LYDALL, INC. Item 1.01 Entry Into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Subject to the terms and conditions set forth in the Merger Agreement, at the
effective time of the Merger (the "Effective Time"), each share of Company
common stock, par value
Pursuant to the Merger Agreement, at the Effective Time:
· Each award of (or with respect to) Company Common Stock (including any
restricted stock and restricted stock unit awards but not including stock options) (each, a "Company RSA") that is outstanding and unvested immediately prior to the Effective Time will automatically vest and be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the Merger Consideration multiplied by (ii) the number of shares of Company Common Stock underlying such award (including the value of any dividends accrued thereon);
· With respect to each Company RSA that is subject to performance conditions,
such performance conditions will be deemed to be earned at the greater of (i) the target amount and (ii) the amount reasonably projected to be earned based on performance achievement through the Effective Time;
· Each stock option to purchase Company Common Stock (whether or not vested) that
is outstanding immediately prior to the Effective Time (each, a "Company Option") will automatically vest and be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the excess, if any, of (A) the Merger Consideration over (B) the per-share exercise price for such Company Option multiplied by (ii) the total number of shares of Company Common Stock underlying such Company Option (and, for the avoidance of doubt, if the exercise price per share for such Company Option is equal to or greater than the Merger Consideration, such Company Option will be forfeited and cancelled without consideration); and
· Each Company Option that was intended to qualify as an "incentive stock option"
(each, an "Incentive Stock Option") within the meaning of Section 422 of the
Internal Revenue Code will, at least 10 business days prior to the Closing
(defined below), automatically vest and be exercisable for Company Common Stock
and each holder of Incentive Stock Options shall be provided with written
notice that such holder shall, during the period beginning on the date of such
notice and ending on the business day immediately preceding the Closing Date,
have the right to exercise such Incentive Stock Option by providing the Company
with notice of exercise and a cash amount equal to the applicable exercise
price (with each share of Company Common Stock acquired on exercise being
converted into the right to receive the Merger Consideration at the Effective
Time and each Incentive Stock Option not so exercised and that remains
outstanding immediately prior to the Effective Time being treated as a Company
Option).
If the Merger is consummated, the Company's securities will be de-listed from
the
The consummation of the Merger (the "Closing") is subject to certain customary mutual conditions, including (i) the approval of the Company's stockholders holding a majority of the outstanding shares of Company Common Stock, (ii) the expiration or termination of any waiting period applicable to the consummation of the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), and the expiration of applicable waiting periods or clearances of the Merger, as applicable, under the antitrust and foreign investment laws of certain other jurisdictions, and (iii) the absence of any order or law that prohibits, renders illegal or enjoins the consummation of the Merger. The obligation of each party to consummate the Merger is also conditioned upon (a) the accuracy of the representations and warranties of the other party as of the Closing (subject to customary materiality qualifiers), (b) compliance by the other party in all material respects with its pre-Closing obligations under the Merger Agreement and (c) in Parent's case, the absence of a material adverse effect with respect to the Company.
The Company and Parent have each made customary representations, warranties and covenants in the Merger Agreement. Subject to certain exceptions, the Company has agreed, among other things, to covenants relating to the conduct of its business during the interim period between the execution of the Merger Agreement and the consummation of the Merger. In addition, subject to certain exceptions, the Company has agreed to covenants relating to (i) the submission of the Merger Agreement to the Company's stockholders at a special meeting thereof for approval, (ii) the recommendation by the board of directors of the Company in favor of the adoption by the Company's stockholders of the Merger Agreement and (iii) non-solicitation obligations of the Company relating to alternative acquisition proposals.
Either the Company or Parent may terminate the Merger Agreement if (i) Parent,
Merger Sub and the Company agree by mutual written consent to do so, (ii) the
Merger has not been consummated on or before
If the Merger Agreement is terminated (i) by the Company in order for the
Company to enter into a definitive written agreement with respect to an
unsolicited superior acquisition proposal, (ii) by Parent because the board of
directors of the Company changes or adversely modifies its recommendation that
the Company's stockholders vote in favor of adopting the Merger Agreement, or
(iii) by (x) either party because approval of the Company's stockholders was not
obtained or (y) Parent in connection with the Company breaching its
representations, warranties or covenants in a manner that would cause the
related closing conditions to not be satisfied (subject to a cure period in
certain circumstances), but only if, in the case of this clause (iii), an
alternative acquisition proposal was previously made and, within 12 months after
termination of the Merger Agreement, an acquisition transaction is entered into
or consummated, then, in each case, the Company will be obligated to pay to
Parent a one-time fee equal to
If the Merger Agreement is terminated (i) by the
Item 8.01 Other Events.
