ORBITAL ATK,INC. (NYSE:OA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On September17, 2017, Orbital ATK,Inc. a Delaware corporation (the “Company,”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Northrop Grumman Corporation (“Northrop Grumman”) and Neptune Merger,Inc., a wholly owned subsidiary of Northrop Grumman (“Sub”). Upon the terms and subject to the conditions set forth in the Merger Agreement, Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly-owned subsidiary of Northrop Grumman (the “Merger”).
to the Merger Agreement, upon the closing of the Merger (the “Closing”), each outstanding share of Company common stock, other than shares owned by the Company, Northrop Grumman or Sub (which will be cancelled) and shares with respect to which appraisal rights are properly exercised and not withdrawn under Delaware law, will automatically be converted into the right to receive $134.50 in cash, without interest (the “Merger Consideration”).
Each stock option outstanding immediately prior to the effective time of the Merger (the “Effective Time”) will be converted into the right to receive a cash payment equal to the number of shares of common stock subject to the stock option, multiplied by the excess, if any, of the Merger Consideration over the exercise price per share of such stock option. Each restricted share outstanding immediately prior to the Effective Time will be converted into the right to receive a cash payment equal to the Merger Consideration. Each performance share outstanding immediately prior to the Effective Time will vest (i)for 2015-2017 awards, at the greater of target or actual performance and (ii)for other awards, at target performance, subject to proration except to the extent otherwise provided by an existing contractual arrangement, and will be converted into the right to receive a cash payment equal to the number of shares of common stock subject to the vested performance share, multiplied by the Merger Consideration. Each deferred stock unit and each phantom stock unit outstanding immediately prior to the Effective Time will be converted into the right to receive a cash payment equal to the number of shares of common stock subject to such deferred stock unit or phantom stock unit, multiplied by the Merger Consideration.
The consummation of the Merger is subject to certain closing conditions, including (i)the approval of the Merger and the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of the Company’s common stock (the “Stockholder Approval”), (ii)the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the issuance, or deemed issuance, by the European Commission of a decision finding the Merger to be compatible with the common market and (iii)that no injunctions or legal restraints exist that have the effect of preventing the consummation of the Merger. Moreover, each party’s obligations to consummate the Merger are subject to certain other conditions including (a)the accuracy of the other party’s representations and warranties and (b)the other party’s compliance with its obligations. Subject to the satisfaction of the closing conditions, the parties anticipate that the Merger will be consummated during the first half of 2018.
Northrop Grumman has obtained debt financing commitments for the purpose of financing the Merger.
The Merger Agreement contains certain covenants, including covenants providing (i)for each of the parties to use reasonable best efforts to cause the transaction to be consummated, (ii)for the Company to carry on its business in the ordinary course consistent with past practice during the interim period between the execution of the Merger Agreement and completion of the Merger and (iii)for the Company not to engage in certain kinds of transactions during this period.
The Merger Agreement obliges the Company to abide by customary “no-shop” restrictions on its ability to solicit alternative takeover proposals from third parties and to provide non-public information to and enter into discussions or negotiations with third parties regarding alternative takeover proposals. Notwithstanding this obligation, prior to the receipt of the Stockholder Approval, in the event that the Company receives an unsolicited alternative takeover proposal that the Company’s board of directors determines in good faith is, or determines in good faith would reasonably be expected to lead to, a Superior Proposal and that the failure to take such action would be inconsistent with its fiduciary duties to the stockholders of the Company, the Company may under certain circumstances furnish information to and engage in discussions or negotiations with the third party making such alternative takeover proposal. A “Superior Proposal” generally is a binding bona fide unsolicited written takeover proposal to acquire at least a majority of the outstanding shares of the Company’s common stock or all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, which proposal, in
