Item 1.01 Entry into a Material Definitive Agreement.
On November 28, 2017 (the Distribution Date), CNX Resources Corporation, formerly known as CONSOL Energy Inc.
(the Company) completed the previously announced separation of its business into two independent, publicly traded companies, a coal company, CONSOL Energy Inc., formerly known as CONSOL Mining Corporation (CoalCo) and
the Company, which will retain the natural gas exploration and production (E&P) business (the Separation). Following the Separation, CoalCo and its subsidiaries hold coal assets previously held by the Company, including its
Pennsylvania Mining Complex, Baltimore Marine Terminal, its direct and indirect ownership interest in CONSOL Coal Resources LP, formerly known as CNXC Coal Resources LP and other related coal assets previously held by the Company.
On the Distribution Date, the Company distributed all of the outstanding shares of CoalCo common stock to the Companys stockholders (the
Distribution). The Companys stockholders of record as of the close of business on November 15, 2017 (the Record Date) received one share of CoalCo common stock for every eight shares of the Companys common
stock held as of the Record Date. The Company did not issue fractional shares of CoalCo common stock in the Distribution. Instead, fractional shares that the Companys stockholders would have otherwise been entitled to receive were aggregated
and are for sale in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed ratably to those stockholders who would otherwise have been entitled to receive a fractional share of CoalCo common
stock, in accordance with the SDA (defined below).
Spin Agreements
On November 28, 2017, in connection with the Separation and the Distribution, the Company entered into several agreements with CoalCo that
govern the relationship of the parties following the Distribution, including the following:
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Separation and Distribution Agreement (SDA);
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Transition Services Agreement (TSA);
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Tax Matters Agreement (TMA);
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Employee Matters Agreement (EMA);
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Intellectual Property Matters Agreement (IPMA);
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CNX Resources Corporation to CONSOL Energy Inc. Trademark License Agreement (TLA 1);
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CONSOL Energy Inc. to CNX Resources Corporation Trademark License Agreement (TLA 2); and
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First Amendment to Amended and Restated Omnibus Agreement (Omnibus Amendment).
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Summaries of the material terms of the SDA, TSA, TMA, EMA and Omnibus Amendment may be found under the section entitled Certain
Relationships and Related Party Transactions in that certain Information Statement of CoalCo, dated November 3, 2017 (the Information Statement), which is included as Exhibit 99.1 to this Current Report on Form
8-K,
which summaries are incorporated herein by reference.
The following is a summary of the material
terms of the IPMA, TLA1 and TLA2:
Pursuant to the terms of the IPMA, certain of the intellectual property rights of the Company not
already owned by CoalCo or its direct or indirect subsidiaries (the CoalCo Group) prior to the Distribution, generally including those used primarily in the coal business, and the liabilities relating to, arising out of or resulting
therefrom were transferred to the CoalCo Group. The IPMA also provides for cross-licensing rights to be afforded to each of the Company and CoalCo as it relates to the use of certain names and marks historically utilized by the other party.
To address the need to continue to utilize certain marks associated with each of the Companys and CoalCos historic name usage, and
in light of the renaming that was effected in connection with the Separation and Distribution (as described below), the parties entered into license agreements (TLA1 and TLA2), under which each company has granted to the other (and their respective
subsidiaries as applicable) certain irrevocable,
non-exclusive,
worldwide, sublicensable (only in specified circumstances) and royalty-free licenses to certain trademarks and related intellectual property for
use in the others existing businesses.
Under the terms of TLA1, the Company has granted CoalCo an evergreen renewable, royalty-free
license for a period of one year to use the CNX name within certain defined parameters. Additionally, pursuant to the terms of TLA2 and subject to limited exceptions, the Company is not be permitted to use, or license others to use,
the CNX name for a period of five years in the coal business.
Under the terms of TLA2, CoalCo has granted the Company an
evergreen renewable, royalty-free license for a period of one year to use the CONSOL name within certain defined parameters. Additionally, pursuant to the terms of TLA2 and subject to limited exceptions, CoalCo is not be permitted
to use, or license others to use, the CONSOL name for a period of five years in the natural gas business.
The foregoing
descriptions of each of these agreements set forth under this Item 1.01, and in the summaries of such agreements in the Information Statement, are not complete and are subject to, and qualified in their entirety by reference to, the full text
of the agreements, which are attached hereto as Exhibits 2.1, 2.2, 2.3, 2.4, 10.1, 10.2, 10.3 and 10.4 and are incorporated herein by reference.