13D Filing: Elliott Associates, L.P. and Arconic Inc. (ARNC)

The following constitutes Amendment No. 10 to the Schedule 13D filed by the undersigned (“Amendment No. 10”).  This Amendment No. 10 amends the Schedule 13D as specifically set forth herein.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On May 22, 2017, Elliott Associates, L.P., Elliott International, L.P. and Elliott International Capital Advisors Inc. (the “Elliott Parties”) and the Issuer entered into a settlement agreement (the “Settlement Agreement”).  Under the terms of the Settlement Agreement, the Elliott Parties will nominate Christopher L. Ayers, Elmer L. Doty and Patrice E. Merrin for election as directors at the Issuer’s upcoming 2017 annual meeting of shareholders (the “Annual Meeting”), and the Issuer will nominate David P. Hess and Ulrich R. Schmidt for election as directors at the Annual Meeting. The Elliott Parties and the Issuer have agreed to withdraw their respective nominations of any other director candidates for election at the Annual Meeting.  Any votes for the withdrawn nominees on proxy cards submitted by shareholders will be disregarded.

The Settlement Agreement also provides that Messrs. Ayers and Doty, and Ms. Merrin, will be appointed to certain committees of the Board as promptly as practicable following the Annual Meeting.

The Settlement Agreement provides the Elliott Parties with the right to select for appointment to the Board, subject to the approval of the Board’s Governance and Nominating Committee (not to be unreasonably withheld, delayed or conditioned), a replacement candidate for any of the Elliott Parties‘ recommended directors who becomes unable or unwilling to serve, such replacement candidate to serve the unexpired term, if any, of the departed director. The Elliott Parties‘ recommended directors include the Reporting Persons’ three nominees for election at the Annual Meeting (i.e., Messrs. Ayers and Doty, and Ms. Merrin) and the three directors appointed to the Board pursuant to the Issuer’s agreement with the Elliott Parties dated February 1, 2016 (i.e., Sean O. Mahoney, John C. Plant and Ulrich R. Schmidt). These replacement rights will expire on the date immediately prior to the date of the 2018 annual meeting of shareholders, or such earlier time as the Elliott Parties’ net long percentage ownership of the Common Stock drops below specified thresholds.

The Settlement Agreement provides that at the Annual Meeting, the Reporting Persons will vote all shares of Common Stock that it or certain of its affiliates have the right to vote, as of the record date, in favor of the election of directors nominated by the Reporting Persons and by the Issuer and in accordance with the recommendations of the Board on the other proposals in the Issuer’s definitive proxy statement dated March 13, 2017.

In addition, the Settlement Agreement provides that, subject to certain conditions, the Board’s CEO Search Committee (which will include Ms. Merrin promptly following her election to the Board) will keep the Elliott Parties reasonably informed regarding the CEO search process so that it can provide input and feedback to the CEO Search Committee, including keeping the Elliott Parties reasonably informed about key CEO candidates and material developments in the status of the search process, and providing the Elliott Parties an opportunity to meet any CEO candidates who are interviewed by a majority of the Board members and to present its views to the CEO Search Committee. The CEO Search Committee will include Mr. Larry Lawson among the candidates to be considered to serve as a potential permanent CEO. However, neither the Elliott Parties nor any directors nominated by the Elliott Parties will have any veto, consent or special voting rights with respect to the CEO search process or the selection of a permanent CEO, which such selection will be made by the Board. In addition, the Settlement Agreement provides that at or prior to the appointment of the permanent CEO, the Board will designate a new independent Chair, and the CEO will not be included among the candidates for Chair prior to the second anniversary of the Agreement.

The Issuer has agreed that the size of the Board will not be increased above 13 through the date immediately prior to the date of the 2018 annual meeting of shareholders, except to enable the Issuer’s permanent CEO to become a member of the Board. The Issuer has also agreed that it will use reasonable best efforts to effect a change in the jurisdiction of incorporation of the Issuer from Pennsylvania to Delaware on or before December 31, 2017, and that the certificate of incorporation and bylaws of the resulting Delaware corporation will provide for a declassified board structure with all directors having terms expiring on an annual basis and contain no provisions requiring a supermajority shareholder vote. The Settlement Agreement also provides that the Issuer and the Elliott Parties will cooperate in good faith to enter into a registration rights agreement obligating the Issuer to file a resale registration statement relating to the resale by the Elliott Parties of their shares of Common Stock .