UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(RULE 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant to §240.14a-12

GCP APPLIED TECHNOLOGIES INC.

 

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☐ No fee required.

☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

(2)

Aggregate number of securities to which transaction applies:

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

(4)

Proposed maximum aggregate value of transaction:

 

(5)

Total fee paid:

 

☒	Fee paid previously with preliminary materials.

 

☐	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

(2)

Form, Schedule or Registration Statement No.:

 

(3)

Filing Party:

 

(4)

Date Filed:

DATED JANUARY 31, 2022

 

 

 

 

2325 Lakeview Parkway

Alpharetta, Georgia 30009

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

January 31, 2022

Dear Fellow Stockholders:

You are cordially invited to attend a special meeting of stockholders of GCP Applied Technologies Inc., a Delaware corporation (“GCP,” the “Company,” “we” or “us”), to be held on March 8, 2022 at 10:00 a.m. Eastern Time. Due to the impact of the COVID-19 pandemic and to support the health and well-being of our stockholders, employees and their families, the special meeting will be held in a virtual meeting format only, through a live webcast. You will be able to vote and submit questions and access the Company’s stock list by visiting register.proxypush.com/gcp and participating live in the webcast at register.proxypush.com/gcp. A secure control number that will allow you to participate in the meeting electronically can be found on the enclosed proxy card. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting. This proxy statement is dated January 31, 2022 and was first mailed to stockholders of GCP on or about January 31, 2022.

At the special meeting, you will be asked to consider and vote on three matters:

 

(i)

a proposal to adopt the Agreement and Plan of Merger, dated December 5, 2021 (as it may be amended from time to time, the “Merger Agreement”), by and among Cyclades Parent, Inc., a Delaware corporation (“Parent”), Cyclades Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), GCP, and solely for the purpose of Section 8.13 thereof, Compagnie de Saint-Gobain S.A., a société anonyme organized under the laws of France (“Saint-Gobain”). Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into GCP (the “Merger”), with GCP continuing as the surviving corporation of the Merger (the “Surviving Corporation”) and as a wholly-owned subsidiary of Parent;

 

(ii)

a proposal to adjourn the special meeting to a later date or dates, if necessary to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting; and

 

(iii)

a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may become payable to our named executive officers in connection with the Merger.

If the Merger is completed, you will be entitled to receive $32.00 in cash, without interest and subject to all applicable withholding taxes, for each share of GCP common stock you own (unless you have properly demanded appraisal for your shares in accordance with, and have complied in all respects with, Section 262 of the General Corporation Law of the State of Delaware and such demand is not effectively withdrawn), which represents a premium of approximately 37% over the closing price of GCP common stock on November 30, 2021, the last trading day before a media report was published speculating about a potential sale of the Company, and a premium of 39% over the 30-day volume-weighted average on the same date.

After reviewing and considering the terms and conditions of the Merger and the factors more fully described in the enclosed proxy statement, our board of directors unanimously (i) approved, adopted and declared advisable the

Merger Agreement, the Voting Agreements (as defined below under “Questions and Answers about the Special Meeting and the Merger” on page 15 and “Voting Agreements” on page 107, respectively) and the consummation of the transactions contemplated thereby, including the Merger; (ii) determined that the transactions contemplated by the Merger Agreement, including the Merger, and the Voting Agreements are advisable, fair to, and in the best interests of, GCP and its stockholders; (iii) directed that the Merger Agreement be submitted to the stockholders of GCP for its adoption at the special meeting; and (iv) recommended that GCP’s stockholders adopt the Merger Agreement.

Our board of directors recommends that you vote: (1) “FOR” the proposal to adopt the Merger Agreement; (2) “FOR” the proposal to adjourn the special meeting to a later date or dates if necessary; and (3) “FOR” the non-binding, advisory proposal to approve certain compensation that will or may become payable to our named executive officers in connection with the Merger.

The accompanying proxy statement contains, among other things, detailed information about GCP, the special meeting, the Merger, the Merger Agreement and the Merger-related compensation. We encourage you to read the accompanying proxy statement, including its appendices and all documents incorporated by reference therein, carefully and in its entirety.

Your vote is very important, regardless of the number of shares of GCP common stock that you own. We cannot complete the Merger unless the Merger Agreement is adopted by the affirmative vote of the holders of a majority of the shares of outstanding GCP common stock as of the record date entitled to vote on the matter. The failure of any stockholder of record to vote in person by ballot at the special meeting or to submit a signed proxy card will have the same effect as a vote “AGAINST” the Merger Agreement. If you hold your shares in “street name,” the failure to instruct your broker, bank or nominee on how to vote your shares will have the same effect as a vote “AGAINST” the Merger Agreement. If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” the Merger Agreement.

We hope that you will be able to attend the special meeting. However, whether or not you plan to attend in person, please complete, sign, date and return the proxy card enclosed with the accompanying proxy statement, or, if your shares are held in “street name” through a broker, bank or nominee, instruct your broker, bank or nominee on how to vote your shares using the voting instruction form furnished by your broker, bank or nominee, as promptly as possible. Submitting a signed proxy by mail will ensure your shares are represented at the special meeting. If your shares are held in “street name” through a broker, bank or nominee, you may provide voting instructions through your broker, bank or nominee by completing and returning the voting form provided by your broker, bank or nominee, or electronically over the Internet or by telephone through your broker, bank or nominee if such a service is provided. To provide voting instructions over the Internet or by telephone through your broker, bank or nominee, you should follow the instructions on the voting form provided by your broker, bank or nominee.

The special meeting may be adjourned by the chairman of the meeting or a majority of the shares represented in person or by proxy at the special meeting, whether or not there is a quorum. The special meeting may be postponed or cancelled by the board of directors in its discretion.

On behalf of the board of directors and management of GCP, I extend our appreciation for your continued support and your consideration of this matter.

 

Neither the U.S. Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the transactions described in this document or the accompanying proxy statement, including the Merger, passed upon the merits or fairness of such transactions, or passed upon the adequacy or accuracy of the disclosure in the accompanying proxy statement. Any representation to the contrary is a criminal offense.

DATED JANUARY 31, 2022

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON MARCH 8, 2022

Notice is hereby given that a special meeting of stockholders of GCP Applied Technologies Inc., a Delaware corporation (“GCP,” the “Company,” “we” or “us”), will be held on March 8, 2022, virtually via the internet at register.proxypush.com/gcp, at 10:00 a.m. Eastern Time, for the following purposes:

 

1.

The Merger Proposal. To adopt the Agreement and Plan of Merger, dated December 5, 2021, by and among Cyclades Parent, Inc., a Delaware corporation (“Parent”), Cyclades Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), GCP, and solely for the purpose of Section 8.13 thereof, Compagnie de Saint-Gobain S.A., a société anonyme organized under the laws of France (as it may be amended from time to time, the “Merger Agreement”), pursuant to which, upon the satisfaction or waiver of the conditions to closing set forth therein, Merger Sub will merge with and into GCP (the “Merger”), with GCP surviving the Merger as a wholly-owned subsidiary of Parent; a copy of the Merger Agreement is attached as Appendix A to the accompanying proxy statement and is incorporated by reference therein (the “Merger Proposal”);

 

2.

The Adjournment Proposal. To approve the adjournment of the special meeting to a later date or dates, if necessary to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting (the “Adjournment Proposal”); and

 

3.

The Compensation Proposal. To approve, on a non-binding, advisory basis, certain compensation that will or may become payable to our named executive officers in connection with the Merger (the “Compensation Proposal”).

Only stockholders of record as of the close of business on January 14, 2022 are entitled to notice of the special meeting and to vote at the special meeting or at any adjournment or postponement thereof.

The accompanying proxy statement contains, among other things, detailed information about the Merger Proposal, the Adjournment Proposal and the Compensation Proposal. We encourage you to read the accompanying proxy statement, including its appendices and all documents incorporated by reference therein, carefully and in its entirety.

The affirmative vote of the holders of a majority of the shares of GCP common stock outstanding as of the record date and entitled to vote on the matter is required to approve the Merger Proposal. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the special meeting and entitled to vote on the matter is required to approve the Adjournment Proposal. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the special meeting and entitled to vote on the matter is required to approve the Compensation Proposal.

Your vote is very important, regardless of the number of shares of GCP common stock that you own. The failure of any stockholder of record to vote in person by ballot at the special meeting or to submit a signed proxy card will have the same effect as a vote “AGAINST” the Merger Proposal. If you hold your shares

in “street name,” you should instruct your broker, bank or nominee on how to vote your shares using the voting instruction form furnished by your broker, bank or nominee. The failure to do so will have the same effect as a vote “AGAINST” the Merger Proposal, but assuming a quorum is present, will have no effect on the outcome of any vote on the Adjournment Proposal or the Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Merger Proposal, the Adjournment Proposal and the Compensation Proposal. If you sign, date and return your proxy card without indicating how you wish to vote on a proposal, your proxy will be voted “FOR” such proposal.

The presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of outstanding GCP common stock entitled to vote at the special meeting will constitute a quorum for the transaction of business at the special meeting. Abstentions will be counted as present for purposes of determining the existence of a quorum. Shares held in “street name” for which the applicable broker, bank or nominee receives no instructions regarding how to vote on any of the proposals before the special meeting will not be counted as present at the special meeting for quorum purposes. Shares held in “street name” for which the applicable broker, bank or nominee receives instructions regarding how to vote on one or more but not all of the proposals before the special meeting will be counted present at the special meeting for quorum purposes.

Stockholders who do not vote in favor of the Merger Proposal and who otherwise meet the requirements of Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”) will have the right to seek appraisal of the fair value of their shares of GCP common stock, as determined in accordance with Section 262 of the DGCL. In addition to not voting in favor of the Merger Proposal, any stockholder wishing to exercise its appraisal rights must deliver a written demand for appraisal to GCP before the vote on the Merger Proposal and must comply in all respects with the requirements of Section 262 of the DGCL, the text of which is attached as Appendix B to the accompanying proxy statement and is incorporated by reference therein.

Our board of directors recommends that you vote: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

 

January 31, 2022

YOUR VOTE IS IMPORTANT

Ensure that your shares of GCP common stock are voted at the special meeting by submitting your proxy or, if your shares of GCP common stock are held in “street name” through a broker, bank or nominee, by contacting your broker, bank or nominee. If you do not submit a proxy, vote in person at the special meeting or instruct your broker, bank or nominee how to vote your shares, it will have the same effect as voting “AGAINST” the Merger Proposal, but assuming a quorum is present, will have no effect on the outcome of any vote on the Adjournment Proposal or the Compensation Proposal.

If your shares of GCP common stock are registered directly in your name: If you are a stockholder of record, you may submit a proxy to vote your shares of GCP common stock by mail. Please follow the instructions on the enclosed form of proxy.

If your shares of GCP common stock are held in the name of a broker, bank or nominee: You will receive voting instructions from the organization holding your account and you must follow those instructions to vote your shares of GCP common stock. As a beneficial owner, you have the right to direct your broker, bank or nominee on how to vote the shares of GCP common stock in your account. Your broker, bank or nominee cannot vote on any of the proposals, including the Merger Proposal, without your instructions.

If you fail to submit a signed proxy card, fail to attend the special meeting or, if you hold your shares through a bank, broker or nominee, fail to provide voting instructions to your bank, broker or nominee, your shares of GCP common stock will not be counted for purposes of determining whether a quorum is present at the special meeting. If you hold your shares of GCP common stock through a broker, bank or nominee, you must obtain from the record holder a valid legal proxy issued in your name in order to vote in person at the special meeting. A stockholder providing a proxy may revoke it if such revocation is exercised by submitting a proxy again via Internet or telephone, by completing, signing, dating and mailing a proxy of a later date at any time before 11:59 p.m., Eastern Time, the day before the special meeting, by providing written notice of revocation to our Vice President, General Counsel and Secretary, or by voting in person at the special meeting. See the instructions set forth in “Revocability of Proxies” on page 26 of the accompanying proxy statement. Attendance at the special meeting alone will not revoke a submitted proxy.

We encourage you to read the accompanying proxy statement, including its appendices and all documents incorporated by reference therein, carefully and in their entirety. If you have any questions concerning the Merger, the special meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of GCP common stock, please contact our proxy solicitor:

Okapi Partners LLC

(888) 785-6707

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE COMPLETE, DATE, SIGN AND RETURN A PROXY CARD, OR INSTRUCT YOUR BROKER, BANK OR NOMINEE ON HOW TO VOTE YOUR SHARES USING THE VOTING INSTRUCTION FORM FURNISHED BY YOUR BROKER, BANK OR NOMINEE, AS PROMPTLY AS POSSIBLE.

TABLE OF CONTENTS

 

		Page
SUMMARY			1
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER			15
THE SPECIAL MEETING			24
Date, Time and Place			24
Purpose of the Special Meeting			24
Record Date; Shares Entitled to Vote; Quorum			24
Vote Required; Abstentions and Broker Non-Votes			25
Stock Ownership and Interests of Certain Persons			25
Voting of Proxies			25
Revocability of Proxies			26
Board of Directors’ Recommendation			27
Expenses of Proxy Solicitation			27
Anticipated Date of Completion of the Merger			27
Other Matters			27
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting			27
Householding of Special Meeting Materials			27
Rights of Stockholders Who Assert Appraisal Rights			28
Questions and Additional Information			29
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS			30
THE MERGER			32
Parties Involved in the Merger			32
Certain Effects of the Merger on GCP			33
Effect on GCP if the Merger is Not Completed			33
Merger Consideration			34
Background of the Merger			34
Recommendation of Our Board of Directors and Reasons for the Merger			47
Opinion of RBC Capital Markets, LLC			51
Certain Financial Projections			57
Management Projections			58
Interests of the Directors and Executive Officers of GCP in the Merger			60
Appraisal Rights			69
Accounting Treatment			75
Material U.S. Federal Income Tax Consequences of the Merger			75
Regulatory Approvals Required for the Merger			79
THE MERGER AGREEMENT			82
Explanatory Note Regarding the Merger Agreement and the Summary of the Merger Agreement			82
Effects of the Merger; Directors and Officers; Certificate of Incorporation; Bylaws			83
Closing and Effective Time of the Merger			83
Merger Consideration			83
Termination of GCP Equity Plans			84
Dissenting Shares			85
Exchange and Payment Procedures			85
Guarantee			86
Representations and Warranties			86
Conduct of Business Pending the Merger			89
No Solicitation of Other Offers; Change of Recommendation			92
Required Stockholder Vote			95
Consents, Approvals and Filings			96
Continuing Employees			98
Directors’ and Officers’ Indemnification and Insurance			99

		Page
Litigation Relating to the Merger			99
Delisting and Deregulation of Our Common Stock			100
Senior Notes			100
Conditions to the Closing of the Merger			101
Termination of the Merger Agreement			102
Termination Fee			104
Specific Performance			105
Limitation on Recourse			105
Fees and Expenses			106
No Third Party Beneficiaries			106
Amendments; Waivers			106
VOTING AGREEMENTS			107
Voting Provisions			107
Restrictions on Transfer			107
Non-solicitation			108
Termination			108
RIGHTS AGREEMENT AMENDMENT			109
PROPOSAL 1: APPROVAL OF THE MERGER AGREEMENT			110
The Merger Agreement Proposal			110
Vote Required and Board Recommendation			110
PROPOSAL 2: ADJOURNMENT OF THE SPECIAL MEETING			111
The Adjournment Proposal			111
Vote Required and Board Recommendation			111
PROPOSAL 3: ADVISORY VOTE ON MERGER-RELATED NAMED EXECUTIVE OFFICER COMPENSATION			112
The Compensation Proposal			112
Vote Required and Board Recommendation			112
MARKET PRICES AND DIVIDEND DATA			113
Dividends			113
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			114
FUTURE STOCKHOLDER PROPOSALS			117
OTHER MATTERS			118
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE			119
MISCELLANEOUS			121

APPENDICES

 

APPENDIX A—AGREEMENT AND PLAN OF MERGER			A-1
APPENDIX B—SECTION 262 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE—APPRAISAL RIGHTS			B-1
APPENDIX C—OPINION OF RBC CAPITAL MARKETS, LLC			C-1

 

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to address briefly some commonly asked questions regarding the special meeting, the Agreement and Plan of Merger, dated as of December 5, 2021 (as it may be amended from time to time, the “Merger Agreement”) by and among Cyclades Parent, Inc., a Delaware corporation (“Parent”), and Cyclades Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), GCP Applied Technologies Inc., a Delaware corporation (“GCP,” the “Company,” “we,” “us” or “our”), and, solely for purposes set forth therein, Compagnie de Saint-Gobain S.A., a société anonyme organized under the laws of France, and the merger of Merger Sub with and into GCP in accordance with the Merger Agreement (the “Merger”). These questions and answers may not address all questions that may be important to you as a stockholder of GCP. Please refer to the preceding section of this proxy statement entitled “Summary” and the more detailed information contained elsewhere in this proxy statement, its appendices, including the Merger Agreement, and the documents incorporated by reference herein, which you should read carefully and in their entirety.

Q: Why am I receiving these materials?

A: On December 5, 2021, GCP entered into the Merger Agreement, pursuant to which, among other things, Merger Sub will merge with and into GCP, with GCP surviving the Merger and becoming a wholly-owned subsidiary of Parent. A copy of the Merger Agreement is attached as Appendix A to this proxy statement and is incorporated by reference herein. Our Board is furnishing this proxy statement and form of proxy card to the holders of GCP common stock in connection with the solicitation of proxies in favor of the Merger Proposal, the Adjournment Proposal and the Compensation Proposal (each as described below) to be voted at a special meeting of stockholders or at any adjournments or postponements thereof.

Q: When and where is the special meeting?

A: The special meeting will take place on March 8, 2022 at 10:00 a.m. Eastern Time. Due to the impact of the COVID-19 pandemic and to support the health and well-being of our stockholders, employees and their families, the special meeting will be held in a virtual meeting format only, through a live webcast. You will be able to vote and submit questions by visiting register.proxypush.com/gcp and participating live in the webcast at register.proxypush.com/gcp. A secure control number that will allow you to participate in the meeting electronically can be found on the enclosed proxy card. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

Q: Who is entitled to vote at the special meeting?

A: To be able to vote on the matters presented at the special meeting, you must have been a stockholder of record at the close of business on January 14, 2022 (the “Record Date”). The aggregate number of shares entitled to vote at this meeting is 73,935,805 shares of GCP common stock, which is the number of shares that were outstanding as of the Record Date.

Q: How many votes do I have?

A: Each share of GCP common stock that you owned as of the close of business on the Record Date entitles you to one vote on each matter that is voted on at the special meeting.

Q: May I attend the special meeting and vote in person?

A: Yes. All stockholders of record as of the Record Date may attend the special meeting and vote online, by mail or by phone. To register for the virtual meeting along with voting your shares, visit

 

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register.proxypush.com/gcp. You will then be required to enter your control number which is included with the proxy materials. After registering, you will receive a confirmation email and an email approximately one hour prior to the start of the special meeting to the email address you provided during registration with a unique link to the virtual meeting. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

Whether or not you plan to attend the special meeting in person, we encourage you to complete, sign, date and return the enclosed proxy to ensure that your shares of GCP common stock will be represented at the special meeting. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.

If you are a beneficial owner and hold your shares of GCP common stock in “street name” through a broker, bank or nominee, you should instruct your broker, bank or nominee on how you wish to vote your shares of GCP common stock using the instructions provided by your broker, bank or nominee. Your broker, bank or nominee cannot vote on any of the proposals, including the Merger Proposal (as described below), without your instructions. If you hold your shares of GCP common stock in “street name,” because you are not the stockholder of record, you may not vote your shares of GCP common stock in person at the special meeting unless you request and obtain a valid legal proxy in your name from your broker, bank or nominee.

Q: What am I being asked to vote on at the special meeting?

A: You are being asked to consider and vote on the following proposals:

 

●

to adopt the Merger Agreement (“Merger Proposal”);

 

●

to approve the adjournment of the special meeting to a later date or dates if necessary to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting (the “Adjournment Proposal”); and

 

●

to approve, on a non-binding, advisory basis, certain compensation that will or may become payable to our named executive officers in connection with the Merger (the “Compensation Proposal”).

Q: What is the proposed Merger and what effects will it have on GCP?

A: The proposed Merger is the acquisition of GCP by Parent pursuant to the Merger Agreement. If the Merger Proposal is approved by the holders of GCP common stock and the other closing conditions under the Merger Agreement are satisfied or waived, Merger Sub will merge with and into GCP, with GCP continuing as the Surviving Corporation. As a result of the Merger, GCP will become a wholly-owned subsidiary of Parent. GCP will cooperate with Parent to de-list GCP common stock from the NYSE and de-register under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as promptly as practicable following the Effective Time and, at such time, GCP will no longer be a publicly traded company and will no longer be required to file periodic reports with the Securities and Exchange Commission (the “SEC”). If the Merger is consummated, you will not own any shares of the capital stock of the Surviving Corporation.

