STAPLES,INC. (NASDAQ:SPLS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously disclosed, on June28, 2017, Staples,Inc. (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Arch Parent Inc. (“Parent”) and Arch Merger Sub Inc., a wholly owned subsidiary of Parent (“Merger Sub”), providing for the merger of Merger Sub with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent (the “Merger”). Parent and Merger Sub are beneficially owned by funds managed by Sycamore Partners Management, L.P.
In connection with the Merger, the Company has amended its severance benefits agreements with Shira Goodman, Christine Komola, Mark Conte, and Michael Williams (the “Executives”), to which each Executive is entitled to receive certain severance benefits if he or she experiences a “qualified termination” (as such term is defined in the severance benefits agreement). The amendment to the Executives’ severance benefits agreements provides that the Company may not terminate such agreements, with or without 90 days’ advance written notice, within the twenty-four month period immediately following the closing of a change in control (including the Merger), and that the Company will require any successor or transferee that directly or indirectly acquires all or substantially all of the business or assets of the Company or the business unit of the Company for which the applicable Executive performs services expressly to assume and agree to perform such agreement through such extended term to the same extent that the Company would be required to perform under the agreement if no such succession or transfer had taken place. The foregoing description is qualified by reference to the full text of the form of amendment filed as Exhibit10.1 attached hereto, and incorporated herein by reference.
In connection with the Merger, the Company has also amended its agreements governing the 2017-2019 performance share awards granted to each of Ms.Goodman, Ms.Komola and Mr.Williams to provide that the Company will pay to each such individual an amount sufficient to “gross up” such individual (in whole or in part) for any excise taxes under Section4999 of the Internal Revenue Code of 1986, as amended (the “Code”), that may become payable by such individual as a result of such individual becoming entitled to any amounts or benefits that would be “excess parachute payments” to the parachute payment provisions of Section280G of the Code. The aggregate amount of such “gross up” payments shall not exceed (i)in the case of Ms.Goodman, $8,600,333, (ii)in the case of Ms.Komola, $3,318,651, and (iii)in the case of Mr.Williams, $1,102,417. The foregoing description is qualified by reference to the full text of the form of amendment filed as Exhibit10.2 attached hereto, and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
The exhibit listed on the ExhibitIndex immediately preceding such exhibit is filed as part of this Current Report on Form8-K.
Safe Harbor for Forward-Looking Statements
Statements in this filing regarding the proposed transaction between Parent and the Company, the expected timetable for completing the transaction and any other statements about Parent and the Company managements’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” estimates and similar expressions) should also be considered to be forward looking statements, although not all forward-looking statements contain these identifying words. Readers should not place undue reliance on these forward-looking statements. The Company’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the Company may not be able to predict and may not be within the Company’s control. Factors that could cause such differences include, but are not limited to, (i)the risk that the proposed Merger may not be completed in a timely manner, or at all, which may adversely affect the Company’s business and the price of its common stock, (ii)the failure to satisfy all of the closing conditions of the proposed Merger, (iii)the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger