| Item
1.01. | Entry
into a Material Definitive Agreement. |
Agreement
and Plan of Merger
On
May 24, 2023, Wireless Telecom Group, Inc., a New Jersey corporation (“WTT”), entered into an Agreement and Plan of
Merger (the “Merger Agreement”) with Maury Microwave, Inc., a Delaware corporation (“Maury”), and
Troy Merger Sub, Inc., a New Jersey corporation wholly owned by Maury (“Merger Sub”). The Merger Agreement provides
that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into WTT (the “Merger”
and, collectively with the other transactions contemplated by the Merger Agreement, the “Transactions”), with WTT
continuing as the surviving corporation and a wholly-owned subsidiary of Maury.
Consideration
to WTT Shareholders.
At
the effective time of the Merger (“Effective Time”), each share of common stock, par value $0.01 per share, of WTT
(the “Common Stock”), issued and outstanding immediately prior to the Effective Time (other than shares of Common
Stock (i) that are cancelled or (ii) for which appraisal rights have been demanded properly in accordance with Section 14A:11 of the
New Jersey Business Corporation Act), shall be converted into the right to receive $2.13 per share in cash, without interest and less
applicable withholding taxes (the “Merger Consideration”). Pursuant to the terms of the Merger Agreement, payments of Merger Consideration may not be made by the paying agent or the
surviving company until file-stamped evidence of the filing of the certificate of merger has been received from the Office of the Department
of the Treasury of the State of New Jersey.
Treatment
of WTT Equity Awards.
The
Merger Agreement provides that as of the Effective Time, each outstanding stock option award granted under WTT’s equity compensation
plans (which we refer to as a “WTT stock option award”) remains outstanding as of the Effective Time and has an exercise
price per share that is less than the Merger Consideration shall be accelerated in full, each holder of each such WTT stock option award
shall be paid by the surviving corporation an amount in cash equal to the Merger Consideration less the applicable exercise price (as
calculated pursuant to the Merger Agreement), less all applicable withholding and other authorized deductions, and each WTT stock option
award shall be cancelled and terminated as of the Effective Time.
The
Merger Agreement provides that as of the Effective Time, each outstanding restricted stock award granted under WTT’s equity compensation
plans (which we refer to as a “WTT restricted stock award”) shall be accelerated in full, each such WTT restricted
stock award shall be cancelled and terminated as of the Effective Time and each such WTT restricted stock award shall be converted into
the right to receive, with respect to each share of Common Stock subject to such WTT restricted stock award (as determined in accordance
with the applicable award agreement relating thereto), the Merger Consideration, less all applicable withholding and other authorized
deductions.
The
Merger Agreement provides that as of the Effective Time, each outstanding restricted stock unit award granted under WTT’s equity
compensation plans (which we refer to as a “WTT restricted stock unit award”) shall be accelerated in full, each such
WTT restricted stock unit award shall be cancelled and terminated as of the Effective Time and each holder of each such WTT restricted
stock unit award shall be paid by the surviving corporation an amount in cash (without interest) equal to the product obtained by multiplying
the aggregate number of WTT restricted stock unit award underlying such WTT restricted stock unit award as of the Effective Time, by
the Merger Consideration.
Warrant
Amendment; Treatment of Warrant.
On
May 24, 2023, WTT entered into a warrant amendment (the “Warrant Amendment”) with Muzinich BDC, Inc., amending that
certain Warrant dated as of February 7, 2020 (the “Warrant”) for the purchase of 266,167 shares of common stock of
the Company at an Exercise Price of $1.3923. The Warrant Amendment (i) provides for automatic cashless exercise of the common stock upon
a change of control, (ii) provides for automatic termination and cancellation of the warrant upon a change of control, and (iii) exempts
a change of control from the right of the holder to retain comparable warrant rights in WTT’s or any successor person’s securities
after a reorganization, reclassification, consolidation or merger. A “change of control” under the Warrant and the Warrant
Amendment includes consummation of the Merger. This summary of the principal terms of the Warrant Amendment, a copy of which is filed
as Exhibit 10.1, and incorporated herein by reference, does not purport to be complete and is subject to, and qualified in its entirety
by, the full text of the Warrant Amendment.
The
Merger Agreement provides that as of the Effective Time, the Warrant shall be cancelled and terminated as of the Effective Time, and
the holder of the Warrant shall be paid by the surviving corporation an amount in cash (without interest), if any, equal to the product
obtained by multiplying the aggregate number shares Company Common Stock underlying such Company Warrant immediately prior to the Effective
Time, by an amount equal to (i) the Merger Consideration, less (ii) the applicable per share exercise price of such Company Warrant.
Board
Approval.
