UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 3, 2013
American Greetings Corporation
(Exact name of registrant as specified in its charter)
| Ohio | 001-13859 | 34-0065325 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
One American Road
Cleveland, Ohio 44144
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (216) 252-7300
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| x | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 1.01 | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
On July 3, 2013, American Greetings Corporation (the “Company”) entered into Amendment No. 1 (the “Merger Agreement Amendment”) to the Agreement and Plan of Merger (the “Merger Agreement”), dated March 29, 2013, by and among the Company, Century Intermediate Holding Company, a Delaware corporation (“Parent”), and Century Merger Company, an Ohio corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), to, among other things, increase the Merger Consideration, as defined in the Merger Agreement, from $18.20 per share in cash, without interest, to $19.00 per share in cash, without interest.
In connection with the Merger Agreement Amendment, on July 3, 2013, the Company also entered into Amendment No. 1 (the “Guaranty and Voting Agreement Amendment”) to the Guaranty and Voting Agreement (the “Guaranty and Voting Agreement”), dated March 29, 2013, among the Company and the Family Shareholders (as defined in the Guaranty and Voting Agreement).
The foregoing descriptions of the Merger Agreement Amendment and the Guaranty and Voting Agreement Amendment are qualified in their entirety by the full text of such agreements, copies of which are filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference.
| ITEM 8.01 | OTHER EVENTS |
On July 3, 2013, the Company issued a press release announcing the Merger Agreement Amendment. A copy of the press release is attached hereto as Exhibit 99.1.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d)
| Exhibit |
Description | |
| 2.1 | Amendment No. 1 to Agreement and Plan of Merger, dated July 3, 2013, among Century Intermediate Holding Company, Century Merger Company, and American Greetings Corporation | |
| 10.1 | Amendment No. 1 to Guaranty and Voting Agreement, dated July 3, 2013, among the Family Shareholders (as defined therein) and American Greetings Corporation | |
| 99.1 | Press Release, dated July 3, 2013 | |
Forward Looking Statement Disclosure
Statements about the expected timing, completion and effects of the proposed transaction and all other statements in this report, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. The Company may not be able to complete the proposed transaction on the terms described above or other acceptable terms or at all because of a number of factors, including the failure to obtain shareholder approval or the failure to satisfy other closing conditions. Factors that may affect the business or financial results of the Company are described in the risk factors included in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s 2013 Annual Report on Form 10-K. The Company expressly disclaims a duty to provide updates to forward-looking statements, whether as a result of new information, future events or other occurrences.
Additional Information and Where to Find It
In connection with the proposed merger transaction, the Company will file with the SEC and furnish to the Company’s shareholders a definitive proxy statement and other relevant documents. This press release does not constitute a solicitation of any vote or approval. SHAREHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE DEFINITIVE PROXY STATEMENT BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.
Investors will be able to obtain a free copy of documents filed with the SEC at the SEC’s website at http://www.sec.gov. In addition, investors may obtain a free copy of the Company’s filings with the SEC from the investors section of the Company’s Web site at http://investors.americangreetings.com or by directing a request to the Company’s Corporate Secretary at our World Headquarters address at One American Road, Cleveland, Ohio 44144-2398, or via email to investor.relations@amgreetings.com.
Participants in the Solicitation
The Company and its directors, executive officers and certain other members of management and employees of the Company may be deemed “participants” in the solicitation of proxies from stockholders of the Company in favor of the proposed merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the stockholders of the Company in connection with the proposed merger will be set forth in the proxy statement and the other relevant documents to be filed with the SEC. You can find information about certain of the Company’s executive officers and its directors in its Annual Report on Form 10-K for the fiscal year ended February 28, 2013.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| American Greetings Corporation | ||||||
| Date: July 3, 2013 | ||||||
| /s/ Christopher W. Haffke | ||||||
| Christopher W. Haffke | ||||||
| Vice President, General Counsel and Secretary |
EXHIBIT INDEX
| Exhibit |
Description | |
| 2.1 | Amendment No. 1 to Agreement and Plan of Merger, dated July 3, 2013, among Century Intermediate Holding Company, Century Merger Company, and American Greetings Corporation | |
| 10.1 | Amendment No. 1 to Guaranty and Voting Agreement, dated July 3, 2013, among the Family Shareholders (as defined therein) and American Greetings Corporation | |
| 99.1 | Press Release, dated July 3, 2013 | |
Exhibit 2.1
EXECUTION VERSION
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
Amendment No. 1 to Agreement and Plan of Merger (this “Amendment”), dated as of July 3, 2013, among Century Intermediate Holding Company, a Delaware corporation (“Parent”), Century Merger Company, an Ohio corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and American Greetings Corporation, an Ohio corporation (the “Company” and, together with Parent and Merger Sub, the “Parties”).
