Case ess Doc 1190 Filed 03/10/14 Entered 03/10/14 19:08:47

Transcription

1 Jonathan S. Henes Christopher J. Marcus Christopher T. Greco KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York Telephone: (212) Facsimile: (212) and - James H.M. Sprayregen Ross M. Kwasteniet (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, Illinois Telephone: (312) Facsimile: (312) Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) CENGAGE LEARNING, INC., et al., ) Case No (ESS) ) Case No (ESS) ) Case No (ESS) ) Case No (ESS) ) Debtors. ) (Jointly Administered) ) NOTICE OF FILING REVISED EXHIBIT TO THE PLAN SUPPLEMENT FOR THE DEBTORS AMENDED JOINT PLAN OF REORGANIZATION PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE PLEASE TAKE NOTICE that Cengage Learning, Inc. ( Cengage ) and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases KE

2 (collectively, the Debtors ) 1, hereby file the following revised exhibit to the Plan Supplement [Docket No. 1128] for the Debtors Amended Joint Plan of Reorganization Pursuant to Chapter 11 of The Bankruptcy Code [Docket No. 1098] (as amended, the Plan ): Exhibit P Identity of the Members of the New Board and Summary of Management Team Compensation Exhibit P-1 Comparison of the Identity of the Members of the New Board and Summary of Management Team Compensation filed on March 6, 2014 [Docket No. 1170] PLEASE TAKE FURTHER NOTICE that the Debtors reserve the right to alter, amend, modify, or supplement any document in the Plan Supplement as provided by the Plan and Confirmation Order; provided that if any document in the Plan Supplement is further altered, amended, modified, or supplemented in any material respect, the Debtors will file a blackline of such document with the Bankruptcy Court. 1 All capitalized terms used but not otherwise defined herein and in each of the Exhibits hereto shall have the meanings set forth in the Plan. 2

3 Brooklyn, New York Dated: March 10, 2014 /s/ Jonathan S. Henes Jonathan S. Henes Christopher J. Marcus Christopher T. Greco KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York Telephone: (212) Facsimile: (212) and- James H.M. Sprayregen Ross M. Kwasteniet (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, Illinois Telephone: (312) Facsimile: (312) Counsel to the Debtors and Debtors in Possession 3

4 Exhibit P Identity of the Members of the New Board Pursuant to Article I.A(152) of the Plan, the New Board will consist of the following seven members: Michael E. Hansen Mr. Hansen became Chief Executive Officer of Cengage Learning in September of 2012 and he oversees all aspects of the global business. Mr. Hansen is focused on the evolution of the education industry, including the transition the publishing industry is making from print to digital and the development of new product lines for a digital world. He has deep experience in equipping organizations with the structure necessary to support these transformations. As a thought leader in the information services sector, Mr. Hansen has an extensive track record in developing successful business models and high-performing executive teams. Prior to joining Cengage Learning, Mr. Hansen served as CEO of Elsevier Health Sciences, a division of Reed Elsevier. During his tenure, he developed and implemented a successful print-to-digital transition and accelerated new electronic product development. Prior to Elsevier Health Sciences, Mr. Hansen served as President and CEO of Harcourt Assessment, an education arm of Reed Elsevier. Early in his career, Mr. Hansen was Executive Vice President of Operational Excellence at Bertelsmann, a $20B global media company. In addition, Mr. Hansen is currently a Board Member of the American Institute for Contemporary German Studies (AICGS). Mr. Hansen holds a Master of Law degree from the University of Bonn in Germany and an MBA from Columbia University in New York. John D. Dionne Mr. Dionne is a Senior Advisor at Blackstone Group L.P. and was most recently a Senior Managing Director and Global Head of the Private Equity and Investor Relations and Business Development Groups. Mr. Dionne is also currently a Field Fellow with Harvard Business School, where he focuses on practical learning initiatives and curriculum development. He is a Chartered Financial Analyst and Certified Public Accountant. Mr. Dionne is a graduate of Harvard Business School and The University of Scranton. Jamison C. Ely Mr. Ely joined KKR in 2004 and is a Principal at KKR Asset Management. Mr. Ely graduated from Occidental College with a B.A. in Economics. Richard Sarnoff Mr. Sarnoff is a senior adviser to, board member of, and investor in a number of companies in the publishing, education and digital media sectors. His advisory work includes assignments at Kohlberg Kravis Roberts & Co L.P., Scribd, and Curriculet; his board work includes Activison Blizzard, Chegg, and Ipreo; and his private investing includes stakes in Houzz, Loop Commerce, and Clever. Until 2011, Mr. Sarnoff was Co-Chairman of Bertelsmann, Inc., and President of BDMI (Bertelsmann Digital Media Investments.) A longstanding senior executive at

5 Bertelsmann, Mr. Sarnoff had previously served as CFO and EVP of Random House and as Chairman of the Association of American Publishers Additionally, Mr. Sarnoff became the first US executive to serve on the Supervisory Board of Bertelsmann AG in He serves on the Board of Directors of public companies Activision Blizzard and Chegg private companies Ipreo and Weld North, and not-for-profit organizations including the Center for Communication, the Bronx Lab School, Princeton University s Center for Information Technology Policy, and the Citizens Budget Commission. Mr. Sarnoff holds a BA, summa cum laude, from Princeton University and an MBA from Harvard University. Eric Sondag Mr. Sondag is a Director at Searchlight Capital Partners. Prior to joining Searchlight in 2011, Mr. Sondag worked as a Vice President at GTCR Golder Rauner in Chicago. Mr. Sondag received a BSc from Georgetown University, and completed the Executive Management Program at INSEAD in Singapore. Christian Stahl Mr. Stahl is a Partner in Apax Partners Consumer team. Mr. Stahl joined Apax Partners in Prior to joining Apax Partners, Mr. Stahl was a consultant with Bain & Company. Mr. Stahl holds an MBA with Distinction from INSEAD and a BA (Hons) of Business Administration and a Diplom Kaufman degree from the European Partnership of Business Schools. Wade Davis Mr. Davis is currently the Chief Financial Officer and Executive Vice President of Strategy and Corporate Development at Viacom, Inc. He has represented Viacom s interests on the Board of Directors of Viacom18 (India), MTV Italia, Bellator and Rhapsody. Mr. Davis joined Viacom in October 2005 and prior to his current role at the company, served as Senior Vice President of Strategy, Mergers & Acquisitions. Prior to joining Viacom, from , Mr. Davis was the Founder and Executive Vice President of Operations at America s Choice, a provider of research-based school instructional solutions. Mr. Davis also founded AdvancePath, which operates in-school academies on high school campuses, and continues to serve on the company s Board of Directors. Mr. Davis serves as a Director of the New York Division at March Of Dimes Birth Defects Foundation. Mr. Davis holds degrees with distinction and honors in both Philosophy and Economics from Williams College. 2

6 Summary of Management Team Compensation Pursuant to section 1129(a)(5)(B), this Plan Supplement sets forth the amount and nature of compensation to be paid to members of the Debtors management team (the Executive Team ), who may potentially be insiders (as such term is defined in the Bankruptcy Code), in accordance with their individual employment agreements as amended by that certain Amendment to Management Offer Letters, filed as Exhibit J to the Plan Supplement [Docket No. 1128]. 1 Employee & Position Base Salary Target Annual Incentive Plan Award (Percentage of Base Salary) Michael Hansen, Chief Executive Officer $867, % Kevin Stone, Executive Vice President, Chief Sales $510,000 60% and Marketing Officer James Donohue, Executive Vice President, Chief $408,000 60% Product Officer Sandi Kirshner, Executive Vice President, Chief $397,800 60% Marketing Officer Alexander Broich, Executive Vice President, $418,200 60% President, International Kenneth Carson, Executive Vice President, General $399,840 60% Counsel Mark Howe, Executive Vice President, Chief People $334,560 60% Officer George Moore, Executive Vice President, Chief $408,000 60% Technology Officer Fernando Bleichmar, Executive Vice President, Chief Strategy Officer $350,000 60% 1 Members of the Executive Team may also be eligible for participation in the Management Incentive Plan, which includes Restricted Stock Units and Incentive Stock Options. 3

7 Exhibit P-1 Comparison of the Identity of the Members of the New Board filed on March 6, 2014 [Docket No. 1170]

8 Exhibit P Identity of the Members of the New Board Pursuant to Article I.A(152) of the Plan, the New Board will consist of the following seven members: Michael E. Hansen Mr. Hansen became Chief Executive Officer of Cengage Learning in September of 2012 and he oversees all aspects of the global business. Mr. Hansen is focused on the evolution of the education industry, including the transition the publishing industry is making from print to digital and the development of new product lines for a digital world. He has deep experience in equipping organizations with the structure necessary to support these transformations. As a thought leader in the information services sector, Mr. Hansen has an extensive track record in developing successful business models and high-performing executive teams. Prior to joining Cengage Learning, Mr. Hansen served as CEO of Elsevier Health Sciences, a division of Reed Elsevier. During his tenure, he developed and implemented a successful print-to-digital transition and accelerated new electronic product development. Prior to Elsevier Health Sciences, Mr. Hansen served as President and CEO of Harcourt Assessment, an education arm of Reed Elsevier. Early in his career, Mr. Hansen was Executive Vice President of Operational Excellence at Bertelsmann, a $20B global media company. In addition, Mr. Hansen is currently a Board Member of the American Institute for Contemporary German Studies (AICGS). Mr. Hansen holds a Master of Law degree from the University of Bonn in Germany and an MBA from Columbia University in New York. John D. Dionne Mr. Dionne is a Senior Advisor at Blackstone Group L.P. and was most recently a Senior Managing Director and Global Head of the Private Equity and Investor Relations and Business Development Groups. Mr. Dionne is also currently a Field Fellow with Harvard Business School, where he focuses on practical learning initiatives and curriculum development. He is a Chartered Financial Analyst and Certified Public Accountant. Mr. Dionne is a graduate of Harvard Business School and The University of Scranton. Jamison C. Ely Mr. Ely joined KKR in 2004 and is a Principal at KKR Asset Management. Mr. Ely graduated from Occidental College with a B.A. in Economics. Richard Sarnoff Mr. Sarnoff is a senior adviser to, board member of, and investor in a number of companies in the publishing, education and digital media sectors. His advisory work includes assignments at Kohlberg Kravis Roberts & Co L.P., Scribd, and Curriculet; his board work includes Activison Blizzard, Chegg, and Ipreo; and his private investing includes stakes in Houzz, Loop Commerce, and Clever. Until 2011, Mr. Sarnoff was Co-Chairman of Bertelsmann, Inc., and President of BDMI (Bertelsmann Digital Media Investments.) A longstanding senior executive at

9 Bertelsmann, Mr. Sarnoff had previously served as CFO and EVP of Random House and as Chairman of the Association of American Publishers Additionally, Mr. Sarnoff became the first US executive to serve on the Supervisory Board of Bertelsmann AG in He serves on the Board of Directors of public companies Activision Blizzard and Chegg private companies Ipreo and Weld North, and not-for-profit organizations including the Center for Communication, the Bronx Lab School, Princeton University s Center for Information Technology Policy, and the Citizens Budget Commission. Mr. Sarnoff holds a BA, summa cum laude, from Princeton University and an MBA from Harvard University. Eric Sondag Mr. Sondag is a Director at Searchlight Capital Partners. Prior to joining Searchlight in 2011, Mr. Sondag worked as a Vice President at GTCR Golder Rauner in Chicago. Mr. Sondag received a BSc from Georgetown University, and completed the Executive Management Program at INSEAD in Singapore. Christian Stahl Non-Designee Director - Pending DisclosureMr. Stahl is a Partner in Apax Partners Consumer team. Mr. Stahl joined Apax Partners in Prior to joining Apax Partners, Mr. Stahl was a consultant with Bain & Company. Mr. Stahl holds an MBA with Distinction from INSEAD and a BA (Hons) of Business Administration and a Diplom Kaufman degree from the European Partnership of Business Schools. Wade Davis Mr. Davis is currently the Chief Financial Officer and Executive Vice President of Strategy and Corporate Development at Viacom, Inc. He has represented Viacom s interests on the Board of Directors of Viacom18 (India), MTV Italia, Bellator and Rhapsody. Mr. Davis joined Viacom in October 2005 and prior to his current role at the company, served as Senior Vice President of Strategy, Mergers & Acquisitions. Prior to joining Viacom, from , Mr. Davis was the Founder and Executive Vice President of Operations at America s Choice, a provider of research-based school instructional solutions. Mr. Davis also founded AdvancePath, which operates in-school academies on high school campuses, and continues to serve on the company s Board of Directors. Mr. Davis serves as a Director of the New York Division at March Of Dimes Birth Defects Foundation. Mr. Davis holds degrees with distinction and honors in both Philosophy and Economics from Williams College. 2

10 Summary of Management Team Compensation Pursuant to section 1129(a)(5)(B), this Plan Supplement sets forth the amount and nature of compensation to be paid to members of the Debtors management team (the Executive Team ), who may potentially be insiders (as such term is defined in the Bankruptcy Code), in accordance with their individual employment agreements as amended by that certain Amendment to Management Offer Letters, filed as Exhibit J to the Plan Supplement [Docket No. 1128]. 1 Employee & Position Base Salary Target Annual Incentive Plan Award (Percentage of Base Salary) Michael Hansen, Chief Executive Officer $867, % Kevin Stone, Executive Vice President, Chief Sales $510,000 60% and Marketing Officer James Donohue, Executive Vice President, Chief $408,000 60% Product Officer Sandi Kirshner, Executive Vice President, Chief $397, % Marketing Officer Alexander Broich, Executive Vice President, $418,200 60% President, International Kenneth Carson, Executive Vice President, General $399,840 60% Counsel Mark Howe, Executive Vice President, Chief People Officer $334,560 60% George Moore, Executive Vice President, Chief $367,200408,000 60% Technology Officer Fernando Bleichmar, Executive Vice President, Chief Strategy Officer $350,000 60% 1 Members of the Executive Team may also be eligible for participation in the Management Incentive Plan, which includes Restricted Stock Units and Incentive Stock Options. 3