Item 1.01. Entry into a Material Definitive Agreement.
Stockholders Agreement
At the closing of the Transaction (the "Closing"), pursuant to the Purchase
Agreement, the Company and College Top Holdings, Inc., a Delaware corporation
and an affiliate of College Parent ("College Top Holdings") entered into a
Stockholders Agreement (the "Stockholders Agreement"), pursuant to which, among
other things, the Company appointed the two designees discussed below designated
by College Top Holdings to the board of directors of the Company (the "Board").
Under the Stockholders Agreement, for so long as College Top Holdings
beneficially owns a number of common stock of the Company, par value $0.001 per
share ("Company Common Stock"), representing more than 10% of the then
outstanding Company Common Stock, College Top Holdings will maintain the right
to nominate for election designees designated by College Top Holdings. The
Company will also cause the Board to nominate for election that number of
individuals designated by College Top Holdings that, if elected, would result in
three designees of College Top Holdings serving on the Board until the earlier
of such time as College Top Holdings beneficially owns a number of Company
Common Stock representing less than 30% of the number of outstanding Company
Common Stock, after which time College Top Holding's designation rights will be
reduced to two designees until such time as College Top Holdings beneficially
owns Company Common Stock representing less than 20% of the number of
outstanding Company Common Stock, after which time College Top Holding's
designation rights will be reduced to one designee.
At the Closing, the Board consists of nine directors: two designees of College
Top Holdings and six individuals who were directors of the Company prior to the
Closing. As soon as practicable following the Closing, the Board will also
appoint an additional designee designated by College Top Holdings, who shall be
an independent director under the rules and regulations of Nasdaq Global Select
Market (the "NASDAQ") and the U.S. Securities and Exchange Commission (the
"SEC").
Pursuant to the Stockholders Agreement and subject to certain exceptions,
College Top Holdings agreed, for the Relevant Restricted Period (as defined in
the Stockholders Agreement) after the Closing, not to Transfer (as defined in
the Stockholders Agreement) any Company Common Stock and Company Earnout Shares
(as defined below) held by College Top Holdings as of the Closing after giving
effect to the Pre-Closing Restructuring (as defined in the Purchase Agreement).
The Stockholders Agreement also contains certain restrictions on the Company,
for so long as College Top Holdings continues to beneficially own at least 50%
of the Company Common Stock, the Company may not take the following actions
without the prior written consent of College Top Holdings, such approval not to
be unreasonably withheld: (i) amend the organizational documents of the Company
or any of its material subsidiaries in any manner that would be
disproportionately adverse to College Top Holdings, (ii) change the size of the
Board and (iii) undertake any liquidation, dissolution or winding up of the
Company.
The foregoing description of the Stockholders Agreement does not purport to be
complete and is qualified in its entirety by reference to the Stockholders
Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by
reference herein.
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Registration Rights Agreement
At the Closing, pursuant to the Purchase Agreement, the Company entered into a
. . .
Item 2.01. Completion of Acquisition or Disposition of Assets.
Pursuant to and subject to the terms and conditions set forth in the Purchase
Agreement, at the Closing, (i) the Company contributed to its direct,
wholly-owned subsidiary ("MidCo"), and MidCo contributed to its direct,
wholly-owned subsidiary ("AcquisitionCo"), and AcquisitionCo delivered to
College Top Holdings, $270,000,000 (as adjusted pursuant to the terms of the
Purchase Agreement, including as a result of prepaid expenses) worth of Company
Common Stock in exchange for all of the outstanding shares of common stock of
Edgecast and in consideration of the consummation of the transfers of certain
Edgecast-related businesses and assets held by each of Yahoo India Private
Limited, Edgecast Digital do Brasil Ltda, and Oath (Israel) Ltd. caused by
College Parent and (ii) the Company contributed to MidCo, MidCo contributed to
AcquisitionCo, and AcquisitionCo delivered to College Top Holdings an additional
$30,000,000 worth of Company Common Stock in exchange for a one-time payment by
College Parent of $30,000,000, in each case at the share price of $4.1168 (which
is the 30-day trailing VWAP as of March 4, 2022). In the event that the sale
price of Company Common Stock exceeds certain thresholds during the period
beginning on June 15, 2022 and ending on the third anniversary of the Closing,
the Company will be required to issue up to an additional $100,000,000 worth of
Company Common Stock at certain trigger prices for delivery by AcquisitionCo to
College Parent (or to any affiliate designated by College Parent) in order to
satisfy earnout obligations pursuant to the Purchase Agreement ("Company Earnout
Shares").
Item 3.02. Unregistered Sales of Equity Securities.
The information provided in Item 2.01 of this Current Report with respect to the
portion of the consideration of the Transaction payable in shares of Company
Common Stock pursuant to the Purchase Agreement are incorporated herein by
reference. At the Closing, the Company issued 80,812,429 shares of Company
Common Stock (the "Shares"), as substantially all of the consideration for the
Transaction, to College Top Holdings. The Shares were issued by the Company
pursuant to the Purchase Agreement in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act of 1933, as
amended, and/or Rule 506 under the Securities Act.
Item 3.03. Material Modification to Rights of Security Holders.
The information set forth under the Introductory Note, Item 1.01 and Item 2.01
of this Current Report on Form 8-K is incorporated herein by reference.
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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.
Departure of Directors and Appointment of Directors
On June 15, 2022, in connection with the Transaction and effective as of
immediately following the Closing, the Board increased the size of the Board
from eight (8) to nine (9) directors, and effective as of immediately prior to
the Closing, Jefferey T. Fisher and Marc Debevoise resigned from their roles as
directors of the Company. The resignations were not the result of any
disagreements with the Company relating to the Company's operations, policies or
practices. The following individuals were appointed to the Board as Class II and
Class III directors respectively to fill the vacancies created thereby, to hold
such office until the 2024 annual meeting of stockholders of the Company or the
2025 annual meeting of stockholders of the Company, respectively, or until his
respective successor is duly elected and qualified:
E-Fei Wang - E-Fei Wang is an associate at Apollo, where he has worked since
2017, focusing on private equity investing across various sectors, including
industrials, metals, aerospace, packaging, travel and internet/media. Prior to
joining Apollo, Mr. Wang was an investment banking analyst at Evercore from 2015
through 2017. Mr. Wang graduated from Rice University with a BA in Chemical and
Biomolecular Engineering.
Reed Rayman - Reed Rayman is a partner at Apollo, where he has worked since
2010. Mr. Rayman previously was employed by Goldman Sachs & Co. in both its
Industrials Investment Banking and Principal Strategies groups from 2008 to
2010. Mr. Rayman serves on the board of directors of ADT, Yahoo!, Careerbuilder,
Shutterfly, Coinstar and EcoATM. He previously served on the board of directors
of Mood Media and Redbox. Mr. Rayman graduated cum laude from Harvard with an AB
in Economics. He is actively involved with the TEAK Fellowship, having served as
a mentor and on the Next Generation Board, and also serves on the Private Equity
Executive Council of the UJA Federation of New York.
Dianne Ledingham - Dianne Ledingham is an Advisory Partner in Bain & Company's
Boston office, a leader in Bain's Customer Strategy & Marketing practice, and
the firm's Telecom, Media and Technology practices. With her 30-plus year tenure
at Bain, Ms. Ledingham is one of the firm's most prominent leaders in commercial
and sales excellence with experience across a range of industries and particular
depth in technology and software. In addition, Ms. Ledingham has served on each
of Bain's governance committees including serving on Bain's Board of Directors,
serving on Bain's Global Compensation and Promotion Committee, including as
elected Chair, and serving on Bain's Global Nominating Committee, as elected
Chair. Additionally, Ms. Ledingham is currently serving on the board of City
Year Boston, and former Chair, as well as Treasurer on the board of Ventures for
Hope. Ms. Ledingham holds a degree in electrical engineering with honors from
Brown University and an M.B.A. degree with distinction from Harvard Business
School.
