Information About the Annual Meeting and Voting
Can I change my vote after I have voted?
You may revoke your proxy and change your vote at any time before the taking of the vote at the SpecialAnnual Meeting. Prior to the applicable cutoff time, you may change your vote using the Internet or telephone methods described above, in which case only your latest Internet or telephone proxy submitted prior to the SpecialAnnual Meeting will be counted. You may also revoke your proxy and change your vote by signing and returning a new proxy card or voting instruction form dated as of a later date, or by attending the SpecialAnnual Meeting and voting in person. However, your attendance at the SpecialAnnual Meeting will not automatically revoke your proxy unless you properly vote at the SpecialAnnual Meeting or specifically request that your prior proxy be revoked by delivering a written notice of revocation to Superior’s Corporate Secretary at 26600 Telegraph Rd., Suite 400, Southfield, MI 48033 prior to the SpecialAnnual Meeting.
Who will serve as the inspector of election?
A representative from Broadridge will serve as the inspector of election.
How can I attend the Special Meeting?
Only stockholders as of the Record Date are entitled to attend the Special Meeting. Each stockholder must present valid picture identification such as a driver’s license or passport and provide proof of stock ownership as of the Record Date. The use of mobile phones, pagers, recording or photographic equipment, tablets and/or computers is not permitted at the Special Meeting.
Where can I find the voting results?
Preliminary voting results will be announced at the SpecialAnnual Meeting. Final voting results will be tallied by the inspector of election after the taking of the vote at the SpecialAnnual Meeting. Superior will publish the final voting results in a Current Report on Form8-K, which Superior is required to file with the SEC within four business days following the SpecialAnnual Meeting.
Who is paying the costs of this proxy solicitation?
Superior is paying the costs of the solicitation of proxies. Superior has retained Okapi Partners LLC to assist in obtaining proxies by mail, facsimile, telephone or email from brokerage firms, banks, broker-dealers or other similar organizations representing beneficial owners of shares for the Special Meeting. We have agreed to pay such firm a fee of approximately $50,000.00 plus out-of-pocket expenses. Okapi Partners LLC may be contacted toll-free at (877) 629-6356. Superior may also reimburse brokerage firms, banks, broker-dealers or other similar
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organizations for the cost of forwarding proxy materials to beneficial owners. In addition, certain of Superior’s directors, officers and regular employees, without additional compensation, may solicit proxies on Superior’s behalf in person, by telephone, by fax or by electronic mail. See “Proxy Solicitation and Costs” in this proxy statementProxy Statement for further information.
What happens ifHow can I attend the Special Meeting is postponed or adjourned?Annual Meeting?
If the Special Meeting is postponed or adjourned due to a lack of a quorum or to solicit additional proxies, we intend to reconvene the Special Meeting as soon as reasonably practical. Your proxy will still be effective and may be voted at the rescheduled or adjourned meeting, and you will still be able to change or revoke your proxy until it is voted at the rescheduled or adjourned meeting.
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PROPOSAL NO. 1 – EQUITY RIGHTS PROPOSAL
Approval of the Conversion Right and the Preemptive Right
Background of the Investment
Pursuant to the Investment Agreement, which we signed on March 22, 2017, TPG agreed to make a $150 million equity investment in the Company in exchange for shares of our newly created Series A Preferred Stock and shares of our newly created Series B Preferred Stock, the terms of each of which are outlined in our Certificate of Designations relating to the Series A Preferred Stock and Series B Preferred Stock filed with our Certificate of Incorporation, and described under “Description of the Preferred Stock” below. In addition, we agreed to the terms of an Investor Rights Agreement, which was entered into upon closing of the Investment on May 22, 2017. TPG’s ownership in the Company was approximately 19.99% on an as-converted basis at the closing of the Investment on May 22, 2017. For a more detailed description of TPG Growth’s equity investment in the Company and each of the Investment Documents, see “Description of the Investment Documents” below.
We were attracted to the opportunity with TPG because (i) it provided a large single source of capital to finance a portion of the Uniwheels transaction, (ii) provided capital that was less restrictive than debt, (iii) the conversion issue price negotiated was at a 15% premium to our 30-day trailing average common stock price, and (iv) we believe that the strategic relationship with TPG will provide significant benefits to us as a result of TPG’s broad business relationships, including in our industry. Additionally, we believe that TPG, through its representation on our Board, will provide valuable insight to the Company as it continues to execute its growth strategy, including through the acquisition of Uniwheels.
Equity Rights Proposal Highlights
The Company’s common stock is listed on the NYSE and, as a result, the Company is subject to certain NYSE listing rules and regulations. NYSE Rule 312.03(c) requires stockholder approval prior to the issuance of common stock, or securities convertible into or exercisable for common stock, in any transaction or series of transactions if (i) the common stock to be issued has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock or of securities convertible into or exercisable for common stock, or (ii) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock or of securities convertible into or exercisable for common stock. Because of this restriction, in exchange for the Investor’s $150 million investment in the Company, the Investor received 140,202 shares of Series A Preferred Stock, which was convertible into a number of shares of common stock representing approximately 19.99% of our outstanding common stock prior to such issuance and, in lieu of additional shares of Series A Preferred Stock, the Investor received 9,798 shares of Series B Preferred Stock. Pursuant to the terms of the Company’s Certificate of Designations, all outstanding Series B Preferred Stock will convert into shares of our Series A Preferred Stock (and, consequently, become convertible into shares of our common stock) only upon receipt of stockholder approval.
