17 Jun Under Armour Establishes New Non-Voting Class C Common Stock
Under Armour, Inc. announced that its board of directors unanimously approved the creation of a new class of non-voting common stock, the Class C common stock. The move is designed to ensure founder and CEO Kevin Plank retains control over the company.
Under Armour expects to issue Class C stock through a stock dividend to all existing holders of Under Armour’s Class A and Class B common stock, which will have the same effect as a two-for-one stock split. Each holder of a share of Class A or Class B stock will receive one share of the new Class C stock. Except for voting rights, the Class C stock will have the same rights as the existing Class A stock. Application to the New York Stock Exchange will be made to list the new Class C stock, which will trade under a different ticker symbol than Under Armour’s existing Class A stock. The ticker symbol for the Class C stock and the record date for the stock dividend have not been determined.
Prior to the dividend occurring, the Board has called a special meeting of Under Armour’s stockholders expected to be held on August 26, 2015 to approve certain amendments to Under Armour’s charter, which are being recommended for approval by the Board in connection with the creation of the Class C stock. The Board acted on the recommendation of a special committee of independent board members. The Board intends that these charter amendments be implemented before the Class C stock dividend is declared. Kevin Plank, Under Armour’s chairman and CEO and controlling stockholder, has agreed to support the proposed changes to the charter.
Plank owns a majority of Under Armour’s Class B stock, which carry 10 times the voting rights of Class A shares. The company’s current dual-voting system was set to end when Plank owned less than 15 percent of the company’s total Class A and B stock. Plank currently owns 16.8 percent of the total stock, or 67 percent of voting shares.
In connection with this special meeting of stockholders, Under Armour also filed a preliminary proxy statement with the Securities and Exchange Commission (SEC), which contains further details regarding the creation and dividend of the Class C stock, the charter amendments, certain other agreements entered into in connection with the creation of Class C stock, and the reasons the Board considers these matters to be in the best interests of stockholders generally. A definitive proxy statement is forthcoming.
The change also comes as Plank signed a noncompete agreement with the company that would bar him from joining a competitor for five years if he left Under Armour, according to a filing with the Securities and Exchange Commission late Monday.
Under Armour also released a letter from Mr. Plank providing his views on the creation of the Class C stock, which has also been filed with the SEC and is available on Under Armour’s website (http://www.uabiz.com).
Under Armour stockholders with any questions or who need assistance regarding how to vote shares should contact Under Armour’s proxy solicitation firm, Georgeson Inc., toll-free at 866-295-4321.