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CSRA Inc. – ‘SC 14D9/A’ on 3/20/18 re: CSRA Inc.

On:  Tuesday, 3/20/18, at 5:24pm ET   ·   Accession #:  1193125-18-89339   ·   File #:  5-89333

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/20/18  CSRA Inc.                         SC 14D9/A              1:123K CSRA Inc.                         Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: SC 14D9/A   Amendment to Tender-Offer                           HTML     87K 
                          Solicitation/Recommendation Statement                  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14D-9

Solicitation/Recommendation Statement

Under Section 14(d)(4) of the Securities Exchange Act of 1934

(Amendment No. 6)

CSRA INC.

(Name of Subject Company)

CSRA INC.

(Names of Persons Filing Statement)

Common Stock, $0.001 par value per share

(Title of Class of Securities)

12650T104

(CUSIP Number of Class of Securities)

William J. Haynes II

Executive Vice President, General Counsel and Secretary

CSRA Inc.

3170 Fairview Park Drive

Falls Church, Virginia 22042

(703) 641-2000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications

on Behalf of the Person Filing Statement)

With copies to:

Scott A. Barshay

Jeffrey D. Marell

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

(212) 373-3000

This Amendment No. 6 (this “Amendment”) amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 (as amended or supplemented from time to time, the “Statement”) originally filed with the U.S. Securities and Exchange Commission by CSRA Inc., a Nevada corporation (the “Company”), on March 5, 2018.

On February 9, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, General Dynamics Corporation (“Parent”), a corporation organized under the laws of Delaware, and Red Hawk Enterprises Corp. (“Merger Sub”), a Nevada corporation and a wholly owned subsidiary of Parent. Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, Merger Sub commenced a cash tender offer (the “Offer”) on March 5, 2018 to acquire all of the outstanding shares of common stock, par value $0.001 per share, of the Company at a purchase price of $40.75 per share in cash, net of applicable withholding taxes and without interest.

On March 20, 2018, the Company, Parent and Merger Sub entered into Amendment No. 1 to the Agreement and Plan of Merger (the “Merger Agreement Amendment”). Pursuant to the Merger Agreement Amendment, Merger Sub has amended the terms of the tender offer to increase the offer price from $40.75 per share to $41.25 per share in cash, net of applicable withholding taxes and without interest.

Except as otherwise set forth below, the information set forth in the original Statement remains unchanged and is incorporated herein by reference as relevant to the items in this Amendment. Capitalized terms used but not defined herein have the meanings ascribed to them in the Statement.

1

Item 3. Past Contacts, Transactions, Negotiations and Agreements.

The disclosure contained in Item 3 of the Schedule 14D-9 under the subsection “Outstanding Shares Held by Directors and Executive Officers” under the section “Arrangements between the Company and its Executive Officers, Directors and Affiliates” is hereby amended and restated, in its entirety, as follows:

“Outstanding Shares Held by Directors and Executive Officers

If our executive officers and directors who own Shares tender their Shares for purchase pursuant to the Offer, they will receive the same cash consideration on the same terms and conditions as our other stockholders.

The following table sets forth (i) the number of Shares beneficially owned as of March 16, 2018, by each of our executive officers and directors (which, for clarity, excludes Shares subject to issuance pursuant to granted and outstanding Options, RSUs and PSUs) and (ii) the aggregate cash consideration that would be payable for such Shares pursuant to the Offer based on the Offer Price.

The disclosure contained in Item 3 of the Schedule 14D-9 under the subsection “Treatment of Company Equity Awards” under the section “Arrangements between the Company and its Executive Officers, Directors and Affiliates” is hereby amended and restated, in its entirety, as follows:

“Treatment of Company Equity Awards

Options. Pursuant to the Merger Agreement, each Option outstanding immediately prior to the Effective Time, whether or not then exercisable, will be cancelled as of such time. The holder of any such Option will be entitled only to the right to receive an amount in cash equal to the product of (x) the excess, if any, of the Offer Price over the per Share exercise price (meaning, in the case of a stock appreciation right, the per Share “strike” or base price) of such Option and (y) the number of Shares subject to such Option. The Company agreed that it will pay to holders of Options such cash payment, if any, as soon as practicable after the Effective Time and in any case within 10 business days thereafter, without interest and less all applicable taxes to be withheld in respect of such payment.

2

Performance Share Units. Under the Merger Agreement and in accordance with the Company Stock Plan, as of immediately prior to the Effective Time, each outstanding PSU will become vested—solely to the extent of its “target” level as of such time—and cancelled in exchange for only the right to receive from the Company an amount in cash equal to the Offer Price and the value of any dividend equivalents accumulated or retained by the Company in respect of such PSU. The Company agreed that it will pay to holders of PSUs such cash payment as soon as practicable after the Effective Time and in any case within 10 business days thereafter, without interest and less all applicable taxes to be withheld in respect of such payment.

Restricted Stock Units Granted to Employees Prior to 2018. Under the Merger Agreement and in accordance with the Company Stock Plan, as of immediately prior to the Effective Time, each outstanding RSU granted to an employee prior to 2018 will become fully vested and cancelled in exchange for only the right to receive from the Company an amount equal to the Offer Price and the value of any dividend equivalents accumulated or retained by the Company in respect of such RSU. The Company agreed that it will pay to holders of RSUs such cash payment as soon as practicable after the Effective Time and in any case within 10 business days thereafter, without interest and less all applicable taxes to be withheld in respect of such payment.

Restricted Stock Units Granted to Employees in 2018. Pursuant to the Merger Agreement, RSUs granted to employees during calendar year 2018 (“2018 RSUs”) will, following the Effective Time, be converted into (i) restricted stock units that are subject to shares of the common stock of Parent (par value $0.001 per share) and (ii) a right to a cash payment of any dividend equivalents accumulated or retained by the Company prior to the Effective Time, which cash payment shall be made as soon as practicable after the Effective Date and in any case within 10 business days thereafter, without interest and less applicable taxes to be withheld in respect of such payment. Each RSU granted to an employee in 2018 will be converted into restricted stock units of Parent by multiplying the number of Shares subject to each such RSU by the fraction determined by dividing (A) the Offer Price of $41.25 per Share by (B) the average of the volume-weighted average price per share of Parent’s common stock trading on the New York Stock Exchange (the “NYSE”) for each of the 20 consecutive business days ending on (and including) the date of the Merger (such converted award, the “Converted RSUs”). The terms and conditions of such restricted stock units of Parent will, following the conversion of the RSUs granted to employees in 2018, be the same as the terms and conditions that applied to the corresponding awards of such RSUs prior to the Effective Time. The Offer, the Merger and the other transactions contemplated by the Merger Agreement will not, alone, give rise to either full or partial accelerated vesting of Company RSUs awarded in 2018. The RSUs awarded in 2018 (as converted, if applicable) will, however, accelerate in full upon a termination of employment for death, disability, or by the Company (or, following a change in control, the surviving corporation) without “cause” or due to an employee’s resignation for “good reason” (as such terms are defined in the Company’s Executive Officer Employment Separation Policy, without regard to whether such employee is covered by such policy).

Restricted Stock Units Granted to Non-Employee Directors. Under the Merger Agreement and in accordance with the Director Stock Plan, as of immediately prior to the Effective Time, each outstanding RSU awarded under the Director Stock Plan will become fully vested and cancelled in exchange for only the right to receive from the Company an amount equal to the Offer Price and the value of any dividend equivalents accumulated or retained by the Company in respect of such RSU. The Company agreed that it will pay to holders of RSUs such cash payment as soon as practicable after the Effective Time and in any case within 10 business days thereafter, without interest.

With respect to any amount payable that constitutes nonqualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), to the extent that payment of such amount would otherwise cause the imposition of a tax or penalty under Section 409A of the Code, such payment will instead be made at the earliest time permitted under the Merger Agreement and the terms of the corresponding award that will not result in the imposition of such tax or penalty.

Since January 4, 2018 (the period commencing 60 days prior to the filing of this Schedule 14D-9), none of our executive officers or directors have sold Shares received upon the exercise of Options, or the vesting or settlement of RSUs or PSUs, other than as provided in Item 6 of this Schedule 14D-9. Our executive officers and directors may exercise their Options prior to the consummation of the Offer to the extent that such Options are vested in accordance with their terms.

3

The table below sets forth, for each of our executive officers holding Options as of March 16, 2018 (i) the aggregate number of Shares subject to such Options and (ii) the value of cash amounts payable in respect of such Options on a pre-tax basis as of the consummation of the Offer, calculated by multiplying the excess of the Offer Price over the respective per-Share exercise prices of the applicable Options by the number of Shares subject to such Options.

Pursuant to the terms of the Merger Agreement, the Company may, prior to the Effective Time, in the ordinary course of business consistent with past practice, grant each of our employees (including our executive officers) 2018 RSUs and each of our non-employee directors RSUs (i.e., awards in respect of the Company’s fiscal 2019 annual equity program). On February 22, 2018, the Company granted the following number of 2018 RSUs: (i) 32,209 2018 RSUs to Mr. Keffer, (ii) 26,994 2018 RSUs to Mr. Haynes, (iii) 13,791 2018 RSUs to Mr. Reing, (iv) 19,632 2018 RSUs to Mr. Nedzbala, (v) 17,669 2018 RSUs to Mr. Deutsch, (vi) 18,160 2018 RSUs to Ms. Palmer, (vii) 19,632 2018 RSUs to Mr. Batsakis, (viii) 7,362 2018 RSUs to Mr. Dancy, (ix) 9,202 2018 RSUs to Mr. Marrone and (x) 3,558 2018 RSUs to Mr. Luebke. In addition, on February 26, 2018, the Company granted: (i) 62,380 2018 RSUs to Mr. Prior and (ii) 3,900 RSUs to each non-employee director (except for Ms. Killefer, who received a grant of 5,400 RSUs).

The table below sets forth, for each of our executive officers and directors holding RSUs as of March 16, 2018, (i) the aggregate number of Shares subject to such RSUs that will be settled in connection with the transaction, (ii) the value of cash amounts payable in respect of such RSUs on a pre-tax basis as of the consummation of the Transaction, calculated by multiplying the Offer Price by the number of Shares subject to such RSUs and (iii) the value of cash dividend equivalents accumulated or retained by the Company in respect of such RSUs prior to the Effective Time. The amounts in the table below do not include any value received in respect of Company Equity Awards held by the executive officer that are vested prior to the consummation of the Transactions.

4

The table below sets forth, for each of our executive officers holding PSUs as of March 16, 2018, (i) the aggregate number of target Shares subject to such PSUs, (ii) the value of cash amounts payable in respect of such PSUs on a pre-tax basis as of the consummation of the Transactions, calculated by multiplying the Offer Price by the number of target Shares subject to such PSUs and (iii) the value of cash dividend equivalents accumulated or retained by the Company in respect of such PSUs prior to the Effective Time. The amounts in the table below do not include any value received in respect of Company Equity Awards held by the executive officers that are vested prior to the consummation of the Transactions.

5

The disclosure contained in Item 3 of the Schedule 14D-9 under the subsection “Golden Parachute Compensation—Quantification of Potential Payments to the Company’s Named Executive Officers in Connection with the Transactions” under the section “Arrangements between the Company and its Executive Officers, Directors and Affiliates” is hereby amended and restated, in its entirety, as follows:

“Golden Parachute Compensation—Quantification of Potential Payments to the Company’s Named Executive Officers in Connection with the Transactions

Background

This section sets forth the information required by Item 402(t) of Regulation S-K, which requires disclosure of information regarding the compensation for each of our “named executive officers” whose compensation was disclosed in the Company’s Definitive Proxy Statement on Schedule 14A, filed by the Company on June 27, 2017, that is based on or otherwise relates to the Offer and the Merger. This compensation is referred to as “golden parachute” compensation by the applicable SEC disclosure rules, and in this section we use such term to describe the Transaction-related compensation payable to our named executive officers.

To the extent that any of our named executive officers’ compensation arrangements are described in “—Arrangements between the Company and its Executive Officers, Directors and Affiliates—Employment Arrangements” of this Schedule 14D-9, they are incorporated herein by reference. The amounts set forth in the table below, which represent an estimate of each named executive officer’s golden parachute compensation as of March 16, 2018 calculated in accordance with the SEC’s rules on disclosing golden parachute compensation, assume the following:

The amounts reported below are estimated based on multiple assumptions that may or may not actually occur, including the assumptions described above and elsewhere in this Schedule 14D-9. As a result, the transaction-related compensation, if any, to be received by a named executive officer may materially differ from the amounts set forth below. The amounts in the table below do not include any value received in respect of Company Equity Awards held by the named executive officer that are vested prior to the consummation of the Transactions.

6

All components of the cash amount are “double-trigger” (i.e., they are contingent upon a qualifying termination of employment that occurs within two years (three years for a termination without cause for the named executive officers other than Mr. Prior) following the consummation of the Transactions). As a condition of receiving the severance benefits, each named executive officer must execute a release of claims and comply with restrictive covenants applicable to him or her.

The estimated amount of each component of the cash payment is set forth in the table below, with the target annual bonus for Mr. Prior and the average annual bonus payment for the last three fiscal years for the other named executive officers, as well as a pro-rated bonus for the year of termination based on actual achievement for Mr. Prior. Each of these amounts other than the pro-rated bonus will be multiplied by the applicable multiple for the named executive officer.

7

Under Item 3 of the Schedule 14D-9, the first paragraph of the subsection “Merger Agreement” under the section “Arrangements with Purchaser and Parent and their Affiliates” is hereby amended and restated, in its entirety, as follows:

“On February 9, 2018, the Company, Parent and Purchaser entered into the Merger Agreement and, on March 20, 2018, amended the Merger Agreement. The summary of the material provisions of the Merger Agreement contained in Section 13 —“The Transaction Documents—The Merger Agreement” and the description of the conditions of the Offer contained in Section 15 —“Conditions to the Offer” of the Offer to Purchase, which is filed as Exhibit (a)(1)(A) of Schedule TO, are incorporated herein by reference. Such summary and description are qualified in their entirety by reference to the Merger Agreement, which is filed as Exhibit (e)(1) hereto and is incorporated herein by reference.”

8

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

Dated: March 20, 2018

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘SC 14D9/A’ Filing		Date		Other Filings
		5/22/18
Filed on:		3/20/18		8-K,  DEFA14A,  SC 14D9/A,  SC TO-T/A
		3/16/18
		3/5/18		SC 14D9,  SC TO-C,  SC TO-T
		2/26/18		4
		2/22/18		4,  8-K
		2/9/18		8-K
		1/4/18
		11/10/17
		6/27/17		DEF 14A,  DEFA14A
		4/1/17
		11/27/15		3,  4
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Filing Submission 0001193125-18-089339   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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