On
Important Information For Investors And Stockholders
This communication does not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities or a solicitation of any
vote or approval. This communication relates to a proposed transaction between
Lydall and Parent. In connection with this proposed transaction, Lydall may file
one or more proxy statements or other documents with the
Participants in Solicitation
Lydall, Parent, their respective directors and certain of their respective
executive officers may be considered participants in the solicitation of proxies
in connection with the proposed transaction. Information about the directors and
executive officers of Lydall is set forth in its Annual Report on Form 10-K for
the fiscal year ended
These documents can be obtained free of charge from the sources indicated above.
Additional information regarding the participants in the proxy solicitations and
a description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement and other relevant materials
to be filed with the
Forward Looking Statements
This communication contains "forward-looking statements" within the Private
Securities Litigation Reform Act of 1995. Any statements contained in this
communication that are not statements of historical fact, including statements
about Lydall's ability to consummate the proposed transaction, the expected
benefits of the proposed transaction, the expected impact of the coronavirus
pandemic (COVID-19) on the Company's businesses, and optimizing profit and cash
flow generation may be deemed to be forward-looking statements. All such
forward-looking statements are intended to provide management's current
expectations for the future of the Company based on current expectations and
assumptions relating to the Company's business, the economy and other future
conditions. Forward-looking statements generally can be identified through the
use of words such as "believes," "anticipates," "may," "should," "will,"
"plans," "projects," "expects," "expectations," "estimates," "forecasts,"
"predicts," "targets," "prospects," "strategy," "signs," and other words of
similar meaning in connection with the discussion of future performance, plans,
actions or events. Because forward-looking statements relate to the future, they
are subject to inherent risks, uncertainties and changes in circumstances that
are difficult to predict. Such risks and uncertainties include, among others:
the failure to obtain the required vote of Lydall's stockholders, the timing to
consummate the proposed transaction, the risk that a condition of closing of the
proposed transaction may not be satisfied or that the closing of the proposed
transaction might otherwise not occur, the risk that a regulatory approval that
may be required for the proposed transaction is not obtained or is obtained
subject to conditions that are not anticipated, the diversion of management time
on transaction-related issues; risks related to disruption of management time
from ongoing business operations due to the proposed transaction, the risk that
any announcements relating to the proposed transaction could have adverse
effects on the market price of the common stock of Lydall, the risk that the
proposed transaction and its announcement could have an adverse effect on the
ability of Lydall to retain customers and retain and hire key personnel and
maintain relationships with its suppliers and customers, worldwide economic or
political changes that affect the markets that the Company's businesses serve
which could have an effect on demand for the Company's products and impact the
Company's profitability, challenges encountered by the Company in the execution
of restructuring programs, disruptions in the global credit and financial
markets, including diminished liquidity and credit availability, changes in
international trade agreements, including tariffs and trade restrictions,
disruptions in the Company's businesses from the coronavirus pandemic
(COVID-19), cyber-security vulnerabilities, foreign currency volatility, swings
in consumer confidence and spending, raw material pricing and supply issues,
retention of key employees, increases in fuel prices, and outcomes of legal
proceedings, claims and investigations. Accordingly, actual results may differ
materially from those contemplated by these forward-looking statements.
Investors, therefore, are cautioned against relying on any of these
forward-looking statements. They are neither statements of historical fact nor
guarantees or assurances of future performance. Additional information regarding
the factors that may cause actual results to differ materially from these
forward-looking statements is available in Lydall's filings with the
These forward-looking statements speak only as of the date of this communication, and Lydall does not assume any obligation to update or revise any forward-looking statement made in this communication or that may from time to time be made by or on behalf of the Company.
Item 9.01. Financial Statements and Exhibits.
Exhibit Number Description 2.1 Agreement and Plan of Merger by and amongLydall, Inc. ,Unifrax Holding Co. ,Outback Merger Sub, Inc. , and solely for purposes set forth therein,Unifrax I LLC , dated as ofJune 21, 2021 .* 99.1 Joint Press Release ofLydall, Inc. , dated as ofJune 21, 2021 . 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
* The schedules and exhibits have been omitted pursuant to Item 601(b)(2) of
Regulation S-K.
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