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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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TRIBUNE PUBLISHING COMPANY
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(Name of Registrant as Specified In Its Charter)
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N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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1.
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Consider and vote on a proposal (the “Merger Proposal”) to adopt the Agreement and Plan of Merger, dated as of February 16, 2021, as it may be amended from time to time (the “Merger Agreement”), by and among the Company, Tribune Enterprises, LLC (“Parent”) and Tribune Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”);
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2.
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Consider and vote on a proposal (the “Merger Compensation Proposal”) to approve, by non-binding, advisory vote, certain compensation arrangements for the Company’s named executive officers in connection with the Merger (defined below); and
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3.
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Consider and vote on a proposal (the “Adjournment Proposal”) to approve the adjournment of the Special Meeting from time to time, if necessary, to continue to solicit votes for the Merger Proposal.
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Philip G. Franklin
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Terry Jimenez
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Chair of the Board of Directors
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Chief Executive Officer and Member of the Board of Directors
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1.
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Consider and vote on a proposal (the “Merger Proposal”) to adopt the Agreement and Plan of Merger, dated as of February 16, 2021, as it may be amended from time to time (the “Merger Agreement”), by and among the Company, Tribune Enterprises, LLC (“Parent”) and Tribune Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”);
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2.
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Consider and vote on a proposal (the “Merger Compensation Proposal”) to approve, by non-binding, advisory vote, certain compensation arrangements for the Company’s named executive officers in connection with the Merger (defined below); and
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3.
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Consider and vote on a proposal (the “Adjournment Proposal”) to approve the adjournment of the Special Meeting from time to time, if necessary, to continue to solicit votes for the Merger Proposal.
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1.
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Consider and vote on a proposal (the “Merger Proposal”) to adopt the Agreement and Plan of Merger, dated as of February 16, 2021 as it may be amended from time to time (the “Merger Agreement”), by and among the Company, Tribune Enterprises, LLC (“Parent”) and Tribune Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”);
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2.
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Consider and vote on a proposal (the “Merger Compensation Proposal”) to approve, by non-binding, advisory vote, certain compensation arrangements for the Company’s named executive officers in connection with the Merger (defined below); and
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3.
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Consider and vote on a proposal (the “Adjournment Proposal”) to approve the adjournment of the Special Meeting, from time to time, if necessary, to continue to solicit votes for the Merger Proposal.
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Proposal 1
MERGER PROPOSAL
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For further information please see page 28.
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Proposal 2
MERGER COMPENSATION PROPOSAL
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For further information please see page 87.
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Proposal 3
ADJOURNMENT PROPOSAL
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For further information please see page 89.
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Approval of the Merger Proposal requires the affirmative vote of (i) at least two-thirds of the shares of our common stock (other than shares “owned” by Parent or Merger Sub and their “affiliates” and “associates” (as each such term is defined in Section 203 of the Delaware General Corporation Law (the “DGCL”))) outstanding and (ii) a majority in voting power of the outstanding shares of common stock entitled to vote on such matter. With respect to the Merger Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions and broker non-votes will have the same effect as a vote “AGAINST” approval of the Merger Proposal.
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Approval of the Merger Compensation Proposal requires the affirmative vote of at least a majority of the outstanding shares of common stock present virtually or represented by proxy at the Special Meeting. The Merger Compensation Proposal is an advisory vote and the results will not be binding on the Board or the Company. With respect to the Merger Compensation Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Abstentions will have the same effect as a vote “AGAINST” approval of the Merger Compensation Proposal. Broker non-votes will not have an effect on the Merger Compensation Proposal.
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Approval of the Adjournment Proposal also requires the affirmative vote of at least a majority of the outstanding shares of common stock present virtually or represented by proxy at the Special Meeting. With respect to the Adjournment Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you abstain from voting on the Adjournment Proposal, the abstention will have the same effect as a vote “AGAINST” the Adjournment Proposal. Broker non-votes will not have an effect on the Adjournment Proposal.
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Vote by Internet. Stockholders of record may submit proxies over the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial stockholders may vote by accessing the website specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for Internet voting availability.
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Vote by Telephone. Stockholders of record may submit proxies using any touch-tone telephone from within the United States by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial owners may vote using any touch-tone telephone from within the United States by calling the number specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for telephone voting availability.
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Vote by Mail. You can vote by mail by completing, signing, and dating the proxy card or voting instruction form and returning it in the prepaid return envelope, if printed copies of the proxy materials were requested. If you are a stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by the Board of Directors. If you are a beneficial owner and you return your signed voting instruction form but do not indicate your voting preferences, please see “What are ‘broker non-votes’ and how do they affect the proposals?” regarding whether your broker, bank, or other holder of record may vote your uninstructed shares on a particular proposal.
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Vote Online at the Special Meeting. As the Special Meeting is virtual-only, stockholders as of the Record Date can vote online during the Special Meeting by visiting www.virtualshareholdermeeting.com/TPCO2021 and following the instructions found on your proxy card. If you are a beneficial owner, you must obtain a legal proxy from your broker, bank, or other holder of record and virtually present it to the inspector of election with your ballot to be able to vote at the Special Meeting. Even if you plan to virtually attend the Special Meeting, we recommend that you also vote either by telephone, by Internet, or by mail so that your vote will be counted if you later decide not to attend.
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delivering a written notice of such revocation to our Corporate Secretary at 560 W. Grand Avenue, Chicago, Illinois 60654, 312-222-2102, which must be received by us before the Special Meeting;
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timely delivering a valid, subsequent proxy by Internet, by telephone, or by mail; or
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voting online at the Special Meeting.
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✔
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Your Board of Directors recommends a vote FOR the adoption of the Merger Agreement and transactions contemplated thereby.
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Under the Merger Agreement, in connection with the closing of the Merger, (i) each option to purchase shares of common stock (each, a “Company Option”) that is outstanding immediately prior to the Effective Time, whether or not vested, will automatically become fully vested and canceled and converted into the right to receive an amount in cash, equal to the product of (x) the amount by which the Merger Consideration exceeds the applicable exercise price per share of common stock of such Company Option, and (y) the number of shares of common stock issuable in respect of such fully vested Company Option as of immediately prior to the Effective Time and, (ii) each restricted stock unit entitling the holder to delivery of shares of common stock, subject to satisfaction of vesting or other forfeiture conditions (each, a “Company RSU”) that is outstanding immediately prior to the Effective Time, whether or not vested, will automatically be canceled and converted into the right to receive an amount in cash, equal to the product of (x) the Merger Consideration and (y) common stock underlying such Company RSU (and then adding, if applicable, the value of any dividend-equivalent rights accrued with respect to such Company RSU as of the Effective Time).
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Pursuant to Mr. Jimenez’s employment agreement, which was amended on February 15, 2021 to extend the term of the agreement, which would otherwise have expired on April 3, 2021, Mr. Jimenez is entitled to severance benefits in the event that his employment with the Company is terminated for any reason other than death, disability, or for “cause” or if he resigns for “good reason” (each as defined in his employment agreement).
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Pursuant to Mr. Lavey’s employment agreement, Mr. Lavey is entitled to severance benefits in the event that his employment with the Company is terminated for any reason other than death, disability, or for “cause” or if he resigns for “good reason” (each as defined in his employment agreement).
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The Company’s directors and officers will be entitled to certain ongoing indemnification and coverage under directors’ and officers’ liability insurance policies pursuant to the Merger Agreement (as described in the section entitled “The Merger Agreement—Indemnification; Directors’ and Officers’ Insurance” beginning on page 85).
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Parent and Merger Sub are affiliates of the Alden Funds, which collectively own 31.6% of the issued and outstanding common stock of the Company. Additionally, pursuant to the Amended and Restated Cooperation Agreement, dated as of July 1, 2020, by and among the Company, the Alden Funds and Alden (the “A&R Cooperation Agreement”), each of Christopher Minnetian (“Mr. Minnetian”), Dana Goldsmith Needleman (“Ms. Needleman”) and Mr. Smith was appointed to the Board as a designee of the Alden Funds. Mr. Smith is one of the founding members of Alden Global Capital and serves as its Chief of Investments. Mr. Minnetian, Ms. Needleman and Mr. Smith did not attend or vote at the Board meeting held regarding the Merger and alternatives thereto.
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Common Stock. Each share of our common stock outstanding immediately prior to the Effective Time (other than shares held by Parent, Merger Sub and their affiliates and associates and certain other excluded shares and dissenting shares) will be converted into the right to receive $17.25 in cash, without interest.
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Company Options. At the Effective Time, each Company Option that is outstanding immediately prior to the Effective Time, whether or not vested, will automatically be canceled and converted into the right to receive an amount in cash equal to the product of (i) the amount by which the Merger Consideration exceeds the applicable exercise price per share of such Company Option, and (ii) the number of shares of common stock issuable in respect of such fully vested Company Option as of immediately prior to the Effective Time.
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Company Restricted Stock Units. At the Effective Time, each Company RSU that is outstanding immediately prior to the Effective Time, whether or not vested, will become fully vested and automatically be canceled and converted into the right to receive an amount in cash equal to the product of (i) the Merger Consideration, and (ii) the number of shares of common stock underlying such Company RSU (and then adding, if applicable, the value of any dividend-equivalent rights accrued with respect to such Company RSU as of the Effective Time).
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by either Parent or the Company, if:
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the Merger has not been consummated on or before December 31, 2021 (the “End Date”);
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any court has issued an order permanently restraining, enjoining or otherwise prohibiting the Merger and such order or other action is, or has become, final and non-appealable;
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at the Special Meeting, including any adjournment or postponement thereof, the Company’s stockholders do not approve the Merger Proposal; or
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there is an uncured breach by the other party of any representation, warranty or covenant that results in the failure of the related closing condition to be satisfied.
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by the Company, if:
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prior to the Company Stockholder Approval, the Board authorizes the Company to enter into a written agreement for a Superior Proposal, subject to the Company having first complied with certain matching rights and other obligations set forth in the Merger Agreement and paid the Termination Fee (as defined below); or
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the Company has irrevocably confirmed to Parent that all of its conditions to the Merger, including the parties’ mutual conditions to the Merger, have been satisfied (other than those conditions that by their terms are to be satisfied at the closing of the Merger or have been waived by the Company), the Company is ready, willing and able to consummate the closing of the Merger and Parent and Merger Sub nonetheless fail to complete the closing of the Merger when required by the Merger Agreement.
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by Parent, if:
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prior to receipt of the Company Stockholder Approval, the Board makes an Adverse Recommendation Change; or
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the Company materially breaches its non-solicitation obligations and such breach results in an Acquisition Proposal.
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The Company terminates the Merger Agreement in order to enter into an agreement for a Superior Proposal;
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Parent terminates the Merger Agreement if (i) prior to receipt of the Company Stockholder Approval, an Adverse Recommendation Change has occurred or (ii) the Company has materially breached its non-solicitation obligations and such breach has led to receipt of an Acquisition Proposal;
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Either Parent or the Company terminates the Merger Agreement if (i) prior to receipt of the Company Stockholder Approval (x) the Merger has not been consummated by the End Date, (y) the Company’s stockholders do not approve Merger Agreement at the Special Meeting or (z) Parent terminates the Merger Agreement due to the Company’s uncured material breach of the Merger Agreement and (ii) prior to the termination of the Merger Agreement, an Acquisition Proposal is publicly announced prior to the Special Meeting and not withdrawn prior to the date of termination or prior to the date of the Special Meeting, and (iii) within 12 months after termination of the Merger Agreement, the Company enters into a definitive agreement in respect of, or the Board approves or recommends, an Acquisition Proposal, or an Acquisition Proposal is consummated (with the percentages set forth in the definition of such term in the Merger Agreement changed from 20% to 50%).
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✔
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Your Board of Directors recommends a vote FOR the non-binding, advisory vote on the compensation of the Company’s named executive officers in connection with the Merger.
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✔
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Your Board of Directors recommends a vote FOR the proposal to enable the adjournment of the Special Meeting, from time to time, if necessary to continue to solicit votes for the Merger Proposal.
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Merger Proposal. Consider and vote on the Merger Proposal to adopt the Agreement and Plan of Merger, dated as of February 16, 2021 as it may be amended from time to time, by and among the Company, Tribune Enterprises, LLC and Tribune Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent.
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Merger Compensation Proposal. Consider and vote on the Merger Compensation Proposal to approve, by non-binding, advisory vote, certain compensation arrangements for the Company’s named executive officers in connection with the Merger (defined below).
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Adjournment Proposal. Consider and vote on a proposal to approve the adjournment of the Special Meeting, from time to time, if necessary, to continue to solicit votes for the Merger Proposal.
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Vote by Internet. Stockholders of record may submit proxies over the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial stockholders may vote by accessing the website specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for Internet voting availability.
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Vote by Telephone. Stockholders of record may submit proxies using any touch-tone telephone from within the United States by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial owners may vote using any touch-tone telephone from within the United States by calling the number specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for telephone voting availability.
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Vote by Mail. You can vote by mail by completing, signing, and dating the proxy card or voting instruction form and returning it in the prepaid return envelope, if printed copies of the proxy materials were requested. If you are a stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by the Board of Directors. If you are a beneficial owner and you return your signed voting instruction form but do not indicate your voting preferences, please see “What are ‘broker non-votes’ and how do they affect the proposals?” regarding whether your broker, bank, or other holder of record may vote your uninstructed shares on a particular proposal.
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Vote Online at the Special Meeting. As the Special Meeting is virtual-only, stockholders as of the Record Date can vote online during the Special Meeting by visiting www.virtualshareholdermeeting.com/TPCO2021 and following the instructions found on your proxy card. If you are a beneficial owner, you must obtain a legal proxy from your broker, bank, or other holder of record and virtually present it to the inspector of election with your ballot to be able to vote at the Special Meeting. Even if you plan to virtually attend the Special Meeting, we recommend that you also vote either by telephone, by Internet, or by mail so that your vote will be counted if you later decide not to attend.
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delivering a written notice of such revocation to our Corporate Secretary at 560 W. Grand Avenue, Chicago, Illinois 60654, 312-222-2102, which must be received by us before the Special Meeting;
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timely delivering a valid, subsequent proxy by Internet, by telephone, or by mail; or
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voting online at the Special Meeting.
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the Merger Proposal;
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the Merger Compensation Proposal; and
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the Adjournment Proposal.
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Merger Proposal. Approval of the Merger Proposal requires the affirmative vote of (i) at least two-thirds of the shares of our common stock (other than shares “owned” by Parent or Merger Sub and their “affiliates” and “associates” (as each such term is defined in Section 203 of the DGCL)) outstanding and (ii) a majority in voting power of the outstanding shares of common stock entitled to vote on such matter. With respect to the Merger Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” For purposes of the Merger Proposal, if you fail to submit a proxy or vote virtually at the Special Meeting, or abstain, or you do not provide your bank, brokerage firm or other nominee with instructions, as applicable, this will have the same effect as a vote “AGAINST” approval of the Merger Proposal. If your shares of our common stock are held in “street name” by your bank, brokerage firm or other nominee and you do not instruct the nominee how to vote your shares, the failure to instruct your nominee will have the same effect as a vote “AGAINST” the Merger Proposal.
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Merger Compensation Proposal. Approval of the Merger Compensation Proposal requires the affirmative vote of at least a majority of the outstanding shares of common stock present virtually or represented by proxy at the Special Meeting. The Merger Compensation Proposal is an advisory vote and the results will not be binding on the Board or the Company. With respect to the Merger Compensation Proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” For purposes of the Merger Compensation Proposal, if you abstain this will have the same effect as a vote “AGAINST” approval of the Merger Compensation Proposal. If your shares of our common stock are held in “street name” by your bank, brokerage firm or other nominee and you do not instruct the nominee how to vote your shares, the failure to instruct your nominee will not have an effect on the Merger Compensation Proposal.
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Adjournment Proposal. Approval of the Adjournment Proposal requires the affirmative vote of at least a majority of the outstanding shares of common stock present virtually or represented by proxy at the Special Meeting. With respect to the Adjournment Proposal, you may vote “FOR,” “AGAINST” or
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Vote by Internet. Stockholders of record may submit proxies over the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial stockholders may vote by accessing the website specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for Internet voting availability.
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Vote by Telephone. Stockholders of record may submit proxies using any touch-tone telephone from within the United States by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial owners may vote using any touch-tone telephone from within the United States by calling the number specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for telephonic voting availability.
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Vote by Mail. You can vote by mail by completing, signing, and dating the proxy card or voting instruction form and returning it in the prepaid return envelope, if printed copies of the proxy materials were requested. If you are a stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by the Board of Directors. If you are a beneficial owner and you return your signed voting instruction form but do not indicate your voting preferences, please see “What are ‘broker non-votes’ and how do they affect the proposals?” regarding whether your broker, bank, or other holder of record may vote your uninstructed shares on a particular proposal.
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Vote Online at the Special Meeting. As the Special Meeting is virtual-only, stockholders as of the Record Date can vote online during the Special Meeting by visiting www.virtualshareholdermeeting.com/TPCO2021 and following the instructions found on your proxy card. If you are a beneficial owner, you must obtain a legal proxy from your broker, bank, or other holder of record and virtually present it to the inspector of election with your ballot to be able to vote at the Special Meeting. Even if you plan to virtually attend the Special Meeting, we recommend that you also vote either by telephone, by Internet, or by mail so that your vote will be counted if you later decide not to attend.
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delivering a written notice of such revocation to our Corporate Secretary at 560 W. Grand Avenue, Chicago, Illinois 60654, 312-222-2102, which must be received by us before the Special Meeting;
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timely delivering a valid, subsequent proxy by Internet, by telephone, or by mail; or
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voting online at the Special Meeting.
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✔
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Your Board of Directors recommends a vote FOR the adoption of the Merger Agreement and the transactions contemplated thereby.
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an extraordinary corporate transaction following the consummation of the Merger involving the Company’s corporate structure, business or management, such as a merger, reorganization or liquidation;
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the purchase, sale or transfer of a material amount of assets of the Company or any of its subsidiaries; or
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any other material changes to the Company’s corporate structure or business.
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each of Mr. Minnetian, Ms. Needleman and Mr. Smith, members of the Board, in order to avoid any potential conflicts of interest, did not attend or vote at any Board meeting held regarding the Merger and alternatives thereto;
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the Merger consideration of $17.25 per share, without interest, to be paid solely in cash, provides immediate cash liquidity to the Company’s stockholders, thus eliminating any uncertainty in valuing the Merger consideration and represents a premium of approximately 45% to the closing price of the Company’s common stock on NASDAQ on December 11, 2020, the last trading day prior to the Board receiving Alden Global Capital’s proposal, a premium of approximately 35% to the closing price of the Company’s common stock on NASDAQ on December 30, 2020, the last trading day prior to public disclosure of Alden Global Capital’s proposal, a 21% increase from Alden’s initial offer of $14.25 per share and a premium of approximately 8% to the closing price of the Company’s common stock on NASDAQ on February 12, 2021, the last trading day before the announcement that the Company, Parent and Merger Sub had entered into the Merger Agreement;
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the transaction was structured to include a non-waivable condition requiring the approval by holders of at least (x) 66 2/3% of the outstanding shares of common stock entitled to vote on such matters, other than those “owned” (as defined in Section 203(c)(9) of the DGCL) by Parent or Merger Sub and their affiliates and associates (each as defined in Section 203(c) of the DGCL) and (y) a majority in voting power of the outstanding shares of common stock entitled to vote on such matters.
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the Purchaser Group committed in its initial offer letter dated December 14, 2020 that it would not use its position as a significant stockholder of the Company or ability to nominate directors of the Company (through both the A&R Cooperation Agreement and as stockholders) to coerce the other stockholders to vote in favor of the Merger;
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the Company’s stockholders who do not vote in favor of the Merger Agreement proposal and who comply with certain procedural requirements will be entitled, upon completion of the Merger, to exercise statutory appraisal rights under Delaware law, which allows stockholders to have the fair value of their shares determined and paid to them in cash;
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the requirements or conditions to the Merger are customary in the Purchaser Group’s opinion, and the Merger is not conditioned on any financing being obtained by the Purchaser Group, thus increasing the likelihood that the Merger will be consummated and the Merger consideration will be paid to the stockholders;
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the Board or Special Committee are permitted to withdraw or change its recommendation of the Merger or Merger Agreement, and to terminate the Merger Agreement in certain circumstances;
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the Board established a Special Committee, consisting of unaffiliated and independent directors, to review, evaluate and negotiate the Purchaser Group’s offer, as well as potential alternatives thereto, and make a recommendation to the Board with respect to the Merger;
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the Special Committee was deliberative in its process in analyzing, evaluating and negotiating the terms of the Purchaser Group’s offer and the Merger Agreement;
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the Special Committee retained independent financial and legal advisors, each of which has extensive experience in transactions similar to the proposed Merger;
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the Merger consideration and other terms and conditions of the Merger Agreement resulted from extensive negotiations between the Special Committee (and its advisors) and the Purchaser Group (and its advisors);
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the Special Committee unanimously determined that the Merger Agreement and the Merger are fair to, advisable and in the best interests of, the Company and its stockholders, including the Company’s unaffiliated stockholders; and
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the Special Committee had no obligation to recommend the adoption of the Merger Agreement proposal or any other transactions.
