We cordially invite you to attend the special meeting of stockholders of ATMI, Inc. (
ATMI
), which will be held at
ATMIs corporate offices located at 7 Commerce Drive, Danbury, Connecticut 06810 at 10:00 a.m. EST on [
], 2014.
1. a proposal to adopt the Agreement and Plan of Merger, dated as of February 4, 2014 (as it may be amended from time to
time), by and among ATMI, Entegris, Inc. (
Entegris
) and Atomic Merger Corporation, a wholly owned subsidiary of Entegris (
Merger Sub
);
2. a proposal to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at
the time of the special meeting to adopt the merger agreement; and
3. a non-binding advisory proposal to approve the
golden parachute compensation payable to ATMIs named executive officers in connection with the merger.
If the merger is completed,
you will be entitled to receive $34.00 in cash, without interest and less any applicable withholding taxes, for each share of ATMI common stock you own as of the date of the merger.
After careful consideration, our board of directors, by unanimous vote, approved and declared advisable the execution, delivery and
performance of the merger agreement and the transactions contemplated by the merger agreement, including the merger, and determined that entering into the merger agreement and consummating the merger, are fair to, and in the best interests of,
ATMIs stockholders.
Accordingly, our board of directors recommends that you vote FOR the proposal to adopt the merger agreement, FOR the proposal to adjourn the special meeting, if necessary, and FOR the
non-binding advisory proposal to approve the golden parachute compensation payable to ATMIs named executive officers in connection with the merger.
The proxy statement accompanying this letter provides you with detailed information about the proposed merger and the special meeting of
stockholders to vote on the adoption of the merger agreement. We encourage you to read the entire proxy statement and the merger agreement carefully. A copy of the merger agreement is attached as Annex A to the accompanying proxy statement. You may
also obtain more information about ATMI from documents we have filed with the Securities and Exchange Commission.
Douglas A. Neugold
PROPOSAL 1
ADOPTION OF THE MERGER AGREEMENT
Background of the Merger
As part of its
ongoing evaluation of business and strategic planning alternatives, ATMIs board of directors, from time to time has discussed and reviewed strategic goals and alternatives. These reviews have included consideration of potential transactions
and business combinations, as well as ATMIs standalone business plans and prospects.
During the spring of 2013, representatives of
ATMIs management, prompted, in part, by concerns about the challenging market dynamics associated with the maturing microelectronics industry, prepared a preliminary analysis of various strategic alternatives potentially available to the
Company, including maintaining the status quo, the return of cash to stockholders (through a dividend or share repurchase), taking ATMI private, one or more acquisitions and a sale of ATMI. At a meeting of the board of directors on May 22,
2013, representatives of ATMIs management presented to, and discussed with, the board of directors this preliminary analysis. At the conclusion of the meeting, the board of directors decided that ATMIs management and three directors,
Mark Adley (ATMIs lead independent director), Douglas Marsh and Mark Segall, would contact and begin interviewing investment banks to assist ATMI with its review of the potential strategic alternatives.
During June and July 2013, Messrs. Adley, Marsh and Segall, as well as members of ATMIs management, met with representatives from four
investment banks, including Barclays. The investment banks each made presentations regarding their capabilities and various strategic alternatives potentially available to ATMI. At the conclusion of the interviews, Messrs. Adley, Marsh and Segall
and representatives of ATMIs management determined that three of the investment banks, including Barclays, should make presentations to the entire board of directors at its next meeting.
On July 25, 2013, at a meeting of the board of directors, the board of directors received presentations from representatives of the three
investment banks regarding various strategic alternatives potentially available to ATMI to maximize stockholder value and the advantages and disadvantages of each alternative. The alternatives included a sale of ATMI, one or more acquisitions for
ATMIs Microelectronics business and/or Life Sciences business and a spin-off or sale of ATMIs Life Sciences business, as well as maintaining the status quo as a stand-alone company. In discussing a potential sale of ATMI, it was noted
that due to the different focus between ATMIs Microelectronics business and its Life Sciences business, the number of potential buyers for the entire Company was likely to be limited and, as a result, ATMI may need to explore separate sales of
its Microelectronics business and its Life Sciences business in order to maximize stockholder value. The board of directors then discussed the presentations made by the three investment banks and determined, based on the input of the representatives
of the investment banks at the meeting, to proceed with exploring a possible sale of ATMI because the board of directors considered this to be the option most likely to maximize stockholder value. The board of directors then authorized three
directors, Messrs Adley, Marsh and Segall, to further evaluate the three investment banks and to recommend one of them to be ATMIs financial advisor in connection with its evaluation of potential strategic alternatives.
On August 13, 2013, at a meeting of the board of directors, Mr. Adley updated the board of directors on discussions that he and
Messrs. Marsh and Segall had with each of the three investment banks that had made presentations at the July 25th board meeting and that their recommendation was to select Barclays to advise ATMI in connection with its evaluation of potential
strategic alternatives. The board of directors then approved the engagement of Barclays and authorized ATMIs management to explore a sale of ATMI either in one transaction or in separate sales of its Microelectronics business and its Life
Sciences business. Subsequently, ATMI entered into an engagement letter with Barclays, dated August 13, 2013, to act as financial advisor to ATMI.
25
In the following weeks, representatives of ATMIs management and representatives of Barclays
discussed the structure and timing of a potential sale of ATMI, including separate sales of ATMIs Microelectronics business and its Life Sciences business, while at the same time being opportunistic if a potential buyer for the entire company
emerged. Other than Company A (as described below), no potential buyer in either the Microelectronics business sales process or the Life Sciences business sales process showed more than a preliminary interest in acquiring both the Microelectronics
business and the Life Sciences business.
Beginning in early September 2013 and concluding on December 22, 2013 with the signing of a
transaction with respect to the Life Sciences business, representatives of ATMIs management, Barclays and ATMIs legal counsel, Weil, Gotshal & Manges LLP (referred to in this proxy statement as Weil), on behalf of ATMI,
conducted a sale process for ATMIs Life Sciences business.
Beginning in late September 2013 through early October 2013,
representatives of Barclays, on behalf of ATMI, contacted 21 potential strategic buyers for ATMIs Microelectronics business, including Entegris, jointly identified by representatives of ATMIs management and Barclays (including buyers
that may have been interested in solely the Microelectronics business or both the Microelectronics business and the Life Sciences business). Representatives of ATMIs management, after consultation with Barclays, determined not to contact any
financial buyers because, among other reasons, the cash flow generated by the Microelectronics business likely would not be able to support the leverage that a financial buyer would need to put on the Microelectronics business to achieve its
required return on investment. Barclays, on behalf of ATMI, subsequently distributed a form of a confidentiality agreement with certain standstill restrictions that would terminate upon the signing of a transaction for the sale of ATMI, together
with certain initial information in the form of a summary memorandum, to the potential buyers. During this period, confidentiality agreements were negotiated and signed with nine potential buyers, including Entegris on September 25, 2013. The
remaining potential buyers declined to move forward with the process for various reasons.
On September 25, 2013, the board of
directors held a meeting at which representatives of ATMIs management, Barclays and Weil were present. At the meeting, representatives of Barclays provided an update to the board of directors on the processes for the potential sales of
ATMIs Microelectronics business and its Life Sciences business. With respect to the sale of ATMIs Microelectronics business, representatives of ATMIs management and Barclays updated the board of directors on the potential buyers
that had been contacted and the timing for a signing of a potential transaction, which was expected to follow several weeks behind the signing for the sale of ATMIs Life Sciences business (expected to be early December 2013) due to ATMIs
expectation that potential buyers of the Microelectronics business would need to understand the final structure of the Life Sciences business sale agreement to finalize bids for the Microelectronics business.
From October 1, 2013 through October 18, 2013, the nine potential buyers who executed confidentiality agreements, including
Entegris, attended presentations regarding ATMIs Microelectronics business conducted by representatives of ATMIs management.
From October 11, 2013 through October 15, 2013, representatives of Barclays, on behalf of ATMI, sent a first round process letter
for the sale of ATMIs Microelectronics business to nine potential buyers who, based on conversations with representatives of Barclays, were interested in submitting an initial indication of interest and had signed a confidentiality agreement.
The first round process letter indicated that initial indications of interests were due on October 24, 2013, and that bidders should submit initial indications of interests for ATMIs Microelectronics business assuming that the Life
Sciences business had already been sold and on an enterprise value (rather than per share) basis given uncertainties in the net after-tax cash proceeds from the sale of the Life Sciences business.
On October 16, 2013, the board of directors held a meeting at which representatives of ATMIs management and Barclays were present.
At the meeting, the representatives of Barclays provided an update to the board of directors on the processes for the potential sales of ATMIs Microelectronics business and its Life Sciences business.
26
On October 17, 2013, a potential buyer that we refer to as Company A, which executed a
confidentiality agreement with ATMI, informed representatives of Barclays that it would not be moving forward with the Microelectronics business sales process as outlined in the first round process letter. On the same day, Company A submitted a
letter to ATMI, which outlined a proposal for a strategic transaction between ATMI and Company A. The proposal provided for a stock-for-stock merger of equals type transaction in which Company A would acquire 100% of the outstanding
shares of ATMI (including both the Microelectronics business and the Life Sciences business) in exchange for shares of common stock of Company A based on a fixed exchange ratio per share such that ATMIs stockholders would own 49% of the pro
forma combined company. Based on the closing price of Company As common stock on October 17, 2013, Company As proposal represented a purchase price of approximately $28.94 per share, or approximately a 3.1% premium to the closing
price of the shares of ATMI common stock on October 17, 2013. Following receipt of the proposal, representatives of Barclays, after discussion with representatives of ATMIs management, communicated to Company A that they would respond to
the proposal after the next meeting of the board of directors.
During the last week of October 2013 through the first week of November
2013, three of the nine potential buyers that were sent a first round process letter, including Entegris, submitted an initial indication of interest for a potential acquisition of ATMIs Microelectronics business. Entegris submitted an initial
indication of interest for an all cash transaction with an enterprise value range of $800 million to $900 million. One of the potential buyers in the process, which we refer to as Company B, submitted an initial indication of interest for an all
cash transaction with an enterprise value range of $875 million to $1,025 million. Another potential buyer in the process, which we refer to as Company C, submitted an initial indication of interest for an all cash transaction with an enterprise
value of $850 million. The remaining parties either expressed an interest in only a very specific business line within the Microelectronics business or declined to move forward with the process.
On November 1, 2013, a story was published in various media outlets that ATMI had hired Barclays to explore strategic alternatives for
ATMI. In response to the story, ATMI issued a press release confirming that it was exploring strategic alternatives and that it had engaged Barclays.
On November 5, 2013, the board of directors held a meeting at which representatives of ATMIs management, Barclays and Weil were
present. Representatives of Barclays and Weil provided an update to the board of directors on the processes for potential sales of ATMIs Microelectronics business and its Life Sciences business. In particular, representatives from Barclays
reviewed with the board of directors the merger-of-equals proposal from Company A and noted that the proposal was for a stock-for-stock merger as opposed to an all cash transaction. In addition, the representatives from Barclays noted
the low premium implied by Company As proposal, which was not unusual for a merger-of-equals transaction. The board of directors, following discussions with representatives of ATMIs management, Barclays and Weil, determined that the
proposed merger of equals transaction was not in the best interests of the ATMI stockholders, especially given the low implied premium and the fact that the sales processes for both ATMIs Microelectronics business and its Life
Sciences business appeared to be promising. At the conclusion of the meeting, the board of directors determined that ATMI should continue to pursue the separate sales processes for ATMIs Microelectronics business and its Life Sciences business
and not to pursue the merger of equals proposal from Company A. The board of directors also instructed Barclays to inform Company A of its decision. Subsequently, representatives of Barclays informed Company A that ATMI would not be
interested in pursuing a merger of equals transaction at this time but that, should ATMIs view change at a later time, representatives of Barclays would contact Company A.
Also, on November 5, 2013, a company, which we refer to as Company D, which had not been part of the initial list of potential strategic
buyers identified by representatives of ATMIs management and Barclays because, based on publicly available information, it did not seem to have a meaningful microelectronics business, communicated to representatives of Barclays that, after
reading the November 1, 2013 press release confirming that ATMI was exploring strategic alternatives, Company D was interested in participating in the Microelectronics business sales process. On November 8, 2013, representatives of
Barclays, on behalf of ATMI, sent to Company D the same first round process letter previously provided to other potential buyers. On November 12, 2013, Company D signed a confidentiality agreement with respect to the Microelectronics
27
business sales process with the same standstill restrictions as were included in the other confidentiality agreements that would terminate upon the signing of a transaction for the sale of ATMI.
On that same day, Company D attended a presentation regarding ATMIs Microelectronics business conducted by representatives of ATMIs management.
During the period from November 7, 2013, through November 11, 2013, Entegris, Company B and Company C attended presentations
regarding ATMIs Microelectronics business conducted by representatives of ATMIs management. Starting at this time, the potential buyers were also granted access to an online data room containing non-public information about ATMIs
Microelectronics business, including certain projections prepared by ATMIs management. See the section of this proxy statement entitled
Certain Financial Forecasts.
On November 13, 2013, a company that had previously been sent the first round process letter for the Microelectronics business, which we
refer to as Company E, submitted a verbal indication of interest for an all cash transaction with an enterprise value of $800 million. As part of its submission, Company E communicated to representatives of Barclays that it would not be in a
position to increase its purchase price materially from what it had included in its indication of interest. As a result, Company E was excluded from the final round process letter that was sent to potential buyers the following week.
Also on November 13, 2013, the board of directors, in light of the two simultaneous sales processes for the Microelectronics business and
its Life Sciences business, created a transaction committee comprised of Messrs. Adley and Segall, together with Douglas Neugold (Chairman of the Board and Chief Executive Officer of ATMI) to oversee the review of potential strategic alternatives,
including reviewing the terms and conditions of any potential transaction and to regularly update the board of directors with respect to the status and terms of any potential transaction. None of the members of the transaction committee has any
agreement, understanding or arrangement with Entegris for continued employment or service after the consummation of the merger.
On
November 18, 2013, representatives of Barclays, on behalf of ATMI, sent a final round process letter to each of Entegris, Company B and Company C. The final round process letter requested that each potential buyer submit, by December 13,
2013, a final, written proposal for the acquisition of ATMI (assuming that the Life Sciences business has already been sold).
On
November 19, 2013, Company D submitted an initial indication of interest for an all cash transaction with an enterprise value range of $800 million to $900 million. Based on this indication of interest, Company D was invited to join the final
round of the Microelectronics business sales process and was sent the final round process letter.
On November 26, 2013, Company D
attended a presentation regarding ATMIs Microelectronics business conducted by representatives of ATMIs management.
On
November 27, 2013, a draft merger agreement, prepared by representatives of Weil on behalf of ATMI, was made available to each of the final round bidders for the Microelectronics business.
On December 4, 2013, the board of directors held a meeting at which representatives of ATMIs management, Barclays and Weil were
present. At the meeting, representatives of Barclays and Weil provided an update to the board of directors on the processes for the potential sales of ATMIs Microelectronics business and its Life Sciences business. Representatives of Barclays
noted that the potential buyers for the Microelectronics business had requested, as part of their due diligence, sufficient time to review the definitive agreement with respect to the sale of the Life Sciences business. As a result, the
representatives of Barclays recommended, and the board of directors approved, an extension of the bid deadline for the Microelectronics business sales process from December 13, 2013 to early January 2014.
On December 6, 2013, representatives of Barclays, on behalf of ATMI, sent a letter to each of the four remaining potential buyers in the
Microelectronics business sales process informing them that the bid deadline had been extended to January 7, 2014.
28
On December 11, 2013, the board of directors held a meeting at which representatives of
ATMIs management, Barclays and Weil were present. At the meeting, representatives of Barclays and Weil provided an update to the board of directors on the processes for the potential sales of ATMIs Microelectronics business and its Life
Sciences business. Further, representatives of Barclays provided an overview of the initial indications of interest that had been received with respect to the Microelectronics business sales process and an update on the due diligence activities of
the remaining bidders in the process.
On December 22, 2013, ATMI announced that it had entered into a definitive agreement with Pall
Corporation with respect to the sale of its Life Sciences business for a purchase price of $185 million in cash, subject to certain adjustments for working capital. Prior to its execution, the board of directors approved the definitive agreement and
declared it to be advisable, fair to and in the best interests of ATMI and its stockholders.
On December 26, 2013, Company D
informed representatives of Barclays that it would be withdrawing from the Microelectronics business sales process citing its revised analysis of the growth profile of the microelectronics industry generally and ATMIs growth assumptions and
the fact that, in its view, synergies would be difficult to achieve.
In early January 2014, in response to requests from certain of the
remaining bidders in the Microelectronics business sales process, representatives of Barclays, on behalf of ATMI, informed each of the remaining bidders that the bid deadline would be moved to January 16, 2014.
On January 8, 2014, Company B informed representatives of Barclays that it would not be submitting a final bid. Company B explained that
it had revised its view on the value of ATMIs Microelectronics business and believed that its final bid would not be competitive in light of the then-current share price of ATMI but that Barclays should reach out to Company B should it think
that it may be competitive in the process at a later stage. Representatives of Barclays informed representatives of ATMIs management of this development, including Mr. Neugold, who subsequently informed the other members of the
transaction committee and other directors.
On January 15, 2014, Company C informed representatives of Barclays that it would not be
submitting a final bid. Company C explained that its ongoing work with respect to evaluating other opportunities in a different industry sector precluded it from pursuing ATMIs Microelectronics business at this time and that while it believed
ATMI could be a good strategic fit, it was not in a position to execute a transaction with ATMI at this time. Representatives of Barclays informed representatives of ATMIs management of this development, including Mr. Neugold, who
subsequently informed the other members of the transaction committee and other directors.
On January 16, 2014, Entegris submitted a
proposal, including a mark-up of the merger agreement that had been provided to bidders and a draft debt commitment letter, for the acquisition of ATMI for cash at an enterprise value of $830 million. Based on certain assumptions with respect to
ATMIs projected cash balances, debt and other obligations, Barclays advised ATMIs management that Entegris proposal represented a proposed transaction at approximately $32.37 per share. In addition, the terms of Entegris
proposal included (1) a reduction in the proposed purchase price if ATMIs unrestricted cash balance at closing was below a specified amount, (2) a reverse termination fee equal to 5% of the transaction value payable by
Entegris to ATMI under certain circumstances if Entegris was unable to consummate the transaction due to its failure to obtain the contemplated debt financing and (3) a termination fee equal to 4% of the transaction value payable by ATMI to
Entegris if ATMI were to terminate the transaction under certain circumstances to accept a superior proposal. Representatives of Barclays informed representatives of ATMIs management of this development, including Mr. Neugold,
who subsequently informed the other members of the transaction committee and other directors.
On January 20, 2014, the board of
directors held a meeting at which representatives of ATMIs management, Barclays and Weil were present. At the meeting, representatives of Barclays presented the board of
29
directors with a review of the Microelectronics business sales process, including an analysis of the proposal from Entegris. Members of the board of directors discussed the proposal in comparison
to other potential strategic alternatives available to ATMI, including remaining a standalone company and using excess cash (including the projected after-tax cash proceeds from the sale of the Life Sciences business) for a special dividend or a
share repurchase program. As part of this discussion, representatives of Barclays reviewed with the board of directors a preliminary valuation analysis of ATMI (excluding the Life Sciences business and including the projected after-tax cash proceeds
from the sale of the Life Sciences business). The board of directors also discussed with representatives from ATMIs management and Barclays potential headwinds in the microelectronics industry and the achievability of ATMI managements
financial projections. The board of directors concluded the meeting by requesting that Barclays prepare a more detailed analysis of Entegris proposal as compared to other potential strategic alternatives potentially available to ATMI,
including maintaining the status quo as a stand-alone company, and that ATMIs management prepare a set of financial projections that represented a downside sensitivity to the Budget case. See the section of this proxy statement entitled
Certain Financial Forecasts.
On January 22, 2014, the board of directors held a meeting at which
representatives of ATMIs management, Barclays and Weil were present. At the meeting, representatives of Barclays reviewed with the board of directors various potential strategic alternatives available to ATMI, including a sale of ATMI to
Entegris for cash, a merger of equals transaction with Company A, growing ATMI through strategic acquisitions or remaining a standalone company and using excess cash (including the projected after-tax cash proceeds from the sale of the
Life Sciences business) for a special dividend or a share repurchase program. As part of this discussion, representatives of Barclays reviewed with the board of directors a preliminary valuation analysis of ATMI (excluding the Life Sciences business
and including the projected after-tax cash proceeds from the sale of the Life Sciences business). At the conclusion of the discussion, the board of directors determined that Entegris current proposal was insufficient and instructed the
representatives of Barclays to request that Entegris submit a higher, revised bid on a per share basis. In addition, the board of directors also instructed the representatives of Barclays to contact Company A, Company B and Company C to see if they
had any renewed interest in making a proposal to acquire ATMI. In particular, with respect to Company B and Company C, Barclays was instructed to guide each of those potential buyers to a price of at least $35.00 per share of ATMI common stock.
On the evening of January 22, 2014, representatives of Barclays, on behalf of ATMI, contacted representatives of Entegris and requested
that Entegris submit a higher, revised bid on a per share basis no later than the close of business on January 23, 2014.
On
January 23, 2014, representatives of Entegris contacted representatives of Barclays with a revised bid of $34.00 per share in cash. The revised bid was also subject to several conditions, including the completion of confirmatory due diligence,
obtaining exclusivity and a potential purchase price adjustment if ATMI did not have a specified amount of unrestricted cash as of March 31, 2014. The representatives of Entegris characterized the proposal as Entegris best and
final offer.
On January 24, 2014, representatives of Barclays, on behalf of ATMI and in accordance with the instructions from
the board of directors at the meeting on January 22, 2014, contacted each of Company A, Company B and Company C to solicit any renewed interest in a potential acquisition of ATMI. Each of Company A and Company C stated that they would get back
to representatives of Barclays over the next few days. Company B communicated that it would not be able to bid for ATMI at the $35.00 per share price that the representatives of Barclays had indicated.
Also, on January 24, 2014, the board of directors held a meeting at which representatives of ATMIs management, Barclays and Weil
were present. At the meeting, representatives of Weil reviewed with the board of directors its fiduciary duties, including the legal standards applicable to its decisions with respect to a potential sale of ATMI. Representatives of Barclays then
updated the board of directors with respect to the conversations that they had had with each of Company A, Company B and Company C and Entegris revised proposal to acquire ATMI for $34.00 per share in cash. The board of directors, together
with the representatives of ATMIs management,
30
Barclays and Weil, then discussed the various potential strategic alternatives available to ATMI as compared to Entegris revised proposal, including a merger of equals
transaction with Company A, growing ATMI through strategic acquisitions or remaining a standalone company and using excess cash (including the projected after-tax cash proceeds from the sale of the Life Sciences business) for a special dividend or a
share repurchase program. As part of this discussion, representatives of Barclays reviewed with the board of directors a preliminary valuation analysis of ATMI (excluding the Life Sciences business and including the projected after-tax cash proceeds
from the sale of the Life Sciences business). At the conclusion of the meeting, the board of directors authorized representatives of Barclays to make a counter-offer to Entegris at $35.00 per share in cash.
On the evening of January 24, 2014, representatives from Barclays, on behalf of ATMI, communicated to representatives of Entegris a
counter-offer to sell ATMI for $35.00 per share in cash.
On January 27, 2014, representatives of Entegris responded to
representatives of Barclays that it would not be able to offer a price above $34.00 per share and that the $34.00 per share price remained its best and final offer.
During this time, Company A and Company C responded to the previous inquiries by representatives of Barclays. Company A communicated that it
would submit a proposal later in the week. Company C communicated that while a price range of $35.00 per share was potentially achievable, it would not be in a position to sign a transaction for at least another three to six months because, as it
had stated earlier, it was currently evaluating other opportunities in a different industry sector.
Also, on January 27, 2014, the
board of directors held a meeting at which representatives of ATMIs management, Barclays and Weil were present. At the meeting, representatives of Barclays informed the board of directors that Entegris had declined to increase its proposal and
$34.00 per share in cash remained its best and final offer. In addition, Barclays updated the board of directors regarding the conversations it had had with each of Company A and Company C. The board of directors, together with the
representatives of ATMIs management, Barclays and Weil, then discussed Entegris proposal. In particular, the board of directors were concerned with (1) the purchase price adjustment related to ATMIs unrestricted cash balance,
(2) the risk associated with Entegris not obtaining the debt financing necessary to fund the proposed purchase price, including the size of the 5% of transaction value reverse termination fee proposed by Entegris and (3) the
size of the 4% of transaction value termination fee payable by ATMI to Entegris if ATMI were to terminate the transaction under certain circumstances to accept a superior proposal. At the conclusion of the meeting, the board of directors
authorized management, Barclays and Weil to continue to pursue a sale of ATMI to Entegris at $34.00 per share in cash but to seek improvements to the terms of the transaction with respect to (1) the price adjustment related to ATMIs
unrestricted cash balance, (2) the reverse termination fee proposed by Entegris in favor of a remedy of specific performance and (3) decreasing the size of the termination fee from the 4% of transaction value termination fee
proposed by Entegris to closer to the 2% of transaction value as proposed by ATMI in the initial draft of the merger agreement.
Over the
next several days until February 3, 2014, representatives of ATMIs management and Barclays and Weil and representatives of Entegriss management and financial and legal advisors negotiated the outstanding terms of the transaction,
particularly the terms outlined above, and exchanged drafts of the merger agreement. During this time, the representatives of ATMIs management and Barclays and Weil kept the members of the transaction committee and ATMIs other directors
informed of the status of the negotiations and obtained guidance on negotiating positions.
On January 28, 2014, Company A verbally
communicated to representatives of Barclays that it was prepared to make a proposal to acquire ATMI for $33.00 per share consisting of a mix of approximately 85% cash and 15% Company A common stock. After Barclays conveyed to Company A that such an
offer would be insufficient to make Company As bid competitive in the process, Company A verbally communicated that it was prepared to submit a revised proposal. Barclays requested that Company A submit its revised proposal in writing.
On January 30, 2014, Company A submitted to ATMI a written proposal for the acquisition of ATMI at an indicated purchase price of $30.00
to $40.00 per share, of which (1) $17.00 to $27.00 per share in cash would be
31
paid by Company A, (2) $5.50 per share would be paid in shares of Company A common stock and (3) $7.50 per share in cash would be paid in the form of a special dividend by ATMI. In
addition, Company As proposal was subject to due diligence, which Company A anticipated would take a period of 21 days to complete. Representatives of ATMIs management reviewed Company As proposal with representatives of Barclays
and Weil, and informed the members of the transaction committee. ATMIs management, after receiving input from the members of the transaction committee and consulting with representatives of Barclays and Weil, concluded that the price range of
Company As proposal was too uncertain and the due diligence period was too long for ATMI to risk losing the proposed transaction with Entegris, which had previously indicated that it was unwilling to delay the process further. Representatives
from Barclays, on behalf of ATMI, informed Company A that it would need to submit a more precise proposal if it wanted the proposal to be considered further by ATMI.
On February 1, 2014, Company A submitted to ATMI a revised written proposal for the acquisition of ATMI at a purchase price of $33.00 to
$40.00 per share, of which (1) $20.00 to $27.00 per share in cash would be paid by Company A, (2) $5.50 per share would be paid in shares of Company A common stock and (3) $7.50 per share in cash would be paid in the form of a special
dividend by ATMI. Company As proposal continued to be subject to a 21 day due diligence process. Representatives of ATMIs management reviewed Company As proposal with representatives of Barclays and Weil, and informed the members
of the transaction committee.
On February 3, 2014, the board of directors held a meeting at which representatives of ATMIs
management, Barclays and Weil were present. The representatives of Weil began the meeting with a review of the fiduciary duties of the board of directors, including the legal standards applicable to its decisions with respect to a potential sale of
ATMI. The representatives of Weil then provided an overview of the key terms of the revised merger agreement that had been negotiated with Entegris including (1) that the consideration of $34.00 per share in cash would be fixed and would not be
subject to adjustments based on ATMIs unrestricted cash balance, (2) Entegris would owe ATMI a reverse termination fee equal to $100 million (approximately 8.7% of the transaction value) if Entegris failed to consummate the
transaction in certain circumstances due to a failure to obtain the contemplated debt financing and (3) ATMI would owe Entegris a termination fee equal to $30 million (approximately 2.6% of the transaction value) in certain circumstances where
ATMI terminated the merger agreement to enter into a superior proposal. During the meeting, the board of directors discussed the proposal made by Company A on February 1, 2014, and concluded that Company As proposal remained
too uncertain with respect to price and timing to risk losing the transaction with Entegris. The representatives of Weil also noted that ATMI would be permitted under the terms of the merger agreement, to furnish confidential information to, and
conduct negotiations with, any third party, including Company A, that makes an unsolicited proposal to acquire ATMI, and ultimately terminate the merger agreement to accept a superior proposal, subject to the limitations and requirements
contained in the merger agreement, including the right of Entegris to match such superior proposal and the payment to Entegris of the $30 million termination fee. The representatives of Barclays then made a presentation with
respect to the proposed offer from Entegris of $34.00 per share in cash. The representatives of Barclays noted that the written materials distributed to the board of directors prior to the meeting contained preliminary 2013 year-end information,
that immediately prior to the meeting representatives of ATMIs management had provided Barclays with final 2013 year-end information and that, after the meeting, Barclays would circulate to the board of directors revised materials that reflect
such final 2013 year-end information. Also, at the meeting, Barclays rendered its oral opinion, which opinion was subsequently confirmed in a written opinion dated February 4, 2014, to the ATMI board of directors to the effect that, as of that
date and based upon and subject to the qualifications, limitations and assumptions stated in its written opinion, the merger consideration of $34.00 per share of ATMI common stock to be offered to the stockholders of ATMI in the merger was fair,
from a financial point of view, to such stockholders (a copy of the written opinion of Barclays is attached to this proxy statement as Annex B). After careful deliberation, including consideration of the factors described in the section of this
proxy statement entitled
Reasons for the Merger; Recommendation of Our Board of Directors,
the board of directors, unanimously (1) approved the execution, delivery, and performance of the merger agreement,
(2) determined that entering into the merger agreement is fair to, and in the best interests of ATMI and its stockholders, (3) declared the merger agreement and the merger advisable, and (4) subject to its fiduciary obligations,
resolved to recommend that ATMIs stockholders adopt the merger agreement.
32
Through the night of February 3, 2014 and into the morning of February 4, 2014, the
parties worked to finalize the terms of the merger agreement in accordance with the terms discussed with the board of directors and, on the morning of February 4, 2014, the parties executed and delivered the merger agreement and Entegris
delivered the fully executed debt commitment letter contemplated by the merger agreement. Prior to the opening of trading in the U.S. securities markets, ATMI and Entegris issued a joint press release announcing the transaction.
Reasons for the Merger; Recommendation of Our Board of Directors
Reasons for the Merger
Our board
of directors, with the advice and assistance of our management and legal and financial advisors, at a meeting on February 3, 2014, carefully evaluated the proposed merger, including the terms and conditions of the merger agreement. Our board of
directors unanimously (1) approved the execution, delivery, and performance of the merger agreement, (2) determined that entering into the merger agreement is fair to, and in the best interests of, ATMI and its stockholders,
(3) declared the merger agreement and the merger advisable, and (4) subject to its fiduciary obligations, resolved to recommend that ATMIs stockholders adopt the merger agreement.
In the course of reaching its determination, our board of directors consulted with our management and its legal and financial advisors and
considered a number of substantive factors and potential benefits of the merger. Our board of directors believed that, taken as a whole, the following factors supported its decision to approve the proposed merger:
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the board of directors familiarity with ATMIs business, operations, assets, properties, business strategy and competitive position and the nature of the industries in which ATMI operates, industry trends,
and economic and market conditions, both on a historical and on a prospective basis;
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the financial condition and prospects of ATMI, as well as the risks involved in achieving those prospects and the risks and uncertainties associated with operating ATMIs business, including:
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the risks described in ATMIs filings with the SEC;
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certain macroeconomic factors, including the material impact of another global economic downturn, and how these factors could impact ATMI;
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ATMIs current financial plan, including the risks associated with achieving and executing upon ATMIs business plan;
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pricing pressures associated with being a smaller stand-alone company in the microelectronics industry;
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competition from new entrants, including in countries in Asia where significant customers are located; and
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potential pressures arising from customer consolidation, including pricing pressure;
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the fact that ATMI conducted an extensive and thorough strategic alternatives review process which included assistance from Barclays beginning in July 2013 and was publicly disclosed in November 2013;
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the board of directors belief that, after consideration of potential alternatives, the merger is expected to provide greater benefits and less risk to ATMIs stockholders than the range of possible
alternatives to the sale of ATMI to Entegris, including continuing to operate ATMI on a standalone basis, a merger of equals with another competitor, or growth of ATMI through acquisitions;
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the fact that the $34.00 per share merger consideration contemplated to be received by ATMIs stockholders in connection with the merger
represents a premium to ATMIs historic trading prices,
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33
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including (1) a premium of 26.3% over ATMIs closing sale price of $26.93 on the NASDAQ on February 3, 2013 and (2) a premium of 33.8% over ATMIs one year volume
weighted average closing price of $25.42 on the NASDAQ for the period ending February 3, 2014;
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the oral opinion of Barclays rendered on February 3, 2014, which opinion was subsequently confirmed in a written opinion dated February 4, 2014, to the ATMI board of directors to the effect that, as of that
date and based upon and subject to the qualifications, limitations and assumptions stated in its written opinion, the consideration to be offered to the stockholders of ATMI in the merger was fair, from a financial point of view, to such
stockholders, as more fully described below under the caption
Opinion of ATMIs Financial Advisor
;
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the form of consideration to be paid to holders of shares in the merger is cash, which will provide certainty of value to ATMIs stockholders;
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the availability in the merger of appraisal rights for ATMI stockholders who properly exercise their statutory appraisal rights under Delaware law; and
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the board of directors review, with ATMIs advisors, of the structure of the merger and the financial and other terms of the merger agreement. In particular, the board of directors considered the following
specific aspects of the merger agreement, among others:
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ATMIs ability, subject to the limitations and requirements contained in the merger agreement, to engage in negotiations with, and provide information to, a third party that makes an unsolicited written acquisition
proposal, and ultimately terminate the merger agreement to accept a superior proposal from a third party under certain circumstances and subject to certain conditions, including the payment to Entegris of a $30 million termination fee,
if the board of directors determines in good faith, after consultation with its outside legal and financial advisors, that such proposal constitutes or would reasonably be expected to lead to a superior proposal and that the failure to take such
action would be inconsistent with the directors fiduciary duties under applicable law; and
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the requirement that ATMI obtain stockholder approval as a condition to completion of the merger;
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In addition, the board of directors was aware of and considered the interests that certain individuals, including our directors and executive
officers, may have with respect to the merger that may differ from, or may be in addition to, their interests as stockholders of ATMI, as described in the section of this proxy statement entitled
Interests of Certain Persons in the
Merger.
Our board of directors also considered potential risks or negative factors relating to the merger, including but not
limited to the following:
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the risks and contingencies relating to the announcement and pendency of the merger and the risks and costs to ATMI if the merger does not close, including the effect of an announcement of termination of the transaction
on the trading price of our common stock, operating results and our relationships with customers, suppliers and employees;
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the ability to attract and retain key personnel and the risk of diverting management focus and employee resources from operational matters during the pendency of the merger;
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the risks associated with various provisions of the merger agreement, including:
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the fact that the merger agreement contains certain limitations (subject to the consent of Entegris) regarding the operation of ATMIs business during the period between the signing of the agreement and completion
of the merger;
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the risk that ATMI might not receive the necessary regulatory approvals and clearances;
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34
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the fact that ATMI is not entitled to specific performance to enforce Entegris obligations to complete the Merger if debt financing is not available to Entegris at closing in an amount necessary to pay the
purchase price, in which case ATMI may terminate the merger agreement and would be entitled to receive a reverse termination fee of $100 million. See the sections of this proxy statement entitled
The Merger Agreement Termination Fees
and Reimbursement of Expenses
; and
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the requirement that ATMI must pay to Entegris a termination fee of $30 million if the merger agreement is terminated under certain circumstances, which might discourage other parties potentially interested in an
acquisition of, or combination with, ATMI from pursuing that opportunity. See the sections of this proxy statement entitled
The Merger Agreement Termination Fees and Reimbursement of Expenses.
The board of directors, after
consultation with its legal and financial advisors, believed that the termination fee payable by ATMI in such circumstance under the merger agreement was reasonable in light of the size and benefits of the contemplated transaction with Entegris and
was not preclusive of a Superior Proposal, if one were to emerge; and
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the fact that if the merger is consummated, ATMI will no longer exist as an independent company and ATMIs stockholders will no longer participate in ATMIs future earnings and growth.
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The foregoing discussion summarizes certain material factors considered by the board of directors in its consideration of the merger. In view
of the wide variety of factors considered by the board of directors, and the complexity of these matters, the board of directors did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition,
individual members of the board of directors may have assigned different weights to various factors. Our board of directors concluded that the potentially negative factors associated with the merger agreement were substantially outweighed by the
opportunity for ATMIs stockholders to realize a premium on the value of their shares of common stock. Accordingly, our board of directors, by unanimous vote, (1) approved the execution, delivery, and performance of the merger agreement,
(2) determined that entering into the merger agreement is fair to, and in the best interests of, ATMI and its stockholders, (3) declared the merger agreement and the merger advisable, and (4) subject to its fiduciary obligations,
resolved to recommend that ATMIs stockholders adopt the merger agreement.
Recommendation of our Board of Directors
Our board of directors recommends that you vote FOR the proposal to adopt the merger agreement and approve the merger.
Opinion of ATMIs Financial Advisor
ATMI engaged Barclays to act as its financial advisor with respect to a possible sale of ATMI. On February 3, 2014, Barclays rendered its
oral opinion, which opinion was subsequently confirmed in a written opinion dated February 4, 2014, to the ATMI board of directors to the effect that, as of that date and based upon and subject to the qualifications, limitations and assumptions
stated in its written opinion, the merger consideration of $34.00 per share of ATMI common stock to be offered to the stockholders of ATMI in the merger was fair, from a financial point of view, to such stockholders.
The full text of Barclays written opinion, dated as of February 4, 2014, is attached as Annex B to this proxy statement.
Barclays opinion sets forth, among other things, the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Barclays in rendering its opinion. ATMI encourages you to read the opinion carefully
in its entirety. The following is a summary of Barclays opinion and the methodology that Barclays used to render its opinion. This summary is qualified in its entirety by reference to the full text of the opinion.
35
Barclays opinion, the issuance of which was approved by Barclays Valuation and
Fairness Opinion Committee, is addressed to the ATMI board of directors, addresses only the fairness, from a financial point of view, of the merger consideration of $34.00 per share of ATMI common stock to be offered to the stockholders of ATMI and
does not constitute a recommendation to any stockholder of ATMI as to how such stockholder should vote with respect to the merger or any other matter. The terms of the merger were determined through arms-length negotiations between ATMI and
Entegris and were approved by the ATMI board of directors. Barclays did not recommend any specific amount or form of consideration to ATMI or that any specific amount or form of consideration constituted the only appropriate consideration for the
merger. Barclays was not requested to opine as to, and its opinion does not in any manner address, ATMIs underlying business decision to proceed with or effect the merger or the likelihood of the consummation of the merger. Barclays
opinion did not address the relative merits of the merger as compared to any other transaction or business strategy in which ATMI might engage. In addition, Barclays expressed no opinion on, and its opinion does not in any manner address, the
fairness of the amount or the nature of any compensation to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the merger consideration of $34.00 per share of ATMI common stock to be offered
to the stockholders of ATMI in the merger. No limitations were imposed by the ATMI board of directors upon Barclays with respect to the investigations made or procedures followed by it in rendering its opinion.
In arriving at its opinion, Barclays, among other things:
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reviewed and analyzed a draft of the merger agreement, dated as of February 3, 2014, and the specific terms of the merger;
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reviewed and analyzed publicly available information concerning ATMI that Barclays believed to be relevant to its analysis, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013;
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reviewed and analyzed financial and operating information with respect to the business, operations and prospects of ATMI furnished to Barclays by ATMI, including financial projections of ATMI prepared by management of
ATMI (See the section of this proxy statement entitled
Certain Financial Forecasts.
);
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reviewed and analyzed a trading history of ATMI common stock and a comparison of that trading history with those of other companies that Barclays deemed relevant;
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reviewed and analyzed a comparison of the historical financial results and present financial condition of ATMI with those of other companies that Barclays deemed relevant;
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reviewed and analyzed a comparison of the financial terms of the merger with the financial terms of certain other transactions that Barclays deemed relevant;
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reviewed and analyzed the results of Barclays efforts to solicit indications of interest and definitive proposals from third parties with respect to a sale of ATMI;
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reviewed and analyzed published estimates of independent research analysts with respect to the future financial performance and price targets of ATMI;
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had discussions with the management of ATMI concerning its business, operations, assets, liabilities, financial condition and prospects; and
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undertook such other studies, analyses and investigations as Barclays deemed appropriate.
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In
arriving at its opinion, Barclays assumed and relied upon the accuracy and completeness of the financial and other information used by Barclays without any independent verification of such information (and did not assume responsibility or liability
for any independent verification of such information). Barclays also relied upon the assurances of management of ATMI that they were not aware of any facts or circumstances that would make
36
such information inaccurate or misleading. With respect to the financial projections of ATMI, upon the advice of ATMI, Barclays assumed that such projections were reasonably prepared on a basis
reflecting the best currently available estimates and judgments of the management of ATMI as to ATMIs future financial performance. In arriving at its opinion, Barclays assumed no responsibility for and expressed no view as to any such
projections or estimates or the assumptions on which they were based. In arriving at its opinion, Barclays did not conduct a physical inspection of the properties and facilities of ATMI and did not make or obtain any evaluations or appraisals of the
assets or liabilities of ATMI. Barclays opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of its opinion. Barclays assumed no responsibility for updating or
revising its opinion based on events or circumstances that may have occurred after February 3, 2014.
Barclays has assumed that the
executed merger agreement would conform in all material respects to the last draft reviewed by Barclays. In addition, Barclays has assumed the accuracy of the representations and warranties contained in the merger agreement and all agreements
related thereto. Barclays has also assumed, upon the advice of ATMI, that all material governmental, regulatory and third party approvals, consents and releases for the merger will be obtained within the constraints contemplated by the merger
agreement and that the merger will be consummated in accordance with the terms of the merger agreement without waiver, modification or amendment of any material term, condition or agreement thereof. Barclays did not express any opinion as to any tax
or other consequences that might result from the merger, nor does its opinion address any legal, tax, regulatory or accounting matters, as to which it understood that ATMI had obtained such advice as ATMI deemed necessary from qualified
professionals.
In connection with rendering its opinion, Barclays performed certain financial, comparative and other analyses as
summarized below. In arriving at its opinion, Barclays did not ascribe a specific range of values to the shares of ATMI common stock but rather made its determination as to fairness, from a financial point of view, to ATMIs stockholders of the
consideration to be offered to such stockholders in the merger on the basis of various financial and comparative analyses. The preparation of a fairness opinion is a complex process and involves various determinations as to the most appropriate and
relevant methods of financial and comparative analyses and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to summary description.
In arriving at its opinion, Barclays did not attribute any particular weight to any single analysis or factor considered by it but rather made
qualitative judgments as to the significance and relevance of each analysis and factor relative to all other analyses and factors performed and considered by it and in the context of the circumstances of the particular transaction. Accordingly,
Barclays believes that its analyses must be considered as a whole, as considering any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process
underlying its opinion.
The following is a summary of the material financial analyses used by Barclays in preparing its opinion to the
ATMI board of directors. Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses used by Barclays, the tables must be read together with the text of each
summary, as the tables alone do not constitute a complete description of the financial analyses. In performing its analyses, Barclays made numerous assumptions with respect to industry performance, general business and economic conditions and other
matters, many of which are beyond the control of ATMI or any other parties to the merger. None of ATMI, Entegris, Merger Sub, Barclays or any other person assumes responsibility if future results are materially different from those discussed. Any
estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value
of the businesses do not purport to be appraisals or reflect the prices at which the businesses may actually be sold.
In performing its
financial analyses summarized below and in arriving at its opinion, Barclays utilized and relied upon the Budget case financial projections, which had been prepared by ATMIs management on bases
37
reflecting the best currently available estimates and judgments of ATMIs management as to the future financial performance of ATMI.
In addition, solely for reference purposes, Barclays also performed a selected comparable company analysis and a discounted cash flow analysis
(as described below) utilizing the Business Model case and the Conservative case financial projections. For further information regarding these financial projections, see the section of this proxy statement entitled
Certain Financial
Forecasts.
Analysis of Implied Premiums and Multiples
Barclays analyzed the implied premiums based on the merger consideration of $34.00 per share of ATMI common stock as compared to the following:
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the closing price of ATMI common stock on February 3, 2014;
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the closing price of ATMI common stock on October 31, 2013, which was the last trading day prior to the publication of a news report that ATMI had hired Barclays to explore strategic alternatives for ATMI;
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the volume-weighted average price, or VWAP, of ATMI common stock for the 3-month period ended on February 3, 2014, which is referred to below as 3-Month VWAP;
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the VWAP of ATMI common stock for the 6-month period ended on February 3, 2014, which is referred to below as 6-Month VWAP;
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the VWAP of ATMI common stock for the 1-year period ended on February 3, 2014, which is referred to below as 1-Year VWAP; and
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the VWAP of ATMI common stock for the 3-year period ended on February 3, 2014, which is referred to below as 3-Year VWAP.
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The results of this analysis are summarized in the following table:
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Time Period
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Share Price
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Implied Premium
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February 3, 2014
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$
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26.93
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26.3
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%
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October 31, 2013
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$
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27.34
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24.4
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%
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3-Month VWAP
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$
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29.32
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16.0
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%
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6-Month VWAP
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$
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28.02
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21.3
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%
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1-Year VWAP
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$
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25.42
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33.8
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%
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3-Year VWAP
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$
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21.72
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56.6
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%
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Barclays also analyzed the implied premiums based on the merger consideration of $34.00 per share of ATMI
common stock as compared to certain recent trading prices of ATMI common stock set forth below, in each case, adjusted to exclude ATMIs after-tax net cash position pro forma for the sale of the Life Sciences business pursuant to the Life
Sciences SAPA estimated to be approximately $8.35 per share of ATMI common stock. The results of this analysis are summarized in the following table:
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Time Period
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Adjusted
Share Price
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Implied Premium
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February 3, 2014
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$
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18.60
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38.0
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%
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October 31, 2013
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$
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19.01
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35.0
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%
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3-Month VWAP
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$
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20.99
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22.3
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%
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Selected Comparable Company Analysis
In order to assess how the public market values shares of similar publicly traded companies, Barclays reviewed and compared specific financial
and operating data relating to ATMI with selected companies that
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serve as suppliers in the microelectronics and semiconductor manufacturing industry that Barclays deemed comparable to ATMI. The selected comparable companies were:
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Cabot Microelectronics Corporation
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Park Electrochemical Corp.
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Barclays calculated and compared various financial multiples and ratios of ATMI
and the selected comparable companies. As part of its selected comparable company analysis, Barclays calculated and analyzed, among other things, each companys enterprise value to historical and projected earnings before interest, taxes,
depreciation and amortization, or EBITDA, for calendar years 2013 and 2014. The enterprise value of each company was obtained by adding its short and long-term debt to the sum of its equity value, the value of any preferred stock (at liquidation
value) and the book value of any minority interest, and subtracting its cash and cash equivalents. All of these calculations were performed, and based on publicly available financial data (including I/B/E/S Consensus), ATMI managements
financial projections and closing prices, as of February 3, 2014. The results of this selected comparable company analysis are summarized below:
Enterprise Value as a Multiple of Calendar Year 2013 Estimated EBITDA
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Low
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Mean
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Median
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High
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Selected Comparable Companies
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8.0x
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10.3x
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10.4x
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12.6x
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ATMI based on 2013PF EBITDA (as described below):
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6.7x
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ATMI based on I/B/E/S Consensus Estimates:
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7.5x
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Enterprise Value as a Multiple of Calendar Year 2014 Estimated EBITDA
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Low
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Mean
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Median
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High
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Selected Comparable Companies
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6.9x
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8.8x
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9.2x
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10.1x
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ATMI based on the Budget Case:
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5.9x
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ATMI based on I/B/E/S Consensus Estimates:
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5.9x
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Barclays selected the comparable companies listed above because of similarities in one or more business or
operating characteristics with ATMI. However, because no selected comparable company is exactly the same as ATMI, Barclays believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected
comparable company analysis. Accordingly, Barclays also made qualitative judgments concerning differences between the business, financial and operating characteristics and prospects of ATMI and the selected comparable companies that could affect the
public trading values of each in order to provide a context in which to consider the results of the quantitative analysis. These qualitative judgments related primarily to the differing sizes, growth prospects, profitability levels and degree of
operational risk between ATMI and the companies included in the selected company analysis.
Based upon these judgments, Barclays selected
a range of 10.0x to 11.0x ATMIs calendar year 2013 EBITDA, adjusted to take into account the sale of the Life Sciences business pursuant to the Life Sciences SAPA, or 2013PF EBITDA, and 8.5x to 9.5x ATMIs estimated calendar year 2014
EBITDA, or 2014E EBITDA, based on the Budget case to calculate a range of implied prices per share of ATMI. The selected comparable company analysis yielded an implied valuation range for shares of ATMI common stock of $33.25 to $35.75 per share
using 2013PF EBITDA, and $32.25 to $35.00 per share using 2014E EBITDA (per share values were rounded to the nearest $0.25 increment), in each case, compared to the merger consideration of $34.00 per share of ATMI common stock.
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In addition, solely for reference purposes, Barclays also used the range of 8.5x to 9.5x
ATMIs 2014E EBITDA based on the Business Model case and the Conservative case to calculate a range of implied prices per share of ATMI common stock. This analysis yielded an implied valuation range for ATMI common stock of $36.00 to $39.25 per
share based on the Business Model case, and $30.75 to $33.25 per share using the Conservative case (per share values were rounded to the nearest $0.25 increment), in each case, compared to the merger consideration of $34.00 per share of ATMI common
stock.
Selected Precedent Transaction Analysis
Barclays reviewed and compared the purchase prices and financial multiples paid in selected other transactions involving target companies in
the microelectronics and semiconductor manufacturing industry that Barclays, based on its experience with merger and acquisition transactions, deemed relevant. Barclays chose such transactions based on, among other things, the similarity of the
applicable target companies in the transactions to ATMI with respect to the size, mix, margins and other characteristics of their businesses. The following table sets forth the transactions analyzed based on such characteristics and the date each
transaction was announced:
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Announcement Date
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Acquiror
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Target
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December 5, 2013
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Merck KGaA
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AZ Electronic Materials SA
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May 26, 2010
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New Mountain Capital, L.L.C.
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Mallinckrodt Baker, Inc.*
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July 10, 2008
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The Dow Chemical Company
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Rohm and Haas Company
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October 8, 2007
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OM Group, Inc.
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Rockwood Specialties Group, Inc.
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September 14, 2006
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Apollo Management LP
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GE Advanced Materials
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January 28, 2005
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BASF AG
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Electronic Chemicals business of Merck KGaA*
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October 5, 2004
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Toppan Printing Co., Ltd.