The Company has not yet determined the Board committees on which Mr. Rayman,
Mr. Wang and Ms. Ledingham may sit. Other than the Transaction, there are no
transactions in which Mr. Rayman, Mr. Wang or Ms. Ledingham had or has an
interest that require disclosure under Item 404(a) of Regulation S-K.
The Company also plans to enter into an indemnification agreement with each of
Mr. Rayman, Mr. Wang and Ms. Ledingham in the same form as the indemnification
agreements the Company has entered into with other members of the Board. These
indemnification agreements require the Company to indemnify covered individuals
to the fullest extent permitted by Delaware law against liabilities that may
arise by reason of their service to the Company, and to advance expenses
incurred as a result of any proceeding against them as to which they could be
indemnified.
Departure of the Company's Chief Client Success and Marketing Officer
On June 15, 2022, Christine Cross and the Company entered into a transition
agreement and employment agreement amendment (the "Transition Agreement"),
whereby Ms. Cross will leave her position as the Company's Chief Client Success
and Marketing Officer on July 15, 2022 (the "Separation Date"). Ms. Cross'
duties will be assumed by Bob Lyons, the Company's Chief Executive Officer,
while the Company continues to explore and evaluate the needs and future
leadership of the sales organization.
The Transition Agreement amends the Employment Agreement between the Company and
Ms. Cross dated as of May 11, 2022 (the "Employment Agreement"). In
consideration of Ms. Cross' continued service through the Transition Period (as
defined in the Transition Agreement), which includes being reasonably available
to consult on transition of her duties and responsibilities, and subject to
Ms. Cross executing and not revoking a release of claims, Ms. Cross will also
receive (i) continued payment of her base salary for twelve (12) months; (ii)
the actual bonus
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achieved under the 2022 Management Bonus Plan by Ms. Cross, as prorated through
the Separation Date; (iii) 5,326 restricted stock units currently scheduled to
vest on September 1, 2022 (the "September RSUs"), which shall continue to vest
on such date and (iv) reimbursement for premiums paid for continued health
benefits for herself (and any eligible dependents) under the Company's health
plans until the earlier of (A) twelve (12) months after the Separation Date, or
. . .
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
On June 15, 2022, following completion of the Transaction, the Company filed an
amendment (the "Name Change Amendment") to its Second Amended and Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware to change its name from "Limelight Networks, Inc." to "Edgio, Inc."
(the "Name Change"). In connection with the Name Change, the shares of Company
Common Stock, previously trading on the NASDAQ through the close of business on
June 15, 2022 under the ticker symbol "LLNW," will commence trading on the
NASDAQ under the ticker symbol "EGIO" on June 16, 2022.
A copy of the Name Change Amendment is attached as Exhibit 3.1 to this Current
Report on Form 8-K.
Item 8.01. Other Events.
On June 15, 2022, the Company issued a press release announcing the completion
of the Transaction. A copy of the press release is attached as Exhibit 99.1
hereto and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
Exhibit
No. Description
2.1 Stock Purchase Agreement, dated March 6, 2022, by and between the
Company (formerly Limelight Networks, Inc.) and College Parent
(incorporated by reference to Exhibit 2.1 to the Company's Form 8-K
filed on March 7, 2022)
3.1 Certificate of Amendment of the Second Amended and Restated
Certificate of Incorporation of Edgio, Inc. (f/k/a Limelight Networks,
Inc.) dated June 15, 2022
10.1# Stockholders Agreement, dated June 15, 2022, by and between the
Company (formerly Limelight Networks, Inc.) and College Top Holdings
10.2 Registration Rights Agreement, dated June 15, 2022, by and between
the Company (formerly Limelight Networks, Inc.) and College Top
Holdings
10.3# Transition Agreement and Employment Agreement Amendment, dated
June 15, 2022, by and between the Company (formerly Limelight Networks,
Inc.) and Christine Cross
99.1 Press Release, dated June 15, 2022
104 Cover Page Interactive Data File (formatted as Inline XBRL)
# Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of
this exhibit were omitted by means of marking such portions with an asterisk
because the identified confidential portions (i) are not material and (ii)
would be competitively harmful if publicly disclosed.
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