Business
Purple Special Committee Takes Action to Protect Rights of All Shareholders in Face of Coliseum Capital Management’s Effort to Gain Control of the Company
Issues Cumulative Voting Preferred Stock to Provide Purple Shareholders with the Ability to Obtain Proportional Representation on Company’s Board of
About this update from Purple Innovation, Inc.
[{"type":"text","content":"\nIssues Cumulative Voting Preferred Stock to Provide Purple Shareholders with the Ability to Obtain Proportional Representation on Company’s Board of Directors\n\n LEHI, Utah--(BUSINESS WIRE)--\nPurple Innovation, Inc. (NASDAQ: PRPL) (\"Purple\" or the “Company”), a comfort innovation company known for creating the \"World's First No Pressure® Mattress,\" today announced that the Special Committee of its Board of Directors (the “Board”) has declared a dividend of one new Proportional Representation Preferred Linked Stock (“PRPLS”) for each 100 shares of Purple common stock (“Common Stock”) owned by Purple’s shareholders. Each PRPLS will vote together with the Common Stock in the election of directors, and related matters, and carry 10,000 votes each.\n\nHolders of PRPLS will be entitled to allocate their votes among the nominees in director elections on a cumulative basis. PRPLS holders can allocate all, none, or a portion of their votes to each director nominee up for election at the Company’s meetings of shareholders. As an example, shareholders who collectively own 30% of Purple’s Common Stock will be able to use the voting rights associated with their PRPLS to effectively elect approximately 30% of the members of the Board.\n\n“The purpose of the PRPLS is to protect all shareholders and treat them equally,” said Paul J. Zepf, Purple Innovation’s Chairman of the Board. “Purple shareholders will have the opportunity for proportional representation on the Purple Board of Directors. By cumulating their PRPLS votes for certain director nominees, public shareholders can support the election of directors they believe will act independently to represent the interests of all shareholders in the boardroom, roughly in proportion to their collective ownership in the Company.”\n\nThe Board noted that a single stockholder, Coliseum Capital Management, LLC (“Coliseum”), owns approximately 45% of the Common Stock. On February 13, Coliseum provided notice to the Company that it intends to nominate a slate of five director candidates for election to the Board, which currently has seven members. Prior to the issuance of the PRPLS, Coliseum might have been able to single-handedly nominate and elect all of the directors on the Board, including the five nominees Coliseum has selected.\n\nWith the issuance of PRPLS, all shareholders, including th...