UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): ~~January~~February 2610, 2022

PAE INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware

001-38643

82-3173473

(State or other jurisdiction

of incorporation)

(Commission
File number)

(I.R.S. Employer
Identification No.)


7799 Leesburg Pike, Suite 300 North
Falls Church, Virginia		22043
(Address of principal executive offices)		(zip code)

(703) 717-6000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value	PAE	Nasdaq Stock Market
Warrants	PAEWW	Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

~~Item~~Introductory ~~8.01~~Note ~~Other Events~~

AsOn ~~previously disclosed~~February 15, on2022 ~~October 25,~~(the ~~2021~~“Closing Date”), PAE Incorporated, a Delaware corporation (the “Company” or “PAE”), ~~entered~~completed ~~into~~the antransactions contemplated by the previously announced Agreement and Plan of Merger (the “Merger Agreement”), ~~with~~dated as of October 25, 2021, by and among the Company, Amentum Government Services Holdings LLC, a Delaware limited liability company (“Parent”), and Pinnacle Virginia Merger Sub Inc., a Delaware corporation and ana ~~indirect~~ wholly- owned indirect subsidiary of Parent (“Merger Sub”). ~~The~~On ~~Merger Agreement provides, among other things and upon~~ the ~~terms~~Closing ~~and subject to the conditions set forth in the Merger Agreement~~Date, ~~for the merger of~~ Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation ~~of the Merger and an indirect wholly-owned subsidiary of Parent~~ (the “~~Merger~~Surviving Corporation”). ~~In connection with the Merger, PAE filed with the Securities~~ and ~~Exchange Commission~~ a ~~definitive~~wholly ~~proxy~~owned ~~statement,~~indirect ~~dated~~subsidiary ~~January 11,~~of ~~2022~~Parent (the “~~Proxy Statement~~Merger”)~~, which PAE first mailed to its stockholders on or about January 12, 2022~~.

~~Litigation~~The ~~Related~~foregoing description of the Merger Agreement and the Merger is not complete and is subject to and entirely qualified by reference to the full text of the Merger Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission (the “SEC”) on October 26, 2021 and is incorporated by reference into this Introductory Note.

~~Following~~Item the announcement of the Merger and as of the time of the filing of these Supplemental Disclosures (as defined below), four lawsuits were filed by purported stockholders of PAE challenging the Merger. These lawsuits, brought by the plaintiffs individually, are captioned Hill v. PAE Incorporated, et al., 1~~:21-cv-10630 (S~~.~~D.N.Y.~~01 ~~filed~~Entry ~~December 13,~~into 2021), Ciccotelli v. PAE Incorporated, et al., 1:21-cv-10800 (S.D.N.Y. filed December 16, 2021), Jackson v. PAE Incorporated, et al., 1:21-cv-07082 (E.D.N.Y. filed December 22, 2021), and Miller v. PAE Incorporated, et al., 1:22-cv-00236 (S.D.N.Y. filed Jan. 11, 2022) (collectively, the “Merger Actions”). The complaints in the Merger Actions name PAE and its board of directors (the “Board”) as defendants. In addition, on December 20, 2021, the Company received a ~~demand~~Material ~~letter~~Definitive ~~from a purported PAE stockholder seeking to inspect certain books and records of the Company related to the Merger (the “Demand Letter”)~~Agreement. It is possible that additional, similar complaints may be filed or the Merger Actions described above may be amended. PAE does not intend to announce the filing of each additional, similar complaint or any amended complaint (including any amended Merger Action) unless it contains materially new or different allegations.

~~The~~On ~~Company and~~ the ~~other~~Closing ~~named~~Date, ~~defendants~~the ~~believe~~Company ~~that~~and ~~the~~certain ~~disclosures~~of ~~set~~its ~~forth~~subsidiaries inentered ~~the~~into ~~Proxy~~joinder ~~Statement~~agreements ~~comply~~related ~~fully~~to ~~with~~Parent ~~all~~and ~~applicable~~its ~~law,~~affiliates’ ~~that~~existing noFirst ~~supplemental~~Lien ~~disclosures~~Credit ~~are~~Facility ~~required~~and ~~under~~Second ~~applicable~~Lien ~~law,~~Credit ~~and~~Facility ~~that~~(each ~~the~~as ~~plaintiffs’~~defined ~~allegations~~below). inEach ~~each~~ of the ~~Merger~~Company ~~Actions~~ and ~~the~~certain ~~Demand~~of ~~Letter~~its ~~are~~subsidiaries ~~without~~executed ~~merit.~~a ~~However,~~joinder inagreement ~~order~~ to ~~moot~~(a)(i) the ~~plaintiffs’~~First ~~disclosure~~Lien ~~claims,~~Pledge ~~avoid~~and ~~nuisance~~Security Agreement and ~~possible~~(ii) the ~~expense~~First ~~and~~Lien ~~business~~Guaranty ~~delays~~Agreement, ~~and~~in ~~provide~~each ~~additional~~case, ~~information~~among tothe ~~its stockholders~~Parent, ~~and~~certain ~~without~~of ~~admitting~~its ~~any~~affiliates ~~liability~~and orthe ~~wrongdoing,~~administrative agent under the ~~Company~~First ~~has~~Lien ~~decided~~Credit ~~voluntarily~~Facility to(the ~~supplement~~“First ~~certain~~Lien ~~disclosures~~Administrative inAgent”), (b)(i) the ~~Proxy~~Second ~~Statement~~Lien ~~related~~Pledge toand ~~plaintiffs’~~Security ~~claims~~Agreement ~~with~~and (ii) the ~~supplemental~~Second ~~disclosures~~Lien ~~set~~Guaranty ~~forth~~Agreement, ~~below~~in ~~(the~~each ~~“Supplemental~~case, ~~Disclosures”).~~among ~~Nothing~~the inParent, ~~the~~certain ~~Supplemental~~of ~~Disclosures shall~~its beaffiliates ~~deemed~~and anthe ~~admission~~administrative ofagent under the ~~legal~~Second ~~necessity~~Lien orCredit ~~materiality~~Facility ~~under~~(the ~~applicable~~“Second ~~laws~~Lien ofAdministrative ~~any~~Agent”), ofand (c) the ~~disclosures~~First ~~set~~Lien/Second ~~forth~~Lien ~~herein.~~Intercreditor ToAgreement, among the ~~contrary~~First Lien Administrative Agent, the ~~Company~~Second ~~and~~Lien Administrative Agent, the ~~other~~Parent, ~~named~~certain ~~defendants~~of ~~specifically~~its ~~deny~~affiliates ~~all~~and ~~allegations~~the inother parties thereto (the ~~Merger~~“Intercreditor ~~Actions~~Agreement” and ~~that~~the ~~any~~agreements ~~additional~~described ~~disclosure~~in ~~was~~clauses or(a), is(b) ~~required~~and or(c), ~~material~~collectively, the “Joinder Agreements”).

~~The~~Pursuant ~~Supplemental~~to ~~Disclosures supplement~~ the ~~disclosures~~Joinder ~~contained~~Agreements, ineach of the ~~Proxy~~Company ~~Statement~~ and ~~should~~certain beof ~~read~~its insubsidiaries ~~conjunction~~(a) guarantees ~~with~~ the ~~disclosures~~obligations ~~contained~~of in the ~~Proxy~~Parent ~~Statement,~~and ~~which~~certain inof ~~turn should be read in~~ its ~~entirety.~~affiliates Tounder the ~~extent~~Parent ~~that~~and ~~information~~such ~~set~~affiliates’ ~~forth~~(i) insenior ~~the~~secured ~~Supplemental~~revolving ~~Disclosures~~facility ~~differs~~and ~~from~~senior orsecured ~~updates~~first ~~information~~lien ~~contained~~term infacilities ~~the Proxy Statement~~(together, the ~~information~~“First inLien ~~the~~Credit ~~Supplemental~~Facility”) ~~Disclosures~~and ~~shall~~(ii) second ~~supersede~~lien orterm ~~supplement~~facilities (the ~~information~~“Second ~~contained~~Lien inCredit ~~the~~Facility”), ~~Proxy~~as ~~Statement.~~applicable, ~~All~~(b) pledged ~~page references used herein are~~ to the ~~Proxy~~First ~~Statement~~Lien Administrative Agent and ~~capitalized~~the orSecond ~~defined~~Lien ~~terms~~Administrative ~~used~~Agent, ~~herein~~as applicable, ~~but~~a ~~not~~security ~~otherwise~~interest ~~defined,~~in ~~shall~~substantially ~~have~~all ~~the~~of ~~meanings~~its ~~ascribed~~assets to ~~such~~secure ~~terms in~~ the ~~Proxy~~obligations ~~Statement.~~of To the ~~extent~~Parent ~~that~~and certain ~~disclosures~~of ~~contained~~its inaffiliates under the ~~Proxy~~First ~~Statement~~Lien ~~are~~Credit ~~amended~~Facility ~~and~~or ~~restated~~Second inLien ~~the~~Credit ~~Supplemental~~Facility, ~~Disclosures~~as applicable, ~~any~~and ~~additional~~(c) agrees ~~language~~to isbe ~~indicated~~bound by ~~bold~~the ~~underlined~~terms, ~~text~~conditions and ~~deletions~~provisions ~~are~~of ~~indicated~~the byIntercreditor ~~strikethrough~~Agreement.

~~Supplemental~~Item ~~Disclosures~~1.02 toTermination ~~the~~of ~~Proxy~~Material ~~Statement~~Definitive Agreement.

~~The~~At ~~disclosure~~the ~~under~~effective time of the ~~heading~~Merger (the “~~Background~~Effective Time”), (a) the Amended and Restated First Lien Term Loan Credit Agreement dated as of October 19, 2020 (as amended from time to time) (the ~~Merger~~“Existing Term Loan Credit Agreement”), isamong ~~hereby~~the ~~amended~~Company, certain of the Company’s subsidiaries, Bank of America, N.A., as administrative agent, and ~~supplemented~~the other lenders named therein, and (b) the Revolving Credit Agreement dated as of October 20, 2016 (as amended by ~~replacing~~Amendment No. 1 dated June 12, 2017, Amendment No. 2 dated January 31, 2020, and Amendment No. 3 dated October 19, 2020, and as further amended from time to time) (the ~~fourth~~“Existing ~~full~~ABL ~~paragraph~~Credit onAgreement” ~~page~~and, 30together with the Existing Term Loan Credit Agreement, the “Existing Credit Agreements”), among the Company, certain subsidiaries of the ~~Proxy~~Company, ~~Statement~~Bank inof ~~its~~America, ~~entirety~~N.A., ~~with~~as administrative agent, and the ~~following:~~other lenders named therein, were each terminated, and all related guarantee and collateral documentation was terminated, and all obligations outstanding thereunder (subject to customary exceptions) were paid off in full and extinguished.

