Item 8.01. Other Events.
On
Under the Sales Agreement, the Company may enter into forward share purchase transactions with one or more of the Forward Purchasers, the terms of which will be set forth in separate forward sale confirmations. In connection with each forward share purchase transaction, the relevant Forward Purchaser or its affiliate will borrow from third parties and, through its affiliated Sales Agent, sell a number of shares of common stock equal to the number of shares of common stock that underlie the particular forward share purchase transaction. The Company refers to each Sales Agent acting as the agent for a Forward Purchaser in this capacity as a "Forward Seller."
The Company will not initially receive any proceeds from the sale of borrowed shares of common stock by a Forward Seller. The Company expects to physically settle each forward share purchase transaction with the relevant Forward Purchaser on one or more dates specified by the Company on or prior to the maturity date of that particular forward share purchase transaction, in which case the Company would expect to receive aggregate net cash proceeds at settlement equal to the number of shares of common stock underlying the particular forward share purchase transaction multiplied by the relevant forward sale price. However, the Company may also elect to cash settle or net share settle a particular forward share purchase transaction. If the Company elects to physically settle any forward share purchase transaction by issuing and delivering shares of common stock, the Company will receive an amount of cash from the relevant Forward Purchaser equal to the product of the forward sale price per share under that particular forward share purchase transaction and the number of shares of common stock underlying the particular forward share purchase transaction. In the event the Company elects to cash settle or net share settle, the settlement amount will be generally related to (1) (a) the average of the volume-weighted average price of common stock on each exchange business day during the relevant valuation period under the particular forward share purchase transaction minus (b) the applicable forward sale price, as specified in the applicable forward sale confirmation, multiplied by (2) the number of shares of common stock underlying the particular forward share purchase transaction subject to such cash settlement or net share settlement. If this settlement amount is a negative number, the relevant Forward Purchaser will pay the Company the absolute value of that amount (in the case of cash settlement) or deliver to the Company a number of shares of common stock having a value equal to the absolute value of such amount (in the event of net share settlement). If this settlement amount is a positive number, the Company will pay the relevant Forward Purchaser that amount (in the case of cash settlement) or deliver to the relevant Forward Purchaser a number of shares of common stock having a value equal to such amount (in the event of net share settlement).
Pursuant to the Sales Agreement, shares of common stock may be offered and sold
in privately negotiated transactions or transactions that are deemed to be
"at-the-market" offerings as defined in Rule 415 under the Securities Act of
1933, as amended, including by ordinary brokers' transactions through the
facilities of the
Upon its acceptance of written instructions from the Company, a Sales Agent will use its commercially reasonable efforts, consistent with its normal trading and sales practices and applicable laws and regulations, to sell common stock under the terms and subject to the conditions set forth in the Sales Agreement. Upon receipt by a Forward Seller of an instruction from the Company requesting that it execute sales of borrowed shares of common stock as a Forward Seller in connection with the applicable forward share purchase transaction and subject to the terms and conditions of the forward sales confirmation, the relevant Forward Purchaser or its affiliate will attempt to borrow, and the relevant Forward Seller will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell, such shares of our common stock to hedge such Forward Purchaser's exposure under such forward share purchase transaction. The Company will pay each Sales Agent a commission of 2% of the gross sales price of all common stock sold through it as Sales Agent for the Company (as agent for the Company, but not as principal) under the sales agreement. In connection with each forward share purchase transaction, the relevant Forward Seller will receive, reflected in a reduced initial forward sale price payable by the relevant Forward Purchaser under its forward share purchase transaction, a commission of 2% of the gross sales price of all borrowed shares of common stock sold during the applicable period by it as a Forward Seller. The Company has no obligation to sell any shares under the Sales Agreement, and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement, subject to the terms thereof.
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The foregoing description of the Sales Agreement does not purport to be complete and is qualified by reference to such agreement, a copy of which is filed as Exhibit 1.1 to this report.
A copy of the opinion of
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits relating to Item 8.01 are filed herewith:
Exhibit No. Description 1.1 ATM Equity OfferingSM Sales Agreement, datedJuly 24, 2020 , amongLithia Motors, Inc. ,BofA Securities, Inc. andJefferies LLC , as Sales Agents, andBank of America, N.A . andJefferies LLC , as Forward Purchasers. 5.1 Opinion ofPerkins Coie LLP . 23.1 Consent ofPerkins Coie LLP (included in Exhibit 5.1). 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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