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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
STAPLES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State of incorporation
or organization)
04-2896127
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Employer
Identification No.)
500 Staples Drive, Framingham, Massachusetts 01702
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(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a
class of pursuant to Section 12(b)
of the Exchange Act and is effective pursuant
to General Instruction A.(c),
please check the following box. [ ]
If this form relates to the registration of a
class of securities pursuant to Section 12(g)
of the Exchange Act and is effective pursuant
to General Instruction A.(d), please check please check the
following box. [ x ]
Securities Act registration statement file number
to which this form relates: n/a
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(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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Securities to be registered pursuant to Section 12(g) of the Act:
Staples.com Common Stock, $0.0006 par value per share
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(Title of Class)
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Item 1: Description of Registrant's Securities to be Registered.
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General
Staples, Inc. ("Staples" or the "Registrant") is authorized to issue
2,105,000,000 shares, consisting of 2,100,000,000 shares of common stock, par
value $0.0006 per share, and 5,000,000 shares of preferred stock, par value
$0.01 per share. The aggregate number of shares of common stock that may be
issued is 2,100,000,000, comprised of 1,500,000,000 shares of Staples Retail and
Delivery common stock ("Staples RD Stock") and 600,000,000 shares of Staples.com
common stock ("Staples.com Stock"). The Registrant may also issue its preferred
stock in series. As of October 28, 2000, the Registrant had 475,583,644 shares
of Staples RD Stock issued, consisting of 453,648,901 shares outstanding and
21,934,743 shares held in Treasury, 14,084,580 shares of Staples.com Stock
issued, consisting of 13,836,448 shares outstanding and 248,132 shares held in
Treasury, and no shares of preferred stock issued or outstanding. The retained
interest of Staples Retail and Delivery ("Staples RD") in Staples.com, the
Registrant's electronic commerce business division ("Staples.com") is currently
represented by 110,351,593 shares of Staples.com Stock.
Staples.com Stock is intended to reflect the performance of Staples.com.
Staples RD Stock is intended to reflect the performance of Staples RD, which
consists of the Registrant's other businesses and a retained interest in
Staples.com. However, the actual market prices of these two classes of stock may
not reflect the performance of the businesses as the Registrant intends. The
Registrant has allocated, for financial reporting purposes, all of its
consolidated assets, liabilities, revenue, expenses and cash flow between
Staples RD and Staples.com. The Registrant publishes combined financial
statements of Staples RD, combined financial statements of Staples.com and
consolidated financial statements of Staples.
The full definitions of the terms "Staples RD" and "Staples.com" are set
forth under "-Mandatory Dividend, Redemption or Exchange on Disposition of All
or Substantially All of the Assets of a Business" below.
The Board of Directors of the Registrant (the "Board of Directors") has the
authority to increase or decrease from time to time the total number of
authorized shares comprising either series of common stock. However, the Board
of Directors could not increase the number of authorized shares of a series
above a number which, when added to all of the authorized shares of the other
series of common stock, would exceed the total authorized number of shares of
common stock. Likewise, the Board of Directors could not decrease the number of
authorized shares of a series below the number of shares of such series then
outstanding.
The Board of Directors has the authority in its sole discretion to issue
authorized but unissued shares of common stock from time to time for any proper
corporate purpose. The Board of Directors has the authority to do so without
stockholder approval, except as provided by Delaware law or the rules and
regulations of any securities exchange on which any series of outstanding common
stock may then be listed.
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DIVIDENDS
The Registrant currently intends to retain all of its earnings for use in
the operation and expansion of its business. The Registrant therefore does not
expect to pay any cash dividends on Staples RD Stock or Staples.com Stock in the
foreseeable future, but is able to change its dividend policy at any time
without stockholder approval, subject to the limitations of Delaware law and the
Registrant's certificate of incorporation. Although the Registrant's revolving
credit agreement restricts the payment of cash dividends, and in any event, the
Registrant does not expect to pay any dividends in the foreseeable future on any
series of common stock, it will otherwise be permitted to pay dividends on:
o Staples RD Stock out of assets of Staples legally available for the payment
of dividends under Delaware law, but the total amounts paid as dividends on
Staples RD Stock cannot exceed the Available Dividend Amount for Staples
RD, and
o Staples.com Stock out of the assets of Staples legally available for the
payment of dividends under Delaware law, while transferring corresponding
amounts to Staples RD in respect of its Retained Interest in Staples.com.
However, the total amounts paid as dividends on Staples.com Stock and the
corresponding amounts transferred to Staples RD in respect of its Retained
Interest in Staples.com cannot exceed the Available Dividend Amount for
Staples.com.
The "Available Dividend Amount" for Staples RD at any time is the amount
that would then be legally available for the payment of dividends on Staples
RD's common stock under Delaware law if (1) Staples RD and Staples.com were each
a separate Delaware corporation, (2) Staples RD had outstanding (a) a number of
shares of common stock, par value $0.0006 per share, equal to the number of
shares of Staples RD Stock that are then outstanding and (b) a number of shares
of preferred stock, par value $0.01 per share, equal to the number of shares of
preferred stock of Staples that have been attributed to Staples RD and are then
outstanding, (3) the assumptions about Staples.com set forth in the next
sentence were true and (4) Staples RD owned a number of shares of Staples.com
Stock equal to the Number of Shares Issuable with Respect to Staples RD's
Retained Interest in Staples.com. Similarly, the "Available Dividend Amount" for
Staples.com at any time is the amount that would then be legally available for
the payment of dividends on Staples.com Stock under Delaware law if Staples.com
were a separate Delaware corporation having outstanding (1) a number of shares
of common stock, par value $0.0006 per share, equal to the number of shares of
Staples.com Stock that are then outstanding plus the Number of Shares Issuable
with Respect to Staples RD's Retained Interest in Staples.com and (2) a number
of shares of preferred stock, par value $0.01 per share, equal to the number of
shares of preferred stock of Staples that have been attributed to Staples.com
and are then outstanding.
