Item 1.01. Entry into a Material Definitive Agreement.
On January 26, 2021, Xerox Holdings Corporation (the "Company") entered into a
Nomination and Standstill Agreement with Carl C. Icahn and certain of his
affiliates (collectively, the "Icahn Group" and such agreement, the "Icahn
Nomination Agreement") and a separate Nomination and Standstill Agreement with
Darwin Deason ("Deason" and such agreement, the "Deason Nomination Agreement"
and, together with the Icahn Nomination Agreement, the "Nomination Agreements").
Consistent with the Director, Nomination and Settlement Agreement dated May 13,
2018 by and among Deason, the Icahn Group, Xerox Corporation and certain current
and former directors and officers of Xerox Corporation (the "2018 Nomination
Agreement"), the Company and the Icahn Group have agreed pursuant to the Icahn
Nomination Agreement that each of current directors Keith Cozza and Nicholas
Graziano shall be designated as an "Icahn Designee" on the Company's Board of
Directors (the "Board") and current director Jonathan Christodoro shall be
designated as an "Independent Designee" on the Board.
Consistent with the 2018 Nomination Agreement, the Company and Deason have
agreed pursuant to the Deason Nomination Agreement that current director Scott
Letier shall be designated as the "Deason Designee" on the Board.
Pursuant to the applicable Nomination Agreement, and subject to the terms and
conditions therein, the Company has agreed to include the two Icahn Designees,
the Independent Designee and the Deason Designee on the Company's slate of
director nominees for election at the 2021 annual meeting of shareholders (the
"2021 Slate" and such annual meeting, the "2021 Annual Meeting"), subject to the
right of the Icahn Group or Deason, as applicable, to replace any or all of the
foregoing designees with designees selected by the Icahn Group or Deason, as
applicable, and approved by the Company, such approval not to be unreasonably
withheld or delayed, and that otherwise satisfy the requirements of the
applicable Nomination Agreement, including that any replacement of the
Independent Designee satisfies the Independence Requirements as defined and set
forth in the Icahn Nomination Agreement.
Pursuant to the applicable Nomination Agreement, if any Icahn Designee, the
Independent Designee or the Deason Designee resigns from the Board or for any
other reason, following his or her election or appointment thereto, is not
serving, on the Board (other than as a result of not being nominated by the
Company for election at an annual meeting of shareholders or not being elected
by shareholders of the Company at any annual meeting), then subject to the terms
set forth in the
- 2 -
--------------------------------------------------------------------------------
applicable Nomination Agreement, the Icahn Group or Deason, as applicable, has
the right to designate a replacement that is approved by the Company, such
approval not to be unreasonably withheld or delayed, and that otherwise
satisfies the requirements of the applicable Nomination Agreement, including
that any replacement of the Independent Designee satisfies the Independence
Requirements as defined and set forth in the Icahn Nomination Agreement.
The Company is not required pursuant to any Nomination Agreement to include the
Icahn Designees, the Independent Designee or the Deason Designee on any slate of
directors other than the 2021 Slate, but for any annual meeting of shareholders
subsequent to the 2021 Annual Meeting, the Company has agreed to notify the
Icahn Group or Deason, as applicable, no less than forty-five days before the
advance notice deadline set forth in the Company's Amended & Restated Bylaws
whether any Icahn Designee and/or the Independent Designee (in the case of the
Icahn Group) or the Deason Designee (in the case of Deason) will be nominated by
the Company for election as a director at such annual meeting.
Pursuant to the Icahn Nomination Agreement, one Icahn Designee is required to
resign from the Board if the Icahn Group does not have a Net Long Position (as
defined in the Icahn Nomination Agreement) in at least 19,838,590 shares of
common stock, par value $1.00 per share, of the Company ("Common Shares"), and
both Icahn Designees are required to resign from the Board if the Icahn Group
does not have a Net Long Position (as defined in the Icahn Nomination Agreement)
in at least 9,919,295 Common Shares. Pursuant to the Deason Nomination
Agreement, the Deason Designee is required to resign from the Board if Deason
does not have a Net Long Position (as defined in the Deason Nomination
Agreement) in at least 9,919,295 Common Shares. The foregoing thresholds
specified in each Nomination Agreement are subject to adjustment for any stock
dividends, combinations, splits, recapitalizations, repurchases and the like.
