EXECUTION VERSION COOPERATION AGREEMENT
EXECUTION VERSION
This COOPERATION AGREEMENT (the “Agreement”), dated as of February 25, 2019 is made and entered into by NN, INC., a Delaware corporation (the “Company”) and LEGION PARTNERS ASSET MANAGEMENT, LLC, a Delaware limited liability company, (together with its Affiliates “Legion Partners”) and each of the other persons listed on the signature page to this Agreement (collectively with Legion Partners and together with any other Affiliates of Legion Partners, the “Investor Group” and each individually, an “Investor”).
WHEREAS, the Company and the Investor Group have engaged in discussions regarding the Company;
1. Board Matters; Board Nominations; Board Policies and Procedures.
criteria applicable to directors, and the Board has assumed that the director questionnaire and other customary director onboarding documentation provided by each New Director is or will be fully completed, true and accurate.
Concurrently with the effectiveness of this Agreement, the Board will take all necessary actions to increase the size of its membership by two (2) and appoint the Class III Designee as a Class III member of the Board with a term expiring at the 2019 Annual Meeting and the Class I Designee as a Class I member of the Board with a term expiring at the 2020 annual meeting of stockholders of the Company (the “2020 Annual Meeting”). In addition, prior to the mailing of its definitive proxy statement for the 2019 Annual Meeting, the Board will take all necessary actions to nominate the Class III Designee (or any Replacement pursuant to Section 1(c)) as a candidate for election to the Board in place of Xxxxxxx Xxxxx at the 2019 Annual Meeting to serve until the expiration of such person’s elected term, or until such person’s earlier death, resignation, disqualification or removal.
At the 2019 Annual Meeting, the Company agrees to recommend, support and solicit proxies for the election of the Class III Designee (or any Replacement pursuant to Section 1(c)) in the same manner as for other independent director candidates nominated by the Company at the 2019 Annual Meeting. The Company agrees that each New Director shall receive (i) the same compensation for service as a director as the compensation received by other non- management directors on the Board, and (ii) such other benefits on the same basis as all other non-management directors on the Board.
Group ceases to have beneficial ownership of at least the lesser of (i) 4.0% of the outstanding shares of Common Stock and (ii) 1,684,168 shares of Common Stock.
(other than the election of directors), each of the Investors shall have the right to vote on the Company’s card in accordance with the recommendation of ISS and Glass Lewis with respect to such proposal so long as no Investor publicly discloses such vote; provided, further, that with respect to any Extraordinary Matter, each of the Investors shall have the ability to vote freely on the Company’s card. For purposes of this Section 3, an “Extraordinary Matter” means, with respect to the Company: (i) any merger, acquisition, recapitalization, restructuring, financing, disposition, distribution, spin-off, sale or transfer of all or substantially all of the Company’s or any of its Affiliates’ assets in one or a series of transactions, joint venture or other business combination of the Company or any of its Affiliates with a third party and (ii) any implementation of takeover defenses not in existence as of the date of this Agreement by the Company.
(a) From the date of this Agreement until the expiration of the Standstill Period, each Investor shall not, and shall cause their respective Affiliates, principals, directors, general partners, officers, employees and, to the extent acting on their behalf, agents and representatives (collectively, the “Related Persons”) not to, directly or indirectly:
(i) make any announcement or proposal with respect to, or offer, seek, propose, or indicate an interest in (A) any form of business combination or acquisition or other transaction relating to assets or securities of the Company or any of its subsidiaries, (B) any form of restructuring, recapitalization or similar transaction with respect to the Company or any of its subsidiaries, or (C) any form of tender or exchange offer for the Common Stock, whether or not such transaction involves a Change of Control (as defined below) of the Company (it being understood that the foregoing shall not prohibit Investors or their Affiliates from acquiring Common Stock within the limitations set forth in Section 4(a)(iii));
(ii) engage in any solicitation of proxies or written consents to vote (or withhold the vote of) any voting securities of the Company, or conduct any binding or nonbinding referendum with respect to any voting securities of the Company, or assist or participate in any other way, directly or indirectly, in any solicitation of proxies (or written consents) with respect to any voting securities of the Company, or otherwise become a “participant” in a “solicitation,” as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-1 of Regulation 14A, respectively, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to vote (or withhold the vote of) any securities of the Company;
(iii) purchase or otherwise acquire, or offer, seek, propose, or agree to acquire, ownership (including beneficial ownership as defined in Rule 13d-3 under the Exchange Act) of any securities of the Company, any direct or indirect rights or options to acquire any such securities, any derivative securities or contracts or instruments in any way related to the price of shares of Common Stock of the Company, or any assets or liabilities of the Company; provided that the Investor Group, in the aggregate, may acquire beneficial ownership of up to 9.9% of the outstanding shares of Common Stock;