The amount legally available for the payment of dividends on common stock
of a corporation under Delaware law is generally limited to (1) the total assets
of the corporation less its total liabilities less (2) the aggregate par value
of the outstanding shares of its common stock and preferred stock. However, if
that amount is not greater than zero, the corporation may also pay dividends out
of the net profits for the corporation for the fiscal year in which the dividend
is declared and/or the preceding fiscal year. As mentioned above, these
restrictions will form the
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basis for calculating the Available Dividend Amounts for Staples RD and
Staples.com. These restrictions will also form the basis for calculating the
aggregate amount of dividends that Staples as a whole can pay on its common
stock, regardless of series. Thus, net losses of either the Staples RD or the
Staples.com Business, and any dividends and distributions on, or repurchases of,
either series of common stock, will reduce the assets legally available for
dividends on both series of common stock.
Subject to the foregoing limitations and to any other limitations set forth
in any future series of preferred stock or in any agreements binding on Staples
from time to time, the Registrant has the right to pay dividends on both, one or
neither series of common stock in equal or unequal amounts, notwithstanding the
performance of either the Staples RD or the Staples.com Business, the amount of
assets available for dividends on either series, the amount of prior dividends
paid on either series, the respective voting rights of each series or any other
factor. Staples expects that determinations to pay dividends on Staples.com
Stock would be based, at least in part, on the financial condition, results of
operations, and regulatory and business capital requirements of Staples.com.
At the time of any dividend on the outstanding shares of Staples.com Stock,
including any dividend required as a result of a disposition of All or
Substantially All of the Assets of Staples.com, but excluding any dividend
payable in shares of Staples.com Stock, the Registrant will credit to Staples
RD, and charge against Staples.com, a corresponding amount in respect of Staples
RD's Retained Interest in Staples.com. Specifically, the corresponding amount
will equal (1) the aggregate amount of such dividend multiplied by (2) a
fraction, the numerator of which is the Number of Shares Issuable with Respect
to Staples RD's Retained Interest in Staples.com and the denominator of which is
the number of shares of Staples.com Stock then outstanding.
Upon any dividend payable in shares of Staples.com Stock, appropriate
adjustment will be made in the Number of Shares Issuable with Respect to Staples
RD's Retained Interest in Staples.com.
MANDATORY DIVIDEND, REDEMPTION OR EXCHANGE ON DISPOSITION OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF A BUSINESS
If the Registrant disposes of All or Substantially All of the Assets of a
Business to one or more persons or entities, in one transaction or a series of
related transactions (collectively, a "Disposition"), and the Disposition is not
an Exempt Disposition as defined below, the Registrant would be required, by the
85th Trading Day after the consummation of such Disposition, to choose one of
the following three alternatives:
o declare and pay a dividend to holders of the series of common stock
that relates to that Business, in cash, securities (other than common
stock of Staples) or other property, or a combination thereof, in an
amount having a Fair Value equal to their Proportionate Interest in
the Net Proceeds of the Disposition;
o redeem from holders of the series of common stock that relates to that
Business, for cash, securities (other than common stock of Staples) or
other property, or a combination thereof in an amount having a Fair
Value equal to their Proportionate Interest in the Net
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Proceeds of the Disposition, all of the outstanding shares of the
relevant series of common stock, or, if such Business continues after
the Disposition to own any material assets other than the proceeds of
the Disposition, a number of shares of such series of common stock
having an aggregate average Market Value, during the 20 consecutive
Trading Day period beginning on the 16th Trading Day immediately
following the date on which the Disposition is consummated, equal to
such Fair Value; or
o issue shares of the series of common stock that does not relate to
that Business in exchange for all of the outstanding shares of the
series of common stock that relates to that Business at a 10% premium,
based on the average Market Value of the relevant series of common
stock as compared to the average Market Value of the other series of
common stock during the 20 consecutive Trading Day period beginning on
the 16th Trading Day immediately following the date on which the
Disposition is consummated.
In connection with any special dividend on, or redemption of, Staples.com
Stock as described above, the Registrant will credit to Staples RD, and charge
against Staples.com, a corresponding amount in respect of Staples RD's Retained
Interest in Staples.com. Specifically, the corresponding amount will equal (1)
the aggregate Fair Value of such dividend or redemption multiplied by (2) a
fraction, the numerator of which is the Number of Shares Issuable with Respect
to Staples RD's Retained Interest in Staples.com and the denominator of which is
the number of shares of Staples.com Stock then outstanding. In addition, in
connection with any redemption of Staples.com Stock as described above, the
Registrant will decrease the Number of Shares Issuable with Respect to Staples
RD's Retained Interest in Staples.com by the same proportion as the
proportionate decrease in outstanding shares of Staples.com caused by such
redemption.
At any time within one year after completing any dividend or partial
redemption of the sort referred to above, the Registrant will have the right to
issue shares of the series of common stock that does not relate to the Business
in question in exchange for outstanding shares of the series of common stock
that relates to that Business at a 10% premium. The exchange ratio that will
result in a 10% premium will be calculated based on the average Market Value of
the relevant series of common stock as compared to the average Market Value of
the other series of common stock during the 20 consecutive Trading Day period
ending on the 5th Trading Day immediately preceding the date on which Staples
mails the notice of exchange to holders of the relevant series. In determining
whether to effect any such exchange following such a dividend or partial
redemption, the Registrant would consider whether the remaining assets of such
Business continue to constitute a viable business, the number of shares of such
common stock remaining issued and outstanding, the per share market price of
such common stock and the ongoing cost of continuing to have a separate series
of such common stock outstanding.
