $225,000, which will be granted in April 2025 and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2026, and (4) if the closing of the merger occurs between April 1, 2024, and December 31, 2024, an award of performance-based restricted stock units with a target value of $225,000, which will be granted in April 2026 and will vest based on the achievement of performance goals applicable to a one-year performance period ending in January 2027. The number of shares of Walmart common stock to be covered by each of these equity awards will be determined by dividing the target value by the closing price of Walmart common stock on the date of grant.

As soon as administratively possible after the closing of the merger, Walmart will also grant Mr. Townsend (1) a one-time grant of transition Walmart time-based restricted stock units that are designed to make up for his cancelled VIZIO awards and (2) an additional grant of Walmart retention restricted stock units with a value of $2,600,000. These retention restricted stock units will vest as follows: $1,200,000 on the 1-year anniversary of the closing of the merger and $1,400,000 on the 2-year anniversary of the closing of the merger. Mr. Townsend’s transition time-based restricted stock units will vest over 3 years according to the following schedule:

 

•

to the extent his corresponding cancelled VIZIO awards would have vested in the 36 months following the closing of the merger, the transition time-based restricted stock units will vest in the same month and year that such corresponding portion of his cancelled VIZIO awards would have vested had his cancelled VIZIO awards not been terminated in connection with the closing of the merger; and

 

•

to the extent his corresponding cancelled VIZIO awards would have vested more than 36 months from the closing of the merger, the transition time-based restricted stock units will vest on the 3-year anniversary of the closing of the merger.

Vesting of the Walmart equity awards described above will be subject to Mr. Townsend’s continued employment with Walmart, except as provided under his VIZIO severance agreement as amended.

Under Mr. Townsend’s offer letter with Walmart, his severance agreement with VIZIO (as described above) will be amended so that (1) he will be eligible to receive only the vesting acceleration for a qualifying termination during the change-in-control period, which only applies to the transition time-based restricted stock units and not to any other Walmart equity awards or compensation, (2) he will not be eligible to receive any severance payments or benefits under his severance agreement, other than acceleration of the transition time-based restricted stock units in connection with a qualifying termination during the change-in-control period, including any severance payments or benefits for a qualifying termination that occurs outside of the change-in-control period, and (3) the definitions of “cause” and “good reason” will be replaced with similar definitions as those used in Mr. Wang’s offer letter with Walmart (as described above), except that the grounds for a resignation for “good reason” will not include a material breach by any Walmart group member of Mr. Townsend’s offer letter.

 

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In additions to Messrs. Wang, Wong, O’Donnell, and Townsend, as of the date of this information statement, Walmart has entered into definitive agreements regarding employment with certain of our other employees to be effective as of the effective time of the merger. Prior to the effective time of the merger, Walmart may further initiate discussions regarding employment or other retention terms with our other employees and may enter into definitive agreements with respect to the foregoing.

Golden Parachute Compensation

The information set forth in the table below is intended to comply with Item 402(t) of Regulation S-K, which requires disclosure of information about compensation for each of our named executive officers (which we refer to as “NEOs”) that is based on or otherwise relates to the merger. The NEOs are William Wang, Ben Wong, Adam Townsend and Michael O’Donnell.

The amounts indicated below are estimates based on multiple assumptions that may or may not actually occur or be accurate on the date that the merger closes (including the assumptions described below), and do not reflect certain compensation actions that may occur before the closing of the merger.

For purposes of calculating these estimates, we have assumed:

 

•

February 15, 2024, which is the latest practicable date prior to this filing, as the date of the effective time of the merger;

 

•

that each NEO experienced a qualifying termination of his respective employment on February 15, 2024, resulting in severance payments and benefits becoming payable to such NEO based on the terms of his severance agreement (as described in the section of this information statement captioned “—Change in Control and Severance Agreements”); and

 

•

the value of a share of our common stock is equal to the price per share.

In addition to these assumptions, these estimates are based on certain other assumptions that are described in the footnotes accompanying the table below. Accordingly, the ultimate values to be received by an NEO in connection with the merger may differ from the amounts set forth below.

 

Name		Cash ($(1)(2)(5)(6))				Equity ($(1)(3)(5)(6))				Perquisites/ Benefits ($(1)(4)(5)(6))				Total ($(1)(5)(6))
William Wang			2,730,000				24,056,671				30,550				26,817,221
Ben Wong			2,625,000				10,681,693				30,392				13,337,085
Adam Townsend			1,668,000				8,839,745				31,714				10,539,459
Mike O’Donnell			1,800,000				8,391,345				43,158				10,234,503

 

(1)

These amounts represent the “double-trigger” severance payments and benefits to which each NEO may become entitled under his severance agreement if, during the period beginning 3 months before a change in control and ending 18 months following that change in control, the NEO’s employment is terminated by VIZIO or any of its subsidiaries for a reason other than cause, death or disability or by the NEO for good reason and the NEO timely signs and does not revoke a release of claims in our favor, as described in the section of this information statement captioned “—Change in Control and Severance Agreements.” The NEOs will not receive any pension or nonqualified deferred compensation benefit enhancements, tax reimbursement, or other benefits in connection with the merger.

(2)

Cash. The amount listed in this column for each NEO represents (i) a lump sum payment equal to 18 months of the NEO’s base salary (as in effect as of February 15, 2024), and (ii) a lump sum payment equal to 150 percent of the NEO’s target annual bonus as in effect for our fiscal year ending December 31, 2024. The amount of each of these payments is as follows:

 

Name		Salary Severance ($)				Bonus Severance ($)				Total ($)
William Wang			1,492,500				1,237,500				2,730,000
Ben Wong			1,455,000				1,170,000				2,625,000
Adam Townsend			870,000				798,000				1,668,000
Mike O’Donnell			900,000				900,000				1,800,000

 

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(3)

Equity. The amount listed in this column for each NEO represents the value of the NEO’s VIZIO equity awards outstanding as of February 15, 2024, for which vesting would be accelerated under the NEO’s severance agreement (determined as the product of (i) the total number of shares of our common stock underlying the accelerated portion of the VIZIO equity award, multiplied by (ii) the excess of the price per share over the per share exercise price of the VIZIO equity award, if any), assuming the performance goal for the VIZIO PSUs held by the NEOs is achieved based on actual performance through February 15, 2024 (which would have been at 188 percent). Based on that assumption, the numbers of underlying shares and the corresponding values are as follows:

 