(iv) seek to advise, encourage, or influence any person with respect to the voting of (or execution of a written consent in respect of), acquisition of or disposition of any securities of the Company;
(v) sell, offer, or agree to sell, directly or indirectly, through swap or hedging transactions or otherwise, the securities of the Company or any rights decoupled from the underlying securities held by the Investor Group to any person or entity not (A) a party to this Agreement or (B) an Affiliate of the Investor Group (any person or entity not set forth in clauses (A) and (B) shall be referred to as a “Third Party”) that would knowingly result in such Third Party, together with its Affiliates, owning, controlling or otherwise having any, beneficial or other ownership interest representing in the aggregate in excess of 4.9% of the shares of Common Stock outstanding at such time (except for Schedule 13G filers that are mutual funds, pension funds or index funds with no known history of activism);
(vi) take any action in support of or make any proposal or request that constitutes (or would constitute if taken): (A) advising, controlling, changing, or influencing the Board or management of the Company, including any plans or proposals to change the voting standard with respect to director elections, number or term of directors or to fill any vacancies on the Board, except as set forth in this Agreement, (B) any change in the capitalization, stock repurchase programs and practices, or dividend policy of the Company, (C) any other change in the Company’s management, business, or corporate structure, (D) seeking to have the Company waive or make amendments or modifications to the Certificate of Incorporation or Bylaws, or other actions that may impede or facilitate the acquisition of control of the Company by any person, (E) causing a class of securities of the Company to be delisted from, or to cease to be authorized to be quoted on, any securities exchange, or (F) causing a class of securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act;
(vii) communicate with stockholders of the Company or others pursuant to Rule 14a-1(l)(2)(iv) under the Exchange Act;
(viii) engage in any course of conduct with the purpose of causing stockholders of the Company to vote contrary to the recommendation of the Board on any matter presented to the Company’s stockholders for their vote at any meeting of the Company’s stockholders or by written consent;
(ix) call or seek to call, or request the call of, alone or in concert with others, any meeting of stockholders, whether or not such a meeting is permitted by the Certificate of Incorporation or Bylaws, including a “town hall meeting”;
(x) deposit any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of any Common Stock (other than any such voting trust, arrangement or agreement solely among the Investors or any Affiliates thereof that is otherwise in accordance with this Agreement);
(xi) act, seek, facilitate or encourage any person to submit nominations or proposals, whether in furtherance of a “contested solicitation” or otherwise, for the appointment, election or removal of directors or otherwise with respect to the Company or seek, facilitate, encourage, or take any other action with respect to the appointment, election or removal of any directors;
(xii) form, join, or in any other way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock; provided, however, that nothing in this Agreement shall limit the ability of an Affiliate of the Investor Group to join the “group” following the execution of this Agreement, so long as any such Affiliate agrees to be bound in writing by the terms and conditions of this Agreement and, if required under the Exchange Act, an Investor files a Schedule 13D within two (2) business days disclosing that such Investor has formed a group with such Affiliate (it being understood that such Schedule 13D and the contents thereof may not violate any of the restrictions set forth in this Agreement);
(xiii) demand a copy of the Company’s list of stockholders or its other books and records or make any request under any statutory or regulatory provisions of Delaware law;
(xiv) commence, encourage, or support any derivative action in the name of the Company or any class action against the Company or any of its officers or directors, in each case with the intent of circumventing the provisions of this Section 4, or take any action challenging the validity or enforceability of any of the provisions of this Section 4; provided, however, that the foregoing shall not prevent any Investor from (A) bringing litigation against the Company to enforce the provisions of this Agreement, (B) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company against an Investor, or (C) responding to or complying with a validly issued legal process that neither the Investor Group nor any of their Affiliates initiated, encouraged or facilitated;
(xv) make any request or submit any proposal to amend or waive the terms of this Section 4 other than through non-public communications with the Company that would not be reasonably expected to result in or involve public disclosure obligations for any party; or
(xvi) enter into any discussions, negotiations, agreements or understandings with any person or entity with respect to any action the Investors are prohibited from taking pursuant to this Section 4, or advise, assist, knowingly encourage or seek to persuade any person or entity to take any action or make any statement with respect to any such action, or otherwise take or cause any action or make any statement inconsistent with any of the foregoing.
