MENTOR GRAPHICS CORPORATION (MENT) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
Merger Agreement
On November 12, 2016, Mentor Graphics Corporation, an Oregon
corporation (the Company), Siemens Industry, Inc., a Delaware
corporation (Parent), and Meadowlark Subsidiary Corporation, an
Oregon corporation and a wholly-owned subsidiary of Parent
(Merger Subsidiary), entered into an Agreement and Plan of Merger
(the Merger Agreement), to which, among other things, Merger
Subsidiary will be merged with and into the Company (the Merger),
with the Company surviving the Merger as a wholly-owned
subsidiary of Parent. At the time the Merger becomes effective
(the Effective Time), each outstanding share of common stock,
without par value, of the Company (Company Stock), other than
shares of Company Stock owned by Parent, Merger Subsidiary or the
Company, will be cancelled and converted into the right to
receive cash, without interest, in the amount of $37.25 (the
Merger Consideration).
to the Merger Agreement, as of the Effective Time, (a) each
outstanding option with an exercise price that is less than the
Merger Consideration, whether vested or unvested, will be
canceled in exchange for the right to receive a payment in cash
equal to the product of the number of shares subject to such
option and the excess of the Merger Consideration over the
exercise price of such option, (b) each outstanding option with
an exercise price that is greater than or equal to the Merger
Consideration, whether vested or unvested, will be canceled
without payment and (c) each outstanding award of restricted
stock units with respect to shares granted under a Company Stock
Plan (as such term is defined in the Merger Agreement) (each, a
Company RSU), whether vested or unvested, will be canceled in
exchange for the right to receive a payment in cash equal to the
product of the number of shares subject to such Company RSU and
the Merger Consideration (with the total number of shares subject
to Company RSUs that are subject to performance-based vesting
(each, a Company PSU) to be determined as the greater of 50% of
the target number of shares subject to such Company PSU and the
number eligible to be paid based on actual performance through
the closing of the Merger).
The Board of Directors of the Company (the Board) has approved
the Merger Agreement, the Merger and the other transactions
contemplated thereby. The closing of the Merger is subject to the
approval of the Merger Agreement by the affirmative vote of the
holders of at least a majority of the outstanding shares of
Company Stock (the Company Shareholder Approval). The closing of
the Merger is also subject to various customary conditions,
including the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended; receipt of clearance from the Committee on
Foreign Investment in the United States; receipt of other
specified regulatory approvals; the absence of any temporary
restraining order, preliminary or permanent injunction or other
judgment issued by any court of competent jurisdiction enjoining
or otherwise prohibiting the consummation of the Merger; the
accuracy of the representations and warranties contained in the
Merger Agreement (generally subject to a material adverse effect
qualification); and compliance with the covenants and agreements
in the Merger Agreement in all material respects. The closing of
the Merger is not subject to a financing condition.
The Company has made customary representations, warranties and
covenants in the Merger Agreement, including, among others,
covenants (a) to conduct its business in the ordinary course
during the period between the execution of the Merger Agreement
and the closing of the Merger, (b) not to engage in specified
types of transactions during this period unless agreed to in
writing by Parent, (c) to convene and hold a meeting of its
shareholders for the purpose of obtaining the Company Shareholder
Approval and (d) subject to certain exceptions, not to withdraw,
modify or qualify in a manner adverse to Parent or Merger
Subsidiary the recommendation of the Board that the Companys
shareholders approve and adopt the Merger Agreement.
The Merger Agreement contains certain termination rights,
including the right of the Company to terminate the Merger
Agreement under specified circumstances to accept an unsolicited
superior proposal from a third party. The Merger Agreement
provides that, upon termination of the Merger Agreement by the
Company or Parent under specified circumstances (including
termination by the Company to accept a superior proposal), a
termination fee of $134.45 million will be payable by the Company
to Parent. The Company termination fee is also payable under
certain other specified circumstances, including if Parent
terminates the Merger Agreement due to the Boards change of
recommendation in favor of the Merger or the Companys failure to
include the Boards recommendation in favor of the Merger in the
proxy statement. The Merger Agreement also provides that each
party to the Merger Agreement may compel the other party or
parties thereto to specifically perform its or their obligations
under the Merger Agreement. Subject to certain exceptions and
limitations, either party may terminate the Merger Agreement if
the Merger is not consummated by 360 days following November 12,
2016, subject to a 90-day extension under certain circumstances
(such date, the End Date).
Siemens Support Letter
to the Support Letter, dated November 12, 2016, between Siemens
Aktiengesellschaft (Siemens) and the Company (the Support
Letter), Siemens has guaranteed the full and complete discharge
and performance of all of Parents and Merger Subsidiarys
obligations and liabilities to the Merger Agreement.
Elliott Support Agreement
to the Support Agreement, dated November 12, 2016, between
Elliott Associates, L.P., Elliott International, L.P. and Elliott
International Capital Advisors Inc. (collectively, Shareholder),
Parent and the Company (the Support Agreement), Shareholder has
agreed, among other things, to vote its shares of Company Stock
in favor of the adoption of the Merger Agreement, as well as such
other matters set forth in the Support Agreement. The Support
Agreement also contains a lock-up provision that, subject to
limited exceptions, prevents Shareholder from transferring its
shares of Company Stock until the termination of the Support
Agreement in accordance with its terms, the receipt of the
Company Shareholder Approval or the time (if any) at which the
Board shall have made an Adverse Recommendation Change (as
defined in the Merger Agreement). In addition, the Support
Agreement provides that Shareholder shall not take any actions
that would be inconsistent with the non-solicitation provisions
of the Merger Agreement.The Support Agreement terminates upon the
earliest of (i) the Effective Time, (ii) the termination of the
Merger Agreement in accordance with its terms or the adoption of
any amendment to the Merger Agreement that imposes any material
restrictions or additional material conditions on the
consummation of the Merger or the payment of the Merger
Consideration, extends the End Date or decreases the amount or
changes the form of the Merger Consideration, or (iii) the End
Date.
The foregoing description of the Merger Agreement, the Support
Letter and the Support Agreement does not purport to be complete
and is qualified in its entirety by reference to the Merger
Agreement, the Support Letter and the Support Agreement, which
are filed as Exhibits 2.1, 10.1 and 10.2, respectively, to this
Current Report on Form 8-K and incorporated herein by reference.
The Merger Agreement is attached as an exhibit to this Current
Report on Form 8-K to provide investors with information
regarding its terms. It is not intended to provide any other
factual information about the Company. The representations,
warranties and covenants contained in the Merger Agreement were
made only for purposes of the Merger Agreement as of the specific
dates therein, were solely for the benefit of the parties to the
Merger Agreement, may be subject to limitations agreed upon by
the contracting parties, including being qualified by
confidential disclosures made for the purposes of allocating
contractual risk among the parties to the Merger Agreement
instead of establishing these matters as facts, and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors. Investors
are not third-party beneficiaries under the Merger Agreement and
should not rely on the representations, warranties and covenants
or any descriptions thereof as characterizations of the actual
state of facts or condition of the parties thereto or any of
their respective subsidiaries or affiliates. Moreover,
information concerning the subject matter of representations,
warranties and covenants may change after the date of the Merger
Agreement, which subsequent information may or may not be fully
reflected in the Companys public disclosures.
Item5.03. |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On November 12, 2016, the Board approved an amendment (the Bylaw
Amendment) to add a new Article XII to the Companys Bylaws, which
became effective immediately. The Bylaw Amendment added Article
XII to the Bylaws which provides that, unless the Company
consents in writing to the selection of an alternative forum, the
sole and exclusive forum for certain legal actions involving the
Company will be a state or federal court located within the state
of Oregon.
The foregoing summary of the Bylaw Amendment is qualified in its
entirety by the text of the Bylaw Amendment, which is attached as
Exhibit 3.1 to this Current Report on Form 8-K and incorporated
herein by reference.
Item7.01. |
Regulation FD Disclosure. |
On November 14, 2016, the Company and Siemens issued a joint
press release announcing the entry into the Merger Agreement. The
text of the press release is attached as Exhibit 99.1 and is
incorporated herein by reference.
The information under this Item 7.01 of this Current Report on
Form 8-K, including Exhibit 99.1, is being furnished under Item
7.01 and shall not be deemed to be filed for purposes of Section
18 of the Securities Exchange Act of 1934, as
amended (the Exchange Act), or otherwise subject to liability of
that section, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, regardless of any general
incorporation language in such filing, except as shall be
expressly set forth by specific reference in such filing.
Item9.01. |
Financial Statements and Exhibits. |
(d) Exhibits
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| 2.1* |
Agreement and Plan of Merger dated as of November 12, 2016 among Siemens Industry, Inc., Meadowlark Subsidiary Corporation and Mentor Graphics Corporation |
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| 10.1 |
Support Letter between Siemens Aktiengesellschaft and Mentor Graphics Corporation, dated November 12, 2016 |
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| 10.2 |
Support Agreement among Elliott Associates, L.P., Elliott International, L.P., Elliott International Capital Advisors Inc., Siemens Industry, Inc. and Mentor Graphics Corporation, dated November 12, 2016 |
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| 3.1 | Amendment to the Bylaws of Mentor Graphics Corporation | |
| 99.1 | Press Release issued November 14, 2016 |
* |
All schedules to the Merger Agreement have been omitted to Item 601(b)(2) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. |
Additional Information and Where to Find
It
In connection with the proposed transaction, the Company will
file with the U.S. Securities and Exchange Commission (the SEC)
and mail or otherwise provide to its shareholders a proxy
statement regarding the proposed transaction. BEFORE MAKING ANY
VOTING DECISION, THE COMPANYS SHAREHOLDERS ARE URGED TO READ THE
PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY
OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED MERGER OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION
AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and
security holders may obtain a free copy of the proxy statement
and other documents that the Company files with the SEC (when
available) from the SECs website at www.sec.gov and the
Companys website at www.mentor.com. In addition, the
proxy statement and other documents filed by the Company with the
SEC (when available) may be obtained from the Company free of
charge by directing a request to Mentor Graphics Corporation,
Investor Relations, 8005 SW Boeckman Rd., Wilsonville, OR 97070,
1-503-685-1462.
Participants in Solicitation
The Company and its directors, executive officers and certain
employees may be deemed, and Siemens Industry, Inc. and its
managing board, officers and employees may be deemed, under SEC
rules, to be participants in the solicitation of proxies from the
Companys shareholders with respect to the proposed acquisition of
the Company by Siemens Industry, Inc. With respect to Siemens
Industry, Inc. and its managing board, officers and employees,
certain additional information is available and has been prepared
in accordance with the German Commercial Code. Information
concerning the ownership of the Companys securities by the
Companys directors and executive officers is included in their
SEC filings on Forms 3, 4 and 5, and additional information
regarding the names, affiliations and interests of such
individuals is available in the Companys Annual Report on Form
10-K for the fiscal year ended January 31, 2016 and its
definitive proxy statement for the 2016 annual meeting of
shareholders filed with the SEC on May 18, 2016. Information
regarding the Companys directors, executive officers and certain
other employees who may be deemed, under SEC rules, to be
participants in the solicitation of proxies from the Companys
shareholders with respect to the proposed acquisition of the
Company by Siemens Industry, Inc., including their respective
interests by security holdings or otherwise, also will be
included in the proxy statement relating to such acquisition when
it is filed with the SEC. These documents will be available free
of charge from the SECs website at www.sec.gov and the
Companys website at www.mentor.com.
Forward Looking Statements
Any statements in this communication about the Companys
expectations, beliefs, plans, objectives, prospects, financial
condition, assumptions or future events or performance, including
statements regarding the proposed acquisition of the Company by
Siemens Industry, Inc., the expected timetable for completing the
transaction, benefits and synergies of the transaction and future
opportunities for the combined company that are not historical
facts are forward-looking statements. The Company intends such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section
21E of the Securities Exchange Act of 1934 and the Private
Securities Reform Act of 1995. In some cases,
forward-looking statements can be identified by the following
words: may, will, could, would, should, expect, intend, plan,
anticipate, believe, estimate, predict, project, potential,
continue, ongoing, outlook, guidance and similar expressions,
although not all forward-looking statements contain these words.
The forward-looking information and statements are or may be
based on a series of projections and estimates and involve risks
and uncertainties. These risks and uncertainties include such
factors as: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
Merger Agreement, (2) the failure to obtain the approval of the
Companys shareholders or the failure to satisfy any of the other
closing conditions, (3) risks related to disruption of
managements attention from the Companys ongoing business
operations due to the proposed transaction, and (4) the effect of
the announcement of the transaction on the ability of the Company
to retain and hire key personnel and maintain relationships with
its customers, suppliers and others with whom it does business,
or on its operating results and business generally. Additional
risks relating to the Company and its business are described
under Item 1A, Risk Factors, in the Companys periodic filings
with the SEC, including the Companys Annual Report on Form 10-K
for the fiscal year ended January 31, 2015 and its Quarterly
Reports on Form 10-Q for the periods ended April 30, 2016 and
July 31, 2016. Given these risks and uncertainties, prospective
investors are cautioned not to place undue reliance on such
forward-looking statements. Further, any forward-looking
statement speaks only as of the date of this communication and
the Company disclaims any obligation to update any such
forward-looking statements or to publicly announce the results of
any revisions to any of the forward-looking statements to reflect
future events or developments.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
| MENTOR GRAPHICS CORPORATION | ||||||
| (Registrant) | ||||||
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By: |
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| Dean Freed | ||||||
| Vice President and General Counsel |
EXHIBIT INDEX
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| 2.1* |
Agreement and Plan of Merger dated as of November 12, 2016 among Siemens Industry, Inc., Meadowlark Subsidiary Corporation and Mentor Graphics Corporation |
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| 10.1 |
Support Letter between Siemens Aktiengesellschaft and Mentor Graphics Corporation, dated November 12, 2016 |
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| 10.2 |
Support Agreement among Elliott Associates, L.P., Elliott International, L.P., Elliott International Capital Advisors Inc., Siemens Industry, Inc. and Mentor Graphics Corporation, dated November 12, 2016 |
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| 3.1 | Amendment to the Bylaws of Mentor Graphics Corporation | |
| 99.1 | Press Release issued November 14, 2016 |
* |
All schedules to the Merger Agreement have been omitted |
About MENTOR GRAPHICS CORPORATION (MENT)