Table of Contents
o | No fee required. |
þ | Fee computed below per Exchange ActRules 14a-6(i)(1) and0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange ActRule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
5) | Total fee paid: |
o | Fee paid previously with preliminary materials. |
o | Check box if any part of the fee is offset as provided by Exchange ActRule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
Table of Contents
P.O. Box 888
Pitman, New Jersey08071-0888
(856) 589-0500
Table of Contents
Table of Contents
P.O. Box 888
Pitman, New Jersey08071-0888
(856) 589-0500
TO BE HELD ON [ ], 2010
Table of Contents
By Order of the Board of Directors of the Company, | ||
Mary Vaccara, Secretary | Edward B. Cloues, II, Chairman and Chief Executive Officer |
Table of Contents
Page | ||||
1 | ||||
1 | ||||
1 | ||||
2 | ||||
2 | ||||
2 | ||||
2 | ||||
2 | ||||
3 | ||||
3 | ||||
3 | ||||
3 | ||||
4 | ||||
5 | ||||
5 | ||||
5 | ||||
5 | ||||
6 | ||||
6 | ||||
6 | ||||
7 | ||||
12 | ||||
13 | ||||
14 | ||||
14 | ||||
14 | ||||
14 | ||||
15 | ||||
15 | ||||
16 | ||||
16 | ||||
16 | ||||
17 | ||||
17 | ||||
22 | ||||
24 | ||||
31 | ||||
32 | ||||
33 | ||||
34 | ||||
34 |
-i-
Table of Contents
Page | ||||
40 | ||||
42 | ||||
42 | ||||
43 | ||||
43 | ||||
43 | ||||
43 | ||||
44 | ||||
45 | ||||
45 | ||||
45 | ||||
47 | ||||
52 | ||||
54 | ||||
55 | ||||
56 | ||||
57 | ||||
57 | ||||
58 | ||||
58 | ||||
59 | ||||
60 | ||||
61 | ||||
62 | ||||
63 | ||||
65 | ||||
66 | ||||
66 | ||||
67 | ||||
ANNEX A AGREEMENT AND PLAN OF MERGER | ||||
ANNEX B VOTING AGREEMENT | ||||
ANNEX C OPINION OF THE COMPANY’S FINANCIAL ADVISOR |
-ii-
Table of Contents
• | each share of our Common Stock issued and outstanding immediately prior to the effective time of the Merger, except those shares owned directly or indirectly by the Company, Parent or Merger Sub (in each case, other than any such shares held on behalf of third parties), will be cancelled and converted automatically into the right to receive the Merger Consideration; |
-1-
Table of Contents
• | each stock option and stock appreciation right, whether vested or unvested, that is outstanding and unexercised immediately prior to the effective time of the Merger will be cancelled and exchanged for a cash payment equal to the product of (a) the excess (if any) of the Merger Consideration over the exercise price per share or right and (b) the number of shares of Common Stock or rights subject to such option or stock appreciation right; | |
• | each restricted stock unit that is outstanding immediately prior to the effective time of the Merger will vest and be cancelled and converted into the right to receive the Merger Consideration in respect of each share of Common Stock underlying such restricted stock unit; and | |
• | each share of unvested restricted stock outstanding immediately prior to the effective time of the Merger will vest and be cancelled and converted automatically into the right to receive the Merger Consideration. |
-2-
Table of Contents
• | initiate, solicit or encourage (including by way of furnishing information or assistance), or knowingly induce, or take any other action designed to, or that is reasonably expected to, facilitate any inquiry with respect to the making, submission or announcement of, any proposal or offer that constitutes a Takeover Proposal (as defined in the Merger Agreement); | |
• | enter into any letter of intent, memorandum of understanding, merger agreement or other agreement, arrangement or understanding relating to any Takeover Proposal; | |
• | enter into, continue or otherwise participate in any discussions or negotiations regarding, furnish to any person any information or data or access to our properties with respect to, or otherwise cooperate with or take |
-3-
Table of Contents
any other action to facilitate any proposal that constitutes, or is reasonably expected to lead to, any Takeover Proposal or requires us to abandon, terminate or fail to consummate the Merger or any other transactions contemplated by the Merger Agreement; or |
• | submit to our shareholders for their approval any Takeover Proposal, or agree or publicly announce an intention to take any of the foregoing actions. |
• | approval of the Merger Agreement by our shareholders; | |
• | absence of legal prohibitions on the completion of the Merger; and | |
• | expiration or termination of any applicable waiting periods under theHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), or any applicable foreign competition law relating to the Merger. |
• | the representations and warranties of the Company relating to capitalization were true and correct (except for anyde minimis inaccuracy), and the representations and warranties of the Company qualified by materiality or Company Material Adverse Effect (as defined in the Merger Agreement) were true and correct in all respects, and the representations and warranties of the Company not qualified by materiality or Company Material Adverse Effect were true and correct in all material respects, in each of the foregoing cases, as of the date of the Merger Agreement; the representations and warranties relating to the Company’s capitalization shall be true and correct (except for anyde minimisinaccuracy) as of the closing date; the other representations and warranties of the Company must be true and correct as of the closing date, except where the failure to be so true and correct individually or in the aggregate has not had and would not reasonably be expected to have a Company Material Adverse Effect; the Company has performed in all material respects its obligations and complied in all material respects with all covenants required to be performed or complied with by it; and the Company has delivered a certificate signed by the chief executive officer and chief financial officer of the Company to the foregoing effect; and | |
• | since the date of the Merger Agreement there has not been a Company Material Adverse Effect. |
-4-
Table of Contents
-5-
Table of Contents
-6-
Table of Contents
Q: | What is the proposed transaction? |
A: | The proposed transaction is the acquisition of the Company by Parent pursuant to the Merger Agreement. Once the Merger Agreement has been approved by our shareholders and other closing conditions under the Merger Agreement have been satisfied or waived, Merger Sub, a wholly-owned subsidiary of Parent, will merge with and into the Company. The Company will be the surviving corporation and become a wholly-owned subsidiary of Parent. |
Q: | What will I receive in the Merger? |
A: | If the Merger is completed, you will receive $150.00 in cash (as may be increased in certain limited circumstances as set forth in the Merger Agreement), without interest and subject to reduction for any required withholding taxes, for each share of our Common Stock that you own. For example, if you own 100 shares of our Common Stock, you will receive $15,000.00 in cash (as may be increased in certain limited circumstances as set forth in the Merger Agreement) in exchange for your shares of Common Stock. You will not be entitled to receive shares of the surviving corporation or of Parent. |
Q: | In what limited circumstances will the $150.00 per share cash consideration price be increased? |
A: | In the event (i) the Merger has not been completed by April 30, 2010 as a consequence of Parent’s inability to pay the aggregate Merger Consideration to the shareholders of the Company as of such date and (ii) the Company has satisfied all conditions to closing to be performed or satisfied by the Company as of such date, the Merger Consideration you will receive for each share of our Common Stock will be increased by $0.05 per share for each day from May 1, 2010 through the completion of the Merger. |
Q: | Who is soliciting my proxy? |
A: | This proxy is being solicited by our Board of Directors. |
Q: | What effects will the proposed Merger have on the Company? |
A: | As a result of the Merger, the Company will cease to be a publicly-traded company and will be wholly owned by Parent. You will no longer have any interest in our future earnings or growth. Following consummation of the Merger, the registration of the Common Stock and our reporting obligations with respect to the Common Stock under the Securities Exchange Act of 1934, as amended, will be terminated upon application to the Securities and Exchange Commission. In addition, upon completion of the proposed Merger, shares of Common Stock will no longer be listed on any stock exchange or quotation system, including the NASDAQ Global Select Market. |
Q: | What happens if the Merger is not consummated? |
A: | If the Merger Agreement is not approved by shareholders or if the Merger is not completed for any other reason, shareholders will not receive any payment for their shares in connection with the Merger. Instead, the Company will remain an independent public company and the Common Stock will continue to be listed and traded on the NASDAQ Global Select Market. Under specified circumstances, the Company may be required to pay a termination fee or reimburse Parent for its out-of-pocket expenses, as described under “Terms of the Merger Agreement — Fees and Expenses” beginning on page 56. |
-7-
Table of Contents
Q: | When and where is the special meeting? |
A: | The special meeting of the Company’s shareholders will be held at [ ] a.m. local time, on [ ], [ ], 2010, at the offices of Morgan, Lewis & Bockius LLP located at 1701 Market Street, Philadelphia, Pennsylvania 19103. |
Q: | What matters am I entitled to vote on at the special meeting? |
A: | You are entitled to vote: |
• | “for” or “against” the approval of the Merger Agreement; | |
• | “for” or “against” the adjournment of the meeting, if necessary or appropriate to solicit additional proxies if there are insufficient votes at the time of the meeting to approve the Merger Agreement; and | |
• | on such other business as may properly come before the special meeting or any adjournment or postponement thereof. |
Q: | How does the Company’s Board of Directors recommend that I vote on the proposals? |
A: | Our Board of Directors unanimously recommends that you vote“FOR”the proposal to approve the Merger Agreement and “FOR” the proposal to adjourn the meeting, if necessary or appropriate to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Merger Agreement. |
Q: | What vote of shareholders is required to approve the Merger Agreement? |
A: | The approval of the Merger Agreement requires, assuming a quorum is present in person or by proxy, the affirmative vote of two-thirds of the votes cast at the special meeting by the holders of the outstanding shares of our Common Stock. All of our directors and executive officers, who own approximately 10% of the outstanding Common Stock, have agreed to vote substantially all of their shares in favor of the approval of the Merger Agreement. |
Q: | What vote of shareholders is required to adjourn the meeting, if necessary or appropriate to solicit additional proxies at the special meeting? |
A: | The proposal to adjourn the meeting, if necessary or appropriate to solicit additional proxies, requires the affirmative vote of a majority of the votes cast at the special meeting by the holders of the outstanding shares of our Common Stock. |
Q: | What does it mean if I get more than one proxy card? |
A: | If you have shares of our Common Stock that are registered differently and are in more than one account, you will receive more than one proxy card. Please follow the directions for voting on each of the proxy cards you receive to ensure that all of your shares are voted. |
Q: | Why is my vote important? |
A: | If you do not submit a proxy or vote in person at the special meeting, it will be more difficult for the Company to obtain the necessary quorum to hold the meeting. If you hold your shares through a broker, your broker will not be able to cast a vote on the approval of the Merger Agreement without instructions from you. |
Q: | How do I vote without attending the special meeting? |
A: | If you are a registered shareholder (that is, if you hold shares of our Common Stock in certificated form), you may submit your proxy and vote your shares by returning the enclosed proxy card, marked, signed and dated, |
-8-
Table of Contents
in the postage-paid envelope provided, or by telephone or through the Internet by following the instructions included with the enclosed proxy card. |
Q: | How do I vote in person at the special meeting? |
A: | If you are a registered shareholder, you may attend the special meeting and vote your shares in person at the meeting by giving us a signed proxy card or ballot before voting is closed. If you want to do that, please bring identification with you. Even if you plan to attend the meeting, we recommend that you vote your shares in advance as described above, so your vote will be counted even if you later decide not to attend. |
Q: | Can I change my vote? |
A: | You may revoke or change your proxy at any time before it is voted, except as otherwise described below. If you have not voted through a broker, bank or other nominee because you are the registered shareholder, you may revoke or change your proxy before it is voted by: |
• | filing a notice of revocation, which is dated a later date than your proxy, with the Company’s Secretary; | |
• | submitting a duly executed proxy bearing a later date; | |
• | submitting a new proxy by telephone or through the Internet at a later time, but not later than 11:59 p.m. (Eastern Time) on [ ], 2010, or the day before the meeting date if the special meeting is adjourned or postponed; or | |
• | voting in person at the special meeting. |
Q: | If my shares are held in “street name” by my broker, bank or other nominee, will my nominee vote my shares for me? |
A: | Yes, but only if you provide instructions to your broker, bank or other nominee on how to vote. You should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares. Without those instructions, your shares will not be voted. |
Q: | What will happen if I abstain from voting or fail to vote on the proposals or instruct my broker to vote on the proposals? |
A: | If you abstain from voting, fail to cast your vote in person, by proxy, or electronically via the Internet or by telephone, or fail to give voting instructions to your broker, bank or nominee, it will have no effect on the proposal to approve the Merger Agreement or the proposal to adjourn the special meeting, if necessary. |
Q: | What happens if I return my proxy card but I do not indicate how to vote? |
A: | If you properly return your proxy card, but do not include instructions on how to vote, your shares of Common Stock will be voted“FOR”the approval of the Merger Agreement and “FOR” the approval of the special meeting adjournment proposal. Our management does not currently intend to bring any other proposals to the special meeting. If other proposals requiring a vote of shareholders are brought before the special meeting in a |
-9-
Table of Contents
proper manner, the persons named in the enclosed proxy card will have the authority to vote the shares represented by duly executed proxies in their discretion. |
Q: | Will I have dissenters’ rights as a result of the Merger? |
A: | No. Under New Jersey law, the Company’s shareholders do not have dissenters’ rights. |
Q: | What happens if I sell my shares before the special meeting or before completion of the Merger? |
A: | The record date of the special meeting is earlier than the special meeting and the date that the Merger is expected to be completed. If you transfer your shares of Common Stock after the record date but before the special meeting, you will retain your right to vote at the special meeting, but will have transferred the right to receive the Merger Consideration to be received by our shareholders in the Merger. In order to receive the Merger Consideration, you must hold your shares through completion of the Merger. |
Q: | Will a proxy solicitor be used? |
A: | Yes. The Company has engaged Georgeson Inc. to assist in the solicitation of proxies for the special meeting and the Company estimates that it will pay them a fee of approximately $[ ], and will reimburse them for reasonable administrative and out-of-pocket expenses incurred in connection with the solicitation. |
Q: | Is the Merger expected to be taxable to me? |
A: | Generally, yes. The receipt of cash in exchange for shares of our Common Stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. Holder (as defined in “The Merger — Material U.S. Federal Income Tax Consequences of the Merger to Our Shareholders” on page 40) whose shares of Common Stock are converted into the right to receive cash in the Merger will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received with respect to such shares (determined before the deduction of any applicable withholding taxes) and the shareholder’s adjusted tax basis in such shares. Such gain or loss generally will be long-term capital gain or loss if a U.S. Holder’s holding period for such shares is more than one year at the time of the consummation of the Merger. Backup withholding may also apply with respect to cash you receive in the Merger, unless you provide proof of an applicable exemption or a correct taxpayer identification number and otherwise comply with the applicable requirements of the backup withholding rules. |
Q: | Should I send in my stock certificates now? |
A: | No. Assuming the Merger is completed, you will receive a letter of transmittal with instructions informing you how to send your share certificates to American Stock Transfer & Trust Company, LLC, the paying agent, in order to receive the Merger Consideration. You should use the letter of transmittal to exchange the Company stock certificates for the Merger Consideration to which you are entitled as a result of the Merger. Do not send any stock certificates with your proxy. |
Q: | When do you expect the Merger to be completed? |
A: | We are working to complete the Merger as quickly as possible. We currently expect to complete the Merger promptly after shareholder approval is obtained. However, in addition to obtaining shareholder approval, all of the conditions to the Merger must have been satisfied or waived. In the event all of the conditions to the Merger are not satisfied or waived if and when shareholder approval is obtained, completion of the Merger may still occur, but would be delayed. |
-10-
Table of Contents
Q: | Who can help answer my other questions? |
A: | If you have more questions about the Merger or the special meeting, or require assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy card, please contact the Company’s Investor Relations at(856) 589-0500 or Georgeson Inc., our proxy solicitor, at(800) 501-4383. If a broker, bank or other nominee holds your shares, you should also call your broker, bank or other nominee for additional information. |
-11-
Table of Contents
• | the current market price of our Common Stock may reflect a market assumption that the Merger will occur, and a failure to complete the Merger could result in a decline in the market price of our Common Stock; | |
• | the occurrence of any event, change or other circumstance that could result in termination of the Merger Agreement which, under certain circumstances, may require us to pay a termination fee to Parent of $12 million or to reimburse Parent’s out-of-pocket expenses relating to the Merger up to $10 million; | |
• | the failure to satisfy any conditions to consummation of the Merger; | |
• | the inability to complete the Merger due to the failure to obtain regulatory approval with respect to the Merger; | |
• | the failure of the Merger to close for any other reason; | |
• | our remedies against Parent with respect to certain breaches of the Merger Agreement may not be adequate to cover our damages; | |
• | the proposed transaction may disrupt current business plans and operations and there may be potential difficulties in attracting and retaining employees as a result of the announced Merger; | |
• | due to restrictions imposed in the Merger Agreement, we may be unable to respond effectively to competitive pressures, industry developments and future opportunities; | |
• | the effect of the announcement of the Merger on our business relationships, operating results and business generally; | |
• | the ability to realize the benefits of the Merger; | |
• | the costs, fees, expenses and charges we have incurred and may incur related to the Merger, whether or not the Merger is completed; and | |
• | the matters discussed under “The Merger — Considerations Relating to the Proposed Merger” beginning on page 33. |
-12-
Table of Contents
-13-
Table of Contents
-14-
Table of Contents
• | filing a notice of revocation, which is dated a later date than your proxy, with the Company’s Secretary at K-Tron International, Inc., Routes 55 and 553, P.O. Box 888, Pitman, New Jersey 08071; | |
• | submitting a duly executed proxy bearing a later date; | |
• | if you voted by telephone or the Internet, voting a second time by telephone or Internet, but not later than 11:59 p.m. (Eastern Time) on [ ], 2010, or the day before the special meeting date, if the special meeting is adjourned or postponed; or | |
• | attending the special meeting and voting in person (simply attending the special meeting will not constitute revocation of a proxy; you must vote in person at the special meeting). |
-15-
Table of Contents
Routes 55 & 553
P.O. Box 888
Pitman, New Jersey08071-0888
Telephone:(856) 589-0500
199 Water Street
26th Floor
New York, New York 10038
Telephone:(800) 501-4383
-16-
Table of Contents
-17-
Table of Contents
-18-
Table of Contents
-19-
Table of Contents
-20-
Table of Contents
-21-
Table of Contents
• | the belief of our Board of Directors that we have obtained the highest price per share that Parent is willing to pay, taking into account the improvement in terms as a result of the intensive negotiations between the parties; |
-22-
Table of Contents
• | our assessment as to the low likelihood that a third party would offer a higher price than Parent, especially in light of the managed sale process conducted by the Company in 2008, as more fully described in “Background of the Merger” beginning on page 17; | |
• | the fact that the Merger Consideration is all cash, which provides certainty of value to holders of our Common Stock compared to a transaction in which shareholders would receive stock; | |
• | the unanimous support for the Merger expressed by our executive officers and the members of the Board of Directors, as evidenced by the voting agreement; | |
• | the financial analyses of Goldman Sachs, the Company’s financial advisor in connection with the Merger, and the opinion of Goldman Sachs to the Company’s Board of Directors, dated January 8, 2010, that as of such date and based upon and subject to the factors and assumptions set forth therein, the $150.00 per share in cash to be paid to the holders (other than Parent and its affiliates) of shares of Common Stock pursuant to the Merger Agreement was fair from a financial point of view to such holders; | |
• | the fact that the Merger would be subject to the approval of our shareholders and that if a higher offer were to be made to our shareholders prior to the completion of the Merger, our shareholders would be free not to approve the Merger with Parent; | |
• | the current and historical market prices of our Common Stock relative to the $150.00 per share Merger Consideration, and the fact that $150.00 per share represented a 32.1% premium over the closing price of our Common Stock on January 8, 2010 and a 38.6% premium to the average closing price of our Common Stock over the 20 trading day period up to January 8, 2010; | |
