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Item 1.01.
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Entry into a Material Definitive Agreement.
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Merger Agreement
On February 7, 2021, Cubic Corporation (the
“Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”)
with Atlas CC Acquisition Corp., a Delaware corporation (“Parent”), and Atlas Merger Sub Inc., a Delaware
corporation and a wholly owned subsidiary of Parent (“Sub”). The Merger Agreement and the consummation
of the transactions contemplated by the Merger Agreement have been unanimously approved by the Company’s board of directors
(the “Company Board”), and the Company Board has recommended that the stockholders of the Company vote
in favor of the approval of the Merger and the Merger Agreement.
The Merger. The Merger Agreement
provides for, among other things, the merger of Sub with and into the Company, on the terms and subject to the conditions set forth
in the Merger Agreement (the “Merger”), with the Company continuing as the surviving corporation in the
Merger. As a result of the Merger, the Company would become a wholly owned subsidiary of Parent.
The Merger Consideration. Pursuant
to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common
stock, without par value per share, of the Company (“Company Common Stock”) issued and outstanding immediately
prior to the Effective Time will be cancelled and automatically converted into the right to receive $70.00 in cash, without interest
thereon, subject to required tax withholding in accordance with the terms of the Merger Agreement (the “Merger Consideration”),
other than (i) shares that are held in the treasury of the Company, (ii) shares owned of record by the Company, (iii) shares owned
of record by Parent, Sub or any of their respective subsidiaries (other than, in each case of clauses (i)-(iii), shares held on
behalf of a third party) and (iv) shares held by stockholders of the Company who have not voted in favor of or consented to the
adoption of the Merger Agreement and who have properly demanded appraisal of such shares and complied in all respects with all
the provisions of the Delaware General Corporation Law concerning the right of holders of shares to require appraisal.
Treatment of Outstanding Equity Awards.
Pursuant to the terms of the Merger Agreement:
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Each outstanding award of restricted stock units (“RSUs”) with respect to Company Common Stock as
of the Effective Time (each award, an “RSU Award”), including each award of performance-based restricted
stock units, will be fully vested and cancelled, and each holder of a cancelled RSU Award will be entitled to receive a payment
in cash, without interest, equal to the product of (i) the number of RSUs subject to such RSU Award multiplied by (ii) the Merger
Consideration (the “RSU Payments”), less any required tax withholding. For purposes of calculating the
RSU Payments with respect an RSU Award that is subject to performance-based vesting conditions, the number of RSUs deemed to have
been earned shall be equal to the target number of RSUs subject to such RSU Award multiplied by the greater of (x) 100% and (y)
the total stockholder return multiplier applicable to such RSU Award (up to a maximum of 125% of the target number of RSUs), calculated
as of the closing date of the Merger (the “Closing Date”) and using the Closing Date as the applicable
measurement date, in each case in accordance with the applicable terms of such RSU Award in effect immediately prior to the Effective
Time.
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Each issued and outstanding share of Company Common Stock that has been issued as restricted stock as of the Effective Time
(each, a “Restricted Share”) shall be cancelled, and each holder of any such cancelled Restricted Share
shall be entitled to receive a payment in cash equal to the Merger Consideration, without interest and less any required tax withholding.
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Closing Conditions. The consummation
of the Merger is subject to the satisfaction or waiver of specified closing conditions, including (i) the affirmative vote in favor
of the adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Company Common Stock entitled
to vote thereon, (ii) the expiration or termination of any applicable waiting period (or extensions thereof) under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, (iii) certain regulatory consents or approvals having been obtained, or the applicable waiting
periods having expired or been terminated, with respect to certain foreign competition, merger control and investment laws, (iv)
the absence of any law, order, injunction or decree by any governmental entity of competent jurisdiction that prohibits, makes
illegal, voids, enjoins or otherwise prevents the consummation of the Merger and (v) certain other customary closing conditions.
The consummation of the Merger is not subject to a financing condition.
Representations, Warranties and Covenants;
Non-Solicitation. The Merger Agreement contains customary representations, warranties and covenants of the Company, Parent
and Sub. The representations and warranties made by the Company are qualified by disclosures made in the Company’s disclosure
letter and Securities and Exchange Commission (“SEC”) filings, and the representations and warranties
made by Parent and Sub are qualified by disclosures made in Parent’s disclosure letter. The covenants include an obligation
of the Company, subject to certain exceptions, from the date of the Merger Agreement through the Effective Time, to, and to cause
each of its subsidiaries to, use commercially reasonable efforts to conduct operations in all material respects in the ordinary
course of business, maintain and preserve intact in all material respects (to the extent within its control) its business organization,
and to maintain current relationships with significant customers, suppliers, distributors and other persons with whom it has material
business relations. The Merger Agreement also contains covenants pursuant to which (i) the Company and its directors, officers
and employees shall not participate in any discussions or negotiations with any person making any Competing Proposal (as defined
in the Merger Agreement) or that the Company knows is seeking to make a Competing Proposal, and (ii) the Company Board agreed to
recommend to the Company’s stockholders that they approve the transactions contemplated by the Merger Agreement, in each
case subject to certain exceptions contained therein. The Company Board may change its recommendation in certain circumstances
specified in the Merger Agreement in response to an unsolicited proposal that would constitute a Superior Proposal or following
an Intervening Event (as each such term is defined in the Merger Agreement), but only if certain conditions are satisfied with
respect thereto and the Company complies with its obligations in respect thereto in accordance with the Merger Agreement. Under
the Merger Agreement, each of the Company and Parent has also agreed to use reasonable best efforts to consummate the Merger and
related transactions, and Parent has agreed to take any and all actions necessary or advisable to avoid or eliminate each and every
impediment to the consummation of the Merger, subject to certain exceptions contained therein.