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Dupont Photomasks, Inc.
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July 23, 2004
|
|
The Carlyle Groups L.P.
|
|
AZ Electronic Materials*
|
June 30, 2003
|
|
Air Products and Chemicals, Inc.
|
|
Electronic Chemicals business of Ashland Specialty Chemical Company*
|
November 11, 2002
|
|
Keystone Holdings LLC
|
|
CoorsTek, Inc.**
|
July 23, 2002
|
|
E. I. du Pont de Nemours and Company
|
|
ChemFirst Inc.
|
December 21, 1998
|
|
Rohm and Haas Company
|
|
LeaRonal, Inc.
|
*
|
Transactions excluded from the high, low, mean and median multiples summarized below because multiples were not publicly available for those transactions.
|
**
|
Transaction excluded from the high, low, mean and median multiples summarized below because the multiple was not meaningful for such transaction.
|
Barclays calculated and compared various financial multiples and ratios of ATMI and the target company in each of the selected precedent
transactions listed above. As part of its selected precedent transactions analysis, Barclays calculated, among other things, the ratio of the target companys enterprise value to its estimated last twelve months EBITDA as of the announcement
date of such transaction, referred to below as EV/LTM EBITDA. The results of this selected precedent transactions company analysis are summarized below:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metric
|
|
Low
|
|
|
Mean
|
|
|
Median
|
|
|
High
|
|
EV/LTM EBITDA
|
|
|
8.7x
|
|
|
|
10.5x
|
|
|
|
10.4x
|
|
|
|
12.7x
|
|
The reasons for and the circumstances surrounding each of the selected precedent transactions analyzed were
diverse and there are inherent differences in the business, operations, financial conditions and prospects of ATMI and the companies included in the selected precedent transaction analysis. Accordingly, Barclays believed that a purely quantitative
selected precedent transaction analysis would not be particularly meaningful in the
40
context of considering the merger consideration of $34.00 per share of ATMI common stock in the merger. Barclays therefore made qualitative judgments concerning differences between the
characteristics of the selected precedent transactions and the merger which would affect the acquisition values of the selected target companies and ATMI.
Based upon these judgments, Barclays selected a multiple range of 10.0x to 11.0x ATMIs 2013PF EBITDA to calculate a range of implied
prices per share of ATMI common stock. The selected precedent transactions analysis yielded an implied valuation range for ATMI common stock of $33.25 to $35.75 per share (per share values were rounded to the nearest $0.25 increment), compared to
the merger consideration of $34.00 per share of ATMI common stock.
Discounted Cash Flow Analysis
In order to estimate the present value of ATMI common stock, Barclays performed a discounted cash flow analysis of ATMI. A discounted cash flow
analysis is a traditional valuation methodology used to derive a valuation of an asset by calculating the present value of estimated future cash flows of the asset. Present value refers to the current value of future cash
flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate
factors.
To calculate the estimated enterprise value of ATMI using the discounted cash flow method, Barclays added (i) ATMIs
projected after-tax unlevered free cash flows for fiscal years 2014 through 2018 based on the Budget case to (ii) the terminal value of ATMI as of December 31, 2018, and discounted such amount to its present value using a range
of selected discount rates. The residual value of ATMI at the end of the forecast period, or terminal value, was estimated by selecting a range of terminal value multiples based on ATMIs estimated EBITDA for the fiscal year period
ended December 31, 2018 of 7.0x to 8.0x, which was derived by analyzing the results from the selected comparable company analysis and the historical trading multiples for ATMI and the selected comparable companies, and applying such range to
the Budget case. A range of after-tax discount rates of 12.0% to 14.0% was selected based on an analysis of the weighted average cost of capital of ATMI and the selected comparable companies.
Combining the total present value of the estimated after-tax unlevered free cash flows and the present value of the terminal values resulted
in a range of implied enterprise values for ATMI. Barclays then deducted estimated outstanding debt and added outstanding cash and equivalents as of December 31, 2013 to determine a range of implied equity values of ATMI as of that date. The
cash balance estimated as of December 31, 2013 was adjusted to take into account estimated after-tax net proceeds from the sale of the Life Sciences business pursuant to the Life Sciences SAPA less certain expenses incurred by ATMI in
connection with such sale, and the repatriation of certain foreign proceeds from that sale, and the proceeds from the settlement of certain equity investments.
This discounted cash flow analysis yielded the implied valuation ranges for ATMI common stock set forth in the table below (per share values
were rounded to the nearest $0.25 increment), compared to the merger consideration of $34.00 per share of ATMI common stock:
|
|
|
|
|
ATMI Management Projections Case
|
|
Implied Prices Per Share
of ATMI Common Stock
|
|
Budget Case (EBITDA Multiple Method)
|
|
$
|
28.50 $32.00
|
|
The range of terminal value multiples described above implied a range of perpetuity growth rates for ATMI of 4.7% to 5.6%.
Barclays also performed a discounted cash flow analysis to calculate the estimated enterprise value of ATMI using ATMIs projected
after-tax unlevered free cash flows based on the Budget case and the range of
41
after-tax discount rates each as described above, and perpetuity growth rates ranging from 4.5% to 5.0%. This range of perpetuity growth rates implied a range of terminal value multiples based on
ATMIs estimated EBITDA for the fiscal year period ended December 31, 2018 of 6.2x to 8.4x. Barclays then deducted projected outstanding debt and added outstanding cash and equivalents as of December 31, 2013 (as adjusted as described
above) to determine a range of implied equity values of ATMI as of that date.
This discounted cash flow analysis yielded the implied
valuation ranges for ATMI common stock set forth in the table below (per share values were rounded to the nearest $0.25 increment), compared to the merger consideration of $34.00 per share of ATMI common stock:
|
|
|
|
|
ATMI Management Projections Case
|
|
Implied Prices Per Share
of ATMI Common Stock
|
|
Budget Case (Perpetuity Growth Method)
|
|
$
|
26.75 $33.00
|
|
In addition, solely for reference purposes, Barclays also performed a discounted cash flow analysis using the
range of discount rates, terminal value multiples and perpetuity growth rates described above and using ATMIs projected after-tax unlevered free cash flows based on the Business Model case and the Conservative case. This discounted cash flow
analysis yielded the implied valuation ranges for ATMI common stock set forth in the table below (per share values were rounded to the nearest $0.25 increment), compared to the merger consideration of $34.00 per share of ATMI common stock:
|
|
|
|
|
ATMI Management Projections Case
|
|
Implied Prices Per Share
of ATMI Common Stock
|
|
Business Model Case (EBITDA Multiple Method)
|
|
$
|
36.25 $41.25
|
|
Business Model Case (Perpetuity Growth Method)
|
|
$
|
35.50 $44.75
|
|
Conservative Case (EBITDA Multiple Method)
|
|
$
|
25.75 $28.75
|
|
Conservative Case (Perpetuity Growth Method)
|
|
$
|
23.75 $28.50
|
|
In rendering its opinion, Barclays also performed certain other analyses, as set forth below, which were
solely for reference purposes and were not part of its fairness determination.
Historical Share Price Analysis
To illustrate the trend in the historical trading prices of ATMI common stock, Barclays considered historical data with regard to the trading
prices of ATMI common stock for the period from February 3, 2013 to February 3, 2014. Barclays noted that during such period, the intraday trading price of ATMI common stock ranged from $20.00 to $30.50 (per share values were rounded to
the nearest $0.25 increment).
Analyst Price Targets
Barclays reviewed the public market trading price targets for ATMI common stock prepared and published by securities research analysts as of
February 3, 2014. These targets reflected each analysts undiscounted estimate of the future public market trading price for ATMI common stock. The public market trading price targets published by securities research analysts do not
necessarily reflect current market trading prices for the shares and these estimates are subject to uncertainties, including future financial performance of ATMI and future financial market conditions. The equity analysts price targets for ATMI
common stock ranged from $22.00 to $36.00 per share, with a median of $29.25.
General
Barclays is an internationally recognized investment banking firm and, as part of its investment banking activities, is regularly engaged in
the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, competitive bids, secondary
42
distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. The ATMI board of directors selected Barclays because of its
qualifications, reputation and experience in the valuation of businesses and securities in connection with mergers and acquisitions generally.
Barclays is acting as financial advisor to ATMI in connection with the merger. As compensation for its services in connection with the merger,
ATMI agreed to pay Barclays a fee of $750,000 upon the delivery of Barclays opinion. ATMI has also agreed to pay Barclays a fee estimated to be approximately $8.7 million upon consummation of the merger, against which the fee paid to Barclays
in connection with its opinion will be credited. In addition, ATMI has agreed to reimburse Barclays expenses and indemnify Barclays for certain liabilities that may arise out of its engagement. Barclays has performed various investment banking
and financial services for ATMI in the past, and expects to perform such services in the future, and has received, and expects to receive, customary fees for such services. Specifically, in the two years prior to the date of Barclays opinion,
Barclays has served as financial advisor to ATMI in connection with the sale of its Life Sciences business pursuant to the Life Sciences SAPA for which ATMI has agreed to pay Barclays a fee of $1.7 million. In the two years prior to the date of
Barclays opinion, Barclays has not performed any investment banking or financial services for Entegris.
Barclays and its affiliates
engage in a wide range of businesses from investment and commercial banking, lending, asset management and other financial and non-financial services. In the ordinary course of its business, Barclays and affiliates may actively trade and
effective transactions in the equity, debt and/or other securities (and any derivatives thereof) and financial instruments (including loans and other obligations) of ATMI and Entegris for its own account and for the accounts of its customers and,
accordingly, may at any time hold long or short positions and investments in such securities and financial instruments.
Certain Financial Forecasts
ATMI does not as a matter of general practice publicly disclose financial projections due to, among other reasons, the
unpredictability of the underlying assumptions and estimates inherent in preparing financial projections. In evaluating ATMIs strategic alternatives, including a potential transaction with Entegris, ATMIs management prepared three
forecasts of ATMIs results of operations, a Business Model case forecast, a Budget case forecast and a Conservative case forecast (referred to collectively in this proxy statement as the financial forecasts)
and provided them to the ATMI board of directors, its advisors and, as specified below, to Entegris and other potential buyers of the Company. The financial forecasts constitute forward-looking statements. See
Cautionary Statement
Concerning Forward-Looking Information.
This summary of the financial forecasts is not provided to influence your decision
regarding whether to vote for the adoption of the merger agreement, but is only being included because such financial forecasts were made available to the ATMI board of directors and its advisors in evaluating ATMIs strategic alternatives,
including a potential transaction with Entegris, and, as specified below, to Entegris and other potential buyers of the Company. The inclusion of this information in this proxy statement should not be regarded as an indication that the ATMI board of
directors or its advisors or any other person considered, or now considers, the financial forecasts to be a reliable prediction of actual future results, and the financial forecasts should not be relied upon as such. ATMIs internal financial
projections, upon which the financial forecasts were based, are subjective in many respects. There can be no assurance that the financial forecasts will be realized or that actual results will not be significantly higher or lower than projected. The
financial forecasts also cover multiple years and such information by its nature becomes subject to greater uncertainty with each successive year. Economic and business environments may change quickly, which adds an additional significant level of
uncertainty as to whether the results portrayed in the financial forecasts will be achieved. As a result, the inclusion of the financial forecasts in this proxy statement does not constitute an admission or representation by ATMI that the
information is material. Readers of this proxy statement are cautioned not to place undue reliance on the financial forecasts set forth below.
43
Summary of Financial Forecasts
The following is a summary of the financial forecasts prepared by ATMIs management and provided to the ATMI board of directors, its
advisors and, only to the extent specified below, to Entegris and other potential buyers of the Company:
Business Model Case
The Business Model case was prepared by ATMIs management in July 2013. The Business Model case was based on certain assumptions,
including the following: improvements in ATMIs growth and profitability as a result of, among other things, an improving semiconductor industry with modestly higher wafer starts growth, margin expansion through the introduction of higher
margin new products and the localization of manufacturing activities, customer ramps at new advanced nodes, increased penetration at key accounts and subsequent wins at advanced nodes, and the rationalization of ATMIs cost structure. The
Business Model case was made available to Entegris and other potential buyers of the Company.
Budget Case
The Budget case was prepared by ATMIs management on or about January 17, 2014. The Budget case was based on the 2014 budget approved
by the ATMI board of directors in December 2013 and excludes ATMIs Life Sciences business and the shared services related to the Life Sciences business. The Budget case, as compared to the Business Model case, reflected an updated, more
conservative outlook for the semiconductor industry generally and the growth and profitability of ATMI in particular. The Budget case assumed growth rates for 2015-2018 to be in line with estimated growth rates for comparable public companies and
gross margin improvement driven by a contribution margin on incremental revenues and resource efficiency mix. The Budget case reflected the best currently available estimates and judgments of ATMIs management as to the future financial
performance of ATMI. The 2014 budget, upon which the Budget case was prepared (but not the Budget case itself), was made available to Entegris and other potential buyers of the Company.
Conservative Case
The
Conservative case was prepared by ATMIs management on or about January 20, 2014. The Conservative case reflected a downside sensitivity to the Budget case. Specifically, the Conservative case incorporated a number of factors that could
potentially adversely impact ATMIs results, including: a deteriorating wafer start environment in 2014 and, consequently, a conservative growth rate of approximately 4% per year; price declines continuing through the projection period in
line with the pricing figures from 2013; and ATMIs resetting of incentive compensation targets, including incentive compensation payments in 2014 to be based on achievement of only individual strategic objectives (approximately 20% of the
overall incentive compensation target amount) and incentive compensation targets in 2015 to be reset to 100%.
Because our
financial forecasts were developed for ATMI on a standalone basis without giving effect to the merger, our financial forecasts do not reflect any effects of the merger or any changes to our operations or strategy that may be implemented after the
consummation of the merger, including cost synergies realized, or to any additional costs incurred.
44
Certain Projected Financial Information
The following is a summary of certain projected financial information that was included in each of the financial forecasts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014E
|
|
|
2015E
|
|
|
2016E
|
|
|
2017E
|
|
|
2018E
|
|
|
|
($ in millions)
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Model case
|
|
$
|
415
|
|
|
$
|
465
|
|
|
$
|
509
|
|
|
$
|
540
|
|
|
$
|
561
|
|
Budget case
|
|
$
|
381
|
|
|
$
|
404
|
|
|
$
|
429
|
|
|
$
|
454
|
|
|
$
|
472
|
|
Conservative case
|
|
$
|
364
|
|
|
$
|
380
|
|
|
$
|
397
|
|
|
$
|
415
|
|
|
$
|
426
|
|
|
|
|
|
|
|
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Model case
|
|
$
|
86
|
|
|
$
|
120
|
|
|
$
|
142
|
|
|
$
|
146
|
|
|
$
|
151
|
|
Budget case
|
|
$
|
71
|
|
|
$
|
79
|
|
|
$
|
86
|
|
|
$
|
95
|
|
|
$
|
99
|
|
Conservative case
|
|
$
|
65
|
|
|
$
|
70
|
|
|
$
|
72
|
|
|
$
|
77
|
|
|
$
|
79
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Model case
|
|
$
|
111
|
|
|
$
|
144
|
|
|
$
|
166
|
|
|
$
|
172
|
|
|
$
|
178
|
|
Budget case
|
|
$
|
95
|
|
|
$
|
103
|
|
|
$
|
111
|
|
|
$
|
123
|
|
|
$
|
128
|
|
Conservative case
|
|
$
|
89
|
|
|
$
|
94
|
|
|
$
|
98
|
|
|
$
|
105
|
|
|
$
|
107
|
|
|
|
|
|
|
|
Unlevered Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Model case
|
|
$
|
45
|
|
|
$
|
78
|
|
|
$
|
97
|
|
|
$
|
102
|
|
|
$
|
107
|
|
Budget case
|
|
$
|
44
|
|
|
$
|
56
|
|
|
$
|
63
|
|
|
$
|
68
|
|
|
$
|
69
|
|
Conservative case
|
|
$
|
45
|
|
|
$
|
52
|
|
|
$
|
55
|
|
|
$
|
57
|
|
|
$
|
56
|
|
For purposes of the projected financial forecasts presented herein, (1) EBIT is calculated as net
earnings before interest and taxes; (2) EBITDA is calculated as net earnings before interest, taxes, depreciation and amortization; and (3) unlevered free cash flow is calculated as EBITDA minus taxes, changes in net working capital and
capital expenditures. Each of the foregoing calculations (i) excludes the projected results of operations from the Life Sciences business, the shared services related to the Life Sciences business and unusual and one-time items; and
(ii) treats stock based compensation as a cash expense.
Important Information About Our Financial Forecasts
Our management believes that our financial forecasts were prepared in good faith and on a reasonable basis on the best information available to
our management at the time of their preparation.
Our financial forecasts, however, are not fact and should not be relied upon as necessarily indicative of actual future results, and actual results may differ materially from those contained in our
financial forecasts.
The financial forecasts were not prepared with a view toward public disclosure, nor were they prepared with a
view toward compliance with published guidelines of the SEC or U.S. GAAP. Neither the independent registered public accounting firm of AMTI nor any other independent accountants have compiled, examined, or performed any audit or other procedures
with respect to the financial forecasts contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability.
As noted above, our financial forecasts include assumptions as to certain business decisions that are subject to change, as well as
assumptions related to industry performance and general economic conditions, each of which assumptions is inherently subjective and beyond the control of ATMI, including but not limited to expectations for demand and sales of new and existing
products, customer and supplier relationships, research and development programs, market and technology opportunities, international trends, business strategies, business opportunities, objectives of management for future operations,
microelectronics industry (including wafer start) growth and trends in the markets in which ATMI participates.
45
By including our financial forecasts in this proxy statement, none of ATMI, Entegris or any of
their respective representatives has made or makes any representation to any stockholder or to any other person regarding the ultimate performance of ATMI compared to the information contained in our financial forecasts. ATMI has made no
representation to Entegris or Merger Sub, in the merger agreement or otherwise, concerning the probability of achieving the financial forecasts. Our financial forecasts summarized in this section were prepared during the periods described above and
have not been updated to reflect any changes since the date they were made. We undertake no obligation, except as required by law, to update or otherwise revise our financial forecasts to reflect circumstances existing since their preparation or to
reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error, or to reflect changes in our business or general economic or industry conditions.
Effects on the Company if the Merger is Not Completed
If the merger agreement is not adopted by our stockholders or if the merger is not completed for any other reason, our stockholders will not
receive any payment for their shares of ATMI common stock in connection with the merger. Instead, we will remain an independent public company, and ATMI common stock will continue to be quoted on the NASDAQ Global Select Market.
If the merger is not consummated, we expect that our management will operate the business in a manner similar to that in which it is being
operated today and that our stockholders will be subject to the same risks and opportunities to which our business is currently subject, but there can be no assurance as to the effect of these risks and opportunities on the future value of your
shares of ATMI common stock. In the event the merger is not completed, our board of directors will continue to evaluate and review our business operations, projects and capitalization, make such changes as are deemed appropriate and seek to identify
acquisitions, joint ventures or strategic alternatives to enhance stockholder value. If the merger agreement is not adopted by our stockholders or if the merger is not consummated for any other reason, there can be no assurance that any other
transaction acceptable to us will be offered or that our business, prospects or results of operations will not be adversely impacted.
If
the merger agreement is terminated under certain circumstances, we may be obligated to pay Entegris a termination fee. Entegris may also be required to pay ATMI a termination fee under certain circumstances. See the section of this proxy statement
entitled
The Merger Agreement Termination Fees and Reimbursement of Expenses.
Financing of the Merger
The obligations of ATMI under the merger agreement are not subject to a condition regarding Entegriss or Merger Subs obtaining
funds to consummate the merger and the other transactions contemplated by the merger agreement. Entegris has represented in the merger agreement that it will have available to it at the closing of the merger, sufficient cash to consummate the merger
and to pay the aggregate merger consideration and any other amounts required to be paid by it in connection with the consummation of the transactions contemplated by the merger agreement and to pay all related fees and expenses of Entegris and
Merger Sub, and that there is no restriction on the use of such cash for such purposes. Entegris has also represented in the merger agreement that it has delivered to the Company a true and complete copy of each of (i) a commitment letter,
dated as of February 4, 2014, by and between Entegris and Goldman Sachs and (ii) a fee letter (with fees, economic terms and other customary provisions redacted), dated as of February 4, 2014, by and between Entegris and Goldman
Sachs, pursuant to which Goldman Sachs has agreed to provide certain financing to Entegris in connection with the consummation of the merger.
The financing is anticipated to be comprised of the following sources:
|
|
|
a senior secured term loan facility, with Entegris as borrower, in an aggregate principal amount of $460,000,000;
|
46
|
|
|
a senior secured asset-based revolving credit facility, with Entegris as borrower, in an aggregate principal amount of $85,000,000; and
|
|
|
|
a senior unsecured bridge loan facility, with Entegris as borrower, in an aggregate principal amount of $360,000,000, which will be provided to consummate the merger in the event that Entegris is unable to issue and
sell $360,000,000 of its senior unsecured notes at the closing of the merger.
|
Material U.S. Federal Income Tax Consequences
The following is a general summary of material U.S. federal income tax consequences of the merger to U.S. holders whose shares of ATMI common
stock are converted into the right to receive cash in the merger. This summary does not purport to consider all aspects of U.S. federal income taxation that might be relevant to our stockholders. For purposes of this summary, the term U.S.
holder means a beneficial owner of shares of ATMI 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 under the laws of the United States or any of its political subdivisions;
|
|
|
|
a trust if (i) a U.S. court is able to exercise primary supervision over the trusts administration and one or more U.S. persons is authorized to control all substantial interests of the trust; or (ii) it
was in existence on August 30, 1996 and has a valid election in effect under applicable U.S. Treasury regulations to be treated as a domestic trust for U.S. federal income tax purposes; or
|
|
|
|
an estate that is subject to U.S. federal income tax on its income regardless of its source.
|
A non-U.S. holder is a beneficial owner (other than a partnership or any entity or arrangement treated as a partnership for U.S.
federal income tax purposes) of ATMI common stock that is not a U.S. holder. If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds ATMI common stock, the tax treatment of a partner generally will
depend on the status of the partners and the activities of the partnership. A partner of a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holding ATMI common stock should consult its independent tax
advisor.
This summary is based on the Internal Revenue Code of 1986, as amended (referred to in this proxy statement as the Code), its
legislative history, U.S. Treasury regulations promulgated thereunder, published rulings by the Internal Revenue Service, and judicial and administrative decisions in effect as of the date of this proxy statement, all of which are subject to
differing interpretations and to change, possibly with retroactive effect. This summary applies only to beneficial owners who hold shares of ATMI common stock as capital assets within the meaning of Section 1221 of the Code and does
not apply to shares of ATMI common stock received in connection with the cancellation or exercise of employee stock options, restricted stock awards, restricted stock unit awards or Stock Credits under the Director Deferred Compensation Plans or
otherwise as compensation for services or through a tax-qualified retirement plan, stockholders who hold an equity interest, directly or indirectly, in Entegris after the merger, or to certain types of beneficial owners who may be subject to special
rules (such as insurance companies, banks, tax-exempt organizations, financial institutions, broker dealers, dealers in currencies, partnerships, S corporations or other pass-through entities (or investors in an S corporation or other pass-through
entity), mutual funds, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, traders in securities who elect the mark-to-market method of accounting for their securities, U.S. expatriates, stockholders
subject to the alternative minimum tax, stockholders that have a functional currency other than the U.S. dollar, or stockholders who hold ATMI common stock as part of a hedge, straddle, constructive sale, conversion transaction or other integrated
transaction). This summary does not address any aspect of state, local, foreign or federal non-income tax laws.
47
U.S. Holders
Exchange of Shares of ATMI Common Stock for Cash Pursuant to the Merger Agreement.
The receipt of cash in exchange for shares of ATMI
common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of ATMI common stock are converted into the right to receive cash in the merger will recognize capital
gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received in the merger with respect to such shares and the holders adjusted tax basis in such shares. Gain or loss will be determined
separately for each block of shares (i.e., shares acquired at the same cost in a single transaction). Such gain or loss will be long-term capital gain or loss, provided that a U.S. holders holding period is more than one year at the time of
the consummation of the merger. Certain limitations apply to the use of capital losses. Long-term capital gains for certain non-corporate U.S. holders, including individuals, are generally eligible for a reduced rate of federal income taxation. In
addition, certain non-corporate U.S. holders, including individuals, may be subject to an additional 3.8% tax on all or a portion of their net investment income, which may include all or a portion of the gain recognized in connection
with the merger.
Backup Withholding and Information Reporting.
The receipt of cash in exchange for shares of ATMI common stock by
a U.S. holder pursuant to the merger may be subject to information reporting and backup withholding tax at the applicable rate, unless the U.S. holder (i) timely furnishes an accurate taxpayer identification number and otherwise complies with
applicable U.S. information reporting or certification requirements (typically by completing and signing an Internal Revenue Service Form W-9, a copy of which will be included as part of the letter of transmittal to be timely returned to the paying
agent); or (ii) is a corporation or other exempt recipient and, when required, establishes such fact in a manner satisfactory to the paying agent. U.S. holders who are exempt recipients not subject to backup withholding should indicate their
exempt status on the Internal Revenue Service Form W-9 included as part of the letter of transmittal to be timely returned to the paying agent. Backup withholding is not an additional tax and any amounts withheld under the backup withholding rules
may be refunded or credited against a U.S. holders U.S. federal income tax liability, if any, provided that the required information is furnished to the Internal Revenue Service in a timely manner.
Appraisal Rights.
Generally, a U.S. holder of ATMI common stock who properly demands and perfects appraisal rights under Delaware law
with respect to such holders ATMI common stock will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received in respect to such shares and the holders
adjusted tax basis in such shares, except that a portion of the cash received may be taxable as interest.
Non-U.S. Holders
Exchange of Shares of ATMI Common Stock for Cash Pursuant to the Merger Agreement.
Any gain realized on the receipt of cash in the
merger by a non-U.S. holder generally will not be subject to U.S. federal income tax unless:
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such gain is effectively connected with the conduct of a trade or business by the non-U.S. holder in the U.S. (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed
base in the U.S.), in which case the non-U.S. holder generally will be subject to U.S. federal income tax on such gain in the same manner as a U.S. holder, provided such non-U.S. holder provides an Internal Revenue Service Form W-8ECI and, if the
non-U.S. holder is a foreign corporation, such corporation may be subject to branch profits tax at the rate of 30% (or such lower rate as may be specified by an applicable income tax treaty);
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the non-U.S. holder is an individual who is present in the U.S. for 183 days or more in the taxable year of the disposition, and certain other conditions are met, in which case the non-U.S. holder generally will be
subject to a 30% tax (or such reduced rate as may be provided in an applicable treaty) on the non-U.S. holders net gain realized in the merger, which may be offset by U.S. source capital losses of the non-U.S. holder, if any; or
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48
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the non-U.S. holder owned (directly, indirectly or constructively) more than 5% of the outstanding ATMI common stock at any time during the five years preceding the merger, and we are or have been a United States
real property holding corporation for U.S. federal income tax purposes at any time during such non-U.S. holders ownership of more than 5% of ATMI common stock. Although there can be no assurances in this regard, we do not believe that we
are or have been at any time during the five years preceding the merger a United States real property holding corporation for U.S. federal income tax purposes.
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Backup Withholding and Information Reportin
g. A non-U.S. holder will be subject to information reporting and, in certain circumstances,
backup withholding with respect to the cash received by such holder pursuant to the merger, unless such non-U.S. holder certifies under penalties of perjury that it is not a United States person (and the payor does not have actual knowledge or
reason to know that the holder is a United States person as defined under the Code) or such holder otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax and any amounts withheld under the
backup withholding rules may be refunded or credited against a non-U.S. holders U.S. federal income tax liability, if any. In order to avoid backup withholding, a non-U.S. holder should complete and sign an appropriate Form W-8 which may be
obtained at
www.irs.gov
.
The U.S. federal income tax consequences described above are not intended to constitute tax advice nor
a complete discussion of all tax consequences relating to the merger. Because individual circumstances may differ, each stockholder should consult its independent tax advisor regarding the applicability of the rules discussed above and the
particular tax effects to the stockholder of the merger in light of such stockholders particular circumstances, the application of state, local, foreign and federal non-income tax laws, and, if applicable, the tax consequences of the receipt
of cash in connection with the cancellation or exchange of options, restricted stock awards, restricted stock unit awards or Stock Credits under the Director Deferred Compensation Plans, including the transactions described in this proxy statement
relating to our other equity compensation and benefit plans.
Interests of Certain Persons in the Merger
When considering the recommendation by our board of directors that our stockholders 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 other stockholders. Our board of directors was aware of these interests and considered them, among other matters, in
unanimously approving and declaring advisable the execution, delivery and performance of the merger agreement and the transactions contemplated by the merger agreement, including the merger, and determining that entering into the merger agreement
and consummating the merger, are fair to, and in the best interests of, ATMIs stockholders, and in making its recommendation that ATMIs stockholders adopt the merger agreement. These interests are described below.
Beneficial Ownership and Treatment of ATMI Common Stock
As of [
], 2014, the record date for the special meeting, our directors and executive
officers beneficially owned and were entitled to vote, in the aggregate, approximately [
] shares of ATMI common stock, or approximately [
]% of
the total ATMI common stock outstanding on that date. These numbers do not give effect to outstanding stock options, Restricted Stock Unit Awards or Stock Credits under the Director Deferred Compensation Plans (as defined below), which are not
entitled to vote at the special meeting, but do include Restricted Stock Awards which are entitled to vote at the special meeting.
Our
directors and executive officers will receive the same $34.00 per share for their outstanding shares of ATMI common stock as our other stockholders. For further information with respect to the ownership of ATMI common stock of our directors and
executive officers, see
Security Ownership of Certain Beneficial Owners, Directors and Executive Officers.
49
Treatment of Outstanding Equity Awards, Director Deferred Compensation Plans and Employee Stock Purchase
Plan
Stock Options
The
merger agreement provides that, immediately prior to the effective time of the merger, each option to acquire shares of ATMI common stock that is then outstanding and that has an exercise price less than the $34.00 per share merger consideration,
whether or not then vested or exercisable, will be cancelled and terminated, and each holder of such an option will have the right to receive an amount of cash equal to (i) the number of shares of ATMI common stock subject to each such option,
multiplied by (ii) the excess of $34.00 over the exercise price per share of each such option, less any applicable withholding taxes.
Restricted
Stock Awards
The merger agreement provides that, immediately prior to the effective time of the merger, each Company Restricted Stock
Award that is then outstanding will be cancelled and terminated, and each holder of a Company Restricted Stock Award will have the right to receive an amount in cash equal to (i) the number of shares of ATMI common stock subject to such Company
Restricted Stock Award, multiplied by (ii) $34.00, less any applicable withholding taxes.
Restricted Stock Unit Awards
The merger agreement provides that, immediately prior to the effective time of the merger, each Company Restricted Stock Unit Award that is
then outstanding will be cancelled and terminated, and each holder of a Company Restricted Stock Unit Award will have the right to receive an amount in cash equal to (i) the number of shares of ATMI common stock subject to such Company
Restricted Stock Unit Award (determined based on the actual performance achieved as if the closing date of the merger represented the end date of the performance period), multiplied by (ii) $34.00, less any applicable withholding taxes.
Director Deferred Compensation Plan
The
merger agreement provides that following the consummation of the merger, each non-employee director who is a participant in a Director Deferred Compensation Plan will have the right to receive, upon their termination of service on our board, an
amount in cash equal to the product of (i) the number of Stock Credits (as defined in the applicable Director Deferred Compensation Plan) credited to such participants Stock Account (as defined in the applicable Director Deferred
Compensation Plan), multiplied by (ii) $34.00 less any applicable withholding taxes.
Employee Stock Purchase Plan
The merger agreement provides that as soon as practicable following the date of the merger agreement, ATMI will take all actions necessary
(i) to suspend the ATMI 1998 Employee Stock Purchase Plan (referred to in this proxy statement as the ESPP) effective immediately such that no additional offering periods shall be commenced between the date of the merger agreement and the
effective time of the merger, (ii) to cancel each outstanding right to purchase shares of ATMI common stock in accordance with the ESPP and (iii) to refund all sums collected from participants during the offering period (as defined in the
ESPP) then in progress.
Summary Table
The following table shows, for each executive officer and each director, as applicable, (i) the number of shares of ATMI common stock
subject to vested and unvested options held by him or her; (ii) the cash consideration that he or she will receive for such options upon completion of the merger; (iii) the number of shares of ATMI common stock subject to unvested Company
Restricted Stock Awards held by him or her; (iv) the cash consideration that he or she will receive for such Company Restricted Stock Awards upon completion of the merger; (v) the number of shares of ATMI common stock subject to Company
Restricted Stock Unit Awards (determined based on achievement of the maximum level of performance under such awards) held
by him or her; (vi) the
cash consideration that he or she will receive for such Company Restricted Stock Unit
50
Awards upon completion of the merger; (vii) the number of Stock Credits credited to his or her Stock Account under the applicable Director Deferred Compensation Plan; (viii) the cash
consideration that he or she will receive for such Stock Credits following completion of the merger in accordance with the terms of the applicable Director Deferred Compensation Plan; and (ix) the total cash consideration he or she will receive
for all outstanding equity awards upon completion of the merger, and for all Stock Credits following completion of the merger in accordance with the terms of the applicable Director Deferred Compensation Plan, in each case as of an assumed merger
closing date of May 30, 2014, based on applicable holdings on the date hereof and assuming continued employment or service through the assumed merger closing date (and as such without regard to any grants that may be made after the date
hereof).
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Name
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Number
of Shares
Subject to
Stock
Options
(1)
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Number of
Shares
Subject to
Unvested
Stock
Options (#)
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Cash-Out
Payment
for Stock
Options
($) (2)
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Number
of Shares
Subject to
Unvested
Company
Restricted
Stock
Awards
(#) (3)
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Cash-Out
Payment
for
Unvested
Company
Restricted
Stock
Awards
($)
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Number
of Shares
Subject to
Company
Restricted
Stock
Unit
Awards
(#)
(4)
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Cash-Out
Payment
for
Company
Restricted
Stock
Unit
Awards
($)
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Number of
Stock Credits
in Director
Deferred
Compensation
Plan Stock
Account (#)
(5)
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Payment for
Stock Credits
in Director
Deferred
Compensation
Plan Stock
Account ($)
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Total
Payment for
Outstanding
Equity ($)
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Executive Officers
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Douglas A. Neugold
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336,185
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73,263
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3,890,589
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37,787
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1,284,758
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105,507
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3,587,238
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0
|
|
|
|
0
|
|
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8,762,585
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Timothy C. Carlson
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157,102
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31,588
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2,013,913
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15,982
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543,371
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42,292
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1,437,928
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0
|
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0
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3,995,212
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Lawrence H. Dubois
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70,959
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17,033
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741,185
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9,123
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310,182
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23,689
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805,426
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0
|
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0
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1,856,793
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Tod A. Higinbotham (6)
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0
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0
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0
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0
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0
|
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2,319
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78,838
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0
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0
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78,838
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Christian F. Kramer
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16,920
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12,690
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205,578
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22,617
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768,978
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28,473
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968,082
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0
|
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0
|
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1,942,638
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Kathleen G. Mincieli
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34,842
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12,386
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479,328
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8,487
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|
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288,550
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19,890
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|
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676,260
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0
|
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0
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1,444,138
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Mario Philips (7)
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26,100
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12,386
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331,263
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0
|
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0
|
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|
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0
|
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0
|
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|
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0
|
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0
|
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331,263
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Daniel P. Sharkey
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123,755
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24,464
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1,330,491
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12,555
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426,862
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33,064
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1,124,176
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0
|
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0
|
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2,881,528
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Patrick J. Shima
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3,371
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3,371
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31,991
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28,542
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970,428
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13,170
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447,780
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0
|
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0
|
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1,450,199
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Non-Employee Directors
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Mark A. Adley
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41,814
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0
|
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|
|
512,859
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|
|
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6,192
|
|
|
|
210,528
|
|
|
|
0
|
|
|
|
0
|
|
|
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31,043
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|
|
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1,055,462
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|
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1,778,849
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Eugene G. Banucci, Ph.D.
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50,501
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|
|
0
|
|
|
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689,273
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|
|
|
6,192
|
|
|
|
210,528
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
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899,801
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Stephen H. Mahle
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41,814
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|
|
|
0
|
|
|
|
512,859
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|
|
|
6,192
|
|
|
|
210,528
|
|
|
|
0
|
|
|
|
0
|
|
|
|
28,706
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|
|
|
976,004
|
|
|
|
1,699,391
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C. Douglas Marsh
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|
|
41,814
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|
|
|
0
|
|
|
|
512,859
|
|
|
|
6,192
|
|
|
|
210,528
|
|
|
|
0
|
|
|
|
0
|
|
|
|
21,505
|
|
|
|
731,170
|
|
|
|
1,454,557
|
|
George M. Scalise
|
|
|
17,984
|
|
|
|
0
|
|
|
|
250,013
|
|
|
|
6,192
|
|
|
|
210,528
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
460,541
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|
Mark B. Segall
|
|
|
2,960
|
|
|
|
2,960
|
|
|
|
32,205
|
|
|
|
5,121
|
|
|
|
174,114
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
206,319
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|
Cheryl L. Shavers, Ph.D.
|
|
|
37,611
|
|
|
|
0
|
|
|
|
462,502
|
|
|
|
6,192
|
|
|
|
210,528
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
673,030
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|
Robert S. Hillas (8)
|
|
|
41,814
|
|
|
|
0
|
|
|
|
512,859
|
|
|
|
833
|
|
|
|
28,322
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
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541,181
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(1)
|
Includes the aggregate number of shares that are subject to vested and unvested options to purchase shares of ATMI common stock.
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(2)
|
Includes the aggregate cash-out value of vested and unvested options to purchase shares of ATMI common stock. The value of each stock option to purchase shares of ATMI common stock is calculated as (a) the merger
consideration of $34.00 minus the exercise price of the stock option multiplied by (b) the number of shares subject to the option.
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(3)
|
Includes shares subject to unvested Company Restricted Stock Awards. The value of such Company Restricted Stock Awards is calculated as the merger consideration of $34.00 multiplied by the number of shares subject to
the award.
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(4)
|
Includes shares that are subject to unvested Company Restricted Stock Unit Awards, with the number of shares determined based on achievement of the maximum level of performance under such awards. The value of such
Company Restricted Stock Unit Awards is calculated as the merger consideration of $34.00 multiplied by the maximum number of shares subject to the award. Amounts actually paid in respect of Company Restricted Stock Unit Awards, which could range
from $0 to the maximum amount shown, will be determined based on the actual performance achieved as if the closing date of the merger represented the end date of the performance period.
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(5)
|
Includes number of Stock Credits with respect to shares of ATMI common stock in Director Deferred Compensation Plan Stock Account. The value of such Stock Credits is calculated as the merger consideration of $34.00
multiplied by the number of Stock Credits.
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(6)
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Mr. Higinbothams employment with ATMI terminated on February 12, 2013.
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(7)
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Upon the closing of the Life Sciences transaction, (i) Mr. Philips had 22,040 shares of ATMI common stock subject to Company Restricted Stock Awards that became vested; and (ii) Mr. Philips had
Company Restricted Stock Unit Awards become vested based on the actual performance achieved as of the closing date of the Life Sciences transaction, and he received 37,823 shares of ATMI common stock upon the settlement of such Company Restricted
Stock Unit Awards.
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(8)
|
Mr. Hillass term as a director of ATMI expired on May 22, 2013.
|
Employment Agreements
ATMI is a party to employment agreements with Douglas A. Neugold, Chairman, President and Chief Executive Officer, Daniel P.
Sharkey, Executive Vice President, Business Development, and Timothy C. Carlson, Executive Vice President, Chief Financial Officer and Treasurer, as amended through February 3, 2014 (the employment agreements collectively, as amended, referred
to in this proxy statement as the Employment Agreements).
51
Pursuant to the Employment Agreements, if ATMI terminates an executive without cause,
or if an executive resigns for good reason, within 548 days following a change in control (in each case as defined the Employment Agreements), which would include the merger, ATMI will pay the executive cash severance equal
to two and a half (2.5) times the sum of the executives then-current annual base salary and annual target bonus, for a period of thirty (30) months after termination (with respect to Mr. Neugold), or cash severance equal to two
(2) times the sum of the executives then-current annual base salary and annual target bonus for a period of twenty-four (24) months after termination (in the case of Messrs. Sharkey and Carlson). In addition, the Employment
Agreements provide that, (i) with respect to Company Restricted Stock Unit Awards, the executive would be entitled to acceleration of the end of the performance period to the date of the change of control, and vesting would then be determined
as of such date (and any applicable time vesting would remain in place following the change of control), (ii) with respect to Company Restricted Stock Awards, the executive would be entitled to accelerated vesting of such awards and
(iii) all options to acquire shares of ATMI common stock held by the executives would vest and would remain exercisable for one year following termination (or until expiration of the options, if sooner). In addition, if the executive elects
continued health care and/or dental coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (referred to in this proxy statement as COBRA), ATMI would contribute to the cost of such coverage on the same basis ATMI would have
contributed to the cost of such coverage had the executive continued to be an active ATMI employee, and the executive will be eligible to receive outplacement services selected by ATMI and at ATMIs expense for six months following termination.
As a condition of an executives receipt of the severance payments and benefits under the Employment Agreements, the executive is
required to execute, and not revoke, a release of claims, and will be subject to certain non-competition and non-solicitation restrictions (for two (2) years in the case of Mr. Neugold, and one (1) year for Messrs. Sharkey and
Carlson).
Under the Employment Agreements, if an amount payable to the employee constitutes a parachute payment within the
meaning of Section 280G of the Code, such payment will be reduced to the extent necessary so that no amount payable to the executive constitutes a parachute payment. However, the executives payments will not be subject to
reduction if the net after-tax payment to which the executive would otherwise be entitled without such reduction would be greater than the net after-tax payment to the executive resulting from the receipt of such payments with such reduction. All
determinations under the provision will be made by a nationally recognized accounting firm mutually agreed to by the employee and ATMI.
See
Proposal 3: Advisory Vote Regarding Golden Parachute Compensation
for quantification of the severance payments and
benefits to which Messrs. Neugold, Sharkey and Carlson would be entitled under their employment agreements upon a qualifying termination of employment.
Executive Severance Pay Plan
On
February 3, 2014, ATMI announced the ATMI, Inc. Executive Severance Pay Plan (referred to in this proxy statement as the Severance Plan). The Severance Plan, which becomes effective as of the date of a change of control (as
defined in the Severance Plan), which would include the merger, provides severance protection for eligible employees in the event of termination of employment under certain circumstances in connection with the change of control.
The following executive officers are eligible to participate in the Severance Plan: Lawrence H. Dubois, Senior Vice President and Chief
Technology Officer, Christian F. Kramer, Senior Vice President and General Manager, Microelectronics, Kathleen G. Mincieli, Senior Vice President, Human Resources and Patrick J. Shima, Senior Vice President and Chief Legal Officer.
In order to participate in the Severance Plan, each eligible executive will enter into a restrictive covenants agreement with ATMI that
provides that, for a period of twelve (12) months following termination of the
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executives employment with ATMI, the executive will be subject to certain covenants regarding non-competition, non-solicitation of employees and non-interference with ATMIs business.
Under the Severance Plan, upon termination of an eligible executives employment without cause or resignation for
good reason (in each case as defined in the Severance Plan) within eighteen (18) months following a change of control, the executive would be entitled to severance pay equal to one and a half (1.5) times the sum of the
executives then-current annual base salary and annual target bonus, for a period of eighteen (18) months after termination. In addition, if the executive elects continued health care coverage under COBRA, in lieu of otherwise applicable
COBRA rates, the executives contributions will be at the then-applicable active employee rate, and the executive will be eligible to receive outplacement services selected by ATMI and at ATMIs expense for six months.
As a condition of an executives receipt of the payments and benefits under the Severance Plan, the executives are required to execute,
and not revoke, a release of claims.
Under the Severance Plan, if an amount payable to an executive constitutes a parachute
payment within the meaning of Section 280G of the Code, such payment will be reduced to the extent necessary so that no amount payable to the executive constitutes a parachute payment. However, the executives
payments will not be subject to reduction if the net after-tax payment to which the executive would otherwise be entitled without such reduction would be greater than the net after-tax payment to the executive resulting from the receipt of such
payments with such reduction. All determinations under the provision will be made by a nationally recognized accounting firm mutually agreed to by the executive and ATMI.
See
Proposal 3: Advisory Vote Regarding Golden Parachute Compensation
for quantification of the severance payments and
benefits to which Messrs. Kramer and Dubois would be entitled under the Severance Plan upon a qualifying termination of employment.
Assuming a merger closing date of May 30, 2014, and assuming that the employment of Ms. Mincieli and Mr. Shima is terminated
without cause immediately following the closing on May 30, 2014, (i) the aggregate amount of cash severance payments under the Severance Plan would be $607,500 with respect to Ms. Mincieli and $709,125 with respect to Mr. Shima,
and (ii) the value of continued medical and dental coverage and outplacement services, in each case under the Severance Plan, would be $22,191 with respect to Ms. Mincieli and $39,161 with respect to Mr. Shima. These amounts do not
reflect any reductions which may be made to payments which constitute parachute payments under the Code.
Transaction Bonus Agreement
On January 13, 2014, ATMI entered into a transaction bonus agreement (referred to in this proxy statement as the Transaction
Bonus Agreement) with Christian Kramer, as well as with certain other (non-executive officer) employees of the Company.
The Transaction
Bonus Agreement generally provides that, upon a change of control (as defined in the Transaction Bonus Agreement), which includes the merger, within one (1) year following the effective date of the Transaction Bonus Agreement,
subject to ATMIs shareholders receiving transaction value (as defined in the Transaction Bonus Agreement) of at least $900,000,000, Mr. Kramer would be entitled to a transaction bonus equal to the sum of (i) the total
transaction value, multiplied by the base bonus ratio (as defined in the Transaction Bonus Agreement) of 0.20%, multiplied by 17.5%, and (ii) the excess amount of transaction value above $1,000,000,000, multiplied by the
additional bonus ratio (as defined in the Transaction Bonus Agreement), which ranges from 0% to 0.20% based on the amount of transaction value, multiplied by 17.5%. The transaction bonus will be paid in a cash lump sum within five days
following the change of control.
In order to be eligible for a transaction bonus, Mr. Kramer generally must remain employed through
the change of control. However, if Mr. Kramers employment is terminated without cause (as defined in the Transaction Bonus Agreement) following the signing of a definitive agreement in respect of a change of control, he will
remain eligible for the transaction bonus if the change of control is consummated within one (1) year
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following the effective date of the Transaction Bonus Agreement, subject to Mr. Kramers continued compliance with restrictive covenants in any equity award agreement or other agreement
between Mr. Kramer and ATMI.
Pursuant to the Transaction Bonus Agreement, if an amount payable to Mr. Kramer constitutes a
parachute payment within the meaning of Section 280G of the Code, such payment will be reduced to the extent necessary so that no amount payable to the executive constitutes a parachute payment. However,
Mr. Kramers payments will not be subject to reduction if the net after-tax payment to which he would otherwise be entitled without such reduction would be greater than the net after-tax payment to him resulting from the receipt of such
payments with such reduction. All determinations under the provision will be made by a nationally recognized accounting firm designated by ATMI.
See
Proposal 3: Advisory Vote Regarding Golden Parachute Compensation
for quantification of the transaction bonus payment
to which Mr. Kramer is entitled under the Transaction Bonus Agreement.
Cash Payments to Directors
On February 3, 2014, our board of directors approved payments of $100,000 to each of directors Mark A. Adley and Mark B. Segall for their
efforts in connection with ATMIs evaluation of strategic alternatives in their capacity as directors (including as members of the transaction committee), which amounts shall be paid to such individuals on or prior to completion of the merger.
Indemnification and Insurance
All rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the
effective time of the merger existing in favor of the current or former directors, officers or employees of ATMI and its subsidiaries as provided in their respective certificates of incorporation or by-laws (or comparable organizational documents)
and any indemnification or other similar agreements of ATMI or any of its subsidiaries, in each case as in effect on the date of the merger agreement, will continue in full force and effect in accordance with their terms. For six years following the
effective time of the merger, the surviving company will, and Entegris will cause the surviving company to, maintain in effect the provisions in its certificate of incorporation and by-laws to the extent they provide for indemnification, advancement
and reimbursement of expenses and exculpation of each ATMI indemnified party (as described below), with respect to facts or circumstances occurring at or prior to the effective time of the merger, on the same basis as set forth in the ATMI
certificate of incorporation and ATMI by-laws in effect on the date of the merger agreement, to the fullest extent permitted from time to time under applicable law, which provisions shall not be amended except as required by applicable law or except
to make changes permitted by applicable law that would enlarge the scope of the indemnified parties indemnification rights thereunder.
From and after the effective time of the merger, to the fullest extent permitted by applicable law (including to the fullest extent authorized
or permitted by any amendments to or replacements of the DGCL adopted after the date of the merger agreement that increase the extent to which a corporation may indemnify its officers and directors) the surviving company will indemnify and hold
harmless each individual who was as of the date of the merger agreement, or who becomes prior to the effective time of the merger, a director or officer of ATMI or any of its subsidiaries or who was as of the date of the merger agreement, or who
thereafter commences prior to the effective time of the merger, serving at the request of ATMI or any of its subsidiaries as a director or officer of another entity, against all losses incurred in connection with any actual or threatened legal
action arising out of or pertaining to the fact that such person is or was an officer or director of ATMI or any of its subsidiaries or is or was serving at the request of ATMI or any of its subsidiaries as a director or officer of another entity,
whether asserted or claimed prior to, at or after the effective time of the merger. In the event of any such legal action, each such person will be entitled to advancement of expenses incurred in the defense of any such legal action from the
surviving company within ten business days of receipt by the surviving company from such person of a request therefor; provided, that any person to whom expenses are advanced provides an undertaking, if and only
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to the extent required by the DGCL or the surviving companys certificate of incorporation or by-laws, to repay such advances if it is ultimately determined by final adjudication that such
person is not entitled to indemnification. The surviving company will cooperate in the defense of any such matter.
For a period of six
years after the effective time of the merger, the surviving company must either cause to be maintained in effect the current policies of directors and officers liability insurance and fiduciary liability insurance maintained by ATMI or
its subsidiaries or provide substitute policies for ATMI and its current and former directors and officers who are currently covered by the directors and officers and fiduciary liability insurance coverage currently maintained by ATMI in
either case, of not less than the existing coverage and having other terms not less favorable to the insured persons than the directors and officers liability insurance and fiduciary liability insurance coverage currently maintained by
ATMI with respect to claims arising from facts or events that occurred on or before the effective time of the merger, except that the surviving company will not be required to pay for any one policy year of such insurance policies, more than 300% of
the aggregate annual premium most recently paid by ATMI prior to the date of the merger agreement, and if the surviving company is unable to obtain such insurance it must obtain as much comparable insurance as possible for the years within such
six-year period for an annual premium equal to such maximum amount, in respect of each policy year within such period. In lieu of such insurance, prior to the closing date of the merger ATMI may, at its option (following reasonable consultation with
Entegris), purchase a tail directors and officers liability insurance policy and fiduciary liability insurance policy for ATMI and its current and former directors and officers who are currently covered by the directors
and officers and fiduciary liability insurance coverage maintained by ATMI as of the date of the merger agreement, with such tail policy providing coverage in an amount not less than the existing coverage and having other terms not less
favorable to the insured persons than the directors and officers liability insurance and fiduciary liability insurance coverage maintained by ATMI as of the date of the merger agreement with respect to claims arising from facts or events
that occurred on or before the effective time of the merger. However, in no event may the cost of any such tail policy in respect of any one policy year exceed 300% of the aggregate annual premium most recently paid by ATMI prior to the date of the
merger agreement in respect of its directors and officers liability insurance and fiduciary liability insurance policies.
