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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 1/28/22 Entegris Inc. 424B3 1:5.2M Edgarfilings Ltd. |
Document/Exhibit Description Pages Size 1: 424B3 Prospectus - New Facts or Events HTML 3.82M
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1. | to
adopt the merger agreement, which proposal is referred to as the merger agreement proposal; |
2. | to approve, on a non-binding, advisory basis, the merger-related compensation that will or may be paid to CMC’s named executive officers in connection with the transactions contemplated by the merger agreement, which proposal is referred to as the compensation proposal; and |
3. | to approve the adjournment of the special meeting to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement proposal or to ensure that any supplement or amendment to the accompanying proxy statement/prospectus is timely provided
to CMC stockholders, which proposal is referred to as the adjournment proposal. |
For Information Regarding Entegris: Entegris, Inc. 129 Concord Road (978) 436-6500 Attention: Corporate Secretary | | | For Information Regarding CMC: CMC
Materials, Inc. 870 North Commons Drive (630) 499-2600 Attention:
Corporate Secretary |
Q: | Why am I receiving this proxy statement/prospectus? |
A: | You
are receiving this proxy statement/prospectus because Entegris has agreed to acquire CMC through a merger of Merger Sub with and into CMC, with CMC surviving the merger as a wholly owned subsidiary of Entegris. The merger agreement governs the terms of the merger and is attached to this proxy statement/prospectus as Annex A. |
Q: | When and where will the special meeting take place? |
A: | The special meeting will be held virtually via the special meeting website, on March 3, 2022, at 8:00 a.m., Central Standard Time. |
Q: | Does
my vote matter? |
A: | Yes, your vote is very important, regardless of the number of shares that you own. The merger cannot be completed unless the merger agreement is adopted by CMC stockholders. |
Q: | What will I receive if the merger is completed? |
A: | If the merger is completed, each share of CMC common stock outstanding at the effective time of the merger (other than (i) shares of CMC common stock owned by CMC, Entegris or any of their respective subsidiaries immediately before the effective
time and (ii) shares of CMC common stock as to which dissenters’ rights have been properly perfected, which are referred to collectively as CMC excluded shares) will be converted into the right to receive (i) $133.00 in cash and (ii) 0.4506 shares of Entegris common stock. No fractional shares of Entegris common stock will be issued upon the conversion of shares of CMC common stock pursuant to the merger agreement. Each holder of shares of CMC common stock who would otherwise have been entitled to receive a fraction of a share of Entegris common stock (after aggregating all shares represented by the certificates and book-entry shares delivered by such holder) will receive, in lieu thereof and upon surrender thereof, a cash payment representing such holder’s proportionate interest, if any, in the proceeds from the sale by the exchange agent (reduced by any fees of the exchange agent attributable to such sale) in one or more transactions of shares of Entegris common stock
equal to the excess of (i) the aggregate number of shares of Entegris common stock to be delivered to the exchange agent with respect to the stock portion of the merger consideration over (ii) the aggregate number of whole shares of Entegris common stock to be distributed to the holders of shares of CMC common stock, which is referred to as the excess shares. Holders of CMC common stock who would otherwise have been entitled to receive a fraction of a share of Entegris common stock will not be entitled to dividends, voting rights or any other rights in respect of such fractional shares. |
Q: | Will
CMC equity awards be affected by the merger? |
A: | At the effective time, (i) each outstanding option to purchase shares of CMC common stock will vest in full and be assumed and converted into an option to purchase shares of Entegris common stock based on the equity award exchange ratio, (ii) each restricted share of CMC common stock will vest in full and be cancelled and converted into the right to receive the merger consideration (with any accrued but unpaid dividends paid in cash), (iii) each time-based restricted stock unit award that was granted before the date of the merger agreement and/or to a non-employee member of the CMC board of directors will vest in full and be cancelled and converted into the right to receive the merger consideration (with any accrued but unpaid dividend equivalents paid in cash), (iv) each
other time-based restricted stock unit award not covered by clause (iii) will be converted into a restricted stock unit award with respect to shares of Entegris common stock based on the equity award exchange ratio (with any accrued but unpaid dividend equivalents to be assumed and become an obligation in connection with the converted restricted stock unit award), (v) each deferred stock unit award under the Directors’ Deferred Compensation Plan of CMC will vest in full and be cancelled and converted into the right to receive the merger consideration (with any accrued but unpaid dividend equivalents paid in cash), (vi) each performance-based restricted stock unit will be assumed and converted into a time-based restricted stock unit award with respect to shares of Entegris common stock based on the equity award exchange ratio and the achievement of applicable performance metrics at the target level (with any accrued but unpaid dividend equivalents to be assumed and become
an obligation in connection with the converted time-based restricted |
Q: | What will happen to the CMC 2007 Employee Stock Purchase Plan? |
A: | The CMC 2007
Employee Stock Purchase Plan, which is referred to as the ESPP, will continue to operate in accordance with its terms, although participants in the offering period in effect on the date of the merger agreement will not be permitted to increase their payroll contribution rate from the rate in effect on the date of the merger agreement or make non-payroll contributions to the ESPP, except as may be required by applicable law. Any offering period that is in progress immediately before the closing of the transaction will end shortly before the transaction and outstanding options will be exercised in accordance with the ESPP, and the ESPP will be terminated no later than the business day immediately preceding the closing date. |
Q: | How does the CMC board of directors recommend that I vote at the special meeting? |
A: | The
CMC board of directors unanimously recommends that you vote “FOR” the merger agreement proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal. |
Q: | Who is entitled to vote at the special meeting? |
A: | The record date for the special meeting is January 25, 2022, which is referred to as the record date. All holders of shares of CMC common stock who held shares at the close of business on the record date are entitled to receive notice of, and to vote at, the special meeting. Each
such holder of CMC common stock is entitled to cast one vote on each matter properly brought before the special meeting for each share of CMC common stock that such holder owned of record as of the record date. Attendance at the special meeting via the special meeting website is not required to vote. See below and the section entitled “The Special Meeting—Methods of Voting” beginning on page 42 for instructions on how to vote your shares without attending the special meeting. |
Q: | What is a proxy? |
A: | A stockholder’s legal designation of another person to vote shares of such stockholder’s common stock at a special meeting is referred to as a proxy. The document used to designate a proxy to vote your shares of CMC common stock is referred to as a proxy card. |
Q: | How
many votes do I have for the special meeting? |
A: | Each CMC stockholder is entitled to one vote for each share of CMC common stock held of record as of the close of business on the record date. As of the close of business on the record date, there were 28,575,038 outstanding shares of CMC common stock. |
Q: | What constitutes a quorum for the special meeting? |
A: | The holders of a majority of the shares of CMC common stock entitled to vote at the special meeting must be present or represented at the special meeting by proxy
in order to constitute a quorum. |
Q: | Will the Entegris common stock that I receive in the merger be publicly traded? |
A: | Yes. The shares of common stock of Entegris to be issued in the merger will be listed for trading on the NASDAQ under the symbol “ENTG.” |
Q: | What happens if the merger is not completed? |
A: | If the merger agreement is not adopted by CMC
stockholders or if the merger is not completed for any other reason, CMC stockholders will not receive any merger consideration for their shares of CMC common stock in connection with the merger. Instead, CMC will remain an independent public company and CMC common stock will continue to be listed and traded on the NASDAQ. If the merger agreement is terminated under specified circumstances, CMC may be required to pay Entegris a termination fee of $187 million. See the section entitled “The Merger Agreement—Termination Fees” beginning on page 94 for a more detailed discussion of the termination fees. |
Q: | What is a “broker non-vote”? |
A: | Under
the NASDAQ rules, banks, brokers and other nominees may use their discretion to vote “uninstructed” shares (i.e., shares of record held by banks, brokers or other nominees, but with respect to which the beneficial owner of such shares has not provided instructions on how to vote on a particular proposal) with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. All the proposals currently scheduled for consideration at the special meeting are “non-routine” matters. |
Q: | What stockholder vote is required for the approval of each proposal at the special meeting? What will happen if I fail to vote or abstain from voting on each proposal at the special meeting? |
A: | Proposal 1: Merger agreement proposal. Assuming
a quorum is present, the adoption of the merger agreement by CMC stockholders requires the affirmative vote of a majority of the outstanding shares of CMC common stock entitled to vote thereon. Accordingly, a CMC stockholder’s abstention from voting, a broker non-vote or the failure of a CMC stockholder to vote (including the failure of a CMC stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as a vote “AGAINST” the merger agreement proposal. |
Q: | Why am I being asked to consider and vote on a proposal to approve, by non-binding, advisory vote, merger-related compensation arrangements for CMC’s named executive officers (i.e., the compensation proposal)? |
A: | Under the SEC rules, CMC is required to seek a non-binding, advisory vote of its stockholders with respect to the compensation that may be paid or become payable to CMC’s named executive officers that is based on or otherwise relates to the merger, also known as “golden parachute” compensation. |
Q: | What
happens if CMC stockholders do not approve, by non-binding, advisory vote, the compensation proposal? |
A: | The vote on the proposal to approve the merger-related compensation arrangements for CMC’s named executive officers is separate and apart from the votes to approve the other proposals being presented at the special meeting. Because the vote on the proposal to approve the merger-related executive compensation is advisory in nature only, it will not be binding upon Entegris or CMC. Accordingly, the merger-related compensation will be paid to CMC’s named executive officers to the extent payable in accordance with the terms of their compensation agreements and arrangements even if CMC’s stockholders do not approve the proposal to approve the merger-related compensation. |
Q: | How
can I vote my shares at the special meeting? |
A: | Record Holders. Shares held directly in your name as the holder of record of CMC common stock may be voted at the special meeting. If you choose to vote your shares virtually at the special meeting via the special meeting website, please follow the instructions on your proxy card. |
Q: | How can I vote my shares without attending the special meeting? |
A: | Whether you hold your shares directly as the stockholder
of record of CMC or beneficially in “street name,” you may direct your vote by proxy without attending the special meeting via the special meeting website. You can vote by proxy over the Internet, or by telephone or by mail by following the instructions provided in the enclosed proxy card. Please note that if you hold shares beneficially in “street name,” you should follow the voting instructions provided by your bank, broker or other nominee. |
Q: | What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in “street name?” |
A: | If your shares of common stock in CMC are registered directly in your name with Computershare Trust Company, N.A., CMC’s transfer agent, you are considered the stockholder of record with respect to those shares. As the stockholder of record,
you have the right to vote, or to grant a proxy for your vote directly to CMC or to a third party to vote, at the special meeting. |
Q: | If my shares of CMC common stock are held in “street name” by my bank, broker or other nominee, will my bank, broker or other nominee automatically vote those shares for me? |
A: | No. Your bank, broker or other nominee will only be permitted to vote your shares of CMC common stock 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 regarding
the voting of your shares. Under the rules of the NASDAQ, banks, brokers and other nominees who hold shares of CMC common stock in “street name” for their customers have authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are prohibited from exercising their voting discretion with respect to non-routine matters, which include all the proposals currently scheduled to be considered and voted on at the special meeting. As a result, absent specific instructions from the beneficial owner of such shares, banks, brokers and other nominees are not empowered to vote such shares. |
Q: | What should I do if I receive more than one set of voting materials for the same special meeting? |
A: | If you hold shares of CMC common stock in “street name” and also directly in your name as a stockholder of record or otherwise, or if you hold shares of CMC common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the same special meeting. |
Q: | If a stockholder
submits a proxy, how are the shares of CMC common stock voted? |
A: | Regardless of the method you choose to vote, the individuals named on the enclosed proxy card will vote your shares of CMC common stock in the way that you indicate. When completing the Internet or telephone voting processes or the proxy card, you may specify whether your shares of CMC common stock should be voted for or against, or abstain from voting on, all, some or none of the specific items of business to come before the special meeting. |
Q: | How will my shares of CMC common stock be voted if I return a blank proxy? |
A: | If
you sign, date and return your proxy card and do not indicate how you want your shares of CMC common stock to be voted, then your shares of CMC common stock will be voted “FOR” the merger agreement proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal. |
Q: | Can I change my vote after I have submitted my proxy? |
A: | Any stockholder submitting a proxy has the right to revoke it before the proxy is voted at the special meeting by doing any of the following: |
• | sending a signed written notice
of revocation to CMC’s corporate secretary; |
• | voting again by the Internet or telephone at a later time before the closing of the voting facilities at 11:59 p.m., Eastern Time, on the date before the special meeting; |
• | submitting a properly signed proxy card with a later date; or |
• | attending virtually and voting at the special meeting via the special meeting website. |
Q: | If I hold my shares in “street name,” can I change my voting instructions after I have submitted voting instructions to my bank, broker or other nominee? |
A: | If your shares are held in the name of a bank, broker or other nominee and you previously provided voting instructions to your bank, broker or other nominee, you should follow the instructions provided by your bank, broker or other nominee to revoke or change your voting instructions. |
Q: | Where
can I find the voting results of the special meeting? |
A: | The preliminary voting results for the special meeting will be announced at the special meeting. In addition, within four business days following certification of the final voting results, CMC intends to file the final voting results of its special meeting with the SEC on a Current Report on Form 8-K. |
Q: | If I do not favor the merger, what are my rights? |
A: | CMC stockholders are entitled to dissenters’ rights under the Delaware General Corporation Law, which
is referred to as the DGCL. If they are not in favor of the merger, CMC stockholders may vote against the merger agreement proposal. For more information, see the section entitled “Appraisal Rights” beginning on page 129. Information about how CMC stockholders may vote on the proposals being considered in connection with the merger can be found under the section entitled “The Special Meeting” beginning on page 40. |
Q: | Are there any risks that I should consider in deciding whether to vote for the approval of the merger agreement proposal? |
A: | Yes.
You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 27. You also should read and carefully consider the risk factors of Entegris and CMC contained in the documents that are incorporated by reference into this proxy statement/prospectus. |
Q: | What happens if I sell my shares of CMC common stock after the record date but before the special meeting? |
A: | The record date is earlier than the date of the special meeting. If you transfer your shares of CMC common stock after the record
date but before the special meeting, you will, unless special arrangements are made, retain your right to vote at the special meeting. |
Q: | Should I send in my stock certificates now? |
A: | No. Please do not send in your stock certificates with your proxy. After the merger is completed, an exchange agent designated by Entegris and mutually acceptable to CMC, which is referred to as the exchange agent, will send you instructions for exchanging CMC stock certificates for the consideration to be received in the merger. See the section entitled “The Merger Agreement—Exchange of Shares” beginning on page 71. |
Q: | Who will solicit and pay the cost of soliciting proxies? |
A: | CMC has engaged Innisfree M&A Incorporated, which is referred to as Innisfree, to assist in the solicitation of proxies for the special meeting. CMC estimates that it will pay Innisfree a fee of approximately $25,000, plus reimbursement for certain fees and expenses. CMC has agreed to indemnify Innisfree against various
liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions). CMC also may be required to reimburse banks, brokers and other custodians, nominees and fiduciaries or their respective agents for their expenses in forwarding proxy materials to beneficial owners of CMC common stock. CMC’s directors, officers and employees also may solicit proxies by telephone, by electronic means or in person. They will not be paid any additional amounts for soliciting proxies. |
Q: | What are the United States federal income tax consequences of the merger to U.S. holders of CMC common stock? |
A: | The receipt of the merger consideration
in exchange for shares of CMC common stock pursuant to the merger is expected to be treated as a taxable transaction for U.S. federal income tax purposes. Accordingly, assuming that the exchange is treated as a taxable transaction for U.S. federal income tax purposes, a U.S. holder (as defined below in the section entitled “U.S. Federal Income Tax Consequences of the Merger,” beginning on page 119), will generally recognize gain or loss equal to the difference, if any, between (i) the sum of the cash and the fair market value (as of the effective time) of the stock consideration received in the merger and (ii) the U.S. holder’s adjusted tax basis in CMC common stock surrendered in exchange therefor. See the section entitled “U.S. Federal Income Tax Consequences of the Merger,” beginning on page 119, for a
more detailed description of the U.S. federal income tax consequences of the merger. The tax consequences of the merger to a particular U.S. holder of CMC common stock will depend on such holder’s particular facts and circumstances. Holders of CMC common stock should consult their own tax advisors to determine the specific U.S. federal, state, local and non-U.S. tax consequences to them of exchanging their shares of CMC common stock for the merger consideration pursuant to the merger. |
Q: | When
is the merger expected to be completed? |
A: | Subject to the satisfaction or waiver of the closing conditions described under the section entitled “The Merger Agreement—Conditions to the Completion of the Merger” beginning on page 92, including the adoption of the merger agreement by CMC stockholders, the merger is expected to close in the second half of 2022, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by CMC stockholders. However, neither CMC nor Entegris can predict the actual date on which the merger will be completed, or if the merger will be completed at all, because completion of the merger is subject to conditions and factors outside the control of both
companies. Entegris and CMC hope to complete the merger as soon as reasonably practicable. See also the section entitled “The Merger—Regulatory Approvals” beginning on page 66. |
Q: | What are the conditions to completion of the merger? |
A: | The merger is subject to a number of conditions to closing as specified in the merger agreement. These closing conditions include, among others, (i) approval of the merger agreement proposal by the affirmative vote of holders of a majority of the outstanding shares of CMC common stock entitled to vote on such matter, (ii) approval, subject to official notice
of issuance, for listing on the NASDAQ of the shares of Entegris common stock to be issued pursuant to the merger agreement, (iii) the receipt of approvals under U.S. and foreign antitrust and competition laws in China, Japan, Singapore, South Korea and Taiwan, (iv) the absence of governmental restraints or prohibitions preventing the consummation of the merger and (v) the effectiveness of the registration statement on Form S-4 registering the Entegris common stock issuable pursuant to the merger agreement and the absence of any stop order or proceedings by the SEC with respect thereto. The obligation of each of CMC and Entegris to consummate the merger is also conditioned on, among other things, (x) the truth and correctness of the representations and warranties made by the other party on the date of the merger agreement and on the closing date (subject to certain materiality qualifiers), (y) the performance by the other party in all material respects of its obligations
under the merger agreement and (z) the receipt by each party of a certificate of the |
Q: | What equity stakes will CMC stockholders hold in Entegris immediately following the merger? |
A: | Based
on (i) the estimated number of shares of Entegris common stock and CMC common stock issued and outstanding at the close of business on January 25, 2022, the latest practicable date before the date of this proxy statement/prospectus and (ii) the estimated number of shares of Entegris common stock issuable upon the exercise of any converted options, it is expected that CMC stockholders will own approximately 9% of the issued and outstanding shares of Entegris immediately following the completion of the merger. The exact equity stake of CMC stockholders in Entegris immediately following the merger will depend on the number of shares of Entegris common stock and CMC common stock issued and outstanding immediately before the merger. |
Q: | If I am a CMC stockholder and I have
not demanded my appraisal rights, how will I receive the merger consideration to which I am entitled? |
A: | If you hold your shares of CMC common stock through The Depository Trust Company, which is referred to as DTC, in book-entry form and you have not demanded your appraisal rights (more information on appraisal rights may be found in the section entitled “Appraisal Rights” beginning on page 129), you will not be required to take any specific actions to exchange your shares for the merger consideration. After the completion of the merger, shares of CMC common stock held through DTC in book-entry form will be automatically exchanged for the cash consideration and for shares of Entegris common stock in book-entry form and cash to be paid in lieu
of any fractional share of Entegris common stock to which you are entitled. If you hold your shares of CMC common stock in certificated form, or in book-entry form but not through DTC, after receiving the proper documentation from you, following the effective time, the exchange agent will deliver to you the cash consideration, the Entegris common stock (in book-entry form) and cash in lieu of fractional shares to which you are entitled. More information may be found in the sections entitled “The Merger—Exchange of Shares and Payment Procedures” beginning on page 67 and “The Merger Agreement—Exchange of Shares” beginning on page 71. |
Q: | What
should I do now? |
A: | You should read this proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card by mail in the enclosed postage-paid envelope or submit your voting instructions by telephone or over the Internet as soon as possible so that your shares will be voted in accordance with your instructions. |
Q: | Whom do I call if I have questions about the special meeting or the merger? |
A: | If you have questions about the special meeting or
the merger, or desire additional copies of this proxy statement/prospectus or additional proxies, you may contact CMC’s proxy solicitor: |
• | Proposal 1: Adoption of the Merger Agreement. To consider and vote on the merger agreement proposal; |
• | Proposal 2: Approval, on an Advisory (Non-Binding) Basis of Certain Compensatory Arrangements with CMC’s Named Executive Officers. To consider and vote on the compensation proposal; and |
• | Proposal 3: Adjournment of the Special Meeting. To consider and vote
on the adjournment proposal. |
• | Each
of CMC’s executive officers holds outstanding CMC equity awards that will be treated as described under the section entitled “The Merger Agreement—Treatment of CMC Equity Awards” beginning on page 112, certain of which will vest at the effective time and certain of which will be converted into Entegris equity awards. Any CMC equity awards that do not vest at the effective time and are converted into Entegris equity awards will remain subject to “double-trigger” vesting upon a qualifying termination following a change in control (which will occur upon the merger for purposes of the equity awards and the other compensation and benefits arrangements discussed below). Outstanding DSU awards held by certain of CMC’s non-employee directors will vest at the effective time; |
• | CMC’s
executive officers are party to change in control severance protection agreements that provide for severance payments and benefits in connection with a qualifying termination of employment in connection with a change in control (including the merger); |
• | In connection with CMC’s Chief Financial Officer transition announced in November 2021, Mr. Beamer and Ms. Press have entered into individual agreements with CMC that may provide for certain benefits upon a change in control (including the merger); |
• | Unvested RSU awards deferred by non-employee members of the CMC board of directors under the Directors’ Deferred Compensation Plan will vest and become immediately payable to the
director on the effective date of a change in control; |
• | In connection with the merger, CMC has established a retention program for certain CMC employees to promote retention and to incentivize efforts to consummate the merger and effectuate the integration and conversion. Certain of CMC’s executive officers have been selected to participate in this retention program; |
• | Certain of CMC’s executive officers may remain employed as members of the management team of Entegris after the effective time of the merger, though no such determinations have been made; and |
• | CMC’s
directors and executive officers are entitled to continued indemnification and directors’ and officers’ liability insurance and fiduciary liability insurance coverage under the merger agreement. |
• | the adoption of the merger agreement at the special meeting by the affirmative vote of holders of a majority of the outstanding shares of CMC common stock entitled to vote on such matter, which is referred to as the CMC stockholder approval; |
• | (i) the waiting period applicable to the consummation of the merger under the HSR Act will have expired or terminated and (ii) all authorizations or consents to be obtained from a governmental entity with respect to the merger for each requisite regulatory approval will have been obtained or deemed to have
been obtained; |
• | no applicable law and no judgment, preliminary, temporary or permanent, or other legal restraint or prohibition and no binding order or determination by any governmental entity will be in effect that prevents, makes illegal, restrains, enjoins or otherwise prohibits the consummation of the merger; |
• | the SEC will have declared the registration statement effective under the Securities Act, no stop order or similar restraining order by the SEC suspending the effectiveness of the registration statement will be in effect and no proceedings for that purpose will be pending before the SEC; |
• | the
shares of Entegris common stock to be issued pursuant to the merger will have been approved for listing on the NASDAQ, subject to official notice of issuance; |
• | the accuracy of the representations and warranties of the other party to the extent required under the merger agreement; |
• | the other party’s performance of, in all material respects, its obligations under the merger agreement required to be performed at or before the closing date; and |
• | the receipt by such party of a certificate of the chief executive officer, chief financial
officer or general counsel of the other party certifying that the conditions in the immediately two preceding bullets have been satisfied. |
• | solicit, seek, initiate or knowingly facilitate or knowingly encourage (including by way of furnishing any non-public information) any inquiries regarding, or the making of, or any submission or announcement of a proposal or offer that constitutes, or would reasonably be expected to lead to, any acquisition proposal (as
defined in the section entitled “The Merger Agreement—No Solicitation of Acquisition Proposals” beginning on page 80); |
• | engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any non-public information in connection with or for the purpose of encouraging or facilitating, any acquisition proposal or any inquiry or proposal that could reasonably be expected to lead to an acquisition proposal; |
• | approve, endorse, recommend, submit to stockholders or declare advisable any acquisition proposal; |
• | enter
into any letter of intent, term sheet, memorandum of understanding, acquisition agreement, merger agreement, option agreement or other similar agreement (other than an acceptable confidentiality agreement with terms and conditions customary for transactions of such type that is no less favorable in the aggregate to CMC than the confidentiality agreement, dated as of November 30, 2021, between Entegris and CMC, which is referred to as an acceptable confidentiality agreement), which is referred to as an alternative acquisition agreement, relating to any acquisition proposal; or |
• | release or terminate or permit the release of any person from, or termination of, or waive or modify or permit the waiver or modification of any provision of, or fail to enforce or cause not to be
enforced, any confidentiality, standstill or similar agreement to which CMC or any of its subsidiaries is a party except, to the extent that the failure to so release, terminate, waive, modify or fail to enforce would be inconsistent with the fiduciary duties of the CMC under applicable law. |
• | contact the person or group of persons who has made such acquisition proposal in order to clarify terms for the sole purpose of the CMC board of directors informing itself about
such acquisition proposal; |
• | furnish, pursuant to an acceptable confidentiality agreement, information (including non-public information) with respect to CMC and its subsidiaries to the person or group of persons who has made such acquisition proposal; provided that CMC will promptly (and in any event within 24 hours) provide or make available to Entegris any non-public information concerning CMC or its subsidiaries that is provided or made available to any person given such access which was not previously provided to Entegris or its representatives; and |
• | engage
in or otherwise participate in discussions or negotiations with the person or group of persons making such acquisition proposal, |
• | there is an outside date termination event; |
• | there
is a regulatory restraint termination event; or |
• | there is a CMC no vote termination event; |
• | before receipt of the CMC stockholder approval, if: |
○ | the CMC board of directors has made an adverse recommendation change; |
○ | CMC has breached its obligations under the merger agreement not to solicit or encourage acquisition proposals; |
○ | CMC
fails to call a stockholder meeting for the purpose of obtaining the CMC stockholder approval; or |
○ | CMC submits an acquisition proposal other than the merger agreement to CMC stockholders at a meeting of such stockholders; or |
• | if CMC has breached any representation, warranty, covenant or agreement contained in the merger agreement, or if any representation or warranty of CMC has become untrue, in each case, such that the |
• | If Entegris or Merger Sub has breached any representation, warranty, covenant or agreement contained in the merger agreement, or if any representation or warranty of Entegris or Merger Sub has become untrue, in each case, such that the conditions set forth in the provisions of the merger agreement related to Entegris’ and Merger Sub’s representations and warranties and Entegris’ and Merger Sub’s performance of, in all material respects, their obligations under the merger agreement could not be satisfied as of the closing date; provided, however, that CMC may not terminate the merger agreement due to such breach or failure to be true unless any such breach or failure to be true has not been cured within 30 days after written notice by CMC to Entegris
informing Entegris of such breach or failure to be true, except that no cure period will be required for a breach which by its nature cannot be cured before the outside date; and provided, further, that CMC may not terminate the merger agreement pursuant to such breach or failure to be true if CMC is then in breach of the merger agreement in any material respect; or |
• | before the CMC stockholder approval, (i) if the CMC board of directors authorizes CMC to terminate the merger agreement to enter into an alternative acquisition agreement with respect to a superior proposal in accordance with the terms of the merger agreement, (ii) substantially concurrent with the termination of the merger agreement, CMC enters into such alternative acquisition agreement and (iii) CMC pays to Entegris in immediately available funds the CMC
termination fee in accordance with the relevant provision of the merger agreement. |
• | Separate historical financial statements of Entegris as of and for the fiscal year ended December 31, 2020, the related notes included in Entegris’ Annual Report on Form 10-K for the year ended December 31, 2020, as well as the separate historical financial statements of Entegris as of and for the nine months ended October 2, 2021, and the related notes included in Entegris’ Quarterly Report on Form 10-Q for the quarter ended October 2, 2021. |
• | Separate
historical financial statements of CMC as of and for the fiscal year ended September 30, 2020 and the related notes included in CMC’s Annual Report on Form 10-K for the year ended September 30, 2020, the separate historical financial statements of CMC as of and for the fiscal year ended September 30, 2021 and the related notes included in CMC’s Annual Report on Form 10-K for the year ended September 30, 2021, the separate historical financial statements of CMC as of and for the fiscal quarter ended December 31, 2019 and the related notes included in CMC’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2019, as well as the separate historical financial statements
of CMC as of and for the fiscal quarter ended December 31, 2020 and the related notes included in CMC’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2020. |
| | Year
ended | | | Nine-months ended | |
Pro
forma condensed combined statement of operations data: | | | | | ||
Net
sales | | | $2,974,110 | | | $2,568,110 |
Net
income (loss) | | | 123,896 | | | 18,904 |
Basic
earnings per share | | | 0.84 | | | 0.13 |
Diluted
earnings per share | | | 0.82 | | | 0.13 |
| | As of | |
Pro
forma condensed combined balance sheet data: | | | |
Total assets | | | $10,231,448 |
Total
liabilities | | | 6,870,608 |
Total equity | | | 3,360,840 |
| | Year
ended December 31, 2020 | | | Nine-months ended October 2, 2021 | |||||||||||||||||||
| | Entegris
- Historical | | | CMC - Historical | | | Pro
forma Combined | | | CMC Equivalent Pro forma2 | | | Entegris
- Historical | | | CMC - Historical | | | Pro
forma Combined | | | CMC Equivalent Pro forma2 | |
Income
(loss) from continuing operations per common share attributable to common stockholders (basic) | | | $2.19 | | | $4.66 | | | $0.84 | | | $0.38 | | | $2.15 | | | $(3.44) | | | $0.13 | | | $0.06
|
Income (loss) from continuing operations per common share attributable to common stockholders (diluted) | | | $2.16 | | | $4.61 | | | $0.82 | | | $0.37 | | | $2.13 | | | $(3.44) | | | $0.13 | | | $0.06
|
Cash dividends per share1 | | | $0.32 | | | $1.76 | | | $0.32 | | | $0.14 | | | $0.24 | | | $1.38 | | | $0.24 | | | $0.11
|
Book value per share3 | | | $10.23 | | | $38.07 | | | $21.18 | | | $9.55 | | | $11.90 | | | $30.18 | | | $22.67 | | | $10.21 |
(1) | Pro forma combined amounts are the same as Entegris’ historical cash dividends per share under the assumption that there is no change to Entegris’ dividend policy as a result of the merger. |
(2) | CMC’s pro forma equivalent per share amounts were calculated by multiplying Entegris' pro forma combined per share amounts by the Exchange Ratio. |
(3) | Amount is calculated by dividing stockholders’ equity by common shares outstanding. |
| | Entegris
Common Stock | | | CMC Common Stock | |||||||||||||
| | High | | | Low | | | Dividends | | | High | | | Low | | | Dividends | |
2018 | | | | | | | | | | | | | ||||||
First
Calendar Quarter | | | $37.85 | | | $29.65 | | | $0.07 | | | $115.60 | | | $93.57 | | | $0.40 |
Second
Calendar Quarter | | | $38.85 | | | $32.20 | | | $0.07 | | | $119.27 | | | $98.14 | | | $0.40 |
Third
Calendar Quarter | | | $37.90 | | | $28.70 | | | $0.07 | | | $123.06 | | | $101.66 | | | $0.40 |
Fourth
Calendar Quarter | | | $30.29 | | | $24.44 | | | $0.07 | | | $109.21 | | | $84.22 | | | $0.40 |
2019 | | | | | | | | | | | | | ||||||
First
Calendar Quarter | | | $37.73 | | | $27.43 | | | $0.07 | | | $115.30 | | | $88.16 | | | $0.42 |
Second
Calendar Quarter | | | $41.99 | | | $34.30 | | | $0.07 | | | $127.18 | | | $97.47 | | | $0.42 |
Third
Calendar Quarter | | | $48.01 | | | $35.48 | | | $0.08 | | | $145.11 | | | $109.52 | | | $0.42 |
Fourth
Calendar Quarter | | | $51.21 | | | $45.56 | | | $0.08 | | | $158.65 | | | $123.39 | | | $0.42 |
2020 | | | | | | | | | | | | | ||||||
First
Calendar Quarter | | | $58.47 | | | $39.03 | | | $0.08 | | | $167.20 | | | $89.07 | | | $0.44 |
Second
Calendar Quarter | | | $64.51 | | | $41.41 | | | $0.08 | | | $158.82 | | | $100.17 | | | $0.44 |
Third
Calendar Quarter | | | $74.34 | | | $57.65 | | | $0.08 | | | $168.97 | | | $133.39 | | | $0.44 |
Fourth
Calendar Quarter | | | $99.03 | | | $74.72 | | | $0.08 | | | $169.04 | | | $135.00 | | | $0.44 |
2021 | | | | | | | | | | | | | ||||||
First
Calendar Quarter | | | $113.56 | | | $93.99 | | | $0.08 | | | $180.91 | | | $146.01 | | | $0.46 |
Second
Calendar Quarter | | | $123.26 | | | $101.61 | | | $0.08 | | | $196.90 | | | $144.36 | | | $0.46 |
Third
Calendar Quarter | | | $134.83 | | | $111.63 | | | $0.08 | | | $150.62 | | | $120.37 | | | $0.46 |
Fourth
Calendar Quarter | | | $154.75 | | | $120.15 | | | $0.08 | | | $195.50 | | | $119.55 | | | $0.46 |
| | Entegris
Common Stock | | | CMC Common Stock | | | Implied
Per Share Value of CMC Merger Consideration | |
| | $143.22 | | | $145.97 | | | $197.53 | |
| | $116.24 | | | $176.32 | | | $185.38 |
• | each company may experience negative reactions from the financial markets, including negative impacts on its stock price; |
• | each company may experience negative reactions from its suppliers and customers; |
• | current
and prospective employees of Entegris and CMC may experience uncertainty about their future roles with Entegris following the merger, which might adversely affect Entegris’ or CMC’s abilities to retain key managers and other employees; |
• | each company will be required to pay their respective costs relating to the merger, such as financial advisory, legal, financing and accounting costs and associated fees and expenses, whether or not the merger is completed; |
• | the merger agreement places certain restrictions on the conduct of each company’s business before completion of the merger and such restrictions, the waiver of which is subject to the consent of the other company (not to
be unreasonably withheld, conditioned or delayed), which may prevent Entegris or CMC from taking certain other specified actions during the pendency of the merger (see the section entitled “The Merger Agreement—Conduct of Business Before the Effective Time” beginning on page 76 for a description of the restrictive covenants applicable to Entegris and CMC); and |
• | matters relating to the merger (including integration planning) will require substantial commitments of time and resources by Entegris’ senior management and CMC’s senior management, which otherwise could have been devoted to day-to-day operations or to other opportunities that may have been beneficial to Entegris or CMC, as applicable, as an independent company. |
• | solicit, seek, initiate or knowingly facilitate or knowingly encourage (including by way of furnishing any non-public information) any inquiries regarding, or the making of, or any submission or announcement of a proposal or offer that constitutes, or would
reasonably be expected to lead to, any acquisition proposal (as defined below); |
• | engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any non-public information in connection with or for the purpose of encouraging or facilitating, any acquisition proposal or any inquiry or proposal that could reasonably be expected to lead to an acquisition proposal; |
• | approve, endorse, recommend, submit to stockholders or declare advisable any acquisition proposal; |
• | enter into
any letter of intent, term sheet, memorandum of understanding, acquisition agreement, merger agreement, option agreement or other similar agreement (other than an acceptable confidentiality agreement with terms and conditions customary for transactions of such type that is no less favorable in the aggregate to CMC than the confidentiality agreement, dated as of November 30, 2021, between Entegris and CMC, which is referred to as an acceptable confidentiality agreement), which is referred to as an alternative acquisition agreement, relating to any acquisition proposal; or |
• | release or terminate or permit the release of any person from, or termination of, or waive or modify or permit the waiver or modification of any provision of, or fail to enforce or cause not to be enforced,
any |
• | combining the companies’ operations and corporate functions; |
• | combining the businesses of Entegris and CMC and meeting the capital requirements of Entegris following the merger, in a manner
that permits Entegris to achieve any cost savings or revenue synergies anticipated to result from the merger, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all; |
• | integrating personnel from the two companies; |
• | integrating the companies’ technologies; |
• | integrating and unifying the offerings and services available to customers; |
• | identifying
and eliminating redundant and underperforming functions and assets; |
• | harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; |
• | maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors; |
• | addressing possible differences in business backgrounds, corporate cultures and management philosophies; |
• | consolidating
the companies’ administrative and information technology infrastructure; |
• | coordinating distribution and marketing efforts; |
• | managing the movement of certain positions to different locations; |
• | coordinating geographically dispersed organizations; and |
• | effecting actions that may be required in connection with obtaining the requisite regulatory approvals. |
• | increasing its vulnerability to changing economic, regulatory and industry conditions; |
• | limiting
its ability to compete and its flexibility in planning for, or reacting to, changes in its business and the industry; |
• | limiting its ability to pay dividends to its stockholders; |
• | limiting its ability to borrow additional funds; and |
• | increasing its interest expense and requiring it to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing funds available for working capital, capital expenditures, acquisitions, share repurchases, dividends and other purposes. |
• | Entegris may not have enough cash to pay such dividends or to repurchase shares due to its cash requirements, capital spending plans, cash flow or financial position; |
• | decisions on whether, when and in which amounts to make any future distributions will remain at all times entirely at the discretion of Entegris’ board of directors, which could change its dividend
practices at any time and for any reason; |
• | Entegris’ desire to maintain or improve the credit ratings on its debt; |
• | the amount of dividends that Entegris may distribute to its stockholders is subject to restrictions under Delaware law and is limited by restricted payment and leverage covenants in both companies’ credit facilities and indentures and, potentially, the terms of any future indebtedness that Entegris may incur; and |
• | certain limitations
on the amount of dividends subsidiaries of Entegris can distribute to Entegris, as imposed by state law, regulators or agreements. |
• | to adopt the merger agreement, which proposal is referred to as the merger agreement proposal; |
• | to approve, on a non-binding, advisory basis, the merger-related compensation that will or may be paid to CMC’s named executive officers in connection with the transactions contemplated by the merger agreement, which proposal is referred to as the compensation proposal; and |
• | to
approve the adjournment of the special meeting to solicit additional proxies if there are not sufficient votes at the time of the special meeting to approve the merger agreement proposal or to ensure that any supplement or amendment to the accompanying proxy statement/prospectus is timely provided to CMC stockholders, which proposal is referred to as the adjournment proposal. |
• | Proposal
1: “FOR” the merger agreement proposal; |
• | Proposal 2: “FOR” the compensation proposal; and |
• | Proposal 3: “FOR” the adjournment proposal. |
Proposal | | | Votes
Necessary | |||
Proposal 1 | | | merger agreement proposal | | | Approval
requires the affirmative vote of a majority of the outstanding shares of CMC common stock entitled to vote on the merger agreement proposal. A failure to vote, a broker non-vote or an abstention will have the same effect as a vote “AGAINST” the merger agreement proposal. |
Proposal 2 | | | compensation proposal | | | Approval
requires the affirmative vote of a majority of the votes cast at the special meeting on the compensation proposal (meaning the number of votes cast “FOR” this proposal must exceed the votes cast “AGAINST”). A failure to vote, a broker non-vote or an abstention will have no effect on the outcome of the compensation proposal. |
Proposal 3 | | | adjournment proposal | | | Approval
requires the affirmative vote of a majority of the votes cast at the special meeting on the adjournment proposal (meaning the number of votes cast “FOR” this proposal must exceed the votes cast “AGAINST”). A failure to vote, a broker non-vote or an abstention will have no effect on the outcome of the adjournment proposal. |
• | By the Internet: If you are a stockholder of record, you can vote at www.proxyvote.com and follow the instructions, 24 hours a day, seven days a week. You will need the 16-digit control number included on your proxy card or your paper voting instruction form (if you received a paper copy of the proxy materials). |
• | By
Telephone: If you are a stockholder of record, you can vote using a touch-tone telephone by calling 1-800-690-6903 and follow the recorded instructions, 24 hours a day, seven days a week. You will need the 16-digit control number included on your proxy card or your paper voting instruction form (if you received a paper copy of the proxy materials). |
• | By Mail: If you have received a paper copy of the proxy materials by mail, you may complete, sign, date and return by mail the paper proxy card or voting instruction form sent to you in the envelope provided to you with your proxy materials or voting instruction form. |
• | sending a signed written notice of revocation to CMC’s corporate secretary; |
• | voting again by the Internet or telephone at a later time before the closing of the voting facilities at 11:59 p.m., Eastern Time, on the date before the special meeting; |
• | submitting a properly signed proxy card with a later date; or |
• | attending
virtually and voting at the special meeting via the special meeting website. |
• | determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, CMC and its stockholders; |
• | approved and declared advisable the merger agreement, the merger and the other transactions contemplated by the merger agreement; |
• | directed the merger agreement be submitted for adoption at a meeting of CMC stockholders; and |
• | recommended
that CMC stockholders vote in favor of the adoption of the merger agreement. |
• | Premium to Current Equity Price. The merger consideration to be paid by Entegris of $133 in cash and 0.4506 shares of Entegris common stock, which implied an equity value of $197.11 per share of CMC common stock, based on Entegris’ closing stock price on December 13, 2021, the last full trading day before the date of the merger agreement, and would provide CMC stockholders with the opportunity to receive approximately (1) a 36% premium over the closing price of $144.99 per share of CMC common stock on December 13, 2021, the last full trading day before the date of the merger agreement, (2) a 39% premium over the 10-day volume weighted average price of $141.45 and (3) a 40% premium over the 30-day volume weighted
average price of $140.94. The merger consideration also implied an equity value of $200.00 per share of CMC common stock based on the five-day average daily volume weighted average trading price of Entegris stock ending on December 13, 2021. |
• | Liquidity and Certainty of Value. A significant portion of the merger consideration to be paid to CMC stockholders will consist of cash, which will provide immediate liquidity and certainty of value to CMC stockholders, and the remainder of the merger consideration to be paid to CMC stockholders will consist of freely tradable Entegris common stock. |
• | Future
Appreciation. The merger and the merger consideration offered in connection therewith will provide CMC stockholders with ownership of approximately 9% of Entegris following the consummation of the transaction based on fully diluted shares of CMC and Entegris currently outstanding and, therefore, allow CMC stockholders to participate through the stock portion of the consideration in any appreciation in the equity value of Entegris, including as a result of the expected synergies resulting from the merger. |
• | Strategic Benefits. The proposed transaction provides compelling strategic and financial benefits in which CMC stockholders would participate through the stock portion of the merger consideration, including the expectation that the transaction will (1) deepen Entegris’ capabilities in the high value CMP (chemical-mechanical planarization) area and create a leader in electronic chemicals with an enhanced value proposition to customers through a broader portfolio of solutions and enhanced operating capabilities,
(2) increase the scale of Entegris operationally including an acceleration of innovation capabilities through greater research and development scale and an expanded intellectual property portfolio, (3) increase the scale of Entegris financially, including increased cash flow generation which will enable investments in growth and disciplined deleveraging, (4) create meaningful potential value from combination benefits including run-rate cost synergies of $75 million, $40 million in capital expenditure synergies within 12 to 18 months of closing and growth synergy opportunities through co-optimized solutions, cross-selling opportunities and stronger customer response and collaboration, (5) improve the positioning of Entegris to capture growth opportunities in a period of elevated investment in the semiconductor sector, (6) improve the diversification of the combined business with more growth vectors, including an increased content opportunity per wafer and (7) deliver
greater opportunities for employee development given the larger organization. |
• | Cultural Alignment. The cultural alignment between CMC and Entegris, including shared values and commitment to integrity, operational excellence, customer satisfaction, innovation and stockholder value. |
• | Entegris’ Business Condition and Prospects. The information and discussions with CMC’s senior management and outside advisors regarding their diligence review of Entegris’ business, assets, financial condition, results of operations, current business strategy and prospects, including the historical operational and market performance of Entegris, the
size and scale of Entegris and the expected pro forma effect of the proposed merger on Entegris. |
• | Business Environment. The current and prospective business environment in which CMC and Entegris operate, including international, national and local economic conditions, the competitive and regulatory environment, and the likely effect of these factors on CMC and Entegris. |
• | Fairness Opinion. the analyses and presentations of Goldman Sachs and its oral opinion, subsequently confirmed in writing, to the CMC board of directors that, as of the date of the opinion, and based upon and subject to the assumptions, procedures, factors, qualifications
and limitations set forth in its written opinion, the merger consideration to be paid to CMC stockholders pursuant to the merger agreement was fair, from a financial point of view, to CMC stockholders, as more fully described under the section entitled “—Opinion of CMC’s Financial Advisor” beginning on page 57 and the full text of the written opinion of Goldman Sachs, which is attached as Annex B to this proxy statement/prospectus; |
• | Extensive Negotiations. The merger consideration reflected extensive negotiations between CMC and Entegris and their respective advisors, and the belief of the CMC board of directors that the merger consideration represents the best proposal and economic value available to CMC’s stockholders. |
• | Regulatory
Matters. The CMC board of directors’ view, after consultation with CMC’s senior management and Wachtell Lipton, concerning the likelihood that regulatory approvals and clearances necessary to consummate the merger would be obtained. |
• | Terms of the Merger Agreement. The review by the CMC board of directors with its advisors of the structure of the proposed merger and the financial and other terms of the merger agreement, including the parties’ representations, warranties and covenants, the conditions to their respective obligations and the termination provisions as well as the likelihood of consummation of the proposed transactions and the evaluation of the CMC board of directors of the likely time period necessary to complete the merger. The CMC board of directors also considered the following
specific aspects of the merger agreement: |
○ | the limited number of closing conditions included in the merger agreement, including the absence of a financing condition or similar contingency that is based on Entegris’ ability to obtain financing, the exceptions to the events that would constitute a material adverse effect on CMC for purposes of the merger agreement, as well as the likelihood of satisfaction of all conditions to completion of the transactions; |
○ | the ability of CMC stockholders to approve or reject the merger by voting on the adoption of the merger agreement; |
○ | the requirement to use reasonable best efforts to obtain approvals or clearances by applicable competition authorities, including by divesting assets, holding separate
assets or otherwise taking any other action that would limit CMC’s or Entegris’ freedom of action, except to the extent that such action would, individually or in the aggregate, reasonably be expected to have a material adverse effect on Entegris and its subsidiaries, taken as a whole after giving effect to the merger, but measured on a scale relative to the size of CMC and its subsidiaries, taken as a whole, prior to the merger; |
○ | that the merger agreement permits CMC to pay its dividend declared on December 7,
2021, to declare a quarterly dividend of $0.46 per share in March 2022 and, if the closing does not occur by December 14, 2022, to declare quarterly dividends of $0.46 per share in a manner consistent with CMC’s past practice; |
○ | the fact that the CMC board of directors has the right, after complying with specified covenants and prior to the CMC stockholder approval being obtained, to change its recommendation to the CMC stockholders that they vote in favor of the adoption of the merger agreement if the CMC board of directors determines in good faith after consultation with CMC’s outside legal counsel
and financial advisors, that as a result of a superior proposal or certain intervening events the failure to change its recommendation would be inconsistent with its fiduciary duties to under applicable law; and |
○ | CMC’s right to terminate the merger agreement under certain circumstances, including in order to accept and enter into a definitive agreement with respect to an unsolicited superior offer in certain circumstances, subject to providing Entegris an opportunity to match such proposal prior to taking such action, and payment to Entegris of a termination fee of $187 million if the merger agreement is so terminated, which amount the CMC board
of directors believes to be reasonable under the circumstances and taking into account the range of such termination fees in similar transactions. |
• | the risk that Entegris’ financial performance may not meet CMC’s expectations; |
• | the difficulties and management challenges inherent in completing the merger
and integrating the business, operations and workforce of CMC and Entegris and the risk of not capturing all the anticipated cost synergies and the risk that other anticipated benefits of the merger might not be realized; |
• | the amount of time it could take to complete the merger, including that completion of the merger depends on factors outside of CMC’s or Entegris’ control, and the risk that the pendency of the merger for an extended period of time following the announcement of the execution of the merger agreement could have an adverse impact on CMC or Entegris, including their respective customer, supplier and other business relationships; |
• | the possible diversion of management
attention for an extended period of time during the pendency of the merger; |
• | the risk that, despite the retention efforts of CMC and Entegris prior to the consummation of the merger, CMC and Entegris may lose key personnel; |
• | the provisions of the merger agreement that prohibit CMC from soliciting or entertaining other acquisition offers and the potential payment to Entegris by CMC of a termination fee of $187 million, as described in the section entitled “The Merger Agreement—Termination Fees” beginning on page 94; |
• | that
certain provisions of the merger agreement, including the $187 million termination fee, may have the effect of discouraging alternative proposals involving CMC; |
• | the potential for litigation relating to the proposed merger and the associated costs, burden and inconvenience involved in defending those proceedings; |
• | the restrictions in the merger agreement on the conduct of CMC’s business during the period between execution of the merger agreement and the consummation of the merger, including that CMC must conduct its business only in the ordinary course, subject to specific limitations, which could negatively impact CMC’s ability to pursue certain business opportunities or strategic transactions; |
• | the
risk that regulatory agencies may delay, object to and challenge the merger or may impose terms and conditions in order to resolve those objections that adversely affect the financial results of CMC or Entegris; see the section entitled “—Regulatory Approvals” beginning on page 66; |
• | the fact that the exchange ratio for the stock component of the merger consideration is fixed under the merger agreement, meaning that the value of the merger consideration, consisting of $133 in cash and 0.4506 shares of Entegris common stock for each share of CMC common stock, upon consummation of the merger might be more or less than or the same as the value of such consideration on the date of the execution of the merger agreement; and |
• |
• | the merger agreement; |
• | annual reports to stockholders and Annual Reports on Form 10-K of
CMC for the five fiscal years ended September 30, 2021; |
• | annual reports to stockholders and Annual Reports on Form 10-K of Entegris for the five fiscal years ended December 31, 2020; |
• | certain interim reports to stockholders and Quarterly Reports on Form 10-Q of CMC; |
• | certain other communications from CMC and Entegris to their respective stockholders; |
• | certain
publicly available research analyst reports for CMC and Entegris; and |
• | certain internal financial analyses and forecasts for CMC, prepared by CMC’s senior management and approved for Goldman Sachs’ use by CMC, which are referred to as the CMC prospective financial information (See “Certain Unaudited Prospective Financial Information” beginning on page 63 for more information). |
• | The premium represented by the implied merger consideration value of $197.11 per share of CMC common stock relative to: |
○ | $144.99, the closing price of the shares of CMC common stock on December 13, 2021, which is referred to as the CMC undisturbed closing price; |
○ | $141.45, the average closing price of the shares of CMC common stock over the 10-trading-day period ended
December 13, 2021, which is referred to as the CMC 10-day average; |
○ | $140.94, the average closing price of the shares of CMC common stock over the 30-trading-day period ended December 13, 2021, which is referred to as the CMC 30-day average; |
○ | $196.90, the highest daily closing price of the shares of CMC common stock over the 52-week period ended December 13, 2021, which is referred to as the CMC 52-week high; |
○ | $119.55,
the lowest daily closing price of the shares of CMC common stock over the 52-week period ended December 13, 2021, which is referred to as the CMC 52-week low; |
○ | $150.10, the average closing price of the shares of CMC common stock over the prior one calendar year period ended December 13, 2021, which is referred to as the CMC one year average; |
○ | $136.76, the average closing price of the shares of CMC common stock over the prior three calendar year
period ended December 13, 2021 (which is referred to as the CMC three year average; and |
○ | $118.49, the average closing price of the shares of CMC common stock over the prior five calendar year period ended December 13, 2021, which is referred to as the CMC five year average. |
CMC Reference Share Price | | | Implied
Premium Represented by the Implied Merger Consideration Value of $197.11 per share of CMC common stock |
Undisturbed closing price of $144.99 | | | 36% |
10-day
Average of $141.45 | | | 39% |
30-day Average of $140.94 | | | 40% |
52-week
high of $196.90 | | | 0% |
52-week low of $119.55 | | | 65% |
One-Year
Average | | | 31% |
Three Year Average | | | 44% |
Five
Year Average | | | 66% |
Implied Transaction Multiples | | | Metric (Sep YE) | | | Multiples |
EV
/ LTM EBITDA | | | $358 | | | 18.1x |
EV
/ 2022E EBITDA (IBES estimates) | | | $369 | | | 17.6x |
EV
/ 2022E EBITDA (CMC prospective financial information) | | | $380 | | | 17.1x |
Announcement Date | | | Acquiror | | | Target |
November
2021 | | | DuPont de Nemours, Inc. | | | Rogers Corporation |
September
2021 | | | MKS Instruments, Inc. | | | Atotech Limited |
March
2021 | | | DuPont de Nemours, Inc. | | | Laird Performance Materials |
April
2019 | | | Merck KGaA | | | Versum Materials, Inc. |
August
2018 | | | CMC Materials Inc. | | | KMG Chemicals, Inc. |
October
2016 | | | Carlyle Group Inc. | | | Atotech Limited |
June
2016 | | | BASF SEs | | | Albemarle Corporation (Chemetall Business) |
July
2015 | | | Platform Specialty Products Corporation | | | Alent plc |
February
2014 | | | Entegris, Inc. | | | ATMI, Inc. |
December
2013 | | | Merck KGaA | | | Az Electronic Materials SA |
October
2013 | | | Platform Acquisition Holdings Limited | | | MacDermid, Incorporated |
$
in millions | | | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E |
Revenue | | | $1,301 | | | $1,456 | | | $1,618 | | | $1,751 | | | $1,865 |
Adjusted
EBITDA(1) | | | $380 | | | $448 | | | $536 | | | $610 | | | $661 |
Capital
Expenditure | | | $(101) | | | $(93) | | | $(75) | | | $(78) | | | $(64) |
Unlevered
Free Cash Flow(2) | | | $208 | | | $272 | | | $341 | | | $403 | | | $459 |
Dividends | | | $55 | | | $58 | | | $61 | | | $64 | | | $68 |
(1) | Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for one-time charges. |
(2) | Unlevered free cash flow is defined as Adjusted EBITDA subtracting the impact of cash taxes, and capital expenditures and adjusted for changes in net working capital. Unlevered free cash flow estimates were approved for use by Goldman Sachs in connection with performing its financial analysis and opinion by CMC’s senior management, as described in more detail in the section entitled “The Merger—Opinion of CMC’s Financial Advisor” beginning on page 57.
|
• | specify with respect to certificates representing CMC common stock, that delivery will be effected, and risk of loss and title to the certificates will pass, only upon proper delivery of the certificates to the exchange agent, and with respect to book-entry shares, that delivery will be effected upon the receipt of an “agent’s message” by the exchange agent; and |
• | be in customary form (which will include an accompanying
IRS Form W-9 or the applicable IRS Form W-8) and have such other provisions as Entegris may specify, subject to CMC’s reasonable approval, and will be prepared before the closing, together with instructions thereto. |
• | organization, good standing and qualification to do business; |
• | corporate authority and power with respect to the execution, delivery and performance of the merger agreement and to consummate the merger and the other transactions contemplated by the merger agreement, subject only, in the case of the merger, to the CMC stockholder approval; |
• | capital structure; |
• | the
filings with governmental entities needed in connection with the execution, delivery and performance of the merger agreement or the consummation of the merger and the other transactions contemplated by the merger agreement; |
• | the absence of violations of, or conflicts with, such company’s or its subsidiaries’ organizational documents, applicable law and certain contracts as a result of the execution, delivery and performance of the merger agreement and the consummation of the merger and the other transactions contemplated by the merger agreement; |
• | the
proper filing of reports with the SEC since October 1, 2018, in the case of CMC, and January 1, 2019, in the case of Entegris, the accuracy of the information contained in those reports, compliance with the requirements of certain laws and the design of its internal disclosure controls and procedures; |
• | the compliance with GAAP and SEC accounting rules and regulations with respect to financial statements included in or incorporated by reference in its SEC filings; |
• | the absence of any event that would be reasonably expected to
have a material adverse effect on such party since September 30, 2021, in the case of CMC, and December 31, 2020, in the case of Entegris; |
• | conduct of business in the ordinary course since September 30, 2021 to December 14, 2021 (the date of the merger agreement), in the case of CMC, and since December 31, 2020 to December 14, 2021 (the date of the merger agreement), in the case of Entegris; |
• | absence
of undisclosed liabilities; |
• | absence of certain litigation and governmental orders; |
• | compliance with certain laws and regulations and such party’s permits; |
• | information supplied by such party for inclusion or incorporation by reference in the registration statement
on Form S-4 to be filed with the SEC by Entegris in connection with the issuance of shares of Entegris common stock to CMC stockholders pursuant to the merger agreement; and |
• | the absence of other representations and warranties. |
• | such party’s subsidiaries; |
• | intellectual
property; |
• | environmental matters; |
• | certain material contracts; |
• | labor matters; |
• | employee benefits matters, including matters related to employee benefit plans; |
• | real
and personal property; |
• | tax matters; |
• | fees payable to brokers and financial advisors in connection with the merger; |
• | the CMC board of directors’ receipt of an opinion from Goldman Sachs that the merger consideration is fair from a financial point of view to holders of CMC common stock; |
• | inapplicability to the merger of state takeover statutes and anti-takeover provisions in such
party’s organizational documents; |
• | insurance; |
• | certain business practices; |
• | sanctions and customs and trade laws; |
• | conflict minerals; and |
• | significant customers and suppliers. |
• | ownership of Merger Sub; |
• | the sufficiency of cash, available lines of credit or other sources of immediately available funds to consummate the merger and to pay the merger consideration to the exchange agent and any other amounts required to be paid by Entegris in connection with the transactions contemplated by the merger agreement to which Entegris is a party and to pay all related fees and expenses of Entegris and Merger Sub; |
• | solvency; and |
• | no
ownership of CMC common stock. |
• | changes generally affecting
the industries in which such party and its subsidiaries operate; |
• | general economic or political conditions (or changes in such conditions) or securities, credit, financial or other capital market conditions (or changes in such conditions), in each case, in the United States or any foreign jurisdiction in which such party or any of its subsidiaries operate, including changes in interest or exchange rates; |
• | changes in applicable law or GAAP (or authoritative interpretation thereof) or in accounting
standards, any changes in the interpretation or enforcement of any of the foregoing; |
• | changes in general legal, regulatory or political conditions, in each case occurring after the date of the merger agreement; |
• | changes solely attributable to the announcement or pendency of the merger agreement, including the direct impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or other third parties and including any litigation arising in connection with or relating to the merger agreement to the extent addressed in accordance with the stockholder litigation procedures set forth in the merger agreement (provided that,
the foregoing will not apply with respect to any representation or warranty that is intended to address the consequences of the execution or delivery of the merger agreement, the performance of obligations hereunder or the consummation of the transactions contemplated thereby); |
• | acts of war (whether or not declared), sabotage or terrorism, or any escalation or worsening of any such acts of war (whether or not declared), sabotage or terrorism; |
• | volcanoes, tsunamis, pandemics (including COVID-19 and any variants/mutations thereof or any COVID-19 Measures), epidemics, earthquakes, floods, storms, hurricanes, tornados or other natural disasters; |
• | any
action taken by such party or its subsidiaries that is specifically required by the merger agreement or with the prior written consent or at the direction of Entegris in accordance with the merger agreement, or the failure to take any action by such party or its subsidiaries if that action is prohibited by the merger agreement; |
• | changes resulting or arising from the identity of, or any facts or circumstances relating to Entegris or any of its affiliates; |
• | changes, in and of itself, in the market
price or trading volume of such party’s common stock; or |
• | any failure, in and of itself, by such party to meet any internal or public projections, forecasts, guidance, estimates, milestones, budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position (it being understood that the tenth and eleventh exceptions listed will not prevent or otherwise affect a determination that the underlying facts or occurrences giving rise or contributing to any such change or failure referred to therein (to the extent not otherwise falling within any of the first through ninth exceptions listed) is, may be taken into account in determining, contributed to or may contribute to, a material adverse effect with respect to such party). |
• | amend CMC’s second amended and restated articles of incorporation, which is referred to as the CMC charter, or CMC’s amended and restated bylaws, which is referred to as the CMC bylaws, or amend in any respect adversely impacting Entegris or Merger Sub the comparable organizational documents of any subsidiary of CMC, or enter into any written agreement with any of CMC’s stockholders in their capacity
as such; |
• | (A) issue, sell, encumber (other than with permitted liens) or grant any shares of its capital stock or other equity or voting interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interests, except for any issuance, sale or grant (1) solely between or among CMC’s wholly owned subsidiaries or (2) required pursuant to the exercise or settlement of awards under the Company’s ESPP or CMC Equity
Awards as outstanding on December 13, 2021, in accordance with the terms of the applicable CMC Stock Plan in effect on December 13, 2021, or granted after December 13, 2021, to the extent permitted by the merger agreement, (B) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests, including pursuant to CMC’s currently in effect CMC common stock repurchase program, except (1) in connection with the satisfaction of tax withholding obligations with respect to CMC equity awards or awards under the ESPP, (2) acquisitions by CMC in connection with the forfeiture of such equity awards, (3) acquisitions by CMC in connection with the net exercise of
CMC stock options, or (4) among CMC’s wholly owned subsidiaries, or (C) in the case of CMC, split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests; |
• | (A) in the case of CMC, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock, CMC securities or other equity or voting interests, except that CMC may declare a quarterly dividend of $0.46 per share in March 2022 and, if the closing does not occur by December 14, 2022, CMC may declare quarterly dividends in an amount not to exceed $0.46 per share, in a manner consistent with CMC’s
past practice and (B) in the case of any subsidiary of CMC, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock, CMC securities or other equity or voting interests, other than with respect to any dividend or distribution solely to CMC or any wholly owned subsidiaries; |
• | (A) incur any indebtedness or issue or sell any debt securities or rights to acquire debt securities, except for (1) indebtedness solely between or among CMC and any of its wholly owned subsidiaries, (2) guarantees by CMC of indebtedness for borrowed money of subsidiaries
of CMC or guarantees by subsidiaries of CMC of indebtedness for borrowed money of CMC or any of its subsidiaries, which indebtedness is incurred in compliance with this paragraph or is outstanding and disclosed on the most recent consolidated balance sheet of CMC, (3) letters of credit issued in the ordinary course of business consistent with past practices, (4) trade credit or trade payables in the ordinary course of business consistent with past practice, (5) obligations under derivative contracts and any interest rate and currency agreements entered into in the ordinary course of business consistent with past practice and (6) indebtedness for |
• | acquire, sell, lease (as lessor), license, mortgage, sell and leaseback or otherwise subject to any lien (other than permitted liens), or otherwise dispose of any real property or other material properties or assets, including intellectual property, or any material interests therein or waive or relinquish, abandon, fail to maintain or allow to lapse any real property or other material properties or assets, including intellectual property, other than (A) in the ordinary course of business consistent with past practice for fair market value in an amount not to exceed $10,000,000
in the aggregate, (B) pursuant to other contracts in existence on the date of the merger agreement and set forth on the CMC disclosure letter, (C) the acquisition of supplies, raw materials, equipment and other assets in the ordinary course of business consistent with past practice, (D) sales of inventory in the ordinary course of business consistent with past practice or (E) with respect to transactions among CMC and one or more of its subsidiaries; |
• | make or authorize capital expenditures that, exceed $1,000,000 individually or $5,000,000 in the aggregate, in any twelve (12)-month period, except to the extent budgeted in CMC’s current plan
as further described on CMC’s disclosure letter, which is referred to as the capex plan; |
• | make any change in financial accounting methods, principles or practices, or elections, except insofar as may be required by a change in GAAP or applicable law occurring after the date of the merger agreement; |
• | assign, transfer, lease or cancel any real property lease or permit, except to the extent contemplated in the capex plan; |
• | (A) commence any action, except (1) in the ordinary course of business and consistent with past practices or
(2) in such cases where CMC reasonably determines in good faith that the failure to commence such action would result in a material impairment of a valuable aspect of the business (provided that CMC consults with Entegris and considers the views and comments of Entegris with respect to such actions before the commencement thereof) or (B) settle or compromise, or propose to settle or compromise, any claim or action involving or against CMC or any of its subsidiaries, other than, subject to certain limitations, settlements or compromises that do not involve the admission of wrongdoing by CMC or any of its subsidiaries or any other remedies against CMC or any subsidiaries other than monetary payment
by CMC or any of its subsidiaries in an amount (excluding any amounts covered by insurance) not to exceed $2,500,000 individually or $5,000,000 in the aggregate; |
• | abandon, encumber (other than with permitted liens), convey title (in whole or in part), exclusively license or grant any material exclusive right to material intellectual property, or enter into licenses or agreements that impose material restrictions upon CMC or any of its affiliates with respect to material intellectual property owned by any third party and impair the operation of the business of CMC or any of its affiliates, in each case, other than in the ordinary course of business consistent with past practice; |
• | except
for (x) collective bargaining agreements subject to certain limitations or (y) amendments, terminations, waivers or non-renewals in the ordinary course of business consistent with past practice, amend, waive any provision of, assign or terminate any material contract or enter into a contract that would reasonably be likely to (A) adversely affect CMC, Entegris or the surviving corporation in any material respect, (B) limit or restrict the surviving corporation or any of their affiliates from engaging or competing in any line of business or in any geographical area, other than exclusive sales, distribution or other similar agreements entered into in the ordinary course of business consistent with past practice, or (C) be a material
contract (other than specified material contracts as long as such contract is entered into in the ordinary course of business and on customary terms) if entered into before the date hereof; provided that, for the avoidance of doubt, nothing in this paragraph will restrict CMC or its subsidiaries from entering into contracts with respect to matters specifically permitted under the merger agreement; |
• | except as required by applicable law or pursuant to the terms of any CMC benefit plan or collective bargaining agreement in effect on the date hereof, (A) increase the compensation of any current or former director, executive officer or other employee or independent contractor with an annual base salary (or annualized hourly wage rate) in excess of $150,000, other than increases in base salary and benefits of employees with a title of vice president and below in the ordinary course of business consistent with past practice, (B)
grant any equity- or equity-based awards, (C) grant or provide any severance or termination payments or benefits to any current or former director, executive officer or other employee or independent contractor other than the payment of severance amounts or benefits in the ordinary course of business consistent with past practice and subject to the execution and non-revocation of a release of claims in favor of CMC and its subsidiaries, (D) accelerate the time of payment or vesting of, or the lapsing of restrictions related to, or fund or otherwise secure the payment of, any compensation or benefits (including any equity or equity-based awards) to any current or former director, executive officer or other employee or independent contractor, (E) provide any obligation to gross-up, indemnify or otherwise reimburse any current or former director, executive officer or other employee
or independent contractor for any tax incurred by any such individual, including under Sections 409A or 4999 of the Code, (F) establish, amend or terminate any CMC benefit plan (or any plan, program, arrangement or agreement that would be a CMC benefit plan if it were in existence on the date hereof) other than entry into, amendment or termination of any CMC benefit plan in a manner that would not materially increase costs to CMC, Entegris or the surviving corporation or any of their affiliates, or materially increase the benefits provided under any CMC benefit plan, (G) modify, extend, or enter into any collective bargaining agreement, except for amendments, terminations or non-renewals in the ordinary course of business consistent with past practice, (H) recognize or certify any employee representative body as the bargaining representative for any employees of CMC and its subsidiaries,
or (I) waive any material restrictive covenant obligations of any current or former director, officer, employee, or independent contractor of CMC or its subsidiaries; |
• | other than in accordance with contracts or agreements in effect on the date hereof, forgive any loans to any employees, officers or directors of CMC, or any of their respective affiliates; |
• | (A) with respect to any officer, hire or terminate the employment of (other than for cause) any such officer or (B) with respect to any other
employee or independent contractor with an annual base salary (or annualized hourly wage rate) in excess of $200,000, hire or terminate the employment of (other than for cause) any such individual without first consulting with Entegris; |
• | acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or any series of related transactions any equity interests in any person or any business or division of any person or all or substantially all of the assets of any person (or any business or division thereof), or enter into any joint venture, partnership, limited liability corporation or similar arrangement; |
• | adopt a plan of complete or partial liquidation,
dissolution, merger or conversion or resolution providing for or authorizing such a liquidation, dissolution, merger or conversion, other than the merger and any mergers, consolidations, restructurings or reorganizations solely among CMC’s wholly owned subsidiaries; |
• | (A) make, change, or rescind any material tax election of CMC or its subsidiaries; (B) settle or compromise any material tax liability of CMC or any of its subsidiaries or settle or compromise any tax liability that could have a material effect on CMC or its subsidiaries
in future taxable years; (C) enter into any closing agreement with respect to taxes; (D) adopt or change an annual tax accounting period or any material method of tax accounting; (E) fail to file when due (taking into account any available extensions) any material tax return or file any material amendment to an income or other material tax return; (F) waive or extend any statute of limitations in respect of any material taxes except as required by applicable law; or (G) surrender any right to claim a refund of a material amount of taxes; or |
• | agree, commit or propose to take any of the foregoing actions. |
• | amend
Entegris’ charter or bylaws or the certificate of incorporation or bylaws of Merger Sub, or enter into any written agreement with any of Entegris’ stockholders in their capacity as such; |
• | redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests, except in connection with the satisfaction of tax withholding obligations with respect to stock options, restricted stock awards or restricted
stock unit awards, acquisitions by Entegris in connection with the forfeiture of such equity awards, or acquisitions by Entegris in connection with the net exercise of such stock options, or, in the case of Entegris, split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests; |
• | establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock, Entegris securities or other equity or voting interests, other than regular quarterly cash dividends in the ordinary course of business; |
• | issue, sell, or grant any shares of its capital stock
or other equity or voting interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interests, except for any issuance, sale or grant (x) solely between or among Entegris’ wholly owned subsidiaries, (y) in connection with Entegris’ equity incentive plans including the settlement or exercise of outstanding awards under such plans or (z) shares of Entegris common stock in a public offering for cash in an amount not exceeding 5% of the issued and outstanding shares of Entegris common stock as of the date of the merger agreement; provided, however, that in the case of clause (z), such issuance, sale or grant will be
consummated before the date that is thirty (30) days before the anticipated closing date; |
• | adopt a plan of complete or partial liquidation, dissolution, merger or conversion or resolution providing for or authorizing such a liquidation, dissolution, merger or conversion, other than the merger and any liquidations, dissolutions, mergers, conversions, consolidations, restructurings or reorganizations solely among Entegris and/or any wholly owned subsidiaries; |
• | enter into any contract that would
reasonably be expected to prevent or materially delay or impair the ability of Entegris to consummate the merger and other transactions contemplated by the merger agreement; or |
• | agree, commit or propose to take any of the foregoing actions. |
• | solicit, seek, initiate or knowingly facilitate or knowingly encourage (including by way of furnishing any non-public information) any inquiries regarding, or the making of, or any submission or announcement of a proposal or offer that constitutes, or would reasonably be expected to lead to, any acquisition proposal (as defined below); |
• | engage in,
continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any non-public information in connection with or for the purpose of encouraging or facilitating, any acquisition proposal or any inquiry or proposal that could reasonably be expected to lead to an acquisition proposal; |
• | approve, endorse, recommend, submit to stockholders or declare advisable any acquisition proposal; |
• | enter into any letter of intent, term sheet, memorandum of understanding, acquisition agreement, merger agreement, option agreement or other similar agreement (other than an acceptable confidentiality |
• | release
or terminate or permit the release of any person from, or termination of, or waive or modify or permit the waiver or modification of any provision of, or fail to enforce or cause not to be enforced, any confidentiality, standstill or similar agreement to which CMC or any of its subsidiaries is a party except, to the extent that the failure to so release, terminate, waive, modify or fail to enforce would be inconsistent with the fiduciary duties of the CMC under applicable law. |
• | means any proposal or offer from any person or group of persons (other than Entegris or Merger Sub) providing for (A) any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of (1) 20% or more (based on the fair market value, as determined in good faith by the CMC board of directors (or any committee thereof)) of the consolidated assets
(including capital stock of any of CMC subsidiaries) or of the consolidated revenues or net income of CMC and its subsidiaries, taken as a whole, or (2) shares or other equity securities of CMC which together with any other shares or other equity securities of CMC beneficially owned by such person or group, would equal 20% or more of aggregate voting power of CMC, (B) any tender offer or exchange offer that, if consummated, would result in any person or group owning, directly or indirectly, 20% or more of the aggregate voting power of CMC, (C) any merger, consolidation, business combination, binding share exchange or similar transaction involving CMC pursuant to which any person or group (or the shareholders of any person) would own, directly or indirectly, 20% or more of the aggregate
voting power of CMC or of the surviving entity in a merger or the resulting direct or indirect parent of CMC or such surviving entity, or (D) any recapitalization transaction involving CMC, other than, in each case, the transactions contemplated by the merger agreement. |
• | contact
the person or group of persons who has made such acquisition proposal in order to clarify terms for the sole purpose of the CMC board of directors informing itself about such acquisition proposal; |
• | furnish, pursuant to an acceptable confidentiality agreement, information (including non-public information) with respect to CMC and its subsidiaries to the person or group of persons who has made such acquisition proposal; provided that CMC will promptly (and in any event within 24 hours) provide or make available to Entegris any non-public information concerning CMC or its subsidiaries that is provided or made available
to any person given such access which was not previously provided to Entegris or its representatives; and |
• | engage in or otherwise participate in discussions or negotiations with the person or group of persons making such acquisition proposal, |
• | change, withhold, withdraw, qualify or modify, in a manner adverse to Entegris (or publicly propose or resolve to change, withhold, withdraw, qualify or modify), the CMC board of directors’ recommendation with respect to the merger; |
• | fail to include the CMC board of directors’ recommendation in the proxy statement; |
• | approve or recommend, or publicly propose to approve or recommend to the stockholders
of CMC, an acquisition proposal; |
• | fail to publicly reaffirm the CMC board of directors’ recommendation of the merger within five business days after Entegris so requests in writing if there has been any public disclosure by a third party related to an actual acquisition proposal by such third party (provided that CMC will be obligated to make such reaffirmation only once in response to each such actual acquisition proposal made by such third party that is publicly disclosed; and provided, further, that if the special meeting is scheduled to take place less than five business days after such request, CMC will reaffirm the CMC board of directors’ recommendation of the merger before such meeting); |
• | if
a tender offer or exchange offer for shares of capital stock of CMC that constitutes an acquisition proposal is commenced, fail to recommend against acceptance of such tender offer or exchange offer by the stockholders of CMC, within the ten business day period specified in Rule 14-e-2 of the Exchange Act; provided that a customary “stop, look and listen” communication by the CMC board of directors pursuant to Rule 14d-9(f) of the Exchange Act will not be prohibited, any of which is referred to as an adverse recommendation change; or |
• | authorize, adopt or approve or propose to authorize, adopt or approve, an acquisition proposal, or cause or permit CMC or any of its subsidiaries to enter into any alternative
acquisition agreement. |
• | (i) CMC
has provided prior written notice to Entegris of its or the CMC board of directors’ intention to take such actions at least five business days in advance of taking such action, which notice will specify (A) in the case of a superior proposal, the material terms of the superior proposal and will include an unredacted copy of the relevant proposed transaction agreements (including any financing commitments) related to, and the identity of, the person making the acquisition proposal, or (B) in cases not involving a superior proposal, the material circumstances giving rise to the adverse recommendation change; |
• | (ii) after providing such notice and before taking such actions, CMC will have, and will have caused its representatives to, negotiate with Entegris in good faith (to the extent Entegris desires to negotiate) during
such five business day period to make such adjustments in the terms and conditions of the merger agreement as would permit CMC or the CMC board of directors not to take such actions; provided that any material change to the terms of such superior proposal (including any change to the form or amount of consideration) or to the facts and circumstances relating to such intervening event will require a new notice including the details required by the notice described above and CMC will be required to comply again with the requirements of the merger agreement with respect to each such material change; provided, further, that with respect to each subsequent written notice related to a material change references to the five business day period above will be deemed to be references to a three business day period; and |
• | (iii) the
CMC board of directors will have considered in good faith any changes to the merger agreement or other arrangements that may be offered in writing by Entegris by 5:00 p.m. Eastern Standard Time on the fifth business day of such five business day period (or the last day of any applicable extension above) and will have determined in good faith (A) with respect to the actions described in clause (x) after consultation with outside legal counsel, that it would continue to be inconsistent with the directors’ fiduciary duties under applicable law not to effect the adverse recommendation change and (B) with respect to the actions described in clause (y), after consultation with outside counsel and its financial advisors, that the acquisition proposal received by CMC would continue to constitute a superior proposal and that failure to effect the adverse recommendation change or terminate the merger agreement to enter into an alternative acquisition agreement would be
inconsistent with the directors’ fiduciary duties under applicable law, in each case, even if such changes offered in writing by Entegris were given effect. |
• | the receipt, existence or terms of an acquisition proposal; |
• | any events, developments or change in circumstances of Entegris; |
• | the
status or terms of the financing or any actions required to be taken pursuant to the relevant financing sections of the merger agreement; |
• | the status of the merger under the HSR Act or of any of the requisite regulatory approvals or any actions required to be taken pursuant to the relevant sections of the merger agreement; |
• | any announcements, approvals, issuances, or regulations of any governmental entity; |
• | any
changes in the market price or trading volume of CMC common stock or Entegris common stock (it being understood that this exception will not prevent or otherwise affect a determination that the underlying facts or occurrences giving rise or contributing to an intervening event (to the extent not otherwise falling within any of the other exceptions discussed in this section)); or |
• | any matter relating to the foregoing or consequence of the foregoing. |
• | participating (including by teleconference or virtual meeting platforms) (including by making members of senior management, certain representatives and certain non-legal advisors, in each case with appropriate seniority and expertise, available to participate), upon reasonable advance notice, in a reasonable number of meetings, presentations, non-deal and investor road shows, rating agency presentations and drafting sessions, and participating in reasonable and customary due diligence, in each case, with or by the financing sources (or prospective
lenders or investors in the financing) at mutually agreed times and places, |
• | furnishing Entegris and the financing sources, as promptly as reasonably practicable, with certain financial and other information (including financial statements) regarding CMC and its subsidiaries as is required in connection with the financing and providing certain updates to such information, |