Name		VIZIO RSUs								In-the-Money VIZIO Options
		Number of Underlying Shares (#)				Value ($)				Number of Underlying Shares (#)				Value ($)
William Wang			1,898,000				21,827,000				768,852				2,229,671
Ben Wong			847,286				9,743,789				323,415				937,904
Adam Townsend			676,176				7,776,024				364,434				1,063,721
Mike O’Donnell			666,887				7,669,201				247,317				722,145

If the performance goal for the NEOs’ VIZIO PSUs is achieved at the target level, the expected number of shares underlying the NEOs’ VIZIO RSUs that are accelerated and the value of those VIZIO RSUs would be (i) for Mr. Wang, 525,784 VIZIO RSUs with a value of $6,046,516, (ii) for Mr. Wong, 237,452 VIZIO RSUs with a value of $2,730,698, (iii) for Mr. Townsend, 155,360 VIZIO RSUs with a value of $1,786,640, and (iv) for Mr. O’Donnell, 203,528 VIZIO RSUs with a value of $2,340,572. However, if the performance goal for the NEOs’ VIZIO PSUs is achieved at the maximum level, the expected number of shares underlying the NEOs’ VIZIO RSUs that are accelerated and the value of those VIZIO RSUs would be (i) for Mr. Wang, 1,051,568 VIZIO RSUs with a value of $12,093,032, (ii) for Mr. Wong, 474,904 VIZIO RSUs with a value of $5,461,396, (iii) for Mr. Townsend, 310,720 VIZIO RSUs with a value of $3,573,280, and (iv) for Mr. O’Donnell, 407,056 VIZIO RSUs with a value of $4,681,144.

(4)

Perquisites/Benefits. The amount listed in this column for each NEO represents the estimated cost of our payment of premiums for coverage under COBRA for the NEO and his eligible dependents for 18 months under the NEO’s severance agreement, based on the assumptions used for financial reporting purposes under U.S. generally accepted accounting principles.

(5)

Under each NEO’s severance agreement, if any payments or benefits otherwise payable to the NEO (including the payments and benefits under his severance agreement) would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and could be subject to the related excise tax, the NEO would be entitled to receive either full payment of those payments and benefits or a lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to the NEO.

(6)

As described above, Messrs. Wang and Wong have entered into offer letters with Walmart under which their severance agreements will be amended so that they will be eligible to receive only accelerated vesting of their transition Walmart time-based restricted stock units upon a qualifying termination during the change-in-control period. As a result, in the event of a qualifying termination after the closing of the merger, no amounts would be included for these NEOs in the “Cash” and “Perquisites/Benefits” columns, and the amounts that would be included for each of these NEOs in the “Equity” and “Total” columns would be the value of the NEO’s transition Walmart time-based restricted stock units that would be accelerated under his amended severance agreement. If such termination occurs immediately following the closing of the merger, the value of the NEO’s transition Walmart time-based restricted stock units would be equal to the value of the NEO’s cancelled VIZIO awards, which is discussed in footnote 3 above.

Appraisal Rights

If the merger is consummated, holders and beneficial owners of shares of our Class A common stock who (1) do not deliver a written consent or otherwise vote in favor of the adoption of the merger agreement; (2) properly and timely demand appraisal of their shares; (3) continuously hold of record or beneficially own their shares through the effective date of the merger; (4) otherwise comply with the procedures of Section 262 of the DGCL (which we also refer to as “Section 262”); and (5) do not withdraw their demands or otherwise lose their rights to appraisal may, subject to the conditions thereof, seek appraisal of their shares in connection with the merger under Section 262. Unless the context requires otherwise, all references in Section 262 and in this summary to a “stockholder” are to a record holder of shares, all references in Section 262 and in this summary to “beneficial owner” mean a person who is the beneficial owner of shares of stock held either in voting trust or by a nominee on behalf of such person, and all references in Section 262 and in this summary to the word “person” mean any individual, corporation, partnership, unincorporated association or other entity.

The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262, which is available at the following URL, accessible

 

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without subscription or cost, which is incorporated herein by reference: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. The following summary does not constitute any legal or other advice and does not constitute a recommendation that our stockholders or beneficial owners of shares of our common stock exercise their appraisal rights under Section 262. STOCKHOLDERS AND BENEFICIAL OWNERS OF SHARES OF OUR COMMON STOCK SHOULD CAREFULLY REVIEW THE FULL TEXT OF SECTION 262 AS WELL AS THE INFORMATION DISCUSSED BELOW.

Under Section 262, if the merger is completed, holders of record of shares of our Class A common stock or beneficial owners of shares of our common stock (other than the consenting stockholders) who (1) deliver a written demand for appraisal of such person’s shares of our Class A common stock to us no later than twenty (20) days after the mailing of this information statement, or April 7, 2024; (2) has not delivered a written consent or otherwise vote in favor of the adoption of the merger agreement; (3) continuously hold of record or beneficially own such shares on the date of making the demand for appraisal through the effective date of the merger; and (4) otherwise comply with the procedures and satisfy certain ownership thresholds (as defined below), as appliable, set forth in Section 262 may be entitled to have their shares of our Class A common stock appraised by the Delaware Court of Chancery and to receive payment in cash, in lieu of the consideration set forth in the merger agreement, for the “fair value” of their shares of our Class A common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with (unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown) interest, if any, on the amount determined by the Delaware Court of Chancery to be the fair value from the effective date of the merger through the date of payment of the judgment (or in certain circumstances described herein, on the difference between the amount determined to be the fair value and the amount paid by the surviving corporation in the merger to each person entitled to appraisal prior to the entry of judgment in the appraisal proceeding) as described further below. However, after an appraisal petition has been filed, the Delaware Court of Chancery, at a hearing to determine persons entitled to appraisal rights, will dismiss appraisal proceedings as to all holders and beneficial owners of shares of a class or series of stock that, immediately prior to the closing of the merger, were listed on a national securities exchange who are otherwise entitled to appraisal rights unless (1) the total number of shares of the class or series of stock for which appraisal rights have been pursued or perfected exceeds one percent of the outstanding shares of such class or series as measured in accordance with subsection (g) of Section 262 or (2) the value of the price per share in respect of such shares exceeds $1 million. We refer to these conditions as the “ownership thresholds.” Given that the shares of our Class A common stock are listed on the NYSE (and assuming such shares remain so listed up until closing of the merger), the Delaware Court of Chancery will dismiss any appraisal proceedings as to all holders of our Class A common stock who are otherwise entitled to appraisal rights unless one of the ownership thresholds is satisfied.