Governmental and
Regulatory Approvals
Under the HSR Act, and the rules promulgated thereunder by the FTC, the merger may not be completed until
notification and report forms have been filed with the FTC and the Antitrust Division of the DOJ, and the applicable waiting period has expired or been terminated. ATMI and Entegris filed the notification and report forms under the HSR Act with the
FTC and the DOJ on February 19, 2014, which triggered an initial 30-day waiting period. The DOJ, the FTC, state Attorneys General or private parties may also challenge the merger on antitrust grounds either before or after the transaction has
closed. Accordingly, while the parties believe that the transaction complies with the applicable antitrust laws, it is possible that at any time before or after expiration or termination of the HSR Act waiting period or even after the completion of
the merger, any of the DOJ, the FTC, state Attorneys General or private parties could take action under the antitrust laws as deemed necessary or desirable in the public or other interest, including without limitation seeking to enjoin the
completion of the merger or permitting completion subject to regulatory concessions or conditions.
At any time before or after
consummation of the merger, notwithstanding expiration or early termination of the waiting period under the HSR Act, the DOJ or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the consummation of the merger or seeking divestiture of substantial assets of ATMI or Entegris. At any time before or after the consummation of the merger, and notwithstanding the expiration or early termination of the
waiting period under the HSR Act, any state could take such action under the antitrust laws as it deems necessary or desirable in the public interest. Such action could include seeking to enjoin the consummation of the merger or seeking divestiture
of substantial assets of ATMI or Entegris. Nothing in the merger agreement will (i) require Entegris or Merger Sub to sell, divest, convey or hold separate or otherwise take any other action (and ATMI will not undertake any such action without
Entegriss prior written consent) that limits Entegriss and its subsidiaries freedom of action with respect to, or
55
their ability to retain, particular products, assets or businesses of Entegris or ATMI or their respective subsidiaries, or agree to take any such action, other than, solely in respect of
products, assets or businesses of ATMI (and not any products, assets, or businesses of Entegris), only to the extent that such action would not reasonably be expected to impact in any material respect the expected benefits to Entegris and its
subsidiaries, taken as a whole, of the transactions contemplated by the merger agreement; (ii) require Entegris, ATMI or their respective subsidiaries to take or agree to take any action with respect to its business or operations unless the
effectiveness of such agreement or action is conditioned upon the closing of the merger; (iii) require any of the parties to the merger agreement to compensate any third party, commence or participate in litigation or offer or grant any
accommodation (financial or otherwise) to any third party to obtain any such consent or approval; or (iv) permit ATMI or any of its subsidiaries to take or agree to certain other actions without Entegriss prior written consent, not to be
unreasonably withheld, with respect to (ii) above, in order to obtain antitrust clearance (see the section of this proxy statement entitled
The Merger Agreement Regulatory Matters
). Private parties may also seek to
take legal action under the antitrust laws under certain circumstances.
In addition to those approvals required pursuant to the HSR Act,
and the rules promulgated thereunder, the parties have agreed to obtain certain other approvals under non-U.S. antitrust laws as a condition to the closing of the merger. Under the merger control rules of certain jurisdictions outside the United
States where the parties conduct business, filings will be required and it may be necessary to observe waiting periods and/or obtain approvals prior to the completion of the merger. The period for review of the merger will vary from jurisdiction to
jurisdiction and may be affected by a variety of factors.
The term antitrust laws means the Sherman Act, as amended, the
Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, all applicable foreign antitrust laws and all other applicable laws issued by any government, court, regulatory or administrative agency, commission or authority or
other governmental instrumentality, whether federal, state or local, domestic, foreign or multinational, designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening
of competition through merger or acquisition.
We cannot assure you that an antitrust or other regulatory challenge to the merger will not
be made.
Delisting and Deregistration of ATMI Common Stock
If the merger is completed, ATMI common stock will no longer be traded on the NASDAQ Global Select Market and will be deregistered under the
Exchange Act, and we will no longer be required to file periodic reports with the SEC in respect of ATMI common stock.
Litigation Related to the
Merger
On or about February 7, 2014, a putative class action complaint challenging the merger was filed in the Superior Court of
the State of Connecticut, Judicial District of Danbury, captioned
Andrew Pace v. ATMI, Inc., et al
. The complaint was filed on behalf of the public shareholders of ATMI and names as defendants ATMI, the members of its board of directors,
Entegris and Merger Sub. The complaint generally alleges that ATMIs directors breached their fiduciary duties to ATMIs shareholders by agreeing to sell ATMI for inadequate and unfair consideration and pursuant to an inadequate and unfair
process, and that ATMI, Entegris and Merger Sub aided and abetted those alleged breaches. The complaint seeks, among other things, to enjoin the merger. The defendants have not yet responded to the complaint, but believe that the claims asserted
against them are without merit.
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THE MERGER AGREEMENT
The following describes certain material provisions of the merger agreement, which is attached as Annex A to this proxy statement and which
is incorporated by reference herein. The description in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the merger agreement. This summary does not purport to be complete and may not contain all of the
information about the merger agreement that is important to you. ATMI encourages you to read carefully the merger agreement in its entirety before making any decisions regarding the merger because it is the principal document governing the merger.
The merger agreement and this summary of its terms have been included to provide you with information regarding the terms of the
merger agreement. Factual disclosures about ATMI contained in this proxy statement or in ATMIs public reports filed with the SEC may supplement, update or modify the factual disclosures about ATMI contained in the merger agreement and
described in this summary. The representations, warranties and covenants made in the merger agreement by ATMI were qualified and subject to important limitations agreed to by ATMI in connection with negotiating the terms of the merger agreement and
may be subject to a contractual standard of materiality which may differ from what may be viewed as material by investors. In particular, in your review of the representations and warranties contained in the merger agreement and described in this
summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the right not to close the merger if the
representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement, rather than establishing matters as facts. Information concerning the
subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement.
The Merger
Subject to the terms and
conditions of the merger agreement and in accordance with the DGCL, at the effective time of the merger, Merger Sub, a wholly owned subsidiary of Entegris and a party to the merger agreement, will merge with and into ATMI. ATMI will survive the
merger as a direct wholly owned subsidiary of Entegris (following the merger, ATMI is referred to in this proxy statement as the surviving company) and the separate corporate existence of Merger Sub will cease.
Effective Time; Closing
The effective
time of the merger will occur at the time the parties file a certificate of merger with the Secretary of State of the State of Delaware on the closing date of the merger or such later time as agreed to by Entegris and ATMI and specified in the
certificate of merger.
Unless ATMI and Entegris agree otherwise, the closing of the merger will occur on the second business day after
the conditions to the merger set forth in the merger agreement have been satisfied or waived. However, if the marketing period (as described below) has not ended at the time of the satisfaction or waiver of such conditions (other than
those conditions that by their nature are to be satisfied at the closing), the closing of the merger will take place instead on the earlier to occur of (i) any business day during the marketing period to be specified by Entegris to ATMI on no
less than two business days written notice to ATMI and (ii) the third day following the final day of the marketing period, but in each case subject to the satisfaction or waiver of the conditions to the merger.
Marketing Period
The marketing
period referred to above is the first period of 18 consecutive business days starting on the first business day after the date of ATMIs delivery of the required information (as described under
Financing
Covenant
) throughout which (i) Entegris will have all of the required information regarding ATMI and during which period such information will remain compliant with applicable securities laws and (ii) the conditions to each
partys
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obligations to close the merger have been satisfied (other than those conditions that by their terms are to be satisfied at the closing of the merger) and nothing has occurred and no condition
exists that would cause any of the closing conditions set forth in the merger agreement to fail to be satisfied, assuming that the closing date of the merger were to be scheduled for any time during such 18 consecutive business day period.
However, the marketing period will not commence if, prior to the completion of the marketing period, (i) ATMIs auditors will have
withdrawn or qualified any audit opinion with respect to the required information (in which case the marketing period will not be deemed to commence unless and until a new unqualified audit opinion is issued by ATMIs independent accountants or
former independent accountants (which will be an independent registered public accounting firm)), (ii) the financial statements included in the required information that are available to Entegris on the first day of the marketing period would
not be sufficiently current on any day during such period to be compliant (in which case the marketing period will not be deemed to commence until the receipt by Entegris of updated required information that is compliant), (iii) ATMI issues a
public statement indicating its intent to restate any material financial information of ATMI or that any such restatement is under consideration or may be a possibility (in which case the marketing period will not be deemed to commence unless and
until such restatement has been completed and the relevant financial statements have been amended or ATMI has determined that no restatement will be required in accordance with GAAP) or (iv) ATMI will have failed to file any annual, quarterly
or period report with the SEC that was required to be filed by it with the SEC by the date required under the Exchange Act containing all of the financial information required to be contained therein (in which case the marketing period will not be
deemed to commence unless and until all such reports have been filed).
The marketing period will end on any earlier date on which the
entire debt financing has been consummated in accordance with its terms.
Merger Consideration
ATMI Common Stock
The merger
agreement provides that each share of ATMI common stock outstanding immediately prior to the effective time of the merger (other than shares of ATMI common stock owned by ATMI as treasury stock or owned directly by Entegris, Merger Sub, ATMI BVBA or
any of its subsidiaries (referred to in this proxy statement as a Life Sciences subsidiary) or by any direct or indirect wholly-owned subsidiary of ATMI, Entegris or Merger Sub, Company Restricted Stock Awards or shares of ATMI common stock the
holders of which have properly perfected their appraisal rights under Delaware law) will be cancelled and converted into the right to receive $34.00 in cash, without interest or dividends thereon, less any applicable withholding taxes.
The merger agreement provides that each share of ATMI common stock held by ATMI as treasury stock and each share of ATMI common stock owned by
Entegris, Merger Sub or any Life Sciences subsidiary will be cancelled and no consideration will be delivered in exchange therefor. Shares of ATMI common stock owned by any direct or indirect wholly owned subsidiary of ATMI that is not a Life
Sciences subsidiary (referred to in this proxy statement as a Non-Life Sciences subsidiary), any direct or indirect wholly owned subsidiary of Entegris (other than Merger Sub) or of Merger Sub will be converted into a number of shares of ATMI common
stock of the surviving company so that the percentage ownership of such subsidiary of the surviving company immediately following the effective time of the merger will equal the ownership percentage of such subsidiary in ATMI immediately prior to
the effective time of the merger. Shares of ATMI common stock held by a stockholder who has not voted in favor of the merger and is entitled to demand and has properly demanded his appraisal rights will not be converted into the right to receive the
merger consideration. Such stockholder will instead be entitled to the appraisal rights provided under the DGCL as described under
Appraisal Rights.
Each issued and outstanding share of capital stock of Merger Sub will be converted into and become one validly issued, fully paid and
nonassessable share of ATMI common stock, par value $0.01, of the surviving company.
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Treatment of ATMI Stock Options, Restricted Stock Awards and Restricted Stock Unit Awards, ESPP and ATMI
Stock Plans
ATMI Stock Options
Immediately prior to the effective time of the merger, each option to acquire shares of ATMI common stock that is then outstanding and that has
an exercise price less than the merger consideration, whether or not then vested or exercisable, will be cancelled and terminated in exchange for the right to receive a cash amount (less applicable withholding taxes, if any) equal to (i) the
number of shares of ATMI common stock subject to such option, multiplied by (ii) the excess of (1) the merger consideration over (2) the exercise price per share of such option, payable through payroll promptly following the closing
date of the merger (but in any event no later than the later of ten business days following the closing date of the merger and the first regular payroll date following the closing date of the merger). With respect to any option that is outstanding
immediately prior to the effective time of the merger that is not eligible for such cash payment, ATMI will cause the cancellation of such ATMI stock option without any payment or consideration therefor.
Company Restricted Stock Awards
Immediately prior to the effective time of the merger, each Company Restricted Stock Award that is then outstanding will be cancelled and
terminated, and each holder of a such an award will have the right to receive from the surviving company, in respect of such award, an amount in cash (less applicable withholding taxes, if any) equal to (i) the number of shares of ATMI common
stock subject to such award, multiplied by (ii) the merger consideration, payable through payroll promptly following the closing date of the merger (but in any event no later than the later of ten business days following the closing date of the
merger and the first regular payroll date following the closing date of the merger).
Company Restricted Stock Unit Awards
Immediately prior to the effective time of the merger, each Company Restricted Stock Unit Award that is then outstanding will be cancelled and
terminated, and each holder of such an award will have the right to receive from the surviving company, in respect of such award, an amount in cash (less applicable withholding taxes, if any) equal to (i) the number of shares of ATMI common
stock subject to such award (determined in accordance with terms of the applicable award based on the actual performance achieved as if the closing date of the merger represented the end date of the performance period), multiplied by (ii) the
merger consideration, payable through payroll promptly following the closing date of the merger (but in any event no later than the later of ten business days following the closing date of the merger and the first regular payroll date following the
closing date of the merger).
Employee Stock Purchase Plan
As soon as practicable following the date of the merger agreement, ATMI will take all actions necessary (i) to suspend the ESPP effective
immediately such that no additional offering periods shall be commenced between the date of the merger agreement and the effective time of the merger, (ii) to cancel each outstanding right to purchase shares of ATMI common stock in accordance
with the ESPP and (iii) to refund all sums collected from participants during the offering period (as defined in the ESPP) then in progress.
ATMI
Stock Plans
Prior to the effective time of the merger, ATMI will take all actions (including obtaining any necessary determinations
and/or resolutions of the ATMI board of directors or a committee thereof, which Entegris will have a reasonable opportunity to review and comment upon prior to their presentation to the ATMI board of directors or such committee) that may be
necessary (under the ATMI stock plans and/or related award agreements and the ESPP) to terminate the ATMI, Inc. 1995 Stock Plan, the ATMI, Inc. 1997 Stock Plan, the
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ATMI, Inc. 1998 Stock Plan, the ATMI, Inc. 2000 Stock Plan, the ATMI, Inc. 2003 Stock Plan, and the ATMI, Inc. 2010 Stock Plan (referred to in this proxy statement as the ATMI stock plans) and
the ESPP as of the effective time of the merger. As of the effective time of the merger, the ATMI stock plans and the ESPP shall be terminated and shall cease to exist without any liability to ATMI, Entegris, the surviving company or any of their
respective subsidiaries (other than the obligation to pay the amounts otherwise set forth in the merger agreement).
ATMI Director Deferred
Compensation Plan Stock Credits
Following the effective time of the merger, each participant in the Director Deferred Compensation
Plans will have the right to receive from the surviving company an amount in cash (less applicable withholding taxes, if any) equal to the product of (i) the merger consideration, multiplied by (ii) the number of Stock Credits (as defined
in the applicable Director Deferred Compensation Plan) then credited to such participants stock account (as defined in the applicable Director Deferred Compensation Plan), payable in accordance with the terms of the applicable Director
Deferred Compensation Plan.
Withholding
ATMI, Entegris, the surviving company, the paying agent or other applicable withholding agent will be entitled to deduct and withhold from the
consideration otherwise payable pursuant to the merger agreement such amounts as are required to be deducted and withheld with respect to the making of any such payment under applicable tax law. Amounts withheld and timely paid to the appropriate
governmental entity will be treated for purposes of the merger agreement as having been paid to the person in respect of which such deduction or withholding was made.
Unexchanged Shares
No cash payment with
respect to the merger consideration will be paid to the holder of any unsurrendered certificate (or shares of ATMI common stock held in book entry form) until the surrender of such certificate (or shares of ATMI common stock held in book entry
form).
Conditions to the Completion of the Merger
The obligations of Entegris, Merger Sub and ATMI to effect the merger are subject to the satisfaction or waiver of the following conditions:
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the merger agreement must have been adopted by holders of more than 50% of the outstanding shares of ATMI common stock entitled to vote thereon;
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the waiting period (and any extension thereof) applicable to the merger under the HSR Act must have expired or early termination thereof must have been granted and all other required antitrust approvals have been
received; and
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no applicable law and no judgment, whether preliminary, temporary or permanent, or other legal restraint or prohibition, and no binding order or determination by any governmental entity, may be in effect that prevents,
makes illegal, restrains, enjoins or otherwise prohibits the consummation of the merger.
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In addition, Entegriss and Merger Subs
obligations to effect the merger are subject to the following additional conditions:
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the representations and warranties of ATMI relating to qualification, organization and subsidiaries; authority, execution and delivery, and enforceability of the merger agreement; certain capital structure
representations; brokers fees and expenses; opinion of financial advisor; and takeover statutes must be true and correct in all material respects as of the closing date of the merger;
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the representations and warranties of ATMI relating to certain other capital structure representations must be true and correct in all respects, except for certain
de minimis
inaccuracies, as of the closing date
of the merger;
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the representations and warranties of ATMI relating to the absence of certain changes or events and the Life Sciences transaction must be true and correct in all respects as of the closing date of the merger;
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all other representations and warranties of ATMI contained in the merger agreement must be true and correct (ignoring for such purposes any reference to materiality or material adverse effect contained in such
representations and warranties), as of the closing date of the merger, except where the failure to be true and correct has not had and would not reasonably be expected to have a material adverse effect with respect to ATMI;
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ATMI must have performed in all material respects all obligations required to be performed by it under the merger agreement at or prior to the closing date of the merger;
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the closing of the Life Sciences transaction will have occurred; and
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ATMI must have delivered to Entegris an officers certificate certifying that the preceding conditions have been satisfied.
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In addition, ATMIs obligations to effect the merger are subject to the following additional conditions:
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the representations and warranties of Entegris and Merger Sub relating to qualification, organization and subsidiaries; authority, execution and delivery, and enforceability of the merger agreement; and brokers
fees and expenses must be true and correct in all material respects as of the closing date of the merger;
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all other representations and warranties of Entegris and Merger Sub contained in the merger agreement must be true and correct (ignoring for such purposes any reference to materiality or material adverse effect
contained in such representations and warranties), as of the closing date of the merger, except where the failure to be true and correct has not had and would not reasonably be expected to have a material adverse effect with respect to Entegris;
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Entegris and Merger Sub must have performed in all material respects all obligations required to be performed by them under the merger agreement at or prior to the closing of the merger;
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Entegris must have delivered to ATMI an officers certificate certifying that the preceding conditions have been satisfied; and
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all conditions to the Life Sciences transaction have been satisfied or waived.
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The closing of the Life
Sciences transaction occurred on February 20, 2014, and as such, the closing conditions related to the Life Sciences transaction have been satisfied.
For purposes of the merger agreement, material adverse effect means, with respect to ATMI, any effect, change, event, circumstance
or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the business, results of operations, assets, liabilities or condition (financial or otherwise) of ATMI and
the Non-Life Sciences subsidiaries, taken as a whole or (b) the ability of ATMI to consummate the merger or the other transactions contemplated in the merger agreement (including the sale of the Life Sciences business pursuant to the Life
Sciences SAPA); provided, however, that none of the following, and no effect, change, event, circumstance or occurrence arising out of, or resulting from, the following, will constitute or be taken into account, individually or in the aggregate, in
determining whether an ATMI material adverse effect has occurred or may occur: (A) changes generally affecting the economy, credit or financial or capital markets, in the United States or elsewhere in the world, including changes in interest or
exchange rates; (B) changes generally affecting the industries in which ATMI and its subsidiaries operate; (C) changes or prospective changes in applicable law or GAAP or in accounting standards, any changes or
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prospective changes in the interpretation or enforcement of any of the foregoing or any changes in general legal, regulatory or political conditions, in each case occurring after the date hereof;
(D) changes solely attributable to the announcement or pendency of the merger agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or governmental
entities, or any litigation arising from allegations of breach of fiduciary duty or violation of applicable law relating to the merger agreement or the transactions contemplated thereby to the extent addressed in the merger agreement; (E) acts
of war (whether or not declared), sabotage or terrorism, or any escalation or worsening of any such acts of war (whether or not declared), sabotage or terrorism; (F) volcanoes, tsunamis, pandemics, earthquakes, floods, storms, hurricanes,
tornados or other natural disasters; (G) any action taken by ATMI or its subsidiaries that is specifically required by the merger agreement or with the prior written consent or at the direction of Entegris in accordance with the merger
agreement, or the failure to take any action by ATMI or its subsidiaries if that action is prohibited by the merger agreement; (H) changes resulting or arising from the identity of, or any facts or circumstances relating to the Entegris or any
of its affiliates; (I) changes in the price or trading volume of ATMI common stock; or (J) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, budgets or internal or published financial or
operating predictions of revenue, earnings, cash flow or cash position (it being understood that the exceptions in clauses (I) and (J) shall not prevent or otherwise affect a determination that the underlying cause of any such change or
failure referred to therein (to the extent not otherwise falling within any of the exceptions provided by clauses (A) through (H) hereof) is, may be, contributed to or may contribute to, an ATMI material adverse effect; provided further,
however, that any effect, change, event or occurrence referred to in clauses (A), (B), (C), (E) or (F) above may be taken into account in determining whether or not there has been or may be an ATMI material adverse effect to the extent
such effect, change, event, circumstance or occurrence has a material disproportionate adverse effect on ATMI and the Non-Life Sciences subsidiaries, taken as a whole, as compared to other participants in the industries in which ATMI and its
subsidiaries operate. The determination of an ATMI material adverse effect shall in all events not take into account all effects, changes, events, circumstances or occurrences with respect to the Life Sciences business or any Life Sciences assets or
liabilities to be transferred or assumed pursuant to the Life Sciences SAPA except to the extent, and only to the extent, that ATMI or any Non-Life Sciences subsidiary retains any liability or obligation, whether direct, indirect, contingent or
otherwise, in respect thereof.
For purposes of the merger agreement, material adverse effect means, with respect to Entegris,
any event, change, circumstance or occurrence that, individually or in the aggregate, would prevent or materially delay or adversely impact the ability of Entegris or Merger Sub to consummate the merger.
ATMI Stockholders Meeting
ATMI has
agreed to call a meeting of its stockholders for the purpose of adopting the merger agreement, as soon as reasonably practicable after the SEC confirms that it has no further comments on this proxy statement. Unless the ATMI board of directors has
effected an adverse recommendation change (as described in
Non-Solicitation of Alternative Proposals
below) and otherwise subject to its fiduciary obligations, ATMI must use its reasonable best efforts, including engaging a
proxy solicitation firm reasonably acceptable to Entegris to assist with proxy solicitations, to obtain adoption of the merger agreement by ATMIs stockholders. ATMI may not adjourn, recess or postpone the special meeting except (i) to the
extent necessary to ensure that any supplement or amendment to this proxy statement required by applicable law is provided to the stockholders of ATMI within a reasonable amount of time in advance of the ATMI stockholders meeting or (ii) if, as
of the time for which the ATMI stockholders meeting is originally scheduled (as set forth in this proxy statement), there are insufficient shares of ATMI common stock represented (either in person or by proxy) to constitute a quorum necessary to
conduct the business of the ATMI stockholders meeting or to solicit additional proxies and votes in favor of adoption of the merger agreement if sufficient votes to constitute stockholder approval has not been obtained.
Unless the merger agreement is terminated in accordance with its terms, ATMIs obligations to hold the ATMI stockholders meeting will not
be affected by the commencement, public proposal, public disclosure or communication to ATMI of any acquisition proposal or by the making of any adverse recommendation change by the ATMI board of directors (each as described below under
Non-Solicitation of Alternative Proposals
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Non-Solicitation of Alternative Proposals
The merger agreement contains detailed provisions prohibiting ATMI from seeking an alternative transaction to the merger. Under these no
solicitation provisions, ATMI has agreed that, from the date of the merger agreement until the earlier of the effective time of the merger or the termination of the merger agreement in accordance with its terms, ATMI shall not and shall cause
its subsidiaries not to, and shall use its reasonable best efforts to cause its and its subsidiaries respective directors, officers, employees, accountants, consultants, legal counsel, financial advisors and agents and other representatives
not to, directly or indirectly:
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solicit, seek, initiate or knowingly facilitate or knowingly encourage (including by furnishing any non-public information) any inquiries regarding or the making of any submission or announcement of a proposal or offer
that constitutes or would reasonably be expected to lead to an acquisition proposal (as described below);
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engage in, continue or otherwise participate in any discussions or negotiations regarding or furnish to any other person any non-public information in connection with or for the purpose of encouraging or facilitating
any acquisition proposal or any inquiry or proposal that could reasonably be expected to lead to an acquisition proposal;
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approve, endorse, recommend, submit to stockholders or declare advisable any acquisition proposal;
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enter into any letter of intent, term sheet, memorandum of understanding, acquisition agreement, merger agreement, option agreement or similar agreement (other than certain acceptable confidentiality agreements)
relating to any acquisition proposal or modify, amend or waive any provision in any contract contemplating or otherwise relating to an acquisition proposal; or
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release or terminate or permit the release of any person from, or termination of, or waive or modify or permit the waiver or modification of any provision of, or fail to enforce or cause not to be enforced, any
confidentiality, standstill or similar agreement to which ATMI or any of its subsidiaries is a party except to the extent that the failure to so release, terminate, waive, modify or fail to enforce would be inconsistent with the fiduciary duties of
the ATMI board of directors under applicable law.
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The merger agreement requires ATMI to, and to cause its subsidiaries and
its and their directors and officers, and use its reasonable best efforts to cause its and their respective representatives (other than its and their directors and officers) to, immediately cease and terminate all discussions and negotiations with
any person that may have been ongoing with respect to any acquisition proposal as of the date of the merger agreement. ATMI also agreed to request the prompt (but in no event later than 48 hours following the date of the merger agreement) return or
destruction of all confidential information previously furnished to any person that has executed a confidentiality agreement with ATMI with respect to consideration of a possible acquisition proposal at any time after January 1, 2013 (other
than agreements that have expired by their terms).
The merger agreement also provides that if, at any time prior to the adoption of the
merger agreement by ATMIs stockholders, ATMI or any of its representatives receives a bona fide written acquisition proposal which did not result from a breach of the non-solicitation provisions of the merger agreement, ATMI and its
representatives are permitted to contact the person or group of persons who made the acquisition proposal to clarify terms for the sole purpose of ATMIs board of directors informing itself about such acquisition proposal. In the event that
ATMIs board of directors determines in good faith, after consultation with its financial advisor and outside legal counsel, that such bona fide written acquisition proposal constitutes or would reasonably be expected to lead to a
superior proposal (as described below) and that failure to take such action would be inconsistent with the directors fiduciary duties under applicable law, then ATMI is also permitted to:
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furnish, pursuant to an acceptable confidentiality agreement, information (including non-public information) with respect to ATMI and its subsidiaries to the person or group of persons who has made such acquisition
proposal, provided that ATMI promptly (and in any event within 24 hours) provides or makes available to Entegris all information concerning ATMI or its subsidiaries that is provided or made available to such person which was not previously provided
to Entegris or its representatives; and
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engage in or otherwise participate in discussions or negotiations with the person or group of persons making such acquisition proposal.
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ATMI has also agreed in the merger agreement that it will promptly (and in no event later than 24 hours after receipt) notify Entegris orally
and in writing after receipt by ATMI or any of its representatives of any acquisition proposal or request for non-public information relating to ATMI or any of its subsidiaries. Such prompt notice will include the identity of the person making the
acquisition proposal or other request and the material terms and conditions thereof, and ATMI will further promptly (and in no event later than 24 hours after receipt) provide copies to Entegris of any written proposals, indications of interest,
and/or draft agreements relating to such acquisition proposal. In addition, ATMI has agreed to keep Entegris informed on a prompt basis as to the status of any such acquisition proposal (including changes to any material terms thereof or any
material developments with respect thereto) including by promptly (and in no event later than 24 hours after receipt) providing to Entegris copies of any additional or revised written proposals, indications of interest and/or draft agreements
relating to such acquisition proposal.
For purposes of the merger agreement, the term acquisition proposal means any proposal
or offer from any person or group of persons (other than Entegris or Merger Sub) providing for:
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any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of 20% or more (based on the fair market value, as determined in good faith by the ATMI board of directors (or
any committee thereof)) of assets (including capital stock of the ATMIs subsidiaries) or of the consolidated revenues or net income of ATMI and its subsidiaries, taken as a whole determined after giving effect to the completion of the
transactions contemplated by the Life Sciences SAPA, or shares or other equity securities of ATMI which together with any other shares or other equity securities of ATMI beneficially owned by such person or group, would equal 20% or more of
aggregate voting power of ATMI;
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any tender offer or exchange offer that, if consummated, would result in any person or group owning, directly or indirectly, 20% or more of the aggregate voting power of ATMI;
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any merger, consolidation, business combination, binding share exchange or similar transaction involving ATMI pursuant to which any person or group (or the shareholders of any person) would own, directly or indirectly,
20% or more of the aggregate voting power of ATMI or of the surviving entity in a merger or the resulting direct or indirect parent of ATMI or such surviving entity; or
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any recapitalization transaction involving ATMI, other than, in each case, the transactions contemplated by the merger agreement or any offer or proposal solely and exclusively with respect to the assets of ATMIs
Life Sciences business that were transferred and the liabilities of ATMIs Life Sciences business that were assumed, in each case, pursuant to the Life Sciences SAPA, or any portion thereof.
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For purposes of the merger agreement, superior proposal means any unsolicited bona fide written acquisition proposal (with all
references to 20% in the definition of acquisition proposal being deemed to be references to 50%) which the ATMI board of directors (or any committee thereof) determines in good faith (after consultation with its financial
advisor and outside legal counsel and after taking into account all financial, legal, regulatory, timing and other aspects of such acquisition proposal and of the merger agreement (including any changes to the terms of the merger agreement proposed
by Entegris, any fees to be paid by ATMI pursuant to the terms of the merger agreement and to the likelihood of consummating such acquisition proposal without undue delay in accordance with its terms):
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is reasonably likely to be consummated in accordance with its terms; and
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if consummated, would be more favorable from a financial point of view to the holders of ATMI common stock than the merger.
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Change of Recommendation
The merger agreement provides that the ATMI board of directors will not effect an adverse recommendation change except in the limited
circumstances described below. For purposes of the merger agreement, an adverse recommendation change would occur if the ATMI board of directors were to do any of the following:
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change, withhold, withdraw, qualify or modify, in a manner adverse to Entegris (or publicly propose or resolve to change, withhold, withdraw, qualify or modify), the ATMI board of directors recommendation that the
ATMIs stockholders adopt the merger agreement (referred to in this proxy statement as the ATMI recommendation);
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fail to include the ATMI recommendation in this proxy statement;
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approve or recommend, or publicly propose to approve or recommend to the stockholders of ATMI, an acquisition proposal;
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fail to publicly reaffirm the ATMI recommendation within three business days after Entegris so requests in writing if there has been any public disclosure by a third party related to an actual acquisition proposal by
such third party; provided that ATMI will be obligated to make such reaffirmation only once in response to each such actual acquisition proposal made by such third party; and provided, further, that if the ATMI stockholders meeting is scheduled to
take place less than three business days after such request, ATMI will reaffirm the ATMI recommendation prior to such meeting;
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if a tender offer or exchange offer for shares of capital stock of ATMI that constitutes an acquisition proposal is commenced, fail to recommend against acceptance of such tender offer or exchange offer by the
stockholders of ATMI, provided that a customary stop, look and listen communication by the ATMI board of directors pursuant to Rule 14d-9(f) of the Exchange Act shall not be prohibited within ten business days after commencement of such
tender offer or exchange offer; or
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authorize, adopt, or approve or propose to authorize, adopt, or approve an acquisition proposal, or cause or permit ATMI or any of its subsidiaries to enter into any acquisition proposal.
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At any time prior to the ATMI stockholders meeting, the ATMI board of directors may (i) effect an adverse recommendation change in
response to an intervening event (as described below), if, and only if, the ATMI board of directors determines in good faith (after consultation with outside legal counsel) that failure to take such action would be inconsistent with the
directors fiduciary duties under applicable law and (ii) if ATMI receives an acquisition proposal that the ATMI board of directors determines in good faith constitutes a superior proposal after consultation with its financial
advisors and outside legal counsel authorize, adopt or approve such superior proposal and cause or permit ATMI to enter into an alternative acquisition agreement with respect to such superior proposal, provided ATMI terminates the merger
agreement pursuant to the terms thereof concurrently with entering into such alternative acquisition agreement and pays the applicable termination fee. In each case of (i) and (ii) of the foregoing sentence, ATMI may only take such actions
if:
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ATMI has provided prior written notice to Entegris of its or ATMI board of directors intention to take such action at least three business days in advance of taking such action, which notice will specify
(A) in the case of a superior proposal, the material terms of the superior proposal and will include a copy of the relevant proposed transaction agreements with, and the identity of, the person making the acquisition proposal, or (B) in
cases not involving a superior proposal, the material circumstance giving rise to the adverse recommendation change;
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after providing such notice and prior to taking any such action, ATMI will have, and will have caused its representatives to, negotiate with Entegris
in good faith (to the extent Entegris desires to negotiate) during such three business day period to make such adjustments in the terms and conditions of the merger agreement as would permit ATMI or ATMIs board of directors not to take such
action; provided, that any material change to the terms of such superior proposal or to the facts and circumstances relating to such intervening event will require a new notice including the details required by the notice described above and ATMI
will be required to comply again with the requirements
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described above with respect to each such material change; provided, further that with respect to each subsequent written notice related to a material change, references to the three
business day period above will be deemed to be references to a two business day period; and
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ATMIs board of directors will have considered in good faith any changes to the merger agreement or other arrangements that may be offered in writing by Entegris by 5:00 PM Eastern Standard Time on the third
business day of such three business day period (or the last day of any applicable extension pursuant to the above clause) and will have determined in good faith (A) with respect to the actions described above in relation to an adverse
recommendation change in response to an intervening event, after consultation with outside legal counsel, that it would continue to be inconsistent with the directors fiduciary duties under applicable law not to effect the adverse
recommendation change and (B) with respect to the actions described above in relation to ATMIs receipt of an acquisition proposal, after consultation with outside counsel and its financial advisors, that the acquisition proposal received
by ATMI would continue to constitute a superior proposal, in each case, even if such changes offered in writing by Entegris were given effect.
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ATMI is required to comply with the obligations described in the foregoing three bullet points with respect to each superior proposal it
receives or any intervening event the ATMI board of directors identifies.
For purposes of the merger agreement, an intervening
event means a material event, development or change in circumstances with respect to ATMI occurring or coming to the attention of ATMIs board of directors after the date of the merger agreement and prior to obtaining ATMI stockholder
approval for the merger, and which was not known, and could not reasonably be expected to have known or foreseen, by the ATMI board of directors as of or prior to the date of the merger agreement; provided, however, that in no event will
(A) the receipt, existence or terms of an acquisition proposal, (B) any events, developments or change in circumstances of Entegris, (C) the status of the merger under the HSR Act or of any of the required antitrust approvals,
(D) any announcements, approvals, issuances, or regulations of any governmental entity, constitute an intervening event, or (E) any matter relating to the foregoing or consequence of the foregoing, constitute an intervening event.
The merger agreement permits ATMI or its board of directors to comply with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to an
acquisition proposal or to make other disclosures to the stockholders of ATMI if the ATMI board of directors (after consultation with outside legal counsel) concludes that the failure to do so would be inconsistent with its fiduciary duties under
applicable law, provided, that any adverse recommendation change may only be made in accordance with the merger agreement.
Financing Covenant
Entegris and Merger Sub have agreed to use their reasonable best efforts to take (or cause to be taken) all actions and use their reasonable
best efforts to do, or cause to be done, all things necessary or advisable to arrange debt financing and to consummate the debt financing at the effective time of the merger, including using reasonable best efforts to:
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maintain in effect the debt commitment letter from Goldman Sachs to Entegris;
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satisfy on a timely basis all of the conditions precedent set forth in the debt commitment letter;
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negotiate, execute and deliver definitive documentation for the debt financing that reflects the terms contained in the debt commitment letter (subject to any market flex provisions included in the fee
letter, dated as of February 4, 2014, by and between Entegris and Goldman Sachs); and
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in the event the closing conditions set forth in the merger agreement and conditions precedent set forth in the debt commitment letter have been satisfied or, upon funding would be satisfied, cause the financing
providers to fund the debt financing in accordance with the terms of the debt commitment letter.
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Entegris and Merger Sub may amend, restate, replace, supplement or otherwise modify, or waive any
of its rights under, the debt commitment letter, or obtain alternative financing, provided that Entegris shall not, without the prior written consent of ATMI, (A) reduce the aggregate amount of the debt financing, (B) impose new or
additional conditions precedent or contingencies to the debt financing as set forth in the debt commitment letter or otherwise amend, modify, or expand any conditions precedent to the funding of the debt financing (unless such conditions precedent
or contingencies to the alternative financing would not reasonably be expected to (i) prevent or delay the closing of the merger, (ii) make the funding of the debt financing less likely to occur, or (iii) adversely affect the ability
of Entegris or Merger Sub to consummate the transactions contemplated by the merger agreement or to enforce its respective rights against the other parties to the debt commitment letter or the definitive agreements with respect thereto),
(C) except in certain circumstances, release or consent to the termination of the obligations of the lenders under the debt commitment letter (except for certain assignments and replacements contemplated by the debt commitment letter),
(D) otherwise prevent or delay the closing of the merger or (E) reasonably be expected to adversely impact the ability of Entegris or Merger Sub to enforce its rights against the other parties to the debt commitment letter or the
definitive agreements with respect thereto. Notwithstanding the foregoing, Entegris and Merger Sub may amend, restate, replace, supplement or otherwise modify the debt commitment letter (or any alternative financing) on one or more occasions to add
additional arrangers, bookrunners, agents and lenders in accordance with the terms of the debt commitment letter.
If any portion of the
debt financing becomes unavailable on the terms and conditions contemplated in the debt commitment letter (subject to any market flex provisions included in the fee letter, dated as of February 4, 2014, by and between Entegris and
Goldman Sachs, and other than on account of any alternative financing), other than due to the failure of a condition to the consummation of the debt financing resulting from a material breach of any representation, warranty or covenant of ATMI set
forth in the merger agreement or the failure of any of the closing conditions set forth in the merger agreement, each of Entegris and Merger Sub will use its reasonable best efforts to obtain any such portion from alternative debt or equity sources
as promptly as practicable following the occurrence of such event in an amount that will still enable Entegris and Merger Sub to pay the aggregate merger consideration and any other amounts required to be paid by Entegris or Merger Sub in connection
with the consummation of the transactions contemplated by the merger agreement and pay all related fees and expenses of Entegris and Merger Sub.
Entegris will keep ATMI informed on a reasonably current basis in reasonable detail of the status of its efforts to arrange the debt financing
and shall provide to ATMI copies of any amendment, restatement, replacement, supplement or modification of the debt commitment letter and all executed final definitive documents relating to the debt financing (excluding any provisions related solely
to fees and economic terms (other than covenants) agreed to by the parties thereto and any provisions in any fee or engagement letters as customarily excluded by the financing sources). Without limiting the generality of the foregoing, Entegris will
give ATMI prompt written notice which shall include reasonably detailed information (and will, as soon as reasonably practicable, after ATMI delivers Entegris or Merger Sub a written request, provide any additional information reasonably requested
by ATMI) regarding the following circumstances:
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if Entegris becomes aware of any material breach or default by any party to the debt commitment letter or any definitive document related to the debt financing;
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of the receipt by it of any written notice or other written communication from any person with respect to any (A) actual or potential breach, default, termination or repudiation by any party to the debt commitment
letter or any definitive document related to the debt financing or any provisions of the debt commitment letter (subject to any market flex provisions included in the fee letter, dated as of February 4, 2014, by and between Entegris
and Goldman Sachs) or any definitive document related to the debt financing, or (B) material dispute or disagreement between or among any parties to the debt commitment letter or any definitive document related to the debt financing with
respect to the obligation to fund any portion of the debt financing or the amount of the debt financing to be funded at closing;
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if for any reason Entegris or Merger Sub believes in good faith that it will not be able to obtain all or any portion of the debt financing on the
terms and conditions, in the manner or from the sources
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contemplated by the debt commitment letter (subject to any market flex provisions included in the fee letter, dated as of February 4, 2014, by and between Entegris and Goldman
Sachs, and other than on account of any alternative financing) or the definitive documents related to the debt financing; and
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upon receiving the debt financing.
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Until the earlier of the closing date of the merger and
the termination of the merger agreement, ATMI will provide, and will cause its subsidiaries to provide and will use its reasonable best efforts to cause its representatives to provide, Entegris and Merger Sub such cooperation as may be reasonably
requested by Entegris in connection with any debt financing, including:
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participating, upon reasonable advance notice, in a reasonable number of meetings, presentations, road shows, rating agency presentations and drafting sessions, and participating in reasonable and customary due
diligence, in each case with or by the financing sources (or prospective lenders or investors in any debt financing);
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furnishing Entegris and the financing sources, as promptly as reasonably practicable, with the required information;
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assisting Entegris and the financing sources in the preparation of (I) customary offering documents, syndication documents and materials (including assistance in creating usual and customary public
versions of the foregoing), including confidential information memoranda, private placement memoranda, offering memoranda, lender and investor presentations, rating agency presentations, business and financial projections and similar documents
and materials, in connection with any debt financing, including providing the MD&A and business description to be contained therein, and providing customary authorization and representation letters with respect thereto, and (II)
materials for any such offering documents, including business projections and financial statements (including assisting Entegris in preparing pro forma financial statements; provided that neither ATMI nor any of its subsidiaries or representatives
shall be responsible in any manner for any pro forma adjustments relating to proposed debt and equity capitalization that is required to be made to the historical information for such pro forma financial information) and identifying any portion
thereof as containing material, non-public information;
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reasonably cooperating with the marketing and syndication efforts of Entegris, Merger Sub and any financing sources for any portion of any debt financing, including cooperation in connection with the obtainment of
ratings;
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using its reasonable best efforts to cause its current or former independent accountants to provide assistance and cooperation in any debt financing, including (I) participating in a reasonable number of drafting
sessions and accounting due diligence sessions, (II) providing any necessary written consents to use their audit reports relating to ATMI and to be named as an Expert in any document related to any debt financing and (III) providing any
customary comfort letters (including customary negative assurance comfort, including change period comfort);
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executing and delivering as of (but not before) the closing date of the merger definitive financing documents, including credit agreements, indentures, intercreditor agreements, pledge and security documents, and
certificates (including borrowing base certificates), or other documents, to the extent reasonably requested by Entegris and otherwise facilitating the granting or perfection of collateral to secure any debt financing, including delivery of
certificates representing equity interests constituting collateral, intellectual property filings with respect to intellectual property constituting collateral and mortgages with respect to owned real property constituting collateral and obtaining
releases of existing liens, provided that the effectiveness of any definitive documentation executed by ATMI or any of its subsidiaries shall be subject to the consummation of the merger;
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furnishing Entegris and any financing sources promptly, and in any event at least five days prior to the closing date of the merger, with all
documentation and other information required by any governmental entity with respect to any debt financing under applicable know your customer and anti-money
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laundering rules and regulations, including the PATRIOT Act, in each case, to the extent that such documentation and information has been reasonably requested in writing (which may be by e-mail)
at least 10 days prior to the closing date of the merger;
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assisting in the delivery of inventory appraisals and field audits and obtaining surveys and title insurance reasonably requested by Entegris; and
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taking all corporate actions, subject to and only effective upon the occurrence of the effective time of the merger, reasonably requested by Entegris to permit the consummation of any debt financing and to permit the
proceeds thereof to be made available to the surviving company immediately after the effective time of the merger;
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Notwithstanding the foregoing, neither ATMI nor any of its subsidiaries will be required to take any action (A) that would cause it to
bear any out-of-pocket cost or expense (not otherwise subject to reimbursement) or to pay any commitment or other similar fee or make any other similar payment or incur any other monetary liability or provide or agree to provide any indemnity in
connection with the debt financing or any of the foregoing, in each case, to the extent effective prior to the effective time of the merger, (B) under the financing provision of the merger agreement that would interfere unreasonably with the
business or operations of ATMI or its subsidiaries and (C) that will conflict with or violate their respective organizational documents or result in the contravention of any contract to which ATMI or any of its subsidiaries is a party that is
material to the business of ATMI and its subsidiaries taken as a whole prior to the effective time of the merger (provided, however, that the foregoing clauses (B) and (C) shall not apply to or affect ATMIs obligations under the
merger agreement with respect to the delivery of the required information and certain specified actions which are usual and customary with respect to syndicated credit facilities or high yield offerings).
Entegris may make reasonable use of ATMIs and its subsidiaries logos in connection with the marketing of any debt financing;
provided that such logos are used solely in a manner that is not intended to, and is not reasonably likely to harm or disparage ATMI or any of its subsidiaries or the reputation or goodwill of ATMI, its subsidiaries and its or their respective
marks, products, services, offerings or intellectual property rights.
Regulatory Matters
ATMI and Entegris have generally agreed to cooperate with each other and use their respective reasonable best efforts to take all actions
reasonably necessary, proper or advisable to cause the conditions to the closing of the merger to be satisfied as promptly as reasonably practicable and to consummate the merger in the most expeditious manner reasonably practicable, including
obtaining all approvals and consents from any governmental entity or third party necessary, proper or advisable to consummate the merger.
Each of ATMI and Entegris has agreed to make an appropriate filing of a notification and report form under the HSR Act and make any filing
required under any other applicable antitrust and competition laws with respect to the transactions contemplated by the merger agreement as promptly as reasonably practicable and advisable following the date of the merger agreement (which, in the
case of the notification and report form pursuant to the HSR Act, will be no later than ten business days from the date of the merger agreement and, in the case of all other filings under any other applicable antitrust and competition laws, will be
as promptly as reasonably practicable following the date of the merger agreement, or, in each case, as otherwise agreed to by ATMI and Entegris), supply as promptly as practicable and advisable any additional information and documentary material
that may be requested pursuant to the HSR Act or any other applicable antitrust and competition laws and to use its reasonable best efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act and any other
applicable antitrust and competition laws and to obtain all consents under any applicable antitrust and competition laws that may be required by the FTC, DOJ or any other governmental entity with competent jurisdiction, so as to enable ATMI,
Entegris and Merger Sub to consummate the merger and other transactions contemplated by the merger agreement. In furtherance of the foregoing, each of ATMI and Entegris has agreed to defend any legal action challenging the merger agreement or the
transactions contemplated thereby,
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to execute settlements, undertaking, consent decrees, stipulations or other agreements with any governmental entity or with any other person, to terminate existing relationships, contractual
rights or obligations of ATMI or Entegris and to effectuate other changes or restructurings of ATMI or Entegris, in each case, to the extent necessary to obtain all consents that may be required under the HSR Act or any other applicable antitrust
and competition laws or to resolve any objections asserted by any governmental entity with competent jurisdiction. Nothing in the merger agreement (W) requires Entegris or Merger Sub to sell, divest, convey or hold separate or otherwise take
any other action (and ATMI will not undertake any such action without Entegriss prior written consent) that limits Entegriss and its subsidiaries freedom of action with respect to, or their ability to retain, particular products,
assets or businesses of Entegris or the ATMI or their respective subsidiaries, or agree to take any such action, other than, solely in respect of products, assets or businesses of ATMI (and not, for the avoidance of doubt, any products, assets, or
businesses of Entegris), only to the extent that such action would not reasonably be expected to impact in any material respect the expected benefits to Entegris and its subsidiaries, taken as a whole, of the transactions contemplated by the merger
agreement, (X) requires Entegris, ATMI or their respective subsidiaries to take or agree to take any action with respect to its business or operations unless the effectiveness of such agreement or action is conditioned upon the closing,
(Y) requires any of the parties to the merger agreement to compensate any third party, commence or participate in litigation or offer or grant any accommodation (financial or otherwise) to any third party to obtain any such consent or approval
or (Z) permits ATMI or any of its subsidiaries to take or agree to any action or other matter pursuant to the terms of the merger agreement referred to in clauses above without Entegriss prior written consent, not to be unreasonably
withheld. Other than with respect to the payment of all filing fees in connection therewith, which will be borne solely by Entegris, the parties will each bear their own costs and expenses of preparing such notifications and filings, including the
fees of their respective legal counsel.
Termination
ATMI and Entegris may terminate the merger agreement at any time before the effective time of the merger under the following circumstances:
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by mutual written consent of ATMI and Entegris;
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if the merger has not been completed on or before August 4, 2014 (referred to in this proxy statement as the end date); however, if as of such date all of the conditions to closing have been satisfied (other than
those conditions that by their terms are to be satisfied at the closing and (i) the conditions relating to the receipt of required antitrust clearances and the absence of legal restraints in respect of any antitrust or competition laws or
(ii) the conditions relating to the completion of the marketing period), then, in the case of (i) above, the termination date will be extended to November 4, 2014, or such earlier date as may be agreed in writing by Entegris and ATMI,
and, in the case of (ii) above, the termination date will be extended to the earlier of November 4, 2014 and the third business day following the final day of the marketing period, and in each case such date will become the end date for
purposes of the merger agreement (however, the right to terminate the merger agreement under this provision will not be available to any party whose failure to fulfill any obligation under the merger agreement materially contributed to the failure
of the merger to be consummated on or before such date);
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if any governmental entity of competent authority issues a final, non-appealable order or enacts a law that prohibits, restrains or makes illegal the consummation of the merger;
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if ATMI stockholder approval will not have been obtained at a duly convened ATMI stockholders meeting or any adjournment or postponement thereof; provided that the right to terminate the merger agreement for the
foregoing reason will not be available to ATMI where the failure to obtain the approval of the stockholders of ATMI will have been caused by the action or failure to act of ATMI and such action or failure to act constitutes a breach by ATMI of the
merger agreement; or
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if the Life Sciences SAPA is terminated in accordance with its terms without a closing occurring thereunder; provided that the right to terminate the
merger agreement pursuant to the foregoing reason
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will not be available to ATMI where the failure of the closing under the Life Sciences SAPA will have been caused by the action or failure to act of ATMI or any of its subsidiaries and such
action or failure to act constitutes a breach by ATMI or any of its subsidiaries under the Life Sciences SAPA.
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In addition, ATMI may
terminate the merger agreement under the following circumstances:
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at any time before the effective time of the merger, if Entegris or Merger Sub has breached any representation, warranty, covenant or agreement contained in the merger agreement, or if any representation or warranty of
Entegris or Merger Sub has become untrue, in each case, such that the conditions to closing relating to the accuracy of Entegriss and Merger Subs representations and warranties or the performance by Entegris and Merger Sub of their
obligations under the merger agreement could not be satisfied as of the closing date of the merger; however, ATMI may not terminate the merger agreement under this provision unless any such breach or failure to be true has not been cured within 30
days after written notice by ATMI to Entegris, except that no cure period is required for a breach that cannot be cured by the end date and ATMI may not terminate the merger agreement if ATMI is then in breach of the merger agreement in any material
respect;
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prior to adoption of the merger agreement by ATMIs stockholders, in order to enter into a definitive written agreement providing for a superior proposal in compliance with the non-solicitation provisions of the
merger agreement; or
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if the closing conditions set forth in the merger agreement have been satisfied (other than those conditions that by their nature can only be satisfied at the closing and which were, at the time of termination,
reasonably expected to be satisfied at the closing) and Entegris and Merger Sub have failed to consummate the closing on the date the closing is required to have occurred pursuant to the terms of the merger agreement.
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In addition, Entegris may terminate the merger agreement under the following circumstances:
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at any time before the effective time of the merger, if ATMI has breached any representation, warranty, covenant or agreement contained in the merger agreement, or if any representation or warranty of ATMI has become
untrue, in each case, such that the conditions to closing relating to the accuracy of ATMIs representations and warranties or the performance by ATMI of its obligations under the merger agreement could not be satisfied as of the closing date
of the merger; however, Entegris may not terminate the merger agreement under this provision unless any such breach or failure to be true has not been cured within 30 days after written notice by Entegris to ATMI, except that no cure period is
required for a breach that cannot be cured by the end date and Entegris may not terminate the merger agreement if Entegris is then in breach of the merger agreement in any material respect; or
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prior to adoption of the merger agreement by ATMIs stockholders, if an adverse recommendation change has occurred.
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In some cases, termination of the merger agreement may require ATMI to pay a termination fee to Entegris or Entegris to pay a reverse
termination fee to ATMI, in each case, as described below under
Termination Fees and Reimbursement of Expenses.
Except as set forth above, all fees and expenses incurred in connection with the merger and the other transactions contemplated by the merger
agreement will be paid by the party incurring such fees or expenses, regardless of whether or not the merger is consummated.
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Termination Fees and Reimbursement of Expenses
ATMI Termination Fee
The merger
agreement requires ATMI to pay a termination fee of $30 million to Entegris in each of the following circumstances:
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if the merger agreement is terminated by ATMI in order to enter into a definitive written agreement providing for a superior proposal;
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if the merger agreement is terminated by Entegris in the event that an adverse recommendation change has occurred; or
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if (1) an acquisition proposal has been made to ATMI and not publicly withdrawn prior to the ATMI stockholders meeting or will have been made directly to the stockholders of ATMI generally and not publicly
withdrawn prior to the ATMI stockholders meeting, (2) thereafter the merger agreement is terminated (w) by either ATMI or Entegris because the merger has not been consummated on or prior to the end date, (x) by either ATMI or Entegris
because ATMIs stockholders have not adopted the merger agreement at a duly convened meeting of the stockholders of ATMI, (y) by either ATMI or Entegris because the Life Sciences SAPA is terminated in accordance with its terms, or
(z) by Entegris because ATMI has breached any representation, warranty, covenant or agreement contained in the merger agreement, and (3) within twelve months of termination either ATMI or any of its subsidiaries enters into an alternative
acquisition agreement with respect to, or will have approved or recommended to ATMIs stockholders or otherwise not opposed, an acquisition proposal that is subsequently consummated. For purposes of this paragraph, references to the
20% in the definition of the term acquisition proposal will be deemed to be references to 50%.
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If ATMI fails to pay the termination fee when due, ATMI will also be required to pay any costs and expenses (including attorneys fees)
incurred by Entegris in connection with any legal action taken in order to obtain such payment, together with interest on the amount due.
Entegris
Termination Fee
Entegris will pay ATMI a fee of $100 million if ATMI terminates the merger agreement where all closing conditions
set forth in the merger agreement have been satisfied and Entegris and Merger Sub fail to consummate the closing on the date the closing is required to have occurred pursuant to the terms of the merger agreement.
Conduct of Business Pending the Merger
Under the merger agreement, ATMI has undertaken certain covenants that place restrictions on it and its respective subsidiaries from the date
of the merger agreement until the earlier of the termination of the merger agreement in accordance with its terms and the effective time of the merger, unless Entegris gives its prior written consent (which cannot be unreasonably withheld,
conditioned or delayed), as set forth on ATMIs disclosure letter, as otherwise required or expressly contemplated by the merger agreement, as required by applicable law, or for any actions required to be taken pursuant to the terms of the Life
Sciences SAPA or otherwise solely related to the Life Sciences assets or Life Sciences liabilities. In general, ATMI has agreed to, and has agreed to cause its subsidiaries to (1) conduct its business in the ordinary course of business
consistent with past practices and in compliance in all material respects with all applicable laws and the requirements of all material contracts, (2) use reasonable best efforts to preserve intact its business organization and its business
relationships (including with its suppliers, customers and governmental entities) and keep available the services of its current officers and employees, (3) use its reasonable best efforts to keep in effect all material insurance policies in
coverage amounts substantially similar to those in effect on the date of the merger agreement and (4) use its reasonable best efforts to promptly notify Entegris of (i) any notice or other communication from any person alleging that the
consent of such person is or may be required in connection with any of the transactions contemplated by the merger agreement, and (ii) any action commenced or threatened in writing, relating to or involving or otherwise affecting ATMI or any of
its subsidiaries that relates to the consummation of the transactions contemplated by the merger agreement.
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In addition, without limiting the requirements described above, subject to certain exceptions set forth in the
merger agreement and the disclosure letters delivered by ATMI in connection with the merger agreement, except for any actions required to be taken pursuant to the terms of the Life Sciences SAPA or otherwise solely related to Life Sciences assets or
Life Sciences liabilities, or unless the other party consents in writing (which consent cannot be unreasonably withheld, conditioned or delayed), ATMI has agreed to certain restrictions limiting its and its subsidiaries ability to, among other
things:
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amend its certificate of incorporation or by-laws;
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issue any shares of its capital stock;
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redeem, purchase or otherwise acquire any of its outstanding shares of capital stock;
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split, combine, subdivide or reclassify any shares of its capital stock;
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establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock;
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sell, lease or otherwise dispose of material properties or assets;
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make any change in its methods or principles of accounting;
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assign, transfer, lease, cancel, fail to renew or fail to extend material permits;
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commence any action, or settle or compromise any claim or action in excess of specified amounts;
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abandon, encumber, convey title, exclusively license or grant any material exclusive right to any material intellectual property owned by or exclusively licensed to ATMI;
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incur any indebtedness or make loans or capital contributions in other persons (subject to certain exceptions);
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acquire, sell, lease, license, mortgage, sell and leaseback or otherwise subject to any lien any assets valued in excess of certain limitations;
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make or authorize capital expenditures in excess of amounts budgeted in ATMIs current plan by more than 10%;
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amend, waive any provision of, fail to enforce (in each case, in any material respect), assign, terminate or enter into any material contract;
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forgive any loans to any employees, officers or directors of ATMI;
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acquire any equity interests in any person;
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adopt a plan of complete or partial liquidation, dissolution, merger or conversion;
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make or change any material tax election, settle or compromise any material tax liability, make any material change in any method of tax accounting, file any material amendment to an income or other material tax return
or waive or extend any statute of limitations in respect of any material taxes;
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fail to promptly notify Entegris of any material audit, examination, investigation, written claim or other proceeding by any governmental entity relating to taxes;
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repatriate any cash or assets that would result in a tax liability (subject to certain exceptions);
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amend, modify or waive any provisions of the Life Sciences SAPA or the Transition Services Agreement (as defined in the Life Sciences SAPA) that would adversely impact Entegris, ATMI or the surviving company;
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enter into any license or sublease with the buyer under the Life Sciences SAPA of the real property leased by ATMI Packaging, Inc., a Minnesota company and a subsidiary of ATMI, on terms that are inconsistent with the
terms specified in the transition services agreement executed in connection with the Life Sciences SAPA in any material respect and that would not reasonably be expected to materially impair the use of the real property by ATMI and its subsidiaries;
and
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agree, commit or propose to take any of the foregoing actions.
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Litigation Related to the Merger
The merger agreement requires ATMI to promptly notify Entegris and keep Entegris reasonably informed with respect to the status of any
litigation involving or affecting the merger agreement, the merger or any other transaction contemplated by the merger agreement that is brought or threatened against ATMI and/or the members of the board of directors of ATMI. ATMI will give Entegris
the right to review and comment on all material filings or responses to be made by ATMI in connection with any such litigation, and the right to consult on the settlement with respect to such litigation, and ATMI will in good faith take such
comments into account, and, no such settlement will be agreed to without Entegriss prior written consent (which will not be unreasonably withheld, delayed or conditioned). The merger agreement also allows Entegris to participate in the defense
(at the sole expense of Entegris and subject to a joint defense agreement) of any such litigation.
Public Announcements
Subject to certain exceptions, Entegris and ATMI have agreed to consult with each other before issuing, and give each other the opportunity to
review and comment upon, any press release or other public statements with respect to the merger, and each of Entegris and ATMI has agreed not to issue any press release or make any such public statement without the other partys consultation.
Additional Covenants
The merger
agreement also contains additional agreements relating to, among other things, access to information notification of certain matters and existing litigation.
Governance of the Surviving Company
The
merger agreement provides that the directors and officers of Merger Sub immediately prior to the effective time of the merger will become, at the effective time of the merger, the directors and officers of the surviving company until the earlier of
their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be. At the effective time of the merger, the ATMI charter and the ATMI by-laws will be amended in the merger to be the
same as the certificate of incorporation and bylaws of Merger Sub as in effect immediately prior to the effective time of the merger, except that in each case the name of the surviving company will remain Entegris-ATMI, Inc. and, as so
amended, will be the certificate of incorporation and by-laws of the surviving company until thereafter amended.
Indemnification; Directors and
Officers Insurance
The merger agreement provides that all rights to indemnification, advancement of expenses and exculpation
from liabilities for acts or omissions occurring at or prior to the effective time of the merger existing in favor of the current or former directors, officers or employees of ATMI and its subsidiaries as provided in their respective certificates of
incorporation or by-laws (or comparable organizational documents) and any indemnification or other similar agreements of ATMI or any of its subsidiaries, in each case as in effect on the date of the merger agreement, will continue in full force and
effect in accordance with their terms.
The merger agreement also provides that, from and after the effective time of the merger, to the
fullest extent permitted by applicable law (including to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of the merger agreement that increase the extent to which a corporation may
indemnify its officers and directors) the surviving company will indemnify and hold harmless each individual who was as of the date of the merger agreement, or who becomes prior to the effective time of the merger, a director or officer of ATMI or
any of its subsidiaries or who was as of the date of the merger agreement, or who thereafter commences prior to the effective time of the merger, serving at the request of ATMI or any of its subsidiaries as a director or officer of another entity,
against all losses incurred in connection
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with any actual or threatened legal action arising out of or pertaining to the fact that such person is or was an officer or director of ATMI or any of its subsidiaries or is or was serving at
the request of ATMI or any of its subsidiaries as a director or officer of another entity, whether asserted or claimed prior to, at or after the effective time of the merger. The merger agreement provides that, in the event of any such legal action,
each such person will be entitled to advancement of expenses incurred in the defense of any such legal action from the surviving company within ten business days of receipt by the surviving company from such person of a request therefor; provided
that any person to whom expenses are advanced provides an undertaking, if and only to the extent required by the DGCL or the surviving companys certificate of incorporation or by-laws, to repay such advances if it is ultimately determined by
final adjudication that such person is not entitled to indemnification. The merger agreement also provides that the surviving company will cooperate in the defense of any such matter.
The merger agreement also provides that, for six years following the effective time of the merger, the surviving company will, and Entegris
will cause the surviving company to, maintain in effect the provisions in its certificate of incorporation and by-laws to the extent they provide for indemnification, advancement and reimbursement of expenses and exculpation of each indemnified
party described above, with respect to facts or circumstances occurring at or prior to the effective time of the merger, on the same basis as set forth in the ATMI charter and ATMI by-laws in effect on the date of the merger agreement, to the
fullest extent permitted from time to time under applicable law, which provisions may not be amended except as required by applicable law or except to make changes permitted by applicable law that would enlarge the scope of the indemnified
parties indemnification rights thereunder.
For a period of six years after the effective time of the merger, the surviving company
must either cause to be maintained in effect the current policies of directors and officers liability insurance and fiduciary liability insurance maintained by ATMI or its subsidiaries or provide substitute policies for ATMI and its
current and former directors and officers who are currently covered by the directors and officers and fiduciary liability insurance coverage currently maintained by ATMI in either case, of not less than the existing coverage and having
other terms not less favorable to the insured persons than the directors and officers liability insurance and fiduciary liability insurance coverage currently maintained by ATMI with respect to claims arising from facts or events that
occurred on or before the effective time of the merger, except that the surviving company will not be required to pay for any one policy year of such insurance policies, more than 300% of the aggregate annual premium most recently paid by ATMI prior
to the date of the merger agreement, and if the surviving company is unable to obtain such insurance it must obtain as much comparable insurance as possible for the years within such six-year period for an annual premium equal to such maximum
amount, in respect of each policy year within such period. In lieu of such insurance, prior to the closing date of the merger ATMI may, at its option (following reasonable consultation with Entegris), purchase a tail directors and
officers liability insurance policy and fiduciary liability insurance policy for ATMI and its current and former directors and officers who are currently covered by the directors and officers and fiduciary liability insurance
coverage maintained by ATMI as of the date of the merger agreement, with such tail policy providing coverage in an amount not less than the existing coverage and having other terms not less favorable to the insured persons than the directors
and officers liability insurance and fiduciary liability insurance coverage maintained by ATMI as of the date of the merger agreement with respect to claims arising from facts or events that occurred on or before the effective time of the
merger. However, in no event may the cost of any such tail policy in respect of any one policy year exceed 300% of the aggregate annual premium most recently paid by ATMI prior to the date of the merger agreement in respect of its directors
and officers liability insurance and fiduciary liability insurance policies. In the event ATMI purchases such tail policy coverage, the obligations of the surviving company set forth in this paragraph shall cease.
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Employee Matters
The merger agreement provides that, until December 31, 2014, Entegris will, or will cause its subsidiaries to, provide each employee of
ATMI or any of its subsidiaries who remains in the employment of Entegris or any of its subsidiaries following the effective time of the merger (such employee is referred to in this proxy statement as a continuing employee) with:
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at least the same base salary or base wages and annual cash bonus opportunities as were provided to such individual immediately prior to the closing of the merger; and
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employee benefits (other than equity compensation) that are no less favorable in the aggregate than those provided under the applicable ATMI benefit plans in which such continuing employee participated immediately prior
to the closing of the merger.
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In addition, from January 1, 2015 through at least the one-year anniversary of the
closing of the merger, Entegris will, or will cause its subsidiaries to, provide each continuing employee with base salary or base wages, annual cash bonus opportunities and employee benefits (other than equity compensation) that are no less
favorable than the base salary or base wages and annual cash bonus opportunities and that are no less favorable in the aggregate than the employee benefits (other than equity compensation) provided to similarly situated employees of Entegris or its
subsidiaries.
With respect to any continuing employee who is laid off, made redundant or whose employment is otherwise terminated without
cause or for good reason (if applicable) (in each case, as defined in the severance applicable plan or program) during the one-year period following the closing of the merger, Entegris will, or will cause its subsidiaries to honor the terms of
ATMIs severance plans and programs as disclosed on ATMIs disclosure letter delivered to Entegris. Notwithstanding the foregoing, Entegris will honor certain plans and agreements set forth on ATMIs disclosure letter delivered to
Entegris in accordance with their terms.
Entegris will, or will cause its subsidiaries to, credit continuing employees for service earned
on and prior to the effective time of the merger with ATMI and its affiliates, or any of their respective predecessors, to the extent such service was credited by ATMI or its subsidiaries under the corresponding ATMI benefit plan prior to the
closing of the merger, in addition to service earned with Entegris and its subsidiaries on or after the closing date of the merger, (i) for purposes of eligibility, vesting or the calculation of vacation, sick days, severance, layoff and/or
similar benefits (but not for purposes of defined benefit pension benefit accruals) under any retirement or other employee benefit plan, program or arrangement of Entegris or any of its subsidiaries for the benefit of the continuing employees on or
after the closing date of the merger and (ii) for such additional purposes as may be required by applicable law; provided that nothing herein will result in a duplication of benefits with respect to continuing employees.
Entegris will, and will cause each of its subsidiaries to, use its reasonable best efforts to waive limitations on benefits relating to any
pre-existing conditions of continuing employees and their eligible spouses and dependents (to the extent such limitations were waived under a corresponding ATMI benefit plan prior to the closing of the merger). Entegris will, and will cause its
subsidiaries to, use reasonable best efforts to recognize for purposes of annual deductible and out-of-pocket limits under their health plans applicable to continuing employees, deductible and out-of-pocket expenses paid by continuing employees and
their respective spouses and dependents ATMIs or any of its affiliates health plans in the calendar year in which the applicable effective time of the merger occurs.
If requested by Entegris at least 10 days prior to the effective time of the merger, ATMI will terminate any and all ATMI benefit plans
intended to qualify under Section 401(a) of the Code that include a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code, effective not later than the day immediately preceding the closing date of
the merger. In the event that Entegris requests that such 401(k) plan(s) be terminated, ATMI will provide Entegris with evidence reasonably satisfactory to Entegris that such 401(k) plan(s) have been terminated pursuant to the methodology set forth
in the applicable plan not later than the day immediately preceding the closing date of the merger.
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Entegris will have no obligation to continue to employ or retain the services of any continuing
employee for any period of time following the closing of the merger.
Representations and Warranties
The merger agreement contains representations and warranties by ATMI, Entegris and Merger Sub that are subject, in some cases, to specified
exceptions and qualifications contained in the merger agreement or in the disclosure letters delivered by Entegris and ATMI in connection with the merger agreement.
These representations and warranties relate to, among other things:
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corporate organization and similar corporate matters;
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approval and authorization of the merger agreement;
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required consents and approvals of governmental entities in connection with the transactions contemplated by the merger agreement and non-contravention;
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brokers fees and expenses.
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Additional representations and warranties made only by ATMI relate
to, among other things, capital structure, SEC documents, absence of certain changes or events, no undisclosed liabilities, compliance with laws, intellectual property, environmental matters, material contracts, labor matters, benefits matters and
ERISA compliance, real and personal properties, taxes, proxy statement, opinion of its financial advisor, takeover statutes, insurance, certain business practices, sanctioned persons and the PATRIOT Act, conflict minerals and the Life Sciences
transaction.
Additional representations and warranties made only by Entegris and Merger Sub relate to, among other things, ownership of
Merger Sub, financing for the merger and ownership of ATMI common stock.
The representations and warranties in the merger agreement of
each of ATMI, Entegris and Merger Sub will not survive the consummation of the merger or the termination of the merger agreement pursuant to its terms.
Waiver
At any time prior to the
effective time of the merger, the parties may (i) extend the time for the performance of any obligations of the other parties, (ii) waive any inaccuracies in the representations and warranties contained in the merger agreement or any
document delivered pursuant to the merger agreement, (iii) waive compliance with any of the covenants or conditions contained in the merger agreement, or (iv) subject to certain exceptions relating to the rights of the debt financing
sources, waive the satisfaction of any condition contained in the merger agreement. No extension or waiver by ATMI will require the approval of its stockholders unless such approval is required by applicable law. Any agreement on the part of a party
to any such extension or waiver will be valid only if set forth in a written instrument signed on behalf of such party.
Amendment
The merger agreement may be amended by the parties at any time before or after the merger is approved by ATMIs stockholders; provided,
however, that (i) after the merger has been approved by ATMIs stockholders, there shall be made no amendment that requires further approval by ATMIs stockholders without the further approval of ATMIs stockholders, and
(ii) except as provided above, no amendment of the merger agreement may be submitted to be approved by ATMIs stockholders unless required by applicable law. The merger agreement may not be amended except in a writing signed on behalf of
each of the parties and certain sections are prohibited from being amended in a manner that would be adverse to Entegriss financing sources without the prior written consent of Entegriss financing sources.
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Governing Law; Jurisdiction; Waiver of Jury Trial
The parties have agreed that the merger agreement and or causes of action arising out of or relating to the merger agreement, any of the
transactions contemplated by the merger agreement or the actions of Entegris, Merger Sub or ATMI in the negotiation, execution, or performance thereof will be governed by Delaware law. Each party irrevocably submitted to the exclusive jurisdiction
of any federal or state court located within the State of Delaware over any dispute arising out of or relating to the merger agreement or any of the transactions contemplated thereby and each party irrevocably agreed that all claims in respect of
such dispute or any suit, action proceeding related thereto may be heard and determined in such courts. The parties irrevocably waived, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the
laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties agreed that a judgment in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Each party has further irrevocably and unconditionally waived any right such party may have to a trial by jury with respect to any litigation directly or indirectly arising out of or relating to the
merger agreement or the transactions contemplated by the merger agreement, including any such action involving any financing sources or any financing related party. Notwithstanding the foregoing, none of the parties may bring an action, claim or
third party claim of any kind against any of the financing sources of Entegris or any of the financing related parties in any forum other than the federal court of the United States of America or, if that court does not have any subject matter
jurisdiction, any state court located in, the Borough of Manhattan in the City of New York.
Specific Performance
The merger agreement provides that the parties will be entitled to an injunction or injunctions to prevent breaches or threatened breaches of
the merger agreement without the requirement of posting a bond or other security. Without limiting ATMIs right to seek specific performance of Entegriss or Merger Subs obligations under the merger agreement, ATMI will be entitled
to specific enforcement of Entegriss and Merger Subs obligations to consummate the merger only in the event that each of the following conditions has been satisfied: (i) all of the closing conditions set forth in the merger
agreement have been satisfied or waived (other than those conditions that by their nature are to be satisfied or waived at the closing of the merger and that are reasonably expected to be satisfied at the closing of the merger), (ii) Entegris
and Merger Sub fail to complete the closing of the merger by the date the closing is required to have occurred pursuant to the merger agreement, (iii) the debt financing (or any alternative financing), each as described in the merger agreement,
is, or will be, available in accordance with its terms at closing, and (iv) ATMI has confirmed in a written notice delivered to Entegris that if specific enforcement is granted and the debt financing (or any alternative financing) is funded,
then ATMI is ready, willing and able to, and will, consummate the closing of the merger. In addition, it is agreed that ATMI will be entitled to enforce specifically Entegriss and Merger Subs obligation under the merger agreement to draw
upon the debt financing only if (i) all of the closing conditions set forth in the merger agreement and all of the conditions precedent set forth in the debt commitment letter have been satisfied or waived (other than those conditions that by
their nature are to be satisfied or waived at the closing of the merger but that are reasonably expected to be satisfied at the closing of the merger), (ii) ATMI has confirmed in a written notice delivered to Entegris that if specific
enforcement is granted and the debt financing (or any alternative financing) is funded, then, assuming performance by Entegris and Merger Sub of their respective obligations under the merger agreement, then ATMI is ready, willing and able to, and
will, consummate the closing of the merger, and (iii) the full proceeds to be provided to Entegris by the debt financing (or any alternative financing) in accordance with its terms will be available to Entegris to consummate the merger. ATMI is
not permitted or entitled to receive both a grant of specific enforcement and payment of the Entegris termination fee. Each of ATMI and Entegris expressly disclaimed that it is owed any duties not expressly set forth in the merger agreement, and
waived and released any and all tort claims and causes of action that may be based upon, arise out of or relate to the merger agreement, or the negotiation, execution or performance of the merger agreement.
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No Recourse to Financing Sources
Each of ATMI and Entegris acknowledged and agreed that all claims, obligations, liabilities or causes of action, whether at law, in equity, in
contract, in tort or otherwise, that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to the merger agreement, the negotiation, execution or performance of the merger agreement (including
any representation or warranty made in, in connection with, or as an inducement to enter into, the merger agreement) or the transactions contemplated by the merger agreement may be made only against (and are those solely of) the entities that are
expressly identified as parties to the merger agreement. ATMI agreed, on behalf of itself and its affiliates and each of its and its affiliates respective former, current or future general or limited partners, stockholders, managers,
members, controlling persons, agents or representatives, that the financing sources and each of their respective financing related parties will be subject to no liability or claims to the ATMI parties in connection with the debt financing or in any
way relating to the merger agreement or any of the transactions contemplated thereby, whether at law, in equity, in contract, in tort or otherwise.
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APPRAISAL RIGHTS
Under the DGCL, you have the right to dissent from the merger and to receive payment in cash for the fair value of ATMI common stock as
determined by the Delaware Court of Chancery, together with a fair rate of interest, if any, as determined by the court, in lieu of the consideration you would otherwise be entitled to pursuant to the merger agreement. These rights are known as
appraisal rights. Stockholders electing to exercise appraisal rights must comply with the provisions of Section 262 of the DGCL in order to perfect their rights. Strict compliance with the statutory procedures will be required.
The following is intended as a brief summary of the material provisions of the Delaware statutory procedures required to be followed by a
stockholder in order to dissent from the merger and perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to Section 262 of the DGCL, the full
text of which appears in Annex C to this proxy statement. Failure to precisely follow any of the statutory procedures set forth in Section 262 of the DGCL may result in a termination or waiver of your appraisal rights.
Section 262 requires that stockholders be notified that appraisal rights will be available not less than 20 days before the
stockholders meeting to vote on the merger. A copy of Section 262 must be included with such notice. This proxy statement constitutes our notice to our stockholders of the availability of appraisal rights in connection with the merger in
compliance with the requirements of Section 262. If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 contained in Annex C to this proxy statement because failure to timely and
properly comply with the requirements of Section 262 will result in the loss of your appraisal rights under the DGCL.
If you elect
to demand appraisal of your shares, you must satisfy each of the following conditions:
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You must deliver to us a written demand for appraisal of your shares before the vote with respect to the merger is taken. This written demand for appraisal must be in addition to and separate from any proxy or vote
abstaining from or voting against the adoption of the merger agreement. Voting against or failing to vote for the adoption of the merger agreement by itself does not constitute a demand for appraisal within the meaning of Section 262.
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You must not vote in favor of the adoption of the merger agreement. A vote in favor of the adoption of the merger agreement will constitute a waiver of your appraisal rights in respect of the shares so voted and will
nullify any previously filed written demands for appraisal. A proxy which does not contain voting instructions will, unless revoked, be voted in favor of the merger agreement.
Therefore, a stockholder who votes by proxy and who wishes to perfect
appraisal rights must vote against the merger agreement or abstain from voting on the merger agreement.
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If you fail to
comply with either of these conditions and the merger is completed, you will be entitled to receive the cash payment for your shares of ATMI common stock as provided for in the merger agreement, but you will have no appraisal rights with respect to
your shares of ATMI common stock.
All demands for appraisal should be addressed to ATMI, Inc., 7 Commerce Drive, Danbury, Connecticut
06810, Attention: Secretary, and must be delivered before the vote on the merger agreement is taken at the special meeting, and should be executed by, or on behalf of, the record holder of the shares of ATMI common stock. The demand must reasonably
inform us of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares.
To be
effective, a demand for appraisal by a holder of ATMI common stock must be made by, or in the name of, such registered stockholder, fully and correctly, as the stockholders name appears on his or her stock certificate(s).
Beneficial owners
who do not also hold the shares of record may not directly make appraisal demands to us. The beneficial holder must, in such cases, have the registered owner, such as a broker, bank or other nominee, submit the required demand in respect of those
shares.
If shares are owned of record
80
in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made by or for the fiduciary; and if the shares are owned of record by more
than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a
stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a broker, who holds shares
as a nominee for others, may seek to perfect his or her right of appraisal with respect to the shares held for one or more beneficial owners, while not seeking to perfect this right for other beneficial owners. In that case, the written demand
should state the number of shares as to which appraisal is sought. Where no number of shares is expressly mentioned, the demand will be presumed to cover all shares held in the name of the record owner.
If you hold your shares of ATMI common stock in a brokerage account or in other nominee form and you wish to perfect appraisal rights, you
should consult with your broker or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.
Within ten days after the effective time of the merger, the surviving corporation must give written notice that the merger has become
effective to each stockholder who has properly filed a written demand for appraisal and who did not vote in favor of the merger agreement. At any time within 60 days after the effective time, any stockholder who has demanded an appraisal has the
right to withdraw the demand and to accept the cash payment specified by the merger agreement for his or her shares of ATMI common stock. Within 120 days after the effective date of the merger, any stockholder who has complied with Section 262
will, upon written request to the surviving corporation, be entitled to receive a written statement setting forth the aggregate number of shares not voted in favor of the merger agreement and with respect to which demands for appraisal rights have
been received and the aggregate number of holders of such shares. Such written statement will be mailed to the requesting stockholder within ten days after such written request is received by the surviving corporation or within ten days after
expiration of the period for delivery of demands for appraisal, whichever is later. Within 120 days after the effective time, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 may file a
petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made
upon the surviving corporation. We have no present obligation or intention to file such a petition or to initiate negotiations in the event there are dissenting stockholders. Accordingly, the failure of a stockholder to file such a petition within
the period specified could nullify the stockholders previously written demand for appraisal.
If a petition for appraisal is duly
filed by a stockholder and a copy of the petition is delivered to the surviving corporation, the surviving corporation will then be obligated, within 20 days after receiving service of a copy of the petition, to file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached by the
surviving corporation. After notice to dissenting stockholders who demanded appraisal of their shares, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition, and to determine those stockholders who have complied with
Section 262 and who have become entitled to the appraisal rights provided by Section 262. The Delaware Court of Chancery may require the stockholders who have demanded appraisal for their shares to submit their stock certificates to the
Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder.
After determination of the stockholders entitled to appraisal of their shares of ATMI common stock, the Delaware Court of Chancery will
appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any. When the value is determined, the Delaware Court of
Chancery will direct the payment of such value, with
81
interest thereon accrued during the pendency of the proceeding, if the Delaware Court of Chancery so determines, to the stockholders entitled to receive the same, upon surrender by such holders
of the certificates representing those shares.
In determining fair value, and, if applicable, a fair rate of interest, the Delaware Court
of Chancery is required to take into account all relevant factors. In
Weinberger v. UOP, Inc.
, the Delaware Supreme Court 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 fair price obviously requires consideration of all
relevant factors involving the value of a company.
You should be aware that the fair value of your shares as determined under
Section 262 could be more than, the same as, or less than the value that you are entitled to receive under the terms of the merger agreement. You should also be aware that investment banking opinions as to the fairness from a financial point of
view of the consideration payable in a merger are not opinions as to fair value under Section 262.
Costs of the appraisal
proceeding may be imposed upon the surviving corporation and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery as the Court deems equitable in the circumstances. Upon the application of a stockholder, the
Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys fees and the fees and expenses of experts, to be
charged pro-rata against the value of all shares entitled to appraisal. Any stockholder who had demanded appraisal rights will not, after the effective time of the merger, be entitled to vote shares subject to that demand for any purpose or to
receive payments of dividends or any other distribution with respect to those shares, other than with respect to payment as of a record date prior to the effective time; however, if no petition for appraisal is filed within 120 days after the
effective time of the merger, or if the stockholder delivers a written withdrawal of his or her demand for appraisal and an acceptance of the terms of the merger within 60 days after the effective time of the merger, then the right of that
stockholder to appraisal will cease and that stockholder will be entitled to receive the cash payment for shares of his, her or its ATMI common stock pursuant to the merger agreement. Any withdrawal of a demand for appraisal made more than 60 days
after the effective time of the merger may only be made with the written approval of the surviving corporation and must, to be effective, be made within 120 days after the effective time.
In view of the complexity of Section 262, stockholders who may wish to dissent from the merger and pursue appraisal rights should
consult their legal advisors.
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OTHER MATTERS
At this time, we know of no other matters to be submitted to our stockholders at the special meeting or any adjournment or postponement of the
special meeting. If any other matters properly come before the special meeting or at any adjournment or postponement of the special meeting, it is the intention of the persons named in the enclosed proxy card to vote the shares they represent in
accordance with their best judgment.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file
at the SECs public reference room located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available to the public at
the SECs website at http://www.sec.gov. You also may obtain free copies of the documents we file with the SEC by going to the Investor Relations section of our website at
www.atmi.com
. The information provided on our website is not part
of this proxy statement, and therefore is not incorporated by reference.
Any person, including any beneficial owner, to whom this proxy
statement is delivered may request copies of proxy statements and any of the documents incorporated by reference in this document or other information concerning us, without charge, by written or telephonic request directed to Investor Relations,
ATMI, Inc., 7 Commerce Drive, Danbury, Connecticut 06810, telephone (203) 794-1100, or on our website at
www.atmi.com
or from the SEC through the SECs website at
http://www.sec.gov
. Documents incorporated by reference are
available without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference into those documents.
Entegris has supplied all information pertaining to Entegris and Merger Sub in this proxy statement and we have supplied all information
pertaining to us.
THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM
OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE YOUR SHARES AT THE SPECIAL MEETING. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference certain information into this proxy statement. This
means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is considered to be a part of this proxy statement, and later information that we
file with the SEC will update and supersede that information. We incorporate by reference the documents listed below and any documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this proxy
statement and prior to the date of the special meeting:
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ATMI, Inc. Filings:
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Periods/Report Dates:
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Annual Report on Form 10-K
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Year ended December 31, 2012
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Quarterly Reports on Form 10-Q
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Quarters ended March 31, 2013, June 30, 2013 and September 30, 2013
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Current Reports on Form 8-K
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February 21, 2014
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February 20, 2014
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February 4, 2014
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December 22, 2013
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November 1, 2013
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October 23, 2013
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July 24, 2013
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May 29, 2013
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May 22, 2013
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April 24, 2013
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April 3, 2013
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February 11, 2013
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February 6, 2013
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Notwithstanding the foregoing, information furnished under items 2.02 and 7.01 of any Current
Report on Form 8-K, including the related exhibits, is not incorporated by reference in this proxy statement.
Any person, including any
beneficial owner, to whom this proxy statement is delivered may request copies of reports, proxy statements or other information concerning us, without charge, as described in the section of this proxy statement entitled
Where You Can Find
More Information.
We have not authorized anyone to provide information that is different from what is contained in this proxy
statement and, if given, such information must not be relied upon as having been authorized by us or any other person.
THIS PROXY
STATEMENT IS DATED [
], 2014. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE OR SUCH OTHER DATE AS MAY BE SPECIFIED
HEREIN, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.
94
Annex A
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
Dated as of February 4, 2014,
by and among
ATMI,
INC.
ENTEGRIS, INC.
and
ATOMIC MERGER
CORPORATION
A-i
Table of Contents
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Page
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Article I
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THE MERGER
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7
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Section 1.01.
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The Merger
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7
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Section 1.02.
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Closing
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7
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Section 1.03.
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Effective Time
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8
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Section 1.04.
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Certificate of Incorporation and By-Laws
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8
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Section 1.05.
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Directors and Officers of Surviving Company
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8
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Article II
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EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT ENTITIES
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8
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Section 2.01.
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Effect on Capital Stock
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8
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Section 2.02.
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Exchange of Certificates
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9
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Section 2.03.
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Dissenters Rights
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11
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Section 2.04.
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Treatment of Company Stock Options, Company Restricted Stock Awards, Company
Restricted Stock Unit Awards, ESPP and Company Stock Plans
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11
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Article III
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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12
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Section 3.01.
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Qualification, Organization, Subsidiaries, etc
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13
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Section 3.02.
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Authority; Execution and Delivery; Enforceability
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13
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Section 3.03.
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Capital Structure
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14
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Section 3.04.
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Governmental Authorization; Non-contravention
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15
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Section 3.05.
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Company SEC Documents
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16
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Section 3.06.
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Absence of Certain Changes or Events
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17
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Section 3.07.
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No Undisclosed Liabilities
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17
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Section 3.08.
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Absence of Litigation
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17
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Section 3.09.
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Compliance with Applicable Laws; Permits
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17
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Section 3.10.
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Intellectual Property
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17
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Section 3.11.
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Environmental Matters
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18
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Section 3.12.
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Material Contracts
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19
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Section 3.13.
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Labor Matters
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20
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Section 3.14.
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Benefits Matters; ERISA Compliance
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21
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Section 3.15.
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Real and Personal Properties
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22
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Section 3.16.
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Taxes
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22
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Section 3.17.
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Proxy Statement
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24
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Section 3.18.
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Brokers Fees and Expenses
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24
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Section 3.19.
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Opinion of Financial Advisor
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24
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Section 3.20.
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Takeover Statutes
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24
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Section 3.21.
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Insurance
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24
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Section 3.22.
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Certain Business Practices
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25
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Section 3.23.
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Sanctioned Persons; PATRIOT Act
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25
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Section 3.24.
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Conflict Minerals
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25
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A-ii
Table of Contents
(continued)
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Page
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Section 3.25.
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Life Sciences Transaction
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25
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Section 3.26.
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No Other Representations or Warranties
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26
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Article IV
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REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
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26
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Section 4.01.
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Qualification, Organization, Subsidiaries, etc
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26
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Section 4.02.
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Authority; Execution and Delivery; Enforceability
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27
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Section 4.03.
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Governmental Authorization; Non-contravention
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27
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Section 4.04.
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Absence of Litigation
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28
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Section 4.05.
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Ownership of Merger Sub
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28
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Section 4.06.
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Financing
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28
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Section 4.07.
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No Ownership of Company Common Stock
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29
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Section 4.08.
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Brokers Fees and Expenses
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29
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Section 4.09.
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No Other Representations or Warranties
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29
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Article V
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COVENANTS
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29
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Section 5.01.
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Conduct of Business
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29
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Section 5.02.
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No Solicitation by the Company; Company Board Recommendation
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32
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Section 5.03.
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Sale of the Life Sciences Business
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36
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Article VI
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|
|
ADDITIONAL AGREEMENTS
|
|
|
36
|
|
|
|
|
|
|
|
Section 6.01.
|
|
Preparation and Mailing of the Proxy Statement
|
|
|
36
|
|
|
|
|
|
|
|
Section 6.02.
|
|
Access to Information; Confidentiality
|
|
|
37
|
|
|
|
|
|
|
|
Section 6.03.
|
|
Reasonable Best Efforts
|
|
|
38
|
|
|
|
|
|
|
|
Section 6.04.
|
|
Indemnification, Exculpation and Insurance
|
|
|
40
|
|
|
|
|
|
|
|
Section 6.05.
|
|
Section 16 Matters
|
|
|
41
|
|
|
|
|
|
|
|
Section 6.06.
|
|
Public Announcements
|
|
|
41
|
|
|
|
|
|
|
|
Section 6.07.
|
|
Employee Matters
|
|
|
42
|
|
|
|
|
|
|
|
Section 6.08.
|
|
Merger Sub; Parent Subsidiaries; Company Subsidiaries
|
|
|
43
|
|
|
|
|
|
|
|
Section 6.09.
|
|
Stock Exchange De-Listing
|
|
|
43
|
|
|
|
|
|
|
|
Section 6.10.
|
|
Stockholder Litigation
|
|
|
43
|
|
|
|
|
|
|
|
Section 6.11.
|
|
Financing
|
|
|
43
|
|
|
|
|
|
|
|
Section 6.12.
|
|
Resignation of Directors
|
|
|
46
|
|
|
|
|
|
|
|
Section 6.13.
|
|
Life Sciences Business
|
|
|
46
|
|
|
|
|
|
|
|
Section 6.14.
|
|
Third Party Consents
|
|
|
47
|
|
|
|
|
|
|
|
Section 6.15.
|
|
Cash Balances
|
|
|
47
|
|
|
|
|
|
Article VII
|
|
|
|
CONDITIONS PRECEDENT
|
|
|
47
|
|
|
|
|
|
|
|
Section 7.01.
|
|
Conditions to Each Partys Obligation to Effect the Merger
|
|
|
47
|
|
|
|
|
|
|
|
Section 7.02.
|
|
Conditions to Obligation of Parent and Merger Sub
|
|
|
47
|
|
|
|
|
|
|
|
Section 7.03.
|
|
Conditions to Obligations of the Company
|
|
|
48
|
|
A-iii
Table of Contents
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
Article VIII
|
|
|
|
TERMINATION, AMENDMENT AND WAIVER
|
|
|
49
|
|
|
|
|
|
|
|
Section 8.01.
|
|
Termination
|
|
|
49
|
|
|
|
|
|
|
|
Section 8.02.
|
|
Effect of Termination
|
|
|
50
|
|
|
|
|
|
|
|
Section 8.03.
|
|
Fees and Expenses
|
|
|
50
|
|
|
|
|
|
|
|
Section 8.04.
|
|
Amendment
|
|
|
51
|
|
|
|
|
|
|
|
Section 8.05.
|
|
Extension; Waiver
|
|
|
52
|
|
|
|
|
|
|
|
Section 8.06.
|
|
Procedure for Termination, Amendment, Extension or Waiver
|
|
|
52
|
|
|
|
|
|
Article IX
|
|
|
|
GENERAL PROVISIONS
|
|
|
52
|
|
|
|
|
|
|
|
Section 9.01.
|
|
Survival
|
|
|
52
|
|
|
|
|
|
|
|
Section 9.02.
|
|
Notices
|
|
|
52
|
|
|
|
|
|
|
|
Section 9.03.
|
|
Definitions
|
|
|
53
|
|
|
|
|
|
|
|
Section 9.04.
|
|
Rules of Construction
|
|
|
60
|
|
|
|
|
|
|
|
Section 9.05.
|
|
Severability
|
|
|
61
|
|
|
|
|
|
|
|
Section 9.06.
|
|
Counterparts
|
|
|
61
|
|
|
|
|
|
|
|
Section 9.07.
|
|
Entire Agreement; No Third-Party Beneficiaries
|
|
|
61
|
|
|
|
|
|
|
|
Section 9.08.
|
|
Governing Law; Jurisdiction; Waiver of Jury Trial
|
|
|
61
|
|
|
|
|
|
|
|
Section 9.09.
|
|
Assignment
|
|
|
62
|
|
|
|
|
|
|
|
Section 9.10.
|
|
Specific Enforcement
|
|
|
62
|
|
|
|
|
|
|
|
Section 9.11.
|
|
No Recourse to Financing Sources
|
|
|
63
|
|
A-iv
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
INDEX OF DEFINED TERMS
|
|
|
|
|
|
Acceptable Confidentiality Agreement
|
|
|
62
|
|
|
End Date
|
|
|
56
|
|
Acquisition Proposal
|
|
|
38
|
|
|
Environmental Laws
|
|
|
65
|
|
Action
|
|
|
62
|
|
|
ERISA
|
|
|
65
|
|
Adverse Recommendation Change
|
|
|
37
|
|
|
ERISA Affiliate
|
|
|
20
|
|
Affiliate
|
|
|
62
|
|
|
ESPP
|
|
|
65
|
|
Agreement
|
|
|
1
|
|
|
Exchange Act
|
|
|
65
|
|
Alternative Acquisition Agreement
|
|
|
35
|
|
|
Fee Letter
|
|
|
29
|
|
Alternative Financing
|
|
|
49
|
|
|
Financing Failure
|
|
|
65
|
|
Applicable Law(s)
|
|
|
62
|
|
|
Financing Related Parties
|
|
|
60
|
|
Business
|
|
|
62
|
|
|
Financing Sources
|
|
|
65
|
|
Business Day
|
|
|
62
|
|
|
FTC
|
|
|
65
|
|
Capitalization Date
|
|
|
10
|
|
|
GAAP
|
|
|
65
|
|
Cash-Out Option
|
|
|
7
|
|
|
Governmental Entity
|
|
|
65
|
|
Certificate
|
|
|
3
|
|
|
Hazardous Substance
|
|
|
65
|
|
Certificate of Merger
|
|
|
2
|
|
|
HSR Act
|
|
|
65
|
|
Closing
|
|
|
1
|
|
|
Inbound IP Contracts
|
|
|
17
|
|
Closing Date
|
|
|
2
|
|
|
Indebtedness
|
|
|
65
|
|
Code
|
|
|
62
|
|
|
Insurance Policy
|
|
|
24
|
|
Collective Bargaining Agreement
|
|
|
62
|
|
|
Intellectual Property
|
|
|
66
|
|
Commitment Party
|
|
|
29
|
|
|
Intervening Event
|
|
|
39
|
|
Company
|
|
|
1
|
|
|
IRS
|
|
|
19
|
|
Company Benefit Plans
|
|
|
19
|
|
|
Knowledge
|
|
|
66
|
|
Company Board
|
|
|
1
|
|
|
Leased Real Property
|
|
|
21
|
|
Company By-laws
|
|
|
9
|
|
|
Letter of Transmittal
|
|
|
4
|
|
Company Charter
|
|
|
9
|
|
|
Lien
|
|
|
66
|
|
Company Common Stock
|
|
|
3
|
|
|
Life Sciences Assets
|
|
|
66
|
|
Company Disclosure Letter
|
|
|
8
|
|
|
Life Sciences Business
|
|
|
66
|
|
Company Indemnified Parties
|
|
|
45
|
|
|
Life Sciences Buyer
|
|
|
1
|
|
Company Material Adverse Effect
|
|
|
62
|
|
|
Life Sciences Liabilities
|
|
|
66
|
|
Company Parties
|
|
|
74
|
|
|
Life Sciences SAPA
|
|
|
1
|
|
Company Preferred Stock
|
|
|
10
|
|
|
Life Sciences Sellers
|
|
|
1
|
|
Company Recommendation
|
|
|
10
|
|
|
Life Sciences Subsidiaries
|
|
|
67
|
|
Company Restricted Stock Award
|
|
|
63
|
|
|
Marketing Period
|
|
|
67
|
|
Company Restricted Stock Unit Award
|
|
|
64
|
|
|
Material Contract
|
|
|
16
|
|
Company SEC Documents
|
|
|
12
|
|
|
Maximum Amount
|
|
|
46
|
|
Company Securities
|
|
|
11
|
|
|
Merger
|
|
|
1
|
|
Company Stock Option
|
|
|
64
|
|
|
Merger Consideration
|
|
|
3
|
|
Company Stock Plans
|
|
|
64
|
|
|
Merger Sub
|
|
|
1
|
|
Company Stockholder Approval
|
|
|
9
|
|
|
MN Facility
|
|
|
34
|
|
Company Stockholders Meeting
|
|
|
10
|
|
|
NASDAQ
|
|
|
68
|
|
Compliant
|
|
|
64
|
|
|
Non-Life Sciences Subsidiaries
|
|
|
68
|
|
Confidentiality Agreement
|
|
|
42
|
|
|
Offering Documents
|
|
|
51
|
|
Conflict Minerals
|
|
|
25
|
|
|
Order
|
|
|
68
|
|
Continuing Employee
|
|
|
47
|
|
|
Outbound IP Contracts
|
|
|
17
|
|
Contract
|
|
|
64
|
|
|
Owned Real Property
|
|
|
21
|
|
Debt Commitment Letter
|
|
|
29
|
|
|
Parent
|
|
|
1
|
|
Debt Financing
|
|
|
29
|
|
|
Parent Board
|
|
|
1
|
|
DGCL
|
|
|
1
|
|
|
Parent By-laws
|
|
|
27
|
|
Director Deferred Compensation Plans
|
|
|
64
|
|
|
Parent Charter
|
|
|
27
|
|
Dissenting Shares
|
|
|
6
|
|
|
Parent Disclosure Letter
|
|
|
26
|
|
DOJ
|
|
|
65
|
|
|
Parent Material Adverse Effect
|
|
|
68
|
|
Effective Time
|
|
|
2
|
|
|
Parent SEC Documents
|
|
|
26
|
|
A-v
Table of Contents
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
Parent Termination Fee
|
|
|
59
|
|
|
Required Information
|
|
|
69
|
|
PATRIOT Act
|
|
|
25
|
|
|
Restructuring Transactions
|
|
|
70
|
|
Paying Agent
|
|
|
4
|
|
|
Sanctions
|
|
|
25
|
|
Payment Fund
|
|
|
4
|
|
|
Sanctions Laws
|
|
|
25
|
|
PCAOB
|
|
|
68
|
|
|
SEC
|
|
|
70
|
|
Permits
|
|
|
68
|
|
|
Securities Act
|
|
|
70
|
|
Permitted Liens
|
|
|
68
|
|
|
Subsidiary
|
|
|
70
|
|
Person
|
|
|
69
|
|
|
Superior Proposal
|
|
|
39
|
|
Proxy Statement
|
|
|
39
|
|
|
Surviving Company
|
|
|
1
|
|
Real Property
|
|
|
21
|
|
|
Takeover Laws
|
|
|
42
|
|
Real Property Leases
|
|
|
21
|
|
|
Tax Returns
|
|
|
71
|
|
Registered IP
|
|
|
14
|
|
|
Taxes
|
|
|
70
|
|
Regulation S-X
|
|
|
69
|
|
|
Termination Fee
|
|
|
58
|
|
Regulatory Laws
|
|
|
69
|
|
|
Transition Services Agreement
|
|
|
71
|
|
Representatives
|
|
|
35
|
|
|
Treasury Regulation
|
|
|
71
|
|
Required Antitrust Approvals
|
|
|
12
|
|
|
Ultra Clean Packaging
|
|
|
71
|
|
A-vi
AGREEMENT AND PLAN OF MERGER (this
Agreement
), dated as of February 4,
2014, by and among ATMI, Inc., a Delaware corporation (the
Company
), Entegris, Inc., a Delaware corporation, (
Parent
), and Atomic Merger Corporation, a Delaware corporation and a wholly owned Subsidiary of
Parent (
Merger Sub
).
WHEREAS
, the board of directors of Parent (the
Parent Board
), the board
of directors of the Company (the
Company Board
) and the board of directors of Merger Sub have approved and declared advisable this Agreement and the Merger;
WHEREAS
, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements specified in
this Agreement in connection with the Merger and to prescribe various conditions to the Merger;
WHEREAS
, prior to the date hereof,
the Company, ATMI SARL, a company organized under the laws of Luxembourg (
ATMI SARL
), ATMI BELGIUM LLC, a Delaware limited liability company (
ATMI BELGIUM
), ATMI Packaging, Inc., a Minnesota company
(
ATMI PACKAGING
), and Advanced Technology Materials, Inc., a Delaware corporation (
ATMI Opco
and, together with the Company, ATMI SARL, ATMI BELGIUM and ATMI PACKAGING, the
Life Sciences
Sellers
) and Pall Corporation, a New York corporation (the
Life Sciences Buyer
), have entered into that certain Share and Asset Purchase Agreement, dated as of December 22, 2013 (in the form filed by the Company
with the SEC on December 23, 2013 as exhibit 2.1 to its Current Report on Form 8-K, the
Life Sciences SAPA
), pursuant to which the Life Science Sellers will sell the Life Sciences Business, consisting of the Life Sciences
Assets and the Life Sciences Liabilities specified therein, prior to the Closing; and
WHEREAS
, the consummation of the
transactions contemplated by the Life Sciences SAPA and the closing thereunder is a condition precedent to the consummation of the transactions contemplated by this Agreement.
NOW
,
THEREFORE
, in consideration of the foregoing and the representations, warranties, covenants and agreements contained in
this Agreement, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.01.
The Merger
. On the terms and subject to the conditions set forth in this Agreement, and in accordance with the General Corporation Law of the State of Delaware (the
DGCL
), on the Closing Date, Merger Sub shall be merged
with and into the Company (the
Merger
). At the Effective Time, the separate corporate existence of Merger Sub shall cease, and the Company shall continue as the surviving company in the Merger (the
Surviving
Company
).
Section 1.02.
Closing
. The closing (the
Closing
) of the Merger shall take place at the
offices of Weil, Gotshal & Manges LLP at 767 Fifth Avenue, New York, New York 10153 at 10:00 a.m., New York City time, on a date to be specified by the Company and Parent, which shall be no later than the second (2nd) Business Day
following the satisfaction or, to the extent permitted by Applicable Law, waiver by the party or parties entitled to the benefits thereof of the conditions set forth in
Article VII
(other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or, to the extent permitted by Applicable Law, waiver of those conditions), or at such other place, time and date as shall be agreed in writing between the Company and Parent;
provided
,
however
, that, notwithstanding the satisfaction or waiver of the conditions set forth in
Article VII
, Parent and Merger Sub shall not be obligated to effect the Closing prior to the third (3rd) Business Day
following the final day of the Marketing Period, unless Parent shall request an earlier date on two (2) Business Days prior written notice (but, subject in such case, to the satisfaction or waiver of the conditions
A-1
set forth in
Article VII
(other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted by Applicable
Law, waiver of those conditions)). The date on which the Closing occurs is referred to in this Agreement as the
Closing Date
.
Section 1.03.
Effective Time
. Subject to the provisions of this Agreement, at the Closing, the parties shall file with the
Secretary of State of the State of Delaware the certificate of merger relating to the Merger (the
Certificate of Merger
), executed and acknowledged in accordance with the relevant provisions of the DGCL, and at or prior to the
Closing Date, shall make all other filings required under the DGCL or by the Secretary of State of the State of Delaware in connection with the Merger. The Merger shall become effective at the time that the Certificate of Merger has been duly filed
with the Secretary of State of the State of Delaware, or at such later time as the Company and Parent shall agree and specify in the Certificate of Merger (the time the Merger becomes effective being the
Effective Time
).
Section 1.04.
Certificate of Incorporation and By-Laws
. At the Effective Time, (i) the Company Charter shall be amended in
the Merger to be the same as the certificate of incorporation of Merger Sub as in effect immediately prior to the Effective Time (except that the name of the Surviving Company shall be Entegris-ATMI, Inc.) and until thereafter further
amended in accordance with its terms and as provided by the DGCL, shall be the amended and restated certificate of incorporation of the Surviving Company, and (ii) the Company By-laws shall be amended in the Merger to be the same as the by-laws
of Merger Sub as in effect immediately prior to the Effective Time (except that the name of the Surviving Company shall be Entegris-ATMI, Inc.), and as so amended shall be the by-laws of the Surviving Company until thereafter amended in
accordance with its terms and as provided by the DGCL or in the amended and restated certificate of incorporation or by-laws of the Surviving Company.
Section 1.05.
Directors and Officers of Surviving Company
. The directors of Merger Sub immediately prior to the Effective Time
shall be the directors of the Surviving Company until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. The officers of Merger Sub immediately prior to the Effective
Time shall be the officers of the Surviving Company until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be.
ARTICLE II
EFFECT ON THE
CAPITAL STOCK OF THE CONSTITUENT ENTITIES
Section 2.01.
Effect on Capital Stock
. At the Effective Time, by virtue of the
Merger and without any action on the part of the Company, Parent, Merger Sub or the holder of any shares of common stock, par value $0.01 per share, of the Company (the
Company Common Stock
) or any shares of capital stock of
Parent or Merger Sub:
(a)
Capital Stock of Merger Sub
. Each issued and outstanding share of capital stock of Merger Sub shall be
converted into and become one (1) validly issued, fully paid and nonassessable share of common stock, par value $0.01, of the Surviving Company.
(b)
Cancellation of Treasury Stock and Parent-Owned Stock; Treatment of Stock Owned by Company Subsidiaries
.
(i) Each share of Company Common Stock that is owned by the Company as treasury stock and each share of Company Common Stock that is owned
directly by Parent, Merger Sub or any Life Sciences Subsidiary immediately prior to the Effective Time shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(ii) Each share of Company Common Stock that is owned by any direct or indirect wholly owned Non-Life Sciences Subsidiary of
the Company or any direct or indirect wholly owned Subsidiary of Parent (other than Merger Sub) or of Merger Sub shall be converted into such number of shares of common stock of the Surviving
A-2
Company such that the ownership percentage of any such Subsidiary in the Surviving Company immediately following the Effective Time shall equal the ownership percentage of such Subsidiary in the
Company immediately prior to the Effective Time.
(c)
Conversion of Company Common Stock
. Subject to
Section 2.02
and
Section 2.03
, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be canceled or converted into shares of the Surviving Company in accordance with
Section 2.01(b)
, Company Restricted Stock Awards, and Dissenting Shares) shall be cancelled and extinguished and converted into the right to receive $34.00 per share in cash (the
Merger Consideration
) payable to each
holder thereof, without interest or dividends thereon, less any applicable withholding of Taxes, in the manner provided for in
Section 2.02(i)
. All such shares of Company Common Stock, when so converted, shall no longer be outstanding
and shall automatically be canceled and shall cease to exist, and each holder of a certificate (or evidence of shares in book-entry form) that immediately prior to the Effective Time represented any such shares of Company Common Stock (each, a
Certificate
) shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration, without interest and subject to any applicable withholding of Taxes.
(d) Notwithstanding the foregoing, if between the date of this Agreement and the Effective Time the outstanding shares of Company Common Stock
shall have been changed into a different number of shares or a different class, by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event shall have occurred,
then any number or amount contained herein which is based upon the number of shares of Company Common Stock will be appropriately adjusted to provide the holders of Company Common Stock, Company Stock Options, Company Restricted Stock Awards,
Company Restricted Stock Unit Awards and other awards under the Company Stock Plans the same economic effect as contemplated by this Agreement prior to such event;
provided
that with respect to outstanding Company Stock Options and other
awards made under the Company Stock Plans, any such adjustments shall be made in accordance with the applicable Company Stock Plan.
Section 2.02.
Exchange of Certificates
.
(a)
Paying Agent
. Prior to the Effective Time, Parent shall appoint a bank or trust company reasonably acceptable to the Company to act
as paying agent (the
Paying Agent
) for the payment of the Merger Consideration. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, with the Paying Agent, for payment in accordance with this
Article II
through the Paying Agent, in trust with the Paying Agent for the benefit of the holders of Company Common Stock (other than shares to be canceled or converted into shares of the Surviving Company in accordance with
Section 2.01(b)
, Company Restricted Stock Awards, and Dissenting Shares), by wire transfer of immediately available funds, an amount in cash sufficient to pay the aggregate Merger Consideration to such holders (the
Payment
Fund
).
(b)
Letter of Transmittal
. As promptly as reasonably practicable after the Effective Time (and in any event
within five (5) Business Days after the Effective Time), Parent shall cause the Paying Agent to mail to each holder of record of Company Common Stock whose shares are converted into the right to receive the Merger Consideration pursuant to
Section 2.01
a form of letter of transmittal (the
Letter of Transmittal
) (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent, shall be in such form and have such other provisions (including customary provisions with respect to delivery of an agents message with respect to shares held in book-entry form) as Parent may
specify, subject to the Companys reasonable approval, and shall be prepared prior to the Closing), together with instructions thereto.
(c)
Merger Consideration Received in Connection with Exchange
. Upon (i) in the case of shares of Company Common Stock represented
by a Certificate, the surrender of such Certificate for cancellation to the Paying Agent or (ii) in the case of shares of Company Common Stock held in book-entry form, the receipt of an agents message by the Paying Agent, in
each case together with the Letter of Transmittal, duly, completely and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by
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the Paying Agent, the holder of such shares shall be entitled to receive in exchange therefor the Merger Consideration into which such shares of Company Common Stock have been converted pursuant
to
Section 2.01
. In the event of a transfer of ownership of Company Common Stock that is not registered in the transfer records of the Company, the Merger Consideration may be issued to a transferee if the Certificate representing such
Company Common Stock (or, if such Company Common Stock is held in book-entry form, proper evidence of such transfer) is presented to the Paying Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that
any applicable stock transfer Taxes have been paid. Until surrendered as contemplated by this
Section 2.02(c)
, each share of Company Common Stock, and any Certificate with respect thereto, shall be deemed at any time from and after the
Effective Time to represent only the right to receive upon such surrender the Merger Consideration that the holders of shares of Company Common Stock are entitled to receive in respect of such shares pursuant to
Section 2.01(c)
. No
interest shall be paid or shall accrue on the cash payable upon surrender of any Certificate (or shares of Company Common Stock held in book-entry form).
(d)
Treatment of Unexchanged Shares
. No cash payment with respect to the Merger Consideration shall be paid to the holder of any
unsurrendered Certificate (or shares of Company Common Stock held in book entry form) until the surrender of such Certificate (or shares of Company Common Stock held in book-entry form) in accordance with this
Article II
.
(e)
No Further Ownership Rights in Company Common Stock
. The Merger Consideration paid in accordance with the terms of this
Article
II
, upon conversion of any shares of Company Common Stock, shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to such shares of Company Common Stock. At the Effective Time, the stock transfer books of the
Company shall be closed and from and after the Effective Time, there shall be no further registration of transfers on the stock transfer books of the Surviving Company of shares of Company Common Stock that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, any Certificates formerly representing shares of Company Common Stock (or shares of Company Common Stock held in book-entry form) are presented to Parent or the Paying Agent for any reason, they shall be
canceled and exchanged as provided in this
Article II
.
(f)
Termination of Payment Fund
. Any portion of the Payment Fund
(including any interest received with respect thereto) that remains undistributed to the holders of Company Common Stock for one (1) year after the Effective Time shall be delivered to Parent, and any holder of Company Common Stock who has not
theretofore complied with this
Article II
shall thereafter look only to Parent for payment of its claim for Merger Consideration (subject to abandoned property, escheat or other similar law).
(g)
No Liability
. None of the Company, Parent, Merger Sub or the Paying Agent shall be liable to any Person in respect of any portion
of the Payment Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Any portion of the Payment Fund which remains undistributed to the holders of Company Common Stock for two years after the
Effective Time (or immediately prior to such earlier date on which the Payment Fund would otherwise escheat to, or become the property of, any Governmental Entity), shall, to the extent permitted by Applicable Law, become the property of Parent,
free and clear of all claims or interest of any Person previously entitled thereto.
(h)
Investment of Payment Fund
. The Paying
Agent shall invest the cash in the Payment Fund if and as directed by Parent. Any interest and other income resulting from such investments shall be paid to, and be the property of, Parent. No investment losses resulting from investment of the
Payment Fund shall diminish the rights of any stockholder of the Company to receive the Merger Consideration or any other payment as provided herein. To the extent there are losses with respect to such investments or the Payment Fund diminishes for
any other reason below the level required to make prompt cash payment of the aggregate funds required to be paid pursuant to the terms hereof, Parent shall reasonably promptly replace or restore the cash in the Payment Fund so as to ensure that the
Payment Fund is at all times maintained at a level sufficient to make such cash payments.
(i)
Withholding Rights
. Each of Parent,
the Company, the Surviving Company, and the Paying Agent (without duplication), or other applicable withholding agent shall be entitled to deduct and withhold from the
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consideration otherwise payable to any holder of Company Common Stock, Company Stock Options, Company Restricted Stock Awards, or Company Restricted Stock Unit Awards pursuant to this Agreement
such amounts as are required to be deducted and withheld with respect to the making of such payment under Applicable Law with respect to Taxes. Amounts so withheld and timely paid over to the appropriate Governmental Entity shall be treated for all
purposes of this Agreement as having been paid to the holder of Company Common Stock, Company Stock Options, Company Restricted Stock Awards or Company Restricted Stock Units Awards in respect of which such deduction or withholding was made.
(j)
Lost, Stolen or Destroyed Certificates
. If any Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond, in such reasonable and customary amount as Parent may direct, as indemnity against any
claim that may be made against it with respect to such Certificate, the Paying Agent shall, in exchange for the cancellation of such lost, stolen or destroyed Certificate, issue the Merger Consideration deliverable in respect thereof as provided in
this
Article II
.
Section 2.03.
Dissenters Rights
. Notwithstanding any provision of this Agreement to the
contrary, shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and that are held by holders who have not voted in favor of or consented to the Merger and who are entitled to demand and have properly
demanded their rights to be paid the fair value of such shares of Company Common Stock in accordance with Section 262 of the DGCL (the
Dissenting Shares
) shall not be canceled and converted into the right to receive the
Merger Consideration as provided in
Section 2.01(c)
, and the holders of Dissenting Shares shall be entitled to only such rights as are granted by Section 262 of the DGCL. If, after the Effective Time, any such holder fails to
perfect or effectively withdraws or loses such right, such Dissenting Shares shall thereupon be treated as if they had been converted into, and to have become exchangeable for, at the Effective Time, the right to receive the Merger Consideration,
without any interest thereon. The Company shall promptly notify Parent of any notices of intent, demands or other communications received by the Company for appraisal of any shares of Company Common Stock and attempted withdrawals of such demands,
and Parent shall have the right to participate in negotiations and proceedings with respect to such demands for appraisal. Prior to the Effective Time, the Company shall not, without the prior written consent of Parent or as otherwise required by an
Order, make any payment with respect to, or settle or compromise or offer to settle or compromise, any such demands, or agree to do any of the foregoing.
Section 2.04.
Treatment of Company Stock Options, Company Restricted Stock Awards, Company Restricted Stock Unit Awards, ESPP and
Company Stock Plans
. Prior to the Effective Time, the Company Board (or, if appropriate, any committee administering any Company Stock Plans) will take all actions as it deems necessary or appropriate to give effect to this
Section 2.04
to provide that:
(a)
Treatment of Company Stock Options
. Immediately prior to the Effective Time, each
Company Stock Option that is then outstanding and that has an exercise price less than the Merger Consideration (whether or not then vested or exercisable) (each such Company Stock Option, a
Cash-Out Option
) shall be cancelled and
terminated, and each holder of a Cash-Out Option shall have the right to receive from the Surviving Company, in respect of such Cash-Out Option, an amount in cash (less applicable withholding taxes, if any) equal to (i) the number of shares of
Company Common Stock subject to such Cash-Out Option, multiplied by (ii) the excess of (1) the Merger Consideration over (2) the exercise price per share of such Cash-Out Option, payable through payroll promptly (but in any event no
later than the later of ten (10) Business Days following the Closing Date and the first regular payroll date following the Closing Date) following the Closing Date. With respect to any Company Stock Option that is outstanding immediately prior
to the Effective Time that is not a Cash-Out Option, the Company shall cause the cancellation of such Company Stock Option without any payment or consideration therefor.
(b)
Treatment of Company Restricted Stock Awards
. Immediately prior to the Effective Time, each Company Restricted Stock Award that is
then outstanding shall be cancelled and terminated, and each holder of a Company Restricted Stock Award shall have the right to receive from the Surviving Company, in respect of such Company Restricted Stock Award, an amount in cash (less applicable
withholding taxes, if any) equal to (i) the
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number of shares of Company Common Stock subject to such Company Restricted Stock Award, multiplied by (ii) the Merger Consideration, payable through payroll promptly (but in any event no
later than the later of ten (10) Business Days following the Closing Date and the first regular payroll date following the Closing Date) following the Closing Date.
(c)
Treatment of Company Restricted Stock Unit Awards
. Immediately prior to the Effective Time, each Company Restricted Stock Unit
Award that is then outstanding shall be cancelled and terminated, and each holder of a Company Restricted Stock Unit Award shall have the right to receive from the Surviving Company, in respect of such Company Restricted Stock Unit Award, an amount
in cash (less applicable withholding taxes, if any) equal to (i) the number of shares of Company Common Stock subject to such Company Restricted Stock Unit Award (determined in accordance with terms of the applicable Company Restricted Stock
Unit Award based on the actual performance achieved as if the Closing Date represented the end date of the performance period), multiplied by (ii) the Merger Consideration, payable through payroll promptly (but in any event no later than the
later of ten (10) Business Days following the Closing Date and the first regular payroll date following the Closing Date) following the Closing Date.
(d)
Treatment of ESPP
. As soon as practicable following the date of this Agreement, the Company shall take all actions necessary
(i) to suspend the ESPP effective immediately such that no additional Offering Periods shall be commenced between the date of this Agreement and the Effective Time, (ii) to cancel each outstanding right to purchase shares of Company Common
Stock in accordance with the ESPP and (iii) to refund all sums collected from participants during the Offering Period (as defined in the ESPP) then in progress.
(e)
Termination of Company Stock Plans
. Prior to the Effective Time, the Company shall take all actions (including obtaining any
necessary determinations and/or resolutions of the Company Board or a committee thereof, which Parent will have a reasonable opportunity to review and comment upon prior to their presentation to the Company Board or such committee) that may be
necessary (under the Company Stock Plans and/or related award agreements and the ESPP) to terminate each Company Stock Plan and the ESPP as of the Effective Time. As of the Effective Time, the Company Stock Plans and the ESPP shall be terminated and
shall cease to exist without any liability to the Company, Parent, the Surviving Corporation or any of their respective Subsidiaries (other than the obligation to pay the amounts set forth in
Sections 2.04(a)
,
(b)
,
(c)
and
(d)
).
(f)
Treatment of Director Deferred Units
. Following the Effective Time, each participant in a Director Deferred
Compensation Plan shall have the right to receive from the Surviving Company an amount in cash (less applicable withholding taxes, if any) equal to the product of (i) the Merger Consideration, multiplied by (ii) the number of Stock Credits
(as defined in the applicable Director Deferred Compensation Plan) then credited to such participants Stock Account (as defined in the applicable Director Deferred Compensation Plan), payable in accordance with the terms of the applicable
Director Deferred Compensation Plan.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub that, except (i) as disclosed in the Company SEC Documents or any other
report, schedule, form, statement, prospectus or other document (including exhibits and schedules thereto and other information incorporated therein) in each case filed with, or furnished to, the SEC after January 1, 2013 and publicly available
prior to the date of this Agreement (in each case, to the extent that it is reasonably apparent from the face of such disclosure that such information is relevant to such representations and warranties and other than any risk factor disclosure or
other similarly cautionary, predictive or forward-looking statements set forth in any section of any such Company SEC Document; it being understood that any historical and factual information contained within such disclosure or statements shall not
be so excluded) or (ii) as disclosed in the disclosure letter delivered by the Company to Parent at or before the
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execution and delivery by Parent and Merger Sub of this Agreement (the
Company Disclosure Letter
) (it being understood that any information set forth in one section or
subsection of the Company Disclosure Letter shall be deemed to apply to and qualify the section or subsection of this Agreement to which it corresponds and each other section or subsection of this Agreement to the extent that it is reasonably
apparent from the face of such disclosure that such information is relevant to such other section or subsection):
Section 3.01.
Qualification, Organization, Subsidiaries, etc
.
(a) The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. Each of the Companys Subsidiaries is
a legal entity duly organized, validly existing and, to the extent legally applicable, in good standing under the laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and
operate its properties and assets and to carry on its business as presently conducted, except where the failure to have such power or authority has not had and would not reasonably be expected to have a Company Material Adverse Effect. Each of the
Company and its Subsidiaries is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such approvals,
qualification or licensing necessary, except, in the case of the Company and its Subsidiaries, where the failure to be so duly approved, qualified or licensed and in good standing has not had and would not reasonably be expected to have a Company
Material Adverse Effect. A true, correct and complete list of all the Subsidiaries of the Company (excluding the Life Sciences Subsidiaries), identifying (i) the name, jurisdiction of incorporation or organization, and type of entity of each
such Subsidiary, (ii) the number and type of the outstanding share capital or other equity or similar interests of each such Subsidiary, (iii) the percentage of the outstanding share capital or other equity or similar interests of each
such Subsidiary owned by the Company and each of its other Subsidiaries, (iv) the percentage of the outstanding share capital or other equity or similar interests of each such Subsidiary owned by any other Person in each such Subsidiary and
(v) the number of shares of Company Common Stock owned by each such Subsidiary, is set forth on
Section 3.01(a)
of the Company Disclosure Letter.
(b) The Company has delivered or made available to Parent, prior to execution of this Agreement, true and complete copies of the restated
certificate of incorporation of the Company in effect as of the date of this Agreement (the
Company Charter
), the amended and restated by-laws of the Company in effect as of the date of this Agreement (the
Company
By-laws
) and the certificate of incorporation, by-laws and other charter and organizational documents, including all amendments thereto, of each of the Companys Subsidiaries, in each case as in effect as of the date of this
Agreement.
Section 3.02.
Authority; Execution and Delivery; Enforceability
.
(a) The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the Merger and the other transactions contemplated by this Agreement, subject only, in the case of the Merger, to the adoption of this Agreement by the affirmative vote of holders of a majority of the outstanding shares of Company
Common Stock entitled to vote on such matter at the Company Stockholders Meeting (the
Company Stockholder Approval
). The Company Board has unanimously (i) approved the execution, delivery and performance of this Agreement,
(ii) determined that entering into this Agreement is fair to, and in the best interests of, the Company and its stockholders, (iii) declared this Agreement and the Merger advisable and (iv) subject to
Section 5.02
,
resolved to recommend that the Companys stockholders adopt this Agreement (the
Company Recommendation
). The Company Board has unanimously directed that the Company submit the adoption of this Agreement to a vote at a meeting
of the stockholders of the Company in accordance with the terms of this Agreement (the
Company Stockholders Meeting
). Except for the Company Stockholder Approval, no other corporate proceedings on the part of the Company are
necessary to authorize or adopt this Agreement or to consummate the Merger and the other transactions contemplated by this Agreement, including the sale of the Life Sciences Business pursuant to the Life Sciences SAPA (except for the filing of the
appropriate merger documents as required by the DGCL). The Company has duly executed and
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delivered this Agreement and, assuming the due authorization, execution and delivery by Parent and Merger Sub, this Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally and by general principles of equity.
Section 3.03.
Capital Structure
.
(a) The authorized capital stock of the Company consists of 100,000,000 shares of Company Common Stock and 2,000,000 shares of Preferred
Stock, par value $0.01 per share (the
Company Preferred Stock
). At the close of business on January 31, 2014 (the
Capitalization Date
), (i) 31,985,452 shares of Company Common Stock were issued and
outstanding, (ii) 2,651,562 shares of Company Common Stock were issued and outstanding or reserved and available for issuance pursuant to the Company Stock Plans, of which (A) 1,156,241 shares were reserved and available for issuance upon
exercise of outstanding Company Stock Options, (B) 1,110,883 shares were issued and outstanding, subject to the vesting or settlement of Company Restricted Stock Awards, (C) 308,012 shares were reserved and available for issuance upon the
vesting or settlement of Company Restricted Stock Unit Awards (assuming achievement of the maximum level of performance under such Company Restricted Stock Unit Awards), (D) 715 shares were reserved and available for issuance subject to
outstanding purchase rights pursuant to the ESPP, and (E) 75,711 shares were reserved and available for issuance subject to the Director Deferred Compensation Plans, (iii) no shares of Company Preferred Stock were issued and outstanding
and (iv) 9,125,780 shares of Company Common Stock were held in the treasury of the Company.
(b) Except as set forth in
Section 3.03(a)
above or in
Section 3.03(b)
of the Company Disclosure Letter, as of the Capitalization Date, there were (i) no outstanding shares of capital stock of, or other equity or voting interests in, the Company,
(ii) no outstanding securities of the Company convertible into or exchangeable for shares of capital stock of, or other equity or voting interests in, the Company, (iii) no outstanding options, warrants, rights or other commitments or
agreements to acquire from the Company or any Subsidiary of the Company, or that obligate the Company or any Subsidiary of the Company to issue, sell or transfer, any capital stock of, or other equity or voting interests in, or any securities
convertible into or exchangeable for shares of capital stock of, or other equity or voting interests in, the Company, (iv) no obligations of the Company or any of its Subsidiaries to grant, extend or enter into any subscription, warrant, right,
convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interests in, the Company and (v) no other obligations by the Company or any of its Subsidiaries to make
any payments based on the price or value of any of the foregoing or dividends paid thereon (the items in clauses (i), (ii), (iii), (iv) and (v) being referred to collectively as
Company Securities
). There are no
outstanding agreements of any kind that (A) obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities (except pursuant to the acquisition by the Company of shares of Company Common Stock
in settlement of the exercise price of Company Stock Options, or for purposes of satisfying Tax withholding obligations with respect to holders of Company Stock Options, Company Restricted Stock Awards or Company Restricted Stock Unit Awards),
(B) provide any preemptive rights, subscription rights, anti-dilutive rights, rights of first refusal or similar rights with respect to any Company Securities, (C) obligate the Company or any of its Subsidiaries to provide funds or make
investments (in the form of a loan, capital contribution or otherwise), (D) constitutes a stockholder rights plan (or similar plan commonly referred to as a poison pill) or (E) obligate the Company or any Subsidiary of the
Company to grant, extend or enter into any such agreements relating to any Company Securities. Neither the Company nor any of its Subsidiaries is a party to any stockholders agreement, voting trust agreement, registration rights agreement or
other similar agreement or understanding relating to any Company Securities or any other agreement relating to the disposition, voting or dividends with respect to any Company Securities. All outstanding shares of Company Common Stock and all
outstanding shares of capital stock of each of the Companys Subsidiaries have been duly authorized and validly issued and are fully paid, nonassessable and free and clear of all Liens other than any Liens resulting from restrictions on
transfer under applicable securities laws. Since the Capitalization Date through the date hereof, neither the Company nor any of its Subsidiaries has (A) issued any Company Securities or incurred any obligation to make any payments based on the
price or value of Company Securities or dividends
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paid thereon, other than pursuant to Company Stock Options, Company Restricted Stock Awards and Company Restricted Stock Unit Awards that were outstanding as of the Capitalization Date as set
forth in
Section 3.03(a)
or (B) established a record date for, declared, set aside for payment or paid any dividend on, or made any other distribution in respect of, any Company Securities.
Section 3.03(b)
of the Company
Disclosure Letter contains a correct and complete list, as of the Capitalization Date, of all outstanding Company Stock Options, Company Restricted Stock Awards and Company Restricted Stock Unit Awards, including the holder, date of grant number of
shares of Company Common Stock underlying such award (with respect to Company Restricted Stock Unit Awards, assuming achievement of the maximum level of performance under such Company Restricted Stock Unit Awards), the type of Company Stock Option
(incentive stock option or nonqualified stock option) and, where applicable, exercise price.
Section 3.04.
Governmental
Authorization; Non-contravention
.
(a) The execution, delivery and performance by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby (including the sale of the Life Sciences Business pursuant to the Life Sciences SAPA) require no action by or in respect of, or filing with, any Governmental Entity other than (i) the
filing of a certificate of merger with respect to the Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (ii) filings required
under, and compliance with other applicable requirements of, the HSR Act and any other applicable Regulatory Law as set forth on
Section 3.04(a)
of the Company Disclosure Letter (including the expiration or termination of the applicable
waiting periods under the HSR Act and the other anti-trust notification and approvals required under non-U.S. jurisdictions, as set forth in
Section 3.04(a)
of the Company Disclosure Letter, the
Required Antitrust
Approvals
), (iii) compliance with any applicable requirements of the Securities Act, the Exchange Act (including the filing with the SEC of the Proxy Statement), and any other applicable U.S. state or federal securities laws,
(iv) consents, approvals, orders, authorizations, registrations, declarations and filings required in connection with the consummation of the transactions contemplated by the Life Sciences SAPA and (v) consents, approvals, orders,
authorizations, registrations, declarations and filings, the failure of which to be obtained, made or given have not had and would not reasonably be expected to have a Company Material Adverse Effect or prevent, materially delay or materially impair
the consummation of the transactions contemplated by this Agreement.
(b) The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the Company Charter, Company By-laws or comparable organizational
documents of any of the Companys Subsidiaries, (ii) assuming compliance with the matters referred to in
Section 3.04(a)
and receipt of the Company Stockholder Approval, contravene, conflict with or result in any violation or
breach of any provision of any Applicable Law, (iii) require any consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause
or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any of its Subsidiaries is entitled under any provision of any Contract binding upon the Company or
any of its Subsidiaries or any governmental licenses, authorizations, Permits, consents (including consents required by Contract), approvals, variances, exemptions or orders affecting, or relating in any way to, the assets or business of the Company
and its Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries, with such exceptions, in the case of each of clauses (ii) through (iv), as has not had and would not
reasonably be expected to have a Company Material Adverse Effect or prevent, materially delay or materially impair the consummation of the transactions contemplated by this Agreement.
Section 3.04(b)
of the Company Disclosure Letter sets
forth a correct and complete list of Material Contracts pursuant to which consents, notices or waivers are required prior to consummation of the transactions contemplated by this Agreement (whether or not subject to the exceptions with respect to
clauses (ii) through (iv) set forth above).
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Section 3.05.
Company SEC Documents
.
(a) The Company has on a timely basis filed with or furnished to the SEC all reports, schedules, forms, statements, prospectuses and other
documents required to be filed with or furnished to the SEC by the Company since January 1, 2011, together with any exhibits and schedules thereto and other information incorporated therein (collectively, the
Company SEC
Documents
). As of their respective effective dates (in the case of Company SEC Documents that are registration statements filed pursuant to the requirements of the Securities Act) and as of their respective SEC filing dates (in the case of
all other Company SEC Documents), the Company SEC Documents complied as to form in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and the rules and regulations of the SEC promulgated thereunder
applicable to such Company SEC Documents, and none of the Company SEC Documents as of such respective dates (and, if amended, as of the date of the filing of such amendment, with respect to the disclosures that are amended) contained any untrue
statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of the date hereof, there are no outstanding or
unresolved written comments received from the SEC with respect to any of the Company SEC Documents.
(b) The consolidated financial
statements of the Company (including the related notes) included or incorporated by reference in the Company SEC Documents complied as to form, as of their respective dates of filing with the SEC, in all material respects with the published rules
and regulations of the SEC with respect thereto, had been prepared in all material respects in accordance with GAAP (except, in the case of unaudited statements, as permitted by rules and regulations of the SEC) applied on a consistent basis during
the periods involved (except (i) as may be indicated in the notes thereto or (ii) as permitted by Regulation S-X) and fairly presented in all material respects the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in stockholders equity for the periods shown (subject, in the case of unaudited statements, to normal year-end adjustments, which
have not had and would not reasonably be expected to have a Company Material Adverse Effect).
(c) The Company has designed and maintains,
and at all times since January 1, 2011 has maintained, a system of internal controls over financial reporting and accounting sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of
financial statements for external purposes. The Company has designed and maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are sufficient to provide reasonable assurance that
material information that is required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms
and is accumulated and made known to its principal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure.
(d) Since January 1, 2011, (i) none of the Company or any of its Subsidiaries or, to the Knowledge of the Company, any of their
directors, executive officers, auditors, accountants or Representatives has received any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or
methods of the Company or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any of its Subsidiaries has engaged in questionable accounting
or auditing practices, and (ii) no attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported to the Company Board, any committee thereof or to any executive
officer of the Company evidence of a material violation of securities laws, a breach of fiduciary duty or a similar material violation by the Company or any of its Subsidiaries or any of their officers, directors or employees.
(e) The Company is in compliance in all material respects with all applicable listing and corporate governance requirements of NASDAQ.
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Section 3.06.
Absence of Certain Changes or Events
. Since December 31, 2012
there has not been a Company Material Adverse Effect. Since December 31, 2012 to the date of this Agreement, other than entry into the Life Sciences SAPA and the transactions contemplated thereby or other than as expressly contemplated by or
provided for in this Agreement, the business of the Company and the Companys Subsidiaries has been conducted in all material respects in the ordinary course of business consistent with past practices.
Section 3.07.
No Undisclosed Liabilities
. Neither the Company nor any of its Subsidiaries has any liabilities of any nature
(whether direct, indirect, accrued, absolute, contingent or otherwise), except (A) liabilities (i) reflected or reserved against in the most recent audited balance sheet (including the notes thereto) of the Company and its Subsidiaries
included in the Company SEC Documents filed prior to the date hereof, (ii) incurred after December 31, 2012, in the ordinary course of business consistent with past practice, or (iii) expressly contemplated by or incurred in
connection with this Agreement or the transactions contemplated hereby, or (B) the Life Sciences Liabilities.
Section 3.08.
Absence of Litigation
. As of the date hereof, there are no Actions pending or, to the Knowledge of the Company, threatened against the Company, any of its Subsidiaries, or any executive officer or director of the Company or any of its
Subsidiaries (in their capacity as such) or any Order to which the Company or any of its Subsidiaries is subject that (i) involves an amount in controversy in excess of $1,000,000, (ii) would reasonably be expected to impose any legal
restraint on, or prohibition against, or limit the Surviving Companys or its Subsidiaries ability to operate, the Business, or (iii) would reasonably be expected to have a Company Material Adverse Effect. The Company is not subject
to any outstanding Order that has had or would reasonably be expected to have a Company Material Adverse Effect.
Section 3.09.
Compliance with Applicable Laws; Permits
. Except as would not reasonably be expected to have a Company Material Adverse Effect, (i) the Company and each of its Subsidiaries are in, and since January 1, 2011 have been in, compliance
with all Applicable Laws, Orders and Permits applicable to the Company and its Subsidiaries and (ii) the Company and each of its Subsidiaries hold all Permits necessary for the lawful conduct of their respective businesses, all such Permits will
continue to be in full force and effect immediately following the Effective Time, and no suspension or cancellation of any such Permit is pending or, to the Knowledge of the Company, threatened.
Section 3.10.
Intellectual Property
. Except as relates solely to the Life Sciences Business or is included in the Life Sciences
Assets to be transferred pursuant to the Life Sciences SAPA:
(a) (i)
Section 3.10(a)
of the Company Disclosure Letter
identifies all material patents, registered copyrights, registered trademarks, and registered domain names, and pending applications for the foregoing, owned by the Company and its Subsidiaries as of the date of this Agreement (the
Registered IP
), and (ii) except as set forth in
Section 3.10(a)
of the Company Disclosure Letter, the Company and its Subsidiaries collectively and exclusively own such Registered IP, and to the Knowledge of the
Company, each item of such Registered IP is valid, subsisting and enforceable.
(b) To the Knowledge of the Company, the Company and its
Subsidiaries own, free and clear of any Liens other than Permitted Liens, or license or have the right to use, all Intellectual Property used in or necessary to the operation of their business as conducted by them on the date of this Agreement.
(c) Except as provided in the Inbound IP Contracts, neither the Company nor any of its Subsidiaries owe any royalties or other payments to any
Person for the use of any Intellectual Property that is incorporated into any Company product.
(d) To the Knowledge of the Company,
(i) the conduct of the businesses of the Company and its Subsidiaries as currently conducted does not infringe upon, misappropriate or otherwise violate any valid and enforceable Intellectual Property of any third person in a manner that would
have, or would reasonably be expected to have, a
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Company Material Adverse Effect and (ii) no other person has infringed upon, misappropriated or otherwise violated any Intellectual Property owned or licensed by the Company or any of its
Subsidiaries in a manner that would have, or would reasonably be expected to have, a Company Material Adverse Effect.
(e) Neither the
Company nor any of its Subsidiaries has since January 1, 2012 received from any Person any notice or threat, and to the Knowledge of the Company, there are no pending Actions that have been commenced against the Company or any of its
Subsidiaries since January 1, 2012, in each case either (i) asserting the infringement, misappropriation or other violation of any Intellectual Property by the Company or any of its Subsidiaries or (ii) challenging the validity or
enforceability of any Intellectual Property owned by the Company or its Subsidiaries.
(f) Neither the Company nor any of its Subsidiaries
has since January 1, 2012 sent to any Person any notice or threat, and there are no pending Actions that have been commenced by the Company or any of its Subsidiaries since January 1, 2012, in each case either (i) asserting the
infringement, misappropriation or other violation of any Intellectual Property or (ii) challenging the validity or enforceability of any Intellectual Property.
(g) Except as would not have, or would not reasonably be expected to have, a Company Material Adverse Effect: (i) the Company and its
Subsidiaries have maintained commercially reasonable and industry standard practices to protect the confidentiality of their trade secrets and other confidential information and (ii) all current and former employees and contractors of the
Company or its Subsidiaries who developed in the course of their work for the Company or any its Subsidiaries any material Intellectual Property that is incorporated in any product or service of the Company or its Subsidiaries have executed
Contracts that assign to the Company or one of its Subsidiaries all of such Persons respective rights in such developed Intellectual Property relating to such product or service.
(h) No proprietary software product distributed by the Company or its Subsidiaries as of the date of this Agreement contains any open source
computer code in a manner that, under applicable license terms for such open source computer code, imposes a requirement or condition that the Companys or its Subsidiarys own proprietary software included in that product be distributed
or made available in source code form under open source license terms.
(i) (i) The Companys and its Subsidiaries use and
dissemination of any personally-identifiable information concerning individuals is in compliance in all material respects with all applicable Company and Company Subsidiary privacy policies, Applicable Law applicable to the Company and its
Subsidiaries, and Contracts to which the Company or its Subsidiaries are bound, (ii) the Company and its Subsidiaries maintain commercially reasonable and industry standard policies and procedures regarding data security and privacy and
maintain administrative, technical, and physical safeguards that are commercially reasonable, and (iii) there have been no material security breaches relating to, or violations of any security policy regarding, or any unauthorized access of,
any data or information in the possession of the Company or any of its Subsidiaries.
Section 3.11.
Environmental Matters
.
(i) The Company and each of its Subsidiaries are and, for the past three (3) years, have been in material compliance with all Environmental Laws applicable to the Company and its Subsidiaries, (ii) the Company and its Subsidiaries
hold and comply with all material Permits that are required under applicable Environmental Laws for the lawful conduct of their respective businesses as currently conducted and no Action is pending, or to the Knowledge of the Company, threatened, in
connection with any alleged violation of any such Permit or seeking to rescind or materially modify any such Permit, (iii) as of the date hereof, neither the Company nor any of its Subsidiaries has received any written notice of, or to the
Knowledge of the Company is the subject of, any Action or request for information by any person asserting or inquiring into any material liability or material obligation on the part of the Company or any of its Subsidiaries arising under any
Environmental Law; (iv) no Hazardous Substances have been released by the Company or any Subsidiary or, to the Knowledge of the Company, any other person at or from any real property currently or, to the Knowledge of the Company, formerly owned
or operated by the Company or any of its Subsidiaries in a
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manner that reasonably could be expected to result in a material liability for the Company or any of its Subsidiaries under Environmental Laws; (v) neither the Company nor any Subsidiary is
subject to any ongoing obligations pursuant to any Consent Decree or other agreement resolving alleged material violations of or material liabilities under Environmental Laws; and (vi) the Company has made available to Parent all material
reports, documents and studies in the Companys or any Subsidiarys possession relating to the environmental condition of real properties currently or formerly owned or operated by the Company or any Subsidiary, or relating to material
noncompliance by the Company or any Subsidiary with applicable Environmental Laws. This
Section 3.11
constitutes the sole and exclusive representation or warranty of the Company relating to environmental matters.
Section 3.12.
Material Contracts
.
(a)
Section 3.12(a)
of the Company Disclosure Letter sets forth a list of all Material Contracts as of the date of this Agreement.
For purposes of this Agreement,
Material Contract
means any Contract to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective properties or assets is
bound (other than this Agreement and other than any Contract that is to be transferred or assigned pursuant to the Life Sciences SAPA or that relates solely to the Life Sciences Assets or Life Sciences Liabilities) that:
(i) is or would be required to be filed by the Company as a material contract pursuant to Item 601(b)(10) of Regulation S-K;
(ii) provides for the purchase or sale of goods or products from a supplier or to a customer of the Company or any of its Subsidiaries
which the Company or its Subsidiaries reasonably expect will result in purchases or sales in the aggregate amount that exceed $5,000,000 in the 2013 or 2014 fiscal year;
(iii) relates to a joint venture, partnership or other similar arrangement or to the formation, creation, governance or control of, or the
economic rights or obligations of the Company or any of its Subsidiaries in, any such joint venture, partnership or other similar arrangement;
(iv) provides for Indebtedness of the Company or any of its Subsidiaries having an outstanding or committed amount in excess of $1,000,000,
other than (A) Indebtedness solely between or among any of the Company and any of the Non-Life Sciences Subsidiaries and (B) letters of credit;
(v) limits the ability of the Company or any of its Subsidiaries (A) to compete in any line of business or with any Person or in any
geographic area for any duration, (B) to sell to or purchase from any Person or entity other than exclusive sales agreements entered into in the ordinary course of business consistent with past practice, (C) to deliver services to any
other Person or (D) to make use of any material Intellectual Property owned or otherwise used by the Company or any of its Subsidiaries;
(vi) provides that the Company or any of its Non-Life Sciences Subsidiaries license from any Person besides the Company or any of its Non-Life
Sciences Subsidiaries any material Intellectual Property that is incorporated into any Company product (excluding software code or other materials that are generally available on standard commercial terms) (
Inbound IP Contracts
);
(vii) provides that the Company or any of its Non-Life Sciences Subsidiaries license to any Person besides the Company or any of its
Non-Life Sciences Subsidiaries any material Intellectual Property owned by the Company or its Subsidiary, other than (A) nonexclusive licenses granted to customers or to distributors, resellers, or other channel partners in the ordinary course
of business, (B) nonexclusive licenses granted to manufacturers, consultants, contractors, or suppliers of the Company or any of its Subsidiaries that permit use for the benefit of the Company or any of its Subsidiaries, or
(C) nonexclusive licenses that do not include the right to make, have made, distribute or sell any Intellectual Property owned by the Company or its Subsidiaries (
Outbound IP Contracts
);
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(viii) contains a
standstill
or similar agreement; or
(ix) is a Real Property Lease.
(b) All of the Material Contracts are valid and binding and in full force and effect (except those that are terminated after the date of this
Agreement in accordance with their respective terms and not as a result of a breach or default thereunder by the Company or any of its Subsidiaries). To the Knowledge of the Company, no Person is challenging the validity or enforceability of any
Material Contract in any material respect. Neither the Company nor any of its Subsidiaries, nor to the Knowledge of the Company, any of the other parties thereto, has violated any provision of, or committed or failed to perform any act which (with
or without notice, lapse of time or both) would constitute a default under any provision of, and neither the Company nor any of its Subsidiaries has received notice that it has violated or defaulted under, any Material Contract, except for those
violations and defaults which have not had and would not reasonably be expected to have a Company Material Adverse Effect. No party to any Material Contract has given the Company or any of its Subsidiaries written notice of its intention to cancel,
terminate, change the scope of its rights under or fail to renew any Material Contract. To the Knowledge of the Company, no current or former officer or director of the Company (i) has (whether directly or indirectly through another entity in
which such Person has a material interest, other than as the holder of less than 2% of a class of securities of a publicly traded company) any material interest in any property or assets of the Company (except as a stockholder) or any competitor,
customer, supplier or agent of the Company or (ii) is currently a party to any Material Contract.
(c) A true, complete and
unredacted copy of each Material Contract, together with all exhibits, schedules, amendments and supplements thereto, has been made available to Parent.
Section 3.13.
Labor Matters
.
(a) Neither the Company nor any of its Subsidiaries is the subject of any pending or, to the Knowledge of the Company, threatened Action
asserting that it has committed an unfair labor practice (within the meaning of the National Labor Relations Act or comparable Applicable Law) or other violation of Applicable Law concerning labor or employment, except as would not reasonably be
expected to have a Company Material Adverse Effect, or seeking to compel the Company or any of its Subsidiaries to bargain with or otherwise recognize any labor organization or other employee representative, or otherwise concerning any current or
former employee or independent contractor of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries are party or otherwise subject to any Collective Bargaining Agreement or subject to any material bargaining order,
injunction or other Order relating to the Companys or any of its Subsidiaries relationship or dealings with its employees, any labor organization or any other employee representative, and no employee of the Company or any of its
Subsidiaries is represented by a labor organization or any other employee representative. There is no strike, picketing, slowdown, lockout, stoppage or other job Action or labor dispute involving the Company or any of its Subsidiaries pending or, to
the Knowledge of the Company, threatened and there has been no such Actions or disputes in the past five years. To the Knowledge of the Company, in the past five years, there has not been any attempt by employees of the Company or any of its
Subsidiaries or any labor organization or other employee representative to organize, represent or certify a collective bargaining unit or to engage in any other union organization activity with respect to the workforce of the Company or any of its
Subsidiaries. The employment of each employee of the Company or any of its Subsidiaries is terminable at will by the relevant Company entity without any penalty, liability or severance obligations. Neither the Company nor any of its Subsidiaries is
required by Applicable Law or any Collective Bargaining Agreement to provide any notice to, consult with, or obtain the consent of any labor organization or other employee representative in connection with the execution of this Agreement or the
Merger.
(b) Except as would not reasonably be expected to have a Company Material Adverse Effect, the Company and its Subsidiaries are,
and for the past three (3) years have been, in compliance with all Applicable Laws
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respecting immigration, employment and employment practices, terms and conditions of employment, including but not limited to wages and hours and the classification of employees and independent
contractors.
Section 3.14.
Benefits Matters; ERISA Compliance
.
(a)
Section 3.14(a)
of the Company Disclosure Letter sets forth, as of the date of this Agreement, a complete and correct list
identifying all material Company Benefit Plans (Company Benefit Plans designated with an * are sponsored or maintained solely for the benefit of current or former service providers of the Life Sciences Business). The Company has made
available to Parent true and complete copies, to the extent applicable, of (i) all Company Benefit Plans, (ii) the most recent annual report on Form 5500 and all schedules thereto filed with the Internal Revenue Service (the
IRS
) with respect to each Company Benefit Plan, (iii) the most recent summary plan description for each Company Benefit Plan, (iv) each trust agreement, group annuity contract or other funding mechanism relating to any
Company Benefit Plan, (v) the most recent financial statements and actuarial reports for each Company Benefit Plan, and (vi) the most recent IRS determination letter or opinion letter in respect of each Company Benefit Plan. For purposes
of this Agreement,
Company Benefit Plans
means, collectively (A) all employee benefit plans (as defined in Section 3(3) of ERISA, whether or not subject to ERISA) and all other bonus, pension, profit sharing,
retirement, deferred compensation, incentive compensation, equity or equity-based compensation, severance, retention, change in control, disability, vacation, death benefit, hospitalization, medical or other material benefit plans, programs,
agreements or arrangements providing, or designed to provide, material benefits to any current or former directors, officers, employees, or consultants of the Company or any of its Subsidiaries or the beneficiaries or dependents of any such Person
or as to which the Company or any of its Subsidiaries sponsors, maintains, contributes or is obligated to contribute, or under which the Company or any of its Subsidiaries has or may have any liability and (B) all employment, consulting,
severance, retention, change of control, tax gross-up or termination agreements between the Company or any of its Subsidiaries and any current or former directors, officers, employees, or consultants of the Company or any of its Subsidiaries under
which the Company or any of its Subsidiaries has or may have any liability.
(b) Each Company Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable determination letter or opinion letter from the IRS and, to the Knowledge of the Company, nothing has occurred that could reasonably be expected to cause the revocation of such
determination or opinion letter from the IRS.
(c) Neither the Company nor any Person that would be treated as a single employer with the
Company or any of its Subsidiaries under ERISA or the Code (any such Person, an
ERISA Affiliate
) has in the last six years contributed or has been obligated to contribute to any employee pension plans, as defined in
Section 3(2) of ERISA, subject to Title IV of ERISA or Section 412 of the Code, including a multiemployer plan, as defined in Section 3(37) of ERISA.
(d) No Company Benefit Plan provides health, medical or other welfare benefits after retirement or other termination of employment (other than
for continuation coverage required under Section 4980(B)(f) of the Code or Applicable Law).
(e) Except as would not reasonably be
expected to have a Company Material Adverse Effect, each Company Benefit Plan has been administered in accordance with its terms and is in compliance with ERISA (if applicable), the Code and all other Applicable Laws, and, with respect to the
Company Benefit Plans, the Company and its Subsidiaries are in compliance with ERISA, the Code and all other Applicable Laws.
(f) There
are no pending or, to the Knowledge of the Company, threatened claims (other than routine claims for benefits) by or on behalf of any participant or beneficiary in any of the Company Benefit Plans, or audits or investigations by a Governmental
Entity or other Actions otherwise involving any such Company Benefit Plan or the assets of any Company Benefit Plan, except, in each case, for those that would not reasonably be expected to have a Company Material Adverse Effect.
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(g) None of the execution and delivery of this Agreement, the obtaining of the Company
Stockholder Approval or the consummation of the Merger or any other transaction contemplated by this Agreement (alone or in conjunction with any other event, including any termination of employment on or following the Effective Time) will
(i) accelerate the time of payment or vesting, or trigger any payment or funding, of any compensation or benefits under any Company Benefit Plan or otherwise; (ii) increase or enhance any benefits under any Company Benefit Plan or
otherwise; or (iii) give rise to the payment of any amount by the Company or any of its Subsidiaries that would be nondeductible by reason of Section 280G of the Code. There is no contract, agreement, plan or arrangement to which the
Company or any of its Subsidiaries is a party by which it is required by its terms to compensate, gross-up, indemnify, or otherwise reimburse any Person for excise taxes imposed pursuant to Section 4999 or Section 409A of the Code.
(h) All material contributions required to be made to any Company Benefit Plan by Applicable Law or the terms of the Company Benefit Plan for
any period through the date hereof have been timely made or, to the extent not required to be made on or before the date hereof, have been accrued on the financial statements set forth in the Company SEC Documents to the extent required under GAAP.
(i) With respect to each Company Benefit Plan that is subject to the legal requirements of a jurisdiction outside the United States,
(i) each such plan required to be registered has been registered, (ii) each such plan that is a defined benefit pension plan or a defined contribution plan has no material unfunded liability, and (iii) except as would not reasonably
be expected to have a Company Material Adverse Effect, each such plan is in compliance with its terms and applicable legal requirements.
Section 3.15.
Real and Personal Properties
.
(a)
Section 3.15
of the Company Disclosure Letter sets forth a true, accurate and complete list of the addresses of all real
property (i) owned by the Company and each Company Subsidiary (the
Owned Real Property
) or (ii) leased, subleased by, licensed or with respect to which a right to use or occupy has been granted to or by the Company and
each Company Subsidiary (the
Leased Real Property
, and together with the Owned Real Property, the
Real Property
), in each case, other than as relates solely to the Life Sciences Assets or Life Sciences
Liabilities. The Company Disclosure Letter also sets forth beneath the addresses a true, accurate and complete list of all real property leases, including all amendments thereto, relating to the Owned Real Property and the Leased Real Property,
specifying the lessor(s) and lessee(s) of such leased property and the date of such lease (each, a
Real Property Lease
and collectively, the
Real Property Leases
). The Company has delivered to Parent true,
correct and complete copies of the Real Property Leases in each case, as amended or otherwise modified and in effect.
(b) The Company and
its Subsidiaries have (i) good and valid fee simple title to all of the Owned Real Property, (ii) except as relates solely to the Life Sciences Assets or Life Sciences Liabilities, good and valid title to all the personal properties and
assets reflected on the most recent audited balance sheet of the Company and its Subsidiaries included in the Company SEC Documents as being owned by the Company or one of its Subsidiaries or acquired after the date thereof (except for properties
and assets that have been disposed of in the ordinary course of business consistent with past practice since the date thereof) and (iii) valid leasehold interests in all of the Leased Real Property, in each case free and clear of all Liens,
other than Permitted Liens. The Real Property, together with permanent easements appurtenant thereto, includes all of the real property used or held for use in connection with or otherwise required to carry on the business of the Company and the
Company Subsidiaries as currently conducted in all material respects. There is no pending or, to Companys Knowledge, threatened in writing eminent domain taking affecting any of the Real Property.
Section 3.16.
Taxes
.