Q: What will I receive if the Merger is completed?

A: Upon completion of the Merger, you will be entitled to receive $32.00 in cash, without interest and less any applicable withholding taxes (the “Merger Consideration”), for each share of GCP common stock that you own, unless you are entitled to and have properly demanded appraisal rights and have complied in all respects with Section 262 of the Delaware General Corporation Law (“DGCL”) with respect to such shares. For example, if you own 100 shares of GCP common stock, you will be entitled to receive $3,200 in cash in exchange for such shares, without interest and less any applicable withholding taxes. In either case, as a result of the Merger, your shares will be cancelled and you will not own shares in GCP or the Surviving Corporation, which will be a wholly-owned subsidiary of Parent following the Merger.

 

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Q: How does the Merger Consideration compare to the market price of GCP common stock prior to the public announcement of the Merger Agreement?

A: The Merger Consideration represents a premium of approximately 37% over the closing price of GCP common stock on November 30, 2021, the last trading day before a media report was published speculating about a potential sale process, and a premium of 39% over the 30-day volume-weighted average on the same date.

Q: What do I need to do now? If I am going to attend the special meeting, should I still submit a proxy?

A: We encourage you to read this proxy statement, its appendices, including the Merger Agreement, and the documents incorporated by reference herein, carefully and in their entirety and consider how the Merger affects you. Whether or not you expect to attend the special meeting in person, we encourage you to complete, sign, date and return, as promptly as possible, the enclosed proxy card so that your shares of GCP common stock may be represented and can be voted at the special meeting. If you hold your shares of GCP common stock in “street name,” please refer to the voting instruction forms provided by your broker, bank or nominee to vote such shares.

Q: Should I send in my stock certificates now?

A: No. If the Merger Proposal is approved, shortly after the Merger is completed, under the terms of the Merger Agreement, you will receive a letter of transmittal containing instructions for how to send your stock certificates to the paying agent in order to receive the cash payment of the Merger Consideration for each share of GCP common stock represented by the stock certificate or book-entry shares. You should use the letter of transmittal to exchange your stock certificates or book-entry shares for the cash payment to which you are entitled upon completion of the Merger. If your shares of GCP common stock are held in “street name” through a bank, broker or nominee, you will receive instructions from your bank, broker or nominee as to how to effect the surrender of your “street name” shares of GCP common stock in exchange for the Merger Consideration. Please do not send in your stock certificates now.

Q: What happens if I sell or otherwise transfer my shares of GCP common stock after the Record Date but before the special meeting? What happens if I sell or otherwise transfer my shares of GCP common stock after the special meeting but before the Effective Time?

A: The Record Date for the special meeting is earlier than the date of the special meeting and earlier than the date the Merger is expected to be completed. If you sell or transfer your shares of GCP common stock after the Record Date but before the special meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you sell or transfer your shares and each of you notifies GCP in writing of such special arrangements, you will retain your right to vote such shares at the special meeting, but will transfer the right to receive the Merger Consideration if the Merger is completed to the person to whom you sell or transfer such shares.

If you sell or transfer your shares of GCP common stock after the special meeting, but before the Effective Time, you will transfer the right to receive the Merger Consideration if the Merger is completed. In order to receive the Merger Consideration, you must hold your shares of GCP common stock through the completion of the Merger.

The right to seek appraisal of GCP common stock in connection with the Merger under Section 262 of the DGCL is only available to GCP stockholders who, among other requirements set forth in Section 262 of the DGCL, hold their stock as of the date of making a demand for appraisal and hold their shares continuously through the effective date of the Merger. Accordingly, if you sell or transfer your shares of GCP common stock after the special meeting, but before the effective date of the Merger, you will lose the right to seek appraisal of those shares under Section 262 of the DGCL.

 

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Even if you sell or otherwise transfer your shares of GCP common stock after the Record Date, we encourage you to sign, date and return the enclosed proxy or, if your shares are held in “street name” through a broker, bank or nominee, instruct your broker, bank or nominee on how to vote your shares using the voting instruction form furnished by your broker, bank or nominee.

Q: What is the position of GCP’s Board of Directors regarding the Merger?

A: After consulting with its financial advisor and outside legal counsel and after reviewing and considering the terms and conditions of the Merger and the factors more fully described in the enclosed proxy statement, the Board unanimously (i) approved, adopted and declared advisable the Merger Agreement, the Voting Agreements and the consummation of the transactions contemplated thereby, including the Merger; (ii) determined that the transactions contemplated by the Merger Agreement, including the Merger, and the Voting Agreements are advisable, fair to, and in the best interests of, GCP and its stockholders; (iii) directed that the Merger Agreement be submitted to the stockholders of GCP for its adoption at the special meeting; and (iv) recommended that GCP’s stockholders adopt the Merger Agreement.

The Board recommends that you vote: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

Q: What happens if the Merger is not completed?

A: If the Merger Agreement is not adopted by the stockholders of GCP or if the Merger is not consummated for any other reason, you will not receive any payment for your shares of common stock. Instead, we will remain a public company, GCP common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and we will continue to be obligated to file periodic reports with the SEC.

Under specified circumstances, we may be required to pay Parent a termination fee upon the termination of the Merger Agreement, as described in “The Merger Agreement—Termination Fee” on page 104 of this proxy statement.

Q: Do any of GCP’s directors or officers have interests in the Merger that may differ from those of GCP stockholders generally?

A: In considering the recommendation of the Board that you vote “FOR” the Merger Proposal, you should be aware that certain of our directors and executive officers may have interests in the Merger that may be different from, or in addition to, your interests as a stockholder. The Board was aware of these interests in approving the Merger Agreement and the Merger and in recommending that the Merger Agreement be adopted by the stockholders of GCP. For a description of these interests, see “The Merger—Interests of the Directors and Executive Officers of GCP in the Merger” on page 60 of this proxy statement.

Q: Have any stockholders agreed to vote for the Merger Proposal?

A: Our directors and executive officers have informed us that they currently intend to vote all of their shares of GCP common stock “FOR” the Merger Proposal. In addition, Starboard and Standard have agreed to vote “FOR” for the Merger Proposal.

Q: What vote is required to adopt the Merger Agreement?

A: The affirmative vote of the holders of a majority of the shares of GCP common stock outstanding as of the Record Date and entitled to vote on the matter is required to approve the Merger Proposal.

 

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The failure of any stockholder of record to submit a signed proxy card or to vote in person by ballot at the special meeting will have the same effect as a vote “AGAINST” the Merger Proposal. Broker non-votes (if any) and abstentions will also have the same effect as a vote “AGAINST” the Merger Proposal. Properly executed proxies that do not contain voting instructions will be voted “FOR” the Merger Proposal.

As of the Record Date (January 14, 2022), there were 73,935,805 shares of GCP common stock issued and outstanding. Each holder of GCP common stock is entitled to one vote per share of GCP common stock owned by such holder as of the Record Date.

Q: What vote is required to approve the Adjournment Proposal and the Compensation Proposal?

A: Approval of the Adjournment Proposal requires the affirmative vote of the holders of shares of GCP common stock having a majority of the shares of GCP common stock present or represented, in person or by proxy, at the special meeting entitled to vote on such matter.

Approval of the Compensation Proposal requires the affirmative vote of the holders of shares of GCP common stock having a majority of the shares of GCP common stock present or represented, in person or by proxy, at the special meeting and entitled to vote on such matter.

Assuming a quorum is present, the failure of any stockholder of record to submit a signed proxy card or to vote in person by ballot at the special meeting, as well as broker non-votes, if any, will not have any effect on the Adjournment Proposal or the Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal and the Compensation Proposal.

Q: What is “Merger-related compensation”?

A: “Merger-related compensation” is certain compensation that is tied to or based on the completion of the Merger and may be payable to GCP’s named executive officers under its existing plans or agreements, which is the subject of the Compensation Proposal. See “Proposal 3: Advisory Vote on Merger-Related Named Executive Officer Compensation” on page 112 of this proxy statement.

Q: Why am I being asked to cast a non-binding, advisory vote to approve “Merger-related compensation” payable to GCP’s named executive officers under its plans or agreements?

A: In accordance with the rules promulgated under Section 14A of the Exchange Act, we are providing you with the opportunity to cast a non-binding, advisory vote on the compensation that may be payable to our named executive officers in connection with the Merger.

Q: What will happen if the stockholders do not approve the Compensation Proposal at the special meeting?

A: Approval of the Compensation Proposal is not a condition to the completion of the Merger. The vote with respect to the Compensation Proposal is on an advisory basis and will not be binding on GCP or Parent. Further, the underlying compensation plans and agreements are contractual in nature and are not, by their terms, subject to stockholder approval. Accordingly, payment of the “Merger-related compensation” is not contingent on stockholder approval of the Compensation Proposal.

Q: What is a quorum?

A: In order for business to be conducted at the special meeting, our by-laws require that a quorum must be present. A quorum consists of the holders of a majority of the shares of the GCP common stock outstanding and entitled to vote generally in the election of directors represented in person or by proxy.

 

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Shares of our common stock present in person or represented by proxy (including shares that reflect abstentions) will be counted for the purpose of determining whether a quorum exists.

Whether or not a quorum is present, the special meeting may be adjourned by the chairman of the meeting or a majority of the shares so represented at the special meeting until a quorum is obtained.

Q: How do I vote?

A: Stockholder of record: Shares registered in your name: If you are a stockholder of record (that is, your shares are registered in your own name, not in “street name” by a bank, brokerage firm or other intermediary).

 

●

You may submit a proxy via the Internet. To submit a proxy via the Internet, log on to the website listed on the proxy card and follow the on-screen instructions, using the Company Number and Account Number shown on your proxy card when prompted. We permit Internet proxies to allow you to submit a proxy to vote your shares on-line, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. You must submit your Internet proxy before the special meeting, for your proxy to vote your shares to be counted at the special meeting. Please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

 

●

You may submit a proxy by mail. If you received our proxy materials by mail, you may complete, date and sign the proxy card that accompanies our proxy statement and promptly return it in the postage-paid envelope provided so that it is received prior to the special meeting. You do not need to put a stamp on the enclosed envelope if you mail it from within the United States. The persons named in the proxy card will vote the shares you own in accordance with your instructions on the proxy card you mail. If you return the proxy card, but do not give any instructions on a particular matter to be voted on at the special meeting, the persons named in the proxy card will vote the shares you own in accordance with the recommendations of our Board. Our Board recommends that you vote FOR the Merger Proposal, FOR the Adjournment Proposal and FOR the Compensation Proposal. GCP must receive your proxy card no later than March 7, 2022, the day before the special meeting, for your proxy to vote your shares to be counted at the special meeting.

 

●

You may submit a proxy by phone. You may vote toll-free by telephone by calling 1-866-883-3382 in the U.S., U.S. territories and Canada on a touch tone telephone and following the instructions provided on the telephone line. Telephone voting is available 24 hours a day, seven days a week. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been recorded properly. If you vote by telephone, you do not need to return a proxy card. Please see the Notice for telephone voting instructions.

Beneficial owner: Shares held in “street name.” If the shares you own are held in “street name” by a bank, brokerage firm or other intermediary, then your bank, brokerage firm or other intermediary, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the voting instructions your bank, brokerage firm or other intermediary provides you. Many banks, brokerage firms and other intermediaries also offer the option of submitting voting instructions over the Internet or by telephone, instructions for which would be provided to you by your bank, brokerage firm or other intermediary.

If you wish to attend the special meeting to personally vote your shares held in “street name,” you will need to obtain a legal proxy from the holder of record (i.e. your bank, brokerage firm or other intermediary); a legal proxy is not the form of proxy card enclosed with this proxy statement.

Q: If my broker, bank or nominee holds my shares in “street name,” will my broker, bank or nominee vote my shares for me?

A: Not without your direction. Your broker, bank or nominee will only be permitted to vote your shares on any proposal at the special meeting if you instruct your broker, bank or nominee on how to vote. Under

 

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applicable stock exchange rules, brokers, banks or nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or nominee on how to vote your shares with respect to such matters. The proposals in this proxy statement are non-routine matters, and brokers, banks and nominees therefore cannot vote on these proposals without your instructions. Therefore, it is important that you instruct your broker, bank or nominee on how you wish to vote your shares of GCP common stock.

You should follow the procedures provided by your broker, bank or nominee regarding the voting of your shares of GCP common stock. Generally, if a broker exercises its discretion on routine matters at a stockholder meeting, a stockholder’s shares will be voted on the routine matter in the manner directed by the broker, but will constitute a “broker non-vote” on all of the non-routine matters to be presented at the stockholder meeting. Because all of the proposals to be voted on at the special meeting are non-routine matters, if you hold your shares in street name through a brokerage account, your broker will not be able to exercise its discretion to vote uninstructed shares on any of the proposals presented at the special meeting. As a result, we do not expect any broker non-votes at the special meeting. Broker non-votes, if any, will have the same effect as a vote “AGAINST” the Merger Proposal. Assuming a quorum is present, broker non-votes, if any, will have no effect on the outcome of any vote on the Adjournment Proposal or the Compensation Proposal.

Q: May I revoke my proxy after I have mailed my signed proxy card or otherwise submitted my vote by proxy?

A: Yes. If you are a stockholder of record, you may revoke your earlier proxy and/or change your vote at any time before the special meeting by taking one of the following actions (only your latest-dated proxy that received prior to the special meeting will be counted):

 

●

completing, signing, dating and mailing another proxy card with a later date before 11:59 p.m., Eastern Time, the day before the special meeting;

 

●

submitting a proxy again via the Internet or telephone;

 

●

giving written notice that you want to revoke your proxy at the following address: GCP Applied Technologies Inc., 2325 Lakeview Parkway, Alpharetta, Georgia 30009, Attention: Vice President, General Counsel and Secretary; or

 

●

attending the special meeting and voting in person. Your attendance at the meeting alone will not revoke your proxy; you must vote again or specifically request that your prior proxy be revoked.

If you own shares in “street name,” your bank, brokerage firm or other intermediary should provide you with appropriate instructions for changing or revoking your voting instructions.

Q: If a stockholder submits a proxy, how are the shares voted?

A: Regardless of the method you choose to submit your proxy, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing the proxy card, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

If you sign and properly return your proxy card, but do not include instructions on how to vote, your shares of GCP common stock will be voted as recommended by the Board with respect to each proposal. It is not currently anticipated that any other proposals for consideration will be presented at the special meeting. If other proposals requiring a vote of stockholders are brought before the special meeting in a proper manner, the persons named in the enclosed proxy card, if properly authorized, will have discretion to vote the shares they represent in accordance with their best judgment.

Q: What should I do if I receive more than one set of voting materials?

A: You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares of GCP

 

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common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares of GCP common stock are registered in more than one name, you will receive more than one proxy card. Please complete, date, sign and return each proxy card and voting instruction card that you receive. Each proxy card you receive comes with its own prepaid return envelope; if you submit a proxy by mail, make sure you return each proxy card in the return envelope that accompanies that proxy card.

Q: Who will count the votes?

A: The votes will be counted by the independent inspector of election appointed for the special meeting.

Q: Where can I find the voting results of the special meeting?

A: GCP intends to announce preliminary voting results at the special meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the special meeting. All reports that GCP files with the SEC are publicly available when filed. See “Where You Can Find More Information” on page 119 of this proxy statement.

Q: Will I be subject to U.S. federal income tax upon the exchange of shares of GCP common stock for cash pursuant to the Merger?

A: If you are a U.S. holder (as defined in “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” on page 76 of this proxy statement), the exchange of your shares of GCP common stock for cash (including any cash required to be withheld for tax purposes) pursuant to the Merger will generally require you to recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash you receive pursuant to the Merger (including any cash required to be withheld for tax purposes) and your adjusted tax basis in such surrendered shares. If you are a non-U.S. holder (as defined in “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” on page 77 of this proxy statement) you will generally not be subject to U.S. federal income tax with respect to the exchange of your shares of GCP common stock for cash in the Merger unless (1) you have certain connections to the United States or (2) GCP is, or was during the relevant period, a U.S. real property holding corporation. Because particular circumstances may differ, we recommend that you consult your own tax advisor to determine the U.S. federal income tax consequences to you of the Merger in light of your own particular circumstances and any consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction. A more complete description of the material U.S. federal income tax consequences of the Merger is provided in “The Merger—Material U.S. Federal Income Tax Consequences of the Merger” on page 75 of this proxy statement.

Q: What will the holders of GCP stock options, restricted stock and restricted stock units receive in the Merger?

A: At the Effective Time, each Company Option, whether vested or unvested, that is outstanding immediately prior to the Effective Time will, automatically without any required action on the part of the holder thereof or the Company, be cancelled and entitle the holder thereof to receive (without interest) an amount in cash equal to the product of (x) the total number of shares of GCP common stock subject to the Company Option, multiplied by (y) the excess, if any, of the Merger Consideration over the per-share exercise price of such Company Option; provided, that any Company Option with respect to which the exercise price subject thereto is equal to or greater than the Merger Consideration shall be cancelled for no consideration.

At the Effective Time, each outstanding award of Company Restricted Stock and each outstanding award of Company RSUs, that in each case at such time is vested (including Company RSUs under the Company’s Non-Employee Directors’ Deferred Compensation Program) or subject solely to service-based vesting conditions will become fully vested and will, automatically without any required action on the part of the holder or the

 

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Company, be cancelled and be converted into the right to receive (without interest) an amount in cash equal to (x) the total number of Shares underlying such award of Company Restricted Stock or Company RSUs, as applicable, multiplied by (y) the Merger Consideration.

At the Effective Time, each outstanding award of Company PBUs that is subject to performance-based vesting conditions will become vested as to the greater of the number of Shares subject to such Company PBUs that would vest based on (1) the target level of achievement and (2) the Company’s actual level of achievement of the performance goals set forth in the applicable award agreement as of the Effective Time, as determined by the Board or its Compensation Committee prior to the closing of the Merger, and will, after giving effect to such vesting, automatically and without any required action on the part of the holder or the Company, be cancelled and be converted into the right to receive (without interest) an amount in cash equal to (x) the number of vested Shares underlying such Company PBUs, multiplied by (y) the Merger Consideration. Any outstanding Company PBUs (or portion thereof) that are not vested as of immediately prior to the Effective Time shall be canceled for no consideration.

Q: When do you expect the Merger to be completed?

A: We are working towards completing the Merger as quickly as possible and currently expect to complete the Merger in the second half of 2022. However, the exact timing of completion of the Merger cannot be predicted because the Merger is subject to conditions, including adoption of the Merger Agreement by the stockholders of GCP and the receipt of regulatory approvals.

Q: Am I entitled to appraisal rights under the DGCL?

A: Yes. As a holder of GCP common stock, you are entitled to exercise appraisal rights under the DGCL in connection with the Merger if you take certain actions and meet certain conditions. See “The Merger—Appraisal Rights” on page 69 of this proxy statement.

Q: What is householding and how does it affect me?

A: Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our proxy statement may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either document to you if our Investor Relations Department receives a call or written request from you at the address, telephone number or email address indicated below.

 

		GCP Applied Technologies Inc. 2325 Lakeview Parkway Alpharetta, Georgia 30009 Attention: Investor Relations Email: investors@gcpat.com

Q: Who can help answer my questions?

A: The information provided above in the Q&A format is for your convenience only and is merely a summary of some of the information in this proxy statement. We encourage you to read this proxy statement, its appendices, including the Merger Agreement, and the documents incorporated by reference herein, carefully and in their entirety and consider how the Merger affects you. If you have any questions concerning the Merger, the special meeting or this proxy statement, would like additional copies of this proxy statement or need help voting your shares of common stock, please contact Okapi Partners LLC (“Okapi”), our proxy solicitor, toll-free at (888) 785-6707. You may also wish to consult your legal, tax and/or financial advisors with respect to any aspect of the Merger, the Merger Agreement or other matters discussed in this proxy statement.

 

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THE SPECIAL MEETING

The enclosed proxy is solicited on behalf of the Board for use at the special meeting of stockholders or at any adjournments or postponements thereof.

Date, Time and Place

We will hold the special meeting on March 8, 2022, at 10:00 a.m. Eastern Time, unless the special meeting is postponed or adjourned. Due to the impact of the COVID-19 pandemic and to support the health and well-being of our stockholders, employees and their families, the special meeting will be held in a virtual meeting format only, through a live webcast at register.proxypush.com/gcp. You will be able to vote and submit questions and access the list of stockholders entitled to vote at the special meeting by visiting register.proxypush.com/gcp and participating live in the webcast. A secure control number that will allow you to participate in the meeting electronically can be found on the enclosed proxy card. For purposes of attendance at the special meeting, all references in this proxy statement to “present in person” or “in person” shall mean virtually present at the special meeting.

Purpose of the Special Meeting

At the special meeting, we will ask our stockholders of record as of the Record Date to consider and vote on the following proposals:

 

(i)

to adopt the Merger Agreement;

 

(ii)

to approve the adjournment of the special meeting to a later date or dates if necessary to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement at the time of the special meeting; and

 

(iii)

to approve, on a non-binding, advisory basis, certain compensation that will or may become payable to our named executive officers in connection with the Merger.

Record Date; Shares Entitled to Vote; Quorum

Only stockholders of record as of the close of business on the Record Date (January 14, 2022) are entitled to notice of the special meeting and to vote at the special meeting or at any adjournments or postponements thereof. Each holder of record of GCP common stock on the Record Date will be entitled to one vote for each share of GCP common stock held as of the Record Date on each matter submitted to our stockholders for approval at the special meeting. If you sell or transfer your shares of GCP common stock after the Record Date but before the special meeting, you will transfer the right to receive the Merger Consideration, if the Merger is completed, to the person to whom you sell or transfer your shares of GCP common stock, but you will retain your right to vote those shares at the special meeting.

As of the Record Date, there were 73,935,805 shares of GCP common stock outstanding and entitled to be voted at the special meeting.

A quorum of stockholders is necessary to hold a special meeting. The holders of a majority of the shares of GCP common stock entitled to vote at the special meeting, present in person or represented by proxy, will constitute a quorum at the special meeting. As a result, 36,967,903 shares must be represented by proxy or by stockholders present and entitled to vote at the special meeting to have a quorum. Shares that abstain on one or more of the proposals before the special meeting will be deemed to be present for quorum purposes. If you hold your shares in “street name” and you fail to provide your broker, bank or nominee with instructions how to vote such shares on any of the proposals before the special meeting, your shares will not be deemed to be present at the special meeting for quorum purposes. If you provide your broker, bank or nominee with instructions how to vote on one or more but not all of the proposals before the special meeting, your shares will be deemed to be present at the special meeting for quorum purposes.

 

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In the event that a quorum is not present at the special meeting, it is expected that the special meeting would be adjourned to a later date until a quorum is present. The special meeting may be adjourned by the chairman of the meeting or a majority of the shares represented in person or by proxy at the special meeting, whether or not there is a quorum, and the special meeting may be postponed or cancelled by the Board in its discretion.

Vote Required; Abstentions and Broker Non-Votes

The affirmative vote of the holders of a majority of the shares of GCP common stock outstanding as of the Record Date and entitled to vote on the matter is required to approve the Merger Proposal. Adoption of the Merger Agreement by our stockholders is a condition to the closing of the Merger. A failure to vote your shares of GCP common stock, an abstention from voting or a broker non-vote (if any) will have the same effect as a vote “AGAINST” the Merger Proposal.

Approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of GCP common stock present, in person or by proxy, at the special meeting and entitled to vote on the matter.

Approval of the Compensation Proposal requires the affirmative vote of the holders of a majority of the shares of GCP common stock present, in person or by proxy, at the special meeting and entitled to vote on the matter. Assuming a quorum is present, the failure of any stockholder of record to submit a signed proxy card or to vote in person by ballot at the special meeting, as well as broker non-votes, if any, will not have any effect on the Adjournment Proposal or the Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal and the Compensation Proposal.

Stock Ownership and Interests of Certain Persons

As of the Record Date, our directors and executive officers beneficially owned and were entitled to vote an aggregate of 419,806 shares of GCP common stock (excluding any shares that would be delivered upon exercise or conversion, as applicable, of GCP stock options or GCP restricted stock units and excluding shares beneficially owned by Starboard), representing approximately 0.6% of the outstanding shares of GCP common stock. Our directors and executive officers have informed us that they currently intend to vote all of their shares of GCP common stock: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

As of the Record Date, Starboard and certain affiliates of Standard beneficially owned and are entitled to vote an aggregate of 6,540,000 and 17,778,352 shares of GCP common stock, respectively, representing approximately 8.8% and 24.0% of the outstanding shares of GCP common stock, respectively. Per the Voting Agreements entered into between Starboard and Standard, respectively and Parent, Merger Sub and the persons named therein, Starboard and Standard have agreed to vote: (i) “FOR” the Merger Proposal; and (ii) “FOR” the Adjournment Proposal.

Voting of Proxies

If your shares of GCP common stock are registered in your name with our transfer agent, EQ Shareowner Services, you may cause your shares to be voted at the special meeting by submitting your proxy or by voting in person at the special meeting. Based on your proxy cards, the proxy holders will vote your shares of GCP common stock according to your directions.

If you plan to attend the special meeting and wish to vote virtually, you will need to provide the secure control number provided in your proxy card voting instruction form, or in the email sending you the proxy statement. If you attend the special meeting, and vote virtually, your vote will revoke any proxy previously submitted. If your shares are registered in your name, you are encouraged to vote by proxy even if you plan to attend the special meeting virtually.

 

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Voting instructions are included on your proxy card. All shares of GCP common stock represented by properly executed proxies received in time for the special meeting will be voted at the special meeting in accordance with the instructions of the stockholder. Properly executed proxies that do not contain voting instructions will be voted (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

If your shares of GCP common stock are held in “street name” through a broker, bank or nominee, you may provide voting instructions through your broker, bank or nominee by completing and returning the voting form provided by your broker, bank or nominee, or over the Internet or by telephone through your broker, bank or nominee if such a service is provided. To provide voting instructions over the Internet or by telephone through your broker, bank or nominee, you should follow the instructions on the voting form provided by your broker, bank or nominee. Under applicable stock exchange rules, brokers, banks or nominees have the discretion to vote your shares on routine matters if you fail to instruct your broker, bank or nominee on how to vote your shares with respect to such matters. The proposals in this proxy statement are non-routine matters, and brokers, banks and nominees therefore cannot vote on these proposals without your instructions. Generally, if a broker exercises its discretion on routine matters at a stockholder meeting, a stockholder’s shares will be voted on the routine matter in the manner directed by the broker, but will constitute a “broker non-vote” on all of the non-routine matters to be presented at the stockholder meeting. Because all of the proposals to be voted on at the special meeting are non-routine matters, if you hold your shares in street name through a brokerage account, your broker will not be able to exercise its discretion to vote uninstructed shares on any of the proposals presented at the special meeting. As a result, we do not expect any broker non-votes at the special meeting. If you do not return your broker’s, bank’s or nominee’s voting form, do not provide voting instructions over the Internet or by telephone through your broker, bank or other nominee, if applicable, or do not attend the special meeting and vote in person with a proxy from your broker, bank or nominee, such actions will have the same effect as if you voted “AGAINST” the Merger Proposal, but assuming a quorum is present, will have no effect on the outcome of any vote on the Adjournment Proposal or the Compensation Proposal.

Revocability of Proxies

If you are a stockholder of record, you may revoke your proxy at any time before it is voted at the special meeting by:

 

●

By voting again by Internet or telephone as instructed on your proxy card before the special meeting;

 

●

Delivering a written notice of revocation to GCP Applied Technologies Inc., 2325 Lakeview Parkway, Alpharetta, Georgia 30009, Attention: Vice President, General Counsel and Secretary, specifying such revocation;

 

●

Signing another proxy card with a later date and returning it to us before 11:59 p.m., Eastern Time, the day before the special meeting; or

 

●

Attending the special meeting and voting in person. Your attendance at the meeting alone will not revoke your proxy; you must vote again or specifically request that your prior proxy be revoked.

Please note that to be effective, your new proxy card must be received by our Vice President, General Counsel and Secretary by 11:59 p.m., Eastern Time, the day before the special meeting, unless you vote again by Internet or telephone as instructed on your proxy card before the special meeting. If you have submitted a proxy and you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted.

If you hold your shares of GCP common stock in “street name,” you should contact your broker, bank or nominee for instructions regarding how to revoke your proxy. You may also vote in person at the special meeting if you obtain a valid legal proxy from your broker, bank or nominee. Any adjournment of the special meeting for the purpose of soliciting additional proxies will allow stockholders of GCP who have already sent in their proxies to

 

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revoke them at any time prior to their use at the special meeting, as adjourned, however any such proxies that are not revoked will be voted at any such special meeting, as adjourned. Additionally, if the special meeting is postponed, any proxies that are not revoked prior to their use at the special meeting, as postponed, will be voted at any such special meeting, as postponed.

Board of Directors’ Recommendation

The Board, after considering various factors described in “The Merger—Recommendation of Our Board of Directors and Reasons for the Merger” on page 47 of this proxy statement, unanimously (i) approved, adopted and declared advisable the Merger Agreement, the Voting Agreements and the consummation of the transactions contemplated thereby, including the Merger; (ii) determined that the transactions contemplated by the Merger Agreement, including the Merger, and the Voting Agreements are advisable, fair to, and in the best interests of, GCP and its stockholders; (iii) directed that the Merger Agreement be submitted to the stockholders of GCP for its adoption at the special meeting; and (iv) recommended that GCP’s stockholders adopt the Merger Agreement.

The Board recommends that you vote: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

Expenses of Proxy Solicitation

This proxy statement is being furnished in connection with the solicitation of proxies by the Board. Expenses incurred in connection with the printing and mailing of this proxy statement and in connection with notices or other filings with any governmental entities under any laws are our responsibility. We have engaged the services of Okapi to solicit proxies for the special meeting. In connection with its retention, Okapi has agreed to provide consulting, analytic and proxy solicitation services in connection with the special meeting. We have agreed to pay Okapi a fee of approximately $21,000, plus reasonable out-of-pocket expenses for its services, and we will indemnify Okapi for certain losses arising out of its proxy solicitation services. Copies of solicitation materials will also be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of GCP common stock in their names that are beneficially owned by others to forward to those beneficial owners. We may reimburse persons representing beneficial owners of GCP common stock for their costs of forwarding solicitation materials to the beneficial owners. In addition to the solicitation of proxies by mail, proxies may be solicited by our directors, officers and employees, or representatives of Okapi, in person or by telephone, email, fax or other means of communication and we may pay persons holding shares for others their expenses for sending proxy materials to their principals. No additional compensation will be paid to our directors, officers or employees for their services in connection with the solicitation of proxies.

Anticipated Date of Completion of the Merger

Assuming timely satisfaction of necessary closing conditions, including the approval of the Merger Proposal by our stockholders, we anticipate that the Merger will be consummated in the second half of 2022.

Other Matters

At this time, we know of no other matters to be submitted at the special meeting.

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting

The proxy statement is available in the “Investors” section of our website www.gcpat.com. Our website address is provided as an inactive textual reference only.

Householding of Special Meeting Materials

The SEC permits companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single proxy

 

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statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies. Stockholders who hold their shares through a nominee, such as a broker, bank, broker-dealer or similar organization may receive notice from that nominee regarding the householding of proxy materials. As indicated in the notice, a single proxy statement will be delivered to multiple stockholders sharing an address unless contrary instructions have been received from an affected stockholder. Once a stockholder has received notice that a nominee will be householding, such householding will continue until the stockholder is notified otherwise or until the stockholder has revoked consent by notifying the nominee. If you hold your shares in “street name” and would prefer to receive separate copies of a proxy statement for other stockholders in your household, either now or in the future, please contact your nominee. If you are record holder of your shares and would prefer to receive separate copies of a proxy statement for other stockholders in your household, either now or in the future, please contact: GCP Applied Technologies Inc., 2325 Lakeview Parkway, Alpharetta, Georgia 30009, Attention: Investor Relations, investors@gcpat.com. Stockholders who currently receive multiple copies of the proxy statement at their addresses and would like to request “householding” of their communications should contact their broker or GCP, as applicable.

Rights of Stockholders Who Assert Appraisal Rights

Record holders of shares of common stock who have not voted in favor of the Merger, have properly demanded appraisal rights for such shares in accordance with Section 262 of the DGCL and have complied in all respects with Section 262 of the DGCL with respect to such shares (“Dissenting Shares”) will be entitled to statutory appraisal rights pursuant to Section 262 of the DGCL in connection with the Merger. This means that such stockholders are entitled to seek appraisal of their Dissenting Shares and, if all requirements of Section 262 are met, to receive payment in cash for the “fair value” of such Dissenting Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be the fair value. The ultimate amount holders receive in an appraisal proceeding may be less than, equal to or more than the amount such holders would have received under the Merger Agreement. For a description of the rights of holders of Dissenting Shares and of the procedures to be followed in order to assert such rights and obtain payment of the fair value of such Dissenting Shares, see Section 262 of the DGCL, which is attached as Appendix B to this proxy statement, as well as the information set forth below.

IN ORDER TO PROPERLY EXERCISE YOUR APPRAISAL RIGHTS IN CONNECTION WITH THE MERGER, A RECORD HOLDER MUST DELIVER A WRITTEN DEMAND FOR APPRAISAL IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 262 OF THE DGCL TO GCP BEFORE THE VOTE IS TAKEN ON THE ADOPTION OF THE MERGER AGREEMENT AT THE SPECIAL MEETING, AND MUST NOT VOTE, IN PERSON OR BY PROXY, IN FAVOR OF THE MERGER PROPOSAL AND CONTINUE TO HOLD YOUR SHARES OF GCP COMMON STOCK OF RECORD FROM THE DATE OF MAKING THE DEMAND FOR APPRAISAL THROUGH THE EFFECTIVE TIME OF THE MERGER AND MUST COMPLY WITH THE OTHER REQUIREMENTS OF SECTION 262 OF THE DGCL. BECAUSE, UNDER DELAWARE LAW, ONLY A STOCKHOLDER OF RECORD CAN SUBMIT A DEMAND FOR APPRAISAL, A PERSON HAVING A BENEFICIAL INTEREST IN SHARES OF COMMON STOCK HELD OF RECORD IN THE NAME OF ANOTHER PERSON MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL AND IN A TIMELY MANNER TO EXERCISE APPRAISAL RIGHTS. MERELY VOTING AGAINST THE MERGER PROPOSAL WILL NOT PRESERVE YOUR RIGHT TO APPRAISAL UNDER SECTION 262 OF THE DGCL. BECAUSE A PROXY THAT IS SIGNED AND SUBMITTED BUT DOES NOT OTHERWISE CONTAIN VOTING INSTRUCTIONS WILL, UNLESS REVOKED, BE VOTED IN FAVOR OF THE ADOPTION OF THE MERGER AGREEMENT, IF YOU SUBMIT A PROXY AND WISH TO EXERCISE YOUR APPRAISAL RIGHTS, YOU MUST INCLUDE VOTING INSTRUCTIONS TO VOTE YOUR SHARES OF GCP COMMON STOCK AGAINST, OR ABSTAIN WITH RESPECT TO, THE ADOPTION OF THE MERGER AGREEMENT. NEITHER VOTING AGAINST THE ADOPTION OF THE MERGER

 

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AGREEMENT, NOR ABSTAINING FROM VOTING OR FAILING TO VOTE ON THE MERGER PROPOSAL, WILL IN AND OF ITSELF CONSTITUTE A WRITTEN DEMAND FOR APPRAISAL SATISFYING THE REQUIREMENTS OF SECTION 262 OF THE DGCL. THE WRITTEN DEMAND FOR APPRAISAL MUST BE IN ADDITION TO AND SEPARATE FROM ANY PROXY OR VOTE ON THE ADOPTION OF THE MERGER AGREEMENT. IF YOU HOLD YOUR SHARES OF GCP COMMON STOCK THROUGH A BANK, BROKERAGE FIRM OR NOMINEE AND YOU WISH TO EXERCISE APPRAISAL RIGHTS, YOU SHOULD CONSULT WITH YOUR BANK, BROKERAGE FIRM OR NOMINEE TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE MAKING OF A DEMAND FOR APPRAISAL BY SUCH BANK, BROKERAGE FIRM OR NOMINEE. IN VIEW OF THE COMPLEXITY OF THE DGCL, STOCKHOLDERS WHO MAY WISH TO PURSUE APPRAISAL RIGHTS SHOULD PROMPTLY CONSULT THEIR LEGAL AND FINANCIAL ADVISORS.

Questions and Additional Information

If you have more questions about the Merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact our proxy solicitor:

Okapi Partners LLC

(888) 785-6707

 

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents to which we refer you in this proxy statement, as well as information included in oral statements or other written statements made or to be made by us or on our behalf, may include “forward-looking” statements within the meaning of the U.S. securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, that do not directly or exclusively relate to historical facts, including, without limitation, statements relating to the completion of the Merger. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential” or other similar expressions, or the negative of these terms or comparable terminology. These statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation:

 

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GCP may be unable to obtain stockholder approval as required for the Merger;

 

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the conditions to the closing of the Merger may not be satisfied, including that required regulatory approvals may not be obtained;

 

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the Merger may involve unexpected costs, liabilities or delays, including the payment of a termination fee to Parent by GCP;

 

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the business of GCP may suffer as a result of uncertainty surrounding the Merger;

 

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the effect of the announcement or pendency of the Merger on our business relationships, including with customers and suppliers;

 

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the outcome of any legal proceedings related to the Merger;

 

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GCP may be adversely affected by other economic, business, legislative, regulatory and/or competitive factors;

 

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the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement;

 

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the attention of GCP’s management and employees may be diverted from ongoing business concerns as a result of the Merger;

 

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limitations placed on the GCP’s ability to operate its business under the Merger Agreement;

 

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risks that the Merger disrupts current plans and operations and the potential difficulties in employee retention as a result of the Merger;

 

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unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorist, outbreak of war or hostilities and epidemics and pandemics, including COVID-19, as well as management’s response to any of the aforementioned factors;

 

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the expected timing of completion of the Merger may be different from that anticipated by GCP; and

 

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other risks to consummation of the Merger, including the risk that the Merger will not be completed within the expected time period or at all.

The foregoing review of important factors that could cause actual results to differ from expectations should not be construed as exhaustive and should be read in conjunction with the information contained or incorporated by reference herein, including, but not limited to, (i) the information contained under this heading and (ii) the information contained under the headings “Risk Factors” and information in our consolidated financial statements and notes thereto included in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2020, the definitive proxy statement for our 2021 Annual Meeting of

 

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Stockholders and our recent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. See “Where You Can Find More Information” on page 119 of this proxy statement. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

Except as required by applicable law, we do not intend, and assume no obligation, to update any forward-looking statements. GCP stockholders are advised, however, to consult any future disclosures we make on related subjects as may be detailed in our other filings made from time to time with the SEC.

All information contained in this proxy statement exclusively concerning Saint-Gobain, Parent, Merger Sub and their affiliates has been supplied by Saint-Gobain, Parent and Merger Sub and has not been independently verified by us.

 

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THE MERGER

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached as Appendix A to, and incorporated by reference into, this proxy statement. You should read the Merger Agreement carefully and in its entirety as it is the legal document that governs the Merger.

Parties Involved in the Merger

GCP Applied Technologies Inc.

2325 Lakeview Parkway

Alpharetta, Georgia 30009

Telephone: (617) 876-1400

GCP Applied Technologies Inc., a Delaware corporation, is a leading global provider of construction products that include high-performance specialty construction chemicals and building materials. GCP partners with producers, contractors, designers and engineers to achieve performance and sustainability goals. GCP has a legacy of first to market and award-winning solutions that have been used to build some of the world’s most renowned structures. GCP is focused on continuous improvement for its customers, end-users and the environment.

Our common stock is listed on under the symbol “GCP” on the NYSE.

Our principal executive offices are located at 2325 Lakeview Parkway, Alpharetta, Georgia 30009, and our telephone number is (617) 876-1400. For more information about GCP, please visit our website, www.GCPAT.com. Our website address is provided as an inactive textual reference only. The information contained on our website is not incorporated into, and does not form a part of, this proxy statement or any other report or document on file with or furnished to the SEC. See “Where You Can Find More Information” on page 119 of this proxy statement.

Cyclades Parent, Inc.

c/o. Saint-Gobain Corporation

20 Moores Road

Malvern, PA 19355

Telephone: (610) 893-6000

Parent is a Delaware corporation that was formed on December 3, 2021, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, subject to the terms and conditions thereof. Parent is an indirect wholly owned subsidiary of Saint-Gobain.

Cyclades Merger Sub, Inc.

c/o. Saint-Gobain Corporation

20 Moores Road

Malvern, PA 19355

Telephone: (610) 893-6000

Merger Sub is a Delaware corporation that was formed on December 3, 2021, solely for the purpose of engaging in the transactions contemplated by the Merger Agreement, subject to the terms and conditions thereof. Merger Sub is a wholly owned subsidiary of Parent. Upon consummation of the Merger, Merger Sub will cease to exist, and GCP will survive the Merger as a wholly-owned subsidiary of Parent.

 

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Compagnie de Saint-Gobain S.A.

Tour Saint-Gobain

12 place de l’Iris

92096 La Défense Cedex

France

Telephone: (+33) 1 88 54 00 00

Compagnie de Saint-Gobain, S.A. is a société anonyme organized under the laws of France. A worldwide leader in light and sustainable construction, Saint-Gobain designs, manufactures and distributes materials and services for the construction and industrial markets. Its integrated solutions for the renovation of public and private buildings, light construction and the decarbonization of construction and industry are developed through a continuous innovation process and provide sustainability and performance. Saint-Gobain’s commitment is guided by its purpose, “MAKING THE WORLD A BETTER HOME.”

Saint-Gobain’s shares are publicly traded on the Euronext Paris stock exchange under the symbol “SGO” and ISIN code FR0000125007.

Saint-Gobain’s principal executive offices are located at Tour Saint-Gobain, 12 place de l’Iris, 92096 La Défense Cedex, France and its telephone number is (+33) 1 88 54 00 00. For more information about Saint-Gobain, please visit its website, https://www.saint-gobain.com/en. The information provided on Saint-Gobain’s website is not incorporated into, and does not form a part of, this proxy statement.

Saint-Gobain has entered into the Merger Agreement, solely for purposes of Section 8.13 (Guarantee) thereof.

Certain Effects of the Merger on GCP

Upon the terms and subject to the conditions of the Merger Agreement, at the Effective Time, Merger Sub will merge with and into GCP, with GCP continuing as the Surviving Corporation and as a wholly-owned subsidiary of Parent. GCP will cooperate with Parent to de-list GCP common stock from the NYSE and to de-register under the Exchange Act as soon as reasonably practicable following the Effective Time, and at such time, we will cease to be a publicly traded company and will no longer be obligated to file periodic reports with the SEC. If the Merger is completed, you will not own any shares of the capital stock of the Surviving Corporation, and instead will only be entitled to receive the Merger Consideration described in “—Merger Consideration” on page 34 of this proxy statement or, with respect to Dissenting Shares, will only be entitled to receive the “fair value” of your Dissenting Shares as determined by the Delaware Court of Chancery pursuant to an appraisal proceeding as contemplated by Delaware law.

The Effective Time will occur upon the filing of the certificate of merger with the Secretary of State of the State of Delaware (or at such later time as we and Parent may agree and specify in the certificate of merger).

Effect on GCP if the Merger is Not Completed

If the Merger Proposal is not approved by the stockholders of GCP or if the Merger is not completed for any other reason, you will not receive any payment for your shares of GCP common stock. Instead, we will remain a public company, GCP common stock will continue to be listed and traded on the NYSE and registered under the Exchange Act and we will be required to continue to file periodic reports with the SEC.

Furthermore, depending on the circumstances that would have caused the Merger not to be completed, it is possible that the price of GCP common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of GCP common stock would return to the price at which it trades as of the date of this proxy statement.

 

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Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of GCP common stock. If the Merger is not consummated, the Board will continue to evaluate and review our business operations, properties, dividend policy and capitalization, among other things, make such changes as are deemed appropriate and continue to seek to enhance stockholder value. If the Merger Proposal is not approved by the stockholders of GCP or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to the Board will be offered or that our business, prospects or results of operation will not be adversely impacted.

In addition, under specified circumstances, we may be required to pay Parent a termination fee upon the termination of the Merger Agreement, as described under “The Merger Agreement—Termination Fee” on page 104 of this proxy statement.

Merger Consideration

At the Effective Time, each outstanding share of GCP common stock (other than (i) shares held by GCP as treasury stock or held by Parent or Merger Sub or any wholly-owned subsidiary of GCP, Parent or Merger Sub and (ii) Dissenting Shares) will be converted automatically into the right to receive the Merger Consideration. All shares of GCP common stock converted into the right to receive the Merger Consideration will automatically be cancelled and cease to exist at the Effective Time, and each certificate formerly representing such shares will thereafter represent only the right to receive the Merger Consideration.

After the completion of the Merger, under the terms of the Merger Agreement, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a GCP stockholder (except that stockholders who hold Dissenting Shares will not have the right to receive the Merger Consideration but will instead have the right to receive a payment for the “fair value” of their Dissenting Shares as determined by the Delaware Court of Chancery pursuant to an appraisal proceeding as contemplated by Delaware law, as described in “The Merger—Appraisal Rights” on page 69 of this proxy statement).

Following completion of the Merger, GCP will cease to be a publicly traded company and will become a wholly-owned subsidiary of Parent.

Background of the Merger

In the ordinary course, our Board and management team regularly review and assess our results of operations, financial position, business strategy and growth opportunities, as well as the trends and conditions affecting our industries and business generally. Such assessments include periodic meetings or consultations with third-party advisors, as well as consideration of potential strategic and financial alternatives to maximize stockholder value, such as business combinations, acquisitions and financing transactions. Our Board and management team periodically discuss the Company’s business strategy and potential strategic and financial alternatives to maximize stockholder value.

In February 2019, our Board commenced a process to evaluate strategic alternatives for the Company, including a potential sale or other business combination. In connection with this process, the Company, working with its financial advisor at the time, contacted 36 strategic parties, including Saint-Gobain and a strategic party referred to as “Party A”, and 12 private equity sponsors, including a private equity sponsor referred to as “Party B.” Following this outreach, the Company entered into customary confidentiality agreements with five strategic parties, including Party A, and nine private equity sponsors, including Party B, and furnished customary business and financial diligence information to these parties. Although one strategic party and one private equity sponsor submitted initial non-binding indications of interest for a potential sale transaction at that time and the Company also made customary management presentations to these parties, these parties subsequently withdrew from the process and did not submit a final proposal to acquire the Company. None of Saint-Gobain, Party A or Party B submitted an initial indication of interest at the time or received a management presentation. Accordingly, the Board determined to continue to execute a standalone business strategy for the Company at that time.

 

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From time to time in 2019 and continuing into 2020, the former chief executive officer of the Company and the chief executive officer of Party A discussed a potential business combination of the Company with Party A. These discussions did not result in a proposal from Party A during that period.

At the Company’s annual meeting of stockholders held on May 28, 2020, a majority of new directors were elected to our Board following a contested election and proxy contest, including eight directors nominated by Starboard. Mr. Peter Feld was appointed as Chairman of the Board following this annual meeting of stockholders.

On November 23, 2020, Mr. Feld emailed the chief executive officer of Party A introducing Mr. Bates as the new chief executive officer of the Company. Mr. Feld believed it would be productive for two chief executive officers in similar businesses to become acquainted. The following day, Mr. Bates introduced himself to the chief executive officer of Party A via email, indicating that Mr. Bates would contact the chief executive officer of Party A in the near future.

During the week of January 24, 2021, Mr. Bates called the chief executive officer of Party A to become acquainted. The parties discussed their respective businesses, and the chief executive officer of Party A referenced Party A’s historical interest in considering a possible business combination of the Company with Party A and prior discussions with the former chief executive officer of the Company, noting that there had always been a significant gap between the respective views of the two parties about the valuation of the Company.

On August 6, 2021, Mr. Bates and a representative of Party B had a telephone call in which the parties discussed the Company’s business and strategy generally, and Party B enquired whether the Company would be interested in a conversation to explore potential transaction opportunities with Party B. Mr. Bates indicated that the Company would be willing to consider exploratory conversations, but that the Company would request that Party B enter into a customary non-disclosure agreement to facilitate those discussions.

On August 16, 2021, the chief executive officer of Party A emailed Mr. Feld and Mr. Bates to request a telephone call to follow up on their prior discussion regarding Party A’s potential interest in an acquisition of the Company.

Also on August 16, 2021, following up on Party B’s prior inquiry, the Company and Party B signed a customary non-disclosure agreement, which did not include a standstill provision, to allow for confidential exploratory discussions regarding potential transaction opportunities involving Party B and GCP.

On August 17, 2021, Mr. Bates had a telephone call with the chief executive officer of Party A, during which the chief executive officer of Party A expressed Party A’s interest in exploring an acquisition of the Company. Mr. Bates stated the Board’s confidence in the Company’s standalone business plan, but noted that if Party A had significant interest in an acquisition of the Company, Party A should submit a written proposal to the Company.

On August 18, 2021, Mr. Bates and Mr. Valente, Vice President, General Counsel and Secretary of the Company, and representatives of Party B held a videoconference to discuss the Company’s business and strategy generally, as well as the type of financial information that Party B would require for exploratory conversations about potential transaction opportunities with Party B.

On August 20, 2021, the chief executive officer of Party A called Mr. Bates to affirm Party A’s interest in the Company and indicated that Party A would submit a non-binding proposal in writing to acquire the Company. Shortly thereafter, Party A sent its non-binding proposal to acquire GCP for $29.00 per share of GCP common stock (the “First Party A Proposal”), which consisted of 50% cash (representing $14.50 per share) and

 

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50% newly-issued shares of Party A’s common stock (representing 0.17 shares of Party A common stock per share of GCP common stock ). The non-binding proposal was subject to due diligence and negotiation of definitive documentation. While the proposal would not be subject to any financing contingency, Party A indicated its desire to pursue financing, including externally sourced debt. Mr. Bates confirmed receipt of Party A’s non-binding proposal and indicated that the Board would discuss at an upcoming meeting and he would respond back to the chief executive officer of Party A after that meeting. On August 17, 2021, the closing price of GCP common stock was $23.49 per share.

On August 26, 2021, the Board held a meeting via videoconference, including management and representatives of Latham & Watkins LLP, outside legal counsel to GCP (referred to as “Latham”), to review the recent discussions with Party A and Party B and to consider how to respond to the First Party A Proposal. Management reviewed the business, strategic and financial position of GCP as a standalone company, together with the financial aspects of the First Party A Proposal. Representatives of Latham provided legal advice regarding the fiduciary duties of the Board in the context of the First Party A Proposal. After discussion and deliberation, the Board determined that the First Party A Proposal undervalued the Company and was inadequate, that the Company should continue to execute its existing business strategy, and that management should respond in writing to Party A, declining the First Party A Proposal. The Board also determined, based on various factors, including, among other things, the Board’s and management’s knowledge of the Company, the Company’s business, and the industry in which the Company operates, that it did not believe the Company should incur the expense of engaging a financial advisor at that time, given the Board’s determination not to move forward with the First Party A Proposal.

On August 30, 2021, Mr. Bates called the chief executive officer of Party A and indicated that the Board had unanimously rejected the First Party A Proposal, believing that the proposal undervalued the Company. Shortly thereafter, the Company sent a letter to the chief executive officer of Party A, indicating that Party A’s proposal undervalued the Company and did not provide a basis for productive discussion. The Company indicated in the letter that the interests of the Company and its stockholders would be best served by continuing to pursue the Company’s existing business strategy.

On September 7, 2021, the chief executive officer of Party A called Mr. Bates to indicate Party A’s continued interest in the Company. In this conversation, the chief executive officer of Party A indicated that Party A could increase the First Party A Proposal above $29.00 per share and could offer all cash consideration. Mr. Bates relayed this conversation to Mr. Feld in a call on September 9, 2021 and Messrs. Feld and Bates determined to request that Party A provide a revised proposal in writing.

On September 10, 2021, Mr. Bates called the chief executive officer of Party A to request that, if Party A had continued interest in an acquisition of the Company at a price above $29.00 per share, Party A should submit a revised written proposal to the Company. The chief executive officer of Party A indicated that he would discuss further with Party A’s board of directors, but proposed an in-person meeting in Florida for October 21, 2021.

On September 15, 2021, Mr. Bates had a telephone call with a representative of Party B to continue exploratory conversations about the potential transaction opportunities with Party B. The representative of Party B asked if the Company would be open to providing limited financial information to facilitate further discussions. Mr. Bates responded that the Company would be open to further discussions and that Party B should reach out to Mr. Craig Merrill, the Chief Financial Officer of the Company, to coordinate exchange of limited financial information.

On September 21, 2021, a representative of Party B contacted Mr. Merrill to request limited financial information with respect to the Company. Party B subsequently emailed a targeted request for financial information regarding the Company to Mr. Merrill.

 

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On September 28, 2021, Mr. Benoit Bazin, the Chief Executive Officer of Saint-Gobain, emailed Mr. Bates to introduce himself and propose an in-person meeting to discuss potential business opportunities when Mr. Bazin was next in the United States. After discussion with Mr. Feld and members of the Board, Mr. Bates responded to Mr. Bazin to propose a meeting on October 14, 2021.

On September 29, 2021, Mr. Merrill furnished certain limited financial information regarding the Company to Party B. Mr. Merrill had a telephone call with representatives of Party B on October 5, 2021 to discuss this information. In response to a follow-up request from Party B, Mr. Merrill provided certain additional financial information regarding the Company to Party B on October 11, 2021 and October 12, 2021.

On October 14, 2021, Messrs. Bates and Bazin had an in-person meeting in Boston, Massachusetts. Mr. Bazin introduced Saint-Gobain and its business and strategy, explained the strategic rationale for Saint-Gobain’s purchase of Chryso, a leading global construction chemicals company, completed in September 2021, noted Saint-Gobain’s view that the Company would fit with Saint-Gobain and its business and strategy, and expressed Saint-Gobain’s interest in considering a potential acquisition of the Company. Mr. Bates then reviewed the Company’s business and strategy. Mr. Bates stated the Board’s confidence in the Company’s standalone business plan, but noted that if Saint-Gobain had significant interest in an acquisition of the Company, Saint-Gobain should submit a written proposal to the Company. No non-public information was exchanged during this meeting.

On October 18, 2021, Saint-Gobain submitted a non-binding proposal to acquire the Company for $29.00 per share in cash (the “First Saint-Gobain Proposal”), conditioned on the Company’s receipt of customary voting agreements from certain of the Company’s stockholders. The First Saint-Gobain Proposal also indicated that Saint-Gobain had sufficient cash on its balance sheet to fund the purchase price and that the proposal would not be subject to any financing condition, that Saint-Gobain had the ability to sign and announce within three to four weeks after commencing substantive discussions, and that the First Saint-Gobain Proposal would be contingent on negotiations being conducted on an expedited bilateral basis. On October 18, 2021, the closing price of GCP common stock was $22.45 per share.

During the period leading up to the November 1, 2021 meeting of the Board, Messrs. Bates and Feld had numerous conversations, including with other members of the Board and members of senior management, to discuss the First Saint-Gobain Proposal, the upcoming meeting with the chief executive officer of Party A, and whether to move forward with formal discussions with Saint-Gobain and Party A with respect to a potential transaction at that time. Given the expressed interest of two highly credible strategic parties, the opportunity to facilitate a competitive process to realize additional value for the Company and its stockholders, and the expectation that each of the two strategic bidders would increase their initial non-binding proposals subject to completion of due diligence, it was determined that the Company should continue preliminary discussions with each of Saint-Gobain and Party A in the near term, and to discuss whether to move forward with more formal discussions with the full Board at its next meeting.

On October 19, 2021, Mr. Bazin called Mr. Feld to discuss Saint-Gobain’s interest in the Company and to review the First Saint-Gobain Proposal. Mr. Feld indicated that he would discuss with other Board members and expected the Company to provide initial feedback on process and timing promptly.

On October 21, 2021, the chief executive officer of Party A met in person with Mr. Bates in Florida to discuss Party A’s continued interest in a potential acquisition of the Company and the potential opportunities for synergies from such a merger. Mr. Bates stated that if Party A had continued interest in an acquisition of the Company, Party A should submit a revised proposal to the Company in writing. The chief executive officer of Party A indicated that, before Party A could submit a revised proposal to the Company, Party A would need to review confidential financial diligence information regarding the Company and evaluate potential opportunities for synergies in a proposed transaction. Mr. Bates noted that, based on his discussions with Mr. Feld and other members of the Board, he expected the Board would prefer an all-cash offer in order to, among other things, maximize certainty of value. No non-public information was exchanged during this meeting.

 

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On October 23, 2021, Mr. Bates had a call with Mr. Bazin to provide initial feedback on the First Saint-Gobain Proposal. Mr. Bates indicated that the Company appreciated Saint-Gobain’s interest and he expected the Board to discuss the proposal further at its upcoming meeting, but that the proposal undervalued the Company. Mr. Bates reiterated the Board’s confidence in the Company’s standalone business plan, and noted that there was another strategic third party interested in the Company that the Board also would be considering at its upcoming meeting.

On October 26 and 27, 2021, Mr. Bates and Mr. Bazin exchanged emails in which Mr. Bates indicated that, based on his conversations with Mr. Feld and the significant third party interest in the Company, Mr. Bates anticipated the Board would consider further discussions with Saint-Gobain if Saint-Gobain would be willing to increase its proposal. Mr. Bazin confirmed that Saint-Gobain expected to be able to increase its offer following its review of financial due diligence. Mr. Bates noted that further discussions would need to be approved by the Board at its upcoming meeting. The parties discussed that, if further discussions were approved by the Board, a customary confidentiality agreement would need to be in place, and the Company subsequently circulated a draft confidentiality agreement to Saint-Gobain.

On October 28, 2021, Saint-Gobain entered into a customary confidentiality agreement with GCP, which included a customary one year standstill provision. The standstill provision expressly permitted confidential proposals to the Board and was subject to a customary “sunset” provision on the public announcement of the sale of 50% or more of GCP common stock.

On November 1, 2021, the Board met via videoconference, including Messrs. Merrill and Valente. Messrs. Feld and Bates updated the Board on the recent discussions with Party A and Saint-Gobain, including the First Saint-Gobain Proposal. Management reviewed the business, operations and financial performance of the Company, and the Board discussed the opportunity to facilitate a competitive process between two highly credible strategic parties to realize additional value for the Company and its stockholders. Following this discussion, the Board authorized further discussions with each of Party A and Saint-Gobain, including management presentations and furnishing certain financial information to allow each party to submit revised proposals to acquire the Company. In addition, the Board discussed the status of the exploratory discussions with Party B and determined, based on preliminary nature of those discussions, the Board’s general understanding that a private equity sponsor was unlikely to be in a position to acquire the Company at a value in excess of a motivated strategic party with identified opportunities for synergies and the Board’s desire for management to focus on facilitating a competitive process between Party A and Saint-Gobain to maximize value, that the Company should defer further discussions with Party B. The Board also determined, based on various factors, including, among other things, the Board’s and management’s knowledge of the Company, the Company’s business and the industry in which the Company operates, that it did not believe the Company should incur the expense of engaging a financial advisor at that time, but that management should begin confidential discussions with potential financial advisors to be in a position to advise the Board, when and if revised proposals were obtained that, the Board believed, provided a basis to move forward.

On November 2, 2021, Mr. Bates called Mr. Bazin to indicate that the Board had approved further discussions with Saint-Gobain and another interested strategic party regarding a potential acquisition of the Company, and that the Company proposed to schedule a management presentation and furnish certain financial information to allow the bidders to submit revised proposals. Mr. Bates noted the Board continued to have confidence in the Company’s standalone business plan and had not determined to sell the Company, but had authorized a targeted process to explore whether a potential transaction would realize additional value for the Company and its stockholders.

Also on November 2, 2021, Mr. Bates called the chief executive officer of Party A to indicate that there was another strategic party interested in a potential acquisition of the Company, and that the Board had determined to invite both Party A and the other strategic party to evaluate the Company in greater detail, including a management presentation and review of certain limited financial information, after signing a

 

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customary confidentiality agreement. Mr. Bates noted the Board continued to have confidence in the Company’s standalone business plan and had not determined to sell the Company, but had authorized a targeted process to explore whether a potential transaction would realize additional value for the Company and its stockholders. On November 3, 2021, the chief executive officer of Party A called Mr. Bates and discussed the Company conducting a presentation to the management of Party A on November 18 and 19, 2021.

On November 3, 2021 and November 4, 2021, the Board met in person in Alpharetta, Georgia. During the meeting, in addition to its regular business, the Board discussed the status of discussions with Party A and Saint-Gobain, as well as the Company’s standalone business plan and strategy.

On November 4, 2021, Party A signed a customary confidentiality agreement which included a customary eighteen month standstill provision. The standstill provision expressly permitted confidential proposals to the Board and was subject to a customary “sunset” provision on the public announcement of the sale of 50% or more of GCP common stock.

On November 11, 2021, Saint-Gobain and the Company entered into a customary clean team agreement, which addressed disclosure of competitively sensitive information between the parties. Later that day and continuing into November 12, 2021, the Company held a management presentation via an in-person meeting with Saint-Gobain regarding the Company’s business, products, operations, financial performance and estimates, as well as potential opportunities for synergies and acquisition opportunities for Saint-Gobain in a potential transaction. Saint-Gobain was subsequently granted access to a virtual data room that included customary business, financial, accounting, environmental, human resources and legal diligence information, in order for Saint-Gobain to conduct its due diligence review of the Company. At the conclusion of the meeting, Messrs. Bates and Bazin, together with other members of senior management of the Company and Saint-Gobain, discussed next steps in the process and timing. Mr. Bates reiterated that the Board continued to have confidence in the Company’s standalone business plan and had not determined to sell the Company, that the process approved by the Board was targeted and exploratory only, and that Saint-Gobain would need to improve the First Saint-Gobain Proposal for the Board to move forward with further discussions.

On November 16, 2021, Party A was granted access to the virtual data room that included customary business, financial, accounting, environmental, human resources and legal diligence information, in order for Party A to conduct its due diligence review of the Company. On the same date, Party A and the Company entered into a customary clean team agreement, which addressed disclosure of competitively sensitive information between the parties.

On November 18, 2021, Mr. Feld called Mr. Bazin to discuss the First Saint-Gobain Proposal in greater detail. Mr. Feld noted that the Board appreciated Saint-Gobain’s interest in the Company and that the Board would fully consider any revised proposal. Mr. Feld shared with Mr. Bazin that the Board continued to have confidence in the Company’s standalone business plan and that the Board believed that the Company was undervalued. Mr. Feld informed Mr. Bazin that the Board felt that the First Saint-Gobain Proposal undervalued the Company and that if Saint-Gobain wanted to pursue an acquisition of the Company that the purchase price would need to be meaningfully increased. Mr. Feld also mentioned that there had been other strategic interest in the Company.

On November 18 and 19, 2021, the management of the Company held a presentation for Party A in Atlanta, Georgia. During the management presentation, the Company discussed its business, products, operations, financial performance and estimates, as well as potential opportunities for synergies for Party A in a potential transaction. At the conclusion of the meeting, Mr. Bates and chief executive officer of Party A, together with other members of senior management of the Company and Party A, discussed next steps in the process and timing. Mr. Bates reiterated that the Board continued to have confidence in the Company’s standalone business plan and had not determined to sell the Company, that the process approved by the Board was targeted and exploratory only, and that Party A would need to submit a proposal at a price significantly above the First Party A Proposal for the Board to move forward with further discussions.

 

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On November 19, 2021, Mr. Bazin corresponded with both Mr. Bates and Mr. Feld to convey a revised offer from Saint-Gobain of $30.00 per share in cash. Saint-Gobain then sent an updated non-binding written proposal to acquire the Company for $30.00 per share in cash (the “Second Saint-Gobain Proposal”). The Second Saint-Gobain Proposal was subject to the completion of diligence and negotiation of definitive documents. The offer requested a response by November 29, 2021, and was conditioned on the commitment to work on an expedited, bilateral and confidential basis, as well as receipt of customary voting agreements from certain stockholders of the Company. Saint-Gobain indicated its ability to sign and announce within two weeks after commencing substantive discussions. On November 19, 2021, the closing price of GCP Common Stock was $23.44 per share.

On November 22, 2021, a special meeting of the Board was held via teleconference, with the Company’s management and representatives of Latham in attendance, during which the Board discussed the status of the proposals from Party A and Saint-Gobain. The Board also considered and discussed the Management Projections (for details, see “—Certain Financial Projections”) with members of management and received presentations from representatives of RBCCM (as a potential financial advisor at that time), which included preliminary financial analyses relating to the Company’s standalone business strategy, and a presentation from representatives of another potential financial advisor to the Company, which included a review of strategic and financial alternatives available to the Company, including continuing to pursue the Company’s standalone business strategy, seeking to enhance return of capital to stockholders by using excess liquidity or incremental debt financing to fund either a special dividend or share buyback, pursuing one or more meaningful acquisitions for cash and/or stock considerations, or a sale of the Company to strategic or financial sponsor parties. The Board determined that, in light of the proposal received from Saint-Gobain and the expectation that a revised proposal would be received from Party A shortly, as well as the opportunity to realize additional value in a competitive process between Party A and Saint-Gobain, the Company should continue to explore a potential sale transaction with both Party A and Saint-Gobain. In this context, the Board determined it was not appropriate to grant exclusivity to either Party A or Saint-Gobain.

On November 23, 2021, the chief executive officer of Party A called Mr. Bates and shared that a revised offer would be submitted in writing later that day. Shortly thereafter, the Company received a non-binding proposal for Party A to acquire the Company for $31.00 per share, which consisted of 50% cash (representing $15.50 per share) and 50% of newly-issued shares of Party A’s publicly-traded common stock (representing 0.18 shares of Party A common stock per share of GCP common stock), but with the option for the Company to receive $31.00 per share all in cash if preferable to the Board (the “Second Party A Proposal”). The Second Party A Proposal was subject to the completion of diligence and negotiation of definitive documents. The Second Party A Proposal indicated Party A’s desire to pursue customary financing, including externally sourced debt, but stated that the Second Party A Proposal was not subject to a financing contingency. The Second Party A Proposal indicated a three to four week timeline to complete negotiations, diligence, and sign and announce the transaction. On November 23, 2021, the closing price of GCP Common Stock was $23.07 per share.

On November 24, 2021, a special meeting of the Board was held via teleconference, together with management and representatives from RBCCM and Latham. During the meeting, representatives from Latham reviewed the fiduciary obligations of the Board when considering potential strategic transactions, including a potential sale transaction. Representatives from RBCCM provided the Board an update with respect to certain financial analyses, as well as strategies to maximize stockholder value, and reviewed various potential deal processes. It was noted that Saint-Gobain and Party A were highly qualified strategic bidders, with the opportunity to realize synergies in a potential transaction with the Company, and, taking into consideration the strategic alternative process from the spring of 2019, that outreach to other potential strategic parties or financial sponsors (including Party B) at that time was not expected to realize additional value for the Company and its stockholders. The Board reviewed the terms of the RBCCM engagement and certain customary disclosures provided by RBCCM with respect to its relationships with the Company, Saint-Gobain and Party A, and selected RBCCM as the Company’s financial advisor on the basis of, among other things, RBCCM’s reputation, experience, knowledge and familiarity with the Company and its industry, and lack of material conflicts. The

 

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Board authorized Mr. Bates to work with Mr. Feld to finalize an engagement letter with RBCCM. With respect to the Second Saint-Gobain Proposal and the Second Party A Proposal, the Board determined to move forward with both Party A and Saint-Gobain and authorized the Company’s management and RBCCM to advise the bidders of a proposed process for due diligence and submission of revised proposals. The Board determined that it would not grant exclusivity to either bidder at that time.

That evening, Mr. Bates called Mr. Bazin to inform him that the Second Saint-Gobain Proposal was no longer competitive and needed to be increased and that the Board was not willing to grant exclusivity, but that the Board had authorized the Company to work with RBCCM towards obtaining final bids and potentially sign definitive documents by the week of December 13, 2021. Mr. Bazin indicated that he would come back with a revised proposal after completion of due diligence, but that the Company’s stated timeline was too long and that Saint-Gobain would be in a position to submit its final proposal, sign definitive transaction documents and announce by Monday, December 6, 2021.

On November 26, 2021, Mr. Bates called the chief executive officer of Party A to explain that the Board had reviewed the Second Party A Proposal and had determined to move forward with a competitive process, with the most important considerations for the Board being value, certainty, and speed. In response to a question from Mr. Bates, Party A clarified that the implied value of the 50% cash and 50% of Party A common stock offer was intended to be the same $31.00 per share as the all-cash offer. Mr. Bates shared that RBCCM and Latham had been hired as advisors to represent the Company, and further discussed timing, due diligence, and next steps.

On November 28, 2021, Mr. Valente contacted Antoine Vignial, the Corporate Secretary of Saint-Gobain to discuss process and timing. Mr. Valente indicated that additional materials would be provided in the virtual data room, with a merger agreement draft to be distributed on the same day. It was noted that the regulatory teams of Latham and the Freshfields Bruckhaus Deringer US LLP (“Freshfields”), outside legal counsel to Saint-Gobain, should discuss competition and foreign investment filings.

That evening, representatives of Latham and Freshfields met telephonically to discuss process and timing, including the timing for distribution of a draft merger agreement, the process for considering voting agreements requested by Saint-Gobain, due diligence and the process to confirm antitrust and foreign investment filing requirements. Representatives of Freshfields indicated that Saint-Gobain wanted to sign by the end of the week. Representatives of Latham noted that the process was competitive and that representatives of RBCCM had communicated expectations on process to representatives of the financial advisors to Saint-Gobain.

On November 29, 2021, representatives of Latham met telephonically with the outside legal counsel to Party A to discuss process and timing, including the timing for distribution of a draft merger agreement, the process for considering voting agreements requested by Party A, due diligence and the process to confirm antitrust filing requirements. Party A’s legal counsel indicated that they understood the process could be moving forward on an accelerated timeline. Latham explained that the process was moving quickly and that Party A should work as quickly as possible to remain competitive.

On the afternoon of November 29, 2021, Latham furnished the draft merger agreement to the legal representatives of each of Party A and Saint-Gobain. The draft merger agreement provided for, among other things, cash consideration, customary non-solicitation and fiduciary out provisions, including the ability for the Company to consider unsolicited competing proposals, customary information and access rights for the bidder, an initial three calendar day match period (reduced to one calendar day for subsequent bids), the ability for the Company to terminate the merger agreement to accept a superior proposal, the ability for the Company to change its recommendation for an intervening event, a termination fee equal to 2% of transaction equity value, a “hell or high water” antitrust covenant and no financing condition.

During the period leading up to December 3, 2021, the Company and its financial and legal advisors posted additional documents to the virtual data rooms to which Party A and Saint-Gobain had access, held

 

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diligence calls and hosted facility visits with each of Party A and its financial, legal and other advisors, and Saint-Gobain and its financial, legal and other advisors. The various diligence materials covered topics that included business, financial, commercial, tax, legal, compliance, human resources, environmental, intellectual property and information technology issues.

On December 1, 2021, Mr. Bates had a telephone call with the chief executive officer of Party A, indicating that the Company expected to receive a revised, higher cash offer from another bidder, that the other bidder was accelerating its process, had made considerable progress on its merger agreement, and could be in a position to sign within 72 hours of its revised offer. Mr. Bates suggested that Party A provide the Company with crucial diligence requests in order to support an increased offer from Party A, and asked if Party A was willing to increase its offer. The chief executive officer of Party A confirmed that Party A had the ability to increase the Second Party A Proposal.

On December 1, 2021, Party A requested consent to furnish the Company’s name on a confidential basis to rating agencies as part of a process to arrange potential debt financing. The Company promptly granted such consent. On December 1, 2021, an article was published on Bloomberg.com, an industry news site that covers mergers and acquisitions, speculating that the Company was considering strategic alternatives, including a potential sale of the Company. The Company declined to comment on this article or subsequent market speculation, consistent with its corporate policy that it does not comment on market rumors or speculation. On November 30, 2021, the last trading day prior to the article being published on the Bloomberg.com website, the Company’s stock price closed at $23.34 per share.

In the evening on December 1, 2021, Freshfields sent a mark-up to the merger agreement to Latham together with proposed form voting agreements for Starboard and Standard, respectively. Key changes to this revised merger agreement draft included an increased matching period of five business days (reduced to three business days for subsequent proposals), a termination fee equal to 3.75% of transaction equity value, and an additional fee equal to 1% of transaction equity value payable if, among other things, the Company’s stockholders did not vote to approve the proposed transaction (also known as a “naked no vote”). Saint-Gobain had agreed to the proposed “hell or high water” divestiture covenant. The voting agreement drafts were in customary form and would terminate upon a termination of the merger agreement, but would not terminate if the Board otherwise changed its recommendation without terminating the merger agreement.

On December 2, 2021, Mr. Bates and the chief executive officer of Party A exchanged emails reviewing critical due diligence items and providing feedback regarding the completion of various diligence requests.

On December 2, 2021, Messrs. Bates and Valente had separate calls with Messrs. Bazin and Vignial of Saint-Gobain to discuss the timing and process of the proposed transaction. Mr. Vignial subsequently indicated that Saint-Gobain had substantially completed its due diligence, the only remaining item being the completion of the planned site visit on December 3, 2021. Later that day, Mr. Bazin called Mr. Bates to confirm that significant progress had been made and indicated Saint-Gobain wanted to accelerate the process. Mr. Bazin separately confirmed to Mr. Feld that he spoke to Mr. Bates and indicated that Saint-Gobain’s due diligence was substantially complete pending a last site visit for the next day, December 3, 2021. Mr. Bazin requested that Latham and Freshfields work to revise the merger agreement and converge on finalized terms by the end of the day on December 3, 2021.

On the afternoon of December 2, 2021, representatives of Latham held a teleconference with legal counsel to Party A to discuss the status of the applicable merger agreement draft, process and timing. Party A’s legal counsel indicated that an updated merger agreement draft would be sent later that evening, but that Party A would not offer a “hell or high water” clause, but instead would offer a limited divestiture covenant subject to a cap, and a reverse termination fee that would be equal to the Company’s termination fee. Party A’s legal counsel also asked whether there would be additional time the following week to finalize the merger agreement.

 

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Representatives of Latham indicated that the process was competitive and moving quickly, and that Party A should make its best proposal relative to antitrust commitments and financing as soon as possible to remain competitive.

Later that day, representatives of RBCCM held a teleconference with representatives of the financial advisor to Party A and communicated that the process timeline was accelerating and that Party A should work quickly to increase value, shorten the timeline for signing definitive transaction documents and provide additional certainty of consummation of a transaction.

Also on December 2, 2021, representatives of Latham held a teleconference with representatives of Freshfields to discuss the status of the merger agreement draft, process and timing. Latham indicated that a revised draft of the merger agreement would be forthcoming on December 3, 2021, including 2.25% termination fee and a reduced matching period of three business days (reduced to two business days for subsequent proposals) and the elimination of the “naked no vote” termination fee payable by the Company. In addition, Latham discussed the process for requesting a voting agreement from Standard, noting that Standard was not under a non-disclosure agreement at that time, and therefore that GCP would plan to approach Standard to sign a non-disclosure agreement closer to the signing of the merger agreement.

That evening, Party A’s legal counsel sent a mark-up to the draft merger agreement to Latham together with a proposed voting agreement for each of Starboard and Standard. Updated terms included an increased matching period of three business days (reduced to two business days for subsequent proposals). Party A agreed to a termination fee of 2% of the proposed equity value for the Company, but did not accept the “hell or high water” divestiture covenant. Instead, Party A proposed it would have no obligation to divest assets that generate, in the aggregate, more than $30 million in total revenues in the twelve months ended on December 31, 2020, as well as a reverse termination fee, payable if the transaction did not close due to failure to obtain regulatory approvals, equal to 2% of the proposed equity value of the Company. Party A noted that its reverse termination fee should be equal to the termination fee payable by the Company in connection with exercise of the fiduciary out provisions. The merger agreement would not be subject to a financing condition, but Party A also added a covenant for the Company to cooperate to facilitate Party A’s third party debt financing. The voting agreement drafts were in customary form and would terminate upon a termination of the merger agreement, but would not terminate if the Board otherwise changed its recommendation without terminating the merger agreement.

That same evening, through email and telephonic communications, Mr. Vignial and Mr. Valente discussed the process for finalizing the merger agreement and other transaction documents.

During the morning of December 3, 2021, the Board, along with the Company’s management and representatives of Latham and RBCCM, met via videoconference and discussed the status of the ongoing negotiations, as well as process and anticipated timing. Mr. Bates indicated that he expected Saint-Gobain to submit a revised offer on December 4, 2021. Latham reviewed the status of key legal work streams, and provided legal advice regarding the revised drafts of the merger agreement submitted by Party A and Saint-Gobain. Latham also reviewed the proposed process for discussions with Starboard and Standard regarding the proposed voting agreements, including the process to request that Standard enter into a customary non-disclosure agreement with respect to those discussions. It was noted that Starboard was already subject to a non-disclosure agreement entered into in connection with Mr. Feld’s service on the Board. Representatives of RBCCM reviewed and provided updates with respect to their discussions with Party A and Saint-Gobain, including strategies to maintain competitive tension in the process, Saint-Gobain’s desire to sign as quickly as possible and how best to elicit final proposals from each of Party A and Saint-Gobain to maximize value and certainty for the Company. The Board confirmed that it was not prepared to grant either Party A or Saint-Gobain exclusivity, and that the Board would provide clear messages to each party to seek their final proposals. The Board instructed management, Latham and RBCCM to notify Saint-Gobain and its advisors that Saint-Gobain would need to improve the value of its offer significantly to remain competitive, but that the Company was willing to continue to move quickly if Saint-Gobain offered compelling value. The Board also instructed management, Latham and

 

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RBCCM, to notify Party A that, in addition to increasing its offer price, Party A needed to accelerate timing of completing definitive transaction documents and enhance the certainty of completing a proposed transaction, including by considering a “hell or high water” provision, and obtaining committed debt financing. The Board instructed Latham to send revised draft merger agreements to the legal advisors for each of Party A and Saint-Gobain. The Board authorized management to seek a confidentiality and non-disclosure agreement with Standard to facilitate discussions of a voting agreement between Standard and Saint-Gobain or Party A, as the case may be. In addition, the Board granted customary approvals, for purposes of Section 203 of the DGCL, with respect to the voting agreements proposed to be entered into by Saint Gobain and Party A, respectively, with Starboard and Standard such that the restrictions on business combinations set forth in Section 203 would not apply by virtue of the voting agreements. The Board concluded the meeting by authorizing RBCCM to use the Management Projections (for details, see “—Certain Financial Projections”), which were previously reviewed by the Board, for purposes of its financial analysis and fairness opinion. Management confirmed the Management Projections represented management’s best estimates as to the future financial performance of the Company at that time.

On December 3, 2021, Saint-Gobain submitted via email its final offer of $32.00 per share, in cash (the “Final Saint-Gobain Proposal”). This email was followed by a letter from Saint-Gobain confirming the $32.00 per share, all-cash offer, and indicated that Saint-Gobain’s due diligence of the Company was complete and that Saint-Gobain was prepared to sign the definitive documents. The proposal also indicated that it was subject to exclusive negotiations with the Company, that the definitive agreement must be signed no later than the opening of the European financial markets on December 6, 2021 and that the proposal represented Saint-Gobain’s best and final offer.

On December 3, 2021, Mr. Bates called the chief executive officer of Party A to discuss process and timing, noting that the other bidder had revised its offer and now constituted the highest offer for the Company, that the other bidder was moving quickly to signing and had offered a “hell or high water” commitment with respect to antitrust and other regulatory approvals. Mr. Bates requested that Party A submit its final proposal by December 4, 2021, increasing both value and certainty, as the Board was planning to meet on December 5, 2021 to review final proposals.

On December 3, 2021, representatives of Latham and Freshfields held a teleconference to discuss process and timing for the merger agreement, as well as the process and timing for discussing voting agreements with Starboard and Standard. Separately, Mr. Valente and Mr. Vignial participated in a telephone call with respect to process and timing, during which Mr. Vignial expressed Saint-Gobain’s desire to sign a definitive merger agreement quickly.

Also on December 3, 2021, Mr. Feld, management and representatives of Latham and RBCCM held a teleconference to discuss process and timing, including how best to elicit a final proposal from Party A, in light of the Final Saint-Gobain Proposal and Saint-Gobain’s statement that a definitive agreement must be signed no later than the opening of the European financial markets on December 6, 2021. The parties determined that management, RBCCM and Latham should reiterate to Party A the request to provide a final proposal by the end of the day on December 4, 2021, to enable the Board to consider final proposals during its anticipated meeting on December 5, 2021. Latham was instructed to send an updated merger agreement draft to Party A’s legal advisor, and request that Party A’s legal advisor send a revised draft, reflecting any final comments from Party A, together with its final proposal on December 4, 2021.

Later that day, representatives of Latham had a teleconference with Party A’s legal counsel to discuss process and timing, and provide feedback on key issues in the merger agreement. Latham noted that a revised merger agreement would be distributed on the morning of December 4, 2021 and emphasized the need for Party A to enhance certainty in its proposal by agreeing to a “hell or high water” provision or, if it were unable to offer such a provision, that Party A submit its strongest commitments with respect to antitrust issues. Latham also indicated that the process was competitive and moving quickly and that, to be competitive, Party A should be in a position to sign as soon as possible.

 

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Also on December 3, 2021, Mr. Bates had a call with representatives of Standard to request that Standard enter into a customary non-disclosure agreement to allow for discussions with the Company. The Company subsequently entered into a customary non-disclosure agreement with Standard. Later that day, Mr. Feld and Mr. Bates called the Standard representatives to advise them of the proposed transactions with Saint-Gobain and Party A, noting that Saint-Gobain’s proposal was currently more favorable, and conveyed the request for an agreement by Standard to vote for the proposed transaction if Saint-Gobain emerged as the winner. Latham then distributed the voting agreement draft to the respective legal counsels for each of Starboard and Standard.

During the evening of December 3, 2021, representatives of Latham and Freshfields participated in a teleconference to discuss issues related to the merger agreement, including Saint-Gobain’s request for a termination fee of 3.75% of the proposed transaction equity value of the Company. Shortly thereafter, Freshfields circulated a revised draft of the merger agreement to Latham and requested a call to finalize all open issues to be in a position to sign as soon as possible. Latham responded that it would need to review the documents and consult with the Company, and then would be in a position for a teleconference with Freshfields the next morning.

Also that evening, Mr. Vignial called Mr. Valente to discuss open issues with respect to the most recent revised merger agreement draft circulated from Freshfields to Latham. Mr. Vignial proposed a termination fee of 3.00% of the proposed transaction equity value of the Company. Mr. Valente indicated that the Company could be in a position to accept the 3.00% termination fee. From a process perspective, they agreed to instruct their respective legal teams to work to finalize documents as soon as possible.

