EVOA WATEPAR Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On
Merger Consideration
At the effective time of the Merger (the "Effective Time") and upon consummation
of the Merger, subject to the terms and conditions set forth in the Merger
Agreement, each share of the common stock, par value
Treatment of Company Equity Awards
The Merger Agreement provides that, at the Effective Time, each outstanding option to purchase Company Shares (a "Company Option") granted under any employee or director stock option, stock purchase or equity compensation plan, arrangement or agreement of the Company (the "Company Equity Plans"), whether vested or unvested, will cease to represent a right to acquire Company Shares and will be converted into an option to purchase Parent Shares (a "Parent Option") equal to (a) the number of Company Shares subject to each Company Option immediately prior to the Effective Time multiplied by (b) the Exchange Ratio, rounded down, if necessary, to the nearest whole share of Parent Shares, and such Parent Option will have an exercise price per share (rounded up to the nearest whole cent) equal to (i) the exercise price per share of Company Shares otherwise purchasable pursuant to such Company Option divided by (ii) the Exchange Ratio.
The Merger Agreement also provides that, at the Effective Time, each outstanding unvested restricted stock unit (a "Company RSU") and each outstanding unvested performance stock unit (a "Company PSU") granted under any Company Equity Plan will cease to represent a right to acquire Company Shares and will be converted (and, in the case of a Company PSU, at a target award level) into a Parent restricted stock unit which vests based on the passage of time (a "Parent RSU"). The number of Parent Shares subject to each such Parent RSU will be equal to (a) the number of Company Shares subject to each Company RSU or Company PSU, as applicable, immediately prior to the Effective Time multiplied by (b) the Exchange Ratio, rounded down, if necessary, to the nearest whole share of Parent Shares.
The Merger Agreement further provides that, at the Effective Time, each outstanding vested and unvested cash-settled stock appreciation right (a "Company SAR") granted under any Company Equity Plan will cease to represent an award that relates to Company Shares and will be converted into an award that relates to Parent Shares (a "Parent SAR") by multiplying the number of Company Shares relating to each such Company SAR immediately prior to the Effective Time by the Exchange Ratio (rounded down to the nearest whole share of Parent Shares), and each such Parent SAR will have a base price per share (rounded up to the nearest whole cent) equal to (a) the base price per share of Company Shares otherwise relating to such Company SAR immediately prior to the Effective Time divided by (b) the Exchange Ratio.
Conditions to the Parties' Obligations to Consummate the Merger
The consummation of the Merger is subject to the satisfaction or waiver of certain customary mutual conditions, including (a) the receipt of the required approvals from the Company's stockholders and Parent's shareholders, (b) receipt of required regulatory approvals under antitrust and foreign investment laws in applicable jurisdictions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Act (collectively,
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"Regulatory Clearances"), (c) the absence of any temporary or permanent order,
injunction, law or other legal restraint prohibiting or making illegal the
consummation of the Merger, (d) the Parent Shares issuable to the stockholders
of the Company in connection with the Merger having been approved for listing on
the
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 date of the Merger Agreement and as of the closing (subject to customary materiality qualifiers) and (b) compliance by the other party in all material respects with its respective pre-closing obligations under the Merger Agreement.
The Company's obligation to complete the Merger is also subject to the Company's receipt, prior to the Effective Time, of a satisfactory tax opinion concluding that (a) the Merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code (the "Code") and (b) the Company, Merger Sub and Parent will each be a "party to the reorganization" within the meaning of Section 368(b) of the Code.
The completion of the Merger is not conditioned on receipt of financing by Parent.
Representations, Warranties and Covenants
The Company and Parent have each made customary representations, warranties and covenants in the Merger Agreement. The Company and Parent have agreed, among other things, to covenants relating to (a) the conduct of their respective businesses during the interim period between the date of the Merger Agreement and the Effective Time, (b) non-solicitation obligations of the Company and Parent relating to alternative acquisition proposals, (c) the use of their respective reasonable best efforts, subject to certain additional obligations of Parent, to obtain all necessary governmental approvals in connection with the Merger, (d) the recommendation by the board of directors of the Company in favor of the adoption by its stockholders of the Merger Agreement, and (e) the recommendation by the board of directors of Parent in favor of shareholder approval of the Share Issuance.
