UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. )*
SFX Entertainment, Inc.
(Name of Issuer)
Common Stock, $0.001 par value per share
(Title of Class of Securities)
784178303
(CUSIP Number)
Brad Eric Scheler
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, NY 10004
(212) 859-8000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
February 24, 2015
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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NAME OF REPORTING PERSON
Robert F.X. Sillerman | ||
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o (b) o | ||
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SEC USE ONLY
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SOURCE OF FUNDS
PF | ||
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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CITIZENSHIP OR PLACE OF ORGANIZATION
United States | ||
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
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SOLE VOTING POWER
37,739,263
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SHARED VOTING POWER 0
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SOLE DISPOSITIVE POWER
37,739,263
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SHARED DISPOSITIVE POWER 0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
37,739,263 | ||
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.8%
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TYPE OF REPORTING PERSON
IN
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NAME OF REPORTING PERSON
Sillerman Investment Company III LLC | |||||
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) o (b) o | |||||
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SEC USE ONLY
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SOURCE OF FUNDS
PF
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
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SOLE VOTING POWER
29,960,263 | ||||
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SHARED VOTING POWER
0 | |||||
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SOLE DISPOSITIVE POWER
29,960,263 | |||||
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SHARED DISPOSITIVE POWER
0 | |||||
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,960,263 | |||||
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
o | |||||
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.1%
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TYPE OF REPORTING PERSON
OO | |||||
ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D (this “Statement”) relates to the common stock, par value $0.001 per share (the “Common Stock”), of SFX Entertainment, Inc. (the “Company”). The address of the Company’s principal executive offices is 430 Park Avenue, Sixth Floor, New York, NY 10022.
ITEM 2. IDENTITY AND BACKGROUND
(a) The Reporting Persons are Robert F.X. Sillerman and Sillerman Investment Company III LLC (“SIC”), of which Mr. Sillerman is the sole member and manager.
(b) Each Reporting Person’s business address is 430 Park Avenue, Sixth Floor, New York, NY 10022.
(c) The principal occupation of Mr. Sillerman is to serve as the Chairman and Chief Executive Officer of the Company. Mr. Sillerman is also the Chairman and Chief Executive Officer of Viggle Inc., 902 Broadway, 8th Floor, New York, NY 10010.
The principal business of SIC is to serve as an investment vehicle for Mr. Sillerman.
(d) During the past five years, neither Reporting Person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither Reporting Person has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction pursuant to which as a result of such proceeding the Reporting Person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) Mr. Sillerman is a citizen of the United States. SIC is a Delaware limited liability company.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Mr. Sillerman has used his personal funds to make purchases of the Company’s securities.
ITEM 4. PURPOSE OF TRANSACTION
On February 24, 2015, Mr. Sillerman delivered a non-binding letter to the Board of Directors of the Company (the “Board”) to propose a potential transaction for the Board’s consideration. Under the proposed transaction, Mr. Sillerman would be prepared to acquire all of the outstanding shares of Common Stock not already beneficially owned by him for $4.75 per share in cash; at the same time, stockholders of the Company who wished to retain their equity interest in the Company would have the option to do so and remain investors in the Company alongside Mr. Sillerman (“Proposed Transaction”).
The Proposed Transaction would be subject to the approval of the Board and the negotiation and execution of mutually agreeable definitive transaction documents. Mr. Sillerman expects the Board to establish a special committee of independent directors to consider his proposal and make a recommendation to the full Board with respect to the Proposed Transaction. Mr. Sillerman would not proceed with the Proposed Transaction unless it was approved by such a special committee. In addition, Mr. Sillerman proposed that the Proposed Transaction would be subject to a non-waivable condition requiring the approval by holders of a majority of the shares of Company common stock not beneficially owned by him.
Mr. Sillerman further noted in his letter that if the Board or the special committee decides to explore alternative transactions involving a sale of the Company, he would be fully prepared to assist in those efforts. Moreover, in his capacity as a stockholder of the Company, he would be prepared to support an alternative sale transaction that provides compelling value to the Company’s stockholders.