If the Company’sOnly stockholders do not approve the Equity Rights Proposal, then the Series B Preferred Stock will not convert into Series A Preferred Stock and, therefore, not become convertible into common stock. Furthermore, if stockholder approval is not obtained by September 19, 2017, the dividend rate applicable to the Series B Preferred Stock will increase from 9% per annum to 11% per annum unless and until stockholder approval is subsequently obtained. Dividends on either the Series A Preferred Stock the Series B Preferred Stock are payable, at the Company’s election, in cash or in the form of an increase in the Stated Value of such share. Until stockholder approval is obtained, any non-cash dividends must be paid in the form of an increase in the Stated Value of the Series B Preferred Stock and shall not result in an increase in the Stated Value of the Series A Preferred Stock.
The NYSE has certain additional rules, including NYSE Rule 312.03(b), which requires stockholder approval prior to issuances of securities to, among others, directors and substantial stockholders of the Company,
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that could be implicated in the future if the Investor exercises the Preemptive Right. In order to eliminate any requirement that the future exercise of the Preemptive Right would require stockholder approval, we are seeking such approval now as part of the Equity Rights Proposal. For a more detailed description of the Preemptive Right, see the description under “Description of the Investment Documents—Investor Rights Agreement—Preemptive Rights” below.
Finally, if the stockholders do not approve the Equity Rights Proposal at the Special Meeting, then the Company is obligated to use its reasonable best efforts to obtain stockholder approval at the Company’s next annual meeting of stockholders and each subsequent annual meeting thereafter.
Based on the capitalization of the Company as of the Record Date the conversion of all of the Series A Preferred Stock into shares of common stock (including shares of Series A Preferred Stock issuable upon conversion of the Series B Preferred Stock) would result in the Investor owning approximately % of our outstanding common stock after giving effect to such conversion.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE EQUITY RIGHTS PROPOSAL.
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DESCRIPTION OF THE INVESTMENT DOCUMENTS
The following is a summary of the material terms of the Investment Agreement and the Investor Rights Agreement. While we believe this summary covers the material terms of these agreements, we encourage you to read each of them; the Investment Agreement is included as Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC by the Company on March 24, 2017 and the Investor Rights Agreement is included as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC by the Company on May 26, 2017. For more information about accessing the Current Reports on form 8-K and other information that we file with the SEC, please see “Where You Can Find More Information” below.
Investment Agreement
On March 22, 2017, the Company and TPG entered into the Investment Agreement, pursuant to which TPG agreed to purchase a number of shares of the Company’s newly authorized Series A Preferred Stock, at a purchase price and liquidation preference of $1,000 per share, and Series B Preferred Stock, at a purchase price and liquidation preference of $1,000 per share, for an aggregate investment in the Company by TPG of $150 million in a private placement exempt from the registration requirements of the Securities Act. The terms of the Series A Preferred Stock and Series B Preferred Stock are described under “Description of Preferred Stock” below. The Investment closed on May 22, 2017 (the “Closing”).
Closing
At the Closing, the Certificate of Designations, which had been adopted and approved by the Board, was filed with the Secretary of State of the State of Delaware. Additionally, at the Closing, the Company entered into the Investor Rights Agreement and appointed Ransom A. Langford to the Board as designee of TPG, as described more fully below under “—Investor Rights Agreement.”
Covenants
The Company has undertaken to hold a special meeting of stockholders within 120 days of the Closing for the purposes of approving (i) the conversion of the Series B Preferred Stock into Series A Preferred Stock and (ii) the issuance of additional shares of Series A Preferred Stock, including the issuance of shares of common stock upon conversion thereof. If the stockholders do not approve these items at the meeting described in this proxy statement, the Company must use its reasonable best efforts to obtain stockholder approval at the next annual meeting of stockholders and each subsequent annual meeting thereafter.
In addition, pursuant to the Investment Agreement, the Company applied to cause the shares of common stock to be issued upon conversion of the Series A Preferred Stock to be approved for listing on NYSE, which approval has been obtained, subject to official notice of issuance.
Representations and Warranties
In the Investment Agreement, each of the Company and TPG made certain representations and warranties. The Company’s representations and warranties to TPG included, among others, representations and warranties with respect to its capitalization and certain other representations regarding matters relating to the Company’s business and the issuance of the Company’s securities. TPG’s representations and warranties to the Company included, among others, representations and warranties about its status as an accredited investor and its investment intent. The representations and warranties in the Investment Agreement survive until the first anniversary of Closing.
Stockholders are not third-party beneficiaries under the Investment Agreement and should not construe the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of
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facts or condition of the Company, TPG or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Investment Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The provisions of the Investment Agreement, including the representations and warranties, should not be read alone, but instead should only be read together with the information provided elsewhere in this proxy statement and in the documents incorporated by reference into this proxy statement, including the periodic and current reports and statements that the Company files with the SEC. For more information regarding these documents incorporated by reference, see “Where You Can Find More Information” below.
Investor Rights Agreement
On May 22, 2017, in connection with the Closing, the Company and TPG entered into the Investor Rights Agreement in order to establish various arrangements with respect to the governance of the Company, certain actions that may or may not be taken with respect to, and certain rights with respect to, TPG’s Preferred Stock.
Board Representation and Observer Rights
Pursuant to the terms of the Investor Rights Agreement, the Company increased the size of the Board from eight to nine members immediately upon the Closing, and TPG had the right to nominate one individual to serve on our Board. On May 22, 2017, Ransom A. Langford was appointed to our Board, effective as of Closing, upon designation by TPG. Mr. Langford did not participate in his capacity as director in discussions of, or vote with respect to, matters related to the Investment that were approved by our Board, including our Board vote recommending approval of the conversion of the Series B Preferred Stock into Series A Preferred Stock and the issuance common stock upon conversion of the Series A Preferred Stock.
Under the Investment Agreement, TPG has the right to designate one person to be appointed or nominated for election to the Board so long as TPG and its affiliates hold 50% of the amount of the original Investment (including common stock into which the Preferred Stock may convert) (the “Investor Amount”).
Provided that TPG, together with its affiliates, maintains its Investor Amount, the Company will take such action as is necessary to have an Investor director on the board at all times, including, but not limited to, including the TPG designee in the Company’s slate of Board nominees for election by the Company’s stockholders and including such nominee in the Company’s proxy statement. Each TPG nominee that is elected to the Board will receive the same indemnification rights and will be entitled to the same insurance coverage as is provided to each of the other Board members.
The Investor Rights Agreement sets forth certain criteria that TPG nominees must meet, including, among others, not being prohibited or disqualified from serving as a director pursuant to any rule or regulation of the SEC, NYSE or applicable law, and provides the Board the right, subject to certain requirements, to object to the nomination or appointment of any such nominee to the Board that does not meet the applicable criteria, in which case TPG will be allowed to designate another person who meets the specified requirements for nomination or appointment, as applicable, to the Board.
Upon the death, disability, disqualification resignation or removal of a TPG nominee from the Board, TPG will have the right to designate a new director to fill the resulting vacancy, as long as TPG has retained the Investor Amount.
If the Investor Amount is between 10% and 50%, TPG may designate a Board observer to attend and participate in all Board meetings in a non-voting capacity.
Registration Rights
Pursuant to the Investor Rights Agreement, the Company has provided TPG with certain registration rights with respect to its Registrable Securities (as hereinafter defined), as described in more detail below. “Registrable
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Securities” means any shares of Preferred Stock, common stock or any other securities of the Company for which Preferred Stock may be converted, redeemed or exchanged, held or beneficially owned by TPG or its transferees.
The Company is required to file, prior to the one year anniversary of Closing, a registration statement for a shelf registration on Form S-3 (the “Form S-3 Shelf”), or, if the Company is ineligible to use a Form S-3 Shelf, a registration statement for a shelf registration on Form S-1 (the “Form S-1 Shelf”) covering the resale of the Registrable Securities on a delayed or continuous basis. If the shelf registration ceases to be effective under the Securities Act while Registrable Securities are still outstanding, the Company must use reasonable efforts to cause the shelf registration to be effective again or file an additional shelf registration statement.
At any time after Closing, TPG may request (i) registration under the Securities Act of all or any portion of the Registrable Securities on Form S-3, if available, and (ii) registration under the Securities Act for all or any portion of the Registrable Securities held by the requesting holder on Form S-1 if a Form S-3 registration is not available (each, a “Demand Registration”). The holders of the Registrable Securities are limited to three Demand Registrations in total and no more than two demand registrations in any 12-month period. If the offering of Company securities pursuant to a demand registration is in the form of an underwritten public offering, TPG may designate the investment banker(s) and manager(s) to administer the offering, subject to the approval of the Company, however the Company is not obligated to effect an underwritten offering pursuant to a shelf registration unless the aggregate offering price is expected to exceed $50 million or includes all remaining Registrable Securities.
In addition to the foregoing shelf and demand registration rights, TPG will have piggyback registration rights pursuant to which TPG may require the inclusion of some or all of its Registrable Securities in any registration filed by the Company for the account of the Company or any of the Company’s other security holders (provided that the registration permits the inclusion of such Registrable Securities). In any such registration that is an underwritten offering, the Company has the right to select the investment banker(s) and manager(s), subject to the approval of TPG, and to the extent requested by the underwriters, the Company may reduce the number of the Investor’s Registrable Securities to be included in any such registration.
The Company will pay all of the costs and expenses incurred in connection with any registrations under the Investor Rights Agreement. The Company will not, however, be obligated to pay any out-of-pocket expenses incurred by TPG (other than the expenses of one counsel for all such holders) or any underwriting discounts and commissions attributable to the sale of the Registrable Securities.
The Investor Rights Agreement provides for customary registration rights indemnification by each of the Company and the Investor.
Preemptive Rights
Pursuant to the terms of the Investor Rights Agreement, except in the case of Excluded Issuances (as hereinafter defined), TPG has the right (but not the obligation) to participate in future equity issuances by the Company of capital stock or other securities convertible or exchangeable into capital stock for so long as the Investor Amount is at least 50%. An “Excluded Issuance” means (i) the issuance of shares of any capital stock (including upon exercise of options) to directors, officers, employees, consultants or other agents of the Company as approved by the Board in connection with their employment or performance of services, (ii) the issuance of any capital stock in connection with any “business combination” (as defined in the rules and regulations promulgated by the SEC) or otherwise in connection with bona fide acquisitions of securities or substantially all of the assets of another person, business unit, division or business, in each case, to the sellers in such transaction as consideration thereof, (iii) the issuance of any securities pursuant to the conversion, redemption or exchange of Preferred Stock issued to TPG and (iv) the issuance of any shares of a subsidiary of the Company to the Company or a wholly owned subsidiary of the Company.
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The Investor Rights Agreement provides that the Company must give TPG written notice no less than 5 business days before the closing of an issuance of capital stock and offer to sell to TPG, on such terms as the new capital stock is to be issued, a pro rata portion of such capital stock (based on the ownership percentage of TPG of the Company’s outstanding common stock, assuming full conversion of TPG’s Preferred Stock). TPG must exercise its preemptive right by written notice on or prior to the business day immediately before the date of closing of the equity issuance. If TPG does not exercise its preemptive rights within the applicable period, the Company may sell the applicable equity interests to other investors. If the Company has not sold the equity interests within 120 days of its original notice to TPG, the Company must provide TPG with a new notice prior to undertaking a subsequent equity issuance.
Transfer Restrictions
The Investor Rights Agreement contains customary transfer restrictions whereby TPG may not transfer any Preferred Stock or any securities into which the Preferred Stock is convertible for one year following the Closing. After the one-year period, TPG may not transfer to (i) any competitor of the Company or (ii) any person that would, to TPG’s knowledge, hold 25% or more of the common stock (on an as-converted basis) as a result of the transfer.
Other Covenants
For so long as the Investor Amount is at least 50%, the Company must obtain consent from the holders of at least a majority of the outstanding Preferred Stock before adopting any plan of liquidation, dissolution or winding up of the Company, or filing any voluntary petition for bankruptcy, receivership or similar proceedings.
At all times while the Investor Amount is greater than 10%, TPG shall not, directly or indirectly, and shall cause affiliates not to acquire, offer to acquire, agree to acquire or make a public proposal to acquire, by purchase or otherwise, capital stock of the Company, or any right to vote or direct the voting of any capital stock of the Company;provided that these restrictions do not apply to (x) purchases or acquisitions permitted under the Investor Rights Agreement, (y) acquisitions of capital stock of the Company issued in connection with stock dividends, stock splits, recapitalizations or similar transactions and (z) issuances by the Company of capital stock of the Company or options, warrants or other rights to acquire capital stock of the Company to any director, as compensation for his or her membership on the Board.
Termination
The Investor Rights Agreement will terminate in the event that the Investor Amount ceases to be equal to or greater than 10%.
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DESCRIPTION OF PREFERRED STOCK
The following is a summary of the material terms of the preferences, limitations, voting powers and relative rights of the Series A Preferred Stock and Series B Preferred Stock as contained in the Certificate of Designations. While we believe that this summary covers the material terms and provisions of the Preferred Stock, we encourage you to read the Certificate of Designations, which is included as Exhibit 3.1 to the Current Report on Form 8-K filed by the Company on May 26, 2017, and is incorporated by reference herein. For more information about accessing the Current Report on Form 8-K and the other information we file with the SEC, please see “Where You Can Find More Information” below.
Series A Preferred Stock
Ranking
With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Company, the Series A Preferred Stock ranks (i) senior to the common stock and all other common stock equivalents of the Company that do not expressly rank on parity with or senior to the Series A Preferred Stock, (ii) on parity with any class or series of capital stock of the Company created after the Closing that expressly ranks on parity with the Series A Preferred Stock, and (iii) junior to any class or series of capital stock of the Company created after the Closing that expressly ranks senior to the Series A Preferred Stock.
Dividend Rights
Each holder of the Series A Preferred Stock is entitled to receive dividends accruing on a daily basis, with respect to each share or fraction of a share, beginning on the date of issuance of the share, at a rate of 9% per annum of the Stated Value of the whole share (the “Preferred Dividend”). The initial “Stated Value” is $1,000 per share plus the sum of any Preferred Dividends paid in the form of an increase in Stated Value of the share, plus the sum of all accumulated and unpaid dividends. The Preferred Dividend will be paid, at the Company’s election, in cash or in the form of an increase in the Stated Value of the Series A Preferred Stock,provided, that until stockholder approval is obtained, any non-cash dividends must be paid in an increase in the Stated Value of the Series B Preferred Stock and shall not result in an increase in the Stated Value of the Series A Preferred Stock.
In addition to the Preferred Dividends, holders of the Series A Preferred Stock are entitled to participate in common stock dividends. Inattend the event that the Company pays a dividend or makes a distribution in respect of the common stock, the Company simultaneously will declare a dividend (or distribution) on each share of Series A Preferred Stock equal to the dividend that would have been payable to the holder of the Series A Preferred Stock if the shares of Series A Preferred Stock had been converted into common stock on the date of determination of holders of common stock entitled to receiveAnnual Meeting. Each stockholder must present valid picture identification such dividend or distribution (the “Participating Dividend”). No dividends may be paid on shares of the Company’s capital stock that rank junior to or on parity with the Series A Preferred Stock unless all accrued but unpaid dividends are paid on the Series A Preferred Stock.
Liquidation Rights
Subject to the satisfaction in full of the debts of the Company, upon liquidation, dissolution or winding up of the Company, each holder of Series A Preferred Stock will be entitled to a per share amount equal to the greater of: (i) the liquidation preference (which is the greater of (A) the Stated Value plus any accrued and unpaid dividends and (B) the amount that would have been payable had all shares of the Preferred Stock been converted into common stock immediately before the liquidation) multiplied by the number of shares of Series A Preferred Stock held by the holder; and (ii) the per share amount such holder would have received had it converted its shares of Series A Preferred Stock into common stock immediately prior to such liquidation.
In the event the assets of the Company available for distribution to stockholders upon any liquidation, dissolution or winding-up of the affairs of the Company are insufficient to pay in full the liquidating distributions
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payable with respect to all outstanding shares of the Series A Preferred Stock and all other classes or series of preferred stock ranking on parity with the Series A Preferred Stock, holders of Series A Preferred Stock and holders of such other classes or series of preferred stock will share ratably in any distribution of the Company’s assets in proportion to the respective amounts to which they would otherwise be entitled upon liquidation, dissolution or winding-up of the Company.
Voting Rights
Holders of Series A Preferred Stock have the right to vote together with the holders of common stock, as a single class, on all matters which the holdersdriver’s license or passport and provide proof of common stock are entitled to vote. The holders of Series A Preferred Stock are entitled to one vote per share of common stock that would be issuable to the holder upon conversion of all shares of Series A Preferred Stock held by such holder.
The Company may not declare or pay any dividend or distribution on, or directly or indirectly purchase, redeem, repurchase or otherwise acquire or permit any subsidiary of the Company to redeem or acquire, any securities that rank junior to the Preferred Stock, other than Participating Dividends actually paid on outstanding Preferred Stock, without the consent of the majority of the holders of the then-outstanding Series A Preferred Stock.
In addition, without the approval of the holders of at least a majority of the outstanding shares of Preferred Stock, the Company may not:
authorize, create, designate, establish or issue (i) an increased number of shares of such series of Preferred Stock, or (ii) any other class or series of capital stock ranking senior to or on parity with such series of Preferred Stock as to dividends or upon liquidation;
reclassify any shares of common stock into shares having any preference or priority as to dividends or upon liquidation superior to or on parity with any such preference or priority of such series of Preferred Stock;
amend, restate, alter or repeal any of the rights, powers or preferences of such series of Preferred Stock;
amend, restate, alter or repeal the Certificate of Incorporation of the Company in a manner which would adversely affect a Preferred Stock holder’s ability to, as applicable, (i) transfer its shares of such series of Preferred Stock or common stock to any person, (ii) convert its shares of Series A Preferred Stock into common stock, or (iii) convert its shares of Series B Preferred Stock into shares of Series A Preferred Stock; or
agree to do any of the foregoing.
Redemption Rights
The Series A Preferred Stock is redeemable, in whole or in part, at the option of each holder at a per share redemption price equal to the Redemption Value (as hereinafter defined) on or after May 23, 2024, or upon the occurrence of any of the following events:
a “person” or “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than the Company, filing a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of common stock representing more than 50% of the voting securities of the Company or the Company otherwise becomes aware of such ownership;
the consummation of (a) any recapitalization, reclassification or change of the common stock as a result of which the common stock would be converted into, or exchanged for, or represent solely the
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| right to receive, cash, stock, other securities, other property or assets or (b) any share exchange, consolidation or merger of the Company pursuant to which the common stock will be converted into, or exchanged for, or represent solely the right to receive, cash, stock, other securities, other property or assets;
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a sale of all or substantially all of the Company’s assets;
the stockholders of the Company approving or the Company otherwise adopting any plan or proposal for the liquidation, dissolution or winding-up of the Company; or
the Company’s common stock ceasing to be listed on any of the NYSE, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors) or another U.S. national securities exchange.
The “Redemption Value” means the price per share of Preferred Stock equal to (a) for any redemption occurring prior to October 22, 2018, the product of the Stated Value and 1.75 and (b) for any redemption occurring on or after October 22, 2018, the greater of (x) the product of the Stated Value and 2.00 and (y) an amount equal to the number of shares of common stock such share of Preferred Stock is convertible into at the time of such redemption multiplied by the volume-weighted average price per share of common stock for each of the 30 consecutive trading days ending the trading day before the record date of the redemption.
The Company may, at its option, redeem in whole at any time all shares of Preferred Stock at the time outstanding, by delivery of written notice to each holder of Preferred Stock at least 30 days prior to the proposed redemption date, at a redemption price paid in cash for each share of Preferred Stock equal to the then-applicable Redemption Value.
Conversion
At any time after the Closing Date, each holder of Series A Preferred Stock has the right, at its option, to convert each share of the holder’s Series A Preferred Stock at any time into that number of shares of common stock determined by dividing (i) the sum of the Stated Value and any accrued and unpaid dividends by (ii) the Conversion Price (as hereinafter defined). The “Conversion Price” means $28.162, subject to certain anti-dilution adjustments as provided in the Certificate of Designations. A holder of Series A Preferred Stock may exercise this conversion right for all or any portion of the holder’s Series A Preferred Stock as long as the holder is converting at least 1,000 shares of Series A Preferred Stock or all of the shares of Series A Preferred Stock held by the holder.
Series B Preferred Stock
Ranking
With respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Company, the Series B Preferred Stock ranks (i) senior to the common stock and all other common stock equivalents of the Company that do not expressly rank on parity with or senior to the Series B Preferred Stock, (ii) on parity with any class or series of capital stock of the Company created after the Closing that expressly ranks on parity with the Series B Preferred Stock, and (iii) junior to any class or series of capital stock of the Company created after the Closing that expressly ranks senior to the Series B Preferred Stock.
Dividend Rights
Each holder of the Series B Preferred Stock is entitled to receive a Preferred Dividend, accruing on a daily basis, with respect to each share or fraction of a share, beginning on the date of issuance of the share, at a rate of 9% per annum of the Stated Value of the whole share, provided that if stockholder approval of the Equity Rights Proposal is not obtained by September 19, 2017, the Preferred Dividend applicable to the Series B Preferred
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Stock will accrue at a rate of 11% per annum. The initial “Stated Value” is $1,000 per share plus the sum of any Preferred Dividends paid in the form of an increase in Stated Value of the share, plus the sum of all accumulated and unpaid dividends. The Preferred Dividend will be paid, at the Company’s election, in cash or in the form of an increase in the Stated Value of the Series B Preferred Stock.
In addition to the Preferred Dividends, holders of the Series B Preferred Stock are entitled to participate in common stock dividends. In the event that the Company pays a dividend or makes a distribution in respect of the common stock, the Company simultaneously will declare a Participating Dividend on each share of Series B Preferred Stock equal to the dividend that would have been payable to the holder of the Series B Preferred Stock if the shares of Series B Preferred Stock had been converted to Series A Preferred Stock and, subsequently, to common stock on the date of determination of holders of common stock entitled to receive such dividend or distribution. No dividends may be paid on shares of the Company’s capital stock that rank junior to or on parity with the Series B Preferred Stock unless all accrued but unpaid dividends are paid on the Series B Preferred Stock.
Liquidation Rights
Subject to the satisfaction in full of the debts of the Company, upon liquidation, dissolution or winding up of the Company, each holder of Series B Preferred Stock will be entitled to a per share amount equal to the greater of: (i) the liquidation preference (which is the greater of (A) the Stated Value plus any accrued and unpaid dividends and (B) the amount that would have been payable had all shares of the Preferred Stock been converted into common stock immediately before the liquidation) multiplied by the number of shares of Series B Preferred Stock held by the holder; and (ii) the per share amount such holder would have received had all holders of Series B Preferred Stock converted their shares into Series A Preferred Stock and, subsequently, into common stock immediately prior to such liquidation.
In the event the assets of the Company available for distribution to stockholders upon any liquidation, dissolution or winding-up of the affairs of the Company are insufficient to pay in full the liquidating distributions payable with respect to all outstanding shares of the Series B Preferred Stock and all other classes or series of preferred stock ranking on parity with the Series B Preferred Stock, holders of Series B Preferred Stock and holders of such other classes or series of preferred stock will share ratably in any distribution of the Company’s assets in proportion to the respective amounts to which they would otherwise be entitled upon liquidation, dissolution or winding-up of the Company.
Voting Rights
Holders of Series B Preferred Stock have no voting rights, except that, without the approval of the holders of at least a majority of the outstanding shares of Preferred Stock, the Company may not:
authorize, create, designate, establish or issue (i) an increased number of shares of such series of Preferred Stock, or (ii) any other class or series of capital stock ranking senior to or on parity with such series of Preferred Stock as to dividends or upon liquidation;
reclassify any shares of common stock into shares having any preference or priority as to dividends or upon liquidation superior to or on parity with any such preference or priority of such series of Preferred Stock;
amend, restate, alter or repeal any of the rights, powers or preferences of such series of Preferred Stock;
amend, restate, alter or repeal the Certificate of Incorporation of the Company in a manner which would adversely affect a Preferred Stock holder’s ability to, as applicable, (i) transfer its shares of such series of Preferred Stock or common stock to any person, (ii) convert its shares of Series A Preferred Stock into common stock, or (iii) convert its shares of Series B Preferred Stock into shares of Series A Preferred Stock; or
agree to do any of the foregoing.
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Redemption Rights
The Series B Preferred Stock is redeemable, in whole or in part, at the option of each holder at a per share redemption price equal to the Redemption Value on or after May 23, 2024, or upon the occurrence of any of the following events:
a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, filing a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of common stock representing more than 50% of the voting securities of the Company or the Company otherwise becomes aware of such ownership;
the consummation of (a) any recapitalization, reclassification or change of the common stock as a result of which the common stock would be converted into, or exchanged for, or represent solely the right to receive, cash, stock, other securities, other property or assets or (b) any share exchange, consolidation or merger of the Company pursuant to which the common stock will be converted into, or exchanged for, or represent solely the right to receive, cash, stock, other securities, other property or assets;
a sale of all or substantially all of the Company’s assets;
the stockholders of the Company approving or the Company otherwise adopting any plan or proposal for the liquidation, dissolution or winding-up of the Company; or
the Company’s common stock ceasing to be listed on any of the NYSE, the NASDAQ Global Select Market or the NASDAQ Global Market (or any of their respective successors) or another U.S. national securities exchange.
The Company may, at its option, redeem in whole at any time all shares of Preferred Stock at the time outstanding, by delivery of written notice to each holder of Preferred Stock at least 30 days prior to the proposed redemption date, at a redemption price paid in cash for each share of Preferred Stock equal to the then-applicable Redemption Value.
Conversion
The Series B Preferred Stock is not convertible unless and until stockholder approval of the Equity Rights Proposal is obtained, at which time all outstanding shares of Series B Preferred Stock will convert, on a one-for-one basis, into shares of Series A Preferred Stock.
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PROPOSAL NO. 2 – ADJOURNMENT OR POSTPONEMENT OF THE SPECIAL MEETING
Overview
The Adjournment Proposal, if adopted, will allow the Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies. The Adjournment Proposal will only be presented to the Company’s stockholders in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Equity Rights Proposal.
Consequences if the Adjournment Proposal is Not Approved
If the Adjournment Proposal is not approved by the Company’s stockholders, the Board may not be able to adjourn the Special Meeting to a later date in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Equity Rights Proposal.
Vote Required for Approval
The approval of the Adjournment Proposal requires the affirmative vote of holders of a majority of the shares of the Company’s common stock (including the Series A Preferred Stock, on an as-converted basis) represented in person or by proxy and entitled to vote thereon at the Special Meeting. Abstentions will have the same effect as a vote “AGAINST” this proposal.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE ADJOURNMENT PROPOSAL.
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INTERESTS OF CERTAIN PERSONS
Based on the capitalization of the Companyownership as of the Record Date, the conversionDate. The use of all of the Series A Preferred Stock into shares of our common stock (including shares of Series A Preferred Stock issuable upon conversion of the outstanding Series B Preferred Stock) would result in the Investor owning approximately % of our outstanding common stock after giving effect to such conversion. TPG, as a holder of our Series A Preferred Stock,mobile phones, pagers, recording or photographic equipment, tablets and/or computers is not entitled to vote on the Equity Rights Proposal presentedpermitted at the SpecialAnnual Meeting.
