Item 1.01
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Entry into a Material Definitive Agreement.
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On July 26, 2016, Analog Devices,
Inc. (the Company) entered into an Agreement and Plan of Merger (Merger Agreement) with Linear Technology Corporation (Linear), a Delaware corporation, and Tahoe Acquisition Corp., (Merger Sub) a
Delaware corporation and a wholly owned subsidiary of the Company, providing for the acquisition of Linear by the Company. The Merger Agreement and the Merger (as defined below) have been unanimously approved by the board of directors of each of the
Company and Linear.
The Merger Agreement provides that, upon the terms and subject to the satisfaction or valid waiver of the conditions
set forth in the Merger Agreement, Merger Sub will merge with and into Linear (the Merger), with Linear continuing as the surviving corporation and a wholly subsidiary of the Company.
At the effective time of the Merger, each outstanding share of Linear common stock, par value $0.001 per share (Linear Common
Shares), other than shares held by stockholders who have validly exercised their appraisal rights under Delaware law, shares owned by the Company, Linear and their subsidiaries, or shares subject to restricted stock awards) will automatically
be converted into the right to receive the following consideration (collectively, the Merger Consideration), without interest:
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$46.00 in cash (the Cash Consideration); and
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0.2321 shares of common stock of the Company, par value $0.16 2/3 per share (Analog Common Shares) (such ratio, the Exchange Ratio).
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At the closing, each Linear restricted stock unit award (Linear RSU Award) and each Linear restricted stock award (Linear
Restricted Stock Award) that becomes vested at the closing (including each Linear Restricted Stock Award held by a non-employee director) will be converted into the right to receive the Merger Consideration in respect of each Linear Common
Share underlying such award.
Each Linear RSU Award and Linear Restricted Stock Award that was granted on or prior to July 22, 2016
that does not become vested at the closing will be converted at the closing into two adjusted awards as follows:
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an award representing the right to receive an amount in cash equal to the number of Linear Common Shares subject to such award, multiplied by the Cash Consideration (Adjusted Cash Award); and
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a restricted unit award (Adjusted RSU Award) or restricted stock award (Adjusted Restricted Stock Award), as applicable, relating to the number of Analog Common Shares equal to the product
(rounded to the nearest whole number of shares) of the number of Linear Common Shares subject to such award, multiplied by the Exchange Ratio.
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Each Linear RSU Award and Linear Restricted Stock Award granted after July 22, 2016 will be converted at the closing into an adjusted
award solely in respect of a number of Analog Common Shares equal to the product (rounded to the nearest whole number of shares) of the number of Linear Common Shares subject to such award, multiplied by 0.9947.
Each Adjusted Cash Award, Adjusted RSU Award and Adjusted Restricted Stock Award will have the same terms and conditions, including vesting,
and for Adjusted Restricted Stock Awards, any rights to receive future dividends, that were applicable to the corresponding Linear RSU Award or Linear Restricted Stock Award, as applicable.
The closing of the Merger is subject to certain conditions, including, among others, (1) the adoption of the Merger Agreement by at least
a majority of all outstanding Linear Common Shares, (2) effectiveness under the Securities Act of 1933 of the Form S-4 registration statement relating to the issuance of Analog Common Shares in the Merger and the absence of any stop order in
respect thereof or proceedings by the SEC for that purpose, (3) the absence of laws, orders, judgments and injunctions that restrain, enjoin or otherwise prohibit consummation of the Merger, (4) expiration or termination of the applicable
Hart-Scott-Rodino Act waiting period and receipt of specified governmental and regulatory consents and approvals and (5) subject to certain exceptions, the accuracy of
representations and warranties with respect to the businesses of the Company and Linear and compliance in all material respects by Linear, the Company and Merger Sub with their respective
covenants contained in the Merger Agreement. Consummation of the Merger is not subject to a financing condition.
The Company and Linear
have each made customary representations, warranties and covenants in the Merger Agreement, including covenants by each of the parties relating to conduct of their business prior to the closing of the Merger. The Merger Agreement contains customary
non-solicitation restrictions prohibiting Linear from soliciting alternative acquisition proposals from third parties or providing information to or participating in discussions or negotiations with third parties regarding alternative acquisition
proposals, subject to customary exceptions relating to proposals that would reasonably be expected to lead to a superior proposal (as described in the Merger Agreement).
The Merger Agreement contains certain termination rights by either Linear or the Company, including if the Merger is not consummated by
April 26, 2017, which may be extended under certain circumstances to October 26, 2017 in order to obtain required regulatory approvals.
If the Merger Agreement is terminated under certain circumstances, including termination by Linear to enter into a superior alternative
transaction or a termination following an adverse recommendation change of Linears board of directors, Linear will be obligated to pay to the Company a termination fee equal to $490 million in cash. If the Merger Agreement is terminated under
certain circumstances involving the failure to obtain required regulatory approvals, the Company will be obligated to pay Linear a termination fee equal to $700 million in cash.
The foregoing description of the Merger Agreement and the transactions contemplated thereby is not complete and is subject to and qualified in
its entirety by reference to the Merger Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 2.1 and the terms of which are incorporated by reference herein.
The Merger Agreement has been included to provide investors with information regarding its terms. It is not intended to provide any other
factual information about the Company or Linear. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates therein, were solely for the benefit of the
parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger
Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the
Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or
affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Companys or
Linears public disclosures.