Filed by the Registrant ☒
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Filed by a party other than the Registrant ☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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Sincerely,
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Hudson La Force
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President and Chief Executive Officer
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1.
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To consider and vote on the proposal to adopt the Agreement and Plan of Merger, dated as of April 26, 2021 (the “Merger Agreement”), by and among W. R. Grace Holdings LLC (fka Gibraltar Acquisition Holdings LLC), a Delaware limited liability company (“Parent”), Gibraltar Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and Grace. Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into Grace and the separate corporate existence of Merger Sub will cease, with Grace continuing as the surviving corporation (the “Merger”) and a wholly owned subsidiary of Parent;
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To consider and vote on the proposal to approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to Grace’s named executive officers that is based on or otherwise relates to the Merger Agreement and the transactions contemplated by the Merger Agreement (the “Compensation Proposal”); and
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To consider and vote on any proposal to adjourn the Special Meeting to a later date or dates if necessary or appropriate to solicit additional proxies if there are insufficient votes to approve the proposal to adopt the Merger Agreement at the time of the Special Meeting (the “Adjournment Proposal”).
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By Order of the Board of Directors,
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Cherée H. Johnson
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Senior Vice President, General Counsel and Secretary
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the adoption of the Merger Agreement by the requisite affirmative vote of stockholders;
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the expiration or termination of the applicable waiting period under the HSR Act and the receipt of approvals, consents, waivers or clearances under the antitrust laws of certain specified foreign jurisdictions;
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the absence of any laws or judgments issued by a governmental entity of competent jurisdiction making the Merger illegal or otherwise prohibiting the Merger;
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in the case of Parent and Merger Sub, no “Company Material Adverse Effect” having occurred since the date of the Merger Agreement (as defined in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Representations and Warranties”);
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the accuracy of the representations and warranties of Grace, Parent and Merger Sub in the Merger Agreement, generally subject to a materiality qualification, as of the date of the Merger Agreement and as of the closing of the Merger as if made as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); and
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the performance in all material respects by Grace, Parent and Merger Sub of their respective obligations required to be performed by them under the Merger Agreement at or prior to the Effective Time.
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As a privately held company, Grace will have greater flexibility to operate with a view to the long term without focusing on short-term operating earnings and the associated implications to Grace’s unaffiliated security holders;
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By ceasing to be a public company, Grace will benefit from the elimination of the additional burdens on its management, as well as the expense associated with being a public company, including the burdens of preparing periodic reports, maintaining required controls under U.S. federal securities laws and the costs of maintaining investor relationships, staff and resources;
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The Merger will increase Standard Industries Holdings’ exposure to the specialty chemicals and specialty materials industries, which Standard Industries Holdings regards as attractive; and
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David S. Winter and David J. Millstone have significant experience in the specialty chemicals industry, including through their former roles as Director and Vice Chairmen of International Specialty Products Inc. prior to its 2011 sale to Ashland Inc., and the Purchaser Filing Persons believe that Messrs. Winter and Millstone can utilize that experience to effectively manage the Company’s business for the benefit of stakeholders.
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at the Effective Time, each Company Equity Award held by an executive officer or director will receive the treatment described in the section of this proxy statement captioned “Special Factors—Interests of Executive Officers and Directors of Grace in the Merger—Treatment of Company Equity Awards”;
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eligibility of Grace’s executive officers to receive severance payments and benefits under their change in control severance agreements with Grace and equity award vesting acceleration on certain terminations of employment under the Grace stock incentive plans, as described in more detail in the section of this proxy statement captioned “Special Factors—Interests of Executive Officers and Directors of Grace in the Merger”;
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eligibility of Grace’s executive officers to receive a retention bonus equal to 50% of the severance payment (as defined in the applicable change in control severance agreement) that would be payable under each such executive’s change in control severance agreement, subject to continued employment through the first anniversary of the closing (and in the event any such executive’s employment is terminated by Grace prior to the first anniversary of the closing, the executive would remain eligible to receive a severance payment as set forth in the executive’s change in control severance agreement); and
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continued indemnification and directors’ and officers’ liability insurance to be provided by the Surviving Corporation.
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by mutual agreement;
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the imposition of any final and non-appealable law or judgment by a governmental entity of competent jurisdiction that permanently restrains, enjoins or otherwise prohibits the consummation of the Merger;
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the other party breaches or fails to perform any of its covenants or agreements set forth in the Merger Agreement or any of the other party’s representations or warranties fails to be true and correct, which, in either case would give rise to a failure of the conditions to completion of the Merger relating to the accuracy of the other party’s representations and warranties or performance of the other party’s covenants and is not reasonably capable of being cured by the End Date (as defined below) or, if capable of being cured, is not cured within 30 calendar days following the delivery of written notice of such breach or failure;
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if the Merger has not been consummated by 5:00 p.m., New York City time, on January 26, 2022 (the “End Date”) (subject to extension to April 26, 2022 under certain circumstances, including for purposes of obtaining required regulatory approvals (as further described in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement”)); or
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if Grace Stockholders fail to adopt the Merger Agreement at the Special Meeting (or any adjournment or postponement thereof).
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the Grace Stockholders will not be entitled to, nor will they receive, any payment for their respective shares of Grace common stock pursuant to the Merger Agreement;
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(i) Grace will remain an independent public company; (ii) Grace common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act; and (iii) Grace will continue to file periodic reports with the SEC; and
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under certain specified circumstances, Grace will be required to pay Parent a Company Termination Fee of $141 million upon the termination of the Merger Agreement. For more information, please see the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Termination Fee.”
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Q:
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Why am I receiving these materials?
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The Board of Directors is furnishing this proxy statement and form of proxy card to the holders of shares of Grace common stock in connection with the solicitation of proxies to be voted at the Special Meeting.
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When and where is the Special Meeting?
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Grace will hold the Special Meeting at Ten Oaks Ballroom and Conference Center, 5000 Signal Bell Lane, Clarksville, Maryland 21029, on September 17, 2021, at 9:00 a.m., Eastern time.
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What am I being asked to vote on at the Special Meeting?
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You are being asked to vote on the following proposals:
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to adopt the Merger Agreement pursuant to which Merger Sub will merge with and into Grace, and Grace will become a wholly owned subsidiary of Parent;
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to approve, on an advisory (non-binding) basis, the Compensation Proposal; and
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to approve the Adjournment Proposal.
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Who is entitled to vote at the Special Meeting?
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Only holders of record of Grace common stock as of the close of business on August 9, 2021, the Record Date for the Special Meeting, are entitled to notice of the Special Meeting and to vote at the Special Meeting. Each holder of Grace common stock will be entitled to cast one (1) vote on each matter properly brought before the Special Meeting for each such share owned at the close of business on the Record Date.
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How do I attend the Special Meeting?
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If you are a stockholder of record as of the Record Date, you may attend the Special Meeting in person. If you plan to attend the Special Meeting in person, you must provide proof of ownership of Grace common stock as of the Record Date, such as an account statement indicating ownership on that date and a form of personal identification for admission to the meeting.
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How many shares are needed to constitute a quorum?
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A quorum will be present if holders of a majority of the shares of Grace common stock issued and outstanding and entitled to vote at the Special Meeting are present in person or represented by proxy at the Special Meeting. If a quorum is not present at the Special Meeting, the Special Meeting may be adjourned or postponed from time to time until a quorum is obtained.
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What will I receive if the Merger is completed?
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Upon completion of the Merger, you will be entitled to receive the Merger Consideration of $70.00 in cash, without interest and less any applicable withholding taxes, for each share of Grace common stock that you own, unless you have properly exercised and not withdrawn your appraisal rights under the DGCL. For example, if you own 100 shares of Grace common stock, you will receive $7,000 in cash in exchange for your shares of Grace common stock, without interest and less any applicable withholding taxes.
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What vote is required to adopt the Merger Agreement?
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The affirmative vote of the holders of a majority of the outstanding shares of Grace common stock entitled to vote at the Special Meeting is required to adopt the Merger Agreement. The transaction has not been structured to require the approval of a majority of unaffiliated Grace Stockholders.
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Have any Grace Stockholders already agreed to approve the proposal to adopt the Merger Agreement?
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Yes. 40 North Latitude Master, the Supporting Stockholder, which beneficially owns 9,865,008 shares of Grace common stock representing approximately 14.9% of the outstanding Grace common stock as of August 6, 2021, has entered into the Voting Agreement with the Company. Pursuant to the Voting Agreement, the Supporting Stockholder has agreed, among other things, to vote its shares of Grace common stock in favor of the proposal to adopt the Merger Agreement. For more information, see the section of this proxy statement captioned “Special Factors—The Voting Agreement.”
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What happens if the Merger is not completed?
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If the Merger Agreement is not adopted by Grace Stockholders or if the Merger is not completed for any other reason, Grace Stockholders will not receive any payment for their shares of Grace common stock. Instead, Grace will remain an independent public company, Grace common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act, and we will continue to file periodic reports with the SEC.
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Why are the stockholders being asked to cast an advisory (non-binding) vote to approve the Compensation Proposal?
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The Exchange Act and applicable SEC rules thereunder require Grace to seek an advisory (non-binding) vote with respect to certain payments that could become payable to its named executive officers in connection with the Merger.
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What vote is required to approve the Compensation Proposal?
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The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the Special Meeting and entitled to vote on the subject matter is required for approval of the Compensation Proposal. An abstention with respect to the Compensation Proposal will have the same effect as a vote “AGAINST” this proposal. A failure to return your proxy card or otherwise vote your shares of Grace common stock (including a failure of your broker, bank or other nominee to vote shares held on your behalf) will have no effect on this proposal, assuming a quorum is present.
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What will happen if the stockholders do not approve the Compensation Proposal at the Special Meeting?
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Approval of the Compensation Proposal is not a condition to the completion of the Merger. The vote with respect to the Compensation Proposal is an advisory vote and will not be binding on Grace. Therefore, if the other requisite stockholder approvals are obtained and the Merger is completed, the amounts payable under the Compensation Proposal will continue to be payable to Grace’s named executive officers in accordance with the terms and conditions of the applicable agreements.
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What vote is required to approve the Adjournment Proposal?
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The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the Special Meeting and entitled to vote on the subject matter is required for approval of the Adjournment Proposal. An abstention with respect to the Adjournment Proposal will have the same
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How does the Board of Directors recommend that I vote?
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The Board of Directors, on behalf of Grace, unanimously recommends that Grace Stockholders (including unaffiliated security holders) vote:
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“FOR” the proposal to adopt the Merger Agreement;
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“FOR” the proposal to approve, on an advisory (non-binding) basis, the Compensation Proposal; and
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“FOR” the Adjournment Proposal.
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How do the Grace directors and executive officers intend to vote?
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Grace’s directors and executive officers have informed us that they intend to vote their shares of Grace common stock in favor of the proposal to adopt the Merger Agreement and the other proposals to be considered at the Special Meeting, although they have no obligation to do so. As of the Record Date, our directors and executive officers owned and were entitled to vote, in the aggregate, approximately 284,624 shares of Grace common stock, or approximately 0.4% of the outstanding shares of Grace common stock entitled to vote at the Special Meeting.
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Am I entitled to rights of appraisal under the DGCL?
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If the Merger is completed, stockholders who do not vote in favor of the adoption of the Merger Agreement and who properly demand appraisal of their shares will be entitled to appraisal rights in connection with the Merger under Section 262 of the DGCL. This means that holders of shares of Grace common stock are entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of their shares of Grace common stock, exclusive of any elements of value arising from the accomplishment or expectation of the Merger, together with interest on the amount determined to be fair value, if any, as determined by the court. Grace Stockholders who wish to seek appraisal of their shares are in any case encouraged to seek the advice of legal counsel with respect to the exercise of appraisal rights due to the complexity of the appraisal process. The DGCL requirements for exercising appraisal rights are described in additional detail in this proxy statement, and the relevant section of the DGCL regarding appraisal rights is reproduced in Annex D to this proxy statement. See the section of this proxy statement captioned “Special Factors—Appraisal Rights.”
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What do I need to do now?
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You should carefully read and consider this entire proxy statement and the annexes to this proxy statement, including, but not limited to, the Merger Agreement, along with all of the documents that we refer to in this proxy statement, as they contain important information about, among other things, the Merger and how it affects you. Then sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope, or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card), so that your shares can be voted at the Special Meeting, unless you wish to seek appraisal. If you hold your shares in “street name,” please refer to the voting instruction forms provided by your bank, broker or other nominee to vote your shares.
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Should I send in my stock certificates or other evidence of ownership now?
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No. You should not return your stock certificates or send in other documents evidencing ownership of Grace common stock with the proxy card. If the Merger is completed, if your shares of Grace common stock are evidenced by stock certificates, the paying agent for the Merger will send you a letter of transmittal and written instructions that explain how to exchange shares of Grace common stock for the Merger Consideration (without interest and subject to required withholding taxes).
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What happens if I sell or otherwise transfer my shares of Grace common stock after the Record Date but before the Special Meeting?
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The Record Date for the Special Meeting is earlier than the date of the Special Meeting and the date the Merger is expected to be completed. If you sell or transfer your shares of Grace common stock after the Record Date but before the Special Meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or otherwise transfer your shares and each of you notifies Grace in writing of such special arrangements, you will transfer the right to receive the Merger Consideration, if the Merger is completed, to the person to whom you sell or transfer your shares, but you will retain your right to vote those shares at the Special Meeting. Even if you sell or otherwise transfer your shares of Grace common stock after the Record Date, we encourage you to sign, date and return the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone (using the instructions provided in the enclosed proxy card).
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What is the difference between holding shares as a stockholder of record and as a beneficial owner?
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If your shares are registered directly in your name with our transfer agent, EQ Shareowner Services, you are considered, with respect to those shares, to be the “stockholder of record.” In this case, this proxy statement and your proxy card have been sent directly to you by Grace.
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How may I vote?
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by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope;
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by visiting the Internet at the address on your proxy card;
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by calling toll-free (within the U.S. (including its territories) and Canada) at the phone number on your proxy card; or
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by attending the Special Meeting in person.
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If my broker holds my shares in “street name,” will my broker vote my shares for me?
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No. Your bank, broker or other nominee is permitted to vote your shares on any proposal currently scheduled to be considered at the Special Meeting only if you instruct your bank, broker or other nominee how to vote. You should follow the procedures provided by your bank, broker or other nominee to vote your shares. Without instructions, your shares will not be voted on such proposals, which will have the same effect as if you voted “AGAINST” the proposal to adopt the Merger Agreement but will have no effect on the Compensation Proposal or the Adjournment Proposal.
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May I change my vote after I have mailed my signed and dated proxy card?
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Yes. If you are a stockholder of record, you may change your vote or revoke your proxy at any time before it is voted at the Special Meeting by:
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signing another proxy card with a later date and returning it to us prior to the Special Meeting;
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submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;
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delivering a written notice of revocation to the Corporate Secretary of Grace; or
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by attending the Special Meeting and voting in person.
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What is a proxy?
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A proxy is your legal designation of another person to vote your shares of Grace common stock. The written document describing the matters to be considered and voted on at the Special Meeting is called a “proxy statement.” The document used to designate a proxy to vote your shares of Grace common stock is called a “proxy card.”
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If a stockholder gives a proxy, how are the shares voted?
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Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the Internet or telephone process or the proxy card, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
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What should I do if I receive more than one (1) set of voting materials?
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Please sign, date and return (or grant your proxy electronically over the Internet or by telephone using the instructions provided in the enclosed proxy card) each proxy card and voting instruction card that you receive.
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What is householding and how does it affect me?
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The SEC permits companies to send a single set of proxy materials to any household at which two or more stockholders reside, unless contrary instructions have been received, but only if the company provides advance notice and follows certain procedures. In such cases, each stockholder continues to receive a separate notice of the meeting and proxy card. Certain brokerage firms may have instituted householding for beneficial owners of common stock held through brokerage firms. If your family has multiple accounts holding common stock, you may have already received a householding notification from your broker. Please contact your broker directly if you have any questions or require additional copies of this proxy statement. The broker will arrange for delivery of a separate copy of this proxy statement promptly upon your written or oral request. You may decide at any time to revoke your decision to household, and thereby receive multiple copies.
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Who will solicit and pay the costs of soliciting proxies?
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The Board of Directors is soliciting your proxy, and Grace will bear the costs of this solicitation. MacKenzie Partners, Inc. (“MacKenzie Partners”) has been retained to assist with the solicitation of proxies. MacKenzie Partners will be paid $60,000 and will be reimbursed for its reasonable out-of-pocket expenses for these and other advisory services in connection with the Special Meeting. We will reimburse brokerage firms and others for their reasonable expenses of forwarding solicitation material to beneficial owners of outstanding Grace common stock. Proxies may be solicited by mail, personal interview, e-mail, telephone or via the Internet or, without additional compensation, by certain of Grace’s directors, officers and employees.
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Where can I find the voting results of the Special Meeting?
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Grace intends to publish final voting results in a Current Report on Form 8-K to be filed with the SEC following the Special Meeting. All reports that Grace files with the SEC are publicly available when filed. For more information, please see the section of this proxy statement captioned “Where You Can Find More Information.”
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When do you expect the Merger to be completed?
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We are working toward completing the Merger as quickly as possible and currently expect to complete the Merger in the fourth quarter of 2021. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to the closing conditions specified in the Merger Agreement, many of which are outside of our control.
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Will the Merger be a taxable transaction?
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The Merger will be a taxable transaction for U.S. federal income tax purposes. Grace Stockholders should read the section of this proxy statement captioned “Special Factors—Material U.S. Federal Income Tax Consequences of the Merger” for a more detailed explanation of the U.S. federal income tax consequences of the Merger. Grace Stockholders should consult their tax advisors in light of their particular circumstances and any consequences arising under U.S. federal, state, local and non-U.S. income and other tax consequences relating to the Merger.
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Who can help answer my questions?
