Item 1.01 Entry into a Material Definitive Agreement.
Following the closing of the Merger (as defined herein), and to give effect to
certain transactions related thereto, on December 30, 2020, CONSOL Energy Inc.,
a Delaware corporation ("CEIX"), Transformer Holdings LP Inc., a Delaware
limited liability company and a wholly owned subsidiary of CEIX ("Holdings"),
and CONSOL Coal Resources GP LLC, a Delaware limited liability company (the
"General Partner") and the general partner of CONSOL Coal Resources LP, a
Delaware limited partnership (the "Partnership"), entered into the Fourth
Amended and Restated Agreement of Limited Partnership of the Partnership (the
"Fourth A&R Partnership Agreement") to, among other things, admit Holdings as a
limited partner of the Partnership, delete provisions relating to the incentive
distribution rights representing limited partner interests in the Partnership
(the "Incentive Distribution Rights"), which were automatically cancelled
immediately prior to the Effective Time (as defined herein) for no consideration
in accordance with the Third Amended and Restated Agreement of Limited
Partnership of CONSOL Coal Resources LP, dated as of November 28, 2017 (the
"Third A&R Partnership Agreement"), and reflect the conversion of the economic
general partner interest in the Partnership into a non-economic general partner
interest in the Partnership.
The foregoing description of the Fourth A&R Partnership Agreement and the
transactions contemplated thereby does not purport to be complete and is
qualified in its entirety by the terms and conditions of the Fourth A&R
Partnership Agreement, a copy of which is filed herewith as Exhibit 3.1 and the
terms of which are incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On December 30, 2020, in connection the consummation of the Merger, the
Affiliated Company Credit Agreement, dated November 28, 2017 (as amended, the
"Affiliated Company Credit Agreement"), by and among the Partnership, as
borrower, certain subsidiaries of the Partnership party thereto, CEIX, as lender
and administrative agent, and PNC Bank, National Association, as collateral
agent, was terminated, all obligations and guarantees thereunder repaid and
discharged and all liens granted in connection therewith released. In connection
with the termination of the Affiliated Company Credit Agreement and in exchange
for, and in satisfaction of, payment of the outstanding balance of approximately
$176.5 million thereunder, the Partnership issued 37,322,410 common units (the
"Consideration Units") representing limited partner interests in the Partnership
("Partnership Common Units") to CEIX.
The material terms of the Affiliated Company Credit Agreement were previously
disclosed in the Current Reports on Form 8-K filed by the Partnership with the
Securities and Exchange Commission ("SEC") on December 4, 2017 and April 3, 2019
and, to the extent applicable, the disclosure relating to the Affiliated Company
Credit Agreement under Item 1.01 of each such Current Report on Form 8-K is
incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On October 22, 2020, the Partnership, the General Partner, CEIX, Holdings, and
Transformer Merger Sub LLC, a Delaware limited liability company and a wholly
owned subsidiary of Holdings ("Merger Sub"), entered into an Agreement and Plan
of Merger (the "Merger Agreement"), pursuant to which Merger Sub would merge
with and into the Partnership, with the Partnership surviving as an indirect,
wholly owned subsidiary of CEIX (the "Merger").
On December 30, 2020, the parties to the Merger Agreement completed the Merger.
Pursuant to the Merger Agreement, at the effective time of the Merger (the
"Effective Time"), (i) each outstanding Partnership Common Unit other than
Partnership Common Units owned by CEIX and its subsidiaries (each, a "Public
Common Unit") converted into the right to receive, subject to adjustment as
described in the Merger Agreement, 0.73 shares of common stock, par value $0.01
per share, of CEIX (the "CEIX Common Stock" and the shares of CEIX Common Stock
issued in the Merger, the "Merger Consideration") and (ii) each of the
outstanding phantom units and any other awards relating to a Partnership Common
Unit issued under the Partnership Long-Term Incentive Plans (as defined in the
Merger Agreement), whether vested or not vested, became fully vested and
automatically converted into the right to receive, with respect to each
Partnership Common Unit subject thereto, the Merger Consideration (plus any
accrued but unpaid amounts in relation to distribution equivalent rights).
Except for the Incentive Distribution Rights, which were automatically canceled
immediately prior to the Effective Time for no consideration in accordance with
the Third A&R Partnership Agreement, the limited partner interests in the
Partnership owned by
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CEIX and its subsidiaries immediately prior to the Effective Time remain
outstanding as limited partner interests in the surviving entity. The economic
general partner interest in the Partnership converted into a non-economic
general partner interest in the surviving entity, and the General Partner
continued as the sole general partner of the surviving entity.
Pursuant to the Merger Agreement, Merger Sub issued approximately 7.9 million
shares of CEIX Common Stock to the holders of Partnership Common Units as Merger
Consideration as described above.
The Merger Agreement is filed as Exhibit 2.1 to the Partnership's Current Report
on Form 8-K filed with the SEC on October 23, 2020, which agreement is
incorporated herein by reference. The foregoing summary has been included to
provide investors and security holders with information regarding the terms of
the Merger Agreement and is qualified in its entirety by the terms and
conditions of the Merger Agreement. It is not intended to provide any other
factual information about the Partnership, CEIX or their respective subsidiaries
and affiliates.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
To the extent applicable, the information included under Item 2.01 above is
incorporated into this Item 3.01 by reference.
In connection with the consummation of the Merger, the New York Stock Exchange
(the "NYSE") was notified that each outstanding Public Common Unit issued and
outstanding immediately prior to the Effective Time was converted, pursuant to
the Merger, into the right to receive the Merger Consideration, subject to the
terms and conditions of the Merger Agreement. The Partnership requested that the
NYSE file a notification of removal from listing on Form 25 with the SEC with
respect to the delisting of the Partnership Common Units from the NYSE and to
deregister the Partnership Common Units under Section 12(b) of the Securities
Exchange Act of 1934, as amended (the Exchange Act). The Partnership Common
Units were suspended from trading on the NYSE prior to the opening of trading on
December 30, 2020.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.02 is incorporated into this Item 3.02 by
reference.
The issuance of the Consideration Units is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to Section 4(a)(2) thereof. CEIX (i) is an "accredited investor" as
defined in Rule 501 of Regulation D under the Securities Act and (ii) acquired
the Consideration Units for investment purposes and not with a view to resell or
distribute them. The Partnership did not engage in general solicitation or
advertising and did not offer securities to the public in connection with the
issuance of the Consideration Units.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth under Item 2.01 and Item 3.01 is incorporated into
this Item 3.03 by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
In connection with the Merger, as of the Effective Time, Michael L. Greenwood,
Dan D. Sandman and Jeffrey L. Wallace stepped down from their respective roles
as members of the Board of Directors of the General Partner (the "GP Board").
The decision of each of Messrs. Greenwood, Sandman and Wallace to step down as a
member of the GP Board was not the result of any disagreement with the General
Partner or the Partnership on any matter relating to the operations, policies or
practices of the General Partner or the Partnership and was solely as a result
of the Merger.
In addition, as of the Effective Time, the number of members of the GP Board was
decreased from seven to four.
Item 5.07 Submission of Matters to a Vote of Security Holders.
As previously announced, the completion of the Merger was subject to, among
other things, approval of the Merger Agreement and the transactions contemplated
thereby, including the Merger, by the affirmative consent of the holders of a
majority of the outstanding Partnership Common Units (the "Consent
Solicitation").
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In connection with the execution of the Merger Agreement, the Partnership and
CEIX entered into a Support Agreement, dated as of October 22, 2020 (the
"Support Agreement"), pursuant to which CEIX agreed to deliver a written consent
(the "Written Consent"), covering all of the Partnership Common Units
beneficially owned by it (the "Covered Units"), approving the Merger, adoption
of the Merger Agreement and any other matters necessary for consummation of the
Merger and the other transactions contemplated in the Merger Agreement.
The GP Board set November 27, 2020 as the record date (the "Record Date") for
determining the Partnership limited partners entitled to execute and deliver
written consents approving the Merger Agreement and the transactions
contemplated thereby, including the Merger. On November 30, 2020, CEIX, which as
of the Record Date held 16,811,818 Partnership Common Units, representing
approximately 60.7% of the outstanding Partnership Common Units, delivered the
Written Consent in accordance with the terms of the Support Agreement. The
delivery of the Written Consent was sufficient to approve the Merger Agreement
and the transactions contemplated thereby, including the Merger, without the
receipt of written consent from any other holder of Partnership Common Units.
The deadline for the consent solicitation expired at 11:59 p.m. (Eastern Time),
on December 29, 2020. A summary of the results of the Consent Solicitation is
set forth below.
Approval of the Merger Agreement and the transactions contemplated thereby,
including the Merger.
Consents For Consents Against Abstentions
23,063,876 127,655 10,502
The foregoing description of the Support Agreement and the transactions
contemplated thereby does not purport to be complete and is qualified in its
entirety by the terms and conditions of the Support Agreement, a copy of which
is filed as Exhibit 10.1 to the Partnership's Current Report on Form 8-K filed
with the SEC on October 23, 2020 and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
The Partnership and CEIX issued a joint press release on December 30, 2020
announcing, among other things, the results of the Consent Solicitation and the
closing of the Merger. A copy of the press release is attached hereto as Exhibit
99.1 to this Current Report on Form 8-K and is incorporated into this Item 7.01
by reference.
The information set forth in this Item 7.01 and the attached Exhibit 99.1 shall
not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description of the Exhibit
2.1* Agreement and Plan of Merger, dated as of October 22, 2020, by and
among CONSOL Energy Inc., Transformer LP Holdings Inc., Transformer
Merger Sub LLC, CONSOL Coal Resources GP LLC and CONSOL Coal Resources
LP (incorporated by reference to Exhibit 2.1 to the Partnership's
Current Report on Form 8-K filed on October 23, 2020, File
No. 37456).
3.1 Fourth Amended and Restated Agreement of Limited Partnership of
CONSOL Coal Resources LP, dated as of December 30, 2020.
10.1 Support Agreement, dated as of October 22, 2020, by and between
CONSOL Coal Resources LP and CONSOL Energy Inc. (incorporated by
reference to Exhibit 10.1 to the Partnership's Current Report on Form
8-K filed on October 23, 2020, File No. 37456).
99.1 Press Release dated December 30, 2020.
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL
* The schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K
and will be provided to the Securities and Exchange Commission upon request.
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