Item 1.01. Entry into a Material Definitive Agreement.
On
Pursuant to the Merger Agreement, each share of SDI's Class A Common Stock, par
value
As of the Effective Time, each then-outstanding stock option with respect to shares of SDI Common Stock will be cancelled and have no further force or effect. As of the Effective Time, each then-outstanding award of shares of SDI Common Stock granted under the Plan that are unvested or subject to a risk of forfeiture and awards of restricted stock units relating to shares of SDI Common Stock granted under the Plan will be cancelled and converted into the right to receive Merger Consideration in respect of each share of SDI Common Stock, less applicable withholdings, with each such holder's aggregate portion of merger consideration rounded up to the next whole share of TPB Common Stock.
The closing of the Merger is subject to certain mutual conditions, including (1)
the adoption of the Merger Agreement by the holders of at least a majority of
the aggregate voting power of the outstanding shares of SDI Common Stock; (2)
the absence of any order or law that has the effect of enjoining or otherwise
prohibiting the closing of the Merger or any of the other transactions
contemplated by the Merger Agreement and related transaction documents; (3) the
effectiveness of the registration statement on Form S-4 to be filed with the
SDI has agreed to divest its assets of SDI other than its TPB Common Stock and
has agreed that its net liabilities at closing will not exceed
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The Merger Agreement includes certain representations, warranties and covenants
of TPB, SDI and Merger Sub. In addition, TPB has agreed to non-solicitation
obligations with respect to any third-party acquisition proposals, and has
agreed to certain restrictions on its and its representatives' ability to
respond to any such proposals. The Board of Directors of TPB (the "TPB Board")
has also agreed to cause the shares of capital stock of Merger Sub to be voted
in favor of the Merger. The Board of Directors of SDI (the "SDI Board") has
agreed to recommend that its stockholders vote in favor of the adoption of the
Merger Agreement, subject to the right to change its recommendation in response
to a superior offer (as defined in the Merger Agreement), if the SDI Board
determines that a failure to change its recommendation would be inconsistent
with its fiduciary duties. In the event that the SDI Board changes its
recommendation, SDI may, prior to obtaining the required vote of the SDI
stockholder, terminate the Merger Agreement in order to enter into a definitive
agreement to consummate a superior offer and pay a termination fee of
The Merger Agreement includes termination provisions in favor of both TPB and
SDI. Either TPB or SDI may terminate the Merger Agreement if (i) the Merger has
not been consummated by
The TPB Board approved the Merger Agreement and the transactions contemplated thereby following the recommendation of an independent special committee of the TPB Board.
Based upon the recommendation of an independent special committee of the SDI Board, the SDI Board approved the Merger Agreement and the transactions contemplated thereby and agreed to recommend that the SDI stockholders adopt the Merger Agreement, subject to certain exceptions set forth in the Merger Agreement.
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.
The Merger Agreement and the above description have been included to provide investors and security holders with information regarding the terms of the Merger Agreement and the Merger. It is not intended to provide any other factual information about TPB, SDI or their respective subsidiaries or affiliates, including Merger Sub, or equityholders. The representations, warranties and covenants set forth in the Merger Agreement were made only for the purposes of that agreement and as of specific dates, were made solely for the benefit of the parties to the Merger Agreement (and the express third party beneficiaries described therein), may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, as well as by information contained in each party's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should be aware that the representations, warranties and covenants or any description thereof may not reflect the actual state of facts or condition of TPB, SDI, Merger Sub, or any of their respective subsidiaries, affiliates, businesses, or equityholders. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company. Accordingly, representations and warranties in the Merger Agreement should not be relied on as characterization of the actual state of facts about TPB or SDI.
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Item 9.01. Financial Statements and Exhibits.
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(d) Exhibits ExhibitName No. 2.1† Agreement and Plan of Merger and Reorganization, dated as ofApril 7, 2020 , by and among TPB, SDI and Merger Sub. 99.1 Joint Press Release, datedApril 8, 2020
† Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
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Caution Regarding Forward-Looking Statements
This communication includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements generally can be
identified by phrases such as "plan," "target," "goal," "believes," "intends,"
"expects," "anticipates," "foresees," "forecasts," "estimates" or other words or
phrases of similar import or future or conditional verbs such as will, may,
might, should, would, could, or similar variations. Similarly, statements herein
that describe the Merger, including its financial and operational impact, and
other statements of the parties' or management's plans, expectations,
objectives, projections, beliefs, intentions, goals, and statements about the
benefits of the Merger, the expected timing of completion of the Merger, and
other statements that are not historical facts are also forward-looking
statements. It is uncertain whether any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of them do, what
impact they will have on the results of operations and financial condition of
the combined companies or the price of TPB or SDI stock. These forward-looking
statements involve certain risks and uncertainties, many of which are beyond the
parties' control, that could cause actual results to differ materially from
those indicated in such forward-looking statements, including, but not limited
to, the unpredictability of the commercial success of TPB's businesses or
operations; the effects of dispositions of businesses or assets; potential
adverse reactions or changes to business or employee relationships, including
those resulting from the announcement or completion of the transactions;
competitive responses to the transactions; the ability of the parties to
consummate the Merger on a timely basis or at all and the satisfaction of the
conditions precedent to consummation of the Merger, including, but not limited
to, approval by SDI's stockholders; the possibility that the transactions may be
more expensive to complete than anticipated, including as a result of unexpected
factors or events; the ability of TPB to implement its plans, forecasts and
other expectations with respect to TPB's business after the completion of the
Merger; business disruption following the transaction; the Merger may not be
completed on the timeframe expected or at all; diversion of management's
attention from ongoing business operations and opportunities; litigation
relating to the transactions and the other risks and important factors contained
and identified in SDI's and TPB's filings with the
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither TPB nor SDI assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
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Additional Information
In connection with the Merger, TPB will file a registration statement on Form
S-4, which will include a document that serves as a prospectus of TPB and a
proxy statement of SDI (the "proxy statement/prospectus"), and each party will
file other documents regarding the Merger with the
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Participants in the Solicitation
TPB and SDI and their respective directors and executive officers and other
members of management and employees may be deemed to be participants in the
solicitation of proxies in respect of the Merger. Information about TPB's
directors and executive officers is available in TPB's proxy statement dated
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the
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