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If you have any questions concerning the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of Grace common stock, please contact our proxy solicitor:
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risks related to foreign operations, especially in areas of active conflicts and in emerging regions;
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the costs and availability of raw materials, energy, and transportation;
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the effectiveness of Grace’s research and development and growth investments;
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acquisitions and divestitures of assets and businesses;
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developments affecting Grace’s outstanding indebtedness;
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developments affecting Grace’s pension obligations;
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legacy matters (including product, environmental, and other legacy liabilities) relating to past activities of Grace;
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its legal and environmental proceedings;
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environmental compliance matters (including existing and potential laws and regulations pertaining to climate change, or our products and services);
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the inability to establish or maintain certain business relationships;
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the inability to hire or retain key personnel;
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natural disasters such as storms and floods;
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fires and force majeure events;
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the economics of our customers’ industries, including the petroleum refining, petrochemicals, and plastics industries, and shifting consumer preferences;
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public health and safety concerns, including pandemics and quarantines;
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changes in tax laws and regulations;
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international trade disputes, tariffs, and sanctions;
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the potential effects of cyberattacks;
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the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;
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the failure to obtain Grace stockholder approval of the Merger or the failure to satisfy any of the other conditions to the completion of the Merger;
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risks relating to the financing required to complete the Merger;
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the effect of the announcement of the Merger on the ability of Grace to retain and hire key personnel and maintain relationships with its customers, vendors and others with whom it does business, or on its operating results and businesses generally;
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the effects of the Merger on the integration of the Fine Chemistry Services business acquired by Grace from Albemarle Corporation for approximately $570 million, which was announced by Grace on February 26, 2021 and consummated on June 1, 2021 (the “FCS Acquisition”);
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risks associated with the disruption of management’s attention from ongoing business operations due to the Merger Agreement;
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the ability to meet expectations regarding the timing and completion of the Merger;
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significant transaction costs, fees, expenses and charges;
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the risk of litigation and/or regulatory actions related to the Merger;
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other business effects, including the effects of industry, market, economic, political, regulatory or world health conditions (including new or ongoing effects of the COVID-19 pandemic), and other factors detailed in Grace’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2020, Grace’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021 and Grace’s other filings with the SEC, which are available at www.sec.gov and on Grace’s website at www.grace.com.
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approve the adoption of the Merger Agreement, which is further described in the sections of this proxy statement captioned “Special Factors” and “Proposal 1: Adoption of the Merger Agreement”;
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approve, on an advisory (non-binding) basis, certain compensation that may be paid or become payable to Grace’s named executive officers that is based on or otherwise related to the Merger Agreement and the transactions contemplated by the Merger Agreement, the value of which is disclosed in the table in the section of this proxy statement captioned “Special Factors—Interests of Executive Officers and Directors of Grace in the Merger”; and
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adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the Special Meeting.
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signing another proxy card with a later date and returning it to us prior to the Special Meeting;
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submitting a new proxy electronically over the Internet or by telephone after the date of the earlier submitted proxy;
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delivering a written notice of revocation to the Corporate Secretary of Grace; or
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attending the Special Meeting and voting in person.
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the Grace Stockholders will not be entitled to, nor will they receive, any payment for their respective shares of Grace common stock pursuant to the Merger Agreement;
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(i) Grace will remain an independent public company; (ii) Grace common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act; and (iii) Grace will continue to file periodic reports with the SEC;
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we anticipate that (i) management will operate the business in a manner similar to that in which it is being operated today and (ii) stockholders will be subject to similar types of risks and uncertainties as those to which they are currently subject, including, but not limited to, risks and uncertainties with respect to Grace’s business, prospects and results of operations, as such may be affected by, among other things, the highly competitive industry in which Grace operates and economic conditions;
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the price of Grace common stock may decline significantly, and if that were to occur, it is uncertain when, if ever, the price of Grace common stock would return to the price at which it trades as of the date of this proxy statement;
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the Board of Directors will continue to evaluate and review Grace’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate; irrespective of these efforts, it is possible that no other transaction acceptable to the Board of Directors will be offered or that Grace’s business, prospects and results of operations will be adversely impacted; and
|
•
|
under specified circumstances, Grace will be required to pay Parent the Company Termination Fee of $141 million upon the termination of the Merger Agreement, as described in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Termination Fee.”
|
•
|
the current and historical market prices of Grace common stock, including the market performance of the Grace common stock relative to those of other participants in Grace’s industry and general market indices, and the fact that the Merger Consideration constituted a premium of 59% over Grace’s closing stock price of $44.05 on November 6, 2020 (the last trading day prior to the public announcement of 40 North’s initial proposal to acquire Grace on November 9, 2020);
|
•
|
the belief of the Board of Directors, based upon the course and history of negotiations with 40 North and Standard Industries Holdings (as described in more detail under the section of this proxy statement captioned “—Background of the Merger”), that the Merger Consideration represents the highest price that Parent was willing to pay and that the terms of the Merger Agreement include the most favorable terms to the Company, in the aggregate, to which Parent was willing to agree;
|
•
|
the Board of Directors’ consideration of the strategic alternatives reasonably available to Grace, including the results of the strategic review process undertaken by Grace with the assistance of its financial advisors described in the section of this proxy statement captioned “—Background of the Merger”;
|
•
|
the fact that, during the course of such strategic review process, other than Counterparty C, no strategic parties or financial sponsors made a proposal to Grace with respect to a strategic business combination or sale transaction;
|
•
|
the fact that, despite the fact that it had been widely and publicly known for months that Grace was conducting a strategic review process and was engaged in discussions with 40 North (as described in more detail under the section of this proxy statement captioned “—Background of the Merger”), there had been no indications of interest from other potential counterparties (other than 40 North and Counterparty C) to a strategic business combination or sale transaction;
|
•
|
the fact that, as described in the section of this proxy statement captioned “—Background of the Merger,” Counterparty C would not agree to mutual due diligence without an agreement in principle on a relative valuation that did not compare favorably other strategic alternatives reasonably available to the Company;
|
•
|
the fact that, despite an invitation to Counterparty C from representatives of the Company to re-engage in discussions following 40 North’s best and final April 1 Proposal, Counterparty C did not express any interest in re-engaging in discussions or submitting a proposal that might be competitive with 40 North’s April 1 Proposal (as described in more detail under the section of this proxy statement captioned “—Background of the Merger”);
|
•
|
the high degree of certainty that the closing would be achieved in a timely manner, in view of the terms of the Merger Agreement;
|
•
|
the view of the Board of Directors that the Merger Consideration was more favorable to Grace Stockholders on a risk-adjusted basis than the potential value that might result from other alternatives reasonably available to Grace, based upon the Board of Directors’ extensive knowledge of Grace’s business, assets, financial condition and results of operations, its competitive position and historical and projected financial performance, and the belief that the Merger Consideration represented an attractive and comparatively certain value for Grace Stockholders relative to the risk-adjusted prospects for Grace on a standalone basis;
|
•
|
the fact that the Supporting Stockholder, the Company’s most significant stockholder and a long-term investor in the Company, was prepared to execute and deliver the Voting Agreement;
|
•
|
the financial analysis presentation of Goldman Sachs, and the oral opinion of Goldman Sachs, subsequently confirmed by delivery of a written opinion, dated April 26, 2021, to the Board of Directors to the effect that, as of such date and based upon and subject to the various matters, limitations, qualifications and assumptions set forth therein, the Merger Consideration to be paid to the
|
•
|
the financial analysis presentation of Moelis, and the oral opinion of Moelis, subsequently confirmed by delivery of a written opinion, dated April 26, 2021, to the Board of Directors to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken set forth therein, the Merger Consideration to be received by the holders of shares of Grace common stock (other than the Supporting Stockholder, Parent, Merger Sub, any other subsidiary of Parent, the Company or any other wholly owned subsidiary of the Company) in the Merger was fair from a financial point of view to such holders, as more fully described below under the section of this proxy statement captioned “—Opinion of Moelis & Company LLC,” the full text of which written opinion is attached as Annex C to this proxy statement and is incorporated by reference in this proxy statement in its entirety;
|
•
|
the terms and conditions of the Merger Agreement and the other transaction documents, including the following:
|
•
|
Grace’s ability to terminate the Merger Agreement in order to accept a Superior Company Proposal, subject to certain conditions of the Merger Agreement and paying Parent the Company Termination Fee of $141 million – an amount which the Board of Directors believed, based upon the advice of its financial and legal advisors, was unlikely to deter third parties from making Company Takeover Proposals;
|
•
|
the conditions to closing contained in the Merger Agreement, which are limited in number and scope, and which, in the case of the condition related to the accuracy of Grace’s representations and warranties, is generally subject to a Company Material Adverse Effect (as defined in the section of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Representations and Warranties”) qualification;
|
•
|
the requirement that the Merger Agreement be adopted by the affirmative vote of the holders of a majority of the outstanding shares of Grace common stock entitled to vote at the Special Meeting;
|
•
|
the fact that Grace has sufficient operating flexibility to conduct its business in the ordinary course prior to the consummation of the Merger;
|
•
|
the provision of the Merger Agreement allowing the Board of Directors to effect a Company Adverse Recommendation Change and to terminate the Merger Agreement, in certain circumstances relating to the presence of a Superior Company Proposal (or to effect a change of recommendation in response to an intervening event) subject to the applicable procedures, terms and conditions set forth in the Merger Agreement (including, if applicable, payment of termination fees) (for more information, see the sections of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Company Board Recommendation; Company Adverse Recommendation Change,” “Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement” and “Proposal 1: Adoption of the Merger Agreement—Termination Fee”);
|
•
|
the absence of a financing condition in the Merger Agreement;
|
•
|
the limited overlaps between the businesses of Grace and Parent relative to those that could be present in transactions with certain other industry participants;
|
•
|
the end date of January 26, 2022 (subject to extension to April 26, 2022 under certain circumstances, including for purposes of obtaining required regulatory approvals) allowing for sufficient time to complete the Merger;
|
•
|
that Parent has obtained committed debt financing for the transaction from reputable financial institutions and committed equity financing for the transaction from Standard Industries Holdings,
|
•
|
that Parent has announced that the equity commitment from Standard Industries Holdings will be supported by (i) the available cash of Standard Industries Holdings’ subsidiary, Standard Industries and (ii) up to $2,500 million in proceeds from a secured term loan;
|
•
|
the obligation of Parent and Merger Sub to use reasonable best efforts to consummate the financing and the limited number and nature of the conditions to the debt and equity financing;
|
•
|
the Company’s ability, under circumstances specified in the Merger Agreement, to specifically enforce the obligations of Parent and Merger to consummate the Merger; and
|
•
|
the requirement that, in the event of a failure of the Merger to be consummated under certain circumstances, Parent will pay the Company the Parent Termination Fee of $281 million, and the obligation to pay such amount by Standard Industries Holdings, pursuant to the terms of a limited guaranty, as more fully described under the section of this proxy statement captioned “—Financing of the Merger—Equity Financing” and “—Financing of the Merger—Guaranty.”
|
•
|
the availability of appraisal rights under Delaware law to holders of shares of Grace common stock who do not vote in favor of the adoption of the Merger Agreement and comply with all of the required procedures under Delaware law, which provides those eligible stockholders with an opportunity to have a Delaware court determine the fair value of their shares, which may be more than, less than, or the same as the amount such stockholders would have received under the Merger Agreement; and
|
•
|
the fact that, in the absence of the Merger, Grace would continue to incur significant expenses by remaining a public company, including legal, accounting, transfer agent, printing and filing fees, and that those expenses could adversely affect Grace’s financial performance and the value of its shares.
|
•
|
Ms. Reiland resigned from the Board of Directors on October 13, 2020, and since that time no employee or person affiliated with the Purchaser Filing Persons has been a member of the Board of Directors and none of the Purchaser Filing Persons participated in or had any influence on the deliberative process of, or the conclusions reached by, the Board of Directors;
|
•
|
the directors of Grace are not officers or employees of Grace (other than Mr. La Force), are not representatives of the Purchaser Filing Persons, and are not expected to have an economic interest in Grace or the Surviving Corporation following the completion of the Merger;
|
•
|
the Board of Directors received the advice and assistance of experienced legal and financial advisors;
|
•
|
at the direction of the Board of Directors, with the assistance of Grace’s legal and financial advisors, Grace and the Purchaser Filing Persons engaged in extensive arm’s length negotiations regarding the Merger Consideration that resulted in an increase in the Merger Consideration during the course of negotiations, and the improvement, from the perspective of Grace, of other terms of the Merger and the Merger Agreement, including the operating covenants and the amount of the termination fees, relative to the initial terms proposed by the Purchaser Filing Persons;
|
•
|
40 North will receive the same cash consideration as Grace’s other stockholders and the Merger Agreement does not provide for 40 North to “roll over” its shares or receive differential consideration in the Merger;
|
•
|
the Board of Directors met at least ten times during the course of approximately six months to review potential transactions including the proposal from and negotiations with 40 North, the proposal from Counterparty C and interest from other parties as well as other strategic options (including the standalone business plan) potentially available to Grace;
|
•
|
after the entry into the 2021 Confidentiality Agreement, the parties engaged in a robust and intensive nearly three-month-long, arm’s-length negotiation and diligence process;
|
•
|
the 2021 Confidentiality Agreement required 40 North and its affiliates, among other things, to comply with certain standstill restrictions until March 31, 2021, subject to the earlier termination of such restrictions in certain circumstances and, as such, prior to the entry into the Merger Agreement, 40 North temporarily relinquished its ability to seek additional influence over Grace, including by purchasing additional shares of Grace common stock, launching a proxy contest to seek representation on the Board of Directors, entering into any arrangements with directors of Grace, launching a hostile tender offer or forming any “groups” with third parties seeking to control Grace;
|
•
|
the Purchaser Filing Persons do not have any relationship with management of Grace which would provide the Purchaser Filing Persons with a say over the operations or management of Grace or would influence the Board of Directors’ decision to approve the Merger Agreement;
|
•
|
none of the members of management of Grace have discussed, negotiated or entered into any agreement or understanding with the Purchaser Filing Persons with respect to any rollover of their equity interests in Grace, representation on the Surviving Corporation’s board post-closing or the terms of any post-closing employment;
|
•
|
the equity awards held by management as of immediately prior to the closing of the Merger will generally convert into the same cash Merger Consideration that public stockholders will receive, subject to the specific terms and conditions described in this proxy statement;
|
•
|
given the size of 40 North’s ownership interest in Grace, the Supporting Stockholder’s vote in favor of the transaction, without the support of a large number of other stockholders of Grace, would not be sufficient to approve the Merger as a matter of Delaware law; and
|
•
|
the provision of the Merger Agreement allowing the Board of Directors to effect a Company Adverse Recommendation Change and to terminate the Merger Agreement, in certain circumstances relating to the presence of a Superior Company Proposal (or to effect a change of recommendation in response to an intervening event) subject to the applicable procedures, terms and conditions set forth in the Merger Agreement (including, if applicable, payment of a reasonable termination fee) (for more information, see the sections of this proxy statement captioned “Proposal 1: Adoption of the Merger Agreement—Company Board Recommendation; Company Adverse Recommendation Change,” “Proposal 1: Adoption of the Merger Agreement—Termination of the Merger Agreement” and “Proposal 1: Adoption of the Merger Agreement—Termination Fee”).
|
•
|
the fact that Grace would no longer exist as an independent, publicly traded company, and stockholders would no longer participate in any future earnings or growth and would not benefit from any potential future appreciation in value of Grace;
|
•
|
the risks and costs to Grace if the Merger is not completed in a timely manner or at all, including the potential adverse effect on Grace’s ability to attract and retain key personnel, the diversion of management resources and the potential disruptive effect on Grace’s day-to-day operations and Grace’s relationships with employees, customers, suppliers, partners and other third parties, any or all of which risks and costs, among other things, could adversely affect Grace’s overall competitive position and the trading price of its common stock;
|
•
|
the requirement under certain circumstances that Grace pay Parent a termination fee following termination of the Merger Agreement, including if the Merger Agreement is terminated by Grace in order to enter into a Superior Company Proposal or by Parent because the Board of Directors effects a Company Adverse Recommendation Change;
|
•
|
the fact that, under the terms of the Merger Agreement, if Parent fails to complete the Merger as a result of failure to obtain the Debt Financing (as defined in the section of this proxy statement captioned “Special Factors—Financing of the Merger”), the Company’s remedies will be limited to the termination fee payable by Parent described above, which may be inadequate to compensate Grace for the damage caused;
|
•
|
the restrictions on the conduct of Grace’s business prior to the consummation of the Merger, which may delay or prevent Grace from undertaking business opportunities that may arise before the completion of the Merger and that, absent the Merger Agreement, Grace might have pursued;
|
•
|
the fact that an all cash transaction would be taxable to Grace’s stockholders that are U.S. persons for U.S. federal income tax purposes;
|
•
|
the fact that under the terms of the Merger Agreement, subject to certain exceptions, Grace is unable to solicit other Company Takeover Proposals;
|
•
|
the significant costs involved in connection with entering into the Merger Agreement and completing the Merger (many of which are payable whether or not the Merger is consummated) and the substantial time and effort of Grace management required to complete the Merger, which may disrupt its business operations and have a negative effect on its financial results;
|
•
|
the risk that 40 North’s ownership interest in Grace would be taken into account by third parties considering whether to make alternative proposals;
|
•
|
the risk that the Merger might not be completed and the effect of the resulting public announcement of termination of the Merger Agreement on the trading price of Grace common stock;
|
•
|
the fact that the completion of the Merger requires certain regulatory clearances and consents, which clearances and consents could subject the Merger to unforeseen delays and risks;
|
•
|
the fact that Parent and Merger Sub are newly formed entities with essentially no assets, and the Guaranty, provided by Standard Industries Holdings, guarantees Parent’s obligations under the Merger Agreement only with respect to payment of the Parent Termination Fee and certain reimbursement obligations and is subject to a cap of $290 million;
|
•
|
the fact that Grace’s directors and officers may have interests in the Merger that may be different from, or in addition to, those of Grace’s stockholders generally (see below under the caption “—Interests of Executive Officers and Directors of Grace in the Merger”); and
|
•
|
the possible loss of key management or other personnel of Grace during the pendency of the Merger.
|
•
|
the Merger Consideration represents a premium of approximately 59% over Grace’s closing stock price of $44.05 on November 6, 2020, the last trading day prior to the announcement of 40 North’s initial proposal to acquire Grace on November 9, 2020;
|
•
|
the Merger Consideration consists entirely of cash, which provides a degree of certainty of value and liquidity to Grace’s unaffiliated security holders;
|
•
|
the Merger Consideration consists entirely of cash, therefore Grace’s unaffiliated security holders that are subject to U.S. federal income taxation generally should be able to have cash on hand with which to pay all or a portion of their U.S. federal income taxes in connection with the sale of their common shares of Grace;
|
•
|
Grace’s unaffiliated security holders will not be exposed to risks and uncertainties relating to the prospects of Grace following completion of the Merger;
|
•
|
notwithstanding that the respective opinions of Goldman Sachs and Moelis were provided solely to the Board of Directors in connection with its evaluation of the Merger and are not recommendations as to any action the Board of Directors or any Grace Stockholder may take and that the Purchaser Filing Persons are not entitled to, nor did they, rely on such opinions, the fact that the Board of Directors received:
|
•
|
an opinion of Goldman Sachs, dated as of April 26, 2021, that, as of April 26, 2021 and based upon and subject to the factors and assumptions set forth therein, the Merger Consideration to be paid to the holders (other than Parent and its affiliates) of Grace common stock pursuant to the Merger Agreement was fair from a financial point of view to such holders; and
|
•
|
an opinion of Moelis, dated April 26, 2021, that, as of April 26, 2021 and based upon and subject to the assumptions made, procedures followed, matters considered and limitations on the review undertaken, the Merger Consideration to be received in the Merger by the holders of the Grace common stock (other than the Supporting Stockholder, Parent, Merger Sub, any other subsidiary of Parent, Grace or any wholly owned subsidiary of Grace) was fair, from a financial point of view, to such holders;
|
•
|
the financial and other terms and conditions of the Merger Agreement were the product of extensive arm’s-length negotiations;
|
•
|
the Merger and Merger Agreement were unanimously approved by the Board of Directors, and the Board of Directors unanimously determined that entry into the Merger Agreement was in the best interests of Grace and its stockholders;
|
•
|
Ms. Reiland resigned from the Board of Directors on October 13, 2020, and since that time no employee or person affiliated with the Purchaser Filing Persons has been a member of the Board of Directors and none of the Purchaser Filing Persons participated in or had any influence on the deliberative process of, or the conclusions reached by, the Board of Directors; and
|
•
|
the Merger is conditioned on approval by Grace Stockholders representing a majority of outstanding shares of Grace common stock entitled to vote at the Special Meeting.
|
•
|
the Merger Agreement;
|
•
|
annual reports to Grace Stockholders and Annual Reports on Form 10-K of Grace for the five fiscal years ended December 31, 2020;
|
•
|
certain interim reports to Grace Stockholders and Quarterly Reports on Form 10-Q of Grace;
|
•
|
certain other communications from Grace to the Grace Stockholders;
|
•
|
certain publicly available research analyst reports for Grace; and
|
•
|
certain internal financial analyses and forecasts for Grace prepared by its management, as approved for Goldman Sachs’ use by Grace (as described in the section of this proxy statement captioned “—Management Projections”).
|
•
|
the closing price per share of Grace common stock on April 23, 2021;
|
•
|
the closing price per share of Grace common stock on March 31, 2021, the last trading day before the public announcement of the proposal by 40 North to acquire Grace at $70.00 in cash per share of Grace common stock;
|
•
|
the volume weighted average price per share (“VWAP”) of Grace common stock over the 20-day trading period ended March 31, 2021;
|
•
|
the VWAP of Grace common stock over the 30-day trading period ended March 31, 2021;
|
•
|
the VWAP of Grace common stock after November 6, 2020, the last trading day before the first public announcement of a proposal by 40 North to acquire Grace, through April 23, 2021;
|
•
|
the closing price per share of Grace common stock on November 6, 2020;
|
•
|
the highest closing price per share of Grace common stock during the 52-week period ended April 23, 2021; and
|
•
|
the highest closing price per share of Grace common stock during the 52-week period ended November 6, 2020.
|
•
|
Umicore;
|
•
|
Clariant;
|
•
|
Johnson Matthey;
|
•
|
PQ Group;
|
•
|
PPG;
|
•
|
Ashland;
|
•
|
Avient; and
|
•
|
NewMarket
|
•
|
a premium of 9.0% based on the closing price per share of the Grace common stock on April 23, 2021 of $64.24;
|
•
|
a premium of 16.9% based on the closing price per share of the Grace common stock on March 31, 2021 of $59.86;
|
•
|
a premium of 17.3% based on the VWAP of the Grace common stock over the 20-day trading period ended March 31, 2021 of $59.69;
|
•
|
a premium of 17.0% based on the VWAP of the Grace common stock over the 30-day trading period ended March 31, 2021 of $59.82;
|
•
|
a premium of 19.2% based on the VWAP of the Grace common stock after November 6, 2020 through April 23, 2021 of $58.71;
|
•
|
a premium of 58.9% based on the closing price per share on November 6, 2020 of $44.05;
|
•
|
a premium of 7.4% based on the highest closing price per share of Grace common stock during the 52-week period ended April 23, 2021 of $65.17;
|
•
|
a discount of 4.6% based on the highest closing price per share of Grace common stock during the 52-week period ended November 6, 2020 of $73.36;
|
•
|
a premium of 19.1% based on the hypothetical undisturbed stock price from November 6, 2020 of $58.77; and
|
•
|
a premium of 31.6% based on the hypothetical undisturbed stock price from October 13, 2020 of $53.21.
|
|
Date
|
| |
Acquirer
|
| |
Target
|
|
|
March 2021
|
| |
Cerberus / Koch
|
| |
PQ’s Performance Chemicals Business
|
|
|
February 2021
|
| |
Grace
|
| |
Albemarle’s Fine Chemistry Services Business
|
|
|
February 2021
|
| |
Bain Capital / Cinven
|
| |
Lonza Specialty Ingredients
|
|
|
October 2020
|
| |
Ardian
|
| |
Angus Chemical Company
|
|
|
December 2019
|
| |
Lone Star
|
| |
BASF Construction Chemicals
|
|
|
December 2019
|
| |
Avient
|
| |
Clariant Masterbatches
|
|
|
April 2019
|
| |
Merck
|
| |
Versum
|
|
|
April 2019
|
| |
Parker-Hannifin
|
| |
LORD
|
|
|
April 2019
|
| |
Nippon
|
| |
Dulux
|
|
|
January 2019
|
| |
Sika
|
| |
Parex
|
|
|
August 2018
|
| |
Cabot Microelectronics
|
| |
KMG Chemicals
|
|
|
July 2018
|
| |
Messer / CVC
|
| |
Linde North America
|
|
|
Date
|
| |
Acquirer
|
| |
Target
|
|
|
March 2018
|
| |
Carlyle
|
| |
Specialty Chemicals Business of Akzo Nobel
|
|
|
December 2017
|
| |
Grace
|
| |
Albemarle Polyolefin Catalysts
|
|
|
September 2017
|
| |
Kuraray
|
| |
Calgon Carbon
|
|
|
September 2017
|
| |
H.B. Fuller
|
| |
Royal Adhesives
|
|
|
April 2017
|
| |
Houghton
|
| |
Quaker
|
|
|
March 2017
|
| |
Henkel
|
| |
Darex
|
|
|
October 2016
|
| |
Carlyle
|
| |
Atotech
|
|
|
June 2016
|
| |
BASF
|
| |
Chemetall
|
|
|
May 2016
|
| |
Evonik
|
| |
Air Products Performance Materials
|
|
|
March 2016
|
| |
Sherwin-Williams
|
| |
Valspar Corp
|
|
|
November 2015
|
| |
Air Liquide SA
|
| |
Airgas
|
|
|
July 2015
|
| |
Platform Specialty
|
| |
Alent plc
|
|
|
July 2015
|
| |
Solvay
|
| |
Cytec Industries
|
|
|
June 2015
|
| |
Apollo Global Management, LLC
|
| |
OM Group, Inc.
|
|
|
February 2015
|
| |
Tronox Limited
|
| |
FMC Corp’s Alkali Chemicals Business
|
|
|
| |
Selected Transactions
|
| |
Proposed
Transaction
|
||||||
|
| |
Range
|
| |
Median
|
| |
Mean
|
| ||
EV / LTM EBITDA
|
| |
9.2x – 16.5x
|
| |
13.1x
|
| |
13.0x
|
| |
14.0x
|
•
|
reviewed certain publicly available business and financial information relating to Grace;
|
•
|
reviewed certain internal information relating to the business, earnings, cash flow, assets, liabilities and prospects of Grace furnished to Moelis by Grace, including financial forecasts provided to or discussed with Moelis by the management of Grace (as described in the section of this proxy statement captioned “—Management Projections”);
|
•
|
reviewed information relating to the capitalization (including incentive equity) of Grace furnished to Moelis by Grace;
|
•
|
conducted discussions with members of the senior management and representatives of Grace concerning the information described in the foregoing three items in this paragraph, as well as the business and prospects of Grace generally;
|
•
|
reviewed publicly available financial and stock market data of certain other companies in lines of business that Moelis deemed relevant;
|
•
|
reviewed the financial terms of certain other transactions that Moelis deemed relevant;
|
•
|
reviewed an execution version of each of (i) the Merger Agreement, (ii) the Debt Commitment Letter, (iii) the Equity Commitment Letter, (iv) the Guaranty, (v) the Voting Agreement and (vi) the debt commitment letter among JPMorgan Chase Bank, N.A., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Standard Industries;
|
•
|
participated in certain discussions and negotiations among representatives of Grace and Parent and their advisors; and
|
•
|
conducted such other financial studies and analyses and took into account such other information as Moelis deemed appropriate.
|
•
|
Adjusted EBITDA: generally calculated as the relevant company’s earnings before interest, taxes, depreciation and amortization, as adjusted to exclude one-time charges and benefits and to reflect the full-year impact of material corporate transactions.
|
•
|
Enterprise Value (or EV): which (i) with respect to Grace, was calculated as the market value of Grace’s fully diluted common equity based on its closing stock prices on April 23, 2021 and March 31, 2021 (which Moelis deemed to be the unaffected trading date for purposes of its analyses) and share count information as of April 22, 2021 provided by Grace management and approved by Grace management for use by Moelis in rendering its opinion, plus (a) preferred stock, plus (b) debt, less (c) cash and cash equivalents, less (d) unconsolidated assets and plus (e) book value of non-controlling interests (in each of the foregoing clauses (a) through (e), as projected by Grace management as of
|
|
| |
Market Cap
($ in
millions)
|
| |
EV
($ in
millions)
|
| |
EV / Adj.
EBITDA
2021E
|
| |
EV / Adj.
EBITDA
2022E
|
Specialty Chemical Companies
|
| |
|
| |
|
| |
|
| |
|
Air Products & Chemicals, Inc.
|
| |
$64,687
|
| |
$66,883
|
| |
16.5x
|
| |
14.9x
|
Albemarle Corporation
|
| |
$18,947
|
| |
$20,673
|
| |
24.8x
|
| |
19.3x
|
Ashland Global Holdings Inc.
|
| |
$5,718
|
| |
$7,898
|
| |
12.9x
|
| |
11.8x
|
Celanese Corporation
|
| |
$18,091
|
| |
$20,695
|
| |
10.8x
|
| |
10.5x
|
DuPont de Nemours, Inc.
|
| |
$41,641
|
| |
$55,670
|
| |
14.2x
|
| |
13.3x
|
Element Solutions Inc.
|
| |
$5,145
|
| |
$6,367
|
| |
13.9x
|
| |
13.0x
|
Hexcel Corporation
|
| |
$4,848
|
| |
$5,678
|
| |
28.8x
|
| |
17.3x
|
Mean
|
| |
|
| |
|
| |
17.4x
|
| |
14.3x
|
Median
|
| |
|
| |
|
| |
14.2x
|
| |
13.3x
|
Catalyst Companies (For Reference Only)
|
| |
|
| |
|
| |
|
| |
|
Albemarle Corporation
|
| |
$18,947
|
| |
$20,673
|
| |
24.8x
|
| |
19.3x
|
Umicore SA
|
| |
$14,579
|
| |
$16,363
|
| |
13.7x
|
| |
13.1x
|
Johnson Matthey Plc.
|
| |
$8,796
|
| |
$9,967
|
| |
9.7x
|
| |
8.9x
|
Clariant AG
|
| |
$7,318
|
| |
$8,377
|
| |
11.6x
|
| |
10.6x
|
PQ Group Holdings Inc.
|
| |
$2,343
|
| |
$2,712
|
| |
12.1x
|
| |
10.6x
|
Mean
|
| |
|
| |
|
| |
14.4x
|
| |
12.5x
|
Median
|
| |
|
| |
|
| |
12.1x
|
| |
10.6x
|
|
| |
|
| |
|
| |
|
| |
|
Grace Consensus (Current – as of 04/23/21)
|
| |
$4,299
|
| |
$5,987
|
| |
11.3x
|
| |
10.1x
|
Grace Consensus (Unaffected – as of 03/31/21)
|
| |
$4,002
|
| |
$5,689
|
| |
10.7x
|
| |
9.7x
|
Grace Management Projections (Current – as of 04/23/21)
|
| |
$4,299
|
| |
$6,572
|
| |
11.4x
|
| |
9.4x
|
Grace Management Projections (Unaffected – as of 03/31/21)
|
| |
$4,002
|
| |
$6,274
|
| |
10.9x
|
| |
8.9x
|
Date Announced
|
| |
Acquiror
|
| |
Target
|
| |
EV (in
millions)
|
| |
EV / LTM
Adj.
EBITDA
|
March 2021
|
| |
DuPont De Nemours, Inc.
|
| |
Laird PLC
|
| |
$2,300
|
| |
16.5x
|
March 2021
|
| |
Cerberus Capital Management, L.P. and Koch Minerals & Trading, LLC
|
| |
PQ Group Holdings Inc.’s Performance Chemicals business
|
| |
$1,100
|
| |
9.4x
|
February 2021
|
| |
Bain Capital Private Equity & Cinven Group Ltd.
|
| |
Lonza Specialty Ingredients
|
| |
$4,671
|
| |
13.0x
|
October 2020
|
| |
Ardian SA and Ardian Holding SAS
|
| |
Angus Chemical Company
|
| |
$2,250
|
| |
13.1x
|
April 2019
|
| |
Merck KGaA
|
| |
Versum Materials, Inc.
|
| |
$6,499
|
| |
14.3x
|
August 2018
|
| |
Cabot Microelectronics Corporation
|
| |
KMG Chemicals, Inc.
|
| |
$1,566
|
| |
13.2x
|
March 2018
|
| |
Carlyle Group Inc. & GIC Pte.
|
| |
Akzo Nobel N.V.’s Specialty Chemicals business
|
| |
$12,524
|
| |
9.8x
|
December 2017
|
| |
W. R. Grace & Co.
|
| |
Albemarle Corporation’s Polyolefin Catalysts business
|
| |
$416
|
| |
12.8x
|
September 2017
|
| |
Kuraray Co., Ltd.
|
| |
Calgon Carbon Corporation
|
| |
$1,329
|
| |
15.6x
|
Date Announced
|
| |
Acquiror
|
| |
Target
|
| |
EV (in
millions)
|
| |
EV / LTM
Adj.
EBITDA
|
September 2017
|
| |
H.B. Fuller Company
|
| |
Royal Adhesives & Sealants LLC
|
| |
$1,575
|
| |
11.4x
|
December 2016
|
| |
Evonik Industries AG
|
| |
J.M. Huber Corporation’s Silica business
|
| |
$630
|
| |
10.5x
|
October 2016
|
| |
Carlyle Group Inc.
|
| |
Atotech B.V.
|
| |
$3,200
|
| |
11.9x
|
September 2016
|
| |
Lanxess AG
|
| |
Chemtura Corporation
|
| |
$2,563
|
| |
9.5x
|
June 2016
|
| |
BASF SE
|
| |
Albemarle Corporation’s Chemetall Surface Treatment business
|
| |
$3,200
|
| |
15.3x
|
May 2016
|
| |
Evonik Industries AG
|
| |
Air Products & Chemicals, Inc.’s Performance Materials division
|
| |
$3,800
|
| |
15.8x
|
November 2015
|
| |
Air Liquide S.A.
|
| |
Airgas
|
| |
$13,400
|
| |
13.7x
|
July 2015
|
| |
Solvay S.A.
|
| |
Cytec Industries Incorporated.
|
| |
$6,153
|
| |
14.8x
|
July 2015
|
| |
Platform Specialty Products Corporation
|
| |
Alent plc
|
| |
$2,254
|
| |
13.1x
|
June 2015
|
| |
Apollo Affiliated Funds
|
| |
OM Group, Inc.
|
| |
$1,100
|
| |
11.4x
|
November 2014
|
| |
Golden Gate Capital
|
| |
Angus Chemical Company
|
| |
$1,200
|
| |
11.2x
|
September 2014
|
| |
Eastman Chemical Company
|
| |
Taminco Corporation
|
| |
$2,706
|
| |
10.0x
|
July 2014
|
| |
Albemarle Corporation
|
| |
Rockwood Chemical Co.
|
| |
$6,142
|
| |
11.3x
|
October 2013
|
| |
W. R. Grace & Co.
|
| |
Dow Chemical Company’s Catalysts business
|
| |
$500
|
| |
11.1x
|
October 2013
|
| |
Platform Specialty Products Corporation
|
| |
MacDermid
|
| |
$1,800
|
| |
10.2x
|
October 2013
|
| |
Solvay S.A.
|
| |
Chemlogics Group
|
| |
$1,345
|
| |
10.8x
|
June 2013
|
| |
Cinven Group Ltd.
|
| |
CeramTec
|
| |
$1,988
|
| |
11.3x
|
Mean
|
| |
|
| |
|
| |
|
| |
12.4x
|
Median
|
| |
|
| |
|
| |
|
| |
11.7x
|
•
|
Merger Sub;
|
•
|
Parent;
|
•
|
Midco Holdings, the parent company of Parent;
|
•
|
Parent Holdings, the parent company of Midco Holdings;
|
•
|
Standard Industries;
|
•
|
Standard Industries Holdings, the parent company of both Parent Holdings and Standard Industries;
|
•
|
40 North;
|
•
|
40 North Latitude Feeder;
|
•
|
40 North GP III;
|
•
|
the Supporting Stockholder;
|
•
|
David Winter, the Co-Chief Executive Officer of Standard Industries Holdings and Co-Principal of 40 North; and
|
•
|
David Millstone, the Co-Chief Executive Officer of Standard Industries Holdings and Co-Principal of 40 North.
