Item 1.01.
Entry into a Material Definitive Agreement.
Amendment
to Merger Agreement
On
June 24, 2020, Waste Management, Inc., a Delaware corporation (the “Company”), entered into Amendment No. 1 (the “Amendment”)
to the Agreement and Plan of Merger, dated as of April 14, 2019 (the “Merger Agreement” and, together with the Amendment,
the “Amended Merger Agreement”), by and among the Company, Everglades Merger Sub Inc., a Delaware corporation and a
wholly-owned indirect subsidiary of the Company (“Merger Sub”), and Advanced Disposal Services, Inc., a Delaware corporation
(“Advanced Disposal”), previously announced on April 15, 2019.
The
Amended Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with
and into Advanced Disposal (the “Merger” and collectively with the other transactions contemplated by the Amended Merger
Agreement, the “Transactions”), with Advanced Disposal continuing as the surviving corporation and as a wholly-owned
indirect subsidiary of the Company.
Under
the terms of the Amended Merger Agreement, the Company, Advanced Disposal and Merger Sub have agreed to reduce the merger consideration
to be paid by the Company for each share of Advanced Disposal common stock, par value $0.01 per share (“Advanced Disposal
Common Stock”), such that each share of Advanced Disposal Common Stock issued and outstanding immediately prior to the effective
time of the Merger (other than shares (i) owned by the Company, Merger Sub or Advanced Disposal or any of their respective subsidiaries
or (ii) for which appraisal rights have been demanded properly in accordance with Section 262 of the General Corporation Law of
the State of Delaware) will be converted into the right to receive $30.30 per share in cash, without interest.
Under
the Amended Merger Agreement, the Company has agreed, among other things, to: (i) use best efforts to obtain approval under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and remove the limitations set
forth in the Merger Agreement on the Company’s obligation to divest or sell assets and take other actions in connection with
using its best efforts to obtain antitrust approval; (ii) remove the obligation that Advanced Disposal reimburse the Company
for up to $15 million for expenses in the event that the Amended Merger Agreement is terminated due to the stockholders of Advanced
Disposal failing to approve the Merger; (iii) increase the termination fee from $150,000,000 to $250,000,000, which the Company
will be required to pay to Advanced Disposal under certain circumstances specified in the Amended Merger Agreement if the Amended
Merger Agreement is terminated because (A) of the issuance of a nonappealable court order or legal restraint prohibiting the Merger
or (B) the Transactions have not been consummated by the End Date (as defined below).
The
Amendment also changes the date after which the Company and Advanced Disposal will have a mutual right to terminate the Merger
Agreement from July 13, 2020 to September 30, 2020 (the “End Date”), which date will automatically extend to November
30, 2020 if any of the Specified Conditions (as defined below, but in the case of clause (iii) of such definition, only to the
extent it is issued pursuant to an antitrust law) have not been satisfied by the End Date (but all other conditions to the Company’s
obligation to close are satisfied, or would be satisfied if the Closing would have occurred, on the End Date).
The consummation
of the Merger remains subject to certain conditions, including (i) approval of the Amended Merger Agreement by the affirmative
vote of the holders of a majority of the outstanding shares of Advanced Disposal Common Stock (the “Stockholder Approval”),
(ii) the expiration or termination of any waiting period under the HSR Act and the rules and regulations promulgated thereunder,
and (iii) the absence of any law or order restraining, enjoining or otherwise prohibiting the Merger (each of the foregoing
conditions, the “Specified Conditions”).
Pursuant
to the Amendment, each party has certified to each other that such party’s closing conditions with respect to the accuracy
of its representations and performance of its covenants, and, with respect to the Company’s and Merger Sub’s obligations
to consummate the Merger, the absence of a Material Adverse Effect (as defined in the Amended Merger Agreement), would be satisfied
as of June 24, 2020 if the closing of the Merger were to be June 24, 2020. In addition, each of the parties acknowledged that,
to the parties’ respective knowledge, as of the date of the Amendment, no occurrence has occurred that would prevent the
closing of the Merger. The Company and Merger Sub have also agreed to not assert that any of such conditions are not satisfied
at the Closing as a result of what such parties had knowledge of as of the date of the Amendment.
The Board of Directors
of Advanced Disposal (the “Advanced Disposal Board”) has unanimously (i) determined that the Merger and the Transactions
are fair to, and in the best interests of Advanced Disposal and its stockholders, and approved and declared advisable the Amendment
and the Transactions, including the Merger, (ii) approved the execution and delivery by Advanced Disposal of the Amendment, the performance by Advanced Disposal of the Amended Merger Agreement and the consummation of the Transactions, including the
Merger, upon the terms and subject to the conditions set forth in the Amended Merger Agreement, (iii) recommended the adoption
of the Amended Merger Agreement by the stockholders of Advanced Disposal and (iv) directed that the adoption of the Amended
Merger Agreement be submitted to a vote of Advanced Disposal’s stockholders.
Except
as expressly modified pursuant to the Amendment, the Merger Agreement, which was previously filed as Exhibit 2.1 to the Current Report on Form 8-K with the Securities and Exchange Commission (“SEC”) by the Company on April 15, 2019, remains in
full force and effect. The foregoing description of the Amendment and the transactions contemplated thereby does not purport to
be complete and is qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 2.1 hereto and
is incorporated herein by reference.
Amended
and Restated Voting Agreement
In
addition to, and concurrently with the execution of the Amended Merger Agreement, on June 24, 2020, Canada Pension Plan Investment
Board (the “Key Stockholder”) representing approximately 18% of the outstanding Advanced Disposal Common Stock entered
into an Amended and Restated Voting and Support Agreement (as amended and restated, the “Voting Agreement”) with the
Company, pursuant to which, among other things, and subject to the terms and conditions set forth therein, the Key Stockholder
has agreed to vote its shares of Advanced Disposal Common Stock in favor of the adoption of
the Amended Merger Agreement and against any alternative proposal. The Voting Agreement automatically terminates upon the earliest
to occur of (i) the Expiration Time (defined in the Voting Agreement as the earlier to occur of (x) the effective time of
the Merger and (y) such date and time as the Amended Merger Agreement has been validly terminated in accordance with its terms)
and (ii) the election of the Key Stockholder in its sole discretion to terminate the Voting Agreement promptly following any amendment
of any term in the Amended Merger Agreement that reduces or changes the form of consideration payable under the Amended Merger
Agreement.
The
above description of the Voting Agreement and the transactions contemplated thereby is not complete and is qualified in its entirety
by reference to the Voting Agreement, a copy of which is filed as Exhibit 2.2 to this report and incorporated herein by reference.