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RRD > SEC Filings for RRD > Form 8-K on 3-Oct-2016All Recent SEC Filings

Show all filings for RR DONNELLEY & SONS CO

Form 8-K for RR DONNELLEY & SONS CO


3-Oct-2016

Entry into a Material Definitive Agreement, Completion of Acquisition or D


Item 1.01. Entry into a Material Definitive Agreement.

On September 30, 2016 (the "Closing Date"), R.R. Donnelley & Sons Company ("RR Donnelley" or "the Company") entered into an Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") by and among RR Donnelley, the lenders party thereto from time to time (the "Lenders"), and Bank of America, N.A., as administrative agent (the "Administrative Agent"). The Amended and Restated Credit Agreement provides for $800,000,000 in credit facilities (the "Revolving Facility"). Interest rates on borrowings are equal to, at RR Donnelley's option, a base rate plus a margin ranging from 1.125% to 1.50%, or LIBOR plus a margin ranging from 2.125% to 2.50%, in either case based upon the leverage ratio of RR Donnelley and its restricted subsidiaries. In addition, RR Donnelley will pay a facility fee on the actual daily amount of the aggregate revolving commitments regardless of usage ranging from 0.375% to 0.50%, based upon the leverage ratio of RR Donnelley and the Guarantors. The Revolving Facility matures on September 30, 2021.

The Amended and Restated Credit Agreement also includes an option for RR Donnelley to increase commitments under the Revolving Facility or add "term loans" (any such increase, an "Incremental Facility") in an aggregate amount of up to $100 million, at any time prior to the date that is six months prior to the maturity date, subject to the satisfaction of certain conditions set forth in the Amended and Restated Credit Agreement.

The Amended and Restated Credit Agreement contains certain restrictive covenants on RR Donnelley and its subsidiaries, including but not limited to: limitations on debt, investments, restricted payments, burdensome agreements, liens, merger or sale of assets, conduct of business, transactions with affiliates and dispositions. The Amended and Restated Credit Agreement requires that RR Donnelley maintain a maximum secured leverage ratio of 1.50:1.00, and a maximum leverage ratio, as of the last day of each fiscal quarter commencing with the first fiscal quarter ending December 31, 2015, of (i) with respect to any fiscal quarter ending on or after December 31, 2016 prior to September 30, 2017, 5.00 to 1.00, (ii) with respect to any fiscal quarter ending on or after September 30, 2017 and prior to March 31, 2018, 4.75 to 1.00, (iii) with respect to any fiscal quarter ending on or after March 31, 2018 and prior to March 31, 2019, 4.50 to 1.00, (iv) with respect to any fiscal quarter ending on or after March 31, 2019 and prior to March 31, 2020, 4.25 to 1.00 and (v) with respect to any fiscal quarter ending on or after March 31, 2020, 4.00 to 1.00.

The foregoing summary of the Amended and Restated Credit Agreement is qualified in its entirety by reference to actual Amended and Restated Credit Agreement, attached hereto as Exhibit 10.1 and incorporated herein by reference.



Item 2.01. Completion of Acquisition or Disposition.

On October 1, 2016, RR Donnelley distributed approximately 80.75 percent of the outstanding common stock of Donnelley Financial Solutions, Inc. ("Donnelley Financial"), its financial communications and data services company, and approximately 80.75 percent of the outstanding common stock of LSC Communications, Inc. ("LSC"), its publishing and retail-centric print services and office products business, to RR Donnelley stockholders (the "Distributions"). In the Distributions, holders of RR Donnelley's common stock, par value $0.01 per share, of record as of the close of business on September 23, 2016, (the "Record Date"), received one share of LSC common stock, par value $0.01 per share, and one share of Donnelley Financial common stock, par value $0.01 per share, for every eight shares of RR Donnelley's common stock held on the Record Date. The Distributions are part of a series of transactions, following which the LSC and Donnelley Financial became public companies and RR Donnelley retained a 19.25 percent continuing stock ownership interest in each of LSC and Donnelley Financial (the "Separation").

Agreements with LSC Communications, Inc. and Donnelley Financial Solutions, Inc.

For purposes of governing the ongoing relationships among the Company, LSC and Donnelley Financial and to provide for an orderly transition, the Company, LSC and Donnelley Financial entered into the agreements described below prior to the Distributions.

