Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On
Under the terms of the Merger Agreement, at the effective time of the Merger
(the "Effective Time"), each issued and outstanding share of the Company's
common stock (each a "Company Share"), other than shares owned by Parent, Merger
Sub, or any wholly-owned subsidiary of the Company, or held in the Company's
treasury, will be cancelled and converted into the right to receive
The board of directors of the Company (the "Company Board") has unanimously approved and declared advisable the Merger Agreement, the Merger, and the other transactions contemplated thereby.
Completion of the transaction is subject to the satisfaction or waiver of
specified closing conditions, including (i) the approval of the Merger Agreement
by the holders of at least two-thirds of the issued and outstanding Company
Shares (the "Company Shareholder Approval"), and (ii) other customary closing
conditions, including the accuracy of each party's representations and
warranties (except where the failure of such representations and warranties to
be true and correct would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect (as defined in Merger
Agreement)), each party's performance in all material respects of its
obligations under the Merger Agreement, and the absence of a Company Material
Adverse Effect since the date of the Merger Agreement. Assuming the satisfaction
of the conditions, the Company expects the transaction to close in the fourth
calendar quarter of 2020. Holders of outstanding Company Shares that do not vote
in favor of the Merger are entitled to exercise dissenter's rights in accordance
with the terms, conditions and procedures of the General and Business
Corporation Law of
The Company has made customary representations and warranties in the Merger
Agreement that expire at the Effective Time, as well as customary covenants,
including covenants regarding the conduct of the business of the Company and its
subsidiaries prior to the consummation of the Merger. The Merger Agreement also
contains covenants that require, subject to certain limited exceptions, (i) the
Company to file a proxy statement with the
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The Merger Agreement prohibits the Company, its subsidiaries, and their respective representatives from soliciting, initiating, or knowingly taking any action to facilitate (including by way of furnishing information) the submission of any inquiries, or proposals that constitute or would reasonably be expected to lead to any Takeover Proposal (as defined in the Merger Agreement), or engage in any discussions or negotiations with respect thereto, or subject to certain exceptions, enter into an agreement relating to a Takeover Proposal. Subject to certain exceptions, the Company Board may not fail to make, withdraw, amend, modify, or materially qualify, in a manner adverse to Parent, the Company Board Recommendation, or approve, recommend, or resolve to, or publicly propose to, approve or recommend any Takeover Proposal (a "Company Adverse Recommendation Change"). However, prior to obtaining Company Shareholder Approval for the Merger (a) the Company may, subject to certain notice and other requirements, furnish information to and participate in discussions or negotiations with third parties with respect to an unsolicited Takeover Proposal that the Company Board determines in good faith, after consultation with its financial advisors and outside counsel, (x) constitutes or is reasonably likely to lead to a Superior Proposal (as defined in the Merger Agreement), and (y) that the failure to take such action would be inconsistent with its fiduciary duties to the Company's shareholders under applicable law, and (b) the Company Board may, subject to certain notice and other requirements, (x) effect a Company Adverse Recommendation Change and/or (y) terminate the Merger Agreement in order to enter into a definitive agreement with respect to an unsolicited Takeover Proposal, if the Company Board determines in good faith, after consultation with its financial advisors and outside counsel, that (1) such Takeover Proposal constitutes a Superior Proposal, after giving effect to all of the adjustments to the terms of the Merger Agreement which may be offered by Parent, and (2) failure to take such action would be inconsistent with its fiduciary duties to the Company's shareholders under applicable law.
The Merger Agreement contains certain termination rights, including the right of
either party to terminate the Merger Agreement if the Merger is not consummated
on or before
The foregoing summaries of the Merger Agreement and the transactions . . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with approving the Merger Agreement, the Company's Board of
Directors, effective upon the execution of the Merger Agreement, adopted three
transaction bonus plans that will become effective only upon the Closing of the
Merger and will result in bonuses being payable to each person serving on the
Company board of directors and all Company employees, including the persons
serving as executive officers. These new bonus plans are the (i)
For all transaction-related bonuses, the Company expects to pay aggregate
bonuses of
The foregoing description of the Board Member Bonus Plan, the Executive Bonus Plan and the Employee Bonus Plan does not purport to be complete and such description of each bonus plan is qualified in its entirety by reference to the Board Member Bonus Plan, the Executive Bonus Plan and the Employee Bonus Plan, which are filed herewith as Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4.
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Item 7.01 Regulation FD Disclosure
On
Forward Looking Statements
This report contains forward-looking statements, which are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally can be identified by use of
statements that include, but are not limited to, phrases such as "anticipate,"
"believe," "expect," "future," "intend," "plan," and similar expressions to
identify forward-looking statements. Forward-looking statements include, without
limitation, the satisfaction of the conditions to closing the transaction in the
anticipated timeframe or at all, the financing of the transaction, risks related
to the financing of the transaction, the effect of the announcement of the
transaction on the ability of the Company to retain and hire key personnel and
maintain relationships with its customers, suppliers, partners, and others with
whom it does business, or on its operating results and businesses generally, and
the Company's ability to increase income streams, to grow revenue and earnings.
These statements are only predictions and are subject to certain risks,
uncertainties, and assumptions, which include, but are not limited to, those
identified and described in the Company's public filings with the
Additional Information and Where to Find It
In connection with the proposed transaction, the Company plans to file relevant
materials with the
Participants in the Solicitation
The Company and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the Company shareholders with
respect to the proposed transaction. Information about the directors and
executive officers of the Company is set forth in the Company's Annual Report on
Form 10-K for the year ended
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 2.1 Agreement and Plan of Merger datedSeptember 17, 2020 , by and amongTorotel, Inc. ,TT Group Industries, Inc. andThunder Merger Sub, Inc. * 10.1 Form of Voting Agreement 10.2Torotel, Inc. Transaction Bonus Plan for Board Members 10.3Torotel, Inc. Additional Transactional Bonus Plan for Executives 10.4Torotel, Inc. Transaction Bonus Plan for Employees** 99.1 Press Release datedSeptember 17, 2020
* Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K.
**Portions of Exhibit A to the Torotel Transaction Bonus Plan for Employees have been omitted.
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