TRECORA RESOURCES Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
The Company's Board of Directors (the "Board") unanimously determined that the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are advisable, fair to and in the best interests of the Company and its stockholders, and approved the Merger Agreement and the transactions contemplated thereby, and recommended that the stockholders of the Company accept the Offer and tender their Shares in the Offer.
The Offer, once commenced, will initially remain open for a minimum of 20 business days, subject to certain possible extensions on the terms set forth in the Merger Agreement (as extended, the "Expiration Time"). If at the scheduled Expiration Time any of the conditions to the Offer have not been satisfied or waived, then Merger Sub may (and, if requested by the Company, shall) extend the Offer for one or more consecutive periods of up to 10 business days each (or any other period as may be approved in advance by the Company) to permit the satisfaction of all Offer conditions, except that if the sole remaining unsatisfied Offer condition is the Minimum Condition (as defined below), Merger Sub shall not be required (but in its sole discretion may elect) to extend the Offer for more than three occasions in consecutive periods of 10 Business Days each (or such other period as may be approved in advance by the parties).
Upon the consummation of the Offer, Merger Sub will merge with and into the Company (the "Merger") pursuant to Section 251(h) of the Delaware General Corporation Law (the "DGCL") with the Company continuing as the surviving corporation (the "Surviving Corporation") and wholly-owned subsidiary of Parent following the effectiveness of the Merger.
Merger Sub's obligation to purchase the Shares validly tendered and not validly withdrawn pursuant to the Offer is subject to the satisfaction or waiver of customary conditions, including, among others, (i) there being validly tendered and not validly withdrawn immediately prior to the Expiration Time the number of Shares that, together with any Shares held, if any, by Parent, Merger Sub or any of their respective affiliates, represents at least a majority of all then outstanding Shares as of the Expiration Time (the "Minimum Condition"), (ii) the absence of any law, injunction, judgment or other legal restraint that prohibits consummation of the Offer or the Merger, (iii) the accuracy of the representations and warranties of the Company contained in the Merger Agreement, subject to customary exceptions, (iv) the Company's compliance in all material respects with its covenants and agreements contained in the Merger Agreement, and (v) the absence of any continuing event, development or circumstance that has had or would reasonably be expected to have a material adverse effect on the Company, as well as other customary conditions set forth in Annex A to the Merger Agreement.
At the effective time of the Merger (the "Effective Time"), each Share (other than Shares (i) owned directly by the Company (or any wholly owned subsidiary of the Company), Parent, Merger Sub or any of their respective affiliates prior to the Effective Time or (ii) owned by any stockholder who is entitled to demand and properly demands the appraisal of such shares in accordance with, and in compliance in all respects with, Section 262 of the DGCL) will be automatically cancelled and converted into the right to receive an amount in cash equal to the Offer Price, without interest and subject to applicable withholding (the "Merger Consideration").
2
--------------------------------------------------------------------------------
In addition, immediately prior to the Effective Time, (i) each Company stock
option that is outstanding and unexercised, whether vested or unvested, shall be
automatically cancelled and terminated and converted into the right to receive
from the
Item 3.03. Material Modification to Rights of Security Holders.
Pursuant to the terms of the Merger Agreement, on
The Board adopted the Rights Agreement to assist its oversight of a fair and orderly process involving a sale of the Company. The Rights Agreement will not in any way prevent the Offer or Merger from occurring, nor will it prevent or restrict any person from making a Superior Company Proposal pursuant to the terms of the Merger Agreement. In general terms, the Rights Agreement would impose a significant penalty upon any person or group that acquires 10% or more of the Shares without the approval of the Board. If a stockholder's beneficial ownership of the Shares as of the time of the public announcement of the Rights Agreement and associated dividend declaration is at or above the 10% threshold, such stockholder's existing ownership percentage would be grandfathered. However, the Rights would become exercisable if at any time after such announcement, the stockholder increases its ownership percentage by one additional Share. The Rights Agreement will not interfere with any merger or other business combination approved by the Board.
