SEC Form 4 · accession 0000899243-16-012471

Centric Brands Inc. · CTRC

Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗

Table I — non-derivative securities

Table II — derivative securities

Explanation of responses

• F1The reporting person contributed his Subordinated Convertible Note, dated as of September 30, 2013 (the "Original Note"), in the original principal amount of $14,225,317.30, together with all accrued cash and paid-in-kind interest thereon, pursuant to the Rollover Agreement, dated as of September 8, 2015, by and among Differential Brands Group Inc. (formerly known as Joe's Jeans Inc.) (the "Issuer") and certain investors, including the reporting person, in exchange for (i) 418,024 shares of the Issuer's common stock, $0.10 par value (the "Common Stock"), (ii) $3,753,238.83 in cash and (iii) a new Subordinated Convertible Note, dated as of January 8, 2016 (the "New Note"), with an original principal amount equal to $8,418,382.94.
• F2The Original Note was convertible at the reporting person's option at any time after September 30, 2015, into cash, shares of Common Stock or a combination of cash and Common Stock at the Issuer's election. If the Original Note were converted into cash, the reporting person would have received cash in an amount equal to the product of the market price of the Common Stock, subject to adjustment as set forth in the Original Note (which is the sum of the closing sales price of the Common Stock on each of the 20 consecutive trading days ending and including the trading day immediately preceding the conversion date, the Issuer optional prepayment date or the maturity date of the Original Note, as the case may be, divided by 20) multiplied by the quotient of the principal amount of the Original Note divided by the conversion price, which was $1.78 prior to the Issuer's one-for-thirty reverse stock split, subject to adjustment as set forth therein,
• F3(Continued from footnote 2) minus any Issuer optional prepayment amounts paid to the reporting person. If the Original Note were converted into Common Stock, the reporting person would have received Common Stock in an amount equal to the principal amount of the Original Note divided by the conversion price, which was $1.78 prior to the Issuer's one-for-thirty reverse stock split, subject to adjustment of the conversion price as set forth therein and for any prior prepayment of the Original Note. If the Original Note were converted into a combination of cash and Common Stock, the Issuer would have calculated the cash portion and the stock portion in the same respective manners as described above.
• F4(Continued from footnote 3) Interest accrued on the Original Note at a rate of 10% per annum, and was payable 7.68% in cash and 2.32% in "payable-in-kind" interest by issuing additional convertible notes until November 30, 2014 and thereafter was payable in cash, subject to certain financial requirements set forth in the Original Note.
• F5The New Note is convertible at the reporting person's option at any time into cash, shares of Common Stock or a combination of cash and Common Stock at the Issuer's election. If the New Note is converted into cash, the reporting person will receive cash in an amount equal to the product of the market price of the Common Stock, subject to adjustment as set forth therein (which is the sum of the closing sales price of the Common Stock on each of the 20 consecutive trading days ending and including the trading day immediately preceding the conversion date, the Issuer optional prepayment date or the maturity date of the New Note, as the case may be, divided by 20) multiplied by the quotient of the principal amount of the New Note divided by the conversion price, which is $13.95, subject to adjustment as set forth in the New Note, minus any Issuer optional prepayment amounts paid to the reporting person.
• F6(Continued from footnote 5) If the New Note is converted into Common Stock, the reporting person will receive Common Stock in an amount equal to the principal amount of the New Note divided by the conversion price, which is $13.95, subject to adjustment of the conversion price as set forth in the New Note and for any prior prepayment of the New Note. If the New Note is converted into a combination of cash and Common Stock, the Issuer will calculate the cash portion and the stock portion in the same respective manners as described above. Interest accrues on the New Note at a rate of 6.5% per annum. Interest will be payable 50% in cash and 50% in "payable-in-kind" interest by issuing additional convertible notes, or 100% in cash at the Issuer's discretion. In the event that for any reason the Issuer is not able to pay all or any portion of the New Note in cash, then the Issuer shall be required to fulfill its conversion obligations in shares of Common Stock for any portion that the
• F7(Continued from footnote 6) Issuer cannot pay in cash.
• F8Each restricted stock unit represents a contingent right to receive one share of the Common Stock unless the Issuer is unable to obtain stockholder approval of a new equity incentive plan covering such awards (in which case the restricted stock units will be settled in cash).
• F9The restricted stock units will vest in three equal, annual installments beginning on January 28, 2017, subject to the reporting person's continuous employment.