No assurances can be given that any transaction will be consummated. The proposal letter provides that no legal binding obligation with respect to a transaction will arise unless and until the execution of mutually acceptable definitive documentation.
The foregoing summary does not purport to be or contain a complete description of the letter, a copy of which is attached as Exhibit 2.1 to this Schedule 13D and incorporated herein by reference.
Following the submission of the proposal letter, Mr. Sillerman issued a press release announcing his proposal. A copy of the press release is attached as Exhibit 99.1 to this Schedule 13D and incorporated herein by reference.
The Reporting Persons may engage in discussions with the Board, the Company’s management, other stockholders of the Company and other interested parties relating to Mr. Sillerman’s proposal.
The Reporting Persons intend to review their investments in the Company on a continuing basis. Depending on various factors, including, without limitation, the Company’s financial position and strategic direction, actions taken by the Board, price levels of shares of Common Stock, market conditions and general economic and industry conditions, the Reporting Persons may take such actions with respect to their investments in the Company as they deem appropriate, including, without limitation, purchasing additional equity or debt securities of the Company or selling some or all of their beneficial holdings, and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) (b) As of February 24, 2015, Mr. Sillerman is the beneficial owner of, and holds the sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of, 37,739,263 shares of Common Stock, representing 39.8% of the outstanding shares of Common Stock. These shares include:
1. 1,500,000 shares of Common Stock subject to stock options held by Mr. Sillerman that are currently exercisable or exercisable within sixty (60) days of February 24, 2015;
2. 29,960,263 shares of Common Stock, representing 32.1% of the outstanding shares of Common Stock, held by SIC (of which Mr. Sillerman is the sole member and manager and, in such capacity, holds the sole power to vote or to direct the vote and sole power to dispose or to direct the disposition of the shares of Common Stock held by SIC);
3. 1,330,000 shares of unvested restricted Common Stock held by Mr. Sillerman; and
4. 4,946,000 shares of Common Stock subject to certain nominee agreements described in Item 6 (each a “Nominee Agreement” and, collectively, the “Nominee Agreements”) with various stockholders of the Company (such stockholders, the “Beneficiaries”). Each Nominee Agreement names Mr. Sillerman as the nominee with respect to the shares subject to such Nominee Agreement and gives him the exclusive right to (i) vote or abstain from voting such shares and (ii) make any and all dispositions with respect to such shares.
The percentages of the outstanding shares set forth above were calculated based on 93,300,891 shares of Common Stock outstanding as of February 24, 2015.
(c) As of February 24, 2015, neither of the Reporting Persons has effected any transactions in the shares of Common Stock during the past 60 days.
(d) With respect to the 29,960,263 shares of Common Stock held directly by SIC, as the sole member and manger of SIC, Mr. Sillerman has, as of February 24, 2015, the right to receive and the power to direct the receipt of dividends from, or the proceeds from the sale of, such shares.
With respect to the 4,946,000 shares of Common Stock that are the subject of the Nominee Agreements, as of February 24, 2015, the Beneficiaries have the right to receive and the power to direct the receipt of dividends (other than dividends in the form of additional shares of Common Stock, which will be held by Mr. Sillerman as the nominee) from, or the proceeds from the sale of, such shares.
(e) Not applicable.
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ITEM 6. |
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER |
Nominee Agreements
As described in Item 5, Mr. Sillerman is party to certain Nominee Agreements. As of February 24, 2015, there are 4,946,000 shares of Common Stock in the aggregate subject to such Nominee Agreements. Each Nominee Agreement names Mr. Sillerman as the nominee with respect to the shares subject to such Nominee Agreement and give him the exclusive right to (i) vote or abstain from voting such shares, and (ii) make any and all dispositions with respect to such shares. However, the Beneficiaries are entitled to receive all cash and other property received by Mr. Sillerman with respect to such shares, except that dividends or distributions in the form of additional shares of Common Stock will be held in Mr. Sillerman’s name as the nominee and become subject to the Nominee Agreements. Each Nominee Agreement may be terminated upon the earlier of (i) two business days after the delivery by the applicable Beneficiary to Mr. Sillerman of written notice to terminate the Nominee Agreement, or (ii) two business days after the delivery by Mr. Sillerman to the applicable Beneficiary of his written notice of resignation as a nominee. In the event that a Nominee Agreement is terminated, Mr. Sillerman would cease to have voting or dispositive power with respect to the shares of Common Stock subject to the Nominee Agreement. The foregoing summary does not purport to be or contain a complete description of the Nominee Agreements. The Nominee Agreements are based on the same form, and the form of the Nominee Agreements is attached as Exhibit 3.1 to this Schedule 13D and is incorporated herein by reference.
Options and Restricted Common Stock
Mr. Sillerman holds the following options with respect to shares of Common Stock:
1. Mr. Sillerman holds an option to purchase 2,500,000 shares of Common Stock at a price of $2.00 per share subject to the terms of the Company’s 2013 Equity Compensation Plan. This option vested with respect to 500,000 shares on each of March 1, 2013, January 1, 2014 and January 1, 2015 and will vest with respect to 500,000 shares on each of January 1 of each of January 1, 2016 and January 1, 2017, subject to Mr. Sillerman remaining employed by the Company through the applicable vesting date. This option expires on March 31, 2022.
2. Mr. Sillerman holds options to purchase 700,000 shares of Common Stock at a price of $5.00 per share, 700,000 shares of Common Stock at a price of $7.50 per share and 700,000 shares of Common Stock at a price of $10.00 per share, each of which is subject to the terms of the Company’s 2013 Supplemental Equity Compensation Plan. Each of these options will vest in full on December 31, 2015, subject to Mr. Sillerman remaining employed by the Company through that date, and expires on December 31, 2019.
3. Mr. Sillerman holds options to purchase 500,000 shares of Common Stock at a price of $5.00 per share, 750,000 shares of Common Stock at a price of $7.50 per share and 1,000,000 shares of Common Stock at a price of $10.00 per share, each of which is subject to the terms of the Company’s 2013 Supplemental Equity Compensation Plan. Each of these options will vest in full on February 11, 2016, subject to Mr. Sillerman remaining employed by the Company through that date, and expires on February 11, 2020.
4. Mr. Sillerman holds an option to purchase 5,000,000 of Common Stock at a price of $5.00 per share subject to the terms of the Company’s 2013 Supplemental Equity Compensation Plan. This option will vest in full on March 12, 2016, subject to Mr. Sillerman remaining employed by the Company through that date, and expires on March 12, 2023.
Mr. Sillerman holds awards of restricted Common Stock consisting of 100,000, 1,000,000 and 233,000 shares, respectively. These awards, which are subject to the terms of the Company’s 2013 Supplemental Equity Compensation Plan, vest on December 31, 2015, February 11, 2016 and October 15, 2016, respectively, subject to Mr. Sillerman remaining employed by the Company through the applicable vesting date.
Under the terms of Mr. Sillerman’s employment agreement with the Company, upon a termination of Mr. Sillerman’s employment with the Company by the Company without “cause”, by Mr. Sillerman due to “constructive termination without cause,” in the event of a “change of control” of the Company, or as a result of Mr. Sillerman’s death or disability or if the Company elects not to renew Mr. Sillerman’s employment agreement at the end of its term on November 17, 2017, all unvested options and restricted Common Stock then held by Mr. Sillerman will vest. Mr. Sillerman’s employment agreement also provides that Mr. Sillerman is entitled to qualify for additional equity or option grants each year, although no such grants are guaranteed.
The foregoing summary of the terms of the options and restricted Common Stock held by Mr. Sillerman does not purport to be or
contain a complete description of the terms thereof. The Company’s 2013 Equity Compensation Plan (including amendments thereto) and 2013 Supplemental Equity Compensation Plan (including amendment thereto) and Mr. Sillerman’s employment agreement with the Company are attached as Exhibits 3.2, 3.3, 3.4, 3.5, 3.6 and 3.7 to this Schedule 13D and are incorporated herein by reference.
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ITEM 7. |
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MATERIAL TO BE FILED AS EXHIBITS |
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Exhibit 2.1 |
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Letter to the Board of Directors of the Company, dated February 24, 2015 |
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Exhibit 3.1 |
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Form of Nominee Agreement between Robert F.X. Sillerman and the beneficiary thereof |
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Exhibit 3.2 |
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SFX Entertainment, Inc. 2013 Equity Compensation Plan and forms of agreements thereunder (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1 (File No. 333-189564) filed by the Company on June 25, 2013) |
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Exhibit 3.3 |
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Amendment No. 1 to 2013 Equity Compensation Plan, dated August 20, 2013 (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-8 (File No. 333-192236), filed by the Company on November 8, 2013) |
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Exhibit 3.4 |
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Amendment No. 2 to 2013 Equity Compensation Plan, dated October 2, 2013 (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-8 (File No. 333-192236), filed by the Company on November 8, 2013) |
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Exhibit 3.5 |
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SFX Entertainment, Inc. 2013 Supplemental Equity Compensation Plan, and forms of agreement thereunder (incorporated by reference to Exhibit 10.35 to the Registration Statement on Form S-1 (File No. 333-189564) filed by the Company on June 25, 2013) |
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Exhibit 3.6 |
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Amendment to 2013 Supplemental Equity Compensation Plan, dated September 9, 2013 (incorporated by reference to Exhibit 10.58 to Amendment No. 4 to the Registration Statement on Form S-1 (File No. 333-189564), filed by the Company on September 18, 2013) |
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Exhibit 3.7 |
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Employment Agreement, dated as of October 18, 2012, by and between the Company and Robert F.X. Sillerman (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1 (File No. 333-189564), filed by the Company on June 25, 2013) |
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Exhibit 4.1 |
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Joint Filing Agreement, dated as of February 25, 2015, by and between Robert F.X. Sillerman and Sillerman Investment Company III LLC |
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Exhibit 99.1 |
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Press Release, dated February 25, 2015 |
Signature
After reasonable inquiry and to the best of its knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.
Dated: February 25, 2015
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Robert F. X. Sillerman |
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By: |
/s/Robert F. X. Sillerman |
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Sillerman Investment Company III LLC |
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By: |
/s/Robert F. X. Sillerman |
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Name: |
Robert F. X. Sillerman |
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Title: |
Manager and Sole Member |
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INDEX TO EXHIBITS
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Exhibit Number |
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Description |
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Exhibit 2.1 |
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Letter to the Board of Directors of the Company, dated February 24, 2015 |
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Exhibit 3.1 |
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Form of Nominee Agreement between Robert F.X. Sillerman and the beneficiary thereof |
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Exhibit 3.2 |
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SFX Entertainment, Inc. 2013 Equity Compensation Plan and forms of agreements thereunder (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1 (File No. 333-189564) filed by the Company on June 25, 2013) |
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Exhibit 3.3 |
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Amendment No. 1 to 2013 Equity Compensation Plan, dated August 20, 2013 (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-8 (File No. 333-192236), filed by the Company on November 8, 2013) |
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Exhibit 3.4 |
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Amendment No. 2 to 2013 Equity Compensation Plan, dated October 2, 2013 (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-8 (File No. 333-192236), filed by the Company on November 8, 2013) |
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Exhibit 3.5 |
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SFX Entertainment, Inc. 2013 Supplemental Equity Compensation Plan, and forms of agreement thereunder (incorporated by reference to Exhibit 10.35 to the Registration Statement on Form S-1 (File No. 333-189564) filed by the Company on June 25, 2013) |
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Exhibit 3.6 |
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Amendment to 2013 Supplemental Equity Compensation Plan, dated September 9, 2013 (incorporated by reference to Exhibit 10.58 to Amendment No. 4 to the Registration Statement on Form S-1 (File No. 333-189564), filed by the Company on September 18, 2013) |
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Exhibit 3.7 |
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Employment Agreement, dated as of October 18, 2012, by and between the Company and Robert F.X. Sillerman (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1 (File No. 333-189564), filed by the Company on June 25, 2013) |
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Exhibit 4.1 |
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Joint Filing Agreement, dated as of February 25, 2015, by and between Robert F.X. Sillerman and Sillerman Investment Company III LLC |
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Exhibit 99.1 |
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Press Release, dated February 25, 2015 |
EXHIBIT 2.1
Robert F.X. Sillerman
February 24, 2015
The Board of Directors
SFX Entertainment, Inc.
430 Park Ave., Sixth Floor
New York, NY 10022
Dear Sirs:
I am pleased to propose a potential transaction for your consideration pursuant to which I would be prepared to acquire all of the outstanding shares of common stock of SFX Entertainment, Inc. (the “Company”) not beneficially owned by me for $4.75 per share in cash. At the same time, under the proposed transaction, stockholders of the Company who wish to retain their equity interest in the Company would have the option to do so and remain investors in the Company alongside me.
This transaction should be attractive to the Company and its stockholders. Specifically, stockholders would have the opportunity to receive for their shares cash consideration representing an approximately 44% premium to the closing price of the Company’s common stock on February 23, 2015. This transaction would allow stockholders to immediately realize an attractive value, in cash, for their investment and provide them with certainty of value for their shares, especially when viewed against the significant operational risks inherent in the Company’s businesses and market risks inherent in remaining a public company. At the same time, this transaction would give stockholders who wish to remain investors in the Company the opportunity to do so.
This transaction would be subject to the approval of the Company’s Board of Directors and the negotiation and execution of mutually agreeable definitive transaction documents. It is my expectation that the Board will establish a special committee of independent directors to consider my proposal and make a recommendation to the full Board. I would not proceed with the proposed transaction unless it was approved by such a special committee. In addition, the transaction would also be subject to a non-waivable condition requiring approval by holders of a majority of the shares of Company common stock not beneficially owned by me or my affiliates. The transaction would not be subject to any financing condition.
As you are aware, I am the founder, Chairman and Chief Executive Officer of the Company and beneficially own approximately 40% of the outstanding shares of common stock of the Company. Given my position and history with the Company, should the special committee decide to explore the proposed transaction, I would be prepared to move
expeditiously towards the execution of definitive agreements. To that end, I have retained the law firm Fried, Frank, Harris, Shriver & Jacobson LLP as my counsel in connection with the proposed transactions.
I am well aware of the Board’s fiduciary duties in the context of my proposal and understand that the Board or the special committee may decide to explore alternative transactions involving a sale of the Company. If the Board or the special committee decides to explore alternative transactions, I am fully prepared to assist in those efforts. Moreover, in my capacity as a stockholder of the Company, I would be prepared to support an alternative sale transaction that provides compelling value to the Company’s stockholders.
Please note that I will promptly file a beneficial ownership report on Schedule 13D disclosing the submission of this letter. I believe it is appropriate, as well, to issue a press release regarding my proposal and I would be happy to coordinate with the Company regarding the press release.
Please note that this letter constitutes a preliminary indication of interest, and does not constitute any binding commitment with respect to a transaction and I reserve the right to withdraw or modify the proposal in any manner. No legal obligation with respect to any transaction shall arise unless and until the execution of mutually acceptable definitive agreements.
I would expect to implement the transaction through one or more related vehicles, including Sillerman Investment Company III LLC. I look forward to working with the Board and the special committee to complete a mutually acceptable transaction and I am available at your convenience to discuss any aspect of these proposals.
If you have any questions regarding the foregoing proposal, please do not hesitate to contact me.
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Sincerely, | |
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/s/Robert F.X. Sillerman |
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Robert F.X. Sillerman | |
EXHIBIT 3.1
FORM OF NOMINEE AGREEMENT
In reliance upon their mutual covenants, by which each party intends to be legally bound and for good and valuable consideration, the sufficiency of which each party hereby acknowledges, Robert F.X. Sillerman (“Nominee”) and the persons and entities signatory hereto (collectively, the “Beneficiaries,” and each, a “Beneficiary”) do enter into this Nominee Agreement (this “Agreement”), dated as of [_______].
1. Appointment. The Beneficiaries hereby irrevocably appoint Nominee as nominee to hold legal title to the Shares, as defined below, and Nominee hereby accepts such appointment and agrees to hold the Shares in its name but solely on behalf of and for the exclusive benefit of the Beneficiaries. Each Beneficiary is accordingly entitled to the entire right, title and interest in and to its Shares and any and all proceeds derived therefrom.
2. Shares to be held by Nominee. The Shares are [______] shares of common stock, $0.001 par value per share, of SFX Entertainment Inc., a Delaware corporation (the “Corporation”), and all equity securities issued with respect to such Shares of the Corporation, whether as a result of exercise of warrant, conversion of stock of one class into stock of another class, any stock dividend, stock split, recapitalization, merger, stock sale or other corporate reorganization (the “Shares”).
3. Authority of Nominee. The Beneficiaries hereby irrevocably acknowledge and agree that (with the single exception set out below in this Section 3) the authority of the Nominee to deal in and with respect to the Shares shall be exclusive and absolute until termination of this Agreement with respect to such Shares. Nominee may deal in and make decisions with respect to the Shares in Nominee’s sole and absolute discretion. Without limiting the foregoing, the Beneficiary expressly acknowledges and agrees that Nominee at all times shall (a) be listed exclusively as the holder of the Shares on the books and records of the Corporation, (b) have the exclusive right, power and authority to vote or abstain to vote the Shares on any and all matters on which shareholders of the Corporation are entitled to vote, and (c) have the exclusive right, power and authority to make any and all dispositions of the Shares, including without limitation, any and all sales, tax-free reorganizations or otherwise, and the determination of the timing thereof, so long as such actions do not violate any agreement then in effect governing the relationship among the Corporation’s shareholders, or violate any provisions or disclosures required under any applicable Federal or state securities laws or other statutes or regulations, and, provided, further, that (i) the Nominee voted the Shares to approve such transaction, and (ii) such transaction results in the transfer or disposition of all of the Shares representing beneficial interests of each Beneficiary. Notwithstanding the foregoing, Nominee shall have no authority to reveal the identity of Beneficiary to any person or entity without the prior written consent of Beneficiary, except that Nominee may reveal such identity to other beneficiaries under this Nominee Agreement or pursuant to governmental or court order or decree.
4. Nominee Obligation to Distribute Proceeds from Shares. Nominee agrees promptly to deliver to the Beneficiaries all cash and other property received by Nominee with respect to the Shares, other than distributions that are themselves in the form of additional Shares, which shall continue to be held by Nominee hereunder.
5. Termination. This Agreement shall terminate as to a Beneficiary upon the earlier of (a) two (2) business days after delivery by such Beneficiary to Nominee of its written notice to terminate this Agreement or (b) two (2) business days after delivery by Nominee to such Beneficiary of Nominee’s written notice of resignation as Nominee.
6. Non-Assignment. Except as expressly set out below in this Section 6, neither Nominee nor a Beneficiary may assign his, her or its rights and obligations under this Agreement or in the Shares to
any other party, other than (i) assignment of a Beneficiary’s rights hereunder to such Beneficiary’s heirs, executors and assigns upon such Beneficiary’s death if such Beneficiary is a natural person, and (ii) a Beneficiary may name sub-Beneficiaries if such Beneficiary transfers an interest in all or any part of such Beneficiary’s interest in the Shares, provided, however, that the Nominee shall have no responsibility to a sub-Beneficiary unless the Nominee has received written notice of such transfer.
7. Beneficiary Ratification and Indemnification. Each Beneficiary hereby approves, ratifies and confirms any and all determinations that Nominee may make, now and in the future, with respect to its Shares, and irrevocably agrees to indemnify Nominee, and hold Nominee harmless, from any and all claims, or causes of action, awards and judgments, including reasonable attorneys’ fees and expenses, from any party claiming through such Beneficiary pertaining to any action or inaction Nominee takes or refrains from taking with respect to its Shares, so long as Nominee has not acted with gross negligence or willful misconduct.
8. Miscellaneous Provisions. (a) This Agreement is binding upon the parties here to and their respective successors and permitted assigns; (b) neither this Agreement nor any provision hereof may be amended, modified, waived or discharged unless such amendment, modification, waiver or discharge is agreed to in writing signed by the parties; no waiver of any particular provision or particular breach of this Agreement shall operate as a waiver of any other or subsequent provision or breach; (c) this Agreement sets forth the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior and contemporaneous agreements, written or oral, between them; (d) all notices and communications under and relating to this Agreement shall be made in writing to the Beneficiary at the last address reflected in the records of the Nominee at the time of such notice and to the Nominee at its principal place of business and shall be effective the next business day after delivery to a nationally recognized overnight delivery service for next business day delivery, three (3) business days after delivery to the U.S. Postal Service by certified or registered mail, or upon personal delivery, in each case properly addressed as provided above and with all postage and fees prepaid; (e) this Agreement shall be governed by and construed in all respects under the laws of the State of New York, other than the conflicts of laws provisions thereof; (f) this Agreement may be executed in counterparts, each of which shall be an original hereof and all of which together shall constitute one and the same agreement; (g) the parties intend the delivery of signed copies by facsimile, email or other electronic means to serve as delivery in writing and intend to form this Agreement upon such delivery as effectively as by delivery of this Agreement originally executed.
Please indicate your acceptance and agreement to this nominee arrangement as herein described.
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NOMINEE: |
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Robert F.X. Sillerman |
ACCEPTED AND AGREED TO:
BENEFICIARY:
[Beneficiary Name]
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SIGNATURE PAGE TO NOMINEE AGREEMENT
RELATING TO SHARES OF THE CORPORATION
EXHIBIT 4.1
JOINT FILING AGREEMENT PURSUANT TO RULE 13d-1(k)
In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing on behalf of each of them, of this Schedule 13D (including further amendments thereto) with respect to the common stock, par value $0.001 per share, of SFX Entertainment, Inc., and that this Joint Filing Agreement be included as an exhibit to such joint filing. This Joint Filing Agreement may be executed in one or more counterparts, and each such counterpart shall be an original but all of which, taken together, shall constitute but one and the same instrument. The undersigned acknowledge that each shall be responsible for the timely filing of any amendments, and for the completeness and accuracy of the information concerning him or it contained herein or therein, but shall not be responsible for the completeness or accuracy of the information concerning the other.
Dated: February 25, 2015
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Robert F. X. Sillerman | ||
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/s/Robert F. X. Sillerman |
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Sillerman Investment Company III LLC | ||
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By: |
/s/Robert F. X. Sillerman |
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Name: |
Robert F. X. Sillerman | |
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Manager and Sole Member | |
EXHIBIT 99.1
ROBERT F.X. SILLERMAN, CEO OF SFX ENTERTAINMENT,
PROPOSES GOING-PRIVATE TRANSACTION
NEW YORK – February 25, 2015 – Robert F.X. Sillerman, Chief Executive Officer and Executive Chairman of the Board of Directors of SFX Entertainment Inc. (NASDAQ: SFXE) (SFX), today announced that he has proposed to the company’s Board of Directors a transaction through which Mr. Sillerman would acquire all of the outstanding shares of common stock of the company not already owned by him for $4.75 per share in cash. The proposed cash consideration represents an approximately 44% premium to the closing price of the Company’s common stock on February 23, 2015, the day before Mr. Sillerman submitted his proposal.
Under Mr. Sillerman’s proposal, any stockholders who wish to retain their equity interests in the company would have the opportunity to do so and remain as investors -- alongside Mr. Sillerman -- in the company.
“I have put forward a proposal that offers substantial value and flexibility to all shareholders,” said Mr. Sillerman. “Given the inherent risks in our business, my offer guarantees a substantial premium to current price. Those shareholders who are interested in remaining as investors in the company alongside me will have the ability to elect to keep all or part of their shares.”
Mr. Sillerman has requested that the Board appoint a special committee of independent directors to consider his proposal and make a recommendation to the full Board. Mr. Sillerman emphasized that he would not proceed with the proposed transaction unless it was approved by the special committee. In addition, the transaction would be subject to a non-waivable condition requiring approval by holders of a majority of the shares of the Company’s common stock not owned by Mr. Sillerman or his affiliates.
Mr. Sillerman recognizes the Board’s fiduciary duties in the context of his proposal and understands that the Board or the special committee may decide to explore alternative transactions involving a sale of the company. Mr. Sillerman has indicated that, if the Board or the special committee decides to explore alternative transactions, he would be prepared to assist in those efforts and, as a stockholder, would be prepared to support an alternative sale transaction that provides compelling value to the Company’s stockholders.
Mr. Sillerman’s proposal is not binding. Any transaction would be subject to the execution of definitive transaction documents acceptable to Mr. Sillerman and the special committee. Under Mr. Sillerman’s proposal, his proposed transaction would not be subject to any financing condition.
Mr. Sillerman has served as CEO and Executive Chairman of the Board of the company since its inception. Moreover, his history with the business pre-dates the company’s formal creation: he served as Executive Chairman, a Member of the Office of the Chairman, and a director of the original SFX, SFX Entertainment Inc., a company that owned and operated live entertainment venues, from its formation in December 1997 through its sale to Clear Channel in August 2000. That company is now known as Live Nation (NYSE: LYV).
Mr. Sillerman will file today with the Securities and Exchange Commission a beneficial ownership report on Schedule 13D to which a copy of the proposal letter he submitted to the Board will be attached as an exhibit.
Additional Information
An agreement in respect of the transaction described in this release has not yet been executed, and this release is neither a solicitation of a proxy nor an offer to purchase nor a solicitation of an offer to sell shares of the Company’s common stock nor a substitute for any filings that may be made with the
Securities and Exchange Commission (SEC) should the proposed transaction go forward. Any solicitation will only be made through materials filed with the SEC. The Company’s stockholders are strongly advised to read such materials when they become available because they will contain important information about the transaction and the Company. Once filed, these documents will be available at no charge on the SEC’s website at www.sec.gov.
Cautionary Statement
Statements in this document represent the intentions, plans, expectations and beliefs of Mr. Sillerman and involve risks and uncertainties that could cause actual events to differ materially from the events described in this release, including risks or uncertainties related to whether the proposed transaction will be completed, as well as changes in general economic conditions, stock market trading conditions, government regulation, and changes in the business or prospects of the Company. These factors, as well as factors described in Mr. Sillerman’s and the Company’s SEC filings are among the factors that could cause actual events or results to differ materially from Mr. Sillerman’s current expectations described in this release.
Contact:
The Marino Organization
Lee Silberstein, 212-889-0808
lee@themarino.org
or
Steve Vitoff, 212-889-0808
steve@themarino.org