What is the primary purpose of this 8-K filing?

This 8-K filing announces that Lam Research Corporation has entered into a material definitive agreement to merge with Novellus Systems, Inc. It provides key details about the terms of the merger, conditions for completion, and related agreements.

How will Novellus shareholders be compensated in the merger?

Novellus Systems, Inc. shareholders will receive 1.125 shares of Lam Research Corporation common stock for each share of Novellus common stock they hold. Cash will be provided in lieu of fractional shares of Lam common stock.

What are the key conditions that must be met for the merger to be completed?

The merger is subject to several conditions, including approval by the shareholders of both Lam Research and Novellus, expiration of the Hart-Scott-Rodino Act waiting period, effectiveness of the Form S-4 registration statement, and the absence of any legal prohibitions. Both companies must also maintain accuracy in their representations and warranties.

Are there any financial penalties if the merger agreement is terminated?

Yes, the merger agreement includes a provision for a termination fee of $120,000,000, which may be payable by either Lam or Novellus depending on the specific circumstances leading to the termination.

LRCX 8-K: Material Agreements

Summary

Lam Research Corporation (LRCX) has filed an 8-K report detailing a material definitive agreement for a merger with Novellus Systems, Inc. This transaction, effective December 14, 2011, involves Lam acquiring Novellus through a merger where Novellus will survive as a wholly-owned subsidiary of Lam. The terms of the merger stipulate that Novellus common stock will be converted into Lam common stock at an exchange ratio of 1.125 shares of Lam for each share of Novellus, with adjustments for options and restricted stock units. Holders of Novellus stock will receive cash in lieu of fractional Lam shares. This merger is subject to customary closing conditions, including shareholder approvals from both companies, regulatory approvals (such as the Hart-Scott-Rodino Act), and effectiveness of Lam's S-4 registration statement. The agreement includes covenants for both companies to operate in the ordinary course of business and to not solicit alternative transactions. A significant detail for investors is the potential for a $120 million termination fee payable by either party under specific circumstances. The filing also outlines the process for obtaining further information through a joint proxy statement/prospectus and provides forward-looking statements regarding the potential benefits and risks associated with the merger.

Key Highlights

1Lam Research Corporation (LRCX) announces a definitive merger agreement with Novellus Systems, Inc.
2The transaction is structured as a merger where Novellus will become a wholly-owned subsidiary of Lam.
3Novellus shareholders will receive 1.125 shares of Lam common stock for each Novellus share they own.
4Stock options and restricted stock units of Novellus will be converted into equivalent instruments for Lam common stock.
5The merger is contingent upon shareholder approvals from both companies and various regulatory clearances, including HSR approval.
6A termination fee of $120 million is stipulated, payable by either party under specified conditions.
7Lam and Novellus have agreed to customary interim operating covenants and restrictions on soliciting alternative offers.

LAM RESEARCH CORP 8-K Report, Material Agreement (Dec 15, 2011)

Summary

Key Highlights

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