The
Board of Directors of WTT (the “Board”) has unanimously (i) determined that the terms of the Merger Agreement and
the Transactions, including the Merger, are fair to, and in the best interests of, WTT and its shareholders, (ii) approved the execution
and delivery by WTT of the Merger Agreement, the performance by WTT of its covenants and agreements contained in the Merger Agreement
and the consummation of the Merger and other Transactions upon the terms and subject to the conditions set forth in the Merger Agreement,
(iii) recommended that the shareholders of WTT adopt the Merger Agreement, and (iv) directed that the adoption of the Merger Agreement
be submitted to a vote of WTT’s shareholders.
Conditions
to Closing.
The
consummation of the Merger (the “Closing”) is subject to certain conditions, including (i) the affirmative vote of
the holders of a majority of the outstanding shares of Common Stock to adopt the Merger Agreement (the “Shareholder Approval”),
and (ii) the absence of any order or law enjoining or otherwise prohibiting the Merger. Each of WTT’s and Maury’s obligation
to consummate the Merger is also subject to additional customary conditions, including (x) the accuracy of the representations and warranties
of the other party, subject to specified materiality qualifications, and (y) performance and compliance in all material respects by the
other party with its obligations, covenants and agreements under the Merger Agreement. Consummation of the Merger is not subject to a
financing condition.
Representations,
Warranties and Covenants.
The
Merger Agreement contains customary representations, warranties and covenants made by each of WTT, Maury and Merger Sub, including, among
others, covenants by WTT regarding the conduct of its business during the pendency of the Transactions, public disclosures and other
matters. WTT is required, among other things, not to solicit alternative business combination transactions and, subject to certain exceptions,
not to engage in discussions or negotiations regarding an alternative business combination transaction. WTT is required to convene a
meeting of its shareholders to vote on the adoption of the Merger Agreement. WTT and Maury are required to use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable
laws consummate the Transactions as soon as practicable. In addition, WTT covenants not to withdraw or transfer cash that would result
in WTT’s cash being less than $17,500,000 immediately after closing, except with the consent of Maury.
Termination
Rights and Fees.
Both
WTT and Maury may terminate the Merger Agreement under certain specified circumstances, including if (a) WTT’s board makes an adverse
recommendation change with respect to the proposed transaction and substantially concurrently enters into a definitive agreement
providing for a superior proposal, and (b) substantially concurrently with or prior to (and as a condition to) such termination, WTT
pays to Maury a $900,000 termination fee.
In
addition, Maury must pay WTT a termination fee of $1,863,170.34 if WTT terminates the Merger Agreement because WTT was ready and willing
to consummate the Merger, but Maury and Merger Sub fail to consummate the Merger within two business days of the date on which the closing
should have occurred pursuant to the Merger Agreement, and during such two business days, WTT stood ready, willing and able to consummate
the Merger and other transactions contemplated by the Merger Agreement.
Support
Agreements.
Concurrent
with execution of the Merger Agreement, certain individuals and entities holding approximately 9.2% of the outstanding Common Stock (the
“supporting shareholders”) will enter into support agreements pursuant to which each supporting stockholder agrees,
among other things, to vote in favor of the Merger all shares beneficially owned and acquired by such supporting stockholder after the
date of the support agreements. In addition, the supporting stockholders agree, if necessary, to vote their Common Stock (i) against
any action or agreement that is intended or would reasonably be expected to result in any of the Merger Agreement closing conditions
not being satisfied on or before the outside date, and (ii) against any other action, agreement or transaction involving WTT that is
intended, or would reasonably be expected, to materially adversely affect, delay or prevent the consummation of the transactions contemplated
by the Merger Agreement.
The
Merger Agreement and the above description have been included to provide investors and shareholders with information regarding the terms
of the Merger Agreement. They are not intended to provide any other factual information about WTT, Maury or their respective subsidiaries
or affiliates or shareholders. The representations, warranties, and covenants of WTT contained in the Merger Agreement were made solely
for the benefit of Maury and Merger Sub. The assertions embodied in those representations and warranties were made solely for purposes
of allocating risk among WTT, Maury and Merger Sub rather than establishing matters of fact and may be subject to important qualifications
and limitations agreed to by WTT, Maury and Merger Sub in connection with the negotiated terms. Moreover, some of those representations
and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different
from those generally applicable to WTT’s filings with the U.S. Securities and Exchange Commission (the “SEC”)
or may have been used for purposes of allocating risk among WTT, Maury and Merger Sub rather than establishing matters as facts. Investors
should not rely on the representations, warranties, and covenants or any description thereof as characterizations of the actual state
of facts of WTT or any of its subsidiaries or affiliates.
If
the Merger is consummated, the Common Stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934.
This
summary of the principal terms of the Merger Agreement, a copy of which is filed as Exhibit 2.1, and incorporated herein by reference,
(i) does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement and (ii)
is intended to provide information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual
disclosures about WTT in its public reports filed with the SEC. In particular, the Merger Agreement and related summary are not intended
to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to WTT.