Attached files
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| EX-10.2 - IRREVOCABLE PROXY - AutoWeb, Inc. | ex10-2.htm |
| EX-10.1 - TAX BENEFIT PRESERVATION PLAN EXEMPTION AGREEMENT - AutoWeb, Inc. | ex10-1.htm |
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 15,
2017
AutoWeb, Inc.
(Exact name of registrant as specified in its charter)
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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,
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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).
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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 15, 2017, AutoWeb, Inc., a Delaware corporation
(“AutoWeb”
or “Company”) entered into a Tax
Benefit Preservation Plan Exemption Agreement (“Exemption Agreement”) with Piton
Capital Partners LLC, a Delaware limited liability company
(“Piton”).
Tax Benefit Preservation Plan
As
previously reported, effective as of May 26, 2010, the Company
adopted a Tax Benefit Preservation Plan, which 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 (collectively, 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 carry-forwards
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 Piton Exemption Agreement
Piton
informed the Company that as of November 15, 2017, Piton, together
with all of its Affiliates and Associates, Beneficially Owned
625,000 shares of Common Stock,
or approximately 4.8% of the Company’s outstanding
Common Stock, as of that date (“Current Holdings”). Piton also
informed the Company that if permitted to do so under the Plan,
Piton would be interested in acquiring additional shares of Common
Stock in excess of the Current Holdings. Piton requested that the
Board consider exercising its discretionary authority under the
Plan to deem Piton and its Affiliates not to be an Acquiring Person
and to grant a Plan Exemption for Piton and its Affiliates to
acquire Beneficial Ownership of additional shares of Common Stock
in excess of the Current Holdings.
The
Board considered Piton’s 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 Piton, any other Stockholders (as defined
below) that may become a party to this Agreement in accordance with
the terms hereof and their respective Affiliates and Associates
does not collectively exceed 7.5% of the Company’s
outstanding shares of Common Stock at the time of the acquisition
of Beneficial Ownership of the additional shares of Common Stock,
subject to and in reliance upon Piton and any other such
Stockholders entering into and remaining in compliance with the
terms and conditions set forth in the Exemption
Agreement.
Under
the Exemption Agreement, Piton and any other stockholder that may
become a party to the Exemption Agreement pursuant to the terms
thereof (collectively, “Stockholders”) 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 Stockholders shall (i) appear at the meeting or otherwise cause
any and all of the portion of Shares (as defined in the Exemption
Agreement) that equals or exceeds 4.9% of the shares of Common
Stock then outstanding (“Excess Shares”) to be counted as
present thereat for purposes of establishing a quorum; (ii) vote
(or cause to be voted) any and all Excess Shares in accordance with
the recommendations of, or instructions provided by, the Board; and
(iii) granted representatives of the Company irrevocable proxies
(“Irrevocable
Proxies”) to vote the Excess Shares in accordance with
such instructions. The Stockholders 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 Stockholders 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 Stockholders in compliance with Section 3.2 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 Exchange Act) 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;
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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;
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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 Stockholders as a group to acquire
Beneficial Ownership of additional shares of Common Stock
(“Additional
Shares”) as long as (i) the collective Beneficial
Ownership of the Stockholders and their respective Affiliates and
Associates does not exceed 7.5% of the Company’s outstanding
shares of Common Stock at the time of the acquisition of Beneficial
Ownership of the Additional Shares; (ii) the Stockholders are in
compliance with all of the provisions of this Agreement as of the
acquisition date of any Additional Shares; (iii) the
representations and warranties of the Stockholders in the Exemption
Agreement shall be true, accurate and complete as if made as of the
date of any such acquisition of Additional Shares; and (iv) the
acquisition of Additional Shares would not result in any Person who
is not a Stockholder or any Affiliate or Associate of a
Stockholder, individually or collectively, constituting a 5%
shareholder under Section 382.
During
the term of the Exemption Agreement, (i) no direct or indirect
transfers of shares of Common Stock between and among Stockholders
shall be permitted if, as a result of any such transfer, any
Stockholder (other than Piton) shall become the Beneficial Owner of
shares of Common Stock in an amount that would result in such
Stockholder constituting a 5% shareholder under Section 382; and
(ii) no Stockholder will sell or otherwise transfer any Beneficial
Ownership in any shares of Common Stock to any person not a party
to the Exemption Agreement except (1) in open market transactions
on The Nasdaq Capital Market or on such principal stock exchange as
the Common Stock is then listed for trading; or if the Common Stock
is not listed on any stock exchange at the time, then in
transactions effected through trading on an inter-dealer quotation
system if the Common Stock is then quoted on such a system, and if
not, then through trading on over-the-counter bulletin boards or
“pink sheets”; or (2) in private transactions and only
if any such private transaction is not to any Person or Group that
the Stockholder reasonably believes after due inquiry Beneficially
Owns or as a result of such transaction would Beneficially Own 4.9%
or more of the Company’s then outstanding Common
Stock.
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 Piton and the other Stockholders 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 upon the delivery to the Company of
a certification executed by an authorized officer of Piton and of
each of the other Stockholders (which certification may be provided
by an authorized officer of Piton’s trading manager, Kokino
LLC (“Kokino”)),
certifying that Piton and the other Stockholders (together with
their respective Affiliates and Associates) collectively
Beneficially Own less than 4.9% of the then-outstanding shares of
Common Stock; and (iv) automatically if Kokino or its successor (if
any) ceases to be a “family office” (as defined in SEC Rule 202(a)(11)(G)-1
(“Family Office
Rule”) for the
“family clients” (as
defined in the Family Office Rule) disclosed to Company prior to
entering into the Exemption Agreement.
The
foregoing description of the Exemption Agreement and Irrevocable
Proxy 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 Proxy, which are filed with this Current Report
on Form 8-K as Exhibits 10.1 and 10.2, respectively, and
incorporated herein by reference.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
Exhibits
Tax Benefit
Preservation Plan Exemption Agreement dated as of November 15, 2017
by and between AutoWeb, Inc. and Piton Capital Partners
LLC.
Irrevocable Proxy
dated as of November 15, 2017 by Piton Capital Partners
LLC.
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 16, 2017
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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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