Termination; Termination Fees. The
Merger Agreement provides for certain termination rights for both the Company and Parent, including the right of the Company to
terminate the Merger Agreement to accept a Superior Proposal, subject to specified limitations. In addition, and subject to certain
limitations, either party may terminate the Merger Agreement if the Merger is not consummated on or before November 7, 2021. Upon
termination of the Merger Agreement under certain circumstances, including termination by the Company to accept a Superior Proposal,
the Company would be obligated to pay Parent a termination fee of $45,454,304. Upon termination of the Merger Agreement under certain
circumstances, Parent would be obligated to pay the Company a termination fee of $113,635,760 (the “Parent Termination
Fee”).
Equity and Debt Financing. Parent
has obtained equity and debt financing commitments for the transactions contemplated by the Merger Agreement, the proceeds of which
will be used by Parent to pay the Merger Consideration and related fees and expenses subject to the terms and conditions thereof.
The Veritas Capital Fund VII, L.P. (“Veritas”), Elliott Associates, L.P. (“Elliott Associates”)
and Elliott International, L.P. (together with Elliott Associates, “Elliott”) have committed to indirectly
capitalize Parent with equity contributions (the “Equity Financing”), and each of Veritas and Elliott
have provided the Company with a limited guarantee in favor of the Company guaranteeing the payment of certain monetary obligations
that may be owed by Parent pursuant to the Merger Agreement, including with respect to the Parent Termination Fee and related interest
and recovery costs, if applicable, in each case subject to the terms and conditions set forth in each such limited guarantee.
Pursuant to the terms and conditions set
forth in a debt commitment letter, dated February 7, 2021 (the “Debt Commitment Letter”), certain parties
identified therein as the “Commitment Parties” (collectively, the “Lenders”) have committed
to provide Sub with debt financing in an amount that, when combined with the Equity Financing, will provide sufficient available
funds required to consummate the Merger and related transactions on the terms contemplated by the Merger Agreement. The obligations
of the Lenders under the Debt Commitment Letter are subject to customary conditions.
The foregoing summary of the Merger Agreement
and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the
full text of the Merger Agreement and any related agreements. The Merger Agreement is filed as Exhibit 2.1 to this Current Report
on Form 8-K and incorporated herein by reference.
The Merger Agreement and the above descriptions
have been included to provide investors with information regarding the terms of the Merger Agreement and are not intended to provide
any other factual information about the parties to the Merger Agreement or their respective subsidiaries or affiliates. The representations,
warranties, covenants and agreements contained in Merger Agreement were made only for purposes of the Merger Agreement and as of
specific dates set forth therein, are solely for the benefit of the parties to the Merger Agreement and are subject to important
qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The subject matter of the
representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be
fully reflected in the Company’s public disclosures. In addition, certain representations and warranties were used for the
purpose of allocating risk between the parties to the Merger Agreement, rather than establishing matters of fact. The representations
and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders
and reports and documents filed with the SEC, and in some cases were qualified by confidential disclosures that were made by each
party to the others, which disclosures are not reflected in the Merger Agreement. Investors and security holders are not third-party
beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements, or any
descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Merger Agreement.
Amendment No. 1 to Rights Agreement
Concurrently with the
entry into the Merger Agreement, the Company adopted Amendment No. 1, dated as of February 7, 2021 (the “Rights Agreement
Amendment”), to the Rights Agreement, dated as of September 20, 2020, by and between the Company and Broadridge Corporate
Issuer Solutions, Inc., a Pennsylvania corporation, as rights agent (the “Rights Agreement”). The Rights
Agreement Amendment provides, among other things, that none of the approval, execution, delivery or performance of the Merger Agreement,
the Voting Agreement (as defined herein) or any other contract or instrument contemplated by the foregoing, the announcement of
the Merger Agreement or any of the transactions contemplated thereby or the consummation or announcement of the consummation of
the Merger or any of the other transactions contemplated by the Merger Agreement or the transactions contemplated by the Voting
Agreement, in each case, in and of themselves, shall (i) result in the exercise of any rights issued under the Rights Agreement,
(ii) constitute a Qualifying Offer (as defined in the Rights Agreement), (iii) cause any of Parent, Sub, Elliott or their respective
Related Persons (as defined in the Rights Agreement) (each, a “Parent Exempt Person”) to be deemed to
be or to become an Acquiring Person (as defined in the Rights Agreement) or Related Person of an Acquiring Person under the Rights
Agreement, (iv) cause any Parent Exempt Person to be deemed to be or to become a Beneficial Owner (as defined in the Rights Agreement)
of, or to Beneficially Own (as defined in the Rights Agreement) or have Beneficial Ownership (as defined in the Rights Agreement)
of, any securities or (v) cause any officer, director or employee of any Parent Exempt Person to be deemed or to become the Beneficial
Owner (as defined in the Rights Agreement) of any securities that are Beneficially Owned (as defined in the Rights Agreement) by
a Parent Exempt Person. The Rights Agreement and the rights issued thereunder shall terminate immediately prior to the Effective
Time, but only upon the occurrence of the Effective Time.
The Rights Agreement
Amendment also provides that if for any reason the Merger Agreement is terminated in accordance with its terms, the Rights Agreement
Amendment will be of no further force and effect and the Rights Agreement shall remain exactly the same as it existed immediately
prior to the execution of the Rights Agreement Amendment.
The foregoing summary of the Rights Agreement
Amendment and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference
to the full text of the Rights Agreement Amendment. The Rights Agreement Amendment is filed as Exhibit 4.1 to this Current Report
on Form 8-K and incorporated herein by reference.
