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Item 1.01
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Entry into a Material Definitive Agreement
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On February 2, 2021, Centrus Energy Corp.,
a Delaware corporation (“Centrus” or the “Company”), entered into an amendment to its existing Voting and
Nomination Agreement (as described below) and an Exchange Agreement (as described below) whereby the MB Group (as defined below)
agreed to support management’s recommendation on certain matters at the Company’s 2021 annual meeting of stockholders
(the “Annual Meeting”) and Kulayba LLC agreed to exchange shares of the Company’s Series B Senior Preferred Stock,
par value $1.00 per share (“Preferred Stock”) for shares of the Company’s Class A Common Stock, par value $0.10
per share (“Common Stock”) and a warrant to acquire additional shares of Common Stock (as described below).
As previously disclosed by the Company in
its Current Report on Form 8-K filed April 14, 2020, on April 13, 2020, Centrus entered into a Voting and Nomination Agreement
(the “Voting Agreement”) with Mr. Morris Bawabeh, Kulayba LLC and M&D Bawabeh Foundation, Inc. (collectively, the
“MB Group”). On February 2, 2021, Centrus and the MB Group entered into an amendment to the Voting Agreement, the First
Amendment to the Voting and Nomination Agreement, by and among the Company and the MB Group (the “Voting Agreement Amendment”).
Pursuant to the Voting Agreement Amendment, the MB Group agreed to cause all shares of Common Stock owned of record or beneficially
owned by the MB Group at the Annual Meeting to be voted in favor of (i) an amendment to extend the length of the term of the Company’s
Section 382 Rights Agreement dated as of April 6, 2016, as amended to date, for two years from June 30, 2021 to June 30, 2023 and
(ii) an increase of shares of Common Stock reserved for delivery under the Company’s Centrus Energy Corp 2014 Equity Incentive
Plan, as amended to date, of an additional 700,000 shares of Common Stock.
In connection with the entry into the Voting
Agreement Amendment, the Company and Kulayba LLC also entered into an Exchange Agreement, dated February 2, 2021 (the “Exchange
Agreement”), pursuant to which Kulayba LLC agreed to exchange (the “Exchange”) 3,873 shares of Preferred Stock,
representing $5,000,198 liquidation preference (including accrued and unpaid dividends), for (i) 231,276 shares of Common Stock
priced at the closing market price of $21.62 on the date the Exchange Agreement was signed and (ii) a Centrus Energy Corp. Warrant
to Purchase Common Stock (the “Warrant”), exercisable for 250,000 shares of Common Stock at an exercise price of $21.62
per share which was the closing market price on the date the Exchange Agreement was signed, subject to certain customary adjustments
pursuant to the terms of the Warrant. The Warrant is exercisable by Kulayba LLC for a period commencing on the closing date of
the Exchange and ending, unless sooner terminated as provided in the Warrant, on the first to occur of: (a) the second anniversary
of the closing date of the Exchange or (b) the last business day immediately prior to the consummation of a Fundamental Transaction
(as defined in the Warrant) which results in the shareholders of the Company immediately prior to such Fundamental Transaction
owning less than 50% of the voting equity of the surviving entity immediately after the consummation of the Fundamental Transaction.
The Company expects to retire upon closing of the exchange the 3,873 shares of Preferred Stock received by the Company under the
Exchange Agreement.
The
foregoing is a summary only and does not purport to be a complete description of all the terms, provisions, and agreements contained
in the Voting Agreement Amendment, the Exchange Agreement or the Warrant and is subject to and qualified in its entirety by reference
to the full text of (i) the Voting Agreement Amendment, which is filed herewith as Exhibit 10.1 and is hereby incorporated by reference
into this Item 1.01, (ii) the Exchange Agreement, which is filed herewith as Exhibit 10.2 and is hereby incorporated by reference
into this Item 1.01 and (iii) the Warrant, the form of which is filed herewith as Exhibit 4.1 and is hereby incorporated
into this Item 1.01.