The respective boards of directors of Parent and the Company have unanimously approved the Merger Agreement, and the board of directors of Parent has agreed to recommend that Parent's shareholders approve the Share Issuance. In addition, the board of directors of the Company has agreed to recommend that the Company's stockholders adopt the Merger Agreement.
Parent and the Company each have agreed not to directly or indirectly solicit alternative proposals and to terminate all existing discussions, negotiations and communications with any persons with respect to any alternative proposal. However, (i) the board of directors of Parent may, subject to certain conditions, respond to unsolicited proposals from third parties and withdraw its recommendation in favor of approval of the issuance of Parent common stock in connection with the Merger or terminate the Merger Agreement, and (ii) the Company board of directors may, subject to certain conditions, respond to unsolicited proposals from third parties and withdraw its recommendation in favor of adoption of the Merger Agreement or terminate the Merger Agreement, in each case, if, in connection with the receipt of an alternative proposal, Parent's board of directors or the Company's board of directors, as the case may be, determines in good faith, after consultation with its outside counsel, that (A) such alternative proposal constitutes or is reasonably likely to lead to a superior proposal and (B) a failure (1) to furnish information and provide access with respect to such corporation and its subsidiaries and (2) to participate in discussions or negotiations with the person making an alternative proposal would be reasonably likely to be inconsistent with its fiduciary duties. In addition, Parent's board of directors or the Company's board of directors, as the case may be, may withdraw its recommendation (but not terminate the Merger Agreement) if, in connection with a material event or circumstance occurring after the date of the Merger Agreement that was not known or reasonably foreseeable as of the date of the Merger Agreement, it determines in good faith, after consultation with its outside legal and financial advisor, that a failure to effect such a withdrawal of recommendation would be reasonably likely to be inconsistent with its fiduciary duties.
Termination Rights
The Merger Agreement contains certain termination rights that may be exercised by either the Company or Parent, including in the event that (a) both parties agree by mutual written consent to terminate the Merger Agreement, (b) the Merger is not consummated on or before the one year anniversary of the date of the Merger Agreement (the "Outside Date"), (c) (i) any order restraining, . . .
Item 8.01 Other Events.
On
Forward-Looking Statements
This document contains 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. Generally, the words "anticipate," "estimate," "expect," "project," "intend," "plan," "contemplate," "predict," "forecast," "likely," "believe," "target," "will," "could," "would," "should," "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements.
Such forward-looking statements, including those regarding the timing,
consummation and anticipated benefits of the transaction described herein,
involve risks and uncertainties. Parent's and the Company's experience and
results may differ materially from the experience and results anticipated in
such statements. The accuracy of such statements is subject to a number of
risks, uncertainties and assumptions including, but are not limited to, the
following factors: the risk that the conditions to the closing of the
transaction are not satisfied, including the risk that required approvals of the
transaction from the shareholders of Parent or stockholders of the Company or
from regulators are not obtained; litigation relating to the transaction;
uncertainties as to the timing of the consummation of the transaction and the
ability of each party to consummate the transaction; risks that the proposed
transaction disrupts the current plans or operations of Parent or the Company;
the ability of Parent and the Company to retain and hire key personnel;
competitive responses to the proposed transaction; unexpected costs, charges or
expenses resulting from the transaction; potential adverse reactions or changes
to relationships with customers, suppliers, distributors and other business
partners resulting from the announcement or completion of the transaction; the
combined company's ability to achieve the synergies expected from the
transaction, as well as delays, challenges and expenses associated with
integrating the combined company's existing businesses; the impact of overall
industry and general economic conditions, including inflation, interest rates
and related monetary policy by governments in response to inflation;
geopolitical events, including the war between
Additional Information and Where to Find It
In connection with the proposed transaction, Parent intends to file with the
Participants in the Solicitation
Parent, the Company and certain of their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information about the directors and
executive officers of Parent is set forth in Parent's proxy statement for its
2022 annual meeting of shareholders, which was filed with the
No Offer or Solicitation
This document is not intended to and shall 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, 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 such jurisdiction. No offer of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 2.1* Agreement and Plan of Merger, dated as ofJanuary 22, 2023 , by and amongEvoqua Water Technologies Corp. , Xylem Inc., andFore Merger Sub, Inc. 99.1 Joint Press Release, datedJanuary 23, 2023 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of
Regulation S-K.
of any omitted exhibit or schedule upon request.
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