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4-Traders Homepage  >  Equities  >  Nyse  >  Martha Stewart Living Omnimedia, Inc.    MSO

End-of-day quote. End-of-day quote  - 12/04
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2015 MARTHA STEWART : Announces Closing of Merger with Sequential Brands..
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2015 MARTHA STEWART : Announces Preliminary Stockholder Merger Considera..
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MARTHA STEWART LIVING OMNIMEDIA : Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Completion of Acquisition or Disposition of Assets, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Material Modification to Rights of Security Holders, Changes in Control or Registrant, Change in Directors or Principal Officers, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, (form 8-K)

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12/04/2015 | 09:47pm CEST

Item 1.01 Entry Into a Material Definitive Agreement.

Amendment to Second Amended and Restated First Lien Credit Agreement

At the Effective Time, New Sequential, Old Sequential and certain other subsidiaries of New Sequential, including MSLO, entered into an amendment (the "Amendment") to the Second Amended and Restated First Lien Credit Agreement, dated as of April 8, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the "BoA Credit Agreement"), by and among, Old Sequential, the guarantors party thereto, the lenders party thereto (the "BoA Lenders") and Bank of America, N.A., as administrative agent and collateral agent (in such capacity, the "BoA Agent"). The Amendment has an effective date of December 4, 2015, and amends certain provisions under the BoA Credit Agreement to, among other things, (i) permit the consummation of the Mergers, (ii) permit, subject to the satisfaction of certain conditions, the increase in the aggregate revolving commitments and term loans under the BoA Credit Agreement by such amounts as would not cause the consolidated first lien leverage ratio, determined on a pro forma basis after giving effect to any such increase, to exceed 2.00:1.00, (iii) permit the inclusion of not less than (a) $30.0 million of EBITDA representing EBITDA generation by MSLO, (b) $8.0 million of EBITDA representing EBITDA generation by Joe's Holdings LLC, a Delaware limited liability company and a wholly-owned indirect subsidiary of New Sequential ("Joe's Holdings") and (c) fees and expenses incurred and associated with the Mergers and the acquisition of Joe's Holdings in certain provisions that relate to calculation of the consolidated first lien leverage ratio, (iv) permit the incurrence of indebtedness under the New Secured Term Loan Agreement and (v) designate New Sequential as the "borrower" under the BoA Credit Agreement. Additionally, the Amendment provides for an additional $8.0 million of Tranche A-1 Term Loans which were made, at the Effective Time, to New Sequential by the BoA Lenders.

New Secured Term Loan Agreement

At the Effective Time, New Sequential, Old Sequential and certain other subsidiaries of New Sequential, including MSLO, entered into a new Second Amended and Restated Credit Agreement (the "New Secured Term Loan Agreement") with Wilmington Trust, National Association, as administrative agent and collateral agent (in such capacity, the "New Agreement Agent"), and the lenders party to the existing Amended and Restated Second Lien Credit Agreement, dated as of April 8, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the "Existing Second Lien Credit Agreement"), by and among, Old Sequential, the guarantors party thereto, the lenders party thereto and Wilmington Trust, National Association, as administrative agent and collateral agent (in such capacity, the "Second Lien Agent").

The New Secured Term Loan Agreement provides for a six-year $368.0 million senior secured term loan facility (the "Facility"), which consists of (i) $215.5 million of loans outstanding under the Existing Second Lien Credit Agreement and . . .

Item 1.02 Termination of a Material Definitive Agreement.

As of the Effective Time, Daniel W. Dienst, MSLO's Chief Executive Office and Kenneth P. West, MSLO's Chief Financial Officer, were removed from their positions as officers of MSLO and their employment agreements were terminated. In connection with their terminations, each will receive the termination benefits set forth in their previously filed employment agreements.

At the Effective Time Ms. Stewart's employment agreement with MSLO, which was originally entered into April 1, 2009 and was last amended July 2, 2013 (the "MSLO Employment Agreement") was superseded by an employment agreement that Ms. Stewart entered into with New Sequential. The term of the MSLO Employment Agreement would otherwise have continued through June 30, 2017.

The information set forth in the Explanatory Note and Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 1.02.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information set forth in the Explanatory Note and Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in the Explanatory Note and Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 3.03 Material Modification to Rights of Security Holders.

The information set forth in the Explanatory Note and Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.

Treatment of MSLO Stock Options and Other MSLO Equity-Based Awards as a Result of the Mergers

In connection with the Mergers, each outstanding option to acquire shares of MSLO common stock (each a "MSLO Option") that was subject solely to a time-based vesting condition, whether vested or unvested, that was outstanding immediately prior to the Effective Time was cancelled and was automatically converted into the right to receive a cash payment equal to the positive difference (if any) between (i) $6.15 and (ii) the exercise price for the MSLO Options. In addition, in respect of MSLO Options that (i) were granted to Mr. Dienst pursuant to his employment agreement (ii) were premium-priced and subject to time-based vesting conditions that were satisfied prior to the execution of the Merger Agreement, and (iii) have a minimum post-termination exercise period of 18 months, Mr. Dienst will receive the payment determined under the immediately preceding sentence, plus an aggregate additional payment of $300,000 in the form of shares of New Sequential's common stock. This payment, which will be made in the form of shares of New Sequential's common stock, coupled with the spread value otherwise payable in respect of such options, is intended to result in a total payment that approximates the Black-Sholes value of such options.

Each outstanding MSLO Option that is subject to performance-vesting conditions and was outstanding immediately prior to the Effective Time will receive the payment referred to in the immediately-preceding paragraph if it was vested as of such time. Any such performance-vesting MSLO Options that are not so vested will be canceled in exchange for cash payments to the holders thereof in the following aggregate amounts: Kenneth West ($49,750); Allison Hoffman ($16,600) and Ritwik Chatterjee ($24,900).

Each award of restricted stock units corresponding to shares of MSLO common stock that is subject solely to a time-based vesting condition (each, a "MSLO RSU") that was outstanding immediately prior to the Effective Time will be cancelled and converted into a right to receive a cash payment of $6.15 for each share of MSLO common stock subject to the MSLO RSU.

Each award of restricted stock units corresponding to shares of MSLO common stock that is subject to performance-based vesting conditions (each a "MSLO Performance RSU Award"), that was outstanding immediately prior to the Effective Time will be cancelled as of the Effective Time. The holder of any such MSLO Performance RSU Award that by its terms would have provided an opportunity to achieve the performance conditions of such award for certain specified periods following certain terminations of the holder's employment will receive cash payments in the following aggregate amounts: Daniel Dienst ($2,550,000); Kenneth West ($204,000); Allison Hoffman ($240,000); and Ritwik Chatterjee ($216,000). These amounts are intended to approximate the value of these unvested MSLO Performance RSU Awards and were determined based on a price per share determined by New Sequential taking into account the vesting and performance terms of such RSUs.

Item 5.01 Changes in Control of Registrant.

At the Effective Time, a change in control of the Company occurred and all shares of the Company's common stock are now held by New Sequential. The information set forth in the Explanatory Note and Item 5.02 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01. New Sequential obtained the cash consideration for the Mergers from borrowings under the BoA Credit Agreement and cash on hand.

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

The information set forth in the Explanatory Note and Item 1.02 of this Current Report on Form 8-K is incorporated by reference into this Item 5.02. As of the Effective Time, each of the former members of the board of directors of MSLO (the "Board") and each of the former officers of MSLO resigned. In connection with the Mergers, as of the Effective Time and pursuant to the Merger Agreement, Yehuda Shmidman and Gary Klein were appointed to the Board. In addition, Mr. Shmidman assumed the role of Chief Executive Officer of MSLO and Mr. Klein assumed the role of Chief Financial Officer of MSLO.

Mr. Shmidman serves as a member of the board and as Chief Executive Officer of New Sequential. He is also the Chief Executive Officer of Old Sequential, where he has served as CEO since November 19, 2012. Prior to joining Old Sequential, Mr. Shmidman served as the Chief Operating Officer ("COO") and executive officer of Iconix Brand Group, Inc. (NASDAQ: ICON) ("Iconix"). Mr. Shmidman first joined Iconix in 2005 and held multiple positions of increasing responsibility during his seven year tenure leading up to his promotion to COO in 2010. Mr. Shmidman's responsibilities at Iconix ranged from head of global business development to direct involvement with corporate initiatives related to mergers and acquisitions, global joint ventures, corporate finance and investor relations. Mr. Shmidman also serves on the board of the YMA Fashion Scholarship Fund, a non-profit organization dedicated to advancing the fashion industry by encouraging gifted and enterprising young people to pursue careers in design, merchandising, retailing and related businesses. Mr. Shmidman received a Bachelor of Arts degree magna cum laude in Political Science from Yeshiva University.

Mr. Klein is the Chief Financial Officer of New Sequential as well as of Old Sequential where he has served in that role since November 29, 2012. Prior to joining New Sequential he served as the Vice President of Finance at Iconix since 2008. Mr. Klein joined Iconix in 2005, and during his seven year tenure was regularly involved in matters relating to financial planning and analysis, reporting and accounting, corporate finance, investor relations, mergers and acquisitions and Iconix's management information systems. From February 2005 to December 2005, Mr. Klein served at TV Guide Publishing Group as the Director of Financial Planning and Analysis, and from May 2001 to February 2005, Mr. Klein served as Finance Manager at Columbia House, one of the world's largest licensees of content for music and film. Prior to that time, Mr. Klein served at Office.com as a senior accountant and at Rosen, Seymour, Shapps, Martin & Co., a public accounting firm, as a staff accountant. Mr. Klein earned a bachelor's degree in accounting from the University at Albany in 1998.

Mr. Klein and Mr. Shmidman will receive no compensation for their service on the Board or as officers of MSLO, outside of the compensation each of them receives as officers, and in the case of Mr. Shmidman, as a director, of New Sequential.

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

On December 4, 2015, in connection with the Mergers, the Company amended and restated its Certificate of Incorporation and Bylaws. The Amended and Restated Certificate of Incorporation of the Company and the Amended and Restated Bylaws of the Company are filed as Exhibits 3.1 and 3.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.




(d)   Exhibits



Exhibit   Description
   2.1    Agreement and Plan of Merger, dated as of June 22, 2015, by and among
          SQBG, Inc., Sequential Brands Group, Inc., Martha Stewart Living
          Omnimedia, Inc., Singer Merger Sub, Inc. and Madeline Merger Sub, Inc.
          (incorporated by reference to Exhibit 2.1 to Old Sequential's Current
          Report on Form 8-K dated June 23, 2015).

   3.1    Amended and Restated Certificate of Incorporation of Martha Stewart
          Living Omnimedia, Inc..
   3.2    Amended and Restated Bylaws of Martha Stewart Living Omnimedia, Inc..

  10.1    Amendment to the Second Amended and Restated First Lien Credit
          Agreement, dated as of April 8, 2015 by and among, Sequential Brands
          Group, Inc., SQBG, Inc., and certain other of subsidiaries of
          Sequential Brands Group, Inc., SQBG, Inc., the lenders party thereto
          and Bank of America, N.A., as administrative agent and collateral agent
          (incorporated by reference to Exhibit 10.1 to Sequential Brands Group,
          Inc.'s Current Report on Form 8-K, dated on December 4, 2015).

   10.3   Second Amended and Restated Credit Agreement, dated as of December 4,
          2015, by and among , Sequential Brands Group, Inc., SQBG, Inc. and
          certain other subsidiaries of Sequential Brands Group, Inc., Wilmington
          Trust, National Association, as administrative agent and collateral
          agent and the lenders party to the existing Amended and Restated Second
          Lien Credit Agreement, dated as of April 8, 2015, by and among, SQBG,
          Inc., the guarantors party thereto, the lenders party thereto and
          Wilmington Trust, National Association, as administrative agent and
          collateral agent (incorporated by reference to Exhibit 10.3 to
          Sequential Brands Group, Inc.'s Current Report on Form 8-K, dated on
          December 4, 2015).

  10.3    Amended and Restated Intercreditor Agreement, dated as of December 4,
          2015, by and between Bank of America, N.A., as administrative agent and
          collateral agent and Wilmington Trust, National Association, as
          administrative agent and collateral agent, and acknowledged by
          Sequential Brands Group, Inc. and the guarantors party thereto
          (incorporated by reference to Exhibit 10.3 to Sequential Brands Group,
          Inc.'s Current Report on Form 8-K, dated on December 4, 2015).

© Edgar Online, source Glimpses

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Yehuda R. Shmidman Chief Executive Officer & Director
Gary Klein Chief Financial Officer & Director
Claudia Shaum Head-Media Relations
Allison C. Hoffman Secretary, Executive VP & General Counsel
Patricia Pollack Senior Executive Vice President-Merchandising
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