LEONARDO DRS, INC. Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On
The Merger Agreement was approved by the board of directors of the Company (the "Company Board"), and the board of directors of RADA (the "RADA Board"), in each case, on the terms and subject to the conditions set forth in the Merger Agreement and the transactions contemplated thereby. The RADA Board has determined to recommend that its shareholders approve the Merger Agreement at a meeting to be held for such purpose (the "RADA Shareholder Meeting", and such recommendation, the "RADA Recommendation").
At the effective time of the Merger (the "Effective Time"), each ordinary share
of RADA, par value
Each outstanding option, whether vested or unvested, to purchase RADA Ordinary Shares under the 2015 Share Option Plan and 2021 Equity Incentive Plan (together, the "RADA Plans") will be assumed by the Company and substituted with an option to purchase shares of Company Common Stock (the "Company Options") in accordance with the terms of the Company's Omnibus Equity Compensation Plan (the "Company Plan") and stock option agreement by which it is evidenced. From and after the Effective Time, the number of shares of Company Common Stock subject to such Company Options shall be equal to the number of RADA Ordinary Shares subject to such RADA Options immediately prior to the Effective Time, multiplied by the Exchange Ratio, rounded down to the nearest whole share, and the per share exercise price under each such Company Option shall be equal to the exercise price per RADA Ordinary Share subject to such RADA Option immediately prior to the Effective Time divided by the Exchange Ratio (rounded up to the nearest whole cent). Each RADA Option holder's right to exercise his or her Company Option under the Company Plan will be subject to substantially the same terms and conditions as were applicable to the RADA Plans immediately prior to the Effective Time, including the same vesting restrictions and continued service requirements and the same rights to vesting upon a qualifying termination of employment, to the extent applicable.
The Merger Agreement contains customary representations and warranties of the Company and RADA relating to their respective businesses and public filings, in each case generally subject to knowledge and materiality qualifiers. Additionally, the Merger Agreement provides for customary pre-closing covenants of the Company and RADA, including (i) covenants from the Company and RADA relating to conducting their respective business in the ordinary course consistent with past practice and refraining from taking certain types of actions without the other party's consent and (ii) certain restrictions on RADA's ability to solicit alternative acquisition proposals from third
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parties, and/or to provide information to third parties and to engage in discussions with third parties, in each case, in connection with alternative acquisition proposals, subject to certain exceptions.
The consummation of the Merger is subject to certain closing conditions,
including (i) the approval of RADA's shareholders (the "RADA Shareholder
Approval") at the RADA Shareholder Meeting, (ii) the approval for listing on
NASDAQ of the shares of Company Common Stock issuable to the holders of RADA
Ordinary Shares pursuant to the Merger Agreement shall have been authorized for
listing on NASDAQ upon official notice of issuance, (iii) the Requisite
Regulatory Approvals (as defined in the Merger Agreement) shall have been filed,
been obtained or occurred and be in full force and effect without the imposition
of any term, condition or consequence the acceptance of which would constitute a
Substantial Detriment (as defined in the Merger Agreement), (iv) the absence of
any law or order issued by any governmental entity enjoining or otherwise
prohibiting the consummation of the Merger, (v) the effectiveness of the
registration statement on Form S-4 to be filed by the Company with the
Prior to obtaining the RADA Shareholder Approval, the RADA Board may, in certain
limited circumstances, withdraw or modify the RADA Recommendation or recommend
or otherwise declare advisable any Superior Proposal (as defined in the Merger
Agreement) (a "Change of Recommendation"), subject to complying with notice and
other specified conditions, including giving the Company the opportunity to
propose revisions to the terms of the transaction contemplated by the Merger
Agreement during a match right period. If the RADA Board authorizes a Change of
Recommendation and enters into an agreement for a Superior Proposal (as defined
in the Merger Agreement), RADA will be required to pay a termination fee of
The Merger Agreement also provides for certain mutual termination rights of the
Company and RADA, including the right of either party to terminate the Merger
Agreement if the Merger is not consummated by
Item 7.01. Regulation FD Disclosure
On
The foregoing (including Exhibits 99.1 and 99.2) is being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise be subject to liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
General
The foregoing description of the Merger Agreement does not purport to be a
complete description and such description is qualified in its entirety by
reference to the full text of the Merger Agreement, which is attached hereto as
Exhibit 2.1 and is incorporated into Item 1.01 of this Current Report on Form
8-K by reference. 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, RADA or any of their respective