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Amount to
Be Paid
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Financial advisory fees and expenses
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$11,000,000.00
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Legal, accounting and other professional fees
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$3,000,000.00
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SEC filing fees
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$49,303.63
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Proxy solicitation, printing and mailing costs
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$27,000.00
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Transfer Agent and paying agent fees and expenses
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$22,000.00
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Total
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$14,098,303.63
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Amount to
Be Paid
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Financial advisory fees and expenses
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$5,000,000
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Legal, accounting and other professional fees
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$5,800,000
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Total
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$10,800,000
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the review of the Company’s business, current and projected financial condition, current earnings and earnings prospects, including in light of the increasing popularity of digital media and the shift in newspaper readership demographics, consumer habits and advertising expenditures from traditional print to digital media that may continue to adversely affect operating revenues and could require significant capital investments due to changes in technology, and also amidst declining revenues industry-wide;
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the fact that the merger consideration represented a premium of approximately 45% to the closing price of the Company’s common stock on NASDAQ on December 11, 2020, the last trading day prior to the Board receiving Alden Global Capital’s proposal to acquire the Company, a premium of approximately 35% to the closing price of the Company’s common stock on NASDAQ on December 30, 2020, the last trading day prior to public disclosure of Alden Global Capital’s proposal to acquire the Company, a 21% increase from Alden Global Capital’s initial proposal of $14.25 per share and a premium of approximately 8% to the closing price of the Company’s common stock on NASDAQ on February 12, 2021, the last trading day before the announcement that the Company, Parent and Merger Sub had entered into the Merger Agreement;
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the premiums above were especially high given the net cash on the balance sheet was 45%-50% of the undisturbed equity value (i.e., net cash was a significant portion of the undisturbed equity value which was priced at a 35-45% premium);
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•
|
the improvement in the per share price offered by Alden, after negotiation with the Special Committee and its advisors, from $14.25 per share on December 14, 2020 to $16.00 per share of our common stock on February 4, 2021, $16.50 per share on February 6, 2021, $17.00 per share on February 7, 2021 and then finally, after multiple discussions, to $17.25 per share on February 8, 2021, which price the Special Committee believes was in the best interests of the Company and our unaffiliated stockholders and represented the highest per share consideration reasonably attainable at the time;
|
•
|
the belief that other potential strategic alternatives, including continuing to execute its business plan and initiatives as a public company and possible business combinations with potential strategic or financial partners were unlikely to result in a more favorable outcome for the Company and its unaffiliated stockholders:
|
○
|
prior to the entry into the Merger Agreement, in considering the likelihood that any potential acquirors would engage in a transaction with the Company with a value and contractual terms and conditions superior to those contained in the Merger Agreement, the Special Committee and the Board considered the likelihood of other potential acquirers being interested in an acquisition. Such consideration included the fact that Parent’s initial offer was made public on December 31, 2020, and the fact that subsequent news reports on February 11, 2021 stated that the Company was in discussions with Parent, which provided notice and an opportunity for other interested parties to express interest in an acquisition prior to the entry into the Merger Agreement, but no inquiries from any other parties (except Bidder B) relating to a potential acquisition of the Company were received (i.e., the Company received only two alternative proposals to acquire the Company, and both lacked proof of sufficient funds to finance the proposals put forth). The Special Committee and the Board’s view was informed further by input and perspective from Company management and the Special Committee’s advisors, as well as discussions with Mr. Bainum, Bidder B and Bidder C. Ultimately, the Special Committee and the Board considered the likelihood of success in a sale process given that Alden had made it clear it would not support an alternative transaction, as well as the risk that Parent would terminate the discussions if the Special Committee attempted to conduct an alternative sale process. Based on these factors, among others, the Special Committee and the Board concluded that no other actionable acquisition transaction was currently available to the Company as (i) Mr. Bainum’s stated interest in his and his advisors’ communications with the Special Committee and its advisors had been, prior to such time, in acquiring The Sun rather than the Company as a whole and (ii) the indication of interest from Bidder B was subject to substantial risks and uncertainties and further exploration of such indication of interest or any other transaction was unlikely to result in the maximization of stockholder value. Bidder B, like Mr. Bainum, did not make a proposal with evidence of sufficient financing;
|
○
|
in considering Mr. Bainum’s proposal set forth in the April 17 Letter, the Special Committee considered the fact that the proposal is nonbinding, and subject to securing the necessary financing, and Mr. Bainum was only willing to provide a portion ($100,000,000) of the required financing for the acquisition (approximately $650,000,000 in total), and that the proposal was subject to the completion of due diligence and negotiation of definitive documentation. The Special Committee also considered the facts described above regarding Mr. Bainum’s previously stated interest being in acquiring The Sun, rather than the Company as a whole, and Mr. Wyss’ having informed Mr. Bainum that he was no longer interested in providing the level of equity commitment indicated in the Newslight Letter. Accordingly, as of the date of this proxy statement, there can be no assurance that Newslight or Mr. Bainum will make any further proposal, that the Special Committee will determine that any such proposal constitutes or would reasonably be expected to lead to a “Superior Proposal” as defined in the Merger Agreement or that a transaction with Newslight or Mr. Bainum will be approved or consummated on any particular terms or at all. The Special Committee also considered the fact that any transaction with Newslight or Mr. Bainum would likely not be capable of being completed as quickly as the Merger, due to the earlier start that Alden has had on the required stockholder approval process for the Merger, that the waiting period applicable to the Merger under the Hart-Scott-Rodino Act has already expired, and that any transaction with Newslight or Mr. Bainum would require more votes than the Merger by stockholders other than Alden, if, as Alden has indicated, Alden does not vote its shares of Company common stock in favor of any such transaction;
|
○
|
in considering the prospects of continuing as an independent company, the Special Committee and the Board considered the business, operations, management, financial condition, earnings and prospects of, and the risks and challenges facing, including (i) general trends in the newspaper industry, including declining newspaper buying and the migration to other available forms of
|
○
|
in addressing the structural shift to digital media, the Special Committee and the Board considered factors and uncertainties with respect to the Company’s ability to successfully transition from a print-focused media company to a digital platform media company, including its prospects for continuing to deliver editorial content on a wide variety of platforms and formats on social network sites such as Facebook, Apple News and Twitter, on smartphones, tablets and e-readers, on websites and blogs, in niche online publications and in email newsletters;
|
○
|
the Special Committee and the Board also considered the possibility of selling the Company in pieces. Ultimately, a number of considerations made this path both risky and unlikely to lead to higher values, including (i) tax costs related to the divestiture, (ii) large centralized functions which were not scalable as the operation shrunk, (iii) a limited number of strategic buyers with synergies and (iv) contractual liabilities remaining after a series of divestitures; and
|
○
|
based on the value, risk allocation, timing and other terms and conditions negotiated with Parent, the Board ultimately determined that the acquisition by Parent is more favorable to the Company’s unaffiliated stockholders than any other strategic alternative reasonably available to the Company, including continuing as an independent company or engaging in further discussions with Bidder B, Bidder C or any other party (other than Newslight) regarding a potential transaction;
|
•
|
the fact that the form of consideration payable to the Company’s stockholders is cash, which will provide the Company’s stockholders with certainty of value and immediate liquidity, while eliminating the market and long-term business risks related to the Company’s future growth prospects;
|
•
|
the fact that the Merger is not subject to a financing condition and that Parent has secured equity financing commitments that, together with a portion of the Company’s existing cash on hand, are sufficient to pay the amounts required to be paid under the Merger Agreement;
|
•
|
the financial presentation and opinion, dated February 16, 2021, of Lazard provided to the Special Committee as to the fairness, from a financial point of view and as of such date, of the per share Merger Consideration to be received by holders of common stock (other than the Excluded Holders (as defined under “The Merger—Background of the Merger”)) pursuant to the Merger Agreement, which opinion was based on and subject to the various assumptions made, procedures followed, factors considered and limitations and qualifications to the review undertaken by Lazard as further described in the section entitled “The Merger—Opinion of Lazard Frères & Co. LLC” beginning on page 52;
|
•
|
the Special Committee’s and the Board’s belief that, after extensive negotiations, the Company obtained the best terms and highest price that Parent is willing to pay for the Company;
|
•
|
the fact that the Special Committee’s legal and financial advisors were involved throughout the process and negotiations and updated the Special Committee directly and regularly, which provided the Special Committee with additional perspectives on the negotiations;
|
•
|
the Special Committee’s and the Board’s review of the structure of the Merger and the financial and other terms of the Merger Agreement, including, among others, the following specific terms of the Merger Agreement:
|
○
|
the limited and otherwise customary conditions to the parties’ obligations to complete the Merger;
|
○
|
the fact that Parent’s equity commitment includes an obligation for each of Alden Global Opportunities Master Fund, L.P. and Alden Global Value Recovery Master Fund, L.P. to pay to Parent their share of an amount that, together with a portion of the Company’s existing cash on hand, is sufficient for Parent to consummate the Merger and pay the fees and expenses of Parent and Merger Sub related to the transactions, subject to the terms and conditions set forth in the Equity Commitment Letter;
|
○
|
the scope of the representations, warranties and covenants being made by the Company and Parent;
|
○
|
the requirement of Parent to pay the Company liquidated damages of $50,000,000 or 7.9% of the Company’s fully diluted equity value at the transaction value, if the Merger Agreement is terminated by the Company because of certain breaches by Parent or Merger Sub of the Merger Agreement or because Parent has not closed the Merger within two business days after the date the closing of the Merger should have occurred under the Merger Agreement;
|
○
|
the provision allowing the Board to change its recommendation and terminate the Merger Agreement prior to obtaining the Company Stockholder Approval in specified circumstances relating to a Superior Proposal, subject to Parent’s right to receive payment of the Termination Fee;
|
○
|
the provisions requiring the Company and Parent to use their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on their respective parts under the Merger Agreement and applicable law to consummate and make effective the Merger and the other transactions contemplated by the Merger Agreement as promptly as practicable, including, among other things, obtaining required regulatory approvals for the Merger (including, if necessary in order to obtain such regulatory approvals, agreeing to divestitures of assets of the Company representing up to $40,000,000 in revenue in the fiscal year ended December 27, 2020);
|
○
|
the end date for satisfying the conditions to the Merger and the assessment and views of the Special Committee’s regulatory counsel of the likelihood of obtaining required regulatory approvals for a transaction with Parent prior to the end date; and
|
○
|
the other terms and conditions of the Merger Agreement, described in the section entitled “The Merger Agreement” beginning on page 68 of this proxy statement, which the Special Committee and the Board, after consulting with its legal counsel, considered to be reasonable and consistent with precedents it deemed relevant; and
|
•
|
the availability of rights under the DGCL to all holders of common stock who comply with all of the required procedures for perfecting appraisal rights under the DGCL to demand appraisal and receive payment of the fair value of their shares of common stock as determined by the Delaware Court of Chancery. See the section entitled “Appraisal Rights” beginning on page 95 for more information.
|
•
|
that the Special Committee consists of three directors who are independent of the Company, Parent and any of its affiliates;
|
•
|
that the members of the Special Committee are disinterested with respect to the Merger;
|
•
|
that the Special Committee had exclusive authority to decide whether or not to proceed with the Merger, subject to the Board’s approval of the Merger Agreement as required by the DGCL;
|
•
|
that the Special Committee retained and was advised by its own legal and financial advisors;
|
•
|
that the Special Committee was empowered to, among other things: (i) review and evaluate the possible sale of the Company; (ii) identify, review and evaluate alternatives to the possible sale of the Company that may be available to the Company, including remaining as an independent company; (iii) if the Special Committee considers it is advisable or appropriate, negotiate the price, structure, form, terms and conditions of a sale of the Company or any alternative thereto and the form, terms and conditions of any definitive agreements in connection therewith; (iv) determine whether a sale of the Company or any alternative thereto is fair to, advisable and in the best interests of the Company and its unaffiliated
|
•
|
that the Special Committee had no obligation to recommend any transaction, including a transaction with Parent, and that the Special Committee had the authority to reject any proposals made by Parent or any other person; and
|
•
|
that the Merger Agreement is subject to a “supermajority-of-the-minority” voting requirement, pursuant to which the consummation of the Merger is subject to a condition that the Merger Agreement will be approved and adopted by the affirmative vote of holders of two-thirds of the outstanding shares of the Company voting stock (other than shares “owned” by Parent or Merger Sub and their “affiliates” and “associates” (as each such term is defined in Section 203 of the DGCL)).
|
•
|
the fact that, on April 17, 2021, Mr. Bainum communicated to the Special Committee that he remained committed to pursuing a potential acquisition of the Company for $18.50 per share in cash, which is approximately 7% higher than the price per share which Alden has agreed to pay under the Merger Agreement, and with respect to which the Special Committee previously determined to waive certain restrictions under the Bainum Confidentiality Agreement to permit him to approach specified debt and equity financing sources about financing his offer, as well as the fact that, in the April 17 Letter, Mr. Bainum states that he intends to continue to have discussions with other potential equity financing sources as permitted under the Bainum Waiver, or as otherwise consented to by the Special Committee (and after the April 17 Letter, Mr. Bainum requested and received consent from the Special Committee to approach certain additional potential equity financing sources), that he remains confident that there is significant interest in joining his effort to acquire the Company at his proposed price, that he expects the necessary arrangements among one or more additional equity financing sources can be completed expeditiously, that he previously indicated that he believed all necessary due diligence and definitive documentation could be completed within two weeks, that he has substantially completed his necessary due diligence of the Company and that there remains “only a few issues” to be negotiated in the definitive transaction documentation for a Newslight Transaction;
|
•
|
the fact that, if the Merger is consummated, stockholders of the Company will receive the Merger consideration in cash and will no longer have the opportunity to participate in any future earnings or growth of the Company or the surviving company in the Merger, or benefit from any potential future appreciation in the value of the shares of common stock, including any value that could be achieved if the Company engages in future strategic or other transactions;
|
•
|
the potential negative effect of the public announcement and pendency of the Merger on the Company’s business and operations, stock price, relationships with third parties and employees and ability to attract key management and other personnel while the Merger is pending, as well as the potential adverse effects on the financial results of the Company;
|
•
|
the covenant in the Merger Agreement prohibiting the Company from soliciting other potential acquisition proposals, and restricting its ability to entertain potential acquisition proposals;
|
•
|
the fact that the Company would be obligated to pay a termination fee of $20,000,000 under certain circumstances, including the potential impact of such termination fee on the willingness of other potential acquirers to propose alternative transactions, although the Board believed the termination fee was reasonable and customary and would not preclude a serious and financially capable potential acquirer from submitting a proposal to acquire the Company following the announcement of the Merger;
|
•
|
the fact that under the terms of the Merger Agreement, the Company has agreed that it will carry on its business in the ordinary course consistent with past practice and, subject to specified exceptions, that
|
•
|
the fact that Parent’s and Merger Sub’s obligation to consummate the Merger are subject to conditions, and the possibility that such conditions may not be satisfied, including as a result of events outside of the Company’s control, and the fact that, if the Merger is not consummated:
|
○
|
the Company’s directors, senior management and other employees will have expended extensive time and effort and will have experienced significant distractions from their work during the pendency of the Merger;
|
○
|
the Company may have abandoned or delayed certain projects and business opportunities;
|
○
|
the Company will have incurred significant transaction costs; and
|
○
|
the market’s perception of the Company’s prospects could be adversely affected;
|
•
|
the fact that if the Parent fails to complete the Merger as a result of a breach of the Merger Agreement, remedies may be limited under certain circumstances to a termination fee payable by Parent to the Company, which may be inadequate to compensate the Company for the damage caused, and, if available, any rights and remedies may be expensive and difficult to enforce through litigation, and the success of any action may be uncertain;
|
•
|
the fact that not all of the conditions to the completion of the Merger, including the receipt of necessary regulatory approvals, are within the parties’ control, and the fact that Patrick Soon-Shiong’s vote in favor of the transaction is required, based on his current ownership of the common stock, due to the requirement that holders of two-thirds of the outstanding shares (other than shares “owned” by Parent or Merger Sub and their “affiliates” and “associates” (as each such term is defined in Section 203 of the DGCL)) approve the Merger, and that any voting agreement from Dr. Soon-Shiong would have resulted in his vote not counting towards the required approval threshold due to the operation of Section 203 of the DGCL;
|
•
|
the fact that the receipt of the Merger consideration will generally be a taxable transaction to stockholders of the Company for U.S. federal income tax purposes;
|
•
|
the fact that certain of the Company’s executive officers and directors have financial interests in the Merger that may be different from or in addition to those of other stockholders, as more fully described in “The Merger—Interests of the Certain Persons in the Merger” beginning on page 64; and
|
•
|
the possibility that new sources of digital revenue may become available, including as a result of changes in law requiring payments to news providers for content posted on digital platforms.
|
•
|
reviewed the financial terms and conditions of the Merger Agreement;
|
•
|
reviewed certain publicly available historical business and financial information relating to the Company;
|
•
|
reviewed various financial forecasts and other data provided to Lazard by the Company relating to the business of the Company, including a set of forecasts prepared by the management of Company at the request of the Special Committee consisting of a weighted average of 25% of Case A and 75% of Case B (the “Specified Case”) that is described in the section entitled “The Merger—Certain Company Forecasts” beginning on page 59;
|
•
|
held discussions with members of the senior management of the Company with respect to the business and prospects of Company;
|
•
|
reviewed public information with respect to certain other companies in lines of business Lazard believed to be generally relevant in evaluating the business of the Company;
|
•
|
reviewed the financial terms of certain business combinations involving companies in lines of business Lazard believed to be generally relevant in evaluating the business of the Company;
|
•
|
reviewed historical stock prices and trading volumes of common stock; and
|
•
|
conducted such other financial studies, analyses and investigations as Lazard deemed appropriate.
|
•
|
Gannett Co., Inc.
|
•
|
Lee Enterprises, Inc.
|
•
|
News Corporation
|
•
|
The New York Times Company
|
|
| |
EV / 2019
Adjusted
EBITDA
|
| |
EV / LTM
Adjusted
EBITDA
|
| |
EV / 2020E
Adjusted
EBITDA
|
| |
EV / 2021E
Adjusted
EBITDA
|
Gannett Co., Inc.
|
| |
4.4x
|
| |
6.2x
|
| |
6.1x
|
| |
5.7x
|
Lee Enterprises, Inc.
|
| |
4.1x
|
| |
5.0x
|
| |
5.5x
|
| |
N/A
|
News Corporation
|
| |
18.5x
|
| |
17.4x
|
| |
18.6x
|
| |
16.0x
|
The New York Times Company
|
| |
28.4x
|
| |
28.2x
|
| |
28.2x
|
| |
26.0x
|
Implied Price Per Share Range
|
| |
Per Share Merger Consideration
|
$10.93 - $14.59
|
| |
$17.25
|
Announcement Date
|
| |
Acquiror
|
| |
Target
|
| |
EV / LTM
EBITDA
|
| |
EV / LTM
Revenue
|
December 2011
|
| |
Berkshire Hathaway, Inc.
|
| |
Omaha World-Herald
|
| |
6.3x
|
| |
N/A
|
December 2011
|
| |
Halifax Media Holdings LLC
|
| |
The New York Times Company
|
| |
5.0x
|
| |
0.6x
|
May 2012
|
| |
Berkshire Hathaway, Inc.
|
| |
Media General, Inc.
|
| |
4.7x
|
| |
0.4x
|
August 2013
|
| |
John Henry
|
| |
The Boston Globe
|
| |
3.5x
|
| |
0.2x
|
July 2014
|
| |
The E.W. Scripps Company
|
| |
Journal Communications
|
| |
5.6x
|
| |
1.2x
|
November 2014
|
| |
New Media Investment Group Inc.
|
| |
Halifax Media Group
|
| |
4.6x
|
| |
1.1x
|
February 2015
|
| |
New Media Investment Group Inc.
|
| |
Stephens Media, LLC
|
| |
4.3x
|
| |
0.7x
|
May 2015
|
| |
Tribune Publishing Co.
|
| |
U-T San Diego
|
| |
N/A
|
| |
N/A
|
October 2015
|
| |
Gannett Co., Inc.
|
| |
Journal Media Group, Inc.
|
| |
5.5x
|
| |
0.6x
|
December 2015
|
| |
News + Media Capital Group LLC
|
| |
Las Vegas Review-Journal
|
| |
7.0x
|
| |
N/A
|
November 2016
|
| |
New Media Investment Group Inc.
|
| |
Harris Enterprises, Inc.
|
| |
4.0x
|
| |
N/A
|
August 2017
|
| |
New Media Investment Group Inc.
|
| |
Morris Publishing Group, LLC
|
| |
4.0x
|
| |
N/A
|
August 2019
|
| |
New Media Investment Group Inc.
|
| |
Gannett Co., Inc.
|
| |
5.5x
|
| |
0.6x
|
November 2019
|
| |
Alden Global Capital LLC
|
| |
Tribune Publishing Co.
(Michael Ferro 25% Stake)
|
| |
4.4x
|
| |
0.4x
|
January 2020
|
| |
Lee Enterprises, Inc.
|
| |
BH Media Group
|
| |
3.6x
|
| |
0.4x
|
July 2020
|
| |
Chatham Asset Management, LLC
|
| |
The McClatchy Company
|
| |
3.4x
|
| |
0.5x
|
Implied Price Per Share Range
|
| |
Per Share Merger Consideration
|
$11.85 - $15.50
|
| |
$17.25
|
•
|
the estimated future cash flows that the Company is expected to generate for each of the fiscal years 2021 through 2023; and
|
•
|
the estimated value of the Company at the end of 2023, or the “terminal value”.
|
Fiscal Year Ending December 31,
|
||||||
2021E
|
| |
2022E
|
| |
2023E
|
(in millions)
|
||||||
$49
|
| |
$93(1)
|
| |
$57
|
(1)
|
Includes net proceeds from the divestiture of certain real estate and IP assets.
|
Implied Price Per Share Range
|
| |
Per Share Merger Consideration
|
$15.10 - $19.27
|
| |
$17.25
|
Implied Price Per Share Range
|
| |
Per Share Merger
Consideration
|
||||||
Case A
|
| |
Case B
|
| |
Case C
|
| ||
$16.80 - $21.90
|
| |
$14.52 - $18.38
|
| |
$12.80 - $15.79
|
| |
$17.25
|
•
|
a continuation of declining print revenue streams (print advertising, print subscriptions, print single copy sales and commercial print/delivery revenue) with 2021 versus 2020 declining at more than 12%;
|
•
|
a 16.7% increase in digital revenues (both digital advertising and digital subscriptions);
|
•
|
operating expenses assumed a full year benefit of a significant amount of cost reduction initiatives throughout 2020 as well as ongoing expense discipline; and
|
•
|
unlevered free cash flow assumed growth in Adjusted EBITDA, offset by income tax payments as well as lease buy-outs.
|
|
| |
Year Ending December 31,
2021
|
|
| |
(dollar in millions rounded to
the nearest million)
|
Company revenue(1)
|
| |
$695
|
Company adjusted EBITDA(2)
|
| |
$107
|
Company unlevered free cash flow(3)
|
| |
$49
|
(1)
|
Company revenue means the consolidated revenue of the Company and its subsidiaries.
|
(2)
|
Company Adjusted EBITDA means the earnings before interest, taxes, depreciation and amortization (but after stock-based compensation expense) adjusted for extraordinary expenses that are not reflective of the Company’s core operating results over time (such as restructuring costs (including the employee voluntary separation program and gain/losses on employee benefit plan terminations), impairment charges, litigation or dispute settlement charges or gain/loss on equity investments, premiums on stock buybacks and transaction related costs).
|
(3)
|
Company unlevered free cash flow means Adjusted EBITDA (i) less taxes, capital expenditures, pension contributions (net of taxes) and extraordinary expenses (such as restructuring charges), and (ii) plus any divestiture proceeds (net of taxes), changes in working capital and stock-based compensation (adjusted for unvested shares already in the fully diluted share count).
|
•
|
increased revenue driven by new commercial delivery agreement;
|
•
|
cost savings initiatives realized in the first quarter of 2021 continue throughout the rest of the year;
|
•
|
operating expense initiatives with recurring effects expected to be realized earlier than expected; and
|
•
|
unlevered free cash flow assumed growth in Adjusted EBITDA, offset by income tax payments as well as lease buy-outs.
|
|
| |
Year Ending December 31,
2021
|
|
| |
(dollar in millions rounded to
the nearest million)
|
Company revenue(1)
|
| |
$697
|
Company adjusted EBITDA(2)
|
| |
$112
|
Company unlevered free cash flow(3)
|
| |
$70
|
(1)
|
Company revenue means the consolidated revenue of the Company and its subsidiaries.
|
(2)
|
Company Adjusted EBITDA means the earnings before interest, taxes, depreciation and amortization (but after stock-based compensation expense) adjusted for extraordinary expenses that are not reflective of the Company’s core operating results over time (such as restructuring costs (including the employee voluntary separation program and gain/losses on employee benefit plan terminations), impairment charges, litigation or dispute settlement charges or gain/loss on equity investments, premiums on stock buybacks and transaction related costs).
|
(3)
|
Company unlevered free cash flow means Adjusted EBITDA (i) less taxes, capital expenditures, pension contributions (net of taxes) and extraordinary expenses (such as restructuring charges), and (ii) plus any divestiture proceeds (net of taxes), changes in working capital and stock-based compensation (adjusted for unvested shares already in the fully diluted share count).
|
•
|
with respect to Case A, (i) total revenues continue to decline, including revenues generated from print advertising, print circulation, direct mail and print distribution, (ii) digital circulation more than doubles between 2020 and 2023 based on subscriber growth and better churn management, (iii) revenues generated from digital content agencies generally hold flat through 2023, and (iv) margins rise to 18.1% by 2023, driven primarily by distribution outsourcing and certain reductions in occupancy expense;
|
•
|
with respect to Case B, (i) 2022 revenues are 1.2% lower than those in Case A, with roughly half of such revenue reductions coming from advertising and the other revenue reductions from circulation and other revenues, (ii) 2023 revenues are 4.0% lower than those in Case A, with approximately 50% of such revenue reductions coming from advertising, particularly print advertising, and the remaining 50% split roughly evenly between circulation and other revenues, and (iii) margins decline to approximately 14.3% by 2023, consistent with comparable margin levels reported by certain of the Company’s competitors; and
|
•
|
with respect to Case C, (i) 2022 and 2023 revenues equal those in Case B, and (ii) margins decline to 13.0% in 2022 and to 11.0% in 2023, respectively, based on comparable margin levels reported by certain of the Company’s competitors.
|
|
| |
Years Ending December 31,
|
|||||||||||||||||||||
|
| |
Case A
|
| |
Case B
|
| |
Case C
|
| |
Specified Case
|
||||||||||||
|
| |
2022
|
| |
2023
|
| |
2022
|
| |
2023
|
| |
2022
|
| |
2023
|
| |
2022
|
| |
2023
|
|
| |
(dollars in millions rounded to the nearest million)
|
|||||||||||||||||||||
Company revenue(1)
|
| |
$653
|
| |
$622
|
| |
$645
|
| |
$597
|
| |
$645
|
| |
$597
|
| |
$647
|
| |
$603
|
Company adjusted EBITDA(2)
|
| |
$110
|
| |
$113
|
| |
$102
|
| |
$85
|
| |
$84
|
| |
$66
|
| |
$104
|
| |
$92
|
Company unlevered free cash flow(3)(4)
|
| |
$97
|
| |
$71
|
| |
$92
|
| |
$53
|
| |
$79
|
| |
$38
|
| |
$93
|
| |
$57
|
(1)
|
Company revenue means the consolidated revenue of the Company and its subsidiaries.
|
(2)
|
Company Adjusted EBITDA means the earnings before interest, taxes, depreciation and amortization (but after stock-based compensation expense) adjusted for extraordinary expenses that are not reflective of the Company’s core operating results over time (such as restructuring costs (including the employee voluntary separation program and gain/losses on employee benefit plan terminations), impairment charges, litigation or dispute settlement charges or gain/loss on equity investments, premiums on stock buybacks and transaction related costs).
|
(3)
|
Company unlevered free cash flow means Adjusted EBITDA (i) less taxes, capital expenditures, pension contributions (net of taxes) and extraordinary expenses (such as restructuring charges), and (ii) plus any divestiture proceeds (net of taxes), changes in working capital and stock-based compensation (adjusted for unvested shares already in the fully diluted share count).
|
(4)
|
Includes net proceeds from the divestiture of certain real estate and IP assets.