• | assisting Entegris and the financing sources in the preparation of (I) customary offering documents, syndication documents and materials (including assistance in creating usual and customary “public versions”
of the foregoing), including confidential information memoranda, private placement memoranda, offering memoranda, prospectuses, lender and investor presentations, rating agency presentations, business and financial projections and similar documents and materials (which may incorporate by reference periodic and current reports filed by CMC with the SEC) in connection with the financing, and providing customary authorization and representation letters with respect thereto, and (II) materials for any of the foregoing, including business projections and financial statements (including assisting Entegris in preparing pro forma financial statements, provided that neither CMC nor any of its subsidiaries or representatives will be responsible in any manner for any pro forma financial information or pro forma adjustments relating to the
merger and the consideration therefor that is required to be made to the historical information for such pro forma financial information) and identifying any portion thereof as containing material, non-public information relating to CMC and its subsidiaries or their respective securities, |
• | reasonably cooperating with the marketing and syndication efforts of Entegris, Merger Sub and any financing sources for any portion of any financing, including cooperation in connection with the obtaining of ratings, |
• | using its reasonable best efforts to cause its current independent accountants
to provide customary assistance and cooperation in any financing, including using reasonable best efforts to cause such accountants to (I) participate in a reasonable number of drafting sessions and accounting due diligence sessions upon reasonable advance notice and at mutually agreed times and places, (II) provide any |
• | executing and delivering as of (but not before) the effective time, and reasonably assisting
Entegris with Entegris’ preparation of, definitive financing documents, including credit agreements, indentures, intercreditor agreements, pledge and security documents, and certificates (including borrowing base certificates), or other documents, to the extent reasonably requested by Entegris and otherwise facilitating the pledging of, and granting, recording and perfection of security interests in share certificates, securities and other collateral to secure any financing; provided that the effectiveness of any definitive documentation executed by CMC or any of its subsidiaries and any such pledge, grant, recordation or perfection will be subject to the consummation of the merger, |
• | furnishing
Entegris and any financing sources promptly, and in any event at least four (4) business days prior to the closing date with all documentation and other information relating to CMC and its subsidiaries required by applicable regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the PATRIOT Act, in each case, to the extent that such documentation and information has been reasonably requested in writing (which may be by email) at least ten (10) business days prior to the closing date, |
• | informing Parent if the chief executive officer, chief financial officer, treasurer or controller of CMC has knowledge of any facts as a result of which a
restatement of any of CMC’s financial statements, in order for such financial statements to comply with GAAP, is necessary, and |
• | facilitating the arrangement by Entegris of approval of the financing by the post-closing boards of directors or equivalent governing bodies of subsidiaries of CMC, subject to certain limitations. |
• | to the extent not publicly available, a copy of each report, schedule, registration statement and other document filed by it during such period pursuant to the requirements of federal or state securities laws or commission actions; |
• | a copy of all correspondence between such party or any of its Subsidiaries and any party to a Material
Contract with regard to any action, consent, approval or waiver that is required to be taken or obtained with respect to such Material Contract in connection with the consummation of the Merger or the other transactions contemplated by the merger agreement; and |
• | all other information concerning its business, properties and personnel as may be reasonably requested by Entegris, and all information necessary to enable Entegris to prepare the financial statements and related disclosures regarding CMC and its subsidiaries that are required to be included in the registration statement and in Entegris’ current report on Form 8-K following the
closing (in each case, in a manner so as to not interfere in any material respect with the normal business operations of CMC its subsidiaries). |
• | any
public statement to the extent containing information that is consistent with the joint press release referred to below or any other release or public statement previously issued or made in accordance with the merger agreement; |
• | any communication in accordance with the merger agreement; or |
• | in the event of an adverse recommendation change made in compliance with the merger agreement, CMC’s public statement containing (x) such adverse recommendation change and (y) a statement of the reasons of the CMC board of directors for making such adverse recommendation change, and the right of
consent (but not the obligation to consult) set forth in the merger agreement will not apply to information referenced under the preceding clauses (x) and (y), except with respect to such information solely relating to Entegris or its business, financial condition or results of operations. |
• | base pay or wages that is at least equal to the base pay or wages provided to each such continuing employee immediately before the closing date; |
• | target
cash incentive opportunities and target long-term incentive opportunities, as applicable, that are, in each case, no less favorable than the target cash incentive and target long-term incentive opportunities provided to each such continuing employee immediately before the closing date; |
• | health and welfare benefits that are no less favorable in the aggregate than the health and welfare benefits provided to each such continuing employee immediately before the closing date; and |
• | retirement benefits that are no less favorable than the retirement benefits provided to each such continuing employee immediately before the closing date. |
• | the adoption of the merger agreement at the special meeting by the affirmative vote of holders of a majority of the outstanding shares of CMC common stock entitled to vote on such matter, which is referred to as the CMC stockholder approval; |
• | (i) the waiting period applicable to the consummation of the merger under the HSR Act will have expired or terminated and (ii) all authorizations or consents to be obtained from a governmental entity with respect to the merger under each requisite regulatory approval will have been obtained or deemed to
have been obtained; |
• | no applicable law and no judgment, preliminary, temporary or permanent, or other legal restraint or prohibition and no binding order or determination by any governmental entity will be in effect that prevents, makes illegal, restrains, enjoins or otherwise prohibits the consummation of the merger; |
• | the SEC will have declared the registration statement effective under the Securities Act, no stop order or similar restraining order by the SEC suspending the effectiveness of the registration statement will be in effect and no proceedings for that purpose will be pending before the SEC; |
• | the
shares of Entegris common stock to be issued pursuant to the merger will have been approved for listing on the NASDAQ, subject to official notice of issuance; |
• | the accuracy of the representations and warranties of the other party as follows: |
○ | each of the representations and warranties of such party regarding organization, good standing and qualification; corporate authority and approval; non-contravention, and in the case of CMC, takeover statutes, the opinion of CMC’s financial advisor and CMC’s brokers fees and expenses, must be true and correct in all material respects at and
as of the closing date as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
○ | the representation of such party regarding its capital structure and the absence of a material adverse effect must be true and correct in all respects at and as of the closing date as if made at and as of such time, other than, in the case of the representation regarding capital structure, de minimis inaccuracies; and |
○ | each
other representation and warranty of such party set forth in the merger agreement must be true and correct in all respects (without giving effect to any limitation as to materiality or material adverse effect set forth therein) at and as of the closing date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to materiality or material adverse effect set forth therein) has not had and would not reasonably be expected to have a material adverse effect; |
• | the other party’s performance of, in all material
respects, its obligations under the merger agreement required to be performed at or before the closing date; and |
• | the receipt by such party of a certificate of the chief executive officer, chief financial officer or general counsel of the other party certifying that the conditions in the immediately preceding bullets with respect to representations and warranties and performance of obligations have been satisfied. |
• | the merger is not consummated on or before December 14, 2022, which will be referred to as the outside date; provided, however, that (x) if, on the outside date, any of the conditions to the closing set forth in to the merger agreement (if such legal restraint is in respect of a regulatory law) will not have been satisfied or (to the extent permitted by applicable law) waived by both CMC and Entegris, but all other conditions to the closing (other than those conditions that by their terms are to be satisfied at the closing) have been satisfied or, to the extent permitted by applicable law, waived,
then the outside date will, without any action on the part of the parties hereto, be automatically extended to March 14, 2023, or such earlier date as may be agreed in writing by Entegris and CMC (and which date will thereafter be deemed to be the outside date) and (y) the right to terminate the merger agreement will not be available to any party whose failure to fulfill any obligation under the merger agreement (including the obligation to consummate the closing when required pursuant to the merger agreement) materially contributed to the failure of the merger to be consummated on or before such date (it being understood that Entegris and Merger Sub will be deemed a single party for purposes of the foregoing proviso), which situation will be referred to as an outside date termination event; |
• | any
of the FTC, China State Administration for Market Regulation, Korea Fair Trade Commission, Japan Fair Trade Commission, Competition & Consumer Commission of Singapore or Taiwan Fair Trade Commission issues a final non-appealable order or enacts a law that prohibits, restrains or makes illegal the consummation of the merger; provided, however, that the right to terminate the merger agreement will not be available to any party if such order was due to the failure of such party to perform any of its obligations under the merger agreement (it being understood that Entegris and Merger Sub will be deemed a single party for purposes of the foregoing proviso), which situation will be referred to as a regulatory restraint termination event; or |
• | the CMC stockholder approval will not have been obtained at
a duly convened meeting of CMC stockholders or any adjournment or postponement thereof, which situation will be referred to as a CMC no vote termination event. |
• | before receipt of the CMC stockholder approval, if: |
○ | the
CMC board of directors has made an adverse recommendation change; |
○ | CMC has breached its obligations under the merger agreement not to solicit or encourage acquisition proposals; |
○ | CMC fails to call a stockholder meeting for the purpose of obtaining the CMC stockholder approval; or |
○ | CMC submits an acquisition proposal other than the merger agreement to CMC stockholders at a meeting
of such stockholders; |
• | if CMC has breached any representation, warranty, covenant or agreement contained in the merger agreement, or if any representation or warranty of CMC has become untrue, in each case, such that the conditions set forth in the merger agreement regarding the truth and accuracy of CMC’s representations and warranties and CMC’s performance of, in all material respects, its obligations under the merger agreement could not be satisfied as of the closing date; provided, however, that Entegris may not terminate the
merger agreement due to such breach unless any such breach or failure to be true has not been cured within 30 days after written notice by Entegris to CMC informing CMC of such breach or failure to be true, except that no cure period will be required for a breach which by its nature cannot be cured before the outside date; and provided, further, that Entegris may not terminate the merger agreement pursuant due to such uncured breach if Entegris is then in breach of the merger agreement in any material respect. |
• | If Entegris or Merger Sub has breached any representation, warranty, covenant or agreement contained in the merger agreement, or if any representation or warranty of Entegris or Merger Sub has become untrue, in each case, such that the conditions set forth in the provisions of the merger agreement related to Entegris’ and Merger Sub’s representations and warranties, and Entegris’ and Merger Sub’s performance of, in all material respects, their obligations under the merger agreement could not be satisfied as of the closing date; provided, however, that CMC may not terminate the merger agreement due to such breach or failure to be true unless any such breach or failure to be true has not been cured within 30 days after written
notice by CMC to Entegris informing Entegris of such breach or failure to be true, except that no cure period will be required for a breach which by its nature cannot be cured before the outside date; and provided, further, that CMC may not terminate the merger agreement pursuant to such breach or failure to be true if CMC is then in breach of the merger agreement in any material respect; or |
• | before the CMC stockholder approval, (A) if the CMC board of directors authorizes CMC to terminate the merger agreement to enter into an alternative acquisition agreement with respect to a superior proposal in accordance with the terms of the merger agreement, (B) substantially concurrent with the termination of the merger agreement, CMC enters into such alternative acquisition agreement
and (C) CMC pays to Entegris in immediately available funds the CMC termination fee in accordance with the relevant provision of the merger agreement. |
• | Separate historical financial statements of Entegris as of and for the fiscal
year ended December 31, 2020, the related notes included in Entegris’ Annual Report on Form 10-K for the year ended December 31, 2020, as well as the separate historical financial statements of Entegris as of and for the fiscal quarter and nine-month period ended October 2, 2021, and the related notes included in Entegris’ Quarterly Report on Form 10-Q for the quarter ended and nine-month period October 2, 2021. |
• | Separate historical financial statements of CMC as of and for the fiscal year ended September 30, 2020 and the related notes included in CMC’s Annual Report on Form
10-K for the year ended September 30, 2020, the separate historical financial statements of CMC as of and for the fiscal year ended September 30, 2021 and the related notes included in CMC’s Annual Report on Form 10-K for the year ended September 30, 2021, the separate historical financial statements of CMC as of and for the fiscal quarter ended December 31, 2019 and the related notes included in CMC’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2019, as well as the separate historical financial statements of CMC as of and for the fiscal quarter ended December 31, 2020 and the related notes included in CMC’s Quarterly Report on Form 10-Q for the quarter
ended December 31, 2020. |
| | Historical | | | | | | | | | | | |||||||||
| | Entegris | | | CMC
as Reclassified | | | Transaction Accounting Adjustments | | | Notes | | | Other
Transaction Accounting Adjustments | | | Notes | | | Pro
Forma Combined | |
ASSETS | | | | | Note
4 | | | | | | | | | | | ||||||
Current
assets: | | | | | | | | | | | | | | | |||||||
Cash
and cash equivalents | | | $475,752 | | | $185,979 | | | $(3,910,333) | | | 7(A) | | | $4,895,000 | | | 7(K) | | | $415,931
|
| | | | | | (16,000) | | | 7(B) | | | (1,183,166) | | | 7(M) | | | ||||
| | | | | | (31,300) | | | 7(T) | | | — | | | | | |||||
Trade
accounts and notes receivable, net | | | 315,073 | | | 150,099 | | | (269) | | | 7(C) | | | — | | | | | 464,903
| |
Inventories, net | | | 429,016 | | | 173,464 | | | 48,840 | | | 7(D) | | | — | | | | | 651,320
| |
Deferred tax charges and refundable income taxes | | | 21,760 | | | 3,543 | | | 11,340 | | | 7(P) | | | 3,809 | | | 7(R) | | | 40,452
|
Other current assets | | | 34,104 | | | 21,896 | | | 31,300 | | | 7(T) | | | — | | | | | 87,300
| |
Total current assets | | | 1,275,705 | | | 534,981 | | | (3,866,422) | | | | | 3,715,643 | | | | | 1,659,907
| ||
Property, plant and equipment, net | | | 597,630 | | | 354,771 | | | 126,271 | | | 7(E) | | | — | | | | | 1,078,672
| |
Other assets: | | | | | | | | | | | | | | | |||||||
Right-of-use
assets | | | 56,990 | | | 29,302 | | | — | | | | | — | | | | | 86,292
| ||
Goodwill | | | 749,933 | | | 576,902 | | | 3,125,566 | | | 7(I) | | | — | | | | | 4,452,401
| |
Intangible assets, net | | | 302,487 | | | 625,434 | | | 1,979,566 | | | 7(F) | | | — | | | | | 2,907,487
| |
Deferred tax assets and other noncurrent tax assets | | | 17,565 | | | 6,813 | | | — | | | | | — | | | | | 24,378
| ||
Other noncurrent assets | | | 11,965 | | | 22,682 | | | — | | | | | (12,335) | | | 7(Q) | | | 22,312
| |
Total assets | | | $3,012,275 | | | $2,150,885 | | | $1,364,980 | | | | | $3,703,308 | | | | | $10,231,448
| ||
| | | | | | | | | | | | | | ||||||||
LIABILITIES
AND EQUITY | | | | | | | | | | | | | | | |||||||
Current
liabilities | | | | | | | | | | | | | | | |||||||
Short-term
debt | | | $— | | | $— | | | $— | | | | | $895,000 | | | 7(L) | | | $895,000
| |
Long-term debt, current maturities | | | — | | | 13,313 | | | 2,874 | | | 7(G) | | | (16,187) | | | 7(O) | | | —
|
Accounts payable | | | 120,611 | | | 52,748 | | | (269) | | | 7(C) | | | — | | | | | 173,090
| |
Accrued payroll and related benefits | | | 90,684 | | | 47,360 | | | — | | | | | — | | | | | 138,044
| ||
Other accrued liabilities | | | 91,129 | | | 75,600 | | | — | | | | | (2,995) | | | 7(Q) | | | 163,735
| |
Income taxes payable | | | 6,989 | | | 16,836 | | | — | | | | | — | | | | | 23,825
| ||
Total current liabilities | | | 309,413 | | | 205,858 | | | 2,605 | | | | | 875,818 | | | | | 1,393,695
| ||
Long-term debt, excluding current maturities | | | 936,704 | | | 903,031 | | | 9,157 | | | 7(G) | | | 3,915,000 | | | 7(L) | | | 4,707,805
|
| | | | | | — | | | | | (912,188) | | | 7(O) | | | |||||
| | | | | | — | | | | | (143,899) | | | 7(N) | | | |||||
Pension
benefit obligations and other liabilities | | | 36,118 | | | 43,908 | | | — | | | | | (35,233) | | | 7(S) | | | 44,793
| |
Deferred tax liabilities and other noncurrent tax liabilities | | | 66,774 | | | 95,623 | | | 482,095 | | | 7(H) | | | 3,809 | | | 7(R) | | | 648,301
|
Long-term lease liabilities | | | 52,486 | | | 23,528 | | | — | | | | | — | | | | | 76,014
| ||
Equity: | | | | | | | | | | | | | | | |||||||
Common
stock | | | 1,357 | | | 40 | | | 89 | | | 7(J) | | | — | | | | | 1,486
| |
Treasury stock | | | (7,112) | | | (610,731) | | | 610,731 | | | 7(J) | | | — | | | | | (7,112) | |
Additional
paid-in capital | | | 866,716 | | | 1,052,869 | | | 745,611 | | | 7(J) | | | — | | | | | 2,665,196
| |
Retained earnings | | | 788,830 | | | 431,968 | | | (480,517) | | | 7(J) | | | — | | | | | 740,281
| |
Accumulated other comprehensive loss | | | (39,011) | | | 4,791 | | | (4,791) | | | 7(J) | | | — | | | | | (39,011) | |
Total
equity | | | 1,610,780 | | | 878,937 | | | 871,123 | | | | | — | | | | | 3,360,840
| ||
Total liabilities and equity | | | $3,012,275 | | | $2,150,885 | | | $1,364,980 | | | | | $3,703,308 | | | | | $10,231,448 |
| | Historical | | | | | | | | | | | |||||||||
| | Entegris | | | CMC
as Reclassified | | | Transaction Accounting Adjustments | | | Notes | | | Other
Transaction Accounting Adjustments | | | Notes | | | Pro
Forma Combined | |
| | | | Note
4 | | | | | | | | | | | |||||||
Net
sales | | | $1,859,313 | | | $1,120,990 | | | $(6,193) | | | 8(A) | | | $— | | | | | $2,974,110
| |
Cost of sales | | | 1,009,591 | | | 638,167 | | | 11,804 | | | 8(B) | | | — | | | | | 1,702,455
| |
| | | | | | 48,840 | | | 8(C) | | | — | | | | | |||||
| | | | | | (6,193) | | | 8(A) | | | — | | | | | |||||
| | | | | | 246 | | | 8(K) | | | — | | | | | |||||
Gross
profit | | | 849,722 | | | 482,823 | | | (60,890) | | | | | — | | | | | 1,271,655
| ||
Selling, general and administrative expenses | | | 265,128 | | | 147,604 | | | 2,670 | | | 8(B) | | | — | | | | | 473,116
| |
| | | | | | 54,500 | | | 8(E) | | | — | | | | | |||||
| | | | | | 3,214 | | | 8(K) | | | — | | | | | |||||
Engineering,
research and development expenses | | | 136,057 | | | 51,928 | | | 1,309 | | | 8(B) | | | — | | | | | 189,691
| |
| | | | | | 397 | | | 8(K) | | | — | | | | | |||||
Amortization
of intangible assets | | | 53,092 | | | 70,948 | | | 88,718 | | | 8(D) | | | — | | | | | 212,758
| |
Asset impairment charges | | | — | | | 9,661 | | | — | | | | | — | | | | | 9,661
| ||
Operating income (loss) | | | 395,445 | | | 202,682 | | | (211,698) | | | | | — | | | | | 386,429
| ||
Interest expense | | | 48,600 | | | 40,198 | | | — | | | | | 215,380 | | | 8(G) | | | 273,078
| |
| | | | | | — | | | | | (40,198) | | | 8(H) | | | |||||
| | | | | | — | | | | | (3,045) | | | 8(I) | | | |||||
| | | | | | — | | | | | 12,143 | | | 8(J) | | | |||||
Interest
income | | | (786) | | | (378) | | | — | | | | | — | | | | | (1,164) | ||
Other
(income) expense, net | | | (6,656) | | | (131) | | | — | | | | | — | | | | | (6,787) | ||
Income
before income taxes | | | 354,287 | | | 162,993 | | | (211,698) | | | | | (184,280) | | | | | 121,303
| ||
Income tax expense | | | 59,318 | | | 27,184 | | | (47,632) | | | 8(F) | | | (41,463) | | | 8(F) | | | (2,593) |
Net
income (loss) | | | $294,969 | | | $135,809 | | | $(164,066) | | | | | $(142,817) | | | | | $123,896
| ||
Per common share data (Note 9): | | | | | | | | | | | | | | | |||||||
Earnings
per share | | | | | | | | | | | | | | | |||||||
Basic
net income per common share | | | $2.19 | | | $4.66 | | | | | | | | | | | $0.84
| ||||
Diluted net income per common share | | | $2.16 | | | $4.61 | | | | | | | | | | | $0.82
| ||||
| | | | | | | | | | | | | | ||||||||
Weighted
average shares outstanding | | | | | | | | | | | | | | | |||||||
Basic | | | 134,837 | | | 29,122 | | | | | | | | | | | 147,729
| ||||
Diluted | | | 136,266 | | | 29,484 | | | | | | | | | | | 150,538 |
| | Historical | | | | | | | | | | | |||||||||
| | Entegris | | | CMC
as Reclassified | | | Transaction Accounting Adjustments | | | Notes | | | Other
Transaction Accounting Adjustments | | | Notes | | | Pro
Forma Combined | |
| | | | Note 4 | | | | | | | | | | | |||||||
Net
sales | | | $1,663,689 | | | $911,968 | | | $(7,547) | | | 8(A) | | | $— | | | | | $2,568,110
| |
Cost of sales | | | 899,115 | | | 536,703 | | | 8,748 | | | 8(B) | | | — | | | | | 1,437,077
| |
| | | | | | (7,547) | | | 8(A) | | | — | | | | | |||||
| | | | | | 58 | | | 8(K) | | | — | | | | | |||||
Gross
profit | | | 764,574 | | | 375,265 | | | (8,806) | | | | | — | | | | | 1,131,033
| ||
Selling, general and administrative expenses | | | 215,042 | | | 122,730 | | | 2,245 | | | 8(B) | | | — | | | | | 340,768
| |
| | | | | | 751 | | | 8(K) | | | — | | | | | |||||
Engineering,
research and development expenses | | | 121,692 | | | 41,767 | | | 844 | | | 8(B) | | | — | | | | | 164,396
| |
| | | | | | 93 | | | 8(K) | | | — | | | | | |||||
Amortization
of intangible assets | | | 35,616 | | | 50,236 | | | 69,514 | | | 8(D) | | | — | | | | | 155,366
| |
Asset impairment charges | | | — | | | 223,045 | | | — | | | | | — | | | | | 223,045
| ||
Operating income (loss) | | | 392,224 | | | (62,513) | | | (82,253) | | | | | — | | | | | 247,458
| ||
Interest expense | | | 31,744 | | | 28,810 | | | — | | | | | 161,535 | | | 8(G) | | | 200,102
| |
| | | | | | — | | | | | (28,810) | | | 8(H) | | | |||||
| | | | | | — | | | | | (2,284) | | | 8(I) | | | |||||
| | | | | | — | | | | | 9,107 | | | 8(J) | | | |||||
Interest
income | | | (181) | | | (35) | | | — | | | | | — | | | | | (216) | ||
Other
(income) expense, net | | | 29,807 | | | 2,582 | | | — | | | | | — | | | | | 32,389
| ||
Income before income taxes | | | 330,854 | | | (93,870) | | | (82,253) | | | | | (139,549) | | | | | 15,183
| ||
Income tax expense | | | 39,947 | | | 6,237 | | | (18,507) | | | 8(F) | | | (31,398) | | | 8(F) | | | (3,721) |
Net
income (loss) | | | $290,907 | | | $(100,107) | | | $(63,746) | | | | | $(108,151) | | | | | $18,904
| ||
Per common share data (Note 9): | | | | | | | | | | | | | | | |||||||
Earnings
per share | | | | | | | | | | | | | | | |||||||
Basic
earnings per common share | | | $2.15 | | | $(3.44) | | | | | | | | | | | $0.13
| ||||
Diluted earnings per common share | | | $2.13 | | | $(3.44) | | | | | | | | | | | $0.13
| ||||
| | | | | | | | | | | | | | ||||||||
Weighted
average shares outstanding | | | | | | | | | | | | | | | |||||||
Basic | | | 135,383 | | | 29,126 | | | | | | | | | | | 148,275
| ||||
Diluted | | | 136,556 | | | 29,126 | | | | | | | | | | | 150,828 |
• | Restructuring
or integration activities that have yet to be determined or other transaction costs; |
• | The impact of possible cost or growth synergies expected to be achieved by the combined company, as no assurance can be made that such cost or growth synergies will be achieved. |
(Amounts in thousands) | | | Three months ended December 31,
2019 | | | Twelve months ended September 30, 2020 | | | Three
months ended December 31, 2020 | | | Twelve months ended
December 31, 2020 |
Income statement data | | | A | | | B | | | C | | | Note
4 D = B+C-A |
Revenues: | | | | | | | | | ||||
Revenues | | | $283,143 | | | $1,116,270 | | | $287,863 | | | $1,120,990
|
Cost of sales | | | 154,461 | | | 627,669 | | | 164,959 | | | 638,167 |
Gross
profit | | | 128,682 | | | 488,601 | | | 122,904 | | | 482,823 |
Selling,
general and administrative | | | 54,439 | | | 217,071 | | | 55,920 | | | 218,552 |
Research,
development and technical | | | 12,811 | | | 52,311 | | | 12,428 | | | 51,928 |
Asset
impairment charges | | | — | | | 2,314 | | | 7,347 | | | 9,661 |
Operating
income | | | 61,432 | | | 216,905 | | | 47,209 | | | 202,682 |
Interest
expense | | | 11,920 | | | 42,510 | | | 9,608 | | | 40,198 |
Interest
income | | | (315) | | | (670) | | | (23) | | | (378) |
Other
(income) expense, net | | | 397 | | | 1,718 | | | (1,452) | | | (131) |
Income
before income taxes | | | 49,430 | | | 173,347 | | | 39,076 | | | 162,993 |
Provision
for income taxes | | | 10,881 | | | 30,519 | | | 7,546 | | | 27,184 |
Net
Income (loss) | | | $38,549 | | | $142,828 | | | $31,530 | | | $135,809 |
(Amounts
in thousands) | | | Three months ended | | | Twelve
months ended | | | Nine months ended |
Income
statement data | | | A | | | B | | | Note
4 C = B - A |
Revenues: | | | | | | | |||
Revenues | | | $287,863 | | | $1,199,831 | | | $911,968
|
Cost of sales | | | 164,959 | | | 701,662 | | | 536,703 |
Gross
profit | | | 122,904 | | | 498,169 | | | 375,265 |
Selling,
general and administrative | | | 55,920 | | | 228,886 | | | 172,966 |
Research,
development and technical | | | 12,428 | | | 54,195 | | | 41,767 |
Asset
impairment charges | | | 7,347 | | | 230,392 | | | 223,045 |
Operating
income | | | 47,209 | | | (15,304) | | | (62,513) |
Interest
expense | | | 9,608 | | | 38,360 | | | 28,752 |
Interest
income | | | (23) | | | — | | | 23 |
Other
(income) expense, net | | | (1,452) | | | 1,130 | | | 2,582 |
Income
before income taxes | | | 39,076 | | | (54,794) | | | (93,870) |
Provision
for income taxes | | | 7,546 | | | 13,783 | | | 6,237 |
Net
Income (loss) | | | $31,530 | | | $(68,577) | | | $(100,107) |
| | CMC Before
Reclassification | | | Reclassification | | | Notes | | | CMC
as Reclassified | |
ASSETS | | | | | | | | | ||||
Current
assets: | | | | | | | | | ||||
Cash
and cash equivalents | | | $185,979 | | | $— | | | | | $185,979
| |
Trade accounts and notes receivable, net | | | 150,099 | | | — | | | | | 150,099 | |
Inventories,
net | | | 173,464 | | | — | | | | | 173,464 | |
Deferred
tax charges and refundable income taxes | | | — | | | 3,543 | | | (A) | | | 3,543 |
Other
current assets | | | 25,439 | | | (3,543) | | | (A) | | | 21,896 |
Total
current assets | | | 534,981 | | | — | | | | | 534,981 | |
Property,
plant and equipment, net | | | 354,771 | | | — | | | | | 354,771 | |
Other
assets: | | | | | | | | | ||||
Right-of-use
assets | | | — | | | 29,302 | | | (B) | | | 29,302 |
Goodwill | | | 576,902 | | | — | | | | | 576,902 | |
Intangible
assets, net | | | 625,434 | | | — | | | | | 625,434 | |
Deferred
tax assets and other noncurrent tax assets | | | 6,813 | | | — | | | | | 6,813 | |
Other
noncurrent assets | | | 51,984 | | | (29,302) | | | (B) | | | 22,682 |
Total
assets | | | 2,150,885 | | | — | | | | | 2,150,885 | |
LIABILITIES
AND EQUITY | | | | | | | | | ||||
Current
liabilities | | | | | | | | | ||||
Long-term
debt, current maturities | | | $13,313 | | | $— | | | | | $13,313 | |
Accounts
payable | | | 52,748 | | | — | | | | | 52,748 | |
Accrued
expenses, income taxes payable and other current liabilities | | | 139,797 | | | (139,797) | | | (C) | | | — |
Accrued
payroll and related benefits | | | — | | | 47,360 | | | (C) | | | 47,360 |
Other
accrued liabilities | | | — | | | 75,600 | | | (C) | | | 75,600 |
Income
taxes payable | | | — | | | 16,836 | | | (C) | | | 16,836 |
Total
current liabilities | | | 205,858 | | | — | | | | | 205,858 | |
Long-term
debt, excluding current maturities | | | 903,031 | | | — | | | | | 903,031 | |
Pension
benefit obligations and other liabilities | | | — | | | 43,908 | | | (E) | | | 43,908 |
Deferred
tax liabilities and other noncurrent tax liabilities | | | 74,930 | | | 20,693 | | | (F) | | | 95,623 |
Other
long-term liabilities | | | 88,129 | | | (88,129) | | | (D),
(E), (F) | | | — |
Long-term lease liabilities | | | — | | | 23,528 | | | (D) | | | 23,528 |
Equity: | | | | | | | | | ||||
Common
stock | | | 40 | | | — | | | | | 40 | |
Treasury
stock | | | (610,731) | | | — | | | | | (610,731) | |
Additional
paid-in capital | | | 1,052,869 | | | — | | | | | 1,052,869 | |
Retained
earnings | | | 431,968 | | | — | | | | | 431,968 | |
Accumulated
other comprehensive loss | | | 4,791 | | | — | | | | | 4,791 | |
Total
equity | | | 878,937 | | | — | | | | | 878,937 | |
Total
liabilities and equity | | | $2,150,885 | | | $— | | | | | $2,150,885 |
(A) | Reclassification from “Other current assets” to “Deferred tax charges and refundable income taxes” |
(B) | Reclassification from “Other noncurrent assets” to “Right-of-use assets” |
(C) | Reclassification of “Accrued expenses, income taxes payable and other current liabilities” to “Accrued payroll and related benefits,” “Other accrued liabilities,” and “Income taxes payable” |
(D) | Reclassification
from “Other long-term liabilities” to “Long-term lease liabilities” |
(E) | Reclassification from “Other long-term liabilities” to “Pension benefit obligations and other liabilities” |
(F) | Reclassification from “Other long-term liabilities” to “Deferred tax liabilities and other noncurrent tax liabilities” |
