On February 3, 2019, we entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among Maxwell, Tesla, Inc., a Delaware corporation ("Tesla") and Cambria Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Tesla ("Merger Sub"), which contemplates the acquisition of Maxwell by Tesla, through Merger Sub. The Merger Agreement contemplates that Tesla will commence an all stock exchange offer for all of the issued and outstanding shares of Maxwell (the "Offer"), followed by a merger of Merger Sub with and into Maxwell pursuant to which Maxwell will survive as a wholly-owned subsidiary of Tesla (the "Merger").
In the Offer, each Maxwell stockholder who elects to participate in the Offer will receive a fractional share of common stock of Tesla, $0.001 par value ("Tesla Common Stock") for each share of Maxwell common stock, par value $0.10 ("Maxwell Common Stock") exchanged in the Offer. Tesla, through Merger Sub, will commence the Offer to purchase each issued and outstanding share of Maxwell Common Stock for a fraction of a share of Tesla Common Stock, equal to the quotient obtained by dividing $4.75 by the volume weighted average closing sale price of one (1) share of Tesla Common Stock as reported on the NASDAQ Global Select Market ("NASDAQ") for the five (5) consecutive trading days ending on and including the second trading day immediately preceding the expiration of the Offer (the "Tesla Trading Price"). However, in the event that the Tesla Trading Price is equal to or less than $245.90, then each share of Maxwell Common Stock shall be exchanged for 0.0193 of a share of Tesla Common Stock. Such shares of Tesla Common Stock, plus any cash paid in lieu of any fractional shares of Tesla Common Stock, is referred to as the "Offer Consideration".
At the effective time of the Merger (the "Effective Time"), each outstanding option to purchase Maxwell Common Stock that is outstanding, unexercised and unexpired immediately prior to the Effective Time ("Maxwell Option") shall be automatically assumed by Tesla and converted into and become an option to acquire Tesla Common Stock, on the same terms and conditions as were applicable to such Maxwell Option as of immediately prior to the Effective Time, subject to an adjustment for the number of shares and the exercise price pursuant to which such Maxwell Option will be converted into Tesla Common Stock. At the Effective Time, each Maxwell restricted share unit ("Maxwell RSU") that is outstanding immediately prior to the Effective Time, shall be assumed by Tesla and converted automatically into and become a restricted stock unit covering shares of Tesla Common Stock, on the same terms and conditions as were applicable under the Maxwell RSU as of immediately prior to the Effective Time, subject to an adjustment for the number of shares in which the RSU will be converted into Tesla Common Stock.