(a) Each of the Company and its Subsidiaries has timely filed, taking into account any extensions, all material Tax Returns required to have
been filed (or such Tax Returns have been filed on their behalf) and such Tax Returns are accurate and complete in all material respects, and the Company has provided or made available
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to Parent accurate and complete copies of all income Tax Returns filed by the Company or any of its Subsidiaries since January 1, 2010. There are no material Liens with respect to Taxes upon
any of the assets of the Company or any of its Subsidiaries other than Permitted Liens.
(b) Each of the Company and its Subsidiaries has
paid all material Taxes required to have been paid by it (whether or not shown on any Tax Return) other than Taxes that are not yet due or that are being contested in good faith in appropriate proceedings and have been adequately reserved under
GAAP, and no material claim has been made in the last three (3) years by a Governmental Entity in a jurisdiction in which the Company or any of its Subsidiaries does not file Tax Returns that the Company or any of its Subsidiaries may be
subject to Taxation in that jurisdiction.
(c) Neither the Company nor any of its Subsidiaries has received any written notice of any
audits, written claims, examinations, investigations, or other proceedings by any Governmental Entity of the Company or any of its Subsidiaries with respect to any material amount of Taxes that are currently pending or threatened and no deficiency
for any material amount of Tax has been asserted or assessed by a Governmental Entity against the Company or any of its Subsidiaries which deficiency has not been paid or is not being contested in good faith in appropriate proceedings and has been
adequately reserved under GAAP.
(d) Neither the Company nor any of its Subsidiaries has failed to withhold, collect, or timely remit any
material amounts required to have been withheld, collected and remitted in respect of Taxes with respect to any payments to a vendor, employee, independent contractor, creditor, shareholder, or any other Person and the Company and its Subsidiaries
have complied in all material respects with all reporting and recordkeeping requirements.
(e) Since January 1, 2010, neither the
Company nor any of its Subsidiaries has been a distributing corporation or a controlled corporation in a distribution intended to qualify for tax-free treatment under Section 355 of the Code.
(f) Neither the Company nor any of its Subsidiaries is liable for any material amount of Taxes of any other Person (other than the Company and
its Subsidiaries) pursuant to Treasury Regulation 1.1502-6 (or any similar provision of Applicable Law) or as a transferee or successor, by Contract or otherwise, or is a party to any Tax allocation or sharing agreement or any Tax indemnity
agreement (other than commercial contracts entered into in the ordinary course of business that do not relate primarily to Taxes).
(g)
Neither the Company nor any Subsidiary has waived any statute of limitations in respect of any material amount of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, in each case that is currently outstanding,
and no closing agreements, private letter rulings, Tax holidays, technical advice memoranda or similar agreements or rulings related to Taxes have been entered into, issued by or requested from any Governmental Entity with or in respect of the
Company or any of its Subsidiaries.
(h) Neither the Company nor any of its Subsidiaries has participated in or cooperated with an
international boycott within the meaning of Section 999 of the Code.
(i) Neither the Company nor any of its Subsidiaries is or has
been required to make any adjustment pursuant to Section 481(a) of the Code (or any similar provision of Applicable Law) by reason of any change in any accounting methods within the last (3) three years, and there is no application pending
with any Governmental Entity requesting for permission of any changes in any accounting methods, and to the Knowledge of the Company, no Governmental Entity has proposed any such adjustment or change in accounting method.
(j) The Company and each of its Subsidiaries (if required to do so by Applicable Law) is registered in accordance with all Applicable Law
concerning Value Added Tax, Goods and Services Tax, Consumption Tax, and other equivalent Applicable Law, and has complied in all material respects with any recordkeeping and documentation requirements for purposes of the foregoing.
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(k) Neither the Company nor any of its Subsidiaries has participated in any listed
transaction within the meaning of Treasury Regulation Section 1.6011-4 (or any similar provision of Applicable Law) or any tax shelter within the meaning of Section 6662 of the Code (or any similar provision of Applicable
Law).
Section 3.17.
Proxy Statement
. None of the information included or incorporated by reference in the Proxy Statement
will, at the time it is first published or mailed to the stockholders of the Company, at the time of any amendment thereof or supplement thereto and at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and regulations thereunder. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any statements made in the Proxy Statement based on
written information supplied by or on behalf of Parent or Merger Sub expressly for inclusion in the Proxy Statement.
Section 3.18.
Brokers Fees and Expenses
. Except for Barclays Capital Inc., no broker, finder or investment banker is entitled to any brokers, finders, investment bankers or other similar fee or commission in connection with the
transactions contemplated by this Agreement (including the sale of the Life Sciences Business) based upon arrangements made by or on behalf of the Company or any of its Subsidiaries. The Company has made available to Parent a true and complete copy
of all agreements between the Company and Barclays Capital Inc. pursuant to which such firm would be entitled to any payment relating to the Merger and the other transactions contemplated by this Agreement (including the sale of the Life Sciences
Business).
Section 3.19.
Opinion of Financial Advisor
. The Company Board has received the opinion of Barclays Capital Inc.,
to the effect that, as of the date hereof and subject to the limitations, qualifications and assumptions set forth therein, the Merger Consideration to be offered to the holders of shares of Company Common Stock is fair from a financial point of
view to such holders. As of the date of this Agreement, such opinion has not been withdrawn, revoked or modified. It is agreed and understood that such opinions are for the benefit of the Company Board and may not be relied on by Parent or Merger
Sub. The Company will make available to Parent solely for informational purposes a signed copy of such opinion as soon as possible following execution of this Agreement (and, in any event, within two (2) Business Days following the execution of
this Agreement).
Section 3.20.
Takeover Statutes
. The approval of the Company Board of this Agreement and the Merger
represents all the action necessary to render inapplicable to this Agreement and the Merger the provisions of Section 203 of the DGCL to the extent, if any, such section would otherwise be applicable to this Agreement and the Merger, and no
other state takeover statute applies to this Agreement and the Merger.
Section 3.21.
Insurance
.
(a) As of the date of this Agreement, each material current insurance policy under which the Company or any of its Subsidiaries is an insured
or otherwise the principal beneficiary of coverage (other than such policies which insure solely Life Sciences Assets or Life Sciences Liabilities or are to be transferred pursuant to the Life Sciences Buyer pursuant to the Life Sciences SAPA)
(each, an
Insurance Policy
) is in full force and effect and none of the Company or any of its Subsidiaries is in breach or default (including any such breach or default with respect to the payment of premiums or the giving of
notice) in any material respect under any Insurance Policy, and, to the Knowledge of the Company, no event has occurred which, with notice or lapse of time, would constitute such breach or default, or permit termination or modification, under any
Insurance Policy. There have been no changes to the terms, provisions or conditions of any Insurance Policy since December 31, 2013.
(b) As of the date of this Agreement, there is no material claim pending under any Insurance Policy as to which coverage has been questioned,
denied or disputed, in whole or in part, by the underwriters of such Insurance Policies. The Company has no Knowledge of any threatened termination of, or material premium increase with respect to, or the future unavailability on substantially the
same terms of, any of such Insurance
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Policies. At no time subsequent to December 31, 2012, has the Company or any of its Subsidiaries (a) been denied any material insurance or indemnity bond coverage which it has requested
or (b) made any material reduction in the scope or amount of its insurance coverage.
Section 3.22.
Certain Business
Practices
. The Company and each of its Subsidiaries (a) is in compliance in all material respects with the Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act and any other U.S. or foreign Legal Requirement concerning
corrupt payments applicable to it and (b) neither the Company nor any of its Subsidiaries has, to the Knowledge of the Company, been investigated by any Governmental Entity with respect to, or been given written notice (or, to the Knowledge of
the Company, oral notice) by a Governmental Entity of, any violation by the Company or any of its Subsidiaries of the Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act, or any other U.S. or foreign law concerning corrupt
payments. Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any employee, representative or agent of the Company authorized to act, and acting, on behalf of the Company or any of its Subsidiaries has paid or
given, offered or promised to pay or give, or authorized or ratified the payment or giving, directly or indirectly, of any monies or anything of value to any national, provincial, municipal or other government official or employee or any political
party or candidate for political office or Governmental Entity for the direct or indirect purpose of influencing any act or decision of such Person or of the Governmental Entity to obtain or retain business, or direct business to any person or to
secure any other improper benefit or advantage that, in each case, has or would reasonably be likely to result in a violation of Applicable Law. For purposes of this provision, an official or employee includes any known official or
employee of any directly or indirectly government-owned or controlled entity, and any known officer or employee of a public international organization, as well as any person known to be acting in an official capacity for or on behalf of any such
government or department, agency, or instrumentality, or for or on behalf of any such public international organization.
Section 3.23.
Sanctioned Persons; PATRIOT Act
. None of the Company or any of its Subsidiaries or, to the Knowledge of the Company,
any of their respective directors, officers, employees, agents, advisors or Affiliates is subject to any sanctions or economic embargoes administered or enforced by the U.S. Department of State or the U.S. Department of Treasury (including the
Office of Foreign Assets Control) or any other applicable sanctions authority (collectively,
Sanctions
, and the associated laws, rules, regulations and orders, collectively,
Sanctions Laws
). Each of the Company
and its Subsidiaries and their respective directors, officers and, to the Knowledge of the Company, employees, agents, advisors and Affiliates is in compliance, in all material respects, with (i) all Sanctions Laws and (ii) the Uniting and
Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the
PATRIOT Act
) and any other applicable terrorism and money laundering laws, rules, regulations and orders. The operations
of the Company and its Affiliates have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the applicable money laundering-related laws.
Section 3.24.
Conflict Minerals
. The Company has taken reasonable actions necessary for the Company to be in compliance in all
material respects in 2014 with the disclosure requirements of applicable U.S. federal securities laws related to Conflict Minerals.
Conflict Minerals
means: (1) columbite-tantalite (coltan), cassiterite, gold, wolframite, or
their derivatives, which are limited to tantalum, tin, and tungsten, unless the Secretary of State of the United States determines that additional derivatives are financing conflict in the Democratic Republic of the Congo or a country that shares an
internationally recognized border with the Democratic Republic of the Congo; and (2) any other mineral or its derivatives determined by the Secretary of State of the United States to be financing conflict in the Democratic Republic of the Congo
or a country that shares an internationally recognized border with the Democratic Republic of the Congo.
Section 3.25.
Life
Sciences Transaction
.
(a) None of the Life Sciences Assets or any other rights or interests being transferred by the Company or any
Non-Life Sciences Subsidiary pursuant to the Life Sciences SAPA is used in any material respect by the microelectronics and resource efficiency business of the Company and the Non-Life Sciences Subsidiaries as conducted on the date of this Agreement
and as it has been conducted since January 1, 2013.
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(b) The Seller Fundamental Representations (as defined in the Life Sciences SAPA) were true and
correct as of the date of the Life Sciences SAPA and, to the extent it has occurred, the Closing Date (as defined in the Life Sciences SAPA), other than representations and warranties specified in the Life Sciences SAPA to be made as of another
date, which representations and warranties were true and correct as of such other date, and, to the Knowledge of the Company, no facts or circumstances exist that would provide the Life Sciences Buyer with the ability to bring a successful claim
against the Company or any Non-Life Sciences Subsidiary with respect to the Seller Fundamental Representations.
(c) The portions of the
MN Facility that the Life Sciences Buyer may have non-exclusive use of, and access to, pursuant to
Section 2.3(b)
of the Transition Services Agreement relate only to common areas within the MN Facility previously used by the Life
Sciences Business and do not include any other aspects of the MN Facility or use of or access to any manufacturing assets.
(d) After
giving effect to the closing of the sale of the Life Sciences Business pursuant to the Life Sciences SAPA, including the consummation of the Restructuring Transactions, neither the Company nor any Non-Life Sciences Subsidiary has outstanding any
Indebtedness to any Life Sciences Subsidiary and, except as arising out of the Life Sciences SAPA or the Transition Services Agreement, neither the Company nor any Non-Life Sciences Subsidiary has any obligation, whether direct, indirect, accrued,
absolute, contingent or otherwise, to any Life Sciences Subsidiary or to the Life Sciences Buyer and none of the Life Sciences Subsidiaries nor the Life Sciences Buyer has any rights against the Company or any Non-Life Sciences Subsidiary, except,
in each case, for accounts receivables and accounts payables entered into the ordinary course of business and which will be settled in accordance with the Life Sciences SAPA.
Section 3.26.
No Other Representations or Warranties
. Except for the representations and warranties contained in Article IV (as
modified by the Parent Disclosure Letter) or in any certificate delivered by Parent or Merger Sub to the Company in accordance with the terms hereof, the Company acknowledges that none of Parent or Merger Sub or any other Person on behalf of Parent
or Merger Sub makes any other express or implied representation or warranty in connection with the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to the Company that, except (i) as disclosed in the reports, schedules,
forms, statements, prospectuses and other documents required to be filed with or furnished to the SEC by Parent since January 1, 2013, together with any exhibits and schedules thereto and other information incorporated therein (collectively,
the
Parent SEC Documents
) or any other report, schedule, form, statement, prospectus or other document (including exhibits and schedules thereto and other information incorporated therein) in each case filed with, or furnished to,
the SEC after January 1, 2013 and publicly available prior to the date of this Agreement (other than any risk factor disclosure or other similarly cautionary, predictive or forward-looking statements set forth in any section of any such Parent
SEC Document) or (ii) in the disclosure letter delivered by Parent to the Company at or before the execution and delivery by the Company of this Agreement (the
Parent Disclosure Letter
) (it being understood that any
information set forth in one section or subsection of the Parent Disclosure Letter shall be deemed to apply to and qualify the section or subsection of this Agreement to which it corresponds and each other section or subsection of this Agreement to
the extent that it is reasonably apparent from the face of such disclosure that such information is relevant to such other section or subsection):
Section 4.01.
Qualification, Organization, Subsidiaries, etc
.
(a) Each of Parent and Merger Sub is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction
of incorporation and has all corporate powers required to carry on its business as now conducted. Each of Parent and Merger Sub is duly qualified to do business and is in good standing in each
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jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified has not had and would not reasonably be expected to have a Parent Material
Adverse Effect. Each of Parent and its Subsidiaries is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes
such approvals, qualification or licensing necessary, except, in the case of Parent and its Subsidiaries, where the failure to be so duly approved, qualified or licensed and in good standing has not had and would not reasonably be expected to have a
Parent Material Adverse Effect.
(b) Parent has delivered or made available to the Company, prior to execution of this Agreement, true and
complete copies of the restated certificate of incorporation of Parent in effect as of the date of this Agreement (the
Parent Charter
) and the amended and restated by-laws of Parent in effect as of the date of this Agreement (the
Parent By-laws
) and true and complete copies of the restated certificate of incorporation of Merger Sub in effect as of the date of this Agreement and the by-laws of Merger Sub in effect as of the date of this Agreement.
Section 4.02.
Authority; Execution and Delivery; Enforceability
.
(a) Each of Parent and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Merger and the other transactions contemplated by this Agreement to which it is a party. Parent Board and the board of directors of Merger Sub have (i) approved the execution, delivery and performance
of this Agreement, (ii) determined that entering into this Agreement is fair to, and in the best interests of, Parent and its stockholders or Merger Sub and its stockholders, as applicable, and (iii) declared this Agreement and the Merger
advisable. No other corporate proceedings on the part of Parent are necessary to authorize or adopt this Agreement or to consummate the Merger and the other transactions contemplated by this Agreement to which it is a party (except for the filing of
the appropriate merger documents as required by the DGCL). The execution, delivery and performance by Merger Sub of this Agreement and the consummation by Merger Sub of the transactions contemplated by this Agreement are within the corporate powers
of Merger Sub and have been duly authorized by all necessary corporate action on the part of Merger Sub. Parent and Merger Sub have each duly executed and delivered this Agreement and, assuming the due authorization, execution and delivery by the
Company, this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors
rights generally and by general principles of equity.
Section 4.03.
Governmental Authorization; Non-contravention
.
(a) The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the
transactions contemplated hereby to which it is a party require no action by or in respect of, or filing with, any Governmental Entity other than (i) the filing of a certificate of merger with respect to the Merger with the Delaware Secretary
of State and appropriate documents with the relevant authorities of other states in which Parent or Merger Sub is qualified to do business, (ii) filings required under, and compliance with any applicable requirements of the HSR Act and any
other applicable Regulatory Law as set forth on
Section 4.03
of the Parent Disclosure Letter, (iii) compliance with any applicable requirements of the Securities Act, the Exchange Act and any other applicable U.S. state or federal
securities laws, and (iv) consents, approvals, Orders, authorizations, registrations, declarations, and filings the failure of which to be obtained, made or given have not had and would not reasonably be expected to have a Parent Material
Adverse Effect.
(b) The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation of the
transactions contemplated hereby to which it is a party do not and will not (i) contravene, conflict with, or result in any violation or breach of any provision of the Parent Charter or Parent By-laws or the certificate of incorporation or
by-laws of Merger Sub, (ii) assuming compliance with the matters referred to in
Section 4.03(a)
, contravene, conflict with or result in any violation or breach of any provision of any Applicable Law, (iii) require any consent
or other action by any Person under, constitute a default, or an event that, with or
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without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss
of any benefit to which Parent or any of its Subsidiaries is entitled under any provision of any Contract binding upon Parent or any of its Subsidiaries or any governmental licenses, authorizations, Permits, consents (including consents required by
Contract), approvals, variances, exemptions or Orders affecting, or relating in any way to, the assets or business of Parent and any of its Subsidiaries or (iv) result in the creation or imposition of any Lien on any asset of Parent or any of
its Subsidiaries, with such exceptions, in the case of each of clauses (ii) through (iv), as have not had and would not reasonably be expected to have a Parent Material Adverse Effect.
Section 4.04.
Absence of Litigation
. As of the date hereof, there are no Actions pending or, to the Knowledge of Parent or Merger
Sub, threatened against Parent or Merger Sub or any of their respective Subsidiaries, or any Order to which Parent or Merger Sub or any of their respective Subsidiaries is subject, except, in each case, for those that would not reasonably be
expected to have a Parent Material Adverse Effect. Neither Parent nor Merger Sub is subject to an outstanding Order that has had or would reasonably be expected to have a Parent Material Adverse Effect.
Section 4.05.
Ownership of Merger Sub
.
(a) As of the date of this Agreement, the authorized capital stock of Merger Sub consists of 100 shares of common stock, par value $0.01 per
share. All of the issued and outstanding capital stock of Merger Sub is owned beneficially and of record by Parent, free and clear of all Liens.
(b) Merger Sub was formed solely for the purpose of engaging in the transactions contemplated by this Agreement, has no assets, liabilities or
obligations of any nature other than those incident to its formation and pursuant to the transactions contemplated hereby and, prior to the Effective Time, will not have engaged in any other business activities other than those relating to the
transactions contemplated hereby.
Section 4.06.
Financing
. Parent will have available to it at the Closing, sufficient cash
to consummate the Merger and to pay the aggregate Merger Consideration to the Paying Agent and any other amounts required to be paid by Parent in connection with the consummation of the transactions contemplated hereby to which it is a party and to
pay all related fees and expenses of Parent and Merger Sub, and there is no restriction on the use of such cash for such purposes. Parent has delivered to the Company a true, complete and correct copy, including all exhibits, schedules or amendments
thereto, of the fully executed commitment letter, dated as of the date hereof, from Goldman Sachs Bank USA (the
Commitment Party
) to Parent (the
Debt Commitment Letter
), pursuant to which the Commitment Party
has committed, upon the terms and subject to the conditions set forth therein (subject to any
market flex
provisions included in the fee letter dated the date hereof referred to therein (the
Fee Letter
), a true
and complete copy of which has been delivered to the Company with fees, economic terms and other customary provisions redacted), to provide the financing set forth in the Debt Commitment Letter (the
Debt Financing
). The Debt
Commitment Letter has not been amended or modified in any manner prior to the date of this Agreement and the respective commitments contained in the Debt Commitment Letter have not been withdrawn, terminated or rescinded in any respect. Neither
Parent nor Merger Sub has entered into any agreement, side letter, contract or other arrangement relating to the financing of the payments to be made by them at the Effective Time, other than as set forth in the Debt Commitment Letter and the Fee
Letter and the engagement letter related thereto or as permitted under
Section 6.11
(complete copies of each of which have been provided to the Company, with only fee and other economic amounts redacted). The Debt Commitment Letter is in
full force and effect and represents a valid, binding and enforceable obligation of Parent and, to the knowledge of Parent and Merger Sub, a valid, binding and enforceable obligation of the Commitment Party, to provide the financing contemplated
thereby subject only to the satisfaction or waiver of the conditions precedent set forth in the Debt Commitment Letter and, in each case, subject to the qualification that such enforceability may be limited by bankruptcy, insolvency, reorganization
or other laws of general application relating to or affecting rights of creditors. Parent has fully paid (or caused to be paid) any and all commitment fees and other amounts, if any, that are due and payable on or prior to the date of this Agreement
in connection with the Debt Financing. As of the date of this Agreement, assuming the accuracy of the representations and warranties set forth in
Article III
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such that the condition set forth in
Section 7.02(a)
is satisfied, no event has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to
constitute a breach or default on the part of Parent, or, to the knowledge of Parent or Merger Sub, any other party thereto under the Debt Commitment Letter. As of the date of this Agreement, assuming the accuracy of the representations and
warranties set forth in
Article III
such that the condition set forth in
Section 7.02(a)
is satisfied, the performance by the Company of its obligations under this Agreement and the satisfaction of the other conditions set forth
in
Section 7.01
or
Section 7.02
, neither Parent nor Merger Sub has any reason to believe that Parent will be unable to satisfy on a timely basis any of the conditions to the Debt Financing to be satisfied pursuant to the Debt
Commitment Letter (subject to any market flex provisions included in the Fee Letter) on or prior to the Closing Date. There are no conditions precedent or other contingencies related to the funding of the full amount of the Debt
Financing (including pursuant to any market flex provisions included in the Fee Letter), other than the conditions precedent set forth in and contemplated by the Debt Commitment Letter and the payment of customary fees. Parent and Merger
Sub understand and acknowledge that under the terms of this Agreement, Parents and Merger Subs obligations to consummate the Merger are not in any way contingent upon or otherwise subject to Parents or Merger Subs
consummation of any financing arrangements, Parents or Merger Subs obtaining of any financing or the availability, grant, provision or extension of any financing to Parent or Merger Sub.
Section 4.07.
No Ownership of Company Common Stock
. None of Parent, Merger Sub or any of their Affiliates is or has been during
the past three years an interested stockholder of the Company as defined in Section 203 of the DGCL. None of Parent, Merger Sub or any of their controlled Affiliates beneficially owns, directly or indirectly, or is the record holder
of (or during the past three years has beneficially owned, directly or indirectly, or been the record holder of), or is (or during the past three years has been) a party to any Contract (other than this Agreement and the Confidentiality Agreement),
arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, in each case, any shares of Company Common Stock or any option, warrant or other right to acquire any shares of Company Common Stock.
Section 4.08.
Brokers Fees and Expenses
. Except for Goldman, Sachs & Co., the fees and expenses of which will be
paid by Parent or Merger Sub, no broker, investment banker, financial advisor or other person is entitled to any brokers, finders, financial advisors or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of Parent, Merger Sub or any of their respective Affiliates.
Section 4.09.
No Other Representations or Warranties
. Except for the representations and warranties contained in
Article
III
or in any certificate delivered by the Company to Parent or Merger Sub in accordance with the terms hereof (and notwithstanding the delivery or disclosure to the Company or its Representatives of any documentation, projections, estimates,
budgets or other information), Parent acknowledges that none of the Company, its Subsidiaries or any other Person on behalf of the Company makes any other express or implied representation or warranty in connection with the transactions contemplated
by this Agreement.
ARTICLE V
COVENANTS
Section 5.01.
Conduct of Business
.
(a)
Conduct of Business of the Company
. From the date of this Agreement until the earlier of the
termination of this Agreement and the Effective Time, except (i) as prohibited or required by Applicable Law, (ii) as set forth in
Section 5.01
of the Company Disclosure Letter, (iii) as otherwise required or expressly
contemplated by this Agreement, (iv) if Parent shall otherwise consent (which consent shall not be unreasonably withheld, conditioned or delayed), or (v) for any actions required to be taken pursuant to the terms of the Life Sciences SAPA
(including, without limitation, the Restructuring Transactions or pursuant to the Transition Services Agreement) or otherwise solely related to the Life Sciences Assets or the Life Sciences Liabilities, the Company shall, and
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shall cause each of its Subsidiaries to, (A) conduct its business in the ordinary course of business consistent with past practice and in compliance in all material respects with all
Applicable Laws and the requirements of all Material Contracts, (B) use its reasonable best efforts to preserve intact its business organization and business relationships (including with its suppliers, customers and Governmental Entities) and
keep available the services of its current officers and employees, (C) use its reasonable best efforts to keep in effect all material insurance policies in coverage amounts substantially similar to those in effect on the date of this Agreement,
and (D) use its reasonable best efforts to promptly notify Parent of (1) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the transactions
contemplated by this Agreement, and (2) any Action commenced or threatened in writing, relating to or involving or otherwise affecting the Company or any of its Subsidiaries that relates to the consummation of the transactions contemplated by
this Agreement;
provided
,
however
, that no action or failure to take action with respect to matters specifically addressed by any of the provisions of the next sentence shall constitute a breach under this sentence unless such action
or failure to take action would constitute a breach of such provision of the next sentence. In addition, and without limiting the generality of the foregoing and to the fullest extent permitted by Applicable Law, from the date of this Agreement
until the earlier of termination of this Agreement and the Effective Time, except (i) as set forth in
Section 5.01
of the Company Disclosure Letter, (ii) for any actions required to be taken pursuant to the terms of the Life
Sciences SAPA (including, without limitation, the Restructuring Transactions or pursuant to the Transition Services Agreement) or otherwise solely related to the Life Sciences Assets or any Life Sciences Liabilities (except as specifically provided
for below), or (iii) with Parents prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following:
(i) amend the Company Charter or the Company By-laws or amend in any material respect (or in any respect adversely impacting Parent or Merger
Sub) the comparable organizational documents of any Subsidiary of the Company, or enter into any written agreement with any of the Companys stockholders in their capacity as such;
(ii) (A) issue, sell, encumber or grant any shares of its capital stock or other equity or voting interests, or any securities or rights
convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other
equity or voting interests, except for any issuance, sale or grant (1) solely between or among the Company and its wholly owned Non-Life Sciences Subsidiaries or (2) required pursuant to the exercise or settlement of Company Stock Options,
Company Restricted Stock Awards or Company Restricted Stock Unit Awards identified in
Section 3.03(a)
as outstanding on the Capitalization Date in accordance with the terms of the applicable Company Stock Plan in effect on the
Capitalization Date or granted after the date hereof to the extent expressly permitted by this Agreement, (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any
rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests, except (x) pursuant to written commitments in effect as of the date hereof with former directors or employees in connection with the
termination of their services to the Company or any of its Subsidiaries, copies of which have been filed as exhibits to the Company SEC Documents or (y) in connection with the satisfaction of Tax withholding obligations with respect to Company
Stock Options, Company Restricted Stock Awards or Company Restricted Stock Unit Awards, acquisitions by the Company in connection with the forfeiture of such equity awards, or acquisitions by the Company in connection with the net exercise of such
Company Stock Options, or (C) split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests;
(iii) (A) in the case of the Company, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other
distribution in respect of, any shares of its capital stock, Company Securities or other equity or voting interests and (B) in the case of any Subsidiary of the Company, establish a record date for, declare, set aside for payment or pay any
dividend on, or make any other distribution in respect of, any shares of its capital stock, Company Securities or other equity or voting interests, other than, in each case with respect to any dividend or distribution solely to the Company or any
wholly owned domestic Non-Life Sciences Subsidiaries or solely to the extent provided for in the Restructuring Transactions;
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(iv) (A) incur any Indebtedness or issue or sell any debt securities or rights to acquire debt
securities, except for (1) Indebtedness solely between or among the Company and any of its wholly owned Non-Life Sciences Subsidiaries, (2) letters of credit issued in the ordinary course of business consistent with past practices, and
(3) trade credit or trade payables in the ordinary course of business consistent with past practice, or (B) make any loans, capital contributions or advances to any person outside of the ordinary course of business consistent with past
practice, other than to the Company or any wholly owned Non-Life Sciences Subsidiary of the Company;
(v) acquire, sell, lease (as
lessor), license, mortgage, sell and leaseback or otherwise subject to any Lien (other than Permitted Liens), or otherwise dispose of any Real Property or other material properties or assets, including Intellectual Property, or any material
interests therein or waive or relinquish, abandon or allow to lapse any Real Property or other material properties or assets, including Intellectual Property, other than (A) in the ordinary course of business consistent with past practice for
fair market value in an amount not to exceed $5,000,000 in the aggregate, (B) pursuant to Contracts in existence on the date of this Agreement and set forth on
Section 3.12
of the Company Disclosure Letter, or (C) with respect
to transactions (x) where the Company is the acquiring or disposing party, among the Company and one or more of the wholly owned Non-Life Sciences Subsidiaries in the ordinary course of business consistent with past practice or (y) where a
wholly owned Non-Life Sciences Subsidiary is the acquiring or disposing party, among the Company and one or more of the wholly owned Non-Life Sciences Subsidiaries or among the wholly owned Non-Life Sciences Subsidiaries;
(vi) make or authorize capital expenditures in any calendar year that, individually or in the aggregate, exceed the amounts budgeted in the
Companys current plan, which amounts are set forth in
Section 5.01(a)(vi)
of the Company Disclosure Letter, by more than 10%;
(vii) make any change in financial accounting methods, principles or practices, or elections, except insofar as may be required by a change in
GAAP or Applicable Law occurring after the date of this Agreement;
(viii) assign, transfer, lease, cancel, fail to renew or fail to
extend any Real Property Lease or Permit;
(ix) (A) commence any Action, except with respect to (1) routine matters in the ordinary
course of business and consistent with past practices or (2) in such cases where the Company reasonably determines in good faith that the failure to commence such Action would result in a material impairment of a valuable aspect of the Business
(provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Actions prior to the commencement thereof) or (B) settle or compromise, or propose to settle or compromise, any claim or Action
involving or against the Company or any of its Subsidiaries, other than, subject to
Section 6.10
, settlements or compromises involving only monetary payment by the Company or any of its Subsidiaries in an amount not to exceed $5,000,000
individually or $10,000,000 in the aggregate;
(x) abandon, encumber, convey title (in whole or in part), exclusively license or grant any
material exclusive right or other material exclusive licenses to material Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or agreements that impose material restrictions upon
the Company or any of its Affiliates with respect to material Intellectual Property owned by any third party and impair the operation of the business of the Company or any of its Affiliates, in each case, other than in the ordinary course of
business consistent with past practice;
(xi) except for amendments, terminations or non-renewals in the ordinary course of business
consistent with past practice, amend, waive any provision of, fail to enforce (in each case, in any material respect), assign or terminate any Material Contract or enter into a Contract that would reasonably be likely to (i) adversely affect
the Company, Parent or the Surviving Company in any material respect, (ii) limit or restrict the Surviving Company or any of its Affiliates from engaging or competing in any line of business or in any geographical area, other than exclusive
sales agreements entered into in the ordinary course of business consistent with past practice or (iii) be a Material Contract if entered into prior to the date hereof;
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(xii) except as required by Applicable Law, pursuant to the terms of any Company Benefit Plan in
effect on the date hereof, (i) increase the compensation of, hire or terminate any director, executive officer or other employee or independent contractor with annual compensation in excess of $100,000, other than in the ordinary course of
business consistent with past practice, or (ii) establish, amend or terminate any Company Benefit Plan (or any plan, program, arrangement or agreement that would be a Company Benefit Plan if it were in existence on the date hereof) or
Collective Bargaining Agreement or increase the benefits provided under any Company Benefit Plan;
(xiii) forgive any loans to any
employees, officers or directors of the Company, or any of their respective Affiliates;
(xiv) acquire (whether pursuant to merger, stock
or asset purchase or otherwise) in one transaction or any series of related transactions any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or any business or
division thereof), form any Subsidiary or enter into any joint venture, partnership, limited liability corporation or similar arrangement;
(xv) adopt a plan of complete or partial liquidation, dissolution, merger or conversion or resolution providing for or authorizing such a
liquidation, dissolution, merger or conversion;
(xvi) (1) except as in the ordinary course of business: (A) make or change any
material Tax election of the Company or its Subsidiaries; (B) settle or compromise any material Tax liability of the Company or any of its Subsidiaries or settle or compromise any Tax liability that could have a material effect on the Company
or its Subsidiaries in future taxable years; (C) make any material change in any method of Tax accounting; (D) file any material amendment to an income or other material Tax Return; or (E) waive or extend any statute of limitations in
respect of any material Taxes except as required by Applicable Law; or (2) fail to promptly notify Parent of any material audit, examination, investigation, written claim or other proceeding by any Governmental Entity relating to Taxes that
arises prior to the Effective Time;
(xvii) repatriate any cash, cash equivalents or other assets to the extent that such repatriation
would result in a Tax liability to the Company or any of its Subsidiaries except, in connection with the repayment of outstanding indebtedness of an amount not in excess of $60,000,000, for withholding taxes in local jurisdictions that are not
material in relation to the value of the cash, cash equivalents or other assets repatriated;
(xviii) amend, modify or waive any
provisions of the Life Sciences SAPA or the Transition Services Agreement (or otherwise alter the terms of any services or consideration to be paid therefor under the Transition Services Agreement) that would adversely impact the Parent, the
Company, or the Surviving Company in any respect;
(xix) enter into any license or sublease with the Life Sciences Buyer of the real
property leased by ATMI PACKAGING pursuant to the Lease, dated October 21, 2004, by and between West-Bloom Industrial, LLC and ATMI PACKAGING, as amended from time to time (the
MN Facility
) on terms that are inconsistent with
the terms specified in the Transition Services Agreement in any material respect and that would not reasonably be expected to materially impair the use of the MN Facility by the Company and its Subsidiaries; or
(xx) agree, commit or propose to take any of the foregoing actions.
Section 5.02.
No Solicitation by the Company; Company Board Recommendation
.
(a)
No Solicitation
. Except as expressly permitted by this
Section 5.02
, from the date of this Agreement until the earlier
of the Effective Time or the termination of this Agreement in accordance with its terms, the Company shall not, and shall cause its Subsidiaries and its and their directors and officers not to, and shall use its reasonable best efforts to cause its
and its Subsidiaries employees, accountants, consultants, legal counsel, financial advisors and agents and other representatives (collectively, with such directors and officers referred to above,
Representatives
) not to,
directly or indirectly (i) solicit, seek, initiate or knowingly facilitate or
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knowingly encourage (including by way of furnishing any non-public information) any inquiries regarding, or the making of, any submission or announcement of a proposal or offer that constitutes,
or would reasonably be expected to lead to, any Acquisition Proposal, (ii) engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other Person any non-public information in connection with
or for the purpose of encouraging or facilitating, any Acquisition Proposal or any inquiry or proposal that could reasonably be expected to lead to an Acquisition Proposal, (iii) approve, endorse, recommend, submit to stockholders or declare
advisable any Acquisition Proposal, (iv) enter into any letter of intent, term sheet, memorandum of understanding, acquisition agreement, merger agreement, option agreement or other similar agreement (other than an Acceptable Confidentiality
Agreement) (an
Alternative Acquisition Agreement
) relating to any Acquisition Proposal or modify, amend or waive any provision in any Contract contemplating or otherwise relating to an Acquisition Proposal or (v) release or
terminate or permit the release of any Person from, or termination of, or waive or modify or permit the waiver or modification of any provision of, or fail to enforce or cause not to be enforced, any confidentiality, standstill or similar agreement
to which the Company or any of its Subsidiaries is a party except to the extent that the failure to so release, terminate, waive, modify or fail to enforce would be inconsistent with the fiduciary duties of the Company Board under Applicable Law.
The Company shall, and shall cause its Subsidiaries and its and their directors and officers to, and shall use its reasonable best efforts to cause its and their respective Representatives (other than its and their directors and officers) to,
immediately cease and cause to be terminated all discussions and negotiations with any Person that may be ongoing with respect to any Acquisition Proposal. The Company shall promptly (but in no event later than forty-eight (48) hours following
the execution of the Agreement) demand that each Person that has heretofore executed a confidentiality agreement with the Company with respect to consideration of a possible Acquisition Proposal at anytime after January 1, 2013 (other than
agreements that have expired by their terms) immediately return or destroy all confidential information heretofore furnished by the Company, any of its Subsidiaries or any of its Representatives to such Person, its Subsidiaries or its
Representatives.
(b)
Discussions
. Notwithstanding anything to the contrary in
Section 5.02(a)
or any other provision
hereof, if (i) at any time prior to obtaining the Company Stockholder Approval, the Company or any of its Representatives receives a bona fide written Acquisition Proposal from any Person or group of Persons, which Acquisition Proposal did not
result from any breach of this
Section 5.02
, and (ii) in the case of the following clauses (B) and (C), the Company Board (or any committee thereof) determines in good faith, after consultation with its financial advisor and
outside legal counsel, that such bona fide written Acquisition Proposal constitutes or would reasonably be expected to lead to a Superior Proposal and that failure to take such action would be inconsistent with the directors fiduciary duties
under Applicable Law, then the Company and its Representatives may (A) contact the Person or group of Persons who has made such Acquisition Proposal in order to clarify terms for the sole purpose of the Company Board informing itself about such
Acquisition Proposal, (B) furnish, pursuant to an Acceptable Confidentiality Agreement, information (including non-public information) with respect to the Company and its Subsidiaries to the Person or group of Persons who has made such
Acquisition Proposal;
provided
, that the Company shall promptly (and in any event within 24 hours) provide or make available to Parent any non-public information concerning the Company or its Subsidiaries that is provided or made available to
any Person given such access which was not previously provided to Parent or its Representatives and (C) engage in or otherwise participate in discussions or negotiations with the Person or group of Persons making such Acquisition Proposal.
Without limiting the generality of the foregoing, the Company acknowledges and agrees that any breach of any of the restrictions set forth in this
Section 5.02
by any Representative of the Company, whether or not such Representative is
purporting to act on behalf of the Company, shall be deemed to constitute a breach of this
Section 5.02
by the Company.
(c)
Notice of Acquisition Proposals
. The Company shall promptly (and in no event later than twenty-four (24) hours after receipt) notify Parent orally and in writing after receipt by the Company or any of its Representatives of any
Acquisition Proposal, any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal or any request for non-public information relating to the Company or any of its Subsidiaries, including of the identity of the person
making the Acquisition Proposal or other request and the material terms and conditions thereof, and shall promptly (and in no event later than twenty-four (24) hours after
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receipt) provide copies to Parent of any written proposals, indications of interest, and/or draft agreements relating to such Acquisition Proposal. The Company shall keep Parent informed, on a
prompt basis, as to the status of (including changes to any material terms of, and any other material developments with respect to) such Acquisition Proposal (including by promptly (and in no event later than twenty-four (24) hours after
receipt) providing to Parent copies of any additional or revised written proposals, indications of interest, and/or draft agreements relating to such Acquisition Proposal). The Company agrees that it and its Subsidiaries will not enter into any
agreement with any person subsequent to the date of this Agreement which prohibits the Company from providing any information to Parent in accordance with this
Section 5.02
.
(d)
Adverse Recommendation Change
. Except as set forth in this
Section 5.02(d)
, the Company Board shall not
(i) (A) change, withhold, withdraw, qualify or modify, in a manner adverse to Parent (or publicly propose or resolve to change, withhold, withdraw, qualify or modify), the Company Recommendation with respect to the Merger, (B) fail to
include the Company Recommendation in the Proxy Statement, (C) approve or recommend, or publicly propose to approve or recommend to the stockholders of the Company, an Acquisition Proposal, or (D) fail to publicly reaffirm the Company
Recommendation within three (3) Business Days after Parent so requests in writing if there has been any public disclosure by a third party related to an actual Acquisition Proposal by such third party;
provided
that the Company will be
obligated to make such reaffirmation only once in response to each such actual Acquisition Proposal made by such third party; and
provided
,
further
, that if the Company Stockholders Meeting is scheduled to take place less than three
(3) Business Days after such request, the Company will reaffirm the Company Recommendation prior to such meeting), or (E) if a tender offer or exchange offer for shares of capital stock of the Company that constitutes an Acquisition
Proposal is commenced, fail to recommend against acceptance of such tender offer or exchange offer by the stockholders of the Company,
provided
that a customary stop, look and listen communication by the Company Board pursuant to
Rule 14d-9(f) of the Exchange Act shall not be prohibited within ten (10) Business Days after commencement of such tender offer or exchange offer (any of the foregoing, an
Adverse Recommendation Change
) or
(ii) authorize, adopt or approve or propose to authorize, adopt or approve, an Acquisition Proposal, or cause or permit the Company or any of its Subsidiaries to enter into any Alternative Acquisition Agreement. Notwithstanding anything herein
to the contrary, at any time prior to the Company Stockholders Meeting, the Company Board may (I) effect an Adverse Recommendation Change in response to an Intervening Event, if and only if the Company Board has determined in good faith, after
consultation with outside legal counsel that the failure to take such action would be inconsistent with the directors fiduciary duties under Applicable Law and (II) if the Company receives an Acquisition Proposal that the Company Board
determines in good faith constitutes a Superior Proposal (after consultation with its financial advisors and outside legal counsel), authorize, adopt, or approve such Superior Proposal and cause or permit the Company to enter into an Alternative
Acquisition Agreement with respect to such Superior Proposal;
provided
,
however
, that the Company Board may only take the actions described in (x) clause (II) if the Company terminates this Agreement pursuant to
Section 8.01(d)
concurrently with entering into such Alternative Acquisition Agreement and pays the applicable Termination Fee in compliance with
Section 8.03(b)(i)
and (y) clauses (I) or (II) if:
(i) the Company has provided prior written notice to Parent of its or the Company Boards intention to take such actions at least three
(3) Business Days in advance of taking such action, which notice shall specify (x) in the case of a Superior Proposal, the material terms of the Superior Proposal and shall include a copy of the relevant proposed transaction agreements
with, and the identity of, the Person making the Acquisition Proposal, or (y) in cases not involving a Superior Proposal, the material circumstances giving rise to the Adverse Recommendation Change;
(ii) after providing such notice and prior to taking such actions, the Company shall have, and shall have caused its Representatives to,
negotiate with Parent in good faith (to the extent Parent desires to negotiate) during such three (3) Business Day period to make such adjustments in the terms and conditions of this Agreement as would permit the Company or the Company Board
not to take such actions;
provided
, that any material change to the terms of such Superior Proposal or to the facts and circumstances relating to such Intervening Event shall require a new notice including the details required by the notice
described in clause (i) above and the Company
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shall be required to comply again with the requirements of this
Section 5.02(d)(y)
with respect to each such material change;
provided
,
further
that with respect to
each subsequent written notice related to a material change references to the three (3) Business Day period above shall be deemed to be references to a two (2) Business Day period; and
(iii) the Company Board shall have considered in good faith any changes to this Agreement or other arrangements that may be offered in writing
by Parent by 5:00 PM Eastern Standard Time on the third (3rd) Business Day of such three (3) Business Day period (or the last day of any applicable extension pursuant to clause (ii) above) and shall have determined in good faith
(A) with respect to the actions described in clause (I) after consultation with outside legal counsel, that it would continue to be inconsistent with the directors fiduciary duties under Applicable Law not to effect the Adverse
Recommendation Change and (B) with respect to the actions described in clause (II), after consultation with outside counsel and its financial advisors, that the Acquisition Proposal received by the Company would continue to constitute a
Superior Proposal, in each case, even if such changes offered in writing by Parent were given effect.
The Company shall be required to
comply with the obligations under the foregoing clauses (ii) and (iii) with respect to each Superior Proposal it receives or any Intervening Event the Company Board identifies.
(e)
Disclosure Obligations
. Nothing contained in this Agreement shall prevent the Company or the Company Board from issuing a
stop, look and listen communication pursuant to Rule 14d-9(f) under the Exchange Act or complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to an Acquisition Proposal or from making any disclosure to the
Companys stockholders if the Company Board (after consultation with outside legal counsel) concludes that its failure to do so would be inconsistent with its fiduciary duties under Applicable Law;
provided
that any Adverse
Recommendation Change may only be made in accordance with
Section 5.02(d)
. For the avoidance of doubt, a factually accurate public statement that describes the Companys receipt of an Acquisition Proposal and the operation of this
Agreement with respect thereto (without including a reaffirmation) shall not be deemed an Adverse Recommendation Change.
(f) For purposes
of this Agreement:
(i)
Acquisition Proposal
means any proposal or offer from any Person or group of Persons (other than
Parent or Merger Sub) providing for (a) any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of (1) 20% or more (based on the fair market value, as determined in good faith by the
Company Board (or any committee thereof)) of assets (including capital stock of the Companys Subsidiaries) or of the consolidated revenues or net income of the Company and its Subsidiaries, taken as a whole determined after giving effect to
the completion of the transactions contemplated by the Life Sciences SAPA, or (2) shares or other equity securities of the Company which together with any other shares or other equity securities of the Company beneficially owned by such person
or group, would equal 20% or more of aggregate voting power of the Company, (b) any tender offer or exchange offer that, if consummated, would result in any Person or group owning, directly or indirectly, 20% or more of the aggregate voting
power of the Company, (c) any merger, consolidation, business combination, binding share exchange or similar transaction involving the Company pursuant to which any Person or group (or the shareholders of any Person) would own, directly or
indirectly, 20% or more of the aggregate voting power of the Company or of the surviving entity in a merger or the resulting direct or indirect parent of the Company or such surviving entity, or (d) any recapitalization transaction involving
the Company, other than, in each case, the transactions contemplated by this Agreement or any offer or proposal solely and exclusively with respect to the Life Sciences Assets and the Life Sciences Liabilities, or any portion thereof.
(ii)
Superior Proposal
means any unsolicited bona fide written Acquisition Proposal (with all references to 20%
in the definition of Acquisition Proposal being deemed to be references to 50%) which the Company Board (or any committee thereof) determines in good faith (after consultation with its financial advisor and outside legal counsel)
(x) is reasonably likely to be consummated in accordance with its terms, and (y) if consummated, would be more favorable from a financial point of view to the holders of Company Common
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Stock than the Merger, in each case, taking into account all financial, legal, regulatory and other aspects of such Acquisition Proposal and of this Agreement (including any changes to the terms
of this Agreement proposed by Parent, any fees to be paid by the Company pursuant to
Section 8.03
and to the likelihood of consummating such Acquisition Proposal without undue delay in accordance with its terms).
(iii)
Intervening Event
means a material event, development or change in circumstances with respect to the Company
occurring or coming to the attention of the Companys Board after the date of this Agreement and prior to obtaining the Company Stockholder Approval for the Merger, and which was not known, and could not reasonably be expected to have known or
foreseen, by the Company Board as of or prior to the date of this Agreement; provided, however, that in no event shall (A) the receipt, existence or terms of an Acquisition Proposal, (B) any events, developments or change in circumstances
of Parent, (C) the status of the Merger under the HSR Act or of any of the Required Antitrust Approvals, (D) any announcements, approvals, issuances, or regulations of any Governmental Entity, constitute an Intervening Event, or
(E) any matter relating to the foregoing or consequence of the foregoing, constitute an Intervening Event.
Section 5.03.
Sale of the Life Sciences Business
. The Company shall, and shall cause each of its Subsidiaries to, use its and their reasonable best efforts to consummate the Closing (as defined in the Life Sciences SAPA).
ARTICLE VI
ADDITIONAL
AGREEMENTS
Section 6.01.
Preparation and Mailing of the Proxy Statement
.
(a) As promptly as reasonably practicable after the execution of this Agreement, and in any event within fifteen (15) Business Days of
the execution of this Agreement, the Company shall prepare and cause to be filed with the SEC a proxy statement relating to the matters to be submitted to the stockholders of the Company at the Company Stockholders Meeting (such proxy statement, and
any amendments or supplements thereto, the
Proxy Statement
). The Company agrees that it will cause the Proxy Statement to comply as to form in all material respects with the applicable provisions of the Exchange Act and the rules
and regulations promulgated thereunder. The Company and Parent agree that none of the information supplied by the Company or Parent, respectively, or any of their respective Subsidiaries or Representatives, for inclusion or incorporation by
reference in the Proxy Statement will, at the time it is first published or mailed to the stockholders of the Company, at the time of any amendment thereof or supplement thereto and at the time of the Company Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company will use
its reasonable best efforts to have the Proxy Statement cleared by the SEC as promptly as reasonably practicable after such filing. Subject to
Section 5.02
, the Company Board shall make the Company Recommendation to the Companys
stockholders and shall include such recommendation in the Proxy Statement. Parent shall furnish all information concerning Parent and its Affiliates to the Company, and provide such other assistance, as may be reasonably requested by the Company to
be included therein and shall otherwise reasonably assist and cooperate with the Company in the preparation of the Proxy Statement and the resolution of any comments received from the SEC. Each of the Company, Parent and Merger Sub shall promptly
correct any information provided by it for use in the Proxy Statement if and to the extent such information shall have become false or misleading in any material respect. The Company shall promptly notify Parent upon the receipt of any comments from
the SEC and of any request by the SEC for amendments or supplements to the Proxy Statement and shall promptly provide Parent with copies of all correspondence between the Company and its Representatives, on the one hand, and the SEC and the staff of
the SEC, on the other hand. The Company shall use its reasonable best efforts to respond as promptly as reasonably practicable to any comments received from the SEC concerning the Proxy Statement and to resolve as promptly as practicable such
comments with the SEC. Prior to filing or mailing the Proxy Statement (or any amendment or
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supplement thereto) or responding to any comments, the Company shall provide Parent a reasonable opportunity to review and comment on such document or response or to participate in any meeting
(telephonic or otherwise) with the SEC. The Company agrees that the Company shall use its reasonable best efforts to cause the Proxy Statement to be disseminated to its stockholders as promptly as reasonably practicable after the resolution of any
such comments.
(b) Subject to
Section 6.01(a)
, and notwithstanding any Adverse Recommendation Change, the Company shall take
all necessary actions in accordance with Applicable Law, the Company Charter, the Company By-laws and the rules of the NASDAQ to duly call, give notice of, convene and hold the Company Stockholders Meeting for the purpose of obtaining the Company
Stockholder Approval, as soon as reasonably practicable after the SEC confirms that it has no further comments on the Proxy Statement. Subject to
Section 5.02
, the Company shall use its reasonable best efforts to obtain the Company
Stockholder Approval, including engaging a proxy solicitation firm reasonably acceptable to Parent to assist with proxy solicitations. Notwithstanding any provision of this Agreement to the contrary, the Company may not adjourn, recess or postpone
the Company Stockholders Meeting except (i) to the extent necessary to ensure that any supplement or amendment to the Proxy Statement required by Applicable Law is provided to the stockholders of the Company within a reasonable amount of time
in advance of the Company Stockholders Meeting or (ii) if as of the time for which the Company Stockholders Meeting is originally scheduled (as set forth in the Proxy Statement) there are insufficient shares of Company Common Stock represented
(either in person or by proxy) to constitute a quorum necessary to conduct the business of the Company Stockholders Meeting or to solicit additional proxies and votes in favor of adoption of this Agreement if sufficient votes to constitute the
Company Stockholder Approval have not been obtained.
