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| IESC > SEC Filings for IESC > Form 8-K on 28-Jan-2013 | All Recent SEC Filings |
28-Jan-2013
Entry into a Material Definitive Agreement, Material Modificat
On January 24, 2013, the Board of Directors (the "Board") of Integrated Electrical Services, Inc. (the "Company") declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock, par value $0.01 per share, of the Company (the "Common Stock"). The dividend is payable to the stockholders of record as of the close of business on February 19, 2013. Each Right represents a right to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share ("Preferred Stock"), of the Company at a price of $20.00 (as the same may be adjusted, the "Purchase Price"). The description and terms of the Rights are set forth in that certain Tax Benefit Protection Plan Agreement (as the same may be amended from time to time, the "Rights Agreement") dated as of January 28, 2013, between the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent (the "Rights Agent").
The Board adopted the Rights Agreement in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company's ability to use its net operating loss carryforwards (the "NOLs") to reduce potential future federal income tax obligations. The Company has experienced and continues to experience substantial operating losses, and under the Internal Revenue Code of 1986, as amended (the "Code"), and rules promulgated by the Internal Revenue Service, the Company may "carry forward" these losses in certain circumstances to effect any current and future earnings and thus reduce the Company's federal income tax liability, subject to certain requirements and restrictions. To the extent that the NOLs do not otherwise become limited, the Company believes that it will be able to carry forward a significant amount of NOLs, and therefore these NOLs could be a substantial asset to the Company. However, if the Company experiences an "ownership change", as defined in Section 382 of the Internal Revenue Code of 1986, its ability to use the NOLs will be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, which could therefore significantly impair the value of that asset.
Distribution Date; Acquiring Persons, Transfer of Rights.
Initially, the Rights will be attached to all Common Stock certificates (or book
entry shares) representing shares then outstanding, and no separate Right
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 4.95% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date") and (ii) ten (10) business days following the
commencement of, or the first public announcement of a person's intention to
commence, a tender offer or exchange offer that would result in a person or
group beneficially owning 4.95% or more of the outstanding shares of Common
Stock. The definition of Acquiring Person excludes any Exempt Person (as defined
below) and any person who would become an Acquiring Person solely as a result of
an Exempt Transaction (as defined below). Until the Distribution Date, (i) the
Rights will be evidenced by the Common Stock certificates (or book entry shares
in respect of the Common Stock) and will be transferred with and only with such
Common Stock certificates (or book entry shares in respect of the Common Stock),
(ii) new Common Stock certificates (or book entry shares in respect of the
Common Stock) after the Record Date will contain a notation incorporating the
Rights Agreement by reference and, with respect to any uncertificated book entry
shares issued after the Record Date, proper notice will be provided that
incorporates the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common stock (or book entry shares of Common
Stock) outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate or book entry shares.
As soon as practicable after the Distribution Date, Right Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date. Thereafter, the separate Right Certificates alone will represent the Rights. Except as otherwise determined by the Board, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.
Exempt Persons
The following persons are "Exempt Persons" as defined under the Rights Agreement:
(ii) In addition, any person who, together with its affiliates and associates,
becomes the beneficial owner of Common Stock, options and/or warrants
exercisable for shares of Common Stock representing 4.95% or more of the shares
of Common Stock then outstanding because of a reduction in the number of
outstanding shares of Common Stock as the result of a purchase of Common Stock
by the Company or any of its subsidiaries will also be an "Exempt Person."
However, any such person will no longer be treated as an Exempt Person and will
be deemed an Acquiring Person if such person, together with its affiliates and
associates, thereafter becomes the beneficial owner, of a percentage of the
outstanding Common Stock beneficially owned by such person at any time since
such person first beneficially owned 4.95% or more of the Common Stock,
excluding increases in percentage ownership of Common Stock attributable to any
(x) grant or adjustment of an equity compensation award to such person by the
Company or (y) repurchase or redemption of shares of Common Stock by the
Company.
. . .
The description under "Item 1.01 Entry into a Material Definitive Agreement" is incorporated by reference herein in its entirety.
In connection with the adoption of the Rights Agreement, on January 28, 2013, the Company filed a Certificate of Designation of Series A Junior Participating Preferred Stock with the Secretary of State of the State of Delaware. The terms of the Series A Junior Participating Preferred Stock are described in Item 1.01 of this Current Report on Form 8-K. A copy of the Certificate of Designation of Series A Junior Participating Preferred Stock is attached as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference.
Exhibit
Number Description of Exhibit
3.1 Certificate of Designations of Series A Junior Participating Preferred
Stock.
4.1 Tax Benefit Protection Plan Agreement by and between Integrated
Electrical Services, Inc. and American Stock Transfer & Trust Company,
LLC, as Rights Agent, dated as of January 28, 2013, including the
forms of Certificate of Designation and of Rights Certificate and
Summary of Stockholder Rights Plan attached thereto as Exhibits A, B
and C, respectively.
99.1 Press Release dated January 28, 2013.
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