HOUGHTON MIFFLIN HARCOURT COMPANY (NASDAQ:HMHC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On December 21, 2016, Houghton Mifflin Harcourt Company (the
Company) increased the size of the Companys board of
directors (the Board) from eight to nine members and
appointed Daniel M. Allen, President, Senior Portfolio Manager
and partner of Anchorage Capital Group, L.L.C.
(Anchorage), to the Board and its Nominating, Ethics and
Governance Committee. The appointment was made to a nomination
agreement (the Nomination Agreement) the Company entered
into with certain affiliates of Anchorage who are stockholders of
the Company (the Anchorage Holders) dated as of December
21, 2016.
Company) increased the size of the Companys board of
directors (the Board) from eight to nine members and
appointed Daniel M. Allen, President, Senior Portfolio Manager
and partner of Anchorage Capital Group, L.L.C.
(Anchorage), to the Board and its Nominating, Ethics and
Governance Committee. The appointment was made to a nomination
agreement (the Nomination Agreement) the Company entered
into with certain affiliates of Anchorage who are stockholders of
the Company (the Anchorage Holders) dated as of December
21, 2016.
to the Nomination Agreement, the Company also agreed, among other
things (and subject to certain terms and conditions), to include
Mr. Allen on the Companys slate of director candidates for
re-election at the Companys 2017 annual meeting of stockholders.
things (and subject to certain terms and conditions), to include
Mr. Allen on the Companys slate of director candidates for
re-election at the Companys 2017 annual meeting of stockholders.
The Nomination Agreement contains restrictions on certain actions
by the Anchorage Holders that will apply during Mr. Allens (or a
replacement designees) tenure on the Board and at least until 30
days prior to the expiration of the Companys advance notice
period for the nomination of directors at the Companys 2018
annual meeting of stockholders (the Restricted Period),
which restrictions include, among other things and with certain
carve-outs, restrictions on: (i) soliciting proxies or initiating
a stockholder proposal with respect to the Company; (ii) forming
or influencing any group (as defined to Section 13(d) of the
Securities Exchange Act of 1934, as amended) with respect to
securities of the Company; (iii) acquiring additional shares
where it would result in Anchorage beneficially owning more than
20% of the Companys outstanding common stock; (iv) other than in
an underwritten widely dispersed public offering, knowingly
transferring common stock to any person or group that would
beneficially own more than 10% of the Companys outstanding common
stock as a result of such transfer; (v) making disparaging public
statements regarding the Company or its affiliates (with the
Company agreeing to a reciprocal restriction) or making public
proposals regarding changes in the Companys business or financial
condition; and (vi) initiating legal proceedings against the
Company or requesting inspection of the Companys corporate books
and records. Additionally, for the duration of the Restricted
Period, the Anchorage Holders have agreed to cause all voting
securities owned by the Anchorage Holders to, at each Company
stockholder meeting, be present for quorum purposes and vote (i)
for all directors nominated by the Board for election and (ii) in
accordance with the recommendation of the Board on any precatory
or non-binding proposals.
by the Anchorage Holders that will apply during Mr. Allens (or a
replacement designees) tenure on the Board and at least until 30
days prior to the expiration of the Companys advance notice
period for the nomination of directors at the Companys 2018
annual meeting of stockholders (the Restricted Period),
which restrictions include, among other things and with certain
carve-outs, restrictions on: (i) soliciting proxies or initiating
a stockholder proposal with respect to the Company; (ii) forming
or influencing any group (as defined to Section 13(d) of the
Securities Exchange Act of 1934, as amended) with respect to
securities of the Company; (iii) acquiring additional shares
where it would result in Anchorage beneficially owning more than
20% of the Companys outstanding common stock; (iv) other than in
an underwritten widely dispersed public offering, knowingly
transferring common stock to any person or group that would
beneficially own more than 10% of the Companys outstanding common
stock as a result of such transfer; (v) making disparaging public
statements regarding the Company or its affiliates (with the
Company agreeing to a reciprocal restriction) or making public
proposals regarding changes in the Companys business or financial
condition; and (vi) initiating legal proceedings against the
Company or requesting inspection of the Companys corporate books
and records. Additionally, for the duration of the Restricted
Period, the Anchorage Holders have agreed to cause all voting
securities owned by the Anchorage Holders to, at each Company
stockholder meeting, be present for quorum purposes and vote (i)
for all directors nominated by the Board for election and (ii) in
accordance with the recommendation of the Board on any precatory
or non-binding proposals.
The Anchorage Holders further agreed that, upon Anchorage and its
affiliates ceasing to beneficially own at least 10% of the
Companys outstanding common stock: (i) the Anchorage Holders
would be required to cause Mr. Allen to promptly offer to tender
his resignation from the Board and any committee of the Board on
which he may be a member and, if requested by the Company,
deliver his written resignation, to be effective immediately, to
the Board, which shall have sole discretion over whether to
accept or reject such resignation; and (ii) the Companys
obligations under the Nomination Agreement would terminate.
Accordingly, on December 21, 2016, Mr. Allen executed and
delivered to the Company an irrevocable letter of resignation,
effective only upon, and subject to, such time as the Anchorage
Holders fall below the foregoing ownership threshold and the
Board accepts such resignation.
affiliates ceasing to beneficially own at least 10% of the
Companys outstanding common stock: (i) the Anchorage Holders
would be required to cause Mr. Allen to promptly offer to tender
his resignation from the Board and any committee of the Board on
which he may be a member and, if requested by the Company,
deliver his written resignation, to be effective immediately, to
the Board, which shall have sole discretion over whether to
accept or reject such resignation; and (ii) the Companys
obligations under the Nomination Agreement would terminate.
Accordingly, on December 21, 2016, Mr. Allen executed and
delivered to the Company an irrevocable letter of resignation,
effective only upon, and subject to, such time as the Anchorage
Holders fall below the foregoing ownership threshold and the
Board accepts such resignation.
The foregoing summary of the Nomination Agreement is not complete
and is qualified in its entirety by the full text of the
Nomination Agreement, a copy of which is filed herewith as
Exhibit 10.1 to this report and is incorporated by
reference herein.
and is qualified in its entirety by the full text of the
Nomination Agreement, a copy of which is filed herewith as
Exhibit 10.1 to this report and is incorporated by
reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
The information set forth under Item 1.01 of this report is
incorporated by reference into this Item 5.02.
incorporated by reference into this Item 5.02.
In connection with Mr. Allens appointment to the Board, the
Company intends to enter into an indemnification agreement with
Mr. Allen in substantially the form of the standard
indemnification agreement entered into by the Company with its
other directors, the form of which was previously filed with
the SEC as Exhibit 10.12 to Amendment No. 1 to the Companys
Registration Statement on Form S-1 (File No. 333-190356).
Company intends to enter into an indemnification agreement with
Mr. Allen in substantially the form of the standard
indemnification agreement entered into by the Company with its
other directors, the form of which was previously filed with
the SEC as Exhibit 10.12 to Amendment No. 1 to the Companys
Registration Statement on Form S-1 (File No. 333-190356).
The Company has previously disclosed certain other transactions
and arrangements with Anchorage to Item 404(a) of Regulation
S-K under the heading Related Person Transactions on pages 11
through 13 of the Companys definitive proxy statement on
Schedule 14A for its 2016 annual meeting of stockholders, which
was filed with the Securities and Exchange Commission on March
30, 2016 (File No. 001-36166). The foregoing proxy statement
disclosure (and no other part of such proxy statement) is
incorporated by reference herein.
and arrangements with Anchorage to Item 404(a) of Regulation
S-K under the heading Related Person Transactions on pages 11
through 13 of the Companys definitive proxy statement on
Schedule 14A for its 2016 annual meeting of stockholders, which
was filed with the Securities and Exchange Commission on March
30, 2016 (File No. 001-36166). The foregoing proxy statement
disclosure (and no other part of such proxy statement) is
incorporated by reference herein.
Item 7.01. Regulation FD Disclosure.
On December 22, 2016, the Company issued a press release
announcing the appointment of Mr. Allen to the Board and the
entry into the Nomination Agreement. A copy of the press
release is furnished herewith as Exhibit 99.1 to this
report.
announcing the appointment of Mr. Allen to the Board and the
entry into the Nomination Agreement. A copy of the press
release is furnished herewith as Exhibit 99.1 to this
report.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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10.1
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Nomination Agreement dated as of December 21, 2016, by
and among Houghton Mifflin Harcourt Company and certain affiliates of Anchorage Capital Group, L.L.C. |
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99.1
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Press Release dated December 22, 2016.
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About HOUGHTON MIFFLIN HARCOURT COMPANY (NASDAQ:HMHC)