(c) If prior to the Effective Time any event occurs with respect to Parent or any of
its Subsidiaries, or any change occurs with respect to other information supplied by Parent for inclusion in the Proxy Statement, which is required to be described in an amendment of, or a supplement to, the Proxy Statement, Parent shall promptly
notify the Company of such event, and Parent and the Company shall cooperate in the prompt filing with the SEC of any necessary amendment or supplement to the Proxy Statement and, as required by Applicable Law, in disseminating the information
contained in such amendment or supplement to the Companys stockholders. Nothing in this
Section 6.01(c)
shall limit the obligations of any party under
Section 6.01(a)
.
(d) The Company agrees that, unless this Agreement is terminated in accordance with its terms prior thereto, its obligations to hold the
Company Stockholders Meeting pursuant to this
Section 6.01
shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Acquisition Proposal or by the making of any Adverse
Recommendation Change by the Company Board;
provided
,
however
, that (x) if the public announcement of an Adverse Recommendation Change or the delivery of notice by the Company to Parent pursuant to
Section 5.02(d)(i)
occurs less than ten (10) days prior to the Company Stockholders Meeting, the Company shall be entitled to postpone the Company Stockholders Meeting to a date not more than ten (10) days after the later of such event; and (y) the
Company shall not submit to the vote of its stockholders any Acquisition Proposal.
Section 6.02.
Access to Information;
Confidentiality
. Subject to Applicable Law and as further set forth on
Section 6.02
of the Company Disclosure Letter, the Company shall, and shall cause each of its Subsidiaries to, afford the Parent and the Parents
Representatives reasonable access, upon reasonable advance notice and during normal business hours, during the period prior to the Effective Time, to all their respective properties, assets, books, contracts, commitments, plans, Tax records and Tax
Returns, work papers, personnel, Representatives and records and, during such period, the Company shall, and shall cause its Subsidiaries to, furnish promptly to the Parent (a) to the extent not publicly available, a copy of each report,
schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws or commission actions and (b) all other information concerning its business, properties and
personnel as may be reasonably requested, including all information regarding the Life Sciences SAPA (including, without limitation, with respect to the Restructuring Transactions or the Transition Services Agreement) and all information necessary
to enable Parent to prepare the financial statements and related disclosures required to be included in
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Parents Current Report on Form 8-K following the Closing (in each case, in a manner so as to not interfere in any material respect with the normal business operations of the Company its
Subsidiaries);
provided
,
however
, that the Company shall not be required to permit such access or make such disclosure, to the extent that such disclosure or access would reasonably be likely to (i) violate the terms of any
confidentiality agreement or other Contract with a third-party (
provided
that the Company shall use its commercially reasonable efforts to obtain the consent of any such agreements counterparty to such inspection or disclosure),
(ii) result in the loss of any attorney-client privilege (provided that the Company will provide Parent with appropriate information regarding the factual basis underlying any circumstances that resulted in the preparation of such privileged
analysis), or (iii) violate any Applicable Law. Notwithstanding anything contained in this Agreement to the contrary, the Company shall not be required to provide any access or make any disclosure to Parent pursuant to this
Section 6.02
to the extent such access or information is reasonably pertinent to a litigation where the Company or any of its Affiliates, on the one hand, and Parent or any of its Affiliates, on the other hand, are adverse parties. All
information exchanged pursuant to this
Section 6.02
shall be subject to the confidentiality agreement, dated as of September 24, 2013, between Parent and the Company (the
Confidentiality Agreement
). Subject to the
limitations and restrictions set forth in, and without expanding the obligations of the Parties under, this
Section 6.02
, the Company shall, and shall cause its Subsidiaries to, reasonably cooperate with Parent and its Subsidiaries to
facilitate the planning of the integration of the parties and their respective businesses after the Closing Date.
Section 6.03.
Reasonable Best Efforts
.
(a) Subject to the terms and conditions of this Agreement, each of the parties hereto shall cooperate
with the other parties and use (and shall cause their respective Subsidiaries to use) their respective reasonable best efforts (unless, with respect to any action, another standard of performance is expressly provided for herein) to promptly
(i) take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other parties hereto in doing, all things reasonably necessary, proper or advisable to cause the conditions to Closing to be satisfied
as promptly as reasonably practicable and to consummate and make effective, in the most expeditious manner reasonably practicable, the Merger and the other transactions contemplated by this Agreement, including preparing and filing promptly and
fully all documentation to effect all necessary filings, notices, petitions, statements, registrations, submissions of information, applications and other documents, (ii) obtain all approvals, consents, registrations, waivers, Permits,
authorizations, orders and other confirmations from any Governmental Entity necessary, proper or advisable to consummate the transactions contemplated by this Agreement, (iii) execute and deliver any additional instruments necessary to
consummate the Merger and the other transactions contemplated by this Agreement and (iv) defend or contest in good faith any Action brought by a third party that could otherwise prevent or impede, interfere with, hinder or delay in any material
respect the consummation of the transactions contemplated by this Agreement, in the case of each of clauses (i) through (iv), other than with respect to filings, notices, petitions, statements, registrations, submissions of information,
applications and other documents, approvals, consents, registrations, Permits, authorizations and other confirmations relating to Regulatory Laws, which are the subject of
Section 6.03(c)
and
Section 6.03(d)
.
(b) In furtherance and not in limitation of the foregoing, the Company and Parent shall each use its reasonable best efforts to (i) take
all action necessary to ensure that no fair price, moratorium, control share acquisition or other similar antitakeover statute or similar statute or regulation (collectively,
Takeover Laws
) is
or becomes applicable to any of the transactions contemplated by this Agreement and refrain from taking any actions that would cause the applicability of such Takeover Laws and (ii) if the restrictions of any Takeover Law become applicable to
any of the transactions contemplated by this Agreement, take all action necessary to ensure that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated by this Agreement and otherwise
lawfully minimize the effect of such Takeover Law on the transactions contemplated hereby.
(c) Each of the parties hereto agrees to
(i) make an appropriate filing of a Notification and Report Form pursuant to the HSR Act and make any filing required under any other applicable Regulatory Law with respect to the transactions contemplated by this Agreement as promptly as
reasonably practicable and advisable following
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the date hereof (which, in the case of the Notification and Report Form pursuant to the HSR Act, shall be no later than ten (10) Business Days from the date hereof and, in the case of all
other filings under any other Regulatory Law, shall be as promptly as reasonably practicable following the date hereof, or, in each case, as otherwise agreed to by the Company and Parent), (ii) supply as promptly as practicable and advisable
any additional information and documentary material that may be requested pursuant to the HSR Act or any other applicable Regulatory Law and (iii) use its reasonable best efforts to cause the expiration or termination of the applicable waiting
periods under the HSR Act and any other applicable Regulatory Laws and to obtain all consents under any Regulatory Laws that may be required by the FTC, DOJ or any Governmental Entity with competent jurisdiction, so as to enable the parties hereto
to consummate the Merger and the other transactions contemplated hereby. In furtherance and not in limitation of the foregoing, each party hereto shall use its reasonable best efforts to resolve objections, if any, as may be asserted with respect to
the transactions contemplated by this Agreement under any Regulatory Law, including (A) defending any Action challenging this Agreement or the consummation of the transactions contemplated hereby to which it is a party (including seeking to
have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed), (B) executing settlements, undertakings, consent decrees, stipulations or other agreements with any Governmental Entity or with
any other Person, (C) terminating existing relationships, contractual rights or obligations of the Company or Parent or their respective Subsidiaries and (D) effectuating any other change or restructuring of the Company or Parent or their
respective Subsidiaries, in each case, to the extent necessary to obtain all consents that may be required under the HSR Act or any other applicable Regulatory Laws or to resolve any objections asserted by any Governmental Entity with competent
jurisdiction. Nothing in this
Section 6.03
shall (W) require Parent or Merger Sub to sell, divest, convey or hold separate or otherwise take any other action (and the Company will not undertake any such action without Parents
prior written consent) that limits Parents and its Subsidiaries freedom of action with respect to, or their ability to retain, particular products, assets or businesses of Parent or the Company or their respective Subsidiaries, or agree
to take any such action, other than, solely in respect of products, assets or businesses of the Company (and not, for the avoidance of doubt, any products, assets, or businesses of Parent), only to the extent that such action would not reasonably be
expected to impact in any material respect the expected benefits to Parent and its Subsidiaries, taken as a whole, of the transactions contemplated hereby, (X) require Parent, the Company or their respective Subsidiaries to take or agree to
take any action with respect to its business or operations unless the effectiveness of such agreement or action is conditioned upon the Closing, (Y) require any of the parties to this Agreement to compensate any third party, commence or
participate in litigation or offer or grant any accommodation (financial or otherwise) to any third party to obtain any such consent or approval or (Z) permit the Company or any of its Subsidiaries to take or agree to any action or other matter
pursuant to this
Section 6.03
referred to in clauses (B)-(D) or (X) above without Parents prior written consent, not to be unreasonably withheld. Other than with respect to the payment of all filing fees in connection
therewith, which will be borne solely by Parent, the parties shall each bear their own costs and expenses of preparing such notifications and filings, including the fees of their respective legal counsel.
(d) Each of the parties hereto shall use its reasonable best efforts to (i) cooperate in all respects with each other in connection with
any filing or submission with a Governmental Entity by any Person in connection with the transactions contemplated by this Agreement and in connection with any investigation or other inquiry by or before a Governmental Entity relating to the
transactions contemplated by this Agreement, including any proceeding initiated by a private party, (ii) keep the other parties hereto informed in all material respects and on a reasonably timely basis of any communication received by such
party from, or given by such party to, the FTC, the DOJ or any other Governmental Entity and of any communication received or given in connection with any proceeding by a private party, in each case regarding any of the transactions contemplated by
this Agreement, (iii) subject to Applicable Laws relating to the exchange of information, and to the extent reasonably practicable, consult with the other parties hereto with respect to information relating to the other parties hereto and their
respective Subsidiaries, as the case may be, that appears in any filing made with, or written materials submitted to, any Governmental Entity, or in any filings or submissions in connection with any proceeding by a private party, in each case
regarding any of the transactions contemplated hereby (it being understood that certain documents including those submitted under Item 4(c) or 4(d) of the Notification and Report Form pursuant to the HSR Act may be subject to reasonable
redactions), and (iv) to the extent practicable and permitted by the FTC,
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the DOJ or such other applicable Governmental Entity or private party, as the case may be, give the other parties hereto the opportunity to attend and participate in any meetings and conferences.
Any party may, as it deems advisable and necessary, reasonably designate any competitively sensitive material provided to the other parties under this
Section 6.03(d)
as outside counsel only. Such materials and the
information contained therein shall be given only to the outside legal counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, or directors of the recipient, unless express written permission is obtained in
advance from the source of the materials.
Section 6.04.
Indemnification, Exculpation and Insurance
.
(a) Parent agrees that all rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring
at or prior to the Effective Time now existing in favor of the current or former directors, officers or employees of the Company and its Subsidiaries as provided in their respective certificates of incorporation or by-laws (or comparable
organizational documents) and any indemnification or other similar agreements of the Company or any of its Subsidiaries, in each case as in effect on the date of this Agreement, shall continue in full force and effect in accordance with their terms.
From and after the Effective Time, to the fullest extent permitted by Applicable Law (including to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the
to which a corporation may indemnify its officers and directors) the Surviving Company agrees that it will indemnify and hold harmless each individual who is as of the date of this Agreement, or who becomes prior to the Effective Time, a director or
officer of the Company or any of its Subsidiaries or who is as of the date of this Agreement, or who thereafter commences prior to the Effective Time, serving at the request of the Company or any of its Subsidiaries as a director or officer of
another Person (the
Company Indemnified Parties
), against all claims, losses, liabilities, damages, judgments, inquiries, fines, amounts paid in settlement and fees, costs and expenses, including attorneys fees and
disbursements, incurred in connection with any actual or threatened Action, whether civil, criminal, administrative, regulatory or investigative (including with respect to matters existing or occurring or alleged to occur at or prior to the
Effective Time (including this Agreement and the transactions and actions contemplated hereby)), arising out of or pertaining to the fact that the Company Indemnified Party is or was an officer or director of the Company or any of its Subsidiaries
or is or was serving at the request of the Company or any of its Subsidiaries as a director or officer of another Person, whether asserted or claimed prior to, at or after the Effective Time. In the event of any such Action, (x) each Company
Indemnified Party will be entitled to advancement of expenses incurred in the defense of any such Action from the Surviving Company within ten (10) Business Days of receipt by the Surviving Company from the Company Indemnified Party of a
request therefor;
provided
that any Person to whom expenses are advanced provides an undertaking, if and only to the extent required by the DGCL or the Surviving Companys certificate of incorporation or by-laws, to repay such advances
if it is ultimately determined by final adjudication that such Person is not entitled to indemnification and (y) the Surviving Company shall cooperate in the defense of any such matter.
(b) For a period of six (6) years following the Effective Time, the Surviving Company shall, and Parent shall cause the Surviving Company
to, maintain in effect the provisions in its certificate of incorporation and by-laws to the extent they provide for indemnification, advancement and reimbursement of expenses and exculpation of each Company Indemnified Party, as applicable, with
respect to facts or circumstances occurring at or prior to the Effective Time, on the same basis as set forth in the Company Charter and Company By-laws in effect on the date of this Agreement, to the fullest extent permitted from time to time under
Applicable Law, which provisions shall not be amended except as required by Applicable Law or except to make changes permitted by Applicable Law that would enlarge the scope of the Company Indemnified Parties indemnification rights thereunder.
(c) In the event that Parent, the Surviving Company or any of its successors or assigns (i) consolidates with or merges into any
other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, and in
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each such case, Parent or the Surviving Company, as applicable, shall cause proper provision to be made so that the successors and assigns of Parent or the Surviving Company, as applicable,
assume the obligations set forth in this
Section 6.04
.
(d) For a period of six (6) years from and after the Effective
Time, the Surviving Company shall either cause to be maintained in effect the current policies of directors and officers liability insurance and fiduciary liability insurance maintained by the Company or its Subsidiaries or provide
substitute policies for the Company and its current and former directors and officers who are currently covered by the directors and officers and fiduciary liability insurance coverage currently maintained by the Company in either case,
of not less than the existing coverage and having other terms not less favorable to the insured persons than the directors and officers liability insurance and fiduciary liability insurance coverage currently maintained by the Company
with respect to claims arising from facts or events that occurred on or before the Effective Time (with insurance carriers having the same or better ratings with respect to directors and officers liability insurance and fiduciary
liability insurance as the Companys carrier as of the date of this Agreement), except that in no event shall the Surviving Company be required to pay with respect to such insurance policies in respect of any one policy year more than 300% of
the aggregate annual premium most recently paid by the Company prior to the date of this Agreement (the
Maximum Amount
), and if the Surviving Company is unable to obtain the insurance required by this
Section 6.04
it
shall obtain as much comparable insurance as possible for the years within such six (6)-year period for an annual premium equal to the Maximum Amount, in respect of each policy year within such period. In lieu of such insurance, prior to the Closing
Date the Company may, at its option (following reasonable consultation with Parent), purchase a tail directors and officers liability insurance policy and fiduciary liability insurance policy for the Company and its current
and former directors and officers who are currently covered by the directors and officers and fiduciary liability insurance coverage currently maintained by the Company, such tail to provide coverage in an amount not less than the
existing coverage and to have other terms not less favorable to the insured persons than the directors and officers liability insurance and fiduciary liability insurance coverage currently maintained by the Company with respect to claims
arising from facts or events that occurred on or before the Effective Time;
provided
that in no event shall the cost of any such tail policy in respect of any one policy year exceed the Maximum Amount. In the event the Company purchases such
tail coverage, the Surviving Company shall cease to have any obligations under the first sentence of this
Section 6.04(d)
. The Surviving Company shall maintain such policies in full force and effect, and continue to honor the obligations
thereunder.
(e) From and after the Effective Time, Parent shall guarantee the prompt payment of the obligations of the Surviving Company
and its Subsidiaries under this
Section 6.04
.
(f) The provisions of this
Section 6.04
shall survive consummation
of the Merger, (ii) are intended to be for the benefit of, and will be enforceable by, each indemnified or insured party (including the Company Indemnified Parties), his or her heirs and his or her representatives, and (iii) are in
addition to, and not in substitution for, any other rights to indemnification or contribution that any such Person may have by contract or otherwise.
Section 6.05.
Section 16 Matters
. Prior to the Effective Time, the Company shall take such steps as may be reasonably
necessary or advisable to cause dispositions of Company equity securities (including derivative securities) pursuant to the transactions contemplated by this Agreement by each individual who is subject to Section 16 of the Exchange Act to be
exempt under Rule 16b-3 promulgated under the Exchange Act.
Section 6.06.
Public Announcements
. Parent and the Company shall
consult with each other before issuing, and give each other the reasonable opportunity to review and comment upon, any press release or other public statements with respect to the transactions contemplated by this Agreement, and shall not issue any
such press release or make any such public statement prior to such consultation, except as may be required by Applicable Law, court process or the rules and regulations of any national securities exchange or national securities quotation system;
provided
,
however
, that the foregoing shall not apply to any release or other public statement
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to the extent containing information that is consistent with the joint press release referred to below or any other release or public statement previously issued or made in accordance with this
Section 6.06
;
provided
,
further
, that the Company need not consult Parent in connection with the matters referred to in and in accordance with
Section 5.02
, including any press release or public statement to be
issued or made in order to effect an Adverse Recommendation Change made pursuant to and in accordance with
Section 5.02
, and Parent need not consult the Company in connection with any matters referred to in
Section 5.02
. The
parties hereto agree that the initial press release to be issued with respect to the transactions contemplated hereby following execution of this Agreement will be a joint press release and shall be in a form agreed to by Parent and the Company.
Except as expressly contemplated by this Agreement (including the first sentence of this Section) or as required by Applicable Law, no party shall issue any press release or make any public statement regarding the other party or the other
partys operations, directors, officers or employees without obtaining the other partys prior written consent. In addition, the parties shall coordinate with respect to communications with employees, suppliers, customers, agents and other
stakeholders regarding post-Closing transition, integration and related matters.
Section 6.07.
Employee Matters
.
(a) Until December 31, 2014, Parent shall, or shall cause its Subsidiaries to, provide each employee of the Company or any of its
Subsidiaries who remains in the employment of Parent or any of its Subsidiaries following the Effective Time (a
Continuing Employee
) with: (i) at least the same base salary or base wages and annual cash bonus opportunities as
were provided to such individual immediately prior to the Closing Date and (ii) employee benefits (other than equity compensation) that are no less favorable in the aggregate than those provided under the applicable Company Benefit Plans in
which such Continuing Employee participated immediately prior to the Closing Date. From January 1, 2015 through at least the one-year anniversary of the Closing, Parent shall, or shall cause its Subsidiaries to, provide each Continuing Employee
with base salary or base wages, annual cash bonus opportunities and employee benefits (other than equity compensation) that are no less favorable than the base salary or base wages and annual cash bonus opportunities and that are no less favorable
in the aggregate than the employee benefits (other than equity compensation) provided to similarly situated employees of Parent or its Subsidiaries.
(b) Notwithstanding anything to the contrary in this Agreement, with respect to any Continuing Employee who is laid off, made redundant or
whose employment is otherwise terminated without cause or for good reason (if applicable) (in each case, as defined in the severance applicable plan or program) during the one-year period following the Closing Date, Parent shall, or shall cause its
Subsidiaries to honor the terms of the Companys severance plans and programs as disclosed on
Section 6.07(b)
of the Company Disclosure Letter with respect to such Continuing Employee.
(c) Parent shall, or shall cause its Subsidiaries to, credit Continuing Employees for service earned on and prior to the Effective Time with
the Company and its Affiliates, or any of their respective predecessors, to the extent such service was credited by the Company or its Subsidiaries under the corresponding Company Benefit Plan prior to Closing, in addition to service earned with
Parent and its Subsidiaries on or after the Closing Date, (i) for purposes of eligibility, vesting or the calculation of vacation, sick days, severance, layoff and/or similar benefits (but not for purposes of defined benefit pension benefit
accruals) under any retirement or other employee benefit plan, program or arrangement of Parent or any of its Subsidiaries for the benefit of the Continuing Employees on or after the Closing Date and (ii) for such additional purposes as may be
required by Applicable Law;
provided
that nothing herein shall result in a duplication of benefits with respect to Continuing Employees.
(d) Parent shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to waive limitations on benefits relating to
any pre-existing conditions of Continuing Employees and their eligible spouses and dependents (to the extent such limitations were waived under a corresponding Company Benefit Plan prior to the Closing). Parent shall, and shall cause its
Subsidiaries to, use reasonable best efforts to recognize for purposes of annual deductible and out-of-pocket limits under their health plans applicable to Continuing Employees,
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deductible and out-of-pocket expenses paid by Continuing Employees and their respective spouses and dependents the Companys or any of its Affiliates health plans in the calendar year
in which the applicable Effective Time occurs.
(e) If requested by Parent at least ten (10) days prior to the Effective Time, the
Company shall terminate any and all Company Benefit Plans intended to qualify under Section 401(a) of the Code that include a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code, effective not
later than the day immediately preceding the Closing Date. In the event that Parent requests that such 401(k) plan(s) be terminated, the Company shall provide Parent with evidence reasonably satisfactory to Parent that such 401(k) plan(s) have been
terminated pursuant to the methodology set forth in the applicable plan not later than the day immediately preceding the Closing Date.
(f) Without otherwise limiting the generality of
Section 9.07
, the provisions of this
Section 6.07
are for the sole
benefit of the parties to this Agreement and nothing herein, expressed or implied, is intended or shall be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Continuing Employee or other current or former
employee of the Company or any of its Affiliates), other than the parties hereto and their respective permitted successors and assigns, any legal or equitable or other rights or remedies (including with respect to the matters provided for in this
Section 6.07
) under or by reason of any provision of this Agreement. Nothing in this
Section 6.07
shall amend, or be deemed to amend (or, except as otherwise provided in this
Section 6.07
, prevent the amendment or
termination of) any Company Benefit Plan or any other employee benefit plan, agreement or other arrangement. Notwithstanding anything to the contrary in
Section 6.07(a)
, Parent shall honor the plans and agreements set forth on
Section 6.07(f)
of the Company Disclosure Letter in accordance with their terms. Parent shall have no obligation to continue to employ or retain the services of any Continuing Employee for any period of time following the Closing.
Section 6.08.
Merger Sub; Parent Subsidiaries; Company Subsidiaries
. Parent shall cause each of Merger Sub and any other
applicable Subsidiary of Parent to comply with and perform all of its obligations under or relating to this Agreement, including in the case of Merger Sub to consummate the Merger on the terms and conditions set forth in this Agreement. The Company
shall cause each of its Subsidiaries to comply with and perform all of its obligations under or relating to this Agreement.
Section 6.09.
Stock Exchange De-Listing
. Parent shall cause the Companys securities to be de-listed from the NASDAQ and
de-registered under the Exchange Act as soon as practicable following the Effective Time.
Section 6.10.
Stockholder
Litigation
. The Company shall give Parent reasonable opportunity to participate in the defense (at Parents sole cost and subject to a joint defense agreement) of any stockholder litigation brought against the Company or its directors or
officers relating to the transactions contemplated by this Agreement. Without limiting the preceding sentence, the Company shall give Parent the right to review and comment on all material filings or responses to be made by the Company in connection
with any such litigation, and the right to consult on the settlement with respect to such litigation, and the Company will in good faith take such comments into account, and, no such settlement shall be agreed to without Parents prior written
consent (which shall not be unreasonably withheld, delayed or conditioned). The Company shall promptly notify Parent of any such litigation and shall keep Parent reasonably and promptly informed with respect to the status thereof.
Section 6.11.
Financing
.
(a) Subject to the terms of this Agreement (including the rights of Parent and Merger Sub in this
Section 6.11(a)
to obtain
Alternative Financing), Parent and Merger Sub shall use their reasonable best efforts to take, or cause to be taken, all actions and use their reasonable best efforts to do, or cause to be done, all things necessary or advisable to arrange the Debt
Financing and to consummate the Debt Financing at the Effective Time, including using reasonable best efforts to (i) maintain in effect the Debt Commitment Letter; (ii) satisfy on a timely basis all of the conditions precedent set forth in
the Debt Commitment Letter; (iii) negotiate, execute and deliver definitive documentation for the Debt Financing that reflects the terms contained in the Debt
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Commitment Letter (subject to any market flex provisions included in the Fee Letter or any fee letter relating to an Alternative Financing); and (iv) in the event that the
conditions set forth in
Section 7.01
and
Section 7.02
and the conditions precedent set forth in the Debt Commitment Letter have been satisfied or, upon funding would be satisfied, cause the financing providers to fund the
Debt Financing in accordance with the terms of the Debt Commitment Letter. Parent and Merger Sub shall have the right from time to time to amend, restate, replace, supplement or otherwise modify, or waive any of its rights under, the Debt Commitment
Letter and/or substitute other debt or equity financing for all or any portion of the Debt Financing from the same and/or alternative financing sources (together with any alternative financing as described in clause (b) below, each an
Alternative Financing
);
provided
, that any such amendment, restatement, supplement, replacement or other modification to or waiver of any provision of the Debt Commitment Letter that amends the Debt Financing and/or
substitution of all or any portion of the Debt Financing shall not, without the prior written consent of the Company, (A) reduce the aggregate amount of the Debt Financing (including by increasing the amount of fees to be paid or original issue
discount, unless the Debt Financing is increased by a corresponding amount on substantially the same terms as provided in the applicable Debt Commitment Letter) to be funded at Closing, (B) impose new or additional conditions precedent or
contingencies to the Debt Financing as set forth in the Debt Commitment Letter or otherwise amend, modify, or expand any conditions precedent to the funding of the Debt Financing (unless such conditions precedent or contingencies to the Alternative
Financing would not be reasonably expected to (i) prevent or delay the Closing, (ii) make the funding of the Debt Financing (or the satisfaction of the conditions to obtaining the Debt Financing) less likely to occur, (iii) adversely
affect the ability of Parent to consummate the transactions contemplated by this Agreement or (iv) adversely impact the ability of Parent or Merger Sub to enforce its respective rights against the other parties to the Debt Commitment Letter or
the definitive agreements with respect thereto), (C) release or consent to the termination of the obligations of the lenders under the Debt Commitment Letter (except for assignments and replacements of an individual lender under the terms of or
in connection with the syndication of the Debt Financing or as otherwise expressly contemplated by the Debt Commitment Letter), (D) otherwise prevent or delay the Closing or (E) reasonably be expected to adversely impact the ability of
Parent or Merger Sub to enforce its rights against the other parties to the Debt Commitment Letter or the definitive agreements with respect thereto;
provided
,
further
, that Parent and Merger Sub may amend, restate, replace, supplement
or otherwise modify the Debt Commitment Letter (or any Alternative Financing) on one or more occasions to add additional arrangers, bookrunners, agents and lenders in accordance with the terms of the Debt Commitment Letter (but not to make any other
changes other than to the extent otherwise permitted under this
Section 6.11(a))
. For purposes of this Agreement, the definition of Debt Commitment Letter shall include any amendment, restatement, supplement or other
modification or waiver thereto, or any replacement thereof, and the definition of Debt Financing shall include any Alternative Financing, in each case permitted under this
Section 6.11(a)
or clause (b) below.
(b) If any portion of the Debt Financing becomes unavailable on the terms and conditions contemplated in the Debt Commitment Letter (subject
to any market flex provisions included in the Fee Letter and other than on account of any Alternative Financing referred to in clause (a) above having been completed) other than due to the failure of a condition to the consummation
of the Debt Financing resulting from a material breach of any representation, warranty, or covenant of the Company set forth in this Agreement or the failure of any condition set forth in
Section 7.01
or
Section 7.02
of this
Agreement, each of Parent and Merger Sub shall use its reasonable best efforts to obtain any such portion from alternative debt or equity sources as promptly as practicable following the occurrence of such event in an amount that will still enable
Parent and Merger Sub to pay the aggregate Merger Consideration and any other amounts required to be paid by Parent or Merger Sub in connection with the consummation of the transactions contemplated hereby to which it is a party and to pay all
related fees and expenses of Parent and Merger Sub.
(c) Parent shall keep the Company informed on a reasonably current basis in
reasonable detail of the status of its efforts to arrange the Debt Financing and shall provide to the Company copies of any amendment, restatement, replacement, supplement or modification of the Debt Commitment Letter and all executed final
definitive documents relating to the Debt Financing (excluding any provisions related solely to fees and economic terms (other than covenants) agreed to by the parties thereto and any provisions in any fee or
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engagement letters as customarily excluded by the Financing Sources). Without limiting the generality of the foregoing, Parent shall give the Company prompt written notice which shall include
reasonably detailed information regarding the circumstances referenced in the following clause: (i) if Parent becomes aware of any material breach or default by any party to the Debt Commitment Letter or any definitive document related to the
Debt Financing; (ii) of the receipt by it of any written notice or other written communication from any Person with respect to any (A) actual or potential breach, default, termination or repudiation by any party to the Debt Commitment
Letter or any definitive document related to the Debt Financing or any provisions of the Debt Commitment Letter or any definitive document related to the Debt Financing, or (B) material dispute or disagreement between or among any parties to
the Debt Commitment Letter or any definitive document related to the Debt Financing with respect to the obligation to fund any portion of the Debt Financing or the amount of the Debt Financing to be funded at Closing; (iii) if for any reason
Parent or Merger Sub believes in good faith that it will not be able to obtain all or any portion of the Debt Financing on the terms and conditions, in the manner or from the sources contemplated by the Debt Commitment Letter (subject to the
market flex provisions included in the Fee Letter or any fee letter relating to any Alternative Financing) or the definitive documents related to the Debt Financing, and (iv) upon receiving the Debt Financing. As soon as reasonably
practicable, after the date the Company delivers Parent or Merger Sub a written request, Parent and Merger Sub shall provide any additional information reasonably requested by the Company relating to any circumstance referred to in clause (i), (ii),
(iii) or (iv) of the immediately preceding sentence.
(d) From the date hereof until the earlier of (i) the Closing Date
and (ii) termination of this Agreement pursuant to
Section 8.01
, the Company shall provide, and shall cause its Subsidiaries to provide and shall use its reasonable best efforts to cause its Representatives to provide, Parent and
Merger Sub such cooperation as may be reasonably requested by Parent in connection with any Debt Financing, including (in each case to the extent reasonably requested) (A) participating, upon reasonable advance notice, in a reasonable number of
meetings, presentations, road shows, rating agency presentations and drafting sessions, and participating in reasonable and customary due diligence, in each case with or by the Financing Sources (or prospective lenders or investors in any Debt
Financing), (B) furnishing Parent and the Financing Sources, as promptly as reasonably practicable, with the Required Information, (C) assisting Parent and the Financing Sources in the preparation of (I) customary offering documents,
syndication documents and materials (including assistance in creating usual and customary public versions of the foregoing), including confidential information memoranda, private placement memoranda, offering memoranda, lender and
investor presentations, rating agency presentations, business and financial projections and similar documents and materials, in connection with any Debt Financing (all of the foregoing, collectively, the
Offering Documents
),
including providing the MD&A and business description to be contained therein, and providing customary authorization and representation letters with respect thereto, and (II) materials for any Offering Documents, including business
projections and financial statements (including assisting the Parent in preparing pro forma financial statements; provided that neither the Company nor any of its Subsidiaries or Representatives shall be responsible in any manner for any pro forma
adjustments relating to proposed debt and equity capitalization that is required to be made to the historical information for such pro forma financial information) and identifying any portion thereof as containing material, non-public information,
(D) reasonably cooperating with the marketing and syndication efforts of Parent, Merger Sub and any Financing Sources for any portion of any Debt Financing, including cooperation in connection with the obtainment of ratings, (E) using its
reasonable best efforts to cause its current or former independent accountants to provide assistance and cooperation in any Debt Financing, including (I) participating in a reasonable number of drafting sessions and accounting due diligence
sessions, (II) providing any necessary written consents to use their audit reports relating to the Company and to be named as an Expert in any document related to any Debt Financing and (III) providing any customary comfort
letters (including customary negative assurance comfort, including change period comfort), (F) executing and delivering as of (but not before) the Closing Date definitive financing documents, including credit agreements, indentures,
intercreditor agreements, pledge and security documents, and certificates (including borrowing base certificates), or other documents, to the extent reasonably requested by Parent and otherwise facilitating the granting or perfection of collateral
to secure any Debt Financing, including delivery of certificates representing equity interests constituting collateral, intellectual property filings with respect to intellectual property constituting collateral and mortgages with respect to owned
real property
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constituting collateral and obtaining releases of existing Liens,
provided
that the effectiveness of any definitive documentation executed by the Company or any of its Subsidiaries shall
be subject to the consummation of the Merger, (G) furnishing Parent and any Financing Sources promptly, and in any event at least five (5) days prior to the Closing Date, with all documentation and other information required by any
Governmental Entity with respect to any Debt Financing under applicable know your customer and anti-money laundering rules and regulations, including the PATRIOT Act, in each case, to the extent that such documentation and information
has been reasonably requested in writing (which may be by e-mail) at least ten (10) days prior to the Closing Date, (H) assisting in the delivery of inventory appraisals and field audits and obtaining surveys and title insurance reasonably
requested by Parent and (I) taking all corporate actions, subject to and only effective upon the occurrence of the Effective Time, reasonably requested by Parent to permit the consummation of any Debt Financing and to permit the proceeds
thereof to be made available to the Surviving Company immediately after the Effective Time;
provided
that, notwithstanding anything in this Agreement to the contrary, (A) neither the Company nor any of its Subsidiaries shall be required
to take any action that would cause it to bear any out-of-pocket cost or expense (not otherwise subject to reimbursement) or to pay any commitment or other similar fee or make any other similar payment or incur any other monetary liability or
provide or agree to provide any indemnity in connection with the Debt Financing or any of the foregoing, in each case, to the extent effective prior to the Effective Time, (B) neither the Company nor any of its Subsidiaries or Representatives
shall be required to take any action under this Section 6.11 that would interfere unreasonably with the business or operations of the Company or its Subsidiaries and (C) neither the Company nor any of its Subsidiaries shall be required to
take any action that will conflict with or violate their respective organizational documents or result in the contravention of any contract to which the Company or any of its Subsidiaries is a party that is material to the business of the Company
and its Subsidiaries taken as a whole prior to the Effective Time (it being agreed, however, that the foregoing clauses (B) and (C) shall not apply to (and shall not in any manner affect) the Companys obligations hereunder with
respect to the delivery of the Required Information or with respect to the other actions under this Section 6.11(d) that are usual and customary with respect to syndicated credit facilities or high yield offerings). The Company hereby consents
to the reasonable use of its and its Subsidiaries logos in connection with the marketing of any Debt Financing;
provided
that such logos are used solely in a manner that is not intended to, and is not reasonably likely to harm or
disparage the Company or any of its Subsidiaries or the reputation or goodwill of the Company, its Subsidiaries and its or their respective marks, products, services, offerings or intellectual property rights.
(e) Parent shall indemnify and hold harmless the Company, its Subsidiaries and their respective Representatives from and against any and all
liabilities, losses, damages, claims, out-of-pocket costs and expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with the arrangement of the Debt Financing (including any action taken in accordance with
this
Section 6.11
) and any information utilized in connection therewith, in any case, except to the extent suffered or incurred as a result of the bad faith, the gross negligence, willful misconduct or material breach of this Agreement
by or of the Company or its Subsidiaries or their respective Representatives. In addition, Parent shall, promptly upon request by the Company, reimburse the Company for all reasonable and documented out-of-pocket costs incurred by the Company or its
Subsidiaries in connection with this
Section 6.11
.
(f) This
Section 6.11
shall be the only provision in this
Agreement setting forth the Companys obligations to cooperate or provide information or access or take any other action in respect of the Debt Financing.
Section 6.12.
Resignation of Directors
. The Company shall use its reasonable best efforts to obtain and deliver to Parent on or
prior to the Effective Time the resignation of the Companys directors with such resignations to be effective as of the Effective Time.
Section 6.13.
Life Sciences Business
. Upon Parents written request (which shall be limited to one (1) written request),
the Company shall furnish a written request to the parties to a Contract that relates to the Life Sciences Business and is included in the Life Sciences Assets or the Life Sciences Liabilities to be sold to or assumed by the Life Sciences Buyer
pursuant to the Life Sciences SAPA to provide a full release of the
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Company and each Non-Life Sciences Subsidiary that is a party to such Contract from all of the Companys and such Non-Life Sciences Subsidiarys obligations and liabilities thereunder;
provided
that, for the avoidance of doubt, if the Company complies with the requirements of this
Section 6.13
, but is unable to obtain any such release, such failure shall not be deemed to be a breach of this
Section 6.13
.
Section 6.14.
Third Party Consents
. The Company shall use its commercially reasonable efforts, and
shall cause its Subsidiaries to use their commercially reasonable efforts, to take all actions reasonably requested by Parent to obtain waivers and consents from any and all third parties with respect to each Material Contract for which such waiver
or consent is required in connection with the transaction contemplated by this Agreement;
provided
that in no event shall the Company be required to pay any consideration to any third party in connection with obtaining such consent or waiver;
provided
,
further
, that the Company shall not agree to any change to such Contracts that would be materially adverse to the interests of the Company, its Subsidiaries or, after the Merger, Parent or any of the Non-Life Sciences
Subsidiaries without the prior written consent of Parent;
provided
,
further
, that if the Company complies with the requirements of this
Section 6.14
, but is unable to obtain any such consent, such failure shall not be
deemed to be a breach of this
Section 6.14
.
Section 6.15.
Cash Balances
. Except as set forth on
Section 6.15
of the Company Disclosure Letter, the Company will, and will cause its Subsidiaries to, use commercially reasonable efforts to take such actions as are reasonably requested by Parent prior to the Closing with respect to the
Companys existing cash balances, cash equivalents and marketable securities to enable Parent to use a portion of such cash balances, cash equivalents and marketable securities to fund a portion of the Merger Consideration; provided that
(i) neither the Company nor any of its Subsidiaries shall be required to take any action under this
Section 6.15
that would interfere unreasonably with the business or operations of the Company or its Subsidiaries prior to Closing
and (ii) if this Agreement is terminated with the Closing not having occurred, Parent shall reimburse the Company and its Subsidiaries for all reasonable and documented out-of-pocket expenses incurred by the Company as a result of actions taken
at the request of Parent pursuant to this
Section 6.15
.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01.
Conditions to Each Partys Obligation to Effect the Merger
. The respective obligation of each party to effect
the Merger is subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:
(a)
Stockholder
Approval
. The Company Stockholder Approval shall have been obtained.
(b)
Antitrust
. (i) The waiting period (and any
extension thereof) applicable to the consummation of the Merger under the HSR Act shall have expired or early termination thereof shall have been granted and (ii) all other Required Antitrust Approvals shall have been obtained.
(c)
Legal Restraints
. No Applicable Law and no judgment, preliminary, temporary or permanent, or other legal restraint or prohibition
and no binding Order or determination by any Governmental Entity shall be in effect that prevents, makes illegal, restrains, enjoins or otherwise prohibits the consummation of the Merger.
Section 7.02.
Conditions to Obligation of Parent and Merger Sub
. The obligation of Parent and Merger Sub to consummate the Merger
is further subject to the following conditions:
(a)
Representations and Warranties
. (i) The representations and warranties of
the Company contained in
Section 3.01
[
Qualification, Organization, Subsidiaries, etc.
],
Section 3.02
[
Authority; Execution and Delivery; Enforceability
],
Section 3.03(b)
[
Capital Structure
]
(other than the first sentence and the penultimate sentence of
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Section 3.03(b)
),
Section 3.18
[
Brokers Fees and Expenses
],
Section 3.19
[
Opinion of Financial Advisor
], and
Section 3.20
[
Takeover Statutes
] shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date),
(ii) the representations and warranties of the Company contained in
Section 3.03(a)
[
Capital Structure
], the first sentence and the penultimate sentence of
Section 3.03(b)
[
Capital Structure
], the first
sentence of
Section 3.06
[
Absence of Certain Changes
] and
Section 3.25(a)
[
Life Sciences Transaction
] shall be true and correct in all respects at and as of the Closing Date as if made at and as of such time,
except, in the case of
Section 3.03(a)
[
Capital Structure
] or the first sentence and penultimate sentence of
Section 3.03(b)
[
Capital Structure
], for such inaccuracies as are
de minimis
in nature and
amount relative to such representation and warranty taken as a whole, and (iii) all other representations and warranties of the Company contained in this Agreement shall be true and correct (without giving effect to any limitation as to
materiality or Company Material Adverse Effect set forth therein) at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier
date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to materiality or Company Material Adverse Effect set forth therein) has not had and
would not reasonably be expected to have a Company Material Adverse Effect.
(b)
Performance of Obligations of the Company
. The
Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date.
(c)
Life Sciences Transaction
. The Closing (as defined in the Life Sciences SAPA) shall have occurred.
(d)
Company Certi
ficate. The Company shall have delivered to Parent a certificate, dated as of the Closing Date and signed by its Chief
Executive Officer or Chief Financial Officer, certifying to the effect that the conditions set forth in
Section 7.02(a)
,
Section 7.02(b)
and
Section 7.02(c)
have been satisfied.
Section 7.03.
Conditions to Obligations of the Company
. The obligations of the Company to consummate the Merger are further
subject to the following conditions:
(a)
Representations and Warranties
. (i) The representations and warranties of Parent and
Merger Sub contained in
Section 4.01
[Qualification, Organization, Subsidiaries],
Section 4.02
[
Authority; Execution and Delivery; Enforceability
], and
Section 4.08
[
Brokers Fees and Expenses
]
shall be true and correct in all material respects at and as of the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date) and (ii) all other
representations and warranties of Parent and Merger Sub in this Agreement shall be true and correct (without giving effect to any limitation as to materiality or Parent Material Adverse Effect set forth therein) at and as of
the Closing Date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without
giving effect to any limitation as to materiality or Parent Material Adverse Effect set forth therein), has not had and would not reasonably be expected to have a Parent Material Adverse Effect.
(b)
Performance of Obligations of Parent and Merger Sub
. Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior to the Closing Date.
(c)
Parent Certificate
. Parent
shall have delivered to the Company a certificate, dated as of the Closing Date and signed by its Chief Executive Officer or Chief Financial Officer, certifying to the effect that the conditions set forth in
Section 7.03(a)
and
Section 7.03(b)
have been satisfied.
(d)
Life Sciences Transaction
. All of the conditions to the respective
obligations of the Company and the Life Sciences Buyer to close the sale of the Life Sciences Business on the terms specified in the Life Sciences SAPA shall have been satisfied or waived.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01.
Termination
. This Agreement may be terminated at any time prior to the Effective Time, whether before or after
receipt of the Company Stockholder Approval:
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent:
(i) if the Merger is not consummated on or before August 4, 2014 (the
End Date
);
provided
,
however
, that
(x) if, on the End Date, (A) any of the conditions to the Closing set forth in
Section 7.01(b)
or
Section 7.01(c)
(if such legal restraint is in respect of a Regulatory Law) shall not have been satisfied or (to the
extent permitted by Applicable Law) waived by both the Company and Parent or (B) the Marketing Period shall not have been completed by the date that is three (3) Business Days prior to such End Date, but in the case of either (A) or
(B), all other conditions to the Closing (other than those conditions that by their terms are to be satisfied at the Closing) have been satisfied or, to the extent permitted by Applicable Law, waived, then in the case of (A) above, the End Date
shall, without any action on the part of the parties hereto, be extended to November 4, 2014, or such earlier date as may be agreed in writing by Parent and the Company, and, in the case of (B) above, the End Date shall be extended to the
earlier of November 4, 2014 and the third (3rd) Business Day following the final day of the Marketing Period, and in each case such date shall become the End Date for purposes of this Agreement and (y) the right to terminate this
Agreement under this
Section 8.01(b)(i)
shall not be available to any party whose failure to fulfill any obligation under this Agreement (including the obligation to consummate the Closing when required pursuant to
Section 1.02
hereof) materially contributed to the failure of the Merger to be consummated on or before such date (it being understood that Parent and Merger Sub shall be deemed a single party for purposes of the foregoing proviso);
(ii) if any Governmental Entity of competent authority issues a final nonappealable Order or enacts a law that prohibits, restrains or makes
illegal the consummation of the Merger; or
(iii) if the Company Stockholder Approval shall not have been obtained at a duly convened
Company Stockholders Meeting or any adjournment or postponement thereof;
provided
that the right to terminate this Agreement pursuant to this
Section 8.01(b)(iii)
shall not be available to the Company where the failure to obtain
the approval of the stockholders of the Company shall have been caused by the action or failure to act of the Company and such action or failure to act constitutes a breach by the Company of this Agreement; or
(iv) if the Life Sciences SAPA is terminated in accordance with its terms without a closing occurring thereunder;
provided
that the
right to terminate this Agreement pursuant to this
Section 8.01(b)(iv)
shall not be available to the Company where the failure of the closing under the Life Sciences SAPA shall have been caused by the action or failure to act of the
Company or any of its Subsidiaries and such action or failure to act constitutes a breach by the Company or any of its Subsidiaries under the Life Sciences SAPA.
(c) by the Company, if Parent or Merger Sub has breached any representation, warranty, covenant or agreement contained in this Agreement, or
if any representation or warranty of Parent or Merger Sub has become untrue, in each case, such that the conditions set forth in
Section 7.03(a)
or
Section 7.03(b)
, as the case may be, could not be satisfied as of the Closing
Date;
provided
,
however
, that the Company may not terminate this Agreement pursuant to this
Section 8.01(c)
unless any such breach or failure to be true has not been cured within 30 days after written notice by the Company
to Parent informing Parent of such breach or failure to be true, except that no cure period shall be required for a breach which by its nature cannot be cured prior to the End Date; and
provided
,
further
, that the Company may not
terminate this Agreement pursuant to this
Section 8.01(c)
if the Company is then in breach of this Agreement in any material respect;
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(d) by the Company prior to receipt of the Company Stockholder Approval, in order to enter into a
definitive written agreement providing for a Superior Proposal in accordance with
Section 5.02(d)
;
(e) by the Company, if the
conditions to closing set forth in
Sections 7.01
and
7.02
have been satisfied (other than those conditions that by their nature can only be satisfied at the Closing and which were, at the time of termination, reasonably expected to be
satisfied at the Closing) and Parent and Merger Sub shall have failed to consummate the Closing on the date the Closing is required to have occurred pursuant to
Section 1.02
;
(f) by Parent, if the Company has breached any representation, warranty, covenant or agreement contained in this Agreement, or if any
representation or warranty of the Company has become untrue, in each case, such that the conditions set forth in
Section 7.02(a)
or
Section 7.02(b)
, as the case may be, could not be satisfied as of the Closing Date;
provided
,
however
, that Parent may not terminate this Agreement pursuant to this
Section 8.01(f)
unless any such breach or failure to be true has not been cured within 30 days after written notice by Parent to the Company
informing the Company of such breach or failure to be true, except that no cure period shall be required for a breach which by its nature cannot be cured prior to the End Date; and
provided
,
further
, that Parent may not terminate this
Agreement pursuant to this
Section 8.01(f)
if Parent is then in breach of this Agreement in any material respect; or
(g) by
Parent, prior to the Company Stockholders Meeting, in the event that an Adverse Recommendation Change shall have occurred.
Section 8.02.
Effect of Termination
. In the event of termination of this Agreement by either Parent or the Company as provided in
Section 8.01
, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of the Company, Parent or Merger Sub, other than the penultimate sentence of
Section 6.02
, this
Section 8.02
,
Section 8.03
and
Article IX
, which provisions shall survive such termination,
provided
,
however
, that, no such termination shall relieve any party from any liability or damages arising out
of: (i) fraud by any party or (ii) any willful or intentional breach of this Agreement. For the avoidance of doubt, and without limiting the foregoing, any failure of the Parent or Merger Sub, on the one hand, or the Company, on the other
hand, to consummate the Closing hereunder following the satisfaction or waiver of such partys conditions to closing under this Agreement shall be a willful and intentional breach by such party of this Agreement, except that, in the case of
Parent or Merger Sub, any such failure to consummate the Closing due to a Financing Failure under circumstances where neither Parent nor Merger Sub has breached in any material respect its obligations under
Section 6.11
of this Agreement
shall not be a willful or intentional breach by Parent or Merger Sub of this Agreement.
Section 8.03.
Fees and Expenses
.
(a) Except as specifically provided for herein, all fees and expenses incurred in connection with the Merger and the other transactions
contemplated by this Agreement shall be paid by the party incurring such fees or expenses, whether or not such transactions are consummated.
(b) The Company shall pay to Parent a fee of $30,000,000 (the
Termination Fee
) if:
(i) the Company terminates this Agreement pursuant to
Section 8.01(d)
or Parent terminates this Agreement pursuant to
Section 8.01(g)
; or
(ii) (A) an Acquisition Proposal shall have been made to the Company and not publicly withdrawn prior to
the Company Stockholders Meeting or shall have been made directly to the stockholders of the Company generally and not publicly withdrawn prior to the Company Stockholders Meeting; (B) thereafter this Agreement is terminated pursuant to
Section 8.01(b)(i)
,
Section 8.01(b)(iii)
,
Section 8.01(b)(iv)
or
Section 8.01(f)
; and (C) within 12 months of such termination the Company or any of its Subsidiaries shall have entered into an
Alternative Acquisition Agreement with respect to, or shall have approved or recommended to the Companys
A-44
stockholders or otherwise not opposed, an Acquisition Proposal that is subsequently consummated;
provided
,
however
, that for purposes of this
Section 8.03(b)(ii)
, the
references to 20% in the definition of
Acquisition Proposal
shall be deemed to be references to 50%.
(c) Any
Termination Fee due under
Section 8.03(b)
shall be paid by wire transfer of same-day funds (x) in the case of
Section 8.03(b)(i)
above, on the Business Day immediately following the date of termination of this Agreement in
the case of any such termination by Parent (or simultaneously with such termination in the case of any such termination by the Company), and (y) in the case of
Section 8.03(b)(ii)
above, on the date of consummation of the
Acquisition Proposal referred to in
Section 8.03(b)(ii)(C)
above.
(d) The Company acknowledges and agrees that the agreements
contained in
Section 8.03(b)
are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Parent would not enter into this Agreement. Accordingly, if the Company fails promptly to pay the
amount due pursuant to
Section 8.03(b)
, and, in order to obtain such payment, Parent commences an Action that results in a judgment in its favor for such payment, the Company shall pay to Parent its costs and expenses (including
reasonable attorneys fees and expenses) in connection with such Action, together with interest on the amount of such payment from the date such payment was required to be made until the date of payment at a rate per annum equal to the prime
interest rate published in
The Wall Street Journal
on the date such interest begins accruing. Except with respect to any fraud or willful or intentional breach of this Agreement by the Company, the parties agree that the payment of the
Termination Fee shall be the sole and exclusive remedy available to Parent and Merger Sub with respect to this Agreement and the transactions contemplated hereby in the event any such payment becomes due and payable, and, upon payment of the
Termination Fee by the Company, the Company, the Companys Affiliates and its and their respective directors, officers, employees, stockholders and Representatives shall have no further liability to Parent and Merger Sub under this Agreement.
In no event shall the Company be obligated to pay the Termination Fee on more than one occasion.
(e) Parent shall pay the Company a fee
of $100,000,000 (the
Parent Termination Fee
) if the Company terminates this Agreement pursuant to
Section 8.01(e)
. Any Parent Termination Fee and expenses due under this
Section 8.03(e)
shall be paid by
wire transfer of same-day funds on the Business Day immediately following the date of termination of this Agreement.
