UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 26, 2006
Motorcar Parts of America, Inc.
(Exact name of registrant as specified in its charter)
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New York
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0-23538
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11-2153962 |
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.) |
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2929 California Street, Torrance CA
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90503 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (310) 972-4005
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c)) |
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Item 1.01. |
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Entry into a Material Definitive Agreement. |
In December 2003, the SEC and the United States Attorneys Office brought actions against
Richard Marks, the registrants former President and Chief
Operating Officer. On June 17, 2005, Mr. Marks was sentenced
in connection with the criminal action.
Based upon the terms of agreements the registrant previously entered into with Mr. Marks, the
registrant paid the costs he incurred in connection with the SEC and United States Attorneys
Offices investigation. During fiscal 2006, 2005 and 2004, the registrant incurred costs of
approximately $368,000, $556,000 and $966,000, respectively, pursuant to this indemnification
arrangement. Following the conclusion of these investigations, the registrant sought reimbursement
from Mr. Marks of certain of the legal fees and costs the registrant advanced. On June 26, 2006,
the registrant entered into a Settlement Agreement and Mutual Release with Mr. Marks. Under this
agreement, Mr. Marks is obligated to pay the registrant $682,000 on January 15, 2008. He has also
agreed to make payments of interest at the prime rate plus one percent on June 15, 2007 and January
15, 2008 and to pledge 80,000 shares of the registrants common stock to secure this payment
obligation. Mr. Marks has advised the registrant that the delivery of these pledged shares to the
registrant is in process. If at any time the market price of the stock pledged by Mr. Marks is
less than 125% of Mr. Marks obligation, he is required to pledge additional stock to maintain no
less than the 125% coverage level. The settlement with Mr. Marks was unanimously approved by a
Special Committee comprised of each of the independent members of the registrants Board of
Directors.
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Item 9.01 |
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Financial Statements and Exhibits. |
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Exhibit No. |
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Description |
99.1
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Settlement Agreement and Mutual Release, Secured Promissory Note and Stock Pledge Agreement
each dated as of the date indicated thereon, between the registrant and Richard Marks |