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AMERICAN APPAREL, INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Material Modification to Rights of Security Holders, Amendments to Articles of Inc. or Bylaws; Change in Fiscal Year, Other Events, Financial Statements and Exhibits

June 30, 2014

Item 1.01. Entry into a Material Definitive Agreement.



The information set forth under Item 3.03 of this Current Report on Form 8-K is incorporated into this Item 1.01 by reference.

Item 3.03. Material Modification to Rights of Security Holders.



On June 27, 2014, a duly authorized committee (the "Committee") of the Board of Directors (the "Board") of American Apparel, Inc. (the "Company") declared a dividend distribution of one right (a "Right") for each outstanding share of common stock, par value $0.0001 per share, of the Company (the "Common Stock") to shareholders of record at the close of business on July 10, 2014 (the "Record Date"). Each Right entitles the registered holder to purchase from the Company a unit consisting of one ten-thousandth of a share (a "Unit") of Series A Junior Participating Preferred Stock, par value $0.0001 per share (the "Preferred Stock"), at a purchase price of $2.75 per Unit, subject to adjustment (the "Purchase Price"). The description and terms of the Rights are set forth in a Rights Agreement, dated as of June 27, 2014 (the "Rights Agreement"), between the Company and Continental Stock Transfer & Trust Company as Rights Agent.

Following is a summary of the terms of the Rights Agreement. The following summary is qualified in its entirety by reference to the Rights Agreement, a copy of which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.

Rights Certificates; Exercise Period. Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding, and no separate rights certificates ("Rights Certificates") will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a distribution date ("Distribution Date") will occur upon the earlier of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired beneficial ownership of fifteen percent (15%) or more of the outstanding shares of Common Stock (the "Stock Acquisition Date"), other than as a result of (a) preexisting beneficial ownership of Common Stock in excess of fifteen percent (15%) at the time of public announcement of the Rights Agreement (provided such person or group does not acquire an additional one percent (1%) of the outstanding shares of Common Stock), (b) repurchases of stock by the Company, (c) certain inadvertent actions by institutional or certain other stockholders or (d) the acquisition of stock pursuant to a Qualified Offer (as defined below), and (ii) 10 business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer (other than a Qualified Offer) that would result in a person or group becoming an Acquiring Person. For purposes of the Rights Agreement, beneficial ownership is defined to include ownership of derivative securities.

Under the terms of the Rights Agreement, Dov Charney will not be deemed to "beneficially own" any of the securities beneficially owned by Standard General L.P. ("SG"), as referenced in Amendment No. 13 to the Schedule 13D dated December 12, 2007, filed by Mr. Charney on June 27, 2014, solely by reason of the letter agreement dated June 25, 2014, between Dov Charney and SG (the "Letter Agreement"). However, Mr. Charney shall be deemed to "beneficially own" all such securities beneficially owned by SG upon either (i) entry into the definitive loan documents contemplated by the Letter Agreement, (ii) entry into the cooperation agreement contemplated by the Letter Agreement, (iii) any purchase of securities by Mr. Charney from SG following execution of the Letter Agreement or (iv) entry into any other agreement, arrangement or understanding with SG which would otherwise give Mr. Charney beneficial ownership of the securities beneficially owned by SG.

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Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates (or, in the case of shares reflected on the direct registration system, by the notations in the book entry accounts) and will be transferred with and only with such Common Stock, (ii) new Common Stock certificates issued after the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.

The Rights are not exercisable until the Distribution Date and will expire at 5:00 P.M. (New York City time) on June 27, 2015 (the "Final Expiration Date"), unless such date is extended or the Rights are earlier redeemed, exchanged or terminated.

As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board, only shares of Common Stock issued prior to the Distribution Date will be issued with the Rights.

Preferred Share Provisions. Each one ten-thousandth of a share of Preferred Stock, if issued: † will not be redeemable;



† will entitle holders to quarterly dividend payments of $0.0001 per one ten-thousandth of a share, or an amount equal to the dividend paid on one share of Common Stock, whichever is greater;

† will entitle holders upon liquidation either to receive $1 per one ten-thousandth of a share or an amount equal to the payment made on one share of Common Stock, whichever is greater;

† will have the same voting power as one share of Common Stock, unless dividends on shares of Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividend payments, in which case the one ten-thousandths of a share of Preferred Stock will also have the right, voting as a class, to elect two (2) directors; and

† if shares of the Company's common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of Common Stock.

Flip-in Trigger. In the event that a person or group of affiliated or associated persons becomes an Acquiring Person, except pursuant to an offer for all outstanding shares of Common Stock which the Board determines to be fair and not inadequate and to otherwise be in the best interests of the Company and its stockholders, after receiving advice from one or more investment banking firms (such an offer being referred to as a "Qualified Offer"), each holder of a Right will thereafter have the right to receive, upon exercise, Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the exercise price of the Right. Notwithstanding any . . .

Item 5.03 Amendments to Articles of Incorporation or



Bylaws; Change in Fiscal Year.

On June 28, 2014, the Board approved and adopted Amended and Restated Bylaws of the Company (the "Amended Bylaws"). The Amended Bylaws were effective immediately upon approval by the Board. The following changes are included in the Amended Bylaws:

† The advance notice period for the submission of director



nominations and stockholder proposals to be made at an annual meeting of stockholders is amended to 120-150 days before the anniversary date of the annual meeting from 60-90 days prior to the annual meeting. The advance notice period reopens if the annual meeting is called for a date that is more than 25 days before or after the anniversary date of the annual meeting. The Amended Bylaws expand the disclosure requirements and require additional representations for stockholders who propose business or make nominations and require additional disclosures regarding and representations by proposed director nominees.

† Before taking action by written consent, stockholders must



provide notice to the Board requesting the establishment of a record date to determine the stockholders entitled to take such action. The Board has 10 days following a stockholder request for a record date to adopt a resolution to set such record date, after which the Board has an additional 10 days to set the record date. The Amended Bylaws include disclosure requirements for stockholders proposing to take action by written consent, including, among other things, disclosing the text of the proposal and the disclosures required for stockholders who submit director nominations and stockholder proposals to be made at an annual meeting of stockholders.

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† The Amended Bylaws remove the ability of the Chief Executive



Officer, President, Chairman or stockholders to call a special meeting.

† The Amended Bylaws clarified that directors may only be removed



"for cause" (which is statutorily required for Delaware companies with a staggered Board of Directors).

† The Amended Bylaws remove the restriction on committees of the



Board of Directors from having the power or authority of the Board of Directors with respect to amending the Certificate of Incorporation of the Company.

The foregoing description of the Amended Bylaws is qualified in its entirety by reference to the Amended Bylaws, a copy of which is attached hereto as Exhibit 3.2 and is incorporated herein by reference.

Item 8.01 Other Events.



On June 27, 2014, the Company received a request from Mr. Charney purporting to call a special meeting of the Company's stockholders. Mr. Charney states that the purpose of the special meeting will be (i) to amend the Bylaws of the Corporation (the "Bylaws") to fix the number of directors serving on the Board at 15 directors, (ii) to amend the Bylaws to provide that vacancies on the Board created pursuant to actions taken at the special meeting may be filled with individuals identified in a proxy statement filed with the United Stated Securities and Exchange Commission without having to comply with any of the procedural requirements set forth in the Bylaws, (iii) to elect certain individuals to fill vacancies on the Board and (iv) to repeal any amendments to the Bylaws enacted subsequent to October 1, 2010 and prior to the adoption of the foregoing proposals at the special meeting. The Company believes that Mr. Charney's request is invalid and improper, among other reasons, due to the fact that Mr. Charney previously has been suspended as CEO and relieved of all powers to act on behalf of the Company, and the Committee's belief that the purpose of such request is to further Mr. Charney's own self-interest. As a result, the Company does not intend to comply with such request to call a special meeting and intends to vigorously contest any action seeking to compel the Company to do so.

On June 28, 2014, the Company issued a press release announcing the adoption of the Rights Agreement and the declaration of the Rights dividend. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits. (d) Exhibits: Exhibit Number Description 3.1 Certificate of Designation of Series A Junior Participating Preferred Stock of American Apparel, Inc. filed with the Secretary of State of the State of Delaware on June 30, 2014. 3.2 Amended and Restated Bylaws of American Apparel, Inc., as amended, effective as of June 28, 2014. 4.1 Rights Agreement, dated as of June 27, 2014, between American Apparel, Inc. and Continental Stock Transfer & Trust Company, as Rights Agent, including the form of Certificate of Designations as Exhibit A, the form of Rights Certificate as Exhibit B and the form of Summary of Rights to Purchase Preferred Stock as Exhibit C. 99.1 American Apparel, Inc. Press Release, dated June 28, 2014. 5



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