CUSIP No. 69331C108
Page
4
of 12 Pages
The Company has publicly announced that it is conducting a process for the refreshment of its
board of directors (the Board) and that it anticipates that a majority of the Board will be new independent directors prior to the Companys 2019 annual meeting of shareholders. The Company has also publicly announced that it is
conducting a process to identify a permanent CEO to lead the Company.
From time to time, representatives of the Reporting Person have
conducted discussions with representatives of the Company and other parties with respect to the Companys bankruptcy case and these processes. On March 8, 2019, the Reporting Person and two other shareholders, Redwood Capital Management,
LLC, a Delaware limited liability company, and Abrams Capital Management, L.P., a Delaware limited partnership (collectively, the Other Shareholders), had an initial joint conference call, together with financial advisers and counsel, to
discuss the status of discussions with representatives of the Company regarding the Board refreshment and CEO selection processes. During their telephone conference, each of the Reporting Person and the Other Shareholders mutually agreed to act in
concert to submit director candidate nominations to the Company if they collectively determined nominations to be appropriate.
On
March 15, 2019, the Reporting Person entered into a letter agreement (the Investor Agreement), a copy of which is filed as Exhibit 99.1 hereto, with the Other Shareholders, in respect of the Companys Board refreshment and CEO
selection processes. This Investor Agreement memorialized the parties determination on March 8, 2019 that they expected to work in concert for what they expected to be a brief period in relation to these matters. Unless the Reporting Person
withdraws from the Investor Agreement (which it may do at any time), the Reporting Person expects to act with respect to any such matter in accordance with the agreement or consensus of at least two of the three parties to the Investor Agreement. As
such, the Reporting Person and the Other Shareholders may be deemed to constitute a group for purposes of Rule
13d-3
under the Act.
Based on information provided by the Other Shareholders, the Reporting Person believes that it and the Other Shareholders beneficially own in
the aggregate 9.83% of the outstanding Shares as of the date of this Schedule 13D. Depending on the outcome of discussions with the Company, the Reporting Person (with or without one or both of the Other Shareholders) may submit proposed nominees
for election to the Board under the Companys director nomination bylaws, although it has not decided to do so as of the date of this Schedule 13D.
Except as set forth above, as of the date of this Schedule 13D, the Reporting Person and, to its knowledge, the Other Shareholders have no
plans or proposals that relate to or would result in any matter referred in items (a) through (j) of Item 4 of Schedule 13D.
Depending on market conditions and other factors, including developments in the Companys bankruptcy case, the Knighthead Funds may sell
Shares in the open market or in privately negotiated transactions or purchase or sell cash-settled derivatives, the value of which is measured by changes in trading prices of the Shares. The Investor Agreement prohibits purchases of additional
Shares. Accordingly, such purchases by the Reporting Person would require the consent of at least two of the three parties to the Investor Agreement or would require the Reporting Person to withdraw therefrom.
The Reporting Person also reserves the sole right to vote the Shares it beneficially owns or to take any other action with respect to such
Shares. The Reporting Person and each Other Shareholder have expressly represented and agreed that they have no other written or oral agreement or understanding with respect to the Shares and expressly reserve the right for any reason or no reason
to act independently with respect to the Company or their investment in it. The Reporting Person reserves the right to change its plans and make any proposal, either alone or with others, at any time.
The Reporting Person presently expects to terminate the Investor Agreement upon the Companys election of a refreshed Board and selection
of a permanent CEO acceptable to the Reporting Person. The Reporting Person reserves the right to terminate the Investor Agreement earlier or later, and to take any other action, alone or with others.