• | the possible alternatives to the sale of K-Tron, including continuing to operate K-Tron on a stand-alone basis, and the range of potential benefits to our shareholders of these alternatives, as well as the assessment of our Board of Directors that none of these alternatives was reasonably likely to present superior opportunities for K-Tron to create greater value for our shareholders, taking into account the timing and the likelihood of accomplishing such alternatives and the risks of execution, as well as business, competitive, industry and market risks; and | |
• | the terms of the Merger Agreement, as reviewed by our Board of Directors with our legal advisors, including: |
• | sufficient operating flexibility for us to conduct our business in the ordinary course between signing and closing; | |
• | the absence of a financing condition; | |
• | our ability under certain circumstances to furnish information to and conduct negotiations with a third party, as more fully described under “Terms of the Merger Agreement — Conduct of Business Pending the Merger — Restrictions on Solicitations” beginning on page 50 and | |
• | our ability to terminate the Merger Agreement in order to accept a superior proposal, subject to payment to Parent of a $12 million termination fee that, at approximately 2.75% of aggregate transaction value, the Board of Directors determined was “below market” and reasonable in light of, among other things, the benefits of the Merger to our shareholders and the typical size of such fees in similar transactions. |
• | that we will no longer exist as an independent company and our shareholders will no longer participate in our growth; | |
• | that, under the terms of the Merger Agreement, we cannot solicit other acquisition proposals, we must pay to Parent a termination fee if the Merger Agreement is terminated under certain circumstances and certain holders of our Common Stock have agreed to vote, in the aggregate, approximately 10% of our outstanding Common Stock for the Merger, all of which may deter others from proposing an alternative transaction that may be more advantageous to our shareholders; |
-23-
Table of Contents
• | the fact that gain from an all cash transaction would be taxable to our shareholders for U.S. federal income tax purposes; | |
• | that, while the Merger is expected to be completed, there can be no assurance that all conditions to the parties’ obligations to complete the Merger will be satisfied, and as a result, it is possible that the Merger may not be completed even if approved by our shareholders (see “Terms of the Merger Agreement — Conditions to the Merger” beginning on page 54); and | |
• | the possibility of disruption to our operations following announcement of the Merger, and the resulting effect on the Company if the Merger does not close. |
• | the Merger Agreement; | |
• | annual reports to shareholders and Annual Reports on Form10-K of the Company for the five fiscal years ended January 3, 2009; | |
• | certain interim reports to shareholders and Quarterly Reports onForm 10-Q of the Company; | |
• | certain other communications from the Company to its shareholders; | |
• | certain publicly available research analyst reports for the Company; and | |
• | certain internal financial analyses and forecasts for the Company prepared by its management, as approved for Goldman Sachs’ use by the Company (the “Forecasts”). |
-24-
Table of Contents
-25-
Table of Contents
• | a premium of 32.8% based on the closing stock price of $112.95 per share on January 4, 2010; | |
• | a premium of 32.8% based on the 52-week high market price of $112.95 per share on January 4, 2010; | |
• | a premium of 40.4% based on the latest one-month VWAP of $106.87 per share; | |
• | a premium of 47.9% based on the latest three-month VWAP of $101.39 per share; | |
• | a premium of 57.2% based on the latest six-month VWAP of $95.40 per share; and | |
• | a premium of 82.0% based on the latest one-year VWAP of $82.44 per share. |
LTM P/E | LTM EV/EBITDA | |||||||
Average | Average | |||||||
Last 10 Years | 15.9 | x | 6.7 | x | ||||
Last 5 Years | 15.0 | 7.0 | ||||||
Last 3 Years | 15.0 | 7.2 | ||||||
Last 1 Year | 11.4 | 5.0 | ||||||
Current | 16.3 | 7.2 |
• | Ratios of the EV of the Company on January 4, 2010 to the Company’s estimated sales for 2009 and 2010; | |
• | Ratios of the implied EV paid for the Company in the Merger to the Company’s estimated sales for 2009 and 2010; | |
• | Ratios of the EV of the Company on January 4, 2010 to the Company’s estimated EBITDA for 2009 and 2010; | |
• | Ratios of the implied EV paid for the Company in the Merger to the Company’s estimated EBITDA for 2009 and 2010; | |
• | Ratios of the closing price per share on January 4, 2010 to the Company’s estimated earnings per share (“EPS”) for 2010 and 2011; and |
-26-
Table of Contents
• | Ratios of the $150.00 in cash per share to be paid to the holders of shares of Common Stock pursuant to the Merger Agreement to the Company’s estimated EPS for 2010 and 2011. |
January 4, 2010 | Implied Transaction Value | |||||||
Enterprise Value / Sales | ||||||||
2009E | 1.46 | x | 2.02 | x | ||||
2010E | 1.48 | 2.05 | ||||||
Enterprise Value / EBITDA | ||||||||
2009E | 7.9 | x | 10.9 | x | ||||
2010E | 8.5 | 11.8 | ||||||
Price / EPS | ||||||||
2010E | 17.4 | x | 23.2 | x | ||||
2011E | 13.4 | 17.8 |
• | Bucyrus International, Inc.’s acquisition of Terex Corporation’s mining business announced in December 2009; | |
• | Joy Global Inc.’s acquisition of Continental Global Group, Inc. announced in January 2008; | |
• | K-Tron International, Inc.’s acquisition of Jeffrey Rader Corporation announced in September 2007; | |
• | Clyde Process Solutions Plc’s acquisition of MAC Equipment, Inc. announced in February 2007; | |
• | Bucyrus’ acquisition of DBT GmbH announced in December 2006; | |
• | K-Tron International, Inc.’s acquisition of Premier Pneumatics, Inc. announced in October 2006; | |
• | Sandvik AB’s acquisition of SDS Co. Ltd. announced in April 2006; | |
• | HgCapital Trust plc’s acquisition of Schenck Process GmbH announced in October 2005; | |
• | First Reserve Corporation’s acquisition of Chart Industries Inc. announced in August 2005; |
-27-
Table of Contents
• | K-Tron International, Inc.’s acquisition of Pennsylvania Crusher Corporation announced in January 2003; and | |
• | Terex Corporation’s acquisition of Powerscreen International Distribution Ltd. announced in June 1999. |
EV Multiples of LTM Sales | EV Multiples of LTM EBITDA | |||||||
Max | 1.3 | x | 10.2 | x | ||||
Average | 0.9 | 7.4 | ||||||
Median | 0.9 | 7.3 | ||||||
Minimum | 0.6 | 4.6 |
• | Actuant Corporation | |
• | Columbus McKinnon Corp. | |
• | Cooper Industries plc | |
• | Carlisle Companies, Inc. | |
• | Crane Co. | |
• | Pentair, Inc. | |
• | SPX Corporation | |
• | Teleflex Incorporated |
• | Alfa Laval AB | |
• | GEA Group AG | |
• | Graco, Inc. | |
• | Metso Corporation | |
• | Mettler-Toledo International Inc. | |
• | Nordson Corporation |
-28-
Table of Contents
• | Atlas Copco AB | |
• | Bucyrus International, Inc. | |
• | Joy Global Inc. | |
• | Sandvik AB | |
• | Terex Corporation |
• | Ratios of EV to estimated EBITDA for the calendar years 2009 and 2010; and | |
• | Ratios of the closing price per share on January 4, 2010 to estimated EPS for the calendar years 2009, 2010 and 2011. |
EV/EBITDA Multiples | P/E Multiples | |||||||||||||||||||
Company | 2009 | 2010 | 2009 | 2010 | 2011 | |||||||||||||||
K-Tron | 7.9 | x | 8.5 | x | 16.1 | x | 17.4 | x | 13.4 | x | ||||||||||
Small Cap Diversified Industrials | ||||||||||||||||||||
High | 12.3 | x | 10.7 | x | 23.3 | x | 18.9 | x | 15.3 | x | ||||||||||
Mean | 9.3 | 8.5 | 18.1 | 16.2 | 13.1 | |||||||||||||||
Median | 8.8 | 8.3 | 18.1 | 16.1 | 12.6 | |||||||||||||||
Low | 6.5 | 6.8 | 14.5 | 13.9 | 10.8 | |||||||||||||||
Process Equipment Companies | ||||||||||||||||||||
High | 17.3 | x | 12.7 | x | 25.7 | x | 24.7 | x | 16.9 | x | ||||||||||
Mean | 12.0 | 10.9 | 19.7 | 19.9 | 15.3 | |||||||||||||||
Median | 11.3 | 11.3 | 19.4 | 19.6 | 15.8 | |||||||||||||||
Low | 8.5 | 7.6 | 14.7 | 16.1 | 12.6 | |||||||||||||||
Size Reduction Equipment Companies | ||||||||||||||||||||
High | 12.7 | x | 12.6 | x | 20.6 | x | 26.6 | x | 17.1 | x | ||||||||||
Mean | 10.0 | 11.2 | 16.2 | 20.0 | 15.6 | |||||||||||||||
Median | 9.4 | 11.1 | 14.5 | 18.4 | 15.5 | |||||||||||||||
Low | 7.9 | 10.3 | 13.4 | 16.7 | 14.6 |
-29-
Table of Contents
-30-
Table of Contents
As of November 2009 ($ in millions, except per share data) | ||||||||||||||||||||||||||||||||
2009(1) | 2010 | 2011 | 2012 | 2013 | 2014 | |||||||||||||||||||||||||||
Revenues | $ | 192 | $ | 189 | $ | 229 | $ | 266 | $ | 300 | $ | 346 | ||||||||||||||||||||
EBITDA(2) | $ | 35 | $ | 33 | $ | 40 | $ | 49 | $ | 55 | $ | 63 | ||||||||||||||||||||
EBIT(3) | $ | 29 | $ | 26 | $ | 33 | $ | 42 | $ | 48 | $ | 56 | ||||||||||||||||||||
Net Income | $ | 18 | $ | 19 | $ | 24 | $ | 31 | $ | 35 | $ | 42 | ||||||||||||||||||||
EPS | $ | 6.40 | $ | 6.48 | $ | 8.41 | $ | 10.55 | $ | 12.15 | $ | 14.32 |
(1) | Actual through September 2009, excluding the one-time gain of $3.0 million from sale of 19.9% stake in Hasler International SA in September 2009; projected for October through December 2009. | |
(2) | EBITDA represents earnings before interest, income taxes, depreciation and amortization. | |
(3) | EBIT represents earnings before interest and income taxes. |
-31-
Table of Contents
-32-
Table of Contents
• | the requirement to furnish a proxy or an information statement in connection with a shareholders’ meeting; | |
• | the short-swing profit recovery provisions of Section 16(b) of the Exchange Act; and | |
• | the liability provisions of the Exchange Act and the corporate governance requirements under NASDAQ Stock Market LLC rules and regulations and the certification and reporting provisions under the Sarbanes-Oxley Act of 2002 (such as the requirement that certain executive officers of K-Tron certify the accuracy of K-Tron’s financial statements and that annual reports contain management’s report on the effectiveness of the Company’s internal control over financial reporting). |
• | the market price of K-Tron’s Common Stock may decline to the extent that the current market price of its shares reflects a market assumption that the Merger will be completed; | |
• | costs relating to the Merger, such as legal, accounting and financial advisory fees, and, in specified circumstances, termination fees, must be paid even if the Merger is not completed; and | |
• | the diversion of management’s attention from the day-to-day business of the Company, the potential disruption to its employees and its relationships with customers, landlords, suppliers and independent sales representatives during the period before the completion of the Merger may make it difficult for the Company to regain its financial and market positions if the Merger does not occur. |
-33-
Table of Contents
-34-
Table of Contents
Number of | Weighted | |||||||||||
Shares | Average | Value of | ||||||||||
Underlying | Exercise Price | Options | ||||||||||
Name | Options | of Options ($) | ($)(1) | |||||||||
Executive Officers | ||||||||||||
Edward B. Cloues, II | 10,000 | 12.20 | 1,378,000 | |||||||||
Kevin C. Bowen | 10,000 | 12.20 | 1,378,000 | |||||||||
Lukas Guenthardt | 19,000 | 12.20 | 2,618,200 | |||||||||
Donald W. Melchiorre | — | — | — | |||||||||
Ronald R. Remick(2) | — | — | — | |||||||||
Robert E. Wisniewski | — | — | — | |||||||||
Directors | ||||||||||||
Norman Cohen | 2,000 | 25.87 | 248,260 | |||||||||
Robert A. Engel | 6,000 | 18.52 | 788,880 | |||||||||
Edward T. Hurd | — | — | — | |||||||||
Richard J. Pinola | 6,000 | 18.52 | 788,880 |