SELECTED TERMS
The following terms used in this document have the meanings specified in
the Registrant's restated certificate of incorporation, as amended, and are set
forth below:
"All or Substantially All of the Assets" of either Business means a portion
of such assets that represents at least 80% of then-current Fair Value of the
assets of such Business.
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"Disposition" means a sale, transfer, assignment or other disposition
whether by merger, consolidation, sale or otherwise, of All or Substantially All
of the Assets of a business to one or more persons or entities, in one
transaction or a series of related transaction.
"Exempt Disposition" means any of the following:
o a Disposition in connection with the liquidation, dissolution or
winding-up of Staples and the distribution of assets to stockholders,
o a Disposition to any person or entity controlled by Staples, as
determined by the Board of Directors in its sole discretion,
o a Disposition by either Business for which Staples receives
consideration primarily consisting of equity securities, including,
without limitation, capital stock of any kind, interest in a general
or limited partnership, interests in a limited liability company or
debt securities convertible into or exchangeable for, or options or
warrants to acquire, any of the foregoing, in each case without regard
to the voting power or other management or governance rights
associated therewith, of an entity that is primarily engaged or
proposes to engage primarily in one or more businesses similar or
complementary to businesses conducted by such Business prior to the
Disposition, as determined by the Board of Directors in its sole
discretion,
o a dividend out of Staples.com's assets to holders of Staples.com Stock
and a transfer of a corresponding amount to Staples RD in respect of
its Retained Interest in Staples.com,
o a dividend out of Staples RD's assets to holders of Staples RD Stock,
and
o any other Disposition, if (1) at the time of the Disposition there are
no shares of Staples RD Stock outstanding, (2) at the time of the
Disposition there are no shares of Staples.com Stock outstanding or
(3) before the 30th Trading Day following the Disposition the
Registrant has mailed a notice stating that it is exercising the right
to exchange outstanding shares of either Staples RD Stock or
Staples.com Stock for newly issued shares of the other series of
common stock as contemplated under "-Optional Exchange of One Series
of Common Stock for the Other Series" below.
"Fair Value" means (1) in the case of cash, the amount thereof, (2) in the
case of capital stock that has been Publicly Traded for a period of at least 15
months, the Market Value thereof and (3) in the case of other assets or
securities, the fair market value thereof as the Board of Directors shall
determine in good faith. Any good faith determination by the Board of Directors
of Fair Value shall be conclusive and binding on all stockholders.
"Market Capitalization" of Staples RD Stock or Staples.com Stock on any
date means the Market Value of a share of such series on such date multiplied by
the number of shares of such series outstanding on such date.
"Market Value" of a share of any class or series of capital stock on any
Trading Day generally means the average of the high and low reported sales price
of a share of such class or
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series on such Trading Day, subject to certain exceptions as described in the
Registrant's restated certificate of incorporation, as amended.
"Nasdaq NMS" means the Nasdaq National Market.
The "Net Proceeds" of a Disposition of any of the assets of a Business
means the positive amount, if any, remaining from the gross proceeds of such
Disposition after any payment of, or reasonable provision, as determined in good
faith by the Board of Directors, which determination will be conclusive and
binding on all stockholders, for: (1) any taxes payable by Staples in respect of
such Disposition, (2) any taxes payable by Staples in respect of any resulting
dividend or redemption, (3) any transaction costs, including, without
limitation, any legal, investment banking and accounting fees and expenses and
(4) any liabilities, contingent or otherwise, of, attributed to or related to,
such Business, including, without limitation, any liabilities for deferred
taxes, any indemnity or guarantee obligations which are outstanding or incurred
in connection with the Disposition or otherwise, any liabilities for future
purchase price adjustments and any obligations with respect to outstanding
securities, other than common stock, attributed to such Business.
"Number of Shares Issuable with Respect to Staples RD's Retained Interest
in Staples.com" on any date means the number of shares of Staples.com Stock that
could be issued by Staples for the account of Staples RD on such date.
"Proportionate Interest" of holders of Staples.com Stock in the Net
Proceeds of a Staples.com Disposition, or in the outstanding shares of common
stock of any subsidiaries holding Staples.com's assets and liabilities, means
the amount of such Net Proceeds, or the number of such shares multiplied by the
number of shares of Staples.com Stock outstanding divided by the Total Number of
Notional Staples.com Shares Deemed Outstanding. "Proportionate Interest" of
holders of Staples RD Stock in the Net Proceeds of a Staples RD Disposition, or
in the outstanding shares of common stock of any subsidiaries holding Staples
RD's assets and liabilities, means the amount of such Net Proceeds, or the
number of such shares.
"Publicly Traded" with respect to any security means a security that is (1)
registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (or any successor provision of law), and (2) listed for
trading on the New York Stock Exchange (or any other national securities
exchange registered under Section 7 of the Exchange Act (or any successor
provision of law)) or listed for trading on the Nasdaq NMS (or any successor
market system).
"Retained Interest" means Staples RD's interest in Staples.com, excluding
the interest represented by outstanding shares of Staples.com Stock.
"Retained Interest Percentage" means the Number of Shares Issuable with
Respect to Staples RD's Retained Interest in Staples.com divided by the Total
Number of Notional Staples.com Shares Deemed Outstanding.
