Business Context and Reporting Period
Company: Cooper-Standard Holdings Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 7, 2022
Primary Event: Adoption of a Section 382 Rights Plan (poison pill) and related corporate governance amendments.
Key Financial Metrics
This filing is a current report regarding corporate governance and does not contain financial performance data. The text does not provide values for revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes and Corporate Actions
- Adoption of Rights Plan: The Board adopted a Section 382 Rights Agreement to protect the Company's Net Operating Losses (NOLs) and other tax attributes ("Tax Benefits") from being limited by an "ownership change" under Section 382 of the Internal Revenue Code.
- Dividend Declaration: Declared a dividend of one Right for each outstanding share of Common Stock to stockholders of record as of November 17, 2022.
- Trigger Threshold: The plan is designed to deter any person from acquiring 4.9% or more of the outstanding Common Stock without Board approval. Stockholders owning 4.9% or more as of the agreement date are exempt.
- Preferred Stock Elimination: Filed a Certificate of Elimination to remove the 7% cumulative participating convertible preferred stock from the Certificate of Incorporation, as no shares of this series are outstanding.
- New Preferred Stock Series: Filed a Certificate of Designation for Series A Junior Participating Preferred Stock, which serves as the underlying security for the Rights.
Terms of the Rights Plan and Outlook
- Exercise Price: $50.00 per Right (subject to adjustment).
- Exercisability: Rights become exercisable upon the earlier of 10 days after an "acquiring person" is publicly announced or 10 business days after a tender offer begins that would result in an acquiring person.
- Flip-In Provision: If triggered, holders (excluding the acquirer) may purchase Common Stock with a market value of two times the purchase price.
- Flip-Over Provision: If a merger occurs after a flip-in event, holders may purchase shares of the acquiring corporation with a market value of two times the purchase price.
- Expiration: The Rights will expire on November 6, 2025, unless earlier redeemed, exchanged, or terminated by the Board if Tax Benefits are fully utilized or no longer at risk.
- Redemption: The Board may redeem all Rights for $0.001 per Right at any time before the distribution date or the first public announcement of an acquiring person.
Investor Verification Checklist
- Verify the total amount of Net Operating Losses (NOLs) and tax attributes the Company intends to protect.
- Confirm the list of stockholders who beneficially own 4.9% or more of the Common Stock as of November 7, 2022, to determine who is exempt from the "acquiring person" definition.
- Review the full text of the Section 382 Rights Agreement (Exhibit 4.1) for specific adjustment mechanisms and anti-dilution provisions.
- Monitor future filings for the redemption of the Rights or the expiration of the plan if the Board determines the Tax Benefits are no longer at risk.