(1) | Represents the amount payable to the individual following the effective time of the Merger with respect to all options held by the individual, each of which are fully vested, calculated for each individual by multiplying the aggregate number of shares subject to the options by the difference between the Merger Consideration and the exercise price of the options. | |
(2) | Mr. Remick resigned from his positions as Senior Vice President, Chief Financial Officer and Treasurer of the Company effective May 30, 2009. |
Number of Shares | ||||||||
Underlying Restricted | ||||||||
Name | Stock Units (“RSUs”) | Value of RSUs ($) | ||||||
Executive Officers | ||||||||
Edward B. Cloues, II | 2,000 | 300,000 | ||||||
Kevin C. Bowen | 1,000 | 150,000 | ||||||
Lukas Guenthardt | 1,000 | 150,000 | ||||||
Donald W. Melchiorre | 1,000 | 150,000 | ||||||
Ronald R. Remick(1) | — | — | ||||||
Robert E. Wisniewski | 1,000 | 150,000 | ||||||
Directors | ||||||||
Norman Cohen | — | — | ||||||
Robert A. Engel | — | — | ||||||
Edward T. Hurd | — | — | ||||||
Richard J. Pinola | — | — |
(1) | Mr. Remick resigned from his positions as Senior Vice President, Chief Financial Officer and Treasurer of the Company effective May 30, 2009. |
-35-
Table of Contents
Number of Shares of | ||||||||
Unvested Restricted | Value of Unvested | |||||||
Name | Stock | Restricted Stock ($) | ||||||
Executive Officers | ||||||||
Edward B. Cloues, II | 9,000 | 1,350,000 | ||||||
Kevin C. Bowen | 4,500 | 675,000 | ||||||
Lukas Guenthardt | 4,500 | 675,000 | ||||||
Donald W. Melchiorre | 4,500 | 675,000 | ||||||
Ronald R. Remick(1) | — | — | ||||||
Robert E. Wisniewski | 2,500 | 375,000 | ||||||
Directors | ||||||||
Norman Cohen | — | — | ||||||
Robert A. Engel | — | — | ||||||
Edward T. Hurd | — | — | ||||||
Richard J. Pinola | — | — |
(1) | Mr. Remick resigned from his positions as Senior Vice President, Chief Financial Officer and Treasurer of the Company effective May 30, 2009. |
-36-
Table of Contents
-37-
Table of Contents
-38-
Table of Contents
• | His annual base salary increases from $267,230 to $275,000; | |
• | He will be eligible to participate in Parent’s short-term incentive compensation program, which provides a target incentive compensation of 50% of Mr. Bowen’s base salary if the K-Tron Process Group meets or exceeds certain financial goals and Mr. Bowen meets individual performance objectives (such financial targets and goals to be determined after closing of the Merger); | |
• | He will be eligible to participate in Parent’s long-term incentive compensation program, which provides an equity award of $250,000 of value delivered 25% in non-qualified stock options and 75% in performance-based restricted stock, with the actual payout in each case to be determined over a three-year measurement period beginning October 1, 2009. The performance-based awards are granted at the target amount, but the actual number of shares earned will be determined by how much of the expected incremental shareholder value Parent creates over the three year vesting period, and the payout will range from 0% to 150% of the target grant. The stock option strike price will be established by averaging the high and low stock price of Parent on the closing date, which is the date of grant, and the options will vest one-third per year over the first three years, having a term of 10 years; and | |
• | He will receive a sign-on bonus of $125,000 in the form of time-based restricted stock units, which restricted stock units will vest three years from the date of the award. |
• | His annual base salary increases from $237,630 to $245,000; | |
• | He will be eligible to participate in Parent’s short-term incentive compensation program, which provides a target incentive compensation of 50% of Mr. Guenthardt’s base salary if the K-Tron Group meets or exceeds certain financial goals and Mr. Guenthardt meets individual performance objectives (such financial targets and goals to be determined after closing of the Merger); | |
• | He will be eligible to participate in Parent’s long-term incentive compensation program, which provides an equity award of $250,000 of value delivered 25% in non-qualified stock options and 75% in performance-based restricted stock, with the actual payout in each case to be determined over a three-year measurement period beginning October 1, 2009. The performance-based awards are granted at the target amount, but the actual number of shares earned will be determined by how much of the expected incremental shareholder value Parent creates over the three year vesting period, and the payout will range from 0% to 150% of the target grant. The stock option strike price will be established by averaging the high and low stock price of Parent on the closing date, which is the date of grant, and the options will vest one-third per year over the first three years, having a term of 10 years; and | |
• | He will receive a sign-on bonus of $125,000 in the form of time-based restricted stock units, which restricted stock units will vest three years from the date of the award. |
• | His annual base salary increases from $253,025 to $260,000; | |
• | He will be eligible to participate in Parent’s short-term incentive compensation program, which provides a target incentive compensation of 50% of Mr. Melchiorre’s base salary if the K-Tron Size Reduction Group meets or exceeds certain financial goals and Mr. Melchiorre meets individual performance objectives (such financial targets and goals to be determined after closing of the Merger); |
-39-
Table of Contents
• | He will be eligible to participate in Parent’s long-term incentive compensation program, which provides an equity award of $250,000 of value delivered 25% in non-qualified stock options and 75% in performance-based restricted stock, with the actual payout in each case to be determined over a three-year measurement period beginning October 1, 2009. The performance-based awards are granted at the target amount, but the actual number of shares earned will be determined by how much of the expected incremental shareholder value Parent creates over the three year vesting period, and the payout will range from 0% to 150% of the target grant. The stock option strike price will be established by averaging the high and low stock price of Parent on the closing date, which is the date of grant, and the options will vest one-third per year over the first three years, having a term of 10 years; and | |
• | He will receive a sign-on bonus of $125,000 in the form of time-based restricted stock units, which restricted stock units will vest three years from the date of the award. |
• | His annual base salary increases from $252,000 to $260,000; | |
• | He will be eligible to participate in Parent’s short-term incentive compensation program, which provides a target incentive compensation of 40% of Mr. Wisniewski’s base salary if the K-Tron Group meets or exceeds certain financial goals and Mr. Wisniewski meets individual performance objectives (such financial targets and goals to be determined after closing of the Merger); | |
• | He will be eligible to participate in Parent’s long-term incentive compensation program, which provides an equity award of $124,000 of value delivered 25% in non-qualified stock options and 75% in performance-based restricted stock, with the actual payout in each case to be determined over a three-year measurement period beginning October 1, 2009. The performance-based awards are granted at the target amount, but the actual number of shares earned will be determined by how much of the expected incremental shareholder value Parent creates over the three year vesting period, and the payout will range from 0% to 150% of the target grant. The stock option strike price will be established by averaging the high and low stock price of Parent on the closing date, which is the date of grant, and the options will vest one-third per year over the first three years, having a term of 10 years; and | |
• | He will receive a sign-on bonus of $125,000 in the form of time-based restricted stock units, which restricted stock units will vest three years from the date of the award. |
-40-
Table of Contents
-41-
Table of Contents
-42-
Table of Contents
• | Each share of our Common Stock issued and outstanding immediately prior to the effective time of the Merger, except those shares owned directly or indirectly by the Company, Parent or Merger Sub (in each case, other than any such shares held on behalf of third parties), will be cancelled and converted automatically into the right to receive the Merger Consideration. | |
• | In the event (i) the Merger has not been completed by April 30, 2010 as a consequence of Parent’s inability to pay the aggregate Merger Consideration to the shareholders of the Company as of such date and (ii) the Company has satisfied all conditions to closing to be performed or satisfied by the Company as of such date, the $150.00 per share cash price for each share of our Common Stock will be increased by $0.05 per share for each day from May 1, 2010 through the completion of the Merger. | |
• | Each share of Merger Sub common stock issued and outstanding immediately prior to the effective time of the Merger will be converted into and become one share of Common Stock of the surviving corporation, and will constitute the only outstanding shares of capital stock of the surviving corporation following the Merger. | |
• | Each share of Common Stock owned by Parent or Merger Sub, or held by the Company immediately prior to the effective time of the Merger will be automatically cancelled and cease to exist. |
-43-
Table of Contents
• | All shares of Common Stock that have been converted into the right to receive the Merger Consideration will be automatically cancelled and cease to exist. |
• | Each stock option and each stock appreciation right, whether vested or unvested, that is outstanding and unexercised immediately prior to the effective time of the Merger will be cancelled and exchanged for a cash payment equal to the product of (a) the excess (if any) of the Merger Consideration over the exercise price per share or right and (b) the number of shares of Common Stock or rights subject to such option or stock appreciation right. | |
• | Each restricted stock unit that is outstanding immediately prior to the effective time of the Merger will vest and be cancelled and converted into the right to receive the Merger Consideration in respect of each share of Common Stock underlying such restricted stock unit. | |
• | Each share of unvested restricted stock outstanding immediately prior to the effective time of the Merger will vest and be cancelled and converted automatically into the right to receive the Merger Consideration. |
-44-
Table of Contents
• | the shareholder asserting the claim of a lost, stolen or destroyed Certificate makes an affidavit of that fact in form and substance reasonably acceptable to Parent; and | |
• | upon request of Parent or the Paying Agent, the shareholder posts a bond in a reasonable amount designated by Parent or Paying Agent as indemnity against any claim that may be made against Parent or the surviving corporation with respect to that Certificate. |
-45-
Table of Contents
• | corporate existence, good standing and qualification to conduct business; | |
• | due authorization, execution, delivery and validity of the Merger Agreement; | |
• | governmental authorizations necessary to complete the Merger; | |
• | absence of any conflict with organizational documents or any violation of agreements, laws or regulations as a result of the consummation of the Merger; and | |
• | brokers’, finders’ and other similar fees in connection with the Merger. |
• | our organizational documents; | |
• | our subsidiaries; | |
• | our capital structure; | |
