Attached files
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| EX-10.1 - EXHIBIT 10.1: LETTER AGREEMENT DATED 10/28/09 - AMERICAN APPAREL, INC | ex10-1.htm |
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): October 28, 2009
American
Apparel, Inc.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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001-32697
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20-3200601
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
|
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747
Warehouse Street, Los Angeles, CA
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90021-1106
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (213) 488-0226
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
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):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement.
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On October 28, 2009, American Apparel,
Inc. (the “Company”) entered into a letter agreement (the “Letter Agreement”),
dated as of March 13, 2009, among the Company, Dov Charney, the Company’s
President, Chief Executive Officer and Chairman of the Board of Directors (“Mr.
Charney”), and Lion/Hollywood L.L.C. (“Lion”), under which the Company and Lion
agreed that notwithstanding restrictions on Mr. Charney’s ability to transfer
shares of the Company’s common stock that are subject to the Lock-Up Agreement,
dated December 12, 2007, executed by Mr. Charney, as extended by the Letter
Agreement Re: Extension of Lock-Up Agreement, dated March 13, 2009 (the “Lock-Up
Extension Letter”), among Mr. Charney, the Company and Lion, Mr. Charney has the
right to pledge his right, title and interest in, to and under, in a single
transaction or in multiple transactions, at any time and from time to time, an
aggregate of up to five million (5,000,000) such shares. The
foregoing description of the Letter Agreement does not purport to be complete
and is qualified in its entirety by reference to the Letter Agreement, which is
filed herewith as Exhibit 10.1 and incorporated herein by this
reference.
In addition to being a party to the
Lock-Up Extension Letter, Lion is (i) an affiliate of Lion Capital (Americas)
Inc., which along with Lion is a lender under the Credit Agreement, dated as of
March 13, 2009 (as modified by the Resignation, Waiver, Consent and Appointment
Agreement dated as of March 31, 2009), among the Company, in its capacity as
borrower, certain subsidiaries of the Company, in their capacity as facility
guarantors, Wilmington Trust FSB, in its capacity as administrative agent and
collateral agent, Lion Capital (Americas) Inc., as a lender, Lion/Hollywood
L.L.C., as a lender, and other lenders from time to time party thereto, (ii) a
party to an Investment Agreement, dated as of March 13, 2009, as amended as
of April 10, 2009, June 17, 2009 and August 18, 2009, with the Company pursuant
to which Lion is entitled to certain board representation and registration
nights and was issued a warrant which is exercisable at any time during its
term, to purchase an aggregate of 16 million shares of the Company’s common
stock at an exercise price of $2.00 per share, subject to adjustment in certain
circumstances, and (iii) a party to an Investment Voting Agreement, dated
as of March 13, 2009, with the Company. The foregoing agreements and
certain other agreements to which Lion is a party are described in more
detail in the Company’s Current Reports on Forms 8-K filed with the
Securities and Exchange Commission on March 16, 2009, April 16, 2009, June 19,
2009 and August 20, 2009.
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Item
5.02
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Departure
of Directors of Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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On October 28, 2009, at the 2009 Annual
Meeting of the Stockholders of the Company, the Company’s stockholders approved
the American Apparel, Inc. Incentive Compensation Plan (the “Incentive Plan”),
under which certain cash awards are intended to qualify as performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986, as
amended.
The payment of awards under the
Incentive Plan may be based upon the attainment of one or more of the
performance goals set forth in the Incentive Plan. In no event will
payment in respect of awards granted for any performance period of one year or
less in length be made to a participant in an amount that exceeds $4,000,000 and
for awards for any other performance period, the maximum amount of the payment
to a participant may not exceed $4,000,000
multiplied
by a fraction, the numerator of which is the number of months in the
performance period and the denominator of which is twelve.
The
Company’s Board of Directors approved a performance bonus to Mr. Charney on
April 13, 2009, subject to stockholder approval of the Incentive Plan. The
amount of the performance bonus is subject to the attainment by the Company of
certain performance goals for revenue, profitability, and working capital for
the eight month period from May 1, 2009 to December 31, 2009, with a target
bonus of $1,625,000 and a maximum bonus of $2,375,000.
The foregoing description of the
Incentive Plan does not purport to be complete and is qualified in its entirety
by reference to the Incentive Plan, which was included in the Company’s revised
definitive proxy statement filed with the Securities and Exchange Commission on
September 11, 2009, and incorporated herein by this reference.
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Item 9.01
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Financial
Statements and Exhibits.
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(d) Exhibits.
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10.1
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Letter
Agreement Re: Pledging of Restricted Securities, dated October 28, 2009,
among Dov Charney, Lion/Hollywood L.L.C. and American Apparel,
Inc.
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10.2
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American
Apparel, Inc. Incentive Compensation Plan (included as Appendix A of the
Revised Definitive Proxy Statement (No. 001-32697), filed September 11,
2009 and incorporated by reference
herein)
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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.
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AMERICAN
APPAREL, INC.
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Dated:
November 3, 2009
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By:
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/s/
Glenn A. Weinman
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Name:
Glenn A. Weinman
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Title: Senior
Vice President, General
Counsel
and Secretary
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EXHIBIT
INDEX
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Exhibit
No.
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Description
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10.1
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Letter
Agreement Re: Pledging of Restricted Securities, dated October 28, 2009,
among Dov Charney, Lion/Hollywood L.L.C. and American Apparel,
Inc.
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10.2
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American
Apparel, Inc. Incentive Compensation Plan (included as Appendix A of the
Revised Definitive Proxy Statement (No. 001-32697), filed September 11,
2009 and incorporated by reference
herein)
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