RECITALS
A. The Parties are party to an Agreement and Plan of Merger, dated March 29, 2013 (the “Merger Agreement”).
B. The Parties desire to amend the Merger Agreement pursuant to and in accordance with Section 8.9 of the Merger Agreement, as set forth herein.
NOW, THEREFORE, the Parties agree as follows:
1. Definitions. For the purposes of this Amendment, terms used with initial capital letters and not otherwise defined herein will have the meanings assigned to them in the Merger Agreement. References to articles and sections in this Amendment refer to such articles and sections of the Merger Agreement.
2. Amendment. The Merger Agreement is hereby amended as follows:
| (a) | Section 2.1(a) is hereby amended by replacing the reference to “$18.20” therein with the following: “$19.00”. |
| (b) | Section 2.3 of the Merger Agreement and Section 2.3 of the Company Disclosure Schedule are hereby amended by replacing each reference to “$18.20” therein with the following: “$19.00”. |
| (c) | Section 3.18 is hereby amended and restated in its entirety to read as follows: “Opinion of Financial Advisor. On July 3, 2013, the Special Committee and the Company Board have received the opinion of Peter J. Solomon Company (the “Financial Advisor”) dated July 3, 2013 that based on, and subject to, the assumptions, qualifications and limitations set forth therein, the Merger Consideration to be received by holders of Common Shares (other than the Family Shareholders, Parent, Merger Sub and the holders of Dissenting Shares) in connection with the Merger is fair from a financial point of view to such holders. A true, complete and executed copy thereof will be delivered to Parent on or prior to July 3, 2013. It is agreed and understood that such opinion is for the information of the Special Committee and the Company Board and may not be relied on by Parent or Merger Sub. |
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| (d) | Section 4.5 is hereby amended by inserting the following at the end thereof: “As of July 3, 2013 and as of the Closing Date, Parent and Merger Sub have obtained all consents from counterparties to the Financing Commitments or definitive agreements entered into with respect to the Financing required by the terms of such Financing Commitments or definitive agreements with respect to the amendment of this Agreement pursuant to Amendment No. 1, dated July 3, 2013 (including the increase in the Merger Consideration effected thereby).” |
| (e) | Section 7.2(a) is hereby amended by adding the following after the second proviso: “provided, further, that in the event that such expenses (net of any reduction in accordance with the foregoing proviso) exceed $7,300,000, Parent and Merger Sub may request reimbursement of such excess by the Company, which the Special Committee may approve or reject in its sole discretion.” |
3. Binding Effect. Except to the extent expressly provided herein, the Merger Agreement will remain in full force and effect in accordance with its terms.
4. Representations and Warranties of the Company. The Company represents and warrants to Parent and Merger Sub as follows: The Company has the requisite corporate power and authority to enter into this Amendment and, subject to receipt of the Company Shareholder Approval and the Minority Shareholder Approval, to consummate the Transactions. The execution and delivery of this Amendment and the consummation of the Transactions have been duly and validly authorized by the Company Board, acting upon the unanimous recommendation of the Special Committee, and, except for the Company Shareholder Approval and the Minority Shareholder Approval, no other corporate proceedings on the part of the Company are necessary to authorize the consummation of the Transactions. The Company Board (acting upon the unanimous recommendation of the Special Committee) has unanimously (by all members of the Company Board participating and with the Officer Shareholders abstaining) determined that the Merger Agreement as amended by this Amendment is in the best interests of the Company and its shareholders (other than the Family Shareholders, Parent and Merger Sub) and declared it advisable to enter into this Amendment, has approved this Amendment, and has resolved to recommend that the Company’s shareholders adopt the Merger Agreement as amended by this Amendment. This Amendment has been duly and validly executed and delivered by the Company and, assuming this Amendment constitutes the valid and binding agreement of Parent and Merger Sub, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the Bankruptcy and Equity Exception.
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5. Representations and Warranties of Parent and Merger Sub. Parent and Merger Sub represent and warrant to the Company as follows: Each of Parent and Merger Sub has the requisite corporate power and authority to enter into this Amendment and, in the case of Family LLC, Parent and Merger Sub, to consummate the transactions contemplated by the Merger Agreement as amended by this Amendment. The execution and delivery of this Amendment, in the case of Parent and Merger Sub, and the consummation of the transactions contemplated by the Merger Agreement as amended by this Amendment, in the case of Family LLC, Parent and Merger Sub, have been duly and validly authorized by the Boards of Directors of Parent and Merger Sub, and the members of Family LLC having the authority to authorize such transactions, as applicable, and, except for the adoption of the Merger Agreement as amended by this Amendment by Parent as sole shareholder of Merger Sub (which will occur immediately after the execution and delivery of this Amendment), no other corporate or equivalent proceedings on the part of Family LLC, Parent or Merger Sub are necessary to authorize the consummation of the transactions contemplated thereby. This Amendment has been duly and validly executed and delivered by Parent and Merger Sub and, assuming this Amendment constitutes the valid and binding agreement of the Company, this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, subject to the Bankruptcy and Equity Exception.
6. Miscellaneous. Article 8 of the Merger Agreement is incorporated herein by reference and, to the extent applicable, will govern the terms of this Amendment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed and delivered as of the date first above written.
| CENTURY INTERMEDIATE HOLDING COMPANY | ||
| By: | /s/ Zev Weiss | |
| Name: | Zev Weiss | |
| Title: | Vice President and Secretary | |
| CENTURY MERGER COMPANY | ||
| By: | /s/ Zev Weiss | |
| Name: | Zev Weiss | |
| Title: | Vice President and Secretary | |
| AMERICAN GREETINGS CORPORATION | ||
| By: | /s/ Christopher W. Haffke | |
| Name: | Christopher W. Haffke | |
| Title: | Vice President, General Counsel and Secretary | |
SIGNATURE PAGE TO AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
Exhibit 10.1
EXECUTION VERSION
AMENDMENT NO. 1 TO GUARANTY AND VOTING AGREEMENT
Amendment No. 1 to Guaranty and Voting Agreement (this “Amendment”), dated as of July 3, 2013, among American Greetings Corporation, an Ohio corporation (the “Guaranteed Party”) and each of the shareholders of the Guaranteed Party listed on the signature pages hereto (each a “Family Shareholder”, and, together with the Guaranteed Party, the “Parties”).
RECITALS
A. The Parties are party to a Guaranty and Voting Agreement, dated March 29, 2013 (the “Guaranty and Voting Agreement”).
B. The Parties desire to amend the Guaranty and Voting Agreement pursuant to and in accordance with Section 5 of the Guaranty and Voting Agreement, as set forth herein.
NOW, THEREFORE, the Parties agree as follows:
1. Definitions. For the purposes of this Amendment, terms used with initial capital letters and not otherwise defined herein will have the meanings assigned to them in the Guaranty and Voting Agreement, including such terms as are defined in the Guaranty and Voting Agreement by reference to the Merger Agreement. References to articles and sections in this Amendment refer to such articles and sections of the Guaranty and Voting Agreement.
2. Amendment. The Guaranty and Voting Agreement is hereby amended as follows:
| (a) | The first Recital is hereby amended and restated in its entirety to read as follows: “WHEREAS, concurrently with the execution and delivery of this Agreement, Century Intermediate Holding Company, a Delaware corporation (“Parent”), Century Merger Company, an Ohio corporation and wholly owned subsidiary of Parent (“Merger Sub” and, together with Parent, “Buyers”), and the Guaranteed Party are entering into an Agreement and Plan of Merger (such agreement and plan of merger, as amended from time to time in accordance with its terms, the “Merger Agreement”), which provides, among other things, for the merger of Merger Sub with and into the Guaranteed Party, with the Guaranteed Party surviving as a wholly owned subsidiary of Parent (the “Merger”);” |
| (b) | Section 4(a) is hereby amended and restated in its entirety to read as follows: “Each Family Shareholder hereby agrees to vote (or cause to be voted) all of such Family Shareholder’s Shares at any annual, special or other meeting of the shareholders of the Guaranteed Party, and at any adjournment or adjournments or postponement thereof, or |
1
| pursuant to any consent in lieu of a meeting or otherwise, at which such Family Shareholder has the right to so vote in favor of the adoption of the Merger Agreement and, if the Company Board (acting through a majority of its members other than the Guarantors) so requests, in favor of any adjournment, postponement or recess of the Company Meeting; provided, however, that if a Recommendation Change shall have occurred, each Family Shareholder’s respective obligations under this Section 4(a) shall terminate and be of no further force and effect. Each Family Shareholder hereby waives any rights of appraisal or rights to dissent from the Merger that are available under applicable law. |
3. Binding Effect. Except to the extent expressly provided herein, the Guaranty and Voting Agreement will remain in full force and effect in accordance with its terms. Notwithstanding anything to the contrary, this Amendment does not and will not be construed to modify or amend the limitation of the rights and obligations of the Family Shareholders who are not also Guarantors to Sections 4 through 8 and 10 through 18 of the Guaranty and Voting Agreement, as amended by this Amendment, and the Parties acknowledge that the Family Shareholders who are not also Guarantors are party to this Amendment solely for the purpose of effecting the modification of the Guaranty and Voting Agreement pursuant to this Amendment.
4. Representations and Warranties of the Company. The Company is acting solely at the direction of the Special Committee with respect to the amendment of the Guaranty and Voting Agreement pursuant to this Amendment.
5. Representations and Warranties of The Family Shareholders. Each Family Shareholder has the legal capacity to execute, deliver and perform this Amendment and this Amendment constitutes a legal, valid and binding obligation of such Family Shareholder enforceable against such Family Shareholder in accordance with its terms.
6. Miscellaneous. Sections 8 and 11 through 18 of the Guaranty and Voting Agreement are incorporated herein by reference and, to the extent applicable, will govern the terms of this Amendment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Family Shareholders have caused this Amendment to be duly executed and delivered as of the date first written above.
| ELIE WEISS |
| /s/ Elie Weiss |
| GARY WEISS |
| /s/ Gary Weiss |
| JEFFREY WEISS |
| /s/ Jeffrey Weiss |
| JUDITH WEISS |
| /s/ Judith Weiss |
| MORRY WEISS |
| /s/ Morry Weiss |
| ZEV WEISS |
| /s/ Zev Weiss |
[Signature Page to Amendment No. 1 to Guaranty and Voting Agreement]
| IRVING I. STONE LIMITED LIABILITY COMPANY | ||
| By: | /s/ Gary Weiss | |
| Name: | Gary Weiss | |
| Title: | Manager | |
| IRVING I. STONE FOUNDATION | ||
| By: | /s/ Gary Weiss | |
| Name: | Gary Weiss | |
| Title: | President | |
[Signature Page to Amendment No. 1 to Guaranty and Voting Agreement]
IN WITNESS WHEREOF, the Guaranteed Party has caused this Amendment to be duly executed and delivered as of the date first written above by its officer thereunto duly authorized.
| AMERICAN GREETINGS CORPORATION | ||
| By: | /s/ Christopher W. Haffke | |
| Name: | Christopher W. Haffke | |
| Title: | Vice President, General Counsel and Secretary | |
[Signature Page to Amendment No. 1 to Guaranty and Voting Agreement]
Exhibit 99.1
American Greetings Announces Amendment to Merger Agreement
CLEVELAND, July 3, 2013 – American Greetings Corporation (NYSE: AM) announced today that the merger agreement under which the Weiss Family will acquire the Company has been amended to increase the purchase price per share from $18.20 to $19.00 in cash.
The $19.00 per share price represents a premium of 32.5% over the trading price for Class A shares on September 25th, the date on which the Weiss Family initially proposed to acquire the Company, and a premium of 4.4% to the $18.20 per share price.