What is the deadline to propose actions for consideration or to nominate individuals to serve as directors at the 2020 Annual Meeting but is permitted to vote on the Adjournment Proposal. TPG, as holder of the Series B Preferred Stock, is not entitled to vote on any of the proposals set forth in this proxy statement.
On May 22, 2017, Ransom A. Langford was appointed to our Board, effective as of the Closing, pursuant to TPG’s director nomination rights under the Investor Rights Agreement. Because Mr. Langford joined our Board prior to the consummation of the Investment, he did not participate as a director of the Company in discussions of, or vote with respect to, matters related to the Investment that were approved by our Board, including our Board vote recommending approval of the issuance of Series A Preferred Stock and Series B Preferred Stock and issuance of common stock upon conversion of the Series A Preferred Stock. No directors or officers of the Company purchased any securities in the Investment.
VOTING SECURITIES AND PRINCIPAL OWNERSHIP
The following table sets forth certain information with respect to beneficial ownership of Superior common stock as of , 2017, the Record Date, for (i) the named executive officers (ii) each director and director nominee, (iii) all directors and named executive officers as a group and (iv) all persons known to Superior to beneficially own 5% or more of Superior common stock.
| | | | | | | | |
Name and Address(1) of Beneficial Owner
| | Shares
Beneficially
Owned(1) | | | Percentage of
Total Voting
Power(1)(2) | |
5% Beneficial Stockholders:
| | | | | | | | |
TPG Groups Holdings (SBS) Advisors, Inc.(3)
| | | 4,978,411 | | | | % | |
BlackRock, Inc.(4)
| | | 2,814,025 | | | | % | |
Dimensional Fund Advisors LP(5)
| | | 2,261,130 | | | | % | |
GAMCO Asset Management, Inc.(6)
| | | 2,242,958 | | | | % | |
The Vanguard Group, Inc.(7)
| | | 2,123,988 | | | | % | |
Steven J. Borick(8)(9)
| | | 1,538,101 | | | | % | |
The Louis L. Borick Foundation(8)
| | | 1,500,100 | | | | % | |
| | |
Directors and Named Executive Officers:
| | | | | | | | |
Donald J. Stebbins(10)
| | | 314,144 | | | | * | |
Nadeem Moiz
| | | — | | | | * | |
Parveen Kakar(10)(11)
| | | 76,741 | | | | * | |
James F. Sistek(10)
| | | 18,605 | | | | * | |
Robert Tykal
| | | — | | | | * | |
Timothy C. McQuay(10)
| | | 20,946 | | | | * | |
Michael R. Bruynesteyn(10)
| | | 8,977 | | | | * | |
Jack A. Hockema(10)
| | | 24,946 | | | | * | |
Paul Humphries(10)
| | | 9,946 | | | | * | |
Ransom A. Langford
| | | — | | | | * | |
James S. McElya(10)
| | | 17,323 | | | | * | |
Ellen B. Richstone
| | | 3,031 | | | | * | |
Francisco S. Uranga(10)(11)
| | | 39,946 | | | | * | |
Superior’s Directors and Named Executive Officers as a Group (13 persons)(10)(11)
| | | 534,605 | | | | % | |
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(1) | All persons have the Company’s principal office as their address, except as otherwise indicated. Except as indicated in the footnotes to this table, and subject to applicable community property laws, the persons listed have sole voting and investment power with respect to all shares of Superior’s common stock beneficially owned by them. |
(2) | The percentage of total voting power is based on shares of common stock outstanding and 140,202 shares of Series A Preferred Stock outstanding as of , 2017. On the Record Date, the 140,202 outstanding shares of Series A Preferred Stock would have been convertible into shares of common stock. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days after , 2017 are deemed to be outstanding and beneficially owned by the person holding such options for the purpose of computing the number of shares beneficially owned and the percentage ownership of such person, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. |
(3) | The information with respect to the holdings of TPG Group Holdings (SBS) Advisors, Inc. (“Group Advisors”), a registered investment advisor, is based solely on the Schedule 13D filed May 31, 2017 by Group Advisors, David Bonderman and James G. Coulter. Group Advisors is the sole member of TPG Group Holdings (SBS) Advisors, LLC, a Delaware limited liability company, which is the general partner of TPG Group Holdings (SBS), L.P., a Delaware limited partnership, which is the sole member of TPG Holdings I-A, LLC, a Delaware limited liability company, which is the general partner of TPG Holdings I, L.P., a Delaware limited partnership, which is the sole member of TPG Growth GenPar III Advisors, LLC, a Delaware limited liability company, which is the general partner of TPG Growth GenPar III, L.P., a Delaware limited partnership, which is the general partner of TPG Growth III Sidewall, L.P., a Delaware limited partnership (“TPG Growth Sidewall”), which directly holds 140,202 shares of Series A Preferred Stock and 9,798 shares of Series B Preferred Stock. David Bonderman is the President of Group Advisors and officer, director and/or manager of other affiliated entities. James G. Coulter is the Senior Vice President of Group Advisors and officer, director and/or manager of other affiliated entities. Group Advisors’ address is TPG Global, LLC, 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. |
(4) | The information with respect to the holdings of BlackRock, Inc. (“BlackRock”), a registered investment advisor, is based solely on the Schedule 13G/A filed January 17, 2017 by BlackRock. By virtue of being the parent holding company of the holders of such shares, BlackRock has sole voting power with respect to 2,755,722 shares and sole dispositive power with respect to all 2,814,025 shares. BlackRock’s address is 55 East 52nd Street, New York, New York 10022. |
