Item 1.01.
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Entry Into a Material Definitive Agreement.
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On December 14, 2021 (the “Signing Date”), CMC Materials,
Inc. (the “Company” or “CMC”) entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with Entegris, Inc. (“Entegris”)
and Yosemite Merger Sub, Inc., a wholly owned subsidiary of Entegris (“Merger Sub”).
The Merger Agreement provides that, among other things and subject to the terms and conditions of the Merger Agreement, (1) Merger Sub will merge with
and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Entegris (the “Surviving Company”), and (2) at the effective time of the Merger (the “Effective Time”),
each issued and outstanding share of common stock of the Company, par value $0.001 (the “Company common stock”) (other than (i) shares of Company common
stock owned by the Company, Entegris or any of their respective subsidiaries immediately prior to the Effective Time and (ii) shares of Company common stock as to which dissenters’ rights have been properly perfected) will be converted into the
right to receive $133 in cash (the “Cash Consideration”) and 0.4506 of a share (the “Exchange Ratio”) of common stock of Entegris, par value $0.01 (the “Entegris common stock”), plus cash in lieu of any fractional
shares (collectively, the “Merger Consideration”).
The Board of Directors of each of Entegris and the Company have approved the Merger Agreement and the transactions contemplated thereby.
Treatment of the Company Equity Awards
As of the Effective Time, (i) each outstanding option to purchase shares of Company common stock will vest in full and be assumed and converted into an
option to purchase shares of Entegris common stock based on the Equity Award Exchange Ratio, (ii) each restricted share of Company common stock will vest in full and be cancelled and converted into the right to receive the Merger Consideration
(with any accrued but unpaid dividends paid in cash), (iii) each time-based restricted stock unit award that was granted prior to the date of the Merger Agreement and/or to a non-employee member of the Company board of directors will vest in full
and be cancelled and converted into the right to receive the Merger Consideration (with any accrued but unpaid dividend equivalents paid in cash), (iv) each other time-based restricted stock unit award not covered by clause (iii) will be
converted into a restricted stock unit award with respect to shares of Entegris common stock based on the Equity Award Exchange Ratio, (iv) each deferred stock unit award under the Directors’ Deferred Compensation Plan of the Company will vest in
full and be cancelled and converted into the right to receive the Merger Consideration (with any accrued but unpaid dividend equivalents paid in cash), (v) each contingent right to receive the cash value of a share of Company common stock held by
select employees of the Company who primarily provide services in a jurisdiction other than the United States will vest in full and be cancelled and converted into the right to receive an amount in cash equal to the value of the Merger
Consideration, and (vi) each performance-based restricted stock unit will be assumed and converted into a time-based restricted stock unit award with respect to shares of Entegris common stock based on the Equity Award Exchange Ratio and the
achievement of applicable performance metrics at the target level. The “Equity Award Exchange Ratio” means the sum of (i) the Exchange Ratio and (ii) the
quotient (rounded to the fourth decimal place) of (i) the Cash Consideration divided by (ii) the volume weighted average price per share of Entegris common stock on the NASDAQ, for the consecutive period of 10 trading days beginning on the 12th
trading day immediately preceding the closing date and concluding at the close of trading on the second trading day immediately preceding the closing date.
Conditions to the Merger
The completion of the Merger is subject to the satisfaction or waiver of certain customary mutual closing conditions, including (1) the affirmative
vote of holders of a majority of the outstanding shares of Company common stock entitled to vote on such matter having approved adoption of the Merger Agreement (the “Company
Stockholder Approval”), (2) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of approvals under the antitrust laws in China,
Korea, Japan, Singapore and Taiwan, (3) the absence of any governmental order or law that makes consummation of the Merger illegal or otherwise prohibited, (4) the effectiveness of the registration statement on Form S-4 to be filed by Entegris
registering the shares of Entegris common stock to be issued in connection with the Merger with the Securities and Exchange Commission (the “SEC”) and (5)
the authorization for listing of Entegris common stock to be issued in connection with the merger on the NASDAQ. The obligation of each party to consummate the Merger is also conditioned upon the other party’s representations and warranties being
true and correct (subject to certain materiality exceptions) and the other party having performed in all material respects its obligations under the Merger Agreement. The consummation of the Merger is not subject to any financing condition.
Representations, Warranties and Covenants
The Merger Agreement contains customary representations and warranties of Entegris and the Company relating to their respective businesses, financial
statements and public filings, in each case generally subject to customary materiality qualifiers. Additionally, the Merger Agreement provides for certain pre-closing covenants of Entegris and the Company, including covenants relating to
conducting their respective businesses in the ordinary course and to refrain from taking certain actions without the other party’s consent, including in the case of the Company, other than the payment of the dividend declared by the Company on
December 7, 2021, declaring or paying any dividends between signing and closing without Entegris’ consent, except that the Company may declare a quarterly dividend of $0.46 per share in March 2022 and, if the closing does not occur by December
14, 2022, the Company may declare quarterly dividends of $0.46 per share in a manner consistent with the Company’s past practice. Entegris and the Company also agreed to use their respective reasonable best efforts to cause the Merger to be
consummated and to obtain regulatory approvals or expiration or termination of waiting periods, subject to certain exceptions, including that Entegris and the Company are not required to take any action that would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the combined company after giving effect to the Merger, but measured on a scale relative to the size of the Company and its subsidiaries, taken as a whole, prior to the Merger.
The Merger Agreement provides that, during the period from the date of the Merger Agreement until the Effective Time, the Company will be subject to
certain restrictions on its ability to solicit alternative acquisition proposals from third parties, to provide non-public information to third parties and to engage in discussions with third parties regarding alternative acquisition proposals,
subject to customary exceptions. Unless the Merger Agreement is terminated in accordance with its terms, the Company is required to call a meeting of its stockholders to vote upon the adoption of the Merger Agreement and, subject to certain
exceptions, to recommend that its stockholders vote to adopt the Merger Agreement.
Termination
The Merger Agreement contains termination rights for each of Entegris and the Company, including, among others, (1) if the consummation of the Merger
does not occur on or before December 14, 2022, subject to one three-month extension in certain circumstances for the sole purpose of obtaining regulatory clearances, (2) if the approval of the Company Stockholder Approval is not obtained and (3)
subject to certain conditions, by Entegris if the Board of Directors of the Company makes an adverse recommendation change with respect to the Merger or by the Company if the Company wishes to terminate the Merger Agreement to enter into a
definitive agreement with respect to a “superior proposal.” Upon termination of the Merger Agreement under specified circumstances, including the termination by Entegris in the event of a change of recommendation by the Board of Directors of the
Company or the termination by the Company to enter into an agreement in connection with a “superior proposal,” the Company would be required to pay Entegris a termination fee of $187 million in cash.
The foregoing description of the Merger Agreement and the transactions contemplated thereby in this Current Report on Form 8-K is only a summary and does
not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 hereto and incorporated by reference herein.
The Merger Agreement and the above description have been included to provide investors and security holders with information regarding the terms of the
Merger Agreement. They are not intended to provide any other factual information about Entegris or the Company or their respective subsidiaries or affiliates or stockholders. 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 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 Entegris’ or the Company’s public disclosures, as applicable. Accordingly, investors should read the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other
information about Entegris or the Company and their respective subsidiaries that the respective companies include in reports, statements and other filings they make with the SEC.
Financing Commitment
In connection with entry into the Merger Agreement, on the Signing Date, Entegris obtained a debt financing commitment from Morgan Stanley
Senior Funding, Inc. (“MSSF”), pursuant to which MSSF committed to provide Entegris up to $4.895 billion in connection with the transactions described
herein, subject to the satisfaction of certain customary closing conditions.