Item 1.02 Termination of a Material Definitive Agreement.
On February 6, 2020 (the "Closing Date"), concurrent with the completion of the
Acquisition of the Company, the Credit Agreement, dated as of May 21, 2018,
among William Lyon Homes, Inc., a California corporation ("California Lyon"), as
Borrower, William Lyon Homes, a Delaware corporation, as Parent each of the
subsidiary guarantors party thereto, the lenders from time to time thereto, and
JPMorgan Chase Bank, N.A., as Administrative Agent, as amended, was terminated.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On the Closing Date, Taylor Morrison completed the Acquisition of the Company.
Pursuant to the terms and subject to the conditions set forth in the Merger
Agreement, at the effective time of the Merger (the "Effective Time"), each
issued and outstanding share of Class A common stock, par value $0.01 per share,
of the Company (the "Company Class A Common Shares"), and each issued and
outstanding share of Class B common stock, par value $0.01 per share, of the
Company (the "Company Class B Common Shares," and together with the Target
Class A Common Shares, the "Company Common Shares") (excluding any
(i) restricted Company Common Shares; (ii) shares held by any stockholder who
properly demanded and perfected his, her or its appraisal rights with respect to
such shares; or (iii) shares owned directly by the Company (or any wholly owned
subsidiary of the Company, Taylor Morrison or Merger Sub) immediately prior to
the Effective Time) were converted into the right to receive and became
exchangeable for (A) 0.8000 validly issued, fully paid and nonassessable shares
(the "Stock Consideration") of common stock, $0.00001 par value per share, of
Taylor Morrison ("Taylor Morrison Shares") and (B) $2.50 in cash, without any
interest thereon (together with the Stock Consideration, the "Merger
Consideration"). No fractional Taylor Morrison Shares were issued in the Merger,
and the Company stockholders received cash in lieu of any fractional shares.
Pursuant to the Merger Agreement, at the Effective Time, each outstanding and
unexercised stock option (each, a "Company Option"), whether vested or unvested,
exercisable or not exercisable, of the Company was substituted and converted by
Taylor Morrison granting an option (each, a "Taylor Morrison Option") in
substitution of such Company Option, to purchase a number of whole Taylor
Morrison Shares (rounded down to the nearest whole share) equal to the product
obtained by multiplying (i) the number of Company Common Shares subject to such
Company Option immediately prior to the Effective Time by (ii) the sum (the
"Equity Award Exchange Ratio") of (x) 0.8000 and (y) the quotient obtained by
dividing $2.50 by the volume weighted average per-share price of Taylor Morrison
Shares during the ten full trading days ending on (and including) the trading
day immediately preceding the Effective Time. The exercise price per share of
such Taylor Morrison Option (rounded up to the nearest cent) is equal to the
quotient obtained by dividing (i) the exercise price per Company Common Share of
such Company Option immediately prior to the Effective Time by (ii) the Equity
Award Exchange Ratio. Such Taylor Morrison Options are subject to the same
vesting and acceleration of vesting terms and conditions as, and have other
terms and conditions that are substantially similar to, those that applied to
the Company Options immediately prior to the Effective Time.
In addition, at the Effective Time, (i) each outstanding award of restricted
Company Common Shares (each, a "Company Restricted Stock Award") and (ii) each
outstanding performance stock unit award in respect of Company Common Shares
(each, a "Company PSU Award") was substituted and converted by Taylor Morrison
granting in substitution a corresponding award in respect of Taylor Morrison
Shares (each, a "Taylor Morrison Award"), with the number of whole Taylor
Morrison Shares underlying each such Taylor Morrison Award equal to (rounded
down to the nearest whole share) the product obtained by multiplying (i) the
. . .
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
Trading of the shares of the Company's Class A common stock on the NYSE was
suspended on February 6, 2020. NYSE filed a Form 25 with the Securities and
Exchange Commission (the "SEC") to report the delisting of Company Class A
Common Shares under Section 12(b) of the U.S. Securities Exchange Act of 1934,
as amended (the "Exchange Act") on February 6, 2020 and it is expected that the
shares of the Company's Class A common stock will be delisted from the NYSE on
February 16, 2020. The Company intends to file a Form 15 with the SEC to
terminate the registration of the shares of the Company's Class A common stock
under the Exchange Act and to suspend the Company's reporting obligations under
the Exchange Act with respect to Company Class A Common Shares. The disclosure
set forth in Item 2.01 is incorporated herein by reference.
Item 3.03 Material Modification to Rights of Security Holders.
On the Closing Date, in connection with Taylor Morrison Communities, Inc.'s
("TMCI") previously announced offers to exchange (the "Exchange Offers") any and
all outstanding senior notes of three series issued by California Lyon (the
"William Lyon Notes") for up to $1.09 billion aggregate principal amount of new
notes to be issued by TMCI (the "Taylor Morrison Notes") and concurrent consent
solicitations, (i) TMCI notified the trustee for the applicable William Lyon
Notes that it has delivered to The Depository Trust Company for the holders of
such William Lyon Notes the aggregate amount to be paid to such holders as
consent payments, upon the terms and subject to the conditions in TMCI's
offering memorandum and consent solicitation statement, dated December 5, 2019
(the "Offering Memorandum"), or TMCI's separate consent solicitation statement,
dated December 5, 2019, as applicable, in respect of the consents validly
delivered and not revoked thereunder and (ii) the William Lyon Notes that were
validly tendered (and not validly withdrawn) in the Exchange Offers have been
accepted for exchange by TMCI in accordance with the terms of the Offering
Memorandum. As a result, the supplemental indentures, which were executed on
December 18, 2019, effecting the amendments (the "Amendments") to eliminate
substantially all of the covenants in the indentures governing the William Lyon
Notes, including the requirement to offer to repurchase the William Lyon Notes
upon a change of control, and eliminate certain other restrictive provisions and
events that may lead to an "Event of Default" in such indentures, became
operative on the Closing Date. The settlement date of the Exchange Offers is
expected to occur on February 10, 2020.
The disclosures set forth in Items 2.01, 3.01, and 5.03 are incorporated herein
by reference.
Item 5.01 Changes in Control of Registrant.
As a result of the Merger, a change of control of the Company occurred, and the
Company became a subsidiary of Taylor Morrison. The disclosures set forth in
Items 2.01, 3.03, and 5.02 are incorporated herein by reference.
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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, all of the officers of the Company and the
members of the board of directors of the Company immediately prior to the
Closing Date ceased to be officers and directors, respectively, of the Company
at the Closing Date. The disclosures set forth in Item 2.01 are incorporated
herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Pursuant to the terms of the Merger Agreement, on the Closing Date, the
certificate of incorporation of the Company was amended and restated so as to
read in its entirety in substantially the form attached as Exhibit A to the
Merger Agreement, and the bylaws of the Company were amended and restated to
read in their entirety in substantially the form attached as Exhibit B to the
Merger Agreement. The Fourth Amended and Restated Certificate of Incorporation
and the Amended & Restated Bylaws of the Company, which replaced the Company's
certificate of incorporation and bylaws as of the Closing Date, are attached
hereto as Exhibits 3.1 and 3.2, respectively, and are incorporated herein by
reference.
Item 8.01. Other Events.
On February 6, 2020, the Company issued an irrevocable notice of redemption (the
"Notice") with respect to the 7.00% Senior Notes due 2022 (the "2022 Notes").
Pursuant to the Notice, the Company gave holders of the 2022 Notes notice that
it will redeem all $50.0 million in aggregate principal amount of the
outstanding 2022 Notes on March 7, 2020 (the "Redemption Date"). The
$50.0 million in aggregate principal amount of the outstanding 2022 Notes being
called for redemption will be redeemed pursuant to the redemption provisions of
the indenture, dated August 11, 2014, pursuant to which the 2022 Notes were
issued (the "2022 Notes Indenture"). The redemption price will be equal to
100.000% of the principal amount of the 2022 Notes being called for redemption,
plus accrued and unpaid interest, if any, to, but not including, the Redemption
Date (subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date).
Item 9.01. Financial Statements and Exhibits.
Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Merger, dated November 5, 2019, by and among
Taylor Morrison, Merger Sub and William Lyon Homes (incorporated by
reference to Exhibit 2.1 to Taylor Morrison Home Corporation's
Registration Statement on Form S-4 (File No. 333-235410)).*
3.1 Fourth Amended and Restated Certificate of Incorporation of
William Lyon Homes
3.2 Amended and Restated Bylaws of William Lyon Homes
104 Cover Page Interactive Data File (embedded with the Inline XBRL
document).
Forward-Looking Statements
Some of the statements in this Current Report on Form 8-K are forward-looking
statements (or forward-looking information) within the meaning of applicable
U.S. securities laws. These include statements using the words "believe,"
"target," "outlook," "may," "will," "should," "could," "estimate," "continue,"
"expect," "intend," "plan," "predict," "potential," "project," "intend,"
"estimate," "aim," "on track," "target," "opportunity," "tentative,"
"positioning," "designed," "create," "seek," "would," "upside," "increases,"
"goal," "guidance" and "anticipate," and similar statements (including where the
word "could," "may," or "would" is used rather than the word "will") and the
negative of such words and phrases, which do not describe the present or provide
information about the past. There is no guarantee that the expected events or
expected results will actually occur. Such statements reflect the current views
of management of William Lyon Homes, a Delaware corporation ("William Lyon
Homes"), or Taylor Morrison Home Corporation, a Delaware corporation ("Taylor
Morrison"), and are subject to a number of risks and uncertainties. These
statements are based on many assumptions and factors, including general economic
and market conditions, industry conditions, operational and other factors. Any
changes in these
* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
Company hereby undertakes to furnish supplementally copies of any of the
omitted schedules upon request by the SEC.
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assumptions or other factors could cause actual results to differ materially
from current expectations. All forward-looking statements attributable to
William Lyon Homes or Taylor Morrison or persons acting on their behalf, and are
expressly qualified in their entirety by the cautionary statements set forth in
this paragraph. Undue reliance should not be placed on such statements. In
addition, material risks and uncertainties that could cause actual results to
differ from forward-looking statements include, among other things: the inherent
uncertainty associated with financial or other projections, including
anticipated synergies; the integration of William Lyon Homes and Taylor Morrison
and the ability to recognize the anticipated benefits from the combination of
William Lyon Homes and Taylor Morrison, and the amount of time it may take to
realize those benefits, if at all; the outcome of any legal proceedings that may
be instituted against the parties and others related to the Merger; any
unanticipated difficulties or expenditures relating to the Merger; the response
of business partners and retention as a result of the announcement of the
transaction; and the anticipated size of the markets and continued demand for
William Lyon Homes' and Taylor Morrison's homes and the impact of competitive
responses to the transaction. Additional risks and uncertainties are described
in William Lyon Homes' and Taylor Morrison's respective filings with the U.S.
Securities and Exchange Commission (the "SEC"), including as described under the
heading "Risk Factors" in William Lyon Homes' Annual Report on Form 10-K for the
year ended December 31, 2018 filed with the SEC on February 28, 2019, in Taylor
Morrison's Annual Report on Form 10-K for the year ended December 31, 2018,
filed with the SEC on February 20, 2019, and in their respective subsequent
Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the
date they are made. Except as required by law, neither William Lyon Homes nor
Taylor Morrison has any intention or obligation to update or to publicly
announce the results of any revisions to any of the forward-looking statements
to reflect actual results, future events or developments, changes in assumptions
or changes in other factors affecting the forward-looking statements.
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