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.
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,
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
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
† will entitle holders upon liquidation either to receive
† 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.
† 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.
† 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
† 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.
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 Stateof the State of Delawareon 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