• | our filings with the SEC, potential amendments to such filings, the absence of material misstatements or omissions from such filings, and our compliance with the Sarbanes-Oxley Act of 2002 and governance rules and regulations of NASDAQ Stock Market LLC; | |
• | matters related to our internal disclosure controls and procedures; | |
• | the absence of undisclosed material liabilities; | |
• | accuracy of the statements and information supplied in this proxy statement; | |
• | the absence of material changes and events concerning us since October 3, 2009; | |
• | pending or threatened material litigation, proceedings or investigations against us; | |
• | orders of any governmental entity or arbitrator against us; | |
• | our compliance with applicable laws and possession of permits and licenses; | |
• | completion and accuracy of our tax filings and payments; | |
• | matters relating to our owned and leased real property and the leases related to our leased real property; | |
• | matters relating to the Employee Retirement Security Act of 1974, as amended, our employees and our employee benefits plans; | |
• | matters relating to labor organizations and our compliance with applicable employment laws; | |
• | matters relating to our intellectual property; | |
• | our material contracts and performance obligations thereunder; | |
• | our compliance with applicable environmental laws; | |
• | our maintenance of insurance; | |
• | the receipt of a fairness opinion from our financial advisor; | |
• | the required vote of our shareholders; | |
• | inapplicability of state anti-takeover statutes to the Merger Agreement and the Merger; |
-46-
Table of Contents
• | matters relating to certain provisions of our Rights Agreement and the termination of the rights thereunder; and | |
• | our participation in affiliate transactions. |
• | Changes generally affecting the economy or the financial, credit or securities markets, to the extent such Changes do not affect the Company and our subsidiaries, taken as a whole, in a materially disproportionate manner relative to other participants in the business and industries in which the Company and our subsidiaries operate; | |
• | the Company’s failure, in and of itself, to meet any internal or published projections, forecasts or revenue or earnings predictions for any period ending on or after January 8, 2010, although the Changes giving rise to or contributing to such Changes may constitute or be taken into account to determine if a Company Material Adverse Effect has occurred; | |
• | Changes resulting from a change in generally accepted accounting principles to the extent such Changes do not affect the Company and our subsidiaries, taken as a whole, in a materially disproportionate manner relative to other participants in the business and industries in which the Company and our subsidiaries operate; | |
• | Changes directly attributable to the announcement or pendency of the Merger, the Merger Agreement or the transactions contemplated thereby (provided that these Changes shall not apply to that portion of any representation or warranty contained in the Merger Agreement to the extent that the purpose of such portion of such representation or warranty is to address the consequences resulting from the execution and delivery of the Merger Agreement or the performance of obligations or satisfaction of conditions under the Merger Agreement); or | |
• | Changes that can be shown to have resulted from any action required pursuant to the terms of the Merger Agreement or from the Company’s compliance with the covenants set forth in the Merger Agreement. |
-47-
Table of Contents
• | amending or modifying the Company’s or our subsidiaries’ organizational documents; | |
• | declaring, authorizing, setting aside, making or paying any dividends; | |
• | splitting, combining or reclassifying any of our securities or proposing the issuance of any securities in respect of, in lieu of, or in substitution for shares of our securities, or otherwise amending the terms of our securities; | |
• | entering into any agreement with respect to the voting of any of our securities; | |
• | repurchasing, redeeming or otherwise acquiring any of our securities or equity rights; | |
• | issuing, delivering, selling, granting, transferring or subjecting to a lien any securities or equity rights, or granting to any person any right to acquire any securities or equity rights, or taking any action to cause to be exercisable any otherwise unexercisable option under any existing stock option plan; | |
• | acquiring or purchasing any entity, business, assets or equity interests or purchasing or acquiring any properties or assets of any person other than purchases of inventory, raw materials and supplies in the ordinary course of business consistent with past practice and capital expenditures in the ordinary course of business consistent with past practice in an amount not to exceed $2 million in the aggregate; | |
• | transferring, selling, leasing, licensing, exchanging, swapping, mortgaging, pledging, allowing to lapse or expire or subjecting to a lien (other than a permitted lien), encumbering or otherwise surrendering, relinquishing or disposing of any of the Company’s assets, properties or rights, including our securities, other than in the ordinary course of business consistent with past practice; | |
• | incurring, assuming, guaranteeing, prepaying, defeasing, cancelling or otherwise becoming liable for any indebtedness for borrowed money other than any new indebtedness among the Company or any of our subsidiaries or among our subsidiaries and new indebtedness incurred under our existing credit facility in connection with the payment of obligations or commitments existing as of the date of the Merger Agreement or for permitted capital expenditures in an amount not to exceed $8 million; | |
• | making any investments in or capital contributions to any other person other than investments in or capital contributions to any of our subsidiaries by the Company or by any of our subsidiaries; | |
• | assuming, guaranteeing, endorsing or otherwise becoming liable or responsible for the indebtedness of another person (other than a guaranty by the Company on behalf of our subsidiaries or among our subsidiaries) that is in excess of $100,000 individually or $500,000 in the aggregate and other than in the ordinary course of business consistent with past practice; | |
• | entering into any material joint venture or material statutory partnership; | |
• | entering into certain related party transactions; | |
• | granting any new compensation or benefits or increasing the compensation or other benefits payable to any of our current or former directors, officers, consultants or employees or triggering the forgiveness of indebtedness owed by such individuals except in the ordinary course of business consistent with past practice, provided that any increase in compensation payable to an executive officer shall not exceed 3% of such executive officer’s current compensation; | |
• | adopting any new employee benefit plans, programs, policies or agreements or entering into any employment, consulting, change of control, severance, termination or retention agreement with any individual except for (1) employment agreements terminable on less than 30 days’ notice without penalty in the ordinary course of business consistent with past practice or, with respect to employees outside the |
-48-
Table of Contents
United States, otherwise in accordance with the past practice of our foreign subsidiaries or (2) in connection with new hires (other than officers) in the ordinary course of business consistent with past practice; |
• | establishing, adopting, entering into or amending any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any of our current or former directors, officers, consultants or employees or any of their beneficiaries; | |
• | paying any pension, retirement allowance or other equity or equity-related award or employee benefit pursuant to any existing plan, program, policy, agreement or arrangement to any of our current or former officers, directors, employees, consultants or affiliates or paying or making any arrangement for payment such individuals of any amount relating to unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice; | |
• | adopting or paying, granting, issuing or accelerating salary or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, other equity or equity-related, group or other insurance, severance or termination pay, change in control, pension, retirement, savings, welfare, perquisite, fringe benefit or other employee benefit plan, program, policy, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any of our current or former directors, officers, consultants or employees; | |
• | amending in any material respect any benefit plan of the Company, including any such existing plan, program, policy, agreement or arrangement; | |
• | paying, discharging, settling or in any way satisfying any claims, liabilities or obligations, other than in the ordinary course of business consistent with past practice, cancelling any material indebtedness due to the Company or waiving, releasing or assigning any claims or rights of material value other than in the ordinary course of business consistent with past practice; | |
• | compromising or settling or agreeing to settle any action, suit, claim, litigation, investigation or other proceeding for more than $150,000; | |
• | making, revoking or amending any material election related to taxes, failing to file any tax return when due or taking certain other actions with respect to taxes; | |
• | modifying, amending, extending or terminating any material contract or waiving, releasing or assigning any rights under any material contract or entering into any new material contract other than in the ordinary course of business consistent with past practice; | |
• | changing our financial accounting policies or procedures or our system of internal accounting controls; | |
• | terminating or cancelling, or amending or modifying in any material respect, any material insurance policies which are not replaced by a comparable amount of insurance coverage; | |
• | adopting, entering into or implementing a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization; | |
• | transferring, obtaining, abandoning, allowing to lapse or otherwise disposing of any rights to, or granting any license or non-assertion under, any material intellectual property, or disclosing or agreeing to disclose any trade secrets except as necessary in the ordinary course of business consistent with past practice; | |
• | taking or permitting any action that would result in any of the conditions to the Merger not being satisfied; | |
• | effectuating a plant closing or mass layoff; | |
• | creating any subsidiary; | |
• | amending, taking any action or making any determination with respect to the Company’s Rights Agreement; | |
• | failing to enforce, or granting any waiver or release, under any standstill or similar agreement; or | |
• | proposing or agreeing to take any of the foregoing actions. |
-49-
Table of Contents
• | initiate, solicit or encourage (including by way of furnishing information or assistance), or knowingly induce, or take any other action designed to, or that is reasonably expected to, facilitate any inquiry with respect to the making, submission or announcement of, any proposal or offer that constitutes a Takeover Proposal (as defined in the Merger Agreement); | |
• | enter into any letter of intent, memorandum of understanding, merger agreement or other agreement, arrangement or understanding relating to any Takeover Proposal; | |
• | enter into, continue or otherwise participate in any discussions or negotiations regarding, furnish to any person any information or data or access to our properties with respect to, or otherwise cooperate with or take any other action to facilitate any proposal that constitutes, or is reasonably expected to lead to, any Takeover Proposal or requires us to abandon, terminate or fail to consummate the Merger or any other transactions contemplated by the Merger Agreement; or | |
