COHERENT, INC. Item 1.01. Entry into a Material Definitive Agreement
Merger Agreement
On
Pursuant to the terms of the Merger Agreement, the acquisition of Coherent will be accomplished through a merger of Merger Sub I with and into Coherent (the "First Merger"), with Coherent surviving the First Merger, followed by a merger of Coherent with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the "Second Merger," and taken together with the First Merger, the "Mergers").
Pursuant to the terms of the Merger Agreement, and subject to the terms and
conditions set forth therein, at the effective time of the First Merger (the
"Effective Time"), each share of the common stock of Coherent (the "Coherent
Common Stock") issued and outstanding immediately prior to the Effective Time
(other than (x) shares of Coherent Common Stock owned by Lumentum, Coherent, or
any direct or indirect wholly owned subsidiary of Lumentum or Coherent or (y)
shares of Coherent Common Stock owned by stockholders who have properly
exercised and perfected appraisal rights under
(A)
(B) 1.1851 validly issued, fully paid and nonassessable shares of the common
stock of Lumentum, par value
Pursuant to the terms of the Merger Agreement, each Coherent restricted stock
unit award (a "Coherent RSU"), other than Director RSUs (as defined below),
outstanding immediately prior to the Effective Time will be automatically
converted into time-based restricted stock units denominated in shares of
Lumentum Common Stock entitling the holder to receive, upon settlement, a number
of shares Lumentum Common Stock equal to the number of shares of Coherent Common
Stock subject to the Coherent RSU multiplied by the sum of (A) the Exchange
Ratio, and (B) the quotient obtained by dividing the Cash Consideration by the
volume weighted average price of a share of Lumentum Common Stock for a 10
trading day period ending prior to the closing of the Mergers (the "Closing").
For Coherent RSUs subject to performance-based vesting conditions and metrics,
the number of shares of Lumentum Common Stock subject to the converted Coherent
RSUs will be determined after giving effect to the Coherent
The converted Coherent RSUs generally will be subject to the same terms and conditions that applied to the awards immediately prior to the Effective Time, provided that any Coherent RSUs subject to performance-based vesting conditions will be subject solely to time- and service-based vesting. Each Coherent RSU that is outstanding as of the date of the Merger Agreement that is outstanding as of immediately prior to the Effective Time will be entitled to the following vesting acceleration benefits:
(A) for any holder of Coherent RSUs who is a participant under Coherent's Change of Control and Leadership Change Severance Plan (the "CIC Plan"), the acceleration benefits under the CIC Plan upon such participant's involuntary termination of employment in accordance with the terms and conditions set forth therein and
(B) for any holder who is not a participant in the CIC Plan, the following
vesting acceleration benefits upon his or her termination of employment by
Coherent, Lumentum or their respective subsidiaries without "cause" within the
period beginning immediately following the date of the Closing and ending on the
date that is 12 months following the date of the Closing (or, if earlier,
Each Coherent RSU granted to a non-employee member of Coherent's Board of Directors ("Director RSUs") (whether or not vested) that is outstanding immediately prior to the Effective Time will, automatically vest in full and be cancelled and converted into the right to receive the Merger Consideration as if such Director RSU had been settled in shares of Coherent Common Stock immediately prior to the Effective Time.
The Boards of Directors of Coherent and Lumentum have unanimously approved the
Mergers and the Merger Agreement. The transaction is subject to customary
closing conditions, including the absence of certain legal impediments, the
expiration or termination of the required waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, antitrust
approvals in other applicable jurisdictions, including
The Merger Agreement contains customary representations, warranties and covenants of Coherent, Lumentum, Merger Sub I and Merger Sub II, including, among others, (i) covenants by Coherent concerning the conduct of its business in the ordinary course consistent with past practice during the interim period between the execution of the Merger Agreement and the Closing, (ii) covenants by Lumentum concerning the conduct of its business in the ordinary course consistent with past practice during the interim period between the execution of the Merger Agreement and the Closing, (iii) a covenant by Coherent and Lumentum that, subject to certain exceptions, the Board of Directors of each of Coherent and Lumentum will recommend to its stockholders the adoption of the Merger Agreement, (iv) a covenant that Lumentum and Coherent will not solicit, initiate, or knowingly encourage, facilitate or induce the making of an inquiry, offer or proposal that would reasonably be expected to lead to any Company or Parent Takeover Proposal, as applicable (each, as defined in the Merger Agreement), and (v) a covenant that Lumentum will obtain certain financing for the transaction and that Coherent will provide cooperation in connection therewith.
The Merger Agreement contains customary mutual termination rights for Coherent
and Lumentum, including if the Merger is not completed by
Pursuant to the Merger Agreement, Lumentum will add two members of Coherent's Board of Directors, designated by Coherent and reasonably acceptable to Lumentum, to Lumentum's Board of Directors at the Closing, each of whom must qualify as an "independent director" under applicable rules and regulations of the Nasdaq Global Select Market, and Lumentum has agreed to nominate them for reelection at Lumentum's first annual stockholders' meeting that occurs after the Closing.
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 2.1. We encourage you to read the Merger Agreement for a more complete understanding of the transaction. The Merger Agreement has been attached as an exhibit to this report to provide investors and security holders with information regarding its terms. The Merger Agreement is not intended to provide any factual information about Coherent, Lumentum, Merger Sub I or Merger Sub II.
Important Information and Where to Find It
This communication is being made in respect of a proposed business combination
involving Lumentum and Coherent. In connection with the proposed transaction,
Lumentum will file with the
Participants in the Solicitation
Coherent or Lumentum and their respective directors and executive officers may
be deemed to be participants in the solicitation of proxies in respect of the
proposed transaction. Information regarding Coherent's directors and executive
officers, including a description of their direct interests, by security
holdings or otherwise, is contained in Coherent's proxy statement for its 2020
annual meeting of stockholders which was filed with the
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of January 18, 2021 , by and
among Coherent, Inc. , Lumentum Holdings Inc., Cheetah Acquisition
Sub, Inc. and Cheetah Acquisition Sub LLC .*
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
*Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. A copy of any omitted schedule or exhibit will be furnished
supplementally to the
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