Notwithstanding the foregoing, nothing in this Section 4 or elsewhere in this Agreement shall prohibit or restrict the Investor Group from: (A) communicating privately with the Board or any executive officer or director of the Company, regarding any matter, so long as such communications are not intended to, and would not reasonably be expected to, require any public
disclosure of such communications or otherwise violate this Section 4; (B) taking any action necessary to comply with any law, rule or regulation or any action required by any governmental or regulatory authority or stock exchange that has, or may have, jurisdiction over the Investor Group or any of their respective Affiliates or Associates, provided that a breach by the Investor Group of this Agreement is not the cause of the applicable requirement and provided, that such Investor, to the extent legally permissible, must provide written notice to the Company of at least two (2) business days prior to taking any such action that would otherwise be prohibited under this Agreement, and reasonably consider any comments of the Company regarding such proposed action; (C) privately communicating to any of their potential investors or investors publicly available factual information regarding the Company consistent with prior practice in Legion Partners’ annual and quarterly investor letters, provided such communications are not reasonably expected to be publicly disclosed and are understood by all parties to be private communications and do not otherwise violate this Section 4 or Section 7; and (D) privately communicating to any stockholders of the Company in a manner that otherwise does not violate this Section 4 or Section 7 of this Agreement; provided that such communications are not reasonably expected to be publicly disclosed and are understood by all parties to be private communications.
(b) The provisions of this Section 4 shall not limit in any respect the actions of any director of the Company in his or her capacity as such, recognizing that such actions are subject to such director’s fiduciary duties to the Company and its stockholders (it being understood and agreed that neither the Investors nor any of their Affiliates shall seek to do indirectly through any director or other party anything that would be prohibited if done by any of the Investors or their Affiliates).
(c) For purposes of this Agreement:
(i) “Affiliate” shall mean any “Affiliate” as defined in Rule 12b-2 promulgated by the SEC under the Exchange Act;
(ii) “Associate” shall mean any “Associate” as defined in Rule 12b-2 promulgated by the SEC under the Exchange Act;
(iii) “beneficial owner” and “beneficial ownership” shall have the same meanings as set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act;
(iv) a “Change of Control” transaction shall be deemed to have taken place if (1) any person is or becomes a beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the equity interests and voting power of the Company’s then outstanding equity securities, (2) the Company effects a merger or a stock-for-stock transaction whereby immediately after the consummation of the transaction the Company’s stockholders retain less than 50% of the equity interests and voting power of the surviving entity’s then outstanding equity securities or (3) the Company sells substantially all of the Company’s assets;
(v) “person” or “persons” shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature; and
(vi) “Standstill Period” shall mean the period commencing on the date of this Agreement and ending on the date that is 15 calendar days prior to the last day of the advance notice period for the submission by stockholders of director nominations for consideration at the 2020 Annual Meeting (as set forth in the advance notice provisions of the Bylaws existing on the date hereof).
(d) At any time during the Standstill Period, upon reasonable written notice from the Company pursuant to Section 11 hereof, the Investor Group will promptly provide the Company with information regarding the amount of the securities of the Company beneficially or economically owned by each such entity or individual. This ownership information provided to the Company will be kept strictly confidential unless required to be disclosed pursuant to applicable laws and regulations, any subpoena, legal process or other legal requirement or in connection with any litigation or similar proceedings in connection with this Agreement.
Investor associated with that signatory’s name, and to bind such Investor to the terms of this Agreement, (d) each of the Investors shall use its commercially reasonable efforts to cause each of its respective Related Persons to comply with the terms of this Agreement, and (e) the execution, delivery and performance of this Agreement by such Investor does not violate or conflict with (i) any law, rule, regulation, order, judgment or decree applicable to it, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both could become a default) under or pursuant to, or result in the loss of a material benefit under, or give any right of termination, amendment, acceleration or cancellation of, any organizational document, agreement, contract, commitment, understanding or arrangement to which such member is a party or by which it is bound. Each Investor further agrees that it shall not compensate any New Director for serving on the Board or enter into any contract, agreement, arrangement, commitment or understanding (whether written or oral) relating to the Company with any director or officer of the Company. Each Investor represents and warrants that it has no voting commitments or other arrangements or understandings with any of the New Directors as of the date hereof. Each Investor represents and warrants that it does not have, directly or indirectly, any agreements, arrangements or understandings with any person (other than their own Representatives) with respect to any potential transaction involving the Company, the acquisition, voting or disposition of any securities of the Company, or the potential submission of any proposals or director nominations at the Company (other than Investor’s agreements, arrangements or understandings with any potential director candidate concerning Investor’s nomination or potential nomination of such candidate to the Board, all of which matters have been subsequently addressed by this Agreement).
(a) Each Investor agrees that, until the expiration of the Standstill Period, neither it nor any of its Affiliates will, and it will cause each of its Affiliates and Related Persons not to, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of any kind, whether verbal, in writing, electronically transferred or otherwise, that might reasonably be construed to be derogatory toward the Company or any of its past or present directors, officers, Affiliates, subsidiaries, employees, agents or representatives (collectively, the “Company Representatives”), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of the Company or its subsidiaries or Affiliates, or to malign, harm, disparage, defame or damage the reputation or good name of the Company, any Company Representative or the Company’s business; provided, however, that the foregoing shall not prevent the Investor Group from privately communicating to the Company, or any directors or executive officers of the Company factual information based on publicly available information that does not otherwise violate Section 4 of this Agreement.
(b) The Company agrees that, until the expiration of the Standstill Period, neither it nor any of its executive officers or directors will, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way (or cause, further, assist, solicit, encourage, support or participate in any of the foregoing), any remark, comment, message, information, declaration, communication or other statement of
any kind, whether verbal, in writing, electronically transferred or otherwise, that might reasonably be construed to be derogatory toward any Investor or any of its past or present directors, officers, Affiliates, subsidiaries, employees, agents or representatives (collectively, the “Investor Representatives”), or that reveals, discloses, incorporates, is based upon, discusses, includes or otherwise involves any confidential or proprietary information of any Investor or its Affiliates, or to malign, harm, disparage, defame or damage the reputation or good name of any Investor, any Investor Representative or any Investor’s business; provided, however, that the foregoing shall not prevent private communications to the Investor Group or Investor Representatives of factual information based on publicly available information.
(c) Notwithstanding the foregoing, nothing in this Section 7 or elsewhere in this Agreement shall prohibit any party to this Agreement from making any statement or disclosure required under the federal securities laws or other applicable laws, rules or regulations so long as such requirement is not due to a breach by any party of this Agreement; provided, that such party must, to the extent legally permissible and practicable, provide written notice to the other party at least five (5) business days prior to making any such statement or disclosure required under the federal securities laws or other applicable laws that would otherwise be prohibited by the provisions of this Section 7, and shall reasonably consider any comments of the other party.
(d) The limitations set forth in Sections 7(a) and 7(b) shall not prevent any party to this Agreement from responding to any public statement made by the other party of the nature described in Sections 7(a) and 7(b) if such statement by the other party was made in breach of this Agreement.
(a) No later than four (4) business days following the execution of this Agreement, the Company shall file a Current Report on Form 8-K with the SEC reporting the appointment of the New Directors and appending or incorporating by reference this Agreement as an exhibit. The Company shall provide the Investor Group with a reasonable opportunity to review and comment on the Form 8-K prior to it being filed with the SEC and consider in good faith any comments of the Investor Group.
(b) No later than two (2) business days following the execution of this Agreement, the Investor Group shall file an amendment to that certain Schedule 13D, dated January 18, 2019, as amended and may be amended (the “Schedule 13D”) with respect to the
Company that has been filed with the SEC, reporting the entry into this Agreement and appending or incorporating by reference this Agreement as an exhibit thereto (the “Schedule 13D Amendment”). The Investor Group shall provide the Company with a reasonable opportunity to review and comment on the Schedule 13D Amendment prior to it being filed with the SEC and consider in good faith any comments of the Company.
(c) Except for amendments to the Schedule 13D filed by the Investor Group made solely to report material changes to the information contained therein, including a change in the level of ownership of Common Stock and the entry into this Agreement and the issuance of the Press Release, none of the Investors shall, during the Standstill Period, (i) issue a press release in connection with this Agreement or the actions contemplated hereby or (ii) otherwise make any public statement, disclosure or announcement with respect to this Agreement or the actions contemplated hereby, in each case without the prior written consent of the Company, unless required by applicable law, rules or regulations in which case the Investor shall first preview such disclosure or announcement with the Company in advance of making such disclosure or announcement and consider comments by the Company.