• | submit to our shareholders for their approval any Takeover Proposal, or agree or publicly announce an intention to take any of the foregoing actions. |
• | furnish information with respect to the Company and our subsidiaries to the third party making such Takeover Proposal and its representatives pursuant to a confidentiality agreement (a copy of which will be provided to Parent promptly after its execution) containing confidentiality and other provisions that are substantially similar to the comparable provisions of our confidentiality agreement with Parent and are no less restrictive than those contained in our confidentiality agreement with Parent, provided that such confidentiality agreement shall not contain any provisions that would prevent the Company from complying with its obligation to provide the required disclosure to Parent pursuant the Merger Agreement, and provided further that all such information provided to such third party has previously been provided to Parent or is provided to Parent prior to or substantially concurrently with the time it is provided to such third party; and | |
• | participate in discussions or negotiations with such third party with respect to the Takeover Proposal; |
-50-
Table of Contents
• | change its recommendation to shareholders regarding the Merger; and/or | |
• | terminate the Merger Agreement to enter into an agreement with respect to the Superior Proposal. |
• | “Takeover Proposal” means any inquiry, proposal or offer (whether or not in writing) from any person relating to, or that is reasonably expected to lead to, any direct or indirect (a) acquisition or purchase, in one transaction or a series of transactions, of any assets or businesses that constitute 15% or more of the revenues, net income, EBITDA (earnings before interest expense, taxes, depreciation and amortization) or assets of the Company and the subsidiaries, taken as a whole, or 15% or more of any class of securities of the Company or any of our subsidiaries, (b) any tender offer or exchange offer that if consummated would result in any person beneficially owning 15% or more of any class of securities of the Company or any of our subsidiaries, (c) any merger, consolidation, business combination, recapitalization, liquidation, dissolution, joint venture, binding share exchange or similar transaction involving the Company or any of our subsidiaries pursuant to which any person or the shareholders of any person would own 15% or more of any class of securities of the Company or any of our subsidiaries or of any resulting parent company of the Company or (d) any combination of the foregoing (in each case, other than the Merger or the transactions contemplated by the Merger Agreement). | |
• | “Superior Proposal” means a bona fide Takeover Proposal that did not otherwise result from a breach of the Merger Agreement (provided, that for purposes of this definition references to 15% in the definition of “Takeover Proposal” shall be deemed to be references to 50%) which the Board of Directors reasonably determines in good faith (after consultation with outside counsel and a financial advisor of nationally recognized reputation) to be (i) more favorable to our shareholders from a financial point of view than the |
-51-
Table of Contents
Merger, taking into account all relevant factors (including all the terms and conditions of such proposal and the Merger and the Merger Agreement (including any changes to the terms of the Merger and the Merger Agreement proposed by Parent in response to such offer or otherwise)) and (ii) reasonably capable of being promptly completed, taking into account all financial (including the status and terms of financing of such Takeover Proposal), legal, regulatory and other aspects of such proposal. |
-52-
Table of Contents
-53-
Table of Contents
• | approval of the Merger Agreement by our shareholders; | |
• | absence of legal prohibitions on completion of the Merger; and | |
• | expiration or termination of any applicable waiting periods under the HSR Act or any applicable foreign competition law relating to the Merger. |
• | the representations and warranties of the Company relating to capitalization were true and correct (except for anyde minimis inaccuracy), and the representations and warranties of the Company qualified by materiality or Company Material Adverse Effect (as defined in the Merger Agreement) were true and correct in all respects, and the representations and warranties of the Company not qualified by materiality or Company Material Adverse Effect were true and correct in all material respects, in each of the foregoing cases, as of the date of the Merger Agreement; the representations and warranties relating to the Company’s capitalization shall be true and correct (except for anyde minimisinaccuracy) as of the closing date of the Merger; the other representations and warranties of the Company must be true and correct as of the closing date, except where the failure to be so true and correct individually or in the aggregate has not had and would not reasonably be expected to have a Company Material Adverse Effect; the Company has performed in all material respects its obligations and complied in all material respects with all covenants required to be performed or complied with by it; and the Company has delivered a certificate signed by the chief executive officer and chief financial officer of the Company to the foregoing effect; and | |
• | since the date of the Merger Agreement there has not been a Company Material Adverse Effect. |
• | the representations and warranties of Parent and Merger Sub qualified by materiality or Parent Material Adverse Effect (as defined in the Merger Agreement) were true and correct in all respects, and the representations and warranties of Parent not qualified by materiality or Parent Material Adverse Effect were true and correct in all material respects, in each case, as of the date of the Merger Agreement; the representations and warranties of Parent and Merger Sub must be true and correct as of the closing date, except where the failure to be so true and correct individually or in the aggregate has not had and would not reasonably be expected to have a Parent Material Adverse Effect, Parent and Merger Sub have each performed in all material respects its obligations and complied in all material respects with all covenants required to be performed or complied with by it; and Parent and Merger Sub have delivered a certificate signed on behalf of Parent by the chief executive officer and chief financial officer of Parent to the foregoing effect. |
-54-
Table of Contents
• | by mutual written consent of Parent and the Company; | |
• | by either Parent or Company if: |
• | the Merger has not been consummated on or before June 30, 2010 and the party seeking to terminate the Merger Agreement for this reason has not breached its obligations in any material respect under the Merger Agreement in any manner that shall have proximately caused or resulted in the failure of the Merger to have been consummated by such date; | |
• | an order has been entered permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger and such order has become final and non-appealable, provided that the party seeking to terminate the Merger Agreement for this reason has complied with the covenant requiring that such party use reasonable best efforts to consummate the Merger with respect to such order; or | |
• | our shareholders do not approve the Merger Agreement. |
• | By Parent if: |
• | any of the representations or warranties of the Company were untrue or inaccurate as of the date of the Merger Agreement or thereafter became untrue or inaccurate or the Company has breached or failed to perform any covenant or agreement under the Merger Agreement that would cause the conditions to closing not to be satisfied and such untruth, inaccuracy, breach or failure to perform is incurable or has not been cured by the Company within fifteen (15) days after written notice to the Company describing such untruth, inaccuracy, breach or failure to perform (or cured by June 29, 2010 if such date is less than fifteen (15) days after written notice); | |
• | our Board of Directors or any committee thereof changes the Board of Directors’ recommendation to our shareholders regarding the approval of the Merger Agreement; | |
• | our Board of Directors or any committee thereof fails to reaffirm the Board of Directors’ recommendation to our shareholders regarding the approval of the Merger Agreement in accordance with the NJBCA within three (3) business days of a request to do so from Parent; or | |
• | the Company or any of our subsidiaries or any their representatives have breached their respective obligations under the no solicitation provisions of the Merger Agreement in any material respect (as discussed under “— Conduct of Business Pending the Merger — Restrictions on Solicitations”) and such breach is incurable or has not been cured within fifteen (15) days after written notice to the Company describing such breach (or cured by June 29, 2010 if such date is less than fifteen (15) days after written notice). |
• | By the Company if: |
• | any of the representations or warranties of Parent or Merger Sub were untrue or inaccurate as of the date of the Merger Agreement or thereafter became untrue or inaccurate or Parent or Merger Sub breached or failed to perform any of their respective covenants or agreements under the Merger Agreement that would cause the conditions to closing not to be satisfied and such untruth, inaccuracy, breach or failure to perform is incurable or has not been cured within fifteen (15) days after written notice to Parent and Merger Sub describing such untruth, inaccuracy, breach or failure to perform (or cured by June 29, 2010 if such date is less than fifteen (15) days after written notice); or | |
• | our Board of Directors determines to accept a Superior Proposal and the Company has complied with its obligations under the no solicitation provisions of the Merger Agreement (as discussed under the section above titled “— Conduct of Business Pending the Merger — Restrictions on Solicitations”) and concurrently with such termination pays the termination fee of $12 million to Parent. |
-55-
Table of Contents
• | if a Takeover Proposal or intention to make a Takeover Proposal (whether or not conditional) is made to our shareholders, otherwise publicly disclosed or proposed or is communicated to our senior management, the Board of Directors or a committee thereof and the Merger Agreement is thereafter terminated: |
• | by either the Company or Parent because (1) the Merger has not been consummated on or before June 30, 2010 (and the party seeking to terminate the Merger Agreement for this reason has not breached its obligations in any material respect under the Merger Agreement in any manner that shall have proximately caused or resulted in the failure of the Merger to have been consummated by such date) or (2) our shareholders do not approve the Merger Agreement, in each case at a time when a Takeover Proposal is pending; or | |
• | by Parent because any of the representations or warranties of the Company were untrue or inaccurate as of the date of the Merger Agreement or have become untrue or inaccurate or the Company has breached or failed to perform any covenant or agreement in the Merger Agreement that would cause the conditions to closing not to be satisfied and such untruth, inaccuracy, breach or failure to perform is incurable or has not been cured by the Company within fifteen (15) days after written notice to the Company describing such untruth, inaccuracy, breach or failure to perform at a time when a Takeover Proposal is pending (or cured by June 29, 2010 if such date is less than fifteen (15) days after written notice); and | |