Unless the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, interest on the amount determined to be the fair value of the shares subject to appraisal will accrue and compound quarterly from the effective date of the merger through the date the judgment is paid at five percent over the Federal Reserve discount rate (including any surcharge) as established from time to time during such period (except that, if at any time before the entry of judgment in the proceeding, the surviving corporation makes a voluntary cash payment to each person entitled to appraisal, interest will accrue thereafter only upon the sum of (1) the difference, if any, between the amount so paid and the fair value of the shares as determined by the Delaware Court of Chancery and (2) interest theretofore accrued, unless paid at that time). The surviving corporation is under no obligation to make such voluntary cash payment prior to such entry of judgment.

Under Section 262, where a merger is adopted by stockholders acting by written consent in lieu of a meeting of the stockholders, either the corporation, before the effective time of the merger or the surviving corporation within ten days thereafter, shall notify each of its stockholders who are entitled to appraisal rights of the approval of the merger and that appraisal rights are available for any or all shares of such stock of the corporation, and shall include in such notice a copy of Section 262 of the DGCL or information directing the stockholders to a publicly available electronic resource at which Section 262 may be accessed without subscription or cost. For purposes of determining the stockholders entitled to receive the notice required under Section 262, each

 

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constituent corporation may fix in advance, a record date that shall not be more than ten days prior to the date notice is given, provided, that if the notice is given on or after the effective date of the merger, the record date shall be such effective date. If no record date is fixed in advance and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given. This information statement constitutes our notice to our stockholders that appraisal rights are available in connection with the merger, and the full text of Section 262 is available at the following URL: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. In connection with the merger, any holder of record or beneficial owner of shares of our Class A common stock who wishes to exercise appraisal rights, or who wishes to preserve such person’s right to do so, should review Section 262 carefully. Failure to strictly comply with the requirements of Section 262 in a timely and proper manner may result in the loss of appraisal rights under the DGCL. A person who loses appraisal rights will be entitled to receive the price per share described in the merger agreement, without interest, less any applicable withholding taxes. Because of the complexity of the procedures for exercising the right to seek appraisal of shares of our Class A common stock, we believe that if a person is considering exercising such rights, such person should seek the advice of legal counsel.

Stockholders or beneficial owners of shares of our common stock wishing to exercise the right to seek an appraisal of their shares of our Class A common stock must do ALL of the following:

 

•

such person must not have delivered a written consent or otherwise vote to adopt the merger agreement;

 

•

such person must deliver a written demand for appraisal to us no later than twenty (20) days after the mailing of this information statement, or April 7, 2024; and

 

•

such person must continuously hold of record or beneficially own the shares of our Class A common stock from the date of making the demand through the effective date of the merger (a person will lose appraisal rights if the person transfers the shares before the effective date of the merger).

As described below, within 120 days after the effective date of the merger, but not thereafter, an appraisal proceeding must be commenced by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held or owned by all dissenting stockholders and beneficial owners entitled to appraisal. The surviving corporation is under no obligation, and has no present intention, to file a petition, and stockholders and beneficial owners should not assume that the surviving corporation will file a petition or initiate any negotiations with respect to the fair value of the shares of our Class A common stock. In addition, after an appraisal petition has been filed, the Delaware Court of Chancery, at a hearing to determine persons entitled to appraisal rights, will dismiss appraisal proceedings as to all persons who asserted appraisal rights with respect to the shares of our common stock unless one of the ownership thresholds is met.

Making a Written Demand

A person wishing to exercise appraisal rights must deliver to us, no later than twenty (20) days after the mailing of this information statement, or April 7, 2024, a written demand for the appraisal of such person’s shares. In addition, that person must not have delivered a written consent or otherwise vote in favor of the adoption of the merger agreement with respect to such shares. A person exercising appraisal rights must own or hold, as applicable, beneficially or of record, the shares on the date the written demand for appraisal is delivered and must continue to own or hold, as applicable, the shares through the effective date of the merger. Such person must submit a written demand for appraisal, which must be in addition to and separate from any vote or written consent on the adoption of the merger agreement. Any failure to vote on (or deliver a written consent with respect to) the adoption of the merger agreement will not constitute a demand.

In the case of a written demand for appraisal made by a stockholder of record, the demand must reasonably inform us of the identity of the stockholder and that the stockholder intends thereby to demand an appraisal of

 

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such stockholder’s shares. In the case of a written demand for appraisal made by a beneficial owner, the demand must reasonably identify the record holder of the shares for which the demand is made, be accompanied by documentary evidence of such beneficial owner’s beneficial ownership of such stock and a statement that such documentary evidence is a true and correct copy of what it purports to be and provide an address at which such beneficial owner consents to receive notices given by the surviving corporation and to be set forth on the verified list (as defined below).

All written demands for appraisal pursuant to Section 262 should be mailed or delivered to:

VIZIO Holding Corp.

39 Tesla

Irvine, California 92618

Attention: Corporate Secretary

At any time within 60 days after the effective date of the merger, any person entitled to appraisal rights who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw such person’s demand for appraisal and accept the terms offered pursuant to the merger agreement, by delivering to us, as the surviving corporation, a written withdrawal of the demand for appraisal. Any withdrawal of a demand for appraisal made more than 60 days after the effective date of the merger may only be made with the written approval of the surviving corporation. Notwithstanding the foregoing, no appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any person without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just, including, without limitation, a reservation of jurisdiction (which we refer to as a “reservation”) for any application (as defined below) to the Delaware Court of Chancery; provided, however, that this limitation shall not affect the right of any person who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such person’s demand for appraisal and to accept the price per share within 60 days after the effective date of the merger. If the Delaware Court of Chancery does not approve the dismissal of an appraisal proceeding with respect to a person, such person will be entitled to receive only the fair value determined in any such appraisal proceeding (together with interest, if any, thereon as described herein), which value could be less than, equal to or more than the price per share being offered pursuant to the merger agreement.

Notice by the Surviving Corporation

If the merger is completed, within ten days after the effective date of the merger, the surviving corporation will notify each stockholder and beneficial owner of each constituent corporation who has submitted a demand for appraisal in accordance with Section 262, and who has not delivered a written consent or otherwise voted in favor of the adoption of the merger agreement, that the merger has become effective and the effective date thereof.

Filing a Petition for Appraisal

Within 120 days after the effective date of the merger, but not thereafter, the surviving corporation or any person who has complied with Section 262 and is otherwise entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the surviving corporation in the case of a petition filed by any person other than the surviving corporation, demanding a determination of the fair value of the shares held by all dissenting stockholders and beneficial owners entitled to appraisal. The surviving corporation is under no obligation, and has no present intention, to file a petition, and stockholders and beneficial owners of shares of our common stock should not assume that the surviving corporation will file a petition or initiate any negotiations with respect to the fair value of the shares of our Class A common stock. Accordingly, any persons who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of their shares of our Class A common stock within

 

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the time and in the manner prescribed in Section 262. The failure to file such a petition within the period specified in Section 262 could nullify a previous written demand for appraisal.