"Staples RD" means (1) all of the businesses, assets and liabilities of
Staples and its subsidiaries, other than the businesses, assets and liabilities
that are part of Staples.com, (2) the rights and obligations of Staples RD under
any inter-Business debt deemed to be owed to or by
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Staples RD, as such rights and obligations are defined in accordance with
policies established from time to time by the Board of Directors and (3) a
proportionate interest in Staples.com, after giving effect to any options,
preferred stock, other securities or debt issued or incurred by Staples and
attributed to Staples.com, equal to the Retained Interest Percentage; provided
that:
(a) Staples may re-allocate assets from one Business to the other Business
in return for other assets or services rendered by that other Business
in the ordinary course of business or in accordance with policies
established by the Board of Directors from time to time, and
(b) if Staples transfers cash, other assets or securities to holders of
shares of Staples.com Stock as a dividend or other distribution on
shares of Staples.com Stock, other than a dividend or distribution
payable in shares of Staples.com Stock, or as payment in a redemption
of shares of Staples.com Stock effected as a result of a Staples.com
Disposition, then the Board of Directors shall re-allocate from
Staples.com to Staples RD cash or other assets having a Fair Value
equal to the aggregate Fair Value of the cash, other assets or
securities so transferred multiplied by a fraction, the numerator of
which shall equal the Number of Shares Issuable with Respect to
Staples RD's Retained Interest in Staples.com on the record date for
such dividend or distribution, or on the date of such redemption, and
the denominator of which shall equal the number of shares of
Staples.com Stock outstanding on such date.
"Staples.com" means (1) the e-commerce business division of Staples,
including all of the businesses, assets and liabilities of Staples and its
subsidiaries that the Board of Directors has, as of November 9, 1999, the date
on which the certificate of amendment to Staples' restated certificate of
incorporation became effective under Delaware law (the "Effective Date"),
allocated to Staples.com, (2) any assets or liabilities acquired or incurred by
Staples or any of its subsidiaries after the Effective Date in the ordinary
course of business and attributable to Staples.com, (3) any businesses, assets
or liabilities acquired or incurred by Staples or any of its subsidiaries after
the Effective Date that the Board of Directors has specifically allocated to
Staples.com or that Staples otherwise allocates to Staples.com in accordance
with policies established from time to time by the Board of Directors and (4)
the rights and obligations of Staples.com under any inter-Business debt deemed
to be owed to or by Staples.com (as such rights and obligations are defined in
accordance with policies established from time to time by the Board of
Directors); provided that
(a) Staples may re-allocate assets from one Business to the other Business
in return for other assets or services rendered by that other Business
in the ordinary course of business or in accordance with policies
established by the Board of Directors from time to time and
(b) if Staples transfers cash, other assets or securities to holders of
shares of Staples.com Stock as a dividend or other distribution on
shares of Staples.com Stock (other than a dividend or distribution
payable in shares of Staples.com Stock), or as payment in a redemption
of shares of Staples.com Stock effected as a result of a Staples.com
Disposition, then the Board of Directors shall re-allocate from
Staples.com to Staples RD cash or other assets having a Fair Value
equal to
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the aggregate Fair Value of the cash, other assets or securities so
transferred multiplied by a fraction, the numerator of which shall
equal the Number of Shares Issuable with Respect to Staples RD's
Retained Interest in Staples.com on the record date for such dividend
or distribution, or on the date of such redemption, and the
denominator of which shall equal the number of shares of Staples.com
Stock outstanding on such date.
"Total Number of Notional Staples.com Shares Deemed Outstanding" means the
number of shares of Staples.com Stock outstanding plus the Number of Shares
Issuable with Respect to Staples RD's Retained Interest in Staples.com.
"Trading Day" means each weekday on which the relevant security (or, if
there are two relevant securities, each relevant security) is traded on the
principal national securities exchange on which it is listed or admitted to
trading or quoted on the Nasdaq NMS or, if such security is not listed or
admitted to trading on a national securities exchange or quoted on the Nasdaq
NMS, traded in the principal over-the-counter market in which it trades.
OPTIONAL EXCHANGE OF ONE SERIES OF COMMON STOCK FOR THE OTHER SERIES
The Registrant has the right, at any time, to issue shares of Staples RD
Stock in exchange for outstanding shares of Staples.com Stock at a premium. The
premium is currently 21.666667% and will decline ratably each quarter through
November 2002 to 15%.
The Registrant also has the right, at any time, to issue shares of
Staples.com Stock in exchange for outstanding shares of Staples RD Stock at a
premium. The premium is currently 21.666667% and will decline ratably each
quarter through November 2002 to 15%.
Notwithstanding the preceding paragraphs, upon the occurrence of a Tax
Event (as defined below), the Registrant will have the right to issue shares of
either series of common stock in exchange for outstanding shares of the other
series of common stock at a 10% premium, regardless of when such a Tax Event
takes place.
The exchange ratio that will result in the specified premium will be
calculated based on the average Market Value of Staples RD Stock as compared to
the average Market Value of Staples.com Stock during the 20 consecutive Trading
Day period ending on, and including, the 5th Trading Day immediately preceding
the date on which the Registrant mails the notice of exchange to holders of the
outstanding shares being exchanged.
In addition, the Registrant has the right, at any time Staples.com Stock
exceeds the 40% of Total Market Capitalization Threshold (as defined below) but
is below the 60% of Total Market Capitalization Threshold (as defined below), to
issue shares of either series of common stock in exchange for outstanding shares
of the other series of common stock on a value for value basis.
The exchange ratio that will result in a value for value exchange will be
based on the average Market Value of the series of the common stock being
exchanged as compared to the average Market Value of the other series of common
stock during the 20 consecutive Trading Day period ending on, and including, the
5th Trading Day immediately preceding the date on which the Registrant mails the
notice of exchange to holders of the outstanding shares being exchanged.
