Redeemable Preferred Share

6 Months Ended

Jun. 25, 2017

Temporary Equity Disclosure [Abstract]

Redeemable Preferred Share

Redeemable Preferred Shares

On March 22, 2017, Superior and TPG Growth III Sidewall, L.P. ("TPG") entered into an Investment Agreement pursuant to which Superior agreed to issue a number of shares of Series A Perpetual Convertible Preferred Stock and Series B Perpetual Preferred Stock to TPG for an aggregate purchase price of $150.0 million. On May 22, 2017, Superior issued 140,202 shares of Series A Perpetual Convertible Preferred Stock and 9,798 shares of Series B Perpetual Preferred Stock to TPG, both with a $1,000 stated value per share. The Series A Perpetual Convertible Preferred Stock has a stated value of $1,000 per share, par value of $0.01 per share and liquidation preference over common stock. The Series B Perpetual Preferred Stock has a stated value of $1,000 per share, par value of $0.01 per share, and liquidation preference over Superior common stock. The Series A Perpetual Convertible Preferred Stock is convertible into Superior common stock into a number of shares (determined by dividing the sum of the stated value and any accrued and unpaid dividends by the conversion price of $28.162). The Series B Perpetual Preferred Stock is not convertible into Superior common stock until Superior’s stockholders approve the conversion of the Series B Perpetual Preferred Stock into Series A Perpetual Convertible Preferred Stock. The Series A Perpetual Convertible Preferred Stock and Series B Perpetual Preferred Stock will accrue dividends at a rate of 9 percent per annum, payable at Superior’s election either in-kind or in cash, provided that the Series B Perpetual Preferred Stock will accrue dividends at a rate of 11 percent per annum, payable at Superior’s election either in-kind or in cash, if stockholder approval is not obtained by September 19, 2017. Superior has undertaken to hold a special meeting of stockholders by that date for the purposes of approving the conversion of the Series B Preferred Stock into Series A Preferred Stock. In addition to the dividends, the Series A Perpetual Convertible Preferred Stock and Series B Perpetual Preferred Stock are entitled to participate in dividends on common stock in an amount equal to that which would have been due had the shares been converted into common stock. In addition, on May 22, 2017, Superior’s Board of Directors increased its size from eight to nine directors and appointed Ransom A. Langford, TPG’s designee, as a director.

The company may mandate conversion of the Series A Perpetual Convertible Preferred Stock if the price of the common stock exceeds $84. TPG may redeem their shares upon the occurrence of a change in control, recapitalization, merger, sale of substantially all of the company’s assets, liquidation or delisting of the company’s common stock. At its option, TPG may redeem the shares at any time after May 23, 2024. If redeemed by Superior, the redemption value would be $262.5 million (1.75 times stated value) if redeemed on or before October 22, 2018. If redeemed after October 22, 2018, the redemption value would be the greater of $300 million (2.0 times stated value) or the product of the number of common shares into which the preferred stock could be converted (5.3 million shares currently) and the then current market price of the common stock.