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): ~~September 30~~October 3, 2016

SKULLCANDY, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-35240

56-2362196

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

1441 West Ute. Blvd, Suite 250

Park City, Utah 84098

(Address of principal executive offices, including zip code)

(435) 940-1545

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ 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))

~~Introduction~~Item 1.01 Entry into a Material Definitive Agreement.

AsThe ~~previously~~information disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) by Skullcandy, Inc. (the “Company”) on August 24, 2016, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with MRSK Hold Co., a Delaware corporation (“Parent”), and MRSL Merger Co., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”). Pursuant to the Merger Agreement, on September 1, 2016, Merger Sub commenced a tender offer to purchase all of the outstanding shares of common stock, par value $0.0001 per share, of the Company (the “Shares”), at a price of $6.35 per Share, net to the holder thereof in cash, subject to reduction for any applicable withholding taxes, without interest (the “Offer Price”), upon the terms and subject to the conditions set forth in ~~the Offer to Purchase dated September 1, 2016 (as amended, the “Offer to Purchase”) and in the related Letter of Transmittal (which, together with the Offer to Purchase, as each has been amended~~Item 2.03 orbelow ~~supplemented~~is ~~from~~incorporated ~~time~~herein toby ~~time, constitute the “Offer”)~~reference.

Item 2.0103 ~~Completion~~Creation of ~~Acquisition~~a Direct Financial Obligation or ~~Disposition~~an Obligation under an Off-Balance Sheet Arrangement of ~~Assets~~a Registrant.

~~The~~As ~~Offer~~previously ~~and~~disclosed ~~withdrawal~~in ~~rights expired~~the asCurrent ~~scheduled~~Report aton ~~12:00~~Form ~~midnight,~~8-K ~~New~~filed ~~York~~with ~~City time, at~~ the ~~end~~Securities ofand ~~the~~Exchange ~~day~~Commission on(“SEC”) ~~Thursday,~~by ~~September 29~~Skullcandy, Inc. ~~2016~~ (~~one~~the ~~minute~~“Company”) ~~after~~on ~~11:59 p.m.~~August 24, ~~New York City time~~2016, onthe ~~September~~Company ~~29,~~entered ~~2016,~~into ~~such~~an ~~date~~Agreement and ~~time,~~Plan of Merger (the “~~Expiration~~Merger ~~Time~~Agreement”). ~~American Stock~~dated ~~Transfer~~as &of ~~Trust Company~~August 23, ~~LLC,~~2016 ~~the~~with ~~depositary~~MRSK ~~for~~Hold ~~the Offer~~Co., ~~advised~~a ~~that,~~Delaware ascorporation of(“Parent”), ~~the~~and MRSL ~~Expiration~~Merger ~~Time~~Co., ~~22,860,231~~a ~~Shares~~Delaware ~~had~~corporation ~~been~~and ~~validly~~a ~~tendered~~direct ~~and~~wholly ~~not~~owned ~~properly~~subsidiary ~~withdrawn~~of Parent (“Merger Sub”), pursuant to ~~the Offer~~which, ~~representing~~among ~~approximately~~other ~~79.3%~~things, ofMerger ~~the then~~Sub ~~issued~~acquired ~~and~~ outstanding ~~Shares.~~shares Inof ~~addition,~~common ~~the~~stock ~~depositary~~of ~~advised~~the ~~that,~~Company aspursuant ofto the ~~Expiration~~tender offer ~~Time,~~contemplated ~~Notices~~by ofthe ~~Guaranteed~~Merger ~~Delivery~~Agreement ~~had~~(the ~~been~~“Offer”) ~~delivered~~and, ~~for~~on ~~349~~October 3,~~098~~ ~~Shares~~2016, ~~representing~~Merger ~~approximately~~Sub ~~1.2%~~was ofmerged ~~the~~with ~~then issued~~ and ~~outstanding~~into ~~Shares. Accordingly,~~ the ~~minimum~~Company, ~~tender~~with ~~condition to~~ the ~~Offer~~Company ~~was~~being ~~satisfied.~~the Assurviving acorporation ~~result of~~ (the ~~satisfaction~~“Merger”; of the ~~foregoing~~Merger, ~~condition~~together ~~and~~with ~~each~~the consummation of the ~~other conditions to the~~ Offer, ~~Merger~~the ~~Sub~~“Acquisition”). ~~accepted~~Upon ~~for~~completion ~~payment~~of ~~all~~the ~~Shares~~Merger, ~~that~~the ~~were~~Company ~~validly~~became ~~tendered~~a ~~and not~~wholly ~~properly~~owned ~~withdrawn~~subsidiary ~~pursuant~~of ~~to the Offer~~Parent.

