Item 1.01 Entry into Material Definitive Agreement.
Supplemental Indenture
On May 5, 2022, and in connection with the Transactions, Old DraftKings, New
DraftKings and Computershare Trust Company, N.A. ("CTC"), as trustee, entered
into a supplemental indenture (the "Supplemental Indenture") to the Indenture,
dated as of March 18, 2021 (the "Indenture"), between Old DraftKings and CTC,
pursuant to which (i) New DraftKings agreed to fully and unconditionally
guarantee all of Old DraftKings' obligations under its 0% Convertible Senior
Notes due 2028 (the "Convertible Notes") and the Indenture and (ii) each
Convertible Note which was outstanding as of the DraftKings Merger Effective
Time and previously convertible into shares of Old DraftKings Class A Common
Stock (as defined below) became convertible into shares of New DraftKings Class
A Common Stock (as defined below), pursuant to and in accordance with the terms
of the Indenture, as supplemented by the Supplemental Indenture.
The foregoing description of the Supplemental Indenture does not purport to be
complete and is qualified in its entirety by the full text of the Supplemental
Indenture, a copy of which is attached hereto as Exhibit 4.1 and is incorporated
herein by reference.
Old DraftKings Assignment and Assumption Agreement
In connection with the Transactions, Old DraftKings entered into an assignment
and assumption agreement (the "Old DraftKings Warrant Assignment Agreement")
with New DraftKings, CTC and Computershare Inc. (together with CTC,
"Computershare"), pursuant to which Old DraftKings assigned to New DraftKings
all of its rights, interests and obligations under the Warrant Agreement, dated
as of May 10, 2019 (the "Old DraftKings Warrant Agreement"), by and between
Diamond Eagle Acquisition Corp. and Continental Stock Transfer & Trust Company,
as warrant agent, as assumed by Old DraftKings and assigned to Computershare by
that certain Assignment and Assumption Agreement, dated as of April 23, 2020,
governing Old DraftKings' outstanding warrants ("Old DraftKings Warrants") to
purchase Class A common stock, par value $0.0001 per share, of Old DraftKings
("Old DraftKings Class A Common Stock"), on the terms and conditions set forth
in the Old DraftKings Warrant Assignment Agreement. Effective as of the
DraftKings Merger Effective Time, each of the outstanding Old DraftKings
Warrants became exercisable for one share of New DraftKings Class A Common Stock
on the existing terms and conditions of such Old DraftKings Warrants, except as
described in the Old DraftKings Warrant Assignment Agreement.
The foregoing description of the Old DraftKings Warrant Assignment Agreement
does not purport to be complete and is qualified in its entirety by the full
text of the Old DraftKings Warrant Assignment Agreement, a copy of which is
attached hereto as Exhibit 4.2 and is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
At the DraftKings Merger Effective Time, each issued and outstanding share of
Old DraftKings Class A Common Stock and each issued and outstanding share of
Class B common stock, par value $0.0001 per share, of Old DraftKings ("Old
DraftKings Class B Common Stock" and, together with Old DraftKings Class A
Common Stock, "Old DraftKings Common Stock") (other than shares of Old
DraftKings Common Stock that were held in treasury by Old DraftKings not on
behalf of a third party), were cancelled and converted into one validly issued,
fully paid and non-assessable share of Class A common stock, par value $0.0001
per share, of New DraftKings ("New DraftKings Class A Common Stock") and Class B
common stock, par value $0.0001 per share, of New DraftKings ("New DraftKings
Class B Common Stock" and, together with New DraftKings Class A Common Stock,
"New DraftKings Common Stock"), respectively.
At the GNOG Merger Effective Time, each issued and outstanding share of Class A
common stock, par value $0.0001 per share, of GNOG ("GNOG Class A Common Stock")
(other than shares of GNOG Class A Common Stock held in treasury by GNOG not on
behalf of a third party), was converted automatically into the right to receive
0.365 (the "Exchange Ratio") of a duly authorized, validly issued, fully paid
and nonassessable share of New DraftKings Class A Common Stock (such fraction of
a share of New DraftKings Class A Common Stock, the "GNOG Merger
Consideration"). No fractional shares of New DraftKings Class A Common Stock
were issued in connection with the GNOG Merger, and the holders of GNOG Class A
Common Stock received cash in lieu of any fractional shares of New DraftKings
Class A Common Stock. Given that LF LLC (the holder of all of the issued and
outstanding shares of Class B common stock, par value $0.0001 per share, of GNOG
("GNOG Class B Common Stock" and, together with GNOG Class A Common Stock, "GNOG
Common Stock")) received the Contribution Consideration (as defined below) in
connection with the Contribution, which also constituted consideration in
respect of its shares of GNOG Class B Common Stock, LF LLC did not receive any
GNOG Merger Consideration in connection with the GNOG Merger in respect of its
shares of GNOG Class B Common Stock, which were instead cancelled at the GNOG
Merger Effective Time.
At the GNOG Merger Effective Time, LF LLC contributed its LHGN Units to New
DraftKings in exchange for a number of shares of New DraftKings Class A Common
Stock equal to that which LF LLC would have received in the GNOG Merger based on
the Exchange Ratio if it had caused LHGN LLC to redeem all of its LHGN Units in
exchange for shares of GNOG Class A Common Stock on a one-for-one basis
immediately prior to the GNOG Merger Effective Time (the "Contribution
Consideration").
As provided in the Merger Agreement, at the DraftKings Merger Effective Time,
each outstanding restricted stock unit of Old DraftKings (each, an "Old
DraftKings RSU") and each outstanding option to purchase Old DraftKings Common
Stock (each, an "Old DraftKings Option") issued under the Old DraftKings Stock
Plans (as defined below) was automatically converted into an equivalent
. . .
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 Item 1.01 of this Current Report on Form 8-K (this
"Current Report") under the heading "Supplemental Indenture" is incorporated by
reference into this Item 2.03.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
The information set forth in the Explanatory Note and Item 2.01 of this Current
Report is incorporated by reference into this Item 3.01.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in the Explanatory Note, Item 2.01 and Item 5.03 of
this Current Report is incorporated by reference into this Item 3.03.
Item 5.01 Changes in Control of Registrant.
The information set forth in the Explanatory Note and Item 2.01 of this Current
Report is incorporated by reference into this Item 5.01.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Compensatory Plans
Effective as of the Merger Effective Times, New DraftKings assumed (i) the
DraftKings Inc. 2020 Incentive Award Plan (the "2020 Plan"), the DraftKings Inc.
Employee Stock Purchase Plan (the "ESPP"), the DraftKings Inc. 2017 Equity
Incentive Plan (the "2017 Plan"), the DraftKings Inc. 2012 Stock Option &
Restricted Stock Incentive Plan (the "2012 Plan") and the SBTech (Global)
Limited 2011 Global Share Option Plan (the "SBTech Plan" and, together with the
2020 Plan, the ESPP, the 2017 Plan and the 2012 Plan, the "Old DraftKings Stock
Plans") and (ii) the share reserve available for future issuances under the Old
DraftKings Stock Plans.
Item 5.03 Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In connection with the completion of the DraftKings Merger, on May 5, 2022, Old
DraftKings amended its articles of incorporation to change its name to
"DraftKings Holdings Inc." A copy of Old DraftKings' amended articles of
incorporation is filed as Exhibit 3.1 to this Current Report and is incorporated
by reference into this Item 5.03.
Item 9.01 Financial Statements and Exhibits.
d) Exhibits
Exhibit No. Description
2.1* Agreement and Plan of Merger, dated as of August 9, 2021, by and among
Old DraftKings, New DraftKings, GNOG, DraftKings Merger Sub and GNOG
Merger Sub (incorporated by reference to Exhibit 2.1 to Old DraftKings'
Current Report on Form 8-K, filed with the SEC on August 10, 2021)*
3.1 Amendment to the Articles of Incorporation of Old DraftKings
4.1 Supplemental Indenture, dated as of May 5, 2022, by and among New
DraftKings, Old DraftKings and CTC, as trustee
4.2 Assignment and Assumption Agreement, dated as of May 5, 2022, by and
among New DraftKings, Old DraftKings and Computershare
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5)
of Regulation S-K. Old DraftKings agrees to furnish supplementally a copy of
any omitted schedule or similar attachment to the SEC upon request.
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