UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement |
On February 26, 2020, Palo Alto Networks, Inc. (the “Company”) entered into an accelerated share repurchase agreement (the “ASR Contract”) with Morgan Stanley & Co. LLC (“MSCO”) to repurchase an aggregate of approximately $1.0 billion of the Company’s common stock. Under the ASR Contract, the Company will make payments of approximately $1 billion in the aggregate to MSCO and will receive an initial delivery of approximately 4.2 million shares of common stock in the aggregate from MSCO. The exact number of shares the Company will repurchase under the ASR Contract will be based generally upon the average daily volume weighted average price of the Company’s common stock during the repurchase period, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR Contract. At settlement, under certain circumstances, MSCO may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required either to deliver shares of common stock or to make a cash payment to MSCO. Final settlement of the transactions under the ASR Contract is expected to occur during our fourth fiscal quarter of 2020. The terms of the accelerated share repurchases under the ASR Contract are subject to adjustment if the Company were to enter into, or announce, certain types of transactions or to take certain corporate actions.
The ASR Contract contains the principal terms and provisions governing the accelerated share repurchases, including, but not limited to, the mechanism used to determine the number of shares that will be delivered, the required timing of delivery of the shares, the circumstances under which MSCO is permitted to make adjustments to valuation and calculation periods and various acknowledgements, representations and warranties made by the Company, on the one hand, and MSCO, on the other hand, to one another.
The foregoing description of the ASR Contract is a summary and is qualified in its entirety by the terms of the ASR Contract, a copy of which will be filed with the Company’s quarterly report on Form 10-Q for the fiscal quarter ending April 30, 2020.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth under Item 1.01, “Entry into a Material Definitive Agreement,” is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PALO ALTO NETWORKS, INC. | ||
| By: |
/s/ Kathleen Bonanno | |
| Kathleen Bonanno | ||
| Chief Financial Officer | ||
Date: February 26, 2020