| Securities and Trading Markets |
| Material Modification to Rights of Security Holders |
On August 3, 2021, Compass Diversified Holdings (the “Trust”) and Compass Group Diversified Holdings LLC (the “Company”) (NYSE: CODI) (collectively “CODI”) held a Special Meeting of Shareholders (the “Special Meeting”). At the Special Meeting, the shareholders of the Trust voted to approve amendments to the Second Amended and Restated Trust Agreement, as amended through the date of the Special Meeting (the “Trust Agreement”), of the Trust to authorize the Company, acting through its board of directors, to cause the Trust to elect to be treated as a corporation for U.S. federal income tax purposes, without further approval of the shareholders, including amendments to Sections 1.1(a)(i), 2.4(b), 2.8, 2.11, 3.1, 3.3 and 9.2, the deletion of Section 3.4 and Exhibit B and the related new or revised definitions
Election” and “Preferred Shares” in the recitals and Section 1.1(b) of the Trust Agreement. At the Special Meeting, the shareholders of the Trust also voted to approve amendments to the Trust Agreement to authorize the Company, acting through its board of directors, to, at its election in the future, cause the Trust to be converted to a corporation, without further approval of the shareholders, including amendments to Sections 7.1 and 10.2 of the Trust Agreement. The Board also previously approved other amendments to the Trust Agreement to: (i) update provisions related to notice of shareholder business and director nominations in Section 5.8, inspection of records by shareholders of the Trust in Section 5.15, indemnification in Section 8.4(c) and early termination in Section 9.4, (ii) add an exclusive jurisdiction and forum selection provisions in Section 10.5, (iii) update information of the parties to the Trust Agreement, (iv) delete unnecessary and obsolete references in the Trust Agreement and (v) make conforming changes and other technical or
clean-up
changes.
Following the Special Meeting, the Company, as sponsor, BNY Mellon Trust of Delaware, as Delaware trustee, and Elias J. Sabo and Ryan J. Faulkingham, as regular trustees, entered into the Third Amended and Restated Trust Agreement of the Trust (the “Amended Trust Agreement”), which reflects the above amendments, effective August 3, 2021. The Amended Trust Agreement is attached hereto as Exhibit 3.1 and is incorporated herein by reference.
The shareholders also voted at the Special Meeting to approve amendments to the Fifth Amended and Restated Operating Agreement (the “LLC Agreement”) of the Company to authorize the board of directors of the Company to, if the Trust is converted to a corporation, amend the LLC Agreement as the board determines is necessary or appropriate to reflect such conversion, without further approval of the members of the Company, including amendments to Article 12 of the LLC Agreement. The Board also previously approved other amendments to the LLC Agreement to: (i) update the provisions related to the Company’s name in Section 1.2(a), indemnification in Section 6.22, limitation in liability of officers in Section 6.23, notice of member business and director nominations in Section 9.8, inspection of books and records by members in Section 11.1 and tax matters in Sections 5.3, 11.4, Article 13 and 14.4, (ii) add exclusive jurisdiction and forum selection provisions in Section 15.9, (iii) update the information of the parties to the LLC Agreement, (iv) delete unnecessary and obsolete references in the LLC Agreement and (v) make conforming changes and other technical or
clean-up
changes.
Following the Special Meeting, the Trust, as the holder of all trust interests of the Company, and Sostratus LLC, as the holder of all allocation interest of the Company, entered into the Sixth Amended and Restated Operating Agreement of the Company (the “Amended LLC Agreement”), which reflects the above amendments, effective August 3, 2021. The Amended LLC Agreement is attached hereto as Exhibit 3.2 and is incorporated herein by reference.
Subject to approval by the shareholders of the Amended Trust Agreement, the Board also previously approved amendments to Sections 7 and 9 of each of the share designations for the Trust’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”), 7.875% Series B
Rate Cumulative Preferred Shares (the “Series B Preferred Shares”) and 7.875% Series C Cumulative Preferred Shares (the “Series C Preferred Shares”), which are part of the Trust Agreement (the “Share Designation Amendments”). Following the Special Meeting, the Company, as sponsor, and Ryan J. Faulkingham, as regular trustee, executed the Amended and Restated Share Designation of Compass Diversified Holdings