|
•
|
As a privately held company, Grace will have greater flexibility to operate with a view to the long term without focusing on short-term operating earnings and the associated implications to Grace’s unaffiliated security holders;
|
•
|
By ceasing to be a public company, Grace will benefit from the elimination of the additional burdens on its management, as well as the expense associated with being a public company, including the burdens of preparing periodic reports, maintaining required controls under U.S. federal securities laws and the costs of maintaining investor relationships, staff and resources;
|
•
|
The Merger will increase Standard Industries Holdings’ exposure to the specialty chemicals and specialty materials industries, which Standard Industries Holdings regards as attractive; and
|
•
|
David S. Winter and David J. Millstone have significant experience in the specialty chemicals industry, including through their former roles as Director and Vice Chairmen of International Specialty Products Inc. prior to its 2011 sale to Ashland Inc., and the Purchaser Filing Persons believe that Messrs. Winter and Millstone can utilize that experience to effectively manage the Company’s business for the benefit of stakeholders.
|
•
|
a summary of preliminary analyses of illustrative valuations for Grace using methodologies including (i) a preliminary present value of future share price analysis that used an illustrative range of firm value (“FV”) / NTM EBITDA multiples of 9.3x to 12.0x and an illustrative range of Cost of Equity (“CoE”) of 9.5% and 11.5% and indicated an illustrative range of values per share of Grace common stock of $51.75 to $74.70, (ii) a preliminary discounted cash flow analysis that used an illustrative range of exit multiples of 10.0x to 12.0x and of discount rates of 7.3% to 8.3% and indicated an illustrative range of values per share of Grace common stock of $62.05 to $80.55, (iii) a preliminary implied premiums paid analysis, based on premium to 52-week high price for industrial targets since 2017, that used an illustrative range of premiums of 4.8% to 14.8% and indicated an illustrative range of values per share of Grace common stock of $76.90 and $84.25, (iv) a preliminary implied premiums paid analysis, based on premium to 1-day unaffected price for industrial targets since 2017, that used an illustrative range of premiums of 25.0% to 45.0% and indicated an illustrative range of values per share of Grace common stock of $57.65 and $66.90, (v) a preliminary leveraged buyout analysis that used an illustrative range of exit multiples of 11.0x to 13.0x and target internal rate of return range of 17.5% to 22.5% and indicated an illustrative range of values per share of Grace common stock of $53.70 to $68.65, (vi) a preliminary selected precedent transactions analysis that used an illustrative range of EBITDA multiples of 12.0x to 14.0x and indicated an illustrative range of values per share of Grace common stock of $63.70 to $78.70 and (vii) preliminary selected public companies analysis that used an illustrative range of FV / 2021E EBITDA multiples of 8.9x to 12.0x and indicated an illustrative range of values per share of Grace common stock of $46.15 to $72.15, based on information Citi obtained from public presentations by management of Grace, public filings, Factset, Wall Street Research, Citi Deal Intelligence, press releases and industry periodicals;
|
•
|
a review of the historical price performance of Grace’s common stock for the time period from February 4, 2016 to October 16, 2020 noting, among other things, the then current share price of $46.14, based on information Citi obtained from FactSet;
|
•
|
a comparison of FV / NTM EBITDA and FV / LTM EBITDA for Grace against certain peer companies for the time period from February 2016 to October 2020, noting, among other things, current peer average multiples of 11.6x and 12.3x respectively and Grace multiples of 9.3x and 10.6x respectively, based on information Citi obtained from public filings and FactSet;
|
•
|
a review of Grace’s FV / NTM EBITDA distribution based on information Citi obtained from public filings and FactSet;
|
•
|
a review of selected research analysts’ investment recommendations for Grace common stock, publicly available as of October 16, 2020, which indicated overall low to high target price ranges of $45.00 to $75.00 per share (with a median of $59.00 per share) based on information Citi obtained from FactSet, Bloomberg and Wall Street Research;
|
•
|
a review of analyst consensus estimates for Grace’s EBITDA from January 2018 to October 2020 based on information Citi obtained from Factset;
|
•
|
a review of Grace’s historical and projected segment EBITDA based on certain financial information of Grace obtained by Citi as well as public presentations by management of Grace;
|
•
|
a preliminary analysis of Grace’s long-term EBITDA margins for the time period of 2007 to 2019 based on certain financial information of Grace obtained by Citi;
|
•
|
a summary of transactions involving Grace common stock by certain stockholders and quarterly volume weighted average prices for the time period from September 30, 2018 to September 30, 2020 based on information Citi obtained from Factset;
|
•
|
a summary of investor perceived risks and returns on investment in Grace and certain macro trends that would make Grace attractive to a future strategic acquiror;
|
•
|
a preliminary sensitivity analysis using illustrative share prices of $55.00 to $80.00 based on methodologies including (i) FV / EBITDA, (ii) pension adjusted FV / EBITDA, (iii) transaction value / EBITDA, and (iv) adjusted transaction value including NOLs / EBITDA, based on information Citi obtained from Factset, and public filings; and
|
•
|
a comparison of projections prepared by management of Grace for Revenue and EBITDA against analyst consensus projections, based on information Citi obtained from public filings and Factset.
|
•
|
a review of the historical price performance of Grace common stock for the time period from February 4, 2016 to November 13, 2020 noting, among other things, the then current share price of $54.38, based on information Citi obtained from FactSet;
|
•
|
a comparison of FV / NTM EBITDA and FV / LTM EBITDA for Grace against certain peer companies for the time period from February 2016 to November 2020 noting, among other things, current peer average multiples of 12.1x and 12.8x respectively and Grace multiples of 10.4x and 12.2x respectively, based on information Citi obtained from public filings and FactSet;
|
•
|
a review of Grace’s FV / NTM EBITDA distribution based on information Citi obtained from public filings and FactSet;
|
•
|
a review of selected research analysts’ investment recommendations for Grace common stock, publicly available as of November 13, 2020, which indicated overall low to high target price ranges of $55.00 to $70.00 per share (with a median of $60.00 per share) based on information Citi obtained from FactSet, Bloomberg and Wall Street Research;
|
•
|
a preliminary sensitivity analysis using illustrative share prices of $55.00 to $80.00 based on methodologies including (i) FV / EBITDA, (ii) pension adjusted FV / EBITDA, (iii) transaction value / EBITDA, and (iv) adjusted transaction value including NOLs / EBITDA, based on information Citi obtained from Factset and public filings; and
|
•
|
a comparison of Grace’s FV / calendar year (“CY”) 2020E EBITDA and FV / CY 2021E EBITDA against certain peer companies showing median peer multiples of 11.6x and 10.3x respectively, compared to a range of Wall Street consensus median multiples for Grace of 10.5x to 12.8x and 8.3x to 10.1x, respectively, based on information Citi obtained from FactSet and public filings.
|
•
|
a summary of preliminary illustrative valuation analyses for Grace using methodologies including (i) preliminary selected public companies trading multiples analysis that used illustrative ranges of FV / 2021E EBITDA multiples of 10.5x to 12.5x and of FV / 2022E EBITDA multiples of 9.5x to 11.5x and indicated illustrative ranges of values per share of Grace common stock of $60.30 to $76.55 and $66.50 to $85.55, respectively, (ii) a preliminary selected precedent transactions analysis that used an illustrative range of LTM EBITDA multiples of 11.0x to 13.0x and indicated an illustrative range of values per share of Grace common stock of $56.85 to $71.70, (iii) a preliminary present value of future share price analysis that used an illustrative range of FV / NTM EBITDA multiples of 10.0x to 12.0x and an illustrative range of CoE of 9.5% and 11.5% and indicated an illustrative range of values per share of Grace common stock of $69.75 to $91.50, and (iv) a preliminary discounted cash flow analysis that used an illustrative range of exit multiples of 11.0x to 13.0x and discount rates of 7.5% to 8.5% and indicated an illustrative range of values per share of Grace common stock of $81.10 to $102.00, based on information Citi and J.P. Morgan obtained from presentations to the Purchaser Filing Persons by management of Grace and provided to Citi and J.P. Morgan by the Purchaser Filing Persons, public filings, Factset, and Bloomberg;
|
•
|
a preliminary sensitivity analysis using illustrative share prices of $65.00 to $72.00 based on methodologies including (i) FV / EBITDA (based on projections prepared by management of Grace) and (ii) FV / EBITDA (based on analyst consensus projections), based on information Citi and J.P. Morgan obtained from Factset;
|
•
|
a comparison for illustrative purposes of recent forecasts prepared by management of Grace for revenue and adjusted EBITDA against prior forecasts prepared by 40 North using solely publicly available information as of October 31, 2020, based on information Citi and J.P. Morgan obtained from forecasts prepared by management of Grace, forecasts prepared by 40 North, public filings and Factset;
|
•
|
a review of the historical price performance of Grace’s common stock for the time period from February 4, 2016 to February 22, 2021 noting, among other things, the then current share price of $60.57, based on information Citi and J.P. Morgan obtained from FactSet;
|
•
|
a comparison of FV / NTM EBITDA and FV / LTM EBITDA for Grace against certain peer companies for the time period from February 2016 to February 2021 noting, among other things, current peer average multiples of 13.9x and 15.9x respectively and Grace multiples of 10.7x and 13.0x respectively, based on information Citi and J.P. Morgan obtained from public filings and FactSet;
|
•
|
a comparison of Grace’s FV / 2021E EBITDA and FV / 2022E EBITDA against certain peer companies showing median peer multiples of 11.8x and 10.7x respectively, compared to Wall Street consensus median multiples for Grace of 10.7x and 9.8x, respectively, based on information Citi and J.P. Morgan obtained from public filings and Factset;
|
•
|
a comparison of transaction multiples from certain precedent transactions based on information Citi and J.P. Morgan obtained from public filings, investor presentations and press releases;
|
•
|
a preliminary illustrative future stock price valuation analysis of Grace based on information Citi and J.P. Morgan obtained from public filings, presentations to the Purchaser Filing Persons by management of Grace and provided to Citi and J.P. Morgan by the Purchaser Filing Persons, Wall Street Research and Factset;
|
•
|
a preliminary discounted cash flow illustrative valuation analysis of Grace based on information Citi and J.P. Morgan obtained from public filings, presentations to the Purchaser Filing Persons by management of Grace and provided to Citi and J.P. Morgan by the Purchaser Filing Persons, Wall Street Research, Bloomberg and Factset;
|
•
|
a preliminary illustrative analysis of a hypothetical leveraged buyout transaction with Grace based on information Citi and J.P. Morgan obtained from public filings, presentations to the Purchaser Filing
|
•
|
a preliminary sum-of-the-parts illustrative valuation analysis of Grace using 2021E EBITDA and 2022E EBITDA projections prepared by Grace management and including, for illustrative purposes, prior forecasts prepared by 40 North using solely publicly available information as of October 31, 2020, based on information Citi and J.P. Morgan obtained from public filings, projections prepared by 40 North, projections prepared by Grace management and Factset; and
|
•
|
a summary of certain Grace tax attributes based on information Citi and J.P. Morgan obtained from presentations to the Purchaser Filing Persons by management of Grace and provided to Citi and J.P. Morgan by the Purchaser Filing Persons, forecasts prepared by management of Grace and Factset.
|
•
|
a review of the historical price performance of Grace’s common stock for the time period from October 13, 2020 to March 22, 2021 noting, among other things, the then current share price of $59.40, as well as other trading and price data, based on information J.P. Morgan obtained from FactSet;
|
•
|
a preliminary sensitivity analysis using illustrative NTM EBITDA multiples of 9.0x to 12.0x based on methodologies including (i) FV / Adjusted EBITDA (based on projections prepared by management of Grace), and (ii) FV /Adjusted EBITDA (based on analyst consensus projections), based on information J.P. Morgan obtained from public filings and Factset;
|
•
|
a review of FV / NTM EBITDA for Grace for the time period from February 2016 to March 2021 based on information J.P. Morgan obtained from public filings and FactSet; and
|
•
|
an overview of certain financial and stock market information, including share prices as of March 22, 2021 and the current share price as a percentage of the 52-week high, equity and FVs, and FVs as a multiple of calendar years 2021 and 2022 estimated EBITDA, EBITDA margins for calendar years 2021 and 2022 and revenue growth from 2020A to 2021E and from 2021E to 2022E, of the following 10 selected comparable publicly traded entities in specialty chemical and catalysts industries, based on information J.P. Morgan obtained from public filings and Factset:
|
•
|
| |
Albemarle Corporation
|
| |
•
|
| |
Ashland Global Holdings Inc
|
•
|
| |
CMC Materials, Inc.
|
| |
•
|
| |
Element Solutions Inc
|
•
|
| |
GCP Applied Technologies Inc.
|
| |
•
|
| |
Quaker Chemical Corporation
|
•
|
| |
Ingevity Corporation
|
| |
•
|
| |
PQ Group Holdings Inc.
|
•
|
| |
Umicore S.A.
|
| |
•
|
| |
Johnson Matthey PLC
|
•
|
Selected Entities
|
•
|
FVs to EBITDA multiples for calendar years 2021 and 2022: 9.0x to 25.6x (with a mean of 14.2x and a median of 13.1x) and 8.3x to 19.3x (with a mean of 12.7x and a median of 12.4x), respectively;
|
•
|
EBITDA margins for calendar years 2021 and 2022: 15.1% to 39.9% (with a mean of 25.2% and a median of 25.0%) and 15.6% to 43.5% (with a mean of 26.2% and a median of 24.7%), respectively; and
|
•
|
revenue growth for 2020A to 2021E and 2021E to 2022E: 1.4% to 17.0% (with a mean of 6.9% and a median of 5.7%) and 2.3% to 26.6% (with a mean of 9.1% and a median of 5.4%), respectively.
|
•
|
Grace
|
•
|
FV to EBITDA multiples for calendar years 2021 and 2022: 10.9x and 10.0x, respectively;
|
•
|
EBITDA margins for calendar years 2021 and 2022: 28.6% and 29.6%; and
|
•
|
revenue growth for 2020A to 2021E and 2021E to 2022E: 15.0% and 21.1%.
|
(1)
|
“Adjusted EBITDA” is a non-GAAP financial measure which was calculated in the Management Projections as Adjusted EBIT adjusted for depreciation and amortization, and depreciation and amortization included in equity in earnings of unconsolidated affiliates. For purposes of the market-based financial multiples analysis performed by Goldman Sachs and Moelis, the Management Projections also included pro forma 2021E Adjusted EBITDA, giving effect to the FCS Acquisition as though it was completed prior to January 1, 2021, of $601 million.
|
(2)
|
“Adjusted EBIT” is a non-GAAP financial measure which was calculated in the Management Projections as net income attributable to Grace Stockholders adjusted for interest income and expense; income taxes; costs related to legacy matters; restructuring and
|
•
|
The Management Projections assume that the FCS Acquisition, which was announced on February 26, 2021, prior to the execution of the Merger Agreement, and consummated on June 1, 2021, would be consummated in calendar year 2021.
|
•
|
The Management Projections are based on Grace’s operating plan for 2021, which was developed internally as part of Grace’s regular annual planning process, and a growth plan developed by Grace as part of its annual growth plan process, each of which incorporate market expectations, volume, pricing and cost trends and expectations and recently completed capacity growth investments.
|
•
|
The Management Projections assume that demand for Grace’s products and services would improve throughout 2021 as Grace’s businesses recover from the impact of the COVID-19 pandemic and would approach pre-pandemic levels in late 2021.
|
•
|
The Management Projections assume that Gross Margin and EBITDA margin would return to pre-pandemic levels in the forecast period.
|
•
|
The Management Projections assume that capital investments by Grace during calendar years 2021-2025 would include maintenance, information technology, productivity, environment, health and safety, and growth capital required to maintain and operate Grace’s businesses and support increased demand.
|
•
|
The global COVID-19 pandemic has had a significant negative effect on certain industries to which Grace supplies products and services and on Grace’s financial results. The pandemic is expected to continue to negatively impact Grace’s operations and businesses until successfully controlled. The timing of the market recovery from the pandemic’s economic impact is dependent on factors outside of Grace’s control and may differ from the assumptions included in the Management Projections.
|
•
|
As Grace operates worldwide in a competitive environment, global economic and financial market conditions may adversely affect Grace’s business, financial condition and results of operations in future periods.
|
•
|
Prices for certain raw materials and energy are volatile and may have a significant effect on Grace’s manufacturing and supply chain strategies as Grace seeks to maximize its profitability. If Grace is unable to successfully adjust its strategies in response to volatile raw materials and energy prices, such volatility may adversely affect Grace business, financial condition and results of operations in future periods.
|
•
|
Evolving energy consumption patterns, investor sentiment regarding fossil fuels and related matters, and risks related to climate change may adversely affect Grace’s business, financial condition, and results of operations in future periods.
|
•
|
Grace is subject to business continuity risks that may adversely affect its business, financial condition and results of operations in future periods.
|
Description
|
| |
Amount
|
Financial advisory fees and expenses
|
| |
$57,000,000
|
Legal fees and expenses
|
| |
$20,500,000
|
Accounting and other advisory fees
|
| |
$1,500,000
|
SEC filing fees
|
| |
$510,870
|
Printing, proxy solicitation and mailing costs
|
| |
$190,400
|
Miscellaneous
|
| |
$1,087,772
|
Total
|
| |
$80,789,042
|
Description
|
| |
Amount
|
Financial advisory fees and expenses
|
| |
Up to $50,000,000
|
Legal fees and expenses
|
| |
$10,000,000
|
Financing fees and expenses
|
| |
$126,000,000
|
Total
|
| |
Up to $186,000,000
|
•
|
the executive officers of Grace are:
|
•
|
Hudson La Force, President and Chief Executive Officer;
|
•
|
William C. Dockman, Senior Vice President and Chief Financial Officer;
|
•
|
Elizabeth C. Brown, Senior Vice President, Human Resources and Information Technology and Chief Human Resources Officer;
|
•
|
Keith N. Cole, Senior Vice President, Public Affairs and Environment, Health, Safety, and Chief Sustainability Officer;
|
•
|
Cherée H. Johnson, Senior Vice President, General Counsel and Secretary; and
|
•
|
Mark A. Shelnitz, Former Senior Vice President, General Counsel and Secretary
|
•
|
As disclosed in prior SEC filings, Mr. Shelnitz resigned his position as Senior Vice President, General Counsel and Secretary on December 31, 2020. Mr. Shelnitz is entitled to certain payments in respect of his outstanding and unvested Company Equity Awards in connection with the Merger but is not otherwise entitled to any payments or benefits in connection with the Merger.