(Amounts in thousands) | | | CMC
Before Reclassification | | | Reclassifications | | | Notes | | | CMC
as Reclassified |
| | Note 3 | | | | | | | ||||
| | | | | | | | |||||
Net
sales | | | $1,120,990 | | | $— | | | | | $1,120,990
| |
Cost of sales | | | 638,167 | | | — | | | | | 638,167 | |
Gross
profit | | | 482,823 | | | — | | | | | 482,823 | |
Selling,
general and administrative expenses | | | 218,552 | | | (70,948) | | | (A) | | | 147,604 |
Engineering,
research and development expenses | | | 51,928 | | | — | | | | | 51,928 | |
Amortization
of intangible assets | | | — | | | 70,948 | | | (A) | | | 70,948 |
Asset
impairment charges | | | 9,661 | | | — | | | | | 9,661 | |
Operating
income (loss) | | | 202,682 | | | — | | | | | 202,682 | |
Interest
expense | | | 40,198 | | | — | | | | | 40,198 | |
Interest
income | | | (378) | | | — | | | | | (378) | |
Other
(income) expense, net | | | (131) | | | — | | | | | (131) | |
Income
before income taxes | | | 162,993 | | | — | | | | | 162,993 | |
Income
tax expense | | | 27,184 | | | — | | | | | 27,184 | |
Net
income (loss) | | | $135,809 | | | $— | | | | | $135,809 |
(A) | Reclassification from “Selling, general and administrative expenses” to “Amortization of intangible assets” |
(Amounts
in thousands) | | | CMC Before Reclassification | | | Reclassifications | | | Notes | | | CMC
as Reclassified |
| | Note 3 | | | | | | | ||||
| | | | | | | | |||||
Net
sales | | | $911,968 | | | $— | | | | | $911,968
| |
Cost of sales | | | 536,703 | | | — | | | | | 536,703 | |
Gross
profit | | | 375,265 | | | — | | | | | 375,265 | |
Selling,
general and administrative expenses | | | 172,966 | | | (50,236) | | | (A) | | | 122,730 |
Engineering,
research and development expenses | | | 41,767 | | | — | | | | | 41,767 | |
Amortization
of intangible assets | | | — | | | 50,236 | | | (A) | | | 50,236 |
Asset
impairment charges | | | 223,045 | | | — | | | | | 223,045 | |
Operating
income (loss) | | | (62,513) | | | — | | | | | (62,513) | |
Interest
expense | | | 28,752 | | | 58 | | | (B) | | | 28,810 |
Interest
income | | | 23 | | | (58) | | | (B) | | | (35) |
Other
(income) expense, net | | | 2,582 | | | — | | | | | 2,582 | |
Income
before income taxes | | | (93,870) | | | — | | | | | (93,870) | |
Income
tax expense | | | 6,237 | | | — | | | | | 6,237 | |
Net
income (loss) | | | $(100,107) | | | $— | | | | | $(100,107) |
(A) | Reclassification from “Selling, general and administrative expenses” to “Amortization of intangible assets” |
(B) | Reclassification from “Interest expense” to “Interest income” |
CMC
diluted shares outstanding as of January 10, 2022 | | | 28,610,214 |
Cash consideration per share | | | $133.00
|
Cash consideration (value) | | | $3,805,158 |
CMC diluted shares outstanding as of January 10,
2022 | | | 28,610,214 |
Entegris exchange ratio | | | 0.4506
|
Entegris common shares issued in exchange | | | 12,891,762 |
Entegris closing share price as of January 10,
2022 | | | $133.91 |
Estimated stock consideration to be transferred | | | $1,726,336
|
Fair value of Entegris options issued in exchange for CMC options | | | $83,001 |
Fair value of Entegris RSU’s issued in exchange for CMC PSU’s | | | $5,272
|
Estimate of equity consideration expected to be transferred | | | $1,814,609 |
Estimate
of cash and stock consideration expected to be transferred | | | $5,619,767 |
(Amounts
in thousands) | | | CMC as Reclassified | | | Fair
Value Adjustment | | | Fair Value | | | Goodwill
Calculation | | | Notes |
Total value to allocate | | | | | | | | | $5,619,767 | | | ||||
Inventories,
net | | | $173,464 | | | $48,840 | | | $222,304 | | | | | 7(D) | |
Property,
plant and equipment, net | | | 354,771 | | | 126,271 | | | 481,042 | | | | | 7(E) | |
Intangible
assets, net | | | 625,434 | | | 1,979,566 | | | 2,605,000 | | | | | 7(F) | |
All
other assets (excluding goodwill) | | | 375,028 | | | — | | | 375,028 | | | | | ||
Total
assets | | | $1,528,697 | | | $2,154,677 | | | $3,683,374 | | | | | ||
| | | | | | | | | |
(Amounts in thousands) | | | CMC
as Reclassified | | | Fair Value Adjustment | | | Fair
Value | | | Goodwill Calculation | | | Notes |
Long-term
debt, current maturities | | | $13,313 | | | $2,874 | | | $16,187 | | | | | 7(G) | |
Long-term
debt, excluding current maturities | | | 903,031 | | | 9,157 | | | 912,188 | | | | | 7(G) | |
Deferred
tax liabilities and other noncurrent tax liabilities | | | 95,623 | | | 482,095 | | | 577,718 | | | | | 7(H) | |
All
other liabilities | | | 259,981 | | | — | | | 259,981 | | | | | ||
Total
liabilities | | | $1,271,948 | | | $494,126 | | | $1,766,074 | | | | | ||
| | | | | | | | | | ||||||
Fair
value of net assets (excluding goodwill) | | | | | | | | | $1,917,300 | | | ||||
| | | | | | | | | | ||||||
Entegris
goodwill attibutable to CMC | | | | | | | | | $3,702,468 | | | 7(I) |
(A) | Represents the cash proceeds paid for the cash consideration of the acquisition and one-time transaction-related costs to be incurred prior to, or concurrent with, the closing of the merger including bank fees. Acquisition-related transaction costs, such as investment banker, advisory, legal, and other professional fees are not included as a component of consideration transferred but are expensed as incurred. See also note 7(J) for the impact to retained earnings. |
(Amounts
in thousands) | | | 2021 |
Cash component of Merger consideration (Note 5) | | | $(3,805,158) |
Cash
paid for Entegris and CMC combined transaction fees and expenses | | | (105,175) |
Total pro forma adjustment to Cash and cash equivalents | | | $(3,910,333) |
(B) | Represents
the cash reduction related to the equity issuance costs. |
(C) | Represents the elimination of $269 between accounts receivable and accounts payable resulting from transactions between Entegris and CMC which would be eliminated upon consolidation. |
(D) | Represents the preliminary fair value of inventories, which considers replacement cost for materials and net realizable value for work-in-process and finished goods. Refer to note 8(C) for further details. |
(E) | Represents the preliminary fair value and resulting adjustment to
net property, plant and equipment. The preliminary amounts assigned to net property, plant and equipment and estimated weighted average useful lives are as follows: |
(Amounts in thousands) | | | Preliminary Fair Value | | | Estimated
Weighted Average Useful Life (in years) |
Property, Plant and Equipment | | | $437,500 | | | 8 |
Construction
in progress | | | 43,542 | | | 15 |
Total
fair value of CMC’s property, plant and equipment, net | | | $481,042 | | | |
Less:
CMC’s historical property, plant and equipment, net | | | 354,771 | | | |
Pro
forma adjustment | | | $126,271 | | |
(F) | Represents
the adjustment of historical and newly created intangible assets acquired by the Company to their estimated fair values (other than Goodwill). As part of the preliminary valuation analysis, the Company identified intangible assets, including technology, trade names, and customer relationships. The fair value of identifiable intangible assets is determined considering market research and a limited valuation analysis of the intangible assets. Since all information required to perform a detailed valuation analysis of |
(Amounts in thousands) | | | Preliminary Fair Value | | | Estimated
Weighted Average Useful Life (in years) |
Customer relationships | | | $1,860,000 | | | 20 |
Developed
Technology | | | 510,000 | | | 10 |
Trademark
/ Trade Name | | | 235,000 | | | 15 |
Total
fair value of CMC’s intangible assets (other than Goodwill) | | | $2,605,000 | | | |
Less:
CMC historical other intangible assets | | | 625,434 | | | |
Pro
forma adjustment | | | $1,979,566 | | |
(G) | Represents
the adjustment to eliminate deferred financing costs. |
(H) | Represents the preliminary adjustment to deferred tax liabilities primarily associated with the one-time deductible transaction and fair value adjustments for property, plant, and equipment, inventories, and other intangible assets excluding goodwill, using a blended statutory tax rate of 22.5%. |
(I) | Represents the excess of the preliminary consideration over the preliminary fair value of the assets acquired and liabilities assumed. Goodwill will be tested for impairment at least annually and whenever events or circumstances have occurred that may indicate a possible impairment. Goodwill is attributable to planned
growth in new markets and synergies expected to be achieved from the combined operations of Entegris and CMC. Goodwill is not expected to be deductible for income tax purposes. |
(J) | The following table summarizes the transaction accounting adjustments impacting equity: |
(Amounts in thousands) | | | Adjustments
to Historical Equity | | | New Equity Structure | | | Other
Items | | | Transaction Accounting Adjustments |
Common stock | | | $(40) | | | $129 | | | $— | | | $89
|
Treasury stock | | | 610,731 | | | — | | | — | | | 610,731
|
Additional paid-in capital | | | (1,052,869) | | | 1,798,480 | | | — | | | 745,611
|
Retained earnings | | | (431,968) | | | — | | | (48,549) | | | (480,517) |
Accumulated
other comprehensive loss | | | (4,791) | | | — | | | — | | | (4,791) |
Total
equity | | | $(878,937) | | | $1,798,609 | | | $(48,549) | | | $871,123 |
(K) | Represents the cash proceeds of $4,895,000 from the debt financing funding of the merger consideration from the facilities (see note 2 for further details). |
(L) | Represents the debt financing obligation incurred totaling $4,895,000 from the facilities (see note 2 for further details), net of applicable debt issuance costs of $85,000. For illustrative purposes of presenting the pro forma financial statements, we have not bifurcated debt issuance costs between Long-term, current maturities and Short-term debt. Instead, we have included the full $85,000 of debt issuance costs within Long-term debt,
excluding current maturities. |
(M) | Represents the cash outflow for the payment of Entegris and CMC debt that was extinguished and refinanced, net of applicable debt issuance costs, as well as the extinguished outstanding interest rate swaps noted within note 7(Q) and 7(S), respectively. |
(Amounts
in thousands) | | | 2021 |
Cash settlement of interest rate swap asset related to CMC’s debt | | | $12,335
|
Extinguishment of CMC’s long term debt, current maturities | | | (16,187) |
Cash settlement of interest rate swap liability related to CMC’s debt | | | (2,995) |
Extinguishment
of CMC’s long-term debt, excluding current maturities | | | (912,188) |
Partial extinguishment of Entegris debt | | | (143,899) |
Cash
settlement of CMC’s terminated swap | | | (35,233) |
Cash payment of new debt issuance costs | | | (85,000) |
Cash
outflow for pay down for extinguishment of Entegris and CMC debt and refinancing | | | $(1,183,166) |
(N) | Represents the paydown of $145,000 of Entegris debt associated with the refinancing arrangement, net of applicable debt issuance costs of $1,101. |
(O) | Represents
the elimination of CMC outstanding debt of $928,375, inclusive of unamortized deferred financing fees, associated with the refinancing arrangement of $12,031. |
(P) | Represents the expected tax benefit of the anticipated CMC transaction costs to be incurred prior to, or concurrent with, the closing of the merger including bank fees, legal fees or other transaction expenses that are treated as a reduction in goodwill. |
(Q) | Represents the elimination of CMC outstanding interest rate swaps associated with the extinguished and refinanced CMC debt as outlined in note 7(O). |
(R) | Represents
the reclassification of the CMC deferred tax asset of $3,809 from Deferred tax liabilities and other noncurrent tax liabilities to Deferred tax charges and refundable income taxes. Upon the extinguishment of the existing CMC debt and interest rate swaps, any associated deferred tax assets/liabilities will become current income taxes receivable/payable. |
(S) | Represents the elimination of the outstanding terminated CMC interest rate swap. During the last quarter of 2020, CMC entered into a new interest rate swap agreement and the existing interest rate swap was terminated and the hedging relationship was de-designated. |
(T) | Represents the estimated cash outflow to fund a
rabbi trust (recorded within other current assets) which is required immediately prior to a change in control in which CMC or its successor must establish to fully fund the expected severance benefits due under the applicable change in control agreements. Our estimate of funding for the rabbi trust is based upon preliminary assumptions that are subject to further refinement as additional information is obtained. |
(A) | Transactions
between Entegris and CMC have been eliminated as if Entegris and CMC were consolidated affiliates for the periods presented. |
(B) | Represents the preliminary pro forma adjustment to recognize changes to straight-line depreciation expense resulting from the fair value adjustments to acquired property, plant, and equipment. The preliminary fair value of the property, plant and equipment may not represent the actual value of the PP&E when the Merger is completed resulting in a potential difference in straight-line depreciation expense, and that difference may be material. For example, an increase or decrease of 15% in the fair value of property, plant and equipment on the closing date of the Merger from the fair value of property, plant and equipment assumed |
(C) | Represents the additional cost of goods sold recognized in connection with the step-up of inventory valuation.
Entegris will recognize the increased value of inventory in cost of sales as the inventory is sold, which for purposes of these pro forma financial statements is assumed to occur within the first year after the merger. Refer to note 7(D) for additional details. |
(D) | Represents estimated incremental straight-line amortization expense resulting from the allocation of purchase consideration to definite-lived intangible assets subject to amortization. An increase or decrease of 15% in the fair value of intangible assets on the closing date of the Merger from the fair value of intangible assets assumed in these pro forma financial statements would change the value of the intangible assets approximately by $390,750, which would be reflected as a corresponding increase or decrease to straight-line amortization expense of $26,050
assuming an average useful life of 15 years. |
(E) | Represents one-time transaction-related costs anticipated to be incurred prior to, or concurrent with, the closing of the merger including bank fees, legal fees, consulting fees, and other transaction expenses. These costs will not affect the Company’s statement of income beyond twelve months from the acquisition date. |
(F) | Represents the income tax effect of the transaction accounting adjustments related to the merger calculated using a blended statutory income tax rate of 22.5%. The effective tax rate of the combined company could be
significantly different depending on the mix of actual earnings in foreign jurisdictions for periods subsequent to completion of the merger. |
(G) | Represents the estimated interest expense on the new debt raised to fund in part the consideration paid to effect the merger assuming a weighted average interest rate of 4.4% which is subject to market fluctuations until such time as the loan facilities are in put in place (refer also to note 2 for further details). From a sensitivity analysis perspective, an increase or decrease of 12.5 basis points in anticipated interest rates would result in an increase or decrease of $269 and $202 in interest expense for the year ended December 31, 2020 and nine-months ended September 30, 2021
which may not have a material impact on pro forma interest expense. |
(H) | Represents the elimination of interest expense associated with the extinguished CMC debt outstanding. |
(I) | Represents the elimination of interest expense associated with the partial payment of Entegris debt outstanding. |
(J) | Represents the amortization of deferred financing costs associated with the aggregate new debt facilities (refer also to note 2 for further details). For illustrative purposes of presenting the pro forma financial statements, we
have allocated all of the deferred financing costs to the senior secured first lien term B facility which has an expected seven-year term. |
(K) | Represents the incremental differences in stock-based compensation for replaced equity awards. Subject to the terms of the merger agreement, unvested CMC performance-based restricted share unit awards will be replaced and converted into Entegris time vested restricted share unit awards. Our estimates are based upon preliminary assumptions that are subject to further refinement as additional information is obtained. |
(Amounts in thousands, except per share data) | | | Year
Ended | | | Nine-months ended |
Net
income attributable to Entegris common stock | | | $123,896 | | | $18,904
|
| | | | |||
Basic
weighted average Entegris shares outstanding | | | 134,837 | | | 135,383
|
CMC shares converted to Entegris shares1 | | | 12,892 | | | 12,892
|
Pro forma basic weighted average shares outstanding | | | 147,729 | | | 148,275
|
(Amounts in thousands, except per share data) | | | Year
Ended | | | Nine-months ended |
Dilutive
effect of securities: | | | | | ||
Weighted
common shares assumed upon exercise of Entegris options and vesting of Entegris restricted stock units | | | 1,429 | | | 1,173
|
Entegris options issued in consideration for CMC options | | | 1,251 | | | 1,251
|
Entegris RSU’s issued in exchange for CMC PSU’s | | | 129 | | | 129
|
Pro forma diluted weighted average shares outstanding | | | 150,538 | | | 150,828
|
| | | | |||
Pro
forma basic earnings per share | | | $0.84 | | | $0.13
|
Pro forma diluted earnings per share | | | $0.82 | | | $0.13 |
(1) | Represents the estimated number of shares of Entegris common stock to be issued to CMC stockholders based on the number of shares of CMC common stock outstanding as of January 10, 2022 (28,610 CMC shares outstanding - see Footnote 5) and after giving effect to the exchange ratio of 0.4506 as determined in the merger agreement. This amount is inclusive of 86 shares of prior CMC equity-based awards that were fully vested and converted to merger consideration. |
• | Stock Options. Each outstanding stock option will vest in full and be assumed and converted automatically into an option to purchase, on the same terms and conditions as were applicable to such stock option immediately prior to the effective time, the number of shares of Entegris common stock (rounded down to the nearest whole number of shares of Entegris common
stock) determined by multiplying the number of shares of CMC common stock subject to the stock option immediately prior to the effective time by the equity award exchange ratio. The equity award exchange ratio is the sum of (i) the exchange ratio and (ii) the quotient (rounded to the fourth decimal place) of (x) the cash consideration divided by (y) the Entegris trading price. |
• | Restricted Shares. Each outstanding restricted share will vest in full, become free of any transferability restrictions and be cancelled and converted into the right to receive the merger consideration, and all dividends, if any, accrued but unpaid as of the effective time with respect to such restricted share will vest and be paid in cash. |
• | Restricted
Stock Units. (i) Each outstanding RSU award that was granted prior to the date of the merger agreement or to a non-employee member of the CMC board of directors will vest in full and be cancelled and converted into the right to receive the merger consideration (with any accrued but unpaid dividend equivalents paid in cash) and (ii) each other RSU award not described in clause (i) will be assumed and converted into a restricted stock unit award, with the same terms and conditions as were applicable to such RSU award immediately prior to the effective time, relating to the number of shares of Entegris common stock equal to the number of shares of CMC common stock subject to such RSU award immediately prior to the effective time multiplied by the equity award exchange ratio (with any accrued but unpaid dividend equivalents to be assumed and become an obligation in connection with the converted restricted stock unit award). |
• | Deferred
Stock Units. Each DSU award will vest in full, become non-forfeitable and be cancelled and converted into the right to receive the merger consideration (with any accrued but unpaid dividend equivalents paid in cash). |
• | Performance Stock Units. Each PSU award will be assumed and converted into a time-based restricted stock unit award, with the same terms and conditions as were applicable to such PSU award immediately prior to the effective time (except that the performance-based vesting conditions applicable to such PSU award immediately prior to the effective time will not apply from and after the effective time), relating to the number of shares of Entegris common stock equal to the number of shares of CMC common stock subject to such PSU award based on the achievement of the applicable performance
metrics at target level of performance multiplied by the equity award exchange ratio (with any accrued but unpaid dividend equivalents to be assumed and become an obligation in connection with the converted time-based restricted stock unit award). |
• | All unpaid amounts earned or otherwise payable to the executive officer as of his or her date of termination, including accrued but unpaid base salary, expense reimbursements, vacation pay and unpaid bonuses and incentive compensation, paid within ten days of termination; |
• | A
pro-rated bonus equal to the product of (x) the executive officer’s “bonus amount” (meaning the highest of the executive officer’s target bonus amount for the fiscal year in which the change in control occurs, the executive officer’s target bonus amount for the fiscal year in which the termination date occurs and the highest bonus amount paid or payable to the executive officer in respect of any of the three fiscal years preceding the fiscal year in which the change in control occurs) and (y) the quotient of the number of days elapsed through the executive officer’s date of termination in the fiscal year over 365, paid in a lump sum within 30 days after termination; |
• | An amount equal to two times (three times for Mr. Li) the sum of (i) the executive officer’s annual base salary (at the rate in effect immediately prior
to the change in control or on the date of termination, whichever is higher), (ii) the executive officer’s bonus amount and (iii) an amount equal to the contributions made or credited by CMC under all qualified and non-qualified retirement plans for the benefit of the executive officer for the most recently completed plan year of each such plan, paid in a lump sum within ten days after termination; |
• | Continued health and welfare benefits for 24 months (36 months for Mr. Li) following the date of termination, without any required contributions from the executive officer and at a level no less favorable than the most favorable of the benefits provided to the executive officer before the earlier of the executive officer’s date of termination and the change in control; |
• | An amount equal to the product of (i) the annual premium payments based on the conversion rates applicable to the executive officer as of the date of termination in respect of the group term life insurance policy under which the executive officer was covered immediately prior to the termination date and (ii) two (three for Mr. Li), paid in a lump sum within ten days after the termination; |
• | Outplacement
services at a cost not to exceed 15% of the executive officer’s annual base salary until not later than the last day of the second calendar year that begins after the executive officer’s termination date; and |
• | All amounts earned by, or awarded to, the executive officer under any other incentive compensation plan or benefit plan will immediately vest on the date of termination and paid in accordance with the terms of the plans. |
• | The
effective time (which will constitute a change in control or term of similar import under each applicable CMC agreement or arrangement) occurred on January 21, 2022 (which is the assumed date solely for purposes of this golden parachute compensation disclosure); |
• | Each named executive officer other than Mr. Beamer will experience a qualifying termination as of the effective time; |
• | Mr. Beamer will have terminated employment prior to the merger and received the severance provided under the Beamer letter of understanding, but he will receive a lump sum payment equal to the difference between the amount of severance he would have
received under his change in control agreement, less the amount of severance provided under the Beamer letter of understanding; |
• | The named executive officer’s base salary and bonus amount will remain unchanged from those applicable as of January 21, 2022; |
• | Each named executive officer’s outstanding CMC equity awards are those that are outstanding and unvested as of January 21, 2022, other than with respect to Mr. Beamer, whose outstanding awards will only be the unvested PSUs that remain outstanding after his separation date as described above in the section entitled “—Letter
of Understanding with Scott D. Beamer”; |
• | With respect to the severance amounts equal to the applicable multiple of the contributions made or credited by CMC under all qualified and non-qualified retirement plans for the benefit of the named executive officer for the most recently completed plan year, reflects the actual “true-up” matching contributions made by CMC on behalf of the named executive officer to the CMC defined contribution 401(k) plan in the 2020 calendar year and the actual employer contributions made by CMC on behalf of the executive officer to the CMC supplemental employee retirement plan in the 2021 calendar year; |
• | The price per share of CMC
common stock at the effective time of the merger is $188.03 (the average closing market price over the first five business days following the first public announcement of the merger on December 15, 2021, as required by Item 402(t) of Regulation S-K); |
• | For purposes of the unvested PSU awards set forth in the tables, achievement at the target level of performance; and |
• | For Ms. Press, Mr. Beamer and Drs. Woodland and Dysard, assumes that no reduction will be necessary to mitigate the impact of Sections 280G and 4999 of the Code. |
Named
Executive Officers | | | Cash(1) | | | Equity(2) | | | Benefits(3) | | | Tax
Reimbursement(4) | | | Total |
| | $6,758,058
| | | $13,993,976 | | | $246,277 | | | $0 | | | $20,998,311 | |
Jeanette
A. Press | | | $2,168,137 | | | $1,095,809 | | | $144,268 | | | — | | | $3,408,213 |
Daniel
D. Woodland | | | $2,891,841 | | | $3,450,428 | | | $163,018 | | | — | | | $6,505,287 |
Jeffrey
M. Dysard | | | $2,661,095 | | | $2,853,804 | | | $154,843 | | | — | | | $5,669,742 |
H.
Carol Bernstein | | | $2,629,135 | | | $2,784,324 | | | $151,813 | | | $0 | | | $5,565,272 |
Scott
D. Beamer | | | $1,116,051 | | | $645,342 | | | — | | | — | | | $1,761,393 |
(1) | Cash. The cash amount payable to the named executive officers other than Mr. Beamer consists of (i) a pro-rated bonus based on the named executive officer’s bonus amount and the number of days elapsed in CMC’s fiscal year through the named executive officer’s date of termination, paid in a lump sum within 30 days after termination, (ii) an amount equal to two times (three times for Mr. Li) the sum of (a) the executive officer’s annual base salary (at the rate in effect immediately prior to the change in control or on the date of termination, whichever is higher), (b) the named executive officer’s bonus amount and (c) an amount equal to the contributions made or credited by CMC under all qualified and non-qualified retirement plans for the benefit of the named executive officer for the most recently
completed plan year of each such plan, paid in a lump sum within ten days after termination, and (iii) an amount equal to the product of (x) the annual premium payments based on the conversion rates applicable to the executive officer as of the date of termination in respect of the group term life insurance policy under which the executive officer was covered immediately prior to the termination date and (y) two (three for Mr. Li), paid in a lump sum within ten days after the termination, each of which is payable on a “double-trigger” basis upon a qualifying termination on or within 13 months of the closing, and (iv) the amount of the named executive officer’ s retention award under the retention program, 50% of which will vest on a “ single-trigger” basis on the closing date and 50% of which will vest on a “ single-trigger” basis on the six month anniversary of the closing date (or on a “ double-trigger” basis upon a termination of such named
executive officer’ s employment by Entegris other than for cause or a resignation for good reason following the closing date and prior to the six month anniversary of the closing date). For Mr. Beamer, the cash severance amount represents the amount of the lump sum payment equal to the difference between the amount of severance he would have received under his change in control agreement, which is payable on a “double-trigger” basis if the merger occurs within one year of his qualifying termination of employment, less the amount of severance provided under the Beamer letter of understanding. For Ms. Press, also includes the $150,000 retention award that was granted in connection with her appointment as Interim Chief Financial Officer and which would be payable to her at the effective time on a “single-trigger” basis under the Press retention agreement. |
Named
Executive Officers | | | Pro-Rated Bonus | | | Cash Severance | | | Life
Insurance Premiums | | | Retention Award |
| | $253,151 | | | $4,856,008 | | | $48,900 | | | $1,600,000 | |
Jeanette
A. Press | | | $57,534 | | | $1,178,003 | | | $32,600 | | | $900,000 |
Daniel
D. Woodland | | | $103,531 | | | $1,755,711 | | | $32,600 | | | $1,000,000 |
Jeffrey
M. Dysard | | | $88,856 | | | $1,539,639 | | | $32,600 | | | $1,000,000 |
H.
Carol Bernstein | | | $89,508 | | | $1,507,027 | | | $32,600 | | | $1,000,000 |
Scott
D. Beamer | | | — | | | $1,116,051 | | | — | | | — |
(2) | Equity.
As described in the section entitled “The Merger Agreement—Treatment of CMC Equity Awards,” represents the value of the unvested stock options, restricted shares and RSUs that would vest at the effective time of the merger (i.e., “single-trigger”) and the value of the PSUs that would vest on a “double-trigger” basis upon a qualifying termination within 12 months after the effective time. None of CMC’s named executive officers hold any RSU awards that were granted after the date of the merger agreement. |
Named
Executive Officers | | | Stock Options | | | Restricted Shares | | | RSUs | | | PSUs |
| | $2,990,648 | | | $31,401 | | | $3,273,978 | | | $7,697,948 | |
Jeanette
A. Press | | | $148,137 | | | $3,008 | | | $644,755 | | | $299,908 |
Daniel
D. Woodland | | | $913,339 | | | — | | | $1,005,772 | | | $1,531,316 |
Jeffrey
M. Dysard | | | $704,621 | | | $131,433 | | | $791,794 | | | $1,225,956 |
H.
Carol Bernstein | | | $733,481 | | | — | | | $813,230 | | | $1,237,613 |
Scott
D. Beamer | | | — | | | — | | | — | | | $645,342 |
(3) | Benefits.
The benefits payable or to be provided to the named executive officers other than Mr. Beamer consist of (i) continued health and welfare benefits for 24 months (36 months for Mr. Li) following the date of termination, without any required contributions from the named executive officer and (ii) outplacement services at a cost not to exceed 15% of the named executive officer’s annual base salary. Such amounts are payable on a “double-trigger” basis upon a qualifying termination on or within 13 months of the closing. |
Named Executive Officers | | | Health
and Welfare Benefits | | | Outplacement |
| | $136,027 | | | $110,250 | |
Jeanette
A. Press | | | $88,018 | | | $56,250 |
Daniel
D. Woodland | | | $88,018 | | | $75,000 |
Jeffrey
M. Dysard | | | $88,018 | | | $66,825 |
H.