(5) | The information with respect to the holdings of Dimensional Fund Advisors LP (“Dimensional Fund”), a registered investment advisor, is based solely on the Schedule 13G/A filed February 9, 2017 by Dimensional Fund. Dimensional Fund serves as investment advisor to four registered investment companies and as investment manager to certain other commingled group trusts and separate accounts (collectively, the “Funds”), which own all shares. The Funds have sole voting power with respect to 2,185,465 shares owned by the Funds and sole dispositive power with respect to all 2,261,130 shares owned by the Funds. The address for the Dimensional Fund is Palisades West, Building one, Austin, Texas 78746. |
(6) | The information with respect to the holdings of GAMCO Asset Management Inc. (“GAMCO”), a registered investment advisor, is based solely on the Schedule 13D Amendment No. 39 filed January 24, 2017 by Gabelli Funds, LLC (“Gabelli Funds”), GAMCO, Teton Advisors, Inc. (“Teton Advisors”), GGCP, Inc. (“GGCP”), GAMCO Investors, Inc. (“GBL”), Associated Capital Group, Inc. (“AC”) and Mario G. Gabelli (“Mario Gabelli”). Subject to certain restrictions, (i) GAMCO holds 1,208,075 shares and has sole voting power with respect to 1,117,075 shares; (ii) Gabelli Funds holds 543,000 shares and has sole voting and dispositive power with respect to such shares; (iii) Teton Advisors holds 483,883 shares and has sole voting and dispositive power with respect to such shares; and (iv) AC holds 8,000 shares and has sole voting and dispositive power with respect to such shares. None of GGCP, GBL or Mario Gabelli directly hold or have voting or dispositive power over any shares. Each of Gabelli Funds and GAMCO is wholly-owned subsidiary of GBL. Mario Gabelli is (i) the controlling stockholder, chief executive officer, chief investment officer and a director of GGCP, (ii) chairman and executive officer of GBL, (iii) chief investment officers of
|
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| Gabelli Funds and (iv) controlling stockholder of Teton. The address for these holders is One Corporate Center, Rye, New York 10580-1435. |
(7) | The information with respect to the holdings of The Vanguard Group, Inc. (“Vanguard”), a registered investment advisor, is based on the Schedule 13G/A filed February 10, 2017 by Vanguard. The aggregate amount beneficially owned by Vanguard is 2,123,988 shares. Of such shares, Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 28,160 shares by virtue of its serving as investment manager of certain collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 3,046 shares by virtue of its serving as investment manager of Australian investment offerings. Vanguard has sole voting power with respect to 29,488 shares, sole dispositive power with respect to 2,094,110 shares and shared dispositive power with respect to 29,878 shares. The address for Vanguard is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. |
(8) | The information with respect to the share ownership of Steven J. Borick and The Louis L. Borick Foundation (the “Foundation”), of which Mr. Borick is the President, is based solely on the Schedule 13D/A, Amendment No. 12 filed on February 13, 2017. The Foundation and Mr. Borick share voting and dispositive power over 1,500,100 shares of common stock. The address for Mr. Borick and the Foundation is 2707 Kipling Street, Houston, Texas 77098. |
(9) | In addition to the 1,500,100 shares of common stock over which Mr. Borick shares voting and dispositive power over with the Foundation, this number also includes 100 shares of common stock and 8,000 shares held by Blake Mills David Trust, of which Mr. Borick is the sole trustee and 40,000 shares held by Liatis Foundation, of which Mr. Borick is the President and member of the board. |
(10) | Includes restricted stock units, subject to solely time-based vesting requirements, (“RSUs”) in the amount of 112,306 unvested RSUs for Mr. Stebbins, 11,185 unvested RSUs for each of Messrs. Kakar and Sistek and 3,031 unvested RSUs for each of Messrs. Bruynesteyn, Hockema, Humphries, McElya, McQuay and Uranga and Ms. Richstone. These RSUs are subject to all of the economic risks of stock ownership but may not be voted or sold and are subject to vesting provisions as set forth in the respective grant agreements. |
(11) | Includes stock options in the amount of 48,500 for Mr. Kakar and 20,000 for Mr. Uranga that are currently or will become exercisable within 60 days of , 2017. |
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STOCKHOLDERS’ PROPOSALS AND NOMINATIONS OF BOARD MEMBERSstockholders?
Requirements for Stockholder Proposals to Be Considered for Inclusion in Superior’s Proxy Materials. Proposals that a stockholder intends to present at the 20182020 Annual Meeting of stockholders and wishes to be considered for inclusion in Superior’s proxy statement and form of proxy relating to the 20182020 Annual Meeting of stockholders must be received no later than November 16, 20179, 2019 (the date that is 120 calendar days before the one yearone-year anniversary date of when Superior’s proxy statement was released to stockholders for the 2017this Annual Meeting). However, if the 20182020 Annual Meeting date has changed more than 30 days from the 2017 Annual Meeting date,this year’s meeting, then the deadline is a reasonable time before we begin to print and send out proxy materials. All proposals must comply with Rule14a-8 under the Exchange Act, which lists the requirements for the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals must be delivered to Superior’s Corporate Secretary by mail at 26600 Telegraph Rd., Suite 400, Southfield, MI 48033.
Requirements for Other Stockholder Proposals to Be Brought Before the 20182020 Annual Meeting of Stockholders and Director Nominations. Our Amended and Restated Bylaws (the “Bylaws”) provide that any stockholder proposals (other than those made under Rule14a-8 of the Exchange Act) and any nomination of one or more persons for election as a director be made not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to theone-year anniversary of the date of the preceding year’s annual
2019 Proxy Statement | 63