subsidiaries or affiliates. The Merger Agreement contains representations,
warranties and covenants by each of the parties thereto. These representations,
warranties and covenants (A) were made solely for the benefit of the other
parties to the Merger Agreement; (B) are subject to limitations agreed upon by
the parties; (C) are not intended to be treated as categorical statements of
fact, but rather as a way of allocating contractual risk among the parties; (D)
may be subject to standards of materiality applicable to the parties that differ
from what might be viewed as material to stockholders; (E) are qualified by
information in confidential disclosure schedules provided in connection with the
signing of the Merger Agreement, which schedules contain information that
modifies, qualifies and creates exceptions to the representations, warranties
and covenants set forth in the Merger Agreement; and (F) were made only as of
the date of the Merger Agreement or such other date or dates as may be specified
in the Merger Agreement. Accordingly, investors and others should not rely on
the representations, warranties and covenants, or any descriptions thereof, as
statements of fact or as to the condition of the Company, RADA or any of their
respective subsidiaries or affiliates. Further, the Merger Agreement should not
be read alone but instead should be read in conjunction with the other
information regarding the Merger Agreement, the Merger and the transactions
contemplated by the Merger Agreement, the Company, RADA and their respective
subsidiaries and affiliates that will be contained in, or incorporated by
reference into, the prospectus that will be filed with the
Forward-looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 or the Israeli Securities Law, 1968 (as applicable) regarding the Company and RADA including, but not limited to, statements related to the proposed acquisition of RADA and the anticipated timing, results and benefits thereof, statements regarding the expectations and beliefs of the board of directors of the Company, the Company management, the board of directors of RADA or RADA management, and other statements that are not historical facts. Readers can generally identify forward-looking statements by the use of forward-looking terminology such as "outlook," "potential," "continue," "may," "seek," "approximately," "predict," "believe,"
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"expect," "plan," "intend," "poised," "estimate" or "anticipate" and similar
expressions or the negative versions of these words or comparable words, as well
as future or conditional verbs such as "will," "should," "would," "likely" and
"could". These forward-looking statements are based on the Company's and RADA's
current plans, objectives, estimates, expectations and intentions and inherently
involve significant risks and uncertainties, many of which are beyond the
Company's or RADA's control. Actual results and the timing of events could
differ materially from those anticipated in such forward-looking statements as a
result of these risks and uncertainties, which include, without limitation,
risks and uncertainties associated with the Company's and RADA's ability to
complete the proposed acquisition on the proposed terms or on the anticipated
timeline, or at all, including: risks and uncertainties related to securing the
necessary regulatory and RADA shareholder approval and satisfaction of other
closing conditions to consummate the proposed acquisition; the occurrence of any
event, change or other circumstance that could give rise to the termination of
the merger agreement relating to the proposed acquisition; risks related to
diverting the attention of the Company and/or RADA management from ongoing
business operations; failure to realize the expected benefits of the proposed
acquisition; significant transaction costs and/or unknown or inestimable
liabilities; the risk of litigation in connection with the proposed acquisition,
including resulting expense or delay; the risk that RADA's business will not be
integrated successfully or that such integration may be more difficult,
time-consuming or costly than expected; risks related to future opportunities
and plans for RADA's business, including the uncertainty of financial
performance and results of the Company or RADA following completion of the
proposed acquisition; disruption from the proposed acquisition; effects relating
to the announcement of the proposed acquisition or any further announcements or
the consummation of the proposed acquisition on the market price of RADA common
stock; the Company's anticipated public listing on the
Additional Information and Where to Find It
In connection with the proposed acquisition, the Company will file with the
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No Offer or Solicitation . . . Item 9.01 Financial Statements and Exhibits. (d)Exhibits. Exhibit Number Description 2.1 Agreement and Plan of Merger, dated as ofJune 21, 2022 , by and amongLeonardo DRS, Inc. ,Blackstart Ltd and RADA Electronic Industries Ltd. * 10.1 Form of Registration Rights Agreement 10.2 Form of Cooperation Agreement 99.1 Press Release, datedJune 21, 2022 , jointly issued byLeonardo DRS, Inc. and RADA Electronic Industries Ltd. 99.2 Investor Presentation, datedJune 21, 2022 . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
*Certain Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
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