Carol Bernstein | | | $88,018 | | | $63,795 |
Scott
D. Beamer | | | — | | | — |
(4) | Tax
Reimbursement. The change in control agreements with Mr. Li and Ms. Bernstein provide that in the event that the Mr. Li or Ms. Bernstein receives any payments or benefits that are subject to the excise tax under Section 4999 of the Code, the named executive officer would receive a payment that puts him or her in the same after-tax position as though such tax did not apply. Based on the assumptions described above the tables, no such tax reimbursement payments would apply. |
• | an individual citizen or resident of the United States; |
• | a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any state thereof or the District of Columbia; |
• | a
trust if it (i) is subject to the primary supervision of a U.S. court and one or more United States persons (as defined in Section 7701(a)(30) of the Code) have the authority to control all substantial decisions of the trust, or (ii) has a valid election in effect under applicable Treasury Regulations to be treated as a United States person; or |
• | an estate that is subject to U.S. federal income tax on its income regardless of its source. |
• | a bank or other financial institution; |
• | a tax-exempt or governmental organization; |
• | a partnership, subchapter S corporation or other pass-through entity or an investor in the foregoing; |
• | an
insurance company; |
• | a regulated investment company or real estate investment trust; |
• | a mutual fund; |
• | a broker or dealer in securities, stocks, commodities or currencies; |
• | a trader in securities who elects the mark-to-market method of accounting for securities; |
• | a
U.S. expatriate, former citizen or long-term resident of the United States; |
• | a person who actually or constructively owned more than five percent (5%) (by vote or value) of the outstanding shares of CMC common stock at any time during the five-year period ending on the date of the merger; |
• | a CMC stockholder who received CMC common stock through the exercise of employee stock options or through a tax-qualified retirement plan or otherwise as compensation; |
• | a
person that has a functional currency other than the U.S. dollar; |
• | a person subject to special tax accounting rules as a result of any item of gross income with respect to CMC common stock being taken into account in an “applicable financial statement” as defined in Section 451(b) of the Code; |
• | a holder of options granted under any CMC benefit plan; or |
• | a CMC stockholder who holds CMC common stock as part of a hedge, straddle or a constructive sale or conversion transaction. |
| | CMC | | | Entegris | |
Authorized
Capital Stock | | | CMC has authority to issue 20,000,000 shares of common stock, $0.001 par value per share, and 200,000,000 shares of preferred stock, $0.001 par value per share. As of the record date, CMC had 28,575,038 shares of CMC common stock and no shares of preferred
stock issued and outstanding. | | | Entegris has authority to issue 400,000,000 shares of common stock, $.01 par value per share, and 5,000,000 shares of preferred stock, $.01 par value per share. |
| | | | |||
Preferred
Stock | | | The CMC board of directors is authorized to provide for the issuance of shares of preferred stock from time to time in one or more series, and authorized to fix and alter the dividend rights, dividend rates, terms of redemption (including sinking fund provisions), redemption prices, liquidation preferences, conversion rights, voting rights and the number of shares constituting any such series and the designation thereof, or any of them. | | | The
Entegris board of directors is authorized to provide for the issuance of shares of preferred stock from time to time in one or more series, and authorized to fix and alter the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares then outstanding) by the affirmative vote of the holders of a majority of the common stock, without a vote of the holders of preferred stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any preferred stock designation. |
| | | | |||
Voting
Rights | | | Each holder of CMC common stock is entitled to one vote for each share of common stock held by such stockholder. | | | Each holder of Entegris common stock is entitled to one vote
for each share of common stock held of record by such stockholder. |
| | | | |||
Dividend
Rights | | | The CMC bylaws provide that the CMC board of directors may declare and pay dividends upon the shares of its capital stock, but only out of funds available for the payment of dividends as provided by law. Under
the DGCL, the directors of a corporation may declare and pay dividends upon the shares of its capital stock either out of its surplus or, if there is no such surplus, out | | | The Entegris bylaws provide that the board of directors may set apart a reserve or reserves as working capital or for any other purposes, and to abolish or add to any such reserve or reserves from time to time. The board also has the power to determine, in its discretion, what part of such assets available for dividends
in excess of such reserve or reserves will be declared in dividends and paid to the stockholders of the corporation. |
| | CMC | | | Entegris | |
| | of
its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. | | | ||
| | | | |||
Other
Rights | | | Holders of CMC common stock are not entitled to preemptive rights with respect to any shares which may be issued, and there are no conversion rights or redemption, purchase, retirement or sinking fund provisions with respect to CMC common stock. | | | Holders
of Entegris common stock are not entitled to preemptive rights with respect to any shares which may be issued, and there are no conversion rights or redemption, purchase, retirement or sinking fund provisions with respect to Entegris common stock. |
| | | | |||
Class
of Directors | | | The CMC board of directors is divided into three classes, as nearly equal in number as possible. At each annual meeting of the stockholders of CMC, the successors of the class of directors whose term expires at that meeting will be elected by a plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. | | | Entegris
does not have a classified board. |
| | | | |||
Number
of Directors | | | Under the CMC charter and bylaws, the number of directors constituting the CMC board of directors will be as determined from time to time by resolution of a majority of the CMC board of directors. At present, CMC has eight directors. | | | Under
the Entegris charter and bylaws, the number of directors constituting the Entegris board of directors will be determined by resolution of such board, but in no event will be less than three. At present, Entegris has eight directors. |
| | | | |||
Election
of Directors | | | Directors are elected by a plurality of the votes cast by the stockholders entitled to vote in the election of directors at a meeting of the stockholders at which a quorum is present. Under the CMC corporate governance guidelines, in an uncontested election,
any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election must promptly tender his or her resignation following certification of the stockholder vote for such election. Cumulative voting is prohibited in the election of directors. | | | Each
director is elected by a majority of the votes cast with respect to that director; provided that, if the number of nominees exceeds the number of directorships to be filled, the directors will be elected by a plurality of the votes cast. |
| | | | |||
Term
of Office | | | The CMC charter provides for three classes of directors that are intended to consist as nearly as possible to one third of the total number of directors serving on the board. The directors are elected to three-year terms. The elections of the directors are staggered such that one class of directors will be elected in each year. | | | The
Entegris bylaws provide for all directors to be elected at each annual meeting for terms that expire at the next succeeding annual meeting. Each director holds office until the election and qualification of his or her successor or |
| | CMC | | | Entegris | |
| | Each
director will hold office until expiration of the term for which he or she is elected and until a successor has been duly elected and qualified. | | | until his or her earlier death, resignation or removal. | |
| | | | |||
Removal
of Directors | | | Under the CMC charter and bylaws, any director may be removed from office with or without cause upon the affirmative vote of holders of at least 80% of the CMC outstanding common stock, voting as a single class. A
director may not be removed by the stockholders at a meeting unless the notice of the meeting states that the purpose, or one of the purposes, of the meeting is removal of the director. | | | Under the Entegris bylaws, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the then outstanding shares of Entegris’ capital stock. |
| | | | |||
Filling
Vacancies on the Board | | | Vacancies on the board of directors are filled by a majority of the remaining directors, although less than a quorum, or by CMC stockholders if the vacancy was caused by the action of CMC stockholders. | | | Vacancies,
however occurring, may be filled only by a vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. The Board may not fill a vacancy on the Board of Directors with any candidate who has not agreed to tender in advance of his or her appointment to the board of directors an irrevocable resignation to be effective if such director does not receive the required majority vote at the next meeting for the election of directors and the board accepts such resignation. |
| | | | |||
Director
Nominations and Stockholder Proposals | | | The CMC bylaws require advance notice of the nomination, other than by or at the direction of the CMC board of directors, of candidates for election as directors, as well as for other stockholder proposals, to be considered at special meetings of stockholders. To
be timely, such stockholder’s notice must be delivered to or mailed and received by the secretary of CMC not less than the close of business on the 90th day nor more than the close of business on the 120th day before the first anniversary of the previous year’s annual meeting, except that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be delivered not earlier than | | | The Entegris charter and bylaws
require advance notice of the nomination, other than by or at the direction of the Entegris board of directors, to be considered at special meetings of stockholders. To be timely, such stockholder’s notice must be delivered or mailed to and received by the secretary of Entegris not less than 90 days nor more than 120 days before the first anniversary of the previous year’s annual meeting. |
| | CMC | | | Entegris | |
| | the
close of business on the 120th day before such annual meeting and not later than the close of business on the later of the 90th day before such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made by CMC. | | | ||
| | | | |||
Special
Meetings of Stockholders | | | The date, time and location of, and record date for, any such special meeting is determined by the CMC board of directors or the officer calling the meeting may designate. Under the CMC charter, special meetings of stockholders for any purpose may
be called only by the CMC board of directors, its chairman or, at the written request of a majority of the CMC board of directors, the president, and the power of stockholders to call a special meeting will be specifically denied. | | | Special meetings of stockholders may be called at any time by only the chairman of the board of directors, the chief executive officer (or if there is no chief executive officer, the president), or by the board of directors pursuant to a resolution adopted by the affirmative vote of a majority of the total number of directors then in office. Any
business transacted at such special meetings of stockholders must be limited to matters relating to the purpose or purposes stated in the notice of the meeting. |
| | | | |||
Quorum | | | Under
the CMC bylaws, the holders of a majority in number of the total outstanding shares of stock of CMC entitled to vote at such meeting, present in person or represented by proxy, constitute a quorum of the stockholders for all purposes, unless the representation of a larger number of shares is required by law, by the CMC charter or bylaws, in which case the representation of the number of shares so required will constitute a quorum; provided that at any meeting of the stockholders at which the holders of any class of stock of CMC will be entitled to vote separately as a class, the holders of a majority in number of the total outstanding shares of such class, present in person or represented by proxy, will constitute a quorum for purposes of such class vote unless the representation
of a larger number of shares of such class will be required by law, by the CMC charter or bylaws. Whether or not a quorum will be present in person or represented at any meeting of the CMC stockholders, the holders of a majority in number of the shares of stock of CMC present in person or represented by proxy and entitled to vote at such meeting may adjourn such meeting from time to time; provided, however, that if the holders of any class of stock of CMC are entitled to vote separately as a class upon any matter at such meeting, any | | | Under
the Entegris bylaws, the holders of a majority of the shares of Entegris’ common stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, will constitute a quorum of stockholders for al purposes unless a larger number of shares is required by law, the Entegris Certificate of Incorporation or bylaws. Any meeting of stockholders may be adjourned to any
other time and to any other place at which a meeting of stockholders may be held under the bylaws by a majority of the stockholders present or represented at the meeting and entitled to vote, although less than a quorum, or, if no stockholder is present, by any officer entitled to preside at or to act as Secretary of such meeting. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. |
| | CMC | | | Entegris | |
| | adjournment
of the meeting in respect of action by such class upon such matter will be determined by the holders of a majority of the shares of such class present in person or represented by proxy and entitled to vote at such meeting. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holders of any class of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted by them at the original meeting. If the adjournment is
for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting will be given to each stockholder of record entitled to vote at the adjourned meeting. | | | ||
| | | | |||
Written
Consent by Stockholders | | | Any action required or permitted to be taken by CMC stockholders may be effected only at a duly called annual or special meeting of stockholders and may not be effected by a written consent in lieu of a meeting of stockholders. | | | Stockholders
may not take any action by written consent in lieu of a meeting. |
| | | | |||
Business
Combinations with Interested Stockholders | | | Section 203 of the DGCL generally prohibits “business combinations,” including mergers, sales and leases of assets, issuances of securities and similar transactions by a corporation or a subsidiary with an interested stockholder who beneficially owns 15% or more of a corporation’s voting stock, within three years after the person or entity becomes an interested stockholder, unless: (i) the board of directors of the target corporation has approved, before the acquisition time, either the business combination or the transaction
that resulted in the person becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in the person becoming an interested stockholder, the person owns at least 85% of the corporation’s voting stock (excluding shares owned by directors who are officers and shares owned by employee stock plans in which participants do not have the right to determine confidentially whether shares will | | | Section 203 of the DGCL generally prohibits “business combinations,” including mergers, sales and leases of assets, issuances of securities and similar
transactions by a corporation or a subsidiary with an interested stockholder who beneficially owns 15% or more of a corporation’s voting stock, within three years after the person or entity becomes an interested stockholder, unless: (i) the board of directors of the target corporation has approved, before the acquisition time, either the business combination or the transaction that resulted in the person becoming an interested stockholder, (ii) upon consummation of the transaction that resulted in the person becoming an interested stockholder, the person owns at least 85% of the corporation’s voting stock (excluding shares owned by directors who are officers and shares owned by employee stock plans in which participants do not have the right to determine confidentially whether shares will |
| | CMC | | | Entegris | |
| | be
tendered in a tender or exchange offer) or (iii) after the person or entity becomes an interested stockholder, the business combination is approved by the board of directors and authorized at a meeting of stockholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock not owned by the interested stockholder. CMC has not opted out of this provision. | | | be tendered in a tender or exchange offer) or (iii) after the person or entity becomes an interested stockholder, the business combination is approved by the board of directors and authorized at a
meeting of stockholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock not owned by the interested stockholder. Entegris has expressly elected to be governed by this provision. | |
| | | | |||
Limitations
of Personal Liability of Directors | | | As permitted by Section 102(b)(7) of the DGCL, the CMC charter eliminates the liability of a director to the corporation or its stockholders for monetary damages for such breach of fiduciary duty as a director, except for liabilities arising (i) from any breach of the director’s duty of loyalty to the corporation or its stockholders; (ii) from acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under section 174 of the DGCL; or (iv) from any transaction from which the director derived
an improper personal benefit. | | | As permitted by Section 102(b)(7) of the DGCL, the Entegris certificate of incorporation eliminates the personal liability of a director to the corporation or its stockholders for monetary damages for such breach of fiduciary duty as a director, except to the extent the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty. |
| | | | |||
Indemnification | | | The
CMC charter and bylaws require CMC to indemnify to the fullest extent authorized by the DGCL any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she is or was a director or officer of CMC, or is or was serving at the request of CMC as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. CMC maintains insurance covering its directors and officers against certain liabilities incurred by
them in their capacities as such. | | | The Entegris certificate of incorporation and bylaws require Entegris to indemnify to the fullest extent authorized by the DGCL any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he or she is or was a director or officer of Entegris, or is or was
serving at the request of Entegris as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. Entegris maintains insurance covering its directors and officers against certain liabilities incurred by them in their capacities as such. |
| | | | |||
Amendments
to the Charter | | | The CMC charter provides that the affirmative vote of holders of at least 80% of CMC outstanding common stock is required to amend, repeal or adopt any provision of the CMC charter inconsistent with the provisions of that certificate regarding amendments to the CMC bylaws, stockholder action by written consent, special meetings of stockholders, the CMC board of directors and the election and removal of directors. | | | The
Entegris certificate of incorporation provides that stockholders may alter, amend or repeal the bylaws only upon the affirmative vote of at least 75% of the then outstanding shares of Entegris’ common stock entitled to vote generally in the election of directors. |
| | | |
| | CMC | | | Entegris | |
Amendments
to the Bylaws | | | The CMC charter and bylaws provide that the CMC board of directors is authorized to make, alter, amend or repeal the CMC bylaws. The
CMC charter and bylaws provide that the CMC bylaws may be adopted, amended or repealed by the affirmative vote of holders of at least 80% of the voting power of the then outstanding capital stock of CMC at a meeting of the CMC stockholders; provided, however, that that the notice of such meeting will have stated that the amendment of the bylaws was one of the purposes of the meeting. | | | The
Entegris certificate of incorporation provides that the board of directors is authorized to make, alter, amend or repeal the Entegris bylaws. It further provides that stockholders may alter, amend or repeal the bylaws only upon the affirmative vote of at least 75% of the then outstanding shares of Entegris’ common stock entitled to vote generally in the election of directors. |
| | | | |||
Forum
Selection | | | Neither CMC’s charter nor bylaws contains a provision designating a sole and exclusive forum for member claims. Under Delaware law, the Delaware Court of Chancery has jurisdiction
to hear and determine any matter relating to any appraisal rights. | | | Neither Entegris’ charter nor bylaws contain a provision designating a sole and exclusive forum for member claims. |
• | the stockholder must not vote in favor of the merger agreement proposal; |
• | the stockholder must deliver
to CMC a written demand for appraisal before the vote on the merger agreement proposal 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 the surviving corporation in the merger must file a petition in the 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 such petition and has no intention of doing so. |
• | all
persons known by CMC to own beneficially 5% or more of CMC outstanding common stock; |
• | each member of the CMC board of directors; |
• | each of the named executive officers of CMC; and |
• | all members of the CMC board of directors and CMC’s executive officers as a group. |
Name
and Address | | | Number of Shares Beneficially Owned1 | | | Approximate Percent
of Class1 |
Certain beneficial owners: | | | | | ||
1. BlackRock,
Inc. 55 East 52nd Street | | | 3,118,7432 | | | 10.9% |
2. The
Vanguard Group, Inc. P.O. Box 2600 | | | 2,870,7263 | | | 10.0% |
3. Neuberger
Berman Group LLC 1290 Avenue of the Americas | | | 1,898,9134 | | | 6.6% |
4. EARNEST
Partners, LLC 1180 Peachtree Street NE, Suite 2300 | | | 1,674,3395 | | | 5.9% |
| | | | |||
Directors
and executive officers: | | | | | ||
| | 163,3556 | | | * | |
William
P. Noglows | | | 156,6686 7 | | | * |
Richard
S. Hill | | | 13,5596 | | | * |
Barbara
A. Klein | | | 38,4466 | | | * |
Paul
J. Reilly | | | 20,1056 | | | * |
Anne
K. Roby | | | 9246 | | | * |
Susan
M. Whitney | | | 48,6436 | | | * |
Geoffrey
Wild | | | 48,6436 | | | * |
Scott
D. Beamer | | | 39,6426 | | | * |
Daniel
D. Woodland | | | 32,6076 | | | * |
Jeffrey
M. Dysard | | | 11,1956 | | | * |
H.
Carol Bernstein | | | 64,2426 8 | | | * |
All
directors and executive officers as a group (14 persons) | | | 617,8036 9 | | | 2.2% |
* | = less than 1% |
(1) | “Beneficial ownership” generally means any person who, directly or indirectly, has or shares voting or investment power with respect to a security or has the right to acquire such power within 60 days. Shares of CMC common stock subject to options, warrants or rights that are currently exercisable or exercisable within 60 days of January 7, 2022 are deemed outstanding for computing the ownership percentage of the person holding such options, warrants or rights, but are not deemed outstanding for computing the ownership percentage of any other person. The amounts and percentages are based upon 28,568,967
shares of CMC common stock outstanding as of January 7, 2022, unless otherwise indicated. |
(2) | Of the shares of CMC common stock reported as beneficially owned, BlackRock, Inc. exercises (a) sole power to vote 3,079,821 shares, (b) no power to vote 38,922 shares, and (c) sole investment power over 3,118,743 shares. The total number of shares of CMC common stock |
(3) | Of the shares of CMC common stock reported as
beneficially owned, The Vanguard Group, Inc. exercises (a) shared power to vote 56,016, (b) sole investment power over 2,788,624 shares, and (c) shared investment power over 82,102 shares. The total number of shares of CMC common stock reported as beneficially owned is 2,870,726, as of November 30, 2021. The number of shares of CMC common stock indicated is based on information reported in the Schedule 13G/A filed by The Vanguard Group, Inc. on December 9, 2021. |
(4) | Of the shares of CMC common stock reported as beneficially owned, Neuberger Berman Group LLC exercises (a) sole power to vote 1,844,879 shares, (b) no power to vote 54,034 shares, (c) sole investment power over 16,497 shares, and (d) shared investment power
over 1,882,416 shares. The total number of shares of CMC common stock reported as beneficially owned is 1,898,913 shares, as of September 30, 2021. The number of shares of CMC common stock indicated is based on the information reported in the Form 13F Holdings Report filed by Neuberger Berman LLC on November 12, 2021. |
(5) | Of the shares of CMC common stock reported as beneficially owned, EARNEST Partners, LLC exercises (a) sole power to vote 1,163,595 shares, (b) shared power to vote 3,180 shares, (c) no power to vote 507,564 shares, and (d) sole investment power over 1,674,339 shares. The total number of shares of CMC common stock reported as beneficially owned is 1,674,339 shares, as of September
30, 2021. The number of shares of CMC common stock indicated is based on the information reported in the Form 13F Holdings Report filed by EARNEST Partners, LLC on November 15, 2021. |
(6) | Includes shares of CMC common stock that such person has the right to acquire pursuant to stock options granted pursuant to the CMC Materials, Inc. 2012 Omnibus Incentive Plan, which is referred to as the 2012 OIP, or pursuant to the CMC Materials, Inc. 2021 Omnibus Incentive Plan, which is referred to as the 2021 OIP, in either case, exercisable within 60 days of January 7, 2022, as follows: |
Name | | | Upon Exercise Shares Issuable |
Mr.
Li | | | 69,677 |
Mr. Noglows | | | 91,569
|
Mr. Hill | | | 6,235 |
Ms. Klein | | | 14,431
|
Mr. Reilly | | | 14,431 |
Dr. Roby | | | —
|
Ms. Whitney | | | 37,569 |
Mr. Wild | | | 37,569
|
Mr. Beamer | | | 19,592 |
Dr. Woodland | | | 22,096
|
Dr. Dysard | | | — |
Ms. Bernstein | | | 18,009 |
Also
includes restricted stock units awarded to such executive officer pursuant to the 2012 OIP or the 2021 OIP, as applicable, on January 16, 2018, December 6, 2018, December 5, 2019, December 3, 2020, and December 6, 2021, respectively, that are still subject to restrictions as of January 7, 2022, as set forth in the table below. On December 6, 2018, December 5, 2019, December 3, 2020, and December 6, 2021 as part of CMC’s annual equity incentive award program, CMC awarded restricted
stock units to CMC’s executive officers with restrictions that lapse in equal increments upon each anniversary over four years. On January 16, 2018, as part of Mr. Beamer’s appointment as CMC’s Vice President and Chief Financial Officer, CMC awarded Mr. Beamer a sign-on award consisting of 13,128 restricted stock units and an annual equity incentive award consisting of 2,104 restricted stock units, in each case, with restrictions that lapse in equal increments upon each anniversary of the award over four years. The outstanding restricted stock unit awards have the same economic value as shares of CMC common stock, are eligible to receive dividend equivalents, and may not be voted, sold or transferred, other than to immediate family members as provided in the 2012 OIP and 2021 OIP. |
Name | | | Equity Incentive Program Restricted Stock Units | |||||||||||||||
| 1/16/18
| | | 1/16/18 | | | 12/6/18 | | | 12/5/19
| | | 12/3/20 | | | 12/6/21 | ||
Mr.
Li | | | — | | | — | | | 1,716
| | | 3,106 | | | 5,010 | | | 7,580
|
Mr. Beamer | | | 3,282 | | | 526
| | | 618 | | | 860 | | | 1,428
| | | — |
Dr. Woodland | | | —
| | | — | | | 656 | | | 916
| | | 1,503 | | | 2,274 |
Dr.
Dysard | | | — | | | — | | | 375
| | | 626 | | | 1,278 | | | 1,932
|
Ms. Bernstein | | | — | | | —
| | | 543 | | | 760 | | | 1,203
| | | 1,819 |
As previously disclosed, effective as of November 15, 2021, Mr. Beamer resigned as Vice President and Chief Financial Officer of the company. Mr. Beamer’s non-qualified stock option, restricted stock unit and performance share unit
grants and awards under the 2012 OIP will remain outstanding and continue to vest in accordance with their terms during the period between November 15, 2021 and February 1, 2022. Mr. Beamer will forfeit any non-qualified stock options and restricted stock units that remain unvested in accordance with their terms as of February 1, 2022. In addition, Mr. Beamer will be eligible to vest in (i) his performance share unit award with respect to the 2020 fiscal year through 2022 fiscal year performance period, without proration, based on actual performance results, and (ii) a portion of his performance share unit award with respect to the 2021 fiscal year through 2023 fiscal year performance period, based on actual performance results and prorated for the time that Mr. Beamer was employed by us during such performance period through
February 1, 2022.Also includes restricted stock units awarded to such non-employee director pursuant to the 2012 OIP or the 2021 OIP, as applicable, that are still subject to restrictions as of January 7, 2022, as set forth in the table below. For annual equity awards to non-employee directors, restricted stock units are currently awarded with restrictions that lapse in full upon the first anniversary of the award. Initial equity awards of restricted stock units to non-employee directors are currently made with restrictions that lapse in equal annual increments over four years beginning on the first anniversary of the award. Outstanding restricted stock unit awards have the same economic value as shares of CMC common stock, are eligible to receive dividend equivalents, and may not be voted, sold or transferred, other than to immediate family members as provided in the
applicable plan. |
Name | | | Non-
Employee Director Restricted Stock Units |
Mr. Noglows | | | 561
|
Mr. Hill | | | 561 |
Ms. Klein | | | 561
|
Mr. Reilly | | | 561 |
Dr. Roby | | | 914
|
Ms. Whitney | | | 561 |
Mr. Wild | | | 561 |
(7) | Includes
41,125 shares of CMC common stock held in trust for the benefit of Mr. Noglows’ family members, comprised of 26,125 shares held in trust for the benefit of Mr. Noglows’ spouse, over which Mr. Noglows has no voting or investment power or ownership control, 7,500 shares held in trust for the benefit of a child of Mr. Noglows, over which Mr. Noglows has investment and voting, but no ownership, control, and 7,500 shares held in another trust for the benefit of another child of Mr. Noglows, over which Mr. Noglows has investment and voting, but no ownership, control. |
(8) | Includes 20,808 shares of CMC common stock held in trust for the benefit of Ms. Bernstein’s family members, over which Ms. Bernstein has voting and investment, but no ownership, control. |
(9) | Includes
all individuals who were directors and executive officers as of January 7, 2022, and does not include individuals who ceased to be executive officers prior to such date, except for Mr. Noglows, who since January 1, 2016 has been a non-employee director. Includes 318,435 shares of CMC common stock that CMC directors and executive officers have the right to acquire pursuant to stock options exercisable within 60 days of January 7, 2022, and 43,661 restricted shares of CMC common stock or restricted stock units held by CMC’s executive officers still subject to restrictions as of January 12, 2022 (which include shares subject to restrictions or conditions pursuant to CMC’s Deposit Share Program). |
Name | | | Age | | | Title |
Paul
L. H. Olson | | | 71 | | | Chairman of the Board |
Michael
A. Bradley | | | 72 | | | Board Member |
Rodney
Clark | | | 52 | | | Board Member |
James
F. Gentilcore | | | 69 | | | Board Member |
Yvette
Kanouff | | | 56 | | | Board Member |
James
P. Lederer | | | 61 | | | Board Member |
Azita
Saleki-Gerhardt | | | 58 | | | Board Member |
| | 56 | | | President, Chief Executive Officer, and Board Member |
Name | | | Age | | | Title |
Gregory
B. Graves | | | 61 | | | Executive Vice President and Chief Financial Officer |
Todd
Edlund | | | 59 | | | Executive Vice President and Chief Operating Officer |
Susan
Rice | | | 63 | | | Senior Vice President of Human Resources |
| | 40 | | | Senior Vice President, General Counsel and Secretary | |
James
A. O’Neill | | | 57 | | | Senior Vice President and Chief Technology Officer |
Corey
Rucci | | | 62 | | | Senior Vice President, Business Development |
Olivier
Blachier | | | 48 | | | Senior Vice President, Business and New Markets Development |
Bruce
W. Beckman | | | 53 | | | Senior Vice President, Finance |
Stuart
Tison | | | 58 | | | Senior Vice President & General Manager, Specialty Chemicals
and Engineered Materials |
Clint Haris | | | 49 | | | Senior
Vice President & General Manager, Microcontamination Control |
William Shaner | | | 53 | | | Senior
Vice President & General Manager, Advanced Materials Handling |
Michael D. Sauer | | | 55 | | | Vice
President, Controller & Chief Accounting Officer |
• | The integrity of Entegris’ financial statements as well as Entegris’ financial reporting process and systems of internal controls over financial reporting; |
• | Entegris’ compliance with legal and regulatory requirements; |
• | The qualifications and independence of Entegris’ independent registered public accounting firm; and |
• | The
performance of Entegris’ internal auditing function and independent registered public accounting firm. |
• | Aid the board of directors in meeting its responsibilities with regard to oversight and determination of Entegris’ compensation practices, policies and programs; |
• | Review and recommend the salary and other compensation of Entegris’ CEO and other senior executive officers who report to the CEO; |
• | Review and administer Entegris’ equity incentive programs, including reviewing, recommending, and approving
stock option and other equity incentive grants to the CEO and other senior executives; and |
• | Review, approve, and advise the board of directors with respect to organizational development and succession planning activities. |
• | Recommend
to the board of directors the criteria for the selection of nominees as directors; |
• | Evaluate individuals meeting these criteria proposed to the Committee for nomination to the board of directors in accordance with procedures established by the Committee; |
• | Recommend to the board of directors candidates to be selected by a majority of the independent directors as nominees for election as directors at each annual meeting of stockholders; |
• | Recommend to the board of directors director nominees for each committee; and |
• | Recommend
to the board of directors the corporate governance guidelines applicable to Entegris. |
Item 11. | Executive Compensation |
Name | | | Age | | | Position | | | Executive
Officer Since |
| | 56 | | | President
and Chief Executive Officer | | | 2001 | |
Gregory B. Graves | | | 61 | | | Executive
Vice President and Chief Financial Officer | | | 2002 |
Todd J. Edlund | | | 59 | | | Executive
Vice President and Chief Operating Officer | | | 2010 |
Susan Rice | | | 63 | | | Senior
Vice President, Global Human Resources | | | 2017 |
Clint Haris | | | 49 | | | Senior
Vice President and General Manager, Microcontamination Control | | | 2016 |
• | Attract,
retain, motivate and reward high-caliber executives. |
• | Foster teamwork and support the achievement of Entegris’ financial and strategic goals through performance-based financial incentives. |
• | Promote the achievement of strategic objectives which lead to long-term growth in stockholder value. |
• | Encourage strong financial performance by establishing competitive goals for target performance and leveraging incentive programs through stock-based compensation. |
• | Align
the interests of executive officers with those of Entegris and its stockholders by making incentive compensation dependent upon Entegris’ performance. |
| | | 2016 | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | |
| Entegris, Inc. | | | $100.00 | | | $170.48 | | | $157.56 | | | $284.98
| | | $549.59 | | | $794.70 | |
| Nasdaq
Composite | | | 100.00 | | | 129.64 | | | 125.96 | | | 172.18 | | | 249.52 | | | 304.85 | |
| Philadelphia
Semiconductor Index | | | 100.00 | | | 140.55 | | | 132.05 | | | 215.58 | | | 331.27 | | | 473.22 | |
• | Carefully structured peer group with annual Compensation Committee review. |
• | Annual say-on-pay advisory vote. |
• | Adherence to a rigorous pay-for-performance philosophy in establishing program design and targeted pay levels for NEOs. |
• | Independent Compensation Committee oversight. |
• | Independent
compensation consultant is hired by and reports to the Compensation Committee. |
• | Annual report by the independent compensation consultant to the Compensation Committee on executive pay and performance alignment. |
• | Stringent stock ownership guidelines maintained for directors and executive officers. |
• | Clawback policy in place to deter executive officer misconduct and reclaim certain awards and incentives. |
• | Change
in control agreements require double-trigger for vesting. |
• | No guaranteed bonuses. |
• | No material perquisites or other personal benefits to directors or executive officers. |
• | Directors, executive officers, employees and consultants may not hedge, pledge or engage in speculative transactions of Entegris stock. |
• | No plans that encourage excessive risk taking. |
• | No
excess dilution through careful monitoring of burn rate and overhang. |
• | No new tax “gross-ups” agreements. |
• | attract, retain, motivate and reward high-caliber executives; |
• | foster teamwork and support the achievement of Entegris’ financial and strategic goals through performance-based financial
incentives; |
• | promote the achievement of strategic objectives that lead to long-term growth in stockholder value; |
• | encourage strong financial performance by establishing competitive goals for target performance and leveraging incentive programs through stock-based compensation; and |
• | align the interests of executive officers with those of Entegris and its stockholders by making incentive compensation dependent upon Entegris’ performance. |
Element | | | Description
and Purpose of the Compensation Element | | | Fiscal 2021 Commentary | |||
Base Salary | | | Rewards
core competence in the executive role relative to required skills, experience and contributions to Entegris. Generally targeted at the median level, based on competitive market practice. | | | Entegris awarded increases to the base salaries of the named executive officers during fiscal 2021 to bring their base salaries into general alignment with the market median level, adjusted for executive-specific factors such as tenure, proficiency in role and criticality. | |||
| | | | | |
Element | | | Description
and Purpose of the Compensation Element | | | Fiscal 2021 Commentary | |||
Short-Term Incentive Compensation | | | Rewards
achievement of Entegris financial performance criteria to: | | | In 2021, Entegris Incentive Plan awards were based on the Entegris’ performance with respect to adjusted EBITDA as a percentage of revenue (weighted 75%) and on the achievement of specified key business objectives for the year (weighted 25% in aggregate). The actual amounts of EIP awards with respect to 2021 are expected to be determined in February 2022. | |||
| •
| | | Incentivize the achievement of annual financial performance metrics that will drive our long-term success; and | | ||||
| • | | | Incentivize
achievement of pre-established business objectives. | | ||||
| | | | | | ||||
Long-Term
Incentive Compensation | | | Entegris awards its executive officers with time-vested restricted stock units and stock options, which both vest ratably over four years, and performance share units that provide the opportunity to earn shares of Entegris’ common stock based on Entegris’ TSR as compared with the TSR achieved by the companies that comprise the Philadelphia Semiconductor Index over a three-year period. The purposes of our long-term incentive awards are to: | | | No
changes to the type and mix of long-term incentive awards were made for 2021. Named executive officers received time-vested restricted stock units (weighted 40% on a value basis), time-vested stock options (weighted 30%) and relative total shareholder return PSUs (weighted 30%). | |||
| • | | | Promote
executive ownership of our stock; | | ||||
| • | | | Promote retention of executives in a normally competitive labor market over the longer term; | | ||||
| • | | | Encourage
management focus on critical performance metrics creating value for stockholders; and | | ||||
| • | | | Align the program with peer group and market practices, where appropriate. | |
Element | | | Description and Purpose of the Compensation Element | | | Fiscal
2021 Commentary | |||
Retirement Benefits | | | Entegris provides both qualified and non-qualified tax-deferred retirement savings plans to: | | | There
were no changes to the participation in Entegris’ retirement plans and no change to the benefits provided. | |||
| • | | | Encourage employee long-term commitment to Entegris; | | ||||
| • | | | Promote
employee savings for retirement; and | | ||||
| • | | | Make total retirement benefits available to executives commensurate with other employees as a percentage of compensation.
