Item 1.01 Entry into a Material Definitive Agreement
Merger Agreement
On December 17, 2017,
Amplify Snack Brands, Inc., a Delaware corporation (
Amplify
or the
Company
), The Hershey Company, a Delaware corporation (
Hershey
), and Alphabet Merger Sub, Inc., a Delaware corporation and a
wholly owned subsidiary of Hershey (
Acquisition Sub
), entered into an Agreement and Plan of Merger (the
Merger Agreement
).
Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Acquisition Sub will commence a cash tender offer (the
Offer
) to acquire all of the issued and outstanding shares of common stock, par value $0.0001 per share, of the Company (
Common Stock
) at a price per share equal to $12.00, net to the seller in cash, without
interest (the
Offer Price
), subject to any withholding of taxes required by applicable law.
The obligation of Acquisition Sub to
consummate the Offer is subject to customary conditions, including, among others, (i) there being validly tendered and not validly withdrawn prior to the expiration of the Offer a number of shares of Common Stock that, considered together with
all other shares of Common Stock (if any) owned by Hershey and its subsidiaries, comprise at least a majority of the shares of Common Stock, (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the
HSR Act
), (iii) the absence of any law or order prohibiting the consummation of the Offer or the Merger (as defined below) and (iv) the accuracy of representations and warranties and
compliance with covenants.
The Merger Agreement provides that, following the consummation of the Offer and subject to the terms and conditions of the
Merger Agreement, Acquisition Sub will merge with and into the Company pursuant to Section 251(h) of the General Corporation Law of the State of Delaware (the
DGCL
), with the Company being the surviving corporation (the
Merger
). At the effective time of the Merger, each share of Common Stock (other than (i) shares of Common Stock held by the Company (or held in the Companys treasury), (ii) shares of Common Stock held by Hershey,
Acquisition Sub, or any other direct or indirect wholly owned subsidiary of Hershey and (ii) shares of Common Stock held by stockholders who have properly exercised their demands for appraisal of such shares of Common Stock in accordance with
the DGCL and have neither withdrawn nor lost such rights prior to the effective time, will be converted into the right to receive an amount in cash equal to the Offer Price, without interest and subject to any required tax withholding.
At the Effective Time, all outstanding Company stock options, restricted stock units, and restricted stock (in each case, whether vested or unvested) that are
outstanding immediately prior to the Effective Time shall, immediately prior to the Effective Time, be cancelled in exchange for the right to receive the merger consideration (without interest) with respect to the number of shares of Common Stock
underlying the applicable award, less applicable withholding taxes, and less the applicable exercise price for Company stock options.
The Merger
Agreement may be terminated under certain circumstances, including in specified circumstances in connection with an Acquisition Proposal that the board of directors of the Company determines constitutes a Superior Proposal (each as defined in the
Merger Agreement). Upon the termination of the Merger Agreement, under specified circumstances, the Company will be required to pay Hershey a termination fee of approximately $31.4 million.
The foregoing description 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 Merger Agreement, which is filed as Exhibit 2.1 to this Current Report on Form
8-K
and which is incorporated herein by reference. The Merger Agreement has been filed to provide information
to investors regarding its terms. It is not intended to provide any other factual information about Hershey, Acquisition Sub or the Company, their respective businesses, or the actual conduct of their respective businesses during the period prior to
the consummation of the Offer, the Merger or the other transactions contemplated by the Merger Agreement. The Merger Agreement and this summary should not be relied upon as disclosure about Hershey or the Company. None of the Companys
stockholders or any other third parties should rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the
actual state of facts or conditions of Hershey, Acquisition Sub, the Company or any of their respective subsidiaries or affiliates. The Merger Agreement contains representations and warranties
that are the product of negotiations among the parties thereto and that the parties made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations and warranties are subject to
qualifications and limitations agreed to by the respective parties and are also qualified in important part by confidential disclosure schedules delivered in connection with the Merger Agreement. The representations and warranties may have been made
for the purpose of allocating contractual risk between the parties to the agreements 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.
Support Agreement
Concurrent with the execution and delivery of the Merger Agreement, on December 17, 2017, each director, certain executive officers of the Company and
certain affiliates of TA Associates Management, LP entered into support agreements (the
Support Agreements
) with Hershey and Acquisition Sub, pursuant to which each such director, executive officer and significant stockholder
agreed, among other things, to tender his, her or its shares of Common Stock pursuant to the Offer. Shares of Common Stock held by these directors, executive officers and significant stockholders represent, in the aggregate, approximately 57% of the
shares of Common Stock outstanding on the date of the Merger Agreement. The foregoing description of the Support Agreement does not purport to be complete and is qualified in its entirety by reference to the form of Support Agreement, a copy of
which is filed as Exhibit 99.1 hereto and is hereby incorporated into this Current Report on Form
8-K
by reference.
Item 5.02. Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Christenson Bonus
Pursuant to the Employment
Agreement entered into by and between Gregory S. Christenson and the Company, dated July 31, 2017, as amended effective September 11, 2017, Mr. Christenson would have been entitled to receive a
one-time
retention bonus equal to one hundred thousand dollars (the
Christenson Retention Bonus
), payable on the Companys first payroll date following the earliest of
(i) March 12, 2018, subject to his continuous employment with the Company through such date; (ii) a termination by the Company without cause that occurs prior to March 12, 2018; (iii) a termination by Mr. Christenson for
good reason that occurs prior to March 12, 2018; and (iv) the closing of a change in control that occurs prior to March 12, 2018. On December 17, 2017, the Compensation Committee of the Companys Board of Directors approved
the acceleration of the payment of the Christenson Retention Bonus to a date not later than December 31, 2017.