If to the Company:
NN, Inc. 0000 Xxxxxx Xxxx Xxxx Xxxxxxxxx, XX 00000 Attn: Xxxx Xxxxxx Email: xxxx.xxxxxx@xxxxx.xxx
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP 000 Xxxxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Attn: Xxxx Xxxxxxxxxx Email: xxxxxxxxxxx@xxxxxx.xxx
If to any Investor:
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000 Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 Attn: Xxxxxxxxxxx X. Xxxxx Email: xxxxxx@xxxxxxxxxxxxxx.xxx
with copies (which shall not constitute notice) to:
Xxxxxx Frome Wolosky LLP 0000 Xxxxxx xx xxx Xxxxxxxx Xxx Xxxx, XX 00000 Attn: Xxxxx Xxxxxxx
Xxxxxxxxx Xxxxxxxx-Xxxxxxx Email: xxxxxxxx@xxxxxxxxx.xxx
xxxxxxxxx@xxxxxxxxx.xxx
12. Governing Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement, the relationship of the parties, and/or the interpretation and enforcement of the rights and duties of the parties shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to any conflict of laws provisions thereof.
13. Jurisdiction. Each party to this Agreement agrees, on behalf of itself and its Affiliates and Associates, that any actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated by this Agreement will be brought solely and exclusively in any state or federal court in the State of New York (and the parties agree not to commence any action, suit or proceeding relating to this Agreement or the transactions contemplated by this Agreement except in such courts), and further agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 11 will be effective service of process for any such action, suit or proceeding
brought against any party in any such court. Each party, on behalf of itself and its Affiliates and Associates, irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated by this Agreement, in any state or federal court in the State of New York, and further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an improper or inconvenient forum.
14. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14.
15. Representative. Each Investor irrevocably appoints Legion Partners Asset Management, LLC as its attorney-in-fact and representative (the “Legion Representative”), in such Investor’s place and stead, to do any and all things and to execute any and all documents and give and receive any and all notices or instructions in connection with this Agreement and the transactions contemplated by this Agreement. The Company shall be entitled to rely, as being binding on each Investor, upon any action taken by the Legion Representative or upon any document, notice, instruction or other writing given or executed by the Legion Representative.
[Signature Page Follows]
16 4912430-5
NN, INC, By: Name: Xxxxxxx X. Xxxxxx Title: President and Chief Executive Officer
LEGION PARTIES: LEGION PARTNERS, L.P. I By: Legion Partners Asset Management, LLC Investment Advisor By: Name: Xxxxxxxxxxx X. Xxxxx Title: Managing Director LEGION PARTNERS, X.X. XX By: Legion Partners Asset Management, LLC Investment Advisor By: Name: Xxxxxxxxxxx X. Xxxxx Title: Managing Director LEGION PARTNERS SPECIAL OPPORTUNITIES, L.P. XI By: Legion Partners Asset Management, LLC Investment Advisor By: Name: Xxxxxxxxxxx X. Xxxxx Title: Managing Director
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EXHIBIT A
FORM OF AMENDMENTS
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CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
NN, INC.
________________________________________
Pursuant to Section 242 of the General Corporation Law of the State of Delaware
________________________________________
NN, INC., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:
1. Section 3 of Article V of the Restated Certificate of Incorporation of the Corporation
is hereby amended in its entirety to read as follows:
“Until the election of directors at the 2021 annual meeting of
stockholders of the Corporation, the directors, other than those who
may be elected by the holders of any series of Preferred Stock under
specified circumstances, shall be divided, with respect to the time
for which they severally hold office, into three classes, as nearly
equal in number as is reasonably possible. Each director elected at
or prior to the 2018 annual meeting of stockholders shall be elected
for a term expiring on the date of the third annual meeting of
stockholders following the annual meeting of stockholders at which
the director was elected. Each director elected at the 2019 annual
meeting of stockholders shall be elected for a one-year term expiring
at the 2020 annual meeting of stockholders. Each director elected at
the 2020 annual meeting of stockholders shall be elected for a one-
year term expiring at the 2021 annual meeting of stockholders. At
the 2021 annual meeting of stockholders and each annual meeting
of stockholders thereafter, all directors shall be elected for a one-
year term expiring at the next annual meeting of stockholders.
Directors elected to succeed those directors whose terms then expire
shall be elected for a term of office to expire at the succeeding
annual meeting of stockholders after their election, with each
director to hold office until his or her successor shall have been duly
elected and qualified.”
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2. The second paragraph of Section 5 of Article V of the Restated Certificate of
Incorporation of the Corporation is hereby amended in its entirety to read as follows.
“Directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office to which
they have been elected expires pursuant to Section 3 of this Article
V and until such director’s successor shall have been duly elected
and qualified. No decrease in the authorized number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director. For the purpose of this Certificate of Incorporation, “Whole
Board” shall mean the total number of directors which the
Corporation would have if there were no vacancies.”
3. The amendment to the Restated Certificate of Incorporation effected hereby has
been duly adopted in accordance with the provisions of Section 242 of the General Corporation
Law of the State of Delaware.
4. This Certificate of Amendment will become effective when filed with the Secretary
of State of the State of Delaware.
NN, INC.
By:
Name:
Title:
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AMENDMENT TO THE
AMENDED AND RESTATED BYLAWS OF
NN, INC. (a Delaware Corporation)
1. Section 2.1 of Article II of the Amended and Restated Bylaws (the “Bylaws”) of NN, Inc., a Delaware corporation (the “Company”), is hereby amended to read, in its entirety, as follows:
2. This Amendment shall be effective as of [●], 2019.
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EXHIBIT B
STOCKHOLDERS, AFFILIATES, AND OWNERSHIP
Name of Person or Entity Number of Shares
Legion Partners, L.P. I (“Legion Partners I”)
Legion Partners I beneficially owns 2,590,434 shares of common stock of the Company.
Legion Partners, X.X. XX (“Legion Partners II”)
Legion Partners II beneficially owns 156,974 shares of common stock of the Company.
Legion Partners Special Opportunities, L.P. XI (“Legion Partners XI”)
Legion Partners Special Opportunities beneficially owns 630,923 shares of common stock of the Company.
Legion Partners, LLC As the general partner of each of Legion Partners I, Legion Partners II, and Legion Partners XI, Legion Partners, LLC may be deemed the beneficial owner of the (i) 2,590,434 shares owned by Legion Partners I, (ii) 156,974 shares owned by Legion Partners II and (iii) 630,923 shares owned by Legion Partners XI.
Legion Partners Asset Management, LLC (“Legion Partners Asset Management”)
As the investment advisor of each of Legion Partners I, Legion Partners II, and Legion Partners XI, Legion Partners Asset Management may be deemed the beneficial owner of the (i) 2,590,434 shares owned by Legion Partners I, (ii) 156,974 shares owned by Legion Partners II and (iii) 630,923 shares owned by Legion Partners XI.
Legion Partners Holdings, LLC (“Legion Partners Holdings”)
Legion Partners Holdings directly beneficially owns 300 shares of common stock of the Company. In addition, as the sole member of Legion Partners Asset Management and sole member of Legion Partners, LLC, Legion Partners Holdings may be deemed the beneficial owner of the (i) 2,590,434 shares owned by Legion Partners I, (ii) 156,974 shares owned by Legion Partners II and (iii) 630,923 shares owned by Legion Partners XI.
Xxxxxxx Xxxxx As a managing director of Legion Partners Asset Management and a managing member of Legion Partners Holdings, Xx. Xxxxx may be deemed the beneficial owner of the (i) 2,590,434 shares owned by Legion Partners I, (ii) 156,974 shares owned by Legion Partners II, (iii) 630,923 shares owned by Legion Partners XI and (iv) 300 shares owned by Legion Partners Holdings.
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EXHIBIT C
FORM OF PRESS RELEASE
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RE: NN, Inc. 0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
FOR FURTHER INFORMATION:
AT XXXXXXXXX MACGREGOR Xxxxxx Xxxxx (General info) (000) 000-0000
FOR IMMEDIATE RELEASE February [XX], 2019
NN, INC. EXPANDS ITS BOARD OF DIRECTORS
Announces Cooperation Agreement with Legion Partners
Adds Two New Independent Directors, Xxxx Xxxxxx and Xxxxxx Xxxxx, With Capital Markets, Financial and Governance Expertise
Company to Declassify Board by 2021 Annual Meeting
Charlotte, NC, February [XX], 2019 – NN, Inc., (NASDAQ: NNBR) a diversified industrial company, today announced that its board of directors has unanimously voted to expand its board by appointing Xxxx Xxxxxx, Founder & Chairman of Avante Capital Partners, and Xxxxxx Xxxxx, formerly Senior Vice President, Chief Financial Officer & Treasurer at Xxxxxx Corporation (retired), as new independent directors, effective immediately. NN’s board will now be comprised of nine directors, eight of whom are independent.
Additionally, as part of its commitment to good corporate governance, the Company also announced that it will approve and recommend amendments to its Restated Certificate of Incorporation to implement the Company’s transition to annual elections for directors. Directors will be elected for one- year terms beginning with the 2019 class of directors. Later classes will also stand for one-year terms at subsequent annual meetings, and the board will be fully declassified by the 2021 Annual Meeting when the directors in the 2018 director class complete their elected terms.
These initiatives follow constructive dialogue and collaboration with Legion Partners Asset Management LLC (“Legion Partners”). Today’s announcement reflects the Company’s entry into an associated cooperation agreement between NN and affiliates of Legion Partners.
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Xxxxxx Xxxxxxx, Non-Executive Chairman of the Board, said, “Our Governance Committee annually conducts a review of the board of directors and our corporate governance practices to ensure alignment with the Company’s business objectives and commitment to driving shareholder value. Upon this year’s review, we decided that now is the right time to expand and declassify our board. We are delighted to welcome Xxxx and Xxxxxx, both highly-qualified directors, to NN’s board, adding enhanced expertise in capital markets, finance and governance, which we believe will benefit NN as we continue to execute our strategic plan.”
Xxxxxxx Xxxxxx, President & Chief Executive Officer, commented, “I am pleased to have Xxxx and Xxxxxx join the board and look forward to working closely with them during this next phase of our strategic evolution. With proven financial and capital markets experience, we believe that the additions of Xxxx and Xxxxxx will further drive NN toward our goal of enhancing performance through our balanced portfolio focused on higher-growth end markets while continuing to de-lever.”
“The addition of Xxxx and Xxxxxx as independent directors will add valuable capital markets knowledge and fresh perspective to the board,” said Xxxxx Xxxxx, Co-Founder and Managing Director of Legion Partners. “We applaud NN’s proposal to declassify its board, bringing it up-to-date with governance best practices. These are positive developments for all NN shareholders.”
Xx. Xxxxxx said, “I am excited to join the NN board at this key inflection point in the Company’s history. I look forward to working closely with the entire board and management team to advance NN’s position as a leading diversified industrial company.”
Xx. Xxxxx commented, “NN has undergone a significant transformation over the last five years, and I’m looking forward to helping guide the Company through this next chapter. I am pleased to join my fellow directors and the management team in helping NN execute on the compelling opportunities ahead.”
Xx. Xxxxxx continued, “We are pleased to have worked constructively with Legion. NN routinely engages with all our shareholders and we always listen to their input and suggestions. Today’s announcement is a result of those ongoing discussions.”
Under the terms of the cooperation agreement between NN and Legion Partners, Legion Partners has agreed to customary standstill, voting and other provisions. The full agreement with Legion Partners will be filed on a Current Report on Form 8-K with the Securities and Exchange Commission.
X.X. Xxxxxx Securities LLC is acting as financial advisor to NN, and Xxxxxxx Xxxxxxx & Xxxxxxxx is acting as legal counsel.
About Xxxx Xxxxxx Xxxx Xxxxxx is a Founder & Chairman of Avante Capital Partners. With over $465 million of capital under management, Avante makes unitranche and subordinated debt and minority equity investments to finance buyouts, minority recaps, acquisitions and growth. In 2018, Avante Capital Partners was named Small Business Investment Company (SBIC) of the Year by the U. S. Small Business Administration (SBA). The firm was also named Women-Owned Firm of the Year 2018 by Private Equity Women Investor Network (PEWIN).
Xx. Xxxxxx has over 30 years of financing experience, involving well over $1 billion in aggregate investments. Prior to founding Avante, Xx. Xxxxxx started-up and led the Los Angeles offices for two
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multi-billion publicly traded private equity and mezzanine investment funds – American Capital and more recently Allied Capital, where she was also a member of Allied’s Investment Committee. Earlier career highlights include various senior level positions with Prudential Capital.
Xx. Xxxxxx has served on numerous boards over her career, and currently serves on the board of Engineered Performance Technologies, a consumer-focused automotive aftermarket performance products company. In addition, Xx. Xxxxxx is a Co-Chair of the ACG – Los Angeles Business Conference, an Ex-Officio Board Member and Past Chair of Small Business Investor Alliance (SBIA), and a Steering Committee Member of PEWIN. In 2013, the National Association of Women Business Owners (NAWBO) Los Angeles inducted Xx. Xxxxxx into their Hall of Fame. In 2015, she was named one of the Most Influential Private Equity Investors in Los Angeles by the Los Angeles Business Journal (LABJ). In January 2016, she was on the cover of Mergers & Acquisitions magazine and named one of the Most Influential Women in Mid-Market M&A, a recognition she again received in 2017, 2018 and 2019. In March 2017, she was recognized as one of 15 Trailblazers by Buyouts Magazine. In July 2018, Xx. Xxxxxx was named by LABJ as one of the LA 500 Most Influential People in Business. She received a Master’s of Business Administration from the University of California – Berkeley, and a Bachelor’s degree in Business from the University of Wisconsin – Milwaukee (summa cum laude).
About Xxxxxx Xxxxx Xxxxxx X. Xxxxx retired as Senior Vice President, CFO & Treasurer at Xxxxxx Corporation, a leader in specialty engineered materials that enable high performance and high reliability in EV/HEV, wireless infrastructure, automotive safety and portable electronics. She is on the board of ArcBest Corp., Commercial Vehicle Group, Inc and Michigan State University Foundation. Previously, she also served on the board of PlyGem Industries, Inc. until the company was taken private in 2018. She also is a Member of the Michigan Association of Certified Public Accountants and Member of The American Institute of Certified Public Accountants.
Over the course of her career Xx. Xxxxx held the positions of CFO, Treasurer, Principal Accounting Officer & SVP at Xxxxxx Corp., CFO, Secretary, Treasurer & Executive VP at Tecumseh Products Co. LLC, Chief Financial Officer at Revstone Industries LLC, Chief Financial Officer & Vice President of Acument Global Technologies, Inc. and Chief Financial Officer & EVP-Administration at GDX Automotive, Inc.
Xx. Xxxxx graduated from Michigan State University with a Bachelor of Arts in Accounting and received her MBA in Finance from Xxxxx State University. Xx. Xxxxx is also a Certified Public Accountant (CPA) and Chartered Global Management Accountant (CGMA).
About NN, Inc. NN, Inc., a diversified industrial company combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies for a variety of markets on a global basis. Headquartered in Charlotte, North Carolina, NN has 51 facilities in North America, Western Europe, Eastern Europe, South America and China.
Forward-Looking Statements
Except for specific historical information, many of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. These, and similar statements, are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause the
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actual performance of NN, Inc. and its subsidiaries to differ materially from those expressed or implied by this discussion. All forward-looking information is provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generally can be identified by the use of forward- looking terminology such as “assumptions”, “target”, “guidance”, “outlook”, “plans”, “projection”, “may”, “will”, “would”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “potential” or “continue” (or the negative or other derivatives of each of these terms) or similar terminology. Factors which could materially affect actual results include, but are not limited to: general economic conditions and economic conditions in the industrial sector, inventory levels, regulatory compliance costs and the Company’s ability to manage these costs, start-up costs for new operations, debt reduction, competitive influences, risks that current customers will commence or increase captive production, risks of capacity underutilization, quality issues, availability and price of raw materials, currency and other risks associated with international trade, the Company’s dependence on certain major customers, and the successful implementation of the global growth plan including development of new products. Similarly, statements made herein and elsewhere regarding pending and completed transactions are also forward- looking statements, including statements relating to the future performance and prospects of an acquired business, the expected benefits of an acquisition on the Company’s future business and operations and the ability of the Company to successfully integrate recently acquired businesses or the possibility that the Company will be unable to execute on the intended redeployment of proceeds from a divestiture, whether due to a lack of favorable investment opportunities or otherwise.
For additional information concerning such risk factors and cautionary statements, please see the section titled “Risk Factors” in the Company’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Except as required by law, we undertake no obligation to update or revise any forward-looking statements we make in our press releases, whether as a result of new information, future events or otherwise.