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"Tax Event" means the receipt by Staples of an opinion of a tax advisor
experienced in such matters, who shall not be an officer or employee of Staples
or any of its affiliates, to the effect that, as a result of any amendment to,
or change in, the laws, or any regulations thereunder, of the United States or
any political subdivision or taxing authority thereof or therein including any
proposed change in such regulations announced by an administrative agency), or
as a result of any official or administrative pronouncement or action or
judicial decision interpreting or applying such laws or regulations, it is more
likely than not that for United States federal income tax purposes (1) Staples,
its subsidiaries or affiliates, or any of its successors or its stockholders is
or, at any time in the future, will be subject to tax upon the issuance of
shares of either Staples RD Stock or Staples.com Stock or (2) either Staples RD
Stock or Staples.com Stock is not or, at any time in the future, will not be
treated solely as stock of Staples. For purposes of rendering such opinion, the
tax advisor shall assume that any administrative proposals will be adopted as
proposed. However, in the event a change in law is proposed, the tax advisor
shall render an opinion only in the event of enactment.
Staples.com Stock will exceed the "40% of Total Market Capitalization
Threshold" if the Market Capitalization of the outstanding Staples.com Stock
exceeds 40% of the Total Market Capitalization of both series of common stock
for 30 Trading Days during the 60 consecutive Trading Day period ending on, and
including, the 5th Trading Day immediately preceding the date on which the
Registrant mails the notice of exchange. Staples.com Stock will be below the
"60% of Total Market Capitalization Threshold" if the Market Capitalization of
the outstanding Staples.com Stock is below 60% of the total Market
Capitalization of both series of common stock for 30 Trading Days during the 60
consecutive Trading Day period ending on, and including, the 5th Trading Day
immediately preceding the date on which the Registrant mails the notice of
exchange. If the Registrant has the right, on the date on which the Registrant
mails a notice of exchange as contemplated above, to issue shares of either
series of common stock in exchange for outstanding shares of the other series of
common stock on a value for value basis as described above, the Registrant will
not lose that right even if Staples.com Stock subsequently falls below the 40%
of Total Market Capitalization Threshold or exceeds the 60% of Total Market
Capitalization Threshold.
EXCHANGE FOR STOCK OF A SUBSIDIARY AT STAPLES' OPTION
At any time at which all of the assets and liabilities of a Business (and
no other assets or liabilities of Staples or any subsidiary thereof) are held
directly or indirectly by one or more wholly owned subsidiaries of Staples (the
"Business Subsidiaries"), the Registrant has the right to deliver to holders of
the relevant series of common stock their Proportionate Interest in all of the
outstanding shares of the common stock of the Business Subsidiaries in exchange
for all of the outstanding shares of such series of common stock.
o If the series of common stock being exchanged is Staples RD Stock and
the Number of Shares Issuable with Respect to Staples RD's Retained
Interest in Staples.com is greater than zero, the Registrant will also
issue a number of shares of Staples.com Stock equal to the then
current Number of Shares Issuable with Respect to Staples RD's
Retained Interest in Staples.com and deliver those shares to the
holders of Staples RD Stock or to one of the Business Subsidiaries, at
the Registrant's option.
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o If the series of common stock being exchanged is Staples.com Stock and
the Number of Shares Issuable with Respect to Staples RD's Retained
Interest in Staples.com is greater than zero (so that less than all of
the shares of common stock of the Business Subsidiaries are being
delivered to the holders of Staples.com Stock), the Registrant may
retain the remaining shares of common stock of the Business
Subsidiaries or distribute those shares as a dividend on Staples RD
Stock, at the Registrant's option.
GENERAL DIVIDEND, REDEMPTION AND EXCHANGE PROVISIONS
If the Registrant completes a Disposition of All or Substantially All of
the Assets of a Business, other than an Exempt Disposition, the Registrant would
be required, not more than the 10 Trading Days after the consummation of such
Disposition, to issue a press release specifying (1) the Net Proceeds of such
Disposition, (2) the number of shares of the series of common stock related to
such Business then outstanding, (3) the number of shares of such series of
common stock issuable upon conversion, exchange or exercise of any convertible
or exchangeable securities, options or warrants and the conversion, exchange or
exercise prices thereof and (4) if the Business is Staples.com, the Number of
Shares Issuable with Respect to Staples RD's Retained Interest in Staples.com.
Not more than 40 Trading Days after such consummation, the Registrant would be
required to announce by press release which of the actions specified in the
first paragraph under "- Mandatory Dividend, Redemption or Exchange on
Disposition of All or Substantially All of The Assets of a Business" the
Registrant has determined to take, and upon making that announcement, that
determination would become irrevocable. In addition, the Registrant would be
required, not more than 40 Trading Days after such consummation and not less
than 10 Trading Days before the applicable payment date, redemption date or
exchange date, to send a notice by first-class mail, postage prepaid, to holders
of the relevant series of common stock at their addresses as they appear on the
Registrant's transfer books.
o If the Registrant determines to pay a special dividend, it would be
required to specify in the notice (1) the record date for such
dividend, (2) the payment date of such dividend which cannot be more
than 85 Trading Days after such consummation and (3) the aggregate
amount and type of property to be paid in such dividend and the
approximate per share amount thereof.
o If the Registrant determines to undertake a redemption, it would be
required to specify in the notice (1) the date of redemption, which
cannot be more than 85 Trading Days after such consummation, (2) the
aggregate amount and type of property to be paid as a redemption price
and the approximate per share amount thereof, (3) if less than all
shares of the relevant series of common stock are to be redeemed, the
number of shares to be redeemed and (4) the place or places where
certificates for shares of such series of common stock, properly
endorsed or assigned for transfer, unless the Registrant waives such
requirement, should be surrendered in return for delivery of the cash,
securities or other property to be paid by Staples in such redemption.
o If the Registrant determines to undertake an exchange, it would be
required to specify in the notice (1) the date of exchange, which
cannot be more than 85 Trading Days after such consummation, (2) the
number of shares of the other series of common stock to be issued in
exchange for each outstanding share of such series of common stock and
(3) the
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place or places where certificates for shares of such series of common
stock, properly endorsed or assigned for transfer, unless the
Registrant waives such requirement, should be surrendered in return
for delivery of the other series of common stock to be issued by
Staples in such exchange.
