Material Agreement - Form 8-K

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Agreement and Plan of Merger

On April 14, 2024, Snap One Holdings Corp., a Delaware corporation ("Snap One"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), with Resideo Technologies, Inc., a Delaware corporation ("Resideo"), and Pop Acquisition Inc., a Delaware corporation and a wholly owned subsidiary of Resideo ("Merger Sub"), pursuant to which, subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into Snap One, with Snap One continuing as the surviving corporation (the "Surviving Corporation") and a wholly owned subsidiary of Resideo (the "Merger").

The board of directors of Snap One (the "Board") unanimously approved the Merger Agreement and the transactions contemplated thereby. Following execution of the Merger Agreement on April 14, 2024, in lieu of filing a proxy statement and holding a stockholders' meeting, stockholders holding in aggregate approximately 72% of the issued and outstanding shares of Snap One's common stock duly executed and delivered to Resideo a written consent, adopting and approving the Merger Agreement and the transactions contemplated thereby, including the Merger (the "Written Consent"). Pursuant to the Merger Agreement, Snap One will prepare and file with the Securities and Exchange Commission an information statement for its stockholders describing the pending Merger and containing the information with respect to the Merger specified in Schedule 14C promulgated under the Securities Exchange Act of 1934, as amended, and containing notices required under Delaware law.

Merger Consideration and Treatment of Equity Awards

As of the effective time of the Merger (the "Effective Time"), (i) each issued and outstanding share of capital stock of Merger Sub will be converted intoand become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation and (ii) each issued and outstanding share of common stock of Snap One, par value $0.01 per share ("Snap One Common Stock") (other than shares as to which appraisal rights have been properly exercised in accordance with Delaware law, shares of restricted Snap One Common Stock, and any shares held by Snap One, Resideo, Merger Sub or any other direct or indirect wholly owned subsidiary of Snap One or Resideo) will be converted into the right to receive $10.75 in cash, without interest and less any applicable withholding taxes (the "Merger Consideration").

The Merger Agreement also provides that, at the Effective Time, the (i) issued and outstanding options, including phantom options, to purchase Snap One Common Stock (all of which are "out-of-the-money") will be cancelled for no consideration, (ii) issued and outstanding shares of restricted Snap One Common Stock will be cancelled and converted into the right to receive the Merger Consideration, (iii) issued and outstanding restricted stock units, including phantom restricted stock units, covering Snap One Common Stock that are vested immediately prior to the Effective Time (after taking into account any accelerated vesting that occurs immediately prior to, or in connection with, the Effective Time) will be cancelled and converted into the right to receive an amount in cash, without interest, equal to (a) the total number of shares of Snap One Common Stock subject to such restricted stock unit (or phantom restricted stock unit) immediately prior to the Effective Time multiplied by (b) the Merger Consideration, (iv) issued and outstanding performance stock units covering Snap One Common Stock will be assumed by Resideo and automatically converted into a Resideo restricted stock unit award with respect to shares of common stock of Resideo, par value $0.001 per share (the "Resideo Common Stock"), assuming a number of shares of Snap One Common Stock based on target performance (or actual performance with respect to any performance stock units subject to a performance period that has been completed prior to the Effective Time) (the "Converted PSUs"), in each case pursuant to an exchange ratio that is designed to maintain the intrinsic value of the award immediately prior to the Effective Time and (v) issued and outstanding restricted stock units, including phantom restricted stock units, covering Snap One Common Stock that are not vested immediately prior to the Effective Time will be assumed by Resideo and automatically converted into Resideo restricted stock unit awards with respect to shares of Resideo Common Stock (the "Converted RSUs" and "Converted Phantom RSUs", as applicable), in each case pursuant to an exchange ratio that is designed to maintain the intrinsic value of the award immediately prior to the Effective Time; provided, that the Converted Phantom RSUs will be settled in cash by reference to the value of shares of Resideo Common Stock (as of the applicable vesting date). Any fractional shares resulting from the conversion of awards covering Snap One Common Stock into Converted RSUs and Converted Phantom RSUs, as applicable, will be converted into a right to receive an amount in cash at the Effective Time equal to (x) such fractional share multiplied by (y) the Parent Common Stock Value (as defined in the Merger Agreement). Following the Effective Time, the Converted PSUs, Converted RSUs and Converted Phantom RSUs will be subject to the terms of Resideo's Amended and Restated 2018 Stock Incentive Plan and the other terms and conditions (other than the performance vesting conditions) that were previously applicable to the corresponding equity award of Snap One, except as set forth in the Merger Agreement.