Item 1.01 Entry into a Material Definitive Agreement
Manning & Napier, Inc.(the "Company") has previously disclosed that it is party
to (i) a Tax Receivable Agreement, (the "TRA") dated as of November 23, 2011,
pursuant to which the parties thereto agreed, among other things, that the
Company would make payments to certain parties upon the occurrence of certain
events and (ii) a Substitution and Assumption Agreement and Release (the
"SAAR"), dated as of December 31, 2021, pursuant to which the parties thereto
agreed, among other things, to have the Company assume certain obligations to
make payments to certain parties in respect of the TRA.
Effective as of September 1, 2022, the Company entered into Tax Receivable
Termination Agreement and Releases (each, a "Termination Agreement") with
certain counterparties each holding an interest in the TRA (each, a "Terminating
TRA Holder"). Pursuant to each Termination Agreement, the Company and each
Terminating TRA Holder agreed to terminate both the TRA and SAAR as between the
Company and that Terminating TRA Holder in exchange for, among other things, an
immediate cash payment from the Company to each Terminating TRA Holder. In
connection with the Termination Agreements, the Company will make an immediate
cash payment of $7,075,600, in the aggregate, to all Terminating TRA Holders,
and will be required to make an additional cash payment to each Terminating TRA
Holder following the Company's receipt of a refund of U.S. federal (and, if
applicable, state and local) income taxes paid with respect to the Company's
2013 taxable year as a result of carrying back losses from its 2018 taxable
year. The Terminating TRA Holders held approximately 56% of the aggregate
outstanding interests under the TRA. Following consummation of the transactions
contemplated by the Termination Agreements, the Company estimates that the total
outstanding remaining liability under the TRA will be approximately $8.0 million
(including amounts owed to the Terminating TRA Holders in connection with the
anticipated tax refund describe above). Additionally, in connection with the
Termination Agreements, the Company entered into an intercompany note with
Manning & Napier Group, LLC with an aggregate principal amount of $7,075,600, in
order to fund the payments required by the Termination Agreements.
A form Termination Agreement is filed with this Current Report on Form 8-K as
Exhibit 10.1 and is incorporated herein by reference, and the foregoing
description of the Termination Agreements is qualified in its entirety by
reference thereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Form of Tax Receivable Termination Agreement and Release, effective
as of September 1, 2022, by and between the Company and certain holders
of interests in the Tax Receivables Agreement dated as of November 23,
2011.
104.1 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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