VVI Viad Corp New

Pursuant to the Investment Agreement, for 12 months following the Initial Closing Date and subject to certain conditions including (i) no occurrence of a Company Material Adverse Effect (as defined in the Investment Agreement) or a Change of Control (as defined in the Certificate of Designations), (ii) Issuer continuing to be Solvent (as defined in the Investment Agreement), (iii) to the extent required under applicable NYSE rules, receipt of the necessary approval from Issuer’s stockholders, (iv) certain fundamental representations and warranties being true and correct as of such subsequent closing date and (v) if required by applicable law, approval under Section 41 of the German Act Against Restraints of Competition, the Issuer has the option to require the Crestview Parties to purchase, in the aggregate, in one or more additional closings, up to $45 million (such additional amount, the “Subsequent Closing Amount”) in additional Preferred Stock (such shares, the “Subsequent Closing Shares” and, together with the Initial Closing Shares, the “Purchased Shares”) on the same terms and conditions as the Initial Closing Shares. All Subsequent Closing Shares accrue dividends and have rights as if they were issued on the Initial Closing Date.

Restrictions on Transfer

For a period of 18 months following the Initial Closing Date, no Crestview Party may transfer any of the Purchased Shares or Common Stock issued upon conversion of the Purchased Shares (the “Conversion Shares”) to any person without the prior written consent of the Issuer, except each Crestview Party may transfer Purchased Shares and Conversion Shares (i) to (a) any affiliate of such Crestview Party, (b) successor entity of such Crestview Party or (c) any investment fund, vehicle or similar entity of which such Crestview Party, or any affiliate, advisor or manager of such Crestview Party serves as a general partner, manager or advisor or any successor to the person described in this subclause (c), (ii) pursuant to an amalgamation, merger, tender or exchange offer, business combination, acquisition of assets or similar transaction involving the Issuer or any of its affiliates or any transaction resulting in a Change of Control of Issuer or (iii) following commencement by the Issuer or its significant subsidiary of bankruptcy, insolvency or similar proceedings (such clauses (i)-(iii), the “Lock-Up Exceptions”). The restrictions on transfer in the Investment Agreement do not prohibit liens on Purchased Shares or Conversion Shares, or any exercise of remedies with respect thereto. Each Crestview Party also may not knowingly transfer Purchased Shares or Conversion Shares to (I) certain competitors of the Issuer or (II) any person who would, upon consummation of such transfer, beneficially own 5% or more of Common Stock on an-as converted basis, except to the extent that any of the foregoing transfers is pursuant to an underwritten offering (including underwritten block trades) or Rule 144 under the Securities Act of 1933, as amended or any other Lock-Up Exception.

Stockholders Agreement

On August 5, 2020, the Issuer and each Crestview Party also entered into a Stockholders Agreement (the “Stockholders Agreement”).

Additional Growth Capital

Pursuant to the Stockholders Agreement, as long as no Crestview Party has transferred any Preferred Stock, Common Stock or any other Issuer equity stock to a non-affiliated party and in any event at no point after the three year anniversary of the Initial Closing Date, the Issuer has the right to request additional capital from the Crestview Parties in an amount not to exceed $90 million (when aggregated together with the Subsequent Closing Amount) on terms and conditions to be mutually agreed by the Issuer and each Crestview Party and subject to the approval of the Crestview Parties’ investment committee.

Crestview Parties’ Directors and Nominees

Pursuant to the Issuer’s bylaws, the Stockholders Agreement and the Certificate of Designations, effective as of the Initial Closing Date, the Issuer increased the size of the Board of Directors to nine directors and appointed two designees of the Reporting Persons, Brian Cassidy, a Crestview Partner, and Kevin Rabbitt, a Crestview Operating Executive, to serve as members of the Board of Directors. The Crestview designees will be annually elected and serve terms expiring at the 2021 annual meeting of the Issuer and until their successors are duly elected and qualified.

Additionally, after the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Clearance”) and receipt of requisite Canadian Competition Act Approval (as defined in the Investment Agreement), and for so long as the Crestview Parties have, in the aggregate, record and beneficial ownership of, on an as-converted basis, (i) 67% of the total number of Common Stock issuable upon conversion of the Initial Closing Shares issued to them under the Investment Agreement (the “Initial Share Ownership”), the Crestview Parties will have the right to designate, or nominate for election upon converting the Purchased Shares into Conversion Shares, two members to the Board of Directors and (ii) 33% of the Initial Share Ownership, the Crestview Parties will have the right to (a) designate, or nominate for election upon converting the Purchased Shares into Conversion Shares, one member to the Board of Directors and (b) appoint one representative to attend the meetings of the Board of Directors as a non-voting observer, as well as receive all communications and materials provided to the Board of Directors.

Standstill

Subject to certain customary exceptions, the Crestview Parties are prohibited from, among other things, (i) acquiring equity securities of the Issuer in excess of 2,500,000 Common Stock in the aggregate, (ii) effecting an acquisition, by tender or exchange offer, merger, amalgamation or a similar business combination, of the Issuer and (iii) soliciting proxies or seeking a director/management change in the Issuer until the later of (x) three years after the date of the Stockholders Agreement and (y) such time as the Crestview Parties hold, in the aggregate, record and beneficial ownership of, on an as-converted basis, less than 33% of the Initial Share Ownership (the “Sunset Date”). In addition, the Crestview Parties are prohibited from engaging in any short sale or any purchase, sale or grant of any security that includes, relates to or derives any significant part of its value from a decline in the market price or value of the Issuer’s securities.

Preemptive Rights

If, after the date of the Investment Agreement, the Issuer intends to issue new equity securities for cash to any person, then the Crestview Parties, as long as they hold, in the aggregate, record and beneficial ownership of, on an as-converted basis, more than 50% of the Initial Share Ownership, have the right to participate in such equity offering, subject to customary exceptions.

Voting Agreement

Under the Stockholders Agreement, after receipt of the HSR Clearance and requisite Canadian Competition Act Approval and until the Sunset Date, the Crestview Parties have agreed to vote all of the Purchased Shares, Conversion Shares or any other shares of Common Stock (i) in favor of each director nominated or recommended by the Board of Directors for election at any such meeting, and against the removal of any director who has been elected following nomination or recommendation by the Board of Directors, (ii) against any stockholder nomination for director that is not approved and recommended by the Board of Directors for election at any such meeting and (iii) in favor of the Stockholder Approval (as defined below). The Crestview Parties also agree to vote all Common Stock (on an-as converted basis, including Common Stock issuable upon conversion of Preferred Stock) in excess of 34.9% of the total voting power of the then-outstanding Common Stock (treating shares of Common Stock issuable upon conversion of all of the Preferred Stock as outstanding for this purpose) in the same proportion as the non-Crestview Party shareholders of the Issuer vote for or against or abstain with respect the applicable matter.

Designation of Preferred Stock

The Preferred Stock ranks senior to the Common Stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Upon a liquidation, dissolution or winding up of the Issuer, each share of Preferred Stock will be entitled to receive an amount per share equal to the greater of (i) the purchase price paid by the Crestview Parties, plus all accrued and unpaid dividends (the “Liquidation Preference”) and (ii) the amount that the Holder would have been entitled to receive at such time if the Preferred Stock were converted into Common Stock (without giving effect to any Ownership Limitation (as defined below)) (the “Value of Converted Shares”).

The Holders will be entitled to dividends on the Liquidation Preference at the rate of 5.5% per annum, which accrete or, at the option of the Issuer, are payable in cash. The Holders are also entitled to participate in dividends declared or paid on the Common Stock on an as-converted basis.

Each Holder will have the right, at its option, to convert its Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Common Stock at an initial conversion price equal to $21.25 per share. The conversion price is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, recapitalization or similar events. The conversion price is also subject to adjustment for certain dilutive issuances of Common Stock at a price below the then-current market price and repurchases of Common Stock at a price above the then-current market price.

Pursuant to the terms of the Certificate of Designations and the Investment Agreement, as applicable, unless and until approval of the Issuer’s stockholders is obtained as contemplated by NYSE listing rules (the “Stockholder Approval”), (i) the Crestview Parties may not convert shares of Preferred Stock through either an optional or a mandatory conversion into shares of Common Stock if and solely to the extent that such conversion would result in the Crestview Parties, in the aggregate, beneficially owning (without counting any Common Stock transferred to a non-affiliated Holder) in excess of 29.9% of then-outstanding Common Stock (treating shares of Common Stock issuable upon conversion of all of the Preferred Stock as outstanding for this purpose) (such limitation, the “Ownership Limitation”), (ii) the Crestview Parties may not exercise their preemptive rights to the extent Stockholder Approval is required as a result of the Crestview Parties’ status as affiliates of the Issuer or pursuant to the applicable rules and regulations of the applicable stock exchange, (iii) the conversion price of the Preferred Stock cannot be adjusted below $15.23 in connection with certain degressive issuances of Common Stock. The Issuer has an obligation to use reasonable best efforts to call and hold a special meeting of the stockholders of the Issuer, as promptly as reasonably practicable following the Initial Closing Date, to seek Stockholder Approval.

Subject to certain conditions (including, but not limited to, a portion of the Preferred Stock subject to the Ownership Limitation), the Issuer may, at its option after the third anniversary of the Initial Closing Date, require conversion of all of the outstanding shares of Preferred Stock to Common Stock if, for at least 20 trading days during the 30 consecutive trading days immediately preceding the date the Issuer notifies the Holders of the election to convert, the daily VWAP of the Common Stock is at least 200% of the conversion price. The Issuer will not exercise its right to mandatorily convert all outstanding shares of Preferred Stock unless certain liquidity conditions with regard to the shares of Common Stock to be issued upon such conversion are satisfied.

If the Issuer undergoes a Change of Control, each Holder has the right to cause the Issuer to redeem any or all of the Preferred Stock for cash consideration equal to the greater of (x) (i) 101% of the Liquidation Preference thereof at any time on or prior to the third anniversary of the Initial Closing Date and (ii) 100% of the Liquidation Preference thereof at any after the third anniversary of the Initial Closing Date and (y) the Value of Converted Shares immediately prior to such Change of Control.

Following the HSR Clearance and receipt of the requisite Canadian Competition Act Approval, the Holders generally will be entitled to vote with the holders of the shares of Common Stock on all matters submitted for a vote of holders of shares of Common Stock (voting together with the holders of shares of Common Stock as one class) on an as-converted basis, subject to the Ownership Limitation. Additionally, certain matters will require the approval of the majority of the outstanding Preferred Stock, voting as a separate class, including (i) the issuance of any additional Preferred Stock (other than pursuant to the terms of the Investment Agreement), Series $4.75 Preferred Stock (as defined in the Issuer’s Certificate of Incorporation), class or series of senior or parity equity-linked securities or any senior or parity rights, options or warrants to purchase or otherwise acquire any shares of senior or parity equity-linked securities, (ii) amendments, modifications, repeal or waiver of any provision of the Issuer’s Certificate of Incorporation or of the Certificate of Designations that would adversely affect the rights, preferences, privileges or powers of the Preferred Stock and (iii) subject to certain customary exceptions, the declaration or payment of any dividends or distributions on, or redemption or repurchase of, any junior securities. The holders of Preferred Stock are entitled to the exclusive right to vote, as a separate class, to elect the directors designated by the Crestview Parties pursuant to the terms of the Stockholders Agreement.

Registration Rights Agreement

On August 5, 2020, the Issuer and each of the Crestview Parties also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things, the Issuer granted each Crestview Party certain registration rights. Under the Registration Rights Agreement, the Issuer is required to use its reasonable best efforts to cause the registration of the Conversion Shares.

The foregoing descriptions of the Investment Agreement, the Stockholders Agreement, the Registration Rights Agreement and the terms of the Preferred Stock do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Investment Agreement, the Stockholders Agreement, the Registration Rights Agreement and the Certificate of Designation, copies of which are being incorporated by reference as Exhibits 2, 3, 4 and 5, respectively, in Item 7 of this Statement and are incorporated herein by reference.

Item 7. Material to Be Filed as Exhibits.

SIGNATURE

After reasonable inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this Statement is true, complete and correct.

Dated: August 6, 2020