Completion of the transaction is subject to certain closing conditions, including a condition that the holders of a majority of all outstanding shares not held by the Weiss Family or by any director or executive officer of the Company or any of its subsidiaries approve the merger.
The Weiss Family includes the Company’s Chairman, Morry Weiss, Director and Chief Executive Officer, Zev Weiss, and Director, President and Chief Operating Officer, Jeffrey Weiss, and related persons and entities.
Chief Executive Officer Zev Weiss said, “Our family remains committed to the transaction and to our belief that American Greetings will be able to best navigate the coming period of reinvestment and transformation as a privately held company.”
Further information regarding the amendment to the definitive merger agreement will be contained in a Current Report on Form 8-K which will be filed promptly with the SEC.
Peter J. Solomon & Company is acting as financial advisor, and Sullivan & Cromwell LLP is acting as legal advisor to the Special Committee of American Greetings’ Board of Directors. Baker & Hostetler LLP is acting as legal advisor to American Greetings. KeyBanc Capital Markets and MacQuarie Capital are acting as financial advisors to the Weiss Family, and Jones Day is acting as legal advisor to the Weiss Family.
About American Greetings Corporation
For more than 100 years, American Greetings Corporation (NYSE: AM) has been a creator and manufacturer of innovative social expression products that assist consumers in enhancing their relationships to create happiness, laughter and love. The Company’s major greeting card lines are American Greetings, Carlton Cards, Gibson, Recycled Paper Greetings and Papyrus, and other paper product offerings include DesignWare party goods and American Greetings and Plus Mark gift-packaging and boxed cards. American Greetings also has one of the largest collections of greetings on the Web, including greeting cards available at Cardstore.com and electronic greeting
cards available at AmericanGreetings.com. In addition to its product lines, American Greetings creates and licenses popular character brands through the American Greetings Properties group. Headquartered in Cleveland, Ohio, American Greetings generates annual revenue of approximately $1.9 billion, and its products can be found in retail outlets worldwide. For more information on the Company, visit http://corporate.americangreetings.com.
Forward Looking Statement Disclosure
Statements about the expected timing, completion and effects of the proposed transaction and all other statements in this release, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. The Company may not be able to complete the proposed transaction on the terms described above or other acceptable terms or at all because of a number of factors, including the failure to obtain shareholder approval or the failure to satisfy other closing conditions. Factors that may affect the business or financial results of the Company are described in the risk factors included in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including the Company’s 2013 Annual Report on Form 10-K. The Company expressly disclaims a duty to provide updates to forward-looking statements, whether as a result of new information, future events or other occurrences.
Additional Information and Where to Find It
In connection with the proposed merger transaction, the Company has filed with the SEC a preliminary proxy statement and other relevant documents, and will furnish a definitive version of the proxy statement and other relevant documents to the Company’s shareholders. This press release does not constitute a solicitation of any vote or approval. Shareholders are urged to read the definitive proxy statement when they receive it and any other documents filed with the SEC in connection with the proposed merger or incorporated by reference in the definitive proxy statement, because they will contain important information about the proposed merger.
Investors will be able to obtain a free copy of documents filed with the SEC at the SEC’s website at http://www.sec.gov. In addition, investors may obtain a free copy of the Company’s filings with the SEC from the Company’s website investors section of the Company’s Web site at http://investors.americangreetings.com or by directing a request to the Company’s Corporate Secretary at our World Headquarters address at One American Road, Cleveland, Ohio 44144-2398, or via email to investor.relations@amgreetings.com
Participants in the Solicitation
The Company and its directors, executive officers and certain other members of management and employees of the Company may be deemed “participants” in the solicitation of proxies from shareholders of the Company in favor of the proposed merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the shareholders of the Company in connection with the proposed merger will be set forth in the definitive proxy statement and the other relevant documents filed with the SEC. You can find information about the Company’s executive officers and directors in its Annual Report on Form 10-K for the fiscal year ended February 28, 2013.
CONTACT:
Gregory M. Steinberg
Treasurer and Executive Director of Investor Relations
American Greetings Corporation
216-252-4864
investor.relations@amgreetings.com