COVANTA HOLDING CORPORATION Item 1.01. Entry into a Material Definitive Agreement
Merger Agreement
On
Transaction Structure
At the effective time of the Merger (the "Effective Time"), each share of
Class A common stock, par value
Unless otherwise agreed between Parent and the holder thereof, effective as of
immediately prior to the Effective Time, each option to purchase shares of
Company Stock that is outstanding and unexercised as of immediately prior to the
Effective Time (a "Company Stock Option"), whether vested or unvested, will
automatically be cancelled and converted into the right to receive a cash
payment from the
Unless otherwise agreed between Parent and the holder thereof, effective as of
immediately prior to the Effective Time, each award of Company restricted stock
units that is outstanding as of immediately prior to the Effective Time (a
"Company RSU"), whether vested or unvested, will automatically be cancelled and
converted into the right to receive a cash payment from the
Unless otherwise agreed between Parent and the holder thereof, effective as of
immediately prior to the Effective Time, each award of Company performance stock
units that is outstanding and unvested as of immediately prior to the Effective
Time (a "Company PSU") will be (i) deemed earned based on actual performance
through the latest practicable date prior to the Closing, which level of actual
performance will be determined in good faith by the Company at or before the
Closing, and (ii) cancelled and converted into the right to receive a cash
payment from the
Unless otherwise agreed between the Parent and the holder thereof, effective as of immediately prior to the Effective Time, each share of Company restricted stock that is outstanding as of immediately prior to the Effective Time ("Company Restricted Stock") will automatically vest in full, all restrictions (including forfeiture restrictions) otherwise applicable to such vested Company Restricted Stock will lapse and such vested Company Restricted Stock will be converted into the right to receive the Merger Consideration, without any interest and subject to all applicable withholding.
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Parent has secured committed financing in connection with the Merger, consisting of a combination of (i) equity to be provided by certain affiliates of EQT, who have agreed to capitalize Parent subject to the terms and conditions set forth in an equity commitment letter, and (ii) debt financing to be provided by the sources thereof, subject to the terms and conditions set forth in a debt commitment letter.
Conditions to the Merger
The Company's board of directors has unanimously approved the Merger Agreement,
the Merger and the other transactions contemplated thereby. The consummation of
the Merger is subject to the satisfaction or waiver of certain customary
conditions, including, among others: (i) adoption of the Merger Agreement by the
holders of a majority of the issued and outstanding shares of Company Stock (the
"Company Stockholder Approval"), (ii) the expiration or termination of the
required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and approvals required under certain foreign antitrust
laws, (iii) approval by the
The Company and Parent's respective obligations to consummate the Merger are also subject to certain additional customary conditions, including (i) with respect to the accuracy of representations and warranties of the other party, subject to certain materiality qualifiers, (ii) performance by the other party of its covenants in all material respects and (iii) with respect to Parent's obligation to consummate the Merger, since the date of the Merger Agreement, no material adverse effect with respect to the Company having occurred.
The Merger is not subject to any financing contingency.
Non-Solicit
The Company has agreed, among other things, (i) to immediately terminate any existing discussions or negotiations with any third party with respect to a company acquisition proposal or any inquiry, proposal or offer that constitutes or could reasonably be expected to lead to a company acquisition proposal and (ii)(A) not to solicit, initiate or knowingly encourage any company acquisition proposals or any inquiries, proposals or offers that constitute, or could reasonably be expected to lead to, a company acquisition proposal, (B) not to participate in any negotiations or discussions regarding, or furnish to any third party any nonpublic information relating to the Company or its subsidiaries, or provide access to the properties or personnel of the Company and its subsidiaries, in each case, in connection with any company acquisition proposal or any inquiries, proposals or offers that constitute, or could reasonably be expected to lead to, a company acquisition proposal, (C) not to approve or recommend, or make any public statement approving or recommending, a . . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
In connection with the execution of the Merger Agreement, the Company's board of directors approved the Covanta Holding Corporation Excise Tax Gross-Up Plan and authorized the Company to enter into participation agreements with eligible participants, including the Company's executive officers (collectively, the "Plan"). The Plan provides that if an eligible participant will become entitled to payments and benefits in connection with the Merger that are deemed "excess parachute payments" under Sections 280G and 4999 of the Internal Revenue Code (the "Code") as amended, such eligible participants will be entitled to receive an additional payment from the Company in an amount such that, after payment by the individual of all applicable taxes on the parachute payments and this additional payment (including any excise tax that could be imposed under Section 4999 of the Code), the individual will be in the same after tax position as if no excise tax were imposed on the parachute payments.
The description of Plan does not purport to be complete and is subject to and qualified in its entirety by the complete text of the Plan, a copy of is filed as Exhibit 10.2 hereto and incorporated by reference into this report in its entirety.
Item 7.01. Regulation FD Disclosure
On
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval. This
communication may be deemed to be solicitation material in respect of the
proposed merger between the Company and Merger Sub. In connection with the
proposed merger, the Company intends to file a proxy statement with the
PARTICIPANTS IN THE MERGER SOLICITATION
The Company and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the Company's stockholders in
respect of the proposed merger. Information about the directors and executive
officers of the Company is set forth in the Company's annual Proxy, which was
filed with the
FORWARD-LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking"
statements as defined in Section 27A of the Securities Act of 1933 (the
"Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the
"Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the
"PSLRA") or in releases made by the
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description of Exhibits 2.1 Agreement and Plan of Merger, dated as ofJuly 14, 2021 , by and among the Company, Parent and Merger Sub* 10.1 Voting Agreement, dated as ofJuly 14, 2021 , between and among certain stockholders of the Company and Parent 10.2 Covanta Holding Corporation Excise Tax Gross-Up Plan 104 Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101)
* Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K.
the
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