SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 7
to
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Hills Stores Company
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
431692102
(CUSIP Number)
David P. Levin, Esq.
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
(212) 715-9100
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
September 23, 1994
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box: /_/
Check the following box if a fee is being paid with this
statement: /_/
Page 1 of 12 pages
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Amendment No. 7 to Schedule 13D
This Statement amends the Schedule 13D, dated May 6,
1994, as amended on July 22, 1994, July 28, 1994, August 11,
1994, August 17, 1994, August 30, 1994 and September 21, 1994
(the "Schedule 13D"), filed by Dickstein & Co., L.P., Dickstein
International Limited, Dickstein Focus Fund L.P., Dickstein
Partners, L.P., Dickstein Partners Inc. and Mark Dickstein with
respect to the Common Stock, $.01 par value (the "Common Stock"),
of Hills Stores Company, a Delaware corporation (the "Company").
Notwithstanding this Amendment No. 7, the Schedule 13D speaks as
of its date. Capitalized terms used without definition have the
meanings ascribed to them in the Schedule 13D.
I. Item 4 of the Schedule 13D, "Purpose of Transaction," is
amended by adding the following paragraph:
"On September 23, 1994, the Reporting Persons entered
into a Settlement Agreement with the Company, a copy of which is
attached hereto as Exhibit 6 (see Item 7 below). Pursuant to
such Settlement Agreement, the Reporting Persons agreed, among
other things, to discontinue their consent solicitation to
replace four of the eight current directors of the Company."
II. Item 7 of Schedule 13D, "Material to be Filed as Exhibits,"
is amended by adding the following language:
"Exhibit 6 Settlement Agreement dated as of September 23,
1994."
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SIGNATURE
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned certifies that the
information set forth in this Statement is true, complete and
correct.
Date: September 26, 1994
DICKSTEIN & CO., L.P.
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
general partner of Dickstein
Partners, L.P., the general partner
of Dickstein & Co., L.P.
/s/ Alan Cooper
Name: Alan Cooper
DICKSTEIN INTERNATIONAL LIMITED
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
agent of Dickstein International
Limited
/s/ Alan Cooper
Name: Alan Cooper
DICKSTEIN FOCUS FUND L.P.
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
general partner of Dickstein
Partners, L.P., the general partner
of Dickstein Focus Fund L.P.
/s/ Alan Cooper
Name: Alan Cooper
DICKSTEIN PARTNERS, L.P.
By: Alan Cooper, as Vice President
of Dickstein Partners Inc., the
general partner of Dickstein
Partners, L.P.
/s/ Alan Cooper
Name: Alan Cooper
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DICKSTEIN PARTNERS INC.
By: Alan Cooper, as Vice President
/s/ Alan Cooper
Name: Alan Cooper
/s/ Mark Dickstein
Name: Mark Dickstein
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EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
6 Settlement Agreement dated as of
September 23, 1994. 6
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EXHIBIT 6
SETTLEMENT AGREEMENT dated as of September 23,
1994, among HILLS STORES COMPANY, a Delaware
corporation (the "Company"), DICKSTEIN PARTNERS
INC., a Delaware corporation ("Dickstein
Partners"), and the affiliates of Dickstein
Partners listed on the signature page hereof
(each, including Dickstein Partners, a "Member";
the Members are collectively referred to herein as
the "Dickstein Group").
WHEREAS the Members beneficially own an aggregate of
1,279,862 shares (the "Shares") of capital stock of the Company,
consisting of 892,465 shares of Common Stock, par value $.Ol per
share (the "Common Stock"), and 387,397 shares of Series A
Convertible Preferred Stock, par value $.10 per share (the
"Series A Preferred Stock"; together with the Common Stock, the
"Capital Stock");
WHEREAS on August 16, 1994, Dickstein Partners began a
solicitation of written consents from stockholders of the Company
to (i) remove without cause four members of the Company's Board
of Directors (the "Board") and (ii) elect a slate of four
nominees designated by Dickstein Partners (the "Dickstein
Solicitation");
WHEREAS Dickstein Partners proposed that the Company
repurchase up to 5.5 million shares of Capital Stock in exchange
for $27 principal amount per share of notes (which proposal was
subsequently modified);
WHEREAS the Company has determined that a tender offer
(the "Tender Offer") will be made to purchase up to three million
shares of Common Stock at $25 per share in cash (all as described
in the Company's letter to stockholders dated September 21,
1994); and
WHEREAS the parties hereto are desirous of pursuing a
constructive and harmonious relationship and wish to enter into
an agreement with respect to the discontinuance of the Dickstein
Solicitation and certain other matters.
NOW, THEREFORE, in consideration of the foregoing, the
parties hereto agree as follows:
ARTICLE I
Representations
SECTION 1.1. Representations of the Company. The
Company represents to the Dickstein Group that (i) the Company
has full legal right, power and authority to enter into and
perform this Agreement, (ii) the execution and delivery of this
Agreement by the Company and the consummation by it of the
transactions contemplated by this Agreement have been duly
authorized by the Company and (iii) this Agreement constitutes a
valid, binding and enforceable agreement of the Company.
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SECTION 1.2. Representations of the Dickstein Group.
Each Member represents to the Company that (i) such Member has
full legal right, power and authority to enter into and perform
this Agreement, (ii) the execution and delivery of this Agreement
by such Member and the consummation by such Member of the
transactions contemplated by this Agreement have been duly
authorized by such Member, (iii) this Agreement constitutes a
valid, binding and enforceable agreement of such Member, (iv) the
beneficial ownership of Capital Stock set forth in the Statement
on Schedule 13D with respect to the Company filed by such Member,
as amended to the date hereof, is true and correct on the date
hereof and (v) such Member does not have any agreements,
arrangements or understandings with any person (other than
another Member) regarding any possible stockholder proposal with
respect to the Company, with respect to any possible solicitation
of proxies for any matter relating to the Company or with respect
to any other matter relating to the Company, other than the
Dickstein Solicitation.
ARTICLE II
Discontinuance of Solicitation; Support for Company Plan
SECTION 2.1. Termination of Dickstein Solicitation.
Dickstein Partners shall immediately discontinue and terminate
the Dickstein Solicitation.
SECTION 2.2. (a) Support for Company Plan. The
Company shall use its best efforts to consummate the Tender Offer
as promptly as practicable on the terms described in the
Company's letter to stockholders dated September 21, 1994 and,
except as otherwise provided in such letter, the Tender Offer
shall contain only customary conditions. Until the earlier of
March 31, 1995 or the consummation of the Tender Offer, each
Member shall not take any action inconsistent with enabling the
Company to effect the Tender Offer and the other transactions
relating to effecting the Tender Offer described in such letter.
Until the earlier of March 31, 1995 or the consummation of the
Tender Offer, each Member shall vote (or execute a written
consent) in favor of the formation of a new holding company (the
"New Holding Company") (including any vote required to effect any
merger in connection therewith) having a certificate of
incorporation eliminating stockholder action by written consent
except as otherwise provided in the by-laws (which certificate of
incorporation shall otherwise be substantially identical to the
Company's amended and restated certificate of incorporation), if
the Company solicits such a vote, and shall vote (or execute a
written consent) in favor of an amendment to the Company's
amended and restated certificate of incorporation eliminating
stockholder action by written consent except as otherwise
provided in the by-laws (and containing no other amendment), if
the Company solicits such a vote, all as described in such
letter. If the Company does not purchase shares of Common Stock
pursuant to the Tender Offer (in accordance with the terms
thereof) prior to March 31, 1995 (unless the Tender Offer is
made, all conditions to the purchase of shares of Common Stock in
the Tender Offer have been satisfied and no shares of Common
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Stock are tendered), then the Company (or the New Holding
Company, as applicable) shall promptly adopt an amendment to its
by-laws to grant to its stockholders the right to take action
without a meeting by written consent, which by-law amendment
shall not be subject to modification or amendment without
stockholder consent.