|
Executive Officer
|
| |
($)
|
Mr. La Force
|
| |
4,296,697
|
Mr. Dockman
|
| |
1,542,972
|
Ms. Brown
|
| |
1,167,397
|
Mr. Cole
|
| |
1,007,112
|
Ms. Johnson
|
| |
1,008,556
|
Named Executive
Officer
|
| |
Cash ($)(1)
|
| |
Equity
Awards ($)(2)
|
| |
Perquisites/Benefits
($)(3)
|
| |
Tax
Reimbursement
($)(4)
|
| |
Total ($)
|
Hudson La Force
|
| |
6,264,821
|
| |
9,243,203
|
| |
53,269
|
| |
4,296,697
|
| |
19,857,990
|
William C. Dockman
|
| |
2,670,397
|
| |
2,167,007
|
| |
38,681
|
| |
1,542,972
|
| |
6,419,057
|
Elizabeth C. Brown
|
| |
2,409,461
|
| |
1,469,424
|
| |
50,690
|
| |
1,167,397
|
| |
5,096,972
|
Keith N. Cole
|
| |
2,096,165
|
| |
1,208,755
|
| |
49,152
|
| |
1,007,112
|
| |
4,361,184
|
Mark A. Shelnitz
|
| |
0
|
| |
118,160
|
| |
0
|
| |
0
|
| |
118,160
|
(1)
|
Cash Severance for Named Executive Officers. Each of the Grace named executive officers, with the exception of Mr. Shelnitz, is party to a change in control severance agreement with Grace. Each change in control severance agreement provides that, in the event of a termination without “cause” or for “good reason” following a change in control (i.e., “double trigger”), the named executive officer will be entitled to (i) accrued base salary and employee benefits through the date of termination, (ii) an annual bonus for the year prior to termination payable at target levels, to the extent such bonus remains unpaid as of the date of the change in control, (iii) a prorated target bonus for the year of termination, and (iv) severance equal to 300% of the sum of his or her annual base salary plus target annual bonus (for purposes of the foregoing table, this amount has not been reduced for Messrs. Cole or Dockman), payable in a lump sum.
|
(2)
|
Company Equity Award Treatment. As described in more detail in “—Merger Consideration—Treatment of Company Equity Awards,” each Company Option and each Company SAR that is outstanding immediately prior to the Effective Time will vest at closing and be converted into the right to receive an amount in cash equal to the product of the Merger Consideration (less the applicable exercise price) and the number of shares of Grace common stock covered by such Company Option or Company SAR (without interest and less applicable withholding taxes), and each Company RSU Award and each Company Performance Share Award that is outstanding immediately prior to the Effective Time will be assumed and converted into the right to receive an amount in cash (without interest) equal to the product obtained by multiplying the Merger Consideration by the number of shares of Grace common stock covered by such award immediately prior to the Effective Time, which converted cash award will be subject to continued service vesting and other terms as set forth in the Merger Agreement. Amounts shown in respect of Mr. Shelnitz reflect the fact that Mr. Shelnitz holds Company Performance Share Awards that remain eligible to vest based on applicable performance criteria following his resignation from Grace effective December 31, 2020.
|
Named Executive Officer
|
| |
Company
Options
Outstanding
as of
August 6, 2021
(Single
Trigger) ($)
|
| |
Company
SARs
Outstanding
as of
August 6, 2021
(Single
Trigger) ($)
|
| |
Company
RSU Awards
Outstanding
as of
August 6, 2021
(Double Trigger)
($)
|
| |
Company
Performance
Share Awards
Outstanding
as of
August 6, 2021
(Double
Trigger) ($)
|
| |
Total ($)
|
Hudson La Force
|
| |
814,853
|
| |
0
|
| |
3,644,900
|
| |
4,783,450
|
| |
9,243,203
|
William C. Dockman
|
| |
203,717
|
| |
0
|
| |
831,810
|
| |
1,131,480
|
| |
2,167,007
|
Elizabeth C. Brown
|
| |
140,054
|
| |
0
|
| |
576,870
|
| |
752,500
|
| |
1,469,424
|
Keith N. Cole
|
| |
114,585
|
| |
0
|
| |
478,450
|
| |
615,720
|
| |
1,208,755
|
Mark A. Shelnitz
|
| |
0
|
| |
0
|
| |
0
|
| |
118,160
|
| |
118,160
|
(3)
|
Health and Welfare Benefits for Named Executive Officers. Each change in control severance agreement with the Grace named executive officers provides that, in the event of a termination without “cause” or for “good reason” following the Merger prior to August 6, 2021 (i.e., “double trigger”), the named executive officer will be entitled to continued payment by the Company of life and health insurance premiums for 24 months of coverage for the executive and, in the case of such health insurance coverage, his or her dependents, subject to reduction in the event an executive receives comparable benefits during such period following termination of employment, as well as outplacement services.
|
(4)
|
Penalty Tax Make-Whole Payments. Grace expects to provide each of its named executive officers (other than Mr. Shelnitz) with a Penalty Tax Make-Whole Payment. These payments would be made if and when the excise tax under Section 4999 of the Code becomes due and payable, which payment dates could occur upon the closing of the Merger and/or on the date that the officer’s employment terminates under circumstances giving rise to severance payments and benefits under the change in control severance agreements.
|
•
|
$2.5 billion senior secured term loan B facility;
|
•
|
$450 million senior secured revolving credit facility; and
|
•
|
$955 million senior unsecured bridge credit facility.
|
•
|
the absence of a Company Material Adverse Effect since April 26, 2021;
|
•
|
the consummation in all material respects of the Merger in accordance with the Merger Agreement as in effect on April 26, 2021 (without any amendment, modification or waiver of any of the provisions thereof that would be materially adverse to the lenders in their capacity as such without the consent of the lead arrangers, such consent not to be unreasonably withheld, delayed or conditioned);
|
•
|
subject to certain limitations and exceptions, the accuracy in all material respects as of the closing of the Merger of certain specified representations and warranties in the Merger Agreement and certain specified representations and warranties in the loan documents;
|
•
|
the Equity Financing has occurred or, substantially concurrently with the initial funding of the Debt Financing, will occur; and
|
•
|
such lenders having been afforded a Marketing Period (as defined in the section of this proxy statement captioned “—Closing and Effective Time”) of at least 15 consecutive business days (subject to certain blackout dates) following receipt of certain required financial information regarding Grace.
|
•
|
the consummation of the closing of the Merger;
|
•
|
90 days following the valid termination of the Merger Agreement unless prior to such date (i) Grace has delivered a written notice with respect to the Guaranteed Obligations or (ii) Grace has commenced a legal proceeding against Standard Industries Holdings, Parent or Merger Sub alleging that any Guaranteed Obligations are due and owing, in which case the Guaranty will survive only with respect to such obligations and will terminate upon the final, non-appealable resolution of all such legal proceedings by a court of competent jurisdiction and the satisfaction by Standard Industries Holdings of any obligations finally determined to be owed by Standard Industries Holdings consistent with the terms of the Guaranty; and
|
•
|
the actual receipt in full by Grace of all Guaranteed Obligations (regardless of whether paid by Standard Industries Holdings or by Parent or an affiliate thereof), except to the extent that any payment to Grace in respect of any Guaranteed Obligations is rescinded or otherwise returned.
|
•
|
the stockholder must not vote in favor of the proposal to adopt the Merger Agreement;
|
•
|
the stockholder must deliver to Grace a written demand for appraisal before the vote on the Merger Agreement at the Special Meeting;
|
•
|
the stockholder must continuously hold the shares from the date of making the demand through the Effective Time (a stockholder will lose appraisal rights if the stockholder transfers the shares before the Effective Time); and
|
•
|
the stockholder (or any person who is the beneficial owner of shares of Grace common stock held either in a voting trust or by a nominee on behalf of such person) or the Surviving Corporation must file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares within 120 days after the Effective Time. The Surviving Corporation is under no obligation to file any petition and has no intention of doing so.
|
•
|
banks and other financial institutions;
|
•
|
mutual funds;
|
•
|
insurance companies;
|
•
|
brokers or dealers in securities, currencies or commodities;
|
•
|
dealers or traders in securities subject to a mark-to-market method of accounting with respect to shares of Grace common stock (by vote or value);
|
•
|
regulated investment companies and real estate investment trusts;
|
•
|
retirement plans, individual retirement and other deferred accounts;
|
•
|
tax-exempt organizations, governmental agencies, instrumentalities or other governmental organizations and pension funds;
|
•
|
holders that are holding shares of Grace common stock as part of a “straddle,” hedge, constructive sale, or other integrated transaction or conversion transaction or similar transactions;
|
•
|
U.S. Holders whose functional currency is not the U.S. dollar;
|
•
|
partnerships, other entities classified as partnerships for U.S. federal income tax purposes, “S corporations,” or any other pass-through entities for U.S. federal income tax purposes (or investors in such entities);
|
•
|
expatriated entities subject to Section 7874 of the Code;
|
•
|
holders that are required to accelerate the recognition of any item of gross income as a result of such income being recognized on an “applicable financial statement”;
|
•
|
persons subject to the alternative minimum tax;
|
•
|
U.S. expatriates and former citizens or long-term residents of the United States;
|
•
|
grantor trusts;
|
•
|
controlled foreign corporations, passive foreign investment companies, and corporations that accumulate earnings to avoid U.S. federal income tax;
|
•
|
holders that received their shares of Grace common stock in a compensatory transaction, through a tax qualified retirement plan or pursuant to the exercise of options or warrants;
|
•
|
holders that own an equity interest in Parent following the Merger;
|
•
|
holders that hold their Grace common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States;
|
•
|
holders that own or have owned (directly, indirectly or constructively) five (5) percent or more of Grace common stock (by vote or value);
|
•
|
holders that are not U.S. Holders; and
|
•
|
holders that do not vote in favor of the Merger and that properly demand appraisal of their shares under Section 262 of the DGCL.
|
•
|
an individual who is a citizen or resident of the United States;
|
•
|
a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia;
|
•
|
an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
|
•
|
a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of such trust and one (1) or more “United States persons” (within the meaning of the Code) have the authority to control all substantial decisions of the trust or (ii) the trust validly elected to be treated as a United States person for U.S. federal income tax purposes.
|
•
|
any change generally affecting the industries in which Grace and its subsidiaries operate in the United States or elsewhere (including changes in commodity prices or general market prices generally affecting such industries and changes in the global demand environment generally affecting such industries);
|
•
|
any change generally affecting any economic, legislative or political condition (including trade wars and sanctions) or any change generally affecting any securities, credit, financial, commodities or capital markets condition, in each case in the United States or elsewhere;
|
•
|
any failure in and of itself by Grace or any of its subsidiaries to meet any internal or public projection, budget, forecast, estimate or prediction in respect of revenues, earnings or other financial or operating metrics or measures for any period (provided that the changes and effects giving rise to or contributing to such failure may (to the extent not otherwise excluded by the definition of Company Material Adverse Effect) constitute or be taken into account in determining whether a Company Material Adverse Effect has occurred);
|
•
|
any change resulting from the announcement, execution or delivery of the Merger Agreement, including (i) the failure of Grace or its subsidiaries to take any action if Parent’s prior consent is required hereunder and Parent unreasonably withholds consent to taking of such action after receipt of the written request therefor from Grace; (ii) any stockholder litigation related to the Merger Agreement or the transactions contemplated by the Merger Agreement (but not any finally adjudicated breach of fiduciary duty or any violation of law itself); (iii) any action taken by Parent or any affiliate thereof to obtain any required statutory approval from any governmental entity or satisfy any condition to the consummation of the Merger and the result of such actions; (iv) any change to the extent that arises out of or relates to the identity of Parent or any of its affiliates as the acquirer of Grace; or (v) the impact of the announcement, execution or delivery on relationships with employees and labor unions, customers, suppliers, distributors, governmental entities and other persons (provided that this bullet will not apply with respect to Grace’s representations or warranties regarding required consents, approvals and regulatory filings in connection with the Merger Agreement and performance thereof and the absence of certain violations (or any condition to any party’s obligation to consummate the Merger relating to such representation and warranty));
|
•
|
any change in the market price or trading volume of shares of Grace common stock on the NYSE (provided that the changes and effects giving rise to or contributing to any such change may (if not otherwise excluded by the definition of Company Material Adverse Effect) constitute or be taken into account in determining whether a Company Material Adverse Effect has occurred);
|
•
|
any change in applicable law, regulation or GAAP (or authoritative interpretation thereof);
|
•
|
any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester, safety or similar laws, promulgated by any governmental entity, including the Centers for Disease Control and Prevention and the World Health Organization, in each case, in connection with or in response to COVID-19 (“COVID-19 Measures”);
|
•
|
any geopolitical conditions, the outbreak or escalation of hostilities, any act of war, sabotage or purported terrorism, or any escalation or worsening of any such act of war, sabotage or purported terrorism;
|
•
|
any change or effect arising from any hurricane, strong winds, ice event, fire, tornado, tsunami, flood, earthquake, pandemics (including SARS-CoV-2 or COVID-19, any evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks (“COVID-19”)), epidemics or other outbreaks of diseases, or other natural disaster or extreme weather-related event, circumstance or development (or escalation or worsening of any such events or occurrences, including, as applicable, second or subsequent wave(s));
|
•
|
any change or effect arising from any requirements imposed by any governmental entity as a condition to obtaining the required statutory approvals;
|
•
|
due organization, valid existence, good standing and power to do business;
|
•
|
subsidiaries;
|
•
|
capitalization;
|
•
|
corporate power and authority relating to execution, delivery and performance of the Merger Agreement;
|
•
|
required consents, approvals and regulatory filings in connection with the Merger Agreement and performance thereof and the absence of certain violations;
|
•
|
the reports, schedules, forms, statements and other documents required to be furnished or filed with the SEC, compliance of the consolidated financial statements of Grace included in such documents, the absence of undisclosed liabilities, the establishment and maintenance of certain disclosure controls and procedures and internal control over financial reporting, the absence of material complaints, allegations, assertions or claims regarding Grace’s accounting practices;
|
•
|
the absence of certain changes or events;
|
•
|
tax matters;
|
•
|
employee benefit plans and other agreements, plans and policies with or concerning employees;
|
•
|
labor matters;
|
•
|
litigation;
|
•
|
compliance with applicable laws and validity of permits;
|
•
|
compliance with applicable anti-bribery, anti-corruption and anti-money laundering laws;
|
•
|
compliance with applicable economic sanctions and export control laws;
|
•
|
the inapplicability of takeover statutes to the Merger and the absence of anti-takeover agreements and plans;
|
•
|
environmental matters;
|
•
|
material contracts;
|
•
|
real property matters;
|
•
|
intellectual property, information technology assets and data privacy;
|
•
|
suppliers and customers;
|
•
|
insurance matters;
|
•
|
product warranties;
|
•
|
product liability;
|
•
|
affiliate party transactions;
|
•
|
brokers’ fees and expenses; and
|
•
|
the opinions of Grace’s financial advisors.
|
•
|
due organization, valid existence, good standing and power to do business;
|
•
|
power and authority relating to execution, delivery and performance of the Merger Agreement;
|
•
|
consents and approvals relating to the execution, delivery and performance of the Merger Agreement and the absence of certain violations;
|
•
|
litigation;
|
•
|
compliance with applicable laws;
|
•
|
the executed Equity Commitment Letter and Debt Commitment Letter providing for a commitment to provide Equity Financing and Debt Financing, respectively, to Parent, and the sufficiency of the proceeds to be disbursed under the Commitment Letters, together with other sources of financing available to Parent, to pay the aggregate Merger Consideration and the other amounts payable under the Merger Agreement, and the enforceability of the Commitment Letters;
|
•
|
the limited guaranty delivered by the Guarantor guaranteeing certain obligations of Parent in connection with the Merger Agreement;
|
•
|
brokers’ fees and expenses;
|
•
|
capitalization of Merger Sub;
|
•
|
the absence of any required consent of shareholders of Parent and the sufficiency of Parent’s vote, as sole stockholder of Merger Sub, on behalf of Merger Sub;
|
•
|
the absence of beneficial ownership of Grace common stock by Parent and its subsidiaries and affiliates, except as publicly disclosed prior to the date of the Merger Agreement;
|
•
|
the solvency of Parent and its subsidiaries as of the Effective Time and immediately after giving effect to the transactions contemplated by the Merger Agreement; and
|
•
|
the absence of certain arrangements between the Parent or Merger Sub, on the one hand, and any (i) director or officer of Grace relating to Grace or any of its businesses or subsidiaries or (ii) any other stockholder of Grace, on the other hand.
|
•
|
use reasonable best efforts to conduct its business in the ordinary course of business in all material respects; and
|
•
|
use commercially reasonable efforts to preserve intact its current business organization and goodwill and to preserve its relationship with employees, customers, suppliers, licensors, licensees, distributors, lessors and others having material business dealings with Grace or its subsidiaries.
|
•
|
declare, set aside or pay any dividend or make any other distribution in respect of any of its capital stock, equity interests or other voting securities;
|
•
|
amend any of Grace’s organizational documents;
|
•
|
other than in the case of wholly owned subsidiaries, split, combine, consolidate, subdivide, or reclassify the capital stock of Grace, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, other equity interests or voting securities, except for any issuances of compensatory equity awards relating to Grace common stock in the ordinary course consistent with past practice (except that Grace may grant time-vesting restricted stock units in lieu of stock options and performance-based units) or issuances of Grace common stock pursuant to the due exercise, vesting and/or settlement of Company Equity Awards outstanding as of the date of the Merger Agreement in accordance with their terms;
|
•
|
repurchase, redeem or acquire any capital stock or voting securities of Grace, other than (i) in connection with the exercise, vesting or settlement, as applicable, of Company Equity Awards outstanding as of the date of the Merger Agreement or granted in accordance with the Merger Agreement and (ii) transactions between Grace and its wholly owned subsidiaries or between Grace’s wholly owned subsidiaries;
|
•
|
grant to any key personnel any material increase in compensation or benefits, or grant to all other Grace personnel material increases, in the aggregate, in cash compensation and benefits or any increases not in the ordinary course consistent with past practice;
|
•
|
grant to any Grace personnel any new material rights to, or materially increase any existing rights to, change-in-control, severance, retention or termination pay;
|
•
|
enter into or materially amend any change-in-control, severance, retention or termination agreement with any key personnel or, for other Grace personnel, other than in the ordinary course consistent with past practice;
|
•
|
establish, adopt, enter into, amend in any material respect or terminate any Grace benefit plan;
|
•
|
take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Grace benefit plan;
|
•
|
hire any key personnel without Parent’s consent, not to be unreasonably withheld or delayed;
|
•
|
terminate the employment of any key personnel other than for cause;
|
•
|
make any material change in financial accounting methods, principles, policies or practices, except insofar as may be required by applicable law or GAAP or by any governmental entity (including the SEC or the Public Company Accounting Oversight Board);
|
•
|
make any acquisitions or dispositions of a material asset or business (including by merger, consolidation or acquisition of stock or assets), except for (i) an acquisition for consideration that is individually not in excess of $10,000,000 and in the aggregate not in excess of $20,000,000, (ii) any disposition (other than intellectual property) for consideration that is individually not in excess of $10,000,000 and in the aggregate not in excess of $20,000,000, (iii) transactions between Grace and any of its direct or indirect wholly owned subsidiaries or between direct or indirect wholly owned Grace subsidiaries in the ordinary course of business, (iv) any disposition of obsolete or worn-out equipment (other than intellectual property) in the ordinary course of business, (v) purchases of raw materials, inventory or equipment in the ordinary course of business, (vi) sales to customers of products or services of Grace (other than intellectual property) in the ordinary course of business and (vii) any capital expenditures permitted by the applicable restriction on capital expenditures described below;
|
•
|
sell, assign, lease, license, encumber, divest, cancel, abandon, transfer, or otherwise dispose of any material intellectual property of Grace, other than the grant of non-exclusive licenses in the ordinary course of business;
|
•
|
redeem, repurchase or prepay (other than prepayment of revolving loans), or incur, assume, endorse, guarantee or otherwise become liable for or modify the terms of any indebtedness, excluding (i) indebtedness, guarantees and other credit support incurred in the ordinary course of business consistent with past practice or between Grace and its wholly owned subsidiaries or between its wholly owned subsidiaries, (ii) as reasonably necessary to finance any capital expenditures permitted under this section, (iii) as reasonably necessary to finance any acquisitions permitted under this section, (iv) indebtedness in replacement of, and on terms no less favorable in the aggregate to Grace than, existing indebtedness (subject to certain exceptions pursuant to this clause (iv) for indebtedness in excess of $100 million), (v) guarantees by Grace of existing indebtedness of any of its wholly owned subsidiaries and (vi) borrowings under existing revolving credit facilities (or replacements thereof on terms no less favorable in the aggregate to Grace) or existing commercial paper programs in the ordinary course of business;
|
•
|
other than in the ordinary course of business (including renewals consistent with the terms thereof) (i) modify or amend in any material respect, terminate, or waive any material right under, any material
|
•
|
other than in the ordinary course of business, (i) make any tax election that is material to Grace and its subsidiaries taken as a whole, on any material tax return filed after the date of the Merger Agreement, which election is inconsistent with past practice, (ii) change any method of accounting for tax purposes in a manner that is material to Grace and its subsidiaries taken as a whole, (iii) amend any U.S. federal or other material tax return in any material respect in a manner that is material to Grace and its Subsidiaries taken as a whole or (iv) settle or resolve any tax controversy that is material to Grace and its subsidiaries for an amount materially in excess of the amount reserved therefor;
|
•
|
institute, waive, release, assign, settle or compromise any material claim other than in the ordinary course of business or waivers or releases that (i) require Grace and its subsidiaries to pay amounts (in excess of insurance proceeds) that do not exceed (a) the amount with respect thereto reflected on Grace’s publicly filed financial statements (including the notes thereto) plus (b) $5,000,000 individually or $10,000,000 in the aggregate and (ii) with respect to any nonmonetary terms and conditions thereof, would not have or would not reasonably be expected to have a material restrictive impact on the operations of Grace or any of its subsidiaries;
|
•
|
dissolve or liquidate any existing direct or indirect Grace subsidiary, other than in the ordinary course of business, or establish any new direct or indirect Grace subsidiary;
|
•
|
take any action (other than an accounting action required by GAAP, the preparation or filing of investigatory or similar reports or studies in the ordinary course consistent with past practice, or the payment of filing fees, similar ministerial costs and customary advisory fees and expenses) that would reasonably be expected to cause Grace or any of its subsidiaries to incur or assume any expenditure or liability arising out of any environmental law, environmental permit or environmental claim associated with (i) the Libby, Montana mine site and surrounding area or (ii) any other current or former property of Grace or its subsidiaries in an amount which, in the case of clause (ii) of this bullet point, is materially in excess of Grace’s publicly disclosed reserves as of the date of the Merger Agreement;
|
•
|
terminate or fail to renew any material insurance policy of Grace, reduce the coverage provided by any material insurance policy or materially expand any director and officer insurance and indemnification policies;
|
•
|
authorize, make or enter into any commitment for any capital expenditures, other than capital expenditures that, in the aggregate, do not exceed by more than 10% the aggregate capital expenditure budgets identified in the confidential disclosure schedules to the Merger Agreement; or
|
•
|
announce any intention, resolve, or commit to enter into any contract to do any of the foregoing.
|
•
|
solicit, initiate or knowingly encourage, induce or facilitate any Company Takeover Proposal (as defined below) or any inquiry or proposal that would reasonably be expected to lead to a Company Takeover Proposal, in each case, except for the Merger Agreement and the transactions contemplated thereby; or
|
•
|
continue, enter into, maintain, participate or engage in any discussions or negotiations with any person (except for Grace’s affiliates and its and their respective representatives or Parent and Parent’s affiliates and its and their respective representatives) regarding, furnish to any such person any nonpublic information with respect to, any Company Takeover Proposal or any inquiry or proposal that would reasonably be expected to lead to a Company Takeover Proposal.
|
•
|
cease and cause to be terminated all existing discussions, solicitations or negotiations with or of any person (except for Parent and Parent’s affiliates and its and their respective representatives) conducted prior to the date of the Merger Agreement with respect to any Company Takeover Proposal, or any inquiry or proposal that would reasonably be expected to lead to a Company Takeover Proposal; and
|
•
|
request the prompt return or destruction of all confidential information previously furnished and terminate all physical and electronic data room access previously granted to any such person or its representatives.
|
•
|
furnish information with respect to Grace and its subsidiaries to the person making such Company Takeover Proposal (and its representatives) (provided that all such information has previously been provided to Parent or is provided to Parent substantially concurrently with the provision of such information to such person) pursuant to a confidentiality agreement containing confidentiality restrictions substantially not less favorable to Grace than the 2021 Confidentiality Agreement; and
|
•
|
participate in discussions regarding the terms of such Company Takeover Proposal, including terms of a Company Acquisition Agreement (as defined below) with respect thereto, and the negotiation of such terms with the person making such Company Takeover Proposal (and such person’s representatives);
|
•
|
any Company Takeover Proposal, any request outside the ordinary course of business for material non-public information relating to Grace or any of its subsidiaries or for access to the business, properties, assets, books or records of Grace or any of its subsidiaries by any third party (other than by any governmental entity or in connection with obtaining the required statutory approvals) which request could reasonably be expected to lead to a Company Takeover Proposal, the material terms and conditions of any such Company Takeover Proposal or request (including any changes thereto) and the identity of the person making any such Company Takeover Proposal or request; and
|
•
|
any Company Intervening Event (as defined in the section of this proxy statement captioned “—Company Board Recommendation; Company Adverse Recommendation Change”) or any facts and circumstances that would reasonably be expected to lead to a Company Intervening Event.
|
•
|
the Board of Directors has provided five (5) business days’ prior written notice to Parent that it is prepared to terminate the Merger Agreement pursuant to the applicable termination right (as described in greater detail in the section of this proxy statement captioned “—Termination of the Merger Agreement”), which written notice must include the material terms and conditions of such Company Takeover Proposal;
|
•
|
if requested by Parent, during the five (5) business day period after delivery of such written notice, Grace and its representatives negotiate in good faith with Parent and its representatives regarding any revisions to the Merger Agreement committed to in writing by Parent; and
|
•
|
at the end of such five (5) business day period and taking into account any changes to the terms of the Merger Agreement committed to in writing by Parent (provided that if there has been any subsequent amendment to any material term of such Superior Company Proposal, the Board of Directors must provide a new written notice and an additional three (3) business day period from the date of such written notice will apply), the Board of Directors determines in good faith (after consultation with its outside legal counsel and financial advisors) that the failure to terminate the Merger Agreement as a result of such Superior Company Proposal would be inconsistent with the Board of Director’s fiduciary duties under applicable law.
|
•
|
withdraw, change, qualify, withhold or modify in any manner adverse to Parent or to the prompt consummation of the Merger, or propose publicly to withdraw, change, qualify, withhold or modify in any manner adverse to Parent or to the prompt consummation of the Merger, the Company Board Recommendation;
|
•
|
adopt, approve or recommend, or propose publicly to adopt, approve or recommend, any Company Takeover Proposal;
|
•
|
fail to include the Company Board Recommendation in this proxy statement;
|
•
|
take any formal action or make any recommendation or public statement in connection with a tender offer or exchange offer that constitutes a Company Takeover Proposal (except for either a recommendation against such offer or a “stop, look and listen” communication of the type contemplated by Rule 14d-9(f) under the Exchange Act); or
|
•
|
resolve or agree to take any of the foregoing actions.
|
•
|
the Board of Directors has provided five (5) business days’ prior written notice to Parent that it is prepared to effect a Company Adverse Recommendation Change in response to the occurrence of a Company Intervening Event or the receipt of a Superior Company Proposal, which written notice must, in the case of a Company Adverse Recommendation Change as a result of a Company Intervening Event, describe such Company Intervening Event in reasonable detail and, in the case of a Company Adverse Recommendation Change in response to the receipt of a Superior Company Proposal, include the material terms and conditions of such Superior Company Proposal;
|
•
|
if requested by Parent, during the five (5) business day period after delivery of such written notice, Grace and its representatives negotiate in good faith with Parent and its representatives regarding revisions to the Merger Agreement committed to in writing; and
|
•
|
at the end of such five (5) business day period and taking into account any changes to the terms of the Merger Agreement committed to in writing by Parent (provided that if there has been any subsequent amendment to any material term of such Superior Company Proposal, the Board of Directors will provide a new written notice and an additional three (3) business day period from the date of such notice will apply), the Board of Directors determines in good faith (after consultation with its outside legal counsel and financial advisors) that the failure to make such a Company Adverse Recommendation Change would be inconsistent with its fiduciary duties to stockholders under applicable law.
|
•
|
make or cause to be made, in consultation and cooperation with the other, as promptly as reasonably practicable after the date of the Merger Agreement and in any event within ten (10) business days after the date of the Merger Agreement, an appropriate filing of a Notification and Report Form pursuant to the HSR Act relating to the Merger;
|
•
|
make or cause to be made, as promptly as reasonably practicable after the date of the Merger Agreement, all necessary filings with other governmental entities relating to the Merger, including any such filings necessary to obtain any required statutory approvals;
|
•
|
furnish to the other all assistance, cooperation and information reasonably required for any such filing;
|
•
|
unless prohibited by applicable law or a governmental entity, give the other reasonable prior notice of any such filing and, to the extent reasonably practicable, of any substantive communication with any governmental entity relating to the Merger and, to the extent reasonably practicable, permit the other to review and discuss in advance, and consider in good faith the views of, and secure the participation of, the other in connection with any such filing or substantive communication;
|
•
|
respond as promptly as reasonably practicable under the circumstances to any requests received from any governmental entity enforcing applicable antitrust laws for additional information or documentary material in connection with antitrust, competition or similar matters (including any “Second Request” under the HSR Act) and not agree to extend any waiting period under the HSR Act or enter into any agreement with any such governmental entity or other authorities that, in either case, would reasonably be expected to extend the Closing Date beyond the End Date; and
|
•
|
unless prohibited by applicable law or a governmental entity, (i) not participate in or attend any meeting (whether in person, via telephone, or otherwise) with any governmental entity in respect of the Merger without the other party, (ii) keep the other party apprised with respect to any meeting or conversation with any governmental entity in respect of the Merger, (iii) cooperate in the filing of any memoranda, white papers, filings, material correspondence or other material written communications explaining or defending this Merger Agreement or the Merger, articulating any regulatory or competitive argument or responding to requests or objections made by any governmental entity, and (iv) furnish the other party with copies of all material correspondence, filings and substantive communications (and memoranda setting forth the substance thereof) between it and its affiliates and their respective representatives on the one hand, and any governmental entity or members of any governmental entity’s staff, on the other hand, with respect to the Merger Agreement or the Merger; provided that the parties or their respective counsel will be permitted to designate information “for outside counsel only” and to redact any correspondence, filing or communication (a) to the extent such correspondence, filing or communication contains commercially sensitive information, trade secrets, confidential information of third parties, personal identifying information, or references concerning the valuation of Grace, any Grace subsidiaries or the Merger, or (b) to prevent the loss of any attorney-client or other legal privilege.
|
•
|
in the case of any civil, criminal or administrative action, suit, litigation, arbitration, proceeding or investigation that is instituted (or threatened to be instituted) challenging the consummation of the Merger or any other transaction contemplated by the Merger Agreement as violative of any antitrust law, take any and all steps not prohibited by applicable law to avoid the entry of, or to have vacated, lifted, reversed or overturned any order that would restrain, prevent or delay the closing on or before the End Date, including defending through litigation on the merits, including appeals, any claim asserted in any court or other proceeding by any person, including any governmental entity, with respect to the Merger or the Merger Agreement that seeks to or would reasonably be expected to prevent or prohibit or impede, interfere with or delay the consummation of the closing;
|
•
|
propose, negotiate, commit to and effect, by consent decree, hold separate order or otherwise, the sale, divestiture, licensing or disposition of any assets, properties or businesses of Parent or its affiliates or Grace or its subsidiaries, including by entering into customary ancillary agreements relating to any such sale, divestiture, licensing or disposition in order to avoid the entry of, or to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that would prevent the consummation of the transactions contemplated by the Merger Agreement as soon as practicable (and in each case, sufficiently before the End Date in order to allow closing by the End Date);
|
•
|
agree to any limitation on the conduct of Parent or its affiliates (including, after the closing, the Surviving Corporation and Grace’s subsidiaries) proposed by a governmental entity enforcing applicable laws; and
|
•
|
agree to take any other action as may be required by a governmental entity in order to effect each of the following: (i) obtaining all required statutory approvals as soon as reasonably possible and in any event before the End Date; (ii) avoiding the entry of, or having vacated, lifted, dissolved, reversed or overturned any judgment, whether temporary, preliminary or permanent, that is in effect that prohibits, prevents or restricts consummation of, or impedes, interferes with or delays, the closing; and (iii) effecting the expiration or termination of any waiting period, which would otherwise have the effect of preventing, prohibiting or restricting consummation of the closing or impeding, interfering with or delaying the closing.
|
•
|
make management (with appropriate seniority and expertise to participate) of the Company available to participate in a reasonable number of meetings, presentations, road shows, due diligence sessions and sessions with rating agencies, including a reasonable and limited number of customary one-on-one meetings and calls with prospective lenders and purchasers of the Financing, in each case, at reasonable times and with reasonable advance notice;
|
•
|
facilitate the pledging of collateral and granting of security interests in connection with the Debt Financing, effective no earlier than the Closing Date;
|
•
|
execute and deliver any credit agreement, indenture, purchase agreement, guarantees, pledge and security documents, and other definitive financing documents, closing certificates and other certificates and documents as may be reasonably requested by Parent, in each case contemplated in connection with the Debt Financing (provided that (i) none of such documents or agreements contemplated by this bullet point will be executed and/or delivered except in connection with the closing of the Merger, (ii) the effectiveness thereof will be conditioned upon, or become operative after, the occurrence of the closing of the Merger and (iii) no liability will be imposed on the Company or any of its subsidiaries or any of their respective officers or employees involved prior to the Closing Date with respect to such matters);
|
•
|
furnish Parent and the lenders as promptly as reasonably practicable certain required information (the “Required Information”) that is compliant with certain requirements in the Merger Agreement and update any Required Information provided to Parent or the lenders as may be reasonably necessary so that such Required Information remains compliant (provided, that for the avoidance of doubt, there will not be more than one Marketing Period);
|
•
|
assist Parent with the preparation by Parent or the lenders of (i) offering documents, marketing documents and similar documents for any portion of the Debt Financing and (ii) materials for rating agency presentations;
|
•
|
cooperate with the lenders in performing their due diligence as reasonably requested by Parent;
|
•
|
assist Parent in obtaining credit ratings in connection with the Debt Financing;
|
•
|
cause the Company’s independent auditors, to the extent consistent with customary practice, to provide reasonable and customary assistance and cooperation in connection with the Debt Financing, including (i) rendering customary “comfort letters” and (ii) providing consents for use of their reports, as reasonably requested by Parent and/or lenders; and
|
•
|
furnish no later than three (3) business days prior to the Closing Date all documentation and other information relating to the Company and its subsidiaries that is reasonably requested by Parent and
|
•
|
the adoption of the Merger Agreement by the requisite affirmative vote of stockholders;
|
•
|
the expiration or termination of the applicable waiting period under the HSR Act and the receipt of approvals, consents, waivers or clearances under the antitrust laws of certain specified foreign jurisdictions; and
|
•
|
the absence of any laws or judgments issued by a governmental entity of competent jurisdiction making the Merger illegal or otherwise prohibiting the Merger.
|
•
|
the representations and warranties of Grace relating to organization, good standing, corporate power, capital structure, authority, execution and enforceability, the absence of a Company Material Adverse Effect from December 31, 2020 until the date of the Merger Agreement, anti-takeover laws, brokers and the fairness opinions being true and correct in all respects as of the date of the Merger Agreement and as of the Closing Date as if made as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), in each case except for any de minimis failures to be so true and correct;
|
•
|
the other representations and warranties of Grace set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect”) as of the date of the Merger Agreement and as of the Closing Date as if made as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except for such failures to be true and correct (without giving effect to any limitation as to “materiality” or “Company Material Adverse Effect”) that, individually or in the aggregate, has not had or would not reasonably be expected to have a Company Material Adverse Effect;
|
•
|
Grace having performed in all material respects all covenants and agreements of the Merger Agreement required to be performed by Grace;
|
•
|
no Company Material Adverse Effect having occurred since the date of Merger Agreement; and
|
•
|
the receipt by Parent of a certificate of Grace signed on behalf of Grace by an executive officer thereof, certifying that the conditions described in the preceding four (4) bullets have been satisfied.
|
•
|
the representations and warranties of Parent and Merger Sub set forth in the Merger Agreement being true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein) as of the date of the Merger Agreement and as of the Closing Date as if made as of such date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except for any failure to be so true and correct (without giving effect to any limitation as to “materiality” or “Parent Material Adverse Effect” set forth therein), 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 having performed in all material respects all covenants and agreements of the Merger Agreement required to be performed by Parent or Merger Sub at or prior to the closing of the Merger; and
|
•
|
the receipt by Grace of a certificate of Parent signed on behalf of Parent by an executive officer thereof, certifying that the conditions described in the preceding two (2) bullets have been satisfied.
|
•
|
by mutual written consent of Grace and Parent;
|
•
|
by either Grace or Parent if:
|
•
|
the Merger has not been consummated by 5:00 p.m., New York City time, on January 26, 2022, which we refer to in this proxy statement as the “End Date” (which will automatically be extended to (i) 5:00 p.m., New York City time, on April 26, 2022 if the required regulatory approvals have not been obtained by the End Date but all other conditions to the closing of the Merger have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the closing, but which are capable of being satisfied at such time) and (ii) 5:00 p.m., New York City time, on the tenth (10th) business day after the last day of the Marketing Period described above (but in no event to a date later than 5:00 p.m., New York City time, on April 26, 2022) if the conditions to the closing of the Merger have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the closing, but which are capable of being satisfied at such time) but the Marketing Period has not been completed at the time of the End Date); provided that the right to terminate the Merger Agreement pursuant to the termination provision referred to in this bullet point will not be available to a party if the failure of the Merger to have been completed on or before the End Date was primarily caused by the material breach of such party of its obligations under the Merger Agreement;
|
•
|
a law or judgment by a court or other governmental entity of competent jurisdiction permanently restraining, enjoining or otherwise prohibiting the completion of the Merger has become final and non-appealable; provided that the right to terminate the Merger Agreement pursuant to the
|
•
|
the Special Meeting has been duly held and the Grace Stockholders fail to adopt the Merger Agreement at such Special Meeting or any adjournment or postponement thereof.
|
•
|
by Parent if:
|
•
|
prior to the adoption of the Merger Agreement by the Grace Stockholders, the Board of Directors effects a Company Adverse Recommendation Change; or
|
•
|
Grace has breached or failed to perform any of its covenants or agreements set forth in the Merger Agreement, or if any of its respective representations or warranties fails to be true and correct, which, in either case would give rise to a failure of the conditions to completion of the Merger relating to the accuracy of Grace’s representations and warranties or performance of Grace’s covenants and is not reasonably capable of being cured by the End Date or, if capable of being cured, is not cured within 30 calendar days following Parent’s delivery of written notice of such breach or failure; provided that Parent will not have the right to terminate the Merger Agreement pursuant to this bullet point if Parent is then in breach of any covenant or agreement set forth therein or if any of its representations or warranties then fails to be true and correct, which, in either case would give rise to a failure of the conditions to completion of the Merger relating to the accuracy of Parent and Merger Sub’s representations and warranties or performance of Parent and Merger Sub’s covenants.
|
•
|
by Grace if:
|
•
|
prior to the adoption of the Merger Agreement by the Grace Stockholders, Grace enters into a definitive agreement with respect to a Superior Company Proposal in accordance with the terms of the Merger Agreement and as further described in the section of this proxy statement captioned “—Company Takeover Proposals; No Solicitation,” so long as (i) Grace has not willfully and materially breached its non-solicitation obligations and (ii) Grace pays to Parent the Company Termination Fee of $141 million prior to or concurrently with such termination;
|
•
|
prior to the Effective Time, Parent or Merger Sub has breached or failed to perform any of its respective covenants or agreements set forth in the Merger Agreement, or if any of its respective representations or warranties fails to be true and correct, which, in either case would give rise to a failure of the conditions to completion of the Merger relating to the accuracy of Parent and Merger Sub’s representations and warranties or performance of Parent and Merger Sub’s covenants and is not reasonably capable of being cured by the End Date or, if capable of being cured, is not cured within 30 calendar days following Grace’s delivery of written notice of such breach or failure; provided that Grace will not have the right to terminate the Merger Agreement pursuant to this bullet point if Grace is then in breach of any covenant or agreement set forth therein or if any of its representations or warranties then fails to be true and correct which, in either case would give rise to a failure of the conditions to completion of the Merger relating to the accuracy of Grace’s representations and warranties or performance of Grace’s covenants; or
|
•
|
prior to the Effective Time, (i) the conditions to the obligations of Parent and Merger Sub to consummate the Merger have been satisfied (other than those conditions that by their nature are to be satisfied at the closing, but which are capable of being satisfied at such time); (ii) Parent and Merger Sub have failed to consummate the Merger in the time set forth in the Merger Agreement; (iii) Grace has irrevocably confirmed to Parent in writing that Grace is ready, willing and able to consummate the Merger; and (iv) Parent and Merger Sub fail to consummate the Merger on or prior to the date that is three (3) business days after the delivery by Grace to Parent of such confirmation and Grace stood ready, willing and able to complete the closing through the end of such three (3) business day period.
|
•
|
by Grace prior to the adoption of the Merger Agreement by the Grace Stockholders to enter into a definitive agreement in respect of a Superior Company Proposal;
|
•
|
by Parent prior to the adoption of the Merger Agreement by the Grace Stockholders because the Board of Directors has effected a Company Adverse Recommendation Change;
|
•
|
by either Grace or Parent because the Grace Stockholders have failed to adopt the Merger Agreement at the Special Meeting or any adjournment or postponement thereof and, at the time of such termination, Parent would have been entitled to terminate the Merger Agreement because the Board of Directors has effected a Company Adverse Recommendation Change; or
|
•
|
(i) (a) by either Grace or Parent because the Merger has not been consummated by the End Date, (b) by either Grace or Parent because the Grace Stockholders have failed to adopt the Merger Agreement at the Special Meeting or any adjournment or postponement thereof, or (c) by Parent because Grace has breached or failed to perform any of its covenants or agreements set forth in the Merger Agreement or if any of its representations or warranties fails to be true and correct, which, in either case would give rise to a failure of the conditions to completion of the Merger relating to the accuracy of its representations and warranties or performance of its covenants and is not reasonably capable of being cured by the End Date or, if capable of being cured, is not cured within 30 calendar days following Parent’s delivery of written notice of such breach or failure; (ii) after the execution of the Merger Agreement and prior to the date of termination, the Company has received a bona fide Company Takeover Proposal or a bona fide Company Takeover Proposal has been publicly disclosed and not withdrawn at least five (5) business days prior to such termination; and (iii) within six (6) months of the date of termination described in preceding clause (i)(a) or twelve (12) months of the date of termination described in preceding clauses (i)(b) or (i)(c), Grace enters into a definitive agreement with respect to, or consummates, any Company Takeover Proposal (provided that, for purposes of the termination fee, all references to “15%” in the definition of “Company Takeover Proposal” are deemed to be references to “50%”).
|
•
|
by Grace if Parent or Merger Sub has breached or failed to perform any of its respective covenants or agreements set forth in the Merger Agreement, or if any of its respective representations or warranties fails to be true and correct, which, in either case would give rise to a failure of the conditions to completion of the Merger relating to the accuracy of Parent and Merger Sub’s representations and warranties or performance of Parent and Merger Sub’s covenants, and is not reasonably capable of being cured by the End Date or, if capable of being cured, is not cured within 30 calendar days following Grace’s delivery of written notice of such breach or failure;
|
•
|
by Grace if prior to the Effective Time, (i) the conditions to the obligations of Parent and Merger Sub to consummate the Merger have been satisfied (other than those conditions that by their nature are to
|
•
|
by Parent because the Merger has not been consummated by the End Date and at such time, Grace would have been entitled to terminate pursuant to either of the prior two bullets above.
|
Name
|
| |
Age
|
| |
Position
|
Hudson La Force
|
| |
57
|
| |
Director, President and Chief Executive Officer
|
Robert F. Cummings, Jr.
|
| |
71
|
| |
Director
|
Diane H. Gulyas
|
| |
65
|
| |
Director
|
Julie Fasone Holder
|
| |
68
|
| |
Director
|
Henry R. Slack
|
| |
71
|
| |
Director
|
Christopher J. Steffen
|
| |
79
|
| |
Director, Chairman of the Board of Directors
|
Mark E. Tomkins
|
| |
66
|
| |
Director
|
Shlomo Yanai
|
| |
69
|
| |
Director
|
Name
|
| |
Age
|
| |
Position
|
Hudson La Force
|
| |
57
|
| |
President and Chief Executive Officer
|
William C. Dockman
|
| |
62
|
| |
Senior Vice President and Chief Financial Officer
|
Elizabeth C. Brown
|
| |
57
|
| |
Senior Vice President, Human Resources and Information Technology, and Chief Human Resources Officer
|
Keith N. Cole
|
| |
62
|
| |
Senior Vice President, Public Affairs and Environment, Health, Safety, and Chief Sustainability Officer
|
Cherée H. Johnson
|
| |
45
|
| |
Senior Vice President, General Counsel and Secretary
|
|
| |
Year Ended December 31,
|
| |
For the Six
Months Ended
June 30,
|
|||||||||||||||
|
| |
2020
|
| |
2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2021
|
| |
2020
|
|
| |
(in millions, except per share amounts)
|
| |
|
| |
|
||||||||||||
OPERATING DATA:
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net sales
|
| |
$1,729.8
|
| |
$1,958.1
|
| |
$1,932.1
|
| |
$1,716.5
|
| |
$1,598.6
|
| |
$969.6
|
| |
$840.2
|
Gross profit
|
| |
$616.5
|
| |
$793.7
|
| |
$766.7
|
| |
$676.1
|
| |
$669.8
|
| |
$364.7
|
| |
$278.9
|
Income (loss) before income taxes
|
| |
$0.5
|
| |
$183.5
|
| |
$244.9
|
| |
$210.9
|
| |
$166.0
|
| |
$150.6
|
| |
$54.6
|
Net income (loss)
|
| |
$(1.7)
|
| |
$126.7
|
| |
$166.8
|
| |
$10.4
|
| |
$94.1
|
| |
$114.1
|
| |
$32.5
|
Net income (loss) attributable to Grace shareholders
|
| |
$(1.8)
|
| |
$126.3
|
| |
$167.6
|
| |
$11.2
|
| |
$94.1
|
| |
$113.8
|
| |
$34.7
|
Earnings per share of Grace common stock attributable to Grace shareholders
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Net income (loss) per share – basic
|
| |
$(0.03)
|
| |
$1.89
|
| |
$2.49
|
| |
$0.16
|
| |
$1.34
|
| |
$1.71
|
| |
$0.52
|
Weighted average number of shares of Grace common stock outstanding – basic
|
| |
66.3
|
| |
66.8
|
| |
67.2
|
| |
68.1
|
| |
70.1
|
| |
66.2
|
| |
66.3
|
Net income (loss) per share – diluted
|
| |
$(0.03)
|
| |
$1.89
|
| |
$2.49
|
| |
$0.16
|
| |
$1.33
|
| |
$1.71
|
| |
$0.52
|
Weighted average number of shares of Grace common stock outstanding – diluted
|
| |
66.3
|
| |
66.9
|
| |
67.3
|
| |
68.2
|
| |
70.5
|
| |
66.3
|
| |
66.4
|
Dividends per share of Grace common stock
|
| |
$1.20
|
| |
$1.08
|
| |
$0.96
|
| |
$0.84
|
| |
$0.51
|
| |
$0.33
|
| |
$0.60
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
BALANCE SHEET DATA (at the end of the period):
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Total current assets
|
| |
$875.3
|
| |
$1,134.9
|
| |
$857.3
|
| |
$728.6
|
| |
$654.8
|
| |
$1,018.5
|
| |
$1,719.6
|
Total assets
|
| |
$3,765.5
|
| |
$3,932.6
|
| |
$3,565.3
|
| |
$2,907.0
|
| |
$2,911.8
|
| |
$4,387.8
|
| |
$4,505.0
|
Total current liabilities
|
| |
$559.3
|
| |
$745.1
|
| |
$514.4
|
| |
$448.2
|
| |
$480.8
|
| |
$596.8
|
| |
$1,360.6
|
Total liabilities
|
| |
$3,531.0
|
| |
$3,530.4
|
| |
$3,228.3
|
| |
$2,643.7
|
| |
$2,539.4
|
| |
$3,779.3
|
| |
$4,155.4
|
Total shareholders’ equity
|
| |
$231.4
|
| |
$395.7
|
| |
$330.9
|
| |
$256.4
|
| |
$368.8
|
| |
$346.6
|
| |
$345.3
|
Noncontrolling interests
|
| |
$3.1
|
| |
$6.5
|
| |
$6.1
|
| |
$6.9
|
| |
$3.6
|
| |
$3.4
|
| |
$4.3
|
Total equity
|
| |
$234.5
|
| |
$402.2
|
| |
$337.0
|
| |
$263.3
|
| |
$372.4
|
| |
$350.0
|
| |
$349.6
|
Fiscal Year
|
| |
High
|
| |
Low
|
| |
Dividends
Declared
|
2019
|
| |
|
| |
|
| |
|
First Quarter
|
| |
$78.93
|
| |
$63.37
|
| |
$0.27
|
Second Quarter
|
| |
$78.88
|
| |
$69.22
|
| |
$0.27
|
Third Quarter
|
| |
$79.71
|
| |
$62.91
|
| |
$0.27
|
Fourth Quarter
|
| |
$70.49
|
| |
$63.74
|
| |
$0.27
|
|
| |
|
| |
|
| |
|
2020
|
| |
|
| |
|
| |
|
First Quarter
|
| |
$73.36
|
| |
$26.75
|
| |
$0.30
|
Second Quarter
|
| |
$60.53
|
| |
$33.09
|
| |
$0.30
|
Third Quarter
|
| |
$53.14
|
| |
$39.14
|
| |
$0.30
|
Fourth Quarter
|
| |
$58.00
|
| |
$38.70
|
| |
$0.30
|
|
| |
|
| |
|
| |
|
2021
|
| |
|
| |
|
| |
|
First Quarter
|
| |
$64.93
|
| |
$53.89
|
| |
$0.33
|
Second Quarter
|
| |
$69.30
|
| |
$59.35
|
| |
—
|
Third Quarter (through August 9, 2021)
|
| |
$69.75
|
| |
$68.96
|
| |
—
|
•
|
each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our outstanding common stock;
|
•
|
each of our directors;
|
•
|
each of our named executive officers (each, an “NEO”); and
|
•
|
all directors and executive officers as a group.
|
Name and Address of Beneficial Owner(1)
|
| |
Number of
Shares
Beneficially
Held
|
| |
Percentage of
Shares
Beneficially
Owned
|
5% Stockholders
|
| |
|
| |
|
40 North Management LLC(2)
|
| |
9,865,008
|
| |
14.9%
|
The Vanguard Group, Inc.(3)
|
| |
5,669,493
|
| |
8.6%
|
Named Executive Officers and Directors
|
| |
|
| |
|
Robert F. Cummings
|
| |
20,823(4)
|
| |
*
|
Julie Fasone Holder
|
| |
8,474
|
| |
*
|
Diane H. Gulyas
|
| |
14,823
|
| |
*
|
Hudson La Force
|
| |
224,439(5)
|
| |
*
|
Henry R. Slack
|
| |
5,495
|
| |
*
|
Christopher J. Steffen
|
| |
25,887
|
| |
*
|
Mark E. Tomkins
|
| |
24,823
|
| |
*
|
Shlomo Yanai
|
| |
6,973
|
| |
*
|
William C. Dockman
|
| |
35,801(5)
|
| |
*
|
Elizabeth C. Brown
|
| |
54,054(5)
|
| |
*
|
Keith N. Cole
|
| |
45,148(5)
|
| |
*
|
Mark A. Shelnitz
|
| |
113,738(4)(5)
|
| |
*
|
All current executive officers and directors as a group (12 people)(6)
|
| |
466,740(4)(5)
|
| |
0.7%
|
(1)
|
The address of each of our directors and executive officers is c/o Corporate Secretary, W. R. Grace & Co., 7500 Grace Drive, Columbia, Maryland 21044. Except as otherwise indicated, to our knowledge, each individual, along with his or her spouse, as applicable, has sole voting and investment power over the shares.
|
(2)
|
40 North, 40 North Latitude Feeder, 40 North GP III , 40 North Latitude Master, David S. Winter and David J. Millstone, beneficially owns 9,865,008 shares of Grace common stock (the “40 North Shares”). Each of 40 North, 40 North Latitude Feeder, 40 North GP III, 40 North Latitude Master, Mr. Winter and Mr. Millstone may be deemed the beneficial owner of all of the 40 North Shares. 40 North may be deemed to have sole power to vote and sole power to dispose of all of the 40 North Shares, whereas the other reporting persons having beneficial ownership may be deemed to have shared power to vote and shared power to dispose of such 40 North Shares. 40 North serves as principal investment manager to 40 North Latitude Feeder and 40 North Latitude Master. As such, 40 North has been granted investment discretion over portfolio investments, including the 40 North Shares. Mr. Winter and Mr. Millstone serve as the sole members and principals of each of 40 North and 40 North GP III, and as the sole directors of 40 North Latitude Master. The ownership information set forth is based on materials contained in the Schedule 13D/A filed with the SEC by 40 North on April 26, 2021.
|
(3)
|
The Vanguard Group, Inc. (“VGI”) beneficially owns in the aggregate 5,669,493 shares of Grace common stock by means of: shared voting power over 40,700 shares; sole investment power over 5,581,527 shares; and shared investment power over 87,966 shares. The ownership information set forth is based in its entirety on material contained in a Schedule 13G/A filed with the SEC by VGI on February 10, 2021.
|
(4)
|
Includes shares owned by trusts and other entities as to which the person has the power to direct voting and/or investment.
|
(5)
|
Includes shares of Grace common stock to be issued upon the exercise of stock options that are exercisable and shares of Grace common stock with respect to which investment or voting power will vest within 60 days after August 6, 2021. Pursuant to SEC rules, such shares are deemed to be beneficially owned as of such date.
|
(6)
|
Excludes Mr. Shelnitz, who resigned effective December 31, 2020, and includes Cherée H. Johnson, who was elected Senior Vice President, General Counsel and Secretary in 2021.
|
Persons
Specified
|
| |
Date
|
| |
Buy/Sell/
Withhold
|
| |
Number of
Securities
|
| |
Price per
Share
|
| |
Where / How
|
Christopher J. Steffen
|
| |
5/11/2021
|
| |
Buy
|
| |
1,683
|
| |
$0
|
| |
Issued in partial payment for 2021 retainer
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Shlomo Yanai
|
| |
5/11/2021
|
| |
Buy
|
| |
1,683
|
| |
$0
|
| |
Issued in partial payment for 2021 retainer
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Mark E. Tomkins
|
| |
5/11/2021
|
| |
Buy
|
| |
1,683
|
| |
$0
|
| |
Issued in partial payment for 2021 retainer
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Henry R. Slack
|
| |
5/11/2021
|
| |
Buy
|
| |
1,683
|
| |
$0
|
| |
Issued in partial payment for 2021 retainer
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Diane H. Gulyas
|
| |
5/11/2021
|
| |
Buy
|
| |
1,683
|
| |
$0
|
| |
Issued in partial payment for 2021 retainer
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Julie Fasone Holder
|
| |
5/11/2021
|
| |
Buy
|
| |
1,683
|
| |
$0
|
| |
Issued in partial payment for 2021 retainer
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Robert F. Cummings, Jr.
|
| |
5/11/2021
|
| |
Buy
|
| |
1,683
|
| |
$0
|
| |
Issued in partial payment for 2021 retainer
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Dockman, William C.
|
| |
5/7/2021
|
| |
Buy
|
| |
294
|
| |
Converted on a one-to-one basis from Company RSU Awards
|
| |
On May 8, 2018, the reporting person was granted 884 stock units, vesting annually in three substantially equal installments beginning on May 8, 2019; 294 of these stock units vested and settled on May 7, 2021, and on May 8, 2019, the reporting person was granted 2,664 stock units, which vested on May 7, 2021.