• | in each case, the Company has entered into a definitive agreement with respect to a Takeover Proposal or consummated a Takeover Proposal within twelve (12) months of such termination; |
• | the Merger Agreement is terminated by Parent because our Board of Directors or any of committee thereof has changed its recommendation to our shareholders regarding the approval of the Merger Agreement; | |
• | the Merger Agreement is terminated by Parent because our Board of Directors or any of committee thereof fails to reaffirm the recommendation to our shareholders regarding the approval of the Merger Agreement in accordance with the NJBCA within three (3) business days of a request to do so from Parent; | |
• | the Merger Agreement is terminated by Parent because the Company or any of our subsidiaries or any their representatives has breached their respective obligations under the no solicitation provisions of the Merger Agreement in any material respect (as discussed under the section above titled “— Conduct of Business Pending the Merger — Restrictions on Solicitations”) and such breach is incurable or has not been cured within fifteen (15) days after written notice to the Company describing such breach (or cured by June 29, 2010 if such date is less than fifteen (15) days after written notice); or |
-56-
Table of Contents
• | the Merger Agreement is terminated by the Company because the Board of Directors has determined to accept a Superior Proposal and the Company has complied with its obligations under the no solicitation provisions of the Merger Agreement (as discussed under “— Conduct of Business Pending the Merger — Restrictions on Solicitations”). |
-57-
Table of Contents
• | actions (including any amendment to our certificate of incorporation or bylaws), agreements or transactions that would reasonably be expected to frustrate the purposes of, impede, hinder, interfere with, nullify, prevent, delay or adversely affect, in each case in any material respect, the consummation of the transactions contemplated by the Merger Agreement; | |
• | any Takeover Proposal and any action in furtherance of any Takeover Proposal as described in “Terms of the Merger Agreement — Conduct of Business Pending the Merger — Restrictions on Solicitations” beginning on page 50 of this proxy statement; | |
• | any merger, acquisition, sale, consolidation, reorganization, recapitalization, extraordinary dividend, dissolution, liquidation or winding up of or by the Company, or any other extraordinary transaction involving the Company (other than the Merger); | |
• | any action, proposal, transaction or agreement that would reasonably be expected to result in a breach, in any material respect, of any covenant, representation or warranty or any other obligation or agreement of such shareholder under the voting agreement; and | |
• | any other action, proposal, transaction or agreement that would reasonably be expected to result in the failure of any condition to the Merger to be satisfied. |
• | grant any proxies, powers of attorney, rights of first offer or refusal, or enter into any voting trust or voting agreement or arrangement with respect to any of such shareholder’s shares of Common Stock subject to the voting agreement; | |
• | sell (including short sell), assign, transfer, tender, pledge, encumber, grant a participation interest in, hypothecate or otherwise dispose (including by gift) of such shareholder’s shares of Common Stock subject to the voting agreement or enter into a contract to sell, assign, transfer, tender, pledge, encumber, grant a participation interest in, hypothecate or otherwise dispose of such shareholder’s shares, subject to certain exceptions for transfers to other shareholders of the Company, family members or for the benefit of family members, provided that each recipient of such a transfer agrees to be bound by the voting agreement; | |
• | otherwise permit any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement) to be created on any of such shareholder’s shares of Common Stock subject to the voting agreement; and |
-58-
Table of Contents
• | take any other action that would in any way restrict, limit or interfere in any material respect with the performance of such shareholder’s obligations under the voting agreement or transactions contemplated by the Merger Agreement. |
-59-
Table of Contents
-60-
Table of Contents
Common Stock | ||||||||
High | Low | |||||||
Fiscal Year Ended January 3, 2009 | ||||||||
1st Quarter | $ | 127.10 | $ | 95.33 | ||||
2nd Quarter | $ | 140.50 | $ | 122.20 | ||||
3rd Quarter | $ | 170.00 | $ | 108.93 | ||||
4th Quarter | $ | 133.91 | $ | 53.47 | ||||
Fiscal Year Ending January 2, 2010 | ||||||||
1st Quarter | $ | 85.45 | $ | 45.70 | ||||
2nd Quarter | $ | 89.01 | $ | 57.86 | ||||
3rd Quarter | $ | 99.69 | $ | 77.03 | ||||
4th Quarter | $ | 113.48 | $ | 87.10 | ||||
Fiscal Year Ending January 1, 2011 | ||||||||
1st Quarter (Through [ ], 2010) | $ | [ ] | $ | [ ] |
-61-
Table of Contents
-62-
Table of Contents
Number of Shares | Percent of Common | |||||||
Name of Individual or Identity of Group | of Common Stock | Stock Outstanding | ||||||
Directors and Named Executive Officers: | ||||||||
Edward B. Cloues, II(1)(2) | 246,487 | 8.65 | % | |||||
Kevin C. Bowen(1) | 29,095 | 1.02 | % | |||||
Lukas Guenthardt(1)(3) | 36,355 | 1.27 | % | |||||
Robert E. Wisniewski | 2,500 | * | ||||||
Richard J. Pinola(1) | 18,314 | * | ||||||
Robert A. Engel(1) | 12,500 | * | ||||||
Donald W. Melchiorre | 4,500 | * | ||||||
Norman Cohen(1) | 4,469 | * | ||||||
Edward T. Hurd | 3,500 | * | ||||||
Ronald R. Remick (Chief Financial Officer, resigned May 30, 2009) | 23,400 | * | ||||||
All directors and executive officers as a group (9 persons)(4) | 357,720 | 12.37 | % | |||||
Other 5% Shareholders: | ||||||||
D. F. Dent & Company, Inc.(5) | 343,868 | 12.11 | % | |||||
T. Rowe Price Associates, Inc.(6) | 256,723 | 9.04 | % | |||||
Royce & Associates, LLC(7) | 196,738 | 6.93 | % | |||||
BlackRock Inc.(8) | 151,757 | 5.35 | % | |||||
Hillenbrand, Inc.(9) | 0 | 0 | % |
* | Less than 1% | |
(1) | Includes with respect to Mr. Cloues 10,000 shares, Mr. Bowen 10,000 shares, Mr. Guenthardt 19,000 shares, Mr. Pinola 6,000 shares, Mr. Engel 6,000 shares and Mr. Cohen 2,000 shares, all of which shares underlie options that are currently exercisable or will be exercisable within 60 days after February 5, 2010. All such shares, to the extent not exercised prior to the closing of the Merger, are not subject to the voting agreement entered into in connection with the Merger and the aforementioned individuals have sole voting and investment power with respect to such shares owned by them. | |
(2) | Includes 22,000 shares as to which Mr. Cloues shares investment and voting power with Mrs. Jan Beebe, the beneficial owner, by power of attorney, and 1,200 shares as to which Mr. Cloues shares investment and voting power with his mother, Mrs. Jeannette C. Cloues, also by power of attorney. All such shares are not subject to the voting agreement entered into in connection with the Merger, and with respect to these shares, voting and investment power is not shared with Parent. Mr. Cloues does not have an economic interest in Mrs. Beebe’s or Mrs. Cloues’ shares and disclaims beneficial ownership of such shares. Mr. Cloues is not related to Mrs. Beebe. |
-63-
Table of Contents
The business address of Mr. Cloues isc/o K-Tron International, Inc., Routes 55 and 553, P.O. Box 888, Pitman, New Jersey 08071. | ||
Also includes 100 shares of Common Stock held by Mr. Cloues that are not subject to the voting agreement entered into in connection with the Merger and over which he has sole voting and investment power. | ||
(3) | Includes 11,797 shares as to which Mr. Guenthardt shares investment and voting power with his wife. | |
(4) | Includes 53,000 shares subject to currently exercisable options or options that will be exercisable within 60 days after February 5, 2010. All such shares, to the extent not exercised prior to the closing of the Merger, are not subject to the voting agreement entered into in connection with the Merger, and with respect to these shares, voting and investment power is not shared with Parent. | |
(5) | As reflected in a Schedule 13G/A filed January 23, 2009. According to D.F. Dent & Company, Inc. (“Dent”), it (a) is a registered investment advisor and (b) has sole dispositive power over all such shares. The principal address of Dent is 2 East Read Street, 6th Floor, Baltimore, Maryland 21202. | |
(6) | As reflected in Amendment No. 17 to Schedule 13G filed February 12, 2009. According to T. Rowe Price Associates, Inc. (“Price Associates”), it (a) is a registered investment adviser, (b) has sole dispositive power over all such shares and (c) has sole voting power over 400 shares. 256,323 of the shares are owned by T. Rowe Price Small-Cap Value Fund, Inc. (“Small-Cap Value Fund”), a registered investment company, as to which Price Associates serves as investment adviser with power to direct investments. According to Small-Cap Value Fund, it has sole voting power over such shares. The principal address of Price Associates is 100 East Pratt Street, Baltimore, Maryland 21202. | |
(7) | As reflected in a Schedule 13G/A filed January 25, 2010. According to Royce & Associates, LLC (“Royce”), it (a) is a registered investment advisor and (b) has sole voting and sole dispositive power over all such shares. The principal address of Royce is 745 Fifth Avenue, New York, NY 10151. | |
(8) | As reflected in a Schedule 13G filed January 29, 2010. According to BlackRock, Inc. (“BlackRock”), (a) it is a parent holding company or control person, (b) its subsidiaries BlackRock Institutional Trust Company, N.A., BlackRock Fund Advisors and BlackRock Investment Management, LLC acquired the shares being reported and (c) it has sole voting and sole dispositive power over all such shares. The principal address of BlackRock is 40 East 52nd Street, New York, NY 10022. | |
(9) | As reflected in a Schedule 13D filed by Parent on January 15, 2010, Parent may be deemed, pursuant to the voting agreement entered into in connection with the Merger, to have beneficial ownership of 334,420 shares of Common Stock, which includes 281,420 shares of our Common Stock and 53,000 shares of our Common Stock that would be issuable upon exercise of outstanding options held by Mr. Cloues, Mr. Bowen, Mr. Guenthardt, Mr. Pinola, Mr. Engel and Mr. Cohen if such options were exercised within 60 days after February 5, 2010. Parent does not directly own any shares of our Common Stock as of the date hereof. |
-64-
Table of Contents
-65-
Table of Contents
-66-
Table of Contents
• | the Company’s Annual Report onForm 10-K; | |
• | the Company’s Quarterly Reports onForm 10-Q for the quarterly periods ended October 3, 2009, July 4, 2009, and April 4, 2009; and | |
• | the Company’s Current Reports onForm 8-K filed with the SEC on March 19, 2009, March 30, 2009, January 11, 2010 and January 12, 2010. |
Routes 55 & 553
P.O. Box 888
Pitman, New Jersey08071-0888
-67-
Table of Contents
-68-
Table of Contents
BY AND AMONG
HILLENBRAND, INC.,
KRUSHER ACQUISITION CORP.,
AND
K-TRON INTERNATIONAL, INC.
DATED AS OF
JANUARY 8, 2010
Table of Contents
Page | ||||||
ARTICLE I DEFINED TERMS | A-1 | |||||
Section 1.1 | Certain Defined Terms | A-1 | ||||
ARTICLE II THE MERGER | A-8 | |||||
Section 2.1 | The Merger | A-8 | ||||
Section 2.2 | Closing | A-9 | ||||
Section 2.3 | Effective Time | A-9 | ||||
Section 2.4 | Effects of the Merger | A-9 | ||||
Section 2.5 | Certificate of Incorporation and By-Laws of the Surviving Corporation | A-9 | ||||
Section 2.6 | Directors | A-9 | ||||
Section 2.7 | Officers | A-9 | ||||
