Item 8.01 Other Events.
As previously disclosed, on
Litigation Related to the Merger
Following the initial filing of the Proxy Statement with the
The Stockholder Actions allege that, among other things, the Proxy Statement fails to disclose certain allegedly material information in violation of Section 14(a) and Section 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as well as Rule 14a-9 under the Exchange Act. The Enguehard Action further alleges that the directors of Jagged Peak failed to fulfill their fiduciary duties in connection with the Merger by purportedly initiating a process to sell Jagged Peak in a transaction that undervalues Jagged Peak. The complaints seek injunctive relief enjoining the Merger and damages and costs, among other remedies. Copies of the complaint in each of the Stockholder Actions are attached hereto as Exhibit 99.1, 99.2, 99.3, 99.4, 99.5 and 99.6, respectively, and incorporated by reference herein.
It is possible that additional, similar complaints may be filed or the complaints described above may be amended. If this occurs, Jagged Peak does not intend to announce the filing of each additional, similar complaint or any amended complaint unless it contains materially new or different allegations. Although Jagged Peak cannot predict the outcome of or estimate the possible loss or range of loss from these matters, Jagged Peak and Jagged Peak's defendant directors believe that these complaints are without merit and intend to vigorously defend them.
Jagged Peak believes that no supplemental disclosures are required under applicable laws; however, in order to avoid the risk of the Stockholder Actions delaying the Merger and minimize the expense of defending the Stockholder Actions, and without admitting any liability or wrongdoing, Jagged Peak is voluntarily making certain disclosures below that supplement those contained in the Proxy Statement. These disclosures, and disclosures on certain other matters, are provided in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, Jagged Peak specifically denies all allegations in the foregoing complaints, including that any additional disclosure was or is required.
SUPPLEMENT TO PROXY STATEMENT
Jagged Peak is supplementing the Proxy Statement with certain additional information set forth below. These disclosures should be read in connection with the Proxy Statement, which should be read in its entirety. All page references are to pages in the Proxy Statement, and terms used below, unless otherwise defined, have the meanings set forth in the Proxy Statement. New text is underlined and bolded, and deleted text is stricken through.
The disclosure on page 66 is hereby supplemented by adding the following sentence at the end of the last paragraph on the page.
The mutual confidentiality agreement with Company E was on customary terms, did not contain a "don't ask, don't waive" provision, permitted private offers during the standstill period and provided that the standstill provisions would fall-away if Jagged Peak entered into an agreement similar to the merger agreement.
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The disclosure on page 68 is hereby supplemented by adding the following sentence at the end of the last paragraph on the page.
The mutual confidentiality agreement with
The disclosure on page 88 of the Proxy Statement is hereby supplemented by inserting the following as line items on the table at the top of the page under the heading "Oil and Gas Strip Pricing" and revising footnote (1) in such table as follows: Interest expense
$ 20 $ 50 $ 50 $ 47 $ 40 $ 33 Unlevered free cash flow (calculated as free cash flow plus interest expense) (4)$ (126 ) $ (116 ) $ 24 $ 158 $ 206 $ 212 Unlevered free cash flow (calculated as EBITDA less capital expenditures and cash taxes excluding the effect of interest expense) (5)$ (142 ) $ (116 ) $ 24 $ 158 $ 206 $ 212
______________
(1) EBITDA is defined as earnings before interest, taxes, depreciation,
depletion and amortization, adjusted for exploration expense. EBITDA is not a
measure of financial performance under GAAP. Accordingly, it should not be
considered as a substitute for net income (loss), operating income (loss) or
other measures prepared in accordance with GAAP. 2025E EBITDA used by RBCCM in
its discounted cash flow analysis to derive the terminal value was
(4) Arithmetically derived by RBCCM for purposes of its discounted cash flow analysis based on estimates of Jagged Peak's management. Unlevered free cash flow is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss) or other measures prepared in accordance with GAAP.
(5) Arithmetically derived by Citi for purposes of its discounted cash flow
analysis based on estimates of Jagged Peak's management; assumes additional
leasehold and acquisition-related capital expenditures of approximately
The disclosure on page 88 of the Proxy Statement is hereby supplemented by inserting the following as line items on the table at the bottom of the page under the heading "Wall Street Consensus Pricing" and revising footnote (1) in such table as follows: Interest expense
$ 20 $ 49 $ 45 $ 36 $ 30 $ 29 Unlevered free cash flow (calculated as free cash flow plus interest expense) (4)$ (121 ) $ (96 ) $ 151 $ 296 $ 338 $ 341 Unlevered free cash flow (calculated as EBITDA less capital expenditures and cash taxes excluding the effect of interest expense) (5)$ (136 ) $ (96 ) $ 151 $ 296 $ 338 $ 345
______________
(1) EBITDA is defined as earnings before interest, taxes, depreciation,
depletion and amortization, adjusted for exploration expense. EBITDA is not a
measure of financial performance under GAAP. Accordingly, it should not be
considered as a substitute for net income (loss), operating income (loss) or
other measures prepared in accordance with GAAP. 2025E EBITDA used by RBCCM in
its discounted cash flow analysis to derive terminal value was
(4) Arithmetically derived by RBCCM for purposes of its discounted cash flow analysis based on estimates of Jagged Peak's management. Unlevered free cash flow is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss) or other measures prepared in accordance with GAAP.