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•
|
the closing of the Merger;
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•
|
the payment of the Guaranteed Obligations;
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•
|
the valid termination of the Merger Agreement in any circumstances other than pursuant to which an Alden Fund may be required to make payment of any Guaranteed Obligation;
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•
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the date that is 60 days after the termination of the Merger Agreement if the Merger Agreement is terminated in any of the circumstances pursuant to which any Alden Fund may be required pursuant to the terms and subject to the conditions of the Limited Guarantee to make a payment of the Guaranteed Obligations if (i) by such date the Company has delivered a written notice with respect to such Guaranteed Obligation during such 60-day period and (ii) the Company has commenced a legal proceeding during such 60-day period against the Alden Funds alleging that Parent is liable for payment of such Guaranteed Obligation, in which case the Limited Guarantee will survive solely with respect to amounts so alleged to be owing, subject to certain restrictions contained in the Limited Guarantee; and
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•
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termination of the Limited Guarantee by mutual written agreement among each of the Alden Funds and the Company.
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•
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Under the Merger Agreement, in connection with the closing of the Merger, (i) each option to purchase shares of common stock (each, a “Company Option”) that is outstanding immediately prior to the Effective Time, whether or not vested, will automatically become fully vested and canceled and converted into the right to receive an amount in cash, equal to the product of (x) the amount by which the Merger Consideration exceeds the applicable exercise price per share of Company common stock subject to such Company Option, and (y) the number of shares of Company common stock issuable in respect of such fully vested Company Option as of immediately prior to the Effective Time and, (ii) each restricted stock unit entitling the holder to delivery of shares of common stock, subject to satisfaction of vesting or other forfeiture conditions (each, a “Company RSU”) that is outstanding immediately prior to the Effective Time, whether or not vested, will automatically be canceled and converted into the right to receive an amount in cash, equal to the product of (x) the Merger Consideration and (y) the number of shares of Company common stock underlying such Company RSU (and then adding, if applicable, the value of any dividend-equivalent rights accrued with respect to such Company RSU as of the Effective Time).
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•
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Pursuant to Mr. Jimenez’s employment agreement, which was amended on February 15, 2021 to extend the term of the agreement, which would otherwise expire on April 3, 2021, Mr. Jimenez is entitled to severance benefits in the event that his employment with the Company is terminated for any reason other than death, disability, for “cause” or if he resigns for “good reason” (each as defined in his employment agreement).
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•
|
Pursuant to Mr. Lavey’s employment agreement, Mr. Lavey is entitled to severance benefits in the event that his employment with the Company is terminated for any reason other than death, disability, for “cause” or if he resigns for “good reason” (each as defined in his employment agreement).
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•
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The Company’s directors and officers will be entitled to certain ongoing indemnification and coverage under directors’ and officers’ liability insurance policies pursuant to the Merger Agreement (as described in the section entitled “The Merger Agreement—Indemnification; Directors’ and Officers’ Insurance” beginning on page 85).
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•
|
Parent and Merger Sub were formed by the Alden Funds and the Alden Funds collectively own 31.6% of the issued and outstanding common stock of the Company. Pursuant to the A&R Cooperation Agreement, each of Mr. Minnetian, Ms. Needleman and Mr. Smith was appointed to the Board. Mr. Smith is one of the founding members of Alden Global Capital and serves as its Chief of Investments. As a result of such interest in the Merger, Mr. Minnetian, Ms. Needleman and Mr. Smith did not attend or vote at the Board meeting held regarding the Merger and alternatives thereto.
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•
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a citizen or individual resident of the United States;
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•
|
a corporation, or other entity classified as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;
|
•
|
a trust if (i) a court within the United States is able to exercise primary supervision over the trust’s administration, and one or more U.S. persons are authorized to control all substantial decisions of the trust or (ii) such trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or
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•
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an estate the income of which is subject to U.S. federal income tax regardless of its source.
|
•
|
our and our subsidiaries’ due organization, existence, good standing and corporate power and authority to carry on our and their businesses;
|
•
|
our corporate power and authority to execute the Merger Agreement, consummate the Merger, perform our obligations under the Merger Agreement and the enforceability of the Merger Agreement against us;
|
•
|
the absence of required filings, authorizations, registrations, permits, consents and approvals of governmental authorities and other third parties in connection with our execution, delivery and performance of the Merger Agreement, or the consummation of the transactions contemplated by the Merger Agreement;
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•
|
the capitalization of the Company and its subsidiaries;
|
•
|
our SEC filings since January 1, 2019 and the financial statements included therein, and our disclosure controls and procedures and internal controls over financial reporting;
|
•
|
the proxy statement of the Company and Schedule 13E-3 filed with the SEC in connection with the Merger and the information contained therein;
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•
|
our conduct of business in the ordinary course from September 27, 2020, and the absence of any circumstance, occurrence or development which has had or would reasonably be expected to have, a Company material adverse effect;
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•
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the absence of certain undisclosed liabilities or obligations;
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•
|
since January 1, 2018, the Company’s and its subsidiaries’ compliance with applicable laws, and the possession by the Company and its subsidiaries of all licenses or other authorizations or approvals of a
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•
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since January 1, 2018 and to the Company’s knowledge, the compliance of the Company and its subsidiaries with the provisions of the U.S. Foreign Corrupt Practices Act of 1977, as amended (15 U.S.C. §§ 78dd1, et seq.), applicable sanctions authorities, and export controls, anti-trust or anti-money laundering laws;
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•
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the absence of certain legal proceedings, investigations and other proceedings pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries;
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•
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matters relating to the owned real property and leased real property of the Company and its subsidiaries;
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•
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intellectual property matters relating to the Company and its subsidiaries;
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•
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tax matters relating to the Company and its subsidiaries;
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•
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matters relating to employee benefit plans of the Company and its subsidiaries;
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•
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labor matters relating to the Company and its subsidiaries;
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•
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environmental matters relating to the Company and its subsidiaries;
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•
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matters relating to material contracts of the Company and its subsidiaries, including material contracts between the Company and its subsidiaries, on the one hand, and any of affiliates of the Company or its subsidiaries, on the other hand;
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•
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matters relating to insurance policies of the Company and its subsidiaries;
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•
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the absence of any undisclosed brokerage or finder’s fees;
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•
|
the fairness opinion of Lazard received in connection with the Merger;
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•
|
corporate action taken to exempt the Merger Agreement and the transactions contemplated by the Merger Agreement (to the extent possible) from any anti-takeover statute or regulation in effect that applies or purports to apply to the transactions contemplated by the Merger Agreement; and
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•
|
the absence of any other express or implied representation or warranty by the Company or any other person with respect to the Company or any of its affiliates.
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(a)
|
any change or proposed change in the Generally Accepted Accounting Principles (“GAAP”) or interpretation thereof;
|
(b)
|
global, national or regional economic or political conditions (including changes in financial, credit, securities or currency markets (including changes in interest or exchange rates));
|
(c)
|
conditions affecting the industries in which the Company or any of its subsidiaries operate;
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(d)
|
any change or proposed changes in applicable law or any interpretation of applicable law;
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(e)
|
geopolitical conditions, the outbreak or escalation of hostilities, acts of war, sabotage, terrorism,
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(f)
|
the execution, delivery and performance of the Merger Agreement or the announcement or consummation of the transactions contemplated by the Merger Agreement or the identity of or any facts or circumstances relating to Parent or any of its subsidiaries, including the impact on the relationships, contractual or otherwise, of the Company and any of its subsidiaries with customers, suppliers, service providers, employees, governmental authorities or any other persons resulting from any of the foregoing, and any stockholder or derivative litigation relating to the execution, delivery and performance of the Merger Agreement or the announcement or consummation of the transactions contemplated by the Merger Agreement (subject to certain exclusions);
|
(g)
|
any failure by the Company or any of its subsidiaries to meet any internal or published budgets, projections, forecasts or predictions of financial performance or integration synergies for any period (it being understood that any underlying facts giving rise or contributing to such failure that are not otherwise excluded from this definition may be taken into account in determining whether there has been a Company material adverse effect);
|
(h)
|
any actions taken (or omitted to be taken) at the express written request of Parent or Merger Sub;
|
(i)
|
changes in the price and/or trading volume of the shares of the common stock or any other securities of the Company on NASDAQ or any other market on which such securities are quoted for purchase and sale or changes in the credit ratings of the Company (it being understood that any underlying facts giving rise or contributing to such changes that are not otherwise excluded from this definition may be taken into account in determining whether there has been a Company material adverse effect); or
|
(j)
|
any actions taken (or omitted to be taken) by the Company or any of its subsidiaries that are required or expressly contemplated to be taken (or omitted to be taken) pursuant to the Merger Agreement.
|
•
|
their due organization, existence, good standing and authority to carry on their businesses and that Merger Sub is a wholly owned subsidiary of Parent that was formed solely for the purpose of engaging in the transactions contemplated by the Merger Agreement;
|
•
|
their corporate power and authority to execute the Merger Agreement, consummate the Merger, perform their obligations under the Merger Agreement, and the enforceability of the Merger Agreement against them;
|
•
|
the absence of required filings, authorizations, registrations, permits and consents and approvals of governmental authorities or other third parties in connection with their execution, delivery and performance of the Merger Agreement, or the consummation of the transactions contemplated by the Merger Agreement;
|
•
|
the supply of information in writing by Parent for inclusion in the proxy statement and Schedule 13E-3 filed with the SEC in connection with the Merger and the information contained therein;
|
•
|
the absence of certain legal proceedings, investigations and other proceedings pending or threatened against Parent or any of its subsidiaries, except as would not, individually or in the aggregate, reasonably be likely to prevent, materially delay or materially impede the consummation of the Merger by Parent;
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•
|
the absence of any undisclosed brokerage or finder’s fees;
|
•
|
the absence of any knowledge of Parent of any facts or circumstances that would cause the representations and warranties of the Company to fail to be true and correct in all material respects, or which would otherwise reasonably be expected to materially impede or delay consummation of the transactions contemplated by the Merger Agreement;
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•
|
matters related to the ownership by Parent, Merger Sub or its or their affiliates and associates of the common stock;
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•
|
that Parent has all funds necessary to satisfy its obligations under the Merger Agreement, including payment of the Merger Consideration;
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•
|
the solvency of Parent and Merger Sub at the Effective Time;
|
•
|
the absence of any contract between Parent or Merger Sub or any of their affiliates, on the one hand, and any member of the Company’s management or the Board, on the other hand, relating in any to the transactions contemplated by the Merger Agreement or the operations of the Company after the Effective Time;
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•
|
the absence of any other express or implied representation or warranty by Parent, Merger Sub or any other person with respect to Parent, Merger Sub or any of their respective representatives or affiliates.
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•
|
amend its organizational documents;
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•
|
split, combine or reclassify any shares of its capital stock or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, except for dividends or other such distributions by any of its wholly owned subsidiaries;
|
•
|
redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any securities of the Company or its subsidiaries, except as required by the terms of the Company Stock Plan with respect to any Company Options and Company RSUs, in each case, that are issued and outstanding as of or after the date of the Merger Agreement;
|
•
|
enter into any agreement with respect to the voting of any securities of the Company or its subsidiaries;
|
•
|
issue, grant, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any securities of the Company or its subsidiaries, other than the issuance of any subsidiary securities to the Company or to any other subsidiary, or issuances of any shares with respect to any exercise of Company Options or the settlement of Company RSUs that are issued and outstanding as of or after the date of the Merger Agreement;
|
•
|
amend any term of any security of the Company or its subsidiaries, except as required by the terms of any employee benefit plan;
|
•
|
acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, (i) any business or any division thereof or all or substantially all of the assets of, equity or voting securities in, any person or (ii) any material amount of assets, securities, properties, interests or businesses, other than acquisitions of inventory, equipment, supplies and materials in the ordinary course of business consistent with past practice;
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•
|
sell, assign, transfer, convey, lease, license, abandon, allow to lapse or expire, subject to or, grant or suffer to exist any lien on, or otherwise dispose of any of its material assets, securities, properties, interests or businesses, other than the sale or licensing of goods and services (including licenses of intellectual property) to customers, suppliers, vendors, partners and other persons in the ordinary course of business;
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•
|
make any material loans, advances or capital contributions to, or investments in, any other person, other than (i) loans or advances among the Company and its wholly owned subsidiaries and capital contributions to, or investments in, the Company’s wholly owned subsidiaries, (ii) advances of business expenses to employees in the ordinary course, (iii) accounts receivable from customers in the ordinary course of business and (iv) investments of cash in the ordinary course of business;
|
•
|
incur any indebtedness or guarantees thereof, other than (i) pursuant to any agreements in effect as of the date of the Merger Agreement, (ii) indebtedness incurred between the Company and any of its wholly owned subsidiaries or between any of such wholly owned subsidiaries or guarantees by the Company of indebtedness of any wholly owned subsidiary of the Company, (iii) any debt financing in respect of the merger consideration or (iv) any obligations under the Company’s existing contracts as of the date of the Merger Agreement to post additional cash collateral under any letters of credit existing as of the date of the Merger Agreement;
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•
|
make any capital expenditures, other than (i) capital expenditures provided for in the approved budget set forth in the Disclosure Schedule or (ii) other capital expenditures not in excess of $100,000 in the aggregate;
|
•
|
settle any material litigation or claims, except for settlements of any workers’ compensation claim in the ordinary course of business for an amount not in excess of the amount accrued therefor in the Company’s most recent balance sheet, and which does not impose material equitable relief against the Company or any of its subsidiaries and would not be expected to limit or restrict the operation of the Company or its subsidiaries in any material respect; provided that the Company use its reasonable best efforts to provide Parent with prior notice of and consult with Parent regarding the proposed terms of any such settlement;
|
•
|
except as required under the terms of any employee benefit plan or any contract, (i) increase the compensation or benefits of any employee of the Company or any of its subsidiaries whose annual base compensation is $70,000 or more (each, a “Key Employee”), (ii) hire or terminate (except for cause) any Key Employee, (iii) enter into or amend any written employment agreement with any current or future employee, director or officer of the Company or any of its subsidiaries, (iv) partially or completely withdraw from any multiemployer plan, (v) establish any Company severance policy or benefits or (vi) modify any existing Company severance policy or severance benefits;
|
•
|
except as required under the terms of any employee benefit plan or any contract, grant or award any bonus or incentive compensation (including equity), retention, severance, tax gross-up, tax indemnity, or reimburse the taxes of any current or former Company Service Provider, except for severance payments and benefits to Company Employees following a qualifying termination of employment solely (i) to the extent required pursuant to an existing contractual obligation of the Company, (ii) as required by applicable law or (iii) pursuant to the terms of the Company’s broad-based severance policy in the ordinary course of business consistent with past practice;
|
•
|
change the Company’s methods of accounting, except as required by concurrent changes in GAAP or in Regulation S-X of the Exchange Act, as agreed to by its independent public accountants;
|
•
|
make, change or rescind any material tax election, change any annual tax accounting period, adopt or make any material change in its method of tax accounting, file any material tax return in a jurisdiction in which neither the Company nor its subsidiaries did not previously file, file any material amended tax
|
•
|
merge or consolidate with any other person or adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
|
•
|
terminate, cancel or fail to renew any material insurance coverage maintained by the Company or any of its subsidiaries with respect to any material assets without replacing such coverage with a comparable amount of insurance coverage, unless (i) such coverage is not available on commercially reasonable terms or (ii) lesser coverage amounts are reasonably appropriate in light of changes to the Company’s and its subsidiaries’ business (including termination of leases in accordance with the terms of the Merger Agreement);
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•
|
(i) enter into any material contract or any real property lease, (ii) except in the ordinary course of business, terminate or fail to renew any material contract or real property lease, other than any termination without material penalty to the Company or any its subsidiary, (iii) amend or modify any material contract or real property lease in any manner adverse to the Company and its subsidiaries in any material respect or which could prevent or materially delay the consummation of the Merger or the other transactions contemplated by the Merger Agreement or (iv) waive any material benefit or right under any material contract or real property lease;
|
•
|
enter into, amend or modify the terms of any contract with any person covered under Item 404 of Regulation S-K under the Securities Act or make any payment to any person covered under Item 404 of Regulation S-K under the Securities Act (other than payments, transactions or benefits pursuant to Employee Benefit Plans made available to Parent prior to the date of the Merger Agreement);
|
•
|
make any contributions to any employee benefit plan or multiemployer plan subject to Section 302 of ERISA and Section 412 of the Internal Revenue Code, except: (i) in the minimum amount necessary to satisfy the requirements of Section 302(a) of ERISA and Section 412(a) of the Internal Revenue Code, or (ii) in the minimum amounts required by the Company’s collective bargaining agreements or Section 515 of ERISA;
|
•
|
pay or settle any accounts payables in excess of $100,000, except payments when and as due, in accordance with any applicable contracts or the Company’s past practice;
|
•
|
enter into any contract with aggregate expenditures in excess of $500,000; or
|
•
|
agree, resolve or commit to take any action prohibited by the foregoing.
|
(i)
|
solicit, knowingly facilitate or encourage the submission of any Acquisition Proposal (as defined below), or the making of any inquiry or offer that would reasonably be expected to lead to an Acquisition Proposal;
|
(ii)
|
enter into or participate in any discussions or negotiations with, furnish any information relating to the Company or its subsidiaries or afford access to the business, properties, books or records of the Company and its subsidiaries or otherwise cooperate, assist or encourage any effort by any third party that is seeking to make, or has made, an Acquisition Proposal;
|
(iii)
|
permit or make an Adverse Recommendation Change (as defined below);
|
(iv)
|
enter into any agreement in principle, letter of intent, merger agreement, acquisition agreement or other commitment or agreement in respect of any proposal or offer providing for an Acquisition Proposal (other than a confidentiality agreement in accordance with the terms of the Merger Agreement); or
|
(v)
|
amend, modify, redeem, terminate or grant any waiver or release under the Company Rights Plan.
|
•
|
the Company must give Parent at least four business days’ prior written notice of its intent to make an Adverse Recommendation Change (the “Notice Period”), specifying, in reasonable detail, the reasons for such Adverse Recommendation Change and attaching a copy of any proposed agreements for the Superior Proposal, if applicable (provided that with respect to any amendment to the financial terms or other material terms of an Acquisition Proposal, such Notice Period will be extended by two business days and the Company will be required to deliver a new written notice to Parent in respect thereof);
|
•
|
during the Notice Period, the Company must negotiate with Parent and its representatives in good faith (to the extent that Parent desires to so negotiate) to make such adjustments to the terms and conditions of the Merger Agreement as would enable the Board to not effect an Adverse Recommendation Change or, in the case of a Superior Proposal, terminate the Merger Agreement; and
|
•
|
following the expiration of the Notice Period, the Board must determine in good faith, taking into account any amendments to the terms of the Merger Agreement proposed by Parent, that the failure to effect an Adverse Recommendation Change would be reasonably likely to be inconsistent with its fiduciary duties.
|
•
|
preparing and filing all documentation to effect all necessary notices, reports and other filings (including filings under the HSR Act, and other required regulatory approvals specified in the Merger Agreement); and
|
•
|
obtaining and maintaining all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party and/or any governmental authority in order to consummate the transactions contemplated by the Merger Agreement.
|
•
|
assisting in preparation for and participation in marketing efforts with prospective lenders, investors and rating agencies;
|
•
|
assisting Parent in the preparation of offering documents, private placement memorandum and similar marketing documents and materials for rating agency presentations, if applicable;
|
•
|
furnishing Parent with any pertinent and customary information regarding the Company and its Subsidiaries as may be reasonably requested by Parent to the extent that such information is required in connection with obtaining the Debt Financing (subject to certain exclusions);
|
•
|
assisting Parent in connection with the preparation of pro forma financial information and financial statements (provided that neither the Company nor any of its subsidiaries or its officers, employees and/or representatives shall be responsible for information relating to the proposed debt and equity capitalization that is required for such pro forma financial information or statements (or for the actual preparation of pro forma financial statements));
|
•
|
executing and delivering as of (and subject to) the Closing, but not before, pledge and security documents and other definitive financing documents and certificates as may be reasonably requested by Parent, to the extent required by the terms of the Debt Financing;
|
•
|
taking corporate actions reasonably requested by Parent that are necessary or customary to permit the consummation of the Debt Financing, and to permit the proceeds thereof, if any (not needed for other purposes), to be made available at the closing of the Merger;
|
•
|
assisting Parent to obtain waivers, consents, estoppels and approvals from other parties to material licenses, leases, encumbrances and contracts relating to the Company and its subsidiaries and to arrange discussions among Parent, the providers of the Debt Financing and their respective representatives with other parties to material licenses, leases, encumbrances and contracts as of the closing of such Debt Financing; and
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•
|
providing (at least three business days) prior to the closing documentation and other information about the Company and its subsidiaries to the extent actually required by the “know your customer” and anti-money laundering rules and regulations under the USA PATRIOT Act.
|
•
|
waive all limitations as to any pre-existing condition or waiting periods in the surviving corporation’s applicable welfare plans with respect to participation and coverage requirements applicable to each Continuing Employee under any welfare plans that such employees may be eligible to participate in after the Effective Time; and
|
•
|
credit each Continuing Employee for any deductible, co-payment, offset or similar requirements made by Continuing Employees under any employee benefit plan of the Company or any of its Subsidiaries during the plan year for purposes of satisfying any applicable copayment, deductible, offset or similar requirements under the comparable plans of Parent, Merger Sub or any of their respective Subsidiaries.
|
•
|
the receipt of the Company Stockholder Approval;
|
•
|
the absence of any court order (whether temporary, preliminary or permanent) prohibiting the consummation of the Merger; and
|
•
|
the expiration or early termination of the antitrust waiting period (and any extensions) under the HSR Act applicable to the consummation of the Merger.
|
•
|
the Company must have performed in all material respects all obligations under the Merger Agreement required to be performed by it at or prior to the Effective Time;
|
•
|
(i) the representations and warranties of the Company relating to certain aspects of its organization, good standing, and qualifications, corporate authority and approval, the execution of the Merger Agreement not resulting in a breach or default under the organization documents of the Company or any of its subsidiaries, certain aspects of its and its subsidiaries’ capitalization, the inapplicability of certain takeover statutes and the absence of undisclosed brokerage or finders’ fees, must be true in all material respects, (ii) the representations and warranties of the Company relating to the capital structure of the Company and its subsidiaries and the absence of a Company material adverse effect must be true and correct except for de minimis inaccuracies and (iii) the remaining representations and warranties of the Company (without giving effect to any “materiality” qualifiers or qualifiers of similar import set forth therein) must be true and correct in all material respects, in each case, as of the date of the Merger Agreement and as of the date of the Closing as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date), and in the case of clause (iii) the failure of such representation and warranties to be true and correct has not had and is not reasonably likely to have a Company material adverse effect;
|
•
|
there shall have been no Company material adverse effect since the date of the Merger Agreement; and
|
•
|
Parent shall have received at the Effective Time a certificate signed on behalf of the Company by an authorized officer of the Company certifying that all of the above conditions have been satisfied.