(b) Until the earlier of March 31, 1995 or the
consummation of the Tender Offer, any Member (or affiliate) who
holds any of the Company's 10-25% Senior Notes (the "Notes")
shall (or shall cause its affiliate to) grant any waiver
solicited by the Company solely in order to permit the Company to
consummate the Tender Offer. In the event the Company offers any
holder of Notes any fee or other form of consideration in
exchange for any such waiver, the Company shall offer a pro rata
amount of such fee or other consideration to any Member that is a
holder of such Notes and tenders such a waiver.
(c) Each Member shall not, alone or in concert with
others, directly or indirectly, (i) institute, prosecute or
pursue against (or in the right of) the Conpany (or, if
applicable, the New Holding Company) (or any of the Company's or
the New Holding Company's officers, directors, representatives,
trustees, employees, attorneys, advisors, agents, affiliates or
associates) any claim, action, complaint, cause of action, debt,
demand or suit (individually a "Claim" and collectively,
"Claims") with respect to (x) those certain employment agreements
dated as of August 19, 1994, between Hills Department Store
Company and certain executive officers of the Company or that
certain consulting agreement dated as of August 19, 1994, between
Hills Department Store Company and a consultant to the Company
(or any changes thereto resulting from the settlement of any
Claims arising therefrom); (y) the Company's stockholder rights
plan adopted pursuant to the Rights Agreement dated as of August
16, 1994, between the Company and Chemical Bank, as Rights Agent
(or any changes thereto resulting from the settlement of any
Claims arising therefrom) or any stockholder rights plan
substantially identical to the Company's stockholder rights plan
that is adopted by the New Holding Company or (z) the amendments
to the Company's Amended and Restated By-laws adopted by the
Board on August 19, 1994; (ii) make any statement (other than as
required by law based on the advice of counsel) with respect to
the invalidity of any matter set forth in clause (i) above or
(iii) elect to opt out of any settlement of any class-action
litigation relating to any matter set forth in clause (i) above.
(d) The Company shall not, and shall cause its
subsidiaries and, if applicable, the New Holding Company not to,
alone or in concert with others, directly or indirectly,
institute, prosecute or pursue against any Member (or any of
their respective officers, directors, representatives, trustees,
employees, attorneys, advisers, agents, affiliates or associates)
any Claim with respect to the Dickstein Solicitation.
(e) The Company (or its successor) will not hold
its next annual meeting prior to June 1, 1995 nor adopt by-law
amendments related to nomination or election of directors prior
to such annual meeting.
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ARTICLE III
Miscellaneous
SECTION 3.1. Fees and Expenses. The Company shall
promptly pay Dickstein Partners $600,OOO in reimbursement for the
out-of-pocket fees and expenses incurred or paid by or on behalf
of the Dickstein Group prior to the date of this Agreement in
connection with the Dickstein Solicitation. Each party shall pay
the fees and expenses of its investment banking advisers,
attorneys, accountants and other advisors, if any, and all other
expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this
Agreement.
SECTION 3.2. Public Statements. Until the earlier of
March 31, 1995 or the consummation of the Tender Offer, the
Company and the Dickstein Group each agree not to make (and agree
to use their best efforts to cause their officers, directors,
representatives, trustees, employees, attorneys, advisors,
agents, affiliates and associates not to make) any public
statement disparaging the other.
SECTION 3.3. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect, unless such
action would impair the benefits to either party of the remaining
provisions of this Agreement.
SECTION 3.4. Specific Enforcement; No Right to
Terminate; Consent to Jurisdiction. (a) The Company and each
Member acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent or
cure breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof, this being in
addition to any other remedy to which they may be entitled by law
or equity.