~~Members~~The foregoing description of the ~~Board~~Existing ~~and~~Credit ~~management,~~Agreements asis ~~well~~not ascomplete ~~individuals~~and ~~affiliated~~is ~~with~~subject ~~Platinum~~to ~~Equity,~~and ~~LLC~~entirely ~~(together~~qualified ~~with~~by ~~its~~reference ~~affiliates,~~to ~~“Platinum Equity”),~~ the ~~indirect~~full ~~parent~~text of PEthe ~~Shay,~~Existing ~~have~~Credit ~~customary~~Agreements, ~~professional~~which ~~relationships~~were ~~with~~filed ~~Goldberg~~as ~~Lindsay &~~Exhibits Co10.1 ~~LLC (“Lindsay Goldberg”)~~ and ~~its~~10.2 ~~representatives~~to ~~developed~~the asCompany’s aQuarterly ~~result~~Report ofon ~~the~~Form ~~former~~10-Q ~~ownership~~filed ofwith ~~certain members of~~ the ~~PAE~~SEC ~~corporate~~on ~~group by an affiliate of Lindsay Goldberg. However~~November 5, ~~none~~2020 ofand ~~Lindsay~~are ~~Goldberg,~~incorporated ~~American~~by ~~Securities~~reference ~~LLC~~into orthis ~~Parent~~Item ~~or any of their respective affiliates is an affiliate of PAE~~1. ~~Two members of the Board, Mr~~02. ~~Louis Samson~~ ~~and Ms. Delara Zarrabi, are employees of Platinum Equity.~~

~~The~~Item ~~disclosure~~2.01 ~~under~~Completion ~~the heading “Background~~ of ~~the~~Acquisition ~~Merger”~~or isDisposition ~~hereby amended and supplemented by replacing the ninth full paragraph on page 32~~ of ~~the Proxy Statement in its entirety with the following:~~ Assets.

~~PAE~~The ~~and~~information ~~Other~~set ~~Party~~forth Ain ~~entered~~the ~~into~~Introductory aNote ~~confidentiality~~and ~~agreement~~under onItems ~~June 14~~3.03, ~~2021~~5.01, ~~containing~~5.02, ~~customary~~5.03 ~~non-disclosure~~ and ~~standstill~~8.01 ~~provisions,~~is ~~and~~incorporated ~~did~~by ~~not~~reference ~~include~~into athis ~~“don’t-ask-don’t-waive”~~Item ~~provision~~2. ~~The standstill provisions expired on October 25, 2021~~01.

~~The~~At ~~disclosure~~the ~~under~~Effective ~~the~~Time, ~~heading~~each ~~“Background~~share of Class A common stock, par value $0.0001, of the ~~Merger~~Company (“Common Stock”), isthat ~~hereby~~was ~~amended~~issued and ~~supplemented~~outstanding byas ~~replacing~~of immediately prior to the ~~tenth~~Effective ~~full~~Time ~~paragraph~~was onautomatically ~~page~~cancelled, 32extinguished ofand converted into the ~~Proxy~~right ~~Statement~~to receive an amount equal to $10.05 in ~~its~~cash ~~entirety~~per ~~with~~share, without interest and less any applicable withholding taxes (the ~~following:~~“Per Share Merger Consideration”), other than shares of our Common Stock held by Parent, PAE or Merger Sub (including shares held as treasury stock or otherwise).

At the Effective Time, each warrant exercisable for shares of Common Stock outstanding immediately prior to the Effective Time (the “Company Warrants”) automatically became a warrant of the Surviving Corporation and the exercise price of the Company Warrants was adjusted in accordance with the terms of the Warrant Agreement (as defined in the Merger Agreement). In ~~June~~addition, ~~2021~~each award of (1) the Company restricted stock units outstanding as of immediately prior to the Effective Time, whether vested or unvested, that were subject to time-based vesting conditioned on continued employment or service (a ~~private~~“Company ~~equity~~RSU ~~firm~~Award”) were cancelled and (2) the Company restricted stock units outstanding as of immediately prior to the Effective Time that were subject to both time-based and performance-based vesting requirements (a “~~Other~~Company ~~Party~~PSU BAward”), ~~contacted~~to ~~PAE~~the extent unvested, vested at target performance through closing of the Merger and were canceled and each such Company RSU Award and vested Company PSU Award entitles the holder to ~~discuss~~receive as soon as reasonably practicable after the Effective Time (but ~~possibility~~in any event no later than the end of ~~evaluating~~the first regular payroll cycle commencing after the Effective Time, subject to certain exceptions) an amount in cash equal to: (a)(i) ~~potential~~the ~~strategic~~total ~~transaction~~number ~~with~~of ~~PAE.~~shares ~~These~~of ~~discussions~~Common ~~did~~Stock ~~not~~underlying ~~progress~~each ~~further~~Company atRSU ~~this~~Award ~~time~~or ~~because~~(ii) the ~~Other~~total ~~Party~~number Bof ~~was~~shares ~~not~~of ~~available~~Common ~~for~~Stock ~~negotiations~~underlying each such vested Company PSU Award immediately prior to the Effective Time, respectively, multiplied by (b) the Per Share Merger Consideration, less applicable taxes required to be withheld with respect to such payment.

The ~~disclosure~~foregoing ~~under~~description of the ~~heading~~Merger ~~“Background~~Agreement ofand the Merger” is ~~hereby~~not ~~amended~~complete and ~~supplemented~~is subject to and entirely qualified by ~~replacing~~reference to the ~~second~~ full ~~paragraph~~text onof ~~page~~the 35Merger ofAgreement, which was filed as Exhibit 2.1 to the ~~Proxy~~Company’s ~~Statement~~Current inReport ~~its~~on ~~entirety~~Form 8-K/A filed with the ~~following:~~SEC on October 26, 2021 and is incorporated by reference into this Item 2.01.

OnItem ~~September 14,~~2.03 ~~2021,~~Creation ~~PAE~~of ~~and~~a ~~Other~~Direct ~~Party~~Financial BObligation ~~entered~~or ~~into~~an aObligation ~~confidentiality~~under ~~agreement,~~an ~~which included customary non~~Off-~~disclosure~~Balance ~~and~~Sheet ~~standstill~~Arrangement ~~provisions,~~of ~~and did not include~~ a ~~“don’t-ask-don’t-waive” provision~~Registrant. ~~The standstill provisions expire on September 14, 2023.~~

The ~~disclosure~~information ~~under~~set ~~the~~forth ~~heading~~in ~~“Background of~~ the ~~Merger”~~Introductory isNote ~~hereby amended~~ and ~~supplemented~~under byItem ~~replacing~~1.01 ~~the~~is ~~second~~incorporated ~~full~~by ~~paragraph~~reference oninto ~~page~~this 36Item of2.03. ~~the Proxy Statement in its entirety with the following:~~

OnItem September 24, 2021, affiliates of Parent entered into a confidentiality agreement with PAE that included customary non-disclosure and standstill provisions including a “don’t-ask-don’t-waive” provision3.01 ~~The~~Notice ~~standstill provisions expire on the date that is fifteen months from the date~~ of ~~the~~Delisting ~~confidentiality~~or ~~agreement.~~Failure ~~Such~~to ~~parties~~Satisfy ~~also entered into~~ a ~~“clean~~Continued ~~team”~~Listing ~~agreement~~Rule onor ~~that~~Standard; ~~date,~~Transfer ~~setting forth customary “clean team” procedures to facilitate the sharing~~ of ~~certain limited non-public, confidential and proprietary information regarding PAE~~Listing.

~~The~~In ~~disclosure~~connection ~~under~~with the ~~heading~~consummation ~~“Background~~ of the Merger, the Company requested that the Nasdaq Stock Market (“Nasdaq”) issuspend ~~hereby~~trading ~~amended~~of the Common Stock and ~~supplemented~~the byCompany ~~replacing~~Warrants on the ~~fourth~~Closing ~~full~~Date, ~~paragraph~~remove the Common Stock and the Company Warrants from listing and file a Form 25 with the SEC to report the delisting of the Common Stock and the Company Warrants from Nasdaq. Nasdaq filed a Form 25 on ~~page~~the 41Closing Date to provide notification of such delisting and to effect the ~~Proxy~~deregistration ~~Statement~~of inthe ~~its~~Common ~~entirety~~Stock and the Company Warrants under Section 12(b) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends to file a Form 15 with the ~~following:~~SEC to terminate the registration of the Common Stock and the Company Warrants under the Exchange Act and to suspend the Company’s reporting obligations under the Exchange Act. The information set forth in the Introductory Note and under Item 2.01 is incorporated by reference into this Item 3.01.

~~Between~~Item ~~October 25~~3.03 ~~and~~Material ~~November 29,~~Modification 2021, at the direction of the Board and in connection with the “go-shop” process, representatives of Morgan Stanley contacted 22 potential acquirers, comprising 13 potential strategic acquirers and nine potential financial acquirers, to ~~gauge~~Rights interest in such potential acquirers providing a company acquisition proposal. During the “go-shop” period, PAE executed confidentiality agreements with two potential acquirers, which included customary standstill provisions including “don’t-ask-don’t-waive” provisions, and “clean team” agreements with two potential acquirers. Since the execution of ~~the~~Security merger agreement and during the “go-shop” period, each of the two potential acquirers received due diligence materials and one had discussions with management and representatives of Morgan Stanley regarding a potential acquisition of PAEHolders.

The ~~disclosure~~information ~~under~~set ~~the~~forth ~~heading~~in ~~“Trading~~the ~~Multiples~~Introductory ~~Analysis”~~Note ~~is hereby amended~~ and ~~supplemented~~under byItems ~~replacing~~2.01, ~~the~~3.01, ~~first~~5.01, ~~full~~and ~~paragraph~~5.03 onis ~~page~~incorporated 50by ofreference ~~the~~into ~~Proxy~~this ~~Statement~~Item in3.03. ~~its entirety with the following:~~

~~For~~Item purposes of this analysis, Morgan Stanley analyzed the ratio of aggregate value (“AV”) (which Morgan Stanley defined as (i) fully diluted market capitalization, plus (ii) preferred stock, plus (iii) non-controlling interest, plus (iv) total debt, plus (v) capital leases and less (vi) cash and cash equivalents) to estimated earnings before interest, taxes, depreciation, and amortization (“EBITDA”), based on Capital IQ consensus estimates as of October 18, 2021, for calendar years 2021 and 2022, of each of these comparable companies5.01 ~~Operating~~Changes ~~leases~~in ~~were~~Control ~~excluded from AV. Morgan Stanley’s analysis was based on a fully diluted share count using the treasury stock method (99.6 million units assuming a price~~ of ~~$10~~Registrant.~~05 per share), as provided by the Company.~~

~~The~~As ~~disclosure~~a ~~under~~result of the ~~heading~~consummation ~~“Discounted~~of ~~Cash~~the ~~Flow~~Merger, ~~Analysis”~~a ischange ~~hereby~~of ~~amended~~control ~~and~~of ~~supplemented~~the byCompany ~~replacing~~occurred, and the ~~seventh~~Company ~~full~~became ~~paragraph~~a onwholly ~~page~~owned 51indirect subsidiary of ~~the~~Parent. ~~Proxy~~The ~~Statement~~information set forth in ~~its~~the ~~entirety~~Introductory ~~with~~Note ~~the~~and ~~following:~~under Items 2.01, 3.03, 5.02, and 5.03 is incorporated by reference into this Item 5.01.

~~Morgan~~Item ~~Stanley~~5.02 ~~performed~~Departure ~~a discounted cash flow analysis, which is designed to provide an implied value~~ of aDirectors ~~company~~or byCertain ~~calculating~~Officers; ~~the~~Election ~~present value~~ of ~~the~~Directors; ~~estimated~~Appointment ~~future cash flows and terminal value~~ of ~~such~~Certain ~~company.~~Officers; ~~Morgan~~Compensatory ~~Stanley~~Arrangements ~~calculated a range~~ of ~~equity~~Certain ~~values per share of the PAE common stock based on a discounted cash flow analysis to value the Company as a stand-alone entity~~Officers. Morgan Stanley utilized estimates from the Company financial projections and Company street forecast for purposes of its discontinued cash flow analysis, as more fully described below. Morgan Stanley’s analysis was based on a fully diluted share count using the treasury stock method (99.6 million units assuming a price of $10.05 per share), as provided by the Company.

~~The~~In ~~disclosure~~connection ~~under~~with the ~~heading~~consummation ~~“Discounted~~of ~~Cash~~the ~~Flow~~Merger, ~~Analysis”~~all isof ~~hereby~~the ~~amended~~members ~~and~~of ~~supplemented~~the byboard ~~replacing~~of directors of the ~~first~~Company ~~full~~immediately ~~paragraph~~prior onto ~~page~~the 52Effective Time ceased to be directors of the ~~Proxy~~Company ~~Statement~~at inthe ~~its~~Effective ~~entirety~~Time ~~with~~and Benjamin Dickson and J. Russell Triedman became directors of the Company. The officers of the Company immediately before the Effective Time continued as officers of the Company following: the Effective Time. The information set forth in the Introductory Note and under Item 2.01 is incorporated by reference into this Item 5.02.

~~Morgan~~Item Stanley calculated the net present value of the unlevered free cash flows of the Company for the fiscal third and fourth quarters of 2021 through 2025 using the information set forth in the Company financial projections and Company street forecast5.03 ~~Based~~Amendments ~~on perpetuity growth rates ranging from (1.0%)~~ to ~~1.0%,~~Articles ~~which Morgan Stanley selected based upon the application~~ of ~~its~~Incorporation ~~professional~~or ~~judgment~~Bylaws; ~~and~~Change ~~experience, Morgan Stanley calculated terminal values~~ in ~~the~~Fiscal ~~year 2025~~Year. The free cash flows and terminal values were discounted to present values, using a mid-year convention, as of June 30, 2021 at a discount rate ranging from 7.2% to 8.3%, which discount rates were selected, upon the application of Morgan Stanley’s professional judgment and experience, to reflect an estimate of the Company’s weighted average cost of capital, derived using the capital asset pricing model, which takes into account certain company-specific inputs, including market risk premium, risk-free rate, predicted beta, pre-tax cost of debt, tax rate and ratio of debt to total capitalization. Based on the estimated outstanding shares of PAE common stock on a fully diluted basis as of October 18, 2021 using the treasury stock method (including adjusting the strike price of outstanding Company warrants in accordance with the warrant agreement assuming a price of $10.05 per share) as provided by management, Morgan Stanley calculated the estimated implied value per share, rounded to the nearest $0.25, of Company common stock as follows:

~~The~~As ~~disclosure~~of ~~under~~the Effective Time, the ~~heading~~Certificate ~~“Precedent~~of ~~Transactions~~Incorporation ~~Analysis”~~of isthe ~~hereby~~Company that was in effect immediately before the Effective Time was amended and ~~supplemented~~restated by ~~replacing~~the Certificate of Merger filed with the ~~chart~~Secretary ~~following~~of State of the ~~fourth~~State ~~full~~of ~~paragraph~~Delaware on ~~page~~February 15, 522022. The Certificate of Merger, including the ~~Proxy~~Amended ~~Statement~~and Restated Certificate of Incorporation of the Company, is attached hereto as Exhibit 3.1 and incorporated by reference herein. In addition, at the Effective Time, the Company’s bylaws, as in ~~its~~effect immediately prior to the Effective Time, were amended and restated in their entirety ~~with~~to be in the ~~following:~~form of the bylaws of Merger Sub in effect immediately prior to the Effective Time. Such amended and restated bylaws are attached hereto as Exhibit 3.2 and incorporated by reference herein. The information set forth in the Introductory Note and under Item 2.01 is incorporated by reference into this Item 5.03.

Date	Acquiror	Target	AV/LTM EBITDAMultiple	Implied PricePer Share ($)
August 2016	KBR, Inc.	Honeywell Technology Solutions, Inc.	6.3x	$2.25
January 2016	Platinum Equity LLP	PAE Inc.	7.0x	$3.25
September 2020	Amentum Holdings LLC	DynCorp International	7.5x	$4.25
November 2019	Gores Holdings III, Inc.	PAE Inc.	9.6x	$7.75
October 2019	American Securities LLC and Lindsay Goldberg LLC	AECOM Management Services	11.6x	$10.75

Item 5.07

Submission of Matters to a Vote of Security Holders.

The ~~disclosure~~Company ~~under~~held ~~the~~a ~~heading~~Special ~~“Equity~~Meeting ~~Research~~of ~~Analysts’~~Stockholders ~~Price~~(the ~~Targets~~“Special Meeting”) ison ~~hereby~~February 10, ~~amended~~2022. ~~and~~At ~~supplemented~~the bySpecial ~~replacing~~Meeting, ~~the~~holders ~~seventh~~representing ~~full~~80,292,785 ~~paragraph~~shares onof ~~page~~Common 53Stock out of a total of 93,117,234 shares of Common Stock issued and outstanding as of January 7, 2022, the ~~Proxy~~record ~~Statement~~date for the Special Meeting, voted in ~~its~~the ~~entirety~~following ~~with~~manner on the following proposals:

~~For~~1. ~~reference~~To ~~only,~~approve and ~~not~~adopt asthe aMerger ~~component of its fairness analysis~~Agreement, ~~Morgan~~pursuant ~~Stanley reviewed the one-year forward price targets for the PAE common stock prepared and published by equity research analysts (i) on or prior~~ to ~~August 15, 2021 (the date on~~ which ~~Taliban~~Merger ~~forces~~Sub ~~took~~would ~~control~~be ofmerged ~~Kabul,~~with ~~Afghanistan’s capital),~~ and ~~(ii) between~~into ~~August 16~~PAE, ~~2021~~with ~~and~~PAE ~~October 18,~~continuing ~~2021.~~as ~~The one-year forward price targets reflected each analyst’s estimate of~~ the ~~future~~surviving ~~public~~corporation ~~market~~in ~~trading price of~~ the ~~Company~~merger ~~common stock. The range of undiscounted one-year forward price targets for the PAE common stock on or prior to August 15, 2021 waswere $10.50, $13.00, $14.00,~~ and to $15.00 per share. The range of undiscounted one-year forward price targets for the PAE common stock between August 16, 2021 and October 18, 2021 were $8.00 and $8.00 per share. Morgan Stanley then discounted these ranges for one year at a ~~rate~~wholly ofowned ~~10.6%,~~indirect ~~which~~subsidiary ~~rate was selected based on the Company’s estimated cost~~ of ~~equity,~~Parent ~~upon~~ (the ~~application~~“Merger ~~of Morgan Stanley’s professional judgment~~Proposal”). The range of discounted one-year forward price targets waswere $9.49, $11.75, $12.66, and to $13.56 per share, on or prior to August 15, 2021, and $7.23 and $7.23 per share between August 16, 2021 and October 18, 2021.

The disclosure under the heading “Discounted Cash Flow Analysis” is hereby amended and supplemented by replacing the fourth full paragraph on page 58 of the Proxy Statement in its entirety with the following:


For	Against	Abstentions
80,256,139	21,751	14,895

~~Raymond~~2. ~~James~~To ~~analyzed~~approve the ~~discounted~~specified ~~present~~compensation ~~value~~that ofwill ~~the~~or ~~Company’s~~may ~~projected~~become ~~free~~payable ~~cash~~to ~~flows~~PAE’s ~~for~~named ~~the~~executive ~~periods~~officers ending December 31, 2021 through December 31, 2025 on a standalone basis. Raymond James calculated unlevered free cash flows, defined as earnings before interest, after taxes, plus depreciation, less capital expenditures, less investment in ~~working~~connection ~~capital.~~with ~~Raymond James’ analysis was based on a fully diluted share count using~~ the ~~treasury~~Merger ~~stock method~~ (~~99.6 million~~the ~~units~~“Advisory ~~assuming~~Compensation ~~a price of $10.05 per share~~Proposal”)~~, as provided by the Company~~.

The disclosure under the heading “Selected Transactions Analysis” is hereby amended and supplemented by replacing the chart following the first full paragraph on page 59 of the Proxy Statement in its entirety with the following:


For	Against	Abstentions
59,985,330	19,335,315	972,140

Company Name	AnnouncedDate	ClosedDate	EnterpriseValue ($MM)	Enterprise Value /TTM EBITDA
Acquisition of the Management Services business of AECOM by American Securities LLC & Lindsay Goldberg LLC	Oct-2019	Jan-2020	$2,405	11.6x
Acquisition of Engility Holdings, Inc. by Science Applications International Corp.	Sep-2018	Jan-2019	$2,500	14.0x
Acquisition of the Global Defense Services business of Cubic Corporation by Valiant Integrated Services	Apr-2018	May-2018	$135	7.6x
Acquisition of CSRA, Inc. by General Dynamics Corporation	Feb-2018	Apr-2018	$9,749	12.0x
Acquisition of NCI, Inc. by H.I.G. Capital, LLC	Jul-2017	Aug-2017	$283	9.5x
Acquisition of Camber Corporation by Huntington Ingalls Industries	Nov-2016	Dec-2016	$380	9.2x
Acquisition of Honeywell Technology Solutions, Inc. by KBR, Inc.	Aug-2016	Sep-2016	$300	7.1x
Acquisition of Wyle, Inc. by KBR, Inc.	May-2016	Jul-2016	$600	8.9x
Acquisition of the National Security Solutions business of L-3 Communications by CACI International, Inc.	Dec-2015	Feb-2016	$550	7.9x

The Merger Proposal and the Advisory Compensation Proposal were each described in greater detail in the Company’s definitive proxy statement relating to the Merger, which the Company filed with the SEC on January 11, 2022. The Company’s stockholders approved both the Merger Proposal and the Advisory Compensation Proposal. In connection with the Special Meeting, the Company also solicited proxies with respect to the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there were insufficient votes at the time of the Special Meeting to approve the Merger Proposal. In light of the approval of the Merger Proposal, no motion to adjourn the Special Meeting was made because the adjournment of the Special Meeting was determined not to be necessary or appropriate.

~~The~~Item ~~disclosure~~8.01 ~~under~~Other ~~the heading “Employment Agreements” is hereby amended and supplemented by replacing the third full paragraph on page 65 of the Proxy Statement in its entirety with the following:~~ Events.

On ~~May~~February 510, ~~2020~~2022, the Company ~~entered~~issued ~~into~~a ~~employment~~press ~~agreements~~release ~~with~~announcing ~~each of~~ the ~~NEOs,~~stockholder ~~and~~approval onof ~~April 13, 2021,~~ the ~~Company~~Merger ~~entered into letter agreements (collectively, the “Letter Agreements, and each a “Letter~~ Agreement”) toat ~~amend~~ the ~~employment~~Special ~~agreements of Messrs~~Meeting. ~~Peiffer,~~The ~~Cobb,~~press ~~and~~release ~~Moline~~is ~~and~~attached ~~Ms. Munchel~~hereto ~~(the employment agreements (together with, and~~ as ~~amended~~Exhibit ~~by,~~99.1 ~~the Letter Agreements) collectively, the “Employment Agreements”~~ and ~~each,~~is anincorporated “Employment Agreement”). No member of the Board or management has negotiated for or been offered any guaranteed future employment, equity participation or other change in the terms of such person’s post-closing employment in connection with the transactions contemplated by ~~the~~reference ~~merger agreement, or been offered a seat on the surviving corporation’s board or the board of any LG related entities, American Securities related entities, or any of Parent’s affiliates~~herein.

~~Additional~~On ~~Disclosures~~February 15, 2022, the Company issued a press release announcing the closing of the Merger. The press release is attached hereto as Exhibit 99.2 and is incorporated by reference herein.

~~The~~On ~~Company~~February 15, is2022, ~~also supplementing~~ the ~~disclosures~~Company indelivered ~~the~~notice ~~Proxy~~containing ~~Statement~~an byexplanation ~~adding~~of ~~a footnote (~~the ~~“Additional~~adjustment ~~Footnote”)~~ to the ~~table~~exercise ~~captioned~~price ~~“Management and Street Case Projections” on page 47~~ of the ~~Proxy~~Company ~~Statement.~~Warrants ~~The Additional Footnote supplements the disclosures contained in the Proxy Statement~~ and ~~should~~other ~~be read in conjunction with the disclosures contained in the Proxy Statement, which in turn should be read in its entirety. To the extent that~~ information ~~set~~related forth in the Additional Footnote differs from or updates information contained in the Proxy Statement, the information in the Additional Footnote shall supersede or supplement the information contained in the Proxy Statementthereto. The ~~Additional~~notice ~~Footnote~~ is ~~unrelated~~attached tohereto ~~the~~as ~~allegations~~Exhibit ~~contained~~99.3 ~~in the Merger Actions~~ and is ~~being~~incorporated ~~added~~by ~~for~~reference ~~reasons unrelated to such actions~~herein. ~~Nothing in the Additional Footnote shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth therein.~~

~~The~~Item ~~disclosure~~9.01 inFinancial ~~such~~Statements ~~table is hereby amended~~ and ~~supplemented as follows:~~ Exhibits.

~~• By adding “~~(5d)” ~~after~~Exhibits. ~~“2,841” in the row captioned “Sales” under each of the sub-headings “Case 1” and “Case 2” under the heading “2021” and sub-heading “Management”~~

•See Bythe ~~adding~~Exhibit ~~the~~Index ~~following~~below, ~~footnote~~which ~~after~~is ~~footnote~~incorporated 4by toreference ~~the~~herein. ~~table:~~

(5) Sales include $218 million of revenue from contracts based in Afghanistan.


Exhibit No.		Description

2.1		Agreement and Plan of Merger, dated as of October 25, 2021, by and among Amentum Government Services Holdings LLC, Pinnacle Virginia Merger Sub Inc. and PAE Incorporated (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K/A of PAE Incorporated filed on October 26, 2021)

3.1		Amended and Restated Certificate of Incorporation

3.2		Amended and Restated Bylaws

99.1		Press Release Announcing Stockholder Approval of the Merger Agreement dated February 10, 2022

99.2		Press Release Announcing Closing of the Merger dated February 15, 2022

99.3		Notice to Holders of Company Warrants dated February 15, 2022

104.1		The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

~~FORWARD~~Forward-~~LOOKING~~Looking Statements ~~STATEMENTS~~

This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts could be forward-looking statements. The words “anticipates,” “believes,” “could,” “designed,” “estimates,” “expects,” “goal,” “intends,” “may,” “plans,” “projects,” “pursuing,” “will,” “would” and similar expressions (including the negatives thereof) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We have based these forward-looking statements largely on our current assumptions, expectations, projections, intentions, objectives and/or beliefs about future events or occurrences and these forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to, the following: (i) ~~PAE may be unable to obtain stockholder approval as required for~~ the ~~proposed~~ transaction; ~~(ii) other conditions to the closing of the proposed transaction~~ may ~~not be satisfied, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval; (iii) the proposed transaction may~~ involve unexpected costs, liabilities or delays; (ivii) ~~the business of PAE may suffer as a result of uncertainty surrounding the proposed transaction; (v)~~ shareholder litigation in connection with the ~~proposed~~ transaction may ~~affect the timing or occurrence of the proposed transaction or~~ result in significant costs of defense, indemnification and liability; (viiii) PAE may be adversely affected by other economic, business, and/or competitive factors; (~~vii~~iv) the ~~occurrence of any event, change or other circumstances could give rise to the termination of the Merger Agreement; (viii) the~~ risk that the ~~proposed~~ transaction ~~disrupt~~disrupts PAE’s current plans and operations or diverts management’s or employees’ attention from ongoing business operations; (ixv) the risk of potential difficulties with PAE’s ability to retain and hire key personnel and maintain relationships with third parties as a result of the ~~proposed~~ transaction; and (xvi) other risks toin ~~consummation~~connection ofwith the ~~proposed~~ transaction~~, including the risk that the proposed transaction will not be consummated within the expected time period or at all~~. Additional factors that may affect the future results of PAE ~~and the proposed transaction~~ are set forth in filings that PAE makes with the SEC from time to time, including those listed under “Risk Factors” in PAE’s Annual Report on Form 10-K for the year ended December 31, 2020 and filed with the SEC on March 16, 2021, as amended on May 7, 2021 and as updated or supplemented by subsequent reports that PAE has filed or files with the SEC including those filed on Form 10-Q. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. The timing of certain events and circumstances and known and unknown risks and uncertainties could cause actual results to differ materially from those anticipated or implied in the forward-looking statements that we make. Therefore, you should not place undue reliance on our forward-looking statements. Our forward-looking statements are based on current information and we do not assume any obligation to update any forward-looking statements except ~~expect~~ as required by the federal securities laws.

IMPORTANT INFORMATION FOR INVESTORS AND WHERE TO FIND IT

This communication may be deemed to be solicitation material in respect of the proposed acquisition of PAE by Amentum Government Services Holdings LLC. In connection with the proposed transaction, PAE filed the Proxy Statement in definitive form with the SEC, in connection with the solicitation of proxies from PAE’s stockholders for the proposed transaction. The Proxy Statement contains important information about the proposed transaction and related matters. BEFORE MAKING A VOTING DECISION, STOCKHOLDERS OF PAE ARE URGED TO READ THE PROXY STATEMENT, AND OTHER RELEVANT DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT PAE, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and stockholders may obtain free copies of the Proxy Statement and other documents that PAE files with the SEC through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by PAE are also available free of charge on PAE’s investor relations website at https://investors.pae.com/ or by contacting Mark Zindler, PAE’s Vice President of Investor Relations at mark.zindler@pae.com.

PARTICIPANTS IN SOLICITATION

The Company and its directors, executive officers and other members of management and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from the Company’s stockholders with respect to the proposed transaction. Information regarding the ownership of PAE securities by PAE’s directors and executive officers is included in their SEC filings on Forms 3, 4 and 5, and additional information about PAE’s directors and executive officers is also available in the Proxy Statement and is supplemented by other filings made, and to be made, with the SEC by PAE. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, is set forth in the materials filed by the Company with the SEC, and is set forth in the Proxy Statement. Investors should read such materials carefully before making any voting or investment decision.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned ~~thereunto~~hereunto duly authorized.

Dated: January 26, 2022

PAE Incorporated

Dated: February 15, 2022

PAE Incorporated

/s/ Charles D. Peiffer

Charles D. Peiffer

Interim President & Chief Executive Officer; Executive Vice President & Chief Financial Officer

Filing Compare · PAE Inc