|
•
|
each of Parent and Merger Sub must have performed in all material respects all obligations under the Merger Agreement required to be performed by it at or prior to the Effective Time;
|
•
|
(i) the representations and warranties of Parent relating to certain aspects of its organization, good standing, and qualifications, corporate authority and approval, the execution of the Merger Agreement not resulting in a breach or default under the organization documents of Parent or any of its subsidiaries and the absence of undisclosed brokerage or finders’ fees, must be true in all material respects and (ii) the other representations and warranties of Parent (without giving effect to any “materiality” qualifiers or qualifiers of similar import set forth therein) shall be true and correct in all as of the date of the Merger Agreement and as of the date of the Closing as though made on and as of such date and time (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date) and in the case of clause (ii) the failure of such representation and warranties to be true and correct has not had and is not reasonably likely to have a material adverse effect on Parent; and
|
•
|
the Company shall have received at the Effective Time a certificate signed by an authorized officer of Parent certifying that all of the above conditions have been satisfied.
|
•
|
by either Parent or the Company, if:
|
○
|
the Merger has not been consummated on or before the End Date;
|
○
|
any court has issued an order permanently restraining, enjoining or otherwise prohibiting the Merger and such order or other action is, or has become, final and non-appealable;
|
○
|
at the Special Meeting, including any adjournment or postponement thereof, the Company’s stockholders do not approve the Merger Proposal; or
|
○
|
there is an uncured breach by the other party of any representation, warranty or covenant that results in the failure of the related closing condition to be satisfied.
|
•
|
by the Company, if:
|
○
|
prior to the Company Stockholder Approval, the Board authorizes the Company to enter into an agreement for a Superior Proposal, subject to the Company having first complied with certain matching rights and other obligations set forth in the Merger Agreement and paid the Termination Fee (as defined below); or
|
○
|
the Company has irrevocably confirmed to Parent that all of its conditions to the Merger, including the parties’ mutual conditions to the Merger, have been satisfied (other than those conditions that by their terms are to be satisfied at the closing of the Merger or have been waived by the Company), the Company is ready, willing and able to consummate the closing of the Merger and Parent and Merger Sub nonetheless fail to complete the Closing when required by the Merger Agreement.
|
•
|
by Parent, if:
|
○
|
prior to the Company Stockholder Approval, the Board makes an Adverse Recommendation Change; or
|
○
|
the Company materially breaches its non-solicitation obligations and such breach results in an Alternative Proposal.
|
•
|
by the Company in order to enter into an agreement for a Superior Proposal;
|
•
|
by Parent if (i) prior to receipt of the Company Stockholder Approval, an Adverse Recommendation Change has occurred or (ii) the Company has materially breached its non-solicitation obligations and such breach has led to receipt of an Acquisition Proposal;
|
•
|
by either Parent or the Company if, (i) prior to receipt of the Company Stockholder Approval (x) the Merger has not been consummated by the End Date, (y) the Company’s stockholders do not approve Merger Agreement at the stockholder meeting or (z) Parent terminates as a result of an uncured breach by the Company of any representation, warranty or covenant that results in the failure of the related closing condition to be satisfied, (ii) an Acquisition Proposal is publicly announced and not withdrawn prior to the receipt of the Company Stockholder Approval and the termination of the Merger
|
|
✔
|
| |
Your Board of Directors recommends a vote FOR the non-binding, advisory vote on the compensation of the Company’s named executive officers in connection with the Merger.
|
|
Name
|
| |
Cash ($)(1)
|
| |
Equity ($)(2)
|
| |
Total ($)
|
Terry Jimenez
|
| |
814,991
|
| |
1,734,000
|
| |
2,548,991
|
Mike Lavey
|
| |
362,551
|
| |
582,213
|
| |
944,864
|
(1)
|
Cash. The cash payments payable to the named executive officers by the Company consist of severance payable in a lump cash sum (for Mr. Jimenez) or in installments paid in accordance with the Company’s regular payroll schedule (for Mr. Lavey) in an amount equal to the sum of (1) 52 weeks of base salary (which for Mr. Lavey includes quarterly supplemental cash payments of $20,000, in consideration for Mr. Lavey’s service as the Company’s interim Chief Financial Officer), (2) any earned but unpaid annual bonus with respect to the fiscal year immediately preceding the fiscal year of termination of employment, (3) for Mr. Lavey, a pro rata portion of his annual bonus based on actual performance, and (4) for Mr. Jimenez, a pro rata portion of his annual bonus based on actual year-to-date (i.e., as of the termination date) performance of Adjusted EBITDA relative to the Board-approved Adjusted EBITDA plan with respect to the fiscal year of his termination of employment. Such cash payments are “double-trigger” (i.e., the benefits are payable only upon a termination of employment for any reason other than death, disability, or for cause or resignation for good reason within two years of a change in control of the Company). Receipt of the cash severance payment is conditioned upon the named executive officer’s execution and non-revocation of a waiver and release of claims.
|
Name
|
| |
Base Salary ($)
|
| |
Unpaid Bonus ($)
|
| |
Pro rata bonus ($)
|
| |
Total ($)
|
Terry Jimenez
|
| |
517,500
|
| |
0
|
| |
297,491
|
| |
814,991
|
Mike Lavey
|
| |
316,800
|
| |
0
|
| |
47,951
|
| |
362,551
|
(2)
|
Equity. As described in more detail in the section entitled “The Merger Agreement—Treatment of Common Stock and Equity Plan Awards” beginning on page 69, at the Effective Time, any outstanding Company Options and Company RSUs will vest in full upon the closing (i.e., “single-trigger” vesting) and be settled for the Merger Consideration (less, in the case of Company Options, the applicable exercise price). Set forth in the table below are the values of each type of unvested equity-based award (including, for Mr. Lavey’s Company RSUs, the value of dividend equivalent rights associated with the shares of Company common stock underlying Mr. Lavey’s Company RSUs) that, in each case, would vest on the closing of the Merger based on the assumed Effective Time of July 1, 2021.
|
Name
|
| |
Company Options
($)
|
| |
Company
Restricted Stock
Units ($)
|
| |
Total ($)
|
Terry Jimenez
|
| |
267,750
|
| |
1,446,250
|
| |
1,734,000
|
Mike Lavey
|
| |
0
|
| |
582,313
|
| |
582,313
|
|
✓
|
| |
Your Board of Directors recommends a vote FOR the proposal to approve the adjournment of the Special Meeting from time to time, if necessary, to continue to solicit votes for the Merger Proposal.
|
|
|
| |
Year Ended
|
||||||
|
| |
December 27, 2020
|
| |
December 29, 2019
|
| |
December 30, 2018
|
|
| |
(in thousands, except per share data)
|
||||||
OPERATING DATA:
|
| |
|
| |
|
| |
|
Operating revenues
|
| |
$746,250
|
| |
$945,777
|
| |
$1,005,662
|
Operating expenses
|
| |
$812,774
|
| |
$950,897
|
| |
$1,054,028
|
Loss from operations
|
| |
$(66,524)
|
| |
$(5,120)
|
| |
$(48,366)
|
Loss from continuing operations before income taxes
|
| |
$(66,746)
|
| |
$(7,564)
|
| |
$(54,725)
|
Loss from continuing operations
|
| |
$(46,816)
|
| |
$(7,130)
|
| |
$(41,647)
|
Net income (loss)
|
| |
$(31,496)
|
| |
$(244)
|
| |
$249,647
|
Net income (loss) attributable to Tribune common stockholders
|
| |
$(39,012)
|
| |
$(5,069)
|
| |
$248,791
|
Net loss from continuing operations, per common share - basic
|
| |
$(1.28)
|
| |
$(0.20)
|
| |
$(1.18)
|
Net loss from continuing operations, per common share - diluted
|
| |
$(1.28)
|
| |
$(0.20)
|
| |
$(1.18)
|
Net income (loss) attributable to Tribune common stockholders, per common share - basic
|
| |
$(1.08)
|
| |
$(0.85)
|
| |
$7.05
|
Net income (loss) attributable to Tribune common stockholders, per common share - diluted
|
| |
$(1.08)
|
| |
$(0.85)
|
| |
$7.05
|
Weighted average shares outstanding - basic
|
| |
36,456
|
| |
35,810
|
| |
35,268
|
Weighted average shares outstanding - diluted
|
| |
36,456
|
| |
35,819
|
| |
35,268
|
Other comprehensive loss recognized in continuing operations, net of taxes
|
| |
$(340)
|
| |
$(2,379)
|
| |
$(11,843)
|
Comprehensive income (loss)
|
| |
$(31,836)
|
| |
$(2,623)
|
| |
$263,201
|
Comprehensive income (loss) attributable to Tribune common stockholders
|
| |
$(39,352)
|
| |
$(7,448)
|
| |
$262,345
|
BALANCE SHEET DATA:
|
| |
|
| |
|
| |
|
Total current assets
|
| |
$306,366
|
| |
$193,651
|
| |
$270,807
|
Total assets
|
| |
$548,154
|
| |
$682,278
|
| |
$726,627
|
Current liabilities
|
| |
$148,139
|
| |
$175,362
|
| |
$210,527
|
Non-current liabilities
|
| |
$98,613
|
| |
$158,589
|
| |
$103,032
|
Total stockholders’ equity
|
| |
$301,402
|
| |
$284,826
|
| |
$373,312
|
Total liabilities and stockholders’ equity
|
| |
$548,154
|
| |
$682,278
|
| |
$726,627
|
|
| |
Common Stock Price
|
||||||
|
| |
High
|
| |
Low
|
| |
Dividend Per Share
|
FY 2019
|
| |
|
| |
|
| |
|
First quarter
|
| |
$13.60
|
| |
$10.26
|
| |
—
|
Second quarter
|
| |
$12.45
|
| |
$7.96
|
| |
$1.50
|
Third quarter
|
| |
$8.73
|
| |
$7.00
|
| |
—
|
Fourth quarter
|
| |
$13.86
|
| |
$7.97
|
| |
$0.25
|
FY 2020
|
| |
|
| |
|
| |
|
First quarter
|
| |
$13.32
|
| |
$4.91
|
| |
$0.25
|
Second quarter
|
| |
$11.10
|
| |
$6.26
|
| |
—
|
Third quarter
|
| |
$12.61
|
| |
$8.58
|
| |
—
|
Fourth quarter
|
| |
$14.00
|
| |
$11.14
|
| |
—
|
FY 2021
|
| |
|
| |
|
| |
|
First quarter
|
| |
$18.47
|
| |
$13.88
|
| |
—
|
Second quarter (through April 16)
|
| |
$18.54
|
| |
$17.89
|
| |
—
|
Name(1)
|
| |
Number of Shares
Beneficially Owned
|
| |
Percentage of
Outstanding Shares(1)
|
More than 5% Stockholders:
|
| |
—
|
| |
|
Alden Global Capital LLC(2)
777 South Flagler Drive
West Tower, Suite 800
West Palm Beach, FL 33401
|
| |
11,554,306
|
| |
31.3
|
Nant Capital LLC(3)
9922 Jefferson Boulevard
Culver City, CA 90232
|
| |
8,743,619
|
| |
23.7
|
BestReviews Inc.(4)
8985 Double Diamond Parkway, Unit B7
Reno, Nevada 89521
|
| |
1,913,438
|
| |
5.2
|
Mason P. Slaine Revocable Trust
c/o Holland & Knight LLP
701 Brickell Avenue, Suite 3300
Miami, FL 33131(5)
|
| |
1,264,156
|
| |
3.4
|
Non-Employee Directors:
|
| |
|
| |
|
Carol Crenshaw(6)
|
| |
84,221
|
| |
*
|
Randall Smith(7)
|
| |
—
|
| |
—
|
Philip G. Franklin(8)
|
| |
74,109
|
| |
*
|
Christopher Minnetian(9)
|
| |
19,586
|
| |
*
|
Dana Goldsmith Needleman(10)
|
| |
19,586
|
| |
*
|
Richard A. Reck(11)
|
| |
84,591
|
| |
*
|
Named Executive Officers:
|
| |
|
| |
|
Terry Jimenez(12)
|
| |
370,347
|
| |
1.0
|
Mike Lavey
|
| |
20,098
|
| |
*
|
All current directors and executive officers as a group (8 persons)(13)
|
| |
672,538
|
| |
1.8
|
*
|
Less than 1%
|
1.
