Item
1.01 Entry into a Material Definitive Agreement.
On November 25, 2007, The Genlyte Group Incorporated, a Delaware corporation (“Company”), entered into an Agreement and Plan of Merger (“Merger Agreement”) with Philips Holding USA Inc., a Delaware corporation (“Parent”), and Golf Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”).
Under the terms of the Merger Agreement, Merger Sub will commence a tender offer (“Offer”) to purchase all of the Company’s outstanding shares of common stock, par value $0.01 per share, together with the associated preferred stock purchase rights pursuant to the Rights Agreement defined below (the “Shares”), at a purchase price of $95.50 per share in cash, less any required withholding taxes (“Offer Price”). The Offer is subject to customary closing conditions, including (i) the expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and certain other regulatory requirements under foreign laws, (ii) the tender of a majority of the number Shares based on the number of Shares and options then outstanding on a fully-diluted basis, (iii) the absence of certain legal impediments to the
consummation of the Offer, (iv) the accuracy of the representations and warranties of the Company in the Merger Agreement other than as would not (A) result in a material adverse effect or (B) in some limited cases, be material, and (v) the absence of a material adverse effect.
Upon successful completion of the Offer, Merger Sub will be merged with and into the Company, the separate corporate existence of the Merger Sub shall cease, and the Company will survive the Merger as a wholly owned subsidiary of Parent. The Merger is subject to certain conditions including (i) the absence of certain legal impediments and (ii) stockholder approval if such approval is required.
The parties have agreed that if, following completion of the Offer, Parent and Merger Sub own at least 90% of the Company’s outstanding Shares, pursuant to the Offer or otherwise, the Merger will be completed without a meeting of the Company’s stockholders pursuant to Delaware’s “short-form” merger statute.
In the Merger Agreement, the Company also granted Parent and Merger Sub, subject to certain conditions and limitations, an irrevocable option, to be exercised after completion of the Offer, to purchase the number of shares of common stock (“Top-Up Option Shares”) equal to the lowest number of shares that, when added to the number of shares owned by Parent, Merger Sub and their respective affiliates at the time of such exercise, constitute one Share more than the number of Shares necessary for Merger Sub to be merged into the Company pursuant to Delaware’s “short-form” merger statute, at a price per share equal to the Offer Price (the “Top-Up Option”). The Top-Up Option shall not be exercisable and shall terminate if (i) the issuance of the Top-Up Option Shares would require stockholder approval under the rules of the Nasdaq Global Market, (ii) the number
of Top-Up Option Shares would exceed the number of authorized but unissued Shares or (iii) after issuances of Shares pursuant to the Top-Up Option, it will be insufficient to allow Merger Sub to effect the “short form” merger. The Top-Up Option is intended to expedite the timing of the completion of the Merger by permitting the Merger to occur pursuant to Delaware’s short-form merger statute at a time when the approval of the Merger at a meeting of the Company’s stockholders would be assured because of Parent’s and Merger Sub’s ownership of a majority of shares of the outstanding common stock following completion of the Offer.
The Company has made customary representations, warranties and covenants in the Merger Agreement, including among others, covenants not to solicit proposals relating to the alternative business combination transactions or, subject to certain exceptions, not to enter into discussions concerning or provide information in connection with an alternative business combination transaction or not continue to make, or withdraw, the recommendations of the Company’s board.
The Merger Agreement also contains certain termination rights for both the Company and Parent and provides that, if the Merger Agreement is terminated under specified circumstances, the Company may be required to pay Parent a termination fee of $60 million and may also be required to reimburse Parent up to $6 million in expenses.
In connection with the transactions contemplated by the Merger Agreement, the Company and The Bank of New York, a New York banking corporation (the “Rights Agent”), will enter into an Amendment (the “Amendment”) to the Rights Agreement, dated as of September 13, 1999, by and between the Company and the Rights Agent (the “Rights Agreement”) to exempt the Merger Agreement, the Offer and the transactions contemplated thereby from the Rights Agreement and to terminate the Rights Agreement immediately prior to the completion of the Offer.
The foregoing summary of the Merger Agreement and the transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Merger Agreement attached as Exhibit 2.1, which is incorporated herein by reference. The Merger Agreement has been attached to provide investors with information regarding its terms. It is not
intended to provide any other factual information about the Company. Moreover, certain representations and warranties in the Merger Agreement were used for the purpose of allocating risk between the Company, Parent and Merger Sub, rather than establishing matters of fact. Accordingly, the representations and warranties in the Merger Agreement may not constitute the actual state of facts about the Company, Parent or Merger Sub.