| Item 1.01 | Entry into a Material Definitive Agreement. |
On August 19, 2021, Under Armour, Inc. (the “Company”) entered into, with each of JPMorgan Chase Bank, National Association, Citibank, N.A. and HSBC Bank USA, National Association, termination agreements (the “Termination Agreements” and each, a “Termination Agreement”) relating to a portion of the capped call transactions that were previously entered into by the Company in connection with the issuance of its 1.50% Convertible Senior Notes due 2024 (the “2024 Notes”). Such Termination Agreements relate to a number of options corresponding to the number of 2024 Notes subject to exchange pursuant to the Exchange Agreements described below. Pursuant to such Termination Agreements, each of JPMorgan Chase Bank, National Association, Citibank, N.A. and HSBC Bank USA, National Association will pay the Company a cash settlement amount in respect of the portion of capped call transactions being terminated, which cash settlement amounts will be determined based upon the volume-weighted average price per share of the Company’s Class C common stock during an averaging period, commencing on August 23, 2021.
The foregoing description of the Termination Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Termination Agreements, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
| Item 1.02 | Termination of a Material Definitive Agreement. |
The information set forth in Item 1.01 is incorporated by reference into this Item 1.02.
| Item 3.02 | Unregistered Sales of Equity Securities. |
On August 19, 2021, the Company entered into exchange agreements (the “Exchange Agreements” and each, an “Exchange Agreement”) with certain holders (the “Noteholders”) of the 2024 Notes. The Noteholders have agreed to exchange approximately $169.1 million in aggregate principal amount of the Company’s outstanding 2024 Notes for cash and shares of the Company’s Class C common stock, plus payment for accrued and unpaid interest. The number of shares of Class C common stock to be issued by the Company to the Noteholders will be determined based upon a volume-weighted average price per share of Class C common stock during an averaging period, commencing on August 23, 2021.
The Company’s shares of Class C common stock to be issued in connection with the exchange will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be issued in reliance on the exemption from the registration requirements thereof provided by Section 4(a)(2) of the Securities Act in a transaction by an issuer not involving a public offering.
The 2024 Notes to be exchanged represent approximately 68% of the outstanding principal amount, with approximately $80.9 million in aggregate principal amount remaining outstanding following the exchange. The Company’s annual interest payments will be reduced by approximately $2.5 million.
The foregoing description of the Exchange Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the form of Exchange Agreements, a copy of which is filed with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On August 19, 2021, the Company issued a press release relating to the transactions contemplated by the Exchange Agreements and the Termination Agreements, a copy of which is filed with this Current Report on Form 8-K as Exhibit 99.2.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