OnIn ~~October~~connection with the Acquisition, on October 3, 2016, ~~pursuant~~Parent, toMerger ~~the~~Sub, ~~terms of~~ the ~~Merger~~Company ~~Agreement~~ and inits ~~accordance~~subsidiary ~~with Section~~AG ~~251(h)~~Acquisition ofCorporation entered ~~the~~into ~~Delaware~~a ~~General~~Financing ~~Corporation~~Agreement ~~Law~~with ~~(the~~PNC ~~“DGCL”)~~Bank, ~~Merger~~National ~~Sub~~Association, ~~was~~as ~~merged~~administrative ~~with~~agent, ~~and~~Cerberus ~~into~~Business ~~the~~Finance, ~~Company~~LLC, ~~with~~as ~~the~~collateral ~~Company~~agent, ~~being~~and the ~~surviving~~lenders ~~corporation~~from ~~(the~~time ~~“Merger”).~~to ~~Upon~~time ~~completion~~party ofthereto (the ~~Merger,~~“Financing ~~the Company became a wholly owned subsidiary of Parent~~Agreement”).

AtThe ~~the~~Financing ~~effective~~Agreement ~~time~~provides offor ~~the~~a ~~Merger~~term ~~(the~~loan ~~“Effective~~in ~~Time”) and pursuant to~~ the ~~terms~~ ~~and~~aggregate ~~conditions~~amount of ~~the Merger Agreement~~$85, ~~each outstanding Share~~000,000 ~~other~~and ~~than~~a ~~any Shares owned by Parent~~$40, ~~Merger Sub~~000,000 orrevolving ~~the~~credit ~~Company~~facility; ~~or any of their respective wholly owned subsidiaries, or by stockholders who have validly exercised their~~the ~~appraisal~~revolving ~~rights~~credit ~~under~~facility ~~the~~includes ~~DGCL,~~a ~~were~~sublimit ~~canceled~~for ~~and converted into~~ the ~~right~~issuance toof ~~receive~~letters anof ~~amount in cash equal to the Offer Price, payable to the holder thereof on the terms and subject to the conditions set forth in the Merger Agreement~~credit.

~~The~~In ~~aggregate~~connection ~~consideration~~with ~~paid~~the byconsummation ~~Parent~~of the Acquisition and ~~Merger~~the ~~Sub~~closing inof the ~~Offer~~Financing ~~and~~Agreement ~~Merger~~on ~~was~~October 3, ~~approximately $196.4 million~~2016, ~~without~~the ~~giving~~Company ~~effect~~(as successor to ~~related~~ ~~transaction fees and expenses. Parent and~~ Merger Sub ~~funded~~pursuant ~~the payments~~ to ~~be made in connection with~~ the ~~Offer~~Merger) ~~and~~borrowed the ~~Merger~~entire ~~through~~$85,000,000 aterm ~~combination~~loan ofand ~~an equity contribution funded by Mill Road Capital II~~$13, ~~L.P.~~340,000 ~~borrowings~~ under athe revolving credit facility in anorder ~~aggregate~~to fund ~~principal~~in ~~amount~~part ofthe ~~$125~~purchases ~~million~~of ~~with~~shares ~~PNC~~of ~~Bank,~~the ~~National~~Company’s ~~Association,~~common asstock ~~Administrative~~pursuant ~~Agent~~to ~~and~~the ~~Cerberus Business Finance~~Offer, ~~LLC,~~the aspayments ~~Collateral~~for ~~Agent,~~shares ~~and~~of the ~~lenders~~Company’s ~~from~~common ~~time~~stock pursuant to ~~time~~the ~~party~~Merger ~~thereto,~~ and aother ~~portion~~payments ofin ~~the Company’s~~connection ~~available~~with ~~cash at~~ the ~~Effective Time~~Acquisition.

The ~~foregoing~~Company ~~summary~~may ofrepay borrowings under the ~~transactions~~revolving ~~contemplated~~credit byfacility at any time, but in any event no later than the ~~Merger~~fifth anniversary of the closing date of the Financing Agreement, ~~does~~and ~~not~~any ~~purport to~~outstanding revolving loans thereunder will be ~~complete~~due and ispayable ~~qualified~~in full, and the revolving credit facility will terminate, on such fifth anniversary. The term loan will amortize in ~~its~~part ~~entirety~~in byquarterly installments ~~reference~~over tothe five-year term of the ~~Merger~~Financing Agreement, ~~which~~and ~~was~~the ~~filed~~remaining asbalance ~~Exhibit~~of 2the term loan will mature on such fifth anniversary.1 The loans are subject to certain mandatory prepayments, subject to various exceptions, from (a) net cash proceeds from the ~~Current~~issuance ~~Report~~of onadditional ~~Form~~debt, ~~8-K~~(b) a ~~filed~~portion byof the net amount of the Company’s consolidated excess cash flow for any year (commencing with 2017) minus the ~~SEC~~amount onof ~~August~~certain 24voluntary prepayments in such year, ~~2016~~(c) net cash proceeds from certain asset sales, (d) net cash proceeds from the issuance of equity pursuant to any permitted equity cure with respect to certain financial covenant defaults and is(e) net ~~incorporated~~cash ~~herein~~proceeds byfrom ~~reference~~certain extraordinary receipts. The Company may voluntarily prepay the term loan, in whole or in part, or reduce or terminate the revolving line of credit at any time, subject to certain thresholds and conditions. Certain voluntary and mandatory prepayments will require the payment of certain prepayment premiums to the lenders.

~~Item~~Amounts ~~3.01~~repaid ~~Notice~~under ofthe ~~Delisting~~revolving orcredit ~~Failure~~facility tomay ~~Satisfy~~be areborrowed, ~~Continued~~subject ~~Listing~~to ~~Rule~~continued compliance orwith ~~Standard;~~the ~~Transfer~~Financing Agreement. No amount of ~~Listing~~the term loan that is repaid may be reborrowed.

InAmounts ~~connection~~borrowed ~~with~~under the revolving ~~closing~~credit offacility ~~the~~bear ~~Merger~~interest at a rate per annum equal to, at the Company’s ~~notified~~option, ~~The~~either ~~NASDAQ~~(a) the ~~Stock~~LIBOR ~~Market~~rate, ~~LLC~~plus a margin of 2.75%, or (~~“NASDAQ”~~b) a onfluctuating ~~October~~reference 3,rate ~~2016~~equal ~~that~~to the ~~Merger~~ ~~was~~highest ~~consummated~~of (i) the prime rate, (ii) the ~~and~~federal ~~trading~~fund ofopen ~~the~~rate ~~common~~plus ~~stock~~0.50% ofor (iii) the ~~Company~~one onmonth ~~The~~LIBOR ~~NASDAQ~~rate ~~Global~~plus ~~Market~~1.00%, ~~has~~plus ~~been~~a ~~suspended~~margin of 1.00%. ~~Accordingly,~~The ~~NASDAQ~~term ~~has~~loan ~~filed~~bears interest at a ~~notification~~rate ofper ~~delisting~~annum ofequal to, at the Company’s ~~common~~option, ~~stock~~either ~~from~~(a) the ~~The~~LIBOR ~~NASDAQ~~rate, ~~Global Market and~~plus ~~deregistration~~a margin of 7.50% to 8.00% based on the Company’s ~~common~~consolidated ~~stock~~leverage ~~under~~ratio ~~Section~~determined ~~12(b)~~as of the ~~Securities~~end ~~Exchange~~of ~~Act~~the most recently completed fiscal quarter of ~~1934~~the Company, asor ~~amended~~(b) a fluctuating reference rate (not to be less than 3.25%) equal to the ~~“Exchange~~highest ~~Act”~~of (i) the prime rate, on(ii) the ~~Form~~federal 25fund ~~with~~open ~~the~~rate ~~SEC~~plus 0.50% ~~The~~or ~~Company~~(iii) the ~~intends~~one tomonth ~~file~~LIBOR arate ~~certification~~plus on1.00%, ~~Form~~plus 15a ~~with~~margin ~~the~~of ~~SEC~~6.25% to ~~cause~~ 6.75% based on the Company’s ~~reporting~~consolidated ~~obligations~~leverage ~~under~~ratio ~~Sections~~determined 13as ~~and~~of ~~15(d)~~the end of the ~~Exchange~~most ~~Act~~recently completed fiscal quarter of the Company. In addition to becertain ~~suspended~~other fees and expenses that the Company is required to pay to the lenders, the Company was required to pay a commitment fee, an underwriting fee and a closing fee to the lenders on the closing date of the Financing Agreement.

~~Item~~Under 3the Financing Agreement, the Company must comply with various customary financial and non-financial covenants.03 The primary financial covenants under the Financing Agreement consist of a maximum consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio and a limit on capital expenditures. The ~~Material~~primary ~~Modification~~non-financial covenants under the Financing Agreement limit the Company’s ability to ~~Rights~~pay ofdividends ~~Security~~or ~~Holders~~other distributions on its capital stock, to repurchase its capital stock, to conduct mergers or acquisitions, to sell assets, to make investments and loans, to incur future indebtedness, to place liens on assets, to prepay certain other indebtedness, and to alter its capital structure, in each case subject to certain exceptions as set forth in the Financing Agreement.

The ~~information~~lenders ~~set~~under ~~forth~~the Financing Agreement are entitled to accelerate repayment of the loans under the Financing Agreement upon the occurrence of any of various customary events of default, which include, among other events, the following (which are subject, in ~~Item~~some cases, to certain grace periods): failure to pay when due any principal, interest or other amounts in respect of the loans, ~~2.01~~breach of any of the Company’s covenants or representations under the loan documents, ~~3.01~~default ~~and~~under ~~5.03~~any other of ~~this~~the ~~Current~~Company’s ~~Report~~or onits ~~Form~~subsidiaries’ ~~8-K~~significant isindebtedness ~~incorporated~~agreements, ~~herein~~a bybankruptcy ~~reference~~or insolvency event with respect to the Company or any of its material subsidiaries, a significant unsatisfied judgment against the Company or any of its subsidiaries, or a change of control.

~~Item~~Borrowings 5under the Financing Agreement are guaranteed by Parent and certain subsidiaries of the Company and are secured by substantially all of the assets of Parent, the Company and its U.01S. ~~Changes~~domestic insubsidiaries, ~~Control~~including a pledge of the ~~Registrant~~equity interests of the Company and of each U.S. domestic subsidiary of the Company and a portion of the equity interests of certain foreign subsidiaries of the Company, subject to customary exceptions.

As a result of Merger Sub’s acceptance for payment of all Shares that were validly tendered and not properly withdrawn in accordance with the terms of the Offer, a change of control of the Company occurred on September 30, 2016. As a result of the consummation of the Merger pursuant to Section 251(h) of the DGCL on October 3, 2016, the Company is now a wholly owned subsidiary of Parent.

The information disclosed under Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the Merger, each of Rick Alden, Doug Collier, S. Hoby Darling, Jeff Kearl, Scott Olivet, Heidi O’Neill and Greg Warnock resigned from his or her respective position as a member of the Company’s Board of Directors, and any committee thereof, effective at the Effective Time. At the Effective Time, the size of the Board of Directors of the Company was reduced to one member and Thomas E. Lynch became the sole member of the Board of Directors of the Company by operation of the Merger Agreement.

Information about Mr. Lynch is contained in the Offer to Purchase, which information is incorporated herein by reference.

Item 5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Pursuant to the terms of the Merger Agreement, at the Effective Time, the certificate of incorporation and bylaws of the Company were amended and restated in their entirety in the forms filed as Exhibits 3.1 and 3.2 hereto, respectively, which are incorporated by reference herein.

Item 8.01. Other Events.

On October 3, 2016, the Company and Mill Road Capital issued a joint press release announcing the closing of the Merger. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated as of August 23, 2016, by and among Skullcandy, Inc., MRSK Hold Co. and MRSL Merger Co. (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, event date August 23, 2016, filed with the SEC on August 24, 2016).
3.1		Amended and Restated Certificate of Incorporation of Skullcandy, Inc.*
3.2		Amended and Restated By-laws of Skullcandy, Inc.*
99.1		Joint Press Release, dated October 3, 2016.*

* Filed herewith.

SIGNATURE

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

EXHIBIT INDEX

Exhibit No.		Description
2.1		Agreement and Plan of Merger, dated as of August 23, 2016, by and among Skullcandy, Inc., MRSK Hold Co. and MRSL Merger Co. (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, event date August 23, 2016, filed with the SEC on August 24, 2016).
3.1		Amended and Restated Certificate of Incorporation of Skullcandy, Inc.*
3.2		Amended and Restated By-laws of Skullcandy, Inc.*
99.1		Joint Press Release, dated October 3, 2016.*

* Filed herewith.

Skullcandy, Inc.

October 3, 2016

/s/ Patrick Grosso

October 6, 2016

/s/ Patrick Grosso

Patrick Grosso

Vice President, Strategic Initiatives and Corporate Affairs, Chief Legal Officer and Secretary

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