Within 120 days after the effective date of the merger, any person who has complied with the requirements for an appraisal of such person’s shares pursuant to Section 262 will be entitled, upon written request, to receive from the surviving corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the merger agreement and with respect to which we have received demands for appraisal, and the aggregate number of stockholders or beneficial owners holding or owning such shares (provided that, where a beneficial owner makes a demand for appraisal directly, the record holder of such shares shall not be considered a separate stockholder holding such shares for purposes of this aggregate number). Such statement must be given within ten days after receipt by the surviving corporation of the written request for such a statement or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later.

If a petition for an appraisal is duly filed by any person other than the surviving corporation, service of a copy thereof must be made upon the surviving corporation, which will then be obligated within 20 days after such service to file with the Delaware Register in Chancery a duly verified list (which we refer to as the “verified list”) containing the names and addresses of all persons who have demanded appraisal for their shares and with whom agreements as to the value of their shares have not been reached. The Delaware Court of Chancery may order the Register in Chancery to give notice of the time and place fixed for the hearing of such petition to the surviving corporation and all of the persons shown on the verified list at the addresses stated therein. The costs of any such notice are borne by the surviving corporation.

After notice is provided to the applicable persons as required by the Delaware Court of Chancery, at the hearing on such petition, the Delaware Court of Chancery will determine the persons who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court of Chancery may require the persons who demanded appraisal for their shares and who hold stock represented by stock certificates to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings. Accordingly, persons holding stock represented by stock certificates and wishing to seek appraisal of their shares are cautioned to retain their stock certificates pending resolution of the appraisal proceedings. If any person fails to comply with this requirement, the Delaware Court of Chancery may dismiss the proceedings as to such person. Upon application (as defined below) by the surviving corporation or by any person entitled to participate in the appraisal proceeding, the Delaware Court of Chancery may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the persons entitled to an appraisal. Any person whose name appears on the verified list may participate fully in all proceedings until it is finally determined that such person is not entitled to appraisal rights under Section 262.

Given that the shares of our Class A common stock are listed on the NYSE (and assuming such shares remain so listed up until closing of the merger), the Delaware Court of Chancery will dismiss any appraisal proceedings as to all holders of such shares of our common stock who are otherwise entitled to appraisal rights unless one of the ownership thresholds is met.

Determination of Fair Value

After the Delaware Court of Chancery determines the persons entitled to appraisal and, with respect to our common stock, that at least one of the ownership thresholds above has been satisfied in respect of persons seeking appraisal rights, then the appraisal proceeding will be conducted in accordance with the rules of the Delaware Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding, the Delaware Court of Chancery will determine the “fair value” of the shares of our Class A common stock, exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment will be compounded quarterly and will accrue at five

 

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percent over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. However, the surviving corporation has the right, at any time prior to the Delaware Court of Chancery’s entry of judgment in the proceedings, to make a voluntary cash payment to each person seeking appraisal. If the surviving corporation makes a voluntary cash payment pursuant to subsection (h) of Section 262, interest will accrue thereafter only on the sum of (1) the difference, if any, between the amount paid by the surviving corporation in such voluntary cash payment and the fair value of the shares as determined by the Delaware Court of Chancery and (2) interest accrued before such voluntary cash payment, unless paid at that time.

In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. In Weinberger v. UOP, Inc., the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings, prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that “throw any light on future prospects of the merged corporation.” Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Persons considering seeking appraisal should be aware that the fair value of their shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration they would receive pursuant to the merger if they did not seek appraisal of their shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a merger is not an opinion as to, and may not in any manner address, fair value under Section 262. ALTHOUGH WE BELIEVE THAT THE PRICE PER SHARE IS FAIR, NO REPRESENTATION IS MADE AS TO THE OUTCOME OF THE APPRAISAL OF FAIR VALUE AS DETERMINED BY THE DELAWARE COURT OF CHANCERY, AND STOCKHOLDERS AND BENEFICIAL OWNERS OF SHARES OF OUR COMMON STOCK SHOULD RECOGNIZE THAT SUCH AN APPRAISAL COULD RESULT IN A DETERMINATION OF A VALUE HIGHER OR LOWER THAN, OR THE SAME AS, THE PRICE PER SHARE. Neither we nor Walmart anticipate offering more than the price per share to any persons exercising appraisal rights, and each of us and Walmart reserves the rights to make a voluntary cash payment pursuant to subsection (h) of Section 262 and to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of our Class A common stock is less than the price per share. If a petition for appraisal is not timely filed or, with respect to our common stock, if neither of the ownership thresholds above has been satisfied in respect of persons seeking appraisal rights, then the right to an appraisal will cease.

The Delaware Court of Chancery will direct the payment of the fair value of the shares, together with interest, if any, by the surviving corporation to the persons entitled thereto. Payment will be so made to each such person upon such terms and conditions as the Delaware Court of Chancery may order. The Delaware Court of Chancery’s decree may be enforced as other decrees in such Delaware Court of Chancery may be enforced.

The costs of the appraisal proceedings (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a person whose name appears on the verified list who participated in the proceeding and incurred expenses in connection therewith (which we refer to as an “application”), the Delaware Court of Chancery may also order that all or a portion of such expenses,

 

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including, without limitation, reasonable attorney’s fees and the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to an appraisal that were not dismissed pursuant to the terms of Section 262 or subject to an award pursuant to a reservation. In the absence of such determination or assessment, each party bears its own expenses.

If any person who demands appraisal of shares of our Class A common stock under Section 262 fails to perfect, or loses or validly withdraws, such person’s right to appraisal, such person’s shares of our Class A common stock will be deemed to have been converted at the effective date of the merger into the right to receive the price per share as provided in the merger agreement, without interest and less any applicable withholding taxes. A person will fail to perfect, or effectively lose, such person’s right to appraisal if no petition for appraisal is filed within 120 days after the effective date of the merger, if, in the case of our common stock, neither of the ownership thresholds above has been satisfied in respect of those seeking appraisal rights with respect to the shares of our common stock, or if the person delivers to the surviving corporation a written withdrawal of such person’s demand for appraisal and an acceptance of the price per share as provided in the merger agreement in accordance with Section 262.

From and after the effective date of the merger, no person who has demanded appraisal rights in compliance with Section 262 will be entitled to vote such shares of our Class A common stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger).

Failure to comply strictly with all of the procedures set forth in Section 262 may result in the loss of appraisal rights. In that event, you will be entitled to receive the price per share for your dissenting shares in accordance with the merger agreement, without interest and less any applicable withholding taxes. Consequently, any person wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.