| | ||||
| | | | | | ||||
Welfare
Benefits | | | Executives participate in employee benefit plans generally available to employees to provide a broad-based total compensation program designed to be competitive in the labor market. | | | In
2021, there were no changes from historical practice. |
Element | | | Description
and Purpose of the Compensation Element | | | Fiscal 2021 Commentary | |||
Perquisites | | | Entegris
provides no material perquisites to executive officers. | | | In 2021, there were no changes from historical practice. | |||
| | | | | | ||||
Change
in Control Termination Benefits | | | Change in control agreements provide for “double-trigger” benefits and are designed to retain executives and provide continuity of management in the event of an actual or threatened change in control of Entegris. | | | In
2021, there were no changes from historical practice. |
Name | | | Annual
Base Salary | | | % Change From 2020 | | | EIP
Target as a Percent of Salary | | | % Change from 2020 | | | Target
EIP Award | | | Actual EIP Award as Percent of Target(1) | | | Actual
EIP Award(1) |
| | $1,000,000 | | | 8% | | | 120% | | | 9% | | | $1,200,000 | | | 100% | | | $1,200,000
| |
Gregory B. Graves | | | $570,000 | | | 4% | | | 85% | | | 0% | | | $484,500 | | | 100% | | | $484,500
|
Todd J. Edlund | | | $530,000 | | | 4% | | | 85% | | | 6% | | | $450,500 | | | 100% | | | $450,500
|
Susan Rice | | | $415,000 | | | 4% | | | 70% | | | 17% | | | $290,500 | | | 100% | | | $290,500
|
Clint Haris | | | $390,000 | | | 10% | | | 70% | | | 17% | | | $273,000 | | | 100% | | | $273,000 |
(1) | Presented at target performance. The actual amounts of EIP awards with respect to 2021 are expected to be determined in February 2022. Once such EIP awards are determined, such amounts will be disclosed in a filing under Item 5.02(f) of Form 8-K. |
• | Restricted
Stock Units. Forty percent of the 2021 equity award to executive officers consisted of restricted stock units, with restrictions lapsing in four equal installments on February 19th of the first through the fourth years following the date of award. The award of restricted stock units is designed to enable Entegris to retain executive officers and other key employees during turbulent economic times and in a competitive labor market. Non-executive employees receiving equity awards in 2021 received restricted stock units, with the restrictions lapsing ratably over four years in accordance with the foregoing schedule. |
• | Stock Options. Thirty percent of the 2021 equity awards to executive officers consisted of stock options that vest in four equal installments on February 19th of the
first through the fourth years following the date of grant and have a seven-year term. The Compensation Committee believes that the award of stock options is an effective mechanism to align the interests of Entegris’ executive officers with those of Entegris stockholders, which is expected to lead to an increase in the long-term value of Entegris’ common stock. This is because stock options only provide value to the recipient if the price of Entegris’ common stock appreciates, which creates a strong performance orientation consistent with Entegris’ pay-for-performance philosophy. All stock options granted in 2021 were granted with an exercise price equal to the fair market value of Entegris common stock on the date of grant. |
• | Performance Share Units. Thirty percent of the 2021 equity awards to executive officers consisted
of performance share units, which provide the opportunity to earn shares of Entegris’ common stock based on |
Benefit Plan | | | Executive Officers | | | Certain
Managers | | | Full Time Employees |
401(k) Plan | | | ✔ | | | ✔ | | | ✔ |
Medical/Dental
Plans | | | ✔ | | | ✔ | | | ✔ |
Life
and Disability Insurance(1) | | | ✔ | | | ✔ | | | ✔ |
Employee
Stock Purchase Plan | | | ✔ | | | ✔ | | | ✔ |
Supplemental
Executive Retirement Plan (SERP) | | | ✔ | | | ✔ | | | Not
Offered |
Deferred Compensation Plan | | | ✔ | | | ✔ | | | Not
Offered |
Change of Control Agreements(2) | | | ✔ | | | Not
Offered | | | Not Offered |
(1) | All Entegris officers receive company-paid long-term disability coverage that provides a monthly benefit of 60% of qualified salary to a maximum of $15,000 per month. |
(2) | Entegris
has change of control agreements with its executive officers, its Senior Vice President, Chief Commercial Officer and its Senior Vice President, Global Operations & Supply Chain. |
Albemarle
Corporation Ashland Global Holdings Inc. CMC Materials, Inc. (formerly Cabot Microelectronics Corporation) Cree, Inc. FLIR Systems, Inc. | | | Graco
Inc. Hexcel Corporation II-VI Incorporated MKS Instruments, Inc. Monolithic Power Systems, Inc. | | | National Instruments Corporation
Nordson Corporation Qorvo, Inc. Skyworks Solutions, Inc. Teradyne, Inc. Xilinx, Inc. |
• | The Compensation Committee identified the compensation-related risks that Entegris may face; |
• | The Compensation Committee identified the material design elements of Entegris’ compensation policies and practices with respect to all employees; and |
• | The
Compensation Committee then evaluated whether there is a relationship between any of those design elements and any of Entegris’ most significant risks. More specifically, the Compensation Committee evaluated whether any of the design elements of Entegris’ compensation policies and practices encourages Entegris’ employees to take excessive or inappropriate risks that are reasonably likely to have a material adverse impact on Entegris. |
Name and Principal Position | | | Year | | | Salary
($) | | | Stock Awards(2) ($) | | | Option
Awards(3) ($) | | | Non-Equity Incentive Plan Compensation(4)
($) | | | All Other Compensation(5) ($) | | | Total
($) |
| | 2021 | | | 981,250 | | | 5,323,172 | | | 2,190,407 | | | 1,200,000 | | | 84,053 | | | 9,778,882 | |
President
& Chief | | | 2020 | | | 946,154(1) | | | 6,325,503 | | | 1,290,210 | | | 1,541,513 | | | 82,421 | | | 10,185,801 |
Executive
Officer | | | 2019 | | | 867,789 | | | 2,388,380 | | | 1,023,595 | | | 1,020,250 | | | 126,035 | | | 5,426,049
|
Gregory B. Graves | | | 2021 | | | 565,000 | | | 1,385,169 | | | 570,343 | | | 484,500 | | | 51,589 | | | 3,056,601 |
Executive
Vice President | | | 2020 | | | 548,077(1) | | | 927,927 | | | 360,132 | | | 708,263 | | | 40,918 | | | 2,585,317 |
&
Chief Financial Officer | | | 2019 | | | 464,231 | | | 840,013 | | | 359,974 | | | 373,650 | | | 55,756 | | | 2,093,624 |
Todd
J. Edlund | | | 2021 | | | 525,000 | | | 1,567,509 | | | 645,349 | | | 450,500 | | | 62,899 | | | 3,251,257 |
Executive
Vice President | | | 2020 | | | 525,289(1) | | | 1,082,572 | | | 420,164 | | | 618,120 | | | 42,842 | | | 2,688,987 |
&
Chief Operating Officer | | | 2019 | | | 484,904 | | | 840,013 | | | 359,974 | | | 393,525 | | | 55,146 | | | 2,133,562 |
Susan
Rice | | | 2021 | | | 411,250 | | | 583,009 | | | 240,364 | | | 290,500 | | | 33,488 | | | 1,558,611 |
Senior
Vice President, | | | 2020 | | | 408,173(1) | | | 494,742 | | | 192,197 | | | 363,600 | | | 32,258 | | | 1,490,970 |
Global
Human Resources | | | 2019 | | | 370,673 | | | 367,478 | | | 157,495 | | | 238,500 | | | 35,496 | | | 1,169,642 |
Clint
Haris | | | 2021 | | | 381,250 | | | 510,245 | | | 210,165 | | | 273.000 | | | 14,088 | | | 1,388,748 |
Senior
Vice President and | | | 2020 | | | 364,327(1) | | | 444,250 | | | 172,918 | | | 358,692 | | | 26,429 | | | 1,366,616 |
General
Manager, | | | 2019 | | | 331,34 | | | 262,516 | | | 112,476 | | | 234,192 | | | 26,147 | | | 966,677 |
Microcontamination
Control | | | | | | | | | | | | | | |
(1) | Includes one bi-weekly payment that included compensation with respect to employment for a portion of the final week of 2019 due to the timing of payroll runs. |
(2) | Amounts reflect: (i) the grant date fair value for awards of restricted stock units made pursuant to Entegris’ long-term incentive program in 2021, 2020 and 2019, determined in accordance with FASB ASC Topic 718 (for a discussion of the assumptions underlying these valuations and the valuations discussed below, please see Note 13 to Entegris’Consolidated Financial Statements included in Entegris’Annual Report on Form 10-K for the fiscal year ended December 31, 2020);
and (ii) the grant date fair value for performance share units awarded in 2021, 2020 and 2019, determined in accordance with FASB ASC Topic 718. Assuming the highest level of performance is achieved under the performance share units granted in 2021, the maximum grant date values of the performance share units, based on the closing price of Entegris’common stock on the last trading day of 2021 ($138.58) at the maximum calculated payout, is: (a) in the case of Mr. Loy - $6,186,211; (b) in the case of Mr. Graves - $1,609,745; (c) in the case of Mr. Edlund - $1,821,496; (d) in the case of Ms. Rice - $677,379; and (e) in the case of Mr. Haris - $593,122. For additional information with respect to awards made in fiscal 2021, see the 2021 Grants of Plan-Based Awards and Outstanding Equity Awards at 2021 Fiscal Year End tables herein. |
(3) | Amounts
consist of the grant date fair value, computed in accordance with FASB ASC Topic 718, with respect to stock option awards granted in 2021, 2020 and 2019. For a discussion of the assumptions underlying these valuations, please see Note 13 to Entegris’Consolidated Financial Statements included in Entegris’Annual Report on Form 10-K for the fiscal year ended December 31, 2020 |
(4) | For 2021, figures are presented at target performance. The actual amounts of Entegris Incentive Plan awards with respect to 2021 are expected to be determined in February 2022. Once such EIP awards are determined, such amounts will be disclosed in a filing under Item 5.02(f) of Form 8-K. For 2019 and 2020, reflects amounts paid under the Entegris Incentive Plan with respect to Entegris’ performance
during the indicated fiscal year and were paid in February of the succeeding year. |
(5) | For 2021, represents (a) employer matching contributions under the Entegris, Inc. 401(k) Savings and Profit Sharing Plan (2017 Restatement); (b) employer matching contributions to the Entegris, Inc. Supplemental Executive Retirement Plan; (c) the dollar value of group term life insurance premiums paid by Entegris; and (d) the dollar value of executive short-term disability premiums paid by Entegris in each of the following amounts: |
Name | | | 401(k)
Contributions | | | SERP Contributions | | | Life
Insurance | | | Short Term Disability |
| | 11,600 | | | 68,688 | | | 2,322 | | | 1,443 | |
Gregory
B. Graves | | | 11,600 | | | 33,900 | | | 3,564 | | | 2,525 |
Todd
J. Edlund | | | 11,600 | | | 47,250 | | | 2,322 | | | 1,727 |
Susan
Rice | | | 11,600 | | | 15,497 | | | 3,564 | | | 2,827 |
Clint
Haris | | | 11,600 | | | — | | | 810 | | | 1,678 |
| | | | | | Estimated
Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts
Under Equity Incentive Plan Awards(#)(2) | | | All Other Stock
Awards: Number of Shares of Stock or Units
(#)(3) | | | All Other Option Awards: Number
of Securities Underlying Options (#)(4) | | | Exercise
or Base Price of Option Awards ($/Sh) | | | Grant
Date Fair Value of Stock and Option Awards ($) | |||||||||||||||
Name
| | | Award Type | | | Grant
Date | | | Threshold ($) | | | Target
($) | | | Maximum ($) | | | Threshold
(#) | | | Target (#) | | | Maximum
(#) | | |||||||||||
| | Entegris
Incentive Plan | | | — | | | $0 | | | $1,200,000 | | | $2,400,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Restricted
Stock Units | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 29,760 | | | — | | | — | | | $2,919,754 | |
| | Performance
Share Units | | | 02/02/2021 | | | — | | | — | | | — | | | 11,160 | | | 22,320 | | | 44,640 | | | — | | | — | | | — | | | $2,403,418 | |
| | Stock
Options | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 71,372 | | | $98.11
| | | $2,190,407 | |
Gregory B. Graves | | | Entegris
Incentive Plan | | | — | | | $0 | | | $484,500 | | | $969,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
| | Restricted
Stock Units | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,744 | | | — | | | — | | | $759,764 | |
| | Performance
Share Units | | | 02/02/2021 | | | — | | | — | | | — | | | 2,904 | | | 5,808 | | | 11,616 | | | — | | | — | | | — | | | $625,405 | |
| | Stock
Options | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 18,584 | | | $98.11
| | | $570,343 | |
Todd J. Edlund | | | Entegris
Incentive Plan | | | — | | | $0 | | | $450,500 | | | $901,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
| | Restricted
Stock Units | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 8,764 | | | — | | | — | | | $859,836 | |
| | Performance
Share Units | | | 02/02/2021 | | | — | | | — | | | — | | | 3,286 | | | 6,572 | | | 13,144 | | | — | | | — | | | — | | | $707,673 | |
| | Stock
Options | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 21,028 | | | $98.11
| | | $645,349 | |
Susan Rice | | | Entegris
Incentive Plan | | | | | $0 | | | $290,500 | | | $581,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | Restricted
Stock Units | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,260 | | | — | | | — | | | $319,839 | |
| | Performance
Share Units | | | 02/02/2021 | | | — | | | — | | | — | | | 1,222 | | | 2,444 | | | 4,888 | | | — | | | — | | | — | | | $263,170 | |
| | Stock
Options | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,832 | | | $98.11
| | | $240,364 | |
Clint Haris | | | Entegris
Incentive Plan | | | — | | | $0 | | | $273,000 | | | $546,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
| | Restricted
Stock Units | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,852 | | | — | | | — | | | $279,810 | |
| | Performance
Share Units | | | 02/02/2021 | | | — | | | — | | | — | | | 1,070 | | | 2,140 | | | 4,280 | | | — | | | — | | | — | | | $230,435 | |
| | Stock
Options | | | 02/02/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,848 | | | $98.11
| | | $210,165 |
(1) | Awards under the Entegris Incentive Plan. See “– Executive Compensation – Short-Term Incentive Compensation” above. |
(2) | These stock awards are performance share units which provide the opportunity to earn shares of Entegris' common stock based on Entegris’ TSR as compared with the TSR achieved by the companies that comprise the Philadelphia Semiconductor Index over the three-year period following the date of award. See “– Executive Compensation – Long-Term Incentive Compensation” above. The indicated grant date fair value of these stock awards at target is calculated in accordance with FASB ASC Topic 718, excluding estimated forfeitures.
Performance share units include dividend equivalent rights under which amounts equivalent to any ordinary cash dividends declared by Entegris during the vesting period will accrue and will become payable under the same vesting conditions and settlement terms as the underlying shares. |
(3) | These stock awards are grants of restricted stock units. The restricted stock units granted on February 2, 2021 vest ratably over four years on February 19th of 2022, 2023, 2024 and 2025. The indicated grant date fair value of these stock awards is calculated in accordance with FASB ASC Topic 718, excluding estimated forfeitures. Restricted stock units include dividend equivalent rights under which amounts equivalent to any ordinary cash dividends declared by Entegris during the vesting
period will accrue and will become payable under the same vesting conditions and settlement terms as the underlying shares. |
(4) | The indicated awards are stock option grants with an exercise price equal to the closing price on the Nasdaq of our stock on the indicated date of grant and that vest ratably over four years on each February 19th of 2022, 2023, 2024 and 2025. The indicated grant date fair value of these stock awards is calculated in accordance with FASB ASC Topic 718, excluding estimated forfeitures. |
| | Option
Awards | | | Stock Awards | ||||||||||||||||||||||
Name | | | Number
of Securities Underlying Unexercised Options (#) Exercisable | | | Number
of Securities Underlying Unexercised Options (#) Unexercisable(1) | | | Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options | | | Option Exercise Price
($) | | | Option Expiration Date | | | Number
of Shares of Stock That Have Not Vested(2) (#) | | | Market
Value of Shares of Stock That Have Not Vested(3)
($) | | | Equity Incentive Plan Awards:
Number of Unearned Shares That Have Not Vested(4) (#) | | | Equity
Incentive Plan Awards: Market or Payout Value of Unearned
Shares That Have Not Vested(3) ($) |
| | — | | | 27,044 | | | — | | | 31.10 | | | 2/12/2025 | | | — | | | — | | | — | | | — | |
| | — | | | 57,570 | | | — | | | 33.33 | | | 2/5/2026 | | | — | | | — | | | — | | | — | |
| | — | | | 65,250 | | | — | | | 55.72 | | | 2/4/2027 | | | — | | | — | | | — | | | — | |
| | — | | | 71,372 | | | — | | | 98.11 | | | 2/2/2028 | | | — | | | — | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 22,098 | | | 3,081,566 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 46,296 | | | 6,441,625 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 44,640 | | | 6,196,925 | |
| | — | | | — | | | — | | | — | | | — | | | 8,520 | | | 1,190,500 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 20,474 | | | 2,855,099 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 23,151 | | | 3,221,230 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 42,194 | | | 5,864,122 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 29,760 | | | 4,131,283 | | | — | | | — | |
Gregory
B. Graves | | | — | | | 10,205 | | | — | | | 31.10 | | | 2/12/2025 | | | — | | | — | | | — | | | — |
| | — | | | 20,246 | | | — | | | 33.33 | | | 2/5/2026 | | | — | | | — | | | — | | | — | |
| | 6,071 | | | 18,213 | | | — | | | 55.72 | | | 2/4/2027 | | | — | | | — | | | — | | | — | |
| | — | | | 18,584 | | | — | | | 98.11 | | | 2/2/2028 | | | — | | | — | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,773 | | | 1,083,945 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 12,920 | | | 1,797,689 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 11,616 | | | 1,612,533 | |
| | — | | | — | | | — | | | — | | | — | | | 3,215 | | | 449,232 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 7,200 | | | 1,004,040 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 6,459 | | | 898,705 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 7,744 | | | 1,075,022 | | | — | | | — |
| | Option
Awards | | | Stock Awards | ||||||||||||||||||||||
Name | | | Number
of Securities Underlying Unexercised Options (#) Exercisable | | | Number
of Securities Underlying Unexercised Options (#) Unexercisable(1) | | | Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options | | | Option Exercise Price
($) | | | Option Expiration Date | | | Number
of Shares of Stock That Have Not Vested(2) (#) | | | Market
Value of Shares of Stock That Have Not Vested(3)
($) | | | Equity Incentive Plan Awards:
Number of Unearned Shares That Have Not Vested(4) (#) | | | Equity
Incentive Plan Awards: Market or Payout Value of Unearned
Shares That Have Not Vested(3) ($) |
Todd
J. Edlund | | | — | | | 9,696 | | | — | | | 31.10 | | | 2/12/2025 | | | — | | | — | | | — | | | — |
| | — | | | 20,246 | | | — | | | 33.33 | | | 2/5/2026 | | | — | | | — | | | — | | | — | |
| | 7,083 | | | 21,249 | | | — | | | 55.72 | | | 2/4/2027 | | | — | | | — | | | — | | | — | |
| | — | | | 21,028 | | | — | | | 98.11 | | | 2/2/2028 | | | — | | | — | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,773 | | | 1,083,945 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 15,072 | | | 2,097,118 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 13,144 | | | 1,824,650 | |
| | — | | | — | | | — | | | — | | | — | | | 3,054 | | | 426,735 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 7,200 | | | 1,004,040 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 7,536 | | | 1,048,559 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 8,764 | | | 1,216,618 | | | — | | | — | |
Susan
Rice | | | 13,995 | | | 4,665 | | | — | | | 31.10 | | | 2/12/2025 | | | — | | | — | | | — | | | — |
| | 8,858 | | | 8,858 | | | — | | | 33.33 | | | 2/5/2026 | | | — | | | — | | | — | | | — | |
| | 3,240 | | | 9,720 | | | — | | | 55.72 | | | 2/4/2027 | | | — | | | — | | | — | | | — | |
| | 0 | | | 7,832 | | | — | | | 98.11 | | | 2/2/2028 | | | — | | | — | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,400 | | | 474,130 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,888 | | | 958,396 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,888 | | | 678,552 | |
| | — | | | — | | | — | | | — | | | — | | | 1,469 | | | 205,263 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 3,150 | | | 439,268 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 3,444 | | | 479,198 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 3,260 | | | 452,553 | | | — | | | — | |
Clint
Haris | | | 11,344 | | | — | | | — | | | 21.60 | | | 2/14/2024 | | | — | | | — | | | — | | | — |
| | 9,651 | | | 3,217 | | | — | | | 31.10 | | | 2/12/2025 | | | — | | | — | | | — | | | — | |
| | 6,326 | | | 6,326 | | | — | | | 33.33 | | | 2/5/2026 | | | — | | | — | | | — | | | — | |
| | 2,915 | | | 8,745 | | | — | | | 55.72 | | | 2/4/2027 | | | — | | | — | | | — | | | — | |
| | — | | | 6,848 | | | — | | | 98.11 | | | 2/2/2028 | | | — | | | — | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,429 | | | 338,724 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,184 | | | 860,442 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,280 | | | 594,150 | |
| | — | | | — | | | — | | | — | | | — | | | 1,012 | | | 141,407 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 2,250 | | | 313,763 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 3,093 | | | 430,360 | | | — | | | — | |
| | — | | | — | | | — | | | — | | | — | | | 2,852 | | | 395,915 | | | — | | | — |
(1) | These options vest as follows in the order in which the options are listed in the above table: |
Vesting Date | | | Grant
Date | | | | | Gregory B. Graves | | | Todd
J. Edlund | | | Susan Rice | | | Clint
Haris | |
| | | | 27,044 | | | 10,205 | | | 9,696 | | | 4,665 | | | 3,217 | ||
| | | | 28,785 | | | 10,123 | | | 10,123 | | | 4,429 | | | 3,163 | ||
| | | | 21,750 | | | 6,071 | | | 7,083 | | | 3,240 | | | 2,915 | ||
| | | | 17,843 | | | 4,646 | | | 5,257 | | | 1,958 | | | 1,712 |
Vesting Date | | | Grant
Date | | | | | Gregory B. Graves | | | Todd
J. Edlund | | | Susan Rice | | | Clint
Haris | |
| | | | 28,785 | | | 10,123 | | | 10,123 | | | 4,429 | | | 3,163 | ||
| | | | 21,750 | | | 6,071 | | | 7,083 | | | 3,240 | | | 2,915 | ||
| | | | 17,843 | | | 4,646 | | | 5,257 | | | 1,958 | | | 1,712 | ||
| | | | 21,750 | | | 6,071 | | | 7,083 | | | 3,240 | | | 2,915 | ||
| | | | 17,843 | | | 4,646 | | | 5,257 | | | 1,958 | | | 1,712 | ||
| | | | 17,843 | | | 4,646 | | | 5,257 | | | 1,958 | | | 1,712 |
(2) | Restrictions
on the indicated restricted stock units lapse as follows in the order in which the awards are listed in the above table: |
Vesting Date | | | Grant Date | | | | | Gregory B. Graves | | | Todd
J. Edlund | | | Susan Rice | | | Clint
Haris | |
2/19/2022 | | | 2/12/2018 | | | 8,520
| | | 3,215 | | | 3,054 | | | 1,469
| | | 1,012 |
| | 2/5/2019 | | | 10,237 | | | 3,600 | | | 3,600 | | | 1,575 | | | 1,125 | |
| | 2/4/2020 | | | 7,717 | | | 2,153 | | | 2,512 | | | 1,148 | | | 1,031 | |
| | 2/2/2021 | | | 7,440 | | | 1,936 | | | 2,191 | | | 815 | | | 713 | |
8/15/2022 | | | 7/31/2020 | | | 21,097 | | | — | | | — | | | — | | | — |
2/19/2023 | | | 2/5/2019
| | | 10,237 | | | 3,600 | | | 3,600
| | | 1,575 | | | 1,125 |
| | 2/4/2020 | | | 7,717 | | | 2,153 | | | 2,512 | | | 1,148 | | | 1,031 | |
| | 2/2/2021 | | | 7,440 | | | 1,936 | | | 2,191 | | | 815 | | | 713 | |
8/15/2023 | | | 7/31/2020 | | | 21,097 | | | — | | | — | | | — | | | — |
2/19/2024 | | | 2/4/2020
| | | 7,717 | | | 2,153 | | | 2,512
| | | 1,148 | | | 1,031 |
| | 2/2/2021 | | | 7,440 | | | 1,936 | | | 2,191 | | | 815 | | | 713 | |
2/19/2025 | | | 2/2/2021 | | | 7,440 | | | 1,936 | | | 2,191 | | | 815 | | | 713 |
(3) | The
indicated value is calculated using the closing price for Entegris’ common stock on the last trading day of 2021 ($138.58). The indicated value includes any dividend equivalents accrued through December 31, 2021 with respect to the unvested shares. Shares issuable in respect of reinvested dividend equivalents are included in the number of unearned, unvested shares in the “Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested” column and are valued at the per share price indicated above. The indicated value includes aggregate dividend equivalents payable in cash upon vesting of the underlying awards for performance share units granted in 2021, 2020 and 2019 and all restricted stock units in the amount of: (a) in the case of Mr. Loy – $120,459; (b) in the case of Mr. Graves – $32,222; (c) in the case of Mr. Edlund – $34,457; (d) in the case of Ms. Rice – $15,129; and (e) in the case of Mr. Haris