(b) The Company and each Member hereby irrevocably
submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York (or if
subject matter jurisdiction is unavailable therein, the Chancery
Court of the State of Delaware) (the "Court") for the purposes of
any Claim arising out of or relating to this Agreement and hereby
waives, and agrees not to assert in any such Claim that it is not
personally subject to the jurisdiction of the Court, that such
Claim is brought in an inconvenient forum or that the venue is
improper. The Company and each Member consents to process being
served in any such Claim by mailing a copy thereof to the address
in effect for notices to it under this Agreement and agrees that
such service upon receipt shall constitute good and sufficient
service of process and notice thereof. Nothing in this paragraph
shall affect or limit any right to serve process in any other
manner permitted by law.
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SECTION 3.5. Entire Agreement. This Agreement contains
the entire understanding of the parties with respect to the
matters covered hereby and this Agreement may be amended only by
an agreement in writing executed by the parties hereto.
SECTION 3.6. Notices. Any notice or other
communication required or permitted to be given hereunder shall
be in writing and shall be effective (a) when personally
delivered or delivered by telex (with correct answerback
received) or telecopy on a business day during normal business
hours at the address or number designated below or (b) on the
business day following the date of mailing by overnight courier,
fully prepaid, addressed to such address, whichever shall first
occur. The addresses for such communications shall be:
If to the Company:
Hills Stores Company
15 Dan Road
Canton, Massachusetts 02021-9128
Attention: Secretary
Telecopy: (617) 821-6966
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attention: Allen Finkelson, Esq.
Telecopy: (212) 474-3700
If to the Dickstein Group:
Dickstein Partners Inc.
9 West 57th Street
Suite 4630
New York, NY 10019
Attention: Alan Cooper, Esq.
Telecopy: (212) 980-7132
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with a copy to:
Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel
919 Third Avenue
New York, New York 10022
Attention: David P. Levin, Esq.
Telecopy: (212) 715-8000
Any party hereto may from time to time change its address for
notices under this Section 3.6 by giving at least 10 days' notice
of such changed address to the other party hereto.
SECTION 3.7. Waivers. No waiver by either party of any
breach of any provision hereof shall be deemed to be a continuing
waiver in the future thereof or a waiver of any other provision
hereof; nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
SECTION 3.8. Headings. The headings herein are for
convenience only, do not constitute a part of this Agreement, and
shall not be deemed to limit or affect any of the provisions
hereof.
SECTION 3.9. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their successors and legal representatives. Neither the Company
or any of its affiliates nor any Member or any of its affiliates
shall assign this Agreement or any rights hereunder without the
prior written consent of the other.
SECTION 3.10. Governing Law. This Agreement shall be
governed by and construed and enforced in accordance with the
internal laws of the State of New York without regard to the
principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement or have caused this Agreement to be duly executed
by their respective authorized officers as of the date hereof.
HILLS STORES COMPANY,
by
______________________________
Name:
Title:
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DICKSTEIN & CO., L.P.,
by Dickstein Partners, L.P.
by Dickstein Partners Inc.
______________________________
Name: Alan S. Cooper
Title: Vice President
DICKSTEIN INTERNATIONAL
LIMITED,
by Dickstein Partners Inc.,
as agent
_____________________________
Name: Alan S. Cooper
Title: Vice President
DICKSTEIN FOCUS FUND L.P.,
by Dickstein Partners, L.P.
by Dickstein Partners Inc.
_____________________________
Name: Alan S. Cooper
Title: Vice President
DICKSTEIN PARTNERS, L.P.,
by Dickstein Partners Inc.
_____________________________
Name: Alan S. Cooper
Title: Vice President
DICKSTEIN PARTNERS INC.
by:
_____________________________
Name: Alan S. Cooper
Title: Vice President
MARK DICKSTEIN
______________________________
Name: Mark Dickstein
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