If the Registrant determines to complete any exchange described under "-
Optional Exchange of One Series of Common Stock for the Other Series" or "-
Exchange for Stock of a Subsidiary at Staples' Option," it would be required,
between 10 to 30 Trading Days before the exchange date, to send a notice by
first-class mail, postage prepaid, to holders of the relevant series of common
stock at their addresses as they appear on the Registrant's transfer books,
specifying (1) the exchange date and the other terms of the exchange and (2) the
place or places where certificates for shares of such series of common stock,
properly endorsed or assigned for transfer, unless the Registrant waives such
requirement, should be surrendered for delivery of the stock to be issued or
delivered by Staples in such exchange.
Neither the failure to mail any required notice to any particular holder
nor any defect therein would affect the sufficiency thereof with respect to any
other holder or the validity of any dividend, redemption or exchange.
If the Registrant is redeeming less than all of the outstanding shares of a
series of common stock as described above, it would redeem such shares pro rata
or by lot or by such other method as the Board of Directors determines to be
equitable.
No holder of shares of a series of common stock being exchanged or redeemed
will be entitled to receive any cash, securities or other property to be
distributed in such exchange or redemption until such holder surrenders
certificates for such shares, properly endorsed or assigned for transfer, at
such place as the Registrant specifies, unless the Registrant waives such
requirement. As soon as practicable after the Registrant's receipt of
certificates for such shares, the Registrant would deliver to the person for
whose account such shares were so surrendered, or to the nominee or nominees of
such person, the cash, securities or other property to which such person is
entitled, together with any fractional payment referred to below, in each case
without interest. If less than all of the shares of common stock represented by
any one certificate were to be exchanged or redeemed, the Registrant would also
issue and deliver a new certificate for the shares of such common stock not
exchanged or redeemed.
The Registrant would not be required to issue or deliver fractional shares
of any capital stock or any other fractional securities to any holder of common
stock upon any exchange, redemption, dividend or other distribution described
above. If more than one share of common stock were held at the same time by the
same holder, the Registrant may aggregate the number of shares of any capital
stock that would be issuable or any other securities that would be distributable
to such holder upon any such exchange, redemption, dividend or other
distribution. If there are fractional shares of any capital stock or any other
fractional securities remaining to be issued or distributed to any holder, the
Registrant would, if such fractional shares or securities were not issued or
distributed to such holder, pay cash in respect of such fractional shares or
securities in an amount equal to the Fair Value thereof, without interest.
From and after the date set for any exchange or redemption, all rights of a
holder of shares of common stock that were exchanged or redeemed would cease
except for the right, upon
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surrender of the certificates representing such shares, to receive the cash,
securities or other property for which such shares were exchanged or redeemed,
together with any fractional payment as provided above, in each case without
interest and if such holder was a holder of record as of the close of business
on the record date for a dividend not yet paid, the right to receive such
dividend. A holder of shares of common stock being exchanged would not be
entitled to receive any dividend or other distribution with respect to shares of
the other series of common stock until after the shares being exchanged are
surrendered as contemplated above. Upon such surrender, the Registrant would pay
to the holder the amount of any dividends or other distributions, without
interest, which theretofore became payable with respect to a record date
occurring after the exchange, but which were not paid by reason of the
foregoing, with respect to the number of whole shares of the other series of
common stock represented by the certificate or certificates issued upon such
surrender. From and after the date set for any exchange, the Registrant would,
however, be entitled to treat the certificates for shares of common stock being
exchanged that were not yet surrendered for exchange as evidencing the ownership
of the number of whole shares of the other series of common stock for which the
shares of such common stock should have been exchanged, notwithstanding the
failure to surrender such certificates.
The Registrant would pay any and all documentary, stamp or similar issue or
transfer taxes that might be payable in respect of the issue or delivery of any
shares of capital stock and/or other securities on any exchange or redemption
described herein. The Registrant would not, however, be required to pay any tax
that might be payable in respect of any transfer involved in the issue or
delivery of any shares of capital stock and/or other securities in a name other
than that in which the shares so exchanged or redeemed were registered, and no
such issue or delivery will be made unless and until the person requesting such
issue pays to Staples the amount of any such tax or establishes to the
Registrant's satisfaction that such tax has been paid.
The Registrant may, subject to applicable law, establish such other rules,
requirements and procedures to facilitate any dividend, redemption or exchange
contemplated as described above as the Board of Directors may determine to be
appropriate under the circumstances.
VOTING RIGHTS
Holders of Staples RD Stock and Staples.com Stock vote together as one
class on all matters as to which common stockholders generally are entitled to
vote, unless a separate class vote is required by applicable law. On all such
matters for which no separate vote is required, each outstanding share of
Staples RD Stock entitles the holder to one vote and each outstanding share of
Staples.com Stock entitles the holder to one vote.
When holders of Staples RD Stock and Staples.com Stock vote together as a
single class, the holders of the series of common stock having a majority of the
votes, which is currently the holders of Staples RD Stock, will be in a position
to control the outcome of the vote even if the matter involves a conflict of
interest between the holders of Staples RD Stock and holders of Staples.com
Stock.
The Delaware General Corporation Law requires a separate vote of holders of
shares of common stock of any series on any amendment to the certificate of
incorporation if the amendment would increase or decrease the par value of the
shares of such series or alter or
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change the powers, preferences or special rights of the shares of such series so
as to affect them adversely.
The Registrant will set forth the number of outstanding shares of Staples
RD Stock and Staples.com Stock in the Registrant's annual and quarterly reports
filed pursuant to the Exchange Act, and disclose in any proxy statement for a
stockholder meeting the number of outstanding shares and per share voting rights
of Staples RD Stock and Staples.com Stock.
LIQUIDATION
In the event of the Registrant's dissolution, liquidation or winding up,
whether voluntary or involuntary, the holders of Staples RD Stock and
Staples.com Stock will be entitled to receive the Registrant's assets remaining
for distribution to holders of common stock on a per share basis in proportion
to the liquidation units per share of such series, after payment or provision
for payment of the Registrant's debts and other liabilities and the payment of
full preferential amounts to which holders of any preferred stock are entitled.
Neither a merger nor consolidation of Staples into or with any other
corporation, nor any sale, transfer or lease of any part of the Registrant's
assets, will, alone, be deemed a liquidation or winding up of Staples, or cause
the dissolution of Staples, for purpose of these liquidation provisions.
Each share of Staples.com Stock will have one liquidation unit. Each share
of Staples RD Stock will have a number of liquidation units equal to the
quotient of the average Market Value of a share of Staples RD Stock over the
last 20 consecutive Trading Day period ending September 4, 2000 divided by the
average Market Value of a share of Staples.com Stock over the same period.
After the number of liquidation units to which each share of Staples RD
Stock is entitled has been calculated in accordance with this formula, that
number will not be changed without the approval of holders of the series of
common stock adversely affected except as described below. As a result, after
the date of the calculation of the number of liquidation units to which the
Staples RD Stock is entitled, the liquidation rights of the holders of the
respective series of tracking stock will likely not bear any relationship to the
relative market values or the relative voting rights of the two series at or
near the time of liquidation. The Registrant considers that liquidation is a
remote contingency.
No holder of Staples.com Stock will have any special right to receive
specific assets of the Staples.com Business and no holder of Staples RD Stock
will have any special right to receive specific assets of the Staples RD
Business upon the Registrant's dissolution, liquidation or winding up.
If the Registrant subdivides or combines the outstanding shares of either
series of common stock or declares a dividend or other distribution of shares of
either series of common stock to holders of that series of common stock, the
number of liquidation units of such series of common stock will be appropriately
adjusted. This adjustment will be made by the Registrant's Board of Directors,
to avoid any dilution in the relative liquidation rights of any series of common
stock.
STAPLES RD'S RETAINED INTEREST IN STAPLES.COM
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The number of shares of Staples.com Stock that Staples may issue for the
account of Staples RD in respect of its Retained Interest is referred to as the
"Number of Shares Issuable with Respect to Staples RD's Retained Interest in
Staples.com."
In this document, the Registrant calls the percentage interest in
Staples.com intended to be represented at any time by the outstanding shares of
Staples.com Stock the "Outstanding Interest Percentage," and the Registrant
calls the remaining percentage interest in Staples.com intended to be
represented at any time by Staples RD's Retained Interest in Staples.com the
"Retained Interest Percentage." At any time, the Outstanding Interest Percentage
equals the number of shares of Staples.com Stock outstanding divided by the
Total Number of Notional Staples.com Shares Deemed Outstanding, expressed as a
percentage, and the Retained Interest Percentage equals the Number of Shares
Issuable with Respect to Staples RD's Retained Interest in Staples.com divided
by the Total Number of Notional Staples.com Shares Deemed Outstanding, expressed
as a percentage. The sum of the Outstanding Interest Percentage and the Retained
Interest Percentage always equals 100%.
NUMBER OF SHARES ISSUABLE WITH RESPECT TO STAPLES RD'S RETAINED INTEREST IN
STAPLES.COM.
ATTRIBUTION OF ISSUANCES OF STAPLES.COM STOCK. Whenever the Registrant
decides to issue shares of Staples.com Stock, or options therefor, it would
determine, in its sole discretion, whether to attribute that issuance, and the
proceeds thereof, to Staples RD in respect of its Retained Interest in
Staples.com in a manner analogous to a secondary offering of common stock of a
subsidiary owned by a corporate parent or to Staples.com in a manner analogous
to a primary offering of common stock. If the Registrant issues any shares of
Staples.com Stock and attributes that issuance, and the proceeds thereof, to
Staples RD in respect of its Retained Interest in Staples.com, the Number of
Shares Issuable with Respect to Staples RD's Retained Interest in Staples.com
would be reduced by the number of shares so issued, the number of outstanding
shares of Staples.com Stock would be increased by the same number, the Total
Number of Notional Staples.com Shares Deemed Outstanding would remain unchanged,
the Retained Interest Percentage would be reduced and the Outstanding Interest
Percentage would be correspondingly increased. If the Registrant instead
attributes that issuance, and the proceeds thereof, to Staples.com, the Number
of Shares Issuable with Respect to Staples RD's Retained Interest in Staples.com
would remain unchanged, the number of outstanding shares of Staples.com Stock
and the Total Number of Notional Staples.com Shares Deemed Outstanding would be
increased by the number of shares so issued, the Retained Interest Percentage
would be reduced and the Outstanding Interest Percentage would be
correspondingly increased.
ISSUANCE OF STAPLES.COM STOCK AS DISTRIBUTIONS ON STAPLES RD STOCK. The
Registrant reserves the right to issue shares of Staples.com Stock as a
distribution on Staples RD Stock, although the Registrant does not currently
intend to do so. If the Registrant did so, it would attribute that distribution
to Staples RD in respect of its Retained Interest in Staples.com. As a result,
the Number of Shares Issuable with Respect to Staples RD's Retained Interest in
Staples.com would be reduced by the number of shares so distributed, the number
of outstanding shares of Staples.com Stock would be increased by the same
number, the Total Number of Notional Staples.com Shares Deemed Outstanding would
remain unchanged, the Retained
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Interest Percentage would be reduced and the Outstanding Interest Percentage
would be correspondingly increased. If instead the Registrant issued shares of
Staples.com Stock as a distribution on Staples.com Stock, it would attribute
that distribution to Staples.com, in which case it would proportionately
increase the Number of Shares Issuable with Respect to Staples RD's Retained
Interest in Staples.com. As a result, the Number of Shares Issuable with Respect
to Staples RD's Retained Interest in Staples.com and the Total Number of
Notional Staples.com Shares Deemed Outstanding would each be increased by the
same percentage as the number of outstanding shares of Staples.com Stock is
increased and the Retained Interest Percentage and Outstanding Interest
Percentage would remain unchanged.
