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) August 19, 1999
AUTHENTIC FITNESS CORPORATION
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(Exact name of Registrant as Specified in its Charter)
Delaware 1-11202 95-4268251
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) Number)
6040 Bandini Blvd.
Commerce, California 90040
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(Address of principal executive offices) (Zip Code)
(323) 726-1262
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events.
On August 19, 1999, the Board of Directors of Authentic
Fitness Corporation (the "Company") declared a dividend distribution of one
Right for each outstanding share of Common Stock of the Company to
stockholders of record at the close of business on August 31, 1999. Each
Right entitles the registered holder to purchase from the Company a unit (a
"Unit") consisting of one one-thousandth of a Series A Junior Participating
Preferred Stock, par value $.01 per share (the "Preferred Stock") at a
Purchase Price of $75.00 per Unit, subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and The Bank of New York, as Rights Agent.
Capitalized words used but not otherwise defined shall have the meaning
ascribed to them in the Rights Agreement.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common
Stock and a Distribution Date will occur upon the earlier of (i) ten (10)
business days following a public announcement that a person or group of
affiliated or associated persons (other than as set forth below), has
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding Common Stock, other than as a result of repurchases
of stock by the Company or certain inadvertent actions by institutional or
certain other shareholders, or a person enters into an Acquisition
Transaction (the "Stock Acquisition Date"), or (ii) 10 business days (or
such later date as the Board shall determine) following the commencement of
a tender offer or exchange offer that would result in a person or group
beneficially owning 15% or more of such outstanding Common Stock. Until
the Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by
reference and (iii) the surrender for transfer of any certificates for
Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. With
respect to existing Company stockholders currently beneficially owning in
excess of 15% of the outstanding Common Stock of the Company, a
Distribution Date will not occur until such person acquires an additional
1% of the Company's Common Stock.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on August 31, 2009, unless earlier
redeemed or extended by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
Other than as set forth above, in the event that a person becomes
the beneficial owner of more than 15% of the then outstanding Common Stock
or enters into an Acquisition Transaction, each holder of a Right will
thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event
set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned
by any Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above until
such time as the Rights are no longer redeemable by the Company as set
forth below.
For example, at an exercise price of $100.00 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $200.00 worth of Common Stock (or other consideration,
as noted above) for $100.00. Assuming that the Common Stock had a per
share value of $20.00 at such time, the holder of each valid Right would be
entitled to purchase 10 shares of Common Stock for $100.00.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, or (ii)
50% or more of the Company's assets, cash flow or earning power is sold or
transferred, each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right to receive,
upon exercise, common stock of the acquiring company having a value equal
to two times the exercise price of the Right. The events set forth in this
paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time until ten (10) business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in
part, at a price of $.0l per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately
upon the action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the $.0l redemption price. The foregoing
notwithstanding, the rights generally may not be redeemed for one hundred
eighty (180) days following a change in a majority of the Board as a result
of a proxy contest unless certain prescribed procedures designed to
establish the entire fairness of the redemption are followed.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights will not be taxable to stockholders or to the
Company, shareholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may be
amended by the Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights or to shorten or
lengthen any time period under the Rights Agreement; provided, however,
that no amendment may be made at such time as the Rights are not
redeemable.
The Rights Agreement, dated as of August 19, 1999, between the
Company and The Bank of New York, as Rights Agent, specifying the terms of
the Rights is attached hereto as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is qualified in its
entirety by reference to such exhibit.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
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4 Rights Agreement, dated as of August 19, 1999, between
Authentic Fitness Corporation and The Bank of New York,
which includes as Exhibit B thereto, the Form of Rights
Certificate.
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.
AUTHENTIC FITNESS CORPORATION
(Registrant)
BY: /s/ Stanley P. Silverstein
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Name: Stanley P. Silverstein
Title: General Counsel
Dated: August 19, 1999
INDEX TO EXHIBITS
Exhibit No. Description Page
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4 Rights Agreement, dated as of August 19, 1999, 6
between Authentic Fitness Corporation and The
Bank of New York, which includes as Exhibit B
thereto, the Form of Rights Certificate.