Item 2.01. Completion of Acquisition or Disposition of Assets.
The Merger became effective upon the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware (the "Effective Time"). At the
Effective Time, each share of Presidio common stock, par value $0.01 per share
(the "Common Stock"), issued and outstanding immediately prior to the Effective
Time (excluding Cancelled Shares, Converted Shares and Dissenting Shares) was
converted into the right to receive $16.60 in cash, without interest, subject to
applicable withholding taxes (the "Merger Consideration").
At the Effective Time, each option to purchase shares of Common Stock ("Company
Option") vested (with performance-based Company Options vesting to the extent of
achievement of the applicable performance goals) and was cancelled and converted
into and what became the right to receive an amount in cash, without interest,
equal to the product of (1) the Merger Consideration, less the applicable
exercise price, multiplied by (2) the number of shares of Common Stock subject
to such Company Option, less applicable withholding taxes. Notwithstanding
anything to the contrary in the Merger Agreement, with respect to Company
Options in which the exercise price per share was greater than or equal to the
Merger Consideration, such Company Options were cancelled for no consideration.
The foregoing description of the Merger and the Merger Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Merger Agreement and Amendment No. 1 to the Merger Agreement, which were filed
as Exhibits 2.1 to the Current Report on Form 8-K filed by the Company with the
Securities and Exchange Commission (the "SEC") on August 14, 2019 and
September 25, 2019, respectively, and are incorporated by reference into this
Item 2.01.
The information set forth in the Introductory Note and the disclosure regarding
the Merger and Merger Agreement under Item 5.01 of this Current Report on Form
8-K is incorporated by reference into this Item 2.01.
Item 3.01. Notice of Delisting for Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
In connection with the closing of the Merger, the Company notified the NASDAQ
Global Select Market ("NASDAQ") that the Certificate of Merger had been filed
with the Secretary of State of the State of Delaware and that, at the Effective
Time, each share of Common Stock (other than Cancelled Shares, Converted Shares
and Dissenting Shares) was converted into the right to receive the Merger
Consideration. In addition, the Company requested that NASDAQ delist the Common
Stock, and as a result, trading of the Common Stock, which trades under the
ticker symbol "PSDO" on NASDAQ, was suspended after the close of trading on
NASDAQ on December 18, 2019. The Company also requested that NASDAQ file a
notification of removal from listing and registration on Form 25 with the SEC to
effect the delisting of the Common Stock from NASDAQ and the deregistration of
the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). As a result, the Common Stock will no longer be
listed on NASDAQ.
In addition, the Company intends to file a certification on Form 15 with the
SEC, requesting the termination of registration of the Common Stock under
Section 12(g) of the Exchange Act and the suspension of reporting obligations
under Sections 13 and 15(d) of the Exchange Act with respect to the Common
Stock.
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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.
Item 3.03. Material Modification to Rights of Security Holders.
At the Effective Time, as a result of the Merger, each holder of Common Stock
issued and outstanding immediately prior to the Effective Time ceased to have
any rights as stockholders of the Company, other than the right to receive the
Merger Consideration (except in the case of Cancelled Shares, Converted Shares
and Dissenting Shares).
The information set forth in the Introductory Note and under Items 2.01, 3.01,
5.01, 5.02 and 5.03 of this Current Report on Form 8-K is incorporated by
reference into this Item 3.03.
Item 5.01. Change in Control of Registrant.
As a result of the completion of the Merger, a change in control of the Company
occurred, and the Company became an indirect, wholly owned subsidiary of Parent.
Parent and Merger Sub are affiliates of funds advised by BC Partners Advisors
L.P. ("BC Partners").
To complete the Merger and related transactions, Parent has used funds in an
amount up to approximately $2.2 billion, which was funded through equity
contributions by funds advised by BC Partners and proceeds from debt financing.
The information set forth in the Introductory Note and under Items 2.01 and 5.02
of this Current Report on Form 8-K is incorporated by reference into this Item
5.01.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
At the Effective Time, pursuant to the terms of the Merger Agreement, Heather
Berger, Christopher L. Edson, Salim Hirji, Steven Lerner, Matthew H. Nord,
Pankaj Patel, Michael Reiss and Todd H. Siegel resigned from the board of
directors of the Company.
In connection with the Merger, Robert Cagnazzi, Neil O. Johnston, David Hart,
Vinu Thomas and Elliot Brecher (the "Executive Officers") entered into
amendments to their employment agreements (the "Employment Agreements") that
(i) increased the cash severance multiples applicable to each Executive Officer
upon a severance-qualifying termination during the two years following a change
in control and (ii) increased the period of months used to determine the cash
payment in lieu of medical and dental benefits. The Employment Agreements
provide that upon a termination without cause or resignation with good reason in
connection with or during the two years following a change in control, subject
to the Executive Officer's execution of a release of claims, each Executive
Officer is entitled to (i) a multiple (3.0x for Mr. Cagnazzi, 2.5x for Messrs.
