The Merger Agreement includes a remedy of specific performance for the Company, Parent and Purchaser. The Merger Agreement also includes customary termination provisions for both the Company and Parent and provides that, in connection with the termination of the Merger Agreement under specified circumstances, including termination by the Company to accept and enter into a definitive agreement with respect to an unsolicited superior offer, the Company will be required to pay a termination fee of an amount in cash equal to $3 million (the “Termination Fee”). Any such termination of the Merger Agreement by the Company is subject to certain conditions, including the Company’s compliance with certain procedures set forth in the Merger Agreement and a determination by the board of directors of the Company that the failure to take such action would be inconsistent with the board’s fiduciary duties to the Company’s stockholders under applicable law, payment of the Termination Fee by the Company and the execution of a definitive agreement by the Company with such third party.
Support Agreement
In connection with entering into the Merger Agreement, Parent and Purchaser entered into a Tender and Support Agreement (“Support Agreement”), dated as of September 16, 2018, with the current directors and named executive officers of the Company listed on the signature pages thereto (each, a “Supporting Stockholder” and, collectively, the “Supporting Stockholders”), which together own approximately 2.52% of the outstanding shares of Common Stock as of September 16, 2018. A total of 6,599,347 shares of Common Stock issuable upon the exercise of stock options are subject to the Support Agreement. Of the shares issuable upon the exercise of stock options, 4,833,297 of such stock options have an exercise price that is greater than the Offer Price.
Pursuant to and subject to the terms and conditions of the Support Agreement, each Supporting Stockholder has agreed to tender or cause to be tendered in the Offer all shares of Common Stock beneficially owned by such Supporting Stockholder, including shares of Common Stock that are issued to or otherwise directly or indirectly acquired by such Supporting Stocking prior to the termination of the Support Agreement, including for the avoidance of doubt any shares of Common Stock acquired by such Supporting Stockholder upon the exercise of Company Options. In addition, each Supporting Stockholder has agreed that, during the time the Support Agreement is in effect, at any meeting of the Company’s stockholders, or any adjournment or postponement thereof, such Supporting Stockholder will be present (in person or by proxy) and vote (or cause to be voted), or deliver (or cause to be delivered) a written consent with respect to, all of its shares of Common Stock: (i) against any action or agreement that would reasonably be expected to (a) result in a breach of any covenant, representation or warranty or any other obligation of the Company contained in the Merger Agreement, or of any Supporting Stockholder contained in the Support Agreement, or (b) result in any of the Offer Conditions or the conditions to the Merger set forth in the Merger Agreement not being satisfied on or prior 5 p.m. Eastern Time on January 14, 2019 (such date, the “End Date”); (ii) against any change in the membership of the Company Board; and (iii) against any Acquisition Proposal (as such term is defined in the Merger Agreement attached hereto asExhibit 1) and against any other action, agreement or transaction involving the Company that is intended, or would reasonably be expected, to impede, interfere with, delay, postpone, adversely affect or prevent the consummation of the Offer or the Merger or the other transactions contemplated by the Merger Agreement.
Each Supporting Stockholder also granted Parent an irrevocable proxy with respect to the foregoing, subject to the terms and conditions of the Support Agreement.
The Supporting Stockholders further agreed to certain restrictions with respect to their shares of Common Stock, including restrictions on transfer, and agreed to comply with specifiednon-solicitation provisions with respect to any Acquisition Proposal.
The Support Agreement will terminate with respect to a particular Supporting Stockholder upon the first to occur of (a) the valid termination of the Merger Agreement in accordance with its terms, (b) the Effective Time, (c) the mutual written consent of Parent and such Supporting Stockholder and (d) any amendment or modification to the Merger Agreement, or waiver of any of the Company’s rights under the Merger Agreement, in each case, that results in a decrease in, or change in the form of, the Offer Price or an extension of the End Date (unless such Supporting Stockholder consents in writing in advance to such amendment or waiver).
Open Market Purchases
Between October 2008 and November 2008 Firmenich International purchased an aggregate of 1,300,000 shares of Common Stock in open market purchases, at an average purchase price of approximately $2.70 per share for an aggregate purchase price of approximately $3.5 million.
Additional Information
The foregoing descriptions of (i) the Merger Agreement and the transactions contemplated thereby and (ii) the Support Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement, which is filed asExhibit 1 hereto and is incorporated herein by reference and to the Support Agreement, which is filed asExhibit 2 hereto and is incorporated herein by reference. Schedule A to the Support Agreement lists the names and number of shares of Common Stock that are beneficially held by each Supporting Stockholder.
The purpose of the Offer and the Merger is for Parent, through Purchaser, to acquire control of, and the entire equity interest in, the Company. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of all of the shares of Common Stock. The purpose of the Merger is for Parent to acquire all of the stock of the Company not purchased pursuant to the Offer or otherwise subject to the terms and conditions set forth in the Merger Agreement. The Supporting Stockholders entered into the Support Agreement as an inducement to Parent’s and Purchaser’s willingness to enter into the Merger Agreement. Upon consummation of the Merger, the Merger will be consummated in accordance with Section 251(h) of the DGCL. At the Effective Time, the certificate of incorporation of the Company, as amended, will be amended and restated in its entirety in the form attached to the Merger Agreement, and, as so amended and restated, will be the certificate of incorporation of the Surviving Corporation until further amended. Also at the Effective Time, the bylaws of the Company, as amended, will be amended and restated in their entirety in the form attached to the Merger Agreement, and, as so amended and restated, will be the bylaws of the Surviving Corporation until further amended. At the Effective Time, the directors of Purchaser will become the directors of the Surviving Corporation and the officers of the Company will be the officers of the Surviving Corporation, each until their respective successors are duly elected or appointed. Following the Merger, Parent intends to consider whether further changes to the roster of officers is necessary or advisable in order to facilitate the integration of the Surviving Corporation into the Parent’s group of companies.
Prior to the Effective Time, the Company has agreed to cooperate with Parent and to use its reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable under applicable laws and rules and policies of the NASDAQ to enable delisting by the Surviving Corporation of the shares of Common Stock from the NASDAQ and the deregistration of the shares of Common Stock under the Exchange Act as promptly as practicable after the Effective Time, and in any event no more than ten days after the date on which the closing of the Merger occurs.
Except as disclosed in this Schedule 13D, neither Firmenich International, Parent nor Purchaser has any present plan or proposal that would result in an extraordinary corporate transaction involving the Company or any of its subsidiaries, such as a merger, reorganization, liquidation, relocation of operations, or sale or transfer of a material amount of assets, or any material changes in the Company’s capitalization, corporate structure or business. After the Merger, Parent may cause the Surviving Corporation to be transferred to one or more of its affiliates for internal structuring reasons, but no such transfer will affect Parent’s obligations under the Merger Agreement.
This communication is not a recommendation, an offer to purchase or a solicitation of an offer to sell shares of Company stock. Purchaser has not commenced the tender offer described above. Upon commencement of the tender offer, Parent and Purchaser will file with the U.S. Securities and Exchange