On the morning of December 4, 2021, Latham distributed draft disclosure schedules to the legal counsels for each of Party A and Saint-Gobain. Also on the morning of December 4, 2021, Latham distributed a revised merger agreement draft to Party A’s legal counsel, requesting that Party A submit its final proposed draft merger agreement by the end of the day on December 4, 2021 together with Party A’s final proposal.

Also on the morning of December 4, 2021, Mr. Bazin contacted both Mr. Feld and Mr. Bates to express Saint-Gobain’s desire to sign later in the day on December 4, 2021. Mr. Feld then convened a call with management and representatives of Latham and RBCCM to discuss process and timing, including the timing to obtain an improved offer from Party A in light of Saint-Gobain’s updated proposal and request to sign a definitive agreement by the evening of December 4, 2021. Following this call, Mr. Feld called Mr. Bazin to inform him that the Board was planning to meet on December 5, 2021, that the Company and its advisors would work quickly to finalize all definitive documents, and, if Saint-Gobain was selected as the buyer, that the Company was working to be in a position to sign no later than the opening of the European financial markets on December 6, 2021, consistent with Saint-Gobain’s previously communicated timeline. Mr. Feld stated that the Company would not be in a position to sign an agreement on December 4, 2021.

Thereafter, Mr. Bates called the chief executive officer of Party A, and representatives of RBCCM made a corresponding call to representatives of Party A’s financial advisor, to reiterate that Party A should submit its updated proposal by on the end of the day on December 4, 2021, along with an updated merger agreement draft, to remain competitive in the process. Mr. Bates and RBCCM emphasized the need for Party A to increase the value of its proposal and the certainty of completion of a transaction, and provide a clear timeline for signing definitive transaction documents.

Later that day, Mr. Bazin contacted Mr. Feld to request that the merger agreement between Saint-Gobain and the Company be signed as soon as possible. Mr. Bazin further requested an update regarding negotiations with Standard regarding its voting agreement. Mr. Feld indicated that Standard had verbally communicated its support for a sale of the Company, and that the Company expected to receive Standard’s comments to the draft voting agreement later that evening. Mr. Feld also informed Mr. Bazin that the Board would meet on the morning of December 5, 2021, and that the Company continued to work to be in a position to sign no later than the opening of the European financial markets on December 6, 2021, consistent with Saint-Gobain’s previously communicated timeline, if Saint-Gobain was selected as the buyer.

 

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Later on December 4, 2021, Latham sent a revised merger agreement draft to Freshfields, together with comments to the voting agreement draft. The parties subsequently exchanged further drafts of the merger agreement, along with a revised draft voting agreement. Latham forwarded the voting agreement draft to the legal counsel for each of the two stockholders (Starboard and Standard) and requested that each be in a position to sign its respective voting agreement.

On December 4, 2021, the chief executive officer of Party A called Mr. Bates to present Party A’s final proposal of $32.00 per share, with 60% of the consideration payable in cash and 40% payable with Party A common stock (the “Final Party A Proposal”), and that Party A would not agree to a “hell or high water” provision. The chief executive officer of Party A said Party A was working to be in a position to sign definitive documents during the following week. Mr. Bates requested a submission of the offer in writing. The chief executive officer of Party A stated that they could not provide an offer in writing until December 5, 2021. Mr. Bates indicated that he would provide feedback after the Board meeting the next day.

On the morning of December 5, 2021, the Board convened to review the Final Party A Proposal and the Final Saint-Gobain Proposal. The Board discussed that while each proposal attributed the same nominal value for the Company’s stock at $32.00 per share, the Final Party A Proposal consisted of 60% cash and 40% stock and required third party debt financing, whereas the Final Saint-Gobain Proposal consisted of 100% cash and would be funded from cash on hand at Saint-Gobain. The Board noted Party A would not agree to a “hell or high water” provision, and Party A would not be in a position to sign a definitive agreement until the following week at the earliest. Representatives of Latham provided legal advice to the Board with respect to antitrust and foreign investment filings, reviewed key terms of the draft merger agreement proposed by Saint-Gobain, and counseled the Board regarding its fiduciary duties in the context of a potential sale of the Company. Representatives of RBCCM reviewed RBCCM’s financial analysis with respect to the Final Saint-Gobain Proposal. After discussion, the Board expressed its view that the competitive process had yielded the best proposals from each party and, in light of value and certainty represented by the Final Saint-Gobain Proposal and Saint-Gobain’s statement that it would not continue with discussions if the transaction were not signed and announced prior to the opening of the European financial markets on December 6, 2021, the Company should work with its advisors to finalize definitive documents with Saint-Gobain to be presented to the Board for approval later that day.

Throughout the day on December 5, 2021, representatives of Latham and Freshfields participated in a series of conference calls in order to finalize the merger agreement and the disclosure schedules, and engaged in separate discussions with legal counsel to Starboard and Standard to finalize the voting agreements requested by Saint-Gobain. In connection with these discussions, Saint-Gobain agreed that the voting agreements would terminate on a change in recommendation by the Board.

On December 5, 2021, the chief executive officer of Party A sent an email to Mr. Bates withdrawing the Final Party A Proposal.

In the late afternoon of December 5, 2021, a special meeting of the Board was held via teleconference with its management and representatives of Latham and RBCCM in attendance. The Board reviewed the final form of the definitive agreements relating to the merger with Saint-Gobain as presented by representatives of Latham, including the Merger Agreement and the voting agreements. Representatives of RBCCM then reviewed RBCCM’s financial analyses and rendered an oral opinion to the Board, which was subsequently confirmed by delivery of a written opinion dated December 5, 2021, to the effect that, as of the date of such opinion, and based on and subject to the assumptions, qualifications, limitations and other matters set forth therein, the $32.00 per share consideration to be paid to the holders of GCP common stock pursuant to the Saint-Gobain merger agreement was fair, from a financial point of view, to such holders. For more information about RBCCM’s opinion, see below under the section entitled “—Opinion of RBC Capital Markets, LLC.” The Board considered various reasons to approve the Merger Agreement (see “—Recommendation of Our Board of Directors and

 

46

Reasons for the Merger” beginning on page 47), and certain countervailing factors. After discussions with the Company’s management and financial and legal advisors, the Board unanimously:

 

●

approved, adopted and declared advisable the Merger Agreement and the consummation of the transactions contemplated by the Merger Agreement, including the merger;

 

●

determined the terms of the Merger Agreement and the merger were fair to, and in the best interests of, the Company and its stockholders;

 

●

approved the voting agreements;

 

●

directed that the Merger Agreement be submitted to the stockholders of the Company for adoption; and

 

●

recommended adoption of the Merger Agreement by the Company’s stockholders.

Also on December 5, 2021, Mr. Bates discussed certain retention matters for key employees with Saint-Gobain, including the Company’s desire to make certain awards to key employees during the pre-closing period in connection with employee promotion and annual performance assessments and retention. The parties mutually agreed to a retention bonus pool not to exceed $12,000,000 in the aggregate and that Mr. Bates and Mr. Bazin would cooperate in good faith to finalize the recipients, terms, timing and amounts of such bonuses after the execution of the Merger Agreement.

During the evening of December 5, 2021, the Company and Saint-Gobain executed and released signatures for the Merger Agreement and each of Starboard and Standard, as well as Saint-Gobain, executed and released signatures for the voting agreements.

On the morning of December 6, 2021, the Company and Saint-Gobain issued press releases announcing the merger.

Recommendation of Our Board of Directors and Reasons for the Merger

Recommendation of Our Board of Directors

The Board, after consulting with its financial advisor and outside legal counsel and carefully reviewing and considering various factors described in “—Reasons for the Merger,” unanimously (i) approved, adopted and declared advisable the Merger Agreement, the Voting Agreements and the consummation of the transactions contemplated thereby, including the Merger; (ii) determined that the transactions contemplated by the Merger Agreement, including the Merger, and the Voting Agreements are advisable, fair to, and in the best interests of, GCP and its stockholders; (iii) directed that the Merger Agreement be submitted to the stockholders of GCP for adoption at the special meeting; and (iv) recommended that GCP’s stockholders adopt the Merger Agreement.

The Board recommends that you vote: (i) “FOR” the Merger Proposal; (ii) “FOR” the Adjournment Proposal; and (iii) “FOR” the Compensation Proposal.

Reasons for the Merger

At a meeting of our Board on December 5, 2021, our Board unanimously (i) approved and declared advisable the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger; (ii) determined that the terms of the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable, fair to, and in the best interests of, GCP and its stockholders; (iii) directed that the Merger Agreement be submitted to GCP’s stockholders for adoption at the special meeting; and (iv) recommended that GCP’s stockholders adopt the Merger Agreement.

In reaching its decision to approve the Merger Agreement and the Merger, and to recommend that the Merger Agreement be adopted by GCP’s stockholders, the Board evaluated the Merger Agreement and the

 

47

Merger with GCP’s management and GCP’s legal and financial advisors and carefully considered a number of factors, including the following material factors (which are not intended to be exhaustive or listed in any relative order of importance):

 

●

the fact that the Merger Consideration represents (i) a premium of approximately 37% over the closing price of GCP common stock on November 30, 2021, the last trading day before a media report was published speculating about a potential sale process, and (ii) a premium of 39% over the 30-day volume-weighted average on the same date;

 

●

the Board’s belief that the value offered to stockholders pursuant to the Merger is more favorable to GCP stockholders than the potential value from other alternatives reasonably available to GCP, including remaining an independent public company, after reviewing GCP’s business, financial condition, results of operations, market trends, competitive landscape and execution risks, and discussions with GCP’s management and advisors and considering:

 

●

the outlook for the industries and end markets that GCP serves;

 

●

the historical, current and prospective financial condition, results of operations and business of GCP and the execution risks and uncertainties associated with achieving GCP’s stand-alone plan, including GCP’s ability to attract and retain talent, GCP’s ability to compete effectively and growth given its relatively smaller scale in its geographies outside North America, and GCP’s history of management changes and the restructuring and relocation of its corporate headquarters to Alpharetta, Georgia;

 

●

the increasingly competitive nature of GCP’s industry; and

 

●

the risks and uncertainties of continuing on a stand-alone basis as an independent public company.

 

●

the fact that the Merger Consideration of $32.00 per share will be paid in cash, and provides certainty, immediate value and liquidity to GCP’s stockholders, enabling them to realize value for their interest in GCP while eliminating business and execution risk inherent in GCP’s business, including risks and uncertainties associated with achievement of the stand-alone plan;

 

●

the Board’s belief that the competitive bidding process between Saint-Gobain and Party A, both highly credible strategic bidders, positioned GCP and its advisors to negotiate favorable terms and conditions for the proposed Merger in the interests of GCP and its stockholders;

 

●

the belief of the Board, based upon arms’ length negotiations, including the Board’s multiple requests that Parent increase its proposed price per share and its responses thereto (as further described in the section titled “—Background of the Merger” on page 34 of this proxy statement), resulting in Parent’s submission of what Parent referred to as its “best and final” offer, that the price to be paid by Parent was the highest price per share that Parent was willing to pay for GCP;

 

●

the fact that the Merger Agreement was the product of arms’ length negotiations and contained terms and conditions that are, in the Board’s view, advisable and favorable to GCP and its stockholders, as well as the Board’s belief, based on these negotiations, that these are the most favorable terms available to GCP and its stockholders on which Parent was willing to transact;

 

●

the business reputation, financial wherewithal and capabilities of Saint-Gobain, including its prior track record of successfully completing acquisitions;

 

●

the Board’s belief that Parent has access to the resources needed to complete the Merger, based on, among other factors, Saint-Gobain’s guarantee of the performance and payment in full of all obligations of Parent and Merger Sub pursuant to the terms of the Merger Agreement;

 

●

the financial analysis presented by RBCCM and the oral opinion of RBCCM, which was subsequently confirmed by delivery of a written opinion, dated December 5, 2021, to the Board, a copy of which is

 

48

attached to this proxy statement as Appendix C, to the effect that, as of the date of such opinion, and based on and subject to the assumptions, qualifications, limitations and other matters set forth therein, the Merger Consideration was fair, from a financial point of view, to holders of GCP common stock, as more fully described below in the section entitled “The Merger—Opinion of RBC Capital Markets, LLC”;

 

●

the likelihood that the Merger will be consummated, based upon, among other things, the limited number of conditions to the Merger, Parent’s ability to pay the Merger Consideration in cash, without the requirement for third party debt financing, the likelihood of obtaining required regulatory approvals and contractual commitments by Parent and Merger Sub to use their best efforts (including, if necessary, through litigation or the sale, divestiture or disposition of assets) to obtain regulatory approval for the Merger under applicable competition laws; and

 

●

the other terms and conditions of the Merger Agreement, including the following related factors:

 

●

the customary nature of the representations, warranties and covenants of GCP in the Merger Agreement;

 

●

the ability of the Board, subject to certain limitations, to respond to a bona fide written acquisition proposal received from a third party following the date of the Merger Agreement and prior to obtaining the stockholder approval if the Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that the acquisition proposal constitutes or could reasonably be expected to lead to a superior proposal;

 

●

the ability of the Board, subject to certain limitations, to withdraw or modify its recommendation that stockholders vote in favor of adoption of the Merger Agreement in connection with the receipt of a superior proposal or the occurrence of an intervening event, and to terminate the Merger Agreement to accept a superior proposal and enter into a definitive agreement with respect to such superior proposal, subject to payment to Parent of a termination fee;

 

●

the conclusion of the Board that the termination fee and the circumstances in which such termination fee may be payable are reasonable in light of the benefit of the Merger and would not be a significant impediment to third parties interested in making an acquisition proposal;

 

●

the fact that Parent has agreed to use its best efforts to obtain regulatory approvals, including, if necessary, through litigation or the sale, divestiture or disposition of assets to resolve, avoid or eliminate each and every impediment under any applicable competition and foreign investment law;

 

●

Parent’s ability to pay the Merger Consideration in cash, without the requirement for third party debt financing;

 

●

the fact that Saint-Gobain has guaranteed the performance and payment in full of all obligations of Parent and Merger Sub pursuant to the terms of the Merger Agreement;

 

●

the fact that, pursuant to the Merger Agreement, GCP is entitled to specific performance and other equitable remedies to prevent breaches of the Merger Agreement and, under specified circumstances, may enforce Parent’s obligation to consummate the transactions, including the Merger, contemplated by the Merger Agreement;

 

●

the fact that the Outside Date (as it may be extended) under the Merger Agreement allows for sufficient time to complete the Merger; and

 

●

the availability of statutory appraisal rights to GCP stockholders who do not vote in favor of the adoption of the Merger Agreement and otherwise comply with all required procedures under the DGCL.

 

49

The Board also considered a variety of risks and other potentially negative factors with respect to the Merger Agreement and the Merger, including the following (which are not listed in any relative order of importance):

 

●

the restrictions in the Merger Agreement on our soliciting competing bids to acquire GCP following the date of the Merger Agreement;

 

●

the restrictions in the Merger Agreement on GCP’s ability to terminate the Merger Agreement or change its recommendation in connection with the receipt of a superior proposal, including the fact that the Board must (i) provide three business days’ written notice to Parent of its intention to effect a change of board recommendation or terminate the Merger Agreement in order to provide Parent with an opportunity to match a superior proposal; (ii) negotiate in good faith with Parent during such period, and the discouraging effect such restrictions may have on other potential bidders; and (iii) consider in good faith any adjustments and/or proposed amendments to the Merger Agreement (including a change to the price terms thereof) and other agreements contemplated thereby that were irrevocably proposed in writing by Parent no later than 11:59 p.m. (New York City time) on the last day of such three business day notice period;

 

●

the fact that, under certain circumstances in connection with the termination of the Merger Agreement (including if the Board changes its recommendation in light of a superior proposal or intervening event or if GCP terminates the Merger Agreement to accept a superior proposal), GCP will be required to pay Parent a termination fee of $71.0 million, and the potential effect of such termination fee to discourage other potential bidders from making an acquisition proposal for GCP;

 

●

the fact that, if the Merger is completed, GCP stockholders would not have the opportunity to participate in the future performance of our assets, earnings growth and appreciation of the value of GCP common stock;

 

●

the significant costs involved in connection with entering into and completing the Merger and the substantial time and effort of management required to complete the Merger and related disruptions to the operation of our business;

 

●

the risk that the conditions to the consummation of the Merger may not be satisfied and, as a result, the possibility that the Merger may not be completed in a timely manner or at all, even if the Merger Agreement is adopted by GCP’s stockholders;

 

●

the potential negative effects if the Merger is not consummated, including:

 

●

the trading price of GCP common stock could be adversely affected;

 

●

we will have incurred significant transaction and opportunity costs attempting to complete the Merger;

 

●

we could lose customers, suppliers, business partners and employees, including key executives, sales and other personnel;

 

●

our business may be subject to significant disruption and decline;

 

●

the market’s perceptions of our prospects could be adversely affected; and

 

●

our directors, officers and other employees will have expended considerable time and efforts to consummate the Merger;

 

●

the fact that any gain realized by GCP stockholders as a result of the Merger will generally be taxable for U.S. federal income tax purposes to those stockholders that are U.S. persons subject to taxation in the United States;

 

●

the restrictions in the Merger Agreement on the conduct of our business prior to the consummation of the Merger, which may delay or prevent us from undertaking business or other opportunities that may arise prior to completion of the Merger;

 

50

●

the potential distraction to our business from stockholder lawsuits in connection with the Merger; and

 

●

the fact that our executive officers and directors may have interests in the Merger that may be different from, or in addition to, those of GCP stockholders. See “—Interests of the Directors and Executive Officers of GCP in the Merger” on page 60 of this proxy statement.

After taking into account the factors set forth above, as well as others, the Board concluded that the potential benefits of the Merger to GCP’s stockholders outweighed the potentially negative factors associated with the Merger. Accordingly, the Board unanimously determined that the Merger Agreement and the Merger are advisable, fair to and in the best interests of GCP and its stockholders and recommends that the stockholders of GCP approve and adopt the Merger Agreement.

The foregoing discussion summarizes the material factors considered by the Board, but is not intended to be exhaustive. In light of the variety of factors considered in connection with its evaluation of the Merger, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. Moreover, each member of the Board applied his or her own business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination and recommendation. The Board based its recommendation on the totality of the information presented, including its discussions with GCP’s executive management and its financial advisors and outside legal counsel. This explanation of the reasoning of the Board and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in “Cautionary Statement Concerning Forward-Looking Statements” on page 30 of this proxy statement.

Opinion of RBC Capital Markets, LLC

On December 5, 2021, RBCCM rendered an oral opinion, which was subsequently confirmed by delivery of a written opinion, dated December 5, 2021, to the Board to the effect that, as of the date of such opinion, and based on and subject to the assumptions, qualifications, limitations and other matters set forth therein, the Merger Consideration was fair, from a financial point of view, to holders of GCP common stock. The full text of RBCCM’s written opinion dated December 5, 2021, is attached to this proxy statement as Appendix C and constitutes part of this proxy statement. RBCCM’s opinion was approved by RBCCM’s Fairness Opinion Committee. This summary of RBCCM’s opinion is qualified in its entirety by reference to the full text of the opinion. GCP urges holders of GCP common stock to read RBCCM’s opinion carefully in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations and qualifications of the review undertaken by RBCCM.

RBCCM’s advice (written or oral) and opinion were provided for the benefit, information and assistance of the Board (in its capacity as such) in connection with its evaluation of the Merger. RBCCM’s opinion did not address the underlying business decision of GCP to engage in the Merger or the relative merits of the Merger compared to any alternative business strategy or transaction that may be available to GCP or in which GCP might engage. RBCCM’s opinion does not constitute an opinion or recommendation to any holder of GCP common stock as to how such holder should vote or act with respect to the Merger or any proposal to be voted upon in connection with the Merger or otherwise.

RBCCM’s opinion addressed the fairness, from a financial point of view and as of the date thereof, of the Merger Consideration (to the extent expressly specified therein), without regard to individual circumstances of specific holders that may distinguish such holders or the securities of GCP held by such holders. RBCCM’s opinion did not in any way address any other terms, conditions, implications or other aspects of the Merger or the Merger Agreement, including, without limitation, the form or structure of the Merger, any voting agreements to be entered into by certain holders of GCP common stock in favor of Parent in connection with the Merger, or any

 

51

other agreement, arrangement or understanding entered into in connection with or contemplated by the Merger or otherwise. RBCCM did not express any opinion or view with respect to, and relied upon the assessments of GCP and its representatives regarding, legal, regulatory, tax, accounting and similar matters, as to which RBCCM understood that GCP obtained such advice as it deemed necessary from qualified professionals. In rendering its opinion, RBCCM did not express any view on, and its opinion did not address, the fairness of the amount or nature of the compensation (if any) or other consideration to any officers, directors or employees of any party, or class of such persons, relative to the Merger Consideration or otherwise. In connection with its engagement, RBCCM was not requested to, and did not, undertake a third-party solicitation process on GCP’s behalf with respect to the acquisition of all or a part of GCP.

