UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________SCHEDULE 14A
Schedule 14A___________________
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934(Amendment No. )
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| Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule |
| Definitive Proxy Statement |
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CF ACQUISITION CORP. VIII
XBP Europe Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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CF ACQUISITION CORP. VIII110 East 59th StreetNew York, New York 10022
LETTER TO STOCKHOLDERSXBP EUROPE HOLDINGS, INC.
TO THENOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF CF ACQUISITION CORP. VIII:TO
YouBE HELD JUNE 13, 2024
The Annual Meeting of Stockholders (the “Annual Meeting”) of XBP Europe Holdings, Inc. (“XBP” or the “Company”) will be conducted virtually on June 13, 2024 at 1:00 p.m. (Eastern Time,) via a live webcast at www.virtualshareholdermeeting.com/XBP2024, for the purpose of:
3. | Acting upon a proposal to approve the XBP Europe Holdings, Inc. 2024 Stock Incentive Plan. |
The Board of Directors has fixed the close of business on April 17, 2024, as the date for determining stockholders of record entitled to receive notice of, and to vote at, the Annual Meeting. The Board of Directors unanimously recommends that stockholders vote their shares in favor of the election of each of the Class I nominees, and in favor of Proposals 2 and 3.
This Notice of Annual Meeting and accompanying Proxy Statement, a proxy or voting instruction card and our 2023 Annual Report to Stockholders will be first mailed to you and to other stockholders of record commencing on or about April 30, 2024. All stockholders are cordially invited to attend the specialAnnual Meeting. The Annual Meeting will be held in a virtual meeting format so as many stockholders as possible can participate. Whether or not you plan to attend the Annual Meeting, I hope that you will vote as soon as possible. Please review the instructions on the proxy or voting instruction card regarding your voting options.
| By Order of the Board of Directors Par Chadha Executive Chairman April 29, 2024 |
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XBP Europe Holdings, Inc.
2701 E. Grauwyler Road
Irving, Texas 75061
FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on June 13, 2024 at 1:00 p.m. (Eastern Time)
Questions and Answers About the Annual Meeting and Voting
Why did I receive this Proxy Statement?
We have mailed you this Notice of Annual Meeting, the Proxy Statement, a proxy or voting instruction card and our 2023 Annual Report to Stockholders (collectively, the “proxy materials”) because the Board of Directors (the “Special“Board of Directors” or the “Board”) of XBP Europe Holdings, Inc. (“XBP” or the “Company,” “we” and “us”) is soliciting your proxy to vote at our 2024 Annual Meeting of Stockholders (the “Annual Meeting”) ofto be held on June 13, 2024. This Proxy Statement contains information about the items being voted on at the Annual Meeting and information about us.
We were a special purpose acquisition company called CF Acquisition Corp. VIII (“we”, “us”, “our” or the “Company”), to be held at 10:00 a.m. Eastern Time on September [ ], 2023.
The Special Meeting will be a completely virtual meeting of stockholders, which will be conducted via live webcast. You will be able to attend the Special Meeting online, vote and submit your questions during the Special Meeting by visiting https://www.cstproxy.com/[ ].
Even if you are planning on attending the Special Meeting online, please promptly submit your proxy vote by telephone, or, if you received a printed form of proxy in the mail, by completing, dating, signing and returning the enclosed proxy, so your shares will be represented at the Special Meeting. Instructions on voting your shares are on the proxy materials you received for the Special Meeting. Even if you plan to attend the Special Meeting online, it is strongly recommended you complete and return your proxy card before the Special Meeting date, to ensure that your shares will be represented at the Special Meeting if you are unable to attend.
The accompanying proxy statement (the “Proxy Statement”CFVIII”) is dated [ ], 2023, and is first being mailed to stockholders of the Company on or about [ ], 2023. The sole purpose of the Special Meeting is to consider and vote upon the following proposals:
• a proposal to amend the Company’s amended and restated certificate of incorporation (the “Charter”), in the form set forth in Annex Aprior to the Proxy Statement (the “Extension Amendment” and such proposal the “Extension Amendment Proposal”), to extend the date by which the Company must (i) consummateclosing of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a(the “Business Combination”), (ii) cease its operations if it fails on November 29, 2023. pursuant to complete a Business Combination, and (iii) redeem or repurchase 100% of the Company’s Class A common stock (“Class A common stock”) included as part of the units sold in the Company’s initial public offering (the “Public Shares”) that was consummated on March 16, 2021 (the “IPO”), from September 16, 2023 (the “Termination Date”) to March 16, 2024 or such earlier date as determined by the board of directors of the Company (the “Board”) in its sole discretion (the “Extension”, and such later date, the “Extended Date”); and
• a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal (the “Adjournment Proposal”). The Adjournment Proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Extension Amendment Proposal.
Each of the Extension Amendment Proposal and the Adjournment Proposal is more fully described in the Proxy Statement.
The purpose of the Extension Amendment Proposal and, if necessary, the Adjournment Proposal, is to allow us additional time to complete the proposed transactions (the “XBP Europe Business Combination”) contemplated by that certain Agreement and Plan of Merger, dated October 9, 2022 (the “Merger Agreement”), dated as of October 9, 2022, by and among us, Sierra Merger Sub, whereby XBP Europe, Inc., a Delaware corporation (“Legacy XBP”) and an indirect subsidiary of Exela Technologies, Inc., a directDelaware corporation (“Exela”), became a wholly owned subsidiary of CFVIII. In connection with the consummation of the Business Combination, CFVIII was renamed “XBP Europe Holdings, Inc.” For further information on the Business Combination, please refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Who is entitled to vote and when is the record date for the Annual Meeting?
You may vote on each matter properly submitted for stockholder action at the Annual Meeting if you were the record holder of our common stock, par value $0.0001 per share (“Common Stock”) as of the close of business on April 17, 2024 (the “Record Date”). As of the Record Date, there were 30,166,102 shares of our Common Stock outstanding and entitled to vote at the Annual Meeting. Each share of Common Stock is entitled to one vote per share on any matter presented to stockholders at the Annual Meeting.
What am I voting on?
You will be voting on the following:
Proposal 1: | To elect to the Board of Directors the two nominees named in this Proxy Statement who have been nominated by the Board of Directors to serve as Class I directors and whose current terms will expire at the Annual Meeting; |
Proposal 2:To ratify the appointment of UHY LLP as our independent registered public accounting firm for the year ending December 31, 2024; and
Proposal 3:To approve the XBP Europe Holdings, Inc. 2024 Stock Incentive Plan.
What are my voting options and how do I vote?
For the election of Directors, you may either vote “For” each of the nominees to the Board of Directors or you may “Withhold” your vote for any nominee you specify. For the other proposals you have the choice to vote “FOR”, “AGAINST” or “ABSTAIN”.
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How many votes do I have?
Each share of our Common Stock that you own entitles you to one vote on each matter properly submitted for stockholder action at the Annual Meeting.
Why is the Company conducting the Annual Meeting virtually?
The Annual Meeting will be held in a virtual format to reach a greater number of our stockholders.
Why is the Company seeking approval of the XBP Europe Holdings, Inc. 2024 Stock Incentive Plan?
We believe that approval of the XBP Europe Holdings Inc. 2024 Stock Incentive Plan (the “2024 Plan”) is essential to our continued success. Under the 2024 Plan, we will be authorized to issue up to 5,520,270 shares of Common Stock. Our Board believes that equity compensation of the type available for grant under the 2024 Plan, a stock-based incentive plan, furthers our goal of creating long-term value for our stockholders by fostering an ownership culture that encourages a focus on long-term performance, retention, and stockholder value-creation, and exposes participants to economic diminishment if our share performance lags. In addition, if the 2024 Plan is not approved, we will need to grant cash-based or other awards in order to remain competitive; such alternatives may not align the interests of our employees and non-employee directors as closely with those of our stockholders as equity awards. Furthermore, the use of cash resources to deliver competitive pay would divert cash from use in running other aspects of our business and investing in future product development. Finally, if the 2024 Plan is not approved, we would be at a significant disadvantage relative to our competitors for attracting, motivating, rewarding and retaining the high caliber individuals critical to our growth and profitability as we would not be able to offer equity, with its upside potential.
How do I vote?
If you are a holder of record of the Common Stock as of the Record Date, you may vote online at the virtual Annual Meeting or by submitting a proxy for the Annual Meeting. Whether or not you plan to attend the Annual Meeting online, we urge you to vote by proxy in advance of the Annual Meeting to ensure your vote is counted. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You may still attend the Annual Meeting and vote online if you have already voted by proxy.
If your XBP shares are held in “street name” by a broker or other agent, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Annual Meeting online. However, since you are not the stockholder of record, you may not vote your shares online at the Annual Meeting unless you request and obtain a valid proxy from your broker or other agent.
What happens if I do not vote?
If you are a stockholder of record and do not vote online at the virtual Annual Meeting or by submitting a proxy for the Annual Meeting, your shares will not be voted.
If you are a beneficial owner and do not instruct your broker, bank or other agent how to vote your shares, the question of whether your broker, bank or other agent will still be able to vote your shares depends on whether the particular proposal is deemed to be a “routine” matter. Brokers, banks and other agents can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. See “May my broker vote my shares?” below for further information.
What if I return my proxy or voting instruction card but do not mark it to show how I am voting?
Your shares will be voted according to the instructions you have indicated on your proxy or voting instruction card. If no direction is indicated, your shares will be voted “FOR” the election of each of the Class I nominees and “FOR” Proposals 2 and 3.
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May I revoke my vote after I return my proxy or voting instruction card?
Yes. You may revoke your proxy at any time before your shares are voted at the Annual Meeting in one of three ways:
● | Notify our Corporate Secretary in writing before the Annual Meeting that you are revoking your proxy; |
● | Submit another properly completed proxy by mail, telephone or the Internet (or voting instruction card if you hold your shares in street name) with a later date; or |
● | Vote virtually at the Annual Meeting. Simply attending the Annual Meeting will not, by itself, revoke your proxy. |
What does it mean if I receive more than one proxy or voting instruction card?
It means you have multiple accounts at the transfer agent and/or with banks and stockbrokers. Please vote all of your shares using all of your proxy or voting instruction cards.
What constitutes a quorum?
The presence, virtually, or by proxy duly authorized, of the holders of majority of the voting power of the outstanding Common Stock entitled to vote. If, however, such quorum shall not be present or represented, the chairperson for the meeting or the holders of a majority of the votes entitled to be cast by the stockholders entitled to vote, present virtually or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. Abstentions and “broker non-votes” are counted as shares “present” at the meeting for purposes of determining whether a quorum exists. A “broker non-vote” occurs when shares held of record by a bank, broker or other holder of record for a beneficial owner are deemed present at the meeting for purposes of a quorum but are not voted on a particular proposal because that record holder does not have discretionary voting power for that particular matter under the applicable rules of the Nasdaq Stock Market LLC (“Merger Sub”Nasdaq”) and has not received voting instructions from the beneficial owner.
What vote is required in order to approve Proposals 1, 2 and 3?
Proposal 1 (Election of Directors): The two nominees named in this Proxy Statement who have been nominated by the Board of Directors to serve as Class I directors will be elected to the Class I directorships by a plurality in voting power of the outstanding shares of our Common Stock present virtually or represented by proxy at the Annual Meeting and entitled to vote on the election of directors. This means that the two nominees with the most votes cast in their favor will be elected to the Class I directorships. Votes withheld from one or more director nominees will have no effect on the election of any director from whom votes are withheld. If you do not want to vote your shares for a nominee, you may indicate that in the space provided on the proxy card or the voting instruction card or withhold authority as prompted during telephone or Internet voting. Each person nominated for election has consented to being named as a nominee in this Proxy Statement and has agreed to serve if elected. We have no reason to believe that any nominee will be unable to serve if elected. In the unanticipated event that a director nominee is unable or declines to serve, the proxy will be voted for such other person as shall be designated by the Board of Directors to replace the nominee, or the Board may choose to reduce the number of directors.
Proposal 2 (Ratification of Appointment of UHY LLP): This proposal requires the affirmative vote of the holders of a majority of the voting power of our outstanding Common Stock present virtually or represented by proxy at the Annual Meeting and entitled to vote on Proposal 2. Abstentions will have the effect of votes against the proposal. Broker non-votes will not occur in connection with this proposal because brokers, banks, trustees and other nominees have discretionary voting authority to vote shares on this proposal under stock exchange rules without specific instructions from the beneficial owner of such shares.
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Proposal 3 (Approval of the XBP Europe Holdings, Inc. 2024 Stock Incentive Plan): This proposal requires the affirmative vote of the holders of a majority in voting power of the outstanding shares of our Common Stock present virtually or represented by proxy at the Annual Meeting and entitled to vote on Proposal 3. Abstentions will have the effect of votes against the proposal. “Broker non-votes,” if any, will not have any effect on the adoption of this proposal.
May my broker vote my shares?
Brokers holding shares of record in “street name” for a client have the discretionary authority to vote on certain matters if they do not receive instructions from the client regarding how the client wants the shares voted in the time period specified in the proxy statement. There are also some matters with respect to which brokers do not have discretionary authority to vote if they do not receive timely instructions from the client; those matters include a list specified list of matters in the applicable rules and contested matters.
How will voting on any other business be conducted?
In accordance with our Amended and Restated Bylaws (the “Bylaws”), no business (other than the election of the two Class I nominees and Proposals 2 and 3) may be brought before the Annual Meeting, or any adjournment or postponement thereof, unless such business is brought by or at the direction of the Board or a committee of the Board.
We do not know of any business or proposals to be considered at the Annual Meeting other than those set forth in this Proxy Statement. If any other business were somehow properly presented at the Annual Meeting, the proxies received from our stockholders give the proxy holders the authority to vote on the matter in their sole discretion.
Who will count the votes?
A representative from Broadridge Financial Solutions, Inc. will act as the inspector of election and will tabulate the votes.
How do I attend the Annual Meeting?
To be admitted to the virtual Annual Meeting at http://www.virtualshareholdermeeting.com/XBP2024 you must have your control number available and follow the instructions found on your proxy card or voting instruction form. Only record holders of shares of Common Stock may vote during the Annual Meeting by following the instructions available on the Annual Meeting website during the Annual Meeting. Please allow sufficient time before the Annual Meeting to complete the online check-in process. Your vote is very important. See section “Access to Virtual-only Meeting. and Participation at virtual the Annual Meeting” below for further information.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. Final voting results will be disclosed in a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on June 13, 2024 at at 1:00 p.m. (Eastern Time)
This Notice of Annual Meeting, Proxy Statement, a form of proxy and Annual Report on Form 10-K for the year ended December 31, 2023 are available at our website at: https://www.xbpeurope.com/ and at www.virtualshareholdermeeting.com/XBP2024.
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PROPOSAL 1 — ELECTION OF DIRECTORS
The Company has three classes of directors serving staggered three-year terms, with each of Class I and II consisting of two directorships, and Class III consisting of one directorship. The terms of the Class I, II and III directorships expire on the date of the Annual Meeting in 2024, 2025, and 2026, respectively.
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Name | Age | Class | Positions and Offices Held with the Company |
Par S. Chadha | 69 | III | Director, Executive Chairman |
J. Coley Clark | 78 | I | Director |
Andrej Jonovic | 43 | II | Director, Chief Executive Officer |
James G. Reynolds | 55 | II | Director |
Martin P. Akins | 57 | I | Director |
At the Annual Meeting, stockholders will be asked to elect the two nominees named in this Proxy Statement who have been nominated by the Board of Directors to serve as Class I directors and whose current term will expire at the Annual Meeting. Mr. Akins and Mr. Clark, each of whom is a current Class I director, are the nominees to serve as Class I directors for a new three-year term. Each nominee, if elected, will serve for a term of three years and will remain in office until a qualified successor director has been elected or until he resigns or is removed from the Board. Class I directors will be elected by plurality in voting power of the outstanding shares of our Common Stock present virtually or represented by proxy at the Annual Meeting and entitled to vote on the election of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES
Nominees for Election to the Board of Directors in 2024
The following are brief biographical sketches of each of our nominees, including their experience, qualifications, attributes and skills, which, taken as a whole, have enabled the Board to conclude that each nominee should, in light of the Company’s business and structure, serve as a director of the Company.
Nominees for Class I Directorship — Term Expiring in 2024
Martin P. Akins
Age: 57
Director since November 2023
Class: Class I
Business Experience: Mr. Akins has served as a director of the Company since the consummation of the Business Combination. Mr. Akins has served as a director of Exela since July 2019. Prior to that, Mr. Akins worked at publicly traded Express Scripts Holding Company (“Express Scripts”), a Fortune 25 company and the largest independent pharmacy benefit management company in the United States. In December of 2018, Express Scripts merged with Cigna Corporation. As Senior Vice President and General Counsel at Express Scripts Mr. Akins served as the chief legal advisor and was also a member of Express Scripts’ senior executive team where he advised the CEO and outlined strategy to the board of directors. Mr. Akins was at Express Scripts from 2001 through 2019, serving in various legal capacities including Vice President, Deputy General Counsel and Associate General Counsel. Prior to his time at Express Scripts, Mr. Akins was with the Polsinelli law firm. Mr. Akins began his legal career with the firm Thompson Coburn LLP. He received his Juris Doctorate from the University of Illinois College of Law. We believe that Mr. Akins’ significant, strategic, legal, regulatory and governance experience, make him well-qualified to serve as a director of the Company.
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J. Coley Clark
Age: 78
Director since: November 2023
Class: Class I
Business Experience: J. Coley Clark has served as a director of the Company since the consummation of the Business Combination. Mr. Clark has served as a director of Exela since December 2019. Mr. Clark is the retired Chief Executive Officer and Chairman of the board of BancTec, Inc., a global provider of document and payment processing solutions, and former member of the board of directors of Moneygram International, Inc. At BancTec, Inc., Mr. Clark was Co-Chairman of the board from 2014 to December 2016, and Chairman of the board and Chief Executive Officer from September 2004 to 2014. In 2004, Mr. Clark retired from Electronic Data Systems Corporation, or EDS, an outsourcing services company that was acquired by Hewlett-Packard in 2008, as Senior Vice President and head of the Financial and Transportation Industry Group. Mr. Clark joined EDS in 1971 in the Systems Engineering Development Program and progressed through a variety of technical, sales and management roles related to the financial and insurance industries. Prior to his time at EDS, Mr. Clark served three years in the U.S. Army, attaining the rank of Captain, and served as a company commander in Europe and Southeast Asia. Mr. Clark received a Bachelor of Arts in Sociology from the University of Texas. We believe that Mr. Clark’s significant, diversified business experience in XBP’s industry makes him well-qualified to serve as a director of the Company.
Continuing Members of the Board of Directors
The following are brief biographical sketches of each of our directors whose term continues beyond 2024 and who is not subject to election this year, including his or her experience, qualifications, attributes and skills, which, taken as a whole, have enabled the Board to conclude that each director should, in light of the Company’s business and structure, serve as a director of the Company.
Class II Directors — Term Expiring in 2025
James G. Reynolds
Age: 55
Director since November 2023
Class: Class II
Business Experience: Mr. Reynolds has served as a director of the Company since the consummation of the Business Combination. Mr. Reynolds was Exela’s Chief Financial Officer from the closing of the Novitex Business Combination until May 2020. Mr. Reynolds currently serves as a director of Exela, and has done so since July 2017. Mr. Reynolds served as Co-Chairman of SourceHOV from 2014 until the closing of the Novitex Business Combination in 2017. Mr. Reynolds was also the Chief Operating Officer and a Partner at HGM, bringing over 25 years of industry experience to the team. Prior to HGM Mr. Reynolds held numerous executive management or senior advisory positions at SourceHOV and its related subsidiaries and predecessor companies, including serving as Chief Financial Officer for HOV Services, LLC from 2007 to 2011 and Vice President and Corporate Controller for Lason from 2001 to 2006. Mr. Reynolds was a Senior Manager in the Business Advisory Services Practice at PricewaterhouseCoopers from 1990 to 2001. Mr. Reynolds is a C.P.A. and holds a B.S. in Accounting from Michigan State University. We believe that Mr. Reynold’s significant industry and management experience make him well-qualified to serve as a director of the Company.
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Andrej Jonovic
Age: 43
Director Since: November 2023
Class: Class II
Business Experience: Mr. Jonovic has served as a director and as the Chief Executive Officer of the Company since the consummation of the Business Combination. Mr. Jonovic is responsible for the development and execution of business strategy, shaping the company culture and enhancing shareholder value. Mr. Jonovic has served as the Executive Vice President, Business Strategy and Corporate Affairs of Exela since July 2017, where he has been responsible for the oversight of several company wide functions, including M&A and strategic transactions, legal affairs, human resources, marketing and the Digital Assets Group. Mr. Jonovic has retained his title at Exela, however since the Business Combination he has been transitioning out of his role at Exela to focus exclusively on his role as Chief Executive Officer of XBP Europe. Prior to Exela, Mr. Jonovic was a managing director in the family office of HandsOn Global Management, based in London, and oversaw the integration of BancTec’s European operations with SourceHOV following their combination in October 2014. Earlier in his career, Mr. Jonovic was an associate at Freshfields Bruckhaus Deringer, LLP, a global law firm headquartered in London. Mr. Jonovic holds a bachelor’s degree in International Studies from The American University, Washington D.C., and a law degree from the London School of Economics and Political Science. Mr. Jonovic is registered with the Law Society of England and Wales however is not currently practicing. Mr. Jonovic is the son-in-law of Par Chadha, our Executive Chairman.
Class III Director — Term Expiring in 2026
Par S. Chadha
Age: 69
Director since November 2023
Class: Class III
Business Experience: Mr. Chadha has served as a director and as the Executive Chairman of the Company since the consummation of the Business Combination. Mr. Chadha is also the Executive Chairman of Exela and is the founder, Chief Executive Officer and Chief Investment Officer of HGM, a family office, formed in 2001. Mr. Chadha brings over 40 years of experience in building businesses in the Americas, Europe and Asia, including execution of mergers and acquisitions, integration of businesses and public offerings. Mr. Chadha served as the Chairman of Exela since the closing of business combination among Exela, SourceHOV Holdings, Inc. (“SourceHOV”), and Novitex Holdings, Inc. (“Novitex”) on July 12, 2017 (“Novitex Business Combination”), and most recently became Executive Chairman of Exela in September 2021. He also served as Chairman of SourceHOV from 2011 to July 2017 when it was acquired by Exela, and was Chairman of Lason Inc. from 2007 to 2011 until its merger with SourceCorp, a predecessor company of SourceHOV. Mr. Chadha currently serves as the Chairman of HOV Services Limited (NSE:HOVS), a company listed on the National Stock Exchange of India. He previously held this position from 2009 to 2011 and has otherwise served as a Director since 2005. Mr. Chadha is co-founder of Rule 14, LLC, an artificial intelligence led automation company formed in 2011. During his career, Mr. Chadha has been a cofounder of technology companies in the fields of metro optical networks, systems-on-silicon, and communications. Mr. Chadha previously participated in director and executive roles in portfolio companies of HGM, and currently holds and manages investments in evolving financial technology, health technology and AI industries. Mr. Chadha holds a B.S. degree in Electrical Engineering from the Punjab Engineering College, India. Mr. Chadha is the father-in-law of Andrej Jonovic.
Additional Information Concerning the Board of Directors of the Company
The Board of Directors did not meet during the fiscal year ended December 31, 2023 following the completion of the Business Combination on November 29, 2023. The Compensation Committee met once during the fiscal year ended December 31, 2023 following the completion of the Business Combination on November 29, 2023. Each director attended 75% or more of the aggregate number of meetings of the Board of Directors and of the committees on which he or she
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served, held during the portion of the fiscal year ended December 31, 2022 for which he or she was a director or committee member.
During the fiscal year ended December 31, 2023, prior to the completion of our Business Combination on November 29, 2023, the CFVIII board of directors met seven times, and the audit committee met five times. Each director attended 75% or more of the aggregate number of meetings of the CFVIII board of directors and of the committees on which he or she served, held during the portion of the fiscal year ended December 31, 2023 for which he or she was a director or committee member.
All directors are strongly encouraged to attend our Annual Meeting of stockholders and we expect our directors and nominees for directors to attend our annual meeting of stockholders.
For purposes of the Nasdaq Listing Rules, the Company is a “controlled company.” Under the Nasdaq rules, controlled companies are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company. Exela, through its ownership of BTC International Holdings, Inc., a Delaware corporation (“Parent”(the “BTC International”), owns a majority of the issued and outstanding Common Stock.
As a “controlled company,” the Company is exempt from the requirement that a majority of the Board be independent. The Common Stock is listed on Nasdaq, and the Company is required to comply with the Nasdaq listing requirements regarding independent directors. Under Nasdaq’s Marketplace Rules, the definition of an “independent director” is a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the issuer’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In addition, under the Nasdaq rules a director (A) who at any time during the past three years was employed by the Company or (B) who accepted, or who has a family member who accepted, compensation from the Company in excess of $ 120,000 (other than compensation for board and committee service, compensation paid to a family member who is an employee (other than an executive officer), benefits under a tax-qualified retirement plan, or non-discretionary compensation) during any period of twelve consecutive months within the three years preceding the determination of independence, shall not be considered independent.
Our Board of Directors has reviewed the Nasdaq rules and such information as the Board has deemed appropriate for purposes of determining whether any of the directors has a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, including the beneficial ownership by our directors of Common Stock. Based on such review, the Board of Directors has determined that each director, other than Par Chadha and Andrej Jonovic, qualifies as an independent director under Nasdaq listing standards and applicable SEC rules: Non-management directors meet periodically in executive session without members of the Company’s management at the conclusion of regularly scheduled Board meetings. In addition, Messrs. Akins, Clark and Reynolds qualify as independent directors for the purpose of serving on the Audit Committee of the Company under SEC rules (Messrs. Akins, Clark and Reynolds being the current members of the Audit Committee).