The Separation and Distribution Agreement, dated as of September 14, 2016, by and among the Company, LSC and Donnelley Financial, attached hereto as Exhibit 2.1, effected the distribution of LSC's common stock and the distribution of Donnelley Financial's common stock to the Company's common stockholders. This agreement also governs the Company's relationships with LSC and Donnelley Financial with respect to pre-Separation matters and provides for the allocation of employee benefit, litigation and other liabilities and obligations attributable to periods prior to the Separation. The


Separation and Distribution Agreement also includes an agreement that the Company, LSC and Donnelley Financial will provide each other with appropriate indemnities with respect to liabilities arising out of the businesses being distributed and retained by the Company in the Separation. The Separation and Distribution Agreement also addresses employee compensation and benefits matters.

The Transition Services Agreement, dated as of September 14, 2016, between the Company and LSC, attached hereto as Exhibit 2.2, and the Transition Services Agreement, dated as of September 14, 2016, between the Company and Donnelley Financial, attached hereto as Exhibit 2.3, under which, in exchange for the fees specified in such agreements, LSC and Donnelley Financial agree to provide certain services to the Company and the Company agrees to provide certain services to LSC and Donnelley Financial, respectively, for up to 24 months following the Separation. These services include, but are not limited to, tax, information technology, treasury, internal audit, human resources, accounting, purchasing, communications, security and compensation and benefits.

The Tax Disaffiliation Agreement, dated as of September 14, 2016, between the Company and LSC, attached hereto as Exhibit 2.4, and the Tax Disaffiliation Agreement, dated as of September 14, 2016, between the Company and Donnelley Financial, attached hereto as Exhibit 2.5, allocate responsibility for taxes between the Company and LSC and Donnelley Financial, respectively, and includes indemnification rights with respect to tax matters and restrictions to preserve the tax-free status of the Separation.

The Patent Assignment and License Agreement, dated as of September 27, 2016, between LSC Communications US, LLC ("LSC US LLC") and the Company, attached hereto as Exhibit 2.6, and the Patent Assignment and License Agreement, dated as of September 27, 2016, between Donnelley Financial, LLC and RR Donnelley, . . .



Item 5.02. Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Changes in Directors

On September 30, 2016, effective as of 11:59 p.m. Eastern Time, the following directors of the Company tendered their resignations as directors of the Company: Richard L. Crandall, Judith H. Hamilton, Richard K. Palmer, Thomas J. Quinlan III and Oliver R. Sockwell. Also on September 30, 2016, effective as of 11:59 p.m. Eastern Time, the following directors of the Company retired as directors of the Company: Susan M. Cameron and Michael T. Riordan. John C. Pope, Susan M. Gianinno and Jeffrey M. Katz remain directors of the Company.

On October 1, 2016, the Board of Directors of the Company (the "Board") determined the number of directors would be seven and the following individuals were appointed to the Board of Directors of the Company (the "Board") to fill the vacancies created by the foregoing resignations and retirements and to serve in such capacity until such time as their successors are duly elected and qualify:

Daniel L. Knotts Timothy R. McLevish Jamie Moldafsky P. Cody Phipps

Biographical information concerning these individuals is included in the Current Report on Form 8-K, dated August 29, 2016 and such information is incorporated into this Item 5.02 by reference.

Mr. Pope remains as the Chairperson of the Board. On October 1, 2016, Mr. Pope, Mr. McLevish and Mr. Katz were appointed to serve as members of the Audit Committee of the Board. Mr. McLevish was appointed as the Chairperson of the Audit Committee. The Board has determined that each member of the Audit Committee (i) is "independent" within the meaning of the rules of both the New York Stock Exchange ("NYSE") and the SEC, (ii) has the requisite attributes of an "audit committee financial expert" as defined by regulations promulgated by the SEC and that such attributes were acquired through relevant education and/or experience, (iii) is "financially literate" as required by the rules of the NYSE, (iv) has "accounting or related financial management expertise" as required by the rules of the NYSE and is able to read and understand fundamental financial statements, including balance sheets, income statements and cash flow statements, and (v) has not participated in the preparation of the financial statements of the Company or any of its subsidiaries at any time during the past three years.

Also on October 1, 2016, the Board renamed the Governance, Responsibility and Technology Committee of the Board to be the Corporate Responsibility and Governance Committee. Ms. Gianinno, Mr. Katz and Ms. Moldafsky were appointed to serve as members of the Corporate Responsibility and Governance Committee of the Board. Ms. Gianinno was appointed as the Chairperson of the Corporate Responsibility and Governance Committee. The Board has determined that each member of the Corporate Responsibility and Governance Committee is "independent" for purposes of serving on the Corporate Responsibility and Governance Committee within the meaning of the NYSE listing rules.

Ms. Gianinno, Mr. McLevish and Mr. Phipps were appointed to serve as members of the Human Resources Committee of the Board. Mr. Phipps was appointed as the Chairperson of the Human Resources Committee. The Board has determined that each member of the Human Resources Committee is "independent" for purposes of serving on the Human Resources Committee within meaning of the NYSE listing rules.


Changes in Executive Officers

On October 1, 2016, the following individuals were elected to serve as executive
officers of the Company, in the offices designated until their successors are
duly elected and qualify:



   Daniel L. Knotts            Chief Executive Officer
   Thomas M. Carroll III       Chief Administrative Officer
. . .


Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On September 30, 2016, RR Donnelley filed with the Secretary of State of the State of Delaware an amendment (the "Board Size Amendment") to its restated certificate of incorporation to revise the provision fixing the size of its board of directors by amending and restating the first sentence of Article Seventh of the Restated Certificate of Incorporation to read as follows: "The number of Directors which shall constitute the whole Board shall be determined by the By-Laws of the corporation except that their number shall be not less than six (6) nor more than twelve (12)." The Board Size Amendment was effective at 5:00 p.m. Eastern Time on September 30, 2016.

On September 30, 2016, RR Donnelley filed with the Secretary of State of the State of Delaware an amendment (the "Reverse Stock Split Amendment") to its restated certificate of incorporation to effect a reverse stock split of the Company's outstanding and treasury common stock whereby every three shares of the Company's outstanding and treasury common stock would become one share of the company's common stock, and a corresponding reduction in the number of authorized shares of the Company's common stock from 500,000,000 to 165,000,000. The Reverse Stock Split Amendment was effective 12:02 a.m. Eastern Time October 1, 2016, one minute following the completion of the Distributions.


On October 1, 2016, RR Donnelley amended and restated its by-laws (the "Amended and Restated By-Laws"). The Amended and Restated By-laws implement procedural and clarifying changes from RR Donnelley's existing by-laws, including, among others, granting the explicit power to create executive officer positions to the board of directors and revising the forum selection clause to specify that any state court located in the state of Delaware, rather than the Delaware Court of Chancery exclusively, shall be the exclusive forum for any actions related to RR Donnelley or its directors. On October 3, 2016, RR Donnelley filed with the Secretary of State of the State of Delaware a restated certificate of incorporation (the "2016 Restated Certificate") to give effect to the Board Size Amendment and the Reverse Stock Split Amendment and the previously enacted amendment to reduce the par value of the Company's common stock from $1.25 to $0.01 per share, which was effected on May 31, 2016. No other amendments were reflected in the 2016 Restated Certificate.

The above description is qualified in its entirety by reference to the Board Size Amendment, the Reverse Stock Split Amendment, the 2016 Restated Certificate and the Amended and Restated By-Laws, which are attached as Exhibit 3.1, Exhibit 3.2, Exhibit 3.3, and Exhibit 3.4, to this Current Report on Form 8-K and incorporated into this Item 5.03 by reference.



Item 7.01. Regulation FD Disclosure.

On October 3, 2016, the Company announced the completion of the Separation. The Company's press release is furnished as Exhibit 99.1 to this Current Report.

Information under this Item 7.01, including information set forth in Exhibit 99.1, is deemed to be furnished and not filed.



Item 8.01. Other Events.

On August 31, 2016, the Company and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and MUFG Securities Americas Inc. (such financial institutions collectively, the "Third Party Purchasers"), launched cash tender offers for certain of the Company's outstanding debt securities, including the Company's 6.125% Notes due 2017 (the "2017 Notes"), 7.250% Notes due 2018 (the "2018 Notes"), 8.250% Notes due 2019 (the "2019 Notes") and 7.000% Notes due 2022 (the "2022 Notes"). On September 16, 2016, the Third Party Purchasers purchased $294,500,000 in aggregate principal amount of 2017 Notes and 2018 Notes (the "Third Party Purchase Notes"). On September 30, 2016, the Company purchased an additional $503,630,000 in aggregate principal amount of 2017 Notes, 2018 Notes, 2019 Notes and 2022 Notes (the "Company Purchase Notes"), and exchanged $300 million in aggregate principal amount of Donnelley Financial's 8.250% Notes due 2024 for the Third Party Purchase Notes. The Company cancelled the Third Party Purchase Notes and Company Purchase Notes on September 30, 2016.



Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.                            Description of Exhibit
 2.1              Separation and Distribution Agreement, dated as of September 14,
                  2016, by and among R. R. Donnelley & Sons Company, LSC
                  Communications, Inc. and Donnelley Financial Solutions, Inc.

 2.2              Transition Services Agreement, dated as of September 14, 2016,
                  between LSC Communications, Inc. and R. R. Donnelley & Sons
                  Company

 2.3              Transition Services Agreement, dated as of September 14, 2016,
                  between Donnelley Financial Solutions, Inc. and R. R. Donnelley &
                  Sons Company

 2.4              Tax Disaffiliation Agreement, dated as of September 14, 2016,
                  between LSC Communications, Inc. and R. R. Donnelley & Sons
                  Company

 2.5              Tax Disaffiliation Agreement, dated as of September 14, 2016,
                  between Donnelley Financial Solutions, Inc. and R. R. Donnelley &
                  Sons Company

 2.6              Patent Assignment and License Agreement, dated as of September
                  27, 2016, between LSC Communications US, LLC and R. R. Donnelley
                  & Sons Company


--------------------------------------------------------------------------------
 2.7       Patent Assignment and License Agreement, dated as of September 27,
           2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons
           Company

 2.8       Trademark Assignment and License Agreement, dated as of September 27,
           2016, between LSC Communications US, LLC and R. R. Donnelley & Sons
           Company

 2.9       Trademark Assignment and License Agreement, dated as of September 27,
           2016, between Donnelley Financial, LLC and R. R. Donnelley & Sons
           Company

 2.10      Data Assignment and License Agreement, dated as of September 27, 2016,
           between LSC Communications US, LLC and R. R. Donnelley & Sons Company

 2.11      Data Assignment and License Agreement, dated as of September 27, 2016,
           between Donnelley Financial, LLC and R. R. Donnelley & Sons Company

 2.12      Software, Copyright and Trade Secret Assignment and License Agreement,
           dated as of September 27, 2016, between LSC Communications US, LLC and
           R. R. Donnelley & Sons Company

 2.13      Software, Copyright and Trade Secret Assignment and License Agreement,
           dated as of September 27, 2016, between Donnelley Financial, LLC and R.
           R. Donnelley & Sons Company

 3.1       Certificate of Amendment of Restated Certificate of Incorporation of R.
           R. Donnelley & Sons Company Regarding Board Size

 3.2       Certificate of Amendment of Restated Certificate of Incorporation of R.
           R. Donnelley & Sons Company Regarding Reverse Stock Split

 3.3       Restatement of Certificate of Incorporation of R. R. Donnelley & Sons
           Company

 3.4       Amended and Restated By-Laws of R. R. Donnelley & Sons Company

 4.1       Stockholder and Registration Rights Agreement, dated as of September
           14, 2016, between LSC Communications, Inc. and R. R. Donnelley & Sons
           Company

 4.2       Stockholder and Registration Rights Agreement, dated as of September
           14, 2016, between Donnelley Financial Solutions, Inc. and R. R.
           Donnelley & Sons Company

10.1       Amended and Restated Credit Agreement, dated as of September 30, 2016,
           among R.R. Donnelley & Sons Company, the guarantors party thereto, Bank
           of America, N.A., as Administrative Agent, Swing Line Lender and an L/C
           Issuer, Citigroup Global Markets Inc. and JPMorgan Chase Bank, N.A., as
           Co-Syndication Agents

10.2       R. R. Donnelley & Sons Company Non-Employee Director Compensation Plan

10.3       Employment Agreement, dated as of October 1, 2016, between Daniel L.
           Knotts and R. R. Donnelley & Sons Company

10.4       Employment Agreement, dated as of October 1, 2016, between Thomas M.
           Carroll III and R. R. Donnelley & Sons Company

10.5       Employment Agreement, dated as of October 1, 2016, between Jeffrey G.
           Gorski and R. R. Donnelley & Sons Company

10.6       Employment Agreement, dated as of October 1, 2016, between John Pecaric
           and R. R. Donnelley & Sons Company

10.7       Employment Agreement, dated as of August 15, 2016, between Terry D.
           Peterson and R. R. Donnelley & Sons Company

10.8       Employment Agreement, dated as of October 1, 2016, between Deborah L.
           Steiner and R. R. Donnelley & Sons Company

99.1       Press Release, dated as of October 3, 2016, of R. R. Donnelley & Sons
           Company


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