Pursuant to the Icahn Nomination Agreement, so long as both Icahn Designees are
members of the Board, without the approval of the Icahn Designees who are then
members of the Board, the Board cannot increase in size above nine directors.
Pursuant to the Deason Nomination Agreement, if Deason's Net Long Position (as
defined in the Deason Nomination Agreement) represents ten percent or more of
the outstanding Common Shares (such percentage to be computed in accordance with
the terms set forth in the Deason Nomination Agreement) and the Deason Designee
is a member of the Board, without the approval of the Deason Designee, the Board
cannot increase in size above the greater of nine directors or the number of
members on the Board when this right becomes applicable under the Deason
Nomination Agreement.
Under each of the Nomination Agreements, the Icahn Group, Deason and their
respective controlled affiliates have agreed not to take certain actions during
the period from the date of such agreements through the later to occur of the
conclusion of the 2021 Annual Meeting and the date that no Icahn Designee (in
the case of the Icahn Group) or the Deason Designee (in the case of Deason) is a
member of the Board and no longer has any replacement rights with respect to any
such designee. The actions that the Icahn Group, Deason and their respective
controlled affiliates have agreed not to take pursuant to the applicable
Nomination Agreement include: (i) soliciting proxies or written consents of
shareholders of the Company; (ii) presenting at any annual meeting or any
special meeting of the Company's shareholders or through action by written
consent any proposal for consideration for action by shareholders of the Company
or (except as explicitly
- 3 -
--------------------------------------------------------------------------------
permitted by the applicable Nomination Agreement) proposing any nominee for
election to the Board or seeking representation on the Board or the removal of
any member of the Board; (iii) acquiring Beneficial Ownership (as defined in the
applicable Nomination Agreement) of Voting Securities (as defined in the
applicable Nomination Agreement) that would equal or exceed 24.99% of the then
total outstanding Voting Securities (as defined in the applicable Nomination
Agreement), subject to adjustment in the event the Company adopts a Rights Plan
(as defined in the applicable Nomination Agreement) and allows any person to buy
a greater percentage of Voting Securities (as defined in the applicable
Nomination Agreement) pursuant to the terms thereof; or (iv) without the prior
approval of the Board, proposing, participating in or seeking to effect any
Extraordinary Transaction (as defined in the applicable Nomination Agreement),
subject to certain exceptions set forth in the applicable Nomination Agreement.
Under each Nomination Agreement, subject to the terms set forth therein, during
the applicable Board Representation Period (as defined in the applicable
Nomination Agreement), the Icahn Group and Deason have each agreed to vote (or
cause to be voted) all Voting Securities (as defined in the applicable
Nomination Agreement) owned of record or beneficially thereby (i) for all
directors nominated by the Board for election at any annual or special meeting
of shareholders (so long as the Icahn Designees (in the case of Icahn Group) or
the Deason Designee (in the case of Deason) are either nominated by the Board or
will otherwise continue to be on the Board after such meeting), (ii) against any
directors proposed that are not nominated by the Board for election at such
annual or special meeting, and (iii) for the ratification of the Company's
auditors.
Pursuant to each Nomination Agreement, the parties thereto have agreed to
negotiate in good faith a registration rights agreement covering the shares of
capital stock of the Company owned by the Icahn Group and Deason, with some of
the material terms of such agreement being set forth on an Exhibit to the
applicable Nomination Agreement.
The foregoing descriptions of the Nomination Agreements do not purport to be
complete and are qualified in their entirety by reference to the complete text
of such Nomination Agreements, which are filed as Exhibits 10.1 and 10.2 to this
Current Report on
Form 8-K,
respectively, and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Nomination and Standstill Agreement, dated as of January 26, 2021,
by and among Xerox Holdings Corporation, Carl C. Icahn and the other
parties named therein
10.2 Nomination and Standstill Agreement, dated as of January 26, 2021,
by and between Xerox Holdings Corporation and Darwin Deason
104 Cover Page Interactive Data File (the cover page tags are embedded
within the Inline XBRL document)
- 4 -
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses