8-KShareholder MattersCorporate ChangesOther Events+1

AMERICAN EXPRESS CO 8-K Report, Rights Modification (Nov 12, 2014)

Filed November 12, 2014For Securities:AXP

Summary

American Express Company (AXP) filed an 8-K report on November 11, 2014, detailing the issuance of 750,000 Depositary Shares, each representing a 1/1,000th interest in a Series B Preferred Share, on November 10, 2014. This issuance was made under a Certificate of Amendment filed on November 7, 2014, which established the terms of the 5.200% Fixed Rate / Floating Rate Non-Cumulative Perpetual Preferred Shares, Series B. The primary impact for investors is the introduction of these new preferred shares and their associated terms, including potential restrictions on common stock dividends if preferred dividends are not met.

Key Highlights

  • 1American Express issued 750,000 Depositary Shares representing interests in Series B Preferred Shares on November 10, 2014.
  • 2The Series B Preferred Shares are perpetual, non-cumulative, and have a fixed-to-floating rate dividend structure at 5.200%.
  • 3The issuance was formalized by a Certificate of Amendment filed on November 7, 2014, amending the company's Restated Certificate of Incorporation.
  • 4Each Depositary Share represents a 1/1,000th interest in a Series B Preferred Share.
  • 5The Series B Preferred Shares carry a liquidation preference of $1,000,000 per share.
  • 6Failure to pay full dividends on the Series B Preferred Shares imposes restrictions on the company's ability to declare or pay dividends, make distributions, or redeem common stock.

Frequently Asked Questions

The main event was the issuance of 750,000 Depositary Shares, each representing an interest in American Express's newly established Series B Preferred Shares.

The Series B Preferred Shares are perpetual, non-cumulative, and have a dividend rate that starts at 5.200% and can adjust to a floating rate. They also have a significant liquidation preference of $1,000,000 per share.

The primary impact on common shareholders is that if American Express fails to declare and pay full dividends on the Series B Preferred Shares, the company will face restrictions on its ability to pay dividends or make distributions on its common stock.

Depositary Shares and Receipts were used to facilitate the offering and trading of the Series B Preferred Shares, with each Depositary Share representing a fraction (1/1,000th) of a Series B Preferred Share.