Item 1.02 Termination of a Material Definitive Agreement.
On December 30, 2020, in connection with the consummation of the Merger (as
defined herein), the Affiliated Company Credit Agreement, dated November 28,
2017 (as amended, the "Affiliated Company Credit Agreement"), by and among
CONSOL Coal Resources LP, a Delaware limited partnership (the "Partnership"), as
borrower, certain subsidiaries of the Partnership party thereto, CONSOL Energy
Inc., a Delaware corporation ("CEIX"), as lender and administrative agent, and
PNC Bank, National Association, as collateral agent, was terminated, all
obligations and guarantees thereunder repaid and discharged and all liens
granted in connection therewith released. In connection with the termination of
the Affiliated Company Credit Agreement and in exchange for, and in satisfaction
of, payment of the outstanding balance of approximately $176.5 million
thereunder, the Partnership issued 37,322,410 common units representing limited
partner interests in the Partnership ("Partnership Common Units") to CEIX.
The material terms of the Affiliated Company Credit Agreement were previously
disclosed in the Current Reports on Form 8-K filed by CEIX with the Securities
and Exchange Commission ("SEC") on December 4, 2017 and April 3, 2019 and, to
the extent applicable, the disclosure relating to the Affiliated Company Credit
Agreement under Item 1.01 of each such Current Report on Form 8-K is
incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On October 22, 2020, CEIX, Transformer LP Holdings Inc., a Delaware corporation
and a wholly owned subsidiary of CEIX ("Holdings"), Transformer Merger Sub LLC,
a Delaware limited liability company and a wholly owned subsidiary of Holdings
("Merger Sub"), the Partnership and CONSOL Coal Resources GP LLC, a Delaware
limited liability company and the general partner of the Partnership (the
"General Partner"), entered into an Agreement and Plan of Merger (the "Merger
Agreement"), pursuant to which Merger Sub would merge with and into the
Partnership, with the Partnership surviving as an indirect, wholly owned
subsidiary of CEIX (the "Merger").
On December 30, 2020, the parties to the Merger Agreement completed the Merger.
Pursuant to the Merger Agreement, at the effective time of the Merger (the
"Effective Time"), (i) each outstanding Partnership Common Unit other than
Partnership Common Units owned by CEIX and its subsidiaries (each, a "Public
Common Unit") converted into the right to receive, subject to adjustment as
described in the Merger Agreement, 0.73 shares of common stock, par value $0.01
per share, of CEIX (the "CEIX Common Stock" and the shares of CEIX Common Stock
issued in the Merger, the "Merger Consideration") and (ii) each of the
outstanding phantom units and any other awards relating to a Partnership Common
Unit issued under the Partnership Long-Term Incentive Plans (as defined in the
Merger Agreement), whether vested or not vested, became fully vested and
automatically converted into the right to receive, with respect to each
Partnership Common Unit subject thereto, the Merger Consideration (plus any
accrued but unpaid amounts in relation to distribution equivalent rights).
Except for the incentive distribution rights representing limited partner
interests in the Partnership, which were automatically canceled immediately
prior to the Effective Time for no consideration in accordance with the Third
Amended and Restated Agreement of Limited Partnership of CONSOL Coal Resources
LP, dated as of November 28, 2017 (the "Partnership Agreement"), the limited
partner interests in the Partnership owned by CEIX and its subsidiaries
immediately prior to the Effective Time remain outstanding as limited partner
interests in the surviving entity. The economic general partner interest in the
Partnership converted into a non-economic general partner interest in the
surviving entity, and the General Partner continued as the sole general partner
of the surviving entity.
Pursuant to the Merger Agreement, CEIX issued approximately 7.9 million shares
of CEIX Common Stock to the holders of Partnership Common Units as Merger
Consideration as described above.
The Merger Agreement is filed as Exhibit 2.1 to CEIX's Current Report on Form
8-K filed with the SEC on October 23, 2020, which agreement is incorporated
herein by reference. The foregoing summary has been included to provide
investors and security holders with information regarding the terms of the
Merger Agreement and is qualified in its entirety by the terms and conditions of
the Merger Agreement. It is not intended to provide any other factual
information about CEIX, the Partnership or their respective subsidiaries and
affiliates.
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Item 5.07 Submission of Matters to a Vote of Security Holders.
In connection with the completion of the Merger, CEIX held a special meeting of
CEIX stockholders at 9:00 a.m. (Eastern Time) on December 29, 2020 (the "CEIX
Stockholder Meeting"), during which the CEIX stockholders considered two
proposals, each of which is described in more detail in the consent solicitation
statement/proxy statement/prospectus filed by CEIX with the SEC on November 30,
2020. The final vote results for each proposal were as follows:
Proposal 1: The Stock Issuance Proposal
The CEIX stockholders approved, by the affirmative vote of a majority of the
total votes cast, which, under New York Stock Exchange rules includes votes for,
votes against and abstentions, with abstentions (if any) having the same effect
as a vote against, the issuance of shares of CEIX Common Stock as the Merger
Consideration in connection with the Merger (the "Stock Issuance Proposal").
The following are the tabulated votes "For" and "Against" this proposal, as well
as the number of "Abstentions" and "Broker Non-Votes":
Votes For Votes Against Abstentions Broker Non-Votes
17,823,670 40,761 29,775 -
Proposal 2: Adjournment of the Special Meeting
The CEIX stockholders also approved the adjournment of the CEIX Stockholder
Meeting to solicit additional proxies, if necessary, but no adjournment of the
CEIX Stockholder Meeting was necessary because the CEIX stockholders approved
the Stock Issuance Proposal.
Item 7.01 Regulation FD Disclosure.
CEIX and the Partnership issued a joint press release on December 30, 2020
announcing the results of the CEIX Stockholder Meeting and the closing of the
Merger. A copy of the press release is attached hereto as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.
The information set forth in this Item 7.01 and the attached Exhibit 99.1 shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description of the Exhibit
2.1* Agreement and Plan of Merger, dated as of October 22, 2020, by and
among CONSOL Energy Inc., Transformer LP Holdings Inc., Transformer
Merger Sub LLC, CONSOL Coal Resources GP LLC and CONSOL Coal Resources
LP (incorporated by reference to Exhibit 2.1 to CEIX's Current Report
on Form 8-K filed on October 23, 2020, File No. 38147).
99.1 Press Release dated December 30, 2020.
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL.
* The schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K
and will be provided to the Securities and Exchange Commission upon request.
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