DIVIDENDS ON STAPLES.COM STOCK. At the time of any dividend on the
outstanding shares of Staples.com Stock, including any dividend required as a
result of a Disposition of All or Substantially All of the Assets of
Staples.com, but excluding any dividend payable in Staples.com Stock, the
Registrant will credit to Staples RD, and charge against Staples.com, a
corresponding amount in respect of Staples RD's Retained Interest in
Staples.com. Specifically, the corresponding amount will equal (1) the aggregate
amount of such dividend multiplied by (2) a fraction, the numerator of which is
the Number of Shares Issuable with Respect to Staples RD's Retained Interest in
Staples.com and the denominator of which is the number of shares of Staples.com
Stock then outstanding.
REPURCHASE OF STAPLES.COM STOCK. If the Registrant decides to repurchase
shares of Staples.com Stock, it would determine, in the Registrant's sole
discretion, whether to attributes that repurchase, and the cost thereof, to
Staples RD in a manner analogous to a purchase of common stock of a subsidiary
by a corporate parent or to Staples.com in a manner analogous to an issuer
repurchase. If the Registrant repurchases shares of Staples.com Stock and
attributes that repurchase, and the cost thereof, to Staples RD, the Number of
Shares Issuable with Respect to Staples RD's Retained Interest in Staples.com
would be increased by the number of shares so purchased, the number of
outstanding shares of Staples.com Stock would be decreased by the same number,
the Total Number of Notional Staples.com Shares Deemed Outstanding would remain
unchanged, the Retained Interest Percentage would be increased and the
Outstanding Interest Percentage would be correspondingly decreased. If the
Registrant instead attributes that repurchase, and the cost thereof, to
Staples.com, the Number of Shares Issuable with Respect to Staples RD's Retained
Interest in Staples.com would remain unchanged, the number of outstanding shares
of Staples.com Stock and the Total Number of Notional Staples.com Shares Deemed
Outstanding would be decreased by the number of shares so repurchased, the
Retained Interest Percentage would be increased and the Outstanding Interest
Percentage would be correspondingly reduced.
TRANSFERS OF CASH OR OTHER PROPERTY BETWEEN STAPLES RD AND STAPLES.COM. The
Registrant may, in its sole discretion, determine to transfer cash or other
property of Staples.com to Staples RD in return for a decrease in Staples RD's
Retained Interest in Staples.com in a manner analogous to a return of capital or
to transfer cash or other property of Staples RD to Staples.com in return for an
increase in Staples RD's Retained Interest in Staples.com in a manner analogous
to a capital contribution. If the Registrant determines to transfer cash or
other property of Staples.com to Staples RD in return for a decrease in Staples
RD's Retained Interest in Staples.com, the Number of Shares Issuable with
Respect to Staples RD's Retained Interest in Staples.com and the Total Number of
Notional Staples.com Shares Deemed Outstanding would
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each be decreased by an amount equal to the Fair Value of such cash or other
property divided by the Market Value of a share of Staples.com Stock on the day
of transfer, the number of outstanding shares of Staples.com Stock would remain
unchanged, the Retained Interest Percentage would be decreased and the
Outstanding Interest Percentage would be correspondingly increased. If the
Registrant instead determines to transfer cash or other property of Staples RD
to Staples.com in return for an increase in Staples RD's Retained Interest in
Staples.com, the Number of Shares Issuable with Respect to Staples RD's Retained
Interest in Staples.com and the Total Number of Notional Staples.com Shares
Deemed Outstanding would each be increased by an amount equal to the Fair Value
of such cash or other property divided by the Market Value of a share of
Staples.com Stock on the day of transfer, the number of outstanding shares of
Staples.com Stock would remain unchanged, the Retained Interest Percentage would
be increased and the Outstanding Interest Percentage would be correspondingly
decreased.
The Registrant may not attribute issuances of Staples.com Stock to Staples
RD, transfer cash or other property of Staples.com to Staples RD in return for a
decrease in its Retained Interest in Staples.com or take any other action to the
extent that doing so would cause the Number of Shares Issuable with Respect to
Staples RD's Retained Interest in Staples.com to decrease below zero.
EFFECTIVENESS OF CERTAIN TERMS
The terms described under "- Dividends," "- Mandatory Dividend, Redemption
or Exchange on Disposition of All or Substantially All of the Assets of a
Business," "- Optional Exchange of One Series of Common Stock for the Other
Series," "- Exchange for Stock of a Subsidiary at Staples' Option," "- General
Dividend, Redemption and Exchange Provisions," "- Voting Rights" and "-
Liquidation" above apply only when there are shares of both series of common
stock outstanding.
Item 2: EXHIBITS.
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The following exhibits are incorporated by reference as indicated below:
1. Certificate of Amendment to Certificate of Incorporation of the
Registrant, incorporated by reference to Annex II to the Registrant's
Definitive Proxy Statement filed as of October 12, 1999.
2. Amended and Restated Certificate of Incorporation of the Registrant,
as amended, incorporated by reference to Exhibit 3.1 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
January 30, 1999.
3. Amended and Restated Bylaws of the Registrant, incorporated by
reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended May 3, 1997.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
Staples, Inc.
By:/s/ Jack A. VanWoerkom
----------------------
Jack A. VanWoerkom
Senior Vice President
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