(f) Parent
acknowledges and agrees that the agreements contained in
Section 8.03(e)
are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the Company would not enter into this Agreement.
Accordingly, if Parent fails promptly to pay the amount due pursuant to
Section 8.03(e)
, and, in order to obtain such payment, the Company commences an Action that results in a judgment in its favor for such payment, Parent shall pay to
the Company its costs and expenses (including reasonable attorneys fees and expenses) in connection with such Action, together with interest on the amount of such payment from the date such payment was required to be made until the date of
payment at a rate per annum equal to the prime interest rate published in
The Wall Street Journal
on the date such interest begins accruing. Except with respect to any fraud or willful or intentional breach of this Agreement by Parent or
Merger Sub, the parties agree that the payment of the Parent Termination Fee shall be the sole and exclusive remedy available to the Company with respect to this Agreement and the transactions contemplated hereby in the event any such payment
becomes due and payable; provided, however, that the right of the Company to receive the Parent Termination Fee if the Company terminates this Agreement pursuant to
Section 8.01(e)
shall not affect the Companys right to specific
performance as provided herein prior to any termination of this Agreement. Upon payment of the Parent Termination Fee, Parent, Merger Sub, their Affiliates and their respective directors, officers, employees, stockholders and Representatives shall
have no further liability to the Company under this Agreement. In no event shall Parent be obligated to pay the Parent Termination Fee on more than one occasion.
Section 8.04.
Amendment
. This Agreement may be amended by the parties at any time before or after receipt of the Company
Stockholder Approval;
provided
,
however
, that (i) after receipt of the Company Stockholder Approval, there shall be made no amendment that by Applicable Law or the rules of any relevant
A-45
stock exchange requires further approval by the stockholders of the Company without the further approval of such stockholders, and (ii) except as provided above, no amendment of this
Agreement shall be submitted to be approved by the stockholders of the Company unless required by Applicable Law. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties. Notwithstanding anything
to the contrary in this
Section 8.04
or elsewhere in this Agreement, this
Section 8.04
and
Sections 8.05
,
9.07
,
9.08(d)
,
9.08(e)
and
9.11
(and any definition set forth in, or other provision
of, this Agreement to the extent that an amendment or modification of such definition or other provision would amend or modify the substance of this
Section 8.04
or
Section 8.05
,
9.07
,
9.08(d)
,
9.08(e)
or
9.11
) may not be amended or modified in a manner that would be adverse to any Financing Source (or any Financing Sources Affiliates or any of its or its Affiliates former, current or future general or limited partners,
stockholders, managers, members, controlling persons, agents, employees, accountants, consultants, legal counsel, financial advisors or any of their successors or assigns (collectively,
Financing Related Parties
) without the prior
written consent of such Financing Source (and any such amendment or modification without such prior written consent shall be null and void).
Section 8.05.
Extension; Waiver
. At any time prior to the Effective Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement, (c) waive
compliance with any covenants and agreements contained in this Agreement or (d) waive the satisfaction of any of the conditions contained in this Agreement;
provided
that there shall be no waiver to this
Section 8.05
or
Section 8.04
,
9.07
,
9.08(d)
,
9.08(e)
or
9.11
(or any provision of this Agreement to the extent a waiver of such provision would modify the substance of this
Section 8.05
or
Section 8.04
,
9.07
,
9.08(d)
or
9.11
) in a manner that would be adverse to any Financing Source (or its Financing Related Parties) without the prior written consent of such Financing Source (and any such amendment or
modification without such prior written consent shall be null and void). No extension or waiver by the Company shall require the approval of the stockholders of the Company unless such approval is required by Applicable Law. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
Section 8.06.
Procedure for Termination, Amendment, Extension or Waiver
. A
termination of this Agreement pursuant to
Section 8.01
, an amendment of this Agreement pursuant to
Section 8.04
or an extension or waiver pursuant to
Section 8.05
shall, in order to be effective, require, in the
case of the Company, Parent or Merger Sub, action by its Board of Directors or the duly authorized designee thereof. Termination of this Agreement prior to the Effective Time shall not require the approval of the stockholders of either Parent or the
Company.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01.
Survival
. The representations and warranties contained in or made pursuant to this Agreement shall not survive the
Closing. The covenants and agreements of the parties hereto contained in or made pursuant to this Agreement that by their terms apply or are to be performed in whole or in part after the Closing, shall survive for the period provided in such
covenants and agreements, if any, or until fully performed, and the covenants and agreements of the parties hereto that by their terms apply or are to be performed at or prior to the Closing shall not survive the Closing. Each covenant and agreement
shall terminate after such survival period or full performance. This
Section 9.01
shall not limit
Section 8.02
or any covenant or agreement of the parties which by its terms contemplates performance after the Effective Time.
Section 9.02.
Notices
. All notices, requests, claims, demands and other communications under this Agreement shall be in
writing and shall be given or made (and shall be deemed to have been duly given or made
A-46
upon receipt) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or
certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this
Section 9.02
):
(a) if to the Company, to:
ATMI, Inc.
7 Commerce Drive
Danbury, CT 06810
Attention:
Patrick J. Shima, Esq.
Facsimile: (203) 702-5352
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New
York 10153
Phone: (212) 310-8000
Facsimile: (212) 310-8007
Attention: Thomas A. Roberts, Esq.
Matthew J. Gilroy, Esq.
(b) if to Parent or Merger Sub, to:
Entegris, Inc.
129 Concord Road
Billerica, MA 01821
Attention: Peter Walcott, Esq.
Facsimile: (978) 436-6739
with a copy (which shall not constitute notice) to:
Ropes & Gray LLP
Prudential Tower
800 Boylston
St.
Boston, Massachusetts 02199
Phone: (617) 951-7802
Facsimile: (617) 235-0514
Attention: Craig E. Marcus, Esq.
Section 9.03.
Definitions
. For purposes of this Agreement:
Acceptable Confidentiality Agreement
means a confidentiality agreement with terms and conditions customary for transactions
of such type that is no less favorable to the Company than the Confidentiality Agreement but need not contain standstill type restrictions.
Action
means any claim, action, suit, arbitration, proceeding, investigation, audit, review or litigation by or before any
Governmental Entity.
Affiliate
means with respect to any specific Person, any other Person that, at the time of
determination, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, where
control
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract, as trustee or executor, or otherwise.
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Applicable Law(s)
means with respect to any Person, any federal, state,
municipal or other local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, Order or other similar requirement enacted, adopted, promulgated or applied by a Governmental Entity that is binding
upon or applicable to such Person, as the same may be amended from time to time unless expressly specified otherwise in this Agreement.
Business
means the business and operations of the Company and its Subsidiaries after giving effect to the disposition of
the Life Sciences Business pursuant to the Life Sciences SAPA.
Business Day
means any day that is not a Saturday, or
Sunday or other day on which commercial banks in the City of New York, New York are required by Applicable Law to be closed.
Code
means the Internal Revenue Code of 1986, as amended.
Collective Bargaining Agreement
means any collective bargaining agreements, labor union contracts, trade union agreements,
works council contracts and other similar agreements and contracts.
Company Material Adverse Effect
means any effect,
change, event, circumstance or occurrence that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (a) the business, results of operations, assets, liabilities or condition (financial
or otherwise) of the Company and the Non-Life Sciences Subsidiaries, taken as a whole or (b) the ability of the Company to consummate the Merger or the other transactions contemplated in this Agreement (including the sale of the Life Sciences
Business pursuant to the Life Sciences SAPA);
provided
,
however
, that none of the following, and no effect, change, event, circumstance or occurrence arising out of, or resulting from, the following, shall constitute or be taken into
account, individually or in the aggregate, in determining whether a Company Material Adverse Effect has occurred or may occur: (A) changes generally affecting the economy, credit or financial or capital markets, in the United States or
elsewhere in the world, including changes in interest or exchange rates; (B) changes generally affecting the industries in which the Company and its Subsidiaries operate; (C) changes or prospective changes in Applicable Law or GAAP or in
accounting standards, any changes or prospective changes in the interpretation or enforcement of any of the foregoing or any changes in general legal, regulatory or political conditions, in each case occurring after the date hereof; (D) changes
solely attributable to the announcement or pendency of this Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or Governmental Entities, or any litigation
arising from allegations of breach of fiduciary duty or violation of Applicable Law relating to this Agreement or the transactions contemplated hereby to the extent addressed in accordance with the requirements of
Section 6.10
;
(E) acts of war (whether or not declared), sabotage or terrorism, or any escalation or worsening of any such acts of war (whether or not declared), sabotage or terrorism; (F) volcanoes, tsunamis, pandemics, earthquakes, floods, storms,
hurricanes, tornados or other natural disasters; (G) any action taken by the Company or its Subsidiaries that is specifically required by this Agreement or with the prior written consent or at the direction of Parent in accordance with this
Agreement, or the failure to take any action by the Company or its Subsidiaries if that action is prohibited by this Agreement; (H) changes resulting or arising from the identity of, or any facts or circumstances relating to the Parent or any
of its Affiliates, (I) changes in the price or trading volume of the Companys Common Stock; or (J) any failure to meet any internal or public projections, forecasts, guidance, estimates, milestones, budgets or internal or published
financial or operating predictions of revenue, earnings, cash flow or cash position (it being understood that the exceptions in clauses (I) and (J) shall not prevent or otherwise affect a determination that the underlying cause of any such
change or failure referred to therein (to the extent not otherwise falling within any of the exceptions provided by clauses (A) through (H) hereof) is, may be, contributed to or may contribute to, a Company Material Adverse Effect);
provided further
,
however
, that any effect, change, event or occurrence referred to in clauses (A), (B), (C), (E) or (F) may be taken into account in determining whether or not there has been or may be a Company Material
Adverse Effect to the extent such effect, change, event, circumstance or occurrence has a material disproportionate adverse effect on the Company and the Non-Life Sciences Subsidiaries, taken as a whole, as compared to other participants in the
industries in
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which the Company and its Subsidiaries operate. The determination of
Company Material Adverse Effect
shall in all events not take into account all effects, changes, events,
circumstances or occurrences with respect to the Life Sciences Business or any Life Sciences Assets or Life Sciences Liabilities to be transferred or assumed pursuant to the Life Sciences SAPA except to the extent, and only to the extent, that the
Company or any Non-Life Sciences Subsidiary retains any liability or obligation, whether direct, indirect, contingent or otherwise, in respect thereof.
Company Restricted Stock Award
means any award of Company Common Stock that is subject to time and/or performance vesting
conditions and which is granted under any Company Stock Plan.
Company Restricted Stock Unit Award
means any restricted
stock unit award that is subject to time and/or performance vesting conditions and which is granted under any Company Stock Plan.
Company Stock Option
means any option to purchase Company Common Stock granted under any Company Stock Plan.
Company Stock Plans
means the ATMI, Inc. 1995 Stock Plan, the ATMI, Inc. 1997 Stock Plan, the ATMI, Inc. 1998 Stock Plan,
the ATMI, Inc. 2000 Stock Plan, the ATMI, Inc. 2003 Stock Plan and the ATMI, Inc. 2010 Stock Plan.
Compliant
means,
with respect to the Required Information, that (i) such Required Information does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such Required Information not misleading in the
light of the circumstances, (ii) such Required Information is compliant in all material respects with all applicable requirements of Regulation S-K and Regulation S-X under the Securities Act and the Exchange Act for a registered public
offering of debt securities on Form S-1 (excluding information required by Regulation S-X Rule 3-09, Rule 3-10 and Rule 3-16 and Item 402(b) of Regulation S-K and other provisions for which compliance is not customary in a Rule 144A offering of
debt securities) except to the extent expressly contemplated in the definition of Required Information) and the financial statements and other financial information included in the Required Information are throughout the Marketing Period sufficient
to permit a registration statement on Form S-1 (or successor form) under the Securities Act using such financial statements and financial information to be declared effective by the SEC throughout and on each day during the Marketing Period,
(iii) any interim quarterly financial statements of the Company included in the Required Information have been reviewed by the Companys independent accountants as provided in the procedures specified by the Public Company Accounting
Oversight Board in AU 722, and (iv) the financial statements and other financial information included in the Required Information are sufficient to permit the underwriters, placement agents or initial purchasers to receive customary comfort
letters, including customary negative assurance comfort, including with respect to change period comfort, and the Companys independent accountants (and, if applicable, the Companys or its Subsidiaries former independent accountants) are
prepared to issue such comfort letters in the form of the drafts thereof approved or accepted by the underwriters, placement agents and initial purchasers of the applicable debt securities in order to consummate any offering of debt securities on
any day of the Marketing Period or within three (3) Business Days thereafter. Reference herein to the Companys independent accountants shall be to Ernst & Young LLP or another independent registered public accounting firm of
nationally recognized standing engaged by the Company to be its independent accountants.
Contract
means any written or
oral contract, subcontracts, agreements, leases, licenses, commitments, sale and purchase orders, and other instruments, arrangements or understandings of any kind.
Director Deferred Compensation Plans
means each of the ATMI, Inc. Non-Employee Directors Deferred Compensation Program of
ATMI, Inc. 2010 Stock Plan, and the ATMI, Inc. Non-Employee Directors Deferred Compensation Program of ATMI, Inc. 2003 Stock Plan.
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DOJ
means the United States Department of Justice.
Environmental Laws
means Applicable Laws relating to pollution or the protection of the environment or natural resources.
ESPP
means the ATMI, Inc. 1998 Employee Stock Purchase Plan, as amended.
ERISA
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and
regulations promulgated thereunder.
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Financing Failure
means the Debt Financing (or any Alternative Financing) is not available in accordance with its terms at
the Closing.
Financing Sources
means the Commitment Party and each other Person that has committed to provide or
otherwise entered into any commitment letter, engagement letter, credit agreement, underwriting agreement, purchase agreement, indenture or other agreement with Parent or Merger Sub or any of their Affiliates in connection with, or that is otherwise
acting as an arranger, bookrunner, underwriter, initial purchaser, placement agent, administrative or collateral agent, trustee or a similar representative in respect of, any Debt Financing (including any Alternative Financing).
FTC
means the United States Federal Trade Commission.
GAAP
means United States generally accepted accounting principles.
Governmental Entity
means any transnational, domestic or foreign federal, state or local governmental, regulatory or
administrative authority, department, court, agency, commission or official, including any political subdivision thereof, or any non-governmental self-regulatory agency, commission or authority or arbitrator.
Hazardous Substance
means any substance or waste defined or regulated as toxic, hazardous, a
pollutant, a contaminant or words of similar meaning and regulatory effect under any applicable Environmental Law, including petroleum and petroleum-derived products.
HSR Act
means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations under
such HSR Act.
Indebtedness
means, with respect to any Person, all obligations of such Person (i) for borrowed
money, whether secured or unsecured, (ii) evidenced by notes, bonds, debentures or similar Contracts or securities, (iii) for deferred purchase price of any property, (iv) in respect of any lease of real or personal property, which
obligations are required to be classified and accounted for under GAAP as capital leases, (v) under derivative contracts and any interest rate and currency agreements, (vi) in respect of outstanding letters of credit, and (iv) in
respect of all guarantees, keepwell or similar arrangements for any of the foregoing.
Intellectual Property
means all
of the following whether arising under the Laws of the United States or of any other jurisdiction: (a) patents and patent applications (including patents issued thereon), (b) trademarks, service marks, trade names, service names, logos and
other identifiers of same, and any and all common law rights, and registrations and applications for registration thereof, (c) copyrights, moral rights, mask work rights, in each case whether or not registered, and registrations and
applications for registration thereof, (d) rights in trade secrets, and (e) inventions and invention disclosures.
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Knowledge
means, with respect to the Company, the actual knowledge after
reasonably due inquiry of the individuals set forth on
Section 9.03(a)
of the Company Disclosure Letter, and, with respect to Parent or Merger Sub, the actual knowledge after reasonable due inquiry of the individuals set forth on
Section 9.03(a)
of the Parent Disclosure Letter.
Lien
means, with respect to any property or asset, any
mortgage, deed of trust, pledge, hypothecation, security, interest, encumbrance, interference, option, right of first refusal, preemptive right, community property interest, claim, lien or restriction of any kind (including any restriction on the
voting of any security, any restriction on the transfer of any security or other asset, any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).
Life Sciences Assets
means the assets and properties of the Life Sciences Business and all other rights and interests to be
acquired by the Life Sciences Buyer pursuant to, and conditioned on, the consummation of the transactions contemplated by the Life Sciences SAPA, including 100% of the issued share capital of ATMI BVBA, a company organized under the laws of Belgium
(
ATMI BVBA
).
Life Sciences Business
means the business of developing, manufacturing and selling
products, systems and services to customers in (i) the life sciences industry (including the pharmaceutical, biopharmaceutical, and cell therapy segments) consisting of single use bioprocess and bioreactor systems and component which provide
biotechnology customers with integrated disposable systems, including a complete offering of scalable containment, storage, dispensing, missing and bioreactor solutions (ii) in the life sciences and microelectronics industries with respect to
Ultra Clean Packaging.
Life Sciences Liabilities
means the liabilities of the Life Sciences Business to be assumed by
the Life Sciences Buyer pursuant to, and conditioned on, the consummation of the transactions contemplated by the Life Sciences SAPA.
Life Sciences Subsidiaries
means ATMI BVBA and each of its Subsidiaries, other than any Subsidiary that will remain a
Subsidiary of the Company following the closing of the sale of the Life Sciences Business pursuant to the Life Sciences SAPA as a result of the Restructuring Transactions, namely ATMI (Singapore) and ATMI (Germany).
Marketing Period
means the first period of eighteen (18) consecutive Business Days, commencing on the first
(1st) Business Day after the date of delivery of the Required Information, throughout which (i) Parent shall have the Required Information and the Required Information is Compliant;
provided
that if the Company shall in good faith
reasonably believe it has provided the Required Information, it may deliver to Parent a written notice to that effect (stating when it believes it completed such delivery), in which case the Marketing Period shall be deemed to have commenced on the
date of such notice (or, if later, on the date specified in such notice as the date of delivery of the Required Information) unless Parent in good faith reasonably believes the Company has not completed the delivery of the Required Information and,
within two (2) Business Days after the delivery of such notice by the Company, delivers a written notice to the Company to that effect (stating with specificity which Required Information the Company has not delivered), in which case this
clause (i) shall not be satisfied until the Company has provided all such Required Information specifically set forth in such notice, and (ii) the conditions set forth in
Section 7.01
and
Section 7.02
shall be
satisfied (other than any those conditions that by their nature are to be satisfied at the Closing) and nothing has occurred and no condition exists that would cause any of the conditions set forth in
Section 7.01
and
Section 7.02
to fail to be satisfied assuming the Closing were to be scheduled for any time during such eighteen (18) consecutive Business Day period;
provided
that the Marketing Period shall not be deemed to have commenced
if, prior to the completion of such eighteen (18) consecutive Business Day period, (A) the Companys independent accountants shall have withdrawn or qualified their audit opinion with respect to any of the Required Information, in
which case, the Marketing Period shall not be eligible to commence (and, for the avoidance of doubt, shall be deemed not to have commenced) unless and until a new unqualified audit opinion, prepared in accordance with the PCAOB, is issued with
respect thereto by the
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Companys independent accountants or, if applicable, by the Companys or its Subsidiaries former independent accountants (which shall be an independent registered public
accounting firm), (B) the Company has publicly announced any intention to restate any material financial information, in which case the Marketing Period shall not be eligible to commence unless and until such restatement has been completed and
the relevant Company SEC Documents and Required Information have been amended or the Company has determined that no restatement shall be required in accordance with GAAP, (C) any Required Information would not be Compliant at any time during
such eighteen (18) consecutive Business Day period (it being understood that if any Required Information provided at the initiation of the Marketing Period ceases to be Compliant at any time during such eighteen (18) consecutive Business
Day period, then the Marketing Period shall be deemed not to have commenced), or (D) the Company shall have failed to file any annual, quarterly or periodic report with the SEC that was required to be filed by it with the SEC by the date
required under the Exchange Act containing all of the financial information required to be contained therein, in which case the Marketing Period will not be eligible to commence until such reports have been filed; and
provided further
, that
the Marketing Period shall end on any earlier date that is the date on which the entire Debt Financing has been consummated in accordance with its terms.
NASDAQ
means the National Association of Securities Dealers Automated Quotation.
Non-Life Sciences Subsidiaries
means any Company Subsidiary that is not a Life Sciences Subsidiary.
Order
means any order, writ, decree, judgment, award, injunction, ruling, settlement or stipulation issued, promulgated,
made, rendered or entered into by or with any Governmental Entity (in each case, whether temporary, preliminary or permanent).
Parent Material Adverse Effect
means any event, change, circumstance or occurrence that, individually or in the aggregate,
would prevent or materially delay or adversely impact the ability of Parent or Merger Sub to consummate the Merger.
PCAOB
means the Public Company Accounting Oversight Board auditing standards.
Permits
means licenses, franchises, permits, certificates, approvals and authorizations from Governmental Entities.
Permitted Liens
means, collectively, (i) suppliers, mechanics, carriers, workmens,
repairmens, materialmens, warehousemens, construction and other similar Liens arising or incurred by operation of law or otherwise incurred in the ordinary course of business securing obligations that are not due and payable or
which are being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established in accordance with GAAP, (ii) Liens for Taxes, utilities and other governmental charges that are not due and
payable or which are being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established in accordance with GAAP, (iii) requirements and restrictions of zoning, building and other
Applicable Laws and municipal by-laws, and development, site plan, subdivision or other agreements with municipalities that do not materially detract from the value of such property or materially interfere with the business of the Company and its
Subsidiaries as currently conducted, (iv) licenses or other grants of rights in Intellectual Property made in the ordinary course of business, consistent with past practices, (v) statutory Liens of landlords for amounts not due and payable
or which are being contested in good faith by appropriate proceedings and for which adequate accruals or reserves have been established in accordance with GAAP, (vi) deposits made in the ordinary course of business to secure payments of
workers compensation, unemployment insurance or other types of social security benefits or the performance of bids, tenders, sales, contracts (other than for the repayment of borrowed money), public or statutory obligations, and surety, stay,
appeal, customs or performance bonds, or similar obligations arising in each case in the ordinary course of business consistent with past practices, (vii) Liens in favor of customs and revenue authorities arising as a matter of law and in the
ordinary course of business, consistent with past practices, to secure payment of customs duties
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in connection with the importation of goods, (viii) Liens resulting from securities laws, (ix) Liens incurred in the ordinary course of business, consistent with past practices, in
connection with any purchase money security interests, equipment leases or similar financing arrangements, (x) licenses granted to third parties in the ordinary course of business consistent with past practices by the Company or its
Subsidiaries, (xi) such other Liens or imperfections of title that are not material in amount and do not materially detract from the value of or materially impair the existing use of the property affected by such Lien or imperfection of title,
(xii) Liens that are disclosed on the most recent consolidated balance sheet of the Company, or the notes thereto, included in the Company SEC Documents filed prior to the date hereof and (xiii) Liens that do not materially detract from
the value of such property or interfere in any material respect with the use, operation or occupancy by the Company or any of its Subsidiaries of such property.
Person
means any natural person, general or limited partnership, corporation, trust, limited liability company, limited
liability partnership, firm, association, Governmental Entity or other legal entity.
Regulation S-X
means Regulation
S-X promulgated by the SEC as amended and in effect at the time in question.
Regulatory Laws
means the HSR Act, the
Sherman Antitrust Act of 1890, as amended, and the rules and regulations promulgated thereunder, the Clayton Act of 1914, as amended, and the rules and regulations promulgated thereunder, the Federal Trade Commission Act of 1914, as amended, and the
rules and regulations promulgated thereunder, and any other federal, state and foreign statutes, rules, regulations, Orders, decrees, administrative and judicial doctrines and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.
Required Information
shall mean (i) (A) audited consolidated balance sheets and related audited consolidated
statements of operations, comprehensive income (loss), stockholders equity and cash flows of the Company (including the related notes and financial statement schedules thereto) prepared in accordance with GAAP for the three (3) most
recently completed fiscal years ended at least seventy-five (75) days before the Closing Date and together with audit opinions of the Companys independent accountants (which shall not be subject to any qualification or going
concern disclosures) with respect to such audited financial statements and the written consent of each accounting firm providing any such opinion to use such opinion, and (B) unaudited consolidated balance sheets and related unaudited
consolidated statements of operations, comprehensive income (loss), stockholders equity and cash flows of the Company prepared in accordance with GAAP for each subsequent fiscal quarter that ended at least forty (40) days before the
Closing Date and for the comparable quarter of the prior fiscal year;
provided
,
however
, that in each such case such consolidated balance sheets of the Company and such consolidated statements of operations, comprehensive income
(loss), stockholders equity and cash flows of the Company shall include information necessary for Parent to prepare pro forma financial statements under and in accordance with Article 11 of Regulation S-X and the relevant SEC rules and
regulations applicable thereto for Form S-1 registration statements, (ii) all information and data regarding the Business and the Company and its Subsidiaries (A) of the type and form required by Regulation S-X and Regulation S-K under the
Securities Act for offerings of debt securities on a registration statement on Form S-l (or any successor form) under the Securities Act (other than (x) consolidating and other financial statements and data that would be required by Sections
3-10 and 3-16 of Regulation S-X under the Securities Act, and (y) any information and data required by Item 402 of Regulation S-K under the Securities Act and information regarding executive compensation and related party disclosure
related to SEC Release Nos. 33-8732A, 34-54302A and IC-27444A) (but including financial statements and schedules or footnotes satisfying Item 3-10(g) and including qualitative and quantitative disclosure with respect to assets, liabilities,
revenue, operating income and adjusted EBITDA customarily included in Rule 144A offerings of high yield debt securities) and as otherwise necessary for the Financing Sources to receive customary
comfort
(including customary
negative assurance comfort, including with respect to change period comfort) from the Companys independent accountants (and, if applicable, the Companys and is Subsidiaries former independent accountants) and (B) of the type
and form customarily
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included in Offering Documents used to syndicate credit facilities of the type to be included in the Debt Financing or in Offering Documents used in private placements of high yield debt
securities under Rule 144A under the Securities Act (including as necessary to permit Parent to prepare the offering memorandum required by paragraph 8 of Annex E to the Debt Commitment Letter), in each case, assuming that such syndication of credit
facilities and offering(s) of debt securities were consummated at the same time during the Companys fiscal year as such syndication and offering(s) of debt securities will be made; and (iii) such other information and data reasonably
required by the underwriters, placement agents and initial purchasers that is usual and customary with respect to syndicated credit facilities or high yield offerings; it being understood and agreed that the foregoing provisions of this definition
shall not obligate the Company with respect to pro forma financial statements or projections beyond the requirements of Section 6.11(d)(ii)(C)(II) and clause (i) of this definition.
Restructuring Transactions
has the meaning set forth in the Life Sciences SAPA.
SEC
means the United States Securities and Exchange Commission.
Securities Act
means the Securities Act of 1933, as amended, and the rules and regulations under the Securities Act.
Subsidiary
of any specified Person means any other Person of which such first Person owns (either directly or indirectly
through one or more other Subsidiaries) a majority of the outstanding equity securities or securities carrying a majority of the voting power in the election of the board of directors or other governing body of such Person, and with respect to which
entity such first Person is not otherwise prohibited contractually or by other legally binding authority from exercising control.
Taxes
means all federal, state, local, and foreign income, excise, gross receipts, gross income, ad valorem, profits,
gains, property, capital, sales, transfer, use, payroll, intangible, municipal, employment, severance, withholding, franchise, value added and other taxes, customs, tariffs, imposts, levies, duties, fees or other like assessments or charges of any
kind imposed by a Governmental Entity, together with all interest, penalties and additions imposed with respect to such amounts, and, in all cases, whether disputed or not.
Tax Returns
means all Tax returns, declarations, statements, estimates, reports, schedules, forms and information returns,
any amended Tax return and any other document filed or required to be filed relating to Taxes.
Transition Services
Agreement
means the Transition Services Agreement contemplated by the Life Sciences SAPA, in the form referred to in
Section 9.03(b)
of the Company Disclosure Letter.
Treasury Regulation
shall mean the tax regulations promulgated under the Code.
Ultra Clean Packaging
means two-dimensional (formed by no more than two sheets) passive plastic-based packaging for storing
and transporting solid devices. For the avoidance of doubt, Ultra Clean Packaging does not include three-dimensional containers (including back-in-overpak configurations), containers for storing or transporting liquids/chemicals or containers with
active mechanisms such as mixing or dispensing components.
Section 9.04.
Rules of Construction
. Interpretation of this
Agreement (except as specifically provided in this Agreement, in which case such specified rules of construction shall govern with respect to this Agreement) shall be governed by the following rules of construction: (a) words in singular shall
be held to include the plural and vice versa, and words of one general shall be held to include the other gender as the context requires; (b) references made to an Article, a Section or an Exhibit, such reference shall be to an Article, a
Section or an Exhibit of or to this Agreement unless otherwise indicated; (c) the table of contents, index of defined terms and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement; (d) any capitalized term used in any Exhibit but not otherwise defined therein
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shall have the meaning assigned to such term in this Agreement; (e) the words include, includes or including are used in this Agreement, they shall be
deemed to be followed by the words without limitation; (f) the words hereof, hereto, hereby, herein and hereunder and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this Agreement; (g) the term or is not exclusive; (h) the word extent in the phrase to the extent shall mean the degree to which
a subject or other thing extends, and such phrase shall not mean simply if; (i) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (j) all pronouns and any
variations thereof refer to the masculine, feminine or neuter as the context may require; (k) any agreement, instrument or Applicable Law defined or referred to herein means such agreement, instrument or Applicable Law as from time to time
amended, modified or supplemented, unless otherwise specifically indicated; (l) references to a Person are also to its permitted successors and assigns; and (m) unless otherwise specifically indicated, all references to dollars
and $ will be deemed references to the lawful money of the United States of America.
Section 9.05.
Severability
.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Applicable Law or as a matter of public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties to this Agreement shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in a mutually acceptable manner in order
that the transactions contemplated by this Agreement be consummated as originally contemplated to the greatest extent possible.
Section 9.06.
Counterparts
. This Agreement may be executed in one or more counterparts, and by the different parties to each such
agreement in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement
electronically (including portable document format (.pdf)) or by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement.
Section 9.07.
Entire Agreement; No Third-Party Beneficiaries
. This Agreement and any exhibits, annexes or schedules hereto,
including the Company Disclosure Letter, together with the Confidentiality Agreement, constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, among the parties and their Affiliates, or any
of them, with respect to the subject matter hereof and thereof, and except for (i) if the Effective Time occurs, the right of the holders of Company Common Stock to receive the Merger Consideration and (ii) the provisions set forth in
Section 6.04
of this Agreement, are not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder;
provided
, that the Financing Sources and their respective Financing Related
Parties shall be third party beneficiaries of this
Section 9.07
and
Sections 8.04
,
8.05
,
9.08(d)
,
9.08(e)
and
9.11
and shall have the right to consent to any modification of this
Section 9.07
or
Section 8.04
,
8.05
,
9.08(d)
,
9.08(e)
or
9.11
(or of any definition set forth in, or other provision of, this Agreement to the extent the modification thereof would modify the
substance of this
Section 9.07
or
Section 8.04
,
8.05
,
9.08(d)
,
9.08(e)
or
9.11
) to the extent such modification directly affects their interests.
Section 9.08.
Governing Law; Jurisdiction; Waiver of Jury Trial
. (a) This Agreement and all claims or causes of action
(whether in contract or in tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware
applicable to contracts made and performed in such State without giving regard to any conflict of laws provisions that would require or permit the application of the Laws of any other jurisdiction.
(b) The parties hereto hereby irrevocably submit to the exclusive jurisdiction of any federal or state court located within the State of
Delaware over any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby and each party hereby irrevocably agrees that all claims in respect of such
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dispute or any suit, action proceeding related thereto may be heard and determined in such courts. The parties hereby irrevocably waive, to the fullest extent permitted by Applicable Law, any
objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(c) Each of the parties
hereto hereby irrevocably and unconditionally consents to service of process in the manner provided for notices in
Section 9.02
. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other
manner permitted by Law.
(d) Notwithstanding anything herein to the contrary, each of the parties hereto agrees that it will not bring or
support any action, cause of action, claim, cross-claim or third-party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against any Financing Source or any Financing Related Party in any way
relating to this Agreement or any of the transactions contemplated by this Agreement, including any dispute arising out of or relating in any way to the Debt Financing or the performance thereof, in any forum other than any federal court of the
United States of America located in, or, if that court does not have subject matter jurisdiction, in any state court located in, in each case, the Borough of Manhattan in the City of New York.
(e) EACH PARTY HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO
ANY DISPUTE DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY SUCH ACTION INVOLVING THE FINANCING SOURCES OR ANY FINANCING RELATED PARTY) OR ANY TRANSACTION CONTEMPLATED HEREBY. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF A DISPUTE, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.08
.
Section 9.09.
Assignment
. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in
whole or in part, by operation of law or otherwise, by any of the parties hereto without the prior written consent of the other parties hereto;
provided
that Parent and Merger Sub may grant a security interest in, and collaterally assign, any
of their rights under this Agreement in connection with the Debt Financing. No assignment by any party shall relieve such party of any of its obligations hereunder. Subject to the immediately preceding two sentences, this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns. Any purported assignment not permitted under this
Section 9.09
shall be null and void.
Section 9.10.
Specific Enforcement
. Each party hereto acknowledges and agrees that a breach by it of this Agreement would cause
irreparable damage to the other parties hereto and that no party hereto will have an adequate remedy at law. Therefore, it is agreed that each party shall be entitled, without the requirement of posting a bond or other security, to an injunction or
injunctions to prevent breaches of this Agreement. Such remedies shall, however, be cumulative and not exclusive and shall be in addition to any other remedies which any party may have under this Agreement or otherwise. Notwithstanding anything
herein to the contrary, it is acknowledged and agreed that, without limiting the Companys right to seek specific enforcement of the other obligations of the Parent and Merger Sub pursuant to this Agreement to the extent expressly permitted
hereunder, the Company shall be entitled to specific enforcement of Parents and Merger Subs obligations to consummate the Merger only in the event that each of the following conditions has been satisfied: (i) all of the conditions
set forth in
Section 7.01
and
7.02
have been satisfied or waived (other than those conditions that by their nature are to be satisfied or waived at the Closing and that are reasonably expected to be satisfied at the Closing),
(ii) Parent
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and Merger Sub fail to complete the Closing by the date the Closing is required to have occurred pursuant to
Section 1.02
, (iii) there has not been a Financing Failure, and
(iv) the Company has confirmed in a written notice delivered to Parent that if specific enforcement is granted and the Debt Financing is funded, then the Company is ready, willing and able to, and will, consummate the Closing. In addition, it
is agreed that the Company shall be entitled to enforce specifically Parents and Merger Subs obligation under this Agreement to draw upon the Debt Financing only if (i) all of the conditions to closing set forth in
Section 7.01
and
7.02
and all of the conditions precedent set forth in the Debt Commitment Letter have been satisfied or waived (other than those conditions that by their nature are to be satisfied or waived at the Closing but
that are reasonably expected to be satisfied at the Closing), (ii) the Company has confirmed in a written notice delivered to Parent that if specific enforcement is granted and the Debt Financing is funded, then, assuming performance by Parent
and Merger Sub of their respective obligations under this Agreement, then the Company is ready, willing and able to, and will, consummate the Closing, and (iii) the full proceeds to be provided to Parent by the Debt Financing in accordance with
its terms shall be available to Parent to consummate the Merger. For the avoidance of doubt, while the Company may pursue both a grant of specific enforcement (as and only to the extent expressly permitted by this
Section 9.10
) and the
payment of the Parent Termination Fee (as and only to the extent expressly permitted by
Section 8.03(f)
), under no circumstances shall the Company be permitted or entitled to receive both such grant of specific enforcement and payment of
the Parent Termination Fee. Each of the parties hereto expressly disclaims that it is owed any duties not expressly set forth in this Agreement, and waives and releases any and all tort claims and causes of action that may be based upon, arise out
of or relate to this Agreement, or the negotiation, execution or performance of this Agreement.
Section 9.11.
No Recourse to
Financing Sources
. Notwithstanding anything herein to the contrary, it is acknowledged and agreed that all claims, obligations, liabilities or causes of action, whether at law, in equity, in contract, in tort or otherwise, that may be based
upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, the negotiation, execution or performance of this Agreement (including any representation or warranty made in, in connection with,
or as an inducement to enter into, this Agreement) or the transactions contemplated by this Agreement may be made only against (and are those solely of) the entities that are expressly identified as parties to this Agreement in the Preamble to this
Agreement. Notwithstanding anything herein to the contrary, the Company agrees, on behalf of itself and its Affiliates and each of its and its Affiliates respective former, current or future general or limited partners, stockholders, managers,
members, controlling persons, agents or Representatives (collectively, the
Company Parties
) that the Financing Sources and each of their respective Financing Related Parties shall be subject to no liability or claims to the
Company Parties in connection with the Debt Financing or in any way relating to this Agreement or any of the transactions contemplated hereby or thereby, whether at law, in equity, in contract, in tort or otherwise.
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A-57
IN WITNESS WHEREOF, the Company, Parent and Merger Sub have duly executed this Agreement, all as of the date
first written above.
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ATMI, INC.
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By:
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/s/ Douglas A. Neugold
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Name:
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Douglas A. Neugold
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Title:
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Chairman, President and Chief Executive Officer
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ENTEGRIS, INC.
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By:
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/s/ Bertrand Loy
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Name:
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Bertrand Loy
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Title:
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President and Chief Executive Officer
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ATOMIC MERGER CORPORATION
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By:
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/s/ Bertrand Loy
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Name:
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Bertrand Loy
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Title:
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President
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A-58
Annex B
OPINION OF BARCLAYS CAPITAL INC.
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745 Seventh Avenue
New York, NY
10019
United States
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February 4, 2014
Board of Directors
ATMI, Inc.
7 Commerce Drive
Danbury, Connecticut 06810
Members of the Board of Directors:
We understand that ATMI, Inc. (the Company) intends to enter into a transaction (the Proposed Transaction) with
Entegris, Inc. (Parent) pursuant to which (i) Atomic Merger Corporation, a wholly owned subsidiary of Parent (Merger Sub), will be merged with and into the Company with the Company surviving the merger (the
Merger), and (ii) upon the effectiveness of the Merger, each issued and outstanding share of common stock of the Company (the Company Common Stock) (other than shares to be cancelled pursuant to the Agreement (as defined
below) and as to which dissenters rights have been properly exercised) will be converted into the right to receive $34.00 in cash (the Consideration). The terms and conditions of the Proposed Transaction are set forth in more detail in
the Agreement and Plan of Merger among the Company, Parent and Merger Sub (the Agreement). The summary of the Proposed Transaction set forth above is qualified in its entirety by the terms of the Agreement.
We have been requested by the Board of Directors of the Company to render our opinion with respect to the fairness, from a financial point of
view, to the Companys stockholders of the Consideration to be offered to such stockholders in the Proposed Transaction. We have not been requested to opine as to, and our opinion does not in any manner address, the Companys underlying
business decision to proceed with or effect the Proposed Transaction or the likelihood of consummation of the Proposed Transaction. Our opinion does not address the relative merits of the Proposed Transaction as compared to any other transaction or
business strategy in which the Company might engage. In addition, we express no opinion on, and our opinion does not in any manner address, the fairness of the amount or the nature of any compensation to any officers, directors or employees of any
parties to the Proposed Transaction, or any class of such persons, relative to the Consideration to be offered to the stockholders of the Company in the Proposed Transaction.
In arriving at our opinion, we reviewed and analyzed: (1) a draft of the Agreement, dated as of February 3, 2014, and the specific
terms of the Proposed Transaction; (2) publicly available information concerning the Company that we believe to be relevant to our analysis, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and Quarterly
Reports on Form 10-Q for the fiscal quarters ended March 31, 2013, June 30, 2013 and September 30, 2013; (3) financial and operating information with respect to the business, operations and prospects of the Company furnished
to us by the Company, including financial projections of the Company prepared by management of the Company; (4) a trading history of the Companys common stock and a comparison of that trading history with those of other companies that we
deemed relevant; (5) a comparison of the historical financial results and present financial condition of the Company with those of other companies that we deemed relevant; (6) a comparison of the financial terms of the Proposed Transaction
with the financial terms of certain other transactions that we deemed relevant; (7) the results of our efforts to solicit indications of interest and definitive proposals from third parties with respect to a sale of the Company; and
(8) published estimates of independent research analysts with respect to the future financial performance and price targets of the Company. In addition, we have had discussions with the management of the Company concerning its business,
operations, assets, liabilities, financial condition and prospects and have undertaken such other studies, analyses and investigations as we deemed appropriate.
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Page 2 of 3
In arriving at our opinion, we have assumed and relied upon the accuracy and completeness of
the financial and other information used by us without any independent verification of such information (and have not assumed responsibility or liability for any independent verification of such information) and have further relied upon the
assurances of the management of the Company that they are not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the financial projections of the Company, upon the advice of the Company, we
have assumed that such projections have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company as to the future financial performance of the Company. We assume no
responsibility for and we express no view as to any such projections or estimates or the assumptions on which they are based. In arriving at our opinion, we have not conducted a physical inspection of the properties and facilities of the Company and
have not made or obtained any evaluations or appraisals of the assets or liabilities of the Company. Our opinion necessarily is based upon market, economic and other conditions as they exist on, and can be evaluated as of, the date of this letter.
We assume no responsibility for updating or revising our opinion based on events or circumstances that may occur after the date of this letter.
We have assumed that the executed Agreement will conform in all material respects to the last draft reviewed by us. In addition, we have
assumed the accuracy of the representations and warranties contained in the Agreement and all agreements related thereto. We have also assumed, upon the advice of the Company, that all material governmental, regulatory and third party approvals,
consents and releases for the Proposed Transaction will be obtained within the constraints contemplated by the Agreement and that the Proposed Transaction will be consummated in accordance with the terms of the Agreement without waiver, modification
or amendment of any material term, condition or agreement thereof. We do not express any opinion as to any tax or other consequences that might result from the Proposed Transaction, nor does our opinion address any legal, tax, regulatory or
accounting matters, as to which we understand that the Company has obtained such advice as it deemed necessary from qualified professionals.
Based upon and subject to the foregoing, we are of the opinion as of the date hereof that, from a financial point of view, the Consideration
to be offered to the stockholders of the Company in the Proposed Transaction is fair to such stockholders.
We have acted as financial
advisor to the Company in connection with the Proposed Transaction and will receive a fee for our services, a portion of which is payable upon rendering this opinion and a substantial portion of which is contingent upon the consummation of the
Proposed Transaction. In addition, the Company has agreed to reimburse our expenses and indemnify us for certain liabilities that may arise out of our engagement. We have performed various investment banking and financial services for the Company in
the past, and expect to perform such services in the future, and have received, and expect to receive, customary fees for such services. Specifically, in the past two years, we have served as financial advisor to the Company is connection with the
pending sale of its Life Sciences business.
Barclays Capital Inc. and its affiliates engage in a wide range of businesses from investment
and commercial banking, lending, asset management and other financial and non-financial services. In the ordinary course of our business, we and our affiliates may actively trade and effect transactions in the equity, debt and/or other securities
(and any derivatives thereof) and financial instruments (including loans and other obligations) of the Company and Parent for our own account and for the accounts of our customers and, accordingly, may at any time hold long or short positions and
investments in such securities and financial instruments.
This opinion, the issuance of which has been approved by our Fairness Opinion
Committee, is for the use and benefit of the Board of Directors of the Company and is rendered to the Board of Directors in connection
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Page 3 of 3
with its consideration of the Proposed Transaction. This opinion is not intended to be and does not constitute a recommendation to any stockholder of the Company as to how such stockholder should
vote with respect to the Proposed Transaction.
Very truly yours,
/s/ Barclays Capital Inc.
BARCLAYS CAPITAL INC.
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Annex C
SECTION 262 OF THE DELAWARE GENERAL CORPORATION LAW
§ 262. Appraisal rights.
(a)
Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to
subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing pursuant to §228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholders shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section, the word stockholder means a holder of record of stock in a corporation; the words stock and share mean and include what is ordinarily
meant by those words; and the words depository receipt mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b)
Appraisal rights shall be available for the shares of any class or series of stock of a
constituent corporation in a merger or consolidation to be effected pursuant to §251 (other than a merger effected pursuant to §251(g) of this title and, subject to paragraph (b)(3) of this section, §251(h) of this title), §252,
§254, §255, §256, §257, §258, §263 or §264 of this title:
(1)
Provided, however, that ,
except as expressly provided in §363(b) of this title, no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of the meeting of stockholders to act upon the agreement of merger or consolidation, were either: (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders;
and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as
provided in §251(f) of this title.
(2)
Notwithstanding paragraph (b)(1) of this section, appraisal rights under this
section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§251, 252, 254, 255, 256, 257,
258, 263 and 264 of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving or resulting
from such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or held of record by
more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing paragraphs
(b)(2) a. and b. of this section; or
d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional
shares or fractional depository receipts described in the foregoing paragraphs (b)(2) a., b. and c. of this section.
(3)
In
the event all of the stock of a subsidiary Delaware corporation party to a merger effected under §251(h), §253 or §267 of this title is not owned by the parent immediately prior to the merger, appraisal rights shall be available for
the shares of the subsidiary Delaware corporation.
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(4)
In the event of an amendment to a corporations certificate of incorporation
contemplated by §363(a) of this title, appraisal rights shall be available as contemplated by §363(b) of this title, and the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as
nearly as practicable, with the word amendment substituted for the words merger or consolidation, and the word corporation substituted for the words constituent corporation and/or surviving or
resulting corporation.
(c)
Any corporation may provide in its certificate of incorporation that appraisal rights under
this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all
or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d)
Appraisal rights shall be perfected as follows:
(1)
If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for
approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for notice of such meeting (or such members who received notice in accordance
with §255(c) of this title) with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) of this section that appraisal rights are available for any or all of the shares of the constituent corporations, and
shall include in such notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of §114 of this title. Each stockholder electing to demand the appraisal of such stockholders shares shall
deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholders shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of
the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholders shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action
must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has
complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
(2)
If the merger or consolidation was approved pursuant to §228, §251(h), §253, or §267 of this title, then
either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent
corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such
notice a copy of this section and, if 1 of the constituent corporations is a nonstock corporation, a copy of §114 of this title. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify
such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice or, in the case of a merger approved pursuant to §251(h) of this
title, within the later of the consummation of the tender or exchange offer contemplated by §251(h) of this title and 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal
of such holders shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holders shares. If such notice
did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any
class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on
or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice or, in the case of a merger approved pursuant to
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§251(h) of this title, later than the later of the consummation of the tender or exchange offer contemplated by §251(h) of this title and 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holders shares in accordance with this subsection. An affidavit of the secretary or assistant secretary
or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders
entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the
merger or consolidation, the record date shall be such effective date. If no record date is fixed 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.
(e)
Within 120 days after the effective date of the merger or consolidation, the surviving or resulting
corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or
joined that proceeding as a named party shall have the right to withdraw such stockholders demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or
consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation
a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement
shall be mailed to the stockholder within 10 days after such stockholders written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for
appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such
person may, in such persons own name, file a petition or request from the corporation the statement described in this subsection.
(f)
Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting
corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to the surviving or resulting corporation and to the
stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington,
Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.
(g)
At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have
become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.
(h)
After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in
accordance with the rules of the Court of Chancery, including any rules specifically governing
C - 3
appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court 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 shall be compounded quarterly and shall accrue at 5% 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. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving
or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholders certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this section.
(i)
The Court shall direct the
payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated
stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Courts decree may be enforced as other decrees in the Court of Chancery may
be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.
(j)
The costs of
the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in
connection with the appraisal proceeding, including, without limitation, reasonable attorneys fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.
(k)
From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided
in subsection (d) of this section shall be entitled to vote such 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 or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving
or resulting corporation a written withdrawal of such stockholders demand for an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in
subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be
dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not
commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholders demand for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the
merger or consolidation, as set forth in subsection (e) of this section.
(l)
The shares of the surviving or resulting
corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation. (Last
amended by Ch. 72, L. 13, eff. only with respect to transactions consummated pursuant to agreements entered into after August 1, 2013 (or, in the case of mergers pursuant to Section 253, resolutions of the board of directors adopted after
August 1, 2013), and appraisal proceedings arising out of such transactions, and by Ch. 122, L. 13, eff. 8-1-13.)
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YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
Vote by
Internet or Telephone QUICK *** EASY
IMMEDIATE 24 Hours a Day, 7 Days a Week or by Mail
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ATMI, INC.
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Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and
returned your proxy card. Votes submitted electronically over the Internet or by telephone must be received by 7:00 p.m., Eastern Time, on [
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INTERNET/MOBILE
www.cstproxyvote.com
Use the Internet to vote your proxy. Have your proxy card available when you access the above website. Follow the prompts to vote your shares.
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PHONE
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(866) 894-0537
Use a touch-tone telephone to vote your proxy. Have your proxy card available when you call. Follow the voting instructions to vote your shares.
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PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY OR BY PHONE.
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MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope provided.
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PROXY
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Please mark
your votes
like this
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The Board of Directors recommends you vote FOR proposals 1, 2 and 3:
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PROPOSAL NO. 1
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To adopt the Agreement and Plan of Merger, dated as of February 4, 2014 (as it may be amended from time to time), by and among ATMI, Inc., Entegris, Inc. and Atomic Merger Corporation.
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PROPOSAL NO. 2
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To adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.
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PROPOSAL NO. 3
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To approve a non-binding advisory proposal to approve the golden parachute compensation payable to ATMIs named executive officers in connection with the merger.
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COMPANY ID:
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YES
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Please indicate if you plan to attend this meeting:
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PROXY NUMBER:
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Signature
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Signature (Joint Owners)
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Date
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, 2014.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor,
administrator, corporate officer, trustee, guardian, custodian or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation of partnership, please sign in full corporate or
partnership name, by authorized officer.
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Important Notice Regarding the Availability of Proxy Materials
for the Special Meeting of Stockholders to be held [
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2014
The Notice and Proxy Statement to
Stockholders are available
for review at http://www.cstproxy.com/atmi/sm2014
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Special Meeting of Stockholders
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[
l
], 2014, 10:00 a.m., EST
This proxy is solicited by the Board of Directors
ATMI, Inc.
7 Commerce Drive
Danbury, Connecticut 06810
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This proxy is solicited by the Board of Directors of ATMI, Inc. for use at the Special Meeting of
Stockholders of ATMI, Inc. to be held on [
l
], 2014 (Special Meeting) and at any adjournments or postponements thereof. This proxy, when properly executed,
will be voted as you specify on the reverse side. If no direction is made, the proxy will be voted in accordance with the recommendation of the Board of Directors on the matters listed on the reverse side of this card.
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By signing this proxy, you revoke all prior proxies and appoint Douglas A. Neugold and Timothy C. Carlson,
and each of them, as your proxies and attorneys-in-fact with full power of substitution and resubstitution to vote your shares on the matters shown on the reverse side. This proxy will be governed by and construed in accordance with the laws of the
State of Delaware and applicable federal securities laws.
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Address change/comments:
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(If you noted any Address Change and/or Comments above, please mark the corresponding box on the reverse side.)
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(Continued, and to be marked, dated and signed, on the other
side)
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