(5) Arithmetically derived by Citi for purposes of its discounted cash flow
analysis based on estimates of Jagged Peak's management; assumes additional
leasehold and acquisition-related capital expenditures of approximately
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The disclosure on page 89 of the Proxy Statement is hereby supplemented by inserting the following as line items on the table in the middle of the page under the heading "Oil and Gas Strip Pricing" and revising footnote (1) in such table as follows: Interest expense
$ 60 $ 123 $ 123 $ 123 $ 123 $ 123 Unlevered free cash flow (calculated as free cash flow plus interest expense) (4)$ 162 $ 281 $ 202 $ 215 $ 389 $ 496 Unlevered free cash flow (calculated as EBITDA less capital expenditures and cash taxes excluding the effect of interest expense) (5)$ 163 $ 281 $ 144 $ 189 $ 363 $ 471
______________
(1) EBITDA is defined as earnings before interest, taxes, depreciation,
depletion and amortization, adjusted for exploration expense. EBITDA is not a
measure of financial performance under GAAP. Accordingly, it should not be
considered as a substitute for net income (loss), operating income (loss) or
other measures prepared in accordance with GAAP. 2025E EBITDA used by RBCCM in
its discounted cash flow analysis to derive terminal value was
(4) Arithmetically derived by RBCCM for purposes of its discounted cash flow analysis based on estimates of Jagged Peak's management. Unlevered free cash flow is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss) or other measures prepared in accordance with GAAP.
(5) Arithmetically derived by Citi for purposes of its discounted cash flow analysis based on estimates of Jagged Peak's management. Unlevered free cash flow is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss) or other measures prepared in accordance with GAAP.
The disclosure on page 89 of the Proxy Statement is hereby supplemented by inserting the following as line items on the table at the bottom of the page under the heading "Wall Street Consensus Pricing" and revising footnote (1) in such table as follows: Interest expense
$ 60 $ 123 $ 123 $ 123 $ 123 $ 123 Unlevered free cash flow (calculated as free cash flow plus interest expense) (4)$ 182 $ 345 $ 440 $ 489 $ 668 $ 778 Unlevered free cash flow (calculated as EBITDA less capital expenditures and cash taxes excluding the effect of interest expense) (5)$ 182 $ 345 $ 382 $ 463 $ 643 $ 752
______________
(1) EBITDA is defined as earnings before interest, taxes, depreciation,
depletion and amortization, adjusted for exploration expense. EBITDA is not a
measure of financial performance under GAAP. Accordingly, it should not be
considered as a substitute for net income (loss), operating income (loss) or
other measures prepared in accordance with GAAP. 2025E EBITDA used by RBCCM in
its discounted cash flow analysis to derive terminal value was
(4) Arithmetically derived by RBCCM for purposes of its discounted cash flow analysis based on estimates of Jagged Peak's management. Unlevered free cash flow is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss) or other measures prepared in accordance with GAAP.
(5) Arithmetically derived by Citi for purposes of its discounted cash flow analysis based on estimates of Jagged Peak's management. Unlevered free cash flow is not a measure of financial performance under GAAP. Accordingly, it should not be considered as a substitute for net income (loss), operating income (loss) or other measures prepared in accordance with GAAP.
The disclosure on page 108 of the Proxy Statement is hereby supplemented by revising the third and fourth sentences of the paragraph summarizing the discounted cash flow analysis of Jagged Peak as follows:
Citi calculated terminal values for Jagged Peak by applying to Jagged Peak's fiscal year 2023 estimated EBITDA a selected range of EBITDA multiples of 4.5x to 5.5x selected based on Citi's professional judgment and taking into account, among other things, observed EBITDA trading multiples of Jagged Peak and the . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 99.1 Complaint filed byEric Sabatini onNovember 8, 2019 in theUnited States District Court for the District of Delaware . 99.2 Complaint filed byJean-Pierre Enguehard onNovember 12, 2019 in the District Court, City and County ofDenver, Colorado . 99.3 Complaint filed byKelly Small onNovember 19, 2019 in theUnited States District Court for the Southern District of New York . 99.4 Compliant filed bySherrie Wynne onNovember 20, 2019 in theUnited States District Court for the District of Colorado . 99.5 Complaint filed byMark Prinzel onNovember 25, 2019 in theUnited States District Court for the Southern District of New York . 99.6 Complaint filed byStephen Bushansky onDecember 5, 2019 in theUnited States District Court for the District of Colorado . 104 Cover page interactive data file (embedded within the Inline XBRL document). 7
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