NEW YORK, June 28 American Apparel Inc
has adopted a one-year shareholder rights plan to help its board
of directors better protect its stockholders and ensure they are
treated fairly, the company said on Saturday.
The company said its action came in response to reports of
rapid accumulation of American Apparel's outstanding common
stock, and in the context of a Securities Exchange Commission
filing in which its ousted founder and chief executive, Dov
Charney, expressed an intent to increase control or influence
over the company.
The move, made by a special committee of the company's
board of directors, is intended to limit the ability of any
group or person, including Charney, "to seize control of the
company without appropriately compensating all American Apparel
The plan, allowing a person or group to acquire up to 15
percent of common stock, is similar to other arrangements
adopted by publicly held companies and is not aimed to prevent
or deter takeover bids that offer fair treatment, the company
Initially, "the rights will be attached to all shares of
common stock" and "each right entitles the holder to purchase
one ten-thousandth of a share of preferred stock at an exercise
price of $2.75," the company said in a statement.
American Apparel's board ousted the 45-year-old Charney as
chairman earlier this month, citing unspecified allegations of
misconduct. It suspended him as president and chief executive
officer, and plans to fire him for cause, following a 30-day
period stipulated in his contract.
(Reporting by Gunna Dickson; Editing by Bernard Orr)