Hart, Johnston and Thomas and 2.0x for Mr. Brecher) of the sum of the Executive
Officer's annual base salary and target annual bonus as in effect immediately
prior to the change in control, payable in installments over a period of months
(30 for Mr. Cagnazzi, 18 for Messrs. Hart, Johnston and Thomas, and 12 for
Mr. Brecher), (ii) a prorated annual bonus for the fiscal year in which such
termination of employment occurs, assuming performance metrics have been
satisfied at target, payable in a lump sum on the date on which the Company
otherwise makes annual bonus payments to actively employed executives for such
fiscal year and (iii) a lump-sum cash payment equal to the cost of monthly
medical and dental coverage for a period of months (36 months for Mr. Cagnazzi
and 24 months for each other Executive Officer), payable on the first payroll
date immediately following the 30th day after the date of termination.
Parent entered into a rollover agreement with Mr. Cagnazzi, pursuant to which
Mr. Cagnazzi contributed, immediately prior to the Effective Time, a total of
363,656 shares of Common Stock to Parent in exchange for a number of Class A-2
limited partnership units in Parent with an aggregate value of $6,036,690 (the
"Cagnazzi Rollover Agreement"). Parent also
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entered into a rollover agreement with Mr. Hart, pursuant to which Mr. Hart
contributed, immediately prior to the Effective Time, a total of 90,362 shares
of Common Stock to Parent in exchange for a number of Class A-2 limited
partnership units in Parent with an aggregate value of $1,500,009 (the "Hart
Rollover Agreement", and together the "Rollover Agreements"). Parent also
entered into cash investment subscription agreements with each of Mr. Cagnazzi,
Vincent Trama, Michael Kelly, Mr. Thomas, Mr. Johnston and Mr. Brecher, pursuant
to which (i) Mr. Cagnazzi purchased a number of Class A-2 limited partnership
units in Parent having an aggregate value equal to $5,673,500, which represents
two-thirds of the aggregate cash consideration received by Mr. Cagnazzi in the
Merger in respect of his Company Options net of all income taxes payable in
respect thereof, (ii) Mr. Trama purchased a number of Class A-2 limited
partnership units in Parent having an aggregate value equal to $200,000, which
represents approximately 76% of the aggregate cash consideration received by
Mr. Trama in the Merger in respect of his Company Options net of all income
taxes payable in respect thereof, (iii) Mr. Kelly purchased a number
of Class A-2 limited partnership units in Parent having an aggregate value equal
to $100,000, which represents approximately 34% of the aggregate cash
consideration received by Mr. Kelly in the Merger in respect of his Company
Options net of all income taxes payable in respect thereof, (iv) Mr. Thomas
purchased a number of Class A-2 limited partnership units in Parent having an
aggregate value equal to $250,000, which represents approximately 32% of the
aggregate cash consideration received by Mr. Thomas in the Merger in respect of
his Company Options net of all income taxes payable in respect thereof,
(v) Mr. Johnston purchased a number of Class A-2 limited partnership units in
Parent having an aggregate value equal to $100,000, which represents
approximately 69% of the aggregate cash consideration received by Mr. Johnston
in the Merger in respect of his Company Options net of all income taxes payable
in respect thereof and (vi) Mr. Brecher purchased a number of Class A-2 limited
partnership units in Parent having an aggregate value equal to $100,000, which
represents approximately 21% of the aggregate cash consideration received by
Mr. Brecher in the Merger in respect of his Company Options net of all income
taxes payable in respect thereof.
Pursuant to the Cagnazzi Rollover Agreement, Parent will establish a management
incentive equity plan (the "MIEP") pursuant to which Parent will grant profits
interests to certain members of the Company's management team. The aggregate
pool of profits interests will represent a specified percentage of the accreted
value following the Effective Time if minimum performance thresholds are
achieved and an increased percentage of such accreted value if higher
performance thresholds are achieved. Profits interests granted under the MIEP
will vest over five equal annual installments beginning on the first anniversary
of the grant date, subject to continued service, with all outstanding profits
interests vesting on a subsequent change in control of the Company. Unvested
profits interests will terminate upon any termination of employment and vested
profits interests will be subject to customary call rights upon certain
. . .
Item 5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In accordance with the Merger Agreement, the certificate of incorporation and
bylaws of Merger Sub in effect immediately prior to the Effective Time became
the form of the certificate of incorporation and form of the bylaws of the
Surviving Company at the Effective Time. A copy of such certificate of
incorporation and bylaws are attached hereto as Exhibits 3.1 and 3.2 and
incorporated herein by reference.
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 5.03.
Item 8.01. Other Events.
On the Closing Date, the Company issued a press release announcing the
completion of the Merger. A copy of the press release is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
Exhibit
No. Description
3.1 Third Amended and Restated Certificate of Incorporation of
Presidio, Inc.
3.2 Bylaws of Presidio, Inc.
10.1 Rollover Agreement by and between the Company and Robert Cagnazzi,
dated as of August 14, 2019
10.2 Rollover Agreement by and between the Company and David Hart,
dated as of December 19, 2019
99.1 Press release issued by Presidio, Inc. on December 19, 2019
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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