$12,141. |
(4) | The performance share units granted in 2019 provide the opportunity to earn shares of Entegris’ common stock on a scale of from 0 to 150% of the number of units originally granted, plus any accrued dividends, based on Entegris’ TSR as compared with the TSR achieved by the companies that comprise the Philadelphia Semiconductor Index over a three-year performance period and are fully vested when earned, subject to a cap equal to 300% of the value of the original grant. The performance share units granted in 2020 and 2021 provide the opportunity to earn shares of Entegris’ common stock on a scale of from 0 to 200% of the number of units originally granted, plus any accrued dividends, based on Entegris’ TSR as compared with the TSR achieved by the companies that comprise the Philadelphia Semiconductor Index
over a three-year performance period and are fully vested when earned. The shares indicated are based on Entegris achieving maximum performance goals. See “– Executive Compensation – Long-Term Incentive Compensation” above. For performance share units granted in 2018, the number of shares includes shares issuable in connection with the reinvestment of dividend equivalents accrued through December 31, 2021 with respect to unvested shares. |
| | Option Awards | | | Stock
Awards | |||||||
Name | | | Number of Shares Acquired on Exercise (#) | | | Value
Realized on Exercise(1) ($) | | | Number of Shares Acquired
on Vesting(2) (#) | | | Value Realized on Vesting(3) ($) |
| | 300,444 | | | 27,582,066 | | | 61,245 | | | 6,480,189 | |
Gregory
B. Graves | | | 63,848 | | | 5,074,651 | | | 22,017 | | | 2,329,500 |
Todd
J. Edlund | | | 59,498 | | | 5,377,718 | | | 20,855 | | | 2,206,780 |
Susan
Rice | | | — | | | — | | | 14,542 | | | 1,817,724 |
Clint
Haris | | | — | | | — | | | 6,873 | | | 727,289 |
(1) | Value realized upon exercise of option awards is based on the difference between the exercise price and the closing value of Entegris’ stock on the date of exercise (or sale price if the shares were sold on the date of exercise). |
(2) | Represents restricted stock units and performance share units that vested during the fiscal year. |
(3) | Value realized on vesting of stock awards is based on the closing value of Entegris’ common stock on the date of vesting plus the dollar value of dividend equivalents payable upon vesting
of the underlying award. |
Name | | | Executive
Contributions in Last FY ($) | | | Registrant
Contributions in Last FY(1) ($) | | | Aggregate
Earnings in Last FY(2) ($) | | | Aggregate
Withdrawals/ Distributions ($) | | | Aggregate
Balance at Last FYE(3) ($) |
| | 68,688 | | | 92,058 | | | 545,174 | | | — | | | 3,182,168 | |
Gregory
B. Graves | | | 33,900 | | | 87,234 | | | 128,781 | | | — | | | 1,146,070 |
Todd
J. Edlund | | | 47,250 | | | 47,615 | | | 72,887 | | | — | | | 516,496 |
Susan
Rice | | | 15,497 | | | 20,014 | | | 31,590 | | | — | | | 112,054 |
Clint
Haris | | | — | | | 17,998 | | | 117,803 | | | — | | | 977,150 |
(1) | The employer matching contribution reflected in this column is established by an offset formula which includes contributions to the employee’s 401(k) account in the calculation of the employer matching contribution under this non-qualified retirement plan. The amounts listed for each of the named executive officers in this column are detailed with respect to each named executive officer in footnote 5 to the Summary Compensation Table above in clause (b) of that footnote. |
(2) | The amounts listed for each of the named executive officers in this column are determined by the size of the non-qualified retirement plan account of the respective named executive officers and by
their respective investment elections under the SERP from among the same investment funds that are offered under Entegris’ 401(k) Plan. |
(3) | The amounts in this column represent the fully vested balance as of December 31, 2021 and include amounts deferred in previous years. These amounts include contributions reported in the Summary Compensation Table for years 2020 and 2019 as follows: Mr. Loy, $67,256 and $70,975, respectively; Mr. Graves, $25,469 and $26,215, respectively; Mr. Edlund, $25,353 and $27,461, respectively; Ms. Rice, $14,467 and $15,688, respectively; and Mr. Haris, $12,541 and $14,947, respectively. |
(i) | payment of all unpaid compensation and expenses earned or incurred prior to the date of termination; |
(ii) | a lump-sum severance payment equal to the sum of two times (or, in the case of Mr. Loy, three times) the executive’s base salary plus two times (or, in the case of Mr. Loy, three times) the greater of the highest annual bonus during the three years prior to termination or target bonus for the year of termination; |
(iii) | medical, dental and life insurance benefits for executive and executive’s
family members for a period of two years (or, in the case of Mr. Loy, three years) following the date of termination; |
(iv) | immediate vesting of all unvested equity awards, and, in the case of stock options, the ability to exercise stock options for a period of up to one year following such termination (or, if earlier, until the expiration date of the options); and |
(v) | up to $15,000 of outplacement services. |
Name | | | Salary
($) | | | Cash Incentive Compensation Payment(1)
($) | | | Insurance and other Benefits(2) ($) | | | Net
Value of Acceleration of Vesting of In-The Money Options(3) ($) | | | Aggregate
Value of Acceleration of Vesting of Restricted Stock, Restricted Stock
Units and Performance Share Units(4) ($) | | | Total
($) |
| | 3,000,000 | | | 4,624,539 | | | 312,648 | | | 17,260,971 | | | 32,982,350 | | | 58,180,508 | |
Gregory
B. Graves | | | 1,140,000 | | | 1,416,526 | | | 118,230 | | | 5,488,949 | | | 7,921,166 | | | 16,084,870 |
Todd
J. Edlund | | | 1,060,000 | | | 1,236,240 | | | 142,575 | | | 5,784,713 | | | 8,701,665 | | | 16,925,193 |
Susan
Rice | | | 830,000 | | | 727,200 | | | 71,991 | | | 2,556,059 | | | 3,687,360 | | | 7,872,610 |
Clint
Haris | | | 780,000 | | | 717,384 | | | 42,954 | | | 2,013,324 | | | 3,074,761 | | | 6,628,423 |
(1) | Amounts are based upon the cash incentive compensation paid with respect to 2020, which was the highest cash incentive compensation paid to each such named executive officer for the three fiscal years immediately preceding 2021. |
(2) | Reflects the premiums to be paid by Entegris to provide the named executive officer with health and dental benefits substantially similar to those they were receiving as of December 31, 2021 (with an assumed 5% premium increase per year on medical insurance), the premiums to be paid by Entegris to provide the named executive officer with continuation of group term life insurance and the cost
paid by Entegris for the outplacement allowance referred to above. |
(3) | Reflects the net value of in-the-money unvested stock options based on the closing price of Entegris’ stock on the last trading day of 2021. The net value of in-the-money vested and unvested stock options based on the closing price of Entegris’ stock on the last trading day of 2021 ($138.58), is: (a) in the case of Mr. Loy – $17,260,971; (b) in the case of Mr. Graves – $5,991,992; (c) in the case of Mr. Edlund –$6,371,610; (d) in the case of Ms. Rice – $5,261,012; and (e) in the case of Mr. Haris – $5,284,983. |
(4) | Reflects the value of restricted stock units and performance share units, which are calculated assuming Entegris achieves maximum performance, as of December 31, 2021, subject to valuation caps and valued based on the closing price of Entegris’ stock on the last trading day of 2021 ($138.58), plus accrued dividends. The value of accrued dividends is: (a) in the case of Mr. Loy – $110,778; (b) in the case of Mr. Graves – 30,250; (c) in the case of Mr. Edlund – $31,698; (d) in
the case of Ms. Rice – $13,943; and (e) in the case of Mr. Haris – $10,846. |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters |
Name of Beneficial Owner | | | Amount And Nature
of Shares Beneficially Owned(1) | | | % of Class(2) |
Michael
A. Bradley | | | 50,029 | | | * |
Rodney
Clark | | | 273 | | | * |
James
F. Gentilcore | | | 10,226(3) | | | * |
Yvette
Kanouff | | | 273 | | | * |
James
P. Lederer | | | 13,094 | | | * |
Paul
L. H. Olson | | | 14,740 | | | * |
Azita
Saleki-Gerhardt | | | 14,123 | | | * |
| | 201,435(4) | | | * | |
Gregory
B. Graves | | | 56,519(4) | | | * |
Todd
Edlund | | | 199,994(4) | | | * |
Susan
Rice | | | 74,371(4) | | | * |
Clint
Haris | | | 69,648(4) | | | * |
All
Directors and Executive Officers as a Group (20) persons (including those listed above): | | | 939,466 (4)(5) | | | * |
* | None of these officers or directors owns as much as 1.0% of outstanding Entegris common stock. |
(1) | Included in the shares listed as beneficially owned are the following number of shares subject to acquisition through the exercise of stock options under Entegris stock option plans, vesting of RSUs granted in 2021 and vesting of performance share units granted in 2019 which the following named executive officers have the right to acquire within 60 days following January 7, 2022: Mr. Loy – 151,434 shares; Mr. Graves – 55,793 shares; Mr. Edlund – 58,372 shares; Ms. Rice – 48,792 shares and Mr. Haris – 47,553 shares; all other
executive officers as a group – 112,959 shares. |
(2) | Calculated based on 135,516,966 issued and outstanding shares of Entegris common stock as of January 7, 2021. |
(3) | Includes 4,090 shares indirectly owned through a family trust. |
(4) | Includes shares of common stock that may be acquired by the executive officer in respect of vesting of performance share units granted in 2019, assuming maximum performance and subject to a value cap equal to 300% of the original grant. |
(5) | Includes
474,903 shares subject to acquisition by executive officers and directors within 60 days following January 7, 2021, including those described in footnote 1 above. |
Name
and address of beneficial owner | | | Amount and nature of beneficial ownership | | | Percent
of class(1) |
T. Rowe Price Associates, Inc. 100 E. Pratt Street | | | 17,109,185(2) | | | 12.6% |
BlackRock,
Inc. 55 East 52nd Street | | | 14,066,611(3) | | | 10.4% |
The
Vanguard Group 100 Vanguard Boulevard | | | 12,188,799(4) | | | 9.0% |
(1) | Calculated based on 135,516,966 outstanding shares of Entegris common stock as of January 7, 2022. |
(2) | Based on information set forth in the Schedule 13G/A filed with the SEC on February 16, 2021, by T. Rowe Price Associates, Inc., a registered investment advisor (“T. Rowe Price”), relating to Entegris common stock. T. Rowe Price reported having sole dispositive power with respect to all such shares, shared dispositive power with respect to no shares, sole voting power with respect to 5,055,921 of such shares and shared voting power with respect to no shares. |
(3) | Based
on information set forth in the Schedule 13G/A filed with the SEC on May 7, 2021, by BlackRock, Inc., a holding company (“BlackRock”), relating to Entegris common stock. BlackRock reported having sole dispositive power with respect to all such shares, shared dispositive power with respect to no shares, sole voting power with respect to 13,594,707 of such shares and shared voting power with respect to no shares. |
(4) | Based on information set forth in the Schedule 13G/A filed with the SEC on February 10, 2021, by The Vanguard Group, a registered investment advisor (“Vanguard”), relating to Entegris common stock. Vanguard reported having sole dispositive power with respect to 11,974,867 of such shares, shared
dispositive power with respect to 213,932 of such shares, sole voting power with respect to no shares and shared voting power with respect to 104,758 of such shares. |
Item 13. | Certain Relationships and Related Party Transactions |
Item 14. | Principal Accountant Fees and Services |
Service | | | 2021
($) | | | 2020 ($) |
Audit Fees | | | 1,855,000(1) | | | 1,751,000 |
Audit-Related
Fees | | | 81,000 | | | 120,000 |
Tax
Fees | | | 696,000 | | | 829,000 |
All
Other Fees | | | — | | | — |
Total | | | 2,632,000 | | | 2,700,000 |
(1) | The 2021 Audit Fees are preliminary, as the December 31, 2021 audit reports are not yet filed. |
• | Annual
Report on Form 10-K for the fiscal year ended December 31, 2020, (filed with the SEC on February 5, 2021); |
• | Quarterly Report on Form 10-Q for the period ending October 2, 2021, (filed with the SEC on October 26, 2021); |
• | The information in Entegris’ definitive proxy statement on Schedule 14A for Entegris’ April 29,
2021 annual meeting of stockholders, filed with the SEC on March 17, 2021; |
• | Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.1 or 7.01 thereof) filed with the SEC on February 17, 2021, April 14, 2021, April 19, 2021, April 27,
2021, April 29, 2021, April 29, 2021, April 30, 2021, May 21, 2021, July 14, 2021, July 27, 2021, October 13,
2021, October 26, 2021, October 27, 2021, December 1, 2021, December 15, 2021, December 16, 2021 and December 22, 2021; and |
• | any
description of shares of Entegris common stock contained in a registration statement filed pursuant to the Exchange Act and any amendment or report filed for the purpose of updating such description. |
• | Annual Report on Form 10-K for the fiscal year ended September 30, 2021,
filed with the SEC on November 12, 2021; |
• | Definitive Proxy Statement on Schedule 14A for CMC’s March 3, 2021 annual meeting filed with the SEC on January 19, 2021; and |
• | Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.01 or 7.01 thereof) filed with the SEC on November 15,
2021, November 18, 2021, December 7, 2021, December 8, 2021, December 16, 2021 and December 20, 2021. |
ARTICLE I | ||||||
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THE
MERGER | ||||||
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ARTICLE
II | ||||||
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EFFECT
ON THE CAPITAL STOCK OF THE CONSTITUENT ENTITIES | ||||||
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ARTICLE
III | ||||||
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY | ||||||
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ARTICLE IV | ||||||
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REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB | ||||||
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ARTICLE
V | ||||||
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COVENANTS | ||||||
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ARTICLE
VI | ||||||
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ADDITIONAL
AGREEMENTS | ||||||
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ARTICLE VII | ||||||
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CONDITIONS
PRECEDENT | ||||||
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ARTICLE
VIII | ||||||
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TERMINATION,
AMENDMENT AND WAIVER | ||||||
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ARTICLE
IX | ||||||
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GENERAL
PROVISIONS | ||||||
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| | | |
Term | | | Section |
Action | | | 9.03 |
Adjusted
PSU | | | 2.04(d) |
Adjusted RSU | | | 2.04(b) |
Adjusted
Stock Option | | | 2.04(a) |
Affiliate | | | 9.03 |
Agreement | | | Preamble |
Alternative
Acquisition Agreement | | | 5.02(a) |
Alternative Financing | | | 6.11(a) |
Anti-Money
Laundering Laws | | | 9.03 |
Applicable Law(s) | | | 9.03 |
Book-Entry
Shares | | | 2.01(c) |
Business | | | 9.03 |
Business
Day | | | 9.03 |
Capex Plan | | | 5.01(b)(vi) |
Capitalization
Date | | | 3.03(a) |
CARES Act | | | 9.03 |
Cash
Consideration | | | 2.01(c) |
Certificate | | | 2.01(c) |
Certificate
of Merger | | | 1.03 |
Closing | | | 1.02 |
Closing
Date | | | 1.02 |
Code | | | 9.03 |
Collective
Bargaining Agreement | | | 9.03 |
Commitment Letter | | | 4.12 |
Commitment
Parties | | | 4.12 |
Common Stock Trust | | | 2.01(e) |
Company | | | Preamble |
Company
Acceptable Confidentiality Agreement | | | 9.03 |
Company Acquisition Proposal | | | 5.02(f)(i) |
Company
Adverse Recommendation Change | | | 5.02(d) |
Company Benefit Plans | | | 3.14(a) |
Company
Board | | | Recitals |
Company By-laws | | | 3.01(b) |
Company
Cash-Settled Phantom Stock Unit | | | 2.04(f) |
Company Cash-Settled Phantom Stock Unit Consideration | | | 2.04(g) |
Company
Charter | | | 3.01(b) |
Company Common Stock | | | 9.03 |
Company
Disclosure Letter | | | III |
Company DSU | | | 2.04(d) |
Company
DSU Consideration | | | 2.04(d) |
Company Equity Award Consideration | | | 2.04(h) |
Company
Equity Awards | | | 9.03 |
Company Indemnified Parties | | | 6.04(a) |
Company
Intellectual Property | | | 9.03 |
Company Intervening Event | | | 5.02(f)(iii) |
Company
Material Adverse Effect | | | 9.03, 9.03 |
Company PSU | | | 2.04(e) |
Company
Recommendation | | | 3.02 |
Company Restricted Share | | | 2.04(b) |
Term | | | Section |
Company
Restricted Share Consideration | | | 2.04(b) |
Company RSU | | | 2.04(b) |
Company
SEC Documents | | | 3.05(a) |
Company Securities | | | 3.03(b) |
Company
Severance Plan | | | 6.07(a) |
Company Stock Option | | | 2.04(a) |
Company
Stock Plans | | | 9.03 |
Company Stockholder Approval | | | 3.02 |
Company
Stockholders Meeting | | | 3.02 |
Company Superior Proposal | | | 5.02(f)(ii) |
Company
Vested RSU | | | 2.04(c) |
Company Vested RSU Consideration | | | 2.04(c) |
Compliant | | | 9.03 |
Confidentiality
Agreement | | | 6.02(b) |
Conflict Minerals | | | 3.24 |
Continuation
Period | | | 6.07(a) |
Continuing Employee | | | 6.07(a) |
| | 9.03 | |
control | | | 9.03 |
COVID-19 | | | 9.03 |
COVID-19
Measures | | | 9.03 |
Customs & Trade Laws | | | 9.03 |
DGCL | | | 1.01 |
Directors’
Deferred Compensation Plan | | | 9.03 |
Dissenting Shares | | | 2.03 |
DOJ | | | 9.03 |
dollars | | | 9.04 |
Effect | | | 9.03 |
Effective
Time | | | 1.03 |
Employee Representative Body | | | 9.03 |
End
Date | | | 8.01(b)(i) |
Environmental Laws | | | 9.03 |
Equity
Award Exchange Ratio | | | 9.03 |
Equity Award Schedule | | | 3.03(c) |
ERISA | | | 9.03 |
ESPP | | | 2.04(e) |
Excess
Shares | | | 2.01(e) |
Exchange Act | | | 9.03 |
Exchange
Agent | | | 2.02(a) |
Exchange Fund | | | 2.02(a) |
Exchange
Ratio | | | 2.01(c) |
Existing Credit Agreement | | | 9.03 |
Expert | | | 6.11(d) |
Fee
Letter | | | 4.12 |
Financing | | | 4.12 |
Financing
Sources | | | 9.03 |
FTC | | | 9.03 |
GAAP | | | 9.03 |
Governmental
Entity | | | 9.03 |
Hazardous Substance | | | 9.03 |
Term | | | Section |
HSR
Act | | | 9.03 |
Inbound IP Contracts | | | 3.12(a)(ix) |
Indebtedness | | | 9.03 |
Insurance
Policy | | | 3.21(a) |
International Company Benefit Plan | | | 3.14(a) |
IRS | | | 3.14(a) |
Knowledge | | | 9.03 |
Leased
Real Property | | | 3.15(a) |
Letter of Transmittal | | | 2.02(b) |
Lien | | | 9.03 |
Marketing
Period | | | 9.03 |
| | 3.12(a) | |
Maximum
Amount | | | 6.04(d) |
Merger | | | Recitals |
Merger
Amounts | | | 4.12 |
Merger Consideration | | | 2.01(c) |
Merger
Sub | | | Preamble |
NASDAQ | | | 9.03 |
Offering
Documents | | | 6.11(d) |
Order | | | 9.03 |
Outbound
IP Contracts | | | 3.12(a)(x) |
Owned Real Property | | | 3.15(a) |
Parent | | | Preamble |
Parent
Board | | | Recitals |
Parent By-laws | | | 4.01(b) |
Parent
Capitalization Date | | | 4.03(a) |
Parent Charter | | | 4.01(b) |
Parent
Common Stock | | | 4.03(a) |
Parent Disclosure Letter | | | Article
IV |
Parent Plans | | | 6.07(b) |
Parent SEC Documents | | | 4.05(a) |
Parent
Securities | | | 4.03(b) |
Parent Stock Plan | | | 9.03 |
Parent
Trading Price | | | 9.03 |
PATRIOT Act | | | 3.23(e) |
Payoff
Amount | | | 6.12 |
Payoff Letter | | | 6.12 |
Per
Share Cash Equivalent Consideration | | | 9.03 |
Permits | | | 9.03 |
Permitted
Alternative Financing | | | 6.11(a) |
Permitted Liens | | | 9.03 |
Person | | | 9.03 |
Pre-Paid
Tail | | | 6.04(d) |
Proxy Statement | | | 3.16 |
Real
Property | | | 3.15(a) |
Real Property Lease | | | 3.15(b) |
Registration
Statement | | | 3.16 |
Regulation S-X | | | 9.03 |
Regulatory
Action | | | 6.03(c) |
Regulatory Laws | | | 9.03 |
Term | | | Section |
Release | | | 9.03 |
Representatives | | | 5.02(a) |
Required
Alternative Financing | | | 6.11(b) |
Required Approvals | | | 7.01(b) |
Required
Information | | | 9.03 |
Sanctioned Jurisdiction | | | 9.03 |
Sanctioned
Person | | | 9.03 |
Sanctions | | | 9.03 |
SEC | | | 9.03 |
Securities
Act | | | 9.03 |
Share Issuance | | | 9.03 |
Significant
Company Customer | | | 3.25(a) |
Significant Company Supplier | | | 3.25(b) |
Subsidiary | | | 9.03 |
Surviving
Company | | | 1.01 |
Takeover Laws | | | 6.03(b) |
Tax
Returns | | | 9.03 |
Taxes | | | 9.03 |
Termination
Fee | | | 8.03(b) |
Treasury Regulations | | | 9.03 |
VWAP | | | 9.03 |
| | (a) | | | if
to the Company, to: | ||||
| | | | | | ||||
| | | | 870
North Commons Drive | |||||
| | | | Attention: | | | H.
Carol Bernstein | ||
| | | | Email: | | | |||
| | | | | |
| | with
a copy (which shall not constitute notice) to: | |||||||
| | | | | | ||||
| | | | Wachtell,
Lipton, Rosen & Katz 51 West 52nd Street | |||||
| | | | Attention: | | | Edward
D. Herlihy | ||
| | | | | | Brandon
C. Price | |||
| | | | Email: | | | |||
| | | | | | ||||
| | | | | | ||||
| | (b) | | | if
to Parent or Merger Sub, to: | ||||
| | | | | | ||||
| | | | 129
Concord Road Billerica, MA | |||||
| | | | Attention: | | | General
Counsel | ||
| | | | Email: | | | |||
| | | | | | ||||
| | with
a copy (which shall not constitute notice) to: | |||||||
| | | | | | ||||
| | | | Skadden,
Arps, Slate, Meagher & Flom LLP 525 University Avenue | |||||
| | | | Attention: | | | Kenton
J. King | ||
| | | | | | Mike
Ringler | |||
| | | | Email: | | | |||
| | | | | |
| | CMC
MATERIALS, INC. | |||||||
| | | | | |||||
| | By: | | | /s/
David H. Li | ||||
| | | | Name: | | | |||
| | | | Title: | | | President
and Chief Executive Officer | ||
| | | | | | ||||
| | ENTEGRIS,
INC. | |||||||
| | | | | | ||||
| | By: | | | /s/
Bertrand Loy | ||||
| | | | Name: | | | |||
| | | | Title: | | | President
& Chief Executive Officer | ||
| | | | | | ||||
| | YOSEMITE
MERGER SUB, INC. | |||||||
| | | | | | ||||
| | By: | | | /s/
Joseph Colella | ||||
| | | | Name: | | | |||
| | | | Title: | | | SVP,
General Counsel & Secretary |
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Very truly yours, | | | |
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This ‘424B3’ Filing | Date | Other Filings | ||
---|---|---|---|---|
2/19/25 | ||||
2/19/24 | ||||
3/14/23 | ||||
2/19/23 | ||||
1/3/23 | ||||
12/16/22 | ||||
12/14/22 | ||||
11/25/22 | ||||
11/23/22 | ||||
11/15/22 | ||||
9/30/22 | ||||
9/15/22 | ||||
9/6/22 | ||||
8/19/22 | ||||
8/15/22 | ||||
7/5/22 | ||||
7/1/22 | ||||
5/31/22 | ||||
3/3/22 | ||||
3/2/22 | ||||
3/1/22 | 4/A | |||
2/24/22 | 4 | |||
2/19/22 | ||||
2/1/22 | 4, 425, 8-K | |||
1/29/22 | ||||
Filed on: | 1/28/22 | 8-K, EFFECT, SC 13G/A | ||
1/25/22 | ||||
1/21/22 | UPLOAD | |||
1/12/22 | ||||
1/10/22 | ||||
1/7/22 | ||||
12/31/21 | 10-K, SD | |||
12/30/21 | ||||
12/29/21 | ||||
12/22/21 | 8-K | |||
12/16/21 | 425, 8-K | |||
12/15/21 | 4, 425, 8-K | |||
12/14/21 | 8-K | |||
12/13/21 | ||||
12/9/21 | ||||
12/8/21 | ||||
12/7/21 | ||||
12/6/21 | ||||
12/5/21 | ||||
12/4/21 | ||||
12/3/21 | 4 | |||
12/2/21 | ||||
12/1/21 | 4, 8-K | |||
11/30/21 | 8-K | |||
11/28/21 | ||||
11/27/21 | ||||
11/26/21 | ||||
11/24/21 | ||||
11/23/21 | ||||
11/22/21 | ||||
11/18/21 | ||||
11/17/21 | 4 | |||
11/16/21 | ||||
11/15/21 | 4 | |||
11/12/21 | 4 | |||
11/9/21 | 4 | |||
10/27/21 | 8-K | |||
10/13/21 | 8-K | |||
10/2/21 | 10-Q | |||
10/1/21 | ||||
9/30/21 | ||||
7/2/21 | ||||
5/7/21 | 4, SC 13G/A | |||
4/29/21 | 4, 8-K, 8-K/A | |||
3/3/21 | 4 | |||
2/25/21 | 4 | |||
2/16/21 | 4, SC 13G/A | |||
2/15/21 | ||||
2/10/21 | SC 13G/A | |||
2/2/21 | 4, 8-K | |||
1/19/21 | ||||
1/7/21 | ||||
1/1/21 | ||||
12/31/20 | 10-K, SD | |||
12/3/20 | ||||
10/1/20 | ||||
9/30/20 | ||||
8/8/20 | ||||
2/4/20 | 4, 8-K | |||
1/1/20 | ||||
12/31/19 | 10-K, 5, SD | |||
12/20/19 | ||||
12/5/19 | ||||
10/1/19 | ||||
2/5/19 | 4, 425, 8-K | |||
1/1/19 | ||||
12/31/18 | 10-K, SD | |||
12/6/18 | ||||
11/15/18 | 4 | |||
10/1/18 | ||||
9/30/18 | ||||
2/12/18 | 3, 4 | |||
1/16/18 | ||||
12/31/17 | 10-K, SD | |||
12/31/16 | 10-K, SD | |||
10/1/16 | 10-Q | |||
3/31/16 | ||||
1/1/16 | ||||
1/1/09 | ||||
8/6/05 | 3, 4, 8-K, 8-K/A | |||
1/1/05 | ||||
List all Filings |