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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): May 15, 2006
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ADVANCED MARKETING SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-16002 95-3768341
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
5880 Oberlin Drive, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
(858) 457-2500
Registrant's telephone number, including area code
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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 (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| 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 Entry Into a Material Definitive Agreement.
Effective May 15, 2006, the Company entered into a settlement agreement and
general release (the "CNA/Liberty Settlement Agreement") with Columbia Casualty
Company, Continental Casualty Company and CNA Financial Corporation
(collectively, "CNA") and Liberty Mutual Insurance Company ("Liberty" and
together with CNA, the "Carriers"). Pursuant to the CNA/Liberty Settlement
Agreement, among other things, in consideration of the settlement payment
described below the Company has agreed to dismiss a coverage action (the
"Coverage Action") that it initiated against the Carriers for coverage under
certain policies (the "Policies") issued by the Carriers for certain securities
lawsuits, derivative lawsuits and other lawsuits filed against the Company,
certain individuals alleged to be directors and officers of the Company and
certain directors, officers and employees of the Company (collectively, the
"Underlying Matters"). Upon the dismissals by the Company from the Coverage
Action of each of CNA and Liberty, the Company and each of CNA and Liberty will
release the other from any and all claims related to the Coverage Action, the
Underlying Matters, various matters described in the recitals to the CNA/Liberty
Settlement Agreement, and the Policies.
Effective May 17, 2006, the Company entered into a settlement agreement and
full mutual release of all claims (the "Federal Settlement Agreement") with
Federal Insurance Company ("Federal"). Pursuant to the Federal Settlement
Agreement, among other things, in consideration of the settlement payment
described below the Company has agreed to dismiss a coverage action (the
"Coverage Action") that it initiated against Federal for coverage under a
certain policy issued by Federal (the "Federal Policy") for certain securities
lawsuits, derivative lawsuits and other lawsuits filed against the Company,
certain individuals alleged to be directors and officers of the Company and
certain directors, officers and employees of the Company (collectively, the
"Underlying Matters"). Effective as of the date of the Federal Settlement
Agreement, the Company and Federal have each released the other from any and all
claims related to the Coverage Action and the Underlying Matters.
The Carriers and Federal paid the Company the aggregate sum of $10,150,000
in consideration of the above described releases.
A copy of the Settlement Agreement and General Release by and between
Advanced Marketing Services, Inc., and Columbia Casualty Company, Continental
Casualty Company and CNA Financial Corporation and Liberty Mutual Insurance
Company is attached to this report as Exhibit 10.1 and is incorporated herein by
reference.
A copy of the Settlement Agreement and Full Release of All Claims by and
between Advanced Marketing Services, Inc., and Federal Insurance Company is
attached to this report as Exhibit 10.2 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
10.1 Settlement Agreement and General Release, by and between
Advanced Marketing Services, Inc., Columbia Casualty
Company, Continental Casualty Company, CNA Financial
Corporation and Liberty Mutual Insurance Company, effective
as of May 15, 2006
10.2 Settlement Agreement and Full Mutual Release of All Claims,
by and between Advanced Marketing Services, Inc., and
Federal Insurance Company, effective as of May 17, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 19, 2006 Advanced Marketing Services, Inc.
/s/ Gary Lloyd
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Gary Lloyd
Executive Vice President,
General Counsel & Secretary
EXHIBIT LIST
Exhibit No. Exhibit
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10.1 Settlement Agreement and General Release, by and between
Advanced Marketing Services, Inc., Columbia Casualty Company,
Continental Casualty Company, CNA Financial Corporation and
Liberty Mutual Insurance Company, effective as of May 15, 2006
10.2 Settlement Agreement and Full Mutual Release of All Claims, by
and between Advanced Marketing Services, Inc., and Federal
Insurance Company, effective as of May 17, 2006