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PSUN > SEC Filings for PSUN > Form 8-K/A on 8-Dec-2011All Recent SEC Filings

Show all filings for PACIFIC SUNWEAR OF CALIFORNIA INC | Request a Trial to NEW EDGAR Online Pro

Form 8-K/A for PACIFIC SUNWEAR OF CALIFORNIA INC


8-Dec-2011

Entry into a Material Definitive Agreement, Termination of a


Item 1.01. Entry into a Material Definitive Agreement.

Senior Secured Revolving Credit Facility

On December 7, 2011, Pacific Sunwear of California, Inc. (the "Company") entered into a credit facility with Wells Fargo Bank, N.A., as Administrative Agent, and a syndicate of lenders (the "New Revolving Credit Facility"). The New Revolving Credit Facility provides for a secured revolving line of credit of up to $100 million. Extensions of credit under the New Revolving Credit Facility are also limited to a borrowing base consisting of specified percentages of eligible categories of assets. The New Revolving Credit Facility is available for direct borrowing and, subject to borrowing base availability, up to $100 million of the New Revolving Credit Facility also is available for the issuance of letters of credit and up to $12.5 million is available for swing line loans. The New Revolving Credit Facility is scheduled to mature on December 7, 2016.

The New Revolving Credit Facility is guaranteed by each of the Company's direct subsidiaries and will be guaranteed by any future domestic subsidiaries of the Company. The New Revolving Credit Facility is secured by liens and security interests with (a) first priority in the current and certain related assets of the Company and certain subsidiary guarantors including accounts, inventory, cash, cash equivalents, deposit accounts, securities accounts, credit card receivables, and books, records and documents related thereto and the proceeds of all the foregoing and (b) second priority in all assets and properties of the Company and certain of the subsidiary guarantors not constituting priority collateral under the New Revolving Credit Facility as determined by the terms of an intercreditor agreement, dated December 7, 2011 ("Revolving Priority Collateral"). The Security Agreement and Guarantees, dated as of December 7, 2011, are filed as Exhibits 10.2 and 10.3 hereto and incorporated herein by reference.

The New Revolving Credit Facility replaces a $150 million secured Credit Agreement, dated as of April 29, 2008, by and between the Company and JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A., as Syndication Agent, Branch Banking & Trust Company, U.S. Bank National Association and Wells Fargo Retail Finance LLC, as Co-Documentation Agents, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as Joint Bookrunners and Joint Lead Arrangers, and a syndicate of other lenders, and a syndicate of other lenders (the "Prior Revolving Credit Facility") (as filed as an exhibit to the Company's Current Report on Form 8-K on April 29, 2008). The Prior Revolving Credit Facility, which was scheduled to mature on April 29, 2013, was terminated concurrently with the execution of the New Revolving Credit Facility, except for those reimbursement and indemnity provisions in the Prior Credit Facility which by their terms expressly survive the repayment of the Company's obligations thereunder. Borrowings under the New Revolving Credit Facility bear interest at a floating rate which, at the Company's option, may be determined by reference to a LIBOR Rate or a Base Rate (as those terms are defined in the New Revolving Credit Facility). The New Revolving Credit Facility has a letter of credit subfacility and Letters of Credit also bear interest at the Applicable Margin plus a letter of credit fee, depending on the whether the letter of credit is a Commercial or a Standby

. . .



Item 1.02 Termination of a Material Definitive Agreement

The information about the Prior Revolving Credit Facility set forth in Item 1.01 under the heading "Senior Secured Revolving Credit Facility," is incorporated by reference into this Item 1.02.



Item 2.02 Results of Operations and Financial Condition

On December 7, 2011, the Company announced financial results for the third quarter of fiscal year 2011 ended October 30, 2011. A copy of the press release is attached as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.




Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information about the New Revolving Credit Facility set forth in Item 1.01 under the heading "Senior Secured Revolving Credit Facility" and about the Term Loan Agreement set forth in Item 1.01 under the heading "Term Loan Credit Agreement and Stock Purchase and Investors Rights Agreement", are incorporated by reference into this Item 2.03.



Item 3.02 Unregistered Sales of Equity Securities.

The information about the Series B Preferred set forth in Item 1.01 under the heading "Term Loan Credit Agreement and Stock Purchase and Investor Rights Agreement" is incorporated by reference into this Item 3.02. The issuance and sale of the Series B Preferred were conducted in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"). Neither the Series B Preferred nor the underlying common stock of the Company issuable upon conversion of the Series B Preferred have been registered under the Securities Act and neither may be offered or sold in the United States absent registration or an applicable exemption from registration requirements.



Item 3.03 Material Modification to Rights of Security Holders.

On December 5, 2011 the Board of Directors of the Company approved the declaration of a dividend of one right (a "Right"), payable upon certification by the NASDAQ Global Select Market (the "NASDAQ") to the Securities and Exchange Commission that the Rights have been approved for listing and registration, for each outstanding Common Share, par value $0.01 per share, of the Company held of record at the close of business on December 12, 2011, (the "Record Time"), or issued thereafter and prior to the Separation Time (as hereinafter defined) and thereafter pursuant to options and convertible securities outstanding at the Separation Time subject to the issuance of a Shareholder Protection Rights Agreement. The Rights will be issued pursuant to a Shareholder Protection Rights Agreement, dated as of December 7, 2011, (the "Rights Agreement"), between the Company and Computershare Limited, as Rights Agent (the "Rights Agent"). Each Right entitles its registered holder to purchase from the Company, after the Separation Time, one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share ("Participating Preferred Stock"), for $4.50 (the "Exercise Price"), subject to adjustment.

The Rights will be evidenced by the Common Share certificates until the close of business on the earlier of (either, the "Separation Time") (i) the tenth business day (or such later date as the Board of Directors of the Company may from time to time fix by resolution adopted prior to the Separation Time that would otherwise have occurred) after the date on which any Person (as defined in the Rights Agreement) commences a tender or exchange offer which, if consummated, would result in such Person's becoming an Acquiring Person, as defined below, and (ii) the time of the first event causing a Flip-in Date (as defined below) to occur; provided that if the foregoing


results in the Separation Time being prior to the Record Time, the Separation Time shall be the Record Time; and provided further that if a tender or exchange offer referred to in clause (i) is cancelled, terminated or otherwise withdrawn prior to the Separation Time without the purchase of any shares of stock pursuant thereto, such offer shall be deemed never to have been made. A Flip-in Date will occur on any Stock Acquisition Date (as defined below) or such later date and time as the Board of Directors of the Company may from time to time fix by resolution adopted prior to the Flip-in Date that would otherwise have occurred. A Stock Acquisition Date means the earlier of (a) the first date on which the Company announces that a person or group has become an Acquiring Person (as such term is defined in the Rights Agreement) or (b) the date and time on which any Acquiring Person has acquired more than 40% of the Company's Common Shares (in either case, the "Stock Acquisition Date"). An Acquiring Person is any Person having Beneficial Ownership (as defined in the Rights Agreement) of 15% or more of the outstanding Common Shares, which term shall not include (i) the Company, any wholly-owned subsidiary of the Company or any employee stock ownership or other employee benefit plan of the Company, (ii) any person who is the Beneficial Owner of 15% or more of the outstanding Common Shares as of the time of the first public announcement of the Rights Agreement or who shall become the Beneficial Owner of 15% or more of the outstanding Common Shares solely as a result of (A) an acquisition of Common Shares by the Company, (B) the issuance and sale of shares of the Company's Series B Preferred pursuant to the Stock Purchase Agreement, as well as the issuance of any Common Shares upon conversion of such shares of the Series B Preferred or (C) the exercise or exchange of Rights held by such Person following the occurrence of a Flip-in Date which has not resulted from the acquisition of Beneficial Ownership of Common Shares by such Person or any of such Person's Affiliates or Associates, until such time as such Person acquires additional Common Shares, other than through a dividend, stock split or reclassification, that, in the aggregate amount to 0. 1% or more of the outstanding Common Shares, (iii) any Person who becomes the Beneficial Owner of 15% or more of the outstanding Common Shares without any plan or intent to seek or affect control of the Company if such Person promptly divests sufficient securities such that such 15% or greater Beneficial Ownership ceases or (iv) any Person who Beneficially Owns Common Shares consisting solely of (A) shares acquired pursuant to the grant or exercise of an option granted by the Company in connection with an agreement to merge with, or acquire, the Company entered into prior to a Flip-in Date, (B) shares owned by such Person and its Affiliates and Associates at the time of such grant and (C) shares, amounting to less than 1% of the outstanding Common Shares, acquired by Affiliates and Associates of such Person after the time of such grant. The Rights Agreement provides that, until the Separation Time, the Rights will be transferred with and only with the Common Shares. Common Share certificates issued after the Record Time but prior to the Separation Time shall evidence one Right for each Common Share represented thereby and shall contain a legend incorporating by reference the terms of the Rights Agreement (as such may be amended from time to time). Notwithstanding the absence of the aforementioned legend, certificates evidencing Common Shares outstanding at the Record Time shall also evidence one Right for each Common Share evidenced thereby. Promptly following the Separation Time, separate certificates evidencing the Rights ("Rights Certificates") will be delivered to holders of record of Common Shares at the Separation Time.


The Rights will not be exercisable until the Business Day (as defined in the Rights Agreement) following the Separation Time. The Rights will expire on the earliest of (i) the Exchange Time (as defined below), (ii) the close of business on December 7, 2014, (iii) the date on which the Rights are redeemed as described below, and (iv) upon the merger of the Company into another corporation pursuant to an agreement entered into prior to a Stock Acquisition Date (in any such case, the "Expiration Time").

The Exercise Price and the number of Rights outstanding, or in certain circumstances the securities purchasable upon exercise of the Rights, are subject to adjustment from time to time to prevent dilution in the event of a Common Share dividend on, or a subdivision or a combination into a smaller number of, Common Shares, or the issuance or distribution of any securities or assets in respect of, in lieu of or in exchange for Common Shares.

In the event that prior to the Expiration Time a Flip-in Date occurs, the Company shall take such action as shall be necessary to ensure and provide, to the extent permitted by applicable law, that each Right (other than Rights Beneficially Owned by the Acquiring Person or any affiliate or associate thereof, which Rights shall become void) shall constitute the right to purchase from the Company, upon the exercise thereof in accordance with the terms of the Rights Agreement, that number of Common Shares of the Company having an . . .



Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 5, 2011, the Company's Board of Directors approved the appointment of Joshua Olshansky and Neale Attenborough to the Board, effective upon the closing of the transactions discussed above in Item 1.01 under the subheading "Term Loan Credit Agreement and Stock Purchase and Investors Rights Agreement." Mr. Olshansky was designated as a Class I director of the Board, and Mr. Attenborough was designated as a Class III director of the Board. Each will stand for re-election to the Board at the Company's 2012 Annual Meeting of Shareholders.


Joshua Olshansky, Age 41

Mr. Olshansky is a Managing Director of Golden Gate Capital which he joined in 2002 and where he focuses on the retail, restaurant and consumer products sectors. Prior to joining Golden Gate, Mr. Olshansky held positions at Bain Capital, Bain & Company, Ventro Corporation and Rightorder Inc. Mr. Olshansky serves on the boards of directors of Express, Inc., Zale Corporation, J.Jill, Eddie Bauer, California Pizza Kitchen, Romano's Macaroni Grill and On the Border Mexican Grill & Cantina. He has an M.B.A. from Harvard Business School and a B.A. from The University of Pennsylvania.

Through his experience, Mr. Olshansky will provide the Board with valuable knowledge and experience in finance and capital structure, strategic planning and leadership of complex organizations, consumer brand strategy and marketing, and board of directors practices of other major companies, including specialty retail companies.

Neale Attenborough, Age 51

Mr. Attenborough is an Operating Partner of Golden Gate Capital, which he joined in 2011 and where he focuses on the retail and consumer products sectors. Prior to joining Golden Gate, Mr. Attenborough was the Chairman and Chief Executive Officer of Orchard Brands. Mr. Attenborough serves on the boards of directors of Zale Corporation, Eddie Bauer, J.Jill, Romano's Macaroni Grill, On the Border Mexican Grill & Cantina, White Flower Farms, and Questech Metals. He has an M.B.A. from Harvard Business School and a B.A. from The University of Michigan.

Mr. Attenborough will provide the Board with valuable knowledge and experience in strategic planning and leadership of complex organizations, consumer brand strategy and marketing, and board of directors practices of other major companies, including retail companies.

Mr. Olshansky and Mr. Attenborough will receive no compensation, retainers or meeting fees for their services as Board members. The Company will provide the same reimbursement of expenses incurred by each appointee as are provided to other non-employee directors on the Board.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

3.4 Certificate of Determination of Preferences of Convertible Series B Preferred Stock of the Company.

4.1 Shareholder Protection Rights Agreement, which includes as Exhibit A the forms of Rights Certificate and Election to Exercise and as Exhibit B the Certificate of Determination of Preferences of Series A Junior Participating Preferred Stock.

10.1 $100,000,000 Credit Agreement, dated as of December 7, 2011, among the Company and Wells Fargo Bank, N.A., as Administrative Agent, Collateral Agent, and Swing Line Lender, and Wells Fargo Capital Finance, LLC., as Syndication Agent, Documentation Agent, Sole Lead Arranger and Sole Bookrunner, and between Pacific Sunwear Stores Corp. and Wells Fargo Bank N.A.



10.2 Guaranty, dated as of December 7, 2011, between Miraloma Borrower Corp.
and Wells Fargo Bank N.A.

10.3 Security Agreement, dated as of December 7, 2011, among the Company, Pacific Sunwear Stores Corp. and Wells Fargo Bank, N.A.

10.4 $60,000,000 Credit Agreement, dated as of December 7, 2011, among the Company and certain subsidiaries of the Company, as guarantors, and PS Holdings Agency Corp., as Administrative Agent, and the other lenders party thereto.

10.5 Facility Guaranty, dated as of December 7, 2011, between Pacific Sunwear Stores Corp. and PS Holdings Agency Corp.

10.6 Unsecured Guaranty, dated as of December 7, 2011, between Miraloma Borrower Corporation and PS Holdings Agency Corp.

10.7 Security Agreement, dated as of December 7, 2011, among the Company and certain subsidiaries of the Company and PS Holdings Agency Corp.

10.8 Stock Purchase and Investors Rights Agreement, dated as of December 7, 2011, between the Company and PS Holdings of Delaware, LLC -Series A.

10.9 Registration Rights Agreement, dated as of December 7, 2011, between the Company and PS Holdings of Delaware, LLC - Series A.

99.1 Press Release, dated December 7, 2011, issued by the Company.


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