Each Right entitles its holder, under the circumstances described below, to
purchase from the Company one half of a Share. The purchase price for each whole
Share pursuant to the exercise of a Right is initially
4
--------------------------------------------------------------------------------
The Rights. The Board authorized the issuance of a Right with respect to each outstanding Share as of the Record Date. Initially, the Rights are associated with each Share and evidenced by common stock certificates or, in the case of uncertificated Shares, the book-entry account that evidences record ownership of such Shares, which will contain a notation incorporating the Rights Agreement by reference, and are transferable with and only with the underlying Shares. New Rights will attach to any Share that becomes outstanding after the Record Date and prior to the earlier of the distribution time and the expiration time (each, as described below).
Separation and Distribution of Rights; Exercisability. Subject to certain exceptions, the Rights become exercisable and trade separately from the Shares only upon the "distribution time," which occurs upon the earlier of:
• the close of business on the tenth day after the first date (the "stock
acquisition date") of public announcement that a person, or group of
affiliated or associated persons, has acquired, or obtained the right or
obligation to acquire, beneficial ownership of 10% or more of the
outstanding Shares, including in the form of synthetic interests through
derivative positions (any such person, or group of affiliated or
associated persons, being referred to herein as an "acquiring person") or
• the close of business on the tenth business day (or later date if
determined by the Board prior to such time as any person or group becomes
an acquiring person) following the commencement of a tender offer or
exchange offer which, if consummated, would result in a person or group
becoming an acquiring person.
An acquiring person does not include the Company, any subsidiary of the Company, any employee benefit plan of the Company or of any subsidiary of the Company or any person that, as of immediately prior to the first public announcement of the adoption of the Rights Agreement, beneficially owns 10% or more of the outstanding Shares, including in the form of synthetic interests through derivative positions. Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Shares or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are treated as beneficial ownership of the number of Shares equivalent to the economic exposure created by the derivative position, to the extent actual Shares are directly or indirectly held by counterparties to the derivatives contracts or their affiliates or associates. Notwithstanding the foregoing, such person would be an "acquiring person" if such person, at any time after the first public announcement of the adoption of the Rights Agreement, beneficially owns any Shares (with certain exceptions) in addition to the Shares beneficially owned by such person as of immediately prior to the first public announcement of the adoption of the Rights Agreement.
Until the distribution time, the surrender for transfer of any Shares outstanding will also constitute the transfer of the Rights associated with those shares. As soon as practicable after the distribution time, separate rights certificates will be mailed to holders of record of Shares as of the close of business at the distribution time. From and after the distribution time, the separate rights certificates alone will represent the Rights. Except as otherwise provided in the Rights Agreement, only Shares issued prior to the distribution time will be issued with Rights.
The Rights are not exercisable until the distribution time.
Expiration Time. Unless earlier redeemed or exchanged by the Company as . . .
Item 7.01. Regulation FD Disclosure.
On
In accordance with General Instruction B.2 of Form 8-K, the foregoing information, including Exhibit 99.1, shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall such information, including Exhibit 99.1, be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
6
--------------------------------------------------------------------------------
Item 8.01. Other Events. Support Agreement
In connection with the execution of the Merger Agreement, Parent entered into a tender and support agreement (the "Support Agreement") with certain current directors and executive officers of the Company who own Shares, pursuant to which the foregoing parties agreed, among other things, and subject to the terms thereof, to irrevocably tender their Shares into the Offer. As of the date of the Merger Agreement, the Shares subject to the Support Agreement comprised approximately 4.2% of the outstanding Shares. The Support Agreement will terminate upon certain circumstances, including upon valid termination of the Merger Agreement.
The foregoing description of the Support Agreement does not purport to be complete and is qualified in its entirety by reference to the form of Support Agreement, a copy of which is filed as Exhibit 99.2 to this Current Report and incorporated herein by reference.
Financing Commitments
Parent has obtained equity and debt financing commitments for the transactions
contemplated by the Merger Agreement, the aggregate proceeds of which will be
sufficient for Parent to pay the aggregate
Parent and certain commitment parties have entered into separate debt commitment
letters, each dated
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits: Exhibit No. Description 2.1 Agreement and Plan of Merger, dated as ofMay 11, 2022 , by and amongTrecora Resources ,Balmoral Swan Parent, Inc. , andBalmoral Swan MergerSub, Inc. 4.1 Rights Agreement, dated as ofMay 11, 2022 , by and between TrecoraResources andComputershare Trust Company , N.A., as rights agent 99.1 Press Release issued byTrecora Resources onMay 11, 2022 99.2 Form of Support Agreement 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 7
--------------------------------------------------------------------------------
© Edgar Online, source
