AXIALL CORP/DE/

Each of the Company’s and Westlake’s obligation to consummate the Merger is subject to a number of conditions specified in the Merger Agreement, including, among others, (i) the adoption of the Merger Agreement by the affirmative vote of the holders of a majority of all outstanding shares of the Company Common Stock, (ii) the receipt of required regulatory approvals, including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and receipt of required approval under the Canadian Competition Act, (iii) the absence of an order, judgment, injunction or law prohibiting the consummation of the Merger, (iv) the accuracy of the other party’s representations and warranties contained in the Merger Agreement (subject to certain materiality standards set forth in the Merger Agreement), and (v) the other party’s compliance with or performance of its covenants and agreements contained in the Merger Agreement in all material respects. The consummation of the Merger is not subject to a financing condition.

The Merger Agreement contains certain termination rights for each party. In addition, the Merger Agreement, in certain circumstances, provides for the payment of a termination fee by the Company to Westlake in the amount of $77.7 million.

The Merger Agreement provides that, upon closing of the Merger, any outstanding and unexercised Company stock options, whether or not vested, will be converted into the right to receive a cash payment equal to the Merger Consideration minus the exercise prices of such options. Any outstanding or payable Company awards (other than Company stock options) under any Company stock plans will be assumed by Westlake and converted into restricted stock units in respect of Westlake common stock (“Westlake Common Stock”), with substantially the same terms and conditions (including with respect to dividend equivalent rights, if any), except that upon settlement the award holder will receive the greater of (i) the value of the Merger Consideration with respect to the shares of Company Common Stock related to the award prior to closing of the Merger and (ii) the value of the Westlake Common Stock. Any account balances under any Company benefit plan that provides for the deferral of compensation and represents amounts notionally invested in Company Common Stock or provides for distributions or benefits calculated based on the value of Company Common Stock will be converted into the right to receive an amount in cash calculated based on the Merger Consideration.

Legal and settlement claims, net. Legal and settlement claims, net, totaled $23.4 million during the three months ended June 30, 2016. On September 19, 2014, three employees at our Natrium, West Virginia facility (“Natrium Facility”) were injured while changing a valve on a caustic line in the manufacturing plant at such facility. One of the employees eventually died of his injuries. The estate of our deceased employee, and the other two injured employees, have filed lawsuits against one of our subsidiaries, Eagle Natrium LLC (“Eagle Natrium”), seeking damages for personal injury, death, pain and suffering. Following discovery and court ordered mediation of these lawsuits, we have recorded accruals for these lawsuits of $34.5 million in the aggregate. Liability relating to these lawsuits in excess of $25 million is expected to be reimbursed to us pursuant to the indemnity provisions of our excess liability insurance policies and, as such, we also have recorded an offsetting receivable from our insurance carriers of $9.5 million. In addition, we received proceeds of $1.6 million from a favorable recovery relating to the British Petroleum Company’s Deepwater Horizon Oil Spill (the “BP Deepwater Oil Spill”) that occurred in April 2010.

The Merger is subject to receipt of approval from our shareholders as well as satisfaction of other conditions in the Merger Agreement.

The Merger Agreement contains a number of conditions to completion of the Merger, including, among others, (i) adoption of the Merger Agreement by the affirmative vote of the holders of a majority of all outstanding shares of the Company Common Stock, (ii) the receipt of required regulatory approvals, including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the Canadian Competition Act (each of which has been obtained), (iii) the absence of an order, judgment, injunction or law prohibiting the consummation of the Merger, (iv) the accuracy of the other party’s representations and warranties contained in the Merger Agreement (subject to certain materiality standards set forth in the Merger Agreement), and (v) the other party’s compliance with or performance of its covenants and agreements contained in the Merger Agreement in all material respects. There is no assurance that all of the conditions will be satisfied, or that the Merger will be completed on the proposed terms, within the expected timeframe, or at all. Many of the conditions to completion of the Merger are not within either our or Westlake’s control, and neither company can predict when or if these conditions will be satisfied. Any delay in completing the Merger could cause us not to realize some or all of the benefits that we expect to achieve if the Merger is successfully completed within its expected timeframe.

Uncertainty about the effect of the Merger on employees, suppliers and customers may have an adverse effect on us. These uncertainties may impair our ability to attract, retain and motivate key personnel until the Merger is completed, and could cause customers and others that deal with us to seek to change existing business relationships with us. Retention and motivation of certain employees by us may be challenging while the Merger is pending, as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with us, our business could be harmed. In addition, there could be distractions to or disruptions for our employees and management associated with obtaining the required regulatory approvals to close the Merger. Our suppliers and customers may experience uncertainty with the Merger, including with respect to current or future business relationships following the Merger. Our business relationships may be subject to disruption as customers, distributors, suppliers, vendors and others may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than us. These disruptions could have an adverse effect on our business operations and financial results. The risks, and adverse effects, of such disruptions could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement.