DuPont 2015 Annual Report Download - page 75

E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-16
Conditions to the Mergers
The completion of the merger is subject to the satisfaction or waiver of certain conditions, including (i) the adoption of the Merger
Agreement by the affirmative vote of the holders of a majority of all outstanding shares of DuPont Common Stock entitled to vote
thereon; (ii) the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of all outstanding shares
of Dow Common Stock entitled to vote thereon; (iii) the receipt of certain domestic and foreign approvals under competition laws;
(iv) DuPont and Dow reasonably determining that the merger does not constitute an acquisition of a 50% or greater interest in
DuPont and Dow, respectively, under the principles of Section 355(e) of the Internal Revenue Code; (v) the absence of governmental
restraints or prohibitions preventing the consummation of the merger; (vi) the effectiveness of the Form S-4 and absence of any
stop order or proceedings by the SEC; and (vii) the approval of the shares of DowDuPont Common Stock to be issued in the merger
for listing on the NYSE. The obligation of each of DuPont and Dow to consummate the merger is also conditioned on, among
other things, the receipt of a tax opinion from the tax counsel as to the tax-free nature of the merger, and the truth and correctness
of the representations and warranties made by the other party as of the closing date (subject to certain “materiality” and “material
adverse effect” qualifiers).
Certain Other Terms of the Merger Agreement
The Merger Agreement contains mutual customary representations and warranties made by each of DuPont and Dow, and also
contains mutual customary pre-closing covenants, including covenants, among others, (i) to operate its businesses in the ordinary
course consistent with past practice and to refrain from taking certain actions without the other party’s consent, (ii) not to solicit,
initiate, knowingly encourage or knowingly take any other action designed to facilitate, and, subject to certain exceptions, not to
participate in any discussions or negotiations, or cooperate in any way with respect to, any inquiries or the making of, any proposal
of an alternative transaction, (iii) subject to certain exceptions, not to withdraw, qualify or modify the support of its Board of
Directors for the Merger Agreement and the merger, as applicable, and (iv) to use their respective reasonable best efforts to obtain
governmental, regulatory and third party approvals, including by agreeing to any required divestiture of assets or business. In
addition, the Merger Agreement contains covenants that require each of DuPont and Dow to call and hold a special stockholder
meeting and, subject to certain exceptions, require each of the Board of Directors of DuPont and Dow to recommend to its
stockholders to approve the merger and adopt the Merger Agreement.
The Merger Agreement contains certain termination rights for each of DuPont and Dow, including in the event that (i) the merger
is not consummated on or before March 15, 2017, subject to each party having the right to unilaterally extend the terminate date
of the Merger Agreement until June 15, 2017 (the Outside Date) in the event that the regulatory closing conditions have not been
satisfied, (ii) the approval of the merger and the adoption of the Merger Agreement by the stockholders of DuPont or the stockholders
of Dow is not obtained at the respective stockholder meetings or (iii) if any restraint having the effect of preventing the consummation
of the merger shall have become final and non-appealable or if any governmental entity that must grant a requisite regulatory
approval has denied approval of the merger. In addition, DuPont and Dow can each terminate the Merger Agreement prior to the
stockholder meeting of the other party if, among other things, the other party’s Board of Directors has changed its recommendation
that its stockholders approve the merger, as applicable, and adopt the Merger Agreement, or has failed to make or reaffirm such
recommendation in certain circumstances.
The Merger Agreement further provides that, upon termination of the Merger Agreement under specified circumstances, including
(i) a change in the recommendation of the Board of Directors of DuPont and Dow or (ii) a termination of the Merger Agreement
by DuPont and Dow, because of a failure of the stockholders of the other party to adopt the Merger Agreement at the stockholder
meeting, a material breach by the other party or because the merger is not consummated by the Outside Date, in each case set forth
in this clause (ii) at a time when there was an offer or proposal for an alternative transaction with respect to such party and such
party enters into or consummates an alternative transaction within 12 months following such date of termination, DuPont and
Dow, as the case may be, will pay to the other party a termination fee equal to $1,900 in cash.