In rendering its opinion, RBCCM assumed and relied upon the accuracy and completeness of all information that was reviewed by RBCCM, including all financial, legal, tax, accounting, operating and other information provided to, or discussed with RBCCM by, or on behalf of, GCP (including, without limitation, financial statements and related notes), and upon the assurances of the GCP’s management and other representatives of GCP that they were not aware of any information that had been omitted or that remained undisclosed to RBCCM that would have been meaningful in any material respects to RBCCM’s analyses or opinion. RBCCM did not assume responsibility for independently verifying and did not independently verify such information. RBCCM also assumed that the financial projections and other estimates and data that it was directed to utilize in its analyses were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of GCP’s management as to the future financial performance of GCP and the other matters covered thereby and RBCCM further assumed that the financial results reflected therein will be realized in the amounts and at the times projected. RBCCM expressed no opinion as to any such financial projections and other estimates and data or the assumptions upon which they were based. RBCCM assumed that there will be no developments with respect to any of the foregoing that would have an adverse effect on GCP or the Merger or that otherwise would be meaningful in any material respect to its analyses or opinion.

In connection with its opinion, RBCCM did not assume any responsibility to perform, and did not perform, an independent valuation or appraisal of any of the assets or liabilities (contingent, off-balance sheet, accrued, derivative or otherwise) of or relating to GCP or any other entity and RBCCM was not furnished with any such valuations or appraisals. RBCCM did not assume any obligation to conduct, and did not conduct, any physical inspection of the property or facilities of GCP or any other entity. RBCCM did not investigate, and made no assumption regarding, any litigation or other claims affecting GCP or any other entity. RBCCM did not evaluate the solvency or fair value of GCP or any other entity under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. RBCCM assumed that the Merger will be consummated in accordance with the terms of the Merger Agreement and in compliance with all applicable laws, documents and other requirements, without waiver, modification or amendment of any material term, condition or agreement, and that, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers and agreements for the Merger, no delay, limitation, restriction or condition will be imposed or occur, including any divestiture or other requirements, that would have an adverse effect on GCP or the Merger or that otherwise would be meaningful in any material respect to its analyses or opinion. In addition, RBCCM assumed that the final executed Merger Agreement would not differ, in any material respect that would be meaningful to its analyses or opinion, from the draft that it reviewed.

RBCCM’s opinion speaks only as of the date thereof, is based on the conditions as they existed and information supplied or reviewed as of the date thereof, and is without regard to any market, economic, financial, legal or other circumstances or event of any kind or nature which may exist or occur or may have existed or occurred after such date. RBCCM did not undertake any obligation to update, revise or reaffirm its opinion for events occurring after the date thereof. As the Board was aware, the credit, financial and stock markets, and the industries in which GCP operates, have experienced and continue to experience volatility and RBCCM expressed no opinion or view as to any potential effects of such volatility on GCP (or its business) or the Merger.

 

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For purposes of rendering its opinion, RBCCM undertook such review, inquiries and analyses as it deemed necessary or appropriate under the circumstances, including the following:

 

●

RBCCM reviewed the financial terms of a draft of the Merger Agreement;

 

●

RBCCM reviewed certain publicly available financial and other information, and certain historical operating data, relating to GCP made available to it from published sources and internal records of GCP;

 

●

RBCCM reviewed the Management Projections (as defined below under “—Certain Financial Projections”) and other estimates and data relating to GCP, prepared by GCP’s management, which projections and other estimates and data RBCCM was directed to utilize for purposes of its analyses and opinion;

 

●

RBCCM conducted discussions with members of the senior management of GCP relating to the business, prospects and financial outlook of GCP;

 

●

RBCCM reviewed the reported prices and trading activity for GCP common stock;

 

●

RBCCM compared certain financial metrics of GCP with those of selected publicly traded companies in lines of businesses that it considered generally relevant in evaluating GCP;

 

●

RBCCM compared certain financial terms of the Merger with those of selected precedent transactions that it considered generally relevant in evaluating the Merger; and

 

●

RBCCM considered other information and performed other studies and analyses as it deemed appropriate.

Set forth below is a summary of the material financial analyses performed by RBCCM in connection with rendering its opinion, as delivered to the Board in connection with its meeting on December 5, 2021. The order of analyses described does not represent relative importance or weight given to those analyses by RBCCM. Some of the summaries of the financial analyses include information presented in tabular format. To fully understand the summary of the analyses used by RBCCM, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analysis.

For purposes of its analyses, RBCCM reviewed a number of financial and operating metrics, using certain time periods, including:

 

●

“Enterprise Value”—the value as of a specified date of the relevant company’s outstanding equity securities (taking into account outstanding in-the-money options and other in-the-money securities convertible, exercisable or exchangeable into or for equity securities of the company), plus the amounts of its net debt (the amount of its outstanding indebtedness and out-of-the-money convertible and non-convertible preferred stock, less the amount of cash and cash equivalents on its balance sheet) and non-controlling interests, less the amount of investments in unconsolidated affiliates; and

 

●

“EBITDA”—the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period.

Unless the context indicates otherwise, the analyses performed below were calculated using (i) the closing prices of (a) GCP common stock as of November 30, 2021, the day prior to press reports of the potential acquisition of GCP (the “GCP Unaffected Stock Price”) and (b) the common equity of the selected U.S. public companies in the specialty and envelope building products (“S&E Building Products”) and construction chemicals (“Construction Chemicals”) sectors as of December 3, 2021 and (ii) historical balance sheet data for the selected companies and GCP based on publicly available information for each company as of December 3, 2021. Per share amounts for GCP were based on diluted shares outstanding calculated using the treasury stock method and GCP’s securities outstanding as of December 2, 2021, as set forth in a draft of the Merger Agreement. Implied equity value per share reference ranges for GCP described below were rounded to the nearest $0.25.

 

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Selected Companies Analysis. RBCCM reviewed certain financial and operating information and implied trading multiples for selected publicly traded companies in the S&E Building Products and Construction Chemicals sectors as compared to the corresponding information and implied trading multiples for GCP. The relevant publicly traded companies were selected based upon RBCCM’s professional judgment and experience as to companies with operational and financial characteristics similar to those of GCP. In this analysis, RBCCM compared, among other things, multiples of implied Enterprise Value to estimates of EBITDA for each of calendar years 2021 (“2021E”) and 2022 (“2022E”), which estimates for the selected companies and GCP were based on mean consensus Wall Street analyst estimates (such mean consensus estimates, “Wall Street research”), available as of December 3, 2021.

The results of this analysis are summarized in the following table:

 

		Enterprise Value / EBITDA
Selected Publicly Companies		2021E				2022E
Specialty and Envelope Building Products
Trex Company, Inc.			42.9x				35.2x
The AZEK Company Inc.			22.2x				18.7x
Advanced Drainage Systems, Inc.			19.6x				15.5x
Carlisle Companies Incorporated			16.1x				14.1x
Armstrong World Industries, Inc.			15.2x				13.2x
Cornerstone Building Brands, Inc.			6.5x				6.0x
Owens Corning			5.9x				5.7x
Mean			18.3x				15.5x
Median			16.1x				14.1x
Construction Chemicals
RPM International Inc.			17.2x				14.8x
H.B. Fuller Company			12.5x				11.2x
Mean			14.9x				13.0x
Median			14.9x				13.0x
Overall Mean			15.8x				13.4x
Overall Median			16.1x				14.1x
GCP (based on GCP Unaffected Stock Price)			12.3x				9.7x

Based on the foregoing, RBCCM selected Enterprise Value reference range multiples of 13.0x—17.0x 2021E EBITDA and 11.5x—14.5x 2022E EBITDA. RBCCM applied such multiple ranges to 2021E Adjusted EBITDA (as such term is described below under “—Certain Financial Projections”) and 2022E Adjusted EBITDA for GCP (based on the Management Projections), in order to derive implied Enterprise Value reference ranges. RBCCM then derived implied equity value per share reference ranges using the balance sheet and diluted share information described above. This analysis indicated the following implied equity value per share reference ranges for GCP common stock as compared to the GCP Unaffected Stock Price and the Merger Consideration:

 

Implied Equity Value Per Share Reference Range
2021E Adj. EBITDA		2022E Adj. EBITDA		GCP Unaffected Stock Price		Merger Consideration
$25.50—$32.50		$27.00—$33.50		$23.34		$32.00

Selected Precedent Transactions Analysis. RBCCM reviewed certain implied transaction multiples for seventeen (17) transactions involving target companies in the S&E Building Products and Construction Chemicals sectors since the beginning of 2017. The relevant precedent transactions were selected based upon RBCCM’s professional judgment and experience as to target companies with operational and financial characteristics similar to those of GCP. Financial and operating data for each target company in the selected transactions were calculated as of the announcement date of the applicable transaction based, in part, on the implied purchase prices announced on such date for the selected transactions, and otherwise based on publicly

 

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available information for each target company as of the most recent quarter prior to the announcement of the applicable transaction for which such information was available or as otherwise subsequently publicly disclosed by the applicable transaction parties. Accordingly, this information may not reflect current or future market conditions.

In this analysis, RBCCM compared, among other things, multiples of implied Enterprise Value to the EBITDA of the target company for the latest twelve month period (“LTM”) for which financial information had been publicly announced prior to the announcement of the applicable transaction. The results of this analysis are summarized in the following table:

 

Announcement Date		Acquiror		Target		EV/LTM EBITDA
September 2021		Sika AG		MBCC Group		12.5x
August 2021		Arkema Group SA		Ashland Global Holdings (Performance Adhesives Unit)		15.0x(1)
July 2021		Carlisle Companies Incorporated		Henry Company LLC		13.2x
June 2021		Westlake Chemical Corporation		Boral Limited (North American Building Products business)		10.0x-11.0x
May 2021		Saint-Gobain		CHRYSO SAS		12.0x
February 2021		PPG Industries		Tikkurila Oyj		18.0x
January 2021		LafargeHolcim Ltd.		Firestone Building Products Company, LLC		12.6x
December 2019		Huntsman Corporation		Icynene-Lapolla		10.0x
November 2019		Saint-Gobain		Continental Building Products, Inc.		11.0x
August 2019		Advanced Drainage Systems, Inc.		Infiltrator Water Technologies, LLC		10.7x
January 2019		Sika AG		ParexGroup SA		12.8x
July 2018		NCI Building Systems, Inc.		Ply Gem Parent LLC		10.9x
June 2018		Gebrueder Knauf Verwaltungsgesellschaft KG		USG Corporation		11.6x
March 2018		Huntsman Corporation		Demilec USA, Inc.		11.5x
January 2018		Clayton, Dubilier & Rice, LLC		Ply Gem Holdings, Inc.		10.2x
October 2017		Owens Corning		Paroc Group Oy		10.5x
October 2017		Carlisle Companies Incorporated		Accella Performance Materials, Inc.		11.5x
Median						11.5x

 

(1)	Based on publicly disclosed 2021E estimates.

 

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Based on the foregoing, RBCCM selected Enterprise Value reference range multiples of 12.0x—15.0x LTM EBITDA. RBCCM applied such multiple range to 2021E Adjusted EBITDA for GCP (based on the Management Projections), in order to derive an implied Enterprise Value reference range. RBCCM then derived an implied equity value per share reference range using the balance sheet and diluted share information described above. This analysis indicated the following implied equity value per share reference range for GCP common stock as compared to the GCP Unaffected Stock Price and the Merger Consideration:

 

Implied Equity Value Per Share Reference Range		GCP Unaffected Stock Price		Merger Consideration
$23.50—$29.00		$23.34		$32.00

Discounted Cash Flow Analysis. RBCCM performed a discounted cash flow analysis of GCP by calculating the estimated net present value of the after-tax free cash flows of GCP as of December 31, 2021, based on the Management Projections.

RBCCM performed the discounted cash flow analysis using (i) discount rates ranging from 10.5%—12.5% based on an estimated weighted average cost of capital of GCP, using the capital asset pricing model and (ii) a terminal value at the end of the forecast period, using terminal multiples ranging from 11.0x—13.0x estimated calendar year 2025 Adjusted EBITDA, which estimated Adjusted EBITDA was the terminal year Adjusted EBITDA for GCP (based on the Management Projections), in order to derive an implied Enterprise Value reference range. RBCCM then derived an implied equity value per share reference range using estimated net debt and non-controlling interests as of December 31, 2021 and diluted share information described above. The discounted cash flow analysis indicated the following implied equity value per share reference range for GCP common stock as compared to the GCP Unaffected Stock Price and the Merger Consideration:

 

Implied Equity Value Per Share Reference Range		GCP Unaffected Stock Price		Merger Consideration
$27.00—$32.75		$23.34		$32.00

Other Information

RBCCM also noted for the Board the following additional analysis that was not considered part of RBCCM’s financial analyses with respect to its opinion but was referenced for informational purposes:

Trading Range Analysis for GCP. RBCCM reviewed certain historical closing prices for GCP common stock during the 52-week period ended November 30, 2021, which reflected the following historical stock price information for GCP common stock as compared to the one Wall Street research analyst report available to RBCCM (the “Analyst Price Target”), the GCP Unaffected Stock Price and the Merger Consideration:

 

Trading Period Ended November 30, 2021		Stock Price
52-Week High		$	27.78
52-Week Low		$	20.76
Analyst Price Target		$	24.00
GCP Unaffected Stock Price		$	23.34
Merger Consideration		$	32.00

Overview of Analyses; Other Considerations

No single company or transaction used in the above analyses as a comparison was identical to GCP or the Merger, and an evaluation of the results of those analyses is not entirely mathematical. Rather, the analyses involved complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies, businesses or transactions analyzed.

 

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The preparation of a fairness opinion is a complex process that involves the application of subjective business judgment in determining the most appropriate and relevant methods of financial analysis and the application of those methods to particular circumstances. Several analytical methodologies were used by RBCCM, and no one method of analysis should be regarded as critical to the overall conclusion reached. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques. The overall conclusions of RBCCM were based on all the analyses and factors presented herein taken as a whole and also on application of RBCCM’s own experience and judgment. Such conclusions may involve significant elements of subjective judgment and qualitative analysis. RBCCM therefore believes that its analyses must be considered as a whole and that selecting portions of the analyses and the factors considered, without considering all factors and analyses, could create an incomplete or misleading view of the processes underlying its opinion.

RBCCM, as part of its investment banking services, is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, corporate restructurings, underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. RBCCM was selected to advise GCP with respect to the Merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with GCP and the industries in which it operates. In the ordinary course of business, RBCCM and/or certain of its affiliates may act as a market maker and broker in the publicly traded securities of GCP, Saint-Gobain and/or other entities involved in the Merger, or their respective affiliates, and receive customary compensation in connection therewith, and may also actively trade securities of GCP, Saint-Gobain and/or other entities involved in the Merger, or their respective affiliates, for its or its affiliates’ own account or for the account of customers and, accordingly, RBCCM and its affiliates may hold a long or short position in such securities. RBCCM and certain of its affiliates in the past have provided, currently are providing or in the future may provide, investment banking, commercial banking and financial advisory services to GCP, Saint-Gobain and certain of their respective affiliates unrelated to the Merger, including having acted as a lender under certain credit facilities of Saint-Gobain and its affiliates, for which services RBCCM and its affiliates have received and expect to receive customary compensation. Aggregate fees received by RBCCM and its affiliates for all investment banking, commercial banking and financial advisory services, since November 1, 2019, from Saint-Gobain and certain of its affiliates is less than $1.5 million.

Under its engagement agreement with GCP, RBCCM became entitled to a fee of $1.0 million upon the delivery of its opinion in connection with the Merger, without regard to whether such opinion was accepted or the Merger is consummated. If GCP consummates the Merger, RBCCM will receive an additional transaction fee currently estimated to be approximately $13.5 million paid upon the closing of the Merger, against which the fee RBCCM received for delivery of its opinion will be credited. GCP has also agreed to indemnify RBCCM for certain liabilities that may arise out of its engagement, and to reimburse certain out-of-pocket expenses incurred by RBCCM in performing its services. The terms of RBCCM’s engagement letter were negotiated at arm’s-length between GCP and RBCCM, and the Board was aware of this fee arrangement at the time it reviewed and approved the Merger Agreement.

Certain Financial Projections

GCP does not, as a matter of course, publicly disclose internal projections of its future financial performance, revenue, earnings, EBITDA, financial condition or other results due to, among other reasons, the uncertainty of the underlying assumptions and estimates. In connection with GCP’s evaluation of a possible transaction, GCP management prepared certain non-public, unaudited, stand-alone financial projections (the “Management Projections”). The Management Projections were furnished to the Board and reviewed by the Board at its meetings held on November 1, 2021, November 22, 2021 and December 3, 2021, in connection with the Board’s review of the proposed transaction with Saint-Gobain, and at its meeting held on December 3, 2021, the Board authorized GCP’s financial advisor to use the Management Projections for purposes of performing its financial analyses summarized under “—Opinion of RBC Capital Markets, LLC” on page 51 of this proxy

 

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statement. The Management Projections reflect the following key considerations and assumptions as to the future financial performance of GCP:

 

●

financial results and business performance for the first three quarters of fiscal year 2021;

 

●

the outlook for the industries and markets that GCP serves and the increased competitive environment, particularly as it relates to growth in global construction; and

 

●

GCP’s estimated share in its Specialty Construction Chemicals (including VERIFI®) segment and Specialty Building Materials segment, as well as pricing, productivity and inflation trends.

The Management Projections are included in the table below. The inclusion of this information should not be regarded as an indication that GCP, its financial advisors or any of their respective representatives or any other recipient of this information considered, or now considers, the Management Projections to be necessarily predictive of future results. GCP’s management advised the Board that the Management Projections represent GCP’s management’s best estimates of the future financial performance of GCP and its business as currently configured as a stand-alone publicly listed company.

The following table summarizes the Management Projections as described above.

Management Projections

 

		Year Ending December 31
		2021F				2022F				2023F				2024F				2025F
		($ in millions)
Net Revenue		$	960			$	1,020			$	1,063			$	1,107			$	1,152
Adjusted Gross Profit		$	345			$	374			$	402			$	426			$	450
Adjusted EBIT(1)		$	88			$	114			$	137			$	154			$	172
Adjusted EBITDA(2)		$	134			$	162			$	186			$	204			$	223
Capital Expenditures		$	37			$	50			$	48			$	50			$	52
Unlevered Free Cash Flow(3)		$	58			$	82			$	96			$	108			$	120

 

(1)

Adjusted EBIT is defined as net income (loss) from continuing operations attributable to GCP shareholders adjusted for: (i) gains and losses on sales of businesses, product lines and certain other investments; (ii) currency and other financial losses in Venezuela; (iii) costs related to legacy product, environmental and other claims; (iv) restructuring and repositioning expenses, and asset write offs; (v) defined benefit plan costs other than service and interest costs, expected returns on plan assets and amortization of prior service costs/credits; (vi) third-party and other acquisition-related costs; (vii) other financing costs associated with the modification or extinguishment of debt; (viii) amortization of acquired inventory fair value adjustments; (ix) tax indemnification adjustments; (x) interest income, interest expense and related financing costs; (xi) income taxes; (xii) shareholder activism and other related costs; (xiii) gain on sale of corporate headquarters, net of related costs; and (xiv) certain other items that are not representative of underlying trends.

 

(2)	Adjusted EBITDA is defined as Adjusted EBIT adjusted for depreciation and amortization.

 

(3)	Unlevered Free Cash Flow was calculated by RBCCM, for purposes of its discounted cash flow analysis, as tax-adjusted EBIT plus depreciation and amortization less capital expenditures and change in net working capital based, in each case, on assumptions provided by GCP management.

The Management Projections also were provided to Saint-Gobain and Party A in connection with their respective due diligence reviews of GCP and the proposed transaction, except that, for fiscal year 2021, the projections provided to Saint-Gobain and Party A were adjusted to account for out-of-period impacts and supply chain disruption on revenues. After giving effect to these adjustments, the financial projections provided to Saint-Gobain and Party A showed, for fiscal year 2021 (in millions), Net Revenue of $965, Adjusted Gross Profit of $347, Adjusted EBIT of $93 and Adjusted EBITDA of $139. Unlevered Free Cash Flow calculated by RBCCM was not provided to Saint-Gobain and Party A.

 

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GCP’s ability to achieve the results set forth in the Management Projections are expressly dependent upon certain assumptions, including with respect to broad trends in the construction chemicals and building materials industries and the continued impact of pandemic restrictions, cost inflation and supply chain disruptions. The Management Projections were not prepared with a view to public disclosure and are included herein only because such information was made available as described above. The Management Projections were not prepared with a view to comply with accounting principles generally accepted in the United States (“GAAP”), the published guidelines of the SEC regarding projections and forward-looking statements or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Furthermore, PricewaterhouseCoopers LLP, our independent registered public accountant, has not examined, reviewed, compiled or otherwise applied procedures to the Management Projections and, accordingly, assumes no responsibility for them and expresses no opinion on them. The Management Projections included herein have been prepared by, and are the responsibility of, GCP’s management.

Although a summary of the Management Projections is presented with numerical specificity, the Management Projections reflect numerous variables, assumptions and estimates as to future events made by our management that our management believed were reasonable at the time the Management Projections were prepared, taking into account the relevant information available to the Company’s management at the time the Management Projections were prepared. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. Important factors that may cause actual results to deviate from the Management Projections include general economic conditions, results or financial condition, industry performance, accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures, the continued impact of pandemic restrictions, cost inflation and supply chain disruptions, accuracy of certain industry forecasts prepared by third parties, strengthening of the U.S. dollar and other foreign currency exchange rate fluctuations impacting our results, our contingent liabilities and tax matters causing us to incur losses or costs, any inability to protect our intellectual property rights adversely affecting our business or our competitive position, costs or adverse effects on our business, reputation or results from governmental regulations, failure to hire and retain employees, results or financial condition, and changes in tax laws. In addition, the Management Projections do not give effect to the Merger. As a result, there can be no assurance that the Management Projections will be realized, and actual results may be materially better or worse than those contained in the Management Projections. Since the Management Projections cover multiple years, that information by its nature becomes less predictive with each successive year. The inclusion of this information should not be regarded as an indication that the Board, GCP, our financial advisor or Saint-Gobain, or any of their respective representatives and affiliates, or any other recipient of this information considered, or now considers, the Management Projections to be material information of GCP or that actual future results will necessarily reflect the Management Projections, and the Management Projections should not be relied upon as such. The summary of the Management Projections is not included herein to induce any stockholder to vote in favor of the Merger Proposal or any of the other proposals to be voted on at the special meeting or to influence any stockholder to make any investment decision with respect to the Merger, including whether or not to seek appraisal rights with respect to shares of GCP common stock.

The Management Projections should be evaluated, if at all, in conjunction with the historical financial statements, risk factors and other information regarding GCP contained in our public filings with the SEC. See “Where You Can Find More Information” on page 119 of this proxy statement.

The Management Projections are forward-looking statements. For information on factors that may cause GCP’s future results to materially vary, see “Cautionary Statement Concerning Forward-Looking Statements” on page 30 of this proxy statement.

Except to the extent required by applicable federal securities laws, we do not intend, and expressly disclaim any responsibility, to update or otherwise revise the Management Projections to reflect the occurrence of future events or changes in general economic or industry conditions, even if the assumptions underlying the Management Projections are shown to be in error. By including in this proxy statement a summary of certain

 

59

financial projections, neither GCP nor any of its representatives or advisors, nor Saint-Gobain or any of its representatives and affiliates, makes any representation to any person regarding the ultimate performance of GCP compared to the information contained in such financial projections and should not be read to do so.

In light of the foregoing factors and the uncertainties inherent in the Management Projections, stockholders are cautioned not to unduly rely on the Management Projections included herein.

Certain of the measures included in the Management Projections may be considered non-GAAP financial measures. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP and non-GAAP financial measures as used by GCP may not be comparable to similarly titled amounts used by other companies.

Interests of the Directors and Executive Officers of GCP in the Merger

When considering the recommendation of the Board that you vote “FOR” the Merger Proposal, you should be aware that certain of our directors and executive officers may have interests in the Merger that may be different from, or in addition to, your interests as a stockholder generally. The Board was aware of these interests in, among other matters, approving the Merger Agreement and the Merger and in recommending that the Merger Agreement be adopted by the stockholders of GCP. See “—Background of the Merger” and “—Recommendation of Our Board of Directors and Reasons for the Merger” on pages 34 and 47 of this proxy statement, respectively. You should take these interests into account in deciding whether to vote “FOR” the approval of the Merger Agreement.

These interests are described in more detail below, and certain of them, including the compensation that may become payable in connection with the Merger to Messrs. Bates, Merrill, Holland, Thompson, and Van Lent, who constitute our named executive officers, are subject to a non-binding, advisory vote of the stockholders of GCP and are quantified in the narrative below and in “Proposal 3: Advisory Vote on Merger-Related Named Executive Officer Compensation” on page 112 of this proxy statement. Messrs. Holland, Thompson and Van Lent are no longer employed by the Company. The dates used below to quantify these interests have been selected for illustrative purposes only and do not necessarily reflect the dates on which certain events will occur.

Treatment of Equity and Equity-Based Awards

Under the Merger Agreement, the equity-based awards held by GCP’s directors and executive officers under the GCP Applied Technologies Inc. Equity and Incentive Plan, as amended and restated on July 29, 2020 (the “Equity and Incentive Plan”) and the GCP Applied Technologies Inc. 2020 Inducement Plan (the “Inducement Plan”) will be treated as follows:

Company Options

At the Effective Time, each Company Option, whether vested or unvested, that is outstanding immediately prior to the Effective Time, shall automatically and without any required action on the part of the holder or GCP be cancelled and be converted into the right to receive (without interest) an amount in cash equal to the product of (x) the total number of shares of GCP common stock underlying the Company Option, multiplied by (y) the excess, if any, of the Merger Consideration over the exercise price of such Company Option; provided, that any such Company Option with respect to which the exercise price subject thereto is equal to or greater than the Merger Consideration shall be canceled for no consideration.

Restricted Stock and Restricted Stock Units

At the Effective Time, each outstanding award of Company Restricted Stock and each outstanding award of Company RSUs that in each case at such time is vested (including restricted stock units under the Company’s Non-Employee Directors’ Deferred Compensation Program) or subject solely to service-based vesting conditions shall be fully vested and shall, automatically and without any required action on the part of the holder thereof or the Company, be cancelled and be converted into the right to receive (without interest) an amount in cash equal

 

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to (x) the total number of shares of GCP common stock underlying such award of Company Restricted Stock or Company RSUs, as applicable, multiplied by (y) the Merger Consideration.

Performance Based Stock Units

At the Effective Time, each outstanding award of Company PBUs that at such time is subject to performance-based vesting conditions shall become vested as to the greater of the number of Shares subject to such Company PBUs that would vest based on (1) the target level of achievement and (2) the Company’s actual level of achievement of the performance goals set forth in the applicable award agreement as of the Effective Time, as determined by the Board or its Compensation Committee prior to the completion of the Merger, and shall, after giving effect to such vesting, automatically and without any required action on the part of the holder thereof or the Company, be cancelled and be converted into the right to receive (without interest) an amount in cash equal to (x) the number of vested Shares underlying such Company PBUs, multiplied by (y) the Merger Consideration. Any outstanding Company PBUs (or portion thereof) that are not vested as of immediately prior to the Effective Time shall be canceled for no consideration.

The following table sets forth the number of outstanding Company Options, Company RSUs and Company PBUs that were awarded to and held by our executive officers and non-employee directors as of the Record Date under our Equity and Incentive Plan and Inducement Plan and the value of these awards in the Merger. The foregoing equity awards will be treated in the same manner as outstanding equity awards generally and described above. In addition, any vested shares of GCP common stock held by our directors and executive officers will be treated in the same manner as outstanding shares of GCP common stock held by other GCP stockholders entitled to receive the Merger Consideration.

As previously disclosed in a Form 8-K filed with the SEC on December 23, 2021, Messrs. Bates and Merrill each received accelerated payment in 2021 of earned annual bonuses for fiscal year 2021 and accelerated vesting of certain equity awards to take advantage of tax planning opportunities that the Company believes could benefit both the Company and the executives.

 

Name		Company Options (#)(1)				Company Options ($)(2)				Company RSUs (#)(3)				Company RSUs ($)(2)				Company PBUs (#)(4)(5)				Company PBUs ($)(2)				Total Value ($)
Executive Officers
Simon M. Bates			388,348	(6)			4,287,362				22,374				715,968				32,247				1,031,904				6,035,234
Craig Merrill			16,782				126,029				9,497				303,904				18,270				584,640				1,014,573
Sherry Mennenga			—				—				7,682				245,824				5,555				177,760				423,584
David Campos			—				—				9,801				313,632				4,903				156,896				470,528
Michael W. Valente			—				—				11,664				373,248				9,619				307,808				681,056
James Waddell			—				—				1,588				50,816				2,289				73,248				124,064
James E. Thompson(7)			14,089				34,941				—				—				4,829				154,528				189,469
Kevin R. Holland(8)			27,871				156,597				—				—				3,715				118,880				275,477
Boudewijn Van Lent(9)			4,405				6,916				—				—				5,262				168,384				175,300
Non-Employee Directors
Peter A. Feld			—				—				5,013				160,416				—				—				160,416
Janet P. Giesselman			—				—				1,455				46,560				—				—				46,560
Clay Kiefaber			—				—				—				—				—				—				—
Armand F. Lauzon			—				—				—				—				—				—				—
Marran H. Ogilvie			—				—				—				—				—				—				—
Andrew M. Ross			—				—				—				—				—				—				—
Linda J. Welty			—				—				—				—				—				—				—
Robert H. Yanker			—				—				2,830				90,560				—				—				90,560
Kevin Brown(10)			—				—				—				—				—				—				—

 

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(1)

Other than the Bates Inducement Option (as defined below in footnote 6), options generally vest ratably over three years, with one-third of the option vesting on the first, second and third anniversaries of the grant date. All outstanding options have a 10 year term, except for the Bates Inducement Option, which has a five year term. Stock options with an exercise price in excess of the Merger Consideration are excluded.

 

(2)	The value of each Company option is based on the Merger Consideration less the exercise price of the option. The value of each PBU and RSU is based on the Merger Consideration.

 

(3)

Consists of Company RSUs granted pursuant to our Equity and Incentive Plan. The amounts reported primarily include Company RSUs which vest over a three year period. Certain Company RSUs were designated as sign-on awards used for purposes of attracting key employees, the majority of which vest after two years from the date of grant. With respect to non-employee directors, represents retainer fees paid in the form of Company RSUs, under our Non-Employee Directors’ Deferred Compensation Program.

 

(4)

Consists of Company PBUs granted pursuant to our Equity and Incentive Plan. The amounts reported include Company PBU awards granted with performance conditions and either with or without market-based vesting conditions. The performance criteria for PBUs granted in 2021 are tied to the Company’s achievement of each of the following metrics: free cash flow, adjusted earnings before interest, tax, depreciation and amortization metric, and relative total shareholder return, with each metric measured over a two year period. The performance criteria for PBUs granted in 2020 and 2019 are tied to the Company’s achievement of adjusted diluted earnings per share and relative total shareholder return, measured over a three year period. PBUs granted in 2019 have been excluded from the table as the Company expects the performance criteria for these awards will not be attained and they will be forfeited in accordance with their terms prior to the closing of the Merger.

 

(5)

In the case of Company PBUs, the amount reported assumes payout based on the target level of achievement as set forth in the applicable award agreement. At the effective time of the Merger, each outstanding award of Company PBUs that is subject to performance-based vesting conditions will become vested as to the greater of the number of shares subject to such Company PBUs that would vest based on (x) the target level of achievement and (y) the Company’s actual level of achievement.

 

(6)

Represents award of an option to purchase 388,348 shares of GCP common stock issued to Mr. Bates under the Inducement Plan in connection with the start of his employment as Chief Executive Officer of the Company (the “Bates Inducement Option”). The Bates Inducement Option is subject to time- and performance-based vesting terms, with performance tied to achievement of pre-determined GCP stock price hurdles. At the effective time of the Merger, all Company Options, including the Bates Inducement Option, whether vested or unvested, will be canceled and converted into the right to receive the Merger Consideration described above.

 

(7)	Mr. Thompson ceased serving GCP as its Vice President, General Counsel & Secretary, effective January 29, 2021.

 

(8)	Mr. Holland ceased serving GCP as its Chief Human Resources Officer, effective January 15, 2021.

 

(9)	Mr. Van Lent ceased serving GCP as its Vice President, Global Head of Specialty Construction Chemical, effective May 31, 2021.

 

(10)	Mr. Brown passed away in January 2021.

Executive Severance Benefits

Employment Agreement with Mr. Bates

In connection with the commencement of his employment, the Company entered into an employment agreement with Mr. Bates, dated October 1, 2020 (the “Bates Employment Agreement”). The Bates Employment Agreement sets forth, among other things, Mr. Bates’ initial annual base salary and target bonus, the terms of his

 

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new hire equity awards (consisting of Company Restricted Stock and the Bates Inducement Option, each granted in October 2020) and his entitlement to severance benefits upon certain terminations of employment. Mr. Bates’ new hire award of Company Restricted Stock provides for full vesting upon a change in control and, in the event of a change in control, the time-based vesting conditions of the Bates Inducement Option will be deemed to be satisfied; provided, that he remains employed through the date of a change in control. In addition, pursuant to its terms, the applicable portion of the shares underlying the Bates Inducement Option will vest upon a change in control if the per-share price to be paid in the change in control equals or exceeds the applicable share price target. Notwithstanding the foregoing, at the Effective Time, all Company Options including the Bates Inducement Option, whether vested or unvested, will be canceled and converted into the right to receive the Merger Consideration described above.

In the event of the involuntary termination of Mr. Bates’ employment by the Company without cause or by Mr. Bates for good reason, in each case outside of the Change in Control Period (as defined below), subject to his execution of a separation agreement, including a release of claims, Mr. Bates will receive (i) a severance payment equal to two times the sum of his annual base salary, (ii) the annual incentive compensation Mr. Bates would otherwise be entitled to receive based on Company and individual performance for such calendar year and (iii) a pro-rata portion of the annual incentive compensation Mr. Bates would otherwise be entitled to receive for such calendar year based on Company and individual performance.

If Mr. Bates is terminated as a result of death or disability, any equity awards subject solely to time-based vesting will become fully vested as of his applicable date of termination, and any equity awards subject to performance-based vesting conditions will remain eligible to be earned at the end of the applicable performance period based upon achievement of the pre-established performance metrics in accordance with the terms of the applicable award agreements and equity incentive plan of the Company. Any portion of such performance-based awards that is earned at the end of the performance period shall be immediately fully vested.

In the event of the involuntary termination of Mr. Bates’ employment by the Company without cause or by Mr. Bates for good reason, in each case within 12 months following a Change in Control of the Company (the “Change in Control Period”), subject to the execution of a separation agreement, including a release of claims, Mr. Bates will receive (i) a severance payment equal to two times the sum of (A) his annual base salary and (B) his target annual incentive compensation, (ii) a pro-rated portion of his target annual incentive compensation for the year of termination, (iii) at his request, the same or substantially similar outplacement services as those generally offered to the Company’s executive officers, and (iv) on a pre-tax basis, the medical, dental and vision benefits substantially similar to those he received prior to termination for 18 months following termination.

As used in the Bates Employment Agreement:

 

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“Cause” means the Company’s reasonable, good faith determination that any of the following events has occurred without the Company’s consent (i) willful failure or refusal to perform, or continued non-performance of, material lawful responsibilities consistent the Mr. Bates’ position that have been requested by the GCP Board (other than by reason of his physical or mental illness, incapacity or disability); (ii) misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes; (iii) arrest, indictment, conviction or a plea of nolo contendere with respect to (A) any felony or (B) a misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iv) any misconduct by Mr. Bates, regardless of whether or not in the course of his employment, that would reasonably be expected to result in material injury or material reputational harm to the Company or any of its subsidiaries or affiliates if he were to continue to be employed in the same position; (v) a material breach by Mr. Bates of any of his continuing obligations under the Bates Employment Agreement, including any restrictive covenants; (vi) a material violation by Mr. Bates of any of the Company’s written employment policies; or (vii) Mr. Bates’ failure to reasonably cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after

 

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being instructed by the Company to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

 

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“Change in Control of the Company” means (i) the sale of all or substantially all of assets of the Company on a consolidated basis to an unrelated person or entity; (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power and outstanding stock immediately prior to such transaction do not own a majority of the outstanding voting power and outstanding stock or other equity interests of the resulting or successor entity (or its ultimate parent, if applicable) immediately upon completion of such transaction; (iii) the Company determined that any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, has become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the outstanding common stock of the Company; or (iv) any other transaction in which the owners of the Company’s outstanding voting power immediately prior to such transaction do not own at least a majority of the outstanding voting power of the Company or any successor entity immediately upon completion of the transaction other than as a result of the acquisition of securities directly from the Company. The Merger Agreement will constitute a Change in Control of the Company under the Bates Employment Agreement.

 

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“Good Reason” means the occurrence of any of the following conditions without the executive’s written consent (each, a “Good Reason Condition”); provided, that Mr. Bates has completed all steps of the Good Reason Process (defined below) following the occurrence of any of the following events (i) material diminution in Mr. Bates’ responsibilities, authority or duties or an adverse change in Mr. Bates’ position such that he is no longer the most senior executive of the Company; (ii) an adverse change in Mr. Bates’ reporting responsibility; (iii) a material change in the principal business location (but not including any relocation mutually agreed by the Company and Mr. Bates); (iv) a material diminution in the executive’s base salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; or (v) a material breach of the Bates Employment Agreement by the Company. The “Good Reason Process” consists of the following steps: (A) the executive reasonably determines in good faith that a Good Reason Condition has occurred; (B) the executive notifies the Company in writing of the first occurrence of the Good Reason Condition within 60 days of the first occurrence of such condition; (C) the executive cooperates in good faith with the Company’s efforts, for a period of not less than 30 days following such notice (the “Cure Period”), to remedy the Good Reason Condition; (D) notwithstanding such efforts, the Good Reason Condition continues to exist; and (E) the executive terminates his employment within 60 days after the end of the Cure Period. If the Company cures the Good Reason Condition during the Cure Period, Good Reason shall be deemed not to have occurred.

Executive Change in Control Severance Agreements with GCP

Messrs. Merrill, Campos, Waddell, and Valente and Ms. Mennenga have entered into Change in Control Agreements with the Company (the “Change in Control Agreements”), pursuant to which they are eligible for severance benefits in connection with a termination by the Company without “cause” or resignation by the executive for “good reason,” in each case, on or within 12 months following a “Change in Control” of the Company. Specifically, subject to the executive’s execution of a separation agreement and release within 60 days following such qualifying termination of employment, Messrs. Merrill, Campos, Waddell, and Valente and Ms. Mennenga are eligible to receive the following severance benefits:

 

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the executive’s total targeted annual incentive compensation award for the calendar year immediately preceding the year in which the termination of employment occurs, to the extent not previously paid;

 

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a pro-rata portion of the executive’s target annual incentive compensation award for the year in which the termination of employment occurs;

 

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outplacement services that are the same as, or substantially similar to, outplacement services generally offered to other officers of the Company;

 

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a single lump sum payment equal to one and a half times (one times for Messrs. Campos and Waddell and Ms. Mennenga) the sum of (A) the executive’s annual base salary as of the date immediately preceding such executive’s last day of employment plus (B) an amount equal to the executive’s total target annual incentive compensation for the calendar year in which the date of termination occurs; and

 

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for a 12-month period following the executive’s date of termination, the Company will provide medical, dental and vision benefits substantially similar to those the executive received under the Company’s benefit plans immediately prior to the executive’s termination of employment.

The Change in Control Agreements do not provide for any gross ups upon a change in control.

As used in the Change in Control Agreements:

 

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“Cause” means (i) conduct by the executive constituting a material act of misconduct in connection with the performance of executive’s duties, including, without limitation: (A) willful failure or refusal to perform material responsibilities that have been requested by the Board; (B) dishonesty to the Board with respect to any material matter; (C) misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes; (ii) the executive’s commission of acts satisfying the elements of (A) any felony or (B) misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (iii) any misconduct by the executive, regardless of whether or not in the course of the executive’s employment, that would reasonably be expected to result in material injury or reputational harm to GCP or its affiliates if the executive were to continue to be employed in the same position; (iv) continued non-performance by the executive of executive’s duties to GCP (other than by reason of executive’s physical or mental illness, incapacity or disability) which has continued for more than 30 days following written notice of such unsatisfactory performance or non-performance from the Board; (v) the executive’s breach of any agreement with the Company relating to confidential information, non-competition or non-solicitation; (vi) material violation by the executive of any of the Company’s written employment policies; or (vii) the executive’s failure to cooperate with a bona fide internal investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or produce documents or other materials in connection with such investigation.

 

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“Change in Control” has the same meaning as set forth in the Bates Employment Agreement.

 

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“Good Reason” means the occurrence after a Change in Control of the Company of any of the following conditions without the executive’s written consent (each, a “Good Reason Condition”); provided, that the executive has completed all steps of the Good Reason Process (defined below) following the occurrence of any of the following events: (i) a material diminution in the executive’s responsibilities, authority or duties; (ii) a material diminution in the executive’s base salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all of substantially all senior management employees of the Company; (iii) a material change in the geographic location at which the executive provides services to GCP, such that there is an increase of at least 30 miles of driving distance to such location from your principal residence as of such change; or (iv) a material breach of the Change in Control Agreement by the Company. The “Good Reason Process” consists of the same steps set forth in the Bates Employment Agreement.

 

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