Section 2.8 | Subsequent Actions | A-9 | ||||
Section 2.9 | Effect on Capital Stock | A-9 | ||||
Section 2.10 | Company Equity Plans; Treatment of Company Equity-Based Awards | A-10 | ||||
Section 2.11 | Exchange of Shares | A-11 | ||||
Section 2.12 | Withholding | A-12 | ||||
Section 2.13 | Lost, Stolen or Destroyed Certificates | A-12 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY | A-12 | |||||
Section 3.1 | Organization | A-13 | ||||
Section 3.2 | Subsidiaries | A-13 | ||||
Section 3.3 | Capitalization | A-13 | ||||
Section 3.4 | Authorization | A-15 | ||||
Section 3.5 | Consents and Approvals; No Violations | A-16 | ||||
Section 3.6 | SEC Reports; Company Financial Statements | A-17 | ||||
Section 3.7 | Internal Controls and Procedures | A-18 | ||||
Section 3.8 | Absence of Undisclosed Liabilities | A-18 | ||||
Section 3.9 | Proxy Statement | A-19 | ||||
Section 3.10 | Absence of Certain Changes | A-19 | ||||
Section 3.11 | Litigation | A-19 | ||||
Section 3.12 | Compliance with Laws | A-19 | ||||
Section 3.13 | Taxes | A-20 | ||||
Section 3.14 | Real and Personal Property | A-22 | ||||
Section 3.15 | Employee Benefit Plans and Related Matters; ERISA | A-23 | ||||
Section 3.16 | Employees; Labor Matters | A-25 | ||||
Section 3.17 | Intellectual Property | A-26 | ||||
Section 3.18 | Contracts | A-27 | ||||
Section 3.19 | Environmental Laws and Regulations | A-28 | ||||
Section 3.20 | Insurance Coverage | A-29 | ||||
Section 3.21 | Opinion of Financial Advisor | A-29 | ||||
Section 3.22 | Brokers | A-29 | ||||
Section 3.23 | Required Vote of the Company Shareholders | A-29 | ||||
Section 3.24 | Charter Provisions; Takeover Statutes | A-29 | ||||
Section 3.25 | Rights Agreement | A-29 | ||||
Section 3.26 | Affiliate Transactions | A-30 |
A-i
Table of Contents
Page | ||||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | A-30 | |||||
Section 4.1 | Organization | A-30 | ||||
Section 4.2 | Authorization | A-30 | ||||
Section 4.3 | Consents and Approvals; No Violations | A-30 | ||||
Section 4.4 | Information Supplied | A-31 | ||||
Section 4.5 | Available Funds | A-31 | ||||
Section 4.6 | Ownership and Operations of Merger Sub | A-31 | ||||
Section 4.7 | Brokers | A-31 | ||||
ARTICLE V COVENANTS AND AGREEMENTS | A-31 | |||||
Section 5.1 | Conduct of Business by the Company | A-31 | ||||
Section 5.2 | Investigation; Access to Information | A-34 | ||||
Section 5.3 | No Solicitation | A-34 | ||||
Section 5.4 | Proxy Statement; Company Shareholder Meeting | A-37 | ||||
Section 5.5 | Employees and Employee Benefit Matters | A-37 | ||||
Section 5.6 | Further Action; Reasonable Best Efforts | A-39 | ||||
Section 5.7 | Notification of Certain Matters | A-40 | ||||
Section 5.8 | Indemnification and Insurance | A-40 | ||||
Section 5.9 | Takeover Statute | A-40 | ||||
Section 5.10 | Public Announcements | A-41 | ||||
Section 5.11 | Shareholder Litigation | A-41 | ||||
ARTICLE VI CONDITIONS TO THE MERGER | A-41 | |||||
Section 6.1 | Conditions to Each Party’s Obligation to Effect the Merger | A-41 | ||||
Section 6.2 | Additional Conditions to Obligation of Parent and Merger Sub to Effect the Merger | A-41 | ||||
Section 6.3 | Additional Conditions to Obligation of the Company to Effect the Merger | A-42 | ||||
Section 6.4 | Failure of Conditions | A-42 | ||||
ARTICLE VII TERMINATION; AMENDMENT AND WAIVER | A-42 | |||||
Section 7.1 | Termination | A-42 | ||||
Section 7.2 | Effect of Termination | A-44 | ||||
Section 7.3 | Termination Fee | A-44 | ||||
Section 7.4 | Amendment | A-45 | ||||
Section 7.5 | Extension; Waiver | A-45 | ||||
ARTICLE VIII GENERAL PROVISIONS | A-45 | |||||
Section 8.1 | No Survival of Representations and Warranties | A-45 | ||||
Section 8.2 | Notices | A-45 | ||||
Section 8.3 | Interpretation | A-46 | ||||
Section 8.4 | Counterparts; Effectiveness | A-46 | ||||
Section 8.5 | Entire Agreement; Third Party Beneficiaries | A-47 | ||||
Section 8.6 | Severability | A-47 | ||||
Section 8.7 | Assignment | A-47 | ||||
Section 8.8 | GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL | A-47 | ||||
Section 8.9 | Enforcement | A-48 | ||||
Section 8.10 | Expenses | A-48 |
A-ii
Table of Contents
Exhibit | Title | |
A | Support Directors and Officers | |
B | Form of Voting Agreement | |
C | Amended and Restated Certificate of Incorporation of Surviving Corporation |
A-iii
Table of Contents
A-1
Table of Contents
A-2
Table of Contents
A-3
Table of Contents
A-4
Table of Contents
A-5
Table of Contents
A-6
Table of Contents
A-7
Table of Contents
A-8
Table of Contents
A-9
Table of Contents
A-10
Table of Contents
A-11
Table of Contents
A-12
Table of Contents
A-13
Table of Contents
A-14
Table of Contents
A-15
Table of Contents
A-16
Table of Contents
A-17
Table of Contents
A-18
Table of Contents
A-19
Table of Contents
A-20
Table of Contents
A-21
Table of Contents
A-22
Table of Contents
A-23
Table of Contents
A-24
Table of Contents
A-25
Table of Contents
A-26
Table of Contents
A-27
Table of Contents
A-28
Table of Contents
A-29
Table of Contents
A-30
Table of Contents
A-31
Table of Contents
A-32
Table of Contents
A-33
Table of Contents
A-34
Table of Contents
A-35
Table of Contents
A-36
Table of Contents
A-37
Table of Contents
A-38
Table of Contents
A-39
Table of Contents
A-40
Table of Contents
A-41
Table of Contents
A-42
Table of Contents
A-43
Table of Contents
A-44
Table of Contents
A-45
Table of Contents
A-46
Table of Contents
A-47
Table of Contents
A-48
Table of Contents
By: | /s/ Kenneth A. Camp |
Title: | President and Chief Executive Officer |
By: | /s/ John R. Zerkle |
Title: | Vice President and Secretary |
By: | /s/ Edward B. Cloues, II |
Title: | Chairman and Chief Executive Officer |
A-49
Table of Contents
A-50
Table of Contents
A-51
Table of Contents
A-52
Table of Contents
A-53
Table of Contents
A-54
Table of Contents
A-55
Table of Contents
A-56
Table of Contents
A-57
Table of Contents
By: |
By: |
A-58
Table of Contents
Subject Shares | ||||||||||||||||||||
Shares | Outstanding as | |||||||||||||||||||
Beneficially | of January 8, | Company | Company | Excluded | ||||||||||||||||
Shareholder | Owned | 2010 | Stock Options | RSUs | Shares |
A-59
Table of Contents
CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION
A-60
Table of Contents
By: |
A-61
Table of Contents
B-1
Table of Contents
B-2
Table of Contents
B-3
Table of Contents
B-4
Table of Contents
B-5
Table of Contents
B-6
Table of Contents
B-7
Table of Contents
By: | /s/ Kenneth A. Camp |
Title: | President and Chief Executive Officer |
By: | /s/ John R. Zerkle |
Title: | Vice President and Secretary |
B-8
Table of Contents
/s/ Kevin C. Bowen |
B-9
Table of Contents
/s/ Edward B. Cloues, II |
B-10
Table of Contents
/s/ Norman Cohen |
B-11
Table of Contents
/s/ Robert A. Engel |
B-12
Table of Contents
/s/ Lukas Guenthardt |
B-13
Table of Contents
/s/ Edward T. Hurd |
B-14
Table of Contents
/s/ Donald W. Melchiorre |
B-15
Table of Contents
/s/ Richard J. Pinola |
B-16
Table of Contents
/s/ Robert E. Wisniewski |
B-17
Table of Contents
Subject Shares | ||||||||||||||||||||
Shares | Outstanding as | |||||||||||||||||||
Beneficially | of January 8, | Company | Company | Excluded | ||||||||||||||||
Shareholder | Owned | 2010 | Stock Options(1) | RSUs(1) | Shares | |||||||||||||||
Kevin C. Bowen | 30,095 | 19,095 | 10,000 | 1,000 | ||||||||||||||||
Edward B. Cloues, II | 248,487 | 213,287 | 10,000 | 2,000 | 23,300 | (2) | ||||||||||||||
Norman Cohen | 4,469 | 2,469 | 2,000 | |||||||||||||||||
Robert A. Engel | 12,500 | 6,500 | 6,000 | |||||||||||||||||
Lukas Guenthardt | 37,355 | 17,355 | (3) | 19,000 | 1,000 | |||||||||||||||
Edward T. Hurd | 3,500 | 3,500 | ||||||||||||||||||
Donald W. Melchiorre | 5,500 | 4,500 | 1,000 | |||||||||||||||||
Richard J. Pinola | 18,314 | 12,314 | 6,000 | |||||||||||||||||
Robert E. Wisniewski | 3,500 | 2,500 | 1,000 |
(1) | The Shares underlying Company Stock Options and Company RSUs are included in the “Shares Beneficially Owned” column. |
(2) | Mr. Cloues has shared power to vote or direct the vote, and to dispose or direct the disposition, of 23,200 Shares that he indirectly beneficially owns pursuant to powers of attorney granted to him by each of Mrs. Jeanette C. Cloues and Mrs. Jan W. Beebe. Also includes 100 Shares Mr. Cloues intends to transfer to Upper Dublin Lutheran Church. |
(3) | Mr. Guenthardt shares investment and voting power with his wife, Megan C. Guenthardt, for 11,797 Shares. |
B-18
Table of Contents
C-1
Table of Contents
C-2
Table of Contents
C-3
Table of Contents
. . . . . . 0 K-TRON INTERNATIONAL, INC. PROXYTHIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.The undersigned hereby appoints EDWARD B. CLOUES, II and ROBERT E. WISNIEWSKI, or either of them acting singly in the absence of the other, each with the power to appoint his substitute, the Proxy Agents of the undersigned to attend the Special Meeting of Shareholders of K-Tron International, Inc. to be held at the offices of Morgan, Lewis & Bockius LLP located at 1701 Market Street, Philadelphia, Pennsylvania 19103, on ___, 2010, at ___a.m., local time, and any adjournments or postponements thereof, and with all powers the undersigned would possess if personally present, to vote upon any matter to be voted upon by shareholders at that meeting as indicated on the reverse side.WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE PROPOSALS. IF ANY OTHER MATTER COMES BEFORE THE SPECIAL MEETING, THE PROXIES WILL VOTE THIS PROXY IN THEIR DISCRETION ON SUCH MATTER. PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT USING THE ENCLOSED SELF-ADDRESSED STAMPED ENVELOPE. (Continued and to be signed, marked and dated on the reverse side.)14475 |
Table of Contents
SPECIAL MEETING OF SHAREHOLDERS OF K-TRON INTERNATIONAL, INC. ___, 2010 PROXY VOTING |
INSTRUCTIONS INTERNET —Access “www.voteproxy.com” and follow the on-screen instructions. Have your proxy card available when you access the web page, and use the Company Number and Account Number shown on your proxy card.TELEPHONE —Call toll-free1-800-PROXIES(1-800-776-9437) in the United States or1-718-921-8500from foreign countries from any touch-tone telephone and follow the instructions. Have your proxyCOMPANY NUMBERcard available when you call and use the Company Number and Account Number shown on your proxy card.ACCOUNT NUMBERVote online/phone until 11:59 PM EST the day before the Meeting.MAIL —Sign, date and mail your proxy card in the envelope provided as soon as possible.IN PERSON —You may vote your shares in person by attending the Special Meeting.IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON ___, 2010: The Notice of Special Meeting, Proxy Statement and form of Proxy Card are available at http://___.com Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. —— ——THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1 AND 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx FOR AGAINST ABSTAIN 1. ELECTION OF DIRECTORS: 1. PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF MERGER, DATED AS OF JANUARY 8, 2010, BY AND AMONGNOMINEES:HILLENBRAND, INC., KRUSHER ACQUISITION CORP. AND K-TRONFOR ALL NOMINEESO E. James Harris Class II director INTERNATIONAL, INC. O John W. Burton Class II director 2. PROPOSAL TO APPROVE THE ADJOURNMENT OF THE SPECIALWITHHOLD AUTHORITYO Aubrey B. Smith, Jr. Class II directorFOR ALL NOMINEESMEETING, IF NECESSARY OR APPROPRIATE TO SOLICIT ADDITIONAL O David E. Browne Class II director PROXIES IF THERE ARE NOT SUFFICIENT VOTES AT THE TIME OF THE SPECIAL MEETING TO APPROVE THE AGREEMENT AND PLANFOR ALL EXCEPT(See instructions below) OF MERGER.INSTRUCTIONS:To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here:JOHN SMITH 1234 MAIN STREET APT. 203 NEW YORK, NY 10038To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. Signature of Shareholder Date: Signature of Shareholder Date:Note:Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |