Attached files
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) November 30,
2018
AutoWeb, Inc.
(Exact name of registrant as specified in its charter)
Delaware
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1-34761
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33-0711569
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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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18872
MacArthur Boulevard, Suite 200,
Irvine,
California
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92612-1400
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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 (949)
225-4500
(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:
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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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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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth company
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
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On
November 30, 2018, AutoWeb, Inc., a Delaware corporation
(“AutoWeb”
or “Company”) entered into a Tax
Benefit Preservation Plan Exemption Agreement (“Exemption Agreement”) with Daniel
M. Negari, The 1 8 999 Trust, a trust organized under the laws of
Nevada, Michael R. Ambrose, and The Insight Trust, a trust
organized under the laws of Nevada (collectively, the
“Initial Requesting
Persons”).
Tax Benefit Preservation Plan
As
previously reported, effective as of May 26, 2010, the Company
adopted a Tax Benefit Preservation Plan, which plan was amended by
Amendment No. 1 to Tax Benefit Preservation Plan dated as of April
14, 2014 and by Amendment No. 2 to Tax Benefit Preservation Plan
dated April 13, 2017, and the number of rights thereunder adjusted
by that Certificate of Adjustment dated as of July 12, 2012 (the
original plan, as amended and adjusted, is collectively referred to
herein as the “Plan.” The Board of Directors of
the Company (“Board”) adopted the Plan to
protect stockholder value by preserving important tax assets. The
Company has generated substantial net operating loss carryovers and
other tax attributes for United States federal income tax purposes
(“Tax Benefits”)
that can generally be used to offset future taxable income and
therefore reduce federal income tax obligations. However, the
Company’s ability to use the Tax Benefits will be adversely
affected if there is an “ownership change” of the
Company as defined under Section 382 of the Internal Revenue
Code (“Section
382”). In general, an ownership change will occur if
the Company’s “5%
shareholders” (as defined under Section 382)
collectively increase their ownership in the Company by more than
50% over a rolling three-year period.
The
Plan was adopted to reduce the likelihood that the Company’s
use of its Tax Benefits could be substantially limited under
Section 382. The Plan is intended to deter any
“Person” (as defined in the Plan) from becoming an
“Acquiring Person” (as defined in the Plan) and thereby
jeopardizing the Company’s Tax Benefits. In general, an
Acquiring Person is any Person, itself or together with all
“Affiliates” (as defined in the Plan) of such Person,
that becomes the “Beneficial Owner” (as defined in the
Plan) of 4.9% or more of the Company’s outstanding
“Common Stock” (as defined in the Plan). Under the
Plan, the Board may, in its sole discretion, exempt any person from
being deemed an Acquiring Person for purposes of the Plan if the
Board determines that such person’s ownership of Common Stock
will not be likely to directly or indirectly limit the availability
of the Company’s Tax Benefits or is otherwise in the best
interests of the Company (“Plan Exemption”). The
Board does not have any obligation, implied or otherwise, to grant
any Plan Exemptions.
The
foregoing description of the Plan does not purport to be complete
and is qualified in its entirety by reference to the Tax Benefit
Preservation Plan dated as of May 26, 2010 between the Company and
Computershare Trust Company, N.A., as rights agent, together with
the following exhibits thereto: Exhibit A – Form of Right
Certificate; and Exhibit B – Summary of Rights to Purchase
Shares of Preferred Stock of the Company, which is incorporated
herein by reference to Exhibit 4.1 to the Current Report on Form
8-K filed with the SEC on June 2, 2010 (SEC File No. 000-22239), as
amended by Amendment No. 1 to Tax Benefit Preservation Plan dated
as of April 14, 2014, between the Company and Computershare Trust
Company, N.A., as rights agent, which is incorporated herein by
reference to Exhibit 4.1 to the Current Report on Form 8-K filed
with the SEC on April 16, 2014 (SEC File No. 001-34761), and as
amended by Amendment No. 2 to Tax Benefit Preservation Plan dated
as of April 13, 2017 between the Company and Computershare Trust
Company, N.A., as rights agent, which is incorporated herein by
reference to Exhibit 4.1 to the Current Report on Form 8-K filed
with the SEC on April 14, 2017 (SEC File No. 001-34761), together
with the Certificate of Adjustment Under Section 11(m) of the Tax
Benefit Preservation Plan, which is incorporated herein by
reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 2012 filed with the SEC on
November 8, 2012 (SEC File No. 001-34761).
