Exhibit 10.1
EXECUTION COPY
February 12, 2022
Clayton, Dubilier & Rice Fund VIII, L.P.
CD&R Friends & Family Fund VIII, L.P.
CD&R Pisces Holdings, L.P.
c/o Clayton, Dubilier & Rice, Inc.
375 Park Avenue, 18th Floor
New York, New York 10152
Attention: Theresa Gore
Email: tgore@cdr-inc.com
Re: Stockholders Agreement – Limited Waiver
Ladies and Gentleman:
Reference is made to that certain Stockholders Agreement, dated as of November 16, 2018, by and among Cornerstone Building Brands, Inc., a Delaware corporation (formerly known as NCI Building Systems, Inc.) (the “Company”), Clayton, Dubilier & Rice Fund VIII, L.P., a Cayman Islands exempted limited partnership (“CD&R Fund VIII”), CD&R Friends & Family Fund VIII, L.P., a Cayman Islands exempted limited partnership (“CD&R FF Fund VIII”), CD&R Pisces Holdings, L.P., a Cayman Islands exempted limited partnership (“CD&R Pisces” and, together with CD&R Fund VIII, CD&R FF Fund VIII and their respective affiliates, the “CD&R Investors”), Atrium Intermediate Holdings, LLC, a Delaware limited liability company, GGC BP Holdings, LLC, a Delaware limited liability company, and AIC Finance Partnership, L.P., a Cayman Islands exempted limited partnership (the “Stockholders Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Stockholders Agreement.
Prior to the date hereof, the Board of Directors of the Company (the “Board”) established a special committee (the “Special Committee”) for the purpose of, among other things, considering whether it would be appropriate for the Company to consider a potential transaction in which one or more of the CD&R Investors would acquire all of the outstanding shares of Common Stock of the Company (a “Potential Transaction”). Acting upon the unanimous recommendation of the Special Committee, the Company hereby waives, and shall not enforce, the obligations of the CD&R Investors and their Parent Controlled Affiliates pursuant to Section 3.3(a) of the Stockholders Agreement as and solely to the extent necessary to permit one or more of the CD&R Investors, alone and not jointly or in concert with any other person, to (i) make a proposal to the Company (which shall be directed to the Special Committee) for a Potential Transaction at a price per share not less than the amount recently discussed by the CD&R Investors with representatives of the Special Committee (the “Proposal”); (ii) publicly disclose that one or more of the CD&R Investors has made the Proposal to the Company, along with the
CD&R Investors’ intention to seek to engage in the Potential Transaction referenced in the Proposal by filing amendments to the statements on Schedules 13D and 13D/A previously filed by the CD&R Investors, as applicable, in compliance with the Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided that the CD&R Investors shall provide the Company with a reasonable opportunity to review and comment on drafts of such amendments and shall consider in good faith all comments reasonably proposed by the Company in connection therewith, and (iii) to further engage with the Company (through the Special Committee, unless otherwise directed) to pursue, develop and, if later approved by the Board upon the recommendation of the Special Committee, enter into the Potential Transaction, including negotiating the terms thereof, conducting due diligence, obtaining financing and engaging in other reasonably necessary activities customarily associated with the negotiation of a consensual transaction in the nature of the Potential Transaction (the “Limited Waiver”). It is explicitly understood and agreed that the Limited Waiver may be revoked at any time in the Company’s sole discretion (acting through the Special Committee, unless the Special Committee otherwise determines) prior to the execution of a definitive transaction agreement between the Company and one or more of the CD&R Investors with respect to the Potential Transaction (a “Definitive Agreement”); provided that if a Definitive Agreement is terminated for any reason, the right of the Company (acting through the Special Committee, unless the Special Committee otherwise determines) to revoke the Limited Waiver shall be restored in all respects, it being understood that no such revocation shall retroactively invalidate any statement or action of any CD&R Investor made or taken during the period during which the Limited Waiver was in effect so long as such statement or action was not, at the time made or taken, in breach of the Limited Waiver. The Limited Waiver is in full reservation of, and without any waiver of or agreement not to enforce, all other rights and obligations in the Stockholders Agreement and in the Non-Disclosure Agreement, dated as of January 22, 2022, by and between the Company and Clayton, Dubilier & Rice, LLC, each of which remains in full force and effect in all other respects.
The Company hereby acknowledges that the CD&R Investors previously communicated to the Special Committee, prior to any discussions or communications between the parties regarding potential valuation or price, that the CD&R Investors would only proceed with a Potential Transaction if such Potential Transaction, among other things, would be (i) approved by a fully empowered special committee of non-management directors that are independent of the CD&R Investors and their affiliates and (ii) subject to a non-waivable condition requiring the approval of the holders of a majority of the Common Stock that is not owned by the CD&R Investors or their affiliates. The Company hereby further acknowledges that the determination to enter into this letter agreement has been made by a majority of the Independent Non-CD&R Investor Directors and the Chief Executive Officer of the Company.
This letter agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. The exchange of a fully executed letter agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this letter agreement. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof. For purposes of this letter agreement, the term “affiliate” shall be as such term is defined under the Exchange Act and the term “person” shall be broadly interpreted to include any corporation, partnership, group, governmental body, individual or other entity.
[Signature Page Follows]
Very truly yours,
CORNERSTONE BUILDING BRANDS, INC.
/s/ James S. Metcalf
By: James S. Metcalf
Title: Executive Chairman
ACKNOWLEDGED AND AGREED
AS OF THE DATE FIRST SET
FORTH ABOVE BY:
CLAYTON, DUBILIER & RICE FUND VIII, L.P.
By: CD&R ASSOCIATES VIII, LTD.,
its General Partner
/s/ Rima Simson
By: Rima Simson
Title: Vice President, Treasurer and Secretary
CD&R FRIENDS & FAMILY FUND VIII, L.P.
By: CD&R ASSOCIATES VIII, LTD.,
its General Partner
/s/ Rima Simson
By: Rima Simson
Title: Vice President, Treasurer and Secretary
CD&R PISCES HOLDINGS, L.P.
By: CD&R INVESTMENT ASSOCIATES X, LTD.,
its General Partner
/s/ Rima Simson
By: Rima Simson
Title: Vice President, Treasurer and Secretary
Cc:
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
Attention: Paul S. Bird
Christopher Anthony
Email: psbird@debevoise.com
canthony@debevoise.com
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Attention: David M. Klein, P.C.
Email: dklein@kirkland.com
Exhibit 99.1
CD&R Makes Non-Binding Proposal to Acquire Cornerstone Building Brands
CARY, NC – February 14, 2022 – Cornerstone Building Brands, Inc. (NYSE: CNR) (the “Company”), the largest manufacturer of exterior building products in North America, acknowledges receipt of a non-binding, best and final proposal from funds affiliated with Clayton, Dubilier & Rice, LLC (“CD&R”) to acquire all of the Company’s outstanding shares of common stock that CD&R does not already own for $24.65 in cash per share. CD&R, in the aggregate, is currently the beneficial owner of approximately 49% of the Company’s outstanding shares of common stock. The board of directors of the Company (the “Board”) previously formed a special committee of independent directors (the “Special Committee”) to evaluate and consider any potential or actual proposal from CD&R and any other alternative proposals or other strategic alternatives that may be available to the Company.
The Company cautions its stockholders and others considering trading in its securities that there can be no assurance that any definitive agreement will result from the proposal submitted by CD&R or that any transaction will be consummated in connection therewith. The Company and the Special Committee do not currently intend to comment further about this proposal unless and until a specific transaction is recommended by the Special Committee to, and approved by, the Board.
A copy of CD&R’s proposal letter, dated February 13, 2022, is available as an exhibit to CD&R’s statement of beneficial ownership on Schedule 13D/A as publicly filed today with the Securities and Exchange Commission.
Advisors
Centerview Partners LLC is serving as financial advisor to the Special Committee.
About Cornerstone Building Brands, Inc.
Cornerstone Building Brands is the largest manufacturer of exterior building products for residential and low-rise non-residential buildings in North America. Headquartered in Cary, N.C., we serve residential and commercial customers across the new construction and repair and remodel markets. Our market-leading portfolio of products spans vinyl windows, vinyl siding, stone veneer, metal roofing, metal wall systems and metal accessories. Cornerstone Building Brands’ broad, multichannel distribution platform and expansive national footprint includes more than 20,000 employees at manufacturing, distribution and office locations throughout North America. Corporate stewardship and environmental, social and governance (ESG) responsibility are embedded in our culture. We are committed to contributing positively to the communities where we live, work and play. For more information, visit us at www.cornerstonebuildingbrands.com.
Investor Relations
Tina Beskid
Vice President, Finance and Investor Relations
1-866-419-0042
info@investors.cornerstonebuildingbrands.com
Forward-Looking Statements
Certain statements and information in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “anticipate," “guidance,” “plan,” “potential,” “expect,” “should,” “will,” “forecast,” “target” and similar expressions are forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current expectations, assumptions and/or beliefs concerning future events. As a result, these forward-looking statements rely on a number of assumptions, forecasts, and estimates and, therefore, these forward-looking statements are subject to a number of risks and uncertainties that may cause the Company’s actual performance to differ materially from that projected in such statements. Among the factors that could cause actual results to differ materially include, but are not limited to, those relating to whether any definitive offer will be made, whether the definitive offer will be accepted and approved, whether any agreement will be executed, or whether this or any other transaction will be consummated. In addition to these factors, we encourage you to review the “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and other filings with the SEC, which identify important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements set forth in this document. The Company expressly disclaims any obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.
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