UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 11, 2019

 

StoneMor Partners L.P.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

 

Delaware

001-32270

80-0103159

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

3600 Horizon Boulevard Trevose, Pennsylvania

19053

(Address of principal executive offices)

(Zip Code)

 

 

 

Registrant’s telephone number, including area code: (215) 826-2800

 

 

 

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Common Units

 

STON

 

New York Stock Exchange

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


 

Item 1.01  

Entry into a Material Definitive Agreement.

On December 11, 2019, in connection with the settlement with the Securities and Exchange Commission (the “SEC”) described in Item 8.01 of this Current Report on Form 8-K (the “Settlement”), StoneMor Partners L.P. (the “Partnership”), Stonemor GP, LLC, (the “General Partner”), StoneMor GP Holdings LLC, a Delaware limited liability company and the sole member of the General Partner (“GP Holdings”), and Hans Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the General Partner (“Merger Sub”), entered into an amendment (the “Third Amendment to Merger Agreement”) of the previously disclosed Merger and Reorganization Agreement dated September 27, 2018 (as amended to date, the “Merger Agreement”).  Pursuant to the terms of the Merger Agreement, among other things, the General Partner will convert from a Delaware limited liability company into a Delaware corporation to be named StoneMor Inc. (the “Company”) and Merger Sub will merge with and into the Partnership (the “Merger”) with the Partnership surviving and with the Company as its sole general partner (such transaction, the “C-Corporation Conversion”).

Pursuant to the Third Amendment to Merger Agreement, the parties agreed to reduce the shares of Common Stock which GP Holdings will be entitled to receive in the Merger by a number equal to $250,000 divided by the volume weighted average closing price of the Partnership’s common units for the ten trading days ending on the first business day before closing of the Merger.  

The foregoing summary of the Third Amendment to Merger Agreement is not intended to be complete and is qualified in its entirety by reference to the Third Amendment to Merger Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 8.01

Other Events.

On December 11, 2019, the Partnership and the General Partner entered into the Settlement with the SEC with respect to alleged violations of the reporting, books and records, internal accounting controls and related provisions of the federal securities laws that occurred prior to 2017 under the Partnership’s former management team.  Pursuant to the terms of the Settlement, which resolved the matters that were the subject of the previously reported investigation by the SEC’s Enforcement Division, and without admitting or denying the findings in the Settlement: (i) the Partnership and the General Partner consented to a cease and desist order with respect to violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder, and (ii) the General Partner agreed to pay a civil penalty of $250,000, which will be paid with the proceeds of an intercompany loan.

Item 9.01

Financial Statements and Exhibits.

(d)Exhibits:

Exhibit Number

 

Description

10.1

 

Third Amendment to Merger Agreement dated December 11, 2019 by and among StoneMor Partners L.P. Stonemor GP, LLC, StoneMor GP Holdings LLC and Hans Merger Sub, LLC.

 

 

 

 

2

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: December 12, 2019

STONEMOR PARTNERS L.P.

 

 

By:

StoneMor GP LLC

 

its general partner

 

 

By:

/s/Austin K. So

Name:

Austin K. So

Title:

Senior Vice President, Chief Legal Officer & Secretary

 

 

 

3

 

ston-ex101_37.htm

 

Exhibit 10.1

 

 

THIRD AMENDMENT TO

MERGER AND REORGANIZATION AGREEMENT

 

THIS THIRD AMENDMENT, dated as of December 11, 2019 (this “Amendment”), to the Merger Agreement (as defined below) is entered into by and among StoneMor Partners L.P., a Delaware limited partnership (the “Partnership”), StoneMor GP LLC, a Delaware limited liability company and the general partner of the Partnership (“GP”), StoneMor GP Holdings LLC, a Delaware limited liability company and the sole member of GP (“GP Holdings”), and Hans Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of GP (“Merger Sub,” and together with the Partnership, GP and GP Holdings, the “Parties”).

RECITALS

WHEREAS, the Parties have previously entered into that certain Merger and Reorganization Agreement, dated as of September 27, 2018, as amended by (a) that certain First Amendment to Merger and Reorganization Agreement, dated as of April 30, 2019 and (b) that certain Second Amendment to Merger and Reorganization Agreement, dated as of June 27, 2019 (collectively, the “Merger Agreement”);

WHEREAS, pursuant to Section 8.1 of the Merger Agreement, the Parties now desire to amend the Merger Agreement in the respects, but only in the respects, hereinafter set forth; and

WHEREAS, capitalized terms used herein shall have the respective meanings ascribed thereto in the Merger Agreement, as amended by this Amendment, unless herein defined or the context shall otherwise require.

AGREEMENT

NOW, THEREFORE, in consideration of the covenants and agreements contained in this Agreement, and intending to be legally bound, the Parties agree as follows:

Article I
Amendments

Section 1.1Amendment to Certain Definitions.  

(a)Section 1.1 of the Merger Agreement shall be amended to include the following defined terms:

Trading Day” means a day on which the principal National Securities Exchange on which the Common Units are listed or admitted to trading is open for the transaction of business.

VWAP” means volume weighted average trading price of the Common Units on the National Securities Exchange on which the Common Units are listed or admitted to trading.

 

 

 


 

 

 

Section 1.2Amendment to Merger Consideration.  Section 2.1(b) of the Merger Agreement shall be amended and restated in its entirety as follows:

(b)

Conversion. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the DLLCA and DGCL, GP shall file or cause to be filed with the Secretary of State of the State of Delaware a properly executed certificate of conversion (the “Certificate of Conversion”), pursuant to which GP shall be converted into a Delaware corporation named “StoneMor Inc.”, and a certificate of incorporation of the Company substantially in the form attached hereto as Exhibit A (the “Charter”), and shall make or cause to be made all other filings or recordings required under the DGCL and DLLCA in connection with the Conversion. The Certificate of Conversion will provide that the Conversion shall become effective at 12:05 a.m. (Eastern time) upon the Closing Date or at such other time as is agreed to by the parties to this Agreement and specified in the Certificate of Conversion (the time at which the Conversion becomes effective is herein referred to as the “Conversion Effective Time”). From and after the Conversion Effective Time, the Charter shall be the certificate of incorporation of the Company and the Bylaws of the Company attached hereto as Exhibit B (the “Bylaws”), shall be the bylaws of the Company, in each case, until duly amended in accordance with the terms thereof and applicable Law, consistent with the obligations set forth in Section 5.8. As of the Conversion Effective Time and before giving effect to the transactions contemplated by the Merger, GP Holdings shall be the sole stockholder of the Company and shall receive as a result of the Conversion and as consideration for the Pre-Closing Transactions and the Merger, 5,282,878 Company Shares, subject to adjustment pursuant to Section 3.5 as if GP Holdings held 5,282,878 Common Units immediately prior to the Effective Time representing 2,332,878 GP Holdings’ Common Units owned by LP Sub and the agreed upon valuation (in Common Units) of 2,950,000 Common Units in exchange for the 1.04% General Partner Interest, the Incentive Distribution Rights and for the governance and all other economic and other rights associated with the General Partnership Interest held indirectly by GP Holdings immediately prior to the Conversion; provided that the aggregate number of Company Shares issuable to GP Holdings as consideration for the Pre-Closing Transactions and the Merger pursuant hereto shall be automatically reduced as of the Conversion Effective Time by a number of Company Shares equal to the quotient of 250,000 divided by the VWAP calculated over the ten Trading Day period ending on the date that is one Business Day prior the Closing Date (which number, if equal to a fractional number of Company Shares, shall be rounded up to the nearest whole number of Company Shares). The Conversion shall have all of the effects prescribed in the DGCL and the DLLCA.

Article II
MISCELLANEOUS PROVISIONS

Section 2.1Ratification

.  Each of the Parties hereby consents to this Amendment and acknowledges and agrees that, except as expressly set forth in this Amendment, the terms, provisions and conditions of the Merger Agreement are hereby ratified and confirmed and shall remain unchanged and in full force and effect without interruption or impairment of any kind.  

Section 2.2No Other Amendments; Reservation of Rights; No Waiver.  Other than as otherwise expressly provided herein, this Amendment shall not be deemed to operate as an amendment or waiver of, or to prejudice, any right, power, privilege or remedy of any part to this Amendment under the Merger Agreement, nor shall the entering into of this Amendment preclude

 

 

 

2


 

 

 

any Party from refusing to enter into any further amendments with respect to the Merger Agreement.  Other than as to otherwise expressly provided herein, without limiting the generality of the provisions of Section 8.1 of the Merger Agreement, this Amendment shall not constitute a waiver of compliance with any covenant or other provision in the Merger Agreement or of the occurrence or continuance of any present or future breach thereunder.

Section 2.3Miscellaneous.  Sections 8.1 (Waiver; Amendment), 8.2 (Counterparts), 8.3 (Governing Law), 8.4 (Notices), 8.5 (Entire Understanding; No Third Party Beneficiaries), 8.6 (Severability), 8.7 (Titles and Headings), 8.8 (Jurisdiction), 8.9 (Waiver of Jury Trial), 8.11 (Interpretation; Definitions) and 8.12 (Survival) of the Merger Agreement shall apply to this Amendment, mutatis mutandis.

[Signature Pages Follow.]

 

 

 

 

 

3


 

 

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed in counterparts by their duly authorized officers as of the date first above written.

STONEMOR PARTNERS L.P.

 

By:

StoneMor GP LLC, its general partner

 

 

 

 

By:

/s/ Joseph M. Redling

Name:

Joseph M. Redling

Title:

President and Chief Executive Officer

 

 

 

 

STONEMOR GP LLC

 

By:

/s/ Joseph M. Redling

Name:

Joseph M. Redling

Title:

President and Chief Executive Officer

 

 

 

 

STONEMOR GP HOLDINGS LLC

 

By:

/s/ Robert B. Hellman, Jr.

Name:

Robert B. Hellman, Jr.

Title:

Authorized Person

 

 

 

 

HANS MERGER SUB, LLC

 

By:StoneMor GP LLC, its sole member

 

 

By:

/s/ Joseph M. Redling

Name:

Joseph M. Redling

Title:

President and Chief Executive Officer

 

 

 

 

 

Signature Page to

Third Amendment to

Merger and Reorganization Agreement