Summary Description of the Exemption Agreement
The
Initial Requesting Persons informed the Company that as of November
30, 2018 (“Exemption
Agreement Effective Date”), the Initial Requesting
Persons, together with all of their respective Affiliates and
Associates, beneficially owned 621,970 shares of Common Stock, or
approximately 4.8% of the Company’s outstanding Common Stock,
as of that date (“Current
Holdings”). The Initial Requesting Persons also
informed the Company that if permitted to do so under the Plan, the
Initial Requesting Persons would be interested in acquiring
Additional Beneficially Owned Shares (as defined below) of Common
Stock in excess of the Current Holdings. The Initial Requesting
Persons requested that the Board consider exercising its
discretionary authority under the Plan to deem the Initial
Requesting Persons and their respective Affiliates not to be an
Acquiring Person and to grant a Plan Exemption for the Initial
Requesting Persons and their respective Affiliates to acquire
Beneficial Ownership of Additional Beneficially Owned Shares of
Common Stock in excess of the Current Holdings.
The
Board considered the Initial Requesting Persons’ request and
granted a Plan Exemption to acquire shares of Common Stock in
excess of the Current Holdings provided that the aggregate number
of shares of Common Stock Beneficially Owned by the Initial
Requesting Persons, any other Requesting Persons (as defined below)
that may become a party to the Exemption Agreement in accordance
with the terms hereof and their respective Affiliates and
Associates does not collectively exceed 15% of the Company’s
outstanding shares of Common Stock at the time of the acquisition
of Beneficial Ownership of the Additional Beneficially Owned Shares
of Common Stock, subject to and in reliance upon the Initial
Requesting Persons and any other such Requesting Persons entering
into and remaining in compliance with the terms and conditions set
forth in the Exemption Agreement.
Under
the Exemption Agreement, the Initial Requesting Persons, any other
persons that may become a party to the Exemption Agreement pursuant
to the terms thereof, and their respective Affiliates
(collectively, “Requesting
Persons”) agreed that at any meeting (whether annual
or special and whether or not an adjourned or postponed meeting) of
the stockholders of the Company, and in any action by written
consent of the stockholders of the Company, the Requesting Persons
shall (i) appear at the meeting or otherwise cause any and all of
the portion of Shares (as defined in the Exemption Agreement) which
equals or exceeds 4.90% of the shares of Common Stock then
outstanding (“Exemption
Shares”) to be counted as present thereat for purposes
of establishing a quorum; (ii) vote (or cause to be voted) any and
all Exemption Shares the same proportion (for or against) as the
shares actually voted for or against such matters by the
stockholders of the Company, other than the Requesting Persons and
their respective Affiliates; and (iii) granted representatives of
the Company irrevocable proxies (“Irrevocable Proxies”) to vote the
Exemption Shares in accordance with the foregoing instructions. The
Requesting Persons further agreed not to enter into any proxy,
agreement or understanding with any person or entity the effect of
which would be materially inconsistent with or violative of any
provision contained herein.
In addition to the foregoing
voting agreement and proxies, the Requesting Persons agreed that
they will not, in any manner, directly or indirectly, (except: (i)
pursuant to a negotiated transaction approved by the Board; or (ii)
as may otherwise be approved by the Board):
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make, effect,
initiate, cause or participate in (i) any acquisition of Beneficial
Ownership of any securities of the Company or any securities of any
Subsidiary (as defined in the Plan) or other Affiliate or Associate
(as defined in the Plan) of the Company (except as such transfers
between Requesting Persons in compliance with Section 2.2 in the
Exemption Agreement), (ii) any Company Acquisition Transaction (as
defined in the Exemption Agreement), or (iii) any
“solicitation” of “proxies” (as those terms
are defined in Rule 14a-1 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended) or consents
with respect to any securities of the Company, or take any action
which might force the Company to make a public announcement
regarding any of these types of matters;
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nominate or seek to
nominate any person to the Board or otherwise act, alone or in
concert with others, to seek to control or influence the
management, Board or policies of the Company; provided
that a Requesting Person may seek privately with the Board or the
Company’s Chief Executive Officer to influence the decisions
made by the existing management or Board in a manner (1) that is
not disclosed publicly and (2) would not force the Company to make
a public announcement regarding such influence;
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request or propose
that the Company (or its directors, officers, employees or agents),
directly or indirectly, amend or waive any provision of standstill
provisions of the Exemption Agreement unless such request or
proposal is made privately to the Board in a manner (1) that is not
disclosed publicly and (2) that would not force the Company to make
a public announcement regarding such request or
proposal;
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agree or offer to
take, or encourage or propose (publicly or otherwise) the taking
of, any action referred to in the standstill provisions of the
Exemption Agreement;
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assist, induce or
encourage any other Person to take any action referred to in the
standstill provisions of the Exemption Agreement; or
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enter into any
discussions or arrangements with any third party with respect to
the taking of any action referred to in the standstill provisions
of the Exemption Agreement.
The
Exemption Agreement allows the Requesting Persons as a group to
acquire Beneficial Ownership of additional shares of Common Stock
(“Additional Beneficially
Owned Shares”) as long as (i) the collective
Beneficial Ownership of the Requesting Persons and their respective
Affiliates and Associates does not exceed 1,942,342 shares of
Common Stock at the time of the acquisition of Beneficial Ownership
of the Additional Beneficially Owned Shares (which number of shares
represents approximately 15% of the Company’s outstanding
Common Stock as of the Exemption Agreement Effective Date); (ii)
the Requesting Persons are in compliance with all of the provisions
of the Exemption Agreement as of the acquisition date of any
Additional Beneficially Owned Shares; (iii) the representations and
warranties of the Requesting Persons in the Exemption Agreement
shall be true, accurate and complete as if made as of the date of
any such acquisition of Additional Beneficially Owned Shares; (iv)
the acquisition of Additional Beneficially Owned Shares would not
result in any Person who is not a Requesting Person or any
Affiliate or Associate of a Requesting Person, individually or
collectively, constituting a 5% shareholder under Section 382; and
(v) the acquisition of the Additional Beneficially Owned Shares is
completed within three months of the Exemption Agreement Effective
Date.
The
Exemption Agreement will remain in effect until the earliest to
occur of the following (as a result of which the Exemption
Agreement shall immediately terminate) (i) at any time by written
consent of each of the Requesting Persons and the Company; (ii)
automatically upon the termination of the Plan whether by the Board
or upon its own terms, unless a substitute or successor tax benefit
preservation or other stockholder rights plan is implemented, in
which case the Exemption Agreement shall not terminate; (iii)
automatically without any further action by the parties hereto, at
such time as the Requesting Persons (together with their respective
Affiliates and Associates) collectively Beneficially Own less than
4.9% of the Company’s then outstanding shares of Common
Stock.
The
foregoing description of the Exemption Agreement and Irrevocable
Proxies does not purport to be complete and is qualified in its
entirety by reference to the full text of the Exemption Agreement
and the Irrevocable Proxies, which are filed with this Current
Report on Form 8-K as Exhibits 10.1, 10.2, 10.3, 10.4, and 10.5,
respectively, and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Tax Benefit
Preservation Plan Exemption Agreement, effective as of November 30,
2018, by and between AutoWeb, Inc. and Daniel M. Negari, The 1 8
999 Trust, a trust organized under the laws of Nevada, Michael R.
Ambrose, and The Insight Trust, a trust organized under the laws of
Nevada.
Irrevocable Proxy
dated as of November 30, 2018 by Daniel M. Negari.
Irrevocable Proxy
dated as of November 30, 2018 by The 1 8 999 Trust, a trust
organized under the laws of Nevada.
Irrevocable Proxy
dated as of November 30, 2018 by Michael R. Ambrose.
Irrevocable Proxy
dated as of November 30, 2018 by The Insight Trust, a trust
organized under the laws of Nevada.
SIGNATURES
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.
Date:
November 30, 2018
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AUTOWEB, INC.
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By:
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/s/ Glenn E.
Fuller
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Glenn
E. Fuller, Executive Vice
President,
Chief Legal and Administrative
Officer
and Secretary
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