LOS ANGELES, Dec. 21, 2014 /PRNewswire/ -- American
Apparel, Inc. (NYSE MKT: APP) today announced that its Board of
Directors has adopted a new, one-year stockholder rights plan that
is designed to strengthen the ability of the Board of Directors to
protect the Company's stockholders.
Although certain standstill restrictions and voting limitations
are in place through the completion of the 2015 annual meeting
under the Nomination, Support and Standstill Agreement, the Board
implemented the rights plan as an additional means to ensure that
all American Apparel stockholders are treated fairly. The rights
plan is designed to limit the ability of any person or group to
seize control of the Company without appropriately compensating all
American Apparel stockholders. It is intended to provide the Board
of Directors and stockholders with time to make informed judgments.
It does not affect trading by passive investors, who may accumulate
as much as 10% of the Company's common stock, and it has no impact
on a takeover proposal for the entire company that is acceptable to
the holders of a majority of the Company's shares.
The Company's rights plan is similar to other plans adopted by
publicly held companies and the prior rights plan adopted by the
Company. If a person or group acquires 10% or more beneficial
ownership of the Company's common stock, such person will be deemed
to be an "Acquiring Person." If any person or group already
beneficially owns 10% or more of the Company's common stock as of
this announcement, such person or group (other than any person or
group subject to standstill restrictions) will not be deemed to be
an "Acquiring Person" unless such person acquires an additional
0.1% of the Company's common stock.
In the event that a person becomes an "Acquiring Person," except
pursuant to a qualifying offer for all outstanding shares of common
stock which the Board of Directors determines to be fair and not
inadequate and to otherwise be in the best interests of the Company
and its stockholders, each right will entitle its holder to
purchase, for $3.25 per share, a
number of shares of the Company's common stock or substantially
equivalent securities having a market value of twice such price. In
addition, following certain transactions such as a merger or other
business combination in which the Company is not the surviving
corporation, each right will entitle its holder to receive, upon
exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the right.
The Board of Directors adopted the rights plan following
evaluation and consultation with outside financial and legal
experts. The rights plan is not intended to prevent or deter
take-over bids that offer fair treatment and value to all
stockholders. Rather, the rights plan is intended to protect
stockholders from any threat of creeping control, provide the Board
and stockholders with adequate time to properly assess a take-over
bid without undue pressure, and provide them with adequate time to
fully assess an unsolicited take-over bid.
The rights plan and a summary of its terms will be filed with
the Securities and Exchange Commission in a Form 8-K.
About American Apparel
American Apparel is a vertically integrated manufacturer,
distributor, and retailer of branded fashion basic apparel based in
downtown Los Angeles, California.
As of September 30, 2014, American
Apparel had approximately 10,000 employees and operated 249 retail
stores in 20 countries, including the
United States, Canada,
Mexico, Brazil, United
Kingdom, Austria,
Belgium, France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland, Australia, Japan, South
Korea, and China. American
Apparel also operates a global e-commerce site that serves over 60
countries worldwide at http://www.americanapparel.com. In addition,
American Apparel operates a leading wholesale business that
supplies high quality T-shirts and other casual wear to
distributors and screen printers.
This press release, and other statements that the Company may
make, may contain forward-looking statements. Forward-looking
statements are statements that are not historical facts and may
include statements regarding, among other things, the future
effects of the rights plan. Such statements are based upon the
current beliefs and expectations and are subject to risks and
uncertainties which could cause actual results and/or the timing of
events to differ materially from those set forth in the
forward-looking statements. More detailed information about these
and other factors are detailed in the Company's filings with the
Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended December 31, 2013 and Quarterly Report on Form
10-Q for the quarter ended September 30,
2014. The Company's filings with the SEC are available at
www.sec.gov. You are urged to consider these factors carefully in
evaluating the forward-looking statements herein and are cautioned
not to place undue reliance on such forward-looking statements,
which are qualified in their entirety by this cautionary statement.
The forward-looking statements speak only as of the date on which
they are made and the Company undertakes no obligation to publicly
update such forward-looking statements to reflect subsequent events
or circumstances.
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SOURCE American Apparel