Introductory Note
As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on January 23, 2023 by Xylem Inc., an Indiana corporation (the “Company”), the Company, Fore Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), and Evoqua Water Technologies Corp., a Delaware corporation (“Evoqua”), entered into an Agreement and Plan of Merger, dated as of January 22, 2023 (the “Merger Agreement”), which provided for, among other things, the merger (the “Merger”) of Merger Sub with and into Evoqua, with Evoqua continuing as the surviving corporation.
| Item 2.01 | Completion of Acquisition or Disposition of Assets |
On May 24, 2023, the Merger was consummated in accordance with the terms of the Merger Agreement.
As previously disclosed and pursuant to the terms and conditions of the Merger Agreement, upon the effective time of the Merger (the “Effective Time”), each share of Evoqua common stock, par value $0.01 per share (“Evoqua Common Stock”), issued and outstanding immediately prior to the Effective Time, was automatically converted into the right to receive 0.48 shares (the “Exchange Ratio”) of the Company’s common stock, $0.01 par value per share (“Xylem Common Stock”), with cash paid in lieu of any fractional shares.
In addition, at the Effective Time, (i) all outstanding options to purchase Evoqua Common Stock converted into corresponding options to purchase shares of Xylem Common Stock, (ii) all outstanding unvested restricted stock units with respect to Evoqua Common Stock converted into corresponding restricted stock units with respect to shares of Xylem Common Stock, (iii) all outstanding unvested performance stock units with respect to Evoqua Common Stock converted into restricted stock units with respect to shares of Xylem Common Stock, with performance criteria deemed satisfied based on the achievement levels set forth in the Merger Agreement, and (iv) all outstanding vested and unvested cash-settled stock appreciation rights with respect to Evoqua Common Stock converted into corresponding cash-settled stock appreciation rights with respect to Xylem Common Stock ((i), (ii), (iii) and (iv) collectively, the “Converted Awards”), in each case, based on the Exchange Ratio. The exercise price of each such converted stock option will be equal to the exercise price of such option in effect immediately prior to the Effective Time, divided by the Exchange Ratio, rounded up to the nearest whole cent. The Converted Awards will otherwise continue to be governed by substantially the same general terms and conditions as applicable to such Converted Awards as in effect immediately prior to the Effective Time.
Accordingly, as a result of the Merger, the Company (i) expects to deliver to Evoqua’s stockholders an approximate aggregate total of 58,779,100 shares of Xylem Common Stock in exchange for shares of Evoqua Common Stock that were outstanding immediately prior to the Effective Time; and (ii) has reserved for issuance a maximum of 2,700,000 shares of Xylem Common Stock for issuance upon the exercise of the Converted Awards.
The above-described shares of Xylem Common Stock issued or reserved for issuance in connection with the Merger were registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a registration statement on Form S-4 (File No. 333-270379) filed with the SEC, and declared effective on April 6, 2023. The joint proxy statement/prospectus of the Company and Evoqua included in the registration statement on Form S-4, including the information incorporated by reference therein, contains additional information about the Merger.
The foregoing description of the Merger Agreement and the transactions contemplated thereby is only a summary and is qualified in its entirety by reference to the complete text of the Merger Agreement, which is filed as Exhibit 2.1 hereto.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers |
On May 19, 2023, the Board of Directors (the “Board”) of the Company increased the size of the Board from 10 to 12 directors, and, pursuant to the terms of the Merger Agreement, appointed Lisa Glatch and Lynn C. Swann as