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Dockman, William C.
|
| |
5/7/2021
|
| |
Withhold
|
| |
98
|
| |
$68.39
|
| |
Securities withheld in payment of tax liability incident to the vesting of a security issued in accordance with Rule 16b-3.
|
Persons
Specified
|
| |
Date
|
| |
Buy/Sell/
Withhold
|
| |
Number of
Securities
|
| |
Price per
Share
|
| |
Where / How
|
Dockman, William C.
|
| |
5/7/2021
|
| |
Buy
|
| |
2,664
|
| |
Converted on a one-to-one basis from RSUs
|
| |
On May 8, 2018, the reporting person was granted 884 stock units, vesting annually in three substantially equal installments beginning on May 8, 2019; 294 of these stock units vested and settled on May 7, 2021, and on May 8, 2019, the reporting person was granted 2,664 stock units, which vested on May 7, 2021.
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
Dockman, William C.
|
| |
5/7/2021
|
| |
Withhold
|
| |
888
|
| |
$68.38
|
| |
Securities withheld in payment of tax liability incident to the vesting of a security issued in accordance with Rule 16b-3.
|
|
Grace Security
|
| |
Buy/Sell
|
| |
Number of shares
|
| |
Range of Prices Paid
|
| |
Average Price Paid
|
| |
Date
|
|
|
Common Stock
|
| |
Buy
|
| |
1,434
|
| |
$69.34-$69.85
|
| |
$69.59
|
| |
10/1/2019–12/31/2019
|
|
|
Common Stock
|
| |
Buy
|
| |
673,807
|
| |
$54.66-$72.07
|
| |
$59.98
|
| |
1/1/2020–3/31/2020
|
|
|
Purchaser Filing Person
|
| |
Grace Security
|
| |
Buy/Sell
|
| |
Number of
shares
|
| |
Price
Paid(*)
|
| |
Date
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
24,703
|
| |
64.9086
|
| |
08/12/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
66,028
|
| |
64.8716
|
| |
08/13/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
122,096
|
| |
63.2738
|
| |
08/14/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
76,000
|
| |
63.6559
|
| |
08/14/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
30,300
|
| |
64.4916
|
| |
08/15/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
14,776
|
| |
64.2863
|
| |
08/15/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
39,500
|
| |
64.7213
|
| |
08/16/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
12,000
|
| |
64.9725
|
| |
08/19/2019
|
|
|
40 North Latitude Master Fund Ltd
|
| |
Common Stock
|
| |
Buy
|
| |
38,500
|
| |
64.5942
|
| |
08/20/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
18,108
|
| |
64.8668
|
| |
08/21/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
50,000
|
| |
64.6177
|
| |
08/22/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
28,087
|
| |
64.8647
|
| |
08/23/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
400
|
| |
64.9975
|
| |
08/26/2019
|
|
(*)
|
The average price paid during the quarter (7/1/19-9/30/19) was: 64.2279.
|
|
Purchaser Filing Person
|
| |
Grace Security
|
| |
Buy/Sell
|
| |
Number of
shares
|
| |
Price
Paid(*)
|
| |
Date
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
24,703
|
| |
64.9086
|
| |
08/12/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
66,028
|
| |
64.8716
|
| |
08/13/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
122,096
|
| |
63.2738
|
| |
08/14/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
76,000
|
| |
63.6559
|
| |
08/14/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
30,300
|
| |
64.4916
|
| |
08/15/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
14,776
|
| |
64.2863
|
| |
08/15/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
39,500
|
| |
64.7213
|
| |
08/16/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
12,000
|
| |
64.9725
|
| |
08/19/2019
|
|
|
40 North Latitude Master Fund Ltd
|
| |
Common Stock
|
| |
Buy
|
| |
38,500
|
| |
64.5942
|
| |
08/20/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
18,108
|
| |
64.8668
|
| |
08/21/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
50,000
|
| |
64.6177
|
| |
08/22/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
28,087
|
| |
64.8647
|
| |
08/23/2019
|
|
|
40 North Latitude Master Fund Ltd.
|
| |
Common Stock
|
| |
Buy
|
| |
400
|
| |
64.9975
|
| |
08/26/2019
|
|
(*)
|
The average price paid during the quarter (7/1/19-9/30/19) was: 64.2279.
|
•
|
David Winter (Co-Executive Chairman, Chief Executive Officer and President) — Mr. Winter is the co-Executive Chairman and co-Chief Executive Officer of Standard Industries Holdings and Principal of 40 North. A graduate of University of Pennsylvania, Mr. Winter has managed Standard Industries Holdings with co-CEO David Millstone since 2015.
|
•
|
David Millstone (Co-Executive Chairman, Chief Executive Officer and President) — Mr. Millstone is the co-Executive Chairman and co-Chief Executive Officer of Standard Industries Holdings and Principal of 40 North. A graduate of Yale University and Harvard Law School, Mr. Millstone has managed Standard Industries Holdings with co-CEO David Winter since 2015.
|
•
|
John Rebele (Executive Vice President and Chief Financial Officer) — Mr. Rebele is the Chief Financial Officer of Standard Industries Holdings and has held this position since 2016. Mr. Rebele was appointed to the board of directors of Standard Industries Holdings in April 2021. Presently and for more than the prior five years, Mr. Rebele has held the position of Chief Financial Officer for Standard Industries. He has also served on the board of directors of Standard Industries and its predecessor entity for more than five years.
|
•
|
Jason Pollack (Chief Legal Officer and Secretary) — Mr. Pollack is the Chief Legal Officer of Standard Industries Holdings, and has held this position (or equivalent title) at Standard Industries Holdings and its predecessor entity since 2010. Mr. Pollack was appointed to the board of directors of Standard Industries Holdings in April 2021. Presently and for more than the prior five years, Mr. Pollack has held the position of Chief Legal Officer at Standard Industries. He has also served on the board of directors of Standard Industries and its predecessor entity for more than five years.
|
•
|
John Gianukakis (Treasurer) — Mr. Gianukakis is the Treasurer of Standard Industries Holdings, and has held this position since October 2017. Mr. Gianukakis also serves as Treasurer of Standard Industries since May 2017. Prior to joining Standard Industries, Mr. Gianukakis was the Treasurer of Frontier Communications, a telecommunications company located at 401 Merritt 7, Norwalk, Connecticut 06851, from May 2014 to April 2017.
|
•
|
Louis Feldman (Chief Tax Counsel and Assistant Secretary) — Mr. Feldman is the Chief Tax Counsel of Standard Industries Holdings and he has held this position at Standard Industries Holdings and its predecessor entity since 2010. Presently, and for more than the prior five years, Mr. Feldman has held the position of Chief Tax Counsel for Standard Industries. He has also served as Chief Tax Counsel of 40 North since 2011.
|
•
|
David Millstone (Co-Executive Chairman, Chief Executive Officer and President) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Winter (Co-Executive Chairman, Chief Executive Officer and President) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
John Rebele (Executive Vice President and Chief Financial Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
Jason Pollack (Chief Legal Officer and Secretary) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
John Gianukakis (Treasurer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
Louis Feldman (Chief Tax Counsel and Assistant Secretary) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Millstone (Co-Executive Chairman, Chief Executive Officer and President) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Winter (Co-Executive Chairman, Chief Executive Officer and President) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
John Rebele (Executive Vice President and Chief Financial Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
Jason Pollack (Chief Legal Officer and Secretary) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
John Gianukakis (Treasurer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
Louis Feldman (Chief Tax Counsel and Assistant Secretary) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Millstone (Director, Co-Executive Chairman, Chief Executive Officer and President) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Winter (Director, Co-Executive Chairman, Chief Executive Officer and President) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
John Rebele (Director, Executive Vice President and Chief Financial Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
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Jason Pollack (Director, Chief Legal Officer and Secretary) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
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•
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Hamilton South (Director) – Mr. South has served as Chief of Staff of Standard Industries and 40 North since January 2018. Prior to joining Standard Industries and 40 North, Mr. South served as Founder of HL Group, a strategic communications and marketing firm, since 2001. He is currently a board member of several Standard Industries affiliated companies and investment partners.
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•
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John Gianukakis (Treasurer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
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•
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Louis Feldman (Chief Tax Counsel and Assistant Secretary) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
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•
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David Millstone (Director, co-Executive Chairman and co-Chief Executive Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
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•
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David Winter (Director, co-Executive Chairman and co-Chief Executive Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
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Jason Pollack (Director and Chief Legal Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
John Rebele (Director and Chief Financial Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
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Hamilton South (Director) – For additional biographical information, please see “—Merger Sub—Directors and Executive Officers of Merger Sub.”
|
•
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David Millstone (Director, co-Executive Chairman and co-Chief Executive Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Winter (Director, co-Executive Chairman and co-Chief Executive Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
Jason Pollack (Director and Chief Legal Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
John Rebele (Director and Chief Financial Officer) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
Hamilton South (Director) – For additional biographical information, please see “—Merger Sub—Directors and Executive Officers of Merger Sub.”
|
•
|
David Millstone (Principal) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Winter (Principal) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Millstone (Principal) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Winter (Principal) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Millstone (Director) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
David Winter (Director) – For additional biographical information, please see “—Parent—Executive Officers of Parent.”
|
•
|
Grace’s Definitive Proxy Statement on Schedule 14A for the 2021 annual meeting of stockholders, filed on May 24, 2021;
|
•
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Grace’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed on February 26, 2021, as amended by Amendment No. 1 on Form 10-K/A, filed on April 30, 2021;
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•
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Grace’s Quarterly Reports on Form 10-Q for the fiscal quarter ended March 31, 2021, filed on May 7, 2021, and the fiscal quarter ended June 30, 2021, filed on August 2, 2021; and
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•
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Grace’s Current Reports on Form 8-K, in each case to the extent filed and not furnished with the
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W. R. GRACE & CO.
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By:
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/s/ Hudson La Force
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Name: Hudson La Force
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Title: President and Chief Executive Officer
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GIBRALTAR ACQUISITION HOLDINGS LLC
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By:
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/s/ David J. Millstone
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Name:
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David J. Millstone
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Title:
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Co-Executive Chairman, Chief Executive Officer & President
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GIBRALTAR MERGER SUB INC.
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By:
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/s/ David J. Millstone
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Name:
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David J. Millstone
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Title:
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Co-Executive Chairman, Chief Executive Officer & President
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Term
|
| |
Section
|
Agreement
|
| |
Preamble
|
Anti-Corruption Laws
|
| |
3.13(a)
|
Bankruptcy and Equity Exceptions
|
| |
3.04
|
Book-Entry Shares
|
| |
2.02(b)(ii)
|
Cash Equity
|
| |
4.06(b)
|
Certificate
|
| |
2.02(b)(i)
|
Certificate of Merger
|
| |
1.02
|
Closing
|
| |
1.03
|
Closing Date.
|
| |
1.03
|
Commitment Letters
|
| |
4.06(b)
|
Company
|
| |
Preamble
|
Company Acquisition Agreement
|
| |
5.02(b)
|
Company Adverse Recommendation Change
|
| |
5.02(b)
|
Company Board
|
| |
Recitals
|
Company Board Recommendation
|
| |
3.04
|
Company Bylaws
|
| |
3.01
|
Company Charter
|
| |
3.01
|
Company Common Stock
|
| |
2.01(a)(i)
|
Company Disclosure Schedule
|
| |
Article III
|
Company Employee
|
| |
6.09(a)
|
Company Financial Statements
|
| |
3.06(a)
|
Company Group
|
| |
8.02(d)(ii)
|
Company Indemnified Parties
|
| |
6.08(a)
|
Company Indemnified Party
|
| |
6.08(a)
|
Company Intervening Event
|
| |
5.02(g)(iii)
|
Company IP
|
| |
3.19(b)(i)
|
Company Material Contract
|
| |
3.17(a)
|
Company Projections
|
| |
3.27
|
Company Reports
|
| |
3.06(a)
|
Company Stockholder Approval
|
| |
3.04
|
Company Stockholders Meeting
|
| |
3.04
|
Company Subsidiaries
|
| |
3.01
|
Company Takeover Proposal
|
| |
5.02(g)(i)
|
Company Termination Fee
|
| |
8.02(b)
|
Company Top Customer
|
| |
3.20(a)
|
Term
|
| |
Section
|
Company Top Supplier
|
| |
3.20(a)
|
Consent
|
| |
3.05(b)
|
Consent Solicitation Documents
|
| |
6.03(e)
|
Consent Solicitations
|
| |
6.03(e)
|
Continuation Period
|
| |
6.09(a)
|
Customary Agreements
|
| |
3.08(a)(iii)
|
D&O Insurance
|
| |
6.08(c)
|
debt
|
| |
4.12
|
Debt Commitment Letter
|
| |
4.06(a)
|
Debt Financing
|
| |
4.06(a)
|
Definitive Agreements
|
| |
6.03(a)
|
DGCL
|
| |
1.01
|
Dissenting Share
|
| |
2.04(a)
|
Effective Time
|
| |
1.02
|
End Date
|
| |
8.01(b)(i)
|
Enforcement Expenses
|
| |
8.02(c)
|
Equity Commitment Letter
|
| |
4.06(b)
|
Equity Investor
|
| |
4.06(b)
|
Equity Securities
|
| |
3.03(b)
|
Exchange Act
|
| |
3.05(b)(i)
|
Existing Notes Refinancing
|
| |
6.03(e)
|
Export and Sanctions Regulations
|
| |
3.14(a)
|
FCPA
|
| |
3.13(a)
|
Filing
|
| |
3.05(b)
|
Financing
|
| |
4.06(b)
|
GAAP
|
| |
3.06(a)
|
Guarantor
|
| |
Recitals
|
Guaranty
|
| |
Recitals
|
HSR Act
|
| |
3.05(b)(ii)
|
Insurance Policies
|
| |
3.21
|
IRS
|
| |
3.09(a)
|
Legal Restraint
|
| |
7.01(c)
|
Liens
|
| |
3.02
|
Merger
|
| |
1.01
|
Merger Amounts
|
| |
4.06(e)
|
Merger Sub
|
| |
Preamble
|
Multiemployer Plan
|
| |
3.09(e)
|
Nonparty Affiliate
|
| |
9.15
|
Parent
|
| |
Preamble
|
Parent Group
|
| |
8.02(d)(i)
|
Parent Termination Fee
|
| |
8.02(b)(ii)
|
Parties
|
| |
Preamble
|
Paying Agent
|
| |
2.02(a)
|
Payment Fund
|
| |
2.02(a)
|
Post-Closing Plan
|
| |
6.09(d)
|
Preferred Stock
|
| |
3.03(a)
|
Prohibited Financing Modifications
|
| |
6.03(b)
|
Proxy Statement
|
| |
6.01(a)
|
Representatives
|
| |
5.02
|
Required Consents
|
| |
3.05(a)
|
Required Statutory Approvals
|
| |
3.05(b)(ii)
|
Retirement Plan
|
| |
6.09(a)
|
SEC
|
| |
3.05(b)(i)
|
Securities Act
|
| |
3.05(b)(i)
|
Solvent
|
| |
4.12
|
Term
|
| |
Section
|
Superior Company Proposal
|
| |
5.02(g)(ii)
|
Supporting Stockholder
|
| |
Recitals
|
Surviving Corporation
|
| |
1.01
|
Tail Period
|
| |
6.08(c)
|
Takeover Statute
|
| |
3.15
|
Transaction Litigation
|
| |
6.14
|
Voting Agreement
|
| |
Recitals
|
Willful Breach
|
| |
8.02(e)
|
|
| |
|
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| |
|
|
| |
Very truly yours,
/s/ Moelis & Company LLC
MOELIS & COMPANY LLC
|