Item 1.01. Entry into a Material Definitive Agreement.
On November 18, 2007, Natrol,
Inc., a Delaware corporation (the “Company”), entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with Plethico Pharmaceuticals
Limited, a public limited company incorporated under the laws of India (“Parent”),
and Nutra Acquisition Company Inc., a Delaware corporation and indirect wholly
owned subsidiary of Parent (“Purchaser”).
Subject to the terms and conditions
of the Merger Agreement, Purchaser will commence a front-end, cash tender offer
(the “Offer”) to purchase all of the outstanding shares of common
stock,
$.01 par value (the “Common Stock”), of the Company at $4.40
net per share in cash (such purchase price per share, or greater purchase price
per share at which the shares of Common Stock are purchased in the Offer, the “Offer
Price”). Upon successful completion of the Offer, Purchaser will be merged
(the “Merger”) with and into the Company in a second-step, cash-out
merger in which each outstanding share of Common Stock (other than shares
of Common Stock owned by Purchaser or Parent or held in the Company’s
treasury and shares of Common Stock as to which appraisal rights have been
properly exercised and not withdrawn in accordance with the applicable provisions
of the Delaware General Corporation Law) will be converted into the right
to receive the Offer Price in cash, and the Company will survive the Merger
as a wholly owned subsidiary of Parent. Holders of stock
options of the Company will receive cash equal to the excess, if any, of $4.40
over the exercise price of such stock options.
The
Merger Agreement provides that Purchaser must commence the Offer not later
than November 27, 2007 and that the Offer must remain open for at least 20
business days from commencement, subject to extension under certain circumstances.
Purchaser also has agreed to reserve the right to commence a “subsequent
offering period” if Parent and
Purchaser own less than 90% of the fully diluted Common Stock upon completion
of the initial Offer period. The Company has granted Parent and Purchaser
a “top-up” option
exercisable under certain limited circumstances, if after completion of the
Offer, Parent or Purchaser owns less than 90% of the fully diluted Common
Stock.
The
consummation of the Offer is subject to certain conditions, including the
valid tender in the Offer of a majority of the fully diluted Common Stock.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the Merger Agreement,
a copy of which is filed herewith as Exhibit 2.1 and is incorporated herein
in its entirety by reference.
Under
Tender and Support Agreements, dated as of November 18, 2007 (the “Tender
Agreements”),
between Parent and each of Elliott Balbert and Cheryl Balbert, as Trustees
of the Balbert Family Trust, and Trisha Balbert (together, the “Supporting
Stockholders”), the Supporting Stockholders have agreed to tender in
the offer all shares of Common Stock beneficially owned by them, which in
the aggregate represent approximately 42.3% of the total outstanding Common
Stock. A copy of each of the Tender Agreements is filed herewith as Exhibits
99.2 and 99.3 and is incorporated herein in its entirety by reference.
The tender offer described in
this form has not yet been commenced. This announcement and the description contained
herein is neither an offer to purchase nor a solicitation of an offer to sell
shares of the Company. At the time the tender offer is commenced, Parent and
Purchaser intend to file with the Securities and Exchange Commission (“SEC”)
a Tender Offer Statement on Schedule TO containing an offer to purchase, forms
of letters of transmittal and other documents relating to the tender offer, and
the Company intends to file with the SEC a Solicitation/Recommendation Statement
on Schedule 14D-9 with respect to the tender offer. Parent, Purchaser and the
Company intend to mail these documents to the stockholders of the Company. These
documents will contain important information about the tender offer and stockholders
of the Company should read them carefully when they become available before any
decision is made with respect to the tender offer. Stockholders of the Company
will be able to obtain a free copy of these documents (when they become available)
and other documents filed by the Company with the SEC at the website maintained
by the SEC at www.sec.gov. In addition, stockholders of the Company will be able
to obtain a free copy of these documents (when they become available) from the
Company by contacting the Company at 21411 Prairie Street, Chatsworth, California
91311, attention General Counsel.