Item 1.01.
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Entry into a Material Definitive Agreement.
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Merger Agreement
On May 8, 2021, Soliton,
Inc., a Delaware corporation (the Company), entered into an Agreement and Plan of Merger (the Merger Agreement) with AbbVie Inc. (AbbVie) and Scout Merger Sub, Inc., a wholly owned subsidiary of AbbVie
(Merger Sub). Upon the terms and subject to the conditions set forth in the Merger Agreement, which has been unanimously adopted by the Board of Directors of the Company (the Board), Merger Sub will merge with and into
the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of AbbVie (the Merger).
Pursuant to the
Merger Agreement, upon the closing of the Merger (the Closing), each outstanding share of Company common stock, other than shares owned by the Company, AbbVie or Merger Sub (which will be cancelled) and shares with respect to which
appraisal rights are properly exercised and not withdrawn under Delaware law, will automatically be converted into the right to receive $22.60 in cash, without interest (the Merger Consideration).
Each stock option outstanding and unexercised immediately prior to the effective time of the Merger (the Effective Time) will be converted into
the right to receive a cash payment, without interest, in an amount equal to the excess of the Merger Consideration over the per share exercise price that would be due in cash upon exercise of such stock option. Each restricted stock unit award
outstanding immediately prior to the Effective Time will be converted into the right to receive a cash payment, without interest, in an amount equal to the Merger Consideration. Each warrant to purchase Company common stock outstanding and
unexercised immediately prior to the Effective Time will be converted into the right to receive a cash payment, without interest, in an amount equal to the excess of (i) the number of shares of common stock subject to the warrant, multiplied by
the Merger Consideration over (ii) the number of shares of common stock subject to the warrant, multiplied by the per share exercise price of such warrant.
The consummation of the Merger is subject to certain customary closing conditions, including (i) the adoption of the Merger Agreement by the holders of a
majority of the outstanding shares of the Companys common stock (the Stockholder Approval), (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
HSR Act), and (iii) that no judgment or law is in effect that enjoins, makes illegal or otherwise prohibits the consummation of the Merger. Moreover, each partys obligations to consummate the Merger are subject to certain
other conditions, including (a) the accuracy of the other partys representations and warranties (subject to certain materiality exceptions), (b) the other partys compliance in all material respects with its obligations under the
Merger Agreement, and (c) in the case of AbbVie and Merger Sub only, (i) the absence of any pending claim, proceeding or other action by a governmental authority that seeks to prevent, prohibit or make illegal the consummation of the
Merger or materially limit AbbVies ability to own, control, direct, manage or operate the Company and (ii) the absence of any effect, change, event, development or occurrence that, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement) that is continuing. Subject to the satisfaction of the closing conditions, the parties anticipate that the Merger will be consummated in the second half of
this year.
The Merger Agreement contains representations and warranties and covenants of the parties customary for a transaction of this
nature. Until the earlier of the termination of the Merger Agreement and the Effective Time, the Company has agreed to operate its business in the ordinary course of business in all material respects and has agreed to certain other operating
covenants and to not take certain specified actions prior to the consummation of the Merger, as set forth more fully in the Merger Agreement. The Company has also agreed to convene and hold a meeting of its stockholders for the purpose of
obtaining the Stockholder Approval. In addition, the Merger Agreement requires that, subject to certain exceptions, the Board recommend that the Companys stockholders approve the Merger Agreement.
In addition, the Company has agreed not to initiate, solicit or knowingly encourage takeover proposals from third parties. The Company has also agreed
not to provide non-public information to, or, subject to certain exceptions, engage in discussions or negotiations with, third parties regarding takeover proposals. Notwithstanding these restrictions,
prior to the receipt of the Stockholder Approval, the Company may under certain circumstances provide non-public information to and participate in discussions or negotiations with third parties with respect to
takeover proposals.
Prior to obtaining the Stockholder Approval, the Board may, among other things, change its recommendation that the stockholders
approve the Merger Agreement in connection with a Superior Proposal or an Intervening Event (in each case, as defined in the Merger Agreement), or terminate the Merger Agreement to enter into an agreement providing for a Superior Proposal, subject,
in each case, to complying with notice and other specified conditions, including giving AbbVie the opportunity to propose revisions to the terms of the Merger Agreement during a period following notice.