Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in the Introductory Note and under Items 3.03, 5.01
and 5.03 of this Current Report on Form 8-K is incorporated by reference into
this Item 2.01.
In accordance with the terms of the Merger Agreement, on February 25, 2022, at
the effective time of the Merger (the "Effective Time"), Acquisition Sub merged
with and into the Company, with the Company continuing as the surviving
corporation in the Merger as a direct, wholly owned subsidiary of Parent.
Immediately subsequent to the Effective Time, Parent caused Chatham Delta
Intermediate, Inc., a Delaware corporation and a direct, wholly owned subsidiary
of Parent ("Intermediate Holdings"), to own directly all of the equity interests
of the Company, with the Company continuing as a direct, wholly owned subsidiary
of Intermediate Holdings, and an indirect, wholly owned subsidiary of Parent.
At the Effective Time, each share of Common Stock, par value $0.01 per share, of
the Company ("Company Common Stock") issued and outstanding immediately prior to
the Effective Time (other than Company Common Stock (i) held by the Company
(including shares held as treasury shares) or any of its subsidiaries or Parent,
Acquisition Sub or any of their wholly owned subsidiaries (including the shares
contributed to Parent by certain affiliates of CAM in accordance with the
Capital Commitment Letter (as defined in the Merger Agreement) entered into in
connection with the Merger Agreement), and (ii) held by stockholders who have
properly exercised appraisal rights pursuant to Delaware law (clauses (i) and
(ii), the "Excluded Shares")) was cancelled and extinguished and automatically
converted into the right to receive $10.85 per share in cash, without interest
(the "Merger Consideration").
In addition, at the Effective Time:
• each Company stock option (a "Company Option") that was outstanding
immediately prior to the Effective Time was cancelled without any cash
payment or other consideration made in respect thereof, as all
outstanding Company Options had an exercise price per share of Company
Common Stock that exceeded $10.85;
• each Company time-based restricted stock unit ("Company RSU") that was
outstanding immediately prior to the Effective Time automatically vested
(if unvested) and was cancelled and converted into the right to receive
an amount in cash, without interest, equal to the product of (i) the
total number of shares of Company Common Stock underlying such Company
RSU multiplied by (ii) the Merger Consideration, provided that any
Company RSUs granted between the date of the Merger Agreement and the
Effective Time (the "Interim Period") vested on a pro-rata basis based on
the number of days in the award period preceding the closing of the
Merger, and any such Company RSUs that did not so vest were forfeited for
no consideration;
• each Company time-based phantom restricted stock unit ("Company Phantom
RSU") award that was outstanding immediately prior to the Effective Time
automatically vested (if unvested) and was cancelled and converted into
the right to receive an amount in cash, without interest, equal to the
product of (i) the number of Company Phantom RSUs underlying the award
multiplied by (ii) the Merger Consideration, provided that any Company
Phantom RSUs granted during the Interim Period vested on a pro-rated
. . .
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
The information set forth in the Introductory Note and under Item 2.01 of this
Current Report on Form 8-K is incorporated by reference into this Item 3.01.
In connection with the transactions described in the Introductory Note and under
Item 2.01 of this Current Report on Form 8-K, which are incorporated by
reference into this Item 3.01, on February 25, 2022, the Company notified the
New York Stock Exchange ("NYSE") that the Merger was consummated. As a result,
the Company expects the trading of Company Common Stock on the NYSE to be
suspended no later than prior to the opening of trading on the NYSE on
February 28, 2022. In addition, on February 25, 2022, the Company requested that
the NYSE file with the SEC a notification of removal from listing and
registration on Form 25 to effect the delisting of all shares of Company Common
Stock and the associated preferred stock purchase rights from NYSE and the
deregistration of such of Company Common Stock and the associated preferred
stock purchase rights under Section 12(b) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). As a result, the Company Common Stock
will no longer be listed on the NYSE.
In addition, the Company intends to file a certification on Form 15 with the SEC
requesting the termination of registration of the shares of Company Common Stock
and associated preferred stock purchase rights under Section 12(g) of the
Exchange Act and the suspension of its reporting obligations under Sections 13
and 15(d) of the Exchange Act.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in the Introductory Note and under Items 2.01, 3.01
and 5.03 of this Current Report on Form 8-K is incorporated by reference into
this Item 3.03.
At the Effective Time, each holder of Company Common Stock issued and
outstanding immediately prior to the Effective Time ceased to have any rights as
a stockholder of the Company (other than the right of the holders of Company
Common Stock (other than Excluded Shares) to receive the Merger Consideration
pursuant to the Merger Agreement).
Item 5.01 Changes in Control of Registrant.
The information set forth in the Introductory Note and Items 2.01, 3.03 and 5.02
of this Current Report on Form 8-K is incorporated by reference into this Item
5.01.
As a result of the Merger, on February 25, 2022, a change in control of the
Company occurred, and the Company is now a direct, wholly owned subsidiary of
Intermediate Holdings, and an indirect, wholly owned subsidiary of Parent.
The aggregate Merger Consideration was approximately $697.5 million, which was
funded through a combination of cash, debt and equity contributions from
affiliates of Parent and debt financing consisting of new incremental term loans
arranged by Jefferies Finance LLC and a draw on the Company's amended
asset-based revolving credit facility, which amendment became effective at the
Effective Time and was arranged by Wells Fargo Bank, National Association.
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
The information set forth in the Introductory Note and Item 2.01 of this Current
Report on Form 8-K is incorporated by reference into this Item 5.02.
Directors
In accordance with the Merger Agreement, effective as of, and immediately
following, the Effective Time, all of the members of the board of directors of
the Company immediately prior to the Effective Time ceased to be directors of
the Company. Immediately following the Effective Time, Thomas J. Quinlan, III,
Eugene A. Castagna, Edward P. Taibi, Jeffrey K. Dorsey, R. Elaine Lintecum, Evan
Ratner and Roshan M. Karingada (collectively, the
"New Directors") were appointed as the directors of the Company. At the time of
filing this Current Report on Form 8-K, the committee(s) to which the New
Directors will be named have not yet been determined.
Designation of President and Chief Executive Officer
The Company designated Thomas J. Quinlan, III, as President and Chief Executive
Officer, effective as of February 25, 2022. In connection with Mr. Quinlan's
designation, effective February 25, 2022, Mr. Daniel L. Knotts ceased to serve
as President and Chief Executive Officer of the Company.
Mr. Quinlan, 59, has extensive experience in executive roles at commercial print
and marketing services companies. Mr. Quinlan has specialized expertise in
rebranding traditional businesses and pivoting physical content into the digital
space by leveraging digital marketing, data analytics, business intelligence,
and data management solutions. As Chief Executive Officer of the Company from
2007 to 2016 and LSC Communications from 2016 to 2020, Mr. Quinlan has led
companies through challenging business cycles by transforming, growing, and
recapitalizing business-to-business manufacturing and services businesses. With
deep financial expertise and experience serving as Chief Financial Officer of
the Company from 2006 to 2007, Mr. Quinlan successfully generated cash flow and
value for stakeholders through repositioning, share gains, and expanding
capabilities. Mr. Quinlan has also overseen restructurings, over 50 acquisitions
and integrations, spin-offs and divestitures, and capital markets strategies.
Mr. Quinlan holds an M.B.A. in finance from St. John's University and a B.S. in
business administration from Pace University.
Mr. Quinlan was not selected as an officer pursuant to any arrangement or
understanding between him and any other person. There are no family
relationships between Mr. Quinlan and the directors or executive officers of the
Company or any person nominated or chosen by the Company to become a director or
executive officer of the Company. Mr. Quinlan is not a party to any transaction
requiring disclosure under Item 404(a) of Regulation S-K.
On February 25, 2022, the Company entered into an employment agreement (the
"Employment Agreement") with Mr. Quinlan in connection with his appointment as
President and Chief Executive Officer.
Mr. Quinlan's Employment Agreement provides for an annual base salary of
$950,000, and an annual target bonus of 100% of his annual base salary, subject
to performance. Mr. Quinlan is also entitled to certain severance benefits, if
his employment is terminated without cause or if he resigns with good reason,
including 150% of his annual base salary and target bonus and up to 18 months of
continued "COBRA" health coverage at the applicable active employee cost. The
Employment Agreement also contains certain confidentiality, non-competition,
non-solicitation and other customary restrictions for agreements of this type.
The foregoing summary of Mr. Quinlan's Employment Agreement is qualified in its
entirety by reference to the Employment Agreement, which will be included as an
exhibit to the Company's quarterly report for the quarter ending March 31, 2022
and is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The information set forth in the Introductory Note and Item 2.01 of this Current
Report on Form 8-K is incorporated by reference into this Item 5.03.
At the Effective Time, the certificate of incorporation and bylaws of the
Company were each amended and restated in their entirety as set forth in
Exhibits 3.1 and 3.2, respectively, to this Current Report on Form 8-K, which
exhibits are incorporated by reference into this Item 5.03.
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Item 8.01 Other Events.
On February 25, 2022, a press release announcing the closing of the Merger was
issued. The press release is attached hereto as Exhibit 99.1 and is incorporated
by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of December 14, 2021, by and
among Chatham Delta Parent, Inc., Chatham Delta Acquisition Sub, Inc.
and R. R. Donnelley & Sons Company (incorporated by reference to
Exhibit 2.1 to R. R. Donnelley & Sons Company's Current Report on Form
8-K filed with the SEC on December 17, 2021)
3.1 Amended and Restated Certificate of Incorporation of R. R.
Donnelley & Sons Company
3.2 Amended and Restated Bylaws of R. R. Donnelley & Sons Company
99.1 Press Release dated February 25, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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