Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On October 31, 2022 ABIOMED, Inc., a Delaware corporation (the "Company"),
entered into an Agreement and Plan of Merger (the "Merger Agreement") with
Johnson & Johnson, a New Jersey corporation ("Parent"), and Athos Merger Sub,
Inc., a Delaware corporation and wholly owned subsidiary of Parent ("Merger
Sub"). Pursuant to the Merger Agreement, and on the terms and subject to the
conditions thereof, Merger Sub will commence a tender offer (the "Offer") as
promptly as practicable, but in no event later than November 15, 2022, to
acquire all of the Company's outstanding shares of common stock (the "Company
Shares") at a purchase price (the "Offer Price") of (i) $380.00 per Company
Share, net to the holder thereof in cash, without interest and less any
applicable withholding tax (the "Cash Amount"), plus (ii) one non-tradeable
contingent value right per Company Share (each, a "CVR"), which represents the
right to receive contingent payments of up to $35.00 per Company Share, net to
the holder thereof in cash, without interest and less any applicable withholding
tax, upon achievement of certain specified milestones in accordance with the
terms and subject to the conditions of a contingent value rights agreement (the
"CVR Agreement") to be entered into with a rights agent (the "Rights Agent")
mutually agreeable to Parent and the Company.
Following the completion of the Offer and subject to the satisfaction or waiver
of certain conditions set forth in the Merger Agreement, Merger Sub will merge
with and into the Company, with the Company surviving as a wholly owned
subsidiary of Parent, pursuant to Section 251(h) of the General Corporation Law
of the State of Delaware (the "DGCL"), without a vote of the Company
stockholders (the "Merger"). Immediately prior to the effective time of the
Merger (the "Effective Time"), and without any action on the part of the holders
of any Company Shares, each Company Share, other than any Company Shares
(i) owned at the commencement of the Offer and immediately prior to the
Effective Time by Parent, Merger Sub, any of their subsidiaries or the Company,
(ii) irrevocably accepted for purchase pursuant to the Offer or (iii) owned by
Company stockholders who are entitled to demand and have properly and validly
demanded their appraisal rights under the laws of the State of Delaware, will be
automatically converted into the right to receive the Offer Price, without
interest and less any applicable withholding tax.
Parent and Merger Sub's obligation to accept for payment and purchase any
Company Shares validly tendered pursuant to the Offer is subject to the
satisfaction or waiver of certain conditions set forth in the Merger Agreement,
including, as of immediately prior to the expiration time of the Offer: (i) that
there be validly tendered and not withdrawn in accordance with the terms of the
Offer, and "received" by the "depository" for the Offer (as such terms are
defined in Section 251(h) of the DGCL), a number of Company Shares that,
together with the Company Shares then owned by Parent, Merger Sub and their
affiliates, represents at least one Company Share more than 50% of the
then-outstanding Company Shares; (ii) the accuracy of the representations and
warranties of the Company contained in the Merger Agreement (subject to certain
materiality exceptions); (iii) the Company's compliance or performance in all
material respects with its covenants and agreements contained in the Merger
Agreement prior to the expiration time of the Offer; (iv) the expiration or
termination of any waiting period (and extensions thereof) applicable to the
transactions contemplated by the Merger Agreement under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the receipt of certain other
non-U.S. regulatory approvals; (v) the absence of any law or order issued or
enacted by the any government authority of competent and applicable jurisdiction
that would make illegal, prohibit or otherwise prevent the consummation of the
Offer, the acquisition of Company Shares by Parent or Merger Sub, or the Merger;
(vi) the absence of any pending legal proceeding under any antitrust laws
brought by any applicable governmental authority of competent and applicable
jurisdiction that challenges or seeks to make illegal, prohibit or otherwise
prevent the consummation of the Offer, the acquisition of Company Shares by
Parent or Merger Sub or the Merger; and (vii) other customary conditions.
Consummation of the Offer is not subject to a financing condition.
In addition, the Merger Agreement provides for the following treatment of the
Company's equity awards at the Effective Time:
• each outstanding and unexercised Company stock option will be
automatically canceled and converted into the right to receive:
• with respect to each stock option with a per share exercise price
that is less than the Cash Amount (an "In-the-Money Option"), (A)
an amount in cash, without interest, equal to the product of
(I) the aggregate number of Company Shares underlying such
In-the-Money Option and (II) the excess, if any, of (x) the Cash
Amount over (y) the per share exercise price of such In-the-Money
Option and (B) one CVR per Company Share underlying such
In-the-Money Option;
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• with respect to each stock option with a per share exercise price
that is greater than or equal to the Cash Amount (an
"Out-of-the-Money option"), upon each Valuation Point (as defined
. . .
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Retention Agreement with Andrew Greenfield
On October 31, 2022, at the request of Parent, the Company entered into a
retention agreement (the "Retention Agreement") with Andrew Greenfield, Vice
President and Chief Commercial Officer of the Company. The Retention Agreement
modifies certain provisions of Mr. Greenfield's Change of Control Agreement with
the Company (the "Greenfield CIC Agreement").
Pursuant to the Retention Agreement, Mr. Greenfield is entitled to a retention
opportunity equal to $3,500,000 in the aggregate, with $2,400,000 of such amount
payable on the first anniversary of the closing and the remainder payable on the
second anniversary of the closing, in each case, subject to Mr. Greenfield's
continued employment with the Company and its Affiliates (as defined in the
Merger Agreement) (including Parent) through the applicable retention date.
Notwithstanding the foregoing, if Mr. Greenfield's employment is terminated
prior to the second anniversary of the closing by the Company and its Affiliates
other than for Cause (as defined in the Greenfield CIC Agreement), due to Mr.
Greenfield's death or disability or if Mr. Greenfield resigns for Good Reason
(as defined in the Retention Agreement), then (a) if such termination is prior
to the first anniversary of the closing, Mr. Greenfield will receive the sum of
(i) the severance compensation and benefits payable under the Greenfield CIC
Agreement and (ii) $2,250,500 and (b) if such termination is after the first
anniversary of the closing and prior to the second anniversary of the closing,
Mr. Greenfield will receive $1,100,000.
Following the 12-month anniversary of the closing, Mr. Greenfield will not be
entitled to any severance or separation payments or benefits under the
Greenfield CIC Agreement (other than any compensation or benefits he may be
entitled to pursuant to Sections 8 or 9 of such agreement). Following the
24-month anniversary of the closing, if he remains employed by Parent and its
Affiliates, Mr. Greenfield will be eligible for severance benefits under the
applicable severance policy of Parent or one of its Affiliates.
The foregoing description of the Retention Agreement is not complete and is
qualified in its entirety by reference to the complete text of the Retention
Agreement, a copy of which is attached as Exhibit 10.1 and incorporated herein
by reference.
Letter Agreement with Michael R. Minogue
On October 31, 2022, at the request of Parent, the Company entered into a letter
agreement (the "Letter Agreement") with Michael R. Minogue, the Chief Executive
Officer of the Company, which modifies certain provisions of Mr. Minogue's
Employment Agreement and Change of Control Agreement with the Company (the
"Minogue CIC Agreement").
Under the terms of the Letter Agreement, immediately following the closing,
Mr. Minogue's employment with the Company and its Affiliates will terminate,
which termination of employment will be treated as a termination by the Company
and its Affiliates other than for Cause (as defined in the Minogue CIC
Agreement). Upon such termination, Mr. Minogue will receive the following
payments and benefits in full satisfaction of the Company's obligations under
Section 6(d) of the Minogue CIC Agreement:
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• all Accrued Obligations (as defined in the Minogue CIC Agreement);
• $152,636,616 (an amount calculated based on the existing severance
formula in the Minogue CIC Agreement as of the date of the Agreement
and not enhanced in connection with the transactions contemplated by
the Merger Agreement);
• 18 months of continued medical benefits as described in
Section 6(d)(ii) of the Minogue CIC Agreement; and
• up to $5,000 of outplacement benefits.
Mr. Minogue will cooperate with any requests by Parent to take actions that
would reduce the amount of any excise tax incurred under Section 4999 of the
Internal Revenue Code of 1986, as amended, in the event that the closing is
reasonably expected to occur on or after January 1, 2023.
Additionally, Mr. Minogue will remain reasonably available to provide consulting
and other transition-related services at the reasonable request of Parent for
four months following the closing. Mr. Minogue will not be entitled to any
additional compensation in respect of the foregoing services.
The foregoing description of the Letter Agreement is not complete and is
qualified in its entirety by reference to the complete text of the Letter
Agreement, a copy of which is attached as Exhibit 10.2 and incorporated herein
by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws.
On October 31, 2022, the Company Board adopted and approved an amendment to the
Amended and Restated By-Laws of the Company ("Amendment No. 1 to the By-Laws").
Amendment No. 1 to the By-Laws provides that, unless the Company consents in
writing to the selection of an alternative forum, the sole and exclusive forum
for any internal corporate claim, intra-corporate claim or claim governed by the
internal affairs doctrine, in each case, under the laws of the State of
Delaware, including any derivative action or proceeding brought on behalf of the
Company, any claim of breach of a fiduciary duty owed by any director, officer,
employee or stockholder of the Company to the Company or the Company's
stockholders, or any claim arising pursuant to any provision of the Delaware
General Corporation Law or the Certificate of Incorporation or the Company's
By-Laws, shall be the Delaware Court of Chancery. In addition, Amendment No. 1
to the By-Laws provides that, unless the Company consents in writing to the
selection of an alternative forum, the sole and exclusive forum for any
complaint alleging a cause of action arising under the Securities Act of 1933,
as amended (the "Securities Act"), against the Company or any director, officer
or employee of the Company shall be United States District Court for the
District of Delaware.
The foregoing description of Amendment No. 1 to the By-Laws is not complete and
is qualified in its entirety by reference to the complete text thereof, a copy
of which is filed as Exhibit 3.1 hereto and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On November 1, 2022, the Company and Parent issued a joint press release
announcing the execution of the Merger Agreement. A copy of the press release is
hereby furnished as Exhibit 99.1 to this Report.
The information contained in this Item 7.01 and in Exhibit 99.1 of this Report
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that section, nor shall it be incorporated by reference into
any filing under the Securities Act or the Exchange Act, except as expressly set
forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
2.1 Agreement and Plan of Merger, dated as of October 31, 2022, by and
among ABIOMED, Inc., Johnson & Johnson, and Athos Merger Sub, Inc.*
2.2 Form of Contingent Value Rights Agreement, by and among Johnson &
Johnson and a rights agent mutually acceptable to Johnson & Johnson
and ABIOMED, Inc.
3.1 Amended and Restated By-Laws of the Company.
10.1 Retention Agreement, dated as of October 31, 2022, between ABIOMED,
Inc. and Andrew Greenfield
10.2 Letter Agreement, dated as of October 31, 2022, between ABIOMED,
Inc. and Michael R. Minogue
99.1 Press release dated November 1, 2022.
104 Cover Page Interactive Data File (embedded with the Inline XBRL
document)
* Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. The Company hereby undertakes to furnish supplemental copies of
any of the omitted exhibits and schedules upon request by the SEC.
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