|
Beneficial ownership is determined in accordance with SEC rules. For the number of shares beneficially owned by each of the “More than 5% Stockholders,” we rely on each of such stockholder’s statements filed with the SEC pursuant to Section 13(d) or 13(g) of the Exchange Act, as described in the footnotes below. For each person, entity, or group included in this table, percentage ownership is calculated by dividing the number of shares beneficially owned by such person, entity, or group by the sum of 36,951,571 shares of the Company’s common stock outstanding as of April 15, 2021, plus the number of shares of common stock, if any, that such person, entity, or group had the right to acquire pursuant to the exercise of stock options or vesting of Company RSUs or other rights within 60 days of April 15, 2021. Except as indicated by footnote, and subject to marital community property laws where applicable, we believe that the persons or entities named in the table above have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.
|
2.
|
Information presented is based on a Schedule 13D/A (Amendment No.4) filed with the SEC on February 16, 2021 and a Form 4 filed with the SEC on November 4, 2020 by Alden Global Capital and Mr. Freeman. Pursuant to the filings the reporting persons beneficially own 11,544,306 shares. AGOMF, of which Alden Global Capital is the investment manager, holds 6,345,288 shares of the Company’s common stock. AGVRMF, of which Alden Global Capital is the investment manager, holds 5,198,925 shares of the Company’s common stock. Mr. Freeman is President of Alden Global Capital. Mr. Freeman and Alden Global Capital have shared voting power and dispositive power over and aggregate of 11,544,306 shares held by AGOMF and AGVRMF.
|
3.
|
Information presented is based on a Schedule 13D/A (Amendment No. 7) filed with the SEC on January 18, 2019 by Dr. Patrick Soon-Shiong, Nant Capital, LLC (“Nant Capital”), and California Capital Equity, LLC (“CalCap”). Nant Capital beneficially owns, in the aggregate, 7,650,000 shares of the Company’s common stock. CalCap and Dr. Soon-Shiong may be deemed to beneficially own, and share with Nant Capital the power to vote and direct the vote, and the power to dispose or direct the disposition of, the 7,650,000 shares beneficially owned by Nant Capital. Dr. Soon-Shiong also directly beneficially owns 1,093,619 shares of the Company’s common stock. Dr. Soon-Shiong has the sole power to vote or direct the vote, and the sole power to dispose or direct the disposition, of all such 1,093,619 shares. As a result, Dr. Soon-Shiong may be deemed to beneficially own, in the aggregate, 8,743,619 shares of the Company’s common stock.
|
4.
|
Information presented is based on a Schedule 13G filed with the SEC on February 13, 2018 by BestReviews Inc. Based on this Schedule 13G, BestReviews Inc. beneficially owns, and has sole power to vote and direct the vote of, and the sole power to dispose or direct the disposition of, 1,913,438 shares of the Company’s common stock.
|
5.
|
Information presented is based on a Schedule 13D/A (Amendment No. 4) filed with the SEC on March 26, 2021 by Mason P. Slaine and Mason P. Slaine Revocable Trust (“MPS Revocable Trust”). Mr. Slaine as the sole trustee of the MPS Revocable Trust, may be deemed the beneficial owner of 1,264,156 shares of the Company’s common stock as held directly by the MPS Revocable Trust as record owner. Pursuant to the filing, Mr. Slaine has sole voting power over 1,264,156 shares of the Company’s common stock and sole dispositive power over 1,264,156 shares.
|
6.
|
The number of shares beneficially owned by Ms. Crenshaw includes (a) 14,926 shares of unvested restricted stock and (b) 22,825 shares (attributable to deferred director fees converted to stock units) issuable within 60 days of April 15, 2021 if during such period (i) her service as a director of the Company terminates or (ii) there is a change in control (as defined in the Omnibus Incentive Plan).
|
7.
|
Because Mr. Smith serves on the Board as a representative of AGOMF, AGVRMF, and their affiliates, Mr. Smith does not have a right to any economic interest in the securities of the Issuer issued to him as director compensation. AGOMF is entitled to receive all of the economic interest in the restricted Shares granted by the Issuer in respect of Mr. Smith’s Board position. Mr. Smith disclaims beneficial ownership of such restricted Shares.
|
8.
|
The number of shares beneficially owned by Mr. Franklin includes 14,926 shares of unvested restricted stock.
|
9.
|
The number of shares beneficially owned by Mr. Minnetian includes 14,926 shares of unvested restricted stock.
|
10.
|
The number of shares beneficially owned by Ms. Needleman includes 14,926 shares of unvested restricted stock.
|
11.
|
The number of shares beneficially owned by Mr. Reck includes (a) 14,926 shares of unvested restricted stock and (b) 21,877 shares (attributable to deferred director fees converted to stock units) issuable within 60 days of April 15, 2021 if during such period (i) his service as a director of the Company terminates or (ii) there is a change in control (as defined in the Omnibus Incentive Plan).
|
12.
|
The number of shares beneficially owned by Mr. Jimenez includes 112,500 shares subject to options that are currently exercisable or that will become exercisable within 60 days of April 15, 2021.
|
13.
|
The number of shares beneficially owned by all current directors and current executive officers as a group as of April 15, 2021 includes (a) 112,500 shares subject to options that are currently exercisable, (b) 74,630 shares of unvested restricted stock, and (c) 74,630 shares issuable within 60 days of April 15, 2021 if during such period (i) the director’s service as a director of the Company terminates or (ii) there is a change in control (as defined in the Omnibus Incentive Plan).
|
•
|
During November 2019, the Alden Funds acquired 11,544,213 shares of the Company’s common stock at a price between $8.46 and $13.00 per share and an average of $12.60 per share. Of those shares, 9,071,529 shares were purchased from Merrick Media, LLC and Michael W. Ferro, previously the Company’s largest shareholder, in a private transaction.
|
•
|
On December 1, 2019, the Company entered into the Cooperation Agreement with the Alden Funds, which was amended and restated pursuant to the A&R Cooperation Agreement on July 1, 2020.
|
•
|
In the ordinary course of business, the Company has granted restricted shares of common stock to Mr. Smith, for his service as a member of the Board as a representative of AGOMF. Mr. Smith holds the restricted shares for the benefit of AGOMF, disclaims all beneficial ownership of such restricted shares and does not have a right to any economic interest in the securities of the Company issued to him as director compensation. AGOMF is entitled to receive all of the economic interest in the restricted shares granted by the Company in respect of Mr. Smith’s Board position.
|
•
|
Annual Report on Form 10-K, for the fiscal year ended December 27, 2020, filed with the SEC on March 8, 2021; and
|
•
|
Current Reports on Form 8-K, filed with the SEC on December 31, 2020, February 17, 2021, March 4, 2021, April 5, 2021 and April 19, 2021.
|
Annex A
|
| |
Agreement and Plan of Merger, dated as of February 16, 2021, by and among Tribune Publishing Company, Tribune Enterprises, LLC and Tribune Merger Sub, Inc.
|
|
| |
|
Annex B
|
| |
Opinion of Lazard & Frères, dated as of February 16, 2021.
|
|
| |
|
Annex C
|
| |
Section 262 of the Delaware General Corporation Law.
|
|
| |
|
| |
Page
|
ARTICLE 1
Definitions
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 2
The Merger
|
| |
|
|||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 3
The Surviving Corporation
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 4
Representations and Warranties of the Company
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
|
| |
|
| |
Page
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 5
Representations and Warranties of Parent
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 6
Covenants of the Company
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 7
Covenants of Parent
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 8
Covenants of Parent and the Company
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
|
| |
|
| |
Page
|
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 9
Conditions to the Mergers
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 10
Termination
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
|
| |
|
| |
|
ARTICLE 11
Miscellaneous
|
| |
|
|||
|
| |
|
| |
|
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
Term
|
| |
Section
|
2021 Bonus Plan
|
| |
7.04(d)
|
A&R Cooperation Agreement
|
| |
5.08
|
Adverse Recommendation Change
|
| |
6.04(a)
|
Agreement
|
| |
Preamble
|
Anti-Corruption Laws
|
| |
4.13(a)
|
Antitrust Division
|
| |
8.01(b)
|
Baltimore Sun Sale
|
| |
6.06(b)
|
Board of Directors
|
| |
Recitals
|
Certificate of Merger
|
| |
2.01(c)
|
Certificates
|
| |
2.03(a)
|
Closing
|
| |
2.01(b)
|
Closing 8-K
|
| |
6.07
|
Collective Bargaining Agreements
|
| |
4.21(a)(v)
|
Company
|
| |
Preamble
|
Company Affiliate Contract
|
| |
4.26
|
Company Cash
|
| |
2.03(a)
|
Term
|
| |
Section
|
Company Common Stock
|
| |
4.05(a)
|
Company Option
|
| |
2.05(b)
|
Company Permits
|
| |
4.12(b)
|
Company Preferred Stock
|
| |
4.05(a)
|
Company Recommendation
|
| |
4.02(b)
|
Company RSA
|
| |
4.05(a)
|
Company RSU
|
| |
2.05(a)
|
Company SEC Documents
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4.07(a)
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Company Securities
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4.05(c)
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Company Stockholder Meeting
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6.02
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Company Subsidiary Securities
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4.06(b)
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Confidentiality Agreement
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6.03(b)
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Debt Financing
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6.06(a)
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D&O Insurance
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7.03(c)
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e-mail
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11.01
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Earned Bonuses
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7.04(d)
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Effective Time
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2.01(c)
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End Date
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10.01(b)(i)
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Enforceability Exceptions
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4.02(a)
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Estimated Closing Date Cash
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2.03(a)
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Exchange Agent
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2.03(a)
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FTC
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8.01(b)
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Guarantee
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5.10(a)
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Guarantors
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5.09
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Indemnified Person
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7.03(a)
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Intervening Event
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6.04(f)(ii)
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Leased Real Property
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4.14(b)
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Letter of Transmittal
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2.03(a)
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Material Contract
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4.20(a)
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Merger
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2.01(a)
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Merger Consideration
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2.02(a)
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Merger Sub
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Preamble
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OFAC
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4.13(b)
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Owned Intellectual Property
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4.15(a)
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Owned Real Property
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4.14(b)
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Parent
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Preamble
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Privacy Policies
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4.15(d)
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Proxy Statement
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4.09
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Real Property
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4.14(b)
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Real Property Lease
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4.14(b)
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Schedule 13E-3
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4.09
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Special Committee
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Recitals
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Subject Securities
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7.05(a)
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Superior Proposal
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6.04(f)(i)
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Surviving Corporation
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2.01(a)
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Termination Fee
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11.04(b)(i)
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Transfer
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7.05(c)
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Uncertificated Shares
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2.03(a)
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WARN Act
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4.18(b)
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if to the Company, to:
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Tribune Publishing Company
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560 W Grand Avenue
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Chicago, Illinois 60654
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Attention:
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Terry Jimenez
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E-mail:
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t.jimenez@tribpub.com
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with copies, which shall not constitute notice, to:
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Davis Polk & Wardwell LLP
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450 Lexington Avenue
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New York, New York 10017
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Attention:
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Harold Birnbaum
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E-mail:
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harold.birnbaum@davispolk.com
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TRIBUNE PUBLISHING COMPANY
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By:
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Name:
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Title:
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TRIBUNE ENTERPRISES, LLC
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By:
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Name:
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Title:
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TRIBUNE MERGER SUB, INC.
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By:
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Name:
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Title:
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(i)
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Reviewed the financial terms and conditions of the Agreement;
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(ii)
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Reviewed certain publicly available historical business and financial information relating to Company;
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(iii)
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Reviewed various financial forecasts and other data provided to us by Company relating to the business of Company, including a set of forecasts prepared by the management of Company at the request of the Special Committee consisting of a weighted average of 25% of Case A and 75% of Case B (the “Specified Case”);
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(iv)
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Held discussions with members of the senior management of Company with respect to the business and prospects of Company;
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(v)
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Reviewed public information with respect to certain other companies in lines of business we believe to be generally relevant in evaluating the business of Company;
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(vi)
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Reviewed the financial terms of certain business combinations involving companies in lines of business we believe to be generally relevant in evaluating the business of Company;
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(vii)
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Reviewed historical stock prices and trading volumes of Company Common Stock; and
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(viii)
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Conducted such other financial studies, analyses and investigations as we deemed appropriate.
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Very truly yours,
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LAZARD FRERES & CO. LLC
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By
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Eric C. Medow
Managing Director
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