Our Bylaws do not require that the positions of Chairman of the Board and Chief Executive Officer be held by the same person or by different individuals, and our Board does not have a formal policy with respect to the separation or combination of these offices. Our Board of Directors exercises its judgment in combining or separating the roles of Chairman of the Board of Directors and Chief Executive Officer as it deems appropriate in light of prevailing circumstances. Currently, Mr. Chadha serves as the Executive Chairman but not as the Chief Executive Officer. The Board of Directors will continue to exercise its judgment on an ongoing basis to determine the optimal leadership structure that the Board of Directors believes will provide effective leadership, oversight and direction, while optimizing the functioning of both the Board of Directors and management and facilitating effective communication between the two.
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The Company faces a number of risks, including market risks, credit risk, liquidity risk, reputational risk, operational risk, cybersecurity risks and risks from inflation and/or deflation. Management is responsible for the day-to-day management of risks faced by the Company, while the Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management. The Board of Directors does not have a standing risk management committee, but rather administers this oversight function directly through the Board of Directors as a whole, as well as through various standing committees of the Board of Directors that address risks inherent in their respective areas of oversight. In its risk oversight role, the Board of Directors seeks to ensure that the risk management processes designed and implemented by management are adequate. The Board of Directors periodically consults with management regarding the Company’s risks. In addition, the Audit Committee periodically reviews with management and independent registered public accounting firms the adequacy and effectiveness of the Company’s policies for assessing and managing risk.
Pursuant to Nasdaq’s Board Diversity Rule 5605(f), which was approved by the SEC on August 6, 2021, we met the diversity objective as set out in this rule within the applicable transition period. The following is our Board Diversity Matrix as of April 17, 2024:
| | | | |
Board Diversity Matrix (as of April 17, 2024) | | | | |
Total Number of Directors | | | 5 | |
| | | | |
| Female | Male | Non-Binary | Did Not |
Part I: Gender Identity | | | | |
Directors | | 5 | | |
Part II: Demographic Background | | | | |
African American or Black | | | | |
Alaskan Native or American Indian | | | | |
Asian | | 1 | | |
Hispanic or Latinx | | | | |
Native Hawaiian or Pacific Islander | | | | |
White | | 4 | | |
Two or More Races or Ethnicities | | | | |
LGBTQ+ | | | | |
Did Not Disclose Demographic Background | | | | |
Director Compensation for fiscal year ended 2023
For the fiscal year ended December 31, 2023, members of the Company’s Board of Directors received no compensation for services rendered. The Company will reimburse its directors for reasonable and necessary out-of-pocket expenses incurred in attending board and committee meetings or performing other services for the Company in their capacities as directors.
Director Cash Compensation Policy for 2024
In December 2023, our Compensation Committee retained the services of an independent compensation consultant, the “Compensation Consultant (as defined herein), to evaluate and make recommendations for the non-employee director compensation commencing in fiscal year 2024 (See “Role of Compensation Consultant” for further discussion). Based on information provided by the Compensation Consultant, the Compensation Committee approved a
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compensation policy for its non-employee directors for fiscal year 2024. In January 2024, the Board approved, on the recommendation of the Compensation Committee, a new all cash non-employee director compensation policy for 2024 consisting of an annual cash retainer of $60,000 and an equity award anticipated to have a value of $140,000, pursuant to and subject to the adoption by the stockholders of the 2024 Plan, as well as annual cash compensation for committee service ranging from $8,000 to $20,000 for chairing a committee and $4,000 to $10,000 for service as a committee member, as follows.
| | |
Name | Annual Retainer | |
Annual Cash Retainer for Board Membership | $ | 60,000 |
Annual Equity Award for Board Membership | $ | 140,000 |
Audit Committee Member (other than the Chair) | $ | 10,000 |
Audit Committee Chair | $ | 20,000 |
Compensation Committee Member (other than the Chair) | $ | 5,000 |
Compensation Committee Chair | $ | 10,000 |
Nominating and Corporate Governance Committee Member (other than the Chair) | $ | 4,000 |
Nominating and Corporate Governance Committee Chair | $ | 8,000 |
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has three standing committees: an audit committee, a compensation committee and a nominating committee. The Company may from time to time establish other committees. Copies of the charters for each committee are available on the Investor Relations — Governance - Documents & Charters section of our website at investors.xbpeurope.com. These documents are also available upon written request to: Investor Relations, XBP Europe Holdings, Inc., 2701 E. Grauwyler Road, Irving, Texas 75061. Information concerning these Committees is set out below.
The members of our audit committee consist of James G. Reynolds, J. Coley Clark and Martin P. Akins. Mr. Reynolds serves as the chairperson of the audit committee. Under the Nasdaq Listing Rules, we are required to have at least three (3) members on the audit committee. The Nasdaq Listing Rules and Rule 10A-3 of the Exchange Act require that the audit committee of a Delaware corporationlisted company be composed solely of independent directors, and each member qualifies as an independent director under applicable rules. Each of Mr. Reynolds, Mr. Clark and Mr. Akins is financially literate and Mr. Reynolds qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
The functions of this committee include, among other things:
● | retaining an independent registered public accounting firm to act as the Company’s independent auditors; |
● | setting the compensation of the Company’s independent auditors; |
● | overseeing the work done by the Company’s independent auditors; |
● | pre-approving all audit and permitted non-audit and tax services that may be provided by the Company’s independent auditors or other registered public accounting firms, and establishing policies and procedures for the Committee’s pre-approval of such permitted services; |
● | at least annually, obtaining and reviewing a written statement by the Company’s independent auditors that describes all relationships between the firm and the Company or any of its subsidiaries; and discussing with the independent auditors this report and any relationships or services that may impact the objectivity and independence of the auditors; |
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● | at least annually, evaluating the qualifications, performance and independence of the Company’s independent auditors; |
● | reviewing and discussing with the Company’s independent auditors (1) the auditors’ responsibilities under generally accepted auditing standards and the responsibilities of management in the audit process, (2) the overall audit strategy, (3) the scope and timing of the annual audit, (4) any significant risks identified during the auditors’ risk assessment procedures and (5) when completed, the results, including significant findings, of the annual audit; |
● | reviewing and discussing with the Company’s independent auditors (1) all critical accounting policies and practices to be used in the audit; (2) all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with management, the ramifications of the use of such alternative treatments and the treatment preferred by the auditors; and (3) other material written communications between the auditors and management; |
● | reviewing with management and the Company’s independent auditors: any major issues regarding accounting principles and financial statement presentation; |
● | reviewing with management and the Company’s independent auditors the adequacy and effectiveness of the Company’s financial reporting processes, internal control over financial reporting and disclosure controls and procedures; |
● | reviewing and discussing with the Company’s independent auditors and management the Company’s annual audited financial statements (including the related notes) and the form of audit opinion to be issued by the auditors on the financial statements; |
● | setting clear Company hiring policies for employees or former employees of the Company’s independent auditors; |
● | establishing and overseeing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters; and |
● | reviewing, approving and overseeing any transaction between the Company and any related person on an ongoing basis and to develop policies and procedures for the Committee’s approval of related party transactions. |
The members of our compensation committee consist of James G. Reynolds, J. Coley Clark and Martin P. Akins. Mr. Clark serves as the chairperson of the compensation committee. Under the Nasdaq Listing Rules, we are required to have at least two members on the compensation committee. The Nasdaq Listing Rules require that the compensation committee of a listed company (other than that of a “controlled company,” which the Company is) be composed solely of independent directors, and each of James G. Reynolds, J. Coley Clark and Martin P. Akins qualify as independent directors under applicable rules.
The functions of this committee include, among other things:
● | reviewing and approving annually the corporate goals and objectives applicable to the compensation of the CEO, evaluating at least annually the CEO’s performance in light of those goals and objectives, and determine and approve the CEO’s compensation level based on this evaluation; |
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● | approving the compensation of all other executive officers; |
● | reviewing, approving and, when appropriate, recommending to the Board for approval, incentive compensation plans and equity-based plans, and where appropriate or required, recommending for approval by the stockholders of the Company; |
● | reviewing and approving and, when appropriate, recommending to the Board for approval, any employment agreements and any severance arrangements or plans; |
● | reviewing, approving and, when appropriate, recommending to the Board for approval, all employee benefit plans for the Company; |
● | reviewing the Company’s incentive compensation arrangements to determine whether they encourage excessive risk-taking, reviewing and discussing at least annually the relationship between risk management policies and practices and compensation, and evaluating compensation policies and practices that could mitigate any such risk; |
● | reviewing director compensation for service on the Board and Board committees at least once a year and recommending any changes to the Board; |
● | reviewing the Company’s compliance with the requirements under the Sarbanes-Oxley Act of 2002 relating to loans to directors and officers and with all other applicable laws affecting employee compensation and benefits; and |
● | assisting the Board in its oversight of the development and implementation of the Company’s human capital management. |
Role of Compensation Consultant
During the fiscal year ended December 31, 2023, the Compensation Committee retained Pearl Meyer (the “Compensation Consultant”), as its compensation consultant and requested the Compensation Consultant to:
● | provide market information, analysis, and other advice relating to executive compensation on an ongoing basis, commencing in fiscal year 2024; |
● | advise on the development of the Company’s peer group and provide support and analysis regarding executive and director compensation commencing in fiscal year 2024; |
● | evaluate the efficacy of our existing compensation strategy and practices in supporting and reinforcing our long-term strategic goals; and |
● | assist in refining our compensation strategy and in developing and implementing an executive compensation program to execute that strategy. |
As part of its engagement, the Compensation Consultant was requested by the Compensation Committee to develop a comparative group of peer companies and to perform analyses of competitive performance and compensation levels and design for that group. At the request of the Compensation Committee, Compensation Consultant also engaged in discussions with members of the Compensation Committee and senior management to learn more about our business operations and strategy, key performance metrics and strategic goals, as well as the labor markets in which we compete. Following an active dialogue with Compensation Consultant, the Compensation Committee considered Compensation Consultant’s input as part of its decision-making process.
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The Compensation Committee has evaluated its relationship with the Compensation Consultant to ensure that it believes that such firm is independent from management. This review process included a review of the services that the Compensation Consultant provided to the Company or its affiliates, the quality of those services and the fees associated with the services provided during the fiscal year ended December 31, 2023. Based on this review, as well as consideration of the factors affecting independence set forth in Exchange Act Rule 10C-1(b)(4), Rule 5605(d)(3)(D) of the Nasdaq listing standards, and such other factors as were deemed relevant under the circumstances, the Compensation Committee has determined that no conflict of interest was raised as a result of the work performed by the Compensation Consultant.
Nominating and Corporate Governance Committee
The members of our nominating committee consist of James G. Reynolds, J. Coley Clark and Martin P. Akins. Mr. Reynolds serves as the chairperson of the nominating committee. The Nasdaq Listing Rules require that the nominating committee of a listed company (other than that of a “controlled company,” which the Company is) be composed solely of independent directors, and each of James G. Reynolds, J. Coley Clark and Martin P. Akins qualify as independent directors under applicable rules.
The functions of this committee include, among other things:
● | determining the qualifications, qualities, skills, and other expertise required to be a director; |
● | identifying and screening individuals qualified to become members of the Board; |
● | making recommendations to the Board regarding the selection and approval of the nominees for director to be submitted to a stockholder vote; |
● | developing and recommending to the Board corporate governance guidelines, reviewing these guidelines and recommending any changes to the Board, and overseeing the Company’s corporate governance practices; |
● | identifying and making recommendations to the Board regarding the selection and approval of candidates to fill any vacancies that may occur. |
The Nominating and Corporate Governance Committee will evaluate candidates proposed by shareholders for nomination as directors under criteria similar to the evaluation of other candidates. Our bylaws provide that shareholders seeking to nominate candidates for election as directors at an annual meeting of shareholders must provide timely notice in writing. To be timely, a shareholder’s notice must be delivered to or mailed and received at our principal executive offices not more than 120 days or less than 90 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. However, in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice must be received not later than the close of business on the 10th day following the date on which notice of the date of the annual meeting was mailed to shareholders or made public, whichever occurs first. Our bylaws specify requirements as to the form and content of a shareholder’s notice. These provisions may preclude shareholders from making nominations for directors at an annual meeting of shareholders.
The Board has adopted a code of business conduct and ethics (“Code of Ethics”) that applies to all of the Company’s directors, officers and employees in accordance with applicable federal securities laws. The Code of Ethics is available on the Corporate Governance section of the Company’s website at www.xbpeurope.com. In addition, the Company intends to post on the Corporate Governance section of the Company’s website all disclosures that are required by law or the listing standards of the Nasdaq concerning any amendments to, or waivers from, any provision of the Code of Ethics rather than by filing a Current Report on Form 8-K
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Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices in place to review and evaluate our business operations as needed and to make decisions that are independent of our management. The guidelines are also intended to align the interests of directors and management with those of our stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to, among other things, director qualifications, board meetings and involvement of senior management, Chief Executive Officer performance evaluation and succession planning, and board committees.
The Board has adopted an insider trading policy that applies to our employees, directors, and certain consultants. This policy prohibits, among other things, trading of the company securities during specified blackout periods and engaging in short sales of company securities.
Hedging and Pledging Transactions
Pursuant to our insider trading policy, we discourage our employees, directors and officers from engaging in hedging transactions, including the use of financial instruments, such put options, call options or similar derivative securities. If a person subject to the policy determines that they must engage in such a transaction, the transaction must comply with our pre-clearance and blackout processes. Our directors, officers and other employees are not prohibited from pledging our securities.
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PROPOSAL 2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
UHY LLP currently serves as our independent registered public accounting firm. After consideration of UHY LLP qualifications and past performance, the Audit Committee has selected, and the Board of Directors ratified the selection of, UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. The Board of Directors has directed that management submit the selection of UHY LLP for ratification by our stockholders at the Annual Meeting. Representatives of UHY LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Neither our Bylaws nor other governing documents or law require stockholder ratification of the selection of UHY LLP as our independent registered public accounting firm. However, the Audit Committee has opted to submit the selection of UHY LLP to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain UHY LLP. Even if the selection is ratified, the Audit Committee or the Board of Directors, in their discretion, may direct wholly owned subsidiarythe appointment of Parentdifferent independent auditors at any time during our fiscal year if they determine that such a change would be in the best interests of XBP and its stockholders.
Vote Required
The affirmative vote of the holders of a majority of the voting power of the shares of Common Stock present by virtual attendance or represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to ratify the selection of UHY LLP.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE THEIR SHARES “FOR” THE RATIFICATION OF THE APPOINTMENT OF UHY LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On December 15, 2023, the Audit Committee approved the appointment of UHY LLP as the Company’s independent registered public accounting firm to audit our consolidated financial statements for the year ended December 31, 2023, effective December 20, 2023, and dismissed WithumSmith+Brown, PC (“XBP Europe”Withum”) as the Company’s independent registered public accounting firm, effective December 20, 2023. Withum has served as CFVIII’s auditor since 2020.
Withum’s reports on the Company’s consolidated financial statements issued with respect to fiscal years ended December 31, 2022 and December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that such audit report contained an explanatory paragraph in which Withum expressed substantial doubt as to CFVIII’s ability to continue as a going concern if it did not complete a business combination by September 16, 2023.
During the years ended December 31, 2022 and December 31, 2021, and during the subsequent interim period through December 15, 2023, (i) there were no disagreements (within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions thereto) between the Company and Withum on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to Withum’s satisfaction, would have caused Withum to make reference to the subject matter of the disagreements in connection with its reports on the Company’s consolidated financial statements for such years, and (ii) there were no reportable events (as defined by Item 304(a)(1)(v) of Regulation S-K). For more information aboutDuring the XBP Europe Business Combination, seeperiod from April 17, 2020 (inception) through December 31, 2022 and the subsequent interim period through the date of Withum’s dismissal, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act).
During the years ended December 31, 2022 and December 31, 2021, and during the subsequent interim period through December 15, 2023, neither the Company nor anyone on its behalf consulted with UHY regarding (i) the
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application of accounting principles to a specified transaction, either completed or proposed, of the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company that UHY concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instruction thereto), or (iii) any reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
We provided Withum with a copy of the foregoing disclosures and received a letter from Withum addressed to the SEC stating that it agreed with the statements made by us set forth above. A copy of Withum’s letter, dated December 20, 2023, is filed as Exhibit 16.1 to our Current Report on Form 8-KForm-8-K, filed with the SEC on October 11, 2022December 21, 2023.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table summarizes the aggregate fees for professional audit services and other services rendered by UHY LLP to us (including Legacy XBP) for the years ended December 31, 2023 and 2022.
As an emerging growth company and a smaller reporting company, we are exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and as a result, our audit fees are significantly lower than if we were required to provide an auditor attestation under Section 404(b). Depending on our public float as of June 30, 2024, we may become subject to the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act for the fiscal year ended December 31, 2024, which will require us to incur significant additional costs and to re-assess our required audit services for the fiscal year ended December 31, 2024 with our independent registered public accounting firm.
Independent Registered Public Accounting Firm’s Fees and Services
As described above, UHY was appointed as our independent registered accounting firm in December 2023, upon the dismissal of Withum. UHY has audited the financial statements of Legacy XBP since 2022. The fees of UHY presented below are not representative of the fees to be billed by UHY for XBP as a public company, but are presented solely to provide our stockholders with a basis to understand our historical relationship with UHY.
Moreover, as an emerging growth company and a smaller reporting company, we are exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and as a result, our audit fees are significantly lower than if we were required to provide an auditor attestation under Section 404(b). Depending on our public float as of June 30, 2024, we may become subject to the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act for the fiscal year ended December 31, 2024, which will require us to incur significant additional costs and to re-assess our required audit services for the fiscal year ended December 31, 2024 with our independent registered public accounting firm.
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The following table presents the aggregate fees billed by UHY (including Legacy XBP, in the case of UHY), for the fiscal years ended December 31, 2023 and 2022. These fees are categorized as audit fees, audit-related fees, tax fees and all other fees. The nature of the services provided in each category is described following the table.
| | | | | | |
| | Year Ended December 31, | ||||
|
| 2023 |
| 2022 | ||
Audit Fees(1) | | $ | 1,242,686 | | $ | 2,182,665 |
Audit-Related Fees | | | — | | | — |
Audit-Related Fees | | | — | | | — |
All Other Fees | | | — | | | — |
Total fees | | $ | 1,242,686 | | $ | 2,182,665 |
1 Includes fees incurred on the annual audit, quarterly reviews and reviews of registration and proxy statements
Pre-Approval Policies and Procedures of the Audit Committee
Our Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm, the scope of services provided by our independent registered public accounting firm and the fees for the services to be performed. These services may include audit services, audit-related services, tax services and other services. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Our independent registered public accounting firm and management are required to periodically report to the audit committee regarding the extent of services provided by our independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date.
Prior to the Business Combination, all of the services listed in the table above provided by UHY were approved by Exela and Legacy XBP, respectively, in accordance with each company’s policies then in effect.
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The Audit Committee currently consists of three independent directors, each of whom has been determined by the Board to meet the heightened independence criteria applicable to Audit Committee members and to satisfy the financial literacy requirements of the Nasdaq Listing Rules and the applicable rules of the SEC. The Audit Committee is responsible, under its charter, for oversight of our independent registered public accounting firm, which reports directly to the Audit Committee. The Audit Committee has the authority to retain and terminate the independent registered public accounting firm, to review the scope and terms of the audit and to approve the fees to be charged. The Audit Committee monitors our system of internal control over financial reporting, and management’s certifications as to disclosure controls and procedures and internal controls for financial reporting. Our management and independent registered public accounting firm, not the Audit Committee, are responsible for the planning and conduct of the audit of our consolidated financial statements and determining that the consolidated financial statements are complete and accurate and prepared in accordance with U.S. generally accepted accounting principles.
The Audit Committee has met and held discussions with management and our definitive proxy statementindependent registered public accounting firm (with and without management) and has reviewed and discussed the audited consolidated financial statements and related internal control over financial reporting with management and our independent registered public accounting firm.
The Audit Committee has also discussed with our independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees.
Our independent registered public accounting firm also provided the Audit Committee with the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with our independent registered public accounting firm that firm’s independence.
Based upon the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for filing with the SEC.
Respectfully submitted by the members of the Audit Committee of the Board of Directors:
James G. Reynolds (Chair)
J. Coley Clark
Martin P. Akins
The information contained in the following report of our Audit Committee is not considered to be “soliciting material,” “filed” or incorporated by reference in any past or future filing by us under the Exchange Act or the Securities Act unless and only to the extent that we specifically incorporate it by reference.
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PROPOSAL 3 — APPROVAL OF THE XBP EUROPE HOLDINGS, INC.
2024 STOCK INCENTIVE PLAN
The following is a summary of certain material features of the 2024 Plan. The following summary is not a complete description of all provisions of the 2024 Plan and is qualified in its entirety by reference to the 2024 Plan, the final version of which we filed on August 4, 2023is attached to this Proxy Statement as Annex A.
Purpose. The purpose of the 2024 Plan is to give us the ability to attract, retain, motivate and reward certain officers, employees, directors and consultants and to provide a means whereby officers, employees, directors and/or consultants can acquire and maintain ownership of our Common Stock or be paid incentive compensation measured by reference to the value of our Common Stock, thereby strengthening their commitment to our welfare and that of our affiliates and promoting an identity of interest between our stockholders and these persons and encouraging such eligible persons to expend maximum effort in the creation of stockholder value.
Plan Administration. The 2024 Plan will be administered by our Compensation Committee. Our Compensation Committee will have the authority, among other things, to select participants, grant awards, determine types of awards and terms and conditions of awards for participants, prescribe rules and regulations for the administration of the plan and make all decisions and determinations as deemed necessary or advisable for the administration of the 2024 Plan. Our Compensation Committee may delegate certain of its authority as it deems appropriate, pursuant to the terms of the 2024 Plan and to the extent permitted by applicable law, to our officers or employees, although any award granted to any person who is not our employee or who is subject to Section 16 of the Exchange Act must be expressly approved by the Compensation Committee. Our Compensation Committee’s actions will be final, conclusive and binding.
Authorized Stock. A total of 5,520,270 shares of Common Stock will be reserved and available for issuance under the 2024 Plan, subject to adjustment in accordance with the terms of the 2024 Plan. The number of shares of Common Stock reserved and available for issuance under the 2024 Plan is subject to adjustment, as described below. The maximum number of shares of Common Stock that may be issued in respect of incentive stock options will be 5,520,270. Common Stock issued under the 2024 Plan may consist of authorized but unissued stock or previously issued Common Stock. Common Stock underlying awards that are settled in cash, expire or are canceled, forfeited, or otherwise terminated without delivery to a participant will again be available for issuance under the 2024 Plan. Common Stock withheld or surrendered in connection with the approvalpayment of an exercise price of an award or to satisfy tax withholding will not again become available for issuance under the 2024 Plan.
Individual Limits. The maximum value of any awards granted to any non-employee director in any one calendar year, taken together with any cash fees paid to such non-employee director during such calendar year, may not exceed $750,000 (determined based on the grant date fair value of the XBP Europe Business Combination (the “XBP Europe Proxy Statement”)award).
Types of Awards. The Company has calledtypes of awards that may be available under the 2024 Plan are described below. All of the awards described below will be subject to the terms and conditions determined by our Compensation Committee in its sole discretion, subject to certain limitations provided in the 2024 Plan. Each award granted under the 2024 Plan will be evidenced by an award agreement, which will govern that award’s terms and conditions.
Minimum Vesting Period. Except as provided below, no award (other than any Performance Cash Award) granted under the 2024 Plan may vest over a specialperiod that is less than one year from the date of grant. The foregoing minimum vesting period will not apply: (i) to awards granted in payment of or exchange for an equivalent amount of salary, bonus or other earned cash compensation (including Performance Shares); (ii) to a substitute award that does not reduce the vesting period of the award being replaced or assumed; (iii) to awards involving an aggregate number of common shares not in excess of 5% of the aggregate number of common shares that may be delivered in connection with awards under the 2024 Plan (subject to adjustment as described below under “— Adjustments”); (iv) in connection with certain qualifying terminations that result in accelerated vesting of an Award in accordance with the terms of any grant or other similar agreement; or (v) to annual awards granted to non-employee directors that vest on the first regularly scheduled annual meeting of itsour stockholders to approvefollowing the XBP Europe Business Combination, which will be held on August 24, 2023 (referred to herein as the “Business Combination Special Meeting”). While the Board believes that we may be able to consummate the XBP Europe Business Combination before September 16, 2023, the Board believes that in order to ensure thatapplicable date of grant.
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Non-qualified Stock Options. A non-qualified stock option is an option that is not intended to meet the qualifications of an incentive stock option, as described below. An award of a non-qualified stock option grants a participant the right to purchase a certain number of shares of our Common Stock during a specified term in the future, or upon the achievement of performance or other conditions, at an exercise price set by our Compensation Committee on the grant date. The term of a non-qualified stock option will be set by our Compensation Committee but may not exceed 10 years from the grant date. The exercise price may be paid using any of the following payment methods: (i) immediately available funds in U.S. dollars or by certified or bank cashier’s check, (ii) by delivery of stock having a value equal to the exercise price, (iii) a broker assisted cashless exercise, or (iv) by any other means approved by our Compensation Committee. The 2024 Plan provides that unless otherwise specifically determined by the Compensation Committee, vesting of non-qualified stock options will be suspended during the period of any approved leave of absence by a participant following which the participant has a right to reinstatement and will resume upon such participant’s return to employment. The 2024 Plan also provides that participants terminated for “cause” (as such term is defined in the 2024 Plan) will forfeit all of their non-qualified stock options, whether or not vested. Participants terminated for any other reason will forfeit their unvested non-qualified stock options, retain their vested non-qualified stock options, and will have one year (in the case of a termination by reason of death or disability) or 90 days (in all other cases) following their termination date to exercise their vested non-qualified stock options, unless such non-qualified stock option expires sooner. The 2024 Plan authorizes our Compensation Committee to provide for different treatment of non-qualified stock options upon termination than that described above, as determined in its discretion.
Incentive Stock Options. An incentive stock option is a stock option that meets the requirements of Section 422 of the Code. Incentive stock options may be granted only to our employees or employees of certain of our subsidiaries and must have an exercise price of no less than 100% of the fair market value (or 110% with respect to a 10% stockholder) of a share of Common Stock on the grant date and a term of no more than 10 years (or 5 years with respect to a 10% stockholder). The aggregate fair market value, determined at the time of grant, of our Common Stock subject to incentive stock options that are exercisable for the first time by a participant during any calendar year may not exceed $ 100,000. The 2024 Plan provides that unless otherwise specifically determined by the Compensation Committee, vesting of incentive stock options will be suspended during the period of any approved leave of absence by a participant following which the participant has a right to reinstatement and will resume upon such participant’s return to employment. The 2024 Plan also provides that participants terminated for “cause” will forfeit all of their incentive stock options, whether or not vested. Participants terminated for any other reason will forfeit their unvested incentive stock options, retain their vested incentive stock options, and will have one year (in the case of a termination by reason of death or disability) or 90 days (in all other cases) following their termination date to exercise their vested incentive stock options, unless such incentive stock option expires sooner. The 2024 Plan authorizes our Compensation Committee to provide for different treatment of incentive stock options upon termination than that described above, as determined in its discretion.
Stock Appreciation Rights. A stock appreciation right entitles the participant to receive an amount equal to the difference between the fair market value of our Common Stock on the exercise date and the base price of the stock appreciation right that is set by our Compensation Committee on the grant date, multiplied by the number of shares of Common Stock subject to the stock appreciation right. The term of a stock appreciation right will be set by our Compensation Committee but may not exceed 10 years from the grant date. Payment to a participant upon the exercise of a stock appreciation right may be either in cash, stock or property as specified in the award agreement or as determined by our Compensation Committee. The 2024 Plan provides that unless otherwise specifically determined by the Compensation Committee, vesting of stock appreciation rights will be suspended during the period of any approved leave of absence by a participant following which the participant has a right to reinstatement and will resume upon such participant’s return to employment. The 2024 Plan also provides that participants terminated for “cause” will forfeit all of their stock appreciation rights, whether or not vested. Participants terminated for any other reason will forfeit their unvested stock appreciation rights, retain their vested stock appreciation rights, and will have one year (in the case of a termination by reason of death or disability) or 90 days (in all other cases) following their termination date to exercise their vested stock appreciation rights, unless such appreciation right expires sooner. The 2024 Plan authorizes our Compensation Committee to provide for different treatment of stock appreciation rights upon termination than that described above, as determined in its discretion.
Restricted Stock. A restricted stock award is an award of restricted Common Stock that does not vest until a specified period of time has elapsed, and/or upon the achievement of performance or other conditions determined by our
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Compensation Committee, and which will be forfeited if the conditions to vesting are not met. During the period that any restrictions apply, transfer of the restricted Common Stock is generally prohibited. Unless otherwise specified in their award agreement, participants generally have all of the rights of a stockholder as to the restricted Common Stock, including the right to vote such Common Stock, provided, that any cash or stock dividends with respect to the restricted Common Stock will be withheld by us and will be subject to forfeiture to the same degree as the restricted Common Stock to which such dividends relate. The 2024 Plan provides that unless otherwise specifically determined by the Compensation Committee, vesting of restricted stock awards will be suspended during the period of any approved leave of absence by a participant following which the participant has a right to reinstatement and will resume upon such participant’s return to employment. Except as otherwise provided by our Compensation Committee, in the event a participant is terminated for any reason, the vesting with respect to the participant’s restricted stock will cease, and as soon as practicable following the termination, we will repurchase all of such participant’s unvested restricted stock at a purchase price equal to the original purchase price paid for the restricted stock, or if the original purchase price is equal to $0, the unvested restricted stock will be forfeited by the participant to us for no consideration.
Restricted Stock Units. A restricted stock unit is an unfunded and unsecured obligation to issue Common Stock (or an equivalent cash amount) to the participant in the future. Restricted stock units become payable on terms and conditions determined by our Compensation Committee and will vest and be settled at such times in cash, Common Stock, or other specified property, as determined by our Compensation Committee. Participants have no rights of a stockholder as to the restricted stock units, including no voting rights or rights to dividends, until the underlying Common Stock is issued or becomes payable to the participant. The 2024 Plan provides that unless otherwise specifically determined by the Compensation Committee, vesting of restricted stock units will be suspended during the period of any approved leave of absence by a participant following which the participant has a right to reinstatement and will resume upon such participant’s return to employment. Except as otherwise provided by our Compensation Committee, in the event a participant is terminated for any reason, the vesting with respect to the participant’s restricted stock units will cease, each of the participant’s outstanding unvested restricted stock units will be forfeited for no consideration as of the date of such termination, and any stock remaining undelivered with respect to the participant’s vested restricted stock units will be delivered on the delivery date specified in the applicable award agreement.
Performance Awards. Under the 2024 Plan, our Compensation Committee may grant performance awards from time to time based on such terms and conditions as the Compensation Committee deems appropriate, consistent with the terms and purposes of the Plan. Performance Awards are awards the payment or vesting of which is subject to the achievement of specified “performance objectives” during a “performance period” by the Company, a subsidiary or subsidiaries or the participant individually. Performance Awards may be in the form of performance units, performance shares or a performance cash award as the Compensation Committee determines. Notwithstanding satisfaction of any completion of any performance objectives, the number of shares of Stock, cash or other benefits granted, issued, retainable and/or vested under a performance award on account of satisfaction of such performance objectives may be reduced by the compensation committee on the basis of such further considerations as the Committee, in its sole discretion, will determine.
Other Stock-Based Compensation. Under the 2024 Plan, our Compensation Committee may grant other types of equity-based awards subject to such terms and conditions that our Compensation Committee may determine. Such awards may include the grant of dividend equivalents, which generally entitle the participant to receive amounts equal to the dividends that are paid on the stock underlying the award.
Adjustments. The aggregate number of shares of Common Stock reserved and available for issuance under the 2024 Plan, the individual limitations, the number of shares of Common Stock covered by each outstanding award, and the price per share of Common Stock underlying each outstanding award will be equitably and proportionally adjusted or substituted, as determined by our Compensation Committee in its sole discretion, as to the number, price or kind of stock or other consideration subject to such awards in connection with stock dividends, extraordinary cash dividends, stock splits, reverse stock splits, recapitalizations, reorganizations, mergers, amalgamations, consolidations, combinations, exchanges, or other relevant changes in our capitalization affecting our Common Stock or our capital structure which occurs after the date of grant of any award, in connection with any extraordinary dividend declared and paid in respect of stock or in the event of any change in applicable law or circumstances that results in or could result in, as determined by
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the Compensation Committee in its sole discretion, any substantial dilution or enlargement of the rights intended to be granted to, or available for, participants in the 2024 Plan.
Corporate Events. In the event of a merger, amalgamation, or consolidation involving us in which we are ablenot the surviving corporation or in which we are the surviving corporation but the holders of our Common Stock receive securities of another corporation or other property or cash, a “change in control” (as defined in the 2024 Plan), or a reorganization, dissolution, or liquidation of us, our Compensation Committee may, in its discretion, provide for the assumption or substitution of outstanding awards, accelerate the vesting of outstanding awards, cash-out outstanding awards or replace outstanding awards with a cash incentive program that preserves the value of the awards so replaced. With respect to consummateany award that is assumed or substituted in connection with a “change in control,” except as provided in any agreement between the participant and the Company, the vesting, payment, purchase or distribution of such award will not be accelerated by reason of the “change in control” for any participant unless the participant’s employment is involuntarily terminated as a result of the “change in control” during the two-year period commencing on the “change in control.”
Transferability. Awards under the 2024 Plan may not be sold, transferred, pledged, or assigned other than by will or by the applicable laws of descent and distribution, unless (for awards other than incentive stock options) otherwise provided in an award agreement or determined by our Compensation Committee.
Amendment. Our Board or our Compensation Committee may amend the 2024 Plan or outstanding awards at any time. Our stockholders must approve any amendment if their approval is required pursuant to applicable law or the applicable rules of each national securities exchange on which our Common Stock is traded. No amendment to the 2024 Plan or outstanding awards which materially impairs the right of a participant is permitted unless the participant consents in writing.
Termination. The 2024 Plan will terminate on the ten year anniversary of the date on which the 2024 Plan becomes effective, and incentive stock options may not be granted following the earlier of the tenth anniversary of (i) the date the 2024 Plan was adopted by our Board and (ii) the date our stockholders first approved the 2024 Plan by written consent. In addition, our Board or our Compensation Committee may suspend or terminate the 2024 Plan at any time. Following any such suspension or termination, the 2024 Plan will remain in effect to govern any then outstanding awards until such awards are forfeited, terminated or otherwise cancelled or earned, exercised, settled or otherwise paid out, in accordance with their terms.
Cancellation and Rescission of Awards. All unexpired, unpaid or deferred awards granted under the 2024 Plan may be cancelled, rescinded, suspended, withheld or otherwise limited or restricted if a participant engages in detrimental activity. For purposes of the 2024 Plan, “detrimental activity” means any of the following: (i) rendering services for any organization that presents a conflict of interest or engages directly or indirectly in any business that is competitive with the Company or any of its direct or indirect subsidiaries; (ii) disclosing “confidential information” to anyone outside the Company or any of its direct or indirect subsidiaries without prior written authorization from the participant’s employer; (iii) failing or refusing to disclose promptly and to assign to the participant’s employer all right, title and interest in any invention or idea, patentable or not, made or conceived by the participant during employment or failing or refusing to do anything reasonably necessary to enable the Company or any of its direct or indirect subsidiaries to secure a patent where appropriate; (iv) activity that results in the participant’s termination for “cause”; (v) violating any rules, policies, procedures or guidelines of the participant’s employer; (iv) attempting to, directly or indirectly, solicit any employee of the Company or any of its direct or indirect subsidiaries or any current or prospective customer, supplier or partner of the Company or any of its direct or indirect subsidiaries; (vii) the participant being convicted of, or entering a guilty plea with respect to, a crime, whether or not connected with the employer; or (viii) any other conduct or act determined to be injurious, detrimental or prejudicial to any interest of the Company or any of its direct or indirect subsidiaries. If a participant fails to comply with the “detrimental activity” provisions of the 2024 Plan during employment and during the rescission period designated by the Board, then any exercise, payment or delivery may be rescinded within two years after such exercise, payment or delivery and the Company can set-off against the amount of any such gain any amount then- owed to the participant.
Clawback; Sub-Plans. All awards under the 2024 Plan will be subject to any incentive compensation clawback or recoupment policy currently in effect, or as may be adopted by our Board (or any committee or subcommittee thereof),
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including the XBP Europe Holdings, Inc. Policy for the Recovery of Erroneously Awarded Compensation, and, in each case, as may be amended from time to time. In addition, our Compensation Committee may adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the 2024 Plan by individuals who are non -U.S. nationals or are primarily employed or providing services outside the U.S., and may modify the terms of any awards granted to such participants in a manner deemed by our Compensation Committee to be necessary or appropriate in order that such awards conform with the laws of the country or countries where such participants are located.
No-Repricing of Awards. No awards under the 2024 Plan may be repriced without stockholder approval. For purposes of the 2024 Plan, “repricing” means any of the following (or any other action that has the same effect as any of the following): (i) changing the terms of the award to lower its exercise price or base price (other than on account of capital adjustments resulting from stock splits), (ii) any other action that is treated as a repricing under GAAP, and (iii) repurchasing for cash or cancelling an award in exchange for another award at a time when its exercise price or base price is greater than the fair market value of the underlying stock. Certain U.S. Federal Income Tax Consequences
Certain U.S. Federal Income Tax Consequences
The following is a brief discussion of certain U.S. federal income tax consequences for awards granted under the 2024 Plan. The 2024 Plan is not subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended, and it is not, nor is it intended to be, qualified under Section 401(a) of the Code. This discussion is based on current law, is not intended to constitute tax advice, and does not address all aspects of U.S. federal income taxation that may be relevant to a particular participant in light of his or her personal circumstances and does not describe foreign, state, or local tax consequences, which may be substantially different. Holders of awards under the 2024 Plan are encouraged to consult with their own tax advisors.
Non-Qualified Stock Options and Stock Appreciation Rights. With respect to non-qualified stock options and stock appreciation rights, (i) no income is realized by a participant at the time the award is granted; (ii) generally, at exercise, ordinary income is realized by the participant in an amount equal to the difference between the exercise or base price paid for the shares and the fair market value of the shares on the date of exercise (or, in the case of a cash-settled stock appreciation right, the cash received), and the participant’s employer is generally entitled to a tax deduction in the same amount subject to applicable tax withholding requirements; and (iii) upon a subsequent sale of the stock received on exercise, appreciation (or depreciation) after the date of exercise is treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held, and no deduction will be allowed to such participant’s employer.
Incentive Stock Options. No income is realized by a participant upon the grant or exercise of an incentive stock option, however, such participant will generally be required to include the excess of the fair market value of the shares at exercise over the exercise price in his or her alternative minimum taxable income. If shares are issued to a participant pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such participant within two years after the date of grant or within one year after the transfer of such shares to such participant, then (i) upon sale of such shares, any amount realized in excess of the exercise price will be taxed to such participant as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) no deduction will be allowed to the participant’s employer for federal income tax purposes.
If shares acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of either holding period described above, generally (i) the participant will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at exercise (or, if less, the amount realized on the disposition of such shares) over the exercise price paid for such shares and (ii) the participant’s employer will generally be entitled to deduct such amount for federal income tax purposes. Any further gain (or loss) realized by the participant will be taxed as short-term or long-term capital gain (or loss), as the case may be, and will not result in any deduction by the employer.
Subject to certain exceptions for disability or death, if an incentive stock option is exercised more than three months following termination of employment, the exercise of the stock option will generally be taxed as the exercise of a non-qualified stock option.
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Other Stock-Based Awards. The tax effects related to other stock-based awards under the 2024 Plan are dependent upon the structure of the particular award.
The approval of this proposal requires the affirmative vote of holders of a majority in voting power of the outstanding shares of Common Stock present virtually or by proxy and entitled to vote on this proposal. Abstentions will have the effect of votes against the proposal. “Broker non-votes,” if any, will not have any effect on the adoption of the proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE THEIR SHARES “FOR” THE APPROVAL OF THE XBP EUROPE HOLDINGS, INC. 2024 STOCK INCENTIVE PLAN.
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Emerging Growth Company Status
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups (“JOBS”) Act. As an emerging growth company, we are exempt from certain requirements related to executive compensation, including the requirements to hold a non binding advisory stockholder vote on named executive officer compensation, to provide information relating to the ratio of the annual total compensation of our chief executive officer to the median of the annual total compensation of all of our employees (other than our chief executive officer), and to provide information relating to the relationship between the executive compensation actually paid to our named executive officers (“NEOs”) and our financial performance, each as required by the Investor Protection and Securities Reform Act of 2010, which is part of the Dodd-Frank Act.
Compensation of Our Named Executive Officers
The following table sets forth information regarding the compensation awarded to, earned by, or paid to certain of the Company’s executive officers. As an emerging growth company, the Company has opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies” as such term is defined in the rules promulgated under the Securities Act, which require compensation disclosure for its principal executive officer and its two other most highly compensated executive officers. Throughout this prospectus, these three officers are referred to as the Company’s “named executive officers.”
The compensation reported in this summary compensation table below is not necessarily indicative of how the Company will compensate its named executive officers in the future. We expect that we will continue to review, evaluate and modify our compensation framework and our compensation program could vary significantly from our historical practices.
The following table sets forth compensation information for our 2023 named executive officers. Prior to the consummation of the Business Combination on November 29, 2023, the Legacy XBP was a wholly-owned indirect subsidiary of Exela that constituted the entirety of Exela’s European business. During 2023, Messrs. Jonovic and Avramovic spent approximately 36% and 83% of their working time on our business (which takes into account the period after consummation of the Business Combination, when they spent all of their working time on our business), and the remainder of their working time during the year on other Exela business matters. Consequently, we have pro-rated the compensation paid to each of Messrs. Jonovic and Avramovic for 2023 for purposes of the Summary Compensation Table to reflect only the approximate portions of their compensation that was earned for work devoted to our business. Messrs. Robu and Jones spent substantially all of their work time devoted to our business in case2023, and accordingly, no pro-ration has been applied to their compensation.
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| | | | | | | | | | | | | | |
Name and Principal Position(1) |
| Fiscal |
| Salary |
| | Bonus |
| | All Other |
| | Total | |
Andrej Jonovic | | 2023 | | $ | 152,100 | | $ | 0 | | $ | 292 | | $ | 152,392 |
Vitalie Robu | | 2023 | | $ | 288,465 | | $ | 0 | | $ | 42,364 | | $ | 330,829 |
President, EMEA | | 2022 | | $ | 285,643 | | $ | 228,475 | | $ | 14,977 | | $ | 529,095 |
Dejan Avramovic | | 2023 | | $ | 248,336 | | $ | 0 | | $ | 3,580 | | $ | 251,916 |
David Jones(4) | | 2023 | | $ | 216,563 | | $ | 35,036 | | $ | 118,115 | | $ | 369,714 |
Former Senior Vice President, Business Strategy, Sales and Marketing | | 2022 | | $ | 210,200 | | $ | 47,676 | | $ | 22,870 | | $ | 280,746 |
1. | With respect to Mr. Robu, the salary, bonus and other compensation amounts have been converted from Great British pounds to U.S. dollars using the average end of month conversion ratio for 2023 of 1.00 GBP to 1.247 USD. With respect to Mr. Jones, the salary and other compensation amounts have been converted from Euros to U.S. dollars using the average end of month conversion ratio for 2023 of 1.00 EUR to 1.082 USD. No bonus has been awarded to any of Messrs. Jonovic, Robu or Avramovic with respect to 2023 performance as of the date of this prospectus, although a discretionary bonus may be paid in the future. Mr. Jones’ bonus constitutes a commission-based amount determined based upon the performance of the Company’s sales team for 2023. |
2. | The amounts reported in this column for 2023 include: (i) for Mr. Jonovic $292 for life insurance coverage, (ii) for Mr. Robu, $2,221 for the cost of his private medical insurance plan in the United Kingdom, $22,751 for a company car, contributions of $17,308 to a UK-based, defined pension plan and $84 for travel insurance; (iii) for Mr. Avramovic, $3,580 for life and medical insurance coverage; and (iv) for Mr. Jones, $1,949 for the cost of his private medical insurance plan in the Netherlands, contributions of $7,219 toward holiday pay and in connection with Mr. Jones’ termination of employment, a one-time payment of $108,947 comprised of statutory transition payment of $54,141, contributions towards his medical insurance coverage of $10,106, holiday pay of $39,323 and commissions of $5,377. |
3. | The compensation amounts reflected in the Summary Compensation Table are not necessarily reflective of the amounts of compensation that were reflected in our financial statements for the 2023 fiscal year, primarily due to the fact that such compensation for Messrs. Jonovic and Avramovic was paid by one or more subsidiaries of Exela prior to November 29, 2023, the date of consummation of the Business Combination. |
4. | Mr. Jones and Exela Technologies B.V. mutually agreed to terminate his employment agreement, effective December 31, 2023. |
Narrative to Summary Compensation Table
Executive Employment Agreements
The compensation paid to Mr. Robu reflected in the closing extends past September 16,summary compensation table was provided pursuant to an employment agreement entered into with HOV Global Services Limited, dated April 23, 2010, pursuant to which Mr. Robu serves as President, EMEA. The employment agreement provides for an indefinite term. During 2023, weMr. Robu received an annual base salary of $285,643, and pursuant to the employment agreement, is entitled to annual increases in his base salary by the greater of (i) ten percent (10%) of his base salary (“Adjustment Percentage”), and (ii) the annual consumer price index of inflation published by the Office for National Statistics of the United Kingdom as of the end of the monthly period following the respective commencement date anniversary, provided that the Company may in its absolute discretion change the Adjustment Percentage, provided, however that the Adjustment Percentage may not be less than the consumer price index. He also receives an annual bonus determined at the discretion of the board of directors of Exela Technologies,
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currently with a target of 100% of his base salary. The employment agreement also provides that Mr. Robu will needbe eligible to participate in the HOV Global Services Limited’s private medical health insurance, travel insurance, and, at the expense of the HOV Global Services Limited, a life insurance plan. The severance provisions contained in Mr. Robu’s employment agreement are described below under “— Potential Payments Upon Termination or Change in Control.” Mr. Robu’s employment agreement also contains restrictive covenants, including customary confidentiality and invention assignment covenants, as well as a non-competition covenant that applies during the term of employment and a covenant not to make use of the Company’s confidential information for personal purposes or on behalf of any other company during the term of employment and at all times thereafter.
David W. Jones. Exela Technologies B.V., an indirect wholly owned subsidiary of the Company, was party to an employment agreement with Mr. Jones, dated January 2, 2019, pursuant to which he served as Senior Vice President, Business Strategy, Sales and Marketing. Mr. Jones’ employment with the Company was terminated on December 31, 2023 by mutual agreement of Exela Technologies B.V. and himself. Under the employment agreement, Mr. Jones was entitled to an annual base salary of $210,200, and pursuant to the employment agreement, a holiday allowance to be paid on June 1 of each year in an amount equal to eight percent (8%) of his annual base salary, and was entitled to participate in a bonus plan, commission, or incentive scheme based on individually-assigned key performance indicators. The employment agreement also provided that Mr. Jones was entitled to a stipend for the cost of his private medical insurance and a travel allowance of $4,162.
The terms of a separation agreement entered into by Exela Technologies B.V. and Mr. Jones are described below under “— Potential Payments Upon Termination or Change in Control.” Mr. Jones’ employment agreement contained restrictive covenants, including customary confidentiality and invention assignment covenants, as well as a non-competition covenant that applies during the term of employment and for a period of 12 months thereafter, and a non-solicitation clause that applies during the term of employment and for a period of 12 months thereafter.
Neither Messrs. Jonovic or Avramovic are parties to an employment agreement with us or an Exela affiliated entity.
Short-Term Incentives
None of Messrs. Jonovic, Robu or Avramovic have been awarded a bonus with respect to 2023 performance, although a discretionary bonus may be paid in the future. Mr. Jones earned commissions based on the sales performance of XBP Europe’s sales team.
Stock Plans, Health and Welfare Plans, and Retirement Plans Health and Welfare Plans.
Our named executive officers are generally eligible to participate in the employee benefit plans generally offered to those employees based in the same country. Mr. Robu is entitled to participate in the private medical insurance and life insurance made available to those employees in the United Kingdom. Mr. Jones was eligible to participate in the employee benefit plans that Exela Technologies B.V. offers to its employees generally, including a private insurance stipend for those employees in the Netherlands. We intend to enter into an arrangement pursuant to which Messrs. Jonovic and Avramovic, as our sole employees in the United States, will be entitled to employee benefits, including health insurance, which may include providing a stipend to such executives to obtain the Extension. Therefore, the Board has determined that it istheir own coverage.
Retirement Plans.
The Company’s named executive officers are generally eligible to participate in the best interestsretirement plans generally offered to those employees based in the same country. Mr. Robu is entitled to participate in the pension scheme made available to those employees in the United Kingdom. With respect to those employees in the Netherlands, Exela Technologies B.V. does not offer any collective or individual pension scheme to its employees. Messrs. Jonovic and Avramovic do not participate in the retirement plans offered by the Company.
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Outstanding Equity-Based Awards at Fiscal Year-End
None of our stockholders to extend the date by which we must consummate a Business Combination to the Extended Date in order for our stockholders to consider the XBP Europe Business Combination. However, should the closingnamed executive officers held any outstanding equity awards of the Company at December 31, 2023.
Potential Payments Upon Termination or Change in Control
The following summaries describe the potential payments and benefits that the Company would provide in connection with a termination of employment and/or a change in control, in each case, as of December 31, 2023, the last day of XBP Europe Business Combination occur before September 16,Europe’s 2023 then wefiscal year.
Vitalie Robu. Pursuant to Mr. Robu’s employment agreement with HOV Global Services Limited, a subsidiary of the Company, if Mr. Robu is terminated other than for gross misconduct or material breach of the terms of his employment agreement (as further detailed in Mr. Robu’s employment agreement), in addition to any statutory entitlements, Mr. Robu will abandon our effortsbe entitled to implementsix months’ prior notice or payment of his base salary in lieu thereof, payable in the Extension.form of salary continuation payments.
David W. Jones. In connection with the Extension Amendment Proposal, public stockholders may elect (the “Election”) to redeem their Public Shares fortermination of Mr. Jones’ employment, effective December 31, 2023, Mr. Jones and Exela Technologies B.V., a per-share price, payable in cash, equal to the aggregate amount then on deposit in our trust account (the “Trust Account”), including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares, regardless of whether such public stockholders vote on the Extension Amendment Proposal. If the Extension Amendment Proposal is approved by the requisite vote of stockholders, the remaining holders of Public Shares will retain their right to redeem their Public Shares when the XBP Europe Business Combination is submitted to the stockholders, subject to any limitations set forth in the Charter as amended by the Extension Amendment. In addition, public stockholders who do not make the Election will be entitled to have their Public Shares redeemed for cash if we have not completed a Business Combination by the Extended Date. Our sponsor, CFAC Holdings VIII, LLC (the “Sponsor”), owns 1,228,000 shares of Class B common stocksubsidiary of the Company entered into a Termination/Amicable Settlement Agreement, pursuant to which Mr. Jones is expected to receive a one-time payment of €50,000, subject to withholding of any applicable (wage and/or income) taxes and/or the employee part of social security contributions (if any) or other mandatory employee contributions (if any), plus the value of accrued and unused vacation, within one month after the effective date of termination, in exchange for a customary release of claims. Under the Settlement Agreement, Mr. Jones will remain bound by the post-termination provisions of his employment agreement with Exela Technologies B.V dated January 2, 2019, including customary confidentiality and invention assignment covenants, as well as a non-competition covenant and a non-solicitation clause.
Our Compensation Committee, working with its independent compensation consultant, is in the process of developing compensation arrangements for our executive officers. This includes establishing, with Board approval, an annual incentive plan, an equity compensation plan (to also be subject to stockholder approval), and a long-term incentive plan pursuant to which equity awards would be made.
The Committee established annual salaries for each of Messrs. Jonovic, Robu and Avramovic, in the amount of $552,000, $434,000 and $399,000, which is subject to ratification of the Board. Additionally, the Committee has proposed annual incentive awards for approval by the Board for Messrs. Jonovic, Robu and Avramovic in the amount of $474,000, $275,000 and $236,000. As of the date of this prospectus, neither the annual incentive plan itself nor performance metrics for 2024 fiscal year have been proposed by the Compensation Committee or adopted.
The following table sets forth the name, age, and position of each of our executive officers as of the Record Date:
Name | Age | Positions Held |
Par Chadha * | 69 | Executive Chairman |
Andrej Jonovic * | 43 | Chief Executive Officer |
Vitalie Robu | 52 | President |
Dejan Avramovic | 40 | Chief Financial Officer |
* | Biographical information about Messrs. Chadha and Jonovic is provided above in the section entitled “Proposal No. 1 — Election of Directors.” |
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Vitalie Robu has served as the President of the Company since the consummation of the Business Combination. Previously, Mr. Robu served as the President of the EMEA region of Exela from January 2019 until November 2023 and served as Chief Operating Officer of the EMEA region since the Novitex Business Combination until January 2019. As President of the Company, Mr. Robu is responsible for all sales, operations and business strategy functions across the EMEA region. Mr. Robu specializes in transaction processing services, technology products, and software solutions, and has over 25 years of international management experience in the private and public sectors. Prior to the Novitex Business Combination, he served as Senior Vice President, Operations for the European region of SourceHOV from 2014. From 2010 to 2014, Mr. Robu held the position of President and Executive Director of DataForce UK, a business process outsourcing and software provider that was part of SourceHOV. Prior to joining the SourceHOV group, Mr. Robu served as Manager of Investment and Insurance Products for Citibank EMEA in London from 2007 to 2010. Mr. Robu has degrees in International Relations from the National School for Political Studies, Bucharest and Physics from the State University of Moldova, and earned an MBA from IMD — International Institute for Management Development, Lausanne.
Dejan Avramovic has served as Chief Financial Officer of the Company since the consummation of the Business Combination. Mr. Avramovic is responsible for finance, accounting, financial reporting, internal controls and investor relations. Previously, Mr. Avramovic served in various finance positions continuously since joining affiliates of Exela in May 2017, including most recently as Senior Vice President, Global Finance, from July 2019 until November 2023. Mr. Avramovic’s prior experience includes eleven years of public company audit and transaction advisory services at Deloitte & Touche LLP, a global accounting and advisory firm. Mr. Avramovic holds an undergraduate degree in accounting from Chicago State University and an M.B.A. degree from the University of Chicago Booth School of Business. Mr. Avramovic is a registered Certified Public Accountant, however, the license is currently inactive.
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OWNERSHIP OF EQUITY SECURITIES
Principal Holders of Common Stock
The following table sets forth information known to the Company regarding the beneficial ownership of the Common Stock as of April 17, 2024, by:
● | each person or “group” who is known by the Company to be the beneficial owner of more than 5% of the issued and outstanding Common Stock; |
● | each of the Company’s named executive officers and directors; and |
● | all current executive officers and directors of the Company, as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days.
This table is based upon information supplied by officers, directors and principal stockholders and Schedule 13D and Forms 3 and 4 filed with the SEC. Unless otherwise indicated, the Company believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them. The beneficial ownership percentages of Common Stock of the Company are based on 30,166,102 shares of Common Stock issued and outstanding as of April 17, 2024.
| | | | |
Name and Address of Beneficial Owner |
| Number of |
| % of |
Directors and Executive Officers(1) | | | | |
Par Chadha | | — | | * |
Andrej Jonovic | | — | | * |
Vitalie Robu | | — | | * |
Dejan Avramovic | | — | | * |
David Jones | | — | | * |
J. Coley Clark | | — | | * |
James G. Reynolds | | — | | * |
Martin P. Akins | | — | | * |
All executive officers and directors as a group (seven individuals) | | — | | * |
| | | | |
5% or More Stockholders: | | | | |
Exela Technologies, Inc.(2) | | 21,802,689 | | 72.3 |
CFAC Holdings VIII, LLC(3) | | 6,449,404 | | 22.9 |
(*) | Represents holdings of less than one percent. |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o XBP Europe Holdings, Inc., 2701 E. Grauwyler Rd., Irving, TX |
(2) | Exela’s wholly owned subsidiary, BTC International, is the record holder of the shares. BTC International is a direct, wholly owned subsidiary of XCV-EMEA, LLC. ETI-XCV, LLC is the sole member of XCV-EMEA, LLC. ETI-XCV Holdings, LLC is the sole member of ETI-XCV, LLC. Exela Technologies, Inc. is the sole member of ETI-XCV Holdings, LLC, and, therefore, is deemed to have beneficial ownership of the shares of Common Stock held directly by BTC International. The business address of Exela is 2701 E. Grauwyler Rd., Irving, TX. |
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(3) | CFAC Holdings VIII, LLC (“Sponsor”) is the record holder of the shares. Cantor Fitzgerald, L.P., a Delaware limited partnership (“Cantor”) is the sole member of the Sponsor. CF Group Management, Inc., a New York corporation (“CFGM”) is the managing general partner of Cantor. Mr. Lutnick is the Chairman and Chief Executive Officer of CFGM, and is the trustee of CFGM’s sole stockholder. As such, each of Cantor, CFGM and Mr. Lutnick may be deemed to have beneficial ownership of the shares of Common Stock held directly by the Sponsor. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Includes 6,064,404 shares of common stock held by CFAC and 385,000 shares of common stock underlying an equal number of warrants to purchase shares of common stock held by CFAC which are exercisable within 60 days. The business address of the Sponsor is 110 East 59th Street, New York, NY 10022 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have adopted a written policy requiring that any related person transaction that would require disclosure under Item 404(a) of Regulation S-K under the Exchange Act be reviewed and approved by our audit committee or, if the audit committee is not able to review the transaction for any reason, the chairman of the audit committee. Compensation matters regarding our executive officers or directors are reviewed and approved by our compensation committee. All relevant factors with respect to a proposed related person transaction will be considered, and such a transaction will only be approved if it is in our and our stockholders’ best interests. Related persons include our major stockholders and directors and officers, as well as immediate family members of directors and officers.
XBP participated in the following transactions with related persons that are required to be reported under the SEC’s rules:
Founder Shares
On July 8, 2020, the Sponsor purchased 5,750,000 shares of CFVIII Class B common stock”) that were issued toCommon Stock for an aggregate price of $25,000 or approximately $0.004 per share. In March 2021, the Sponsor priortransferred 10,000 shares of CFVIII Class B Common Stock to each of Mr. Hochberg and Ms. Blechman, each an independent director of CFVIII. On March 11, 2021, CFVIII effected a 1.1-for-1 stock split. All share and per share amounts included in CFVIII’s financial statements elsewhere in this prospectus have been retroactively adjusted. On March 16, 2021, following consummation of the IPO, and 5,537,500the Sponsor returned to CFVIII, at no cost, an aggregate of 75,000 shares of CFVIII Class A common stock, consistingB Common Stock in connection with the underwriters’ decision not to exercise the remaining portion of (i) 5,000,000 sharestheir over-allotment option, all of which were converted fromcancelled, resulting in an aggregate of 6,250,000 shares of CFVIII Class B common stock into shares of Class A common stockCommon Stock outstanding on March 6, 2023 (such shares along with the shares of Class B common stocksuch date and held by the Sponsor and two of the independent directors of CFVIII.
On March 6, 2023, CFVIII issued 5,000,000 shares of CFVIII Class A Common Stock to the Company,Sponsor upon the “Founder Shares”)conversion of 5,000,000 shares of CFVIII Class B Common Stock held by the Sponsor.
Upon effectiveness of the Merger, the outstanding shares of CFVIII Class B Common Stock automatically converted into shares of CFVIII Class A Common Stock on a one-to-one basis (and immediately thereafter, upon effectiveness of the Charter, converted into shares of Common Stock (of the Company), also on a one-to-one basis. The Founder Shares are subject to certain transfer restrictions described herein. The Sponsor is a Delaware limited liability company. It is not controlled by, and (ii) 537,500 shares (such shares togetherdoes not have substantial ties to, any non-U.S. person.
Placement Units
Simultaneously with the 2,500 shares of Class A common stock held by an independent director of the Company, the “Private Placement Shares”) that were purchased by the Sponsor in a private placement which occurred simultaneously with the completionclosing of the IPO, (the “Private Placement”), and 135,000 warrants (the “Private Placement Warrants”) that were purchased by the Sponsor purchased 540,000 Placement Units at a price of $10.00 per Placement Unit ($5,400,000 in the Private Placement. In addition, twoaggregate). Each Placement Unit consists of our independent directors each own 11,000 Founder Shares, and our third independent director owns 2,500 Private Placement Shares. Asone share of the date of this Proxy Statement, the Sponsor currently holds 82.2% of the issued and outstanding shares of our common stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the proposals. We expect the Sponsor to vote any shares of our common stock held by it in favor of the proposals to be presented at the Special Meeting, and if the Sponsor votes its shares in favor of the proposals, no additional shares would be needed to approve the Extension Amendment Proposal or the Adjournment Proposal.
To exercise your redemption rights, you must demand that the Company redeem your Public Shares for a pro rata portion of the funds held in the Trust Account, and tender your shares to the Company’s transfer agent at least two business days prior to the Special Meeting (or September [ ], 2023). You may tender your shares by either delivering your share certificate to the transfer agent or by delivering your shares electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system. If you hold your shares in street name, you will need to instruct your bank, broker or other nominee to withdraw the shares from your account in order to exercise your redemption rights.
If you have elected to redeem your Public Shares in connection with the Business Combination Special Meeting and also desire to have such shares redeemed in connection with the Special Meeting, then you must separately elect to redeem your Public Shares in connection with the Special Meeting. If you do not take such additional action, your Public Shares will not be submitted for redemption in connection with the Special Meeting and will only be redeemed in connection with the Business Combination Special Meeting. If you elect to redeem such shares in connection with the Special Meeting, you will receive a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares.
The Sponsor, or a designee, will indemnify the Company for any reduction in the amount in the Trust Account as a result of any excise tax liabilities to the extent of such reduction that would otherwise be paid to any public stockholder exercising its rights with respect to any future redemption opportunities that are provided prior to or in connection with a Business Combination or in respect of a liquidation of the Company.
If the Extension Amendment Proposal is approved and the Board decides to implement the Extension, the Sponsor has agreed to loan to us (the “Extension Loan”) (i) $[ ] per month for each Public Share that remains outstanding and is not redeemed in connection with the Extension (such amount, the “Monthly Amount”); plus (ii) if the XBP Europe Business Combination is not consummated by October 16, 2023, the Monthly Amount for each
calendar month (commencing on October 17, 2023 and ending on the 16th day of each subsequent month), or portion thereof, that is needed by the Company to complete the XBP Europe Business Combination until March 16, 2024, or until such earlier time as the Board determines not to continue to extend, which amounts will be deposited into the Trust Account. For example, if we need until March 16, 2024 to complete the XBP Europe Business Combination, which would represent the full six calendar months, then the aggregate amount deposited per share will be $[ ] per share.
Assuming the Extension Amendment Proposal is approved and the Board decides to implement the Extension, the initial Monthly Amount will be deposited into the Trust Account promptly following the Special Meeting and no later than September 16, 2023. Each additional Monthly Amount following October 17, 2023 will be deposited into the Trust Account on or before the 23rd day of such calendar month.
The Extension Loan is conditioned upon the implementation of the Extension Amendment. The Extension Loan will not occur if the Extension Amendment is not approved or the Extension is not implemented. The amount of the Extension Loan will not bear interest and will be repayable by us to the Sponsor in equity upon consummation of the XBP Europe Business Combination or, if the XBP Europe Business Combination is not consummated, in cash with funds outside of the Trust Account. If the Sponsor advises us that it does not intend to make the Extension Loan, then the Extension Amendment Proposal and the Adjournment Proposal will not be put before the stockholders at the Special Meeting and, unless the Company can complete the XBP Europe Business Combination by September 16, 2023, we will dissolve and liquidate in accordance with the Charter. The Company will have the sole discretion whether to continue extending for each additional calendar month period until the Extended Date. If the Company determines not to extend for any calendar month following the funding of the initial Monthly Amount, the Sponsor’s obligation to make additional contributions will terminate and the Company will liquidate at the end of the applicable month.
For illustrative purposes, assuming the amount in the Trust Account at the time of the Special Meeting is the amount in the Trust Account as of June 30, 2023, or approximately $15.7 million, the Company currently estimates that the per-share price at which Public Shares would be redeemed from cash held in the Trust Account would have been approximately $10.93, subject to the Company’s right to withdraw interest from the Trust Account to pay taxes and any additional contributions to be made to the Trust Account pursuant to the Third Extension Loan. The closing price of theCFVIII Class A common stock on the Record Date (as defined below) as reported on the Nasdaq Capital Market was $10.97. The Company cannot assure stockholders that they will be able to sell their sharesCommon Stock and one-fourth of Class A common stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell their shares.
The Adjournment Proposal, if adopted, will allow the Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies. The Adjournment Proposal will only be presented to our stockholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal.
If the Extension Amendment Proposal is not approved and we do not consummate a Business Combination by September 16, 2023, as contemplated by the prospectus for the IPO dated March 11, 2021 and filed with the U.S. Securities and Exchange Commission on March 15, 2021 and in accordance with the Charter, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding Public Shares, which redemption will completely extinguish rights of public stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the Delaware General Corporation Law (the “DGCL”) to provide for claims of creditors and other requirements of applicable law. There will be no distribution from the Trust Account with respect to our warrants, which will expire worthless in the event of our winding up. In the event of a liquidation, the Sponsor and our officers and directors will not receive any monies held in the Trust Account as a result of their ownership of the Founder Shares or the Privateone Placement Shares.
Subject to the foregoing, the affirmative vote of at least 65% of the Company’s outstanding shares of common stock, including the Founder Shares and the PrivateWarrant. Each whole Placement Shares, will be required to approve the Extension Amendment Proposal. Stockholder approval of the Extension Amendment is required for the implementation of the Board’s plan to extend the date by which we must consummate a Business Combination. As of the date of this Proxy Statement, the Sponsor currently holds 82.2% of the issued and outstanding shares of our common stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the proposals. We expect the Sponsor to vote any shares of our common stock held by it in favor of the proposals to be presented at the Special Meeting, and if the Sponsor votes its shares in favor of the proposals, no additional shares would be needed to approve the Extension Amendment Proposal or the Adjournment Proposal. Notwithstanding stockholder approval of the Extension Amendment Proposal, the Board will retain the right to abandon and not implement the Extension Amendment at any time without any further action by our stockholders.
Approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by stockholders represented in person or by proxy at the Special Meeting.
The Board has fixed the close of business on July 31, 2023 (the “Record Date”) as the date for determining the Company stockholders entitled to receive notice of and vote at the Special Meeting and any adjournment thereof. Only holders of record of the Company’s common stock on that date are entitled to have their votes counted at the Special Meeting or any adjournment thereof.
You are not being asked to vote on the Business Combination at the Special Meeting. The vote by our stockholders on the Business Combination will occur at the separate Business Combination Special Meeting of our stockholders, to be held on August 24, 2023, at 10:00 a.m., Eastern Time, and the solicitation of proxies from our stockholders in connection with such separate Business Combination Special Meeting, and the related right of stockholders to redeem in connection with the Business Combination (which is a separate right to redeem in addition to the right to redeem in connection with the Extension Amendment Proposal), is the subject of the separate XBP Europe Proxy Statement. If you want to ensure your Public Shares are redeemed in the event either the XBP Europe Business Combination is completed or the Extension Amendment Proposal is implemented, you should elect to redeem your Public Shares in connection with both the Special Meeting and the Business Combination Special Meeting. However, there is no assurance that we will hold the Special Meeting and implement the Extension. If the Company does not hold the Special Meeting or implement the Extension, any Public Shares originally submitted for redemption in connection with both the Special Meeting and the Business Combination Special Meeting will be automatically subject to redemption in connection with the Business Combination Special Meeting, unless you withdraw such redemption request. However, if you only elect to redeem your Public Shares in connection with the Special Meeting (and not in connection with the Business Combination Special Meeting), your Public Shares will not be redeemed if the Company does not hold the Special Meeting or implement the Extension.
If the Company’s stockholders approve the XBP Europe Business Combination at the Business Combination Special Meeting and the other conditions to the XBP Europe Business Combination are then satisfied or will be satisfied or waived on or before the Termination Date, then the Company intends to complete the XBP Europe Business Combination on or before the Termination Date. If the Company completes the XBP Europe Business Combination on or before September 16, 2023, it will cancel the Special Meeting and will not implement the Extension. If the Company does not implement the Extension, it will not redeem any Public Shares submitted for redemption solely in connection with the Special Meeting (but will redeem all Public Shares previously submitted for Redemption in connection with the Business Combination Special Meeting). The Company intends to hold the Special Meeting to approve the Extension and file the proposed Extension Amendment only if it has determined as of the time of the Special Meeting that it may not be able to complete the XBP Europe Business Combination on or before the Termination Date.
After careful consideration of all relevant factors, the Board has determined that the Extension Amendment Proposal and, if presented, the Adjournment Proposal are advisable and recommends that you vote or give instruction to vote “FOR” such proposals.
Under the DGCL and the Company’s bylaws, no other business may be transacted at the Special Meeting.
Enclosed is the Proxy Statement containing detailed information concerning the Extension Amendment Proposal, the Adjournment Proposal and the Special Meeting. Whether or not you plan to attend the Special Meeting, we urge you to read this material carefully and vote your shares.
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Your vote is important. If you are a stockholder of record, please sign, date and return your proxy card as soon as possible to make sure that your shares are represented at the Special Meeting. If you are a stockholder of record, you may also cast your vote online at the Special Meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank how to vote your shares, or you may cast your vote online at the Special Meeting by obtaining a proxy from your brokerage firm or bank. Your failure to vote or instruct your broker or bank how to vote will have the same effect as voting “AGAINST” the Extension Amendment Proposal, and an abstention will have the same effect as voting “AGAINST” the Extension Amendment Proposal.
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be held on September [ ], 2023: This notice of meeting and the Proxy Statement are available at https://www.cstproxy.com/[ ].
CF ACQUISITION CORP. VIII110 East 59th StreetNew York, New York 10022
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER [], 2023
PROXY STATEMENT
The special meeting of stockholders (the “Special Meeting”) of CF Acquisition Corp. VIII (“we”, “us”, “our” or the “Company”) will be held at 10:00 a.m. Eastern Time on September [ ], 2023 as a virtual meeting. You will be able to attend, vote your shares, and submit questions during the Special Meeting via a live webcast available at https://www.cstproxy.com/[ ]. The Special Meeting will be held for the sole purpose of considering and voting upon the following proposals:
• a proposal to amend the Company’s amended and restated certificate of incorporation (the “Charter”), in the form set forth in Annex A to the Proxy Statement (the “Extension Amendment” and such proposal the “Extension Amendment Proposal”), to extend the date by which the Company must (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses (a “Business Combination”), (ii) cease its operations if it fails to complete a Business Combination, and (iii) redeem or repurchase 100% of the Company’s Class A common stock (“Class A common stock”) includedWarrant sold as part of the units sold in the Company’s initial public offering (the “Public Shares”) that was consummated on March 16, 2021 (the “IPO”), from September 16, 2023 (the “Termination Date”) to March 16, 2024 or such earlier date as determined by the board of directors of the Company (the “Board”) in its sole discretion (the “Extension”, and such later date, the “Extended Date”); and
• a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votesPlacement Units is exercisable for or otherwise in connection with, the approval of the Extension Amendment Proposal (the “Adjournment Proposal”). The Adjournment Proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Extension Amendment Proposal.
The purpose of the Extension Amendment Proposal and, if necessary, the Adjournment Proposal, is to allow us additional time to complete the proposed transactions (the “XBP Europe Business Combination”) contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), by and among us, Sierra Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), BTC International Holdings, Inc., a Delaware corporation (“Parent”) and XBP Europe, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“XBP Europe”). For more information about the XBP Europe Business Combination, see our Current Report on Form 8-K filed with the SEC on October 11, 2022 and our definitive proxy statement which we filed on August 4, 2023 in connection with the approval of the XBP Europe Business Combination (the “XBP Europe Proxy Statement”). While the Board believes that we may be able to consummate the XBP Europe Business Combination before September 16, 2023, the Board believes that in order to ensure we are able to consummate the XBP Europe Business Combination in case the closing extends past September 16, 2023, we will need to obtain the Extension. Therefore, the Board has determined that it is in the best interests of our stockholders to extend the date by which we must consummate a Business Combination to the Extended Date in order for our stockholders to consider the XBP Europe Business Combination. However, should the closing of the XBP Europe Business Combination occur before September 16, 2023, then we will abandon our efforts to implement the Extension.
In connection with the Extension Amendment Proposal, public stockholders may elect (the “Election”) to redeem their Public Shares for a per-share price, payable in cash, equal to the aggregate amount then on deposit in our trust account (the “Trust Account”), including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares, regardless of whether such public stockholders vote on the Extension Amendment Proposal. If the Extension Amendment Proposal is approved by the requisite vote of stockholders, the remaining holders of Public Shares will retain their right to redeem their Public Shares when the XBP Europe Business Combination is submitted to the stockholders, subject to any limitations set forth in the Charter as amended by the Extension Amendment. In addition, public stockholders who do not make the Election will be entitled to have their Public Shares redeemed for cash if we have not completed a Business Combination by the Extended Date.
Our sponsor, CFAC Holdings VIII, LLC (the “Sponsor”), owns 1,228,000 shares of Class B common stock of the Company (“Class B common stock”) that were issued to the Sponsor prior to the IPO, and 5,537,500 shares of Class A common stock, consisting of (i) 5,000,000 shares which were converted from shares of Class B common stock into shares of Class A common stock on March 6, 2023 (such shares along with the shares of Class B common stock held by the Sponsor and two of the independent directors of the Company, the “Founder Shares”), and (ii) 537,500 shares (such shares together with the 2,500 shares of Class A common stock held by an independent director of the Company, the “Private Placement Shares”) that were purchased by the Sponsor in a private placement which occurred simultaneously with the completion of the IPO (the “Private Placement”), and 135,000 warrants (the “Private Placement Warrants”) that were purchased by the Sponsor in the Private Placement. In addition, two of our independent directors each own 11,000 Founder Shares, and our third independent director owns 2,500 Private Placement Shares. As of the date of this Proxy Statement, the Sponsor currently holds 82.2% of the issued and outstanding shares of our common stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the proposals. We expect the Sponsor to vote any shares of our common stock held by it in favor of the proposals to be presented at the Special Meeting, and if the Sponsor votes its shares in favor of the proposals, no additional shares would be needed to approve the Extension Amendment Proposal or the Adjournment Proposal
To exercise your redemption rights, you must demand that the Company redeem your Public Shares for a pro rata portion of the funds held in the Trust Account, and tender your shares to the Company’s transfer agent at least two business days prior to the Special Meeting (or September [ ], 2023). You may tender your shares by either delivering your share certificate to the transfer agent or by delivering your shares electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system. If you hold your shares in street name, you will need to instruct your bank, broker or other nominee to withdraw the shares from your account in order to exercise your redemption rights.
If you have elected to redeem your Public Shares in connection with the Business Combination Special Meeting and also desire to have such shares redeemed in connection with the Special Meeting, then you must separately elect to redeem your Public Shares in connection with the Special Meeting. If you do not take such additional action, your Public Shares will not be submitted for redemption in connection with the Special Meeting and will only be redeemed in connection with the Business Combination Special Meeting. If you elect to redeem such shares in connection with the Special Meeting, you will receive a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares.
The Sponsor, or a designee, will indemnify the Company for any reduction in the amount in the Trust Account as a result of any excise tax liabilities to the extent of such reduction that would otherwise be paid to any public stockholder exercising its rights with respect to any future redemption opportunities that are provided prior to or in connection with a Business Combination or in respect of a liquidation of the Company.
If the Extension Amendment Proposal is approved and the Board decides to implement the Extension, the Sponsor has agreed to loan to us (the “Extension Loan”) (i) $[ ] per month for each Public Share that remains outstanding and is not redeemed in connection with the Extension (such amount, the “Monthly Amount”); plus (ii) if the XBP Europe Business Combination is not consummated by October 16, 2023, the Monthly Amount for each calendar month (commencing on October 17, 2023 and ending on the 16th day of each subsequent month), or portion thereof, that is needed by the Company to complete the XBP Europe Business Combination until March 16, 2024, or until such earlier time as the Board determines not to continue to extend, which amounts will be deposited into the Trust Account. For example, if we need until March 16, 2024 to complete the XBP Europe Business Combination, which would represent the full six calendar months, then the aggregate amount deposited per share will be $[ ] per share.
Assuming the Extension Amendment Proposal is approved and the Board decides to implement the Extension, the initial Monthly Amount will be deposited into the Trust Account promptly following the Special Meeting and no later than September 16, 2023. Each additional Monthly Amount following October 17, 2023 will be deposited into the Trust Account on or before the 23rd day of such calendar month.
The Extension Loan is conditioned upon the implementation of the Extension Amendment. The Extension Loan will not occur if the Extension Amendment is not approved, or the Extension is not implemented. The amount of the Extension Loan will not bear interest and will be repayable by us to the Sponsor in equity upon consummation of the
XBP Europe Business Combination or, if the XBP Europe Business Combination is not consummated, in cash with funds outside of the Trust Account. If the Sponsor advises us that it does not intend to make the Extension Loan, then the Extension Amendment Proposal and the Adjournment Proposal will not be put before the stockholders at the Special Meeting and, unless the Company can complete the XBP Europe Business Combination by September 16, 2023, we will dissolve and liquidate in accordance with the Charter. The Company will have the sole discretion whether to continue extending for each additional calendar month period until the Extended Date. If the Company determines not to extend for any calendar month following the funding of the initial Monthly Amount, the Sponsor’s obligation to make additional contributions will terminate and the Company will liquidate at the end of the applicable month.
The withdrawal of funds from the Trust Account in connection with the Election will reduce the amount held in the Trust Account following the Election and the amount remaining in the Trust Account may be significantly less than the approximately $15.7 million that was in the Trust Account as of June 30, 2023. In such event, the Company may need to obtain additional funds to complete the XBP Europe Business Combination, and there can be no assurance that such funds will be available on terms acceptable to the parties or at all.
If the Extension Amendment Proposal is not approved and we do not consummate a Business Combination by September 16, 2023, as contemplated by the prospectus for the IPO dated March 11, 2021 and filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 15, 2021 (the “IPO Prospectus”) and in accordance with the Charter, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding Public Shares, which redemption will completely extinguish rights of public stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the Delaware General Corporation Law (the “DGCL”) to provide for claims of creditors and other requirements of applicable law.
There will be no distribution from the Trust Account with respect to the Company’s warrants, which will expire worthless in the event of our winding up. In the event of a liquidation, the Sponsor will not receive any monies held in the Trust Account as a result of its ownership of 6,228,000 Founder Shares, 540,000 Private Placement Shares and 135,000 Private Placement Warrants. In addition, our two independent directors who each own 11,000 Founder Shares and our third independent director who owns 2,500 Private Placement Shares will not receive any monies held in the Trust Account as a result of their ownership of such shares. As a consequence, a liquidating distribution will be made only with respect to the Public Shares.
If the Company liquidates, the Sponsor has agreed to indemnify us to the extent any claims by a third party for services rendered or products sold to us, or any claims by a prospective target business with which we have discussed entering into an acquisition agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to our Trust Account and except as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. We cannot assure you, however, that the Sponsor would be able to satisfy those obligations. For illustrative purposes, assuming the amount in the Trust Account at the time of the Special Meeting is the amount in the Trust Account as of June 30, 2023, or approximately $15.7 million, the Company currently estimates that the per-share price at which Public Shares would be redeemed from cash held in the Trust Account would have been approximately $10.93, subject to the Company’s right to withdraw interest from the Trust Account to pay taxes and any additional contributions to be made to the Trust Account pursuant to the Third Extension Loan. Nevertheless, the Company cannot assure you that the per share distribution from the Trust Account, if the Company liquidates, will not be less than $10.81 due to unforeseen claims of creditors.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Because the Company will not be complying with Section 280 of the DGCL as described in the IPO Prospectus, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations have been limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers or investment bankers) or prospective target businesses.
If the Extension Amendment Proposal is approved, the Company, pursuant to the terms of the investment management trust agreement, dated March 11, 2021, by and between Continental Stock Transfer & Trust Company (“Continental”) and the Company (the “Trust Agreement”), will (i) remove from the Trust Account an amount (the “Withdrawal Amount”) equal to the number of Public Shares properly redeemed multiplied by the per-share price, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares, and (ii) deliver to the holders of such redeemed Public Shares their portion of the Withdrawal Amount. The remainder of such funds (assuming no further redemptions in connection with a Business Combination or in connection with any other event triggering a redemption right under the Charter) shall remain in the Trust Account and be available for use by the Company to complete a Business Combination on or before the Extended Date. Holders of Public Shares who do not redeem their Public Shares now will retain their redemption rights and their ability to vote on a Business Combination through the Extended Date if the Extension is implemented.
The Board has fixed the close of business on July 31, 2023 (the “Record Date”) as the date for determining the Company stockholders entitled to receive notice of and vote at the Special Meeting and any adjournment thereof. Only holders of record of the Company’s common stock on that date are entitled to have their votes counted at the Special Meeting or any adjournment thereof. On the Record Date, there were 6,976,589 shares of Class A common stock and 1,250,000 shares of Class B common stock outstanding. The Company’s warrants do not have voting rights in connection with the Extension Amendment Proposal or the Adjournment Proposal.
This Proxy Statement contains important information about the Special Meeting and the proposals. Please read it carefully and vote your shares.
We will pay for the entire cost of soliciting proxies from our working capital. We have engaged Morrow Sodali, LLC (“Morrow Sodali”) to assist in the solicitation of proxies for the Special Meeting. We have agreed to pay Morrow Sodali a fee of $15,000 in connection with such services in connection with the Special Meeting. We will also reimburse Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses. In addition to these mailed proxy materials, our directors and officers may also solicit proxies in person, by telephone or by other means of communication. These parties will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. While the payment of these expenses will reduce the cash available to us to consummate a Business Combination if the Extension is approved, we do not expect such payments to have a material effect on our ability to consummate a Business Combination.
This Proxy Statement is dated [ ], 2023 and is first being mailed to stockholders on or about [ ], 2023.
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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
These Questions and Answers are only summaries of the matters they discuss. They do not contain all of the information that may be important to you. You should read carefully the entire document, including the annex to this Proxy Statement.
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Some of the statements contained in this Proxy Statement constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect our current views with respect to, among other things, the pending XBP Europe Business Combination, our capital resources and results of operations. Likewise, our financial statements and all of our statements regarding market conditions and results of operations are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases.
The forward-looking statements contained in this Proxy Statement reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ significantly from those expressed in any forward-looking statement. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:
• our ability to complete the XBP Europe Business Combination;
• the anticipated benefits of the XBP Europe Business Combination;
• the volatility of the market price and liquidity of our securities;
• the use of funds not held in the Trust Account;
• the competitive environment in which our successor will operate following the XBP Europe Business Combination; and
• proposed changes in SEC rules related to special purpose acquisition companies.
While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this Proxy Statement, except as required by applicable law. For a further discussion of these and other factors that could cause our future results, performance or transactions to differ significantly from those expressed in any forward-looking statement, please see the section entitled “Risk Factors” in (i) the IPO Prospectus, (ii) our Annual Reports on Form 10-K for the years ended December 31, 2022 and 2021, as filed with the SEC on March 29, 2023 (as amended by our Annual Report on Form 10-K/A filed with the SEC on April 25, 2023) and March 31, 2022, respectively, (iii) our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022 and September 30, 2022, as filed with the SEC on May 13, 2022, August 15, 2022 and November 14, 2022, respectively, (iv) the Definitive Proxy Statement on Schedule 14A as filed with the SEC on February 14, 2023, (v) the XBP Europe Proxy Statement, and (vi) in other reports we file with the SEC from time to time. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements).
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You should carefully consider all of the risks described in (i) the IPO Prospectus, (ii) our Annual Reports on Form 10-K for the years ended December 31, 2022 and 2021, as filed with the SEC on March 29, 2023 (as amended by our Annual Report on Form 10-K/A filed with the SEC on April 25, 2023) and March 31, 2022, respectively, (iii) our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022 and September 30, 2022, as filed with the SEC on May 13, 2022, August 15, 2022 and November 14, 2022, respectively, (iv) the Definitive Proxy Statement on Schedule 14A as filed with the SEC on February 14, 2023, (v) the XBP Europe Proxy Statement, and (vi) the other reports we file with the SEC from time to time before making a decision to invest in our securities. Furthermore, if any of the following events occur, our business, financial condition and operating results may be materially adversely affected or we could face liquidation. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described in the aforementioned filings and below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business, financial condition and operating results or result in our liquidation.
There are no assurances that the Extension will enable us to complete the XBP Europe Business Combination.
Approving the Extension involves a number of risks. Even if the Extension is approved, the Company can provide no assurances that the XBP Europe Business Combination will be consummated prior to the Extended Date. Our ability to consummate the XBP Europe Business Combination is dependent on a variety of factors, many of which are beyond our control. If the Extension is approved and implemented, the Company expects to seek stockholder approval of the XBP Europe Business Combination. We are required to offer stockholders the opportunity to redeem shares in connection with the Extension Amendment, and we will be required to offer stockholders redemption rights again in connection with any stockholder vote to approve the XBP Europe Business Combination. Even if the Extension or the XBP Europe Business Combination are approved by our stockholders, it is possible that redemptions will leave us with insufficient cash to consummate the XBP Europe Business Combination. The fact that we will have separate redemption periods in connection with the Extension and the XBP Europe Business Combination vote could exacerbate these risks. Other than in connection with a redemption offer or liquidation, our stockholders may be unable to recover their investment except through sales of our shares on the open market. The price of our shares may be volatile, and there can be no assurance that stockholders will be able to dispose of our shares at favorable prices, or at all.
A 1% U.S. federal excise tax may be imposed on us in connection with redemptions of our shares in connection with the XBP Europe Business Combination or other stockholder vote pursuant to which stockholders would have a right to submit their shares for redemption (a “Redemption Event”).
Pursuant to the Inflation Reduction Act of 2022 (the “IR Act”), commencing in 2023, a 1% U.S. federal excise tax is imposed on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation and not on its stockholders. The amount of the excise tax is equal to 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. The U.S. Department of the Treasury (the “Treasury Department”) has authority to promulgate regulations and provide other guidance regarding the excise tax. In December 2022, the Treasury Department issued Notice 2023-2, indicating its intention to propose such regulations and issuing certain interim rules on which taxpayers may rely. Under the interim rules, liquidating distributions made by publicly traded domestic corporations are exempt from the excise tax. In addition, any redemptions that occur in the same taxable year as a liquidation is completed will also be exempt from such tax. Accordingly, redemptions of the Public Shares in connection with the Extension may subject us to the excise tax, unless one of the two exceptions above apply. Redemptions would only occur if the Extension Proposal is approved by our stockholders and the Extension is implemented by the Board.
As described in the section below entitled “The Extension Amendment Proposal — Redemption Rights”, if the deadline for us to complete a Business Combination (currently September 16, 2023) is extended, our public stockholders will have the right to require us to redeem their Public Shares. Any redemption or other repurchase in connection with a Redemption Event may be subject to the excise tax. Whether and to the extent to which we
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would be subject to the excise tax in connection with a Redemption Event would depend on a number of factors, including: (i) the fair market value of the redemptions and repurchases in connection with the Redemption Event, (ii) the structure of a Business Combination, (iii) the nature and amount of any private investment in public equity or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with the Redemption Event but issued within the same taxable year of a Business Combination), (iv) if we fail to timely consummate a Business Combination and liquidate in a taxable year following a Redemption Event and (v) the content of any proposed or final regulations and other guidance from the Treasury Department. Based on the IR Act and the guidance currently available, we do not expect the excise tax to apply to a Redemption Event occurring in the same taxable year as the XBP Europe Business Combination because the fair market value of the stock to be issued to BTC International in connection with the XBP Europe Business Combination is expected to be larger than the aggregate fair market value of the redeemed common stock. In addition, because the excise tax would be payable by us and not by the redeeming holders, the mechanics of any required payment of the excise tax remains to be determined. Any excise tax payable by us in connection with a Redemption Event may cause a reduction in the cash available to us to complete the XBP Europe Business Combination and could affect our ability to complete the XBP Europe Business Combination. However, the Sponsor, or a designee, will indemnify the Company for any reduction in the amount in the Trust Account as a result of any excise tax liabilities to the extent of such reduction that would otherwise be paid to any public stockholder exercising its rights with respect to any future redemption opportunities that are provided prior to or in connection with a Business Combination or in respect of a liquidation of the Company.
The SEC has issued proposed rules relating to certain activities of SPACs. Certain of the procedures that we, a potential Business Combination target, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete the XBP Europe Business Combination and may make it more difficult to complete the XBP Europe Business Combination. The need for compliance with the SPAC Rule Proposals may cause us to liquidate the funds in the Trust Account or liquidate the Company at an earlier time than we might otherwise choose.
On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating, among other things, to disclosures in SEC filings in connection with business combination transactions involving special purpose acquisition companies (“SPACs”) such as us and private operating companies; the financial statement requirements applicable to transactions involving shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”), including a proposed rule that would provide SPACs a safe harbor from treatment as an investment company if they satisfy certain conditions that limit a SPAC’s duration, asset composition, business purpose and activities. The SPAC Rule Proposals have not yet been adopted, and may be adopted in the proposed form or in a different form that could impose additional regulatory requirements on SPACs, which could increase the costs and time of completing the XBP Europe Business Combination, and may make it more difficult to complete the XBP Europe Business Combination.
If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted. As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed an investment company, we may abandon our efforts to complete the XBP Europe Business Combination and instead liquidate the Company.
As described further above, the SPAC Rule Proposals relate, among other matters, to the circumstances in which SPACs such as the Company could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria, including a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company for a Business Combination no later than 18 months after the effective date of its registration statement for its initial public offering (the “IPO Registration Statement”). The company would then be required to complete its initial Business Combination no later than 24 months after the effective date of the IPO Registration Statement, which the Company will be unable to achieve.
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If we are deemed to be an investment company under the Investment Company Act, our activities would be severely restricted. In addition, we would be subject to burdensome compliance requirements. We do not believe that our principal activities will subject us to regulation as an investment company under the Investment Company Act. However, if we are deemed to be an investment company and subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds. As a result, unless we were able to modify our activities so that we would not be deemed an investment company, we may be unable to complete the XBP Europe Business Combination and could be required to liquidate the Company. Were we to liquidate, our warrants would expire worthless, and our securityholders would lose the investment opportunity associated with an investment in the target company with which we could have consummated a Business Combination.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we previously instructed the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest bearing demand deposit account until the earlier of the consummation of a Business Combination or our liquidation. As a result, following the liquidation of investments in the Trust Account, we will receive less interest on the funds held in the Trust Account than we would have had the Trust Account remained invested, such that our public stockholders would receive less upon any redemption or liquidation of the Company than what they would have received had the investments not been liquidated.
The funds in the Trust Account were previously held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, on the 24-month anniversary of the effective date of the IPO Registration Statement, we instructed Continental, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in an interest bearing demand deposit account at a bank until the earlier of the consummation of a Business Combination or the liquidation of the Company. Following such liquidation, we have received less interest on the funds held in the Trust Account than we would have if we had not liquidated such assets. However, interest previously earned on the funds held in the Trust Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. As a result, the decision to liquidate the investments held in the Trust Account and thereafter to hold all funds in the Trust Account in an interest bearing demand deposit at a bank could reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company as compared to what they would have received had the investments not been so liquidated.
The XBP Europe Business Combination may be subject to regulatory review and approval requirements, including by governmental entities such as the Committee on Foreign Investment in the United States (“CFIUS”).
The XBP Europe Business Combination may be subject to regulatory review and approval requirements. For example, CFIUS has authority to review direct or indirect foreign investments in U.S. companies. Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, the nature and structure of the transaction, the nationality of the parties, the level of beneficial ownership interest and the nature of any information, access or governance rights involved. Prior to the closing of the XBP Europe Business Combination, XBP Europe, which is a corporation formed under the laws of the State of Delaware, is controlled by Exela, a public company listed on Nasdaq. Upon the completion of the XBP Europe Business Combination, no foreign persons are expected to have “control” over XBP Europe, as that term is defined in the CFIUS regulations at 31 C.F.R. § 800.208. Although no CFIUS-related delays are anticipated, and it is not mandatory to submit a CFIUS filing with respect to the XBP Europe Business Combination, CFIUS may decide to review the transaction, to block or delay the XBP Europe Business Combination, or to impose conditions with respect to it. If the XBP Europe Business Combination is unable to be consummated within the applicable time period required, including as a result of extended regulatory review, the Company will redeem the Public Shares for a pro rata portion of the funds held in the Trust Account and as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Board, liquidate and dissolve, subject in each case to the Company’s obligations under applicable law. In such event, the Company’s stockholders will miss the opportunity to consider an investment in the post-closing entity and the Company’s warrants will be worthless.
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We are a blank check company formed in Delaware on July 8, 2020, for the purpose of effecting a Business Combination.
There are currently 6,976,589 shares of Class A common stock and 1,250,000 shares of Class B common stock issued and outstanding. In addition, we issued warrants to purchase 6,250,000 shares of Class A common stock as part of the IPO and warrants to purchase 135,000 shares of Class A common stock as part of the private placement with the Sponsor that we consummated simultaneously with the consummation of the IPO. Each whole warrant entitles its holder to purchase one share of CFVIII Class A common stockCommon Stock at an exercisea price of $11.50 per share. The warrants will become exercisable 30 days afterproceeds from the completion of a Business Combination and expire five years afterPlacement Units were added to net proceeds from the completion of a Business Combination or earlierIPO that were deposited in the Trust Account (resulting in, upon redemption or liquidation. Once the warrants become exercisable, we may redeem the outstanding warrants at a price of $0.01 per warrant, if the last sale priceconsummation of the IPO, the Trust Account holding $10.00 per share of CFVIII Class A common stock equals or exceeds $18.00 per share for any 20 trading days withinCommon Stock). The Placement
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Warrants are non-redeemable and exercisable on a 30 trading day period ending on the third business day before we send the notice of redemption to the warrant holders. The Private Placement Warrants, however, are non-redeemablecashless basis so long as they are held by the Sponsor or its permitted transferees. The Placement Warrants will expire November 29, 2028 or earlier upon redemption or liquidation.
OnIn March 8, 2022, atthe Sponsor transferred 2,500 Placement Shares to Mr. Sharp and CFVIII agreed to pay Mr. Sharp $25,000 to serve as a special meetingdirector of our stockholders, our stockholders approvedCFVIII, which payment was made on March 1, 2023 (and concurrently with the First Extension. Closing, Mr. Sharp resigned as director).
Underwriting Agreement
Pursuant to an underwriting agreement, dated March 11, 2021, between CFVIII, on the one hand, and Cantor Fitzgerald & Co., a New York general partnership (“CF&Co)” and Odeon Capital Group LLC (“Odeon”), on the other hand, CFVIII paid a total of $4,400,000 in underwriting discounts and commissions for CF&Co.’s services as the representative of the underwriters in the IPO and $100,000 to Odeon for serving as the qualified independent underwriter.
Forward Purchase Contract
In connection with the First Extension, stockholders holding 2,879,927 Public Shares exercised their right to redeem such shares for a pro rata portionclosing of the fundsIPO, on March 11, 2021, the Sponsor and CFVIII entered into the Forward Purchase Contract, pursuant to which the Sponsor agreed to purchase, and CFVIII agreed to issue and sell to the Sponsor, concurrently with the consummation of CFVIII’s initial business combination, 1,250,000 shares of CFVIII Class A Common Stock and 250,000 Warrants, for an aggregate purchase price of $10.0 million. These securities were issued on the closing date of the Business Combination and the shares were converted into shares of Common Stock.
Business Combination Marketing Agreement
Pursuant to the Business Combination Marketing Agreement, CFVIII engaged CF&Co. as an advisor in connection with CFVIII’s initial business combination to assist CFVIII in arranging meetings with CFVIII Stockholders to discuss any potential initial business combination and the Trust Account. As a result, approximately $28,799,270 ($10.00 per share) was removed fromtarget business’ attributes, introducing CFVIII to potential investors that are interested in purchasing CFVIII’s securities, and assisting CFVIII with its press releases and public filings in connection with any initial business combination. Pursuant to the Trust AccountBusiness Combination Marketing Agreement, CFVIII agreed to pay CF&Co. a cash fee for such holders. In connection withservices upon the First Extension, the Sponsor loaned us $4,424,014.60 (the “First Extension Loan”), or $0.20 for each Public Share that was not redeemedconsummation of its initial business combination in an amount equal to $9,350,000. However, in connection with the First Extension, which was deposited intoMerger, CF&Co. waived such fee (which became effective upon the Trust Account.Closing).
On September 27,Engagement Letter
Pursuant to the engagement letter dated October 7, 2022 at a special meeting of our stockholders, our stockholders approved(the “Engagement Letter”), CFVIII engaged CF&Co. to act as its exclusive financial advisor for the Second Extension. InBusiness Combination, in connection with the Second Extension, stockholders holding 19,159,975 Public Shares exercised their rightwhich CF&Co. agreed to redeem such sharesperform customary services for a pro rata portion of the funds in the Trust Account. As a result, approximately $196.1 million ($10.24 per share) was removed from the Trust Account to pay such holders. In connection with the Second Extension, the Sponsor loaned us $976,832.34 (the “Second Extension Loan”), or $0.33 for each Public Share that was not redeemedCFVIII in connection with the Second Extension, which was deposited into the Trust Account.
On March 14, 2023, at a special meeting of our stockholders, our stockholders approved the Third Extension. In connection with the Third Extension, stockholders holding 1,523,509 Public Shares exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, approximately $16.3 million (approximately $10.69 per share) was removed from the Trust Account to pay such holders. In connection with the Third Extension, the Sponsor agreed to loan us an aggregate amount of up to $344,781 (the “Third Extension Loan”), with (i) $57,464 ($0.04 for each Public Share thatBusiness Combination. CF&Co. was not redeemedentitled to any fees for its services under the Engagement Letter, although it was entitled to reimbursement for expenses incurred in connection with its services and is entitled to indemnification by the Third Extension) (the “Monthly Amount”) deposited into the Trust Account on March 16, 2023,Company.
Related Party Loans and (ii) the Monthly Amount being deposited into the Trust Account for each calendar month thereafter commencing on April 17, 2023 and ending on the 16th day of each subsequent month through September 16, 2023), or portion thereof, that is needed by us to complete a Business Combination. As of June 30, 2023, a total of approximately $229,854 has been drawn down under the Third Extension Loan.
As of June 30, 2023, approximately $15.7 million from the IPO, the simultaneous private placement, the First Extension Loan, the Second Extension Loan and the Third Extension Loan, as well as interest earned thereon, remain in the Trust Account in the United States maintained by Continental, acting as trustee, in an interest bearing demand deposit account at a U.S. bank until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the proceeds in the Trust Account as described below.Other Transactions
In order to finance transaction costs in connection with a Business Combination,an intended business combination, the Sponsor loaned usCFVIII $1,750,000 pursuant to the Sponsor Loan to fund ourCFVIII’s expenses relating to investigating and selecting a target business and for other working capital requirements after the IPO and prior to a Business Combination (the “Sponsor Loan”). As of June 30, 2023, we had $1,750,000 outstanding under the Sponsor Loan.business combination.
IfBecause the Sponsor Loan iswas insufficient to cover ourthe working capital requirements of CFVIII, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligatedagreed to loan us funds as may be required (“Working Capital Loans”). If we complete a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account releasedmake loans to us. Otherwise, the Working Capital Loans would be repaid only out of
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funds held outside the Trust Account. In the event that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.CFVIII.
On June 30, 2022, weCFVIII entered into a Working Capital Loan (the “First Working Capital Loan”) with the Sponsor in the amount of up to $1,000,000 in connection with advances the Sponsor will make to us for working capital expenses, which First Working Capital Loan has been fully drawn by us. On October 14, 2022, we entered into an additional Working Capital Loan (the “Second Working Capital Loan”) with the Sponsor in the amount of up to $750,000 in connection with advances the Sponsor will make to us for working capital expenses, which Second Working Capital Loan has been fully drawn by us. On March 31, 2023, we entered into an additional Working Capital Loan (the “Third Working Capital Loan”) with the Sponsor in the amount of up to $500,000 in connection with advances the Sponsor will make to us for working capital expenses.
Except for the foregoing, the terms of any other Working Capital Loans have not been determined and no written agreements exist with respect to such loans. As of June 30, 2023, we had $1,000,000 outstanding under the First Working Capital Loan, $750,000 outstanding underwhich was fully drawn by CFVIII.
On October 14, 2022, CFVIII entered into the Second Working Capital Loan, and approximately $360,000 outstanding under the Third Working Capital Loan.which was fully drawn by CFVIII.
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On March 31, 2023, CFVIII entered into the Third Working Capital Loan, bears no interest and is due and payable on the date on which we consummate a Business Combination. The principal balance may be prepaid at any time.was fully drawn by CFVIII.
On October 9, 2022, weAugust 31, 2023, CFVIII entered into the Merger Agreement with Merger Sub, Parent and XBP Europe, upon closing of which Merger Sub will merge with and into XBP Europe, with XBP Europe surviving as our direct wholly owned subsidiary. Pursuant to the terms and conditions of the XBP Europe Business Combination, in connection with the consummation of the XBP Europe Business Combination, all amounts outstanding under eachFourth Working Capital Loan.
Each of the First Working Capital Loan, the Second Working Capital Loan, the Third Working Capital Loan and the Fourth Working Capital Loan bore no interest and were due and payable upon the Closing.
On March 9, 2022, the Sponsor loaned CFVIII $4,424,015 ($0.20 for each CFVIII Public Share not redeemed in connection with the First Extension) pursuant to the First Extension Loan,Loan.
On September 30, 2022, the Sponsor loaned CFVIII $976,832 ($0.33 for each CFVIII Public Share that was not redeemed in connection with the Second Extension) pursuant to the Second Extension Loan andLoan.
On March 15, 2023, CFVIII entered into the Third Extension Loan willpursuant to which the Sponsor loaned CFVIII $344,781 ($0.04 per share per month, or $0.24 per share for all six months of the Third Extension, for each CFVIII Public Share that was not redeemed in connection with the Third Extension).
In connection with the execution of the Merger Agreement, the Sponsor agreed that the Sponsor Loan, the Extension Loans and the Working Capital Loans would be converted intorepaid in the form of newly issued shares of CFVIII Class A common stockCommon Stock, at a value of $10.00 per share, in accordance with, and subject to the exceptions set forth in, the Merger Agreement. For additional information about the XBP Europe Business Combination, see our Current Report on Form 8-K filedOn November 29, 2023, in connection with the SEC on October 11,consummation of the Merger and as contemplated by the Merger Agreement, the Company issued 1,020,480 Loan Shares to the Sponsor in satisfaction of such outstanding amounts.
As of September 30, 2023 and December 31, 2022, the carrying amounts of the loans payable by CFVIII to the Sponsor were approximately $9,906,000 and $8,200,000, respectively. As of September 30, 2023 and December 31, 2022, the face amounts of these loans were approximately $9,906,000 and $8,500,000, respectively.
Sponsor Support Agreement
Contemporaneously with the execution of the Merger Agreement, CFVIII entered into a Sponsor Support Agreement with the Sponsor, BTC International and Legacy XBP, pursuant to which, among other things, the Sponsor agreed (i) to vote its shares of CFVIII Capital Stock in favor of the Merger Agreement and each of the Proposals, and to not transfer such shares, (ii) to subject certain of its shares of CFVIII Capital Stock to additional transfer restrictions after Closing, (iii) not to redeem any of its shares of CFVIII Capital Stock in connection with the Transactions, (iv) to waive the anti-dilution rights with respect to the shares of CFVIII Class B Common Stock under the CFVIII Charter, (v) upon Closing, to forfeit for cancellation 733,400 of its Founder Shares, and (vi) to convert its right to repayment under any outstanding loans from the Sponsor (including the Sponsor Loan, the Extension Loans, and the XBP Europe Proxy Statement.Working Capital Loans) due by CFVIII upon Closing to be in the form of newly issued shares of CFVIII Class A Common Stock at a value of $10.00 per share, except as otherwise set forth in the Merger Agreement. Additionally, the Sponsor agreed not to solicit, negotiate or enter into competing transactions as further provided in the Sponsor Support Agreement.
You arePursuant to the Sponsor Support Agreement, 5,494,600 Founder Shares and 250,000 Promote Forward Purchase Shares, may not being asked to vote onbe sold or transferred until the earlier of (i) the one year anniversary of the consummation of the Business Combination and (ii) the date on which the Company consummates a liquidation, merger, capital stock exchange, reorganization, or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.
Notwithstanding the foregoing, Sponsor is permitted to transfer its securities, among other ways, (i) to any current or future affiliate of the Sponsor or to any member(s), officers, directors or employees of the Sponsor or any of its current or future affiliates, (ii) in the case of an individual by gift to an immediate family member or trust, which has a beneficiary that is a member of such individual’s immediate family, a current affiliate of such individual or a charitable organization, by private sale or transfer made in connection with any forward purchase agreement or similar arrangement, (iii) upon
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dissolution of Sponsor, provided that such permitted transferees agree in writing to be subject to receive and hold any shares of Common Stock received subject to the same lock-up restrictions.
In connection with the Closing, the Sponsor Support Agreement and certain of its provisions terminated and are of no further force or effect.
Underwriting Agreement
Pursuant to an underwriting agreement, dated January 15, 2015, between QAC 2, on the one hand, and Deutsche Bank Securities Inc. and CF&Co., as representatives of the several underwriters, on the other hand, at closing of its initial public offering, QAC 2 paid CF&Co. a total of $3.25 million in underwriting discounts and commissions for CF&Co.’s services as a representative of the Special Meeting. Theunderwriters in QAC 2’s initial public offering, and upon consummation of QAC 2’s initial business combination with Exela, CF&Co. was entitled to be paid by QAC 2 an additional $6.125 million in deferred underwriting fees, a portion of which fees were paid in July 2017 pursuant to a combination of cash and shares of Exela. CF&Co. also acted as capital markets advisor in connection with QAC 2’s initial business combination with Exela.
Share Buyback Program
CF&Co. acted as agent in connection with Exela’s share buyback program announced in November 2017 and which expired in November 2019, and pursuant to which Exela repurchased shares of common stock for an aggregate purchase price of approximately $10.8 million. In connection with its role as agent, CF&Co. was paid customary fees.
At-the-Market Sales Program
CF&Co. is currently acting as a distribution agent in the At-the-Market Program announced by Exela in May 2022 pursuant to which it may offer and sell up to $250 million of newly issued shares of common stock. In connection with its role as a distribution agent, CF&Co. may be paid a commission of up to 5.0% of gross sales made by it as agent in the ATM Program. CF&Co. last made sales under the ATM Program in July 2022.
Ultimate Parent Support Agreement
Concurrently with the execution of the Merger Agreement, CFVIII entered into an Ultimate Parent Support Agreement with the Ultimate Parent, an indirect parent of BTC International and wholly owned subsidiary of Exela, pursuant to which, among other things, the Ultimate Parent agreed (i) to cause its direct and indirect subsidiaries to vote by our stockholders ontheir shares of BTC International in favor of the Merger Agreement and other resolutions needed to consummate the Business Combination will occur atand the separateTransactions, and to not transfer such shares, and (ii) not to take any action that would hinder or prevent the consummation of the Business Combination Special Meetingor the other Transactions. Additionally, Ultimate Parent agreed not to solicit, negotiate or enter into competing transactions as further provided in the Ultimate Parent Support Agreement. In addition, on or prior to Closing, (i) $13,105,851 of intercompany loans due to the Ultimate Parent and/or certain of its subsidiaries from Legacy XBP were contributed to the capital of Legacy XBP (or such intercompany loans were otherwise satisfied without payment by Legacy XBP), and (ii) on Closing, out of an additional amount of $8,365,801 of intercompany payables due from Legacy XBP to the Ultimate Parent and/or certain of its subsidiaries, CFVIII issued to the Ultimate Parent or such other payees 418,290 shares of Common Stock (in satisfaction of $4,182,900 of intercompany payables), with the remaining $4,182,901 still outstanding.
In connection with the Closing, the Ultimate Parent Support Agreement and all of its provisions terminated and are of no further force or effect.
Lock-Up Agreement
Concurrently with the execution of the Merger Agreement, CFVIII entered into the Lock-Up Agreement with Legacy XBP and BTC International, pursuant to which BTC International agreed that all securities of the Company held by it immediately following the Closing (representing 72.3% or our outstanding shares of Common Stock as of February 7, 2024) will be locked-up and subject to transfer restrictions until the earlier of: (i) the one year anniversary of the date of
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the Closing, and (ii) the date on which the Company consummates a liquidation, merger, capital stock exchange, reorganization, or other similar transaction after the Closing which results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property; provided, that BTC International shall be permitted to make transfers (i) by virtue of the laws of the state the entity’s organization and the entity’s organizational documents upon dissolution of the entity, (ii) as a bona fide gift, or to a charitable organization or educational institution in a transaction not involving a disposition for value, and (iii) to a subsidiary of Exela, that is not a restricted subsidiary or subsidiary guarantor as defined in Exela’s credit documents, provided that any such permitted transferee agrees in writing to be subject to receive and hold any shares of Common Stock received subject to the same lock-up restrictions.
The restrictions on transfer pursuant to the Lock-up Agreement may be waived upon the agreement of the Company, Legacy XBP and BTC International.
Services Agreement
Concurrently with the Closing, Legacy XBP and Exela BPA entered into a Services Agreement. The Services Agreement requires Exela BPA, its affiliates and its permitted subcontractors to provide to Legacy XBP and its subsidiaries, the services, access to facilities, personnel, equipment, software and hardware and other assistance that were provided to Legacy XBP and its subsidiaries during the twelve (12) months prior to the Closing Date. Exela BPA is also required to respond in good faith to any request from Legacy XBP for new services or services in excess of those provided in the twelve (12) months prior to the Closing Date.
The Services Agreement provides that, prior to the earlier of (i) the two year anniversary of the Closing Date, and (ii) the date on which Exela BPA no longer beneficially owns 80% of the issued and outstanding Common Stock of Legacy XBP, Legacy XBP will not solicit, negotiate or enter into competing transactions (other than pursuant to any post-Closing acquired entities or as consented to by Exela BPA), outside of Europe, Africa, or the Middle East. The Services Agreement also provides that prior to the two year anniversary of the Closing Date, Exela BPA, its subsidiaries, and Exela will not solicit, negotiate or enter into competing transactions services (other than pursuant to any post-Closing acquired entities or as consented to by Exela BPA), in Europe, Africa or the Middle East.
The Services Agreement has an initial term of twelve (12) months and will continue beyond such term to the extent that the parties thereto have mutually agreed a longer term for any individual service. Services shall generally be charged at cost plus 8%, or as otherwise agreed or required by law.
Intercompany Confidentiality and Intellectual Property License Agreement
Concurrently with the execution of the Merger Agreement, Legacy XBP entered into the License Agreement with certain affiliates of the Ultimate Parent, pursuant to which the XBP Companies both granted to their affiliates and received from their affiliates, a world-wide, non-exclusive, royalty-free, perpetual, irrevocable license to intellectual property in existence at Closing for use in the same manner as used by prior to Closing. The License Agreement includes limited restrictions on sublicenses and assignments to certain parties, and contemplates the purchase of post-Closing improvements at negotiated royalties. Additionally, the License Agreement includes customary confidentiality and indemnification obligations from both licensors and licensees.
Tax Sharing Agreement
Concurrently with the Closing, Exela, Legacy XBP, and the Company entered into a Tax Sharing Agreement. The Tax Sharing Agreement requires Exela to indemnify and hold harmless the Company and its subsidiaries from and against any taxes of any consolidated, combined, or unitary group for U.S. federal (and applicable state and local) tax purposes that includes any of Exela and its affiliates (excluding Legacy XBP and its subsidiaries) and any of the Company and its subsidiaries (the “Exela Consolidated Group”) imposed on the Company or any of its subsidiaries as a result of being a member of such Exela Consolidated Group for any tax year of Legacy XBP or its subsidiaries ending on or prior to the Closing Date.
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The Tax Sharing Agreement also provides that if the Company (or its subsidiaries) is eligible to be included in an Exela Consolidated Group after the Closing Date, (i) Exela will file income tax returns for the Exela Consolidated Group, (ii) the Company will make periodic payments to Exela in such amounts as the estimated tax payments that would be due from the consolidated group that consisting of the Company and its subsidiaries (the “XBP Consolidated Group”) if the XBP Consolidated Group were not included in the Exela Consolidated Group, and (iii) Exela will pay the entire federal (and applicable state and local) income tax liability of the Exela Consolidated Group and will indemnify and hold harmless the XBP Consolidated Group against any such liability (other than the XBP Consolidated Group’s share of such liability). The Tax Sharing Agreement also sets forth rules related to allocating income, losses and credits to the XBP Consolidated Group, preparing consolidated tax returns of the Exela Consolidated Group, and conducting tax audits and litigation involving the Exela Consolidated Group.
Amended and Restated Registration Rights Agreement
Concurrently with the Closing, the Company, the Sponsor, the former independent directors of the Company, and BTC International entered into the Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company is obligated to file one or more registration statements to register the resales of Common Stock held by the parties to the Registration Rights Agreement after the Closing. Holders of CFVIII Class A Common Stock who were party to the Registration Rights Agreement dated March 11, 2021 between CFVIII and such holders (the “Existing Holders”) or the parties listed under the New Holders on the signature page to the Registration Rights Agreement (the “New Holders”), in each case holding a majority of the registrable securities owned by all the Existing Holders or New Holders, as applicable, are entitled under the Registration Rights Agreement to make a written demand for registration under the Securities Act of all or part of their registrable securities (up to a maximum of two demand registrations by the Sponsor, or five demand registrations by the New Holders). In addition, pursuant to the terms of the Registration Rights Agreement and subject to certain requirements and customary conditions, the Company must file a registration statement on Form S-1 to register the resale of the registrable securities of the Company held by Existing Holders and the New Holders and any person or entity who becomes a party to the Registration Rights Agreement (“Holders”). The Registration Rights Agreement also provides such Holders with “piggy-back” registration rights, subject to certain requirements and customary conditions.
Under the Registration Rights Agreement, the Company indemnifies such Holders and certain persons or entities related to such Holders such as their officers, directors, and control persons against any losses or damages resulting from any untrue or alleged untrue statement of a material fact contained in any registration statement or prospectus pursuant to which the Holders sell their registrable securities, or any omission or alleged omission of a material fact required to be stated therein to make any statements made therein not misleading, unless such liability arose from such Holder’s misstatement or alleged misstatement, or omission or alleged omission, and the Holders including registrable securities in any registration statement or prospectus will indemnify the Company and certain persons or entities related to the Company such as its officers and directors and underwriters against all losses caused by their misstatements or omissions (or alleged misstatements or omissions) in those documents.
Exela Technologies, Inc.
Prior to the Business Combination, Legacy XBP was a wholly owned indirect subsidiary of Exela. The Company (and indirectly, Legacy XBP) continues to be majority owned by Exela and, therefore, Exela continues to control a significant percentage of the outstanding voting power of the Company and Legacy XBP. So long as this ownership and control continues, Exela, along with its directors and management team, including its Executive Chairman, Par Chadha, will generally will have the ability to control the outcome of any matter submitted for the vote of the Company’s stockholders, including the election and removal of directors, changes to the size of the Board, any amendment to the Charter and Bylaws, and the approval of any merger or other significant corporate transaction, including a sale of substantially all of the Company’s assets (other than in certain circumstances set forth in the Charter or Bylaws). In addition, Legacy XBP relies on the services that Exela has provided in the past and in the event that Exela fails to provide such services in the future, as more fully described in “Certain Relationships and Related Person Transactions — Services Agreement.” Given these relationships, the Company will continue to rely on Exela.
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Intercompany Loan Agreement
Subsidiaries of Legacy XBP entered into four related party loan notes with two affiliates of Exela, three of the notes are dated September 4, 2023 (and subsequently amended on September 15, 2023) and one note is dated September 15, 2023. The notes have an aggregate principal amount of $1.5 million, a ten year term and bear annual interest at 6%.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers, directors and persons who own more than 10% of our stockholders,Common Stock to be heldfile reports with the SEC. of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who own more than 10% of our Common Stock to file reports with the SEC. Based solely on August 24,a review of the copies of reports furnished to us and written representations that no other reports were required, the Company believes that, during fiscal 2023, at 10:00 a.m., Eastern Time,all filing requirements were met on a timely basis.
The Company pays all of the costs of soliciting proxies. We will ask banks, brokers and other nominees and fiduciaries to forward the proxy materials to the beneficial owners of our Common Stock and to obtain the authority of executed proxies. We will reimburse them for their reasonable expenses. We may engage the services of a professional proxy solicitation firm to aid in the solicitation of proxies from our stockholders in connection withcertain brokers, bank nominees and other institutional owners. Our costs for such separate Business Combination Special Meeting, and the related right of stockholders to redeem in connection with the Business Combination (which is a separate right to redeem in addition to the right to redeem in connection with the Extension Amendment Proposal), is the subject of the separate XBP Europe Proxy Statement. If you want to ensure your Public Shares are redeemed in the event either the XBP Europe Business Combination is completed or the Extension Amendment Proposal is implemented, you should elect to redeem your Public Shares in connection with both the Special Meeting and the Business Combination Special Meeting. However, there is no assurance that we will hold the Special Meeting and implement the Extension. If the Company does not hold the Special Meeting or implement the Extension, any Public Shares originally submitted for redemption in connection with both the Special Meeting and the Business Combination Special Meeting will be automatically subject to redemption in connection with the Business Combination Special Meeting, unless you withdraw such redemption request. However,services, if you only elect to redeem your Public Shares in connection with the Special Meeting (and not in connection with the Business Combination Special Meeting), your Public Sharesretained, will not be redeemed if the Company does not hold the Special Meeting or implement the Extension.
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PROPOSAL ONE — THE EXTENSION AMENDMENT PROPOSAL
Overview
The Company is proposing to amend the Charter to extend the date by which the Company has to consummate a Business Combination to the Extended Date so as to provide the Company with additional time to complete the XBP Europe Business Combination if the Company is unable to complete the XBP Europe Business Combination by September 16, 2023.
The Extension Amendment Proposal is required for the implementation of the Board’s plan to allow the Company more time to complete the XBP Europe Business Combination.
The Board believes that given our expenditure of time, effort and money on searching for a Business Combination and the entry into the Merger Agreement with respect to the XBP Europe Business Combination, circumstances warrant providing public stockholders an opportunity to consider the XBP Europe Business Combination and that it is in the best interests of our stockholders that we obtain the Extension. For more information about the XBP Europe Business Combination, see Company’s Current Report on Form 8-K filed with the SEC on October 11, 2022 and the XBP Europe Proxy Statement.
A copy of the proposed amendment to the Charter is attached to this Proxy Statement in Annex A.
Reasons for the Extension Amendment Proposal
The Charter provides that the Company has until September 16, 2023 to complete a Business Combination. The purpose of the Extension Amendment is to allow the Company more time to complete a Business Combination if the Company is unable to complete the XBP Europe Business Combination by September 16, 2023.
As previously announced, we entered into the Merger Agreement on October 9, 2022. Pursuant to the Merger Agreement, the parties agreed, subject to the terms and conditions of the Merger Agreement, to effect the XBP Europe Business Combination. While the Board believes that we may be able to consummate the XBP Europe Business Combination before the Termination Date, the Board believes that in order to ensure we are able to consummate the XBP Europe Business Combination in case the closing extends past the Termination Date, we will need to obtain the Extension. If we do not obtain the Extension, we would be precluded from completing the XBP Europe Business Combination and would be forced to liquidate even if our stockholders are otherwise in favor of consummating the XBP Europe Business Combination. However, should the closing of the XBP Europe Business Combination occur before September 16, 2023, then we will abandon our efforts to implement the Extension.
If the Extension is approved and implemented, subject to satisfaction of the conditions to closing in the Merger Agreement (including, without limitation, receipt of stockholder approval of the XBP Europe Business Combination), we intend to complete the XBP Europe Business Combination as soon as possible and in any event on or before the Extended Date.
The IPO Prospectus and the Charter provide that the affirmative vote of the holders of at least 65% of all outstanding shares of common stock, including the Founder Shares and the Private Placement Shares, is required to extend our corporate existence, except in connection with, and effective upon, consummation of a Business Combination. Additionally, the IPO Prospectus and the Charter provide for all public stockholders to have an opportunity to redeem their Public Shares in the case our corporate existence is extended as described above. Because we continue to believe that a Business Combination would be in the best interests of our stockholders, and because we may not be able to consummate a Business Combination within the permitted time period, the Board has determined to seek stockholder approval to extend the date by which we have to complete a Business Combination beyond September 16, 2023 to the Extended Date. If we have not held a meeting of stockholders to approve the XBP Europe Business Combination prior to September 16, 2023, we intend to hold another stockholder meeting prior to the Extended Date in order to seek stockholder approval of the XBP Europe Business Combination.
We believe that the foregoing Charter provision was included to protect Company stockholders from having to sustain their investments for an unreasonably long period if the Company failed to find a suitable Business Combination in the timeframe contemplated by the Charter. We also believe that, given the Company’s expenditure of time, effort
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and money on finding a Business Combination and our entry into the Merger Agreement with respect to the XBP Europe Business Combination, circumstances warrant providing public stockholders an opportunity to consider the XBP Europe Business Combination.
If the Extension Amendment Proposal is Not Approvedsignificant.
Stockholder approvalProposals for 2025 Annual Meeting
Any stockholder who intends to present a proposal for inclusion in our proxy materials for our 2025 Annual Meeting of the Extension Amendment is required for the implementation of the Board’s planStockholders pursuant to extend the date by which we must consummate a Business Combination. Therefore, the Board will abandon and not implement the Extension Amendment unless our stockholders approve the Extension Amendment Proposal.
If the Extension Amendment Proposal is not approved and we have not consummated the XBP Europe Business Combination by September 16, 2023, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding Public Shares, which redemption will completely extinguish rights of public stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law.
There will be no distribution from the Trust Account with respect to our warrants, which will expire worthless in the event we liquidate. In the event of a liquidation, the Sponsor and our officers and directors will not receive any monies held in the Trust Account as a result of their ownership of the Founder Shares or the Private Placement Shares.
If the Extension Amendment Proposal Is Approved
If the Extension Amendment Proposal is approved and implemented by the Company, the Company will file an amendment to the Charter with the Secretary of State of the State of Delaware in the form set forth in Annex A hereto to extend the time it has to complete a Business Combination until the Extended Date. The Company will remain a reporting companyRule 14a-8 under the Exchange Act and its units, Class A common stock and public warrants will remain publicly traded. The Company will then continue to work to consummatemust deliver the XBP Europe Business Combination by the Extended Date.
Notwithstanding stockholder approval of the Extension Amendment Proposal, the Board will retain the right to abandon and not implement the Extension at any time without any further action by our stockholders.
If the Extension Amendment Proposal is approved and the Board decides to implement the Extension, the Sponsor has agreed to loan to us (the “Extension Loan”) (i) $[ ] per month for each Public Share that remains outstanding and is not redeemed in connection with the Extension (such amount, the “Monthly Amount”); plus (ii) if the XBP Europe Business Combination is not consummated by October 16, 2023, the Monthly Amount for each calendar month (commencing on October 17, 2023 and ending on the 16th day of each subsequent month), or portion thereof, that is needed by the Company to complete the XBP Europe Business Combination until March 16, 2024, or until such earlier time as the Board determines not to continue to extend, which amounts will be deposited into the Trust Account. For example, if we need until March 16, 2024 to complete the XBP Europe Business Combination, which would represent the full six calendar months, then the aggregate amount deposited per share will be $[ ] per share.
Assuming the Extension Amendment Proposal is approved and the Board decides to implement the Extension, the initial Monthly Amount will be deposited into the Trust Account promptly following the Special Meeting and no later than September 16, 2023. Each additional Monthly Amount following October 17, 2023 will be deposited into the Trust Account on or before the 23rd day of such calendar month.
The Extension Loan is conditioned upon the implementation of the Extension Amendment. The Extension Loan will not occur if the Extension Amendment is not approved, or the Extension is not implemented. The amount of the Extension Loan will not bear interest and will be repayable by usproposal to the Sponsor in equity upon consummation of the XBP Europe Business Combination or, if the XBP Europe Business Combination is not consummated, in cash with
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funds outside of the Trust Account. If the Sponsor advises us that it does not intend to make the Extension Loan, then the Extension Amendment Proposal and the Adjournment Proposal will not be put before the stockholders at the Special Meeting and, unless the Company can complete the XBP Europe Business Combination by September 16, 2023, we will dissolve and liquidate in accordance with the Charter. The Company will have the sole discretion whether to continue extending for each additional calendar month period until the Extended Date. If the Company determines not to extend for any calendar month following the funding of the initial Monthly Amount, the Sponsor’s obligation to make additional contributions will terminate and the Company will liquidate at the end of the applicable month.
You are not being asked to vote on the Business Combination at the Special Meeting. The vote by our stockholders on the Business Combination will occur at the separate Business Combination Special Meeting of our stockholders, to be held on August 24, 2023, at 10:00 a.m., Eastern Time, and the solicitation of proxies from our stockholders in connection with such separate Business Combination Special Meeting, and the related right of stockholders to redeem in connection with the Business Combination (which is a separate right to redeem in addition to the right to redeem in connection with the Extension Amendment Proposal), is the subject of the separate XBP Europe Proxy Statement. If you want to ensure your Public Shares are redeemed in the event either the XBP Europe Business Combination is completed or the Extension Amendment Proposal is implemented, you should elect to redeem your Public Shares in connection with both the Special Meeting and the Business Combination Special Meeting. However, there is no assurance that we will hold the Special Meeting and implement the Extension. If the Company does not hold the Special Meeting or implement the Extension, any Public Shares originally submitted for redemption in connection with both the Special Meeting and the Business Combination Special Meeting will be automatically subject to redemption in connection with the Business Combination Special Meeting, unless you withdraw such redemption request. However, if you only elect to redeem your Public Shares in connection with the Special Meeting (and not in connection with the Business Combination Special Meeting), your Public Shares will not be redeemed if the Company does not hold the Special Meeting or implement the Extension.
If the Extension Amendment Proposal is approved, and the Extension is implemented, the removal of the Withdrawal Amount from the Trust Account in connection with the Election will reduce the amount held in the Trust Account. The Company cannot predict the amount that will remain in the Trust Account if the Extension Amendment Proposal is approved and the amount remaining in the Trust Account may be significantly less than the approximately $15.7 million that was in the Trust Account as of June 30, 2023.
Redemption Rights
If the Extension Amendment Proposal is approved, and the Extension is implemented, each public stockholder may seek to redeem its Public Shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares. As of the Record Date, based on funds in the Trust Account of approximately $15.83 million as of such date, the pro rata portion of the funds available in the Trust Account for the redemption of Public Shares was approximately $11.02 per share (which does not take into account the removal of any accrued interest in the Trust Account to pay our taxes and any remaining contributions to be made to the Trust Account pursuant to the Third Extension Loan). Holders of Public Shares who do not elect to redeem their Public Shares in connection with the Extension will retain the right to redeem their Public Shares in connection with any stockholder vote to approve the XBP Europe Business Combination, or if the Company has not consummated a Business Combination by the Extended Date.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST SUBMIT A REQUEST IN WRITING THAT WE REDEEM YOUR PUBLIC SHARES FOR CASH TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY AT THE ADDRESS BELOW, AND, AT THE SAME TIME, ENSURE YOUR BANK OR BROKER COMPLIES WITH THE REQUIREMENTS IDENTIFIED ELSEWHERE HEREIN, INCLUDING DELIVERING YOUR SHARES TO THE TRANSFER AGENT PRIOR TO 5:00 P.M. EASTERN TIME ON SEPTEMBER [ ], 2023.
In connection with tendering your shares for redemption, prior to 5:00 p.m. Eastern time on September [ ], 2023 (two business days before the Special Meeting), you must elect either to physically tender your stock certificates to Continental Stock Transfer & Trust Company, 1 State Street Plaza, 30th Floor, New York, New York 10004, Attn: SPAC
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Redemption Team, spacredemptions@continentalstock.com, or to deliver your shares to the transfer agent electronically using DTC’s DWAC system, which election would likely be determined based on the manner in which you hold your shares. The requirement for physical or electronic delivery prior to 5:00 p.m. Eastern time on September [ ], 2023 (two business days before the Special Meeting) ensures that a redeeming holder’s election is irrevocable once the Extension Amendment Proposal is approved. In furtherance of such irrevocable election, stockholders making the election will not be able to tender their shares after the vote at the Special Meeting.
Through the DWAC system, this electronic delivery process can be accomplished by the stockholder, whether or not it is a record holder or its shares are held in “street name,” by contacting the transfer agent or its broker and requesting delivery of its shares through the DWAC system. Delivering shares physically may take significantly longer. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC, and the Company’s transfer agent will need to act together to facilitate this request. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $100 and the broker would determine whether or not to pass this cost on to the redeeming holder. It is the Company’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. The Company does not have any control over this process or over the brokers or DTC, and it may take longer than two weeks to obtain a physical stock certificate. Such stockholders will have less time to make their investment decision than those stockholders that deliver their shares through the DWAC system. Stockholders who request physical stock certificates and wish to redeem may be unable to meet the deadline for tendering their shares before exercising their redemption rights and thus will be unable to redeem their shares.
Certificates that have not been tendered in accordance with these procedures prior to 5:00 p.m. Eastern time on September [ ], 2023 (two business days before the Special Meeting) will not be redeemed for cash held in the Trust Account on the redemption date. In the event that a public stockholder tenders its shares and decides prior to the vote at the Special Meeting that it does not want to redeem its shares, the stockholder may withdraw the tender. If you delivered your shares for redemption to our transfer agent and decide prior to the vote at the Special Meeting not to redeem your Public Shares, you may request that our transfer agent return the shares (physically or electronically). You may make such request by contacting our transfer agent at the address listed above. In the event that a public stockholder tenders shares and the Extension Amendment Proposal is not approved, these shares will not be redeemed and the physical certificates representing these shares will be returned to the stockholder promptly following the determination that the Extension Amendment Proposal will not be approved. The Company anticipates that a public stockholder who tenders shares for redemption in connection with the vote to approve the Extension Amendment Proposal would receive payment of the redemption price for such shares soon after the completion of the Extension. The transfer agent will hold the certificates of public stockholders that make the election until such shares are redeemed for cash or returned to such stockholders.
If properly demanded, the Company will redeem each Public Share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares. For illustrative purposes, assuming the amount in the Trust Account at the time of the Special Meeting is the amount in the Trust Account as of June 30, 2023, or approximately $15.7 million, the Company currently estimates that the per-share price at which Public Shares would be redeemed from cash held in the Trust Account would have been approximately $10.93, subject to the Company’s right to withdraw interest from the Trust Account to pay taxes and any additional contributions to be made to the Trust Account pursuant to the Third Extension Loan. The closing price of the Class A common stock on July 31, 2023 as reported on the Nasdaq Capital Market was $10.97.
If you exercise your redemption rights, you will be exchanging your shares of Class A common stock for cash and will no longer own the shares. You will be entitled to receive cash for these shares only if you properly demand redemption and tender your stock certificate(s) to the Company’s transfer agent prior to 5:00 p.m. Eastern time on September [ ], 2023 (two business days before the Special Meeting). The Company anticipates that a public stockholder who tenders shares for redemption in connection with the vote to approve the Extension Amendment Proposal would receive payment of the redemption price for such shares soon after the completion of the Extension.
If you have elected to redeem your Public Shares in connection with the Business Combination Special Meeting and also desire to have such shares redeemed in connection with the Special Meeting, then you must separately elect to redeem your Public Shares in connection with the Special Meeting. If you do not take such
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additional action, your Public Shares will not be submitted for redemption in connection with the Special Meeting and will only be redeemed in connection with the Business Combination Special Meeting. If you elect to redeem such shares in connection with the Special Meeting, you will receive a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares.
Vote Required for Approval
The affirmative vote by holders of at least 65% of the Company’s outstanding shares of common stock, including the Founder Shares and the Private Placement Shares, is required to approve the Extension Amendment Proposal. If the Extension Amendment Proposal is not approved, the Extension Amendment will not be implemented and, if a XBP Europe Business Combination has not been consummated, the Company will be required by the Charter to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest (net of taxes payable, less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding Public Shares, which redemption will completely extinguish rights of public stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Company’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Stockholder approval of the Extension Amendment is required for the implementation of the Board’s plan to extend the date by which we must consummate a Business Combination. Therefore, the Board will abandon and not implement such amendment unless our stockholders approve the Extension Amendment Proposal. Notwithstanding stockholder approval of the Extension Amendment Proposal, the Board will retain the right to abandon and not implement the Extension Amendment at any time without any further action by our stockholders.
The Sponsor and all of our directors, executive officers and their affiliates are expected to vote any common stock owned by them in favor of the Extension Amendment Proposal. On the Record Date, the Sponsor and our directors and executive officersCorporate Secretary of the Company at our principal executive offices, located at 2701 E. Grauwyler Rd., Irving, Texas 75061, not less than one hundred and their affiliates beneficially owned and were entitledtwenty (120) days prior to vote an aggregate of 6,250,000 Founder Shares and 540,000 Private Placement Shares, representing approximately 82.5% of the Company’s issued and outstanding shares of common stock. The Sponsor and our directors, executive officers and their affiliates do not intend to purchase shares of Class A common stock in the open market or in privately negotiated transactions in connection with the stockholder vote on the Extension Amendment. As a result, the Sponsor and our officers and directors own sufficient shares to approve the Extension Amendment Proposal and the Adjournment Proposal.
Interests of the Sponsor and Our Directors and Officers
When you consider the recommendation of the Board, you should keep in mind that the Sponsor, our executive officers and members of the Board have interests that may be different from, or in addition to, your interests as a stockholder. These interests include, among other things:
• the fact that the Sponsor holds 6,228,000 Founder Shares, 537,500 Private Placement Shares and 135,000 Private Placement Warrants, all such securities deemed to be beneficially owned by our Chairman and Chief Executive Officer, two of our independent directors each hold 11,000 Founder Shares, and our third independent director owns 2,500 Private Placement Shares, all of which would expire worthless if a Business Combination is not consummated;
• the fact that, unless the Company consummates a Business Combination, the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by it on behalf of the Company, to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account (no such unreimbursed expenses were outstanding as of June 30, 2023);
• the fact that the Sponsor has made outstanding loans to the Company in the aggregate amount of approximately $9.5 million as of June 30, 2023, which amount the Company will be unable to repay to the Sponsor to the extent that the amount of such loans exceeds the amount of available proceeds not deposited in the Trust Account if the XBP Europe Business Combination is not completed;
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• the fact that, if the Trust Account is liquidated, including in the event we are unable to complete a Business Combination within the required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account;
• the fact that none of our officers or directors has received any cash compensation for services rendered to the Company (other than Robert Sharp who received a one-time payment of $25,000 to serve as a director of the Company), and all of the current members of the Board are expected to continue to serve as directors at least through the date of the Special Meeting to vote on a proposed Business Combination; and
• additional interests in the XBP Europe Business Combination as set forth in the XBP Europe Proxy Statement.
The Board’s Reasons for the Extension Amendment Proposal and Its Recommendation
As discussed below, after careful consideration of all relevant factors, the Board has determined that the Extension Amendment is in the best interests of the Company and its stockholders. The Board has approved and declared advisable the adoption of the Extension Amendment Proposal and recommends that you vote “FOR” such proposal.
The Charter provides that the Company has until September 16, 2023 to complete the purposes of the Company including, but not limited to, effecting a Business Combination under its terms.
As previously announced, we entered into the Merger Agreement on October 9, 2022. Pursuant to the Merger Agreement, the parties agreed, subject to the terms and conditions of the Merger Agreement, to effect the XBP Europe Business Combination. While the Board believes that we may be able to consummate the XBP Europe Business Combination before the Termination Date, the Board believes that in order to ensure we are able to consummate the XBP Europe Business Combination in case the closing extends past the Termination Date, we will need to obtain the Extension. If we do not obtain the Extension, we would be precluded from completing the XBP Europe Business Combination and would be forced to liquidate even if our stockholders are otherwise in favor of consummating the XBP Europe Business Combination. However, should the closing of the XBP Europe Business Combination occur before March 16, 2024, then we will abandon our efforts to implement the Extension.
If the Extension is approved and implemented, subject to satisfaction of the conditions to closing in the Merger Agreement (including, without limitation, receipt of stockholder approval of the XBP Europe Business Combination), we intend to complete the XBP Europe Business Combination as soon as possible and in any event on or before the Extended Date.
The Charter states that if the Company’s stockholders approve an amendment to the Charter that would affect the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if it does not complete a Business Combination before September 16, 2023, the Company will provide its public stockholders with the opportunity to redeem all or a portion of their Public Shares upon such approval at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares. We believe that this Charter provision was included to protect the Company stockholders from having to sustain their investments for an unreasonably long period if the Company failed to find a suitable Business Combination in the timeframe contemplated by the Charter.
In addition, the IPO Prospectus and the Charter provide that the affirmative vote of the holders of at least 65% of all outstanding shares of common stock, including the Founder Shares and the Private Placement Shares, is required to extend our corporate existence, except in connection with, and effective upon the consummation of, a Business Combination. Because we continue to believe that the XBP Europe Business Combination would be in the best interests of our stockholders and because we may not be able to complete the XBP Europe Business Combination by September 16, 2023, the Board has determined to seek stockholder approval to extend the date by which we have to complete the XBP Europe Business Combination, if we are unable to complete it by September 16, 2023, beyond September 16, 2023 to the Extended Date. As of the date of this Proxy Statement,Statement. However, if the Sponsor
24date of next year’s Annual Meeting is changed by more than thirty (30) days from the date of this year’s meeting, then the deadline is a reasonable time before the Company begins to print and send its proxy materials.
currently holds 82.2%Stockholders or who intends to submit a proposal pursuant to our Bylaws without including such proposal in our proxy materials pursuant to Rule 14a-8 must deliver timely notice of the issued and outstanding shares of our common stock and accordingly,nomination or the Sponsor will have the ability, voting on its own, to approve the Extension Amendment Proposal. We expect the Sponsor to vote any shares of our common stock held by it in favor of the proposals to be presented at the Special Meeting, and if the Sponsor votes its shares in favor of the proposals, no additional shares would be needed to approve the Extension Amendment Proposal.
The Company is not asking you to vote on the XBP Europe Business Combination at this time. If the Extension is implemented and you do not elect to redeem your Public Shares, you will retain the right to vote on the XBP Europe Business Combination in the future and the right to redeem your Public Shares at a per-share price, payable in cash, equalproposal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares, in the event a XBP Europe Business Combination is approved and completed or the Company has not consummated another Business Combination by the Extended Date. For more information about the XBP Europe Business Combination, see our Current Report on Form 8-K filed with the SEC on October 11, 2022 and the XBP Europe Proxy Statement.
After careful consideration of all relevant factors, the Board determined that the Extension Amendment is in the best interestsCorporate Secretary of the Company at our principal executive offices, located at 2701 E. Grauwyler Rd., Irving, Texas 75061, in the form provided in, and its stockholders.
Recommendation ofby the Board
The Board recommends thatdate required by, our stockholders vote “FOR”Bylaws. To be timely, a stockholder’s notice must be delivered to or mailed and received by the approval of the Extension Amendment Proposal.
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PROPOSAL TWO — THE ADJOURNMENT PROPOSAL
Overview
The Adjournment Proposal, if adopted, will allow the Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies. The Adjournment Proposal will only be presentedSecretary not more than ninety (90) days and not less than sixty (60) days prior to our stockholders2025 Annual Meeting; provided, however, that in the event that there are insufficient votes for,the date of annual meeting is more than thirty (30) days before or otherwise in connection with,more than sixty (60) days after the approval of the Extension Amendment Proposal. In no event will the Board adjourn the Special Meeting beyond September 16, 2023.
Consequences if the Adjournment Proposal is Not Approved
If the Adjournment Proposal is not approved by our stockholders, the Board may not be able to adjourn the Special Meeting to a later date in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Amendment Proposal.
Vote Required for Approval
The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by stockholders represented in person or by proxy at the Special Meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or online at the Special Meeting will have no effect on the outcome of any vote on the Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the Adjournment Proposal. Asone-year anniversary of the date of this Proxy Statement, the Sponsor currently holds 82.2% of the issued and outstanding shares of our common stock and accordingly, the Sponsor will have the ability, voting on its own, to approve the Adjournment Proposal. We expect the Sponsor to vote any shares of our common stock heldpreceding year’s annual meeting, notice by it in favor of the proposalsa stockholder, to be presented at the Special Meeting,timely, must be delivered to or mailed and if the Sponsor votes its shares in favor of the proposals, no additional shares would be needed to approve the Adjournment Proposal.
Recommendation of the Board
The Board recommends that our stockholders vote “FOR” the approval of the Adjournment Proposal.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain United States federal income tax considerations for holders of shares of Class A common stock with respect to the exercise of redemption rights in connection with the approval of the Extension Amendment Proposal. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgatedreceived by the U.S. Treasury Department, current administrative interpretations and practices of the Internal Revenue Service (the “IRS”), and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain a position contrary to any of the tax considerations described below. This summary does not discuss all aspects of United States federal income taxation that may be important to particular investors in light of their individual circumstances, such as investors subject to special tax rules (e.g., financial institutions, insurance companies, mutual funds, pension plans, S corporations, broker-dealers, traders in securities that elect mark-to-market treatment, regulated investment companies, real estate investment trusts, trusts and estates, partnerships and their partners, and tax-exempt organizations (including private foundations)) and investors that will hold shares of Class A common stock as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive ownership transaction,” “constructive sale,” or other integrated transaction for United States federal income tax purposes, investors subject to the applicable financial statement accounting rules of Section 451(b) of the Code, investors subject to the alternative minimum tax provisions of the Code, U.S. Holders (as defined below) that have a functional currency otherSecretary no later than the United States dollar, U.S. expatriates, investors that actuallyninetieth (90th) day prior to such annual meeting or, constructively own 5 percent or more of the outstanding shares of Class A common stock, and Non-U.S. Holders (as defined below, and except as otherwise discussed below), all of whom may be subject to tax rules that differ materially from those summarized below. In addition, this summary does not discuss any state, local, or non-United States tax considerations, any non-income tax (such as gift or estate tax) considerations, alternative minimum tax or the Medicare tax. In addition, this summary is limited to investors that hold shares of Class A common stock as “capital assets” (generally, property held for investment) under the Code.
If a partnership (including an entity or arrangement treated as a partnership for United States federal income tax purposes) holds shares of Class A common stock, the tax treatment of a partner in such partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. If you are a partner of a partnership holding shares of Class A common stock, you are urged to consult your tax advisor regarding the tax consequences of a redemption.
WE URGE HOLDERS OF SHARES OF CLASS A COMMON STOCK CONTEMPLATING EXERCISE OF THEIR REDEMPTION RIGHTS TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.
U.S. Federal Income Tax Considerations to U.S. Holders
This section is addressed to U.S. Holders of shares of Class A common stock that elect to have their shares of Class A common stock redeemed for cash. For purposes of this discussion, a “U.S. Holder” is a beneficial owner that so redeems its shares of Class A common stock and is:
• an individual who is a United States citizen or resident of the United States;
• a corporation (including an entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
• an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or
• a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person.
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Redemption of Shares of Class A Common Stock
In the event that a U.S. Holder’s shares of Class A common stock is redeemed, the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the shares Class A common stock under Section 302 of the Code. Whether the redemption qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by the U.S. Holder (including any stock constructively owned by the U.S. Holder as a result of owning warrants) relative to all of our shares both before and after the redemption. The redemption of the shares of Class A common stock generally will be treated as a sale of the shares of Class A common stock (rather than as a distribution) if the redemption (i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only shares of stock actually owned by the U.S. Holder, but also shares of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to shares of stock owned directly, shares of stock owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any shares of stock the U.S. Holder has a right to acquire by exercise of an option, which would generally include shares of Class A common stock which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding shares of voting stock actually and constructively owned by the U.S. Holder immediately following the redemption of shares of Class A common stock must, among other requirements, be less than 80% of our outstanding shares of voting stock actually and constructively owned by the U.S. Holder immediately before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (i) all of the shares of our stock actually and constructively owned by the U.S. Holder are redeemed or (ii) all of the shares of our stock actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of shares of stock owned by certain family members and the U.S. Holder does not constructively own any other shares of stock. The redemption of the shares of Class A common stock will not be essentially equivalent to a dividend if a U.S. Holder’s conversion results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.”
If none of the foregoing tests are satisfied, then the redemption will be treated as a distribution and the tax effects will be as described below under “U.S. Federal Income Tax Considerations to U.S. Holders — Taxation of Distributions.”
U.S. Holders of shares of Class A common stock considering exercising their redemption rights should consult their own tax advisors as to whether the redemption of their shares of Class A common stock will be treated as a sale or as a distribution under the Code.
Gain or Loss on a Redemption of Shares of Class A Common Stock Treated as a Sale
If the redemption qualifies as a sale of shares of Class A common stock, a U.S. Holder must treat any gain or loss recognized as capital gain or loss. Any such capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for the shares of Class A common stock so disposed of exceeds one year. Generally, a U.S. Holder will recognize gain or loss in an amount equal to the difference between (i) the amount of cash received in such redemption (or, if the share of Class A common stock is held as part of a unit at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the share of Class A common stock based upon the then fair market values of the share of Class A common stock and the one-third of one warrant included in the unit) and (ii) the U.S. Holder’s adjusted tax basis in its shares of Class A common stock so redeemed. A U.S. Holder’s adjusted tax basis in its shares of Class A common stock generally will equal the U.S. Holder’s acquisition cost (that is, the portion of the purchase price of a unit allocated to a share of Class A common stock or the U.S. Holder’s initial basis for the share of Class A common stock received upon exercise of a whole warrant) less any prior distributions treated as a return of capital. Long-term capital gain realized by a non-corporate U.S. Holder generally will be taxable at a reduced rate. The deduction of capital losses is subject to limitations.
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Taxation of Distributions
If the redemption does not qualify as a sale of shares of Class A common stock, the U.S. Holder will be treated as receiving a distribution. In general, any distributions to U.S. Holders generally will constitute dividends for United States federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its shares of Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the shares of Class A common stock and will be treated as described under “U.S. Federal Income Tax Considerations to U.S. Holders — Gain or Loss on a Redemption of Shares of Class A Common Stock Treated as a Sale”. Dividends we pay to a U.S. Holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions, and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder generally will constitute “qualified dividends” that will be taxable at a reduced rate.
U.S. Federal Income Tax Considerations to Non-U.S. Holders
This section is addressed to Non-U.S. Holders of shares of Class A common stock that elect to have their shares of Class A common stock redeemed for cash. For purposes of this discussion, a “Non-U.S. Holder” is a beneficial owner (other than a partnership) that so redeems its shares of Class A common stock and is not a U.S. Holder.
Redemption of Shares of Class A Common Stock
The characterization for United States federal income tax purposes of the redemption of a Non-U.S. Holder’s shares of Class A common stock generally will correspond to the United States federal income tax characterization of such a redemption of a U.S. Holder’s shares of Class A common stock, as described under “U.S. Federal Income Tax Considerations to U.S. Holders”.
Non-U.S. Holders of shares of Class A common stock considering exercising their redemption rights should consult their own tax advisors as to whether the redemption of their shares of Class A common stock will be treated as a sale or as a distribution under the Code.
Gain or Loss on a Redemption of Shares of Class A Common Stock Treated as a Sale
If the redemption qualifies as a sale of shares of Class A common stock, a Non-U.S. Holder generally will not be subject to United States federal income or withholding tax in respect of gain recognized on a sale of its shares of Class A common stock, unless:
• the gain is effectively connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. Holder), in which case the Non-U.S. Holder will generally be subject to the same treatment as a U.S. Holder with respect to the redemption, and a corporate Non-U.S. Holder may be subject to the branch profits tax at a 30% rate (or lower rate as may be specified by an applicable income tax treaty);
• the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year in which the redemption takes place and certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30% tax on the individual’s net capital gain for the year; or
• we are or have been a “U.S. real property holding corporation” for United States federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. Holder held shares of Class A common stock, and, in the case where shares of Class A common stock are regularly traded on an established securities market, the Non-U.S. Holder has owned, directly or constructively, more than 5% of our outstanding shares of Class A common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. Holder’s holding period for the shares of Class A common stock. We do not believe we are or have been a U.S. real property holding corporation.
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Taxation of Distributions
If the redemption does not qualify as a sale of shares of Class A common stock, the Non-U.S. Holder will be treated as receiving a distribution. In general, any distributions we make to a Non-U.S. Holder of shares of Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under United States federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. Holder’s adjusted tax basis in its shares of Class A common stock and, to the extent such distribution exceeds the Non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or other disposition of the shares of Class A common stock, which will be treated as described under “U.S. Federal Income Tax Considerations to Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Shares of Class A Common Stock”. Dividends we pay to a Non-U.S. Holder that are effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the United States generally will not be subject to United States withholding tax, provided such Non-U.S. Holder complies with certain certification and disclosure requirements. Instead, such dividends generally will be subject to United States federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders (subject to an exemption or reduction in such tax as may be provided by an applicable income tax treaty). If the Non-U.S. Holder is a corporation, dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).
As previously noted above, the foregoing discussion of certain material U.S. federal income tax consequences is included for general information purposes only and is not intended to be, and should not be construed as, legal or tax advice to any stockholder. We once again urge you to consult with your own tax adviser to determine the particular tax consequences to you (including the application and effect of any U.S. federal, state, local or foreign income or other tax laws) of the receipt of cash in exchange for shares in connection with the Extension Amendment Proposal.
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Overview
Date, Time and Place. The Special Meeting of the Company’s stockholders will be held at 10:00 a.m. Eastern Time on September [ ], 2023 as a virtual meeting. You will be able to attend, vote your shares and submit questions during the Special Meeting via a live webcast available at https://www.cstproxy.com/[ ]. The Special Meeting will be held virtually over the internet by means of a live audio webcast. Only stockholders who own shares of our common stock as oflater, the close of business on the Record Date will be entitled to attendtenth (10th) following the Special Meeting.
To register forday on which the Special Meeting, please follow these instructions as applicable to the naturepublic announcement of your ownership of our common stock.
If your shares are registered in your name with our transfer agent and you wish to attend the online-only Special Meeting, go to https://www.cstproxy.com/[ ], enter the control number you received on your proxy card and click on the “Click here” to preregister for the online meeting link at the top of the page. Just prior to the start of the Special Meeting you will need to log back into the Special Meeting site using your control number. Pre-registration is recommended but is not required in order to attend.
Beneficial stockholders who wish to attend the online-only Special Meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the online-only Special Meeting. After contacting our transfer agent, a beneficial holder will receive an e-mail prior to the Special Meeting with a link and instructions for entering the Special Meeting. Beneficial stockholders should contact our transfer agent at least five business days prior to the date of the Special Meeting.
Quorum. A quorumannual meeting was first made. The written notice must include certain information and satisfy the requirements set forth in our Bylaws, a copy of stockholders is necessary to hold a valid meeting. Holders of a majority in voting power of our common stock issued and outstanding on the Record Date and entitled to vote at the Special Meeting, present in person or represented by proxy, constitute a quorum. Your shareswhich will be counted towardssent to any stockholder upon written request to the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote online at the Special Meeting. Abstentions will be counted towards the quorum requirement. In the absence of a quorum, the chairmanCorporate Secretary of the Special Meeting has power to adjourn the Special Meeting. As of the Record Date, 4,875,050 shares of our common stock would be required to achieve a quorum. Based on the shares held by the Sponsor and our officers and directors, we will have sufficient shares of common stock at the Special Meeting to achieve a quorum.Company.
Voting Power; Record Date. You will be entitled to vote or direct votes to be cast at the Special Meeting, if you owned shares of common stock at the close of business on July 31, 2023, the Record Date. You will have one vote per proposal for each share of the Company’s common stock you owned at that time. The Company’s warrants do not carry voting rights.
Votes Required. Approval of the Extension Amendment Proposal will require the affirmative vote of holders of at least 65% of the Company’s common stock outstanding on the Record Date, including the Founder Shares and the Private Placement Shares. If you do not vote or you abstain from voting on a proposal, your action will have the same effect as an “AGAINST” vote. Broker non-votes will have the same effect as “AGAINST” votes.
At the close of business on the Record Date, there were 6,976,589 shares of Class A common stock and 1,250,000 shares of Class B common stock outstanding, each of which entitles its holder to cast one vote per proposal.
If you do not want the Extension Amendment Proposal approved, you must abstain, not vote, or vote “AGAINST” the Extension Amendment. You will be entitled to redeem your Public Shares for cash in connection with this vote whether or not you vote on the Extension Amendment Proposal so long as you elect to redeem your Public Shares for a pro rata portion of the funds available in the Trust Account in connectionCommunications with the Extension Amendment Proposal. The Company anticipates that a public stockholder who tenders shares for redemption in connectionBoard
Stockholders and other interested parties wishing to communicate with the voteBoard of Directors, the non-management directors or with an individual Board member concerning the Company may do so by writing to approve the Extension Amendment Proposal would receive payment ofBoard, to the redemption price for such shares soon afternon-management directors or to the completion ofparticular Board member and mailing the Extension.
The approval ofcorrespondence to XBP Europe Holdings, Inc., 2701 E. Grauwyler Rd., Irving, Texas 75061, Attention: Secretary. If from a stockholder, the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by stockholders represented in person or by proxy at the Special Meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or online at the Special Meeting will have no effect on the outcomeenvelope
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of any vote on the Adjournment Proposal. Abstentionsshould indicate that it contains a stockholder communication. All such communications will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the outcome of the Adjournment Proposal. If you do not want the Adjournment Proposal approved, you must vote “AGAINST” the Adjournment Proposal.
As of the date of this Proxy Statement, the Sponsor currently holds 82.2% of the issued and outstanding shares of our common stock and accordingly, the Sponsor will have the ability, voting on its own, to approve the Extension Amendment Proposal. We expect the Sponsor to vote any shares of our common stock held by it in favor of the proposals to be presented at the Special Meeting, and if the Sponsor votes its shares in favor of the proposals, no additional shares would be needed to approve the Extension Amendment Proposal or the Adjournment Proposal.
Redemption Rights. If the Extension Amendment Proposal is approved, and the Extension is implemented, each public stockholder may seek to redeem its Public Shares at a per-share price, payable in cash, equalforwarded to the aggregate amount then on deposit indirector or directors to whom the Trust Account, including interest (which interest shall be netcommunications are addressed.
Under SEC rules, a single set of taxes payable), divided by the number of then outstanding Public Shares. As of the Record Date, based on funds in the Trust Account of approximately $15.83 million as of such date, the pro rata portion of the funds available in the Trust Account for the redemption of Public Shares was approximately $11.02 per share (which does not take into account the removal of any accrued interest in the Trust Account to pay our taxesproxy statements and any remaining contributions to be made to the Trust Account pursuant to the Third Extension Loan). Holders of Public Shares who do not elect to redeem their Public Shares in connection with the Extension will retain the right to redeem their Public Shares in connection with any stockholder vote to approve the XBP Europe Business Combination, or if the Company has not consummated a Business Combination by the Extended Date. See section entitled “The Extension Amendment Proposal — Redemption Rights.”
If you have elected to redeem your Public Shares in connection with the Business Combination Special Meeting and also desire to have such shares redeemed in connection with the Special Meeting, then you must separately elect to redeem your Public Shares in connection with the Special Meeting. If you do not take such additional action, your Public Shares will not be submitted for redemption in connection with the Special Meeting and will only be redeemed in connection with the Business Combination Special Meeting. If you elect to redeem such shares in connection with the Special Meeting, you will receive a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding Public Shares.
If the Company’s stockholders approve the XBP Europe Business Combination at the Business Combination Special Meeting and the other conditions to the XBP Europe Business Combination are then satisfied or will be satisfied or waived on or before the Termination Date, then the Company intends to complete the XBP Europe Business Combination on or before the Termination Date. If the Company completes the XBP Europe Business Combination on or before September16, 2023, it will cancel the Special Meeting and will not implement the Extension. If the Company does not implement the Extension, it will not redeem any Public Shares submitted for redemption solely in connection with the Special Meeting (but will redeem all Public Shares previously submitted for Redemption in connection with the Business Combination Special Meeting). The Company intends to hold the Special Meeting to approve the Extension and file the proposed Extension Amendment only if it has determined as of the time of the Special Meeting that it may not be able to complete the XBP Europe Business Combination on or before the Termination Date.
Appraisal Rights. Our stockholders do not have appraisal rights in connection with the Extension Amendment Proposal under the DGCL.
Proxies; Board Solicitation; Proxy Solicitor. Your proxy is being solicited by the Board on the proposals being presented to stockholders at the Special Meeting. The Company has engaged Morrow Sodali to assist in the solicitation of proxies for the Special Meeting. No recommendation is being made as to whether you should elect to redeem your Public Shares. Proxiesannual reports may be solicited in person or by telephone. If you grant a proxy, you may still revoke your proxy and vote your shares online at the Special Meeting if you are a holder of record of the Company’s common stock. You may contact Morrow Sodali at (800) 662-5200 (toll free) or by email at CFFE.info@investor.morrowsodali.com.
Recommendation of the Board. After careful consideration, the Board determined that each of the proposals is fair to and in the best interests of the Company and its stockholders. The Board has approved and declared advisable and recommends that you vote or give instructions to vote “FOR” each of these proposals.
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BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information regarding the beneficial ownership of the shares of the Company’s common stock outstanding as of the Record Date based on information obtained from the persons named below, with respect to the beneficial ownership of shares of the Company’s common stock, by:
• each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
• each of our executive officers and directors that beneficially owns shares of common stock; and
• all our officers and directors as a group.
In the table below, percentage ownership is based on 8,226,589 shares of our common stock, consisting of (i) 6,976,589 shares of Class A common stock and (ii) 1,250,000 shares of Class B common stock, issued and outstanding as of the Record Date. On all matters to be voted upon, except for the election of directors of the board, holders of the shares of Class A common stock and shares of Class B common stock vote together as a single class. Currently, all of the shares of Class B common stock are convertible into Class A common stock on a one-for-one basis.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this Proxy Statement.
Name and Address of Beneficial Owner | Class A Common Stock | Class B Common Stock | Approximate | ||||||||||
Number of | Approximate | Number of | Approximate | ||||||||||
Directors and Officers(1) |
|
|
| ||||||||||
Howard W. Lutnick(2) | 5,537,500 | 79.4 | % | 1,228,000 | 98.2 | % | 82.2 | % | |||||
Jane Novak | — | — |
| — | — |
| — |
| |||||
Robert Hochberg | — | — |
| 11,000 | * |
| * |
| |||||
Charlotte Blechman | — | — |
| 11,000 | * |
| * |
| |||||
Steven Bisgay | — | — |
| — | — |
| — |
| |||||
Mark Kaplan | — | — |
| — | — |
| — |
| |||||
Robert Sharp | 2,500 | * |
| — | — |
| * |
| |||||
All executive officers and directors as a group (7 individuals) | 5,540,000 | 79.4 | % | 1,250,000 | 100 | % | 82.5 | % | |||||
|
|
| |||||||||||
5% or More Stockholders: |
|
|
| ||||||||||
CFAC Holdings VIII, LLC(2) | 5,537,500 | 79.4 | % | 1,228,000 | 98.2 | % | 82.2 | % | |||||
Owl Creek Parties(3) | 600,000 | 8.6 | % | — | — |
| 7.3 | % |
____________
(1) Unless otherwise noted, the business address of each of the following entities or individuals is c/o CF Acquisition Corp. VIII, 110 East 59th Street, New York, New York 10022.
(2) Interests shown consist of 1,228,000 shares of Class B common stock, which shares are convertible into shares of Class A common stock on a one-for-one basis, 5,000,000 shares of Class A common stock (which are Founder Shares and were converted from shares of Class B common stock into shares of Class A common stock on March 6, 2023), and 537,500 Private Placement Shares. The Sponsor is the record holder of such shares. Cantor Fitzgerald, L.P. (“Cantor”) is the sole member of the Sponsor. CF Group Management, Inc. (“CFGM”) is the managing general partner of Cantor. Mr. Lutnick, our Chairman and Chief Executive Officer, is the trustee of CFGM’s sole stockholder. As such, each of Cantor, CFGM and Mr. Lutnick may be deemed to have beneficial ownership of the common stock held directly by the Sponsor. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Excludes shares underlying the forward purchase contract and the private placement warrants, as such shares may not be voted or disposed of by the Sponsor within 60 days of the date hereof. The principal address of the Sponsor is 110 East 59th Street, New York, New York 10022.
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(3) Based on a Schedule 13G filed with the SEC on February 9, 2023, Owl Creek Asset Management, L.P. (“Owl Creek”), a Delaware limited partnership and the investment manager of Owl Creek Credit Opportunities Master Fund, Ltd. (the “Owl Creek Fund”) and Jeffrey A. Altman, as managing member of Owl Creek (together with Owl Creek and the Owl Creek Fund, the “the Owl Creek Parties”), may be deemed to be the beneficial owner of the 500,000 shares of CF VIII Class A Common Stock owned by the Owl Creek Fund. The number of CF VIII Public Shares held by the Owl Creek Parties is based on the number of shares held on December 31, 2022, which may not reflect any redemption of shares by the Owl Creek Parties in connection with the Third Extension or any other transactions after December 31, 2022. Accordingly, the number of CF VIII Public Shares and the percentages set forth in the table may not reflect the Owl Creek Parties’ current beneficial ownership. The principal business address for the reporting persons is 640 Fifth Avenue, 20th Floor, New York, NY 10019.
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For any proposal to be considered for inclusion in our Proxy Statement for submission to the stockholders at the Company’s next annual meeting of stockholders, it must be submitted in writing and comply with the requirements of Rule 14a-8 of the Exchange Act and our bylaws.
Unless we have received contrary instructions, we may send a single copy of this Proxy Statementsent to any household at which two or more stockholders reside if we believe the stockholders arethey appear to be members of the same family. Each stockholder continues to receive a separate proxy card. This process, knownprocedure, referred to as “householding”,“householding,” reduces the volume of duplicate information received atstockholders receive and reduces mailing and printing expenses. At the present time, we do not “household” for any one household and helps to reduce our expenses. However, if stockholders prefer to receive multiple sets of our disclosure documents at the same address this year orstockholders of record. If a stockholder holds shares in future years, the stockholders should follow the instructions described below. Similarly, if an address is shared with another stockholder and together both of the stockholders would like to receive only a single set of our disclosure documents, the stockholders should follow these instructions:
• If the shares are registered in thestreet name, of the stockholder, the stockholder should contact us at CFVIII@cantor.com to inform us ofhowever, such stockholder’s request; or
• If abeneficial holder’s bank, broker or other nominee holdsmay be delivering only one copy of our Proxy Statement and Annual Report on Form 10-K to multiple stockholders of the shares,same household who share the stockholder should contact thesame address, and may continue to do so, unless such stockholder’s bank, broker or other nominee directly.
WHERE YOU CAN FIND MORE INFORMATION
has received contrary instructions from one or more of the affected stockholders in the household. We file reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read the Company’s SEC filings, including this Proxy Statement, over the Internet at the SEC’s website at http://www.sec.gov.
If you would like additional copieswill deliver promptly, upon written or oral request, a separate copy of this Proxy Statement and our Annual Report on Form 10-K to a stockholder at a shared address to which a single copy of the documents was delivered. A beneficial holder who wishes to receive a separate copy of our Proxy Statement and Annual Report on Form 10-K, now or in the future, should submit this request by writing to Exela Technologies, Inc., 2701 E. Grauwyler Rd., Irving, Texas 75061, Attention: Investor Relations Department, or by calling our Investor Relations Department at 1-(844) 935-2832. Beneficial holders sharing an address who are receiving multiple copies of proxy materials and annual reports and who wish to receive a single copy of such materials in the future should contact their bank, broker or other nominee directly to request that only a single copy of each document be mailed to all stockholders at the shared address in the future. Stockholders of record receiving multiple copies of our Proxy Statement and Annual Report on Form 10-K may request householding by contacting our Investor Relations Department either in writing or by telephone at the above address or phone number.
Access to Virtual-only Meeting and Participation at the virtual Annual Meeting
As described in the Notice of Annual Meeting and Proxy Statement, you are entitled to participate in the Annual Meeting if you were a stockholder as of the close of business on the Record Date. You will not be able to attend the Annual Meeting in person. Instead, you can attend the Annual Meeting by accessing the virtual meeting center at www.virtualshareholdermeeting.com/XBP2024.
● | Stockholders of Record: If you were a stockholder of record at the close of business on April 17, 2024 (i.e., your shares are held in your own name in the records of our transfer agent), you can attend the Annual Meeting by accessing the meeting center www.virtualshareholdermeeting.com/XBP2024 entering the 16-digit control number on the proxy previously received. |
● | Beneficial Owners: If you were a beneficial owner of Common Stock at the close of business on April 17, 2024 (i.e., your shares are held by your broker in “street name”), you can attend the Annual Meeting by accessing the meeting center at www.virtualshareholdermeeting.com/XBP2024 and entering the 16-digit control number found on the notice and instructions received from your broker or other nominee. |
If you do not have your 16-digit control number, you will be able to access and listen to the Annual Meeting as a guest, but you will not be able to vote your shares or submit questions aboutduring the proposalsAnnual Meeting.
Instructions on how to connect to the Annual Meeting and participate via the Internet, including how to demonstrate proof of stock ownership, ask questions, and vote your shares, are posted at www.virtualshareholdermeeting.com/XBP2024.
Stockholders will also be able to submit questions through the platform being used for the Annual Meeting. Stockholders may ask questions that are confined to matters properly presented at the SpecialAnnual Meeting and of general concern to the Company. The Company will use reasonable efforts to answer all questions pertinent to meeting matters
40
during the Annual Meeting, subject to time constraints and the rules of conduct for the Annual Meeting. If we receive questions on similar topics, we may group such questions together and provide a single response.
The Annual Meeting will begin promptly at 1:00 p.m. (Eastern Time) on June 13, 2024. We encourage you to access the Annual Meeting prior to the start time. Online access will open approximately at 12:45 p.m. (Eastern Time), and you should contactallow ample time to log in to the Company’s proxy solicitation agent atAnnual Meeting and test your computer audio system. We recommend that you carefully review in advance the following addressprocedures needed to gain admission to the Annual Meeting.
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting log in page.
The virtual Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and telephone number:Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. You should ensure that you have a strong Internet connection wherever they intend to participate in the Annual Meeting. You should also give yourself plenty of time to log in and ensure that you can hear streaming audio prior to the start of the Annual Meeting.
Morrow Sodali LLC333 Ludlow Street, 5th Floor, South TowerStamford, CT 06902Toll Free: (800) 662-5200 or (203) 658-9400Email: CFFE.info@investor.morrowsodali.comWHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, WE URGE YOU TO VOTE AND SUBMIT YOUR PROXY IN ADVANCE OF THE ANNUAL MEETING.
You may also obtain these documents by requesting them via e-mail from
41
XBP EUROPE HOLDINGS, INC.
2024 Stock Incentive Plan
Effective , 2024
1. | Purpose. |
The purpose of the Plan is to assist the Company at CFVIII@cantor.com.
If you are a stockholderin attracting, retaining, motivating, and rewarding certain employees, officers, directors, and consultants of the Company and its Affiliates and promoting the creation of long-term value for stockholders of the Company by closely aligning the interests of such individuals with those of such stockholders. The Plan authorizes the award of Stock-based and cash-based incentives to Eligible Persons to encourage such Eligible Persons to expend maximum effort in the creation of stockholder value.
2. | Definitions. |
For purposes of the Plan, the following terms shall be defined as set forth below:
A-1
35
“Change in Control” means:
Pursuant to Section 242 of theDelaware General Corporation Law
CF ACQUISITION CORP. VIII (the “Corporation”), a corporation organized and existing under the lawschange in ownership or control of the StateCompany effected through a transaction or series of Delaware, does hereby certify as follows:
1. The nametransactions (other than an offering of the Corporation is CF Acquisition Corp. VIII. The Corporation’s Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on July 8, 2020 (the “Original Certificate”). The first certificate of amendment of the Original Certificate was filed with the Secretary of State of the State of Delaware on November 11, 2020. An Amended and Restated Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on March 11, 2021 (the “Amended and Restated Certificate of Incorporation”). An AmendmentStock to the Amended and Restated Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on March 9, 2022 (the “First Amendment”). The Second Amendment to the Amended and Restated Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on September 29, 2022 (the “Second Amendment”). The Third Amendment to the Amended and Restated Certificate of Incorporation was filed in the office of the Secretary of State of the State of Delaware on March 15, 2023 (the “Third Amendment”)
2. This Fourth Amendment to the Amended and Restated Certificate of Incorporation amends the Amended and Restated Certificate of Incorporation of the Corporation, as amended by the First Amendment, the Second Amendment and the Third Amendment.
3. This Fourth Amendment to the Amended and Restated Certificate of Incorporation was duly adopted by the affirmative vote of the holders of 65% of the stock entitled to vote atgeneral public through a meeting of stockholders in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware (the “DGCL”).
4. The text of Section 9.1(b) of Article IX is hereby amended and restated to read in full as follows:
(b) Immediately after the Offering, a certain amount of the net offering proceeds received by the Corporation in the Offering (including the proceeds of any exercise of the underwriters’ over-allotment option, if any) and certain other amounts specified in the Corporation’s registration statement on Form S-1, as initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 19, 2021, as amended (the “Registration Statement”), shall be deposited in a trust account (the “Trust Account”), established for the benefit of the Public Stockholders (as defined below)or similar non-U.S. regulatory agency or pursuant to a trust agreement describedNon-Control Transaction) whereby any “person” (as defined in Section 3(a)(9) of the Exchange Act) or any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other than the Company or any of its Affiliates, an employee benefit plan sponsored or maintained by the Company or any of its Affiliates (or its related trust), or any underwriter temporarily holding securities pursuant to an offering of such securities, directly or indirectly acquire “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities eligible to vote in the Registration Statement (the “Trust Agreement”). Except for the withdrawal of interest to pay taxes, noneelection of the funds heldBoard (the “Company Voting Securities”);
A-2
Notwithstanding the foregoing, (x) a Change in Control shall not be open fordeemed to occur solely because any person acquires beneficial ownership of fifty percent (50%) or more of the Company Voting Securities as a full business dayresult of an acquisition of Company Voting Securities by the Company that reduces the number of Company Voting Securities outstanding; provided that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control shall then be deemed to occur, and (y) with respect to the payment of any amount that constitutes a deferral of compensation subject to Section 409A of the Code payable upon a Change in Control, a Change in Control shall not be deemed to have occurred, unless the Change in Control constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company under Section 409A(a)(2)(A)(v) of the Code.
A-3
A-4
time.
A-5
3. | Administration. |
A-6
4. | Shares Available Under the Plan; Other Limitations. |
A-7
Annex A-1
5. | Options. |
IN WITNESS WHEREOF, CF Acquisition Corp. VIII has caused this Fourth Amendmentfollowing payment methods: (1) in immediately available funds in U.S. dollars, or by certified or bank cashier’s check, (2) by delivery of shares of Stock having a value equal to the Amended and Restated Certificateexercise price, (3) by a broker-assisted cashless exercise in accordance with procedures approved by the Committee, whereby payment of Incorporationthe Option exercise price or tax withholding obligations may be satisfied, in whole or in part, with shares of Stock subject to be duly executed in its name and on its behalfthe Option by an authorized officer asdelivery of this __ day of September, 2023.an
A-8
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Annex A-2
(g) | Special Provisions Applicable to Incentive Stock Options. |
A-9
6. | Restricted Stock. |
SPECIAL MEETING OF STOCKHOLDERSSEPTEMBER [], 2023YOUR VOTE IS IMPORTANT
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORSFOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER [], 2023
General. Restricted Stock may be granted to Eligible Persons in such form and having such terms and conditions as the Committee shall deem appropriate. The undersigned, revokingprovisions of separate Awards of Restricted Stock shall be set forth in separate Restricted Stock Agreements, which agreements need not be identical. Subject to the restrictions set forth in Section 6(b) hereof, and except as otherwise set forth in the applicable Restricted Stock Agreement, the Participant shall generally have the rights and privileges of a stockholder as to such Restricted Stock, including the right to vote such Restricted Stock. Unless otherwise set forth in a Participant’s Restricted Stock Agreement, cash dividends and stock dividends, if any, previous proxies relating to these shares with respect to the Extension Amendment ProposalRestricted Stock shall be withheld by the Company for the Participant’s account, and shall be subject to forfeiture to the same degree as the shares of Restricted Stock to which such dividends relate. Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends withheld.
7. | Restricted Stock Units. |
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8. | Stock Appreciation Rights. |
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9. | Performance Awards. |
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10. | Other Stock-Based Awards. |
The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based upon or related to Stock, as deemed by the Committee to be consistent with the purposes of the Plan. The Committee may also grant Stock as a bonus (whether or not subject to any vesting requirements or other restrictions on transfer), and may grant other Awards in lieu of obligations of the Company or an Affiliate to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements, subject to such terms as shall be determined by the Committee. The terms and conditions applicable to such Awards shall be determined by the Committee and evidenced by Award Agreements, which agreements need not be identical.
11. | Adjustment for Recapitalization, Merger, etc. |
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Payments to holders pursuant to paragraph (3) above shall be made in cash or, in the sole discretion of the Committee, and to the extent applicable, in the form of such other consideration necessary for a Participant to receive property, cash, or securities (or a combination thereof) as such Participant would have been entitled to receive upon the occurrence of the transaction if the Participant had been, immediately prior to such transaction, the holder of the number of shares of Stock covered by the Award at such time (less any applicable exercise or base price). In addition, in connection with any Corporate Event, prior to any payment or adjustment contemplated under this subsection (b), the Committee may require a Participant to (A) represent and warrant as to the unencumbered title to his or her Awards, (B) bear such Participant’s pro-rata share of any post-closing indemnity obligations, and be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, and similar conditions as the other holders of Stock, and (C) deliver customary transfer documentation as reasonably determined by the Committee. The Committee need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants. The Committee may take different actions with respect to the vested and unvested portions of an Award.
12. | Cancellation and Rescission of Awards. |
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13. | Use of Proceeds. |
The proceeds received from the sale of Stock pursuant to the Plan shall be used for general corporate purposes.
14. | Rights and Privileges as a Stockholder. |
Except as otherwise specifically provided in the Plan, no Person shall be entitled to the rights and privileges of Stock ownership in respect of shares of Stock that are subject to Awards hereunder until such shares have been issued to that Person.
15. | Transferability of Awards. |
Awards may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the applicable laws of descent and distribution, and to the extent subject to exercise, Awards may not be exercised during the lifetime of the grantee other than by the grantee. Notwithstanding the foregoing, except with respect to Incentive Stock Options, Awards and a Participant’s rights under the Plan shall be transferable for no value to the extent provided in an Award Agreement or otherwise determined at any time by the Committee.
16. | Employment or Service Rights. |
No individual shall have any claim or right to be granted an Award under the Plan or, having been selected for the grant of an Award, to be selected for the grant of any other Award. Neither the Plan nor any action taken hereunder shall be construed as giving any individual any right to be retained in the employ or service of the Company or an Affiliate of the Company.
17. | Compliance with Laws. |
The obligation of the Company to deliver Stock upon issuance, vesting, exercise, or settlement of any Award shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any shares of Stock pursuant to an Award unless such shares have been properly registered for sale with the U.S. Securities and Exchange Commission pursuant to the Securities Act (or with a similar non-U.S. regulatory agency pursuant to a similar law or regulation) or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale or resale under the Securities Act any of the shares of Stock to be offered or sold under the Plan or any shares of Stock to be issued upon exercise or settlement of Awards. If the shares of Stock offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Act, the Company may restrict the transfer of such shares and may legend the Stock certificates representing such shares in such manner as it deems advisable to ensure the availability of any such exemption.
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18. | Withholding Obligations. |
As a condition to the issuance, vesting, exercise, or settlement of any Award (or upon the making of an election under Section 83(b) of the Code), the Committee may require that a Participant satisfy, through deduction or withholding from any payment of any kind otherwise due to the Participant, or through such other arrangements as are satisfactory to the Committee, the amount of all federal, state, and local income and other taxes of any kind required or permitted to be withheld in connection with such issuance, vesting, exercise, or settlement (or election). The Committee, in its discretion, may permit shares of Stock to be used to satisfy tax withholding requirements, and such shares shall be valued at their Fair Market Value as of the issuance, vesting, exercise, or settlement date of the Award, as applicable. Depending on the withholding method, the Company may withhold by considering the applicable maximum statutorily required withholding rates or other applicable withholding rates in the applicable Participant’s jurisdiction.
19. | Amendment of the Plan or Awards. |
20. | Termination or Suspension of the Plan. |
The Board or the Committee may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on day before the tenth (10th) anniversary of the date the stockholders of the Company approve the Plan. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated; provided, however, that following any suspension or termination of the Plan, the Plan shall remain in effect for the purpose of governing all Awards then outstanding hereunder until such time as all Awards under the Plan have been terminated, forfeited, or otherwise canceled, or earned, exercised, settled, or otherwise paid out, in accordance with their terms.
21. | Effective Date of the Plan. |
The Plan is effective as of the Effective Date, subject to stockholder approval.
22. | Miscellaneous. |
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THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” EACH OF PROPOSAL 1 AND PROPOSAL 2 (IF PRESENTED) CONSTITUTING THE EXTENSION AMENDMENT PROPOSAL AND THE ADJOURNMENT PROPOSAL.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY.
(Continued and to be marked, dated and signed on reverse side)Important Notice Regarding the Availability of Proxy Materials for theSpecial Meeting of Stockholders to be held on September [], 2023:
This notice of meeting and the accompanying Proxy Statement are available athttps://www.cstproxy.com/[ ].
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Date: , 2023
Signature
Signature (if held jointly)
Signature should agree with name printed hereon. If stock is held in the name of more than one person, EACH joint owner should sign. Executors, administrators, trustees, guardians and attorneys should indicatesuch policy, the capacitypolicy with the most restrictive clawback or recoupment provisions shall govern such Award, subject to applicable law.
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PLEASE SIGN, DATE AND RETURN THE PROXY IN THE ENVELOPE ENCLOSED TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY. THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE ABOVESIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” EACH OF PROPOSAL 1 AND PROPOSAL 2 (IF PRESENTED). THIS PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.***
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. V42752-P10651 For Withhold For Against Abstain ! ! ! ! ! ! ! XBP EUROPE HOLDINGS, INC. XBP EUROPE HOLDINGS, INC. 2701 E. GRAUWYLER ROAD IRVING, TEXAS 75061 Nominees: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. 1a. J. Coley Clark 1b. Martin P. Akins 2. To ratify the appointment of UHY LLP as the Company’s independent registered public accounting firm for fiscal year 2024. 3. To approve the XBP Europe Holdings, Inc. 2024 Stock Incentive Plan. NOTE: To transact such other business as may properly come before the meeting or any adjournment thereof. 1. To elect to the Board of Directors the two nominees named in the Proxy Statement who have been nominated by the Board of Directors to serve as Class I directors and whose current terms will expire at the Annual Meeting. The Board of Directors recommends you vote FOR the following: The Board of Directors recommends you vote FOR proposals 2 and 3. ! ! ! VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on June 12, 2024. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/XBP2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on June 12, 2024. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SCAN TO VIEW MATERIALS & VOTEw |
V42753-P10651 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Proxy Statement and Form 10-K are available at www.proxyvote.com. Continued and to be signed on reverse side XBP EUROPE HOLDINGS, INC. Annual Meeting of Stockholders June 13, 2024 1:00 PM, ET This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) Bernie Hau or Ana Krstic, or either of them, as proxies, each with the power to appoint his/her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot and upon such other business as may properly come before the meeting, all of the shares of Common Stock of XBP Europe Holdings, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 1:00 PM, ET, on June 13, 2024, virtually via the Internet by visiting www.virtualshareholdermeeting.com/XBP2024 and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. |