Accounting Treatment

The merger will be accounted for as a “business combination” for financial accounting purposes.

Material U.S. Federal Income Tax Consequences of the Merger

The following discussion is a summary of material U.S. federal income tax consequences of the merger that may be relevant to U.S. Holders and Non-U.S. Holders (each as defined below) of shares of our common stock whose shares are converted into the right to receive cash pursuant to the merger. This discussion is based upon the U.S. Internal Revenue Code of 1986 (which we refer to as the “Code”), the U.S. Treasury Regulations promulgated under the Code, court decisions, published positions of the U.S. Internal Revenue Service (which we refer to as the “IRS”) and other applicable authorities, all as in effect on the date of this information statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. This discussion is limited to holders who hold their shares of our common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment purposes).

This discussion is for general information only and does not address all of the tax consequences that may be relevant to holders in light of their particular circumstances. For example, this discussion does not address:

 

•

tax consequences that may be relevant to holders who may be subject to special treatment under U.S. federal income tax laws, such as financial institutions; tax-exempt organizations; S corporations, partnerships and any other entity or arrangement treated as a partnership or pass-through entity for U.S. federal income tax purposes; insurance companies; mutual funds; brokers or dealers in stocks and securities; traders in securities that elect to use the mark-to-market method of accounting for their securities; regulated investment companies; real estate investment trusts; entities subject to the U.S.

 

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anti-inversion rules; holders who hold their common stock as “qualified small business stock” for purposes of Sections 1045 or 1202 of the Code, as “Section 1244 stock” within the meaning of Section 1244 of the Code, or through individual retirement or other tax-deferred accounts; Non-U.S. Holders that own (directly or by attribution) more than five percent of our common stock; or certain former citizens or long-term residents of the United States;

 

•

tax consequences to holders holding the shares as part of a hedging, constructive sale or conversion, straddle or other risk reduction transaction;

 

•

tax consequences to holders who received their shares of our common stock in a compensatory transaction or pursuant to the exercise of options or warrants;

 

•

tax consequences to holders whose “functional currency” is not the U.S. dollar;

 

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tax consequences to holders subject to holdback and retention arrangements under the merger agreement;

 

•

tax consequences to holders who hold their common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;

 

•

tax consequences arising from the Medicare tax on net investment income;

 

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tax consequences to holders subject to special tax accounting rules as a result of any item of gross income with respect to the shares of our common stock being taken into account in an “applicable financial statement” (as defined in the Code);

 

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the U.S. federal estate, gift or alternative minimum tax consequences, if any;

 

•

any state, local or non-U.S. tax consequences; or

 

•

tax consequences to holders that do not vote in favor of the merger and who properly and timely demand appraisal of their shares under Section 262 of the DGCL.

If a partnership (including an entity or arrangement, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of shares of our common stock, then the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding shares of our common stock and partners therein should consult their tax advisors regarding the consequences of the merger.

No ruling has been or will be obtained from the IRS regarding the U.S. federal income tax consequences of the merger described below. If the IRS contests a conclusion set forth herein, no assurance can be given that a holder would ultimately prevail in a final determination by a court.

THIS DISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE TO ANY HOLDER. A HOLDER SHOULD CONSULT ITS OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE MERGER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND ANY CONSEQUENCES ARISING UNDER FEDERAL NON-INCOME TAX LAWS OR THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION.

U.S. Holders

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:

 

•

an individual who is a citizen or resident of the United States;

 

•

a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

 

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•

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

 

•

a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in section 7701(a)(30) of the Code; or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person.

The receipt of cash by a U.S. Holder in exchange for shares of our common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, such U.S. Holder’s gain or loss will be equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares surrendered pursuant to the merger. A U.S. Holder’s adjusted tax basis generally will equal the amount that such U.S. Holder paid for the shares. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if such U.S. Holder’s holding period in such shares is more than one year at the time of the completion of the merger. A reduced tax rate on capital gain generally will apply to long-term capital gain of a non-corporate U.S. Holder (including individuals). The deductibility of capital losses is subject to limitations. If a U.S. Holder acquired different blocks of shares of our common stock at different times and different prices, such holder must determine its adjusted tax basis and holding period separately with respect to each block of our common stock.

Non-U.S. Holders

For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of shares of our common stock that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.

Any gain realized by a Non-U.S. Holder pursuant to the merger generally will not be subject to U.S. federal income tax unless:

 

•

the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of 30 percent (or a lower rate under an applicable income tax treaty);

 

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such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the completion of the merger, and certain other specified conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30 percent (or a lower rate under an applicable income tax treaty); or

 

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VIZIO is or has been a “United States real property holding corporation” as such term is defined in Section 897(c) of the Code (which we refer to as “USRPHC”), at any time within the shorter of the five-year period preceding the merger or such Non-U.S. Holder’s holding period with respect to the applicable shares of our common stock and, if shares of our common stock are regularly traded on an established securities market (within the meaning of Section 897(c)(3) of the Code), such Non-U.S. Holder owns (directly, indirectly or constructively) more than five percent of our common stock at any time during the relevant period, in which case such gain will be subject to U.S. federal income tax at rates generally applicable to U.S. persons (as described in the first bullet point above), except that the branch profits tax will not apply. Generally, a corporation is a USRPHC if the fair market value of its U.S. real property interests (as defined in the Code) equals or exceeds 50 percent of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. For this purpose, U.S. real property interests generally include land, improvements and associated personal property. Although there can be no assurances in this regard, we believe that we are not, and have not been, a USRPHC at any time during the five-year period preceding the merger. Non-U.S. Holders are encouraged to consult their own tax advisors regarding the possible consequences to them if we are a USRPHC.

 

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Information Reporting and Backup Withholding

Information reporting and backup withholding (at a current rate of 24 percent) may apply to the proceeds received by a holder pursuant to the merger. Backup withholding generally will not apply to (1) a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such U.S. Holder is not subject to backup withholding on IRS Form W-9 (or a substitute or successor form) or (2) a Non-U.S. Holder that (i) provides a certification of such Non-U.S. Holder’s non-U.S. status on the appropriate series of IRS Form W-8 (or a substitute or successor form) or (ii) otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the holder’s U.S. federal income tax liability, if the required information is timely furnished to the IRS.

A U.S. Holder may be required to retain records related to such holder’s common stock and file with its U.S. federal income tax return, for the taxable year that includes the merger, a statement setting forth certain facts relating to the merger.

Withholding on Foreign Entities

Sections 1471 through 1474 of the Code, and the U.S. Treasury Regulations and administrative guidance issued thereunder (which we refer to collectively as “FATCA”), impose a U.S. federal withholding tax of 30 percent on certain payments made to a “foreign financial institution” (as specially defined under these rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding certain U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) or an exemption applies. FATCA also generally will impose a U.S. federal withholding tax of 30 percent on certain payments made to a non-financial foreign entity unless such entity provides the withholding agent a certification identifying certain direct and indirect U.S. owners of the entity or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. Under certain circumstances, a Non-U.S. Holder might be eligible for refunds or credits of such taxes.

The U.S. Treasury Department released proposed regulations which, if finalized in their present form, would eliminate the federal withholding tax of 30 percent applicable to the gross proceeds of a sale or other disposition of our common stock. In its preamble to such proposed regulations, the U.S. Treasury Department stated that taxpayers may generally rely on the proposed regulations until final regulations are issued.

Holders of our common stock are encouraged to consult with their own tax advisors regarding the possible implications of FATCA on the disposition of our common stock pursuant to the merger.

Regulatory Clearance Required for the Merger

The completion of the merger is subject to compliance with the HSR Act, and the merger cannot be completed until we and Walmart file a Notification and Report Form with the FTC and the Antitrust Division of the Department of Justice, and the 30-calendar day waiting period (and any extension thereof) applicable to the completion of the merger under the HSR Act.

We and Walmart filed the notification required under the HSR Act with the Premerger Notification Office of the Federal Trade Commission and the Antitrust Division of the Department of Justice on February 26, 2024. The applicable waiting period under the HSR Act expires at 11:59 p.m. Eastern time on March 27, 2024.

Under the merger agreement, each of us and Walmart has agreed to use reasonable best efforts, subject to specified limitations, to take, or cause to be taken, all actions necessary to complete the merger and make

 

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effective the other transactions contemplated by the merger agreement. The merger agreement provides that, without limiting the generality of the foregoing:

 

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we and Walmart will respond as promptly as practicable to (1) any inquiries or requests received from the Federal Trade Commission or the Department of Justice for additional information or documentation and (2) any inquiries or requests received from any state attorney general, foreign antitrust or competition authority or other governmental authority in connection with antitrust or related matters;

 

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we and Walmart will use reasonable best efforts to promptly supply to the other side any information required in order to effectuate any filings, consult with the other in good faith prior to taking a position with respect to any filing, and provide copies of all filings and other submissions made, provided that, Walmart will control the strategy of the parties with respect to seeking any consents of any governmental body; and

 

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Walmart will consult with us and consider our views in good faith with respect to any decision by Walmart to (1) “pull-and-refile” pursuant to 16 C.F.R. 803.12 or otherwise withdraw any filing under the HSR Act, and (2) enter into any timing agreement.

However, Walmart does not have any obligation under the merger agreement to, and we agreed that we will not, except with the prior written consent of Walmart, agree to:

 

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propose, negotiate with any governmental body, commit to or effect, by consent decree, hold separate order or otherwise, the sale, divestiture, disposition or license (or similar arrangement) of, or limit Walmart’s freedom of action with respect to, any of the businesses, product lines or assets of Walmart or Merger Sub, any of their respective subsidiaries or us, or otherwise propose, proffer or agree to any other requirement, obligation, condition, limitation or restriction on any of the businesses, product lines or assets of Walmart or Merger Sub, any of their respective subsidiaries or us;

 

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amend or modify any of Walmart’s rights or obligations under the merger agreement;

 

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restructure or commit to restructure the merger or the transactions contemplated by the merger agreement; and

 

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commence or contest any legal proceeding relating to the merger or the transactions contemplated by the merger agreement.

However, the merger agreement provides that, at our reasonable request, Walmart will use reasonable best efforts to reasonably assist us in our efforts to resist any attempt to adversely modify the stipulated order by attending meetings and providing information that is in Walmart’s possession and control as may be reasonably requested from the FTC or the New Jersey Attorney General so long as such adverse modifications arise or result from the merger, subject to certain exceptions set forth in the merger agreement. Subject to certain conditions set forth in the merger agreement, we may take reasonable steps to lift, resist or avoid a merger-related regulatory challenge (as defined in the section of this information statement captioned “The Merger Agreement—Conditions to the Closing of the Merger.”) that has either been commenced, brought or filed by a governmental body that has jurisdiction over (1) us, Walmart, Merger Sub or any of our respective significant subsidiaries, (2) any business or asset of ours that is material to us, taken as a whole or (3) any business or asset of Walmart or any of its subsidiaries that is material to Walmart and its subsidiaries, taken as a whole, or that a specified governmental body has asserted an intention to commence, bring or file or any adverse modification of the stipulated order.

Delisting and Deregistration of Our Class A Common Stock

If the merger is completed, our Class A common stock will no longer be traded on the NYSE and will be deregistered under the Exchange Act. We will no longer be required to file periodic reports, current reports and proxy and information statements with the SEC on account of our Class A common stock.

 

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THE MERGER AGREEMENT

The following discussion summarizes certain material provisions of the merger agreement, a copy of which is attached as Annex A to this information statement and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this summary. This summary does not purport to be complete and is qualified in its entirety by reference to the complete text of the merger agreement. We encourage you to carefully read and consider the merger agreement, which is the legal document that governs the merger, in its entirety because this summary may not contain all the information about the merger agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the merger agreement, and not by this summary or any other information contained in this information statement.

Except for its status as the contractual document that establishes and governs the legal relations among the parties with respect to the merger, we do not intend for the merger agreement to be a source of factual, business or operational information about us, Walmart or Merger Sub. The representations and warranties described below and included in the merger agreement were made by us, Walmart and Merger Sub as of specific dates. The assertions contained in those representations and warranties were made solely for purposes of the merger agreement and may be subject to important qualifications and limitations agreed to by us and Walmart in connection with negotiating the terms of the merger agreement, which you should consider as you read the representations and warranties in the merger agreement. The representations and warranties are qualified in their entirety by certain information we and Walmart filed with the SEC prior to the date of the merger agreement, as well as by confidential disclosure schedules that we and Walmart delivered to each other in connection with the execution of the merger agreement. Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from what may be viewed as material to our stockholders, and the representations and warranties may have been used for the purpose of allocating risk between us and Walmart rather than establishing matters as facts. Our stockholders, in their capacities as such, are not third-party beneficiaries under the merger agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of us, Walmart or Merger Sub or any of their respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the merger agreement. None of the representations and warranties will survive the closing of the merger, and, therefore, they will have no legal effect under the merger agreement after the effective time of the merger. In addition, you should not rely on the covenants in the merger agreement as actual limitations on the respective businesses of us, Walmart and Merger Sub because the parties may take certain actions that are either expressly permitted in the confidential disclosure letter to the merger agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. Accordingly, the merger agreement as described below, and included as Annex A, is only to provide you with information regarding its terms and conditions, and not to provide you with any other factual information regarding us, Walmart, Merger Sub or their respective businesses. Accordingly, the representations, warranties, covenants and other agreements in the merger agreement should not be read alone, and you should read the information provided elsewhere in this document and in our filings with the SEC regarding us and our business.

Closing and Effective Time of the Merger

The merger agreement provides that, subject to the terms and conditions of the merger agreement and in accordance with the DGCL, Merger Sub will merge with and into VIZIO. As a result, the separate corporate existence of Merger Sub will cease, and VIZIO will survive the merger and continue to exist after the merger as a direct, wholly owned subsidiary of Walmart.

The merger will take place no later than the second business day after the satisfaction or waiver of each of the conditions described in the section of this information statement captioned “—Conditions to the Closing of the

 

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Merger” (other than those conditions which by their nature are to be satisfied at the closing of the merger, but subject to the satisfaction or waiver of each of such conditions), or at such other date and time as Walmart and VIZIO may jointly designate. The merger will become effective when we, Walmart and Merger Sub cause to be executed and filed a certificate of merger with the Secretary of State of the State of Delaware in accordance with the relevant provisions of the DGCL, or such other date and time as specified in the certificate of merger with the consent of Walmart.

Effects of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

The merger agreement provides that, subject to the terms and conditions of the merger agreement, and in accordance with the DGCL, at the effective time of the merger: (1) Merger Sub will be merged with and into VIZIO; (2) the separate corporate existence of Merger Sub will cease; and (3) VIZIO will continue as the surviving corporation in the merger and a wholly owned subsidiary of Walmart. From and after the effective time of the merger, all of the property, rights, privileges, powers and franchises of VIZIO and Merger Sub will vest in the surviving corporation and all of the debts, liabilities and duties of VIZIO and Merger Sub will become the debts, liabilities and duties of the surviving corporation.

As a result of the merger, we will cease to be a publicly traded company. If the merger is completed, you will not own any shares of capital stock of the surviving corporation as a result of the merger.

At the effective time of the merger, by virtue of the merger and without any further action on the part of Walmart, Merger Sub, VIZIO or any stockholder of VIZIO, (1) the certificate of incorporation of VIZIO as the surviving corporation will be amended and restated in its entirety to read as set forth in the applicable exhibit attached to the merger agreement and (2) the bylaws of VIZIO as the surviving corporation will be amended and restated in their entirety to conform to the bylaws of Merger Sub, as in effect immediately prior to the effective time of the merger, in each case, until thereafter amended.

In addition, at the effective time of the merger, by virtue of the merger and without any further action on the part of Walmart, Merger Sub, VIZIO or any stockholder of VIZIO, (1) the board of directors of the surviving corporation immediately after the effective time of the merger will be the board of directors of Merger Sub as of immediately prior to the effective time of the merger, each to hold office until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified and (2) the officers of the surviving corporation immediately after the effective time of the merger will be the officers of Merger Sub as of immediately prior to the effective time of the merger, each to hold office until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified.

Conversion of Shares

At the effective time of the merger, by virtue of the merger and without any further action on the part of Walmart, Merger Sub, VIZIO or any stockholder of VIZIO, each share of our common stock outstanding as of immediately prior to the effective time of the merger (other than shares of our common stock that are (1) as of immediately prior to the effective time of the merger (i) held by us (or held in our treasury) or held, directly or indirectly, by any of our wholly owned subsidiaries or (ii) held directly or indirectly by Walmart or Merger Sub or any other wholly owned subsidiary of Walmart or (2) held by stockholders or owned by beneficial owners of shares of our common stock who have neither voted in favor of the adoption of the merger agreement or approval of the merger nor consented thereto in writing and properly, timely and validly exercised their statutory rights of appraisal in accordance with Section 262 of the DGCL (we refer to such shares of our common stock as the “excluded shares”)) will be cancelled and automatically converted into the right to receive $11.50 in cash, without interest and less any applicable withholding taxes. Further, each share of the common stock, $0.0001 par value per share, of Merger Sub outstanding immediately prior to the effective time of the merger will be converted into one share of common stock of the surviving corporation.

 

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If, during the period commencing on the date of the merger agreement and ending at the earlier of the effective time of the merger and the valid termination of the merger agreement, the outstanding shares of our common stock are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, or if a stock dividend is declared by us during such period, or a record date with respect to any such event occurs during such period, then the price per share will be adjusted to the extent appropriate to provide the same economic effect as contemplated by the merger agreement prior to such action.

Treatment of VIZIO Equity Awards

Pursuant to the merger agreement:

 

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at the effective time of the merger, each outstanding award of VIZIO RSUs that is outstanding and unvested as of immediately prior to the effective time of the merger after giving effect to any acceleration resulting from or in connection with the merger will be cancelled for no consideration;

 

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at the effective time of the merger, each cashed-out VIZIO option will be cancelled in exchange for the right to receive an amount in cash equal to the product of (1) the total number of shares of VIZIO common stock covered by the cashed-out VIZIO option, multiplied by (2) the excess of (i) the price per share over (ii) the per share exercise price of the cashed-out VIZIO option, subject to applicable withholding taxes;

 

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at the effective time of the merger, each cancelled VIZIO option will be cancelled for no consideration;

 

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at the effective time of the merger, each vested VIZIO RSU will be cancelled in exchange for the right to receive an amount in cash equal to the product of (1) the price per share, multiplied by (2) the total number of shares of VIZIO common stock covered by the vested VIZIO RSU, subject to applicable withholding taxes;

 

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at the effective time of the merger, each cancelled VIZIO RSU award will be cancelled for no consideration; and

 

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effective as of immediately before the effective time of the merger, each director option and each director RSU that, in each case, is then outstanding and unvested will accelerate vesting in full.

The merger agreement provides that, on or promptly after the closing date of the merger, except as otherwise provided in the merger agreement, Walmart will grant a Walmart RSU award under Walmart’s Stock Incentive Plan of 2015 and its standard form of restricted stock unit agreement to each continuing employee who held a cancelled VIZIO award. Each Walmart RSU award will have a grant date fair value (determined in accordance with U.S. generally accepted accounting principles) equal to the product of (1) the total number of shares of VIZIO common stock covered by the corresponding cancelled VIZIO award, multiplied by (2) the excess of (i) the price per share over (ii) the per share exercise price of such cancelled VIZIO award, if any. Except as agreed between Walmart and any continuing employee, each Walmart RSU award will have the same vesting schedule as the cancelled VIZIO award (including any acceleration provisions), except that the regular time-based vesting of each tranche of a Walmart RSU award will occur on a Walmart monthly vesting date in the same month that the corresponding tranche of the corresponding cancelled VIZIO award would have vested under the regular time-based vesting schedule that applied to that tranche, subject to the continuing employee’s continued service with Walmart or any of its subsidiaries.

Treatment of the ESPP

Under the merger agreement, we are required to take action to provide for the following with respect to the ESPP, (1) no new offering period (or similar period during which shares may be purchased) will begin under the ESPP after the date of the merger agreement, (2) ESPP participants may not increase their payroll deductions under the ESPP from those in effect on the date of the merger agreement, (3) no new participants may begin

 

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participating in the ESPP after the date of the merger agreement, (4) any offering period (or similar period during which shares may be purchased) in progress under the ESPP as of the date of the merger agreement will be the final offering period under the ESPP and will be terminated on the final exercise date, (5) any pro rata adjustments that may be necessary to reflect the shortened offering period (or similar period) will be made, but the shortened offering period (or similar period) will otherwise be treated as a fully effective and completed offering period for all purposes under the ESPP, (6) each participant’s then-outstanding share purchase right under the ESPP will be exercised as of the final exercise date and (7) the ESPP will be terminated as of the effective time of the merger.

Payment and Issuance of Merger Consideration; Surrender of Shares

Prior to the closing date, Walmart will select a reputable paying agent reasonably acceptable to us, and at or prior to the closing of the merger, Walmart will deposit (or cause to be deposited) with the paying agent, cash sufficient to make payments of the merger consideration payable pursuant to the merger agreement.

Promptly after the effective time of the merger, the paying agent will mail to persons who were record holders of our certificated shares of our common stock immediately prior to the effective time of the merger, (1) a letter of transmittal in customary form (including a provision confirming that the delivery of certificates will be effected, and risk of loss and title to the certificates will pass, only upon the proper delivery of such certificates to the paying agent) and (2) instructions for surrendering our certificates in exchange for payment of the merger consideration. Each holder of a certificate or certificates representing our common stock immediately prior to the effective time of the merger (other than holders of excluded shares) will, upon surrender thereof to the paying agent, together with a properly completed and duly executed letter of transmittal and such other documents as may be reasonably required by the paying agent or Walmart, be entitled to receive the price per share for each share of our common stock represented by such certificate or certificates, payable net to the holder in cash, without interest and less applicable withholding taxes. The common stock so surrendered will be cancelled.

In the event of a transfer of ownership of any shares of our common stock which is not registered in our transfer records, the paying agent may pay the merger consideration to a person or entity other than the holder in whose name the certificate formerly representing such shares is registered if (1) such certificate is properly endorsed or is otherwise in the proper form for transfer and (2) such holder pays any fiduciary or surety bonds and any transfer or similar taxes required by reason of the payment of such merger consideration to a person or entity other than such holder (or will have established to the reasonable satisfaction of Walmart that such bonds and taxes have been paid or are not applicable).

If any certificate representing our common stock has been lost, stolen or destroyed, Walmart may, in its discretion and as a condition to the payment of any merger consideration with respect to the shares of our common stock previously represented by such certificate, require the owner of such lost, stolen or destroyed certificate to provide an appropriate affidavit and to deliver a customary bond as indemnity against any claim that may be made against the paying agent, Walmart, Merger Sub or the surviving corporation with respect to such certificate.

Any holder of uncertificated shares will not be required to deliver a certificate or an executed letter of transmittal to the paying agent to receive such holder’s portion of the merger consideration payable in respect thereof. In lieu thereof and in exchange therefor, upon receipt of an “agent’s message” at the effective time of the merger, holders of uncertificated shares will be entitled to the cash consideration that such holders have the right to receive. The uncertificated shares so surrendered will be cancelled.

No interest will be paid or accrued on the merger consideration payable for the benefit of the holders of certificated or uncertificated shares.

Any portion of the cash amounts deposited by Walmart with the paying agent that has not been distributed to our former holders of our common stock within 180 days after the effective time of the merger will be delivered to

 

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Walmart upon demand (including any interest accrued with respect thereto), and any former holders of our common stock who have not surrendered their certificates, or complied with the procedures established by the paying agent for the surrender of uncertificated shares, may thereafter look only to Walmart for satisfaction of such holders’ claims for merger consideration. If any certificate or uncertificated share has not been surrendered by the earlier of (1) the fifth anniversary of the effective time of the merger and (2) the date immediately prior to the date on which the cash amount that such certificate or uncertificated share represents the right to receive would otherwise escheat to or become the property of any governmental body of competent jurisdiction, then such cash amount will, to the extent permitted by applicable laws, become the property of the surviving corporation, free and clear of any claim or interest of any person or entity previously entitled thereto.

Representations and Warranties

We, Walmart and Merger Sub made representations and warranties in the merger agreement regarding themselves and, as applicable, their respective subsidiaries that are subject, in some cases, to specified exceptions and qualifications contained in the merger agreement (including “knowledge” and materiality qualifications and qualifications referring to dollar thresholds) and are further modified and limited by a confidential disclosure schedule delivered by us to Walmart. The representations and warranties made by us are also subject to, and qualified by, certain information disclosed in our filings made with the SEC at least one business day before the date of the merger agreement. These representations and warranties relate to, among other things:

 

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corporate organization and similar corporate matters, including corporate standing and qualification to do business under applicable laws;

 

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subsidiaries;

 

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capitalization and equity securities;

 

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corporate power and authority to enter into and to perform obligations under the merger agreement and to complete the transactions contemplated thereby;

 

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non-contravention of laws and organizational, governing and similar corporate documents in connection with the execution, delivery and performance of the merger agreement and the completion of the merger and the other transactions contemplated by the merger agreement;

 

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legal proceedings and orders;

 

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accuracy of information supplied for inclusion in this information statement;

 

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documents required to be filed with the SEC since March 24, 2021, and the content and preparation of financial statements;

 

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absence of certain changes, events and actions since September 30, 2023, or since such date and through the date of the merger agreement, as applicable;

 

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title to tangible assets;

 

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real property matters;

 

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intellectual property matters;

 

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privacy and data security;

 

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the stipulated order;

 

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material contracts;

 

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matters relating to our products;

 

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matters relating to our major customers and suppliers;

 

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absence of certain liabilities;

 

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compliance with legal requirements;

 

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